2018-2019 Departmental Results Report financial statements

Atlantic Canada Opportunities Agency
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, 2019, and all information contained in these financial statements rests with the management of the Atlantic Canada Opportunities Agency (Agency). These financial statements have been prepared by management using the Government of Canada'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 Results 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 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 Financial Management.

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 are posted on the departmental web site at www.canada.ca/en/atlantic-canada-opportunities/corporate/transparency/audits.html.

The financial statements of the Agency have not been audited.

Approved by Senior Officials
Approved by:

Francis P. McGuire, Deputy Head
Moncton, Canada
Date: September 5, 2019

Stéphane Lagacé, CPA-CMA, Chief Financial Officer
Moncton, Canada
Date: September 5, 2019

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

  2019 2018
Liabilities    
     Accounts payable and accrued liabilities (Note 4) 66,789 62,166
     Vacation pay and compensatory leave 2,238 3,378
     Other liabilities (Note 5) 1,005 392
     Employee future benefits (Note 6) 2,420 2,687
     Total gross liabilities 72,452 68,623
     
Liabilities held on behalf of Government    
     Accounts payable and accrued liabilities (Note 4) (11,558)    (9,042)
Total liabilities held on behalf of Government (11,558) (9,042)
     
Total net liabilities 60,894   59,581
     
Financial assets    
     Due from Consolidated Revenue Fund 55,013 52,987
     Accounts receivable and advances (Note 7) 1,021 1,783
     Loans receivable (Note 8) 293,906 267,692
     Investments (Note 9) 3,491 3,492
Total gross financial assets 353,431 325,954
     
Financial assets held on behalf of Government    
     Accounts receivable and advances (Note 7) (562) (1,520)
     Loans receivable (Note 8) (293,906) (267,692)
     Investments (Note 9) (3,491) (3,492)
Total financial assets held on behalf of Government (297,959) (272,704)
     
Total net financial assets 55,472 53,250
     
Agency net debt 5,422 6,331
     
Non-financial assets    
     Tangible capital assets (Note 10) 2,007 1,553
Total non-financial assets 2,007 1,553
     
Agency net financial position (3,415) (4,778)

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:

Francis P. McGuire, Deputy Head
Moncton, Canada
Date: September 5, 2019

Stéphane Lagacé, CPA-CMA, Chief Financial Officer
Moncton, Canada
Date: September 5, 2019

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

  2019
Planned
Results
2019 2018
Expenses      
     Economic Development 277,527  234,961 263,861 
     Internal Services 30,163 28,410 29,146
     Expenses incurred on behalf of Government (Discount and ADA) (31,303) (6,985) (24,822)
Total expenses 276,387 256,386 268,185
       
Revenues      
     Revenue from amortization of discount on assistance loans 8,326 7,376 5,874
     Interest on overdue loans 484 403 802
     Dividend on investments - 10 7
     Gain on disposal of tangible capital and non-capital assets 19 23 -
     Miscellaneous revenues 24 7 5
     Revenues earned on behalf of government (8,834) (7,796) (6,688)
Total revenues 19 23 -
Net Cost of operations 276,368 256,363 268,185
       
Net cost of operations before government funding and transfers   256,363 268,185
Government funding and transfers      
     Net cash provided by Government   247,371 260,699
     Change in due from Consolidated Revenue Fund   2,026 (1,512)
     Services provided without charge by OGDs (Note 12)   8,329 8,569
Net cost of operations after government funding and transfers   (1,363) 429
Departmental net financial position - Beginning of year   (4,778) (4,349)
Departmental net financial position - End of year   (3,415) (4,778)

For information on segmented information, see note 13.

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)

  2019 2018
Net cost of operations after government funding and transfers (1,363) 429
Change due to tangible capital assets    
     Acquisition of tangible capital assets 664 696
     Amortization of tangible capital assets (193) (195)
     Proceeds from disposal of tangible capital assets (27) (5)
     Net (loss) or gain on disposal of tangible capital  assets, including adjustments 10 (5)
Total change due to tangible capital assets 454 491
     
Net increase (decrease) in departmental net debt (909) 920
     
Departmental net debt – Beginning of year 6,331 5,411
     
Departmental net debt – End of year 5,422 6,331

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)

  2019 2018
Operating activities    
     Net cost of operations before government funding and transfers 256,363 268,185
     Non cash items :    
          Amortization of tangible capital assets (193) (195)
          Gain on disposal and write-down of tangible capital assets 10 (5)
          Services provided without charge by other government departments (note 12) (8,329) (8,569)
     Variations in Statement of Financial Position :    
          Increase (decrease) in accounts receivables and advances 196 (827)
          Decrease (increase) in accounts payable and accrued liabilities (2,107) 2,371
          Decrease (increase) in vacation pay and compensatory leave 1,140 (846)
          Decrease (increase) in other liabilities (613) (106)
          Decrease (increase) in employee future benefits 267 0
     Cash used by operating activities 246,733 260,008
     Capital investing activities    
          Acquisition of tangible capital assets (note 10) 664 696
          Proceeds from  disposal of tangible capital assets (27) (5)
     Cash used in capital investing activities 638 691
     Net cash provided by Government of Canada 247,371 260,699

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 support Atlantic Canada’s economic growth, wealth creation and economic prosperity through inclusive clean growth and building on competitive regional strengths. ACOA helps small and medium-sized enterprise (SME) growth through direct financial assistance and indirectly to business support organizations. SMEs become more innovative by adopting new technologies and processes and pursuing new avenues for expansion and market diversification in order to compete and succeed in a global market.
ACOA invests in the economic diversification of communities to:

ACOA supports business investments in the development and commercialization of innovative technologies in Atlantic Canada through:

ACOA invests in innovation and growth of Atlantic Canadian businesses to:

ACOA embraces its culture of innovation, collaboration and engagement. The Agency is constantly finding new ways to work differently and more effectively with stakeholders, both within the federal government as well as with other levels of government and community counterparts.

In 2018-19, ACOA transitioned from its Program Alignment Architecture, which was required under the previous Policy on Management, Resources and Results Structures, to a Departmental Results Framework, required under the new Policy on Results. In addition, it continued to implement organizational initiatives to strengthen and improve the efficiency of service and program delivery. It will continue to collaborate with other regional development agencies to improve upon the efficient delivery of programs and services to Canadians.

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

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 2018-2019 Departmental Plan.

(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.

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

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 – The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially-determined liability for employee severance benefits for the Government 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.

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

(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.

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

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)

  2019 2018
Net Cost of Operations before government funding and transfers 256,363 268,185
Adjustments for items affecting net cost of operations but not affecting authorities:    
     Amortization of tangible capital assets (193) (195)
     Gain (loss) on disposal of tangible capital assets 10 (5)
     Receivable for disposal of crown assets 14 -
     Services provided without charge by other government departments (8,329) (8,569)
     Decrease (increase) in vacation pay and compensatory leave 1,140 (846)
     Decrease (increase) in employee future benefits 267 -
     Refund of prior years' expenditures 57 35
     Conditions met on contributions 14,316 17,624
     Adjustments to prior years' accrual 370 1,173
     Correction to assistance type from repayable contribution to non-repayable 916 1,510
     Outstanding recovery of operating expenses 30 40
     Adjustments to investment account - (82)
Total of items affecting net cost of operations but not affecting authorities 8,598 10,685
Adjustments for items not affecting net cost of operations but affecting authorities:    
     Acquisitions of tangible capital assets 664 696
     Assistance loans issued on behalf of Government 83,942 79,420
     Salary Overpayments 31 -
Total items not affecting net cost of operations but affecting authorities 84,637 80,116
Current year authorities used 349,598 358,986

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

(b) Authorities provided and used

(in thousands of dollars)

  2019 2018
Authorities provided:    
     Vote 1 - Operating expenditures 70,428 69,939
     Vote 5 - Grants and contributions 290,438 283,971
     Statutory amounts 8,079 8,035
Less:    
     Total lapsed (19,307) (2,953)
     Authorities available for future years (40) (6)
Current year appropriations used 349,598 358,986

4. Accounts Payable and Accrued Liabilities

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

(in thousands of dollars)

  2019 2018
Accounts payable - Other payables to other government departments 331 309
Regular accounts payable    18,014 16,133
Accrued salaries and wages 5,238 4,349
Contractor's holdback 602 865
Subtotal 24,185 21,656
Accrued liabilities 42,604 40,510
Gross accounts payable and accrued liabilities 66,789 62,166
Accrued liabilities held on behalf of government (11,558) (9,042)
Net accounts payable and accrued liabilities 55,231 53,124

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.

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

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)

  2019 2018
Opening liability 392 286
Deposits 3,790 2,954
Payments (3,177) (2,848)
Closing liability 1,005 392

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 2018-2019 expense amounts to $ 5,561,011 ($5,453,945 in 2017-2018). For Group 1 members, the expense represents approximately 1.01 times (same in 2017-2018) the employee contributions and, for Group 2 members, approximately 1.00 times (same in 2017-2018) 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)

  2019 2018
Accrued benefit obligation - Beginning of year 2,687 2,687
Expenses for the year 33 280
Benefits paid during the year (300) (280)
Accrued benefit obligation - End of year 2,420 2,687

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

7. Accounts Receivable and Advances

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

(in thousands of dollars)

  2019 2018
Receivables from contributions    
     Conditionally repayables conditions met 32 1
     Defaulted conditionally repayable contributions 8,499 6,365
     Defaulted non-repayable contributions 348 292
     Overpayments to be recovered (11233) 259 77
Receivables from other federal government departments and agencies 352 261
Receivables from external parties 66 1,391
Salary overpayment 107 2
  9,663 8,389
Allowance for doubtful accounts on receivables from external parties (8,642) (6,606)
Gross accounts receivable 1,021 1,783
Accounts receivable held on behalf of Government (562) (1,520)
Net accounts receivable (Receivable OGD + Empl advances) 459 263

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 2018-2019, an allowance of $8,313,142 ($6,319,613 in 2017-2018) relating to these loans was recorded.

In 2018-2019, collections on conditionally repayable contributions amounted to $12,256,712 ($12,015,445 in 2017-2018).

In 2018-2019, the Agency’s write-offs were nil ($5,430,342 in 2017-2018) 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 Accounts Receivable that were written off were nil for fiscal year 2018-19 ($1,425 in 2017-2018).

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.

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

8. Loans Receivable

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

(in thousands of dollars)

  2019 2018
Loans receivable 384,047 360,261
     Less: Unamortized discount on assistance loans (26,201) (32,755)
  357,846 327,506
     Less: Allowance for uncollectibility (63,940) (59,814)
Gross loans receivable 293,906 267,692
Loans receivable held on behalf of Government (293,906) (267,692)
Net loans receivable - -

These loans relate to unconditionally repayable contributions made to outside parties that must be repaid without qualification. An allowance of $63,940,454 ($59,813,812 in 2017-2018) relating to these loans was recorded.

The loans receivable portfolio consists of approximately 2,000 non-interest-bearing unconditionally repayable contributions issued, for the most part, from 2011 to 2018 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 2018-2019, collections on unconditionally repayable contributions amounted to $60,997,869 ($59,148,013 in 2017-2018). The Agency’s write-offs were nil ($9,797,417 in 2017-2018) 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 Receivable that were written off were nil in 2018-19 ($10,810 in 2017-2018).

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 investment balances:

(in thousands of dollars)

  2019 2018
Preferred shares 6,812 6,818
Redemption of Preferred Shares (2) (6)
  6,810 6,812
     Less: Allowance for write-down (3,319) (3,320)
Gross Investment 3,491 3,492
Investment held on behalf of Government (3,491) (3,492)
Net Investment - -

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

In order to help fulfill its mandate to promote economic development in the Cape Breton Region of Nova Scotia, the former 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 987 334 3,188 169 500 5,178
Acquisitions 186 - 478 - - 664
Disposals and writeoffs (149) - - (26) - (175)
Closing balance 1,024 334 3,666 143 500 5,667
Accumulated amortization
Opening balance 769 334 2,049 46 427 3,625
Amortization 83 - 100 10 - 193
Disposals and writeoffs (145) - - (13) - (158)
Closing balance 707 334 2,149 43 427 3,660
2019 Net book value 317 - 1,517 100 73 2,007
2018 Net book value 218 - 1,139 123 73 1,553

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)

  2020 2021 2022 2023 Total
Transfer payments 309,010 93,358 19,436 5,013 426,817
Operations and maintenance  7,785  623  243  78  8,729
Total 316,795  93,981  19,679  5,091  435,546

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.

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

(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)

  2019 2018
Employer's contribution to the health and dental insurance plans 4,428 4,727
Accommodation (PWGSC) 3,705 3,634
Legal Service (Justice) 196 197
Worker's compensation (HRSDC) - 11
Total 8,329 8,569

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 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.

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

13.  Segmented Information

Presentation by segment is based on the Agency’s departmental results framework 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)

  Economic Development Internal Services 2019 Total 2018 Total
Transfer Payments        
Conditionally repayable        
Industry 32,760 - 32,760 23,718
Conditions met (14,316) - (14,316) (17,624)
Total conditionally repayable 18,444 - 18,444 6,094
Non-repayable -   -  
     Industry 9,832 - 9,832 6,557
     Non-profit organizations 139,213 - 139,213 150,988
     Other levels of government 9,474 - 9,474 21,778
Total non-repayable 158,519 - 158,519 179,323
Adjustments to prior year's accruals on transfer payments (370) - (370) (1,173)
Loan discount portion on assistance loans 822 - 822 7,716
Provision for impaired loans and accounts receivable 6,163 - 6,163 17,106
Expenses incurred on behalf of government (6,985) - (6,985) (24,822)
Total transfer payments 176,593 - 176,593 184,244
  -   -  
Operating expenses -   -  
Personnel 44,473 20,652 65,125 70,073
Professional services 1,794 1,805 3,599 4,102
Transportation and telecommunications 2,185 866 3,051 2,519
Accommodations 2,529 1,175 3,704 3,634
Rental 215 1,855 2,070 2,121
Equipment (less than $10,000 per item) 21 516 537 439
Information 207 362 569 538
Utilities, material, supplies 126 237 363 370
Purchased repair and maintenance 21 146 167 343
Amortization of tangible capital assets - 193 193 195
Miscellaneous expenses (188) 603 415 (393)
Total operating expenses 51,383 28,410 79,793 83,941
Total expenses 227,976 28,410 256,386 268,185
Revenues        
Revenue from amortization of discount on assistance loans 7,376 - 7,376 5,874
Interest on overdue loans 403 - 403 802
Dividend on investments  10 - 10 7
Gain on disposal of tangible capital and non-capital assets - 23 23 -
Miscellaneous revenues 7 - 7 5
Revenues earned on behalf of government (7,796) - (7,796) (6,688)
Total revenues - 23 23 -
Net cost from continuing operations 227,976 28,387 256,363 268,185

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