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Section 3 - Supplementary Information

3.1 Financial Highlights

The preparation of the future-oriented financial statements is a new annual Treasury Board Secretariat initiative. For the 2012–2013 Report on Plans and Priorities (RPP), all departments must provide a full set of future-oriented financial statements prepared in accordance with Treasury Board Accounting Standard (TBAS) 1.2.

The future-oriented financial highlights presented within this section of the RPP are intended to serve as a general overview of HRSDC's financial operations. These future-oriented financial highlights are prepared on an accrual basis to strengthen accountability and improve transparency and financial management.

HRSDC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to HRSDC do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items forecasted in the future-oriented consolidated financial statements are not necessarily the same as those forecasted through authorities from Parliament. A reconciliation between forecast authorities available (based on RPP forecast/planned spending amounts) and the forecast net cost of operations is set out in Note 5 of the Department's future-oriented consolidated financial statements.

For the future-oriented consolidated financial statements purposes, the financial activities of the Canada Pension Plan (CPP) are not part of HRSDC's reporting entity as the CPP is under joint control of the federal and the participating provincial and territorial governments.

A condensed view of the future-oriented consolidated financial statements is presented below. A complete future-oriented consolidated financial statements is available online at: http://www.hrsdc.gc.ca/eng/publications_resources/dpr/rpp/financial_statement/2012_2013/rpp_12-13_financial_e.shtml

Future-Oriented Condensed Consolidated Statement of Financial Operations
For the Year (ended March 31)
($ millions)

	$ Change	Planned Results 2013	Estimated Results 2012
Expenses
Benefits and transfer payments	2,839.0	65,039.6	62,200.6
Operating expenses	(301.1)	3,343.5	3,644.6
Total Expenses	2,537.9	68,383.1	65,845.2
Revenues
EI revenues	1,787.1	20,876.9	19,089.8
Other	(48.8)	856.6	905.4
Total Revenues	1,738.3	21,733.5	19,995.2
Net Cost of Operations	799.6	46,649.6	45,850.0

Future-Oriented Condensed Consolidated Statement of Financial Position
as at March 31
($ millions)

	$ Change	Planned Results 2013	Estimated Results 2012
Total assets	328.9	15,419.9	15,091.0
Total liabilities	(100.2)	2,356.6	2,456.8
Equity	429.1	13,063.3	12,634.2
Total	328.9	15,419.9	15,091.0

3.2 Supplementary Information Tables

All electronic supplementary information tables found in the 2012-13 Report on Plans and Priorities can be found on the Treasury Board of Canada Secretariat's Website.

Supplementary Information Tables:

• Details on Transfer Payment Programs
• Greening Government Operations
• Horizontal Initiatives
• Upcoming Internal Audits and Evaluations over the next Three Fiscal Years
• Sources of Respendable and Non-Respendable Revenue

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Section 4: Other Items of Interest

4.1 Specified Purpose Accounts

Specified Purpose Accounts consist of special categories of revenues and expenditures. They report transactions of certain accounts where enabling legislation requires that revenues be earmarked and that related payments and expenditures be charged against such revenues. The transactions of these accounts are to be accounted for separately.

HRSDC is responsible for the stewardship of five such accounts, which are the:

• The Employment Insurance Operating (EIO) Account;
• Canada Pension Plan;
• Government Annuities Account;
• Civil Service Insurance Fund; and
• Canadian Millennium Scholarship Foundation Excellence Awards Fund.

Employment Insurance Operating Account

The EIO Account was established to record all amounts received or paid out under the Employment Insurance Act since January 1, 2009. The previous Employment Insurance (EI) Account was closed and removed from the Accounts of Canada as of December 31, 2008. The Employment Insurance Act provides short-term financial relief and other assistance to eligible workers. The EI program is financed entirely by contributions from employees and employers via premiums paid on insured earnings up to the maximum insurable earnings (MIE).

Employment Insurance benefits are divided into:

• Income Benefits under Part I of the Employment Insurance Act, which provide temporary financial assistance to unemployed Canadians who have lost their job through no fault of their own, while they look for work or upgrade their skills. EI Part I also provides assistance to Canadians who are sick, pregnant, caring for a newborn or adopted child, or caring for a family member who is seriously ill with a significant risk of death.
• Employment Benefits under Part II of the Employment Insurance Act, which help Canadians to prepare for, find and maintain employment. These activities include Employment Benefits and Support Measures (EBSM) delivered under the Labour Market Development Agreements (LMDA), pan-Canadian programming and functions of the National Employment Service.

Benefit and administrative costs are paid out of the Consolidated Revenue Fund and charged to the EIO Account.

Financial Summary

In Budget 2008, the Government announced improvements to the management and governance of EI finances through the creation of an independent Crown corporation, the Canada Employment Insurance Financing Board (CEIFB). In 2010, the CEIFB implemented a new premium rate-setting mechanism that will ensure that revenues and expenditures break-even over time.

More recently, to help maintain the momentum of the ongoing economic recovery, the Government limited the maximum rate increase from 15 cents to 5 for 2011 and 2012.

In 2012, the employee EI premium rate will be $1.83 per $100 of insurable earnings. Given this premium rate and an increase in maximum insurable earnings, from $44,200 to $45,900, insured workers will pay up to a maximum annual EI premium in 2012 of $839.97, compared with $786.76 in 2011.

The table below summarizes the EI revenues and expenditures from 2009-2010 financial results to 2012-2013.

EIO Account – Revenues and Expenditures Summary

(millions of dollars)	Actual		Forecast	Planned Spending
	2009-2010	2010-2011	2011-2012	2012-2013
Expenditures EI Benefits
Income Benefits	18,980	17,245	15,800	16,314
EBSM	2,606	2,605	2,115	2,123
Total EI Benefits	21,586	19,850	17,915	18,437
Administrative Costs	2,031	1,916	1,900	1,685
Doubtful Accounts	50	42	26	41
Sub-Total	23,667	21,808	19,841	20,163
Revenues
Premium Revenuea	17,121	17,862	19,019	20,800
Penalties	42	46	52	53
Interest	13	11	17	22
Funding for Budget 2009 measuresb	1,522	1,428	149	-
Sub-Total	18,697	19,347	19,237	20,875
Annual Surplus (Deficit)	(4,970)	(2,462)	(604)	712
Cumulative Surplus (Deficit)	(4,936)	(7,397)	(8,001)	(7,289)
a The EI premiums reported in the summary financial statements of the Government of Canada and the Federal Budget exclude the premium contributions made by the Government of Canada as an employer. b EI expenditures associated with the enhanced EI measures and training announced in Canada's Economic Action Plan in Budget 2009 are recovered from the Consolidated Revenue Fund. Note: Totals may not add due to rounding.

Benefit Payments

Given that the current global economic conditions are still uncertain following the world-wide recession that affected most economies in 2009, total benefits paid in 2012-2013 are expected to increase slightly to reach $18.4 billion, consisting of $16.3 billion for Income Benefits and $2.1 billion for Employment Benefits and Support Measures.

Regular Benefits

In response to the global recession, the Government took steps in 2009, under Canada's Economic Action Plan (EAP) to temporarily provide additional support to unemployed workers. While these measures ended in September 2010, some claimants will continue to receive additional benefits in 2012–2013.

Special Benefits

Since January 31, 2010, self-employed workers can voluntarily enter into an agreement with the Canada Employment Insurance Commission to contribute EI premiums at the employee rate and be eligible to access special benefits (excluding maternity and parental benefits in Quebec, as they have been covered under the Quebec Parental Insurance Plan since January 2006). As of January 1, 2011, self-employed are eligible to collect EI special benefits.

EI Income Benefits Expenditures

(millions of dollars)	Actual		Forecast	Planned Spending
	2009-2010	2010-2011	2011-2012	2012-2013
Income Benefits
Regular	14,529	12,959	11,413	11,687
Sickness	1,024	1,051	1,106	1,153
Maternity	915	911	942	988
Parental	2,157	2,170	2,224	2,333
Compassionate Care	10	11	11	12
Fishing	258	254	266	275
Work-Sharing	300	108	32	27
Benefit Repayments	(214)	(220)	(194)	(161)
Total Income Benefits	18,980	17,245	15,800	16,314

Canada Pension Plan

The Canada Pension Plan is an income security program which is funded by the contributions of employees, employers and self-employed persons. It is a joint federal-provincial plan that provides coverage to virtually all employed and self-employed persons in Canada, excluding Quebec which operates its own comprehensive pension plan, the Quebec Pension Plan.

The Canada Pension Plan provides for a variety of benefits to eligible contributors in the case of the retirement, disability or death of a contributor. In addition to retirement benefits, the Canada Pension Plan also provides for survivors pensions, children's benefits, disability pensions, disabled child contributors' benefits, as well as a one-time death benefit that cannot exceed $2,500. Benefits are calculated based on how much and for how long a contributor has paid into the Canada Pension Plan. Canada Pension Plan benefits are not paid automatically—everyone must apply and provide proof of eligibility.

Financial Summary

Canada Pension Plan (CPP) Summary

(millions of dollars)	Actual		Forecast	Planned Spending
	2009-2010	2010-2011	2011-2012	2012-2013
Revenue
Contributionsa	36,276	37,069	38,336	40,154
Investment Income
Canada Pension Planb	1	2	2	2
CPP Investment Boardc	16,218	15,558	7,561	8,607
Total Investment Income	16,219	15,560	7,563	8,609
Total Revenue	52,495	52,629	45,899	48,762
Expenditures
Benefit Paymentsd	30,363	31,598	33,221	35,414
Administrative expenses	734	850	1,029	953
Total Expenditures	31,097	32,448	34,249	36,367
Increase	21,398	20,181	11,650	12,395
Year-end balances	131,420	151,601	163,251	175,645
Notes: a Source of Contributions Forecast 2011 through 2015 is from the Actuarial Monthly Report (December 2011) from the Office of the Superintendent of Financial Institutions Canada. b The Canada Pension Plan investment income only includes the interest earned on the daily operating balance. c Canada Pension Plan Investment Board actual amounts are based on their audited financial statements. The forecast is based on 25th Actuarial Report of the Canada Pension Plan from the Office of the Superintendent of Financial Institutions Canada. d Source of Benefit payments Forecast 2011 through 2015 is from the Actuarial Monthly Report (December 2011) from the Office of the Superintendent of Financial Institutions Canada. Note: Totals may not add due to rounding.

Government Annuities Account

This account was established by the Government Annuities Act, and modified by the Government Annuities Improvement Act, which discontinued sales of annuities in 1975. The account is valued on an actuarial basis each year, with the deficit charged or surplus credited to the Consolidated Revenue Fund.

The purpose of the Government Annuities Act was to assist Canadians in providing for their later years through the purchase of Government annuities. The Government Annuities Improvement Act increased the rate of return and flexibility of Government annuity contracts.

Income consists of premiums received, funds reclaimed from the Consolidated Revenue Fund for previously untraceable annuitants, earned interest and any transfer needed to cover the actuarial deficit. Payments and other charges represent matured annuities, the commuted value of death benefits, premium refunds and withdrawals, and actuarial surpluses and unclaimed items transferred to non-tax revenues. The amounts of unclaimed annuities, related to untraceable annuitants, are transferred to non-tax revenues.

As of March 31, 2011, there were 928 outstanding deferred annuities, the last of which will come into payment around 2030.

Financial Summary

Government Annuities Account - Statement of Operations and Actuarial Present Value of Accrued Benefits

(millions of dollars)	Actual		Forecast	Planned Spending
	2009-2010	2010-2011	2011-2012	2012-2013
Actuarial present value of accrued benefits – Balance at beginning of year	267.2	243.5	221.3	200.8
Income	17.5	15.8	14.4	13.1
Payments and other charges	38.7	35.8	32.9	30.3
Excess of Payments and other charges over income for the year	21.2	20.0	18.5	17.2
Actuarial Surplus	2.5	2.2	2.0	1.8
Actuarial present value of accrued benefits – Balance at year-end	243.5	221.3	200.8	181.8

Civil Service Insurance Fund

This account was established by the Civil Service Insurance Act, under which the Minister of Finance could contract with permanent employees in the public service for the payment of certain death benefits. No new contracts have been entered into since 1954 when the Supplementary Death Benefit Plan for the Public Service and Canadian Forces was introduced as part of the Public Service Superannuation Act and the Canadian Forces Superannuation Act, respectively. As of April 1997, the Department of Human Resources and Skills Development assumed the responsibility for the administration and the actuarial valuation of the Civil Service Insurance Act.

The number of policies in force as of March 31, 2011 was 965 and the average age of the policy holders was 90.3 years. Income and other credits consist of premiums and an amount (charged to expenditures), which is transferred from the Consolidated Revenue Fund in order to balance the assets and actuarial liabilities of the program. Payments and other charges consist of death benefits, settlement annuities paid to beneficiaries and premium refunds.

Pursuant to subsection 16(3) of the Civil Service Insurance Regulations, any deficit will be credited to the Account from the Consolidated Revenue Fund.

Financial Summary

Civil Service Insurance Fund - Statement of Operations and Balance

(millions of dollars)	Actual		Forecast	Planned Spending
	2009-2010	2010-2011	2011-2012	2012-2013
Opening Balance	5.6	5.5	5.2	4.9
Income and other credits	0.1	-	-	-
Payments and other charges	0.2	0.3	0.3	0.3
Excess of payments and other charges over income for the year	0.1	0.3	0.3	0.3
Closing Balance	5.5	5.2	4.9	4.6

Canadian Millennium Scholarship Foundation Excellence Awards Fund

In accordance with Budget Implementation Act 2008, the Canada Millennium Scholarship Foundation is ending after its ten-year mandate. This Specified Purpose Account was established by way of an agreement between the Canada Millennium Scholarship Foundation and Human Resources and Skills Development (HRSD) in order for HRSD to administer the remaining Excellence Awards payments to eligible students upon the dissolution of the Canada Millennium Scholarship Foundation. The transfer of funds also includes the costs of administering this program on behalf of the Canada Millennium Scholarship Foundation.

HRSD continues to administer the remaining Excellence Awards disbursements from January 1, 2010, until December 31, 2013. After this date, HRSD will transfer any funds remaining in the account to the Consolidated Revenue Fund.

Financial Summary

Canadian Millennium Scholarship Foundation Excellence Awards Fund : Statement of Operations and Balance

(millions of dollars)	Actual		Forecast	Planned Spending
	2009-2010	2010-2011	2011-2012	2012-2013
Opening Balance	0.0	14.4	7.3	3.3
Income and other credits	14.8	-	-	-
Payments and other charges	0.4	7.1	4.0	2.2
Excess of payments and other charges over receipts for the year	(14.4)	7.1	4.0	2.2
Closing Balance	14.4	7.3	3.3	1.1

4.2 Statutory Annual Reports

Employment Insurance Part II

Part II of the Employment Insurance Act commits the federal government to work in concert with provinces and territories to put in place Employment Benefits and Support Measures or similar programs and services that help unemployed Canadians integrate into the labour market.

Since provinces and territories are best placed to determine the mix of employment programming required to meet their local and regional labour market needs, Employment Benefits and Support Measures are delivered through transfer Labour Market Development Agreements between Canada and the provinces and territories.

Employment Benefits and Support Measures comprise five employment benefit programs – Skills Development, Targeted Wage Subsidies, Self-Employment, Job Creation Partnerships, and Targeted Earnings Supplements – and three support measures – Employment Services, Labour Market Partnerships, and Research and Innovation.

More detailed information on Employment Insurance Part II is available at www.servicecanada.gc.ca

Financial Data

For 2012-2013, the base EI Part II expenditure authority of $2.154 billion represents 0.4% of total estimated insurable earnings of $515.3 billion. This represents a lower level of expenditures than the 0.8% ceiling imposed under the EI Act, which is estimated at $4.122 billion in 2012-2013. The amount of re-investment reached maturity at $800 million in 2000-2001.

2012-2013 Employment Insurance Plan

(millions of dollars)	Basea	Re-Investmenta	Total Plana
Newfoundland and Labrador	57.3	73.1	130.4
Nova Scotia	49.3	30.3	79.6
New Brunswick	48.0	42.1	90.1
Prince Edward Island	16.4	10.0	26.4
Quebec	336.0	248.1	584.1
Ontario	375.9	184.1	560.0
Manitoba	33.8	10.2	44.0
Saskatchewan	27.2	9.9	37.1
Alberta	72.8	35.9	108.7
Northwest Territories	1.6	1.6	3.2
Nunavut	1.9	1.0	2.9
British Columbia	128.3	151.7	280.0
Yukon	1.5	2.0	3.5
	1,150.0	800.0	1,950.0
Pan-Canadian Responsibilitiesb	172.7	0.0	172.7
Funds available for Employment Benefits and Support Measures	1,322.7	800.0	2,122.7
a Totals may not add due to rounding. b Funds earmarked for Pan-Canadian priorities, such as Aboriginal programming, sectoral and innovations projects.

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