departmental performance report 2012-13
[section 3: supplementary information]
[financial statements highlights]
[condensed statement of operations and Agency net financial position]
CRA condensed statement of operations and Agency net financial position (unaudited)
For the year ended March 31, 2013
| 2012-13 planned results |
2012-13 actuals |
2011-12 actuals (restated) (Footnote 1) |
$ change (2012–13 planned vs. actuals) |
$ change (2012–13 actuals vs. 2011–12 actuals) |
|
|---|---|---|---|---|---|
| Total expenses | 4,482,587 | 4,575,002 | 4,784,041 | 92,415 | (209,039) |
| Total non-tax revenues | 594,139 | 496,745 | 559,640 | (97,394) | (62,895) |
| Net cost of operations before government funding and transfers |
3,888,448 | 4,078,257 | 4,224,401 | 189,809 | (146,144) |
| Agency net financial position |
633,286 | 634,801 | 779,235 | 1,515 | (144,434) |
(Footnote 1): Comparative figures have been restated. Please refer to note 3 of the Financial Statements - Agency Activities.
The CRA's 2012-2013 net cost of operations before government funding and transfers amounted to $4,078.3 million, increasing by $189.8 million from the $3,888.5 million planned results for 2013. The variance is explained by a $97.4 million decrease in non-tax revenues that is attributable to a change in accounting policy of non-tax revenues not available for spending as well as a decrease in the fees for IT services now being provided to the Canada Border Services Agency (CBSA) by SSC rather than by the CRA. The variance is further explained by higher costs for severance benefits than originally forecasted in 2011 when the planned results were established, due to changes in actuarial assumptions.
The CRA's 2012-2013 net cost of operations before government funding and transfers amounted to $4,078.3 million, decreasing by $146.1 million from the $4,224.4 million net cost of operations before government funding and transfers in 2011-2012.
Personnel expenses (salaries, other allowances and benefits) are the CRA's primary costs, representing 74% of total expenses while the remaining 26% of expenses are comprised of various other costs such as accommodation, telecommunication and information technology equipment and services. The decrease in personnel costs of $158.6 million is mostly attributable to a decrease in severance benefits due in part to the plan curtailment for employees represented by the Professional Institute of the Public Service of Canada (PIPSC) and to the fact that the severance benefit expenses were higher than usual in 2012 as a result of changes in actuarial assumptions. This decrease was partially offset by annual economic salary increases and salary increments pursuant to collective agreement provisions.
Non-personnel expenses have decreased by $50.5 million in 2012-2013. This variance mainly results from decreased losses resulting from the write-off of in-house developed software in the course of the fiscal year, lower travel expenses and legal fees, combined to a reduction of the provision for contingent liabilities arising from claims and litigation. The transfer of responsibilities over certain IT and telecommunication services to SSC in November 2011, though creating year over year variances in distinct expense categories, had nearly no net impact on total expenses. Expenses that used to be incurred by the CRA prior to that transfer, such as salaries, equipment purchases and repair and maintenance, are now mostly reported as IT services provided by SSC.
Non-tax revenues also decreased significantly in 2012-2013, mostly as a result of IT services now being provided to the CBSA by SSC rather than by the CRA.
[condensed statement of financial position]
CRA condensed statement of financial position (unaudited)
As at March 31, 2013
| 2012-13 | 2011-12 (restated) (Footnote 1) |
$ change | |
|---|---|---|---|
| Total liabilities | 1,206,348 | 1,380,434 | (174,086) |
| Total financial assets | 169,418 | 184,310 | (14,892) |
| Agency net debt | 1,036,930 | 1,196,124 | (159,194) |
| Total non-financial assets | 402,129 | 416,889 | (14,760) |
| Agency net financial position |
634,801 | 779,235 | (144,434) |
(Footnote 1): Comparative figures have been restated. Please refer to note 3 of the Financial Statements - Agency Activities.
Liabilities decreased by $174.1 million in 2012-2013, of which $151.8 million is attributable to the decreased employee severance benefits mainly as the result of the severance curtailment effective as of July 10, 2012 for employees represented by the PIPSC. These employees account for about a third of the CRA's permanent workforce.
Employee sick leave and severance benefits combined account for 67% of the CRA total liabilities in 2012-2013. These are significant liabilities that require the use of management estimates and assumptions to determine their present value as at March 31 of every year. As such, there lies a financial risk of imprecision in the financial position of the CRA where actual liabilities and the related expenses may differ significantly from current estimates. To minimize this risk, the CRA makes use of the expertise of the Office of the Chief Actuary, who provides an actuarial valuation report yearly, discussing the actuarial assumptions and method used to determine the actuarial present value of those employee benefits.
Non-financial assets are comprised of 97% tangible capital assets. The CRA managed a capital budget of $83.4 million for the year 2012-2013 ($89.0 million for 2011-2012), of which $36.9 million ($27.9 million for 2011-2012) remains available for use in future years in accordance with the CRA's multi-year resource management strategy.
Investments in in-house developed software represent an increasingly significant portion of the CRA's total investments in IT, with $57.6 million in software acquisitions compared to $1.9 million in hardware acquisitions in 2012-2013 ($40.9 million and 38.7 million respectively in 2011-2012). The decrease in IT equipment acquisitions is attributable to the transfer to SSC of email, data centers and network services responsibilities in November 2011.
[financial statements]
CRA audited financial statements can be found on the CRA website at:
www.cra-arc.gc.ca/gncy/nnnl/menu-eng.html.
CRA unaudited supplementary financial information can be found on the CRA website at:
www.cra-arc.gc.ca/gncy/nnnl/menu-eng.html.
[list of supplementary information tables]
All electronic supplementary information tables listed in the 2012-2013 Departmental Performance Report can be found on the CRA website at: www.cra-arc.gc.ca/gncy/prfrmnc_rprts/2012-2013/wb-spp-nfrmtn-tbls-eng.html
[tax expenditures and evaluations report]
The tax system can be used to achieve public policy objectives through the application of special measures such as low tax rates, exemptions, deductions, deferrals and credits. The Department of Finance publishes cost estimates and projections for these measures annually in the Tax Expenditures and Evaluations publication. The tax measures presented in the Tax Expenditures and Evaluations publication are the sole responsibility of the Minister of Finance.
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