Consolidated statement of administrative costs charged to the CPP Accounts by ESDC, March 31, 2021

From: Employment and Social Development Canada

Official title: Consolidated Statement of Administrative Costs Charged to the Canada Pension Plan Accounts by Employment and Social Development Canada, for the period from April 1, 2020 to March 31, 2021

List of abbreviations

CPP: Canada Pension Plan
ESDC: Employment and Social Development Canada
MoU: Memorandum of Understanding
NHQ: National Headquarters

List of tables

Table 1: Consolidated statement of administrative costs charged to the CPP Accounts by ESDC
Schedule 1: Administrative costs charged to the CPP Accounts by Deputy Minister’s Office
Schedule 2: Administrative costs charged to the CPP Accounts by Chief Operating Officer
Schedule 3: Administrative costs charged to the CPP Accounts by the Income Security and Social Development Branch
Schedule 4: Administrative costs charged to the CPP Accounts by Corporate Secretariat
Schedule 5: Administrative costs charged to the CPP Accounts by the Public Affairs and Stakeholder Relations Branch
Schedule 6: Administrative costs charged to the CPP Accounts by the Human Resources Services Branch
Schedule 7: Administrative costs charged to the CPP Accounts by the Legal Services Branch
Schedule 8: Administrative costs charged to the CPP Accounts by the Internal Audit and Enterprise Risk Management Branch
Schedule 9: Administrative costs charged to the CPP Accounts by the Strategic and Service Policy Branch
Schedule 10: Administrative costs charged to the CPP Accounts by the Transformation and Integrated Service Management Branch and Benefits Delivery Services
Schedule 11: Administrative costs charged to the CPP Accounts by the Citizen Service Branch
Schedule 12: Administrative costs charged to the CPP Accounts by the Integrity Services Branch
Schedule 13: Administrative costs charged to the CPP Accounts by the Social Insurance Register
Schedule 14: Administrative costs charged to the CPP Accounts by the Innovation, Information and Technology Branch
Schedule 15: Administrative costs charged to the CPP Accounts by the Chief Financial Officer Branch
Schedule 16: Administrative costs charged to the CPP Accounts by the Strategic Services Bureau and Regional Assistant Deputy Ministers

Alternate formats

Consolidated statement of administrative costs charged to the CPP Accounts by ESDC, March 31, 2021 [PDF - 0.45 MB]

Large print, braille, MP3 (audio), e-text and DAISY formats are available on demand by ordering online or calling 1 800 O-Canada (1-800-622-6232). If you use a teletypewriter (TTY), call 1-800-926-9105.

Independent auditor’s report

To the Internal Audit and Enterprise Risk Management Branch of Employment and Social Development Canada.

Our opinion

In our opinion, the accompanying financial information of Employment and Social Development Canada (ESDC) for the period from April 1, 2020 to March 31, 2021 is prepared, in all material respects, in accordance with the financial reporting provisions of the 2020 to 2021 fiscal year MoU between the CPP Accounts and ESDC dated March 26, 2021.

What we have audited

The financial information of ESDC comprises the consolidated statement of administrative costs charged to the CPP Accounts by ESDC for the period from April 1, 2020 to March 31, 2021 and the related notes and schedules, which include a summary of significant accounting policies and other explanatory information.

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial information section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of ESDC in accordance with the ethical requirements that are relevant to our audit of the financial information in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

Emphasis of matter, basis of accounting and restriction on use

We draw attention to note 1 to the financial information, which describes the basis of accounting. The financial information is prepared to assist ESDC to comply with the financial reporting requirements of the 2020 to 2021 MoU between ESDC and the CPP Accounts. As a result, the financial information may not be suitable for another purpose. Our report is intended solely for ESDC in accordance with the terms of our engagement and should not be used by parties other than ESDC and the Office of the Auditor General of Canada. Our opinion is not modified in respect of this matter.

Responsibilities of management and those charged with governance for the financial information

ESDC management is responsible for the preparation of the financial information in accordance with the financial reporting provisions of the 2020 to 2021 fiscal year MoU between the CPP Accounts and ESDC, and for such internal control as management determines is necessary to enable the preparation of financial information that is free from material misstatement, whether due to fraud or error.

Those charged with governance are responsible for overseeing management’s financial reporting process.

Auditor’s responsibilities for the audit of the financial information

Our objectives are to obtain reasonable assurance about whether the financial information as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial information.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

identify and assess the risks of material misstatement of the financial information, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control
obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the management’s internal control
evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates, if any, and related disclosures made by management

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

PricewaterhouseCoopers LLP

Chartered Professional Accountants, Licensed Public Accountants

Ottawa, Ontario

August 6, 2021

**Table 1: Consolidated statement of administrative costs charged to the CPP Accounts by ESDC**
Service area as per the MoU	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Deputy Minister’s Office (Schedule 1)	694	588
Chief Operating Officer (Schedule 2)	419	231
Income Security and Social Development Branch (Schedule 3)	15,384	12,819
Corporate Secretariat (Schedule 4)	2,503	1,992
Public Affairs and Stakeholder Relations Branch (Schedule 5)	3,685	3,281
Human Resources Services Branch (Schedule 6)	20,591	16,408
Legal Services Branch (Schedule 7)	3,944	3,681
Internal Audit and Enterprise Risk Management Branch (Schedule 8)	1,192	983
Strategic and Service Policy Branch (Schedule 9)	4,743	6,010
Transformation and Integrated Service Management Branch and Benefits Delivery Services (Schedule 10)	294,542	230,780
Citizen Service Branch (Schedule 11)	24,311	21,121
Integrity Services Branch (Schedule 12)	13,314	10,887
Social Insurance Register (Schedule 13)	6,279	4,674
Innovation, Information and Technology Branch (Schedule 14)	104,790	81,608
Chief Financial Officer Branch (Schedule 15)	56,223	52,053
Strategic Services Bureau and Regional Assistant Deputy Ministers (Schedule 16)	4,890	3,893
Canada School of Public Service	515	515
Provision of Pay Administration Services	350	350
Financial Management Transformation	165	172
Total administrative costs charged to the Canada Pension Plan Accounts	558,534	452,046

Notes to the consolidated statement of administrative costs charged to the Canada Pension Plan Accounts

The accompanying notes form an integral part of the consolidated statement of administrative costs charged to the Canada Pension Plan Accounts.

Note 1: Introduction

Under the Canada Pension Plan (CPP) Act, the Minister of ESDC has the responsibility for the administration of Parts II and III (except for some sections of Part III), that pertains to the general administration of the CPP. The CPP is administered by ESDC, with support from the Income Security and Social Development Branch (ISSDB), the Department of Finance, the Canada Revenue Agency, Public Services and Procurement Canada, the Office of the Superintendent of Financial Institutions, the Royal Canadian Mounted Police, the CPP Investment Board, and the Administrative Tribunals Support Service of Canada.

The 2020 to 2021 MoU between the CPP and ESDC was signed on March 26, 2021. This 2020 to 2021 MoU is comprised of 2 parts: the first part (Part A) sets out the framework and basic principles regarding the services to be provided to the CPP. The second part (Part B) specifies the cost allocation methodologies used by ESDC to calculate the charges for its services to the CPP accounts, in accordance with the costing principles approved by Treasury Board in January 1988.

The framework and basic principles for the comparative figures shown in the consolidated statement of administrative costs under the 2020 header are set out in a 2019 to 2020 MoU which was signed on March 31, 2020.

The consolidated statement of administrative costs charged to the CPP Accounts focuses on authority for payments in a fiscal year and is prepared on a near-cash basis.

Note 2: Canada Pension Plan enhancement

On December 15, 2016, legislation to enact the CPP enhancement received Royal Assent. The CPP represents 2 separate accounts, the CPP Account (base or existing CPP), and the Additional CPP Account (enhanced CPP), where the financial activities of each account are accounted for separately. For the purpose of the MoU and the consolidated statement of administrative costs, CPP refers to the whole of the Canada Pension Plan, which includes both the base and enhanced components of the CPP.

The 2020 to 2021 consolidated statement of administrative costs of $558,534,913 (2019 to 2020 - $452,046,840) charged to the CPP Accounts, including Contributions to Employee Benefit Plans and Public Service Insurance, charged to the CPP Accounts includes costs of $400,927,690 ($324,650,867 in 2019 to 2020) associated with the CPP Account and $157,607,223 ($127,395,973 in 2019 to 2020) associated with the Additional CPP Account (enhanced CPP).

Based on benefit projections at maturity, a fixed percentage cost allocation ratio (entitled “fair share” under section 3.0, Part B of the 2019 to 2020 and the 2020 to 2021 MoUs) was determined, where 27% of the indirect costs would be paid by the Additional CPP Account, and the remaining 73% by the CPP Account. This ratio was determined to accurately reflect the scope of the enhancement relative to the base CPP while considering the volume and the complexity of work being done by ESDC.

Note 3: Comparative Information

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

Note 4: Contingencies

Due to the nature of its operations, ESDC as a department within the Government of Canada is sometimes subject to grievances filed by its employees. A grievance has been raised that will result in a change of classification, which may impact charges relating to the CPP Accounts for future periods beyond the period ended March 31, 2021. The resolution of this grievance could have a material effect on the expenses included in the consolidated statement of administrative costs charged to the CPP Accounts, However, the financial impact is not determinable at this time.

Schedules to the consolidated statement of administrative costs charged to the Canada Pension Plan Accounts

**Schedule 1: Administrative costs charged to the CPP Accounts by the Deputy Minister’s Office**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Deputy Minister’s Office	563	480
Contributions to Employee Benefit Plans	82	65
Public Service Insurance	49	43
Total	694	588

**Schedule 2: Administrative costs charged to the CPP Accounts by the Chief Operating Officer**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Chief Operating Officer	341	189
Contributions to Employee Benefit Plans	49	25
Public Service Insurance	29	17
Total	419	231

**Schedule 3: Administrative costs charged to the CPP Accounts by the Income Security and Social Development Branch**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Income Security and Social Development Branch	12,611	10,481
Contributions to Employee Benefit Plans	1,741	1,409
Public Service Insurance	1,032	929
Total	15,384	12,819

**Schedule 4: Administrative costs charged to the CPP Accounts by the Corporate Secretariat**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Corporate Secretariat	2,048	1,630
Contributions to Employee Benefit Plans	286	218
Public Service Insurance	169	144
Total	2,503	1,992

**Schedule 5: Administrative costs charged to the CPP Accounts by the Public Affairs and Stakeholder Relations Branch**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Public Affairs and Stakeholder Relations Branch	3,018	2,697
Contributions to Employee Benefit Plans	419	352
Public Service Insurance	248	232
Total	3,685	3,281

**Schedule 6: Administrative costs charged to the CPP Accounts by the Human Resources Services Branch**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Human Resources Services Branch	17,106	13,733
Contributions to Employee Benefit Plans	2,188	1,612
Public Service Insurance	1,297	1,063
Total	20,591	16,408

**Schedule 7: Administrative costs charged to the CPP Accounts by the Legal Services Branch**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Legal Services Branch	3,648	3,414
Contributions to Employee Benefit Plans	186	161
Public Service Insurance	110	106
Total	3,944	3,681

**Schedule 8: Administrative costs charged to the CPP Accounts by the Internal Audit and Enterprise Risk Management Branch**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Internal Audit and Enterprise Risk Management Branch	1,013	834
Contributions to Employee Benefit Plans	112	90
Public Service Insurance	67	59
Total	1,192	983

**Schedule 9: Administrative costs charged to the CPP Accounts by the Strategic and Service Policy Branch**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Strategic and Service Policy Branch	4,393	5,650
Contributions to Employee Benefit Plans	220	217
Public Service Insurance	130	143
Total	4,743	6,010

**Schedule 10: Administrative costs charged to the CPP Accounts by the Transformation and Integrated Service Management Branch and Benefits Delivery Services**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Benefits Delivery Services - NHQ	55,442	50,045
Benefits Delivery Services - Regions	168,926	128,190
Call Centers - NHQ	1,815	1,826
Call Centers - Regions	17,837	12,391
Contributions to Employee Benefit Plans	31,722	23,096
Public Service Insurance	18,800	15,232
Total	294,542	230,780

**Schedule 11: Administrative costs charged to the CPP Accounts by the Citizen Service Branch**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Citizen Service Branch - NHQ	2,027	1,462
Citizen Service Branch - Regions	17,806	15,841
Contributions to Employee Benefit Plans	2,812	2,301
Public Service Insurance	1,666	1,517
Total	24,311	21,121

**Schedule 12: Administrative costs charged to the CPP Accounts by the Integrity Services Branch**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Integrity Services Branch - NHQ	3,278	2,291
Integrity Services Branch - Regions	8,119	6,789
Contributions to Employee Benefit Plans	1,204	1,089
Public Service Insurance	713	718
Total	13,314	10,887

**Schedule 13: Administrative costs charged to the CPP Accounts by the Social Insurance Register**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Social Insurance Register	6,810	5,421
Contributions to Employee Benefit Plans	719	550
Public Service Insurance	426	363
Total Administrative Costs	7,955	6,334
Less: Funding from Treasury Board	(1,676)	(1,660)
Total	6,279	4,674

**Schedule 14: Administrative costs charged to the CPP Accounts by the Innovation, Information and Technology Branch**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Innovation, Information and Technology Branch - Regular Operating	72,800	52,866
Shared Services Canada	23,726	22,287
Contributions to Employee Benefit Plans	5,189	3,890
Public Service Insurance	3,075	2,565
Total	104,790	81,608

**Schedule 15: Administrative costs charged to the CPP Accounts by the Chief Financial Officer Branch**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Chief Financial Officer Branch - Regular Operating	15,238	13,574
National Accommodation Plan	38,053	35,880
Contributions to Employee Benefit Plans	1,841	1,566
Public Service Insurance	1,091	1,033
Total	56,223	52,053

**Schedule 16: Administrative costs charged to the CPP Accounts by the Strategic Services Bureau and Regional Assistant Deputy Ministers**
Cost description	2021 cost in thousands of dollars	2020 cost in thousands of dollars
Strategic Services Bureau and Regional Assistant Deputy Ministers	4,033	3,226
Contributions to Employee Benefit Plans	538	402
Public Service Insurance	319	265
Total	4,890	3,893

Page details

Date modified:: 2022-04-25

Language selection

Search