Annual Financial Statement for the Period Ending March 31, 2015

CANADIAN INTERNATIONAL TRADE TRIBUNAL
Statement of Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2014, and all information contained in these statements rests with the management of the Canadian International Trade Tribunal (the Tribunal). These financial statements have been prepared by management in accordance with the Government’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 they contain 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 Tribunal’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Tribunal’s Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (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 Tribunal and through 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 Tribunal is subject to periodic core control audits performed by the Office of the Comptroller General and uses the results of such audits to comply with the Treasury Board’s Policy on Internal Control.

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 http://www.citt-tcce.gc.ca/en/audit-reports. The audit results and related management action plan will be considered as part of the Administrative Tribunals Support Service of Canada risk-based assessment for the period November 1, 2014 to March 31, 2015, in accordance with the Treasury Board Policy on Internal Control.

The Tribunal’s financial statements have not been audited.

Stephen A. Leach
Stephen A. Leach
Chairperson

Sylvie Mercier
Sylvie Mercier
Chief Financial Officer

Ottawa, Canada
September 4, 2015

 

Statement of Financial Position (Unaudited)
At October 31, 2014

(in thousands of dollars)

 

October 31, 2014

March 31, 2014

Liabilities

 

 

Accounts payable and accrued liabilities (note 5)

683

744

Vacation pay and compensatory leave

487

367

Employee future benefits (note 6)

538

336

Total liabilities

1,708

1,447

Financial assets

 

 

Due from Consolidated Revenue Fund

576

719

Accounts receivable and advances (note 7)

152

75

Total financial assets

728

794

Departmental net debt

980

653

Non-financial assets

 

 

Tangible capital assets (note 8)

864

948

Total non-financial assets

864

948

Departmental net financial position

(116)

295

Transfer of operations as a result of a government reorganization (note 2)

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

Stephen A. Leach
Stephen A. Leach
Chairperson

Ottawa, Canada
August 25, 2014

Sylvie Mercier
Sylvie Mercier
Chief Financial Officer

Ottawa, Canada
September 4, 2015

 

Statement of Operations and Departmental Net Financial Position (Unaudited)

(in thousands of dollars)

 

Planned Results for the 12-month period ended
March 31, 2015

For the 7-month period ended
October 31, 2014

For the 12-month period ended
March 31, 2014

Expenses

 

 

 

Adjudication of trade cases (quasi-judicial role)

9,135

5,536

9,745

General economic inquiries and references (advisory role)

123

73

132

Internal services

3,086

1,872

3,292

Total expenses

12,344

7,481

13,168

Revenues

 

 

 

Miscellaneous revenues

-

-

1

Total revenues

-

-

1

Net cost of operations before government funding and transfers

12,344

7,481

13,168

Government funding and transfers

 

 

 

Net cash provided by Government

 

5,862

10,872

Change in due from Consolidated Revenue Fund

 

(143)

40

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

 

1,594

2,877

Transfer of the transition payments for implementing salary payments in arrears (note 10)

 

(243)

-

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

 

411

(621)

Departmental net financial position - beginning of year

 

295

(326)

Departmental net financial position - end of year

 

(116)

295

Segmented information (note 11)

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

 

Statement of Change in Departmental Net Debt (Unaudited)

(in thousands of dollars)

 

For the 7-month period ended
October 31, 2014

For the 12-month period ended
March 31, 2014

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

411

(621)

Change due to tangible capital assets

 

 

Acquisition of tangible capital assets (note 8)

-

217

Amortization of tangible capital assets (note 8)

(84)

(115)

Total change due to tangible capital assets

(84)

102

Net increase (decrease) in departmental net debt

327

(519)

Departmental net debt, beginning of year

653

1,172

Departmental net debt, end of year

980

653

 

Statement of Cash Flows (Unaudited)

(in thousands of dollars)

 

For the 7-month period ended
October 31, 2014

For the 12-month period ended
March 31, 2014

Operating activities

 

 

Net cost of operations before government funding and transfers

7,481

13,168

Non-cash items

 

 

Amortization of tangible capital assets(note 8)

(84)

(115)

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

(1,594)

(2,877)

Transition payments for implementing salary payments in arrears (note 10)

243

-

Variations in statement of financial position

 

 

Increase (decrease) in accounts receivable and advances

77

5

Decrease (increase) in accounts payable and accrued liabilities

61

(17)

Decrease (increase) in vacation pay and compensatory leave

(120)

23

Decrease (increase) in future employee benefits

(202)

468

Cash used in operating activities

5,862

10,655

Capital investing activities

 

 

Acquisitions of tangible capital assets

-

217

Cash used in capital investing activities

-

217

Net cash provided by Government of Canada

5,862

10,872

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

Notes to the Financial Statements (Unaudited)

For the 7-month period ended October 31, 2014

1. Authority and Objectives

The Canadian International Trade Tribunal (the Tribunal) provides Canadian and international businesses with access to fair, transparent and timely resolution of trade remedy cases, customs and excise tax appeals, and inquiries into federal procurement complaints. At the request of the Government of Canada, the Tribunal provides advice in tariff, trade, and general economic matters.

The Tribunal operates under the authority of the Canadian International Trade Tribunal Act. It is also governed by the following statutes, regulations and rules: Customs Act, Excise Tax Act, Special Import Measures Act, Energy Administration Act, Canadian International Trade Tribunal Regulations, Canadian International Trade Tribunal Procurement Inquiry Regulations and Canadian International Trade Tribunal Rules.

The Tribunal’s strategic outcome is the fair, timely and transparent disposition of international trade cases and government-requested inquiries into economic trade and tariff matters within the Tribunal’s jurisdiction.

The Tribunal has three programs:

  • Adjudication of trade cases (quasi-judicial role)
  • General economic inquiries and references (advisory role)
  • Internal services

In its quasi-judicial role, the Tribunal inquires into trade-related complaints (i.e. dumping, subsidizing and safeguards) and complaints regarding federal government procurement. The Tribunal hears appeals from decisions of the Minister of National Revenue and the Canada Border Services Agency under the Excise Tax Act and the Customs Act respectively.

In its advisory role, the Tribunal undertakes general economic inquiries and tariff references for the Minister of Finance or the Governor in Council.

Internal services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Other Administrative Services. Internal Services include only those activities and resources that apply across the organization and not those provided specifically to a program.

2. Government reorganization

In Canada’s Economic Action Plan 2014, the Government announced its intention to create the Administrative Tribunals Support Service of Canada (ATSSC). This new organization, which consolidates operations of several administrative tribunals, would provide support services to the Tribunal. The Tribunal would retain its adjudication powers while it would transfer all human and financial resources to the ATSSC.

The Economic Action Plan 2014 Act, No. 1 received Royal Assent on June 19, 2014. As a result, the ATSSC came into force on November 1, 2014. The net assets of $1,591,152 and net liabilities of $1,707,662 have been transferred to the ATSSC as of this date.

These financial statements represent the results of operations for the seven-month period ended October 31, 2014, and the financial position of the Tribunal as at October 31, 2014, immediately before the transfer of assets, liabilities, and commitments to the ATSSC on November 1, 2014. Comparative figures for the year ended March 31, 2014 are for a twelve-month period.

3. Summary of Significant Accounting Policies

These financial statements have been prepared using 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
The Tribunal is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Tribunal 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 4 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 2014-15 Report on Plans and Priorities. 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 2014-15 Report on Plans and Priorities.

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

c) Due from the CRF
Amounts due from or 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 Tribunal is entitled to draw from the CRF without further authorities to discharge its liabilities.

d) Revenues
Miscellaneous revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

e) Expenses
Expenses are recorded on the accrual basis:

(i) Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment; and

(ii) Services provided without charge by other government departments for accommodation and employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

f) Employee future benefits

(i) Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government. The Tribunal’s contributions to the Plan are charged to expenses in the year incurred and represent the Tribunal’s total obligation. The Tribunal’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.

(ii)   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.

h) Tangible capital assets
All tangible capital assets having an initial cost of $5,000 or more are recorded at their acquisition cost. The Tribunal does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, or 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 asset as follows:

Asset Class

Amortization Period

Machinery and equipment

5 to 15 years

Informatics hardware

3 to 5 years

i) Measurement uncertainty
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the liability for employee future benefits 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.

4. Parliamentary Authorities

The Tribunal 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 Tribunal 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 thousands of dollars)

 

For the 7-month period ended
October 31, 2014

For the 12-month period ended
March 31, 2014

Net cost of operations before government funding and transfers

7,481

13,168

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

 

 

Services provided without charge by other government departments

(1,594)

(2,877)

Amortization of tangible capital assets

(84)

(115)

Decrease (increase) in vacation pay and compensatory leave

(120)

23

Decrease (increase) in employee future benefits

(202)

468

Refund of prior years’ expenditures

-

12

Total items affecting net cost of operations but not affecting authorities

(2,000)

(2,489)

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

 

 

Acquisition of tangible capital assets

-

217

Transition payments for implementing salary payments in arrears

243

-

Total items not affecting net cost of operations but affecting authorities

243

217

Current year authorities used

5,724

10,896


b)  Authorities Provided and Used

(in thousands of dollars)

 

For the 7-month period ended
October 31, 2014

For the 12-month period ended
March 31, 2014

Authorities provided:

 

 

Vote 1 - Program expenditures (Vote 25 in 2013—14)

5,061

9,791

Statutory amounts

683

1,273

Total authorities provided

5,724

10,896

Less:

 

 

Lapsed authorities

(20)

(168)

Current year authorities used

5,724

10,896

5. Accounts Payable and Accrued Liabilities

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

(in thousands of dollars)

 

October 31, 2014

March 31, 2014

Accounts payable – Other government departments and agencies

175

54

Accounts payable - External parties

19

470

Total accounts payable

194

524

Accrued liabilities

489

220

Total accounts payable and accrued liabilities

683

744

6. Employee Future Benefits

a)  Pension Benefits

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

Both the employees and the Tribunal contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to the 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.

For the seven–month period ended October 31, 2014, expense amounts to $467,073 ($894,798 in 2013–14). For Group 1 members, the expense represents approximately 1.41 times (1.6 times in 2013–14) the employee contributions and, for Group 2 members, approximately 1.39 times (1.5 times in 2013–14) the employee contributions.

The Tribunal’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 Tribunal 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.

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 October 31, is as follows:

(in thousands of dollars)

 

October 31, 2014

March 31, 2014

Accrued benefit obligation, beginning of year

336

804

Expense for the year

345

(8)

Benefits paid during the year

(143)

(460)

Accrued benefit obligation, end of year

538

336

7. Accounts Receivable and Advances

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

(in thousands of dollars)

 

October 31, 2014

March 31, 2014

Accounts receivable - Other government departments and agencies

152

75

Total accounts receivable and advances

152

75

8. Tangible Capital Assets

(in thousands of dollars)

Cost

Opening Balance
April 1, 2014

Acquisitions

Disposals and Write-offs

Closing Balance
October 31, 2014

Machinery and equipment

653

-

-

653

Computer hardware

651

-

-

651

 

1,304

-

-

1,304

Accumulated Amortization

Opening Balance
April 1, 2014

Amortization

Disposals and Write-offs

Closing Balance
October 31, 2014

Machinery and equipment

106

41

-

147

Computer hardware

250

43

-

293

 

356

84

-

440

Net Book Value

Opening Balance
April 1, 2014

 

 

Closing Balance
October 31, 2014

Machinery and equipment

547

 

 

506

Computer hardware

401

 

 

358

 

948

 

 

864

9. Related Party Transactions

The Tribunal is related as a result of common ownership to all government departments, agencies, and Crown corporations. The Tribunal enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Tribunal 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, the Tribunal received services without charge from certain common service organizations, related to accommodation and the employer’s contribution to the health and dental insurance plans. These services provided without charge have been recorded in the Tribunal’s Statement of Operations and Departmental Net Financial Position as follows:

(in thousands of dollars)

 

 

For the 7-month period ended
October 31,2014

For the 12-month period ended
March 31,2014

Accommodation

1,239

2,107

Employer’s contribution to the health and dental insurance plans

355

770

 

1,594

2,877

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 Tribunal’s Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with related parties

(in thousands of dollars)

 

 

For the 7-month period ended
October 31,2014

For the 12-month period ended
March 31,2014

Expenses - Other government departments and agencies

815

1,520

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

10. Transfer of the transition payments for implementing salary payments in arrears

The Government of Canada implemented salary payments in arrears in 2014–15. As a result, a one-time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay processes. This change to the pay system had no impact on the expenses of the Tribunal. However, it did result in the use of additional spending authorities by the Tribunal. Prior to October 31, 2014, the transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Works and Government Services Canada, who is responsible for the administration of the Government pay system.

11. Segmented Information

Presentation by segment is based on the Tribunal's program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 3. The following table presents the expenses incurred and revenues generated for the main programs, by major object of expense and by major type of revenue. The segment results for the period are as follows:

(in thousands of dollars)

 

For the 7-month period ended
October 31, 2014

For the 12-month period ended
March 31, 2014

 

Adjudication of Trade Cases (quasi-judicial role)

General Economic Inquiries and References (advisory role)

Internal Services

Total

Total

Expenses

 

 

 

 

 

Salaries and employee benefits

4,086

55

1,380

5,521

9,543

Accommodation

916

12

310

1,238

2,107

Professional and special services

244

3

83

330

655

Transportation and telecommunications

88

1

30

119

219

Amortization of tangible capital assets

63

1

21

85

115

Acquisition of small equipment

58

1

20

79

147

Rentals

33

-

11

44

146

Materials and supplies

22

-

8

30

96

Information

18

-

6

24

35

Repairs and maintenance

8

-

3

11

106

Total expenses

5,536

73

1,872

7,481

13,169

Revenues

 

 

 

 

 

Miscellaneous revenues

-

-

 

-

1

Total revenues

-

-

-

-

1

Net cost of operations before government funding and transfers

5,536

73

1,872

7,481

13,168

12. Comparative information

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

Resource Type

Status

Attachments

Publication Date

Tuesday, January 26, 2016

Modification Date

Tuesday, January 26, 2016