Financial Statements 2011-2012

For the year ended March 31, 2012

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, 2012, and all information contained in these statements rests with the management of Library and Archives Canada. 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 Library and Archives Canada's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in Library and Archive Canada'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 Library and Archives Canada; 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.

A risk-based assessment of the system of ICFR for the year ended March 31, 2012, was completed in accordance with the Treasury Board's Policy on Internal Control and the results and action plans are summarized in the annex.

The effectiveness and adequacy of the Library and Archives Canada's system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of Library and Archives Canada's operations, and by the Departmental Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the deputy head of Library and Archives Canada.

The financial statements of Library and Archives Canada have not been audited.

Daniel J. Caron
Deputy Head and Librarian and Archivist of Canada
Gatineau, QC
August 28, 2012

Mark C. Melanson, CGA
Chief Financial Officer

 

Statement of Financial Position (Unaudited)
For the Year Ended March 31

This table indicates LAC's Statement of Financial Position for the year ended March 31, 2012. Displayed are the numbers, in thousands of dollars, for liabilities, assets and departmental net financial position. The totals for both 2011 and 2012 are included.

(in thousands of dollars)
Item 2012 2011
Liabilities
Accounts payable and accrued liabilities (note 4) $   9,393 $   7,416
Vacation pay and compensatory leave 3,529 3,962
Deferred revenue (note 5) 1,008 946
Employee future benefits (note 6) 11,561 16,540
Total net liabilities 25,491 28,864
Financial assets
Due from consolidated Revenue Fund  7,037  8,287
Accounts receivable and advances (note 7) 443 397
Total net financial assets  7,480 8,684
Departmental net debt 18,011 20,180
 
Non-financial assets
Tangible capital assets (note 8) 38,404 41,461
Collections (note 9) 1 1
Total non-financial assets 38,405 41,462
 
Departmental net financial position  $  20,394 $  21,282

[Text Version: Statement of Financial Position]

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

 

Statement of Operations and Departmental Net Financial Position (Unaudited)For the Year Ended March 31

This table indicates LAC's Statement of Operations and Departmental Net Financial Position for the year ended March 31, 2012. Displayed are the expenses by program activity, revenues by type, net cost of operations before government funding and transfers, and the net cost of operations after government funding and transfers. The departmental net financial position at the beginning and at the end of the year is also displayed. Numbers are displayed in thousands of dollars and totals for both 2011 and 2012 are included.

(in thousands of dollars)

Item
2012
Planned
Results

2012
2011
Restated
(note 14)
Expenses
Development of regulatory instruments and recordkeeping tools $     5,887 $     3,025 $     4,058
Collaboration in the management of government records 15,335 23,033 20,656
Documentation of the Canadian experience 30,876 15,833 14,257
Preservation of continuing memory 38,231 38,402 37,268
Exploration of documentary resources 29,491 42,843 57,334
Internal Services 29,567 36,273 31,545
Total expenses 149,387 159,409 165,118
 
Revenues
Sales of goods and information products 375 290 358
Gain on disposal of non-capital assets 100 212 88
Proceeds from disposal of tangible capital assets - 8 -
Miscellaneous revenues 55 49 60
Revenues earned on behalf of Government (30) (31) (28)
Total revenues 500 528 478
 
Net cost from continuing operations $  148,887 158,881 164,640
 
Transferred operations (note 11)
Expenses 3,081 3,221 5,183
Net cost of transferred operations 3,081 3,221 5,183
 
Net cost of operations before government funding and transfers 151,968 162,102 169,823
 
Government funding and transfers
Net cash provided by Government 112,747 114,948
Change in due from Consolidated Revenue Fund (1,250) (3,422)
Services provided without charge by other government departments
(note 10)
51,772 48,161
Transfer of assets and liabilities to other government departments
(note 11)
(2,040) -
Other assets transferred to other ​government departments (note 8) (15) 140
Net cost of operations after government funding and transfers 888 9,996
Departmental net financial position – Beginning of year 21,282 31,278
Departmental net financial position – End of year $   20,394 $   21,282

[Text Version: Statement of Operations and Departmental Net Financial Position]

Segmented information (note 12)

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

 

 

Statement of Change in Departmental Net Debt of Canada (Unaudited)
For the Year Ended March 31

This table indicates the Statement of Change in Departmental Net Debt of Canada for the year ended March 31, 2012. Displayed are the numbers for 2011 and 2012, in thousands of dollars, showing the departmental net debt beginning-of-year balance, adjustments throughout the year and the end-of-year balance.

(in thousands of dollars)
Item  2012 2011
Net cost of operations after government funding and transfers $     888 $  9,996
 
Change due to tangible capital assets
Acquisition of tangible capital assets 3,361 8,298
Amortization of tangible capital assets (3,699) (3,748)
Proceeds from disposal of tangible capital assets (8) (2)
Net (loss) gain on disposal of tangible capital assets including adjustments (200) (13,912)
Transfer to other government departments (2,511) 140
Total change due to tangible capital assets (3,057) (9,224)
 
Net increase (decrease) in departmental net debt (2,169) 772
 
Departmental net debt – Beginning of year 20,180 19,408
Departmental net debt – End of year $ 18,011 $ 20,180

[Text Version: Statement of Change in Departmental Net Debt of Canada]

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

 

Statement of Cash Flows (Unaudited)
For the Year Ended March 31

This table indicates LAC's Statement of Cash Flows for the year ended March 31, 2012. Displayed are numbers for both 2011 and 2012, in thousands of dollars, showing operating, investing, and financing activities.

(in thousands of dollars)

Item

2012
2011
Restated
(Note 14)
Operating activities
Net costs of operations before government funding and transfers $ 162,102 $ 169,823
Non-cash items:
Amortization of tangible capital assets (note 8) (3,699) (3,748)
Gain (Loss) on disposal of tangible capital assets (200) (13,912)
Services provided without charge by other
government departments (note 10)
(51,772) (48,161)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances 46 (156)
Decrease (increase) in liabilities 3,373 2,806
Transfer of liabilities to other government departments (note 11) (456) -
Cash used in operating activities 109,394 106,652
 
Capital investing activities
Acquisitions of tangible capital assets (note 8) 3,361 8,298
Proceeds from disposal of tangible capital assets (8) (2)
Cash used in capital investing activities 3,353 8,296
 
Net cash provided by Government of Canada $ 112,747 $ 114,948

[Text Version: Statement of Cash Flows]

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
Library and Archives Canada is an institution within the Government of Canada and was established on May 24, 2004 as a result of the amalgamation of the former National Library of Canada and National Archives of Canada.  Library and Archives Canada's role was confirmed in the 2004 Library and Archives of Canada Act. The Act assigns discretionary power to the Librarian and Archivist of Canada in the attainment of Library and Archives Canada's objects. Under the Act, no record under the control of a government or ministerial institution may be destroyed prior to receiving consent from the Librarian and Archivist of Canada and those records considered to be of historic or archival importance to the Librarian and Archivist of Canada, shall be transferred to the care and control of the Librarian and Archivist of Canada.

Library and Archives Canada is considered a Schedule I.1 organization within the Financial Administration Act and reports to Parliament through the Minister of Canadian Heritage.

The mandate of Library and Archives Canada is to preserve the documentary heritage of Canada for the benefit of present 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 the 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 Program Activities
i) Development of Regulatory Instruments and Recordkeeping Tools: Library and Archives Canada, working collaboratively with central agencies, federal departments and institutions, and other stakeholders, plays a lead role in developing standards, tools and best practices for information management and recordkeeping. Library and Archives Canada facilitates the management of information within federal institutions through the approval and issuance of Records Disposition Authorities and the development of recordkeeping tools, guides and guidelines that support the advancement of the government's Recordkeeping Initiative. Library and Archives Canada provides input on information management policy by chairing and participating in various intergovernmental committees.

ii) Collaboration in the management of government records of business value to ensure their availability: Library and Archives Canada offers advice, support, services and training to federal institutions, which enables them to manage their information effectively and helps them comply with the requirements of the Directive on Recordkeeping. Library and Archives Canada carries out these functions by providing direction to national and international institutions, presenting papers at conferences, symposiums and forums, and developing and delivering training and awareness sessions. Library and Archives Canada also facilitates the disposition of government records, providing guidance and support on their storage, preservation, destruction and transfer. In addition, Library and Archives Canada works with the federal library community to ensure access to relevant information to support the work of decision makers, while maintaining the excellence of the Government of Canada's library services. Library and Archives Canada conducts research on topics of interest to federal libraries, coordinates the procurement of electronic information resources for federal libraries, supports the ADM Task Force on the Future of Federal Library Services and manages relationships with federal library partners. Finally, Library and Archives Canada contributes significantly to the accessibility of the government records that originate from the various institutions, for which it has responsibility and legislated authority under the Access to Information Act.

iii) Documentation of the Canadian Experience: One of the pillars of Library and Archives Canada's mandate is to ensure that Canada's continuing memory reflects Canadian society and is of interest to current and future generations. The Library and Archives Canada's collection consists of published and unpublished materials in a variety of formats, both analog and digital. The majority of Library and Archives Canada's acquisitions take place within a legislative framework. For example, Canadian publishers must deposit published material with Library and Archives Canada in accordance with the Legal Deposit of Publications Regulations. As well, federal government records of archival value must be transferred to Library and Archives Canada when they cease being of operational value to the organization that produced them, in accordance with the Library and Archives Canada Act. Library and Archives Canada builds its collection by acquiring material on the Canadian experience through donations and selective purchases, which are subject to rigorous criteria to ensure the collection's coherence and relevance.

iv) Preservation of Continuing Memory: Library and Archives Canada manages a vast collection of materials in a wide range of formats, both digital and analogue, to ensure their long-term preservation and accessibility to Canadians. Traditional and cutting-edge archival and preservation techniques ensure the long-term availability of both analogue and relevant digital materials. The preservation of analogue and digital materials includes all management activities and strategies aimed at ensuring the integrity, authenticity, and short- and long-term availability of Canada's continuing memory. There are various types of preservation activities: those related to the physical management of the collection, such as storage and circulation; those involving restoration, which include preventing documents from deteriorating and repairing already damaged documents; and those associated with reproduction and the making of replacement copies, which ensure the preservation and availability of documents that would otherwise be too fragile to access. On the digital side, innovative strategies are implemented to maintain accessibility to documents in outdated formats and to ensure the originals are protected through backup and storage.

v) Exploration of Documentary Resources: This program is aimed at distributing Canadian documentary resources and making them available to Canadians or to anyone interested in Canada, its society or its experience. To this end, strategies are put in place to provide Canadians with easier access to these documentary resources and increase their use among the general public. By making available the documentary resources for which it or other heritage organizations are responsible, Library and Archives Canada contributes to the creation of new knowledge that will increase our understanding of Canada.

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 to those provided specifically to a program.

 

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
Library and Archives Canada is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to Library and Archives Canada 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 are the amounts reported in the future-oriented financial statements included in the 2011–2012 Report on Plans and Priorities. The future-oriented financial statements for 2011–2012 have been restated to reflect the revenue net of non-respendable amounts. This restatement resulted in a $30,000 increase in net costs of operations before government funding and transfers. In addition, the future-oriented financial statements have also been reclassified to conform to the current year presentation.

(b) Net Cash Provided by Government
Library and Archives Canada operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by Library and Archives Canada is deposited to the CRF and all cash disbursements made by Library and Archives Canada 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 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 Library and Archives Canada 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, 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.

(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. Library and Archives Canada's contributions to the Plan are charged to expenses in the year incurred and represent the total of Library and Archives Canada's obligation to the Plan. Library and Archives Canada’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 receivables and advances
Accounts receivables 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 or fail 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. Library and Archives Canada 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:

Table: Tangible capital assets

This table indicates LAC's asset class and amortization period for the year ended March 31, 2012.

Asset Class Amortization Period
Buildings 40 years
Machinery and equipment 5-15 years
Computer hardware 3-10 years
Computer software 2-7 years
Other equipment 5-10 years
Vehicles 3-15 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
The collections of Library and Archives Canada 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 appropriations

Library and Archives Canada 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, Library and Archives Canada 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

This table reconciles LAC's net cost of operations to current year appropriations used for the year ended March 31, 2012. The totals for both 2011 and 2012 are displayed in thousands of dollars.

(in thousands of dollars)


Item


2012
2011
Restated
(note 14)
Net cost of operations before government funding and transfers $ 162,102 $ 169,823
 
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (51,772) (48,161)
Amortization of tangible capital assets (3,699) (3,748)
Estimated amount for the Work Force Adjustment (3,000) -
Decrease (increase) in employee future benefits 4,630 (550)
Decrease (increase) in vacation pay and compensatory leave 326 (153)
Refund of previous year's expenditures 58 183
Revenue not available for spending during the fiscal year 223 86
Gain (loss) on disposal and write-down of tangible capital assets (200) (13,912)
Total items affecting net cost of operations but not affecting authorities (53,434) (66,255)
 
Adjustments for items affecting net cost of operations but not affecting authorities:
Acquisitions of tangible capital assets 3,361 8,298
Proceeds from disposal of tangible capital assets (8) -
Total items not affecting net cost of operations but affecting authorities 3,353 8,298
Current year authorities used $ 112,021 $ 111,866

[Text Version: Reconciliation of net cost of operations to current year authorities used]

(b) Authorities provided and used

This table indicates LAC's details of the current year authorities used for the year ended March 31, 2012. The totals for both 2011 and 2012 are displayed in thousands of dollars.

(in thousands of dollars)
 Item 2012 2011
Authorities provided:
Vote 50 – Operating expenditures $ 90,855 $ 104,603
Vote 55 – Capital expenditures 10,350 11,998
Statutory amounts 12,888 12,436
Authorities available for use 114,093 129,037
Less:
Lapsed: Operating 9,128 (4,071)
Lapsed: Capital - (2)
Lapsed: Frozen allotments (10,874) (13,009)
Total lapsed (1,746) (17,082)
Authorities available for future years (326) (89)
Current year authorities used $ 112,021 $ 111,866

[Text Version: Authorities provided and used]

4. Accounts payable and accrued liabilities

The following table presents details of Library and Archives Canada's accounts payable and accrued liabilities:
This table indicates LAC's accounts payable and accrued liabilities for the year ended March 31, 2012. The totals for both 2011 and 2012 are displayed in thousands of dollars.
(in thousands of dollars)
Item  2012 2011
Accounts payable – Other government departments and agencies $ 1,166 $ 1,234
Accounts payable – External parties 4,814 6,072
Total accounts payable 5,980 7,306
Accrued liabilities 3,413 110
Total accounts payable and accrued liabilities $ 9,393 $ 7,416

[Text Version: Accounts payable and accrued liabilities]

In Canada's Economic Action Plan 2012, the Government announced savings measures to be implemented by departments over the next three fiscal years starting in 2012–2013. As a result, Library and Archives Canada has recorded, at March 31, 2012, an obligation for termination benefits for an amount of $3,000,000 as part of accrued liabilities to reflect the estimated workforce adjustment costs.

5. Deferred revenue

Deferred revenue represents the balance at year-end of unearned revenues stemming from donations. Some of these donations shall be used in accordance with any terms and conditions attached to them. Revenue is recognized in the period that the expenditures are incurred or services are rendered in line with the purposes for which the donations were received. Details of the transactions related to this account are as follows:

Table: Deferred revenue

This table indicates LAC'sred revenue for the year ended March 31, 2012. Displayed are numbers, in thousands of dollars, forred revenue beginning-of-year balance, variances and end-of-year balance. Totals for both 2011 and 2012 are included.

(in thousands of dollars)
 Item 2012 2011
Opening balance $    946 $      427
Amounts received 754 1,547
Revenues recognized (692) (1,028)
Net closing balance $ 1,008 $      946

[Text Version: Deferred revenue]

  

6. Employee future benefits

a) Pension benefits
Library and Archives Canada'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 two percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and Library and Archives Canada contribute to the cost of the Plan. The 2011–2012 expense amounts to $8,967,312 (2010–2011 – $8,527,526), which represents approximately 1.8 (1.9 in 2010–2011) times the contributions by employees.

Library and Archives Canada'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
Library and Archives Canada 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 March 31, is as follows:

Table: Employee future benefits

This table indicates LAC's employee future benefits for the year ended March 31, 2012. Displayed are numbers, in thousands of dollars, for employee benefits beginning-of-year balance, variances and end-of-year balance. Totals for both 2011 and 2012 are included.
(in thousands of dollars)
Item  2012 2011
Accrued benefit obligation, beginning of year $ 16,540 $ 15,990
Transferred to other government department, effective
November 15, 2011 (note 11)
(349) -
Subtotal 16,191 15,990
Expense for the year 2,555 1,619
Benefits paid during the year (7,185) (1,069)
Accrued benefit obligation, end of year $ 11,561 $ 16,540

[Text Version: Employee future benefits]

7. Accounts receivable and advances

The following table presents details of Library and Archives Canada's accounts receivable and advances balances:

This table details LAC's accounts receivable and advances for the year ended March 31, 2012. The totals for both 2011 and 2012 are displayed in thousands of dollars.

(in thousands of dollars)
 Item 2012 2011
Receivables – Other government departments and agencies $ 327 $ 281
Receivables – External parties 107 109
Employee advances 9 7
Accounts receivable $ 443 $ 397

[Text Version: Accounts receivable and advances]

8. Tangible capital assets

 

Tangible capital assets: Table 1

This table indicates LAC's tangible capital assets for the year ended March 31, 2012. Displayed are numbers, in thousands of dollars, for both 2011 and 2012 costs.

(in thousands of dollars)
Costs Opening Balance Acquisitions Adjustments
(1)
Disposals and write-offs Closing Balance
Buildings 8,001 - - - 8,001
Machinery and equipment 1,021 14 (185) - 850
Computer hardware 10,845 562 (6,960) (1,443) 3,004
Computer software 15,738 49 9,441 (231) 24,997
Other equipment 30,966 208 (249) (80) 30,845
Vehicles 531 - - (69) 462
Leasehold improvements 2,058 - - (3) 2,055
Leasehold improvements in progress of construction 542 741 - - 1,283
Software under development 8,068 1,787 (9 676) - 179
Cost  $ 77,770 $ 3,361 $ (7,629) $ (1,826) $ 71,676

[Text Version: Tangible capital assets: Table 1]

 

Tangible capital assets: Table 2

This table indicates LAC's tangible capital assets for the year ended March 31, 2012. Displayed are numbers, in thousands of dollars, for both 2011 and 2012 accumulated amortizations.

(in thousands of dollars)
Accumulated Amortization Opening Balance Amortization Adjustments
(1)
Disposals and write-offs Closing Balance
Buildings 33 200 - - 233
Machinery and equipment 730 34 (55) - 709
Computer hardware 8,346 689 (4,656) (1,429) 2,950
Computer software 9,569 1,445 (221) (40) 10,753
Other equipment 17,221 985 (186) (39) 17,981
Vehicles 410 52 - (110) 352
Leasehold improvements - 294 - - 294
Accumulated amortization $ 36,309 $ 3,699 $ (5,118) $ (1,618) $ 33,272

[Text Version: Tangible capital assets: Table 2]

 

Tangible capital assets: Table 3

This table indicates LAC's tangible capital assets for the year ended March 31, 2012. Displayed are numbers, in thousands of dollars, for both 2011 and 2012 net book values.

(in thousands of dollars)
Net Book Value 2012 2011
Buildings 7,768 7,968
Machinery and equipment 141 291
Computer hardware 54 2,499
Computer software 14,244 6,169
Other equipment 12,864 13,745
Vehicles 110 121
Leasehold improvements 1,761 2,058
Leasehold improvements in progress of construction 1,283 542
Software under development 179 8,068
Net book value $ 38,404 $ 41,461

[Text Version: Tangible capital assets: Table 3]

 

(1) Adjustments include software under development of $9,676,000 that were transferred to the other categories upon completion of the assets; a transfer from Library and Archives Canada to Royal Canadian Mounted Police for computer hardware with a net book value of $15,000; a transfer, effective November 15, 2011, from Library and Archives Canada to Shared Services Canada for machinery and equipment, computer hardware and computer software with a net book value of $2,496,000 (refer to note 11 for further detail on this transfer).

 

 

9. Collections

Library and Archives Canada preserves the collective memory of the nation and of the Government of Canada and contributes to the protection of rights and the enhancement of a sense of national identity.

While the nominal valuation attributed to the collection 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, indeed, monetary value for Canadians now and for generations to come. 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

Library and Archives Canada is related, as a result of common ownership, to all Government departments, agencies and Crown corporations. Library and Archives Canada enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, during the year, Library and Archives Canada 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, Library and Archives Canada 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 Library and Archives Canada's Statement of Operations as follows:

Related party transactions: Table 1

This table indicates LAC's services provided without charge for the year ended March 31, 2012. Numbers are displayed in thousands of dollars and totals for both 2011 and 2012 are included.

(in thousands of dollars)
 Item 2012 2011
Accommodation $ 45,121 $ 42,068
Employer's contribution to the health and dental insurance plans 6,614 6,057
Workers' compensation 37 36
Total $ 51,772 $ 48,161

[Text Version: Related party transactions: Table 1]

 

The Government has structured some of its administrative activities for efficiency and 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 Library and Archives Canada's Statement of Operations since one department performs these on behalf of others without charge. Similarly, Library and Archives Canada manages records, in all media, on behalf of certain departments and government organizations across the country.

(b) Administration of programs on behalf of other government departments
Since September 2011, Library and Archives Canada coordinates and manages funds on behalf of the networks of small federal agencies. During the year, Library and Archives Canada incurred expenses of $262,761 on behalf of the network. These expenses are reflected in the financial statements of the members of the network and are not recorded in these financial statements.

(c) Other transactions with related parties
This table indicates LAC's other transactions outstanding at year-end with related parties for the year ended March 31, 2012. Numbers are displayed in thousands of dollars and totals for both 2011 and 2012 are included.

Related party transactions: Table 2

(in thousands of dollars)
 Item 2012 2011
Expenses - Other Government departments and agencies $ 12,756 $ 13,134
Revenues - Other Government departments and agencies 41 69

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

[Text Version: Related party transactions: Table 2]

11. Transfers from/to other government departments

Effective November 15, 2011, Library and Archives Canada transferred responsibility for its Email, Data Centre and Network Services to Shared Services Canada in accordance with Order-in-Council 2011-1297, including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, on November 15, 2011, Library and Archives Canada transferred the following assets and liabilities related to its Email, Data Centre and Network Services to Shared Services Canada:

Table: Transfers from/to other government departments

This table provides the details of the transfers of responsibility for Email, Data Centre and Network Services to Shared Services Canada, effective November 15, 2011. Numbers are displayed in thousands of dollars.

(in thousands of dollars)
 Item 2012
Assets
Tangible capital assets (net book value) (note 8) $ 2,496
Total assets transferred 2,496
Liabilities
Vacation pay and compensatory leave 107
Employee future benefits (note 6) 349
Total liabilities transferred 456
Adjustment to the departmental net financial position $ 2,040

[Text Version: Transfers from/to other government departments]

 

In addition, the 2011 comparative figures have been reclassified on the Statement of Operations and Departmental Net Financial Position to present the revenues and expenses of the transferred operations.

During the transition period, the Department continued to administer the transferred activities on behalf of Shared Services Canada. The administered expenses amounted to $1,964,000 for the year. These expenses are not recorded in these financial statements.

12. Segmented information

Presentation by segment is based on Library and Archives Canada'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 2. The following table presents the expenses incurred and 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:

 

13. Comparative information

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

14. Accounting changes

During 2011, amendments were made to Treasury Board Accounting Standard 1.2—Departmental and Agency Financial Statements to improve financial reporting by government departments and agencies. The amendments are effective for financial reporting of fiscal years ending March 31, 2012, and later. The significant changes to the Department's financial statements are described below. These changes have been applied retroactively, and comparative information for 2010–2011 has been restated.

Net debt (calculated as liabilities less financial assets) is now presented in the Statement of Financial Position. Accompanying this change, the Department now presents a Statement of Change in Net Debt and no longer presents a Statement of Equity.

Revenue and related accounts receivable are now presented net of non-respendable amounts in the Statement of Operations and Departmental Net Financial Position and Statement of Financial Position. The effect of this change was to increase the net cost of operations after government funding and transfers by $31,000 for 2012 ($28,000 for 2011).

Government funding and transfers, as well as the credit related to services provided without charge by other government departments, are now recognized in the Statement of Operations and Departmental Net Financial Position below as "Net cost of operations before government funding and transfers." In previous years, the Department recognized these transactions directly in the Statement of Equity of Canada. The effect of this change was to decrease the net cost of operations after government funding and transfers by $161,214,000 for 2012 ($159,827,000 for 2011).

Table: Accounting changes 

This table indicates the amendments made to comply with the new Treasury Board Accounting Standard 1.2 – Departmental and Agency Financial Statements to improve financial reporting. These changes have been applied retroactively, and comparative information for 2011 has been restated. Numbers are displayed in thousands of dollars.

(in thousands of dollars)

Item
2011
As previously stated
Effect of changes 2011
Restated
Statement of Operations and Departmental Net Financial Position:
Revenues $ 506 $ (28) $ 478
Government funding and transfers
Net cash provided by Government - 114,948 114,948
Change in Due from Consolidated Revenue Fund - (3,422) (3,422)
Services provided without charge by other government departments - 48,161 48,161
Transfer of assets and liabilities to other government departments - 140 140

[Text Version: Accounting changes]

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