Future-Oriented Statement of Operations of Transport Canada (Unaudited) for the year ending March 31, 2021

Transport Canada
Future-Oriented Statement of Operations (Unaudited)
For the year ending March 31, 2021
(in thousands of dollars)

 

 

Forecast
results for
2019-20

Planned
results for
2020-21

Expenses

An Efficient Transportation System

826,331

947,055

A Safe and Secure Transportation System

544,983

562,261

A Green and Innovative Transportation System

380,813

293,135

Internal Services

229,606

219,228

Specified purpose accounts

7,286

7,432

Expenses incurred on behalf of Government

(7,286)

(7,432)

Total expenses

1,981,733

2,021,679

Revenues

Leases of property

420,509

434,631

Monitoring and enforcement revenues

52,509

53,950

Specified purpose accounts

33,173

33,754

Aircraft maintenance and flying services

31,741

39,179

Transport facilities user fees

14,545

13,719

Rentals and concessions

7,207

8,877

Other

2,753

8,638

Revenues earned on behalf of Government

(485,573)

(519,952)

Total revenues

76,864

72,796

Net cost of operations before government funding and transfers

1,904,869

1,948,883

The accompanying notes form an integral part of the Future-Oriented Statement of Operations.

Transport Canada
Notes to the Future-Oriented Statement of Operations (Unaudited)
For the year ending March 31

 

1. 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 2019-20 is based on actual results as at October 31, 2019 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2020-21.

The main assumptions underlying the forecasts are as follows:

  • Transport Canada’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.

These assumptions are made as at January 17, 2020.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2019-20 and for 2020-21, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

In preparing this Future-Oriented Statement of Operations, Transport Canada has made estimates and assumptions about the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based on past 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:

  • the timing and the amount of acquisitions and disposals of property, plant and equipment, which may affect gains, losses and amortization expense;
  • the implementation of new collective agreements;
  • economic conditions, which may affect both the amount of revenue earned and the collectability of loan receivables;
  • interest rates in effect at the time of issue, which will affect the net present value of non-interest bearing loans; and
  • 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, Transport Canada 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.

3. Summary of significant accounting policies

The Future-Oriented Statement of Operations has been prepared using the Government of Canada’s accounting policies in effect for fiscal year 2019-20, and is 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:

(a) Expenses

Transfer payments are recorded as an expense in the year the transfer is authorized and all eligibility criteria have been met by the recipient.

Other expenses are generally recorded when goods are received or services are rendered and include expenses related to personnel, professional and special services, repair and maintenance, utilities, materials and supplies, as well as amortization of tangible capital assets. Tangible capital assets are capitalized at their acquisition cost, and amortized on a straight-line basis over the estimated useful life of the asset. Provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debts, loans, investments and advances and consumable parts obsolescence, as well as utilization of consumable parts and prepaid expenses, and other are also included in other expenses. These provisions are recorded as expenses to the extent the future event is likely to occur and a reasonable estimate can be made.

(b) Revenues

Revenues from regulatory fees are recognized based on the services provided in the fiscal year.

Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.

Deferred revenue consists of amounts received in advance of the delivery of goods and rendering of services that will be recognized as revenue in a subsequent fiscal year as it is earned.

Other revenues are recognized in the period the event giving rise to the revenues occurred.

Revenues that are non-respendable are not available to discharge Transport Canada’s liabilities. Although the deputy head is expected to maintain accounting control, he has no authority over the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented as a reduction of Transport Canada’s gross revenues.

4. Parliamentary authorities

Transport Canada is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to Transport Canada 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, Transport Canada has 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:

a. Reconciliation of net cost of operations to requested authorities (in thousands of dollars)

 

Forecast
results for
2019-20

Planned
results for
2020-21

Net cost of operations before government funding and transfers

1,904,869

1,948,883

Adjustment for items affecting net cost of operations but not affecting authorities:

Amortization of tangible capital assets

(144,596)

(144,224)

Gain (loss) on disposal of tangible capital assets

(23,999)

6,814

Services provided without charge by other government departments

(100,995)

(104,283)

Adjustments to assets under construction

2,403

2,402

Increase in vacation pay and compensatory leave

(2,770)

(2,984)

Decrease in employee future benefits

2,322

2,322

Decrease (increase) in contingent liabilities

(3,215)

6,453

Decrease (increase) in accrued liabilities not charged to authorities

(86)

139

Bad debt expense

(11)

4

Refund of previous years' expenditures

1,801

1,801

Adjustments of previous years accounts payable

1,398

1,398

Total items affecting net cost of operations but not affecting authorities

(267,748)

(230,158)

Adjustment for items not affecting net cost of operations but affecting authorities:

Acquisition of tangible capital assets

129,000

150,605

Decrease in lease obligations for tangible capital assets

25,143

26,287

Increase in salary overpayments

4,209

4,269

Increase (decrease) in consumable parts

(377)

189

Increase (decrease) in prepaid expenses

1,154

(577)

Total items not affecting net cost of operations but affecting authorities

159,129

180,773

Requested authorities forecasted to be used

1,796,250

1,899,498

b. Authorities provided/requested (in thousands of dollars)

 

Forecast
results for
2019-20

Planned
results for
2020-21

Authorities provided/requested

Vote 1 – Operating expenditures

765,705

726,021

Vote 5 – Capital expenditures

171,193

150,605

Vote 10 – Grants and contributions – An Efficient Transportation System

614,675

617,297

Vote 15 – Grants and contributions – A Green and Innovative Transportation System

332,947

133,824

Vote 20 – Grants and contributions – A Safe and Secure Transportation System

48,990

40,198

Statutory amounts

220,110

231,553

Total authorities provided/requested

2,153,620

1,899,498

Less : Estimated unused authorities and other adjustments

(357,370)

 

Requested authorities forecasted to be used

1,796,250

1,899,498