Future-oriented Statement of Operations for the year ending March 31, 2012

Statement of Management Responsibility

Responsibility for the compilation, content and presentation of the accompanying future-oriented Statement of Operations for the year ending March 31, 2012 is a shared responsibility of management of the Transportation Appeal Tribunal of Canada (TATC) and Transport Canada. Transport Canada, on behalf of TATC, maintains a set of accounts that provides a centralized record of the TATC's financial transactions. The future-oriented Statement of Operations has been prepared by Transport Canada on behalf of TATC's 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 Estimates (Report on Plans and Priorities) and will be used in TATC's Departmental Performance Report to compare with actual results.

TATC management and Transport Canada are responsible for the integrity and objectivity of the information contained in future-oriented Statement of Operations 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 a continuation of current governmental priorities and consistency in TATC's mandate and strategic outcomes. 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 this future-oriented statement, TATC 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 for the fiscal years covered in the accompanying future-oriented Statement of Operations will vary from the forecast information presented and the variations may be material.

The future-oriented Statement of Operations of TATC has not been audited.

The Chairperson,

Richard Hall,
Chairperson, TATC
Ottawa, Canada
February 11, 2011

The Chief Financial Officer,

André Morency,
Chief Financial Officer, Transport Canada
Ottawa, Canada
February 11, 2011

  

Estimated Results 2011 

Forecast 2012 

in dollars

Expenses

   

Review and Appeal Hearings

1,261,843

1,191,408

Internal Services

483,546

470,807

Total expenses

1,745,389

1,662,215

Revenues

   

Review and Appeal Hearings

-

-

Internal Services

-

-

Total revenues

-

-

Net cost of Operations 

1,745,389

1,662,215

Information for the year ended March 31, 2011 includes actual amounts from April 1, 2010 to November 30, 2010.

Segmented information (Note 8)

The accompanying notes form an integral part of this future-oriented Statement of Operations.

1. Authority and objectives

The Transportation Appeal Tribunal of Canada (TATC) is a quasi-judicial body established in accordance with the Transportation Appeal Tribunal of Canada Act, which came into force on June 30, 2003. The Transportation Appeal Tribunal of Canada is funded primarily through annual appropriations received from the Parliament of Canada and is not taxable under the provisions of the Income Tax Act.

The objective of the Transportation Appeal Tribunal of Canada is to provide the aviation, marine and rail communities with the opportunity to have enforcement and licensing decisions of the Minister of Transport reviewed by an independent body. Also, Transport Canada's decision not to issue or amend a Canadian Aviation Document (CAD) is within the Tribunal's jurisdiction.

The program architecture of the Transportation Appeal Tribunal of Canada consists of two departmental programs:

The Review and Appeal Hearings program: provides for the operation of an independent tribunal to respond to requests from the transportation community for review of enforcement and licensing decisions taken by the Minister of Transport under various transportation Acts; and to conduct hearings into such appeals. At the conclusion of a hearing, the Tribunal may confirm the Minister's decision, substitute its own decision, or refer the matter back to the Minister for reconsideration.

The Internal Services program: Internal Services are groups of related activities and resources that are administered to support the needs of program and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

The objective of the Transportation Appeal Tribunal of Canada is to provide for the operation of an independent Tribunal to respond to requests from the transportation community for review of enforcement and licensing decisions taken by the Minister of Transport under the Aeronautics Act, the Canada Shipping Act, 2001, the Marine Transportation Security Act, the Railway Safety Act, the Canada Transportation Act, the International Bridges and Tunnels Act and the Canada Marine Act, and to conduct hearings into such requests.

2. Underlying Assumptions

This future-oriented Statement of Operations has been prepared:

  1. As at November 30, 2010;
  2. On the basis of government policies, government priorities, and external environment at the time the future-oriented financial information was finalized;
  3. The Tribunal's activities will remain substantially the same as for the previous year;
  4. According to the requirements of Treasury Board Accounting Policies that are based on Canadian generally accepted accounting principles for the public sector;
  5. On the basis that the resources provided will enable TATC to deliver the expected results specified in the Report on Plans and Priorities, and
  6. On the basis of historical costs and trends.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2010/11 and for 2011/12, actual results achieved are likely to vary from the forecast information presented, and this variation could be material.

3. Variations and Changes to the Forecast Financial Information (cont'd)

Once the Report on Plans and Priorities is presented, TATC will not be updating the forecasts for any changes to appropriations or forecast financial information 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 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:

(a) Parliamentary appropriations – The Tribunal is financed by the Government of Canada through Parliamentary appropriations. The cash accounting basis is used to recognize transactions affecting parliamentary appropriations. The future-oriented Statement of Operations is based on accrual accounting. Consequently, items presented in the future-oriented Statement of Operations are not necessarily the same as those provided through appropriations from Parliament. Note 5 provides reconciliation between the bases of reporting.

(b) Forecasted expenses – These are recorded when the underlying transaction or expense occurred subject to the following:

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 for accommodation, the employer's contribution to the health and dental insurance plans, worker's compensation, and legal services are recorded as operating expenses at their estimated cost.

(c) Employee future benefits

(i) Pension benefits: Eligible employees participate in the Public Service Pension Plan administered by the Government of Canada. The department's contributions to the plan are charged to expenses in the year incurred and represent the total departmental obligation to the plan. Current legislation does not require the Tribunal to make contributions for any actuarial deficiencies of the plan.

(ii) Severance benefits: Employees are entitled to severance benefits, as provided for under labour contracts or 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.

(d) Tangible capital assets – All tangible capital assets having an initial cost of $5,000 or more are recorded at their acquisition cost. The Tribunal does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value; assets located on Indian Reserves and museum collections. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

Asset class 

Amortization period

Material and equipment

5 to 15 years

4. Summary of significant accounting policies (cont'd)

The future-oriented Statement of Operations is prepared on the assumption that TATC will not make any capital asset purchases during fiscal years 2010-2011 and 2011-2012.

5. Parliamentary appropriations

The Tribunal receives most of its funding through annual expenditure authorities provided by Parliament. 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, the Tribunal 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:

a) Authorities requested

  

Estimated Results 2011

Forecast 2012

(in dollars)

Authorities requested
Vote 75 – Operating expenditures

1,664,091

1,284,898

Statutory amounts

123,879

129,762

Less:

   

Lapsed appropriations: Operating

318,730

-

Forecast authorities available

1,469,240

1,414,660

Forecast authorities requested for the year ending March 31, 2012 are the planned spending amounts presented in the 2011-2012 Report on Plans and Priorities. Estimated authorities requested for the year ending March 31, 2011 include amounts presented in the 2010-2011 Main Estimates and Supplementary Estimates (A) and (B), planned for presentation in Supplementary Estimates (C) and estimates of amounts to be allocated at year-end from Treasury Board central votes.  

b) Reconciliation of net cost of operations to requested authorities

  

Estimated Results 2011

Forecast 2012

(in dollars)

Net cost of operation

1,745,389

1,662,215

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

   

Add (Less):

   

Services provided without charge

(251,774)

(254,512)

Amortization of tangible capital assets

(1,257)

(1,257)

Variation in vacation pay and compensatory leave

(10,681)

2,117

Employee severance benefits

(22,437)

6,097

Refund of prior years expenditures

10,000

-

Forecast authorities available

1,469,240

1,414,660

6. Pay benefits

(a) Employee Benefits:

Pension benefits: The Tribunal's 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 forecast expenses are $86,963 in 2010-11 and $91,093 in 2011-12, representing approximately 1.9 times the contributions of employees. The Tribunal'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) Employee 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.

7. Related party transactions

The Tribunal is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The Tribunal enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Tribunal receives common services, which are obtained without charge from other Government departments as disclosed below.

(a) Common services provided without charge by other government departments

During the year the Tribunal is forecasted to receive without charge from other departments, accommodation and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the Tribunal's future-oriented Statement of Operations as follows:

 

Estimated Results 2011

Forecast 2012

(in dollars)

Accommodation

192,444

197,409

Employer's contribution to the health and dental insurance plans

59,330

57,103

Total

251,774

254,512

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 check issuance services provided by Public Works and Government Services Canada, are not included as an expense in the Tribunal's Future-oriented Statement of Operations. 

8. Segmented information

Operating expenses

Estimated Results 2011

Forecast 2012

Review and Appeal Hearings

Internal Services

Total

(in dollars)

Salaries and employee benefits

914,227

850,451

-

850,451

Professional and special services

368,000

250,864

106,136

357,000

Accommodation

192,444

-

197,409

197,409

Travel

117,500

84,467

31,733

116,200

Utilities, materials and supplies

84,961

4,639

74,641

79,280

Communication

67,000

987

59,631

60,618

Amortization of tangible capital assets

1,257

-

1,257

1,257

Total operating expenses

1,745,389

1,191,408          

470,807                      

1,662,215