Financial Statements

Statement of Management Responsibility Including Internal Control Over Financial Reporting

CANADA INDUSTRIAL RELATIONS BOARD

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 Canada Industrial Relations Board (the CIRB or the Board). These financial statements have been prepared by management using 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 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 Board’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Board’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 Board 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 CIRB 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’s Policy on Internal Control.

A Core Control Audit was performed in 2009–10 by the OCG. The Audit Report and related Management Action Plan are posted on the departmental Website.

The financial statements of the Board have not been audited.

Elizabeth MacPherson, Chairperson
Ottawa, Canada
16-12-2014

Ginette Brazeau, Executive Director
Ottawa, Canada
16-12-2014

Statement of Financial Position (unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

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

Elizabeth MacPherson, Chairperson
Ottawa, Canada
16-12-2014

Ginette Brazeau, Executive Director
Ottawa, Canada
16-12-2014

Statement of Operations and Departmental Net Financial Position unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

Statement of Change in Departmental Net Debt (unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

Statement of Cash Flows (unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

Notes to the Financial Statements (unaudited)

CANADA INDUSTRIAL RELATIONS BOARD

FOR THE YEAR ENDED MARCH 31, 2014

1. Authority and Objective

The Canada Industrial Relations Board (the CIRB or the Board) is an independent, representational, quasi-judicial tribunal responsible for the interpretation and application of Part I (Industrial Relations) and certain provisions of Part II (Occupational Health and Safety) of the Canada Labour Code (the Code), as well as Part II of the Status of the Artist Act. The Board was established in January 1999 through amendments to Part I of the Code. The mandate of the Board is to contribute to and promote effective industrial relations in the federally regulated private sector.

In accordance with the approved Program Alignment Architecture (PAA), the Statement of Operations and Departmental Net Financial Positions presents the following programs:

Adjudicative and Dispute Resolution Program
Through this program, the CIRB resolves labour relations issues by exercising its statutory powers relating to the application and interpretation of Part I (Industrial Relations) and certain provisions of Part II (Occupational Health and Safety) of the Code, as well as Part II of the Status of the Artist Act. Activities include the granting, modification and termination of bargaining rights; the investigation, mediation and adjudication of complaints alleging violation of Part I of the Code; the determination of level of services required to be maintained during a work stoppage; the exercise of ancillary remedial authority; the exercise of cease and desist powers in cases of unlawful strikes or lockouts; and the settlement of the terms of a first collective agreement.

Internal Services
Internal Services are groups of activities and resources that are administered to support the operational needs of the Board’s Adjudicative and Dispute Resolution Program and other corporate obligations of the CIRB, including central agencies requirements. These groups are: management and oversight services; human resources services; financial and administrative services (including facilities, material and procurement services); information management services; and information technology services.

2. 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 Board is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Board 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 Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt are the amounts reported in the future-oriented financial statements included in the 2013–14 Report on Plans and Priorities.

(b) Net cash provided by Government
The Board operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Board is deposited to the CRF, and all cash disbursements made by the Board 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) Due from or to 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 Board is entitled to draw from the CRF without further appropriations to discharge its liabilities.

(d) Expenses
Expenses are recorded on the accrual basis:

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, legal services and employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

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

Revenues that are non-respendable are not available to discharge the CIRB’s liabilities. While the chairperson is expected to maintain accounting control, she 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 entity’s gross revenues.

(f) Employee future benefits

Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Board’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The Board’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
Most receivables recorded by the Board are from other government departments. Recovery is considered certain and a provision has not been made.

(h) Tangible capital assets
All tangible capital assets and leasehold improvements having an initial cost of $7,000 or more are recorded at their acquisition cost. The Board does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian reserves and museum collections.

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

(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 severance benefits and the useful life of tangible capital. 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 Board receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and the Departemental 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 Board 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

(b) Authorities provided and used

4. Accounts Payable and Accrued Liabilities

The following table presents details of the Board's accounts payable and accrued liabilities:

5. Employee Future Benefits

(a) Pension benefits
The Board’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% 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 Board contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Canada’s 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 2013–14 expense amounts to $1,057,903 ($1,036,068 in 2012–13). For Group 1 members, the expense represents approximately 1.6 times (1.7 times in 2012–13) the employee contributions and, for Group 2 members, approximately 1.6 times (1.5 times in 2012–13) the employee contributions.

The Board’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.

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.

6. Accounts Receivable and Advances

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

7. Tangible Capital Assets

8. Contractual Obligations

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

9. Related Party Transactions

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

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, are not included in the Board’s Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with related parties

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

10. Transfers from/to Other Government Departments

Effective April 1, 2013, the Board was transferred the powers and duties of the Canadian Artists and Producers Professional Relations Tribunal (CAPPRT) following its dissolution pursuant to Order-in-Council 2013-0337, including stewardship responsibility for the liabilities related to the CAPPRT. Accordingly, the Board was transferred liabilities of $280,281 from the CAPPRT on April 1, 2013.

11. Segmented Information

Presentation by segment is based on the Board’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 2. 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:

12. Subsequent events

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, will provide support services to the CIRB. The CIRB will retain its adjudication powers but will 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 is expected to come into force on November 1, 2014. The net assets and net liabilities of the CIRB that will be transferred to the ATSSC as of this date cannot be estimated at this time.

Date modified:

2015-01-15