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2015-16 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, 2016, and all information contained in these statements rests with the management of the Atlantic Canada Opportunities Agency (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 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: August 31, 2016 Denise Frenette, CPA, CA Chief Financial Officer Moncton, Canada Date: August 31, 2016

 

 

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

2016 2015
   
Liabilities
Accounts payable and accrued liabilities (note 4) 62,713 64,646
Vacation pay and compensatory leave 2,019 1,338
Other liabilities (note 5) 150 356
Employee future benefits (note 6) 3,522 3,707
Total gross liabilities 68,404 70,047
Liabilities held on behalf of Government
Accounts payable and accrued liabilities (note 4) (7,344) (7,373)
Total liabilities held on behalf of Government (7,344) (7,373)
Total net liabilities 61,060 62,674
Financial assets
Due from Consolidated Revenue Fund 53,306 57,113
Accounts receivable and advances (note 7) 2,125 545
Loans receivable (note 8) 246,718 259,435
Investments (note 14) 3,577 3,582
Total gross financial assets 305,726 320,675
Financial assets held on behalf of Government
Accounts receivable and advances (note 7) (162) (236)
Loans receivable (note 8) (246,718) (259,435)
Investments (note 14) (3,577) (3,582) 
Total financial assets held on behalf of Government (250,457) (263,253)
Total net financial assets 55,269 57,422
Agency net debt 5,791 5,252
Non-financial assets
Prepaid expenses - 16
Tangible capital assets (note 9) 695 792
Total non-financial assets 695 808
Agency net financial position (5,096) (4,444)

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, Canada Date: August 31, 2016 Denise Frenette, CPA, CA Chief Financial Officer Moncton, Canada Date: August 31, 2016

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

2016 Planned Results 2016 2015
Expenses
Enterprise Development 128,641 126,933 109,539
Community Development 91,607 92,925 91,751
Internal Services 28,402 29,194 31,237
Policy, Advocacy and Coordination 12,668 12,838 13,054
Expenses incurred on behalf of Government (20,436) (30,668) (4,663)
Total expenses 240,882 231,222 240,918
Revenues
Revenue from amortization of discount on assistance loans 8,516 3,972 5,568
Interest on overdue loans 404 483 918
Interest on bank deposits - 14 137
Gain on disposal of tangible capital and non-capital assets 18 17 13
Miscellaneous revenues 38 2 5
Revenues earned on behalf of Government (8,958) (4,471) (6,628)
Total revenues 18 17 13
Net cost of operations 240,864 231,205 240,905
Net cost of operations before government funding and transfers 231,205 240,905
Government funding and transfers
Net cash provided by Government 226,339 217,953
Change in due from Consolidated Revenue Fund (3,807) (6,429)
Services provided without charge by other government departments (note 11) 8,035 8,192
Transfer of Accounts Receivable to Public Services and Procurement Canada (note 12) (14) (1,869)
Transfer of assets and liabilities from a Crown Corporation (note 13) - 22,658
Net cost of operations after government funding and transfers 652 400
Departmental net financial position – Beginning of year (4,444) (4,044)
Departmental net financial position – End of year (5,096) (4,444)

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 Departmental Net Debt (Unaudited) For the Year Ended March 31
(in thousands of dollars)

2016 2015
Net cost of operations after government funding and transfers 652 400
Change due to tangible capital assets
Acquisition of tangible capital assets 159 169
Amortization of tangible capital assets (256) (259)
Proceeds from disposal of tangible capital assets (17) (13)
Net gain on disposal of tangible capital assets, including adjustments 17 13
Transfer from other government departments - -
Transfer from a Crown Corporation - 198
Total change due to tangible capital assets (97) 108
Change due to prepaid expenses (16) (11)
Net increase (decrease) in departmental net debt 539 497
Agency net debt – Beginning of year 5,252 4,755
Agency net debt – End of year 5,791 5,252

 

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) 

2016 2015
Operating activities
Net cost of operations before government funding and transfers 231,205 240,905
Non-cash items:
Amortization of tangible capital assets (256) (259)
Gain on disposal of tangible capital assets 17 13
Services provided without charge by other government departments (note 12) (8,035) (8,192)
Transition payments for implementing salary payments in arrears (note 13) 14 1,869
Variations in Statement of Financial Position:
Increase (decrease) in prepaid expenses (16) (11)
Increase (decrease) in accounts receivable and advances 1,654 (1)
Decrease (increase) in accounts payable and accrued liabilities 1,904 6,313
Decrease (increase) in vacation pay and compensatory leave (681) 700
Decrease (increase) in other liabilities 206 (9)
Decrease (increase) in employee future benefits 185 (1,001)
Transfer from Crown Corporation - (22,530)
Cash used in operating activities 226,197 217,797
Capital investing activities
Acquisition of tangible capital assets (note 9) 159 169
Proceeds from disposal of tangible capital assets (17) (13)
Cash used in capital investing activities 142 156
Net cash provided by Government of Canada 226,339 217,953

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 2015-16 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 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 deputy head 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)

2016 2015
Net cost of operations before government funding and transfers 231,205 240,905
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (256) (259)
Gain (loss) on disposal of tangible capital assets 17 13
Services provided without charge by other government departments (8,035) (8,192)
Decrease (increase) in vacation pay and compensatory leave (681) 700
Decrease (increase) in employee future benefits 185 (1,001)
Refund of prior year's expenditures 116 94
Prepaid expenses recognized (16) (11)
Conditions met on contributions 19,382 9,050
Adjustments to prior years’ accruals 1,721 1,768
Correction to assistance type from repayable contribution to non-repayable (77) 93
Outstanding recovery of operating expenses (20) 103
Total items affecting net cost of operations but not affecting authorities 12,336 2,358
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 159 169
Assistance loans issued on behalf of Government 57,895 59,972
Transition payments for implementing salary payments in arrears 14 1,869
Total items not affecting net cost of operations but affecting authorities 58,068 62,010
Current year authorities used 301,609 305,273

(b) Authorities provided and used 

(in thousands of dollars)

2016 2015
Authorities provided:
Vote 1 – Operating expenditures 67,652 68,604
Vote 5 – Grants and contributions 230,746 232,079
Statutory amounts 7,842 8,233
Less:
Total lapsed 4,627) (3,630)
Authorities available for future years (4) (13)
Current year appropriations used 301,609 305,273

4. Accounts Payable and Accrued Liabilities

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

(in thousands of dollars)

2016 2015
Accounts payable - Other payables to other government departments and agencies 328 605
Accounts payable - external parties 14,690 16,665
Accrued salaries and wages 4,238 3,965
Contractor’s holdback 654 753
19,910 21,988
Accrued liabilities 42,803 42,658
Gross accounts payable and accrued liabilities 62,713 64,646
Accrued liabilities held on behalf of Government (7,344) (7,373)
Net accounts payable and accrued liabilities 55,369 57,273

Accrued liabilities associated with the loans receivable are considered accrued liabilities held on behalf of Government. While the deputy head 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) 

2016 2015
Opening liability 356 347
Deposits 260 480
Payments (466) (471)
Closing liability 150 356

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 2015-16 expense amounts to $5,383,019 ($5,607,297 in 2014-15). For Group 1 members, the expense represents approximately 1.25 times (1.41 times in 2014-15) the employee contributions and, for Group 2 members, approximately 1.24 times (1.39 times in 2014-15) 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)

2016 2015
Accrued benefit obligation – Beginning of year 3,707 2,706
Expenses for the year 182 1,585
Benefits paid during the year (367) (584)
Accrued benefit obligation – End of year 3,522 3,707

7. Accounts Receivable and Advances

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

(in thousands of dollars) 

2016 2015
Receivables from contributions
Conditionally repayable conditions met - 13
Defaulted conditionally repayable contributions 9,411 3,780
Defaulted non-repayable contributions 468 287
Overpayments to be recovered 22 25
Receivables from other federal government departments and agencies 1,961 307
Receivables from external parties 1,517 1,636
Employee advances 2 2
13,381 6,050
Allowance for doubtful accounts on receivables from external parties (11,256) (5,505)
Gross accounts receivable 2,125 545
Accounts receivable held on behalf of Government (162) (236)
Net accounts receivable 1,963 309

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 2015-16, an allowance of $9,289,742 ($3,897,589 in 2014-15) relating to these loans was recorded.

In 2015-16, collections on conditionally repayable contributions amounted to $6,360,497 ($5,992,728 in 2014-15).
In 2015-16, the Agency wrote off $7,212,535 ($8,759,534 in 2014-15) for accounts (including defaulted non-repayable contributions) deemed uncollectible and where all possible avenues of collection were 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 $311,097 ($1,699 in 2014-15).

Accounts receivable are considered financial assets held on behalf of Government and are not available to discharge the department’s liabilities. While the deputy head 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) 

2016 2015
Loans receivable 339,128 347,258
Less: Unamortized discount on assistance loans (15,836) (17,395)
323,292 329,863
Less: Allowance for uncollectibility (76,574) (70,428)
Gross loans receivable 246,718 259,435
Loans receivable held on behalf of Government (246,718) (259,435)
Net loans receivable – –

These loans relate to unconditionally repayable contributions made to outside parties that must be repaid without qualification. An allowance of $76,574,189 ($70,428,306 in 2014-15) relating to these loans was recorded.

The loans receivable portfolio consists of approximately 2,100 non-interest-bearing unconditionally repayable contributions issued, for the most part, from 2009 to 2016 with prescribed annual repayment terms. The loans are recorded at their discounted net present value using market interest rates at the time of the loans.

In 2015-16, collections on unconditionally repayable contributions amounted to $56,595,205 ($56,830,002 in 2014-15). The Agency wrote off $9,386,233 ($13,723,313 in 2014-15) for accounts deemed uncollectible and where all possible avenues of collection were 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 $240,839 ($5,653 in 2014-15).

Loans receivable are considered a financial asset held on behalf of Government and are not available to discharge the department’s liabilities. While the deputy head 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 Other equipment Total
Cost
Opening balance 1,039 334 2,045 98 500 4,016
Acquisitions 44 – 115 – – 159
Disposals and write-offs (118) – – – – (118)
Closing balance 965 334 2,160 98 500 4,057
Opening balance 713 314 1,749 21 427 3,224
Amortization 130 17 102 7 – 256
Disposals and write-offs (118) – – – – (118)
Closing balance 725 331 1,851 28 427 3,362
2016 net book value 240 3 309 70 73 695
2015 net book value 326 21 295 77 73 792

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) 

2017 2018 2019 2020 2021 Total
Transfer payments 221,605 53,112 9,270 1,221 53 285,261
Operations and maintenance 10,420 763 620 540 4 12,347
Total 232,025 53,875 9,890 1,761 57 297,608

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 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)

2016 2015
Employer’s contribution to the health and dental insurance plans 4,160 4,124
Accommodation 3,796 3,697
Legal services 37 20
Workers’ compensation 42 351
Total 8,035 8,192

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 Services and Procurement Canada and the 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)

2016 2015
Canada Strategic Infrastructure Fund – Infrastructure Canada - 2,660
Building Canada Fund – Communities Component – Regular 7,445 9,457

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 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)

2016 2015
Expenses – Other government departments and agencies - 75

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

12. Transfer of the Transition Payments for Implementing Salary Payments in Arrears

The Government of Canada implemented salary payments in arrears in 2014-15. As a result, a one-time payment was issued to employees and will be recovered from them in the future. Employees that were on leave without pay when the initial one-time transition payments were issued will receive the transition payment shortly after their return to work from their leave without pay. 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 Services and Procurement Canada, which is responsible for the administration of the government pay system.

13. 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 obligations of ECBC, other than real property, were transferred to the Agency, including the stewardship responsibility for these assets and liabilities. (in thousands of dollars)

Assets 2015
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 Liabilities received 6,654
Adjustment to the Agency's net financial position 22,658

14. Investments 

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

2016 2015
Preferred shares 11,359 11,359
Redemption of preferred shares (5) -
11,354 11,359
Less: Allowance for write-down (7,777) (7,777)
Gross Investments 3,577 3,582
Investments held on behalf of Government (3,577) (3,582)
Net Investments - -

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

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 expense 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 2016 Total 2015
Transfer Payments
Conditionally repayable
Industry 27,387 145 – – 27,532 28,000
Conditions met / Defaults (19,382) - – – (19,382) (9,051)
Total conditionally repayable 8,005 145 – – 8,150 18,949
Non-repayable
Industry 9,566 - – – 9,566 8,009
Non-profit organizations 52,876 64,536 – 2,918 120,330 120,317
Other levels of Government 410 15,091 – – 15,501 14,688
Total non-repayable 62,852 79,627 – 2,918 145,397 143,014
Adjustments to prior year’s accruals on transfer payments (1,715) (6) – - (1,721) (1,768)
Loan discount portion on assistance loans 2,414 – – – 2,414 (4,968)
Provision for impaired loans and accounts receivable 28,254 – – – 28,254 9,631 
Expenses incurred on behalf of Government (30,668) – – – (30,668) (4,663)
Total transfer payments 69,142 79,766 – 2,918 151,826 160,195
Operating expenses
Personnel 23,883 11,575 21,315 8,161 64,934 64,768
Professional services 664 464 2,205 769 4,102 5,198
Transportation and telecommunications 1,097 326 664 306 2,393 2,357
Accommodations 1,396 677 1,246 477 3,796 3,697
Rental 52 80 1,896 99 2,127 2,055
Equipment (less than $10,000 per item) – - 602 1 603 649
Information 17 19 289 11 336 424
Utilities, material, supplies 14 15 275 96 400 349
Purchased repair and maintenance – 3 453 – 456 907
Amortization of tangible capital assets – – 256 – 256 259
Miscellaneous expenses - - (7) - (7) 60
Total operating expenses 27,123 13,159 29,194 9,920 79,396 80,723
Total expenses 96,265 92,925 29,194 12,838 231,222 240,918
Revenues
Revenue from amortization of discount on assistance loans 3,972 – – – 3,972 5,568
Interest on overdue loans 481 – – 2 483 918
Interest on bank deposits 14 –

-

 – 14  137 
Gain on disposal of tangible capital and non-capital assets – – 17 – 17 13
Miscellaneous revenues 2 – - – 2 6
Revenues earned on behalf of Government (4,469) – - (2) (4,471) (6,629)
Total revenues – – 17 – 17 13
Net cost of operations 96,265 92,925 29,177 12,838 231,205 240,905
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