Archived – Financial statements, March 31, 2015

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Statement of management responsibility including internal control over financial reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2015, and all information contained in these statements, rests with the management of Statistics Canada (the Agency). These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.

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 Agency's financial transactions. Financial information, submitted in the preparation of the Public Accounts of Canada and included in the Agency's Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff; organizational arrangements that provide appropriate divisions of responsibility; communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Agency; and conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, assess the effectiveness of associated key controls, and make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2015, was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plans are summarized in the Annex to the Statement of Management Responsibility including Internal Control over Financial Reporting, which can be found at the end of the notes to these financial statements (Note 16).

The effectiveness and adequacy of the Agency's system of internal control is reviewed by the work of internal finance staff, who conduct periodic assessments of different areas of the Agency's operations, and by the Departmental Audit Committee (DAC), which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting. The DAC provides the Chief Statistician with objective advice and recommendations regarding the sufficiency, quality, and results of assurance on the adequacy and functioning of Statistics Canada's risk-management, control and governance processes (including accountability and auditing systems). It does this by using a risk-based approach, reviewing all core areas of the Agency's management, control and accountability processes, including reporting.

The financial statements of Statistics Canada have not been audited.

The original version was signed by
Wayne R. Smith, Chief Statistician
Stéphane Dufour, Chief Financial Officer
Date signed August 27, 2015

Statement of Financial Position (Unaudited)
As at March 31, 2015

(in thousands of dollars)
  2015 2014
Contractual obligations (Note 10)
Contingent liabilities (Note 11)

The accompanying notes form an integral part of these financial statements.
Liabilities    
Accounts payable and accrued liabilities (Note 4) 52,537 36,273
Vacation pay and compensatory leave 20,980 20,779
Deferred revenue (Note 5) 1,187 1,167
Lease obligation for tangible capital assets (Note 6) 392 484
Employee future benefits (Note 7b) 32,473 24,292
Total net liabilities 107,569 82,995
Financial assets    
Due from Consolidated Revenue Fund 50,434 34,457
Accounts receivable and advances (Note 8) 4,877 5,085
Total net financial assets 55,311 39,542
Departmental net debt 52,258 43,453
Non-financial assets    
Prepaid expenses 7,556 8,241
Consumable supplies 314 1,556
Tangible capital assets (Note 9) 137,963 126,862
Total non-financial assets 145,833 136,659
Departmental net financial position 93,575 93,206

The original version was signed by
Wayne R. Smith, Chief Statistician
Date signed August 28, 2015
Stéphane Dufour, Chief Financial Officer
Date signed August 27, 2015

Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31, 2015

(in thousands of dollars)
  Planned results
2015
2015 2014
Segmented information (Note 15)

The accompanying notes form an integral part of these financial statements.
Expenses      
Economic and environmental statistics 149,127 149,348 143,004
Socio-economic statistics 112,535 110,261 107,732
Censuses 11,408 76,127 61,781
Statistical infrastructure 141,857 132,880 151,453
Cost-recovered statistical services 89,455 81,193 79,980
Internal services 63,247 59,033 56,737
Total expenses 567,629 608,842 600,687
Revenues      
Special statistical services 89,455 84,766 90,909
Other revenues 100 79 93
Revenues earned on behalf of Government of Canada (100) (75) (93)
Total revenues 89,455 84,770 90,909
Net cost of operations before government funding and transfers 478,174 524,072 509,778
Government funding and transfers      
Net cash provided by Government of Canada   449,389 466,884
Change in due from Consolidated Revenue Fund   15,977 2,797
Services provided without charge by other federal government departments (Note 12a)   72,878 74,395
Transfer of the transition payments for implementing salary payments in arrears (Note 13)   (13,803) -
Transfer of assets to other government department (Note 14)   - (464)
Net cost of operations after government funding and transfers   (369) (33,834)
Departmental net financial position—beginning of year   93,206 59,372
Departmental net financial position—end of year   93,575 93,206
Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31, 2015

(in thousands of dollars)
  2015 2014
The accompanying notes form an integral part of these financial statements.
Net cost of operations after government funding and transfers (369) (33,834)
Change due to tangible capital assets    
Acquisition of tangible capital assets (Note 9) 35,715 33,247
Amortization of tangible capital assets (Note 9) (24,318) (25,130)
Net loss on disposal of tangible capital assets (296) (1,068)
Total change due to tangible capital assets 11,101 7,049
Change due to consumable supplies (1,242) 1,073
Change due to prepaid expenses (685) 1,825
Decrease in departmental net debt 8,805 (23,887)
Departmental net debt—beginning of year 43,453 67,340
Departmental net debt—end of year 52,258 43,453
Statement of Cash Flow (Unaudited)
For the Year Ended March 31, 2015

(in thousands of dollars)
  2015 2014
The accompanying notes form an integral part of these financial statements.
Operating activities    
Net cost of operations before government funding and transfers 524,072 509,778
Non-cash items:    
Amortization of tangible capital assets (Note 9) (24,318) (25,130)
Loss on disposal of tangible capital assets (296) (1,068)
Services provided without charge by other federal government departments (Note 12a) (72,878) (74,395)
Transition payments for implementing salary payments in arrears (Note 13) 13,803 -
Variations in Statement of Financial Position:    
(Increase) decrease in accounts payable and accrued liabilities (16,264) 3,058
(Increase) decrease in vacation pay and compensatory leave (201) 90
(Increase) in deferred revenue (20) (253)
(Increase) decrease in employee future benefits (8,181) 21,866
Decrease in accounts receivable and advances (208) (3,348)
Increase (decrease) in prepaid expenses (685) 1,825
Increase (decrease) in consumable supplies (1,242) 1,073
Transfer of assets to other government departments (Note 14) - 464
Cash used in operating activities 413,582 433,960
Capital investing activities    
Acquisitions of tangible capital assets, excluding capital leases (Note 9) 35,621 32,776
Cash used in capital investing activities 35,621 32,776
Financing activities    
Payments of lease obligation for tangible capital assets 186 148
Cash used in financing activities 186 148
Net cash provided by Government of Canada 449,389 466,884

Notes to the Financial Statements (Unaudited)
For the year ended March 31, 2015

1. Authority and objectives

Statistics Canada was established in 1918, pursuant to the Statistics Act. The Agency received full departmental status by order-in-council in 1965.

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

The Agency's mandate derives primarily from the Statistics Act. The act requires the Agency to—under the direction of the minister—collect, compile, analyze, and publish statistical information on the economic, social, and general conditions of the country and its citizens. Statistics Canada has a mandate to coordinate and manage the country's statistical system.

The Agency's mandate has two primary objectives:

  • 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. This information is used for public and private decision-making, and for the general benefit of all Canadians.
  • 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.

Effective April 1, 2013, the Agency adopted a new Program Alignment Architecture, which was approved through a Treasury Board submission. The Agency previously reported on four programs: Economic Statistics; Social Statistics; Census, Demography and Aboriginal Statistics; and Internal Services. The Agency now reports on the six programs described below.

Economic and Environmental Statistics — The program's purpose is to create a trusted, relevant and comprehensive source of information on the entire spectrum of Canada's economy in order to: inform public debate on economic issues; support economic policy development, implementation and evaluation; and guide business decision-making.

Socio-economic Statistics — The program's purpose is to provide integrated information and relevant analysis on the social and socio-economic characteristics of individuals, families, and households, and on the major factors that affect their well-being.

Censuses — The program's purpose is to provide statistical information, analyses and services that measure changes in the Canadian population, demographic characteristics, and the agricultural sector.

Statistical Infrastructure — The program's purpose is to provide activities and services to support a strong statistical system.

Cost-recovered Statistical Services — The program's purpose is to produce high-quality, cost-recovered statistical services that meet the needs of specific federal and provincial institutions, as well as other clients.

Internal Services — Internal services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization.

2. Summary of significant accounting policies

These financial statements have been prepared in accordance with the Treasury Board accounting policies in effect for the 2014–2015 fiscal year. These accounting policies, stated below, are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

  1. Parliamentary authorities — The Agency is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Agency do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3(a) provides a reconciliation between the bases of reporting. The planned result amounts in the "Expenses" and "Revenues" sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2014-2015 Report on Plans and Priorities. Planned results are not presented in the "Government funding and transfers" section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2014-2015 Report on Plans and Priorities.
  2. Net cash provided by 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 into the CRF, and all cash disbursements made by the Agency are paid from the CRF. The net cash provided by the Government of Canada is the difference between all cash receipts and all cash disbursements, including transactions between federal government departments.
  3. Amounts due from or to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Agency is entitled to draw from the CRF without further authorities to discharge its liabilities.
  4. Revenues
    • Revenues received for special statistical services are recorded as deferred revenue upon receipt. These amounts are recognized as revenue in the period in which the services are rendered and related expenses are incurred.
    • Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
    • Revenues that are non-respendable are not available to discharge the Agency's liabilities. While the deputy head is expected to maintain accounting control, he has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada, and are therefore presented in reduction of the entity's gross revenues.
  5. Expenses — Expenses are recorded on an accrual basis.
    • Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
    • Services provided without charge by other federal government departments for accommodation (office space), employer contributions to the health and dental insurance plans, legal services, and workers' compensation 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 pension 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 departmental obligation to 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.
    2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. 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 of Canada as a whole.
  7. Accounts receivable — Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.
  8. Contingent liabilities — Contingent liabilities are potential liabilities that 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. Consumable supplies — Consumable supplies include items held for future program delivery and not intended for resale. These supplies are recorded at the acquisition cost. If there is no longer a service potential, the supplies are valued at the lower of cost or net realizable value.
  10. 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, 2015. Gains and losses resulting from foreign currency transactions are included in the Statement of Operations and Departmental Net Financial Position.
  11. 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. The Agency does not capitalize intangibles.

    Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
    Amortization of tangible capital assets
    Asset class Amortization period
    Computer hardware 5 years
    Computer software 5 years
    Other equipment 5 years
    Motor vehicles 7 years
    Leasehold improvements 25 years
    Software under development Once in service
    Leased tangible capital assets Term of lease
    Software assets under development are recorded in the applicable capital asset class in the year that they become available for use. They are not amortized until that time.
  12. Measurement uncertainty — The preparation of these financial statements 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 future 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 authorities

The Agency receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities 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 authorities used
(in thousands of dollars)
  2015 2014
Net cost of operations before government funding and transfers 524,072 509,778
Adjustments for items affecting net cost of operations but not affecting authorities    
Add (Less):    
Amortization of tangible capital assets (Note 9) (24,318) (25,130)
Loss on disposal of tangible capital assets (296) (1,068)
Services provided without charge by other federal government departments (Note 12a) (72,878) (74,395)
Adjustments to accrued liabilities not charged to authorities 99 988
(Increase) decrease in vacation pay and compensatory leave (201) 90
(Increase) decrease in employee future benefits (8,181) 21,866
Refunds of previous years' expenditures 713 240
Increase in respendable accounts receivable 433  -
Consumption of prepaid expenses (9,000) (8,529)
Bad debt expense (137)  -
Consumable supplies usage (1,242)  -
Total items affecting net cost of operations but not affecting authorities (115,008) (85,938)
Adjustments for items not affecting net cost of operations but affecting authorities    
Accrued liabilities charged to authorities 213 4,227
Payment of lease obligations for tangible capital assets 186 148
Transition payments for implementing salary payments in arrears (Note 13) 13,803  -
Decrease in respendable accounts receivable  - (1,370)
Acquisitions of prepaid expenses 8,315 10,818
Acquisitions of consumable supplies  - 1,073
Acquisitions of tangible capital assets, excluding capital leases 35,621 32,776
Total items not affecting net cost of operations but affecting authorities 58,138 47,672
Current year authorities used 467,202 471,512
(b) Authorities provided and used
(in thousands of dollars)
  2015 2014
Authorities provided:    
Vote 105 - Operating expenditures 406,109 429,490
Statutory amounts 66,583 67,809
Total authorities provided 472,692 497,299
Less:    
Lapsed: Operating (5,490) (25,787)
Current year authorities used 467,202 471,512

4. Accounts payable and accrued liabilities

The following table presents details of the Agency's accounts payable and accrued liabilities:

Accounts payables and accrued liabilities (in thousands of dollars)
  2015 2014
Accounts payable - external parties 15,199 17,050
Accounts payable - other federal government departments and agencies 10,497 6,950
Accrued salaries and wages 26,841 11,961
Accrued liabilities  - 312
Total accounts payable and accrued liabilities 52,537  36,273

In Canada's Economic Action Plan 2012, the Government announced savings measures to be implemented by departments over the next three fiscal years, starting in 2012-2013. As a result, at March 31, 2015, the Agency recorded a nil obligation for termination benefits ($0.3 million in 2013-2014) as part of accrued liabilities to reflect the estimated workforce adjustment cost.

5. Deferred revenue

The Agency has the authority to expend revenue received during the fiscal year. Deferred revenue represents the balance at year-end of unearned revenue stemming from amounts received from external parties, which are restricted for specific statistical services. Revenue is recognized in the period in which these expenditures are incurred or in which the service is rendered. Details of the transactions related to this account are as follows:

Deferred revenue (in thousands of dollars)
  2015 2014
Opening balance 1,167 914
Amount received 84,786 91,162
Revenues recognized (84,766) (90,909)
Net closing balance 1,187 1,167

6. Lease obligation for tangible capital assets

The Agency has entered into agreements to lease photocopiers under capital lease, with a cost of $784 and accumulated amortization of $398 as at March 31, 2015 ($754 and $275, respectively, as at March 31, 2014). Obligations for the coming years include the following:

Lease obligation for tangible capital assets (in thousands of dollars)
  2015 2014
2015  - 180
2016 162 142
2017 138 118
2018 78 59
2019 and thereafter 24  -
Total future minimum lease payments 402 499
Less: imputed interest (1.15% to 2.79%) (10) (15)
Balance of obligations under leased tangible capital assets 392 484

7. Employee future benefits

(a) Pension benefits

The Agency's employees participate in the Public Service Pension Plan (the 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 Plan benefits, and are indexed to inflation.

Both the employees and the Agency contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012, and Group 2 relates to members who joined the Plan on or after January 1, 2013. Each group has a distinct contribution rate.

The 2014-2015 expense amounts to $46 million ($48 million in 2013-2014). For Group 1 members, the expense represents approximately 1.41 times (1.6 times in 2013-2014) employee contributions and, for Group 2 members, approximately 1.39 times (1.5 times in 2013-2014) employee contributions.

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 salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, follows.

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

Severance benefits (in thousands of dollars)
  2015 2014
Accrued benefit obligation - beginning of year 24,292 46,158
Expense or adjustment for the year 12,117 9,435
Benefits paid during the year (3,936) (31,301)
Accrued benefit obligation - end of year 32,473 24,292

8. Accounts receivable and advances

The following table presents details of the Agency's accounts receivable and advances balances:

Accounts receivable and advances (in thousands of dollars)
  2015 2014
Receivables - other federal government departments and agencies 1,089  1,458
Receivables - external parties 3,899 3,569 
Employee advances 39 73
Subtotal 5,027 5,100
Allowance for doubtful accounts on receivables from external parties (150) (15)
Net accounts receivable and advances 4,877 5,085

9. Tangible capital assets

Tangible capital assets (in thousands of dollars)
  Cost Accumulated amortization Net book value
Capital asset class Opening balance Acquisitions Disposals and write-offs Adjustments (1) Closing balance Opening balance Amortization Disposals and write-offs Adjustments (1) Closing balance 2015 2014
Computer hardware 6,349 109 257  - 6,201 6,132 165 251  - 6,046 155 217
Computer software 212,307 802 2,062 20,660  231,707 143,086 22,634 1,773  - 163,947 67,760 69,221
Other equipment 4,233 54 164  - 4,123 2,864 345 164  - 3,045 1,078 1,369
Motor vehicles 2,652  - 113  - 2,539 902 268 113  - 1,057 1,482 1,750
Leasehold improvements 18,002 1,441  -  - 19,443 4,434 720  -  - 5,154 14,289 13,568
Software under development 40,258 33,215  - (20,660) 52,813  -  -  -  -  - 52,813 40,258
Leased tangible capital assets 754 94 64  - 784 275 186 63  - 398 386 479
Total 284,555 35,715 2,660  - 317,610 157,693 24,318 2,364  - 179,647 137,963 126,862
(1) Adjustments of $20.7 million include software assets under development that were transferred to computer software upon completion of the assets.

In 2013-14, the Agency transferred computer hardware and other equipment with a cost of $0.7 million (net book value of $0) to Shared Services Canada.

10. Contractual obligations

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

Contractual obligations (in thousands of dollars)
  2016 2017 2018 2019 2020 Total
Licence, maintenance and/or support - software 1,330 1,510  -  -  - 2,840
Printing services 10,417 935  -  -  - 11,352
Total 11,747 2,445  -  -  - 14,192

11. Contingent liabilities

Claims and litigation

Claims have been made against the Agency in the normal course of operations. These claims include items with pleading amounts, and others for which no amount is specified. The total amount claimed in these actions is significant, and their outcomes are not determinable.

12. Related party transactions

The Agency is related, as a result of common ownership, to all federal government departments, agencies, and Crown corporations. The Agency enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Agency received common services which were obtained, without charge, from other federal government departments as disclosed below.

(a) Common services provided without charge by other federal government departments

During the year, the Agency received services without charge from certain common service organizations related to accommodation (office space), the employer's contribution to the health and dental insurance plans, workers' compensation coverage, and legal services. These services provided without charge have been recorded in the Agency's Statement of Operations and Departmental Net Financial Position as follows.

Common services provided without charge by other government departments (in thousands of dollars)
  2015 2014
Accommodation (office space) 37,953 38,899
Employer's contribution to the health and dental insurance plans 34,803 35,364
Worker's compensation 119 130
Legal services 3 2
Total 72,878 74,395

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes, and economical delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada and the email, network and data centre services and the workplace technology devices provided by Shared Services Canada, are not included in the Agency's Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with related parties

Other transactions with related parties (in thousands of dollars)
  2015 2014
Accounts payable - other federal government departments and agencies 10,497 6,950
Accounts receivable - other federal government departments and agencies 1,089 1,458
Expenses - other federal government departments and agencies 11,357 10,508
Revenues - other federal government departments and agencies 65,705 74,698

Expenses and revenues disclosed in (b) exclude common services provided without charge, which are disclosed in (a).

13. Transfer of the transition payments for implementing salary payments in arrears

The Government of Canada implemented salary payments in arrears in 2014-2015. As a result, a one-time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay processes. This change to the pay system had no impact on the expenses of the Department. However, it did result in the use of additional spending authorities by the Department. Prior to year end, the transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Works and Government Services Canada, who is responsible for the administration of the Government pay system.

14. Transfer of assets to other government department

Effective April 1, 2013, the Agency transferred responsibility for workplace technology devices (WTD) (formerly known as end user devices) to Shared Services Canada, in accordance with orders-in-council P.C. 2013-0366 and 2013-0368. Accordingly, the Agency transferred the following assets, related to WTD, to Shared Services Canada on April 1, 2013:

Transfers to other government departments (in thousands of dollars)
  2015 2014
Assets    
Prepaid expenses  - 464
Total assets transferred  - 464
Adjustment to the departmental net financial position  - 464

During the transition period from April 1, 2013 to March 31, 2014, the Agency, on behalf of Shared Services Canada, continued to administer the transferred activities. The administered expenses amounted to $0.9 million for the year, which includes $0.5 million in transferred prepaid expenses. These expenses are not recorded in these financial statements.

15. Segmented information

Presentation by segment is based on the Agency's Program Alignment Architecture. The presentation by segment is based on the same accounting policies as described in the summary of significant accounting policies in Note 2. The following table presents the expenses incurred and the revenues generated for the main program activities, by major object of expenses and by major type of revenues.

Segmented information (in thousands of dollars)
  Economic and Environmental Statistics Socio-economic Statistics Censuses Statistical Infrastructure Cost-recovered Statistical Services Internal Services 2015 Total 2014
Operating expenses                
Salaries and employee benefits 127,731 89,639 57,570 96,779 65,375 49,277 486,371 477,414
Accommodation (office space) 9,967 6,995 4,492 7,552 5,101 3,846 37,953 38,899
Professional services 1,947 2,806 2,883 10,338 5,754 1,936 25,664 24,396
Transportation and postage 1,609 6,373 1,511 1,351 3,296 206 14,346 12,727
Amortization 6,852 3,110 3,008 10,628  - 720 24,318 25,130
Repairs and maintenance 10 32 39 469 14 8 572 677
Materials and supplies 371 510 490 3,197 410 705 5,683 8,044
Rentals 621 628 5,662 2,278 1,058 2,175 12,422 11,569
Communication and printing 235 156 405 187 44 38 1,065 716
Loss on disposal of tangible capital assets 5 11 64 96 3 117 296 1,068
Interest component on leased tangible capital assets  -  -  2 3  - 4 9 7
Bad debts  -  -  -  -  137  - 137  -
Other  - 1 1 2 1 1 6 40
Total operating expenses 149,348 110,261 76,127 132,880 81,193 59,033 608,842 600,687
Revenues                
Special statistical services  -  - 8,000  - 76,766  - 84,766 90,909
Other revenues  -  -  -  - 79  - 79 93
Revenues earned on behalf of Government  -  -  -  - (75)  - (75) (93)
Total Revenues  -  - 8,000  - 76,770  - 84,770 90,909
Net cost from continuing operations 149,348 110,261 68,127 132,880 4,423 59,033 524,072 509,778

16. Summary of the assessment of effectiveness of the system of internal control over financial reporting and Statistics Canada's action plan for fiscal year 2014-15

Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting

1. Introduction

This document provides summary information on the measures taken by Statistics Canada to maintain an effective system of internal control over financial reporting (ICFR), including information on internal control management, assessment results and related action plans.

Detailed information on Statistics Canada's authority, mandate and program activities can be found in its Departmental Performance Report and Report on Plans and Priorities.

2. Departmental system of internal control over financial reporting

2.1 Internal control management

Statistics Canada has a well-established governance and accountability structure to support departmental assessment efforts and the oversight of its system of internal control. A departmental internal control management framework, approved by the deputy head and reviewed by the Departmental Audit Committee (DAC), is in place and includes

  • organizational accountability structures as they relate to internal control management to support sound financial management, including roles and responsibilities of senior managers in their areas of responsibility for control management
  • values and ethics considerations
  • ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control
  • updates at least twice a year on the ICFR, as well as the provision of related assessment results and action plans to the deputy head, departmental senior management and DAC.

DAC provides advice to the deputy head on the adequacy and effectiveness of the Agency's risk-management, control and governance frameworks and processes.

2.2 Service arrangements relevant to financial statements

The Agency relies on other organizations to process certain transactions that are recorded in its financial statements, as noted below.

Common arrangements

  • For the processing of all external financial transactions, Statistics Canada uses the Common Departmental Financial System. This system, shared across various departments, is hosted by Public Works and Government Services Canada (PWGSC).
  • PWGSC centrally administers the payment of salaries, oversees and delegates the procurement of goods and services (in accordance with the Agency's delegation of authority), and provides accommodation services.
  • The Treasury Board of Canada Secretariat provides the Agency with information that is used to calculate various accruals and allowances, such as the accrued employee future benefits.
  • The Department of Justice Canada provides legal services to Statistics Canada.
  • Shared Services Canada (SSC) provides information technology (IT) infrastructure services to the agency for data-centre and network services. The scope and responsibilities will be addressed in a framework that is being developed by SSC and will be shared with partner organizations.

3. Departmental assessment results during fiscal year 2014–2015

The key findings from the current year's assessment activities and the significant adjustments are summarized below.

New or significantly amended key controls — In the current year, there were no significantly amended key controls in existing processes that required a reassessment.

Ongoing monitoring program — As part of its ongoing monitoring plan, the Agency completed its reassessment of direct and precise monitoring, financial close and reporting, budgeting and forecasting, operating expenditures, high- and medium-risk areas of IT general controls, entity-level controls, and census pay. For the most part, the key controls tested performed as intended, with some remediation suggested to strengthen the control environment.

The following weaknesses from current and prior years are being addressed in the coming fiscal year:

  • timely and efficient removal of user access to administrative systems
  • additional reconciliation procedures
  • enhanced evidence of review and approvals
  • increased documentation of control procedures
  • additional approvals of master data.

Finally, all recommendations from this year's census pay testing will be implemented prior to the start of the 2016 Census collection period.

4. Statistics Canada's action plan

4.1 Progress during fiscal year 2014-2015

The Agency continued its ongoing monitoring according to the previous fiscal year's plan, as shown in the table below. Remediation actions have been assigned and are in progress.

Progress during fiscal year 2014-2015
Previous year's ongoing monitoring plan Status
Financial closing and reporting Completed
Budgeting and forecasting Completed
Operating expenditures Completed
Direct and precise monitoring Completed
IT general controls (high- and medium-risk areas) Completed

In 2014-15, the Agency also performed the following work:

Work the Agency performed in 2013-2014
Additional work Status
Operating-effectiveness testing: Entity-level controls Completed
Design and implementation testing: 2016 Census pay cycle Completed

Follow-ups were done on the previous years' testing recommendations and proposed remediation plans.

In addition to the ongoing monitoring work described above, Statistics Canada has a rigorous pre- and post-payment verification process and governance in place. The Agency tests transactions, selected by random sample, for compliance with the Financial Administration Act and specific spending requirements.

4.2 Action plan for the next fiscal year and subsequent years

The Agency's ongoing monitoring plan over the next three years, based on an annual validation of the high-risk processes and controls, and related adjustments, is shown in the following table:

Ongoing Monitoring Plan
Key control areas Operating effectiveness testing rotation
Fiscal year
2015-2016
Fiscal year
2016-2017
Fiscal year
2017-2018
Financial closing and reporting X X X
Budgeting and forecasting X X X
Payroll and benefits X   X
Interviewers' pay X   X
Capital assets X   X
Operating expenditures   X  
Revenue X   X
Census X    
Direct and precise monitoring X X X
Entity-level controls     X
IT general controls X X X

Ongoing follow-ups will be performed on the previous years' testing recommendations and proposed remediation plans. In addition, the business process narratives will be updated, and design and implementation testing will be performed as required.

The services of an external consultant have been retained to provide independent, objective advice and to assist in performing the annual testing.

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