Future-oriented Financial Statements [PDF 357 KB]
Statement of Management Responsibility
National Energy Board management is responsible for these future-oriented 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 December 31, 2012 and reflect the plans described in the 2013-14 Report on Plans and Priorities.
The actual results achieved for the fiscal years covered in the accompanying financial information will vary from the information presented, and the variations may be material.
The future-oriented financial statements for the National Energy Board have not been audited.
The original version was signed by Calgary, Canada |
The original version was signed by |
Future-oriented Statement of Financial Position
As at March 31
(in thousands of dollars)
Forecast 2014 |
Estimated Results 2013 |
|
Liabilities | ||
Accounts payable and accrued liabilities (Note 6) | 5,750 | 8,800 |
Vacation pay and compensatory leave | 2,622 | 2,558 |
Employee future benefits (Note 7) | 7,450 | 7,241 |
Total net liabilities | 15,822 | 18,599 |
Financial Assets | ||
Due from Consolidated Revenue Fund | 5,485 | 8,560 |
Accounts receivable and advances (Note 8) | 27,828 | 30,015 |
Total gross financial assets | 33,313 | 38,575 |
Financial assets held on behalf of Government | ||
Accounts receivable and advances (Note 8) | (27,563) | (29,775) |
Total financial assets held on behalf of Government | (27,563) | (29,775) |
Total net financial assets | 5,750 | 8,800 |
Departmental net debt | 10,072 | 9,799 |
Non-financial assets | ||
Prepaid expenses | 187 | 249 |
Tangible capital assets (Note 9) | 5,919 | 5,717 |
Total non-financial assets | 6,106 | 5,966 |
Departmental net financial position | (3,966) | (3,833) |
Calgary, Canada |
|
Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.
Contingent liabilities (Note 10)
Contractual obligations (Note 11)
The accompanying notes form an integral part of these financial statements
Future-oriented Statement of Operations and
Departmental Net Financial Position
For the Year Ended March 31
(in thousands of dollars)
Forecast 2014 |
Estimated Results 2013 |
|
Expenses | ||
Energy Regulation | 44,789 | 41,868 |
Energy Information | 8,954 | 9,899 |
Internal Services | 22,333 | 25,422 |
Total Expenses | 76,076 | 77,189 |
Revenues | ||
Regulatory Revenue | 69,793 | 67,765 |
Miscellaneous Revenue | 20 | 20 |
Revenues earned on behalf of Government | (69,813) | (67,785) |
Total Revenues | - | - |
Net cost of operations before government funding and transfers | 76,076 | 77,189 |
Government funding and transfers | ||
Net cash provided by (to) Government | 69,931 | 82,552 |
Change in due from the Consolidated Revenue Fund | (3,075) | 1,527 |
Services received without charge from other government departments (Note 12) | 9,087 | 8,423 |
Net cost of operations after government funding and transfers | 133 | (15,313) |
Departmental net financial position - Beginning of year | (3,833) | (19,146) |
Departmental net financial position – End of year | (3,966) | (3,833) |
Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.
Segmented information (Note 13)
The accompanying notes form an integral part of these financial statements.
Future-oriented Statement of Change in Departmental Net Debt
For the Year Ended March 31
(in thousands of dollars)
Forecast 2014 |
Estimated Results 2013 |
|
Net cost of operations after government funding and transfers | 133 | (15,313) |
Change due to tangible capital assets | ||
Acquisition of tangible capital assets | 2,331 | 1,798 |
Amortization of tangible capital assets | (2,129) | (2,735) |
Total change due to tangible capital assets | 202 | (937) |
Change due to prepaid expenses | (62) | 66 |
Net increase (decrease) in departmental net debt | 273 | (16,184) |
Departmental net debt - Beginning of year | 9,799 | 25,983 |
Departmental net debt - End of year | 10,072 | 9,799 |
Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.
The accompanying notes form an integral part of these financial statements.
Future-oriented Statement of Cash Flows
For the Year Ended March 31
(in thousands of dollars)
Forecast 2014 |
Estimated Results 2013 |
|
Operating activities | ||
Net cost of operations before government funding and transfers | 76,076 | 77,189 |
Non-cash items: | ||
Amortization of tangible capital assets | (2,129) | (2,735) |
Services provided without charge by other government departments (Note 12) | (9,087) | (8,423) |
Variations in Statement of Financial Position: | ||
Increase (decrease) in accounts receivables and advances | 25 | 8 |
Increase (decrease) in prepaid expenses | (62) | 66 |
Decrease (increase) in accounts payables and accrued liabilities | 3,050 | (1,535) |
Decrease (increase) in other payables | - | 15,700 |
Decrease (increase) in vacation pay and compensatory leave | (64) | (121) |
Decrease (increase) in future employee benefits | (209) | 605 |
Cash used in (provided by) operating activities | 67,600 | 80,754 |
Capital investment activities | ||
Acquisitions of tangible capital assets | 2,331 | 1,798 |
Cash used in (provided by) investing activities | 2,331 | 1,798 |
Net cash provided by (to) Gov’t of Canada | 69,931 | 82,552 |
Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.
The accompanying notes form an integral part of these financial statements.
1. Authority and Objectives
The National Energy Board (NEB or Board) is an independent regulatory agency, established in 1959 under the National Energy Board Act and is designated as a department and named under Schedule I.1 of the Financial Administration Act, reporting to Parliament through the Minister of Natural Resources.
The NEB regulates the following specific aspects of the energy industry:
Other responsibilities of the NEB include providing advice to the Minister of Natural Resources Canada on the development and use of energy resources. The NEB operates as a quasi-judicial tribunal. The Board may hold public hearings at which applicants and interested parties have full rights of participation.
NEB’s corporate purpose is to promote safety, environmental protection and economic efficiency in the Canadian public interest within the mandate set by Parliament in the regulation of pipelines, energy development and trade. This principle guides the NEB in carrying out and interpreting its regulatory responsibilities. The companies that are regulated by the Board create wealth for Canadians through the transport of oil, natural gas and natural gas liquids, and through the export of hydrocarbons and electricity. As a regulatory agency, the Board’s role is to help create a framework which allows these economic activities to occur when they are in the public interest.
The NEB’s framework of program activities is comprised of:
2. Methodology and significant policies
The future-oriented 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:
These assumptions are adopted as at December 31, 2012.
3. Variations and Changes to the Forecast Financial Information
While every attempt has been made to forecast final results for the remainder of 2012-13 and for 2013-14, 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 financial statements the National Energy Board 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:
Once the Report on Plans and Priorities is presented, the National Energy Board will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.
4. Summary of Significant Accounting Policies
The future-oriented financial statements have been prepared in accordance with Treasury Board accounting policies in effect for the 2011-2012 fiscal year. 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:
Asset class | Amortization period |
Informatics hardware: | |
PCs and accessories | 3 years |
Computer servers & accessories | 5 years |
Informatics software | |
Commercial software | 2 years |
In-house developed software | 5 years |
Machinery and equipment | 5 years |
Furniture | 10 years |
Vehicles | 5 years |
Leasehold improvements | Lesser of the remaining term of the lease or useful life of the improvement |
5. Parliamentary Authorities
The NEB receives most of its funding through expenditure authorites provided by Parliament. The majority of expenditures are subsequently recovered from the companies regulated by the NEB and the funds are deposited in the Consolidated Revenue Fund of the Government of Canada.
Items recognized in the Future-oriented Statements of Operations and Financial Position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the NEB 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 net cost of operations to requested authorities: | ||
Forecast 2014 |
Estimated 2013 |
|
(in thousands of dollars) | ||
Cost of operations before government funding and transfers | 76,076 | 77,189 |
Adjustments for items affecting net cost of operations but not affecting authorities: |
||
Services provided without charge | (9,087) | (8,423) |
Amortization of tangible capital assets | (2,129) | (2,735) |
(Increase) Decrease in vacation pay and compensatory leave | (64) | (121) |
(Increase) Decrease in employee future benefits | (209) | 605 |
Total items affecting net cost of operations but not affecting authorities | (11,489) | (10,674) |
Adjustments for items affecting net cost of operations but not affecting authorities: | ||
Acquisitions of tangible capital assets | 2,331 | 1,798 |
Increase (Decrease) in prepaid expenses | (62) | 66 |
Total items not affecting net cost of operations but affecting authorities | 2,269 | 1,864 |
Forecast authorities available | 66,856 | 68,379 |
(b) Authorities requested | ||
Forecast 2014 |
Estimated 2013 |
|
(in thousands of dollars) | ||
Vote 25 - Program expenditures | 59,661 | 68,464 |
Statutory amounts | 7,195 | 6,495 |
Less: | ||
Lapsed authorities: Operating | 6,600 | |
Forecast authorities available | 66,856 | 68,379 |
6. Accounts payable and accrued liabilities
The following table presents details of the NEB’s accounts payable and accrued liabilities:
Forecast 2014 |
Estimated 2013 |
|
(in thousands of dollars) | ||
Accounts payable to other government departments and agencies | 200 | 1,000 |
Accounts payable to external parties | 4,450 | 4,200 |
Total accounts payable | 4,650 | 5,200 |
Accrued liabilities | 1,100 | 3,600 |
Total accounts payable and accrued liabilities | 5,750 | 8,800 |
7. Employee benefits
(a) Pension benefits:
The NEB'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/Québec Pension Plans benefits and they are indexed to inflation.
Both the employees and the NEB contribute to the cost of the Plan. The forecast expenses are $5,137,239 in 2013-14 and $5,437,080 in 2012-13, representing approximately 1.9 times the contributions by employees.
The NEB'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.
(b) Severance benefits:
The NEB 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.
As a result of 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 estimated and forecasted severance benefit obligation.
Information about the severance benefits, estimated as at the date of these statements, is as follows:
Forecast 2014 |
Estimated 2013 |
|
(in thousands of dollars) | ||
Accrued benefit obligation, beginning of year | 7,241 | 7,845 |
Expense for the year | 459 | 246 |
Benefits paid during the year | (250) | (850) |
Accrued benefit obligation, end of year | 7,450 | 7,241 |
8. Accounts receivable and advances
The following table presents details of NEB’s accounts receivable and advances balances:
Forecast 2014 |
Estimated 2013 |
|
(in thousands of dollars) | ||
Receivables from other Federal Government departments and agencies | 170 | 165 |
Receivables from external parties | 27,563 | 29,775 |
Employee advances | 95 | 75 |
Gross accounts receivable | 27,828 | 30,015 |
Accounts receivable held on behalf of Government | 27,563 | 29,775 |
Net accounts receivable | 265 | 240 |
9. Tangible Capital Assets
(in thousands of dollars)
Cost | |||||
Capital asset class | Opening balance | Acquisitions | Transfers | Disposals & write-offs | Closing balance |
Informatics hardware | 3,364 | 1,285 | - | - | 4,649 |
Informatics software | 8,558 | 457 | - | - | 9,015 |
Machinery and equipment | 1,257 | 114 | - | - | 1,371 |
Furniture | 1,405 | - | - | - | 1,405 |
Vehicles | 37 | 40 | - | - | 77 |
Leasehold improvements | 1,811 | - | - | - | 1,811 |
Assets under development | - | 435 | - | - | 435 |
Total | 16,432 | 2,331 | 0 | 0 | 18,763 |
Accumulated amortization | Net book value | ||||||
Capital asset class | Opening balance | Amortization | Disposals & write-offs | Closing balance | 2014 | 2013 | |
Informatics hardware | 2,389 | 590 | - | 2,979 | 1,670 | 975 | |
Informatics software | 5,116 | 1,085 | - | 6,201 | 2,814 | 3,442 | |
Machinery and equipment | 845 | 176 | - | 1,021 | 350 | 412 | |
Furniture | 652 | 143 | - | 795 | 610 | 753 | |
Vehicles | 17 | 20 | - | 37 | 40 | 20 | |
Leasehold improvements | 1,696 | 115 | - | 1,811 | - | 115 | |
Assets under development | - | - | - | - | 435 | - | |
Total | 10,715 | 2,129 | - | 12,844 | 5,919 | 5,717 |
10. Contingent liabilities
Claims and litigation
Claims have been made against the NEB in the normal course of operations. As of the date of the preparation of these future-oriented financial statements, legal proceedings for claims totalling approximately $4,200,000 are pending.
11. Contractual obligations
The nature of the NEB's activities can result in some large multi-year contracts and obligations whereby the NEB will be obligated to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:
2014 | 2015 | 2016 | 2017 | 2018 and thereafter |
Total | |
(thousands of dollars) | ||||||
Vendor Contracts | 2,370 | 178 | 25 | 25 | - | 2,598 |
12. Related party transactions
The NEB is related as a result of common ownership to all Government of Canada departments, agencies, and Crown Corporations. The NEB enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the NEB received common services which were obtained without charge from other Government departments as discussed below.
(a) Common services provided without charge by other government departments
During the year the NEB received services without charge from certain common service organizations, related to accommodation, legal services and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recognized in the NEB's Future-Oriented Statement of Operations as follows:
Forecast 2014 |
Estimated 2013 |
|
(thousands of dollars) | ||
Accommodation | 5,511 | 5,015 |
Employer's contribution to the health and dental insurance plans | 3,432 | 3,290 |
Legal Services | 144 | 118 |
Total | 9,087 | 8,423 |
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 performs services for all other departments and agencies without charge. The costs of these services, such as the payroll Government uses central agencies and common service organizations so that one department and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General are not included in the NEB's Future Oriented Statement of Operations.
(b) Other transactions with related parties:
Forecast 2014 |
Estimated 2013 |
|
(thousands of dollars) | ||
Accounts receivable from other government departments and agencies | 170 | 65 |
Accounts payable to other government departments and agencies | 200 | 1,000 |
Expenses - Other Government departments and agencies | 8,240 | 8,337 |
Revenues - Other Government departments and agencies | - | - |
13. Segmented information
Presentation by segment is based on the NEB’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 4. 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 revenues. The segment results for the period are as follows:
2013 | |||||
Energy Regulation | Energy Information | Internal Services | Total | Estimated 2013 |
|
Transfer Payments | 2,114 | - | - | 2,114 | 250 |
Operating Expenses | |||||
Salaries and employee benefits | 30,823 | 6,468 | 16,130 | 53,421 | 56,718 |
Professional and special services | 3,217 | 675 | 1,684 | 5,576 | 4,945 |
Accommodation | 3,180 | 667 | 1,664 | 5,511 | 5,015 |
Travel | 2,611 | 548 | 643 | 4,525 | 4,593 |
Amortization (Note 9) | 1,228 | 258 | 643 | 2,129 | 2,735 |
Utilities, materials and supplies | 494 | 104 | 258 | 856 | 597 |
Information | 412 | 86 | 216 | 714 | 845 |
Rentals | 369 | 77 | 193 | 639 | 570 |
Repair and maintenance | 301 | 63 | 157 | 521 | 748 |
Other | 40 | 8 | 22 | 70 | 173 |
Total expenses | 44,789 | 8,954 | 22,333 | 76,076 | 77,189 |
Revenues | |||||
Regulatory | 40,269 | 8,450 | 21,074 | 69,793 | 67,765 |
Miscellaneous | 12 | 2 | 6 | 20 | 20 |
Revenues earned on behalf of Government | (40,281) | (8,452) | (21,080) | (69,813) | (67,785) |
Total Revenues | - | - | - | - | - |
Net Cost of Operations | 44,789 | 8,954 | 22,333 | 76,076 | 77,189 |