Future-Oriented Financial Statements

Statement of Management Responsibility

CANADA INDUSTRIAL RELATIONS BOARD

Canada Industrial Relations Board's management is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at March 8, 2013, and reflect the plans described in the Report on Plans and Priorities.

Ginette Brazeau, Chief Financial Officer
Ottawa, Ontario

Elizabeth MacPherson, Chairperson
Ottawa, Ontario

Date March 20, 2013

Future-Oriented Statement of Financial Position (Unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

For the year ended March 31
(in thousands of dollars)
Planned Results 2014 Estimated Results 2013
Liabilities
Accounts payable and accrued liabilities
(Note 6)
783 774
Vacation pay and compensatory leave 335 354
Employee Future Benefits (Note 7) 599 649
Total Liabilities 1,717 1,776
Assets
Financial Assets
Due from the Consolidated Revenue Fund 724 712
Accounts receivable and advances (Note 8) 89 90
Total Financial Assets 813 802
Departmental Net Debt 904 974
Non-Financial Assets
Tangible capital assets (Note 9) 1,471 1,459
Departmental net financial position 568 485

Information for the year ending March 31, 2013, includes actual amounts from April 1, 2012, to January 31, 2013.

The accompanying notes form an integral part of these future-oriented financial statements.

Future-Oriented Statement of Operations and Departmental Net Financial Position (Unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

For the year ending March 31
(in thousands of dollars)
Planned Results 2014 Estimated Results 2013
Expenses
Adjudicative and Dispute Resolution Program 13,246 11,755
Internal Services 4,724 4,672
Total Expenses 17,970 16,427
Revenues
Miscellaneous revenues 0 -
Revenues earned on behalf of government - -
Total Revenues 0 -
Net Cost of Operations Before Government Funding and Transfers 17,970 16,427
Government Funding and Transfers
Net cash provided by government 14,350 12,621
Change in due from the Consolidated Revenue Fund 12 (24)
Services provided without charge by other government departments (Note 11) 3,691 3,691
Total Government Funding and Transfers 18,053 16,288
Net Cost of Operations After Government Funding and Transfers (83) 139
Departmental Net Financial Position–Beginning of Year 485 624
Departmental Net Financial Position–End of Year 568 485

Information for the year ending March 31, 2013, includes actual amounts from April 1, 2012, to January 31, 2013.

The accompanying notes form an integral part of these future-oriented financial statements.

Future-Oriented Statement of Change in Departmental Net Debt / Net Financial Assets of Canada (Unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

For the year ending March 31
(in thousands of dollars)
Planned Results 2014 Estimated Results 2013
Net Cost of Operations After Government Funding and Transfers (83) 139
Change Due to Tangible Capital Assets
Acquisition of tangible capital assets 554 163
Amortization of tangible capital assets (542) (432)
Total Change Due to Tangible Capital Assets 13 (269)
Net Decrease in Departmental Net Debt (70) (130)
Departmental Net Debt–Beginning of Year 974 1,104
Departmental Net Debt–End of Year 904 974

Information for the year ending March 31, 2013, includes actual amounts from April 1, 2012, to January 31, 2013.

The accompanying notes form an integral part of these future-oriented financial statements.

Future-Oriented Statement of Cash Flow (Unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

For the year ending March 31
(in thousands of dollars)
Planned Results 2014 Estimated Results 2013
Operating Activities
Net Cost of Operations 17,970 16,427
Non-Cash Items:
Services provided without charge by other government departments (Note 11) (3,691) (3,691)
Amortization of tangible capital assets (542) (432)
Total (4,232) (4,123)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances (1) (59)
Decrease (increase) in accounts payable and accrued liabilities (9) 81
Decrease (increase) in vacation pay and compensatory leave 19 14
Decrease (increase) in future-employee benefits 50 118
Total 59 153
Cash Used in Operating Activities 13,796 12,458
Capital Investing Activities:
Acquisitions of tangible capital assets 554 163
Net Cash Provided by Government of Canada 14,350 12,621

Information for the year ending March 31, 2013, includes actual amounts from April 1, 2012, to January 31, 2013.

The accompanying notes form an integral part of these future-oriented financial statements.

Notes to Future-Oriented Financial Statements (Unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

1. Authority and Objective

The Canada Industrial Relations Board (CIRB or the Board) is an independent, representational, quasi-judicial tribunal responsible for the interpretation and application of the Canada Labour Code (the Code), Part I, Industrial Relations, and certain provisions of Part II, Occupational Health and Safety. It was established in January 1999 through amendments to Part I of the Code. The objective of the Board is to contribute to and promote effective industrial relations in any work, undertaking or business that falls within the authority of the Parliament of Canada. It is also planned that starting in fiscal year 2013–14, the Board will be responsible for the interpretation and application of Part II of the Status of the Artist Act.

According to the approved Program Alignment Architecture (PAA), the Statement of Operations was detailed by the following Programs (Business Lines):

Adjudicative and Dispute Resolution Program
Through this program, the CIRB resolves labour relations issues by exercising its statutory powers relating to the application and interpretation of Part I (Industrial Relations), and certain provisions of Part II (Occupational Health and Safety), of the Code. Activities include the granting, modification and termination of bargaining rights; the investigation, mediation and adjudication of complaints alleging violation of Part I of the Code; the determination of level of services required to be maintained during a work stoppage; the exercise of ancillary remedial authority; the exercise of cease and desist powers in cases of unlawful strikes or lockouts; the settlement of the terms of a first collective agreement; the provision of administrative services to support these activities.

Internal Services
Internal Services are groups of activities and resources that are administered to support the operational needs of the Board's adjudicative and dispute resolution program and other corporate obligations of the CIRB, including Central Agency requirements. These groups are: management and oversight services; human resources services; financial and administrative services (including facilities, materiel and procurement services); information management (IM) services; information technology (IT) services.

2. Significant Assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the CIRB as described in the Report on Plans and Priorities.

The estimated results for fiscal year 2012–13 are based on actual results as at January 31, 2013 and forecasts for the remainder of the fiscal year. Estimated year-end results for 2012–13 are used as the opening position for the 2013–14 planned results, and forecasts have been made for the planned results for the 2013–14 fiscal year.

The main assumptions underlying the forecasts are as follows:

  1. The department's activities will remain substantially the same as for the previous year.
  2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.

These assumptions are adopted as at March 8, 2013.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2012–13 and for 2013–14, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these financial statements, the CIRB has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented financial statements and the historical financial statements include:

  1. Effect of timing and amounts of acquisitions and disposals of equipment on gains/losses and amortization expense.
  2. Implementation of new collective agreements.
  3. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.
  4. Changes in standard rate used by Treasury Board to calculate employee benefits.

Once the Report on Plans and Priorities is presented, CIRB will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

4. Summary of Significant Accounting Policies

The future-oriented financial statements have been prepared in accordance with the Treasury Board accounting policies in effect for the 2011–12 fiscal year. These accounting policies, stated below, are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

  1. Parliamentary Authorities
    The Board is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Board 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 5 provides a reconciliation between the bases of reporting.
  2. Net Cash Provided by Government
    The Board operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the CIRB is deposited to the CRF and all cash disbursements made by the CIRB 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 departments of the government.
  3. Due from the CRF
    Amounts due from/to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Board is entitled to draw from the CRF without further appropriations to discharge its liabilities.
  4. Expenses–are recorded on the accrual basis:
    Vacation pay and compensatory leave are expensed as the benefits accrued to employees under their respective terms of employment.
    Services provided without charge by other government departments for accommodation and the employer's contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
  5. Revenues
    Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
    Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
    Revenues that are non-respendable are not available to discharge the Department's liabilities. While the deputy head 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 are therefore presented in reduction of the entity's gross revenues.
  6. Employee Future Benefits
    Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government of Canada. The Board’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The Board’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan’s sponsor.
    Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
  7. Accounts Receivable
    Most receivables recorded by the Board are from other government departments. Recovery is considered certain and a provision has not been made.
  8. Tangible capital assets
    All tangible capital assets and leasehold improvements having an initial cost of $7,000 or more are recorded at their acquisition cost.
    Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
Asset class Amortization period
Leasehold improvements Lesser of the remaining term of the lease or useful life of the improvement
Informatics hardware 3 years
Informatics software 3–10 years
Furniture and equipment 10 years
Machinery and equipment 5 years

5. Parliamentary Authorities

The Board receives most of its funding through annual Parliamentary authorities. Items recognized in the Statement of Operations and the Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Board has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Reconciliation of net cost of operations to requested authorities:
(in thousands of dollars) Planned Results 2014 Estimated Results
2013
Net cost of operations before government funding and transfers 17,970 16,427
 
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by othe governement departements (3,691) (3,691)
Amortization of tangible capital assets (542) (432)
Employee future benefits (3) (3)
Vacation pay and compensatory leave 19 19
Revenue not available for spending 0 -
Refunds/reversals of previous year's expenditures 39 3
  (4,177) (4,104)
 
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 554 163
Forecasted current year lapse - 1,180
Forecast authorities available 14,347 13,667

(b) Authorities requested:
(in thousands of dollars) Planned Results 2014 Estimated Results 2013
Authorities requested
Vote 10–Operating expenditures 11,917 11,424
Transfer from Treasury Board–Vote 15 - -
Transfer from Treasury Board–Vote 25 563 563
Transfer from Treasury Board–Vote 30 230 103
Statutory contributions to employee benefit plans 1,637 1,576
Forecast authorities available 14,347 13,667

Authorities presented reflect current forecasts of statutory items, approved initiatives included and expected to be included in Estimates documents and, when reasonable estimates can be made, estimates of amounts to be allocated from Treasury Board central votes.

6. Accounts Payable and Accrued Liabilities

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

(in thousands of dollars) Planned Results 2014 Estimated Results 2013
Accounts payable to other government departments and agencies 96 96
Accounts payable to external parties 292 286
Sub-Total 388 382
Accrued liabilities 395 392
Total 783 774

7. Employee Future Benefits

  1. Pension benefits:
    The Board's employees participate in the Public Service Pension 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 Plans benefits and they are indexed to inflation.
    Both the employees and the department contribute to the cost of the Plan. The forecast expenses are $1,125 in 2012–13 and $1,169 in 2013–14, which represents approximately 1.8 times the contributions of employees.
    The Board's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
  2. Severance benefits:
    The Board provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, estimated as at the date of these statements, is as follows:

    (in thousands of dollars) Planned Results 2014 Estimated Results 2013
    Accrued benefit obligation, beginning of year 649 767
    Expense for the year 3 3
    Expected benefits payments during the year (53) (121)
    Accrued benefit obligation, end of year 599 649

    As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

8. Accounts Receivable and Advances

The following table presents details of the Board's accounts receivable and advances balances:

(in thousands of dollars) Planned Results 2014 Estimated Results 2013
Receivables from other government departments and agencies 82 80
Receivables from external parties 5 5
Employee advances 2 5
Total 89 90

9. Tangible Capital Assets

Cost Opening Balance Acquisitions Adjustments/
Disposals
Closing Balance
(in thousands of dollars)
Leasehold improvements 903 - - 903
Informatics hardware 609 - - 609
Informatics software 2,814 554 - 3,369
Furniture and equipment 372 - - 372
Machinery and equipment 23 - - 23
  4,721 554 - 5,275
 
Accumulated Amortization Opening Balance Amortization expense Adjustments/
Disposals
Closing Balance
(in thousands of dollars)
Leasehold improvements 518 72 - 589
Informatics hardware 368 110 - 477
Informatics software 2,108 331 - 2,439
Furniture and equipment 246 29 - 275
Machinery and equipment 23 - - 23
  3,262 542 - 3,804
 
Net Book Value 1,459 13 - 1,471

10. Contractual Obligations

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

(in thousands of dollars) 2013 2014 2015 2016 2017 and thereafter Total
Operating leases 72 45 4 4 - 125
Other contracts 4 4 - - - 8
Total 76 49 4 4 - 133

11. Related Party Transactions

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

  1. Common services provided without charge by other government departments
    During the year, the Board received services without charge from certain common service organizations, related to accommodation, legal services and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the Board's Statement of Operations and Departmental Net Financial Position as follows:

    (in thousands of dollars) Planned Results 2014 Estimated Results
    2013
    Accommodation 2,875 2,875
    Employer's contribution to the health and dental insurance plans 815 815
    Legal services 1 1
    Total 3,691 3,691

    The government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included in the Board's Future-Oriented Statement of Operations and Departmental Net Financial Position.

  2. Other transactions with related parties

    (in thousands of dollars) Planned Results 2014 Estimated Results
    2013
    Accounts receivable with other government departments and agencies 87 85
    Accounts payable to other government departments and agencies (96) (96)

12. Segmented Information

Presentation by segment is based on the Board's program. The presentation by segment is based on the same accounting policies as described in the Summary of Significant Accounting Policies in Note 4. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expense and by major type of revenues. The segment results for the period are as follows:

(in thousands of dollars) Adjudicative and Dispute Resolution Program Internal Services Planned Results 2014 Estimated results 2013
Operating expenses
Salaries and employee benefits 8,074 2,974 11,048 10,660
Accommodation 2,168 707 2,875 2,875
Professional and special services 1,032 136 1,168 820
Travel and relocation 912 16 928 651
Amortization of tangible capital assets - 542 542 432
Communication 325 98 423 297
Utilities, materials and supplies 153 59 211 148
Equipment 236 89 325 228
Equipment rentals 177 55 232 163
Repairs and maintenance 114 42 156 110
Information 17 6 23 16
Other 38 0 39 27
Total expenses 13,246 4,724 17,970 16,427
         
Miscellaneous revenues - 0 0 -
Revenues earned on behalf of government - - - -
Total revenues - 0 0 -
         
Net cost of operations after government funding and transfers 13,246 4,724 17,970 16,427
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