2022-2023 Financial statements

Text version

Independent auditor’s report

To the Speaker of the House of Commons and the Speaker of the Senate

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of the Office of the Information Commissioner of Canada (the Office), which comprise the statement of financial position as at 31 March 2023, and the statement of operations and net financial position, statement of change in net debt and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Office as at 31 March 2023, and the results of its operations, changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Office in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Office’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Office or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Office’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Office’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Office’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Office to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on Compliance with Specified Authorities

Opinion

In conjunction with the audit of the financial statements, we have audited transactions of the Office of the Information Commissioner of Canada coming to our notice for compliance with specified authorities. The specified authorities against which compliance was audited are the Financial Administration Act and regulations and the Access to Information Act.

In our opinion, the transactions of the Office of the Information Commissioner of Canada that came to our notice during the audit of the financial statements have complied, in all material respects, with the specified authorities referred to above.

Responsibilities of Management for Compliance with Specified Authorities

Management is responsible for the Office of the Information Commissioner of Canada’s compliance with the specified authorities named above, and for such internal control as management determines is necessary to enable the Office of the Information Commissioner of Canada to comply with the specified authorities.

Auditor’s Responsibilities for the Audit of Compliance with Specified Authorities

Our audit responsibilities include planning and performing procedures to provide an audit opinion and reporting on whether the transactions coming to our notice during the audit of the financial statements are in compliance with the specified authorities referred to above.

Original signed

Catherine Lapalme, CPA, CA
Principal
for the Auditor General of Canada

Ottawa, Canada
20 September 2023

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, 2023 and all information contained in these statements rests with the management of the Office of the Information Commissioner of Canada (the "Office”). 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 judgement, 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 Office’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Office’s Departmental Result 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 Office and through conducting an annual 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.

A risk-based assessment of the system of ICFR for the year ended March 31, 2023 was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.

The effectiveness and adequacy of the Office's system of internal control is reviewed by the Audit and Evaluation Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the Information Commissioner of Canada.

The Auditor General, the independent auditor for the Government of Canada, has expressed an opinion on the fair presentation of the financial statements of the Office which does not include an audit opinion on the annual assessment of the effectiveness of the Office's internal controls over financial reporting.

Gatineau, Canada
September 20, 2023

Statement of Financial Position

Contractual obligations (Note 10)

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

Gatineau, Canada
September 20, 2023

Statement of Change in Net Debt

For the year ended March 31

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

Statement of Operations and Net Financial Position

For the year ended March 31

Segmented information (Note 9)

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

Statement of Cash Flows

For the year ended March 31

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

Notes to the Financial Statements

For the year ended March 31

1. Authority and objectives

The Office of the Information Commissioner of Canada (the Office) was created under the Access to Information Act, which came into force on July 1, 1983. The Office is listed under Schedule I.1 of the Financial Administration Act and is funded through annual appropriations. The Information Commissioner is an independent Agent of Parliament appointed by the Governor-in-Council following approval of the appointment by resolution of the Senate and the House of Commons. The Commissioner is accountable to Parliament for the results achieved by the Office.

The Office has two major programs :

Government Transparency: The Information Commissioner is the first level of independent review of government decisions relating to requests for access to information under the control of government institutions. The Access to Information Act requires the Commissioner to investigate all the complaints she receives. The second level of independent review is performed by the Federal Court. The Access to Information Act is the legislative authority for the oversight activities of the Information Commissioner which are: to investigate complaints from requestors; to review the performance of government institutions; to report the results of investigations/reviews and recommendations to complainants, government institutions, and Parliament; to pursue judicial enforcement; and to provide advice to Parliament on access to information matters.  The Office supports the Commissioner in carrying out these activities.

Internal Services: Internal Services are a group of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These activities and services are: Management and Oversight Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Communications Services; Real Property Management Services; Materiel Management Services; and Acquisition Management Services. Internal Services include only those activities and resources that apply across an organization and not those provided specifically to a program.

The Access to Information Act is the statutory authority for the activities of the Information Commissioner and the Office, whose mission is to defend and protect the requestor’s right of access to government information. In fulfilling this mission, the Office is guided by the following responsibilities:

• Conduct efficient, fair and confidential investigations into complaints about federal institutions’ handling of access to information requests. The Office strives to maximize compliance with the Act while fostering disclosure of public sector information using the full range of tools, activities and powers at the Commissioner’s disposal;
• Use mediation and persuasion to resolve complaints. In doing so, the Office gives complainants, heads of institutions and all third parties affected by complaints a reasonable opportunity to make representations. The Office encourages institutions to disclose information as a matter of course and to respect Canadians’ rights to request and receive information, in the name of transparency and accountability. The Office brings cases to the Federal Court to ensure that the Act is properly applied and interpreted, with a view to maximizing disclosure of information;
• Support the Information Commissioner in her advisory role to Parliament and parliamentary committees on all matters pertaining to access to information. The Office actively makes the case for greater freedom of information in Canada through targeted initiatives such as Right to Know Week and ongoing dialogue with Canadians, Parliament and federal institutions.

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

The Office is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Office 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 Net 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 section of the Statement of Operations and Net Financial Position are the amounts reported in the Future-Oriented Statement of Operations included in the 2022-2023 Departmental Plan. The planned results amounts in the Government funding section of the Statement of Operations and Net Financial Position and in the Statement of Change in Net Debt were prepared for internal management purposes and have not been previously published.

Liquidity risk is the risk that the Office will encounter difficulty in meeting its obligations associated with financial liabilities. The Office’s objective for managing liquidity risk is to manage operations and cash expenditures within the appropriation authorized by Parliament or allotment limits approved by the Treasury Board. 

Each year, the Office presents information on planned expenditures to Parliament through the tabling of Estimates publications.  These estimates result in the introduction of supply bills (which, once passed into legislation, become appropriation acts) in accordance with the reporting cycle for government expenditures.  The Office exercises expenditure initiation processes such that unencumbered balances of budget allotments and appropriations are monitored and reported on a regular basis to help ensure sufficient authority remains for the entire period and appropriations are not exceeded.

Consistent with Section 32 of the Financial Administration Act, the Office's policy to manage liquidity risk is that no contract or other arrangement providing for a payment shall be entered into with respect to any program for which there is an appropriation by Parliament or an item included in estimates then before the House of Commons to which the payment will be charged unless there is a sufficient unencumbered balance available out of the appropriation or item to discharge any debt that, under the contract or other arrangement, will be incurred during the fiscal year in which the contract or other arrangement is entered into.

The Office’s risk exposure and its objectives, policies and processes to manage and measure this risk did not change significantly from the prior year.  

(b) Net cash provided by Government

The Office operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Office is deposited to the CRF and all cash disbursements made by the Office are paid from the CRF. The net cash provided by the 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 the Office is entitled to draw from the CRF without further appropriations to discharge its liabilities.

(d) Expenses 

Expenses are recorded on the accrual basis:

• Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
• The Office is related, in terms of common ownership, to all government of Canada departments, agencies, and Crown corporations. The Office enters into transactions with these entities in the normal course of business, which are measured at the carrying amount, except for the following:

1. Inter-entity transactions are measured at the exchange amount when undertaken on similar terms and conditions to those adopted if the entities were dealing at arm's length, or where transactions are allocated costs and recoveries; and
2. Goods and services received without charge between commonly controlled entities, when used in the normal course of the operations and would otherwise have been purchased, are recorded as expenses at their estimated fair value.

(e)  Employee future benefits

1. Pension benefits:  Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government of Canada. The Office’s contributions to the Plan are charged to expenses in the year incurred and represent the total pension obligation of the Office to the Plan. The Office'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.
2. Severance benefits:  Employees of the Office entitled to severance benefits under labour contracts or conditions of employment earned these benefits as services necessary to earn them were rendered. The remaining obligation relating to the benefits earned by employees is estimated based on their respective terms of employment.

(f) Accounts receivable and advances

Accounts receivable and advances are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Office is not exposed to significant credit risk. The Office provides services to other government departments and agencies and to external parties in the normal course of business.  Accounts receivable are due on demand.  The majority of accounts receivable are due from other government of Canada departments and agencies where there is minimal potential risk of loss. The maximum exposure the Office has to credit risk equal to the carrying value of its accounts receivables.

(g) Tangible capital assets

Tangible capital assets are recorded at acquisition cost less accumulated amortization. The Office does not capitalize intangibles.

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

Work in progress is comprised of computer software not yet completed. They will be 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.

(h) 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 expected useful life of tangible capital assets and the employee severance 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.  

3. Parliamentary authorities

The Office receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and 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, the Office 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

4. Accounts payable

Accounts payable is measured at cost, the majority of which is due within six months of year-end. 

The following table presents details of the Office's accounts payable balances:

5. Employee future benefits

(a) Pension benefits

The Office'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 the Office 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 2022-2023 expense amounts to $1,208,180 ($1,179,979 in 2021-2022).  For Group 1 members, the expense represents approximately 1.02 times (1.01 times in 2021-2022) the employee contributions and, for Group 2 members, approximately 1.0 times (1.0 times in 2021-2022) the employee contributions.

(b) Severance benefits

The Office provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. 

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.

These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

6. Accounts receivable and advances

The following table presents details of the Office's accounts receivable and advances balances:

7. Tangible capital assets

The Acquisition of tangible capital assets and the increase in accounts payables and accrued liabilities presented in the Statement of Cash Flows excludes an amount of $nil ($27,498 in 2021-2022) in relation to the acquisition of tangible capital assets, as the amount relates to capital investing activities in 2022-2023 that remain to be paid as at March 31, 2023.

The Office has capital assets with an original acquisition cost and accumulated amortization of $145,289 ($nil in 2021-2022) that have been declared surplus. Upon physical disposal, the tangible capital asset will be removed.

8. Related party transactions

The Office is related as a result of common ownership to all government of Canada departments, agencies, and Crown corporations. The Office enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Office received common services which were obtained without charge from other departments as disclosed below.

(a) Common services provided without charge by other departments

During the year the Office received services without charge from certain common service organizations, related to accommodation, employer's contribution to the health and dental insurance plans, audit services and payroll and cheque issuance services. These services provided without charge have been recorded in the Statement of Operations and 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 Services and Procurement Canada are not included in the Office's Statement of Operations and Net Financial Position.

(b) Other transactions with related parties

Expenses disclosed in (b) exclude common services provided without charge, which are already disclosed in (a). It includes an amount of nil in 2022-2023 ($138,915 in 2021-2022) for the acquisition of tangible capital assets.

9. Segmented information

Presentation by segment is based on the Office's program alignment architecture as described in Note 1. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in Note 2.  Direct expenses are charged to the relevant program with the exception of overhead related expenses which are allocated to the program based on a prorata basis based on full time equivalent per program. The following table presents the expenses incurred and the revenues generated for the main programs, by major object of expenditure and by major type of revenue. The segment results for the period are as follows:

10. Contractual obligations

The nature of the Office’s activities may result in some multi-year contracts and obligations whereby the Office will be obligated to make future payments when the services or goods are received. Contractual obligations related to financial, acquisition and real property services, and rental of informatics equipment that can be reasonably estimated are summarized as follows. Contractual obligations with related parties amount to a total of $247,167 in 2024 and $61,792 in the following years.