Appendix E
Example of a public sector entity classification decision

Public sector classification decision

Part 1 Introduction

Entity
Provincial Racing Commission

Government
Province of Xxxxxxxxxxx

Decision
Autonomous organization within the "autonomous organizations" category of the provincial and territorial general government sub-component of the provincial and territorial government sub-sector of the government sector.

Entity information

"Originally established in 19XX under the Provincial Racing Commission Act, the Provincial Racing Commission [the Commission] is a Crown agency of the government responsible for regulating the horse racing industry in the province. The Commission reports to the Minister and assists the Ministry in fulfilling its responsibilities in ensuring public confidence and social controls in the gaming sector. The Commission maintains the integrity of the horse racing industry through regulation and standards setting.

In response to changes in the industry, the Government passed new legislation in 200X, called the Provincial Racing Commission Act, 200X The Act converted the Provincial Racing Commission to a self-financing regulatory agency with a Governing Board."

Source of information : Provincial Racing Commission's website: www.provincialracingcommission.ca

"On December 15, 200X the new Provincial Racing Commission Act 200X was proclaimed in force. Introduction of the new Act was motivated by two objectives:

• strengthen and modernize the Commission's regulatory framework; and
• establish the Commission as a self financing body."

Source of information: Provincial Racing Commission's website: www.provincialracingcommission.ca

"Effective December 15, 200X, the Provincial Racing Commission Act continued the Provincial Racing Commission (the Commission) as an independent regulatory agency of the Crown. The Commission is responsible to govern, direct, control and regulate horse racing in the province."

Source of information: Provincial Racing Commission's 200X to 200X Annual Report; Note 1 to the Financial Statements

Part 2 Classification criteria

1.0 Institutional unit

• It is entitled to own assets in its own right.
• It is able to make economic decisions and engage in activities for which it can be held directly responsible and accountable by law.
• It is able to incur liabilities on its own behalf, enter into contracts and accept obligations.
• It maintains a complete set of accounts separate from a government.

2.0 Government control indicators

• The entity was created by government legislation.
• Direct control is held by possessing 100% of the voting equity.
• The government determines the general policy or program of the entity.
• The government appoints members to the board of directors.
• The entity's assets revert back to a government in the event of liquidation or dissolution.
• The Lieutenant Governor in Council or a Minister holds control.
• Its budget is approved by the government.
• It submits an annual, audited report to a government.
• Its financial accounts are subject to examination by the Auditor General.
• The government does not finance the entity's current operations, in total or large part.
• The government does not finance the entity's investments.
• The government does not approve or guarantee loans contracted by the entity.

3.0 Public sector indicators for non-market producers

• It performs a regulatory function.
• It is exempt from income tax.
• It is not constituted as a trust fund.
• It does not provide goods and/or services only to a government.
• It administers government policy (regulation of horse racing activity) by delivering specific services as an agent of the government. The services provide a collective benefit.
• The public has no free choice to acquire or reject the good or service from a government.
• It does not charge prices that are economically significant.
• It gets its primary income from non-market activity.
• Government transfers or grants do not cover any deficit generated by the entity.
• The entity's employees negotiate collective agreements with a government.

4.0 Public sector indicators for market producers

• It does not have the financial and operational authority to carry on a business.
• It does not compete in the market place.
• The public has no free choice to acquire or reject the good or service.
• It does not charge prices that are economically significant.
• It does not get its primary income from market activity.
• It cannot borrow autonomously.
• It does not remit profits and/or dividends to a government.

5.0 Inclusion in the public sector based on economic ownership

• It is not responsible for a pension fund's liabilities.
• It is not the primary beneficiary to a variable interest entity.
• It is not the lessee in a long-term asset purchase agreement.
• It is not a partner in a public-private partnership.

Part 3 Classification rationale

The Provincial Racing Commission (the Commission) is a Crown agency of the government responsible for regulating the horse racing industry in the province. The Commission reports to the Minister and assists the Ministry in fulfilling its responsibilities in ensuring public confidence and social controls in the gaming sector. The Commission maintains the integrity of the horse racing industry through regulation and standards setting.

This organization satisfies the first inclusion criterion; it is an institutional unit. It also meets the second inclusion criterion; it is controlled by government.

In the determination of its economic sector, the criteria collectively indicate that the Commission is a non-market producer. While all factors were considered, the dominant conditions were its regulatory functions; compulsory services (licensing, registration, standards); and its administration of government policy to provide a collective benefit to the public. As well, it is a not-for-profit organization that does not compete in the marketplace. 

Due to the nature of its activities, the Provincial Racing Commission is classified as an autonomous organization in the "Autonomous Organizations" category within the Provincial and Territorial General Government sub-component of the Provincial and Territorial Government sub-sector of the Government Sector.

Supporting references to similar classification decisions

Prairie Racing Corporation

Supporting cross-references to classification standards

Guide to the Public Sector of Canada, Chapter 4

Financial Management System (FMS) Manual, Chapter 3

Part 4 Other information

Information sources

The Provincial Racing Commission's website http://www.provincialracingcommission.ca
Provincial Racing Commission Act 200X
Provincial Racing Commission's 200X to 200X Annual Report

Contact information

Contact name: Xxxxx  Xxxxxxx

Title: Director of Finance and Administration

Address:
100 Main Street
City, Province
X0X 0X0

Telephone: (999) 999-9999

Fax: (999) 999-9999

E-mail: inquiry@provincialracingcommission.ca

Web site: http://www.provincialracingcommission.ca

Institutional units owned by this entity

None

Part 5 Classification profiling

Part 6 Employee and financial information

Employee information

Employees: Yes
Number of employees: Not available

Financial information for the period ended March 31, 200X

Gross revenue: $15,665,000
Gross expenditures: $12,484,000
Total assets: $5,685,000
Net depreciable assets: $325,000

Part 7 Classification decision implementation dates

1. Entity incorporation date: Year: XXXX
2. Public sector universe inclusion date: Current production cycle:  April 1, 200X
3. Fiscal year data capture effective date: 200X to 200X
4. Historical revision statistical reclassification period: From: December 15, 200X to: March 31, 200X

Part 8 Request for classification decision initiator

Name:
Junior Classification Officer
Classification and Dissemination Section
Public Institutions Division

Date: May 20, 200X

Reviewed by:
Senior Classification Officer
Classification and Dissemination Section
Public Institutions Division

Date: May 21, 200X

Part 9 Classification decision approval

Public Sector Classification Decision Committee:

Committee Chairperson and Assistant Director, Public Institutions Division
Director, Public Institutions Division
Chief, Classification and Dissemination Section, Public Institutions Division
Chief, Federal – Provincial Governments Section, Public Institutions Division
Chief, Local Government Section, Public Institutions Division

This classification decision was approved by the Committee and signed on June 12, 200X by the Chairperson of the Public Sector Classification Decision Committee, Public Institutions Division.