Real Property Services Revolving Fund

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 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.

Approved by:

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

Mark Quinlan
Assistant Deputy Minister,
Real Property Services Branch
Public Services and Procurement Canada

June 13, 2024 
Gatineau, Canada

Table 1Statement of authority provided (used) (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 5,800) (negative 24,698) 1,628 9,013
Operating source (use) of funds (negative 5,800) (negative 24,698) 1,628 9,013
Items requiring use of funds
Transfer of salary overpayments between government departments – (negative 80) – (negative 4)
Net other assets and liabilities 2,300 (negative 7,187) 214 6,212
Authority provided (used) (negative 3,500) (negative 31,965) 1,842 15,221

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 311,186 209,811
Payables charged against the appropriation at year-end (negative 525,243) (negative 325,631)
Receivables credited to the appropriation at year-end 258,480 201,896
Other items 40,521 30,833
Net authority provided (used), end of year 84,944 116,909
Authority limit (note 1) 150,000 150,000
Unused authority carried forward 234,944 266,909

Table 3Statement of financial position (unaudited) as at March 31, 2024
(in thousands of dollars)
  2024 2023
Assets
Financial assets
Cash in transit 18 15
Accounts receivable (note 3) 268,955 214,086
Other assets (note 4) 45,933 36,493
Total financial assets 314,906 250,594
Non-financial assets
Prepaid expenses 26 17
Total assets 314,932 250,611
Liabilities
Accounts payable and accrued liabilities (note 5) 529,044 338,571
Vacation pay and compensatory leave 23,812 24,059
Contractors' security deposits 416 179
Employee severance benefits (note 6) 8,874 8,863
Total liabilities 562,146 371,672
Net liabilities (note 7) (negative 247,214) (negative 121,061)
Total 314,932 250,611

Table 4Statement of operations and net liabilities (unaudited) for the year ended March 31, 2024
(in thousands of dollars)
  2024 2023
Revenues
Real Property services—other government departments 2,093,571 1,861,176
Real Property services—Public Services and Procurement Canada portfolio 344,492 336,617
Other revenues 3,477 2,570
Total revenues 2,441,540 2,200,363
Cost of sales (negative 1,867,853) (negative 1,641,562)
Gross profit 573,687 558,801
Operating expenses
Salaries and employee benefits 455,629 405,378
Corporate and administrative services 84,408 88,634
Professional and special services 21,148 23,502
Occupancy costs 21,039 22,922
Transportation and telecommunications 5,786 5,187
Other expenses 5,742 1,871
Utilities, materials and supplies 3,489 2,933
Employee severance benefits (note 6) 1,144 (negative 639)
Total operating expenses 598,385 549,788
Net results (negative 24,698) 9,013
Net liabilities, beginning of year (negative 121,061) (negative 92,593)
Transfer of salary overpayments between government departments (negative 80) (negative 4)
Net financial resources used (provided) and change in the accumulated net charge against the Fund's authority, during the year (note 7) (negative 101,375) (negative 37,477)
Net liabilities, end of year (note 7) (negative 247,214) (negative 121,061)

Table 5Statement of cash flows (unaudited) for the year ended March 31, 2024
(in thousands of dollars)
  2024 2023
Operating activities
Net results (negative 24,698) 9,013
Variations in statement of financial position
Decrease (increase) in cash in transit (negative 3) (negative 15)
Decrease (increase) in accounts receivable (negative 54,869) 10,181
Decrease (increase) in other assets (negative 9,440) (negative 6,281)
Decrease (increase) in prepaid expenses (negative 9) 11
Increase (decrease) in accounts payable and accrued liabilities 190,473 29,003
Increase (decrease) in vacation pay and compensatory leave (negative 247) (negative 2,881)
Increase (decrease) in contractors' security deposits 237 (negative 387)
Increase (decrease) in employee severance benefits 11 (negative 1,163)
Net financial resources provided by (used in) operating activities 126,153 28,468
Transfer of salary overpayments between government departments (negative 80) (negative 4)
Net financial resources provided (used) and change in the accumulated net charge against the Fund's authority, during the year (note 7) 101,375 37,477
Accumulated net charge against the Fund's authority, beginning of year 209,811 172,334
Accumulated net charge against the Fund's authority, end of year 311,186 209,811

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

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.

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:

The significant accounting policies are as follows:

(a) Revenue recognition

Revenues are comprised of revenues earned from non-tax sources. They include exchange transactions where goods or services are provided for consideration where a performance obligation exists. A performance obligation consists of an enforceable promise to provide specific goods or services to a specific client. The Fund's revenue transactions are recurring in nature. Recurring transactions are viewed as ongoing, routine activities that form part of the normal course of operations and can be used to indicate if they can be reasonably expected to be earned again in future years. Revenues are recorded as performance obligations are satisfied and collection is reasonably certain, as follows:

Revenues are recognized when professional and technical services are rendered based on the extent of progress towards completion of project deliverables. The recovery of disbursements in direct relation to the goods or services made on behalf of other government departments, agencies, and outside parties are recognized when costs for goods and services procured from the private sector are incurred by the Fund and the economic benefits associated with the revenue transaction are transferred to the Fund.

(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 6Accounts receivable
(in thousands of dollars)
  2024 2023
Other government departments and agencies 258,480 201,896
Outside parties 16,015 14,209
Total 274,495 216,105
Less: allowance for doubtful accounts on receivables from outside parties (negative 5,540) (negative 2,019)
Net accounts receivable 268,955 214,086

4. Other assets

Table 7Other assets
(in thousands of dollars)
  2024 2023
Sales tax refundable advances 45,052 35,598
Other advances 881 895
Total other assets 45,933 36,493

5. Accounts payable and accrued liabilities

Table 8Accounts payable and accrued liabilities
(in thousands of dollars)
  2024 2023
Outside parties 514,202 314,178
Other government departments and agencies 11,041 11,453
Total 525,243 325,631
Accrued liabilities 3,801 12,940
Total accounts payable and accrued liabilities 529,044 338,571

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 9Employee severance benefits
(in thousands of dollars)
  2024 2023
Employee severance benefits obligation, beginning of year 8,863 10,026
Expense for the year 1,144 (negative 639)
Benefits paid during the year (negative 1,133) (negative 524)
Employee severance benefits obligation, end of year 8,874 8,863

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 10Net liabilities
(in thousands of dollars)
  2024 2023
Accumulated surplus, beginning of year 88,750 79,741
Net results (negative 24,698) 9,013
Transfer of salary overpayments between government departments (negative 80) (negative 4)
Accumulated surplus, end of year 63,972 88,750
Accumulated net charge against the Fund's authority, beginning of year (negative 209,811) (negative 172,334)
Net financial resources used (provided) and change in the accumulated net charge against the Fund's authority, during the year (negative 101,375) (negative 37,477)
Accumulated net charge against the Fund's authority, end of year (negative 311,186) (negative 209,811)
Net liabilities, end of year (negative 247,214) (negative 121,061)

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:

Table 11Contractual obligations
(in thousands of dollars)
Year ending March 31
2025 856,246
2026 190,268
2027 40,501
2028 35,526
2029 and thereafter 36,720
Total contractual obligations 1,159,261

9. Contingent liabilities

Claims have been made against the Fund in the normal course of operations. These claims include items with pleading amounts and others for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. Of the claims and litigations for which the outcome is not determinable, no reasonable estimate can be made by management at March 31, 2024 (Nil in 2023–2024; $1.1 million in 2022–2023). 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 2024 Volume III—Bottom of the page Navigation

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