Future-oriented Financial Statements as at March 31, 2014

• Statement of Management Responsibility
• Future-oriented Financial Statements
• Notes to Future-oriented Financial Statements

Citizenship and Immigration Canada
Statement of Management Responsibility

The management of Citizenship and Immigration Canada is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared.  These statements are based on the best information available and assumptions adopted as at March 7, 2013 and reflect the plans described in the Report on Plans and Priorities. 

Citizenship and Immigration Canada
Future-oriented Statement of Financial Position
As at March 31

(in thousands of dollars)

Contractual obligations (note 14)

Contingent liabilities (note 15)

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

Citizenship and Immigration Canada
Future-oriented Statement of Operations
and Departmental Net Financial Position
For the Year Ending March 31

(in thousands of dollars)

Segmented information (note 17)

The accompanying notes form an integral part of these future-oriented statements.

Citizenship and Immigration Canada
Future-oriented Statement of Change
in Departmental Net Financial Asset
For the Year Ending March 31

(in thousands of dollars)

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

Citizenship and Immigration Canada
Future-oriented Statement of Cash Flows
For the Year Ending March 31

(in thousands of dollars)

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

Citizenship and Immigration Canada
Notes to Future-oriented Financial Statements
For the Year Ending March 31

1. Authority and Objectives

Citizenship and Immigration Canada (CIC) was established on June 23, 1994 by the Department of Citizenship and Immigration Act. It is a Department named in Schedule I of the Financial Administration Act and currently reports to Parliament through the Minister of Citizenship, Immigration and Multiculturalism.

CIC administers the Citizenship Act of 1977 and shares responsibility with the Canada Border Services Agency (CBSA) for the Immigration and Refugee Protection Act (IRPA), which was enacted following a major legislative reform in 2002. On October 30, 2008, CIC also received responsibility from Canadian Heritage to implement the Canadian Multiculturalism Act of 1988.

The Department’s key strategic outcomes are:

• Migration of permanent and temporary residents that strengthens Canada’s economy
• Family and humanitarian migration that reunites families and offers protection to the displaced and persecuted
• Newcomers and citizens participate in fostering an integrated society
• Managed migration that promotes Canadian interests and protects the health, safety and security of Canadians

These four strategic outcomes are delivered with the following Programs:

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

Temporary Economic Residents: Rooted in objectives outlined in IRPA the focus of this Program is on processing and facilitating the entry into Canada of temporary foreign workers and international students. Temporary economic migration enhances Canada’s trade, commerce, cultural, educational and scientific activities, in support of our overall economic and social prosperity. The selection and processing involve the issuance of temporary resident visas, work permits and study permits to qualified applicants, as well as the refusal of unqualified applicants.

Family and Discretionary Immigration: CIC’s Family and Discretionary programs support the Government of Canada’s social goals for immigration. The Program objectives are to reunite family members and to allow for the processing of exceptional cases. Family Class provisions of IRPA enable Canadian citizens and permanent residents of Canada to apply to sponsor eligible members of the Family Class, including spouses and partners, dependent children, and parents and grandparents. Discretionary provisions in the legislation are used in cases where there are humanitarian and compassionate considerations or for public policy reasons. These discretionary provisions provide the flexibility to approve exceptional and deserving cases not anticipated in the legislation and to support the Government of Canada in its humanitarian response to world events and crises. The selection and processing involve the issuance of a permanent resident visa or granting of permanent residence to qualified applicants, as well as the refusal of unqualified applicants.

Refugee Protection: The Refugee Protection program is in the first instance about saving lives and offering protection to the displaced and persecuted. One arm of the program starts overseas where refugees and persons in refugee-like situations are selected by Canadian visa officers to be resettled as permanent residents to Canada. Flowing from Canada’s international and domestic legal obligations, the in-Canada asylum system evaluates the claims of individuals seeking asylum in Canada and grants permanent residence when a positive decision is rendered by the Immigration and Refugee Board of Canada.

Newcomer Settlement and Integration: In accordance with the Canadian Multiculturalism Act, the Employment Equity Act and IRPA, programming is developed based on policies that support the settlement, resettlement, adaptation and integration of newcomers into Canadian society. All permanent residents are eligible for settlement and integration programs. Programming is delivered by third parties (including provincial and municipal governments, school boards and post-secondary institutions, settlement service organizations and other non-governmental actors, and the private sector) across the country. However, accountability for expended funds and attaining outcomes remains with CIC

Citizenship for Newcomers and All Canadians: The purpose of the Citizenship program is to administer citizenship legislation and promote the rights and responsibilities of Canadian citizenship.  CIC administers the acquisition of Canadian citizenship by developing, implementing and applying legislation, regulations and policies that protect the integrity of Canadian citizenship and allow eligible applicants to be granted citizenship or be provided with a proof of citizenship. In addition, the program promotes citizenship, to both newcomers and the Canadian-born, through various events, materials and projects. Promotional activities focus on enhancing knowledge of Canada’s history, institutions, and values, as well as fostering an understanding of the rights and responsibilities of Canadian citizenship.

Multiculturalism for Newcomers and All Canadians: The Multiculturalism Program is the principal means of carrying out the Minister’s responsibilities under the Canadian Multiculturalism Act for promoting the full and equitable participation of individuals and communities of all origins. Grants and contributions to not-for-profit organizations, the private sector, provincial and municipal governments, non-federal public institutions, and individuals seek to advance overarching Program objectives. These objectives are to: build an integrated, cohesive society (through intercultural understanding, civic memory and pride and democratic values, and equality of opportunity); improve the responsiveness of institutions to the needs of a diverse population; and actively engage in discussions on multiculturalism and diversity at the international level. Direct public outreach and promotional activities by the Program primarily target young people. The Program assists federal partners to meet their obligations under the Act and ensures annual reporting to Parliament on its operation. It also engages with non-federal public institutions seeking to respond to diversity. The Program provides a forum for cooperation with provinces and territories and is the locus for Canada’s participation in international agreements and institutions with respect to multiculturalism, anti-racism and related issues.

Health Management: This program aims to provide effective immigration health services to manage the health aspect of migrant access and settlement to Canada, and facilitate the arrival of resettled refugees to Canada and their integration while contributing to the protection of the health and safety of all Canadians and contributing to the maintenance of sustainable Canadian health and social services. The program aims to evaluate health risks related to immigration and coordinate with international and Canadian health partners to develop risk management strategies and processes to assess the health of applicants wishing to immigrate to Canada and develop pre-departure, in-transit and post-arrival interventions. The strategies, processes and interventions are intended to reduce the impact of the risks identified on the health of Canadians and on Canada’s health and social services.

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

Canadian Influence in International Migration and Integration Agenda: Reflecting part of CIC’s mandate, this Program aims to influence the international migration and integration policy agenda. This is done by developing and promoting, together with other public policy sectors, Canada’s position on international migration, integration and refugee protection issues, and through participation in multilateral, regional and bilateral forums. CIC works closely with partner countries to ensure the effective administration of immigration laws through the exchange of information, including biometric data. This international migration policy development helps Canada advance its interests in the context of international migration as well as meet its international obligations and commitments. CIC supports international engagement and partnerships through membership in the International Organization for Migration, and contributions to other international migration policy organizations.

Internal Services: CIC’s internal services are groups of activities and resources that help the Department achieve its strategic outcomes. Internal services apply across CIC and are not linked to a specific program. These services include management and oversight, communications, legal, human resources management, financial management, information management, information technology, real property, materiel, acquisition, and travel and other administrative services.

CIC receives most of its funding through annual parliamentary authorities. Revenues, including fees and rights, are deposited to the Consolidated Revenue Fund and are not available for use by the Department.  Fees and rights are collected through the Immigration and Refugee Protection Regulations as well as through the Citizenship Regulations. Employee benefits are authorized by a statutory authority. CIC issues immigration loans through a non-budgetary non-lapsing authority.

2. Methodology and Significant Assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the Department as described in the 2013-14 Report on Plans and Priorities.

The main assumptions are as follows:

1. The Department's activities will remain substantially the same as for the previous year.
2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue, except as impacted by the Budget 2012 spending review.
3. Allowances for uncollectibility are based on historical experience.  The general historical pattern is expected to continue.
4. Estimated year end information for 2012-13 is used as the opening position for the 2013-14 planned results.

These assumptions are adopted as at March 7, 2013.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2012-13 and for 2013-14, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these future-oriented financial statements, CIC has made estimates and assumptions concerning the future. These estimates and judgements may differ from the subsequent actual results. Estimates and judgements are continually evaluated and are based on historical experience, trends, known information, and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented financial statements and the historical financial statements include:

1. The timing and amounts of acquisitions and disposals of capital assets may affect gains/losses and amortization expense.
2. Implementation of new collective agreements.
3. Economic conditions may affect both the amount of revenue earned and the collectability of loan receivables.
4. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, CIC will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates.

4. Summary of Significant Accounting Policies

These future–oriented 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:

5. Parliamentary Authorities

CIC receives most of its funding through annual parliamentary authorities.  Items recognized in the Future-oriented Statement of Operations and Departmental Net Financial Position and in the Future-oriented Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years.  Accordingly, CIC has different net results of operations for the year on a government funding basis than on an accrual accounting basis.  The differences are reconciled in the following tables:

a. Reconciliation of net cost of operations before government funding to current year authorities used

b. Authorities provided and used

6. Accounts Receivable and Advances

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

7. Loans Receivable

In accordance with the Immigration and Refugee Protection Act, CIC can issue immigration loans up to a maximum of $110,000,000.  Since February 28, 1995, all immigration loans bear interest at a rate determined by the Minister of Finance at the beginning of each calendar year.  Regulations provide for a period of up to 6 years for the repayment of the loans.  The interest rate on outstanding interest-bearing loans varies from 1.26% to 10.718%.  The closing balance of the immigration loans only includes the outstanding principal balance.  An allowance for doubtful accounts is made for loans when recovery is considered uncertain.

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

8. Accounts Payable and Accrued Liabilities

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

9. Immigrant Investment Program

The Immigrant Investor Program allows qualified immigrants to gain permanent residence in Canada by making an investment of $800,000 ($400,000 prior to December 1, 2010) in the Canadian economy.  The investment is returned to the investor, without interest, five years and two months after payment.

After meeting other immigration requirements, applicants are then required to pay their $800,000 ($400,000 prior to December 1, 2010) investment to the Receiver General for Canada.  CIC acts as an agent for the approved provincial funds by collecting the investments and distributing them to the approved funds according to a prescribed allocation formula (50 percent divided equally and 50 percent distributed according to provincial gross domestic product).  The investment is distributed to the participating provinces (Ontario, British Columbia, Saskatchewan, Manitoba, Nova Scotia, Newfoundland and Labrador, New Brunswick and Prince Edward Island) on the first day of the second month following receipt from the investor.

The participating provinces are responsible for investing their allocations to strengthen their economies and to create or continue employment.  They report to CIC quarterly, and after the five-year holding period, remit the full amount investment back to CIC.  Within 30 days of receipt of the full amount from the participating funds, CIC returns this investment to the investor (without interest).

The value of financial transactions estimated to be processed is as follows:

10. Deferred Revenue

The deferred revenue account was established to record fees and rights derived from the Citizenship Act and Regulations and the Immigration and Refugees Protection Act and Regulations. Fees are deferred until the application is deemed processed, while rights (right of citizenship and right of permanent residence) are deferred until the right is granted.

Details of the transactions related to this account are as follows:

11. Employee Future Benefits

a. Pension benefits

CIC’s employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government.  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 Plans benefits and they are indexed to inflation.

Both the employees and the Department contribute to the cost of the Plan. The 2013-14 expense is forecasted at $40,963 thousands ($42,900 thousands in 2012-13), which represents approximately 1.8 times the contributions by employees.

The Department’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

CIC 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.

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

Details of the severance benefits, estimated as at the date of these statements, are as follows:

12. Inventory

The following table presents details of the inventory, measured at cost using the first in, first out method.

13. Tangible Capital Assets (in thousands of dollars)

Disposals of assets under construction represent assets that are put into use in the year and have been transferred to the other capital asset classes.

14. Contractual Obligations

The nature of CIC’s activities can result in some large multi-year contracts and obligations whereby CIC will be obligated to make future payments in order to carry out its transfer payment programs or when the services/goods are received.

Significant contractual obligations that can be reasonably estimated are summarized as follows:

15. Contingent Liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown.

Claims and litigation

Claims have been made against the Department in the normal course of operations.  These claims include items with pleading amounts and other for which no amount is specified. Based on the Department's legal assessment of potential liability, no allowance was planned for March 31, 2014 (no allowance was estimated for 2012-13). Some of these potential liabilities 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 in the financial statements.

16. Related Party Transactions

CIC is related as a result of common ownership to all government departments, agencies, and Crown corporations.  CIC enters into transactions with these entities in the normal course of business and on normal trade terms.  In addition, during the year, CIC receives services obtained without charge from other government departments as disclosed below.

a.  Services provided without charge by other government departments

During the year, CIC receives services without charge from common service organizations related to accommodation, legal services, the employer’s contributions to the health and dental insurance plans, and workers' compensation. Additionally, the Department of Foreign Affairs and International Trade provides international immigration services at missions abroad.

These services provided without charge have been recognized in CIC’s future-oriented Statement of Operations and Departmental Net Financial Position as follows:

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 Works and Government Services Canada and audit services provided by the Office of the Auditor General are not included in the Department's Future-oriented Statement of Operations and Departmental Net Financial Position.

b. Other transactions with related parties

17. Segmented information

Presentation by segment is based on the Department's program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 4. The following table presents the forecasted expenses incurred and forecasted revenues generated for the main programs, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

(in thousands of dollars)