Canadian Heritage financial statements for the year ended March 31, 2020

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List of acronyms

PCH
Department of Canadian Heritage
ICFM
Internal control over financial management
ICFR
Internal control over financial reporting
OLMCs
Official-language minority communities
CRF
Consolidated Revenue Fund
EAP
Educational assistance payment

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, 2020, and all information contained in these statements rests with the senior management of the Department of Canadian Heritage (PCH). These financial statements have been prepared using the Government of Canada Accounting Handbook, which is based on Canadian public sector accounting standards.

Some of the information in these 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 PCH’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in PCH’s Departmental Results Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial management (ICFM), including internal control over financial reporting (ICFR), which is 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 PCH and through conducting an annual risk assessment of the effectiveness of the system of ICFM.

The system of ICFM, including ICFR, is designed to mitigate risks to a reasonable level based on the ongoing monitoring of the key risks, to assess the effectiveness of associated key controls and to make any necessary adjustments.

A risk-based assessment of the system of ICFM, including ICFR, for the year ended March 31, 2020, was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.

The effectiveness and adequacy of PCH’s system of internal control is reviewed by the work of internal control and internal audit staff, who conduct periodic reviews and audits of different areas of PCH’s operations. Additionally, the Departmental Audit Committee oversees management responsibilities for maintaining adequate control systems and the quality of financial reporting.

The financial statements of the Department of Canadian Heritage have not been audited.

Original signed

Helene Laurendeau
Deputy Minister

Éric Doiron
Chief Financial Officer

Gatineau, Canada
Date: October 9th, 2020

Table 1. Statement of Financial Position (Unaudited) as at March 31 (in thousands of dollars)
2020 2019
Liabilities
Accounts payable and accrued liabilities (note 4) 397,634 432,357
Vacation pay 12,206 9,820
Employee future benefits (note 5) 7,051 7,517
Other liabilities 1,793 818
Total net liabilities 418,684 450,512
Financial assets
Due from the Consolidated Revenue Fund (note 2) 394,246 430,675
Accounts receivable and advances (note 6) 10,068 6,695
Total gross financial assets 404,314 437,370
Financial assets held on behalf of government
Accounts receivable and advances (note 6) (121) (48)
Total financial assets held on behalf of government (121) (48)
Total net financial assets 404,193 437,322
Net debt 14,491 13,190
Non-financial assets
Prepaid expenses 449 440
Inventory (note 7) 1,700 1,585
Tangible capital assets (note 8) 14,241 20,730
Total non-financial assets 16,390 22,755
Net financial position 1,899 9,565

Contractual obligations (note 9)

Contingent liabilities (note 10)

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

Original signed

Helene Laurendeau
Deputy Minister

Éric Doiron
Chief Financial Officer

Gatineau, Canada
Date: October 9th,2020

Table 2. Statement of Operations and Net Financial Position (Unaudited) for the year ended March 31 (in thousands of dollars).
2020 Planned Results 2020 2019
Expenses
Creativity, Arts and Culture 485,251 555,581 497,522
Heritage and Celebration 108,131 130,745 124,922
Sport 233,029 243,243 229,232
Diversity and Inclusion 101,768 134,579 96,898
Official Languages 438,466 422,152 393,102
Internal Services 82,067 102,185 96,796
Total expenses 1,448,712 1,588,485 1,438,472
Revenues
Revenue from the 1979 Federal-provincial Lottery-agreement 77,434 77,258 75,868
Miscellaneous revenues 5,403 6,174 5,862
Sale of goods and services 4,731 2,969 4,504
Revenues earned on behalf of Government (77,516) (77,434) (76,118)
Total revenues 10,052 8,967 10,116
Net cost of operations before government funding and transfers 1,438,660 1,579,518 1,428,356
Government funding and transfers
Net cash provided by Government of Canada 1,577,425 1,452,357
Change in due from Consolidated Revenue Fund (36,429) (48,578)
Services provided without charge by other government departments (note 12) 31,106 29,546
Transfer of the transition payments for implementing salary payments in arrears (3) (3)
Transfer of capital assets (to) / from other government departments 19 (14)
Transfer of other assets (to) / from other government departments (266) 16
Total government funding and transfers 1,571,852 1,433,324
Net cost of operations after government funding and transfers 7,666 (4,968)
Net financial position - Beginning of year 9,565 4,597
Net financial position - End of year 1,899 9,565

Non-monetary transactions (note 11)

Segmented information (note 13)

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

Table 3. Statement of Change in Net Debt (Unaudited) for the year ended March 31 (in thousands of dollars)
2020 2019
Net cost of operations after government funding and transfers 7,666 (4,968)
Change due to tangible capital assets (note 8)
Acquisitions and improvements to tangible capital assets 405 5,404
Amortization of tangible capital assets (1,515) (1,550)
Proceeds from disposal of tangible capital assets - -
Net (loss) gain on disposal of tangible capital assets including adjustments (5,398) 2
Transfer from other government departments 19 (14)
Total change due to tangible capital assets (6,489) 3,842
Change due to inventory 115 865
Change due to prepaid expenses 9 (815)
Net increase (decrease) in net debt 1,301 (1,076)
Net debt - Beginning of year 13,190 14,266
Net debt - End of year 14,491 13,190

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

Table 4. Statement of Cash Flows (Unaudited) for the year ended March 31 (in thousands of dollars)
2020 2019
Operating activities
Net cost of operations before government funding and transfers (note 3) 1,579,518 1,428,356
Non-cash items:
Amortization of tangible capital assets (1,515) (1,550)
Net (loss) gain on disposal of tangible capital assets including adjustments (5,398) 2
Services provided without charge by other government departments (note 12) (31,106) (29,546)
Transition payments for implementing salary payments arrears 3 3
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances 3,300 (2,754)
Increase (decrease) in prepaid expenses 9 (815)
Increase in inventory 115 865
Decrease in accounts payable and accrued liabilities 34,723 53,215
Increase in vacation pay (2,386) (1,595)
Decrease in employee future benefits 466 595
Decrease (increase) in other liabilities (975) 193
Transfer of salary overpayments to other government departments 266 (16)
Cash used in operating activities 1,577,020 1,446,953
Capital investing activities
Acquisition and improvements to tangible capital assets 405 5,404
Proceeds from disposal of tangible capital assets - -
Cash used in capital investing activities 405 5,404
Net cash provided by Government of Canada 1,577,425 1,452,357

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

Notes to the Financial Statements (Unaudited) for the year ended March 31, 2020

1. Authority and objectives

The Department of Canadian Heritage was established in 1995 under the Department of Canadian Heritage Act.

The Department of Canadian Heritage is responsible for formulating policies and delivering programs that help all Canadians participate in their shared cultural and civic life.

The Department of Canadian Heritage’s work is structured around the following three strategic outcomes:

The Department of Canadian Heritage is specifically responsible for formulating and implementing cultural policies related to copyright, foreign investment, and broadcasting, as well as policies related to arts, heritage, multiculturalism, official languages, sports, state ceremonial and protocol, and Canadian symbols.

The programs include:

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 Department of Canadian Heritage is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Department of Canadian Heritage 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 "Expenses" and "Revenues" sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2019-2020 Departmental Plan. Planned results are not presented in the "Government funding and transfers" section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2019-2020 Departmental Plan.

b. Consolidation

These consolidated financial statements include the accounts of the following sub-entities that the Deputy Minister is accountable for: Canadian Conservation Institute and Canadian Heritage Information Network. The accounts of these sub-entities have been consolidated with those of the Department of Canadian Heritage, and all inter-organizational balances and transactions have been eliminated.

c. Net cash provided by Government of Canada

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

d. Amounts due from or to the Consolidated Revenue Fund

Amounts due from or to the CRF 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 Department of Canadian Heritage is entitled to draw from the CRF without further authorities to discharge its liabilities.

e. Non-monetary transactions

In the normal course of business, the Department of Canadian Heritage regularly signs non-monetary agreements, which result in the exchange of non-monetary assets, goods or services for other non-monetary assets, goods, or services with little or no monetary consideration involved. When a non-monetary transaction has a commercial substance, the transaction is recorded at the fair value of the asset, good or service given up, unless the fair value of the asset, good or service received is more reliable. If the transaction lacks commercial substance, it is recorded at the carrying amount of the asset, good or service given up.

f. Revenues

Revenues from sale of goods and services are recognized in the accounts based on the goods and services provided in the year.

Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

Revenues that are non-respendable are not available to discharge the Department of Canadian Heritage’s liabilities. While the Deputy Minister is expected to maintain accounting control, she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the Department of Canadian Heritage’s gross revenues.

g. Expenses

Expenses are recorded on the accrual basis:

h. Employee future benefits

i. Accounts receivable

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

j. Inventory

Inventory consists of parts, materials and supplies held for future program delivery and not intended for resale. Inventory is valued at the actual cost. If there is no longer any service potential, inventory is valued at the lower of cost or net realizable value.

k. Tangible capital assets

All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. The Department does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic, or historical value, assets located on First Nation 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:

Table 5. Amortization period of tangible capital assets
Asset class Amortization period
Machinery and equipment 5 and 10 years
Computer Hardware 5 years
Computer Software 3 and 5 years
Vehicles 7 and 10 years
Leasehold improvements Lesser of the remaining term of lease or useful life of the improvement
Assets under construction Once in service, in accordance with asset type

l. 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 if an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

m. Contingent assets

Contingent assets are possible assets which may become actual assets when one or more future events occur or fail to occur. If the future event is likely to occur or fail to occur, the contingent asset is disclosed in the notes to the financial statements.

n. Foreign currency transactions

Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars using the rate of exchange in effect at year-end. Gains and losses resulting from foreign currency transactions are respectively included in the miscellaneous revenues and other operating expenses in the Statement of Operations and Departmental Net Financial Position.

o. 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 where estimates are used are contingent liabilities, the liability for employee future benefits, the useful life of tangible capital assets, the allowance for doubtful accounts, and the fair value of non-monetary transactions. 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.

p. Related party transactions

Related party transactions, other than inter-entity transactions, are recorded at the exchange amount.

Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis, and are measured at the carrying amount, except for the following:

  1. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.

3. Parliamentary authorities

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

Table 6. a. Reconciliation of net cost of operations to current year authorities used (in thousands of dollars)
2020 2019
Net cost of operations before government funding and transfers 1,579,518 1,428,356
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (1,515) (1,550)
Net (loss) gain on disposal of tangible capital assets including adjustments (5,398) 2
Services provided without charge by other government departments (31,106) (29,546)
Increase in vacation pay (2,386) (1,595)
Decrease in employee future benefits 466 595
Bad debt expense (312) (851)
Refund of prior years' expenditures 9,644 7,437
Other 94 225
Total items affecting net cost of operations but not affecting authorities (30,513) (25,283)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition and improvements of tangible capital assets 405 5,404
Proceeds from disposal of tangible capital assets - -
Increase (decrease) in prepaid expenses 9 (815)
Salary overpayments 1,039 1,034
Transition payments for implementing salary payments in arrears 3 3
Increase in inventory 115 865
Total items not affecting net cost of operations but affecting authorities 1,571 6,491
Current year authorities used 1,550,576 1,409,564
Table 7. b. Authorities provided and used (in thousands of dollars)
2020 2019
Authorities provided:
Vote 1 – Operating expenditures 215,026 212,331
Vote 5 – Grants and contributions 1,359,704 1,198,504
Statutory amounts 25,649 25,403
Total authorities 1,600,379 1,436,238
Less:
Authorities available for future years 6 4
Lapsed: Operating expenditures (1) 10,761 12,326
Lapsed: Grants and contributions (2) 38,193 14,344
Lapsed: Budget implementation votes (3) 843 -
Current year authorities used 1,550,576 1,409,564
  1. The Public Account lapse of $10.8 million in Operating expenditures is mainly due to two reprofile of funds and a frozen allotment (funds withheld by Treasury Board Secretariat which cannot be spent by Canadian Heritage). First, a reprofile of $5.4 million for the New Anti-Racism Strategy - Enhance Data and Evidence Component, for which the majority of funds will be transferred to Statistics Canada ($4.2 million) and Justice Canada ($660k) in 2020-21; and the rest to future years as follows: $300k to 2020-21 and $200k to 2021-22. The other reprofile pertains to $3.6 million to be transferred to 2020-21 for the MyPCHOnline initiative to better align with project expenditures. Also contributing to the lapse is a $1.6 million in a frozen allotment for the vacation liability created due to the postponing of automatic cash-out of excess vacation hours at year-end resulting from ongoing Phoenix issues.
  2. The Public Accounts lapse of $38.2 million in Grants and Contributions is mainly due to the reprofile requests totaling $35.8 million. The most significant pertains to $27.8 million from 2019-20 to 2020-21 for the Enhancing Support for Minority-Language Education in Canada initiative delivered under the Official Languages Programs; as a result of delays given teacher's strikes, project complexity evaluations, and the COVID-19 pandemic. Further, a total of $5.0 million in reprofile request to 2020-21 for various programs and initiatives are contributing to the overall lapse. The reason behind these reprofiles is a result of delays pertaining to lengthy approval times, the large amount of planning and preparatory work required such as defining an operational framework and the COVID-19 pandemic. Adding to the overall lapse is $1.9 million in unspent funds for the Delivery of French-language services and to support the preservation of Indigenous languages in the Northwest Territories, Yukon, and Nunavut. These unspent funds must be placed in a frozen allotment and be returned to the Fiscal Framework, pursuant to Treasury Board decisions.
  3. Measures totaling $82.7 million were announced in Budget 2019. This information was included in a new section as part of the 2019-20 Main Estimates. During the year, Treasury Board submissions were prepared and approved, and the funds were released to the department. The lapse of $0.8 million represents funds that were not sought by Canadian Heritage.

4. Accounts payable and accrued liabilities

The following table presents details of the Department of Canadian Heritage's accounts payable and accrued liabilities:

Table 8. Details of the Department of Canadian Heritage's accounts payable and accrued liabilities (in thousands of dollars)
2020 2019
Accounts payable - External parties 372,288 408,276
Accounts payable - Other government departments and agencies 5,709 3,163
Accrued salaries, wages, and employee benefits 19,637 20,918
Total accounts payable and accrued liabilities 397,634 432,357

5. Employee future benefits

a. Pension benefits

The Department of Canadian Heritage’s employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Department contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to EAP 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 2019-2020 expense amounts to $15.8 million ($15.8 million in 2018-2019). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2018-2019) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2018-2019) the employee contributions.

The Department of Canadian Heritage’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

Severance benefits provided to the Department’s employees were previously based on an employee’s eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By March 31, 2018, substantially all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows:

Table 9. Changes in the obligations during the year (in thousands of dollars):
2020 2019
Accrued benefit obligation - Beginning of year 7,517 8,112
Expense for the year 713 675
Benefits paid during the year (1,179) (1,270)
Accrued benefit obligation - End of year 7,051 7,517

6. Accounts receivable and advances

The following table presents details of the Department of Canadian Heritage's accounts receivable and advances:

Table 10. Details of the Department of Canadian Heritage's accounts receivable and advances (in thousands of dollars)
2020 2019
Receivables - External parties 6,435 5,425
Receivables - Other government departments and agencies 4,640 1,990
Employee advances 402 376
Subtotal 11,477 7,791
Allowance for doubtful accounts on receivables from external parties (1,409) (1,096)
Gross accounts receivable 10,068 6,695
Accounts receivable held on behalf of Government (121) (48)
Net accounts receivable and advances 9,947 6,647

7. Inventory

The following table presents details of the inventory, measured at cost using the actual cost method:

Table 11. Details of the inventory, measured at cost using the actual cost method (in thousands of dollars)
2020 2019
Canadian Symbols - Promotional items 1,579 1,464
Canadian Gift Bank for Dignitaries 121 121
Total inventory 1,700 1,585

8. Tangible capital assets

Table 12. Tangible capital assets (in thousands of dollars)
Cost Accumulated amortization Net Book Value
Opening Balance Acquisi-tions Adjustments Disposals and Write-Offs Closing balance Opening balance Amortization Adjustments Disposals and Write-offs Closing balance 2020 2019
Machinery and equipment 11,875 158 (380) (190) 11,843 8,545 1,124 (1) 190 9,478 2,365 3,330
Computer Hardware 125 - - - 125 97 7 - - 104 21 28
Computer Software 5,097 - - (2,238) 7,335 5,097 - - - 5,097 2,238 -
Vehicles 523 20 (58) (44) 529 371 33 21 14 411 118 152
Leasehold improvements 15,860 170 - - 16,030 13,842 351 - - 14,193 1,837 2,018
Assets under constructionTable 12 note * 15,202 57 (12,957) (5,360) 7,662 - - - - - 7,662 15,202
Total 48,682 405 (13,395) (7,832) 43,524 27,952 1,515 20 204 29,283 14,241 20,730

Table 12 notes

Table 12 note *

This asset under construction is a project that includes various aspects including the modernization of business processes, systems for Grants and Contributions delivery in the department as well as the construction of other software for financial management purposes. This asset will not be amortized until it is put into service

Return to table 12 note * referrer

9. Contractual Obligations

The nature of the Department of Canadian Heritage's activities can result in some large multi-year contracts and obligations whereby the Department of Canadian Heritage will be 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:

Table 13. Estimate on significant contractual obligations (in thousands of dollars)
2021 2022 2023 2024 2025 and thereafter Total
Transfer payments 392,863 186,458 88,097 14,119 145 681,682

10. Contingent liabilities

Claims have been made against the Department in the normal course of operations. These claims include items with pleading amounts and others for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. The Department of Canadian Heritage would record an allowance for claims and litigations where it is likely that there will be a future payment and a reasonable estimate of the loss can be made. There are no claims for 2019-2020 ($0.0 million in 2018-2019) and litigations for which the outcome is determinable, and a reasonable estimate can be made by management at March 31, 2020.

Pursuant to s. 3(1) of the Canada Travelling Exhibition Indemnification Act the Minister of Canadian Heritage is authorized to enter into indemnification agreements with owners of objects or appurtenances on loan to travelling exhibitions in Canada. Under the Act, maximum levels of liability are established including no more than $600 million in respect of each travelling exhibition and; no more than $3,000 million at any given time in respect of all travelling exhibitions. The Canada Travelling Exhibitions Indemnification Regulations set out specific requirements to be met when owners are seeking indemnification agreements with the Minister. The Regulations also set limitations on the scope of indemnity, establish deductibles, define maximums for and period of coverage, set requirements for condition reporting, outline a claims procedure, and provide for dispute resolution, among other things.

11. Non-monetary transactions

During the year, the Department of Canadian Heritage entered into sponsorship agreements through which it received various goods or services. In exchange, the sponsors received various benefits, including exclusive marketing rights and visibility. These non-monetary transactions with unrelated parties were recorded equally in revenues and cost of operations. The estimated value of these transactions is $0.1 million ($0.1 million in 2018-2019), which represents the fair value of the goods and services received.

12. Related party transactions

The Department of Canadian Heritage is related as a result of common ownership to all government departments, agencies, and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual. The Department of Canadian Heritage enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the Department of Canadian Heritage has various agreements such as the one with Parks Canada for the provision of functional services related to the financial system. During the year, the Department of Canadian Heritage 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 Department of Canadian Heritage received services without charge from certain common service organizations, related to accommodation, legal services, the employer’s contribution to the health and dental insurance plans and workers’ compensation coverage. These services provided without charge have been recorded in the Department of Canadian Heritage’s Statement of Operations and Departmental Net Financial Position as follows:

Table 14. Services provided without charge (in thousands of dollars)
2020 2019
Employer's contribution to the health and dental insurance plans 15,026 13,760
Accommodation 15,197 14,932
Legal services 874 831
Workers' compensation 9 23
Total 31,106 29,546

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 other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included in the Department of Canadian Heritage’s Statement of Operations and Departmental Net Financial Position.

b. Other transactions with other government departments and agencies

Table 15. Other transactions with other government departments and agencies (in thousands of dollars)
2020 2019
Accounts receivable 4,640 1,990
Accounts payable 5,709 3,163
Expenses 33,734 34,548
Revenues 2,823 3,137

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

13. Segmented information

Presentation by segment is based on the Department of Canadian Heritage’s Departmental Results Framework. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main core responsibilities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

Table 16. Expenses incurred and revenues generated for the main core responsibilities, by major object of expenses and by major type of revenues (in thousands of dollars)
Creativity, Arts and Culture Heritage and Celebration Sport Diversity and Inclusion Official Languages Internal Services Unallocated 2020 2019
Transfer payments
Non-profit organizations 341,158 67,776 197,934 112,982 110,616 - - 830,466 711,955
Other levels of government within Canada 13,612 4,392 - 457 286,908 - - 305,369 301,403
Industry 126,197 858 1 368 185 - - 127,609 121,045
Individuals 64 2,432 31,399 - 49 - - 33,944 34,359
Other countries and international organizations 16,436 16 - - - - - 16,452 10,751
Total transfer payments 497,467 75,474 229,334 113,807 397,758 - - 1,313,840 1,179,513
Operating expenses
Salaries and employee benefits 46,584 35,157 11,983 17,661 16,311 74,982 - 202,678 197,411
Professional services 4,483 8,327 196 742 141 16,810 - 30,699 25,919
Accommodation 3,443 2,631 882 1,314 1,184 5,743 - 15,197 14,932
Information 354 647 1 86 21 1,608 - 2,717 2,033
Travel and relocation 842 594 283 261 162 1,770 - 3,912 4,177
Utilities, materials, and supplies 29 2,486 32 8 - 344 - 2,899 3,366
Amortization - 1,236 - - - 279 - 1,515 1,550
Freight and communications 6 103 - 55 1 581 - 746 795
Repairs and maintenance 1 930 1 3 - 243 - 1,178 1,324
Rentals 108 1,843 20 57 29 1,957 - 4,014 4,380
Other operating expenses 2,264 1,317 511 585 6,545 (2,132) - 9,090 3,072
Total operating expenses 58,114 55,271 13,909 20,772 24,394 102,185 - 274,645 258,959
Total expenses 555,581 130,745 243,243 134,579 422,152 102,185 - 1,588,485 1,438,472
Revenues
Revenue from the 1979 Federal-provincial Lottery agreement - - - - - - 77,258 77,258 75,868
Miscellaneous revenues 5,949 131 - - - 94 - 6,174 5,862
Sale of goods and services - 1,027 - - - 1,942 - 2,969 4,504
Revenues earned on behalf of Government - (176) - - - - (77,258) (77,434) (76,118)
Total revenues 5,949 982 - - - 2,036 - 8,967 10,116
Net cost from continuing operations 549,632 129,763 243,243 134,579 422,152 100,149 - 1,579,518 1,428,356

14. Comparative information

Certain comparative figures have been reclassified to conform to the current year's presentation.

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