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Strategic Outcome Canadians derive sustainable social and economic benefits from the assessment, development and use of energy, forest and mineral resources, and have the knowledge to mitigate environmental impacts and respond effectively to natural and man-made hazards |
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($ millions) | Actual Spending 2007‑08 | |||
---|---|---|---|---|
Program Activities | Budgetary | Non-Budgetary | Total | Alignment to GoC Outcome Areas |
Earth Sciences* | 251.6 | 251.6 | Strong Economic Growth | |
Energy | 419.1 | 419.1 | A Clean and Healthy Environment | |
Sustainable Forest | 206.7 | 206.7 | Strong Economic Growth | |
Minerals and Metals | 75.7 | 75.7 | Strong Economic Growth | |
Sub-total | 953.1 | 953.1 | ||
Statutory Payment- Atlantic Offshore | ||||
Energy** | 2,388.0 | 2,388.0 | A Clean and Healthy Environment | |
Total NRCan | 3,341.1 | 3,341.1 |
* Includes The Earth Sciences – Geomatics Canada Revolving Fund.
** Actual spending includes: Nova Scotia Offhore Revenue Account $493.2 million; Newfoundland Offshore Petroleum Resource Revenue Fund $1.7 billion; and Newfoundland Fiscal Equalization Offset Payments $188.6 million. These expenditures were largely offset by oil and gas royalty revenues received during the year ($1.7 billion). Pursuant to the Atlantic Offshore Accords, NRCan receives the federal royalty revenues related to the offshore - which were greater than planned due to significant increases in oil and gas production - and subsequently makes payments to the provinces equivalent to the royalty revenues received. Refer to payge 72 for more information on revenues.
($ millions) | 2005–2006 Actual | 2006–2007 Actual | 2007–2008 | |||
---|---|---|---|---|---|---|
Main Estimates | Planned Spending 1 | Total Authorities | Actual Spending 1 | |||
Earth Sciences 2 | 224.7 | 238.6 | 233.3 | 233.8 | 265.7 | 251.6 |
Energy 3 | 572.4 | 491.8 | 543.2 | 543.3 | 543.1 | 419.1 |
Forest 3 | 158.7 | 178.1 | 262.8 | 268.3 | 262.2 | 206.7 |
Minerals and Metals 4 | 73.8 | 74.3 | 55.3 | 57.5 | 77.8 | 75.7 |
Sub-total | 1,029.6 | 982.8 | 1,094.6 | 1,102.9 | 1,148.8 | 953.1 |
Statutory Payments - Atlantic Offshore | 73.8 | 74.3 | 55.3 | 57.5 | 77.8 | 75.7 |
Energy 5 | 650.4 | 702.9 | 1,050.5 | 1,056.6 | 2,391.6 | 2,388.0 |
Total | 1,680.0 | 1,685.7 | 2,145.1 | 2,153.5 | 3,540.4 | 3,341.1 |
Less: Non respendable revenue | (564.9) | (468.3) | (498.7) | (1,041.6) | (1,894.6) | (1,894.6) |
Plus: Cost of services received without charge | 43.0 | 40.1 | 40.1 | 40.1 | 39.8 | 39.8 |
Total Departmental Spending | 1,158.1 | 1,257.5 | 1,686.5 | 1,152.0 | 1,685.6 | 1,486.3 |
FTEs | 4,565 | 4,379 | 4,456 | 4,289 | 4,289 | 4,320 |
1. The resources for the Corporate Management Program Activity are distributed across all other program activities.
2. Includes the Earth Sciences – Geomatics Canada Revolving Fund.
3. Actual spending was less than planned for the Federal Response to the Mountain Pine Beetle Infestation in British Columbia because funding in the amount of $43.6 million was transferred to Western Economic Diversification and to Transport Canada, thereby reducing planned expenditures within NRCan. Moreover, funding for the Forest Industry Long Term Competitiveness Initiative in the amount of $10.4 million was deferred for future year spending.
4. Actual spending was higher than anticipated in program management and support in the amount of $13.6 million which reflects a change in reporting of some corporate activities (i.e. shared services, communications and information technology). Funding received via the Supplementary Estimates for the Relocation and Renewal of the CANMET Laboratories of $2.2 million also contributed to higher than planned spending.
5. Actual spending includes: Nova Scotia Offhore Revenue Account $493.2 million; Newfoundland Offshore Petroleum Resource Revenue Fund $1.7 billion; and Newfoundland Fiscal Equalization Offset Payments $188.6 million. These expenditures were largely offset by oil and gas royalty revenues received during the year ($1.7 billion). Pursuant to the Atlantic Offshore Accords, NRCan receives the federal royalty revenues related to the offshore - which were greater than planned due to significant increases in oil and gas production - and subsequently makes payments to the provinces equivalent to the royalty revenues received. Refer to payge 72 for more information on revenues.
Vote or Statutory Item ($ millions) | Truncated Vote or Statutory Wording | 2007-2008 | |||
---|---|---|---|---|---|
Main Estimates | Planned Spending | Total Authorities | Actual Spending 1 | ||
1 | Operating expenditures | 709.3 | 712.2 | 753.8 | 674.4 |
5 | Capital expenditures | 2.7 | 2.7 | 4.4 | 4.2 |
10 | Grants and contributions | 328.1 | 333.6 | 320.3 | 211.4 |
(S) | Minister of Natural Resources — salary and motor car allowance | 0.1 | 0.1 | 0.1 | 0.1 |
(S) | Contributions to employee benefit plans | 54.4 | 54.4 | 57.9 | 57.9 |
(S) | In support of infrastructure costs directly or indirectly relating to the exploration, development, production or transportation of oil and gas in the offshore area of Nova Scotia | 1.9 | 1.9 | 2.4 | 0.6 |
(S) | Contribution to the Canada/Newfoundland Offshore Petroleum Board | 5.0 | 5.0 | 2.2 | 2.2 |
(S) | Contribution to the Canada/Nova Scotia Offshore Petroleum Board | 2.9 | 2.9 | 2.6 | 2.6 |
(S) | Payments to the Nova Scotia Offshore Revenue Account | 450.0 | 450.0 | 493.2 | 493.2 |
(S) | Payments to the Newfoundland Offshore Petroleum Resource Revenue Fund | 590.7 | 590.7 | 1,701.0 | 1,701.0 |
(S) | Newfoundland Fiscal Equalization Offset Payments | 0.0 | 0.0 | 188.6 | 188.6 |
(S) | Grant to the Canada Foundation for Sustainable Development Technology | 0.0 | 0.0 | 1.6 | 1.6 |
(S) | Spending of proceeds from the disposal of surplus Crown Assets | 0.0 | 0.0 | 0.7 | 0.3 |
(S) | Geomatics Canada Revolving Fund | 0.0 | 0.0 | 11.6 | 3.0 |
Total | 2,145.1 | 2,153.5 | 3,540.4 | 3,341.1 |
1. Actual spending includes the following statutory payments: Nova Scotia Offshore Revenue Account $493.2 million; Newfoundland Offshore Petroleum Resource Revenue Fund $1.7 billion; and Newfoundland Fiscal Equalization Offset Payments $188.6 million. These expenditures were largely offset by oil and gas royalty revenues received during the year ($1.7 billion). Pursuant to the Atlantic Offshore Accords, NRCan receives the federal royalty revenues related to the offshore - which were greater than planned due to significant increases in oil and gas production - and subsequently makes payments to the provinces equivalent to the royalty revenues received. Refer to payge 72 for more information on revenues. Actual program spending under Votes 1, 5 and 10 was $890 million in total compared to $1078.5 million in total authorities. $133.9 million of these lapsed funds were frozen and represent funding approved for realloation to other departments ($43.4 million to Western Economic diversification) or reprofiled for use in future years ($90.5 million).
To obtain information on tables 4 to 15, visit the Treasury Board Secretariat Web site at http://www.tbs-sct.gc.ca/dpr-rmr/st-ts-eng.asp.
The department has prepared financial statements in accordance with the Treasury Board Accounting Standard.
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2008 and all information contained in these statements rests with departmental management. These statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.
Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgments and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the department's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the department's Departmental Performance Report is consistent with these financial statements.
Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the department.
The mandate of the Audit and Evaluation Committee of Natural Resources Canada (NRCan), is to review and provide advice to the Deputy Minister on: NRCan Audit and Evaluation Polices; NRCan Annual Internal Audit and Evaluation Plans, Internal Audit, Evaluation and Special Review Reports, including management responses and commitments to implement remedial action; and the implementation in NRCan of the October 2005 Treasury Board Policy on Internal Audit.
The financial statements of the department have not been audited.
Cassie J. Doyle
Deputy Minister
Date signed
Ottawa Canada |
Richard S. Tobin
Senior Financial Officer
Date signed
Ottawa Canada |
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Expenses (Note 4) | ||
Energy | 2,964,841 | 1,273,151 |
Earth Sciences | 271,065 | 339,872 |
Forest | 211,343 | 218,918 |
Mineral and Metals | 87,529 | 118,442 |
Total expenses | 3,534,778 | 1,950,383 |
Revenues (Note 5) | ||
Energy | 2,215,238 | 465,050 |
Earth Sciences | 8,849 | 16,466 |
Mineral and Metals | 9,208 | 8,142 |
Forest | 2,541 | 2,493 |
Total revenues | 2,235,836 | 492,151 |
Net cost of operations | 1,298,942 | 1,458,232 |
The accompanying notes form an integral part of these financial statements.
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
ASSETS | ||
Financial assets | ||
Accounts receivable and advances (Note 6) | 333,969 | 14,985 |
Loans receivable (Note 7) | 90,573 | 95,555 |
Investment (Note 8) | 164,159 | 164,159 |
Total financial assets | 588,701 | 274,699 |
Non-financial assets | ||
Prepayments (Note 9) | 6,649 | 8,671 |
Inventories | 8,621 | 10,978 |
Tangible capital assets (Note 10) | 74,729 | 81,367 |
Total non-financial assets | 89,999 | 101,016 |
TOTAL | 678,700 | 375,715 |
LIABILITIES | ||
Accounts payable and accrued liabilities | 830,315 | 431,097 |
Vacation pay and compensatory leave | 24,620 | 25,818 |
Deferred revenue | 456 | |
Employee severance benefits (Note 11) | 63,991 | 64,858 |
Environmental liabilities (Note 12a) | 336,679 | 387,793 |
Other liabilities (Note 13) | 31,641 | 32,426 |
Total liabilities | 1,287,702 | 941,992 |
Equity of Canada | (609,002) | (566,277) |
TOTAL | 678,700 | 375,715 |
Contingent Liabilities (Note 12b)
Contingent Recoveries (Note 15)
Contractual Obligations (Note 16)
The accompanying notes form an integral part of these financial statements.
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Equity of Canada, beginning of year | (566,277) | (274,996) |
Net cost of operations | (1,298,942) | (1,458,232) |
Current year appropriations used (Note 3) | 3,341,056 | 1,685,732 |
Revenue not available for spending | (2,198,908) | (451,906) |
Change in net position in the Consolidated Revenue Fund (Note 3) | 74,263 | (106,931) |
Services received without charge from other government departments (Note 17) | 39,806 | 40,054 |
Equity of Canada, end of year | (609,002) | (566,277) |
The accompanying notes form an integral part of these financial statements.
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Operating activities | ||
Net cost of operations | 1,298,942 | 1,458,232 |
Non-cash items: | ||
Amortization of tangible capital assets | (15,037) | (15,465) |
Gain (loss) on disposal of tangible capital assets | 121 | (62) |
Services provided without charge | (39,806) | (40,054) |
Variations in Statement of financial position: | ||
Increase (decrease) in accounts receivable and advances | 318,984 | (51) |
Decrease in loans receivable and investments | (4,982) | (5,981) |
Decrease in prepayments | (2,022) | (3,808) |
Decrease in inventory | (2,357) | (2,174) |
Increase in liabilities | (345,710) | (273,433) |
Cash used by operating activities | 1,208,133 | 1,117,204 |
Capital investment activities | ||
Acquisitions of tangible capital assets | 8,751 | 9,995 |
Proceeds from disposal of tangible capital assets | (473) | (304) |
Cash used by capital investment activities | 8,278 | 9,691 |
Financing activities | ||
Net cash provided by Government of Canada | (1,216,411) | (1,126,895) |
The accompanying notes are an integral part of the financial statements.
The Department of Natural Resources Canada (NRCan) was created on June 25, 1993 by the merger of the Department of Energy, Mines and Resources and the Department of Forestry. This organizational change was effected by Order in Council, pending the passage of legislation which occurred in 1994. The Department's mandate is primarily based on the Department of Natural Resources Act, the Resources and Technical Surveys Act and the Forestry Act.
NRCan's mandate is to ensure the sustainable development and responsible use of Canada's natural resources. Through innovation and partnership, the department plays a pivotal role in helping shape the enormous contributions of the natural resource sectors and related industries to the high quality of life of Canadians. NRCan fulfills its mandate through four main programs:
This mandate is delivered by the Department's 4,289 full time employees located in offices across Canada.
The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.
Significant accounting policies are as follows:
Amortization of capital assets is done on a straight-line basis over the estimated useful life of the capital asset as follows:
Asset Class | Amortization period |
---|---|
Buildings | 15 to 40 years |
Machinery and equipment | 5 to 15 year |
Vehicles | 3 to 10 years |
The department receives most of its funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Department has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Net cost of operations | 1,298,942 | 1,458,232 |
Adjustments for items affecting net cost of operations but not affecting appropriations: | ||
Add (Less): | ||
Revenue not available for spending | 2,198,908 | 451,906 |
Adjustment for amounts to be charged later | (135,507) | - |
Allowance for environmental liabilities | 51,114 | (195,645) |
Adjustment for expenses related to claims | (44,701) | 220 |
Services provided without charge | (39,806) | (40,054) |
Amortization of tangible capital assets | (15,037) | (15,465) |
Refunds of prior years expenditures | 14,125 | 11,927 |
Amortization of unamortized discount loans | 8,219 | 8,219 |
Expenses related to provisions devolved to Departments | (5,000) | - |
Reductions from prepaid expenses | (3,478) | (5,225) |
Adjustments of prior year accounts payable | 2,684 | 4,130 |
Adjustments of previous years inventory | (2,356) | (2,174) |
Vacation pay and compensatory leave | 1,198 | 365 |
Employee severance benefits | 866 | 36 |
Payments to Department of Justice | - | (1,319) |
Other adjustments | 665 | (830) |
2,031,894 | 216,091 | |
Adjustments for items not affecting net cost of operations but affecting appropriations | ||
Add (Less): | ||
Receivables, Advances, and Prepayments | 1,469 | 1,414 |
Acquisitions of tangible capital assets | 8,751 | 9,995 |
10,220 | 11,409 | |
Current year appropriations used | 3,341,056 | 1,685,732 |
In thousands of dollars | ||
Appropriations Provided | ||
2008 | 2007 | |
---|---|---|
Vote 1 – Operating expenditures | 753,823 | 662,547 |
Vote 5 – Capital expenditures | 4,359 | 3,711 |
Vote 10 – Transfer payments | 320,282 | 289,501 |
Statutory amounts | 2,461,958 | 782,340 |
Less: | ||
Appropriations available for future years | (10,908) | (14,305) |
Lapsed appropriations – Operating | (79,465) | (21,786) |
Lapsed appropriations – Capital | (138) | (562) |
Lapsed appropriations – Transfer payments | (108,855) | (15,714) |
Current year appropriations used | 3,341,056 | 1,685,732 |
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Net cash provided by Government | 1,216,411 | 1,126,895 |
Revenue not available for spending | 2,198,908 | 451,906 |
Change in net position in the Consolidated Revenue Fund | ||
Variation in accounts receivable and advances | (318,984) | 51 |
Variation in accounts payable and accrued liabilities | 399,218 | 72,732 |
Other adjustments | (154,497) | 34,148 |
(74,263) | 106,931 | |
Current year appropriations used | 3,341,056 | 1,685,732 |
The following table presents details of expenses by category:
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Transfer payments | ||
Other level of government | 2,549,525 | 732,945 |
Industry | 85,407 | 135,060 |
Non-profit organizations | 80,795 | 61,141 |
Individuals | 14,469 | 46,259 |
Other countries and international organizations | 2,115 | 1,293 |
Total transfer payments | 2,732,311 | 976,698 |
Operating expenses | ||
Salary and employee benefits | 427,204 | 432,901 |
Professional and special services | 234,172 | 198,765 |
Allowance for environmental liabilities | (51,114) | 195,645 |
Transportation and communication | 37,590 | 35,269 |
Rentals | 24,956 | 22,536 |
Utilities, materials and supplies | 21,242 | 23,817 |
Acquisition of machine and equipment | 20,699 | 21,437 |
Amortization | 15,037 | 15,465 |
Information | 8,412 | 8,476 |
Repairs and maintenance | 7,074 | 7,828 |
Environmental studies research | 2,465 | 2,538 |
Acquisition of land, building and work | 2,013 | 1,092 |
Other | 52,717 | 7,916 |
Total operating expenses | 802,467 | 973,685 |
Total Expenses | 3,534,778 | 1,950,383 |
The following table presents details of revenues by category:
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Sales of goods and services – external parties: | ||
Rights and privileges (1) | 2,055,652 | 396,052 |
Services of non-regulatory nature | 20,931 | 22,120 |
Sales of goods and information products | 4,074 | 5,646 |
Services of regulatory nature | 1,295 | 1,312 |
Lease and use of public property | 480 | 324 |
Other fees and charges | 133 | 182 |
Fines | 92,911 | 7,870 |
Interest | 49,669 | 47,764 |
Amortization of discount loans | 8,219 | 8,219 |
Environmental Research Fund | 2,168 | 2,468 |
Gains on disposal of tangible capital assets | 102 | 44 |
Return on investment – Other enterprise crown corporation | 36 | 76 |
Other | 166 | 74 |
Total | 2,235,836 | 492,151 |
The following presents details of accounts receivable and advances:
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Receivables from external parties (1) | 330,847 | 6,832 |
Less: Allowance for doubtful accounts on external receivables | (1,253) | (1,300) |
329,594 | 5,532 | |
Receivables from other federal government departments and agencies | 4,213 | 9,240 |
Employee advances | 162 | 213 |
Total | 333,969 | 14,985 |
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Unconditional Repayable Contribution to Hibernia Interest Assistance | 39,978 | 39,978 |
Unamortized discount | (1,623) | (3,247) |
Allowance for uncollectibility | - | (999) |
Net unconditional repayable contribution | 38,355 | 35,732 |
Loan to Nordion International Inc. | 70,000 | 74,000 |
Unamortized discounts | (26,667) | (30,000) |
Loan balance – Nordion | 43,333 | 44,000 |
Loan to Hibernia Development Project | 9,200 | 18,400 |
Unamortized discounts | (815) | (4,077) |
Loan balance – Hibernia | 8,385 | 14,323 |
Loan to Atomic Energy of Canada Limited | 500 | 1,500 |
Total | 90,573 | 95,555 |
Unconditional repayable contribution; interest free; first instalments paid on March 31, 2001. Repayment starts eight years from the first annual instalment; the first repayment date is March 1, 2009. Balance outstanding as of March 31, 2008 is $39,978,000. The estimated present value is $38,355,000 as at March 31, 2008.
Interest Free Loan Agreement; to be repaid over 30 semi-annual payments commencing October 1, 2000; fully secured by a financial instrument in Canada's name which guarantees that the loan will be repaid. Balance remaining as of March 31, 2008 is $70,000,000. Due to the concessionary terms of this loan, the estimated present value is $43,333,000 as at March 31, 2008.
Interest Free Loan Agreements; repayment in 10 consecutive equal annual instalments commencing June 30, 1999. Currently outstanding is Murphy Atlantic Offshore Oil Co. Ltd. $5,200,000 (estimated present value $4,739,000) and Mobile Canada Hibernia Co. Ltd $4,000,000 (estimated present value $3,646,000).
Interest bearing loan at an average floating rate of 4.368% (2007-2008); maturing September 2008. NRCan invoices AECL twice per year (May & November). As of March 31, 2008, the balance for Heavy Water Inventory loan amounted to $500,000.
NRCan has purchased common shares of Atomic Energy of Canada Limited, a Crown Corporation, for a total value of $164,159,000.
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Prepaid expenses | 4,594 | 2,850 |
Prepaid transfer payments | 2,055 | 5,821 |
Total | 6,649 | 8,671 |
(in thousands of dollars)
Cost | Accumulated amortization | 2008 | 2007 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Capital asset class | Opening balance | Acquisitions | Disposals and write-offs | Closing balance | Opening balance | Amortization | Disposals and write-offs | Closing balance | Net book value | Net book value |
Land | 7,905 | 10 | - | 7,915 | - | - | - | - | 7,915 | 7,905 |
Buildings | 141,782 | 45 | 7 | 141,820 | 108,503 | 5,230 | 7 | 113,726 | 28,094 | 33,279 |
Machinery and equipment | 221,723 | 7,228 | 4,690 | 224,261 | 185,905 | 8,785 | 4,657 | 190,033 | 34,228 | 35,818 |
Vehicles | 12,365 | 1,468 | 1,525 | 12,308 | 8,000 | 1,022 | 1,206 | 7,816 | 4,492 | 4,365 |
Total | 383,775 | 8,751 | 6,222 | 386,304 | 302,408 | 15,037 | 5,870 | 311,575 | 74,729 | 81,367 |
Amortization expense for the year ended March 31, 2008 is $15,037 (2007 – $15,465).
(a) Pension benefits: NRCan employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.
Both the employees and the department contribute to the cost of the plan. The 2007-08 expense amounts to $58,300,000 ($57,600,000 in 2006-07), which represents approximately 2.1 times (2.2 in 2006-07) the contributions by employees.
The department's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
(b) Severance benefits: The department provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Accrued benefit obligation, beginning of year | 64,858 | 64,894 |
Expense for the year | (1,001) | (30) |
Benefits paid during the year | 134 | (6) |
Accrued benefit obligation, end of year | 63,991 | 64,858 |
Liabilities are accrued to record the estimated costs related to the management and remediation of contaminated sites where the department is obligated or likely to be obligated to incur such costs. The department has identified approximately 9 sites (11 sites in 2007) where such action is possible and for which a liability of $336,700,000 ($387,800,000 in 2007) has been recorded. NRCan's ongoing efforts to assess contaminated sites may result in additional environmental liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. These liabilities will be accrued by the department in the year in which they become known.
Claims have been made against the department in the normal course of operations. Legal proceedings for claims totaling approximately $685,700,000 ($720,600,000 in 2007) were still pending at March 31, 2008. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the financial statements.
In thousands of dollars | ||||
April 1, 2007 | Receipts and other credits | Payments and other charges | March 31, 2008 | |
---|---|---|---|---|
Guarantee deposits – Oil and gas | 14,061 | 721,160 | (721,675) | 13,546 |
Shared costs projects | 11,164 | 16,065 | (15,168) | 12,061 |
Market development and incentive payments – Alberta | 4,791 | 4,791 | (4,891) | 4,691 |
Shared costs agreements – Research | 2,410 | 5,775 | (6,842) | 1,343 |
Total | 32,426 | 747,791 | (748,576) | 31,641 |
Guarantee deposits – Oil and gas: This account was established to record securities in the form of cash, promissory notes, and bonds which are required to be issued to, and held by the Government of Canada pursuant to an Exploration License in accordance with section 24 of the Canada Petroleum Resources Act. These securities are a performance guarantee that the agreed exploration will be performed in the manner and time frame specified. Interest is not paid on these deposits.
Shared cost projects – This account was established to facilitate the retention and disbursement of moneys received from private organizations and other governments for cost-sharing scientific projects.
Market development and incentive payments – Alberta: This account records money received from the Government of Alberta, to encourage the expansion of natural gas market in Alberta and provinces to the East, in accordance with an agreement between the Government of Canada and the Government of Alberta dated September 1, 1981 and pursuant to section 39 of the Energy Administration Act. The original term of the agreement was from November 1, 1981 to January 31, 1987. As a result of the Western Accord of March 25, 1985, payments from the Government of Alberta terminated as at April 30, 1986, however, payments are being made from the account for selected programs which encourage the use of natural gas for vehicles.
Shared cost agreements – Research: This account was established to facilitate the retention and disbursement of moneys received from private industries and other governments for joint projects or shared-cost research agreements.
NRCan includes in its revenues and expenses the transactions of certain consolidated accounts established for specified purposes. Legislation required that the revenues of these specified purpose accounts to be earmarked and that related payments and expenses be charged against such revenues. The transactions do not represent liabilities to third parties but are internally restricted for specified purposes. NRCan has one such account entitled Environmental Research Fund. This account was established pursuant to subsection 76(1) of the Canada Petroleum Resources Act. The purpose of the fund is to finance environmental and social studies pertaining to the manner in which, and the terms and conditions under which, exploration development and production activities on frontier land, authorized under this Act or any other Act of Parliament, should be conducted.
In thousands of dollars | ||
2008 | 2007 | |
---|---|---|
Restricted – Environmental Studies Research Fund | ||
Opening balance | 2,482 | 2,552 |
Revenues | 2,168 | 2,468 |
Expenses | (2,465) | (2,538) |
Closing balance | 2,185 | 2,482 |
Unrestricted equity | (611,187) | (568,759) |
Total equity of Canada | (609,002) | (566,277) |
NRCan issues conditionally repayable contributions that become repayable if conditions specified in the contribution agreement come into effect.
Lloydminster Bi-Provincial Upgrader – Canada sold its interests in the Lloydminster Bi-Provincial Upgrader to Husky Oil in 1995. The terms of sale included an upside interest provision whereby Canada would be eligible to receive additional payments for a period of up to 20 years if the differential between light and heavy crude oil reached a certain threshold. As a result of the increase in oil prices since the date of sale, the upside interest provision was triggered and eligible payments to Canada have increased. Canada's eligibility for upside interest payments ends in 2015.
Vancouver Island Pipeline Contribution – Canada provided $50 million in support of the construction of Vancouver Island Pipeline in the early 1990's. This support was provided in the form of a repayable contribution. Repayment was contingent upon the proponent meeting certain financial conditions. Full repayment is expected to be received by 2014.
Other contingent recoveries relate to agreements entered into with proponents for early stage research and development (R&D) activities. Recoveries are contingent upon the successful commercialization of products generated by the R&D activities.
The department has estimated the contingent recoverable amounts as $130,700,000. Contingent recoveries are not recorded in the financial statements.
The nature of the department's activities can result in some large mutli-year contracts and obligations whereby the department will be obligated to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:
(in thousands of dollars) | 2009 | 2010 | 2011 | 2012 | 2013 and thereafter | TOTAL |
---|---|---|---|---|---|---|
Transfer Payments | 84,600 | 99,000 | 101,400 | 97,500 | 358,900 | 741,400 |
The department is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The department enters into transactions with these entities in the normal Course of business and on normal trade terms. Also, during the year, the department received services which were obtained without charge from other Government departments as presented in part (a).
(a) Services provided without charge:
During the year the department received without charge from other departments, accommodations, legal fees and the employer's contribution to the health and dental insurance plans. These services received without charge are as follows:
Services provided without charge | Amount (in thousands of dollars) |
|
---|---|---|
2008 | 2007 | |
Accommodation provided by Public Works and Government Services Canada | 14,215 | 10,909 |
Contributions covering employer's share of employees' insurance premiums and costs paid by Treasury Board Secretariat | 24,112 | 27,455 |
Worker's compensation cost provided by Human Resources Canada | 248 | 252 |
Legal services provided by Department of Justice | 1,231 | 1,438 |
Total | 39,806 | 40,054 |
The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General, are not included as an expense in the department's Statement of Operations.
(b) Payables outstanding at year-end with related parties:
Payables outstanding at year-end with related parties: | Amount (in thousands of dollars) |
|
---|---|---|
2008 | 2007 | |
Accounts payable to other government departments and agencies | 8,885 | 10,766 |
Comparative figures have been reclassified to conform to the current year's presentation.