Financial Statements 2012-2013

Statement of Management Responsibility

Departmental management is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at January 30, 2012 and reflect the plans described in the Report on Plans and Priorities.

David Langtry	Heather Throop
Acting Chief Commissioner	Chief Financial Officer
Denis Pelchat
Deputy Chief Financial Officer

Ottawa, Canada

February 29, 2012

Future-Oriented Statement of Operations (Unaudited)

For the year ended March 31 (in dollars)	Estimated Results 2012	Planned Results 2013
Expenses
Human Rights Knowledge Development and Dissemination Program	4,896,817	4,722,513
Discrimination Prevention Program	5,118,298	5,437,096
Human Rights Dispute Resolution Program	9,994,344	10,510,204
Internal Services	8,079,703	8,893,766
Total Expenses	28,089,162	29,563,579
Revenues
Internal Services	637,300	900,000
Total Revenues	637,300	900,000
Net Cost of Operations	27,451,862	28,663,579

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to January 31, 2012.

Segmented information (Note 11)

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

Future-Oriented Statement of Financial Position (Unaudited)

As at March 31 (in dollars)	Estimated Results 2012	Planned Results 2013
ASSETS
Financial Assets
Due from Consolidated Revenue Fund	1,529,969	1,570,240
Accounts Receivable and Advances (Note 6)	181,149	146,793
Total Financial Assets	1,711,118	1,717,033
Non-Financial Assets
Prepaid Expenses	14,507	15,795
Tangible Capital Assets (Note 7)	1,043,731	838,963
Total Non-Financial Assets	1,058,238	854,758
Total Assets	2,769,356	2,571,791
LIABILITIES AND EQUITY OF CANADA
Liabilities
Accounts Payable and Accrued Liabilities (Note 8)	1,578,654	1,609,562
Vacation Pay and Compensatory Leave	980,200	1,001,371
Employee Future Benefits (Note 9)	2,335,925	2,514,195
Total Liabilities	4,894,779	5,125,128
Equity of Canada	(2,125,423)	(2,553,337)
Total Liabilities and Equity of Canada	2,769,356	2,571,791

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to January 31, 2012.

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

Future-Oriented Statement of Equity of Canada (Unaudited)

For the year ended March 31 (in dollars)	Estimated Results 2012	Planned Results 2013
Equity of Canada, Beginning of Year	(3,317,279)	(2,125,423)
Net Cost of Operations	(27,451,862)	(28,663,579)
Change in Due from the Consolidated Revenue Fund	(110,811)	40,271
Net cash provided by the Government of Canada	24,745,334	24,357,847
Services provided without charge from other government departments (Note 10)	4,009,195	3,837,547
Equity of Canada, End of Year	(2,125,423)	(2,553,337)

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to January 31, 2012.

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

Future-Oriented Statement of Cash Flow (Unaudited)

For the year ended March 31 (in dollars)	Estimated Results 2012	Planned Results 2013
OPERATING ACTIVITIES
Net Cost of Operations	27,451,862	28,663,579
Non-Cash Items:
Amortization of Tangible Capital Assets (Note 7)	(241,413)	(282,308)
Services provided without charge from other government departments (Note 10)	(4,009,195)	(3,837,547)
Variations in Statement of Financial Position:
Increase (decrease) in Accounts Receivable and Advances	7,677	(34,356)
Increase (decrease) in Prepaid Expenses	(2,830)	1,288
Decrease (increase) in Liabilities	1,313,595	(230,349)
Cash used in Operating Activities	24,519,696	24,280,307
CAPITAL INVESTING ACTIVITIES
Acquisitions of Tangible Capital Assets (Note 7)	225,638	77,540
Cash used in Capital Investing Activities	225,638	77,540
Net Cash Provided by Government of Canada	24,745,334	24,357,847

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to January 31, 2012.

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

Notes to the Future-Oriented Financial Statements (Unaudited)

1. Authority and Objectives

The Canadian Human Rights Commission was established in 1977 under Schedule II of the Financial Administration Act in accordance with the Canadian Human Rights Act. The Commission is responsible for the administration of the Canadian Human Rights Act (CHRA) and ensures compliance with the Employment Equity Act (EEA).

Human Rights Knowledge Development and Dissemination Program

This program helps foster both an understanding of and compliance with the CHRA and the EEA. Knowledge development also ensures that programs, interventions and decisions are grounded in evidence and best practices. Knowledge products include research, policies, regulatory instruments and special reports. Information and/or advice are provided to the Commission itself, Parliament, federal departments and agencies, Crown corporations, federally regulated private sector organizations, and the public. Partnerships with other human rights commissions as well as with governmental, non-governmental, research and international organizations are formed and maintained to leverage knowledge development and dissemination activities in areas of common interest.

Discrimination Prevention Program

This program helps foster and sustain a human rights culture in federally regulated organizations by promoting continuous improvement of an organization’s human rights competencies. Prevention initiatives, employment equity audits, learning programs and events are among the program’s tools to prevent discrimination and achieve employment equity objectives. Stakeholder engagement involves federal departments and agencies, Crown corporations, private sector organizations, provincial and territorial government bodies, international agencies, unions and other non-governmental organizations.

Human Rights Dispute Resolution Program

This program addresses discrimination by dealing with individual and systemic complaints and issues brought by individuals or groups of individuals against federally regulated employers and service providers. The Commission exercises its discretion in choosing the most appropriate dispute resolution method, including investigation, mediation and conciliation. The Commission also serves as a screening body in determining whether further inquiry is warranted, participates in all pre-tribunal mediations and represents the public interest in appearing before the Tribunal.

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. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across the organization and not to those provided specifically to a program.

2. Methodology and Significant Assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the department as described in the Report on Plans and Priorities.

The main assumptions are as follows:

• (a) The Commission's activities will remain substantially the same as the previous year.
• (b) Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
• (c) Estimated year-end information for 2011−12 is used as the opening position for the 2012−13 planned results.

These assumptions are adopted as at January 30, 2012.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2011−12 and for 2012−13, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these future-oriented financial statements, the Commission has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented financial statements and the historical financial statements include:

• (a) The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
• (b) Implementation of new collective agreements.
• (c) Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Commission 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 Departmental Performance Report.

4. Summary of Significant Accounting Policies

The future-oriented financial statements have been prepared in accordance with the Treasury Board accounting policies in effect for the 2011−12 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:

a) Parliamentary Authorities
The Commission is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Commission 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 Future-oriented Statement of Operations and the Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the basis of reporting.

b) Net Cash Provided by Government
The Commission operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Commission is deposited to the CRF and all cash disbursements made by the Commission 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 Government.

c) Amounts Due from the CRF
Amounts due from 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 Commission is entitled to draw from the CRF without further appropriations to discharge its liabilities.

d) Revenues
Revenues from Internal Support Services are recorded on an accural basis in the accounts based on the services provided in the year.

e) Expenses
Expenses are recorded on the 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 government departments for accommodation, employer’s contribution to the health and dental insurance plans and worker’s compensation are recorded as operating expenses at their estimated cost.

f) Employee Future Benefits

• Pension Benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer pension plan administered by the Government. The Commission’s contributions to the Plan are charged to expenses in the year incurred and represent the Commission’s total departmental obligation to the Plan. Current legislation does not require the Commission to make contributions for any actuarial deficiencies of the Plan.
• 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.

g) Accounts Receivable
Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for receivables where recovery is considered uncertain.

h) Tangible Capital Assets
All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. The Commission does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections.

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful lives of the assets, as follows:

Asset class	Amortization period
Informatics hardware	3 to 5 years
Informatics software	3 to 5 years
Other equipment	1 to 15 years
Leasehold improvements	Over the remaining term of the lease

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are amortized the month after they are put into service.

5. Parliamentary Authorities

The Commission receives its funding through annual Parliamentary authorities. Items recognized in the Future-oriented Statement of Operations and Future-Oriented Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Commission 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) Authorities requested (in dollars)	Estimated Results 2012	Planned Results 2013
Authorities Requested
Vote 10 − Program expenditures	22,870,738	21,332,900
Statutory amount − Contribution to employee benefits plan	3,029,809	3,088,923
Forecast Authorities Available	25,900,547	24,421,823
Forecast current year lapse	1,268,780	-
Forecast authorities to be used	24,631,767	24,421,823

Forecast authorities presented reflect current forecasts of statutory items, approved initiatives included and expected to be included in Estimates documents and, when reasonable estimates can be made, estimates of amounts to be allocated from Treasury Board central votes.

(b) Reconciliation of Net Cost of Operations to forecast authorities to be used (in dollars)	Estimated Results 2012	Planned Results 2013
Net Cost of Operations	27,451,862	28,663,579
Adjustments for items affecting Net Cost of Operations but not affecting authorities:
Add (Less):
Amortization of Tangible Capital Assets (Note 7)	(241,413)	(282,308)
Decrease (increase) in Employee Future Benefits	1,364,975	(178,270)
Decrease in Vacation Pay and Compensatory Leave	(160,100)	(21,171)
Services provided without Charge by other Government Departments (Note 10)	(4,009,195)	(3,837,547)
	(3,045,733)	(4,319,296)
Adjustments for items not affecting Net Cost of Operations but affecting authorities:
Add (Less):
Acquisitions of Tangible Capital Assets (Note 7)	225,638	77,540
	225,638	77,540
Forecast authorities to be used	24,631,767	24,421,823

6. Accounts Receivable and Advances

(in dollars)	Estimated Results 2012	Planned Results 2013
Accounts Receivable
Other Government Departments	48,685	39,323
External Parties	129,964	104,970
Advances
Petty Cash	2,500	2,500
Total	181,149	146,793

7. Tangible Capital Assets

(in dollars)	Estimated Results 2012	Planned Results 2013
Opening balance	1,059,506	1,043,731
Acquisition of Tangible Capital Assets	225,638	77,540
Less: Current year amortization	(241,413)	(282,308)
Net Book Value	1,043,731	838,963

8. Accounts Payable and Accrued Liabilities

(in dollars)	Estimated Results 2012	Planned Results 2013
Account Payable
Other Government Departments	522,231	555,664
External Parties	550,910	548,197
Accrued Salaries	505,513	505,701
Total	1,578,654	1,609,562

9. Employee Future Benefits

(a) Pension benefits:

The Commission’s employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2% 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 Commission contribute to the cost of the Plan. The forecast expenses are $2,178,433 in 2011–12 and $2,220,936 in 2012–13 representing approximately 1.9 times the contributions of employees in 2010–11.

The Commission’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 Commission 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 authorities.

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 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.

Information about the severance benefits, estimated as at the date of these statements, is as follows:

(in dollars)	Estimated Results 2012	Planned Results 2013
Accrued benefit obligation, beginning of year	3,700,900	2,335,925
Expense for the year	12,858	561,970
Expected benefit payments during the year	(1,377,833)	(383,700)
Accrued benefit obligation, end of year	2,335,925	2,514,195

10. Related party transactions

The Commission is related as a result of common ownership to all Government departments, agencies, and Crown corporations. The Commission enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the Commission provides Internal Support Services to other government departments related to the provision of Finance, Compensation, Procurement, Administration and Information Technology services. Since the new section 29.1(2)(a) of the Financial Administration Act received the Royal Assent on June 26, 2011, Internal Support Services agreements will be recorded as revenue rather than as a cost recovery.

The forecast revenues are $892,300 ($255,000 as a cost recovery and $637,300 as a revenue) in 2011−12 and $900,000 in 2012−13. During the year, the Commission also received common services which were obtained without charge from other Government departments as disclosed below.

(in dollars)	Estimated Results 2012	Planned Results 2013
Accommodation	2,492,475	2,318,716
Employer's contributions to the health and dental insurance plans	1,510,976	1,513,059
Workers’ compensation	5,744	5,772
Total	4,009,195	3,837,547

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic 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, are not included in the Commission’s Future-oriented Statement of Operations. 

11. Segmented information

The presentation by segment is based on the Commission’s program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 4. The following table presents the forecasted expenses incurred and forecasted revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

(in dollars)	Total 2012	2013
		Human Rights Development and Dissemination Program	Discrimination Prevention Program	Human Rights Dispute Resolution Program	Internal Services	Total
Operating Expenses
Salaries and employee benefits	21,117,844	3,455,566	4,183,829	8,175,677	6,792,824	22,607,896
Accommodation	2,492,475	322,075	477,749	815,244	703,648	2,318,716
Professional and special services	2,083,977	446,771	328,046	750,864	741,518	2,267,199
Travel and Relocation	836,288	261,516	189,289	359,879	21,467	832,151
Communication	369,676	38,897	81,430	142,805	104,716	367,848
Information	241,413	18,383	87,284	101,547	75,094	282,308
Rentals	237,217	92,344	19,969	10,048	102,639	225,000
Amortization of tangible capital assets	136,928	19,607	15,236	48,985	106,173	190,001
Utilities, materials and supplies	182,218	14,458	22,861	62,349	80,332	180,000
Repairs and maintenance	161,367	46,812	28,061	33,596	61,531	170,000
Equipment expenses	221,802	6,084	3,342	9,210	103,824	122,460
Other	7,957	-	-	-	-	-
Total Expenses	28,089,162	4,722,513	5,437,096	10,510,204	8,893,766	29,563,579
Revenues - Internal Support Services	637,300	-	-	-	900,000	900,000
Net Cost of Operations	27,451,862	4,722,513	5,437,096	10,510,204	7,993,766	28,663,579