Future-Oriented Statement of Operations for the Years Ending March 31, 2017 and March 31, 2018

Future-Oriented Statement of Operations (Unaudited) for the Year Ending March 31
(in dollars)

  Forecast Results 2016-2017 Planned Results 2017-2018
Expenses
  Economic regulation $ 13,293,956 $ 13,370,944
  Adjudication and alternative dispute resolution 10,851,979 10,032,272
  Internal services 8,464,888 8,246,511
Total expenses 32,610,823 31,649,727
Revenues
  Revenues from fines 114,461 127,464
  Sales of goods and services - -
  Other revenues 2,325 58
  Revenues earned on behalf of Government (116,786) (127,522)
Total revenues - -
Net cost of operations before government funding and transfers $ 32,610,823 $ 31,649,727

Information for the year ending March 31, 2017 includes actual amounts from April 1, 2016 to December 21, 2016.

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

Original signed by:


Scott Streiner
Chairman and Chief Executive Officer
Gatineau, Canada
February 8, 2017

Original signed by:


Jacqueline Bannister
Chief Financial Officer
Gatineau, Canada
February 8, 2017

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 2016-2017 is based on actual results as at December 21, 2016 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2017-2018 fiscal year.

The main assumptions underlying the forecasts are as follows:

  1. The Agency's program 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 experience. The general historical pattern is expected to continue.
  3. Based on resources provided, the Agency will deliver the expected results specified in the Departmental Plan.
  4. Estimated information is based on the parliamentary appropriations granted to the Canadian Transportation Agency through its 2017-2018 Main Estimates, including an amount of $3.5 million approved via a reverse reprofile request that will be used to pay for the costs related to the Government of Canada Workplace 2.0 Fit-up Standards.

These assumptions are adopted as at December 21, 2016.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2016-2017 and for 2017-2018, 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 the following:

  1. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.
  2. The timing and amount of acquisitions and disposals of equipment may affect gains/losses and amortization expense.
  3. Implementation of new collective agreements.
  4. Economic conditions may affect both the amount of revenue earned and the collectability of receivables.

Once the Departmental Plan 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, 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 charge for accommodation, employer contributions to health and dental insurance plans, legal services and workers' 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 terms of employment.

Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable and inventory obsolescence, or liabilities, including contingent 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

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 because 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 (in dollars)

  Forecast Results 2016-2017 Planned Results 2017-2018
Net cost of operations before government funding and transfers $ 32,610,823 $ 31,649,727
Adjustments for items affecting net cost of operations, but not affecting authorities:
  Amortization of tangible capital assets (216,976) (204,668)
  Gain (loss) on disposal of tangible capital assets (8,128) (7,134)
  Services provided without charge by other government departments (4,292,725) (4,319,874)
  Decrease (increase) in vacation pay and compensatory leave 99,794 104,502
  Decrease (increase) in employee future benefits (187,146) -
  Refunds of previous years' expenditures 5,146 5,684
Total items affecting net cost of operations but not affecting authorities (4,600,035) (4,421,490)
Adjustment for items not affecting net cost of operations but affecting authorities:
  Acquisitions of tangible capital assets 363,273 3,873,825
  Increase (decrease) in inventory (2,329) (2,157)
  Increase (decrease) in prepaid expenses (11,876) 4,261
Total items not affecting net cost of operations but affecting authorities 349,068 3,875,929
Forecast current year lapse 190,000 -
Requested authorities $ 28,549,856 $ 31,104,166

b) Authorities requested (in dollars)

  Forecast Results 2016-2017 Planned Results 2017-2018
Authorities requested:
  Vote 25 - Operating expenditures $ 25,048,099 $ 27,904,765
  Statutory amounts 3,501,757 3,199,401
Requested authorities $ 28,549,856 $ 31,104,166
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