2017-18 Financial Statements

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, 2018 and all information contained in these financial statements rests with the management of the Canadian Human Rights Commission (the Commission). These financial statements have been prepared by management using the Government of Canada'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 Commission’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Commission's Departmental Results 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, directives 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; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Commission and through 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, to assess effectiveness of associated key controls, and to make any necessary adjustments.

The Commission is subject to periodic Core Control Audits performed by the Office of the Comptroller General of Canada (OCG) and uses the results of such audits to comply with the Treasury Board Policy on Financial Management.A Core Control Audit was performed in 2011-12 by the OCG. The Audit Report and related Management Action Plan are posted on the Commission's web site.

In the interim, since the last OCG audit, the Commission has undertaken an annual external audit of its system of ICFR in accordance with the Treasury Board Policy on Financial Management, and the results and action plan are summarized in the annex.

The financial statements of the Commission have not been audited.

_______________________________________
Marie-Claude Landry, Ad. E.
Chief Commissioner
_______________________________________
Luc Bélanger
Deputy Chief Financial Officer
Ottawa, Canada
 

Statement of Financial Position (Unaudited)

As at March 31

(in dollars) 2018 2017
Liabilities
Accounts Payable and Accrued Liabilities (note 5) 3,504,373 3,028,272
Vacation Pay and Compensatory Leave 1,188,900 963,200
Employee Future Benefits (note 6) 862,400 840,500
Total Liabilities 5,555,673 4,831,972
Financial Assets
Due from the Consolidated Revenue Fund 3,099,042 2,422,177
Accounts Receivable and Advances (note 7) 872,775 775,143
Total Financial Assets 3,926,817 3,197,320
Net Debt 1,628,856 1,634,652
Non-Financial Assets
Prepaid Expenses 61,186 56,763
Tangible Capital Assets (note 8) 1,836,905 1,588,191
Total Non-Financial Assets 1,898,091 1,644,954
Net Financial Position 269,235 10,302

Contractual obligations (note 9)

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

 

_______________________________________
Marie-Claude Landry, Ad. E.
Chief Commissioner

_______________________________________
Luc Bélanger
Deputy Chief Financial Officer

Ottawa, Canada

 

 

Statement of Operations and Net Financial Position (Unaudited)

For the year ended March 31

(in dollars) Planned Results 2018 2018 2017
Expenses
Engagement and Advocacy 5,504,753 5,368,875 -
Human Rights Complaints 10,917,276 10,773,033 -
Employment Equity Audits 1,423,165 1,373,516 -
Human Rights Program - - 17,079,268
Internal Services 9,078,091 11,052,501 9,342,942
Total Expenses 26,923,285 28,567,925 26,422,210
Revenues
Internal Support Services 1,200,000 2,035,984 1,397,329
Miscellaneous Revenues - 310 794
Revenues Earned on Behalf of Government - (310) (794)
Total Revenues 1,200,000 2,035,984 1,397,329
Net Cost of Operations Before Government Funding and Transfers 25,723,285 26,531,941 25,024,881
Government Funding and Transfers
Net Cash Provided by Government   22,015,518  21,663,703
Change in due from Consolidated Revenue Fund   676,865 45,070
Services Provided Without Charge by Other Government Departments (note 10)   4,098,491 4,045,129
Net Cost (Revenue) of Operations after Government Funding and Transfers   (258,933) (719,021)
Net Financial Position - Beginning of Year   10,302 (708,719)
Net Financial Position - End of Year   269,235 10,302

Segmented information (note 11)

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

 

Statement of Change in Net Debt (Unaudited)

For the year ended March 31

(in dollars) 2018 2017
Net Cost (Revenue) of Operations after Government Funding and Transfers (258,933) (719,021)
Change due to Tangible Capital Assets
Acquisition of tangible capital assets (note 8) 642,382 634,957
Amortization of tangible capital assets (note 8) (369,301) (221,939)
Loss on write-off of tangible capital assets (note 8) (24,367) (6,046)
Total change due to tangible capital assets 248,714 406,972
Change Due to Prepaid Expenses 4,423 47,030
Net Decrease in Net Debt (5,796) (265,019)
Net Debt - Beginning of Year 1,634,652 1,899,671
Net Debt - End of Year 1,628,856 1,634,652

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

 

Statement of Cash Flow (unaudited)

For the year ended March 31

(in dollars) 2018 2017
Operating Activities
Net Cost of Operations Before Government Funding and Transfers 26,531,941  25,024,881
Non-Cash Items:
Amortization of tangible capital assets (note 8) (369,301) (221,939)
Services provided without charge by other government departments (note 10) (4,098,491) (4,045,129)
Loss on write-off of tangible capital assets (note 8) (24,367) (6,046)
Variations in Statement of Financial Position:
Increase in accounts receivable and advances 52,632 644,457
Increase in prepaid expenses 4,423 47,030
Increase in accounts payable and accrued liabilities (476,101) (543,208)
Increase in vacation pay and compensatory leave (225,700) (142,600)
Decrease in employee future benefits (21,900) 261,300
Cash used in operating activities 21,373,136 21,018,746
Capital Investing Activities
Acquisitions of tangible capital assets (note 8) 642,382 634,957
Cash used in capital activities 642,382 634,957
Net Cash Provided by Government of Canada 22,015,518 21,663,703

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

 

Notes to the Financial Statements (Unaudited)

1. Authority and Objectives

The Canadian Human Rights Commission (the Commission) was established in 1977 under Schedule I.1 of the Financial Administration Act in accordance with the Canadian Human Rights Act.

The Commission leads the administration of the CHRA and ensures compliance with the Employment Equity Act (EEA). The CHRA prohibits discrimination and the EEA promotes equality in the workplace. Both laws apply the principles of equal opportunity and non-discrimination to federal government departments and agencies, Crown corporations, and federally regulated private sector organizations.

We exist to help ensure that everyone in Canada is treated fairly, no matter who they are.

Engagement and Advocacy

Provide a national credible voice for equality in Canada - my Canada includes everyone; promote broadly human rights in Canada by raising public awareness of human rights issues; and engage civil society, governments, employers and the public in dialogue and action to affect human rights change.

Human Rights Complaints

Provide victims of discrimination with a mechanism to file human rights complaints and obtain redress/remedies as a result of the discrimination; reduce instances of systemic discrimination; and represent the public interest in legal cases to advance human rights in Canada.

Employment Equity Audits

Ensure employer's compliance with employment equity statutory requirements; encourage employers to identify barriers to employment and implement best practices to eliminate gaps in the representation of women, visible minority groups, aboriginal peoples and persons with disabilities.

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. Internal services include only those activities and resources that apply across an organization, and not those provided to a specific program. The groups of activities 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; and Acquisition Services.

2. Summary of Significant Accounting Policies

These financial statements have been prepared using the Government's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

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 Statement of Operations and Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 4 provides a reconciliation between the bases of reporting. The planned results amounts in the “Expenses” and “Revenues” sections of the Statement of Operations and Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2017-18 Departmental Plan. Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Net Financial Position and in the Statement of Change in Net Debt because these amounts were not included in the 2017-18 Departmental Plan.

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) Due from the Consolidated Revenue Fund

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 authorities to discharge its liabilities.

d) Revenues

  • Revenues from Internal Support Services 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 Commission's liabilities. While the Chief Commissioner is expected to maintain accounting control, she 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.

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 contributions to the health and dental insurance plans and workers' compensation are recorded as operating expenses at their estimated carrying value.

f) Employee future benefits

  • Pension benefits: Eligible employees participate in the Public Service Pension Plan (Plan), a multiemployer pension plan administered by the Government of Canada. The Commission’s contributions to the Plan are charged to expenses in the year incurred and represent the Commission's total obligation to the Plan. 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.
  • Severance benefits: The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits 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 initially recorded at cost. When necessary, an allowance for valuation is recorded to reduce the carrying calue of accounts receivable to amounts that approximate their net recoverable value.

h) Tangible capital assets

All tangible capital assets 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 First Nations reserves and museum collections.

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

Asset Class Amortization Period
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 lease

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

i) Related party transactions

Related party transactions, other than inter-entity transactions, are recorded at the exchange amount.

Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:

i. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.

ii. Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.

i) 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 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. Adoption of new accounting standards

The Public Sector Accounting Board (PSAB) issued five new accounting standards effective for fiscal years beginning on or after April 1, 2017. The new accounting standards are Related Party Disclosures (PS2200), Contingent Assets (PS3320), Assets (PS3210), Contractual Rights (PS3380), and Inter-entity Transactions (PS3420). The adoption of these standards only impacted note disclosure and did not result in any significant changes other than the creation of note 2i) to describe the accounting policy for related party transactions and additional disclosures in the related party transactions and contractual obligations notes 10 and 9 respectively.

4. Parliamentary Authorities

The Commission receives its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and 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 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) Reconciliation of net cost of operations to current year authorities used

(in dollars) 2018 2017
Net cost of operations before government funding 26,531,941 25,024,881
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (note 10) (4,098,491) (4,045,129)
Amortization of tangible capital assets (note 8) (369,301) (212,939)
Loss on write-off of tangible capital assets (note 8) (24,367) (6,046)
Increase in vacation pay and compensatory leave (255,700) (142,600)
Decrease in employee future benefits (21,900) 261,300
Refund of prior years' expenditures 6,498 2,260
Adjustments to prior year's accounts payable and account receivable 85,959 10,577
  (4,647,302) (4,141,577)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets (note 8) 642,382 634,957
Refunds of program expenditures 131,596 105,795
Increase in other advances (note 7) 15,656 9,496
Employee overpayments 228,599 -
Increase in prepaid expenses 4,423 47,030
  1,022,656 797,278
Current Year Authorities Used 22,907,295 21,680,582

 

b) Authorities provided and used

(in dollars) 2018 2017
Authorities Provided:
Vote 1 - Program expenditures 20,853,034 20,059,203
Proceeds from the disposal of surplus Crown assets 105 753
Statutory amounts - Contributions to employee benefits plan 2,412,483 2,445,592
Less:
Authorites available for future years  207 (207)
Lapsed Authorities (358,534) (824,759)
Current Year Authorities Used 22,907,295 21,680,582

5. Accounts Payable and Accrued Liabilities

(in dollars) 2018 2017
Accounts Payable - Other Government Departments and Agencies 427,643 473,414
Accounts Payable - External Parties 1,270,941 1,045,462
Total Accounts Payable 1,698,584 1,518,876
Accrued Salaries 1,805,789 1,509,396
Total Accounts Payable and Accrued Liabilities 3,504,373 3,028,272

 

6. Employee Future Benefits

a) Pension benefits

The Commission'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 Plans benefits and they are indexed to inflation.

Both the employees and the Commission 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 joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2017-18 expense amounts to $1,642,660 ($1,703,844 in 2016-17). For Group 1 members, the expense represents approximately 1.01 times (1.12 times in 2016-17) the employee contributions and, for Group 2 members, approximately 1 time (1.08 times in 2016-17) the employee contributions.

The Commission's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the Consolidated Financial Statements of the Government of Canada, as the Plan's sponsor.

b) Severance benefits

Severance benefits provided to the Department's employees were previously based on an employee's eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By March 31, 2018, substantially all settlements for immediate cash out were completed and the remaining obligation will be disbursed upon departure from the public service. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows:

(in dollars) 2018 2017
Accrued benefit obligation, Beginning of year 840,500 1,101,800
Expense for the year 151,975 (104,695)
Benefits paid during the year (130,075) (156,605)
Accrued Benefit Obligation, End of Year 862,400 840,500

 

7. Accounts Receivable and Advances

(in dollars) 2018 2017
Accounts receivable - Other government departments and agencies 405,331 606,095
Accounts receivable - External parties 397,137 159,397
Employee advances 22,807 7,151
Employee advances - Petty cash 2,500 2,500
Net accounts receivable 827,775 775,143

 

8. Tangible Capital Assets

Cost Asset Class
(in dollars)
Opening Balance Acquisitions Transfers, Disposals and Write-Offs Closing Balance
Informatics hardware 549,783 287,510 (32,695) 804,598
Informatics software 1,530,894 164,839 131,546 1,827,279
Other equipment 701,103 24,898 - 726,001
Leasehold improvements 948,680 165,135 - 1,113,815
Assets under construction 167,524 - (167,524) -
  3,897,984 642,382 (44,306) 2,634,788

 

Accumulated amortization
Asset class
(in dollars)
Opening Balance Amortization Disposals and Write-Offs Closing Balance
Informatics hardware 203,347 112,817 (44,306) 271,858
Informatics software 1,264,111 96,688 - 1,360,799
Other equipment 376,109 57,587 - 433,696
Leasehold improvements 466,226 102,209 - 568,435
  2,309,793 369,301 (44,306) 2,634,788

 

Net book value
Asset class
(in dollars)
2018 2017
Informatics hardware 532,740 346,436
Informatics software 466,480 266,783
Other equipment 292,305 324,994
Leasehold improvements 545,380 482,454
Assets under construction - 167,524
  1,836,905 1,588,191

 

9. Contractual Obligations

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

(in dollars) Related Parties Acquisitions of Goods and Services Operating Leases Total
2019 444,447 596,155 23,335 1,063,937
2020 104,304 7,191 22,194 133,689
2021 6,598 5,500 19,743 31,841
2022 7,156 5,500 19,743 23,181
2023 and thereafter - - - -

 

10. Related Party Transactions

The Commission is related as a result of common ownership to all Government departments, agencies and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual. The Commission has defined it's key management personnel as the Commissioner, Deputy Commissioner, and Executive Director.

The Commission enters into transactions with these entities in the normal course of business and on normal trade terms.

a) Common services provided without charge by other government departments

During the year, the Commission received services without charge from certain common service organizations, related to accommodation, the employer’s contribution to the health and dental insurance plans and worker's compensation coverage. These services provided without charge have been recorded in the Commission’s Statement of Operations and Net Financial Position as follows:

(in dollars) 2018 2017
Accommodation 2,469,084 2,495,263
Employer's contribution to the health and dental insurance plans 1,622,118 1,542,668
Workers' compensation 7,289 7,198
  4,098,491 4,045,129

 

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 Services and Procurement Canada are not included in the Commission's Statement of Operations and Net Financial Position.

b) Other transactions with related parties

In addition, the Commission provides Internal Support Services to some other government departments related tot he provision of Finance, Compensation, Human Resources, Procurement, Administration and Information Technology services. The value of those agreements is $2,035,984 in 2017-18 ($1,397,329 in 2016-17). Contractual obligation with related parties, as shown in note 9, amount to a total of $562,505 over the next five years.

(in dollars) 2018 2017
Expenses - Other government departments and agencies 2,543,882 3,255,482
Revenues - Other government departments and agencies 2,035,984 1,397,329

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

11. Segmented Information

Presentation by segment is based on the Commission's core responsibilities. 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 revenues generated for the core responsibilities, by major object of expense and by major type of revenue. The segment results for the period are as follows:

(in dollars) Engagement and Advocacy Human Rights Complaints Employment Equity Audits Internal Services 2018 2017
Operating Expenses
Salaries and employee benefits 4,193,886 8,620,247 1,167,465 7,926,836 21,908,434 20,373,802
Accommodation 482,247 953,818 130,919 902,100 2,469,084 2,495,263
Professional and special services 244,331 605,085 18,303 751,154 1,618,873 1,697,248
Equipment expenses 5,582 6,573 151 671,588 683,894 275,884
Travel and relocation 170,151 205,286 19,249 84,754 479,440 488,736
Amortization of tangible capital assets 6,895 38,480 6,703 317,223 369,301 221,939
Rentals 38,865 118,952 5,869 165,913 329,599 233,815
Communication 59,926 161,067 21,179 (12,179) 229,993 322,775
Claims against the Crown and court award 140,000 - - - 140,000 -
Utilities, materials and supplies 15,794 35,311 2,072 79,582 132,759 138,000
Information services 8,825 22,702 813 100,215 132,555 133,704
Repair and maintenance 2,373 5,512 793 40,948 49,626 34,998
Loss on write-off of tangible capital - - - 24,367 24,367 6,046
Total operating expenses 5,368,875 10,773,033 1,373,516 11,052,501 28,567,925 26,422,210
Revenues
Internal Support Services - - - 2,035,984 2,035,984 1,397,329
Miscellaneous revenues - - - 310 310 794
Revenues earned on behalf of Government - - - (310) (310) (794)
Total Revenues - - - 2,035,984 2,035,984 1,397,329
Net cost of operations before government funding 5,368,875 10,773,033 1,373,516 9,016,517 26,531,941 25,024,881

 

12. Comparative Information

Certain comparitive figures have been reclassified to conform to the current year's presentation.