Financial Statements 2014-2015

Financial Statements For the Year Ended March 31, 2015

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, 2015, and all information contained in these statements rests with 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.

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, 2015, in accordance with the Treasury Board Policy on Internal Control, and the action plan are summarized in the annex.

The financial statements of LAC have not been audited.


 

_________________________________
Guy Berthiaume
Librarian and Archivist of Canada
Gatineau, QC
August 24, 2015

 


 

_________________________________
Hervé Déry
Assistant Deputy Minister, Corporate Services, and Chief Financial Officer
Gatineau, QC
August 24, 2015  

 

 

[1]
Statement of Financial Position (Unaudited)
As at March 31

(in thousands of dollars)

2015

2014


Liabilities

 

Accounts payable and accrued liabilities (note 4)

 $         10,749

 

 $          10,536

 

Vacation pay and compensatory leave

2,787

 

3,049

 

Deferred revenue (note 5)

863

 

483

 

Employee future benefits (note 6)

6,064

 

4,309

Total net liabilities

20,463

 

18,377


Financial assets

 

 

 

Due from Consolidated Revenue Fund

11,167

 

10,411

 

Accounts receivable and advances (note 7)

491

 

881

Total net financial assets

11,658

 

11,292


 Departmental net debt 

8,805

 

7,085


 Non-financial assets

 

 

 

 

Tangible capital assets (note 8)

41,799

 

51,150

 

Collections (note 9)

1

 

1

Total non-financial assets

41,800

 

51,151


Departmental net financial position

$          32,995

 

$         44,066

 [Text version: Figure 1]

 

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


 

_________________________________
Guy Berthiaume
Librarian and Archivist of Canada
Gatineau, QC
August 24, 2015   

 


 

_________________________________
Hervé Déry
Assistant Deputy Minister, Corporate Services, and Chief Financial Officer
Gatineau, QC
August 24, 2015  

 

 

[2]
Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31

(in thousands of dollars)

2015

 

2015

2014

 

 

Planned Results

 

Expenses

 

 

 

 

 

Development of regulatory instruments and recordkeeping tools

$     4,339


$      4,411


$        3,225

 

Collaboration in the management of government records

19,726

 

20,917

 

21,061

 

Documentation of the Canadian society

17,090

 

16,703

 

19,428

 

Stewardship of continuing memory

50,703

 

49,688

 

40,284

 

Access to documentary heritage

34,887

 

40,671

 

35,704

 

Internal services

23,868

 

28,074

 

26,663

Total expenses

150,431

 

160,464

 

146,365


Revenues

 

 

 

 

 

 

Sales of goods and information products

220

 

139

 

226

 

Gain on disposal of non-capital assets

125

 

23

 

112

 

Gain on disposal of tangible capital assets

-

 

9

 

19

 

Miscellaneous revenues

75

 

2,283

 

83

 

Revenues earned on behalf of Government

(70)

 

(105)

 

(80)

Total revenues

350

 

2,349

 

360


Net cost of operations before government funding and transfers

150,081

 

158,115

 

146,005


Government funding and transfers

 

 

 

 

 

 

Net cash provided by the Government

 

 

101,007

 

97,319

 

Change in due from Consolidated Revenue Fund

 

 

756

 

2,965

 

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

 

 

47,858

 

50,435

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

(2,577)

 

-

 

Other transfers to other government departments

 

 

-

 

(57)

Net cost of operations after government funding and transfers

 

 

11,071

 

(4,657)


Departmental net financial position—beginning of year

 

 

44,066

 

39,409

Departmental net financial position—end of year

 

 

$    32,995

 

$       44,066

Segmented information (note 12)
The accompanying notes form an integral part of these financial statements.
 

[3]
Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31

(in thousands of dollars)

 

2015

 

2014

 

 

 

 

Net cost of operations after government funding and transfers

$   11,071

 

$  (4,657)


Change due to tangible capital assets (note 8)

 

 

 

 

Acquisition of tangible capital assets

2,737

 

4,288

 

Amortization of tangible capital assets

(3,537)

 

(3,107)

 

Proceeds from disposal of tangible capital assets

(10)

 

(19)

 

Net (loss) gain on disposal of tangible capital assets including adjustments

(8,541)

 

(665)

Total change due to tangible capital assets

(9,351)

 

497


Net increase (decrease) in departmental net debt

1,720

 

(4,160)


Departmental net debt—beginning of year

7,085

 

11,245

Departmental net debt—end of year

$   8,805

 

$    7,085

 [Text version: Figure 3]

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

 

[4]
Statement of Cash Flows (Unaudited)
For the Year Ended March 31

(in thousands of dollars)

2015

2014

Operating activities

 

 

 

Net cost of operations before government funding and transfers

 $     158,115


$   146,005


Non-cash items:

 

 

 

 

 

Amortization of tangible capital assets (note 8)

(3,537)

 

(3,107)

 

 

Gain (loss) on disposal of tangible capital assets

(8,541)

 

(665)

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

(47,858)

 

(50,435)

 

 

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

2,577

 

-


 

Variations in Statement of Financial Position:

 

 

 

 

 

Increase (decrease) in accounts receivable and advances

(390)

 

35

 

 

Decrease (increase) in liabilities

(2,086)

 

1,160

 

 

Other transfers to other government departments

-

 

57

Cash used in operating activities

98,280

 

93,050

       

Capital investing activities

 

 

 

 

Acquisitions of tangible capital assets (note 8)

2,737

 

4,288

 

Proceeds from disposal of tangible capital assets

(10)

 

(19)

Cash used in capital investing activities

2,727

 

4,269


Net cash provided by Government of Canada

$      101,007

 

$   97,319

 [Text version: Figure 4]

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 regulatory instruments and recordkeeping tools: LAC, working collaboratively with central agencies, federal departments and agencies, and other stakeholders, 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 through the approval and issuance of records disposition authorities and the development of  tools, guides and guidelines that support the implementation of sound recordkeeping practices. Furthermore, LAC provides input on information management policy by chairing and participating in various intergovernmental committees.

ii) Collaboration in the management of government records: LAC offers advice, support, services and training to federal institutions, to help them to manage their information effectively and to comply with the requirements of the Directive on Recordkeeping. LAC carries out these functions by providing direction to national institutions; presenting papers at conferences; symposiums and forums; and developing and delivering training and awareness sessions. LAC also issues disposition authorities that allows the destruction, preservation, disposal or transfer of government records.

In addition, LAC works with the federal library community to ensure access to relevant information and thus support the work of decision makers. LAC conducts research on topics of interest, coordinates the procurement of electronic information resources for federal libraries through the Federal Libraries Consortium, and manages relationships with federal library partners. Lastly, LAC contributes significantly to providing access to government information resources for which it has responsibility under the Access to Information Act.

iii) Documentation of the Canadian society: One of the pillars of the mandate of LAC is to ensure that Canada’s continuing memory reflects Canadian society and is of interest to current and future generations. LAC holdings consist of published and unpublished materials in a variety of formats, both analogue and digital. The majority of LAC’s acquisitions take place within a legislative framework. For example, Canadian publishers must deposit published material with LAC in accordance with the Legal Deposit of Publications Regulations. In addition, federal information resources of enduring value must be transferred to LAC once their retention period has expired in accordance with the Library and Archives of Canada Act. LAC also builds its holdings by acquiring on a discretionary basis material that is as representative as possible of Canadian society. LAC works with the documentary heritage community to promote information sharing and enhance external collaboration on common issues. The diversity of experience and expertise within this network will strengthen the documentary heritage community as a whole and promote the development and implementation of required solutions in a rapidly changing environment.

iv) Stewardship of continuing memory: LAC manages a vast collection of materials in a wide range of formats, both digital and analogue, to ensure their long-term preservation and accessibility for the benefit of all Canadians. Traditional and cutting-edge archival and preservation techniques ensure the long-term availability of both analogue and digital formats. The stewardship 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 stewardship activities: those related to the physical management of the collection, as storage; 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) Access to documentary heritage: Access to documentary heritage aims to make Canadian information resources known and accessible 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 heritage and increase its use among the general public. By providing access to the documentary heritage for which it or other organizations are responsible, LAC contributes to the creation of new knowledge that will increase the 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. 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 a 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
LAC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to LAC 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 “Expenses” and “Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2014-15 Report on Plans and Priorities. Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2014-15 Report on Plans and Priorities.

(b) Net cash provided by the Government
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 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
The collections of LAC 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

 

2015

2014

 

(in thousands of dollars)

Net cost of operations before government funding and transfers

$      158,115

 

$      146,005


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

 

Services provided without charge by other government departments

(47,858)

(50,435)

 

Amortization of tangible capital assets

(3,537)

(3,107)

 

Decrease (increase) in obligation for termination benefits

55

 

798

 

Decrease (increase) in employee future benefits

(1,755)

3,019

 

Decrease (increase) in vacation pay and compensatory leave

262

137

 

Bad debts

-

 

(3)

 

Refund of previous year's expenditures

113

659

 

Revenue not available for spending during the fiscal year

436

127

 

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

(8,541)

 

(665)

 

Total items affecting net cost of operations but not affecting authorities

(60,825)

(49,470)

 

 

 

 

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

 

 

Acquisitions of tangible capital assets

2,737

4,288

 

Proceeds from disposal of tangible capital assets

(10)

 

(19)

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

2,577

 

-

 

Total items not affecting net cost of operations but affecting authorities

5,304

 

4,269

Current year authorities used

$      102,594


$      100,804

 [Text version: Figure 6]

 

[7]
(b) Authorities provided and used

 

2015

2014

Authorities provided:

(in thousands of dollars)

Vote 55—Operating expenditures

$      94,206

$      91,271

Vote 60—Capital expenditures

-

3,943

Statutory amounts

11,152

11,086

 

 

 

 

Less:

Authorities available for future years

(33)

 

(132)

Lapsed: Operating

(767)

(229)

Lapsed: Capital

-

(298)

Lapsed: Frozen allotments

(1,964)

(4,837)

Current year authorities used

$   102,594

 

$   100,804

 [Text version: Figure 7]

[8]
4. Accounts payable and accrued liabilities

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

 

2015

2014

 

(in thousands of dollars)

Accounts payable—Other government departments and agencies

$     2,054

$    1,052

Accounts payable—External parties

8,584

8,680

Total accounts payable 

         10,638

         9,732

Accrued liabilities

111

804

Total accounts payable and accrued liabilities

 $     10,749

$    10,536

 [Text version: Figure 8]

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, LAC has recorded, at March 31, 2014, an obligation for termination benefits for an amount of $55,000 and no obligation has been recorded at March 31, 2015 as part of accrued liabilities to reflect the estimated workforce adjustment costs.

[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:

 

 

2015

2014

 

(in thousands of dollars)

Opening balance

$      483


$    509

Amounts received

1,061

 

560

Revenues recognized

(681)

 

(586)

Net closing balance

$     863

 

$    483

 [Text version: Figure 9]

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 EAP 2012, employee contributors have been divided into two groups—Group 1 relates to existing plan members as of December 31, 2012, and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2014–2015 expense amounts to $7,510,969 ($7,608,091 in 2013–2014). For Group 1 members, the expense represents approximately 1.41 times (1.6 times in 2013–2014) the employee contributions and, for Group 2 members, approximately 1.39 times (1.5 times in 2013–2014) 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.
 
(b) Severance benefits
LAC 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.
 
[10]
Information about the severance benefits, measured as at March 31, is as follows:
 

 

2015

2014

 

(in thousands of dollars)

Accrued benefit obligation, beginning of year

 $     4,309

 

 $      7,328

Expense for the year

3,274

 

1,997

Benefits paid during the year

(1,519)

 

(5,016)

Accrued benefit obligation, end of year

 $      6,064

 

 $     4,309

 [Text version: Figure 10]

[11]
7. Accounts receivable and advances

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

 

2015

2014

 

(in thousands of dollars)

Receivables—Other government departments and agencies

$    413

 

$   805

Receivables—External parties

73

 

71

Employee advances

5

 

5

Accounts receivable

$     491

 

$    881

 [Text version: Figure 11]

[12]
8. Tangible capital assets

Cost
(in thousands of dollars)

Opening Balance

Acquisitions

Adjustments
 (1)

Disposals and
Write-offs

 

Closing
Balance

Buildings

8,020

-

-

-

8,020

Machinery and equipment

931

-

-

(39)

892

Computer hardware

3,877

74

-

-

3,951

Computer software

23,801

-

588

(9,036)

15,353

Other equipment

35,278

223

-

(51)

35,450

Vehicles

432

334

-

(68)

698

Leasehold improvements

15,264

-

3,188

(1)

18,451

Leasehold improvements in progress of construction

1,172

2,016

(3,188)

-

-

Software under development

667

 

90

 

(588)

 

-

 

169

 

$   89,442

 

$     2,737

 

$               -

 

 $  (9,195)

 

$      82,984  

 

 

Accumulated Amortization  
(in thousands of dollars)

Opening Balance

Amortization

Adjustments
 (1)

Disposals and
Write-offs

Closing
Balance

Buildings

633

200


-

 

-

 

833

Machinery and equipment

735

34

-

 

(39)

 

730

Computer hardware

3,422

92

4

 

-

 

3,518

Computer software

13,702

986

(4)

 

(536)

 

14,148

Other equipment

18,287

1,419

-

 

-

 

19,706

Vehicles

376

34

-

 

(69)

 

341

Leasehold improvements

1,137

 

772

 

-

 

-

 

1,909

 

 $   38,292

 

$    3,537

 

$           -

 

$    (644)

 

 $      41,185

 

 

 

 

 

 

 

Net Book Value
(in thousands of dollars)

2015

 

2014

 

 

Buildings

 

7,187

 

7,387

 

 

Machinery and equipment

 

162

 

196

 

 

Computer hardware

 

433

 

455

 

 

Computer software

 

1,205

 

10,099

 

 

Other equipment

 

15,744

 

16,991

 

 

Vehicles

 

357

 

56

 

 

Leasehold improvements

 

16,542

 

14,127

 

 

Leasehold improvements in progress of construction

 

-

 

1,172

 

 

Software under development

 

169

 

667

 

 

 

$   41,799

 

$  51,150

 

 

 [Text version: Figure 12]

  1. Adjustments include software under development of $588,055 and leasehold improvements in progress of construction of $3,187,729 that were transferred to other categories upon completion of the assets and a reclassification of $4,068 to record the accumulated amortization of an asset under the appropriate category.

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, 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:

 

 

 

2015

2014

 

 

(in thousands of dollars)

Accommodation

$    41,883

 

$      44,216

Employer's contribution to the health and dental insurance plans

5,966

 

6,203

Workers' compensation

9

 

16

 

 

$    47,858

 

$      50,435

 [Text version: Figure 13]

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General, are not included in 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

 

 

2015

2014

 

 

(in thousands of dollars)

Expenses—Other government departments and agencies

 $       14,561

 

 $      10,733

Revenues—Other government departments and agencies

2,086

 

26

 [Text version: Figure 14]

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 2014-15. As a result, a one-time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay processes. This change to the pay system had no impact on the expenses of LAC. 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 Works and Government Services Canada, who is responsible for the administration of the Government pay system.

12. 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. See the segment results for the period.

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