Department of Justice Canada
2020-21 Departmental Plan

Future-Oriented Statement of Operations (unaudited)
for the year ending March 31
(in thousands of dollars)
Legal Services
575,132 550,980
Justice System Support
472,362 482,645
Internal Services
182,845 144,466
Total expenses 1,230,339 1,178,091
Legal Services
383,107 365,702
Family Law fees
6,934 6,934
Common Services
2,116 2,116
Other revenues
1,332 1,332
Revenues earned on behalf of Government
(50,463) (49,084)
Total revenues 343,026 327,000
Net cost of operations before government funding and tranfers 887,313 851,091

The accompanying notes form an integral part of this Future-Oriented Statement of Operations.

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

1. Methodology and significant assumptions

The Future-Oriented Statement of Operations (FOSO) 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 (FY) 2019-20 is based on actual results as at October 31, 2019 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the FY 2020-21.

The main assumptions underlying the forecasts are as follows:

These assumptions are made as at October 31, 2019.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2019-20 and for 2020-21, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

In preparing this FOSO, the Department of Justice 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 past 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 FOSO and the historical statement of operations include:

After the Departmental Plan is tabled in Parliament, the Department of Justice 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 FOSO has been prepared using the Government of Canada's accounting policies in effect for FY 2019-20, 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.

Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.

Expenses related to the provision of legal services are limited to those costs borne and settled directly by the Department. The cost of legal services which are paid directly by client departments to outside suppliers such as legal agents, are not included in the expenses of the Department.

Services provided without charge by other government departments for accommodation, employer contributions to health and dental insurance plans, and workers’ compensation are recorded as operating expenses at their carrying value.

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. Expenses also include provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debt on receivables. Under the Family Orders and Agreements Enforcement Assistance Act, the allowance for doubtful accounts represents management's best estimate of probable losses on receivables. The allowance is determined based on an analysis of historic loss and an assessment of current conditions.

(b) Revenues

Revenues are derived from the provision of advisory, litigation and legislative services provided by the Department of Justice's law practitioners and are recognized in the year the services are rendered. These revenues are based on legal service rates approved by Treasury Board in accordance with the Common Services Policy, for non-appropriated mandatory legal services to government departments and agencies, as well as for legal services to crown corporations and non-federal organizations.

Service and administration fee revenues under the Family Law programs are recognized based on services provided in the year, such as upon validation of the garnishment application or upon issuance of the divorce clearance certificate. As prescribed by the Family Orders and Agreements Enforcement Assistance Act, a fee is chargeable in respect of the processing of every garnishee summons served on the Minister.

Common Services revenues are derived in accordance with the Common Services Policy for specific internal services provided to Public Prosecution Service of Canada (PPSC).

Fines, forfeitures and awarded court costs provided for under the Contraventions Act are recognized upon receipt of payment by the Department. Fines and forfeitures are in effect penalties for illegal actions, rather than fees. These revenues are reported in "Other revenues".

Revenues that are non-respendable are not available to discharge the Department's liabilities. Although the Deputy Minister is expected to maintain accounting control, she has no authority over 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 as a reduction to the Department’s gross revenues.

4. Parliamentary authorities

The Department receives most of its funding through annual parliamentary authorities. Items recognized in the FOSO in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the Department 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) Reconciliation of net cost of operations to requested authorities
(in thousands of dollars) Forecast Results
Planned Results
Net cost of operations before government funding and transfers 887,313 851,091
Adjustment for items affecting net cost of operations but not affecting authorities: 
Amortization of tangible capital assets
(7,999) (6,097)
Loss on disposal of tangible capital assets
(5,945) -
Services provided without charge by other government departments
(91,344) (87,689)
Increase in vacation pay and compensatory leave
(5,709) (6,793)
Decrease in employee future benefits
978 1,309
Adjustments to previous years' accounts payable
7,554 7,587
Bad debt allowance
(5,643) (5,113)
Decrease in program expenditures not charged to authorities
987 987
Total items affecting net cost of operations but not affecting authorities (107,121) (95,809)
Adjustment for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets
12,749 11,727
Salary overpayments related to pay system implementation
2,787 2,009
Total items not affecting net cost of operations but affecting authorities 15,536 13,736
Requested authorities forecasted to be used 795,728 769,018
(b) Authorities provided/requested (in thousands of dollars)
Authorities provided/requested
Vote 1 – Operating expenditures
307,676 262,288
Vote 5 – Grants and contributions
424,467 430,220
Statutory amounts
81,874 76,510
Total authorities provided/requested 814,017 769,018
Less: estimated unused authorities and other adjustments 18,289 -
Requested authorities forecasted to be used 795,728 769,018