Library and Archives Canada 2016-2017 Financial Statements

Financial statements for the year ended March 31, 2017

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, 2017, and all information contained in these statements rests with Library and Archives Canada (LAC) management. These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.

LAC management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information presented 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 financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in LAC'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 LAC; 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 the effectiveness of associated key controls, and to make any necessary adjustments.

LAC will be subject to periodic Core Control Audits performed by the Office of the Comptroller General, and they will use the results of such audits to adhere to the Treasury Board Policy on Internal Control.

In the interim, the LAC has undertaken a risk-based assessment of the system of ICFR for the year ended March 31, 2017, in accordance with the Treasury Board Policy on Internal Control, and the action plan is summarized in the annex.

The financial statements of LAC have not been audited.


 

_________________________________
Guy Berthiaume
Librarian and Archivist of Canada
Gatineau, QC
August , 2017

 


 

_________________________________
Anick Ouellette, CPA, CA
Assistant Deputy Minister, Corporate
Services, and Chief Financial Officer
Gatineau, QC
August , 2017

 

 

Statement of financial position (Unaudited)
As at March 31

(in thousands of dollars)

2017

2016


Liabilities

 

Accounts payable and accrued liabilities (note 4)

$ 12,169

 

$ 9,719

 

Vacation pay and compensatory leave

3,277

 

2,992

 

Deferred revenue (note 5)

1,099

 

258

 

Employee future benefits (note 6)

3,260

 

6,254

Total net liabilities

19,805

 

19,223


Financial assets

 

 

 

Due from Consolidated Revenue Fund

12,557

 

9,499

  

Accounts receivable and advances (note 7)

1,015

 

540

Total net financial assets

13,572

 

10,039


Departmental net debt

6,233

 

9,184


Non-financial assets

 

 

 

 

Tangible capital assets (note 8)

85,133

 

40,026

 

Prepaid expenses

601

 

-

 

Collections (note 9)

1

 

1

Total non-financial assets

85,735

 

40,027


Departmental net financial position

$ 79,502

 

$ 30,843

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


 

_________________________________
Guy Berthiaume
Librarian and Archivist of Canada
Gatineau, QC
August , 2017

 


 

_________________________________
Anick Ouellette, CPA, CA
Assistant Deputy Minister, Corporate
Services, and Chief Financial Officer
Gatineau, QC
August , 2017

 

 

Statement of operations and departmental net financial position (unaudited)
For the year ended March 31

(in thousands of dollars)

2017

 

2017

2016

 

 

Planned Results

 

Expenses

 

 

 

 

 

Development of disposition authorizations

3,230


4,217


3,352

 

Collaboration in the management of government records

6,021

 

3,959

 

6,966

 

Documentation of the Canadian society

17,382

 

13,254

 

17,516

 

Stewardship of documentary heritage

52,074

 

37,183

 

41,878

 

Access to documentary heritage

32,972

 

37,836

 

31,857

 

Internal services

31,251

 

31,900

 

35,522

Total expenses

142,930

 

128,349

 

137,091


Revenues

 

 

 

 

 

 

Sales of goods and information products

205

 

190

 

177

 

Gain on disposal of non-capital assets

20

 

12

 

6

 

Gain on disposal of tangible capital assets

-

 

0

 

19

 

Miscellaneous revenues

120

 

247

 

1,271

 

Revenues earned on behalf of Government

(107)

 

(55)

 

(103)

Total revenues

238

 

394

 

1,370


Net cost of operations before government funding and transfers

142,692

127,955

135,721


Government funding and transfers

 

 

 

 

 

 

Net cash provided by the Government

 

 

111,284

 

92,855

 

Change in due from Consolidated Revenue Fund

 

 

3,058

 

(1,668)

 

Services provided without charge by other government departments (note 10)

 

 

20,630

 

42,409

Transfer of the transition payments for implementing salary payments in arrears (note 11)

-

(27)

Transfer of assets and liabilities from (to) other government departments (note 12)

41,642

-

Net cost of operations after government funding and transfers

 

 

(48,659)

 

2,152


Departmental net financial position—beginning of year

 

 

30,843

 

32,995

Departmental net financial position—end of year

 

 

79,502

 

30,843

Segmented information (note 13)
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

(in thousands of dollars)

 

2017

 

2016

 

 

 

 

Net cost of operations after government funding and transfers

(48,659)

 

2,152


Change due to tangible capital assets (note 8)

 

 

 

 

Acquisition of tangible capital assets

8,073

 

1,833

 

Amortization of tangible capital assets

(4,623)

 

(3,280)

 

Proceeds from disposal of tangible capital assets

(12)

 

(20)

 

Net (loss) gain on disposal and write-off of tangible capital assets including adjustments

12

 

(306)

 

Transfer between government departments

41,657

 

-

Total change due to tangible capital assets

45,107

 

(1,773)


Change due to prepaid expenses

601

 

-


Net increase (decrease) in departmental net debt

(2,951)

 

379


Departmental net debt—beginning of year

9,184

 

8,805

Departmental net debt—end of year

6,233

 

9,184

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

Statement of cash flows (Unaudited)
For the year ended March 31

(in thousands of dollars)

2017

2016

Operating activities

 

 

 

Net cost of operations before government funding and transfers

127,955


135,721


Non-cash items:

 

 

 

 

 

Amortization of tangible capital assets (note 8)

(4,623)

 

(3,280)

 

 

Gain (loss) on disposal and write-off of tangible capital assets

12

 

(306)

Services provided without charge by other government departments (note 10)

(20,630)

(42,409)

 

 

Transition payments for implementing salary payments in arrears (note 11)

-

 

27


 

Variations in Statement of Financial Position:

 

 

 

 

 

Increase (decrease) in accounts receivable and advances

475

 

49

 

 

Increase (decrease) in prepaid expenses

601

 

-

 

 

Decrease (increase) in liabilities

(582)

 

1,240

 

 

Transfer of assets to other government departments (note 12)

15

 

-

Cash used in operating activities

103,223

 

91,042

Capital investing activities

 

 

 

 

Acquisitions of tangible capital assets (note 8)

8,073

 

1,833

 

Proceeds from disposal of tangible capital assets

(12)

 

(20)

Cash used in capital investing activities

8,061

 

1,813


Net cash provided by Government of Canada

111,284

 

92,855

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

Notes to the financial statements (Unaudited)
For the year ended March 31

1. Authority and objectives

(a) Description of the authority and objectives

LAC is a government institution that was established on May 21, 2004, as a result of the amalgamation of the former National Library of Canada and National Archives of Canada. LAC's role was confirmed in the 2004 Library and Archives of Canada Act, which assigns discretionary power to the Librarian and Archivist of Canada in attaining LAC's objectives. Pursuant to the Act, no government or ministerial record may be destroyed without the prior written consent of the Librarian and Archivist of Canada. Government records deemed to be of historical or archival importance shall be transferred to his or her care and control.

LAC is a Schedule I.1 organization within the Financial Administration Act and reports to Parliament through the Minister of Canadian Heritage. LAC's mandate is as follows:

  • to preserve the documentary heritage of Canada for the benefit of current and future generations;
  • to serve as a source of enduring knowledge accessible to all, contributing to the cultural, social and economic advancement of Canada as a free and democratic society;
  • to facilitate in Canada cooperation among communities involved in the acquisition, preservation and diffusion of knowledge; and
  • to serve as the continuing memory of the Government of Canada and its institutions.

(b) Description of the programs
i) Development of disposition authorizations: LAC supports effective recordkeeping within federal institutions by issuing records disposition authorizations. Disposition authorizations specify the records to be transferred to LAC at the end of their retention period (because they have archival or historical value). Other records may be alienated or disposed of by the creating institution at the end of their retention period.

ii) Collaboration in the management of government records: Working collaboratively with central agencies, federal departments and agencies, and other stakeholders, LAC plays a lead role in developing standards, tools and best practices for information management and recordkeeping. LAC facilitates the management of information within federal institutions by providing support, services and training through multiple activities: providing advice on recordkeeping and records management to central agencies, other federal government institutions and intergovernmental committees; preparing and delivering training and awareness sessions to federal public servants through seminars and forums on recordkeeping; establishing networks in the Government of Canada information management community; and coordinating initiatives that support the efforts of federal libraries and their respective departments.

iii) Documentation of Canadian society: One of the pillars of LAC's mandate is to evaluate and acquire Canada's documentary heritage to reflect Canadian society and make it available to current and future generations. LAC's holdings consist of published and unpublished information resources in a variety of formats and media, both analogue and digital. This program includes all activities aimed at evaluating, acquiring and processing Canada's documentary heritage, which includes ensuring its authenticity and significance to Canadians. This program results in a collection that remains relevant to Canadians.

LAC's acquisitions are governed by legislation, as follows:

  • the Legal Deposit of Publications Regulations and the Library and Archives of Canada Act, whereby Canadian publishers must deposit a copy of all their publications with LAC;
  • the Library and Archives of Canada Act, whereby federal government records of archival and historical value must be transferred to LAC once their retention period has expired.

LAC is also mandated to acquire records of archival and historical value created by private individuals, non-government organizations and the private sector that represent Canadian society—past and present. Lastly, LAC is mandated to acquire a representative sample of the documentary material of interest to Canada that is accessible to the public without restriction through the Internet or any similar medium.

iv) Stewardship of documentary heritage: LAC manages a vast collection of materials in a wide variety of formats, both digital and analogue, to ensure their long-term preservation and accessibility. Traditional and cutting-edge archival and preservation techniques ensure the long-term preservation of relevant materials in both analogue and digital formats. The special-purpose buildings under LAC's custody, such as the Preservation Centre, the Nitrate Film Preservation Facility, and the high-density collection storage facility, help prevent the deterioration of records and preserve their long-term integrity. The stewardship of these records includes all management activities and strategies aimed at ensuring the integrity, authenticity and availability of Canada's documentary heritage. There are various types of stewardship activities: those related to the physical management of the collection, such as storage; those involving restoration and preservation, which include reducing deterioration of records and repairing already damaged records; and those associated with reproduction and the making of replacement copies, which ensure the preservation and availability of records that would otherwise be too fragile to access. For digital records, innovative strategies are implemented to maintain access and to ensure that the content is protected through proper transfer and storage.

v) Access to documentary heritage: This program aims to make Canadian documentary heritage known and available to Canadians and to anyone interested in Canada, its society or its history. By providing access, LAC contributes to creating new knowledge that will increase the understanding of Canadian society. This program includes the activities through which documentary heritage is digitized, described, organized, indexed and interlinked to facilitate access and meets the needs and expectations of users. The resulting digital content, databases, catalogue indexes and other tools assist users in searching the records for which LAC is responsible. The program also encompasses all activities to make documentary heritage available, in particular through the website and onsite. LAC provides information as well as consultation, reproduction and lending services in various forms to a wide range of users. These services are provided in many ways—in person, by telephone, by mail, via email or over the Internet—based on needs and preferences. LAC also contributes to making Canada's documentary heritage known by providing access to records under its responsibility through public programming and partnerships. The Documentary Heritage Communities Program is a contribution program that ensures the preservation of Canada's local documentary heritage; provides access to and promotes local documentary heritage communities; and provides opportunities to evolve and remain sustainable. Lastly, LAC contributes significantly to making Canada's documentary heritage known by providing access to government records for which it has responsibility under the Access to Information Act and the Privacy Act and by providing information found in the personnel files of former civil service employees and members of the Canadian Forces.

vi) Internal services: 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, Legal Services, Human Resources Management Services, Financial Management Services, Information Management Services, Information Technology Services, Real Property Services, Materiel Services, Acquisition Services, and Travel and Other Administrative Services. Internal services include only those activities and resources that apply across an organization and not those dedicated to one program in particular.

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
LAC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to LAC does not parallel financial reporting according to generally accepted accounting principles, since authorities are primarily based on cash flow requirements. Consequently, items recognized in the 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 2016-17 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 or in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2016-17 Report on Plans and Priorities.

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

(d) Revenues
i) Sales of goods and information products are revenues from regulatory fees and are recognized in the accounts based on the services provided in the year.
ii) Funds received from external parties for specified purposes are recorded upon receipt asred revenues. These revenues are recognized in the period in which the related expenses are incurred.
iii) Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
iv) Revenues that are non-respendable are not available to discharge the Department's liabilities. While the Deputy Head is expected to maintain accounting control, he or she has no authority regarding the disposition of non-respendable revenues. As a result, these 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.

(e) Expenses
Expenses are recorded on the accrual basis:
i) Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.
ii) Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
iii) Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans, and workers' compensation 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 pension plan administered by the Government. LAC's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation to the Plan. LAC'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 and advances
Accounts receivable and advances are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

(h) Contingent liabilities
Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(i) Foreign currency transactions
Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars using the rate of exchange in effect at year-end. Gains and losses resulting from foreign currency transactions are included in Other items within the Segmented information (note 11).

(j) Tangible capital assets
All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. LAC does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value.

 

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

Buildings

40 years

Machinery and equipment

3–15 years

Computer hardware

2–7 years

Computer software

2–10 years

Other equipment

3–40 years

Vehicles

3–5 years

Leasehold improvements

Lesser of the remaining term of lease or useful life of the improvement

Assets under construction and software under development 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.

(k) Collections
LAC's collections are presented in the Statement of Financial Position at a nominal value of $1,000. Items purchased for the collections are recorded as an expense in the year of acquisition. Items collected from the federal government are not recorded in the Statement of Financial Position.

(l) 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 contingent liabilities, 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.

3. Parliamentary authorities

LAC 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, LAC 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.

[6]
(a) Reconciliation of net cost of operations to current year authorities used

 

2017

2016

 

(in thousands of dollars)

Net cost of operations before government funding and transfers

127,955

 

135,721


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

 

Services provided without charge by other government departments

(20,630)

(42,409)

 

Amortization of tangible capital assets

(4,623)

(3,280)

 

Decrease (increase) in employee future benefits

2,994

 

(190)

 

Decrease (increase) in vacation pay and compensatory leave

(285)

(205)

 

Bad debts expenses

-

(2)

 

Refund of previous year's expenditures

143

 

59

 

Revenue not available for spending during the fiscal year

68

206

 

Gain (loss) on disposal and write-off of tangible capital assets

12

(306)

 

Other

156

 

-

 

Total items affecting net cost of operations but not affecting authorities

(22,165)

(46,127)

 

 

 

 

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

 

 

Acquisitions of tangible capital assets

8,073

1,833

 

Proceeds from disposal of tangible capital assets

(12)

 

(20)

Transition payments for implementing salary payments in arrears (note 11)

-

27

Increase in prepaid expenses

601

-

 

Other

49

 

17

 

Total items not affecting net cost of operations but affecting authorities

8,711

 

1,857

Current year authorities used

114,501


91,451

 

[7]
(b) Authorities provided and used

 

2017

2016

Authorities provided:

(in thousands of dollars)

Vote 55—Operating expenditures

101,468

 93,957 

Vote 60—Capital expenditures

11,241

 - 

Statutory amounts

10,141

10,265 

 

 

 

 

Less:

Authorities available for future years

(12)

 

(25)

Lapsed: Operating

(1,842)

(3,221)

Lapsed: Capital

(3,497)

-

Lapsed: Frozen allotments

(2,998)

(9,525)

Current year authorities used

114,501

 

91,451

[8]
4. Accounts payable and accrued liabilities

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

 

2017

2016

 

(in thousands of dollars)

Accounts payable—Other government departments and agencies

2,313

1,064

Accounts payable—External parties

9,679

8,510

Total accounts payable

11,992

9,574

Accrued liabilities

177

145

Total accounts payable and accrued liabilities

12,169

9,719

[9]
5. Deferred revenue

Deferred revenue represents the balance at year-end of unearned revenues stemming from amounts received from external parties that are restricted in order to fund the expenditures related to specific research projects and stemming from amounts received for fees prior to services being performed. Revenue is recognized in the period in which these expenditures are incurred or in which the service is performed. Details of the transactions related to this account are as follows:

 

 

2017

2016

 

(in thousands of dollars)

Opening balance

258


863

Amounts received

1,418

 

63

Revenues recognized

(577)

 

(668)

Net closing balance

1,099

 

258

6. Employee future benefits

(a) Pension benefits

LAC'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 two 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 Plan benefits and they are indexed to inflation.

Both the employees and LAC 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 at 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 2016–2017 expense amounts to $7,039,704 ($7,035,875 in 2015–2016). For Group 1 members, the expense represents approximately 1.12 times (1.25 times in 2015–2016) the employee contributions and, for Group 2 members, approximately 1.08 times (1.24 times in 2015–2016) the employee contributions.

LAC'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
Severance benefits provided to LAC 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, 2017, all settlements for immediate cash-out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.
 
[10]
Information about the severance benefits, measured as at March 31, is as follows:
 

 

2017

2016

 

(in thousands of dollars)

Accrued benefit obligation, beginning of year

6,254

 

6,064

Expense for the year

(1,956)

 

847

Benefits paid during the year

(1,038)

 

(657)

Accrued benefit obligation, end of year

3,260

 

6,254

[11]
7. Accounts receivable and advances

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

 

2017

2016

 

(in thousands of dollars)

Receivables—Other government departments and agencies

644

 

446

Receivables—External parties

357

 

89

Employee advances

14

 

5

Accounts receivable

1,015

 

540

[12]
8. Tangible capital assets

Cost
(in thousands of dollars)

Opening Balance

Acquisitions

Adjustments
(1)

Disposals and
Write-offs

 

Closing
Balance

Land

-

-

8,786

-

8,786

Buildings

8,020

-

94,861

-

102,881

Machinery and equipment

850

-

-

-

850

Computer hardware

3,927

504

-

-

4,431

Computer software

15,753

42

166

-

15,961

Other equipment

34,739

465

-

-

35,204

Vehicles

570

34

-

-

604

Leasehold improvements

18,601

-

-

-

18,601

Building in progress of construction

949

6,529

-

-

7,478

Leasehold improvements in progress of construction

-

114

-

-

114

Software under development

126

 

385

 

(166)

 

-

 

345

 

83,535

 

8,073

 

103,647

 

 

 

195,255

 

 

Accumulated Amortization
(in thousands of dollars)

Opening Balance

Amortization

Adjustments
(1)

Disposals and
Write-offs

Closing
Balance

Buildings

1,034

1,862


61,990

 

-

 

64,886

Machinery and equipment

715

24

-

 

-

 

739

Computer hardware

3,607

117

-

 

-

 

3,724

Computer software

14,748

362

-

 

-

 

15,110

Other equipment

20,430

1,381

-

 

-

 

21,811

Vehicles

231

42

-

 

-

 

273

Leasehold improvements

2,744

 

835

 

-

 

-

 

3,579

 

43,509

 

4,623

 

61,990

 

-

 

110,122

 

 

 

 

 

 

 

Net Book Value
(in thousands of dollars)

2017

 

2016

 

 

Land

 

8,786

 

-

 

 

Buildings

 

37,995

 

6,986

 

 

Machinery and equipment

 

111

 

135

 

 

Computer hardware

 

707

 

320

 

 

Computer software

 

851

 

1,005

 

 

Other equipment

 

13,393

 

14,309

 

 

Vehicles

 

331

 

339

 

 

Leasehold improvements

 

15,022

 

15,857

 

 

Building in progress of construction

 

7,478

 

949

 

 

Leasehold improvements in progress of construction

 

114

 

-

 

 

Software under development

 

345

 

125

 

 

 

85,133

 

40,026

 

 

  1. (1) Adjustments include software under development of $165,519 transferred to other categories upon completion of the assets.

Effective April 1st, 2016, Public Services and Procurement Canada (PSPC) transferred land and buildings with a net book value of $41,656,602 to LAC. This transfer is included in the adjustment columns (refer to note 12 for further details on the transfer).

9. Collections

LAC preserves Canada's documentary heritage and serves as the continuing memory of the Government of Canada, thereby contributing to the country's cultural, social and economic advancement as a free and democratic society.

While the nominal valuation attributed to the collections in these financial statements is aligned with Canadian public sector reporting standards, this is not representative of the historical or market value of the collection. Although not capitalized like other assets, such as buildings or equipment, these irreplaceable treasures have inestimable legal, evidentiary, cultural and monetary value for Canadians. These include documentary material transferred at no charge from government departments, publications received through legal deposit, materials purchased, and donated materials for which receipts for tax purposes may have been issued.

10. Related party transactions

LAC is related, as a result of common ownership, to all government departments, agencies and Crown corporations. LAC enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, during the year, LAC received common services which were obtained without charge from other government departments, as disclosed below.

 

[13]
(a) Common services provided without charge by other government departments
During the year, LAC received services without charge from certain common service organizations, related to accommodation, the employer's contribution to the health and dental insurance plans, and workers' compensation coverage. These services, provided without charge, have been recorded in LAC's Statement of Operations as follows:

 

 

 

2017

2016

 

 

(in thousands of dollars)

Accommodation

14,450

 

36,664

Employer's contribution to the health and dental insurance plans

6,180

 

5,648

Workers' compensation

-

 

97

 

  Total

20,630

 

42,409

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 and audit services provided by the Office of the Auditor General, are not included in LAC's Statement of Operations. Similarly, LAC manages records, in all media, on behalf of more than 90 federal government organizations across the country.

[14]
(b) Other transactions with related parties

 

 

2017

2016

 

 

(in thousands of dollars)

Expenses—Other government departments and agencies

28,079

 

10,708

Revenues—Other government departments and agencies

204

 

1,182

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

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

The Government of Canada implemented salary payments in arrears in 2014–2015. 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 LAC's expenses. However, it did result in the use of additional spending authorities by LAC. Prior to year-end, the transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Services and Procurement Canada, which is responsible for the administration of the Government pay system.

12. Transfers from/to other government departments

Effective April 1, 2016, PSPC transferred to LAC the responsibility for the special storage facilities of which LAC was previously the tenant, including the stewardship responsibility for these assets. The transfer occurred following a Treasury Board decision and in accordance with the Treasury Board Policy on the Management of Real Property. Accordingly, on April 1, 2016, PSPC transferred lands and buildings to LAC.

  2017
  (in thousands of dollars)
Assets:  
Tangible capital assets (net book value) (note 8) 41,657
Total assets received from PSPC 41,657
Transfer of an account receivable (15)
Total assets transferred to other departments (15)
Adjustment to the departmental net financial position 41,642

13. Segmented information

Presentation by segment is based on LAC's Program Alignment Architecture. The presentation by segment is based on the accounting policies as described in the summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues yielded for the main programs, by major object of expense and by major type of revenue. The segment results for the period are as follows:

  2017 2016
  (in thousands of dollars)
  Development of disposition authorizations Collaboration in the Management of Government Records Documentation of Canadian Society Stewardship of documentary heritage Access to Documentary Heritage Internal Services Total Total
Transfer payments - - - - 1,492 - 1,492 1,524
Operating expenses
Salaries and employee benefits 3,708 3,509 9,635 12,365 28,826 21,081 79,124 80,766
Accommodation 400 - 2,361 4,630 4,109 2,952 14,452 36,664
Professional and special services 66 138 276 4,397 1,667 3,303 9,847 6,476
Payments in lieu of taxes paid to PSPC - - - 5,609 - - 5,609 -
Repair and maintenance - 14 - 4,143 13 549 4,719 1,187
Amortization of tangible capital assets - 60 122 3,920 381 141 4,624 3,280
Rental costs 2 27 21 213 75 2,400 2,738 2,326
Utilities, materials and supplies 10 19 704 1,565 134 260 2,692 1,384
Communication services 1 1 - 7 624 397 1,030 330
Acquisition of machinery and equipment 8 28 20 250 161 244 1,011 1,848
Travel and relocation 21 40 110 78 335 217 801 737
Other 1 123 5 6 19 56 210 244
Loss on disposal and write-off of tangible capital assets - - - - - - - -
Total operating expenses 4,217 3,959 13,254 37,183 36,344 31,900 126,857 135,567
Total expenses 4,217 3,959 13,254 37,183 37,836 31,900 128,349 137,091
Revenues                
Miscellaneous revenues - - - - 191 56 247 1,271
Sales of goods and information products - - - 34 156 - 190 177
Gain on disposal of non-capital assets - - - - - 12 12 6
Gain from disposal of tangible capital assets - - - - - - - 19
Revenues earned on behalf of Government - - - - - (55) (55) (103)
Total revenues - - - 34 347 13 394 1,370
Net cost from continuing operations 4,217 3,959 13,254 37,149 37,489 31,887 127,955 135,721
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