ARCHIVED - Consolidated Financial Statements for the year ended March 31, 2015

Table of Contents

• Statement of Management Responsibility Including Internal Control Over Financial Reporting
• Consolidated Statement of Financial Position
• Consolidated Statement of Operations and Departmental Net Financial Position
• Consolidated Statement of Change in Departmental Net Debt
• Consolidated Statement of Cash Flows
• Notes to the Consolidated Financial Statements
• Annex to the Statement of Management Responsibility

Statement of Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying consolidated financial statements for the year ended March 31, 2015, and all information contained in these statements rests with the management of Citizenship and Immigration Canada (CIC). These consolidated 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 consolidated financial statements. Some of the information in the consolidated 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 consolidated 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, 2015 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 CIC.

The consolidated financial statements of CIC have not been audited.

Ottawa, Canada
August 21, 2015

Citizenship and Immigration Canada – Consolidated Statement of Financial Position (Unaudited)

As at March 31

(in thousands of dollars)

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

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

Ottawa, Canada
August 21, 2015

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

For the year ended March 31

(in thousands of dollars)

Segmented information (note 17)
The accompanying notes form an integral part of these consolidated financial statements.

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

For the year ended March 31

(in thousands of dollars)

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

Citizenship and Immigration Canada – Consolidated Statement of Cash Flows (Unaudited)

For the year ended March 31

(in thousands of dollars)

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

Citizenship and Immigration Canada – Notes to the Consolidated 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.

Jurisdiction over immigration is a shared responsibility between the federal and the provincial and territorial governments under section 95 of the Constitution Act, 1867. Under s. 91(25) of the Constitution Act1867, the federal government has jurisdiction over naturalization and aliens.

In July 2013, the primary responsibility for the Passport Program was transferred from the Department of Foreign Affairs, Trade and Development Canada (DFATD) to CIC, while passport service delivery is provided through Service Canada.

In August 2013, CIC assumed responsibility for International Experience Canada (IEC) – archived from DFATD. This transfer allowed the program to better align with government priorities and labour market demands in Canada by linking IEC to other immigration programs.

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 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 programs.

Permanent Economic Residents: Rooted in objectives outlined in the Immigration and Refugee Protection Act, the focus of this program is on the selection and processing of immigrants who can support the development of a strong and prosperous Canada, in which the benefits of immigration are shared across all regions of Canada. The acceptance of qualified permanent residents helps the government meet its economic objectives, such as building a skilled work force, addressing immediate and longer-term labour market needs, and supporting national and regional labour force growth. The selection and processing involve the granting of a permanent residence to qualified applicants, as well as the refusal of unqualified applicants.

Temporary Economic Residents: Rooted in objectives outlined in Immigration and Refugee Protection Act, the focus of this program is to establish and apply the rules governing entry into Canada of temporary foreign workers and international students. Temporary economic migration enhances Canada’s trade, commerce, cultural, educational and scientific activities, in support of our overall economic and social prosperity. 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’s Family and Discretionary programs support the Government of Canada’s family reunification goals for immigration. The program objectives are to reunite family members and to allow for the processing of exceptional cases. Family Class provisions of the Immigration and Refugee Protection Act enable Canadian citizens and permanent residents of Canada to apply to sponsor eligible members of the Family Class, including spouses and partners, dependent children, and parents and grandparents. Discretionary provisions in the legislation are used in cases where there are humanitarian and compassionate considerations or for public policy reasons. These discretionary provisions provide the flexibility to approve exceptional and deserving cases not anticipated in the legislation and to support the Government of Canada in its humanitarian response to world events and crises. The selection and processing involve the granting of permanent residence to qualified applicants, as well as the refusal of unqualified applicants.

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 protected person status when a positive decision is rendered by the Immigration and Refugee Board of Canada.

Newcomer Settlement and Integration: In accordance with the Canadian Multiculturalism Act, the Employment Equity Act and the Immigration and Refugee Protection Act, programming is developed based on policies that support the settlement, resettlement, adaptation and integration of newcomers into Canadian society. 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.

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 across Canada. 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, socially cohesive society (through increasing intercultural and interfaith understanding, civic memory and pride, respect for core democratic values, and equality of opportunity to full participation in society and the economy); improve the responsiveness of institutions to the needs of a diverse population; and actively engage in discussions on multiculturalism, integration and diversity at the international level. Direct public outreach and promotional activities by the program primarily target young people. Further,the program assists federal partners to meet their obligations under the Act through its annual report to Parliament on its operation and the federal Multiculturalism Champions Network. It also engages with non-federal public institutions seeking to respond to diversity through the Federal-Provincial-Territorial Officials Responsible for Multiculturalism Issues. The program is the locus for Canada’s participation in international agreements and institutions with respect to anti-Semitism and Holocaust remembrance (through the International Holocaust Remembrance Alliance).

Health Protection: This program 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 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. 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: This program aims to ensure the managed migration of foreign nationals and newcomers to Canada. As such, in accordance with Immigration and Refugee Protection Act and accompanying regulations, CIC facilitates the travel of bona fide permanent residents, visitors, students and temporary workers while protecting the health, safety and security of Canadians by effectively managing migration access and controlling entry. This is accomplished through a variety of policy and operational measures, including visa policy interventions, anti-fraud measures, eligibility and admissibility criteria, negotiations of bilateral and multilateral information-sharing agreements and treaties, security updates to travel and immigration status documents, as well as revisions to identity management practices. Strategic partnership engagements with security and public safety-related departments are another essential component of this program.

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 and contributions to such organizations as the International Organization for Migration, Regional Conference on Migration, the UNHCR, Global Forum on Migration and Development, and Intergovernmental Consultations on Migration, Asylum and Refugees. The program uses transfer payment funding from the following programs: grant for Migration Policy Development; International Organization for Migration; and International Holocaust Remembrance Alliance.

Passport: CIC is accountable for the Passport Program, and collaborates with Service Canada and Foreign Affairs, Trade and Development Canada for the delivery of passport services. The program is managed through a revolving fund. The Program enables the issuance of secure Canadian travel documents through authentication of identity and entitlement, facilitates travel, and contributes to international and domestic security.

Internal Services: Internal services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: management and oversight services; communications services; legal services; human resources management services; financial management services; information management services; information technology services; real property services; materiel services; acquisition services; and travel and other administrative services. Internal services include only those activities and resources that apply across an organization and not those provided specifically to a program.

2. Summary of significant accounting policies

These consolidated 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:

3. Parliamentary authorities

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. CIC is also responsible for the management of the Passport revolving fund, a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for working capital, capital acquisitions and temporary financing of accumulated operating deficits.

Items recognized in the Consolidated Statement of Operations and Departmental Net Financial Position and the Consolidated 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)

(b) Authorities provided and used

(in thousands of dollars)

4. Accounts payable and accrued liabilities

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

(in thousands of dollars)

5. Immigrant Investor Program

The Economic Action Plan 2014 Act, no.1 (Bill C-31) terminated applications in the backlog of the federal Immigrant Investor Program (IIP) and Entrepreneur Program (EN) for which a selection decision was not made before February 11, 2014. While the program has been terminated, outstanding investments will continue to be returned to investors approximately over the next 5 years. The IIP 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 organizations 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).

The Northwest Territories refunded $113,120,093 after retracting from the IIP program in 2012. CIC will keep these funds 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)

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 for services that have yet to be rendered to the Department.

The following table presents details of the deferred revenue account:

(in thousands of dollars)

7. Employee future benefits

As part of collective agreement negotiations with most 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.

8. Accounts receivable and advances

The following table presents details of CIC's accounts receivable and advances balances:

(in thousands of dollars)

9. Loans receivable

In accordance with the IRPA, 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 9.06%. 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 CIC’s immigration loans balances:

(in thousands of dollars)

10. Inventory

The following table presents details of the inventory, measured at cost or net realizable value.

(in thousands of dollars)

The cost of consumed inventory recognized as an expense in the Consolidated Statement of Operations and Departmental Net Financial Position is $62,240,128 in 2014-2015 ($40,903,803 in 2013-2014).

11. Tangible capital assets

Cost

(in thousands of dollars)

Accumulated amortization

(in thousands of dollars)

Net book value

(in thousands of dollars)

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)

13. Contingent liabilities

Claims have been made against CIC in the normal course of operations. These claims include items with pleading amounts and others for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable and a reasonable estimate of the loss cannot be made by management. CIC has recorded an allowance for claims and litigation where it is likely that there will be a future payment and a reasonable estimate of the loss can be made.

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, CIC received common services which were obtained without charge from other government departments as disclosed below.

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

15. Transfer of the transition payments for implementing salary payments in arrears

The Government of Canada implemented salary payments in arrears in 2014-15. As a result, a one-time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay processes. This change to the pay system had no impact on the expenses of the Department. However, it did result in the use of additional spending authorities by the Department. Prior to year end, the transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Works and Government Services Canada, who is responsible for the administration of the Government pay system.

16. Transfers from/to other government departments

1. On April 3, 2013, CIC transferred responsibility for the acquisition and provision of hardware and software, including security software, for workplace technology devices to Shared Services Canada (SSC) pursuant to Order-in-Council 2013-0368, including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, CIC transferred some remaining assets related to information technologies infrastructure to Shared Services Canada.
2. Following the July 2, 2013 transfer of Passport Canada from DFATD to CIC and ESDC pursuant to Order-in-Council 2013-0540, CIC administered the transferred activities on behalf of ESDC during the transition period. Accordingly, CIC transferred some remaining assets to ESDC.

(in thousands of dollars)

17. Segmented information

Presentation by segment is based on CIC’s program aligment 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 programs, by major object of expenses and by major type of revenue. The segment results for the period are as follows:

(in thousands of dollars)

18. Restatement of Previous Year’s Result

CIC records all tangible capital assets and leasehold improvements with an acquisition cost of $10,000 or more, amortizes them on a straight-line basis over the estimated useful life and proceeds to their disposal and write off when these are no longer used. Capital assets, related to the passport transition, should have been written-off in 2013-2014. As a result, a total adjustment of $40,863,221 was required to the notes to the consolidated financial statements. This adjustment has no impact on the Consolidated Statement of Financial Position and the Consolidated Statement of Operations and Departmental Net Financial Position since these assets were fully amortized.

CIC’s consolidated financial statements have therefore been restated as described below:

Notes to the Consolidated Financial Statements:
Tangible capital assets (note 11)
(in thousands of dollars)