Canadian Grain Commission

Public Accounts of Canada 2024 Volume III—Top of the page Navigation

Statement of management responsibility

We have prepared the accompanying financial statements of the Canadian Grain Commission Revolving Fund as required by and 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. To ensure maximum objectivity and freedom from bias, the financial data contained in these financial statements has been examined by the Departmental Audit Committee. 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, the Fund 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.

The Canadian Grain Commission's Finance Division develops and disseminates financial management and accounting policies and issues specific directives which maintain standards of accounting and financial management. The Fund maintains systems of financial management and internal control which gives due consideration to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized by Parliament, 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. The Fund 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.

In order to ensure maximum objectivity and freedom from bias, these financial statements have been examined by the external auditors who have provided an independent opinion as to whether the financial statements present fairly the financial position of the Fund as at March 31, 2024 and the results of operations and the change in financial position for the year. This opinion has been appended to these financial statements.

Approved by:

Cheryl Blahey
Chief Financial Officer

Winnipeg, Canada
May 28, 2024

Table 1Statement of authority (used) provided (unaudited) for the year ended March 31, 2024Links to footnote * in table 1
(in thousands of dollars)
  2024 2023
EstimatesLinks to footnote 1 in table 1 Actual EstimatesLinks to footnote 1 in table 1 Actual
Net results (negative 7,524) (negative 16,604) (negative 10,015) (negative 15,344)
Items not requiring use of funds 3,988 3,319 3,698 3,892
Operating source (use) of funds (negative 3,536) (negative 13,285) (negative 6,317) (negative 11,452)
Items requiring use of funds
Net tangible capital assets acquisitions (negative 5,287) (negative 3,675) (negative 6,893) (negative 3,237)
Net other assets and liabilities – (negative 8,360) – (negative 8,399)
Authority provided (negative 8,823) (negative 25,320) (negative 13,210) (negative 23,088)
Annual voted authority and other statutory items provided (used) 6,199 (negative 6,910) 5,995 (negative 6,945)
Revolving fund legislative authority provided (used) (negative 2,624) (negative 18,410) (negative 7,215) (negative 16,143)

Table 2Reconciliation of unused authority (unaudited) as at March 31, 2024
(in thousands of dollars)
  2024 2023
Debit balance in the accumulated net charge against the Fund's authority 110,136 127,458
Payables charged against the appropriation, at year-end (negative 3,317) (negative 2,882)
Subtotal 106,819 124,576
Receivables credited to the appropriation, at year-end 13 129
Other 3,045 3,582
Net authority provided, end of year 109,877 128,287
Authority limit 2,000 2,000
Unused authority carried forward 111,877 130,287

Independent auditor's report

To the Deputy Head and the Departmental Audit Committee of Canadian Grain Commission Revolving Fund

Our opinion

In our opinion, the accompanying financial statements of the Canadian Grain Commission Revolving Fund (the Fund) as at March 31, 2024 and for the year then ended are prepared, in all material respects, in accordance with the basis of accounting described in note 2 to the financial statements.

What we have audited

The Fund's financial statements comprise:

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Fund in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

Emphasis of matter – basis of accounting and restriction on 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 to meet the requirements 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 management of the Fund and should not be used by parties other than the Fund, the Treasury Board of Canada and the Receiver General for Canada. Our opinion is not modified in respect to this matter.

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

Management is responsible for the preparation of the financial statements in accordance with the basis of accounting described in note 2 to the financial statements, 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 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:

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.

PricewaterhouseCoopers LLP
Chartered Professional Accountants,
Licensed Public Accountants

Winnipeg, Manitoba
June 3, 2024

Table 3Statement of financial position as at March 31, 2024
(in thousands of dollars)
  2024 2023
Assets
Financial assets
Accounts receivable (note 3) 5,642 7,552
Accountable advances 2 1
Total financial assets 5,644 7,553
Non-financial assets
Prepaid expenses 556 645
Tangible capital assets (note 4) 11,351 11,049
Total non-financial assets 11,907 11,694
Total assets 17,551 19,247
Liabilities and net assets
Liabilities
Accounts payable and accrued liabilities (note 5) 2,791 2,635
Salaries payable 3,883 6,208
Vacation, overtime and compensatory leave payable 2,797 2,739
Deferred revenue 982 933
Employee severance benefits liability (note 6) 621 973
Total liabilities 11,074 13,488
Net assets (note 8) 6,477 5,759
Total 17,551 19,247

Approved by:

David Hunt
Deputy Head

Cheryl Blahey
Chief Financial Officer

Table 4Statement of operations and net assets for the year ended March 31, 2024Links to footnote * in table 4
(in thousands of dollars)
  2024 2023
Grain Regulation Internal Services Total Total
Planned Results Actual Planned Results Actual Planned Results Actual Actual
Revenues
Fees and services 58,604 45,787 – – 58,604 45,787 43,617
Parliamentary appropriations (note 7) 6,600 6,600 295 295 6,895 6,895 6,912
Licensing and producer cars 2,265 2,043 – – 2,265 2,043 1,972
Optional services 1,939 1,518 25 24 1,964 1,542 1,910
Other revenues – – – 56 – 56 65
Total revenues 69,408 55,948 320 375 69,728 56,323 54,476
Operating expenses
Personnel 34,659 36,331 17,070 17,015 51,729 53,346 50,499
Rentals 3,978 3,969 1,787 2,241 5,765 6,210 6,055
Amortization of tangible capital assets – 2,780 – 601 – 3,381 3,875
Professional services 639 591 3,561 2,732 4,200 3,323 3,171
Transport and communication 2,231 1,779 969 897 3,200 2,676 2,509
Materials and supplies 1,704 937 129 143 1,833 1,080 1,152
Repairs and maintenance 2,423 1,369 288 282 2,711 1,651 1,079
Machinery and equipment 841 939 188 176 1,029 1,115 953
Loss on disposal of tangible capital assets – (negative 8) – – – (negative 8) (negative 20)
Information 15 40 199 105 214 145 512
Other expenses – 2 2,158 6 2,158 8 35
Total expenses 46,490 48,729 26,349 24,198 72,839 72,927 69,820
Net results 22,918 7,219 (negative 26,029) (negative 23,823) (negative 3,111) (negative 16,604) (negative 15,344)
Net assets, beginning of year           5,759 4,802
Net financial resources used and change in the accumulated net charge against the Fund's authority, during the year           17,322 16,301
Net assets, end of year           6,477 5,759

Table 5Statement of cash flows for the year ended March 31, 2024
(in thousands of dollars)
  2024 2023
Operating activities
Net results for the year (negative 16,604) (negative 15,344)
Items not affecting use of funds
Amortization of tangible capital assets 3,381 3,875
Provision for employee severance benefits (negative 54) 37
Loss on disposal of tangible capital assets (negative 8) (negative 20)
Subtotal (negative 13,285) (negative 11,452)
Payments of employee severance benefits (negative 298) (negative 173)
Variations in statement of financial position
Accounts receivable 1,910 (negative 3,824)
Accountable advances (negative 1) 8
Prepaid expenses 89 62
Accounts payable and accrued liabilities 156 (negative 206)
Salaries payable (negative 2,325) 2,629
Vacation, overtime and compensatory leave payable 58 (negative 86)
Deferred revenue 49 (negative 22)
Net financial resources used by operating activities (negative 13,647) (negative 13,064)
Capital investing activities
Acquisition of tangible capital assets (negative 3,683) (negative 3,263)
Proceeds from disposal of tangible capital assets 8 26
Net financial resources used by capital investing activities (negative 3,675) (negative 3,237)
Net financial resources used and change in the accumulated net charge against the Fund's authority, during the year (negative 17,322) (negative 16,301)
Accumulated net charge against the Fund's authority, beginning of year 127,458 143,759
Accumulated net charge against the Fund's authority, end of year 110,136 127,458

Notes to the financial statements for the year ended March 31, 2024

1. Authority and purpose

The Canadian Grain Commission Revolving Fund (the Fund) derives its authority from the Canada Grain Act. The Fund's mandate as set out in the Canada Grain Act is to, in the interest of grain producers, establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada, to ensure a dependable commodity for domestic and export markets.

The Fund's core responsibility is Grain Regulation: to regulate grain handling in Canada and establish and maintain science-based standards for Canadian grain. Internal Services supports this core responsibility.

The Fund was established under Appropriation Act No. 6, 1994–1995. The Fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for working capital, tangible capital acquisitions and temporary financing of accumulated operating deficits, with a drawdown authority of $2,000,000. The Fund also receives annual appropriation funding through the Appropriation Acts approved by Parliament.

The Fund fee revenue is largely based on grain volumes, which fluctuate from year to year. In years with higher-than-average grain volumes, revenues may exceed expenses and the Fund could accumulate surplus. In years with lower-than-average grain volumes, revenues could be less than expenses and the Fund would be required to draw on its surplus.

In accordance with the Government's policy on self-insurance, the Fund does not carry its own insurance. The Fund is not subject to income taxes.

2. Significant accounting policies

The financial statements have been prepared in accordance with the reporting requirements of the Receiver General for Canada for revolving funds. The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles for the public sector because:

The significant accounting policies are as follows.

(a) Use of estimates

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the periods covered by the financial statements. The principal financial statement components subject to measurement uncertainty include the estimated useful life of tangible capital assets, allowance for doubtful accounts, and the liabilities for employee severance benefits. Actual results could 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.

(b) Planned results

Planned results for the fiscal year ended March 31, 2024 disclosed in the statement of operations were based on revenues and expenses as per the Fund's 2023–2024 Departmental Plan and include adjustments subsequent to its preparation.

(c) Revenue recognition

Revenue is recognized when (or as) the performance obligation is satisfied through providing the promised services to a specific payor. Most of the Fund's fees and services are related to inspection and weighing activities that are dependent on grain volumes handled, and this revenue is recognized at a point in time. Licensing fees are recognized as the performance obligation is satisfied over a period of time, typically a 12-month period. Funds from payors received but where the performance obligation is not yet satisfied are presented as deferred revenue.

The Fund's operations are funded primarily from a permanent authority from Parliament (revolving fund) where the Fund is allowed to spend fees collected. Some of the operations of the Grain Research Program and Internal Audit are funded by ongoing Parliamentary appropriations through their annual votes. Parliamentary appropriations are non-exchange transactions that are recognized as revenue in the Fund annually.

(d) Expense recognition

Unless otherwise disclosed, expenses are recorded in the period they are incurred.

(e) Accounts receivable

Accounts receivable are stated at amounts expected to be ultimately realized. Allowances are established for all accounts for which interest or principal payments are 180 days past due and deemed uncollectable.

(f) Tangible capital assets

Certain assets previously under the custody of the Department of Agriculture and Agri-Food Canada were assumed by the Fund on April 1, 1995. The assumed assets were considered to be contributed capital and recorded at the Crown's estimated net book value. Assets acquired subsequent to April 1, 1995 were recorded at cost. Proceeds from the disposal of capital assets are retained by the Fund.

All capital assets and leasehold improvements with a cost equal to or greater than $10,000 are capitalized at their acquisition cost.

Assets are amortized on a straight-line basis over their estimated useful lives, commencing in the month after they are put into service, as follows:

Scientific equipment                                   5 years
Office equipment and furniture               5 years
Operational equipment                             10 years
Motor vehicles                                             5 years
Computer equipment and software        3 years
Leasehold improvements                          5 years

The costs for assets under construction are capitalized as incurred with amortization commencing in the month after they are put into service.

(g) Vacation, overtime and compensatory leave

Vacation, overtime and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.

(h) Employee severance benefits

The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The obligation for employees who did not withdraw benefits is calculated using information derived from management's estimate of the liability.

(i) Pension plan

Employees of the Canadian Grain Commission Revolving Fund are covered by the Public Service Superannuation Act and the Supplementary Retirement Benefits Act. The Government of Canada's portion of the pension cost is included in the employee benefit charge assessed against the Fund. The actual payment of the pension is made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts. Current legislation does not require the Fund to make contributions for any actuarial deficiencies of the Public Service Superannuation Account.

(j) Sick leave

Employees are permitted to accumulate unused sick leave. However, such leave entitlements do not vest and may only be used in the event of illness. Unused sick leave on employee termination is not payable to the employee. No amount has been accrued in these financial statements, and payments of sick leave benefits are included in current operations as incurred.

3. Accounts receivable

Table 6Accounts receivable
(in thousands of dollars)
  2024 2023
Other government departments and agencies 63 169
Outside parties 5,584 7,388
Subtotal 5,647 7,557
Less: allowance for doubtful accounts from outside parties (negative 5) (negative 5)
Total 5,642 7,552

4. Tangible capital assets

Table 7Tangible capital assets
(in thousands of dollars)Links to footnote * in table 7
  Cost Accumulated amortization Net book value
Balance at
beginning
of year		 Acquisitions Adjustment Disposals and transfers Balance at
end
of year		 Balance at
beginning
of year		 Amortization Disposals and transfers Balance at
end
of year		 2024 2023
Scientific equipment 22,636 1,415 – (negative 418) 23,633 17,658 1,516 (negative 418) 18,756 4,877 4,978
Office equipment and furniture 267 – – – 267 238 9 – 247 20 29
Operational equipment 3,188 110 – (negative 153) 3,145 2,459 191 (negative 153) 2,497 648 729
Motor vehicles 457 – – (negative 27) 430 380 32 (negative 27) 385 45 77
Computer equipment and software 9,692 729 1,598 – 12,019 8,903 774 – 9,677 2,342 789
Leasehold improvements 10,444 – 167 – 10,611 8,587 859 – 9,446 1,165 1,857
Assets under construction 2,590 1,429 (negative 1,765) – 2,254 – – – – 2,254 2,590
Total 49,274 3,683 – (negative 598) 52,359 38,225 3,381 (negative 598) 41,008 11,351 11,049

Assets under construction consist of leasehold improvements and in-house software development.

5. Accounts payable and accrued liabilities

Table 8Accounts payable and accrued liabilities
(in thousands of dollars)
  2024 2023
Other government departments and agencies 660 778
Outside parties 2,131 1,857
Total 2,791 2,635

6. Employee severance benefits liability

With Budget 2011, the Government of Canada announced its intention to eliminate the ongoing accumulation of severance benefits. All collective agreements for the Fund have been negotiated and severance benefits have ceased to accumulate. The amounts reported are for employees who did not liquidate their severance and will be paid on their departure from the public service.

Table 9Employee severance benefits liability
(in thousands of dollars)
  2024 2023
Employee severance benefits liability, beginning of year 973 1,109
Expense for the year (negative 54) 37
Benefits paid, during the year (negative 298) (negative 173)
Employee severance benefits liability, end of year 621 973

7. Parliamentary appropriations

The Canadian Grain Commission Revolving Fund is financed by the Government of Canada through a combination of an ongoing Parliamentary appropriations, the authority to respend fees collected, accumulated surpluses from prior years and a revolving line of credit of $2,000,000.

The government funding basis is used to recognize transactions affecting Parliamentary appropriations. The statement of operations and net assets is based on accrual accounting. Consequently, items presented in the statement of operations and net assets are not necessarily the same as those provided through appropriations from Parliament. Items recognized in the statement of operations and net assets in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Fund has appropriation authorities for the year on a government-funding basis and some on an accrual accounting basis. Details on appropriation authorities provided and used are shown in the following table.

Table 10Parliamentary appropriations
(in thousands of dollars)Links to footnote * in table 10
  2024 2023
Total appropriation funds provided 6,895 7,071
Lapsed – (negative 159)
Current year appropriation funds provided and used 6,895 6,912

8. Net assets

Contributed capital represents the value of capital assets financed from capital contributions at the inception of the Fund.

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 11Net assets
(in thousands of dollars)
  2024 2023
Contributed capital 4,941 4,941
Accumulated surplus
Opening balance 128,276 143,620
Net results (negative 16,604) (negative 15,344)
Closing balance 111,672 128,276
Accumulated net charge against the Fund's authority
Opening balance (negative 127,458) (negative 143,759)
Change in net resources used 17,322 16,301
Closing balance (negative 110,136) (negative 127,458)
Total net assets 6,477 5,759

9. Contractual obligations

The Fund leases its premises primarily under Lease Out Contracts. A Lease Out Contract is a formal agreement between the Fund and Public Services and Procurement Canada, recording the terms and conditions that govern the provision and occupancy of the accommodation. The Fund has a total of 17 separate Lease Out Contracts (2023—15) with various term lengths up to 10 years. In addition, the Fund has a direct lease agreement with the University of Manitoba for the rental of laboratory and office space.

For the year ended March 31, 2024, the Fund incurred $4,925,441 in costs associated with its occupancy and lease obligations (2023—$4,898,557). Expected future payouts by fiscal year are as follows:

Table 12Contractual obligations
(in thousands of dollars)
2025 4,495
2026 4,295
2027 1,233
2028 623
2029 and thereafter 1,539
Total 12,185

10. Contingent liabilities

In the normal course of its operations, the Fund may become involved in various legal actions and grievances with financial implications. Some of these potential liabilities 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 is recorded in the financial statements.

As at March 31, 2024, there were no accruals for contingent liabilities around various legal actions and grievances with financial implications in the financial statements (2023—nil).

11. Producer payment security

Through the Fund's Safeguards for Grain Farmers Program, licensed grain companies must provide payment security to the Fund to cover money owed to producers for grain deliveries in the event of a licensing default. When a Canadian Grain Commission Revolving Fund—licensed company fails to pay producers for grain deliveries, the Fund uses the security to pay producers for eligible claims. As at March 31, 2024, no pending claim transactions were remaining (2023—nil).

12. Related party transactions

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

Services provided by other government departments

During the year ended March 31, 2024, the Fund paid occupancy costs and certain professional services to other government departments or agencies. Employer's health insurance plan contributions and employee benefit plans were also provided by and paid to other government departments. Significant services have been recognized in the Fund's statement of operations and net assets as follows.

Table 13Related party revenues and expenses
(in thousands of dollars)
  2024 2023
Revenues (negative 371) (negative 483)
Expenses
Employer's contribution to employee benefit plans 10,650 9,072
Occupancy costs 4,768 4,763
Leasehold improvements 871 442
Professional and special services 2,373 2,290
Transportation and communication 224 296
Other 249 366
Total 18,764 16,746

Included in accounts receivable, accounts payable and salaries payable at year-end are the following amounts with related parties.

Table 14Related party accounts receivable, accounts payable and salaries payable at year-end
(in thousands of dollars)
  2024 2023
Accounts receivable 63 169
Accounts payable 660 778
Employer's contribution to employee benefit plans payable 885 1,386

13. Risk Disclosure

Financial instruments that potentially subject the Fund to concentrations of credit risk consist primarily of accounts receivable. For the year ended March 31, 2024, six large integrated organizations accounted for $4,418,906 or 79% of the Fund's outside parties receivable balances (2023—six organizations, $5,766,447 or 78%).

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