INTRODUCTION TO THE ESTIMATES
The Estimates for each fiscal year is presented to the Legislative Assembly by the Minister of Finance.
The 2002/03 Estimates is presented on the Summary Accounts basis, which combines the Consolidated Revenue Fund and Crown corporations and agencies. The Estimates includes a pro-forma Summary Accounts balance sheet; the operating revenues and expenses of the Consolidated Revenue Fund combined with the operating results of Crown corporations and agencies; and, non-operating financial requirements (financing transactions) of the broadly defined government entity for the coming fiscal year. The Estimates also includes, for comparative purposes, budget and revised forecast information for the 2001/02 fiscal year.
The Consolidated Revenue Fund is comprised of the General Fund. All expenditures from the Consolidated Revenue Fund must be authorized by an appropriation, either through a Supply Act or through a specific provision in another statute. The General Fund is the main operating account of government and includes a number of Special Accounts which provide statutory authority for specific expenditures.
In addition to disclosing the pro-forma balance sheet and expected operating results and financing transactions of the Summary Accounts entity, the Estimates forms the basis for annual Consolidated Revenue Fund appropriations approved by the Legislative Assembly through a Supply Act. Votes contained in the Consolidated Revenue Fund provide the framework for legislative control of government spending since funds can only be expended for purposes stated in the Estimates and expenses cannot exceed individual vote totals without legislative authority. Voted expenses are detailed by sub-votes and group account classification in the Estimates. Voted and Special Account expenses are detailed by standard object of expense in the Supplement to the Estimates. This more detailed presentation is intended to provide additional information and establishes a framework for administrative control by Treasury Board over special office and ministry expenses.
The 2002/03 Estimates is comprised of three separate sections.
· Summary Information - this section of the Estimates provides an overview of the financial plan for the Summary Accounts for the 2002/03 fiscal year. The section begins with an outline of the accounting policies on which the Estimates has been prepared and significant presentation changes in the Estimates from the previous year. The first three tables focus on the balance sheet, aggregate operating and financing transactions of the Summary Accounts, and the resulting changes in the accumulated deficit. The fourth table summarizes the operating results of Crown corporations and agencies and combines these results with the Consolidated Revenue Fund operating result to arrive at the Summary Accounts Deficit. The fifth table summarizes estimated Consolidated Revenue Fund operating revenue by major source together with estimated operating expenses for special offices, ministries and other appropriations.
The sixth table reconciles the Summary Accounts Deficit to the change in taxpayer-supported debt and discloses total debt. The seventh table provides a more detailed presentation of estimated Consolidated Revenue Fund revenue and summarizes revenues that are collected by the province on behalf of, and transferred to, Crown corporations, agencies and other entities. The final table in this section details Consolidated Revenue Fund expense by voted appropriation and by Special Account.
· Estimates of Special Offices, Ministries and Other Appropriations - this section presents detailed information on Consolidated Revenue Fund operating expenses, capital expenditures and financing transactions. The Legislative Assembly will be asked to approve Consolidated Revenue Fund expenses through a Supply Act based on the detailed information that is provided in this section. The Supply Act will provide the legislative authority for voted appropriations and financial requirements. Expenses from Special Accounts are disclosed in the Estimates, however, they are not included in Supply Act totals since they have existing statutory authority.
Each special office and ministry is presented on a similar basis, starting with a summary page. Total voted and statutory (Special Accounts) expense is shown, as well as capital and other financing transactions which are the responsibility of the special office or ministry. The summary page discloses expenses on both the gross (before deducting external recoveries) and net (after deducting external recoveries) basis. Also included on the summary page of each special office and ministry is the estimated fulltime equivalent (FTE) employment for the fiscal year. Details on each of the expense items appearing on the summary page follow, commencing with voted appropriations which include a description of the purpose for each vote and the related expense.
· Schedules - the last section of the Estimates consists of supporting schedules that include detailed Consolidated Revenue Fund expense, FTE and capital expenditure reconciliations to restate the 2001/02 Estimates to be consistent with the 2002/03 Estimates presentation; summaries of operating and financial requirements and opening and closing balances for all Special Accounts; summaries of major ministry and taxpayer-supported Crown corporation and agency related financing transactions; a summary of FTE staff utilization by special office, ministry and taxpayer-supported Crown corporation/agency; a fully consolidated statement of revenues and expenses by function; a summary of ministerial accountability for operating expenses; and, summaries of taxpayer-supported Crown corporation and agency revenues and expenses.
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EXPLANATORY NOTES
Recoveries in the Estimates
As in previous years, the 2002/03 Estimates contains several votes and sub-votes where recoveries are applied against expenses. In these situations, the phrase "net of recoveries" appears beside the expense description and the total recoveries amount is disclosed in the group account classification on the opposite page.
There are two forms of recoveries:
Internal Recoveries
Internal recoveries represent transfers within the Consolidated Revenue Fund and generally comprise interministry chargebacks for costs budgeted centrally in government for the provision of certain goods and services that are recovered from areas elsewhere in government that consume those goods and services. Internal recoveries include employee benefits, postal services, Queen's Printer services and Provincial Treasury banking charges.
External Recoveries
External recoveries represent recoveries to the Consolidated Revenue Fund from entities outside of the Consolidated Revenue Fund, and include costs and amounts recovered from government corporations, other levels of government and non-government organizations; individuals; and businesses. External recoveries also include sinking fund interest earnings; an offset for commissions paid for the collection of government revenues and accounts; and increases in provisions for or the write-off of uncollectible revenue-related accounts. An example of a major external recovery is interest costs relating to funds borrowed by government and reloaned to public bodies.
Authority to Spend Estimated Recoveries
Consolidated Revenue Fund expense budgets are established on the basis of the gross amount of funds required for a particular purpose, with anticipated recoveries then being deducted to arrive at the net expense. A shortfall in anticipated recoveries would cause net expenses to increase. Section 23(3) of the Financial Administration Act provides that where a vote in the Estimates approved by the Legislature shows an item as a credit or recovery, the vote is deemed to authorize the payment of the net expense plus the amount of the credit or recovery that is budgeted, whether or not this latter amount is actually realized. Under-realization of recoveries would have the same effect on the Consolidated Revenue Fund operating result as an equivalent shortfall in anticipated government revenue.
Authority to Spend Excess Recoveries
Section 23(3) of the Financial Administration Act also provides that excess Consolidated Revenue Fund recoveries (amounts earned over and above those shown in the Estimates approved by the Legislative Assembly) may be used for additional expenses, with the prior approval of Treasury Board. This incremental spending would have no impact on net budgeted Consolidated Revenue Fund expenses since the incremental recoveries would offset the incremental spending.
Capital Acquisitions
The government capitalizes certain capital assets in its financial statements. The annual cost of these acquisitions is shown in each ministry’s section of the Estimates, and is summarized in Schedules D and D1. The cost of these acquisitions is not included in ministries’ operating budgets but is instead voted as one amount in the Supply Act. The amortization cost of tangible capital assets held by the Consolidated Revenue Fund is included in ministry operating budgets. The government also provides capital funding to organizations within and outside of the Summary Accounts entity to fund public infrastructure. Schedule C summarizes this funding. The amortization cost of these advances is included in ministry operating budgets.