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Consolidated statement of administrative costs charged to the CPP Accounts by ESDC, March 31, 2024

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, 2023 to March 31, 2024

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List of abbreviations
CPP
Canada Pension Plan
ESDC
Employment and Social Development Canada
ISSDB
Income Security and Social Development Branch
MoU
Memorandum of Understanding
NHQ
National Headquarters
OAG
Office of the Auditor General of Canada

List of table and schedules

Independent auditor's report

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

Our opinion

In our opinion, the accompanying financial information with respect to the administrative costs charged to the Canada Pension Plan (CPP) Accounts by Employment and Social Development Canada (ESDC) for the period from April 1, 2023 to March 31, 2024 is prepared, in all material respects, in accordance with the financial reporting provisions of Part A (Section 6.0) and Part B of the Memorandum of Understanding (the MoU) between the CPP and ESDC dated March 22, 2024.

What we have audited

ESDC's financial information comprises the consolidated statement of administrative costs charged to the CPP Accounts by ESDC for the period from April 1, 2023 to March 31, 2024 and the notes to the financial information, which include 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 provisions of Section 8.2 of the MoU. As a result, the financial information may not be suitable for another purpose. Our report is intended solely for ESDC and the Office of the Auditor General of Canada (the OAG). We neither assume nor accept any responsibility or liability to any third party in respect of this report. Our report should not be used by parties other than ESDC or the OAG. Our opinion is not modified in respect of this matter.

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

Management is responsible for the preparation of the financial information in accordance with the financial reporting provisions of Part A (Section 6.0) and Part B of the MoU, 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 ESDC'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:

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

November 13, 2024

Table 1: Consolidated statement of administrative costs charged to the CPP Accounts by ESDC
Service area as per the Memorandum of Understanding 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Deputy Minister's Office (Schedule 1) 914 789
Chief Operating Officer (Schedule 2) 557 496
Income Security and Social Development Branch (Schedule 3) 19,873 19,713
Corporate Secretariat (Schedule 4) 2,609 2,276
Public Affairs and Stakeholder Relations Branch (Schedule 5) 4,621 3,842
Human Resources Services Branch (Schedule 6) 22,074 22,737
Legal Services Branch (Schedule 7) 3,275 3,063
Internal Audit and Enterprise Risk Management Branch (Schedule 8) 1,366 1,245
Strategic and Service Policy Branch (Schedule 9) 3,954 4,218
Business Delivery Modernization Programme Strategy and Design (Schedule 10) 7,856 15,474
Business Lead, Benefits Delivery Modernization (Schedule 11) 498 34
Business Delivery Modernization Implementation (Schedule 12) 29 1,741
Technical Change Authority and Deputy Chief Information Officer (Schedule 13) 1,080 2,660
Benefits and Integrated Services Branch (Schedule 14) 345,947 274,740
Citizen Service Branch (Schedule 15) 27,415 22,317
Integrity Services Branch (Schedule 16) 15,667 16,858
Social Insurance Register (Schedule 17) 7,860 6,902
Innovation, Information and Technology Branch (Schedule 18) 119,807 110,577
Chief Financial Officer Branch (Schedule 19) 57,804 50,763
Strategic Services Bureau and Regional Assistant Deputy Minister (Schedule 20) 7,366 6,149
Corporate Reserve (Schedule 21) 2,389 49
ESDC Ombuds Office (Schedule 22) 174 0
Chief Data Officer Branch (Schedule 23) 681 2,450
Canada School of Public Service 515 515
Provision of Pay Administration Services 350 350
Financial Management Transformation 125 125
Total administrative costs charged to the Canada Pension Plan Accounts 654,806 570,083

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

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

Note 1: Introduction and basis of accounting

Introduction

Under the Canada Pension Plan (CPP), the Minister of Employment and Social Development Canada (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.

Basis of accounting

The Memorandum of Understanding (MoU) for the period from April 1, 2023 to March 31, 2024 between the CPP and ESDC was signed on March 22, 2024. This 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, specifically Section 6.0 (Financial Arrangements). The second part (Part B) specifies the cost allocation methodologies used by ESDC to calculate the charges for its services to the CPP Accounts for each of the areas recovering costs from the CPP, in accordance with the costing principles approved by Treasury Board in January 1988 (TB Decision 807225).

The framework and basic principles for the comparative figures shown in the consolidated statement of administrative costs under the 2023 header is set out in a Memorandum of Understanding for the period from April 1, 2022 to March 31, 2023 which was signed on March 7, 2023.

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 modified 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.

Based on benefit projections at maturity, a fixed percentage cost allocation ratio (entitled "fair share" under section 3.0, Part B of the MoU) 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. In addition, costs directly attributable to either the Base CPP Account or the Additional CPP Account are changed to the appropriate account.

The consolidated statement of administrative costs charged to the CPP Accounts for the period from April 1, 2023 to March 31, 2024 of $654,806,388 ($570,083,359 for the period from April 1, 2022 to March 31, 2023), includes Contributions to Employee Benefit Plans and Public Service Insurance. These amounts include costs of $468,360,950 ($405,399,651 for the period from April 1, 2022 to March 31, 2023) associated with the Base CPP Account and $186,445,438 ($164,683,708 for the period from April 1, 2022 to March 31, 2023) associated with the Additional CPP Account (enhanced CPP).

Note 3: Comparative information

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

The previous Transformation Management Branch has been split into 4 distinct branches:

A new ESDC Ombuds Office (refer to Schedule 22) was included to offer employees performing CPP related activities with an additional avenue to seek advice and assistance on workplace-related issues in a safe environment.

The Chief Data Officer Branch (refer to Schedule 23) was separated from Strategic and Service Policy Branch to its own branch. It manages Canadian Survey on Disability and inclusion of the Disability Screening Questions in the Canadian Income Survey.

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, 2024. 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 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Deputy Minister's Office 741 642
Contributions to employee benefit plans 107 92
Public service insurance 66 55
Total 914 789
Schedule 2: Administrative costs charged to the CPP Accounts by the Chief Operating Officer
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Chief Operating Officer 452 403
Contributions to employee benefit plans 65 58
Public Service Insurance 40 35
Total 557 496
Schedule 3: Administrative costs charged to the CPP Accounts by the Income Security and Social Development Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Income Security and Social Development Branch 16,114 16,205
Contributions to Employee Benefit Plans 2,332 2,188
Public Service Insurance 1,427 1,320
Total 19,873 19,713
Schedule 4: Administrative costs charged to the CPP Accounts by the Corporate Secretariat
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Corporate Secretariat 2,147 1,877
Contributions to Employee Benefit Plans 287 249
Public Service Insurance 175 150
Total 2,609 2,276
Schedule 5: Administrative costs charged to the CPP Accounts by the Public Affairs and Stakeholder Relations Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Public Affairs and Stakeholder Relations Branch 3,754 3,146
Contributions to Employee Benefit Plans 538 434
Public Service Insurance 329 262
Total 4,621 3,842
Schedule 6: Administrative costs charged to the CPP Accounts by the Human Resources Services Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Human Resources Services Branch 18,078 18,889
Contributions to Employee Benefit Plans 2,479 2,400
Public Service Insurance 1,517 1,448
Total 22,074 22,737
Schedule 7: Administrative costs charged to the CPP Accounts by the Legal Services Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Legal Services Branch 3,088 2,912
Contributions to Employee Benefit Plans 116 94
Public Service Insurance 71 57
Total 3,275 3,063
Schedule 8: Administrative costs charged to the CPP Accounts by the Internal Audit and Enterprise Risk Management Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Internal Audit and Enterprise Risk Management Branch 1,131 1,048
Contributions to Employee Benefit Plans 146 123
Public Service Insurance 89 74
Total 1,366 1,245
Schedule 9: Administrative costs charged to the CPP Accounts by the Strategic and Service Policy Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Strategic and Service Policy Branch 3,445 3,745
Contributions to Employee Benefit Plans 316 295
Public Service Insurance 193 178
Total 3,954 4,218
Schedule 10: Administrative costs charged to the CPP Accounts by the Business Delivery Modernization Programme Strategy and Design
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Business Delivery Modernization Programme Strategy and Design 7,018 13,335
Contributions to Employee Benefit Plans 520 1,334
Public Service Insurance 318 805
Total 7,856 15,474
Schedule 11: Administrative costs charged to the CPP Accounts by the Business Lead, Benefits Delivery Modernization
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Business Lead, Benefits Delivery Modernization 403 28
Contributions to Employee Benefit Plans 59 4
Public Service Insurance 36 2
Total 498 34
Schedule 12: Administrative costs charged to the CPP Accounts by the Business Delivery Modernization Implementation
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Business Delivery Modernization Implementation 29 1,704
Contributions to Employee Benefit Plans 0 23
Public Service Insurance 0 14
Total 29 1,741
Schedule 13: Administrative costs charged to the CPP Accounts by the Technical Change Authority and Deputy Chief Information Officer
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Technical Change Authority and Deputy Chief Information Officer 979 2,564
Contributions to Employee Benefit Plans 63 60
Public Service Insurance 38 36
Total 1,080 2,660
Schedule 14: Administrative costs charged to the CPP Accounts by the Benefits and Integrated Services Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Processing & Payments - NHQ 49,577 39,913
Processing & Payments - Regions 202,218 164,833
Call Centers - NHQ 2,052 1,967
Call Centers - Regions 28,799 18,759
Contributions to Employee Benefit Plans 39,269 30,732
Public Service Insurance 24,032 18,536
Total 345,947 274,740
Schedule 15: Administrative costs charged to the CPP Accounts by the Citizen Service Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Citizen Service Branch - NHQ 2,506 2,307
Citizen Service Branch - Regions 19,779 15,944
Contributions to Employee Benefit Plans 3,182 2,536
Public Service Insurance 1,948 1,530
Total 27,415 22,317
Schedule 16: Administrative costs charged to the CPP Accounts by the Integrity Services Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Integrity Services Branch - NHQ 4,124 3,954
Integrity Services Branch - Regions 8,901 10,640
Contributions to Employee Benefit Plans 1,639 1,412
Public Service Insurance 1,003 852
Total 15,667 16,858
Schedule 17: Administrative costs charged to the CPP Accounts by the Social Insurance Register
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Social Insurance Register 8,028 7,286
Contributions to Employee Benefit Plans 912 792
Public Service Insurance 558 477
Total Administrative Costs 9,498 8,555
Less: Funding from Treasury Board (1,638) (1,653)
Total 7,860 6,902
Schedule 18: Administrative costs charged to the CPP Accounts by the Innovation, Information and Technology Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Innovation, Information and Technology Branch - Regular Operating 80,341 73,403
Shared Services Canada 29,411 28,304
Contributions to Employee Benefit Plans 6,238 5,533
Public Service Insurance 3,817 3,337
Total 119,807 110,577
Schedule 19: Administrative costs charged to the CPP Accounts by the Chief Financial Officer Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Chief Financial Officer Branch - Regular Operating 16,387 15,497
National Accommodation Plan 37,954 32,183
Contributions to Employee Benefit Plans 2,148 1,923
Public Service Insurance 1,315 1,160
Total 57,804 50,763
Schedule 20: Administrative costs charged to the CPP Accounts by the Strategic Services Bureau and Regional Assistant Deputy Minister
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Strategic Services Bureau and Regional Assistant Deputy Ministers 6,002 5,029
Contributions to Employee Benefit Plans 846 699
Public Service Insurance 518 421
Total 7,366 6,149
Schedule 21: Administrative costs charged to the CPP Accounts by the Corporate Reserve
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Corporate Reserve 1,928 47
Contributions to Employee Benefit Plans 286 1
Public Service Insurance 175 1
Total 2,389 49
Schedule 22: Administrative costs charged to the CPP Accounts by the ESDC Ombuds Office
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
ESDC Ombuds Office 143 0
Contributions to Employee Benefit Plans 19 0
Public Service Insurance 12 0
Total 174 0
Schedule 23: Administrative costs charged to the CPP Accounts by the Chief Data Officer Branch
Cost description 2024 cost in thousands of dollars 2023 cost in thousands of dollars
Chief Data Officer Branch 672 2,444
Contributions to Employee Benefit Plans 6 4
Public Service Insurance 3 2
Total 681 2,450

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