Future-Oriented Financial Statements - Years Ending March 31, 2013 and 2014

1. Authority and Objectives

The Immigration and Refugee Board of Canada (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 was amended by the Balanced Refugee Reform Act (BRRA) in 2010 and the Protecting Canada's Immigration System Act (PCISA) in 2012. IRB divisions will derive their mandates from these last three acts during the 2013-14 reporting period.

The IRB's mission, on behalf of Canadians, is to resolve immigration and refugee cases efficiently, fairly and in accordance with the law.

As an independent tribunal, the IRB's mandate is to:

• decide claims for refugee protection;
• decide applications for vacation of refugee protection;
• decide applications for cessation of refugee protection;
• decide pre-removal risk assessments (PRRA)^{Note 1};
• hear appeals from some decisions of the RPD allowing or rejecting claims for refugee protection;
• conduct 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;
• conduct detention reviews for foreign nationals or permanent residents who are detained for immigration reasons;
• hear appeals of family sponsorship applications refused by Citizenship and Immigration Canada (CIC);
• hear appeals from certain removal orders made against permanent residents, Convention refugees and other protected persons, and holders of permanent resident visas;
• hear appeals by permanent residents against whom a CIC officer outside Canada has decided that they have not fulfilled their residency obligation; and
• hear appeals by the Minister of Public Safety of ID decisions at admissibility hearings

The IRB has five program activities: Refugee Protection, Immigration Appeal, Admissibility Hearings and Detention Reviews, Refugee Appeal and Internal Services. The Internal Services program activity supports the four other program activities.

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.

Estimated year end information for 2012-13 is used as the opening position for the 2013-14 planned results, and forecasts have been made for the planned results for the 2013-14 fiscal year.

The main assumptions are as follows:

1. Expenses related to program activities not significantly affected by the BRRA and the 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 primarily affected by the BRRA and the PCISA reflect both transitional and new spending.

These assumptions are adopted as at December 31, 2012.

3. Variations and changes to the forecast financial information

While every attempt has been made to forecast final results for the remainder of 2012-13 and for 2013-14, 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 timing and amounts of acquisition and disposals of equipment or accommodation fit up may effect gains/losses and amortization expense.
2. Implementation of new collective agreements.
3. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

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:

1. Parliamentary authorities

   The IRB is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the IRB 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 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 3 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 appropriations to discharge its liabilities.

4. Revenue

   Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place. The IRB does not charge for its services and its only revenues stem from gains on the disposal of crown assets, Access to Information and Privacy fees and interest on overdue accounts receivable.

   Revenues that are non-respendable are not available to discharge the Department's liabilities. While the Deputy Head is expected to maintain accounting control, he or 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.

5. Expenses

   Expenses are recorded on the 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.

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 IRB's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation of the Board to the Plan. The IRB'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.

7. Accounts receivable

   Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.

8. 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 financial statements.

9. 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.

10. 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 annual Parliamentary authorities. Items recognized in the Future-oriented Statement of Operations and Departmental Net 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, 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 (in thousands of dollars):

6. Accounts payable and accrued liabilities

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

7. Employee future benefits

1. Pension benefits

   The IRB'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 Canada/Québec Pension Plans benefits and they are indexed to inflation.

   The IRB'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 IRB 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, and 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 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, estimated as of the date of these statements, is as follows (in thousands of dollars):

   Severance Benefits

   	Forecast 2013-14	Estimated Results 2012-13
   Accrued benefit obligation - Beginning of the year	13,040	10,237
   Expense for the year	475	4,364
   Benefits paid during the year	(1,185)	(1,561)
   Accrued benefit obligation - End of the year	12,330	13,040

8. Accounts receivable and advances

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

9. Tangible capital assets

10. Contingent liabilities

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

1. Claims and litigation
   Claims have been made against the IRB in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable.

11. Related Party Transactions

The IRB is related as a result of common ownership to all government departments, agencies, and Crown corporations. The IRB enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the IRB received common services which were obtained without charge from other government departments as disclosed below.

12. 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 2. 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 (in thousands of dollars):

Table Legend:

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