Northern Pipeline Agency Future-Oriented Statement of Operations (unaudited)

Future Oriented Condensed Statement of Operations for the year ending March 31, 2020 (dollars)

	Forecast Results 2019	Planned Results 2020
Expenses
Professional and special services	182,512	285,000
Salaries and employee benefits	26,154	219,070
Transportation and communications	5,000	25,000
Rentals	9,805	11,000
Amortization	2,663	2,663
Information	-	1,000
Utilities, materials, and supplies	650	1,000
Transfer payments	-	540,000
Small equipment	-	1,000
Repair and maintenance	250	1,000
Total Recoverable Expenses	227,034	1,086,733
Services provided without charge by other government departments	2,212	1,896
Revenues
Regulatory Revenue	227,034	1,086,733
Revenue earned on behalf of government	(227,034)	(1,086,733)
Total Net Revenues	-	-
Net cost of operations before government funding and transfers	229,246	1,088,629

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

Northern Pipeline Agency Notes to the Future-Oriented Statement of Operations (Unaudited)

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 Northern Pipeline Agency (the Agency) Departmental Plan.

The information in the forecast results for fiscal year 2018-19 is based on actual results as at November 30, 2018 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2019-20 fiscal year.

The main assumptions underlying the forecasts are as follows:

• The Agency’s activities will remain substantially the same as in the previous year and are reflected in the 2018-19 authorities and the 2019-20 Main Estimates; and
• Expenses and revenues, including the determination of amounts internal and external to the government, are based on past experience. The general historical pattern is expected to continue.

These assumptions were made as at November 30, 2018.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2018-19 and for 2019-20, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

In preparing this Future-Oriented Statement of Operations, the Agency 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, and are continually evaluated.

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

• The timing and amount of acquisitions and disposals of tangible capital assets may affect gains, losses and amortization expense;

• The implementation of new collective agreements; and
• Other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.

After the Departmental Plan is tabled in Parliament, the Agency 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 the Government of Canada’s accounting policies in effect for fiscal year 2018-19, 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

Transfer payments are recorded as an expense in the year the transfer is authorized and all eligibility criteria have been met by the recipient.

Other expenses are generally recorded when goods are received or services are rendered, and include expenses related to personnel, professional and special services, transportation and communications. rental, repair and maintenance, utilities, materials and supplies, amortization of tangible capital assets, as well as management services provided without charge by Natural Resources Canada.

b) Revenues

Revenues from regulatory fees recovered from Foothills Pipe Lines Ltd. are recognized in the year in which the expenses are incurred.

Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.

Revenues that are non-respendable are not available to discharge the Agency’s liabilities. While the Commissioner is expected to maintain accounting control, she has no authority over 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 as a reduction of the Agency’s gross revenues.

4. Parliamentary authorities

The Agency is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Agency differs from financial reporting according to generally accepted accounting principles because authorities are mainly 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 Agency 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 2019	Planned Results 2020
Net cost of operations before government funding and transfers	229,246	1,088,629
Adjustments for items affecting net cost of operation but not affecting authorities:
Services received without charge by other government departments	(2,212)	(1,896)
Amortization of tangible capital assets	(2,663)	(2,663)
Requested authorities	224,371	1,084,070

(b) Authorities requested (in dollars)

	Forecast Results 2019	Planned Results 2020
Authorities requested:
Vote 1 – Program expenditures	465,000	1,055,000
Statutory amounts	28,880	29,070
Less:
Lapsed – Program expenditures	244,080	-
Lapsed – Statutory	25,429	-
Requested authorities	224,371	1,084,070