Future-Oriented Statement of Operations for the years ending March 31, 2015 and March 31, 2016

Table of Contents

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

This table presents Library and Archive Canada's future-oriented statement of operations for the years ending March 31, 2015 and March 31, 2016. Displayed are the expenses by program, revenues by type, and net cost of operations. Amounts are displayed in thousands of dollars and include the totals for 2014-15 and 2015-16.

Estimated Results
2014–15

Planned Results
2015–16

Expenses

     
 

Development of regulatory instruments and recordkeeping tools

 

 $       4,518

 

 $       3,529

 

Collaboration in the management of government records

 

19,936

 

16,788

 

Documentation of Canadian society

 

17,695

 

15,529

 

Stewardship of documentary heritage

 

48,209

 

38,972

 

Access to documentary heritage

 

38,341

 

37,266

 

Internal services

 

24,642

 

29,212

Total expenses

 

153,341

 

141,296

           

Revenues

       
 

Sales of goods and information products

 

210

 

200

 

Gain on disposal of non-capital assets

 

20

 

20

 

Miscellaneous revenues

 

2,209

 

2,087

 

Revenues earned on behalf of Government

 

(56)

 

(76)

Total revenues

 

2,383

 

2,231

           

Net cost of operations

 

 $   150,958

 

 $   139,065


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


___________________________________
  ___________________________________ 

Guy Berthiaume
Librarian and Archivist of Canada
Gatineau, QC
February 19th, 2015

 

Hervé Déry
Chief Financial Officer
Gatineau, QC
February 19th, 2015

1. Mandate and Objectives

Library and Archives Canada (LAC) is a government institution and was established on May 21, 2004, as a result of the amalgamation of the former National Library of Canada and National Archives of Canada. LAC's role was confirmed in the 2004 Library and Archives of Canada Act, which assigns discretionary power to the Librarian and Archivist of Canada in attaining LAC's objects. Pursuant to the Act, no government or ministerial institution may destroy records under its control prior to receiving consent from the Librarian and Archivist of Canada; records considered to be of historical or archival importance to the Librarian and Archivist of Canada shall be transferred to his or her care and control.

LAC is considered a Schedule I.1 organization within the Financial Administration Act and reports to Parliament through the Minister of Canadian Heritage; its mandate is as follows:

  • to preserve the documentary heritage of Canada for the benefit of current and future generations;
  • to serve as a source of enduring knowledge accessible to all, contributing to the cultural, social and economic advancement of Canada as a free and democratic society;
  • to facilitate in Canada co-operation among communities involved in the acquisition, preservation and diffusion of knowledge; and
  • to serve as the continuing memory of the Government of Canada and its institutions.

2. Methodology and Significant Assumptions

The future-oriented statement of operations has been prepared on the basis of government priorities and the plans of Library and Archives Canada as described in the Report on Plans and Priorities.

The information in the estimated results for fiscal year 2014–15 is based on actual results as at November 30, 2014, and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2015–16 fiscal year.

The main assumptions underlying the forecasts are as follows:

  • (a) Main activities will remain substantially the same as for the previous year;
  • (b) Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.

These assumptions were adopted in January 2015.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2014–15 and for 2015–16, 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, LAC 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:

  • (a) The timing and amount of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
  • (b) Implementation of new collective agreements.
  • (c) Economic conditions may affect both the amount of revenue earned and the collectability of accounts receivables.
  • (d) Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, LAC 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.

4. Summary of Significant Accounting Policies

The future-oriented statement of operations has been prepared using government's accounting policies that came into effect for the 2014–15 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) Parliamentary authorities

LAC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to LAC do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.

(b) Expenses

Expenses are recorded on an accrual basis. Expenses for government 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, 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 recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement or, in the case of transactions that do not form part of an existing program, when the Government announces a decision to make a 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 and 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. 

(c) Revenues

Revenues are recorded on an accrual basis: 

  1. i) Sales of goods and information products are revenues from regulatory fees and are recognized in the accounts based on the services provided in the year.
  2. ii) Funds received from external parties for specified purposes are recorded upon receipt asred revenues. These revenues are recognized in the period in which the related expenses are incurred.
  3. iii) Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
  4. iv) Revenues that are non-respendable are not available to discharge LAC'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 entity's gross revenues.

(d) Collections

Items purchased for the LAC's collection are recorded as an expense in the year of acquisition.

5. Parliamentary Authorities

LAC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the institution 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, LAC has a 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: 

11 This table reconciles Library and Archive Canada's forecasted net cost of operations to current year forecasted authorities used for the years ended March 31, 2015 and March 31, 2016. Amounts are displayed in thousands of dollars and include the totals for 2014-15 and 2015-16.

(a) Reconciliation of net cost of operations to forecast authorities used:

Estimated
Results
2014–15

 

Planned
Results
2015–16

 
     

(in thousands of dollars)

 

Net cost of operations

 $       150,958

 

$     139,065

 

Adjustments for items affecting net cost of operations but not affecting authorities:

       
 

Services provided without charge by other government departments

 (47,816)

 

 (43,613)

 
 

Amortization of tangible capital assets

 (3,492)

 

 (3,627)

 
 

Decrease (increase) in vacation pay and compensatory leave

(25)

 

150

 
 

Decrease in employee future benefits

593

 

524

 
 

Decrease (increase) in obligation for termination benefits

55

 

-

 
 

Refunds of previous years' expenditures

59

 

70

 
 

Revenue not available for spending

386

 

252

 
 

Total items affecting net cost of operations but not affecting authorities

 (50,240)

 

(46,244)

 

Adjustments for items not affecting net cost of operations but affecting authorities:

 
 

Transition payment—Salary payment in arrears

2,562

 

-

 
 

Acquisitions of tangible capital assets

3,382

 

1,360

 
 

Total items not affecting net cost of operations but affecting authorities

5,944

 

1,360

 

Forecast authorities used

 $       106,662

 

$     94,181

 


The $94.2 million in forecast authorities used for 2015–16 differs from the $93 million in planned authorities presented in the Report on Plans and Priorities 2015–16. The difference is explained by the fact that the total authorities provided in the future-oriented statement of operations include a forecast of $1.2 million for eligible paylist expenditures.

This table presents Library and Archive Canada's details of the current year forecasted authorities used for the years ended March 31, 2015 and March 31, 2016. Amounts are displayed in thousands of dollars and include the totals for 2014-15 and 2015-16.

(b) Forecast authorities available and used

Estimated
Results
2014–15

 

Planned
Results
2015–16

 

Authorities requested

(in thousands of dollars)

 

Vote 1—Operating expenditures

 $         96,390

 

$       84,353

 

Statutory amounts

11,902

 

9,828

 

Forecast authorities available

108,292

 

94,181

 

Forecast estimated lapse—Frozen allotments

 (1,630)

 

-

 

Forecast authorities used

 $       106,662

 

$     94,181

 


The $94.2 million in forecast authorities used for 2015–16 differs from the $93 million in planned authorities presented in the Report on Plans and Priorities 2015–16. The difference is explained by the fact that the total authorities provided in the future-oriented statement of operations include a forecast of $1.2 million for eligible paylist expenditures.

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