Financial Statements 2012-2013

Canadian Space Agency

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, 2013, and all information contained in these statements rests with the management of the Canadian Space Agency. These financial statements have been prepared by management using the Government's accounting standards, which are based on the Government's accounting policies and Canadian accounting standards stated in the Public Sector Accounting Handbook.

Some of the information in the financial statements 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 the Agency's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Agency'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 the Agency; 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 effectiveness of associated key controls, and to make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2013 was completed in accordance with the Treasury Board Policy on Internal Control. The results of this assessment and the action plans are summarized in the annex.

The effectiveness and adequacy of the Agency's system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of the Agency's operations, and by the Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the Deputy Head of the Agency.

The financial statements of the Canadian Space Agency have not been audited.

The original version was signed by Gilles Leclerc, Acting President, in Longueuil, Quebec, Canada, on July 23, 2013.

The original version was signed by Marie-Claude Guérard, CPA, CGA, Chief Financial Officer, in Longueuil, Quebec, Canada, on July 23, 2013.

Statement of Financial Position (Unaudited)

As at March 31
(in thousands of dollars)
2013
$
2012
$
Liabilities
Accounts payable and accrued liabilities (note 4) 106,236 97,020
Vacation pay and compensatory leave 5,028 4,437
Deferred revenue (note 5) 9 76
Severance benefits (note 6(b)) 5,365 11,961
Other liabilities (note 7) 502 8,454
Total net liabilities 117,140 121,948
Assets
Financial assets
Due from the Consolidated Revenue Fund 82,981 84,856
Accounts receivable and advances (note 8) 2,585 2,056
Total gross financial assets 85,566 86,912
Financial assets held on behalf of Government
Accounts receivable and advances (note 8) (1,121) (826)
Total financial assets held on behalf of Government (1,121) (826)
Total net financial assets 84,445 86,086
Agency's net debt 32,695 35,862
Non-financial assets
Prepaid expenses (note 9) 265,951 315,288
Tangible capital assets (note 10) 967,494 932,180
Other receivables (note 11) 8,194 8,224
Total non-financial assets 1,241,639 1,255,692
Agency's net financial position 1,208,944 1,219,830

Contractual obligations (note 12)

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

The original version was signed by Gilles Leclerc, Acting President, in Longueuil, Quebec, Canada, on July 23, 2013.

The original version was signed by Marie-Claude Guérard, CPA, CGA, Chief Financial Officer, in Longueuil, Quebec, Canada, on July 23, 2013.

Statement of Operations and the Agency's Net Financial Position (Unaudited)

For the Year Ended March 31
(in thousands of dollars)
2013
$
Planned
2013
$
2012
$
Expenses
Space Exploration 170,143 144,395 242,498
Space Data, Information and Services 82,746 87,840 96,309
Future Canadian Space Capacity 65,459 56,702 74,307
Internal Services 45,728 45,608 54,592
Expenses incurred on behalf of Government - - (7)
Total Expenses 364,076 334,545 467,699
Revenues
Sale of goods and services 4,000 2,193 5,311
Sale of rights and privileges 1,044 1,011 715
Location and use of public property 265 305 282
Other revenues - 134 21,063
Revenues earned on behalf of Government (5,309) (2,680) (5,977)
Total Revenues - 963 21,394
Net cost from continuing operations 364,076 333,582 446,305
Transferred operations (note 14)
Expenses - - 3,680
Net cost of transferred operations - - 3,680
Net cost of operations before government funding and transfers 364,076 333,582 449,985
Government funding and transfers
Net cash provided by Government 379,718 318,003 409,150
Change in due from Consolidated Revenue Fund 1,112 (1,875) (8,041)
Services provided without charge by other government departments (note 13(a)) 5,753 6,568 6,292
Transfer of assets and liabilities to another government department (note 14) - - (1,437)
Transfer of capital assets to another government department - - (35)
Total Government funding and transfers 386,583 322,696 405,929
Net cost of operations after government funding and transfers (22,507) 10,886 44,056
Agency's net financial position - Beginning of year 1,211,025 1,219,830 1,263,886
Agency's net financial position - End of year 1,233,532 1,208,944 1,219,830

Segmented information (note 15)

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

Statement of Change in the Agency's Net Debt (Unaudited)

For the Year Ended March 31
(in thousands of dollars)
2013
$
Planned
2013
$
2012
$
Net cost of operations after government funding and transfers (22,507) 10,886 44,056
Change due to tangible capital assets
Acquisition of tangible capital assets (note 10) 180,535 114,881 106,581
Amortization of tangible capital assets (note 10) (108,038) (74,863) (98,809)
Proceeds from disposal of tangible capital assets - - (3)
Loss on disposal, write-offs and write-downs of tangible capital assets - (4,704) (14,252)
Transfer to another government department (note 14) - - (2,028)
Transfer of capital assets to another government department - - (35)
Total change due to tangible capital assets 72,497 35,314 (8,546)
Change due to prepaid expenses (49,672) (49,337) (49,624)
Change due to other receivables - (30) 8,224
Net increase (decrease) in the Agency's net debt 318 (3,167) (5,890)
Agency's net debt - Beginning of year 36,978 35,862 41,752
Agency's net debt - End of year 37,296 32,695 35,862

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

Statement of Cash Flows (Unaudited)

For the Year Ended March 31
(in thousands of dollars)
2013
$
2012
$
Operating Activities
Net cost of operations before government funding and transfers 333,582 449,985
Non-cash items:
Amortization of tangible capital assets (note 10) (74,863) (98,809)
Loss on disposal, write-offs and write-downs of tangible capital assets (4,704) (14,252)
Services provided without charge by other government departments (note 13(a)) (6,568) (6,292)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances 234 (902)
Decrease in prepaid expenses (49,337) (49,624)
Increase (decrease) in other receivables (30) 8,224
Decrease (increase) in accounts payable and accrued liabilities (9,216) 765
Decrease (increase) in deferred revenue 67 (67)
Increase in vacation pay and compensatory leave (591) (8)
Decrease in severance benefits 6,596 1,111
Decrease in other liabilities 7,952 13,032
Transfer of prepaids and liabilities to another government department (note 14) - (591)
Cash used in operating activities 203,122 302,572
Capital Investing Activities
Acquisition of tangible capital assets (note 10) 114,881 106,581
Proceeds from disposal of capital assets - (3)
Cash used in capital investing activities 114,881 106,578
Net cash provided by Government of Canada 318,003 409,150

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

Notes to the Financial Statements (Unaudited)

For the Year Ended March 31

1. Authority and Objectives

The Canadian Space Agency "Agency" was decreed a "Department" on March 1st, 1989 under the Financial Administration Act , Section 2, paragraph (b).

For its part, the Canadian Space Agency Act, on legal notice of the Prime Minister, and under Section 29 of the Act to establish the Canadian Space Agency and to provide for other matters in relation to space, was sanctioned on May 10, 1990 under Chapter 13 of the Laws of Canada (L.C. 1990). His excellence, the Governor-in-Council, had fixed the effective date of this Act at December 14, 1990. The objectives of the Canadian Space Program (CSP) are to ensure the development and application of space science and technology to meet Canadian needs and to ensure the development of an international competitive space industry in Canada.

According to the approved Program Alignment Architecture (PAA), the Statement of Operations and the Agency's Net Financial Position is detailed by the following Programs (Business Lines):

Space Data, Information and Services

This Program includes the provision of space-based solutions (data, information and services) and the progression of their utilization. It also serves to install and run ground infrastructure that processes the data and operates satellites. This Program utilizes space-based solutions to assist Government of Canada (GoC) organizations in delivering growing, diversified or cost-effective programs and services within their mandate, which is related to key national priorities, such as sovereignty, defence, safety and security, resource management, environmental monitoring and the North. It also provides academia with data required to perform its own research.

Space Exploration

This Program provides valuable Canadian science, signature technologies and qualified astronauts to international space exploration endeavours. This Program contributes to the Government of Canada's Science and Technology Strategy. It fosters the generation of knowledge as well as technological spin-offs that contribute to a higher quality of life for Canadians. It generates excitement within the population in general and contributes to nation-building. This Program appeals to the science and technology communities. It is targeted mostly towards Canadian academia and international space exploration partnerships. Canadian industry also benefits from the work generated within this Program.

Future Canadian Space Capacity

This Program attracts, sustains and enhances the nation's critical mass of Canadian space specialists, fosters Canadian space innovation and know-how, and preserves the nation's space-related facilities capability. In doing so, it encourages private-public collaboration that requires a concerted approach to future space missions. This Program secures the nation's strategic and ongoing presence in space in the future and to preserve Canada's capability to deliver internationally renowned space assets for future generations. It is targeted at Canadian academia, industry and youth, as well as users of Canadian space solutions (Government of Canada (GoC) organizations) and international partners.

Internal Services

In accordance with the Management Accountability Framework, this Program serves to implement the government's commitment to modern Public Service management. Internal Services include only those activities and resources that apply across an organization in the areas of Governance and Management Support which includes Management and Oversight Services, Communications Services, and Legal Services; Resource Management which includes Human Resources Management Services, Financial Management Services, Information Management Services and Information Technology Services; and Asset Management which includes Real Property Services, Material Services and Acquisition Services.

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

The Agency is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Agency 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 Financial Position and the Statement of Operations and Agency Net Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the two bases of reporting. The planned results amounts in the Statement of Operations and Agency Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2012-2013 Report on Plans and Priorities.

The future-oriented financial statements for 2012-2013 have been restated to reflect the revenue net of non-respendable amounts. This restatement resulted in an increase of $5.3 million in net costs of operations before government funding and transfers. In addition, the future-oriented financial statements have also been reclassified to conform to the current year presentation.

(b) Net cash provided by Government

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

Amounts due from 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 Agency is entitled to draw from the CRF without further authorities to discharge its liabilities.

(d) Revenues

  • Revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes places.
  • Funds that have been received are recorded as deferred revenue, provided the Agency has an obligation to other parties for the provision of goods, services or the use of assets in the future (note 5).
  • Revenues that are non-respendable are not available to discharge the Agency's liabilities. While the deputy head is expected to maintain accounting control, he has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross revenues.

(e) Expenses

Expenses are recorded on the accrual basis:

  • Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or entitlements for the transfer payment program.
  • Vacation pay and compensatory leave are accrued as benefits are earned by employees under their respective terms of employment.
  • Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans and legal services are recorded as operating expenses at their estimated cost.

(f) Employee future benefits (note 6)

  1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Agency's contributions to the Plan are charged to expenses in the year incurred and represent the Agency's total obligation to the Plan. The Agency's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recongnized in the financial statements of the Government of Canada, as the Plan's sponsor.
  2. 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 receivables and advances

Accounts receivables and advances are stated at the lower of cost and net recoverable value. A provision is recorded for receivables where recovery is considered uncertain.

(h) 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 "others" on the Statement of Operations and the Agency's Net Financial Position.

(i) 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. The Agency 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.

Asset class Amortization period
Buildings, works and infrastructure 15-40 years
Material and equipment 10-20 years
Computer material 5-10 years
Computer software 3 years
Other equipment including furniture 2-30 years
Motor vehicles 5 years
Other vehicles 10 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.

The space assets are not considered operational until they have attained orbit or their expected trajectory or the landing date on the International Space Station.

(j) 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 the liability for employee severance 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

The Agency receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Financial Position, and the Statement of Operations and the Agency's Net Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the Agency 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) 2013
$
2012
$
Net cost of operations before government funding and transfers 333,582 449,985
Adjustments for items affecting net cost of operations but not affecting authorities
Amortization of tangible capital assets (note 10) (74,863) (98,809)
Services provided without charge by other government departments (note 13(a)) (6,568) (6,292)
Refund of previous years' expenditures 1,194 1,080
Decrease in severance benefits 6,596 651
Increase in vacation pay and compensatory leave (591) (139)
Loss on disposal, write-offs and write-downs of tangible capital assets (4,704) (14,252)
Change in non-monetary exchange CSA/NASA - 20,748
Other 55 (791)
254,701 352,181
Adjustments for items not affecting net cost of operations but affecting authorities
Acquisition of tangible capital assets (note 10) 114,881 106,581
Proceeds from disposal of tangible capital assets - (3)
Decrease in prepaid expenses (49,337) (49,624)
65,544 56,954
Current year authorities used 320,245 409,135

(b) Authorities provided and used

(in thousands of dollars) 2013
$
2012
$
Authorities provided
Vote 25 - Operating expenditures 176,416 253,796
Vote 30 - Capital expenditures 162,228 118,663
Vote 35 - Grants and contributions 37,599 58,159
Statutory amounts 10,392 11,400
386,635 442,018
Less:
Authorities available for future years 4 11
Lapsed : Operating 7,805 5,894
Lapsed : Capital 51,651 15,860
Lapsed : Grants and contributions 6,930 11,118
66,390 32,883
Current year authorities used 320,245 409,135

4. Accounts Payable and Accrued Liabilities

(in thousands of dollars) 2013
$
2012
$
Accrued liabilities 52,510 52,777
Accounts payable 27,636 27,402
Contractor's holdbacks 21,584 11,640
Accrued salaries and wages 3,194 3,365
Accounts payable – Other Departments 1,278 1,787
Other accounts payable 34 49
106,236 97,020

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, the Agency has recorded at March 31, 2013, an obligation for termination benefits for an amount of $793,106 ($1,439,283 in 2011‒2012) as part of accrued liabilities to reflect the estimated workforce adjustment costs.

5. Deferred Revenue

Deferred revenue represents the balance at year-end of unearned revenues stemming from amounts received prior to services being performed as part of the activities of RADARSAT-2 to cover expenses related to the reception, archiving, cataloguing and satellite acquisition services and to the accommodation and installation of MacDonald Dettwiler and Associates Ltd. (MDA) employees. Revenue is recognized in the period that these expenditures are incurred or the service is performed. Details of the transactions related to this account are as follows:

(in thousands of dollars) 2013
$
2012
$
Deferred revenue as at April 1st 76 9
Plus: Amounts received 1,483 1,441
Less: Services rendered 1,550 1,374
Deferred revenue as at March 31 9 76

6. Employee Future Benefits

(a) Pension benefits

The Agency'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. Benefits are integrated with Canada/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Agency contribute to the cost of the Plan. The 2012-2013 expense amounts to $7.4 million ($8.2 million in 2011-2012), which represents approximately 1.7 times (1.8 times in 2011-2012) employees' contributions.

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

(b) Severance benefits

The Agency 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. Severance benefits, as at March 31, are as follows:

(in thousands of dollars) 2013
$
2012
$
Accrued benefits obligation, beginning of year 11,961 13,072
Transferred to another government department (note 14) - (460)
11,961 12,612
Plus: Expense (adjustment) for the year (1,928) 2,901
Less: Benefits paid during the year (4,668) (3,552)
Accrued benefits obligation, end of year 5,365 11,961

As part of collective agreement negociations 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 in 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 oustanding severance benefit obligation.

7. Other Liabilities

(in thousands of dollars) 2013
$
2012
$
Contractor's holdbacks 405 8,357
Participation of provinces – RADARSAT-1 97 97
502 8,454

Participation of provinces – RADARSAT-1

This account was established to record moneys received for both cost-sharing and advance payments for RADARSAT scenes. RADARSAT-1 is an Earth Observation satellite to monitor environmental change and planets natural resources. It provides information to both commercial and scientific users in the fields of agriculture, cartography, hydrology, forestry, oceanography, ice studies and coastal monitoring.

8. Accounts Receivable and Advances

(in thousands of dollars) 2013
$
2012
$
Receivables from other federal departments and organizations 1,813 1,012
Receivables from external entities 768 1,005
Employee advances 27 69
Less: Allowance for doubtful accounts on receivables from external entities (23) (30)
Gross accounts receivable 2,585 2,056
Accounts receivable held on behalf of Government (1,121) (826)
Net accounts receivable 1,464 1,230

9. Prepaid Expenses

(in thousands of dollars) 2013
$
2012
$
RADARSAT-2 prepaid services 265,533 311,800
Prepaid transfer payments - 2,961
Other prepaid expenses 418 527
265,951 315,288

RADARSAT-2 prepaid services

Under a private-public partnership agreement, the Agency has invested $445.9 million in the construction and launch of the RADARSAT-2 satellite. For its participation, the Agency received credits for the supply of data (imagery) to Canadian Government departments and agencies over the life of the mission. Since the satellite is operational, federal departments and organizations received imagery valued at $180.4 million.

10. Tangible Capital Assets

Cost
(in thousands of dollars)
Opening Balance
as at April 1st, 2012
$
Acquisitions
$
Adjustments
Footnote 1
$
Disposals,
Write-Offs
and Write-Downs
$
Closing Balance
as at March 31, 2013
$
Land 85 - - - 85
Buildings, works and infrastructure 128,146 - 1,315 - 129,461
Material and equipment 41,925 875 - (623) 42,177
Computer material 14,263 86 660 (465) 14,544
Computer software 7,745 472 789 - 9,006
Other equipment 1,860,954 501 9,923 (9,442) 1,861,936
Motor vehicles 53 - - - 53
Other vehicles 444 10 - - 454
Assets under construction 364,534 112,937 (12,110) (1,497) 463,864
2,418,149 114,881 577 (12,027) 2,521,580
Accumulated amortization
(in thousands of dollars)
Opening Balance
as at April 1st, 2012
$
Amortization
$
Adjustments
Footnote 1
$
Disposals,
Write-Offs
and Write-Downs
$
Closing Balance
as at March 31, 2013
$
Buildings, works and infrastructure 73,321 5,851 - - 79,172
Material and equipment 28,863 1,955 - (619) 30,199
Computer material 11,235 1,565 577 (464) 12,913
Computer software 6,274 1,141 - - 7,415
Other equipment 1,366,009 64,316 - (6,240) 1,424,085
Motor vehicles 36 6 - - 42
Other vehicles 231 29 - - 260
1,485,969 74,863 577 (7,323) 1,554,086
Net book value
(in thousands of dollars)
Opening Balance
as at April 1st, 2012
$
Closing Balance
as at March 31, 2013
$
Land 85 85
Buildings, works and infrastructure 54,825 50,289
Material and equipment 13,062 11,978
Computer material 3,028 1,631
Computer software 1,471 1,591
Other equipment 494,945 437,851
Motor vehicles 17 11
Other vehicles 213 194
Assets under construction 364,534 463,864
Net Book Value 932,180 967,494

During the year, computer material in the amount of $577,256 was transferred from another Department to the Agency. The net book value is zero since the asset was fully amortized; this transfer is included in the "Adjustments" column.

11. Other Receivables

(in thousands of dollars) 2013
$
2012
$
Non-monetary exchange CSA/NASA 8,177 8,177
Other non-monetary exchange 17 47
8,194 8,224

Non-monetary exchange CSA/NASA

Under the International Space Station Agreement, which was executed in 1998, and ratified by Canada in year 2000, following the passing of the Civil International Space Station Agreement Implementation Act, in 1999 the Agency signed a barter agreement with NASA in August 2001, which the fair value was estimated at $20.8 million U.S. This agreement provided that the Agency would exchange a part of its utilization rights on the International Space Station and agreed to assume repair costs for its Special Purpose Dexterous Manipulator. In return, NASA would provide to the Agency, astronaut training, satellite and launch services. The transactions under this barter agreement took place over the lifetime of the International Space Station. During fiscal years 2002 to 2013, the Agency received all of the astronaut training valued at $12.6 million CDN and NASA did exercise the option to access its proportion of Canada's utilization rights on the International Space Station valued at $20.8 million CDN. Therefore, as at March 31, 2013, the Agency recorded a net value of $8.2 million CDN as other receivables. Relative to this barter agreement or other agreements of the same kind that the Agency may enter into with its International Partners under the Agreement on the International Space Station, the Treasury Board grants to the Agency an exemption under the Policy on Accounting for Non-Monetary Transactions and does not have to charge the transaction(s) to its appropriation.

12. Contractual Obligations

The nature of the Agency's activities can result in some large multi-year contracts and obligations whereby the Agency will be obligated to make future payments in order to carry out its transfer payment programs, for the construction of assets and for the acquisitions of goods and services. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in thousands of dollars) 2014
$
2015
$
2016
$
2017
$
2018
& thereafter
$
Total
$
Construction of assets 235,849 174,661 90,000 88,000 118,000 706,510
Transfer payments 21,548 21,433 20,375 18,667 44,239 126,262
Acquisitions of goods and services 21,225 27,238 27,000 - - 75,463
Total 278,622 223,332 137,375 106,667 162,239 908,235

Contractual obligations for the construction of assets are mostly related to the construction of RADARSAT Constellation. The acquisition of goods and services is mostly related to the Canadian Space Station Program, while obligations for transfer payments are related to the contributions to the European Space Agency.

13. Related Party Transactions

The Agency is related as a result of common ownership to all government departments, organizations, and Crown Corporations. The Agency enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Agency 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 Agency received services without charge from certain common services organizations, related to accommodation, legal services and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the Agency's Statement of Operations and Agency Net Financial Position as follows:

(in thousands of dollars) 2013
$
2012
$
Employer's contribution to the health and dental insurance plans 6,018 5,823
Legal Services 341 257
Accommodation 209 212
6,568 6,292

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

(b) Other transactions with related parties

(in thousands of dollars) 2013
$
2012
$
Expenses - other government departments and organizations 25,198 36,478
Revenues - other government departments and organizations 47 141

Expenses and revenues disclosed in section (b) exclude common services provided without charge, which are already disclosed in section (a).

14. Transfers to another Government Department

In 2011-2012, the Agency transferred the responsibility for e-mail, data centre and network services to Shared Services Canada (SSC) in accordance with the Order-in-Council P.C. 2011-1297, including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, the Agency transferred the following assets and liabilities to SSC:

(in thousands of dollars) 2012
$
Assets:
Tangible capital assets (net book value) 2,028
Total assets transferred 2,028
Liabilities:
Vacation pay and compensatory leave 131
Severance benefits (note 6) 460
Total liabilities transferred 591
Adjustment to the Agency's net financial position 1,437

During the transition period, the Agency continued to administer the transferred activities on behalf of SSC. The administered expenses amounted to $0 for 2013 ($2,807,737 for 2012). These expenses are not recorded in these financial statements.

15. Segmented Information

Presentation by segment is based on the Agency's Program Alignment Architecture (PAA). The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for main programs, by major object of expense and by major type of revenue. The results for the period are as follows:

(in thousands of dollars) Space
Exploration
$
Space Data,
Information and Services
$
Future Canadian
Space Capacity
$
Internal Services
$
2013
$
2012
$
Operating expenses
Professional and special services 48,315 18,263 7,784 5,976 80,338 150,906
Salaries and employee benefits 22,981 12,926 13,986 25,183 75,076 84,704
Amortization of tangible capital assets 66,259 2,959 1,288 4,357 74,863 98,375
Acquisition of machinery and material 452 46,721 363 671 48,207 52,005
Loss on disposal, write-offs and write-downs of tangible capital assets 3,202 1,502 - - 4,704 14,252
Travel and communications 1,818 846 560 943 4,167 6,048
Rentals 318 515 1,250 2,072 4,155 3,779
Utilities, materials and supplies 149 1,652 291 1,291 3,383 3,567
Information 8 54 185 1,634 1,881 2,332
Purchased repair and maintenance 27 9 157 958 1,151 1,113
Other 142 208 197 2,523 3,070 3,399
Expenses incurred on behalf of Government - - - - - (7)
Total operating expenses 143,671 85,655 26,061 45,608 300,995 420,473
Transfer payments
International organizations - - 26,240 - 26,240 35,419
Other Levels of Government 724 2,185 4,106 - 7,015 11,257
Industry - - 90 - 90 280
Individuals - - 38 - 38 203
Non-Profit Organizations - - 167 - 167 67
Total transfer payments 724 2,185 30,641 - 33,550 47,226
Total expenses 144,395 87,840 56,702 45,608 334,545 467,699
Revenues
Sale of goods and services - - 2,193 - 2,193 5,311
Sale of rights and privileges - 1,011 - - 1,011 715
Lease and use of public property - 30 - 275 305 282
Gain on disposal of tangible assets - - - 14 14 30
Other revenues 12 70 1 37 120 21,033
Revenues earned on behalf of Government (2) (166) (2,194) (318) (2,680) (5,977)
Total Revenues 10 945 - 8 963 21,394
Net cost from continuing operations 144,385 86,895 56,702 45,600 333,582 446,305

16. Subsequent events

On March 29, 2013, the Radarsat-1 satellite experienced a technical anomaly and ceased responding to commands. The Agency tried to communicate with the satellite from that date until June 2013, without any success. Therefore, the end of the Radarsat-1 mission has been declared in June 2013 and the satellite will be written-off the Agency's tangible capital asset in 2013-2014. The cost of the satellite is $481.7 million and the net book value is zero.

17. Comparative information

Planned results and comparative figures have been reclassified in order to comply with the current year's presentation.

Footnotes

Footnote 1

Adjustments include assets under construction of $12,109,571 that were transferred to the other categories upon completion of the following assets: buildings, works and infrastructure $1,315,377; computer material $82,640; computer software $788,611; and other equipment $9,922,943.

Return to first footnote 1 referrer