Future-Oriented Statement of Operations For the Year Ending March 31, 2023

Notes to the Future-Oriented Statements of Operations (unaudited)

1. 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 Departmental Plan.

The information in the forecast results for fiscal year 2021–22 is based on actual results as at November 30, 2021, and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2022–23 fiscal year.

In fiscal year 2022–23, the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) will continue to be instrumental in supporting businesses and communities across the region as they recover from the impacts of the pandemic and build future resilience. FedDev Ontario has been allocated over $650 million starting in 2021-22 to support programs including the Jobs and Growth Fund, Tourism Relief Fund, Canada Community Revitalization Fund, Aerospace Regional Recovery Initiative and targeted funding for Major Festivals and Events. The main assumptions underlying the forecasts are as follows:

• Expenses and revenues, including the determination of amounts internal and external to the government, are based on past experience with assessments made to adjust for current economic and financial environments.
• Allowances for uncollectible accounts are based on experience, but with the current environment, uncollectible amounts in general may increase.
• Transfer payment spending is based on historical spending patterns and anticipated stakeholder requirements, and an assessment of new funding initiatives.
• FedDev Ontario's ability to fully spend its authorities this year will be influenced by the capacity of recipients from across southern Ontario to launch projects and make investments, and the ongoing uncertainties of the pandemic.

These assumptions are made as at December 15, 2021.

2. Variations and Changes to the Forecasted Financial Information

Although every attempt has been made to forecast final results for the remainder of 2021–22 and 2022–23, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing this Future-Oriented Statement of Operations, FedDev Ontario has made estimates and assumptions concerning the future which 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 Future-Oriented Statement of Operations and the historical statement of operations include:

• Economic conditions and its impact on the collectability of loan receivables;
• Value of the Canadian dollar and its impact on the cost of imported goods;
• Implementation of new collective agreements; and
• Other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year (ex. in year-adjustments for ratification of collective agreements).

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

3. Summary of Significant Accounting Policies

The Future-Oriented Statement of Operations has been prepared using the Government's accounting policies in effect for the 2021–22 fiscal year and 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 include:

Expenses

Non-repayable transfer payments are recorded as expenses when the recipients have met all the eligibility criteria and the transfers are authorized by March 31.

Other expenses are generally recorded when goods are received or services are rendered and include 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.

4. Parliamentary Authorities

FedDev Ontario is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to FedDev Ontario 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, the department 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.