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2015–16 Departmental Performance Report

Financial Statements
Office of the Chief Electoral Officer
For the year ended March 31, 2016

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, 2016 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, the Referendum Act, and the Electoral Boundaries Readjustment Act.

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, 2016 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
August 31, 2016



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 2016, and the statement of operations and net financial position, statement of change in net financial assets 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 2016, 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 Referendum Act, and the Electoral Boundaries Readjustment Act.

(Original signed by)

Marise Bιdard, CPA, CA
Principal for the Auditor General of Canada

31 August 2016
Ottawa, Canada



Office of the Chief Electoral Officer
Statement of Financial Position
As at March 31
(in thousands of dollars)
  2016 2015
Liabilities
Due to the Consolidated Revenue Fund $ 1,761 $ 2,353
Accounts payable and accrued liabilities (Note 4) 65,583 20,834
Accrued employee salaries and benefits 3,956 3,532
Provision for vacation leave and other benefits 2,637 2,040
Lease obligation for tangible capital assets (Note 5) 119 196
Deposits from political candidates (Note 6) 750 99
Employee severance benefits (Note 7b) 1,944 2,169
Total net liabilities 76,750 31,223
Financial assets
Due from the Consolidated Revenue Fund 70,289 24,304
Accounts receivable and advances (Note 8) 12,325 2,571
Total gross financial assets 82,614 26,875
Financial assets held on behalf of Government
Accounts receivable - from external parties (Note 8) (52) (50)
Total financial assets held on behalf of Government (52) (50)
Total net financial assets 82,562 26,825
Net financial assets (net debt) 5,812 (4,398)
Non-financial assets
Prepaid expenses 1,282 863
Consumable supplies 3,163 7,821
Tangible capital assets (Note 9) 21,776 28,320
Total non-financial assets 26,221 37,004
Net financial position $32,033 $32,606

Contractual obligations (Note 10) and Contingent liabilities (Note 11)
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
August 31, 2016


Office of the Chief Electoral Officer
Statement of Operations and Net Financial Position
For the Year Ended March 31
(in thousands of dollars)
  2016
Planned Results (Note 2a)
2016 2015
Expenses
Electoral Operations $283,427 $343,005 $80,243
Regulation of Electoral Activities 80,013 113,759 16,815
Electoral Engagement 8,478 8,728 8,460
Internal Services 40,760 38,211 42,353
Total expenses 412,678 503,703 147,871
Revenues
Excess contributions and donations 78 129 28
Fines and court awards - - 7
Miscellaneous revenues 15 157 26
Revenues earned on behalf of government (93) (286) (61)
Total revenues - - -
Net cost from continuing operations 412,678 503,703 147,871
Transferred Operations (Note 14)
Expenses - - 2,113
Revenues       -       -       -
Net cost of transferred operations - - 2,113
Net cost of operations before government funding and transfers 412,678 503,703 149,984
Government funding and transfers
Net cash provided by Government 395,960 445,640 141,717
Change in Due to the Consolidated Revenue Fund - 592 (1,315)
Change in Due from the Consolidated Revenue Fund 7,586 45,985 10,655
Services provided without charge by other government departments (Note 12) 9,822 10,917 9,994
Transfer of the transition payments for implementing salary payments in arrears (Note 13) - (4) (1,341)
Transfer of liabilities to other government department (Note 14) - - 185
Transfer of salaries to other government department (Note 14)       -       -     (31)
Net cost (revenues) of operations after government funding and transfers (690) 573 (9,880)
Net financial position – Beginning of year 32,606 32,606 22,726
Net financial position – End of year $33,296 $32,033 $32,606

Segmented information (Note 15)

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



Office of the Chief Electoral Officer
Statement of Change in Net Financial Assets
For the Year Ended March 31
(in thousands of dollars)
  2016
Planned Results
(Note 2a)
2016 2015
Net cost (revenues) of operations after government funding and transfers $ (690) $573 $(9,880)
Change due to tangible capital assets
Acquisition of tangible capital assets 600 1,782 10,353
Amortization of tangible capital assets (4,585) (5,008) (4,739)
Loss on disposal of tangible capital assets - (6) -
Write off of tangible capital assets         - (3,312) (357)
Total change due to tangible capital assets (3,985) (6,544) 5,257
Change due to consumable supplies
Acquisition of consumable supplies 1,914 1,991 5,277
Usage of consumable supplies (4,863) (6,649) (1,382)
Total change due to consumable supplies (2,949) (4,658) 3,895
Change due to prepaid expenses
Additions to prepaid 838 2,323 1,467
Usage of prepaid (922) (1,904) (1,123)
Total change due to prepaid expenses (84) 419 344
Net decrease in net debt (7,708) (10,210) (384)
Net debt – Beginning of year (4,398) (4,398) (4,782)
Net financial assets (net debt) - End of year $ (3,310) $5,812 ($4,398)

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)
2016 2015
OPERATING ACTIVITIES
Net cost of operations before government funding and transfers $503,703 $149,984
Non-cash items:
Amortization of tangible capital assets (5,008) (4,739)
Loss on disposal of tangible capital assets (6) -
Write off of tangible capital assets (3,312) (357)
Services provided without charge by other government departments (Note 12) (10,917) (9,994)
Transfer of salaries to other government departments (Note 14) - 31
Transition payments for implementing salary payments in arrears (Note 13) 4 1,341
Variations in Statement of Financial Position:
Increase in accounts receivable and advances 9,752 1,345
Increase in prepaid expenses 419 344
Increase (decrease) in consumable supplies (4,658) 3,895
Decrease (increase) in deposits from political candidates (651) 2
Decrease in employee severance benefits 225 592
Increase in provision for vacation leave and other benefits (597) (154)
Increase in accrued employee salaries and benefits (424) (1,976)
Increase in accounts payable and accrued liabilities (45,303) (8,003)
Transfer of liabilities to other government departments (Note 14)             -     (185)
Cash used in operating activities 443,227 132,126
CAPITAL INVESTMENT ACTIVITIES
Acquisition of tangible capital assets (excluding capital leases) 2,336 9,514
Cash used in capital investment activities 2,336 9,514
FINANCING ACTIVITIES
Payment of capital lease obligations 77 77
Cash used in financing activities 77 77
Net cash provided by Government of Canada $445,640 $141,717

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, 2016

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 by providing an accessible and constantly improved electoral process 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.

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 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. 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 3 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 2015-2016 Report on Plans and Priorities.

    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 and ended in 2014-2015. No payments were made in 2015-2016.

  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 accounts receivables due from other government of Canada departments and agencies have a minimal potential risk of loss. The accounts receivables from external parties are mostly from political candidates following the 2015 general election. It is too early to determine the risk of loss on these receivables at March 31, 2016.

    The maximum exposure the Office 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. 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)

    2016 2015
    Net cost of operations before government funding and transfers $503,703 $149,984
    Adjustments for items affecting net cost of operations but not affecting authorities
    Add (less):
    Amortization of tangible capital assets (5,008) (4,739)
    Write off of tangible capital assets (3,312) (357)
    Loss on disposal of tangible capital assets (6) -
    Services provided without charge by other government departments (Note 12) (10,917) (9,994)
    Increase in provision for vacation leave and other benefits (597) (154)
    Decrease in employee severance benefits liability 225 592
    Bad debt expense 2 -
    Prepaid expenses (1,904) (1,123)
    Consumable supplies (4,658) 3,895
    Transfer of liabilities to other government departments (Note 14) - (185)
    Adjustment to the accrued liabilities 4,515 (423)
    Adjustment of previous year salary accrual 38 6
    Other 80     -
    Total items affecting net cost of operations but not affecting authorities (21,542) (12,482)
    Adjustments for items not affecting net cost of operations but affecting authorities
    Add (less):
    Acquisition of tangible capital assets 1,782 10,353
    Payment of capital lease obligations 77 77
    Transitions payments for implementing salary payments in arrears (Note 13) 4 1,341
    Other 59 26
    Prepaid expenses 2,323 1,467
    Total items not affecting net cost of operations but affecting authorities 4,245 13,264
    Current year authorities used $486,406 $150,766
  2. Reconciliation of parliamentary authorities provided to current year authorities used

    (in thousands of dollars)

    2016 2015
    Authorities provided:
    Program expenditures (Vote 1) $31,294 $31,582
    Statutory contributions to employee benefit plans 8,771 7,303
    Other statutory expenditures 448,259 113,319
    488,324 152,204
    Less:
    Lapsed authorities – Program expenditures (Vote 1) (1,918) (1,438)
    Current year authorities used $486,406 $150,766

4. 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)

2016 2015
Accounts payable – Other government departments and agencies $1,439 $1,316
Accounts payable – External parties 1,419 1,827
Total accounts payable 2,858 3,143
Accrued liabilities 62,725 17,691
Total accounts payable and accrued liabilities $65,583 $20,834

5. Lease Obligation for Tangible Capital Assets

The Office has entered into agreements to lease certain equipment under capital lease with a cost of $310,476 and accumulated amortization of $194,029 as at March 31, 2016 ($311,320 and $128,695 respectively as at March 31, 2015). The obligations related to the upcoming years include the following:

(in thousands of dollars)

Maturing year 2016 2015
2016 $ - $ 79
2017 79 79
2018 40 40
2019 2 2
2020 and thereafter      -      -
Total future minimum lease payments 121 200
Less: imputed interest (1.43% to 1.61%) 2 4
Lease obligation for tangible capital assets $119 $196

6. 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.


7. 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/Quιbec 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 2015-2016 expense amounts to $6,045,741 ($4,992,362 in 2014-2015). For Group 1 members, the expense represents approximately 1.25 times (1.41 times in 2014-2015) the employee contributions and, for Group 2 members, approximately 1.24 times (1.39 times in 2014-2015) 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)

    2016 2015
    Accrued benefit obligation, beginning of year $ 2,169 $ 2,761
    Transferred to other government department (Note 14)        -    (27)
    Subtotal 2,169 2,734
    Expense for the year (11) (23)
    Benefits paid during the year (214) (542)
    Accrued benefit obligation, end of year $1,944 $2,169

8. Accounts Receivable and Advances

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

(in thousands of dollars)

2016 2015
Receivables – Other government departments and agencies $1,767 $2,353
Receivables – External parties 10,662 339
Employee advances         18         3
Subtotal 12,447 2,695
Allowance for doubtful accounts on receivables from external parties (122) (124)
Gross accounts receivable and advances 12,325 2,571
Accounts receivable held on behalf of Government (52) (50)
Net accounts receivable and advances $12,273 $2,521


9. Tangible Capital Assets

(in thousands of dollars)

Cost
Capital Asset Class Opening balance Acquisitions Transfers Disposals and write-off Closing balance 2016 Net book value 2015 Net book value
Office equipment (including
capital leases)
$1,375 $53 - $(12) $1,416 $548 $655
Informatics equipment 12,584 190 - (165) 12,609 908 1,365
Software 40,482 44 10,064 - 50,590 10,052 2,644
Software under development 11,912 1,464 (10,064) (3,312) - - 11,912
Furniture and fixtures 3,845 - - (15) 3,830 1,822 2,097
Vehicles and motorized
equipment
203 22 - - 225 56 60
Leasehold improvements 12,283 9 - - 12,292 8,390 9,587
Total $82,684 $1,782 - $(3,504) $80,962 $21,776 $28,320


(in thousands of dollars)

Accumulated Amortization
Capital Asset Class Opening balance Amortization Disposals and write-off Closing balance
Office equipment (including capital leases) $720 $160 $(12) $868
Informatics equipment 11,219 647 (165) 11,701
Software 37,838 2,700 - 40,538
Furniture and fixtures 1,748 269 (9) 2,008
Vehicles and motorized equipment 143 26 - 169
Leasehold improvements 2,696 1,206 - 3,902
Total $54,364 $5,008 $(186) $59,186

The Acquisition of tangible capital assets and the Increase in accounts payable and accrued liabilities presented in the Statement of Cash Flow exclude an amount of $284,793 ($838,682 in 2014-2015) in relation to the acquisition of tangible capital assets, as the amount relates to capital investing activities in 2015-2016 that remain to be paid as at March 31, 2016.


10. 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)

2017 $36,744
2018 5,843
2019 4,472
2020 4,382
2021 and thereafter 9,715
Total $61,156

11. Contingent Liabilities

Claims have been made against the Office in the normal course of operations. Legal proceedings for claims totalling $67,360 ($636,667 in 2014-2015) were still pending at March 31, 2016. 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.

No amount was recognized in the Office's financial statements for the fiscal year ended March 31, 2016 ($188,000 in 2014-2015).


12. 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)

    2016 2015
    Accommodation $5,840 $6,068
    Employer's contribution to the health and dental insurance plans 4,861 3,776
    Audit services 211 145
    Workers' compensation 5 5
    Total $10,917 $9,994

    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 Office's Statement of Operations and Net Financial Position.

  2. Common services provided without charge to other government departments

    In 2015-2016, the Office provided services without charge to the Public Prosecution Service of Canada (PPSC) related to the provision of the General Election contact centre and information technology services in the amount of $351,693 ($110,967 in 2014-2015).

  3. Other transactions with related parties

    (in thousands of dollars)

    2016 2015
    Accounts receivable – Other government departments and agencies $1,766 $2,353
    Accounts payable – Other government departments and agencies 1,439 1,316
    Expenses – Other government departments and agencies 41,860 18,133
    Tangible capital assets – Other government departments and agencies - 250

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

13. Transfer of the Transition Payments for Implementing Salary Payments in Arrears

The Government of Canada implemented salary payments in arrears in 2014-2015. As a result, a one-time payment was issued to employees and will be recovered from them in the future. Employees that were on leave without pay when the initial one-time transition payments were issued will receive the transition payments shortly after their return to work from their leave without pay. 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 Services and Procurement Canada, who is responsible for the administration of the Government pay system. The Office incurred $3,823 in transition payments in 2015-2016 ($1,340,933 in 2014-2015).


14. 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 2016 2015
Provision for vacation leave and other benefits $ - $158
Employee Severance Benefits (note 7) - 27
Total liabilities transferred $ - $185

An amount of $30,634 was recovered from the PPSC in 2014-2015 for the salaries paid from October 1st to October 8th 2014.


15. 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)

2016 2015
  Electoral Operations Regulation of Electoral Activities Electoral Engagement Internal Services Total Total
Transfer Payments
Political parties quarterly allowances $- $- $7,443
Reimbursement of candidates' and parties' expenses   100,959 100,959 1,350
Total Transfer Payments 100,959 100,959 8,793
Operating Expenses
Salaries and benefits $196,682 7,837 $6,693 $14,591 225,803 64,810
Rental of equipment and accommodation 43,604 645 158 8,241 52,648 16,273
Travel and communication 42,680 88 149 3,212 46,129 8,332
Professional services 26,920 3,702 1,162 8,976 40,760 32,516
Advertising, publishing and printing 25,003 19 480 245 25,747 5,929
Amortization of tangible capital assets 2,252 474 - 2,282 5,008 4,739
Write off of tangible capital asset 3,312 - - - 3,312 357
Utilities, materials and supplies 1,328 30 49 119 1,526 3,184
Repair and maintenance of equipment 943 1 4 326 1,274 773
Small equipment 436 4 33 203 676 1,956
Loss on disposal of tangible capital asset - - - 6 6 -
Interest and other charges (155)     -     - 10 (145) 209
Total Operating Expenses 343,005 12,800 8,728 38,211 402,744 147,871
Revenues
Excess contributions and donations - 129 - - 129 28
Fines and court awards - - - - - 7
Miscellaneous revenues - - - 157 157 26
Revenues earned on behalf of government     - (129)     - (157) (286) (61)
Total revenues - - - - - -
Net cost from continuing operations $343,005 $113,759 $8,728 $38,211 $503,703 $147,871

16. Comparative Information

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