Rescinded [2012-10-04] - Treasury Board Accounting Standard 1.2 – Departmental and Agency Financial Statements

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Department Name
Statement of Operations (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

	2011* Planned Results	2011	2010
Expenses
Benefit programs and other services	$ 795,668	$ 802,142	$ 743,256
Appeals	654,286	621,501	585,866
International issues	265,124	276,643	272,380
Internal Services	79,400	78,500	72,400
Total expenses	1,794,478	1,778,786	1,673,902
Revenues
Benefit programs and other services	37,800	40,390	25,022
Appeals	33,562	31,415	19,461
International issues	15,147	17,952	11,121
Total revenues	86,509	89,757	55,604
Net cost of operations	$ 1,707,969	$ 1,689,029	$ 1,618,298

Segmented information (note 16)

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

Explanatory Notes:

Department Name
Statement of Operations (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

	2011* Planned Results	2011	2010
Expenses
Benefit programs and other services	$ 795,668	$ 802,142	$ 743,256
Appeals	654,286	621,501	585,866
International issues	265,124	276,643	252,380
Internal Services	79,400	78,500	72,400
Total expenses	1,794,478	1,778,786	1,653,902
Revenues
Benefit programs and other services	37,800	40,390	25,022
Appeals	33,562	31,415	19,461
International issues	15,147	17,952	10,121
Total revenues	86,509	89,757	54,604
Net cost from continuing operations	$ 1,707,969	1,689,029	1,599,298
Transferred operations
Expenses		-	20,000
Revenue		-	(1,000)
Net cost of transferred operations		-	19,000
Net cost of operations		$ 1,689,029	$ 1,618,298

Segmented information (note 16)

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

Explanatory Notes:

Department Name
Statement of Equity of Canada (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

	2011	2010 Restated (Note 18)
Equity of Canada, beginning of year	$ 1,161,134	$ 1,158,730
Net cost of operations	(1,689,029)	(1,618,298)
Net cash provided by Government	1,551,760	1,497,512
Change in due from the Consolidated Revenue Fund	6,302	6,340
Services provided without charge by other government departments (note 15)	124,750	116,850
Transfer of assets and liabilities from(to) other government departments (note 17)*	(10,000)	-
Equity of Canada, end of year	$ 1,144,917	$ 1,161,134

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

Explanatory Notes:

Department Name
Statement of Cash Flows (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

	2011	2010
Operating activities
Net cost of operations	$ 1,689,029	$ 1,618,298
Non-cash items:
Amortization of tangible capital assets	(74,564)	(74,713)
Gain (Loss) on disposal of tangible capital assets	(6,384)	(3,472)
Services provided without charge by other government departments (note 15)	(124,750)	(116,850)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances	17,072	(8,960)
Increase (decrease) in loans receivable	(5,990)	7,000
Increase (decrease) in prepaid expenses	2,354	(569)
Increase (decrease) in Inventory	10,597	1,000
Decrease (increase) in accounts payable and accrued liabilities	(28,425)	(2,355)
Decrease (increase) in vacation pay and compensatory leave	(425)	(1,500)
Decrease (increase) in deferred revenue	(662)	63
Decrease (increase) in future employee benefits	(2,342)	(3,215)
Cash used in operating activities	1,475,510	1,414,727
Capital investing activities:
Acquisitions of tangible capital assets	76,906	123,925
Proceeds from disposal of tangible capital assets	(674)	(41,159)
Cash used in capital investing activities	76,232	82,766
Financing activities:
Lease payments for tangible capital assets	18	19
Cash used in financing activities	18	19
Net cash provided by Government of Canada	$ 1,551,760	$ 1,497,512

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

Explanatory Notes:

Department Name
Statement of Cash Flows (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

	2011	2010
Operating activities
Cash received from:
Services and fees	$ (59,248)	$ (44,063)
Cash paid for:
Transfer payments	2,985	2,426
Salaries and employee benefits	1,035,252	993,867
Professional and special services	399,895	375,155
Utilities, materials and supplies	54,993	54,892
Travel and communication	39,851	31,515
Other	1,782	935
Cash used in operating activities	1,475,510	1,414,727
Capital investing activities:
Acquisitions of tangible capital assets	76,906	123,925
Proceeds from disposal of tangible capital assets	(674)	(41,159)
Cash used in capital investing activities	76,232	82,766
Financing activities:
Lease payments for tangible capital assets	18	19
Cash used in investing and financing activities	18	19
Net cash provided by Government of Canada	$ 1,551,760	$ 1,497,512

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

Explanatory Notes:

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

1. Authority and Objectives

2. Summary of Significant Accounting Policies

These financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which 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 Department is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the department 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 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. (For departments including planned results in the Statement of Operations, the following should be added: The planned results amounts in the Statement of Operations are the amounts reported in the future-oriented financial statements included in the 2010-11 Report on Plans and Priorities.)
2. Consolidation – these consolidated financial statements include the accounts of the sub-entities that are under the control of the Department. The accounts of these sub-entities have been consolidated with those of the Department and all inter-organizational balances and transactions have been eliminated. (Entities that are consolidated in the department's financial statements should be listed in this note).
3. Net Cash Provided by Government – The Department operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the department is deposited to the CRF and all cash disbursements made by the Department 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.
4. 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 Department is entitled to draw from the CRF without further appropriations to discharge its liabilities.
5. Revenues:

   Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.

   Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.

   Funds that have been received are recorded as deferred revenue, provided the department has an obligation to other parties for the provision of goods, services or the use of assets in the future.

   Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

6. Expenses – Expenses are recorded on the accrual basis:

   Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.

   Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement, provided that the transfer is authorized and a reasonable estimate can be made.

   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, employer contributions to the health and dental insurance plans, legal services and workers' compensation are recorded as operating expenses at their estimated cost. (The department should adapt this note to its own situation)

7. Employee future benefits
   1. Pension benefits: Eligible employees participate in the Public Service Pension Plan (identify appropriate plan), a multiemployer pension plan administered by the Government. The Department's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require the Department to make contributions for any actuarial deficiencies of the Plan. (The department should adapt this note to its own situation)
   2. Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. 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.
8. Accounts and loans receivables are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.
9. Repayable contributions are contributions where the recipient is expected to repay the amount advanced. Depending on their nature, they are classified as either unconditionally repayable or conditionally repayable and are accounted for accordingly.
   1. Unconditionally repayable contributions are contributions that must be repaid without qualification. Normally, these contributions are provided with a low or no interest clause. Due to their concessionary nature, they are recorded on the Statement of Financial Position as loans at their estimated present value. A portion of the unamortized discount is recorded as revenue each year to reflect the change in the present value of the contributions outstanding. An estimated allowance for uncollectibility is recorded where appropriate.
   2. Conditionally repayable contributions are contributions that, all or part of which become repayable, if conditions specified in the contribution agreement come into effect. Accordingly, they are not recorded on the Statement of Financial Position until such time as the conditions specified in the agreement come into effect at which time, they are recorded as a receivable and a reduction in transfer payment expenses. An estimated allowance for uncollectibility is recorded where appropriate.
10. Contingent liabilities – Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense 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.
11. Environmental liabilities – Environmental liabilities reflect the estimated costs related to the management and remediation of environmentally contaminated sites. Based on management's best estimates, a liability is accrued and an expense recorded when the contamination occurs or when the Department becomes aware of the contamination and is obligated, or is likely to be obligated to incur such costs. If the likelihood of the Department's obligation to incur these costs is not determinable, or if an amount cannot be reasonably estimated, the costs are disclosed as contingent liabilities in the notes to the financial statements.
12. Inventory – Inventory consists of parts, material and supplies held for future program delivery and not intended for resale. Inventory is valued at cost using the average cost method (to be modified as applicable). If there is no longer any service potential, inventory is valued at the lower of cost or net realizable value. (This note should be adapted for departments that also have inventories held for resale as they should be recorded at lower of cost or net realizable value).
13. Foreign currency transactions – Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars using the rate of exchange in effect at year-end. Gains and losses resulting from foreign currency transactions are included in – specify the line – on the statement of operations with the exception of the foreign exchange gain or loss relating to a long-term foreign currency denominated monetary item which is recognized in the financial statements, deferred and amortized to revenue / expense over the remaining life of the monetary item. (This note is not required where department does not have significant foreign exchange transactions).

14. Tangible capital assets – All tangible capital assets and leasehold improvements having an initial cost of $10,000 (If the department has a different threshold, then this amount should be reflected) or more are recorded at their acquisition cost. The department 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: (This portion of the note would be amended to reflect the amortization methodology, rates and classes of assets being used in the department. Classes should match those listed in note 7).

    Asset Class	Amortization Period
    Buildings	(Number) years
    Works and infrastructure	(Number) years
    Machinery and equipment	(Number) years
    Vehicles	(Number) years
    Computer Hardware	(Number) years
    Computer Software	(Number) years
    Leasehold improvements	Lesser of the remaining term of lease or useful life of the improvement
    Leased tangible capital assets	Over term of lease/useful life

    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.

15. 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 contingent liabilities, environmental liabilities, the liability for employee severance benefits and the useful life of tangible capital assets (list as applicable). 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. (This note should be enhanced if a department has a particular significant measurement uncertainty).

Explanatory Notes:

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

3. Parliamentary Authorities

The Department 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 Department 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:

1. Reconciliation of net cost of operations to current year authorities used

   	2011	2010
   	(in thousands of dollars)
   Net cost of operations	$ 1,689,029	$ 1,618,298
   Adjustments for items affecting net cost of operations but not affecting authorities:
   Amortization of tangible capital assets	(74,564)	(74,713)
   Gain (loss) on disposal of tangible capital assets	(6,384)	(3,472)
   Services provided without charge by other government departments	(124,750)	(116,850)
   Increase in vacation pay and compensatory leave	(425)	(1,500)
   Increase in employee future benefits	(2,342)	(3,215)
   Increase in accrued liabilities not charged to authorities (note 8)	(5,713)	(4,912)
   Refund of prior years' expenditures	2,000	3,000
   Revenue not available for spending	22,500	19,251
   	(189,678)	(182,411)
   Adjustments for items not affecting net cost of operations but affecting authorities:
   Acquisitions of tangible capital assets	76,906	123,925
   Proceeds from disposal of tangible capital assets	(674)	(41,159)
   Decrease in lease obligations for tangible capital assets	18	19
   Decrease in loan receivables	(5,990)	7,000
   Increase in inventory	10,597	1,000
   Increase in prepaid expenses	2,354	(569)
   	83,211	90,216
   Current year authorities used	$ 1,582,562	$ 1,526,103

2. Authorities provided and used

   	2011	2010
   	(in thousands of dollars)
   Authorities Provided:
   Vote xx – Operating expenditures	$ 1,140,976	$ 1,089,838
   Vote xx - Capital expenditures	130,765	126,865
   Statutory amounts	364,956	361,517
   Less:
   Authorities available for future years	(50,000)	(49,000)
   Lapsed: Operating	(4,135)	(3,117)
   Current year authorities used	$ 1,582,562	$ 1,526,103

   Explanatory Notes:

   Note (b) should be modified to include only those authorities applicable to the department.

   The amount to include is the total amount for each type of authorities. There is no need to break the amounts into more detail.

   Amounts of authorities provided and used must agree with the amounts shown as Available for Use and Authorities Used as reflected in the Source and Disposition of Authorities in Volume II of the Public Accounts.

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

4. Accounts receivable and advances

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

	2011	2010
	(in thousands of dollars)
Receivables from other government departments and agencies	$ 25,697	$ 8,872
Receivables from external parties	5,632	6,941
Employee advances	345	322
	31,674	16,135
Allowance for doubtful accounts on receivables from external parties	(514)	(2,047)
	$ 31,160	$ 14,088

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

5. Loans receivable

The following table presents details of the Department's loans and repayable contributions receivable balances:

	2011	2010
	(in thousands of dollars)
Repayable contributions	$ 4,450	$ 10,640
Loans receivable	2,900	3,000
	7,350	13,640
Less: Allowance for uncollectibility	(2,500)	(2,500)
Less: Unamortized discount	(1,400)	(1,700)
	$ 3,450	$ 9,440

1. Repayable contributions

   Repayable contributions relate to contributions made to outside parties which are repayable based on the recipient having met certain conditions. An allowance of $2,500,000 ($2,500,000 in 2009-2010) relating to these loans has been recorded.

2. Loans receivable from ______

   The loans receivable portfolio consists of 12 non-interest bearing loans issued in the years from 2001 to 2007, with prescribed annual repayment terms. The loans are recorded at their discounted net present values using market interest rates at the time of the loans.

   Explanatory Notes:

   This note is suggested for organizations that have repayable contributions or other loans receivable. It must be changed to reflect the department's particular operating environment.

   For departments with significant repayable contributions and other loans receivable, consult the disclosure requirements in PS 3050.54 and .56 of the Public Sector Accounting (PSA) handbook and CICA 3025, to determine the extent of information to disclose.

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

6. Inventory

The following table presents details of the inventory, measured at cost using the average cost method.

	2011	2010
	(in thousands of dollars)
Spare parts	$ 16,346	$ 5,987
Materials	3,521	3,978
Other	1,929	1,234
	$ 21,796	$ 11,199

The cost of consumed inventory recognized as an expense in the Statement of Operations is $44,212,000 in 2010-11 ($38,700,000 in 2009-10)

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

7. Tangible capital assets

	Cost				Accumulated Amortization				Net book value
Capital asset class	Opening balance	Acquisitions	Disposals and write-offs	Closing balance	Opening balance	Amortization	Disposals and write-offs	Closing balance	2011	2010
Land	$12,989	$-	$1,000	$11,989	$-	$-	$-	$-	11,989	12,989
Buildings	1,324,284	44,635	15,809	1,353,110	425,488	40,465	6,809	459,144	893,966	898,796
Works and infrastructure	370,059	13,822	-	383,881	202,792	17,267	-	220,059	163,822	167,267
Machinery and equipment	169,327	16,121	19,276	166,172	117,194	12,735	12,519	117,410	48,762	52,133
Vehicles	35,641	7,076	3,900	38,817	23,536	4,004	3,599	23,941	14,876	12,105
Leasehold improvements	1,255	67	-	1,322	95	82	-	177	1,145	1,160
Leased tangible capital assets	111	-	-	111	36	11	-	47	64	75
Computer hardware	-	-	-	-	-	-	-	-	-	-
Computer software	-	-	-	-	-	-	-	-	-	-
Assets under construction	112,988	53,677	58,492	108,173	-	-	-	-	108,173	112,988
Total	$ 2,026,654	$ 135,398	$ 98,477	$ 2,063,575	$ 769,141	$ 74,564	$ 22,927	$ 820,778	$ 1,242,797	$ 1,257,513

Disposals of assets under construction represent assets that were put into use in the year and have been transferred to the other capital asset classes as applicable.

Effective April 1, 2010, the Department transferred land and buildings with a net book value of $10,000,000 to the ____________________ (see note 17).

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

8. Accounts payable and accrued liabilities

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

	2011	2010
	(in thousands of dollars)
Accounts payable to other government departments and agencies	$ 32,456	$ 27,894
Accounts payable to external parties	144,266	126,116
	176,722	154,010
Accrued liabilities	13,719	8,006
	$ 190,441	$ 162,016

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

9. Deferred revenue

Deferred revenue represents the balance at year-end of unearned revenues stemming from amounts received from external parties which are restricted to fund the expenditures related to specific research projects and amounts received for fees prior to services being performed. Revenue is recognized in the period that these expenditures are incurred or the service is performed. Details of the transactions related to this account are as follows:

	2011	2010
	(in thousands of dollars)
Opening balance	$ 10,078	$ 10,068
Amounts received	1,344	1,140
Revenue recognized	(682)	(1,130)
Closing balance	$ 10,740	$ 10,078

Explanatory Notes:

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

10. Lease obligation for tangible capital assets

The Department has entered into agreements to lease certain equipment under capital leases with a cost of $111,000 and accumulated amortization of $47,000 as at March 31, 2011 ($111,000 and $36,000 respectively as at March 31, 2010). The obligations related to the upcoming years include the following:

	2011	2010
	(in thousands of dollars)
2011	$ -	$ 19
2012	19	19
2013	19	19
2014	19	19
2015 and thereafter	103	103
Total future minimum lease payments	160	179
Less: imputed interest (2.3% to 6.0%)	36	37
Balance of obligations under leased tangible capital assets	$ 124	$ 142

Explanatory Notes:

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

11. Employee future benefits

1. Pension benefits

   The Department's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent 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 2010-11 expense amounts to $XXX (2009-10 - $_______), which represents approximately ____ times (_____ times in 2009-10) the contributions by employees.

   The Department'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 Department 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:

   	2011	2010
   	(in thousands of dollars)
   Accrued benefit obligation, beginning of year	$ 61,454	$ 56,318
   Transferred to other government department effective April 1, 2010 (note 17)	(4,800)	-
   	56,654	56,318
   Expense for the year	9,310	7,306
   Benefits paid during the year	(2,168)	(2,170)
   Accrued benefit obligation, end of year	$ 63,796	$ 61,454

Explanatory Notes:

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

12. Restricted Equity of Canada

A portion of the department's equity is restricted to be used for a specific purpose. Related revenues and expenses are included in the Statement of Operations.

The _________account was established pursuant to the ___________ Act and related regulations to record fines and penalties levied by courts under the Act. The balance of the account is to be used for (state purpose) ________. The balance of the account at the end of the year is included in Equity of Canada. Activity in the account is as follows:

	2011	2010
	(in thousands of dollars)
Account's name - Restricted
Balance, beginning of year - Restricted	$ 15,576	$ 15,987
Revenues	1,291	1,576
Expenses	(2,493)	(1,987)
Balance, end of year - Restricted	14,374	15,576
Unrestricted Equity of Canada, end of year	1,130,543	1,145,558
Total Equity of Canada, end of year	$ 1,144,917	$ 1,161,134

Explanatory Notes:

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

13. Contingent liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown. They are grouped into two categories (if applicable) as follows:

1. Contaminated sites

   Liabilities are accrued to record the estimated costs related to the management and remediation of contaminated sites where the department is obligated or likely to be obligated to incur such costs. The Department has identified approximately 50 sites (49 sites in 2009-2010) where such action is possible and for which a liability of $10,300,000 ($8,000,000 in 2009-2010) has been recorded in accrued liabilities. The Department has estimated additional clean-up costs of $13,000,000 ($14,000,000 in 2009-2010) that are not accrued, as these are not considered likely to be incurred at this time. The Department's ongoing efforts to assess contaminated sites may result in additional environmental liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. These liabilities will be accrued by the department in the year in which they become likely and are reasonably estimable.

2. Claims and litigation

   Claims have been made against the Department in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. Based on Department's assessment, legal proceedings for claims estimated at $20,000,000 ($14,000,000 in 2009-2010) were pending at March 31, 2011. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the financial statements.

Explanatory Notes:

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

14. Contractual Obligations

The nature of the Department's activities can result in some large multi-year contracts and obligations whereby the department 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:

	2012	2013	2014	2015	2016 and thereafter	Total
Transfer payments	$ 3,000	2,500	1,000	-	-	$ 6,500
Operating leases	1,000	1,000	1,000	900	100	4,000
Total	$ 4,000	3,500	2,000	900	100	$ 10,500

Explanatory Notes:

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

15. Related Party Transactions

The department is related as a result of common ownership to all Government departments, agencies, and Crown Corporations. The Department enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the Department has an agreement with Department (_________) related to the provision of finance and administration services. During the year, the Department received (and provided if applicable) 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 Department received services without charge from certain common service organizations, related to accommodation, legal services, the employer's contribution to the health and dental insurance plans and workers' compensation coverage. These services provided without charge have been recorded in the department's Statement of Operations as follows:

   	2011	2010
   	(in thousands of dollars)
   Employer's contribution to the health and dental insurance plans	$ 75,000	$ 70,000
   Accommodation	41,700	40,500
   Legal services	6,850	5,250
   Workers' Compensation	1,200	1,100
   Total	$ 124,750	$ 116,850

   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 and audit services provided by the Office of the Auditor General are not included in the Department's Statement of Operations.

2. Common services provided without charge to other government departments

   During the year, the Department provided services without charge to other government departments, related to the provision of _______________ services, in the amount of $17,000,000 ($15,000,000 in 2009-2010).

3. Administration of programs on behalf of other government departments

   Under a memorandum of understanding signed with (name of other Department) on April 1, 2005, the Department administers program XXX in Northern Canadian communities. During the year, the Department incurred expenses of $_______________ ($________ in 2009-2010) on behalf of (name of other Department). These expenses are reflected in the financial statements of (name of other Department) and are not recorded in these financial statements.

4. Other transactions with related parties

   	2011	2010
   	(in thousands of dollars)
   Accounts receivable from other government departments and agencies	$ 25,697	$ 8,872
   Accounts payable to other government departments and agencies	32,456	27,894
   Expenses - Other Government departments and agencies	12,560	11,480
   Revenues - Other Government departments and agencies	2,388	2,277

   Explanatory Notes:

   Note (b) is only required if a department (e.g. PWGSC, TBS, Justice Canada and HRSDC) provided services without charge to and recorded by the other government departments.

   Note (c) is only required for departments which administer significant amounts of funds on behalf of other government departments.

   Note (d): If the amount of receivables and payables with related parties is presented elsewhere in the financial statements, there is no need to present the information in this note.

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

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

16. Segmented information

Presentation by segment is based on the Department's program activity 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 program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

	Benefit programs and other services	Appeals	International Issues	Internal services	Intersegment and unallocated	2011 Total	2010 Total
Transfer payments
Industry	$ 2,813	-	-	-	-	$ 2,813	$ 2,850
Individuals	255	-	-	-	-	255	58
Total transfer payments	3,068	-	-	-	-	3,068	2,908
Operating expenses
Salaries and employee benefits	513,158	399,123	162,450	65,620	-	1,140,351	1,049,122
Professional and special services	187,573	145,890	80,116	3,250	-	416,829	395,995
Amortization of tangible capital assets	33,554	26,097	13,913	1,000	-	74,564	74,713
Utilities, materials and supplies	19,926	15,498	6,296	2,560	-	44,280	48,460
Accommodation	19,575	15,225	6,170	2,530	-	43,500	42,250
Travel	15,996	12,441	5,653	1,456	-	35,546	21,448
Communication	5,762	4,481	1,729	832	-	12,804	13,805
Other	3,530	2,746	316	1,252	-	7,844	5,201
Total operating expenses	799,074	621,501	276,643	78,500	-	1,775,718	1,650,994
Total expenses	802,142	621,501	276,643	78,500	-	1,778,786	1,653,902
Revenues
Regulatory fees	31,129	30,933	17,677	-	-	79,739	47,044
Miscellaneous revenues	9,261	482	275	-	-	10,018	7,560
Total revenues	40,390	31,415	17,952	-	-	89,757	54,604
Net cost from continuing operations	$ 761,752	$ 590,086	$ 258,691	$ 78,500	-	$ 1,689,029	$ 1,599,298

Explanatory Notes:

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

17. Transfers from/ to other government departments

Effective April 1, 2010, the Department transferred responsibility for the (name of program/business line etc.) to the (name of other department) in accordance with _____ (e.g. Act of Parliament, Order-in-Council, TBS Directive etc.), including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, the Department transferred the following assets and liabilities related to the (name of program/business line etc.) to (name of other department) on April 1, 2010:

Assets

Accounts receivable and advances	$ 8,200
Tangible capital assets (net book value) (Note 7)	10,000
	18,200

In addition, the 2010 comparative figures have been reclassified on the Statement of Operations to present the revenues and expenses of the transferred operations

Explanatory Notes:

Assets:

Advances receivable	$ 8,200
Tangible capital assets (net book value) (Note 7)	10,000
	18,200

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

18. Adoption of new accounting policies

During the year, the Department adopted the revised Treasury Board accounting policy TBAS 1.2: Departmental and Agency Financial Statements which is effective for the Department for the 2010-11 fiscal year. The major change in the accounting policies of the Department required by the adoption of the revised TBAS 1.2 is the recording of amounts due from the Consolidated Revenue Fund as an asset on the Statement of Financial Position.

The adoption of the new Treasury Board accounting policies have been accounted for retroactively with the following impact on the comparatives for 2009-10:

	2010 As previously stated	Effect of changes	2010 Restated
	(in thousands of dollars)
Statement of Financial Position:
Assets	$ 1,292,265	$ 150,000	$ 1,442,265
Equity of Canada	1,011,134	150,000	1,161,134

Explanatory Notes:

Department Name
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

19. Comparative information

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

Explanatory Notes: