Future-oriented Financial Statements (Unaudited) for fiscal year 2012-2013 ending March 31, 2013

Table of Contents

Statement of Management Responsibility

Departmental management is responsible for these future-oriented statements, including responsibility for the appropriateness of the assumptions on which these statements were prepared. These statements are based on the best information available and the assumptions adopted as at February 10, 2012 and reflect the plans described in the Report on Plans and Priorities.

These future-oriented statements have not been audited.

Original signed by:

Yaprak Baltacıoğlu,
Deputy Head

Date

Su Dazé,
Chief Financial Officer

Date

Signed at Ottawa, ON
Date signed

Future-oriented Statement of Financial Position (Unaudited)
For fiscal year 2012-2013 ending March 31, 2013

(in thousands of dollars)

  Estimated Results
2012		 Forecast
2013
Assets    
Financial assets    
Due from Consolidated Revenue Fund 578,523 377,435
Accounts receivable and advances (note 6. Accounts receivable and advances) 77,801 78,585
Non-financial assets    
Tangible capital assets (note 7. Tangible capital assets) 5,298 9,549
Total Assets 661,622 465,569
Liabilities    
Accounts payable and accrued liabilities (note 8. Accounts payable and accrued liabilities) 656,708 456,021
Vacation pay and compensatory leave 2,713 2,109
Employee future benefits (note 9. Employee future benefits) 5,073 5,043
Total Liabilities 664,494 463,173
Equity of Canada (2,872) 2,396

Contractual obligations (note 10. Contractual obligations)

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to January 31, 2012.

The accompanying notes form an integral part of these future-oriented financial statements.

Original signed by:

Yaprak Baltacıoğlu,
Deputy Minister

Date

Su Dazé,
Chief Financial Officer

Date

Future-oriented Statement of Operations (Unaudited)
For fiscal year 2012-2013 ending March 31, 2013

(in thousands of dollars)

  Estimated Results
2012		 Forecast
2013
Expenses    
Gas Tax Fund 2,246,662 1,970,088
Building Canada Fund - Major Infrastructure Component 735,862 1,959,813
Canada Strategic Infrastructure Fund 238,625 409,744
Building Canada Fund - Communities Component 221,280 251,450
Provincial-Territorial Infrastructure Base Fund 118,830 232,802
Municipal Rural Infrastructure Fund 100,148 96,477
Green Infrastructure Fund 55,007 82,212
Border Infrastructure Fund 42,691 41,747
Internal Services 50,721 37,982
Economic Analysis and Research 2,139 4,618
Infrastructure Stimulus Fund 864,052 -
Building Canada Fund - Communities Component Top-Up 169,280 -
National Trails Coalition (2) -
Total Expenses 4,845,295 5,086,933
Revenues - -
Net Cost of Operations 4,845,295 5,086,933

Segmented Information (note 13. Segmented information)

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to January 31, 2012.

The accompanying notes form an integral part of these future-oriented financial statements.

Future-oriented Statement of Equity of Canada (Unaudited)
For fiscal year 2012-2013 ending March 31, 2013

(in thousands of dollars)

  Estimated Results
2012		 Forecast
2013
Equity of Canada, beginning of year 1,422 (2,872)
Net cost of operations (4,845,295) (5,086,933)
Net cash provided by Government 5,976,700 5,291,311
Change in Due from the Consolidated Revenue Fund (1,138,082) (201,088)
Services provided without charge by other government departments (note 11. Related party transactions) 2,383 1,978
Equity of Canada, end of year (2,872) 2,396

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to January 31, 2012.

The accompanying notes form an integral part of these future-oriented financial statements.

Future-oriented Statement of Cash Flow (Unaudited)
For fiscal year 2012-2013 ending March 31, 2013

(in thousands of dollars)

  Estimated Results
2012		 Forecast
2013
Operating activities:    
Net cost operations 4,845,295 5,086,933
Non-cash items:    
Amortization of tangible capital assets (2,583) (1,024)
Services provided without charge by other government departments (2,383) (1,978)
Variations in Statement of Financial Position:    
Increase (decrease) in receivables and advances 15,166 784
Increase in accounts payable and accrued liabilities 1,117,542 200,687
Decrease (increase) in vacation pay and compensatory leave (283) 604
Decrease in employee future benefits 1,946 30
Cash used by operating activities 5,974,700 5,286,036
Capital investment activities:    
Net acquisition of tangible capital assets (note 7. Tangible capital assets) 2,000 5,275
Cash used by capital investment activities 2,000 5,275
Net cash provided by Government of Canada 5,976,700 5,291,311

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2010 to January 31, 2012.

The accompanying notes form an integral part of these future-oriented financial statements.

Notes to the Future-oriented Financial Statements (Unaudited)

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. The applied name for this organization is Infrastructure Canada.

The department is funded through annual 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 Transport, Infrastructure and Communities.

INFC was established to lead the Government of Canada's effort to address infrastructure challenges through strategic investments in provincial, territorial and municipal assets, engagement in key partnerships, and the development and implementation of sound policies. Order in Council 2004-325 authorizes the Minister to enter into transfer payment agreements and contracts related to infrastructure initiatives in Canada.

INFC delivers its mandate under three strategic outcomes and internal services. The program activities under the outcome titled "Construction-ready infrastructure projects are provided with federal funding support" are expected to be completed in 2011-12 and these programs are included only to document forecasted spending for 2011-12. INFC outcomes are described below.

Provinces, territories and municipalities have federal financial support for their infrastructure priorities: Provides federal transfers to provincial, territorial and municipal governments for their infrastructure priorities in order to help maintain a high level of quality core public infrastructure across the country. The program activities under this strategic outcome are: Provincial-Territorial Infrastructure Base Fund and Gas Tax Fund.

Funding for quality, cost-effective public infrastructure that meets the needs of Canadians in a competitive economy, a cleaner environment and liveable communities is provided: Provides targeted project-specific investments to address federal/provincial priorities in both large and small communities as well as large strategic investments of national and regional benefit. The program activities under this strategic outcome are: Building Canada Fund-Communities Component, Building Canada Fund-Major Infrastructure Component, Green Infrastructure Fund, Canada Strategic Infrastructure Fund, Municipal Rural Infrastructure Fund, Border Infrastructure Fund and Economic Analysis and Research.

Construction-ready infrastructure projects are provided with federal funding support: Provides timely, temporary and targeted funding to construction-ready projects to support short-term economic stimulus under the Economic Action Plan. The program activities under this strategic outcome are: Infrastructure Stimulus Fund and Building Canada Fund-Communities Component Top-Up. These activities are expected to be completed in 2011-12.

Internal Services: Internal Services are groups of activities and resources that are administered to support the needs of programs and other corporate obligations of INFC. Internal Services include only those activities and resources that apply across Infrastructure Canada, not those provided specifically to a program.

2. Significant Assumptions

The future-oriented financial statements have been prepared on the basis of the Government's priorities and the plans of the department as described in the Report on Plans and Priorities. The future oriented financial statements uses accrual basis accounting whereas the Report on Plans and Priorities uses cash basis accounting. The different accounting methods used to compile the financial figures explain why there are variances in dollar amounts for each program.

The future-oriented financial statements have been prepared using the following assumptions:

  • On the basis of government policies, government priorities, and external environment at the time the future-oriented financial information was finalized.
  • According to the requirements of Treasury Board Accounting Policies which are based on Canadian generally accepted accounting principles for the public sector.
  • 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.
  • Estimated year-end information for 2012 is used as the opening position for the 2013 forecasts.

These assumptions are adopted as at February 10, 2012.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for 2011-12 and for 2012-13, the actual results achieved are likely to vary from the forecast information presented; this variation could be material.

In preparing these financial statements INFC has made estimates and assumptions concerning the future. These estimates and judgments may differ from the subsequent actual results. Estimates and judgments are continually evaluated and are based on historical experience and other methodologies, including expectations of future events that are believed to be reasonable under the circumstances.

These statements are based on appropriations and supplementary estimates approved or submitted as at January 26, 2012.

4. Summary of Significant Accounting Policies

These future-oriented financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which 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:

  1. Parliamentary authorities – INFC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to INFC 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 Statement of Operations and the Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3. Variations and Changes to the Forecast Financial Information provides a reconciliation between the bases of reporting.
  2. Net Cash Provided by Government – INFC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by INFC is deposited to the CRF and all cash disbursements made by INFC 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 Government.
  3. 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 INFC is entitled to draw from the CRF to discharge its liabilities without further appropriations.
  4. Forecasted expenses - Expenses are recorded on the accrual basis:
    • Contributions are recognized in the year in which the recipient is expected to meet the eligibility criteria or fulfill the terms of a contractual transfer agreement, provided that the transfer is authorized and a reasonable estimate can be made;
    • Vacation pay and compensatory leave are accrued as the benefits are expected to be earned by employees under their respective terms of employment;
    • Services provided without charge by other government departments for accommodation, and employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
  5. Employee future benefits:
    • Pension benefits: Eligible employees participate in the Public Service Pension Plan (Public Service Superannuation Act), a multi-employer plan administered by the Government. INFC's contributions to the Plan are charged to expenses in the year they are expected to be incurred and represent the total departmental obligation to the Plan. Current legislation does not require INFC to make contributions for any actuarial deficiencies of the Plan.
    • Severance benefits: Employees have been entitled to severance benefits under labour contracts or conditions of employment. Recent contracts have terminated this accrual for some employee union groups. These benefits have 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.
  6. Accounts receivables and advances are forecasted at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.
  7. Tangible capital assets – All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their anticipated acquisition cost. INFC does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves, and museum collections. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
Asset class Amortization period
Informatics Hardware 5 to 10 years
Informatics Software – Purchased 3 years
Informatics Software – Developed 7 years
Leasehold improvements period of lease
Assets under construction Once in service, on the basis of the asset type

5. Parliamentary Appropriations

INFC receives its funding through annual Parliamentary authorities. Items recognized in the Future-oriented Statement of Operations and the Future-oriented Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, INFC has different net results 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 future-oriented net cost of operations to current year appropriations used

(in thousands of dollars)

  Estimated Results
2012		 Forecast
2013
Net cost of operations 4,845,295 5,086,933
Adjustments for items affecting net cost of operations but not affecting authorities:    
Amortization of tangible capital assets (2,583) (1,024)
Services provided without charge by other government departments (2,383) (1,978)
Increase in vacation pay and compensatory leave (283) 604
Increase in employee future benefits 1,946 30
Increase in accrued liabilities not charged to authorities (note 8. Accounts payable and accrued liabilities) (275) (236)
Refunds of previous year's expenditures 115,803 15,960
Total net cost of operations 4,957,520 5,100,289
Adjustments for items not affecting net cost of operations but affecting authorities:    
Acquisitions of tangible capital assets 2,000 5,275
Change in advances (4,992) -
Current year authorities used 4,954,528 5,105,564

b) Authorities provided and used

(in thousands of dollars)

  Estimated Results
2012		 Forecast
2013
Vote 55/40 – Operating Expenditures 63,949 55,006
Vote 60/45 – Contributions 5,674,456 5,045,585
Statutory Amounts    
Employee Benefit Plan 5,038 4,973
Infrastructure Stimulus Fund 92,042  
Provincial-Territorial Infrastructure Base Funding Program Accelerated 157,508  
Green Infrastructure Fund 65,135  
Less:    
Lapsed Appropriations:    
Operating (3,600)  
Contributions (1,100,000)  
Current year authorities used 4,954,528 5,105,564

6. Accounts receivable and advances

(in thousands of dollars)

  Estimated Results
2012		 Forecast
2013
Receivables from other government departments and agencies 77,800 78,584
Advances to external parties - -
Employee advances 1 1
Total accounts receivable and advances 77,801 78,585

7. Tangible capital assets

Click here to see the Tangible Capital Assets (in thousands of dollars)

8. Accounts payable and accrued liabilities

(in thousands of dollars)

  Estimated Results
2012		 Forecast
2013
Payables to other government departments and agencies - -
Payables to external parties 656,328 455,405
Accrued Liabilities 380 616
Total 656,708 456,021

9. Employee future benefits

  1. Pension benefits:

    INFC's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. 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 Plans benefits and they are indexed to inflation.

    Both the employees and INFC contribute to the cost of the Plan. The forecasted expenses are $4,534,237 in 2011-12 and $4,481,949 in 2012-13.

  2. Severance benefits:

    INFC provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Employee contracts that have been recently signed have ceased the accumulation of severance benefits. Some employees have opted to have severance benefits paid during the implementation of their revised contracts. The remaining benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

    (in thousands of dollars)

      Estimated Results
    2012    		 Forecast
    2013
    Accrued benefit obligation, beginning of year 7,019 5,073
    Expense for the year 346 236
    Benefits paid during year (2,292) (266)
    Accrued benefit obligation, end of year 5,073 5,043

10. Contractual obligations

Click here to see the Contractual Obligations (in thousands of dollars)

11. Related party transactions

INFC is related as a result of common ownership to all Government departments, agencies, and Crown corporations. INFC enters into transactions with these entities in the normal course of business and on normal trade terms. INFC receives common services which are obtained without charge from other Government departments as disclosed below.

a) Services provided without charge by other government departments

INFC receives services without charge from certain common service organizations, related to accommodation services and the employer's contribution to the health and dental insurance plans. These services without charge are recorded in INFC's Future-oriented Statement of Operations as follows:

in thousands of dollars

  Estimated Results
2012		 Forecast
2013
Employer's contribution to the health and dental insurance plan 1,742 1,855
Accommodation 641 123
Total 2,383 1,978

The Government has centralized some of its administrative activities for efficiency and 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 payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in INFC's Statement of Operations.

12. Transfer to Shared Services Canada

Pursuant to s. 31.1 of the Financial Administration Act and Order-in-Council P.C. 2011-1297 effective November 15, 2011, $1,600,155 was deemed to have been appropriated to Shared Services Canada Operating Expenditures' vote during 2011-12, which results in a reduction for the same amount in Infrastructure Canada, Vote 50, Appropriation Act No. 1 2011-2012.

13. Segmented information

Click here to see the Segmented Information (in thousands of dollars)