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Section III: Supplementary Information

This section presents two resource tables, the audited financial statements and sources of additional information.

3.1 Resource Tables

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

	2005-2006 Actual	2006-2007 Actual	2007-2008 ($000)
			Main Estimates	Planned Spending	Total Authorities	Actual
Compliance Activities	7,909	9,373	11,139	11,139	10,566	9,771
Research & Policy Development	2,094	2.976	4,534	4,534	4,443	3,667
Public Outreach	1,628	3,367	4,038	4,038	3,947	3,692
Total	11,631	15,716	19,711	19,711	18,956	17,130
Less: Non-respendable revenue	-	-	N/A	-	N/A	-
Plus: Cost of services received without charge	1,375	1,586	1,888	1,888	1,774	1,774
Total Spending	13,006	17,302	21,599	21,599	20,73012	18,904
Full Time Equivalents	78.5	10013	N/A	143	N/A	110

Table 2 – Voted and Statutory Items

		2007-2008 ($000)
Vote or Statutory Item	Truncated Vote or Statutory Wording	Main Estimates	Planned Spending	Total Authorities	Actual
45	Program expenditures	16,262	17,482	17,503	15,677
(S)	Contributions to employee benefit plans	2,084	2,229	1,453	1,453
	Total Department or Agency	18,346	19,711	18,956	17,130

3.2 Audited Financial Statements

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 the management of the Office of the Privacy Commissioner of Canada. 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, and year-end instructions issued by the Office of the Comptroller General.

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 the Office’s financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Office’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 the Office’s 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 Office.

The financial statements of the Office of the Privacy Commissioner of Canada have been audited by the Auditor General of Canada, the independent auditor for the Government of Canada.

(Original signed by)

Jennifer Stoddart
Privacy Commissioner of Canada

(Original signed by)

Tom Pulcine, CMA
Director General, Corporate Services and Chief Financial Officer

Ottawa, Canada
July 18, 2008

AUDITOR’S REPORT

To the Speaker of the House of Commons and the Speaker of the Senate

I have audited the statement of financial position of the Office of the Privacy Commissioner of Canada as at March 31, 2008 and the statements of operations, equity of Canada and cash flow for the year then ended. These financial statements are the responsibility of the Office’s management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In my opinion, these financial statements present fairly, in all material respects, the financial position of the Office as at March 31, 2008 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Further, in my opinion, the transactions of the Office that have come to my notice during my audit of the financial statements have, in all significant respects, been in accordance with the Financial Administration Act and regulations and the Privacy Act.

(Original signed by)

John Wiersema, FCA
Deputy Auditor General
For the Auditor General of Canada

Ottawa, Canada
July 18, 2008

Statement of Financial Position

As at March 31 (in thousands of dollars)

	2008	2007
Assets
Financial assets
Due from the Consolidated Revenue Fund	1,364	1,303
Accounts receivable and advances (Note 4)	701	692
Total financial assets	2,065	1,995
Non-financial assets
Prepaid expenses	57	17
Tangible capital assets (note 5)	1,449	1,187
Total financial assets	1,506	1,204
TOTAL	3,571	3,199
Liabilities and Equity of Canada
Liabilities
Accounts payable and accrued liabilities	1,700	1,796
Accrued employee salaries	363	286
Vacation pay and compensatory leave	464	382
Employee severance benefits (Note 6)	1,517	1,464
Total liabilities	4,044	3,928
Equity of Canada (Note 10)	(473)	(729)
TOTAL	3,571	3,199

Contingent liabilities (Note 7)
Contractual obligations (Note 8)

The accompanying notes are an integral part of the financial statements

(Original signed by)

Jennifer Stoddart
Privacy Commissioner of Canada

(Original signed by)

Tom Pulcine, CMA
Director General, Corporate Services and Chief Financial Officer

Ottawa, Canada
July 18, 2008

Statement of Operations

As at March 31 (in thousands of dollars)

	2008				2007
	Assess and Investigate	Privacy Education	Research and policy	Total	Total
Operating Expenses
Salaries and Employee benefits	6,704	2,164	2,094	10,962	9,987
Professional and special services	2,465	659	707	3,831	3,729
Accommodation	582	189	217	988	875
Transportation and communications	360	303	246	909	619
Amortization	274	90	103	467	404
Information	115	246	51	412	405
Repairs and maintenance	161	53	60	274	170
Utilities, materials and supplies	74	26	26	126	130
Rentals	33	19	12	64	50
Equipment	31	11	11	53	222
Other	2	1	1	4	9
Total Operating expenses	10,801	3,761	3,528	18,090	16,600
Transfer Payments	-	-	451	451	387
Net Cost of Operations	10,801	3,761	3,979	18,541	16,987

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

Statement of Equity of Canada

For the year ended March 31 (in thousands of dollars)

	2008	2007
Equity of Canada, beginning of the year	(729)	(809)
Net cost of operations	(18,541)	(16,987)
Net cash provided by Government (Note 3(c))	17,029	15,775
Change in Due from Consolidated Revenue Fund	61	(294)
Services received without charge from other government departments (Note 9)	1,707	1,586
Equity of Canada, end of year	(473)	(729)

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

Statement of Cash Flow

For the year ended March 31 (in thousands of dollars)

	2008	2007
Operating Activities
Net cost of operations	18,541	16,987
Non-cash items:
Amortization of tangible assets	(467)	(404)
Services received without charge (Note 9)	(1,707)	(1,586)
Loss on disposal of tangible capital assets	-	(9)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances	9	644
Increase (decrease) in prepaid expenses	40	(30)
Decrease (increase) in liabilities	(116)	(617)
Cash used by operating activities	16,300	14,985
Capital investment activities
Acquisition of tangible capital assets	729	790
Net cash provided by Government of Canada	17,029	15,775

The accompanying notes are an integral part of the financial statements

Notes to the Financial Statements

1. Authority and objectives

The Office of the Privacy Commissioner of Canada (the Office), was created under the Privacy Act, which came into force on July 1, 1983. The Privacy Commissioner is an independent officer of Parliament appointed by the Governor-in-Council following approval of her nomination by resolution of the Senate and the House of Commons. The Office is designated, by Order-in-Council, as a department for purposes of the Financial Administration Act. As such, it is established under the authority of Schedule I.1 of the Act and is funded through annual appropriations. The Commissioner is accountable for, and reports directly to Parliament on the results achieved.

The objectives of the Office of the Privacy Commissioner of Canada are:

• investigating complaints and conducting audits;
• publishing information about personal information-handling practices in the public and private sector;
• conducting research into privacy issues; and
• promoting awareness and understanding of privacy issues by the Canadian public.

2. Summary of significant accounting policies

These 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, and year-end instructions issued by the Office of the Comptroller General.

Significant accounting policies are as follows:

(a) Due from the Consolidated Revenue Fund

Due from the Consolidated Revenue Fund (CRF) represents the amount of cash that the Office is entitled to draw from the Consolidated Revenue Fund without further appropriations, in order to discharge its liabilities.

(b) Parliamentary appropriations

The Office of the Privacy Commissioner of Canada is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the Office 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 bases of reporting.

(c) Net cash provided by Government

The Office operates within the Consolidated Revenue Fund, which is administered by the Receiver General for Canada. All cash received by the Office is deposited to the CRF and all cash disbursements made by the Office 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.

(d) 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 received without charge from other government departments are recorded as operating expenses at their estimated cost.

(e) Employee future benefits

1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer pension plan administered by the Government of Canada. The Office’s contributions to the Plan are charged to expenses in the year incurred and represent the total obligation of the Office to the Plan. Current legislation does not require the Office 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.

(f) Accounts receivable

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

(g) 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.

(h) Tangible capital assets

All tangible capital assets and leasehold improvements having an initial cost of $2,500 or more are recorded at their acquisition cost.

The 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
Machinery and equipment	3 years
Informatics hardware	3 years
Computer software	3 years
Other equipment	10 years
Leasehold improvements	Term of the lease

(i) 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, and year-end instructions issued by the Office of the Comptroller General, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, 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 Office 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 Office 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:

(in thousands of dollars)

	2008	2007
Net cost of operations	18,541	16,987
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (Less):
Services received without charge	(1,707)	(1,586)
Amortization of tangible capital assets	(467)	(404)
Reversal of previous years accounts payable	78	89
Vacation pay and compensatory leave	(82)	(12)
Employee severance benefits	(53)	(182)
	16,310	14,892
Adjustments for items not affecting net cost of operations but affecting appropriations:
Add (Less):
Acquisition of tangible capital assets	729	790
Change in prepaid expenses	40	(30)
Other adjustments	51	64
	820	824
Current year appropriations used	17,130	15,716

(b) Appropriations provided and used:

(in thousands of dollars)

	2008	2007
Vote 45 - Program expenditures	17,503	14,754
Statutory contributions to employee benefit plans	1,453	1,270
	18,956	16,024
Lapsed Appropriations: Operating	(1,826)	(308)
Current year appropriations used	17,130	15,716

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

(in thousands of dollars)

	2008	2007
Net cash provided by Government	17,029	15,775
Reversal of previous years accounts payable	78	89
Variation in accounts receivable and advances	(9)	(644)
Variation in accounts payable and accrued liabilities	(96)	383
Variation in accrued employee salaries	77	40
Other adjustments	51	73
Current year appropriations used	17,130	15,716

4. Accounts receivable and advances

The following table presents details of accounts receivable and advances:

(in thousands of dollars)

	2008	2007
Receivables from other Federal Government departments and agencies	693	691
Receivables from external parties	7	-
Employee advances	1	1
Total	701	692

5. Tangible capital assets

Cost (in thousands of dollars)

	Opening Balance	Acquisitions	Disposals	Closing Balance
Machinery and equipment	-	6	-	6
Informatics hardware	1,604	462	-	2,066
Computer software	427	4	-	431
Other equipment	745	118	-	863
Leasehold improvements	123	139	-	262
	2,899	729	-	3,628

Accumulated amortization (in thousands of dollars)

	Opening Balance	Amortization	Disposals	Closing Balance
Machinery and equipment	-	2	-	2
Informatics hardware	989	317	-	1,306
Computer software	332	50	-	382
Other equipment	332	72	-	404
Leasehold improvements	59	26	-	85
	1,712	467	-	2,179

Net book value (in thousands of dollars)

	Opening Balance	Closing Balance
Machinery and equipment	-	4
Informatics hardware	615	760
Computer software	95	49
Other equipment	413	459
Leasehold improvements	64	177
	1,187	1,449

Amortization expense for the year ended March 31, 2008 was $467,000 (2007 was $404,000).

6. Employee Benefits

(a) Pension benefits

The Office’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 Office contribute to the cost of the Plan. The 2007-2008 expense amounts to $1,059,315 ($935,432 in 2006-2007), which represents approximately 2.1 times (2.2 in 2006-07) the contributions by employees.

The Office’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 Office provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:

(in thousands of dollars)

	2008	2007
Accrued benefit obligation, beginning of year	1,464	1,282
Expense for the year	282	236
Benefits paid during the year	(229)	(54)
Accrued benefit obligation, end of year	1,517	1,464

7. Contingent liabilities

Claims and litigation - Claims have been made against the Office in the normal course of operations. Legal proceedings for claims totalling approximately $50,000 were still pending at March 31, 2008 ($50,000 in 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. As of March 31, 2008, no amount has been accounted for in the financial statements.

8. Contractual obligations

The nature of the Office’s activities can result in some large multi-year contracts and obligations whereby the department will be obligated to make future payments when the services/goods are received. Included within the 2008-2009 amount is $842,857 for goods and services contracts signed in 2007-2008 which extend into 2008-2009. The remaining balance of $36,050 in 2008-2009 is for operating leases. The amounts for 2009-2010 through 2012-2013 are all for operating leases.

(in thousands of dollars)

2008-09	2009-10	2010-11	2011-12	2012-13
879	35	15	5	-

9. Related party transactions

The Office is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The Office enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Office expensed $4,996,533 ($4,450,384 in 2007) from transactions with other government departments, agencies and Crown corporations. These expenses include services received without charge in the amount of $1,706,775 ($1,585,560 in 2007), as presented in part (a).

(a) Services received without charge:

During the year, the Office received without charge from other departments, accommodation, the employer’s contribution to the health and dental insurance plans, payroll services, and audit services. These services without charge have been recognized in the Office’s Statement of Operations as follows:

(in thousands of dollars)

	2008	2007
Accommodation provided by Public Works and Government Services Canada	980	863
Contribution covering employer’s share of employees’ insurance premiums and expenditures paid by Treasury Board Secretariat	611	629
Payroll services provided by Public Works and Government Services Canada	4	4
Audit services provided by the Office of the Auditor General of Canada	112	90
Total	1,707	1,586

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

(in thousands of dollars)

	2008	2007
Accounts receivable with other government departments and agencies	693	691
Accounts payable to other government departments and agencies	429	259

10. Equity of Canada

The Equity of Canada, which is currently in a deficit position, represents liabilities incurred by the Office, net of capital tangible assets, which have not yet been funded through appropriations. Significant components of this amount are employee severance benefits and vacation pay liabilities. These amounts are expected to be funded by appropriations in future years as they are paid.

3.3 Sources of Additional Information

Legislation Administered by the Privacy Commissioner

Privacy Act 85, ch. P21, amended 1997, c. 20, s. 55	R.S., 1985, ch. P-21, amended 1997, c.20, s. 55
Personal Information Protection and Electronic Documents Act	2000, c.5

Statutory Annual Reports, other Publications and Information

Statutory reports, publications and other information are available from the Office of the Privacy Commissioner of Canada, Ottawa, Canada K1A 1H3; tel.: (613) 995-8210 and on the OPC's Web site at www.privcom.gc.ca

• Privacy Commissioner's Annual Reports
• Reports on Plans and Priorities for 2008-2009
• Performance Report to Parliament for the period ending March 31, 2007.
• Your Privacy Rights: A Guide for Individuals to the Personal Information Protection and Electronic Documents Act
• Your Privacy Responsibilities: A Guide for Businesses and Organizations to the Personal Information Protection and Electronic Documents Act

Contact for Further Information on the Departmental Performance Report:

Mr. Tom Pulcine
Director General, Corporate Services/Chief Financial Officer
Office of the Privacy Commissioner of Canada
Place de Ville, Tower B
112, Kent St., Suite 300
Ottawa, Ontario K1A 1H3
Telephone: (613) 996-5336
Facsimile: (613) 947-6850

---

1. ¹ Our Report on Plans and Priorities 2007-2008 reported 154 Planned FTEs which included 11 FTEs and funds earmarked for the implementation of Federal Accountability Act (FedAA). No additional funds or FTEs were requested during fiscal year 2007-2008 for implementation of the FedAA.Therefore our adjusted planned FTEs for 2007-2008 are 143.
2. ² The OPC added a rating “partially met” to the Treasury Board Secretariat’s scale that was restricted to the following ratings: successfully met, not met, or exceeded expectations. A commitment that is partially met indicates that some elements were achieved as planned and other elements were either not achieved or delayed.
3. ³ Other interventions are actions taken by the OPC to engage with a federal or private sector organization to address and resolve a particular privacy matter that has come to the attention of the Office, without making use of formal instruments such as audits.
4. ⁴ The business case authorized the creation of 47 positions, including five positions to set up regional offices. The decision to create regional offices was revisited and work to extend the OPC’s regional presence is being resourced through a mix of staff and operating resources, hence the total of 42 positions intended to be staffed by the OPC.
5. ⁵ The service standards depend on complaint types: complaints under PIPEDA for denial of access complaints (access and time limits) should take 10.5 months, and other types (collection, consent, correction/notation, retention, safeguards, use/disclose, etc.): 11.5 months; complaints under the Privacy Act for time limit complaints (time limits, extensions, correction time limits) should take 6 months, denial of access complaints: 10 months, and Section 4 to 8 complaints (collection, correction/notation, use/disclose, retention/disposal): 12 months.
6. ⁶ In the 2007-2008 Report on Plans and Priorities, this indicator included a ‘PIA review’ component and read as follows: “Extent to which audit, investigation and PIA review recommendations are accepted and implemented over time”. The ‘PIA review’ component is now measured through a separate indicator that reads as follows: “Extent to which audit and PIA recommendations are accepted” and is presented two rows down in this table.
7. ⁷ This is a new indicator.
8. ⁸ This indicator combines the two following indicators presented in the 2007-2008 Report on Plans and Priorities: “Audits completed as scheduled and within allotted resources” and “% of PIA reviews completed within allotted time”.
9. ⁹ Incidents are monitored with a view to determining whether or not there exist reasonable grounds to initiate an investigation.
10. ¹⁰ These two new indicators have replaced the following indicator published in the 2007-2008 Report on Plans and Priorities: Number of potential privacy-relevant legislative initiatives and bills on which the OPC: (i) was consulted before the introduction and/or during the legislative review process and (ii) appeared before Parliamentary committees
11. ¹¹ This particular performance indicator will be implemented in stages, beginning in 2007-2008, with select audiences/groups polled each year.
12. ¹² Total Authorities does not include Spending of proceeds from disposal of surplus Crown assets of $8.
13. ¹³ The 2006-2007 DPR reported 108 actual FTEs, but while preparing the 2007-2008 DPR we found that the actual amount of FTEs should have been 100.

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