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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) 67,351 73,472
Vacation pay and compensatory leave 6,473 4,903
Deferred revenue (note 5) 102 2
Severance benefits (note 6(b)) 2,691 2,666
Other liabilities (note 7) 1,592 1,929
Total net liabilities 78,209 82,972
Assets
Financial assets
Due from the Consolidated Revenue Fund 61,787 69,294
Accounts receivable and advances (note 8) 7,935 6,246
Total gross financial assets 69,722 75,540
Financial assets held on behalf of Government
Accounts receivable and advances (note 8) (797) (385)
Total financial assets held on behalf of Government (797) (385)
Total net financial assets 68,925 75,155
Agency's net debt 9,284 7,817
Non-financial assets
Prepaid expenses (note 9) 19,584 35,865
Tangible capital assets (note 10) 1,535,281 1,506,943
Other receivables (note 11) 4,303 5,031
Total non-financial assets 1,559,168 1,547,839
Agency's net financial position 1,549,884 1,540,022

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 286,997 288,907 281,207
Internal Services 57,617 58,523 53,275
Expenses incurred on behalf of Government - (28) (10)
Total Expenses 344,614 347,402 334,472
Revenues
Sale of goods and services 625 439 1,266
Location and use of public property 292 312 284
Sale of rights and privileges 40 6 67
Other revenues 158 18,249 315
Revenues earned on behalf of Government (1,090) (18,987) (1,902)
Total Revenues 25 19 30
Net cost of operations before government funding and transfers 344,589 347,383 334,442
Government funding and transfers
Net cash provided by Government of Canada - 366,432 319,940
Change in due from Consolidated Revenue Fund - (7,507) (15,498)
Services provided without charge by other government departments (note 14(a)) - 6,730 5,962
Other transfers of assets from other government departments - (8,410) -
Total Government funding and transfers - 357,245 310,404
Net cost of operations after government funding and transfers - (9,862) 24,038
Agency's net financial position - Beginning of year - 1,540,022 1,564,060
Agency's net financial position - End of year - 1,549,884 1,540,022

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 (9,862) 24,038
Change due to tangible capital assets
Acquisition of tangible capital assets (note 10) 75,927 66,100
Amortization of tangible capital assets (note 10) (47,565) (41,423)
Proceeds from disposal of tangible capital assets (6) (16)
Net gain (net loss) on disposal and write-offs of tangible capital assets (18) 8
Total change due to tangible capital assets 28,338 24,669
Change due to prepaid expenses (16,281) (47,174)
Change due to other receivables (728) (763)
Net increase in the Agency's net debt 1,467 770
Agency's net debt - Beginning of year 7,817 7,047
Agency's net debt - End of year 9,284 7,817

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 347,383 334,442
Non-cash items:
Amortization of tangible capital assets (note 10) (47,565) (41,423)
Net gain (net loss) on disposal and write-offs of tangible capital assets (18) 8
Services provided without charge by other government departments (note 14(a)) (6,730) (5,962)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances 1,277 (2,863)
Decrease in prepaid expenses (16,281) (47,174)
Decrease in other receivables (728) (763)
Decrease in accounts payable and accrued liabilities 6,121 16,944
Increase in vacation pay and compensatory leave (1,570) (337)
Decrease (increase) in deferred revenue (100) 31
Decrease (increase) in severance benefits (25) 236
Decrease in other liabilities 337 717
Other transfers of assets from other government departments 8,410 -
Cash used in operating activities 290,511 253,856
Capital Investing Activities
Acquisition of tangible capital assets (note 10) 75,927 66,100
Proceeds from disposal of capital assets (6) (16)
Cash used in capital investing activities 75,921 66,084
Net cash provided by Government of Canada 366,432 319,940

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. Internal Services refer to the activities and resources of ten distinct services that support program delivery in the organization, regardless of the Internal Services delivery model in a department. These services are: Acquisition Management Services, Communications Services, Financial Management Services, Human Resources Management Services, Information Management Services, Information Technology Services, Legal Services, Materiel Management Services, Management and Oversight Services, Real Property Management 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 "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 347,383 334,442
Adjustments for items affecting net cost of operations but not affecting authorities
Amortization of tangible capital assets (note 10) (47,565) (41,423)
Services provided without charge by other government departments (note 14(a)) (6,730) (5,962)
Refund of previous years' expenditures 289 304
Decrease (increase) in severance benefits (25) 236
Increase in vacation pay and compensatory leave (1,570) (337)
Net gain (net loss) on disposal and write-offs of tangible capital assets (18) 8
Change in non-monetary exchange CSA/NASA (728) (763)
Additional Data Credit RADARSAT-2 (26,400) -
Other 10 32
264,646 286,537
Adjustments for items not affecting net cost of operations but affecting authorities
Acquisition of tangible capital assets (note 10) 75,927 66,100
Proceeds from disposal of tangible capital assets (6) (16)
Decrease in prepaid expenses (16,281) (47,174)
Other 149 298
59,789 19,208
Current year authorities used 324,435 305,745

(b) Authorities provided and used

(in thousands of dollars)
$

$
Authorities provided
Vote 1 - Operating expenditures 189,687 179,630
Vote 5 - Capital expenditures 182,468 175,516
Vote 10 - Grants and contributions 59,626 56,411
Statutory amounts 10,057 9,582
441,838 421,139
Less:
Authorities available for use in future years 1 2
Lapsed: Operating 10,818 5,941
Lapsed: Capital 106,541 109,416
Lapsed: Grants and contributions 43 35
117,403 115,394
Current year authorities used 324,435 305,745

Lapsed funds are unspent funds at year-end, which can be eligible for a carryforward to the subsequent year.

4. Accounts Payable and Accrued Liabilities

(in thousands of dollars)
$

$
Accounts payable - External parties 25,064 21,782
Contractor's holdbacks 4,726 5,815
Accounts payable – Other governement departments and agencies 1,655 994
Other accounts payable 3 7
Total accounts payable 31,448 28,598
Accrued liabilities 35,903 44,874
Total accounts payable and accrued liabilities 67,351 73,472

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 2 33
Amounts received 1,422 1,837
Services rendered (1,322) (1,868)
Deferred revenue as at March 31 102 2

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 $7.0 million ($6.7 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 2,666 2,902
Expense for the year 424 25
Benefits paid during the year (399) (261)
Accrued benefit obligation, end of year 2,691 2,666

7. Other Liabilities

(in thousands of dollars)
$

$
Contractor's holdbacks 1,177 1,929
Research Collaboration Agreement - SMILE-UVI 415 -
1,592 1,929

Research Collaboration Agreement - SMILE-UVI (Solar wind Magnetosphere Ionosphere Link Explorer Ultra-Violet Imager)

This account was established to record funds received from the University of Calgary for the financing of the development of the Ultra-Violet Imager Infrastructure.

8. Accounts Receivable and Advances

(in thousands of dollars)
$

$
Receivables from other government departments and agencies 6,315 5,403
Receivables from external entities 1,370 464
Other receivables and advances 291 392
Allowance for doubtful accounts on receivables from external entities (41) (13)
Gross accounts receivable 7,935 6,246
Accounts receivable held on behalf of Government (797) (385)
Net accounts receivable 7,138 5,861

9. Prepaid Expenses

(in thousands of dollars)
$

$
RADARSAT-2 prepaid services 18,515 34,935
Other prepaid expenses 1,069 930
19,584 35,865

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 $476.2 million ($433.4 million for -). In addition, since -, the Agency received additional credits valued at $48.8 million ($22.4 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 9-40 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

$
Acquisitions
$
Adjustments
Table note 1
$
Disposals and
Write-Offs
$
Closing Balance

$
Land 85 - - - 85
Buildings, works and infrastructure 151,737 - 3,564 - 155,301
Material and equipment 42,274 75 3,220 - 45,569
Computer material 14,563 248 - (74) 14,737
Computer software 15,827 18 645 - 16,490
Other equipment 1,407,684 - 2,699 - 1,410,383
Motor vehicles 162 28 - (29) 161
Other vehicles 514 35 - - 549
Leasehold improvements 742 - - - 742
Assets under construction 1,225,060 75,523 (10,128) (27) 1,290,428
2,858,648 75,927 - (130) 2,934,445
Accumulated amortization
(in thousands of dollars)
Opening Balance

$
Amortization
$
Adjustments
$
Disposals and
Write-Offs
$
Closing Balance

$
Buildings, works and infrastructure 106,517 4,492 - - 111,009
Material and equipment 35,624 1,051 - - 36,675
Computer material 12,932 445 - (77) 13,300
Computer software 11,446 729 - - 12,175
Other equipment 1,184,663 40,684 - - 1,225,347
Motor vehicles 57 33 - (29) 61
Other vehicles 373 38 - - 411
Leasehold improvements 93 93 - - 186
1,351,705 47,565 - (106) 1,399,164
Net book value
(in thousands of dollars)
Opening Balance

$
Closing Balance

$
Land 85 85
Buildings, works and infrastructure 45,220 44,292
Material and equipment 6,650 8,894
Computer material 1,631 1,437
Computer software 4,381 4,315
Other equipment 223,021 185,036
Motor vehicles 105 100
Other vehicles 141 138
Leasehold Improvements 649 556
Assets under construction 1,225,060 1,290,428
Net Book Value 1,506,943 1,535,281

11. Other Receivables

(in thousands of dollars)
$

$
Non-monetary exchange CSA/NASA 4,303 5,031
4,303 5,031

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 $7.7 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 $4.3 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 36,351 34,435 40,697 38,289 105,638 255,410
Construction of assets 34,077 9,886 1,500 - - 45,463
Acquisitions of goods and services 49,248 44,310 42,599 40,223 27,266 203,646
Total 119,676 88,631 84,796 78,512 132,904 504,519

Contractual obligations for transfer payments are related to the contributions to the European Space Agency. The construction of assets is mostly related to the Quantum Encryption and Science Satellite (QEYSSat) demonstration mission and the RADARSAT Constellation mission while obligations for the acquisition of goods and services are mostly related to the Canadian Space Station Program.

13. 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.

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 6,565 5,800
Accommodation 165 162
6,730 5,962

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 32,763 30,323
Revenues 222 18

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 84,239 9,081 93,320 90,316
Salaries and employee benefits 50,043 34,549 84,592 77,559
Amortization of tangible capital assets 43,237 4,328 47,565 41,423
Acquisition of machinery and material 44,129 1,538 45,667 50,074
Travel and communications 4,082 918 5,000 5,549
Rentals 1,426 2,307 3,733 3,708
Information 1,566 1,252 2,818 3,692
Utilities, materials and supplies 376 1,170 1,546 1,775
Purchased repair and maintenance 236 866 1,102 1,426
Loss on disposal and write-offs of tangible capital assets - 24 24 -
Other 35 2,490 2,525 2,620
Expenses incurred on behalf of Government - (28) (28) (10)
Total operating expenses 229,369 58,495 287,864 278,132
Transfer payments
International organizations 36,092 - 36,092 29,977
Industry 12,118 - 12,118 14,115
Non-Profit Organizations 11,269 - 11,269 12,202
Individuals 59 - 59 46
Total transfer payments 59,538 - 59,538 56,340
Total expenses 288,907 58,495 347,402 334,472
Revenues
Sale of goods and services 439 - 439 1,266
Lease and use of public property - 312 312 284
Sale of rights and privileges 6 - 6 67
Gain on disposal of tangible assets - 6 6 8
Other revenues 18,049 194 18,243 307
Revenues earned on behalf of Government (18,488) (499) (18,987) (1,902)
Total Revenues 6 13 19 30
Net cost of operations 288,901 58,482 347,383 334,442

16. Subsequent events

The outbreak of the Coronavirus disease ["COVID-19"] has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. The duration and impact of the COVID-19 outbreak is unknown at this time. Therefore, although we do not foresee any major impact on the Agency's activities, it is not possible to reliably estimate the length and severity of the impact on the financial position and financial results in future periods.

17. Comparative information

Certain comparative figures have been reclassified in order to conform to the current year's presentation.

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