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Notes to the Future-oriented Financial Statements

Notes to the Future-oriented Financial Statements

For the year ended March 31

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 (PSLRA) 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 PSLRA 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 has one strategic outcome: the resolution of labour relations issues in the federal public service and in Parliament. According to the approved Program Activity Architecture (PAA), the Future-oriented Statement of Operations was detailed by the following program activities (business lines):

Adjudication, mediation and compensation analysis and research

The Board holds hearings with respect to grievance adjudication, complaints and other types of proceedings, throughout Canada. The Board provides conciliation and arbitration services to assist parties in the renewal and negotiation of new collective agreements; mediation services to help parties work together to resolve grievances and complaints; and an interactive training session on interest-based negotiations and mediation. A compensation analysis and research function consists of delivering information on comparative rates of pay, employee earnings, conditions of employment and benefits in the public and private sectors. The Board is required by statute to provide physical and administrative support services to the National Joint Council (NJC), but plays no direct role in its operations.

Internal services

Internal services are groups of activities and resources that are administered to support the needs of programs and other corporate obligations of the Board. Internal services include only those activities and resources that apply across the Board, not those provided specifically to a program.

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 underlying the forecasts are as follows:

(a) The department's activities will remain substantially the same as for the previous year.

(b) 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.

(c) Allowances for uncollectibility are based on historical experience. The general historical pattern is expected to continue.

(d) Estimated year end information for 2012-2013 is used as the opening position for the 2013-2014 forecasts.

These assumptions are adopted as at January 23, 2013.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2012-2013 and for 2013-2014, 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:

(a) the timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense;

(b) the implementation of new collective agreements;

(c) 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

These future-oriented 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

The Board is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Board 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 Departmental Net Financial Position and in 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.

(b) Net Cash Provided by Government

The Board operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Board is deposited to the CRF and all cash disbursements made by the Board 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) Due from the CRF

Amounts due from or 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 Board is entitled to draw from the CRF without further appropriations to discharge its liabilities.

(d) Revenues

Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

(e) Expenses

Expenses are recorded on the accrual basis:

(f) Employee future benefits

(g) Accounts receivables

Receivables recorded by the Board are from other government departments. Recovery is considered certain and a provision has not been made. Accounts and loans receivable are stated at the lower of cost and net recoverable value.

(h) 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 assets as follows:

Asset Class Amortization Period
Informatics Hardware and Software 3 years
Furniture and equipment 5 years

Assets under construction 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.

5. Parliamentary Authorities

The Board receives most of its funding through annual parliamentary authorities. Items recognized in the Future-oriented Statement of Operations and Departmental Net Financial Position and the Future-oriented Statement of Financial Position in one year may be funded through parliamentary authorities 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) Reconciliation of net cost of operations to current year authorities used

(in thousands of dollars)

  Planned Results
2014
Estimated Results
2013
Net cost of operations 17,843 16,184
 
Adjustments for items affecting net cost of operations but not affecting authorities:
Add (Less):
 
Services provided without charge by other government departments (2,921) (3,086)
Decrease (increase) in employee future benefits 157 (108)
Decrease in vacation pay and compensatory leave (7) (86)
Refund of previous year expenditures - -
Amortization of tangible capital assets (661) (221)
Gain on disposal of tangible capital assets - -
  (3,432) (3,501)
Adjustments for items not affecting net cost of operations but affecting authorities:
Add (Less):
 
Acquisition of tangible capital assets 100 1,281
Variation in prepaid expenses (1) 20
  99 1,300
 
Current year authorities used 14,509 13,984

(b) Authorities provided and used

(in thousands of dollars)

  Planned
Results
2014
Estimated
Results
2013
Authorities provided:
Vote 100 - Program expenditures 13,205 13,198
Statutory authorities 1,304 1,311
Less:
Lapsed authorities - (526)
Current year authorities used 14,509 13,984

6. Accounts payable and accrued liabilities

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

(in thousands of dollars)

  Planned
Results
2014
Estimated
Results
2013
Accounts payable - other government departments
and agencies
21 171
Accounts payable - external parties 405 575
  426 746
Accrued liabilities 235 210
  661 956

7. Employee future benefits

(a) Pension benefits

The Board provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

Both the employees and the Board contribute to the cost of the Plan. The 2013-14 expense amounts to $931,304 ($935,880 in 2012-13), which represents approximately 1.8 times (1.8 times in 2012-13) the contributions by 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 salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

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.

(in thousands of dollars)

  Planned
Results
2014
Estimated
Results
2013
Accrued benefit obligation, beginning of year 808 723
Expense for the year 21 178
Benefits paid during the year (179) (93)
Accrued benefit obligation, end of year 651 808

8. Tangible capital assets

Cost
(in thousands of dollars)
Opening Balance Acquisitions Adjustments, Disposals
and
Write-Offs
Closing Balance
Informatics Hardware and Software 2,221 100 - 2,321
Furniture and equipment 587 - - 587
  2,808 100 - 2,908

Accumulated amortization
(in thousands of dollars)
Opening Balance Amortization Adjustments, Disposals
and
Write-Offs
Closing Balance
Informatics Hardware and Software 774 561 - 1,335
Furniture and equipment 273 100 - 373
  1,047 661 - 1,709

Net book value
(in thousands of dollars)
2013     2014
Informatics Hardware and Software 1,446     985
Furniture and equipment 314     214
  1,761     1,199

Adjustments include assets under construction of $0 that were transferred to the other categories upon completion of the assets.

9. Related party transactions

The Board is related as a result of common ownership to all Government 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 OGD as disclosed below:

a) Common services provided without charge by other government departments

During the year the Board received services 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 and Departmental Net Financial Position as follows:

(in thousands of dollars)

  Planned
Results
2014
Estimated
Results
2013
Accommodation 2,299 2,386
Employer's contribution to the health and
dental insurance plans
622 700
  2,921 3,086

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 and Departmental Net Financial Position.

(b) Other transactions with related parties

(in thousands of dollars)

  Planned
Results
2014
Estimated
Results
2013
Accounts receivable from other government
departments and agencies
5 5
Accounts payable to other government
departments and agencies
21 171
Expenses - Other Government
departments and agencies
1,500 1,682

10. Segmented Information

Presentation by segment is based on the Board'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 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:

(in thousands of dollars) Adjudication,
mediation and
compensation
analysis and research
Internal Services 2012 2011
Operating expenses
Salaries and employee benefits 7,097 2,385 9,482 10,065
Professional and special services 2,217 775 2,992 1,959
Accommodation 1,729 570 2,299 2,386
Transportation and telecommunications 786 230 1,016 810
Rentals 378 356 734 436
Amortization of tangible assets - 661 661 221
Machinery and equipment 90 290 380 193
Utilities, materials and supplies 149 77 226 164
Repair and maintenance 33 80 113 15
Communication 37 48 85 79
Other operating expenses - - - -
Total Operating expenses 12,516 5,471 17,988 16,329
Revenues
Other Revenues - 145 145 145
Revenues earned on behalf of Government - - - -
Total Revenues - 145 145 145
 

Net cost of operations
12,516 5,326 17,843 16,184