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.
- Enterprise Development – ACOA works in partnership with Atlantic Canadian businesses, stakeholders, industry and institutions to improve the growth and productivity of Atlantic Canada’s economy, leading to increased competitiveness, earned incomes and job creation. ACOA works to improve the capacity of Atlantic Canada’s rural and urban areas for economic growth through a variety of strategically focused mechanisms, which include the following: assisting businesses, particularly small and medium-sized enterprises (SMEs), to start, expand or modernize, and to establish and expand export activities; partnering with universities and other institutions to increase the region’s research and development (R&D) capacity, commercialization and productivity; and promoting and participating in the region’s transition to a knowledge-based economy.
- Community Development – ACOA focuses targeted efforts and strategies toward community development and also aims to provide and maintain quality public infrastructure. ACOA develops and delivers programming that meets the unique economic development needs of rural areas in Atlantic Canada and that contributes to a stronger region. The Agency also aims to support research and analysis that assesses the specific needs of these diverse areas, enabling them to capitalize on emerging opportunities such as shipbuilding and energy. ACOA works in co-operation with other levels of government, other federal government departments, non-government organizations and community groups to leverage support, coordinate economic development, and react to economic challenges across the region. This requires a flexible, balanced approach based on the realities of a given community’s capacities, strengths and challenges. Community development is a multi-stakeholder process that helps to develop the tools, resources and initiatives that support the development of a particular area.
- Policy, Advocacy and Coordination – The Agency’s Policy, Advocacy and Coordination (PAC) program is central to identifying and effectively responding to opportunities and challenges facing the regional economy. PAC provides intelligence, analysis and well-grounded advice on a broad range of issues and topics, and it informs and supports Agency and ministerial decision making. PAC helps carry the Agency’s agenda forward and ensure that ACOA overall remains relevant and responsive to the opportunities and challenges in Atlantic Canada by offering strategic, researched policy positions that reflect the region’s potential, by influencing national policies and programs that affect Atlantic Canada's development and interests, and by coordinating other policies and programs within the region to form integrated approaches to development.
- Internal Services – Internal Services are groups of related activities and resources administered to support the needs of programs and other corporate obligations of an organization. These activities and resources include the following: management and oversight services, communications services, legal services, human resources management services, financial management services, information management services, information technology services, real property services, materiel services, acquisition services, and travel and other administrative services.
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 |
Report a problem or mistake on this page
- Date modified: