Copyright Board Canada
Canada

Future-oriented statements 2011-2012

Statement of Management Responsibility

Responsibility for the compilation, content, and presentation of the accompanying future-oriented financial information for the years ended March 31, 2011 and 2012 rests with Copyright Board of Canada management, including responsibility for the appropriateness of the assumptions on which these statements are prepared. The future-oriented financial information has been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector. These statements are based on the best information available and assumptions adopted as at January 4, 2011 and reflect the plans described in the Report on Plans and Priorities.

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

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

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

(in dollars)        

 

  Estimated Results
2011
  Forecast
2012
ASSETS        
Financial assets
       
Due from Consolidated Revenue Fund $ 207,151 $ 223,267
Accounts receivable and advances (Note 9)   31,255   23,002
Total financial assets    238,406   246,269
         
Non-financial assets        
Tangible capital assets (Note 7)   42,037   30,998
Total non-financial assets   42,037   30,998
         
  $ 280,443 $ 277,267
         
LIABILITIES AND EQUITY OF CANADA        
Liabilities        
Accounts payable and accrued liabilities (Note 6)  $ 238,406  $ 246,269
Vacation pay and compensatory leave   87,905   87,905
Allowance for employee severance benefits (Note 8 )   235,816    235,816
    562,127   569,990
         
Equity of Canada $ (281,684) $ (292,723)
         
   $ 280,443   $ 277,267

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

Copyright Board of Canada
Future-oriented Statement of Operations  (Unaudited)
For the year ending March 31

(in dollars)
    Estimated
Results
2011
  Forecast
2012
Expenses        
Tariff Setting and Licenses $ 2,375,983 $ 2,385,991
Internal Services   1,092,605    1,097,208
Total expenses    3,468,588   3,483,199
         
Net cost of operations $ 3,468,588  $  3,483,199
         
Segmented information (Note 10)        
The accompanying notes form an integral part of these future-oriented financial statements.

Copyright Board of Canada
Future-oriented Statement of Equity of Canada (unaudited)
For the year ended March 31

(in dollars)
    Estimated
Results
2011
  Forecast
2012
Equity of Canada, beginning of year  $ (270,646)  $ (281,684)
Net cost of operations   (3,468,588)   (3,483,199)
Net cash provided by Government   3,097,008   3,108,773
Change in due from the Consolidated Revenue Fund   13,451   16,116
Services provided without charge
by other government departments (Note 9)
  347,091   347,271
         
Equity of Canada, end of year  $ (281,684)  $ (292,723)
The accompanying notes form an integral part of these future-oriented financial statements.

Copyright Board of Canada
Future-oriented Statement of Cash Flow (unaudited)
For the year ended March 31

(in dollars)
    Estimated
Results
2011
  Forecast
2012
Operating activities        
Net cost of operations $ 3,468,588 $ 3,483,199
Non cash items:        
Services provided without charge
by other government departments (Note 10)
  (347,091)   (347,271)
Amortization of tangible capital assets (Note 6)   (11,039)   (11,039)
Variations in Statement of Financial Position:        
Increase (decrease) in accounts receivable and advances   (5,698)   (8,253)
Decrease (increase) in accounts payable and accrued liabilities   (7,752)   (7,863)
Cash used in operating activities   3,097,008   3,108,773
         
Net cash provided by Government of Canada $ 3,097,008 $ 3,108,773
The accompanying notes form an integral part of these future-oriented 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 work 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 reasonable for both copyright owners and the users of copyright-protected works, as well as issuing non-exclusive licences authorizing the fully legal 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. Significant Assumptions

These future-oriented statements have been prepared on the basis of the government priorities and the plans of the department as described in the Report on Plans and Priorities.

The main assumptions are as follows:

  • The Copyright Board of Canada’s activities will remain substantially the same as for the previous year. 
  • Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
  • Allowances are based on historical experience and the most up-to-date information possible.
  • Estimated year end information for 2010–11 is used as the opening position for 2011–12 forecasts.

These assumptions are adopted as at January 4, 2011.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for 2010–11 and for 2011–12, actual results achieved are likely to vary from the forecast information presented, and this variation could be material.

In preparing these financial statements the Copyright Board of Canada has made estimates and assumptions concerning the future. These estimates and judgements may differ from the subsequent actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented financial statements and the historical financial statements include:
 

  1. The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense. 
  2. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.
  3. A new collective agreement between the members of Public Service Alliance Canada and the Government of Canada may significantly reduce future severance liabilities


Once the Report on Plans and Priorities is presented, the Copyright Board of Canada will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates.

4. Summary of Significant Accounting Policies

The future-oriented financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which are consistent with 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:

  1. Parliamentary appropriations – the Copyright Board of Canada is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the 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 Future-oriented Statement of Operations and the Future-oriented Statement of Financial Position are not necessarily the same as those provided through appropriations from Parliament. Note 5 provides a high-level reconciliation between the two bases of reporting.
     
  2. Net Cash Provided by Government – The Copyright Board of Canada operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the department is deposited to the CRF and all cash disbursements made by the 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 Government.
     
  3. 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 the Copyright Board of Canada is entitled to draw from the CRF without further appropriations to discharge its liabilities.
     
  4. Expenses – are presented on an 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.

  5. Employee future benefits
    1. 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 the Copyright Board of Canada to make contributions for any actuarial deficiencies of the Plan.
    2. 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.

  6. Account receivables are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.
     
  7. Tangible capital assets – All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. The 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 class Amortization period
Machinery and Equipment 10 years
Computer Hardware  3 to 5 years


5. Parliamentary Appropriations

The Copyright Board of Canada receives most of its funding through expenditure authorities provided by Parliament. Items recognized in the Future-oriented Statement of Operations and the Future-oriented Statement of Financial Position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the 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 are reconciled in the following tables:

a) Reconciliation of net cost of operations to requested authorities:

(in dollars)   Estimated
Results
2011
  Forecast
2012
Net cost of operations $ 3,468,588 $ 3,483,199
Adjustments for items affecting net cost
of operations but not affecting appropriations
       
         
Services provided without charge (Note 10)   (347,091)   (347,271)
Amortization of tangible capital assets
(Note 6)
  (11,039)   (11,039)
    (358,130)   (358,310)
         
Forecast authorities available $ 3,110,458 $ 3,124,889

b) Authorities requested

(in dollars)   Estimated
Results
2011
  Forecast
2012
Budgetary authorities          
Vote 45 - Operating expenditures  $ 2,817,614  $ 2,815,245
Statutory Amounts   292,844   309,644
Forecast authorities available $ 3,110,458 $ 3,124,889

Forecast authorities requested for the year ending March 31, 2012 are the planned spending amounts presented in the 2011–12 Report on Plans and Priorities. Estimated authorities requested for the year ending March 31, 2011 include amounts presented in the 2010–11 Main Estimates and Supplementary Estimates (A) and (B), planned for presentation in Supplementary Estimates (C) and estimates of amounts to be allocated at year-end from Treasury Board central votes. 

6. Accounts Payable and Accrued Liabilities

(in dollars)   Estimated
Results
2011
  Forecast
2012
Accrued liabilities  $ 230,654  $ 230,654
Accrued salaries and wages   7,752   15,615
  $ 238,406 $ 246,269

7. Tangible Capital Assets

(in dollars)   Cost    Accumulated amortization   Net book value
Capital asset class   Opening balance Closing balance   Opening balance Amortization Closing balance   Forecast 2012 Estimated Results 2011
Machinery and equipment   43,536 43,536   41,420 1,059 42,479   1,057  2,116
Computer hardware   115,291 115,291   75,370 9,980 85,350   29,941 39,921
 Total $ 158,827 158,827  $ 116,790 11,039 127,829  $ 30,998 42,037

8 - Accounts Payable

a) Pension benefits

The 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/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Copyright Board of Canada contribute to the cost of the Plan. The 2011–12 forecasted expense amounts to $228,352 (same amount forecasted in 2010–11).  These amounts represent approximately 1.9 times the contributions of 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.

(b) Severance benefits

The 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 has been maintained at March 31, 2010 levels
 

9. 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. The 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, the Copyright Board of Canada is forecasted to receive services, which will be obtained without charge from other Government departments.

a) Common services provided without charge by other government departments

During the year the Copyright Board of Canada is forecasted to receive, without charge from other departments, accommodation and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the Copyright Board of Canada’s Future-oriented Statement of Operations as follows:

(in dollars)   Estimated
Results
2011
  Forecast
2012
Accommodation  $ 228,714  $ 228,894
Employer's contribution to the health
and dental insurance plans
  118,377   118,377
  $ 347,091 $ 347,271
 

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in Copyright Board of Canada’s Future-oriented Statement of Operations.

(b) Other transactions with related parties

(in dollars)   Estimated
Results
2011
  Forecast
2012
Receivables from other Government departments  $ 31,255  $ 23,002
Expenses - Other Government departments
and agencies
  842,972   855,689

10. Segmented Information

(in dollars)        2012
    2011
Total
  Tariff Setting and Licenses   Internal services   Total
 Expenses                
Salaries and employee benefits $ 2,133,835  $ 1,471,562  $ 676,704 $ 2,148,266 
Professional and special services   601,485    412,017   189,468   601,485
Accommodation   228,714   156,792   72,102   228,894
Travel   176,325   120,782   55,542   176,324
Information services   95,083   65,132   29,951   95,083
Rental   72,436   49,619   22,817   72,436
Telecommunication services   53,444   36,609   16,835   53,444
Utilities, materials and supplies   50,536   34,617   15,919   50,536
Furniture and equipment   5,544   3,797   1,746   5,543
Informatics equipment and software   18,218   12,480   5,739   18,219
Repair and maintenance   7,597   5,204   2,393   7,597
Amortization   11,039   7,562   3,477   11,039
Postage and freight   10,621   7,276   3,346   10,622
Other   3,711   2,542   1,169   3,711
Total expenses   3,468,588   2,385,991   1,097,208   3,483,19
                 
Net cost of operations   $ 3,468,588  $ 2,385,991  $ 1,097,208  $ 3,483,19