Future-Oriented Financial Statements 2013-2014

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 December 17, 2012, and reflect the plans described in the Report on Plans and Priorities.

Original signed by Margaret Biggs

____________________________
Margaret Biggs
President

Gatineau, Canada
January 31, 2013
Original signed by Sue Stimpson

____________________________
Sue Stimpson
Chief Financial Officer

Canadian International Development Agency
Future-oriented Statement of Financial Position (unaudited)
As at March 31
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Liabilities
Accounts payable and accrued liabilities (note 6)973,730879,324
Vacation pay and compensatory leave6,9346,490
Employee future benefits (note 7)18,76017,019
Total net liabilities999,424902,833
Financial assets
Due from Consolidated Revenue Fund972,894878,569
Accounts receivable and advances (note 8)5,4494,752
Loans receivable (note 9)527,036525,858
Investments and advances to International Financial Institutions (IFI) (note 10)7,131,2867,465,198
Allowance for valuation of investments and advances to IFI (note 10)(7,131,286)(7,465,198)
Canada Investment Fund for Africa (note 11)38,741
Total gross financial assets1,544,1201,409,179
Financial assets held on behalf of Government
Accounts receivable and advances (note 8)(941)(941)
Loans receivable (note 9)(527,036)(525,858)
Investments and advances to IFI (note 10)(7,131,286)(7,465,198)
Allowance for valuation of investments and advances to IFI (note 10)7,131,2867,465,198
Canada Investment Fund for Africa (note 11)(38,741) 
Total financial assets held on behalf of Government(566,718)(526,799)
Total net financial assets977,402882,380
Departmental net debt 22,02220,453
Non-financial assets
Prepaid expenses331331
Tangible capital assets (note 12)5,0842,799
Total non-financial assets5,4153,130
Departmental net financial position16,60717,323

Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to November 30, 2012.

Contractual obligations (note 13)
Contingent liabilities (note 14)

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

Canadian International Development Agency
Future-oriented Statement of Operations and Departmental Net Financial Position (unaudited)
For the Year Ended March 31
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Expenses
Global engagement and strategic policy1,147,1371,058,155
Low-income countries1,075,440918,350
Fragile states and crisis-affected communities705,962689,904
Middle-income countries364,321337,975
Canadian engagement for development330,002268,586
Internal services116,807101,993
Expenses incurred on behalf of Government(10,351)(5,751)
Total expenses3,729,3183,369,212
Revenues
Gain on foreign exchange10,3515,751
Amortization of discount on loans13,82713,827
Miscellaneous revenues4,7565,145
Revenues earned on behalf of Government(28,934)(24,723)
Total revenues--
Net cost of operations before government funding and transfers3,729,3183,369,212
Less: Government funding and transfers
Net cash provided by Government3,765,3893,440,580
Change in due from Consolidated Revenue Fund(251,383)(94,325)
Services provided without charge by other government departments (note 15)23,46722,241
Net cost of operations after government funding and transfers191,845716
Departmental net financial position—Beginning of year(175,238)16,607
Departmental net financial position—End of year16,60717,323

Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to November 30, 2012.

Segmented information (note 16)

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

Canadian International Development Agency
Future-oriented Statement of Change in Departmental Net Debt (unaudited)
For the Year Ended March 31
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Net cost of operations after government funding and transfers191,845716
Change due to tangible capital assets
Acquisitions of tangible capital assets8767
Amortization of tangible capital assets(2,333)(2,352)
Total change due to tangible capital assets(2,246)(2,285)
Change due to prepaid expenses(204,961)-
Net decrease in departmental net debt(15,362)(1,569)
Departmental net debt—Beginning of year37,38422,022
Departmental net debt—End of year22,02220,453

Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to November 30, 2012.

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

Canadian International Development Agency
Future-oriented Statement of Cash Flow (unaudited)
For the year ended March 31
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Operating activities
Net cost of operations before government funding and transfers3,729,3183,369,212
Non-cash items:
Amortization of tangible capital assets(2,333)(2,352)
Services provided without charge by other government departments (note 15)(23,467)(22,241)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances173(697)
Decrease in prepaid expenses(204,961)-
Decrease in accounts payable and accrued liabilities259,25394,406
Decrease in vacation pay and compensatory leave1,350444
Decrease in notes payable to IFI2,540-
Decrease in accrued liability for Matching Fund program3,225-
Decrease (increase) in employee future benefits(335)1,741
Decrease in other liabilities539-
Cash used in operating activities3,765,3023,440,513
Capital investing activities
Acquisitions of tangible capital assets8767
Cash used in capital investing activities8767
Net cash provided by Government of Canada3,765,3893,440,580

Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to November 30, 2012.

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

1. Authority and objectives

The Canadian International Development Agency (CIDA or the Agency) 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 aid resources effectively and accountably to achieve meaningful, sustainable development results, and to engage in policy development in Canada and internationally, enabling Canada's effort to realize its development objectives. CIDA fulfills its mandate through six main programs:

  • 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 features programming that is 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. It also features programming that is medium to long term to create conditions for sustainable economic growth and building 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 low-income category face pervasive poverty and limited institutional capacity, but have broadly stable governance and public security. These countries generally require a high level of assistance and have limited resilience to respond to vulnerabilities and external shocks, as well as limited ability to attend to the human development needs of their populations. Programming under this program 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 to ensure country institutions can sustain the benefits of development programs. CIDA works with other donors, the private sector, civil society organizations and ministries of recipient governments. Engagement is 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 designed to better align to country priorities and systems, and ensure coordination amongst donors and harmonization of procedures.
  • Middle-income countries
    Countries within the 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 assistance than low-income countries, but may still have a large proportion of their population living in poverty. These countries often have stark disparities along geographic, gender, ethnic, or urban-rural lines, as well as pockets of deep poverty. There is often low productivity, lagging competitiveness, weak political accountability and significant discrimination and marginalization. Main areas of programming under this program focus on delivering targeted technical assistance to foster equal access to economic opportunities and 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.
  • Global engagement and strategic policy
    Achieving international development outcomes requires leadership to influence global policy direction and investments through international partners to advance Canadian priorities. Multilateral/international organizations and global initiatives tackle global problems (e.g., infectious diseases), and provide a governance mechanism in areas such as humanitarian assistance. They also provide fora for the establishment of the global development agenda. At the same time they provide economies of scale and of scope as well as significant expertise and capacity on the ground. Activities under this program aim at: delivering concrete results by shaping and investing in multilateral and international institutions partners' policies and programs throughout the world; they also demonstrate a commitment to building effective partnerships and exerting influence to shape international development policy in Canada and globally in order to advance Canada's humanitarian and development assistance objectives.
  • Canadian engagement for development
    CIDA achieves development results by focusing on purpose-driven, cost-effective initiatives that draw on the expertise, networks, and opportunities available to Canadian organizations. It also seeks to expand the number of Canadians engaged in international development by supporting outreach and education activities. Programming under this program involves co-investment in high impact development proposals that align with Canada's development priorities. Through calls for proposals, CIDA is able to draw upon the Canadian organizations such as civil society organizations, academic institutions, and professional associations that are best suited to help deliver on Canada's development objectives. Canadian organizations in turn work with partner country counterparts to deliver development results on the ground.
  • Internal services
    This program provides support services to CIDA programming for the delivery of the Canadian assistance 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 information in the estimated results for fiscal year 2012-2013 is based on actual results as at November 30, 2012 and forecasts for the remainder of the fiscal year. Estimated year-end information for 2012-2013 is used as the opening position for 2013-2014 planned results, and forecasts have been made for the planned results for the 2013-2014 fiscal year.

The main assumptions underlying the forecasts 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 2012-2013 is used as the opening position for the 2013-2014 forecasts.

These assumptions are adopted based on approvals received on December 17, 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 2012-2013 and for 2013-2014, 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 capital assets 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 using the Government'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

CIDA 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 Future-oriented Statement of Operations and Departmental Net Financial Position and in the Future-oriented 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

The Agency 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 authorities 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.

Revenues that are non-respendable are not available to discharge the Agency's liabilities. While the Deputy Head is expected to maintain accounting control, she 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 in reduction of the entity's gross revenues.

(e) Expenses

Expenses are recorded on the accrual basis

Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses 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. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.

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 estimated cost.

Expenses related to assets that are not available to discharge the Agency's liabilities are considered to be incurred on behalf of the Government of Canada.

(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 departmental 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.
  2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

(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.

Accounts receivable and advances that are not available to discharge the Agency's liabilities are considered to be held on behalf of the Government of Canada.

(h) Loans receivable

Loans to developing countries and IFI for international development assistance and transfer payments recoverable 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.

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 and Departmental Net Financial Position, 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 as a revenue in the Statement of Operations and Departmental Net Financial Position, in the fiscal year during which the monies are received.

Loans receivable are not available to discharge the Agency's liabilities and are therefore considered to be held on behalf of the Government of Canada.

(i) Investments and advances to International Financial Institutions (IFI)

Investments and advances to IFI are recorded at cost.

Investments consist of subscriptions to the share capital of a number of IFI 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 are issued to IFI that use these funds to issue loans to developing countries at concessionary terms.

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

Investments and advances to IFI and related allowance are not available to discharge the Agency's liabilities and are therefore considered to be held on behalf of the Government of Canada.

(j) Canada Investment Fund for Africa (CIFA)

The CIFA is designed to provide risk capital for private investments in Africa that generate growth. The CIFA is presented at cost.

The investment period ended on January 2009. Returns on investment generated by the CIFA are recorded as revenues while the return of capital and applicable management fees are capitalized in the investment. An allowance was established based on the estimated realizable value of the fund.

CIFA is not available to discharge the Agency's liabilities and is therefore considered to be held on behalf of the Government of Canada.

(k) Tangible capital assets

All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. The Agency does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian reserves and museum collections.

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
ClassAmortization period
Communication equipment3 years
Computer equipment3-5 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.

(l) Notes payable to IFI

Notes payable to IFI 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 Statement of Financial Position under notes payable to IFI, while the amounts for notes payable that will be both issued and encashed under the terms of signed agreements are presented in note 13 on contractual obligations.

(m) 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 if an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(n) 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. Gains and losses resulting from foreign currency transactions are included in the gain on foreign exchange and loss on foreign exchange in the Future-oriented Statement of Operations and Departmental Net Financial Position.

(o) 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. The most significant items where estimates are used are in determining the allowance for doubtful accounts, allowance for loans, useful life of tangible capital assets, contingent liabilities and liability for employee future benefits. 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.

5. Parliamentary authorities

CIDA receives most of its funding through annual parliamentary authorities. Items recognized in the Future-oriented Statement of Operations and Departmental Net Financial Position and the Future-oriented 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) Reconciliation of net cost of operations to authorities requested

Reconciliation of net cost of operations to authorities requested
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Net cost of operations before government funding and transfers3,729,3183,369,212
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets(2,333)(2,352)
Services provided without charge by other government departments(23,467)(22,241)
Refunds of prior years' expenditures12,14812,148
Increase (decrease) in allowance related to loans(1,396)1,324
Decrease in notes payable to IFI2,540-
Decrease in accrued liability for Matching Fund program3,225-
Decrease in vacation pay and compensatory leave1,350444
Decrease (increase) in employee future benefits(335)1,741
Total items affecting net cost of operations but not affecting authorities(8,268)(8,936)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets8767
Decrease in prepaid expenses(204,961)-
Transfer payments recoverable issued on behalf of Government225,000-
Pakistan's debt forgiveness on behalf of Government40,86563,535
Loss on foreign exchange on behalf of Government10,3515,751
Total items not affecting net cost of operations but affecting authorities71,34269,353
Forecast authorities available3,792,3923,429,629

(b) Authorities requested

Authorities requested
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Authorities requested
Vote 25 - Operating expenditures197,491173,520
Vote 30 - Grants and contributions3,149,6882,819,267
Statutory amounts404,348373,307
Authorities available from previous years
Debt forgiveness303,048262,183
Authorities available for future years
Debt forgiveness(262,183)(198,648)
Forecast authorities available3,792,3923,429,629

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.

6. Accounts payable and accrued liabilities

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

Accounts payable and accrued liabilities
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Accounts payable - Other government departments and agencies2,9432,656
Accounts payable - External parties969,725875,177
Total accounts payable972,668877,833
Accrued liabilities1,0621,491
Total accounts payable and accrued liabilities973,730879,324

7. 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 $17,823,000 in 2012-2013 and $16,338,000 in 2013-2014, representing approximately 1.8 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 salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities.

As part of collective agreement negotiations with certain employee groups, changes to conditions of employment for executives, and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2011-2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

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

Severance benefits
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Accrued benefit obligation - Beginning of year18,42518,760
Expense for the year7,8182,001
Benefits paid during the year(7,483)(3,742)
Accrued benefit obligation - End of year18,76017,019

8. Accounts receivable and advances

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

Accounts receivable and advances
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Receivables - External parties6,3205,704
Receivables - Other Federal Government departments and agencies833752
Interest and service fees on loans941941
Employee advances33
Subtotal8,0977,400
Allowance for doubtful accounts on receivables from external parties and on interest and service fees on loans(2,648)(2,648)
Gross accounts receivable and advances5,4494,752
Accounts receivable held on behalf of Government(941)(941)
Net accounts receivable and advances4,5083,811

9. Loans receivable

The following table presents details of CIDA's loans and transfer payments recoverable to developing countries and IFI:

Loans receivable
(in thousands of dollars)Estimated
Results
2013
Planned
Results
2014
(a) 30-year term, 7-year grace period, unsecured, 3.0 percent interest per annum, with the agreed final repayment in March 2005:
Cuba9,5479,547
(b) 35-year term, 4-year grace period, unsecured, 5.0 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 Bank969844
Algeria4,4644,037
Andean Development Corporation1,3131,188
Argentina7556
Bolivia382339
Brazil125105
Central American Bank for Economic Integration344268
Chile441343
Colombia132105
Dominican Republic2,4702,234
Ecuador2,6282,323
Guatemala1,3811,281
Indonesia135,282125,516
Malaysia1,1681,105
Malta275250
Mexico118
Morocco4,3793,994
Myanmar (Burma)8,3068,306
Pakistan260,158196,623
Paraguay7050
Peru1915
Philippines1,1601,063
Sri Lanka62,52358,197
Thailand11,06810,393
Tunisia35,40132,106
(d) 50-year term, 13-year grace period, unsecured, non-interest bearing, with the final repayment in March 2023:
Algeria12,45111,206
Subtotal601,538516,498
Less:
Unamortized discount(376,178)(319,256)
Allowance for valuation(108,891)(87,127)
Subtotal - Loans to developing countries and IFI116,469110,115
(e) Transfer payments recoverable525,000525,000
Less: Unamortized discount(114,433)(109,257)
Subtotal - Transfer payments recoverable410,567415,743
Total loans receivable527,036525,858

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 installments of $48,580 until September 2024. The installments 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 CIDA, 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 of $132,600,000. According to the agreement, Pakistan's debt is to be written-down proportionally by CIDA as the investments are made. Since 2009-2010, the Government of Pakistan's debt has been reduced by a total amount of $146,485,000. The Government of Pakistan's investment in its education sector has been forecasted to $40,865,000 for 2012-2013 and $63,535,000 for 2013-2014.

Transfer payments recoverable relate to contributions made to outside parties, which are repayable based on conditions specified in the contribution agreement that have come into being.

10. Investments and advances to IFI

The following table presents details of CIDA's investments and advances to IFI:

Investments and advances to International Financial Institutions
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Investments
African Development Bank192,798223,250
Asian Development Bank263,686300,369
Caribbean Development Bank26,79130,715
Inter-American Development Bank204,338219,366
Total investments687,613773,700
Advances
African Development Fund2,431,6822,540,783
Asian Development Bank-Special27,02727,027
Asian Development Fund2,162,8152,210,515
Caribbean Development Bank — Agricultural Development Fund2,0002,000
Caribbean Development Bank — Commonwealth Caribbean Regional3,9363,966
Caribbean Development Bank — Special Development Fund284,325302,004
Global Environment Facility Trust Fund671,570726,320
Inter-American Development Bank — Fund for Special Operations334,723336,078
International Bank for Reconstruction and Development19,68019,830
International Fund for Agriculture Development354,383366,883
International Monetary Fund10,79410,876
Montreal Protocol Multilateral Fund91,43095,908
Multilateral Investment Fund49,30849,308
Total advances6,443,6736,691,498
Subtotal investments and advances7,131,2867,465,198
Less: Allowance for valuation(7,131,286)(7,465,198)
Total--

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

11. Canada Investment Fund for Africa (CIFA)

The Canada Investment Fund for Africa (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 investments in the Fund, to confer a beneficial development impact on Africa by way of increased foreign direct investments 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 mechanism 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, CIDA will only receive income and returns of capital. Since its inception, the Agency received capital reimbursement from CIFA amounting to $26.5 million and investment income of $5.7 million. For the purpose of these Future-oriented financial statements, the capital reimbursement and the investment income have been estimated, respectively, to $12,443,000 and to $978,000 for 2012-2013 and to $40,000,000 and to $978,000 for 2013-2014.

The fair value of the CIFA has declined over the last five years. An allowance for valuation of $28.0 million was recorded in 2010-2011. The net residual value of the investment as of March 31, 2012 is $50.5 million.

The following table presents details of the CIFA:

Canada Investment Fund for Africa (CIFA)
(in thousands of dollars)Estimated Results 2013Planned Results 2014
CIFA opening balance78,49666,741
Returns of capital(12,442)(40,000)
Capitalized management fees6871,259
Subtotal66,74128,000
Less: Allowance for valuation(28,000)(28,000)
Total38,741-

12. Tangible capital assets

Tangible capital assets
(in thousands
of dollars)
CostAccumulated AmortizationNet Book Value
Asset ClassOpening balanceAcquisitionsDisposals and write-offsClosing balanceOpening balanceAmortizationDisposals and write-offsClosing balanceEstimated Results 2013Planned Results 2014
Communication Equipment142--142142--142--
Computer Equipment521--52144733-4807441
Computer Software9,175--9,1754,2722,248-6,5204,9032,655
Other Equipment1,51417-1,5311,48432-1,5163015
Vehicles22750-27715039-1897788
Total11,57967-11,6466,4952,352-8,8475,0842,799

13. 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)
20152016201720182019 and thereafterTotal
Transfer payments740,136352,048152,74444,34915,5121,304,789
Encashment of notes by IFI97,36847,0863,796--148,250
Total837,504399,134156,54044,34915,5121,453,039

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. For the purpose of these Future-oriented financial statements, the callable share capital is estimated at $16.2 billion for both years and no provision was recorded for any part of 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 $14,691,000 are pending.

15. 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 received common services which were obtained without charge from other government departments as disclosed below.

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

During the year, CIDA 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 in CIDA's Statement of Operations and Departmental Net Financial Position as follows:

Common services provided without charge by other government departments
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Employer's contribution to the health and dental insurance plans13,16811,919
Accommodation9,5259,525
Legal services713736
Workers' compensation6161
Total23,46722,241

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 and audit services provided by the Office of the Auditor General are not included in CIDA's Future-oriented Statement of Operations and Departmental Net Financial Position

(b) Other transactions with related parties

Other transactions with related parties
(in thousands of dollars)Estimated Results 2013Planned Results 2014
Expenses — Other Government departments and agencies137,031123,671

These expenses exclude common services provided without charges, which are already disclosed in (a).

16. 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:

Segmented information
(in thousands of dollars)Global engagement and strategic policyLow-income countriesFragile states and crisis- affected communitiesMiddle-income countriesCanadian engagement for developmentInternal servicesEstimated Results 2014 TotalPlanned Results 2013 Total
Transfer payments
Other countries and international organizations1,028,780876,948672,781318,336254,010-3,150,8553,482,554
Operating expenses
Salaries and employee benefits18,18331,86713,18015,11611,21977,051166,616185,146
Loss on foreign exchange5,751-----5,75110,351
Professional and special services2,5304,4341,8342,1031,56110,72123,18327,490
Travel1,0431,8287568676434,4199,55611,185
Accommodation1,2962,2719391,0778005,49211,87512,183
Repair and maintenance3385922452812081,4313,0953,794
Communication37652731231563392,970
Amortization of tangible capital assets-----2,3522,3522,333
Other1973451421641223711,3411,663
Expenses incurred on behalf of Government(5,751)-----(5,751)(10,351)
Total operating expenses23,62441,40217,12319,63914,576101,993218,357246,764
Total expenses1,052,404918,350689,904337,975268,586101,9933,369,2123,729,318
Revenues
Gain on foreign exchange5,751-----5,75110,351
Amortization of discount on loans7918-13,730--13,82713,827
Miscellaneous revenues1,526986-2,617885,1454,756
Revenues earned on behalf of Government(7,356)(1,004)-(16,347)(8)(8)(24,723)(28,934)
Total revenues--------
Net cost of operations1,052,404918,350689,904337,975268,586101,9933,369,2123,729,318