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Statement of Management Responsibility Including Internal Control Over Financial Reporting

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended

March 31, 2020 and all information contained in these financial statements rests with the management of the Canadian Intergovernmental Conference Secretariat (CICS). These financial statements have been prepared by management using the Government of Canada’s accounting policies, which are based on Canadian public sector accounting standards.

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

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

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the CICS and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

The CICS is subject to periodic Core Control Audits performed by the Office of the Comptroller General of Canada (OCG) and uses the results of such audits to comply with the Treasury Board Policy on Financial Management.

A Core Control Audit was performed in 2011-12 by the Office of the Comptroller General of Canada (OCG). The Audit Report and related Management Action Plan are posted on the departmental web site at https://scics.ca/en/publication/core-control-audit-of-the-canadian-intergovernmental-conference-secretariat/ .

The financial statements of the CICS have not been audited.

André M. McArdle

Secretary

Ottawa, Canada

October 8, 2020

Brian J. Berry FCPA, FCMA,

Assistant Secretary and Chief Financial Officer

Ottawa, Canada

October 8, 2020

Statement of Financial Position (Unaudited)

As at March 31

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

(in dollars)

2020

2019

Liabilities

Accounts payable and accrued liabilities (note 4)

$ 402,505

$ 632,507

Vacation pay and compensatory leave

114,319

89,991

Employee future benefits (note 5)

85,059

88,118

Total liabilities

601,883

810,616

Financial assets

Due from the Consolidated Revenue Fund

267,761

537,296

Accounts receivable and advances (note 6)

695,906

157,479

Total financial assets

963,667

694,775

Departmental net debt

(361,784)

115,841

Non-financial assets

Prepaid expenses

5,665

15,271

Tangible capital assets (note 7)

45,001

184,353

Total non-financial assets

50,666

199,624

Departmental net financial position

$ 412,450

$ 83,783

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

André M. McArdle

Secretary

Ottawa, Canada

October 8, 2020

Brian J. Berry FCPA, FCMA,

Assistant Secretary and Chief Financial Officer

Ottawa, Canada

October 8, 2020

Statement of Operations and Departmental Net Financial Position (Unaudited)

For the year ended March 31

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

Planned Results

(in dollars)

2020

2020

2019

Expenses

Intergovernmental Conference Services

$ 4,827,678

$ 4,623,391

$ 4,375,638

Internal Services

1,588,592

1,496,031

1,401,645

Total expenses

6,416,270

6,119,422

5,777,283

Revenues

Shared cost agreement – Transfers received from the provincial governments

1,100,000

1,003,170

1,024,400

Revenues earned on behalf of Government

(1,100,000)

(1,003,170)

(1,024,400)

Total revenues

Net cost of operations before government funding and transfers

$ 6,416,270

6,119,422

5,777,283

Government funding and transfers

Net cash provided by Government of Canada

6,153,389

5,194,441

Change in due from Consolidated Revenue Fund

(269,535)

(21,200)

Services provided without charge by other government departments (note 9)

564,235

535,596

Net cost (revenue) of operations after government funding and transfers

(328,667)

68,446

Departmental net financial position – Beginning of year

83,783

152,229

Departmental net financial position – End of year

$ 412,450

$ 83,783

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

Statement of Change in Departmental Net Debt (Unaudited)

For the year ended March 31

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

(in dollars)

2020

2019

Net cost (revenue) of operations after government funding and transfers

$ (328,667)

$ 68,446

Change due to tangible capital assets

Acquisition of tangible capital assets

Amortization of tangible capital assets

(134,592)

(43,185)

Loss on disposal of tangible capital assets

(4,760)

Total change due to tangible capital assets

(139,352)

(43,185)

Change due to prepaid expenses

(9,606)

15,271

Net (decrease) increase in net debt

(477,625)

40,532

Departmental net debt – Beginning of year

115,841

75,309

Departmental net debt – End of year

$ (361,784)

$ 115,841

Segmented information (note 10)

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

Statement of Cash Flow (Unaudited)

For the year ended March 31

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

(in dollars)

2020

2019

Operating activities

Net cost of operations before government funding and transfers

$ 6,119,422

$ 5,777,283

Non-cash items:

Amortization of tangible capital assets

(134,592)

(43,185)

Services provided without charge by other government departments

(564,235)

(535,596)

Loss on disposal of tangible capital assets

(4,760)

Variations in Statement of Financial Position:

Increase (decrease) in accounts receivable and advances

538,427

(55,062)

(Decrease) increase in prepaid expenses

(9,606)

15,271

Decrease in accounts payable and accrued liabilities

230,002

33,987

(Increase) decrease in vacation pay and compensatory leave

(24,328)

1,870

Decrease (increase) in employee future benefits

3,059

(127)

Cash used in operating activities

6,153,389

5,194,441

Capital investing activities

Acquisition of tangible capital assets

Cash used in capital activities

Net cash provided by Government of Canada

$ 6,153,389

$ 5,194,441

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

Notes to the Financial Statements (Unaudited)

For the year ended March 31

CANADIAN INTERGOVERNMENTAL CONFERENCE SECRETARIAT

1.Authority and objectives

The Canadian Intergovernmental Conference Secretariat (the CICS) was designated a department within the Government of Canada in November 1973, by an Order-in-Council. The CICS is an agency of the Federal, Provincial and Territorial governments. The CICS is named in Section II of the Financial Administration Act and reports to Parliament through the President of the Queen’s Privy Council for Canada.

Intergovernmental Conference Services

Provides continuity of planning and archival services and impartial administrative support for federal-provincial-territorial and provincial- territorial conferences of First Ministers, Ministers and Deputy Ministers, throughout Canada.

Internal Services

Internal Services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; and Acquisition Services

In order to effectively pursue its mandate, the CICS aims to achieve its strategic outcome that senior-level intergovernmental conference services are professionally and successfully delivered.

2.Summary of significant accounting policies

These financial statements are prepared using the CICS’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

The CICS is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the CICS do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the “Expenses” and “Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2019-20 Departmental Plan . Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2019-20 Departmental Plan.

b)Net Cash Provided by Government of Canada

The CICS operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the CICS is deposited to the CRF, and all cash disbursements made by the CICS are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Federal Government of Canada.

c)Amount due from the CRF

Amounts due from 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 CICS is entitled to draw from the CRF without further authorities to discharge its liabilities.

d)Revenues

Other revenues are recognized in the period the event giving rise to the revenue occurs.

Revenues that are non-respendable are not available to discharge the CICS’s liabilities. While the Secretary is expected to maintain accounting control, he has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the CICS’s gross revenues.

e)Expenses

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 and employer’s contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

f)Employee future benefits

Pension benefits: Eligible employees participate in the Public Service Pension Plan (Plan), a multiemployer pension plan administered by the Government. The CICS’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The CICS’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: The accumulation of severance benefits for voluntary departures ceased for applicable employee groups.

The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

g)Accounts receivable

Accounts receivable are initially recorded at cost. When necessary, an allowance for valuation is recorded to reduce the carrying value of accounts receivable to amounts that approximate their net recoverable value.

h)Tangible capital assets

The costs of acquiring land, buildings, equipment and other capital property are capitalized as tangible capital assets and, except for land, are amortized to expense over the estimated useful lives of the assets, as described in Note 7. All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined in the Indian Act, works of art, museum collection and Crown land to which no acquisition cost is attributable; and intangible assets.

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

Asset Class

Amortization period

Informatics hardware

3 years

Informatics software

3 years

Other equipment (including furniture)

5 years

i)Related Party Transactions

Related party transactions, other than inter-entity transactions, are recorded at the exchange amount.

Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:

i.Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.

ii.Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.

g)Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the Government’s best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are the liability for employee future benefits, vacation and compensatory leave and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3.Parliamentary authorities

The CICS receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the CICS 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 current year authorities used

(in dollars)

2020

2019

Net cost of operations before government funding and transfers

$ 6,119,422

$ 5,777,283

Adjustments for items affecting net cost of operations but not affecting authorities:

Services provided without charge by other government departments

(564,235)

(535,596)

Amortization of tangible capital assets

(134,592)

(43,185)

Loss on disposal of tangible capital assets

(4,760)

(Increase) decrease in vacation pay and compensatory leave

(24,328)

1,870

Decrease (increase) in employee future benefits

3,059

(127)

Refund of prior years’ expenditures

1,064

19,012

Refund of program expenditures

1,151

(3,543)

Other

(15,954)

Adjustments to prior year’s accounts payable and accounts receivable

38,383

29,716

(700,212)

(531,853)

Adjustments for items not affecting net cost of operations but affecting authorities:

Increase in prepaid expenses

5,665

15,271

Increase in employee advances and overpayments

734

9,873

6,399

25,144

Current year authorities used

$ 5,425,609

5,270,574

b) Authorities provided and used

(in dollars)

2020

2019

Authorities provided:

Vote 1 – Operating expenditures

$ 5,914,090

$ 5,888,971

Proceeds from the disposal of surplus Crown assets

470

Statutory amounts

341,812

294,915

Less:

Authorities available for future years

(470)

Lapsed: Operating

(830,293)

(913,312)

Current year authorities used

$ 5,425,609

$ 5,270,574

4.Accounts payable and accrued liabilities

The following table presents details of the CICS’s accounts payable and accrued liabilities :

(in dollars)

2020

2019

Accounts payable – Other government departments and agencies

$ 68,957

$ 66,262

Accounts payable – External parties

107,519

260,089

Total accounts payable

176,476

326,351

Accrued liabilities

5,656

9,366

Accrued salaries

220,373

296,790

Total accounts payable and accrued liabilities

$ 402,505

$ 632,507

5.Employee future benefits

a)Pension benefits

The CICS’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 Plans benefits and they are indexed to inflation.

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

Each group has a distinct contribution rate.

The 2019-20 expense amounts to $236,808 ($205,673 in 2018-19). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2018-19) the employee contributions and, for Group 2 members, approximately 1 time (1 time in 2018-19) the employee contributions.

The CICS’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the Consolidated Financial Statements of the Government of Canada, as the Plan’s sponsor.

b)Severance benefits

Severance benefits provided to the CICS’s employees were previously based on an employee’s eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By March 31, 2020, substantially all settlements for immediate cash out were completed and the remaining obligation will be disbursed upon departure from the public service. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows:

(in dollars)

2020

2019

Accrued benefit obligation, beginning of year

$ 88,118

$ 87,991

Expense for the year

(3,059)

127

Accrued benefit obligation, end of year

$ 85,059

$ 88,118

6.Accounts receivable and advances

The following table presents details of the CICS’s accounts receivable and advances balances:

(in dollars)

2020

2019

Accounts receivable – Other government departments and agencies

$ 318,676

$ 137,306

Accounts receivable – External parties

376,630

19,573

Employee advances – Petty cash

600

600

Net accounts receivable

$ 695,906

$ 157,479

7.Tangible capital assets

Cost

Asset class

Opening Balance

Acquisitions

Disposals

And

Write-Offs

Closing Balance

(in dollars)

Informatics hardware

$ 815,321

(18,073)

$ 797,248

Informatics software

20,000

20,000

$ 835,321

$ (18,073)

$ 817,248

Accumulated amortization

Asset class

Opening Balance

Acquisitions

Disposals

And

Write-Offs

Closing Balance

(in dollars)

Informatics hardware

$ 637,635

$ 127,925

(13,313)

$ 752,247

Informatics software

13,333

6,667

20,000

$ 650,968

$ 134,592

$ (13,313)

$ 772,247

Net book value

Asset class

2020

2019

(in dollars)

Informatics hardware

$ 45,001

$ 177,686

Informatics software

6,667

$ 45,001

$ 184,353

8.Contractual obligations

The nature of CICS’s activities can result in some large multi-year contracts and obligations whereby the CICS will be obligated to make future payments when the goods or services are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in dollars)

Related Parties

Acquisitions of

goods and services

Operating leases

Total

2021

160,249

81,410

241,659

2022

5,801

5,801

2023

4,986

4,986

2024

2025 and thereafter

9.Related party transactions

The CICS is related as a result of common ownership to all Government departments, agencies, and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual. The CICS has defined its key management personnel as the Secretary and Assistant Secretary.

The CICS enters into transactions with these entities in the normal course of business and on normal trade terms.

a) Common services provided without charge by other government departments

During the year, the CICS received services without charge from certain common service organizations. These services provided without charge have been recorded in the CICS Statement of Operations and Departmental Net Financial Position as follows:

(in dollars)

2020

2019

Accommodation

$ 343,222

$ 343,222

Employer’s contribution to the health and dental insurance plans

221,013

192,374

$ 564,235

$ 535,596

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

b) Other transactions with other government departments and agencies

The CICS incurred expenses of $1,361,767 in 2019-20 ($1,322,667 in 2018-19) from transactions in the normal course of business with other Government departments, agencies and Crown Corporations. In addition, the CICS has shared service agreements with other government departments related to the provision of Finance, Human Resources, Administration and Information Management and Technology services. The expenses are $271,648 in 2019-20 ($256,588 in 2018-19) and are included in the total amount of transactions with related parties.

(in dollars)

2020

2019

Expenses – Other government departments and agencies

1,361,767

1,322,667

Expenses disclosed in b) exclude common services provided without charge, which are already disclosed in a).

10.Segmented information

Presentation by segment is based on the CICS’s core responsibilities. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main core responsibilities, by major object of expense and by major type of revenue. The segment results for the period are as follows:

(in dollars)

Intergovernmental

Conference Services

Internal

Services

2020

2019

Operating expenses

Salaries and employee benefits

$ 2,357,991

$ 751,490

$ 3,109,481

$ 2,749,516

Professional and special services

768,840

305,729

1,074,569

1,100,335

Transportation and Communication

590,939

65,048

655,987

714,938

Rentals

525,763

65,929

591,692

596,940

Accommodation

257,417

85,806

343,223

343,222

Equipment expenses

24,292

131,295

155,587

138,156

Amortization of tangible capital assets

70,657

63,935

134,592

43,185

Information services

15,331

15,043

30,374

29,340

Utilities, materials and supplies

11,888

6,006

17,894

39,442

Loss on disposal of tangible capital assets

4,760

4,760

Repair and maintenance

273

990

1,263

22,209

Total operating expenses

4,623,391

1,496,031

6,119,422

5,777,283

Revenues

Shared cost agreement – Transfers received from the provincial governments

1,002,700

470

1,003,170

1,024,400

Revenues earned on behalf of Government

(1,002,700)

(470)

(1,003,170)

(1,024,400)

Total revenues

Net cost of operations before government funding

$ 4,623,391

$ 1,496,031

$6,119,422

$5,777,283