Future-oriented Statement of Operations for the years ending March 31, 2014 and March 31, 2015

Future-oriented Statement of Operations (Unaudited) For the Year Ending March 31 (in thousands of dollars)

  Estimated Results 2013-2014Planned Results 2014-2015
Expenses
  Economic regulation $ 14,396 $ 14,076
  Adjudication and alternative dispute resolution 10,206 10,695
  Internal services 8,720 8,241
Total expenses 33,322 33,012
Revenues
  Revenues from fines 150 50
Sales of goods and services 10 10
Miscellaneous revenues 1 1
Revenues earned on behalf of Government (161) (61)
Total revenues - -
Net cost of operations $ 33,322 $ 33,012

Information for the year ending March 31, 2014 includes actual amounts from April 1, 2013 to November 30, 2013.

The accompanying notes form an integral part of this future-oriented statement of operations.

Geoffrey Hare
Chairman and Chief Executive Officer
Gatineau, Canada
January 27, 2014

Linda Harrison
Chief Financial Officer
Gatineau, Canada
January 27, 2014

Notes to the Future-oriented Statement of Operations (Unaudited) for the Year Ending March 31

1. Methodology and Significant Assumptions

The future-oriented financial statement of operations has been prepared on the basis of government priorities and departmental plans as described in the Report on Plans and Priorities.

The information in the estimated results for fiscal year 2013-14 is based on actual results as at November 30, 2013 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2014-15 fiscal year.

The main assumptions underlying the forecasts are as follows:

  1. The Agency's activities will remain substantially the same as for the previous year;
  2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue;
  3. Based on resources provided, the Agency will deliver the expected results specified in the Report on Plans and Priorities; and
  4. Estimated information is based on the parliamentary appropriations granted to the Canadian Transportation Agency through its 2014-2015 Main Estimates.

These assumptions are adopted as at November 30, 2013.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2013-14 and for 2014-15, 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 Canadian Transportation Agency 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.

Factors that could lead to material differences between the future-oriented statement of operations and the historical statement of operations include:

  1. The timing and amount of acquisitions and disposals of equipment may affect gains/losses and amortization expense.
  2. Implementation of new collective agreements.
  3. Economic conditions may affect both the amount of revenue earned and the collectability of loan receivables.
  4. Interest rates in effect at the time of issue will affect the net present value of non-interest bearing leans.
  5. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Canadian Transportation Agency will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

3. Summary of Significant Accounting Policies

The future-oriented statement of operations has been prepared using Government’s accounting policies that came into effect for the 2013-14 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:

a) Expenses

Expenses are recorded on an accrual basis. Expenses for the Agency’s operations are recorded when goods are received or services are rendered including services provided without charges 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.

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.

b) Revenues

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

Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

Revenues that are non-respendable are not available to discharge the Agency's liabilities. While the Deputy Head is expected to maintain accounting control, he has no authority regarding 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 in reduction of the entity's gross revenues.

4. Parliamentary Authorities (in thousands of dollars)

The Agency is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Agency do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based 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, the Agency 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

  Estimated 2013-2014Planned 2014-2015
Net cost of operations $ 33,322 $ 33,012
Adjustments for items affecting net cost of operations, but not affecting authorities:
  Amortization of tangible capital assets (310) (266)
  Gain (loss) on disposal of tangible capital assets (5) (7)
  Services provided without charge by other government departments (3,906) (3,898)
  Decrease (increase) in vacation pay and compensatory leave 13 (6)
  Decrease (increase) in employee future benefits 244 31
  Refunds of prior years' expenditures 4 -
Total items affecting net cost of operations but not affecting authorities (3,960) (4,146)
Adjustment for items not affecting net cost of operations but affecting authorities:
  Acquisitions of tangible capital assets 144 150
  Decrease in lease obligations for tangible capital assets 10 -
  Increase (decrease) in inventory (9) (10)
  Increase (decrease) in prepaid expenses 11 (5)
Total items not affecting net cost of operations but affecting authorities 156 135
Forecast current year lapse 827 -
Requested authorities $ 30,345 $ 29,001

b) Authorities requested

  Estimated 2013-2014Planned 2014-2015
Requested authorities $ 30,345 $ 29,001
Authorities requested:
  Vote 25 - Operating expenditures $ 26,838 $ 25,650
  Statutory amounts 3,507 3,351
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