ARCHIVED - Future-Oriented Financial Information

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Canada Border Services Agency (Agency Activities)
Future-Oriented Statement of Operations (Unaudited)
For the Year Ending March 31, 2015

(in thousands of dollars)
Estimated Results 2014 Planned Results 2015
Admissibility Determination  $ 880,144  $ 847,899
Internal Services 538,760 519,022
Immigration Enforcement 183,828 177,093
Risk Assessment 170,574 164,325
Revenue and Trade Management 104,987 101,141
Secure and Trusted Partnerships 48,980 47,185
Criminal Investigations 30,645 29,522
Recourse 12,083 11,641
Total expenses 1,970,001 1,897,828
Sales of goods and services 18,270 18,270
Other 2,970 2,970
Revenues earned on behalf of government (4,810) (4,810)
Total revenues 16,430 16,430
Net cost of operations $ 1,953,571 $ 1,881,398

The accompanying notes form and intergral part of these financial statements.

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 Report on Plans and Priorities (RPP). Information on the Canada Border Services Agency’s (CBSA) authority and objectives is provided in Section I of its 2014-15 RPP.

The information in the estimated results for fiscal year 2013-14 is based on actual results as at October 31, 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 underlying the forecasts are as follows:

  • The CBSA’s activities will remain substantially the same as for the previous year;
  • Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience and the general historical pattern is expected to continue; and
  • 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 December 20, 2013.

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 will vary from the forecast information presented and these variations could be material.

In preparing this future-oriented statement of operations the CBSA 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:

  • The timing and amounts of acquisitions and disposals of tangible capital assets may affect gains/losses and amortization expense.
  • Implementation of new collective agreements.
  • Economic conditions may affect the amount of revenue earned and the collectability of accounts receivable.
  • Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the RPP is presented, the CBSA will not be updating the forecasts for any changes in financial resources 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 using the Government’s accounting policies that came into effect for the 2011-12 fiscal year which are 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

Expenses are recorded on an accrual basis. Expenses for the CBSA’s operations are recorded when goods are received or services are rendered, including services provided without charge for accommodation, employee contributions to health and dental insurance plans, legal services and worker’s compensation, all of which are recorded as expenses at their estimated cost. Vacation pay, compensatory leave and severance benefits are accrued and expenses are recorded as the benefits are earned by employees under their respective terms of employment.

Expenses include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable and advances, as well as inventory obsolescence.

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) Non-tax revenues

Non-tax revenues reported in this future-oriented statement of operations include revenues collected on behalf of the Government of Canada under the Immigration and Refugee Protection Act, the Agriculture and Agri-Food Administrative Monetary Penalties Act and other similar legislation.

Non-tax revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

Non-tax revenues that are non-respendable are not available to discharge the CBSA’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 as a reduction of the CBSA’s gross revenues.

4. Parliamentary Authorities

The CBSA is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the CBSA do not parallel financial reporting according to generally accepted accounting principles since 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 CBSA 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 thousands of dollars)
Estimated Results 2014 Planned Results 2015
Net cost of operations  $ 1,953,571  $ 1,881,398
Adjustments for items affecting net cost of operations but not affecting authorities:    
Amortization of tangible capital assets (84,179) (70,724)
Gain on disposal of tangible capital assets 2,232 2,034
Services provided without charge by other government departments (169,253) (173,053)
Increase in vacation pay and compensatory leave (2,200) (2,200)
Decrease in employee future benefits                  - 141,764
Bad debt expense (479) (479)
Refunds of previous years' expenditures 1,249 1,106
Total items affecting net cost of operations but not affecting authorities (252,630) (101,552)
Adjustments for items not affecting net cost of operations but affecting authorities:    
Acquisition of tangible capital assets 211,548 211,605
Proceeds from disposal of tangible capital assets (396) (270)
Increase in inventory 1,361  -
Decrease in prepaid expenses (77) -
Total items not affecting net cost of operations but affecting authorities 212,436 211,335
Requested authorities $ 1,913,377 $ 1,991,181

b) Authorities requested

(in thousands of dollars)
Estimated Results 2014 Planned Results 2015
Authorities requested    
Vote 10 – Operating expenditures $ 1,711,876 $ 1,602,678
Vote 15 – Capital expenditures 261,247 211,605
Statutory amounts 179,700 176,898
Total 2,152,823 1,991,181
Authorities available for future years (239,446)                    -
Requested authorities $ 1,913,377 $ 1,991,181


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