Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2011, and all information contained in these statements rests with the management of the Financial Consumer Agency of Canada (FCAC). These financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles for publicly accountable Canadian reporting entities.
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 FCAC's financial transactions.
Management is also responsible for maintaining an effective system of internal control over financial reporting, 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 structure that provides appropriate divisions of responsibility; through communications programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout FCAC; and through conducting an annual assessment of the effectiveness of the system of internal control over financial reporting.
An assessment for the year ended March 31, 2011, was completed in accordance with the Treasury Board Secretariat's Policy on Internal Control, and the results and action plan are summarized in the annex.
The system of internal control over financial reporting 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.
The effectiveness and adequacy of FCAC's system of internal control are reviewed, as appropriate, by the risk-based work of internal audit staff—through a memorandum of understanding with the Office of the Superintendent of Financial Institutions—who conduct periodic risk-based audits of different areas of FCAC's operations, and by FCAC's Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends to the Commissioner the approval of the audited financial statements.
The Auditor General of Canada, the independent auditor for the Government of Canada, has audited the financial statements of FCAC and reports on his audit (which does not include an audit opinion on the annual assessment of the effectiveness of the agency's internal control over financial reporting) to the Minister of Finance.
Chief Financial Officer
Financial Consumer Agency of Canada
Financial Consumer Agency of Canada
June 22, 2011
As at March 31
|Cash Entitlement||$ 2,152,537||$ 2,254,865|
|Assessments Receivable, net||5||117,790||7,000|
|TOTAL ASSETS||$ 2,822,963||$ 2,583,364|
|Accounts Payable and Accrued Liabilities||8||$ 1,942,112||$ 1,807,494|
|Employee Future Benefits||11||545,239||462,218|
|Equity of Canada||—||—|
|TOTAL LIABILITIES AND
EQUITY OF CANADA
|$ 2,822,963||$ 2,583,364|
Financial Consumer Agency of Canada
The accompanying notes are an integral part of these Financial Statements.
For the year ended March 31
|Assessments||$ 9,782,568||$ 8,983,943|
|Salaries and Benefits||6,693,542||5,709,943|
|Administrative and Other||569,935||562,952|
|Operating Results before Government Funding and Administrative Monetary Penalties||(1,879,604)||(1,897,487)|
|Operating Results before Administrative Monetary Penalties||—||—|
|Administrative Monetary Penalties||15||175,000||450,000|
|Administrative Monetary Penalties Earned on Behalf of the Government||15||(175,000)||(450,000)|
|Net Operating Results and Comprehensive Income||—||—|
|RETAINED EARNINGS, BEGINNING OF YEAR||—||—|
|RETAINED EARNINGS, END OF YEAR||$—||$—|
The accompanying notes are an integral part of these Financial Statements.
For the year ended March 31
|Cash Receipts from Financial Entities and Other Government Departments||$ 12,295,598||$ 10,975,046|
|Cash Paid to Suppliers and Employees||(11,884,972)||(10,541,214)|
|Non-Respendable Administrative Monetary Penalties Remitted to the Consolidated Revenue Fund||15||(175,000)||(450,000)|
|Cash Provided by (Used for) Operating Activities||189,176||(31,761)|
|Acquisition of Capital Assets||9||(250,790)||(102,633)|
|Acquisition of Intangible Assets||10||(40,714)||—|
|Cash Used for Investing Activities||(291,504)||(102,633)|
|Cash Provided by Financing Activities||—||—|
|NET DECREASE IN CASH ENTITLEMENT||(102,328)||(134,394)|
|CASH ENTITLEMENT, BEGINNING OF YEAR||2,254,865||2,389,259|
|CASH ENTITLEMENT, END OF YEAR||$ 2,152,537||$ 2,254,865|
The accompanying notes are an integral part of these Financial Statements.
For the year ended March 31, 2011
On October 24, 2001, the Financial Consumer Agency of Canada Act (the Act) came into force, establishing the Financial Consumer Agency of Canada (FCAC, or the Agency). The Financial Consumer Agency of Canada is responsible for strengthening the oversight of consumer protection measures in the federally regulated financial sector and for expanding consumer education activities. The Agency is a department of the Government of Canada and is listed in Schedule I.1 of the Financial Administration Act.
FCAC's mandate is specifically set out in the Financial Consumer Agency of Canada Act. It must:
Section 18(3) of the Act provides that the Agency's costs of operations are to be assessed to the industry. Pursuant to section 13(2) of the Act, FCAC's operations are typically funded entirely through this process. FCAC is, however, entitled to receive a parliamentary appropriation as authorized under section 13(3) of the Act.
FCAC's assessment revenues are charged in accordance with the Financial Consumer Agency of Canada Assessment of Financial Institutions Regulations and the financial assessment methodology of payment card network operators, which outline the methodologies used to determine each institution's assessment.
The Agency manages its working capital requirements by borrowing funds from the Government of Canada as authorized under section 13(1) of the Act.
International Financial Reporting Standards (IFRS)
On February 13, 2008, the Accounting Standards Board (AcSB) confirmed that the use of International Financial Reporting Standards (IFRS) will be required in 2011 for all publicly accountable Canadian reporting entities. IFRS will replace Canada's current generally accepted accounting principles for these entities that are responsible to large or diverse groups of stakeholders. FCAC will adopt IFRS commencing on April 1, 2011, with comparatives for the year commencing April 1, 2010. In 2008–2009 FCAC completed its initial assessment of the impact to its financial statements of adopting IFRS, and in 2009–2010 completed the "Solutions Development" phase of the project, which included a detailed study of all applicable standards identified in the initial assessment, the identification of all options available to FCAC, and recommendations for changes to policies, procedures, systems and business processes. In 2010–2011, FCAC implemented and tested the solutions that were developed, including a number of new policies, and will be entering into the post-implementation review stage in 2011–2012.
The most significant accounting change will result in the realization into income, on an annual basis, of all actuarial gains and losses arising from changes in interest rate and/or actuarial assumptions, if any, and the recognition of a liability for sick days that may be carried forward to future periods.
a. Basis of presentation
These financial statements have been prepared in accordance with Canadian generally accepted accounting principles for publicly accountable Canadian reporting entities.
b. Cash entitlement
FCAC does not have its own bank account. All of the financial transactions of the Agency are processed through the Consolidated Revenue Fund (CRF), a banking facility administered by the Receiver General for Canada. FCAC's cash entitlement represents the amount the Agency is entitled to withdraw from the CRF without further authority. This amount does not earn interest.
c. Financial instruments
The classification of financial instruments is determined by FCAC at initial recognition and depends on the purpose for which the financial assets were acquired or liabilities were incurred. All financial instruments are recognized initially at fair value.
The fair value of financial instruments on initial recognition is based on the transaction price, which represents the fair value of the consideration given or received. Subsequent to initial recognition, financial instruments are measured based on the accounting treatment corresponding to their classification.
|Held for Trading (HFT)||Cash Entitlement is classified as "Held for Trading."
Cash Entitlement is measured at fair value.
|Loans and Receivables||Assessments Receivable and Other Receivables are classified as "Loans and Receivables."
Loans and Receivables are non-derivative financial assets with fixed or determinable payments that are not debt securities.
Subsequent to initial recognition, Loans and Receivables are measured at amortized cost using the effective interest method. Any gain, loss or interest income is recorded in revenues or expenses depending on the nature of the loan and receivable that gave rise to the gain, loss or income.
|Other Financial Liabilities||Accounts Payable and Accrued Liabilities, and Unearned Assessments are classified as "Other Financial Liabilities."
Other Financial Liabilities are non-derivative financial liabilities that have not been designated at fair value.
Subsequent to initial recognition, Other Financial Liabilities are measured at amortized cost using the effective interest method. Any gain, loss or interest expense is recorded in revenues or expenses depending on the nature of the financial liability that gave rise to the gain, loss or expense.
FCAC assesses at each Balance Sheet date whether there is objective evidence that a financial asset is impaired. For the classification of Loans and Receivables, any writedown or impairment is recognized in the period incurred and collected in the following year through assessments.
d. Capital assets
All capital assets are initially recorded at acquisition cost. Amortization of capital assets is calculated on a straight-line basis over the estimated useful life of the asset, as follows:
|Furniture and Fixtures||7 years|
|Leasehold Improvements||lesser of useful life or remaining term of the lease|
|Informatics Software||5 years|
|Office Equipment||4 years|
|Informatics Hardware||3 years|
e. Intangible assets
Intangible assets consist of externally purchased software that is not an integral part of the related hardware. Intangible assets acquired independently are measured on initial recognition at historical cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets are amortized over their useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. An asset is considered impaired when its carrying value exceeds its recoverable value or it is no longer in use. The amortization expense on intangible assets is recognized in the Statement of Operations, Comprehensive Income and Retained Earnings, in the expense category consistent with the function of the intangible asset.
Amortization is calculated using the straight-line method over the asset's estimated useful life of five years. FCAC reassesses annually the estimated useful life and amortization method of this asset category.
Gains or losses arising from disposal of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset at the time of disposal, and are recognized in the Statement of Operations, Comprehensive Income and Retained Earnings, when the asset is disposed of or otherwise written off.
FCAC's borrowing authority does not allow it to enter into lease agreements that are classified as capital leases. FCAC has established procedures to review all lease agreements and identify if the proposed terms and conditions would result in a transfer to FCAC of substantially all the benefits and risks incidental to ownership.
FCAC records the costs associated with operating leases in the Statement of Operations, Comprehensive Income and Retained Earnings, in the period in which they are incurred.
g. Employee future benefits
i. Pension benefits
FCAC's eligible employees participate in the Public Service Pension Plan 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, multiplied by the average of the best five consecutive years of earnings. The benefits are integrated with the Canada/Quebec Pension Plan benefits and they are indexed to inflation. Supplementary retirement benefits may also be provided in accordance with the Special Retirement Arrangements Act.
Both the employees and FCAC contribute to the cost of the Plan. FCAC's responsibility with regard to the Plan is limited to its contributions, which are recorded in the Statement of Operations, Comprehensive Income and Retained Earnings. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor. Current legislation does not require FCAC to make contributions for any actuarial deficiencies of the Plan.
ii. Severance benefits
On termination of employment, employees are entitled to certain benefits provided for under their conditions of employment through a severance benefits plan. The cost of these benefits is accrued as the employees render their services necessary to earn severance benefits. These benefits represent the only obligation of FCAC that entails settlement by future payment.
The cost of severance benefits is actuarially determined as at March 31 of each year, using the projected benefit method prorated on services. The valuation of the liability is based upon a current market discount rate and other actuarial assumptions, which represent management's best long-term estimates of factors such as future wage increases and employee resignation rates. The excess of any net actuarial gain (loss) over 10% of the accrued benefit obligation is amortized over the average remaining service period of active employees.
iii. Other future benefits
The federal government sponsors a variety of other future benefit plans from which employees and former employees may benefit during employment or upon retirement. The Public Service Health Care Plan and the Pensioners' Dental Service Plan are the two major plans available to FCAC employees and retirees. FCAC's responsibility with regard to these two plans is limited to its contributions, which are recorded as expenses in the Statement of Operations, Comprehensive Income and Retained Earnings.
h. Revenue recognition
The Agency is dependent on its revenue from the assessment of financial entities (banks, trust and loan companies, life insurance companies, property and casualty companies, retail associations, and payment card network operators) to fund most of its costs of operations, including those related to employee future benefits. FCAC recognizes sufficient revenue so as to recover its expenses. Any assessments that have been billed and for which costs have not been incurred are classified as Unearned Assessments on the balance sheet.
Assessments are billed annually based on an estimate of the current fiscal year's costs of operations together with an adjustment for any differences between the previous year's assessed costs and actual. The assessment process is undertaken before December 31 in each year, in accordance with section 18(1) of the Act. As a result, at March 31 of each year, amounts may have been collected in advance of the incurrence of costs or, alternatively, funds may be owed to the Agency to fund its costs of operations.
Administrative monetary penalties may be issued by the Commissioner of the FCAC through Notices of Violations. These penalties are imposed in cases where the Commissioner believes that there has been either a violation of the consumer provisions or non-compliance with any Compliance Agreement entered into pursuant to an act listed in Schedule 1 of the Financial Consumer Agency of Canada Act. The penalty amount may be as high as $50,000 for an individual and $200,000 for an institution. Penalties levied by FCAC are non-respendable and are to be remitted to the Consolidated Revenue Fund. The funds are not available to FCAC and are not included in the balance of the Cash Entitlement. As a result, the penalties do not reduce the amount that FCAC assesses the industry in respect of its operating costs.
The preparation of financial statements requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these financial statements, management believes the estimates and assumptions to be reasonable. Liabilities related to human resources, employee future benefits and the useful life of capital assets are the most significant items for which estimates are used. Actual results could differ significantly from those estimates.
The breakdown of all amounts owing to FCAC as at March 31, 2011 is as follows:
|Federally Regulated Financial Entities||Other||Total
|Trade Accounts Receivable||$ 123,790||$ —
||$ 123,790||$ 16,055|
|Allowance for Doubtful Accounts||(6,000)||(6,000)||(9,055)|
|Assessments Receivable, net||117,790||117,790||7,000|
|Due from related parties||—||18,200||18,200||13,052|
|Total||$ 117,790||$ 89,327||$ 207,117||$ 42,832|
|% of Total exposure||57%||43%||100%||100%|
All assessments receivable and accrued assessments are recoverable from federally regulated financial entities. FCAC regulates over 375 financial entities and does not have a significant receivable from any individual financial entity.
There are no Accrued Assessments that have not been billed at March 31, 2011.
As at March 31, the aging of trade accounts receivable was as follows:
|2011||$ —||$ 97,787||$ 20,003||$ —||$ 6,000||$ 123,790|
|2011||$—||$ —||$ —||$ 7,875||$ 8,180||$ 16,055|
FCAC records an allowance for doubtful accounts considering the age of an outstanding receivable and the likelihood of its collection. Provisions are also made where collection of the receivable is doubtful based on information gathered through collection efforts. An allowance is reversed once collection of the debt is successful or the amount is written off.
An account receivable will be considered to be impaired and will be written off when FCAC is certain that collection will not occur and all applicable requirements of the Debt Write-Off Regulations, 1994 have been met. During the year, no interest was earned on impaired assets and none of the past due amounts has been renegotiated. Those that are neither past due nor impaired are considered to be fully collectible.
At March 31, 2011, accounts receivable at initial value of $6,000 (2010: $9,055) were impaired and fully provided for. The following table provides a reconciliation of the movement in this allowance during the year:
|Allowance for Doubtful Accounts, beginning of year||$ 9,055||$ 9,001|
|Amounts written off||—||(1)|
|Unused amounts reversed||(4,055)||(3,000)|
|Allowance for Doubtful Accounts, end of year||$ 6,000||$ 9,055|
FCAC is related, in terms of common ownership, to all Government of Canada departments, agencies and Crown corporations. The Agency enters into transactions with these entities in the normal course of business and on normal trade terms. These transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
FCAC recorded expenses of $3,347,842 (2010: $2,912,223) and revenue of $296,450 (2010: $262,481) from transactions with other government departments during the period. Individually these transactions were in the normal course of business. Although most transactions are not individually significant, FCAC did have the following individually significant transactions:
|Treasury Board||Pension contributions and other employee benefits||1,294,051||138,421|
|PWGSC||Accommodation, translation services and other services||757,595||18,848|
|OSFI||Finance, human resources, audit and library services||556,197||88,811|
|Department of Justice||Legal services||187,941||0|
For the period ended March 31, 2011, the amounts of accounts receivable and accounts payable and accrued liabilities from all related parties are $18,200 (2010: $8,457) and $320,795 (2010: $351,053), respectively.
During the year, FCAC received audit services without charge from the Office of the Auditor General of Canada. This non-monetary transaction has been recorded as both an expense and government assistance revenue in the amount of $80,000 (2010: $55,000).
Due to their short-term nature, the carrying values of FCAC's financial instruments are presumed to approximate their fair values.
FCAC's financial liabilities include Accounts Payable and Accrued Liabilities, and Unearned Assessments. The main purpose of these liabilities is to provide short-term financing for FCAC's operations. Financial assets include Assessments Receivable and Other Receivables.
FCAC is exposed to market risk, credit risk and liquidity risk in connection with financial instruments.
a. Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity risk. FCAC is exposed to currency risk on any amounts payable that are to be settled in a currency other than the Canadian dollar, and is exposed to interest rate risk as discussed below. FCAC is not exposed to other price risk.
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. FCAC's exposure to the risk of changes in foreign exchange rates relates primarily to the Agency's operating activities (when revenues or expenses are denominated in a currency other than the Canadian dollar).
FCAC manages its exposure to currency risk by structuring its contracts in Canadian dollars wherever possible. The majority of FCAC's transactions are denominated in Canadian dollars; consequently, FCAC's exposure to currency risk is insignificant.
There is no impact to revenue since all billings are done in Canadian dollars.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. FCAC's exposure to the risk of market interest rates relates primarily to FCAC's loans payable with floating interest rate as determined by the Department of Finance Canada. As all amounts borrowed are required to be repaid by March 31 of any fiscal year, FCAC is not exposed to interest rate risk at the year-end date. FCAC attempts to reduce the borrowings necessary by effectively forecasting its required cash flows from assessments from financial entities. FCAC is not authorized to enter into any arrangements in order to reduce its exposure to interest rate risk.
The table below demonstrates the sensitivity of FCAC's operating expenses to a one-percentage-point fluctuation in market interest rates, with all other variables held constant.
|Fluctuation in Interest Rate||Effect on Expenses|
b. Credit risk
Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument, resulting in a financial loss for FCAC. The maximum exposure FCAC has to credit risk as at March 31, 2011, is $213,117 (2010: $51,831), which is equal to the carrying value of its Assessments Receivable and Other Receivables.
All federally regulated financial entities are required to register with FCAC and pay the assessments as established by FCAC. Any loss incurred by FCAC as a result of a counterparty's not meeting its obligations is recorded in the year incurred and collected in the following year, as outlined in the Financial Consumer Agency of Canada Act. All remaining receivables are with other government organizations, where there is minimal potential risk of loss. FCAC does not hold collateral as security.
c. Liquidity risk
Liquidity risk is the risk that FCAC will encounter difficulty in meeting obligations associated with financial liabilities. FCAC's objective is to maintain sufficient Cash Entitlement through collection of assessments and fees in order to meet its operating requirements. FCAC manages liquidity risk through a detailed annual planning and billing process, which is structured to allow for sufficient liquidity from one billing period to the next. FCAC's objective is to accurately estimate its operating costs for the year in order to accurately estimate the assessments and fees to be collected from federally regulated financial entities.
FCAC's policy is to satisfy liabilities by the following means (in decreasing order of priority):
The table below summarizes the maturity profile of FCAC's financial liabilities at March 31, 2011, based on contractual undiscounted payments. When the counterparty has a choice of when the amount is paid, the liability is allocated to the earliest period in which FCAC can be required to pay. When amounts are due in instalments, each instalment is allocated to the earliest period in which FCAC can be required to pay.
|On demand|| Less than
|3 to 12
|1 to 5
|Total 2011||Total 2010|
|Accounts Payable and Accrued Liabilities||$ 293,493||$ 1,366,881||$ 281,740||$ —||$ —||$ 1,942,114||$ 1,807,494|
|Total||$ 293,493||$ 1,366,881||$ 617,352||$ —||$ —||$ 2,277,726||$ 2,121,146|
By December 31 of each year, the Commissioner must determine the total expenses incurred by the Agency during the preceding fiscal year for, or in connection with, the administration of the Financial Consumer Agency of Canada Act and the consumer provisions. The Commissioner then assesses each federally regulated financial entity a portion of these expenses, as determined by regulation. Interim assessments are also possible. To temporarily fund expenses until entities are assessed, before March 31 of each year the Agency must seek Ministerial authority to borrow from the Consolidated Revenue Fund for the next fiscal year, up to a predetermined limit. The authority to borrow from the Consolidated Revenue Fund is granted under section 13 of the Financial Consumer Agency of Canada Act. For the year ended March 31, 2011, the Minister has approved up to $8,000,000 (2010: $8,000,000). All amounts borrowed during any fiscal year must be repaid at the end of the fiscal year. The Agency pays interest on the funds borrowed as described under "Interest Rate Risk."
Refer to Note 1 for further information on FCAC's authority.
The liquidity of FCAC's financial assets is outlined in Note 5, "Accounts receivable."
|Cost||Accumulated Amortization||Net Book Value|
|Categories||Opening balance||Additions||Disposals/ Transfers||Closing balance||Opening balance||Amortization Expense||Disposals/ Transfers||Closing balance||2011||2010|
|Furniture and Fixtures||$ 619,663||$||$ (4,443)||$ 615,220||$ 512,230||$ 31,909||$ (4,443)||$ 539,696||$ 75,524||$ 107,433|
|Total||$ 1,481,115||$ 250,790||$ (91,676)||$ 1,640,229||$ 1,246,755||$ 109,593||$ (76,653)||$ 1,279,695||$ 360,534||$ 234,360|
|Cost||Accumulated Amortization||Net Book Value|
|Category||Opening balance||Additions||Disposals/ Transfers||Closing balance||Opening balance||Amortization Expense||Disposals/ Transfers||Closing balance||2011||2010|
|Informatics Software||$ 102,819||$ 40,714||$ (44,432)||$ 99,101||$ 89,661||$ 11,665||$ (59,456)||$ 41,870||$ 57,231||$ 13,158|
a. Pension benefits
FCAC and all eligible employees contribute to the Public Service Pension Plan. This pension plan provides benefits based on years of service and average earnings at retirement. The benefits are fully indexed to the increase in the Consumer Price Index. The estimated employer contributions to the Public Service Pension Plan during the year were $600,644 (2010: $552,939).
As required under present legislation, the contributions made by FCAC to the Plan are 1.86 times (2010: 1.94 times) the employees' contribution on amounts of salaries of $142,800 or less (2010: $139,500 or less) and 9.5 times (2010: 8.9 times) the employees' contribution on amounts of salaries in excess of $142,800 (2010: $139,500).
b. Severance benefits
Information about FCAC's severance benefit plan is presented in the table below.
1. The cost corresponding to annual changes in the accrued benefit liability is recovered from FCAC's revenue from assessments outlined in Note 3(h) to the financial statements. Amounts collected in excess of benefits paid are presented on the Balance Sheet under the heading of Cash Entitlement.
2.The amortization period is the remaining average service period of active employees.
|Accrued Benefit Obligation, beginning of year||$ 438,540||$ 425,329|
|Current service cost||57,325||62,616|
Accrued Benefit Obligation, end of year
|Unamortized Net Actuarial Gain||79,364||23,678|
|Accrued Benefit Liability||$ 545,239||$ 462,218|
|Net Benefit Plan Expense|
|Current service cost||$ 57,325||$ 62,616|
Amortization of net actuarial losses
|Net Benefit Plan Expense||$ 83,021||$ 80,973|
The significant actuarial assumption adopted in measuring FCAC's accrued benefit obligation is a discount rate of 4.85% (2010: 5.5%). For measurement purposes, management's best estimate for the general salary increases used to estimate the current service cost and the accrued benefit obligation as at March 31, 2011, is an annual economic increase of 1.5% for the plan years 2012 and 2013 and a rate of 2.5% for 2014 (2010: 1.5% for the plan years 2011 to 2012 inclusively). Thereafter, an annual economic increase of 1.5% (2010: 2.0%) is assumed. The average remaining service period of active employees covered by the benefit plan is 14 years (2010: 14 years).
Contractual obligations arising from service agreements entered into with various departments and one Crown corporation for the supply of key services to the Agency, as well as future minimum lease payments for the remaining term of the Agency's lease for office space, are outlined below.
|Year ending March 31||Service
|2012||$ 676,604||$ 486,828||$ 1,163,432|
|Total||$ 2,724,276||$ 1,624,496||$ 4,348,772|
Effective 2007–2008, FCAC is entitled to receive a parliamentary appropriation as authorized under section 13(3) of the Act. The funding is to support efforts to improve financial literacy in Canada. During the year ended March 31, 2011, FCAC received an appropriation of $1,799,604 (2010: $1,842,487).
FCAC has also recorded non-monetary government assistance for audit services provided by the Office of the Auditor General of Canada in the amount of $80,000 (2010: $55,000).
FCAC operates on a cost recovery basis. Its objective when managing capital is to closely manage actual costs to those estimated and communicated to its paying stakeholders. FCAC is prohibited from issuing its own capital or its own debt to meet any capital requirements. Any operating shortfall or excess is factored into the assessments charged to regulated entities in the following year. FCAC fully recovered all of its costs incurred in the reporting year.
FCAC is not subject to any externally imposed capital requirement. FCAC did not change its capital management objectives, policies or processes during the year ended March 31, 2011.
Administrative monetary penalties levied by FCAC are non-respendable and are to be remitted to the Consolidated Revenue Fund. The funds are not available to FCAC and are not included in the balance of the Cash Entitlement. As a result, the penalties do not reduce the amount that FCAC assesses the industry in respect of its operating costs.
FCAC levied $175,000 (2010: $450,000) in administrative monetary penalties during the fiscal year ended March 31, 2011.