2024 to 2025 Financial statements of the Financial Consumer Agency of Canada

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Financial Agency of Canada

427 Laurier Ave. West

Ottawa (Ontario) K1R 7Y2

www.canada.ca/en/financial-consumer-agency.html

Cat. No. FC2-8E-PDF

ISSN 2816-7899

© His Majesty the King in Right of Canada, as represented by the Minister of Finance Canada, October 2025.

Aussi disponible en français : États financiers de l’Agence de la consommation en matière financière du Canada

Financial Statements Highlights

The financial information presented in this report serves as a general overview of the Financial Consumer Agency of Canada’s (FCAC) financial operations for the year ended March 31, 2025.

FCAC is a federal government agency that recovers its costs mainly through assessments against the financial entities it supervises. In addition to revenues from assessments, FCAC receives an annual statutory authority of a maximum of $5,000,000 to support the financial literacy of Canadians. For 2024–25, FCAC received an additional statutory authority of $1,000,000 to support the expanded mandate to oversee, administer and enforce Canada’s Consumer-Driven Banking Framework.

FCAC’s total expenses for fiscal year 2024–25 were $57.2 million, an increase of $3.7 million, or 6.9%, compared to the previous fiscal year. This was primarily due to expenses related to authorized growth in personnel and an increase in advertising.

Figure 1. Total expenses

2024–25 Performance summary for programs and internal services

Figure 2. Budget versus actuals

FCAC’s total expenses for 2024–25 were $8.7 million less than planned, mainly due to lower spending in personnel and professional services; this was offset by increased spending in advertising.

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, 2025, and all information contained in these statements rests with the management of the Financial Consumer Agency of Canada (FCAC). These financial statements have been prepared by management using the Government of Canada’s accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management’s best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of FCAC’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, is consistent with these financial statements and included in FCAC’s Annual Report.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff; through an organizational structure that provides appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout FCAC; and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an on-going process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments. A risk-based assessment of the system of ICFR for the year ended March 31, 2025, was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.

Deloitte LLP has audited the financial statements of FCAC and reports on their audit to the Minister of Finance. This report does not include an audit opinion on the annual assessment of the effectiveness of FCAC’s internal controls over financial reporting.

Shereen Benzvy Miller
Commissioner

Werner Liedtke 
Chief Financial Officer

Ottawa, Canada

July 29, 2025

Independent Auditor’s Report

To the Financial Consumer Agency of Canada

and the Minister of Finance

Opinion

We have audited the financial statements of the Financial Consumer Agency of Canada (the “Agency”), which comprise the statement of financial position as at March 31, 2025, and the statements of operations, changes in net debt and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Agency as at March 31, 2025, and its financial performance and its cash flows for the year then ended in accordance with Canadian public sector accounting standards (“PSAS”).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Agency in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with PSAS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Agency’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Agency or to cease operations, or has no realistic alternative but to do so.

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

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are 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 GAAS 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 these financial statements.

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

• Identify and assess the risks of material misstatement of the financial statements, 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 Agency’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Agency’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Agency to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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.

Chartered Professional Accountants
Licensed Public Accountants
July 29, 2025

Statement of financial position

The accompanying notes are an integral part of the financial statements.

Approved by 

Shereen Benzvy Miller
Commssioner

Werner Liedtke
Financial officer

Statement of operations

The accompanying notes are an integral part of the financial statements.

Statement of changes in net debt

The accompanying notes are an integral part of the financial statements.

Statement of cash flows

The accompanying notes are an integral part of the financial statements.

Notes to the financial statement

1. Authority and objectives

The Financial Consumer Agency of Canada ("FCAC" or the "Agency") is the federal government regulatory agency mandated to supervise federally regulated financial entities to protect financial consumers and the public, and to strengthen the financial literacy of Canadians. Since June 2024, the FCAC has also been mandated to oversee, administer and supervise Canada’s Consumer-Driven Banking (CDB) Framework.

The Agency was established by the Financial Consumer Agency of Canada Act (the “Act”) on October 24, 2001, and is listed in Schedule I.1 of the Financial Administration Act. The Commissioner is the head of the Agency and reports to Parliament through the federal Minister of Finance.

FCAC supervises different types of entities that are part of Canada’s financial sector, including banks, federal credit unions, federal insurance companies and federal trust and loan companies, payment card network operators and the external complaints body (Regulated Entities). FCAC will also supervise the entities that are participating in consumer-driven banking under the Consumer-Driven Banking Act (Participating Entities).

The Agency’s objects are set out in detail in section 3 of the Act and include (i) the supervision of Regulated Entities and of Participating Entities for compliance with their respective obligations; (ii) the promotion of consumer awareness about the Regulated Entities’ obligations and those of the Participating Entities; (iii) the monitoring and evaluation of trends and emerging issues that may impact financial and CDB consumers; and (iv) the strengthening of the financial literacy of Canadians.

Subsections 18(3) and 18(5.3) of the Act provide that the Agency’s costs of operations relating to its mandate to supervise the Regulated Entities are to be assessed to the Regulated Entities. Pursuant to subsection 13(2) of the Act, FCAC’s operations are primarily funded through this process. However, FCAC also receives a statutory authority as per subsection 13(3) of the Act.

Presently, the Agency’s costs of operations relating to the CDB mandate are funded through the statutory authority in subsection 13(3) of the Act.

FCAC’s assessment revenues under subsections 18(3) and 18(5) of the Act are calculated and charged in accordance with the Financial Consumer Agency of Canada Assessment of Financial Institutions Regulations and FCAC’s financial assessment methodology of payment card network operators and the external complaints body, respectively.

The Agency manages its working capital requirements by borrowing funds from the Government of Canada under subsection 13(1) of the Act.

2. Summary of significant accounting policies

The financial statements of FCAC have been prepared in accordance with Public Sector Accounting Standards (PSAS) as issued by the Canadian Public Sector Accounting Board (PSAB). The accounting policies used in the financial statements are based on the PSAS applicable as at March 31, 2025.

The significant accounting policies of FCAC are set out below and are consistently applied to all periods presented:

Cash entitlement

FCAC does not have its own bank account. All of the financial transactions of the Agency are processed through the Consolidated Revenue Fund (CRF), a banking facility administered by the Receiver General for Canada. FCAC’s cash entitlement represents the amount the Agency is entitled to withdraw from the CRF without further authority. This amount does not earn interest.

Financial instruments

The classification of financial instruments is determined by FCAC at initial recognition and depends on the purpose for which the financial assets were acquired, or liabilities were incurred. All financial instruments are recognized initially at fair value. The fair value of financial instruments on initial recognition is based on the transaction price, which represents the fair value of the consideration given or received. Subsequent to initial recognition, financial instruments are measured as follows:

Impairment of financial assets

FCAC assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

For financial assets carried at amortized cost, FCAC first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If FCAC determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment. If there is objective evidence that an impairment loss has incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial assets original effective interest rate. The impairment assessment must be based on the best estimates available in light of past events, current conditions, and taking into account all circumstances known at the date of the preparation of the financial statements.

If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to the statement of operations.

Tangible capital assets

Tangible capital assets are stated at historical cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Historical cost includes the cost of replacing parts of property, plant and equipment when incurred, if the recognition criteria are met. Repair and maintenance costs are recognized in the statement of operations as incurred.

Amortization is recorded using the straight line method over the estimated useful lives of the assets as follows:

Internally developed and externally purchased software are capitalized as tangible capital assets. Software acquired separately is measured on initial recognition at cost. The cost of internally developed software consists of directly attributable costs necessary to create, produce, and prepare the software to be capable of operating in the manner intended by FCAC. Amortization of the assets begins when development is complete, and the assets are available for use. Costs incurred during the predevelopment or post-implementation stages are expensed in the period incurred.

Assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively if appropriate.

Impairment of non financial assets

FCAC assesses at each reporting date whether there is any objective evidence that an asset may be impaired. When a non financial asset no longer contributes to FCAC’s ability to provide goods and services, or the value of future economic benefits associated with the non financial asset is less than its net book value, the cost of the non financial asset is reduced to reflect the decline in the asset’s value. Any write-down is reflected in the statement of operations in the period the decline is recognized.

Employee benefits

(a) Short term benefits

Short term benefits are recorded in the statement of operations when an employee has rendered the service. Unpaid short term compensated leave that has vested at the reporting date are accrued at year end and not discounted. FCAC contributes to the Government of Canada sponsored Public Service Health Care Plan and Dental Service Plan for employees. These contributions represent the total obligation of FCAC with respect to these plans.

(b) Pension benefits

Substantially all of the employees of FCAC are covered by the Public Service Pension Plan (the “Plan”), a contributory defined benefit plan established through legislation and sponsored by the Government of Canada. Contributions are required by both the employees and FCAC to cover current service cost. Pursuant to legislation currently in place, FCAC has no legal or constructive obligation to pay further contributions with respect to any past service or funding deficiencies of the Plan. Consequently, contributions are recognized as an expense in the year when employees have rendered service and represent the total pension obligation of FCAC.

(c) Severance

On termination of employment, employees are entitled to certain benefits provided for under their conditions of employment through a severance benefits plan. The cost of these benefits is accrued as the employees render their services necessary to earn severance benefits and represents the only obligation of FCAC for severance benefits. The severance benefits are based upon the final salary of the employee.

The projected accrued benefit obligation is determined using an actuarial valuation.

(d) Other benefits

The Government of Canada sponsors a variety of other benefit plans from which former employees may benefit upon retirement. The Public Service Health Care Plan and the Pensioners’ Dental Service Plan are the two major plans available to FCAC retirees. These are defined benefit plans sponsored by the Government of Canada. Contributions are required by FCAC to cover current service cost. Pursuant to legislation currently in place, FCAC has no legal or constructive obligation to pay further contributions with respect to any past service or funding deficiencies of the Plan. Consequently, contributions are recognized as an expense in the year when employees have rendered service and represent the total obligation of FCAC with respect to these plans.

(e) Sick leave

Employees are eligible to accumulate sick leave until retirement or termination. Unused sick leave is not eligible for payment on retirement or termination, nor can it be used as vacation. All sick leave is an accumulating non vesting benefit. A liability is recorded for sick leave balances expected to be taken in excess of future allotments.

The cost of sick leave as well as the present value of the obligation is determined using an actuarial valuation.

Leases

Leases in which the benefits and risks of ownership related to the leased property are substantially retained by the lessor are classified as operating leases. FCAC records the costs associated with operating leases in the statement of operations in the period in which they are incurred. Any lease incentives received from the lessor are charged to the statement of operations on a straight line basis over the period of the lease.

FCAC does not have the borrowing authority to enter into lease agreements that are classified as leased tangible capital assets. FCAC has established procedures to review all lease agreements and identify if the proposed terms and conditions would result in a transfer to FCAC of substantially all the benefits and risks incidental to ownership.

Government funding

Government funding, including statutory appropriations, is recognized in the period that the appropriation was authorized, and any eligibility criteria met.

Parliamentary appropriations for operating purposes and for the purchase of tangible capital assets are considered to be without stipulations restricting their use and are recognized as revenue when the appropriations are authorized.

Statutory appropriations that are deemed to have stipulations which meet the definition of a liability, restricting their use for a specific purpose, are recorded as deferred revenue and recognized as revenue as FCAC is required to expend funds for that specific purpose. The funding and the corresponding expense item are recognized at their gross amounts.

Revenue recognition

FCAC recognizes revenue so as to recover its expenses. Any amounts that have been billed for which costs have not been incurred are classified as unearned assessments on the statement of financial position. Revenue is recorded in the accounting period in which it is earned (service provided) whether or not it has been billed or collected. At March 31 of each year, amounts may have been collected in advance of the incurrence of costs or provision of services, alternatively, amounts may not have been collected and are owed to FCAC. FCAC assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. FCAC has concluded that it is acting as a principal in all of its revenue arrangements.

Assessments – Revenue from assessments is recognized based on actual costs incurred. The assessments are charged to recover costs and all costs are considered recoverable. Assessments are billed annually based on an estimate of the current fiscal year’s costs of operations together with an adjustment for any differences between the previous year’s assessed costs and actual. The assessment process is undertaken before December 31 of each year, in accordance with subsections 18(1) and 18(5.1) of the Act. As a result, at March 31 of each year, amounts may have been collected in advance of the incurrence of costs or, alternatively, funds may be owed to the Agency to fund its costs of operations.

The Commissioner may impose penalties for violations of consumer provisions or compliance agreement requirements.

The maximum penalty for a violation committed on or after April 30, 2020, is $1,000,000 where the violation is committed by a natural person, and $10,000,000 where it is committed by a financial institution. Penalties are paid to the Receiver General for Canada and remitted to the Consolidated Revenue Fund.

Budget for the year ended March 31, 2025

The 2024-25 budget is reflected in the statement of operations and the statement of changes in net financial assets as approved by the Commissioner. For 2024-25, FCAC received statutory authority of $1,000,000 to support the expanded mandate to oversee, administer and enforce Canada’s Consumer-Driven Banking Framework.

Significant accounting judgments, estimates and assumptions

The preparation of FCAC’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability in which case, the impact will be recognized in the financial statements of a future fiscal period.

In the process of applying its accounting policies, management has made the following judgments which have the most significant effect on the amounts recognized in the financial statements:

• Lease classification;
• Impairment of financial and non financial assets;
• Estimated useful lives of tangible capital assets;
• Recognition of internally developed software;
• The actuarial assumptions used to value sick leave and severance obligations;
• Likelihood of occurrence for contingent liabilities; and
• Estimates for the allowance for doubtful accounts.

3. Trade and other receivables

he breakdown of all amounts owing to FCAC, by type, is as follows:

FCAC records an allowance for doubtful accounts considering the age of an outstanding receivable and the likelihood of its collection. Provisions are also made where collection of the receivable is doubtful based on information gathered through collection efforts. An allowance is reversed once collection of the debt is successful or the amount is written off. Impairment losses on accounts receivable recognized during the year ended March 31, 2025, were $nil ($2,015 in 2024). Recoveries during the same period totaled $nil ($nil in 2024).

A trade receivable will be considered to be impaired and written off when FCAC is certain that collection will not occur and all requirements of the Debt Write-off Regulations, 1994 have been met. A total of $2,015 was written off during the year ended March 31, 2025 ($nil in 2024). During the year ended March 31, 2025, no interest was earned on impaired assets and none of the past due amounts were renegotiated. Those that are neither past due nor provided for or impaired are considered to be fully collectible.

The aging of trade receivables was as follows:

All assessments receivable and accrued assessments are recoverable from federally regulated financial entities (includes banks, trust and loan companies, life insurance companies, property and casualty insurance companies, retail associations, payment card network operators and external complaint bodies).

Refer to Note 4 for terms and conditions relating to related party receivables and refer to Note 11 b) for further information on credit risk applicable to FCAC.

4. Related party transactions

FCAC is related, in terms of common ownership, to all Government of Canada departments, agencies and crown corporations. FCAC enters into transactions with these entities in the normal course of business and on normal trade terms. These transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. During the year ended March 31, 2025, FCAC purchased goods and services for $13,738,471 ($13,649,682 in 2024) and recovered expenditures of $210,042 ($751,530 in 2024) from transactions with other government departments, agencies and crown corporations. FCAC had the following significant transactions:

As at March 31, 2025, the amount of trade receivables and trade and other payables from these related parties was $3,066 ($63,090 in 2024) and $1,307,376 ($832,874 in 2024), respectively.

FCAC received a statutory authority of $5,000,000 for the fiscal year ended March 31, 2025 ($5,000,000 in 2024) for program and internal services costs related to the financial literacy of Canadians. For 2024-25 FCAC received an additional $1,000,000 in statutory authority to support the expanded mandate to oversee, administer and enforce Canada’s Consumer-Driven Banking Framework

During the year ended March 31, 2025, FCAC spent $5,000,000 ($5,000,000 in 2024) for program and internal services costs related to the financial literacy of Canadians, and $724,057 ($nil in 2024) to support the expanded mandate to oversee, administer and enforce Canada’s Consumer-Driven Banking Framework.

5. Tangible capital assets

None of the assets held have any restriction on title and none of the assets have been pledged as security for liabilities.

As at March 31, 2025, FCAC had $469,932 ($493,517 in 2024) of capital assets at cost that were fully depreciated and still in use. These assets are near the end of their useful life and their fair value is insignificant.

6. Employee benefits

(a) Post-employment benefits

(i) Pension benefits

Substantially all of the employees of FCAC are covered by the Public Service Pension Plan (the “Plan”), a contributory defined benefit plan established through legislation and sponsored by the Government of Canada. Contributions are required by both the employees and FCAC. The President of the Treasury Board of Canada sets the required employer contributions based on a multiple of the employees’ required contribution. The general contribution rate effective at the end of the period was 9.66% (8.99% in 2024). Total contributions of $2,978,545 ($2,514,912 in 2024) were recognized as an expense during the year.

The Government of Canada holds a statutory obligation for the payment of benefits relating to the Plan. Pension benefits generally accrue up to a maximum period of 35 years at an annual rate of two percent of pensionable service times the average of the best five consecutive years of earnings. The benefits are coordinated with Canada/Québec Pension Plan benefits, and they are indexed to inflation.

(ii) Severance benefits

FCAC used to administer a severance benefits plan for its employees. On termination of employment, eligible employees were entitled to certain benefits provided for under their conditions of employment based on their years of service. The plan was substantially curtailed in 2013 and employees no longer accumulate years of service. FCAC’s remaining liability in regard to this plan relates primarily to employees who chose to defer receipt of their entitlement until departure. Current service costs relate to the cost of involuntary departures.

Information about FCAC’s severance benefit plan is presented in the table below.

* The cost corresponding to annual changes in the accrued benefit liability is recovered from FCAC’s various sources of revenue outlined in Note 2 to the financial statements. Amounts collected in excess of benefits paid are presented on the statement of financial position under the heading of Cash entitlement.

The most recent actuarial valuation for severance benefits was completed by an independent actuary as at March 31, 2025. FCAC measures its accrued benefit obligation for accounting purposes as at March 31 of each year.

The significant actuarial assumption adopted in measuring FCAC’s accrued benefit obligation is a discount rate of 3.08% (3.40% in 2024). For measurement purposes, management’s best estimate for the general salary increases to estimate the current service cost and the accrued benefit obligation as at March 31, 2025, is an annual economic increase of 2.0% for the Plan year 2026 (2.25% for the Plan year 2025, 2.00% for Plan year 2026 in 2024. Thereafter, annual economic increases ranging from 2.60% to 2.50% are assumed (2.70% to 2.60% in 2024). The average remaining service period of active employees covered by the benefit plan is 15 years (15 years in 2024).

(b) Other long-term benefits

(i) Sick leave

Information about FCAC’s sick leave plan is presented in the table below:

* The cost corresponding to annual changes in the accrued benefit liability is recovered from FCAC’s various sources of revenue outlined in Note 2 to the financial statements. Amounts collected in excess of benefits paid are presented on the statement of financial position under the heading of Cash entitlement.

The most recent actuarial valuation for sick leave benefits was completed by an independent actuary as at March 31, 2025. FCAC measures its accrued benefit obligation for accounting purposes as at March 31 of each year.

The significant actuarial assumption adopted in measuring FCAC’s accrued benefit obligation is a discount rate of 2.97% (3.46% in 2024). For measurement purposes, management’s best estimate for the general salary increases to estimate the current service cost and the accrued benefit obligation as at March 31, 2025, is an annual economic increase of 2.00% for the Plan year 2026, and 2.60% for Plan years 2027 (2.25% for the Plan year 2025, 2.00% for Plan year 2026 in 2024). Thereafter, annual economic increases ranging from 2.60% to 2.50% are assumed (2.60% to 2.50% in 2024). The average remaining service period of active employees covered by the benefit plan is 16 years (15 years in 2024).

7. Administrative monetary penalties

Administrative monetary penalties collected by FCAC are remitted to the Consolidated Revenue Fund. In the year ended March 31, 2025, FCAC collected $12,000,000 ($3,600,000 in 2024) in administrative monetary penalties.

8. Contractual obligations

FCAC has entered into operating lease agreements for the office spaces in Ottawa and Toronto.

The minimum aggregate annual payments for future fiscal years are as follows:

9. Contingent liabilities

A claim for unspecified damages was lodged in the 2022 financial year against the Government of Canada and its constituent entities (including FCAC). The claim has not advanced to a point where the potential outcome or the amount at risk can be determined, as such, no provision for contingent liabilities has been accrued at the date of these financial statements.

10. Expenses by major classification

The following table presents the expenses incurred by major classification.

11. Financial risk management

FCAC’s financial liabilities include trade and other payables, and unearned assessments. The main purpose of these liabilities is to provide short term financing for FCAC’s operations. Financial assets include cash entitlement, accrued assessments, trade and other receivables.

FCAC is exposed to market risk, credit risk and liquidity risk in connection with financial instruments.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk, such as equity risk. FCAC is exposed to currency risk on any amounts payable that are to be settled in a currency other than the Canadian dollar and is exposed to interest rate risk as discussed below. FCAC is not exposed to other price risk.

(a) Currency risk

Currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. FCAC’s exposure to the risk of changes in foreign exchange rates relates primarily to the Agency’s operating activities (when expenses are denominated in a currency other than the Canadian dollar). FCAC manages its exposure to currency risk by structuring its contracts in Canadian dollars wherever possible. The majority of FCAC’s transactions are denominated in Canadian dollars; consequently, FCAC’s exposure to currency risk is insignificant.

There is no impact to revenue as all invoicing is done in Canadian dollars.

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. FCAC’s exposure to the risk of market interest rates relates primarily to FCAC’s loans payable with floating interest rate as determined by the Department of Finance Canada. FCAC reduces its borrowings by effectively forecasting its required cash flows from assessments. FCAC is not authorized to enter into any financial arrangements in order to reduce its exposure to interest rate risk.

Credit risk

Credit risk is the risk that the counterparty will not meet its obligations, resulting in a financial loss for FCAC. The maximum exposure FCAC has to credit risk as at March 31, 2025, is $30,729 ($136,014 as at March 31, 2024), which is equal to the carrying value of its trade receivables and other receivables.

All federally regulated financial entities are required to register with FCAC and pay the assessments as established by FCAC. Any loss incurred by FCAC as a result of a counterparty not meeting its obligations is recorded in the year incurred and collected through assessments. All remaining receivables are with other government organizations, where there is minimal potential risk of loss. FCAC does not hold collateral as security.

Liquidity risk

Liquidity risk is the risk that FCAC will encounter difficulty in meeting obligations associated with current and future financial liabilities. FCAC’s objective is to maintain sufficient cash entitlement through collection of assessments or borrowing from the Consolidated Revenue Fund (CRF) in order to meet its operating requirements. FCAC manages liquidity risk through a detailed annual planning and billing process, which is structured to allow for sufficient liquidity from one billing period to the next. FCAC’s objective is to accurately estimate its operating costs for the year in order to accurately estimate the assessments to be collected from federally regulated financial entities.

By December 31 of each year, the Commissioner must determine the total expenses incurred by the Agency during the preceding fiscal year for, or in connection with, the administration of the FCAC Act and the consumer provisions. The Commissioner then assesses each federally regulated financial entity a portion of these expenses, as determined by regulation or the financial assessment methodology of payment card network operators and external complaints bodies. To temporarily fund expenses until entities receive their final assessment, the Commissioner may, during each fiscal year, prepare an interim assessment against any financial entity, or request authority to borrow from the CRF. The Agency must seek the Minister of Finance’s authority to borrow from the CRF for the next fiscal year, up to a predetermined limit. The authority to borrow from the CRF is granted under section 13 of the FCAC Act.

For the year ended March 31, 2025, the Minister has approved up to $58,800,000 ($55,800,000 in 2024) in borrowing authority. All amounts borrowed must be repaid within one year. The Agency pays interest on the funds borrowed as described under Interest rate risk. During the year, FCAC used $22,000,000 from the CRF and repaid the full amount by March 31, 2025. In the previous year, FCAC used $20,000,000 from the CRF and repaid the full amount by March 31, 2024.

Refer to Note 1 for further information on FCAC’s authority.

The table below summarizes the maturity profile of FCAC’s financial liabilities at March 31, 2025, and March 31, 2024, based on contractual undiscounted payments. When the counterparty has a choice of when the amount is paid, the liability is allocated to the earliest period in which FCAC can be required to pay. When amounts are due in instalments, each instalment is allocated to the earliest period in which FCAC can be required to pay.

Balances due within 12 months equal their carrying amounts, as the impact of discounting is insignificant.

The liquidity of FCAC’s financial assets is outlined in Note 3, Trade and other receivables.