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Strategic Outcome: To advance reconciliation among former students of Indian Residential Schools and the Government of Canada | ||||
---|---|---|---|---|
Actual Spending 2007-08 | Alignment to Government of Canada Outcome Area | |||
Budgetary | Non-budgetary | Total | ||
Program Activity: Claims Resolution | $519.9 | 0 | $519.9 | Healthy Canadians |
($ millions) | 2005– 2006 Actual | 2006– 2007 Actual | 2007–2008 | |||
---|---|---|---|---|---|---|
Main Estimates | Planned Spending | Total Authorities | Actual | |||
Claims Resolution | $159.2 | $224.5 | $596.7 | $592.6 | $623.1 | $519.9 |
Total | $159.2 | $224.5 | $596.7 | $592.6 | $623.1 | $519.9 |
Less: Non-respendable revenue | 0 | 0 | N/A | 0 | N/A | 0 |
Plus: Cost of services received without charge | $5.3 | $6.5 | N/A | $8.8 | N/A | $6.9 |
Total Departmental Spending | $164.5 | $231.0 | N/A | $601.4 | N/A | $526.8 |
Full-time Equivalents | 208 | 276 | N/A | 604 | N/A | 456 |
Vote or Statutory Item | Truncated Vote or Statutory Wording | 2007–2008 | |||
---|---|---|---|---|---|
Main Estimates | Planned Spending | Total Authorities | Actual | ||
55 | Operating expenditures | $452.9 | $448.8 | $460.4 | $385.1 |
60 | Grants and contributions | $134.0 | $134.0 | $159.0 | $131.1 |
(S) | Contributions to employee benefit plans | $9.8 | $9.8 | $3.7 | $3.7 |
Total | $596.7 | $592.6 | $623.1 | $519.9 |
Explanatory Note:
The $519.9 million in actual spending includes $186.4 million of payments under the Settlement Agreement. Payments under the Common Experience Program are reported through Service Canada.
Indian Residential Schools Resolution Canada
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 departmental 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 department's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the department's Departmental Performance Report is consistent with these financial statements.
Management maintains a system of financial management and internal control desired 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 the department.
The financial statements of the department have not been audited.
Statement of Operations (Unaudited )
For the Year Ended March 31
(in thousands of dollars )
2008 | 2007 | ||
---|---|---|---|
Transfer payments | |||
Transfer payments to Aboriginal groups | 317,479 | 160,599 | |
Less: Change in allowance for claims and litigation (Note 6) | (1,835,088) | (148,783) | |
Net transfer payments | (1,517,609) | 11,816 | |
Operating expenses | |||
Professional and special services (1) | 146,770 | 52,120 | |
Salaries and employee benefits | 31,970 | 22,025 | |
Communications professional Services | 12,656 | 2,811 | |
Other operating | 9,898 | 3,908 | |
Accommodation | 4,754 | 3,027 | |
Travel | 4,740 | 3,502 | |
Amortization of tangible capital assets | 759 | 522 | |
Total operating expenses | 211,547 | 87,915 | |
Total Expenses | (1,306,062) | 99,731 | |
Revenues | |||
Miscellaneous revenues | 6 | 5 | |
Total Revenues | 6 | 5 | |
Net Cost of Operations | (1,306,068) | 99,726 |
(1) Professional and special services for 2008 includes $84.6M in legal fees paid as a result of the implementation of the Settlement Agreement.
The accompanying notes form an integral part of these financial statements.
Statement of Financial Position (Unaudited )
At March 31
(in thousands of dollars )
2008 | 2007 | ||
---|---|---|---|
ASSETS | |||
Financial assets | |||
Cash | 5,620 | 2,729 | |
Accounts receivable (Note 4) | 6,759 | 5,113 | |
Advances | 48 | 16 | |
Total financial assets | 12,427 | 7,858 | |
Non-financial assets | |||
Prepaid expenses | - | 6 | |
Tangible capital assets (Note 5) | 1,417 | 1,838 | |
Total non-financial assets | 1,417 | 1,844 | |
TOTAL | 13,844 | 9,702 | |
Liabilities | |||
Accounts payable and accrued liabilities | 110,408 | 25,055 | |
Vacation pay and compensatory leave | 478 | 478 | |
Allowance for claims and litigation (Note 6) | 967,307 | 2,802,395 | |
Employee severance benefits (Note 7) | 5,772 | 3,627 | |
1,083,965 | 2,831,555 | ||
Equity of Canada | (1,070,121) | (2,821,853) | |
TOTAL | 13,844 | 9,702 |
Contingent liabilities (Note 6)
The accompanying notes form an integral part of these financial statements.
Statement of Equity of Canada (Unaudited )
For the Year Ended March 31
(in thousands of dollars )
2008 | 2007 | ||
---|---|---|---|
Equity of Canada, beginning of the year | (2,821,853) | (2,971,014) | |
Net cost of operations | 1,306,068 | (99,726) | |
Current year appropriations used (Note 3) | 519,864 | 224,524 | |
Refund of previous year's expenditures | 256 | 120 | |
Change in the net position in the Consolidated Revenue Fund (Note 3) | (81,332) | 17,774 | |
Services received without charge from other departments (Note 8) | 6,876 | 6,469 | |
Equity of Canada, end of the year | (1,070,121) | (2,821,853) |
The accompanying notes form an integral part of these financial statements.
Statement of Cash Flow (Unaudited )
For the Year Ended March 31
(in thousands of dollars )
2008 | 2007 | ||
---|---|---|---|
Operating activities | |||
Cash paid for: | |||
Transfer payments to Aboriginal groups | (317,479) | (160,599) | |
Salaries and Employee benefits | (27,893) | (19,921) | |
Professional and special services | (146,581) | (33,277) | |
Travel | (4,740) | (3,502) | |
Communications professional Services | (12,656) | (2,811) | |
Other operating | (10,156) | (4,027) | |
Other Adjustments | 81,075 | (17,894) | |
Advances and prepaid expenses | (26) | (9) | |
Cash received from: | |||
Miscellaneous revenues | 6 | 5 | |
Cash used by operating activities | (438,450) | (242,035) | |
Capital investment activities | |||
Acquisitions of tangible capital assets | (338) | (383) | |
Cash used by capital investment activities | (338) | (383) | |
Financing activities | |||
Net cash provided by Government of Canada | 438,788 | 242,418 |
The accompanying notes form an integral part of these financial statements.
Indian Residential Schools Resolution Canada (IRSRC) was established by Order–in-Council (P.C. 2001-994) on June 4, 2001 and is a department listed in Schedule IV of the Financial Administration Act.
IRSRC is dedicated to resolving the legacy for the estimated 80,000 individuals who attended Indian residential schools and meeting the needs of the more than 13,000 former students seeking compensation for abuses they suffered at these schools.
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:
Asset Class | Amortization period |
---|---|
Machinery & equipment | 5 to 15 years |
Informatics hardware | 3 to 5 years |
Informatics software | 3 to 5 years |
IRSRC receives most of 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, IRSRC has different net costs of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:
2008 | 2007 | ||
---|---|---|---|
(in thousands of dollars) | |||
Net cost of operations | (1,306,068) | 99,726 | |
Adjustments for items affecting net cost of operations but not affecting appropriations: | |||
Add (Less): | |||
Change in allowance for claims and litigation (Note 6) | 1,835,088 | 148,783 | |
Legal services from Justice Canada not charged to appropriations | - | (16,776) | |
Services provided without charge | (6,876) | (6,469) | |
Amortization of tangible capital assets | (759) | (522) | |
Refund of previous year's expenditures | 256 | 120 | |
Employee severance benefits | (2,145) | (729) | |
Other adjustment | (27) | (14) | |
519,469 | 224,119 | ||
Adjustments for items not affecting net cost of operations but affecting appropriations: | |||
Add (Less): | |||
Capital Acquisitions of tangible assets | 369 | 383 | |
Prepaid expenses and advances | 26 | 22 | |
Current year appropriations used | 519,864 | 224,524 |
2008 | 2007 | ||
---|---|---|---|
(in thousands of dollars) | |||
Vote 55 - Operating Expenditures | 460,390 | - | |
Vote 60 - Grants and Contributions | 159,000 | - | |
Vote 52 - Operating Expenditures | - | 234,333 | |
Vote 54 - Contributions | - | 6,000 | |
Statutory amounts | 3,732 | 2,737 | |
Less: | |||
Lapse available for future years | (103,258) | (18,546) | |
Current year appropriations used | 519,864 | 224,524 |
2008 | 2007 | ||
---|---|---|---|
(in thousands of dollars) | |||
Net cash provided by Government | 438,788 | 242,418 | |
Refund of previous year's expenditures | (256) | (120) | |
Change in the net position in the Consolidated Revenue Fund | |||
Variation in accounts receivable and advances | (1,678) | (514) | |
Variation in accounts payable and accrued liabilities | 85,353 | 1,513 | |
Other adjustments | (2,343) | (18,773) | |
81,332 | (17,774) | ||
Current year appropriations used | 519,864 | 224,524 |
The following table presents details of accounts receivable:
2008 | 2007 | ||
---|---|---|---|
(in thousands of dollars) | |||
Receivables from other Federal Government departments and agencies | 6,828 | 5,113 | |
Receivables from external parties | (69) | - | |
Total | 6,759 | 5,113 |
The receivables from external parties were credited to FRA 11221 in error and, therefore, the actual balance should be a debit of $69,000.
(in thousands of dollars) | Cost | Accumulated amortization | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Capital asset class | Opening balance | Acquisi- tions |
Disposals & write- offs |
Closing balance | Opening balance | Amortiz- ation |
Disposals & write- offs |
Closing balance | 2008 Net book value | 2007 Net book value | ||
Machinery and equipment | 31 | - | (31) | - | - | - | - | - | - | 31 | ||
Informatics hardware | 1,116 | 351 | - | 1,467 | 481 | 311 | - | 792 | 675 | 635 | ||
Informatics software | 1,807 | 18 | - | 1,825 | 635 | 448 | - | 1,083 | 742 | 1,172 | ||
2,954 | 369 | (31) | 3,292 | 1,116 | 759 | - | 1,875 | 1,417 | 1,838 |
Amortization expense for the year ended March 31, 2008 is $759,000 (2007 - $522,000).
Claims and litigation
IRSRC was established to resolve claims and to address issues arising from the legacy of Indian residential schools. There are 12,469 claims being managed by the department in this regard, including class action claims. In May 2006, the department reached an independent settlement agreement to resolve these claims. The settlement agreement was implemented in September 2007 by the courts. IRSRC has recorded a liability of $967 million in 2008 ($2,802 million in 2007) to reflect the estimated costs to settle claims. The adjustment to the liability of $1,835 million has been recorded against transfer payments to Aboriginal groups on the Statement of Operations.
(a) Pension benefits: IRSRC 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/Québec Pension Plans benefits and they are indexed to inflation.
Both the employees and the department contribute to the cost of the Plan. The 2007-08 expense amounts to $2,720,745 ($2,017,300 in 2006-07) which represents approximately 2.2 times (2.2 in 2006-07) the contributions by employees.
IRSRC'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 department provides severance benefits to its employees based on eligibility, year 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 | 3,627 | 2,898 | |
Expense for the year | 2,229 | 924 | |
Benefits paid during the year | (84) | (195) | |
Accrued benefit obligation, end of year | 5,772 | 3,627 |
IRSRC is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The department enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the department 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 department received without charge from other departments, accommodation, legal fees and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the department's Statement of Operations as follows:
2008 | 2007 | ||
---|---|---|---|
(in thousands of dollars) | |||
Accommodation | 4,754 | 3,027 | |
Employer's contribution to the health and dental insurance plan | 1,933 | 1,375 | |
Legal Services | 189 | 2,067 | |
Total | 6,876 | 6,469 |
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 and audit services provided by the Office of the Auditor General, are not included as an expense in the Department’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 and agencies (1) & (2) | 6,828 | 5,113 | |
Accounts Payable to other government and agencies | 6,355 | 3,978 |
(1) A receivable of $6,037,840 in 2007-08 ($3,668,823 in 2006-07) is a credit adjustment made by Treasury Board Secretariat to the amount contributed by IRSRC to the Employee Benefit Plan.
(2) The receivable figure for 2007 has been adjusted from $3,969,000 to $5,113,000 to include the GST Refundable Advance Account.
Pursuant to Order in Council P.C. 2008-805 dated April 25, 2008, Indian Residential Schools Resolution Canada (IRSRC) was amalgamated with Indian and Northern Affairs Canada (INAC) under the Minister of INAC, effective June 1, 2008. This amalgamation will result in an equity adjustment in the 2008-2009 fiscal year. At March 31, 2008, the net assets of INAC included total assets of $909,619,000 and total liabilities of $14,688,518,000. INAC's assets are comprised mainly of accounts receivable and loans, while their liabilities are comprised mainly of allowance for claims and litigation, environmental liabilities, and trust accounts. For the year ended March 31, 2008, INAC's net cost of operations was $7,992,565,000, comprised mainly of transfer payments.
Comparative figures have been reclassified to conform to the current year’s presentation.
Details on Transfer Payment Programs
Response to Parliamentary Committees and External Audits
Internal Audits and Evaluations