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Responsibility for the compilation, content, and presentation of the accompanying future-oriented financial information for the year ended March 31, 2012 rests with the management of the Canada Border Services Agency (CBSA). The future-oriented financial information has been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector. The future-oriented financial information is submitted for Part III of Estimates (Report on Plans and Priorities), and will be used in the CBSA's Departmental Performance Report to compare with actual results.
Management is responsible for the integrity and objectivity of the information contained in the future-oriented financial information and for the process of developing assumptions. Assumptions and estimates are based upon the information readily available and known to management at the time of preparation, reflect current business and economic conditions, and assume a continuation of the current governmental priorities and consistency in the departmental mandate and strategic objectives. Much of the future-oriented financial information is based on these assumptions, best estimates, and judgment and gives due consideration to materiality. At the time of the preparation of these future oriented financial statements, management believes the estimates and assumptions to be reasonable. However, as with all such assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.
The actual results achieved for the fiscal years covered in the accompanying future-oriented financial information will vary from the information presented and the variations may be material.
For the Year Ended March 31
(in thousands of dollars)
Forecast 2012 | |
---|---|
Operating Expenses | |
Salaries and employee benefits | 1,341,017 |
Professional and special services | 251,434 |
Amortization | 77,904 |
Rental of land and buildings | 59,715 |
Transportation and telecommunication | 59,172 |
Consumable machinery and equipment (parts) | 26,357 |
Repair and maintenance | 23,316 |
Materials and supplies | 20,982 |
Other | 10,008 |
Bad debts | 607 |
Total Expenses | 1,870,512 |
Revenues | |
Sale of goods and services | 16,290 |
Forfeitures of cash bonds | 1,374 |
Miscellaneous | 1,790 |
Seized property | 330 |
Interest, penalties and fines | 145 |
Total Revenues | 19,929 |
Net Cost of Operations | 1,850,583 |
The accompanying notes form an integral part of these future-oriented financial statements.
As at March 31
(in thousands of dollars)
Forecast 2012 | |
---|---|
ASSETS | |
Financial assets | |
Due from Consolidated Revenue Fund | 22 |
Accounts receivable and advances (Note 6) | 12,012 |
Total financial assets | 12,034 |
Non-financial assets | |
Prepaid expenses | 113 |
Inventory | 7,248 |
Tangible capital assets (Note 7) | 544,808 |
Total non-financial assets | 552,169 |
TOTAL | 564,203 |
LIABILITIES AND EQUITY OF CANADA | |
Liabilities | |
Accounts payable and accrued liabilities (Note 8) | 157,690 |
Deposit accounts (Note 9) | 31,554 |
Employee severance benefits (Note 10) | 233,751 |
Total | 422,995 |
Equity of Canada | 141,208 |
TOTAL | 564,203 |
Contingent liabilities (Note 11)
The accompanying notes form an integral part of these future-oriented financial statements.
For the Year Ended March 31
(in thousands of dollars)
Forecast 2012 |
|
---|---|
Operating activities | |
Net cost of operations | 1,850,583 |
Non-cash items: | |
Services provided without charge by other government departments | (153,733) |
Amortization of tangible capital assets | (77,904) |
Variations in Statement of Financial Position: | |
(Increase) in accounts payable and accrued liabilities | (3,000) |
(Increase) in employee severance benefits | (5,589) |
Cash used by operating activities | 1,610,357 |
Capital investment activities | |
Acquisitions of tangible capital assets | 137,990 |
Cash used by capital investment activities | 137,990 |
Financing activities | |
Net cash provided by the Government of Canada | (1,748,347) |
The accompanying notes form an integral part of these future-oriented financial statements.
For the year ended March 31, 2012
The Canada Border Services Agency (Agency Activities) is responsible for providing integrated border services that support national security and public safety priorities and facilitate the free flow of persons and goods. The Canada Border Services Agency Act received royal assent on November 3, 2005. The Agency is a departmental corporation named in Schedule II of the Financial Administration Act and reports to Parliament through the Minister of Public Safety. The Agency is funded through appropriations from the Government of Canada.
The Agency is responsible for the administration and enforcement of the following acts or portions of these acts: the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act, the Citizenship Act, the Immigration and Refugee Protection Act, as well as other acts on behalf of other federal departments and provinces.
In delivering efficient and effective border management that contributes to the security and prosperity of Canada, the Agency operates under the following program activities:
These future-oriented statements have been prepared:
While every attempt has been made to accurately forecast final results from 2011-2012, actual results achieved are likely to vary from the forecast information presented, and this variation could be material.
Once the Report on Plans and Priorities is presented, the CBSA will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the CBSA's Departmental Performance Report.
The future-oriented financial information has been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.
Significant accounting policies are as follows:
(a) Parliamentary appropriations
The Agency is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the Agency do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the future-oriented statement of operations and the and the future-oriented statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 5 provides a high-level reconciliation between the bases of reporting.
( b) Net Cash Provided by the Government of Canada
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 forwarded to the Government of Canada is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.
(c) Change in net position in the Consolidated Revenue Fund
The change in net position in the Consolidated Revenue Fund is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non respendable revenue recorded by the Agency. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.
(d) Non-tax revenues
Non-tax revenues reported in this future oriented statement include revenues collected on behalf of the Government of Canada under the Immigration and Refugee Protection Act, the Agriculture and Agri-Food Administrative Monetary Penalties Act and other similar legislation.
Non-tax revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenue.
(e) Expenses
All expenses are recorded on an accrual basis:
(f) Cash
Cash includes amounts received in Agency offices or by Agency agents as at March 31 but not yet deposited to the credit of the CRF of the Government of Canada.
(g) Accounts receivable and advances
Accounts receivable and advances are stated at amounts expected to be ultimately realized; a provision is made for doubtful accounts where recovery is considered uncertain based on the percentages of aging of receivables. The percentages have been increased this year to reflect the increased rate of the aging of receivables.
(h) Inventory
Inventory consists of forms, publications and uniforms and is not intended for resale. Items in the inventory are valued at cost using the weighted average cost method. Items that are considered obsolete are written off. The cost of inventory is charged to operations in the period in which the items are used.
(i) Tangible capital assets
All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. Amortization of capital assets, except land, is performed on a straight-line basis over the estimated useful lives of the assets as follows:
Asset class | Amortization period |
---|---|
Buildings | 30 years |
Works and infrastructure | 40 years |
Machinery and equipment | 10 years |
Information technology equipment | 5 years |
In-house-developed software | 7 years |
Purchased software | 3 years |
Vehicles | 5 years to 10 years |
Leasehold improvements | Over the useful life of the improvement or the lease term, whichever is shorter. |
Assets under construction | Once in service, determined in accordance with asset type. |
(j) Employee future benefits
(k) 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 future-oriented financial information.
(l) Environmental liabilities
Environmental liabilities reflect the estimated costs related to the management and remediation of contaminated sites. Based on management's best estimates, a liability is accrued and an expense recorded when the contamination occurs or when the Agency becomes aware of the contamination and is obligated or is likely to be obligated to incur remedial costs. If the likelihood of the Agency's obligation to incur these costs is either not determinable or unlikely, or if an amount cannot be reasonably estimated, the costs are disclosed as contingent liabilities in the notes to the future-oriented financial information.
(m) Measurement uncertainty
The preparation of these future-oriented financial information requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the future-oriented financial statements. Assumptions are based upon information available and known to management at the time of preparation, reflect current business and economic conditions, and assume a continuation of current governmental priorities and consistency in departmental mandate and strategic objectives. At the time of preparation of these future-oriented statements, management believes the estimates and assumptions to be reasonable. Nonetheless, as with all such estimates and assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.
The Agency receives most of its funding through Parliamentary appropriations. Items recognized in the future-oriented statement of operations and the future-oriented 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 for the year on a government funding basis than on an accrual accounting basis.
These differences are reconciled below:
(a) Reconciliation of net cost to current year appropriations forecasted to be used
Forecast 2012 (in thousands of dollars) |
|
---|---|
Net cost of operations | 1,850,583 |
Adjustments for items affecting net results but not affecting appropriations | |
Add (Less): | |
Revenue not available for spending | 5,478 |
Services provided without charge | (153,733) |
Bad Debt | (607) |
Amortization of tangible capital assets | (77,904) |
Employee severance benefits | 5,589 |
Vacation pay and compensatory leave | (3,000) |
Adjustment to prior year's expenditures | 909 |
Total | (223,268) |
Adjustments for items not affecting net results but affecting appropriations | |
Add (Less): | |
Acquisition of tangible capital assets | 137,990 |
Total | 137,990 |
Current year appropriations forecasted to be used | 1,765,305 |
(b) Appropriations forecasted to be provided and used
Forecast 2012 (in thousands of dollars) |
|
---|---|
Parliamentary appropriations | |
Vote 10 – Operating expenditures | 1,561,342 |
Vote 15 – Capital expenditures | 113,930 |
Total | 1,675,272 |
Statutory amounts | |
Contributions to employee benefit plans | 171,594 |
Refunds of amounts credited to revenues from previous years | 50 |
Total | 171,644 |
Available for use in subsequent years | |
Vote 10 – Operating expenditures | (37,611) |
Vote 15 – Capital expenditures | (44,000) |
Total | (81,611) |
Current year appropriations forecasted to be used | 1,765,305 |
The following table presents details of the accounts receivable and advances:
Forecast 2012 (in thousands of dollars) |
|
---|---|
Receivables from other Federal Government departments and agencies | 7,104 |
Receivables from external parties | 4,732 |
Employee advances and other receivables | 1,637 |
Total | 13,473 |
Less: allowance for doubtful accounts on external receivables | (1,461) |
Total | 12,012 |
(in thousands of dollars)
The following table presents details of the tangible capital assets:
Cost | Accumulated amortization | 2012 | 2011 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Capital asset class | Opening balance | Acquisi- tions | Transfers, disposals, write-offs | Closing balance | Opening balance | Amorti-zation | Transfers, disposals, write-offs | Closing balance |
Net book value |
Net book value |
Land | 4,525 | 0 | 0 | 4,525 | 0 | 0 | 0 | 0 | 4,525 | 4,525 |
Buildings | 210,007 | 68,630 | -29,664 | 308,301 | 69,510 | 8,638 | 0 | 78,148 | 230,153 | 140,497 |
Leasehold Improvements | 17,311 | 0 | 0 | 17,311 | 12,465 | 4,846 | 0 | 17,311 | 0 | 4,846 |
Works and infrastructure | 1,152 | 0 | 0 | 1,152 | 428 | 29 | 0 | 457 | 695 | 724 |
Machinery and equipment | 85,607 | 891 | 0 | 86,498 | 50,973 | 8,605 | 0 | 59,578 | 26,920 | 34,634 |
Information technology equipment, in-house-developed and purchased software | 246,828 | 32,746 | 0 | 279,574 | 146,835 | 52,640 | 0 | 199,475 | 80,099 | 99,993 |
Vehicles | 30,511 | 1,900 | 0 | 32,411 | 24,666 | 3,146 | 0 | 27,812 | 4,599 | 5,845 |
Assets under construction | 193,658 | 33,823 | 29,664 | 197,817 | 0 | 0 | 0 | 0 | 197,817 | 193,658 |
Total | 789,599 | 137,990 | 0 | 927,589 | 304,877 | 77,904 | 0 | 382,781 | 544,808 | 484,722 |
The following table presents details of accounts payable and accrued liabilities:
Forecast 2012 (in thousands of dollars) |
|
---|---|
Payables to external parties | 44,511 |
Payables to other Federal Government departments and agencies | 39,179 |
Accrued salary, vacation pay and compensatory leave | 74,000 |
Total | 157,690 |
The deposit accounts were established to record cash and securities required to guarantee payment of customs duties and excise taxes on imported goods pursuant to the Customs Act and the Excise Tax Act and to guarantee the compliance of transporters and individuals with the provisions of the Immigration and Refugee Protection Act.
The following table presents details on the deposit accounts:
Forecast 2012 (in thousands of dollars) |
|
---|---|
Guarantee deposit accounts | 26,540 |
Other deposit accounts | 5,014 |
Total deposit accounts | 31,554 |
(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
two percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec pension plan benefits and they are indexed to inflation. Both the employees and the Agency contribute to the cost of the Plan.
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:
Forecast 2012 (in thousands of dollars) |
|
---|---|
Accrued benefit obligation, end of year | 233,751 |
(a) Contaminated sites
Liabilities are accrued to record the estimated costs related to the management and remediation of contaminated sites where the Agency is obligated or likely to be obligated to incur such costs.
The Agency's ongoing efforts to assess contaminated sites may result in additional environmental liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. These liabilities will be accrued in the year in which they become known.
(b) Claims and litigation
Claims have been made against the Agency in the normal course of operations. Legal proceedings for claims totaling approximately $1,786,000,000 were still pending as at December 20th, 2010.
Some of these claims and appeals 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 and expense are recorded in the financial statements. No expense has been estimated for the purpose of the Agency's 2011-2012 future-oriented Statement of Operations.
The Agency is related in terms of common ownership to all Government of Canada departments, agencies and Crown corporations. The Agency enters into transactions with these entities in the normal course of business and on normal trade terms. Also during the year, the Agency received services, which were obtained without charge from other government departments as presented in part (a).
(a) Services provided without charge
During the year, the Agency received without charge from other departments, accommodation, legal services, workers' compensation coverage and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the Agency's statement of operations as follows:
Forecast 2012 (in thousands of dollars) |
|
---|---|
Accommodation | 59,482 |
Employer's contribution to the health and dental insurance plans | 79,949 |
Workers' compensation coverage | 369 |
Legal services | 13,933 |
Total | 153,733 |
The Government has structured some of its administrative activities for efficiency and cost-effectiveness such that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the Agency's future oriented statement of operations.
(b) Administration of programs
The Agency has arrangements with the Canada Revenue Agency for the provision of information technology services, which are paid for on a quarterly basis for estimated to be a total of $140,000,000 in 2012.
(in thousands of dollars)
Forecast 2012 | |||||||||
---|---|---|---|---|---|---|---|---|---|
Risk Assessment | Secure and Trusted Partnerships | Admissibility Determination | Criminal Investigations | Immigration Enforcement | Recourse | Revenue and Trade Management | Internal Services | Total | |
Operating Expenses | |||||||||
Salaries and employee benefits | 119,131 | 48,322 | 468,456 | 17,228 | 113,781 | 7,392 | 51,621 | 515,086 | 1,341,017 |
Professional and special services | 22,337 | 9,060 | 87,833 | 3,230 | 21,333 | 1,386 | 9,679 | 96,576 | 251,434 |
Amortization | 6,921 | 2,807 | 27,214 | 1,001 | 6,610 | 430 | 2,999 | 29,922 | 77,904 |
Rental of land and buildings | 5,305 | 2,152 | 20,860 | 766 | 5,067 | 329 | 2,299 | 22,937 | 59,715 |
Transportation and telecommunication | 5,257 | 2,132 | 20,670 | 760 | 5,021 | 326 | 2,278 | 22,728 | 59,172 |
Consumable machinery and equipment (parts) | 2,341 | 950 | 9,207 | 339 | 2,236 | 145 | 1,015 | 10,124 | 26,357 |
Repair and maintenance | 2,071 | 840 | 8,145 | 299 | 1,978 | 129 | 898 | 8,956 | 23,316 |
Materials and supplies | 1,864 | 756 | 7,330 | 270 | 1,780 | 116 | 807 | 8,059 | 20,982 |
Other | 889 | 361 | 3,496 | 129 | 849 | 55 | 385 | 3,844 | 10,008 |
Bad debts | 54 | 22 | 212 | 8 | 52 | 3 | 23 | 233 | 607 |
Total Expenses | 166,170 | 67,402 | 653,423 | 24,030 | 158,707 | 10,311 | 72,004 | 718,465 | 1,870,512 |
Revenues | |||||||||
Sale of goods and services | 0 | 0 | 0 | 0 | 0 | 0 | 16,290 | 0 | 16,290 |
Forfeitures of cash bonds | 0 | 0 | 0 | 0 | 1,374 | 0 | 0 | 0 | 1,374 |
Miscellaneous | 23 | 10 | 60 | 4 | 4 | 0 | 1,302 | 387 | 1,790 |
Seized property | 0 | 0 | 330 | 0 | 0 | 0 | 0 | 0 | 330 |
Interest, penalties and fines | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 145 | 145 |
Total Revenues | 23 | 10 | 390 | 4 | 1,378 | 0 | 17,592 | 532 | 19,929 |
Net Cost of Operations | 166,147 | 67,392 | 653,033 | 24,026 | 157,329 | 10,311 | 54,412 | 717,933 | 1,850,583 |