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 of the Canadian Industrial Relations Board (the Board) for the seven-month period ended October 31, 2014, and all information contained in these statements rests with the management of the Administrative Tribunals Support Services of Canada. 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’s 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 Board's website. The audit results and related management action plan will be considered as part of the Administrative Tribunals Support Service of Canada risk-based assessment for the period November 1, 2014 to March 31, 2015, in accordance with the Treasury Board Policy on Internal Control.

The financial statements of the Board have not been audited.

Marie-France Pelletier
Chief Administrator
Administrative Tribunals Support Service of Canada

Ginette Brazeau
Chief Financial Officer
Canada Industrial Relations Board

Ottawa, Ontario
September 4, 2015

Statement of Financial Position (Unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

As at October 31, 2014
in dollars
October 31, 2014 March 31, 2014
Liabilities
Accounts payable and accrued liabilities (note 5) 859,098 808,283
Vacation pay 365,126 417,072
Employee future benefits (note 6) 640,473 571,763
Total liabilities 1,864,697 1,797,118
 
Financial assets
Due from Consolidated Revenue Fund 668,028 675,182
Accounts receivable and advances (note 7) 279,253 170,902
Total financial assets 947,281 846,084
 
Departmental net debt 917,416 951,034
 
Non-financial assets
Tangible capital assets (note 8) 848,935 1,109,345
Total non-financial assets 848,935 1,109,345
Departmental net financial position (68,481) 158,311
Transfer of operations as a result of a government reorganization (note 2)

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

Marie-France Pelletier
Chief Administrator
Administrative Tribunals Support Service of Canada

Ginette Brazeau
Chief Financial Officer
Canada Industrial Relations Board

Ottawa, Canada
September 4, 2015

Statement of Operations and Departmental Net Financial Position (Unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

in dollars Planned Results
for the 12-month
period ended
March 31, 2015
For the 7-month
period ended
October 31, 2014
For the 12-month
period ended
March 31, 2014
Expenses
Adjudicative and Dispute Resolution Program 12,572,784 6,891,743 11,813,554
Internal Services 4,994,009 2,649,273 5,241,463
Total expenses 17,566,793 9,541,016 17,055,017
Revenues
Miscellaneous revenues - 5 201
Revenues earned on behalf of Government - (5) (201)
Total revenues - - -
 
Net cost of operations before government funding and transfers 17,566,793 9,541,016 17,055,017
 
Government funding and transfers
Net cash provided by Government   7,542,349 13,611,762
Change in due from Consolidated Revenue Fund   (7,154) (163,087)
Services provided without charge by other government departments (note 9)   2,088,282 3,649,861
Transfer of the transition payments for implementing salary payments in arrears (note 10)   (309,253) -
Transfer of assets and liabilities from an other government department (note 11)   - (280,281)
 
Net cost of operations after government funding and transfers   226,792 236,762
 
Departmental net financial position – Beginning of year   158,311 395,073
 
Departmental net financial position – End of year   (68,481) 158,311
Segmented information (note 12)
The accompanying notes form an integral part of these financial statements.

Statement of Change in Departmental Net Debt (Unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

in dollars For the 7-month
period ended
October 31, 2014
For the 12-month
period ended
March 31, 2014
 
Net cost of operations after government funding and transfers 226,792 236,762
 
Change due to tangible capital assets
Acquisition of tangible capital assets (note 8) 9,742 118,660
Amortization of tangible capital assets (note 8) (270,152) (480,220)
Change due to tangible capital assets (260,410) (361,560)
 
Net decrease in departmental net debt (33,618) (124,798)
 
Departmental net debt – Beginning of year 951,034 1,075,832
Departmental net debt – End of year 917,416 951,034
The accompanying notes form an integral part of these financial statements.

Statement of Cash Flows (Unaudited)

CANADA INDUSTRIAL RELATIONS BOARD


in dollars
For the 7-month
period ended
October 31, 2014
For the 12-month
period ended
March 31, 2014
Operating activities
Net cost of operations before government funding and transfers 9,541,016 17,055,017
 
Non-cash items:
Amortization of tangible capital assets (note 8) (270,152) (480,220)
Services provided without charge by other government departments (note 9) (2,088,282) (3,649,861)
Transition payments for implementing salary payments in arrears (note 10) 309,253 -
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances 108,351 (14,003)
Decrease (increase) in accounts payable and accrued liabilities (50,815) 150,594
Decrease in vacation pay 51,946 26,233
Decrease (increase) in employee future benefits (68,710) 125,061
Transfer of assets and liabilities from an other government department (note 11) - 280,281
Cash used in operating activities 7,532,607 13,493,102
 
Capital investing activities
Acquisition of tangible capital assets 9,742 118,660
Cash used in capital investing activities 9,742 118,660
 
Net cash provided by Government of Canada 7,542,349 13,611,762
The accompanying notes form an integral part of these financial statements.

Notes to the Financial Statements (Unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

For the 7–month period ended October 31, 2014

1. Authority and objectives

The Canada Industrial Relations Board (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), as well as Part II of the Status of the Artist Act. The Board was established in January 1999 through amendments to Part I of the Code. The mandate of the Board is to contribute to and promote a harmonious industrial relations climate in the federally regulated private sector.

In accordance with the approved Program Alignment Architecture (PAA), the Statement of Operations and Departmental Net Financial Position presents the following programs:

Adjudicative and Dispute Resolution Program
Through this program, the Board 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, as well as Part II of the Status of the Artist Act. Activities include the granting, modification and termination of collective 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 prompt consideration of situations in which illegal work stoppages are alleged; assistance to companies and unions to help them resolve the labour relations implications of corporate mergers and acquisitions, including the determination of appropriate bargaining unit structures and representation rights.

Internal Services
Internal Services are groups of related activities and resources that are administered to support the needs of the Board’s Adjudicative and Dispute Resolution Program and other corporate obligations of the Board. These groups are: Management and Oversight Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Management Services; Acquisition Services; and Other Administrative Services.

2. Government reorganization

In Canada’s Economic Action Plan 2014, the Government announced its intention to create the Administrative Tribunals Support Service of Canada (ATSSC). This new organization, which consolidates operations of several administrative tribunals, would provide support services to the Board. The Board would retain its adjudication powers while it would transfer all human and financial resources to the ATSSC.

The Economic Action Plan 2014 Act, No. 1 received Royal Assent on June 19, 2014. As a result, the ATSSC came into force on November 1, 2014. The net assets of $1,796,216 and net liabilities of $1,864,697 have been transferred to the ATSSC as of this date.

These financial statements represent the results of operations for the seven–month period ended October 31, 2014, and the financial position of the Board as at October 31, 2014, immediately before the transfer of assets, liabilities, and commitments to the ATSSC on November 1, 2014. Comparative figures for the year ended March 31, 2014 are for a twelve month period.

3. 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 4 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 2014-15 Report on Plans and Priorities. 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 2014-15 Report on Plans and Priorities.

(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 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:

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

ii. 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
Miscellaneous 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 Board’s liabilities. While the Deputy Head is expected to maintain accounting control, he 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

i. 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.

ii.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
Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded where recovery is considered uncertain.

(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
Informatics hardware 3 years
Informatics 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 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.

4. Parliamentary authorities

The Board 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 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 For the 7-month
period ended
October 31, 2014
For the 12-month
period ended
March 31, 2014
Net cost of operations before government funding and transfers 9,541,016 17,055,017
 
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (2,088,282) (3,649,861)
Refund/adjustments of previous year's expenditures 3,531 62,316
Amortization of tangible capital assets (270,152) (480,220)
Decrease in vacation pay 51,946 26,233
Decrease (increase) in employee future benefits (68,710) 125,061
  (2,371,667) (3,916,471)
 
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 9,742 118,660
Transition payments for implementing salary payments in arrears 309,253 -
  318,995 118,660
 
Current year authorities used 7,488,344 13,257,206

(b) Authorities provided and used

in dollars For the 7-month
period ended
October 31, 2014
For the 12-month
period ended
March 31, 2014
Authorities provided:
Vote 1 – Program expenditures (Vote 10 in 2013-14) 6,599,912 12,591,232
Statutory – Contributions to employee benefit plans 898,476 1,504,828
Statutory – Spending of proceeds from the disposal of surplus Crown assets 201 -
Total authorities provided 7,498,589 14,096,060
 
Less:
Authorities available for future years - (201)
Lapsed: Operating (10,044) (838,653)
Lapsed: Spending of proceeds from the disposal of surplus Crown assets (201) -
Current year authorities used 7,488,344 13,257,206

5. Accounts payable and accrued liabilities

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

in dollars October 31, 2014 March 31, 2014
Accounts payable – Other government departments and agencies 175,176 22,407
Accounts payable – External parties 66,434 304,124
Total accounts payable 241,610 326,531
Accrued liabilities 617,488 481,752
Total accounts payable and accrued liabilities 859,098 808,283

6. Employee future benefits

(a) Pension benefits
The Board’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 Plans benefits and they are indexed to inflation.

Both the employees and the Board contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Canada’s Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012, and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

For the seven-month period ended October 31, 2014, expense amounts to $614,198 ($1,057,903 in 2013–14). For Group 1 members, the expense represents approximately 1.41 times (1.6 times in 2013–14) the employee contributions and, for Group 2 members, approximately 1.39 times (1.5 times in 2013–14) the employee contributions.

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 salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities.

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. Information about the severance benefits, measured as at October 31, is as follows:

in dollars October 31, 2014 March 31, 2014
Accrued benefit obligation, beginning of year 571,763 696,824
Expense for the year 154,907 112,885
Benefits paid during the year (86,197) (237,946)
Accrued benefit obligation, end of year 640,473 571,763

7. Accounts receivable and advances

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

in dollars October 31, 2014 March 31, 2014
Accounts receivable – Other government departments and agencies 277,721 160,992
Accounts receivable – External parties 1,532 8,510
Employee advances - 1,400
Total accounts receivable and advances 279,253 170,902

8. Tangible capital assets

Cost
in dollars
Opening
Balance
April 1, 2014
Acquisitions Disposals and
Write-Offs
Closing
Balance
October 31, 2014
Leasehold improvements 910,836 - - 910,836
Informatics hardware 682,735 9,742 - 692,477
Informatics software 2,772,712 - - 2,772,712
Furniture and equipment 427,109 - - 427,109
Machinery and equipment 22,963 - - 22,963
  4,816,355 9,742 - 4,826,097
 
Accumulated
Amortization
in dollars
Opening
Balance
April 1, 2014
Amortization Disposals and
Write-Offs
Closing
Balance
October 31, 2014
Leasehold improvements 590,276 42,710 - 632,986
Informatics hardware 438,566 76,959 - 515,525
Informatics software 2,374,295 130,230 - 2,504,525
Furniture and equipment 280,910 20,253 - 301,163
Machinery and equipment 22,963 - - 22,963
  3,707,010 270,152 - 3,977,162
 
Net Book Value
in dollars
Opening
Balance
April 1, 2014
    Closing
Balance
October 31, 2014
Leasehold improvements 320,560     277,850
Informatics hardware 244,169     176,952
Informatics software 398,417     268,187
Furniture and equipment 146,199     125,946
Machinery and equipment -     -
  1,109,345     848,935

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 For the 7-month
period ended
October 31, 2014
For the 12-month
period ended
March 31, 2014
Accommodation 1,675,605 2,878,994
Employer’s contribution to the health and dental insurance plans 410,265 764,131
Legal services 2,412 6,736
Total 2,088,282 3,649,861

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 For the 7-month
period ended
October 31, 2014
For the 12-month
period ended
March 31, 2014
Expenses – Other government departments and agencies 1,191,402 2,467,693

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

10. Transfer of the transition payments for implementing salary payments in arrears

The Government of Canada implemented salary payments in arrears in 2014-15. As a result, a one-time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay processes. This change to the pay system had no impact on the expenses of the Board. However, it did result in the use of additional spending authorities by the Board. Prior to October 31, 2014, the transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Works and Government Services Canada, who is responsible for the administration of the Government pay system.

11. Transfer of assets and liabilities from an other government department

Effective April 1, 2013, the Board was transferred the powers and duties of the Canadian Artists and Producers Professional Relations Tribunal (CAPPRT) following its dissolution pursuant to Order-in-Council 2013-0337, including stewardship responsibility for the liabilities related to the CAPPRT. Accordingly, the Board was transferred net liabilities of $280,281 from the CAPPRT on April 1, 2013.

in dollars March 31, 2014
Assets
Accounts receivable – other government departments and agencies 61
Accounts receivable – external parties 1,072
Total assets transferred 1,133
 
Liabilities
Accounts payable – external parties 44,993
Accounts payable – other government departments and agencies 10,979
Employee future benefits 225,441
Total liabilities transferred 281,414
 
Adjustment to the departmental net financial position (280,281)

12. 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 3. 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:

  For the 7-monthperiod ended October 31, 2014 For the 12-month
period ended
March 31, 2014
in dollars Adjudicative and
Dispute Resolution
Program
Internal Services Total Total
Operating expenses
Salaries and employee benefits 4,874,360 1,391,399 6,265,759 11,292,864
Accommodation 1,307,334 368,271 1,675,605 2,878,994
Professional and special services 318,234 208,035 526,269 1,126,544
Travel 288,632 21,221 309,853 474,484
Amortization of tangible capital assets - 270,152 270,152 480,220
Equipment rentals 53,428 70,156 123,584 211,815
Communications 22,770 98,031 120,801 227,076
Materials and supplies 9,726 90,219 99,945 147,704
Repairs and maintenance 8,135 67,416 75,551 55,038
Equipment 2,752 55,124 57,876 106,966
Information 6,372 9,248 15,620 53,268
Other - - - 44
Total operating expenses 6,891,743 2,649,273 9,541,016 17,055,017
 
Revenues
Miscellaneous revenues - 5 5 201
Revenues earned on behalf of Government - (5) (5) (201)
Total revenues - - - -
Net cost of operations before government
funding and transfers
6,891,743 2,649,273 9,541,016 17,055,017

13. Comparative information

Comparative figures have been reclassified to conform to the current year's presentation.

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