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Future-Oriented Financial Statements 2013 - 2014

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Office of the Commissioner of Official Languages

Statement of Management Responsibility

Management is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at January 15, 2013, and reflect the plans described in the Report on Plans and Priorities.

Graham Fraser
Commissioner of Official Languages

Nancy Premdas, CMA
Chief Financial Officer
Assistant Commissioner
Corporate Management

Ottawa, Canada
February 5, 2013

Future-oriented Statements

OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Future-Oriented Statement of Financial Position (Unaudited)
As at March 31
(in dollars)
  Estimated Results 2013 Planned Results 2014
Liabilities
Accounts payable and accrued liabilities (note 6)
 1,406,966 2,230,618
Vacation pay and compensatory leave
 721,453 704,798
Employee future benefits (note 7)
 1,245,488 711,550
Total liabilities 3,373,907 3,646,966
Financial assets
Due from the Consolidated Revenue Fund
 1,218,154 1,954,146
Accounts receivable and advances  (note 8)
 87,979 87,979
Total financial assets 1,306,133 2,042,125
Net Debt 2,067,774 1,604,841
Non-financial assets
Prepaid expenses
 3,674 3,674
Tangible capital assets (note 9)
 369,589 1,194,376
Total non-financial assets 373,263 1,198,050
Net Financial Position (1,694,511) (406,791)

Information for the year ending March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.

Contractual obligations (note 10)

Contingent liabilities (note 11)

The accompanying notes form an integral part of these future-oriented financial statements.

OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Future-Oriented Statement of Operations and Net Financial Position (Unaudited)
For the Year Ending March 31
(in dollars)
Estimated Results 2013 Planned Results 2014
Expenses
Protection of Linguistic Rights
 7,443,072 7,892,449
Promotion of Linguistic Duality
 7,641,480 8,059,769
Internal Services
 9,215,833 10,784,353
Total expenses 24,300,385 26,736,571
Net cost of operations before government funding 24,300,385 26,736,571
Government funding 
Net cash provided by Government
 21,492,977 24,499,406
Change in due from Consolidated Revenue Fund
 (446,372) 735,992
Services provided without charge by other government departments (note 12)
 3,020,100 2,788,893
Net cost of operations after government funding 233,680 (1,287,720)
Net financial position - Beginning of year (1,460,831) (1,694,511)
Net financial position - End of year (1,694,511) (406,791)

Information for the year ending March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.

Segmented information (note 13)

The accompanying notes form an integral part of these future-oriented financial statements.

OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Future-Oriented Statement of Change in Net Debt (Unaudited)
For the Year Ending March 31
(in dollars)
Estimated Results 2013 Planned Results 2014
Net cost of operations after government funding 233,680 (1,287,720)
Change due to tangible capital assets
Acquisition of tangible capital assets
 34,907 1,144,367
Amortization of tangible capital assets
 (453,583) (319,580)
Total change due to tangible capital assets (418,676) 824,787
Change due to prepaid expenses (3,490) -
Net decrease in net debt (188,486) (462,933)
Net debt - Beginning of year 2,256,260 2,067,774
Net debt - End of year 2,067,774 1,604,841

Information for the year ending March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.

The accompanying notes form an integral part of these future-oriented financial statements.

OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Future-Oriented Statement of Cash Flows (Unaudited)
For the Year Ending March 31
(in dollars)
Estimated Results 2013 Planned Results 2014
Operating activities
Net cost of operations before government funding  24,300,385 26,736,571
Non-cash items:
Amortization of tangible capital assets
 (453,583) (319,580)
Services provided without charge by other government departments (note 12)
 (3,020,100) (2,788,893)
Variations in Statement of Financial Position:
Decrease in accounts receivable and advances
 (56,536) -
Decrease in prepaid expenses
 (3,490) -
Decrease (increase) in accounts payable and accrued liabilities
 421,525 (823,652)
Decrease in vacation pay and compensatory leave
 3,346 16,655
Decrease in employee future benefits
 266,523 533,938
Cash used in operating activities 21,458,070 23,355,039
Capital investing activities
Acquisition of tangible capital assets
 34,907 1,144,367
Cash used in capital investing activities 34,907 1,144,367
Net cash provided by Government of Canada 21,492,977 24,499,406

Information for the year ending March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.

The accompanying notes form an integral part of these future-oriented financial statements.

Office of the Commissioner of Official Languages
Notes to the Future-oriented Financial Statements (unaudited)

1. Authority and objectives

The mandate of the Commissioner of Official Languages is to oversee the full implementation of the Official Languages Act, protect the language rights of Canadians, and promote linguistic duality and bilingualism in Canada.

Section 56 of the Official Languages Act (1) states that it is the duty of the Commissioner to take all actions and measures within the authority of the Commissioner with a view to ensuring recognition of the status of each of the official languages and compliance with the spirit and intent of this Act in the administration of the affairs of federal institutions, including any of their activities relating to the advancement of English and French in Canadian society.

Under the Act, therefore, the Commissioner is required to take every measure within his power to ensure that the three main objectives of the Official Languages Act are met:

  • the equality of the status and use of English and French in Parliament, the Government of Canada, the federal administration and the institutions subject to the Act;
  • the development of official language minority communities in Canada; and
  • the advancement of the equality of English and French in Canadian society.

The Commissioner of Official Languages is appointed by commission under the Great Seal, after approval by resolution of the House of Commons and the Senate, for a seven-year term. The Commissioner of Official Languages reports directly to Parliament.

2. Methodology and Significant Assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of OCOL as described in the Report on Plans and Priorities.

The information in the estimated results for fiscal year 2012-13 is based on actual results as at December 31, 2012 and forecasts for the remainder of the fiscal year. Estimated year end information for 2012-13 is used as the opening position for the 2013-14 planned results, and forecasts have been made for the planned results for the 2013-14 fiscal year.

The main assumptions underlying the forecasts are as follows:

  1. OCOL's activities will remain substantially the same as for the previous year;
  2. Expenses, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue;

These assumptions are adopted as at January 15, 2013.

3. Variations and Changes to the forecast financial information

While every attempt has been made to forecast final results for the remainder of 2012-13 and for 2013-14, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these financial statements, the Office of the Commissioner of Official Languages has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented financial statements and the historical financial statements include:

  1. The timing and amounts of acquisitions and disposals of equipment may affect gains/losses and amortization expense.
  2. Implementation of new collective agreements.
  3. Further changes to the operating budget through new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Office of the Commissioner of Official Languages will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

4. Summary of significant accounting policies

The future-oriented financial statements have been prepared in accordance with the Treasury Board Accounting Standards in effect on April 1, 2011. These accounting policies are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

  1. Parliamentary authorities
    OCOL is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to OCOL do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Future-oriented Statement of Operations and Net Financial Position and in the Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.

  2. Net Cash Provided by Government
    OCOL operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by OCOL is deposited to the CRF, and all cash disbursements made by OCOL are paid from the CRF. Net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.

  3. Due from the Consolidated Revenue Fund (CRF)
    Amounts due from the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that OCOL is entitled to draw from the CRF without further authorities to discharge its liabilities.

  4. Expenses
    Expenses are recorded on the accrual basis:

    • Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
    • Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans, payroll services and audit services are recorded as operating expenses at their estimated cost.
  5. Employee future benefits
    1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer pension plan administered by the Government of Canada. OCOL’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. OCOL’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.
    2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. 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.

  6. Accounts receivable
    Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivables where recovery is considered uncertain.

  7. Contingent liabilities
    Contingent liabilities are potential liabilities that 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 recorded. If the likelihood is not determinable or if an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

  8. Tangible capital assets
    ll tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition costs. OCOL does not capitalize intangibles assets.

    Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the capital asset as follows:

    Asset Class Amortization Period
    Machinery and equipment  5 years
    Informatics hardware  4 years
    Furniture   5 years
    Informatics software   3 years
    Motor vehicles   7 years
    Leasehold improvements Lesser of the remaining term of the lease or the useful life of the improvement

5. Parliamentary authorities

OCOL receives its funding through annual parliamentary authorities. Items recognized in the Future-oriented Statement of Operations and Net Financial Position and Futured-oriented Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, OCOL 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:

(a) Reconciliation of net cost of operations to requested authorities
(in dollars)
Estimated 2013 Planned 2014
Net cost of operations 24,300,385 26,736,571
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (note 12)
 (3,020,100) (2,788,893)
Amortization of tangible capital assets (note 9)
 (453,583) (319,580)
Decrease in employee future benefits
 266,523 533,937
Decrease in vacation pay and compensatory leave
 3,346 16,655
Total - Adjustments for items affecting net cost of operations but not affecting authorities (3,203,814) (2,557,881)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets (note 9)
 34,907 1,144,367
Decrease in prepaid expenses
 (3,490) -
Total - Adjustments for items not affecting net cost of operations but affecting authorities 31,417 1,144,367
Total 21,127,988 25,323,057
Forecast current year lapse 755,194 -
Forecast authorities available 21,883,182 25,323,057
(b) Authorities requested
(in dollars)
  Estimated 2013 Planned 2014
Authorities requested
Vote 20 - Program expenditures
 19,632,725 23,072,877
Statutory - Contributions to employees benefit plans
 2,250,457 2,250,180
Forecast authorities available 21,883,182 25,323,057

Authorities presented reflect current forecasts of statutory items, approved initiatives included and expected to be included in Estimates documents and, when reasonable estimates can be made, estimates of amounts to be allocated from Treasury Board central votes.

6. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities (in dollars)
  Estimated Results 2013 Planned Results 2014
Accounts payable - Other government departments and agencies 66,071 80,755
Accounts payable - External parties 906,895 1,668,863
Total accounts payable 972,966 1,749,618
Accrued liabilities 434,000 481,000
Total accounts payable and accrued liabilities 1,406,966 2,230,618

7. Employee Future Benefits

(a) Pension benefits

OCOL's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. 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/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and OCOL contribute to the cost of the Plan. The forecasted expenses are $1,606,826 in 2012-13 and $1,606,629 in 2013-14.

OCOL'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.

(b) Severance benefits

OCOL provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities.

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2011-12. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation. Information about the severance benefits, estimated as at the date of these statements, is as follows:

Severance benefits (in dollars)
  Estimated Results 2013 Planne Results 2014
Accrued benefit obligation, beginning of year 1,512,011 1,245,488
Expense for the year 71,451 -
Expense benefits payments during the year (337,974) (533,938)
Accrued benefit obligation, end of year 1,245,488 711,550

8. Accounts receivable and advances

Accounts receivable and advances (in dollars)
  Estimated Results 2013 Planned Results 2014
Receivables - Other government departments and agencies 84,479 84,479
Receivables - External parties - -
Employee advances 3,500 3,500
Total accounts receivable and advances 87,979 87,979

9. Tangible capital assets

Tangible capital assets (in dollars)
  Estimated Results 2013 Planned Results 2014
Opening balance 788,265 369,589
Acquisitions of tangible capital assets  34,907 1,144,367
Less: Current year amortization (453,583) (319,580)
Net book value 369,589 1,194,376

10. Contractual obligations

OCOL has obligations arising in the normal course of operations for future years. These obligations include equipment rental, service contracts, as well as an obligation related to workers’ compensation death benefits.

Significant contractual obligations that can be reasonably estimated are summarized as follows:

Fiscal year Total
2015 110,096
2016 73,365
2017 71,589
2018 25,392
2019 3,456

11. Contingent liabilities

In the normal course of its operations, OCOL may become involved in various legal actions.  Some of these legal actions may result in actual liabilities when one or more future events occur.  To the extent that the future event is likely to occur, and a reasonable estimate of the loss can be made, a liability is accrued and an expense recorded. No contingent liabilities are recognized in OCOL's future-oriented financial statements.

12. Related party transactions

OCOL is related as a result of common ownership to all government departments, agencies, and Crown corporations. OCOL enters into transactions with these entities in the normal course of business and on normal trade terms.

(a) Common services provided without charge by other government departments

During the year, OCOL is forecasted to receive services without charge from certain common service organizations, related to accommodation, the employer's contribution to the health and dental insurance plans, payroll services and audit services. These services provided without charge have been recorded in OCOL's Future-oriented Statement of Operations and Net Financial Position as follows:

Common services provided without charge by other government departments (in dollars)
  Estimated Results 2013 Planned Results 2014
Accommodation 1,797,127 1,581,667
Employer's contributions to the health and dental insurance plans  1,114,973 1,099,226
Audit services 99,400 99,400
Payroll services 8,600 8,600
Total 3,020,100 2,788,893

(b) Other transactions with related parties

Other transactions with related parties (in dollars)
  Estimated Results 2013 Planned Results 2014
Accounts receivable - Other government departments and agencies  84,479 84,479
Accounts payable - Other government departments and agencies 66,071 80,755
Expenses - Other government departments and agencies 3,100,457 3,600,180

Expenses disclosed in (b) exclude common services provided without charge, which is already disclosed in (a).

13. Segmented information

Presentation by segment is based on OCOL's program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 4. The following table presents the forecasted expenses incurred for the programs, by major object of expenses. The segment results for the period are as follows:

Segmented information (in dollars)
  2013 Protection of Linguistic Rights Promotion of Linguistic Duality Internal Services 2014
Operating expenses
Salaries and employee benefits
 16,840,692 6,029,133 5,887,969 4,509,975 16,427,077
Professional and special services
 3,446,290 975,282 984,349 2,636,078 4,595,709
Accommodation
 1,797,127 553,583 553,583 474,501 1,581,667
Transportation and communications
 743,300 112,032 314,140 983,460 1,409,632
Repair and maintenance
 114,700 917 378 950,775 952,070
Rentals
 335,000 7,518 19,768 348,062 375,348
Amortization of tangible capital assets
 453,583 111,853 111,853 95,874 319,580
Acquisition of small equipments
 243,893 23,837 15,613 623,965 663,415
Materials and supplies
 170,100 52,807 52,126 110,315 215,248
Information
 155,100 25,487 119,990 50,685 196,162
Other
 600 - - 663 663
Net cost of operations 24,300,385 7,892,449 8,059,769 10,784,353 26,736,571