Other loans, investments and advances

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Unconditionally repayable contributions

Unconditionally repayable contributions are in substance loans, and are generally made to businesses pursuant to various acts of Parliament, with various amounts outstanding.

These loans are aimed at stimulating economic development or for assistance. They bear various interest rates, some of which have concessional terms, and are repayable at various due dates with final instalments generally due within up to 10 years of initial disbursement.

Loans made on a long-term, low-interest or interest-free basis are recorded in part as expenses when the economic value of the loans is reduced due to their concessionary terms.

Missions abroad

Non-interest bearing advances have been made for interim financing of expenses at missions abroad, pending distribution to appropriations of the Department of Foreign Affairs, Trade and Development and other departments and agencies.

The total amount authorized to be outstanding at any time is $50,000,000.

Personnel posted abroad

A working capital advance account was established to finance loans and advances to employees posted abroad, including employees of other government departments and agencies, as well as medical advances to locally-engaged staff.

The total amount authorized to be outstanding at any time is $38,200,000, as last amended by Foreign Affairs and International Trade Vote L12c, Appropriation Act No. 5, 2009–2010.

The closing balance consists of loans to employees, $14,233,743; advances for medical expenses, $898,703; advances for workmen's compensation, $10,241; security and other deposits under Foreign Service Directives, $2,546,216 and, school and club debentures, $2,825,384.

The loans to employees bear interest at rates from 1% to 2% per annum. These rates are established by the Department of Finance and are repayable within 4 years, with final instalments between April 1, 2019, and March 31, 2023.

Working Capital Fund

A Working Capital Fund was established to finance temporary advances to departmental personnel within Canada and abroad for: (a) salary and benefits; (b) standing advances; and (c) travel and miscellaneous claims. The name of the account was modified in order to reflect the use of the account by National Defence.

The authorized ceiling is $120,000,000, as last amended by the Department of National Defence Vote L11b, Appropriation Act No. 4, 2001–2002.

Miscellaneous accountable advances

The closing balance reflects amounts outstanding in the hands of departments, agencies and individuals, at year end, to be expended in the following year.

Miscellaneous accountable imprest funds and standing advances

This account is operated to provide imprest funds, accountable advances and recoverable advances to departments and agencies.

The total amount authorized to be outstanding at any time is $22,000,000.

Construction of multi-purpose exhibition buildings

The remaining loan has been made to finance the construction of a multi-purpose exhibition building.

Hog Industry Loan Loss Reserve Program

Loans made by financial institutions under the Hog Industry Loan Loss Reserve Program are partially guaranteed by the Crown. Where the producers have defaulted and the lenders have carried out regular collection activities, the Crown becomes subrogated to the lender's rights against the producer in default, to the extent of an amount equal to the withdrawal from the Reserve Fund.

National Marketing Programs

Loans made by financial institutions under the Canadian Agricultural Loans Act and advances made by producer organizations under the Agricultural Marketing Programs Act are guaranteed by the Crown. Where the guarantee is honoured, the Crown becomes subrogated to the financial institution's or producer organization's rights to outstanding principal, interest and costs.

Council of Yukon First Nations—Elders

Loans were issued to the Council of Yukon First Nations to provide interim benefits to Yukon Elders pending the settlement of a future comprehensive land claim agreement. These loans were issued along with loans for comprehensive claim negotiations.

Following the Budget 2019 announcement to forgive outstanding comprehensive land claim negotiation loan debt, a Treasury Board submission to forgive the accumulated interest charged on the loans to the Council Yukon First Nations—Elders, was approved on June 17, 2019.

These interest charges were removed from the departmental books at the end of fiscal year 2020 after the funding approval via a voted Act of Parliament.

The Council of Yukon First Nations—Elders principal amount was not eligible to be forgiven under the Budget 2019 announcement. This amount is still outstanding and remains an amount owing to the Crown.

First Nations in British Columbia

Until March 31, 2018, loans were issued to First Nations in British Columbia to support their participation in the British Columbia Treaty process related to the research, development and negotiation of treaties.

Following the Budget 2019 announcement to forgive outstanding comprehensive land claim negotiation loan debt, a Treasury Board submission to forgive the comprehensive land claim negotiation loans issued to First Nations under the Loans to First Nations in British Columbia program, including applicable interests, was approved on June 17, 2019.

These loans were removed from the departmental books at the end of fiscal year 2020 after the funding approval via a voted Act of Parliament.

Inuit Loan Fund

Loans were made to individual Inuit or groups of Inuit to promote commercial activities and gainful occupations.

The total amount authorized to be outstanding at any time is $6,633,697, as last amended by the Department of Crown-Indigenous Relations and Northern Affairs Vote 37b, Appropriation Act No. 4, 1995–96.

The Department is no longer issuing these loans and only one loan is still outstanding.

Indigenous claimants

Until March 31, 2018, loans were issued to Indigenous groups to support the costs associated with their participation in comprehensive land claim negotiations.

Following the Budget 2019 announcement to forgive outstanding comprehensive land claim negotiation loan debt, a Treasury Board submission to forgive the comprehensive land claim negotiation loans issued to Indigenous groups under the Indigenous claimants program, including applicable interests, was approved on June 17, 2019.

These loans were removed from the departmental books at the end of fiscal year 2020 after the funding approval via a voted Act of Parliament.

Stoney Band Perpetual Loan

In 1946, loans were made to Stoney Band of Alberta (Band) for land acquisition beyond their treaty entitlement.

A loan not exceeding $500,000 was made to purchase additional land. Under the terms of the agreement, as stated in Treasury Board Minutes, P.C. 2/1437 dated April 11, 1946, the Band assigned monies accruing to them, from the rental of their water resources, to provide interest payments at the rate of 3.00% annually on the amount of the loan that had actually been expended. In the same agreement, the Band resolved that the department allots $200,000 to the Pekisko Group, and $300,000 for the additions to Morley Reserve.

Canada apprentice loans

Canada apprentice loans are administrated under the authority of Section 4 of the Apprentice Loans Act which came into effect on January 2, 2015. The Minister of Employment, Workforce Development and Disability Inclusion is authorized to enter into a loan agreement directly with any eligible apprentice. Until October 31st, 2019, the loans bear interest at either a variable rate (prime rate plus 2.5%) or a fixed rate (prime rate plus 5.0%). Following budget 2019 announcements, interest rates were changed so that as of November 1st, 2019, the loans bear interest at either a variable rate (prime rate) or a fixed rate (prime rate plus 2.0%). Apprentices are not required to pay interest on their loans while they are still in their apprenticeship program and during the 6-month grace period where interests are no longer accrued since November 1st, 2019. The typical repayment period is 10 years, but the maximum period is 15 years. Borrowers having difficulty repaying their loans may be eligible for assistance under the Repayment Assistance Plan.

The total amount of apprentice loans issued under the authority of the Apprentice Loans Act may not exceed $1.5 billion. The total amount of outstanding apprentice loans as at March 31, 2020, amounts to $270,776,436 ($237,256,170 as at March 31, 2019). During the year, no loans were written off (nil as at March 31, 2019).

Canada Student Loans Program

Since August 1, 2000, Canada Student Loans are issued under the Direct Loan Regime. Before this date, the loans were issued under the Guaranteed Loan Regime (1964–1995) or under the Risk-Shared Loan Regime (1995–2000). Under these three different regimes, no security is received from the students and until October 31st, 2019, the loans bear interest at either a variable rate (prime rate plus 2.5%) or a fixed rate (prime rate plus 5.0%). Following budget 2019 announcements, interest rates were changed so that as of November 1st, 2019, the loans bear interest at either a variable rate (prime rate) or a fixed rate (prime rate plus 2.0%). Students are not required to pay interest on their loans while they are still studying and during the 6-month grace period where interests are no longer accrued since November 1st, 2019. The typical repayment period is 10 years, but the maximum period is 15 years. Borrowers having difficulty repaying their loans may be eligible for assistance under the Repayment Assistance Plan.

The total amount of direct loans issued under the authority of the Canada Student Financial Assistance Act and outstanding risk-shared loans bought-back by the Department of Employment and Social Development may not exceed 34 billion dollars.

During the year, loans and interest receivable on these loans totalling $179,127,425 ($162,154,347 as at March 31, 2019) were written off by the Department of Employment and Social Development Vote 90b from the Appropriation Act No. 4, 2019–2020 and $25,927,956 ($22,767,767 as at March 31, 2019) were written off pursuant to Section 25(1) of the Financial Administration Act. In addition, loans and interest receivable on these loans totalling $371,074,479 ($391,261,840 as at March 31, 2019) were forgiven as per the Canada Student Financial Assistance Act and $2,041,103 ($2,856,342 as at March 31, 2019) were forgiven as per the Canada Student Loans Act.

Direct loans to students

Loans issued on or after August 1, 2000, are administered under the authority of Section 6.1 of the Canada Student Financial Assistance Act, which authorizes the Minister of Employment, Workforce Development and Disability Inclusion to enter into loan agreements directly with any qualifying student. Agreements are subject to the terms and conditions approved by the Governor in Council, on the recommendation of the Minister of Employment, Workforce Development and Disability Inclusion with the concurrence of the Minister of Finance. The total amount of outstanding direct loans as at March 31, 2020, amounts to $21,985,612,395 ($21,051,645,035 as at March 31, 2019).

Risk-shared student loans

Loans issued prior to August 1, 2000, and on or after August 1, 1995, are amounts related to student loans subrogated to the Crown under the authority of the Canada Student Financial Assistance Act. The total amount of loans outstanding as at March 31, 2020, amounts to $38,103,832 ($45,409,223 as at March 31, 2019) for loans owned by the Department of Employment and Social Development and $753,080,322 ($770,429,806 as at March 31, 2019) for loans under the current ownership of the financial institutions.

Guaranteed student loans

Loans issued prior to August 1, 1995, are amounts related to student loans subrogated to the Crown under the authority of the Canada Student Loans Act. The total amount of loans outstanding as at March 31, 2020, amounts to $57,110,074 ($66,819,810 as at March 31, 2019) for loans owned by the Department of Employment and Social Development and $1,280,357 ($1,797,936 as at March 31, 2019) for loans under the current ownership of the financial institutions.

Provincial workers' compensation boards

This account is operated under the authority of subsection 4(6)(b) and (e) of the Government Employees Compensation Act, to provide funds to enable provincial workers' compensation boards to administer claims on behalf of the Crown, and provide compensation benefits to Canadian government employees injured or ill in the course of their employment.

The total amount of advances that is authorized to be made for each provincial workers' compensation board is not to exceed three months' disbursements for compensation.

The advances are subject to the terms and conditions of agreements with provincial workers' compensation boards and are to be repaid on termination of those agreements.

Canadian Commercial Bank

Advances have been made to the Canadian Commercial Bank representing the government's participation in the support group as authorized by the Canadian Commercial Bank Financial Assistance Act. These funds represent the government's participation in the loan portfolio that was acquired from the Bank and the purchase of outstanding debentures from existing holders.

Financial Consumer Agency of Canada—Advances

Interest-bearing advances have been made to defray the cost of operation of the Agency pursuant to Section 13(1) of the Financial Consumer Agency of Canada Act.

Investments Fund from PPP Canada Inc.

Investments held by PPP Canada Inc. were assumed by the Government of Canada, following the dissolution of PPP Canada Inc. in 2018, pursuant to subsection 209.1(3) of the Jobs, Growth and Long-term Prosperity Act.

These investments include guaranteed investment certificates maturing in 2021.

The investments earned interest at rates from 1.65% to 2.06% per annum.

Canadian producers of frozen groundfish

Loans have been made to Canadian producers of frozen groundfish, canned and frozen crabmeat, and canned and frozen lobster meat, to assist in the financing of inventories.

The loans bore interest at the rate of 13% per annum, and were repayable in equal annual instalments over 7 years, with the final instalment in December 1987. These loans are deemed unrecoverable and parliamentary authority is required to write off the balance.

Haddock fishermen

Loans have been made to Nova Scotia haddock fishermen whose fishery was closed from February 1 to May 31, 1975, pursuant to an agreement under the International Agreement for the Northwest Atlantic Fisheries. The total loan authority is $1,650,000.

The loans bore interest at the rate of 8% per annum, and were repayable in equal annual instalments over 4 years, with the final instalment in 1979. These loans are deemed unrecoverable and parliamentary authority is required to write off the balance.

Support and development of trade

Pursuant to Section 23 of the Export Development Act, the Minister for International Trade, with the concurrence of the Minister of Finance, may authorize Export Development Canada (EDC) to enter into certain transactions or class of transactions where the Minister is of the opinion it is in the national interest and where EDC has advised the Minister that it will not enter into such transactions without such authorization. Funding for such transactions is provided by the Minister of Finance out of the Consolidated Revenue Fund and the transactions are administered by EDC on behalf of the Government of Canada. Collectively these transactions are known as the Canada Account. The Act allows the Canada Account to have outstanding loans and commitments to borrowers and arrangements giving rise to contingent liabilities under contracts of insurance and other agreements up to a maximum of $20 billion.

EDC's mandate is to support and develop, directly or indirectly, Canada's export trade, and Canadian capacity to engage in that trade and respond to international business opportunities. In 2014, new regulations came into force which clarify the circumstances in which EDC can provide support within Canada in fulfillment of its mandate. During the year, no Canada Account transactions were entered into in the support and development of domestic trade.

Loan transactions with longer repayment terms or low or zero interest rates are recorded in part as expenses when the economic value is reduced due to such concessionary terms.

Tables 11.4 and Table 11.6 of Section 11 of this volume present additional information on contractual obligations and guarantees that are disclosed in the notes to the audited consolidated financial statements of Section 2 of this volume.

Immigration loans

Section 88 of the Immigration and Refugee Protection Act authorizes the making of loans for the purpose of the Act.

The total amount authorized to be outstanding at any time is $126,600,000.

The terms and conditions of the loans are as follows:

1. repayable by monthly instalments over 1 to 6 years with a possible deferment of 2 years, which were bearing interest at rates from 0.76% to 9.06% per annum up until February 21, 2018;
2. repayable by monthly instalments over 3 to 8 years with a possible deferment of 2 years, non-interest bearing, for accounts created after February 21, 2018.

Indian Economic Development Guarantee Loans Program

The Indian Economic Development Guarantee Loans Program, established under Vote L53b, Appropriation Act No. 1, 1970, amended under P.C. 1977 3608, authorized the Department of Indigenous Services to guarantee loans for non-incorporated Indian businesses on a risk-sharing basis with commercial lenders because security restrictions in the Indian Act prevent the mortgage and seizure of property located on reserves. Guarantees are provided for various types of borrowers whose activities contribute to the economic development of Indians and enable them to develop long-term credit relationships with mainstream financial institutions. The guarantee level is not to exceed at any time $60,000,000, less the total amount of payments made to implement previous guarantees under that authority.

If a loan made under the Minister's guarantee goes into default, the lender has recourse to the Minister for reimbursement. In 1987, a reserve for losses of $2 million per annum was established within the department's reference levels to cover all Guarantee Loan Programs administered by the department. Simple interest, usually based on a percentage plus the prime rate, will accrue on the debt after payout. All payments, including accrued interest, remain as a debt of the client until recovered in full.

Reserve Housing Guarantee Loans Program

This program authorizes the Department of Indigenous Services to guarantee loans to individuals and Indian bands to assist in the purchase of housing on reserves because security restrictions in the Indian Act prevent the mortgage and seizure of property located on reserves. These loan guarantees enable status Indians residing on reserves, Band councils, or their delegated authorities, to secure housing loans without giving the lending institution rights to the property.

The total amount authorized to be outstanding at any time is $2.2 billion.

If a loan made under the Minister's guarantee goes into default, the lender has recourse to the Minister for reimbursement. In 1987, a reserve for losses of $2 million per annum was established within the department's reference levels to cover all Guarantee Loan Programs administered by the department. Such payments remain a debt of the First Nation to the Crown and interest is accrued and capitalized on these debts at the contract interest rate applicable at the time the loan was assigned to the Minister. Recovery of the debt is made to the extent possible, from the security used as collateral, such as land claim funds, or through repayment agreements.

Other business loans

This account records money owed to the government by borrowers upon default of loans that are subject to statutory authorities, pursuant to the Canada Small Business Financing Act. This authority provide for the payment of claims or the sharing of loan losses between lenders and the government.

Advances for the Working Capital Fund of entrepreneurs' assistance centers

Advances have been made to support the Working Capital Fund of entrepreneurs' assistance centers providing services to start-up companies, future entrepreneurs and small and medium-sized enterprises.

H.L. Holmes Fund

This account was established pursuant to paragraph 5(1)(f) of the National Research Council Act to record the residue of the estate of H.L. Holmes. Up to two thirds of the yearly net income from the fund shall be used to finance the H.L. Holmes Award on an annual basis. These awards will provide the opportunity to post-doctoral students to study at world famous graduate schools or research institutes under outstanding research persons.

Seized Property Working Capital Account

This account was established by Section 12 of the Seized Property Management Act. Expenses incurred, and advances made, to maintain and manage any seized or restrained property and other properties subject to a management order or forfeited to Her Majesty, are charged to this account. This account is credited when expenses and advances to third parties are repaid or recovered and when revenues from these properties or proceeds of their disposal are received and credited with seized cash upon forfeiture.

The total amount authorized to be outstanding at any time is $50,000,000.

Any shortfall between the proceeds from the disposition of any property forfeited to Her Majesty and the amounts that were charged to this account and that are still outstanding, is charged to a Seized Property Proceeds Account and credited to this account.

Greater Victoria Harbour Authority

The Victoria Harbour loan receivable relates to the sale of a parcel of Victoria Harbour land. A discount of $7,469 is recorded to reflect the concessionary nature of the loan.

The loan bears interest at the rate of 4.9% per annum, and is repayable over 15 years, with the final instalment on May 9, 2020.

St. Lawrence Seaway Management Corporation

This account was established by subsection 80(1) of the Canada Marine Act. Loans previously managed by the St. Lawrence Seaway Authority are now managed by the St. Lawrence Seaway Management Corporation in accordance with an agreement between the Department of Transport and the Corporation. The repayments of these loans are recorded in this account.

The loan bore interest at a rate of prime plus 2.0% per annum. The final instalment of the existing terms was anticipated for March 2013.

As of March 31, 2020, the remaining amount of this loan is deemed unrecoverable and parliamentary authority is required to write-off the balance.

Federal Public Service Health Care Administration Authority

The Federal Public Service Health Care Plan Administration Authority (referred to as the Administration Authority) was incorporated, without share capital, under subsection 7.2(1) of the Financial Administration Act effective May 1, 2007. Effective May 31, 2007, the assets and liabilities of the Public Service Health Care Plan (PSHCP) were transferred to the Government of Canada and to the Administration Authority as directed by the President of the Treasury Board of Canada and consistent with the Trust Agreement, which terminated May 31, 2007.

The Administration Authority is charged with the administration of the PSHCP. Its objective is to ensure that benefits and services to plan members and their covered dependants, as defined in the PSHCP documentation, are delivered in a manner that ensures the effective and efficient administration of the PSHCP. Payments are made to the Administration Authority under Vote 20 and are authorized under the terms of reference of the funding agreement between the President of the Treasury Board and the Administration Authority. The funding agreement allows for the transfer of funds from the Treasury Board of Canada Secretariat to the Administration Authority in four quarterly instalments upon approval of the operating budget by the Secretary of the Treasury Board of Canada. These quarterly instalments are made in advance and actual expenses are recorded upon approval of the Administration Authority's Quarterly Financial Report.

Joint Learning Program

Advances have been made to the Public Service Alliance of Canada (PSAC) for the Joint Learning Program (JLP). Following the collective bargaining rounds of 2004, 2008, 2010 and subsequently of 2014, a Memorandum of Understanding between the Treasury Board and PSAC was included in the collective bargaining agreements to provide funding for a JLP. The JLP is a negotiated partnership between PSAC and the Treasury Board of Canada Secretariat (TBS).The objective of the JLP is to improve labour relations in the Public Service. It is intended to provide joint union-management learning opportunities in areas where both parties have roles and responsibilities, and for which the employer does not already have a legal obligation to provide training.

Payments are made to PSAC under Vote 20 and are authorized under the terms of reference of the Program. The terms of reference include the program costs, funding conditions, payment conditions, timelines, as well as a schedule of payments. The schedule of payments provides for a 3-month advance from TBS to PSAC to provide for program delivery costs. When actual expenses are reported every three months, the advance is reversed and the expense is recorded.

Commonwealth War Graves Commission

Advances have been made to the Working Capital Fund of the Commonwealth War Graves Commission, to maintain graves and cemeteries.

At year end, the balance of the advances was 30,000 British pound sterling. This balance was converted to Canadian dollars, using the year-end rate of exchange. The advances are non-interest bearing and have no fixed terms of repayments.

Miscellaneous loans, investments and advances

This account represents amounts outstanding in the hands of agencies and individuals, at year end. This group records loans, investments and advances not classified elsewhere.

Transition payments—Pay in arrears

During the 2015 fiscal year, a one-time payment was issued to employees as a result of the implementation of pay in arrears. This amount will be recovered from the employees upon their departure from the Public Service. The amount at year-end represents the balance to be recovered in the future.

Consolidation adjustment

The consolidation adjustment reflects the total loans, investments and advances held by consolidated Crown corporations and other entities. These mainly include investments such as bonds, money market funds and fixed income securities.

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