Future-oriented Financial Statements for the year ending March 31, 2013

Statement of Management Responsibility

Responsibility for the compilation, content and presentation of the accompanying future-oriented financial statements for the year ending March 31, 2013 is a shared responsibility of management of the Transportation Appeal Tribunal of Canada (TATC) and Transport Canada. Transport Canada, on behalf of TATC, maintains a set of accounts that provides a centralized record of the TATC's financial transactions. The future-oriented financial statements have been prepared by Transport Canada on behalf of TATC's management in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector. The future-oriented financial information is submitted for Part III of Estimates (Report on Plans and Priorities) and will be used in TATC's Departmental Performance Report to compare with actual results.

TATC management and Transport Canada management are responsible for the information contained in the future-oriented financial statements and for the process of developing assumptions. Assumptions and estimates are based on information available and known to management at the time of development, reflect current business and economic conditions, and assume a continuation of current governmental priorities and consistency in TATC's mandate and strategic outcomes. Much of the future-oriented financial information is based on these assumptions, best estimates and judgment and gives due consideration to materiality. At the time of preparation of the future-oriented financial statements, TATC management believes the estimates and assumptions to be reasonable. However, as with all such assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.

The actual results achieved for the fiscal years covered in the accompanying future-oriented financial statements will vary from the forecast information presented and the variations may be material. For example, in accordance with the government-wide approach, the future-oriented financial statements do not reflect Budget 2012 decisions, including measures associated with the deficit reduction action plan.

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

The Chairperson,

Richard Hall,
Chairperson, TATC 
Ottawa, Canada

June 14, 2012

The Chief Financial Officer,

André Morency,
Chief Financial Officer, Transport Canada
Ottawa, Canada

June 14, 2012

Future-oriented Statement of Financial Position (Unaudited) as at March 31  (in dollars)

  Estimated Results 2012Planned Results 2013
Assets  
Financial assets  
Due from Consolidated Revenue Fund 119,386 101,478
Accounts receivable and advances (note 6) 14,214 12,637
Total financial assets 133,600 114,115
Non-financial assets    
Tangible capital assets (note 7) 8,166 6,908
Total non-financial assets 8,166 6,908
Total  141,766 121,023
Liabilities and Equity of Canada  
Liabilities  
Accounts payable and accrued liabilities (Note 8) 129,900 110,415
Vacation pay and compensatory leave 38,086 32,373
Employee future benefits (Note 9) 25,165 25,165
Total liabilities 193,151 167,953
Equity of Canada (51,385) (46,930)
Total  141,766 121,023

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

The accompanying notes form an integral part of these future-oriented financial statements. The Chairperson,

Richard Hall,
Chairperson, TATC 
Ottawa, Canada

June 14, 2012

The Chief Financial Officer,

André Morency,
Chief Financial Officer, Transport Canada
Ottawa, Canada

June 14, 2012

Future-oriented Statement of Operations and Departmental Net Financial Position (Unaudited) for the Year Ending March 31 (in dollars)

  Estimated Results 2012Planned Results 2013
Expenses  
Review and Appeal Hearings 1,363,051 1,137,939
Internal Services 586,339 535,361
Total expenses 1,949,390 1,673,300
Net cost of operations  1,949,390 1,673,300

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

Segmented information (note 11)

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

  Estimated Results 2012Planned Results 2013
Equity of Canada, beginning of year (153,497) (51,385)
Net cost of operations (1,949,390) (1,673,300)
Net cash provided by Government 1,871,972 1,435,397
Change in due from the Consolidated Revenue Fund (46,074) (17,909)
Services received without charge by other government departments (note 10) 225,604 260,267
Equity of Canada, end of year  (51,385) (46,930)

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

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

Future-oriented Statement of Cash Flow (Unaudited) for the Year Ending March 31 (in dollars)

  Estimated Results 2012Planned Results 2013
Operating activities
Net cost of operations  1,949,390 1,673,300
Non-cash items:
Amortization of tangible capital assets (1,257) (1,257)
Services provided without charge by other Government Departments (note 10) (225,604) (260,267)
Variations in Future-oriented Statement of Financial Position:
Variation in accounts receivables and advances (46,683) (1,577)
Variation in accounts payables and accrued liabilities 92,757 19,485
Variation in vacation pay and compensatory leave 12,455 5,713
Variation in employee future benefits 90,914 -
Cash used in operating activities 1,871,972 1,435,397
Net cash provided by Government of Canada  1,871,972 1,435,397

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

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

Notes to the Future-oriented Financial Statements (Unaudited) for the Year Ending March 31, 2013

1. Authority and objectives

The Transportation Appeal Tribunal of Canada (TATC) 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 process. Also, Transport Canada's decision not to issue or amend a Canadian Aviation Document (CAD) is within the TATC's jurisdiction.

The program architecture of the Transportation Appeal Tribunal of Canada consists of two departmental programs:

The Review and Appeal Hearings program: ensure the operations of an independent tribunal to respond to requests from the transportation community concerning the review of enforcement and licensing decisions taken by the Minister of Transport under various transportation Acts; and to conduct hearings into such appeals. At the conclusion of a hearing, TATC may confirm the Minister's decision, substitute its own decision, or refer the matter back to the Minister for reconsideration.

The Internal Services program: Internal Services are groups of related activities and resources that are administered to support the needs of program and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

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. Underlying Assumptions

These future-oriented financial statements have been prepared:

  1. As of March 31st 2012;
  2. On the basis of government policies, government priorities, and external environment at the time that the future-oriented financial information was finalized;
  3. TATC's activities will remain substantially the same as for the previous year;
  4. According to the requirements of Treasury Board Accounting Policies that are based on Canadian generally accepted accounting principles for the public sector;
  5. On the basis that the resources provided will enable TATC to deliver the expected results specified in the Report on Plans and Priorities,
  6. On the basis of historical costs and trends.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2011/12 and for 2012/2013, actual results achieved are likely to vary from the forecast information presented, and this variation could be material.

Once the Report on Plans and Priorities is presented, TATC 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 signification accounting policies

The future-oriented Financial Statements have been prepared in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector.

Significant accounting policies are as follows:

  1. Parliamentary appropriations – TATC is financed by the Government of Canada through Parliamentary appropriations. The cash accounting basis is used to recognize transactions affecting parliamentary appropriations. The future-oriented Financial Statements are based on accrual accounting. Consequently, items presented in the future-oriented Financial Statements are not necessarily the same as those provided through appropriations from Parliament. Note 5 provides reconciliation between the bases of reporting.
  2. Forecasted expenses – These are recorded when the underlying transaction or expense occurred subject to the following:
    • 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, legal and other services are reported as operating expenses at their estimated cost.
  3. Employee future benefits
    1. Pension benefits: Eligible employees participate in the Public Service Pension Plan administered by the Government of Canada. TATC's contributions to the plan are charged to expenses in the year incurred and represent the TATC's total obligation to the plan. Current legislation does not require TATC to make contributions for any actuarial deficiencies of the plan.
    2. 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.
  4. Tangible capital assets – All tangible capital assets having an initial cost of $5,000 or more are recorded at their acquisition cost. TATC 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

The future-oriented financial statements are prepared on the assumption that TATC will not make any capital asset purchases during fiscal year 2012-2013.

5. Parliamentary authorities

TATC receives most of its funding through annual expenditure authorities provided by Parliament. Items recognized in the Future-oriented financial statements in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, TATC 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 dollars)

  Estimated Results 2012Planned Results 2013
Authorities requested
Vote 75 – Operating expenditures 1,726,611 1,290,611
Statutory amounts 126,182 126,878
Frozen allotment 3,577 -
Less:  
Lapsed appropriations: Operating 165 -
Forecast authorities available   1,856,205 1,417,489

Forecast authorities requested for the year ending March 31, 2013 are the planned spending amounts presented in the 2012-2013 Report on Plans and Priorities. Estimated authorities requested for the year ending March 31, 2012 include amounts presented in the 2011-2012 Main Estimates and Supplementary Estimates (A) and (B), planned for presentation in Supplementary Estimates (C) and estimates of amounts to be allocated at year-end from Treasury Board central votes.  

b) Reconciliation of net cost of operations to requested authorities (in dollars)

  Estimated Results 2012Planned Results 2013
Net cost of operation 1,949,390 1,673,300
Adjustments for items affecting net cost of operations but not affecting authorities:  
Add (Less):  
Services provided without charge by other government departments (225,604) (260,267)
Amortization of tangible capital assets (1,257) (1,257)
Variation in vacation pay and compensatory leave 12,455 5,713
Variation in employee severance benefits 90,914 -
Refund of prior years expenditures 30,307 -
Forecast authorities available  1,856,205 1,417,489 

6. Accounts receivable and advances (in dollars)

  Estimated Results 2012Planned Results 2013
Receivable from other government departments and agencies 10,514 8,937
Employee advances 3,700 3,700
Total 14,214 12,637 

7. Tangible capital assets (in dollars)

  Cost Accumulated AmortizationNet book value
Opening balanceAcquisitionsTransfer Disposals and write-offs Closing balanceOpening balanceAmortization Disposals and write-offs Closing balance Estimated Results 2012 Planned Results 2013
Material & Equipment 20,954 - - - 20,954 11,531 1,257   12,788 8,166 6,908
TOTAL 20,954 - - - 20,954 11,531 1,257 - 12,788 8,166 6,908

8. Accounts payable and accrued liabilities

The following table presents details of TATC's accounts payable and accrued liabilities (in dollars):

  Estimated Results 2012Planned Results 2013
Accounts payables to external parties 86,901 31,449
Accounts payables to other government departments and agencies 36,999 73,866
Total accounts payables 123,900 105,315
Accrued liabilities 6,000 5,100
Total Accounts payable and accrued liabilities 129,900 110,415

9. Employee future benefits

(a) Employee Benefits:

Pension benefits: TATC'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 TATC contribute to the cost of the plan. The forecast expenses are $90,725 in 2011-2012 and $77,116 in 2012-13, representing approximately 1.9 times the contributions of employees.

TATC'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) Employee severance benefits:

TATC 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 appropriationsInformation about the severance benefits measured as of March 31st, is as follow (in dollars)

  Estimated Results 2012Planned Results 2013
Accrued benefit obligation, beginning of year 116,079 25,165
Expense for the year (90,914) -
Accrued benefit obligation , end of year 25,165 25,165

10.  Related party transactions

TATC is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. TATC enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the TATC receives common services, which are obtained without charge from other Government departments as disclosed below.

(a) Common services provided without charge by other government departments

During the year, TATC is forecasted to receive 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 TATC's future-oriented financial statements as follows:

  Estimated Results 2012Planned Results 2013
Accommodation 190,537 193,967
Employer's contribution to the health and dental insurance plans 35,067 66,300
Total 225,604 260,267

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 check issuance services provided by Public Works and Government Services Canada, are not included as an expense in TATC's future-oriented financial statements. 

11. Segmented information (in dollars)

 Operating expensesEstimated Results 2012Planned Results 2013
Review & Appeal HearingsInternal ServicesTotalReview & Appeal HearingsInternal ServicesTotal
Salaries and employee benefits 884,062 - 884,062 914,076 - 914,076
Professional and special services 312,520 296,587 609,107 309,000 - 309,000
Accommodation - 190,537 190,537 - 193,967 193,967
Travel 156,648 5,617 162,265 140,000 50,000 190,000
Utilities, material and supplies 9,046 57,337 66,383 10,000 20,000 30,000
Telecommunication 775 35,004 35,779 2,000 33,000 35,000
Amortization of tangible capital assets - 1,257 1,257 - 1,257 1,257
Total operating expenses 1,363,051 586,339 1,949,390 1,375,076 298,224 1,673,300