Crown Indigenous Relations and Northern Affairs – Future-Oriented Statements of Operations for the Year Ending March 31, 2019

1. Methodology and Significant Assumptions

The Future-Oriented Statement of Operations has been prepared on the basis of the government priorities and departmental plans as described in the Departmental Plan.

The information in the forecasted results for fiscal year 2017-18 is based on actual results as at October 31, 2017 and forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2018-19.

The main assumptions underlying the forecasts are as follows:

1. the department's activities will remain substantially the same as the previous year;
2. 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;
3. the forecasts take in consideration the transfer of two programs at Indigenous Services Canada from November 30, 2017;
4. accruals for new environmental liabilities cannot be reasonably foreseen or quantified and have therefore been excluded from the forecast;
5. allowances for uncollectibles are based on historical experience.

These assumptions are adopted as of December 31, 2017.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2017-18 and for 2018-19, 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, the department 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:

1. the timing and the amount of acquisitions and disposals of property, plants and equipment, which may affect gains, losses and amortization expense;
2. the implementation of new collective agreements;
3. economic conditions, which may affect both the amount of revenue earned and the collectability of loan receivables;
4. interest rates in effect at the time of issue, which will affect the net present value of non-interest-bearing loans; and
5. other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.

After the Department Plan is tabled in Parliament, the department 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 Future-Oriented Statement of Operations has been prepared using the Government of Canada's accounting policies in effect for the fiscal year 2017-2018, 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
   
   The department records expenses on an accrual basis.
   
   Transfer payments are recorded as expenses 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. Provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debts, loans, investments and advances, as well as utilization of prepaid expenses, and other are also included in other expenses.
2. Revenues
   
   Revenues from regulatory fees are recognized in the accounts based on the services provided in the fiscal year.
   
   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 department's liabilities. Although, the deputy head is expected to maintain accounting control, he or she has no authority 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 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 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: