ARCHIVED - Financial Statements of
Department of Fisheries and Oceans Canada
Year ended March 31, 2009

Archived Content

Information identified as archived on the Web is for reference, research or recordkeeping purposes. It has not been altered or updated after the date of archiving. Web pages that are archived on the Web are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, you can request alternate formats on the "Contact Us" page.

Department of Fisheries and Oceans
Management Responsibility for Financial Statements

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2009, and all information contained in these statements rests with departmental management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

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 DFO's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the DFO's Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within parliamentary authorities, and are properly recorded to maintain accountability for Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the DFO.

Management is supported by the Departmental Audit Committee, which provides the Deputy Minister with independent, objective advice, guidance and assurance on the adequacy of risk management, control, governance processes and audit capacity. Currently, the Committee is comprised of the Deputy Minister (Chair) and three members external to the Government, one of them being the vice-chair.

The financial statements of the DFO have not been audited.

 

Claire Dansereau, Deputy Minister
Ottawa, Canada
August 10, 2009
Cal Hegge
Chief Financial Officer

 

Department of Fisheries and Oceans Canada

Statement of Operations (unaudited)

For the Year Ended March 31

(in thousands of dollars)

  2009 2008
Expenses (Note 4)
Safe and Accessible Waterways
Canadian Coast Guard Agency 744,775 810,041
Small Craft Harbours 130,327 132,848
Science 51,976 57,327
Sustainable Fisheries and Aquaculture
Fisheries Management 399,851 407,175
Science 207,106 223,677
Aquaculture 11,420 6,186
Healthy and Productive Aquatic Ecosystems
Habitat Management 127,874 90,052
Science 81,080 88,569
Oceans Management 21,377 23,282
 
Total Expenses 1,775,786 1,839,157
 
Revenues (Note 5)
Safe and Accessible Waterways
Canadian Coast Guard Agency 48,065 45,994
Science 3,433 3,824
Small Craft Harbours 1,297 1,517
Sustainable Fisheries and Aquaculture
Fisheries Management 45,562 46,996
Science 381 501
Aquaculture 233 219
Healthy and Productive Aquatic Ecosystems
Habitat Management 396 578
Science 399 512
Oceans Management 39 64
 
Total Revenues 99,805 100,205
 
Net cost of operations 1,675,981 1,738,952

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

 

Department of Fisheries and Oceans Canada

Statement of Financial Position (unaudited)

At March 31

(in thousands of dollars)

  2009 2008
Assets
Financial assets
Accounts receivable and advances (Note 6) 18,652 21,956
 
Total financial assets 18,652 21,956
Non-financial assets
Inventory 38,546 35,641
Tangible capital assets (Note 7) 2,261,829 2,266,293
 
Total non-financial assets 2,300,375 2,301,934
 
  2,319,027 2,323,890
 
Liabilities
Accounts payable and accrued liabilities 265,716 244,529
Vacation pay and compensatory leave 67,582 64,463
Lease obligation for tangible capital assets (Note 8) 207 277
Deferred revenue (Note 9) 23 26
Other liabilities (Note 10) 13,662 13,660
Employee severance benefits (Note 11) 168,713 138,994
Environmental liabilities (Note 12a) 70,455 223,544
Contingent liabilities (Note 12b) 548 400
 
Total liabilities 586,906 685,893
 
Equity of Canada (Note 13) 1,732,121 1,637,997
 
  2,319,027 2,323,890

Contingent liabilities (Note 12b)

Contractual obligations (Note 14)

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

 

Department of Fisheries and Oceans Canada

Statement of Equity of Canada (unaudited)

For the Year Ended March 31

(in thousands of dollars)

  2009 2008
Equity of Canada, beginning of year 1,637,997 1,727,364
Net cost of operations (1,675,981) (1,738,952)
Current year appropriations used (Note 3) 1,747,545 1,616,633
Revenue not available for spending (59,147) (58,560)
Change in net position in the Consolidated Revenue Fund (Note 3c) (26,129) (6,104)
Services provided without charge by other government departments (Note 15) 107,836 97,616
 
Equity of Canada, end of year 1,732,121 1,637,997

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

 

Department of Fisheries and Oceans Canada

Statement of Cash Flow (unaudited)

For the Year Ended March 31

(in thousands of dollars)

  2009 2008
Operating activities
Net cost of operations 1,675,981 1,738,952
Non-cash items
Amortization of tangible capital assets (Note 7) (173,592) (170,651)
Loss on disposal of tangible capital assets (1,114) (6,524)
Loss on write-offs and write-downs of tangible capital assets (11,592) (25,986)
Services provided without charge by other government departments (107,836) (97,616)
Other 8,955 6,110
Variations in Statement of Financial Position
(Decrease) in accounts receivable and advances (3,304) (5,442)
Increase (decrease) in inventory 2,905 (1,624)
(Increase) in accounts payable and accrued liabilities (21,187) (874)
Decrease (increase) in vacation pay and compensatory leave (3,119) 4,667
Decrease in deferred revenue 3 62
Decrease (Increase) in other liabilities (2) 3,953
Decrease (Increase) in employee severance benefits (29,719) 485
Decrease (Increase) in environmental liabilities 153,089 (54,347)
Decrease (Increase) in contingent liabilities (148) 1,370
 
Cash used by operating activities 1,489,320 1,392,535
 
Capital investment activities
Payment of lease obligation for tangible capital assets 70 67
Acquisitions of tangible capital assets 174,856 163,101
Proceeds from the disposal of tangible capital assets (1,977) (3,734)
 
Cash used by investing activities 172,949 159,434
 
Financing activities
 
Net cash provided by Government of Canada 1,662,269 1,551,969

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

 

Department of Fisheries and Oceans Canada

Notes to Financial Statements (unaudited)

For the year ended March 31, 2009

1. Authority and purpose

The Department of Fisheries and Oceans (DFO) was established under the Department of Fisheries and Oceans Act. The DFO reports to Parliament through the Minister of Fisheries and Oceans.

The mandate of the DFO, on behalf of the Government of Canada, is to be responsible for developing and implementing policies and programs in support of Canada's economic, social, ecological and scientific interests in oceans and fresh waters.

The DFO's guiding legislation includes the Oceans Act and the Fisheries Act. The DFO is also one of the three departments responsible for the Species at Risk Act.

The DFO's three strategic outcomes are delivered through nine program activities, which are described below.

Safe and Accessible Waterways

Canadian Coast Guard Agency: Provision of maritime services that contribute to the enhancement and maintenance of maritime safety and commerce, protection of the marine and freshwater environment, as well as oceans and fisheries resource management, security and other government maritime priorities via maritime expertise, Canada's civilian fleet, a broadly distributed shore infrastructure and collaboration with various stakeholders.

Small Craft Harbours: Operation and maintenance of a national system of harbours critical to Canada's commercial fishing industry.

Science: Provision of scientific research, monitoring, advice, products and services and data management in support of Safe and Accessible Waterways.

Sustainable Fisheries and Aquaculture

Fisheries Management: Conservation of Canada's fisheries resources to assure sustainable resource utilization through close collaboration with resource users and stakeholders.

Aquaculture: Creation of the conditions for a vibrant and innovative aquaculture industry that is environmentally and socially responsible, economically viable and internationally competitive.

Science: Provision of scientific research, monitoring, advice, products and services and data management in support of Sustainable Fisheries and Aquaculture.

Healthy and Productive Aquatic Ecosystems:

Oceans Management: Conservation and sustainable use of Canada's oceans, in collaboration with others, through integrated oceans management plans which include marine protected areas and marine environmental quality objectives.

Habitat Management: Protection and conservation of freshwater and marine fish habitat, in collaboration with others, through a balanced application of regulatory and non-regulatory activities, including reviewing development proposals, conducting environmental assessments and monitoring compliance and effectiveness.

Science: Provision of scientific research, monitoring, advice, products and services and data management in support of Healthy and Productive Aquatic Ecosystems.

2. Summary of significant accounting policies

The financial statements have been prepared in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector.

Significant accounting policies are as follows:

  1. Parliamentary appropriations — The DFO is financed by the Government of Canada through parliamentary appropriations. Appropriations provided to the DFO do not parallel financial reporting according to Canadian generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between these bases of reporting.
  2. Net cash provided by government — All departments operate within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash receipts are deposited to the CRF and all cash disbursements made by departments 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 federal government.
  3. Change in net position in the CRF is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of revenue not available for spending recorded by the DFO. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.
  4. Revenues
    • Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
    • Other revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
    • Revenues that have been received but not earned are recorded as deferred revenues; these include donations received for a specified purpose.
  5. Expenses
    • Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.
    • Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement.
    • Vacation pay and compensatory leave are expensed by the DFO in the year that the entitlement occurs.
    • Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans, administration costs and commissions paid to provincial workers' compensation boards and legal services are recorded as operating expenses at their estimated cost.
  6. Employee future benefits
    • Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government of Canada. The DFO's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require the DFO to make contributions for any actuarial deficiencies of the Plan.
    • Severance benefits: Employees are entitled to severance benefits, as provided for under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
  7. Accounts receivable and advances are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.
  8. 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, and the case is considered material, the contingency is disclosed in note 12(b) to these financial statements.
  9. Environmental liabilities — Environmental liabilities reflect the estimated costs related to the management and remediation of environmentally contaminated sites. Based on management's best estimates, a liability is accrued and an expense recorded when the contamination occurs or when the DFO becomes aware of the contamination and is obligated, or is likely to be obligated to incur such costs. If the likelihood of the DFO's obligation to incur these costs is not determinable, or if an amount cannot be reasonably estimated, the costs are disclosed as contingent liabilities in note 12(a) to these financial statements.
  10. Inventories — Inventories consist of parts, material and supplies held for future program delivery. They are valued at cost. If they no longer have service potential, they are valued at the lower of cost or net realizable value.
  11. Foreign currency transactions — Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in foreign currencies are translated using exchange rates in effect on March 31. Gains resulting from foreign currency transactions are included in the statement of operations. (Note 5, Other revenue)
  12. Tangible capital assets — All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. The DFO does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves or museum collections.

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

    Asset Class Amortization Period
    Buildings 10-40 years
    Work and infrastructure 5-75 years
    Machinery and equipment 3-25 years
    Informatics hardware 3-5 years
    Informatics purchased and developed software 3 years
    Arms and weapons for defense 5-10 years
    Other equipment, including furniture 10 years
    Ships and boats 5-40 years
    Aircraft 15-25 years
    Motor vehicles (non-military) 5-20 years
    Other vehicles 10 years
    Leasehold improvements — buildings *
    Leasehold improvements — works and infrastructure *
    Assets under capital leases **

    * the lesser of the economic life of the improvement or the lease term

    ** over the period of expected use, i.e., the economic life or lease term

  13. Proceeds associated with the disposal of real property through Public Works and Government Services Canada (PWGSC) are not recorded in the DFO's financial statements. PWGSC is responsible for the accounting and reporting of these proceeds.
  14. Measurement uncertainty — The preparation of these financial statements in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector, requires management to make estimates and assumptions that could 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 allowance for vacation pay and compensatory leave, allowance for bad debts, environmental liabilities, the useful life of tangible capital assets, contingent liabilities and employee severance benefits. Actual results could differ significantly 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 appropriations

The DFO receives most of its funding through annual parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through parliamentary appropriations in prior, current or future years. Accordingly, the DFO 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:

3(a) Reconciliation of net cost of operations to current year appropriations used

  2009 2008
  (in thousands of dollars)
Net cost of operations 1,675,981 1,738,952
Adjustments for items affecting net cost of operations but not affecting appropriations  
Add (less):  
Revenue not available for spending 59,147 58,560
Amortization of tangible capital assets (173,592) (170,651)
Loss on disposal of tangible capital assets (1,114) (6,524)
Loss on write-offs and write-downs of tangible capital assets (11,592) (25,986)
Services provided without charge by other government departments (107,836) (97,616)
Increase (decrease) in inventory 2,905 (1,624)
Decrease (increase) in vacation pay and compensatory leave (3,119) 4,667
Decrease (increase) in environmental liabilities 153,089 (54,347)
Decrease (increase) in contingent liabilities (148) 1,370
Decrease (increase) in employee severance benefits (29,719) 485
Charges against earmarked supplementary fish fines (135) (42)
Other 8,752 6,221
 
Total adjustments for items not affecting appropriations (103,362) (285,487)
 
Adjustments for items not affecting net cost of operations but affecting appropriations  
Add (Less):  
Acquisitions of tangible capital assets 174,856 163,101
Payment of lease obligation for tangible capital assets 70 67
 
Total adjustments for items affecting appropriations 174,926 163,168
 
Current year appropriations used 1,747,545 1,616,633

 

3(b) Appropriations provided and used

  2009 2008
  (in thousands of dollars)
Appropriations provided
Vote 1 — Operating expenditures 1,324,766 1,279,107
Vote 5 — Capital expenditures 310,917 263,510
Vote 10 — Grants and contributions 98,068 82,593
Statutory amounts 126,572 123,181
Loans and advances for the Freshwater Fish Marketing Corporation 50,000 50,000
Less:
Appropriations available for future years (51,325) (51,938)
Lapsed appropriations (111,453) (129,820)
 

Current year appropriations used 1,747,545 1,616,633

While the appropriations for loans and advances of the Freshwater Fish Marketing Corporation (FFMC) are included in note 3(b) and available for future years, the activities of the FFMC are not reported in these financial statements.

 

3(c) Reconciliation of net cash provided by Government to current year appropriations used

  2009 2008
  (in thousands of dollars)
Net cash provided by Government of Canada 1,662,269 1,551,969
 
Revenue not available for spending 59,147 58,560
 
Change in net position in the Consolidated Revenue Fund  
Decrease in accounts receivable and advances 3,304 5,442
Increase in accounts payable and accrued liabilities 21,187 874
(Decrease) in deferred revenue (3) (62)
Increase (decrease) in other liabilities 2 (3,953)
Other 1,639 3,803
 
  26,129 6,104
 
Current year appropriations used 1,747,545 1,616,633

 

4. Expenses

The following table presents details of expenses by category.

  2009 2008
  (in thousands of dollars)
Operating and administration
Personnel and employee benefits 994,039 881,222
Professional and special services 244,514 245,423
Amortization 173,592 170,651
Utilities, material and supplies 122,047 107,812
Repair and maintenance 118,133 97,246
Travel and relocation 64,830 58,472
Increase (decrease) in environmental liabilities (153,089) 54,347
Machinery and equipment 52,824 51,025
Rental 23,098 29,664
Loss on write-off and write-downs of tangible capital assets 11,592 25,986
Telecommunication 19,212 18,219
Loss on disposal of tangible capital assets 2,695 9,675
Communication services 5,353 5,280
Damage and other claims against the Crown 283 832
Other expenses 2,048 9,935
 
Total operating and administration 1,681,171 1,765,789
 
Transfer payments
First Nations and Inuit People 75,400 59,107
Non-profit organizations 17,576 10,575
Individuals 365 2,466
Other level of governments within Canada 768 900
Other countries and international organizations 481 295
Industry 25 25
 
Total transfer payments 94,615 73,368
 
Total expenses 1,775,786 1,839,157

 

5. Revenues

The following table presents details of revenues by category.

  2009 2008
  (in thousands of dollars)
Revenue
Sales of goods and services 91,912 91,960
Gains on disposals of tangible capital assets 1,581 3,151
Other revenue 6,247 4,690
Revenue from earmarked supplementary fish fines 65 296
Interest on Haddock loan 108
 
Total revenues 99,805 100,205

 

6. Accounts receivable and advances

The following table presents details of accounts receivable and advances.

  2009 2008
  (in thousands of dollars)
Receivables
Receivables from external parties 35,475 34,689
Receivables from other federal government departments and agencies 8,255 12,643
Accrued interest on loans 1,556 1,556
Refunds of program expenses 254 132
 
Less: Allowance for doubtful accounts on external receivables (27,137) (27,321)
 
Total receivables 18,403 21,699
 
Loans and advances
Accountable advances 249 257
Loans (1) 1,472 1,472
Allowance on loans and advances (1,472) (1,472)
 
Total loans and advances 249 257
 
Total accounts receivable and advances 18,652 21,956

(1) Loans of $1.4 million have been made to Haddock fishermen ($1.3 million, interest of 8% per annum, repayable over 4 years until 1979) and to Canadian producers of frozen groundfish ($0.1 million, interest of 13 % per annum, repayable over 7 years until 1987).

 

7. Tangible capital assets

(in thousands of dollars)
  Cost
  Opening balance
April 1, 2008
Acquisitions Disposals/
write-offs
WIP Transfers Corrections/
Reclassifications
Closing balance
March 31, 2009
Land 20,364 (1) 20,363
Buildings 497,929 153 (482) 10,257 91 507,948
Works and infrastructure 1,896,246 (4,704) 36,682 3,069 1,931,293
Machinery and equipment 380,066 5,656 (14,695) 7,920 2,011 380,958
Informatics hardware 53,380 605 (5,088) 1,052 229 50,178
Informatics software 22,468 1,995 24,463
Arms and weapons for defense 442 7 (152) 5 302
Other equipment, including furniture 550 18 (8) 560
Ships and boats 1,626,267 1,359 (16,612) 28,004 2,227 1,641,245
Aircraft 35,455 35,455
Motor vehicles (non-military) 66,149 6,264 (5,415) 197 67,195
Other vehicles 8,164 119 (343) 141 201 8,282
Leasehold improvements 540,188 (818) 4,966 114 544,450
Engineering work in progress-construction (2) 288,748 151,909 (10,061) (88,135) 342,461
Work-in-progress — software (2) 14,636 8,766 (1,109) (2,882) 19,411
Assets under capital lease 525 525
Total 5,451,577 174,856 (59,488) 8,144 5,575,089

 

(in thousands of dollars)
  Accumulated amortization Net book value
  Accumulated
amortization
April 1, 2008
Amortization Disposal/
write-offs
Corrections/
Reclassifications
Accumulated
amortization
March 31, 2009
March 31, 2009 March 31, 2008
Land 20,363 20,364
Buildings 307,686 20,114 (388) 26 327,438 180,510 190,243
Works and infrastructure 975,724 62,520 (3,608) (26) 1,034,610 896,683 920,522
Machinery and equipment 271,030 16,858 (14,689) 740 273,939 107,019 109,036
Informatics hardware 48,508 2,555 (4,266) 6 46,803 3,375 4,872
Informatics software 20,340 2,070 (805) 21,605 2,858 2,128
Arms and weapons for defense 431 11 (143) (5) 294 8 11
Other equipment, including furniture 509 7 (8) 508 52 41
Ships and boats 1,150,015 44,535 (15,881) (554) 1,178,115 463,130 476,252
Aircraft 31,799 1,006 32,805 2,650 3,656
Motor vehicles (non-military) 41,973 5,760 (5,231) (42) 42,460 24,735 24,176
Other vehicles 6,443 303 (36) (145) 6,565 1,717 1,721
Leasehold improvements 330,694 17,748 (561) 347,881 196,569 209,494
Engineering work in progress - construction (2) 342,461 288,748
Work-in-progress - software (2) 19,411 14,636
Assets under capital lease 132 105 237 288 393
Total 3,185,284 173,592 (45,616) 3,313,260 2,261,829 2,266,293

 

Amortization expense for the year ended March 31, 2009, is $173,592 (2008 - $170,651)

Some work-in-progress projects have not been re-classified as tangible capital assets though the related assets were placed in service. This will result in overstated work-in-progress, understated asset value by category and understated annual depreciation expense.

 

8. Lease obligation for tangible capital assets

The DFO has entered into agreements to rent information technology equipment under capital leases with a cost of $524,772 and accumulated amortization of $237,005 as at March 31, 2009 (Note 7). Interest costs are included in Other expenses (Note 4). The obligations for the upcoming years include the following:

  2009 2008
  (in thousands of dollars)
Maturing year
2009 81
2010 80 80
2011 80 80
2012 58 58
 
Total future minimum lease payments 218 299
Less: imputed interest (4.1%) (11) (22)
 
Balance of obligations under leased tangible capital assets 207 277

 

9. Deferred revenue

Deferred revenue represents the balance at year-end of unearned revenue stemming from donations, which are restricted to fund the research, development, management and promotion of fisheries and oceans related issues. Details of the transactions related to this account are as follows:

  Opening balance,
April 1, 2008
Donations
received
Revenue
Recognized
Closing balance,
March 31, 2009
  (in thousands of dollars)
Deferred revenue
Restricted donations 26 2 (5) 23

 

10. Other liabilities

Other liabilities represent funds received by the DFO under regulations, cost-sharing agreements or to fund projects. Details of the transactions related to these accounts are as follows:

  Opening balance,
April 1, 2008
Receipts and
other credits
Payments and
other charges
Closing balance,
March 31, 2009
  (in thousands of dollars)
Federal/provincial cost-sharing agreements 565 873 (398) 1,040
Miscellaneous project deposits 12,357 13,270 (14,027) 11,600
Sales of seized assets — Fisheries Act 567 585 (437) 715
Contractors' security deposits 171 408 (272) 307
Total 13,660 15,136 (15,134) 13,662

 

11. Employee benefits

(a) Pension benefits: The DFO'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 two percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the DFO contribute to the cost of the Plan. The DFO's 2008-09 expense amounts to $88 million ($86 million 2007-08), which represents approximately 2.0 times (2.1 in 2007-08) the contributions by employees.

The DFO'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 DFO provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, are as follows.

  2009 2008
  (in thousands of dollars)
Accrued benefit obligation, beginning of year 138,994 139,479
Expense for the year 44,438 13,457
Benefits paid during the year (14,719) (13,942)
 
Accrued benefit obligation, end of year 168,713 138,994

 

12. Contingent liabilities

(a) Contaminated sites

Liabilities are accrued to record the estimated costs related to the management and remediation of contaminated sites where the DFO is obligated or likely to be obligated to incur such costs. The DFO has identified sites where such action is possible and for which a liability of $70.5 million ($223.5 million in 2007-08) has been recorded. The DFO has estimated additional costs of $135.1 million ($163.3 million in 2007-08) that are not accrued, as these are not considered likely to be incurred at this time.

Until 2008, the total estimated cost included predictions based on the extrapolation of costs assessed on a number of sites to DFO's un-assessed and partially assessed portfolio. Due to the high level of uncertainty of these predictions, starting March 31, 2009, the Department will no longer include predicted costs in its estimation of environmental liabilities.

The DFO's ongoing efforts to assess contaminated sites may result in additional environmental liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. These liabilities will be accrued in the year in which they become known.

(b) Claims and litigation

Claims have been made against the DFO in the normal course of operations. Legal proceedings for claims totaling approximately $380.7 million ($460.9 million in 2007-2008) were still pending at March 31, 2009. 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 ($0.5 million in 2008-2009 and $0.4 million in 2007-2008) and an expense recorded in the financial statements.

13. Equity of Canada

  2009 2008
  (in thousands of dollars)
Restricted Equity of Canada, April 1 809 851
Supplementary Fish Fines Account
Revenues 65 296
Expenses (200) (338)
 
Restricted Equity of Canada, March 31 674 809
 
Unrestricted Equity of Canada, March 31 1,731,447 1,637,188
 
Total Equity of Canada at March 31 1,732,121 1,637,997

Section 79.2 of the Fisheries Act requires that revenues from fines imposed be earmarked and that related payments and expenses be charged against such revenues. The Supplementary Fish Fines Account presents these revenues and expenses and the year-end balance available for future years.

14. Contractual Obligations

The nature of the DFO's activities can result in some large multi-year contracts and obligations whereby the DFO 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:

(in thousands of dollars)
  2010 2011 2012 2013 2014
and thereafter
Total
Operating lease 12,673         12,673
Total 12,673         12,673

 

15. Related party transactions

The DFO is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The DFO enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the DFO received services which were obtained without charge from other Government departments as presented in part (a).

(a) Services provided without charge by other government departments:

During the year, the DFO received without charge from other departments, accommodation, legal fees and the employer's contribution to the health and dental insurance plans, administration costs and commissions paid to provincial workers' compensation boards. These services without charge have been recognized in the DFO's Statement of Operations as follows:

  2009 2008
  (in thousands of dollars)
Accommodation provided by Public Works and Government Services Canada 41,810 42,283
Employer's contribution to the health and dental insurance plans provided by Treasury Board Secretariat 62,151 50,293
Administration costs and commissions paid to provincial workers' compensation boards by Social Development Canada. 1,212 1,053
Legal services provided by Justice Canada 2,663 3,987
 
Total services provided without charge 107,836 97,616

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the DFO's Statement of Operations.

(b) Payables and receivables outstanding at year-end with related parties are as follows:

  2009 2008
  (in thousands of dollars)
Accounts receivable with other government departments and agencies 8,255 12,643
Accounts payable to other government departments and agencies 36,988 35,105

 

16. Comparative information

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