ARCHIVED – Financial Statements for the year ended March 31, 2009

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• Statement of Management Responsibility
• Statement of Operations
• Statement of Financial Position
• Statement of Equity of Canada
• Statement of Cash Flow
• Notes to the Financial Statements

Citizenship and Immigration Canada
Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2009 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 Citizenship and Immigration Canada’s (CIC’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 the Department.

The Audit Committee ensures that the Deputy has independent objective advice and assurance on the adequacy of CIC’s risk management, control and accountability processes. It ensures that there are effective arrangements in place to monitor and follow-up on management action plans responding to recommendations from internal audits, the Office of the Auditor General (OAG), or other sources. It reviews CIC corporate risk profiles. It also reviews the arrangements established by management to promote public service values and to ensure compliance with laws, regulations, policies, and standards of ethical conduct.

The financial statements of the Department have not been audited.

Citizenship and Immigration Canada
Statement of Operations

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

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

Citizenship and Immigration Canada
Statement of Financial Position

At March 31 (Unaudited)
(in thousands of dollars)

Contingent Liabilities (Note 12)
Contractual Obligations (Note 13)

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

Citizenship and Immigration Canada
Statement of Equity of Canada

At March 31 (Unaudited)
(in thousands of dollars)

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

Citizenship and Immigration Canada
Statement of Cash Flow

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

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

Citizenship and Immigration Canada
Notes to the Financial Statements

(Unaudited)

1. Authority and Objectives

Citizenship and Immigration Canada (CIC) was established on June 23, 1994 by the Department of Citizenship and Immigration Act. It is a Department named in Schedule I of the Financial Administration Act and currently reports to Parliament through the Minister of Citizenship and Immigration Canada.

The Department’s key strategic outcomes are:

• Migration that significantly benefits Canada’s economic, social and cultural development, while protecting the health, safety and security of Canadians
• International recognition and acceptance of the principles of managed migration consistent with Canada’s broader foreign policy agenda, and protection of refugees in Canada
• Successful integration of newcomers into society and promotion of Canadian citizenship.

These three strategic outcomes are reflected in the following key activities.

• Immigration Program: Design, develop and implement policies and programs to facilitate the entry of permanent residents in a way that contributes to the economic, social and cultural development of Canada, while protecting the health, safety and security of Canadians.
• Temporary Resident Program: Design, develop and implement policies and programs to facilitate the entry of temporary workers, students and visitors in a way that contributes to Canada’s economic, social and cultural development, while protecting the health, safety and security of Canadians.
• Canada’s Role in International Migration and Protection: Assert Canada’s position in the context of international migration in order to protect Canada’s right to set its citizenship, immigration and refugee policy; to meet legal and international obligations; to steer the international agenda on migration management issues, including its linkages with other public policy sectors; to contribute to managing migration internationally; and to support development of Canada’s image abroad.
• Refugee Program: Fulfilling Canada’s international obligations by coming to the aid of persons in need of protection in Canada, and maintaining its humanitarian tradition by protecting refugees abroad and resettling them in Canada.
• Integration Program: Develop policies and programs to support the settlement, resettlement, adaptation and integration of newcomers into Canadian society by delivering orientation, adaptation and language programs for newcomers.
• Citizenship Program: Design, develop and implement policies and programs to administer the acquisition of Canadian citizenship, and to enhance the values and promote the rights and responsibilities of Canadian citizenship.

CIC administers the Citizenship Act and the Immigration and Refugee Protection Act.

CIC is funded by a budgetary lapsing authority. Revenues, including fees and rights, are deposited to the Consolidated Revenue Fund and are not available for use by the Department. Fees and rights are collected through the Immigration and Refugee Protection Regulations as well as through the Citizenship Regulations. Employee benefits are authorized by a statutory authority. CIC issues immigration loans through a non-budgetary non-lapsing authority.

2. Summary of Significant Accounting Policies

These 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 Department is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the Department 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 bases of reporting.

(b) Net Cash Provided by Government – The Department operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Department is deposited to the CRF and all cash disbursements made by the Department 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 is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non-respendable revenue recorded by the Department. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Revenues

• Revenues from regulatory fees are recognized in the accounts based on the services provided during the year.
• Other revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
• Revenues that have been received but not yet earned are recorded as deferred revenues. The recognition of revenues from fees is considered deferred until the application is processed, while the recognition of revenues from rights (right of citizenship and right of permanent residence) is deferred until the right is granted.

(e) Expenses – Expenses are recorded on the accrual basis.

• Grants are recognized in the year in which the conditions for payment are met.
• 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, workers’ compensation costs, legal services and international immigration services are recorded as operating expenses at their estimated cost.

(f) 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 Department’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 the Department 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 and loans receivables are stated at amounts expected to be ultimately realized. They are valued at cost. Interest revenue is recognized on a receivable when earned. A provision is made for receivables where recovery is considered uncertain. Loans that cannot be recovered are written off after receiving Parliamentary approval in accordance with the Debt Write-off Regulations.

(h) Contingent liabilities – Contingent liabilities are potential liabilities which 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.

(i) Inventories – Inventories consist of forms and equipment held for future program delivery and not intended for resale. They are valued at cost.

(j) 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 other revenues and other expenses in notes 4 and 5.

(k) Tangible capital assets – All tangible capital assets and leasehold improvements 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 asset as follows:

l. 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, 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 contingent liabilities, the liability for employee severance benefits, the useful life of tangible capital assets and deferred revenues. 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 Department of Citizenship and Immigration 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 Department 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
(in thousands of dollars)

(b) Appropriations provided and used
(in thousands of dollars)

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

4. Expenses

The following table presents details of expenses by category.

(in thousands of dollars)

(in thousands of dollars)

5. Revenues

The following table presents details of revenues by category.

(in thousands of dollars)

6. Accounts receivable and Advances

The following table presents details of accounts receivable and advances.

(in thousands of dollars)

7. Loans Receivable

In accordance with the Immigration and Refugee Protection Act, CIC can issue immigration loans up to a maximum of $110,000,000. Since February 28, 1995, all immigration loans bear interest at a rate determined by the Minister of Finance at the beginning of each calendar year. Regulations provide for a period of up to 7 years for the repayment of the loans. The interest rate on outstanding interest-bearing loans varies between 1.75% to 10.733%. Allowance for doubtful accounts is made for loans when recovery is considered uncertain.

(in thousands of dollars)

(in thousands of dollars)

There were no write-offs in 2008–2009.

8. Tangible Capital Assets

(in thousands of dollars)

Amortization expense for the year ended March 31, 2009 is $5,868 (2008: $6,518)

9. Deferred revenues

The deferred revenue account was established to record fees and rights derived from the Citizenship Act and Regulations and the Immigration and Refugees Protection Act and Regulations where the service has yet to be provided or the right granted.

(in thousands of dollars)

10. Other liabilities

The Immigrant Investor Program allows qualified immigrants to gain permanent residence in Canada by making an investment of $400,000 in the Canadian economy. The investment is returned to the investor, without interest, five years and two months after payment.

After meeting other immigration requirements, applicants are then required to pay their $400,000 investment to the Receiver General for Canada. CIC acts as an agent for the approved provincial funds by collecting the investments and distributing them to the approved funds according to a prescribed allocation formula (50 percent divided equally and 50 percent distributed according to provincial gross domestic product). The investment is distributed to the participating provinces and territories (Ontario, British Columbia, Prince Edward Island, Northwest Territories, Manitoba, Newfoundland and Labrador and Nova Scotia) on the first day of the second month following receipt from the investor.

The participating provinces and territories are responsible for investing their allocations to strengthen their economies and to create or continue employment. They report to CIC quarterly, and after the five-year holding period, remit the $400,000 investment back to CIC. CIC, within 30 days of receipt of the $400,000 from the participating funds, returns the $400,000 investment to the investor (without interest).

The value of financial transactions processed during the year is as follows.

(in thousands of dollars)

11. Employee Benefits

(a) Pension benefits: The Department’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/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Department contribute to the cost of the Plan. The 2008–2009 expense amounts to $31,782,375 ($30,178,712 in 2007–2008), which represents approximately 2.0 times the contributions by employees (2.1 in 2007–2008).

The Department’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, years of service and final salary. These severance benefits are not prefunded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:

(in thousands of dollars)

12. Contingent liabilities

Claims and litigation

Claims have been made against the Department in the normal course of operations. 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. Based on the Department’s legal assessment of potential liability, $175,000 was recorded at March 31, 2009.

13. Contractual obligations

The nature of the Department’s activities can result in some large multi-year contracts and obligations whereby the Department will be obligated to make future payments when the services/goods are received. Significant contractual obligations (including transfer payments and professional services) that can be reasonably estimated are summarized as follows:

(in thousands of dollars)

14. Related party transactions

The Department 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. During the year, the Department also received services that were obtained without charge from other government departments as presented in part (a).

(a)  Services provided without charge by other government departments
(in thousands of dollars)

During the year the Department received, without charge from other departments, accommodation, legal fees, the employer’s contribution to the health and dental insurance plans and the workers’ compensation costs. Additionally, the Department received international immigration services from Department of Foreign Affairs and International Trade, staff and facilities at missions abroad. These services without charge have been recognized in the Department’s Statement of Operations as follows.

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 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
(in thousands of dollars)

15. Transfer from another government department

The Multiculturalism program was transferred by Order in Council from Canadian Heritage to Citizenship and Immigration Canada on October 30, 2008. The budgets and liabilities for multiculturalism did not transfer until the fiscal year ending March 31, 2010, therefore all transactions for the fiscal year ending March 31, 2009 are reflected in the financial statements of Canadian Heritage.