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2013-14 financial statements

 

Statement of Management Responsibility, Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2014, and all information contained in these statements rests with the management of the Atlantic Canada Opportunities Agency (“the Agency”). These financial statements have been prepared by management using the Government’s accounting policies, which are based on Canadian public sector accounting standards.

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 fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Agency's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Agency’s Departmental Performance Report, is consistent with these financial statements. 

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR), designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies. 

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the Agency; and by conducting an annual risk-based assessment of the effectiveness of the system of ICFR. 

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess the effectiveness of associated key controls, and to make any necessary adjustments. 
The Agency will be subject to periodic Core Control Audits performed by the Office of the Comptroller General and will use the results of such audits to adhere to the Treasury Board Policy on Internal Control. 

In the interim, the Agency undertook a risk-based assessment of the system of ICFR for the year ended March 31, 2014, in accordance with the Treasury Board Policy on Internal Control, and the results and action plan are summarized in the annex. 

The financial statements of the Agency have not been audited. 

Approved by Senior Officials

Approved by: 

Paul J. LeBlanc, Deputy Head Moncton, Canada Date: August 27, 2014     Denise Frenette, CA, Chief Financial Officer Moncton, Canada Date: August 26, 2014

Atlantic Canada Opportunities Agency Statement of Financial Position (Unaudited)

As at March 31 (in thousands of dollars) 

  2014 2013
Liabilities
Accounts payable and accrued liabilities (note 4) 72,401 67,287
Vacation pay and compensatory leave 1,968 2,081
Other liabilities (note 5) 347 156
Employee future benefits (note 6) 2,706 3,549
Total gross liabilities 77,422 73,073
Liabilities held on behalf of Government
Accounts payable and accrued liabilities (note 4) (8,815) (7,583)
Total liabilities held on behalf of Government (8,815) (7,583)
Total net liabilities 68,607 65,490
Financial assets
Due from Consolidated Revenue Fund 63542 59,650
Accounts receivable and advances (note 7) 2,242 2,668
Loans receivable (note 8) 240,140 229,732
Total gross financial assets 305,924 292,050
Financial assets held on behalf of Government
Accounts receivable and advances (note 7) (1,932) (2,391)
Loans receivable (note 8) (240,140) (229,732)
Total financial assets held on behalf of Government (242,072) (232,123)
Total net financial assets 63,852 59,927
Agency net debt 4,755 5,563
Non-financial assets
Tangible capital assets (note 9) 711 733
Total non-financial assets 711 733
Agency net financial position (4,044) (4,830)

For information on contractual obligations, see note 10.

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

Approved by Senior Officials

Approved by: 

Paul J. LeBlanc, Deputy Head Moncton, CanadaDate: August 27, 2014   Denise Frenette, CA, Chief Financial Officer Moncton, Canada Date: August 26, 2014

Atlantic Canada Opportunities Agency Statement of Operations and Agency Net Financial Position (Unaudited)

For the Year Ended March 31 (in thousands of dollars)

  2014 Planned Results 2014 2013
Expenses
Enterprise Development 136,088 125,124 124,147
Community Development 90,131 95,416 92,334
Internal Services 44,292 30,328 38,667
Policy, Advocacy and Coordination 12,355 11,409 13,605
Expenses incurred on behalf of Government (34,114) (12,797) (28,829)
Total expenses 248,752 249,480 238,924
Revenues
Revenue from amortization of discount on assistance loans 6,864 6,506 5,388
Interest on overdue loans 490 356 464
Gain on disposal of tangible capital and non-capital assets 28 10 19
Miscellaneous revenues 25 5 49
Revenues earned on behalf of Government (7,387) (6,868) (5,903)
Total revenues 20 9 17
Net cost of operations 248,732 249,471 239,907
Net cost of operations before government funding and transfers 248,732 249,471 239,907
Government funding and transfers
Net cash provided by Government 248,005 238,410 236,156
Change in due from Consolidated Revenue Fund (2,130) 3,892 (7,038)
Services provided without charge by other government departments (note 11) 7,815 7,936 8,417
Transfer of assets and liabilities to other government departments – 19 –
Net cost of operations after government funding and transfers (4,958) (786) 2,372
Agency net financial position – Beginning of year (8,937) (4,830) (2,458)
Agency net financial position – End of year (3,979) (4,044) (4,830)

For information on segmented information, see note 12.
The accompanying notes form an integral part of these financial statements.

Atlantic Canada Opportunities Agency Statement of Change in Agency Net Debt (Unaudited) For the Year Ended March 31 (in thousands of dollars)

  2014 Planned Results  2014 2013
Net cost of operations after government funding and transfers (4,958) (786) 2,372
Change due to tangible capital assets
Acquisition of tangible capital assets 224 199 273
Amortization of tangible capital assets (247) (240) (211)
Proceeds from disposal of tangible capital assets (20) (9) (17)
Net gain on disposal of tangible capital assets, including adjustments 20 9 17
Transfer from other government departments –  19 –
Total change due to tangible capital assets (23) (22) 62
Change due to prepaid expenses – –  (7,393)
Net decrease in Agency net debt (4,981) (808) (4,959)
Agency net debt – Beginning of year 9,636 5,563 10,522
Agency net debt – End of year 4,655 4,755 5,563

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

Atlantic Canada Opportunities Agency Statement of Cash Flows (Unaudited)

For the Year Ended March 31 (in thousands of dollars)

  2014 2013
Operating activities
Net cost of operations before government funding and transfers 249,471 239,907
Non-cash items:
Amortization of tangible capital assets (240) (211)
Gain on disposal of tangible capital assets 9 17
Services provided without charge by other government departments (note 11) (7,936) (8,417)
Variations in Statement of Financial Position:
Increase (decrease) in prepaid expenses – (7,393)
Increase in accounts receivable and advances 33 84
Decrease (increase) in accounts payable and accrued liabilities (3,882) 6,988
Decrease (increase) in vacation pay and compensatory leave 113 (327)
Decrease (increase) in other liabilities (191) 340
Decrease in employee future benefits 843 4,912
Cash used in operating activities 238,220 235,900
Capital investing activities
Acquisition of tangible capital assets 199 273
Proceeds from disposal of tangible capital assets (9) (17)
Cash used in capital investing activities 190 256
Net cash provided by Government of Canada 238,410 236,156

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

Atlantic Canada Opportunities Agency Notes to the Financial Statements (Unaudited) For the Year Ended March 31 

1. Authority and Objectives

The Agency operates under the authority of the Atlantic Canada Opportunities Agency Act, R.S.C., 1985, c. 41, 4th Supp. 

The Agency’s mandate is to increase opportunity for economic development in Atlantic Canada and, more particularly, to enhance the growth of earned incomes and employment opportunities in that region. 

2. Summary of Significant Accounting Policies

These financial statements have been prepared using the Government’s accounting policies stated below, which 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: 

(a) Parliamentary authorities

The Agency is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Agency 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 Statement of Operations and Agency Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the Statement of Operations and Agency Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2013-2014 Report on Plans and Priorities. 

(b) Net cash provided by Government

The Agency operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Agency is deposited to the CRF and all cash disbursements made by the Agency 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 Government.

(c) Amounts due from the CRF

These amounts 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 the Agency is entitled to draw from the CRF without further authorities to discharge its liabilities.

(d) Revenues

Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues, except for interest income on overdue loans, which is only recognized when received due to the uncertainty as to ultimate collection. 

The majority of the revenues results from the recognition of the amortization of discount on assistance loans.

With the exception of gain on the disposal of tangible capital assets, revenues are earned on behalf of Government and are not available to discharge the Agency’s liabilities. While the Deputy Head (DH) is expected to maintain accounting control, he has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity’s gross revenues. 

(e) Expenses

Expenses are recorded on the accrual basis: 

Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable. 

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, legal services and workers’ compensation are recorded as operating expenses at their estimated cost. 

Expenses related to the loan and accounts receivable portfolio are expenses incurred on behalf of Government. While the DH is expected to maintain accounting control over loans and accounts receivable, he has no authority regarding their disposition; therefore, related expenses are presented in reduction of the entity’s gross expenses.

(f) Employee future benefits

i) Pension benefits

Eligible employees participate in the Public Service Pension Plan (“the Plan”), a multi-employer plan administered by the Government of Canada. The Agency’s contributions to the Plan are charged to expenses in the year incurred and represent the total Agency obligation to the Plan. The Agency’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. 

(ii) Severance benefits

Certain employee groups 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 of the Agency is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government of Canada as a whole. 

(g) Accounts and loans receivable

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

(i) Unconditionally repayable contributions

Transfer payments that are unconditionally repayable are recognized as loans receivable. These contributions must be repaid without condition, and the loans have significant concessionary terms as they include a no-interest clause. Furthermore, they have various repayment terms. The modified effective rate method is used to discount the loans receivable. 

(ii) Conditionally repayable contributions

Transfer payments that are conditionally repayable are reclassified as accounts receivable when conditions specified in the contribution agreement come into effect or in the event of default. 

(h) Allowance for impaired loans and accounts receivable

Loans and accounts receivable are classified as impaired when, in the opinion of management, there is reasonable doubt as to the timely collection of the full amount of principal and, where applicable, interest. A specific allowance is established to reduce the recorded value of the loan to its estimated net realizable value.

(i) 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 an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements. 

(j) Tangible capital assets

All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. The Agency 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
Vehicles 5 years
Computer equipment 3 years
In-house-developed software 5 years
Machinery and equipment 15 years

(k) Measurement uncertainty

The preparation of these financial statements 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 for which estimates are used are the liability for employee future benefits, the unamortized discount on assistance loans, 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 Authorities

The Agency receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Agency Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the Agency 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 current year authorities used

(in thousands of dollars) 

 

  2014 2013
Net cost of operations before government funding and transfers 249,471 239,907
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (240) (211)
Gain on disposal of tangible capital assets 9 17
Services provided without charge by other government departments (7,936) (8,417)
Decrease (increase) in vacation pay and compensatory leave 113 (327)
Decrease in employee future benefits 843 4,912
Refund of prior year's expenditures 1,536 – 
Decrease (increase) in prepaid expenses –  (6,502)
Conditions met on contributions 3,120 20,509
Adjustments to prior years’ accruals 1,581 2,984
Correction to assistance type from repayable contribution to non-repayable 1,278 415
Outstanding recovery of operating expenses 133 138
Total items affecting net cost of operations but not affecting authorities 437 13,518
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 199 273
Assistance loans issued on behalf of Government 64,051 61,964
Total items not affecting net cost of operations but affecting authorities 64,250 62,237
Current year authorities used 314,158 315,662

(b) Authorities provided and used

(in thousands of dollars) 

 

  2014 2013
Authorities provided:
Vote 1 – Operating expenditures 74,726 82,387
Vote 5 – Grants and contributions 236,733 241,592
Statutory amounts 8,377 9,515
Less:
Total lapsed (5,668) (17,813)
Authorities available for future years (10) (19)
Current year appropriations used 314,158 315,662

4. Accounts Payable and Accrued Liabilities

The following table presents details of the Agency’s accounts payable and accrued liabilities: 

(in thousands of dollars) 

 

  2014 2013
Regular accounts payable 16,216 20,100
Accrued salaries and wages 1,996 2,924
Other payables to other government departments 1,585 1,753
Contractor’s holdback 402 261
  20,199 25,038
Accrued liabilities 52,202 42,249
Gross accounts payable and accrued liabilities 72,401 67,287
Accounts payable and accrued liabilities held on behalf of Government (8,815) (7,583)
Net accounts payable and accrued liabilities 63,586 59,704

Accrued liabilities associated to the loans receivable are considered accrued liabilities held on behalf of Government. While the DH is expected to maintain accounting control over loans receivable, he has no authority regarding their disposition; therefore, liabilities related to the loans receivable are presented in reduction of the entity’s gross accounts payable and accrued liabilities.

5. Other Liabilities

The Agency enters into agreements with provincial governments to fund various transfer payment projects. The Agency records deposits from these provincial governments for their share of costs under various projects. Monies are distributed on behalf of contributors as projects are undertaken. Unused funds are returned to the provincial governments. Activity estimated during the year is as follows: 

(in thousands of dollars) 

 

  2014 2013
Opening liability 156 496
Deposits 700 483
Payments (509) (823)
Closing liability 347 156

6. Employee Future Benefits

(a) Pension benefits

The Agency’s employees participate in the 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 per cent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plan benefits and they are indexed to inflation. 

Both the employees and the Agency contribute to the cost of the plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Canada’s Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012, and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.
The 2013-2014 expense amounts to $5,883,826 ($6,761,742 in 2012-2013). For Group 1 members, the expense represents approximately 1.6 times (1.7 times in 2012-2013) the employee contributions and, for Group 2 members, approximately 1.5 times (1.6 times in 2012-2013) the employee contributions. 

The Agency’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

The Agency 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. Information about the severance benefits, measured as at March 31, is as follows:

(in thousands of dollars) 

 

  2014 2013
Accrued benefit obligation – Beginning of year 3,549 8,461
Expenses for the year 2,889 502
Benefits paid during the year (3,732) (5,414)
Accrued benefit obligation – End of year 2,706 3,549

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 2012. Employees subject to these changes were given the option to immediately be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination of employment from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

7. Accounts Receivable and Advances

The following table presents details of the Agency’s accounts receivable and advances balances: 

(in thousands of dollars) 

 

  2014 2013
Receivables from contributions
Conditionally repayable conditions met 11 147
Defaulted conditionally repayable contributions 9,358 17,719
Defaulted non-repayable contributions 250 531
Overpayments to be recovered 237 250
Receivables from other federal government departments and agencies 307 275
Receivables from external parties 3,238 1,682
Employee advances 3 2
  13,404 20,606
Allowance for doubtful accounts on receivables from external parties (11,162) (17,938)
Gross accounts receivable 2,242 2,668
Accounts receivable held on behalf of Government (1,932) (2,391)
Net accounts receivable 310 277

Conditionally repayable contributions

These contributions relate to contributions made to outside parties, all or part of which become repayable if conditions specified in the contribution agreement come into effect. In 2013-2014, an allowance of $9,656,355 ($17,938,568 in 2012-2013) relating to these loans was recorded.

In 2013-2014, collections on conditionally repayable contributions amounted to $4,117,371 ($10,743,432 in 2012-2013). 

In 2013-2014, the Agency wrote off $7,522,460 ($7,678,091 in 2012-2013) for accounts (including defaulted non-repayable contributions) deemed uncollectible and where all possible avenues of collection have been exhausted. The writeoff of a Crown debt is a bookkeeping action only and does not eliminate the obligation of a debtor to make payment, nor does it affect the right of the Crown to enforce collections. Payments received on loans that were written off were valued at $1,076 ($1,293 in 2012-2013).
Accounts receivable are considered financial assets held on behalf of Government and are not available to discharge the Agency’s liabilities. While the DH is expected to maintain accounting control, he has no authority regarding the disposition of repayments received. Therefore, accounts receivable and advances are presented as a reduction to the entity’s gross accounts receivable.

8. Loans Receivable

The following table presents details of the Agency’s loans balances: 

(in thousands of dollars) 

 

  2014 2013
Loans receivable 336,026 335,683
Less: Unamortized discount on assistance loans (24,402) (17,262)
  311,624 318,421
Less: Allowance for uncollectibility (71,484) (88,689)
Gross loans receivable 240,140 229,732
Loans receivable held on behalf of Government (240,140) (229,732)
Net loans receivable – –

These loans relate to unconditionally repayable contributions made to outside parties that must be repaid without qualification. An allowance of $71,484,178 ($88,688,531 in 2012-2013) relating to these loans was recorded. 

The loans receivable portfolio consists of 2,233 non-interest-bearing unconditionally repayable contributions issued, for the most part, from 2007 to 2014 with prescribed annual repayment terms. The loans are recorded at their discounted net present values using market interest rates at the time of the loans.

In 2013-2014, collections on unconditionally repayable contributions amounted to $48,950,456 ($43,796,769 in 2012-2013). The Agency wrote off $15,616,048 ($14,049,074 in 2012-2013) for accounts deemed uncollectible and where all possible avenues of collection have been exhausted. The writeoff of a Crown debt is a bookkeeping action only and does not eliminate the obligation of a debtor to make payment, nor does it affect the right of the Crown to enforce collections. Payments received on loans that were written off were valued at $49,335 ($178,144 in 2012-2013).

Loans receivable are considered a financial asset held on behalf of Government and are not available to discharge the Agency’s liabilities. While the DH is expected to maintain accounting control, he has no authority regarding the disposition of repayments received. Therefore, loans receivable are presented as a reduction to the entity’s gross loans receivable.

9. Tangible Capital Assets

(in thousands of dollars)

 

  Vehicles Computer equipment In-house developed software Machinery and equipment Total
Cost
Opening balance 850 322 1,851 64 3,087
Acquisitions 109 12 44 34 199
Adjustments* 30 – – –  30
Disposals and writeoffs (54) – – – (54)
Closing balance 935 334 1,895 98 3,262
Accumulated amortization
Opening balance 469 283 1,592 10 2,354
Amortization 145 14 77 4 240
Adjustments*  11 – – – 11
Disposals and writeoffs (54) – – – (54)
Closing balance 571 297 1,669 14 2,551
2014 Net book value 364 37 226 84 711
2013 Net book value 381 39 259 54 733

* Effective August 30, 2013, a vehicle with a net book value of $19,017 was transferred to the Agency from Fisheries and Oceans Canada. This transfer is included in the adjustments.

10. Contractual obligations

The nature of the Agency’s activities results in multi-year contracts whereby the Agency is obligated to make future payments in order to carry out its transfer payment programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows: 

(in thousands of dollars) 

 

  2015 2016 2017 2018 2019 and thereafter Total
Transfer payments 190,917 41,022 15,391 6,352 – 253,682
Operations and maintenance 3,997 95 10 – – 4,102
Total 194,914 41,117 15,401 6,352 – 257,784

11. Related party transactions

The Agency is related as a result of common ownership to all government departments, agencies and Crown corporations. The Agency enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Agency received common services, which were obtained without charge from other government departments, as disclosed below. 

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

During the year, the Agency received services without charge from certain common service organizations related to accommodation, legal services, the employer’s contribution to the health and dental insurance plans, and workers’ compensation coverage. These services provided without charge have been recorded in the Statement of Operations and Agency Net Financial Position as follows: 

(in thousands of dollars)

 

  2014 2013
Employer’s contribution to the health and dental insurance plans 4,036 4,478
Accommodation 3,885 3,924
Legal services 4 6
Workers’ compensation 11 9
Total 7,936 8,417

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General, are not included as an expense in the Agency’s Statement of Operations and Agency Net Financial Position.

(b) Administration of programs on behalf of other government departments

Part of the Agency’s mandate is to coordinate federal economic activities in Atlantic Canada. In this regard, the Agency delivers programs on behalf of other federal departments and agencies. The following is a list of programs valued at greater than $1 million in federal contributions administered by the Agency over the last two fiscal years. These expenses are reflected in the financial statements of Infrastructure Canada (INFC) and not those of the Agency.

(in thousands of dollars)

 

  2014 2013
Canada Strategic Infrastructure Fund – Infrastructure Canada – 1,444
Municipal Rural Infrastructure Fund – Infrastructure Canada 57 3,142
Building Canada Fund – Communities Component – Regular 11,464 20,612
Building Canada Fund – Communities Component – Top Up – 298

The Agency is the delivery partner of INFC for the administration of infrastructure programs in Atlantic Canada. Administrative agreements such as a memorandum of understanding and a service-level agreement were signed with INFC to deliver the Municipal Rural Infrastructure Fund, the Canada Strategic Infrastructure Fund and the Building Canada Fund – Communities Component. 

In addition, the Agency receives operating funds through the Estimates processes to cover expenditures charged to its own operating vote. These funds are reflected in the Agency’s operating expenses. The Agency incurred expenses in the delivery of this infrastructure programming of $404,860 ($850,646 in 2012-2013). 

(c) Other transactions with related parties

(in thousands of dollars)

 

  2014 2013
Expenses – Other government departments and agencies 474 (1,001)

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

12. Segmented Information

Presentation by segment is based on the Agency’s program alignment architecture and on the same accounting policies as described in note 2, Summary of Significant Accounting Policies. The following table presents the expenses incurred and revenues generated for the main programs, by major object of expenses and by major type of revenue. The segmented results for the period are as follows: 

(in thousands of dollars) 

 

 

Enterprise Development

Community Development

Internal Services

Policy, Advocacy and Coordination

2014

Total

2013 Total

Transfer Payments

            

Conditionally repayable

            

Industry

28,440

–

–

–

28,440

31,570

Conditions met

(3,120)

–

–

–

(3,120)

(20,509)

Total conditionally repayable

25,320

–

–

–

25,320

11,061

Non-repayable

            

Industry

7,729

–

–

–

7,729

8,426

Non-profit organizations

50,552

65,724

–

1,275

117,551

125,740

Other levels of Government

786

16,900

–

–

17,686

11,557

Total non-repayable

59,067

82,624

–

1,275 

142,966

145,723

Adjustments to prior year’s accruals on transfer payments

(1,258)

(240)

–

(10)

(1,508)

(2,932)

Loan discount portion on assistance loans

13,645

–

–

–

13,645

3,960

Provision for impaired loans and accounts receivable

(848)

–

–

–

(848)

24,869

Expenses incurred on behalf of Government

(12,797)

–

–

–

(12,797)

(28,829)

Total transfer payments

83,129

82,384

–

1,265

166,778

153,852

Operating expenses

            

Personnel

26,173

10,921

20,201

7,751

65,046

67,311

Professional services

373

774

4,203

1,461

6,811

7,965

Transportation and telecommunications

937

342

948

282

2,509

3,044

Accommodations

1,562

651

1,205

467

3,885

3,924

Rental

59

62

1,731

81

1,933

2,065

Equipment (less than $10,000 per item)

33

1

628

4

666

510

Information

41

16

250

35

342

355

Utilities, material, supplies

10

13

302

61

386

319

Purchased repair and maintenance

8

3

592

-

603

309

Amortization of tangible capital assets

–

–

240

–

240 

211

Miscellaneous expenses

2

249

28

2

281

59

Total operating expenses

29,198

13,032

30,328

10,144

82,702

86,072

Total expenses

112,327

95,416

30,328

11,409

249,480

239,924

Revenues

            

Revenue from amortization of discount on assistance loans

6,506

–

–

–

6,506

5,388

Interest on overdue loans

356

–

–

–

356

464

Gain on disposal of tangible capital and non-capital assets

–

–

10

–

10

19

Miscellaneous revenues

-

–

5

–

5

49

Revenues earned on behalf of Government

(6,862)

–

(6)

–

(6,868)

(5,903)

Total revenues

–

–

9

–

9

17

Net cost of operations

112,327

95,416

30,319

11,409

249,471

239,907

Page details

2020-08-10