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SECTION III: SUPPLEMENTARY INFORMATION

Organizational Information

Role

The Board is an economic regulatory body empowered to establish, either mandatorily or at the request of an interested party, the royalties to be paid for the use of copyrighted works, when the administration of such copyright is entrusted to a copyright collective society. Moreover, the Board supervises agreements between users and licensing bodies, issues licences when the copyright owner cannot be located, and may determine the compensation to be paid by a copyright owner to a user when there is a risk that the coming into force of a new copyright might adversely affect the latter.

The Board has powers of a substantive and procedural nature. Some powers are granted to the Board expressly in the Act, and some are implicitly recognized by the courts. The Board is a court of record and has powers to hold hearings and issue subpoenas.

Responsibilities and Organization

Board members are appointed by the Governor in Council to hold office during good behaviour for a term not exceeding five years. They may be reappointed once.

The Act requires that the Chairman must be a judge, either sitting or retired, of a superior, county or district court. The Chairman directs the work of the Board and apportions its caseload among the members.

The Act also designates the Vice-Chairman as Chief Executive Officer of the Board. He or she exercises direction over the Board and supervises its staff.

The organizational structure of the Board follows the requirements set out in section 66 and following sections of the Act.

The Board's Staff

The Board has a staff of twelve employees, two of whom report to the Chief Executive Officer: the Secretary General and the General Counsel.

The Secretary General plans the Board's operations, serves as its Registrar, represents the Board in its relations with members of parliament, provincial governments, the media and the public and directs the preparation of the Board's reports to Parliament and to the federal government's central agencies. The Secretary General is also responsible for managing and directing the economic research, analysis and planning functions as well as the registry and administrative and financial support functions.

The General Counsel provides legal advice on tariff and licence applications before the Board. The General Counsel also represents the Board before the Courts in matters involving its jurisdiction.

Organizational Structure of the Board

The Board has 17 full time equivalents (5 Governor in Council appointees and 12 employees).

Table 1: Comparison of Planned to Actual Spending (incl. FTEs)

	2004-05 Actual	2005-06 Actual	2006-2007
			Main Estimates	Planned Spending	Total Authorities	Actual
Render Decisions and Issue Licences	2,268	2,342	2,580	2,580	2,631	2,364
Total	2,268	2,342	2,580	2,580	2,631	2,364
Total	2,268	2,342	2,580	2,580	2,631	2,364
Less: Non-respendable revenue	-	-	-	-	-	-
Plus: Cost of services received without charge	341	348	333	333	333	333
Net cost of Department	2,609	2,690	2,913	2,913	2,964	2,697
Full Time Equivalents *	15	15				16

Table 2: Use of Resources by Program Activities

2006-2007
Program Activity - PA	Budgetary						Plus: Non- Budgetary	Total
	Operating	Capital	Grants and Contri- butions	Total: Gross Budgetary Expenditures	Less: Respendable Revenue	Total: Net Budgetary Expenditures	Loans, Investments and Advances
Render decisions and Issue Licences
Main Estimates	2,580	-	-	2,580	-	2,580	-	2,580
Planned Spending	2,580	-	-	2,580	-	2,580	-	2,580
Total Authorities	2,631	-	-	2,631	-	2,631	-	2,631
Actual Spending	2,364	-	-	2,364	-	2,364	-	2,364

Table 3: Voted and Statutory Items

Vote or Statutory Item	Truncated Vote or Statutory Wording	2006-2007
		Main Estimates	Planned Spending	Total Authorities	Actual
50	Program expenditures	2,274	2,274	2,408 *	2,141
(S)	Contributions to employee benefit plans	306	306	223	223
	Total	2,580	2,580	2,631	2,364

* This amount includes the 5% carry forward of $110,300 from the 2005-2006 budget and $23,000 for collective bargaining agreements.

Table 4: Services Received Without Charge

	Actual 2006-2007
Accommodation provided by Public Works and Government Services Canada (PWGSC)	230
Contributions covering employers' share of employees' insurance premiums and expenditures paid by TBS (excluding revolving funds)	103
Salary and associated expenditures of legal services provided by The Department of Justice Canada	-
Total 2006-2007 Services received without charge	333

ANNEX A
2006-2007 FINANCIAL STATEMENTS (Unaudited)

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2007 and all information contained in these statements rests with departmental management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

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 fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the department's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the department's Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the department.

The financial statements of the department have not been audited.

Stephen J. Callary Deputy Head

Claude Majeau Senior Financial Officer

Copyright Board of Canada Statement of Operations (unaudited) For the year ended March 31 (in dollars)
	2007	2006
Operating Expense
Salaries and employee benefits	1 691 440	1 771 613
Professional and special services	386 837	320 534
Accommodation	230 000	224 500
Travel	168 794	122 586
Rental	63 295	67 517
Information Services	56 099	62 005
Telecommunication Services	46 224	68 136
Utitlities, materials and supplies	44 288	37 446
Other	28 109	37 578
Amortization	11 039	11 039
Repair and Maintenance	2 314	18 545
Total expenses	2 728 439	2 741 499
Revenues
Gain on Disposal of Non-Capital Asset	0	376
Total revenues	0	376
Net cost of operations	2 728 439	2 741 123
The accompanying notes form an integral part of these financial statements

Copyright Board of Canada Statement of Financial Position (unaudited) At March 31 (in dollars)
ASSETS Financial assets	2007	2006
Accounts receivable (Note 8)	84 572	90 353
Total financial assets	84 572	90 353
Non-financial assets
Tangible capital assets (Note 5)	86 192	97 231
Total non-financial assets	86 192	97 231
TOTAL	170 764	187 584
Liabilities
Accounts payable and accrued    liabilities (Note 4)	114 194	122 444
Vacation pay and compensatory leave	149 546	124 119
Employee future benefits (Note 6)	179 001	180 080
Total liabilities	439 741	426 643
Equity of Canada	(268 977)	(239 059)
TOTAL	170 764	187 584
Contractual obligations (Note 7)
The accompanying notes form an integral part of these financial statements

Copyright Board of Canada Statement of Equity of Canada (unaudited) For the year ended March 31 (in dollars)
	2007	2006
Equity of Canada, beginning of year	(239 059)	(279 772)
Net cost of operations	(2 728 439)	(2 741 123)
Current year appropriations used (Note 3)	2 363 564	2 342 224
Revenue not available for spending	(76)	0
Change in net position in the Consolidated Revenue Fund (Note 3)	2 469	92 506
Services provided without charge (Note 8)	332 564	347 106
Equity of Canada, end of year	(268 977)	(239 059)
The accompanying notes form an integral part of these financial statements

Copyright Board of Canada Statement of Cash Flow (unaudited) For the year ended March 31
(in dollars)	2007	2006
Operating activities    Net cost of operations	2 728 439	2 741 123
Non cash items:
Services provided without charge (Note 8)	(332 564)	(347 106)
Amortization of tangible capital assets (Note 5)	(11 039)	(11 039)
Gain (Loss) on disposal of non-capital assets	0	376
Variation in Statement of Financial Position:
Decrease (increase) in liabilities	(13 098)	66 659
Increase (decrease) receivables	(5 781)	(14 907)
Cash used by operating activities	2 365 957	2 435 106
Capital investment activities
Proceeds from disposal of non capital assets	0	(376)
Financing activities
Net cash provided by Government of Canada	2 365 957	2 434 730
The accompanying notes form an integral part of these financial statements

Copyright Board of Canada

Notes to the Financial Statements (unaudited)

1 - Authority and Objectives

The Copyright Board of Canada is an independent administrative agency which has been conferred department status for purposes of the Financial Administration Act. Its mandate stems from the Copyright Act.

The Copyright Board of Canada plays a major role in the collective administration of copyright, particularly where the public performance and the communication to the public, by telecommunication, of musical works, as well as the retransmission of distant radio and television signals are concerned. The Board plays a surveillance role in three ways with respect to collective societies which administer very large repertoires of work created by a multitude of originators both in Canada and in other countries: as an economic regulatory body, by approving tariff proposals by the various copyright collective societies; as an arbitrator in private disputes; and as an arbitrator of the public interest.

The Board's principal mandate is to set royalties which are fair and reasonable for both copyright owners and the users of copyright-protected works, as well as issuing non-exclusive licences authorizing the fully legal use of works when the copyright owner cannot be located.

The Board reports annually to Parliament through the Minister of Industry.

2 - Summary of Significant Accounting Policies

The financial statements have been prepared in accordance with accounting standards issued by the Treasury Board of Canada Secretariat which are consistent with Canadian generally accepted accounting principles for the public sector.

Significant accounting policies are as follows:

(a) Parliamentary appropriations - the Department is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the department do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the two bases of reporting.

(b) Net Cash Provided by Government - The department operates within the Consolidated Revenue Fund (CRF). The CRF is administered by the Receiver General for Canada. All cash received by the department is deposited to the CRF and all cash disbursements made by the department 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 federal government.

(c) Change in net position in the Consolidated Revenue Fund is the difference between the net cash provided by the Government and appropriations used in the year, excluding the amount of non-respendable revenue recorded by the department. It results from timing between when a transaction affects appropriations and when it is processed through the CRF.

(d) Revenues - Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

(e) Expenses - Expenses are recorded on the accrual basis:

• Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
  
• Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans and legal services are recorded as operating expenses at their estimated cost.

(f) Employee future benefits

1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The department's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require the department to make contributions for any actuarial deficiencies of the Plan.
   
2. Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

(g) Account receivables are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

(h) 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 department 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 assets as follows:

	Asset	Amortization period
	Machinery and Equipment	10 years

(i) Measurement uncertainty - The preparation of these financial statements in accordance with accounting standards issued by the Treasury Board of Canada Secretariat which are consistent with Canadian generally accepted accounting principles for the public sector requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the 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 the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could 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.

3 - Parliamentary Appropriations

The Department receives most of its funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Department has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences between net results of operations and appropriations are reconciled in the following tables.

3a) Reconciliation of net cost of appropriations
to current year appropriations used

(in dollars)	2007	2006
Net cost of operations	2 728 439	2 741 123
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (Less):
Services received without charge (Note 8)	(332 564)	(347 106)
Employee severance benefits (Note 6)	1 079	(30 872)
Amortization of tangible capital assets (Note 5)	(11 039)	(11 039)
Vacation pay and compensatory leave	(22 427)	(10 558)
Gain on disposal of non-capital assets	0	376
Other	76	300
	(364 875)	(398 899)
Current year appropriations used	2 363 554	2 342 224

3b) Appropriations provided and used

(in dollars)	2007	2006
Vote 50 - Operating expenditures	2 407 300	2 267 000
Statutory Amounts	223 607	247 970
Less:
Appropriations available for future years	0	(376)
Lapsed appropriations: Operating	(267 343)	(172 370)
Current year appropriations used	2 363 564	2 342 224

3c) Reconciliation of net cash provided by Government
to current year appropriations used

(in dollars)	2007	2006
Net cash provided by Government of Canada	2 365 957	2 434 730
Refund of previous year expenditure	76	0
Change in net position in the Consolidated Revenue Fund
Variation in accounts payable and accrued liabilities	(8 250)	(66 659)
Variation in accounts receivable and advances	5 781	14 907
Other adjustments	0	(40 754)
	(2 469)	(92 506)
Current year appropriations used	2 363 564	2 342 224

4. Accounts payable and Accrued liabilities

	2007	2006
External
Accrued liabilities	62 975	79 790
Accrued salaries and wages	30 082	31 521
Total External	93 057	11 311
Other Federal Government departments	21 137	11 133
Total Accounts payable and accrued liabilities	114 194	122 444

5. Tangible Capital Assets
(in dollars)

	Cost		Accumulated amortization			2007	2006
Capital asset class	Opening balance	Closing balance	Opening balance	Amortization	Closing balance	Net book value	Net book value
Machinery and equipment	158 827	158 827	61 596	11 039	72 635	86 192	97 231
Total	158 827	158 827	61 596	11 039	72 635	86 192	97 231

*Amoritization expense for the year ended March 31, 2007 is $11,039 (2006: $11,039)

6. Employee Benefits

a) Pension benefits: The department's employees participate in the Public Service Pension 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 per cent 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.

Both the employees and the department contribute to the cost of the Plan. The 2006-2007 expense amounts to $223,231 ($222,826 in 2005-2006), which represents approximately 2.2 (2.6 in 2005-2006) time the contributions by employees.

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

(in dollars)	2007	2006
Accrued benefit obligation, beginning of year	180 080	149 208
Expense for the year	10 740	30 872
Benefits paid during the year	11 819	0
Accrued benefit obligation, end of year	179 001	180 080

7. Contractual Obligations

The nature of the department's activities can result in some large multi-year contracts and obligations whereby the department will be obligated to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in dollars)	2008	2009	2010	2011	2012 and thereafter	Total
Acquisition of goods and services	427 785	6 353	9 041	5 417	5 560	454 156
Employer contributions	251 333	0	0	0	0	251 333
Total	679 118	6 353	9 041	5 417	5 560	705 489

8. Related party transactions

The department is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The department enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the department received services, which were obtained without charge from other Government departments as presented in part (a).

(a) Services provided without charge:

During the year the department received without charge from other departments, accommodation and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the department's Statement of Operations as follows:

Services Provided without charge (in dollars)	2007	2006
Accommodation	230 000	224 500
Employer's contribution to the insurance plans	102 564	122 606
Total	332 564	347 106

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the department's Statement of Operations as follows:

(b) Receivables outstanding at year-end with related parties:

(in dollars)	2007	2006
Receivables from other Federal Government departments	84 572	90 353
Total	84 572	90 353

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