ARCHIVED - Canadian Transportation Agency

• Previous Page
• Table of Contents
• Next Page

This page has been archived.

Section III: Supplementary Information

3.1 Agency's Link to Government of Canada Outcome Areas 

Actual Spending 2007-2008			Alignment to Government of Canada Outcome Area
Budgetary	Non-budgetary	Total
25,491	0	25,491	The Agency's single program activity contributes to the Government of Canada's Outcome of "a fair and secure marketplace".

3.2 Financial Performance Overview

The Canadian Transportation Agency is an administrative tribunal and incurs costs in proportion to the resource intensity of the inputs necessary to carry out its mandate. Approximately 82 percent of its operating expenditures are allocated to personnel expenditures.

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

	2005-2006	2006-2007	2007-2008
($ thousands)	Actual	Actual	Main Estimates	Planned Spending	Total Authorities	Actual
Economic regulation of the federal transportation system *	27,633	26,551	26,055	27,214	27,892	25,491
Less: Non-respendable revenue	(129)	(92)	N/A	(59)	N/A	(42)
Plus: Cost of services received without charge	3,710	3,421	N/A	3,256	N/A	3,234
Total Agency Spending	31,214	29,880	26,055	30,411	27,892	28,683
Full-time Equivalents	269	250	N/A	255	N/A	234

* Includes contributions to employee benefit plans.

Explanation of variances

The planned spending for the Agency in 2007-2008 was $27.2 million, however, the Agency concluded the year with a revised authority to spend of $27.8 million. The increase was due to increase in appropriations for collective bargaining ($0.2 million) and the reimbursement of eligible paylist expenditures ($0.8 million) offset by a decrease in employee benefit plans ($0.4 million).

Overall, the Agency's total authorities in 2007-2008 were $27.8 million; however, the Agency concluded the year with actual spending of $25.4 million. The decrease of $2.4 million is due to:

• $1.1 million in operating carry forward to 2008-2009; and
• $1.3 million operating funding that could not be spent in 2007-2008.

Underutilization of FTEs can be explained by the following:

• turnover;
• difficulty in finding qualified replacements because of low labour market availability for jobs being staffed; and
• delays in the staffing and classification process.

Table 2 Voted and Statutory Items

($ thousands)
		2007-2008
Vote	Truncated Vote or Statutory Wording	Main Estimates	Planned Spending	Total Authorities	Actual
	Canadian Transportation Agency
25	Operating expenditures	22,611	23,770	24,807	22,423
(S)	Spending of proceeds from the disposal of surplus Crown assets	0	0	17	0
(S)	Contributions to employee benefit plans	3,444	3,444	3,069	3,069
	Total	26,055	27,214	27,892	25,491

For supplementary information on the Agency's following tables, please visit: http://www.tbs-sct.gc.ca/dpr-rmr/st-ts-eng.asp.

Sources of Non-respendable Revenue
User Fees/External Fees
Response to Parliamentary Committees and External Audits
Internal Audits and Evaluations
Travel Policies

Table 3 Financial Statements

Financial Statements are prepared in accordance with accrual accounting principles. The unaudited supplementary information presented in the financial tables in the DPR is 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.

CANADIAN TRANSPORTATION AGENCY
Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2008 and all information contained in these statements rests with Agency 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 responsibilities, management maintains a set of accounts that provides a centralized record of the Agency's financial transactions.  Financial information submitted to the Public Accounts of Canada and included in the Agency'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 Agency.

The Agency has established an internal audit infrastructure consistent with Treasury Board policy, managed by a dedicated resource reporting directly to the Deputy Head.

The Agency's Audit Advisory Committee is chaired by the Deputy Head, with two other members, who are independent of operational functions. The Audit Advisory Committee approves the annual risk-based internal audit plan, budgets and reports.

The financial statements of the Agency have not been audited.

_________________________ Geoffrey Hare, Chairman and Chief Executive Officer Gatineau, Canada July 31st, 2008

_________________________ Arun Thangaraj, Senior Financial Officer

	2008	2007
	(in dollars)
Operating Expenses
Salaries and employee benefits	21,635,596	23,588,036
Accommodation	1,885,061	1,869,734
Professional and special services	1,880,782	1,482,610
Transportation and telecommunication	795,906	964,909
Amortization of tangible capital assets	718,643	663,932
Repair and maintenance	303,575	337,109
Information	245,512	160,818
Rentals	206,391	272,285
Utilities	185,422	219,453
Materials & supplies	87,875	97,434
Loss on write-off of tangible capital assets	1,666	23,152
Loss on disposal of tangible capital assets	9,978	10,135
Other	5,328	831
Total Expenses	27,961,735	29,690,438
Revenues
Sales of goods and services	30,068	4,094
Revenues from fines	1,000	40,095
Gains on disposal of tangible capital assets	115	57
Total Revenues	31,183	44,246
Net Cost of Operations	27,930,552	29,646,192

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

	2008	2007
	(in dollars)
ASSETS
Financial Assets
Accounts receivable from external parties	14,080	6,402
Receivables from other Federal Government departments and agencies	431,394	476,715
Employee advances	12,850	12,850
Total financial assets	458,324	495,967
Non-Financial Assets
Prepaid expenses	205,194	177,746
Inventory	80,795	100,544
Tangible capital assets (Note 4)	2,497,243	2,624,596
Total non-financial assets	2,783,232	2,902,886
TOTAL	3,241,556	3,398,853
LIABILITIES
Accounts payable & accrued liabilities to external parties	1,735,374	1,441,416
Accounts payable to other Federal Government departments and agencies	137,079	119,842
Vacation pay and compensatory leave	840,432	909,520
Employee severance benefits (Note 5)	3,363,756	4,153,663
	6,076,641	6,624,441
Equity of Canada	(2,835,085)	(3,225,588)
TOTAL	3,241,556	3,398,853

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

	2008	2007
	(in dollars)
Equity of Canada, beginning of the year	(3,225,588)	(3,766,976)
Net cost of operations	(27,930,552)	(29,646,192)
Current year appropriations used (Note 3a))	25,491,189	26,550,696
Revenue not available for spending	(31,183)	(44,151)
Refund of previous year expenditures	(10,637)	(48,096)
Change in net position in the Consolidated Revenue Fund (Note 3c))	(361,967)	308,237
Services provided without charge by other Federal Government departments and agencies (Note 6)	3,233,653	3,420,894
Equity of Canada, end of year	(2,835,085)	(3,225,588)

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

	2008	2007
	(in dollars)
Operating Activities
Net cost of operations	27,930,552	29,646,192
Non-cash items:
Amortization of tangible capital assets	(718,643)	(663,932)
Loss on disposal and write-down of tangible capital assets	(11,644)	(33,287)
Services provided without charge by other Federal Government departments and agencies	(3,233,653)	(3,420,894)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable	(37,643)	345,912
Increase (decrease) in employee advances	-	(3,210)
Increase (decrease) in prepaid expenses	27,448	(22,689)
(Decrease) Increase in inventory	(19,749)	8,252
Decrease in vacation pay and compensatory leave	69,088	162,786
Decrease (Increase) in employee severance benefits	789,906	(25,241)
(Increase) in accounts payable and accrued liabilities	(311,195)	(34,465)
Cash used by operating activities	24,484,467	25,959,424
Capital investment activities
Net acquisitions of tangible capital assets	619,672	807,262
Proceeds from disposal of tangible capital assets	(16,737)	-
Cash used by capital investment activities	602,935	807,262
Financing activities
Net Cash provided by Government of Canada	25,087,402	26,766,686

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

1. Authority and Objectives

The Canadian Transportation Agency (the Agency ) was established on July 1, 1996, under the Canada Transportation Act, (S.C. 1996, c. 10) (the Act), as the continuation of the National Transportation Agency. As an independent, quasi-judicial, administrative tribunal, the Agency has a multi-faceted role. It is an economic regulator, licensing authority, accessibility facilitator and aeronautical authority. It has the power to issue decisions and order on matters within its jurisdiction. Under the Act and related legislation, it has various powers to help implement the federal government's transportation policy. The Chair and Chief Executive Officer is appointed by the Governor-in-Council.

The objective of the Agency is to contribute to the attainment of an efficient and accessible Canadian transportation system that serves the needs of shippers, carriers, travellers and other users.

The Agency's mission is to administer transportation legislation and government policies to help achieve an efficient and accessible transportation system by education, consultation and essential regulation.

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:

1. 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 bases of reporting.
2. 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.
3. 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.
4. Revenues:
   • Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
   • Other revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
   
   
5. Expenses - Expenses are recorded on the accrual basis:
   • Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
   • Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans and legal services are recorded as operating expenses at their estimated cost.
   
   
6. Employee future benefits
   1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer 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 Agency obligation to the Plan. Current legislation does not require the department to make contributions for any actuarial deficiencies of the Plan.
   2. 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.
7. Receivables - these are stated at amounts expected to be ultimately realized. A provision is made for receivables where recovery is considered uncertain.
8. 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.
9. Inventories not for re-sale - These comprise of brochures that are held for future program delivery and are not intended for re-sale. They are valued at cost. If they no longer have service potential, they are written-off as there are no realizable value for these items.
10. Tangible capital assets - All tangible capital assets and leasehold improvements are recorded at their acquisition cost (refer to the following table for the initial cost threshold). The capitalization of software and leasehold improvements has been done on a prospective basis from April 1, 2001. Amortization of capital assets is done on a straight-line basis over the estimated useful life of the capital asset as identified in the table.
11. 
    

    Agency Asset Categories	Agency Useful Life		Threshold (initial cost equal/or more than)
    	Non-LAN	LAN	Non-LAN	LAN
    Informatics Hardware	3-5 years	3-10 years	$1	$1
    Software	3 years	Based on business case	$500	$1
    Furniture	15 years	10 years	$1,000	$1
    Accommodation  improvements	Assessed on a case by case basis	Assessed on a case by case basis	$10,000	$1
    Car	7 years	N/A	$10,000	N/A
    Assets under construction	Not amortized until in service. Once in service, in accordance with asset category

    
    
12. 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

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 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

	2008	2007
	(in dollars)
Net cost of operations	27,930,552	29,646,192
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (Less) :
Services provided without charge by other Federal Government departments and agencies	(3,233,653)	(3,420,894)
Amortization of tangible capital assets	(718,643)	(663,932)
Revenue not available for spending	31,183	44,151
Refunds of previous years expenditures	10,637	48,096
(Loss) on disposals and write-offs of tangible capital assets	(11,644)	(33,287)
Decrease vacation pay and compensatory leave	69,088	162,786
Decrease (Increase) employee severance benefits	789,906	(25,241)
Bad debts	(3,608)	-
	(3,066,734)	(3,888,321)
Adjustments for items not affecting net cost of operations but affecting appropriations
Add (Less) :
Acquisitions of tangible capital assets (Note 4)	619,672	807,262
Increase (decrease) prepaid expenses	27,448	(22,690)
Increase (decrease) in inventory	(19,749)	8,253
Current year appropriations used	25,491,189	26,550,696

(b) Appropriations provided and used

	2008	2007
	(in dollars)
Operating expenditures (Vote 25)	24,806,657	24,572,550
Statutory amounts	3,085,532	3,261,996
Less:
Appropriations available for future years	(16,851)	-
Lapsed appropriations - Operating	(2,384,149)	(1,283,850)
Current year appropriations used	25,491,189	26,550,696

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

	2008	2007
	(in dollars)
Net cash provided by Government	25,087,402	26,766,686
Revenues not available for spending	31,183	44,151
Refund of previous years expenditures	10,637	48,096
Change in net position in the Consolidated Revenue Fund
Variation in accounts receivable and advances	37,643	(345,912)
Variation in employee advances	-	3,210
Variation in accounts payable and accrued liabilities	311,195	34,465
Proceeds from disposal of tangible capital assets	16,737	-
Bad debts	(3,608)	-
	361,967	(308,237)
Current year appropriations used	25,491,189	26,550,696

4. Tangible Capital Assets

(in dollars)

	Capital asset class
	Informatics Hardware	Software	Furniture	Car	Assets under construction	Total
Cost
Opening Balance	2,894,112	2,441,662	1,218,126	22,157	67,414	6,643,471
Acquisitions	127,678	397,712	7,749	30,737	356,376	920,252
Disposals and write-offs	521,770	-	11,008	22,157	300,580	855,515
Closing balance	2,500,020	2,839,374	1,214,867	30,737	123,210	6,708,208
Accumulated amortization
Opening balance	2,257,610	1,121,586	634,129	5,552		4,018,877
Amortization	294,838	325,015	96,059	2,731		718,643
Disposals and write-offs	515,189	-	3,814	7,552		526,555
Closing balance	2,037,259	1,446,601	726,374	731		4,210,965
2008
Net book value	462,761	1,392,773	488,493	30,006	123,210	2,497,243
2007
Net book value	636,503	1,320,077	583,997	16,605	67,414	2,624,596

Amortization expense for the year ended March 31, 2008 is $ 718,643 (2007 was $ 663,932). During the year, $300,580 of assets under construction was transferred to software. The net acquisition of tangible capital assets is therefore, $619,672.

5. 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/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the department contribute to the cost of the Plan. The 2007-2008 expense amounts to $3,068,681 ($3,197,314 in 2006-2007), which represents approximately 2.1 times (2.2 in 2006-2007) the contributions by employees.

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:

	2008	2007
	(in dollars)
Accrued benefit obligation, beginning of year	4,153,663	4,128,421
Expense for the year	(222,758)	639,463
Benefits paid during the year	(567,149)	(614,221)
Accrued benefit obligation, end of year	3,363,756	4,153,663

6. 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 hereafter.

Services provided without charge by other government departments:

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

	2008	2007
	(in dollars)
Accommodation	1,885,061	1,869,734
Employer's contribution to the health and dental insurance plans	1,282,691	1,536,936
Workman's compensation coverage	8,478	14,224
Legal services	57,423	-
Total	3,233,653	3,420,894

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

• Previous Page
• Table of Contents
• Next Page