Women and Gender Equality Canada financial statements (unaudited) for the fiscal year ending March 31, 2020

Statement of management responsibility including internal control over financial reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2020, and all information contained in these financial statements rests with Women and Gender Equality Canada management. These financial statements have been prepared using the Government of Canada’s accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of Women and Gender Equality Canada’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the 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 Women and Gender Equality Canada 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 ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

Women and Gender Equality Canada will be subject to periodic Core Control Audits performed by the Office of the Comptroller General and will use the results of such audits to adhere to Treasury Board Policy on Financial Management.

In the interim, Women and Gender Equality Canada has undertaken a risk-based assessment of the system of ICFR for the year ended March 31, 2020, in accordance with the Treasury Board Policy on Financial Management.

The financial statements of Women and Gender Equality Canada have not been audited.

Statement of financial position (unaudited)
As at March 31

(in dollars)

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

Statement of operations and departmental net financial position (unaudited)
For the year ended March 31

(in dollars)

Table notes:
Segmented information (Note 11)
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 dollars)

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

Statement of cash flows (unaudited)
For the year ended March 31

(in dollars)

Table note:
The accompanying notes form an integral part of these financial statements

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

1.  Authority and objectives

Women and Gender Equality Canada (WAGE) was established with the coming into force on December 13, 2018, of the Department for Women and Gender Equality Act. The mandate of WAGE is to advance equality with respect to sex, sexual orientation, and gender identity or expression through the inclusion of people of all genders, including women, in Canada’s economic, social, and political life. This application of a gender and diversity lens will help us to understand better the intersection of sex and gender with other identity factors. These factors include but are not limited to race, national and ethnic origin, Indigenous origin or identity, age, sexual orientation, socio-economic condition, place of residence and disability.

Programs

Expertise and Outreach: Through its Expertise and Outreach program, WAGE provides tools, expertise and advice:

1. To federal organizations and central agencies on their proposals to Cabinet and the Treasury Board
2. To further develop the federal government’s intrinsic capacity to conduct GBA+ analyses at all stages of policy development and program delivery, including gender-based budgeting
3. To provincial, territorial and local governments, private sector and civil society organizations that have the levers to address gender equality issues through policy, programming and organizational practices
4. To increase public awareness through outreach to the general public

Community Action and Innovation: Through its Community Action and Innovation program, WAGE provides grants and contributions to organizations to implement projects that are designed to strengthen the sector working to advance gender equality and bring some degree of systemic change in the underlying factors that perpetuate inequality at a local and regional level.

Internal Services: Internal Services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; and Acquisition Services.

2.  Summary of significant accounting policies

These financial statements have been prepared using the Government’s accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

(a) Parliamentary authorities

WAGE is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to WAGE do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the “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 2019-2020 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 Changes in Departmental Net Debt because these amounts were not included in the 2019-2020 Departmental Plan.

(b) Net cash provided by Government of Canada

WAGE operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by WAGE is deposited to the CRF, and all cash disbursements made by WAGE are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.

(c) Amounts due from or to the CRF

Amounts due from or to 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 represent the net amount of cash that WAGE is entitled to draw from the CRF without further authorities to discharge its liabilities.

(d) Revenues

Revenues from regulatory fees are recognized based on the services provided in the year.

(e) Expenses

Expenses are recorded on the accrual basis:

• Transfer payments are recorded as an expense in the year the transfer is authorized and all eligibility criteria have been met by the recipient
• Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment
• Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans, legal services and workers’ compensation are recorded as operating expenses at their estimated cost

(f) Employee future benefits

• Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer pension plan administered by the Government. The WAGE’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. WAGE’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
• Severance benefits: The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole

(g) Accounts receivable

Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.

(h) Non-financial assets

The costs of acquiring equipment and other capital property are capitalized as tangible capital assets and are amortized to expense over the estimated useful lives of the assets, as described in Note 7. All tangible capital assets and leasehold improvements having an initial cost of $2,500 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined in the Indian Act, works of art, museum collection and Crown land to which no acquisition cost is attributable; and intangible assets.

(i) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the Government's best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are the liability for employee future benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

(j) 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 certain services received on a without charge basis that are recorded for departmental financial statement purposes at the carrying amount.

3.  Parliamentary authorities

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

b) Authorities provided and used

(in dollars)

4. Accounts payable and accrued liabilities

The following table presents details of WAGE's accounts payable and accrued liabilities:

(in dollars)

5. Employee future benefits

a) Pension benefits

WAGE’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 % 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 WAGE 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 related 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 2019-2020 expense amounts to $2,615,822. For Group 1 members, the expense represents approximately 1.01 times the employee contributions and, for Group 2 members, approximately 1.00 times the employee contributions.

WAGE’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

Severance benefits provided to WAGE’s employees were previously based on an employee’s 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, 2020, substantially all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows:

(in dollars)

6. Accounts receivable and advances

The following table presents details of the WAGE's accounts receivable and advance balances:

(in dollars)

7. Tangible capital assets

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

(in dollars)

(in dollars)

(in dollars)

8. Contractual Obligations

The nature of WAGE's activities may result in some large multi-year contracts and obligations whereby WAGE 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:

(in dollars)

9. Related party transactions

WAGE is related as a result of common ownership to all government departments, agencies, and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual.

WAGE enters into transactions with these entities in the normal course of business and on normal trade terms.

a) Common services provided without charge by other government departments

During the year, WAGE received services without charge from certain common service organizations, related to accommodation and the employer’s contribution to the health and dental insurance plans. These services provided without charge have been recorded at the carrying value in WAGE’s Statement of Operations and Departmental Net Financial Position as follows:

(in dollars)

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 Services and Procurement Canada and audit services provided by the Office of the Auditor General, are not included in the WAGE’s Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with other government departments and agencies

(in dollars)

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

10. Transfers from an other government departments

On December 13, 2018, Status of Women Canada became WAGE in accordance with the Budget Implementation Act, 2018, No. 2, and transferred its operations including the stewardship responsibility for the assets and liabilities. Accordingly, the following assets and liabilities were transferred to WAGE on December 13, 2018 from Status of Women Canada:

(in dollars)

11. Segmented Information

Presentation by segment is based on WAGE'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 2. The following table presents the expenses incurred and revenues generated for the main programs, by major object of expense and by major type of revenue. The segment results for the period are as follows:

(in dollars)

12. Subsequent event

During the first two quarters of fiscal year 2020-2021, WAGE received approval and funding for the following initiatives in support of Canada’s COVID-19 pandemic response:

• Additional funding to address gender-based violence during COVID-19 pursuant to the Public Health Events of National Concern Payments Act ($50 million)
• Payments to support women’s shelters and sexual assault centres pursuant to the Public Health Events of National Concern Payments Act ($30 million)
• Contributions to women’s and other voluntary organizations for the purpose of furthering women’s participation in Canadian society ($10 million)

13. Comparative information

Comparative figures are for expenses and revenues for the period from December 13, 2018 to March 31, 2019.