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Section 3: Supplementary Information

3.1 Financial Highlights

The financial highlights presented within this DPR are intended to serve as a general overview of Industry Canada’s financial position and operations. The Department’s financial statements can be found on the Industry Canada website.


Condensed Statement of Financial Position At March 31, 2010	($ thousands)
	% Change	2010	*2009 (Restated)**
Assets
Financial Assets	62	1,431,810	881,680
Non-Financial Assets	-7	101,421	109,505
Total	55	1,533,231	991,185
Liabilities
Accounts Payable and Accrued Liabilities	49	968,177	649,713
Deferred Revenue	-12	4,376,729	4,957,325
Other Liabilities	6	524,242	495,521
Total Liabilities	-4	5,869,148	6,102,559

Equity	-15	(4,335,917)	(5,111,374)
Total	55	1,533,231	991,185


Condensed Statement of Financial Operations For the period ended March 31, 2010	($ thousands)
	% Change	2010	*2009 (Restated)**
Expenses
Transfer Payments	247	1,741,907	501,621
Operating Expenses	6	849,745	802,974
Total Expenses	99	2,591,652	1,304,595
Revenues
Sales of Services	43	1,103,940	771,734
Other	-3	19,156	19,826
Total Revenues	42	1,123,096	791,560
Net Cost of Operations	186	1,468,556	513,035

* Industry Canada adopted the new Treasury Board Accounting Standard 1.2 for departmental financial statements. The change has resulted in comparative data restatements for the 2009 fiscal year.

Summary of 2010 Financial Results

The financial results presented in Industry Canada financial statements are shaped by the three strategic objectives that aim to help make Canadian industry more productive and competitive in the global economy, thus improving the economic and social well-being of Canadians.

In 2009–10, Industry Canada managed numerous stimulus grants and contributions projects through the EAP, which resulted in a significant increase in expenses from $1.28 billion in 2008–09 to $2.59 billion in 2009–10. The Government of Canada announced a set of initiatives aimed at providing a quick recovery from the economic downturn and improving access to financing, supporting small businesses, helping municipalities build stronger communities through investments in infrastructure, and providing short-term support for key industrial and commercial sectors.

Accounting changes

During the year, Industry Canada adopted the revised Treasury Board accounting policy regarding departmental financial statements. The first change in the accounting policy of Industry Canada is the recording of amounts due from the Consolidated Revenue Fund ($750 million in 2009–10) as an asset on the Statement of Financial Position. The purpose of this account is to record the cash Industry Canada will be able to draw from the Consolidated Revenue Fund in future years to meet some of its liabilities. The second change was the removal of Industry Canada’s investment in the Business Development Bank of Canada (BDC) and related dividend revenue. The removal of these accounts was performed since Industry Canada is not deemed to control the BDC. This is rather a responsibility of the Industry Portfolio under the Minister of Industry.

Assets

Total assets were $1.5 billion for 2009–10, an increase of $542 million (55%). The increase can be mostly attributed to the changes in accounting policy. There was also an increase in loans provided during the year for approximately $80 million. This can be partially attributed to the ITO, which provided loans through the SADI program to 8 companies in the Canadian aerospace and defence industry for R&D of new products and/or services that are expected to enhance the industry’s competitiveness in years to come. It can also be attributed to contributions through the Automotive Innovation Fund administered by Knowledge Advantage in Targeted Canadian Industries. A new agreement here was signed to support the development and commercialization of a wide range of powertrain components and modules with greater durability, less weight and higher quality. Accounts receivable grew by $90 million for amounts due from various organizations for radio licences unpaid under the Marketplace Frameworks and Regulations for Spectrum, Telecommunications and the Online Economy.

Assets by Type graph D

Liabilities

Total liabilities were $5.87 billion for 2009–10, a decrease of $219 million (4%). Accounts Payable increased by 50% this fiscal year, primarily a reflection of temporary increases to transfer payment programs for the EAP. An example of this would be entitlements to provinces under the Infrastructure Canada Program which are unpaid at March 31. Counteracting this change in payables was a decrease of $400 million in deferred revenue to radio spectrum licences sold in the 2GHz range, managed by the Marketplace Frameworks and Regulations for Spectrum, Telecommunications and the Online Economy. This decrease represents deferred spectrum auction revenue, which is recognized as earned revenue over a 10-year period.

Liabilities by Type graph D

Expenses

Total expenses were $2.59 billion in 2009–10, an increase of $1.28 billion (99%). The increase is mainly attributable to increased transfer payment expenses. The EAP provided Industry Canada with $1.41 billion in transfer payment program funding through various temporary transfer payment programs designed to help boost the Canadian economy. Recognized as expenses within the financial statements is $1.26 billion. Program delivery is reflected through the increase in these reported expenses and includes transfer payments for KIP ($2 billion over 2 years) under Canada’s Research and Innovation Capacity. This program was designed to enhance the infrastructure of Canadian colleges and universities. $1 billion in funding has been expensed in 2009–10 and is reflected in this increase to the reported transfer payment expense. The Community Adjustment Fund, under Community, Economic and Regional Development, expensed $116 million to address the short-term economic needs of Canadian communities impacted by the global recession. The Marquee Tourism Events Program, under Global Reach and Agility in Targeted Canadian Industries ($46 million), helps create jobs and increase tourism by enhancing annually recurring world-class events in Canada. In addition, FedDev Ontario delivered the Recreational Infrastructure Canada program ($30 million), a fund which helped renew and expand public recreation infrastructure in Canada.

Expenses by Type graph D

Revenue

Total revenues were $1.12 billion in 2009–10, an increase of $332 million (42%). The majority of reported revenue in the departmental financial statements is attributed to the recognition of radio spectrum revenue managed by the Marketplace Frameworks and Regulations for Spectrum, Telecommunications and the Online Economy. The increase in this type of revenue reflects the recognition of radio spectrum auction licence fees received in prior fiscal years, particularly $4.26 billion received and deferred in 2008–09 for the 2GHz range. Other sales of services represent legislative fees and registrations through organizations such as Corporations Canada ($12 million), the Office of the Superintendent of Bankruptcy ($42 million), Competition Bureau ($23 million), and Measurement Canada ($1 million), which report under Marketplace Frameworks and Regulations.

Revenue by Type graph D