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2019–20 Departmental Results Report

Financial Statements
Office of the Chief Electoral Officer
For the year ended March 31, 2020

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, 2020, 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. Ongoing risk-based assessments of the system of ICFR and key internal controls were conducted throughout the year 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
November 17, 2020

(Original signed by)

Marc Limoges, 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 2020, 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 2020, 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 management determines is necessary to enable the preparation of financial statements that are free from 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 Auditor General of Canada

Ottawa, Canada
17 November 2020

Office of the Chief Electoral Officer
Statement of Financial Position
As at March 31
(in thousands of dollars)
  2020 2019
Liabilities
Due to the Consolidated Revenue Fund $ 6,081 $ 2,759
Accounts payable and accrued liabilities (Note 4) 56,742 19,747
Accrued employee salaries and benefits 6,338 4,753
Provision for vacation leave and other benefits 4,941 3,385
Lease obligation for tangible capital assets (Note 5) 203 240
Deposits from political candidates (Note 6) 102 102
Contractors security deposit 2,500 -
Employee severance benefits (Note 7b) 1,664 1,467
Total net liabilities 78,571 32,453
Financial assets
Due from the Consolidated Revenue Fund 63,181 24,603
Accounts receivable and advances (Note 8) 8,736 3,208
Total net financial assets 71,917 27,811
Net debt (6,654) (4,642)
Non-financial assets
Prepaid expenses 1,478 1,393
Consumable supplies 4,205 5,127
Tangible capital assets (Note 9) 28,682 30,156
Total non-financial assets 34,365 36,676
Net financial position $27,711 $32,034

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
November 17, 2020

(Original signed by)

Marc Limoges, 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)
2020 Planned Results
(Note 2a)
2020 2019
Expenses
Electoral Administration and Oversight $462,757 $512,981 $119,737
Internal Services 53,038 67,529 69,716
Total expenses 515,795 580,510 189,453
Revenues
Excess contributions and donations 165 168 43
Fines and court awards - 494 14
Miscellaneous revenues 55 192 50
Revenues earned on behalf of government (220) (854) (107)
Total revenues - - -
Net cost of operations before government funding and transfers 515,795 580,510 189,453
Government funding and transfers
Net cash provided by government 493,236 526,475 177,268
Change in Due to the Consolidated Revenue Fund - (3,322) (521)
Change in Due from the Consolidated Revenue Fund (2,044) 38,579 6,605
Services provided without charge by other government departments (Note 12) 14,304 11,439 11,405
Other transfers of assets and liabilities (to) / from other government departments - 16 24
Net cost (revenues) of operations after government funding and transfers 10,299 4,323 (5,328)
Net financial position – Beginning of year 32,034 32,034 26,706
Net financial position – End of year $21,735 $27,711 $32,034

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)
2020 Planned Results
(Note 2a)
2020 2019
Net cost (revenues) of operations after government funding and transfers $10,299 $4,323 $(5,328)
Change due to tangible capital assets
Acquisition of tangible capital assets 1,555 5,354 9,594
Additions of capital leases - 36 70
Amortization of tangible capital assets (5,269) (6,864) (4,862)
Loss on disposal of tangible capital assets     -     - (12)
Total change due to tangible capital assets 3,714 1,474 4,790
Change due to consumable supplies
Acquisition of consumable supplies 2,596 6,774 2,254
Usage of consumable supplies (6,234) (7,696) (1,443)
Total change due to consumable supplies (3,638) (922) 811
Change due to prepaid expenses
Additions to prepaid 1,858 3,012 3,087
Usage of prepaid (2,090) (2,927) (2,907)
Total change due to prepaid expenses (232) 85 180
Net increase in net debt 2,715 2,012 453
Net debt – Beginning of year (4,642) (4,642) (4,189)
Net debt – End of year $(7,357) $(6,654) $(4,642)

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)
2020 2019
OPERATING ACTIVITIES
Net cost of operations before government funding and transfers $580,510 $189,453
Non-cash items:
Amortization of tangible capital assets (6,864) (4,862)
Loss on disposal of tangible capital assets - (12)
Services provided without charge by other government departments (Note 12) (14,439) (11,405)
Other transfers of assets and liabilities (to)/ from other government departments (16) (24)
Variations in Statement of Financial Position:
Increase in accounts receivable and advances 5,528 474
Increase in prepaid expenses 85 180
(Decrease) increase in consumable supplies (922) 811
Decrease in deposits from political candidates - 4
(Increase) decrease in employee severance benefits (197) 138
Increase in provision for vacation leave and other benefits (1,556) (540)
Increase in accrued employee salaries and benefits (1,601) (293)
Increase in contractors security deposit (2,500) -
Increase in accounts payable and accrued liabilities (37,529) (6,203)
Cash used in operating activities 520,499 167,721
CAPITAL INVESTMENT ACTIVITIES
Acquisition of tangible capital assets (excluding capital leases) 5,903 9,483
Cash used in capital investing activities 5,903 9,483
FINANCING ACTIVITIES
Payment of lease obligations for tangible capital assets 73 64
Cash used in financing activities 73 64
Net cash provided by Government of Canada $526,475 $177,268

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, 2020

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 adoption of the Elections Modernization Act Bill C-76 also brought about the transfer of the Office of the Commissioner of Canada Elections to the Office of the Chief Electoral Officer. This change came into effect on April 1, 2019.

The Office's Core Responsibilities are Electoral Administration and Oversight and Internal Services. These 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 2019–2020 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. Management believes that the risk is low given that most of its funding comes from statutory appropriations.

    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.

    The Office's policy to manage liquidity risk is consistent with Section 32 of the Financial Administration Act.

    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 the 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.

  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 by the returning officers 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)

    2020 2019
    Net cost of operations before government funding and transfers $580,510 $189,453
    Adjustments for items affecting net cost of operations but not affecting authorities
    Add (less):
    Amortization of tangible capital assets (6,864) (4,862)
    Loss on disposal of tangible capital assets - (12)
    Services provided without charge by other government departments (Note 12) (14,439) (11,405)
    Increase in provision for vacation leave and other benefits (1,556) (540)
    (Increase) decrease in employee severance benefits liability (197) 138
    Bad debt expense 1 (7)
    Usage of prepaid expenses (2,927) (2,907)
    (Decrease) increase in consumable supplies (922) 811
    Adjustment to the accrued liabilities 7,132 -
    Adjustment to the accrued receivables 1,292 -
    Adjustment of previous year salary accrual    28    92
    Total items affecting net cost of operations but not affecting authorities (18,033) (18,692)
    Adjustments for items not affecting net cost of operations but affecting authorities
    Add (less):
    Acquisition of tangible capital assets 5,354 9,594
    Payment of capital lease obligations 73 64
    Other 399 242
    Additions to prepaid expenses 3,012 3,087
    Total items not affecting net cost of operations but affecting authorities 8,838 12,987
    Current year authorities used $570,896 $183,748
  2. Reconciliation of parliamentary authorities provided to current year authorities used

    (in thousands of dollars)

    2020 2019
    Authorities provided:
    Program expenditures (Vote 1) $47,065 $33,820
    Statutory contributions to employee benefit plans 11,864 8,475
    Other statutory expenditures 517,535 143,029
    576,464 185,324
    Less:
    Lapsed authorities – Program expenditures (Vote 1) (5,568) (1,576)
    Current year authorities used $570,896 $183,748

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)

2020 2019
Accounts payable – Other government departments and agencies $2,100 $1,607
Accounts payable – External parties   54 2,434
Total accounts payable 2,154 4,041
Accrued liabilities 54,588 15,706
Total accounts payable and accrued liabilities $56,742 $19,747

5. Lease Obligation for Tangible Capital Assets

The Office has entered into agreements to lease certain equipment under capital leases with a cost of $370,860 and accumulated amortization of $171,321 as at March 31, 2020 ($334,777 and $96,925 respectively as at March 31, 2019). The obligations related to the upcoming years include the following:

(in thousands of dollars)

Maturing year 2020 2019
2020 $ - $ 70
2021 79 70
2022 79 70
2023 47 38
2024 and thereafter 3 -
Total future minimum lease payments 208 248
Less: imputed interest (1.10% to 2.18%) 5 8
Lease obligation for tangible capital assets $203 $240

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/Québec Pension Plan benefits and they are indexed to inflation.

    Both the employees and the Office contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to the Economic Action Plan 2012 , employee contributors have been divided into two groups—Group 1 relates to existing plan members as of December 31, 2012, and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

    The 2019-2020 expense amounts to $8,219,185 ($5,910,254 in 2018–2019). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2018–2019) the employee contributions and, for Group 2 members, approximately 1.00 time (1.00 time in 2018–2019) 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, 2020, 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)

    2020 2019
    Accrued benefit obligation, beginning of year $1,467 $1,605
    Expense for the year 287 87
    Benefits paid during the year (90) (225)
    Accrued benefit obligation, end of year $1,664 $1,467

8. Accounts Receivable and Advances

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

(in thousands of dollars)

2020 2019
Receivables – Other government departments and agencies $7,268 $2,675
Receivables – External parties 1,780 728
Employee advances 45 72
Subtotal 9,093 3,475
Allowance for doubtful accounts on receivables from external parties (243) (244)
Gross accounts receivable and advances 8,850 3,231
Accounts receivable held on behalf of government (114) (23)
Net accounts receivable and advances $8,736 $3,208

9. Tangible Capital Assets

(in thousands of dollars)

Cost
Capital Asset Class Opening balance Acquisitions Transfers Disposals and write-off Closing balance 2020 Net book value 2019 Net book value
Office equipment (including capital leases) $912 $952 $ - $(13) $1,851 $1,290 $519
Informatics equipment 5,085 31 - (106) 5,010 1,112 2,027
Software 50,421 - 10,112 - 60,533 10,491 4,185
Software under development 16,945 2,320 (10,112) - 9,153 9,153 16,945
Furniture and fixtures 3,646 - - - 3,646 818 1,060
Vehicles and motorized equipment 230 - - - 230 37 46
Leasehold improvements 13,160 2,087 - - 15,247 5,781 5,374
Total $90,399 $5,390 - $(119) $95,670 $28,682 $30,156


(in thousands of dollars)

Accumulated Amortization
Capital Asset Class Opening
balance
Transfers Amortization Disposals
and write-off
Closing
balance
Office equipment (including capital leases) $393 - $181 $(13) $561
Informatics equipment 3,058 - 946 (106) 3,898
Software 46,236 - 3,806 - 50,042
Furniture and fixtures 2,586 - 242 - 2,828
Vehicles and motorized equipment 184 - 9 - 193
Leasehold improvements 7,786 - 1,680 - 9,466
Total $60,243 - $6,864 $(119) $66,988

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 $36,083 for new capital leases and $909,480 in relation to the acquisition of tangible capital assets, as the amount relates to capital investing activities in 2019-2020 that remain to be paid as at March 31, 2020. However, an adjustment of $1,459,357 was included to account for the amount related to 2018-2019 that was paid after March 31, 2019.

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)

2021 $57,383
2022 19,893
2023 18,865
2024 20,224
2025 and thereafter 1,260
Total $117,625

11. Contingent Liabilities

Claims have been made against the Office in the normal course of operations. Legal proceedings for claims totaling $21,292,196 ($7,500 in 2018-2019) were still pending as at March 31, 2020. 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, 2020 ($0 in 2018-2019).

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)

    2020 2019
    Accommodation $ 6,570 $ 6,241
    Employer's contribution to the health and dental insurance plans 7,601 4,942
    Audit services 265 219
    Workers' compensation 3 3
    Total $14,439 $11,405

    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. Other transactions with related parties

    (in thousands of dollars)

    2020 2019
    Accounts receivable – Other government departments and agencies $7,268 $2,675
    Accounts payable – Other government departments and agencies 2,100 1,607
    Expenses – Other government departments and agencies 51,634 18,531
    Acquisition of tangible capital assets-Other government departments and agencies 2,078 855

    Expenses disclosed in (b) exclude common services provided without charges, which are already disclosed in (a). Contractual obligations with related parties, as shown in note 10, amount to a total of $3,755,000 in 2021 and $671,000 in 2022.

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)

2020 2019
Electoral Administration and Oversight Internal services Total Total
Transfer payments
Reimbursement of candidates' and parties' expenses $72,647 - $72,647 $1,490
Total transfer payments 72,647 - 72,647 1,490
Operating expenses
Salaries and benefits 260,075 27,444 287,519 83,376
Rental of equipment and accommodation 67,948 12,088 80,036 31,014
Professional services 30,979 18,695 49,674 47,046
Travel and communication 43,233 3,322 46,555 10,859
Advertising, publishing and printing 30,205 349 30,554 5,494
Amortization of tangible capital assets 3,304 3,560 6,864 4,862
Utilities, materials and supplies 3,186 178 3,364 2,637
Small equipment 1,125 1,528 2,653 2,129
Repair and maintenance of equipment 270 347 617 506
Interest and other charges 9 18 27 28
Loss on disposal of tangible capital assets     -     -     -     12
Total operating expenses 440,334 67,529 507,863 187,963
Revenues
Excess contributions and donations 168 - 168 43
Fines and court awards 494 - 494 14
Miscellaneous revenues - 192 192 50
Revenues earned on behalf of government (662) (192) (854) (107)
Total revenues - - - -
Net cost of operations before government funding and transfers $512,981 $67,529 $580,510 $189,453


14. Subsequent Event

On October 23rd, 2020, the Government of Canada reached an agreement with the Public Service Alliance Canada (PSAC) for their members in the Program and Administrative (PA) and in the Technical Services (TC) bargaining units. The agreement provides for a wage increase that covers the period of 2018 to 2021. An agreement was also reached with the same group for compensation for Phoenix damages. The agreement provides a lump sum payment for fiscal years 2016-2017 to 2019-2020. The cost of these agreements represents an estimated amount of approximately $3.8 million for the fiscal years 2016-2017 to 2019-2020. This estimate represents the cost for indeterminate and term employees that were still working at the Office at the time of the signature of the collective agreement and excludes employees who may have worked on a casual basis during the last general election.

15. Comparative Information

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