Financial Statements 2009-2010 (Unaudited)

Year ended March 31, 2010 

 Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2010 and all information contained in these statements is a shared responsibility of management of the Transportation Appeal Tribunal of Canada (TATC) and Transport Canada. These financial statements have been prepared by Transport Canada, on behalf of TATC; in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

Management of the TATC and Transport Canada is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in these financial statements is based on management's best estimates and judgment and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, Transport Canada, on behalf of TATC maintains a set of accounts that provides a centralized record of the TATC's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the TATC's Departmental Performance Report is consistent with these financial statements.

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

The financial statements of the Tribunal have not been audited.

The Chairperson,

The Chief Financial Officer,

                                                                                                                                                

Richard Hall,
Transportation Appeal Tribunal of Canada
Ottawa, Canada
August 16th, 2010

André Morency,
Transport Canada
Ottawa, Canada
August 16th, 2010

TRANSPORTATION APPEAL TRIBUNAL OF CANADA 

Statement of Operations (Unaudited)

For the Year Ended March 31, 2010

(in dollars)

   

Internal services  

Review and Appeal Hearings 

2010                   Total 

2009                 Total 

Operating expenses

       
 

Salaries and employee benefits

-

777,104

777,104

833,219

 

Professional and special services

91,305

282,736

374,041

665,167

 

Accommodation

187,604

-

187,604

185,395

 

Travel

49,785

84,369

134,154

160,429

 

Utilities, materials and supplies

97,319

8,958

106,277

67,207

 

Communication

31,365

161

31,526

55,117

 

Amortization of tangible capital assets

1,257

-

1,257

1,257

           

Total operating expenses 

458,635  

1,153,328

1,611,963

1,967,791

The accompanying notes form an integral part of the financial statements.

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

Statement of Financial Position (Unaudited)

At March 31, 2010

(in dollars)

         

2010

 

2009

ASSETS

         

Financial assets

         
 

Accounts receivable and advances (Note 4)

 

27,237

 

38,702

   

Total financial assets

27,237

 

38,702

Non-financial assets

         
 

Tangible capital assets (Note 5)

10,680

 

11,937

   

Total non-financial assets

10,680

 

11,937

           

TOTAL

   

37,917

 

50,639

             

LIABILITIES

           
 

Accounts payable and accrued liabilities

181,324

 

156,037

 

Vacation pay and compensatory leave

   

45,719

 

57,442

 

Employee severance benefits (Note 6)

139,987

 

173,251

   

Total liabilities

367,030

386,730

       

EQUITY OF CANADA

(329,113)

 

(336,091)

       

TOTAL

     

37,917

50,639

50,639

                           

The accompanying notes form an integral part of these financial statements.

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

Statement of Equity of Canada (Unaudited)

At March 31, 2010

(in dollars)

 

2010

 

2009

       

Equity of Canada, beginning of year

(336,091)

 

(503,606)

Net cost of operations

(1,611,963)

 

(1,967,791)

Current year appropriations used (Note 3)

1,429,221

 

1,748,631

Change in net position in the Consolidated Revenue Fund (Note 3)

(49,018)

 

146,576

Services received without charge from other government departments (Note 7)

238,738

 

240,099

Equity of Canada, end of year

(329,113)

 

(336,091)   (336,091)

The accompanying notes form an integral part of these financial statements.
TRANSPORTATION APPEAL TRIBUNAL OF CANADA

Statement of Cash Flow (Unaudited)

For the Year Ended March 31, 2010

(in dollars)

 

2010

 

2009

Operating activities

     
 

Net cost of operations

1,611,963

 

1,967,791

 

Non-cash items:

     
 

Amortization of tangible capital assets

(1,257)

 

(1,257)

 

Services provided without charge

(238,738)

 

(240,099)

 

Variations in Statement of Financial Position:

     
 

Increase (Decrease) in accounts receivable and advances

(11,465)

 

7,999

 

Decrease (Increase) in liabilities

19,700

 

160,773

Cash used by operating activities

1,380,203

 

1,895,207

       

Financing activities

     
 

Net cash provided by Government of Canada

(1,380,203)

 

(1,895,207)

       

The accompanying notes form an integral part of these financial statements.

     
           

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

Notes to the Financial Statements (Unaudited)

March 31, 2010

1.   Authority and Objectives

The Transportation Appeal Tribunal of Canada (Tribunal) is a quasi-judicial body established in accordance with the Transportation Appeal Tribunal of Canada Act, which came into force on June 30, 2003. The Transportation Appeal Tribunal of Canada is funded primarily through annual appropriations received from the Parliament of Canada and is not taxable under the provisions of the Income Tax Act.

The objective of the Transportation Appeal Tribunal of Canada is to provide the aviation, marine and rail communities with the opportunity to have enforcement and licensing decisions of the Minister of Transport reviewed by an independent body. Also, Transport Canada's decision not to issue or amend a Canadian Aviation Document (CAD) is within the Tribunal's jurisdiction.

The Transportation Appeal Tribunal of Canada administers numerous legislative and constitutional authorities including the Aeronautics Act, the Canada Shipping Act, the Marine Transportation Security Act, the Canada Transportation Act, the Railway Safety Act, the International Bridges and Tunnels Act and the Canada Marine Act and the Transportation Appeal Tribunal of Canada Rules.

2.   Summary of Significant Accounting Policies

The financial statements have been prepared in accordance with accounting standards issued by the Treasury Board of Canada Secretariat which are consistent with Canadian generally accepted accounting principles for the public sector.

Significant accounting policies are as follows:

(a) Parliamentary appropriations – The Tribunal is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the Tribunal do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the two bases of reporting.

(b) Net Cash Provided by Government – The Tribunal operates within the Consolidated Revenue Fund (CRF). The CRF is administered by the Receiver General for Canada. All cash received by the Tribunal is deposited to the CRF and all cash disbursements made by the Tribunal are paid from the CRF. Net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between the Tribunal and other Federal government departments and agencies.

(c) Change in net position in the Consolidated Revenue Fund – Is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non respendable revenue recorded by the Tribunal. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

Notes to the Financial Statements (Unaudited)

March 31, 2010

2. Summary of significant accounting policies (cont'd)

(d) Expenses – Expenses are recorded on the accrual basis:

  • 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, and the employer's contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

(e) Employee future benefits:

  • Pension benefits: Eligible employees participate in the Public Service Pension Plan administered by the Government of Canada. The Tribunal's contributions to the Plan are charged to expenses in the year incurred and represent the total Tribunal obligation to the Plan. Current legislation does not require the Tribunal to make contributions for any actuarial deficiencies of the Plan.
  • Severance benefits: Employees are entitled to severance benefits, as provided for under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

(f) Accounts receivable are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

(g) Tangible capital assets – All tangible capital assets having an initial cost of $5,000 or more are recorded at their acquisition cost. The Tribunal does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections. 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

Material and equipment

5 to 15 years

(h) Measurement uncertainty – The preparation of these financial statements in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant item where estimates are used are the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

Notes to the Financial Statements (Unaudited)

March 31, 2010

3. Parliamentary appropriations

The Tribunal receives most of its funding through annual Parliamentary appropriations.  Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years.  Accordingly, the Tribunal has different net results of operations for the year on a government funding basis than on an accrual accounting basis.  The differences are reconciled in the following tables: 

(a) Reconciliation of net cost of operations to current year appropriations used

 

        2010

 

2009

 
       

(in dollars)

 

Net cost of operation

     

1,611,963

 

1,967,791

 

Adjustments for items affecting net cost of operations but not affecting appropriations:

       

Add (Less):

         
 

Services provided without charge

         

(238,738)

 

(240,099)

 
 

Amortization of tangible capital assets

         

(1,257)

 

(1,257)

 
 

Vacation pay and compensatory leave

           

11,723

 

8,272

 
 

Employee severance benefits

 

33,264

 

3,487

 
 

Refund of prior years expenditures

 

12,266

 

10,437

 

Current year appropriations used

 

1,429,221

 

1,748,631

   
                             

(b) Appropriations provided and used

   

2010

 

2009

 
       

(in dollars)

 

Vote 40 – Operating expenditures

       

1,673,138

 

1,725,993

 

Statutory amounts

       

115,735

 

108,054

 

Less:

               

Lapsed appropriations: Operating

       

(359,652)

 

(85,416)

 

Current year appropriations used

 

     1,429,221

 

1,748,631

   
           
                           

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

Notes to the Financial Statements (Unaudited)

March 31, 2010

3. Parliamentary appropriations (cont'd)

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

   

2010

 

2009

 
       

(in dollars)

 
           
 

Net cash provided by Government

1,380,203

 

1,895,207

 
   

1,380,203

 

1,895,207

 
 

Change in net position in the Consolidated Revenue Fund

       
 

Variation in accounts receivable and advances

11,465

 

(7,999)

 
   

Variation in accounts payable and accrued liabilities

25,287

 

(149,014)

 
   

Refund of prior years expenditures

12,266

 

10,437

 
     

49,018

 

(146,576)

 

Current year appropriations used

 

1,429,221

 

1,748,631

   
                                 

4. Accounts Receivable and advances

The following table presents details of accounts receivable and advances:

   

2010

 

2009

       

(in dollars)

Receivables from other Federal Government departments and agencies

23,537

 

35,002

Employee advances

3,700

 

3,700

Total

27,237

 

38,702

               

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

Notes to the Financial Statements (Unaudited)

March 31, 2010

5.Tangible Capital Assets

(in dollars)

 

Cost

Accumulated amortization

2010

2009

Capital assets class

Opening balance

Acquisitions

Disposal and write-offs

Closing balance

Opening balance

Amortization

Disposal and   Write-offs

Closing balance

Net book value

Net book value

Material and equipment

20,954

-

-

20,954

9,017

1,257

-

10,274

10,680

11,937

Total

20,954

-

-

20,954

9,017

1,257

-

10,274

10,680

11,937

Amortization expense for the year ended March 31, 2010 is $1,257 (2009 - $1,257).

6. Employee Benefits

(a) Pension benefits: The Tribunal's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Tribunal contribute to the cost of the Plan. The 2009-2010 expense amounts to $83,560 ($78,028 in 2008-2009), which represents approximately 1.9 times (2.0 in 2008-2009) the contributions by employees.

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

   

2010

 

2009

   

(in dollars)

Accrued benefit obligation, beginning of year

 

173,251

 

176,738

Expense for the year

 

(33,264)

 

(3,487)

Total

 

139,987

 

173,251

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

Notes to the Financial Statements (Unaudited)

March 31, 2010

7. Related party transactions

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

(a) Services provided without charge: During the year the Tribunal received without charge from other departments, accommodation and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the Tribunal's Statement of Operations as follows:

 

2010

 

2009

 

(in dollars)

Accommodation

187,604

 

185,395

Employer's contribution to the health and dental insurance plans

51,134  

 

54,704  

Total

238,738

 

240,099

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General, are not included as an expense in the Tribunal's Statement of Operations. 

(b)   Payables outstanding at year-end with related parties:

 

2010

 

2009

 

(in dollars)

Accounts payable to other government departments and agencies

23,279

 

1,459  

Total

23,279

 

       1,459