Financial Statements for the year ended March 31, 2012


Statement of Management Responsibility including Internal Control over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2012, and all information contained in these statements rests with the management of Citizenship and Immigration Canada (CIC). These financial statements have been prepared by management using the Government’s accounting policies, which are based on Canadian public sector accounting standards.

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 CIC’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in CIC’s Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout CIC and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2012 was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plans are summarized in the annex.

The effectiveness and adequacy of CIC’s system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of CIC’s operations, and by the Departmental Audit Committee, which oversees management’s responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the Deputy Minister of Citizenship and Immigration Canada.

The financial statements of Citizenship and Immigration Canada have not been audited.

 

original signed by Neil Yeates

Neil Yeates

Deputy Minister

original signed by Amipal Manchanda

Amipal Manchanda, CPA, CA

Assistant Deputy Minister

Chief Financial Officer

Ottawa, Canada
August 21, 2012


Citizenship and Immigration Canada
Statement of Financial Position (Unaudited)

As at March 31
(in thousands of dollars)

  2012 2011
    Restated
(note 17)
Liabilities
Accounts payable and accrued liabilities (note 4) $317,224 $216,335
Immigrant Investor Program (note 5) 191,520 65,600
Vacation pay and compensatory leave 18,495 19,175
Deferred revenue (note 6) 257,176 398,146
Employee future benefits (note 7b) 38,024 72,119
Total gross liabilities 822,439 771,375
Liabilities held on behalf of Government
Deferred revenue (note 6) (257,176) (398,146)
Total liabilities held on behalf of Government (257,176) (398,146)
Total net liabilities 565,263 373,229
Financial assets
Due from Consolidated Revenue Fund 506,368 278,372
Accounts receivable and advances (note 8) 27,339 34,407
Loans receivable (note 9) 37,845 34,334
Total gross financial assets 571,552 347,113
Financial assets held on behalf of Government
Accounts receivable and advances (note 8) (19,532) (19,192)
Total financial assets held on behalf of Government (19,532) (19,192)
Total net financial assets 552,020 327,921
Departmental net debt 13,243 45,308
Non-financial assets
Prepaid expenses 9,126 4,450
Inventory (note 10) 4,138 7,246
Tangible capital assets (note 11) 145,656 169,321
Total non-financial assets 158,920 181,017
Departmental net financial position $145,677 $135,709

Contractual obligations (Note 12)
Contingent liabilities (Note 13)

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

original signed by Neil Yeates

Neil Yeates

Deputy Minister

original signed by Amipal Manchanda

Amipal Manchanda, CPA, CA

Assistant Deputy Minister

Chief Financial Officer

Ottawa, Canada
August 21, 2012


Citizenship and Immigration Canada
Statement of Operations and Departmental Net Financial Position (Unaudited)

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

  2012 2012 2011
  Planned Results   Restated
(note 17)
Expenses
Settlement and Integration of Newcomers $974,949 $970,790 $993,833
Migration Control and Security Management 112,462 145,414 84,522
Health Management 98,640 93,570 95,610
Family and Discretionary Immigration 93,585 76,250 86,359
Permanent Economic Residents 97,722 73,357 90,034
Citizenship for Newcomers and all Canadians 64,722 64,250 79,231
Temporary Economic Residents 38,097 54,375 42,261
Refugee Protection 47,658 47,786 53,286
Multiculturalism for Newcomers and all Canadians 32,293 18,722 30,012
Canadian Influence in International Migration and Integration Agenda 2,858 3,963 3,617
Internal Services 282,199 271,143 283,701
Total expenses 1,845,185 1,819,620 1,842,466
Revenues
Immigration service fees 317,152 337,575 347,711
Right of permanent residence 116,345 95,383 80,851
Citizenship service fees 23,517 25,696 22,409
Right of citizenship 14,676 16,977 13,261
Interest on loans 600 451 542
Other 3,929 353 430
Revenues earned on behalf of Government (476,219) (476,422) (465,193)
Total revenues 13 11
Net cost from continuing operations 1,845,185 1,819,607  1,842,455
Transferred operations (note 15)
Expenses 15,484 15,484 23,777
Revenues
Net cost of transferred operations 15,484 15,484  23,777
Net cost of operations before government funding and transfers 1,860,669 1,835,091 1,866,232
Government funding and transfers
Net cash provided by Government   1,362,251 1,569,858
Change in due from the Consolidated Revenue Fund   227,996 15,795
Services provided without charge by other government departments (note 14a)   261,238 270,150
Transfer of assets and liabilities from (to) other government departments (note 15)   (6,426)
Net cost (revenue) of operations after government funding and transfers   (9,968) 10,429
Departmental net financial position – Beginning of year   135,709 146,138
Departmental net financial position – End of year   $145,677 $135,709

Segmented information (note 16)

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


Citizenship and Immigration Canada
Statement of Change in Departmental Net Debt (Unaudited)

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

  2012 2011
Net cost (revenue) of operations after government funding and transfers $(9,968) $10,429
Change due to tangible capital assets
Acquisition of tangible capital assets 6,088 14,173
Amortization of tangible capital assets (20,338) (20,336)
Proceeds from disposal of tangible capital assets (11)
Net (loss) or gain on disposal of tangible capital assets including adjustments (1,610) (5,147)
Transfer to other government departments (7,794)
Total change due to tangible capital assets (23,665) (11,310)
Change due to inventories (3,108) (379)
Change due to prepaid expenses 4,676 2,082
Net increase (decrease) in departmental net debt (32,065) 822
Departmental net debt – Beginning of year 45, 308 44,486
Departmental net debt – End of year $13,243 $45,308

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


Citizenship and Immigration Canada
Statement of Cash Flows (Unaudited)

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

  2012 2011
    Restated
(note 17)
Operating activities
Net cost of operations before government funding and transfers $1,835,091 $1,866,232
Non-cash items:
Amortization of tangible capital assets (20,338) (20,336)
Gain (loss) on disposal of tangible capital assets including adjustments (1,610) (5,147)
Services provided without charge by other government departments (note 14a) (261,238) (270,150)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances (7,408) 6,206
Increase (decrease) in prepaid expenses 4,676 2,082
Increase (decrease) in inventory (3,108) (379)
Increase (decrease) in loans receivable 3,511 (27)
Decrease (increase) in accounts payable and accrued liabilities (100,889) (24,612)
Decrease (increase) in Immigrant Investor Program (125,920) 9,200
Decrease (increase) in vacation pay and compensatory leave 680 (1,099)
Decrease (increase) in employee future benefits 34,095 (6,285)
Transfer of liabilities to other government departments (note 15) (1,368)
Cash used in operating activities 1,356,174 1,555,685
Capital investing activities
Acquisitions of tangible capital assets 6,088 14,173
Proceeds from disposal of tangible capital assets (11)
Cash used in capital investing activities 6,077 14,173
Net cash provided by Government of Canada $1,362,251 $1,569,858

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


Citizenship and Immigration Canada
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

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, Immigration and Multiculturalism

CIC administers the Citizenship Act of 1977 and shares responsibility with the Canada Border Services Agency (CBSA) for the Immigration and Refugee Protection Act (IRPA), which was enacted following a major legislative reform in 2002. On October 30, 2008, CIC also received responsibility from Canadian Heritage to implement the Canadian Multiculturalism Act of 1988.

The Department’s key strategic outcomes are:

  • Migration of permanent and temporary residents that strengthens Canada’s economy
  • Family and humanitarian migration that reunites families and offers protection to the displaced and persecuted
  • Newcomers and citizens participate to their full potential in fostering an integrated society
  • Managed migration that promotes Canadian interests and protects the health, safety and security of Canadians

These four strategic outcomes are delivered with the following program activities.

Permanent Economic Residents: Rooted in legislative requirements outlined in the Immigration and Refugee Protection Act, the focus of this program activity is on the selection and processing of immigrants who can become permanent residents and contribute to Canada’s economic development. The acceptance of qualified permanent residents helps the Government meet its economic objectives, such as building a skilled work force, by addressing immediate and longer term labour market needs. The selection and processing involve the issuance of permanent resident visas to qualified applicants, as well as the refusal of unqualified applicants.

Temporary Economic Residents: Rooted in legislative requirements outlined in the Immigration and Refugee Protection Act, the focus of this program activity is on processing and facilitating the entry into Canada of temporary workers and students. Temporary economic migration benefits Canada’s economic growth. The selection and processing involve the issuance of temporary resident visas, work permits and study permits to qualified applicants, as well as the refusal of unqualified applicants.

Family and Discretionary Immigration: CIC facilitates family reunification by enabling eligible foreign nationals to be sponsored by family members in Canada who are Canadian citizens or permanent residents. Spouses and partners, dependent children (including adopted children), and other eligible relatives such as parents and grandparents are welcomed to Canada under this program. CIC may also grant permanent resident or other status to persons who would not otherwise qualify in any immigration category, in cases where there are strong humanitarian and compassionate considerations, or for public policy reasons. Such exceptional and discretionary immigration measures provide the flexibility to approve deserving cases not anticipated in the legislation.

Refugee Protection: The Refugee Protection Program is in the first instance about saving lives and offering protection to the displaced and persecuted. One arm of the program starts overseas where refugees and persons in refugee-like situations are selected by Canadian visa officers to be resettled as permanent residents to Canada. Flowing from Canada’s international and domestic legal obligations, the in-Canada asylum system evaluates the claims of individuals seeking asylum in Canada and grants permanent residence when a positive decision is rendered by the Immigration and Refugee Board of Canada.

Settlement and Integration of Newcomers: In accordance with the Canadian Multiculturalism Act, the Employment Equity Act and the Immigration and Refugee Protection Act, CIC develops policies and programs to support the settlement, resettlement, adaptation and integration of newcomers into Canadian society focused on information/orientation, language/skills, labour market access and welcoming communities. All permanent residents are eligible for settlement and integration programs. Programming is delivered by third parties (including provincial and municipal governments, school boards and post-secondary institutions, settlement service organizations and other non-governmental actors, and the private sector) across the country. However, accountability for expended funds and attaining outcomes remains with CIC.

Citizenship for Newcomers and all Canadians: The purpose of the Citizenship Program is to administer citizenship legislation and promote the rights and responsibilities of Canadian citizenship. CIC administers the acquisition of Canadian citizenship by developing, implementing and applying legislation, regulations and policies that protect the integrity of Canadian citizenship and allow eligible applicants to be granted citizenship or be provided with a proof of citizenship. In addition, the program promotes citizenship, to both newcomers and the Canadian-born, through various events, materials and projects. Promotional activities focus on enhancing knowledge of Canada’s history, institutions and values, as well as fostering an understanding of the rights and responsibilities of Canadian citizenship.

Multiculturalism for Newcomers and all Canadians: The Multiculturalism Program is the principal means of carrying out the Minister’s responsibilities under the Canadian Multiculturalism Act for promoting the full and equitable participation of individuals and communities of all origins. Grants and contributions to not-for-profit organizations, the private sector, provincial and municipal governments, non-federal public institutions and individuals seek to advance overarching program objectives. These objectives are to: build an integrated, cohesive society (through intercultural understanding, civic memory and pride democratic values, and equality of opportunity); improve the responsiveness of institutions to the needs of a diverse population; and, actively engage in discussions on multiculturalism and diversity at the international level. Direct public outreach and promotional activities by the program primarily target young people. The program assists federal partners to meet their obligations under the act and ensures annual reporting to Parliament on its operation. It also engages with non-federal public institutions seeking to respond to diversity. The program provides a forum for cooperation with provinces and territories and is the locus for Canada’s participation in international agreements and institutions with respect to multiculturalism, anti-racism and related issues.

Health Management: This program activity aims to provide effective immigration health services to manage the health aspect of migrant access and settlement to Canada, and facilitate the arrival of resettled refugees to Canada and their integration while contributing to the protection of the health and safety of all Canadians and contributing to the maintenance of sustainable Canadian health and social services.

The program activity aims to evaluate health risks related to immigration and coordinate with international and Canadian health partners to develop risk management strategies and processes to assess the health of applicants wishing to immigrate to Canada and develop pre-departure, in-transit, and post-arrival interventions. The strategies, processes and interventions are intended to reduce the impact of the risks identified on the health of Canadians and on Canada’s health and social services.

Migration Control and Security Management: In accordance with the Immigration and Refugee Protection Act and Regulations, this program activity aims to ensure the managed migration of people to Canada in order to protect the health, safety and security of Canadians. Even as CIC facilitates the travel of bona fide permanent residents, visitors, students and temporary workers, it also deploys an array of policy interventions to manage access and entry to Canada, including visas, admissibility, information sharing, travel document, and identity management policies. Effective partnerships with public safety-related departments and organizations are an essential component of this program activity.

Under IRPA, all visitors to Canada require a Temporary Resident Visa except where an exemption has been granted under the Regulations. The Temporary Resident Visa requirement is Canada’s primary means of controlling migration and allows for the screening of individuals for health, safety and security risks before they begin travel to Canada. CIC also aims to ensure that admissibility policy continues to provide flexibility to address compelling circumstances that warrant a foreign national’s presence in Canada, while maintaining the integrity of Canada’s immigration system. Information sharing agreements and mechanisms support immigration management and provide security advantages. This program activity supports CIC’s policy initiatives related to identity management and entry document requirements, including the expansion of biometrics to accurately identify foreign nationals entering Canada and the provision of a highly secure proof of status document to all permanent residents. The Permanent Resident Card also serves as a travel document and is required for all commercial travel to Canada.

Canadian Influence in International Migration and Integration Agenda: As part of its mandate, CIC aims to influence the international migration and integration policy agenda. This is done by developing and promoting, together with other public policy sectors, Canada’s position on international migration, integration and refugee protection issues, and through participation in multilateral, regional and bilateral forums. CIC works closely with partner countries to ensure the effective administration of immigration laws through the exchange of information, including biometric data. This international migration policy development helps Canada advance its interests in the context of international migration as well as meet its international obligations and commitments. CIC supports international engagement and partnerships through membership in the International Organization for Migration (IOM), and contribution arrangements with other international migration policy organizations.

Internal Services are groups of activities and resources that help the Department achieve its strategic outcomes. Internal services apply across CIC and are not linked to a specific program. These services include management and oversight, communications, legal, human resources management, financial management, information management, information technology, real property, materiel, acquisition, and travel and other administrative services.

CIC receives most of its funding through annual Parliamentary authorities. 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 using the Government’s accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

(a) Parliamentary authorities

CIC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Department do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2011–12 Report on Plans and Priorities.

The future-oriented financial statements for 2011–2012 have been restated to reflect the revenue net of non-respendable amounts. This restatement resulted in a $476,219,000 increase in net costs of operations before government funding and transfers. In addition, the future-oriented financial statements have also been reclassified to conform to the current year presentation.

(b) Net cash provided by Government

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

(c) Amounts due from or to the CRF

Amounts due from or to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Department is entitled to draw from the CRF without further authorities to discharge its liabilities.

(d) Revenues

Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.

Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue These revenues are recognized in the period in which the related expenses are incurred.

Funds that have been received are recorded as deferred revenue, provided the Department has an obligation to other parties for the provision of goods, services or the use of assets in the future.

Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenues takes place.

Revenues that are non-respendable are not available to discharge the Department’s liabilities. While the Deputy Minister is expected to maintain accounting control, he has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of CIC’s gross revenues.

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

Transfer payments are recorded as expenses when authorization of the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses 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. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.

Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.

Services provided without charge by other government departments for international immigration services, accommodation, legal services, employer’s contributions to the health and dental insurance plans and workers’ compensation 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 pension plan administered by the Government. The Department’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. CIC’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.
  2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. 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 receivable are stated at the lower of cost and net recoverable value. Interest is recognized as revenue and recorded as a receivable when earned. A valuation allowance is recorded for accounts and loans receivable 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 if an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(i) Inventory

Inventory consists of forms and informatics equipment held for future program delivery and not intended for resale. Inventory is valued at cost using the first in, first out method.

(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 at year-end. Gains and losses resulting from foreign currency transactions are included in other revenues or other expenses in the Statement of Operations and Departmental Net Financial Position with the exception of the foreign exchange gain or loss relating to a long-term foreign currency denominated monetary item which is recognized in the financial statements, deferred and amortized to revenue / expense over the remaining life of the monetary item.

(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. CIC does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian reserves and museum collections.

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

Asset class Amortization period
Machinery and equipment 15 years
Informatics hardware 5 years
Software (purchased and developed) 3 to 10 years
Office furniture 10 years
Vehicles 8 years
Leasehold improvements Lesser of remaining term of the lease or
useful life of the improvement

Assets under construction are recorded in the applicable capital asset class and amortized when they become available for use and are not amortized until they become available for use.

(l) Measurement uncertainty

The preparation of these financial statements 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 the deferred revenues, the liability for employee future benefits, the useful life of tangible capital assets, contingent liabilities and allowance for doubtful accounts. 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 Authorities

Citizenship and Immigration Canada receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, CIC 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 authorities used

(in thousands of dollars)

  2012 2011
    Restated
(note 17)
Net cost of operations before government funding and transfers $1,835,091 $1,866,232
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (20,338) (20,336)
Gain (loss) on disposal of tangible capital assets (1,610) (5,147)
Services provided without charge by other government departments (261,238) (270,150)
Decrease (Increase) in vacation pay and compensatory leave 404 (1,099)
Decrease (Increase) in employee future benefits 33,003 (6,285)
Decrease (Increase) in accrued liabilities not charged to authorities (18,287) 1,275
Bad debt expense 968 (1,525)
Refund of prior year expenditures 2,178 2,658
Other (120) (2)
Total items affecting net cost of operations but not affecting authorities (265,040) (300,611)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 6,088 14,173
Refunds of prior year revenues 5,504 8,560
Increase in loans issued 2,722 1,098
Increase (Decrease) in inventory (3,108) (379)
Increase in prepaid expenses 4,676 2,082
Other 281 11
Total items not affecting net cost of operations but affecting authorities 16,163 25,545
Current year authorities used $1,586,214 $1,591,166

(b) Authorities provided and used

(in thousands of dollars)

  2012 2011
Authorities provided:
Vote 1 – Operating expenditures $604,916 $602,353
Vote 5 – Grants and Contributions 966,286 976,737
Vote 7 – Loan Write-Off 1,709
Non-budgetary item 70,915 72,012
Statutory amounts 63,700 65,740
Less:
Lapsed Vote 1: Operating expenditures (35,385) (31,064)
Lapsed Vote 5: Grants and Contributions (17,696) (23,687)
Lapsed Vote 7: Debt Write-Off (25)
Appropriations available for future years (68,206) (70,925)
Current year authorities used $1,586,214 $1,591,166

4. Accounts payable and accrued liabilities

The following table presents details of CIC’s accounts payable and accrued liabilities:

(in thousands of dollars)

  2012 2011
Accounts payable – Other government departments and agencies $9,846 $13,807
Accounts payable – External parties 83,295 90,075
Total accounts payable 93,141 103,882
Accrued liabilities* 224,083 112,453
Total accounts payable and accrued liabilities $317,224 $216,335

* Under Bill C-38 approved June 29th, 2012, CIC will return fees for Federal Skilled Worker applicants who applied before February 27, 2008, and for whom an immigration officer has not made a decision based on selection criteria by March 29, 2012. CIC estimates the return of fees paid by applicants will total approximately $119,000,000. In Canada’s Economic Action Plan 2012, the Government announced savings measures to be implemented by departments over the next three fiscal years starting in 2012–2013. As a result, the Department has recorded at March  31, 2012 an obligation for termination benefits for an amount of $15,700,000 as part of accrued liabilities to reflect the estimated workforce adjustment costs.

5. Immigrant Investor Program

The Immigrant Investor Program allows qualified immigrants to gain permanent residence in Canada by making an investment of $800,000 ($400,000 prior to December 1, 2010) 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 $800,000 ($400,000 prior to December 1, 2010) 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 (Ontario, British Columbia, Saskatchewan, Manitoba, Nova Scotia, Newfoundland and Labrador, New Brunswick and Prince Edward Island) on the first day of the second month following receipt from the investor.

The participating provinces 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 full amount investment back to CIC. Within 30 days of receipt of the full amount from the participating funds, CIC returns this investment to the investor (without interest).

In January 2012, Northwest Territories has officially retracted from the IIP program and returned the sum of $113,120,093 to CIC. The early repayment has been deposited into the IIP specified purpose account, where it will be held until such time as the funds are due to be repaid to the individual investors.

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

(in thousands of dollars)

  April 1, 2011 Receipts Payments March 31, 2012
Immigrant Investor Program $65,600 937,892 811,972 $191,520

6. Deferred revenue

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. Fees are deferred until the application is deemed processed, while rights (right of citizenship and right of permanent residence) are deferred until the right is granted.

The following table presents details of the deferred revenue account:

(in thousands of dollars)

  2012 2011
    Restated
(note 17)
Opening balance $398,146 $394,169
Amounts received 458,611 476,269
Revenue recognized* (480,186) (472,142)
Remissions – reduction of the right of permanent residence (49) (150)
Accrued liability for the Federal Skilled Workers initiative (119,346)
Gross closing balance 257,176 398,146
Deferred revenues held on behalf of Government (257,176) (398,146)
Net closing balance $– $–

*The revenue used to calculate the revenue recognized is not the same as presented in the Statement of Operations and Departmental Net Financial Position. The revenue recognized includes only funds affecting deferred revenue and therefore, excludes refunds of previous year’s revenues, allowance for remission of the right of permanent residence and interest on immigration loans which totals $3,751,000.

7. Employee future benefits

(a) Pension benefits

CIC’s employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. 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 2011-2012 expense amounts to $41,679,400 ($40,197,828 in 2010–2011), which represents approximately 1.8 times (1.9 times in 2010–2011) the contributions by employees.

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

CIC provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

(in thousands of dollars)

  2012 2011
Accrued benefit obligation – Beginning of year $72,119 $65,834
Transferred to other government department,
effective November 15, 2011 (note 15)
(1,092)
Subtotal $71,027 65,834
Expense for the year 4,589 11,818
Benefits paid during the year (37,592) (5,533)
Accrued benefit obligation – End of year $38,024 $72,119

8. Accounts receivable and advances

The following table presents details of the Department’s accounts receivable and advances balances:

(in thousands of dollars)

  2012 2011
 
Restated
(note 17)
Receivables – Other government departments and agencies $21,277 $24,101
Receivables – External parties 5,820 10,477
Employee advances 396 294
Subtotal 27,493 34,872
Allowance for doubtful accounts from external parties (154) (465)
Gross accounts receivable and advances 27,339 34,407
Accounts receivable held on behalf of Government (19 532) (19 192)
Net accounts receivable and advances  $7 807  $15 215

9. 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 6 years for the repayment of the loans. The interest rate on outstanding interest-bearing loans varies from 1.26% to 10.718%. The closing balance of the immigration loans only includes the outstanding principal balance. An allowance for doubtful accounts is made for loans when recovery is considered uncertain.

The following table presents details of the Department’s immigration loans balances:

(in thousands of dollars)

  2012 2011
Immigration loans – Opening balance $39,087 $37,989
Add: New loans issued 14,884 11,637
Less: Repayments of loans (10,817) (10,539)
Less: Loans balance written-off during the year (1,345)
Immigration loans – Closing balance 41,809 39,087
Less: Allowance for uncollectibility (3,964) (4,753)
Total loans receivable $37,845 $34,334

There were no write-offs in 2010-2011 as no Supplementary Estimates (C) were approved by Parliament.

10. Inventory

The following table presents details of the inventory, measured at cost using the first in, first out method.

(in thousands of dollars)

  2012 2011
Forms $3,282 $6,000
Computer equipment 856 1,246
Total inventory $4,138 $7,246

The cost of consumed inventory recognized as an expense in the Statement of Operations and Departmental Net Financial Position is $5,172,442 in 2011-2012 ($5,282,331 in 2010-2011).

11. Tangible capital assets

Cost Accumulated amortization Net book value
Capital asset class Opening balance Acquisitions Adjustments (1) Disposals and write-offs Closing balance Opening balance Amortization Adjustments Disposals and write-offs Closing balance 2012 2011
Machinery and equipment 2,062 (21) (35) 2,006 1,289 135 (9) (15) 1,400 606 773
Informatics hardware 28,850 930 (23,390) (4,913) 1,477 19,153 1,941 (15,696) (4,893) 505 972 9,697
Software (purchased and developed) 240,520 12 6,048 (817) 245,763 86,181 18,052 (12) (781) 103,440 142,323 154,339
Office furniture 1,434 14 (75) (204) 1,169 682 138 (26) (163) 631 538 752
Vehicles 1,031 (107) 924 717 72 (104) 685 239 314
Assets under construction 3,446 5,132 (6,099) (1,501) 978 978 3,446
Total 277,343 6,088 (23,537) (7,577) 252,317 108,022 20,338 (15,743) (5,956) 106,661 145,656 169,321

(1) Adjustments include assets under construction of $6,098,992 that were transferred to Software (purchased and developed) upon completion of the assets

Effective November 15, 2011, CIC transferred information hardware with a net book value of $7,794,000 to the department Shared Services Canada. This transfer is included in the adjustment columns (refer to note 15 for further detail on the transfer).

12. Contractual obligations

The nature of CIC’s activities can result in some large multi-year contracts and obligations whereby CIC will be obligated to make future payments in order to carry out its transfer payment programs or when the services/goods are received.

Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in thousands of dollars)

Fiscal Year 2013 2014 2015 2016 2017 and
thereafter
Total
Total Transfer payments 438,280 283,102 283,102 283,102 283,102 1,570,688

13. Contingent liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown.

Claims and litigation

Claims have been made against the Department in the normal course of operations. These claims include items with pleading amounts and others for which no amount is specified. Based on the Department’s legal assessment of potential liability, no allowance was recorded at March 31, 2012 (no allowance was recorded in 2010–2011). 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.

14. Related party transactions

CIC is related as a result of common ownership to all government departments, agencies, and Crown corporations. CIC enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Department received common services which were obtained without charge from other government departments as disclosed below.

(a) Common services provided without charge by other government departments

During the year, the Department received services without charge from certain common service organizations, related to accommodation, legal services, the employer’s contribution to the health and dental insurance plans, and workers’ compensation coverage. Additionally, the Department of Foreign Affairs and International Trade provides international immigration services at missions abroad, for which CIC has transferred funding. These services provided without charge have been recorded in the Department’s Statement of Operations and Departmental Net Financial Position as follows:

(in thousands of dollars)

  2012 2011
International immigration services $160,345 $172,528
Accommodation 35,992 34,260
Legal services 33,230 34,455
Employer’s contribution to the health and dental
insurance plans
31,514 28,686
Workers’ compensation 157 221
Total $261,238 $270,150

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the 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 and Departmental Net Financial Position.

(b) Other transactions with related parties

(in thousands of dollars)

  2012 2011
Expenses – Other government departments and agencies $85,752 $89,001

Expenses disclosed in (b) exclude common services provided without charge, which are already disclosed in (a).

15. Transfers from/to other government departments

Effective November 15, 2011, CIC transferred responsibility for IT infrastructure to Shared Services Canada in accordance with Order-in-Council 2011–1297, including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, CIC transferred the following assets and liabilities related to IT infrastructure to Shared Services Canada on November 15, 2011.

Also, a tangible capital asset was transferred from CRA to CIC during the year.

(in thousands of dollars)

Assets
Tangible capital assets transferred to SSC
(net book value) (note 11)
$7,803
Tangible capital asset transferred from CRA (9)
Total assets transferred 7,794
Liabilities
Allowance for vacation pay and compensation leave 276
Employee future benefits (note 7b) 1,092
Total liabilities transferred 1,368
Adjustment to the departmental net financial position $6,426

In addition, the 2011 comparative figures have been reclassified on the Statement of Operations and Departmental Net Financial Position to present the revenues and expenses of the transferred operations

During the transition period, CIC continued to administer the transferred activities on behalf of Shared Services Canada. The administered expenses amounted to $9,403,000 for the year. These expenses are not recorded in these financial statements.

16. Segmented information

Presentation by segment is based on the Department’s program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

  Settlement and Integration of Newcomers Migration Control and Security Management Health Management Family and Discretionary Immigration Permanent Economic Residents Citizenship for Newcomers and all Canadians Temporary Economic Residents Refugee Protection Multiculturalism for Newcomers and all Canadians Canadian Influence in International Migration and Integration Agenda Internal Services Total 2012 Total 2011
Restated
(note 17)
Transfer payment
Individuals 38,417 (4) 38,413 39,317
Non-profit organisations 453,746 675 358 11,403 39 466,221 493,698
Other countries and international organizations 1,845 1,845 1,828
Other levels of government within Canada 433,290 433,290 412,816
Total transfer payments 925,453 675 358 11,399 1,884 939,769 947,659
Operating Expenses
Salaries and employee benefits 35,220 118,103 8,963 60,828 58,747 51,492 45,708 37,506 5,997 1,851 185,966 610,381 595,291
Professional and special services 3,691 13,388 83,628 6,157 6,118 5,221 3,292 4,388 638 81 40,787 167,389 176,639
Accommodation 2,562 4,427 698 3,342 2,265 4,204 1,946 2,711 394 82 13,361 35,992 34,260
Transportation and communication 811 4,437 237 1,356 1,273 1,571 1,361 811 218 59 988 13,122 16,142
Amortization of tangible capital assets 3,669 2 3,637 3,875 362 1,852 1,969 3 3,011 18,380 17,387
Utilities, materials and supplies 194 560 36 630 506 700 131 298 32 4 11,272 14,363 19,446
Repairs and maintenance 14 42 166 21 123 6 7 1 2,236 2,616 11,312
Rentals of equipment 85 81 3 120 165 179 65 87 23 7,836 8,644 13,276
Information services 244 32 3 14 349 40 11 9 17 5,686 6,405 9,334
Other 2,516 38 3 2 2,559 1,720
Total operating expenses 45,337 144,739 93,570 76,250 73,357 63,892 54,375 47,786 7,323 2,079 271,143 879,851 894,807
Total expenses 970,790 145,414 93,570 76,250 73,357 64,250 54,375 47,786 18,722 3,963 271,143 1,819,620 1,842,466
Revenues
Immigration service fees 128,635 41,742 76,928 82,273 7,997 337,575 347,711
Right of permanent residence 27,662 67,721 95,383 80,851
Citizenship service fees 25,696 25,696 22,409
Right of citizenship 16,977 16,977 13,261
Interest on loans 451   451 542
Other 7 3 16 9 1 3 314 353 430
Revenues earned on behalf of Government (458) (128,638) (16) (69,413) (144,649) (42,674) (82,276) (7,997) (301) (476,422) (465,193)
Total revenues 13 13 11
Net Cost of continuing operations 970,790 145,414 93,570 76,250 73,357 64,250 54,375 47,786 18,722 3,963 271,130 1,819,607 1,842,455

17. Accounting changes

During 2011, amendments were made to Treasury Board Accounting Standard 1.2—Departmental and Agency Financial Statements to improve financial reporting by government departments and agencies. The amendments are effective for financial reporting of fiscal years ending March 31, 2012, and later. The significant changes to CIC’s financial statements are described below. These changes have been applied retroactively, and comparative information for 2010-11 has been restated.

Net debt (calculated as liabilities less financial assets) is now presented in the Statement of Financial Position. Accompanying this change, CIC now presents a Statement of Change in Net Debt and no longer presents a Statement of Equity.

Revenue and related accounts receivable are now presented net of non-respendable amounts in the Statement of Operations and Departmental Net Financial Position and Statement of Financial Position. The effect of this change was to increase the net cost of operations before government funding and transfers by $476,422,000 for 2012 ($465,193,000 for 2011) and decrease total financial assets by $19,532,000 for 2012 ($19,192,000 for 2011).

Government funding and transfers, as well as the credit related to services provided without charge by other government departments, are now recognized in the Statement of Operations and Departmental Net Financial Position below “Net cost of operations before government funding and transfers.” In previous years, the Department recognized these transactions directly in the Statement of Equity of Canada. The effect of this change was to decrease the net cost of operations after government funding and transfers by $1,845,059 thousands for 2012 ($1,855,803 thousands for 2011).

  2011
As previously stated
Effect of change
(in thousands of dollars)
2011
Restated
Statement of Financial Position:
Liabilities held on behalf of Government $– $(398,146) $(398,146)
Assets held on behalf of Government (19,192) (19,192)
Departmental financial position (243,245) 378,954 135,709
Statement of Operations and Departmental Net Financial Position:   
Revenues 465,204 (465,193) 11
Expenses 1,842,466 1,842,466
Government funding and transfers
Net cash provided by Government 1,569,858 1,569,858
Change in due from Consolidated Revenue Fund 15,795 15,795
Services provided without charge by other government departments 270,150 270,150
Transfer of assets and liabilities from (to) other government departments $– $– $–

18. Comparative information

Comparative figures have been reclassified to conform to the current year’s presentation.

Date Modified: