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Section V - Financial Statements

CANADIAN ARTISTS AND PRODUCERS PROFESSIONAL RELATIONS TRIBUNAL

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements of the Canadian Artists and Producers Professional Relations Tribunal (Tribunal) for the year ended March 31, 2008 and all information contained in these statements rests with the Tribunal's management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

Management is responsible for the integrity and objectivity of the information in these financial statements. 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 Tribunal's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Tribunal's Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance withprescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the Tribunal.

The financial statements of the Tribunal have not been audited.

Ottawa, Canada
Date: August 15, 2008

Canadian Artists And Producers Professional Relations Tribunal
Statement of Operations (unaudited)
For the Year Ended March 31
(in dollars)

	2008	2007
Expenses
Processing of applications
Salaries and employee benefits	$738,224	968,681
Accommodation	$358,040	332,960
Professional and special services	$242,850	218,018
Transportation and telecommunications	$52,697	74,925
Information	$21,253	14,103
Amortization of tangible capital assets	$19,874	11,034
Rentals	$18,670	20,351
Utilities, materials and supplies	$16,071	35,070
Repair and maintenance	$2,693	19,516
Net cost of operations	$1,470,372	1,694,658

The accompanying notes are an integral part of these financial statements

Canadian Artists and Producers Professional Relations Tribunal
Statement of Financial Position (Unaudited)
At March 31
(in dollars)

	2008	2007
Assets
Financial assets		Restated See Note 8
Accounts receivable and advances (Note 4)	$73,651	$62,798
Prepaid expenses	$5,115
Total financial assets	$78,766	$62,798
Non-financial assets
Tangible capital assets (Note 5)	$16,705	$39,253
TOTAL	$129,322	$204,056
Liabilities
Accounts payable and accrued liabilities	$67,063	$92,945
Vacation pay and compensatory leave	$34,594	$33,767
Employee severance benefits (Note 6)	$90,467	$115,354
Total liabilities	$192,124	$242,066
Equity of Canada	$(96,653)	$(140,015)
TOTAL	$95,471	$102,051

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

Canadian Artists and Producers Professional Relations Tribunal
statement Of Equity Of Canada (unaudited) At March 31 (in Dollars)

	2008	2007
		Restaded See Note 8
Equity of Canada, beginning of year	(140,015)	(86,283)
Net cost of operations	(1,470,372)	(1,694,658)
Current year appropriations used (Note 3)	1,054,629	1,340,909
Change in net position in the Consolidated Revenue Fund (Note 3)	36,735	(105,423)
Services provided without charge by other government departments (Note 7)	422,370	405,440
Equity of Canada, end of year	(96,653)	140,015)

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

Canadian Artists and Producers Professional Relations Tribunal
Statement of Cash Flow (unaudited)
For the Year Ended March 31
(in dollars)

	2008	2007
Operating Activities
Net cost of operations	$1,470,372	$1,694,658
Non-cash items:
Amortization of tangible capital assets (Note 5)	(19,874)	(11,034)
Services provided without charge by other government departments (Note 7)	(422,370)	(405,440)
Variations in Statement of Financial Position
Increase (decrease) in accounts receivable and advances	10,853	(93,946)
Increase in prepaid expenses	5,115	-
Decrease (increase) in liabilities	49,942	21,002
Cash used by operating activities	$1,094,038	$1,205,240
Capital investment activities
Acquisitions of tangible capital assets	-	30,246
Proceeds from the disposal of tangible capital assets	(2,674)	-
Cash used by capital investment activities	(2,674)	30,246-
Financing activities
Net cash provided by Government of Canada	$(1,091,364)	$(1,235,486)

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

Canadian Artists and Producers Professional Relations Tribunal
Notes To The Financial Statements (unaudited)

1. Authority and Objectives

The Canadian Artists and Producers Professional Relations Tribunal (Tribunal) is the independent, quasi-judicial adjudicative tribunal created in 1993 by the Status of the Artist Act. Its mandate is to define the sectors of cultural activity subject to federal jurisdiction that are suitable for collective bargaining, to certify artists' associations to represent independent entrepreneurs working in these sectors, to hear and decide complaints of unfair practices filed by artists, artists' associations and producers, and, to prescribe appropriate remedies for contraventions of the Status of the Artist Act.

2. Summary of Significant Accounting Policies

The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

Significant accounting policies are as follows:

(a) Parliamentary appropriations

The Tribunal is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the Tribunal do not parallel financial reporting according to Canadian generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the two bases of reporting.

(b) Net cash provided by Government

The Tribunal operates within the Consolidated Revenue Fund (CRF) which is administered by the Receiver General for Canada. All cash received by the Tribunal is deposited to the CRF and all cash disbursements made by the Tribunal are paid from the CRF. Net cash provided by government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.

(c) Change in net position in the Consolidated Revenue Fund

The change is the difference between the net cash provided by Government and appropriations used in a year. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Expenses

Expenses are recorded on the accrual basis:

• Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
• Services provided without charge by other government departments for accommodation and the employer's contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

(e) Employee future benefits

1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The Tribunal's contributions to the Plan are charged to expenses in the year incurred and represent the total Tribunal obligation to the Plan. Current legislation does not require the Tribunal to make contributions for any actuarial deficiencies of the Plan.
2. Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. 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.

(f) Accounts receivable and advances

Accounts receivable and advances are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

(g) Tangible capital assets

All tangible capital assets and leasehold improvements having an initial cost of $3,000 or more are recorded at their acquisition cost. The Tribunal does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections.

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

Asset Class	Amortization Period
Informatics hardware	3 years
Other equipment	5 years

(h) Measurement uncertainty

The preparation of these financial statements in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities 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 appropriations

The Tribunal receives its funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Tribunal 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 appropriations used:

	2008	2007
Net cost of operations (in dollars)	1,470,372	1,694,658
Adjustments for items affecting net cost of operations but not affecting appropriations
Add (Less):
Services provided without charge by other government departments	(422,370)	(405,440)
Amortization of tangible capital assets	(19,874)	(11,034)
Decrease (Increase) in employee severance benefits liability	24,887	43,072
Decrease in vacation pay and compensatory leave liability	(827)	-
Other - loss on disposal of assets	(2,674)	(15,300)
	1,310,663	1,086,144
Adjustments for items not affecting net cost of operations but affecting appropriations
Add: Tangible capital assets acquisitions	-	30,246
Prepaid Expenses	5,115	-
Current year appropriations used	1,054,629	1,340,909

 

(b) Appropriations provided and used

	Appropriations Provided (in dollars)
	2008	2007
Vote 20 - Operating expenditures	1,893,850	1,773,000
Statutory amounts	101,729	126,830
Less:
Lapsed appropriations: Operating	(940,950)	(940,950)
Current year appropriations used	1,054,629	1,340,909

 

(c) Reconciliation of net cash provided by Government to current year appropriations used

	2008 (in dollars)	2007 (in dollars)
Net cash provided by Government	1,091,364	1,235,486
Change in net position in the Consolidated Revenue Fund
Decrease (increase) in accounts receivable and advances	(10,853)	93,946
Increase (decrease) in accounts payable and accrued liabilities	(25,882)	26,777
Other adjustments	-	(15,300)
	(36,735)	105,423
Current year appropriations used	1,054,629	1,340,909

 

4. Accounts Receivable and Advances

The following table presents details of accounts receivable and advances:

	2008 (in dollars)	2007 (in dollars)
		Restated Note 8
Receivables from other Federal Government departments and agencies	$70,633	$59,780
Receivables from external parties	2,218	2,218
Employee advances	800	800
Total	$73,651	$62,798

 

5. Tangible Capital Assets

			Cost
	Opening balance	Acquisitions	Disposals and write-offs	Closing balance
Capital asset class
Informatics hardware	209,100		(164,351)	44,749
Other equipment	83,207		(23,690)	59,517
Total	292,307		(188,041)	104,266

Accumulated amortization
	Opening balance	Amortization	Disposals and write-offs	Closing balance
Capital asset class
Informatics hardware	186,671	8,989	(162,997)	32,663
Other equipment	66,383	10,885	(22,370)	54,898
Total	253,053	19,874	(185,367)	87,561

Net Book Value
			2008	2007
Informatics hardware			12,086	22,430
Other equipment			4,619	16,823
Total			16,705	39,253

Amortization expense for the year ended March 31, 2008 is $19,874 (2007 is $11,034).

6. Employee benefits

a) Pension benefits

The Tribunal's employees participate in the Public Service Pension 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/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Tribunal contribute to the cost of the Plan. The 2007-08 expense amounts to $155,736 ($126,830 in 2006-07) which represents approximately 2.1 times (2.2 times in 2006-07) the contributions by employees.

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

b) Severance benefits

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

	2008 (in dollars)	2007 (in dollars)
Accrued benefit obligation, beginning of the year	115,354	158,426
Expense for the year	(24,887)	(43,072)
Benefits paid during the year	-	-
Accrued benefit obligation, end of the year	90,467	115,354

7. Related party transactions

The Tribunal is related as a result of common ownership to all Government of Canada departments, agencies and Crown Corporations. The Tribunal enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the Tribunal received services which were obtained without charge from other Government departments as presented in part (a).

a) Services provided without charge:

During the year, the Tribunal received without charge from other government departments, accommodation and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the Tribunal's Statement of Operations as follows:

	2008 (in dollars)	2007 (in dollars)
Accommodation	$358,040	$332,960
Employer's contribution to the health and dental insurance plans	$64,330	72,480
Total	$422,370	$405,440

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The cost of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the Tribunal's Statement of Operations.

b) Payables outstanding at year-end with related parties:

 

	2008 (in dollars)	2007 (in dollars)
Accounts payable to other government departments and agencies	$17,763	$24,864

Restated financial information

The Tribunal identified overstated accounts receivable for the year ended March 31, 2007 was overstated by $27,271. As a result, the comparative financial information has been adjusted to reflect these changes. In the Statement of Financial Position, accounts receivable and advances decreased by $27,271 and in the Statement of Equity of Canada, beginning of the year decreased by $27,271.

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1. Conference Board of Canada, Valuing Culture: Measuring and Understanding Canada's Creative Economy (forthcoming - August 2008)

2. Sources: Hill Strategies Research, September 2004: Statistical Profile of Artists in Canada; Hill Strategies Research, March 2005: Arts Research Monitor

3. Available on the Internet at: www.pch.gc.ca/progs/em-cr/eval/2002/2002_25/tdm_e.cfm

4. Falling short of the target both in the reporting year and on average over the preceding ten years might suggest that the target needs to be revised. The ten-year average, however, is skewed by three years in which average times were very high; in seven of the ten years, the average time to process cases was well below the target. We think that 200 days is a reasonable target to aim for, bearing in mind that the time required to process a case does not depend solely on the Tribunal, but also on the parties before it.

5. The Tribunal acknowledges that this indicator is not ideal. A party's choice to seek or not to seek judicial review may be unrelated to the quality of the Tribunal's decision. Moreover, the grounds for judicial review of a Tribunal decision are limited. The Federal Court of Appeal does not assess the correctness of the Tribunal's decisions; it will intervene only if the Tribunal has:

• Acted without or beyond its jurisdiction, or refused to exercise its jurisdiction;
• Failed to observe a principle of natural justice, procedural fairness or other procedure that it is required by law to observe; or
• Acted, or failed to act, by reason of fraud or perjured evidence.

Several labour boards and other administrative tribunals monitor and report on this statistic. Most have not established a target to achieve in this regard, and they do not relate this reporting to any evaluation of the quality of their work. The Tribunal will continue to look for alternatives to this indicator.

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