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Section III – Supplementary Information

Table 1: Comparison of Planned to Actual Spending (including Full-Time Equivalents)

(in millions of dollars)

This table offers a comparison of the Main estimates, Planned Spending, Total Authorities and Actual Spending for the recently completed fiscal year, as well as historical figures for Actual Spending.

	2004–05 Actual	2005–06 Actual	2006–07
	2004–05 Actual	2005–06 Actual	Main Estimates	Planned Spending	Total Authorities	Total Actuals
Population and Public Health	586.7	477.2	506.6	629.7	536.2	510.8
Total	586.7	477.2	506.6	629.7**	536.2***	510.8****
Less: Non‑respendable revenue	0.0	0.2	0.0	0.0	0.0	0.3
Plus: Cost of services received without charge	11.4	17.6	0.0	20.2	20.2	21.0
Total Departmental Spending	598.1	494.6	506.6	649.9	556.4	531.5
Full-time Equivalents *	1,666	1,801	2,119	2,119	2,119	2,050

* Full-time equivalents (FTE) are a measure of human resource consumption based on average levels of employment. FTEs are not subject to Treasury Board control but are disclosed in Part III of the Estimates in support of personnel expenditure requirements specified in the Estimates.

** The $123.1 million increase from Main Estimates to Planned Spending is due to increased funding for initiatives announced in Federal budgets such as: Avian and Pandemic Influenza Preparedness ($66.3 million); Canadian Strategy for Cancer Control ($52 million); Strengthening Canada’s Public Health Systems ($4.2 million); one year extension for the Centre of Excellence for Children’s Well Being ($1.8 million); offset by savings in procurement resulting from the ERC exercise ($1.2 million).

*** The $93.5 million decrease from Planned Spending to Total Authorities is mainly due to funding for Avian and Pandemic Influenza Preparedness deferred to subsequent fiscal years ($44 million); and funding for Canadian Strategy for Cancer Control provided to Health Canada instead of the Agency ($51 million).

**** The $25.4 million difference between Total Authorities and Actual Spending is mainly the result of lapses in operating expenditure of $20.5 million and transfer payments of $4.9 million.

Table 2: Resources by Program Activity

This table reflects how resources were used within the Public Health Agency of Canada by appropriation and by program activity.

(in millions of dollars)

2006–07 Budgetary
	Operating	Grants	Contributions and other Transfer Payments	Total: Gross Budgetary Expenditures	Less: Respendable Revenue	Total: Net Budgetary Expenditures
Population and Public Health
Main Estimates	327.4	33.1	146.2	506.7	(0.1)	506.6
Planned Spending	392.7	89.1	148.0	629.8	(0.1)	629.7
Total Authorities	349.3	22.6	164.4	536.3	(0.1)	536.2
Actual Spending	328.7	21.0	161.2	510.9	(0.1)	510.8

Table 3: Voted and Statutory Items

(in millions of dollars)

Vote or Statutory Item	Truncated Vote or Statutory Wording	2006–07
Vote or Statutory Item	Truncated Vote or Statutory Wording	Main Estimates	Planned Spending	Total Authorities	Total Actuals
35	Operating expenditures	299.3	363.4	326.0	305.4
40	Grants and contributions	179.3	237.1	187.0	182.2
(S)	Contributions to employee benefit plans	28.0	29.2	23.2	23.2
(S)	Spending of proceeds from the disposal of surplus Crown assets Actual = $1,286.81	0.0	0.0	0.0	0.0
	Total	506.6	629.7	536.2	510.8

Table 4: Services Received Without Charge

(in millions of dollars)

	2006–07 Actual Spending
Accommodation provided by Public Works and Government Services Canada	9,4
Contributions covering the employer’s share of employees’ insurance premiums and expenditures paid by the Treasury Board of Canada Secretariat.	11.5
Salary and associated expenditures of legal services provided by the Department of Justice Canada	0.1
Total 2006–07 Services received without charge	21.0

Table 5: Sources of Respendable and Non-respendable Revenue

Respendable Revenue (in millions of dollars)

	Actual 2004‑05	Actual 2005‑06	2006–07
	Actual 2004‑05	Actual 2005‑06	Main Estimates	Planned Revenue	Total Authorities	Actual
Population and Public Health Sale to federal and provincial/territorial departments and agencies, airports and other federally regulated organizations of first aid kits to be used in disaster and emergency situations	0.1	0.1	0.1	0.1	0.1	0.1
Spending of proceeds from the disposal of surplus Crown assets	0.0	0.0	0.0	0.0	0.0	0.0
Total Respendable Revenue	0.1	0.1	0.1	0.1	0.1	0.1

Non-respendable Revenue (in million of dollars)

	Actual 2004–05	Actual 2005–06	2006–07
	Actual 2004–05	Actual 2005–06	Main Estimates	Planned Revenue	Total Authorities	Actual
Population and Public Health Sale of first aid kits / net vote revenue surplus	0.0	0.1	0.0	0.0	0.0	0.0
Royalties and other miscellaneous revenues	0.0	0.0	0.0	0.0	0.0	0.1
Sundries – credit cards rebate	0.0	0.1	0.0	0.0	0.0	0.2
Total Non-respendable Revenue	0.0	0.2	0.0	0.0	0.0	0.3

Table 6: Resource Requirements by Branch

(in millions of dollars)

	Population and Public Health
Agency Executive, Chief Public Health Officer*
Planned Spending	8.8
Actual Spending	4.8
Infectious Disease and Emergency Preparedness Branch**
Planned Spending	219.1
Actual Spending	161.8
Health Promotion and Chronic Disease Prevention Branch***
Planned Spending	153.7
Actual Spending	81.9
Strategic Policy, Communications and Corporate Services Branch****
Planned Spending	64.5
Actual Spending	81.0
Public Health Practice and Regional Operations Branch
Planned Spending	183.6
Actual Spending	181.3
Agency Total
Planned Spending	629.7
Actual Spending	510.8

The major differences between Planned and Actual spending are:

* Agency Executive, Chief Public Health Officer: The $4.0 million lapse was due to capacity and technical constraints in staffing coupled with deferment of Pandemic initiatives to future years.

** Infectious Disease and Emergency Preparedness Branch: Funding for Avian and Pandemic Influenza Preparedness deferred to subsequent fiscal years of $44 million; and funding reallocated to other branches $6.6 million leaving a small lapse of $6.7 million.

*** Health Promotion and Chronic Disease Prevention Branch: $51 million of funding for the Canadian Strategy for Cancer Control was approved under Health Canada as opposed to the Agency as originally envisioned; $15.4 million was allocated to other branches for new unplanned priorities; $5.4 million lapsed due to delays and timing changes; and uncertainty of funding by Governor General Special Warrants earlier in the fiscal year included the need to cash manage close to $3 million to operate the Centre of Excellence for Children which was not funded.

**** Strategic Policy, Communications and Corporate Services Branch: Operating Budget carry forward from 2005-06 provided $11.7 million, and funding transferred from other branches provided $4.8 million to cover new emerging pressures.

Table 7-A: User Fees Act

						2006–07			Planning Years
A. User Fee	Fee Type	Fee-setting Authority	Date Last Modified	Forecast Revenue ($000)	Actual Revenue ($000)	Full Cost ($000)	Performance Standard	Performance Results	Fiscal Year	Forecast Revenue ($000)	Estimated Full Cost ($000)
Fees charged for the processing of access requests filed under the Access to Information Act (ATIA)	Other products and services (O)	Access to Information Act	1992	See Section C – Other Information Note 1	See Section C – Other Information Note 1	See Section C – Other Information Note 1	Response provided within 30 days following receipt of request: response time may be extended pursuant to section 9 of the ATIA. Notice of extension to be sent within 30 days of receipt of request.	See Section C – Other Information Note 1	2007-08 2008-09 2009-10	0.7 0.8 0.9	580 580 580
B. Date Last Modified
C. Other Information 1. Access to Information requests filed for the Public Health Agency of Canada in 2006-07 were processed by Health Canada. Accordingly, associated revenues and costs are reported under Health Canada for 2006-07.

Table 7-B: Policy on Service Standards for External Fees

Information on Service Standards for External Fees can be found at: http://www.tbs-sct.gc.ca/est-pre/estime.asp

Table 8: Details on Transfer Payment Programs (TPPs)

The following is a summary of the transfer payment programs for the Agency that are in excess of $5 million. All the transfer payments shown below are voted programs.

Population Health Fund
Community Action Program for Children
Canada Prenatal Nutrition Program
Federal Initiative to Address HIV/AIDS in Canada
Aboriginal Head Start / Early Childhood Development
Canada Health Network
Canadian Diabetes Strategy
National Collaborating Centres Contribution Program

Supplementary information on these Transfer Payment Programs can be found at http://www.tbs-sct.gc.ca/est-pre/estime.asp.

Table 9: Conditional Grants (Foundations)

The Agency provided a one-time conditional grant of $100 million to Canada Health Infoway in 2004-05 to support health surveillance.

Canada Health Infoway Inc. (Infoway) is an independent not-for-profit corporation with a mandate to foster and accelerate the development and adoption of electronic health information systems and compatible standards and communications technologies across Canada. Infoway is also a collaborative mechanism in which the federal, provincial and territorial governments participate as equals, toward a common goal of modernizing Canada’s health information systems. The Public Health Agency of Canada’s portion under this collaboration is the Health Surveillance Program. Health Canada has provided the Supplementary Information on their and the Public Health Agency of Canada’s conditional grants to Infoway.

Further information on this Conditional Grant can be found at: http://www.tbs-sct.gc.ca/est-pre/estime.asp .

Table 10: Financial Statements

The following Financial Statements have been prepared in accordance with accrual accounting principles. The information presented in the other financial tables of this Performance Report were prepared on a modified cash basis of accounting in order to be consistent with appropriations-based reporting. Note 3 of the financial statements reconciles these two accounting methods.

Statement of Operations (unaudited)

PUBLIC HEALTH AGENCY OF CANADA

For the year ended March 31	2007	2006
(in dollars)
Expenses
Salaries and employee benefits	183,791,847	170,341,797
Transfer payments	181,361,341	175,244,575
Professional and special services	70,287,779	55,138,587
Utilities, material and supplies	37,356,355	41,351,299
Travel and relocation	17,485,034	15,793,168
Accommodation	12,884,158	11,961,621
Purchased repair and maintenance	8,887,103	6,019,930
Information	8,623,347	4,599,372
Amortization of tangible capital assets	6,920,987	6,263,550
Communication	5,287,798	4,748,297
Rentals	1,428,167	1,307,661
Other	1,784,117	1,180,989
	536,098,033	493,950,846
Revenues
Sales of goods and services
Rights and Privileges	28,377	25,376
Services of a Non-Regulatory Nature	88,871	125,742
Interest	7,948	11,890
Other	216,299	105,106
	341,495	268,114
Net cost of operations	535,756,538	493,682,732

The accompanying notes form an integral part of the financial statements

Statement of Financial Position (unaudited)

PUBLIC HEALTH AGENCY OF CANADA

At March 31	2007	2006
(in dollars)
Assets
Financial assets
Accounts receivable and advances (Note 4)	8,067,818	5,884,928
Total financial assets	8,067,818	5,884,928
Non-financial assets
Tangible capital assets (Note 5)	63,517,725	65,742,171
Total non-financial assets	63,517,725	65,742,171
TOTAL	71,585,543	71,627,099
Liabilities and Equity of Canada
Liabilities
Accounts payable and accrued liabilities	94,035,266	79,975,372
Vacation pay and compensatory leave	8,432,076	7,387,369
Employee severance benefits (Note 6)	28,512,678	24,109,715
Other liabilities	2,763,581	2,402,497
	133,743,602	113,874,953
Equity of Canada	(62,158,058)	(42,247,854)
TOTAL	71,585,543	71,627,099

Contractual Obligations (Note 7)

The accompanying notes form an integral part of the financial statements

Statement of Equity (unaudited)

PUBLIC HEALTH AGENCY OF CANADA

For the year ended at March 31 (in dollars)	2007	2006
Equity of Canada, beginning of year	(42,247,854)	(10,242,764)
Net cost of operations	(535,756,538)	(493,682,732)
Current year appropriations used (Note 3)	510,812,401	477,166,397
Refund of previous year expenditures	(3,259,280)	(6,413,953)
Revenue not available for spending (Note 3)	(296,270)	(193,247)
Change in net position in the Consolidated Revenue Fund (Note 3)	(10,828,711)	(26,481,555)
Services provided without charge by other government departments (Note 8)	19,418,194	17,600,000
Equity of Canada, end of year	(62,158,058)	(42,247,854)

The accompanying notes form an integral part of the financial statements

Statement of Cash Flow (unaudited)

PUBLIC HEALTH AGENCY OF CANADA

For the year ended March 31 (in dollars)	2007	2006
Operating activities
Net cost of operations	535,756,538	493,682,732
Non-cash items:
Amortization of tangible capital assets (Note 5)	(6,920,987)	(6,263,550)
Gain (loss) on disposal of tangible capital assets	(14,112)	12,367
Services provided without charge by other government departments (Note 8)	(19,418,194)	(17,600,000)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances	2,182,890	5,052,368
Increase (decrease) in accounts payable and accrued liabilities	(14,059,894)	(31,934,371)
Decrease (increase) in other liabilities	(361,084)	(397,025)
Decrease (increase) in vacation pay and compensatory leave	(1,044,707)	(763,019)
Decrease (increase) in employee severance benefits	(4,402,963)	(4,374,271)
Cash used by operating activities	491,717,487	437,415,231
Capital investment activities
Acquisitions of tangible capital assets (Note 5)	4,711,940	6,674,778
Proceeds on disposal of tangible capital assets	(1,287)	(12,367)
Cash used by investment activities	4,710,653	6,662,411
Financing activities
Net cash provided by Government of Canada	(496,428,140)	(444,077,642)

The accompanying notes form an integral part of the financial statements

Notes to the Financial Statements (unaudited)

1. Authority and Objectives

The Public Health Agency of Canada (PHAC) was created as a new agency by orders in council on September 24, 2004 in response to growing concerns about the capacity of Canada's public health system to anticipate and respond effectively to public health threats. Its creation is the result of wide consultation with the provinces, territories, stakeholders and Canadians. It also follows recommendations from leading public health experts - including Dr. David Naylor's report, Learning from SARS: Renewal of Public Health in Canada, as well as other Canadian and international reports - for clear federal leadership on issues concerning public health and improved collaboration within and between jurisdictions. The Public Health Agency of Canada Act, assented to December 12, 2006, provides a statutory foundation for the new agency.

The agency is mandated to work in collaboration with its partners, to lead federal efforts and to mobilize pan-Canadian action in preventing disease and injury, and to promote and protect national and international public health through the following:

Anticipating, preparing for, responding to and recovering from threats to public health;
Carrying out surveillance of, monitoring, researching, investigating and reporting on diseases, injuries, other preventable health risks and their determinants, and the general state of public health in Canada and internationally;
Using the best available evidence and tools to advise and support public health stakeholders nationally and internationally as they work to enhance the health of their communities;
Providing public health information, advice and leadership to Canadians and stakeholders; and
Building and sustaining a public health network with stakeholders.

2. Summary of significant accounting policies

The 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:

(a) Parliamentary appropriations
The agency is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the agency do not parallel financial reporting according to Canadian 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 agency operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for 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 federal government.

(c) Change in net position in the Consolidated Revenue Fund
The 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 agency. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Revenues
Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

(e) Expenses
Expenses are recorded on an accrual basis:

Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.
Contributions 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

Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The agency's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation to the Plan by the agency. Current legislation does not require the agency to make contributions for any actuarial deficiencies of the Plan.
Severance benefits: Employees are entitled to severance benefits 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.

(g) Accounts receivable
Accounts receivable are stated at amounts expected to be ultimately realized. They are mainly comprised of amounts to be recovered from other government departments and the recovery is considered certain. As a result, no provision has been recorded as an offset against these amounts.

(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 financial statements.

(i) Tangible Capital Assets
All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. The agency 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
Buildings	25 years
Works and infrastructure	25 years
Machinery and equipment	8-12 years
Computer equipment	3-5 years
Computer software	3 years
Other Equipment	10-12 years
Motor Vehicles	4-7 years
Other Vehicles	10 years

(j) 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 items where estimates are used are the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly 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.

3. Parliamentary Appropriations

The agency 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 agency has different net cost 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:

(in dollars)	2007	2006
Net cost of operations	535,756,538	493,682,732
*Adjustments for items affecting net cost of operations but not affecting appropriations:*
*Add (Less):*
Amortization of tangible capital assets	(6,920,987)	(6,263,550)
Services provided without charge by other government departments	(19,418,194)	(17,600,000)
Revenues not available for spending	296,270	193,247
Refund/Adjustment of previous years expenses	3,259,280	6,413,953
Gain (loss) on disposal of tangible capital assets	(14,112)	12,367
Proceeds on disposal of tangible capital assets	(1,287)	(12,367)
Allowance for Contingent Liabilities	(350,000)	0
Vacation pay and compensatory leave	(1,044,707)	(763,019)
Decrease (increase) in severance benefits	(4,402,963)	(4,374,270)
Justice Canada legal fees	(1,022,689)	(808,786)
Other non appropriated amounts	(36,688)	11,312
	(29,656,077)	(23,191,113)
*Adjustments for items not affecting net cost of operations but affecting appropriations:*
*Add (Less):*
Acquisitions of tangible capital assets	4,711,940	6,674,778
	4,711,940	6,674,778
Current year appropriations used	510,812,401	477,166,397

(b) Appropriations provided and used:

(in dollars)	2007	2006
*Operating expenditures - Vote 35 (2006 Vote 30)*	299,278,000	234,719,000
Supplementary Vote 35a	30,730,105	0
Supplementary Vote 35b	0	0
Governor General's Special Warrants	0	59,164,660
*Grants and contributions - Vote 40 (2006 Vote 35)*	179,306,000	164,009,000
Supplementary Vote 40a	6,018,366	0
Supplementary Vote 40b	0	0
Governor General's Special Warrants	0	645,000
Transfer from Treasury Board - Vote 5	293,605	15,415,000
Transfer from TB - Vote 10	(62,500)	0
Transfer from TB - Vote 15	(1,635,000)	0
Total Voted Parliamentary Appropriations	513,928,576	473,952,660
Lapsed appropriations:	(26,306,443)	(19,842,269)
Total Voted Parliamentary Appropriations Used	487,622,133	454,110,391
Contributions to employee benefit plans	23,188,745	23,043,639
Spending of proceeds from the disposal of surplus Crown assets	1,287	12,367
Collection Agency Fees	236	0
Current year appropriations used	510,812,401	477,166,397

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

(in dollars)	2007	2006
Net cash provided by Government	496,428,140	444,077,642
Revenue not available for spending	296,270	193,247
Refund/Adjustment of previous years expenses	3,259,280	6,413,953
Change in net position in the Consolidated Revenue Fund
Variation in accounts receivable and advances	(2,182,890)	(5,052,368)
Variation in accounts payables and accrued liabilities	13,709,894	31,934,371
Variation in other liabilities	361,084	397,025
Justice Canada legal fees	(1,022,689)	(808,786)
Other adjustments	(36,688)	11,313
Change in net position in the Consolidated Revenue Fund	10,828,711	26,481,555
Current year appropriations used	510,812,401	477,166,397

4. Accounts receivable and advances

(in dollars)	2007	2006
Receivables from other Federal Government departments and agencies	6,667,560	4,724,495
Receivables from external parties	1,376,712	1,142,623
Employee advances	23,546	17,810
	8,067,818	5,884,928

5. Tangible capital assets

Cost	Opening Balance	Acquisitions	Disposals and write offs	Closing balance
(in dollars)
Land	604,137	0	0	604,137
Buildings	71,681,239	60,000	0	71,741,239
Works and Infrastructure	564,425	0	0	564,425
Machinery and Equipment	35,725,663	3,838,279	(439,289)	39,124,653
Computer Equipment	2,957,453	116,879	0	3,074,332
Computer Software	896,107	145,954	0	1,042,061
Other Equipment	1,749,379	550,828	0	2,300,207
Motor Vehicles	129,190	0	0	129,190
Other Vehicles	84,253	0	0	84,253
	114,391,846	4,711,940	(439,289)	118,664,497
Accumulated Amortization	Opening Balance	Acquisitions	Disposals and write offs	Closing balance
(in dollars)
Buildings	25,795,047	2,866,990	0	28,662,037
Works and Infrastructure	24,479	22,577	0	47,056
Machinery and Equipment	20,312,096	3,069,295	(423,890)	22,957,501
Computer Equipment	1,524,612	543,163	0	2,067,775
Computer Software	571,080	182,238	0	753,318
Other Equipment	296,249	219,823	0	516,072
Motor Vehicles	41,859	16,901	0	58,760
Other Vehicles	84,253	0	0	84,253
	48,649,675	6,920,987	(423,890)	55,146,772
Net Tangible Capital Assets	Opening Balance			Closing balance
(in dollars)
Land	604,137			604,137
Buildings	45,886,192			43,079,202
Works and Infrastructure	539,946			517,369
Machinery and Equipment	15,413,567			16,167,152
Computer Equipment	1,432,841			1,006,557
Computer Software	325,027			288,743
Other Equipment	1,453,130			1,784,135
Motor Vehicles	87,331			70,430
Other Vehicles	0			0
	65,742,171			63,517,725

Amortization expense for the year ended March 31,2007 is $6,920,987 (2006: $6,263,550)

6. Employee benefits

(a) Pension benefits

The agency'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/Qu�bec Pension Plans benefits and they are indexed to inflation.

Both the employees and the agency contribute to the cost of the Plan. The expense presented below represents approximately 2.2 times the contributions by employees.

(in dollars)	2007	2006
Expense for the year	17,090,105	17,052,293

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. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:

(in dollars)	2007	2006
Accrued benefit obligation, beginning of year	24,109,715	19,735,444
Expense for the year	5,019,311	5,268,011
Benefits paid during the year	(616,348)	(893,740)
Accrued benefit obligation, end of year	28,512,678	24,109,715

7. Contractual Obligations

The nature of the agency's activity results in multi-year contracts and obligations whereby the agency will be committed to make some future payments when the services/goods are received. Contractual obligations that can be reasonably estimated are as follows:

(in dollars)
	2007	2008	2009	2010	2011 and thereafter	Total
Transfer payments	25,800,000	4,700,000	50,650,000	4,750,000	45,900,000	131,800,000

8. 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. Also, during the year, the agency 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 agency received services without charge from other departments. These services without charge have been recognized in the agency's Statement of Operations as follows:

(in dollars)	2007	2006
Accommodation	7,800,000	7,000,000
Employer's contribution to the health and dental insurance plans	11,547,800	10,600,000
Legal services	70,394	0
	19,418,194	17,600,000

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, are not included as an expense in the agency's Statement of Operations.

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

(in dollars)	2007	2006
Accounts receivable with other government departments and agencies	6,667,560	4,724,495
Accounts payable to other government departments and agencies	6,555,838	5,484,462

9. Comparative information

Comparative figures have been reclassified to conform to the current year’s presentation.

Table 11: Response to Parliamentary Committees, and Audits and Evaluations

Response to Parliamentary Committees

The Standing Committee on Health tabled a report on September 18, 2006 entitled, Even One is too Many: A call for a comprehensive action plan for Fetal Alcohol Spectrum Disorder. The four recommendations in the report focus on:

1) the development of a comprehensive federal and national FASD action plan;

2) addressing issues around leadership, coordination and implementation of an FASD plan;

3) improving data collection and incidence and prevalence reporting; and,

4) putting in place a mechanism for evaluating and reporting to Parliament on FASD activities. For more details:

http://cmte.parl.gc.ca/cmte/CommitteePublication.aspx?COM=10481&Lang=1&SourceId=169974

On March 27, 2007, the Standing Committee on Health (HESA) tabled a report on childhood obesity, entitled Healthy Weights for Healthy Kids. Calling childhood obesity an “epidemic”, HESA seeks immediate federal action to halt and reverse the increasing number of overweight/obese children in Canada. The Report recognizes that underlying determinants of health affect children and their parents and their ability to make healthy choices.

HESA calls upon all stakeholders to collaborate on comprehensive, coordinated, multi-sectoral measures to promote healthy weights for children through increased access to healthy food choices and quality physical activity. Throughout the Report, HESA encourages the Government of Canada (GoC) to collaborate with First Nations and Inuit people (FN/I) to prevent childhood obesity.

For more details:

http://cmte.parl.gc.ca/cmte/CommitteePublication.aspx?COM=10481&Lang=1&SourceId=199309

Response to the Auditor General including to the Commissioner of the Environment and Sustainable Development (CESD)

The May 2006 status report of the Auditor General included one Chapter which referred to the Public Health Agency of Canada. Chapter 6, Management of Voted Grants and Contributions. The objective of this audit was to determine the extent to which the government has ensured effective government-wide management and control of the spending of public money through grants and contributions. In terms of coverage for the Agency, the Community Action Program for Children was audited. Overall, Canadian Heritage, SSHRC and the Agency met the OAG audit criteria, and found their processes for assessing applicant’s eligibility to be satisfactory. The OAG concluded that the Agency’s progress in terms of monitoring was satisfactory.

The February 2007 status report of the Auditor General included one Chapter implicating Health Canada and the Public Health Agency of Canada. Chapter 1: Advertising and Public Opinion Research. The audit looked at a sample of advertising and public opinion research campaigns to see whether the departments administering them were exercising adequate management and control and whether changes made in response to the 2003 audit recommendations were effective.

The OAG found that in all but one case the departments had obtained the necessary approval from Cabinet before initiating the campaign. With the Public Health Agency of Canada pandemic influenza campaign, there was no Cabinet decision for the campaign. The Agency explained that a proposal was not submitted for PCO approval and that an advertising agency was hired to develop a campaign that would only be launched in case of a pandemic. The Government Advertising Committee was informed of this and acknowledged this course of action in the Committee’s records of proceedings. Due to the nature of the campaign, the OAG was satisfied with the explanation provided by the department.

There was one recommendation: Departments should ensure that the required notification of planned research is provided to PWGSC prior to contacting research firms. Agency management agrees with the recommendation and the Agency’s processes have been amended to ensure that we comply with the requirement.

External Audits (conducted by the Public Service Commission of Canada or the Office of the Commissioner of Official Languages.)

There was no external audit performed by the Public Service Commission or the Commissioner of Official Languages in 2006-07.

Internal Audits

While a number of projects were started, no Internal Audits were completed in 2006-07. The Agency’s Chief Audit Executive was hired in December 2006 and most efforts in the last quarter of 2006-07 were devoted to the infrastructure of the newly created Audit Services Division.

Evaluations

The following evaluations were completed in 2005-06:

Aboriginal Head Start in Urban and Northern Communities
Canadian Health Network
Canadian Diabetes Strategy
Centres of Excellence for Children's Well-Being

Evaluations Completed in 2006-07:

Hepatitis C Prevention, Support and Research Program
National Health Surveillance Infostructure Initiative

The status of the remaining evaluation reports are as follows:

Fetal Alcohol Spectrum Disorder - Scheduled for 2008-09
Canadian Strategy for Cancer Control - Not an Agency program, cancer-related programs are included in the Integrated Strategy for Health Living and Chronic Disease
Canadian Breast Cancer Initiative - Community Capacity Building Initiative - Scheduled for 2008-09
Bovine Spongiform Encephalopathy (BSE) – Completed. Health Canada was the lead department.
Falls Prevention Initiative - No longer has program authority - ended in 2004.
National Immunization Strategy - Scheduled for 2007-08

(Note: some evaluation reports' due dates have changed from those planned in the 2006-07 Report on Plans and Priorities)

Table 12: Sustainable Development Strategy

Topic	Departmental Input
1. What are the key goals, objectives, and/or long-term targets of the SDS?	During 2006-07, the Agency was still contributing to the Health Canada Sustainable Development Strategy 2004-2007. Health Canada will be reporting on those goals and objectives. Under that Strategy, the Agency had one target, which was completed in 2005-2006. Also during 2006-07, as part of its planning process and to support the federal government’s sustainable development (SD) initiative, the Agency developed and tabled in Parliament two Sustainable Development Strategies: the first in August, to meet legislative obligations; and the second, in December to offer a more robust plan and to coordinate with some 30 other departments. During the development of the SDS, the Agency assessed how best to further incorporate SD principles and values into its policy and operations. The following SDS goals were identified: Incorporate SD considerations into the planning and implementation of Agency activities Ensure that the Agency conducts its operations in a sustainable manner. Build capacity to implement Goals 1 and 2.
2. How do your key goals, objectives, and/or long-term targets help achieve your department’s strategic outcomes?	The focus for 2006-07 was on exploring the link between sustainable development and public health. The Agency’s SD Strategy 2007-2010 states that SD cannot be achieved without a healthy population, and the health of the population cannot be maintained without a healthy environment. The SD Strategy, therefore, supports the Agency’s 2006-07 strategic outcome: ‘Healthier population by promoting health and preventing disease and injury’. The following objectives support the SDS goals: 1.1 Contribute to building healthy and sustainable communities 1.2 Improve the health status of Canadians by fostering preventive and collaborative approaches to SD among the Agency and its partners 2.1 Maximize the use of green procurement 2.2 Minimize the generation of hazardous waste in Agency-occupied facilities 2.3 Increase resource efficiencies in the operations of Agency buildings 3.1 Develop knowledge, commitment and action to implement SD approaches to health public policy 3.2 Develop and use the tools to support the achievement of Goal 1 and 2. 3.3. Establish management systems, roles and responsibilities, authorities and accountabilities to support SDS.
3. What were your targets for the reporting period?	The target for the reporting period was to meet the legislated requirement to table an SDS within two years of the establishment of the Public Health Agency of Canada. This target was met on August 16.
4. What is your progress to date?	The focus for 2006-07 was on establishing targets for the Agency’s first SD Strategy. In its full strategy, the Agency published 23 SD targets for the 2007-2010 reporting period.
5. What adjustments have you made, if any?	Development of the Agency’s first Strategy involved analysis of past targets from the former Population and Public Health Branch and of audit findings and expectations provided by the Commissioner of the Environment and Sustainable Development. The Agency’s second Strategy built upon the first Strategy by presenting a more comprehensive set of targets and by providing a management framework with performance indicators.

Table 13: Procurement and Contracting

Information on Procurement and Contracting can be found at http://www.tbs-sct.gc.ca/est-pre/estime.asp.

Table 14: Horizontal Initiatives

The Public Health Agency of Canada participates in the following horizontal initiatives:

Federal Initiative to address HIV/AIDS in Canada
Preparedness for Avian and Pandemic Influenza

Supplementary information on these horizontal initiatives can be found at http://www.tbs-sct.gc.ca/est-pre/estime.asp.

Table 15: Travel Policies

Information on the Agency’s travel policies can be found at http://www.tbs-sct.gc.ca/est-pre/estime.asp.

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Section III – Supplementary Information

Table 1: Comparison of Planned to Actual Spending (including Full-Time Equivalents)

Table 2: Resources by Program Activity

Table 3: Voted and Statutory Items

Table 4: Services Received Without Charge

Table 5: Sources of Respendable and Non-respendable Revenue

Table 6: Resource Requirements by Branch

Table 7-A: User Fees Act

Table 7-B: Policy on Service Standards for External Fees

Table 8: Details on Transfer Payment Programs (TPPs)

Table 9: Conditional Grants (Foundations)

Table 10: Financial Statements

Statement of Operations (unaudited)

Statement of Financial Position (unaudited)

Statement of Equity (unaudited)

Statement of Cash Flow (unaudited)

Notes to the Financial Statements (unaudited)

1. Authority and Objectives

2. Summary of significant accounting policies

3. Parliamentary Appropriations

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

(b) Appropriations provided and used:

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

4. Accounts receivable and advances

5. Tangible capital assets

Cost

Accumulated Amortization

Net Tangible Capital Assets

6. Employee benefits

(a) Pension benefits

(b) Severance benefits

7. Contractual Obligations

8. Related party transactions

(a) Services provided without charge

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

9. Comparative information

Table 11: Response to Parliamentary Committees, and Audits and Evaluations

Table 12: Sustainable Development Strategy

Table 13: Procurement and Contracting

Table 14: Horizontal Initiatives

Table 15: Travel Policies