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

Years ending March 31, 2012 and March 31, 2013

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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.

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:

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