Geomatics Canada 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 Geomatics Canada 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.
Responsibility for the integrity and objectivity of these financial statements rests with the management of the Fund. The information included in these financial statements in 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 statements and benefits from the advice of accounting personnel of Corporate Management and Services Sector (CMSS). Financial information contained in the ministerial statements and elsewhere in the Public Accounts of Canada is consistent with that in these financial statements, unless indicated otherwise.
CMSS develops and disseminates financial management and accounting policies and issues specific directives, which maintains standards of accounting and financial management. Transactions are executed in accordance with prescribed regulations, within parliamentary authorities and are properly recorded to maintain accountability of Government funds and safeguard the Fund's assets. Financial management and internal control systems are maintained at appropriate costs and are augmented by the maintenance of internal audit programs. Management also seeks to assure the objectivity and integrity of data in its financial statements. This is accomplished by a careful selection, training and development of qualified staff, organizational arrangements that provide appropriate divisions of responsibility and communication 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, an external auditor has examined the financial data contained in these financial statements. Its role is to express an independent opinion as to whether the Fund's financial statements, considered in their entirety, present fairly, in conformity with stated accounting policies, the Fund's financial condition and transactions. This judgment is based on procedures described in the opinion appended to these financial statements.
Approved by:
Marc Bélisle, CPA, CA
Corporate Management and Services Sector
Deputy Chief Financial Officer
Kami Ramcharan, CPA, CMA
Assistant Deputy Minister,
Corporate Management and Services Sector
Chief Financial Officer
May 30, 2016
Ottawa, 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 authority provided (used).
(in thousands of dollars)
| 2016 | 2015 | |||
|---|---|---|---|---|
| Estimates | Actual | Estimates | Actual | |
| Net results | 100 | 262 | 100 | (negative 39) |
| Item not requiring use of funds | ||||
| Amortization of capital assets | – | – | – | 29 |
| Operating source (use) of funds | 100 | 262 | 100 | (negative 10) |
| Items requiring use of funds | ||||
| Net other assets (liabilities) | – | 209 | – | (negative 438) |
| Transfer of the transition payments for implementing salary payments in arrears | – | – | – | (negative 20) |
| Authority provided (used) | 100 | 471 | 100 | (negative 468) |
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 provided 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 account | 2,520 | 1,347 |
| Payables at year-end charged against the appropriation account after March 31 | (negative 682) | (negative 129) |
| Amounts credited to the appropriation account after March 31 | – | 149 |
| Net authority provided, end of year | 1,838 | 1,367 |
| Authority limit | 5,000 | 5,000 |
| Unused authority carried forward | 6,838 | 6,367 |
Independent auditor's report
To the Assistant Deputy Minister and Chief Financial Officer, Natural Resources Canada
We have audited the accompanying financial statements of the Geomatics Canada Revolving Fund, which comprise the statement of financial position as at March 31, 2016, and the statements of operations and net assets (liabilities), 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 Policy on 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 control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's 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 control. 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 Geomatics Canada Revolving Fund as at March 31, 2016 and the results of its operations and 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 Geomatics Canada 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 Natural Resources Canada and the Treasury Board of Canada and should not be used by parties other than Natural Resources Canada or the Treasury Board of Canada.
PricewaterhouseCoopers LLP
Chartered Professional Accountants,
Licensed Public Accountants
May 30, 2016
Ottawa, Canada
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: assets and liabilities, both displaying totals. Current item descriptions are grouped together for assets and for liabilities, both displaying subtotals. Subtotals are displayed for capital assets net of accumulated amortization.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Assets | ||
| Financial assets | ||
| Accounts receivable | ||
| Government of Canada | – | 755 |
| Outside parties (Note 3) | 2 | 53 |
| Inventory (Note 4) | 24 | 15 |
| Total | 26 | 823 |
| Non-financial assets | ||
| Prepaid expenses | 15 | – |
| Tangible capital assets (Note 5) | ||
| At cost | 2,868 | 2,868 |
| Accumulated amortization | (negative 2,868) | (negative 2,868) |
| Total | 41 | 823 |
| Liabilities and net assets (liabilities) | ||
| Current | ||
| Accounts payable and accrued liabilities | ||
| Government of Canada | 324 | 418 |
| Outside parties | 367 | 128 |
| Vacation pay | 32 | 13 |
| Subtotal | 723 | 559 |
| Long-term | ||
| Obligation for employee future benefits | 35 | 70 |
| Total | 758 | 629 |
| Net assets (liabilities) (Note 6) | (negative 717) | 194 |
| Total | 41 | 823 |
Statement of operations and net assets (liabilities) for the year ended March 31
Table summary
The table presents on a comparative basis the statement of operations and net assets (liabilities). It consists of three columns: item descriptions, current year and previous year. Item descriptions for revenues and expenses are grouped together, each displaying subtotals. Subtotals for revenues and expenses are displayed. Net of total expenses are displayed at net results and totals are displayed at net liabilities end of year.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Revenues | ||
| Services | 2,494 | 1,977 |
| Products | 880 | 566 |
| Subtotal | 3,374 | 2,543 |
| Expenses | ||
| Professional and special services | 1,440 | 1,459 |
| Salaries and employee benefits | 1,049 | 636 |
| Utilities, materials and supplies | 393 | 31 |
| Corporate and sector services | 125 | 403 |
| Repairs and maintenance | 52 | – |
| Rentals | 26 | 15 |
| Transportation and communication | 25 | 1 |
| Other expenses | 1 | 3 |
| Provision for employee future benefits | 1 | 2 |
| Amortization of tangible capital assets | – | 29 |
| Provision for inventory obsolescence | – | 3 |
| Subtotal | 3,112 | 2,582 |
| Net results | 262 | (negative 39) |
| Net assets (liabilities), beginning of year | 194 | 157 |
| Transfer of the transition payments for implementing salary payments in arrears (Note 9) | – | (negative 20) |
| Net financial resources provided (used) and change in the accumulated net charge against the Fund's authority during the year | (negative 1,173) | 96 |
| Net assets (liabilities), end of year | (negative 717) | 194 |
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 together for the operating activities displaying subtotals. Subtotals are displayed at net financial resources provided (used) and change in the accumulated net charge against the Fund's authority account during the year. Totals are displayed at accumulated net charge against the Fund's authority account end of year.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Operating activities | ||
| Net results from continuing operations | 262 | (negative 39) |
| Items not affecting use of cash | ||
| Amortization of tangible capital assets | – | 29 |
| Subtotal | 262 | (negative 10) |
| Transition payments for implementing salary payments in arrears | – | (negative 20) |
| Variations in the statement of financial position | ||
| Decrease in accounts receivable | 806 | 23 |
| Decrease (increase) in inventory | (negative 9) | 3 |
| Decrease (increase) in prepaid expenses | (negative 15) | 20 |
| Increase (decrease) in accounts payable and accrued liabilities | 145 | (negative 114) |
| Increase in vacation pay | 19 | – |
| Increase (decrease) in obligation for future employee benefits | (negative 35) | 2 |
| Net financial resources used by operating activities | 1,173 | (negative 96) |
| Net financial resources provided (used) and change in the accumulated net charge against the Fund's authority account, during the year | 1,173 | (negative 96) |
| Accumulated net charge against the Fund's authority account, beginning of year | 1,347 | 1,443 |
| Accumulated net charge against the Fund's authority account, end of year | 2,520 | 1,347 |
Notes to the financial statements for the year ended March 31, 2016
1. Authority and purpose
The Geomatics Canada Revolving Fund (the Fund) was originally established under Appropriation Act No 3 1993–1994 as the "Surveys, Mapping and Remote Sensing Sector Revolving Fund" and approval was conditional on specified conditions. The purpose of the Fund was to shift the costs of offering goods and services from taxpayers to those specific users who directly benefit from them. Subsequently, on December 8, 1994, the "Surveys, Mapping and Remote Sensing Sector Revolving Fund" was renamed the "Geomatics Canada Revolving Fund". Having met its specified conditions, permanent continuing authority for the Fund was obtained from and registered with the Treasury Board of Canada on February 9, 1995.
The Fund has received a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for working capital, capital acquisitions and temporary financing of accumulated operating deficits, the total of which at any time is not to exceed $5,000,000.
The Funds mandate is to produce geomatics products, services, and expertise that can be exploited commercially. Revenue-generating activities further build on this work to produce saleable products or services for specific clients in the federal government, Canadian industry, Canadian public, provinces, territories, and other countries.
2. Significant accounting policies
a. Basis of accounting
The financial statements have been prepared in accordance with the significant accounting policies issued by the Treasury Board of Canada Secretariat and the reporting requirements for revolving funds described by the Receiver General for Canada. The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles because services received without charge from other government departments and agencies are not reported as expenses and the obligation for employee future benefits is based on management's best estimate rather than actuarial valuations.
b. Use of estimates
The preparation of 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 revenues and expenses during the reporting period. The most significant estimates used in the preparation of the financial statements are accrued liabilities, the estimated useful lives of tangible capital assets, the allowance for doubtful accounts, the provision for inventory obsolescence, the allocation of corporate and sector service costs to the Fund and the estimates related to the obligation for employee future benefits. Actual results could differ from these estimates. These estimates are reviewed annually and as adjustments become necessary, they are recorded in the financial statements in the period in which they become known.
c. Revenues
Revenues are recognized when products are sold or services rendered.
d. Expenses
Unless otherwise disclosed, expenses are recorded in the period they are incurred. Internal service costs of Natural Resources Canada incurred on behalf of the Fund are recorded in these financial statements as corporate and sector service costs. Occupancy costs that were disclosed separately in the prior year have been reclassified to corporate and sector service costs in the current fiscal year.
e. Accounts receivable
Accounts receivable are stated at amounts expected to be ultimately realized; a provision is made for receivables when a recovery is considered uncertain.
f. Inventory
The inventory of maps is valued at the lower of cost or net realizable value, with cost being determined using the weighted average cost of each title.
g. Tangible capital assets
Tangible capital assets purchased by the Fund since April 1, 1994 are recorded at cost. These assets are amortized on a straight-line basis over their estimated useful lives, commencing with the month subsequent to acquisition. The estimated useful lives of these assets are as follows:
Table summary
The table presents capital assets and consists of 2 columns: the asset categories with respective amortization periods.
| Computer equipment | 2 to 5 years |
|---|---|
| Furniture | 10 years |
| Mechanical equipment | 10 years |
| Office equipment | 5 years |
| Printing equipment | 8 years |
| Scientific equipment | 10 years |
h. Employee future benefits
Pension benefits
The Public Service Superannuation Act and the Supplementary Retirement Benefits Act cover employees of Natural Resources Canada whose salaries and other benefits are paid by the Fund. The Government's portion of the pension cost is included in the employee benefits expenses assessed against the Fund. Actual pension payments are made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts. The Fund is not required under present legislation to make contributions with respect to actuarial deficiencies of the Public Service Superannuation Account and/or with respect to charges to the Consolidated Revenue Fund for the indexation of payments under the Supplementary Retirement Benefits Act.
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Severance benefits
Employees of the Fund are entitled to severance benefits, calculated based on salary levels in effect at the time of termination as provided for under collective agreements and conditions of employment. The costs for benefits earned, as these accrue to employees, are recorded in the accounts.
i. Vacation pay
Vacation pay is expensed as the benefits accrue to employees under their respective terms of employment.
j. 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. The amount of accumulated sick leave entitlements which will become payable in future years cannot reasonably be determined and accordingly have not been recorded in the accompanying financial statements. Payments of sick leave benefits are expensed as incurred and no amount has been accrued in these financial statements.
3. Accounts receivable
Accounts receivables with outside parties are as follows.
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 receivables net of allowance for doubtful accounts.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Accounts receivable with outside parties | 39 | 94 |
| Less: allowance for doubtful accounts | (negative 37) | (negative 41) |
| Total | 2 | 53 |
4. Inventory
Table summary
The table presents on a comparative basis the changes in non-cash working capital items for which the total is reported in the statement of cash flow. It consists of three columns: item descriptions, current year and previous year. Totals are displayed on the last row at total.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Topographic maps | 312 | 309 |
| Geographic maps | 24 | 19 |
| Subtotal | 336 | 328 |
| Less: provision for inventory obsolescence | (negative 312) | (negative 313) |
| Total | 24 | 15 |
5. Tangible capital assets
Table summary
The table presents capital assets (above) and accumulated amortization (below), both displaying totals. The capital asset section of the table consists of four columns (item descriptions, balance at beginning of year, acquisitions and balance at end of year) and the accumulated amortization section of the table consists of four columns (item descriptions, balance at beginning of year, disposals and balance at end of year).
(in thousands of dollars)
| Cost | Balance beginning of year | Acquisitions | Balance end of year |
|---|---|---|---|
| Computer equipment | 1,186 | – | 1,186 |
| Furniture | 10 | – | 10 |
| Mechanical equipment | 398 | – | 398 |
| Office equipment | 5 | – | 5 |
| Printing equipment | 988 | – | 988 |
| Scientific equipment | 281 | – | 281 |
| Total | 2,868 | – | 2,868 |
| Accumulated amortization | Balance beginning of year | Amortization | Balance end of year |
| Computer equipment | 1,186 | – | 1,186 |
| Furniture | 10 | – | 10 |
| Mechanical equipment | 398 | – | 398 |
| Office equipment | 5 | – | 5 |
| Printing equipment | 988 | – | 988 |
| Scientific equipment | 281 | – | 281 |
| Total | 2,868 | – | 2,868 |
6. Net assets (liabilities)
The accumulated net charge against the Fund's authority is the non-lapsing authority amount that has been used since the inception of the Fund.
The accumulated surplus is an accumulation of each year's surpluses and deficits including the absorption of the opening net assets upon establishment of the Fund.
Contributed capital represents the value of capital assets financed from capital contributions at the inception of the Fund.
Table summary
The table presents on a comparative basis the net assets (liabilities). It consists of three columns: item descriptions, current year and previous year. Totals are displayed at net assets (liabilities).
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Contributed capital | 1,438 | 1,438 |
| Accumulated net charge against the Fund's authority | (negative 2,520) | (negative 1,347) |
| Transfer of the transition payments for implementing salary payments in arrears | (negative 20) | (negative 20) |
| Accumulated surplus | 385 | 123 |
| Net assets (liabilities) | (negative 717) | 194 |
7. Contingencies
In the normal course of its operations, the Fund 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, there were no claims outstanding against the Fund.
8. Related party transactions
Through common ownership, the Geomatics Canada Revolving Fund is related to all Government of Canada departments, agencies and Crown corporations. The Fund enters into transactions with such entities in the normal course of business which have been recorded at the exchange amount.
9. 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 processes. 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 Works and Government Services Canada, who is responsible for the administration of the Government pay system.
10. Comparative figures
Comparative figures have been reclassified to conform to the current year's presentation.
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