Section III: Supplementary Information

Financial Statements Highlights

The financial highlights are intended to provide a general overview of the Department’s financial position and the net cost of operations before government funding and transfers. The financial highlights presented in this section are drawn from Natural Resources Canada’s financial statements and have been prepared in accordance with Treasury Board accounting policies, which are based on Canadian public sector accounting standards.

Natural Resources Canada
Condensed Statement of Operations and Departmental Net Financial Position (unaudited)
For the Year Ended March 31, 2014
(dollars)

	2013-14 Planned Results	2013-14 Actual	2012-13 Actual	Difference (2013-14 actual minus 2013-14 planned)	Difference (2013-14 actual minus 2012-13 actual)
Total expenses	2,763,895,482	2,050,897,311	1,963,878,803	(712,998,171)	87,018,508
Total revenues	35,770,000	29,222,000	25,969,583	(6,548,000)	3,252,417
Net cost of operations before government funding and transfers	2,728,125,482	2,021,675,311	1,937,909,220	(706,450,171)	83,766,091
Departmental net financial position	(850,529,552)	(924,034,291)	(1,060,268,994)	(73,504,739)	136,234,703

Total expenses were $1.964 billion in 2012-13 compared to $2.051 billion in 2013-14 for a net increase of $87 million or 4.4% which is mainly attributable to transfer payments.

• The net increase in transfer payments of $99 million (from $1.074 billion in 2012-13 to $1.173 billion in 2013-14) is mainly attributable to:
  • a $151 million increase in payments to other levels of government from 2012-13 to 2013-14 mainly due to the Newfoundland Offshore Petroleum Resource Revenue Fund ($165 million) and to the Nova Scotia Offshore Revenue Account (-$11 million). The variance in Royalties collected and paid to the Newfoundland Offshore Petroleum Resource Revenue Fund and to the Nova Scotia Offshore Revenue Account is, from year to year, entirely a function of factors such as production levels, commodity prices and operators’ costs.
  • a $31 million decrease in payments to industry from 2012-13 to 2013-14 mainly due to the expensing of outstanding G&C advances ($36 million) in 2012-13 following the adoption of the new Public Sector Accounting Standard 3410 on Government Transfers.
  • a $48 million decrease in payments to non-profit organizations from 2012-13 to 2013-14 mainly due to the expensing of outstanding G&C advances ($45 million) in 2012-13 following the adoption of the new Public Sector Accounting Standard 3410 on Government Transfers.
  • a $29 million increase under payments to individuals due to a negative expense in 2012-13 resulting mainly from the revaluation of payables at year-end.
• The operating expenses have slightly decreased by $13 million or 1% between 2012-13 and 2013-14 (respectively $890 million and $877 million).

The revenues have slightly increased from 2012-13 ($26 million) to 2013-14 ($29 million). The planned revenues were based on historical data.

The planned results presented are derived from the amounts presented in the 2013-14 future-oriented statement of operations and included in the 2013-14 Departmental Report on Plans and Priorities. The planned results were based on several assumptions and information known at that time.

The overall difference in the total expenses between the 2013-14 actual ($2,051 million) and the 2013-14 planned results ($2,764 million) for 2013-14 represents $713 million or 26% of overestimated expenses. This is mainly attributable to:

• a $421 million variance in Atlantic Offshore Statutory Programs, which vary due to factors such as productions levels, commodity prices and operators’ costs.
• a $239 million variance under Energy-Efficient Practices and Lower-Carbon Energy Sources due in most part to surpluses of $56.3 million in ecoENERGY for Biofuels program, $50 million in Grant to the Canada Foundation for Sustainable Development Technology, $7.1 million in ecoENERGY for Renewable Power and $100 million overestimation of planned expenditures calculated for the Future Oriented Financial Statements based on spending patterns that have changed over time.
• an $80 million variance under Responsible Natural Resource Management mainly due to a decrease in the environmental liabilities.

 

Natural Resources Canada
Condensed Statement of Financial Position (unaudited)
As at March 31, 2014
(dollars)

	2013-14	2012-13	Difference (2013-14 minus 2012-13)
Total net liabilities	1,679,609,461	1,769,476,753	(89,867,292)
Total net financial assets	492,475,117	461,626,164	30,848,953
Departmental net debt	1,187,134,344	1,307,850,589	(120,716,245)
Total non-financial assets	263,100,053	247,581,595	15,518,458
Departmental net financial position	(924,034,291)	(1,060,268,994)	136,234,703

Total net liabilities have varied from $1.769 billion in 2012-13 to $1.680 billion in 2013-14 resulting in a net decrease of $89 million or 5%. This $89 million variance is mainly attributable to:

• decrease of $17 million in accounts payable and accrued liabilities;
• increase of $5 million in vacation pay and compensatory leave;
• decrease of $48 million in the environmental liabilities; and
• decrease of $30 million of the employee future benefits, mainly due to the elimination of severance pay for certain groups of government employees.

Total net financial assets have increased by $32 million or 7% (from $461 million in 2012-13 to $493 million in 2013-14). The increase is mainly attributable to the increase in the account Due from Consolidated Revenue Fund (CRF) of $33 million, which represents the net amount of cash the Department is entitled to draw from the CRF without further appropriations. The increase is mainly due to a timing difference for payments in transition at year-end.

The overall change in total net liabilities and total net financial assets are then reflected in the Departmental net debt.

Total non-financial assets, which include prepayments, inventory and tangible capital assets varied from $248 million in 2012-13 to $263 million in 2013-14, resulting in a net increase of $15 million. This variance is mainly due to the increase of $15 million in tangible capital assets.

The total non-financial assets are then subtracted from the Departmental net debt to reflect the Departmental net financial position.

Financial Statements

Natural Resource Canada’s financial statements are available on-line at: www.nrcan.gc.ca/plans-performance-reports/197.

Supplementary Information Tables

The supplementary information tables listed in the 2013-14 Departmental Performance Report can be found on Natural Resources Canada’s website^{Endnotes xiv}.

• Departmental Sustainable Development Strategy;
• Details on Transfer Payment Programs;
• Horizontal Initiatives;
• Internal Audits and Evaluations;
• Response to Parliamentary Committees and External Audits;
• Up-Front Multi-Year Funding; and
• User Fees Reporting.

Tax Expenditures and Evaluations

The tax system can be used to achieve public policy objectives through the application of special measures such as low tax rates, exemptions, deductions, deferrals and credits. The Department of Finance Canada publishes cost estimates and projections for these measures annually in the Tax Expenditures and Evaluations^{Endnotes xv} publication. The tax measures presented in the Tax Expenditures and Evaluations publication are the sole responsibility of the Minister of Finance.