Table of contents


 

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, 2020, and all information contained in these financial statements rests with the management of the Parks Canada Agency. 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 Agency's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Agency'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 Agency; 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, 2020 was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.

The effectiveness and adequacy of the Agency's system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of the Agency's operations, and by the Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting.

In March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization. The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on Parks Canada is unknown at this time. Adjustments were made for known impacts such as refunds of deferred revenues and an increase of allowance for doubtful accounts.

The financial statements of the Agency have not been audited.

Ron Hallman

President & Chief Executive Officer
Gatineau, Canada
Date:

Catherine Blanchard

Vice-President, Finance
Gatineau, Canada
Date:


Statement of financial position (unaudited)

As at March 31 (in thousands of dollars)
Liabilities 2020 2019
Restated (note 18)
Accounts payable and accrued liabilities (Note 4) 189,182 187,770
Environmental liabilities (Note 5) 96,178 76,893
Deferred revenue (Note 6) 31,820 38,713
Lease obligations for tangible capital assets (Note 7) 1,643 2,036
Employee future benefits (Note 8) 10,357 10,364
Total liabilities 329,180 315,776
Financial assets
Due from the Consolidated Revenue Fund 193,030 197,721
Accounts receivable and advances (Note 9) 31,461 26,810
Total gross financial assets 224,491 224,531
Financial assets held on behalf of Government
Accounts receivable and advances (Note 9) (10,337) (8,519)
Total financial assets held on behalf of Government (10,337) (8,519)
Total net financial assets 214,154 216,012
Net debt 115,026 99,764
Non-financial assets
Prepaid expenses 3,035 3,424
Inventory (Note 10) 11,276 12,191
Tangible capital assets (Note 11) 4,370,004 3,807,040
Total non-financial assets 4,384,315 3,822,655
Net financial position (Note 12) 4,269,289 3,722,891

Contractual obligations and contractual rights (Note 13)

Contingent liabilities (Note 14)

The accompanying notes form an integral part of these financial statements.

Ron Hallman

President & Chief Executive Officer
Gatineau, Canada
Date:

Catherine Blanchard

Vice-President, Finance
Gatineau, Canada
Date:


Statement of operations and net financial position (unaudited)

For the year ended March 31 (in thousands of dollars)
Expenses 2020 Planned Results 2020 2019
Restated (note 18)
Parks Canada programs
Heritage places establishment 15,635 35,983 13,082
Heritage places conservation 187,329 196,934 228,925
Heritage places promotion and public support 55,053 66,255 67,395
Visitor experience 333,381 406,973 413,656
Heritage canals, highways and townsite management 135,382 133,347 134,776
Internal services 151,347 129,258 136,680
Total expenses 878,127 968,750 994,514
Revenues
Entrance fees 23,016 79,123 81,350
Recreational fees 54,890 41,109 41,761
Rentals and concessions 50,313 34,553 31,933
Other operating revenues 12,002 10,249 9,964
Townsites revenues 4,652 3,988 2,963
Staff housing 5,274 3,937 3,586
Revenues from donated properties - 27 16,738
Revenues earned on behalf of Government (147) (375) (154)
Total revenues 150,000 172,611 188,141
Net cost of operations before government funding and transfers 728,127 796,139 806,373
Government funding and transfers
Net cash provided by Government of Canada   1,291,156 1,249,320
Change in due from Consolidated Revenue Fund   (4,691) 16,239
Services provided without charge by other government departments (Note 15a)   56,057 55,195
Transfer of the transition payments for implementing salary payments in arrears   (3) -
Transfer of assets from other government departments   18 52
Total government funding and transfers   1,342,537 1,320,806
Net cost of operations after government funding and transfers   (546,398) (514,433)
Net financial position - Beginning of year   3,722,891 3,208,458
Net financial position - End of year   4,269,289 3,722,891

Segmented information (Note 16)

The accompanying notes form an integral part of these financial statements.


Statement of change in net debt (unaudited)

For the year ended March 31
(in thousands of dollars) 2020 2019
Restated (note 18)
Net cost of operations after government funding and transfers (546,398) (514,433)
Change due to tangible capital assets
Acquisitions and improvements to tangible capital assets 731,065 692,696
Amortization of tangible capital assets (163,730) (145,419)
Proceeds from disposal of tangible capital assets (862) (1,300)
Net loss on disposal of tangible capital assets including adjustments (3,504) (14,745)
Transfer (to) from other government departments (5) 62
Total change due to tangible capital assets 562,964 531,294
Change due to inventory (915) 2,363
Change due to prepaid expenses (389) 984
Net increase in net debt 15,262 20,208
Net debt - Beginning of year 99,764 79,556
Net debt - End of year 115,026 99,764

The accompanying notes form an integral part of these financial statements.


Statement of cash flows (unaudited)

For the year ended March 31
(in thousands of dollars) 2020 2019
Restated (note 18)
Operating activities
Net cost of operations before government funding and transfers 796,139 806,373
Non-cash items:
Amortization of tangible capital assets (163,730) (145,419)
Net loss on disposal of tangible capital assets including adjustments (3,504) (14,745)
Services provided without charge by other government departments (Note 15a) (56,057) (55,195)
Transition payments for implementing salary payments in arrears 3 -
Variations in statement of financial position:
Increase (decrease) in accounts receivable and advances 2,833 (3,945)
Increase (decrease) in prepaid expenses (389) 984
Increase (decrease) in inventory (915) 2,363
Increase in accounts payable and accrued liabilities (1,412) (13,094)
Decrease (increase) in deferred revenue 6,893 (870)
Decrease (increase) in employee future benefits 7 (113)
Increase in environmental liabilities (19,285) (18,842)
Transfer of other assets between government departments (23) 10
Cash used in operating activities 560,560 557,507
Capital investing activities
Acquisitions and improvements to tangible capital assets 731,065 692,696
Proceeds from disposal of tangible capital assets (862) (1,300)
Cash used in capital investing activities 730,203 691,396
Financing activities
Payments on lease obligations for tangible capital assets 394 417
Cash used in financing activities 394 417
Net cash provided by Government of Canada 1,291,156 1,249,320

Note: Totals may not add due to rounding.

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

In December 1998, Parks Canada Agency (the Agency) was established under the Parks Canada Agency Act as a departmental corporation and acts as an agent of Her Majesty in Right of Canada. The Parks Canada Agency is a separate entity listed under Schedule II of the Financial Administration Act and reports to the Minister of Environment and Climate Change.

The Agency's mandate is to protect and present nationally significant examples of Canada's natural and cultural heritage, and foster public understanding, appreciation and enjoyment in ways that ensure the ecological and commemorative integrity of these places for present and future generations. In carrying out its mandate, the Agency delivers the programs set out in the Agency's legislation and authorities.

The authorities for the programs for which Parks Canada is responsible are mainly derived from the Parks Canada Agency Act, the Canada National Parks Act, the Rouge National Urban Park Act, the Historic Sites and Monuments Act, the Canada National Marine Conservation Areas Act, the Saguenay-St. Lawrence Marine Park Act, the Historic Canal Regulations pursuant to the Department of Transport Act, the Heritage Railway Stations Protection Act, the Heritage Lighthouse Protection Act, and the Species at Risk Act.

The programs include:

Heritage Places Establishment:
This program aims to establish heritage places in order to conserve Canada’s natural and cultural heritage for the benefit and enjoyment of present and future generations. This process results in national parks, national marine conservation areas, national historic sites, persons and events, and other designated heritage places, including world heritage sites. Establishment or designation is achieved through feasibility assessments, public nominations, research, consultation and engagement with Indigenous Peoples, stakeholders and the general public, negotiations with other governments and Indigenous organizations, and recommendations from advisory bodies, where required. The Program also supports the Government of Canada’s outcome of “A vibrant Canadian culture and heritage” and Canada’s international biodiversity goals (Canada Target 1).
Heritage Places Conservation:
This program aims to protect and conserve the natural and cultural resources of heritage places managed by Parks Canada, including some World Heritage Sites in Canada, for the benefit and enjoyment of present and future generations. This program also provides financial and professional support and advice to heritage places not administered by Parks Canada, and supports Canada’s international conservation obligations. Conservation of natural and cultural resources includes various knowledge-based approaches, applied science, monitoring and reporting, active management, ecological restoration, species recovery, environmental assessment, fire management, commemorative integrity assessments and statements for national historic sites and compliance activities. The Program supports the Government of Canada’s outcome of “A clean and healthy environment.”
Heritage Places Promotion and Public Support:
This program aims to strengthen awareness and appreciation of Canada's national parks, national historic sites, and national marine conservation areas, and to introduce key audiences, such as youth, new Canadians, low- and middle-income Canadians, and urban Canadians to these places. Promotional activities strengthen awareness of heritage places managed by Parks Canada as well as key visitor experience offers and programs. Promotional activities include advertising, social media promotion, marketing, proactive media, and collaborative efforts with national, regional, and local partners and the tourism trade. Outreach activities introduce Canadians to these places through direct connections, interactive experiences, and learning. Outreach activities include digital products such as online video, television, websites, and social media and also include interactive activities such as activation events and participation in learning and tourism events, community gatherings, festivals, and presence at institutions such as museums and aquariums. Collaborative arrangements and partnerships play an important role in promotions and outreach. This program supports the Government of Canada's outcome of "A vibrant Canadian culture and heritage".
Visitor Experience:
This program provides visitors to national parks, national historic sites, and national marine conservation areas with opportunities to enjoy and appreciate these places in safe and meaningful ways. The program includes a range of activities, such as trip planning, reception, camping, accommodations, visitor safety, visitor services, interpretive activities, merchandise, compliance, and support for visitor facilities. This program supports the Government of Canada's outcome of "A vibrant Canadian culture and heritage".
Heritage Canals, Highways and Townsites Management:
This program involves the management of infrastructure for Canadians and provides opportunities for socio-economic benefits to adjacent communities. This program includes: the operation, maintenance and improvement of the Trans Canada and provincially numbered highways within national parks and a national historic site; water management activities and the management of bridge and dam infrastructure at heritage canals; and the provision of municipal services to certain national park townsites, and the management of related infrastructure. This program supports the Government of Canada’s outcome of “A safe and secure Canada.”
Internal Services:
Internal Services are those groups of related activities and resources that the federal government considers to be services in support of Programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct services that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. These services are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Management Services; Materiel Management Services and Acquisition Management Services.

2. Summary of significant accounting policies

These financial statements are prepared using the Government of Canada'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 Agency is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Agency 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 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” and “Revenues” sections of the Statement of Operations and Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2019-2020 Departmental Plan. Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Net Financial Position and in the Statement of Change in Net Debt because these amounts were not included in the 2019-2020 Departmental Plan.

(b) Net cash provided by Government

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

(d) Revenues

Entrance fees, recreational fees, rental and concessions, townsites, staff housing and other operating revenues are recognized based on the goods or services provided in the year by the Agency.

Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. Revenues are then recognized in the period in which the related expenses are incurred.

Deferred revenue consists of amounts received in advance of the delivery of goods and rendering of services that will be recognized as revenue in a subsequent fiscal year as it is earned.

Other revenues are recognized in the period the event giving rise to the revenues occurred.

Revenues that are non-respendable are not available to discharge the Agency's liabilities. While the CEO is expected to maintain accounting control, he has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented as a reduction of the Agency's gross revenues.

(e) Expenses

  • Transfer payments are recorded as an expense in the year the transfer is authorized and all eligibility criteria have been met by the recipient.
  • 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 accommodation, employer contributions to the health and dental insurance plans, legal services and workers' compensation are recorded as operating expenses at their carrying value.

(f) Employee future benefits

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

(g) Accounts receivable

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

(h) Non-financial assets

The costs of acquiring land, buildings, equipment and other capital property are capitalized as tangible capital assets and, except for land, are amortized to expense over the estimated useful lives of the assets, as described in Note 11. All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined in the Indian Act, works of art and museum collection to which no acquisition cost is attributable; and intangible assets. Acquired lands are recorded at historical cost. Crown lands acquired as a result of Confederation or the subsequent joining of a province or territory are recorded at a nominal value. Donated lands are recorded at their estimated market value at time of acquisition.

Inventories are valued at cost and are comprised of consumable supplies held for future program delivery and are not primarily intended for resale. Inventories that no longer have service potential are valued at the lower of cost or net realizable value.

(i) Contingent liabilities

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

(j) Environmental liabilities

An environmental liability for the remediation of contaminated sites is recognized when all of the following criteria are satisfied: an environmental standard exists, contamination exceeds the environmental standard, the Government is directly responsible or accepts responsibility, it is expected that future economic benefits will be given up and a reasonable estimate of the amount can be made. The liability reflects the Government’s best estimate of the amount required to remediate the sites to the current minimum standard for its use prior to contamination. When the future cash flows required to settle or otherwise extinguish a liability are estimable, predictable and expected to occur over extended future periods, a present value technique is used. The discount rate used reflects the Government’s cost of borrowing, associated with the estimated number of years to complete remediation.

The recorded liabilities are adjusted each year, for present value adjustments, inflation, new obligations, changes in management estimates and actual costs incurred.

If the likelihood of the Government’s responsibility is not determinable, a contingent liability is disclosed in the notes to the consolidated statements.

(k) Transactions involving foreign currencies

Transactions involving foreign currencies are translated in Canadian dollar equivalents using rates of exchange in effect at the time of those transactions.

(l) 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, environmental liabilities, the liability for employee future benefits and the useful life of tangible capital assets. 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.

Environmental liabilities are subject to measurement uncertainty as discussed in Note 5 due to the evolving technologies used in the estimation of the costs for remediation of contaminated sites, the use of discounted present value of future estimated costs, and the fact that not all sites have had a complete assessment of the extent and nature of remediation. Changes to underlying assumptions, the timing of the expenditures, the technology employed, or the revisions to environmental standards or changes in regulatory requirements could result in significant changes to the environmental liabilities recorded.

(m) 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 agency financial statement purposes at the carrying amount.

3. Parliamentary authorities

The Agency receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and 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 Agency 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) 2020 2019
Net cost of operations before government funding and transfers 796,139 806,373
Total revenues as per Statement of Operations 172,611 188,141
less: Revenues from donated properties (27) (16,738)
Revenues received pursuant to section 20 of the Parks Canada Agency Act 172,584 171,403
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (163,730) (145,419)
Services provided without charge by other government departments (56,057) (55,195)
Net loss on disposal of tangible capital assets including adjustments (3,504) (14,745)
Decrease (increase) in vacation pay and compensatory leave 1,724 (2,170)
Decrease (increase) in employee future benefits 7 (113)
Increase in environmental liabilities (19,285) (18,842)
Refund of prior years' expenditures 2,893 3,362
Increase in New Parks and Historic Sites Account 21,547 17,762
Other (3,800) (1,497)
Total items affecting net cost of operations but not affecting authorities (220,205) (216,857)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions and improvements to tangible capital assets 731,065 692,696
Salary overpayments 2,358 3,864
Proceeds from disposal of tangible capital assets (862) (1,300)
Decrease in lease obligation for tangible capital assets 394 417
Increase (decrease) in inventory (915) 2,363
Increase (decrease) in prepaid expenses (389) 984
Transition payments for implementing salary payments in arrears 3 -
Other 103 382
Total items not affecting net cost of operations but affecting authorities 731,757 699,406
Current year authorities used 1,480,275 1,460,325

(b) Authorities provided and used

(in thousands of dollars) 2020 2019
Authorities provided:
Vote 1 - Program expenditures 1,932,377 1,678,280
Vote 5 - New Parks and Historic Sites Account 26,323 44,007
Statutory amounts:
Expenditures equivalent to revenue received pursuant to section 20 of the Parks Canada Agency Act 196,329 196,038
Contributions to employee benefit plans 58,533 63,338
Total authorities 2,213,562 1,981,663
Less:
Authorities available for future years 213,210 500,281
Lapsed authorities 520,077 21,057
Current year authorities used 1,480,275 1,460,325

4. Accounts payable and accrued liabilities

The following table presents details of the Agency’s accounts payable and accrued liabilities:

(in thousands of dollars) 2020 2019
Accounts payable - Other government departments and agencies 42,149 39,480
Accounts payable - External parties 112,134 109,904
Total accounts payable 154,283 149,384
Accrued liabilities 34,899 38,386
Total accounts payable and accrued liabilities 189,182 187,770

5. Environmental liabilities

The Government’s “Federal Approach to Contaminated Sites” sets out a framework for management of contaminated sites using a risk-based approach. Under this approach the Government has inventoried the contaminated sites identified on federal lands, allowing them to be classified, managed and recorded in a consistent manner. This systematic approach aids in identification of the high risk sites in order to allocate limited resources to those sites which pose the highest risk to human health and the environment.

The Agency has identified 238 sites (234 sites in 2019) where contamination may exist and assessment, remediation and monitoring may be required. Of these, the Agency has identified 89 sites (88 sites in 2019) where action is required and for which a gross liability of $73,092,931 ($58,610,506 in 2019) has been recorded. This liability estimate has been determined based on site assessments performed by environmental experts.

In addition, a statistical model based upon a projection of the number of sites that will proceed to remediation and upon which current and historical costs are applied is used to estimate the liability for a group of sites with no liability. As a result, there are 66 unclassified sites (67 sites in 2019) where a liability estimate of $16,784,810 ($18,282,159 in 2019) has been recorded using this model. Furthermore, there are 6 classified sites with no liability estimates (0 site in 2019) where estimates have been calculated based on professional judgment and comparison with similar sites giving a total liability of $6,300,000 ($0 in 2019).

These three estimates combined, totaling $96,177,741 ($76,892,665 in 2019) represents management’s best estimate of the costs required to remediate sites to the current minimum standard for its use prior to contamination, based on information available at the financial statement date.

For the remaining 77 sites (79 sites in 2019), no liability for remediation has been recognized. Some of these sites are at various stages of testing and evaluation and if remediation is required, liabilities will be reported as soon as a reasonable estimate can be determined. For other sites, the Agency does not expect to give up any future economic benefits (there is likely no significant environmental impact or human health threats). These sites will be re-examined and a liability for remediation will be recognized if future economic benefits will be given up.

The following table presents the total estimated amounts of these liabilities by nature and source, the associated expected recoveries and the total undiscounted future expenditures as at March 31, 2020, and March 31, 2019. When the liability estimate is based on a future cash requirement, the amount is adjusted for inflation using a forecast CPI rate of 2.0% (2.2.% in 2019). Inflation is included in the undiscounted amount. The Government of Canada's cost of borrowing by reference to the actual zero-coupon yield curve for Government of Canada bonds has been used to discount the estimated future expenditures. The March 2020 rates range from 0.45% (1.55% in 2019) for 2 year term to 1.37% (1.92% in 2019) for a 30 or greater year term.

(in thousands of dollars) 2020 2019
Nature and source Total number of sites Number of sites with a liability Estimated liability Total undiscounted expenditures 2020 Total number of sites Number of sites with a liability Estimated liability Total undiscounted expenditures 2019
Former mineral exploration sites 1 8 5 5,773 5,865 8 4 3,829 4,007
Military & former military sites 2 3 1 160 163 3 1 152 159
Fuel related practices 3 49 23 14,775 15,013 48 21 5,255 5,498
Landfill/waste sites 4 48 73 23,630 24,009 48 72 23,432 24,522
Engineered asset/air & land transportation 5 5 2 367 373 5 2 349 365
Marine facilities/aquatic sites 6 6 5 30,673 31,165 6 5 24,816 25,970
Office/commercial/industrial operations 7 96 35 15,444 15,691 94 34 14,985 15,682
Other 8 23 17 5,356 5,442 22 16 4,075 4,265
Totals 238 161 96,178 97,721 234 155 76,893 80,468

Also during the year 1 site (3 in 2019) was closed as they were either remediated or assessed to confirm that they no longer meet all the criteria required to record a liability for contaminated sites.

Table 8 note 1

Contamination associated with former mine activities, e.g. heavy metals, petroleum hydrocarbons, etc. Sites often have multiple sources of contamination.

1

Table 8 note 2

Contamination associated with the operations of military and former military sites where activities such as fuel handling and storage activities, waste sites, metals/PCB-based paint used on buildings resulted in former or accidental contamination, e.g. petroleum hydrocarbons, polychlorinated biphenyls (PCBs), heavy metals. Sites often have multiple sources of contamination.

2

Table 8 note 3

Contamination primarily associated with fuel storage and handling, e.g. accidental spills related to fuel storage tanks or former fuel handling practices, e.g. petroleum hydrocarbons, polyaromatic hydrocarbons and BTEX (benzene, toluene, ethylbenzene and xylenes).

3

Table 8 note 4

Contamination associated with former landfill/waste site or leaching from materials deposited in the landfill/waste site, e.g. metals, petroleum hydrocarbons, BTEX, other organic contaminants, etc.

4

Table 8 note 5

Contamination associated with the operations of engineered assets such as airports, railways and roads where activities such as, fuel storage/handling, waste sites, firefighting training facilities and chemical storage areas resulted in former or accidental contamination, e.g. metals, petroleum hydrocarbons, polyaromatic hydrocarbons, BTEX and other organic contaminants. Sites often have multiple sources of contamination.

5

Table 8 note 6

Contamination associated with the operations of marine assets, e.g. port facilities, harbours, navigation systems, light stations, hydrometric stations, where activities such as fuel storage/handling, use of metal based paint (e.g. on light stations) resulted in former or accidental contamination, e.g. metals, petroleum hydrocarbons, polyaromatic hydrocarbons and other organic contaminants. Sites often have multiple sources of contamination.

6

Table 8 note 7

Contamination associated with the operations of the office/commercial/industrial facilities where activities such as fuel storage/handling waste sites and use of metal-based paint resulted in former or accidental contamination, e.g. metals, petroleum hydrocarbons, polyaromatic hydrocarbons, BTEX, etc. Sites often have multiple sources of contamination.

7

Table 8 note 8

Contamination from other sources, e.g. use of pesticides, herbicides, fertilizers at agricultural sites, use of PCBs, firefighting training areas, firing ranges and training facilities, etc.

8


6. Deferred revenue

Deferred revenue represents the balance at year-end of unearned revenues stemming from amounts received from external parties for fees prior to services being performed. Revenue is recognized in the period in which the service is performed. Details of the transactions related to this account are as follows:

(in thousands of dollars) 2020 2019
Deferred revenue - Beginning of year 38,713 37,843
Amounts received 23,548 37,561
Revenue recognized (30,441) (36,691)
Deferred revenue - End of year 31,820 38,713

Due to COVID-19, $6,363,143 in receipts were refunded after March 31, 2020. As a result, this amount was reclassified from deferred revenue to accounts payable.


7. Lease obligations for tangible capital assets

The Agency has entered into agreements to lease commercial and office space under capital leases with a cost of $19,205,164 and accumulated amortization of $8,908,131 as at March 31, 2020 ($19,205,164 and $8,269,377 respectively as at March 31, 2019). The obligations related to the upcoming years include the following:

(in thousands of dollars) 2020 2019
2020 - 509
2021 403 403
2022 403 403
2023 403 403
2024 403 403
2025 and subsequent 287 385
Total future minimum lease payment 1,899 2,506
Less: imputed interest (6.3%) 256 470
Balance of obligations under leased tangible capital assets 1,643 2,036

8. Employee future benefits

(a) Pension benefits

The Agency'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 the Agency 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 2020 expense amounts to $40,551,405 ($44,171,750 in 2019). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2019) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2019) the employee contributions.

The Agency'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 Agency’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) 2020 2019
Accrued benefit obligation - Beginning of year 10,364 10,251
Expense for the year 1,979 1,670
Benefits paid during the year (1,986) (1,557)
Accrued benefit obligation - End of year 10,357 10,364

9. Accounts receivable and advances

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

(in thousands of dollars) 2020 2019
Restated (note 18)
Receivables - Other government departments and agencies 5,921 5,584
Receivables - External parties 23,130 18,399
Employee advances 3,659 3,562
32,710 27,545
Allowance for doubtful accounts on receivables from external parties (1,249) (735)
Gross accounts receivable 31,461 26,810
Accounts receivable held on behalf of Government (10,337) (8,519)
Total accounts receivable and advances 21,124 18,291

Due to Covid-19 and the impact on the economy, the allowance for doubtful accounts on receivables from external parties has been increased.


10. Inventory

(in thousands of dollars) 2020 2019
(note 19)
Stationery, office and miscellaneous supplies 3,190 3,711
Equipment, materials and supplies 1,765 1,797
Fabricated wood and metal products 1,246 1,172
Fuel and other petroleum products 1,015 926
Top soil, sand, gravel and other crude material 1,174 1,481
Printed books, publications and maps 732 707
Safety equipment 945 1,275
Construction material and supplies 624 669
Uniforms and protective clothing 585 453
Total inventory 11,276 12,191
The cost of consumed inventory recognized as an expense in the Statement of Operations and Net Financial Position is $57,104,836 in 2020 ($69,840,693 in 2019).

11. Tangible capital assets

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

Asset Class
Amortization Period

Buildings

25-50 years

Fortifications

50-100 years

Leasehold improvements

Lesser of the remaining term of the lease or useful life of the improvement

Leased tangible capital assets

Term of lease or economic life of the property if the lease contains a bargain purchase option

Landscaping and improvement

10-40 years

Roads

40 years

Bridges

25-50 years

Canals and marine facilities

25-80 years

Utilities

20-40 years

Vehicles and equipment

3-15 years

Exhibits

5-10 years

Assets under construction are recorded in the applicable asset class in the year they are put into service and are not amortized until they are put into service.

Collections and archaeological sites

Core to the Agency's mandate to protect and present nationally significant examples of our cultural heritage is the management of collections and archaeological sites. Although not capitalized like other cultural assets such as buildings or fortifications, these treasures have inestimable cultural value.

(a) Collections

The Agency manages collections that are made up of archaeological and historical objects.

The collection of archaeological objects includes specimens and records that represent a cross-section of human habitation and activities. These holdings consist of a range of functional groups of artifacts that represent domestic activities to industrial processes and includes tools, ships' fittings, as well as soil and botanical samples.

The collection of historic objects dates from the 10th century to the present day. They encompass ethnographic material, civilian, military and fur trade items, furniture and furnishings, tools and documents.

In addition, the Agency manages a collection of reproductions including period costumes, tools and furniture that have been copied from original objects or made based on historical data.

(b) Archaeological sites

An archaeological site encompasses surface, subsurface, or submerged remains of human activity. Archaeologists define a site by identifying the different activities that were conducted within an area. There are many archaeological sites identified within Parks Canada's national historic sites, national parks and marine conservation areas. The types of sites vary greatly, from Indigenous villages, hunting camps, observation areas, and animal processing areas, to European fur trade and military posts, battlefields, shipwrecks, homesteads, and transportation and industrial sites.

Cost
(in thousands of dollars)
Opening balance Acquisitions Adjustments Footnote 1 Disposals and write-offs Closing balance
Tangible capital assets
Land 267,416 2,497 - 155 269,758
Buildings, fortifications and leasehold improvements 1,093,439 14,249 28,114 2,930 1,132,872
Landscaping and improvement 705,024 5,489 11,197 319 721,391
Roads 1,830,286 111,304 68,690 22,634 1,987,646
Bridges 685,316 32,499 16,796 1,646 732,965
Canals and marine facilities 726,184 62,298 155,212 2,432 941,262
Utilities 314,896 1,496 3,809 516 319,685
Vehicles and equipment 203,255 9,773 4,661 5,364 212,325
Exhibits 106,022 168 300 541 105,949
5,931,838 239,773 288,779 36,537 6,423,853
Assets under construction
Buildings, fortifications and leasehold improvements 227,953 124,286 (21,611) 857 329,771
Landscaping and improvement 116,831 66,420 (16,009) 402 166,840
Roads 105,102 22,908 (71,200) 115 56,695
Bridges 59,537 46,847 (28,043) 85 78,256
Canals and marine facilities 300,737 195,341 (145,270) 41 350,767
Utilities 61,511 25,297 (1,703) 193 84,912
Vehicles and equipment 14,855 4,814 (3,277) 14 16,378
Exhibits 10,568 5,379 (340) 15 15,592
897,094 491,292 (287,453) 1,722 1,099,211
Leased tangible capital assets
Buildings, fortifications and leasehold improvements 19,205 - - - 19,205
Total 6,848,137 731,065 1,326 38,259 7,542,269
Footnote 1

Adjustments include assets under construction of $287,494,729 that were transferred to the other categories upon completion of the assets.

Return to footnote 1 referrer

 
Accumulated amortization
(in thousands of dollars)
Opening balance Amortization AdjustmentsFootnote 1 Disposals and write-offs Closing balance Net book value
2020 2019
Tangible capital assets
Land - - - - - 269,758 267,416
Buildings, fortifications and leasehold improvements 677,194 21,177 566 2,756 696,181 436,691 416,245
Landscaping and improvement 594,005 9,955 (279) 290 603,391 118,000 111,019
Roads 869,466 79,707 (45) 20,234 928,894 1,058,752 960,820
Bridges 154,791 17,441 (259) 1,466 170,507 562,458 530,525
Canals and marine facilities 362,194 11,250 118 2,002 371,560 569,702 363,990
Utilities 150,889 7,850 51 482 158,308 161,377 164,007
Vehicles and equipment 128,052 13,288 50 5,059 136,331 75,994 75,203
Exhibits 96,238 2,423 42 517 98,186 7,763 9,784
3,032,829 163,091 244 32,806 3,163,358 3,260,495 2,899,009
Assets under construction
Buildings, fortifications and leasehold improvements - - - - - 329,771 227,953
Landscaping and improvement - - - - - 166,840 116,831
Roads - - - - - 56,695 105,102
Bridges - - - - - 78,256 59,537
Canals and marine facilities - - - - - 350,767 300,737
Utilities - - - - - 84,912 61,511
Vehicles and equipment - - - - - 16,378 14,855
Exhibits - - - - - 15,592 10,568
- - - - - 1,099,211 897,094
Leased tangible capital assets
Buildings, fortifications and leasehold improvements 8,268 639 - - 8,907 10,298 10,937
Total 3,041,097 163,730 244 32,806 3,172,265 4,370,004 3,807,040
Footnote 1

During 2019-20, the Agency transferred in a vehicle with a net book value of $2,807 from Royal Canadian Mounted Police, a vehicle with a net book value of $3,000 from the Departement of National Defence and transferred a vehicle with a net book value of $10,426 to Royal Canadian Mounted Police. These transfers are included in the adjustment column.

Return to footnote 1 referrer


12. Net financial position

A portion of the Agency's net financial position is used for a specific purpose. Related revenues and expenses are included in the Statement of Operations and Net Financial Position.

The New Parks and Historic Sites Account was established pursuant to the Parks Canada Agency Act. Funds are provided to the New Parks and Historic Sites Account by voted authorities, proceeds from the sale of lands and buildings that are surplus to operational requirements and all general donations. Furthermore, the Minister of Finance may, on the request of the Minister of the Environment, authorize the making of advances of up to $10 million to the New Parks and Historic Sites Account. All amounts received remain in this account until eligible capital expenditures are made for the purpose of establishing or developing new parks, historic sites and heritage areas, in compliance with the terms and conditions set out in the Parks Canada Agency Act and related Treasury Board directives. The balance of the account is to be used to protect the capital funding required and honor the Agency’s commitment for the establishment, enlargement or designation of national parks, national historic sites, national marine conservation areas or other protected heritage areas.

The late The Right Hon W L Mackenzie King bequeathed Laurier House, Ottawa, and the sum of $225,000, to the Government of Canada. This amount was credited to the account and earns interest, in accordance with the terms of section 3 of the Laurier House Act. The interest is to be used to assist in the maintenance of the Laurier House, which is to be preserved as a place of historic interest, and also to provide accommodation for study and research.

The following table presents details of the Agency's net financial position:

(in thousands of dollars) 2020 2019
Restricted
New Parks and Historic Sites Account
Available at beginning of year 57,605 39,843
Receipts:
Parliamentary authorities 26,323 44,007
Proceeds on disposal of tangible capital assets 215 987
Donations 27 545
26,565 45,539
Capital expenditures 5,018 27,777
New Parks and Historic Sites Account - Available at end of year 79,152 57,605
Mackenzie King Trust Account 225 225
Restricted - Available at end of year 79,377 57,830
Unrestricted 4,189,912 3,673,580
Net financial position at year end 4,269,289 3,731,410

13. Contractual obligations and contractual rights

a) Contractual obligations

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

(in thousands of dollars) 2021 2022 2023 2024 2025 and subsequent Total
Operating leases 7,318 171 171 140 767 8,567
Purchases and transfer payments 374,141 138,454 24,541 340 14,341 551,817
Total 381,459 138,625 24,712 480 15,108 560,384

b) Contractual rights

The activities of the agency sometimes involve the negotiation of contracts or agreements with outside parties that results in the agency having rights to both assets and revenues in the future. Major contractual rights that will generate revenues in future years and that can be reasonably estimated are summarized as follows:

(in thousands of dollars) 2021 2022 2023 2024 2025 and subsequent Total
Leases of property 9,258 9,335 9,139 9,130 175,816 212,678
OtherFootnote 1 2,804 2,803 2,785 2,767 4,258 15,417
Total 12,062 12,138 11,924 11,897 180,074 228,095
Footnote 1

Includes municipal incorporation agreements and residential licences that do not have an end date, therefore amounts for 2025 and subsequent cannot be determined.

Return to footnote 1 referrer


14. Contingent liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown. The Agency's contingent liabilities consist of claims which include items with pleading amounts and other for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. The Agency has recorded an allowance of $75,000 for claims and litigations where it is likely that there will be a future payment and a reasonable estimate of the loss can be made. Claims and litigations for which the outcome is not determinable and a reasonable estimate can be made by management amount to approximately $2,320,000 at March 31, 2020 ($1,150,000 in 2019).


15. Related party transactions

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

a) Common services provided without charge by other government departments

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

(in thousands of dollars) 2020 2019
Employer's contribution to the health and dental insurance plans 36,914 36,398
Accommodation 18,914 18,495
Legal services 180 171
Workers' compensation 49 131
Total 56,057 55,195

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 as well as the email, network and data center services and the workplace technology devices provided by Shared Services Canada are not included in the Agency's Statement of Operations and Agency's Net Financial Position.

(b) Other transactions with other government departments and agencies

(in thousands of dollars) 2020 2019
(note 19)
Accounts receivable 5,921 5,584
Accounts payable 42,149 39,480
Expenses 184,026 159,031
Revenues 824 733
Expenses and revenues disclosed in (b) exclude common services provided without charge, which are already disclosed in (a).

16. Segmented information

Presentation by segment is based on the Agency's program alignment architecture. 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 and revenues generated for the main programs, by major object of expense and by major type of revenue. The segment results for the period are as follows:

(in thousands of dollars) Heritage places establishment Heritage places conservation Heritage places promotion and public support Visitor experience Heritage canals, highways and townsite management Internal services 2020 2019
Restated (note 18)
Salaries and employee benefits 7,488 112,220 40,255 196,458 25,415 97,680 479,516 509,839
Operating expenses
Amortization of tangible capital assets 7 9,656 351 73,553 78,447 1,716 163,730 145,419
Professional and special services 1,055 37,251 3,935 35,017 8,110 13,757 99,125 118,076
Utilities, materials and supplies 405 12,187 1,199 39,985 13,868 2,732 70,376 68,318
Rentals 127 5,246 848 7,531 362 3,479 17,593 24,156
Transportation and communications 601 7,301 2,664 6,761 441 4,533 22,301 21,347
Net loss on disposal of tangible capital assets including adjustments (3) 129 - 1,949 1,542 (113) 3,504 14,745
Payments in lieu of taxes - - - 20,514 - - 20,514 18,725
Repairs and maintenance 5 2,221 25 9,499 3,920 253 15,923 24,476
Accommodation 282 4,351 1,521 7,833 1,117 3,810 18,914 18,495
Information 21 793 3,730 3,338 29 569 8,480 9,166
Miscellaneous expenses - 276 8 2,101 139 842 3,366 (875)
Total operating expenses 2,500 79,411 14,281 208,081 107,975 31,578 443,826 462,048
Grants and contributions 25,995 5,303 11,719 2,434 (43) - 45,408 22,627
Total expenses 35,983 196,934 66,255 406,973 133,347 129,258 968,750 994,514
Revenues
Entrance fees - - - 79,123 - - 79,123 81,350
Recreational fees - - - 41,109 - - 41,109 41,761
Rentals and concessions - 345 - 29,239 4,959 10 34,553 31,933
Other operating revenues 25 1,494 129 6,838 1,142 621 10,249 9,964
Townsites revenues - - - - 3,988 - 3,988 2,963
Staff housing - 1,363 - 2,574 - - 3,937 3,586
Revenues from donated properties - - - 27 - - 27 16,738
Revenues earned on behalf of Government - - - (1) - (374) (375) (154)
Total revenues 25 3,202 129 158,909 10,089 257 172,611 188,141
Net cost from continuing operations 35,958 193,732 66,126 248,064 123,258 129,001 796,139 806,373

17. Subsequent events

Contractual rights

On April 24, 2020, the Government of Canada announced the Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses impacted by COVID-19. The Federal Government has extended the same level of rent remission to eligible federal commercial tenants that is available under CECRA. The impact of this measure will be mostly reflected in 2020/2021 financial statements and possibly in the 2021/2022 financial statements.


18. Adjustments to prior year's results

In 2019-20, the agency decided to review its financial reporting methods related to assets. The review noted that accounts receivable due to salary overpayments should be classified as "Financial assets held on behalf of the Government". The change has been applied retroactively and comparative information for 2018-2019 has been restated.

The following table presents the effect of the prior year restated results:

(in thousands of dollars) 2019
As previously stated

Effect of the adjustment
2019
Restated
Statement of financial position
Financial assets held on behalf of Government - (8,519) (8,519)
Total net financial assets 224,531 (8,519) 216,012
Net debt 91,245 8,519 99,764
Net financial position 3,731,410 (8,519) 3,722,891
Statement of operations and net financial position
Net cash provided by Government of Canada 1,251,504 (2,184) 1,249,320
Net cost of operations after government funding and transfers (516,617) 2,184 (514,433)
Net financial position - Beginning of year 3,214,793 (6,335) 3,208,458
Departmental net financial position - end of year 3,731,410 (8,519) 3,722,891
Statement of change in net debt
Net cost of operations after government funding and transfers (516,617) 2,184 (514,433)
Net debt - Beginning of year 73,221 6,335 79,556
Net increase (decrease) in net debt 18,024 2,184 20,208
Net debt - End of year 91,245 8,519 99,764
Statement of cash flows
(Decrease) increase in accounts receivable and advances (1,761) (2,184) (3,945)
Cash used in operating activities 559,691 (2,184) 557,507
Net cash provided by Government of Canada 1,251,504 (2,184) 1,249,320

19. Comparative information

Comparative figures have been reclassified to conform to the current year’s presentation.