Minister of Communications Authority to Prescribe Fees Order — 2
2 DEFINITIONS Depreciation — This is calculated by dividing the capital cost of the equipment by the number of expected years of useful life. The expected useful life is to be certified by two departmental employees, one of whom shall be a financial officer employed by financial services. Direct Costs — All direct labour, direct material, direct expenses and equipment costs incurred by the Department to provide a service which can be identified with and allocated to the provision of a service or goods. Direct Expenses — Expenses incurred in the provision of a service or goods which can be identified with and allocated to the provision of that service or goods. Examples of this are travel expenses or contracted work, or costs incurred by other government departments in the provision of a service or goods. Direct Labour Cost — Labour cost which can be identified with and allocated to the provision of a service or goods. The cost components are basic wage/salary rate, shift premiums, fringe benefits and overtime premiums. Fringe benefits are the employer contributions to employee benefit plans, i.e., Superannuation, Canada Pension Plan, Quebec Pension Plan, Supplementary Death Benefits, Unemployment Insurance, Medical and Surgical Insurance and Hospital Insurance. These components will be calculated on a yearly basis by individual. This total annual labour cost will then be divided by the number of available hours in a year. The available hours in one year are 1650 hours or 220 days (365 days per year less weekends (104), less statutory holidays (11), less annual leave (15), less sick leave (15), times 7.5 hours per day) unless otherwise specified in a collective agreement. Direct Material Cost — Material cost which can be identified with and allocated to the provision of a service or goods. Material costs represent expected actual usage based on expected actual cost. Equipment — Equipment cost includes depreciation (including the cost of capital), maintenance, and space where the usage of space for equipment is significant. Maintenance cost on equipment includes labour, material and direct maintenance expense where these costs are identifiable. Having calculated the yearly cost for depreciation, maintenance and space, these costs will be added together, then divided by the estimated number of hours the equipment will be used during the year to arrive at an hourly rate. Full Cost — Total of all direct and indirect costs. Government of Canada — As an accounting entity is defined in the Public Accounts, 1977, Volume 1, 1.3, as the aggregate of all its departments, agencies, boards, commissions, councils, Crown corporations, funds and other bodies, with two exceptions. These exceptions are the “Agencies” and “Proprietary”, Crown corporations listed respectively in Schedules C and D of the Financial Administration Act and those Crown corporations that are not subject to the Financial Administration Act . Incremental Cost — An incremental cost is the direct cost associated with an activity which is within the mandate of the department but for which funds have not been included in the appropriation for that activity. For example, an appropriation may fund an activity to a level of 100 units. If more than 100 units are required, the incremental cost is the excess cost of producing the additional units. Indirect Costs — These are the overhead costs of the Department and the Government of Canada. Overhead can be further defined as operating costs which cannot be directly allocated to a service or goods but can be allocated to the service or goods through some intervening basis of allocation such as direct labour cost. These costs would include statutory expenses plus those costs relating to the Departmental Budget for Administration as per the Main Estimates plus sector overhead plus services provided without charge by other government departments less formula indirect overhead recoveries from the Department of National Defence. Overhead