11024.2 Examples of “other matters” reported in Crown corporation auditor’s reports

Oct-2012

Atomic Energy of Canada Limited (1996)

I wish to draw your attention to the fact that, for each of the past five years, my report on the annual financial statements and transactions of the corporation has referred to the corporation’s failure to record its liability for decommissioning and site remediation costs. These are significant costs of the corporation, but they have been excluded from its financial statements. The corporation refers to two reasons for not recording the liability—its view that much of the future work could not be reasonably estimated and because, historically, decommissioning activities have been financed through parliamentary appropriations. However, I do not accept these reasons because other organizations have estimated, recorded and reported these types of costs and because proper accountability reporting requires the corporation to estimate and record this liability on its financial statements, regardless of how it is to be financed. Although not a prerequisite to the proper accounting for this liability, from the corporation’s perspective, an associated issue is the respective responsibilities of the corporation and the government for funding these costs. I encourage the corporation and the government to, together, clarify this responsibility in the coming year, perhaps as part of the finalization of the funding arrangements described in Notes 7 and 10 to the financial statements.

Atomic Energy of Canada Limited (2008)

Pursuant to paragraph 132(2)(b) of the Financial Administration Act, we wish to bring an “other matter” to Parliament’s attention. As described in Note 20 to the consolidated financial statements, the 2007-2008 to 2011-2012 Corporate Plan received the required Governor in Council approval on June 5, 2008. The Corporate Plan sets out the strategic direction and budgets for the Corporation and is of particular importance to the Corporation given the significance of government funding and major on-going initiatives.

Atomic Energy of Canada Limited (2010)

Pursuant to paragraph 132(2)(b) of the Financial Administration Act, we wish to bring an “other matter” to Parliament’s attention. Subsequent to year-end, on May 13, 2010, the Governor in Council approved only the 2009–2010 portion of the Corporation’s 2009–2014 Corporate Plan. The Corporate Plan sets out the strategic direction and revised operating and capital budgets for the Corporation without making assumption as to the outcome of any possible restructuring as described in Note 2 to the Consolidated Financial Statements. This Plan is of particular importance to the Corporation given the significance of Government funding to major ongoing initiatives.

Canada Lands Company Limited (2000)

As required by paragraph 132 (2) (b) of the Financial Administration Act, we wish to bring Parliament’s attention an other matter. As disclosed in Note 1 to the consolidated financial statements, Parc Downsview Park Inc., a wholly owned subsidiary of the Corporation, commenced operations in April 1999. In accordance with the government’s decisions, it was incorporated under the Canada Business Corporations Act pursuant to an order in council. However, the Government of Canada has not requested and accordingly, to date, Parliament has not provided clear and explicit authority for the creation and operation of a national urban park, nor has it authorized the related spending of public funds.

Canada Lands Company Limited (2001)

As required by paragraph 132(2)(b) of the Financial Administration Act, we again wish to bring an “other matter” to Parliament’s attention regarding Parc Downsview Park Inc., a wholly owned subsidiary of the Corporation. Last year, we reported that the Government of Canada had not requested, and accordingly Parliament had not provided, clear and explicit authority for the creation and operation of an urban park, nor had Parliament authorized the related spending of public funds. The Government’s intentions for the creation of the park and a related transaction undertaken in the year ended 31 March 2001 are disclosed in Note 1 to the consolidated financial statements. The Government of Canada has not yet sought or received Parliamentary authority for the creation and operation of the park and related spending.

Laurentian Pilotage Authority (2005)

As required by paragraph 132(2)(b) of the Financial Administration Act, I wish to bring as an “other matter” to Parliament’s attention the accumulated deficit of the Authority with regard to the self sufficiency requirements of the Pilotage Act. For a second year, the Authority’s deficit has increased by $3 million. As mentioned in Note 2 to the financial statements, the accumulated deficit is in the amount of $10.2 million and working capital is in a negative amount of $7.4 million as at December 31, 2005. As mentioned in Note 9, the National transportation Agency has not accepted the increase in tariffs implemented since July 2005. Furthermore, the 2005–2009 Corporate Plan has not been approved by the Governor in Council as required by the Financial Administration Act. Consequently, without a turnaround of its financial situation, there is a high risk that the Authority will not be able to fulfill its mandate.

Laurentian Pilotage Authority (2006)

As required by paragraph 132(2)(b) of the Financial Administration Act, for a second year, I wish to bring as an “other matter” to Parliament’s attention the accumulated deficit of the Authority with regard to the self sufficiency requirements of the Pilotage Act. As mentioned in Note 2 to the financial statements, the accumulated deficit is in the amount of $7.8 million as at December 31, 2006 ($10.2 million in 2005) and the working capital is in a deficit position of $5 million ($7.4 million in 2005).  As described in Note 2, the Authority plans to eliminate its accumulated deficit by 2010. Thus, the Authority must continue to improve its financial situation in order to reduce the risk of not being able to fulfill its mandate.