Future-Oriented Consolidated Departmental Financial Statements

For the fiscal year ending March 31, 2014

Table of Contents

• Statement of Management Responsibility
  • Future-Oriented Consolidated Statement of Financial Position
  • Future-Oriented Consolidated Statement of Operations and Departmental Net Financial Position
  • Future-Oriented Consolidated Statement of Change in Departmental Net Debt
  • Future-Oriented Consolidated Statement of Cash Flow
• Notes to the Future-Oriented Consolidated Financial Statements
  • 1. Authority and Objectives
  • 2.1 Methodology and Significant Assumptions
  • 2.2 Variations and Changes to the Forecast Financial Information
  • 2.3 Summary of Significant Accounting Policies
  • 3. Parliamentary Authorities
  • 4. Employee Future Benefits
  • 5. Contingent and Environmental Liabilities
  • 6. Tangible Capital Assets
  • 7. Related Party Transactions
  • 8. Segmented Information

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 the date of signature and reflect the plans described in the Report on Plans and Priorities.

Michelle d'Auray, Deputy Minister
Gatineau, Canada
January 29, 2013

Alex Lakroni, Chief Financial Officer
Gatineau, Canada
January 29, 2013

Future-Oriented Consolidated Statement of Financial Position (Unaudited)

As at March 31

(in millions of dollars)

	Estimated Results 2013	Planned Results 2014
Liabilities
Accounts payable and accrued liabilities	741.7	757.0
Vacation pay and compensatory leave	53.5	52.3
Other liabilities	83.3	84.5
Lease obligations for tangible capital assets	2,433.8	2,815.4
Public Private Partnership accrued liabilities	143.3	143.3
Lease inducements	39.4	38.5
Employee future benefits (Note 4)	107.8	73.4
Contingent and environmental liabilities (Note 5)	317.6	317.6
Total liabilities	3,920.4	4,282.0
Financial assets
Due from Consolidated Revenue Fund	429.5	497.9
Accounts receivable and advances	442.7	384.6
Seized Property Working Capital Account	(11.5)	(11.5)
	860.7	871.0
Financial assets held on behalf of Government
Accounts receivable and advances	(14.6)	(14.0)
Seized Property Working Capital Account	11.5	11.5
	(3.1)	(2.5)
Total net financial assets	857.6	868.5
Departmental net debt	3,062.8	3,413.5
Non-financial assets
Prepaid expenses	4.3	4.1
Inventory	5.1	5.0
Tangible capital assets (Note 6)	5,985.1	6,619.9
	5,994.5	6,629.0
Departmental net financial position	2,931.7	3,215.5

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

Michelle d'Auray, Deputy Minister
Gatineau, Canada
January 29, 2013

Alex Lakroni, Chief Financial Officer
Gatineau, Canada
January 29, 2013

Future-Oriented Consolidated Statement of Operations and Departmental Net Financial Position (Unaudited)

For the Year Ending March 31

(in millions of dollars)

	Estimated Results 2013	Planned Results 2014
Expenses
Accommodation and Real Property Services	4,074.2	3,836.5
Acquisitions Program	395.7	364.1
Federal Pay and Pension Administration	242.6	271.9
Internal Services	275.9	206.1
Linguistic Management and Services	222.3	205.7
Receiver General for Canada	85.4	104.2
Specialized Programs and Services	94.1	84.2
Procurement Ombudsman	4.4	4.3
Expenses incurred on behalf of Government	(30.9)	(30.9)
	5,363.7	5,046.1
Revenues
Sales of goods and information products	1,232.5	1,258.8
Rentals	741.5	847.7
Services of a non-regulatory nature	421.6	372.5
Services of a regulatory nature	174.9	148.4
Other revenues	383.7	46.6
Revenue from Seized Property Proceeds Account	28.7	28.7
Revenues earned on behalf of Government	(98.1)	(98.1)
	2,884.8	2,604.6
Net cost of operations before government funding	2,478.9	2,441.5
Government Funding
Net cash provided by Government of Canada	2,448.8	2,597.7
Change in due from Consolidated Revenue Fund	305.5	68.4
Services provided without charge by other government departments (Note 7)	60.9	59.2
	2,815.2	2,725.3
Net cost of operations after government funding	(336.3)	(283.8)
Departmental Net Financial Position - Beginning Of Year	2,595.4	2,931.7
Departmental Net Financial Position - End of year	2,931.7	3,215.5

Segmented information (Note 8)

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

Future-Oriented Consolidated Statement of Change in Departmental Net Debt (Unaudited)

For the Year Ending March 31

(in millions of dollars)

	Estimated Results 2013	Planned Results 2014
Net Cost of Operations after government funding	(336.3)	(283.8)
Change Due to Tangible Capital Assets
Acquisitions of tangible capital assets (Note 6)	725.0	755.9
Acquisitions of leased tangible capital assets (Note 6)	311.0	577.4
Acquisitions of Public Private Partnership assets (Note 6)	104.1	-
Amortization of tangible capital assets (Note 6)	(514.1)	(568.9)
Net disposals, write offs and other adjustments (Note 6)	(120.2)	(129.6)
Change Due to Tangible Capital Assets	505.8	634.8
Change Due to Prepaid Expenses	0.6	(0.2)
Change Due to Inventory	1.1	(0.1)
Net increase in departmental net debt	171.2	350.7
Departmental Net Debt - Beginning of year	2,891.6	3,062.8
Departmental Net Debt - End of year	3,062.8	3,413.5

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 2013	Planned Results 2014
Operating activities
Net cost of operations before government funding	2,478.9	2,441.5
Non cash items:
Amortization of tangible capital assets (Note 6)	(514.1)	(568.9)
Net disposals, write offs and other adjustments (Note 6)	(120.2)	(129.6)
Services provided without charge from other government departments (Note 7)	(60.9)	(59.2)
Variations in Future-Oriented Consolidated Statement of Financial Position:
Increase in accounts payable and accrued liabilities	(49.3)	(15.3)
(Increase) decrease in vacation pay and compensatory leave	(2.3)	1.2
Decrease (increase) in other liabilities	2.0	(1.2)
Increase in Public Private Partnership accrued liabilities	(65.0)	-
(Increase) decrease in lease inducements	(3.9)	0.9
Decrease in employee future benefits	31.5	34.4
Decrease in contingent and environmental liabilities	19.2	-
Decrease in accounts receivable and advances	(252.2)	(57.5)
Increase (decrease) in prepaid expenses	0.6	(0.2)
Increase (decrease) in inventory	1.1	(0.1)
Cash used by operating activities	1,465.4	1,646.0
Capital investing activities
Acquisitions of tangible capital assets (Note 6)	725.0	755.9
Acquisitions of leased tangible capital assets (Note 6)	311.0	577.4
Acquisitions of Public Private Partnership assets (Note 6)	104.1	-
Cash used by capital investing activities	1,140.1	1,333.3
Financing activities
Lease obligations for new tangible capital assets	(311.0)	(577.4)
Payments on capital leases	154.3	195.8
Cash from financing activities	(156.7)	(381.6)
Net cash provided by Government of Canada	2,448.8	2,597.7

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 Services program activity provides federal departments and agencies with safe, healthy and affordable office and common use accommodation that supports 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;
• Acquisitions program activity shows 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 government and Canadians;
• Federal Pay and Pension Administration program activity provides reliable central systems and processes for pay and pension administration to other federal organizations. Through our pay and pension services, PWGSC ensures that federal government employees and pensioners are paid accurately and on time;
• 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, such as human resources, information technologies, finance and corporate services;
• 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 payments services and document imaging;
• Specialized Programs and Services program activity provides federal organizations with high quality, timely and accessible specialized services and programs to federal institutions in support of sound, prudent and ethical management and operations; and,
• Procurement Ombudsman program activity, operating at arms 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 certain threshold, and complaints concerning the administration of contracts, and ensures the provision of an alternative dispute resolution program for contracts. This program helps to promote fairness and transparency of the procurement process.

2.1 Methodology and 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 2012-2013 estimated results presented in the 2013-2014 Future-Oriented Consolidated Financial Statements differ from the planned 2013 results presented in the 2012-2013 Future-Oriented Consolidated Financial Statements. They have been adjusted to reflect the financial effects of the parliamentary expenditure authorities related to the 2012-2013 year (such as Supplementary Estimates A, B and C, reprofiling of funds, carry forward and earmarked items).

The 2012-13 management estimates have been calculated based on forecasts of PWGSC's activities that are known or expected for the current year.

The main assumptions underlying the forecasts are as follows:

1. 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.

These assumptions are adopted as at the date of signature.

2.2 Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2012-2013 and for 2013-2014, 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, 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 Consolidated Financial Statements and the historical financial statements include:

• The timing and amounts of acquisitions and disposals of property, plant and equipment, which may affect gains/losses and amortization expense;
• Implementation of new collective agreements;
• Economic conditions may affect both the amount of revenue earned and the collectability of loan receivables; and
• Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

2.3 Summary of Significant Accounting Policies

The Future-Oriented Consolidated Financial Statements have been prepared using the Government's accounting policies stated below, 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. Parliamentary Authorities

PWGSC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to PWGSC does not parallel financial reporting according to Canadian public sector accounting standards since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Future-Oriented Consolidated Statement of Operations and Departmental Net Financial Position and in the Future-Oriented Consolidated Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a high level reconciliation between the two bases of reporting.

B. Consolidation

These Future-Oriented Consolidated Financial Statements include the accounts of five revolving funds as listed below, one of them being inactive. Four revolving funds prepare a complete set of financial statements annually that are audited and published in the Public Accounts of Canada. The accounts of these revolving funds have been consolidated with those of PWGSC and intradepartmental balances and transactions have been eliminated.

The PWGSC revolving funds are as follows:

• Defence Production Revolving Fund (inactive)
• Optional Services Revolving Fund
• Real Property Disposition Revolving Fund
• Real Property Services Revolving Fund
• 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 the Consolidated Revenue Fund (CRF)

These 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 authorities, in order 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.
• Other revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
• Revenues that are non-respendable are not available to discharge the Department's liabilities. While the Deputy Minister of PWGSC is expected to maintain accounting control, 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.

F. Expenses

Expenses are recorded on an accrual basis of accounting:

• Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses 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 statements. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.
• 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.
• 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 recovered from them and are recorded as Grants in the Public Accounts of Canada.

G. Employee Future Benefits

1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Department's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The Department's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. 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. Further information is provided in Note 4B.

H. Lease Inducements

Lease inducements represent incentives received by PWGSC to enter into a lease. Lease inducements include incentives such as: free rent, cash received to be applied to rent, lump sum cash, leasehold improvements and moving costs paid by the lessor. Lease inducements are accounted for as follows:

• Rent-free periods or periods of significantly reduced rent are allocated over the term of the lease on a straight line basis;
• Cash payments from the lessor to the lessee are accounted for by the lessee, as reductions in rental expense over the term of the lease;
• Leasehold improvements are amortized over the remaining life of the lease or the useful life of the improvement, whichever is shorter;
• Moving costs absorbed by the lessor are amortized over the term of the lease.

I. 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.

J. 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 costs are disclosed as contingent liabilities in the notes to the Future-Oriented Consolidated Financial Statements.

K. 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.

The department does not capitalize intangibles and non-operational heritage assets such as: works of art and historical treasures that have cultural, aesthetic or historical value; immovable assets located on Indian Reserves; or museum collections.

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
Leased tangible capital assets	In accordance with asset class if ownership is likely to transfer to PWGSC; otherwise, over the lease term

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

L. 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 outstanding at any time is $50,000,000.

Any shortfall between the proceeds from the disposition of any property forfeited to Her Majesty and the amounts that were charged to this account and that are still outstanding, is charged to a Seized Property Proceeds Account and credited to the Seized Property Working Capital Account.

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 Departmental Net Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years.

Accordingly, PWGSC has different net results of operations for the year on a modified cash 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 2013	Planned Results 2014
Net cost of operations before government funding	2,478.9	2,441.5
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (Note 6)	(514.1)	(568.9)
Services provided without charge by other government departments (Note 7)	(60.9)	(59.2)
(Increase) decrease in vacation pay and compensatory leave	(2.3)	1.2
Decrease in employee future benefits (Note 4)	31.5	34.4
Decrease in contingent and environmental liabilities	19.2	-
	(526.6)	(592.5)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets (Note 6)	725.0	755.9
Payments on lease obligations for tangible capital assets	154.3	195.8
	879.3	951.7
Authorities requested	2,831.6	2,800.7

B. Authorities Requested

(in millions of dollars)

	Estimated Results 2013	Planned Results 2014
Vote 1 - Operating expenditures	2,135.7	1,940.7
Vote 5 - Capital expenditures	578.4	719.7
Vote 10 - Grants and contributions	5.5	-
Statutory items:
Revolving Funds	268.7	255.4
Other	92.7	114.8
	3,081.0	3,030.6
Less:
Authorities available for future years	(249.4)	(229.9)
Authorities requested	2,831.6	2,800.7

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

4. 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 $121,984,049 in 2012-2013 and $120,713,094 in 2013-2014.

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 salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities and revolving funds.

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

Information about the severance benefits, estimated as at the date of these statements, is as follows:

(in millions of dollars)

	Estimated Results 2013	Planned Results 2014
Accrued benefit obligation, beginning of year	139.3	107.8
Expense for the year	5.8	2.9
Expected benefits payments during the year	(37.3)	(37.3)
Accrued benefit obligation, end of year	107.8	73.4

5. 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. While the total amount claimed in these actions is significant, their outcomes are not determinable. As at the date of the preparation of these Future-Oriented Consolidated Financial Statements, the department has recorded an allowance amounting to $35,996,543 for claims and litigations where it is likely that there will be a future payment and a reasonable estimate of the loss can be made. Claims and litigations for which the outcome is not determinable and a reasonable estimate can be made by management amount to $7,931,002, as at the date of the preparation of these 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. As at the date of the preparation of these Future-Oriented Financial Statements, the department had identified approximately 143 sites where such action is possible and for which a liability of $281,612,000 has been recorded. Of this amount, $128,478,851 is related to environmental remediation activity for the Sydney Tar Ponds and Coke Ovens remediation project. Additional new sites, changes in the remediation approach 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.

6. Tangible Capital Assets

(in millions of dollars)

	Estimated Results 2013	Planned Results 2014
Opening balance	5,479.3	5,985.1
Acquisition of tangible capital assets (including assets under construction)	725.0	755.9
Acquisition of leased tangible capital assets	311.0	577.4
Acquisition of Public Private Partnership	104.1	-
Amortization	(514.1)	(568.9)
Net disposals, write offs and other adjustments	(120.2)	(129.6)
Net book value	5,985.1	6,619.9

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 and Departmental Net Financial Position as follows:

(in millions of dollars)

	Estimated Results 2013	Planned Results 2014
Employer's contribution to the health and dental insurance plans (excluding revolving funds) paid by Treasury Board	54.3	53.0
Legal services provided by Justice Canada	4.4	4.0
Workers compensation coverage provided by Human Resources and Skills Development Canada	2.2	2.2
Total	60.9	59.2

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, such as the audit services provided by the Office of the Auditor General and information technology services provided by Shared Services Canada are not included in PWGSC's Future-Oriented Consolidated Statement of Operations and Departmental Net Financial Position.

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. For the year ended March 31, 2014, PWGSC forecasts that it will have provided accommodation without charge to other government departments for a total amount of $1,521,619,155. These accommodation services are not recognized as revenues in PWGSC's Future-Oriented Consolidated Statement of Operations and Departmental Net Financial Position.

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 2013	Accommo- dation and Real Property Services	Acquisitions Program	Federal Pay and Pension Adminis- tration	Internal Services	Linguistic Manage- ment and Services	Receiver General for Canada	Specialized Programs and Services	Procurement Ombudsman	Expenses incurred on behalf of Government	Intradepart- mental transactions (Note 2.3B)	Planned Results 2014
Expenses
Transfer payments
Payments in lieu of taxes to municipalities and other taxing authorities on behalf of other departments	519.5	545.6	-	-	-	-	-	-	-		-	545.6
Recovery of Payments in lieu of taxes from other departments	(519.5)	(545.6)	-	-	-	-	-	-	-		-	(545.6)
Other grants and contributions	5.5	-	-	-	-	-	-	-	-		-	-
	5.5	-	-	-	-	-	-	-	-		-	-
Operating expenses
Salaries and employee benefits	1,159.8	384.4	179.6	119.9	254.4	142.9	19.5	46.3	2.9	-	(2.5)	1,147.4
Repairs and maintenance	1,047.3	872.3	0.5	1.0	8.8	3.3	0.9	9.3	-	-	(16.2)	879.9
Professional and special services	871.7	927.5	29.7	108.9	80.6	63.4	9.3	21.5	1.1	-	(415.0)	827.0
Rentals	838.8	803.1	1.4	1.4	4.6	10.9	0.2	2.8	-	-	(37.3)	787.1
Amortization of tangible capital assets	514.1	542.3	-	19.7	3.3	2.4	1.1	-	-	-	-	568.8
Transportation and communications	95.6	14.9	18.3	4.1	2.8	2.9	47.4	2.3	-	-	(1.4)	91.3
Utilities, material and supplies	201.1	103.0	122.8	2.5	2.5	0.8	5.8	0.8	0.1	-	(18.2)	220.1
Payments in lieu of taxes to municipalities	156.9	156.3	-	-	-	-	-	-	-	-	-	156.3
Interest on capital lease payments	143.3	139.7	-	-	-	-	-	-	-	-	-	139.7
Land, buildings and works1	147.5	123.9	-	-	-	-	-	-	-	-	-	123.9
Machinery and equipment2	85.9	48.5	1.2	13.2	6.3	1.8	0.5	1.8	-	-	(2.8)	70.5
Other expenses	85.8	154.7	3.0	1.2	0.6	22.1	23.2	(0.2)	0.2	-	(179.8)	25.0
Information	10.4	1.2	0.2	0.3	0.8	0.1	0.1	7.0	-	-	(0.6)	9.1
Expenses from Seized Property Proceeds Account	-	-	30.9	-	-	-	-	-	-	(30.9)	-	-
Intradepartmental transactions (Note 2.3B)		(435.3)	(23.5)	(0.3)	(158.6)	(44.9)	(3.8)	(7.4)	-	-	673.8	-
Consolidated Expenses	5,363.7	3,836.5	364.1	271.9	206.1	205.7	104.2	84.2	4.3	(30.9)	-	5,046.1
Revenues
Sales of goods and information products	1,390.8	1,311.6	0.6	-	-	-	-	5.2	-		(58.6)	1,258.8
Rentals	936.5	880.1	-	-	0.8	-	-	-	-		(33.2)	847.7
Services of a non-regulatory nature	412.9	71.6	186.4	-	157.9	180.0	-	42.6	-		(266.0)	372.5
Services of a regulatory nature	162.6	7.5	-	103.4	1.4	-	40.2	0.9	-		(5.0)	148.4
Other revenues	51.4	291.4	24.4	17.8	12.7	6.9	0.2	4.2	-		(311.0)	46.6
Revenue from Seized Property Proceeds Account	28.7	-	28.7	-	-	-	-	-	-		-	28.7
Revenues earned on behalf of Government	(98.1)	(7.8)	(53.3)	(18.1)	(13.3)	-	(1.6)	(4.0)	-		-	(98.1)
Intradepartmental transactions (Note 2.3B)		(435.3)	(23.5)	(0.3)	(158.6)	(44.9)	(3.8)	(7.4)	-		673.8	-
Consolidated Revenues	2,884.8	2,119.1	163.3	102.8	0.9	142.0	35.0	41.5	-		-	2,604.6
Net cost of operations before Government funding	2,478.9	1,717.4	200.8	169.1	205.2	63.7	69.2	42.7	4.3	(30.9)	-	2,441.5

^1,2These expenses are mainly related to tangible capital assets that are below PWGSC's capitalization threshold. (Note 2.3K)