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Notes to Future-oriented Financial Statements

Notes to Future-oriented Financial Statements

1. Authority and Objectives

The mandate of the Public Service Labour Relations Board (the Board), established in 2005 by the enactment of Public Service Labour Relations Act and successor to the former Public Service Staff Relations Board established in 1967, is to effectively and efficiently administer the systems of collective bargaining and grievance adjudication established under the Public Service Labour Relations Act and the Parliamentary Employment and Staff Relations Act, as well as certain provisions of Part II of the Canada Labour Code concerning occupational safety and health applicable to employees in the Public Service. The Board also administers the Yukon Public Service Labour Relations Act and the Yukon's Education Labour Relations Act. The Board’s three lines of services are Adjudication, Mediation and Compensation Analysis and Research Services, which are supported by its internal services activities.

2. Significant assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the department as described in the Report on Plans and Priorities.

The main assumptions are as follows:

  1. The department's activities will remain substantially the same as for the previous year.
  2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
  3. Allowances for uncollectibility are based on historical experience. The general historical pattern is expected to continue.
  4. Estimated year end information for 2010-2011 is used as the opening position for the 2011-2012 forecasts.

These assumptions are adopted as at February 9, 2011.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2010-2011 and for 2011-2012, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

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

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

  1. The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
  2. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

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

4. Summary of Significant Accounting Policies

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

Siginificant accounting policies are as follows:

  1. Parliamentary appropriations - the Board is financed by the Government of Canada through Parliamentary appropriations. The cash accounting basis is used to recognize transactions affecting parliamentary appropriations. The future-oriented financial statements are based on accrual accounting. Consequently, items presented in the Future-oriented Statement of Operations and the Future-oriented Statement of Financial Position are not necessarily the same as those provided through appropriations from Parliament. Note 5 provides a reconciliation between the bases of reporting.
  2. Expenses – are presented on an accrual basis:
    • - Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
    • - Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans and legal services are reported as operating expenses at their estimated cost.
  3. Employee future benefits
    1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer administered by the Government of Canada. The Board's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation to the Plan. Current legislation does not require the Board to make contributions for any actuarial deficiencies of the Plan.
    2. Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
  4. Tangible capital assets - All tangible capital assets plus leasehold improvements having an initial cost of $3,000 or more are recorded at their acquisition cost. The Board does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value. Amortization of capital assets is done on a straight-line basis over the estimated useful life of the tangible capital asset as follows:
    Asset Class Amortization Period
    Furniture and equipment 5 years
    Informatics hardware and software 3 years

5. Parliamentary Appropriations

The Board receives its funding through annual Parliamentary appropriations. Items recognized in the Statement of Operations and the Statement of Financial Position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Board has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

a) Authorities requested

(in thousands of dollars) Estimated
2011
Forecast
2012
Authorities requested    
Vote 110 - Program expenditures 12,401 12,419
Transfer from Treasury Board - Vote 25 304 620
Transfer from Treasury Board - Vote 30 109 112
Contributions to employee benefit plan 1,253 1,330
Forecast authorities available 14,067 14,481

Forecast authorities requested for the year ending March 31, 2012 are the planned spending amounts presented in the 2011-12 Report on Plans and Priorities. Estimated authorities requested for the year ending March 31 2011 include amounts presented in the 2010-2011 Main Estimates and Supplementary Estimates (A), (B) and (C) and estimates of amounts to be allocated at year-end from Treasury Board central votes.

b) Reconciliation of net cost of operations to request authorities:

(in thousands of dollars) Estimated
2011
Forecast
2012
Net cost of operations 16,332 17,680
Adjustments for items affecting net cost of operations but not affecting authorities:    
Add (Less):    
Services received without charge (2,898) (3,034)
Amortization of tangible capital assets (127) (198)
(Loss) gain on disposal and write-down of tangible capital assets (649) -
Decrease (Increase) in employee severance benefit liability (110) (48)
Increase vacation pay and compensatory leave liability (62) (53)
  12,487 14,346
Adjustments for items not affecting net cost of operations but affecting appropriations    
Add (Less):    
Acquisitions of tangible capital assets 420 135
  420 135
Forecast current year lapse 1,160 -
Forecast authorities available 14,067 14,481

6. Tangible Capital Assets

Cost
(in thousands of dollars)
Capital asset class Opening Balance Acquisitions Disposal Closing Balance
Informatics Hardware and Software 995 83 - 1,078
Furniture and equipment 255 52 - 307
Total 1,250 135 - 1,385

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Accumulated amortization
(in thousands of dollars)
Capital asset class Opening Balance Acquisitions Disposal Closing Balance
Informatics Hardware and Software 530 142 - 673
Furniture and equipment 102 56 - 159
Total 633 198 - 831

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Net book value
(in thousands of dollars)
Capital asset class 2011 2012
Informatics Hardware and Software 465 405
Furniture and equipment 153 148
Total 617 554

7. Employee benefits

(a) Pension benefits: The Board's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 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 the Board contribute to the cost of the Plan. The forecast expenses are $879,795.57 in 2010-2011 and $933,792.68 in 2011-2012, representing approximately 1.9 times the contributions of employees.

The Board's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

(b) Severance benefits: The Board 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 appropriations. Information about the severance benefits, estimated as at the date of these statements, is as follows:

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  Estimated Results
2011
Forecast
2012
  (in thousands of dollars)
Accrued benefit obligation, beginning of year 1,526 1,636
Expense for the year 219 160
Expected benefits paid during the year (109) (112)
Accrued benefit obligation, end of year 1,636 1,684

8. Related party transactions

The Board is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The Board enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, theBoard has an agreement with Department Public Service Staffing Tribunal related to the provision of finance and administration services. During the year, the Board received services which were obtained without charge from other Government departments as presented below.

(a) Common services provided without charge by other government departments

During the year the department is forecasted to receive without charge from other departments, accommodation and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the department's future-oriented Statement of Operations as follows:

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  Estimated Results
2011
Forecast
2012
  (in thousands of dollars)
Accommodation 2,270 2,406
Employer’s contribution to the health and
dental insurance plans
628 628
Total 2,898 3,034

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include 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 as an expense in the department's Statement of Operations.

9. Segmented information

(in thousands of dollars)
  2011 2012
  Total Adjudication, mediation and compensation
analysis and research
Internal services Total
OPERATING EXPENSES
Salaries and employee benefits 9,439 7,150 2,412 9,562
Professional and special services 2,114 2,081 630 2,711
Accommodation 2,270 1,559 846 2,406
Transportation and telecommunications 687 813 203 1,017
Machinery and equipment 368 197 459 656
Rentals 507 452 113 565
Utilities, materials and supplies 170 4 278 282
Amortization of tangible capital assets 127 - 198 198
Repairs and maintenance 85 - 169 169
Communication 101 55 58 113
Other operating expenses 464 - - -
Total Expenses 16,332 12,311 5,368 17,680
NET COST OF OPERATIONS 16,332 12,311 5,368 17,680