Future-Oriented Financial Statement for the year ending March 31, 2015

Statement of Management Responsibility

Responsibility for the compilation, content, and presentation of the accompanying future-oriented statement of operations (FOSO) for the year ending March 31, 2015 rests with departmental management. The FOSO has been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector. The FOSO is submitted for Part III of Estimates (Report on Plans and Priorities), and will be used in the CNSC's Departmental Performance Report to compare with actual results.

Management is responsible for the objectivity of the information contained in the FOSO and for the process of developing assumptions. Assumptions and estimates are based upon information available and known to management as at January 20, 2014, reflect current business and economic conditions, assume a continuation of current governmental priorities, and are consistent with the CNSC's mandate and strategic objectives. Much of the FOSO is based on these assumptions, best estimates, and judgment, and give due consideration to materiality. At the time of preparation of the FOSO, management believes the estimates and assumptions to be reasonable. However, as with all such assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends into the future.

The actual results achieved for the fiscal years covered in the accompanying FOSO will vary from the information presented, and the variations may be material.

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Michael Binder
President

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Stéphane Cyr
Acting Vice-President, Corporate Services Branch
and Chief Financial Officer

Future-Oriented Statement of Operations (Unaudited)

For the year ended March 31 (in thousands of dollars)
  Estimated Results 2014 Planned Results 2015
Expenses
Salaries and employee benefits $ 110,704 $ 109,030
Professional and special services 19,754 21,267
Accommodation 8,765 9,409
Travel and relocation Amortization 4,588 4,622
Amortization 3,750 3,500
Furniture, repairs and rentals 5,468 5,490
Communication and information 1,210 1,298
Grants and contributions 1,771 1,770
Utilities, materials and supplies 998 1,071
Other 16 17
Total expenses 157,024 157,474
Revenues
Licence fees 107,515 109,589
Special projects 2,317 1,876
Total revenues 109,832 111,465
Net cost of operations 47,192 46,009

The accompanying notes form an integral part of these future-oriented statement of operations.

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 the government priorities and the plans of the CNSC as described in the 2014-15 Report on Plans and Priorities.

The information in the estimated results for fiscal year 2013-14 is based on actual results as at September 30, 2013 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2014-15 fiscal year.

The main assumptions are as follows:

  • The CNSC's activities will remain substantially the same.
  • Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience and planned level of activity.
  • Allowances for uncollectibility are based on historical experience. The general historical pattern is expected to continue.
  • Estimated year end information for 2013‐14 is used as the opening position for the 2014‐15 planned results.

These assumptions are adopted as at January 20, 2014.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2013‐14 and for 2014‐15, 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 Canadian Nuclear Safety Commission 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 statement of operations and the historical statement of operations include:

  • Changes to the operating budget, new initiatives or technical adjustments later in the year may affect both revenue and expenditure levels.
  • Economic conditions may affect both the amount of revenue earned and the collectability of accounts receivables.
  • The timing and value of capital asset acquisitions and disposals may affect gains and losses on the disposition of capital assets and amortization expenses.

Once the Report on Plans and Priorities is presented, Canadian Nuclear Safety Commission 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 .

3. Summary of Significant Accounting Policies

The future‐oriented statement of operations has been prepared in accordance with the Treasury Board Accounting Standards (TBAS) in effect for the 2013‐14 fiscal year. These accounting standards, 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. The significant accounting policies are:

(a) Expenses

Expenses are recorded on an accrual basis. Expenses for the Department operations are recorded when goods are received or services are rendered including services provided without charges for accomodation, employee contributions to health and dental insurance plans, legal services and worker's 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 respective terms of employment.

Transfer payments are recorded as expenses when the recipent has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement or, in the case of transactions which do not form part of an existing program, when the Government announces a decision to make non‐recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial  statement. 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.

Expenses also include provisions to  reflect changes in the value of assets, including provisions for bad debt on accounts receivable, provision for valuation on loans, investments and advances and inventory obsolescence or liabilities, including contingent liabilities and environmental 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) Forecasted Revenue

On December 17, 2007, the Government of Canada conferred on the CNSC the authority to spend licence fee revenue. Revenue is recognized in the period in which the underlying transaction or event that gave rise to the revenue takes place. Licence fee revenue is recognized on a straight‐line basis over the period to which the fee payment pertains (normally three months or one year). Licence fees received for future year licence periods are recorded as deferred revenue.

Certain educational institutions, not‐for‐profit research institutions wholly owned by educational institutions, publicly funded health care institutions, not‐for‐profit emergency response organizations and federal government departments are not subject to the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations (Regulations). The CNSC provides licences to these organizations free of charge. The value of licences provided free of charge is calculated on the same basis as licence fees for organizations subject to the Regulations. The CNSC does not include the foregone revenue associated with these licences in the Statement of Operations.

4. Parliamentary Authorities

The CNSC receives its funding through parliamentary and statutory appropriations. Items recognized in the future‐oriented statement of operations in one year may be funded through parliamentary authorities in prior, current and future years. Accordingly, the CNSC has different net results of operations for the year on a government funding basis than on an accrual accounting basis. These differences are reconciled in the following table:

(a) Authorities requested (in thousands of dollars)
  2014 2015
Authorities requested
Vote 20 $ 45,317 $ 36,578
Statutory Amounts:
Expenditures pursuant to Subsection 21(3) of the Nuclear Safety and Control Act 89,582 91,246
Contributions to employee benefit plans 14,886 14,514
Authorities requested 149,785 142,338
Less
Lapsed Vote 20 ‐ CNSC program expenditures (906) 3,579
Deferred revenue available in future years 2,235 2,231
Authorities forecasted to be used $ 148,456 $ 143,686

(b) Reconciliation of net cost of operations to requested authorities (in thousands of dollars)
  2014 2015
Net cost of operations before government funding $ 47,192 $ 46,009
Adjustments for items affecting net cost of operations but not affecting authorities:
Add (Less):
Services provided without charge by other government departments (13,486) (13,489)
Amortization of tangible capital assets (3,750) (3,500)
Revenues pursant to Subsection 21(3) of the Nuclear Safety and Control Act 109,832 111,465
Decrease in employee future benefits 7,730 1,500
Increase in vacation pay and compensatory leave (700) (700)
  99,626 2,401
Adjustments for items affecting net cost of operations but not affecting authorities:
Add (Less):
Acquisitions of tangible capital assets 1,638 2,401
  1,638 2,401
Authorities forecasted to be used $ 148,456 $ 143,686
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