Copyright Board Canada
Canada

Future-oriented statements 2012-2013

Statement of Management Responsibility

Responsibility for the compilation, content, and presentation of the accompanying future-oriented financial information for the years ended March 31, 2012 and 2013 rests with Copyright Board of Canada management, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at February 1, 2012 and reflect the plans described in the Report on Plans and Priorities.

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
As at March 31

(in dollars)        

 

  Estimated Results
2012
  Planned
Results
2013
ASSETS        
Financial assets
       
Due from Consolidated Revenue Fund $ 62,401 $ 70,851
Accounts receivable and advances (Note 9)   23,875   15,372
Total financial assets    86,276   86,223
         
Non-financial assets        
Tangible capital assets (Note 7)   31,000   19,961
Total non-financial assets   31,000   19,961
         
  $ 117,276 $ 106,184
         
LIABILITIES AND EQUITY OF CANADA        
Liabilities        
Accounts payable and accrued liabilities (Note 6)  $ 86,276  $ 86,223
Vacation pay and compensatory leave   82,216   82,216
Allowance for employee severance benefits (Note 8 )   280,258    279,358
Total liabilities   448,750   447,797
         
Equity of Canada $ (331,474) $ (341,613)
         
   $ 117,276   $ 106,184

Contractual obligations (note 7)
The accompanying notes form an integral part of these future-oriented financial statements.

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

(in dollars)
    Estimated
Results
2012
  Planned
Results
2013
Expenses        
Tarrif Setting and Issuance of Licences $ 2,813,702 $ 2,808,129
Internal Services   660,005   658,697
Total expenses    3,473,707   3,466,826
         
Net cost of operations $ 3,473,707  $ 3,466,826
         
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
For the year ended March 31

(in dollars)
    Estimated
Results
2012
  Planned
Results
2013
Equity of Canada, beginning of year  $ (362,355)  $ (331,474)
Net cost of operations   (3,473,707)   (3,466,826)
Net cash provided by Government   3,143,173   3,110,458
Change in due from the Consolidated Revenue Fund   23,636   8,450
Services provided without charge
by other government departments (Note 9)
  337,779   337,779
         
Equity of Canada, end of year  $ (331,474)  $ (341,613)
The accompanying notes form an integral part of these future-oriented financial statements.

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

(in dollars)
    Estimated
Results
2012
  Planned
Results
2013
Operating activities        
Net cost of operations $ 3,473,707 $ 3,466,826
Non cash items:        
Services provided without charge (Note 9)   (337,779)   (337,779)
Amortization of tangible capital assets (Note 7)   (11,039)   (11,039)
Variations in Statement of Financial Position:        
Decrease in accounts receivable and advances   (11,520)   (8,503)
Decrease (increase) in accounts payable and accrued liabilities   (12,114)   53
Decrease in future employee benefits   41,918   900
Cash used by operating activities   (3,143,173   3,110,458
         
Net cash provided by Government of Canada $ 3,143,173 $ 3,110,458
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 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, 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 2011-12 is used as the opening position for 2012-13 forecasts.

These assumptions are adopted as at February 1, 2012.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for 2011–12 and for 2012–13, actual results achieved are likely to vary from the forecast information presented, and this variation could be material.

In preparing these future-oriented financial statements the Copyright Board of Canada has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions 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. Variances will be explained in the Departmental Performance Report.

4. Summary of Significant Accounting Policies

The future-oriented financial statements have been prepared in accordance with the Treasury Board accounting policies in effect for the 2011–12 fiscal year. These accounting policies, stated below,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. Financial reporting of authorities provided to the Copyright Board of Canada 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 Future-oriented Statement of Operations and the Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities 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 parliamentary expenditure authorities to discharge its liabilities.

  4. Expenses – are presented on an accrual basis:
    • Vacation pay and compensatory leave are accrued as the benefits earned under the 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 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) Authorities requested

(in dollars)   Estimated
Results
2012
  Planned
Results
2013
Budgetary authorities        
Vote 45 - Operating expenditures $ 2,815,245 $ 2,815,245
Statutory Amounts   309,644   302,763
         
Forecast authorities available $ 3,124,889 $ 3,118,008

Authorities presented reflect current forecasts of statutory items, approved initiatives included and expected to be included in Estimates documents and, when reasonable estimates can be made, estimates of amounts to be allocated from Treasury Board central votes.

(b) Reconciliation of net cost of operations to requested authorities

(in dollars)   Estimated
Results
2012
  Planned
Results
2013
Net cost of operations $ 3,473,707 $ 3,466,826
Adjustments for items affecting net cost
of operations but not affecting appropriations
       
Add (Less):        
Services provided without charge (Note 9)   (337,779)   (337,779)
Amortization of tangible capital assets
(Note 7)
  (11,039)   (11,039)
         
Forecast authorities available $ 3,110,458 $ 3,124,889

6. Accounts Payable and Accrued Liabilities

(in dollars)   Estimated
Results
2012
  Planned
Results
2013
Accounts payable to external parties  $ 69,801  $ 69,801
Accrued salaries and wages   16,475   16,422
  $ 86,276 $ 86,223

7. Tangible Capital Assets

(in dollars)   Cost    Accumulated amortization   2013 2012
Capital asset class   Opening balance Closing balance   Opening balance Amortization Closing balance   Net book value Net book value
Machinery and equipment   43,536 43,536   42,477 1,059 43,536   - 1,059
Computer hardware   115,291 115,291   85,350 9,980 95,330   19,961 29,941
 Total $ 158,827 158,827  $ 127,827 11,039 138,866  $ 19,961 31,000

8 - Employee Benefits

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. 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 2012–13 forecasted expense amounts to $228,352 (same amount forecasted in 2011–12). 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 authorities. Information about the severance benefits liability has been forecasted using historical trend data

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 receives services without charge from certain common service organizations, related to accommodation and the employer's contribution to the health and dental insurance plans. New lease arrangements for the Copyright Board of Canada are currently being negotiated on behalf of the department and as such, accommodation charges cannot be accurately predicted. Accommodation charges from the previous fiscal year have been used for these statements. These services provided without charge have been recorded in the Copyright Board of Canada Future-oriented Statement of Operations as follows:

(in dollars)   Estimated
Results
2012
  Planned
Results
2013
Accommodation  $ 225,867  $ 225,867
Employer's contribution to the insurance plans   111,912   111,912
  $ 337,779 $ 337,779
 

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 Future-oriented Statement of Operations.

(b) Other transactions with related parties

(in dollars)   Estimated
Results
2012
  Planned
Results
2013
Receivables from other Government departments  $ 23,875  $ 15,372
Expenses - Other Government departments
and agencies
  889,996   888,233

10. Segmented Information

Presentation by segment is based on the Copyright Board of Canada's program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 4. The following table presents the forecasted expenses incurred and for the main program activities, by major object of expenses. The segment results for the period are as follows:

(in dollars)        2013
    2012
Total
  Tariff Setting and Issuance of Licences   Internal Services   Total
 Operating Expenses                
Salaries and employee benefits $ 2,141,801  $ 1,729,285  $ 405,635 $ 2,134,920 
Professional and special services   601,026    467,340   109,623   576,963
Accommodation   225,867   182,952   42,915   225,867
Travel   176,226   159,953   37,520   197,473
Information services   95,027   70,517   16,541   87,058
Rental   72,383   65,001   15,247   80,248
Telecommunication services   53,413   44,563   10,453   55,016
Utilities, materials and supplies   51,246   43,507   10,205   53,712
Furniture and equipment   5,532   4,553   1,068   5,621
Informatics equipment and software   18,207   15,248   3,577   18,825
Repair and maintenance   7,594   4,305   1,010   5,315
Amortization   11,039   8,942   2,097   11,039
Postage and freight   10,613   9,070   2,127   11,197
Other   3,733   2,893   679   3,572
Total operating expenses   3,473,707   2,808,129   658,697   3,466,826
                 
Net cost of operations   $ 3,473,707  $ 2,808,129  $ 658,697  $ 3,466,826