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Financial Statements -

Statement of Management Responsibility Including Internal Control over Financial Reporting

Canadian Space Agency

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended , and all information contained in these financial statements rests with the management of the Canadian Space Agency. These financial statements have been prepared by management using the Government of Canada's accounting policies, which are based on the Canadian public sector accounting standards.

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 Results 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 was completed in accordance with the Treasury Board Policy on Financial Management and the results and 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 subject to an external audit.

The original version was signed by Sylvain Laporte, President, in Longueuil, Canada, on .

The original version was signed by Jean-Claude Piedboeuf, B. Ing., Ph. D, Chief Financial Officer, in Longueuil, Canada, on .

Statement of Financial Position (Unaudited)

As at March 31
(in thousands of dollars)

$

$
Liabilities
Accounts payable and accrued liabilities (note 4) 73,472 90,416
Vacation pay and compensatory leave 4,903 4,566
Deferred revenue (note 5) 2 33
Severance benefits (note 6(b)) 2,666 2,902
Other liabilities (note 7) 1,929 2,646
Total net liabilities 82,972 100,563
Assets
Financial assets
Due from the Consolidated Revenue Fund 69,294 84,792
Accounts receivable and advances (note 8) 6,246 8,853
Total gross financial assets 75,540 93,645
Financial assets held on behalf of Government
Accounts receivable and advances (note 8) (385) (129)
Total financial assets held on behalf of Government (385) (129)
Total net financial assets 75,155 93,516
Agency's net debt 7,817 7,047
Non-financial assets
Prepaid expenses (note 9) 35,865 83,039
Tangible capital assets (note 10) 1,506,943 1,482,274
Other receivables (note 11) 5,031 5,794
Total non-financial assets 1,547,839 1,571,107
Agency's net financial position 1,540,022 1,564,060

Contractual obligations (note 12)

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

The original version was signed by Sylvain Laporte, President, in Longueuil, Canada, on .

The original version was signed by Jean-Claude Piedboeuf, B. Ing., Ph. D., Chief Financial Officer, in Longueuil, Canada, on .

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

For the Year Ended March 31
(in thousands of dollars)

$
Planned

$

$
Expenses
Canada in Space 302,060 281,207 299,664
Internal Services 53,277 53,275 54,151
Expenses incurred on behalf of Government - (10) (7)
Total Expenses 355,337 334,472 353,808
Revenues
Sale of goods and services 1,006 1,266 388
Location and use of public property 280 284 208
Sale of rights and privileges 50 67 119
Other revenues 101 315 9,660
Revenues earned on behalf of Government (1,408) (1,902) (10,365)
Total Revenues 29 30 10
Net cost of operations before government funding and transfers 355,308 334,442 353,798
Government funding and transfers
Net cash provided by Government of Canada - 319,940 364,049
Change in due from Consolidated Revenue Fund - (15,498) (2,739)
Services provided without charge by other government departments (note 14(a)) - 5,962 6,514
Transfer of capital assets to another government department - - (14,904)
Total Government funding and transfers - 310,404 352,920
Net cost of operations after government funding and transfers - 24,038 878
Agency's net financial position - Beginning of year - 1,564,060 1,564,938
Agency's net financial position - End of year - 1,540,022 1,564,060

Other transactions with related parties (note 14(b))

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)

$

$
Net cost of operations after government funding and transfers 24,038 878
Change due to tangible capital assets
Acquisition of tangible capital assets (note 10) 66,100 107,718
Amortization of tangible capital assets (note 10) (41,423) (40,680)
Proceeds from disposal of tangible capital assets (16) (1)
Gain (loss) on disposal and write-offs of tangible capital assets 8 (1,006)
Transfer of capital assets to another government department - (14,904)
Total change due to tangible capital assets 24,669 51,127
Change due to prepaid expenses (47,174) (49,786)
Change due to other receivables (763) (1,265)
Net increase in the Agency's net debt 770 954
Agency's net debt - Beginning of year 7,047 6,093
Agency's net debt - End of year 7,817 7,047

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)

$

$
Operating Activities
Net cost of operations before government funding and transfers 334,442 353,798
Non-cash items:
Amortization of tangible capital assets (note 10) (41,423) (40,680)
Gain (loss) on disposal and write-offs of tangible capital assets 8 (1,006)
Services provided without charge by other government departments (note 14(a)) (5,962) (6,514)
Variations in Statement of Financial Position:
Decrease in accounts receivable and advances (2,863) (1,836)
Decrease in prepaid expenses (47,174) (49,786)
Decrease in other receivables (763) (1,265)
Decrease in accounts payable and accrued liabilities 16,944 3,968
Increase in vacation pay and compensatory leave (337) (417)
Decrease in deferred revenue 31 17
Decrease (increase) in severance benefits 236 (135)
Decrease in contingent liabilities - 350
Decrease (increase) in other liabilities 717 (162)
Cash used in operating activities 253,856 256,332
Capital Investing Activities
Acquisition of tangible capital assets (note 10) 66,100 107,718
Proceeds from disposal of capital assets (16) (1)
Cash used in capital investing activities 66,084 107,717
Net cash provided by Government of Canada 319,940 364,049

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 . The Agency is a division of the public service named in Schedule I.1 of the Financial Administration Act. The Agency is part of the Ministerial Portfolio of Innovation, Science and Economic Development, which represents the Agency in Parliament and in Cabinet.

The Canadian Space Agency Act that received Royal Assent in attributes four main functions to the Agency:

  • Assist the Minister to coordinate the space policies and programs of the Government of Canada;
  • Plan, direct, manage and implement programs and projects relating to scientific or industrial space research and development and the application of space technology;
  • Promote the transfer and diffusion of space technology to and throughout Canadian industry; and
  • Encourage commercial exploitation of space capabilities, technology, facilities and systems.

The mandate of the Canadian Space Agency is "To promote the peaceful use and development of space, to advance the knowledge of space through science and to ensure that space science and technology provide social and economic benefits for Canadians".

The Agency fulfills its mandate through the following core responsibilities:

Canada in space

The Canadian Space Agency coordinates the space policies and programs of the government of Canada; ensures that other government departments and agencies have access to space data, information, and services to deliver on their mandate; plans, directs and manages projects relating to scientific or industrial space research and the development of space science and technology; promotes the transfer and diffusion of space technology to and throughout the Canadian industry; and encourages the commercial exploitation of the space capabilities, technology, facilities and systems. The Canadian Space Agency also aims to build Canada's capacity and engage the next generation of space scientists and engineers and provide opportunities to inspire young people to develop the required skills and to pursue studies and careers in science, technology, engineering and math.

Internal services

Internal Services are groups of related activities and resources that the federal government considers to be services in support of Programs and/or required to meet corporate obligations of an organization.

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 "Expenses" and "Revenues" sections of the Statement of Operations and Agency Net Financial Position are the amounts reported in the Future-Oriented Statement of Operations included in the - Departmental Plan. Planned results are not presented in the "Government funding and transfers" section of the Statement of Operations and Agency Net Financial Position and in the Statement of Change in the Agency's Net Debt because these amounts were not included in the - Departmental Plan.

(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 place.
  • Funds received from external parties for specified purposes are recorded as deferred revenue, provided the Agency has an obligation 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 in the year the transfer is authorized and all eligibility criteria have been met by the recipient.
  • Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
  • Services provided without charge by other government departments for accommodation and employer contributions to the health and dental insurance plans 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 of Canada. 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 deficits are recongnized in the financial statements of the Government of Canada, as the Plan's sponsor.
  2. Severance benefits: The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Governement 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) Non-financial assets

The costs of acquiring land, buildings, equipment and other capital property are capitalized as tangible capital assets and, except for land, are amortized to expense over the estimated useful lives of the assets, as described in note 10. All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined in the Indian Act, works of art, museum collection and Crown land to which no acquisition cost is attributable; and intangible assets.

(i) Contingent liabilities

Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. If the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, a provision is accrued and an expense recorded. If the likelihood is not determinable or if an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(j) 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 foreign currencies are translated into Canadian dollars using the rate of exchange in effect at March 31st. Gains and losses resulting from foreign currency transactions are included in the item "others" in the Statement of Operations and the Agency's Net Financial Position.

(k) Measurement uncertainty

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimated are based on facts and circumstances, historical experience, general economic conditions and reflect the Government's best estimate of the related amount at the end of the reporting period. 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.

(l) Related party transactions

Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:

  1. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
  2. Certain services received on a without charge basis are recorded for the Agency's financial statement purposes at the carying amount.

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 fiscal 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 parliamentary authorities used

(in thousands of dollars)
$

$
Net cost of operations before government funding and transfers 334,442 353,798
Adjustments for items affecting net cost of operations but not affecting authorities
Amortization of tangible capital assets (note 10) (41,423) (40,680)
Services provided without charge by other government departments (note 14(a)) (5,962) (6,514)
Refund of previous years' expenditures 304 884
Decrease (increase) in severance benefits 236 (135)
Increase in vacation pay and compensatory leave (337) (417)
Decrease in contingent liabilities - 350
Net gain (net loss) on disposal and write-offs of tangible capital assets 8 (1,006)
Change in non-monetary exchange CSA/NASA (763) (1,265)
Additional Data Credit RADARSAT-2 - (9,600)
Other 330 112
286,835 295,527
Adjustments for items not affecting net cost of operations but affecting authorities
Acquisition of tangible capital assets (note 10) 66,100 107,718
Proceeds from disposal of tangible capital assets (16) (1)
Decrease in prepaid expenses (47,174) (49,786)
18,910 57,931
Current year authorities used 305,745 353,458

(b) Authorities provided and used

(in thousands of dollars)
$

$
Authorities provided
Vote 1 - Operating expenditures 179,630 181,863
Vote 5 - Capital expenditures 175,516 168,666
Vote 10 - Grants and contributions 56,411 60,966
Statutory amounts 9,582 9,512
421,139 421,007
Less:
Authorities available for use in future years 2 7
Lapsed: Operating 5,941 6,556
Lapsed: Capital 109,416 60,948
Lapsed: Grants and contributions 35 18
Lapsed: Proceeds from the disposal of surplus Crown assets - 20
115,394 67,549
Current year authorities used 305,745 353,458

4. Accounts Payable and Accrued Liabilities

(in thousands of dollars)
$

$
Accounts payable - External parties 21,782 21,595
Contractor's holdbacks 5,815 5,374
Accounts payable – Other governement departments and agencies 994 1,019
Other accounts payable 7 2
Total accounts payable 28,598 27,990
Accrued liabilities 44,874 62,426
Total accounts payable and accrued liabilities 73,472 90,416

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 for the preparation of accommodations of MacDonald Dettwiler and Associates Ltd. (MDA) employees. Revenues are recognized in the period that the expenditures are incurred or the service is performed. Details of the transactions related to this account are as follows:

(in thousands of dollars)
$

$
Deferred revenue as at April 1st 33 50
Amounts received 1,837 1,813
Services rendered (1,868) (1,830)
Deferred revenue as at March 31 2 33

6. Employee Future Benefits

(a) Pension benefits

The Agency's employees participate in the Public Service Pension Plan (the "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 Plan benefits and they are indexed to inflation.

Both the employees and the Agency contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to the Economic Action Plan , employee contributors have been divided into two groups - Group 1 relates to existing plan members as of and Group 2 relates to members joining the Plan as of . Each group has a distinct contribution rate.

The - expense amounts to $6.7 million ($6.0 million in -). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in -) the employee contributions and, for Group 2 members, approximately 1 time (1 time in -) the employee contributions.

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

(b) Severance benefits

Severance benefits provided to the Agency's employees were previously based on an employee's eligibility, years of service and salary at termination of employment. However, since , the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By , substantially all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows:

(in thousands of dollars)
$

$
Accrued benefit obligation, beginning of year 2,902 2,767
Expense for the year 25 403
Benefits paid during the year (261) (268)
Accrued benefit obligation, end of year 2,666 2,902

7. Other Liabilities

(in thousands of dollars)
$

$
Contractor's holdbacks 1,929 2,646
1,929 2,646

8. Accounts Receivable and Advances

(in thousands of dollars)
$

$
Receivables from other government departments and agencies 5,403 8,553
Receivables from external entities 464 132
Other receivables and advances 392 171
Allowance for doubtful accounts on receivables from external entities (13) (3)
Gross accounts receivable 6,246 8,853
Accounts receivable held on behalf of Government (385) (129)
Net accounts receivable 5,861 8,724

9. Prepaid Expenses

(in thousands of dollars)
$

$
RADARSAT-2 prepaid services 34,935 82,193
Other prepaid expenses 930 846
35,865 83,039

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. In exchange of 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 $433.4 million ($385.4 million for -). In addition, since -, the Agency received additional credits valued at $22.4 million ($21.7 million for -), resulting from a contractual arrangement with the supplier.

10. Tangible Capital Assets

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

Asset category Amortization period
Buildings, works and infrastructure 10-40 years
Material and equipment 9-20 years
Computer material 5-10 years
Computer software 3-15 years
Other equipment 3-30 years
Motor vehicles 5 years
Other vehicles 10 years
Leasehold improvements Lesser of the remaining term of lease or useful life of the improvement

Assets under construction are accounted for in the applicable capital asset category in the fiscal year in which they become available for use for the production of goods or the provision of services (commissioning) and are only amortized as of that date.

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.

Cost
(in thousands of dollars)
Opening Balance
as at
$
Acquisitions
$
Adjustments
Table note 1
$
Disposals and
Write-Offs
$
Closing Balance
as at
$
Land 85 - - - 85
Buildings, works and infrastructure 147,443 - 4,294 - 151,737
Material and equipment 42,438 350 - (514) 42,274
Computer material 14,969 79 - (485) 14,563
Computer software 12,415 39 3,388 (15) 15,827
Other equipment 1,368,033 - 39,651 - 1,407,684
Motor vehicles 143 40 - (21) 162
Other vehicles 466 48 - - 514
Leasehold improvements 742 - - - 742
Assets under construction 1,206,849 65,544 (47,333) - 1,225,060
2,793,583 66,100 - (1,035) 2,858,648
Accumulated amortization
(in thousands of dollars)
Opening Balance
as at
$
Amortization
$
Adjustments
$
Disposals and
Write-Offs
$
Closing Balance
as at
$
Buildings, works and infrastructure 102,323 4,194 - - 106,517
Material and equipment 34,898 1,240 - (514) 35,624
Computer material 12,928 488 - (484) 12,932
Computer software 11,245 213 - (12) 11,446
Other equipment 1,149,533 35,130 - - 1,184,663
Motor vehicles 44 30 - (17) 57
Other vehicles 338 35 - - 373
Leasehold improvements - 93 - - 93
1,311,309 41,423 - (1,027) 1,351,705
Net book value
(in thousands of dollars)
Opening Balance
as at
$
Closing Balance
as at
$
Land 85 85
Buildings, works and infrastructure 45,120 45,220
Material and equipment 7,540 6,650
Computer material 2,041 1,631
Computer software 1,170 4,381
Other equipment 218,500 223,021
Motor vehicles 99 105
Other vehicles 128 141
Leasehold Improvements 742 649
Assets under construction 1,206,849 1,225,060
Net Book Value 1,482,274 1,506,943

11. Other Receivables

(in thousands of dollars)
$

$
Non-monetary exchange CSA/NASA 5,031 5,794
5,031 5,794

Non-monetary exchange CSA/NASA

Under the International Space Station Agreement, which was executed in , and ratified by Canada in year , following the passing of the Civil International Space Station Agreement Implementation Act, in the Agency signed a barter agreement with NASA in , 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 to , the Agency received all of the astronaut training valued at $10 million U.S. and launch services valued at $7.0 million U.S., 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 U.S. As at , the Agency recorded a net value of $5.0 million CDN as other receivables which corresponds to the residual receivable in regards to the barter agreement and the effect of the variances in the exchange rates. In regards 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 Agency was granted an exemption by Treasury Board under the Policy on Accounting for Non-Monetary Transactions and does not have to charge the transactions to its appropriation.

12. Contractual Obligations

The nature of the Agency's activities may 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)
$

$

$

$
&
thereafter
$
Total
$
Transfer payments 19,153 18,949 16,214 9,790 3,853 67,959
Construction of assets 60,558 510 - - - 61,068
Acquisitions of goods and services 46,744 16,172 391 - - 63,307
Total 126,455 35,631 16,605 9,790 3,853 192,334

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

13. Contingent liabilities and contingent assets

(a) Contingent liabilities

A claim has been made against the Agency in the normal course of operations. Although the outcome of this claim is likely to occur, a reasonable estimate cannot be made and it will not have a material adverse affect on the financial condition of the Agency. No provision has been made in the financial statements.

(b) Contingent assets

As part of a contract with a company, Canada will negotiate a compensation for delays in the delivery of certain services. Contingent assets are not regognized in the financial statements.

14. Related Party Transactions

The Agency is related as a result of common ownership to all government departments, organizations, and Crown Corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual.

The Agency enters into transactions with these entities in the normal course of business and on normal trade terms.

(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 and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded at the carrying value in the Agency's Statement of Operations and the Agency's Net Financial Position as follows:

(in thousands of dollars)
$

$
Employer's contribution to the health and dental insurance plans 5,800 6,355
Accommodation 162 159
5,962 6,514

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a results, the Government uses central agencies and common service organizations so that one department performs services for all departments and agencies without charge. The costs of these services, such as payroll and cheque issuance services provided by Public Services and Procurement Canada , information technology (IT) infrastructure services in the areas of data centre and network services provided by Shared Services Canada and audit services provided by the Office of the Auditor General, are not included in the Agency's Statement of Operations and the Agency's Net Financial Position.

(b) Other transactions with other government departments and agencies

(in thousands of dollars)
$

$
Expenses 30,323 32,683
Revenues 18 76

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

15. Segmented Information

Presentation by segment is based on the Agency's core responsibility. 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 core responsibilities, by major object of expense and by revenue type. The results for the period are as follows:

(in thousands of dollars) Canada in Space
$
Internal Services
$

$

$
Operating expenses
Professional and special services 81,869 8,447 90,316 92,173
Salaries and employee benefits 46,897 30,662 77,559 78,499
Acquisition of machinery and material 49,235 839 50,074 61,655
Amortization of tangible capital assets 37,330 4,093 41,423 40,680
Travel and communications 4,558 991 5,549 5,615
Rentals 1,346 2,362 3,708 3,458
Information 2,583 1,109 3,692 3,964
Utilities, materials and supplies 698 1,077 1,775 1,561
Purchased repair and maintenance 291 1,135 1,426 1,866
Loss on disposal and write-offs of tangible capital assets - - - 1,007
Other 60 2,560 2,620 2,391
Expenses incurred on behalf of Government - (10) (10) (7)
Total operating expenses 224,867 53,265 278,132 292,862
Transfer payments
International organizations 29,977 - 29,977 41,767
Industry 14,115 - 14,115 8,486
Non-Profit Organizations 12,202 - 12,202 10,611
Individuals 46 - 46 82
Total transfer payments 56,340 - 56,340 60,946
Total expenses 281,207 53,265 334,472 353,808
Revenues
Sale of goods and services 1,266 - 1,266 388
Lease and use of public property - 284 284 208
Sale of rights and privileges 67 - 67 119
Gain on disposal of tangible assets - 8 8 1
Other revenues 282 25 307 9,659
Revenues earned on behalf of Government (1,608) (294) (1,902) (10,365)
Total Revenues 7 23 30 10
Net cost of operations 281,200 53,242 334,442 353,798

16. Comparative information

Certain comparative figures have been reclassified in order to conform to the Agency's new core responsibility structure.

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