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SECTION 3: SUPPLEMENTARY INFORMATION

3.1 Departmental link to the Government of Canada outcomes

Strategic outcome: Increased achievement of development goals consistent with Canadian foreign policy objectives
Program activities	Actual spending 2007-2008			Alignment to Government of Canada outcome area
	Budgetary	Non-budgetary	Total
Countries of concentration	758,885,648	0	758,885,648	Global poverty reduction through sustainable development
Fragile states and countries experiencing humanitarian crisis	716,436,642	0	716,436,642	Global poverty reduction through sustainable development
Selected countries and regions	449,779,367	40,337,170	490,116,537	Global poverty reduction through sustainable development
Multilateral, international and Canadian institutions	1,235,072,645	0	1,235,072,645	Global poverty reduction through sustainable development

 

Strategic outcome: Sustained support and informed action by Canadians in international development
Program activities	Actual spending 2007-2008			Alignment to Government of Canada outcome area
	Budgetary	Non-budgetary	Total
Engaging Canadian citizens	53,909,438	0	53,909,438	Global poverty reduction through sustainable development

3.2 Financial tables

Table 1: Comparison of planned to actual spending (including FTEs)

($millions)	2005-2006 Actual	2006-2007 Actual	2007-2008
			Main Estimates	Planned Spending	Total Authorities	Actual
Budgetary
Countries of Concentration			825.98	826.21	774.82	758.89
Fragile States and Countries Experiencing Humanitarian Crisis			598.76	618.24	719.72	716.44
Selected Countries and Regions			612.07	612.24	468.39	449.78
Multilateral, International and Canadian Institutions			915.11	915.36	1,259.78	1,235.07
Engaging Canadian Citizens			74.64	74.66	54.72	53.91
Geographic Programs	1,399.20	1,563.21
Multilateral Programs	1,280.21	1,080.76
Canadian Partnership	272.84	273.41
Policy Coherence	67.97	64.03
Engaging Canadians	24.62	33.26
Total Budgetary	3,044.84	3,014.67	3,026.54	3,046.71	3,277.43	3,214.08
Non-budgetary
Multilateral Programs	3.49	3.32
Canada Investment Fund for Africa	25.09	25.27	19.00	19.00	45.58	40.34
Institutions (IFI) - Capital Subscriptions			3.64	3.64	3.64
Total Non-budgetary	28.59	28.59	22.64	22.64	49.23	40.34
Total Agency	3,073.43	3,043.26	3,049.19	3,069.35	3,326.66	3,254.42
Less: Non-respendable revenue	47.20	23.40	0.00	0.00	0.00	95.30
Plus: Cost of services received without charge	18.58	19.65	0.00	23.18	0.00	18.94
Net Cost of Agency	3,044.81	3,039.51	3,049.19	3,092.53	3,326.66	3,159.12
Full Time Equivalents	1,607	1,671		1,676		1,791

1. Excludes $215.03 million in issuance of notes issued to the International Financial Institution Fund accounts.
2. Spending authority was increased by $110 million when Bill C-52 received the royal assent in 2007-2008.
3. There were revenues of $89 million as a gain for revaluation of notes payable due to the value fluctuation of the Canadian dollar.
4. Variance: CIDA's 2007-2008 total authorities were 72.2 million above the actual, $43 million in the aid budget, $20.3 million in the operating budget, $3.6 million for capital subscriptions and $5.3 million in the Canada Investment Fund for Africa.

Table 2: Voted and statutory items

Voted or StatutoryItem	Truncated Vote orStatutory Wording ($ thousands)	2007-2008
		Main Estimates	Planned Spending	Total Authorities	Total Actuals
	Budgetary
20	Operating expenditures	207,214	208,062	235,958	215,706
25	Grants and contributions	2,534,539	2,553,859	2,517,123	2,474,027
(S)	Minister for International Cooperation - Salary and motor car allowance	75	75	74	74
(S)	Payments to the International Financial Institution Fund Accounts	259,706	259,707	301,846	301,846
(S)	Contributions to employee benefit plans	25,009	25,009	23,626	23,626
(S)	Spending of proceeds from the disposal of surplus Crown assets			3	3
(S)	Loss for revaluation at year-end			88,801	88,801
(S)	Transfer payments in connection with the Budget Implementation Act, 2007	0	0	110,000	110,000
	Total Budgetary	3,026,543	3,046,712	3,277,431	3,214,083
	Non-budgetary
L30	Issuance of notes to the International Financial Institution Fund Accounts	¨	¨	¨	¨
L35	Issuance and payment of notes to International Financial Institutions - Capital Subscriptions	0	0	0	0
L40	Investment contributions pursuant to section 3 of the Canada Fund for Africa Act	19,000	19,000	45,583	40,337
(S)	Payments to International Financial Institutions - Capital Subscriptions	3,643	3,643	3,643	0
	Total Non-budgetary	22,643	22,643	49,226	40,337
	Total Agency	3,049,186	3,069,355	3,326,657	3,254,420

The variance between the total authorities and the actual spending is $72.2 million. From the grants and contributions budget, $1.0 million was not spent and a further $42 million are frozen allotments that will be entirely reprofiled to 2008-2009 for the Canada Fund for Africa; $20.3 million were lapsed from the operational budget, with $1.2 million of this in Treasury Board frozen allotments; $8.9 million in non-budgetary expenses did not materialize.

Note: The following tables can be found on the TBS's website at: http://www.tbs-sct.gc.ca/dpr/2007-2008/info/info-eng.asp

• Loans, investments, and advances (non-budgetary)
• Source of respendable and non-respendable revenue
• User fees
• Policy on service standards for external fees
• Details on transfer payments programs
• Sustainable Development Strategy
• Response to parliamentary committees and external audits
• Internal audits and evaluations

3.3 Financial statements

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2008 and all information contained in these statements rests with management of the Canadian International Development Agency (CIDA). 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 CIDA's financial transactions. Financial information submitted to the Public Accounts of Canada and included in CIDA'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 with prescribed 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 CIDA.

CIDA's financial statements have not been audited.

Margaret Biggs President	________________________ Date
Christine Walker A / Chief Financial Officer	________________________ Date

The unaudited financial statements are prepared in accordance with accrual accounting principles. The unaudited supplementary information presented in the financial tables in the DPR is prepared on a modified cash basis of accounting in order to be consistent with appropriations-based reporting. Note 3 on page 71 of the unaudited financial statements reconciles these two accounting methods.

Canadian International Development Agency Statement of Operations (unaudited) for the year ended March 31 (in thousands of dollars)
	2008	2007
Expenses (Note 4)		(Note 18)
Multilateral, International and Canadian Institutions	$ 1,149,791	$
Countries of Concentration	761,040
Fragile States and Countries Experiencing Humanitarian Crisis	608,287
Selected Countries and Regions	412,954
Engaging Canadian Citizens	54,202
Total expenses	2,986,274	3,041,152
Revenues (Note 5)
Multilateral, International and Canadian Institutions	89,542
Countries of Concentration	8,443
Selected Countries and Regions	8,124
Fragile States and Countries Experiencing Humanitarian Crisis	9
Engaging Canadian Citizens	8
Total revenues	106,126	27,538
Net cost of operations	$ 2,880,148	$ 3,013,614

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

Canadian International Development Agency Statement of Financial Position (unaudited) as at March 31 (in thousands of dollars)
	2008	2007
Assets
Financial assets
Accounts receivable and advances (Note 6)	$ 4,947	$ 5,435
Loans to developing countries and international financial institutions (Note 7)	159,818	168,469
Investments and advances to international financial institutions (Note 8)	5,663,827	5,536,717
Allowance for valuation of investments and advances to international financial institutions (Note 8)	(5,663,827)	(5,536,717)
Canada Investment Fund for Africa (Note 9)	100,000	100,000
Total financial assets	264,765	273,904
Non-financial assets
Prepaid expenses	105,755	105,267
Tangible capital assets (Note 10)	2,549	2,948
Total non-financial assets	108,304	108,215
Total	373,069	382,119
Liabilities
Accounts payable and accrued liabilities	300,983	687,862
Vacation pay and compensatory leave	8,449	8,241
Notes payable to international financial institutions (Note 11)	28,791	115,873
Accrued liability for matching funds programs	72,509	154,201
Employee severance benefits (Note 12)	33,081	31,184
Other liabilities (Note 13)	1,840	5,815
Total liabilities	445,653	1,003,176
Equity of Canada	(72,584)	(621,057)
Total	$ 373,069	$ 382,119

Contingent liabilities (Note 14)
Contractual obligations (Note 15)

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

Canadian International Development Agency Statement of Equity of Canada (unaudited) as at March 31 (in thousands of dollars)
	2008	2007
Equity of Canada, beginning of year	$ (621,057)	$ (511,819)
Net cost of operations	(2,880,148)	(3,013,614)
Current year appropriations used (Note 3)	3,469,452	3,233,183
Revenue not available for spending	(8,568)	(12,085)
Change in net position in the Consolidated Revenue Fund (Note 3 (c))	(51,201)	(336,368)
Services provided without charge by other government departments (Note 16)	18,938	19,646
Equity of Canada, end of year	$ (72,584)	$ (621,057)

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

Canadian International Development Agency Statement of Cash Flow (unaudited) for the year ended March 31 (in thousands of dollars)
	2008	2007
Operating activities
Cash received from:
Interest and service fees on loans	$ 2,427	$ 4,196
Other revenues	1,233	3,882
	3,660	8,078
Cash paid for:
Transfer payments	(2,856,230)	(2,418,740)
Salaries and employee benefits	(166,140)	(157,054)
Operating and maintenance	(73,890)	(70,176)
	(3,096,260)	(2,645,970)
Cash used by operating activities	(3,092,600)	(2,637,892)
Investment activities
Net acquisitions of capital assets	(586)	(450)
Decrease in loans	26,566	26,368
Increase in investments and advances	(302,725)	(247,489)
Increase in the Canada Investment Fund for Africa	(40,337)	(25,267)
Cash used for investment activities	(317,082)	(246,838)
Financing activities
Net cash provided by Government of Canada	$ 3,409,682	$ 2,884,730

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

1. Authority and objectives

The Canadian International Development Agency (CIDA) is designated as a department for the purposes of the Financial Administration Act by Order-in-Council P.C. 1968-923 of May 8, 1968. The authority for the CIDA program and related purposes is found in the Department of Foreign Affairs and International Trade Act, in the Annual Appropriations Act and in the International Development (Financial Institutions) Assistance Act. CIDA is the lead government organization responsible for Canada's Official Development Assistance (ODA).

The three goals of Canadian foreign policy are the promotion of prosperity, the protection of Canadians and global security, and the projection of Canadian values. CIDA's mandate is to support sustainable development in developing countries, in order to reduce poverty and to contribute to a more secure, equitable and prosperous world. CIDA also has a mandate to support democratic development and economic liberalization in the countries in transition in Eastern Europe and the former Soviet Union. CIDA fulfills its mandate through five main business lines:

• Countries of Concentration program activities involve programming long-term development assistance in selected countries of concentration. CIDA has long-standing relationships with a limited number of countries of concentration. These countries have goals and significant development needs in areas where Canada provides added value. The focus is on enhancing their capacity to achieve their development goals.

• Fragile States and Countries Experiencing Humanitarian Crisis program activities involve programming development and/or humanitarian assistance in fragile states and/or countries experiencing humanitarian crises. Fragile states present a complex and challenging situation, yet Canada's action is critical to creating a more stable and secure environment. To help fragile states restore the capacity of their public institutions and civil societies, CIDA must provide effective and equitable long-term development investments. In countries experiencing humanitarian crisis brought on by natural disasters or conflicts, CIDA focuses on helping people improve their situation. This means returning key health, nutrition, mortality, stability and other indicators to pre-crisis levels for all people as soon as possible. To achieve this, CIDA must provide effective, and timely, humanitarian aid.

• Selected Countries and Regions program activities involve programming development assistance in selected countries and regions eligible for Canadian international assistance. The countries and regions in this grouping are at varying stages of development, but all have some level of strategic importance to their neighbours and/or to Canada. They also play a key role in addressing regional dimensions of development, including transboundary issues like pollution, conflict, communicable disease and natural resource management. Initiatives with selected countries and regions are designed to assist them to achieve stability and/or development goals, and are delivered in partnership with the private sector, NGOs, academia, ethnic communities and other levels of government. The aid focus is to complement other Canadian government departmental objectives, and to build upon the linkages established between Canadian partners and their local partners in selected countries and regions. Policy dialogue and advice also complement CIDA's programming efforts.

• Multilateral, International and Canadian Institutions program activities support programming development assistance and engaging with selected multilateral institutions and Canadian/International organizations. A considerable portion of CIDA programming is devoted to providing assistance to, and through, multilateral or international organizations, which play important roles in providing development assistance worldwide, through financial contributions, expertise, and implementation of projects on the ground. CIDA supports organizations whose mandates, objectives and capacities to deliver development initiatives are consistent with Government of Canada objectives and priorities.

• Engaging Canadian Citizens program activities provide opportunities for Canadians to increase their awareness, deepen their understanding and ensure their greater engagement in international development. The Agency undertakes a range of initiatives to inform and engage Canadians, including outreach to youth, support for the public engagement activities of Canadian partners, support for mass media and education initiatives to increase awareness and understanding of international development and cooperation issues among Canadians.

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

CIDA is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to CIDA do not parallel financial reporting according to 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

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

(c) Change in net position in the consolidated revenue fund

Represents the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non respendable revenue recorded by CIDA. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Revenues

Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues. CIDA's revenues mainly consist of foreign exchange gain on revaluation as well as interest and service fees on loans.

(e) Expenses

Expenses are recorded on the accrual basis. CIDA's expenses mainly consist of operating transactions, grants and contributions and foreign exchange loss on revaluation.

• Grants are recognized in the year in which the conditions for payment are met. In the case of grants that do not form part of an existing program, the expense is recognized when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.

• Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement.

• 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, the employer's contribution to the health and dental insurance plans and legal services are recorded as operating expenses at their estimated cost.

(f) Employee future benefits

1. Pension benefits: Eligible employees participate in the Public Service Superannuation Plan, a multi-employer, defined benefit, pension plan administered by the Government of Canada. CIDA's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require CIDA 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.

(g) Accounts receivable and advances

Accounts receivable and advances are stated at amounts expected to be ultimately realized. An allowance is taken for receivables where recovery is considered uncertain.

(h) Loans to developing countries and international financial institutions (IFI)

Loans to developing countries and International Financial Institutions for international development assistance are recorded at cost and are adjusted to reflect the concessionary terms of those loans made on a long-term, low interest or interest-free basis. The discount determined at the date of the issuance is amortized to revenue using a straight-line amortization. Any interest or service fees revenue is recognized with the passage of time and according to the terms of the loan agreement. However, when specific loan balances are deemed uncollectible, interest and service fees revenue ceases to be accrued on these loans. No new loans have been recorded by CIDA since April 1, 1986.

An allowance for valuation is further used to reduce the carrying value of the loans to amounts that approximate their net realizable value. The allowance is determined based on the Government's identification and evaluation of countries that have formally applied for debt relief, estimated probable losses that exist on the remaining portfolio, and changes in the economic conditions of sovereign debtors.

Any loans written off or forgiven are presented as an integral part of the Countries of Concentration expenses in the Statement of Operations and distinctly under Transfer payments in the note on expenses, in the fiscal year during which the required Parliamentary authority is obtained and the government of Canada writes off or forgives the loan amounts owing to CIDA. Should subsequent recoveries arise, they are presented in the revenue for Countries of Concentration in the Statement of Operations and distinctly in the note on revenues in the fiscal year during which the monies are received.

See note 7 for more details.

(i) Investments and advances to international financial institutions (IFI)

Investments and advances to international financial institutions are recorded at cost.

Investments

Investments consist of subscriptions to the share capital of a number of international financial institutions and are composed of both paid-in and callable capital.

Subscriptions to international organizations do not provide a return on investment, but are repayable on termination of the organization or withdrawal from it. Paid-in capital is made through a combination of cash payments and the issuance of non-interest bearing, non-negotiable notes payable to the organization. Callable share capital is composed of resources that are not paid to the banks but act as a guarantee to allow them to borrow on international capital markets to finance their lending program.

Advances

Advances are issued to international financial institutions that use these funds to issue loans to developing countries at concessionary terms.

For these investments and advances to international financial institutions, an allowance is established based on their estimated realizable value.

See note 8 for more details.

(j) Prepaid expenses

CIDA has the authority to make payments under the terms of a contribution agreement before the expenditures are incurred. The portion of a payment which is intended to cover expenses to be incurred in a subsequent fiscal year is recorded as prepaid expenses.

(k) Tangible capital assets

All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost.

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

Asset Class	Amortization period
Communication equipment	3 years
Informatics equipment	5 years
Computer Software	3-5 years
Other equipment	3-5 years
Vehicles	5 years

(l) Notes payable to international financial institutions (IFI)

Notes payable to international financial institutions represent non-interest bearing, non-negotiable demand notes for share capital subscriptions and advances that are later presented for encashment according to the terms of the agreement. Amounts pertaining to notes already issued and the related future encashment obligations are presented in the Statement of Financial Position under Notes payable to international financial institutions, while the amounts for notes payable that will be both issued and encashed under the terms of signed agreements are presented in note 15 on contractual obligations.

(m) Contingent liabilities

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

(n) Foreign currency transactions

Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars using the rate of exchange in effect on March 31. Gains and losses resulting from foreign currency transactions are included in the Statement of Operations, and shown in Notes 4 and 5.

(o) Measurement uncertainty

The preparation of these financial statements in accordance with Treasury Board accounting policies are consistent with Canadian generally accepted accounting principles for the public sector, which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are in determining the allowance for doubtful accounts, allowance for loans, the useful life of tangible capital assets, contingent liabilities and the liability for employee severance benefits. 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

CIDA 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, CIDA 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
	(in thousands of dollars)
Net cost of operations	$ 2,880,148	$ 3,013,614
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (Less):
Amortization of tangible capital assets	(1,088)	(1,557)
Bad debts expense	(388)	(9,284)
Justice Canada's legal fees	-	(596)
Services provided without charge	(18,938)	(19,646)
Refunds of prior years expenditures	7,324	10,912
Gains on foreign exchange	89,069	9,339
Other revenue	2,902	3,125
Allowance for valuation of loans, investments and advances	146,084	117,472
Vacation pay and compensatory leave	(208)	(278)
Employee severance benefits	(1,897)	(4,897)
Contingent liability related to the Budget Implementation Act, 2007	110,000	(110,000)
	3,213,008	3,008,204
Adjustments for items not affecting net cost of operations but affecting appropriations:
Add (Less):
Capital acquisitions	586	450
Prepaid expenses	489	6,017
Advances / subscriptions to International Financial Institutions	215,032	193,245
Payments to the Canada Investment Fund for Africa	40,337	25,267
Current year appropriations used	$ 3,469,452	$ 3,233,183

(b) Appropriations provided and used

	2008	2007
	(in thousands of dollars)
Appropriations provided
Budgetary
Vote 20 (30) - Operating expenditures	$ 235,958	$ 218,202
Vote 25 (35) - Grants and contributions	2,517,123	2,472,339
Statutory amounts	524,351	429,568
Total Budgetary	3,277,432	3,120,109
Non-Budgetary
Vote L30 (L40) - Issuance of notes to the Fund Accounts	215,032	189,922
Vote L35 (L45) - Issuance of notes for Capital Subscriptions	-	3,324
Vote L40 (L50) - Contribution to the Canada Investment Fund for Africa	45,583	74,906
Statutory amounts	7,360,374	8,077,389
Total Non-Budgetary	7,620,989	8,345,541
Total appropriations provided	10,898,421	11,465,650
Less:
Appropriations available for future years	(7,356,735)	(8,077,390)
Lapsed appropriations: Operating	(20,253)	(12,807)
Lapsed appropriations: Grants and contributions	(43,096)	(92,624)
Statutory appropriations lapsed	4	(7)
Lapsed non-budgetary appropriations	(8,889)	(49,639)
Current year appropriations used	$ 3,469,452	$ 3,233,183

Notes: Vote numbers of 2006-07 corresponding to the equivalent Vote numbers of 2007-08 are presented in brackets.

Of the $20.3M lapsed appropriations for operating expenses, $1.2 M was in Treasury Board frozen allotments and the Agency should be able, pending TB approval, to carry forward $10.4 M of this authority to 2008-09. Of the $43.1M lapsed appropriations for grants and contributions, $42M were in Treasury Board frozen allotments.

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

	2008	2007
	(in thousands of dollars)
Net cash provided by Government	$ 3,409,682	$ 2,884,730
Revenue not available for spending	8,569	12,085
Change in net position in the Consolidated Revenue Fund
Variation in accounts receivable and advances	488	10,837
Variation in accounts payable and accrued liabilities	(276,879)	103,015
Allowances related to loans, investments and advances to developing countries and international financial institutions	207,897	234,854
Other adjustments	119,695	(12,338)
	51,201	336,368
Current year appropriations used	$ 3,469,452	$ 3,233,183

4. Expenses

The following table presents details of expenses by category:

	2008	2007
	(in thousands of dollars)
Transfer payments
Other countries and international organizations	$ 2,636,913	$ 2,769,645
Operating
Salaries and employee benefits	179,322	172,150
Loss on foreign exchange	88,813	9,311
Professional and special services	39,684	44,690
Travel and communication	17,168	16,948
Rentals	11,255	10,619
Repair and maintenance	5,520	3,743
Machinery and equipment	4,810	1,879
Other	1,313	1,326
Amortization of tangible capital assets	1,088	1,557
Bad debts	388	9,284
Total operating expenses	349,361	271,507
Total expenses	$ 2,986,274	$ 3,041,152

5. Revenues

The following table presents details of revenues by category:

	2008	2007
	(in thousands of dollars)
Amortization of discount on loans	$ (14,154)	$ (15,074)
Gains on foreign exchange	(89,069)	(9,339)
Interest and service fees on loans	(2,282)	(2,579)
Other revenues	(621)	(546)
Total revenues	$ (106,126)	$ (27,538)

6. Accounts receivable and advances

Accounts receivable and advances for CIDA consist mainly of:

• Amounts to be recovered where the recipient has not complied with the terms and conditions of the contribution agreement for which a payment has been made.
• Salaries to be recovered for CIDA's employees on secondment in another department or in a private organization.

The following table presents details of accounts receivable and advances:

	2008	2007
	(in thousands of dollars)
Interest and service fees on loans	$ 640	$ 6,669
Receivables from other Federal Government departments and agencies	2,989	3,301
Receivables from external parties	7,126	9,070
Accountable and standing advances	113	70
	10,868	19,110
Less: Allowance for doubtful accounts on receivables from external parties, and on interest and service fees on loans	(5,921)	(13,675)
Total	$ 4,947	$ 5,435

7. Loans to developing countries and international financial institutions

The following table presents details of loans to developing countries and international financial institutions:

	2008	2007
	(in thousands of dollars)
(a) 30 year term, 7 year grace period, unsecured, 3 percent interest per annum, with the final repayment in March 2005:
Cuba	$ 9,547	$ 9,547
(b) 35 year term, 4 year grace period, unsecured, 5 percent interest per annum, semi-annual interest repayments with first principal repayment due January 2017 and final repayment in July 2026:
Egypt	44,996	44,996
(c) 50 year term, 10 year grace period, unsecured, non-interest bearing, with final repayments between March 2015 and September 2035:
African Development Bank	1,594	1,719
Algeria	6,614	7,228
Andean Development Corporation	1,937	2,063
Argentina	168	187
Bolivia	594	636
Brazil	230	251
Central American Bank for Economic Integration	727	803
Chile	932	1,030
Colombia	263	289
Dominican Republic	3,650	3,887
Ecuador	4,152	4,457
Guatemala	1,881	2,031
Indonesia	185,480	195,918
Malaysia	1,483	1,546
Malta	400	425
Mexico	25	28
Morocco	7,208	8,087
Myanmar (Burma)	8,306	8,306
Pakistan	447,508	447,508
Paraguay	180	200
Peru	37	41
Philippines	1,646	1,743
Sri Lanka	86,578	92,118
Thailand	17,940	18,787
Tunisia	51,887	56,830
(d) 53 year term, 13 year grace period, unsecured, non-interest bearing, with the final repayment in September 2025:
Algeria	18,676	20,544
Subtotal	904,639	931,205
Less:
Unamortized discount	(596,976)	(607,848)
Subtotal	307,663	323,357
Less:
Allowance for valuation	(147,845)	(154,888)
Total	$ 159,818	$ 168,469

In 2007-2008, the Government of Canada, as represented by CIDA, entered into an agreement with the Government of Pakistan to forgive its outstanding $447 million loan. In order to expire its debt obligation, the Government of Pakistan is required to make education sector investments that are equivalent to the current present value of its debt ($117.4 million). According to the agreement, these investments are to be made over a five-year period, and Pakistan's debt is to be written down proportionally by CIDA as the investments are made. To this day, no education sector investments have been reported by Pakistan to CIDA and consequently, no debt write down has been performed.

Notes: Grace period refers to interval from date of issuance of the loan to first repayment of loan principal.

The loan with the Philippines was issued in Canadian dollars. However, it is reimbursable in Philippine pesos in equivalent Canadian dollar semi-annual instalments of $48,580 until September 2024. The instalments are converted to Philippine pesos using the foreign exchange rate in effect at the time of repayment.

8. Investments and advances to international financial institutions

The following table presents details of investments and advances to international financial institutions:

	2008	2007
	(in thousands of dollars)
Investments
African Development Bank	$ 109,460	$ 115,240
Asian Development Bank	162,609	178,975
Caribbean Development Bank	20,177	21,916
Inter-American Development Bank	184,876	207,534
	477,122	523,665
Advances
African Development Fund	1,915,393	1,836,154
Asian Development Bank-Special	27,027	27,027
Asian Development Fund	1,921,547	1,868,753
Caribbean Development Bank - Agricultural Development Fund	2,000	2,000
Caribbean Development Bank - Commonwealth Caribbean Regional	4,106	4,618
Caribbean Development Bank-Special	200,933	188,956
Global Environment Facility Trust Fund	428,410	392,140
Inter-American Development Bank - Fund for Special Operations	338,934	361,200
Multilateral Investment Fund	27,173	20,857
International Bank for Reconstruction and Development	20,530	23,092
International Fund for Agriculture Development	216,958	204,532
International Monetary Fund	11,260	12,665
Montreal Protocol Mutilateral Fund	72,434	71,058
	5,186,705	5,013,052
Subtotal investments and advances	5,663,827	5,536,717
Less:
Allowance for valuation	(5,663,827)	(5,536,717)
Total	$ -	$ -

The allowance for valuation reduces the net realizable value of the investments and advances to international financial institutions to zero, as it is not expected that CIDA will recover these investments and advances in the future.

9. Canada Investment Fund for Africa (CIFA)

The CIFA is a joint public-private sector initiative designed to provide risk capital for private investments in Africa that generate growth. The CIFA is a direct response to the New Partnership for Africa's Development (NEPAD) and the G8 Africa Action Plan. The main objectives of the CIFA are to optimize public-private investment in the Fund, to confer a beneficial development impact on Africa by way of increased foreign direct investment and to optimize the beneficial impact of the Fund's activities on Canadian interests.

The Government of Canada is a limited partner in the CIFA and its commitment towards the Fund is subject to matching funds of other investors and shall be equal to the lesser of: (i) $100 million and (ii) the aggregated commitments of all other limited partners of the partnership.

The CIFA is presented at cost. Since the aggregated commitments of all other limited partners exceed $100 million as at March 31, CIDA's commitment amounts to $100 million on that date. It is reflected distinctly in the Statement of Financial Position with a corresponding accrued liability for upcoming disbursements included in the Accrued liability for matching funds programs.

The following table presents details of the Canada Investment Fund for Africa:

	2008	2007
	(in thousands of dollars)
Cumulated payments as at March 31	$ 104,503	$ 53,327
Cumulated returns of capital as at March 31	(5,027)	(2,966)
Accrued liability as at March 31	524	49,639
Total	$ 100,000	$ 100,000

10. Tangible capital assets

(in thousands of dollars)

Cost					Accumulated amortization				Net book value
Capital asset class	Opening balance	Acquisitions	Disposal & write-offs	Closing balance	Opening balance	Amortization	Disposal & write-offs	Closing balance	2008	2007
Communication equipment	623	222		845	623	13		636	209	-
Informatic equipment	10,561	233		10,794	8,270	742		9,012	1,782	2,291
Computer software	51	-		51	18	10		28	23	33
Other equipment	1,402	183		1,585	831	304		1,135	450	571
Vehicles	114	47	4	157	61	19	8	72	85	53
Total	12,751	685	4	13,432	9,803	1,088	8	10,883	2,549	2,948

Amortization expense for the year ended March 31, 2008 is $1,087,619 ($1,557,197 in 2007).

11. Notes payable to international financial institutions

The following table presents details of notes payable to international financial institutions:

	2008	2007
	(in thousands of dollars)
Investments
Caribbean Development Bank	$ 7,506	$ 7,774
Advances
Asian Development Fund	1,144	19,195
Caribbean Development Bank-Special	-	46,475
Global Environment Facility Trust Fund	20,141	32,960
Multilateral Investment Fund	-	9,469
Subtotal	21,285	108,099
Total	$ 28,791	$ 115,873

During the year, there were $215,911,048 in note issuances ($189,921,644 in 2007) and $302,725,110 in note encashments ($247,488,547 in 2007).

12. Employee Benefits

(a) Pension benefits: CIDA'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 the Canada/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Agency contribute to the cost of the Plan. The 2007-2008 expense amounts to $17,223,255 ($16,134,095 in 2007-2008), which represents approximately 2.1 times (2.2 in 2007-2008) the contributions by employees.

CIDA'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: CIDA 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 31, is as follows:

	2008	2007
	(in thousands of dollars)
Accrued benefit obligation, beginning of year	$ 31,184	$ 26,287
Expense for the year	4,822	8,318
Benefits paid during the year	(2,925)	(3,421)
Accrued benefit obligation, end of year	$ 33,081	$ 31,184

13. Other liabilities

Other liabilities consist of funds received from external organizations to carry out specific aid projects and to be administered by CIDA on their behalf.

In 2007-2008, the main such liability administered by CIDA was a contribution received from the Government of the Netherlands, acting through the Netherlands Minister for Development Cooperation, to provide significant resources to the education sector in Nicaragua.

Information about the other liabilities, measured as at March 31, is as follows:

	2008	2007
	(in thousands of dollars)
Other liabilities, beginning of year	$ 5,815	$ 922
Amounts received during the year	11,339	6,712
Amounts disbursed during the year	(15,314)	(1,819)
Other liabilities, end of year	$ 1,840	$ 5,815

14. Contingent liabilities

Contingent liabilities for CIDA can be classified into two categories: callable share capital in certain international organizations, and pending and threatened litigation cases.

CIDA detains callable share capital in certain international organizations that could require future payments to those organizations. Callable share capital is composed of resources that are not paid to the organizationsbut act as a guarantee to allow them to borrow on international capital markets to finance their lending program. Callable share capital, which has never been drawn on by the organizations, would only be utilized in extreme circumstances to repay unrecoverable loans, should the organization's reserves not be sufficient. As at March 31, 2008, the callable share capital is valued at $7.4 billion and no provision was recorded for this amount.

CIDA is a defendant in certain pending and threatened litigation cases which arose in the normal course of operations. Legal proceedings for claims totalling approximately $0.4 million ($2 million in 2007) were still pending as at March 31, 2008. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the financial statements.

15. Contractual obligations

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

(in thousands of dollars)

	2009	2010	2011	2012	2013 and thereafter	Total
Transfer payments	1,319,711	747,126	411,821	201,930	85,768	2,766,356
Professional services	8,659	135	135	94	71	9,094
Operating leases	216	175	181	156	96	824
Encashment of notes by International Financial Institutions	224,699	143,387	143,387	3,152	-	514,625
Total	1,553,285	890,823	555,524	205,332	85,935	3,290,899

16. Related party transactions

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

(a) Services provided without charge:

During the year, CIDA received without charge from other departments: accommodation, administrative services pertaining to workers' compensation claims, legal fees and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in CIDA's Statement of Operations as follows:

	2008	2007
	(in thousands of dollars)
Employer's contribution to the health and dental insurance plans	$ 9,921	$ 10,629
Accommodation	8,371	8,183
Legal services	548	834
Administrative charges pertaining to workers' compensation claims	98	-
Total	$ 18,938	$ 19,646

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 costs of some of these services, notably the payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in CIDA's Statement of Operations.

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

	2008	2007
	(in thousands of dollars)
Accounts receivable with other government departments	$ 2,989	$ 3,301
Accounts payable with other government departments	9,915	9,224

17. Subsequent event

On May 15, 2008, CIDA established matching funds programs to provide relief to victims of the cyclone that struck Burma on May 2, 2008, and to victims of the earthquake that occurred in China on May 12, 2008. According to these programs, the Agency committed to paying one dollar in the funds that were created for each dollar paid by Canadian individuals to charitable organizations that have established initiatives to provide relief to affected populations of Burma and China. The funds raised by eligible charitable organizations from Canadians and, consequently, the total obligation that CIDA will have to meet with regards to these matching funds programs in 2008-2009 and in subsequent years amounts to $41.6 million.

18. Comparative information

CIDA modified its defined program activities in 2007-2008. As a result, comparative information for expenses and revenues is not available. Where applicable, other comparative figures have been reclassified to conform to the current year's presentation.

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