Infrastructure Canada Future-Oriented Statement of Operations (unaudited)
for the year ending March 31
(in thousands of dollars)

N/A	Forecast results 2019-20	Planned results 2020-21
Expenses
Public Infrastructure	6,151,998	7,815,651
Internal Services	67,036	64,082
Total expenses	6,219,034	7,879,733
Revenues
Miscellaneous revenues	196	111
Revenues earned on behalf of government	(196)	(111)
Total revenues	-	-
Net cost of operations before government funding and transfers	6,219,034	7,879,733

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

1. Authority and Objectives

The Office of Infrastructure of Canada (INFC) was created in 2002 as a separate organization under Schedule I.1 of the Financial Administration Act. The applied name for this organization is Infrastructure Canada. INFC is funded through annual and statutory appropriations received from the Parliament of Canada and is not taxable under the provisions of the Income Tax Act. As per the Financial Administration Act, the Minister of Infrastructure and Communities is accountable and responsible to Parliament for INFC.

Infrastructure Canada works closely with all orders of government and other partners to enable investments in social, green, public transit and other core public infrastructure, as well as trade and transportation infrastructure.

Starting in fiscal year 2018-19, INFC is reporting on its mandate under one core responsibility, as well as internal services, in support of its activities as described below.

Public Infrastructure

INFC's key business lines and initiatives are grouped in the following Program Inventory:

• Investing in Canada Phase 1 – Funding Allocations for Provinces and Territories;
• Investing in Canada Phase 1 – Funding for Federation of Canadian Municipalities;
• Investing in Canada Infrastructure Program;
• Gas Tax Fund – Permanent Funding for Municipalities;
• New Building Canada Fund – National Infrastructure Component;
• New Building Canada Fund – Funding Allocations for Provinces and Territories;
• Historical Programs;
• Samuel De Champlain Bridge Corridor Project;
• Gordie Howe International Bridge Project;
• Toronto Waterfront Revitalization Initiative;
• Smart Cities Challenge;
• Disaster Mitigation and Adaptation Fund; and
• Research and Knowledge Initiative.

Internal Services

Internal Services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct services that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Management Services; Materiel Management Services; and Acquisition Management Services.

2. 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 Department Plan.

The information in the forecast results for fiscal year 2019-20 is based on actual results as at November 30, 2019, and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2020-21.

The main assumptions underlying the forecasts are as follows:

• Forecast results for 2019-20 are based on anticipated cash flow requirements of contribution program recipients;
• It is expected that the last milestone payment of up to $500 million for the Samuel De Champlain Corridor project will be made upon substantial completion of the full corridor, which is anticipated before year-end;
• Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical trends.

These assumptions are adopted as at January 14, 2020.

3. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2019-20 and for 2020-21, 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, INFC 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 the amount of acquisitions and disposals of property, plant and equipment which may affect gains, losses and amortization expense;
• the implementation of new collective agreements;
• the timing at which recipients submit claims for reimbursement under INFC’s various transfer payment programs;
• potential changes to how transfer payment programs are accounted for;
• further changes to contributions (and operating budgets) through approval of additional new infrastructure initiatives or technical adjustments later in the year;
• any change to the progress of the Samuel De Champlain Bridge Corridor project; and
• ongoing changes to the budgetary cycle and estimates process.

After the Departmental Plan is tabled in Parliament, INFC will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Result Report.

4. 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 the 2019-20 fiscal year, 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:

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 including expenses related to personnel, professional and special services, repair and maintenance, utilities, materials and supplies, as well as amortization of tangible capital assets.  Provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debts, loans, investments and advances and inventory obsolescence, as well as utilization of inventories and prepaid expenses, and other are also included in other expenses.

Revenues

Other revenues are recognized in the period the event giving rise to the revenues occurred.

Revenues that are non-respendable are not available to discharge the Department’s liabilities. Although the Deputy Head 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 INFC’s gross revenues.

5. Parliamentary Authorities

INFC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to INFC differs from financial reporting according to generally accepted accounting principles because authorities are based mainly 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, INFC 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)

N/A	Forecast results 2019-20	Planned results 2020-21
Net cost of operations before government funding and transfers	6,219,034	7,879,733
Adjustment for items affecting net cost of operations but not affecting authorities:
Decrease of year-end accrual pending Budget Implementation Act	2,230,596	-
Amortization of tangible capital assets	(17,161)	(46,565)
Services provided without charge by other government departments	(8,601)	(8,843)
Increase in vacation pay and compensatory leave	(2,637)	-
Increase in employee future benefits	(421)	(19)
Decrease in contingent liabilities	14,700	-
Refunds of previous years' expenditures	8,672	3,662
Total items affecting net cost of operations but not affecting authorities	2,225,148	(51,765)
Adjustment for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets (Note 6)	1,243,915	115,990
Total items not affecting net cost of operations but affecting authorities	1,243,915	115,990
Requested authorities	9,688,097	7,943,958

b) Authorities requested
(in thousands of dollars)

N/A	Forecast Results 2019-20	Planned Results 2020-21
Authorities requested:
Vote 1: Operating expenditures	117,022	140,525
Vote 5: Capital expenditures	1,243,915	115,990
Vote 10: Contributions	3,917,977	5,509,281
Statutory amounts
Employee Benefit Plan	8,181	7,757
Gas Tax Fund	4,340,912	2,170,316
Municipal Asset Management Program	60,000	-
Minister's Salary and Motor Car Allowance	90	89
Total authorities requested	9,688,097	7,943,958

6. Tangible Capital Assets

INFC has the Samuel De Champlain Bridge Corridor project, which is a Public-Private Partnership arrangement for a new bridge crossing the St. Lawrence, as well as a new l’Île des Soeurs Bridge, and reconstruction and widening of the federal portion of Autoroute 15 in Montreal, Quebec.

The Samuel De Champlain Bridge Corridor project involves the acquisition of tangible capital assets that are not reflected in the Statement of Operations. The value of construction in progress is recognized as a construction in progress asset, as well as a corresponding construction in progress liability.