Future-Oriented Statement of Operations for the Year Ending March 31, 2019
Federal Economic Development Agency for Southern Ontario
Future-Oriented Statement of Operations (unaudited)
for the year ending March 31, 2019
(in thousands of dollars)
|Expenses (Note 6)|
Economic Development in Southern Ontario
Community Economic Development
Expenses incurred on behalf of government
|Net cost of operations before government funding and transfers||$200,432||$134,916|
The accompanying notes form an integral part of the Future-Oriented Statement of Operations.
Notes to the Future-Oriented Statements of Operations (unaudited)
1. Departmental Core Responsibilities
In 2018-19, the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) will transition from a reporting framework comprising Strategic Outcomes and a Program Alignment Architecture to a Departmental Results Framework comprising Core Responsibility and Departmental Results (see note 6). For more information on FedDev Ontario's Core Responsibility, see the "Planned Results" section of the Departmental Plan.
2. Methodology and Significant Assumptions
The Future-Oriented Statement of Operations has been prepared on the basis of government priorities and departmental plans as described in the Departmental Plan.
The information in the forecast results for fiscal year 2017–18 is based on actual results as at November 30, 2017 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2018–19 fiscal year.
The main assumptions underlying the forecasts are as follows:
- FedDev Ontario's activities will remain substantially the same as in the previous year.
- Expenses and revenues, including the determination of amounts internal and external to the government, are based on past experience. The general historical pattern is expected to continue.
- Allowances for uncollectible accounts are based on historical experience. The general historical pattern is expected to continue.
- Transfer payment spending is based on historical spending patterns and anticipated stakeholder requirements.
These assumptions are made as at November 30, 2017.
3. Variations and Changes to the Forecasted Financial Information
Although every attempt has been made to forecast final results for the remainder of 2017–18 and for 2018–19, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.
In preparing this Future-Oriented Statement of Operations the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and are continually evaluated.
Factors that could lead to material differences between the Future-Oriented Statement of Operations and the historical statement of operations include:
- economic conditions may affect the collectability of loan receivables.
- value of the Canadian dollar and its impact on the cost of imported goods.
- implementation of new collective agreements.
- other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.
After the Departmental Plan is tabled in Parliament, FedDev Ontario will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Results Report.
4. Summary of Significant Accounting Policies
The Future-Oriented Statement of Operations has been prepared using the Government's accounting policies that came into effect for the 2017–18 fiscal year which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.
Significant accounting policies are as follows:
- FedDev Ontario records expenses on an accrual basis.
- Expenses for FedDev Ontario's operations are recorded when goods are received or services are rendered, including services provided without charge for accommodation, employee contributions to health and dental insurance plans, legal services and worker's compensation, which are recorded as expenses at their estimated cost. Vacation pay and compensatory leave, as well as severance benefits, are accrued and expenses are recorded as the benefits are earned by employees under their respective terms of employment.
- Transfer payments are recorded as expenses when the recipients have met all the eligibility criteria and the transfers are authorized by March 31. In the case of transfers that do not form part of an existing program, the transfers are considered to be authorized when the government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.
- Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable, provision for valuation on loans, investments and advances and inventory obsolescence or liabilities, including contingent liabilities and environmental liabilities, to the extent the future event is likely to occur and a reasonable estimate can be made.
- Expenses also include amortization of tangible capital assets, which are capitalized at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset.
- Effective 2017–18, in accordance with Government of Canada accounting policies, FedDev Ontario records unconditionally repayable loans at face value since loans have been determined to not have significant concessionary terms. As a result, FedDev Ontario no longer records revenues on the unconditionally repayable loan portfolio.
5. Parliamentary Authorities
FedDev Ontario is financed by the Government of Canada through parliamentary authorities. Financial reporting of parliamentary authorities provided to FedDev Ontario differs from financial reporting according to generally accepted accounting principles because authorities are based mainly on cash flow requirements. Items recognized in the Future-Oriented Statement of Operations in one year may be funded through parliamentary authorities in prior, current, or future years. Accordingly, FedDev Ontario has a different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:
6. Comparative Information
The 2017–18 expenses are presented by Program in accordance with FedDev Ontario's previous Program Alignment Architecture, whereas expenses for 2018–19 are presented by Core Responsibility in accordance with FedDev Ontario's new Departmental Results Framework.
|Net cost of operations before government funding and transfers||200,432||134,916|
|Adjustment for items affecting net cost of operations but not affecting authorities:|
|Amortization of tangible capitals assets||(28)||(17)|
|Gain (loss) on disposal of tangible capital assets||-||-|
|Services provided without charge by other government departments||(3,879)||(3,878)|
|Increase in vacation pay and compensatory leave||(191)||22|
|Increase in employee future benefits||261||219|
|Bad debt expense||(13,185)||(7,931)|
|Refunds of previous years' expenditures||196||174|
|Total items affecting net cost of operations but not affecting authorities||(16,826)||(11,411)|
|Adjustment for items not affecting net cost of operations but affecting authorities:|
|Acquisition of tangible capital assets||-||-|
|Proceeds from disposal of tangible capital assets||-||-|
|Loans issued on behalf of government||60,420||63,630|
|Total items not affecting net cost of operations but affecting authorities||60,420||63,630|
|-||Forecast results for
|Planned results for
|Vote 1 – Operating Expenditures||25,661||25,158|
|Vote 5 – Grants and Contributions||242,198||159,188|
|Lapsed: Vote 5 – Grants and Contributions||(26,588)||-|
|Total authorities requested||$244,026||$187,135|
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