Future-oriented Financial Statements for the Years Ending March 31, 2012 and March 31, 2013

The Office of the Registrar of the Supreme Court of Canada

Statement of Management Responsibility
Future-oriented Statement of Financial Position
Future-oriented Statement of Operations
Future-oriented Statement of Equity of Canada
Future-oriented Statement of Cash Flow
Notes to Future-oriented Financial Statements

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Statement of Management Responsibility

Departmental management is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at March 19, 2012 and reflect the plans described in the Report on Plans and Priorities.

 

____________________
Catherine Laforce,
Director General and Chief Financial Officer
Corporate Services
Ottawa, Ontario
April 11, 2012

 

__________________
Roger Bilodeau, Q.C.
Registrar
Ottawa, Ontario
April 11, 2012

Future-oriented Statement of Financial Position

As at March 31
(in dollars)

Assets

	Estimated Results 2012	Planned Results 2013
Financial assets
Due from Consolidated Revenue Fund	3,812,916	3,687,945
Accounts receivable and advances (Note 6)	74,726	75,598
Total financial assets	3,887,642	3,763,543
Non-financial assets
Prepaid expenses	141,373	144,201
Tangible capital assets (Note 7)	2,338,036	1,347,190
Total non-financial assets	2,479,409	1,491,391
Total	6,367,051	5,254,934

 

Liabilities and Equity of Canada

	Estimated Results 2012	Planned Results 2013
Liabilities
Accounts payable and accrued liabilities (Note 8)	1,731,523	1,674,771
Vacation pay and compensatory leave	779,557	791,251
Employee future benefits (Note 9b)	1,715,995	1,806,750
Other liabilities (Note 10)	2,100,611	2,207,251
Total	6,327,686	6,480,023
Equity of Canada	39,365	(1,225,089)
Total	6,367,051	5,254,934

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to February 29, 2012.

Contractual obligations (Note 11)

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

Future-oriented Statement of Operations

For the Year Ending March 31
(in dollars)

	Estimated Results 2012	Planned Results 2013
Expenses
Court operations	22,090,150	23,708,549
Payments to the Judges	5,718,225	5,718,380
Internal services	13,306,619	11,294,732
Total Expenses	41,114,994	40,721,661
Revenues
Court operations	-	-
Payments to the Judges	33,752	36,115
Internal services	148,144	137,889
Total Revenues	181,896	174,004
Net Cost of Operations	40,933,098	40,547,657

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to February 29, 2012.

Segmented information (Note 13)

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

Future-oriented Statement of Equity of Canada

For the Year Ending March 31
(in dollars)

	Estimated Results 2012	Planned Results 2013
Equity of Canada, beginning of year	141,163	39,365
Net cost of operations	(40,933,098)	(40,547,657)
Net cash provided by Government	31,154,510	30,965,279
Change in due from the Consolidated Revenue Fund	179,184	(124,971)
Services provided without charge by other government departments (Note 12a)	9,497,606	8,442,895
Equity of Canada, end of year	39,365	(1,225,089)

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to February 29, 2012.

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

Future-oriented Statement of Cash Flow

For the Year Ending March 31
(in dollars)

	Estimated Results 2012	Planned Results 2013
Operating Activities
Net cost of operations	40,933,098	40,547,657
Non-cash items:
Amortization of tangible capital assets (Note 7)	(1,464,417)	(1,260,915)
Gain (loss) on disposal of tangible capital assets	-	6,500
Services provided without charge by other government departments (Note 12a)	(9,497,606)	(8,442,895)
	29,971,075	30,850,347
Variations in Future-oriented Statement of Financial Position:
Increase (decrease) in accounts receivable and advances	(16,516)	872
Increase (decrease) in prepaid expenses	5,035	2,828
Decrease (increase) in liabilities	967,821	(152,337)
Cash used by operating activities	30,927,415	30,701,710
Capital Investment Activities
Acquisitions of tangible capital assets	227,095	270,069
Proceeds from disposal of tangible capital assets	-	(6,500)
Cash used by capital investment activities	227,095	263,569
Net Cash Provided by Government of Canada	31,154,510	30,965,279

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to February 29, 2012.

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

Notes to Future-oriented Financial Statements for the year Ending March 31

1. Authority and Objectives

Created by an Act of Parliament in 1875, the Supreme Court of Canada is Canada’s final court of appeal. It serves Canadians by deciding legal issues of public importance, thereby contributing to the development of all branches of law applicable within Canada. The independence of the Court, the quality of its work and the esteem in which it is held both in Canada and abroad contribute significantly as foundations for a secure, strong and democratic country founded on the Rule of Law. In accordance with the Supreme Court Act, the Supreme Court of Canada consists of the Chief Justice and the eight puisne judges. The Supreme Court of Canada is an important national institution, positioned at the pinnacle of the judicial branch of government in Canada.

The Office of the Registrar of the Supreme Court of Canada (Office) provides all necessary services and support for the Court to process, hear and decide cases. It also serves as the interface between litigants and the Court. The Office has a single strategic outcome: The administration of Canada's final court of appeal is effective and independent. The strategic outcome is further supported by three program activities: Court Operations; Process Payments of Various Allowances to Judges of the Supreme Court of Canada Pursuant to the Judges Act; and Internal Services.

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 Report on Plans and Priorities.

The main assumptions are as follows:

1. The Office's activities will remain substantially the same as for the previous year.
2. 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.
3. Allowances for uncollectibility are based on historical experience. The general historical pattern is expected to continue.
4. Estimated year end information for 2011-12 is used as the opening position for the 2012-13 planned results.

These assumptions are adopted as at March 19, 2012.

For the purpose of the Statement of operations, the activity titled “Process Payments of Various Allowances to Judges of the Supreme Court of Canada Pursuant to the Judges Act” is referred to as “Payments to the Judges”.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2011-2012 and for 2012-2013, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material. 

In preparing these future-oriented financial statements, the Office has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented financial statements and the historical financial statements include:

1. The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
2. Implementation of new collective agreements.
3. Interest rates in effect at the time of issue will affect the net present value of non-interest bearing loans.
4. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Office will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates.  Variances will be explained in the Departmental Performance Report.

4. Summary of Significant Accounting Policies

The future-oriented financial statements have been prepared in accordance with Treasury Board accounting policies in effect for the 2010-11 fiscal year. These accounting policies, stated below, are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

(a) Parliamentary authorities – The Office is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Office do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Future-oriented Statement of Operations and the Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides reconciliation between the bases of reporting.

(b) Net Cash provided by Government – The Office operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Office is deposited to the CRF and all cash disbursements made by the Office 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 Consolidated Revenue Fund – Amounts due from/to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Office is entitled to draw from the CRF without further parliamentary expenditure authorities to discharge its liabilities.

(d) Revenues – Sales and other revenues are recorded on an accrual basis and accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

(e) Expenses – Expenses are recorded on an accrual basis:

1. Vacation pay and compensatory leave are accrued as the benefits are earned under the respective terms of employment.
2. Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans, worker's compensation, interpretation services and security services are reported as operating expenses at their estimated cost.

(f) Employee and federally appointed Supreme Court of Canada judges future benefits

1. Employee pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The Office’s contributions to the Plan are charged to expenses in the year incurred and represent its total obligation to the Plan. Current legislation does not require the Office to make contributions for any actuarial deficiencies of the Plan.
2. Employee severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
3. Federally appointed Supreme Court of Canada judges pension benefits: Eligible federally appointed judges and their survivors are entitled to fully indexed annuities providing that the judges meet minimum age and service requirements. The main benefits paid from this plan are recorded on a pay-as-you-go basis. They are included in the Future-oriented Statement of Operations as a component of salaries and benefits and the judges' contributions are credited to revenue. Contributions made by the Office and judges pertaining to the portion of the plan that relates to indexation of benefits is recorded in a Supplementary Retirement Benefits Account, which is presented in the Future-oriented Statement of Financial Position as part of Other liabilities, with additional detail provided in Note 10. The Office's contribution towards indexation is expensed at the time it is accrued in the Account in accordance with the legislation. The actuarial liability associated with the Judges' Pension Plan is recorded in the financial statements of the Government of Canada, the ultimate sponsor of the Plan.

(g) Accounts receivable and advances – Accounts receivable and advances are stated at the lower of cost and net recoverable value; a valuation allowance is established for receivables where recovery is considered uncertain.

(h) Tangible capital assets – All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. The Office of the Registrar of the Supreme Court of Canada does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections.

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

Asset Class	Amortization Period
Machinery and equipment	3 to 10 years
Office furniture and equipment	5 to 10 years
Computer equipment	3 to 10 years
Computer software	3 to 10 years
Motor vehicles	3 years
Leasehold improvements	5 years

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

 

(i) Measurement uncertainty – The preparation of these future-oriented financial statements requires management to make estimates and assumptions that affect the reported amounts of all the assets, liabilities, revenues and expenses reported in the future-oriented financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. Actual results could significantly differ from those estimated.

5. Parliamentary Authorities

The Office receives all of its funding through expenditure authorities provided by Parliament. Items recognized in the Future-oriented Statements of Operations and Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Office has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Authorities requested

	Estimated 2012	Planned 2013
	(in dollars)
Authorities requested:
Vote 50 - Program expenditures	21,716,101	21,721,013
Contributions to employee benefit plans	2,430,614	2,377,465
Judges' salaries, allowances and annuities	5,568,300	5,718,380
	29,715,015	29,816,858
Additional authorities anticipated	2,878,798	1,369,514
Forecast authorities available	32,593,813	31,186,372

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

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

	Estimated 2012	Planned 2013
	(in dollars)
Net cost of operations	40,933,098	40,547,657
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments	(9,497,606)	(8,442,895)
Amortization of tangible capital assets	(1,464,417)	(1,260,915)
Bad debt expense	(2,029)	(1,927)
Revenue not available for spending	181,896	167,504
Gain (loss) on disposal and write-down of tangible capital assets	-	6,500
Decrease in vacation pay and compensatory leave	(11,520)	(11,694)
Decrease in employee future benefits	1,092,663	(90,755)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets	227,095	270,069
Use of proceeds from disposal of tangible capital assets	-	-
Increase in prepaid expenses	5,035	2,828
	31,464,215	31,186,372
Forecast current year lapse	1,129,598	-
Forecast authorities available	32,593,813	31,186,372

6. Accounts Receivable and Advances

The following table presents details of the Office's accounts receivable and advances balances:

	Estimated Results 2012	Planned Results 2013
	(in dollars)
Receivables from other government departments and agencies	42,018	42,648
Receivables from external parties	20,563	20,872
Standing advances	16,650	16,650
	79,231	80,170
Allowance for doubtful accounts on receivables from external parties	(4,505)	(4,572)
Total	74,726	75,598

7. Tangible Capital Assets

(in dollars)

Cost

Capital asset class	Opening Balance	Acquisitions	Disposals and write-offs	Closing balance
Machinery and equipment	973,765	48,165	-	1,021,930
Office furniture and equipment	1,815,238	23,063	18,367	1,856,668
Computer equipment	972,634	88,728	-	1,061,362
Computer software	780,550	31,195	-	811,745
Motor vehicles	162,021	30,000	-	192,021
Leasehold improvements	9,733,644	42,843	-	9,776,487
Assets under construction	18,367	6,075	(18,367)	6,075
Total	14,456,219	270,069	-	14,726,288

 

Accumulated Amortization

Capital asset class	Opening balance	Amortization	Disposals and write-offs	Closing balance
Machinery and equipment	737,846	115,636	-	853,482
Office furniture and equipment	1,356,571	93,534	-	1,450,105
Computer equipment	773,788	55,910	-	829,698
Computer software	529,936	61,031	-	590,967
Motor vehicles	151,988	15,034	-	167,022
Leasehold improvements	8,568,054	919,770	-	9,487,824
Assets under construction	-	-	-	-
Total	12,118,183	1,260,915	-	13,379,098

 

Net Book Value

Capital asset class	2013	2012
Machinery and equipment	168,448	235,919
Office furniture and equipment	406,563	458,667
Computer equipment	231,664	198,846
Computer software	220,778	250,614
Motor vehicles	24,999	10,033
Leasehold improvements	288,663	1,165,590
Assets under construction	6,075	18,367
Total	1,347,190	2,338,036

Disposals of assets under construction represent assets that are put into use in the year and transferred to other capital asset classes as applicable.

8. Accounts Payable and Accrued Liabilities

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

	Estimated Results 2012	Planned Results 2013
	(in dollars)
Accounts payable to other government departments and agencies	404,402	382,725
Accounts payable to external parties	654,738	648,800
	1,059,140	1,031,525
Accrued liabilities	672,383	643,246
Total	1,731,523	1,674,771

9. Employee Benefits

(a) Pension benefits: The Office’s employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with the Canada/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Office contribute to the cost of the Plan. The forecast expenses are $1,726,177 in 2011-12 and $1,812,418 in 2012-13, representing approximately 1.9 times the contributions of employees.

The Office'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 Office provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, estimated as at the date of these statements, is as follows:

 

	Estimated Results 2012	Planned Results 2013
	(in dollars)
Accrued benefit obligation, beginning of year	2,808,658	1,715,995
Expense for the year	201,505	153,911
Expected benefits payments during the year	(1,294,168)	(63,156)
Accrued benefit obligation, end of year	1,715,995	1,806,750

10. Other Liabilities

The following table presents details of other liabilities:

	Estimated Results 2012	Planned Results 2013
	(in dollars)
Trust Account - Security Deposit
Liability, beginning of year	389,866	387,916
Deposits	1,000	4,000
Interest	255	927
Reimbursements	(3,205)	(1,047)
Liability, end of year	387,916	391,796
Supplementary Retirement Benefit Account (SRBA)
Liability, beginning of year	1,615,749	1,712,695
Deposits	59,457	61,286
Interest	37,489	41,474
Liability, end of year	1,712,695	1,815,455
Total	2,100,611	2,207,251

Security deposit account was established to record security to the value of $500 deposited by an Appellant with the Registrar of the Supreme Court of Canada in accordance with paragraph 60(1)(b) of the Supreme Court Act. As per section 87 of the Rules of the Supreme Court of Canada, interest is paid on money deposited as security.

Supplementary Retirement Benefit Account (“SRBA”) records contributions made by Judges of the Supreme Court of Canada and the matching contributions made by the Employer in accordance with the SRBA Act and the Judges Act.

11. Contractual Obligations

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

	Goods and Services	Operating Leases	Total
	(in dollars)
2012	56,368	49,200	105,568
2013	46,803	49,200	96,003
2014	4,000	41,000	45,000
2015	4,000	-	4,000
2016 and thereafter	-	-	-
Total	111,171	139,400	250,571

12. Related Party Transactions

The Office of the Registrar of the Supreme Court of Canada is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The Office enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Office 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 Office receives services without charge from certain common service organizations, related to accommodation, the employer's contribution to the health and dental insurance plans, workers' compensation coverage, interpretation services and security services. These services provided without charge have been recorded in the Office's Future-oriented Statement of Operations as follows:

	Estimated Results 2012	Planned Results 2013
	(in dollars)
Accommodation services provided by PWGSC	5,329,010	4,184,574
Employer's contribution to health and dental insurance plans	1,161,167	1,219,179
Workers' compensation cost provided by HRSDC	38,316	36,313
Interpretation services provided by PWGSC	125,860	130,089
Security services provided by the RCMP	2,843,253	2,872,740
	9,497,606	8,442,895

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 services 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 Office's Statement of Operations.

(b) Other transactions with related parties:

	Estimated Results 2012	Planned Results 2013
	(in dollars)
Expenses to other government departments and agencies	5,583,416	5,530,002
Revenues from other government departments and agencies	51,568	49,330

13. Segmented Information

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

	2012 Total	Court Operations	Payments to the Judges	Internal Services	Total 2013
	(in dollars)
Expenses
Salaries and benefits	25,061,111	14,601,382	5,475,380	6,207,243	26,284,005
Professional services	5,668,858	4,151,219	34,073	1,430,172	5,615,464
Accommodation	5,329,010	2,997,410	-	1,187,164	4,184,574
Amortization of tangible capital assets	1,464,417	-	-	1,260,915	1,260,915
Library materials	1,099,320	1,004,166	3,771	2,219	1,010,156
Materials, office supplies and equipment	832,630	119,617	22,128	705,787	847,532
Travel	834,392	558,924	181,262	15,340	755,526
Telecommunications services	307,471	36,652	1,509	266,741	304,902
Equipment rentals	152,927	31,333	-	111,493	142,826
Printing services	176,858	157,541	-	14,515	172,056
Repairs and maintenance	97,797	16,024	117	59,850	75,991
Postage and courier	88,055	34,270	140	31,264	65,674
Other	2,148	11	-	2,029	2,040
Total Expenses	41,114,994	23,708,549	5,718,380	11,294,732	40,721,661
Revenues	181,896	-	36,115	137,889	174,004
Net Cost of Operations	40,933,098	23,708,549	5,682,265	11,156,843	40,547,657