Archived - Aboriginal Affairs and Northern Development Canada — Future-Oriented Financial Statements for the Year Ending March 31, 2014
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Table of contents
- Statement of Management Responsibility
- Future-Oriented Financial Statements (Unaudited)
- Notes to the Future-Oriented Financial Statements (Unaudited)
- Authority and Objectives
- Methodology and Significant Assumptions
- Variations and Changes to the Forecast Financial Information
- Summary of Significant Accounting Policies
- Parliamentary Authorities
- Accounts Payable and Accrued Liabilities
- Other Liabilities
- Trust Account
- Settled Claims
- Contingent Liabilities
- Employee Future Benefits
- Accounts Receivable and Advances
- Interest Receivable
- Loans Receivable
- Land Held for Future Claim Settlements
- Tangible Capital Assets
- Departmental Net Financial Position
- Contractual Obligations
- Related Party Transactions
- Segmented Information
- Comparative Information
Statement of Management Responsibility
Responsibility for the compilation, content, and presentation of the accompanying future-oriented financial statements for the year ending March 31, 2014 and the accompanying notes rests with the management of Aboriginal Affairs and Northern Development Canada (AANDC). These future-oriented financial statements have been prepared by management in accordance with Treasury Board accounting policies, which are based on Canadian public sector accounting standards.
Management is responsible for the appropriateness of the assumptions on which these future-oriented financial statements have been prepared. These statements are based on the best information available and assumptions adopted as at December 31, 2012, and reflect the plans described in the Report on Plans and Priorities.
At the time of preparation of these statements, management believes the estimates and assumptions to be fair and reasonable. However, as with all such estimates and assumptions, there is a measure of uncertainty. Actual results for the fiscal years covered in the accompanying future-oriented financial statements will vary from the information presented and these variations may be material.
Original Signed By Michael Wernick
_________________________________
Michael Wernick
Deputy Minister
Gatineau, Canada
January 31, 2013
Original Signed By Susan MacGowan
_________________________________
Susan MacGowan, CMA
Chief Financial Officer
Future-Oriented Financial Statements (Unaudited)
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Liabilities | ||
Accounts payable and accrued liabilities (note 6) | 506,710 | 611,512 |
Vacation pay and compensatory leave | 18,047 | 19,145 |
Other liabilities (note 7) | 90,832 | 83,445 |
Trust accounts (note 8) | 979,704 | 944,880 |
Settled claims | 348,666 | 433,178 |
Provision for claims and litigation (note 10) | 9,976,333 | 10,504,729 |
Environmental liabilities (note 10) | 2,175,700 | 2,347,576 |
Provision for loan guarantees (note 10) | 1,555 | 1,555 |
Employee future benefits (note 11) | 22,117 | 29,334 |
Total liabilities | 14,119,664 | 14,975,354 |
Financial assets | ||
Due from the Consolidated Revenue Fund | 1,565,384 | 1,623,317 |
Accounts receivable and advances (note 12) | 52,045 | 56,527 |
Interest receivable (note 13) | 1,233 | 1,290 |
Loans receivable (note 14) | 842,585 | 811,774 |
Total gross financial assets | 2,461,247 | 2,492,908 |
Financial assets held on behalf of Government | ||
Interest receivable (note 13) | (1,233) | (1,290) |
Loans receivable (note 14) | (842,585) | (811,774) |
Total financial assets held on behalf of Government | (843,818) | (813,064) |
Total net financial assets | 1,617,429 | 1,679,844 |
Departmental net debt | 12,502,235 | 13,295,510 |
Non-financial assets | ||
Land held for future claims settlements (note 15) | 38,349 | 32,388 |
Tangible capital assets (note 16) | 78,804 | 65,127 |
Total non-financial assets | 117,153 | 97,515 |
Departmental net financial position (note 17) | (12,385,082) | (13,197,995) |
Information for the year ended March 31, 2013 includes actual amounts from April 1 to November 30, 2012. Contingent liabilities (note 10) Contractual obligations (note 18) The accompanying notes form an integral part of these financial statements. |
Original Signed By Michael Wernick
_________________________________
Michael Wernick
Deputy Minister
Gastineau, Canada
January 31, 2013
Original Signed By Susan MacGowan
_________________________________
Susan MacGowan, CMA
Chief Financial Officer
Future-Oriented Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Expense | ||
People | 3,570,137 | 3,723,754 |
Land and Economy | 1,537,896 | 1,410,959 |
Government | 1,487,532 | 2,079,323 |
Internal Services | 275,248 | 326,157 |
North | 250,041 | 320,774 |
Expenses incurred on behalf of Government) | (7,627) | (7,627) |
Total expenses | 7,113,227 | 7,853,340 |
Revenues | ||
Resource royalties | 64,733 | 65,388 |
Norman Wells project profits | 91,183 | 94,334 |
Miscellaneous | 2,438 | 2,437 |
Interest on loans | 6,943 | 6,943 |
Leases and rentals | 1,873 | 1,873 |
Finance and administrative services | 750 | 710 |
Revenues earned on behalf of Government | (167,170) | (170,975) |
Total revenues | 750 | 710 |
Net cost of operations before government funding and transfers | 7,112,477 | 7,852,630 |
Government funding and transfers | ||
Net cash provided by Government | 7,898,364 | 8,462,184 |
Change in due from the Consolidated Revenue Fund | (57,933) | (82,964) |
Services provided without charge by other government departments (note 19) | 84,959 | 92,160 |
Transfer of assets and liabilities to other government departments | - | (377) |
Net cost of operations after government funding and transfers | (812,913) | (618,373) |
Departmental net financial position – Beginning of year | (13,197,995 | (13,816,368) |
Departmental net financial position – End of year | (12,385,082) | (13,197,995 |
Information for the year ended March 31, 2013 includes actual amounts from April 1 to November 30,
2012. Segmented information (note 20) The accompanying notes form an integral part of these financial statements. |
Future-Oriented Statement of Change in Departmental Net Debt (Unaudited)
For the year ended March 31
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Net cost of operations after government funding and transfers | (812,913) | (618,373) |
Change due to tangible capital assets | ||
Acquisition of tangible capital assets (note 16) | 21,125 | 17,613 |
Amortization of tangible capital assets (note 16) | (7,448) | (4,689) |
Proceeds from disposal of tangible capital assets | (754) | (1,518) |
Gain (loss) on disposal of tangible capital assets | 754 | 1,518 |
Transfer to other government departments | - | (377) |
Total change due to tangible capital assets | 13,677 | 12,547 |
Change due to land held for future claim settlements | 5,961 | 6,118 |
Net increase (decrease) in departmental net debt | (793,275) | (599,708) |
Departmental net debt – Beginning of year | 13,295,510 | 13,895,218 |
Departmental net debt – End of year | 12,502,235 | 13,295,510 |
Information for the year ended March 31, 2013 includes actual amounts from April 1 to November 30,
2012. The accompanying notes form an integral part of these financial statements. |
Future-Oriented Statement of Cash Flow (Unaudited)
For the Year Ended March 31
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Operating activities | ||
Net cost of operations before government funding and transfers | 7,112,477 | 7,852,630 |
Non-cash items: | ||
Amortization of tangible capital assets (note 16) | (7,448) | (4,689) |
Gain (loss) on disposal of tangible capital assets | 754 | 1,518 |
Services provided without charge by other government departments (note 19) | (84,959) | (92,160) |
Variations in Statement of Financial Position: | ||
Increase (decrease) in accounts receivable and advances | (4,482) | (2,976) |
Increase (decrease) in land held for future claim settlements | 5,961 | 6,118 |
Decrease (increase) in liabilities | 855,690 | 685,648 |
Cash used by operating activities | 7,877,993 | 8,446,089 |
Capital investing activities | ||
Acquisition of tangible capital assets | 21,125 | 17,613 |
Proceeds from disposal of tangible capital assets | (754) | (1,518) |
Cash used in capital investing activities | 20,371 | 16,095 |
Net cash provided by Government of Canada | 7,898,364 | 8,462,184 |
Information for the year ended March 31, 2013 includes actual amounts from April 1 to November 30,
2012. The accompanying notes form an integral part of these financial statements. |
Notes to the Future-Oriented Financial Statements (Unaudited)
For the Year Ended March 31
1. Authority and Objectives
The Department, under its legal name the Department of Indian Affairs and Northern Development, was established by the Government Organization Act, 1966 and continued by the Department of Indian Affairs and Northern Development Act (R.S., 1985, c. I-6). It is named in Schedule I of the Financial Administration Act. However, the Department is more commonly known by its applied title under the Federal Identity Program (FIP) as Aboriginal Affairs and Northern Development Canada (AANDC).
Additional information is provided in Section I of AANDC's 2013-14 Report on Plans and Priorities(RPP).
2. Methodology and Significant Assumptions
The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the department as described in the RPP.
The information in the estimated results for fiscal year 2012-13 is based on actual results as at November 30, 2012 and forecasts for the remainder of the fiscal year. Estimated year end information for 2012-13 is used as the opening position for the 2013-14 planned results, and forecasts have been made for the planned results for the 2013-14 fiscal year.
The main assumptions are as follows:
- AANDC's activities will remain substantially the same as 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.
- Accruals for new contingent liabilities and new environmental liabilities cannot be reasonably foreseen or quantified and have therefore been excluded from the forecast.
- Allowances for uncollectibility are based on historical experience. The generalhistorical pattern is expected to continue.
These assumptions are adopted as of December 31, 2012.
3. Variations and Changes to the Forecast Financial Information
While every attempt has been made to accurately forecast final results for the remainder of 2012-13 and for 2013-14, actual results achieved for both years will vary from the forecastinformation presented, and this variation may be material.
In preparing the future-oriented financial statements AANDC 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:
- The timing and amounts of acquisitions and disposals of tangible capital assets, which would affect gains/losses and amortization expense.
- The implementation of new collective agreements, which would affect salaries and employee future benefits.
- Interest rates, which would affect the net present value of settled claims.
- Economic conditions, which would affect the amount of revenue earned and the collectibility of loans receivable.
- Further changes to the operating budget through additional new initiatives or technical adjustments later in the year, which would affect forecasted expenditures.
Once the RPP is presented, AANDC will not be updating the forecast 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
These future-oriented financial statements have been prepared in accordance with 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:
a) Parliamentary authorities
AANDC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to AANDC does 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 Departmental Net Financial Position and in the Future-Oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.
b) Net cash provided by Government
AANDC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by AANDC is deposited to the CRF and all cash disbursements made by AANDC 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.
c) Amounts due from/to the CRF
These amounts are the result of timing differences at yearend 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 AANDC is entitled to draw from the CRF without further authorities to discharge its liabilities.
d) Revenues
Revenues from regulatory fees are recognized in the accounts 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 revenues takes place. Revenues that are nonrespendable are not available to discharge AANDC's liabilities. While the Deputy Minister is expected to maintain accounting control, he has no authority regarding the disposition of nonrespendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and therefore presented in reduction of AANDC's gross revenues.
e) Expenses
Expenses are recorded on the accrual basis:
- Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.
- Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
- Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans, legal services, and workers' compensation are recorded as operating expenses at their estimated cost.
f) Employee future benefits
- Pension benefits - Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. AANDC's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. AANDC'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.
- Severance benefits - Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. 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.
g) Accounts receivable
Accounts receivable are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.
The amount of the allowance is determined based on an assessment of each account. The collectibility of each account is reviewed by regional accounting offices on a semi-annual basis using a standard set of criteria to assess default risk.
h) Loans receivable
Loans receivable are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.
The amount of the allowance is determined based on an assessment of each loan. The collectibility of each loan is reviewed by program managers on an annual basis using a standard set of criteria to assess default risk.
Interest on loans receivable is calculated in accordance with the terms and conditions of each individual program. Interest is not accrued on loans approved for write-off or forgiveness.
i) Contingent liabilities
A contingent liability is a potential liability which may become an actual liability 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. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.
j) Environmental liabilities
Environmental liabilities reflect the estimated costs related to the management and remediation of environmentally contaminated sites. Based on management's best estimates, a liability is accrued and an expense recorded when the contamination occurs or when AANDC becomes aware of the contamination and is obligated, or is likely to be obligated, to incur such costs. If the likelihood of AANDC's obligation to incur these costs is not determinable, or if an amount cannot be reasonably estimated, the costs are disclosed as contingent liabilities in the notes to the financial statements.
k) Tangible capital assets
All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. AANDC does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, or assets located on Indian reserves.
Capital assets which are held for future contribution to First Nations are reported as land held for future claim settlements.
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 |
---|---|
Buildings | 20 to 40 years |
Works and infrastructure | 30 years |
Machinery and equipment | 5 to 15 years |
Informatics hardware and software | 3 to 5 years |
Ships and boats | 10 years |
Motor vehicles | 5 to 10 years |
Other vehicles | 5 years |
Leasehold improvements | Lesser of the remaining term of lease or useful life of the improvement |
Assets under construction | Once in service, in accordance with asset type |
5. Parliamentary Authorities
AANDC receives most of its funding through annual parliamentary authorities. Items recognized in the Future-Oriented Statement of Operations and Departmental Net Financial Position and the Future-Oriented Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, AANDC 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 authorities requested
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Net cost of operations before government funding and transfers | 7,112,477 | 7,852,630 |
Adjustments for items affecting net cost of operations but not affecting authorities: | ||
Amortization of tangible capital assets | (7,448) | (4,689) |
Gain (loss) on disposal of tangible capital assets | 754 | 1,518 |
Transfer of land held for future claim settlements | (39) | (35) |
Services provided without charge by other government departments | (84,959) | (92,160) |
Bad debt expense (not incurred on behalf of government) | (626) | (4,509) |
Decrease (increase) in vacation pay and compensatory leave | 1,098 | (1,657) |
Decrease (increase) in liability for settled claims | 84,512 | 86,448 |
Decrease (increase) in provision for claims and litigation | 528,396 | 459,897 |
Decrease (increase) in environmental liabilities | 171,876 | 23,393 |
Decrease (increase) in employee future benefits | 7,217 | 14,667 |
Decrease (increase) in accrued liabilities not charged to authorities | - | 146 |
Refunds/adjustments to prior years' expenditures | 62,592 | 61,725 |
Other | 2,750 | 2,623 |
Total expenses | 766,123 | 547,367 |
Adjustments for items not affecting net cost of operations but affecting authorities: | ||
Acquisition of tangible capital assets | 21,125 | 17,613 |
Proceeds from disposal of tangible capital assets | (754) | (1,518) |
Acquisitions of land held for future claims settlements | 6,000 | 6,153 |
Total items not affecting net cost of operations but affecting authorities | 26,371 | 22,248 |
Current year authorities requested | 7,904,971 | 8,422,245 |
b) Authorities requested
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Authorities requested | ||
Vote 1 – Operating expenditures | 1,415,529 | 1,425,495 |
Vote 5 – Capital expenditures | 13,683 | 12,916 |
Vote 10 – Grants and Contributions | 6,316,598 | 6,808,112 |
Statutory amounts | 159,161 | 175,722 |
Forecast authorities available | 7,904,971 | 8,422,245 |
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.
Forecast authorities requested for the year ending March 31, 2014 are the planned spending amounts presented in the 2013-14 RPP. Estimated authorities requested for the year ending March 31, 2013 include amounts presented in the 2012-13 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 thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Accounts payable – Other government departments and agencies | 19,816 | 21,340 |
Accounts payable – External parties | 188,186 | 237,936 |
Total accounts payable | 208,002 | 259,276 |
Accrued liabilities | 298,708 | 352,236 |
Total accounts payable and accrued liabilities | 506,710 | 611,512 |
In Canada's Economic Action Plan 2012, the Government announced savings measures to be implemented by departments over the next three fiscal years starting in 2012-2013. As a result, AANDC has recorded at March 31, 2014 an obligation for termination benefits in the amount of $0 ($3,534,000 in 2013) as part of accrued liabilities to reflect the estimated workforce adjustment costs.
7. Other Liabilities
(in thousands of dollars) | Planned Results 2014 | Estimated Results 2013 | ||||
---|---|---|---|---|---|---|
Opening Balance |
Receipts | Interest | Disbursements | Closing Balance |
Closing Balance |
|
Guarantee deposits | 1,267,934 | 228,307 | - | (135,092) | 1,361,149 | 1,267,934 |
Securities held in trust | (1,251,973) | (223,610) | - | 129,313 | (1,346,270) | (1,251,973) |
Net cash | 15,961 | 4,697 | - | (5,779) | 14,879 | 15,961 |
Other specified purpose accounts | 67,484 | 80,443 | 1,293 | (73,267) | 75,953 | 67,484 |
Total other liabilities | 83,445 | 85,140 | 1,293 | (79,046) | 90,832 | 83,445 |
Guarantee deposits and securities held in trust
In fulfilling its duties under various acts that govern the use of federal Crown land, including land use activities, water resources, and water rights, AANDC may issue licences, permits, and other instruments to individuals and organizations that propose to undertake resource exploration and other types of development projects.
In accordance with the terms and conditions of the instrument, AANDC may require security deposits to ensure the lands and waters are returned in a condition acceptable to AANDC. These security or guarantee deposits can be in the form of cash or paper securities (usually letters of credit).
Cash amounts received are transferred to and held in the CRF, whereas paper securities areheld by AANDC.
Other specified purpose accounts
These accounts are established to receive, hold and disburse monies in accordance with relevant statues, departmental policies and agreements. The most significant of these accounts is the Indian Moneys Suspense Account. This statutory account was established to hold moneys received for individual Indians and bands pending execution of the related lease, permit or licence, settlement of litigation, registration of the Indian or identification of the ecipient, and for Indian locatees pursuant to land tenure instruments issued byAANDC. These moneys are eventually disbursed to individual Indians, credited to Band Fund or Individual Trust Fund accounts, or returned to payers, as appropriate.
8. Trust Account
(in thousands of dollars) | Planned Results 2014 | Estimated Results 2013 | ||||
---|---|---|---|---|---|---|
Opening Balance |
Receipts | Interest | Disbursements |
Closing Balance |
Closing Balance |
|
Indian band funds | 887,978 | 244,694 | 25,217 | (233,583) | 924,306 | 887,978 |
Indian savings accounts | 35,527 | 1,916 | 1,039 | (4,178) | 34,304 | 35,527 |
Indian estate accounts | 19,492 | 8,356 | 378 | (9,015) | 19,211 | 19,492 |
Total Indian moneys | 942,997 | 254,966 | 26,634 | (246,776) | 977,821 | 942,997 |
Other trust accounts | 1,883 | - | - | - | 1,883 | 1,883 |
Total trust accounts | 944,880 | 254,966 | 26,634 | (246,776) | 979,704 | 944,880 |
Indian moneys
In accordance with the Indian Act, AANDC has responsibility to administer Indian moneys of bands and certain individual Indians, including minors, mentally incompetent individuals and deceased Indians.
Moneys collected or received for the use and benefit of these groups are deposited to the CRF. Pursuant to Section 61(2) of the Indian Act, interest on Indian moneys held in the CRF is allowed at a rate fixed from time to time by the overnor-in-Council. Interest accumulated in the accounts is compounded semi-annually.
There are three categories of Indian moneys administered by AANDC: Indian band funds, Indian savings accounts, and Indian estate accounts.
Indian band funds
These accounts were established to record moneys belonging to Indian bands throughout Canada pursuant to sections 61 to 69 of the Indian Act.
Moneys are classified as either capital moneys or revenue moneys. Capital moneys of the band include all moneys derived from the sale of surrendered lands or the sale of band capital assets. Moneys from the sale of surrendered lands can include land sales, timber sales, oil and gas royalties, and sales of gravel. Revenue moneys are all moneys not classified as capital moneys.
Moneys are generally disbursed from these accounts pursuant to an authorized request from a band.
Indian savings accounts
These accounts were established to record moneys belonging to certain individual Indians pursuant to sections 52 and 52.1 to 52.5 of the Indian Act.
Sources of moneys include inheritances and per capita distribution of band funds. Moneys are generally disbursed from these accounts pursuant to an authorized request from an individual.
Indian estate accounts
These accounts were established to record moneys belonging to mentally incompetent individuals and deceased Indians pursuant to sections 42 to 51 of the Indian Act.
Sources of moneys belonging to mentally incompetent individuals include inheritances, per capita distribution of band funds, and provincial assistance payments. Payments are made from these accounts for the maintenance and care of the individuals.
Estate accounts for deceased Indians include the proceeds of their liquidated assets that are held pending the settlement of the estate. The closing of the account usually corresponds with the final distribution to their heirs.
Other trust accounts
Relative to AANDC's legislative mandate, trust accounts may also be established in accordance with settlement agreements, legislative authorities other than the Indian Act, or court decisions.
9. Settled Claims
The liability for settled claims represents AANDC's financial obligation pursuant to agreements related to comprehensive land claims and specific claims.
Comprehensive land claims are negotiated in areas where Aboriginal title has not been dealt with by treaty or by other legal methods. In such cases, the claim is based on an Aboriginal group's traditional use and occupancy of that land. Comprehensive land claim settlements result in agreements on special rights Aboriginal peoples will have in the future with respect to lands and resources.
Specific claims address past grievances arising out of non-fulfilment of Indian treaties and other lawful obligations, the improper administration of lands and other assets under the Indian Act, or formal agreements that are being pursued through negotiations.
An act of Parliament, based on a negotiated agreement, establishes the authority for AANDC tomake claim payments. The interest rate attached to these claim payments is set out in the act, along with a claim payment schedule. Claim payments are generally made over a number of years.
At March 31, 2014, AANDC had 11 outstanding settled claims (12 in 2013). Payments totalled $85,600,000 in 2014 ($96,300,000 in 2013).
The present value of the liability for outstanding settled claims, calculated using the appropriate Consolidated Revenue Fund Monthly Lending Rate as published by the Department of Finance, at March 31, 2014 is $348,666,000 ($433,178,000 in 2013)
(in thousands of dollars) 2015 2016 2017 2018 2019 and thereafter Total Scheduled payments 86,900 56,900 56,500 57,900 114,800 373,000
Future scheduled claim payments are as follows:
(in thousand of dollars) | 2015 | 2016 | 2017 | 2018 | 2019 and thereafter |
Total |
---|---|---|---|---|---|---|
Scheduled payments | 86,900 | 59,900 | 56,500 | 57,900 | 114,800 | 373,000 |
10. Contingent Liabilities
Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown. They are classified into three categories: claims and litigation, environmental liabilities (contaminated sites) and loan guarantees.
Claims and litigation
Claims and pending and threatened litigation cases outstanding against AANDC are potential liabilities that 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, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the financial statements.
There are four significant types of claims faced by AANDC: comprehensive land claims, specific claims, general litigation claims, and claims arising from the legacy of Indian residential schoolsFootnote 1.
Comprehensive land claims arise in areas of the country where Aboriginal rights and title have not been resolved by treaty or by other legal means. As at the date of preparation of these future-oriented financial statements, there are 81 comprehensive land claims under negotiation, accepted for negotiation or under review.
Specific claims deal with the past grievances of First Nations related to Canada's obligations under historic treaties or the way it managed First Nations' funds or other assets. The Government of Canada will pursue a settlement agreement with the First Nation when a claim demonstrates an outstanding lawful obligation. As at the date of preparation of these futureoriented financial statements, there are 389 specific claims under negotiation, accepted for negotiation or under review.
There are legal proceedings for 533 general litigation claims being pursued through the courts still pending as at the date of preparation of these future-oriented financial statements. There are also thousands of claims being managed by AANDC with respect to the legacy of Indian residential schools, including class action claims, as well as claims submitted under its Alternative Dispute Resolution process and its Independent Assessment Process.
AANDC has recorded a provision of $9,976,333,000 ($10,504,729,000 in 2013) as an estimate of the likely liability that will result from the above claims. This estimate includes projections based on historical rates and costs of settlement for similar claims. An additional amount of $5,099,186,000 ($5,099,186,000 in 2013) is considered uncertain as the probability of the occurrence or non-occurrence of the future event confirming that a liability existed at the financial statement date cannot be determined.
Environmental liabilities (Contaminated Sites)
Liabilities are accrued to record the estimated costs related to the management and remediation of contaminated sites where AANDC is obligated or likely to be obligated to incur such costsFootnote 2.
AANDC has identified 785 sites (791 sites in 2013) where such action is possible and for which a liability of $2,175,700,000 ($2,347,576,000 in 2013) has been recorded. AANDC has estimated additional clean-up costs of $6,024,000 ($6,024,000 in 2013) that have not been accrued, as these are not considered likely to be incurred at this time.
AANDC's ongoing efforts to assess contaminated sites may result in additional environmental liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. These liabilities will be accrued by AANDC in the year in which they become likely and are reasonably estimable.
Loan guarantees
As at March 31, 2014, AANDC has issued loan guarantees under its On-Reserve Housing Guarantee program of $1,934,624,000 ($1,934,624,000 in 2013) and under its Indian Economic Development Guarantee program of $494,000 ($494,000 in 2013). AANDC's authority limit for issuing loan guarantees under these programs is $2.2 billion ($2.2 billion in 2013) and $60 million ($60 million in 2013) respectively.
A provision for losses on loan guarantees is recorded when it is likely that a payment will be made in the future to honour a guarantee and when the amount of the loss can be reasonably estimated. The provision is determined by applying the weighted average historical percentage of default to total outstanding loan guarantees. The provision is reviewed at least annually, with any changes being charged or credited to current year expenses.
The following table presents details of AANDC's accounts payable and accrued liabilities:
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
On-Reserve Housing Guarantee programs | 1,500 | 1,500 |
Indian Economic Development Guarantee program | 55 | 55 |
Total provision for losses | 1,555 | 1,555 |
11. Employee Future Benefits
a) Pension benefits
AANDC'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 are indexed to inflation.
Both the employees and AANDC contribute to the cost of the Plan. For the year ended March 31, 2014, the expense amounts to $46,248,000 ($50,167,000 in 2013), which represents approximately 1.8 times (1.8 in 2013) the contributions by employees.
AANDC'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
AANDC provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities.
As part of collective agreement negotiations with certain employee groups and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.
Information about the severance benefits, measured as at March 31, is as follows:
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Accrued benefit obligation- Beginning of year | 29,334 | 44,001 |
Expense for the year | 31,351 | (404) |
Benefits paid during the year | (38,568) | (14,263) |
Accrued benefit obligation- End of year | 22,117 | 29,334 |
12. Accounts Receivable and Advances
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Receivables – Other government departments and agencies | 11,574 | 12,726 |
Receivables – External parties | 59,997 | 62,732 |
Employee advances | 346 | 315 |
Total | 71,917 | 75,773 |
Allowance for doubtful accounts on receivables from external parties | (19,872) | (19,246) |
Total accounts receivable and advances | 52,045 | 56,527 |
13. Interest Receivable
The following table presents details of accrued interest receivable on loans:
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Direct loans | 1,224 | 1,302 |
Defaulted guaranteed loans | 611 | 557 |
Total | 1,835 | 1,859 |
Less: Allowance for doubtful accounts |
(602) | (569) |
Total interest receivable (held on behalf of Government) | 1,233 | 1,290 |
14. Loans Receivable
The following table presents details of loans receivable
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Direct loans portfolio: | ||
Native claimants | 463,987 | 456,103 |
First Nations in British Columbia | 495,463 | 467,859 |
Other direct loans | 504 | 504 |
Total for Direct loans portfolio | 959,954 | 924,466 |
Add: Capitalized interest | 1,021 | 1,086 |
Less: Allowance for doubtful loans | (129,766) | (124,058) |
Net recoverable value | 831,209 | 801,494 |
Defaulted guaranteed loans portfolio: | ||
On-reserve housing guarantees | 13,387 | 12,308 |
Indian economic development guarantees | 3,225 | 3,225 |
Other defaulted guaranteed loanss | 104 | 104 |
Total Defaulted guaranteed loans portfolio: | 16,716 | 15,637 |
Add: Capitalized interest | 20,540 | 18,636 |
Less: Allowance for doubtful loans | (25,880) | (23,993) |
Net recoverable value | 11,376 | 10,280 |
Loans receivable, net recoverable value (held on behalf of Government) |
842,585 | 811,774 |
Direct loans portfolio
The objective of direct loans is to support active participation by First Nations and First Nation organizations and to promote a balanced exchange of ideas in negotiating the settlement of comprehensive land claims, specific claims, and treaties.
AANDC's direct loans portfolio has two active programs in support of this objective.
Native claimants
These are loans made to Native claimants to defray the costs related to the research, development and negotiation of comprehensive land claims and specific claims.
The significant terms and conditions of loans to Native claimants are as follows:
- before an agreement-in-principle for the settlement of a claim is reached, all loans issued are non-interest bearing;
- once an agreement-in-principle for the settlement of a claim is reached, all loans that remain outstanding and all loans subsequently issued are interest bearing at a rate equal to the rate established by the Minister of Finance in respect of borrowings with equivalent terms by Crown corporations;
- loans are due and payable, as to principal and interest, on the date on which the claim is settled, or on a date fixed in the loan agreement;
- loans may be restructured, including forgiveness of a portion of the principal or interest in arrears, when the borrower cannot meet the terms of the original loan agreement; and
- AANDC may seek security for loans when deemed appropriate. When an agreement-in-principle is reached for the settlement of a claim, any accrued interestreceivable is capitalized semi-annually as part of the principal amount owing on the loan. Aftera final agreement is reached, any accrued interest receivable outstanding is capitalized annually as part of the principal amount owing on the loan.
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Interest bearing | 82,988 | 81,488 |
Non-interest bearing | 380,999 | 374,615 |
Total | 463,987 | 456,103 |
First Nations in British Columbia
These are loans made to First Nations in British Columbia to support their participation in the British Columbia Treaty Commission and to defray the costs related to the research, development and negotiation of treaties.
The significant terms and conditions of direct loans to First Nations in British Columbia are the same as those for loans to Native claimants, except as follows:
a) loans issued after April 1, 2004 and after the date on which an agreement-in-principle for the settlement of a treaty is reached shall be non-interest bearing unless the loans become due and payable during this period.
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Interest bearing | 23,861 | 22,532 |
Non-interest bearing | 471,602 | 445,327 |
Total | 495,463 | 467,859 |
Other direct loans
AANDC also has various legacy programs that are no longer active. These legacy programs will continue to operate under their existing arrangements until the land claims are settled, at which point the loans will become repayable and the respective programs closed.
All loans outstanding at year-end under the various legacy programs both for the current and prior years are interest bearing.
Defaulted guaranteed loans portfolio
The objective of loan guarantees is to encourage lending institutions to make loans for properties located on First Nations lands and to support access to credit markets for First Nations and First Nations organizations. Since properties located on First Nation lands cannot be used as collateral to secure the loans and lending institutions are prevented from foreclosing on these properties in the event of borrower default as prescribed by the Indian Act, lending institutions can be exposed to greater business risk in issuing loans for properties located on First Nation lands.
As guarantor, loan guarantees issued under the various programs may become receivables of AANDC when, at the request of a lending institution, AANDC is required to honour these loan guarantees. As a result, AANDC makes payment to the lending institution and establishes a receivable from the First Nation or First Nation organization.
AANDC has access to an annual $2 million statutory authority for funding payments to lending institutions to honour loan guarantees. Payments made in excess of the $2 million authority limit are charged to program expenses and funded by budgetary authorities.
The various loan guarantee programs are described below.
On-reserve housing guarantee program
This program authorizes AANDC to guarantee loans to individuals and Indian bands to assist in the purchase of housing on reserves because security restrictions in the Indian Act prevent the mortgage and seizure of property located on reserves. These loan guarantees enable status Indians residing on reserves, Band councils, or their delegated authorities, to secure housing loans without giving the lending institution rights to the property.
The significant terms and conditions of the On-reserve housing guarantee program are as follows:
Payments of principal and interest for loans issued under this program are amortized over a period of 25 years. The interest rates on the guaranteed loans are consistent with conventional mortgage interest rates offered by the major banks. On a semi-annual basis, any accrued interest receivable outstanding is capitalized as part of the principal amount owing on the loan.
To control the occurrence of defaulted loans in this program, AANDC restricts the eligibility of recipients for further loans until such time as a recovery plan has been approved and has been in operation in accordance with its terms and conditions for a period of six months.
¨Indian economic development guarantee program
This program authorizes AANDC to guarantee loans for non-incorporated Indian businesses on a risk-sharing basis with commercial lenders because security restrictions in the Indian Act prevent the mortgage and seizure of property located on reserves. Guarantees are provided for various types of borrowers whose activities contribute to the economic development of Indians and enable them to develop long-term credit relationships with mainstream financial institutions.
The significant terms and conditions of the Indian economic development guarantee program are as follows:
Loans issued under this program cannot exceed a term of 15 years and the line of credit must be renewed every year. Interest rates on guaranteed loans are consistent with rates provided by lending institutions to commercial businesses, which are usually based on a spread from the prime lending rate. Accrued interest on loans issued under this program is not capitalized. Any security pledged for a guaranteed loan may not be released by the lending institution without the prior approval of the Minister of AANDC.
Other defaulted guaranteed loans
AANDC also has a legacy program that is no longer active. This legacy program will continue to operate under its existing arrangements until the defaulted guaranteed loans are paid and the program closed.
15. Land Held for Future Claim Settlements
Land held for future claim settlements is segregated from other tangible capital assets as these assets are not acquired with the intention of being used on a continuous basis in government operations. Rather, these assets are properties acquired and held by AANDC for the purpose of future settlements of Aboriginal land claims. Following the ratification of a negotiated agreement, these assets are transferred to the Aboriginal group.
Changes in this account are summarized in the following table:
(in thousands of dollars) | Plan Results 2014 | Estimated Results 2013 | |||
---|---|---|---|---|---|
Opening Balance |
Acquisitions | Transfers | Closing Balance | Closing Balance | |
Land held for future claim settlements | 32,388 | 6,000 | (39) | 38,349 | 32,388 |
16. Tangible Capital Assets
(in thousands of dollars)
Capital Asset Class | Cost | Accumulated Amortization | Net Book Value | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Opening Balance |
Acquisitions | Adjustments (1) |
Disposals and Write-offs |
Closing Balance |
Opening Balance |
Amortization | Adjustments | Disposals and Write-offs | Closing balance | Planned Results 2014 | Estimated Results 2013 | |
Land | 606 | 606 | 606 | 606 | ||||||||
Buildings | 28,600 | 28,600 | 15,412 | 716 | 16,128 | 12,472 | 13,188 | |||||
Works and infrastructure |
1,444 | 1,444 | 1,409 | 1,409 | 35 | 35 | ||||||
Machinery and equipment |
8,362 | 597 | 621 | 8,338 | 5,540 | 451 | 621 | 5,370 | 2,968 | 2,822 | ||
Informatics hardware |
15,568 | 283 | 3,106 | 12,745 | 13,389 | 112 | 3,106 | 10,395 | 2,350 | 2,179 | ||
Informatics software |
51,254 | 1,010 | 15,530 | 67,794 | 19,413 | 5,256 | 24,669 | 43,125 | 31,841 | |||
Ships and boats |
87 | 3 | 33 | 57 | 36 | 6 | 33 | 9 | 48 | 51 | ||
Motor vehicles | 4,263 | 383 | 507 | 4,139 | 3,383 | 315 | 507 | 3,191 | 948 | 880 | ||
Other vehicles | 593 | 49 | 642 | 437 | 35 | 472 | 170 | 156 | ||||
Leasehold improvements |
3,670 | 554 | 4,224 | 1,299 | 557 | 1,856 | 2,368 | 2,371 | ||||
Assets under construction |
10,998 | 18,246 | (15,530) | 13,714 | 13,714 | 10,998 | ||||||
Total | 125,445 | 21,125 | 4,267 | 142,303 | 60,318 | 7,448 | 4,267 | 63,499 | 78,804 | 65,127 |
(1) Adjustments include assets under construction of $15,530,000 that were transferred to the other categories upon completion of the assets.
17. Departmental Net Financial Position
A portion of AANDC's net financial position is restricted to be used for a specific purpose. Related revenues and expenses are included in the Future-Oriented Statement of Operations and Departmental Net Financial Position.
The Environmental Studies Research Fund account was established pursuant to the Canada Petroleum Resources Act and related regulations to record levies stipulated under the Act. The balance of the account is to be used to finance environmental and social studies pertaining to the manner in which, and the terms and conditions under which, exploration, development and production activities on frontier lands authorized under this Act or any other Act of Parliament should be conducted.
The Bowater Environmental Remediation Fund was established pursuant to a decision of the Commercial Division of the Superior Court in the Province of Quebec. The balance in the account is to be used to finance the remediation of environmental damage caused by Bowater Canadian Forest Products Inc. relative to a land lease issued by AANDC.
The balance of the funds at the end of the year is included in Departmental Net Financial Position. Activity in the funds is as follows:
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Environmental Studies Research Fund – Restricted | ||
Balance – Beginning of year – Restricted | 1,951 | 2,02 |
Revenues | 1,940 | 1,951 |
Expenses | (2,087) | (2,026) |
Balance – End of year – Restricted | 1,804 | 1,951 |
Bowater Environmental Remediation Fund – Restricted | ||
Balance – Beginning of year – Restricted | 2,345 | 2,597 |
Revenues | ||
Expenses | (252) | (252) |
Balance – End of year – Restricted | 2,093 | 2,345 |
Total restricted | 3,897 | 4,296 |
Unrestricted | (12,388,979) | (13,202,291) |
Departmental net financial position – End of year | (12,385,082) | (13,197,995) |
18. Contractual Obligations
The nature of AANDC's activities can result in some large multi-year contracts and obligations whereby AANDC will be obligated to make future payments in order to carry out its transfer payment programs or when the goods or services are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:
(in thousand of dollars) | 2015 | 2016 | 2017 | 2018 and thereafter |
Total |
---|---|---|---|---|---|
Transfer payments | 950,166 | 739,500 | 164,552 | 150,565 | 2,004,783 |
Total | 950,166 | 739,500 | 164,552 | 150,565 | 2,004,783 |
19. Related Party Transactions
AANDC is related as a result of common ownership to all Government departments, agencies, and Crown corporations. AANDC enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, AANDC has an agreement for the provision of finance and administrative services to the Canadian Northern Economic Development Agency. During the year, AANDC received common services which were obtained without charge from other Government departments as disclosed below.
a) Common services provided without charge by other government departments
During the year, AANDC received services without charge from certain common service organizations related to accommodation, the employer's contribution to the health and dental insurance plans, legal services and workers' compensation coverage. These services provided without charge have been recorded in AANDC's Statement of Operations and Departmental Net Financial Position as follows:
in thousands of dollars | Planned Results 2014 | Estimated Results 2013 |
---|---|---|
Employer's contribution to the health and dental insurance plans | 34,270 | 36,805 |
Accommodation | 41,541 | 43,645 |
Legal services | 8,720 | 11,260 |
Workers' compensation | 428 | 450 |
Total | 84,959 | 92,160 |
The Government has centralized some of its administrative activities for purposes of efficiency, cost-effectiveness and economical 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 AANDC's Statement of Operations and Departmental Net Financial Position.
b) Other transactions with related parties
(in thousand of dolars) | Planned Results 2014 |
Estimated Results 2013 |
---|---|---|
Expenses – Other Government departments and agencies | 280,015 | 278,257 |
Revenues – Other Government departments and agencies | 2,420 | 2,384 |
Expenses and revenues disclosed in (b) exclude common services provided without charge which are already disclosed in (a).
20. Segmented Information
Presentation by segment is based on AANDC'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 expenses incurred and revenues generated for each of AANDC's strategic outcomes, by major object of expenses and by major type of revenues. The segment results for the period are as follows:
(in thousands of dollars) | People | Land and Economy | Government | Internal Services | North | Planned Results 2014 | Estimated Results 2013 |
---|---|---|---|---|---|---|---|
Transfer payments | |||||||
First Nations | 2,858,922 | 1,359,864 | 1,235,713 | 16,326 | 5,470,825 | 5,912,914 | |
Provincial/territorial governments and institutions | 449,639 | 62,222 | 120,549 | 89,441 | 721,851 | 778,324 | |
Industry | 11,457 | 15,487 | 59 | 54,841 | 81,844 | 82,664 | |
Non-profit organizations | 25,866 | 7,098 | 1,173 | 6,165 | 40,302 | 41,145 | |
Other | 120 | 3,923 | 4,043 | 4,186 | |||
Claims and litigation (note 10) | |||||||
Contaminated sites (note 10) | (18,423) | (18,423) | (8,706) | ||||
Refunds/adjustments to prior years' expenditures | (19,225) | (23,572) | (7,125) | (2,534) | (52,456) | (51,359) | |
Total transfer payments | 3,326,779 | 1,402,676 | 1,350,369 | 168,162 | 6,247,986 | 6,811,736 | |
Operating expenses | |||||||
Court awards and other settlements | 531,736 | 11,297 | 5 | 543,038 | 561,406 | ||
Salaries and employee future benefits | 106,272 | 90,119 | 101,639 | 157,464 | 44,446 | 499,940 | 533,254 |
Professional and special services | 61,532 | 25,381 | 11,803 | 31,481 | 159,027 | 289,224 | 243,181 |
Legal services | 37,633 | 23 | 606 | 36,504 | 396 | 75,162 | 89,075 |
Accommodations | 10,348 | 7,088 | 7,535 | 12,820 | 3,750 | 41,541 | 43,645 |
Travel and relocation | 8,515 | 4,784 | 5,221 | 6,726 | 5,946 | 31,192 | 31,192 |
Other | 370 | 2,588 | 3,280 | 812 | 12,579 | 19,629 | 17,209 |
Information services | 12,726 | 311 | 333 | 1,884 | 848 | 16,102 | 16,963 |
Rentals of buildings and machinery | 1,702 | 437 | 194 | 2,533 | 4,965 | 9,831 | 8,612 |
Machinery and equipment | 1,610 | 724 | 312 | 4,308 | 1,593 | 8,547 | 9,601 |
Bad debt | 1,916 | 5,711 | 626 | 8,253 | 12,136 | ||
Amortization | 98 | 15 | 21 | 6,862 | 452 | 7,448 | 4,689 |
Utilities, materials and supplies | 1,590 | 1,617 | 321 | 1,401 | 2,211 | 7,140 | 7,348 |
Transportation and telecommunications | 1,136 | 364 | 178 | 2,359 | 1,160 | 5,197 | 5,642 |
Repairs and maintenance | 241 | 456 | 120 | 1,015 | 777 | 2,609 | 2,796 |
Expenses incurred on behalf of Government | (1,916) | (5,711) | (7,627) | (7,627) | |||
Refunds/adjustments to prior years' expenditures | (3,755) | (603) | (111) | (2,844) | (2,823) | (10,136) | (10,366) |
Contaminated sites (note 10) | (153,453) | (153,453) | (14,687) | ||||
Claims and litigation (note 10) | (528,396) | (528,396) | (512,465) | ||||
Total operating expenses | 243,358 | 133,304 | 131,452 | 275,248 | 81,879 | 865,241 | 1,041,604 |
Total expenses | 3,570,137 | 1,535,980 | 1,481,821 | 275,248 | 250,041 | 7,113,227 | 7,853,340 |
Revenues | |||||||
Resource royalties | 64,733 | 64,733 | 65,388 | ||||
Norman Wells project profits | 91,183 | 91,183 | 94,334 | ||||
Interest on loans | 2,426 | 4,517 | 6,943 | 6,943 | |||
Miscellaneous | 260 | 22 | 240 | 1,916 | 2,438 | 2,437 | |
Leases and rentals | 1 | 19 | 1,853 | 1,873 | 1,873 | ||
Finance and administrative services | 750 | 750 | 710 | ||||
Revenues earned on behalf of Government | (2,687) | (4,558) | (240) | (159,685) | (167,170) | (170,975) | |
Total revenues | 750 | 750 | 710 | ||||
Net cost from continuing operations | 3,570,137 | 1,535,980 | 1,481,821 | 274,498 | 250,041 | 7,112,477 | 7,852,630 |
The major categories of revenues are described below.
Resource royalties
The most significant sources of resource royalty revenues are those earned pursuant to the Northwest Territories and Nunavut Mining Regulations (formerly the Canada Mining Regulations) and the Frontier Lands Petroleum Royalty Regulations.
The Northwest Territories and Nunavut Mining Regulations
(the Mining Regulations) prescribe a profit-sharing formula upon which royalty
revenues are based. AANDC receives a percentage of the profits companies earn from the sale of minerals extracted from land leased by these companies pursuant to the Mining Regulations. The Mining Regulations prescribe that royalties are generally payable four months after the fiscal year-end of the company.
The Frontier Lands Petroleum Royalty Regulations
(the Royalty Regulations) also prescribe a profit-sharing formula upon which royalty revenues are based. AANDC receives a percentage of the profits companies earn from the sale of oil and gas extracted from the land, which the company
has the right to use pursuant to a production licence issued under the authority of the Canada Petroleum Resources Act. The Royalty
Regulations prescribe that royalties are generally payable on the last day of the month following the month of production.
Norman Wells project profits
This project is a source of revenues earned pursuant to a contract between AANDC and Imperial Oil. This contract prescribes a profit-sharing formula and sets out a payment schedule, whereby payments are made annually to AANDC no later than March 20.
Leases and rentals
The major source of lease and rental revenues is lease fees prescribed in the Mining Regulations. After a waiting period of 10 years, companies may lease land in the North for purposes of exploration and extraction of minerals. Leases are for a period of 21 years and are renewable. Lease fees are set out in the Mining Regulations and are payable annually on the anniversary date of the signing of the lease.
21. Comparative Information
Comparative figures have been reclassified to conform to the current year's presentation.