Section III: Supplementary Information 2014-15

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 NRCan’s consolidated financial statements and have been prepared in accordance with Treasury Board accounting policies, which are based on Canadian public sector accounting standards. 

Condensed Consolidated Statement of Operations (unaudited)
For the Year Ended March 31, 2015
(dollars)

Financial Information	2014-15 Planned Results	2014-15 Actual	2013-14 Actual	Difference between 2014-15 Actual and Planned Results	Difference between 2014-15 and 2013-14 Actuals
Total expenses	2,475,529,361	2,100,576,784	2,050,897,311	(374,952,577)	49,679,473
Total net revenues	35,050,952	25,896,040	29,222,000	(9,154,912)	3,325,960
Net cost of operations before government funding and transfers	2,440,478,409	2,074,680,744	2,021,675,311	365,797,665)	53,005,433

Difference between 2014-15 Actual and Planned Results

The 2014-15 Planned Results are derived from the amounts presented in the 2014-15 Future-Oriented Statement of Operations and included in NRCan’s 2014-15 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 2014-15 planned results of $2,476 million and the 2014-15 actual of $2,101 million represents $375 million, or 15% of overestimated expenses. This is mainly attributable to:

• A $442 million decrease in Atlantic Offshore Statutory Programs (mainly due to decreased oil prices);
• A $184 million decrease under Energy-Efficient Practices and Lower Carbon Energy Sources, due in most part to:
  • The funding allocated for Sustainable Development Technology Canada Next Generation Biofuels fund, for the statutory amount of $79.3 million and voted amount of $25 million, was not required in 2014-15; and
  • The ecoENERGY for Biofuels program of $45.1 million and the ecoENERGY Renewable Power program of $4.8 million, where the contribution programs are based on production levels, had lapses as a result of proponents producing less, therefore claiming less than the maximum allowable under their contribution agreement. Furthermore, due to market challenges several producers were unable to meet their contractual terms and their agreements were terminated.
• A $194 million increase under Responsible Natural Resource Management mainly attributed to the funding received for the Nuclear Legacy Liabilities Program of $195 million through Supplementary Estimates.
• A $26 million increase under Landmass Information mainly attributed to funding received through Supplementary Estimates related to the UNCLOS of $19 million.

Difference between 2014-15 and 2013-14 Actuals

Total actual expenses were $2,101 million in 2014-15 compared to $2,051 million in 2013-14 for a net increase of $50 million or 2.4%, which is mainly attributable to a $42 million increase operating expenses. This net increase in operating expenses is mainly due to:

• A $49 million increase in environmental expenses due to re-profiling of remediation activities to future years and indexing these related costs; and
• A $26 million increase in rental expenses, mainly attributable to the Service Level Agreement of $13 million for rental of a vessel for the 2014 Arctic Exploration Survey related to the UNCLOS, and a $3 million increase related to a building lease; offset by
• A $39 million decrease in salaries and employee benefits.

The chart presenting NRCan’s actual expenses by type for 2014-15 is available on the NRCan website.

The planned net revenues of $35 million were based on historical data. The actual net revenues were $26 million in 2014-15 compared to $29 million in 2013-14, for a net decrease of $3 million.

Condensed Consolidated Statement of Financial Position (unaudited)
As at March 31, 2015
(dollars)

Financial Information	2014-15	2013-14	Difference between 2014-15 and 2013-14
Total net liabilities	1,679,609,461	1,679,609,461	(99,785,994)
Total net financial assets	492,475,117	492,475,117	(114,293,148)
Departmental net debt	1,201,641,498	1,187,134,344	14,507,154
Total non-financial assets	267,355,166	263,100,053	4,255,113
Departmental net financial position	(934,286,332)	(924,034,291)	(10,252,041)

Total net liabilities were $1,580 million in 2014-15, compared to $1,680 million in 2013-14, for in a decrease of $100 million or 6%. This variance is mainly attributable to a $90 million decrease in accounts payable and accrued liabilities mainly for the Newfoundland Offshore Petroleum Resource Revenue Fund and the Nova Scotia Offshore Revenue Account due to oil price fluctuations.

Total net financial assets were $378 million in 2014-15, compared to $492 million in 2013-14, for a net decrease of $114 million or 23%. This variance is attributable to the decrease in the account Due from Consolidated Revenue Fund (CRF) of $114 million, which represents the net amount of cash the Department is entitled to draw from the CRF without further appropriations. The decrease is mainly due to the decrease in accounts payable and accrued liabilities at year-end.

The overall difference between the 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 were $267 million in 2014-15, compared to $263 million in 2013-14 for a net increase of $4 million. This variance is mainly due to the increase in prepayments.

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 consolidated financial statements are available online at:

http://www.nrcan.gc.ca/plans-performance-reports/2014-2015/17774^{Footnote xiii} .

Natural Resource Canada’s future-oriented statement of operations is available online at:

http://www.nrcan.gc.ca/plans-performance-reports/2014-15/15464^{Footnote xiv} .

Supplementary Information Tables

The supplementary information tables listed in the 2014-15 Departmental Performance Report are available on the NRCan’s website^{Footnote xv}.

• Departmental Sustainable Development Strategy;
• Details on Transfer Payment Programs of $5 million or More;
• Horizontal Initiatives;
• Internal Audits and Evaluations;
• Response to Parliamentary Committees and External Audits;
• Status Report on Transformational and Major Crown Projects;
• Status Report on Projects Operating with Specific Treasury Board Approval;
• Up-Front Multi-Year Funding; and
• User Fees, Regulatory Charges and External Fees.

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^{Footnote xvi} publication. The tax measures presented in the Tax Expenditures and Evaluations publication are the responsibility of the Minister of Finance.