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Section IV: Other Items of Interest

Continuing Efforts to Reduce Response Burden

Statistics Canada is strongly committed to reducing the survey burden it places on businesses while maintaining high quality, timely and relevant data. Our ongoing objective is to remove as many businesses from our surveys as possible through greater use of administrative data. Complete elimination remains a challenge as some non-financial variables, particularly in certain industries, are less suitable to estimation from administrative sources.  While we are unlikely in the near term to repeat the magnitude of burden reduction made over the last years, the agency continues to research methodologies that would permit us to extend the use of administrative data for more complex businesses. Statistics Canada is one of the fourteen key federal departments and agencies that is participating in the Paperwork Burden Reduction Initiative (PBRI) and will be pursuing opportunities to simplify and further reduce respondent burden. Progress made on this initiative will be reported on next year.

The estimate of response burden hours is calculated annually using the frequency of each survey, the average time to complete the questionnaires, and the number of surveyed respondents.  In 2006, total response burden hours remained unchanged from 2005. Note that the quinquennial Census of Agriculture is excluded from the calculations. 

While absolute response burden hours have declined by 24% since 1991, over the same period the average burden placed on each Canadian business has declined 39%. The graph below displays the indexed hours of total response burden divided by the estimated total number of Canadian businesses.

The Electronic Data Reporting (EDR) Initiative

Statistics Canada embarked on Electronic Data Reporting (EDR) six years ago. A system was put in place enabling respondents to securely respond to questionnaires through the Internet, along with a Data Return Facility (DRF) allowing selected Statistics Canada partners to provide administrative files trough secure File Transfer Protocol (FTP).

The infrastructure and software supporting this mode of collection are reaching their replacement time.

Last year, a review of the existing system was initiated, along with a detailed documentation of Statistics Canada electronic collection business requirements. This wide-ranging activity resulted in the identification of two core services: (i) an e-Questionnaire service (based on the e-form technology, flexible to accommodate Statistics Canada evolving and diverse survey needs); (ii) an e-File Transfer service (based on the Managed-File-Transfer technology, able to support transfer of large data files using a web-based, no install application). An option analysis revealed the availability of Commercial-Of-The-Shelf (COTS) software aligning well with both identified services. A number of pilots (internal and with external partners) are scheduled over the fall of 2007.

Other Initiatives

Census Archival Project

In 2005, the Government amended the confidentiality provisions of the Statistics Act with respect to census records. In general terms, the information contained in the returns of each census is now placed under the care and control of Library and Archives Canada ninety-two years after the census is taken (the person to whom the information relates must consent, at the time of the census, to this release for the 2006 and subsequent censuses, but not for prior censuses).

Microfilm is the preferred storage medium of Library and Archives Canada because of its extremely long lifespan; it is less vulnerable to the consequences of rapid technological change and finally, it is economical. Census questionnaires up to and including 1986 had previously been microfilmed, but not subsequent Censuses. So Statistics Canada began last summer a full-scale archival of the 1991, 1996 and 2001 Censuses of Population questionnaires. The goal is to microfilm and index over 30 million questionnaires and 430 million pages of these important historical snap shots of Canada's population.

The timing of the project was influenced in part by the gradual deterioration of the lightweight paper upon which the questionnaires were printed. Of primary concern were the 1991 documents, which have been in storage for 16 years; there was evidence of degradation due to environmental factors, such as mould.

The work itself is being carried out on Statistics Canada's premises over a 2 1/2 year period. The reduced level of security risk that arises from on-site work is an important consideration, as confidentiality is a core priority for us. All aspects of archival work are being undertaken for Census years 1991 and 1996. Processing begins in our high-speed scanning operation where each Census questionnaire is imaged and the image is sent to our new processing lab where they are microfilmed and developed. For 2001 however, only the microfilming stage is needed. In 2001, census questionnaires were imaged on arrival at head office to facilitate processing activities allowing all authorized staff access to the questionnaires with the click of a button.

The census archival project has been fully underway since November 2006, during which time the scanning and microfilm operations have been functioning on day and evening shifts. The accomplishments have been significant and include completion of 2001 microfilming and 1991 imaging. Currently, imaging of 1996 is underway, on-schedule and, under the current plan is expected to be completed by December of this year. Microfilming of 1991 will be complete this fiscal year with 1996 microfilming scheduled for fiscal 2008-2009.

Findings of the Auditor General on the Quality and Reporting of Surveys

In November 2006, the Office of the Auditor General presented its annual report to Parliament.  Chapter 3 Large Information Technology Projects examined a sample of large IT projects from four perspectives: governance, business case, organizational capacity and project management.  The 2006 Census Online was one of the seven projects included in the sample.  This Internet system provided to Canadian households gave Canadians the option of completing their 2006 census questionnaires electronically using the Internet to submit them to Statistics Canada securely and confidentially.  The 2006 Census Online met all of the audit criteria for a well managed project.  Among the seven projects only another one met all four audit criteria. The OAG's report states: "Statistics Canada thoroughly and successfully assessed the Census 2006 Online project and built its capacity, and that of its partners, to complete the project. By having sound project management and an effective governance framework, Statistics Canada showed good project management for the 2006 Census Online project, which met its requirements on time and within budget."

In August 2006, the Internal Audit Committee approved the report of the "Audit of Central Regional Office (Toronto) Administrative Processes.  The objective of this internal audit was to assess the degree of compliance of selected financial and human resources management and other general administrative processes and practices with relevant central agency and departmental regulations, policies and directives. The internal audit team was satisfied that the areas examined were mainly in compliance.  In a few areas, a moderate level of risk to the organization was identified.  Managers prepared an action plan to address all recommendations of the report. Internal audit will monitor the progress of the plan.

Internal Audit carried out most of the conduct phase of the Audit of 2006 Census related to selected security, administrative and quality practices. In June and July 2006, the audit tem visited the three census help-line sites and eight local census offices. Findings of this audit will be reported in 2007-2008.

Management Accountability Framework Assessment

Statistics Canada has strived over the past years to integrate it's management practices and processes.  This approach has focused on the integration of  performance monitoring,  risks assessment and priority setting  and has contributed to a sound program-based management of the Department (which by definition and the make-up of its workforce is highly integrated and professional).  This was recently confirmed with the department's Management Accountability Framework assessment where out of the 18 indicators 9 surpassed the federal government norm, 0 were below the norm and 3 indicators called for opportunity for improvement (which were the department's lowest received rating).

Status Report on the Service Improvement Initiative (SII)

Ongoing Monitoring and Reporting of Client Satisfaction

Statistics Canada remains a strong supporter of the SII. Client service standards and research have long been reflected in Statistics Canada's management philosophy and operational practices. The Department contributed its expertise to the research and development of SII Common Measurements Tool (CMT). All divisions in the Department are required to conduct client-satisfaction research in their regular program reviews. Client-feedback research is a key element of survey-collection activities, since relations with survey respondents are a key determinant of data quality. As increasing numbers of Statistics Canada surveys offer an electronic reporting option, feedback-research activities have also increased. Past research includes research addressing respondent expectations and potential concerns, pre-testing of survey prototypes, feedback collected by client-support services, as well as satisfaction research conducted following deployment of a survey.

The Internet has emerged as the primary distribution channel for the Department's data and information. Data quality standards are applied to all information published electronically. Service standards are posted publicly and are closely monitored by the Department, including the measurement of response burden for survey collection. To further the 2006 review of its standards of service to the public, the Department developed a new Client Relationship Management System in 2006-2007 to enhance client service delivery and facilitate the measurement of service standards. Information sessions were also conducted with program areas during the year to further improve compliance with service standards and share best practices.

Each year, the Department conducts an extensive client-service survey among all internet users and clients, in which interests, expectations and satisfaction levels are measured according to principles reflected in the CMT. Statistics Canada has increased usability testing for products and services. Recently, web research led to a major re-design of the Statistics Canada Internet site. Canadians requiring Statistics Canada information are served through many program areas and centralized service groups. Due to the number and diversity of products, services, and service channels utilized by Statistics Canada, methodologies used to determine client satisfaction are quite diverse. While this diversity precludes aggregate-level satisfaction measurements, the various research activities all share common research dimensions, addressing perceptions of data quality, timeliness, ease-of-access, and general satisfaction. Given the length of time that Statistics Canada has been conducting client satisfaction surveys, program areas can now analyse their progress longitudinally.
Stakeholder relations involve ongoing consultations with a wide variety of groups and organizations for which Statistics Canada's survey-taking operations and data-publishing activities have particular interest or impact. These consultations include the Policy Research Initiative, the National Statistics Council, 13 ongoing Advisory and six subject-matter committees, a Federal-Provincial Consultative Council on Statistical Policy, and extensive consultation programs with a wide range of communities to plan Census content and outputs. The 2006 Census consultation on the proposed product line involved high levels of participation of key stakeholders and data users. Continuous client-feedback mechanisms focus on the scope, value and relevance of Statistics Canada data, and the manner in which those data are collected and made available to the public.

As more and more Canadians utilize the Internet for accessing government services as well as participating in consultations with federal departments, Statistics Canada expects consultations with its stakeholders will increasingly be conducted on line, provided that consultations conducted electronically can be broadly accessed and are representative of communities of interest.  In-person meetings, vital to the consultation process, ensure accessibility and will continue to complement the on line approach.

Renewed Standards of Service to the Public

On January 1, 2007, Statistics Canada implemented its renewed Standards of Service to the Public http://www.statcan.ca/english/about/servic.htm . The standards are a true commitment on the part of the Agency and its employees to continue to serve the public with an unwavering dedication to deliver on what we promise: prompt, reliable, courteous and fair service. The service standards address the requirements of the Government of Canada's Policy on Service Standards for External Fees.

The revised standards were developed through an assessment of client service practices and compliance levels with existing service standards within Statistics Canada; a review of standards in other national statistical agencies; and were informed by the results of the Citizens First survey series on the publics' service level expectations from government.

Service Improvement Initiative Award

On January 19th,  2007, the Government On-Line and Service Improvement Initiative Awards and Recognition Event recognized an improvement in the Agency's overall client-satisfaction measurements that exceeded targets established by the Treasury Board Secretariat.

The federal government's Service Improvement Initiative, introduced in 2000, directed departments to establish standards for service delivery, undertake surveys to measure client-satisfaction levels, and report on levels measured in a number of different corporate submissions to Treasury Board.  Targets were set calling on departments to improve their client-satisfaction levels by at least 10% by 2005. The Treasury Board Secretariat engaged the independent services of the Institute of Citizen-Centred Services to conduct national, client-satisfaction surveys. In the Institute's benchmark Citizen's First Survey conducted in 1998, Statistics Canada received a 55% 'satisfaction with service quality' rating (2,900 Canadians having completed the survey). In the Institute's 2005 survey, "based on a representative sample of 6,994 Canadians in every province and territory," that rating rose to 62%—an increase of almost 13%, and the basis for the award presented to the Agency.

Management Initiatives

Focus on Renewal – ensuring a sustainable, vibrant and dynamic workforce

To ensure that Statistics Canada will retain a highly qualified and sustainable workforce, the Agency, many years ago, set out a Comprehensive Human Resources Management Strategy, to which this past year it added further mechanisms targeted at renewal and re-engineering:

• A new Recruitment Model that features targeted outreach and marketing, as well as encourages co-op programs, and bridging for students was introduced and a significant level of new recruits were hired over this period.  The Model enables managers to have continuous access to a supply of potential recruits, rather than having access only after the traditional annual recruitment drive.

• To address the risk of potential knowledge gaps in subject matter disciplines, the Agency introduced 'communities of practice' to the apprenticeship programs and aligned the development plans of new recruits within these 'communities of practice'. This change facilitates rotations, increases development opportunities and increases knowledge transfer among related program areas.

• The Agency also introduced an innovative Staffing Model to expedite staffing.  The Model provides continuously replenished pools of qualified staff for mid-level generic positions within the ES, CS, MA, SI and CR groups via corporately staffed pools.  Steps have been taken to use standardized assessment criteria and assessment tools that, where appropriate, are portable from one selection process to another. Collective Staffing Principles are being articulated and communicated to managers.

• Human Resources planning has been fully integrated with business planning at the corporate level for some time. As part of a broader service improvement program, a new initiative has been launched to provide line managers with key information and dedicated advisory services to enhance strategic HR planning at the local level.

• The Agency's Performance Management Program has undergone significant improvement resulting in a more structured approach and enhanced monitoring at the individual level.  Two new policies have been articulated, one on setting objectives and the other on dealing with unsatisfactory performance.  In addition, the Agency has launched a web based toolkit to assist managers in managing performance.

Legislated Requirements for Statistics Canada

In addition to the Statistics Act, the following federal acts give the Chief Statistician or Statistics Canada responsibility for the collection or provision of specific information:

Alberta Natural Resources Act	1930, c.3, as amended
Bank Act	R.S.C., 1991, c. B-1
Canada Council for the Arts Act	R.S.C., 1985, c. C-2
Canada Elections Act	S.C., 2000, c. 9
Canadian Pension Plan Act	R.S.C., 1985, c. C-8
Canadian Pension Plan Investment Board Act	1997, c. 40
Canada Student Financial Assistance Act	1994, c. 28
Canada Student Loans Act	R.S.C., 1985, c. S-23
Canada Transportation Act	1996, c.10, as amended
Canadian Ownership and Control Determination Act	R.S.C., 1985, c. C-20
Children of Deceased Veterans Education Assistance Act	R.S.C., 1985, c. C-28
Competition Act	R.S.C., 1985, c. C-34
Constitutional Act	1867
Constitutional Amendments	1996, c. 1, as amended
Corporations Returns Act	R.S.C., 1985, c. C-43
Customs Act	R.S.C., 1985, c. 1 (2 Supp.)
Department of Health Act	1996, c. 8
Electoral Boundaries Readjustment Act	R.S.C., 1985, c. E-3
Electoral Boundaries Readjustment Suspension Act	1994, c. 19
Employment Insurance Act	1996, c. 23, as amended
Energy Efficiency Act	1992, c. 36, as amended
Energy Monitoring Act	R.S.C., 1985, c. E-8, as amended
Excise Tax Act	R.S.C, 1985, c. E-15 as amended
Federal-Provincial Fiscal Arrangements Act	R.S.C, 1985, c. F-8, as amended
Funding for diagnostic and medical equipment Act	2005, c. 11, s. 7
Governor Generals Act	R.S.C, 1985, c. G-9, as amended
Income Tax Act	R.S.C., 1985, c. 1 (5th Supp.)
Industrial and Regional Development Act	R.S.C, 1985, c. I-8, as amended
Judges Act	R.S.C., 1985, c. J-1, as amended
Marine Liability Act	R.S.C., 2001, c. 6, as amended
Northern Pipeline Act	R.S., 1985, c. N-26, as amended
NS, Newfoundland & Labrador Additional Fiscal Equalization Offset Payments Act	2005, c. 30 , s. 85
Nuclear Fuel Waste Act	R.S.C., 2002, c. 23
Old Age Security Act	R.S.C., 1985, c. O-9, as amended
Patent Act	R.S.C, 1985, c. P-4, as amended
Payments in Lieu of Taxes Act	R.S.C, 1985, c. M-13, as amended
Pension Act	R.S.C, 1985, c. P-6, as amended
Pension Benefits Standards Act	R.C.S. 1985, c. 32 (2nd Supp.)
Provincial Subsidies Act	R.S.C, 1985, c. P-26, as amended
Railway Relocation and Crossing Act	R.S.C, 1985, c. R-4, as amended
Representation Act	R.S.C., 1986, c. 8
Salaries Act	R.S.C, 1985, c. S-3.01, as amended
Supplementary Retirement Benefits Act	R.S.C, 1985, c. S-24, as amended
Telecommunications Act	1993, c. 38, as amended
War Veterans Allowance Act	R.S.C., 1985, c. W-3, as amended

Financial Statements

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 Statistics Canada's (STC) 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 fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of STC's financial transactions.  Financial information submitted to the Public Accounts of Canada and included in STC'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 STC.

The financial statements of Statistics Canada have not been audited.

Ivan P. Fellegi,
Chief Statistician
Ottawa, Canada 

Colleen Falconer
Senior Financial Officer
Ottawa, Canada

Statement of Operations (Unaudited)

		2007	2006
Expenses (Note 4)	Economic Statistics	237,904	242,123
	Social Statistics	212,968	218,1
	Census Statistics	344,427	240,344
Total expenses		795,299	700,567
Revenues (Note 5)	Economic Statistics	21,692	28,855
	Social Statistics	58,182	44,424
	Census Statistics	37,802	10,888
Total revenues		117,676	84,167
Net Cost of Operations		677,623	616,4
The accompanying notes form an integral part of these financial statements.

Statement of Financial Position (Unaudited)

	2007	2006
Assets
Financial assets
Accounts receivable and advances (Note 6)	32,158	4,927
Total financial assets	32,158	4,927
Non-financial assets
Prepaid expenses	385	520
Inventory	3,595	3,774
Tangible capital assets (Note 7)	89,822	76,851
Total non-financial assets	93,802	81,145
Total	125,96	86,072
Liabilities
Accounts payable and accrued liabilities (Note 8)	49,033	74,345
Vacation pay and compensatory leave	26,038	21,712
Deferred revenue (Note 9)	14,45	15,472
Lease obligation for tangible capital asset (Note 10)	881	1,065
Employee severance benefits (Note 11)	79,332	72,582
	169,734	185,176
Equity of Canada	(43,774)	(99,104)
Total	125,96	86,072
Contingent liabilities (Note 12) Contractual obligations (Note 13) The accompanying notes form an integral part of these financial statements.

Statement of Equity of Canada (Unaudited)

	2007	2006
Equity of Canada, beginning of year	(99,104)	(71,078)
Net cost of operations	(677,623)	(616,4)
Current year appropriations used (Note 3)	619,52	558,427
Revenue not available for spending	(3,894)	(2,671)
Change in net position in the Consolidated Revenue Fund (Note 3c)	50,716	(30,278)
Services received without charge from other departments (Note 14)	66,611	62,896
Equity of Canada, end of year	(43,774)	(99,104)
The accompanying notes form an integral part of these financial statements.

Statement of Cash Flow (Unaudited)

	2007	2006
Operating Activities
Net cost of operations	677,623	616,4
Non-cash items:
Amortization of tangible capital assets	(21,389)	(22,052)
Loss on disposal of tangible capital assets	(464)	(65)
Services provided without charge	(66,611)	(62,896)
Variations in Statement of Financial Position:
Increase in accounts receivable and advances	27,231	910
Increase (decrease) in prepaid expenses	(135)	520
Increase (decrease) in inventory	(179)	93
Increase (decrease) in liabilities	15,442	(33,816)
Cash used by operating activities	631,518	499,094
Capital investment activities
Acquisitions of tangible capital assets	34,823	26,384
Financing activities
Net cash provided by Government of Canada	(666,342)	(525,478)
The accompanying notes form an integral part of these financial statements.

Notes to the Financial Statements (Unaudited)

1. Authority and Objectives

Statistics Canada was established in 1918 pursuant to the Statistics Act.  STC received full departmental status by Order in Council in 1965.

Statistics Canada is a division of the public service named in schedule I.1 of the Financial Administration Act.  The Minister currently responsible for Statistics Canada is the Minister of Industry, who represents STC in Parliament and Cabinet.

Statistics Canada's mandate derives primarily from the Statistics Act.  The Act requires STC, under the direction of the Minister, to collect, compile, analyze and publish statistical information on the economic, social and general conditions of the country and its citizens.  Statistics Canada's mandate also provides for coordination and leadership of the country's statistical system.

From STC's mandate are derived two primary objectives:

• To provide statistical information and analysis of the economic and social structure and functioning of Canadian society as a basis for the development, operation and evaluation of public policies and programs, for public and private decision-making and for the general benefit of all Canadians; and
• To promote the quality, coherence and international comparability of Canada's statistics through collaboration with other federal departments and agencies, with the provinces and territories and in accordance with sound scientific standards and practices.

To facilitate the understanding of Statistics Canada's program activity architecture (PAA), its activities have been grouped into three program activities: Economic Statistics, Social Statistics and Census Statistics.  The Economic Statistics provides information and analysis on the entire spectrum of Canadian economic activity, both domestic and international, through a set of macro-economic statistics and focuses on the business and trade sectors of the Canadian economy.  The Social Statistics provides information on the economic and social characteristics of individuals, families and households in Canada, and on the major factors which can contribute to their well being.  The Census Statistics provides benchmark information on the structure of the Canadian population and its demographic, social and economic conditions.

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:

• Parliamentary appropriations – Statistics Canada is financed by the Government of Canada through Parliamentary appropriations.  In addition to its yearly parliamentary appropriations, Statistics Canada has the authority to expend revenue received during the fiscal year.  Appropriations provided to STC do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements.  Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament.  Note 3 provides a high-level reconciliation between the two bases of reporting.

• Net Cash Provided by Government – Statistics Canada operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada.  All cash received by STC is deposited to the CRF and all cash disbursements made by STC 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.

• 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 STC.  It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

• Revenues:

  • 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.

  • Other revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

  • Revenues that have been received but not yet earned are recorded as deferred revenues.

• Expenses – Expenses are recorded on the accrual basis:

  • 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.

• Employee future benefits

  • Pension benefits:  Eligible employees participate in the Public Service Pension Plan, a multiemployer  plan  administered  by  the  Government  of  Canada.  Statistics  Canada's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation to the Plan.  Current legislation does not require STC 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.

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

• 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.

• Inventories – Inventories are recorded as an asset until issued for consumption or sale, at which time they are expensed.  Statistics Canada records two types of inventories:

  • Inventories held for re-sale – These are physical items, such as publications and special statistical services, which will be sold in the future in the ordinary course of business to parties outside of the government reporting entity.  They are valued at the average production cost.

  • Consumable inventories – These are inventories held for future program delivery and not intended for re-sale.  They are valued at cost.  If they no longer have service potential, they are valued at the lower of cost or net realizable value.

• Foreign currency transactions – Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars using the rate of exchange in effect on March 31, 2007.

• Tangible Capital assets – All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost.  Statistics Canada does not capitalize intangibles, works of art and historical treasures that have a 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
  Informatics hardware	5 years
  Informatics software	5 years
  Other equipment	5 years
  Motor vehicles	7 years
  Leasehold improvements	25 years
  Software under development	Once in service, 5 years
  Leased tangible capital assets	Term of lease

  
  

• 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 contingent liabilities, 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

Statistics Canada 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, Statistics Canada has different net results of operations for the year on a government funding basis than on an accrual accounting basis.  The differences are reconciled in the following tables:

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

	2007	2006
	(in thousands of dollars)
Net cost of operations	677,623	616,4
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (Less):
Amortization of tangible capital assets	(21,389)	(22,052)
Services provided without charge	(66,611)	(62,896)
Employee Severance Benefits	(6,748)	(5,294)
Vacation pay and compensatory leave	(4,326)	(1,577)
Revenues not available for spending	3,894	2,671
Loss on disposal of tangible capital assets and write-down of inventory	(603)	(119)
Inventory usage	(40)	147
Refunds of previous years expenditures	2,978	4,869
Reversal of previous year prepaid expenses	(520)	–
Adjustment for Justice Canada	(129)	(146)
Leasehold improvements	711	3,853
Leased tangible capital assets (payment less interest)	402	394
Pooled asset acquisitions	2,146	5,647
Software under development	25,211	7,205
Provision for bad debt	–	(9)
	612,599	549,093
Adjustments for items not affecting net cost of operations but affecting appropriations:
Add (Less):
Acquisitions of tangible capital assets	6,536	8,814
Prepaid expenses	385	520
Current year appropriations used	619,52	558,427

(b) Appropriations provided and used

	2007	2006
	(in thousands of dollars)
Vote 95 - Operating expenditures	569,948	486,904
Statutory amounts	73,351	72,546
Less:
Unexpended proceeds from disposal of surplus Crown assets	(31)	–
Lapsed appropriations: Operating	(23,748)	(1,023)
Current year appropriations used	619,52	558,427

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

	2007	2006
	(in thousands of dollars)
Net cash provided by Government	666,342	525,478
Revenue not available for spending	3,894	2,671
Change in net position in the Consolidated Revenue Fund
Variation in accounts receivable and advances	(27,231)	(910)
Variation in accounts payable and accrued liabilities	(25,312)	19,635
Variation in deferred revenue	(1,022)	6,839
Refunds of previous years expenditures	2,978	4,869
Other adjustments	(129)	(155)
	(50,716)	30,278
Current year appropriations used	619,52	558,427

4. Expenses

The following table presents details of expenses by category:

	2007	2006
	(in thousands of dollars)
Transfer payment - Canadian Institute of Health Information (CIHI)	561	561
Total transfer payment	561	561
Salaries and employee benefits	496,767	464,886
Professional services	126,268	63,113
Services provided without charge	66,611	62,896
Amortization	21,389	22,052
Transportation	18,177	13,787
Telecommunication and postage	16,765	27,305
Repairs and maintenance	16,192	21,545
Materials and supplies	12,905	16,105
Communication and printing	12,745	5,508
Rentals	6,231	2,633
Loss on disposals of tangible capital assets	464	65
Loss on write-down of inventory	139	54
Other	46	16
Interest component on leased tangible capital assets	39	32
Provision for bad debt	–	9
Total operating expenses	794,738	700,006
Total Expenses	795,299	700,567

5. Revenues

The following table presents details of revenues by category:

	2007	2006
	(in thousands of dollars)
Special statistical services	115,846	81,733
Publications	1,811	2,422
Interest on overdue accounts	19	12
Total Revenues	117,676	84,167

6. Accounts Receivable and Advances

The following table presents details of accounts receivable and advances:

	2007	2006
	(in thousands of dollars)
Receivables from other Federal Government departments and agencies	29,148	2,796
Receivables external parties	2,718	2,065
Employees advances	301	75
	32,167	4,936
Less: allowance for doubtful accounts on external receivables	(9)	(9)
Total	32,158	4,927

7. Tangible Capital Assets

	Cost				Accumulated amortization				2007 Net book value	2006 Net book value
	Opening balance	Acqui-sitions	Dispo-sals	Closing balance	Opening balance	Amorti-zation	Dispo-sals	Closing balance
	(in thousands of dollars)
Informatics hardware	71,146	6,066	16,314	60,898	46,367	9,193	16,275	39,285	21,613	24,779
Informatics software	48,868	11,24	1,812	58,296	22,807	10,9	1,443	32,264	26,032	26,061
Other equipment	5,289	852	139	6,002	3,622	484	86	4,02	1,982	1,667
Motor vehicles	205	917	43	1,079	98	105	41	162	917	107
Leasehold improvements	7,022	802	–	7,824	413	299	–	712	7,112	6,609
Software under development	16,582	14,728	–	31,31	–	–	–	–	31,31	16,582
Leased tangible capital assets	1,682	218	332	1,568	636	408	332	712	856	1,046
Total	150,794	34,823	18,64	166,977	73,943	21,389	18,177	77,155	89,822	76,851

Amortization expense for the year ended March 31, 2007 is $21,389,000 (2006 - $19,854,000)

8. Accounts Payable and Accrued Liabilities

The following table presents details of payables and accrued liabilities:

	2007	2006
	(in thousands of dollars)
Accounts payable external parties	29,827	54,187
Accounts payable other government departments	6,604	8,038
Accrued Salaries and Wages	12,59	12,077
Goods and services tax payable to Canada Revenue Agency	12	43
Total Payables and accrued liabilities	49,033	74,345

9. Deferred Revenue

Statistics Canada has the authority to expend revenue received during the fiscal year.  Deferred revenue represents the balance of unearned revenue stemming from contracts in place for the provision of statistical information.  Once the services are delivered, the amount will be transferred to revenue in order to offset related expenditures.  Details of the transactions related to this account are as follows:

	2007	2006
	(in thousands of dollars)
Opening balance	15,472	8,633
Receipts	113,782	81,495
Revenues earned	(114,804)	(74,656)
Closing balance	14,45	15,472

10. Lease Obligation for Tangible Capital Assets

Statistics Canada has entered into agreements to rent all photocopiers under capital lease with a cost of $1,568,101 and accumulated amortization of $711,571 as at March 31, 2007 ($1,682,141 and $635,589 respectively as at March 31, 2006).  The obligations for the upcoming years include the following:

Maturing year	2007	2006
	(in thousands of dollars)
2007	–	399
2008	377	318
2009	286	230
2010	172	133
2011	88	58
2012 and thereafter	12	–
Total future minimum lease payments	935	1,138
Less : imputed interest (3.19% to 4.26%)	54	73
Balance of obligations under leased tangible capital assets	881	1,065

11. Employee Benefits

a) Pension benefits: Statistics 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 STC contribute to the cost of the Plan.  The 2006-07 expense amounts to $54,059,527 ($50,695,180 in 2005-06), which represents approximately 2.2 times (2.6 in 2005-06) the contributions by employees.

Statistics 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: Statistics 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	72,582	67,288
Expense for the year	12,887	11,202
Benefits paid during the year	(6,137)	(5,908)
Accrued benefit obligation, end of year	79,332	72,582

In order to measure the March 31, 2007 liability, Statistics Canada used the ratio, determined by Treasury Board, of 23.64% to STC's annual gross payroll at year-end subject to severance pay, which is the payroll related to indeterminate employees.  The comparative ratios used to determine the March 31, 2006 and March 31, 2005 liabilities are 23.20% and 21.39% respectively.  

12. Contingent Liabilities

Claims and litigation

Claims have been made against Statistics Canada in the normal course of operations.  Legal proceedings for claims, which cannot be estimated (no estimation provided in 2006) were still pending at March 31, 2007.  Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur.  To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the financial statements.

13. Contractual Obligations

The nature of Statistics Canada's activities can result in some large multi-year contracts and obligations whereby it will be obligated to make future payments when the services/goods are received.  Significant contractual obligations that can be reasonably estimated are summarized as follows:

	2008	2009	2010	2011	2012 and thereafter	Total
Transfer payments	561	561	561	561	–	2,244
Multi-year contracts	12,602	1,856	430	143	12	15,043
Total	13,163	2,417	991	704	12	17,287

14. Related Party Transactions

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

Services provided without charge:

During the year Statistics Canada received without charge from other departments, accommodation, the employer's contribution to the health and dental insurance plans, worker's compensation and legal services. These services without charge have been recognized in STC's Statement of Operations as follows:

	2007	2006
	(in thousands of dollars)
Accommodation	31,318	31,022
Employer's contribution to the health and dental insurance plans	35,093	31,661
Workers compensation	173	198
Legal services	27	15
Total	66,611	62,896

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 STC's Statement of Operations.

 

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Note

1. Indian reserves, members of the armed forces and inmates of institutions are excluded from the Labour Force Survey.

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