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ATLANTIC CANADA OPPORTUNITIES AGENCY
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, 2020, and all information contained in these financial statements rests with the management of the Atlantic Canada Opportunities Agency. 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 Agency’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Agency’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 Agency and by 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 on-going process to identify key risks, to assess the effectiveness of associated key controls, and to make any necessary adjustments.

The Agency is subject to periodic Core Control Audits performed by the Office of the Comptroller General of Canada (OCG) and uses the results of such audits to comply with the Treasury Board Policy on Financial Management.

A Core Control Audit was performed in 2014-15 by the OCG. The Audit Report and related Management Action Plan are posted on the departmental web site at http://www.acoa-apeca.gc.ca/eng/Accountability/AuditsAndEvaluations/Pages/Audits.aspx.

These financial statements of the Agency have not been audited.

Approved by Senior Officials
Approved by:

Francis P. McGuire
Deputy Head
Moncton, Canada
Date:

Stéphane Lagacé, CPA-CMA
Chief Financial Officer
Moncton, Canada
Date:

Atlantic Canada Opportunities Agency
Statement of Financial Position (Unaudited)
As at March 31 (in thousands of dollars)
  2020 2019
Liabilities    
     Accounts payable and accrued liabilities (Note 4) 31,054 66,789
     Vacation pay and compensatory leave 4,373 2,238
     Other liabilities (Note 5) 1,264 1,005
     Employee future benefits (Note 6) 2,438 2,420
     Total gross liabilities 39,129 72,452
   
Liabilities held on behalf of Government    
     Accounts payable and accrued liabilities (Note 4) (2,683) (11,558)
Total liabilities held on behalf of Government (2,683) (11,558)
   
Total net liabilities 36,446 60,894
   
Financial assets    
     Due from Consolidated Revenue Fund 27,298 55,013
     Accounts receivable and advances (Note 7) 1,489 1,021
     Loans receivable (Note 8) 296,832 293,906
     Investments (Note 9) 3,488 3,491
Total gross financial assets 329,107 353,431
     
Financial assets held on behalf of Government    
     Accounts receivable and advances (Note 7) (180) (562)
     Loans receivable (Note 8) (296,832) (293,906)
     Investments (Note 9) (3,488) (3,491)
Total financial assets held on behalf of Government (300,500) (297,959)
   
Total net financial assets 28,607 55,472
   
Agency net debt 7,839 5,422
   
Non-financial assets    
     Tangible capital assets (Note 10) 2,185 2,007
Total non-financial assets 2,185 2,007
   
Agency net financial position (5,654) (3,415)

For information on contractual obligations, see note 11.

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

Approved by Senior Officials
Approved by:

Francis P. McGuire
Deputy Head
Moncton, Canada
Date:

Stéphane Lagacé, CPA-CMA
Chief Financial Officer
Moncton, Canada
Date:

Atlantic Canada Opportunities Agency
Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31 (in thousands of dollars)
  2020 Planned Results 2020 2019
Expenses      
     Economic Development 266,832 265,077 234,961
     Internal Services 29,894 30,574 28,410
     Expenses incurred on behalf of Government (Discount and ADA) (21,517) (26,763) (6,985)
Total expenses 275,209 268,888 256,386
     
Revenues      
     Revenue from amortization of discount on assistance loans 9,726 5,454 7,376
     Interest on overdue loans 484 334 403
     Dividend on investments 0 9 10
     Gain on disposal of tangible capital and non-capital assets 19 20 23
     Miscellaneous revenues 24 4 7
     Gains on Foreign Exchange Revaluations at Year-End - 1 -
     Revenues earned on behalf of government (10,234) (5,802) (7,796)
Total revenues 19 20 23
Net Cost of operations 275,190 268,868 256,363
     
Net cost of operations before government funding and transfers 275,190 268,868 256,363
Government funding and transfers      
     Net cash provided by Government   285,147 247,371
     Change in due from Consolidated Revenue Fund   (27,715) 2,026
     Services provided without charge by OGDs (Note 12)   9,187 8,329
     Other transfers of assets and liabilities (to)/ from other
government departments
  10 -
Net cost of operations after government funding and transfers   2,239 (1,363)
Departmental net financial position - Beginning of year   (3,415) (4,778)
Departmental net financial position - End of year   (5,654) (3,415)

For information on segmented information, see note 13.

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

Atlantic Canada Opportunities Agency
Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31 (in thousands of dollars)
  2020 2019
Net cost of operations after government funding and transfers 2,239 (1,363)
Change due to tangible capital assets
     Acquisition of tangible capital assets 368 664
     Amortization of tangible capital assets (190) (193)
     Proceeds from disposal of tangible capital assets (20) (27)
     Net (loss) or gain on disposal of tangible capital  assets, including adjustments 20 10
Total change due to tangible capital assets 178 454
     
Net increase (decrease) in departmental net debt 2,417 (909)
 
Departmental net debt – Beginning of year 5,422 6,331
 
Departmental net debt – End of year 7,839 5,422

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

Atlantic Canada Opportunities Agency
Statement of Cash Flows (Unaudited)
For the Year Ended March 31 (in thousands of dollars)
  2020 2019
Operating activities
     Net cost of operations before government funding and transfers  268,868 256,363
     Non cash items :
          Amortization of tangible capital assets  (190) (193)
          Gain on disposal and write-down of tangible capital assets  20 10
          Other transfers of assets and liabilities (to)/ from other
government departments
 (10)            -
          Services provided without charge by other government departments (note 12)  (9,187) (8,329)
     Variations in Statement of Financial Position :
          Increase (decrease) in accounts receivables and advances  850 196
          Decrease (increase) in accounts payable and accrued liabilities  26,860 (2,107)
          Decrease (increase) in vacation pay and compensatory leave  (2,135) 1,140
          Decrease (increase) in other liabilities  (259) (613)
          Decrease (increase) in employee future benefits  (18) 267
     Cash used by operating activities  284,799 246,733
     Capital investing activities
          Acquisition of tangible capital assets (note 10)  368 664
          Proceeds from  disposal of tangible capital assets  (20) (27)
     Cash used in capital investing activities  348 638
     Net cash provided by Government of Canada  285,147 247,371

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

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

1. Authority and Objectives

The Atlantic Canada Opportunities Agency (ACOA) operates under the authority of the Atlantic Canada Opportunities Agency Act, R.S.C., 1985, c. 41, 4th Supp.

The Agency’s mandate is to support Atlantic Canada’s economic growth, wealth creation and economic prosperity through inclusive clean growth and building on competitive regional strengths. ACOA helps small and medium-sized enterprise (SME) growth through direct financial assistance and indirectly through business support organizations. SMEs become more innovative by adopting new technologies and processes and pursuing new avenues for expansion and market diversification in order to compete and succeed in a global market.
ACOA invests in the economic diversification of communities to:

ACOA supports business investments in the development and commercialization of innovative technologies in Atlantic Canada through:

ACOA invests in innovation and growth of Atlantic Canadian businesses to:

ACOA embraces its culture of innovation, collaboration and engagement. The Agency is constantly finding new ways to work differently and more effectively with stakeholders, both within the federal government as well as with other levels of government and community counterparts.

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 – The Agency is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Agency 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 are the amounts reported in the future-oriented financial statements included in the 2019-2020 Departmental Plan.

(b) Net cash provided by Government – The Agency operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Agency is deposited to the CRF and all cash disbursements made by the Agency 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 the CRF – These amounts 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 Agency is entitled to draw from the CRF without further authorities to discharge its liabilities.

(d) Revenues – Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues, except for interest income on overdue loans, which is only recognized when received due to the uncertainty as to its ultimate collection.

The majority of the revenues results from the recognition of the amortization of discount on assistance loans.

With the exception of gain on disposal of tangible capital assets, revenues are earned on behalf of Government and are not available to discharge the Agency’s liabilities. While the Deputy Head (DH) is expected to maintain accounting control, he has no authority regarding the disposition of these revenues. Therefore, they are presented in reduction of the entity’s gross revenues.

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

Transfer payments such as grants, conditionally repayable contributions and non-repayable contributions are recorded as expenses when authorization for the payment is approved as a legitimate expense under the applicable transfer payment program. Transfer payments that become repayable as a result of conditions specified in the contribution agreement are recorded as a reduction in transfer payment expense and are reclassified 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 accommodations, employer contributions to the health and dental insurance plans, legal services, and workers’ compensation are recorded as operating expenses at their estimated cost.

Expenses related to the loan and accounts receivable portfolio are expenses incurred on behalf of the Government. While the DH is expected to maintain accounting control over loans and accounts receivable, he has no authority regarding their disposition; therefore, related expenses are presented in reduction of the entity’s gross expenses.

(f) Employee future benefits

i) Pension benefits – Eligible employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government of Canada. The Agency’s contributions to the plan are charged to expenses in the year incurred and represent the total Agency obligation to the Plan. The Agency’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.

(ii) Severance benefits – The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits 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 – These are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts and loans receivable where recovery is considered appropriate and uncertain.

(i) Unconditionally repayable contributions – Transfer payments that are unconditionally repayable are recognized as loans receivable. These contributions must be repaid without condition, and the loans have significant concessionary terms as they include a no-interest clause. Furthermore, they have various repayment terms. The modified effective rate method is used to discount the loans receivable.

(ii) Conditionally repayable contributions – Transfer payments that are conditionally repayable are reclassified as accounts receivable when conditions specified in the contribution agreement come into effect or in the event of default.

(h) Allowance for impaired loans and accounts receivable – Loans and accounts receivable are classified as impaired when, in the opinion of management, there is reasonable doubt as to the timely collection of the full amount of principal and, where applicable, interest. A specific allowance is established to reduce the recorded value of the loan to its estimated net realizable value. The impact of COVID-19 on this fiscal year end has been considered in the valuation of allowances against outstanding loans.

(i) 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 an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

(j) Tangible capital assets – All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. The Agency 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:

Caption text
Asset Class Amortization Period
Vehicles 5 years
Computer equipment 3 years
In-house-developed software 5 years
Other equipment 5 years
Machinery and equipment 15 years

(k) 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 for which estimates are used are contingent liabilities, the liability for employee severance benefits, the unamortized discount on assistance loans, 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 Agency 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, the Agency 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)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
  2020 2019
Net Cost of Operations before government funding and transfers 268,868 256,363
Adjustments for items affecting net cost of operations but not affecting authorities:
          Amortization of tangible capital assets  (190) (193)
          Gain (loss) on disposal of tangible capital assets  20 10
          Receivable for disposal of crown assets  -   14
          Services provided without charge by other government departments  (9,187) (8,329)
          Decrease (increase) in vacation pay and compensatory leave  (2,135) 1,140
          Decrease (increase) in employee future benefits  (18) 267
          Refund of prior years' expenditures  70 57
          Conditions met on contributions  10,363 14,316
          Adjustments to prior years' accrual  329 370
          Correction to assistance type from repayable contribution to non-repayable (743) 916
          Outstanding recovery of operating expenses  17 30
          Adjustments to investment account  -   -
     Total of items affecting net cost of operations but not affecting authorities  (1,474) 8,598
     Adjustments for items not affecting net cost of operations but affecting authorities:
          Acquisitions of tangible capital assets  368 664
          Assistance loans issued on behalf of Government  83,823 83,942
          Salary Overpayments  75 31
     Total items not affecting net cost of operations but affecting authorities  84,266 84,637
     Current year authorities used 351,660 349,598

(b) Authorities provided and used

(in thousands of dollars)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
  2020 2019
Authorities provided:  
     Vote 1 - Operating expenditures 71,611 70,428
     Vote 5 - Grants and contributions 274,953 290,438
     Vote 10 - Government-wide Initiatives 27 -
     Statutory amounts 7,928 8,079
Less:
     Total lapsed (2,839) (19,307)
     Authorities available for future years (20) (40)
Current year appropriations used 351,660 349,598

4. Accounts Payable and Accrued Liabilities

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

(in thousands of dollars)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
  2020 2019
Accounts payable - Other payables to other government departments 758 331
Regular accounts payable   15,248 18,014
Accrued salaries and wages 4,920 5,238
Contractor's holdback 543 602
Subtotal 21,469 24,185
Accrued liabilities 9,585 42,604
Gross accounts payable and accrued liabilities 31,054 66,789
Accrued liabilities held on behalf of Government (2,683) (11,558)
Net accounts payable and accrued liabilities 28,371 55,231

Accrued liabilities associated with the loans receivable are considered accrued liabilities held on behalf of the Government. While the DH is expected to maintain accounting control over loans receivable, he has no authority regarding their disposition; therefore, liabilities related to the loans receivable are presented in reduction of the entity’s gross accounts payable and accrued liabilities.

5. Other Liabilities

The Agency enters into agreements with provincial governments to fund various transfer payment projects. The Agency records deposits from these provincial governments for their share of costs under various projects. Monies are distributed on behalf of contributors as projects are undertaken. Unused funds are returned to the provincial governments. Activity during the year is as follows: 

(in thousands of dollars)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
  2020 2019
Opening liability 1,005 392
Deposits 3,344 3,790
Payments (3,085) (3,177)
Closing liability 1,264 1,005

6. Employee Future Benefits

(a) Pension benefits – The Agency’s employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 per cent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plan benefits and they are indexed to inflation.

Both the employees and the Agency contribute to the cost of the plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Canada’s Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 consists of existing plan members as of December 31, 2012, and Group 2 consists of members who joined the plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2019-2020 expense amounts to $ 5,450,763 ($ 5,561,011 in 2018-2019). For Group 1 members, the expense represents approximately 1.01 times (same as in 2018-2019) the employee contributions and, for Group 2 members, approximately 1.00 times (same as in 2018-2019) the employee contributions.

The Agency’s responsibility with regard to the plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the plan’s sponsor.

(b) Severance benefits – The Agency 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:

(in thousands of dollars)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
  2020 2019
Accrued benefit obligation - Beginning of year  2,420 2,687
Expenses for the year  310 33
Benefits paid during the year  (292) (300)
Accrued benefit obligation - End of year  2,438 2,420

7. Accounts Receivable and Advances

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

(in thousands of dollars)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
  2020 2019
Receivables from contributions
     Conditionally repayable conditions met 31 32
     Defaulted conditionally repayable contributions 10,350 8,499
     Defaulted non-repayable contributions 591 348
     Overpayments to be recovered 265 259
Receivables from other federal government departments and agencies 1182 352
Receivables from external parties 54 66
Salary overpayment 127 107
  12,600 9,663
Allowance for doubtful accounts on receivables from external parties (11,111) (8,642)
Gross accounts receivable 1,489 1,021
Accounts receivable held on behalf of Government (180) (562)
Net accounts receivable (Receivable OGD + Empl advances) 1,309 459

Conditionally repayable contributions – These contributions relate to contributions made to outside parties, all or part of which become repayable if conditions specified in the contribution agreement come into effect. In 2019-2020, an allowance of $10,526,441 ($8,313,142 in 2018-2019) relating to these loans was recorded.

In 2019-2020, collections on conditionally repayable contributions amounted to $8,570,193 ($12,256,712 in 2018-2019).

In 2019-2020, the Agency’s write-offs were nil (same as in 2018-2019) for accounts (including defaulted non-repayable contributions) deemed uncollectible and where all possible avenues of collection have been exhausted. The write-off of a Crown debt is a bookkeeping action only and does not eliminate the obligation of a debtor to make payment, nor does it affect the right of the Crown to enforce collections. Payments received on Accounts Receivable that were written off were $1,800 for fiscal year 2019-20 (nil in 2018-2019).

Accounts receivable are considered financial assets held on behalf of the Government and are not available to discharge the department’s liabilities. While the DH is expected to maintain accounting control, he has no authority regarding the disposition of repayments received. Therefore, accounts receivable and advances are presented as a reduction to the entity’s gross accounts receivable.

8. Loans Receivable

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

(in thousands of dollars)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

 

2020 2019
Loans receivable  405,813 384,047
     Less: Unamortized discount on assistance loans  (19,504) (26,201)
   386,309 357,846
     Less: Allowance for uncollectibility  (89,477) (63,940)
Gross loans receivable  296,832 293,906
Loans receivable held on behalf of Government  (296,832) (293,906)
Net loans receivable  -  -

These loans relate to unconditionally repayable contributions made to outside parties that must be repaid without qualification. An allowance of $89,476,853 ($63,940,454 in 2018-2019) relating to these loans was recorded.

The loans receivable portfolio consists of approximately 2,000 non-interest-bearing unconditionally repayable contributions issued, for the most part, from 2011 to 2019 with prescribed annual repayment terms. The loans are recorded at their discounted net present values using market interest rates at the time of the loans.

In 2019-2020, collections on unconditionally repayable contributions amounted to $61,336,304 ($60,997,869 in 2018-2019). The Agency’s write-offs were nil (same as in 2018-2019) for accounts deemed uncollectible and where all possible avenues of collection have been exhausted. The write-off of a Crown debt is a bookkeeping action only and does not eliminate the obligation of a debtor to make payment, nor does it affect the right of the Crown to enforce collections. Payments received on Loans Receivable that were written off were $9,661 in 2019-20 (nil in 2018-2019).
Loans receivable are considered a financial asset held on behalf of the Government and are not available to discharge the department’s liabilities. While the DH is expected to maintain accounting control, he has no authority regarding the disposition of repayments received. Therefore, loans receivable are presented as a reduction to the entity’s gross loans receivable.

9. Investments

The following table presents details of the Agency’s investment balances:

(in thousands of dollars)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
  2020 2019
Preferred shares  6,810 6,812
Redemption of Preferred Shares  (3) (2)
   6,807 6,810
     Less: Allowance for write-down  (3,319) (3,319)
Gross Investment  3,488 3,491
Investment held on behalf of Government  (3,488) (3,491)
Net Investment  -  -

In order to help fulfill its mandate to promote economic development in the Cape Breton Region of Nova Scotia, the former Enterprise Cape Breton Corporation (ECBC) had taken equity interests in several companies in an effort to assist firms expand or innovate. 

10. Tangible Capital Assets

(in thousands of dollars)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
Vehicles Computer equipment In-house-developed software Machinery and equipment Other equipment Total
Cost  
Opening balance  1,024  334  3,666  143  500 5,667
Acquisitions  27  64  277  -   -   368
Disposals and write-offs  -   -   -   -  -  -  
Closing balance  1,051  398  3,943  143  500 6,035
Accumulated amortization
Opening balance  707  334  2,149  43  427 3,660
Amortization  83  1  97  9  -  190
Disposals and write-offs  -  -  -  -  -  -  
Closing balance  790  335  2,246  52  427 3,850
2020 Net book value  261  63  1,697  91  73 2,185
2019 Net book value  317  -  1,517  100  73 2,007

11. Contractual obligations

The nature of the Agency’s activities results in multi-year contracts whereby the Agency is 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)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
  2021 2022 2023 2024 Total
Transfer payments  381,773 76,141 17,490 1,936 477,340
Operations and maintenance 7,001 871 362 92 8,326
Total 388,774 77,012 17,852 2,028 485,666

12. Related-party transactions

The Agency is related as a result of common ownership to all government departments, agencies and Crown corporations. The Agency enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Agency 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 Agency received services without charge from certain common service organizations related to accommodations, legal services, the employer’s contribution to the health and dental insurance plans, and workers’ compensation coverage. These services provided without charge have been recorded in the Agency’s Statement of Operations and Departmental Net Financial Position as follows:

(in thousands of dollars)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
  2020 2019
Employer's contribution to the health and dental insurance plans 5,000 4,428
Accommodation (PSPC) 3,981 3,705
Legal Service (Justice) 206 196
Total 9,187 8,329
     

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 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 and audit services provided by the Office of the Auditor General, are not included as an expense in the Agency’s Statement of Operations and Departmental Net Financial Position.

13.  Segmented Information

Presentation by segment is based on the Agency’s departmental results framework and on the same accounting policies as described in Note 2, Summary of Significant Accounting Policies. 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 segmented results for the period are as follows:

(in thousands of dollars)

Atlantic Canada Opportunities Agency
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31
  Economic Development Internal Services 2020 Total 2019 Total
Transfer Payments  
Conditionally repayable
Industry  25,198  -  25,198 32,760
Conditions met  (10,363)  -  (10,363) (14,316)
Total conditionally repayable  14,835  -    14,835 18,444
Non-repayable  -      -   -
     Industry  22,018  -  22,018 9,832
     Non-profit organizations  133,170  -  133,170 139,213
     Other levels of government  11,488  -  11,488 9,474
Total non-repayable  166,676  -  166,676 158,519
Adjustments to prior year's accruals on transfer payments  (329)  -    (329) (370)
Loan discount portion on assistance loans  (1,242)  -    (1,242) 822
Provision for impaired loans and accounts receivable  28,005  -    28,005 6,163
Expenses incurred on behalf of Government  (26,763)  -    (26,763) (6,985)
Total transfer payments  181,182  -    181,182 176,593
  -   - -
Operating expenses -   - -
Personnel  49,902  22,339  72,241 65,125
Professional services  1,607  1,759  3,366 3,599
Transportation and telecommunications  1,966  860  2,826 3,051
Accommodations  2,751  1,231  3,982 3,704
Rental  214  1,713  1,927 2,070
Equipment (less than $10,000 per item)  23  788  811 537
Information  339  261  600 569
Utilities, material, supplies  69  213  282 363
Purchased repair and maintenance  2  254  256 167
Amortization of tangible capital assets  -    190  190 193
Miscellaneous expenses  259  966  1,225 415
Total operating expenses  57,132  30,574  87,706 79,793
Total expenses  238,314  30,574  268,888 256,386
Revenues        
Revenue from amortization of discount on assistance loans  5,454  -    5,454 7,376
Interest on overdue loans  334  -    334 403
Dividend on investments   9  -    9 10
Gain on disposal of tangible capital and non-capital assets  -    20  20 23
Miscellaneous revenues  4  -    4 7
   1  -    1 -
Revenues earned on behalf of government  (5,802)  -    (5,802) (7,796)
Total revenues  -    20  20 23
Net cost from continuing operations  238,314  30,554  268,868 256,363