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, 2016
(in thousands of dollars)

  Estimated Results 2015 Planned Results 2016
Admissibility Determination 965,610 1,006,690
Internal Services 449,138 359,131
Immigration Enforcement 177,345 159,500
Risk Assessment 172,834 171,874
Revenue and Trade Management 92,411 110,708
Secure and Trusted Partnerships 47,450 48,322
Criminal Investigations 36,281 26,644
Recourse 13,442 11,241
Total expenses 1,954,511 1,894,110
Sales of goods and services 18,310 20,310
Other 2,861 2,861
Revenues earned on behalf of government (4,741) (4,741)
Total revenues 16,430 18,430
Net cost of operations 1,938,081 1,875,680

The accompanying notes form an integral part of these financial statements.

1. Methodology and Significant Assumptions

The future-oriented statement of operations (FOSO) 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 2015-2016 RPP.

The information in the estimated results for fiscal year 2014-2015 is based on actual results as at October 31, 2014 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2015-2016 fiscal year.

The main assumptions underlying the forecasts are as follows:

  • The CBSA's activities will remain substantially the same as in the previous year.
  • 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.
  • Estimated year-end information for 2014-2015 is used as the opening position for the 2015-2016 planned results.

These assumptions are adopted as at January 6, 2015.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2014-2015 and for 2015-2016, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing this FOSO 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 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 FOSO and the historical statement of operations include the following:

  • The timing and amount 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 FOSO has been prepared using the Government's accounting policies that came into effect for the 2011-2012 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 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 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 FOSO include regulatory fees collected on behalf of the Government of Canada (GoC) under legislation such as the Immigration and Refugee Protection Act and the Canadian Food Inspection Agency Act.

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 president of the CBSA 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 GoC through parliamentary authorities. Financial reporting of authorities provided to the CBSA do not parallel financial reporting according to generally accepted accounting principles because authorities are primarily based on cash flow requirements. Items recognized in the FOSO 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
Planned Results
Net cost of operations 1,938,081 1,875,680
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (60,613) (63,433)
Loss on disposal of tangible capital assets (1,240) (40)
Services provided without charge by other government departments (169,583) (171,953)
Increase in vacation pay and compensatory leave (3,249) (3,249)
Decrease in employee future benefits 163,278 -
Bad debt expense (507) (507)
Refunds of previous years' expenditures 1,300 1,300
Total items affecting net cost of operations but not affecting authorities (70,614) (237,882)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 128,959 253,904
Proceeds from disposal of tangible capital assets (304) (304)
Decrease in inventory (500) -
Decrease in prepaid expenses (177) -
Total items not affecting net cost of operations but affecting authorities 127,978 253,600
Requested authorities 1,995,445 1,891,398

b) Authorities requested
(in thousands of dollars)

  Estimated Results 2015 Planned Results 2016
Authorities requested
Vote 1 – Operating expenditures 1,709,170 1,454,538
Vote 5 – Capital expenditures 202,659 253,904
Statutory amounts 182,021 182,956
Total 2,093,850 1,891,398
Authorities available for future years (98,405) -
Requested authorities 1,995,445 1,891,398
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