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Financial Information

Library and Archives Canada Financial Performance Overview

Table 1: Comparison of Planned to Actual Spending (including FTEs)

($ thousands)	2004–2005 Actual	2005–2006 Actual	2006–2007
			Main Estimates	Planned Spending	Total Authorities	Total Actuals
1.1 Managing the disposition of the Government of Canada records of continuing value	12,465	12,315	12,180	14,684	12,281	10,881
1.2 Managing the documentary heritage of interest to Canada	70,270	68,554	68,068	87,330	70,030	65,102
1.3 Making the documentary heritage known and accessible for use	30,476	33,031	28,823	29,564	33,645	30,183
Total	113,211	113,900	109,071	131,578	115,956	106,166
Less: Non-Respendable revenue	291	422	N/A	38	N/A	247
Plus: Cost of services received without charge	41,972	43,377	N/A	43,627	N/A	44,539
Total Departmental Spending	154,892	156,855	N/A	175,243	N/A	150,458
Full Time Equivalents	1,147	1,128	N/A	1,165	N/A	1,126

1- Total Planned Spending includes $18,936 re-profiled to future years
2- Total Authorities includes $8,831 in frozen allotment

Table 2: Resources by Program Activity

2006–2007 ($ thousands)
Program Activity	Budgetary						Total
	Operating	Grants	Contributions and Other Transfer Payments	Total : Gross Budgetary Expenditures	Less : Respendable Revenue	Total : Net Budgetary Expenditures
1.1 Managing the disposition of the Government of Canada records of continuing value
Main Estimates	12,180	-	-	12,180	-	12,180	12,180
Planned Spending	14,684	-	-	14,684	-	14,684	14,684
Total Authorities	12,281	-	-	12	-	12,281	12,281
Actual Spending	10,881	-	-		-	10,881	10,881
1.2 Managing the documentary heritage of interest to Canada	10,881				-
Main Estimates	68,068	-	-	68,068	--	68,068	68,068
Planned Spending	87,330	-	-	87,330	-	87,330	87,330
Total Authorities	69,993	37	-	70,030	-	70,030	70,030
Actual Spending	65,065	37	-	65,102	-	65,102	65,102
1.3 Making the documentary heritage known and accessible for use
Main Estimates	27,597	-	1,776	29,373	550	28,823	28,823
Planned Spending	28,338	-	1,776	30,114	550	29,564	29,564
Total Authorities	31,960	-	2,235	34,195	550	33,645	33,645
Actual Spending	28,429	-	2,169	30,598	415	30,183	30,183

Table 3: Voted and Statutory Items

($ thousands )

Vote or Statutory Item	Truncated Vote  or Statutory Wording	2006–07
		Main  Estimates	Planned  Spending	Total  Authorities	Total Actuals
50	Program expenditures	97,430	119,937	104,623	94,906
(S)	Contributions to employee benefit plans	11,641	11,641	11,057	11,057
(S)	Spending of proceeds from the disposal of surplus Crown Assets	-	-	276	203
	Total	109,071	131,578	115,956	106,166

1- Total Planned Spending includes $18,936 re-profiled to future years
2- Total Authorities includes $8,831 in frozen allotment

Table 4: Services Received Without Charge

($ thousands)	2006–2007
Accommodation provided by Public Works and Government Services Canada	39,414
Contributions covering the employer's share of employees' insurance premiums and expenditures paid by the Treasury Board of Canada Secretariat (excluding revolving funds); employer's contribution to employees' insured benefits plans and associated expenditures paid by the Treasury Board of Canada Secretariat	5,066
Worker's compensation coverage provided by Human Resources and Social Development Canada	55
Salary and associated expenditures of legal services provided by Justice Canada	4
Total 2006–2007 Services received without charge	44,539

Table 5: Sources of Respendable and Non-Respendable Revenue

Respendable Revenue

($ thousands)	Actual 2004- 2005	Actual 2005- 2006	2006-2007
			Main Estimates	Planned Revenue	Total Authorities	Actual
Managing the documentary heritage of interest to Canada
Services Fees	355.1	-	-	-	-	-
Making the documentary heritage known and accessible for use
Services Fees	108.0	487.0	550.0	550.0	550.0	415.1
Total Respendable Revenue	463.1	487 .0	550.0	550.0	550.0	415.1

Non-Respendable Revenue

($ thousands)	Actual 2004-2005	Actual 2005-2006	2006-2007
			Main Estimates	Planned Revenue	Total Authorities	Actual
Managing the disposition of the Government of Canada records of continuing value
Refunds of previous years, expenditures	36.1	11.1	-	-	-	8.9
Adjustments to prior year's payables	11.3	15.1	-	-	-	6.9
Proceeds from the disposal of surplus Crown Assets	31.8	23.1	-	-	106.4	12.8
Miscellaneous revenues	-	4.6	-	4.6	-	4.5
Other adjustment	-	1.7	-	-	-	(0.3)
Managing the documentary heritage of interest to Canada
Refunds of previous years, expenditures	19.4	54.3	-	-	-	30.7
Adjustments to prior year's payables	111.6	76.7	-	-	-	19.8
Proceeds from the disposal of surplus Crown Assets	49.0	116.4	-	-	129.0	75.1
Miscellaneous revenues	-	23.3	-	25.4	-	25.4
Other adjustment	(56.0)	8.3	-	-	-	(1.4)
Making the documentary heritage known and accessible for use
Refunds of previous years, expenditures	36.3	13.2	-	-	-	24.8
Adjustments to prior year's payables	29.2	24.4	-	-	-	6.1
Proceeds from the disposal of surplus Crown Assets	13.0	37.1	-	-	40.4	24.9
Miscellaneous revenues	24.3	10.1	-	8.0	-	8.7
Other adjustment	(14.6)	2.7		-	-	(0.4)
Total non-respendable revenue	291.4	422.10	-	38.0	275.8	246.5

Table 6: Resource Requirements by Branch or Sector

($ thousands)	Managing the disposition of the Government of Canada records of continuing value	Managing the documentary heritage of interest to Canada	Making the documentary heritage known and accessible for use	Total
Documentary Heritage Collection
Planned Spending	0	56,424	0	56,424
Actual Spending	0	37,548	343	37,891
Programs & Services
Planned Spending	0	0	18,049	18,049
Actual Spending	0	0	17,961	17,961
Government Information Management Office
Planned Spending	10,188	3,271	0	13,459
Actual Spending	7,037	3,165	66	10,269
Strategic Office
Planned Spending	371	2,066	2,424	4,861
Actual Spending	462	2,619	2,519	5,601
Information technology Services
Planned Spending	1,124	8,809	3,622	13,555
Actual Spending	1,046	8,730	5,206	14,983
Corporate Management
Planned Spending	2,712	15,142	4,962	22,816
Actual Spending	2,070	11,557	3,622	17,249
Communications
Planned Spending	289	1,618	507	2,414
Actual Spending	265	1,482	465	2,212
Total Planned Spending	14,684	87,330	29,564	131,578
Total Actual Spending	10,881	65,102	30,183	106,166

1- Total Planned Spending includes $18,936 re-profiled to future years
2- Total Authorities includes $8,831 in frozen allotment

Table 7-A: 2006-2007 User Fees Reporting – User Fees Act

A. User Fee	Fee Type	Fee Setting Authority	Date Last Modified	2006-07					Planning Years
				Forecast Revenue ($000)	Actual Revenue ($000)	Full Cost ($000)	Performance Standard	Performance Results	Fiscal Year	Forecast Revenue ($000)	Estimated Full Cost ($000)
Copies of : textual documents and  microforms, 105-mm microfiches of maps and architectural drawings, documents and archival records created in electronic formats by LAC staff	(O)	The Department of Canadian Heritage Act, sections 8 to 12	Published in Canada Gazette, Part 1, August 6, 2005	408.8	274.0	2,150.8	Regular orders are processed within 30 days of receipt. For rush service see section C.	95%	2007-08 2007-09 2008-10	386.7 386.7 386.7	2,204.5 2,259.7 2,316.1
Copies of documents on microform produced by clients themselves	(O)	Same as above	Same as above	51.9	47.7	154.0	Client Self-Service	100%	2007-08 2007-09 2008-10	56.4 56.4 56.4	157.9 161.8 165.8
Service fee for reproduction of documents produced by private sector suppliers	(O)	Same as above	Same as above	56.0	59.8	703.9	Upon receipt of request: For copied material: approx. 6 weeks For uncopied material: approx. 10-12 weeks	100% for the 6 weeks and 100% for the 10-12 weeks.	2007-08 2007-09 2008-10	67.0 67.0 67.0	721.5 739.5 758.5
Postage and handling	(O)	Same as above	Same as above	27.3	28.1	28.1	Not applicable		2007-08 2007-09 2008-10	30.4 30.4 30.4	28.8 29.5 30.3
Sub-total				544.0	409.8	3,036.8			2007-08 2007-09 2008-10	540.5 540.5 540.5	3,112.7 3,190.5 3,270.2
Fees charged for the processing of access requests filed under the Access to Information Act	(O)	Access to Information Act	1992	6.0	8.9	5,657.7	30 days, or within allowable time extensions	Privacy Act : 24.6% of the formal requests were completed on time Access to Information Act : 37.0% of the formal requests were completed on time	2007-08 2007-09 2008-10	9.5 9.5 9.5	5,799.1 5,944.1 6,092.7
Total (O)				550.0	418.5	8,694.5			2006-08 2007-09 2008-10	550.0 550.0 550.0	8,911.9 9,134.9 9,362.9
B. Date Last Modified: N/A
C. Other Information: The Web site www.collectionscanada.ca/archivianet contains further information regarding our services, prices and performance standards. Rush service Copies of textual documents and microforms by LAC staff Copies of 105-mm microfiches, maps and architectural drawings produced by LAC staff Please note that written requests cannot be processed in less than 5 working days due to the following factors: registration of requests; delay of 24 hours for delivery of documents from off-site storage; identification of requested documents by staff; special handling of archival documents. Processing times apply once orders have been received in our services.   Please note that written requests cannot be processed in less than 7 working days due to the following factors: registration of requests; delay of 24 hours for delivery of documents from off-site storage; identification of requested documents by staff. Processing times apply once orders have been received in our services. Number of copies Response time Number of copies Response time   In-person request Written request   In-person request Written request 100 Maximum of 100 copies per 24 hours 5 working days 50 Maximum of 50 copies per 24 hours 7 working days 500 – 999 5 working days 7 working days 250 – 499 5 to 10 working days 7 to 10 working days 1,000 – 1,999 10 working days 500 – 749 10 to 15 working days 2,000 – 2,999 15 working days 750 – 999 15 to 20 working days 3,000 – 3,999 20 working days 1,000 – 1,249 20 to 25 working days 4,000 – 4,999 25 working days 1,250 – 1,500 25 to 30 working days 5,000 – 6,000 30 working days

Table 7-B: 2006–2007 Policy on Service Standards for External Fees

A. External Fee	Service Standard	Performance Result	Stakeholder Consultation
Copies of : textual documents and  microforms, 105-mm microfiches of maps and architectural drawings, documents and archival records created in electronic formats  by LAC staff	Regular orders are processed within 30 days of receipt. For rush service see Table 7-A Section C.	The processing standard of 30 days has been met at 95%. The processing standard for the rush service has been met at 100%.	There was no stakeholder consultation done, however, a comment card was developed for all LAC clients' services and it will be implemented in April 2007. In March 2006, the online order form was introduced to facilitate the ordering of copies for clients.  For the first year of usage, we have noticed that 40% of the orders we now receive are sent electronically. For this year, approximately 900 clients obtained copies using their own digital camera as part of the self-serve digital copying service.
Copies of documents on microform produced by clients themselves.	N/A	Clients serve themselves. They pick-up the microforms from the shelf and make their own copies.	There was no stakeholder consultation done, however, a comment card was developed for all LAC clients' services and it will be implemented in April 2007. The two self-serve microform rooms were merged in October 2006.  Clients now have access to a larger pool of microform readers and microform readers/printers/scanners.  It has reduced by 90% the limitation on the use of these machines.
Service fee for reproduction of documents produced by private sector suppliers.	Upon receipt of request: for copied material: approx. 6 weeks; for uncopied material: approx. 10 -12 weeks.	The processing standard of 6 weeks has been met at 100% and the processing standard of  10 to 12 weeks has been met at 100%.	There was no stakeholder consultation done, however, a comment card was developed for all LAC clients' services and it will be implemented in April 2007. In March 2006, the online order form was introduced to facilitate the ordering of copies for clients.  For the first year of usage, we have noticed that 40% of the orders we now receive are sent electronically. For this year, approximately 900 clients obtained copies using their own digital camera as part of the self-serve digital copying service.

LIBRARY AND ARCHIVES CANADA

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2007 and all information contained in these statements rests with departmental management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

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

Management maintains 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. 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 divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the department.

The financial statements of the department have not been audited.

Ian E. Wilson Librarian and Archivist of Canada Date August 9th 2007

Mark Melanson, CGA Senior Financial Officer Date August 9th 2007

LIBRARY AND ARCHIVES CANADA
Statement of Operations (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

	2007				2006
	Managing Documentary Heritage	Documentary Heritage Known and Accessible	Managing Disposal GOC Records	Total	Total
Transfer payments	37	2,155	0	2,192	2,988
Operating expenses
Salary and employee benefits	51,146	20,417	8,501	80,064	84,042
Accomodation	26,407	8,277	4,730	39,414	38,299
Professional and special services	5,543	2,480	1,474	9,497	12,546
Repair and maintenance	2,597	981	414	3,992	5,279
Amortization of tangible capital assets	2,105	1,031	208	3,344	3,444
Utilities, materials and supplies	2,571	482	149	3,202	3,902
Communication services	1,048	755	245	2,048	2,527
Rental costs	457	1,188	104	1,749	1,217
Acquisition of machinery and equipment	982	562	181	1,725	1,813
Travel	807	373	209	1,389	1,372
Loss on disposal and write-down of tangible assets	691	230	118	1,039	29
Other	364	146	70	580	584
Total operating expenses	94,718	36,922	16,403	148,043	155,054
Total expenses	94,755	39,077	16,403	150,235	158,042
Revenues
Sales of goods and information products	(2)	390		388	476
Gain on disposal of non-capital assets	74	23	13	110	176
Other	25	37	4	66	62
Total revenues	97	450	17	564	714
Net cost of operations	94,658	38,627	16,386	149,671	157,328

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

LIBRARY AND ARCHIVES CANADA
Statement of Financial Position (Unaudited)
As at March 31
(in thousands of dollars)

	2007	2006	Adjust here for Rounding 2007	Adjust here for Rounding 2006
Assets Financial Assets
Accounts receivable and advances (note 4)	985	758	0
Total Financial Assets	985	758
Non-Financial Assets
Prepaid expenses	18	66
Tangible capital assets (note 5)	28,558	28,115
Collections (note 6)	1	1
Total Non-Financial Assets	28,577	28,182
TOTAL	29,562	28,940
Liabilities and Equity of Canada Liabilities
Accounts payable and accrued liabilities	9,108	11,945	(1)
Vacation pay and compensatory leave	6,876	6,683
Deferred revenue (note 7)	829	832		(1)
Employee severance benefits (note 8)	13,239	13,842
	30,052	33,302
Equity of Canada	(490)	(4,362)
TOTAL	29,562	28,940
The accompanying notes are an integral part of the financial statements.
Variance	0	0

LIBRARY AND ARCHIVES CANADA
Statement of Equity of Canada (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

	2007	2006
Equity of Canada, beginning of year	(4,362)	(4,088)
Net cost of operations	(149,671)	(157,328)
Current year appropriations used (note 3)	106,166	113,900
Revenue not available for spending (note 3)	(147)	(231)
Change in net position in the Consolidated Revenue Fund (note 3)	2,985	(152)
Services received without charge from other government departments (note 9)	44,539	43,537
Equity of Canada, end of year	(490)	(4,362)

The accompanying notes are an integral part of the financial statements.  The reader is referred in particular to Note 6 on the collections.

LIBRARY AND ARCHIVES CANADA
Statement of Cash Flow (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

	2007	2006
Operating activities
Net costs of operations	149,671	157,328
Non-cash items
Amortization of tangible capital assets	(3,344)	(3,444)
(Loss) Gain on disposal and write-down of tangible capital assets	(1,039)	(29)
Services provided without charge from other government department	(44,539)	(43,537)
Variations in Statement of Financial Position
Increase (decrease) in accounts receivable and advances	227	(1,646)
Increase (decrease) in prepaid expenses	(48)	64
(Increase) decrease in liabilities	3,250	(8)
Cash used by operating activities	104,178	108,728
Capital investment activities
Acquisitions of tangible capital assets	4,826	4,858
Proceeds from disposal of tangible capital assets	-	(1)
Cash used by capital investment activities	4,826	4,857
Financing activities
Net cash provided by Government of Canada	(109,004)	(113,517)
Net Cash Used	-	68

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

LIBRARY AND ARCHIVES CANADA

Notes to the Financial Statements (Unaudited)

1. Authority and objectives

Library and Archives Canada is a department within the Government of Canada and was established on May 24, 2004 as a result of the amalgamation of the former National Library of Canada and National Archives of Canada. Library and Archives Canada's role was confirmed in the 2004 Library and Archives of Canada Act. The Act assigns discretionary power to the Librarian and Archivist of Canada in the attainment of Library and Archives Canada's objects. Under the Act, no record under the control of a government or ministerial institution may be destroyed prior to receiving consent from the Librarian and Archivist of Canada and those records considered to be of historic or archival importance to the Librarian and Archivist of Canada, shall be transferred to the care and control of the Librarian and Archivist of Canada.

Library and Archives Canada is considered a Schedule I.1 organization within the Financial Administration Act and reports to Parliament through the Minister of Canadian Heritage.

The mandate of Library and Archives Canada is to preserve the documentary heritage of Canada for the benefit of present and future generations; to serve as a source of enduring knowledge accessible to all, contributing to the cultural, social and economic advancement of Canada as a free and democratic society; to facilitate in Canada cooperation among the communities involved in the acquisition, preservation and diffusion of knowledge; and to serve as the continuing memory of the Government of Canada and its institutions.

The Documentary Heritage Collection Sector ensures that Canada's documentary heritage is collected, safeguarded and organized for current and future use. Its functions are the development, organization, and care of the collections. All collections will be developed, managed and preserved under the auspices of the Documentary Heritage Collection Sector. The Programs and Services Sector increases awareness of, access to, and use and understanding of, Canada's documentary heritage. Its two functions are delivery of services in response to client demand of all types and via all channels; and delivery of programs to promote knowledge and understanding of Canada's documentary heritage. The former is responsive to demand; the latter is proactive, anticipating the information needs of Canadians. Combined, they are the important means through which LAC delivers its mandate to make known Canada's documentary heritae. The Corporate Management and Government Records Sector supports federal institutions in the management of information and sound recordkeeping. Its primary functions include IM Strategies, IM Solutions, and IM Services.

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
Library and Archives Canada is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to Library and Archives Canada do not parallel financial reporting according to gererally 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 for Parliament. Note 3 provides a high-level reconciliation between the two bases of reporting.

(b) Net Cash Provided by Government
Library and Archives Canada operates within the Consolidated Revenue Fund (CRF). The CRF is administered by the Receiver General for Canada. All cash received by Library and Archives Canada is deposited to the CRF and all cash disbursements made by Library and Archives Canada are paid from the CRF. Net cash provided by Governement 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
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 department. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Revenues
i) Sales of goods and information products are revenues from regulatory fees and are recognized in the accounts based on the services provided in the year.

ii) Funds received from external parties for specified purposes are recorded upon receipt as deferred revenues. These revenues are recognized in the period in which the related expenses are incurred.

iii) Other 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 the accrual basis:
i) 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;

ii) Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement;

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

iv) 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
i) Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. Library and Archives Canada's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require Library and Archives Canada to make contributions for any actuarial deficiencies of the Plan.

ii) 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 receivables and advances
Accounts receivables and advances are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

(h) Tangible capital assets
All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. The department does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value.

In Fiscal Year 2006-07, Library and Archives Canada raised its threshold for determination of capital assets from $3,500 to $10,000.

Amortization is done on a straight-line basis over the estimated useful lives of the assets as follows:

Asset Class	Amortization Period
Machinery and equipment	5-15 years
Informatics hardware	3-10 years
Informatics purchased and developed software	2-7 years
Other equipment, including furniture	5-10 years
Motor vehicles	3-15 years
Software under development	Once in service, in accordance with asset type

(i) Collections
The collections of Library and Archives Canada are presented on the Statement of Financial Position at a nominal value of $1,000. Items purchased for the collections are recorded as an expense in the year of acquisition. Items collected from the Federal government are not recorded on the Statement of Financial Position.

(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

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

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

	2007	2006
	(in thousands of dollars)
Net cost of operations	149,671	157,328
Adjustments for items affecting net cost of operations but not affecting appropriations: Add(Less):
Services provided without charge	(44,539)	(43,537)
Amortization of tangible capital assets	(3,344)	(3,444)
Employee severance benefits	603	(1,399)
Vacation pay and compensatory leave	(200)	(325)
Reversal of previous year expenses	97	195
Revenue not available for spending	147	231
(Loss) gain on disposal and write-down of tangible capital assets	(1,039)	(29)
Other	(74)	(37)
	(48,349)	(48,345)
Adjustments for items not affecting net cost of operations but affecting appropriations Add(Less):
Acquisition of tangible capital assets	4,826	4,858
Change in prepaid expense	18	64
Other	-	(5)
	4,844	4,917
Current year appropriations used	106,166	113,900

(b) Appropriations provided and used

	2007	2006
	(in thousands of dollars)
Operating expenditures - Vote 50	104,626	103,135
Statutory amounts	11,332	12,443
Appropriations available for use	115,958	115,578
Less:
Lapsed appropriations: operating	(9,717)	(1,515)
Appropriations available for future years	(73)	(163)
Refunds of amounts credited to revenues in previous years	(2)	-
Current year appropriations used	106,166	113,900

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

	2006	2005
	(in thousands of dollars)
Net cash provided by Government	109,004	113,517
Revenue not available for spending	147	231
Change in net position in the Consolidated Revenue Fund
Variation in accounts receivable and advances	(227)	1,646
Variation in accounts payable and accrued liabilities	(2,837)	(1,699)
Variation in deferred revenue	(3)	43
Other adjustments	82	162
	(2,985)	152
Current year appropriations used	106,166	113,900

4. Accounts receivable and advances

The following table presents details of accounts receivable and advances:

	2007	2006
	(in thousands of dollars)
Receivable from other Federal Government Departments and agencies	910	616
Receivable from external parties	61	132
Employee advances	10	10
Total	981	758

5. Tangible capital assets

Cost (in thousands of dollars)	Opening Balance	Acquisitions	Reclassification of Assets	Disposals and write-offs	Closing Balance
Machinery and equipment	2,235	-	(1,221)	(221)	793
Informatics hardware	9,091	1,037	(1,429)	(1,232)	7,467
Informatics purchased and developed software	8,293	973	1,118	(112)	10,272
Other equipment	29,622	172	1,177	(1,584)	29,387
Motor vehicles	559	-	(110)	-	449
Software under development	1,924	2,644	(60)	-	4,508
	51,724	4,826	(525)	(3,149)	52,876

Accumulated amortization (in thousands of dollars)	Opening Balance	Amortization	Reclassification of Assets	Disposals and write-offs	Closing Balance
Machinery and equipment	913	36	(199)	(140)	610
Informatics hardware	5,709	912	(546)	(961)	5,114
Informatics purchased and developed software	3,235	1,276	30	(99)	4,442
Other equipment	13,425	1,081	255	(910)	13,851
Motor vehicles	327	39	(65)	-	301
	23,609	3,344	(525)	(2,110)	24,318

Net book value (in thousands of dollars)	2007	2006
Machinery and equipment	183	1,322
Informatics hardware	2,353	3,382
Informatics purchased and developed software	5,830	5,058
Other equipment	15,536	16,197
Motor vehicles	148	232
Software under development	4,508	1,924
	28,558	28,115

Amortization expense for the year ended March 31, 2007 is $3,344 ($3,444 in 2006)

6. Collections

Library and Archives Canada preserves the collective memory of the nation and of the Government of Canada and contributes to the protection of rights and the enhancement of a sense of national identity.

Although not capitalized like other assets such as buildings or equipment, these irreplaceable treasures have inestimable legal, evidentiary, cultural and, indeed, monetary value for Canadians now and for generations to come. These include documentary material transferred at no charge from government departments, publications received through Legal Deposit, materials purchased and donated materials for which tax receipts may have been issued.

7. Deferred revenue

Deferred revenue represents the balance at year-end of unearned revenue stemming from donations. Some of these donations are restricted for specific purposes. Revenue is recognized each year in the amount of expenses incurred for the purposes for which the donations were received.

	2007	2006
	(in thousands of dollars)
Balance, beginning of year	832	856
Add amount received from external organizations	1,177	965
Less revenues recognized in the year	(1,180)	(989)
Balance, end of year	829	832

8. Employee benefits

a) Pension benefits: Library and Archives Canada'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 Library and Archives Canada contribute to the cost of the Plan. The 2006-07 expense amounts to $8,148,649 ($9,053,415 in 2005-06), which represents approximately 2.2 (2.6 in 2005-06) time the contributions by employees.

Library and Archives Canada'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: Library and Archives Canada 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:

	2007	2006
	(in thousands of dollars)
Accrued benefit obligation, beginning of year	13,842	12,443
Expense for the year	915	3,528
Benefits paid during the year	(1,519)	(2,128)
Accrued benefit obligation, end of year	13,238	13,843

9. Related party transactions

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

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

(in thousands of dollars)	2007	2006
Accommodations	39,414	38,299
Employer Contribution to Health and Dental Insurance	5,066	5,179
Employee compensation payments	55	52
Legal services	4	7
	44,539	43,537

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 (PWGSC) and audit services provided by the Office of the Auditor General, are not included as an expense in Library and Archives Canada's Statement of Operations. Similarly, Library and Archives Canada provides certain storage and reference services without charge to other Government of Canada departments, agencies and Crown corporations.

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

(in thousands of dollars)	2007	2006
Accounts receivable with other government departments and agencies	675	219
Accounts payable to other government departments and agencies	876	1,452

10. Comparative information

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

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