Future-Oriented Financial Statements for the Years Ending March 31, 2011 and March 31, 2012

The Office of the Registrar of the Supreme Court of Canada

Statement of Management Responsibility
Future-Oriented Statement of Operations (Unaudited)
Notes to Future-Oriented Financial Information


Statement of Management Responsibility

Responsibility for the compilation, content, and presentation of the accompanying future-oriented financial information for the years ending March 31, 2011 and March 31, 2012 rests with departmental management. The future-oriented financial information has been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector. The future-oriented financial information is submitted for Part III of Estimates (Report on Plans and Priorities), and will be used in the department's Departmental Performance Report to compare with actual results.

Management is responsible for the integrity and objectivity of the information contained in future-oriented financial information and for the process of developing assumptions. Assumptions and estimates are based upon information available and known to management at the time of development, reflect current business and economic conditions, and assume a continuation of current governmental priorities and consistency in departmental mandate and strategic objectives. Much of the future-oriented financial information is based on these assumptions, best estimates, and judgment and gives due consideration to materiality. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. However, as with all such assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.

The actual results achieved for the fiscal years covered in the accompanying future-oriented financial information will vary from the information presented and the variations may be material. (Note: The department is preparing these statements as part of a two year pilot project and readers should be cautioned that this is the second year of the pilot.)

 

Roger Bilodeau, Q.C.
Registrar
Ottawa, Ontario

 

Cathy Gaudet
Acting Director General,
Corporate Services
Ottawa, Ontario

Future-Oriented Statement of Operations (unaudited)

For the Year Ended March 31
(in thousands of dollars)

Court
Operations
2012
Process
Payments of
Allowances to
the Judges
2012
Internal Services
2012
Total
2012
Salaries and benefits 14,363 5,325 6,787 26,475
Professional services 4,575 27 1,429 6,031
Accommodation 3,629 - 1,684 5,313
Amortization of tangible capital assets - - 1,547 1,547
Materials, office supplies and equipment 171 19 617 807
Library materials 1,132 2 - 1,135
Travel 501 188 19 707
Telecommunications services 41 1 299 341
Equipment rentals 25 - 199 224
Repairs & maintenance 16 - 81 97
Printing services 167 1 7 174
Postage and courier 40 - 8 48
Other - - 3 3
 
Total expenses 24,660 5,562 12,680 42,902
 
Less: Revenues (200) - - (200)
 
Net cost of Operations 24,460 5,562 12,680 42,702

For the Year Ended March 31
(in thousands of dollars)

Court
Operations
2011
Process
Payments of
Allowances to
the Judges
2011
Internal Services
2011
Total
Forecast
2011
Salaries and benefits 13,628 5,245 6,481 25,354
Professional services 4,510 26 1,350 5,886
Accommodation 3,617 - 1,616 5,233
Amortization of tangible capital assets - - 1,693 1,693
Materials, office supplies and equipment 169 19 611 799
Library materials 1,121 2 - 1,123
Travel 496 186 18 700
Telecommunications services 41 1 299 341
Equipment rentals 25 - 197 222
Repairs and maintenance 16 - 80 96
Printing services 165 - 7 172
Postage and courier 40 - 8 48
Other - - 3 3
 
Total expenses 23,828 5,479 12,363 41,670
 
Less: Revenues (200) - - (200)
 
Net cost of Operations 23,628 5,479 12,363 41,470

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

Notes to Future-Oriented Financial Information for the years ended March 31, 2011 and March 31, 2012

1. Authority and Objectives

Created by an Act of Parliament in 1875, the Supreme Court of Canada is Canada's final court of appeal. It serves Canadians by deciding legal issues of public importance, thereby contributing to the development of all branches of law applicable within Canada. The independence of the Court, the quality of its work and the esteem in which it is held both in Canada and abroad contribute significantly as foundations for a secure, strong and democratic country founded on the Rule of Law. In accordance with the Supreme Court Act, the Supreme Court of Canada consists of the Chief Justice and the eight puisne judges. The Supreme Court of Canada is an important national institution, positioned at the pinnacle of the judicial branch of government in Canada.

The Office of the Registrar of the Supreme Court of Canada provides all necessary services and support for the Court to process, hear and decide cases. It also serves as the interface between litigants and the Court.

2. Underlying Assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the department as described in the Report on Plans and Priorities.

These future-oriented statements have been prepared:

  • As at January 31, 2011;
  • On the basis of government policies, government priorities, and external environment at the time the future-oriented financial information was finalized;
  • According to the requirements of Treasury Board Accounting Policies which are based on Canadian generally accepted accounting principles for the public sector;
  • On the basis that the resources provided will enable the Office of the Registrar of the Supreme Court of Canada to deliver the expected results specified in the Report on Plans and Priorities;
  • On the basis of historical cost and trend analysis.

The Office of the Registrar of the Supreme Court of Canada removed the former one-to-one relationship between the strategic outcome and the program activity with approval from the Treasury Board in the summer of 2010. The two former sub-activities described as Management of Court Cases and Library Services were merged under the single program activity titled "Court Operations". This groups together the four core activities which enable the Court to process hearings and decisions: (i) Registry services, (ii) Law branch, (iii) Library and Information Management, and (iv) the publication of the Court's case reports. The former sub-activity titled Process Payments to the Supreme Court Pursuant to the Judges Act has become a program activity and has been reworded as "Process Payments of Various Allowances to Supreme Court Judges Pursuant to the Judges Act". For the purpose of the Statement of operations, this activity is referred to as "Payments of Allowances to the Judges".

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2010-2011 and for 2011-2012, actual results achieved are likely to vary from the forecast information presented, and this variation could be material.

Once the Report on Plans and Priorities is presented, the Office of the Registrar of the Supreme Court of Canada will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing estimates. Variances will be explained in the Departmental Performance Report.

4. Summary of Significant Accounting Policies

The future-oriented financial information has 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 Office of the Registrar of the Supreme Court of Canada is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the Office of the Registrar of the Supreme Court of Canada 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 future-oriented statement of operations are not necessarily the same as those provided through appropriations from Parliament. Note 5 provides a high-level reconciliation between the bases of reporting.

(b) Forecasted revenues – Sales and other revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

(c) Forecasted expenses – Expenses are recorded on an accrual basis:

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

(d) Employee and federally appointed Supreme Court of Canada Judges future benefits

  1. Employee pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government of Canada. The Office of the Registrar of the Supreme Court of Canada's contributions to the Plan are charged to expenses in the year incurred and represent its total obligation to the Plan. Current legislation does not require the Office of the Registrar of the Supreme Court of Canada to make contributions for any actuarial deficiencies of the Plan.
  2. Employee 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.
  3. Federally appointed Supreme Court of Canada judges pension benefits: Eligible federally appointed judges and their survivors are entitled to fully indexed annuities providing that the judges meet minimum age and service requirements. The main benefits paid from this plan are recorded on a pay-as-you-go basis. They are included in the Statement of Operations as a component of salaries and benefits and the judges' contributions are credited to revenue.

(e) Tangible capital assets – All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. The Office of the Registrar of the Supreme Court of Canada has many works of art and historically significant assets such as rare books, paintings, busts, clocks and other works of art. In accordance with Treasury Board of Canada policy, these values are not capitalized as they are considered non-operational heritage assets. Intangible assets are not capitalized.

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

Asset Class Amortization Period
Machinery and equipment 3 - 10 years
Office furniture and equipment 5 - 10 years
Computer equipment 3 - 10 years
Computer software 3 - 10 years
Motor vehicles 3 years
Leasehold improvements 5 years
Assets under construction Once in service, in accordance with asset type

(f) Measurement uncertainty – The preparation of the future-oriented financial information requires management to make estimates and assumptions that affect the reported amounts of all the assets, liabilities, revenues and expenses reported in the future-oriented financial statements. Assumptions are based upon information available and known to management at the time of development, reflect current business and economic conditions, and assume a continuation of current governmental priorities and consistency in departmental mandate and strategic objectives. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. Nonetheless, as with all such estimates and assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.

5. Parliamentary Appropriations

The Office of the Registrar of the Supreme Court of Canada receives all 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, the Office of the Registrar of the Supreme Court of Canada has different net results of operation for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Authorities requested:

(in thousands of dollars)

Forecast
2012
Forecast
2011
Authorities requested
Vote 50 - Program expenditures 21,716 23,989
Contributions to employee benefit plans 2,431 2,281
Judges' salaries, allowances and annuities 5,568 5,488
  29,715 31,758
Additional authorities anticipated 1,656 -
 
Forecast authorities available 31,371 31,758

Forecast authorities requested for the year ending March 31, 2012 are the planned spending amounts presented in the 2011-12 Report on Plans and Priorities. Estimated authorities requested for the year ending March 31, 2011 include amounts presented in the 2010-11 Main Estimates and Supplementary Estimates (A) and (B), planned for presentation in Supplementary Estimates (C) and estimates of amounts to be allocated at year-end from Treasury Board central votes.

(b) Reconciliation of net cost of operations to requested authorities:

(in thousands of dollars)

Forecast
2012
Forecast
2011
Net cost of operations 42,702 41,470
Adjustments for items affecting net cost of operations but not affecting authorities:
 
Services provided without charge from other government departments (10,030) (9,875)
Amortization of tangible capital assets (1,547) (1,693)
Revenue not available for spending 200 193
Gain (loss) on disposal and write-down of tangible capital assets - 7
Increase in vacation and compensatory leave (32) (30)
Increase in employee future benefits (160) (144)
Other (3) 12
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 245 243
Use of proceeds from disposal of tangible capital assets (7) -
Increase in prepaid expenses 3 12
 
  31,371 30,180
Forecast current year lapse - 1,578
Forecast authorities available 31,371 31,758

6. Employee Benefits

(a) Pension benefits: The Office of the Registrar of the Supreme Court of Canada'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/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Office of the Registrar of the Supreme Court of Canada contribute to the cost of the Plan. The 2011-12 projected expense amounts to $1,937,391 (projected at $1,899,403 in 2010-11).

The Office'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 Office of the Registrar of the Supreme Court of Canada 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, estimated as at March 31, is as follows:

(in thousands of dollars)

Forecast
2012
Forecast
2011
Accrued benefit obligation, beginning of year 2,845 2,646
Forecasted expense for the year 160 415
Expected benefits paid during the year - (216)
 
Accrued benefit obligation, end of year 3,005 2,845

7. Related party transactions

The Office of the Registrar of the Supreme Court of Canada is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The Office of the Registrar of the Supreme Court of Canada enters into transactions with these entities in the normal course of business and on normal trade terms.

(a) Services provided without charge

During the year the Office of the Registrar of the Supreme Court of Canada is forecasted to receive services without charge from other government departments. These services have been recognized in the Office's future-oriented Statement of Operations as follows:

(in thousands of dollars)

Forecast
2012
Forecast
2011
Interpretation services provided by PWGSC 129 128
Worker's compensation provided by HRSDC 38 40
Accommodation provided by PWGSC 5,313 5,233
Security services provided by the RCMP 3,272 3.268
Employer's contributions to health & dental insurance plans 1,278 1,202
Legal services provided by Justice Canada - 4
  10,030 9,875