Geomatics Canada Revolving Fund
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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 Treasury Board Directive on Charging and Special Financial 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 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 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:
Grace Chennette, CPA, CMA
Corporate Management and Services Sector
Deputy Chief Financial Officer
Grace Chennette, CPA, CMA
Corporate Management and Services Sector
Assistant Deputy Minister and
Chief Financial Officer
June 10, 2019
Ottawa, Canada
Statement of authority provided (used) (unaudited) for the year ended March 31
(in thousands of dollars)
| 2019 | 2018 | |||
|---|---|---|---|---|
| EstimatesLink to Table note 1 | Actual | EstimatesLink to Table note 1 | Actual | |
| Net results | 100 | (negative 810) | 100 | 320 |
| Operating source of funds | 100 | (negative 810) | 100 | 320 |
| Items requiring use of funds | ||||
| Net other assets (liabilities) | – | (negative 647) | – | (negative 138) |
| Authority provided (used) | 100 | (negative 1,457) | 100 | 182 |
Reconciliation of unused authority (unaudited) as at March 31
(in thousands of dollars)
| 2019 | 2018 | |
|---|---|---|
| Debit balance in the accumulated net charge against the Fund's authority account | 1,892 | 3,559 |
| Payables at year-end charged against the appropriation account after March 31 | (negative 719) | (negative 929) |
| Net authority provided, end of year | 1,173 | 2,630 |
| Authority limit | 5,000 | 5,000 |
| Unused authority carried forward | 6,173 | 7,630 |
Independent auditor's report
To the Assistant Deputy Minister and Chief Financial Officer, Natural Resources Canada
Our opinion
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Geomatics Canada Revolving Fund (the Fund) as at March 31, 2019 and its financial performance and its cash flows for the year then ended in accordance with Section 1 of the Receiver General for Canada Instructions for Volume III of Public Accounts of Canada.
What we have audited
The Fund's financial statements comprise:
- the statement of financial position as at March 31, 2019
- the statement of operations and net liabilities for the year then ended
- the statement of cash flows for the year then ended; and
- the notes to the financial statements, which comprised a summary of significant accounting policies
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Fund in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.
Emphasis of matter – basis of accounting and restriction on use
We draw attention to note 2 to the financial statements, which describes the basis of accounting. The financial statements are prepared to assist the Fund to meet the requirements of Section 1 of the Receiver General for Canada Instructions for Volume III of Public Accounts of Canada. As a result, the financial statements may not be suitable for another purpose. Our report is intended solely for the management of the Fund and should not be used by parties other than the Fund and the Treasury Board of Canada. Our opinion is not modified in respect of this matter.
Responsibilities of management and those charged with governance for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with Section 1 of the Receiver General for Canada Instructions for Volume III of Public Accounts of Canada; 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.
In preparing the financial statements, management is responsible for assessing the Fund's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Fund's financial reporting process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit 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 Fund's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Fund to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
PricewaterhouseCoopers LLP
Chartered Professional Accountants,
Licensed Public Accountants
June 11, 2019
Ottawa, Ontario
Statement of financial position as at March 31
(in thousands of dollars)
| 2019 | 2018 | |
|---|---|---|
| Assets | ||
| Financial assets | ||
| Accounts receivable (note 3) | 86 | 22 |
| Inventory | 49 | 51 |
| Subtotal | 135 | 73 |
| Non-financial assets | ||
| Prepaid expenses | 18 | 81 |
| Tangible capital assets (note 4) | 800 | 233 |
| Total | 953 | 387 |
| Liabilities | ||
| Accounts payable and accrued liabilities (note 5) | 815 | 1,024 |
| Vacation pay | 77 | 84 |
| Deferred revenue | 66 | 141 |
| Subtotal | 958 | 1,249 |
| Net liabilities (note 6) | (negative 5) | (negative 862) |
| Total | 953 | 387 |
Approved by:
Louise Métivier
Assistant Deputy Minister
Strategic Policy and Results Branch
June 10, 2019
Statement of operations and net liabilities for the year ended March 31
(in thousands of dollars)
| 2019 | 2018 | |
|---|---|---|
| Revenues | ||
| Services | 5,422 | 5,074 |
| Products | 415 | 529 |
| Subtotal | 5,837 | 5,603 |
| Expenses | ||
| Professional and special services | 3,680 | 2,115 |
| Salaries and employee benefits | 1,347 | 1,451 |
| Utilities, materials and supplies | 568 | 1,104 |
| Corporate and sector services | 481 | 404 |
| Rentals | 440 | 85 |
| Amortization of tangible capital assets | 63 | 26 |
| Transportation and communication | 25 | 29 |
| Repairs and maintenance | 25 | 57 |
| Other expenses | 18 | 10 |
| Information | – | 2 |
| Subtotal | 6,647 | 5,283 |
| Net results | (negative 810) | 320 |
| Net liabilities, beginning of year | (negative 862) | (negative 1,073) |
| Net financial resources used (provided) and change in the accumulated net charge against the Fund's authority, during the year | 1,667 | (negative 109) |
| Net liabilities, end of year | (negative 5) | (negative 862) |
Statement of cash flows for the year ended March 31
(in thousands of dollars)
| 2019 | 2018 | |
|---|---|---|
| Operating activities | ||
| Net results | (negative 810) | 320 |
| Items not requiring use of funds | ||
| Amortization of tangible capital assets (note 4) | 63 | 26 |
| Subtotal | (negative 747) | 346 |
| Variations in the statement of financial position | ||
| Decrease (increase) in accounts receivable | (negative 64) | 1 |
| Decrease (increase) in inventory | 2 | (negative 3) |
| Decrease (increase) in prepaid expenses | 63 | (negative 81) |
| Increase (decrease) in accounts payable and accrued liabilities | (negative 209) | (negative 26) |
| Increase (decrease) in vacation pay | (negative 7) | 20 |
| Increase (decrease) in deferred revenues | (negative 75) | 111 |
| Net financial resources provided by operating activities | (negative 1,037) | 368 |
| Capital investing activities | ||
| Acquisition of tangible capital assets (note 4) | (negative 630) | (negative 259) |
| Cash used in capital investing activities | (negative 630) | (negative 259) |
| Net financial resources provided (used) and change in the accumulated net charge against the Fund's authority account, during the year | (negative 1,667) | 109 |
| Accumulated net charge against the Fund's authority account, beginning of year | 3,559 | 3,450 |
| Accumulated net charge against the Fund's authority account, end of year | 1,892 | 3,559 |
Notes to the financial statements for the year ended March 31, 2019
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 Fund's 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 reporting requirements of the Receiver General for Canada for revolving funds. The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles for the public sector because:
- the net debt indicator and the statement of change in net debt are not presented in the financial statements
- expenses are reported by type in the statement of operations and net liabilities and not by function or major program
- budgeted expenses are not reported in the statement of operations
- services received without charge from other government departments are not reported as expenses
- no liability is recorded for sick leave
The significant accounting policies are as follows:
(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 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 the amount of certain accrued liabilities, the estimated useful lives of tangible capital assets, and the allowance for doubtful accounts. 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. Revenues on leases are recognized on the period to which the lease or use of property relates.
(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.
(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:
| Machinery and equipment | 5 to 10 years |
|---|---|
| Informatics hardware | 4 years |
| Computer software | 4 years |
| Other equipment | 10 years |
| Motor vehicles | 5 to 7 years |
(h) 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.
(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. Payments of sick leave benefits are expensed as incurred and no amount has been accrued in these financial statements.
3. Accounts receivable
Accounts receivables are as follows:
(in thousands of dollars)
| 2019 | 2018 | |
|---|---|---|
| Other government departments and agencies | 52 | – |
| Outside parties | 35 | 33 |
| Subtotal | 87 | 33 |
| Less: allowance for doubtful accounts on receivables from outside parties | (negative 1) | (negative 11) |
| Total | 86 | 22 |
4. Tangible capital assets
(in thousands of dollars)
| Cost | Balance beginning of year | Acquisitions | Balance end of the year | |
|---|---|---|---|---|
| Machinery and equipment | 49 | 2 | 51 | |
| Informatics hardware | 141 | 482 | 623 | |
| Computer software | – | 146 | 146 | |
| Other equipment | 38 | – | 38 | |
| Motor vehicle | 31 | – | 31 | |
| Total | 259 | 630 | 889 |
|
| Accumulated amortization | Balance beginning of year | Amortization | Balance end of the year | |
| Machinery and equipment | 1 | 9 | 10 | |
| Informatics hardware | 25 | 45 | 70 | |
| Computer software | – | 1 | 1 | |
| Other equipment | – | 4 | 4 | |
| Motor vehicle | – | 4 | 4 | |
| Total | 26 | 63 | 89 |
|
| Net book value | 2019 | 2018 | ||
| Machinery and equipment | 41 | 48 | ||
| Informatics hardware | 553 | 116 | ||
| Computer software | 145 | – | ||
| Other equipment | 34 | 38 | ||
| Motor vehicle | 27 | 31 | ||
| Total | 800 | 233 | ||
|
The dash means that the amount is 0 or is rounded to 0. | ||||
5. Accounts payable and accrued liabilities
(in thousands of dollars)
| 2019 | 2018 | |
|---|---|---|
| Other government departments and agencies | 254 | 269 |
| Outside parties | 561 | 755 |
| Total | 815 | 1,024 |
6. Net 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.
(in thousands of dollars)
| 2019 | 2018 | |
|---|---|---|
| Contributed capital | 1,438 | 1,438 |
| Accumulated net charge against the Fund's authority | (negative 1,892) | (negative 3,559) |
| Transfer of the transition payments for implementing salary payments in arrears | (negative 20) | (negative 20) |
| Accumulated surplus | 469 | 1,279 |
| Net liabilities | (negative 5) | (negative 862) |
7. Contractual rights
In some instances, the activities of the Fund involve the negotiation of contracts or agreements with outside parties or other federal government departments and agencies that result in the Fund having rights to both assets and revenues in the future. For the Fund, they principally involve contractual rights to receive lease payments. Major contractual rights that will generate revenues in the future years and that can be reasonably estimated are summarized as follows:
(in thousands of dollars)
| 2019 | |
|---|---|
| 2020 | 4,255 |
| 2021 | 869 |
| 2022 | 765 |
| 2023 | 648 |
| 2024 and thereafter | 1,620 |
| Total | 8,157 |
8. Contingent liabilities
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, 2019, there were no claims outstanding against the Fund.
9. Contractual obligations
The nature of the Fund’s activities can result in some large multi-year contracts and obligations whereby the Fund will be obligated to make future payments in order to carry out its mandate or when services are performed or goods received. Significant contractual obligations that can be reasonably estimated are summarized as follows:
(in thousands of dollars)
| 2019 | |
|---|---|
| 2020 | 1,007 |
| 2021 | 893 |
| 2022 | 893 |
| 2023 | 893 |
| 2024 and thereafter | – |
| Total | 3,686 |
10. 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.
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