Site Menu2017–18 Departmental Results Report
Financial Statements
Office of the Chief Electoral Officer
For the year ended March 31, 2018
Statement of Management Responsibility Including Internal Control Over Financial Reporting
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2018, and all information contained in these financial statements rests with the management of the Office of the Chief Electoral Officer (the Office). 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 judgements 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 Office's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Office's Departmental Results 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 regulations, the Canada Elections Act, the Referendum Act and the Electoral Boundaries Readjustment Act.
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 Office; and through 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 on-going process to identify key risks, to assess effectiveness of associated key controls and to make any necessary adjustments. A risk-based assessment of the system of ICFR for the year ended March 31, 2018, was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.
Management is supported and assisted by a program of internal audit services. The Office also has an independent Audit Committee. The responsibilities of the committee are to provide the Chief Electoral Officer with independent and objective advice, guidance and deliberation on the adequacy and effectiveness of the Office's governance, risk management, control, audit and reporting practices.
The Auditor General of Canada, the independent auditor for the Government of Canada, has expressed an opinion on the fair presentation of the financial statements of the Office which does not include an audit opinion on the annual assessment of the effectiveness of the Office's internal controls over financial reporting.
(Original signed by)
Stéphane Perrault
Chief Electoral Officer of Canada
Gatineau, Canada
August 29, 2018
(Original signed by)
Hughes St-Pierre, CPA, CMA
Chief Financial Officer
Independent auditor's report
To the Speaker of the House of Commons
Report on the Financial Statements
I have audited the accompanying financial statements of the Office of the Chief Electoral Officer, which comprise the statement of financial position as at 31 March 2018, and the statement of operations and net financial position, statement of change in net debt and statement of cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion
In my opinion, the financial statements present fairly, in all material respects, the financial position of the Office of the Chief Electoral Officer as at 31 March 2018, and the results of its operations, changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.
Report on Other Legal and Regulatory Requirements
In my opinion, the transactions of the Office of the Chief Electoral Officer that have come to my notice during my audit of the financial statements have, in all significant respects, been in accordance with the Financial Administration Act and regulations, the Canada Elections Act, the Referendum Act and the Electoral Boundaries Readjustment Act.
(Original signed by)
Riowen Yves Abgrall, CPA, CA
Principal for the Auditor General of Canada
29 August 2018
Ottawa, Canada
| 2018 | 2017 | |
|---|---|---|
| Liabilities | ||
| Due to the Consolidated Revenue Fund | $ 2,238 | $ 1,474 |
| Accounts payable and accrued liabilities (Note 5) | 13,378 | 10,652 |
| Accrued employee salaries and benefits | 4,515 | 4,357 |
| Provision for vacation leave and other benefits | 2,845 | 2,475 |
| Lease obligation for tangible capital assets (Note 6) | 234 | 41 |
| Deposits from political candidates (Note 7) | 106 | 153 |
| Employee severance benefits (Note 8b) | 1,605 | 1,681 |
| Total net liabilities | 24,921 | 20,833 |
| Financial assets | ||
| Due from the Consolidated Revenue Fund | 17,998 | 15,146 |
| Accounts receivable and advances (Note 9) | 2,825 | 5,748 |
| Total gross financial assets | 20,823 | 20,894 |
| Financial assets held on behalf of government | ||
| Accounts receivable – from external parties (Note 9) | (91) | (62) |
| Total financial assets held on behalf of government | (91) | (62) |
| Total net financial assets | 20,732 | 20,832 |
| Net debt | (4,189) | (1) |
| Non-financial assets | ||
| Prepaid expenses | 1,213 | 1,505 |
| Consumable supplies | 4,316 | 3,870 |
| Tangible capital assets (Note 10) | 25,366 | 20,982 |
| Total non-financial assets | 30,895 | 26,357 |
| Net financial position | $26,706 | $26,356 |
Contractual obligations (Note 11) and Contingent liabilities (Note 12)
The accompanying notes form an integral part of these financial statements.
Approved by:
(Original signed by)
Stéphane Perrault
Chief Electoral Officer of Canada
Gatineau, Canada
August 29, 2018
(Original signed by)
Hughes St-Pierre, CPA, CMA
Chief Financial Officer
| 2018 Planned Results (Note 2a) |
2018 | 2017 | |
|---|---|---|---|
| Expenses | |||
| Electoral Operations | $51,344 | $62,885 | $46,372 |
| Regulation of Electoral Activities | 11,486 | 14,907 | 17,549 |
| Electoral Engagement | 9,742 | 11,390 | 9,237 |
| Internal Services | 44,172 | 49,081 | 42,717 |
| Total expenses | 116,744 | 138,263 | 115,875 |
| Revenues | |||
| Excess contributions and donations | 158 | 203 | 313 |
| Fines and court awards | - | 3 | 2 |
| Miscellaneous revenues | 25 | 25 | 18 |
| Revenues earned on behalf of government | (183) | (231) | (333) |
| Total revenues | - | - | - |
| Net cost of operations before government funding and transfers | 116,744 | 138,263 | 115,875 |
| Government funding and transfers | |||
| Net cash provided by government | 112,208 | 125,522 | 154,844 |
| Change in Due to the Consolidated Revenue Fund | - | (764) | 287 |
| Change in Due from the Consolidated Revenue Fund | (10,610) | 2,852 | (55,143) |
| Services provided without charge by other government departments (Note 13) | 10,090 | 11,007 | 10,210 |
| Other transfers of assets and liabilities (to) / from other government departments | - | (4) | - |
| Net cost (revenues) of operations after government funding and transfers | 5,056 | (350) | 5,677 |
| Net financial position – Beginning of year | 26,356 | 26,356 | 32,033 |
| Net financial position – End of year | $21,300 | $26,706 | $26,356 |
Segmented information (Note 14)
The accompanying notes form an integral part of these financial statements.
| 2018 Planned Results (Note 2a) |
2018 | 2017 | |
|---|---|---|---|
| Net cost (revenues) of operations after government funding and transfers | $5,056 | $(350) | $5,677 |
| Change due to tangible capital assets | |||
| Acquisition of tangible capital assets | 8,908 | 8,765 | 4,715 |
| Additions of capital leases | - | 264 | - |
| Amortization of tangible capital assets | (4,145) | (4,358) | (5,089) |
| Loss on disposal of tangible capital assets | - | (89) | (420) |
| Write off of tangible capital assets | - | (198) | - |
| Total change due to tangible capital assets | 4,763 | 4,384 | (794) |
| Change due to consumable supplies | |||
| Acquisition of consumable supplies | 300 | 773 | 1,012 |
| Usage of consumable supplies | (68) | (327) | (305) |
| Total change due to consumable supplies | 232 | 446 | 707 |
| Change due to prepaid expenses | |||
| Additions to prepaid | 2,489 | 1,894 | 2,431 |
| Usage of prepaid | (2,282) | (2,186) | (2,208) |
| Total change due to prepaid expenses | 207 | (292) | 223 |
| Net increase in net debt | 10,258 | 4,188 | 5,813 |
| Net financial assets (net debt) – Beginning of year | (1) | (1) | 5,812 |
| Net debt – End of year | $(10,259) | $(4,189) | $(1) |
The accompanying notes form an integral part of these financial statements.
| 2018 | 2017 | |
|---|---|---|
| OPERATING ACTIVITIES | ||
| Net cost of operations before government funding and transfers | $138,263 | $115,875 |
| Non-cash items: | ||
| Amortization of tangible capital assets | (4,358) | (5,089) |
| Loss on disposal of tangible capital assets | (89) | (420) |
| Write off of tangible capital assets | (198) | - |
| Services provided without charge by other government departments (Note 13) | (11,007) | (10,210) |
| Write off of lease obligation for tangible capital assets | 4 | - |
| Other transfers of assets and liabilities (to)/ from other government departments | 4 | - |
| Variations in Statement of Financial Position: | ||
| Decrease in accounts receivable and advances | (2,952) | (6,587) |
| (Decrease) increase in prepaid expenses | (292) | 223 |
| Increase in consumable supplies | 446 | 707 |
| Decrease in deposits from political candidates | 47 | 597 |
| Decrease in employee severance benefits | 76 | 263 |
| (Increase) decrease in provision for vacation leave and other benefits | (370) | 162 |
| Increase in accrued employee salaries and benefits | (82) | (401) |
| (Increase) decrease in accounts payable and accrued liabilities | (2,380) | 55,572 |
| Cash used in operating activities | 117,112 | 150,692 |
| CAPITAL INVESTMENT ACTIVITIES | ||
| Acquisition of tangible capital assets (excluding capital leases) | 8,343 | 4,074 |
| Cash used in capital investing activities | 8,343 | 4,074 |
| FINANCING ACTIVITIES | ||
| Payment of lease obligations for tangible capital assets | 67 | 78 |
| Cash used in financing activities | 67 | 78 |
| Net cash provided by Government of Canada | $125,522 | $154,844 |
The accompanying notes form an integral part of these financial statements.
Office of the Chief Electoral Officer
Notes to Financial Statements
For the year ended March 31, 2017
1. Authority and Objectives
The Office of the Chief Electoral Officer (the Office), commonly known as Elections Canada, is headed by the Chief Electoral Officer who is appointed by resolution of the House of Commons and reports directly to Parliament. The Chief Electoral Officer is completely independent of the federal government and political parties. The Office is named in Schedule I.1 of the Financial Administration Act.
The Office's objectives are to be prepared to conduct a federal general election, by-election or referendum; to administer the political financing provisions of the Canada Elections Act; to monitor compliance with electoral legislation; to conduct public information campaigns on voter registration, voting and becoming a candidate; to conduct education programs for students on the electoral process; to provide support to the independent commissions in charge of adjusting the boundaries of federal electoral districts following each decennial census; to carry out studies on alternative voting methods and, with the approval of parliamentarians, test alternative voting processes for future use during electoral events; and to provide assistance and co-operation in electoral matters to electoral agencies in other countries or to international organizations.
The Office is funded by an annual appropriation (which provides for the salaries of permanent, full-time staff) and the statutory authorities contained in the Canada Elections Act, the Referendum Act and the Electoral Boundaries Readjustment Act. These statutory authorities provide for all other expenditures, including the costs of electoral events, maintenance of the National Register of Electors, transfer payments to eligible political entities, redistribution of electoral boundaries and continuing public education programs.
The Office's Program Alignment Architecture (PAA) contains three programs and Internal Services. The programs are:
Electoral Operations
This program allows Elections Canada to deliver fair and efficient electoral events whenever they may be required so that Canadians are able to exercise their democratic right to vote during a federal general election, by-election or referendum by providing an accessible and constantly improved electoral process responsive to the needs of electors.
Regulation of Electoral Activities
This program provides Canadians with an electoral process that is fair, transparent and in compliance with the Canada Elections Act. Within this program, Elections Canada is responsible for administering the political financing provisions of the Act. This includes compliance monitoring, disclosure and reporting of financial activities.
Electoral Engagement
This program promotes and sustains the Canadian electoral process. It provides Canadians with electoral education and information activities so that they can make informed decisions about their engagement in the electoral process. It also aims to improve the electoral framework by consulting and sharing electoral practices with other stakeholders.
Internal Services
Internal services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Material Services; and Acquisitions 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:
- Parliamentary authorities The Office operates under two funding authorities: an annual appropriation and statutory authorities. Financial reporting of authorities provided to the Office 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 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 Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 20172018 Departmental Plan.
The planned results amounts in the government funding and transfers section of the Statement of Operations and Net Financial Position and in the Statement of Change in Net Debt were prepared for internal management purposes and have not been previously published.
Liquidity risk is the risk that the Office will encounter difficulty in meeting its obligations associated with financial liabilities. The Office's objective for managing liquidity risk is to manage operations and cash expenditures within the appropriation authorized by Parliament.
Each year the Office presents information on planned expenditures to Parliament through the tabling of Estimates publications. These estimates result in the introduction of supply bills (which, once passed into legislation, become appropriation acts) in accordance with the reporting cycle for government expenditures. The Office exercises expenditure initiation processes such that unencumbered balances of budget allotments and appropriations are monitored and reported on a regular basis to help ensure sufficient authority remains for the entire period and appropriations are not exceeded.
Consistent with Section 32 of the Financial Administration Act, the Office's policy to manage liquidity risk is that no contract or other arrangement providing for a payment shall be entered into with respect to any program for which there is an appropriation by Parliament or an item included in estimates then before the House of Commons to which the payment will be charged unless there is a sufficient unencumbered balance available out of the appropriation or item to discharge any debt that, under the contract or other arrangement, will be incurred during the fiscal year in which the contract or other arrangement is entered into.
The Office's risk exposure and its objectives, policies and processes to manage and measure this risk did not change significantly from the prior year. - Net cash provided by government The Office operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Office is deposited to the CRF and all cash disbursements made by the Office 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.
- Due from or to the Consolidated Revenue Fund Amounts due from or 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 amount of cash that the Office is entitled to draw from the CRF without further appropriations in order to discharge its liabilities. This amount is not considered to be a financial instrument.
- Revenues – Revenues from regulatory fees are recognized 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 Office's liabilities. While the Chief Electoral Officer 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 as a reduction of the entity's gross revenues. - Expenses Expenses are recorded on the accrual basis.
Transfer payments, such as reimbursement to political parties and candidates, are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established in the political financing provisions of the Canada Elections Act. Transfer payments that become repayable as a result of conditions specified in the Act that have come into being are recorded as a reduction to transfer payment expense and as a receivable. This process may take place over several fiscal years, mainly due to the timing of an election, the statutory reporting deadlines of election returns from political entities and the conduct of the review by Elections Canada.
Vacation pay and other benefits are accrued as the benefits are earned by employees under their respective terms of employment. - Services provided without charge Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans, audit services and worker's compensation coverage are recorded as operating expenses, at their carrying value, in the Statement of Operations and Net Financial Position.
- Employee future benefits
- Pension benefits Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government of Canada. The Office's contributions to the Plan are charged to expenses in the year incurred and represent the total of the Office's obligation to the Plan. The Office'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 The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
- Accounts receivable Receivables are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Office is not exposed to significant credit risk. The Office provides services to other government departments and agencies and to external parties in the normal course of business. Accounts receivables are due on demand. The accounts receivables due from other government departments and agencies have a minimal potential risk of loss. The maximum exposure the Office has to credit risk is equal to the carrying value of its accounts receivable. - Contingent liabilities Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. If the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, a provision is accrued and an expense recorded to other expenses. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.
- Consumable supplies Consumable supplies consist mainly of forms and publications used to administer election events and documents distributed to political entities. These supplies are recorded at weighted average cost. The cost is charged to operations in the period in which the items are consumed. If they no longer have service potential, they are valued at the lower of cost or net realizable value.
- Tangible capital assets Tangible capital assets are recorded at historical cost less accumulated amortization. The Office records as tangible capital assets all expenses providing multi-year benefits and leasehold improvements having an initial cost of $5,000 or more. Similar items less than $5,000 are expensed in the Statement of Operations and Net Financial Position. The Office does not capitalize intangibles. Capital assets acquired for software under development are amortized once that software is put into production.
Amortization is calculated on a straight-line basis over the estimated useful lives of the tangible capital assets as follows:
Estimated useful lives of the tangible capital assets Asset Class Useful Life Office equipment 3 to 10 years Informatics equipment 3 years Software 3 to 5 years Furniture and fixtures 10 years Vehicles 5 years Motorized equipment 10 years Leasehold improvements and capital leases Lesser of the remaining term of the
lease or estimated useful life - Measurement uncertainty The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31.
The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the Office's best estimates of the related amount at the end of the reporting period. 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, 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. - Related party transactions Related party transactions, other than inter-entity, are recorded at the exchange amount.
Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following;- Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
- Certain services received on a without charge basis are recorded for financial statement purposes at the carrying amount.
3. Adoption of new accounting standards
The Public Sector Accounting Board (PSAB) issued five new accounting standards effective for fiscal years beginning on or after 1 April 2017. The new accounting standards are Related Party Disclosures (PS2200), Contingent Assets (PS3320), Assets (PS3210), Contractual Rights (PS3380) and Inter-entity Transactions (PS3420). The adoption of these standards only impacted note disclosure and did not result in any significant changes other than the creation of note 2m) to describe accounting policy for related party transactions and additional disclosures in the related party transactions note 13.
4. Parliamentary Authorities
The Office receives most of its funding through annual parliamentary authorities and the statutory authorities contained in the electoral legislation. Items recognized in the Statement of Operations and 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 Office 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:
-
Reconciliation of net cost of operations to current year authorities used
(in thousands of dollars)
2018 2017 Net cost of operations before government funding and transfers $138,263 $115,875 Adjustments for items affecting net cost of operations but not affecting authorities Add (less): Amortization of tangible capital assets (4,358) (5,089) Write off of tangible capital assets (198) - Loss on disposal of tangible capital assets (89) (420) Services provided without charge by other government departments (Note 13) (11,007) (10,210) (Increase) decrease in provision for vacation leave and other benefits (370) 162 Decrease in employee severance benefits liability 76 263 Bad debt expense (124) (122) Prepaid expenses (2,186) (2,208) Consumable supplies 446 707 Adjustment to the accrued liabilities 51 (4,169) Adjustment of previous year salary accrual 99 52 Other 21 59 Total items affecting net cost of operations but not affecting authorities (17,639) (20,975) Adjustments for items not affecting net cost of operations but affecting authorities Add (less): Acquisition of tangible capital assets 8,765 4,715 Payment of capital lease obligations 67 78 Other 136 308 Prepaid expenses 1,894 2,431 Total items not affecting net cost of operations but affecting authorities 10,862 7,532 Current year authorities used $131,486 $102,432 -
Reconciliation of parliamentary authorities provided to current year authorities used
(in thousands of dollars)
Reconciliation of parliamentary authorities provided to current year authorities used 2018 2017 Authorities provided: Program expenditures (Vote 1) $32,302 $30,714 Statutory contributions to employee benefit plans 7,364 6,555 Other statutory expenditures 92,218 67,589 131,884 104,858 Less: Lapsed authorities – Program expenditures (Vote 1) (398) (2 426) Current year authorities used $131,486 $102,432
5. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities are measured at cost, the majority of which are due within six months of year-end.
The following table presents details of the Office's accounts payable and accrued liabilities:
(in thousands of dollars)
| 2018 | 2017 | |
|---|---|---|
| Accounts payable – Other government departments and agencies | $1,345 | $469 |
| Accounts payable – External parties | 3,312 | 2,906 |
| Total accounts payable | 4,657 | 3,375 |
| Accrued liabilities | 8,721 | 7,277 |
| Total accounts payable and accrued liabilities | $13,378 | $10,652 |
6. Lease Obligation for Tangible Capital Assets
The Office has entered into agreements to lease certain equipment under capital leases with a cost of $276,434 and accumulated amortization of $42,726 as at March 31, 2018 ($310,476 and $270,426 respectively as at March 31, 2017). The obligations related to the upcoming years include the following:
(in thousands of dollars)
| Maturing year | 2018 | 2017 |
|---|---|---|
| 2018 | $ - | $ 40 |
| 2019 | 56 | 2 |
| 2020 | 55 | - |
| 2021 | 55 | - |
| 2022 and thereafter | 78 | - |
| Total future minimum lease payments | 244 | 42 |
| Less: imputed interest (1.10 % to 1.94 %) | 10 | 1 |
| Lease obligation for tangible capital assets | $234 | $41 |
7. Deposits from Political Candidates
The deposits from political candidates represent the Office's outstanding liability in relation to nomination deposits. Once the Chief Electoral Officer is satisfied that the candidates have filed a complete electoral campaign return and that the unused receipts valid for income tax purposes supplied by the returning officer have been returned within one month after polling day, these deposits are refunded.
Following a court decision, the deposit requirement provision is no longer applied by the Office. The outstanding liability represents deposits up to October 2017.
8. Employee Future Benefits
- Pension benefits
The Office'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 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quιbec Pension Plan benefits and they are indexed to inflation.
Both the employees and the Office contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to the Economic Action Plan 2012, employee contributors have been divided into two groupsGroup 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.
The 20172018 expense amounts to $5,014,989 ($4,566,922 in 20162017). For Group 1 members, the expense represents approximately 1.01 times (1.12 times in 20162017) the employee contributions and, for Group 2 members, approximately 1.00 time (1.08 times in 20162017) the employee contributions. - Employee severance benefits
Severance benefits provided to the Office's employees were previously based on an employee's eligibility, years of service and salary at termination of employment. However, since 2012 the accumulation of severance benefits for voluntary departures progressively ceased for all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date of collect the full or remaining value of benefits upon departure from the public service. As at March 31, 2018, all settlements for immediate cash out were completed and the remaining obligation will be disbursed upon departure from the public service.
Information about the severance benefits, measured as at March 31, is as follows:
(in thousands of dollars)
Employee severance benefits 2018 2017 Accrued benefit obligation, beginning of year $1,681 $1,944 Expense for the year 202 (14) Benefits paid during the year (278) (249) Accrued benefit obligation, end of year $1,605 $1,681
9. Accounts Receivable and Advances
The following table presents details of the Office's accounts receivable and advance balances:
(in thousands of dollars)
| 2018 | 2017 | |
|---|---|---|
| Receivables – Other government departments and agencies | $2,154 | $1,470 |
| Receivables – External parties | 980 | 4,458 |
| Employee advances | 50 | 64 |
| Subtotal | 3,184 | 5,992 |
| Allowance for doubtful accounts on receivables from external parties | (359) | (244) |
| Gross accounts receivable and advances | 2,825 | 5,748 |
| Accounts receivable held on behalf of government | (91) | (62) |
| Net accounts receivable and advances | $2,734 | $5,686 |
10. Tangible Capital Assets
(in thousands of dollars)
| Capital Asset Class | Opening balance | Acquisitions | Transfers | Disposals and write-off | Closing balance | 2018 Net book value | 2017 Net book value |
|---|---|---|---|---|---|---|---|
| Office equipment (including capital leases) |
$1,416 | $327 | $49 | $(564) | $1,228 | $564 | $394 |
| Informatics equipment | 4,901 | 746 | - | (124) | 5,523 | 914 | 730 |
| Software | 48,483 | 244 | 771 | - | 49,498 | 5,622 | 6,822 |
| Software under development | 4,217 | 7,700 | (771) | (198) | 10,948 | 10,948 | 4,217 |
| Furniture and fixtures | 3,683 | 12 | (49) | - | 3,646 | 1,294 | 1,583 |
| Vehicles and motorized equipment |
225 | - | - | - | 225 | 24 | 35 |
| Leasehold improvements | 12,302 | - | - | - | 12,302 | 6,000 | 7,201 |
| Total | $75,227 | $9,029 | - | $(886) | $83,370 | $25,366 | $20,982 |
(in thousands of dollars)
| Capital Asset Class | Opening balance |
Transfers | Amortization | Disposals and write-off |
Closing balance |
|---|---|---|---|---|---|
| Office equipment (including capital leases) | $1,022 | $3 | $114 | $(475) | $664 |
| Informatics equipment | 4,171 | 562 | (124) | 4,609 | |
| Software | 41,661 | 2,215 | 43,876 | ||
| Furniture and fixtures | 2,100 | (3) | 255 | 2,352 | |
| Vehicles and motorized equipment | 190 | 11 | 201 | ||
| Leasehold improvements | 5,101 | 1,201 | 6,302 | ||
| Total | $54,245 | - | $4,358 | $(599) | $58,004 |
The acquisition of tangible capital assets, the increase in accrued employee salaries and benefits and the increase in accounts payable and accrued liabilities presented in the Statement of Cash Flow excludes amounts of $264,210 for new capital leases and $1,348,256 in relation to the acquisition of tangible capital assets, as the amount relates to capital investing activities in 20172018 that remain to be paid as at March 31, 2018. However, an adjustment of $926,462 was included to account for the amount related to 20162017 that was paid after March 31, 2017.
11. Contractual Obligations
The nature of the Office's activities may result in some large multi-year contracts and obligations whereby the Office will be obligated to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:
(in thousands of dollars)
| 2019 | $66,714 |
|---|---|
| 2020 | 87,863 |
| 2021 | 27,708 |
| 2022 | 18,105 |
| 2023 and thereafter | 26,496 |
| Total | $226,886 |
12. Contingent Liabilities
Claims have been made against the Office in the normal course of operations. Legal proceedings for claims totalling $18,110 ($17,000 in 20162017) were still pending as at March 31, 2018. 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.
No amount was recognized in the Office's financial statements for the fiscal year ended March 31, 2018 ($17,000 in 20162017).
13. Related Party Transactions
The Office is related as a result of common ownership to all government departments, agencies and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual. Key management personnel include the Chief Electoral Officer and the Deputies Chief Electoral Officers. The Office enters into transactions with these entities in the normal course of business and on normal trade terms. There are no transactions that have occurred at a value different from that which would have been arrived at if the parties were unrelated.
- Common services provided without charge by other government departments
During the year, the Office received services without charge from certain common services organizations, related to accommodation, the employer's contribution to the health and dental insurance plans, audit services and workers' compensation coverage.
These services provided without charge have been recorded at the carrying value in the Office's Statement of Operations and Net Financial Position as follows:
(in thousands of dollars)
2018 2017 Accommodation $5,960 $5,881 Employer's contribution to the health and dental insurance plans 4,812 4,053 Audit services 230 271 Workers' compensation 5 5 Total $11,007 $10,210
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 Services and Procurement Canada are not included in the Office's Statement of Operations and Net Financial Position. - Common services provided without charge to other government departments
In 20172018, the Office provided services without charge to the Public Prosecution Service of Canada (PPSC) related to the provision of information technology services in the amount of $6,736 ($75,309 in 20162017). No services were provided to the Office of the Information Commissioner of Canada related to office space in 2017-2018 ($45,600 in 20162017). - Other transactions with related parties
(in thousands of dollars)
2018 2017 Accounts receivable – Other government departments and agencies $2,154 $1,470 Accounts payable – Other government departments and agencies 1,345 469 Expenses – Other government departments and agencies 10,339 10,402
Expenses disclosed in (c) exclude common services provided without charge, which are already disclosed in (a).
14. Segmented Information
Presentation by segment is based on the Office's Program Alignment Architecture. For efficiency purposes in processing payments, expenses such as information technology-related goods and services may initially be charged to Internal Services. Some expenses are reallocated to programs at the end of the year in order to enhance the transparency of business-driven activities. The methodology used for the allocation of operational expenses is based on ratios of program to non-program expenses incurred at the cost center level, a sub-division of the Office's organizational structure, or at the project level.
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 expenses and by major type or revenues.
The segmented results for the period are as follows:
(in thousands of dollars)
| 2018 | 2017 | |||||
|---|---|---|---|---|---|---|
| Electoral operations | Regulation of electoral activities | Electoral engagement | Internal services | Total | Total | |
| Transfer payments | ||||||
| Reimbursement of candidates' and parties' expenses | - | $2,232 | - | - | $2,232 | $5,090 |
| Total transfer payments | - | 2,232 | - | - | 2,232 | 5,090 |
| Operating expenses | ||||||
| Salaries and benefits | $35,552 | 8,237 | $7,853 | $19,620 | 71,262 | 56,519 |
| Professional services | 11,234 | 3,713 | 1,567 | 13,712 | 30,226 | 23,388 |
| Rental of equipment and accommodation | 7,337 | 629 | 148 | 10,078 | 18,192 | 17,134 |
| Travel and communication | 3,860 | 54 | 205 | 2,068 | 6,187 | 5,371 |
| Amortization of tangible capital assets | 2,286 | - | - | 2,072 | 4,358 | 5,089 |
| Advertising, publishing and printing | 1,475 | 2 | 1,482 | 415 | 3,374 | 1,891 |
| Small equipment | 445 | 15 | 46 | 418 | 924 | 324 |
| Utilities, materials and supplies | 631 | 24 | 77 | 88 | 820 | 356 |
| Repair and maintenance of equipment | 65 | 1 | 12 | 198 | 276 | 146 |
| Write off of tangible capital assets | - | - | - | 198 | 198 | - |
| Interest and other charges | - | - | - | 125 | 125 | 147 |
| Loss on disposal of tangible capital assets | - | - | - | 89 | 89 | 420 |
| Total operating expenses | 62,885 | 12,675 | 11,390 | 49,081 | 136,031 | 110,785 |
| Revenues | ||||||
| Excess contributions and donations | - | 203 | - | - | 203 | 313 |
| Fines and court awards | - | 3 | - | - | 3 | 2 |
| Miscellaneous revenues | - | - | - | 25 | 25 | 18 |
| Revenues earned on behalf of government | - | (206) | - | (25) | (231) | (333) |
| Total revenues | - | - | - | - | - | - |
| Net cost of operations before government funding and transfers | $62,885 | $14,907 | $11,390 | $49,081 | $138,263 | $115,875 |