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2014–15 Departmental Performance Report

Financial Statements
Office of the Chief Electoral Officer
For the year ended March 31, 2015

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 the Office of the Chief Electoral Officer (the Office). 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 judgements 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 Office's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Office'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 regulations, the Canada Elections Act Footnote 1, the Referendum Act, the Electoral Boundaries Readjustment Act and the Constitution Acts.

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 Office; and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

An assessment for the year ended March 31, 2015 was completed in accordance with the Policy on Internal Control and the results and action plans are summarized in the annex.  The system of ICFR is designed to mitigate risks to a reasonable level based on an on-going process to identify key risks, to assess effectiveness of associated key controls and to make any necessary adjustments.

Management is supported and assisted by a program of internal audit services.  The Office also has an independent Audit Committee.  The responsibilities of the committee are to provide the Chief Electoral Officer with independent and objective advice, guidance, and deliberation on the adequacy and effectiveness of the Office's governance, risk management, control, audit and reporting practices.

The Office of the Auditor General, the independent auditor for the Government of Canada, has expressed an opinion on the fair presentation of the financial statements of the Office which does not include an audit opinion on the annual assessment of the effectiveness of the Office's internal controls over financial reporting.


(Original signed by)
Marc Mayrand
Chief Electoral Officer of Canada

(Original signed by)
Hughes St-Pierre, CPA, CMA
Chief Financial and Planning Officer



Gatineau, Canada
September 30, 2015



INDEPENDENT AUDITOR'S REPORT

To the Speaker of the House of Commons

Report on the Financial Statements

I have audited the accompanying financial statements of the Office of the Chief Electoral Officer, which comprise the statement of financial position as at 31 March 2015, and the statement of operations and net financial position, statement of change in net debt and statement of cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the financial statements present fairly, in all material respects, the financial position of the Office of the Chief Electoral Officer as at 31 March 2015, and the results of its operations, changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Report on Other Legal and Regulatory Requirements

In my opinion, the transactions of the Office of the Chief Electoral Officer that have come to my notice during my audit of the financial statements have, in all significant respects, been in accordance with the Financial Administration Act and regulations, the Canada Elections Act, the Fair Elections Act, the Referendum Act, and the Electoral Boundaries Readjustment Act.

Marian McMahon, CPA, CA
Assistant Auditor General
for the Auditor General of Canada

30 September 2015
Ottawa, Canada



Office of the Chief Electoral Officer
Statement of Financial Position
As at March 31
(in thousands of dollars)
  2015 2014
Liabilities
Due to the Consolidated Revenue Fund
$ 2,353
$ 1,038
Accounts payable and accrued liabilities (Note 5)
20,834
11,992
Accrued employee salaries and benefits
3,532
1,556
Provision for vacation leave and other benefits
2,040
1,886
Lease obligation for tangible capital assets (Note 6)
196
273
Deposits from political candidates (Note 7)
99
101
Employee severance benefits (Note 8b)
2,169
2,761
Total net liabilities
31,223
19,607
Financial assets
Due from the Consolidated Revenue Fund
24,304
13,649
Accounts receivable and advances (Note 9)
2,571
1,225
Total gross financial assets
26,875
14,874
Financial assets held on behalf of Government
Accounts receivable - from external parties (Note 9)
(50)
(49)
Total financial assets held on behalf of Government
(50)
(49)
Total net financial assets
26,825
14,825
Net debt
4,398
4,782
Non-financial assets
Prepaid expenses
863
519
Consumable supplies
7,821
3,926
Tangible capital assets (Note 10)
28,320
23,063
Total non-financial assets
37,004
27,508
Net financial position
$32,606
$22,726

Contractual obligations (Note 11) and Contingent liabilities (Note 12). The accompanying notes form an integral part of these financial statements.

Approved by:

(Original signed by)
Marc Mayrand
Chief Electoral Officer of Canada

(Original signed by)
Hughes St-Pierre, CPA, CMA
Chief Financial and Planning Officer



Gatineau, Canada
September 30, 2015


Office of the Chief Electoral Officer
Statement of Operations and Net Financial Position
For the Year Ended March 31
(in thousands of dollars)
  2015
Planned
Results
(Note 2a)
2015 2014
Expenses
Electoral Operations
$37,889
$80,243
$44,310
Regulation of Electoral Activities
21,033
16,815
24,434
Electoral Engagement
8,890
8,460
7,691
Internal Services
43,142
42,353
41,725
Total expenses
110,954
147,871
118,160
Revenues
Excess contributions and donations
62
28
71
Fines and court awards
-
7
15
Miscellaneous revenues
14
26
23
Revenues earned on behalf of government
(76)
(61)
(109)
Total revenues
-
-
-
Net cost from continuing operations
110,954
147,871
118,160
Transferred Operations (Note 15)
Expenses
-
2,113
3,463
Revenues
     -
     -
     -
Net cost of transferred operations
-
2,113
3,463
Net cost of operations before government funding and transfers
110,954
149,984
121,623
Government funding and transfers
Net cash provided by Government
97,100
141,717
120,208
Change in Due to the Consolidated Revenue Fund
-
(1,315)
(497)
Change in Due from the Consolidated Revenue Fund (198)
10,655
243
Services provided without charge by other government departments (Note 13)
9,499
9,994
9,040
Transfer of the transition payments for implementing salary payments in arrears (Note 14)
-
(1,341)
-
Transfer of liabilities to other government department (Note 15)
-
185
-
Transfer of salaries to other government department (Note 15)
   -
(31)
   -
Net cost (revenues) of operations after government funding and transfers
4,553
(9,880)
(7,371)
Net financial position – Beginning of year
22,726
22,726
15,355
Net financial position – End of year
$18,173
$32,606
$22,726

Segmented information (Note 16)

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


Office of the Chief Electoral Officer
Statement of Change in Net Debt
For the Year Ended March 31
(in thousands of dollars)
  2015
Planned
Results
(Note 2a)
2015 2014
Net cost (revenues) of operations after government funding and transfers
$(4,543)
$(9,880)
$7,371
Change due to tangible capital assets
Acquisition of tangible capital assets
-
10,353
11,598
Capital Leases additions
-
-
310
Amortization of tangible capital assets
(4,076)
(4,739)
(4,326)
Write off of tangible capital assets
   -
(357)
(39)
Total change due to tangible capital assets
(4,076)
5,257
7,543
Change due to consumable supplies
Acquisition of consumable supplies
40
5,277
307
Usage of consumable supplies
(115)
(1,382)
(940)
Total change due to consumable supplies
(75)
3,895
(633)
Change due to prepaid expenses
Additions to prepaid
703
1,467
930
Usage of prepaid
(804)
(1,123)
(927)
Total change due to prepaid expenses
(101)
344
3
Net (decrease) increase in net debt
(8,795)
(384)
(458)
Net debt – Beginning of year
4,782
4,782
5,240
Net debt – End of year
$(4,013)
$4,398
$4,782

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

 

Office of the Chief Electoral Officer
Statement of Cash Flow
For the Year Ended March 31
(in thousands of dollars)
  2015 2014
OPERATING ACTIVITIES
Net cost of operations before government funding and transfers
$149,984
$121,623
Non-cash items:
Amortization of tangible capital assets
(4,739)
(4,326)
Write off of tangible capital assets
(357)
(39)
Services provided without charge by other government departments (Note 13)
(9,994)
(9,040)
Transfer of salaries to other government departments
31
-
Transition payments for implementing salary payments in arrears (Note 14)
1,341
-
Variations in Statement of Financial Position:
Increase in accounts receivable and advances
1,345
202
Increase in prepaid expenses
344
3
Increase (decrease) in consumable supplies
3,895
(633)
Decrease in deposits from political candidates
2
9
Decrease in employee severance benefits
592
1,313
Increase in provision for vacation leave and other benefits
(154)
(295)
(Increase) decrease in accrued employee salaries and benefits
(1,976)
106
Increase in accounts payable and accrued liabilities
(8,003)
(358)
Transfer of liabilities to other government departments (Note 15)
(185)
   -
Cash used in operating activities
132,126
108,565
CAPITAL INVESTMENT ACTIVITIES
Acquisition of tangible capital assets (excluding capital leases)
9,514
11,598
Cash used in capital investment activities
9,514
11,598
FINANCING ACTIVITIES
Payment of capital lease obligations
77
45
Cash used in financing activities
77
45
Net cash provided by Government of Canada
$141,717
$120,208

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

 

Office of the Chief Electoral Officer
Notes to Financial Statements
For the year ended March 31, 2015

1. Authority and Objectives

The Office of the Chief Electoral Officer (the Office), commonly known as Elections Canada, is headed by the Chief Electoral Officer who is appointed by resolution of the House of Commons and reports directly to Parliament.  The Chief Electoral Officer is completely independent of the federal government and political parties.  The Office is named in Schedule I.1 of the Financial Administration Act.

The Office's objectives are to be prepared to conduct a federal general election, by-election or referendum; to administer the political financing provisions of the Canada Elections Act; to monitor compliance with electoral legislation; to conduct public information campaigns on voter registration, voting and becoming a candidate; to conduct education programs for students on the electoral process; to provide support to the independent commissions in charge of adjusting the boundaries of federal electoral districts following each decennial census; to carry out studies on alternative voting methods and, with the approval of parliamentarians, test alternative voting processes for future use during electoral events; and to provide assistance and co-operation in electoral matters to electoral agencies in other countries or to international organizations.

The Fair Elections Act, Bill C-23, which received royal assent on June 19, 2014, has brought significant changes to Elections Canada's mandate and operations.  Notably, effective October 1, 2014, the Commissioner of Canada Elections, the independent officer whose duty is to ensure that the Canada Elections Act and the Referendum Act are complied with and enforced, has been transferred to the Public Prosecution Service of Canada.

The Office is funded by an annual appropriation (which provides for the salaries of permanent, full-time staff) and the statutory authorities contained in the Canada Elections Act, the Referendum Act and the Electoral Boundaries Readjustment Act.  These statutory authorities provide for all other expenditures, including the costs of electoral events, maintenance of the National Register of Electors, quarterly allowances to eligible political parties, redistribution of electoral boundaries and continuing public education programs.

The Office's Program Alignment Architecture (PAA) contains three programs and Internal Services.  The programs are:

Electoral Operations

This program allows Elections Canada to deliver fair and efficient electoral events whenever they may be required so that Canadians are able to exercise their democratic right to vote in a federal general election, by-election or referendum. To this end the agency provides an accessible and constantly improved electoral process that is responsive to the needs of electors. 

Regulation of Electoral Activities

This program provides Canadians with an electoral process that is fair, transparent and in compliance with the Canada Elections Act.  Within this program, Elections Canada is responsible for administering the political financing provisions of the Act.  This includes monitoring compliance, disclosure and reporting of financial activities, and enforcing electoral legislation Footnote 2.

Electoral Engagement

This program promotes and sustains the Canadian electoral process.  It provides Canadians with electoral education and information programs so that they can make informed decisions about their engagement in the electoral process.  It also aims to improve the electoral framework by consulting and sharing electoral practices with other stakeholders.

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; Material Services; Acquisitions Services; 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. 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:

  1. Parliamentary authorities – The Office operates under two funding authorities: an annual appropriation and statutory authorities.  Financial reporting of authorities provided to the Office 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 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 2014-2015 Report on Plans and Priorities and excludes the provision for the costs of conducting a general election or by-election.

    The planned results amounts 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 were prepared for internal management purposes and have not been previously published.

    Liquidity risk is the risk that the Office will encounter difficulty in meeting its obligations associated with financial liabilities.  The Office's objective for managing liquidity risk is to manage operations and cash expenditures within the appropriation authorized by Parliament or allotment limits approved by the Treasury Board.

    Each year the Office presents information on planned expenditures to Parliament through the tabling of Estimates publications.  These estimates result in the introduction of supply bills (which, once passed into legislation, become appropriation acts) in accordance with the reporting cycle for government expenditures.  The Office exercises expenditure initiation processes such that unencumbered balances of budget allotments and appropriations are monitored and reported on a regular basis to help ensure sufficient authority remains for the entire period and appropriations are not exceeded.

    Consistent with Section 32 of the Financial Administration Act, the Office's policy to manage liquidity risk is that no contract or other arrangement providing for a payment shall be entered into with respect to any program for which there is an appropriation by Parliament or an item included in estimates then before the House of Commons to which the payment will be charged unless there is a sufficient unencumbered balance available out of the appropriation or item to discharge any debt that, under the contract or other arrangement, will be incurred during the fiscal year in which the contract or other arrangement is entered into.

    The Office's risk exposure and its objectives, policies and processes to manage and measure this risk did not change significantly from the prior year.
  2. Net cash provided by Government – The Office operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada.  All cash received by the Office is deposited to the CRF and all cash disbursements made by the Office 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.
  3. Due from or to the Consolidated Revenue Fund – 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  amount of cash that the Office is entitled to draw from the CRF without further appropriations in order to discharge its liabilities.  This amount is not considered to be a financial instrument.
  4. Revenues – Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.

    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 Office's liabilities.  While the Chief Electoral Officer is expected to maintain accounting control, he or 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 as a reduction of the entity's gross revenues.
  5. Expenses – Expenses are recorded on the accrual basis.

    Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established in the political financing provisions of the Canada Elections Act.  Transfer payments that become repayable as a result of conditions specified in the political financing provisions of the Canada Elections Act that have come into being are recorded as a reduction to transfer payment expense and as a receivable.

    Vacation pay and other benefits are accrued as the benefits are earned by employees under their respective terms of employment.
  6. Political parties quarterly allowance – The Canada Elections Act allows for the payment from public funds of quarterly allowances to qualifying registered parties.  The quarterly allowance is calculated based on the results of the most recent general election preceding the quarter.  This allowance is expensed in each quarter of the calendar year as directed by the Act.  The allowance has been phased out over three fiscal years from 2012-2013 to 2014-2015, as set out in An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011 and other measures.
  7. Services provided without charge – Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans, audit services and worker's compensation coverage are recorded as operating expenses, at their estimated cost, in the Statement of Operations and Net Financial Position. 
  8. Employee future benefits

    1) Pension benefits – Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government of Canada.  The Office's contributions to the Plan are charged to expenses in the year incurred and represent the total of the Office's obligation to the Plan.  The Office'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 as a whole.
  9. Accounts receivable – Receivables are stated at the lower of cost and net recoverable value.  A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.

    Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.  The Office is not exposed to significant credit risk.  The Office provides services to other government departments and agencies and to external parties in the normal course of business.  Accounts receivables are due on demand.  The majority of accounts receivables are due from other government of Canada departments and agencies where there is minimal potential risk of loss.  The maximum exposure the entity has to credit risk is equal to the carrying value of its accounts receivables
  10. 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.
  11. Consumable supplies – Consumable supplies consist mainly of forms and publications used to administer election events and documents distributed to political entities.  These supplies are recorded at weighted average cost.  The cost is charged to operations in the period in which the items are consumed.  If they no longer have service potential, they are valued at the lower of cost or net realizable value.
  12. Tangible capital assets – Tangible capital assets are recorded at historical cost less accumulated amortization.  The Office records as tangible capital assets all expenses providing multi-year benefits and leasehold improvements having an initial cost of $5,000 or more.  Similar items less than $5,000 are expensed in the Statement of Operations and Net Financial Position.  The Office does not capitalize intangibles.  Capital assets acquired for software under development are amortized once that software is put into production.

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

    Asset Class Useful Life
    Office equipment 3 to 10 years
    Informatics equipment 3 years
    Software 3 to 5 years
    Furniture and fixtures 10 years
    Vehicles 5 years
    Motorized equipment 10 years
    Leasehold improvements and capital leases Lesser of the remaining term of the lease or estimated useful life

  13. 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 severance benefits, the useful life of tangible capital assets and candidate and party reimbursement of eligible election expenses.  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. Changes in Accounting Policies

During the year, the Office chose to adopt early the PSA Handbook Section PS 3430 ‘Restructuring Transactions'.  This new standard includes requirements for recognition, measurement, presentation and disclosure of assets and liabilities transferred in a restructuring transaction.  It was applied to account for the transfer of the Commissioner of Canada Elections, as described in Note 15.

4. Parliamentary Authorities

The Office receives most of its funding through annual parliamentary authorities and the statutory authorities contained in the electoral legislation.  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 Office 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:

  1. 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
    $149,984
    $121,623
    Adjustments for items affecting net cost of operations but not affecting authorities
    Add (less):
    Amortization of tangible capital assets
    (4,739)
    (4,326)
    Write off of tangible capital assets
    (357)
    (39)
    Services provided without charge by other government departments (Note 13)
    (9,994)
    (9,040)
    Increase in provision for vacation leave and other benefits
    (154)
    (295)
    Decrease in employee severance benefits liability
    592
    1,313
    Bad debt expense
    -
    (1)
    Prepaid expenses
    (1,123)
    (927)
    Consumable supplies
    3,895
    (633)
    Transfer of liabilities to other government departments (Note 15)
    (185)
    -
    Adjustment to the accrued liabilities
    (423)
    -
    Adjustment of previous year salary accrual
    6
    20
    Total items affecting net cost of operations but not affecting authorities
    (12,482)
    (13,928)
    Adjustments for items not affecting net cost of operations but affecting authorities
    Add (less):
    Acquisition of tangible capital assets
    10,353
    11,598
    Payment of capital lease obligations
    77
    45
    Transitions payments for implementing salary payments in arrears
    1,341
    -
    Other
    26
    (40)
    Prepaid expenses
    1,467
    930
    Total items not affecting net cost of operations but affecting authorities
    13,264
    12,533
    Current year authorities used
    $150,766
    $120,228


  2. Reconciliation of parliamentary authorities provided to current year authorities used

    (in thousands of dollars)   
      2015 2014
    Authorities provided:
    Program expenditures (Vote 1)
    $31,582
    $31,858
    Statutory contributions to employee benefit plans
    7,303
    6,704
    Other statutory expenditures
    113,319
    83,347
    152,204
    121,909
    Less:
    Lapsed authorities – Program expenditures (Vote 1)
    (1,438)
    (1,681)
    Current year authorities used
    $150,766
    $120,228


5. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities are measured at cost, the majority of which are due within six months of year-end.

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

(in thousands of dollars)   
  2015 2014
Accounts payable – Other government departments and agencies
$1,316
$727
Accounts payable – External parties
1,827
389
Total accounts payable
3,143
1,116
Accrued liabilities
17,691
10,876
Total accounts payable and accrued liabilities
$20,834
$11,992


6. Lease Obligation for Tangible Capital Assets

The Office has entered into agreements to lease certain equipment under capital lease with a cost of $311,320 and accumulated amortization of $128,695 as at March 31, 2015 ($322,320 and $49,939 respectively as at March 31, 2014). The obligations related to the upcoming years include the following:

(in thousands of dollars)   
Maturing year 2015 2014
2015
$ -
$81
2016
79
79
2017
79
79
2018
40
40
2019
  2
  2
Total future minimum lease payments
200
281
Less: imputed interest (1.43% to 1.61%)
4
8
Lease obligation for tangible capital assets
$196
$273


7. Deposits from Political Candidates

The Deposits from political candidates represent the Office's outstanding liability in relation to nomination deposits. Once the Chief Electoral Officer is satisfied that the candidates have filed a complete electoral campaign return and that the unused receipts valid for income tax purposes supplied by the returning officer have been returned within one month after polling day, these deposits are refunded.

8. Employee Future Benefits

  1. Pension benefits

    The Office'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 they are indexed to inflation.

    Both the employees and the Office contribute to the cost of the Plan.   Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to the 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 2014-2015 expense amounts to $4,992,362 ($4,713,379 in 2013-2014).  For Group 1 members, the expense represents approximately 1.41 times (1.6 times in 2013-2014) the employee contributions and, for Group 2 members, approximately 1.39 times (1.5 times in 2013-2014) the employee contributions.

    The Office'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. Employee severance benefits

    The Office 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.

    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.

Information about the severance benefits, measured as at March 31 is as follows:

(in thousands of dollars)   
  2015 2014
Accrued benefit obligation, beginning of year $2,761 $4,074
Transferred to other government department (Note 15)  (27)     -
Subtotal 2,734 4,074
Expense for the year (23) 175
Benefits paid during the year (542) (1,488)
Accrued benefit obligation, end of year $2,169 $2,761

9. Accounts Receivable and Advances

The following table presents details of the Office's accounts receivable and advance balances:

(in thousands of dollars)   
  2015 2014
Receivables – Other government departments and agencies $2,353 $1,038
Receivables – External parties 339 313
Employee advances   3   4
Subtotal 2,695 1,355
Allowance for doubtful accounts on receivables from external parties   (124)   (130)
Gross accounts receivable and advances 2,571 1,225
Accounts receivable held on behalf of Government (50) (49)
Net accounts receivable and advances $2,521 $1,176


10. Tangible Capital Assets

(in thousands of dollars)   
Cost
Capital Asset Class Opening
balance
Acquisitions Transfers Disposals and write-off Closing balance 2015
Net book value
2014
Net book value
Office equipment (including capital leases) $1,328 $47 - $- $1,375 $655 $762
Informatics equipment 12,221 883 - (520) 12,584 1,365 896
Software 39,804 700 - (22) 40,482 2,644 4,570
Software under development 3,898 8,371 - (357) 11,912 11,912 3,898
Furniture and fixtures 3,804 41 - - 3,845 2,097 2,405
Vehicles and motorized equipment 203 - - - 203 60 86
Leasehold improvements 11,972 311 - - 12,283 9,587 10,446
Total $73,230 $10,353 - $(899) $82,684 $28,320 $23,063


(in thousands of dollars)   
Accumulated Amortization
Capital Asset Class Opening
balance
Amortization Disposals and write-off Closing balance
Office equipment (including capital leases) $566 $154 $- $720
Informatics equipment 11,325 414 (520) 11,219
Software 35,234 2,626 (22) 37,838
Furniture and fixtures 1,399 349 - 1,748
Vehicles and motorized equipment 117 26 - 143
Leasehold improvements 1,526 1,170 - 2,696
Total $50,167 $4,739 $(542) $54,364


11. Contractual Obligations

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

(in thousands of dollars)   
2016 $63,665
2017 17,751
2018 6,254
2019 5,100
2020 and thereafter 13,015
Total $105,785

12. Contingent Liabilities

Claims have been made against the Office in the normal course of operations.  Legal proceedings for claims totalling $636,667 ($1,080,000 in 2014) were still pending at March 31, 2015.  Some of these potential liabilities 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 in the financial statements.

An amount of $188,000 was recognized in the Office's financial statements for the fiscal year ended March 31, 2015 ($0 in 2014).

13. Related Party Transactions

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

  1. Common services provided without charge by other government departments

    During the year, the Office received services without charge from certain common services organizations, related to accommodation, the employer’s contribution to the health and dental insurance plans and workers’ compensation coverage.

    These services provided without charge have been recorded in the Statement of Operations and Net Financial Position as follows:

    (in thousands of dollars)   
      2015 2014
    Accommodation $6,068 $5,558
    Employer’s contribution to the health and dental insurance plans 3,776 3,327
    Audit services 145 150
    Workers’ compensation 5 5
    Total $9,994 $9,040

    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 Office's Statement of Operations and Net Financial Position.

  2. Common services provided without charge to other government departments

    During the year, the Office provided services without charge to the Public Prosecution Service of Canada (PPSC) related to the provision of information technology services in the amount of $110,967 ($0 in 2013-2014).
  3. Other transactions with related parties
    (in thousands of dollars)   
      2015 2014
    Accounts receivable – Other government departments and agencies $2,353 $1,038
    Accounts payable – Other government departments and agencies 1,316 727
    Expenses – Other government departments and agencies 18,030 14,591
    Tangible capital assets – Other government departments and agencies 250 7,302

    Expenses disclosed in (c) exclude common services provided without charge, which are already disclosed in (a)

14. 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 Office. However, it did result in the use of additional spending authorities. 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.

15. Transfer to other government department

The Commissioner of Canada Elections, the independent officer whose duty is to ensure that the Canada Elections Act and the Referendum Act are complied with and enforced, has been transferred to the Public Prosecution Service of Canada (PPSC) in accordance with an Order in Council that fixed October 1, 2014 as the date that applicable sections of the Canada Elections Act came into force. The Office transferred the following liabilities related to the Commissioner of Canada Elections to PPSC on October 1, 2014, no assets were transferred:

(in thousands of dollars)   
Liabilities 2015
Provision for vacation leave and other benefits $158
Employee Severance Benefits (note 8) 27
Total liabilities transferred $185

An amount of $30,634 was recovered from the PPSC for the salaries paid from October 1st to October 8 2014.

In addition, the 2014 comparative figures have been reclassified on the Statement of Operations and Net Financial Position to present the revenue and expenses of the transferred operations.

16. Segmented Information

Presentation by segment is based on the Office program alignment architecture. For efficiency purposes in processing payments, Internal Services incurs expenses for the Office for corporate services such as information technology related goods and services. Some expenses are reallocated to programs at the end of the year in order to enhance the transparency of business activities and accountability for resource allocation decisions. The methodology used for the allocation of operational expenses is based on ratios of program to non-program expenses incurred at the cost center level, a sub-division of the Office’s organizational structure.

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 main programs, by major object of expenses and by major type or revenues.

The segmented results for the period are as follows:

(in thousands of dollars)   
  2015 2014
  Electoral Operations Regulation of Electoral Activities Electoral Engagement Internal Services Total Total
Transfer Payments
Political parties quarterly allowances   $7,443     $7,443 $14,886
Reimbursement of candidates' and parties' expenses   1,350      1,350 1,568
Total Transfer Payments   8,793     8,793 16,454
Operating Expenses
Salaries and benefits $38,693 5,646 $6,128 $14,343 64,810 50,102
Professional services 18,496 1,206 1,461 11,353 32,516 22,011
Rental of equipment and accommodation 5,288 586 174 10,225 16,273 12,662
Travel and communication 5,499 33 251 2,549 8,332 4,505
Advertising, publishing and printing 5,339 22 342 226 5,929 3,974
Amortization of tangible capital assets 1,672 493 - 2,574 4,739 4,326
Utilities, materials and supplies 3,054 26 69 35 3,184 347
Small equipment 1,273 10 35 638 1,956 1,986
Repair and maintenance of equipment 375 - - 398 773 995
Write off of tangible capital asset 357 - - - 357 39
Interest and other charges 197 - - 12 209 759
Total Operating Expenses 80,243 16,815 8,460 42,353 147,871 118,160
Revenues
Excess contributions and donations - 28 - - 28 71
Fines and court awards - 7 - - 7 15
Miscellaneous revenues - - - 26 26 23
Revenues earned on behalf of government - (35) - (26) (61) (109)
Total revenues - - - - - -
Net cost from continuing operations $80,243 $16,815 $8,460 $42,353 $147,871 $118,160

17. Comparative Information

Comparative figures have been reclassified to conform to the current year’s presentation.




Footnote 1 Bill C-23, an Act to amend the Canada Elections Act and other Acts and to make consequential amendments to certain Acts (Fair Elections Act), received Royal Assent on June 19, 2014.  The Fair Elections Act makes substantial amendments to the Canada Elections Act affecting most areas of Elections Canada's operations, including electoral operations and political financing.

Footnote 2 Effective October 1, 2014, the Commissioner of Canada Elections, the independent officer whose duty is to ensure that the Canada Elections Act and the Referendum Act are complied with and enforced, has been transferred to the Public Prosecution Service of Canada.