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 2011-2012 is used as the opening position for the 2012-2013 planned results.

These assumptions are adopted as at February 23, 2012.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2011-12 and for 2012-13, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

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

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

1. The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
2. Implementation of new collective agreements.
3. 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 in effect for the 2012-2013 fiscal year. These accounting policies, stated below, are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Siginificant accounting policies are as follows:

1. Parliamentary authorities - the Department is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the department do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Future-oriented Statement of Operations and the Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.
2. Net Cash Provided by Government – The department operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada.  All cash received by the department is deposited to the CRF and all cash disbursements made by the department 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.
3. Amounts due from/to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Department is entitled to draw from the CRF without further parliamentary expenditure authorities to discharge its liabilities.
4. Expenses –are recorded on an accrual basis:
   • Vacation pay and compensatory leave are accrued as the benefits are earned under the 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.
5. 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.
6. Tangible capital assets - All tangible capital assets and leasehold improvements having an initial cost of $3,000 or more are recorded at their acquisition cost.
   
   Amortization of tangible 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 most of its funding through expenditure authorities provided by Parliament. Items recognized in the Future-oriented Statements of Operations and Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Department has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

a) Authorities requested

	Estimated 2012	Planned 2013
	(in thousands of dollars)
Authorities requested
Vote 105 - Program expenditures	12,419	12,421
Transfer from Treasury Board Vote 25	620	621
Transfer from Treasury Board Vote 30	739	195
Contributions to employee benefit plan	1,407	1,311
Forecast authorities available	15,185	14,548

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

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

	Estimated 2012	Planned 2013
	(in thousands of dollars)
Net cost of operations	16,455	17,305
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments	(3,034)	(3,213)
Amortization of tangible capital assets	(176)	(318)
Decrease in employee future benefits	631	181
Decrease (Increase) in vacation pay and compensatory leave	8	(6)
	13,884	13,948
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets	222	600
	222	600
Forecast current year lapse	1,079	-
Forecast authorities available	15,185	14,548

6. Accounts receivable and advances

The following table presents details of the Department’s accounts receivable and advances balances:

	Estimated 2012	Planned 2013
	(in thousands of dollars)
Receivables from other government departments and agencies	78	79
Employee advances	1	1
	79	80

7. Tangible Capital Assets

Cost (in thousands of dollars)
Capital asset class	Opening balance	Acquisitions	Disposals and write-offs	Closing Balance
Computer hardware and sofware	1,074	550	-	1,624
Furniture and equipment	359	50	-	409
Total	1,433	600	-	2,033

Accumulated amortization (in thousands of dollars)
Capital asset class	Opening balance	Amortization	Disposals and write-offs	Closing Balance
Computer hardware and sofware	637	244	-	881
Furniture and equipment	185	74	-	259
Total	822	318	-	1,140

Net book value (in thousands of dollars)
Capital asset class	2012			2013
Computer hardware and sofware	437			743
Furniture and equipment	174			150
Total	611			893

8. Accounts payable and accrued liabilities

	Estimated Results 2012	Planned Results 2013
	(in thousands of dollars)
Accounts payable to other government departments and agencies	102	35
Accounts payable to external parties	715	720
	817	755
Accrued liabilities	325	340
	1,142	1,095

9. Employee benefits

(a) Pension benefits:

The Board's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with 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 $ 956,406 in 2011-2012 and $ 942,434 in 2012-2013, representing approximately 1.9 times.

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 authorities. Information about the severance benefits, estimated as at the date of these statements, is as follows:

	Estimated Results 2012	Planned Results 2013
	(in thousands of dollars)
Accrued benefit obligation, beginning of year	1,603	972
Expense for the year	79	15
Expected benefits payments during the year	(709)	(195)
Accrued benefit obligation, end of year	972	792

10. 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, the Board has an agreement with the Public Service Staffing Tribunal related to the provision of finance and administration services. During the year, the Board received common services which were obtained without charge from other Government departments as disclosed below.

a) Common services provided without charge by other government departments

During the year the Board is forecasted to receive without charge from certain common service organizations, related to accommodation and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the Board’s future-oriented Statement of Operations as follows:

	Estimated 2012	Planned 2013
	(in thousands of dollars)
Accommodation	2,406	2,550
Employer’s contribution to the health and dental insurance plans	628	663
Total	3,034	3,213

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 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 are not included in the Board's Future-oriented Statement of Operations.

11. Segmented information

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

	2012	2013
	Total	Adjudication, mediation and compensation analysis and research	Internal services	Total
Operating Expenses
Salaries and employee benefits	9,748	7,013	2,429	9,442
Accommodation	2,406	1,702	848	2,550
Professional and special services	2,079	1,731	524	2,255
Travel	900	827	207	1,033
Machinery and equipment	352	226	527	754
Rentals	531	459	115	574
Amortization	176	79	238	318
Utilities, materials and supplies	161	3	234	237
Repairs and maintenance	52	-	172	172
Communication	50	56	59	115
Other	-	-	-	-
Total Expenses	16,455	12,097	5,353	17,450
REVENUES
Miscellaneous Revenues	-	-	145	145
Total Revenues	-	-	145	145
Net cost of operations	16,455	12,097	5,208	17,305