Financial Statements

Statement of Management Responsibility Including Internal Control Over Financial Reporting

CANADA INDUSTRIAL RELATIONS BOARD

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2013, and all information contained in these statements rests with the management of the Canada Industrial Relations Board (the CIRB or the Board). These financial statements have been prepared by management using the Government'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 Board’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Board’s Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (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 Board 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 identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

The CIRB is subject to periodic Core Control Audits performed by the Office of the Comptroller General of Canada (OCG) and uses the results of such audits to comply with the Treasury Board Policy on Internal Control.

A Core Control Audit was performed in 2009-10 by the OCG. The Audit Report and related Management Action Plan are posted on the departmental Website.

The financial statements of the Board have not been audited.

____________________________   ____________________________
Elizabeth MacPherson, Chairperson
Ottawa, Canada
  Ginette Brazeau, Executive Director
Ottawa, Canada
     
18-10-2013   18-10-2013
____________________________
Date
  ____________________________
Date

Statement of Financial Position (unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

AS AT MARCH 31
in dollars
2013 2012
Liabilities
Liabilities
Accounts payable and accrued liabilities (Note 4) 958,877 854,382
Vacation pay 443,305 367,185
Employee future benefits (Note 5) 696,824 766,764
Total liabilities 2,099,006 1,988,331
 
Assets
Financial assets
Due from Consolidated Revenue Fund 838,269 736,141
Accounts receivable and advances (Note 6) 184,905 148,566
Total financial assets 1,023,174 884,707
 
Departmental net debt 1,075,832 1,103,624
 
Non-financial assets
Prepaid expenses - 5,118
Tangible capital assets (Note 7) 1,470,905 1,722,562
Total Non-financial assets 1,470,905 1,727,680
 
Departmental net financial position 395,073 624,056
Contractual obligations (Note 8)
The accompanying notes form an integral part of these financial statements.

____________________________   ____________________________
Elizabeth MacPherson, Chairperson
Ottawa, Canada
  Ginette Brazeau, Executive Director
Ottawa, Canada
     
18-10-2013   18-10-2013
____________________________
Date
  ____________________________
Date

Statement of Operations and Departmental Net Financial Position unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

FOR THE YEAR ENDED MARCH 31
in dollars
2013
Planned Results
(Restated
Note 2a)
2013 2012
Expenses
Adjudicative and dispute resolution program 12,407,000 11,928,147 11,622,688
Internal services 5,230,000 4,831,620 4,713,242
Total expenses 17,637,000 16,759,767 16,335,930
Revenues
Miscellaneous revenues 1,000 - 48
Revenues earned on behalf of Government (1,000) - (20)
Total revenues - - 28
 
Net cost of operations before government funding and transfers 17,637,000 16,759,767 16,335,903
 
Government Funding and Transfers
Net cash provided by Government 13,797,000 12,683,633 13,736,325
Change in due from Consolidated Revenue Fund (130,000) 102,128 (64,191)
Services provided without charge by other government departments (Note 9) 3,619,000 3,745,024 3,690,676
Total Government funding and transfers 17,286,000 16,530,785 17,362,810
 
Net cost of operations after government funding and transfers 351,000 228,982 (1,026,907)
 
Departmental net financial position – Beginning of year 16,000 624,056 (402,852)
 
Departmental net financial position – End of year (335,000) 395,073 624,056
Segmented information (Note 10)
The accompanying notes form an integral part of these financial statements.

Statement of Change in Departmental Net Debt (unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

FOR THE YEAR ENDED MARCH 31
in dollars
2013
Planned Results
(Restated
Note 2a)
2013 2012
 
Net cost of operations after government funding and transfers 351,000 228,982 (1,026,907)
 
Change due to tangible capital assets
Acquisition of tangible capital assets 32,000 181,517 179,711
Amortization of tangible capital assets (383,000) (433,175) (378,991)
Total change due to tangible capital assets (351,000) (251,657) (199,279)
 
Change due to prepaid expenses - (5,118) 5,118
 
Net increase (decrease) in departmental debt - (27,793) (1,221,068)
 
Departmental net debt – Beginning of year 1,525,000 1,103,624 2,324,693
Departmental net debt – End of year 1,525,000 1,075,832 1,103,624
The accompanying notes form an integral part of these financial statements.

Statement of Cash Flows (unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

FOR THE YEAR ENDED MARCH 31
in dollars
2013 2012
Operating Activities
Net cost of operations before government funding and transfers 16,759,767 16,335,903
 
Non-cash items:
Amortization of tangible capital assets (433,175) (378,991)
Services provided without charge by other government departments (Note 9) (3,745,024) (3,690,676)
Increase (Decrease) in prepaid expenses (5,118) 5,118
Gain on disposal and write-off of tangible capital assets 2 -
Variations in statement of financial position:
Increase in accounts payable and accrued liabilities (Note 4) (104,495) (19,489)
Increase in vacation pay (76,120) 61,668
Decrease in employee future benefits (Note 5) 69,940 1,162,296
Increase in accounts receivable and advances 36,339 80,785
Cash used in operating activities 12,502,116 13,556,614
 
Capital Investing Activities
Acquisitions of tangible capital assets 181,517 179,711
 
Net cash provided by Government of Canada 12,683,633 13,736,325
The accompanying notes form an integral part of these financial statements.

Notes to the Financial Statements (unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

FOR THE YEAR ENDED MARCH 31, 2013

1. Authority and Objective

The Canada Industrial Relations Board (the CIRB or the Board) is an independent, representational, quasi-judicial tribunal responsible for the interpretation and application of Part I (Industrial Relations) and certain provisions of Part II (Occupational Health and Safety) of the Canada Labour Code (the Code). It was established in January 1999 through amendments to Part I of the Code. The mandate of the Board is to contribute to and to promote effective industrial relations in any work, undertaking or business that falls within the authority of the Parliament of Canada.

In accordance with the approved Program Alignment Architecture (PAA), the Statement of Operations is describe in detail based on the following Programs:

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; and the settlement of the terms of a first collective agreement.

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 Agencies requirements. These groups are: management and oversight services; human resources services; financial and administrative services (including facilities, material and procurement services); information management services; and information technology services.

2. Summary of Significant Accounting Policies

These financial statements have been prepared using the Government'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.

Significant accounting policies are as follows:

(a) 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 3 provides a reconciliation between the bases of reporting. The planned results amounts in the Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2012-13 Report on Plans and Priorities. The future-oriented financial statements for 2012-13 have been restated to reflect the revenue net of non-respendable amounts. The restatement resulted in a $1,000 increase in net cost of operations before government funding and transfers. In addition, the future-oriented financial statements have also been reclassified to conform to the current year presentation.

(b) 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 Board is deposited to the CRF, and all cash disbursements made by the Board 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.

(c) 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.

(d) Expenses
Expenses are recorded on the accrual basis:

Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.

Services provided without charge by other government departments for accommodation, legal services and employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

(e) 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.

(f) Employee future benefits

Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. 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.

(g) Accounts Receivable
Most receivables recorded by the Board are from other government departments. Recovery is considered certain and a provision has not been made.

(h) 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. The Board does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian reserves and museum collections.

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

Asset class Amortization period
Leasehold improvements Lesser of the remaining term of lease or useful life of the improvement
Computer Hardware 3 years
Computer Software 3-10 years
Furniture and equipment 10 years
Machinery and equipment 5 years

(i) Measurement uncertainty
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the liability for employee severance benefits and the useful life of tangible capital. 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.

3. Parliamentary Authorities

The Board receives most of its funding through annual Parliamentary authorities. Items recognized in the Statement of Operations and the Departemental Net Financial Position 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 current year authorities used

in dollars 2013 2012
Net cost of operations before government funding and transfers 16,759,767 16,335,903
 
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (3,745,024) (3,690,676)
Refund/reversal of previous year's expenditures 34,327 23,868
Amortization of tangible capital assets (433,175) (378,991)
Employee future benefits 69,940 1,162,296
Gain on disposal/adjustment to capital assets 2 -
Revenues not available for spending - 28
Increase (Decrease) in vacation pay (76,120) 61,668
  (4,150,050) (2,821,806)
 
Adjustments for items not affecting net cost of operations but affecting authorities:
Add (Less):
Acquisitions of tangible capital assets 181,517 179,711
Increase (Decrease) in prepaid expenses (5,118) 5,118
  176,399 184,829
 
Current year authorities used 12,786,116 13,698,924

(b) Authorities provided and used

in dollars 2013 2012
Authorities Provided:
Operating expenditures–Vote 10 11,424,279 11,421,923
Transfer from TB–Vote 15 2,119 2,356
Transfer from TB–Vote 25 585,396 497,747
Transfer from TB–Vote 30 221,893 1,131,362
Statutory amounts 1,451,104 1,487,545
  13,684,791 14,540,933
 
Less:
Lapsed: Operating (898,675) (842,009)
Current year authorities used 112,786,116 13,698,924

4. Accounts Payable and Accrued Liabilities

The following table presents details of the Board's accounts payable and accrued liabilities:

in dollars 2013 2012
Account payable to other government departments and agencies 38,407 95,930
Account payable to external parties 844,751 674,528
Total accounts payable 883,158 770,458
Accrued liabilities 75,718 83,924
Total accounts payable and accrued liabilities 958,877 854,382

5. Employee Future Benefits

(a) 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 Board contribute to the cost of the Plan. The 2012–13 expense amounts to $1,036,068 ($1,068,884 in 2011–12), which represents approximately 1.7 times (1.8 in 2011–12) the contributions by 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.

(b) 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 authorities. Information about the severance benefits, measured as at March 31, is as follows:

in dollars 2013 2012
Accrued benefit obligation, beginning of year 766,764 1,929,060
Expense for the year 11,982 (142,378)
Benefits paid during the year (81,922) (1,019,918)
Accrued benefit obligation, end of year 696,824 766,764

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.

6. Accounts Receivable and Advances

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

in dollars 2013 2012
Receivables – other government departments and agencies 159,308 146,157
Receivables – external parties 21,098 409
Employee advances 4,500 2,000
Total 184,905 148,566

7. Tangible Capital Assets

Cost
in dollars
Opening
Balance
Acquisitions Disposals and
Write-Offs
Closing
Balance
Leasehold improvements 903,112 - - 903,112
Informatics hardware 445,546 126,253 - 571,799
Informatics software 2,772,712 - - 2,772,712
Furniture and equipment 371,844 55,264 1 427,109
Machinery and equipment 22,963 - - 22,963
  4,516,177 181,517 1 4,697,695
 
Accumulated
Amortization
in dollars
Opening
Balance
Amortization
expense
Disposals and
Write-Offs
Closing
Balance
Leasehold improvements 446,113 71,854 - 517,967
Informatics hardware 284,169 56,666 - 340,835
Informatics software 1,823,371 275,462 - 2,098,833
Furniture and equipment 216,999 29,193 (1) 246,191
Machinery and equipment 22,963 - - 22,963
  2,793,615 433,175 (1) 3,226,789
 
  2012     2013
Net Book Value 1,722,562     1,470,906

8. Contractual Obligations

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


in dollars 2014 2015 2016 2017 2018 and
thereafter
Total
Operating leases 45,256 41,537 - - - 86,793
Services contracts 80,041 2,623 - - - 82,664
Total 125,297 44,160 - - - 169,457

9. 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.

(a) 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 dollars 2013 2012
Accommodation 2,943,962 2,875,214
Employer's contribution to the health and dental insurance plans 791,123 814,661
Legal services 9,939 801
Total 3,745,024 3,690,676

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 Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with related parties

in dollars 2013 2012
Accounts receivable with other government departments and agencies 159,308 146,157
Accounts payable to other government departments and agencies 38,407 95,930
Expenses - Other Government departments and agencies 2,039,418 2,213,343

Expenses and revenues disclosed in (b) exclude common services provided without charge, which are already disclosed in (a).

10. Segmented Information

Presentation by segment is based on the Board's program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in Note 2. The following table presents the expenses incurred and revenues generated for the main programs, by major object of expense and by major type of revenue. The segment results for the period are as follows:

in dollars Adjudicative and Dispute
Resolution Program
Internal Services 2013
Total
2012
Total
Operating expenses
Salaries and employee benefits 8,601,681 2,535,718 11,137,399 10,659,924
Accommodation 2,216,803 727,159 2,943,962 2,875,214
Professional and special services 482,758 292,741 775,499 807,020
Travel and relocation 454,881 19,595 474,476 641,123
Amortization of tangible capital assets - 433,175 433,175 378,991
Communication 42,782 186,783 229,565 292,107
Utilities, materials and supplies 17,902 144,958 162,860 146,065
Equipment 52,928 220,968 273,896 224,360
Equipment rentals 20,536 151,729 172,266 160,227
Repairs and maintenance 7,565 90,689 98,254 108,046
Information 2,451 28,100 30,551 16,225
Other 27,860 7 27,866 26,629
Total expenses 11,928,147 4,831,620 16,759,767 16,335,930
 
Miscellaneous revenues - - - 48
Revenues earned on behalf of Government - - - (20)
Total revenues - - - 28
 
Net cost of operations after government funding and transfers 11,928,147 4,831,620 16,759,767 16,335,903
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