Future-Oriented Consolidated Departmental Financial Statements

For the fiscal year ending March 31, 2013

Table of Contents

• Statement of Management Responsibility
  • Future-Oriented Consolidated Statement of Financial Position
  • Future-Oriented Consolidated Statement of Operations
  • Future-Oriented Consolidated Statement of Equity of Canada
  • Future-Oriented Consolidated Statement of Cash Flow
• Notes to the Future-Oriented Consolidated Financial Statements
  • 1. Authority and Objectives
  • 2.0 Estimated Results
  • 2.1 Significant Assumptions
  • 2.2 Variations and Changes to the Forecast Financial Information
  • 2.3 Summary of Significant Accounting Policies
  • 3. Parliamentary Authorities
  • 4. Tangible Capital Assets
  • 5. Employee Benefits
  • 6. Contingent and Environmental Liabilities
  • 7. Related Party Transactions
  • 8. Segmented Information
  • 9. Transfers to other government departments

Statement of Management Responsibility

Departmental management is responsible for these Future-Oriented Consolidated Departmental Financial Statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at February 14, 2012 and reflect the plans described in the Report on Plans and Priorities.

François Guimont, Deputy Minister
Gatineau, Canada
March 26, 2012

Alex Lakroni, Chief Financial Officer
Gatineau, Canada
March 26, 2012

Future-Oriented Consolidated Statement of Financial Position (Unaudited)

As at March 31

(in millions of dollars)

	Estimated Results 2012	Planned Results 2013
Assets
Financial assets
Due from Consolidated Revenue Fund	469.8	482.6
Accounts receivable and advances	406.0	381.3
Inventory	5.3	5.3
Seized Property Working Capital Account	15.3	14.1
	896.4	883.3
Non-financial assets
Prepaid expenses	4.5	4.3
Tangible capital assets (Note 4)	5,399.9	6,124.5
	5,404.4	6,128.8
Total assets	6,300.8	7,012.1
Liabilities and Equity of Canada
Liabilities
Accounts payable and accrued liabilities	720.4	712.6
Other liabilities	82.3	82.7
Lease obligations for tangible capital assets	2,218.1	2,651.9
Vacation pay and compensatory leave	49.5	44.2
Employee future benefits (Note 5)	153.3	140.8
Contingent and environmental liabilities (Note 6)	338.9	338.9
Lease inducements	37.6	40.1
	3,600.1	4,011.2
Equity of Canada	2,700.7	3,000.9
Total liabilities and equity of Canada	6,300.8	7,012.1

The accompanying notes form an integral part of these Future-Oriented Consolidated Financial Statements.

François Guimont, Deputy Minister
Gatineau, Canada
March 26, 2012

Alex Lakroni, Chief Financial Officer
Gatineau, Canada
March 26, 2012

Future-Oriented Consolidated Statement of Operations (Unaudited)

For the Year Ending March 31

(in millions of dollars)

	Estimated Results 2012	Planned Results 2013
Expenses
Accommodation and Real Property Assets Management	3,828.7	3,745.6
Internal Services	456.5	345.9
Acquisitions	322.0	322.7
Linguistic Management and Services	224.0	218.2
Receiver General for Canada	132.7	129.6
Federal Pay and Pension Administration	65.8	109.7
Specialized Programs and Services	125.5	83.1
Procurement Ombudsman	4.0	4.1
Total expenses	5,159.2	4,958.9
Revenues
Accommodation and Real Property Assets Management	2,086.7	2,079.1
Acquisitions	156.2	160.0
Linguistic Management and Services	154.0	142.3
Federal Pay and Pension Administration	101.0	88.2
Specialized Programs and Services	84.1	54.3
Receiver General for Canada	21.9	18.8
Internal Services	37.2	7.3
Total revenues	2,641.1	2,550.0
Net cost of continuing operations	2,518.1	2,408.9
Transferred operations (Note 9)
Expenses	91.9	9.4
Revenues	76.8	-
Net cost of transferred operations	15.1	9.4
Net cost of operations	2,533.2	2,418.3

Segmented information (Note 8)

The accompanying notes form an integral part of these Future-Oriented Consolidated Financial Statements.

Future-Oriented Consolidated Statement of Equity of Canada (Unaudited)

For the Year Ending March 31

(in millions of dollars)

	Estimated Results 2012	Planned Results 2013
Equity of Canada, beginning of year	2,382.3	2,700.7
Net cost of operations	(2,533.2)	(2,418.3)
Net cash provided by Government of Canada	2,839.2	2,652.6
Change in amount due from Consolidated Revenue Fund	(45.4)	12.8
Services provided without charge from other government departments (Note 7)	57.8	53.1
Equity of Canada, end of year	2,700.7	3,000.9

The accompanying notes form an integral part of these Future-Oriented Consolidated Financial Statements.

Future-Oriented Consolidated Statement of Cash Flow (Unaudited)

For the Year Ending March 31

(in millions of dollars)

	Estimated Results 2012	Planned Results 2013
Operating activities
Net-cost of operations	2,533.2	2,418.3
Non cash items:
Amortization of tangible capital assets (Note 4)	(502.7)	(520.9)
Services provided without charge from other government departments (Note 7)	(57.8)	(53.1)
Net disposals, write-offs and other adjustments to tangible capital assets (Note 4)	(35.0)	-
Variations in Future-Oriented Consolidated Statement of Financial Position:
Increase (decrease) in accounts receivable and advances	(51.0)	(24.7)
Increase (decrease) in inventory	0.4	-
Increase (decrease) in Seized Property Working Capital Account	6.9	(1.2)
Increase (decrease) in prepaid expenses	0.4	(0.2)
Decrease (increase) in accounts payable and accrued liabilities	139.2	7.8
Decrease (increase) in other liabilities	(5.9)	(0.4)
Decrease (increase) in vacation pay and compensatory leave	4.9	5.3
Decrease (increase) in employee future benefits	79.4	12.5
Decrease (increase) in contingent and environmental liabilities	(1.5)	-
Decrease (increase) in lease inducements	2.9	(2.5)
Cash used by operating activities	2,113.4	1,840.9
Capital investing activities
Acquisitions of tangible capital assets (Note 4)	566.7	647.6
Cash used by capital investing activities	566.7	647.6
Financing activities
Payments on lease obligations for tangible capital assets	159.1	164.1
Cash used by financing activities	159.1	164.1
Net cash provided by Government of Canada	2,839.2	2,652.6

The accompanying notes form an integral part of these Future-Oriented Consolidated Financial Statements.

Notes to the Future-Oriented Consolidated Financial Statements (Unaudited)

For the Year Ending March 31

1. Authority and Objectives

The department of Public Works and Government Services Canada (PWGSC) was established effective June 20, 1996, under the Department of Public Works and Government Services Act. This legislation specifies that PWGSC shall provide common, central and shared services to other government departments and agencies, thereby enabling them to provide programs and services to Canadians. These services are delivered through the following program activities:

• Accommodation and Real Property Assets Management program activity provides federal departments and agencies with safe, healthy and affordable offices and common use accommodations that support the effective delivery of their programs and services. It acts as steward for various public works such as buildings, bridges and dams, and national treasures such as the Parliamentary Precinct and other heritage assets across Canada. PWGSC also provides other federal departments and agencies with responsive and cost-effective real property services;
• Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. Internal Services include only those activities and resources that apply across an organization and not those provided specifically to a program, such as services in human resources, information technologies, finance and corporate services;
• Acquisitions program activity identifies PWGSC as the government's primary procurement service provider offering federal organizations a broad base of procurement solutions such as specialized contracts, standing offers and supply arrangements. The role of PWGSC in this area is to provide timely, value-added acquisitions and related common services to the federal value government and Canadians;
• Linguistic Management and Services program activity defines the Translation Bureau as a key component of the federal government's service delivery infrastructure. The Translation Bureau is the sole internal linguistic services provider and offers translation, revision, interpretation and other linguistic services for Parliament, the judiciary, and federal departments and agencies. It is also the terminology authority within the federal government and has been mandated to develop terminology standards to ensure clear, uniform and quality communications within government. Moreover, it ensures that there is a sustainable, qualified and secure supply of linguistic resources available to support any linguistic requirements of the government and to support Canada's economic and social agenda. This program is mandated under the Translation Bureau Act;
• Receiver General for Canada program activity manages the operations of the federal treasury and maintains the Accounts of Canada. It provides federal departments with an optional financial management system, bill payment services and document imaging;
• Federal Pay and Pension Administration program activity provides reliable central systems and processes for pay and pension administration to other federal organizations. Through the pay and pension services, PWGSC ensures that federal government employees and pensioners are paid accurately and on time;
• Specialized Programs and Services program activity provides federal organizations with high quality, timely and accessible specialized services and programs in support of sound, prudent and ethical management and operations. It includes activities such as Industrial Security Program, Greening of Government Operations, Government Information Services, Forensic Accounting and Shared Services Integration;
• Procurement Ombudsman program activity, operating at arm's length from the government, reviews procurement practices across federal departments and agencies; investigates complaints from potential suppliers with respect to awards of contracts for goods and services below a certain threshold, and complaints concerning the administration of contracts; and, ensures the provision of an alternative dispute resolution program for contracts. This activity helps to promote fairness and transparency of the procurement process; and,
• Information Technology Infrastructure Services program activity. In August 2011, the government of Canada announced the creation of Shared Services Canada (SSC). This organization has been carrying out the activities associated with this program activity since August 4, 2011.

2.0 Estimated Results

The 2011-2012 estimated results presented in the 2012-2013 Future-Oriented Consolidated Financial Statements are different from the ones presented during the 2011-2012 Future-Oriented Consolidated Financial Statements exercise. They have been adjusted to reflect the financial effects of the executive and/or parliamentary expenditure authorities related to the current year (such as Supplementary Estimates A, B and C, reprofiling of funds, carry-forward and earmarked items).

The 2011-12 management estimates have been calculated based on forecasts of PWGSC's activities that are known or expected for the current year.

2.1 Significant Assumptions

The Future-Oriented Consolidated Financial Statements have been prepared on the basis of the government priorities and the plans of the department as described in the Report on Plans and Priorities.

The main assumptions are as follows:

1. With the exception of the winding-down of the Consulting and Audit Canada Revolving Fund and the transfer to Shared Services Canada (Note 9), the department's activities will remain substantially the same as for the previous year.
2. Expenses and revenues, including the determination of amounts internal and external to the government, are mainly based on historical experience and/or estimated business volume changes. The general historical pattern is expected to continue.
3. Allowances are mainly based on historical experience and trends. The general historical pattern is expected to continue.
4. Estimated year-end information for 2011-2012 is used as the opening position for the 2012-2013 planned results.

These assumptions are adopted as at February 14, 2012.

2.2 Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2011-2012 and for 2012-2013, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these Future-Oriented Consolidated Financial Statements, the department of PWGSC 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 Financial Statements and the historical financial statements include:

1. The timing and amounts of acquisitions and disposals of property, plant and equipment, which may affect gains/losses and amortization expense;
2. Implementation of new collective agreements;
3. Economic conditions, which may affect the amount of revenue earned;
4. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year; and
5. Deficit reduction action plan measures.

Once the Report on Plans and Priorities is presented, PWGSC will not update the forecasts published in the report for any changes to appropriations or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

2.3 Summary of Significant Accounting Policies

The Future-Oriented Consolidated Financial Statements have been prepared in accordance with Treasury Board accounting policies. These accounting policies, stated below, are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

A. Parliamentary Authorities

PWGSC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the department do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Future-Oriented Consolidated Statement of Operations and the Future-Oriented Consolidated Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting.

B. Consolidation

These Future-Oriented Consolidated Financial Statements include the accounts of the sub-entities that are under the control of the Department. The accounts of the following sub-entities (revolving funds) have been consolidated with those of the Department and all inter-organizational balances and transactions have been eliminated:

• Consulting and Audit Canada Revolving Fund (termination March 31^st, 2012)
• Defence Production Revolving Fund (inactive)
• Optional Services Revolving Fund
• Real Property Disposition Revolving Fund
• Real Property Services Revolving Fund
• Telecommunications and Informatics Common Services Revolving Fund (transferred to SSC August 4, 2011)
• Translation Bureau Revolving Fund

C. Net Cash Provided by Government

PWGSC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by PWGSC is deposited to the CRF and all cash disbursements made by PWGSC are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal Government.

D. Amounts Due from/to the Consolidated Revenue Fund (CRF)

Amounts due from/to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Department is entitled to draw from the CRF without further parliamentary expenditure authorities to discharge its liabilities.

E. Revenues

Revenues are recorded on an accrual basis:

• Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
• Funds received from external parties for the provision of goods, services or the use of assets in the future are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.
• Other revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

F. Expenses

Expenses are recorded on an accrual basis:

• Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized 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 Future-Oriented Consolidated Financial Statements.
• Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement, provided that the transfer is authorized and a reasonable estimate can be made.
• Services provided without charge by other government departments for the employer's contribution to the health and dental insurance plans, worker's compensation and legal services are recorded as operating expenses at their estimated cost.
• Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
• Generally, PWGSC does not provide grants and contributions to individuals or organizations to fund specific programs and services. PWGSC administers the Payments in Lieu of Taxes Program (PILT) on behalf of all federal departments under the statutory authority of the Payments in Lieu of Taxes Act, which is disclosed under Grants in the Main Estimates. The Government of Canada voluntarily pays a fair share of the costs of local government, from which it is exempt, to municipalities and other taxation authorities having jurisdiction to levy and collect real property taxes in locations where federal lands and buildings are situated. The PILT issued by PWGSC on behalf of other participating federal departments are subsequently recovered from these departments.

G. Employee Future Benefits

1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government of Canada. The department's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require the department to make contributions for any actuarial deficiencies of the Plan.
2. Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

H. Contingent Liabilities

Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the Future-Oriented Consolidated Financial Statements.

I. Environmental Liabilities

Environmental liabilities reflect the estimated costs related to the management and remediation of environmentally contaminated sites. Based on management's best estimates, a liability is accrued and an expense recorded when the contamination occurs or when the department becomes aware of the contamination and is obligated, or is likely to be obligated to incur such costs. If the likelihood of the department's obligation to incur these costs is not determinable, or if an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the Future-Oriented Consolidated Financial Statements.

J. Tangible Capital Assets

Tangible capital assets are recorded at their acquisition cost, and the following is the capitalization threshold for tangible capital assets:

• Betterments and leasehold improvements carried out on buildings and on works and infrastructure, having an initial cost of $25,000 or more;
• All tangible capital assets having an initial cost of $10,000 or more.

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of each asset as follows:

Asset class	Amortization period
Buildings	25 years
Works and infrastructure	40 years
Machinery and equipment	3 to 15 years
Informatics hardware and software	3 to 10 years
Vehicles	6 to 20 years
Leasehold improvements	Lesser of the remaining term of the lease or useful life of the improvement
Assets under construction	Once in service, in accordance with asset class
Leased tangible capital assets	In accordance with asset class if ownership is likely to transfer to PWGSC; otherwise, over the lease term

K. Seized Property Working Capital Account

The Seized Property Working Capital Account was established pursuant to section 12 of the Seized Property Management Act. Expenses incurred, and advances made, to maintain and manage any seized or restrained property and other properties subject to a management order or forfeited to Her Majesty, are charged to this account. The Seized Property Working Capital Account is credited when expenses and advances to third parties are repaid or recovered and when revenues from these properties or proceeds of their disposal are received and credited with seized cash upon forfeiture.

The total amount authorized to be charged against the Seized Property Working Capital Account at any time is $50,000,000.

3. Parliamentary Authorities

PWGSC receives most of its funding through expenditure authorities provided by Parliament. Items recognized in the Future-Oriented Statements of Operations and Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years.

Accordingly, PWGSC has different net cost of operations for the year on a government authorities requested on a funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

A. Reconciliation of Net Cost of Operations to Authorities Requested

(in millions of dollars)

	Estimated Results 2012	Planned Results 2013
Net cost of operations	2,533.2	2,418.3
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (Note 4)	(502.7)	(520.9)
Services provided without charge from other government departments (Note 7)	(57.8)	(53.1)
Decrease (increase) in vacation pay and compensatory leave	4.9	5.3
Decrease (increase) in employee future benefits (Note 5)	79.4	12.5
Decrease (increase) in contingent and environmental liabilities	(1.5)	-
Other	(28.9)	-
	(506.6)	(556.2)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets (Note 4)	566.7	647.6
Payments on lease obligations for tangible capital assets	159.1	164.1
	725.8	811.7
Authorities requested	2,752.4	2,673.8

B. Authorities Requested

(in millions of dollars)

	Estimated Results 2012	Planned Results 2013
Authorities requested
Vote 1 - Operating expenditures	2,141.0	1,999.5
Vote 5 - Capital expenditures	489.1	558.7
Vote 10 - Grants and contributions	5.2	5.5
Statutory items:
Revolving Funds	306.7	395.3
Other	106.4	92.7
	3,048.4	3,051.7
Less:
Authorities available for future years	(296.0)	(377.9)
Authorities requested	2,752.4	2,673.8

Authorities presented reflect current forecasts of statutory items, approved initiatives included and expected to be included in Estimates documents and, when reasonable estimates can be made, estimates of amounts to be allocated from Treasury Board central votes.

4. Tangible Capital Assets

(in millions of dollars)

	Estimated Results 2012	Planned Results 2013
Opening balance	5,272.8	5,399.9
Acquisition of tangible capital assets (including assets under construction)	566.7	647.6
Acquisition of capital leases / Public Private Partnership	98.1	597.9
Net disposals, write-offs and other adjustments	(35.0)	-
Amortization	(502.7)	(520.9)
Net book value	5,399.9	6,124.5

5. Employee Future Benefits

A. Pension Benefits

PWGSC's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plan benefits and they are indexed to inflation.

Both the employees and the department contribute to the cost of the Plan. The forecast expenses are $107,584,748 in 2011-2012 and $99,195,057 in 2012-2013, representing approximately 1.9 times the contributions by employees.

PWGSC's responsibility with regard to the Plan is limited to its contributions. Actuarial deficiencies are recognized in the consolidated financial statements of the Government of Canada, as the Plan's sponsor.

B. Severance Benefits

The department provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities and revolving funds. Information about the severance benefits, estimated as at the date of these statements, is as follows:

(in millions of dollars)

	Estimated Results 2012	Planned Results 2013
Accrued benefit obligation, beginning of year	232.7	153.3
Expense for the year	6.6	10.3
Expected benefits payments during the year	(86.0)	(22.8)
Accrued benefit obligation, end of year	153.3	140.8

6. Contingent and Environmental Liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown. They are grouped into two categories as follows:

A. Claims and Litigation

Claims have been made against PWGSC in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. At the date of the preparation of these Future-Oriented Consolidated Financial Statements an amount of $22,338,210 has been accrued in these statements and legal proceedings for claims estimated at $10,796,205 are pending. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the Future-Oriented Consolidated Financial Statements.

B. Contaminated Sites

Liabilities are accrued to record the estimated costs related to the management and remediation of contaminated sites where PWGSC is obligated or likely to be obligated to incur such costs. At the date of preparation of these Future-Oriented Financial Statements, the department had identified approximately 168 sites where such action is possible and for which a liability of $316,605,366 has been recorded. Of this amount, $174,016,253 is related to environmental remediation activity for the Sydney Tar Ponds and Coke Ovens remediation project. Additional new sites, changes in the remediation approaches or material changes in amounts accrued or not accrued, are not forecasted for the future years presented in these statements. However, PWGSC's ongoing efforts to assess contaminated sites may result in additional environmental liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. These liabilities will be accrued by PWGSC in the year in which they become likely and can be reasonably estimated.

7. Related Party Transactions

PWGSC is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. PWGSC enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Department received from, and provided to, other government departments, common services without charge as disclosed below:

A. Common Services Provided Without Charge by Other Government Departments

During the year PWGSC receives services without charge from certain common service organizations, related to legal services, the employer's contribution to the health and dental insurance plans and workers' compensation coverage. These services provided without charge have been recorded in PWGSC's Future-Oriented Consolidated Statement of Operations as follows:

(in millions of dollars)

	Estimated Results 2012	Planned Results 2013
Employer's contribution to the health and dental insurance plans (excluding revolving funds) paid by Treasury Board	49.9	44.9
Legal services provided by Justice Canada	6.5	5.8
Workers' compensation coverage provided by Human Resources and Skills Development Canada	1.4	2.4
Total	57.8	53.1

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services are not included in PWGSC's Future-Oriented Consolidated Statement of Operations.

B. Common Services Provided Without Charge to Other Government Departments

As a federal common service provider, PWGSC provides accommodation without charge to other government departments. Throughout the fiscal year, PWGSC forecasts that it will have provided accommodation without charge to other government departments for a total amount of $1,613,875,860. These accommodation services are not recognized as revenues in PWGSC's Future-Oriented Consolidated Statement of Operations.

8. Segmented Information

Presentation by segment is based on the Department's program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of Significant Accounting Policies in Note 2.3. The following table presents the forecasted expenses incurred and forecasted revenues generated for the main program activities, by major object of expense and by major type of revenue. The segment results for the period are as follows:

(in millions of dollars)

	Estimated Results 2012	Accommodation and Real Property Assets Management	Internal Services	Acquisitions	Linguistic Management and Services	Receiver General for Canada	Federal Pay and Pension Administration	Specialized Programs and Services	Procurement Ombudsman	Planned Results 2013
Expenses
Transfer payments
Payments in lieu of taxes to municipalities and other taxing authorities on behalf of other departments	506.3	511.0	-	-	-	-	-	-	-	511.0
Recovery of Payments in lieu of taxes to other departments	(506.3)	(511.0)	-	-	-	-	-	-	-	(511.0)
Other grants and contributions	5.2	-	-	-	5.5	-	-	-	-	5.5
	5.2	-	-	-	5.5	-	-	-	-	5.5
Operating expenses
Salaries and employee benefits	1,074.7	285.7	251.3	181.1	152.3	37.2	77.9	51.2	3.0	1,039.7
Repairs and maintenance	1,054.4	989.2	4.4	0.2	1.1	0.7	1.3	8.3	-	1,005.2
Professional and special services	802.6	624.5	61.8	32.8	45.9	4.2	25.1	10.7	0.9	805.9
Rentals	810.6	762.2	1.4	1.1	0.4	0.1	0.9	-	-	766.1
Amortization of tangible capital assets	497.0	500.1	16.6	0.2	2.6	1.0	0.4	-	-	520.9
Transportation and communications	107.3	17.7	3.3	16.1	2.6	42.0	2.2	2.3	0.1	86.3
Utilities, material and supplies	190.3	91.0	2.7	87.9	0.9	4.1	1.2	0.9	0.1	188.8
Payments in lieu of taxes to municipalities	156.3	156.9	-	-	-	-	-	-	-	156.9
Interest on capital lease payments	139.7	143.3	-	-	-	-	-	-	-	143.3
Land, buildings and works*	113.6	92.3	-	-	-	-	-	-	-	92.3
Contingent and Environmental liabilities	1.6	-	-	-	-	-	-	-	-	-
Machinery and equipment**	77.4	50.0	3.0	1.4	1.9	0.6	0.5	0.9	-	58.3
Other expenses	115.9	30.6	0.5	1.7	5.0	39.6	0.1	0.1	-	77.6
Information	12.6	2.1	0.9	0.2	-	0.1	0.1	8.7	-	12.1
Total Expenses	5,159.2	3,745.6	345.9	322.7	218.2	129.6	109.7	83.1	4.1	4,958.9
Revenues
Revenues	2,641.1	2,079.1	7.3	160.0	142.3	18.8	88.2	54.3	-	2,550.0
Total Revenues	2,641.1	2,079.1	7.3	160.0	142.3	18.8	88.2	54.3	-	2,550.0
NET COST OF CONTINUING OPERATIONS	2,518.1	1,666.5	338.6	162.7	75.9	110.8	21.5	28.8	4.1	2,408.9

* These expenses are mainly related to tangible capital assets that are below PWGSC's capitalization threshold. (Note 2.3j) (Return to original *)

** These expenses are mainly related to tangible capital assets that are below PWGSC's capitalization threshold. (Note 2.3j) (Return to original **)

9. Transfers to Other Government Departments

Effective August 4, 2011, Shared Services Canada was created, pursuant to an Order-in-Council PC Number: 2011-0877. Shared Services Canada's mandate is to standardize and consolidate information technology services in the federal government in order to reduce costs, improve services, and leverage capacity in the public and private sectors through pooled resources and greater buying power.

As a result, Public Works and Government Services Canada transferred to Shared Services Canada the control and supervision of operational domains related to email, data centers and network services, including telecommunications for voice and data, along with associated funding.

The operating results, for the period from April 1^st to August 3, 2011, related to the transferred activities is a net cost of $15,100,000 for PWGSC. The authorities still pending to be transferred to SSC in 2012-2013 total $9,400,000 and are included in the Reports on Plans and Priorities (RPP) figures. Remaining planned spending related to the transferred operations will take place in future Estimates exercises.