Future-Oriented Statement of Operations for the Years Ending March 31, 2018 and March 31, 2019

Future-Oriented Statement of Operations (Unaudited)
For the Year Ending March 31 (in dollars)

  Forecast Results 2017- 18 Planned Results 2018- 19
 Independent regulatory and dispute-resolution services for transportation providers and users 24,641,101 23,304,785
  Internal Services 8,846,794 8,593,807
Total expenses 33,487,895 31,898,592
  Revenues from fines 269,313 161,090
  Sales of goods and services 65 65
  Other revenues 90 75
  Revenues earned on behalf of Government (269,468) (161,230)
Total revenues - -
Net cost of operations before government funding and transfers $ 33,487,895 $ 31,898,592

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

Original signed by:

Scott Streiner
Chairman and Chief Executive Officer
Gatineau, Canada
April 11, 2018

Original signed by:

Carole Girard CPA, CA
Chief Financial Officer
Gatineau, Canada
April 11, 2018


Notes to the Future-Oriented Statement of Operations (Unaudited)
For the Year Ending March 31

1. Methodology and Significant Assumptions

The Future-Oriented Statement of Operations has been prepared on the basis of government priorities and departmental plans as described in the Departmental Plan.

The information in the forecast results for fiscal year 2017-18 is based on actual results as at January 12, 2018 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2018-19 fiscal year.

The main assumptions underlying the forecasts are as follows:

  1. The Canadian Transportation Agency's (CTA) activities will remain substantially the same as for the previous year. However, if and when the Transportation Modernization Act (Bill C-49) receives Royal Assent, the CTA will be required to implement new responsibilities, including those related to a new mechanism called long-haul interswitching (LHI), which will require that the CTA render decisions within 30 business days, as well as those related to the development of air passenger protection regulations, which will set out the minimum obligations of airlines to passengers in a range of situations.
  2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on experience. The general historical pattern is expected to continue
  3. Based on resources provided, the CTA will deliver the expected results specified in the Departmental Plan.
  4. Estimated information is based on the parliamentary appropriations granted to the CTA through its 2018-19 Main Estimates, including an amount of $3.5 million for a mandatory government initiative (Government of Canada Fit-up Standards) to make more efficient use of office space.

These assumptions are made as at January 12, 2018.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2017-18 and for 2018-19, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing this Future-Oriented Statement of Operations, the CTA has made estimates and assumptions about the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based on past experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, are continually evaluated.

Factors that could lead to material differences between the Future-Oriented Statement of Operations and the historical statement of operations include:

  1. further changes to the operating budget, such as new initiatives or technical adjustments later in the year;
  2. the timing and amount of acquisitions and disposals of equipment, which may affect gains, losses and amortization expense;
  3. the implementation of new collective agreements; and
  4. economic conditions, which may affect both the amount of revenue earned and the collectability of receivables.

After the Departmental Plan is tabled in Parliament, the CTA will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Results Report.

3. Summary of Significant Accounting Policies

The Future-Oriented Statement of Operations has been prepared using Government of Canada’s accounting policies in effect for fiscal year 2017-18, and is based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

a) Expenses

The CTA records expenses on an accrual basis.

Expenses for the CTA’s operations are recorded when goods are received or services are rendered and include expenses related to personnel, professional and special services, repair and maintenance, utilities, materials and supplies. Expenses also include services provided without charge for accommodation, employer contributions to health and dental insurance plans, legal services and workers' compensation, which are recorded as expenses at their estimated cost. Vacation pay and compensatory leave, as well as severance benefits, are accrued and expenses are recorded as the benefits are earned by employees under their terms of employment.

Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable and inventory obsolescence, or liabilities, including contingent liabilities, to the extent the future event is likely to occur and a reasonable estimate can be made.

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

b) Revenues

Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.

Other revenues, as well as revenues from fines, are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

Revenues that are non-respendable are not available to discharge the CTA's liabilities. While the Deputy Head is expected to maintain accounting control, he has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the CTA's gross revenues.

4. Parliamentary Authorities

The CTA is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the CTA differs from financial reporting according to generally accepted accounting principles because authorities are primarily based on cash flow requirements. Items recognized in the Future-Oriented Statement of Operations in one year may be funded through parliamentary authorities in prior, current, or future years. Accordingly, the CTA has different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

a) Reconciliation of net cost of operations to requested authorities (in dollars)

  Forecast Results 2017- 18 Planned Results 2018- 19
Net cost of operations before government funding and transfers $ 33,487,895 $ 31,898,592
Adjustments for items affecting net cost of operations, but not affecting authorities:
  Amortization of tangible capital assets (170,206) (178,742)
  Gain (loss) on disposal of tangible capital assets (831) (831)
  Services provided without charge by other government departments (4,065,978) (4,009,240)
  Decrease (increase) in vacation pay and compensatory leave 149,347 49,782
  Decrease (increase) in employee future benefits (211,744) 32,434
  Refunds of previous years' expenditures 6,070 4,218
Total items affecting net cost of operations but not affecting authorities (4,293,342) (4,102,379)
Adjustment for items not affecting net cost of operations but affecting authorities:
  Acquisitions of tangible capital assets 472,975 3,590,278
  Increase (decrease) in inventory (4,816) (3,912)
  Increase (decrease) in prepaid expenses (22,278) 5,541
Total items not affecting net cost of operations but affecting authorities 445,881 3,591,907
Requested authorities $ 29,640,434 $ 31,388,120

b) Authorities requested (in dollars)

  Forecast Results 2017-18 Planned Results 2018-19
Authorities requested
  Vote 1 - Operating expenditures $ 26,441,033 $ 28,214,631
  Statutory amounts 3,199,401 3,173,489
Total authorities requested $ 29,640,434 $ 31,388,120
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