Copyright Board Canada
Canada

Copyright Board of Canada (116)

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2011, and all information contained in these statements rests with the management of the Copyright Board of Canada. These financial statements have been prepared by management in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Copyright Board of Canada's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Copyright Board of Canada's Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Copyright Board of Canada.

The financial statements of the Copyright Board of Canada have not been audited.

 
The paper version was signed by  
Deputy Head, Claude Majeau Ottawa, Canada
Chief Financial Officer, Gilles McDougall Ottawa, Canada

Copyright Board of Canada
Statement of Financial Position (Unaudited)
As at March 31

(in dollars)    
  2011 2010
ASSETS    
Financial assets    
Due from consolidated Revenue Fund $ 38,765 $ 193,700
Accounts receivable and advances (note 7) 35,396 36,953
Total financial assets 74,161 230,653
   
Non-financial assets    
Tangible capital assets (note 4) 42,037 53,076
Total non-financial assets 42,037 53,076
$ 116,198 $ 283,729
LIABILITIES AND EQUITY OF CANADA    
Liabilities    
Accounts payable and accrued liabilities (note 5) $ 74,161 $ 230,654
Vacation pay and compensatory leave 82,216 87,905
Employee future benefits (note 6) 322,176 235,816
478,553 554,375
Equity of Canada (362,355) (270,646)
$ 116,198 $ 283,729
 
The accompanying notes form an integral part of these financial statements.  

Copyright Board of Canada
Statement of Operations (Unaudited)
For the year ended March 31

(in dollars)
2011 2010
Expenses
Tarrif Setting and Issuance of Licences $ 2,445,497 $ 2,412,069
Internal Services 558,441 565,794
Total expenses 3,003,938 2,977,863
Revenues
Tarrif Setting and Issuance of Licenses - 414
Total revenues - 414
Net cost of operations $ 3003,938 $ 2,977,449
The accompanying notes form an integral part of these financial statements.
The paper version was signed by  
Deputy Head, Claude Majeau Ottawa, Canada
Chief Financial Officer, Gilles McDougall Ottawa, Canada

Copyright Board of Canada
Statement of Equity of Canada (Unaudited)
For the year ended March 31

(in dollars)
2011 2010
Equity of Canada, beginning of year $ (270,646) $ (347,081)
Net cost of operations (3,003,938) (2,977,449)
Net cash provided by Government 2,708,868 2,666,592
Change in due from the Consolidated Revenue Fund (154,935) 49,165
Services provided without charge by other government departments (note 7) 358,296 338,127
Equity of Canada, end of year $ (362,355) $ (270,646)
The accompanying notes form an integral part of these financial statements.

Copyright Board of Canada
Statement of Cash Flows (Unaudited)
For the year ended March 31

(in dollars)
2011 2010
Operating activities
Net cost of operations $ 3,003,938 $ 2,977,449
Non cash items:
  Services provided without charge (note 7) (358,296) (338,127)
  Amortization of tangible capital assets (11,039) (11,039)
  Gain (Loss) on disposal of tangible capital assets - 414
Variations in Statement of Financial Position:
  Increase (decrease) in accounts receivable and advances (1,557) (4,621)
  Decrease (increase) in accounts payable and accrued liabilities 156,493 (44,789)
  Decrease (increase) in vacation pay and compensatory leave 5,689 75,940
  Decrease (increase) in future employee benefits (86,360) 11,779
Cash used by operating activities 2,708,868 2,667,006
Capital investing activities
Proceeds from disposal of tangible capital assets - (414)
Net cash provided by Government of Canada $ 2,708,868 $ 2,666,592
The accompanying notes form an integral part of these financial statements.

1 - Authority and Objectives      

The Copyright Board of Canada is an independent administrative agency which has been conferred department status for purposes of the Financial Administration Act. Its mandate stems from the Copyright Act.

The Copyright Board of Canada plays a major role in the collective administration of copyright, particularly where the public performance and the communication to the public, by telecommunication, of musical works, as well as the retransmission of distant radio and television signals are concerned. The Copyright Board of Canada plays a surveillance role in three ways with respect to collective societies which administer very large repertoires of works created by a multitude of originators both in Canada and in other countries: as an economic regulatory body, by approving tariff proposals by the various copyright collective societies; as an arbitrator in private disputes; and as an arbitrator of the public interest.

The Copyright Board of Canada's principal mandate is to set royalties which are fair and equitable for both copyright owners and the users of copyright-protected works, as well as issuing non-exclusive licences authorizing the use of works when the copyright owner cannot be located.

The Copyright Board of Canada reports annually to Parliament through the Minister of Industry.

2 - Summary of Significant Accounting Policies

These financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

  • Parliamentary appropriations - Copyright Board of Canada is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to Copyright Board of Canada do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the two bases of reporting.
  • Net cash provided by Government - Copyright Board of Canada operates within the Consolidated Revenue Fund (CRF). The CRF is administered by the Receiver General for Canada. All cash received by Copyright Board of Canada is deposited to the CRF and all cash disbursements made by Copyright Board of Canada 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 federal government.
  • Amounts due from/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 net amount of cash that Copyright Board of Canada is entitled to draw from the CRF without further appropriations to discharge its liabilities.
  • Revenues - Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
  • Expenses - Expenses are recorded on the accrual basis:
    • Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
    • Services provided without charge by other government departments for accommodation, and the employer's contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
  • Employee future benefits
    • Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The Copyright Board of Canada's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require Copyright Board of Canada to make contributions for any actuarial deficiencies of the Plan.
    • Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
  • Account receivables are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.
  • Tangible capital assets - All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. Copyright Board of Canada does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections.

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

    Asset Amortization period
    Machinery and Equipment 10 years
    Computer Hardware 3 to 5 years


  • Measurement uncertainty - The preparation of these financial statements in accordance with accounting standards issued by the Treasury Board of Canada Secretariat which are consistent with Canadian generally accepted accounting principles for the public sector requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3 - Parliamentary Appropriations

Copyright Board of Canada receives most of its funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, Copyright Board of Canada has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences between net results of operations and appropriations are reconciled in the following tables.

3a) Reconciliation of net cost of appropriations to current year appropriations used

(in dollars)
2011 2010
Net cost of operations $ 3,003,938 $ 2,977,449
Adjustements for items affecting net cost
of operations but not affecting appropriations:
  Services received without charge (note 7) (358,296) (338,127)
  Employee severance benefits (note 6) (86,360) 11,779
  Amortization of tangible capital assets (note 5) (11,039) (11,039)
  Vacation pay and compensatory leave 5,689 75,940
  Adjustement of prior year's Account Payable 12,010 14,676
  Revenue not available for spending - 414
(437,996) (246,357)
Current year appropriations used $ 2,565,942 $ 2,731,092

3b) Appropriations provided and used

(in dollars)
2011 2010
Vote 45 - Operating expenditures $ 2,976,601 $ 2,949,721
Statutory Amounts 259,500 284,683
Less:
Lapsed appropriations: Operating (670,159) (503,312)
Current year appropriations used $ 2,565,942 $ 2,731,092

4 - Tangible Capital Assets

(in dollars)

Cost
Capital asset class Opening balance Closing balance
Machinery and equipment 43,536 43,536
Computer Hardware 115,291 115,291
Total $ 158,827 $ 158,827
Accumulated amortization
Opening Balance Amortization Closing Balance
40,361 1,059 41,420
65,390 9,980 75,370
$ 105,751 $ 11,039 $ 116,790
2011 2010
Net book value Net book value
2,116 3,175
39,921 49,901
$ 42,037 $ 53,076

5 - Accounts payable and accrued liabilities

(in dollars)
2011 2010
External
  Accounts Payable to External Parties $ 69,801 $ 230,654
  Accrued salaries and wages 4,360 -
Total external 74,161 230,654

6 - Employee Benefits

  1. Pension benefits: Copyright Board of Canada's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

    Both the employees and Copyright Board of Canada contribute to the cost of the Plan. The 2010-2011 expense amounts to $233,073 ($228,352 in 2009-2010), which represents approximately 1.9 times (2.0 times in 2009-2010) the contributions by employees.

    The Copyright Board of Canada'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: Copyright Board of Canada provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:

    (in dollars) 2011 2010
    Accrued benefit obligation, beginning of year $ 235,816 $ 247,595
    Expense for the year 118,789 56,387
    Benefits paid during the year (32,429) (68,166)
    Accrued benefit obligation, end of year $ 322,176 $ 235,816

7 - Related party transactions

The Copyright Board of Canada is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. Copyright Board of Canada enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, Copyright Board of Canada received services, which were obtained without charge from other Government departments as presented below in part (a).

  1. Services provided without charge:

    During the year the Copyright Board of Canada received without charge from other departments, accommodation and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the Copyright Board of Canada's Statement of Operations as follows:

    (in dollars) 2011 2010
    Accomodation $ 227,677 $ 227,657
    Employer's condition to the insurance plans 130,619 110,470
    Total $ 358,296 $ 338,127

    The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General are not included in the Copyright Board of Canada's Statement of Operations.

  2. Other transactions with related parties:

    (in dollars) 2011 2010
    Receivables from other Federal Government departments $ 35,396 $ 36,953
    Expenses - Other Government departments and agencies 752,169 696,120

8 - Segmented Information

(in dollars)
Tarrif Setting
and Issuance of
Licences
Internal Services 2011 Total 2010 Total
Expenses
Salaries and employee benefits $ 1,639,418 $ 373,210 $ 2,012,628 $ 1,782,680
Professional and special services 304,990 72,592 377,582 573,359
Accomodation 184,418 43,259 227,677 227,657
Travel 127,857 27,615 155,472 123,625
Information services 40,737 9,555 50,292 69,302
Rental 54,239 12,723 66,962 66,519
Telecommunication services 28,706 6,734 35,440 38,840
Utilities, materials and supplies 31,465 7,381 38,846 39,430
Furniture and Furnishings 6,408 1,503 7,911 14,527
Informatics equipment and software 7,397 1,788 9,185 14,468
Repair and maintenance 580 136 716 3,297
Amortization 11,039 - 11,039 11,039
Postage and freight 6,541 1,545 8,086 10,501
Other 1,702 400 2,102 2,619
Total expenses 2,445,497 558,441 3,003,938 2,977,863
Revenues
Gain on Disposal of Crown Assets - - - 414
Total revenues - - - 414
Net cost of operations $ 2,445,497 $ 558,441 $ 3,003,938 $ 2,977,449

9 - Comparative information

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