Immigration, Refugees and Citizenship Canada Consolidated Future-Oriented Statement of Operations For the Year Ending March 31, 2017

  Estimated
Results
2015-2016
(in thousands of dollars)
Planned
Results
2016-2017
(in thousands of dollars)
Expenses
Newcomer Settlement and Integration $1,121,017 $1,179,185
Passport 439,015 480,005
Migration Control and Security Management 231,642 268,271
Temporary Economic Residents 69,582 102,393
Permanent Economic Residents 103,965 93,149
Health Protection 90,856 83,063
Citizenship for Newcomers and All Canadians 88,338 79,679
Family and Discretionary Immigration 75,561 74,160
Refugee Protection 216,088 44,089
Multiculturalism for Newcomers and All Canadians 13,868 12,653
Canadian Influence in International Migration and Integration Agenda 7,793 8,566
Internal Services 223,930 213,435
Total Expenses $2,681,655 $2,638,648
Revenues
Passport fees earned $638,975 $665,859
Immigration service fees 436,847 438,084
Citizenship service fees 110,152 93,817
Right of citizenship 26,770 22,800
Right of permanent residence 88,732 88,500
International Experience Canada 9,938 9,938
Interest on loans 250 200
Passport miscellaneous revenues 397 359
Other 297 296
Revenues earned on behalf of Government (663,035) (643,684)
Total Revenues $649,323 $676,169
Net cost of operations $2,032,332 $1,962,479

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

1. Methodology and Significant Assumptions

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

The main assumptions are as follows:

  1. Immigration, Refugees and Citizenship Canada's (IRCC) activities will be strongly focused on meeting the government’s current objectives of resettling Syrian refugees to Canada, with resulting impacts on allocation of resources.
  2. Although responsibility for the Canadian Multiculturalism Act has been transferred to the Department of Canadian Heritage as of November 4, 2015, the planning and financial information under the Multiculturalism for Newcomers and All Canadians Program should be considered provisional. Financial adjustments between IRCC and Canadian Heritage will be reflected in each department’s 2016-2017 Departmental Performance Reports. 
  3. Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience and knowledge of IRCC operations, with the exception of the Passport program, and the current efforts on Syrian refugees. Expenses and revenues related to the Passport program are based on forecasted volumes. The expenses for the resettlement of Syrian refugees have been costed separately and are in addition to historical expenses.

These assumptions are adopted as at February 1st, 2016.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2015-16 and for 2016-17, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing the consolidated future-oriented statement of operations, IRCC 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 consolidated future-oriented statement of operations and the historical statements include the following:

  1. The timing and amount of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
  2. Implementation of new collective agreements.
  3. Economic conditions may affect both the amount of revenue earned and the collectability of loan receivables.
  4. With respect to the Syrian Refugee Crisis, costing was based on assumptions given the information available at the time. While well developed, the operational plan for this initiative had yet to be finalized which is understandable given the complexity of the initiative. Once deployed, there are several unknown factors which could have a bearing on the financial requirements.
  5. With respect to the Multiculturalism for Newcomers and All Canadians Program, final results will reflect its transfer to the Department of Canadian Heritage, as agreed by both parties.
  6. 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, IRCC will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates.

3. Summary of Significant Accounting Policies

The consolidated future-oriented statement of operations has been prepared using Government’s accounting policies that came into effect for the 2011–12 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. Consolidation

This consolidated future-oriented statement of operations includes the accounts of the Passport program.  These accounts have been consolidated with those of IRCC and all inter-organizational balances and transactions have been eliminated.

b. Expenses

Expenses are recorded on an accrual basis.  Expenses for IRCC’s operations are recorded when goods are received or services are rendered, including services provided without charge for international immigration services at missions abroad, accommodation, employer contributions to health and dental insurance plans, legal services, and workers’ 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 authorization of the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program.  In situations where payments do not form part of an existing program, transfer payments are recorded as expenses 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 statements. 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, provisions for valuation on loans, investments and advances and inventory obsolescence, or liabilities, including contingent 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 from regulatory fees are recognized in the accounts based on the services provided in the year.

The recognition of revenues from immigration service fees and citizenship service fees is considered deferred until the application is processed, while the recognition of revenues from rights (right of citizenship and right of permanent residence) is deferred until the right is granted.  Revenues from passport fees are recognized upon receipt of payment and verification of the passport application for completeness. Other revenues, including International Experience Canada, are accounted for in the period in which the underlying transaction or event that gave rise to the revenues takes place.

Revenues that are non-respendable are not available to discharge IRCC’s liabilities. While the Deputy Minister is expected to maintain accounting control, she 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 IRCC’s gross revenues.

Revenues that are respendable are available to discharge the liabilities of the Passport and International Experience Canada programs.

4. Parliamentary Authorities

IRCC is financed partly by the Government of Canada through parliamentary authorities.  Financial reporting of authorities provided to IRCC do not parallel financial reporting according to generally accepted accounting principles because authorities are primarily based on cash flow requirements.  Items recognized in the consolidated future-oriented statement of operations in one year may be funded through parliamentary authorities in prior, current or future years.  Accordingly, IRCC 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 current year authorities requested

  Estimated
Results
2015-2016
(in thousands of dollars)
Planned
Results
2016-2017
(in thousands of dollars)
Net cost of operations $2,032,332 $1,962,479
Adjustments for items affecting net cost of operations but not affecting authorities :
Amortization of tangible capital assets (29,181) (31,317)
Gain on disposal of tangible capital assets 13 13
Services provided without charge by other government departments (305,991) (306,603)
Increase in vacation pay and compensatory leave (3,292) (684)
Decrease (increase) in employee future benefits (674) 219
Decrease in accrued liabilities not charged to authorities 380 3,783
Bad debt expense 1,140 -
Refund of prior years' expenditures 1,910 2,239
Other 316 410
Total items affecting net cost of operation but not affecting authorities (335,379) (331,940)
Adjustments for items not affecting net cost of operations but affecting authorities :
Acquisition of tangible capital assets 15,532 20,703
Proceeds from disposal of tangible capital assets (13) (13)
Increase in net loans issued 455 284
Increase (decrease) in inventory held for resale (1,680) 32
Increase (decrease) in consumable inventory 1,298 (288)
Increase (decrease) in prepaid expenses 314 (47)
Federal Skilled Worker, Immigrant Investor Program and Entrepreneur Program returned fees 46,000 -
Refunds of prior years' revenues 4,271 4,698
Other (111) (94)
Total items not affecting net cost of operations but affecting authorities 66,066 25,275
Requested authorities $1,763,019 $1,655,814

b. Authorities requested

  Estimated
Results
2015-2016
(in thousands of dollars)
Planned
Results
2016-2017
(in thousands of dollars)
Authorities requested :
Vote 1 - Operating Expenditures $757,839 $604,119
Vote 5 - Capital Expenditures - 13,707
Vote 10 - Grants and Contributions 1,093,469 1,152,355
Non-budgetary items 455 284
Statutory amounts - Passport (net revenues) (202,153) (184,208)
Statutory amounts - Other 113,409 69,557
Requested Authorities $1,763,019 $1,655,814
Date Modified: