Real Property Services

Public Accounts of Canada 2023 Volume III—Top of the page Navigation

Statement of management responsibility

We have prepared the accompanying financial statements of the Real Property Services Revolving Fund as required by the Treasury Board Directive on Charging and Special Financial Authorities in accordance with the Receiver General reporting requirements. These financial statements were prepared by the management of the Fund in accordance with the significant accounting policies set out in note 2 of the financial statements, on a basis consistent with that of the preceding year.

Responsibility for the integrity and objectivity of these financial statements rests with the management of the Fund. The information included in these financial statements is based on management's best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts which provides a centralized record of the Fund's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Department's Departmental Results Report is consistent with these financial statements.

Management develops and disseminates financial management and accounting policies and issues specific directives which maintain standards of accounting and financial management. Management maintains systems of financial management and internal control which give due consideration to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized, are executed in accordance with prescribed regulations, and are properly recorded to maintain accountability of Government funds and safeguard the assets under the Fund's administration. Financial management and internal control systems are augmented by the maintenance of internal audit programs. Management also seeks to ensure the objectivity and integrity of data in its financial statements by the careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that its regulations, policies, standards and managerial authorities are understood throughout the organization.

Management has presented the financial statements to the independent external auditor, who audited them and has provided an independent opinion, which has been appended to these financial statements.

Approved by:

Wojo Zielonka, CPA
Assistant Deputy Minister and Chief Financial Officer
Public Services and Procurement Canada

Jean-Francois Lymburner
Acting Assistant Deputy Minister,
Real Property Services Branch
Public Services and Procurement Canada

June 15, 2023
Gatineau, Canada

Table 1:**Statement of authority provided (used) (unaudited) for the year ended March 31, 2023**
(in thousands of dollars)
	Estimates^{Link to table note 1}	Actual	Estimates^{Link to table note 1}	Actual
	2023		2022
Net results	1,628	9,013	(negative 4,300)	21,062
Operating source (use) of funds	1,628	9,013	(negative 4,300)	21,062
Items requiring use of funds
Transfer of salary overpayments between government departments	–	(negative 4)	–	(negative 134)
Net other assets and liabilities	214	6,212	137	5,888
Authority provided (used)	1,842	15,221	(negative 4,163)	26,816
Table 1 notes General notes: The dash means that the amount is 0 or is rounded to 0. Table note 1 The amounts in the current and previous year "Estimates" columns result from, when available, the current year's Estimates, Part II—Main Estimates. Return to table note 1 referrer

Table 2:**Reconciliation of unused authority (unaudited) as at March 31, 2023**
(in thousands of dollars)
	2023	2022
Debit balance in the accumulated net charge against the Fund's authority	209,811	172,334
Payables charged against the appropriation at year-end	(negative 325,631)	(negative 305,335)
Receivables credited to the appropriation at year-end	201,896	213,428
Other items	30,833	21,261
Net authority provided (used), end of year	116,909	101,688
Authority limit (note 1)	150,000	150,000
Unused authority carried forward	266,909	251,688

Independent auditor's report

To the Deputy Minister, Public Services and Procurement Canada

Opinion

We have audited the financial statements of the Real Property Services Revolving Fund (the Fund), which comprise the statement of financial position as at March 31, 2023, and the statement of operations and net liabilities 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 are prepared, in all material respects, in accordance with the financial reporting provisions of Section 1 of the Receiver General for Canada Instructions for Volume III of the Public Accounts of Canada.

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 Fund 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 audit opinion.

Emphasis of matter—basis of accounting and restriction on distribution and use

We draw attention to note 2 to the financial statements, which describes the basis of accounting. The financial statements are prepared to assist the Fund in complying with the financial reporting provisions of Section 1 of the Receiver General for Canada Instructions for Volume III of the Public Accounts of Canada. As a result, the financial statements may not be suitable for another purpose. Our report is intended solely for the Fund, the management of Public Services and Procurement Canada, the Treasury Board of Canada and the Receiver General for Canada and should not be used by parties other than the Fund, the management of Public Services and Procurement Canada, the Treasury Board of Canada and the Receiver General for Canada. Our opinion is not modified in respect of this matter.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation of these financial statements in accordance with the financial reporting provisions of Section 1 of the Receiver General for Canada Instructions for Volume III of the Public Accounts of Canada, 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 Fund'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 Fund or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Fund'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 Fund'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 Fund'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 Fund to cease to continue as a going concern.

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.

Ernst & Young LLP
Chartered Professional Accountants,
Licensed Public Accountants

June 15, 2023
Ottawa, Canada

Table 3:**Statement of financial position as at March 31, 2023**
(in thousands of dollars)
Assets
	2023	2022
Financial assets
Cash in transit	15	–
Accounts receivable (note 3)	214,086	224,267
Other assets (note 4)	36,493	30,212
Total financial assets	250,594	254,479
Non-financial assets
Prepaid expenses	17	28
Total assets	250,611	254,507
Liabilities
Accounts payable and accrued liabilities (note 5)	338,571	309,568
Vacation pay and compensatory leave	24,059	26,940
Contractors' security deposits	179	566
Employee severance benefits (note 6)	8,863	10,026
Total liabilities	371,672	347,100
Net liabilities (note 7)	(negative 121,061)	(negative 92,593)
Total	250,611	254,507
Table 3 notes General notes: Contractual obligations (note 8) Contingent liabilities (note 9) The accompanying notes form an integral part of these financial statements. The dash means that the amount is 0 or is rounded to 0.

Table 4:**Statement of operations and net liabilities for the year ended March 31, 2023**
(in thousands of dollars)
Revenues
	2023	2022
Real Property services—other government departments	1,861,176	1,650,456
Real Property services—Public Services and Procurement Canada portfolio	336,617	332,418
Other revenues	2,570	2,734
Total revenues	2,200,363	1,985,608
Cost of sales	(negative 1,641,562)	(negative 1,443,318)
Gross profit	558,801	542,290
Operating expenses
Salaries and employee benefits	405,378	393,469
Corporate and administrative services	88,634	79,131
Professional and special services	23,502	20,912
Occupancy costs	22,922	21,717
Transportation and telecommunications	5,187	869
Utilities, materials and supplies	2,933	3,038
Other expenses	1,871	2,443
Employee severance benefits (note 6)	(negative 639)	(negative 351)
Total operating expenses	549,788	521,228
Net results	9,013	21,062
Net liabilities, beginning of year	(negative 92,593)	(negative 84,824)
Transfer of salary overpayments between government departments	(negative 4)	(negative 134)
Net financial resources used (provided) and change in the accumulated net charge against the Fund's authority, during the year (note 7)	(negative 37,477)	(negative 28,697)
Net liabilities, end of year (note 7)	(negative 121,061)	(negative 92,593)
Table 4 notes General notes: The accompanying notes form an integral part of these financial statements.

Table 5:**Statement of cash flows for the year ended March 31, 2023**
(in thousands of dollars)
Operating activities
	2023	2022
Net results	9,013	21,062
Variations in statement of financial position
Decrease (increase) in cash in transit	(negative 15)	6
Decrease (increase) in accounts receivable	10,181	18,627
Decrease (increase) in other assets	(negative 6,281)	(negative 3,649)
Decrease (increase) in prepaid expenses	11	4
Increase (decrease) in accounts payable and accrued liabilities	29,003	(negative 7,157)
Increase (decrease) in vacation pay and compensatory leave	(negative 2,881)	1,254
Increase (decrease) in contractors' security deposits	(negative 387)	230
Increase (decrease) in employee severance benefits	(negative 1,163)	(negative 1,546)
Net financial resources provided by (used in) operating activities	28,468	7,769
Transfer of salary overpayments between government departments	(negative 4)	(negative 134)
Net financial resources provided (used) and change in the accumulated net charge against the Fund's authority, during the year (note 7)	37,477	28,697
Accumulated net charge against the Fund's authority, beginning of year	172,334	143,637
Accumulated net charge against the Fund's authority, end of year	209,811	172,334
Table 5 notes General notes: The accompanying notes form an integral part of these financial statements.

Notes to the financial statements for the year ended March 31, 2023

1. Authority and purpose

The Real Property Services Revolving Fund (the Fund) is the funding mechanism for the Real Property Services program. This program provides three types of real property services: project delivery services, property and facility management services, and advisory services. These services are provided to the real property portfolio of Public Services and Procurement Canada and to other government departments. Pursuant to the Revolving Funds Act, the program may spend any revenue received in respect of these services and, subject to Treasury Board approval, the aggregate of expenditures shall not at any time exceed the revenues received by more than $150,000,000.

The Fund received authorization from the Treasury Board to access its unused authority for a total amount of up to $10,000,000 to temporarily fund transitory cash elements at year end.

2. Significant accounting policies

These financial statements have been prepared in accordance with the significant accounting policies set out below to comply with the reporting requirements for revolving funds described in Section 1 of the Receiver General for Canada instructions for Volume III of the Public Accounts of Canada. The basis of accounting used in these financial statements differs from Canadian public sector accounting standards mainly because:

no liability is recorded for sick leave
the net debt indicator and statement of changes in net debt are not presented in the financial statements
budgeted expenses are not disclosed in the Statement of operations and net liabilities
employee severance benefits liability is based on actuarial valuations for the Government as a whole provided by the Treasury Board of Canada secretariat to management
contractual rights, contingent assets, financial instruments and inter-entity transactions and related parties disclosures are not presented in the financial statements

The significant accounting policies are as follows:

(a) Revenue recognition

Revenues are recognized when professional and technical services are rendered. The recovery of disbursements made on behalf of other government departments, agencies, and outside parties are recognized when costs are incurred by the Fund and collection is reasonably certain.

(b) Accounts receivable

Accounts receivable are stated at amounts expected to be ultimately realized. An allowance is made for accounts receivable where recovery is considered uncertain.

(c) Expense recognition

All expenses are recorded on an accrual basis in the year they are incurred.

Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective conditions of employment.

(d) Employee future benefits

Pension benefits

Eligible employees of the Fund participate in the Public Service Pension Plan (the Plan), a multiemployer pension plan administered by the Government of Canada. The Fund's contributions to the Plan are charged to expenses in the year in which they are incurred and represent the total Fund obligation to the Plan. The Fund's responsibility with regard to the Plan is limited to the contributions paid. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

Severance benefits

Eligible employees of the Fund were entitled to severance benefits under labour contracts or conditions of employment. These benefits were earned as the services necessary to earn them were rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

(e) Sick leave

Employees are permitted to accumulate unused sick leave. However, such leave entitlements may only be used in the event of an illness. As per current government practice, unused sick leave upon employee termination is not payable to the employee. Accordingly, no liability has been accrued in these financial statements. Payments of sick leave benefits are included in current operations as incurred.

(f) Contingent liabilities

Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. However, if the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(g) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue 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. The most significant items where estimates are used are the allowance for doubtful accounts on receivables from outside parties, the amount of certain liabilities, the liability for vacation pay and compensatory leave, and the liability for employee severance benefits. Actual results could significantly differ from those estimates. 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. Accounts receivable

Table 6:**Accounts receivable**
(in thousands of dollars)
	2023	2022
Other government departments and agencies	201,896	213,428
Outside parties	14,209	12,920
Total	216,105	226,348
Less: allowance for doubtful accounts on receivables from outside parties	(negative 2,019)	(negative 2,081)
Net accounts receivable	214,086	224,267

4. Other assets

Table 7:**Other assets**
(in thousands of dollars)
	2023	2022
Sales tax refundable advances	35,598	29,345
Other advances	895	867
Total other assets	36,493	30,212

5. Accounts payable and accrued liabilities

Table 8:**Accounts payable and accrued liabilities**
(in thousands of dollars)
	2023	2022
Outside parties	314,178	294,194
Other government departments and agencies	11,453	11,141
Total	325,631	305,335
Accrued liabilities	12,940	4,233
Total accounts payable and accrued liabilities	338,571	309,568

6. Employee severance benefits

The Fund provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid by future authorities.

Commencing in 2012, as part of collective agreement negotiations and changes to conditions of employment, the accumulation of severance benefits under the employee severance pay program ceased. The employees were given the option to be immediately paid the full or partial value of benefits earned to date or to 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 benefits obligation.

Information about the severance benefits, measured as at March 31, is as follows:

Table 9:**Employee severance benefits**
(in thousands of dollars)
	2023	2022
Employee severance benefits obligation, beginning of year	10,026	11,572
Expense for the year	(negative 639)	(negative 351)
Benefits paid during the year	(negative 524)	(negative 1,195)
Employee severance benefits obligation, end of year	8,863	10,026

7. Net liabilities

The accumulated surplus is the accumulation of each fiscal year's surplus net of deficits since the inception of the Fund.

The accumulated net charge against the Fund's authority represents the cumulative receipts and disbursements over the life of the Fund.

Table 10:**Net liabilities**
(in thousands of dollars)
	2023	2022
Accumulated surplus, beginning of year	79,741	58,813
Net results	9,013	21,062
Transfer of salary overpayments between government departments	(negative 4)	(negative 134)
Accumulated surplus, end of year	88,750	79,741
Accumulated net charge against the Fund's authority, beginning of year	(negative 172,334)	(negative 143,637)
Net financial resources used (provided) and change in the accumulated net charge against the Fund's authority, during the year	(negative 37,477)	(negative 28,697)
Accumulated net charge against the Fund's authority, end of year	(negative 209,811)	(negative 172,334)
Net liabilities, end of year	(negative 121,061)	(negative 92,593)

8. Contractual obligations

The nature of the Fund's activities can result in some large multi-year contracts and obligations whereby the Fund will be obligated to make future payments when the goods and services are received. Estimated future payments of significant contractual obligations are as follows:

(in thousands of dollars)

Year ending March 31
2024	856,178
2025	137,343
2026	43,969
2027	11,846
2028 and thereafter	54,137
Total contractual obligations	1,103,473

9. Contingent liabilities

In connection with its operations, the Fund is a defendant in certain litigation. It is estimated that pending and threatened litigation amount to $1.1 million ($4.8 million in 2021–2022). Settlement, if any, that may be made with respect to these actions, is expected to be accounted for as a charge against income of the applicable years when future events are likely to occur and a reasonable estimate of the loss can be made.

10. Related party transactions

Through common ownership, the Fund is related to all Government of Canada departments, agencies, and Crown corporations. The Fund enters into transactions with these entities in the normal course of business and on normal trade terms.

Public Accounts of Canada 2023 Volume III—Bottom of the page Navigation

Date modified:: 2024-03-01

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