Canadian Grain Commission Revolving Fund
Public Accounts of Canada 2016 Volume III - Top of the page Navigation
Statement of management responsibility
We have prepared the accompanying financial statements of the Canadian Grain Commission Revolving Fund as required by and in accordance with the Policy of Treasury Board on Special Revenue Spending Authorities and the reporting requirements and standards of the Receiver General for Canada. These financial statements were prepared by management of the Fund in accordance with the significant accounting policies set out in note 2 of the statements, on a basis consistent with that of the preceding year. Some previous year's figures have been reclassified to conform to the current year's presentation.
Responsibility for the integrity and objectivity of these financial statements rests with the management of the Fund. To assure maximum objectivity and freedom from bias, the financial data contained in these financial statements has been reviewed by the Departmental Audit Committee. The information included in these financial statements is based on management's best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, the Fund maintains a set of accounts which provides a centralized record of the Fund's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the department's Departmental Performance Report is consistent with these financial statements.
The Canadian Grain Commission's Finance Division develops and disseminates financial management and accounting policies and issues specific directives which maintain standards of accounting and financial management. The Fund maintains systems of financial management and internal control which gives due consideration to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized by Parliament, are executed in accordance with prescribed regulations, and are properly recorded to maintain accountability of Government funds and safeguard the assets under the Fund's administration. Financial management and internal control systems are augmented by the maintenance of internal audit programs. The Fund also seeks to assure the objectivity and integrity of data in its financial statements by the careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility and by communicating programs aimed at ensuring that its regulations, policies, standards and managerial authorities are understood throughout the organization.
In order to assure maximum objectivity and freedom from bias, these financial statements have been examined by the external auditors who have provided an independent opinion as to whether the financial statements present fairly the financial position of the Fund as at March 31, 2016 and the results of operations and the change in financial position for the year. This opinion has been appended to these financial statements.
Approved by:
David Peters
Acting/Chief Financial Officer
May 26, 2016
Winnipeg, Canada
Statement of authority provided (used) (unaudited) for the year ended March 31
Table summary
The table presents on a comparative basis the statement of Authority provided (Used) (Unaudited). It consists of five columns: item descriptions, current year with two columns—estimates and actual, and previous year with two columns—estimates and actual. Subtotals are displayed at operating source (use) of funds and totals are displayed at the authority provided (used).
(in thousands of dollars)
2016 | 2015 | |||
---|---|---|---|---|
Estimates | Actual | Estimates | Actual | |
Net results | (negative 2,511) | 29,303 | 3,867 | 29,882 |
Items not requiring use of funds | 3,104 | 3,394 | 3,295 | 277 |
Operating source (use) of funds | 593 | 32,697 | 7,162 | 30,159 |
Items requiring use of funds | ||||
Net tangible capital assets acquisitions | 3,159 | 1,906 | 3,961 | 3,343 |
Transition payments for implementing salary payments in arrears | – | 8 | – | 1,093 |
Net other assets and liabilities | (negative 2,566) | 3,899 | 11,147 | 1,307 |
Authority provided (used) | – | 26,884 | (negative 7,946) | 24,416 |
Reconciliation of unused authority (unaudited) as at March 31
Table summary
The table presents on a comparative basis the reconciliation of Unused Authority (Unaudited). It consists of three columns: item descriptions, current year and previous year. Subtotals are displayed at net authority used, end of year and totals are displayed at the unused authority carried forward.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Debit balance in the accumulated net charge against the Fund's authority | 91,086 | 63,284 |
Payables at year-end charged against the appropriation after March 31 | (negative 3,257) | (negative 2,339) |
Amounts credited to the appropriation after March 31 | 41 | 292 |
Other | 6,249 | 5,998 |
Authority provided | 94,119 | 67,235 |
Amounts charged for the back office transformation initiative | (negative 232) | – |
Net authority provided, end of year | 93,887 | 67,235 |
Authority limit | 2,000 | 2,000 |
Unused authority carried forward | 95,887 | 69,235 |
Independent Auditors' Report
To the Chief Commissioner, Commissioners and the Departmental Audit Committee of Canadian Grain Commission Revolving Fund
We have audited the accompanying financial statements of the Canadian Grain Commission Revolving Fund, which comprise the statement of financial position as at March 31, 2016 and the statements of operations and net assets, and cash flows for the year then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information. These financial statements have been prepared by management of the Fund to meet the requirements of section 6.4 of the Treasury Board of Canada's Special Revenue Spending Authorities.
Management's responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with section 6.4 of the Treasury Board of Canada's Policy on Special Revenue Spending Authorities, and for such internal controls as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Canadian Grain Commission Revolving Fund as at March 31, 2016 and the results of its operations and net assets and its cash flows for the year then ended in accordance with section 6.4 of the Treasury Board of Canada's Policy on Special Revenue Spending Authorities.
Basis of accounting and restriction on use
Without modifying our opinion, we draw attention to note 2 to the financial statements, which describes the basis of accounting. The financial statements are prepared to assist the Canadian Grain Commission Revolving Fund to meet the requirements of section 6.4 of the Treasury Board of Canada's Policy on Special Revenue Spending Authorities. As a result, the financial statements may not be suitable for another purpose. Our report is intended solely for the management of the Canadian Grain Commission Revolving Fund and the Treasury Board of Canada and should not be used by parties other than the Canadian Grain Commission Revolving Fund or the Treasury Board of Canada.
PricewaterhouseCoopers LLP
Chartered Professional Accountants,
Licensed Public Accountants
May 25, 2016
Ottawa, Ontario
Statement of financial position as at March 31
Table summary
The table presents on a comparative basis the statement of Financial Position. It consists of three columns: item descriptions, current year and previous year. Item descriptions are grouped in two: the assets and the liabilities and net assets, both displaying totals. Current item descriptions are grouped together for assets and for liabilities, both displaying subtotals at total current assets and at total current liabilities. Subtotals are displayed at total liabilities and at total net liabilities.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Assets | ||
Financial assets | ||
Cash in transit | 84 | 807 |
Accounts receivable (Note 3) | 11,192 | 8,718 |
Accountable advances | 9 | 7 |
Subtotal | 11,285 | 9,532 |
Non-financial assets | ||
Prepaid expenses | 119 | 268 |
Tangible capital assets (Note 4) | ||
At cost | 28,443 | 31,728 |
Accumulated amortization | (negative 20,635) | (negative 23,369) |
Subtotal | 7,927 | 8,627 |
Total | 19,212 | 18,159 |
Liabilities and net assets | ||
Current liabilities | ||
Accounts payable and accrued liabilities (Note 5) | 1,718 | 1,767 |
Salaries payable (Note 6) | 3,688 | 3,821 |
Vacation, overtime and compensatory leave payable | 1,942 | 1,854 |
Deferred revenue | 952 | 830 |
Current portion of employee severance benefits liability (Note 7) | 220 | 346 |
Subtotal | 8,520 | 8,618 |
Long-term liabilities | ||
Employee severance benefits liability (Note 7) | 2,439 | 2,781 |
Total | 10,959 | 11,399 |
Net assets (Note 9) | 8,253 | 6,760 |
Total | 19,212 | 18,159 |
Approved by:
Jim Smolik
Acting/Deputy Head
Cheryl Blahey
Chief Financial Officer
Statement of operations and net assets for the year ended March 31
Table summary
The table presents on a comparative basis the statement of Operations with fourteen columns. The first column lists the item descriptions which are grouped in two: revenue and expenses, both displaying subtotals at total revenue and at total expenses. The last item description displays the net results. The next ten columns provide current year budgeted amounts and current year actuals for each following categories: quality assurance, quantity assurance, grain quality research, producer protection, internal services. Columns twelve and thirteen displays the totals of the five previous categories under budget total and under actual total. The last column provides the total for the previous year at actual totals.
(in thousands of dollars)
2016 | 2015 | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quality Assurance | Quantity Assurance | Grain Quality Research | Producer Protection | Internal Service | Total | Total | |||||||
Budget | Actual | Budget | Actual | Budget | Actual | Budget | Actual | Budget | Actual | Budget | Actual | Actual | |
Revenue | |||||||||||||
Service fees | 46,672 | 69,190 | 3,721 | 6,150 | – | 1 | 533 | 265 | 20 | 84 | 50,946 | 75,690 | 73,858 |
Parliamentary appropriations (Note 8) | – | – | – | – | 5,230 | 5,230 | – | – | 245 | 245 | 5,475 | 5,475 | 5,475 |
License fees and producer cars | – | – | – | – | – | – | 1,928 | 1,940 | – | – | 1,928 | 1,940 | 1,969 |
Contract revenue | 728 | 852 | – | – | 410 | 525 | – | – | – | 16 | 1,138 | 1,393 | 1,607 |
Special appropriations (Note 8) | – | – | – | – | – | – | – | – | – | 137 | – | 137 | 815 |
Employee termination benefit appropriations (Note 8) | – | – | – | – | – | – | – | – | – | – | – | – | 1,201 |
Total revenue | 47,400 | 70,042 | 3,721 | 6,150 | 5,640 | 5,756 | 2,461 | 2,205 | 265 | 482 | 59,487 | 84,635 | 84,925 |
Expenses | |||||||||||||
Salaries and employee benefits | 21,750 | 20,179 | 1,491 | 754 | 4,969 | 4,350 | 2,952 | 2,669 | 10,736 | 10,130 | 41,898 | 38,082 | 38,614 |
Occupancy costs | 2,984 | 2,697 | 57 | 57 | 1,441 | 1,290 | 325 | 280 | 752 | 1,075 | 5,559 | 5,399 | 5,345 |
Travel | 1,771 | 1,403 | 245 | 163 | 377 | 281 | 164 | 139 | 798 | 689 | 3,355 | 2,675 | 2,381 |
Repairs and supplies | 972 | 749 | 14 | 9 | 1,408 | 1,275 | 137 | 77 | 880 | 816 | 3,411 | 2,926 | 2,953 |
Amortization of tangible capital assets | 1,054 | 887 | 73 | – | 952 | 872 | 53 | 10 | 972 | 687 | 3,104 | 2,456 | 2,603 |
Professional and special services | 191 | 107 | 7 | – | 290 | 226 | 6 | 10 | 2,410 | 2,135 | 2,904 | 2,478 | 1,512 |
Communications | 22 | 17 | – | – | 6 | 8 | 16 | 55 | 922 | 754 | 966 | 834 | 874 |
Postage and courier | 271 | 229 | – | – | 100 | 18 | 5 | 90 | 131 | 144 | 507 | 481 | 481 |
Loss (gain) on disposal of tangible capital assets | – | – | – | – | – | (negative 9) | – | – | – | 3 | – | (negative 6) | 280 |
Other expenses | 272 | 3 | – | – | – | – | – | 2 | 22 | 2 | 294 | 7 | – |
Total expenses | 29,287 | 26,271 | 1,887 | 983 | 9,543 | 8,311 | 3,658 | 3,332 | 17,623 | 16,435 | 61,998 | 55,332 | 55,043 |
Net results | 18,113 | 43,771 | 1,834 | 5,167 | (negative 3,903) | (negative 2,555) | (negative 1,197) | (negative 1,127) | (negative 17,358) | (negative 15,953) | (negative 2,511) | 29,303 | 29,882 |
Net assets, beginning of year | 6,760 | 5,645 | |||||||||||
Transfer of the transition payments for implementing salary payments in arrears (Note 13) | (negative 8) | (negative 1,093) | |||||||||||
Net financial resources used and change in the accumulated net charge against Fund's authority, during the year | (negative 27,802) | (negative 27,674) | |||||||||||
Net assets, end of year | 8,253 | 6,760 |
Statement of cash flows for the year ended March 31
Table summary
The table presents on a comparative basis the statement of Cash Flows. It consists of three columns: item descriptions, current year and previous year. Item descriptions are grouped in two: Operating activities and Investing activities, both displaying subtotals. Subtotals are displayed at net financial resources (used) by and change in the accumulated net charge against the Fund's authority during the year. Totals are displayed at accumulated net charge against the Fund's authority end of year.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Operating activities | ||
Net results for the year | 29,303 | 29,882 |
Items not affecting use of funds | ||
Amortization of tangible capital assets | 2,456 | 2,603 |
Provision for employee severance benefits | – | (negative 67) |
Loss (gain) on disposal of tangible capital assets | (negative 6) | 264 |
Subtotal | 31,753 | 32,682 |
Payments of employee severance benefits | (negative 468) | (negative 2,523) |
Transition payments for implementing salary payments in arrears | (negative 8) | (negative 1,093) |
Variations in statement of financial position | ||
Cash in transit | 723 | (negative 313) |
Accounts receivable | (negative 2,474) | 903 |
Accountable advances | (negative 2) | 1 |
Prepaid expenses | 149 | 109 |
Accounts payable and accrued liabilities | (negative 50) | 571 |
Salaries payable | (negative 133) | 497 |
Vacation, overtime and compensatory leave payable | 89 | (negative 44) |
Deferred revenue | 122 | 227 |
Net financial resources provided by operating activities | 29,701 | 31,017 |
Capital investing activities | ||
Acquisition of tangible capital assets | (negative 1,907) | (negative 3,343) |
Proceeds from disposal of tangible capital assets | 8 | – |
Net financial resources used by capital investing activities | (negative 1,899) | (negative 3,343) |
Net financial resources provided and change in the accumulated net charge against the Fund's authority, during the year | 27,802 | 27,674 |
Accumulated net charge against the Fund's authority, beginning of year | 63,284 | 35,610 |
Accumulated net charge against the Fund's authority, end of year | 91,086 | 63,284 |
Notes to the financial statements for the year ended March 31, 2016
1. Authority and purpose
The Canadian Grain Commission Revolving Fund ("CGC", the "Revolving Fund" or "the Fund") derives its authority from the Canada Grain Act. The CGC's mandate as set out in the Act is to, in the interest of grain producers, establish and maintain standards of quality for Canadian grain, regulate grain handling in Canada and to ensure a dependable commodity for domestic and export markets.
In order to effectively pursue its mandate, the CGC aims to achieve the following strategic outcome: Canada's grain is safe, reliable and marketable and Canadian grain producers are properly compensated for grain deliveries to licensed grain companies.
The CGC's Program Alignment Architecture has five programs: Quality Assurance Program, Quantity Assurance Program, Grain Quality Research Program, and Producer Protection Program. Each contributes to making progress to the sole strategic outcome. The Internal Services program supports all other programs within the CGC.
The Canadian Grain Commission Revolving Fund was established under Appropriation Act No. 6, 1994–1995. The Fund has a continuing non–lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for working capital, tangible capital acquisitions and temporary financing of accumulated operating deficits and drawdown authority of $2,000,000.
The CGC did not request to access its net authority provided from Treasury Board. The CGC received a total of $5,612,526 through the Appropriation Acts approved by Parliament for the fiscal year 2015–2016.
Amendments to the Canada Grain Act came into force on August 1, 2013. In response to both legislative changes and restructured user fees, the CGC adjusted its workforce (note 6), organizational design, and operations. A revised funding model also came into effect on August 1, 2013 that is based on full cost recovery through user fees and ongoing appropriations. Until the implementation of this model, the CGC was funded through its ongoing appropriations, fees collected and special appropriation.
In accordance with the Government's policy on self-insurance, the CGC does not carry its own insurance. The CGC is not subject to income tax.
2. Significant accounting policies
The financial statements have been prepared in accordance with accounting standards issued by the Treasury Board of Canada Secretariat and the reporting requirements of the Receiver General for Canada. The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles because:
- The liabilities for employee termination benefits and severance liability and are based on management's best estimate rather than actuarial valuations.
- The services received without charge from other government departments and agencies are not reported as expenses.
The significant accounting policies are as follows:
a. Use of estimates
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the periods covered by the financial statements. The principal financial statement components, subject to measurement uncertainty, include salaries payable related to unsettled labour contracts, the estimated useful life of capital assets and the liabilities for employee vacation, severance benefits and employee termination benefits. Actual results could differ from those estimates. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
b. Revenue recognition
Revenue is recognized in the accounting period in which it is earned through the provision of goods or services, or when an event giving rise to a claim has taken place. The majority of service fees such as inspection and weighing activities are dependent on grain volumes handled. Revenues that have been received but not yet earned are presented as deferred revenue. Deferred revenue is primarily received for licensing fees which usually covers a 12-month period.
c. Expense recognition
Unless otherwise disclosed, expenses are recorded in the period they are incurred.
d. Cash in transit
Cash in transit includes cash and cheques received prior to March 31 but not deposited until the subsequent year.
e. Parliamentary and employee termination benefit appropriation
Operations are funded primarily from a permanent authority from Parliament (Revolving Fund) where the CGC is allowed to spend fees collected. Some of the operations of the Grain Quality Research Program and Internal Audit are funded by ongoing Parliamentary appropriation through their annual votes. Special appropriations were also received to cover affected employees' termination benefits. These appropriations have been recorded as revenue of the Fund.
f. Accounts receivable
Accounts receivable are stated at amounts expected to be ultimately realized. Allowances are established for all accounts for which interest or principal payments are 180 days past due.
g. Tangible capital assets
Certain assets previously under the custody of the Department of Agriculture and Agri-Food Canada were assumed by the revolving fund on April 1, 1995. The assumed assets were considered to be contributed capital and recorded at the Crown's estimated net book value. Assets acquired subsequent to April 1, 1995 were recorded at cost. Proceeds from the disposal of capital assets are retained by the revolving fund.
All capital assets and leasehold improvements with a cost equal to or greater than $10,000 are capitalized at their acquisition cost.
Assets are amortized on a straight-line basis over their estimated useful lives, commencing in the month after they are put into service, as follows:
Table summary
The table presents the tangible capital assets and consists of 2 columns: the assets categories with respective amortization periods.
Scientific equipment | 5 years |
---|---|
Office equipment and furniture | 5 years |
Operational equipment | 10 years |
Motor vehicles | 5 years |
Computer equipment and software | 3 years |
Leasehold improvements | 5 years (terms of the leases) |
The costs for assets under construction are capitalized as incurred with amortization commencing in the month after they are put into service.
h. Vacation, overtime and compensatory leave
Vacation, overtime and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
i. Employee severance benefits
Severance benefits accrue to employees over their years of service with the Government of Canada as stipulated in their collective agreements. The CGC provides for the severance entitlements earned by employees. The obligation relating to the benefits earned by employees is calculated using information derived from management's estimate of the liability.
j. Employee termination benefits
Employees affected by the amendments to the Canada Grain Act are entitled to termination benefits, calculated based on salary levels in effect at the time of termination as stipulated in their collective agreements. The obligation is calculated using information derived from management's estimate of the liability.
k. Pension plan
Employees of the CGC are covered by the Public Service Superannuation Act and the Supplementary Retirement Benefits Act. The Government of Canada's portion of the pension cost is included in the employee benefit charge assessed against the revolving fund. The actual payment of the pension is made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts. Current legislation does not require the CGC to make contributions for any actuarial deficiencies of the Public Service Superannuation account.
l. Sick leave
Employees are permitted to accumulate unused sick leave. However, such leave entitlements do not vest and may only be used in the event of illness. Unused sick leave upon employee termination is not payable to the employee. No amount has been accrued in these financial statements and payments of sick leave benefits are included in current operations as incurred.
3. Accounts receivable
Table summary
The table presents on a comparative basis the accounts receivable. It consists of three columns: item descriptions, current year and previous year. The last row presents the totals for accounts receivable net of allowance for doubtful accounts.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Other government departments and agencies | 41 | 292 |
Outside parties | 11,156 | 8,426 |
Subtotal | 11,197 | 8,718 |
Less: allowance for doubtful accounts from outside parties | (negative 5) | – |
Total | 11,192 | 8,718 |
4. Tangible capital assets
Table summary
The table presents the Capital assets with eleven columns. The first column lists the item descriptions and the next eight columns are grouped in two: cost (opening balance, acquisitions, disposals, and closing balance) and accumulated amortization (opening balance, amortization, decrease and closing balance). The last two columns provide the net book value for the current year and for the previous year. Totals are displayed on the last row.
(in thousands of dollars)
Cost | Accumulated amortization | Net book value | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Opening balance | Acquisitions | Disposals | Closing balance | Opening balance | Amortization | Disposals | Closing balance | 2016 | 2015 | |
Scientific equipment | 16,563 | 306 | (negative 2,622) | 14,247 | 12,231 | 1,255 | (negative 2,622) | 10,864 | 3,383 | 4,332 |
Office equipment and furniture | 304 | – | (negative 114) | 190 | 304 | – | (negative 114) | 190 | – | – |
Operational equipment | 2,205 | 374 | – | 2,579 | 679 | 209 | – | 888 | 1,691 | 1,526 |
Motor vehicles | 323 | 42 | (negative 21) | 344 | 161 | 50 | (negative 21) | 190 | 154 | 162 |
Computer equipment and software | 5,689 | 647 | (negative 224) | 6,112 | 4,974 | 590 | (negative 224) | 5,340 | 772 | 715 |
Leasehold improvements | 6,054 | 19 | (negative 2,211) | 3,862 | 5,020 | 352 | (negative 2,209) | 3,163 | 699 | 1,034 |
Assets under construction | 590 | 519 | – | 1,109 | – | – | – | – | 1,109 | 590 |
Total | 31,728 | 1,907 | (negative 5,192) | 28,443 | 23,369 | 2,456 | (negative 5,190) | 20,635 | 7,808 | 8,359 |
5. Accounts payable and accrued liabilities
Table summary
The table presents on a comparative basis the accounts payable and accrued liabilities. It consists of three columns: item descriptions, current year and previous year. The last row presents the totals.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Other government departments and agencies | 1,065 | 519 |
Outside parties | 503 | 1,248 |
Security payment | 150 | – |
Total | 1,718 | 1,767 |
6. Salaries payable
With the legislative changes to the Canada Grain Act, a segment of the CGC work force became eligible for the provision of termination benefits. As a result, the CGC has recorded an obligation for termination benefits as part of salaries payable to reflect the estimated workforce adjustment costs. As the changes were implemented, employees received their termination benefits and there is a portion of these benefits payable in future years.
Table summary
The table presents on a comparative basis salaries payable. It consists of three columns: item descriptions, current year and previous year. Subtotals are displayed at Employee termination benefits, end of year. Totals are displayed at salaries payable.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Employee termination liability, beginning of year | 1,162 | 1,666 |
Expense for the year | (negative 608) | 715 |
Benefits paid during the year | (negative 453) | (negative 1,219) |
Employee termination liability, end of year | 101 | 1,162 |
Other salary costs including benefits | 3,587 | 2,659 |
Salaries payable | 3,688 | 3,821 |
7. Employee severance benefits
The CGC provides severance benefits to its employees based on eligibility, years of service and final salary. These benefits are currently calculated based on the actual severance owed to each employee.
With Budget 2011, the Government of Canada announced its intention to eliminate the ongoing accumulation of severance benefits. All collective agreements for the CGC have been negotiated and severance benefits have ceased to accumulate. Employees were given the option to liquidate immediately or collect upon departure from the public service.
Table summary
The table presents on a comparative basis the employee severance benefits. It consists of three columns: item descriptions, current year and previous year. Subtotals are displayed at employee severance benefits end of year. Totals are displayed at long-term portion of employee severance benefits.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Employee severance benefits liability, beginning of year | 3,127 | 5,717 |
Expense for the year | – | (negative 67) |
Benefits paid during the year | (negative 468) | (negative 2,523) |
Employee severance benefits liability, end of year | 2,659 | 3,127 |
Current portion of employee severance benefits liability | (negative 220) | (negative 346) |
Long-term portion of employee severance benefits liability | 2,439 | 2,781 |
8. Parliamentary, special and employee termination benefits appropriation
The CGC is financed by the Government of Canada through a combination of an ongoing Parliamentary appropriation, authority to re-spend fees collected, accumulated surpluses from prior years and a revolving line of credit of $2,000,000.
The government funding basis is used to recognize transactions affecting Parliamentary appropriations. The statement of operations and net assets is based on accrual accounting. Consequently, items presented in the statement of operations and net assets are not necessarily the same as those provided through appropriations from Parliament. Items recognized in the statement of operations and net assets in one year may be funded through Parliamentary authorities in prior, current, or future years. Accordingly, the CGC has different appropriation authorities for the year on a government funding basis than on an accrual accounting basis. Details on appropriation authorities provided and used are shown in the following tables.
Appropriation authorities provided and used:
Table summary
The table presents on a comparative basis the appropriation authorities provided and used. It consists of three columns: item descriptions, current year and previous year. Totals are displayed at current year appropriation authorities provided and used.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Total appropriation funds provided | 5,719 | 9,262 |
Frozen allotment | (negative 107) | – |
Employee termination benefits: | ||
Frozen allotment (lapsed) | – | (negative 10) |
Under-spent (lapsed) | – | (negative 1,761) |
Current year appropriation funds provided and used | 5,612 | 7,491 |
Total current year appropriation funds provided and used consists of:
Table summary
The table presents on a comparative basis the special appropriation for the total current year appropriation funds provided and used. It consists of three columns: item descriptions, current year and previous year. Totals are displayed at current year appropriation funds provided and used.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Special appropriation | 137 | 815 |
Employee termination benefits appropriation | – | 1,201 |
Parliamentary appropriation | 5,475 | 5,475 |
Current year appropriation funds provided and used | 5,612 | 7,491 |
9. Net assets
Contributed capital represents the value of capital assets financed from capital contributions at the inception of the Fund.
The accumulated surplus is the accumulation of each fiscal year's surplus net of deficits since the inception of the Fund.
The accumulated net charge against the Fund's authority represents the cumulative receipts and disbursements over the life of the Fund.
Table summary
The table presents on a comparative basis the accumulated net charge against the Fund's authority. It consists of three columns: item descriptions, current year and previous year. Totals are displayed at total accumulated net charge against the Fund's authority.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Contributed Capital | 4,941 | 4,941 |
Accumulated Surplus | ||
Opening balance | 65,103 | 36,314 |
Net results | 29,303 | 29,882 |
Transfer of the transition payments for implementing salary payments in arrears | (negative 8) | (negative 1,093) |
Closing balance | 94,398 | 65,103 |
Accumulated net charge against the Fund's authority | ||
Opening balance | (negative 63,284) | (negative 35,610) |
Change in net resources provided | (negative 27,802) | (negative 27,674) |
Closing balance | (negative 91,086) | (negative 63,284) |
Total net assets | 8,253 | 6,760 |
10. Contractual obligations
CGC leases its premises under occupancy instruments. An occupancy instrument is a formal agreement between the CGC and Public Services and Procurement Canada, recording the terms and conditions that govern the provision and occupancy of the accommodation. CGC has a total of 15 separate occupancy agreements with various term lengths. Expected future payouts are as follows:
Table summary
The table presents the Contractual obligations for the next five years and thereafter. It consists of two columns: the year and the respective amount.
(in thousands of dollars)
2017 | 4,748 |
---|---|
2018 | 3,943 |
2019 | 3,749 |
2020 | 3,790 |
2021 and thereafter | 7,460 |
11. Contingent liabilities
In the normal course of its operations, CGC may become involved in various legal actions. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense is recorded in the financial statements. As at March 31, 2016, one claim is outstanding against CGC, as noted below.
Grievances have been filed against the CGC with respect to weekend premiums as stated in a collective agreement. The matters are still to be scheduled for adjudication and the outcome of these claim is not determinable at this time. No accrual for this contingency has been made in the financial statements.
12. Related party transactions
The CGC is related in terms of common ownership to all Government of Canada departments, agencies and Crown corporations. The CGC enters into transactions with these entities at arm's length in the normal course of business and on normal trade terms.
Services provided by other government departments
During the year, the CGC paid occupancy costs and certain professional services to other government departments or agencies. Employer's health insurance plan contributions and employee benefit plans were also provided by and paid to other government departments. Significant services have been recognized in the CGC statement of operations and net assets as follows:
Table summary
The table presents on a comparative basis related party transactions involving services provided by other government departments. It consists of three columns: item descriptions, current year and previous year. The last row presents the totals.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Employer's contribution to employee benefit plans | 7,390 | 7,475 |
Occupancy costs | 4,925 | 5,094 |
Professional and special services | ||
Audit and accounting services | 615 | 25 |
Consulting services | 152 | 99 |
Legal services | 315 | 367 |
Translation services | 237 | 252 |
Other | 55 | 116 |
Total | 13,689 | 13,428 |
Included in accounts receivable, accounts payable, and salaries payable at year end are the following amounts with related parties:
Table summary
The table presents on a comparative basis the total accounts receivable and the total accounts payable at year end with related parties. It consists of three columns: item descriptions, current year and previous year.
(in thousands of dollars)
2016 | 2015 | |
---|---|---|
Accounts receivable | 41 | 292 |
Accounts payable | 1,065 | 519 |
Employer's contribution to employee benefit plans payable | 644 | 680 |
13. Transfer of the transition payments for implementing salary payments in arrears
The Government of Canada implemented salary payments in arrears in 2014–2015. As a result, a one-time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay process. This change to the pay system had no impact on the expenses of the revolving fund. However, it did result in the use of authorities by the revolving fund and impacted the accumulated net charge against the Fund's authority. Prior to year-end, transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Services and Procurement Canada, who is responsible for the administration of the Government pay system.
14. Financial Instruments
The revolving fund's financial instruments consist of cash in transit, accounts receivable, accounts payable and accrued liabilities, salaries payable, vacation, overtime and compensatory leave payable, and employee severance benefits. The carrying values of these financial instruments approximate their fair value because of their short terms to maturity, except for employee severance benefits which are based on management's best estimate. Unless otherwise noted, it is management's opinion that the revolving fund is not exposed to significant interest, currency or credit risk arising from these financial instruments.
Financial instruments that potentially subject the CGC to concentrations of credit risk consist primarily of trade accounts receivable. For the year ended March 31, 2016, six large integrated organizations accounted for $5,183,527 or 93 percent of the CGC's outside parties receivable balances (2015—six organizations, $3,768,507 or 89 percent).
15. Comparative information
Certain comparative figures have been reclassified to conform to the current year's presentation.
Public Accounts of Canada 2016 Volume III - Bottom of the page Navigation
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