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2014-15 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, 2015, 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 through 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 on-going process to identify key risks, to assess the effectiveness of associated key controls, and to make any necessary adjustments. 
The Agency is be subject to periodic Core Control Audits performed by the Office of the Comptroller General and uses the results of such audits to comply with the Treasury Board Policy on Internal Control. 
A Core Control Audit was performed in 2014-15 by the Office of the Comptroller General of Canada (OCG). The Audit Report and related Management Action Plan will be posted on the Agency's web site.

The financial statements of the Agency have not been audited. 

Approved by Senior Officials Approved by: 

Paul J. LeBlanc, Deputy Head Moncton, Canada Date: September 1, 2015   Denise Frenette, CPA, CA Chief Financial Officer Moncton, Canada Date: September 1, 2015

 


Atlantic Canada Opportunities Agency Statement of Financial Position (Unaudited) As at March 31
(in thousands of dollars)

  2015 2014
Liabilities
Accounts payable and accrued liabilities (note 4) 64,646 72,401
Vacation pay and compensatory leave 1,338 1,968
Other liabilities (note 5) 356 347
Employee future benefits (note 6) 3,707 2,706
Total gross liabilities 70,047 77,422
Liabilities held on behalf of Government
Accounts payable and accrued liabilities (note 4) (7,373) (8,815)
Total liabilities held on behalf of Government (7,373) (8,815)
Total net liabilities 62,674 68,607
Financial assets
Due from Consolidated Revenue Fund 57,113 63,542
Accounts receivable and advances (note 7) 545 2,242
Loans receivable (note 8) 259,435 240,140
Investments (note 9) 3,582 - 
Total gross financial assets 320,675 305,924
Financial assets held on behalf of Government
Accounts receivable and advances (note 7) (236) (1,932)
Loans receivable (note 8) (259,435) (240,140)
Investments (note 9) (3,582) - 
Total financial assets held on behalf of Government (263,253) (242,072)
Total net financial assets 57,422 63,852
Agency net debt 5,252 4,755
Non-financial assets
Prepaid expenses 16  - 
Tangible capital assets (note 10) 792 711
Total non-financial assets 808 711
Agency net financial position (4,444) (4,044)

For information on contractual obligations, see note 11.

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

Approved by Senior Officials Approved by: 

Paul J. LeBlanc, Deputy Head Moncton, Canada Date: September 1, 2015 Denise Frenette, CPA, CA Chief Financial Officer Moncton, Canada Date: September 1, 2015

 


Atlantic Canada Opportunities Agency Statement of Operations and Department Net Financial Position (Unaudited) For the Year Ended March 31
(in thousands of dollars)

2015 Planned Results 2015 2014
Expenses
Enterprise Development 121,003 109,539 125,124
Community Development 100,639 91,751 95,416
Internal Services 31,814 31,237 30,328
Policy, Advocacy and Coordination 12,146 13,054 11,409
Expenses incurred on behalf of Government (22,874) (4,663) (12,797)
Total expenses 242,728 240,918 249,480
Revenues
Revenue from amortization of discount on assistance loans 7,613 5,568 6,506
Interest on overdue loans 420 918 356
Interest on bank deposits -  137 - 
Gain on disposal of tangible capital and non-capital assets 23 13 10
Miscellaneous revenues 50 5 5
Revenues earned on behalf of Government (8,083) (6,628) (6,868)
Total revenues 23 13 9
Net cost of operations 242,705 240,905 249,471
Net cost of operations before government funding and transfers 240,905 249,471
Government funding and transfers
Net cash provided by Government 217,953 238,410
Change in due from Consolidated Revenue Fund (6,429) 3,892
Services provided without charge by other government departments (note 12) 8,192 7,936
Transfer of Accounts Receivable to Public Works and Government Services (note 13) (1,869) - 
Transfer of assets and liabilities from a Crown Corporation (note 14) 22,658 19 
Net cost of operations after government funding and transfers 400 (786)
Departmental net financial position – Beginning of year (4,044) (4,830)
Departmental net financial position – End of year (4,444) (4,044)

For information on segmented information, see note 15.
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)

2015 2014
Net cost of operations after government funding and transfers 400 (786)
Change due to tangible capital assets
Acquisition of tangible capital assets 169 199
Amortization of tangible capital assets (259) (240)
Proceeds from disposal of tangible capital assets (13) (9)
Net gain on disposal of tangible capital assets, including adjustments 13 9
Transfer from other government departments - 19
Transfer from a Crown Corporation 198  -
Total change due to tangible capital assets 108 (22)
Change due to prepaid expenses (11) -
Net increase (decrease) in departmental net debt 497 (808)
Agency net debt – Beginning of year 4,755 5,563
Agency net debt – End of year 5,252 4,755

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)

2015 2014
Operating activities
Net cost of operations before government funding and transfers 240,905 249,471
Non-cash items:
Amortization of tangible capital assets (259) (240)
Gain on disposal of tangible capital assets 13 9
Services provided without charge by other government departments (note 12) (8,192) (7,936)
Transition payments for implementing salary payments in arrears (note 13) 1,869 - 
Variations in Statement of Financial Position:
Increase (decrease) in prepaid expenses (11) - 
Increase (decrease) in accounts receivable and advances (1) 33
Decrease (increase) in accounts payable and accrued liabilities 6,313 (3,882)
Decrease (increase) in vacation pay and compensatory leave 700 113
Decrease (increase) in other liabilities (9) (191)
Decrease (increase) in employee future benefits (1,001) 843
Transfer from Crown Corporation (22,530) - 
Cash used in operating activities 217,797 238,220
Capital investing activities
Acquisition of tangible capital assets (note 10) 169 199
Proceeds from disposal of tangible capital assets (13) (9)
Cash used in capital investing activities 156 190
Net cash provided by Government of Canada 217,953 238,410

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 Atlantic Canada Opportunities Agency (ACOA) 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 Departmental 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 are the amounts reported in the future-oriented financial statements included in the 2014-2015 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 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 these revenues. Therefore, they are presented in reduction of the entity’s gross revenues. 

(e) Expenses

Expenses are recorded on the accrual basis: 

Transfer payments such as grants, conditionally repayable contributions and non-repayable contributions are recorded as expenses when authorization for the payment is approved as a legitimate expense under the applicable transfer payment program. Transfer payments that become repayable as a result of conditions specified in the contribution agreement are recorded as a reduction in transfer payment expense and are reclassified 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 accommodations, 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, 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 appropriate and 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
Other equipment 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 contingent liabilities, the liability for employee severance 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 Departmental 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)

2015 2014
Net cost of operations before government funding and transfers 240,905 249,471
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (259) (240)
Gain (loss) on disposal of tangible capital assets 13 9
Services provided without charge by other government departments (8,192) (7,936)
Decrease (increase) in vacation pay and compensatory leave 700 113
Decrease (increase) in employee future benefits (1,001) 843
Refund of prior year's expenditures 94 1,536
Prepaid expenses recognized (11) - 
Conditions met on contributions 9,050 3,120
Adjustments to prior years’ accruals 1,768 1,581
Correction to assistance type from repayable contribution to non-repayable 93 1,278
Outstanding recovery of operating expenses 103 133
Total items affecting net cost of operations but not affecting authorities 2,358 437
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 169 199
Assistance loans issued on behalf of Government 59,972 64,051
Transition payments for implementing salary payments in arrears 1,869 - 
Total items not affecting net cost of operations but affecting authorities 62,010 64,250
Current year authorities used 305,273 314,158

(b) Authorities provided and used 

(in thousands of dollars)

2015 2014
Authorities provided:
Vote 1 – Operating expenditures 68,604 74,726
Vote 5 – Grants and contributions 232,079 236,733
Statutory amounts 8,233 8,377
Less:
Total lapsed (3,630) (5,668)
Authorities available for future years (13) (10)
Current year appropriations used 305,273 314,158

4. Accounts Payable and Accrued Liabilities

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

(in thousands of dollars)

2015 2014
Accounts payable - Other payables to other government departments and agencies 605 1,585
Accounts payable - External parties 16,665 16,216
Accrued salaries and wages 3,965 1,996
Contractor’s holdback 753 402
21,988 20,199
Accrued liabilities 42,658 52,202
Gross accounts payable and accrued liabilities 64,646 72,401
Accrued liabilities held on behalf of Government (7,373) (8,815)
Net accounts payable and accrued liabilities 57,273 63,586

Accrued liabilities associated with 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 during the year is as follows:

(in thousands of dollars) 

2015 2014
Opening liability 347 156
Deposits 480 700
Payments (471) (509)
Closing liability 356 347

6. Employee Future Benefits

(a) Pension benefits

The Agency’s employees participate in the Public Service Pension Plan (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 2014-2015 expense amounts to $5,607,297 ($5,883,826 in 2013-2014). For Group 1 members, the expense represents approximately 1.41 times (1.6 times in 2013-2014) the employee contributions and, for Group 2 members, approximately 1.39 times (1.5 times in 2013-2014) 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)

2015 2014
Accrued benefit obligation – Beginning of year 2,706 3,549
Expenses for the year 1,585 2,889
Benefits paid during the year (584) (3,732)
Accrued benefit obligation – End of year 3,707 2,706

7. Accounts Receivable and Advances

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

(in thousands of dollars) 

2015 2014
Receivables from contributions
Conditionally repayable conditions met 13 11
Defaulted conditionally repayable contributions 3,780 9,358
Defaulted non-repayable contributions 287 250
Overpayments to be recovered 25 237
Receivables from other federal government departments and agencies 307 307
Receivables from external parties 1,636 3,238
Employee advances 2 3
6,050 13,404
Allowance for doubtful accounts on receivables from external parties (5,505) (11,162)
Gross accounts receivable 545 2,242
Accounts receivable held on behalf of Government (236) (1,932)
Net accounts receivable 309 310

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 2014-2015, an allowance of $3,897,589 ($9,656,355 in 2013-2014) relating to these loans was recorded. In 2014-2015, collections on conditionally repayable contributions amounted to $5,992,728 ($4,117,371 in 2013-2014).

In 2014-2015, the Agency wrote off $8,759,534 ($7,522,460 in 2013-2014) for accounts (including defaulted non repayable contributions) deemed uncollectible and where all possible avenues of collection have been exhausted. The write-off 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 $1,699 ($1,076 in 2013-2014).

Accounts receivable are considered financial assets held on behalf of Government and are not available to discharge the department’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) 

2015 2014
Loans receivable 347,258 336,026
Less: Unamortized discount on assistance loans (17,395) (24,402)
329,683 311,624
Less: Allowance for uncollectibility (70,428) (71,484)
Gross loans receivable 259,435 240,140
Loans receivable held on behalf of Government (259,435) (240,140)
Net loans receivable – –

These loans relate to unconditionally repayable contributions made to outside parties that must be repaid without qualification. An allowance of $70,428,306 ($71,484,178 in 2013-2014) relating to these loans was recorded.

The loans receivable portfolio consists of approximately 2,200 non-interest-bearing unconditionally repayable contributions issued, for the most part, from 2008 to 2015 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 2014-2015, collections on unconditionally repayable contributions amounted to $56,830,002 ($48,950,456 in 2013-2014). The Agency wrote off $13,723,313 ($15,616,048 in 2013-2014) for accounts deemed uncollectible and where all possible avenues of collection have been exhausted. The write-off 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 $5,653 ($49,335 in 2013-2014).

Loans receivable are considered a financial asset held on behalf of Government and are not available to discharge the department’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. Investments

The following table presents details of the Agency’s investments balances:
(in thousands of dollars) 

 

2015 

2014 

Preferred shares

 11,359

 -

Less: Allowance for write-down

 (7,777)

 -

Gross Investment

 3,582

 -

Investments held on behalf of Government

 (3,582)

 -

Net Investments

 -

 -

In order to help fulfill its mandate to promote economic development in the Cape Breton Region of Nova Scotia, Enterprise Cape Breton Corporation (ECBC) had taken equity interests in several companies in an effort to assist firms expand or innovate. 

10. Tangible Capital Assets

(in thousands of dollars)

Vehicles

Computer equipment

In-house- developed software

Machinery and equipment

Other equipment 

Total

Cost

Opening balance

934

334

1,895

98

–

3,261

Acquisitions

19

–

150

–

–

169

Adjustments

164

–

–

–

500 

664

Disposals and writeoffs

(78)

–

–

–

–

(78)

Closing balance

1,039

334

2,045

98

500 

4,016
 

Opening balance

570

297

1,669

14

– 

2,550

Amortization

155

17

80

7

– 

259

Adjustments

 66

–

–

–

427 

493

Disposals and writeoffs

(78)

–

–

–

– 

(78)

Closing balance

713

314

1,749

21

427

3,224

2015 Net book value

326

20

296

77

73

792

2014 Net book value

364

37

226

84

– 

711

On June 19, 2014, ECBC was dissolved and ECBC assets and obligations, except real property, were transferred to the Agency. Capital Assets totaling $664,166, less accumulated amortization of $493,615, were transferred following the dissolution and are reflected in the Adjustments line in the above totals. Refer to note 14 for further details on the transfers from ECBC.

11. 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) 

2016 2017 2018 2019 2020  Total
Transfer payments 151,741 43,745 16,733 3,188 350 215,757
Operations and maintenance   3,002 249 27 12 8 3,298
Total 154,743   43,994   16,760   3,200   358 219,055

12. 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 accommodations, 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 Agency’s Statement of Operations and Departmental Net Financial Position as follows: (in thousands of dollars)

2015 2014
Employer’s contribution to the health and dental insurance plans   4,124  4,036
Accommodation 3,697   3,885
Legal services 20 4
Workers’ compensation 351 11
Total 8,192 7,936

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 Departmental 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)

2015 2014
Canada Strategic Infrastructure Fund – Infrastructure Canada   2,660 -
Municipal Rural Infrastructure Fund – Infrastructure Canada - 57
Building Canada Fund – Communities Component – Regular 9,457 11,464

ACOA 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, ACOA receives operating funds through the estimates processes to cover expenditures charged to its own operating vote. These funds are reflected in ACOA’s operating expenses and the Agency incurred expenses in the delivery of the infrastructure programming.

(c) Other transactions with related parties

(in thousands of dollars)

2015 2014
Expenses – Other government departments and agencies   75 474

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

13. Transfer of Accounts Receivable to Public Works and Government Services

The Government of Canada implemented salary payments in arrears in 2014-2015. As a result, a one-time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay processes. This change to the pay system had no impact on the expenses of the Agency. However, it did result in the use of additional spending authorities by the Agency. Prior to year end, the transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Works and Government Services Canada, who is responsible for the administration of the Government pay system.

14. Transfer from Enterprise Cape Breton Corporation (Crown Corporation) to the Atlantic Canada Opportunities Agency

On June 19, 2014, adoption of Bill C-31 saw the dissolution of Enterprise Cape Breton Corporation (ECBC). All assets and obligation of ECBC, other than real property, were transferred to the Agency, including the stewardship responsibility for these assets and liabilities. (in thousands of dollars)

 2015
Assets
Cash  13,075
Accounts Receivable  172
Loans Receivable  12,285
Investments  3,582
Prepaid assets  27
Capital assets  171
Total assets received  29,312
Liabilities
Accounts Payable  6,584
Vacation pay and compensatory leave  70
Total assets received  6,654
Adjustment to the Agency's net financial position  22,658

15. 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

2015

Total

2014

Transfer Payments

            

Conditionally repayable

            

Industry

28,000

–

–

–

28,000

28,440

Conditions met

(9,048)

(3)

–

–

(9,051)

(3,120)

Total conditionally repayable

18,952

(3)

–

–

18,949

25,320

Non-repayable

            

Industry

8,009

–

–

–

8,009

7,729

Non-profit organizations

51,213

65,260

–

3,844

120,317

117,551

Other levels of Government

587

14,101

–

–

14,688

17,686

Total non-repayable

59,809

79,361

–

3,844

143,014

142,966

Adjustments to prior year’s accruals on transfer payments

(1,717)

(19)

–

(32)

(1,768)

(1,508)

Loan discount portion on assistance loans

(4,968)

–

–

–

(4,968)

13,645

Provision for impaired loans and accounts receivable

9,631

–

–

–

9,631

(848) 

Expenses incurred on behalf of Government

(4,663)

–

–

–

(4,663)

(12,797)

Total transfer payments

77,044

79,339

–

3,812

160,195

166,778

Operating expenses

            

Personnel

24,397

10,948

21,845

7,578

64,768

65,046

Professional services

999

351

3,127

721

5,198

6,811

Transportation and telecommunications

953

366

765

273

2,357

2,509

Accommodations

1,392

625

1,245

435

3,697

3,885

Rental

50

80

1,846

79

2,055

1,933

Equipment (less than $10,000 per item)

 –

3

643

3

649

666

Information

30

17

280

97

424

342

Utilities, material, supplies

8

16

279

46

349

386

Purchased repair and maintenance

–

3

904

–

907

603

Amortization of tangible capital assets

–

–

259

–

259

240

Miscellaneous expenses

3

3

44

10

60

281

Total operating expenses

27,832

12,412

31,237

9,242

80,723

82,702

Total expenses

104,876

91,751

31,237

13,054

240,918

249,480

Revenues

            

Revenue from amortization of discount on assistance loans

5,568

–

–

–

5,568

6,506

Interest on overdue loans

918

–

–

–

918

356

Interest on bank deposits

 –

–

137 

–

137

–

Gain on disposal of tangible capital and non-capital assets

–

–

13

–

13

10

Miscellaneous revenues

3

–

3

–

6

5

Revenues earned on behalf of Government

(6,489)

–

(140)

–

(6,629)

(6,868)

Total revenues

–

–

13

–

13

9

Net cost of operations

104,876

91,751

31,224

13,054

240,905

249,471

Page details

2020-05-27