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2018–19 Departmental Results Report

Financial Statements
Office of the Chief Electoral Officer
For the year ended March 31, 2019

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, 2019, and all information contained in these financial 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 Results Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and 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 an annual risk-based assessment of the effectiveness of the system of ICFR. 

The system of ICFR is designed to mitigate risks to a reasonable level based on an on-going process to identify key risks, to assess effectiveness of associated key controls and to make any necessary adjustments. A risk-based assessment of the system of ICFR for the year ended March 31, 2019, was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.

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 Auditor General of Canada, 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)

Stéphane Perrault
Chief Electoral Officer of Canada


Gatineau, Canada
August 28, 2019

(Original signed by)

Hughes St-Pierre, CPA, CMA
Chief Financial Officer


Independent auditor's report

To the Speaker of the House of Commons

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of the Office of the Chief Electoral Officer (the Office), which comprise the statement of financial position as at 31 March 2019, 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 notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Office as at 31 March 2019, 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.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Office in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

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

In preparing the financial statements, management is responsible for assessing the Office's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Office or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Office's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
  • Obtain an understanding of internal control relevant to the audit 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 Office's internal control.
  • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
  • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Office's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Office to cease to continue as a going concern.
  • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on Compliance with Specified Authorities

Opinion

In conjunction with the audit of the financial statements, we have audited transactions of the Office of the Chief Electoral Officer coming to our notice for compliance with specified authorities. The specified authorities against which compliance was audited are the Financial Administration Act and regulations, the Canada Elections Act, the Referendum Act and the Electoral Boundaries Readjustment Act.

In our opinion, the transactions of the Office of the Chief Electoral Officer that came to our notice during the audit of the financial statements have complied, in all material respects, with the specified authorities referred to above.

Responsibilities of Management for Compliance with Specified Authorities

Management is responsible for the Office of the Chief Electoral Officer's compliance with the specified authorities named above, and for such internal control as management determines is necessary to enable the Office of the Chief Electoral Officer to comply with the specified authorities.

Auditor's Responsibilities for the Audit of Compliance with Specified Authorities

Our audit responsibilities include planning and performing procedures to provide an audit opinion and reporting on whether the transactions coming to our notice during the audit of the financial statements are in compliance with the specified authorities referred to above.

(Original signed by)

Riowen Yves Abgrall, CPA, CA
Principal
for the Interim Auditor General of Canada

Ottawa, Canada
28 August 2019

Office of the Chief Electoral Officer
Statement of Financial Position
As at March 31
(in thousands of dollars)
  2019 2018
Liabilities
Due to the Consolidated Revenue Fund $ 2,759 $ 2,238
Accounts payable and accrued liabilities (Note 4) 19,747 13,378
Accrued employee salaries and benefits 4,753 4,515
Provision for vacation leave and other benefits 3,385 2,845
Lease obligation for tangible capital assets (Note 5) 240 234
Deposits from political candidates (Note 6) 102 106
Employee severance benefits (Note 7b) 1,467 1,605
Total net liabilities 32,453 24,921
Financial assets
Due from the Consolidated Revenue Fund 24,603 17,998
Accounts receivable and advances (Note 8) 3,231 2,825
Total gross financial assets 27,834 20,823
Financial assets held on behalf of government
Accounts receivable – from external parties (Note 8) (23) (91)
Total financial assets held on behalf of government (23) (91)
Total net financial assets 27,811 20,732
Net debt (4,642) (4,189)
Non-financial assets
Prepaid expenses 1,393 1,213
Consumable supplies 5,127 4,316
Tangible capital assets (Note 9) 30,156 25,366
Total non-financial assets 36,676 30,895
Net financial position $32,034 $26,706

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)

Stéphane Perrault
Chief Electoral Officer of Canada

Gatineau, Canada
August 28, 2019

(Original signed by)

Hughes St-Pierre, CPA, CMA
Chief Financial Officer




Office of the Chief Electoral Officer
Statement of Operations and Net Financial Position
For the Year Ended March 31
(in thousands of dollars)
2019 Planned Results
(Note 2a)
2019 2018
Expenses
Electoral Administration and Oversight $89,610 $119,737 $87,368
Internal Services 49,977 69,716 50,895
Total expenses 139,587 189,453 138,263
Revenues
Excess contributions and donations 127 43 203
Fines and court awards - 14 3
Miscellaneous revenues 21 50 25
Revenues earned on behalf of government (148) (107) (231)
Total revenues - - -
Net cost of operations before government funding and transfers 139,587 189,453 138,263
Government funding and transfers
Net cash provided by government 135,212 177,268 125,522
Change in Due to the Consolidated Revenue Fund - (521) 764
Change in Due from the Consolidated Revenue Fund (13,623) 6,605 2,852
Services provided without charge by other government departments (Note 12) 11,135 11,405 11,007
Other transfers of assets and liabilities (to) / from other government departments - 24 (4)
Net cost (revenues) of operations after government funding and transfers 6,863 (5,328) (350)
Net financial position – Beginning of year 26,706 26,706 26,356
Net financial position – End of year $19,843 $32,034 $26,706

Segmented information (Note 13)

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)
2019 Planned Results
(Note 2a)
2019 2018
Net cost (revenues) of operations after government funding and transfers $6,863 $(5,328) $(350)
Change due to tangible capital assets
Acquisition of tangible capital assets 7,524 9,594 8,765
Additions of capital leases - 70 264
Amortization of tangible capital assets (5,110) (4,862) (4,358)
Loss on disposal of tangible capital assets - (12) (89)
Write off of tangible capital assets - - (198)
Total change due to tangible capital assets 2,414 4,790 4,384
Change due to consumable supplies
Acquisition of consumable supplies 4,500 2,254 773
Usage of consumable supplies - (1,443) (327)
Total change due to consumable supplies 4,500 811 446
Change due to prepaid expenses
Additions to prepaid 1,596 3,087 1,894
Usage of prepaid (1,822) (2,907) (2,186)
Total change due to prepaid expenses (226) 180 (292)
Net increase in net debt 13,551 453 4,188
Net debt – Beginning of year (4,189) (4,189) (1)
Net debt – End of year $(17,740) $(4,642) $(4,189)

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)
2019 2018
OPERATING ACTIVITIES
Net cost of operations before government funding and transfers $189,453 $138,263
Non-cash items:
Amortization of tangible capital assets (4,862) (4,358)
Loss on disposal of tangible capital assets (12) (89)
Write off of tangible capital assets - (198)
Services provided without charge by other government departments (Note 12) (11,405) (11,007)
Write off of lease obligation for tangible capital assets - 4
Other transfers of assets and liabilities (to)/ from other government departments (24) 4
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances 474 (2,952)
Increase (decrease) in prepaid expenses 180 (292)
Increase in consumable supplies 811 446
Decrease in deposits from political candidates 4 47
Decrease in employee severance benefits 138 76
Increase in provision for vacation leave and other benefits (540) (370)
Increase in accrued employee salaries and benefits (293) (82)
Increase in accounts payable and accrued liabilities (6,203) (2,380)
Cash used in operating activities 167,721 117,112
CAPITAL INVESTMENT ACTIVITIES
Acquisition of tangible capital assets (excluding capital leases) 9,483 8,343
Cash used in capital investing activities 9,483 8,343
FINANCING ACTIVITIES
Payment of lease obligations for tangible capital assets 64 67
Cash used in financing activities 64 67
Net cash provided by Government of Canada $177,268 $125,522

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, 2019

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 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, transfer payments to eligible political entities, redistribution of electoral boundaries and continuing public education programs.

The Office's Core Responsibilities are Electoral Administration and Oversight and Internal Services. The responsibilities are:

Electoral Administration and Oversight

This responsibility is to prepare for, deliver and report on federal elections and referendums in accordance with the legislative framework, while ensuring integrity throughout the electoral process.

Internal Services

Internal services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories 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; and Acquisitions Services.

2. Summary of Significant Accounting Policies

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

Significant accounting policies are as follows:

  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 2018–2019 Departmental Plan.

    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 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, such as reimbursement to political parties and candidates, 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 Act that have come into being are recorded as a reduction to transfer payment expense and as a receivable. This process may take place over several fiscal years, mainly due to the timing of an election, the statutory reporting deadlines of election returns from political entities and the conduct of the review by Elections Canada.

    Vacation pay and other benefits are accrued as the benefits are earned by employees under their respective terms of employment.

  6. 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 carrying value, in the Statement of Operations and Net Financial Position.

  7. 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 – The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
  8. 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 departments and agencies have a minimal potential risk of loss. The maximum exposure the Office has to credit risk is equal to the carrying value of its accounts receivable.

  9. Contingent liabilities – Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. If the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, a provision is accrued and an expense recorded to other expenses. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

  10. 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.

  11. 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
  12. Measurement uncertainty – The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31.

    The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the Office's best estimates of the related amount at the end of the reporting period. 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 and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

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

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

    1. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
    2. Certain services received on a without charge basis are recorded for financial statement purposes at the carrying amount.

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)

    2019 2018
    Net cost of operations before government funding and transfers $189,453 $138,263
    Adjustments for items affecting net cost of operations but not affecting authorities
    Add (less):
    Amortization of tangible capital assets (4,862) (4,358)
    Write off of tangible capital assets - (198)
    Loss on disposal of tangible capital assets (12) (89)
    Services provided without charge by other government departments (Note 12) (11,405) (11,007)
    Increase in provision for vacation leave and other benefits (540) (370)
    Decrease in employee severance benefits liability 138 76
    Bad debt expense (7) (124)
    Usage of prepaid expenses (2,907) (2,186)
    Increase in consumable supplies 811 446
    Adjustment to the accrued liabilities - 51
    Adjustment of previous year salary accrual 92 99
    Other - 21
    Total items affecting net cost of operations but not affecting authorities (18,692) (17,639)
    Adjustments for items not affecting net cost of operations but affecting authorities
    Add (less):
    Acquisition of tangible capital assets 9,594 8,765
    Payment of capital lease obligations 64 67
    Other 242 136
    Additions to prepaid expenses 3,087 1,894
    Total items not affecting net cost of operations but affecting authorities 12,987 10,862
    Current year authorities used $183,748 $131,486
  2. Reconciliation of parliamentary authorities provided to current year authorities used

    (in thousands of dollars)

    2019 2018
    Authorities provided:
    Program expenditures (Vote 1) $33,820 $32,302
    Statutory contributions to employee benefit plans 8,475 7,364
    Other statutory expenditures 143,029 92,218
    185,324 131,884
    Less:
    Lapsed authorities – Program expenditures (Vote 1) (1,576) (398)
    Current year authorities used $183,748 $131,486

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)

2019 2018
Accounts payable – Other government departments and agencies $1,607 $1,345
Accounts payable – External parties 2,434 3,312
Total accounts payable 4,041 4,657
Accrued liabilities 15,706 8,721
Total accounts payable and accrued liabilities $19,747 $13,378

5. Lease Obligation for Tangible Capital Assets

The Office has entered into agreements to lease certain equipment under capital leases with a cost of $ 334,777 and accumulated amortization of $ 96,925 as at March 31, 2019 ($276,434 and $42,726 respectively as at March 31, 2018). The obligations related to the upcoming years include the following:

(in thousands of dollars)

Maturing year 2019 2018
2019 $ - $ 56
2020 70 55
2021 70 55
2022 70 55
2023 and thereafter 38 23
Total future minimum lease payments 248 244
Less: imputed interest (1.10% to 2.18%) 8 10
Lease obligation for tangible capital assets $240 $234

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.

Following a court decision, the deposit requirement provision is no longer applied by the Office. The outstanding liability represents deposits up to October 2017.

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 2018–2019 expense amounts to $5,910,254 ($5,014,989 in 2017–2018). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2017–2018) the employee contributions and, for Group 2 members, approximately 1.00 time (1.00 time in 2017–2018) the employee contributions.

  2. Employee severance benefits

    Severance benefits provided to the Office's employees were previously based on an employee's eligibility, years of service and salary at termination of employment. However, since 2012 the accumulation of severance benefits for voluntary departures progressively ceased for all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date of collect the full or remaining value of benefits upon departure from the public service. As at March 31, 2019, all settlements for immediate cash out were completed and the remaining obligation will be disbursed upon departure from the public service.

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

    (in thousands of dollars)

    2019 2018
    Accrued benefit obligation, beginning of year $1,605 $1,681
    Expense for the year 87 202
    Benefits paid during the year (225) (278)
    Accrued benefit obligation, end of year $1,467 $1,605

8. Accounts Receivable and Advances

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

(in thousands of dollars)

2019 2018
Receivables – Other government departments and agencies $2,675 $2,154
Receivables – External parties 728 980
Employee advances 72 50
Subtotal 3,475 3,184
Allowance for doubtful accounts on receivables from external parties (244) (359)
Gross accounts receivable and advances 3,231 2,825
Accounts receivable held on behalf of government (23) (91)
Net accounts receivable and advances $3,208 $2,734

9. Tangible Capital Assets

(in thousands of dollars)

Cost
Capital Asset Class Opening balance Acquisitions Transfers Disposals and write-off Closing balance 2019 Net book value 2018 Net book value
Office equipment (including capital leases) $1,228 $82 $ - $(398) $912 $519 $564
Informatics equipment 5,523 1,796 (27) (2,207) 5,085 2,027 914
Software 49,498 201 722 - 50,421 4,185 5,622
Software under development 10,948 6,692 (695) - 16,945 16,945 10,948
Furniture and fixtures 3,646 - - - 3,646 1,060 1,294
Vehicles and motorized
equipment
225 35 - (30) 230 46 24
Leasehold improvements 12,302 858 - - 13,160 5,374 6,000
Total $83,370 $9,664 - $(2,635) $90,339 $30,156 $25,366


(in thousands of dollars)

Accumulated Amortization
Capital Asset Class Opening
balance
Transfers Amortization Disposals
and write-off
Closing
balance
Office equipment (including capital leases) $664 $5 $119 $(395) $393
Informatics equipment 4,609 - 647 (2,198) 3,058
Software 43,876 - 2,360 - 46,236
Furniture and fixtures 2,352 (5) 239 - 2,586
Vehicles and motorized equipment 201 - 13 (30) 184
Leasehold improvements 6,302 - 1,484 - 7,786
Total $58,004 - $4,862 $(2,623) $60,243

The acquisition of tangible capital assets, the increase in accrued employee salaries and benefits and the increase in accounts payable and accrued liabilities presented in the Statement of Cash Flow excludes amounts of $70,664 for new capital leases and $1,459,357 in relation to the acquisition of tangible capital assets, as the amount relates to capital investing activities in 2018–2019 that remain to be paid as at March 31, 2019. However, an adjustment of$1,348,256 was included to account for the amount related to 2017–2018 that was paid after March 31, 2018.

10. Contractual Obligations

The nature of the Office's activities may 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)

2020 $148,048
2021 29,354
2022 18,851
2023 17,000
2024 and thereafter 19,140
Total $232,393

11. Contingent Liabilities

Claims have been made against the Office in the normal course of operations. Legal proceedings for claims totalling $7,500 ($18,110 in 2017–2018) were still pending as at March 31, 2019. 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, 2019 ($0 in 2017–2018).

12. Related Party Transactions

The Office is related as a result of common ownership to all government departments, agencies and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual. Key management personnel include the Chief Electoral Officer and the Deputies Chief Electoral Officers. The Office enters into transactions with these entities in the normal course of business and on normal trade terms. There are no transactions that have occurred at a value different from that which would have been arrived at if the parties were unrelated.

  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, audit services and workers' compensation coverage.

    These services provided without charge have been recorded at the carrying value in the Office's Statement of Operations and Net Financial Position as follows:

    (in thousands of dollars)

    2019 2018
    Accommodation $6,241 $5,960
    Employer's contribution to the health and dental insurance plans 4,942 4,812
    Audit services 219 230
    Workers' compensation 3 5
    Total $11,405 $11,007

    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 2018–2019, 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 $6,736 ($6,736 in 2017–2018).

    Other transactions with related parties

    (in thousands of dollars)

    2019 2018
    Accounts receivable – Other government departments and agencies $2,675 $2,154
    Accounts payable – Other government departments and agencies 1,607 1,345
    Expenses – Other government departments and agencies 18,531 10,339
    Tangible capital assets – Other government departments and agencies 855 -

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

13. Segmented Information

Information for the Office is presented by segment based on a breakdown by core responsibility. 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 core responsibilities, by major object of expenses and by major type or revenues.

The segmented results for the period are as follows:

(in thousands of dollars)

2019 2018
Electoral Administration and Oversight Internal services Total Total
Transfer payments
Reimbursement of candidates' and parties' expenses $1,490 - $1,490 $2,232
Total transfer payments 1,490 - 1,490 2,232
Operating expenses
Salaries and benefits 59,976 $23,400 83,376 71,262
Professional services 19,517 27,529 47,046 30,226
Rental of equipment and accommodation 19,873 11,141 31,014 18,192
Travel and communication 8,691 2,168 10,859 6,187
Advertising, publishing and printing 5,041 453 5,494 3,374
Amortization of tangible capital assets 2,248 2,614 4,862 4,358
Utilities, materials and supplies 2,196 441 2,637 820
Small equipment 624 1,505 2,129 924
Repair and maintenance of equipment 80 426 506 276
Interest and other charges 1 27 28 125
Loss on disposal of tangible capital assets - 12 12 89
Write off of tangible capital assets - - - 198
Total operating expenses 118,247 69,716 187,963 136,031
Revenues
Excess contributions and donations 43 - 43 203
Fines and court awards 14 - 14 3
Miscellaneous revenues - 50 50 25
Revenues earned on behalf of government (57) (50) (107) (231)
Total revenues - - - -
Net cost of operations before government funding and transfers $119,737 $69,716 $189,453 $138,263


14. Comparative Information

Certain comparative figures have been reclassified to conform to the current year's presentation. The 2017–18 expenses reported in the Statement of Operations and Departmental Net Financial Position have been reclassified by core responsibility (see Note 1). The Office's core responsibilities are set out in its Departmental Results Framework, in accordance with the Treasury Board Policy on Results.

15. Subsequent Events

On June 13, 2019, the Government of Canada and 15 of its unions reached an agreement to compensate employees who may have been affected by the Phoenix pay system. The agreement also extends to excluded employees from bargaining agents that have signed onto this agreement as well as unrepresented employees and executives. The agreement provides for a one-time provision of up to a maximum of five additional annual vacation days for the fiscal years 2016-17 to 2019-20. The cost of this agreement represents an increase in the provision for vacation pay and other benefits for an estimated amount of approximately $ 406,744 for the fiscal years 2016-17 to 2018-19.

After March 31, 2019, the Office was charged for claims totaling approximately $ 21,000,000. At this time it's not possible to provide an estimate of the financial effect of the litigation actions.