Canada Energy Regulator – Future-Oriented Statement of Operations (unaudited)

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

1. Authority and objectives

The Canadian Energy Regulator (CER or the Regulator), operating as the Canada Energy Regulator, was established by Government of Canada (the “Government”) under the Canadian Energy Regulator Act (CER Act) on August 28, 2019.

The CER is named in Schedule II of the Financial Administration Act and is accountable to Parliament through the Minister of Natural Resources. The CER works for the people of Canada to keep energy moving safely through our country’s pipelines and powerlines.

2. Methodology and significant assumptions

The Future-Oriented Statement of Operations has been prepared based on government priorities and departmental plans as described in the Departmental Plan.

The information in the forecast results for fiscal year 2024–25 is based on actual results as at September 30, 2024 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2025–26.

The main assumptions underlying the forecasts are as follows:

• The 2024-25 forecasted revenues and expenditures based on the CER’s funding projections and internal forecasts.
• Fiscal year 2025-26 reflects revenues and expenditures based on the Canada Energy Regulator (CER)’s 2025-26 Departmental Plan. The CER’s activities will remain substantially the same as in the previous year.

3. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2024–25 and for 2025–26, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

In preparing this Future-Oriented Statement of Operations, the Canada Energy Regulator has made estimates and assumptions about the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and are continually evaluated.

Factors that could lead to material differences between the Future‑Oriented Statement of Operations and the historical statement of operations include:

• the timing and the amount of acquisitions and disposals of property, plant and equipment, which may affect gains, losses and amortization expense;
• the implementation of new collective agreements;
• economic conditions, which may affect the collectability of loan receivables;
• other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.

Once the Departmental Plan is tabled in Parliament, the Canada Energy Regulator 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.

4. Summary of significant accounting policies

The Future-Oriented Statement of Operations has been prepared using the Government of Canada’s accounting policies in effect for fiscal year 2024–25 and is 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) Expenses
  
  Transfer payments are recorded as an expense in the year the transfer is authorized, and all eligibility criteria have been met by the recipient.
  
  

  Operating expenses, which are recorded on an accrual basis when goods are received or services are rendered, include the following:

  • departmental salaries and employee benefits, professional and special services, transportation and telecommunications, equipment and furniture, rentals, repairs and maintenance, utilities, materials and supplies;
  • services provided without charge by other government departments for accommodation and legal services reported at their estimated cost;
  • vacation pay and compensatory leave accrued as the benefits are earned by employees under their respective terms of employment; and
  • amortization of tangible capital assets, which is recorded on a straight-line basis over the estimated useful life of each asset.
• b) Revenues
  
  

  Revenues from regulatory fees without performance obligations are recognized when there is authority to claim inflows of economic resources and the past transaction or event has occurred.
  
  Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.
  
  Deferred revenue consists of amounts received prior to the provision of goods or services that will be recognized as revenue in a subsequent fiscal year as the performance obligations are met.
  
  Other revenues are recognized in the period the event giving rise to the revenues occurred and future economic benefits are expected to be received.
  
  Revenues that are non-respendable are not available to discharge the department’s liabilities. Although the Chief Executive Officer (CEO) is expected to maintain accounting control, the CEO has no authority over the disposition of non-respendable revenues. As a result, non-respendable revenues are earned on behalf of the Government of Canada and are therefore presented as a reduction of the CER’s gross revenues.

5. Parliamentary authorities

The CER is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the department 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 CER 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:

Date modified:

2025-03-18