Future-oriented Statement of Operations (Unaudited)
For the year ended March 31, 2015

Table of Contents

Statement of Management Responsibility Including Internal Control Over Financial Reporting

Departmental management is responsible for this future-oriented statement of operations, including responsibility for the appropriateness of the assumptions on which this statement was prepared. This statement is based on the best information available and the assumptions adopted as at January 22, 2014 and reflect the plans described in the Report on Plans and Priorities.

This Future-oriented Statement of Operations has not been audited.

Original signed by:

Louis Lévesque,
Deputy Minister

Date

Su Dazé,
Chief Financial Officer

Date

Signed at Ottawa, ON
March 3, 2014

Future–oriented Statement of Operations (Unaudited)
For the Year Ended March 31

(in thousands of dollars)

  2014
Estimated Results
2015
Planned Results
Expenses    
Public Infrastructure for a More Prosperous Canada   3,321,269
Provinces, territories and municipalities have federal financial support for their infrastructure priorities 2,326,572  
Funding for quality, cost-effective public infrastructure that meets the needs of Canadians in a competitive economy, a cleaner environment and liveable communities is provided 1,475,176  
Internal Services 27,920 3,099
Total expenses 3,829,668 3,324,368
Net cost of operations 3,829,668 3,324,368

The accompanying notes form an integral part of this financial statement.

Notes to the Future-oriented Statements of Operations (Unaudited)
For the Year Ended March 31

1. Authority and Objectives

The Office of Infrastructure of Canada (INFC) was created in 2002 as a separate organization under Schedule I.1 of the Financial Administration Act. The applied name for this organization is Infrastructure Canada.

INFC is funded through annual and statutory appropriations received from the Parliament of Canada and is not taxable under the provisions of the Income Tax Act. INFC reports to the Minister of Infrastructure, Communities and Intergovernmental Affairs.

INFC was established to lead the Government of Canada's effort to address infrastructure challenges through strategic investments in provincial, territorial and municipal assets, engagement in key partnerships, and the development and implementation of sound policies. Order in Council 2004-325 authorizes the Minister to enter into transfer payment agreements and contracts related to infrastructure initiatives in Canada.

In 2014-15 INFC will deliver its mandate under one strategic outcome and internal services in support of its activities as described below.

Public Infrastructure for a More Prosperous Canada: INFC's key business lines and initiatives are grouped into five programs which fall under this strategic outcome.

  • Funding for Provincial-Territorial Priorities – providing predictable funding to each province and territory to enhance Canada's public infrastructure system. (Provincial-Territorial Infrastructure Base Fund)
  • Permanent and Flexible Public Infrastructure Funding – providing predictable and flexible funding for municipalities for their infrastructure priorities (Gas Tax Fund)
  • Investments in National Infrastructure Priorities – provides funding to infrastructure projects that advance the national priorities (New Building Canada Fund-National Infrastructure Component, Green Infrastructure Fund, Border Infrastructure Fund, Inuvik to Tuktoyaktuk Highway Fund)
  • Large-Scale Infrastructure Investments – providing funding for infrastructure project of national, regional and/or local significance (New Canada Building Fund-Provincial Territorial Infrastructure Component – Funding for National and Regional Projects, Building Canada Fund–Major Infrastructure Component, Canada Strategic Infrastructure Fund)
  • Infrastructure Investments in Smaller Communities – providing funding for infrastructure projects in smaller communities (Building Canada Fund-Communities Component, Municipal Rural Infrastructure Fund, New Building Canada Fund – Provincial-Territorial Infrastructure Component-Small Communities Fund)

Internal Services: Internal Services are groups of activities and resources that are administered to support the needs of programs and other corporate obligations of INFC. Internal Services include only those activities and resources that apply across INFC, not those provided specifically to a program.

2. 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 Report on Plans and Priorities.

The information in the estimated results for fiscal year 2013–14 is based on actual results as at December 31, 2013 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2014–15 (future year) fiscal year.

The main assumptions underlying the forecasts are as follows:

  • In Economic Action Plan 2013, the Government of Canada announced the New Building Canada Fund, a 10-year funding commitment starting in 2014-15 to build roads, bridges, subways, commuter rail and other public infrastructure in cooperation with provinces, territories, municipalities, and the private sector. The funds for this program are not reflected in the 2014-15 Main Estimates and the 2014-15 Planned Spending. Similarly this funding is not included in this statement.
  • No new planned spending is anticipated for 2014-15 under the Municipal Rural Infrastructure Fund, as this program is currently wrapping up.
  • As provinces and territories move toward the completion of all initiatives under the Provincial-Territorial Infrastructure Base Fund program, the transfer payments for this program are significantly reduced from prior years.
  • The 2014-2015 Main Estimates and 2014-2015 Planned Spending and future years' amounts do not reflect funding for Infrastructure Canada's operating budget, except for small opening balances. Likewise this funding is not included in this statement.
  • Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience adjusted to reflect current authorities.
  • INFC is planning no new investment expenditures during 2014-15 as it completes current projects and migrates its systems to Shared Services Canada.

These assumptions are adopted as at January 22, 2014.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2013–14 and for 2014–15, 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, Infrastructure Canada 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.

A factor that could lead to material differences between the Future-oriented Statement of Operations and the year-end Statement of Operations as part of the year-end financial statements is:

  • Further changes to the operating budget through additional new funding or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, Infrastructure 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 Performance Report.

4. Summary of Significant Accounting Policies

The Future-oriented Statement of Operations has been prepared using the Government's accounting policies that came into effect for the 2011–12 fiscal year 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 INFC's operations are recorded when goods are received or services are rendered including services provided without charge for accommodation, employee contributions to health and dental insurance plans, legal services and worker's 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 respective terms of employment.

Transfer payments are recorded as expenses when the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement or, in the case of transactions which do not form part of an existing program, when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statement. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.

Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable, provision for valuation on loans, investments and advances and inventory obsolescence or liabilities, including contingent liabilities and environmental 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. Tangible capital assets are amortized on a straight-line basis over the estimated useful life of the asset.

5. Parliamentary Authorities

The Department is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to INFC do not parallel financial reporting according to generally accepted accounting principles since 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, INFC 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 current year authorities used

(in thousands of dollars)

  Estimated
2013-14
Planned
2014-15
Net cost of operations 3,829,668 3,324,368
Adjustment for items affecting net cost of operations but not affecting authorities:    
Amortization of tangible capital assets (1,472) (1,523)
Services provided without charge by other government departments (5,120) (3,239)
Decrease in vacation pay and compensatory leave 87 0
Decrease/(Increase) in employee future benefits 313 (62)
Refunds of previous years' expenditures 2,054 2,054
Total items affecting net cost of operations but not affecting authorities 3,825,530 3,321,598
Adjustment for items not affecting net cost of operations but affecting appropriations:    
Acquisition of tangible assets 400 0
Total items not affecting net cost of operations but affecting authorities 400 0
Requested authorities 3,825,930 3,321,598

b) Authorities requested

(in thousands of dollars)

  Estimated
2013-14
Planned
2014-15
Authorities requested:    
Vote 1 – Operating expenditures 44,901 2,051
Vote 5 – Contributions 4,102,031 1,345,968
Statutory amounts    
Employee Benefit Plan 4,986 310
Gas Tax Fund 0 1,973,269
Less:    
Authorities available for future years    
Lapsed: Operating (4,729) 0
Lapsed: Contributions (321,259) 0
Requested authorities 3,825,930 3,321,598
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