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

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Years ending March 31, 2013 and March 31, 2014

Statement of Management Responsibility (Unaudited)

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, 2012 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 and 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
February 28, 2013

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 2014 Estimated Results 2013
Liabilities
Accounts payable and accrued liabilities (Note 6) $66,312 $74,099
Vacation pay and compensatory leave 32,161 32,074
Deferred revenue 2,120 2,094
Employee severance benefits (Note 7 (b)) 31,280 122,647
Total gross liabilities 131,873 230,914
Deferred revenue held on behalf of Government (2) (2)
Total net liabilities 131,871 230,912
Financial assets
Due from Consolidated Revenue Fund 37,209 35,163
Accounts receivable and advances (Note 8) 8,335 8,015
Total gross financial assets 45,544 43,178
Accounts receivable and advances held on behalf of Government (Note 8) (873) (794)
Total net financial assets 44,671 42,384
Agency - net debt 87,200 188,528
Non-Financial assets
Prepaid expenses 1,086 930
Inventory 1,046 1,077
Tangible capital assets (Note 9) 205,363 201,535
Total non-financial assets 207,495 203,542
Agency - net financial position $120,295 $15,014

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

Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.

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

Approved by:

Original signed by
George Da Pont
President

Ottawa, Canada
February 28, 2013

Original signed by
Peter Everson
Vice-President, Corporate Management Branch

Future-Oriented Statement of Operations and Agency Net Financial Position (Unaudited)

Year ended March 31 (In thousands of dollars)
  Planned Results 2014 Estimated Results 2013
Expenses
Food Safety Program $407,900 $397,504
Animal Health and Zoonotics Program 155,430 194,335
Plant Resources Program 99,282 97,168
International Collaboration and Technical Agreements 36,617 35,334
Internal Services 155,483 159,006
Expenses incurred on behalf of Government (4) (4)
Total expenses 854,708 883,343
Revenues
Inspection fees 39,304 39,405
Registrations, permits, certificates 8,237 8,259
Miscellaneous fees and services 2,788 2,543
Establishment license fees 1,726 1,731
Administrative monetary penalties 623 625
Grading 193 194
Interest 32 32
Revenues earned on behalf of Government (743) (753)
Total revenues 52,160 52,036
Net cost of operations 802,548 831,307
Government funding and transfers
Net Cash provided by government 825,086 750,945
Change in due from Consolidated Revenue Fund 2,046 (11,361)
Services provided without charge by other government departments (Note 12 (a)) 79,497 78,575
Assets funded by other government departments (OGD) 1,200 1,300
Net cost of operations after government funding and transfers (105,281) 11,848
Agency - net financial position - Beginning of year 15,014 26,862
Agency - net financial position - End of year $120,295 $15,014

Segmented information (Note 13)

Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.

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

Future-Oriented Statement of Change in Agency Net Debt (Unaudited)

Year ended March 31 (In thousands of dollars)
  Planned Results 2014 Estimated Results 2013
Net cost of operations after government funding and transfers $(105,281) $11,848
Change in tangible capital assets
Acquisition of tangible capital assets 39,946 31,572
Amortization of tangible capital assets (36,140) (34,595)
Proceeds from disposal of tangible capital assets (244) (262)
Loss on disposal of tangible capital assets (1,115) (946)
Post-capitalization of tangible capital assets 400 18
Transfer from/to low value assets (44) (35)
Tangible capital assets funded by
other government departments (OGD)
1,025 1,225
Total change due to tangible capital assets 3,828 (3,023)
Change in inventories (31) 29
Change in prepaid expenses 156 (231)
Net increase in Agency net debt (101,328) 8,623
Agency - net debt - Beginning of year 188,528 179,905
Agency - net debt - End of year $87,200 $188,528

Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.

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 2014 Estimated Results 2013
Operating activities
Cash received from:
Fees, permits, certificates
$(55,488) $(55,314)
Cash paid for:
Salaries and employee benefits 693,522 625,818
Operating and maintenance 144,425 145,997
Transfer payments 3,589 4,091
Revenues collected on behalf of Government (664) (957)
Cash used by operating activities 785,384 719,635
Capital investment activities
Acquisition of tangible capital assets 39,946 31,572
Proceeds from disposal of tangible capital assets (244) (262)
Cash used by capital investment activities 39,702 31,310
Net cash provided by Government of Canada $825,086 $750,945

Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.

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

Notes to the Future-Oriented Financial Statements (Unaudited)

Years ending March 31, 2013 and March 31, 2014

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 Schedule II to the Financial Administration Act and reports to Parliament through the Minister of Agriculture and Agri-Food.

The mandate of the Agency is to enhance the effectiveness and efficiency of federal inspection and related services for food, animals and plants. The objectives of the Agency are to contribute to a safe food supply and accurate product information; to contribute to the continuing health of animals and plants; and to facilitate trade in food, animals, plants, and related products.

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

a. 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.
b. 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.
c. 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.
d. International Collaboration And Technical Agreements:
The CFIA'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. The CFIA'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.
e. 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, Safe Food for Canadians 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 2012-13 is used as the opening position for the 2013-14 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 2014 in a manner to allow enough time to process all payments before March 31, 2014. 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.
  6. The Agency's statutory authority for spending of revenues pursuant to section 30 of the CFIA act per Main Estimate is used to estimate the total of revenues for the fiscal year.

These assumptions are adopted as at December 31, 2012.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2012-13 and for 2013-14, 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. As a result of future events, the Agency's revenues could be higher than the amount established for this statutory item (Refer to note 2 (f)).

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 2012-2013 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:

a. 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 Financial Position and Statement of Operations and Agency Net Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.

b. 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 all cash receipts and all cash disbursements including transactions between departments of the Government of Canada.

c. Due from the Consolidated Revenue Fund (CRF)

The amount of due from 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 authorities to discharge its liabilities.

d. Revenues

Revenues for fees, permits and certificates are recognized in the accounts as the services are provided.

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.

Revenues earned on behalf of Government of Canada are non-respendable and are not available to discharge the Agency's liabilities. These revenues are presented as a reduction to the Agency's revenues. While the President 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 Government of Canada and are therefore presented as a reduction of the Agency's revenues.

e. Expenses

Expenses are recorded on an accrual basis:

Transfer payments are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement.

Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.

Services provided without charge by other government departments 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.

f. Employee future benefits

  1. Pension benefits:

    The Agency's eligible employees participate in the Public Service Pension Plan (the "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. Under present legislation the Agency is not required 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 at the Agency level using specific rates provided by the Office of the Chief Actuary of Canada.

  3. Other future benefit plans:

    The Government of Canada 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.

g. 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.

h. Contingent liabilities

Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the future-oriented financial statements.

i. Inventory

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

j. 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 recorded 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

k. Measurement uncertainty

The preparation of these future-oriented financial statements requires management to make estimates and assumptions that affect the 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, 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 Financial Position and Statement of Operations and Agency Net 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:

a. Authorities requested

(in thousands of dollars)
  Planned Results 2014 Estimated Results 2013
Vote 20 - Operating expenditures $604,950 $624,093
*Supplementary vote 20 - Operating expenditures 93,839 -
Vote 25 - Capital expenditures 39,946 39,465
Statutory contributions to employee benefits plans 85,531 86,877
Statutory compensation payments 3,500 24,589
Statutory authority for spending of revenues pursuant to section 30 of the CFIA Act 53,161 53,161
Less:
Authorities available for future years
Lapsed authority - operating - (26,843)
Lapsed authority - capital - (7,893)
Forecast authorities available $880,927 $793,449

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 in 2014 made for employee severance benefit for all expired collective agreements 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.

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

(in thousands of dollars)
  Planned Results 2014 Estimated Results 2013
Net cost of operations $802,548 $831,307
Adjustments for items affecting net cost of operations but not affecting authorities:
Add (less):
Services provided without charge
by other government departments
(79,497) (78,575)
Amortization of tangible capital assets (36,140) (34,595)
Revenue available for spending not credited to the vote 51,318 51,428
Refunds of prior year expenditures 2,254 2,512
Bad debt (133) (153)
Net changes in future funding requirements 101,809 (8,747)
Low value assets funded by other government departments (175) (75)
Loss on disposal of tangible capital assets (1,115) (946)
Post-capitalization of tangible capital assets 400 18
NBV of Transfer In/Out (44) (35)
Sub-total 38,677 (69,168)
Adjustments for items not affecting net cost of operations but affecting authorities:
Add (less):
Acquisition of tangible capital assets 39,946 31,572
Proceeds from disposal of tangible capital assets (244) (262)
Sub-total 39,702 31,310
Requested authorities $880,927 $793,449

6. 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 2014 Estimated Results 2013
Accounts payable to other government department and agencies $14,285 $13,223
Accounts payable to external parties 35,857 27,599
Sub-total 50,142 40,822
Accrued liabilities 16,170 33,277
Total $66,312 $74,099

7. Employee Benefits

a. Pension benefits

The Agency's employees participate in the Public Service Pension Plan (the "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 $60,269,000 in 2013-14 (2013 - $60,519,000) representing approximately 1.95 times (2013 - 1.94 times) 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.

b. 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 2014 Estimated Results 2013
Accrued benefit obligation, beginning of year $122,647 $121,773
Expense (recovery) for the year 15,032 13,434
Benefits paid during the year (106,399) (12,560)
Accrued benefit obligation, end of year $31,280 $122,647

8. Accounts Receivable and Advances

The following table presents details of accounts receivable and advances:
(In thousands of dollars)
  Planned Results 2014 Estimated Results 2013
Receivables from other government departments and agencies (OGD) $2,791 $2,678
Receivables from external parties 6,759 6,485
Employee advances 106 101
Sub-total 9,656 9,264
Less
Allowance for doubtful accounts on
receivables from external parties
(448) (455)
Total Accounts Receivable 9,208 8,809
Accounts receivable and advances held on behalf of Government (873) (794)
Total $8,335 $8,015

9. Tangible Capital Assets

(In thousands of dollars)
  Cost Accumulated amortization    
Capital asset class Opening balance Acquisi
-tions
Adjust
-ments (1)
Disposals and write
-offs
Closing balance Opening balance Amortiza
-tion
Adjust
-ments (1)
Disposals and write
-offs
Closing balance 2014 Net book value 2013 Net book value
Land $3,331 $ - $ - $ - $3,331 $ - $ - $ - $ - $ - $3,331 $3,331
Buildings 293,966 4,594 3,100 52 301,608 203,349 10,842 - 77 214,114 87,494 90,617
Machinery and equipment 94,974 11,567 7 1,045 105,503 45,810 6,505 - 690 51,625 53,878 49,164
Computer equipment and software 71,054 7,122 4,419 1,788 80,807 39,680 7,951 - 2,147 45,484 35,323 31,374
Vehicles 33,499 2,808 - 4,676 31,631 24,341 3,614 - 4,753 23,202 8,429 9,158
Assets under construction 9,140 11,771 (7,645) 84 13,182 - - - - - 13,182 9,140
Leasehold improvements 50,322 2,084 119 - 52,525 41,571 7,228 - - 48,799 3,726 8,751
Total $556,286 $39,946 $ - $7,645 $588,587 $354,751 $36,140 $ - $7,667 $383,224 $205,363 $201,535

Amortization expense for the year ended March 31, 2014 is $36,140,000 (2013 - $34,595,000).

(1) Adjustments include assets under construction of $7,645,000 that were transferred to the other categories upon completion of the assets.

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 which the outcome is not determinable and an amount of claim can be made by management amount to approximately $285,983,000. 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)
  2013 2014 2015 2016 2017 and thereafter Total
Operating leases $1,924 $4 $- $- $- $1,928
Transfer payments 960 500 - - - 1,460
Operating contracts 14,491 1,247 555 404 324 17,021
Total $17,375 $1,751 $555 $404 $324 $20,409

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.

a. Services provided without charge by other government departments

During the year, the Agency received the employer's contribution to the health and dental insurance plans, accommodation, and legal services, without charge from other government departments. These amounts have been recognized in the Agency's Future-Oriented Statement of Operations and Agency Net Financial Position as follows:

(In thousands of dollars)
  Planned Results 2014 Estimated Results 2013
Employer's contribution to the health and dental insurance plans $46,991 $45,496
Accommodation 30,567 31,128
Legal services 1,939 1,951
Total $79,497 $78,575

b. Other transactions with related parties

(In thousands of dollars)
  Planned Results 2014 Estimated Results 2013
Accounts receivable from other government departments and agencies $2,791 $2,678
Accounts payable to other government departments and agencies 14,285 13,223
Expenses - Other Government departments and agencies 121,948 122,622
Revenues - Other Government departments and agencies 289 362

13. 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)
  2014 2013
  Food Safety Program Animal Health and Zoonotics Program Plant Resources Program International Collaboration and Technical Agreements Internal Services Total Total
Revenues              
Inspection fees $24,218 $2,382 $5,161 $7,543 $- $39,304 $39,405
Registrations, permits, certificates 5,075 499 1,082 1,581 - 8,237 8,259
Miscellaneous fees and services 1,342 132 286 418 610 2,788 2,543
Establishment license fees 1,064 105 227 330 - 1,726 1,731
Administrative monetary penalties - - - - 623 623 625
Grading 119 12 25 37 - 193 194
Interest - - - - 32 32 32
Revenues earned on behalf of Government - - - - (743) (743) (753)
Total revenues 31,818 3,130 6,781 9,909 522 52,160 52,036
Operating Expenses              
Salaries and employee benefits 304,429 113,764 73,724 27,329 116,306 635,552 642,459
Professional and special services 32,389 12,104 7,844 2,908 12,374 67,619 68,354
Amortization 17,310 6,469 4,193 1,554 6,614 36,140 34,595
Accommodation 16,609 6,207 4,022 1,491 6,346 34,675 35,302
Travel and relocation 9,561 3,573 2,315 858 3,653 19,960 20,176
Utilities, materials and supplies 9,205 3,440 2,229 826 3,517 19,217 19,426
Repairs 5,468 2,042 1,324 491 2,090 11,415 11,540
Communications 4,831 1,804 1,171 433 1,847 10,086 10,196
Furniture and equipment 4,709 1,760 1,140 423 1,799 9,831 9,939
Equipment rentals 971 363 235 87 371 2,027 2,047
Information 758 283 183 68 289 1,581 1,599
Loss on disposal of assets 534 200 129 48 204 1,115 946
Miscellaneous 190 71 46 17 73 397 402
Expenses incurred on behalf of Government - - - - (4) (4) (4)
Total operating expenses 406,964 152,080 98,555 36,533 155,479 849,611 856,977
Transfer Payments              
Compensation payments - 3,000 500 - - 3,500 24,589
Other 936 350 227 84 - 1,597 1,777
Total transfer payments 936 3,350 727 84 - 5,097 26,366
Total expenses 407,900 155,430 99,282 36,617 155,479 854,708 883,343
Net cost from continuing operations $376,082 $152,300 $92,501 $26,708 $154,957 $802,548 $831,307
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