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Financial statements for the year ended March 31, 2022

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, 2022 and all information contained in these statements rests with the management of the Transportation Safety Board of Canada (TSB). These financial statements have been prepared by management using the Government’s accounting policies which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the TSB's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada and included in the TSB'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 TSB 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 on-going process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments. The TSB is subject to periodic Core Control Audits performed by the Office of the Comptroller General and uses the results of such audits to comply with the Treasury Board Policy on Financial Management. A Core Control Audit was performed in 2012–13 by the Office of the Comptroller General of Canada.

The Audit Report and related Management Action Plan are posted on the departmental website at http://www.bst-tsb.gc.ca/eng/divulgation-disclosure/index.html.

The 2021–22 financial statements of the TSB have not been audited.

The original version was signed by
Kathleen Fox
Chair

Gatineau, Canada
August 17, 2022

The original version was signed by
Luc Casault, CPA, CGA
Chief Financial Officer

Gatineau, Canada
August 16, 2022

Statement of financial position (unaudited) as at March 31 (in thousands of dollars)*

  2022 2021

Liabilities

 

 

Accounts payable and accrued liabilities (Note 4)

3,151

2,747

Vacation pay and compensatory leave

2,711

2,924

Employee future benefits (Note 5)

770

895

Total liabilities

6,632

6,566

Financial assets

 

 

Due from Consolidated Revenue Fund

2,427

2,456

Accounts receivable and advances (Note 6)

157

139

Total financial assets

2,584

2,595

Departmental net debt

4,048

3,971

Non-financial assets

 

 

Prepaid expenses

21

115

Inventory

83

92

Tangible capital assets (Note 7)

6,239

5,731

Total non-financial assets

6,343

5,938

Departmental net financial position

2,295

1,967

* See Note 8: Contractual obligations

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

The original version was signed by
Kathleen Fox
Chair

Gatineau, Canada
August 17, 2022

The original version was signed by
Luc Casault, CPA, CGA
Chief Financial Officer

Gatineau, Canada
August 16, 2022

Statement of operations and departmental net financial position (unaudited) for the year ended March 31 (in thousands of dollars)*

  2022 Planned results 2022 2021

Expenses

 

 

Independent safety investigations and communication of risks in the transportation system 

31,961

32,556

32,935

Internal services

7,990

7,610

7,271

Total expenses 

39,951

40,166

40,206

Revenues

 

 

Miscellaneous revenues

35

16

13

Total revenues 

35

16

13

Net cost of operations before government funding and transfers 

39,916

40,150

40,193

Government funding and transfers

 

 

 

Net cash provided by Government

 

35,850

38,023

Change in due from Consolidated Revenue Fund

 

(29)

(1,797)

Transfer of salary overpayments to other government departments

 

            1

-

Services provided without charge by other government departments (Note 9)

 

4,656

4,541

Total Government funding and transfers

 

40,478

40,767

Net cost of operations after government funding and transfers

 

(328)

(574)

Departmental net financial position - Beginning of year

 

1,967

1,393

Departmental net financial position - End of year

 

2,295

1,967

* * See Note 10: Segmented information

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

Statement of change in departmental net debt (unaudited) for the year ended March 31 (in thousands of dollars)*

  2022 2021

Net cost of operations after government funding and transfers

(328)

(574)

Change due to tangible capital assets

 

 

Acquisition of tangible capital assets

1,835

2,166

Amortization of tangible capital assets

(1,327)

(1,130)

Proceeds from disposal of tangible capital assets

(4)

(24)

Gain on disposal of tangible capital assets

4

13

Total change due to tangible capital assets

508

1,025

Change due to prepaid expenses

(94)

73

Change due to inventory

(9)

(30)

Net increase in departmental net debt

77

494

Departmental net debt - Beginning of year

3,971

3,477

Departmental net debt - End of year

4,048

3,971

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

Statement of cash flows (unaudited) for the year ended March 31 (in thousands of dollars)*

  2022 2021

Operating activities

 

 

Net cost of operations before government funding

40,150

40,193

Non-cash items:

 

 

Amortization of tangible capital assets

(1,327)

(1,130)

Gain on disposal of tangible capital assets

4

13

Services provided without charge by other government departments (Note 9)

(4,656)

(4,541)

Transfer of salary overpayments to other governments departments

(1)

-

Variations in Statement of Financial Position:

 

 

Increase (decrease) in accounts receivable and advances

18

(241)

(Decrease) increase in prepaid expenses

(94)

73

(Decrease) in inventory

(9)

(30)

(Increase) decrease in accounts payable and accrued liabilities

(404)

2,286

Decrease (increase) in vacation pay and compensatory leave

213

(943)

Decrease in employee future benefits

125

201

Cash used in operating activities

34,019

35,881

Capital investing activities

 

 

Acquisitions of tangible capital assets

1,835

2,166

Proceeds from disposal of tangible capital assets

(4)

(24)

Cash used in capital investing activities

1,831

2,142

Net cash provided by Government of Canada

35,850

38,023

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

Notes to the financial statements (unaudited) for the year ended March 31

Note 1: Authority and objectives

The Canadian Transportation Accident Investigation and Safety Board (CTAISB) was established in 1990 under the Canadian Transportation Accident Investigation and Safety Board Act and is a departmental corporation named in Schedule II to the Financial Administration Act. In its day-to-day activities the CTAISB is also known by the name Transportation Safety Board of Canada, or simply the TSB. The objective of the TSB is to advance transportation safety. It seeks to identify safety deficiencies in transportation occurrences and to make recommendations designed to eliminate or reduce any such safety deficiencies. In addition to investigations, including where necessary public inquiries into selected occurrences, the TSB may conduct studies into more general matters pertaining to transportation safety. The TSB has the exclusive authority to make findings as to causes and contributing factors when it investigates a transportation occurrence.

The TSB has the following four key programs to support the "independent safety investigations and communication of risks in the transportation system" core responsibility:

Within each program, personnel conduct independent safety investigations into selected transportation occurrences. They identify causes and contributing factors, assess risks to the system, formulate recommendations to improve safety, publish investigation reports, communicate safety information to stakeholders, undertake outreach activities with key change agents, as well as assess and follow up on responses to recommendations. These activities are carried out by highly qualified investigators who are experts in the transportation operational sectors. They also work closely with personnel who are responsible for executing specialized work in the following fields: engineering and technical, macro-analysis, human performance and communications.

The Internal services program also contributes to the achievement of TSB’s strategic outcome. This program includes the functions and resources required to support the needs of the programs of the four transportation modes and to meet the department’s corporate obligations in areas such as human resources, finance, administration, communications, information management and information technology.

Note 2: Summary of significant accounting policies

The 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 TSB is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the TSB does 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 Financial Position and the Statement of Operations and Departmental Net Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the two bases of reporting. The planned results amounts in the “Expenses” and “Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2021–22 Departmental Plan. Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2021–22 Departmental Plan.

(b) Net cash provided by Government

The TSB operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General of Canada. All cash received by the TSB is deposited to the CRF and all cash disbursements made by the TSB 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) Due from the Consolidated Revenue Fund (CRF)

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 represents the net amount of cash that the TSB 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 revenue takes place.

(e) Expenses

Expenses are recorded on an accrual basis:

(f) Employee future benefits

(g) Accounts receivable and advances

Accounts receivables and advances are stated at the lower of cost and net recoverable value.

(h) 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.

(i) Inventory

Inventories consist of personal protective clothing, corporate communications clothing and supplies held for future program delivery and not intended for resale. Inventory is valued at cost using the average cost method. If there is no longer any service potential, inventory is valued at the lower of cost or net realizable value.

(j) Tangible capital assets

All tangible capital assets having an initial cost of $5,000 or more are recorded at their acquisition cost. In addition, acquisitions of all informatics hardware are recorded as tangible capital assets regardless of their acquisition cost.

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

Capital assets class Amortization period

Building

40 years

Furniture

10 years

Office equipment and tools

5 years

Laboratory equipment

15 years

Informatics hardware

4 years

Informatics software - Purchased

7 years

Informatics software - Developed in-house

10 years

Motor vehicles

7 years

Other vehicles

15 years

Leasehold improvements

Lesser of the remaining term of the lease or useful life of the improvement.

Betterments

Over the useful life of the asset to which the improvement was made or the useful life of the betterment if significantly shorter.

Assets under construction 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.

(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 where estimates are used are the useful life of tangible capital assets and the liability for employee future benefits. 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.

(l) Related party transactions

Related party transactions, other than inter-entity transactions, are recorded at the exchange amount. Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:

  1. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
  2. Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.

Note 3: Parliamentary authorities

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

  2022 2021

Net cost of operations before government funding 

40,150

40,193

Adjustments for items affecting net cost of operations but not affecting authorities:

 

Services provided without charge by other government departments 

(4,656)

(4,541)

Amortization of tangible capital assets

(1,327)

(1,130)

Gain on disposal of tangible capital assets

4

13

Decrease (increase) in vacation pay and compensatory leave

213

(943)

Decrease in employee future benefits

125

201

(Increase) decrease accrual for unratified collective agreements

(409)

281

Refund of previous years' expenses

28

68

Revenues

16

13

Increase in accrued liabilities not charged to authorities

65

34

 Total items affecting net cost of operations but not affecting authorities

(5,941)

(6,004)

Adjustments for items not affecting net cost of operations but affecting authorities:

 

Acquisitions of tangible capital assets

1,835

2,166

Proceeds from disposal of tangible capital assets

(4)

(24)

(Decrease) increase in prepaid expenses

(94)

73

(Decrease) in inventory

(9)

(30)

Total items not affecting net cost of operations but affecting authorities

1,728

2,185

Current year authorities used

35,937

36,374

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

  2022 2021

Authorities provided:

 

 

Operating expenditures - Vote 1

31,772

30,363

Transfer from TB - Vote 10 - Government-wide Initiatives

25

17

Transfer from TB - Vote 15 - Compensation adjustments

242

2,075

Transfer from TB - Vote 25 - Operating Budget Carry Forward

1,295

974

Transfer from TB - Vote 30 - Paylist requirements

120

-

Statutory contributions to employee benefit plans 

3,740

3,948

Statutory spending of proceeds from disposal of surplus Crown assets

28

75

Spending of revenues as per Financial Administration Act Section 29.1

16

13

Less:

 

 

Authorities available for future years

(4)

(24)

Lapsed: Operating 

(1,297)

(1,067)

Current year authorities used

35,937

36,374

Note 4: Accounts payable and accrued liabilities

Accounts payable and accrued liabilities (in thousands of dollars)
  2022 2021

Accounts payable to other government departments and agencies

162

624

Accounts payable to external parties

720

1

Total accounts payable

882

625

Accrued liabilities

2,269

2,122

Total accounts payable and accrued liabilities

3,151

2,747

Note 5: Employee future benefits

(a) Pension benefits

The TSB's employees participate in the public service pension plan (the “Plan”), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits and they are indexed to inflation.

Both the employees and the TSB 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 2021–22 expense amounts to $2,527,107 ($2,693,749 in 2020-2021). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2020–2021) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2020–2021) the employee contributions.

The TSB'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

The TSB provides severance benefits to its employees based on 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. By March 31, 2022 all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

Changes in obligations (in thousands of dollars)
  2022 2021

Accrued benefit obligation, beginning of year

895

1,096

Expense for the year

(77)

(87)

Benefits paid during the year

(48)

(114)

Accrued benefit obligation, end of year

770

895

Note 6: Accounts receivable and advances

Accounts receivable and advances (in thousands of dollars)
  2022 2021

Receivables from other government departments and agencies

78

62

Receivables from external parties

72

68

Employee advances

7

9

Total accounts receivable and advances

157

139

Note 7: Tangible capital assets

Cost (in thousands of dollars)
  Opening balance Acquisitions Disposals and write-offs Adjustments Closing balance

Building

2,133

-

-

-

2,133

Furniture

298

17

-

315

Office equipment and tools

819

116

-

(96)

839

Laboratory equipment

3,220

64

-

96

3,380

Informatics hardware

4,121

273

-

-

4,394

Informatics software - Purchased

873

-

745

1,618

Informatics software - Developed in-house

7,299

435

-

(745)

6,989

Motor vehicles

566

-

-

-

566

Other vehicles

85

-

-

-

85

Leasehold improvements

749

29

-

-

778

Betterments

1,174

-

-

-

1,174

Assets under construction 

331

901

-

-

1,232

Total

21,668

1,835

-

-

23,503

Accumulated amortization (in thousands of dollars)
  Opening balance Amortization Disposals and write-offs Closing balance 2022 Net book value 2021 Net book value

Building

2,108

23

-

2,131

2

25

Furniture

99

19

-

118

197

199

Office equipment and tools

236

80

-

316

523

583

Laboratory equipment

2,566

125

-

2,691

689

654

Informatics hardware

3,056

493

-

3,549

845

1,065

Informatics software - Purchased

631

75

-

706

912

242

Informatics software - Developed in-house

5,174

385

-

5,559

1,430

2,125

Motor vehicles

225

89

-

314

252

341

Other vehicles

85

-

-

85

-

-

Leasehold improvements

744

3

-

747

31

5

Betterments

1,013

35

-

1,048

126

161

Assets under construction

-

-

-

-

1,232

331

Total

15,937

1,327

-

17,264

6,239

5,731

Note 8: Contractual obligations

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

Summary of significant contractual obligations (in thousands of dollars)
  2022–23 2023–24 2024–25 2025–26 2026–27 Total

Acquisition of goods and services

1,201

813

7

4

2

2,027

Note 9: Related party transactions

The TSB is related as a result of common ownership to all Government of Canada departments, agencies and Crown corporations. The TSB enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the TSB received 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 TSB received without charge from other departments: accommodation, workers' compensation, the employer's contribution to health and dental insurance plans. These services without charge have been recognized in the TSB's Statement of Operations and Departmental Net Financial Position as follows:

Common services provided without charge by other government departments (in thousands of dollars)
  2022 2021

Accommodation

2,195

2,222

Employer's contribution to the health and dental insurance plans

2,459

2,317

Workers' compensation

2

2

Total

4,656

4,541

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public 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 as an expense in the TSB's Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with other government departments and agencies (in thousands of dollars)

  2022 2021

Expenses - Other Government departments and agencies

6,670

5,543

Revenues - Other Government departments and agencies

4

2

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

Note 10: Segmented information

Presentation by segment is based on the TSB's core responsibility. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in Note 2.

Expenses incurred and revenues generated for the core responsibility, by major object of expense and by major type of revenue (in thousands of dollars)
  Independent safety investigations and communication of risks in the transportation system Internal services 2022 2021

Operating Expenses

 

 

 

 

Salaries and employee benefits

26,892

5,226

32,118

33,184

Professional and special services

1,175

853

2,028

1,755

Accommodation

1,835

361

2,196

2,222

Transportation and communications

258

300

558

463

Amortization

1,201

126

1,327

1,130

Repairs and maintenance

339

109

448

412

Utilities, materials, supplies and equipment

218

105

323

406

Rentals

161

456

617

452

Information

129

13

142

186

Other

348

61

409

(4)

Total Operating Expenses

32,556

7,610

40,166

40,206

Revenues

 

 

 

 

Miscellaneous revenues

16

-

16

13

Total revenues

16

-

16

13

Net cost of operations before government funding

32,540

7,610

40,150

40,193

Note 11: Subsequent events

The outbreak of the Coronavirus disease (COVID-19) has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown.

As such, the TSB's occurrence investigation operations have been impacted resulting in lower expenses mainly in the category of transportation and communication, and to a lesser degree, the category of professional and special services when compared to pre-pandemic years. Any possible future impacts on the TSB’s financial position and financial results in future periods are still to be determined.