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NRCan 2021-22 Consolidated Future-Oriented Statement of Operations

Natural Resources Canada
Consolidated Future-Oriented Statement of Operations (Unaudited)
For the Year Ending March 31
  Forecast results 2021 Planned results 2022
(in thousands of dollars)
Expenses    
Innovative and Sustainable Natural Resources Development
608,729 936,247
Globally Competitive Natural Resource Sectors
498,586 439,016
Natural Resource Science and Risk Mitigation
278,173 283,479
Internal Services
155,915 162,572
Total expenses 1,541,403 1,821,314
Revenues    
Rights and privileges
107,229 102,762
Other, such as revenue pursuant to agreements
17,478 21,928
Revenue from services of a non-regulatory nature
12,409 12,330
Revenue from services of a regulatory nature
5,475 5,827
Proceeds from sales of goods and information products
920 914
Services to other government departments
90 90
Revenues earned on behalf of Government
(119,295) (114,750)
Total net revenues 24,306 29,101
Net cost of operations before government funding and transfers 1,517,097 1,792,213

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

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 2020-21 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 2021-22.

The main assumptions underlying the forecasts are as follows:

  • The department’s activities are as reflected in the final 2020-21 authorities and in the 2021- 22 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, 2020.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2020-21 and for 2021-22, 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 2020-21, 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 2021 Planned results 2022
(in thousands of dollars)
Net cost of operations before government funding and transfers 1,517,097 1,792,213
Adjustment for items affecting net cost of operations but not affecting authorities:    
Amortization of tangible capitals assets
(28,495) (27,221)
Net gain (loss) on disposal of tangible capital assets
76 (432)
Services provided without charge by other government departments
(51,020) (50,290)
Increase in prepayments
142 768
Increase in inventory
330 383
Decrease in accrued liabilities
619 -
Decrease in vacation pay and compensatory leave
421 5,428
Decrease in employee future benefits
227 531
Decrease (increase) in allowance for environmental liabilities
27 (7)
Refunds of previous years' expenditures
924 1,063
Revenues and expenses for restricted accounts
(2,925) (761)
Adjustments of prior year accounts payable
4,074 7,188
Total items affecting net cost of operations but not affecting authorities (75,600) (63,350)
Adjustment for items not affecting net cost of operations but affecting appropriations:    
Acquisition of tangible capital assets
16,560 13,629
Decrease in lease obligations for tangible capital assets
3,405 3,462
Unconditionally repayable contributions
21,452 425,308
Other adjustments
593 593
Total items not affecting net cost of operations but affecting authorities 42,010 442,992
Requested authorities forecasted to be used 1,483,507 2,171,855
b) Authorities requested
Forecast results 2021 Planned results 2022
(in thousands of dollars)
Authorities provided/requested:    
Vote 1 – Operating expenditures
644,910 723,383
Vote 5 – Capital expenditures
16,559 13,629
Vote 10 - Grants and contributions
823,664 1,254,135
Statutory amounts
303,601 281,679
Total Authorities provided/requested: 1,788,734 2,272,826
Less:    
Authorities available for future years
5,987 6,295
Lapsed – Operating (incl. frozen allotments)
26,998 9,513
Lapsed – Capital
- -
Lapsed – Grants and contributions (incl. frozen allotments)
272,242 85,163
Estimated unused authorities and other adjustments 305,227 100,971
Requested authorities forecasted to be used 1,483,507 2,171,855
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