Future-oriented Statement of Operations (Unaudited)
For the year ended March 31, 2016

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, 2015 and reflects 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

Darlene Boileau
Chief Financial Officer

Date

Signed at Ottawa, ON
March 3, 2015

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

(in thousands of dollars)

  2015
Estimated Results
2016
Planned Results
Expenses    
Public Infrastructure for a More Prosperous Canada 3,474,408 3,583,115
Internal Services 33,279 30,340
Total expenses 3,507,687 3,613,455
Revenues    
Other 5 5
Revenues earned on behalf of Government (5) (5)
Total revenues 0 0
Net cost of operations 3,507,687 3,613,455

The accompanying notes form an integral part of the Future-oriented Statements of Operations.

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.

As per Order in Council P.C. 2014-144 dated February 10, 2014, ministerial responsibility for the Federal Montreal Bridges group, which includes the New Bridge for the St Lawrence Corridor Project and oversight of the Jacques Cartier and Champlain Bridges Incorporated (JCCBI) was transferred from the Minister of Transport to the Minister of Infrastructure, Communities and Intergovernmental Affairs, and Minister of the Economic Development Agency of Canada for the Regions of Quebec, effective February 13, 2014. The enabling legislation for this project, the New Bridge for the St. Lawrence Act, was enacted on June 19, 2014.

In 2014-15 and beyond, 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 6 programs which fall under this strategic outcome.

  • Funding for Provincial-Territorial Priorities – providing predictable funding for each province and territory to enhance Canada's public infrastructure system. (Provincial-Territorial Infrastructure Base Fund).
  • Permanent and Flexible Infrastructure Funding – supporting community infrastructure for Canadians, this program provides long-term predictable and flexible funding for municipalities, supporting long-term municipal planning and asset management in order to address infrastructure priorities (Gas Tax Fund).
  • Investments in National Infrastructure Priorities – provides funding for infrastructure projects that advance national priorities (New Building Canada Fund-National Infrastructure Component, Green Infrastructure Fund, Border Infrastructure Fund, Inuvik to Tuktoyaktuk Highway Program, National Recreational Trails Program).
  • Large-Scale Infrastructure Investments – providing funding for infrastructure projects of national, regional and/or local significance (New Canada Building Fund-Provincial Territorial Infrastructure Component-National and Regional Projects, Building Canada Fund-Major Infrastructure Component, Canada Strategic Infrastructure Fund).
  • Infrastructure Investments in Small Communities and Rural Areas – investing in infrastructure projects in small communities and rural areas in support of local and/or regional priorities and economies (New Building Canada Fund-Provincial-Territorial Infrastructure Component-Small Communities Fund, Building Canada Fund-Communities Component).
  • New Bridge for the St. Lawrence Corridor Project – supporting national, provincial and regional priorities and economies, this program provides funding for infrastructure projects for the New Bridge for the St. Lawrence corridor in Montréal, Quebec.

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 for 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 2014-15 is based on actual results as at November 30, 2014 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2015-16 fiscal year.

The main assumptions underlying the forecasts are as follows:

  • The responsibility for the New Bridge for the St. Lawrence Corridor Project and oversight of the Jacques Cartier Champlain Bridge Incorporated was transferred from the Minister of Transport to the Minister of Infrastructure, Communities and Intergovernmental Affairs on February 13, 2014.
  • The Gas Tax Fund has become a statutory vote, establishing it as permanent, predictable and flexible funding to address local infrastructure priorities. There is also a statutory vote for the minister's salary and motor car allowance.
  • Additional authorities will be sought in 2015-16 for the New Bridge for the St. Lawrence Corridor Project. Potential additional funds related to these authorities are not included in this Future-oriented Statement of Operations.
  • No new planned spending is anticipated for 2015-16 under the Municipal Rural Infrastructure Fund, as this program is currently wrapping up.
  • 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 projects during 2014-15 and 2015-16 as it completes current projects and migrates its systems to Shared Services Canada.

These assumptions are adopted as at January 22, 2015.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2014-15 and for 2015-16, 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.

Factors that could lead to material differences between the Future-oriented Statement of Operations and the historical statement of operations include the following:

  • The timing and amount of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
  • Implementation of new collective agreements.
  • The rate at which recipients submit claims under the new Building Canada Plan, and under sunsetting programs.
  • The New Bridge for the St. Lawrence Corridor Project will result in significant changes to INFC's capital spending and associated amortization.
  • Further changes to the contributions (and operating budgets) through approval of additional new infrastructure initiatives 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, compensatory leave and 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.

Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable, or for 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.

b) Revenues

Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

Revenues that are non-respendable are not available to discharge the Department's liabilities. While the deputy head is expected to maintain accounting control, he or she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross revenues.

5. Parliamentary Authorities

INFC 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 a 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
2014-15
Planned
2015-16
Net cost of operations 3,507,687 3,613,455
Adjustment for items affecting net cost of operations but not affecting authorities:    
Amortization of tangible capital assets (1,523) (1,510)
Services provided without charge by other government departments (5,761) (5,738)
(Increase) in vacation pay and compensatory leave (425) 0
Decrease/(Increase) in employee future benefits (495) 16
Refunds of previous years' expenditures 55,587 2,388
Total items affecting net cost of operations but not affecting authorities $3,555,070 $3,608,611
Adjustment for items not affecting net cost of operations but affecting appropriations:    
Acquisition of tangible assets 17,383 24,652
Total items not affecting net cost of operations but affecting authorities 17,383 24,652
Requested authorities 3,572,453 3,633,263

b) Authorities requested

(in thousands of dollars)

  Estimated
2014-15
Planned
2015-16
Authorities requested:    
Vote 1 – Operating expenditures 75,065 59,797
Vote 5 – Capital expenditures 94,037 24,652
Vote 10 – Contributions 1,535,992 1,569,895
Statutory amounts    
Employee Benefit Plan 6,543 5,568
Gas Tax Fund 1,973,269 1,973,269
Minister's Salary and Motor Car Allowance 80 82
Less:    
Authorities available for future years    
Lapsed: Operating (5,801) 0
Lapsed: Capital (76,654) 0
Lapsed: Contributions (30,078) 0
Requested authorities 3,572,453 3,633,263
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