Canadian Environmental Assessment Agency
Financial Statements

For the Year Ended March 31, 2010

(Unaudited)

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements of the Canadian Environmental Assessment Agency for the year ended March 31, 2010 and all information contained in this report rests with the Agency’s management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector.

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 fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Agency’s financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Agency'sDepartmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable; that assets are safeguarded; and that transactions are in accordance with the Financial Administration Act,are executed in accordance with prescribed regulations within parliamentary authorities, and are properly recorded to maintain accountability of government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff; by organizational arrangements that provide appropriate divisions of responsibility; and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the Agency.

The financial statements of the Agency have not been audited.

____________________________
Elaine Feldman
President

____________________________
Richard Gagné
Chief Financial Officer

Ottawa, Canada
July 30, 2010

Statement of Financial Position (Unaudited)
At March 31
(in dollars)

 20102009
 

Assets
   Financial assets
   Accounts receivable and advances (Note 4)1,966,631616,223
 

Total financial assets1,966,631616,223
   Non-financial assets
   Tangible capital assets (Note 5)204,918241,877
 

Total non-financial assets204,918241,877
 

Total2,171,549858,100

Liabilities
    Accounts payable and accrued liabilities (Note 6)2,726,0954,159,346
    Vacation pay and compensatory leave772,077788,519
    Cost sharing agreement- provincial / federal (Note 7)302,031500,000
    Employee severance benefits (Note 8)3,307,5783,296,829
 

Total liabilities7,107,7818,744,694
Equity of Canada(4,936,232)(7,886,594)
 

Total2,171,549858,100

Contingent liabilities (Note 9)

Contracted obligations (Note 10)

The accompanying notes and schedules form an integral part of these statements.

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

 20102009
 

 Environmental Assessment Support programEnvironmental Assesment Development programInternal ServicesTotal 
Transfer payments
   First Nations1,227,299001,227,299607,166
   Non-profit organizations208,266239,2760447,542828,237
   Other levels of government0295,5000295,500145,500
   Other countries and international organizations037,884037,88416,628
   Industry015,000015,00015,000
 




Total transfer payments1,435,565587,66002,023,2251,612,530

Operating Expenses
   Salaries and employee benefits13,421,9103,274,4676,160,40322,856,78020,488,544
   Professional and special services3,243,701451,4613,554,2727,249,4349,131,662
   Accommodation2,150,7442,441361,8122,514,9972,472,764
   Travel and relocation1,529,54860,503104,1831,694,2341,940,242
   Information374,4476,27697,866478,589251,632
   Furniture and equipment8,82316,445395,743421,011865,856
   Telecommunications109,30410142,164251,478266,393
   Utilities, materials and supplies57,2755,58886,081148,944148,305
   Postage39,105031,49470,59965,365
   Repairs and maintenance1,951058,85760,80870,601
   Amortization013,05023,90936,95927,009
   Other6911,7666123,06934,720
   Bad debt expenses0000291,993
 




Total operating expenses20,937,4993,832,00711,017,39635,786,90236,055,087
 




Total Expenses22,373,0644,419,66711,017,39637,810,12737,667,617

Revenues
   Environmental assessment and training services4,709,548004,709,5483,362,800
   Miscellaneous revenues001,1291,1292,490
 




Total Revenues4,709,54801,1294,710,6773,365,290
 




Net Cost of Operations17,663,5164,419,66711,016,26733,099,45034,302,327

The accompanying notes and schedules form an integral part of these statements.

Statement of Equity of Canada (Unaudited)
At March 31
(in dollars)

 20102009
 

Equity of Canada, beginning of year(7,886,594)(3,457,961)
   Net cost of operations(33,099,450)(34,302,327)
   Current year appropriations used (Note 3)30,359,62428,248,434
   Revenue not available for spending (Note 3)(1,501,039)773,577
   Change in net position in the Consolidated Revenue Fund (Note 3)2,981,628(2,872,994)
   Services received without charge (Note 11)4,209,5993,724,677
 

Equity of Canada, end of year(4,936,232)(7,886,594)

The accompanying notes and schedules form an integral part of these statements.

Statement of Cash Flow (Unaudited)
For the Year Ended March 31
(in dollars)

 20102009
 

Operating Activities
   Net cost of operations33,099,45034,302,327
   Non-cash items:
   Services provided without charge (Note 11)(4,209,599)(3,724,677)
   Amortization of tangible capital assets (Note 5)(36,959)(27,009)
   Variations in Statement of Financial Position:
   Increase (decrease) in accounts receivable and advances (Note 4)1,350,408(1,144,837)
   Decrease (increase) in liabilities1,636,913(3,308,987)
 

Cash used by Operating Activities31,840,21326,096,817

Capital Investment Activities
   Acquisition of tangible capital assets052,200
 

Cash used by capital investment activities052,200

Financing Activities
 

   Net cash provided by Government of Canada31,840,21326,149,017

The accompanying notes and schedules form an integral part of these statements.

Notes to the Financial Statements (Unaudited)
For the Year Ended March 31, 2009

1. Authority and Objectives

The Canadian Environmental Assessment Agency (the Agency) was established in 1995 under the Canadian Environmental Assessment Act. The Agency is mandated to provide high-quality federal environmental assessments that promote sustainable development. The Agency achieves this objective by:

  1. providing administrative and advisory support for environmental assessment review panels;
  2. promoting uniformity and harmonization of environmental assessment activities across Canada at all levels of government; and
  3. providing opportunities for meaningful public participation in the federal environmental assessment process.

The Agency has two core program activities, Environmental Assessment Support Program and Environmental Assessment Development Program, which serve as the basis for its mission. These core program activities are supported by Internal Services, which provides modern, timely and responsive services.

In addition, the Agency has obligations under the Canada-wide Accord on Environmental Harmonization and bilateral agreements with the provincial governments, as well as international agreements covering environmental assessments.

The Agency is listed in Schedule I.1 of the Financial Administration Act and reports to Parliament through the Minister of the Environment.

2. Summary of Significant Accounting Policies

The financial statements have been prepared in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector.

  1. Parliamentary Appropriations — The Agency is primarily financed by the Government of Canada through parliamentary appropriations. Appropriations provided to the Agency do not parallel financial reporting according to generally accepted accounting principles, since appropriations 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 appropriations from Parliament. Note 3 provides a high-level reconciliation between the bases of reporting. 
  2. Net Cash Provided by Government - The Agency operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Agency is deposited to the CRF and all cash disbursements made by the Agency 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 the Agency and other federal government departments.
  3. Change in net position in the Consolidated Revenue Fund is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non-respendable revenue recorded by the Agency. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.
  4. Revenues:
    • Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
    • Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
  5. Expenses - Expenses are recorded on an accrual basis:
    • Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement.
    • Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
    • Services provided without charge by other government departments are recorded as operating expenses at their estimated cost.
  6. Employee future benefits
    1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The Agency's contributions to the Plan are charged to expenses in the year incurred and represent the total Agency obligation to the Plan. Current legislation does not require the Agency to make contributions for any actuarial deficiencies of the Plan.
    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.
  7. Accounts receivables are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.
  8. 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.
  9. 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 foreign currencies are translated into Canadian dollars using the rate of exchange in effect on March 31.
  10. Tangible capital assets - All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the capital asset as follows:
    Asset classSub-asset classAmortization period
    Machinery and equipmentVideoconferencing equipment10 years
    Other equipment (including furniture)Furniture and fixtures10 years
    Informatics hardwareMultifunctional3 years
    Informatics softwareServer4 years
  11. Measurement uncertainty - The preparation of financial statements in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector requires management to make estimates and assumptions that could affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these financial statements, management believes the estimates and assumptions to be reasonable. The most significant estimated items are employee severance benefits, allowances for employee vacation and compensatory 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.

3. Parliamentary Appropriations

The Agency receives most of its funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Agency 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 appropriations used:

 20102009
 

 (in dollars)

Net cost of operations33,099,45034,302,327
Adjustments for items affecting net cost of operations but not affecting appropriations 
Add (Less):
   Services provided without charge (Note 11)(4,209,599)(3,724,677)
   Amortization of tangible capital assets(36,959)(27,009)
   Revenue not available for spending1,501,039(773,577)
   Vacation pay and compensatory leave16,442(181,933)
   Severance Pay(10,749)(1,106,904)
   Bad Debt expenses0(291,993)
 

 30,359,62428,196,234

Adjustment for items not affecting net cost of operations but affecting appropriations
 
Add (Less): Acquisitions of tangible capital asset052,200
 

Current year appropriations used30,359,62428,248,434

(b) Appropriations provided and used

 Appropriations Provided
 20102009
 

 (in dollars)

Vote 15 — Program expenditures32,369,45133,223,507
Statutory amounts3,410,9302,856,466
Less:
   Lapsed appropriations(5,420,757)(7,831,539)
 

Current year appropriations used30,359,62428,248,434

(c) Reconciliation of net cash provided by Government to current year appropriations used

 20102009
 

 (in dollars)

Net cash provided by Government31,840,21326,149,017
Revenue not available for spending1,501,039(773,577)
Change in net position in the Consolidated Revenue Fund
   Variation in accounts receivable and advances(1,350,408)1,144,837
   Variation in accounts payable and accrued liabilities(1,433,251)1,520,150
   Allowance for Doubtful Accounts (291,993)
   Specified purpose account(197,969)500,000
 

Current year appropriations used30,359,62428,248,434

4. Accounts Receivable and Advances

The following table presents details of accounts receivable and advances:

 20102009
 

 (in dollars)

Receivables from other federal government departments and agencies82,449212,682
Receivables from external parties2,173,375692,604
Employee advances2,8002,930
 

 2,258,624908,216
Less: Allowance for doubtful accounts(291,993)(291,993)
 

Total1,966,631616,223

5. Tangible Capital Assets

Tangible Capital Assets
Cost (in dollars)
Capital asset classOpening balanceAcquisitionsTransferDisposals and write-offsClosing balance
Machinery and equipment188,656018,1890206,845
Other equipment (including furniture)14,05900014,059
Informatics hardware18,1890(18,189)00
Informatics software52,20000052,200
Total273,104000273,104
Tangible Capital Assets (continued)
Accumulated amortization (in dollars)
Capital asset classOpening balanceAcquisitionsAmortizationDisposals and write-offsClosing balance
Machinery and equipment18,865028,566047,431
Other equipment (including furniture)5,62401,40607,030
Informatics hardware6,0630(6,063)00
Informatics software675013,050013,725
Total31,227036,959068,186
Tangible Capital Assets (continued)
Capital asset class2010 Net book value2009 Net book value
Machinery and equipment159,414169,791
Other equipment (including furniture)7,0298,435
Informatics hardware012,126
Informatics software38,47551,525
Total204,918241,877

Amortization expense for the year ended March 31, 2010 is $36,959 (as at March 31, 2009 $27,009)

6. Accounts Payable and Accrued Liabilities

The following table presents details of accounts payable and accrued liabilities:

 20102009
 

 (in dollars)

Payables to other federal government departments and agencies785,170717,640
Payables to external parties1,622,9202,070,989
 

 2,408,0902,788,629
   
Accrued salaries318,0051,370,717
 

Total2,726,0954,159,346

7. Cost sharing agreement- provincial / federal

Funding received comes from a cost sharing agreement with the Province of Newfoundland and Labrador. The amount of funding will be used exclusively to finance the Aboriginal Funding Envelope of the Participant Funding Program for the proposed Lower Churchill Hydroelectric Generation Project. The funds would be used entirely for the 2009–2010 to 2011–2012 fiscal years. If after completing the project, there is residual funding, the balance will be returned to the province.

 20102009
 

 (in dollars)

Opening balance500,0000
Amount received0500,000
Amount expended(197,969)0
 

Closing Balance302,031500,000

8. Employee Benefits

  1. Pension Benefits — The Agency'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 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 Agency contribute to the cost of the Plan. The 2009–2010 expense amounts to $2,462,561 ($2,061,871 in 2008–2009), which represents approximately 1.9 times (2.0 times in 2008–2009) the contributions by employees

    The Agency'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 Agency provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:
     20102009
     

     (in dollars)

    Accrued benefit obligation, beginning of year3,296,8292,189,925
    Expense for the year733,7131,210,632
    Benefits paid during the year(722,964)(103,728)
     

    Accrued benefit obligation, end of year3,307,5783,296,829

9. Contingent Liabilities - Claims and Litigation

In the normal course of its operations, the Agency becomes involved in various legal actions. 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 on the government's consolidated financial statements. At this time, the Agency has no estimated liability to accrue and no expense to record in the government’s consolidated financial statements.

10. Contractual Obligations

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

(in dollars)20112012201320142015Total
Transfer payments481,6370000481,637
Professional services286,48469,78068,85732,09215,586472,799
Operating leases174,4210000174,421
Total942,54269,78068,85732,09215,5861,128,857

11. Related Party Transactions

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

During the year the Agency received without charge from other departments, accommodation, legal fees and employer’s contribution to the health and dental insurance plans. These services without charge have been recognized in the Agency’s Statement of Operations as follows:

 20102009
 

 (in dollars)

Accommodation2,006,1521,933,114
Employer's contribution to the health and dental insurance plans1,520,9361,272,736
Legal services provided by the Department of Justice682,511518,827
 

Total4,209,5993,724,677

The Agency also obtains selected financial services, material management, informatics, and compensation and benefits services under a shared services agreement with Environment Canada.

In addition, the government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include 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 as an expense in the Agency's Statement of Operations.