Future-Oriented Financial Statements 2012-2013

Statement of Management Responsibility

Departmental management is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at February 23, 2012, and reflect the plans described in the Report on Plans and Priorities.

Original signed by Margaret Biggs
on March 15, 2012

____________________________
Margaret Biggs
President

Gatineau, Canada


____________________________
Date
Original signed by Sue Stimpson
on March 6, 2012

____________________________
Sue Stimpson
Chief Financial Officer

Gatineau, Canada


____________________________
Date
Canadian International Development Agency Future-oriented Statement of Financial Position as of March 31
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Assets
Financial assets
Due from the Consolidated Revenue Fund841,331782,538
Accounts receivable and advances (note 6)4,0123,836
Loans to developing countries and International Financial Institutions (note 7)125,181119,070
Investments and advances to International Financial Institutions (note 8)6,739,0767,027,239
Allowance for valuation of investments and advances to International Financial Institutions (note 8)(6,739,076)(7,027,239)
Canadian Investment Fund for Africa (note 9)57,00851,011
Total financial assets1,027,532956,455
Non-financial assets
Prepaid expenses (note 18)218,185687
Tangible capital assets (note 10)9,7548,614
Total non-financial assets227,9399,301
Total assets1,255,471965,756
Liabilities and Equity of Canada
Liabilities
Accounts payable and accrued liabilities (note 11)843,334784,437
Vacation pay and compensatory leave8,0837,669
Notes payable to International Financial Institutions (note 12)2,540-
Employee future benefits (note 13)22,06818,303
Total liabilities876,025810,409
Equity of Canada379,446155,347
Total liabilities and Equity of Canada1,255,471965,756

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to December 31, 2011.

Contingent liabilities (note 14)
Contractual obligations (note 15)

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

Canadian International Development Agency Future-oriented Statement of Operations For the Year Ended March 31
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Expenses
Global engagement and strategic policy1,495,1811,292,774
Low-income countries945,9651,121,757
Fragile states and crisis-affected communities681,624701,420
Middle-income countries361,856385,020
Canadian engagement for development308,786323,191
Internal services117,893118,629
Total expenses3,911,3053,942,791
Revenues
Middle-income countries16,38816,568
Global engagement and strategic policy11,79421,915
Low-income countries422422
Internal services77
Total revenues28,61138,912
Net cost of operations3,882,6943,903,879

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to December 31, 2011.

Segmented information (note 17)

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

Canadian International Development Agency Future-oriented Statement of Equity of Canada For the year ended March 31
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Equity of Canada, beginning of year601,876379,446
Net cost of operations(3,882,694)(3,903,879)
Net cash provided by Government of Canada3,511,1253,715,755
Change in due from the Consolidated Revenue Fund125,093(58,793)
Services provided without charge by other government departments (note 16)24,04622,818
Equity of Canada, end of year379,446155,347

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to December 31, 2011.

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

Canadian International Development Agency Future-oriented Statement of Cash Flow For the year ended March 31
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Operating activities
Net cost of operations3,882,6943,903,879
Non-cash items:
Amortization of tangible capital assets(2,311)(2,580)
Services provided without charge by other government departments (note 16)(24,046)(22,818)
Variations in Statement of Financial Position:
Decrease in accounts receivable and advances(235,650)(176)
Decrease in loans to developing countries and International Financial Institutions(9,665)(6,111)
Decrease in the Canadian Investment Fund for Africa(5,996)(5,997)
Increase (decrease) in prepaid expenses7,978(217,498)
Decrease (increase) in accounts payable and accrued liabilities(192,659)58,897
Decrease in vacation pay and compensatory leave1,000414
Decrease in notes payable to International Financial Institutions-2,540
Decrease in accrued liability for matching funds programs71,470-
Decrease in employee future benefits16,5673,765
Decrease in other liabilities2-
Cash used in operating activities3,509,3843,714,315
Capital investing activities
Acquisition of tangible capital assets1,7411,440
Cash used in capital investing activities1,7411,440
Net cash provided by Government of Canada3,511,1253,715,755

Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to December 31, 2011.

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

1. Authority and objectives

The Canadian International Development Agency (CIDA) is designated as a department for the purposes of the Financial Administration Act by Order-in-Council P.C. 1968-923 of May 8, 1968. The authority for the CIDA program and related purposes is found in the Department of Foreign Affairs and International Trade Act, in the Annual Appropriations Act and in the International Development (Financial Institutions) Assistance Act. CIDA is the lead government organization responsible for Canada's Official Development Assistance (ODA). In addition, the Official Development Assistance Accountability Act (ODAAA) came into force on June 28, 2008. The ODAAA imposes reporting obligations on the Government.

CIDA's mandate is to manage Canada's support and resources effectively and accountably to achieve meaningful, sustainable development results, and engage in policy development in Canada and internationally, enabling Canada's efforts to realize its development objectives. CIDA fulfills its mandate through six main program activities:

  • Fragile states and crisis-affected communities
    Fragile states and crisis-affected communities face particularly severe development challenges exacerbated by conflict, instability, man-made crises or natural disasters within complex national and regional contexts. They have weak institutional capacity, poor governance, political instability, and ongoing violence or a legacy of past conflict. Canada's engagement is often whole-of-government and subject to closely monitored and visible government strategies. This program activity features programming that is both short term to ensure delivery of, and access to, essential humanitarian services to crisis-affected populations in order to reduce immediate vulnerabilities of the population; and medium to long term, to create conditions for sustainable economic growth and build the foundation for effective governance and delivery of basic services. It requires working with partners that have expertise and the capacity to deliver in high-risk environments.
  • Low-income countries
    Countries within the World Bank low-income category face pervasive poverty and limited institutional capacity, but have broadly stable governance and public security. These countries generally have a high level of aid dependency, limited resilience to respond to a number of vulnerabilities and external shocks, and limited ability to attend to the human development needs of their populations. Programming under this program activity features long-term engagement on country priorities, primarily to strengthen education and health outcomes for children and youth, address the root causes of food insecurity, foster inclusive and sustainable economic growth, and build the foundations for effective governance including ensuring country institutions can sustain the benefits of development programs. The Canadian International Development Agency (CIDA) works with other donors, civil society organizations and ministries of recipient governments. Engagement is normally anchored in the partner government's development strategy and program, around which donors coordinate and harmonize their efforts. This may involve the pooling of funds or other forms of program-based approaches.
  • Middle-income countries
    Countries within the World Bank middle-income category face specific challenges in inclusive, sustainable economic growth and development. These countries exhibit a stronger economic and social foundation and a lower reliance on aid than low-income countries, but may still have a large proportion of their population facing inequality and poverty. These countries often have stark disparities along geographic, gender, ethnic, or urban-rural lines, as well as pockets of deep poverty. This is in large part due to low productivity and competitiveness, and weak political accountability that does not address discrimination and marginalization. Main areas of programming under this program activity focus on delivering targeted technical assistance to foster equal access to economic opportunities and to public services to create the conditions for more competitive and inclusive local economies, to expand service delivery to reach marginalized groups, and to build accountable democratic institutions. It requires working in partnership with government, civil society, and the private sector to build capacity including knowledge and systems.
  • Global engagement and strategic policy
    Achieving international development outcomes requires engagement on the global stage and investments through international partners, as appropriate. Multilateral/international organizations and global initiatives tackle global problems (e.g., infectious diseases, climate change), provide a governance mechanism in areas such as humanitarian assistance or to set the development agenda (e.g., Millennium Development Goals), and provide economies of scale and of scope as well as significant expertise and capacity on the ground. Activities under this program activity aim at delivering concrete results on the ground by shaping and investing in multilateral and international institutions partners' policies and programs throughout the world, and exerting policy influence to shape international development policy in Canada and globally in line with the Government's priorities through the fostering of effective partnerships and policy dialogue.
  • Canadian engagement for development
    CIDA supports the work of Canadian organizations to achieve development results by drawing on strengths, expertise, networks, and opportunities available to Canadian organizations and by broadening Canadian engagement in international development through outreach and education activities. Programming under this program activity involves co investment in the most meritorious development proposals that align with Canada's development priorities. Through calls for proposals, CIDA provides complementary funding to selected proposals received from Canadian organizations such as civil society organizations, academic institutions, and professional associations. Canadian organizations in turn work with partner country counterparts to deliver development results on the ground.
  • Internal services
    This program activity provides support services to CIDA programming for the delivery of the Canadian aid program. It includes governance and management support, resources-management services, and asset-management services.

2. Methodology and significant assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the Agency as described in the Report on Plans and Priorities.

The main assumptions are as follows:

  1. CIDA's activities will remain substantially the same as for the previous year.
  2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
  3. Allowances for uncollectibility are based on historical experience. The general historical pattern is expected to continue.
  4. Estimated year-end information for 2011-2012 is used as the opening position for the 2012-2013 forecasts.

These assumptions are adopted based on approvals received on February 23, 2012.

3. Variations and changes to the forecast financial information

While every attempt has been made to accurately forecast final results for the remainder of 2011-2012 and for 2012-2013, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these financial statements, CIDA has made estimates and assumptions concerning the future. These estimates and judgments may differ from the subsequent actual results. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented financial statements and the historical financial statements include:

  1. Further changes to the transfer payments and operating budgets through additional new initiatives or technical adjustments later in the year.
  2. Economic conditions may affect the collectability of loan receivables.
  3. Interest rates in effect at the time of issue will affect the net present value of non-interest bearing loans.
  4. The timing and amounts of acquisitions of equipment may affect the amortization expense.
  5. Implementation of new collective agreements.

Once the Report on Plans and Priorities is presented, CIDA will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates.

4. Summary of significant accounting policies

The future-oriented financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

(a) Parliamentary authorities

CIDA is financed by the Government of Canada through Parliamentary appropriations. Financial reporting of authorities provided to the department 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 the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. note 5 provides a reconciliation between the bases of reporting.

(b) Net cash provided by Government of Canada

CIDA operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by CIDA is deposited to the CRF and all cash disbursements made by CIDA 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 the CRF

Amounts due from 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 CIDA is entitled to draw from the CRF without further appropriations to discharge its liabilities.

d) Revenues

Revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place. CIDA's revenues mainly consist of foreign exchange gain on revaluation as well as interest and service fees on loans.

(e) Expenses

Expenses are recorded on the accrual basis. CIDA's expenses mainly consist of grants and contributions, operating transactions and foreign exchange loss on revaluation.

  • Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.
  • Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement, provided that the transfer is authorized and a reasonable estimate can be made.
  • Vacation pay and compensatory leave are accrued as the benefits 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 estimated cost.

(f) Employee future benefits

  1. Pension benefits: Eligible employees participate in the Public Service Pension Plan a multiemployer pension plan administered by the Government. CIDA's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation to the Plan. Current legislation does not require CIDA to make contributions for any actuarial deficiencies of the Plan.
  2. Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. 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.

(g) Accounts receivable and advances

Accounts receivable and advances are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

(h) Loans to developing countries and International Financial Institutions

Loans to developing countries and International Financial Institutions for international development assistance are recorded at cost and are adjusted to reflect the concessionary terms of those loans made on a long-term, low interest or interest-free basis. The discount determined at the date of the issuance is amortized to revenue using a straight-line amortization. Any interest or service fees revenue is recognized with the passage of time and according to the terms of the loan agreement. However, when specific loan balances are deemed uncollectible, interest and service fees revenue ceases to be accrued on these loans. No new loans have been recorded by CIDA since April 1, 1986.

An allowance for valuation is further used to reduce the carrying value of the loans to amounts that approximate their net realizable value. The allowance is determined based on the Government's identification and evaluation of countries that have formally applied for debt relief, estimated probable losses that exist on the remaining portfolio, and changes in the economic conditions of sovereign debtors.

Any loans written off or forgiven are presented as an expense in the Statement of Operations under Transfer payments, in the fiscal year during which the required Parliamentary authority is obtained and the government of Canada writes off or forgives the loan amounts owing to CIDA. Should subsequent recoveries arise, they are presented in the revenue in the Statement of Operations in the fiscal year during which the monies are received.

(i) Investments and advances to International Financial Institutions

Investments and advances to International Financial Institutions are recorded at cost.

Investments

Investments consist of subscriptions to the share capital of a number of international financial institutions and are composed of both paid-in and callable capital. Subscriptions to international organizations do not provide a return on investment, but are repayable on termination of the organization or upon CIDA's withdrawal from the organization. Paid-in capital is made through a combination of cash payments and the issuance of non-interest bearing, non-negotiable notes payable to the organization. Callable share capital is composed of resources that are not paid to the banks, but act as a guarantee to allow them to borrow on international capital markets to finance their lending program.

Advances

Advances are issued to International Financial Institutions that use these funds to issue loans to developing countries at concessionary terms.

For these investments and advances to International Financial Institutions, an allowance is established based on their estimated realizable value.

(j) Contingent liabilities

Contingent liabilities are potential liabilities that 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. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the future-oriented financial statements.

(k) Foreign currency transactions

Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars using the rate of exchange in effect at year-end. Rates have been established by using estimates provided by external and reliable economic sources. The forecast gains and losses are presented in the future-oriented Statement of Operations.

(l) Tangible capital assets

All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the tangible capital asset as follows:

Accounting Policies - Tangible capital assets
Asset classAmortization period
Communication equipment3 years
Informatics equipment3 and 5 years
Computer software5 years
Other equipment5 years
Vehicles5 years

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

(m) Notes payable to International Financial Institutions

Notes payable to International Financial Institutions represent non-interest bearing, non-negotiable demand notes for share capital subscriptions and advances that are later presented for encashment according to the terms of the agreement. Amounts pertaining to notes already issued and the related future encashment obligations are presented in the future-oriented Statement of Financial Position under Notes payable to International Financial Institutions, while the amounts for notes payable that will be both issued and encashed under the terms of signed agreements are presented in note 15 on contractual obligations.

(n) Measurement uncertainty

The preparation of these future-oriented financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the future-oriented financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. Actual results could significantly differ from those estimated.

5. Parliamentary appropriations

CIDA receives its funding through expenditure authorities provided by Parliament. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, CIDA 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) Authorities requested

Authorities requested
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Authorities requested
Vote 25 — Operating expenditures221,887200,175
Vote 30 — Grants and contributions3,319,1563,124,604
Statutory amounts460,313395,836
Authorities available from previous years
Debt forgiveness384,594304,286
Authorities available for future years
Debt forgiveness(304,286)(260,098)
Forecast authorities available4,081,6643,764,803

Authorities presented reflect current forecasts of statutory items, approved initiatives included and expected to be included in Estimates documents and, when reasonable estimates can be made, estimates of amounts to be allocated from Treasury Board central votes.

(b) Reconciliation of net cost of operations to requested authorities

Reconciliation of net cost of operations to requested authorities
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Net cost of operations3,882,6943,903,879
Adjustments for items affecting net cost of operations but not affecting authorities:
Add (Less):
Amortization of tangible capital assets(2,311)(2,580)
Bad debts expense(327)(327)
Services provided without charge by other government departments(24,046)(22,818)
Refunds of prior years' expenditures14,13514,135
Gains on foreign exchange11,71521,836
Miscellaneous revenues3,0693,249
Discounts and allowance related to loan11,67115,120
Accrued liability for matching fund programs71,470-
Employee future benefits16,5673,765
Vacation pay and compensatory leave1,000414
Subtotal3,985,6373,936,673
Adjustments for items not affecting net cost of operations but affecting authorities:
Add (Less):
Acquisitions of tangible capital assets1,7411,440
Increase (decrease) in prepaid expenses7,978(217,498)
Pakistan's debt forgiveness80,30844,188
Total — Adjustments for items not affecting net cost of operations but affecting authorities90,027(171,870)
Forecast current year lapse6,000-
Forecast authorities available4,081,6643,764,803

6. Accounts receivable and advances

The following table presents details of accounts receivable and advances balances:

Details of accounts receivable and advances balances
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Receivables from external parties4,9484,700
Receivables from other government departments and agencies1,9741,870
Interest and service fees on loans569569
Employee advances4141
Subtotal7,5327,180
Less: Allowance for doubtful accounts on receivables from external parties, on interest and service fees on loans(3,520)(3,344)
Total4,0123,836

7. Loans to developing countries and International Financial Institutions

The following table presents details of loans to developing countries and International Financial Institutions:

Loans to developing countries and International Financial Institutions
(in thousands of dollars)Estimated
Results
2012
Planned
Results
2013
a) 30 year term, 7 year grace period, unsecured, 3 percent interest per annum, with the final repayment in March 2005:
Cuba9,5479,547
b) 35 year term, 4 year grace period, unsecured, 5 percent interest per annum, semi-annual interest repayments with first principal repayment due January 2017 and final repayment in July 2026:
Egypt44,99644,996
c) 50 year term, 10 year grace period, unsecured, non-interest bearing, with final repayments between March 2015 and September 2035:
African Development Bank1,094969
Algeria4,8924,465
Andean Development Bank1,4381,313
Argentina9375
Bolivia424382
Brazil146125
Central American Bank for Economic Integration421344
Chile539441
Colombia158132
Dominican Republic2,7062,470
Ecuador2,9322,627
Guatemala1,4811,381
Indonesia144,504135,283
Malaysia1,2311,168
Malta300275
Mexico1411
Morocco4,8644,379
Myanmar (Burma)8,3068,306
Pakistan302,261258,073
Paraguay9070
Peru2219
Philippines1,2581,160
Sri Lanka66,84862,523
Thailand14,55113,704
Tunisia38,69735,401
d) 50 year term, 13 year grace period, unsecured, non-interest bearing, with final repayments in March 2023:
Algeria13,69612,451
Subtotal667,509602,090
Less: Unamortized discount(418,563)(374,764)
Subtotal248,946227,326
Less: Allowance for valuation(123,765)(108,256)
Total125,181119,070

The grace period refers to interval from date of issuance of the loan to first repayment of loan principal.

Final repayment on Cuba loan was due in March 2005. In default of payment, the country has been in arrears since that date. No repayment is anticipated. The allowance for valuation of loans is adjusted to reflect this situation.

The loan with the Philippines was issued in Canadian dollars. However, it is reimbursable in Philippine pesos in equivalent Canadian dollar semi-annual instalments of $48,580 until September 2024. The instalments are converted to Philippine pesos using the foreign exchange rate in effect at the time of repayment.

In 2006-2007, the Government of Canada, as represented by the Canadian International Development Agency, entered into an agreement with the Government of Pakistan to forgive its outstanding $447,500,000 loan. In order to expire its debt obligation, the Government of Pakistan is required to make education sector investments over an estimated period of five years that are equivalent to the present value of its debt, at the date of the agreement, of $132,600,000. According to the agreement, Pakistan's debt is to be written off proportionally by the Canadian International Development Agency as the investments are made. Since 2009-2010, the Government of Pakistan's debt has been reduced by a total amount of $64,939,000. The Government of Pakistan investment in its education sector has been forecasted to $80,307,595 for 2011-2012 and $44,188,390 for 2012-2013.

8. Investments and advances to International Financial Institutions

The following table presents details of investments and advances to International Financial Institutions:

Investments and advances to International Financial Institutions
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Investments
African Development Bank135,235162,049
Asian Development Bank228,281260,064
Caribbean Development Bank22,92726,296
Inter-American Development Bank191,397199,421
Total investments577,840647,830
Advances
African Development Fund2,323,3312,429,507
Asian Development Bank-Special27,02727,027
Asian Development Fund2,115,1262,162,816
Caribbean Development Bank — Agricultural Development Fund2,0002,000
Caribbean Development Bank — Commonwealth Caribbean Regional3,9463,820
Caribbean Development Bank — Special266,771283,961
Global Environment Facility Trust Fund616,820671,570
Inter-American Development Bank — Fund for Special Operations334,310328,619
International Bank for Reconstruction and Development19,73019,100
International Fund for Agriculture Development304,383304,383
International Monetary Fund10,82110,476
Montreal Protocol Multilateral Fund87,66386,822
Multilateral Investment Fund49,30849,308
Total advances6,161,2366,379,409
Subtotal investments and advances6,739,0767,027,239
Less: Allowance for valuation(6,739,076)(7,027,239)
Total--

The allowance for valuation reduces the net realizable value of the investments and advances to International Financial Institutions to zero, as it is not expected that CIDA will recover these investments and advances in the future.

9. Canada Investment Fund for Africa (CIFA)

The CIFA is a joint public-private sector initiative designed to provide risk capital for private investments in Africa that generate growth. The CIFA is a direct response to the New Partnership for Africa's Development (NEPAD) and the G8 Africa Action Plan. The main objectives of the CIFA are to optimize public-private investment in the Fund, to confer a beneficial development impact on Africa by way of increased foreign direct investment and to optimize the beneficial impact of the Fund's activities on Canadian interests.

The Government of Canada is a limited partner in the CIFA and its commitment towards the Fund was subject to matching funds of other investors and was to be equal to the lesser of: (i) $100 million or (ii) the aggregated commitments of all other limited partners of the partnership. The investment period in the CIFA ended January 1, 2009. From there on, and until the term of the partnership is reached on December 31, 2013, the Canadian International Development Agency will only receive income and returns of capital. At the end of 2010-2011, the Canadian International Development Agency received capital reimbursement from CIFA amounting to $13,212,000 and investment income of $5,211,000. For the purpose of these future-oriented Financial Statements, the capital reimbursement and the investment income have been estimated, respectively, to $6,396,000 and to $405,000 for both years.

The fair value of the CIFA has declined over the last years. In accordance with Public Sector Accounting Standards, an allowance for valuation of $28,000,000 was recorded in 2010-2011.

The following table presents details of the Canada Investment Fund for Africa. The CIFA is presented at cost.

Canada Investment Fund for Africa (CIFA)
(in thousands of dollars)Estimated Results 2012Planned Results 2013
CIFA opening balance91,00585,008
Returns of capital(6,396)(6,396)
Capitalized management fees399399
Subtotal85,00879,011
Less: Allowance for valuation(28,000)(28,000)
CIFA closing balance57,00851,011

10. Tangible capital assets

Tangible capital assets
(in thousands of dollars)CostAccumulated AmortizationNet Book Value
Capital asset ClassOpening balanceAcquisitionsDisposals and write-offsClosing balanceOpening balanceAmortizationDisposals and write-offsClosing balance20122013
Communication Equipment845--845845--845--
Informatic Equipment14,428705-15,13311,683770-12,4532,7452,680
Computer Software8,854648-9,5021,9241,763-3,6876,9305,815
Other Equipment1,61317-1,6301,56427-1,5914939
Vehicles15770-22712720-1473080
Total25,8971,440-27,33716,1432,580-18,7239,7548,614

11. Accounts payable and accrued liabilities

The following table presents details of accounts payable and accrued liabilities:

Accounts payable and accrued liabilities
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Accounts payable to external parties837,435778,928
Accounts payable to other government departments and agencies4,7274,397
Subtotal842,162783,325
Accrued salaries, wages and employee benefits1,1721,112
Total843,334784,437

12. Notes payable to International Financial Institutions

The following table presents details of notes payable to International Financial Institutions:

Notes payable to International Financial Institutions
(in thousands of dollars)Estimated
Results
2012
Planned
Results
2013
Advances
Global Environment Facility Trust Fund2,540-
Total2,540-

The notes encashment have been estimated to $285,613,000 for the year 2011-2012 and to $248,654,000 for the year 2012-2013.

13. Employee future benefits

(a) Pension benefits:

CIDA's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. 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 the Canada/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Agency contribute to the cost of the Plan. The forecast expenses are $19,447,180 in 2011-2012 and $17,948,135 in 2012-2013, representing approximately 1.9 times the contributions by employees.

CIDA'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.

(b) Severance benefits:

CIDA provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:

Severance benefits
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Accrued benefit obligation, beginning of year38,63522,068
Expense for the year7403,115
Benefits paid during the year(17,307)(6,880)
Accrued benefit obligation, end of year22,06818,303

14. Contingent liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown. They are grouped into two categories as follows:

(a) Callable share capital:

CIDA is liable for callable share capital in certain international organizations that could require future payments to those organizations. Callable share capital is composed of resources that are not paid to the organizations but act as a guarantee to allow them to borrow on international capital markets to finance their lending program. Callable share capital would only be utilized in extreme circumstances to repay unrecoverable loans, should the organization's reserves not be sufficient. Callable share capital has never been drawn on by the organizations. For this reason, despite the difficult international economic environment, these contingent liabilities represent no additional risk to the Agency. The callable share capital is estimated at $21.3 billion for 2011-2012 and at $20.6 billion for 2012-2013 and no provision was recorded for this amount.

(b) Claims and litigation:

Claims have been made against CIDA in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. As at the date of the preparation of these future-oriented financial statements, legal proceedings for claims totalling approximately $5,153,000 are pending.

15. Contractual obligations

The nature of CIDA's activities can result in some large multi-year contracts and obligations whereby CIDA 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:

Contractual obligations
(in thousands of dollars)20142015201620172018 and thereafterTotal
Transfer payments847,806509,033142,01065,86916,6141,581,332
Encashment of notes by International Financial Institutions246,099112,82147,0863,796-409,802
Total1,093,905621,854189,09669,66516,6141,991,134

16. Related party transactions

CIDA is related as a result of common ownership to all Government departments, agencies and Crown corporations. CIDA enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Agency will receive common services that will be obtained without charge from other Government departments as disclosed below.

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

During the year, CIDA receives 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 in CIDA's Future-oriented Statement of Operations as follows:

Common services provided without charge by other government departments
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Employer's contribution to the health and dental insurance plans13,93512,623
Accommodation9,1409,215
Legal services911925
Workers' compensation6055
Total24,04622,818

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 Works and Government Services Canada are not included in CIDA's Future-oriented Statement of Operations.

(b) Other transactions with related parties

Other transactions with related parties
(in thousands of dollars)Estimated Results 2012Planned Results 2013
Expenses — Other Government departments and agencies170,179158,290

17. Segmented information

Presentation by segment is based on CIDA's program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 4. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

Details of segmented information
(in thousands of dollars)2012 Total2013
Global engagement and strategic policyLow-income countriesFragile states and crisis affected communitiesMiddle-income countriesCanadian engagement for developmentInternal servicesTotal
Transfer payments
Other countries and international organizations3,649,5361,247,5871,073,965682,276366,080306,145-3,676,053
Operating expenses
Salaries and employee benefits193,63317,85636,54714,63914,48413,03688,818185,380
Loss on foreign exchange11,71521,836-----21,836
Professional and special services26,5062,6345,3912,1592,1371,92313,10227,346
Travel10,2101,0332,1168488397555,14310,734
Rental and accommodation11,3621,1352,3209299198275,63811,768
Repair and maintenance2,9923517192882842561,7463,644
Communication1,3961452961191171067211,504
Amortization of tangible capital assets2,311-----2,5802,580
Other1,6441974031621601438811,946
Total operating expenses261,76945,18747,79219,14418,94017,046118,629266,738
Total expenses3,911,3051,292,7741,121,757701,420385,020323,191118,6293,942,791
Revenues
Gain on foreign exchange11,71521,836-----21,836
Amortization of discount on loans13,8277917-13,731--13,827
Miscellaneous revenues3,069-405-2,837-73,249
Total Revenues28,61121,915422-16,568-738,912
Net cost from continuing operations3,882,6941,270,8591,121,335701,420368,452323,191118,6223,903,879

18. Adoption of new accounting policies

On April 1, 2012, CIDA will adopt the revised CICA PS3410 on Government Transfers prospectively. The major change in the revised standard is the recording of transfer payments made in advance as expenses instead of assets on the Statement of Financial Position. As a result, all transfer payments are recognized as expenses on the Statement of Operations.

The adoption of the revised standard has not been accounted for retroactively. Consequently, estimated results for 2011-2012 have not been restated.