Future-Oriented Financial Statements: Years Ending March 31, 2012 and 2013

1. Authority and Objectives

The Immigration and Refugee Board of Canada (the IRB) is an independent administrative tribunal that was created on January 1, 1989, by an amendment to the Immigration Act. In 2002, the Immigration Act was replaced by the Immigration and Refugee Protection Act (IRPA), which will be amended by the Balanced Refugee Reform Act (BRRA). On February 16, 2012, the Government introduced Bill C-31, Protecting Canada's Immigration System Act (PCISA), which proposes to amend, among other legislation, the BRRA once it receives Royal Assent. As currently legislated, the IRB's mandate under the IRPA will expand as provisions of the BRRA come into force in 2012-13 and in 2013-14.

As an independent tribunal, the IRB's Division mandates are:

Refugee Protection Division (RPD):

• Decides claims for refugee protection
• Decides applications for vacation of refugee protection
• Decides applications for cessation of refugee protection
• Decides pre-removal risk assessments (PRRA)^{Note 1}

Refugee Appeal Division (RAD):^{Note 2}

• Hears appeals from decisions of the RPD allowing or rejecting claims for refugee protection
• Hears appeals from decisions of the RPD rejecting applications by the Minister for a determination that refugee protection has ceased
• Hears appeals from decisions of the RPD rejecting applications by the Minister to vacate a decision to allow a claim for refugee protection

Immigration Division (ID):

• Conducts admissibility hearings for foreign nationals or permanent residents who seek entry into Canada, or who are already in Canada and are alleged to be inadmissible
• Conducts detention reviews for foreign nationals or permanent residents who are detained for immigration reasons

Immigration Appeal Division (IAD):

• Hears appeals of family sponsorship applications refused by Citizenship and Immigration Canada (CIC)
• Hears appeals from certain removal orders made against permanent residents, Convention refugees and other protected persons, and holders of permanent resident visas
• Hears appeals by permanent residents against whom a CIC officer outside Canada has decided that they have not fulfilled their residency obligation
• Hears appeals by the Minister of Public Safety of ID decisions at admissibility hearings

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 IRB as described in the Report on Plans and Priorities.

The main assumptions are as follows:

1. Expenses of the program activities not affected by the Balanced Refugee Reform Act (BRRA) and the Protecting Canada's Immigration System Act (PCISA), including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
2. Expenses of the program activities affected by the BRRA and the PCISA, reflect transitional and new spending to prepare for and implement the reform to Canada's refugee determination system which is expected to come into force in 2012-13 and in 2013-14.
3. Estimated year end information for 2011-12 is used as the opening position for the 2012-13 planned results.

These assumptions are adopted as at February 25, 2012.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the year 2011-12 and 2012-13, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these future-oriented financial statements the IRB has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions 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. The coming into force date of the new legislation.
2. The timing and amounts of acquisitions and disposals of equipment or, accommodation fit up required to prepare for the reform to Canada's refugee determination system, may affect gains/losses and amortization expense.
3. Implementation of new collective agreements.
4. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

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

4. Summary of Significant Accounting Policies

The future-oriented statements have been prepared in accordance with the Treasury Board accounting policies in effect for the 2011-12 fiscal year. These accounting policies, stated below, 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:

1. Parliamentary authorities – The IRB is financed by the Government of Canada through Parliamentary authorities. 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 Future-oriented Statement of Operations and 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.
2. Net Cash Provided by Government – The IRB operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the IRB is deposited to the CRF and all cash disbursements made by the IRB 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.
3. 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 the IRB is entitled to draw from the CRF without further parliamentary expenditure authorities to discharge its liabilities.
4. Expenses – Expenses are recorded on an accrual basis:
   • 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 and employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
5. Employee future benefits
   1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The IRB's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation of the IRB to the Plan. Current legislation does not require the IRB 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.
6. Accounts receivable - Accounts receivable are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.
7. Contingent liabilities - Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. 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.
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.

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

   Amortization of tangible capital assets

   Asset class	Amortization Period
   Informatics hardware	4 years
   Informatics software	5 years
   Machinery and Equipment	10 years
   Leasehold improvements	Lesser of the remaining term of the lease or useful life of the improvement

   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.

9. 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 Authorities

The IRB receives its funding through expenditure authorities provided by Parliament. Items recognized in the Future-oriented Statements of Operations and Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the IRB 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:

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 at year-end from Treasury Board central votes.

6. Accounts Receivable and Advances

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

7. Tangible Capital Assets (in thousands of dollars)

8. Accounts Payable and Accrued Liabilities

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

9. Employee Benefits

10. Contingent Liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown.

11. Related Party Transactions

The IRB is related as a result of common ownership to all Government of Canada departments, agencies, and Crown Corporations. The IRB enters into transactions with these entities in the normal course of business and on normal trade terms.

12. Transfer to Other Government Departments

Effective November 15, 2011, the IRB transferred responsibility for the provision of e-mail, data centre and network services to Shared Services Canada (SSC) in accordance with section 31.1 of the Financial Administration Act and Order-in-Council P.C. 2011-1297, including the stewardship responsibility for the assets and liabilities related to those services. Accordingly, the IRB transferred the following assets to SSC on November 15, 2011:

Tangible capital assets (net book value) = $ 528

13. Segmented Information

Presentation by segment is based on the IRB'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 forecasted expenses incurred and forecasted 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 (in thousands of dollars):

Table Legend:

RP: Refugee Protection
IA: Immigration Appeal
AHDR: Admissibility Hearings and Detention Reviews
RA: Refugee Appeal
IS: Internal Services