ARCHIVED - Future-Oriented Financial Statements for the Canadian Food Inspection Agency (Unaudited)

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Years ending March 31, 2012 and March 31, 2013


Statement of Management Responsibility

Agency's management is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at December 31, 2011 and reflect the plans described in the Report on Plans and Priorities.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded, that transactions are in accordance with the Financial Administration Act and 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 division of responsibilities, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the Agency.

The Departmental Audit Committee is responsible for providing the President with independent, objective advice, guidance in relation to the adequacy of the Agency's control and accountability processes. The Departmental Audit Committee provides this support through oversight of core areas of the Agency's controls and accountabilities, including values and ethics, risk management, management control framework, internal audit functions, and accountability reporting.

The future-oriented financial statements of the Agency have not been audited.

Original signed by
George Da Pont
President
Ottawa, Canada
April 2nd, 2012
Original signed by
Peter Everson
Vice-President, Corporate Management Branch

Future-oriented Statement of Financial Position (Unaudited)

As at March 31 (In thousands of dollars)

  Planned Results 2013 Estimated Results 2012
Assets
Financial assets:

Due from the Consolidated Revenue Fund

$60,311 $66,291

Accounts receivable and advances (Note 6)

8,580 8,127
Sub-total 68,891 74,418
Non-financial assets:
Inventory 1,174 1,161

Tangible capital assets (Note 7)

210,587 221,122
Sub-total 211,761 222,283
Total 280,652 296,701
Liabilities

Accounts payable and accrued liabilities (Note 8)

70,331 75,163

Vacation pay

30,408 30,203

Deferred revenue

2,114 2,158

Employee severance benefits (Note 9)

26,841 105,715
Total 129,694 213,239
Equity of Canada 150,958 83,462
Total $280,652 $296,701

Contingent liabilities (Note 10)
Contractual obligations (Note 11)

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to December 31, 2011.

The accompanying notes are an integral part of these future-oriented financial statements.

Approved by:

Original signed by
George Da Pont
President
Ottawa, Canada
April 2nd, 2012
Original signed by
Peter Everson
Vice-President, Corporate Management Branch

Future-Oriented Statement of Operations (Unaudited)

Year ending March 31 (In thousands of dollars)

  Planned Results 2013 Estimated Results 2012
Expenses

Food Safety Program

$381,547 $378,791

Animal Health and Zoonotics Program

160,038 172,178

Plant Resources Program

103,733 103,307

International Collaboration and Technical Agreements

52,639 43,044

Internal Services

141,355 156,916
Total expenses 839,312 854,236
Revenues

Food Safety Program

31,755 31,067

Animal Health and Zoonotics Program

3,229 3,159

Plant Resources Program

6,459 6,319

International Collaboration and Technical Agreements

12,378 12,110

Internal Services

635 622
Total revenues 54,456 53,277
Net cost from continuing operations 784,856 800,959
Transferred Operations
Expenses - 6,653
Net cost of transferred operations - 6,653
Net cost of operations $784,856 $807,612

Segmented information (Note 14)

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to December 31, 2011.

The accompanying notes are an integral part of these future-oriented statements.

Future-oriented Statement of Equity of Canada (Unaudited)

Year ended March 31 (In thousands of dollars)

  Planned Results 2013 Estimated Results 2012
Equity of Canada, beginning of year $83,462 $96,513
Net cost of operations (784,856) (807,612)
Net cash provided by Government of Canada 779,600 733,461
Change in due from the Consolidated Revenue Fund (5,980) (7,518)
Services provided without charge by other government departments (Note 12 a) 78,071 75,557
Assets funded by other government departments 661 605
Organization transfer out offset (Note 12 c) - (7,360)
Transfer of assets and liabilities to other government departments (Note 13) - (184)
Equity of Canada, end of year $150,958 $83,462

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to December 31, 2011.

The accompanying notes are an integral part of these future-oriented financial statements.

Future-oriented Statement of Cash Flow (Unaudited)

Year ended March 31 (In thousands of dollars)

  Planned Results 2013 Estimated Results 2012
Operating activities
Cash received from:

Fees, permits, certificates

$(56,647) $(56,735)
Cash paid for:

Salaries and employee benefits

664,054 618,036

Operating and maintenance

141,280 145,883

Transfer payments

3,387 3,228
Cash used by operating activities 752,074 710,412
Capital investment activities

Acquisition of tangible capital assets

27,832 23,386

Proceeds from disposal of tangible capital assets

(306) (337)
Cash used by capital investment activities 27,526 23,049
Financing activity
Net cash provided by Government of Canada (779,600) (733,461)
Net cash used $ -  $ - 

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to December 31, 2011.

The accompanying notes are an integral part of these future-oriented financial statements.

Notes to the Future-oriented Financial Statements (Unaudited)

1. Authority and Purposes

The Canadian Food Inspection Agency (the "Agency") was established, effective April 1, 1997, under the Canadian Food Inspection Agency Act. The Act consolidates all federally mandated food and fish inspection services and federal animal and plant health activities into a single agency.

The Agency is a departmental corporation named in ScheduleIIto the Financial Administration Act and reports to Parliament through the Minister of Agriculture and Agri-Food.

The mandate of the Agency is to develop regulations and deliver inspection and other services to prevent and manage food safety risks; protect plant resources from pests, diseases and invasive species; prevent and manage animal diseases; contribute to consumer protection and contribute to market access for Canada's food, plants and animals.

In delivering its mandate, the Agency operates under the following 4 program activities, supported by internal services:

  1. Food Safety Program: The Food Safety Program aims to mitigate risks to public health associated with diseases and other health hazards in the food supply system and to manage food safety emergencies and incidents. The program achieves its objectives by promoting food safety awareness through public engagement and verification of compliance by industry with standards and science-based regulations. The program delivers initiatives to verify that consumers receive food safety and nutrition information and to mitigate unfair market practices targeting consumers and industry. Collaboration with other governments and stakeholders further enhances the Agency's ability to track, detect and mitigate risks associated with food and the food supply system, including food-borne illness. This program supports public health and instils confidence in Canada's food system.
  2. Animal Health And Zoonotics Program: The Animal Health and Zoonotics Program aims to mitigate risks to Canada's animal resource base, animal feeds and animal products, which are integral to a safe and accessible food supply system as well as to public health. The program achieves its objectives by mitigating risks to Canada's animals (including livestock and aquatic animals) from regulated diseases, managing animal disease emergencies and incidents, mitigating and managing risks to livestock and derived food products associated with feed, promoting animal welfare and guarding against deliberate threats to the animal resource base. The program helps to mitigate risks associated with animal diseases that can be transmitted to humans by controlling diseases within animal populations. This program supports the health of Canada's animal resources and instils confidence in the safety of Canada's animals, animal products and by-products, and production systems.
  3. Plant Resources Program: The Plant Resources Program aims to mitigate risks to Canada's plant resource base, which is integral to a safe and accessible food supply, as well as to public health and environmental sustainability. The program achieves its objectives by regulating agricultural and forestry products; mitigating risks to the plant resource base (including crops and forests) from regulated pests and diseases; regulating the safety and integrity of seeds, fertilizers and plant products; and managing plant health emergencies and incidents. The program also guards against deliberate threats to the plant resource base, facilitates the introduction of emerging plant technologies and protects the rights of plant breeders. Achieving the objectives of the program instils confidence in Canada's plants, plant production systems and plant products, and contributes to the health of Canada's plant resources.

  4. International Collaboration And Technical Agreements: TheCFIA's International Collaboration and Technical Agreements program contributes to a coherent, predictable, and science-based international regulatory framework that facilitates meeting regulatory requirements of importing countries' food, animals and plants, and their products, resulting in the facilitation of multi-billion dollar trade for the Canadian economy. The program achieves its objectives through actively participating in international fora for the development of international science-based rules, standards, guidelines and policies and, the management of sanitary and phytosanitary committees established under international agreements. TheCFIA's active promotion of the Canadian science-based regulatory system with foreign trading partners and negotiations to resolve scientific and technical issues contribute to market access.
  5. Internal Services: Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization.

    These groups are: Management and Oversight Services; Communication Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Material Management Services; Travel and Other Administrative Services.

The Agency is responsible for the administration and enforcement of the following acts: Agriculture and Agri-Food Administrative Monetary Penalties Act, Canada Agricultural Products Act, Canadian Food Inspection Agency Act, Feeds Act, Fertilizers Act, Fish Inspection Act, Health of Animals Act, Meat Inspection Act, Plant Breeders' Rights Act, Plant Protection Act, and Seeds Act.

In addition, the Agency is responsible for enforcement of the Consumer Packaging and Labelling Act and the Food and Drugs Act as they relate to food, except those provisions that relate to public health, safety, or nutrition.

Operating and capital expenditures are funded by the Government of Canada through parliamentary authorities. Compensation payments under the Health of Animals Act and the Plant Protection Act and employee benefits are authorized by separate statutory authorities. Revenues generated by its operations are deposited to the Consolidated Revenue Fund and are available for use by the Agency.

2. Methodology and Significant Assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the department as described in the Report on Plans and Priorities.

The main assumptions are as follows:

  1. The Agency's activities will remain substantially the same as for the previous year.
  2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
  3. Estimated year end information for 2011-12 is used as the opening position for the 2012-13 planned results.
  4. The Agency's statutory authority for compensation payments per Main Estimates is used to estimate the total compensation payments for the fiscal year.
  5. All current expired collective agreements are expected to be ratified in fiscal year 2013 in a manner to allow enough time to process all payments before March 31, 2013. The agreements will include provisions to eliminate accumulation of the severance and offer immediate payouts of the severance already accumulated. 75% of those eligible would opt for an immediate cash-out. Refer to Note 5 a for the cash-out details. The assumptions about the collective agreements renewal and the impact on the severance are in line with Treasury Board Guidance for future-oriented financial statements, but do not necessarily reflect any development in the collective bargaining.

These assumptions are adopted as at December 31, 2011.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2011-12 and for 2012-13, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these future-oriented financial statements the Canadian Food Inspection Agency has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented financial statements and the historical financial statements include:

  1. The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
  2. Implementation of new collective agreements.
  3. Economic conditions may affect the amount of revenue earned.
  4. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.
  5. As a result of future events, the Agency's compensation payments could be higher than the amount established for this statutory item (Refer to note 2 d).
  6. The amount of employee severance benefit estimated could lead to material differences between the future-oriented statements and actual results.
  7. The estimated amount of capital asset transfers to Shared Services Canada (SSC) could lead to differences between the actual amounts.

Once the Report on Plans and Priorities is presented, the Canadian Food Inspection Agency will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

4. Summary of Significant Accounting Policies

The future-oriented financial statements have been prepared in accordance with Treasury Board accounting policies in effect for the 2011-2012 fiscal year. These accounting policies, stated below, and based on Canadian generally accepted accounting principles for the public sector as required under Section 31 of the Canadian Food Inspection Agency Act. The presentation and results using the stated accounting policies do not result in any significant differences from the Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

  1. Parliamentary authorities

    The Agency is mainly financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Agency 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 Future-oriented Statement of Operations and Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a 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 of 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 cash receipts and all cash disbursements including transactions between departments of the Government.

  3. Due from the Consolidated Revenue Fund (CRF)

    Amounts due from/to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF.

    Amounts due from CRF represent the net amount of cash that the Agency is entitled to draw from the CRF without further parliamentary expenditure authorities to discharge its liabilities.

  4. Revenues

    Revenues are recorded on an accrual basis:

    • Revenues for fees, permits and certificates 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. Revenue from external parties for specified purposes is recognized in the period in which the related expenses are incurred.
    • Other 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, 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 under the respective terms of employment.
    • Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans and legal services are recorded as operating expenses at their estimated cost.
  6. Employee future benefits

    1. Pension benefits:

      The Agency's eligible employees participate in the Public Service Pension Plan (Plan), a multi-employer plan administered by the Government of Canada. Both the employees and the Agency contribute to the cost of the Plan.

      The Agency's contributions are expensed during the year in which the services are rendered and represent the total pension obligation of the Agency. The Agency is not required under present legislation to make contributions with respect to actuarial deficits of the Plan.

    2. Severance benefits:

      Eligible employees are entitled to severance benefits, as provided for under labor contracts and conditions of employment.

      The cost of these benefits is 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.

    3. Other future benefit plans:

      The federal government sponsors a variety of other future benefit plans from which employees and former employees can benefit during or after employment or upon retirement. The Public Service Health Care Plan and the Pensioners' Dental Services Plan represent the two major future benefit plans available to the Agency's employees.

      The Agency does not pay for these programs as they fall under the federal government's financial responsibilities, but the Agency records its share of the annual benefits paid under these programs as a service provided without charge by other government departments.

      No amount is recorded in the Agency's future-oriented financial statements with regard to either the actuarial liability of these programs at year end or the annual increase of such liabilities.

  7. Accounts receivable and advances

    Accounts receivable and advances are stated at amounts expected to be ultimately realized; a provision is made for receivable 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. 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 future-oriented financial statements.

  9. Inventory

    Inventory consists of laboratory materials, supplies, and livestock held for future program delivery and not intended for re-sale. They are valued at cost. If they no longer have service potential, they are valued at the lower of cost or net realizable value.

  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 asset as follows:

    Asset class Amortization Period
    Buildings 20-30 years
    Machinery and equipment 5-20 years
    Computer equipment and software 3-10 years
    Vehicles 7-10 years
    Leasehold improvements Lesser of the remaining term of the lease or useful life of the improvement
    Assets under construction Once in service, in accordance with asset class
  11. Measurement uncertainty

    The preparation of these future-oriented financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the future-oriented 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 (include claims and litigation), the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated.

5. Parliamentary Authorities

The Agency receives most of its funding through annual Parliamentary authorities. Items recognized in the Future-oriented Statement of Operations and Financial Position in one year may be funded through Parliamentary authorities 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:

  1. Authorities requested

    (in thousands of dollars)

      Planned Results 2013 Estimated Results 2012
    Vote 20 - Operating expenditures $573,050 $615,395
    *Supplementary vote 20 - Operating expenditures 80,522 -
    Vote 25 - Capital expenditures 27,832 29,686
    Statutory contributions to employee benefits plans 91,704 92,916
    Statutory compensation payments 1,500 1,500
    Statutory authority for spending of revenues pursuant to section 30 of the CFIA Act 53,161 52,158
    Less:

    Authorities available for future years

    Lapsed authority - operating

    - (13,700)

    Lapsed authority - capital

    - (6,300)
    Forecast authorities available $827,769 $771,655

    Authorities presented reflect current forecasts of statutory items, approved initiatives included and expected to be included in Estimates documents and, when reasonable estimates can be made, estimates of amounts to be allocated from Treasury Board central votes.

    * The supplementary vote 20 comes from an estimate made for employee severance benefit for all expired collective agreements in 2013 that includes provisions to eliminate accumulation of severance with an assumption that 75% of those eligible opted for an immediate cash-out. The Supplementary vote was added in the future-oriented financial statements to cover the cash-out in that fiscal year. The Supplementary vote could not be reflected in the Report on plans and priorities.

  2. Reconciliation of net cost of operations to requested authorities:

    (in thousands of dollars)

      Planned Results 2013 Estimated Results 2012
    Net cost of operations $784,856 $807,612
    Adjustments for items affecting net cost of operations but not affecting authorities:

    Add (less):

    Services provided without charge by other government departments

    (78,071) (75,557)

    Amortization of tangible capital assets

    (38,367) (34,048)

    Revenue not available for spending

    518 492

    Revenue available for spending not credited to the vote

    53,161 52,158

    Net changes in future funding requirements

    79,417 (970)

    Low value assets funded by other government departments

    (135) (134)

    Loss on disposal of tangible capital assets

    (1,109) (929)

    Post-capitalization of tangible capital assets

    52 52

    NBV of Transfer In/Out

    (79) (70)
    Sub-total 15,387 (59,006)
    Adjustments for items not affecting net cost of operations but affecting authorities:

    Add (less):

    Acquisition of tangible capital assets

    27,832 23,386

    Proceeds from disposal of tangible capital assets

    (306) (337)
    Sub-total 27,526 23,049
    Requested authorities $827,769 $771,655

6. Accounts Receivable and Advances

The following table presents details of accounts receivable and advances:

(in thousands of dollars)

  Planned Results 2013 Estimated Results 2012
Receivables from other government departments and agencies $2,125 $2,018
Receivables from external parties 6,250 5,936
Employee advances 111 105
Other 553 525
Sub-total 9,039 8,584
Less:

Allowance for doubtful accounts on receivables from external parties

(459) (457)
Total $8,580 $8,127

7. Tangible Capital Assets

Tangible Capital Assets (in thousands of dollars)
  Cost Accumulated amortization    
Capital asset class Opening balance Acquisitions Disposals and write-offs Closing balance Opening balance Amortization Disposals and write-offs Closing balance 2013 Net book value 2012 Net book value
Land $3,331 $- $- $3,331 $- $- $- $- $3,331 $3,331
Buildings 284,908 4,235 22 289,121 197,018 8,997 - 206,015 83,106 87,890
Machinery and equipment 83,520 1,343 2,827 82,036 39,006 10,116 9,175 39,947 42,089 44,514
Computer equipment and software 60,959 4,342 566 64,735 39,253 6,348 2,481 43,120 21,615 21,706
Vehicles 39,709 988 1,474 39,223 26,988 6,689 6,482 27,195 12,028 12,721
Assets under construction 25,385 2,462 3,611 24,236 - - - - 24,236 25,385
Leasehold improvements 56,144 4,824 - 60,968 30,569 6,217 - 36,786 24,182 25,575
Total $553,956 $18,194 $8,500 $563,650 $332,834 $38,367 $18,138 $353,063 $210,587 $221,122

Amortization expense for the year ended March 31, 2013 is $38,367 (2012 - $34,048).

Disposals of $3,611 assets under construction represent assets that are put into use in the year and transferred to other capital asset classes as applicable.

Effective November 15, 2011, the Agency transferred computer equipment and software with a net book value of $ 1,153 to Shared Services Canada (see note 13).

8. Accounts Payable and Accrued Liabilities

The following table presents details of the Agency's account payable and accrued liabilities:

(in thousands of dollars)

  Planned Results 2013 Estimated Results 2012
Accounts payable to other government department and agencies $14,686 $13,389
Accounts payable to external parties 40,633 44,035
Sub-total 55,319 57,424
Accrued liabilities 15,012 17,739
Total $70,331 $75,163

9. Employee Benefits

  1. Pension benefits

    The Agency's employees participate in the Public Service Pension Plan (Plan), a multi-employer 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/Quebec Pension Plans benefits and are indexed to inflation.

    Both the employees and the Agency contribute to the cost of the Plan. The forecast expenses are $57,053,000 in 2011-12 and $57,736,000 in 2012-13, representing approximately 1.96 times (2.0 times in 2011-12) the contributions of 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 and thus have no assets, resulting in a plan deficit equal to the accrued benefit obligation. Benefits will be paid from future authorities. Information about the severance benefits, measured for March 31, is as follows:

    (in thousands of dollars)

      Planned Results 2013 Estimated Results 2012
    Accrued benefit obligation, beginning of year $105,715 $106,036
    Transferred toSSC - (825)
    Sub-total 105,715 105,211
    Expense (recovery) for the year 12,852 11,096
    Benefits paid during the year (91,726) (10,592)
    Accrued benefit obligation, end of year $26,841 $105,715

10. Contingent Liabilities

Claims relating to both legal and employee grievances have been made against the Agency in the normal course of operations. 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 estimate of liability is accrued and an expense recorded in the future-oriented financial statements.

Amounts have been accrued for contingent liabilities pertaining to legal claims. The amount of the contingent liabilities for legal claims recognized is based on management's best estimate. As at the date of the preparation of these future-oriented financial statements, legal proceedings for contingent liabilities totaling approximately $2,524,868 are pending. Other legal claims against the Agency and other defendants include a class action suit related to bovine spongiform encephalopathy (BSE) for which amounts and likelihood of liability are not determinable.

No amounts have been accrued pertaining to employee grievances.

11. Contractual Obligations

The nature of the Agency's activities can result in some large multi-year contracts and agreements whereby the Agency 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)

  2012 2013 2014 2015 2016 and thereafter Total
Capital Projects $1,473 $310 $- $- $- $1,783
Operating leases 4,580 2,321 - - - 6,901
Contributions 1,010 960 500 - - 2,470
Other contracts 12,330 4,376 847 508 330 18,391
Total $19,393 $7,967 $1,347 $508 $330 $29,545

12. 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.

  1. Services provided without charge by other government departments

    During the year, the Agency receives 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 Agency's Future-oriented Statement of Operations as follows:

    (in thousands of dollars)

      Planned Results 2013 Estimated Results 2012
    Employer's contribution to the health and dental insurance plans $45,091 $43,152
    Accommodation 31,128 30,795
    Legal services 1,852 1,610
    Total $78,071 $75,557
  2. Other transactions with related parties

    (in thousands of dollars)

      Planned Results 2013 Estimated Results 2012
    Accounts receivable from other government departments and agencies $2,125 $2,018
    Accounts payable to other government departments and agencies 14,686 13,389
    Expenses - Other Government departments and agencies 124,517 124,310
    Revenues - Other Government departments and agencies 400 355
  3. Administration of programs on behalf of other government departments

    As of November 15, 2011, the department transferred its information technologies activities to Shared Services Canada (SSC). During the transition period, the department continued to administer those activities on behalf of SSC. The administered expenses amounted to $7,360 respectively, for the year. These expenses are not recorded in these future-oriented financial statements

13. Transfers to other government departments

Effective November 15, 2011, the department transferred its information technologies activities to Shared Services Canada (SSC), including the stewardship responsibility for assets and liabilities. Accordingly, the Agency transferred the following assets and liabilities related to information technologies activities toSSCon November 15, 2011:

(in thousands of dollars)

  Estimated Results 2012
Assets:

Tangible capital assets (Note 7)

$1,153
Liabilities:

Vacation pay

144

Employee severance benefit (Note 9 b)

825
Sub-total 969
Adjustment to Equity of Canada $184

14. Segmented information

Presentation by segment is based on the Agency's program activities architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 4. 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 segmented results for the period are as follows:

(in thousands of dollars)

  2013 2012
Food Safety Program Animal Health and Zoonotics Program Plant Resources Program International Collaboration and Technical Agreements Internal Services Total Total
Revenues
Inspection fees $22,995 $2,338 $4,677 $8,964 $- $38,974 $38,131
Registrations, permits, certificates 5,179 527 1,053 2,019 - 8,778 8,588
Miscellaneous fees and services 2,471 251 503 963 - 4,188 4,097
Establishment license fees 1,001 102 204 390 - 1,697 1,660
Grading 109 11 22 42 - 184 180
Administrative monetary penalties - - - - 608 608 595
Interest - - - - 27 27 26
Total Revenues 31,755 3,229 6,459 12,378 635 54,456 53,277
Operating Expenses
Salaries and employee benefits 276,347 115,043 74,915 38,125 102,659 607,089 623,182
Professional and special services 32,642 13,589 8,849 4,503 12,126 71,709 73,613
Travel and relocation 9,764 4,064 2,647 1,347 3,627 21,449 22,019
Amortization 17,465 7,271 4,734 2,409 6,488 38,367 34,048
Accommodation 16,424 6,837 4,451 2,266 6,101 36,079 35,507
Utilities, materials and supplies 9,245 3,849 2,506 1,276 3,434 20,310 20,848
Furniture and equipment 5,381 2,240 1,459 742 1,999 11,821 12,134
Communications 5,155 2,146 1,398 711 1,915 11,325 11,625
Repairs 5,020 2,091 1,360 693 1,865 11,029 11,319
Equipment rentals 1,113 463 302 154 413 2,445 2,510
Information 1,205 502 327 166 448 2,648 2,718
Loss on disposal of assets 505 210 137 70 188 1,110 929
Miscellaneous 247 103 67 34 92 543 556
Total Operating Expenses 380,513 158,408 103,152 52,496 141,355 835,924 851,008
Transfer Payments
Compensation payments - 1,200 300 - - 1,500 1,500
Other 1,034 430 281 143 - 1,888 1,728
Total Transfer Payments 1,034 1,630 581 143 - 3,388 3,228
Total Expenses 381,547 160,038 103,733 52,639 141,355 839,312 854,236
Net Cost from Continuing Operations $349,792 $156,809 $97,274 $40,261 $140,720 $784,856 $800,959
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