Future-Oriented Statement of Operations (Unaudited) - For the year ending March 31, 2020

Infrastructure Canada Future-Oriented Statement of Operations (unaudited)
for the year ending March 31
(in thousands of dollars)
N/A
Forecast results
2018-19
Planned results
2019-20

Expenses

Public Infrastructure

7,596,561

7,475,121

Internal Services

54,528

55,004

Total expenses

7,651,089

7,530,125

Revenues

Miscellaneous revenues

598

114

Revenues earned on behalf of government

(598)

(114)

Total revenues

-

-

Net cost of operations before government funding and transfers

7,651,089

7,530,125

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

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, by Order in Council P.C. 2002-1323. The applied name for this organization is Infrastructure Canada.

The key to building Canada for the 21st century is a strategic and collaborative long-term infrastructure plan that builds economically vibrant, strategically planned, sustainable and inclusive communities. INFC works closely with all orders of government and other partners to enable investments in social, green, public transit and other core public infrastructure, trade and transportation infrastructure as well as rural and northern communities infrastructure.

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 and Communities.

Order in Council P.C. 2004-325 authorizes the Minister of INFC to enter into transfer payment agreements and contracts related to infrastructure initiatives in Canada.

Order in Council P.C. 2014-144 transferred ministerial responsibility for the Samuel De Champlain Bridge Corridor ProjectFootnote1 and oversight of the Jacques Cartier and Champlain Bridges Incorporated (JCCBI) from the Minister of Transport to the Minister of INFC (effective February 13, 2014). The enabling legislation for this project, the New Bridge for the St. Lawrence Act, was enacted on June 19, 2014.

Orders in Council P.C. 2015-1237 and P.C. 2015-1238 transferred responsibility for the Gordie Howe International Bridge Project, including oversight of the Windsor-Detroit Bridge Authority (WDBA), from the Minister of Transport to the Minister of INFC (effective November 4, 2015). The WDBA is responsible for the procurement process for the design, construction, operation and maintenance for the new publicly-owned Gordie Howe International Bridge between Windsor, Ontario and Detroit, Michigan through a public-private partnership. The enabling legislation for this project, the Bridge to Strengthen Trade Act, was enacted on December 14, 2012.

Order in Council P.C. 2015-1240 designated the Minister of INFC as the Minister responsible for federal matters relating to the Toronto Waterfront Revitalization Initiative.

On November 1, 2017 the Governor in Council (P.C. 2017-1329), on the recommendation of the Minister of Infrastructure, Communities and Intergovernmental Affairs and pursuant to subsection 209.1(3) of the Jobs Growth and Long-term Prosperity Act, approved that the Minister procure the dissolution of PPP Canada Inc.The Crown Corporation was successfully dissolved in fiscal year 2017-18.

On January 14, 2019 the Governor in Council (P.C. 2019-0004) assigned the Honourable Bernadette Jordan to assist the Minister of Industry and the Minister of Infrastructure and Communities in the carrying out of those Ministers' responsibilities.

Starting in fiscal year 2018-19, INFC is reporting on its mandate under one core responsibility, as well as internal services, in support of its activities as described below.

Public Infrastructure: INFC's key business lines and initiatives are grouped in the following Program Inventory:

  • Investing in Canada Phase 1 – Funding Allocations for Provinces and Territories;
  • Investing in Canada Phase 1 – Funding for Federation of Canadian Municipalities;
  • Investing in Canada Infrastructure Program;
  • Gas Tax Fund – Permanent Funding for Municipalities;
  • New Building Canada Fund – National Infrastructure Component;
  • New Building Canada Fund – Funding Allocations for Provinces and Territories;
  • Historical Programs;
  • Samuel De Champlain Bridge Corridor Project;
  • Gordie Howe International Bridge Project;
  • Toronto Waterfront Revitalization Initiative;
  • Smart Cities Challenge;
  • Disaster Mitigation and Adaptation Fund; and
  • Research and Knowledge Initiative.

Internal Services: Internal Services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct services that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Management Services; Materiel Management Services; and Acquisition Management Services.

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 Department Plan.

The information in the forecast results for fiscal year 2018-19 is based on actual results as at December 31, 2018, and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2019-20.

The main assumptions underlying the forecasts are as follows:

  • Forecast results for 2018-19 are based on anticipated cash flow requirements of contribution program recipients;
  • It is expected to pay a second milestone payment of up to $700 million for the Samuel De Champlain Corridor project upon completion of the construction of the bridge, which is anticipated no later than June 2019;
  • Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical trends.

These assumptions are adopted as at February 5, 2019.

3. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2018–19 and for 2019–20, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

In preparing this Future-Oriented Statement of Operations, INFC 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 past 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 Future-Oriented Statement of Operations and the historical statement of operations include:

  • the timing and the amount of acquisitions and disposals of property, plant and equipment which may affect gains, losses and amortization expense;
  • the implementation of new collective agreements;
  • economic conditions, which may affect both the amount of revenue earned and the collectability of loan receivables;
  • the timing at which recipients submit claims for reimbursement under INFC's various transfer payment programs;
  • potential changes to how transfer payment programs are accounted for;
  • further changes to contributions (and operating budgets) through approval of additional new infrastructure initiatives or technical adjustments later in the year;
  • any change to the progress of the Samuel De Champlain Bridge Corridor project; and
  • ongoing changes to the budgetary cycle and estimates process.

After the Departmental Plan is tabled in Parliament, INFC will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Result Report.

4. Summary of significant accounting policies

The Future-Oriented Statement of Operations has been prepared using the Government of Canada's accounting policies in effect for the 2018-19 fiscal year, 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:

  1. Expenses
  2. 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 including expenses related to personnel, professional and special services, repair and maintenance, utilities, materials and supplies, as well as amortization of tangible capital assets. Provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debts, loans, investments and advances and inventory obsolescence, as well as utilization of inventories and prepaid expenses, and other are also included in other expenses.

  3. Revenues
  4. Other revenues are recognized in the period 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, she has no authority over 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 as a reduction of INFC's gross revenues.

5. Parliamentary Authorities

INFC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to INFC differs from financial reporting according to generally accepted accounting principles because authorities are based mainly 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 requested authorities
(in thousands of dollars)
N/A

Forecast results
2018-19

Planned results
2019-20

Net cost of operations before government funding and transfers

7,651,089

7,530,125

Adjustment for items affecting net cost of operations but not affecting authorities:

  • Amortization of tangible capital assets

(2,031)

(37,427)

  • Services provided without charge by other government departments

(8,829)

(8,469)
  • Increase in accrued liabilities not charged to authorities
(2,230,596)
-
  • Increase in vacation pay and compensatory leave
(610)
-
  • Decrease (increase) in employee future benefits
(691)
390
  • Refunds of previous years' expenditures
9,447
4,393
  • Total items affecting net cost of operations but not affecting authorities
(2,233,310)
(41,113)

Adjustment for items not affecting net cost of operations but affecting authorities:

  • Acquisition of tangible capital assets (Note 6)
170,314
1,227,057
  • Decrease in accrued liabilities not previously charged to authorities
-
2,170,596
  • Increase in prepaid expenses and change in advances
159
-
  • Total items not affecting net cost of operations but affecting authorities
170,473
3,397,653

Requested authorities

5,588,252
10,886,665

b) Authorities requested
(in thousands of dollars)
N/A

Forecast Results
2018-19

Planned Results
2019-20

Authorities requested:

  • Vote 1: Operating expenditures

92,730

107,938
  • Vote 5: Capital expenditures
170,314
1,227,057
  • Vote 10: Contributions
3,146,744
5,203,782
  • Statutory amounts
    • Employee Benefit Plan
7,782
6,887
    • Gas Tax Fund
2,170,596
4,340,913
    • Minister's Salary and Motor Car Allowance
86
88

Total authorities requested

5,588,252
10,886,665

6. Tangible Capital Assets

INFC has the Samuel De Champlain Bridge Corridor project, which is a Public-Private Partnership arrangement for a new bridge crossing the St. Lawrence, as well as a new l'Île des Soeurs Bridge, and reconstruction and widening of the federal portion of Autoroute 15 in Montreal, Quebec.

The Samuel De Champlain Bridge Corridor project involves the acquisition of tangible capital assets that are not reflected in the Statement of Operations. The value of construction in progress is recognized as a construction in progress asset, as well as a corresponding construction in progress liability.

Footnotes

Footnote 1

Formerly known as the New Champlain Bridge Corridor Project

Return to Footnote 1

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