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RPP – 2011-2012 – Future-oriented Financial Information

Statement of Management Responsibility

for the year ended March 31, 2012

Responsibility for the compilation, content, and presentation of the accompanying future-oriented financial information for the year ended March 31, 2012, rests with the management of the National Round Table on the Environment and the Economy (NRTEE). The future-oriented financial information has been prepared by management in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector. The future-oriented financial information is submitted for Part III of the Estimates (Reports on Plans and Priorities) and will be used in the NRTEE’s Departmental Performance Report to compare with actual results.

Management is responsible for the integrity and objectivity of the future-oriented financial information and for the process of developing assumptions. Assumptions and estimates are based on information available and known to management at the time of development, reflect current business and economic conditions, and assume the continuation of current governmental priorities and consistency in the departmental mandate and strategic objectives. Much of the future-oriented financial information is based on these assumptions, best estimates, and judgment and gives due consideration to materiality. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. However, as with all such assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends. The actual results achieved will vary from the forecast information presented, and this variation could be material.

National Round Table on the Environment and the Economy (NRTEE)

Future-oriented Statement of Operations (unaudited)

For the year ended March 31

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

National Round Table on the Environment and the Economy (NRTEE)

Notes to the Future-oriented Financial Information (unaudited)

For the year ended March 31, 2012

1. Authority and Objectives

The National Round Table on the Environment and the Economy (NRTEE) was established in 1994 under the National Round Table on the Environment and the Economy Act and is a departmental corporation named in Schedule II of the Financial Administration Act. The NRTEE fulfils its objective of promoting sustainable development, and the integration of the environment and economy in decision making in all sectors, by conducting studies, organizing stakeholder “dialogues” on specific issues and economic sectors, providing advice, carrying out educational and communication activities, and by acting as a catalyst for change. Its operating expenses are funded mainly by a budgetary lapsing authority and, to a lesser extent, from cost recovery and cost sharing for specific activities. The NRTEE is not subject to the provisions of the Income Tax Act.

2. Underlying Assumptions

These future-oriented statements have been prepared:

• As at February, 2011;
• On the basis of government policies, government priorities, and the external environment at the time the future-oriented financial information was finalized;
• According to the requirements of Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector;
• On the basis that the resources provided will enable the NRTEE to deliver the expected results specified in its Report on Plans and Priorities; and
• On the basis of historical trend costs.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for 2011–12, actual results achieved are likely to vary from the forecast information presented, and this variation could be material.

Once the Report on Plans and Priorities is presented, the NRTEE will not be updating the forecasts for any changes to appropriations or financial information made in ensuing Supplementary Estimates. Variances will be explained in the NRTEE’s Departmental Performance Report.

4. Summary of Significant Accounting Policies

The future-oriented Statement of Operations has been prepared by management in accordance with Treasury Board policies, which are consistent with Canadian generally accepted accounting principles for the public sector.

Significant accounting policies are as follows:

a)      Parliamentary Appropriations

The NRTEE is financed mainly by the Government of Canada through Parliamentary appropriations. Appropriations provided to the NRTEE do not parallel financial reporting according to Canadian generally accepted accounting policies for the public sector, as they are based in a large part on cash flow requirements. Consequently, items recognized in the Statement of Operations and the Statement of Financial Position are not necessarily the same as those provided through appropriations from Parliament. Note 5 provides a high-level reconciliation between the two bases of reporting.

b)      Due from Consolidated Revenue Fund

The NRTEE operates within the Consolidated Revenue Fund (CRF). The CRF is administered by the Receiver General for Canada. All cash received by the NRTEE is deposited to the CRF and all cash disbursements made by the NRTEE are paid from the CRF. Due from the CRF represents the amount of cash that the NRTEE is entitled to draw from the Consolidated Revenue Fund, without further Parliamentary appropriations, in order to discharge its liabilities.

c) Forecasted revenues

Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

d) Forecasted expenses

Expenses are recorded on the accrual basis:

• Employees severance benefits are accrued as earned and are calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole. Employee severance benefits on cessation of employment represent obligations of the NRTEE that are normally funded through future year appropriations.
• Contributions to the Public Service Pension Plan are charged to expenses in the year incurred and represent the total NRTEE obligation to the Plan. Current legislation does not require the NRTEE to make contributions for any actuarial deficiencies of the Public Service Pension Plan.
• Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
• Services provided without charge by other government departments are recorded as expenses at their estimated costs.

e) Tangible Capital Assets

Tangible capital assets and leasehold improvements with an acquisition cost of $2,000 or more are capitalized at cost and amortized over their estimated useful lives on a straight-line basis. The estimated useful life of each tangible capital asset class is as follows:

f) Measurement Uncertainty

The preparation of the future-oriented financial information requires management to make estimates and assumptions that affect the reported amounts of all the assets, liabilities, revenues and expenses. Assumptions are based upon information available and known to management at the time of development, reflect current business and economic conditions and assume a continuation of current governmental priorities and consistency in organizational mandate and strategic objectives. At the time of preparation of these statements, management believes that estimates and assumptions to be reasonable. Nonetheless, as with all such estimates and assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.

5.   Parliamentary Appropriations

The NRTEE receives the majority of its funding through Parliamentary appropriations, which are based primarily on cash flow requirements. Items recognized in the Statement of Operations in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the NRTEE has different net results of operations for the year on a government funding basis than on an accrual basis of accounting. These differences are reconciled below.

6. Forecasted Expenses

7. Related Party Transactions

The NRTEE is related in terms of common ownership to all Government of Canada entities. The NRTEE enters into transactions with these entities in the normal course of business and on normal trade terms. These services without charge have been recognized in the NRTEE’s Future-oriented Statement of Operations as follows:

8. Employee Future Benefits

i) Severance Benefit

Employees are entitled to severance benefits under conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information concerning the estimated severance benefits is as follows:

ii) Pension Benefits

The NRTEE’s eligible employees participate in the Public Service Pension Plan which is sponsored and administered by the Government of the Canada. Pension benefits accrue at a rate of 2 percent per year of pensionable service to a maximum of 35 years.

The NRTEE’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.

Both the employees and the NRTEE contribute to the Public Service Pension Plan. The anticipated expense for 2011-12 amounts to $289,975 and is based a 3 year historical average of 8.76% of salaries and wages.