Financial Statements (Unaudited)
For the Year Ended March 31, 2009
Table of Contents
- Statement of Management Responsibility
- Statement of Operations (Unaudited)
- Statement of Financial Position (Unaudited)
- Statement of Equity of Canada (Unaudited)
- Statement of Cash Flow (Unaudited)
- Notes to the Financial Statements (Unaudited)
- Note 1. Authority and Objectives
- Note 2. Summary of Significant Accounting Policies
- Note 3. Parliamentary Appropriations
- Note 4. Transfer payments
- Note 5. Operating expenses
- Note 6. Accounts receivable and advances
- Note 7. Tangible Capital Assets
- Note 8. Employee Benefits
- Note 9. Contractual Obligations
- Note 10. Related party transactions
Statement of Management Responsibility
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2009 and all information contained in these statements rests with departmental management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.
Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment and gives due consideration to materiality. To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the department's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the department's Departmental Performance Report is consistent with these financial statements.
Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the department.
Management has established a Departmental Audit Committee (DAC) that provides leadership oversight and advice in the spirit of the Treasury Board policy on Internal Audit and Directive on Departmental Audit Committees. The Committee is chaired by the Deputy Head. The DAC is responsible for exercising active oversight of core areas of departmental control and accountability which includes reviewing the departmental financial statements and all significant accounting estimates and judgments therein.
The financial statements of the department have not been audited.
Signed at Ottawa, ON
August 7, 2009
Statement of Operations (Unaudited)
For the Year Ended March 31, 2009
(in thousands of dollars)
| Expenses | 2009 | 2008 |
|---|---|---|
| Transfer payments (Note 4. Transfer payments) | 2,239,225 | 1,905,215 |
| Operating expenses (Note 5. Operating expenses) | 45,836 | 38,828 |
| Total expenses | 2,285,061 | 1,944,043 |
| Revenues | 9 | 2 |
| Net Cost of Operations | 2,285,052 | 1,944,041 |
The accompanying notes form an integral part of these financial statements.
Statement of Financial Position (Unaudited)
At March 31, 2009
(in thousands of dollars)
| 2009 | 2008 | |
|---|---|---|
| Assets | ||
| Financial assets Accounts receivable and advances (Note 6. Accounts receivable and advances) |
50,327 | 144,449 |
| Non-financial assets Tangible capital assets (Note 7. Tangible Capital Assets) |
8,903 | 12,460 |
| TOTAL | 59,230 | 156,909 |
| Liabilities | ||
| Accounts payable | 85,989 | 44,848 |
| Accrued and other liabilities | 42,233 | 23,839 |
| Vacation pay and compensatory leave | 871 | 879 |
| Employee severance benefits (Note 8b) | 3,763 | 3,132 |
| Total liabilities | 132,856 | 72,698 |
| Equity of Canada | (73,626) | 84,211 |
| TOTAL | 59,230 | 156,909 |
Contractual obligations (Note 9. Contractual Obligations)
The accompanying notes form an integral part of these financial statements.
Statement of Equity of Canada (Unaudited)
At March 31, 2009
(in thousands of dollars)
| 2009 | 2008 | |
|---|---|---|
| Equity of Canada, beginning of year | 84,211 | (10,308) |
| Net cost of operations | (2,285,052) | (1,944,041) |
| Current year appropriations used (Note 3. Parliamentary Appropriations) | 2,279,846 | 1,954,769 |
| Revenue not available for spending | (9) | (2) |
| Refunds of previous year's expenditures | (1,132) | (11,896) |
| Change in net position in the Consolidated Revenue Fund (Note 3c) | (153,656) | 94,030 |
| Services provided without charge (Note 10a) | 2,166 | 1,659 |
| Equity of Canada, end of year | (73,626) | 84,211 |
The accompanying notes form an integral part of these financial statements.
Statement of Cash Flow (Unaudited)
At March 31, 2009
(in thousands of dollars)
| 2009 | 2008 | |
|---|---|---|
| Operating activities | ||
| Net cost operations | 2,285,052 | 1,944,041 |
| Non-cash items: | ||
| Amortization of tangible capital assets (Note 7. Tangible Capital Assets) | (4,187) | (4,039) |
| Services provided without charge (Note 10a) | (2,166) | (1,659) |
| Variations in Statement of Financial Position: | ||
| Decrease (increase) in liabilities | (60,158) | (6,075) |
| Increase (decrease) in receivables | (94,122) | 99,773 |
| Cash used by operating activities | 2,124,419 | 2,032,041 |
| Capital investment activities | ||
| Net acquisition of tangible capital assets (Note 7. Tangible Capital Assets) | 630 | 4,860 |
| Cash used by capital investment activities | 630 | 4,860 |
| Financing activities | ||
| Net cash provided by Government of Canada | (2,125,049) | (2,036,901) |
The accompanying notes form an integral part of these financial statements.
Notes to the Financial Statements (Unaudited)
1. Authority and Objectives
The Office of Infrastructure of Canada (INFC) was created in 2002 as a separate organization under Schedule I.1 of the Financial Administration Act. The applied name for this organization is Infrastructure Canada.
INFC was established to lead the Government of Canada's effort to address infrastructure challenges. Order in Council 2004-325 authorizes the Minister to enter into transfer payment agreements and contracts related to infrastructure initiatives in Canada. One of the funding programs managed by the Office is the Canada Strategic Infrastructure Fund, which operates under the authority of its own act, the Canada Strategic Infrastructure Fund Act, resulting from the Budget Implementation Act, 2001.
INFC is funded through annual appropriations received from the Parliament of Canada and is not taxable under the provisions of the Income Tax Act. INFC reports to the Minister of Transport, Infrastructure and Communities.
2. Summary of Significant Accounting Policies
The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.
Significant accounting policies are as follows:
- Parliamentary appropriations – INFC is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to INFC do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3. Parliamentary Appropriations provides a high-level reconciliation between the bases of reporting.
- Net Cash Provided by Government – INFC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by INFC is deposited to the CRF and all cash disbursements made by INFC are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.
- Change in net positionin the Consolidated Revenue Fund is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non respendable revenue recorded by the department. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.
- Expenses – Expenses are recorded on the accrual basis:
- contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement;
- vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment;
- services provided without charge by other government departments for accommodation and the employer's contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
- Employee future benefits:
- Pension benefits: Eligible employees participate in the Public Service Pension Plan (Public Service Superannuation Act), a multi-employer plan administered by the Government of Canada. INFC's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require INFC to make contributions for any actuarial deficiencies of the Plan.
- Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
- Accounts receivables and advances are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.
- Tangible capital assets – All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. INFC does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
Asset class Amortization period Informatics Hardware 5 to 10 years Informatics Software - Purchased 3 years Informatics Software – Developed 7 years Leasehold improvements period of lease - Measurement uncertainty – The preparation of these financial statements in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
3. Parliamentary Appropriations
INFC receives most of its funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, INFC has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:
- Reconciliation of net cost of operations to current year appropriations used
(in thousands of dollars)2009 2008 Net cost of operations 2,285,052 1,944,041 Adjustments for items affecting net cost of operations but not affecting appropriations Add (Less): Revenue not available for spending 9 2 Refunds of previous year's expenditures 1,132 11,896 Vacation pay and compensatory leave 8 (220) Employee severance benefits (631) (112) Amortization of tangible capital assets (4,187) (4,039) Services provided without charge (2,166) (1,659) Other (1) - TOTAL 2,279,216 1,949,909 Adjustments for items not affecting net cost of operations but affecting appropriations Add (Less): Acquisitions of tangible capital assets 630 4,860 Current year appropriations used 2,279,846 1,954,769 - Appropriations provided and used
(in thousands of dollars)2009 2008 Vote 50 – Operating Expenditures 40,136 38,009 Vote 55 – Contributions 3,307,475 3,084,341 Statutory Amounts 2,952 2,582 Less: Lapsed Appropriations: Operating (3,499) (2,832) Contributions (1,067,218) (1,167,331) Current year appropriations used 2,279,846 1,954,769 - Reconciliation of net cash provided by Government to current year appropriations used
(in thousands of dollars)2009 2008 Net cash provided by Government 2,125,049 2,036,901 Revenue not available for spending 9 2 Refunds of previous year's expenditures 1,132 11,896 Change in net position in the Consolidated Revenue Fund: (Increase) decrease in accounts receivable and advances 94,122 (99,773) Increase (decrease) in accounts payable and accrued liabilities 60,158 6,075 Other adjustments (624) (332) Subtotal 153,656 (94,030) Current year appropriations used 2,279,846 1,954,769
4. Transfer payments
(in thousands of dollars)
| Programs | 2009 | 2008 |
|---|---|---|
| Gas Tax Fund | 984,810 | 778,203 |
| Canada Strategic Infrastructure Fund | 504,695 | 910,658 |
| Provincial-Territorial Infrastructure Base Funding | 390,602 | - |
| Municipal Rural Infrastructure Fund | 220,106 | 143,320 |
| Border Infrastructure Fund | 81,111 | 69,903 |
| Building Canada Fund-Major Infrastructure Component | 55,425 | - |
| Research, Knowledge & Outreach Program | 1,614 | 3,220 |
| Building Canada Fund-Communities Component | 808 | - |
| Canadian Standards Association for the Infrastructure Solutions Project | 54 | - |
| Federation of Canadian Municipalities | - | (89) |
| Current year appropriations used | 2,239,225 | 1,905,215 |
5. Operating expenses
(in thousands of dollars)
| 2009 | 2008 | |
|---|---|---|
| Salaries and employee benefits | 22,292 | 18,872 |
| Professional and special services | 11,693 | 7,563 |
| Amortization of tangible capital assets | 4,187 | 4,039 |
| Rentals | 2,489 | 1,995 |
| Services provided without charge: contributions to health & dental plans (Note 10a) | 1,497 | 1,313 |
| Business Services and Fees | 941 | 1,622 |
| Services provided without charge: accommodation (Note 10a) | 669 | 278 |
| Travel and relocation | 482 | 630 |
| Information services | 461 | 439 |
| Telecommunications | 310 | 396 |
| Acquisition of Informatics Equipment | 282 | 468 |
| Equipment repair and maintenance | 238 | 512 |
| Other operating expenses | 228 | 252 |
| Office furniture & furnishings | 67 | 449 |
| Total | 45,836 | 38,828 |
6. Accounts receivable and advances
(in thousands of dollars)
| 2009 | 2008 | |
|---|---|---|
| Receivables from other Federal Government departments and agencies | 50,323 | 144,443 |
| Receivables from external parties | 3 | 5 |
| Employee advances | 1 | 1 |
| Total | 50,327 | 144,449 |
Since these accounts receivable are expected to be fully recoverable, no allowance for doubtful accounts has been established.
7. Tangible Capital Assets
(in thousands of dollars)
Click here to see the table of Tangible Capital Assets
8. Employee Benefits
Pension benefits: INFC's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plans benefits and they are indexed to inflation.
Both the employees and INFC contribute to the cost of the Plan. The 2008-09 expense amounts to $2,131,030 ($1,882,259 in 2007-08), which represents approximately 2.0 times (2.1 in 2007-08) the contributions by employees.
INFC's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
Severance benefits: INFC provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:
(in thousands of dollars)2009 2008 Accrued benefit obligation, beginning of year 3,132 3,020 Expense for the year 782 143 Benefits paid during year (151) (31) Accrued benefit obligation, end of year 3,763 3,132
9. Contractual Obligations
(in thousands of dollars)
Click here to see the table of Contractual Obligations
10. Related Party Transactions
INFC is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. INFC enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, INFC received services which were obtained without charge from other Government departments as presented in part (a).
Services provided without charge
During the year INFC received without charge from other departments, accommodation and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the department's Statement of Operation as follows:
(in thousands of dollars)2009 2008 Employer's contribution to the health and dental insurance plan 1,497 1,313 Accommodation 669 278 Legal Services - 68 Total 2,166 1,659 The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the department's Statement of Operations.
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Payables outstanding at year-end with related parties
(in thousands of dollars)2009 2008 Accounts payable to other government departments and agencies 8,097 982
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