Financial Statements: 2021-22

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, 2022, and all information contained in these financial statements rests with the management of the Leaders' Debates Commission (the Commission). These financial statements have been prepared by management 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 the Commission's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Commission's 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 the Commission 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.

A risk-based assessment of the system of ICFR for the year ended March 31, 2022 was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.

The financial statements of the Commission have not been audited.

 

Ottawa, Canada
August 31, 2022

Statement of Financial Position (Unaudited)

As at March 31
(in thousands of dollars)	2022	2021
Liabilities
Accounts payable and accrued liabilities (Note 4)	260	194
Vacation pay and compensatory leave	32	7
Employee future benefits (Note 5b)	7	19
Total liabilities	299	220
Assets
Financial assets
Due from Consolidated Revenue Fund	186	194
Accounts receivable and advances (Note 6)	82	5
Total net financial assets	268	199
Departmental net debt	31	21
Departmental net financial position	(31)	(21)
Contractual obligations (Note 7) The accompanying notes form an integral part of these financial statements.

 

Ottawa, Canada
August 31, 2022

Statement of Operations and Departmental Net Financial Position (Unaudited)

For the Year Ended March 31
	Planned Results
(in thousands of dollars)	2022	2022	2021
Expenses
Organize Leaders' Debates for federal general elections	4,857	3,244	367
Total Expenses	4,857	3,244	367
Net cost of operations before government funding and transfers	4,857	3,244	367
Government funding and transfers
Net cash provided by Government of Canada		3,197	722
Change in due from the Consolidated Revenue Fund		(8)	(398)
Services provided without charge by other government departments (Note 8a)		45	11
Net cost of operations after government funding and transfers		10	32
Departmental net financial position - Beginning of year		(21)	11
Departmental net financial position - End of year		(31)	(21)
Segmented information (Note 9) 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 thousands of dollars)	2022	2021
Net cost of operations after government funding and transfers	10	32
Net increase (decrease) in departmental net debt	10	32
Departmental net debt - Beginning of year	21	(11)
Departmental net debt - End of year	31	21
The accompanying notes form an integral part of these financial statements.

Statement of Cash Flow (Unaudited)

For the Year Ended March 31
(in thousands of dollars)	2022	2021
Operating activities
Net cost of operations before government funding and transfers	3,244	367
Non-cash items:
Services provided without charge by other government departments (Note 8a)	(45)	(11)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances	77	(18)
Decrease (increase) in accounts payable and accrued liabilities	(66)	410
Decrease (increase) in vacation pay and compensatory leave	(25)	(7)
Decrease (increase) in future employee benefits	12	(19)
Cash used in operating activities	3,197	722
Net cash provided by Government of Canada	3,197	722
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

The Leaders' Debates Commission (the Commission) was established in 2018 with Orders in Council P.C. 2018-1322, 2018-1394 and 2018-1469. On November 5, 2020, the Government of Canada announced that the Commission, originally tasked with organizing debates for the 2019 election, would remain in place to ensure national debates in Canada during the next general election. Its mandate was amended by Order in Council P.C. 2020-871. The Commission is led by a Debates Commissioner and supported by a seven-member Advisory Board.

Part of the Commission's mandate is to advance the public interest by ensuring that the national debates are as accessible as possible, on a variety of platforms. The Commission's 2019 debates encouraged the use of new media, and reached new audiences, and ensured debates were available in accessible formats. Overall, the Commission aims to makes the debates a more predictable, reliable, and stable element of federal election campaigns.

The Commission's mandate also includes the preparation of a report to Parliament, no later than five months after election day, that outlines findings, lessons learned, and recommendations for the future. The Commission's reports following both the 2019 and 2021 elections are available on its website https://www.debates-debats.ca.

The Commission articulates its plans and priorities based on its core responsibility and programs noted below:

Core Responsibility

Organize leaders' debates for federal elections. The Commission will organize two leaders' debates for the next federal general election – one in each official language. In order to execute its core responsibility, the Commission will apply set criteria to confirm the participation of eligible party leaders in leaders' debates during general election periods, issue a call for proposals for debate production that seeks to ensure that Canadians have access to these broadcasts, and communicate with Canadians to raise awareness of when, where and how debates can be accessed.

To that end, the Commission will be guided by the pursuit of the public interest and by the principles of independence, impartiality, transparency, credibility, democratic citizenship, civic education, inclusion and cost effectiveness. The desired result is an open and transparent organization of leaders' debates that reaches a broad cross-section of Canadians.

Program

Ensuring the leaders' debates are available to all Canadians: The Commission will work with the debates producer to ensure that Canadians know when, where and how to access the leaders' debates. Following the debates, the Commission will conduct an evidence-based assessment of the leaders' debates that it has organized, including with respect to the number of persons to whom the debates were accessible and the number of persons who actually accessed them. The Commission will ensure that the leaders' debates are broadcast free of charge and otherwise made available in an accessible way to persons with disabilities. The Commission will seek to ensure that the debates reach as many Canadians as possible, including those living in remote areas and those living in official language minority communities, through a variety of media and other fora.

Maintaining the highest standards for the leaders' debates: The Commission will conduct any necessary research or rely on any applicable research to ensure that the leaders' debates are of high quality. The Commission will ensure that any reproduction of the leaders' debates is subject to only the terms and conditions that are necessary to preserve the integrity of the debates. The Commission will also provide advice and support in respect of other political debates related to the general election, including candidates' debates, as the Debates Commissioner considers appropriate.

2. Summary of significant accounting policies

These financial statements are prepared using the Commission'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 Commission is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Commission 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" 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 2021-22 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 Change in Departmental Net Debt because these amounts were not included in the 2021-22 Departmental Plan.

(b) Net cash provided by Government of Canada

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

(d) Expenses

• 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 employer contributions to the health and dental insurance plans are recorded as operating expenses at their carrying value.

(e) Employee future benefits

• Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Commission's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The Commission'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.

(f) Accounts receivable

Accounts receivable are initially recorded at cost and when necessary, an allowance for valuation is recorded to reduce the carrying value of accounts receivable to amounts that approximate their net recoverable value.

(g) 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 contingent liabilities and the liability for employee future 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.

(h) 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 the following:

1. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
2. Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.

3. Parliamentary authorities

The Commission 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, the Commission 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 thousands of dollars)	2022	2021
Net cost of operations before government funding and transfers	3,244	367
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments	(45)	(11)
Decrease/(increase) in vacation pay and compensatory leave	(25)	(7)
Decrease/iIncrease) in future employee benefits	12	(19)
Refund of prior years' expenditures	19	1
Total items affecting net cost of operations but not affecting authorities	(39)	(36)
Adjustments for items not affecting net cost of operations but affecting authorities:
Accounts receivable and advances	1	-
Total items not affecting cost of operations but affecting authorities	1	-
Current year authorities used	3,206	331
(b) Authorities provided and used
(in thousands of dollars)	2022	2021
Authorities provided:
Vote 1 - Operating expenditures	5,248	5,374
Statutory amounts	65	15
Less:
Lapsed: Operating	(2,107)	(5,058)
Current year authorities used	3,206	331

4. Accounts payable and accrued liabilities

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

(in thousands of dollars)	2022	2021
Accounts payable - Other government departments and agencies	10	107
Accounts payable - External parties	250	87
Total accounts payable and accrued liabilities	260	194

5. Employee future benefits

(a) Pension benefits

The Commission'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 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits and they are indexed to inflation.

Both the employees and employer 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 2021-22 expense amounts to $59,417 ($13,889 in 2020-21). 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.

The Commission'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 the Commission'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, 2018, 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 thousands of dollars)	2022	2021
Accrued benefit obligation - Beginning of year	19	-
Expense for the year	7	19
Accrued benefit obligation - End of year	7	19

6. Accounts receivable and advances

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

(in thousands of dollars)	2022	2021
Receivables – Other government departments and agencies	77	-
Employee advances	5	5
Net accounts receivable	82	5

7. Contractual obligations

The nature of the Commission's activities may result in some large multi-year contracts and obligations whereby the Commission will be obligated to make future payments in order to carry out its programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in thousands of dollars)	2023	2024	2025	2026	2027	2028 and subsequent	Total
Professional and special services	88	-	-	-	-	-	88
Information	63	-	-	-	-	-	63
Total	151	-	-	-	-	-	151

8. Related party transactions

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

In addition, the Commission has an agreement with Privy Council Office related to the provision of finance and administration services which is included in section b). During the year, the Commission received common services which were obtained without charge from other government departments as disclosed below:

(a) Common services provided without charge by other government departments

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

(in thousands of dollars)	2022	2021
Employer's contribution to the health and dental insurance plans	45	11
Total	45	11

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 Commission's Statement of Operations and Departmental Net Financial Position. The costs of information technology infrastructure services provided by Shared Services Canada, following the transfer of responsibilities in November 2011 are also not included in the Commission's Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with other government departments and agencies

(in thousands of dollars)	2022	2021
Expenses	583	84

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

9. Segmented information

Presentation by segment is based on the Commission's core responsibility. 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 for the Commission's core responsibility, by major object of expense. The segment results for the period are as follows:

(in thousands of dollars)	Organize Leader's Debates for federal general elections	2022	2021
Operating expenses
Salaries and employee benefits	623	623	186
Professional and special services	745	745	174
Transportation and communications	3	3	-
Information	1,834	1,834	-
Rentals	5	5	-
Other	34	34	7
Total operating expenses	3,244	3,244	367
Net cost from continuing operations	3,244	3,244	367

Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting for Fiscal Year 2021-22

1. Introduction

This document provides summary information on measures taken by the Leaders' Debate Commission (LDC or the Commission) to maintain an effective system of internal control over financial reporting (ICFR) including information on internal control management, assessment results and related action plans.

Detailed information on the Commission's authority, mandate, and programs can be found in its Departmental Plan: https://www.debates-debats.ca/en/transparency/departmental-plan-2021-22/

2. Departmental system of internal control over financial reporting

2.1 Internal Control Management

The Commission recognizes the importance of setting the tone from the top to help ensure that staff at all levels understand their roles in maintaining effective financial systems of ICFR and are well equipped to exercise these responsibilities effectively. In accordance with a Memorandum of Understanding, the Commission's financial transactions are processed by the Privy Council Office (PCO) within their financial system and are the most part subject to the same control environment.

The Commission relies on PCO control measures to a large extent, but also recognizes the importance of ensuring that it implements its own complementary measures. An approved PCO internal control management framework is in place and is leveraged by the Commission via the MOU in place, which includes:

• Organizational accountability structures as they relate to internal control management to support sound financial management including roles and responsibilities for senior managers in their areas of responsibility for internal controls management
• Values and ethics framework
• On-going communication and training on statutory requirements, policies, and procedures for sound financial management and control
• Monitoring of, and regular updates on, internal control management, as well as the provision of related assessment results and action plan to departmental senior management and the departmental Audit Committee (DAC)

2.2 Service Arrangements relevant to financial statements

The Commission relies on other organizations for the processing of certain transactions that are recorded in its financial statements, as follows:

Common Arrangements:

• Public Services and Procurement Canada (PSPC) centrally administers the payments of salaries and the procurement of certain goods and services and provides accommodation services
• On behalf of the employer, the Treasury Board Secretariat (TBS) provides the Commission with information used to calculate various accruals and allowances, such as the accrued severance liability; and
• Shared Services Canada (SSC) provides IT infrastructure services to the Commission in the areas of data centre and network services. SSC also provides the service for the acquisition and provision of hardware and software for workplace technology devices to the Commission. The scope and responsibilities are addressed in the interdepartmental arrangement between SSC and LDC.

Specific Arrangements:

The Commission's financial transactions are processed by PCO within the financial system and are for the most part subject to the same control environment. These services are encompassed in a broader Corporate Services arrangement which are the subject of a MOU between the two organizations.

3. Departmental assessment results during fiscal year 2021-22

The Commission has established its business processes and implemented its control environment by leveraging the processes and controls implemented at PCO for hospitality, travel, payroll, financial close and reporting, and other financial management processes. Progress is disclosed in the Annex of PCO's Statement of Management Responsibility.

New or significantly amended key controls – The Commission relies on the system of internal control implemented at PCO for the above noted business processes. New or significantly modified internal controls are disclosed in the Annex of PCO's statement of management responsibility.

On-going monitoring program – the Commission's monitoring program for the above noted business processes leverages PCO's rotational on-going monitoring plan disclosed in the Annex of PCO's statement of management responsibility.

4. Departmental action plan

4.1 Action plan for the next fiscal year and subsequent years

Any action plans for the aforementioned business processes are disclosed in the Annex of PCO's Statement of Management Responsibility.