NRCan 2022-23 Consolidated Future-Oriented Statement of Operations

Natural Resources Canada
Consolidated Future-Oriented Statement of Operations (Unaudited)
For the Year Ending March 31

	Forecast results 2022	Planned results 2023
	(in thousands of dollars)
Expenses
Innovative and Sustainable Natural Resources Development	1,045,794	1,683,539
Globally Competitive Natural Resource Sectors	510,750	775,697
Natural Resource Science and Risk Mitigation	376,465	503,568
Internal Services	168,716	192,313
Total expenses	2,101,725	3,155,117
Revenues
Rights and privileges	244,328	431,284
Other, such as revenue pursuant to agreements	24,707	24,381
Revenue from services of a non-regulatory nature	16,679	15,148
Revenue from services of a regulatory nature	6,362	6,387
Proceeds from sales of goods and information products	1,163	1,056
Services to other government departments	85	78
Revenues earned on behalf of Government	(255,929)	(443,043)
Total net revenues	37,395	35,291
Net cost of operations before government funding and transfers	2,064,330	3,119,826

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

Natural Resources Canada
Notes to the Consolidated Future-Oriented Statements of Operations (Unaudited)
For the Year Ending March 31

1. Methodology and significant assumptions

The Consolidated Future-Oriented Statement of Operations has been prepared based on government priorities and departmental plans as described in the Departmental Plan.

The information in the forecast results for fiscal year 2021-22 is based on actual results and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the fiscal year 2022-23.

The main assumptions underlying the forecasts are as follows:

• The department’s activities are as reflected in the final 2021-22 authorities and in the 2022- 23 Main Estimates; and
• 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 September 30, 2021.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2021-22 and for 2022-23, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

In preparing this Consolidated Future-Oriented Statement of Operations, Natural Resources 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 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 Consolidated Future-Oriented Statement of Operations and the historical consolidated statement of operations include the following:

• The timing and the amount of acquisitions and disposals of capital assets, such as buildings, machinery and equipment, and vehicles, which may affect gains, losses and amortization expense;
• The implementation of new collective agreements;
• Economic conditions such as fluctuations in oil and gas prices and exchange rates, which may affect both the amount of revenue earned and the collectability of accounts receivable;
• Interest rates and Consumer Price Index (CPI), which will affect the net present value of environmental liabilities; and
• Further 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, Natural Resources 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 Consolidated Future-Oriented Statement of Operations has been prepared using the Government of Canada’s accounting policies in effect for fiscal year 2021-22, 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)Consolidation

This Consolidated Future-Oriented Statement of Operations includes the accounts of the sub-entities for which the Deputy Head is accountable. The accounts of the Geomatics Canada Revolving Fund have been consolidated with those of the Department, and all inter-organizational balances and transactions have been eliminated. 

b)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. Utilization of inventories and prepaid expenses and provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debts, advances and inventory obsolescence are also included in other expenses.

c)Revenues

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

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 that the event giving rise to the revenues occurred. Revenues that are non-respendable are not available to discharge the Department'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 earned on behalf of the Government of Canada and are therefore presented as a reduction of the Department's gross revenues.

4. Parliamentary Authorities

The Department is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the department differs from financial reporting according to generally accepted accounting principles because authorities are based mainly on cash flow requirements. Items recognized in the Consolidated Future-Oriented Statement of Operations in one year may be funded through parliamentary authorities in prior, current, or future years. Accordingly, the Department 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

		Forecast results 2022	Planned results 2023
		(in thousands of dollars)
Net cost of operations before government funding and transfers		2,064,330	3,119,826
Adjustment for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capitals assets		(27,386)	(27,919)
Net gain (loss) on disposal of tangible capital assets		219	65
Services provided without charge by other government departments		(52,479)	(51,568)
Increase in prepayments		42	398
Increase in inventory		493	158
Decrease in accrued liabilities		419	-
(Increase) decrease in vacation pay and compensatory leave		(570)	12,906
(Increase) decrease in employee future benefits		(201)	583
Increase in allowance for environmental liabilities		(87)	(46)
Refunds of previous years' expenditures		1,026	1,703
Revenues and expenses for restricted accounts		(2,553)	(250)
Adjustments of prior year accounts payable		5,399	15,450
Total items affecting net cost of operations but not affecting authorities		(75,678)	(48,520)
Adjustment for items not affecting net cost of operations but affecting appropriations:
Acquisition of tangible capital assets		31,426	36,641
Decrease in lease obligations for tangible capital assets		3,462	3,519
Unconditionally repayable contributions		124,252	294,125
Other adjustments		1,311	1,311
Total items not affecting net cost of operations but affecting authorities		160,451	335,596
Requested authorities forecasted to be used		2,149,103	3,406,902

b) Authorities requested

	Forecast results 2022	Planned results 2023
	(in thousands of dollars)
Authorities provided/requested:
Vote 1 – Operating expenditures	808,473	757,119
Vote 5 – Capital expenditures	34,379	39,593
Vote 10 - Grants and contributions	1,722,176	2,245,355
Statutory amounts	290,156	612,859
Total Authorities provided/requested:	2,855,184	3,654,926
Less:
Authorities available for future years	7,743	7,914
Lapsed – Operating (incl. frozen allotments)	102,562	19,326
Lapsed – Capital	2,952	2,952
Lapsed – Grants and contributions (incl. frozen allotments)	592,824	217,832
Estimated unused authorities and other adjustments	706,081	248,024
Requested authorities forecasted to be used	2,149,103	3,406,902