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Financial statements for the year ended March 31, 2019

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, 2019, and all information contained in these statements rests with the management of the Office of the Commissioner of Lobbying (OCL). These financial statements have been prepared by management using the Government of Canada'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 the OCL's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the OCL's Departmental Results 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 the OCL 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, 2019 was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex of the 2018-19 Departmental Results Report.

The effectiveness and adequacy of the OCL's system of internal control is reviewed by an independent Audit and Evaluation Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends for approval the financial statements to the Commissioner of Lobbying.

The Auditor General of Canada, the independent auditor for the Government of Canada, has expressed an opinion on the fair presentation of the financial statements of the OCL which does not include an audit opinion on the annual assessment of the effectiveness of the OCL's internal controls over financial reporting.

Nancy Bélanger
Commissioner of Lobbying
Charles Dutrisac, CPA, CMA, MBA
Director of Finance and Chief Financial Officer

Ottawa, Canada


Independent auditor's report

To the Speaker of the House of Commons and the Speaker of the Senate

Report on the audit of the financial statements

Opinion

We have audited the financial statements of the Office of the Commissioner of Lobbying (the OCL), which comprise the statement of financial position as at 31 March 2019, and the statement of operations and net financial position, statement of change in net debt and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the OCL as at 31 March 2019, and the results of its operations, changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the OCL in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the OCL's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the OCL or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the OCL's financial reporting process.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
  • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the OCL's internal control.
  • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
  • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the OCL's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the OCL to cease to continue as a going concern.
  • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on compliance with specified authorities

Opinion

In conjunction with the audit of the financial statements, we have audited transactions of the Office of the Commissioner of Lobbying coming to our notice for compliance with specified authorities. The specified authorities against which compliance was audited are the Financial Administration Act and regulations, and the Lobbying Act.

In our opinion, the transactions of the Office of the Commissioner of Lobbying that came to our notice during the audit of the financial statements have complied, in all material respects, with the specified authorities referred to above.

Responsibilities of management for compliance with specified authorities

Management is responsible for the Office of the Commissioner of Lobbying's compliance with the specified authorities named above, and for such internal control as management determines is necessary to enable the Office of the Commissioner of Lobbying to comply with the specified authorities.

Auditor's responsibilities for the audit of compliance with specified authorities

Our audit responsibilities include planning and performing procedures to provide an audit opinion and reporting on whether the transactions coming to our notice during the audit of the financial statements are in compliance with the specified authorities referred to above.

Nathalie Chartrand, CPA, CA
Principal
for the Interim Auditor General of Canada

Ottawa, Canada
10 July 2019

Statement of financial position

Statement of financial position
As at March 31
(in dollars) 2019 2018
Liabilities
Accounts payable and accrued liabilities (note 4) 1,264,521 821,219
Vacation pay and other leaves 159,990 166,773
Employee future benefits (note 5) 8,469 9,055
Total liabilities 1,432,980 997,047
Financial assets
Due from the Consolidated Revenue Fund 1,186,749 719,523
Accounts receivable and advances (note 6) 83,624 106,415
Total financial assets 1,270,373 825,938
Net debt 162,607 171,109
Non-financial assets
Prepaid expenses 17,538 13,828
Tangible capital assets (note 7) 1,476,046 740,629
Total non-financial assets 1,493,584 754,457
Net financial position 1,330,977 583,348

Contingent liabilities (note 8)

Contractual obligations (note 9)

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

Nancy Bélanger
Commissioner of Lobbying
Charles Dutrisac, CPA, CMA, MBA
Director of Finance and Chief Financial Officer

Ottawa, Canada

Statement of operations and net financial position
For the year ended March 31
(in dollars) Planned
Results
(note 2)
2019
2019 2018
Expenses
Transparency and accountability 3,427,849 3,589,454 3,553,981
Internal Services 1,493,671 1,619,353 1,614,908
Net cost of operations before government funding 4,921,520 5,208,807 5,168,889
Government funding
Net cash provided by Government 4,479,948 4,856,186 4,507,292
Change in due from Consolidated Revenue Fund (56,582) 467,226 261,543
Services provided without charge by other government departments (note 10) 630,493 633,024 630,986
Net cost (revenue) of operations after government funding (132,339) (747,629) (230,932)
Net financial position — Beginning of year 203,993 583,348 352,416
Net financial position — End of year 336,332 1,330,977 583,348

Segmented information (note 11)

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

Statement of change in net debt
For the year ended March 31
(in dollars) Planned
Results
(note 2)
2019
2019 2018
Net cost (revenue) of operations after government funding (132,339) (747,629) (230,932)
Change due to tangible capital assets
Acquisition of tangible capital assets (note 7) 180,000 943,991 323,944
Amortization of tangible capital assets (note 7) (183,205) (208,574) (195,351)
Total change due to tangible capital assets (3,205) 735,417 128,593
Change due to prepaid expenses (1,271) 3,710 5,339
Net increase (decrease) in net debt (136,815) (8,502) (97,000)
Net debt — Beginning of year 455,302 171,109 268,109
Net debt — End of year 318,487 162,607 171,109

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

Statement of cash flows
For the year ended March 31
(in dollars) 2019 2018
Operating activities
Net cost of operations before government funding 5,208,807 5,168,889
Non-cash items:
Amortization of tangible capital assets (note 7) (208,574) (195,351)
Services provided without charge by other government departments (note 10) (633,024) (630,986)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances (22,791) 30,394
Increase in prepaid expenses 3,710 5,339
Decrease (increase) in accounts payable and accrued liabilities (notes 4, 7) 95,620 (190,072)
Decrease (increase) in vacation pay and other leaves 6,783 (31,235)
Decrease in employee future benefits 586 131,679
Cash used in operating activities 4,451,117 4,288,657
Capital investing activities
Acquisition of tangible capital assets (note 7) 405,069 218,635
Cash used in capital investing activities 405,069 218,635
Net cash provided by Government of Canada 4,856,186 4,507,292

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

Notes to the financial statements
For the year ended March 31

1. Authority and objectives

The mandate of the Office of the Commissioner of Lobbying (OCL) is to support the Commissioner in administering the Lobbying Act (the Act) and to ensure compliance with the Lobbyists' Code of Conduct (the Code).

Transparency and accountability
(Ensure transparency and accountability in the lobbying of public office holders in order to contribute to confidence in the integrity of government decision making)

The purpose of the Lobbying Act and the Lobbyists' Code of Conduct is to assure the Canadian public that lobbying is done transparently and with the highest ethical standards with a view to enhancing public confidence and trust in the integrity of government decision making. The mandate of the Commissioner of Lobbying is to establish and maintain the Registry of Lobbyists, develop and implement educational programs to foster awareness about the Act and the Code, and ensure compliance with the Act and the Code.

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. Internal Services include only those activities and resources that apply across an organization and not to those provided to a specific program, regardless of the Internal Services delivery model in a department. The groups of activities are Management and Oversight Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; and Acquisition Services.

2. Summary of significant accounting policies

These financial statements have been prepared using the Government of Canada'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

The OCL is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the OCL 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 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 Expenses section of the Statement of Operations and Net Financial Position are the amounts reported in the future-oriented Statement of Operations included in the 2018-19 Departmental Plan. The planned results amounts in the Government funding section of the Statement of Operations and Net Financial Position and in the Statement of Change in Net Debt were prepared for internal management purposes and have not been previously published.

Liquidity risk is the risk that the OCL will encounter difficulty in meeting its obligations associated with financial liabilities. The OCL's objective for managing liquidity risk is to manage operations and cash expenditures within the appropriation authorized by Parliament or allotment limits approved by the Treasury Board.

Each year, the OCL presents information on planned expenditures to Parliament through the tabling of Estimates publications. These estimates result in the introduction of supply bills (which, once passed into legislation, become appropriation acts) in accordance with the reporting cycle for government expenditures. The OCL exercises expenditure initiation processes such that unencumbered balances of budget allotments and appropriations are monitored and reported on a regular basis to help ensure sufficient authority remains for the entire period and appropriations are not exceeded.

Consistent with Section 32 of the Financial Administration Act, the OCL's policy to manage liquidity risk is that no contract or other arrangement providing for a payment shall be entered into with respect to any program for which there is an appropriation by Parliament or an item included in estimates then before the House of Commons to which the payment will be charged unless there is a sufficient unencumbered balance available out of the appropriation or item to discharge any debt that, under the contract or other arrangement, will be incurred during the fiscal year in which the contract or other arrangement is entered into.

The OCL's risk exposure and its objectives, policies and processes to manage and measure this risk did not change significantly from the prior year.

(b) Net cash provided by Government of Canada

The OCL operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the OCL is deposited to the CRF, and all cash disbursements made by the OCL are paid from the CRF. The netcash provided by Government of Canada is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government of Canada.

(c) Due from the consolidated revenue fund

Amounts due from 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 OCL is entitled to draw from the CRF without further authorities to discharge its liabilities. This amount is not considered to be a financial instrument.

(d) Expenses

Expenses are recorded on the accrual basis:

  • Vacation pay and other leaves are accrued as the benefits are earned by employees under their respective terms of employment.

(e) Employee future benefits

  • Pension benefits: Eligible employees participate in the Public Service Pension Plan (Plan), a multiemployer pension plan administered by the Government of Canada. The OCL's contributions to the Plan are charged to expenses in the year incurred and represent the total OCL obligation to the Plan. The OCL'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.
  • Severance benefits: The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. Due to the size of the OCL, the remaining obligation for employees who did not withdraw benefits is calculated using employee specific information.

(f) Accounts receivable

Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The OCL is not exposed to significant credit risk. Accounts receivable are due on demand. The majority of accounts receivable are due from other Government of Canada departments and agencies where there is minimal potential risk of loss. The maximum exposure the OCL has to credit risk is equal to the carrying value of its accounts receivable.

(g) Contingent liabilities

Contingent liabilities are potential liabilities that 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.

(h) Tangible capital assets

All tangible capital assets having an initial cost of $5,000 or more and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. The OCL does not capitalize intangible assets.

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

Tangible capital assets
Asset Class Amortization Period
Computer software 5 years
Informatics hardware 5 years
Furniture and fixtures 5 years
Leasehold improvements Lesser of the remaining term of the lease or useful life of the improvement

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

(i) Related party transactions

Inter-entity transactions

The OCL is related, in terms of common ownership, to all government departments, agencies, and Crown corporations. The OCL enters into transactions with these entities in the normal course of business, which are measured at their carrying amount, except for the following:

  1. Inter-entity transactions are measured at the exchange amount when undertaken on similar terms and conditions to those adopted if the entities were dealing at arm's length, or where costs provided are recovered.
  2. Goods or services received without charge between commonly controlled entities, when used in the normal course of the operations and would otherwise have been purchased, are recorded as revenues and expenses at the carrying amount. The Government also 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 Services and Procurement Canada are not included in the OCL's Statement of Operations and Net Financial Position.
Other related party transactions

Related parties also include key management personnel (KMP) having authority and responsibility for planning, directing and controlling the activities of the OCL, as well as their close family members. The OCL has defined its KMP to be the Commissioner and the Chief Financial Officer. These related party transactions are recorded at the exchange amount.

(j) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the OCL's best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are the liability for employee future benefits and the useful life of tangible capital assets. 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

The OCL receives its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and 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, the OCL 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 dollars) 2019 2018
Net cost of operations before government funding 5,208,807 5,168,889
Adjustments for items affecting net cost of operations but not affecting authorities:
Add (Less):
Services provided without charge by other government departments (note 10) (633,024) (630,986)
Amortization of tangible capital assets (note 7) (208,574) (195,351)
Decrease (increase) in vacation pay and other leaves 6,783 (31,235)
Decrease in employee future benefits 586 131,679
Accrued liabilities not charged to authorities (19,095)
Adjustments to previous year's expenses 4,686 1,794
Refund of program expenditures 1,134 1,897
  (847,504) (722,202)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets (note 7) 943,991 323,944
Employee advances and overpayments 343 174
Increase in prepaid expenses 3,710 5,339
  948,044 329,457
Current year authorities used 5,309,347 4,776,144
(b) Reconciliation of authorities provided and used
(in dollars) 2019 2018
Authorities provided:
Vote 1 — Program expenditures 5,840,315 4,642,478
Statutory — Contributions to employee benefit plan 378,877 333,393
Less:
Lapsed: Special Purpose Allotment - Relocation of Office (648,709)
Lapsed: Special Purpose Allotment - Legal Fees for Court Challenge (128,196)
Lapsed: Operating (132,940) (199,727)
Current year authorities used 5,309,347 4,776,144

4. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities are due within six months of year-end.

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

Accounts payable and accrued liabilities
(in dollars) 2019 2018
Other government departments and agencies 471,272 157,566
External parties 274,367 369,499
745,639 527,065
Accrued liabilities 518,882 294,154
Total: Accounts payable + Accrued liabilities 1,264,521 821,219

5. Employee future benefits

(a) Pension benefits

The OCL's employees participate in the Public Service Pension Plan (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 % 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 OCL contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2018-19 expense amounts to $262,486 ($227,007 in 2017-18). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2017-18) the employee contributions and, for Group 2 members, approximately 1 time (1 time in 2017-18) the employee contributions.

The OCL's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the consolidated financial statements of the Government of Canada, as the Plan's sponsor.

(b) Severance benefits

Severance benefits provided to the OCL's employees were previously based on an employee's eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. As at March 31, 2019, substantially all settlements for immediate cash out were completed and the remaining obligation will be disbursed upon departure from the public service. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

Information about the severance benefits, measured as at March 31, is as follows:

Employee Severance Benefits, measured as at March 31
(in dollars) 2019 2018
Accrued benefit obligation — Beginning of year 9,055 140,734
Expense for the year 1,779 (83,026)
Benefits paid during the year (2,365) (48,653)
Accrued benefit obligation — End of year 8,469 9,055

6. Accounts receivable and advances

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

Accounts receivable and advances
(in dollars) 2019 2018
Receivables — Other government departments and agencies 77,772 101,524
Receivables — External parties 5,652 4,517
Employee advances and overpayments 174
Advance — Petty cash 200 200
Total: Accounts receivable and advances 83,624 106,415

7. Tangible capital assets

Costs of tangible capital assets
Cost
Capital Asset Class
(in dollars)
Opening Balance Acquisitions Disposals, Write-Offs and Transfers Closing
Balance
Computer software 3,306,304 227,382 3,533,686
Informatics hardware 87,808 103,821 191,629
Furniture and fixtures 46,674 46,674
Leasehold improvements 91,031 91,031
Assets under development 118,810 716,609 (103,821) 731,598
Total: Cost 3,650,627 943,991 4,594,618
Accumulated Amortization of tangible capital assets
Accumulated Amortization
Capital Asset Class
(in dollars)
Opening Balance Amortization Disposals, Write-Offs and Transfers Closing Balance
Computer software 2,718,034 173,709 2,891,743
Informatics hardware 54,259 34,865 89,124
Furniture and fixtures 46,674 46,674
Leasehold improvements 91,031 91,031
Total: Accumulated Amortization 2,909,998 208,574 3,118,572
Net book value of tangible capital assets
Net Book Value
(in dollars) 2019 2018
Computer software 641,943 588,270
Informatics hardware 102,505 33,549
Furniture and fixtures
Leasehold improvements
Assets under construction 731,598 118,810
Total: Net Book Value 1,476,046 740,629

The "Acquisition of tangible capital assets" and the "Increase in accounts payable and accrued liabilities" presented in the Statement of Cash Flows excludes $663,758 in relation to acquisitions of tangible capital assets in 2018-19 that remain to be paid as at March 31, 2019. As at March 31, 2018, this amount was $124,836 which was paid in 2018-19 and included in the March 31, 2019 Statement of Cash Flows.

Relocation cost ($595,644) represents a significant portion of the tangible capital assets under development acquired in 2018-19.

8. Contingent liabilities

In the normal course of its operations, the OCL may face legal challenges with regard to a decision made by the Commissioner or for any other reasons. Some of these legal actions may result in actual liabilities when one or more future events occur. To the extent that the future event is likely to occur, and a reasonable estimate of the loss can be made, a liability is accrued and an expense recorded in the financial statements. No contingent liabilities are recognized in the OCL's financial statements for the fiscal year ended March 31, 2019, and there are no claims outstanding as at March 31, 2019.

9. Contractual obligations

The nature of the OCL's activities can result in some multi-year contracts and obligations whereby the OCL will be obligated to make future payments when the goods or services are received. These obligations include service contracts and equipment rental. Significant contractual obligations that can be reasonably estimated are summarized as follows:

Contractual Obligations
(in dollars) Related Parties Acquisitions of
goods and services
Operating
leases
Total
2020 916,457 426,182 3,924 1,346,563
2021 229,170 23,850 2,124 255,144
2022 11,222 23,850 1,947 37,019
2023 13,850 13,850
2024 and thereafter 8,850 8,850

10. Related party transactions

(a) Services provided without charge by other government departments

During the year, the OCL received services without charge from other government departments, related to accommodation, employer's contribution to the health and dental insurance plans, audit services and information technology support services. These services provided without charge have been recorded in the OCL's Statement of Operations and Net Financial Position as follows:

Common services provided without charge by other government departments
(in dollars) 2019 2018
Accommodation 270,284 270,284
Employer's contribution to the health and dental insurance plans 235,982 236,312
Audit services 108,000 106,000
Information technology support services 18,758 18,390
Total: Common services provided without charge by other government departments 633,024 630,986

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 Services and Procurement Canada are not included in the OCL's Statement of Operations and Net Financial Position.

(b) Other transactions with related parties

The OCL incurred expenses of $1,117,279 in 2018-19 ($829,625 in 2017-18) from transactions in the normal course of business with other government departments, agencies and Crown corporations. In addition, the OCL has shared service agreements with other government departments related to the provision of Finance, Human Resources, Administration and Information Technology services. The expenses are $500,923 in 2018-19 ($442,277 in 2017-18) and are included in the total amount of transactions with related parties. These expenses exclude services received without charge, which are already disclosed in a). Contractual obligations with related parties, as shown in note 9 above, amount to a total of $1,156,849 over the next five years.

Related party transactions
(in dollars) 2019 2018
Accounts receivable 77,772 101,524
Accounts payable 471,272 157,566
Expenses 1,117,279 829,625
Tangible capital assets acquisitions 395,309

11. Segmented information

Presentation by segment is based on the OCL's core responsibilities. 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 for the main core responsibilities, by major object of expense. The segment results for the period are as follows:

Segmented Information
(in dollars) Transparency and accountability Internal services 2019 2018
Operating Expenses
Salaries and employee benefits 2,783,444 614,255 3,397,699 3,056,510
Professional and special services 303,804 733,987 1,037,791 1,287,127
Accommodation 224,368 61,191 285,559 285,395
Amortization of tangible capital assets 168,718 39,856 208,574 195,351
Furniture and equipment 6,359 90,524 96,883 145,409
Telecommunications services 41,482 27,368 68,850 66,273
Rental 6,323 36,694 43,017 33,361
Travel  24,755 719 25,474 30,099
Information services 21,007 2,756 23,763 48,081
Utilities, materials and supplies 9,194 7,928 17,122 17,699
Repair and maintenance 4,075 4,075 3,584
Net cost of operations 3,589,454 1,619,353 5,208,807 5,168,889

12. Subsequent event

On June 12 2019, an agreement between the Government of Canada and 15 public service unions was signed to compensate current and former government employees for damages associated with the Phoenix payroll system. The provisions of this agreement will also be extended to excluded employees from the 15 public service unions, as well as unrepresented government employees and executives. Compensation for fiscal years 2016-17 to 2018-19 includes up to 4 days of leave credits. Those credits are expected to be added to employees' leave banks in 2019-20. The OCL estimates these additional leave credits at approximately $35,865.

13. Comparative information

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

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