Copyright Board Canada
Canada

Copyright Board of Canada (116)

Statement of Management Responsibility

Responsibility for the compilation, content, and presentation of the accompanying future-oriented financial information for the years ended March 31, 2013 and 2014 rests with Copyright Board of Canada management, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at December 31, 2012 and reflect the plans described in the Report on Plans and Priorities (RPP).

 
The paper version was signed by  
Claude Majeau Deputy Head Ottawa, Canada
Gilles McDougall Senior Financial Officer Ottawa, Canada

Copyright Board of Canada
Future-oriented Statement of Financial Position (Unaudited)
As at March 31

(in dollars)    
  Estimated Results
2013
Planned Results
2014
Liabilities    
Accounts payable and accrued liabilities (note 6) $ 124,152 $ 140,813
Vacation pay and compensatory leave 155,471 155,471
Employee future benefits (note 7) 219,674 220,759
Total liabilities 499,297 517,043
   
Financial Assets    
Due from Consolidated Revenue Fund 61,240 77,901
Accounts receivable and advances (note 10) 62,912 62,912
Total gross financial assets 124,152 140,813
   
Financial assets held on behalf of Government    
Accounts receivable and advances (note 10) (61,912) (61,912)
Total financial assets held on behalf of Government (62,912) (62,912)
   
Total net financial assets 61,240 77,901
   
Depertmental net debt 438,057 439,142
   
Non-financial assets    
Tangible capital assets (note 8) 19,961 9,981
Total non-financial assets 19,961 9,981
Departmental net financial position $ (418,096) $ (429,161)
 
Contractual obligations (note 9)  
The accompanying form an integral part of these financial statements.  
 
The paper version was signed by  
Claude Majeau Deputy Head Ottawa, Canada
Gilles McDougall Senior Financial Officer Ottawa, Canada
 

Copyright Board of Canada
Future-oriented Statement of Operations and Departmental Net Financial Position (Unaudited)
For the year ended March 31

(in dollars)
Estimated Results
2013
Planned Results
2014
Expenses
Tarrif Setting and Issuance of Licences $ 2,827,671 $ 2,846,489
Internal Services 663,281 667,696
Total expenses 3,490,952 3,514,185
Net cost of operations $ 3,490,952 $ 3,514,185
Government funding and transfers
Net cash provided by Government 3,093,827 3,110,249
Change in due from the Consolidated Revenue Fund 7,080 16,661
Services provided without charge by other government departments (note 10) 361,905 376,210
Net cost of operations after government funding and transfers. 28,140 11,065
Departmental net financial position - Beginning of year (389,956) (418,096)
Departmental net financial position - End of year $ (418,096) $ (429,161)
Segmented information (Note 11)
The accompanying notes form an integral part of these financial statements.

Copyright Board of Canada
Future-oriented Statement of Change in Departmental Net Debt (Unaudited)
For the year ended March 31

(in dollars)
Estimated Results
2013
Planned Results
2014
Net cost of operations after government funding and transfers $ 28,140 $ 11,065
Change due to tangible capital assets
Amortization of tangible capital assets (11,039) (9,980)
Total change due to tangible capital assets (11,039) (9,980)
Net increase (decrease) in departmental net debt 17,101 1,085
Departmental net debt - Beginning of year 420,956 438,057
Departmental net debt - End of year $ 438,057 $ 439,142
The accompanying notes form an integral part of these financial statements.

Copyright Board of Canada
Future-oriented Statement of Cash Flows (Unaudited)
For the year ended March 31

(in dollars)
Estimated Results
2013
Planned Results
2014
Operating activities
Net cost of operations $ 3,490,952 $ 3,514,185
Non cash items:
Services provided without charge (note 10) (361,905) (376,210)
Amortization of tangible capital assets (11,039) (9,980)
Variations in Statement of Financial Position:
Decrease (increase) in accounts payable and accrued liabilities (7,080) (16,661)
Decrease in future employee benefits (17,101) (1,085)
Cash used in operating activities $ 3,093,827 $ 3,110,249
Net cash provided by Government of Canada $ 3,093,827 $ 3,110,249
The accompanying notes form an integral part of these financial statements.

Copyright Board of Canada
Notes to Future-oriented Financial Statements (Unaudited)
At March 31

1 - Authority and Objectives         

The Copyright Board of Canada is an independent administrative agency which has been conferred department status for purposes of the Financial Administration Act. Its mandate stems from the Copyright Act.

The Copyright Board of Canada plays a major role in the collective administration of copyright, particularly where the public performance and the communication to the public, by telecommunication, of musical works, as well as the retransmission of distant radio and television signals are concerned. The Copyright Board of Canada plays a surveillance role in three ways with respect to collective societies which administer very large repertoires of work created by a multitude of originators both in Canada and in other countries: as an economic regulatory body, by approving tariff proposals by the various copyright collective societies; as an arbitrator in private disputes; and as an arbitrator of the public interest.

The Copyright Board of Canada's principal mandate is to set royalties which are fair and reasonable for both copyright owners and the users of copyright-protected works, as well as issuing non-exclusive licences authorizing the fully legal use of works when the copyright owner cannot be located.

The Copyright Board of Canada reports annually to Parliament through the Minister of Industry.

2 - Methodology and Significant Assumptions

These future-oriented statements have been prepared on the basis of the government priorities and the plans of the department as described in the RPP.

The main assumptions are as follows:

  • the Copyright Board of Canada's activities will remain substantially the same as for the previous year;
  • expenses, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue;
  • allowances are based on historical experience and the most up-to-date information possible;
  • estimated year end information for 2012-13 is used as the opening position for 2013-14 forecasts.

These assumptions are adopted as at December 31, 2012.

3 - Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for 2012-13 and for 2013-14, actual results achieved are likely to vary from the forecast information presented, and this variation could be material.

In preparing these future-oriented financial statements the Copyright Board of Canada 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:

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

Once the RPP is presented, the Copyright Board of Canada 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 2012-13 fiscal year. These accounting policies, stated below, 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:

  1. Parliamentary appropriations

    The Copyright Board of Canada is financed by the Government of Canada through Parliamentary appropriations. Financial reporting of authorities provided to the Copyright Board of 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 Future-oriented Statement of Operations and Departmental Net Financial Position and the Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note five provides a high-level reconciliation between the two bases of reporting.

  2. Net Cash Provided by Government

    The Copyright Board of Canada 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 Copyright Board of 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.

  3. Amounts due from/to the CRF

    The amounts 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 Copyright Board of Canada is entitled to draw from the CRF without further parliamentary expenditure authorities to discharge its liabilities.

  4. Expenses

    Vacation pay and compensatory leave are accrued as the benefits earned by employees under the respective terms of employment.

    Services provided without charge by other government departments for accommodation and the employer's contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

  5. Employee future benefits

    Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The Copyright Board of Canada's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Copyright Board of 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.

    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.

  6. Account receivables

    These accounts are stated at the lower of cost and net recoverable value.

  7. Tangible capital assets

    All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. The Copyright Board of Canada does not capitalize intangibles; works of art and historical treasures that have cultural, aesthetic or historical value; assets located on Indian Reserves; and museum collections.

    Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the assets as follows:

    Asset class   Amortization period
    Machinery and Equipment   10 years
    Computer Hardware   3 to 5 years


  8. Measurement uncertainty

    The preparation of these future-oriented financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the future-oriented financial statements. At the time of preparation of these future-oriented statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are 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 future-oriented financial statements in the year they become known.

5 - Parliamentary Authorities

The Copyright Board of Canada 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 appropriations in prior, current or future years. Accordingly, the Copyright Board of 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 the net cost of operations to requested authorities

(in dollars)
Estimated Results
2013
Planned Results
2014
Net cost of operations $ 3,490,952 $ 3,514,185
Adjustments for items affecting net cost of operations but not affecting appropriations
Add (Less):
Services provided without charge (Note 10) (361,905) (376,210)
Amortization of tangible capital assets (Note 8) (11,039) (9,980)
Forecast authorities available $ 3,118,008 $ 3,127,995

b) Authorities requested

(in dollars)
Estimated Results
2013
Planned Results
2014
Budgetary authorities
Vote 45 - Operating expenditures $ 2,815,245 $ 2,826,682
Statuory Amounts 302,763 301,313
Forecast authorities available $ 3,118,008 $ 3,127,995

6 - Accounts Payable and Accrued Liabilities

(in dollars) Estimated Results
2013
Planned Results
2014
Accounts payable to external parties $ 107,655 $ 107,655
Accrued salaries and wages 16,497 33,158
$ 124,152 $ 140,813

7 - Employee Benefits

  1. Pension benefits

    The Copyright Board of 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/Quebec Pension Plans benefits and they are indexed to inflation.

    Both the employees and the Copyright Board of Canada contribute to the cost of the Plan. The 2013-14 forecasted expense amounts to $271,881 (same amount forecasted in 2012-13). These amounts represent approximately 1.8 times the contributions of employees.

    The Copyright Board of 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.

  2. Severance benefits

    The Copyright Board of Canada 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 liability has been forecasted using historical trend data.

    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 dollars) Estimated Results
    2013
    Planned Results
    2014
    Accrued benefit obligation -
    Beginning of year $ 202,573 $ 219,674
    Expense for the year 33,660 35,465
    Benefits paid during the year (16,559) (34,380)
    Accrued benefit obligation - $ 219,674 $ 220,759
    End of year

8 - Tangible Capital Assets

(in dollars)
Cost Accumulated amortization 2014 2013
Capital asset class Opening balance Closing Balance Opening balance Amortization Closing Balance Net book value Net book value
Machinery and equipment 43,536 43,536 43,536 - 43,536 - -
Computer Hardware 115,291 115,291 95,330 9,980 105,310 9,981 19,961
Total $ 158,827 $ 158,827 $ 138,866 $ 9,980 $ 148,846 $ 9,981 $ 19,961

9 - Contractual Obligations

The nature of the Copyright Board's activities can result in some large multi-year contracts and obligations whereby the Copyright Board will be committed to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in dollars) 2014 2015 2016 2017 2018 and thereafter Total
Goods and services $ 58,526 $ 6,794 $ 718 $ - $ - $ 66,038
$ 58,526 $ 6,794 $ 718 $ - $ - $ 66,038

10 - Related Party Transactions

The Copyright Board of Canada is related as a result of common ownership to all government departments, agencies and Crown corporations. The Copyright Board of Canada enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Copyright Board of Canada is forecasted to receive services, which will be obtained without charge from other government departments as disclosed below.

  1. Common services provided without charge by other government departments

    During the year the Copyright Board of Canada receives 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 Copyright Board of Canada Future-oriented Statement of Operations and Departmental Net Financial Position as follows:

    (in dollars) Estimated Results
    2013
    Planned Results
    2014
    Accommodation $ 240,246 $ 253,950
    Employer's contribution to the insurance plans 121,659 122,260
    Total $ 361,905 $ 376,210


    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 of Canada are not included in the Copyright Board of Canada's Future-oriented Statement of Operations and Departmental Net Financial Position.

  2. Other transactions with related parties

    (in dollars) Estimated Results
    2013
    Planned Results
    2014
    Receivables from other Government departments $ 62,912 $ 62,912
    Expenses - Other Government departments and agencies 908,515 914,562


11 - Segmented Information

Presentation by segment is based on the Copyright Board of 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 four. The following table presents the forecasted expenses incurred and for the main program activities, by major object of expenses. The segment results for the period are as follows:

2014
(in dollars) 2013 Total Tarrif Setting and Issuance of Licences Internal Services Total
Operating Expenses
Salaries and employee benefits $ 2,144,667 $ 1,745,757 $ 409,498 $ 2,155,255
Professional and special services 594,680 467,704 109,708 577,412
Accommodation 240,246 205,700 48,251 253,951
Travel 191,689 161,324 37,842 199,166
Information services 75,255 68,676 16,109 84,785
Rental 90,193 67,284 15,783 83,067
Telecommunication services 49,577 44,263 10,383 54,646
utilities, materials and supplies 49,889 42,749 10,028 52,777
Furniture and Furnishings 9,380 3,799 891 4,690
Informatics equipment and software 13,695 14,217 3,335 17,552
Repair and maintenance 1,851 3,688 865 4,553
Amortization 11,039 8,084 1,896 9,980
Postage and freight 13,282 9,730 2,282 12,012
Other 5,509 3,514 825 4,339
Total operating expenses 3,490,952 2,846,489 667,696 3,514,185
Net cost of operations $ 3,490,952 $ 2,846,489 $ 667,696 $ 3,514,185