Treasury Board of Canada Secretariat Financial Statements (Unaudited) for the Year Ended March 31, 2019

From: Treasury Board of Canada Secretariat

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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 , and all information contained in these statements, rests with the management of the Treasury Board of Canada Secretariat (the Secretariat). 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 the Secretariat’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Secretariat’s Departmental Results Report, is consistent with these financial statements.

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 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 Secretariat; 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 ongoing process to assess key risks and the effectiveness of associated key controls and to make any necessary adjustments.

A risk-based assessment for the year ended , was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.

The annex also provides information on the status of the risk-based assessment of the controls over common services provided by the Secretariat that have a bearing on a recipient’s departmental financial statements.

The effectiveness and adequacy of the Secretariat’s system of ICFR is reviewed by internal audit staff, who conduct periodic audits of different areas of the Secretariat’s operations, and by the departmental audit committee, which oversees management’s responsibilities for maintaining adequate control systems and the quality of financial reporting, and which reviews the financial statements and provides advice to the Secretary.

The financial statements of the Secretariat have not been audited.

Original signed by:

Peter Wallace
Secretary of the Treasury Board
Ottawa, Canada

Original signed by:

Karen Cahill
Chief Financial Officer

Treasury Board of Canada Secretariat
Statement of Financial Position (unaudited)
as at

Statement of Financial Position (unaudited)
as at
(in thousands of dollars)
2019 2018
Liabilities
Accounts payable and accrued liabilities (Note 4)
479,597 1,072,026
Vacation pay and compensatory leave
13,831 11,087
Employee future benefits (Note 5)
9,471 9,490
Total liabilities 502,899 1,092,603
Financial assets
Accounts receivable and advances (Note 6)
341,706 177,820
Due from Consolidated Revenue Fund
135,476 840,279
Total gross financial assets 477,182 1,018,099
Financial assets held on behalf of government
Accounts receivable and advances (Note 6)
(4,768) (4,852)
Total financial assets held on behalf of government (4,768) (4,852)
Total net financial assets 472,414 1,013,247
Departmental net debt 30,485 79,356
Non-financial assets
Prepaid expenses
494 432
Tangible capital assets (Note 7)
60,617 46,415
Total non-financial assets 61,111 46,847
Departmental net financial position 30,626 (32,509)

Table notes:

  • The accompanying notes form an integral part of these financial statements.
  • For contractual obligations, see Note 8.
  • For contingent liabilities, see Note 9.

Original signed by:

Peter Wallace
Secretary of the Treasury Board
Ottawa, Canada

Original signed by:

Karen Cahill
Chief Financial Officer

Treasury Board of Canada Secretariat
Statement of Operations and Departmental Net Financial Position (unaudited)
for the year ended

Statement of Operations and Departmental Net Financial Position (unaudited)
for the year ended
(in thousands of dollars)
2020
Planned results
2019 2018
Expenses
Spending Oversight
47,174 45,641 45,847
Administrative Leadership
80,765 97,868 100,812
Employer (Note 12b)
2,807,017 5,875,621 3,582,923
Regulatory Oversight
6,920 8,405 6,577
Internal Services
93,049 98,407 97,252
Total expenses 3,034,925 6,125,942 3,833,411
Revenues
Internal support services
6,798 8,048 9,511
Recovery of pension administration costs
7,986 6,589 6,518
Parking fees (government-wide)
2,424 2,213 2,383
Other
30 128 149
Gross revenues
17,238 16,978 18,561
Revenues earned on behalf of government
(3,792) (3,506) (3,940)
Total net revenues 13,446 13,472 14,621
Net cost of operations before government funding and transfers 3,021,479 6,112,470 3,818,790
Government funding and transfers
Net cash provided by Government of Canada
  6,858,480 3,494,489
Change in due from Consolidated Revenue Fund
  (704,803) 309,071
Services provided without charge by other government departments (Note 10a)
  21,751 21,396
Transfers of assets and liabilities from or to other government departments (Note 11a)
  177 (14)
Total government funding and transfers   6,175,605 3,824,942
Net cost of operations after government funding and transfers   (63,135) (6,152)
Departmental net financial position - Beginning of year   (32,509) (38,661)
Departmental net financial position - End of year   30,626 (32,509)

Table notes:

Treasury Board of Canada Secretariat
Statement of Change in Departmental Net Debt (unaudited)
for the year ended

Statement of Operations and Departmental Net Financial Position (unaudited)
for the year ended
(in thousands of dollars)
2019 2018
Net cost of operations after government funding and transfers (63,135) (6,152)
Change due to tangible capital assets (Note 7)
Acquisition of tangible capital assets
20,129 18,346
Amortization of tangible capital assets
(5,083) (4,790)
Loss on write-off and disposal of tangible capital assets
(837) (523)
Net transfer from or to other government departments (Note 11a)
(7) 0
Total change due to tangible capital assets
14,202 13,033
Change due to prepaid expenses
62 302
Net increase (decrease) in departmental net debt (48,871) 7,183
Departmental net debt - Beginning of year 79,356 72,173
Departmental net debt - End of year 30,485 79,356

Table note:

  • The accompanying notes form an integral part of these financial statements.

Treasury Board of Canada Secretariat
Statement of Cash Flows (unaudited)
for the year ended

Statement of Change in Departmental Net Debt (unaudited)
for the year ended
(in thousands of dollars)
2019 2018
Operating activities
Net cost of operations before government funding and transfers
6,112,470 3,818,790
Non-cash items:
Amortization of tangible capital assets
(5,083) (4,790)
Loss on write-off and disposal of tangible capital assets
(837) (523)
Services provided without charge by other government departments (Note 10a)
(21,751) (21,396)
Variations in Statement of Financial Position:
Increase in accounts receivable and advances
163,970 61,944
Increase in prepaid expenses
62 302
Decrease (Increase) in accounts payable and accrued liabilities
592,429 (375,552)
Increase in vacation pay and compensatory leave
(2,744) (2,468)
Decrease (Increase) in employee future benefits
19 (178)
Transfer of assets from or to other government departments (Note 11a)
(184) 14
Cash used in operating activities 6,838,351 3,476,143
Capital investing activities
Acquisitions of tangible capital assets
20,129 18,346
Cash used in capital investing activities 20,129 18,346
Net cash provided by the Government of Canada 6,858,480 3,494,489

Table note:

  • The accompanying notes form an integral part of these financial statements.

Treasury Board of Canada Secretariat
Notes to the financial statements (unaudited)
for the year ended

In this section
  1. Authority and objectives
    1. Spending oversight
    2. Administrative leadership
    3. Employer
    4. Regulatory oversight
    5. Internal services
  2. Summary of significant accounting policies
    1. Parliamentary authorities
    2. Net cash provided by Government
    3. Amounts due from or to the CRF
    4. Revenues
    5. Expenses
    6. Government-wide employee benefits
      1. Pension and other employee benefits
      2. Severance benefits
    7. Accounts receivable and advances
    8. Tangible capital assets
    9. Contingent liabilities
    10. Measurement uncertainty
    11. Related-party transactions
  3. Parliamentary authorities
    1. Reconciliation of net cost of operations to current year authorities used
    2. Authorities provided and used
  4. Accounts payable and accrued liabilities
  5. Employee future benefits
    1. Pension benefits
    2. Severance benefits
  6. Accounts receivable and advances
  7. Tangible capital assets
  8. Contractual obligations
  9. Contingent liabilities
  10. Related-party transactions
    1. Common services provided without charge by other government departments
    2. Common services provided without charge to other government departments
    3. Other transactions with related parties
  11. Transfers from or to other government departments
  12. Segmented information
    1. Expenses and revenues
    2. Employer expenses

1. Authority and objectives

Under the broad authority of sections 5 to 13 of the Financial Administration Act, the Treasury Board of Canada Secretariat (TBS) supports the Treasury Board as a committee of ministers in its role as the general manager and employer of the core public administration. TBS is headed by a Secretary, who reports to the President of the Treasury Board.

The mission of TBS is to ensure that rigorous stewardship of public resources achieves results for Canadians.

The core business of TBS is currently organized into the following core responsibilities:

a) Spending Oversight

Review spending proposals and authorities; review existing and proposed government programs for efficiency, effectiveness and relevance; provide information to Parliament and Canadians on government spending.

b) Administrative Leadership

Lead government-wide initiatives; develop policies and set the strategic direction for government administration related to service delivery and access to government information, as well as the management of assets, finances, information and technology.

c) Employer

Develop policies and set the strategic direction for people management in the public service; manage total compensation (including pensions and benefits) and labour relations; undertake initiatives to improve performance in support of recruitment and retention.

d) Regulatory Oversight

Develop and oversee policies to promote good regulatory practices, review proposed regulations to ensure they adhere to the requirements of government policy, and advance regulatory cooperation across jurisdictions.

e) Internal services

Internal services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal services refers to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; and Acquisition Services.

2. Summary of significant accounting policies

These financial statements have been prepared using the TBS’s accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

The significant accounting policies are as follows:

a) Parliamentary authorities

TBS is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to TBS 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 Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament.

Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the “Expenses” and “Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-Oriented Statement of Operations included in the 2018–19 Departmental Plan. Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2018–19 Departmental Plan.

b) Net cash provided by Government

TBS operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by TBS is deposited to the CRF, and all cash disbursements made by TBS 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 government departments.

c) Amounts due from or to the CRF

Amounts due from or to the CRF are the result of timing differences at year-end between the time 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 TBS is entitled to draw from the CRF without further authorities to discharge its liabilities.

d) Revenues

Revenues are accounted for in the period in which the related transaction or event that gave rise to the revenues occurred.

Revenues that are non-respendable are not available to discharge TBS’s liabilities. While the Secretary is expected to maintain accounting control, he or she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and, therefore, are presented as a reduction of the entity’s gross revenues.

e) Expenses

Transfer payments are recorded as an expense in the year that the transfer is authorized and all eligibility criteria have been met by the recipient.

Operating expenses, which are recorded on an accrual basis when goods are received or services are rendered, include the following:

  • public service employer payments recorded centrally by TBS on behalf of other federal organizations
  • departmental salaries and employee benefits, professional and special services, transportation and telecommunications, equipment and furniture, rentals, repairs and maintenance, and utilities, materials and supplies
  • services provided without charge by other government departments for accommodation and legal services reported at their estimated cost
  • vacation pay and compensatory leave accrued as the benefits are earned by employees under their respective terms of employment
  • amortization of tangible capital assets, which is recorded on a straight-line basis over the estimated useful life of each asset

f) Government-wide employee benefits

(i) Pension and other employee benefits

Eligible public service employees participate in the Public Service Pension Plan (the Plan), a defined benefit pension plan sponsored by the Government of Canada. In support of the Treasury Board’s role as employer for the public service, TBS funds employer contributions to the Plan for all departments and agencies, including additional contributions in respect of any actuarial deficits, via statutory authorities.

Based on the , triennial actuarial valuation of the Plan tabled in Parliament in , the prior annual adjustment of $340 million to the Pension Fund was eliminated and a one-time payment of $3,107 million was made to the Superannuation Account to address an actuarial shortfall (refer to Note 12b).

Employer contributions to the Plan are expensed in the year incurred, and TBS recovers the employer contributions from other departments and agencies. TBS’s departmental financial statements therefore report on employer contributions in respect of only its own employees’ participation in the Plan.

The Government of Canada also sponsors a variety of other employee benefit plans that TBS is responsible for administering and/or funding through its centrally managed funds. Benefit payments for these plans are recognized as expenses in TBS’s financial statements when they become due, and no accruals are recorded for future benefits. A portion of these benefits is also recovered from other departments and agencies. This accounting treatment corresponds to the funding provided to TBS through parliamentary appropriations.

For all pension and other employee future benefits, the actuarial liabilities and related disclosures, as well as actuarial surpluses or deficiencies for the whole of government, are recognized in the financial statements of the Government of Canada. It is the government as the sponsor of the defined benefit plans that ultimately bears the actuarial and investment risks inherent to these plans.

(ii) Severance benefits

The accumulation of severance benefits for voluntary departures ceased for applicable employee groups beginning in 2011 (see Note 5b). The remaining obligation for employees who did not withdraw their accumulated benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the government as a whole.

g) Accounts receivable and advances

Accounts receivable and advances are stated at the lower of cost or net recoverable value. A valuation allowance has been recorded for receivables where recovery is considered uncertain.

Accounts receivable held on behalf of government are presented in these financial statements as the Secretary must maintain accounting control for these items; however, they are later presented as a reduction to TBS’s gross financial assets because the receipt of these receivables cannot be used by TBS to discharge existing liabilities.

h) Tangible capital assets

The costs of acquiring equipment and other capital property are capitalized as tangible capital assets and are amortized to expense these costs over the estimated useful lives of the assets, as described in Note 7. All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Tangible capital assets do not include works of art and intangible assets.

i) Contingent liabilities

Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. If the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, a provision is accrued and an expense is recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

j) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience and general economic conditions, and they reflect the government’s best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are contingent liabilities, the liability for claims incurred but not yet reported under the public service health and dental care plans, the liability for employee future benefits, 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.

k) Related‑party transactions

Related‑party transactions, other than inter‑entity transactions, are recorded at the exchange amount.

Inter‑entity transactions are transactions between commonly controlled entities. Inter‑entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:

  • Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and are measured at the exchange amount.
  • Certain services received on a “without charge” basis are recorded for departmental financial statement purposes at the carrying amount.

3. Parliamentary authorities

TBS receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through the parliamentary authorities of prior, current or future years. Accordingly, TBS’s net results of operations for the year are different depending whether they are expressed on a government funding basis or 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

($ thousands)
2019 2018
Net cost of operations before government funding and transfers 6,112,470 3,818,790
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets
(5,083) (4,790)
Loss on write-off and disposal of tangible capital assets
(837) (523)
Services provided without charge by other government departments
(21,751) (21,396)
Increase in vacation pay and compensatory leave
(2,744) (2,468)
Contributions to group insurance plans to be credited to appropriations when received
48,323 0
Decrease (Increase) in employee future benefits
149 (316)
Decrease (Increase) in accrued liabilities not charged to authorities
3,129 (4,459)
Refund of prior years’ expenditures
1,680 1,002
Other
(779) 494
Total items affecting net cost of operations but not affecting authorities 22,087 (32,456)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets
20,129 18,346
Salary overpayments to be recovered
819 1,780
Increase in advances and prepaid expenses
352 442
Total items not affecting net cost of operations but affecting authorities 21,300 20,568
Current year authorities used 6,155,857 3,806,902

b) Authorities provided and used

($ thousands)
2019 2018
Authorities provided
Vote 1: program expenditures
298,698 309,299
Vote 5: government contingencies
620,803 530,275
Vote 10: government-wide initiatives
209,654 693
Vote 20: public service insurance
2,952,919 3,274,680
Vote 25: operating budget carry forward
317,905 222,998
Vote 30: paylist requirements
496,256 249,427
Vote 35: capital budget carry forward
62,741 42,220
Vote 40: budget implementation
2,098,922 0
Statutory amounts
3,136,417 369,290
Total authorities provided 10,194,315 4,998,882
Less:
Lapsed authorities:
Vote 1: program expenditures
(18,897) (36,344)
Vote 5: government contingencies
(620,803) (530,275)
Vote 10: government-wide initiatives
(209,654) (693)
Vote 20: public service insurance
(213,280) (110,015)
Vote 25: operating budget carry forward
(317,905) (222,998)
Vote 30: paylist requirements
(496,256) (249,427)
Vote 35: capital budget carry forward
(62,741) (42,220)
Vote 40: budget implementation
(2,098,922) 0
Statutory amounts
0 (8)
Current year authorities used 6,155,857 3,806,902

4. Accounts payable and accrued liabilities

The following table presents the details of the TBS’s accounts payable and accrued liabilities:

($ thousands)
2019 2018
Accounts payable to other government departments and agencies 365,431 959,555
Accounts payable to external parties 26,478 22,234
Total accounts payable 391,909 981,789
Accrued liabilities 87,688 90,237
Total accounts payable and accrued liabilities 479,597 1,072,026

5. Employee future benefits

a) Pension benefits

TBS’s employees participate in the Public Service Pension Plan (the Plan), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years, at a rate of 2% per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits, and they are indexed to inflation.

Both the employees and TBS contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups:

  1. Group 1 relates to existing Plan members as of
  2. Group 2 relates to members joining the Plan as of

Each group has a distinct contribution rate. The employer expense in 2018–19 amounts to $20.5 million ($19.0 million in 2017–18). For Group 1 members, the expense represents approximately 1.01 times the employee contributions and, for Group 2 members, approximately 1.00 times the employee contributions.

b) Severance benefits

Severance benefits provided to TBS’s employees were previously based on an employee’s eligibility, years of service and salary at termination of employment. However, since 2011, the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or to collect the full or remaining value of benefits upon departure from the public service. By , substantially all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows:

($ thousands)
2019 2018
Accrued benefit obligation (beginning of year) 9,490 9,311
Expense for the year 1,724 917
Benefits paid during the year (1,743) (738)
Accrued benefit obligation (end of year) 9,471 9,490

6. Accounts receivable and advances

The following table presents details of TBS’s accounts receivable and advance balances:

($ thousands)
2019 2018
Receivables from other government departments and agencies 335,749 171,321
Receivables from external parties 5,854 6,555
Advances to employees 367 221
Subtotal accounts receivable and advances 341,970 178,097
Less allowance for doubtful accounts on external receivables (264) (277)
Gross accounts receivable and advances 341,706 177,820
Accounts receivable held on behalf of Government (4,768) (4,852)
Net accounts receivable and advances 336,938 172,968

7. Tangible capital assets

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

($ thousands)
Asset class Amortization period
Computer hardware 3 to 5 years
Computer software 3 to 10 years
Machinery and equipment 3 to 10 years
Motor vehicles 5 years
Assets under construction Once in service, in accordance with asset type
Leasehold improvements Lesser of the remaining term of the lease or useful life of the improvement
Leased tangible capital assets Over the lease term

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use, and are not amortized until they become available for use.

The following table presents the details of tangible capital assets:

($ thousands)
Cost Accumulated amortization Net book value
Capital asset class Opening balance Acquisi-tions Adjust-mentstable 11 note* Closing balance Opening balance Amorti-zation Adjust-mentstable 11 note* Closing balance 2019 2018

Table 11 notes

Table Note

The adjustments include assets under construction that were transferred to the other categories upon completion of the assets, disposals and write-offs, as well as transfers with other government departments. Effective , TBS transferred a vehicle with a net book value of $13,274 to the Privy Council Office, and the Privy Council Office transferred a vehicle to TBS with a net book value of $6,500.

Return to Table 11 note * referrer

Assets under construction 20,836 16,569 (4,102) 33,303 0 0 0 0 33,303 20,836
Machinery and equipment 14,718 2,745 (537) 16,926 2,815 1,856 (331) 4,340 12,586 11,903
Motor vehicles 55 0 0 55 27 11 7 45 10 28
Leasehold improvements 11,017 815 (319) 11,513 2,494 1,070 (319) 3,245 8,268 8,523
Computer hardware 2,866 0 (2,866) 0 2,445 79 (2,524) 0 0 421
Computer software 13,851 0 1,732 15,583 9,147 2,067 (2,081) 9,133 6,450 4,704
Total 63,343 20,129 (6,092) 77,380 16,928 5,083 (5,248) 16,763 60,617 46,415

8. Contractual obligations

The nature of TBS’s activities can result in some large multi-year contracts and obligations whereby TBS is obligated to make future payments in order to carry out its transfer payment programs or when the services or goods are received. Significant contractual obligations that can be reasonably estimated are summarized in the following table:

($ thousands)
2020 2021 2022 2023 Total
Public service and pensioners’ health and dental insurance plans 51,075 33,900 0 0 84,975
Information technology consulting 15,946 0 0 0 15,946
Management consulting 9,686 370 232 232 10,520
Information technology acquisitions, licenses and rentals 3,293 617 239 50 4,199
Other professional services 3,241 9 0 0 3,250
Translation services 2,221 0 0 0 2,221
Transfer payments 497 0 0 0 497
Other 574 0 0 0 574
Total 86,533 34,896 471 282 122,182

9. Contingent liabilities

Claims and litigations

Claims have been made against TBS in the normal course of operations. These claims include items with pleading amounts and others for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. TBS has recorded an allowance for claims and litigations where it is likely that there will be a future payment and where a reasonable estimate of the loss can be made, with the exception of certain unresolved claims related to ongoing negotiations. Due to the sensitivity of these latter claims, an allowance has been recorded centrally by the Office of the Comptroller General in the consolidated financial statements of the Government of Canada. Upon resolution in the future, any resulting allowance for these claims will be recorded by the department and could be material. For claims where the estimate of loss is based on a range of possible outcomes and the amount accrued was less than the maximum of the range, the exposure to liability in excess of the amount accrued is estimated at $65,000. Claims for which the outcome is not determinable and a reasonable estimate can be made by management amount to approximately $0.6 million ($9.4 million in 2017–18) at . None of these claims is with related parties.

10. Related-party transactions

TBS is related, as a result of common ownership, to all Government of Canada departments, agencies and Crown corporations. Related parties also include TBS’s key management personnel and their close family members, as well as entities that are controlled by, or are under shared control of, these individuals. TBS may enter into transactions with these entities in the normal course of business and on normal trade terms.

In addition, TBS has the responsibility to administer and fund, on behalf of other government departments, the employer’s contribution to health, dental and other employee insurance plans and payroll benefits through its centrally managed funds (refer to Note 10b).

During the year, TBS received and provided common services as disclosed in the following sections:

a) Common services provided without charge by other government departments

TBS received accommodation and legal services from certain common service organizations. These services were provided without charge and have been recorded at the carrying value in the TBS’s Statement of Operations and Departmental Net Financial Position as follows:

($ thousands)
2019 2018
Accommodation 19,174 18,748
Legal services 2,577 2,648
Total 21,751 21,396

In order to achieve efficiency and cost‑effectiveness, and to deliver programs economically to the public, the government has centralized some of its administrative activities. 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 cost of these services, such as the payroll and cheque issuance services provided by Public Services and Procurement Canada and audit services provided by the Office of the Auditor General, are not included in TBS’s Statement of Operations and Departmental Net Financial Position.

b) Common services provided without charge to other government departments

TBS provided services without charge to other government departments for the provision of the employer’s contribution to health, dental and other employee insurance plans and payroll benefits in the amount of $1.9 billion in 2018–19 (also $1.9 billion in 2017–18).

c) Other transactions with related parties

($ thousands)
2019 2018
Expenses: Other government departments and agencies 21,144 37,581
Revenues: Other government departments and agencies 13,461 14,615

Expenses and revenues disclosed in (c) exclude common services provided without charge, which have already been disclosed in (a) and (b). The expenses are related to the acquisition of various goods, services and recoveries of salaries with other departments and agencies. The revenues are mainly related to internal support services provided to other departments and agencies, as well as the recovery of costs related to public service pension administration.

11. Transfers from or to other government departments

a) Effective , TBS transferred a vehicle with a net book value of $13,274 to the Privy Council Office, and the Privy Council Office transferred a vehicle with a net book value of $6,500 to TBS. These transfers resulted from a change to the minister appointed as the President of the Treasury Board.

Throughout the year, transfers from or to other government departments of accounts receivable related to salary overpayments were made. These transfers are required when an employee transfers between departments before an outstanding salary overpayment is fully recovered by the department they transferred from.

The impact of transfers from or to other government departments in the financial statements is as follows:

($ thousands)
2019 2018
Financial assets
Accounts receivable and advances 184 (14)
Non-financial assets
Tangible capital assets (net book value) (Note 7)
To Privy Council Office (13) 0
From Privy Council Office 6 0
Non-financial assets (7) 0
Transfers of assets and liabilities from or to other government departments 177 (14)

b) On , the Treasury Board approved the transfer of financial management responsibilities for the Service Income Security Insurance Plan (SISIP) from TBS to National Defence, effective . This transfer is of an administrative nature and does not involve the transfer of any assets or liabilities to National Defence. As a result of the transfer, Employer expenses are expected to decrease in future years.

Employer expenses recorded in the 2018–19 Statement of Operations and Departmental Net Financial Position includes $372.7 million ($924.9 million in 2017–18) related to the SISIP program and associated accounts payable of $34.6 million ($643.0 million in 2017–18) recorded in the 2018–19 Statement of Financial Position.

12. Segmented information

a) Expenses and revenues

Information for TBS is presented by segment based on a breakdown by core responsibility. This presentation is consistent with the accounting policies described in Note 2. The following table presents the expenses incurred and revenues generated for the main core responsibilities, by major category of expenses and revenues:

($ thousands)
Spending Oversight Administrative Leadership Employertable 15 note 1 * Regulatory Oversight Internal Services 2019 Total 2018
Transfer payments
Industry
0 875 27 0 0 902 737
Total transfer payments 0 875 27 0 0 902 737
Operating expenses
Public service employer payments
0 0 5,794,820 0 0 5,794,820 3,512,522
Salary and employee benefits
39,976 69,466 55,750 6,985 61,768 233,945 225,185
Professional and special services
1,991 17,891 15,192 601 18,674 54,349 59,043
Accommodation
2,802 6,082 4,262 470 5,558 19,174 18,748
Amortization
40 456 480 0 4,107 5,083 4,790
Machinery, equipment, parts and tools
436 752 446 61 3,042 4,737 3,792
Rentals
151 463 385 29 2,342 3,370 2,348
Transport and telecommunications
181 1,238 376 159 1,318 3,272 2,622
Utilities, materiel and supplies
54 109 275 9 300 747 662
Repair and maintenance
0 28 37 0 554 619 406
Information
10 217 189 1 132 549 1,802
Other subsidies and expenses
0 291 3,382 90 612 4,375 754
Total operating expenses 45,641 96,993 5,875,594 8,405 98,407 6,125,040 3,832,674
Total expenses 45,641 97,868 5,875,621 8,405 98,407 6,125,942 3,833,411
Revenues
Internal support services
0 0 0 0 8,048 8,048 9,511
Recovery of pension administration costs
0 0 6,589 0 0 6,589 6,518
Parking fees and other revenues
0 0 2,306 0 35 2,341 2,532
Revenues earned on behalf of government
0 0 (3,482) 0 (24) (3,506) (3,940)
Total net revenues 0 0 5,413 0 8,059 13,472 14,621
Net cost of operations before government funding and transfers 45,641 97,868 5,870,208 8,405 90,348 6,112,470 3,818,790
Table 15 notes
Table Note

For additional details on employer expenses, see Note 12b.

Return to Financial Statements table 15 note * referrer

b) Employer expenses

Total expenses reported under the “Employer” core responsibility comprise public service employer payments recorded centrally by TBS on behalf of other federal organizations and departmental expenses in support of the Treasury Board in its role as the employer of the core public administration.

Public service employer payments account for approximately 90% of TBS’s total expenses and include the following:

  • the employer’s share of contributions to the Public Service Pension Plan and Retirement Compensation Arrangement
  • the employer’s share of contributions to the Public Service Death Benefit Account
  • the employer’s share of contributions to the Canada Pension Plan and Québec Pension Plan
  • the employer’s share of Employment Insurance premiums
  • the employer’s share of disability and life insurance premiums and related Québec sales tax
  • the employer’s share of the Québec Parental Insurance Plan premiums
  • claims and related costs under the Public Service Health Care Plan, the Public Service Dental Care Plan and the Pensioners’ Dental Services Plan
  • provincial payroll taxes for employees who work in Quebec, Ontario, Manitoba, and Newfoundland and Labrador. The payroll tax is levied on employers in these provinces to help fund their respective health plans
  • returns to certain employees of their share of the Employment Insurance premium reduction

Generally, statutory employer contributions to the Public Service Pension Plan, Public Service Death Benefit Account, Canada Pension Plan, Québec Pension Plan and Employment Insurance premiums are recovered from all departments, agencies and revolving funds based on expenses incurred for salaries and wages. Non‑statutory contributions to other employee benefit plans and payroll‑related employer obligations are provided on a without-charge basis for most departments and agencies and on a recovery basis for revolving funds and certain departments and agencies, based on a percentage of expenses incurred for salaries and wages.

Departmental expenses under the “Employer” core responsibility are related to the following activities of the Office of the Chief Human Resources Officer:

  • collective bargaining and labour relations
  • pension and benefits management
  • people management and executive policies and initiatives

The following table presents a detailed breakdown of employer expenses by major category:

($ thousands)
2019 2018
Public service employer payments
Employer’s contributions to government employee benefit plans (statutory)Table 16 note 1
3,524,359 3,289,319
Public Service Pension Plan contributions in respect of actuarial deficits (statutory)
3,107,000 340,000
Public Service Health Care Plan claims (Vote 20)
1,368,250 1,314,042
Group disability and life insurance premiums (Vote 20)
823,970 1,351,882
Provincial payroll taxes (Vote 20)
622,322 592,034
Public service and pensioners’ dental plans claims (Vote 20)
504,611 482,762
Provincial insurance plan premiums and other expenses (Vote 20)
72,922 87,013
Subtotal expenses
10,023,434 7,457,052
Employer’s contributions to government employee benefit plans recovered from government departments and agencies (statutory)
(3,524,359) (3,288,068)
Employee, pensioner and employer contributions to group insurance plans (Vote 20)Table 16 note 2
(704,255) (656,462)
Subtotal recoveries
(4,228,614) (3,944,530)
Net public service employer payments 5,794,820 3,512,522
Departmental expenses (Vote 1)Table 16 note 3 80,801 70,401
Total employer expenses 5,875,621 3,582,923
Table 16 notes
Table Note 1

These amounts include contributions to the Public Service Pension Plan and Retirement Compensation Arrangement, the Canada Pension Plan and the Québec Pension Plan, Employment Insurance and the Public Service Death Benefit Account.

Return to Table 16 note 1 referrer

Table Note 2

This amount consists mainly of contributions to health, dental and disability plans, including any related taxes or premiums payable to Canadian provinces.

Return to Table 16 note 2 referrer

Table Note 3

Departmental expenses (Vote 1) comprise expenses related to the activities of the Office of the Chief Human Resources Officer.

Return to Table 16 note 3 referrer

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