Predrafted Letter of representation for 2016–2017

June 14, 2017

Letter of representation

We are providing this letter to the Deputy Receiver General for Canada and to the Auditor General of Canada on behalf of the signatories of the consolidated financial statements of the Government of Canada - the Secretary of the Treasury Board of Canada, the Deputy Minister of Finance, the Deputy Receiver General for Canada and the Comptroller General of Canada in connection with the audit by the Auditor General of Canada of transactions and financial information for inclusion in the Public Accounts of Canada and in the audited consolidated financial statements of the Government of Canada.

We are responsible for the proper recording of financial information, and for the proper reporting of that information for inclusion in the Public Accounts of Canada and in the audited consolidated financial statements of the Government of Canada included therein, for the year ended March 31, 2017.

Certain representations in this letter are described as being limited to matters that are material. An item is considered material, regardless of its monetary value, if it is probable that its omission from or misstatement in the Public Accounts of Canada and in the audited consolidated financial statements of the Government of Canada would influence the decision of a reasonable person relying on the Public Accounts of Canada and on the audited consolidated financial statements of the Government of Canada.

[Enter the complete legal name of your organization in this space], hereinafter referred to as the reporting organization, we make the following representations to the best of our knowledge and belief, in respect to:

1. All financial transactions of the reporting organization have been accurately reported to the Deputy Receiver General for recording in the accounts of Canada on forms CC-1 through CC-8 and CC-10^{Footnote 3} (and other plates in accordance with Receiver General Manual (RGM) Chapter 15, "Public Accounts Instructions"^Footnote 4) as per RGM Chapter 18, "Reporting instructions for Crown corporations and other reporting entities"
2. The reporting organization has maintained complete, proper, and accurate books of accounts and records, from which complete and accurate financial statements and supplementary reports and CC forms (and other plates, if applicable), required for the Public Accounts of Canada, have been prepared. There are no material transactions during the year that have not been properly reflected in the accounts. We have appropriately reconciled our books and records (e.g. general ledger accounts) underlying the financial results to their related supporting information (e.g. sub ledger or third party data). (We are a corporation with Section 33 authority under the Financial Administration Act (FAA), and further declare that all accounts representing transactions recorded in the Consolidated Revenue Fund (CRF) are reflected correctly and have been reconciled to those of the corporation^{Footnote 4}.)
3. The reporting organization has maintained disclosure controls and procedures to provide reasonable assurance that material information relating to the reporting organization, including its consolidated subsidiaries, is made known to us by others within those entities.
4. The reporting organization has designed, implemented and maintained internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial information for inclusion in the Public Accounts of Canada and in the audited consolidated financial statements of the Government of Canada. In addition, management has designed controls and procedures to provide reasonable assurance that material information relating to the reporting organization included in the CC forms is complete and accurate. We have disclosed to you all deficiencies in the operations of disclosure controls and procedures and internal control over financial reporting that we are aware of as of March 31, 2017.
5. In the recording and reporting of financial information to be included in the accounts of Canada, the Public Accounts of Canada and other monthly and quarterly consolidated financial statements, the reporting organization has complied with:
   
   1. RGM Chapter 18, significant accounting policies of the Government of Canada, if appropriate, as well as any other Treasury Board requirements (i.e. directives, circulars and regulations)
   2. the Financial Administration Act
   3. all other legislation affecting the reporting organization (and accounts in the CRF^{Footnote 4}).
   4. the reporting organization's financial statements have been prepared in accordance with [include your reporting organizations financial reporting framework] (except for those accounts maintained in the CRF, for which all relevant accounting policies of the Government of Canada have been applied ^{Footnote 4})
   5. the consolidated Crown corporations and other entities that have adopted International Financial Reporting Standards (IFRS), have presented the information on the Crown corporations (CC) forms (and other plates, if applicable) in accordance with Canadian Public Sector Accounting Standards (PSAS) with the exception of those accounts and balances specifically excluded from this requirement as noted in RGM Chapter 18 ^{Footnote 5}
6. All contractual arrangements entered into by the reporting organization with third parties have been properly reflected in the accounting records and/or, where material (or potentially material) to the financial information for inclusion in the Public Accounts of Canada and in the audited consolidated financial statements of the Government of Canada, have been disclosed to you. We have complied with all aspects of contractual agreements that could have a material effect on the financial information in the event of non-compliance.
7. Liabilities for remediation of contaminated sites were recognized and disclosed in accordance with [include your reporting organization's financial reporting framework]. We believe that such estimates are reasonable based on the available information. Remediation liabilities have been adequately reported as required by RGM Chapter 18, subsection 18.4.2.1.
   
   Obligations associated with future asset restoration have been estimated and recorded.
8. All known actual or possible litigation and claims have been disclosed or have been reported to the Deputy Receiver General on the appropriate CC forms (and Plates I-11 and I-12, if applicable^{Footnote 4}) for disclosure in the Public Accounts of Canada. The reporting organization has no knowledge of any other lawsuits, tax claims or pending litigation, including possible claims, of any consequence or of any other contingent liabilities of whatever nature. We believe that the amounts recorded reflect management's best estimates and that they will likely result in a liability.
9. Letters of comfort to financial institutions from the reporting organization have not been issued nor, to the best of our knowledge and belief, has the Minister for the reporting organization issued such letters. Nor have any such letters been in force at any time during the year or during the period to June 14, 2017.
10. All obligations related to capital lease and contractual obligations as well as details of borrowing transactions have been reported to the Deputy Receiver General on the appropriate CC forms for disclosure in the Public Accounts of Canada in accordance with RGM Chapter 18.
    
    
    Note

    Representation Numbers 1 to 10 are mandatory for all reporting organizations.

11. The reporting organization has submitted to the Deputy Receiver General details of the insurance funds/provisions, including all underwriting statistics, results of operations, and supplementary information as required, on form CC-10.^{Footnote 3}
12. The reporting organization has made available to the external auditor all financial records and related data, summations of meetings, and minute books which contain complete and authentic minutes of all meetings of the management committee and internal audit committee and [specify other management level committees as appropriate ] applicable to the period April 1, 2016 to June 14, 2017 (or date of Separate Opinion Audit report if no audit work was performed by the external auditor on the CC forms). The most recent meetings of these committees for the said period were held on  and  respectively.
13. The books and records properly reflect and record all transactions affecting cash funds, and bank accounts of the reporting organization.
14. Receivables represent valid claims against debtors for transactions arising on or before March 31, 2017 and have been appropriately reduced to their estimated net realizable value. All uncollectible accounts have been properly disclosed and deletions properly authorized. The reporting organization has taken appropriate action to collect all monies owed to the organization (and Her Majesty in Right of Canada in which latter case, monies collected have been promptly deposited to the credit of the Receiver General for Canada^{Footnote 4}).
15. Loans receivable represent bona fide claims against debtors as at March 31, 2017. These loans are subject to the ordinary terms of credit of the reporting organization. An allowance for credit losses has been made where appropriate.
16. The reporting organization (and Her Majesty in Right of Canada^{Footnote 4}) has satisfactory title to all recorded assets, essential records have been properly maintained and the rules and procedures applied are sufficient to safeguard and control them. In particular:
    
    1. inventories are valued at cost and cost has been determined on a basis consistent with the prior year. Inventories which are slow moving, obsolete, or unusable, or which otherwise no longer have service potential, are valued at the lower of cost or net realizable value. Items for which the costs are not readily available have been valued using management's best estimate of original cost based on available information.
    2. records respecting tangible capital assets for which the reporting organization is responsible are accurate and complete, and all acquisitions and disposals of tangible capital assets during the year have been properly authorized.
    3. all charges to tangible capital assets and additions under capital leases during the year represent actual additions and no expenditures of a capital nature have been charged to expense during the year.
    4. tangible capital assets are appropriately recorded at cost, based on the best information available.
    5. book values of significant tangible capital assets sold, destroyed, abandoned, or otherwise disposed of, have been eliminated from the accounts.
    6. R choose one of the following:

       [there have been no events or changes in circumstances that indicate that the carrying values of tangible capital assets are not recoverable]
       or
       [during the year, we noted conditions indicating that a tangible capital asset no longer contributed to [Entity]’s ability to provide goods and services, or that the value of the future economic benefits associated with the tangible capital asset was less than its net book value. Accordingly, the cost of the tangible capital asset was reduced by $[amount] to reflect the decline in the asset’s value, and the resulting write-down has been recorded as an expense in the year, in accordance with PSAS]

    7. tangible capital assets with a limited life are being amortized over management's estimation of their useful lives in a systematic and rational manner or otherwise written off as a charge to expense.
    8. amortization methods and estimates of useful lives of the remaining unamortized portion of tangible capital assets have been reviewed on a regular basis and revised as appropriate.
    9. prepaid expenses represent amounts paid for services to be rendered in future periods.
17. Inventory quantities at March 31, 2017 were determined from the reporting organization's perpetual inventory records, which have been adjusted on the basis of physical inventories taken by competent employees at various times during the year. The inventory balances do not include goods on consignment from others.
18. There were no liens or encumbrances on the reporting entity's assets or assets pledged as collateral.
19. We have recorded or disclosed, as appropriate, all liabilities and provisions on the appropriate CC forms.
20. Pension and other employee future benefit costs and obligations and the related assets have been measured, accounted for and disclosed on the appropriate CC forms in accordance with RGM Chapter 18 and represent management's best estimate of the respective liabilities and expenses of the pension and other employee future benefits.
    
    More specifically:
    
    1. all pension and other employee future benefits of the reporting organization and the provisions of each plan have been fully disclosed to you and have been actuarially valued or estimated as applicable.
    2. we have adequately considered the qualifications of the actuary. We did not give or cause any instructions to be given to the actuary with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the actuary.
    3. the details of all plan amendments up to March 31, 2017 have also been identified
    4. the source data used in the preparation of the actuarial present value of accrued pension benefits attributed to services rendered up to March 31, 2017 is complete and accurate.
    5. choose the representation that applies to your organization:
       
       For enterprise Crown corporations: The actuarial obligations for pension and other future benefits at March 31, 2017 have been determined in accordance with IFRS.
       
       For consolidated Crown corporations and other entities that adopted PSAS: The actuarial obligations for pension and other future benefits at March 31, 2017 have been determined in accordance with PSAS.
       
       For consolidated Crown corporations and other entities that adopted IFRS: The actuarial obligations for funded pension plans reported in the CC forms at March 31, 2017 have been determined in accordance with PSAS.
       
       The actuarial obligations for unfunded pension plans and other employee future benefits reported in the CC forms at March 31, 2017 have been determined in accordance with [include the appropriate financial reporting framework].
    6. all assumptions used in the determination of the actuarial present value of accrued pension benefits attributed to services rendered up to March 31, 2017 are our best estimate of the most likely set of conditions affecting future events. These assumptions are appropriate, internally consistent, and are consistent with the asset valuation method.
    7. the assumptions included in the actuarial valuation are those that management instructed [name actuary] to use in computing amounts to be used by management in determining benefits costs and obligations and in making required disclosures in the [consolidated] financial statements, in accordance with RGM Chapter 18.
    8. the actuarial valuations for accounting purposes incorporate management's best estimates. The actuarial assumptions and methods used to measure obligations and costs for pensions and other employee future benefits are appropriate in the circumstances.
    9. in arriving at these assumptions, management has obtained advice of [consulting actuaries who assisted in reaching best estimates], but has retained the final responsibility for them.
    10. the extrapolation of the actuarial present value of accrued pension benefits to March 31, 2017 from the date of the most recent actuarial valuations at March 31, 20XX has been properly prepared using source data which is complete and accurate. All assumptions used in the preparation of the extrapolation are consistent with the assumptions used in the preparation of such valuations, and events occurring in the extrapolation period that materially affect the actuarial present value of accrued pension benefits attributed to services rendered up to March 31, 2017 have been properly reflected in the determination of those accrued benefits.
    11. no events have occurred subsequent to March 31, 2017 that materially affect the amount of the actuarial present value of accrued pension benefits attributed to services rendered up to March 31, 2017.
    12. all plan assets have been disclosed on the appropriate CC forms.
    13. the reporting organization has good title to such assets.
    14. the pension plan assets are valued in accordance with [include the appropriate financial reporting framework].
    15. choose the representation that applies to your organization:
        
        For enterprise Crown corporations: Adjustments arising from changes in assumptions and experience gains and losses and adjustments arising from plan amendments have been recognized in accordance with IFRS.
        
        For consolidated Crown corporations and other entities that adopted PSAS: Adjustments arising from changes in assumptions and experience gains and losses and adjustments arising from plan amendments have been recognized in accordance with PSAS.
        
        For consolidated Crown corporations and other entities that adopted IFRS: Adjustments arising from changes in assumptions and experience gains and losses and adjustments arising from plan amendments have been recognized in accordance with (PSAS or the requirements of RGM Chapter 18).
21. All material amounts of deferred revenue meet the definition of a liability and were appropriately recorded in the books and records.
22. We have no plans or intentions that may materially alter the carrying value or classification of assets and liabilities reported to you on the CC forms (e.g. to dispose of the business or to cease operations).
23. All income earned for the year on investments has been recorded in the accounts.
24. All expenses for the year have been recorded in the accounts.
25. All non-monetary transactions have been recorded and disclosed in the financial information in accordance with [include the appropriate financial reporting framework].
26. Since March 31, 2017 (or date of last audit) to the date of this letter, there have not been any events, new or amended legislation, regulations or directives, other than those reflected in the financial statements or notes thereto, which should be reflected or disclosed in the audited consolidated financial statements of the Government of Canada or supplementary reports of the Government of Canada.
    
    In addition, we acknowledge our responsibility to refer any subsequent events of substance identified after the date of this letter to Treasury Board Secretariat for guidance and to the Receiver General for submitting an updated Letter of representation until the completion of the consolidated financial statements of the Government of Canada expected to occur on September 6, 2017 as well as up to the date they are tabled in the House of Commons.
27. The reporting organization is not aware of any information that was not disclosed to the Deputy Receiver General and to the external auditor, which could affect the consolidated financial statements of the Government of Canada or the Auditor General's opinion on them.
28. The reporting organization understands that the prevention and detection of error and fraud are primarily its responsibility and may not necessarily be detected by the external auditor, even if they are material in amount. The reporting organization also acknowledges its responsibility to design, implement and maintain internal controls that are designed to prevent and detect fraud and error. Furthermore, we have disclosed to the Deputy Receiver General and to the Auditor General the results of our assessment of the risk that the financial records may be materially misstated as a result of fraud, and have determined such risk to be (low, moderate, high).

    R Choose one of the following: [The reporting organization has disclosed to you all information of which we are aware relating to fraud or suspected fraud and involving management, employees who have significant roles in internal control or others, where the fraud could have a significant effect on the financial information of the reporting organization.] or [The reporting organization has no knowledge of any frauds or suspected frauds involving management, employees who have significant roles in internal control or others where the fraud could have a non-trivial effect on the financial records of the organization.]

    R Choose one of the following: [The reporting organization has also disclosed to you all information relating to any allegations of fraud or suspected fraud affecting the financial records that was communicated by employees, former employees, analysts, regulators or others.] or [The reporting organization has no knowledge of any allegations of fraud or suspected fraud affecting the financial records that was communicated by employees, former employees, analysts, regulators or others.]

29. The reporting organization has disclosed to the Deputy Receiver General and to the Auditor General all known or suspected instances of non-compliance with laws and regulations whose effect should be considered when preparing financial information.
30. The reporting organization is not aware of one or more of the following:
    
    1. any illegal or possibly illegal acts, including those committed by directors, officers or employees acting on the reporting organization's behalf. (We have identified and disclosed to you all facts related to illegal or possibly illegal acts.)
    2. any conflicts of interest involving (name of organization) where it has, directly or indirectly, entered into any purchase, sale or any other transaction with a member of Parliament, a member of the Board, a member of senior management, a manager, or with an organization in which one of these persons had a direct or indirect interest
    3. bribes, or improper benefits rendered or accepted
    4. influences applied improperly
    5. business inconsistent with the Corporation's charter
    6. loss of money or property as a result of defalcation, fraudulent acts or omission of corporate officer
    7. any irregularities involving management or employees who have significant roles in the system of internal accounting controls or any irregularities involving other employees that could have a material effect on the financial statements
    8. any communications from regulatory agencies concerning non-compliance with laws or regulations which could have a material effect on the information for inclusion in the Public Accounts of Canada [state exceptions, if any]
31. Choose one of the following: [There have been no related party transactions outside the reporting organization's normal course of business.] or [All known related party transactions outside the reporting organization's normal course of business have been properly recorded for inclusion in the Public Accounts of Canada.]
32. Choose one of the following: [No guarantees have been made by the reporting organization, nor have any guarantees been in force at any time during the year or subsequently.] or [All guarantees potentially having a material impact on the financial statements have been recorded and disclosed as appropriate in the CC forms as provided to you for audit.]
    Note

    Representation Numbers 12 to 32 are mandatory for all reporting organizations.

    Representation Numbers 33, 34 and 35, apply only to those Crown corporations exercising authority under Section 33 of the FAA (refer to Appendix B of RGM Chapter 17).

33. The reporting organization has adhered to all legislative requirements respecting the entering into of financial transactions, including those pertaining to accounts payable at year end, and all such transactions have been accurately recorded in accordance with, and as appropriate, within the authorized limits of Appropriation Acts and other governing statutes.
34. All specified purpose accounts, other liabilities and unmatured debt:
    
    1. originated under the authority of appropriate legislation
    2. represent financial obligations to organizations and individuals outside the Government of Canada as an accounting entity
35. All unpaid accounts relating to annually lapsing and non-lapsing budgetary appropriations and annually lapsing non-budgetary appropriations on which Parliament has imposed an annual ceiling have been recorded as payables.
36. The reporting organization has engaged in activities involving derivative financial instruments during the year. Management's objectives with respect to derivative financial instruments are: [list management objectives here]. The financial records reflect all transactions involving derivative financial instruments, all embedded derivative financial instruments have been identified and the assumptions and methodologies used in the valuation models applied to derivative financial instruments are reasonable. The terms of transactions involving derivative financial instruments include: [list terms here]. All transactions involving derivative financial instruments have been conducted at arm's length and at fair values. The reporting organization has not entered into any side agreements associated with any derivative financial instruments (except for, [state exceptions, if any]). The reporting organization has not entered into any written options (except for, [state exceptions, if any]). The reporting organization has complied with the documentation requirements required under [include the appropriate financial reporting framework] for hedge accounting, if applicable.
37. The reporting organization is responsible for significant estimates and judgments related to the financial information for inclusion in the Public Accounts of Canada and in the audited consolidated financial statements of the Government of Canada. Significant estimates and judgments and their underlying assumptions, methods, procedures, and the source and reliability of supporting data are reasonable, based on applicable requirements of [include the appropriate financial reporting framework], and appropriately disclosed in the CC Forms. The procedures and methods used in developing assumptions, estimates, and judgments are appropriate and have been consistently applied in the periods presented.
38. For recorded or disclosed amounts in the financial information that incorporate fair value measurements, we confirm that:
    
    1. the measurement methods are appropriate and consistently applied
    2. the significant assumptions used in determining fair value measurements represent our best estimates, are reasonable and have been consistently applied
    3. no subsequent event requires adjustment to the accounting estimates and disclosures included in the financial information
    4. the significant assumptions used in determining fair value measurements are consistent with the reporting organization's planned courses of action. We have no plans or intentions that have not been disclosed to you, which may materially affect the recorded or disclosed fair values of assets or liabilities
    5. disclosures of significant assumptions are complete and appropriate under the stated accounting policies of the reporting organization. Significant estimates and measurement uncertainties known to management have been appropriately disclosed
39. Complete and appropriate disclosures required related to fair values have been reported to the Deputy Receiver General on the appropriate CC forms.
    
    
    Note

    Representation Numbers 36 to 39 are mandatory for all reporting organizations.

On behalf of the reporting organization referred to on the first page.

[Please enter particulars of these situations here.]