2010-2011 Financial Statements

For the Year Ended March 31, 2011

(Unaudited)

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements of the Canadian Environmental Assessment Agency for the year ended March 31, 2011 and all information contained in this report rests with the Agency’s management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector.

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 to the Public Accounts of Canada and included in the Agency's Departmental Performance Report is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting 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.

The financial statements of the Agency have not been audited.


_____Original signed by_____
Elaine Feldman
President


_____Original signed by_____
Richard Gagné
Chief Financial Officer

Ottawa, Canada
August 29, 2011

Statement of Financial Position (Unaudited)
At March 31, 2011
(in dollars)

  2011 2010
 

Restated (Note 12)

Assets
   Financial assets
   Due from the Consolidated Revenue Fund 0 2,668,506
   Accounts receivable and advances (Note 4) 3,611,485 1,966,631
 

Total financial assets 3,611,485 4,635,137
   Non-financial assets
   Tangible capital assets (Note 5) 169,778 204,918
 

Total non-financial assets 169,778 204,918
 

Total 3,781,263 4,840,055

Liabilities
    Due to the Consolidated Revenue Fund 286,575 0
    Accounts payable and accrued liabilities (Note 6) 1,431,056 2,726,095
    Vacation pay and compensatory leave 727,368 772,077
    Cost sharing agreement - provincial / federal (Note 7) 138,622 302,031
    Employee severance benefits (Note 8) 3,622,108 3,307,578
 

Total liabilities 6,205,729 7,107,781
Equity of Canada (2,424,466) (2,267,726)
 

Total 3,781,263 4,840,055

Contingent liabilities (Note 9)

Contracted obligations (Note 10)

The accompanying notes and schedules form an integral part of these statements.


_____Original signed by_____
Elaine Feldman
President


_____Original signed by_____
Richard Gagné
Chief Financial Officer

Ottawa, Canada
August 29, 2011

Statement of Operations (Unaudited)
For the Year Ended March 31
(in dollars)

  2011 2010
 

  Environmental Assessment Support program Environmental Assesment Development program Internal Services Total  
Transfer payments
   First Nations 1,302,659 0 0 1,302,659 1,227,299
   Non-profit organizations 418,104 18,711 0 436,815 447,542
   Other levels of government 0 245,500 0 245,500 295,500
   Other countries and international organizations 0 5,000 0 5,000 37,884
   Industry 4,250 0 0 4,250 15,000
 




Total transfer payments 1,725,013 269,211 0 1,994,224 2,023,225

Operating Expenses
   Salaries and employee benefits 13,844,496 3,306,365 6,812,713 23,963,574 22,856,780
   Professional and special services 1,840,192 276,063 3,710,201 5,826,456 7,249,434
   Accommodation 1,398,591 286,151 822,104 2,506,845 2,514,997
   Travel and relocation 1,217,616 68,756 107,903 1,394,275 1,694,234
   Information 227,610 1,822 45,756 275,188 478,589
   Furniture and equipment 2,215 17,547 394,235 413,997 421,011
   Telecommunications 92,832 0 122,001 214,833 251,478
   Utilities, materials and supplies 49,170 3,098 65,881 118,149 148,944
   Postage 38,612 0 15,988 54,600 70,599
   Repairs and maintenance 2,664 0 6,699 9,363 60,808
   Amortization 0 13,050 22,090 35,140 36,959
   Other 999 4 395 1,398 3,069
 




Total operating expenses 18,714,997 3,972,856 12,125,966 34,813,818 35,786,902
 




Total Expenses 20,440,010 4,242,067 12,125,966 36,808,042 37,810,127

Revenues
   Environmental assessment and training services 3,215,480 0 0 3,215,480 4,709,548
   Miscellaneous revenues 161,573 0 768 162,341 1,129
 




Total Revenues 3,377,053 0 768 3,377,821 4,710,677
 




Net Cost of Operations 17,062,957 4,242,067 12,125,198 33,430,221 33,099,450

The accompanying notes and schedules form an integral part of these statements.

Statement of Equity of Canada (Unaudited)
At March 31
(in dollars)

  2011 2010
 

Restated (Note 12)

Equity of Canada, beginning of year (2,267,726) (4,094,765)
   Net cost of operations (33,430,221) (33,099,450)
   Net cash provided by Government 31,462,009 31,840,213
   Change in due from Consolidated Revenue Fund (2,668,506) (1,123,323)
   Services received without charge (Note 11) 4,479,978 4,209,599
 

Equity of Canada, end of year (2,424,466) (2,267,726)

The accompanying notes and schedules form an integral part of these statements.

Statement of Cash Flow (Unaudited)
For the Year Ended March 31
(in dollars)

  2011 2010
 

Operating Activities
   Net cost of operations 33,430,221 33,099,450
   Non-cash items:
   Services provided without charge (Note 11) (4,479,978) (4,209,599)
   Amortization of tangible capital assets (Note 5) (35,140) (36,959)
   Variations in Statement of Financial Position:
   Increase (decrease) in accounts receivable and advances (Note 4) 1,644,854 1,350,408
   Decrease (increase) in liabilities 902,052 1,636,913
 

Cash used by Operating Activities 31,462,009 31,840,213
 

   Net cash provided by Government of Canada 31,462,009 31,840,213

The accompanying notes and schedules form an integral part of these statements.

Notes to the Financial Statements (Unaudited)
For the Year Ended March 31, 2011

1. Authorities and Objectives

The Canadian Environmental Assessment Agency (the Agency) was established in 1995 under the Canadian Environmental Assessment Act. The Agency delivers high-quality environmental assessments (EA) and serves as the centre of expertise on EA within the federal government. To achieve this, the Agency over the planning period will focus on the following priorities:

  1. Deliver high-quality environmental assessment on major projects, with particular attention to the Agency's new role in conducting comprehensive studies;
  2. Build effective relationships with Aboriginal peoples, including consultations as an integral part of the federal environmental assessment process;
  3. Play a lead role in shaping the future of federal environmental assessment.

The Agency has two core program activities, Environmental Assessment Support Program and Environmental Assessment Development Program, which serve as the basis for its mission. These core program activities are supported by Internal Services, which provides modern, timely and responsive services.

In addition, the Agency has obligations under the Canada-wide Accord on Environmental Harmonization and bilateral agreements with the provincial governments, as well as international agreements covering environmental assessments.

The Agency is listed in Schedule I.1 of the Financial Administration Act and reports to Parliament through the Minister of the Environment.

2. Summary of Significant Accounting Policies

These financial statements have been prepared in accordance with Treasury Board accounting policies stated below, which are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

  1. Parliamentary authorities – The Agency is primarily financed by the Government of Canada through parliamentary authorities. 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 the statement of financial position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a high-level reconciliation between the bases of reporting.
  2. 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 the Agency and other federal government departments.
  3. Amounts due from/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 Agency is entitled to draw from the CRF without further authorities to discharge its liabilities.
  4. Revenues
    • Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
    • Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
  5. Expenses – Expenses are recorded on an accrual basis
    • Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement, provided that the transfer is authorized and a reasonable estimate can be made.
    • Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
    • Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans, and legal services, are recorded as operating expenses at their estimated cost.
  6. Employee future benefits
    1. Pension Benefits – Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government. The Agency's contributions to the Plan are charged to expenses in the year incurred and represent the total Agency obligation to the Plan. Current legislation does not require the Agency to make contributions for any actuarial deficiencies of the Plan.
    2. Severance Benefits – Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the government as a whole.
  7. Accounts receivables are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.
  8. 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 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 capital asset as follows:
  9. Measurement of Uncertainty – The preparation of 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 financial statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the liability for employee future benefits, allowances for employee vacation and compensatory benefits, the allowance for doubtful accounts, 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.
Asset class Sub-asset class Amortization period
Machinery and equipment Videoconferencing equipment 10 years
Other equipment (including furniture) Furniture and fixtures 10 years
Informatics hardware Multifunctional 3 years
Informatics software Server 4 years

3. Parliamentary Appropriations

The Agency receives most of its funding through annual Parliamentary authorities. Items recognized in the statement of operations 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:

  2011 2010
 

Net cost of operations 33,430,221 33,099,450
Adjustments for items affecting net cost of operations but not affecting appropriations  
Add (Less):
   Services provided without charge (note 11) (4,479,978) (4,209,599)
   Amortization of tangible capital assets (35,140) (36,959)
   Revenue not available for spending 388,847 1,501,039
   (Increase) Decrease for Vacation pay and compensatory leave 44,709 16,442
   (Increase) Decrease for Employee future benefits (314,530) (10,749)
 

  29,034,129 30,359,624

Adjustment for items not affecting net cost of operations but affecting appropriations
 
 

Current year authorities used 29,034,129 30,359,624

(b) Authorities provided and used

  Authorities Provided
  2011 2010
 

Vote 15 – Operating expenditures 29,566,260 32,369,451
Statutory amounts 2,894,592 3,410,930
Less:
   Lapsed authorities: Operating (3,426,723) (5,420,757)
 

Current year authorities used 29,034,129 30,359,624

4. Accounts Receivable and Advances

The following table presents details of accounts receivable and advances:

  2011 2010
 

  (in dollars)

Receivables from other federal government departments and agencies 1,760,993 82,449
Receivables from external parties 2,139,497 2,173,375
Employee advances 2,987 2,800
 

  3,903,477 2,258,624
Less: Allowance for doubtful accounts (291,993) (291,993)
 

Total 3,611,484 1,966,631

5. Tangible Capital Assets

Tangible Capital Assets
Cost (in dollars)
Capital Asset Class Opening Balance Acquisitions Disposals and Write-offs Closing Balance
Machinery and equipment 206,845 0 0 206,845
Other equipment (including furniture) 14,059 0 0 14,059
Informatics hardware 0 0 0 0
Informatics software 52,200 0 0 52,200
Total 273,104 0 0 273,104
Tangible Capital Assets (continued)
Accumulated Amortization (in dollars)
Capital Asset Class Opening Balance Amortization Disposals and Write-offs Closing Balance
Machinery and equipment 47,431 20,684 0 68,115
Other equipment (including furniture) 7,030 1,406 0 8,436
Informatics hardware 0 0 0 0
Informatics software 13,725 13,050 0 26,775
Total 68,186 35,140 0 103,326
Tangible Capital Assets (continued)
Capital Asset Class 2011 Net Book value 2010 Net Book value
Machinery and equipment 138,730 159,414
Other equipment (including furniture) 5,623 7,029
Informatics hardware 0 0
Informatics software 25,425 38,475
Total 169,778 204,918

6. Accounts Payable and Accrued Liabilities

The following table presents details of accounts payable and accrued liabilities:

  2011 2010
 

  (in dollars)

Payables to other federal government departments and agencies 359,879 785,170
Payables to external parties 667,951 1,622,920
 

  1,027,830 2,408,090
     
Accrued Salaries 403,226 318,005
 

Accrued Liabilities 1,431,056 2,726,095

7. Cost sharing agreement - provincial/federal

Funding received comes from a cost sharing agreement with the Province of Newfoundland and Labrador. The funding will be used exclusively to finance the Aboriginal Funding Envelope of the Participant Funding Program for the proposed Lower Churchill Hydroelectric Generation Project. The funds would be used during the period of 2009–2010 to 2011–2012 fiscal years. If after completing the project there remains residual funding, the balance will be returned to the province.

  2011 2010
 

  (in dollars)

Opening balance 302,031 500,000
Amounts received 125,000 0
Amount expended (288,409) (197,969)
 

Closing Balance 138,622 302,031

8. Employee Benefits

  1. Pension Benefits – The Agency'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 Agency contribute to the cost of the Plan. The 2010–2011 expense amounts to $2,893,518 ($2,462,561 in 2009–2010), which represents approximately 1.9 times (1.9 times in 2009–2010) the contributions by employees.
    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.
  2. Severance Benefits – The Agency provides severance benefits to its employees based on eligibility, years of service and final salary. 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:
  2011 2010
 

  (in dollars)

Accrued benefit obligation, beginning of year 3,307,578 3,296,829
Expense for the year 409,389 733,713
Benefits paid during the year (94,859) (722,964)
 

Accrued Benefit Obligation, end of year 3,622,108 3,307,578

9. Contingent Liabilities Claims and Litigation

In the normal course of its operations, the Agency becomes involved in various legal actions. Some of these potential liabilities 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 on the government's consolidated financial statements. At this time, the Agency has no estimated liability to accrue and no expense to record in the government’s consolidated financial statements.

10. Contractual Obligations

The nature of the Agency’s activities can result in some multi-year contracts and obligations whereby the Agency will be obligated to make future payments when the services or goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in dollars) 2012 2013 2014 2015 2016 and thereafter Total
Transfer payments 1,195,045 8,289 0 0 0 1,203,334
Professional services 587,547 72,169 35,404 18,898 0 714,018
Operating leases 137,664 0 0 0 0 137,664
Total 1,920,256 80,458 35,404 18,898 0 2,055,016

11. Related Party Transactions

The Agency is related as a result of common ownership to all Government departments, agencies, and Crown corporations. The Agency enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Agency received common services, which were obtained without charge from other government departments as disclosed below.

During the year the Agency received without charge from certain common service organizations, related to accommodation, legal services and the employer’s contribution to the health and dental insurance plans. These services without charge have been recognized in the Agency’s Statement of Operations as follows:

  2011 2010
 

  (in dollars)

Accommodations 2,030,829 2,006,152
Employer's contribution to the health and dental insurance plan 1,623,778 1,520,936
Legal services provided by the Department of Justice 825,371 682,511
 

Total 4,479,978 4,209,599

The Agency also obtains without charge, selected financial services, material management, informatics, and compensation and benefits services under a shared services agreement with Environment Canada.

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 and audit services provided by the Office of the Auditor General are not included in the Department's Statement of Operations.

12. Adoption of new accounting policies

During the year, the Agency adopted the revised Treasury Board accounting policy TBAS 1.2: Departmental and Agency Financial Statements which is effective for the Agency for the 2010-11 fiscal year. The major change in the accounting policies of the Agency required by the adoption of the revised TBAS 1.2 is the recording of the amounts due from the Consolidated Revenue Fund as an asset on the Statement of Financial Position.

The adoption of the new Treasury Board accounting policies have been accounted for retroactively with the following impact on the comparatives for 2009-10:

  2010
As previously stated
Effect of changes 2010
Restated
 


  (in dollars)

Statement of Financial Position:
   Assets 2,171,549 2,668,506 4,840,055
   Equity of Canada (4,936,232) 2,668,506 (2,267,726)
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