Northern Pipeline Agency Future-Oriented Statement of Operations (unaudited)

Northern Pipeline Agency
Future-Oriented Statement of Operations (Unaudited)
For the year ending March 31
(in dollars)
  Forecast
Results
2016
Planned
Results
2017
Expenses
Salaries and employee benefits 234,461 345,740
Professional and special services 198,682 379,095
Rentals 10,132 10,000
Transportation and communications 6,700 4,000
Amortization 3,040 2,663
Utilities, materials and supplies 316 2,000
Transfer payments - 10,000
Information - 750
Repair and maintenance - 250
Total Recoverable Expenses 453,331 754,498
Services provided without charge by other
government departments
3,027 2,479
Revenues
Regulatory revenue 453,331 754,498
Revenues earned on behalf of Government (453,331) (754,498)
Total Net Revenues   -   -
Net cost of operations before government funding and transfers 456,358 756,977

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

Northern Pipeline Agency
Notes to the Future-Oriented Statement of Operations (Unaudited)

1. 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 Northern Pipeline Agency (the Agency) Report on Plans and Priorities.

The information in the forecast results for fiscal year 2015-16 is based on actual results as at October 31st, 2015 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2016-17 fiscal year.

The main assumptions underlying the forecasts are as follows:

  • The Agency’s activities will remain substantially the same as in the previous year and are reflected in the final 2015-16 authorities and the 2016-17 Main Estimates; and
  • Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.

These assumptions were adopted as at October 31st, 2015.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2015-16 and for 2016-17, 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 the Agency 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 capital assets (machinery and equipment) may affect gains/losses and amortization expense;
  • Implementation of new collective agreements; and
  • Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Agency 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.

3. 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 2015-16 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 the Agency’s operations are recorded when goods are received or services are rendered, including services provided without charge for Management Services provided by Natural Resources Canada.

Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met all eligibility criteria or the entitlements established for the transfer payment program.

Expenses also include amortization of tangible capital assets, which are capitalized at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset.

b) Revenues

Regulatory revenues recovered from Foothills Pipe Lines Limited are recognized in the year in which the expenses were incurred.

Funds that have been received are recorded as deferred revenue, provided the Agency has an obligation to other parties for the provision of goods, services or the use of assets in the future.

Revenues that are non-respendable are not available to discharge the Agency’s liabilities. While the Commissioner is expected to maintain accounting control, he 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.

4. Parliamentary Authorities

The Agency is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Agency do not parallel financial reporting according to generally accepted accounting principles because 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, the Agency 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 dollars)
  Forecast
Results
2016
Planned
Results
2017
Net cost of operations before government funding and transfers 456,358 756,977
Adjustments for items affecting net cost of 
operations but not affecting authorities:
Less:
Services provided without charge by other government departments 3,027 2,479
Amortization of tangible capital assets 3,040 2,663
Requested authorities 450,291 751,835

 

(b) Authorities requested (in dollars)
  Forecast
Results
2016
Planned
Results
2017
Authorities requested:
Vote 30 – Program expenditures

701,215

701,095
Statutory amounts 49,560 50,740
Less:
Lapsed – Operating
300,484 -
Requested authorities 450,291 751,835