Financial statements (unaudited) for the year ended March 31, 2024

© His Majesty the King in Right of Canada, as represented by the Canadian Radio-television and Telecommunications Commission, 2024

Catalogue No. BC9-35E-PDF
ISSN 2564-4572

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, 2024, and all information contained in these financial statements rests with the management of the Canadian Radio-television and Telecommunications Commission (CRTC). 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 CRTC’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the CRTC’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 CRTC 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.

The CRTC will be subject to periodic Core Control Audits performed by the Office of the Comptroller General (OCG) and will use the results of such audits to adhere to the Treasury Board Policy on Financial Management.

In the interim, the CRTC has undertaken a risk-based assessment of the system of ICFR for the year ended March 31, 2024, in accordance with the Treasury Board Policy on Financial Management, and the results and action plan are summarized in the annex.

The financial statements of the CRTC have not been audited.

Contingent liabilities (note 9)
The accompanying notes form an integral part of these financial statements.

Segmented information (note 11)
The accompanying notes form an integral part of these financial statements.

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

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

1. Authority and objectives

The CRTC was created by Parliament in 1968 under the Canadian Radio-television and Telecommunications Commission Act. The CRTC reports to Parliament through the Minister of Canadian Heritage.

The CRTC is vested with the authority to regulate and supervise all aspects of the Canadian broadcasting system, as well as the telecommunications services providers and common carriers that come under federal jurisdiction. The CRTC’s powers in the area of broadcasting regulation derive from the Broadcasting Act and the Accessible Canada Act. Its powers over telecommunications come from the Telecommunications Act and from various “special acts” of Parliament passed for specific telecommunications companies. The CRTC also has specific responsibilities under Canada’s Anti-Spam Legislation for investigation and enforcement activities to counter spam and malware as well as under the Canada Elections Act to establish and maintain a Voter Contact Registry. Further, the CRTC is responsible for implementing and overseeing the mandatory bargaining framework between news businesses and online platforms that make news content available in Canada as established under the Online News Act.

The following are the program descriptions that support the CRTC Core Responsibility to regulate and supervise the communications system:

Canadian content is created

As Canada’s broadcasting regulator, the CRTC makes regulations to promote the creation of Canadian audio and audiovisual content following public consultations. These regulations ensure that Canadians have access to compelling creative content from diverse sources on a variety of platforms.

Canadians are connected to world-class communications services

The CRTC continued its work to improve Canadians’ access to affordable, high-quality and reliable Internet and cellphone services. The CRTC also took measures to ensure that Canadians benefit from increased choice and have access to services that meet their diverse needs. These and other steps taken by the CRTC are aimed at ensuring that consumers are empowered when deciding the service that is best for them.

Canadians are protected within the communications system

An important part of the CRTC’s role as Canada’s telecommunications regulator is ensuring that Canadians can trust their Internet, cellphone and telephone services. It is also important for Canadians to be able to rely on services like 9-1-1 and 9-8-8 for their personal safety and welfare.

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 ten distinct services that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. These services are: Acquisition Management Services, Communications Services, Financial Management Services, Human Resources Management Services, Information Management Services, Information Technology Services, Legal Services, Materiel Management Services, Management and Oversight Services, Real Property Management Services.

2. Summary of significant accounting policies

These financial statements are prepared using the CRTC’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:

1. Parliamentary authorities and vote-netting

   The CRTC is financed in part by the Government of Canada through Parliamentary authorities (e.g. Statutory Vote for Employee Benefits Plans [EBP], Budgetary Vote for the Canada’s Anti-Spam Legislation and Voter Contact Registry activities) and the balance by vote-netted fees it collects from the regulated industries. Vote-netting is a means of funding selected programs or activities wherein Parliament authorizes a department to apply revenues collected from fee payers towards costs directly incurred for specific activities. The CRTC has the authority to use a portion of: a) the Part I licence fees collected from broadcasters; b) the annual telecommunications fees collected from telecommunications carriers; and c) the unsolicited telecommunications fees from telemarketers to finance the regulatory costs it incurs in discharging its statutory responsibilities under the Broadcasting Act and Telecommunications Act (i.e. respendable revenue). The balance of these three fees recovers the costs for items funded through authorities (e.g. EBP) and costs incurred by other government departments on the CRTC’s behalf and are classified as non-respendable revenue. Part II broadcasting licence fees are entirely classified as non-respendable revenue. The Online Streaming Act (Bill C-11) received Royal Assent April 27, 2023. With the adoption of Bill C-11, the Part II licence fees have been abolished.

   The accounting of fees collected and the charges to the authorities in a given year 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 Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through fee collection and 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 Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2023-24 Departmental Plan. Planned results are not presented in the “Government funding and transfers" section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2023-24 Departmental Plan.

2. Net cash provided by Government

   The CRTC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the CRTC is deposited to the CRF, and all cash disbursements made by the CRTC are paid from the CRF. The net cash provided to Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.

3. 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 CRTC is entitled to draw from the CRF without further authorities to discharge its liabilities.

4. Revenues

   The CRTC collects fees under the authority of the Broadcasting Act and Telecommunications Act and the regulations made pursuant to these Acts, namely the Broadcasting Licence Fee Regulations, 1997, the Telecommunications Fee Regulations, 2010 and the Unsolicited Telecommunications Fees Regulations. The CRTC’s regulatory fees recover the CRTC’s costs associated with its program activities. The Part II licence fees are regulatory charges imposed in relation to a broadcaster’s privilege (i.e. rights and privileges). The Online Streaming Act (Bill C-11) received Royal Assent April 27, 2023. With the adoption of Bill C-11, the Part II licence fees have been abolished. These fees recover part of the Government of Canada’s substantial annual investment in the Canadian broadcasting system. Miscellaneous revenues are mainly comprised of revenues received as a result of administrative monetary penalties (AMPs) imposed due to contraventions of the Telecommunications Act relating to the National Do Not Call List (DNCL) and Canada’s Anti-Spam Legislation (CASL) and other revenues such as: interest on overdue accounts receivable for CRTC broadcasting licence fees, telecommunications fees and AMPs, miscellaneous non tax revenue (e.g. access to information fees), and gain on disposal of capital and non-capital assets to outside parties. All revenue from AMPs is recorded as non-respendable non-tax revenue.

   Revenues from regulatory fees are recognized based on the services provided in the year.

   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 CRTC's liabilities. While the Chairperson and Chief Executive Officer 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 as a reduction of the entity's gross revenues.

5. Expenses

   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, and workers’ compensation are recorded as operating expenses at their carrying value.

6. Employee future benefits
   1. Pension benefits - Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The CRTC’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The CRTC’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 - 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.

7. 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.

8. Tangible capital assets

   All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost.

   The CRTC 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 asset as follows:

   Asset Class	Amortization period
   Informatics equipment	3 years
   Informatics software	5 years
   Vehicles	5 years
   Equipment	5 years
   Other equipment	10 years
   Leasehold improvements	25 years

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

9. 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.

10. 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, allowance for doubtful accounts, 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.

11. Related party transactions

    Related party transactions are recorded at the exchange amount.

3. Parliamentary authorities

The CRTC receives most of its funding through fees assessed against the regulated industries, as well as a portion from annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental 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 CRTC 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:

4. Accounts payable and accrued liabilities

The following table presents details of the CRTC’s accounts payable and accrued liabilities (in thousands of dollars):

5. 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 these expenditures are incurred or in which the service is performed. Details of the transactions related to this account are as follows (in thousands of dollars):

6. Employee future benefits

(a) Pension benefits

The CRTC'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 CRTC 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 2023-24 expense amounts to $5.9 million ($5.4 million in 2022-23). For Group 1 members, the expense represents approximately 1.02 times (1.02 times in 2022-23) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2022-23) the employee contributions.

The CRTC'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 CRTC’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, 2024, 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):

7. Accounts receivable and advances

The following table presents details of the CRTC’s accounts receivable and advances balances (in thousands of dollars):

8. Tangible capital assets (in thousands of dollars)

9. Contingent liabilities

Claims have been made against the CRTC in the normal course of operations. These claims for which the outcomes are not determinable and reasonable estimates can be made by management amount to approximately $30,000 at March 31, 2024.

10. Related party transactions

The CRTC is related as a result of common ownership to all government departments, agencies, and Crown corporations. The CRTC 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 CRTC received services without charge from certain common service organizations, related to accommodation, the employer's contribution to the health and dental insurance plans and worker’s compensation coverage. These services provided without charge have been recorded at the carrying value in the CRTC's Statement of Operations and Departmental Net Financial Position as follows (in thousands of dollars):

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 and audit services provided by the Office of the Auditor General of Canada are not included in the CRTC's Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with other government departments and agencies (in thousands of dollars)

Expenses and revenues disclosed in note (b) exclude common services provided without charge, which are already disclosed in (a).

11. Segmented information

Presentation by segment is based on the CRTC's Departmental Results Framework. 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):

Annex: internal control over financial reporting

1. Introduction

In support of an effective system of internal control, Canadian Radio-television and Telecommunications Commission (CRTC) conducted self-assessments of key control areas that were identified to be assessed in the 2023-24 fiscal year. A summary of the assessment results and action plan is provided in subsection 2.

CRTC will assess all key control areas over a five-year cycle. The assessment plan is provided in subsection 3.

2. Assessment results for the 2023-24 fiscal year

CRTC completed the assessment of key control areas as indicated in the following table. A summary of the results, action plans, and additional details are also provided.

Contracting: The self-assessment identified possible improvements in the archiving system, publication, documentation and justification of certain types of contracts, and work on the formal procurement management framework. An action plan has been drawn up for a two-year cycle, with several elements already completed by 2023-24 and the remainder to be achieved in 2024-25.

3. Assessment plan

CRTC will assess the performance of its system of internal control by focusing on key control areas over a cycle of years as shown in the following table.

Date modified:

2024-12-18