Source: http://gazetteducanada.gc.ca/rp-pr/p1/2013/2013-05-04/html/notice-avis-eng.html
Timestamp: 2020-02-19 19:50:04
Document Index: 696721558

Matched Legal Cases: ['art 86', 'art 86', 'art 86', 'art 86', 'art 86', 'art 86', 'art 86']

ARCHIVED — Vol. 147, No. 18 — May 4, 2013
(YEAR ENDED DECEMBER 31, 2012)
FINANCIAL REPORTING RESPONSIBILITY
The accompanying financial statements of the Bank of Canada have been prepared by management in accordance with International Financial Reporting Standards and contain certain items that reflect the best estimates and judgments of management. The integrity and reliability of the data in these financial statements are management’s responsibility. Management is responsible for ensuring that all information in the Annual Report is consistent with the financial statements.
In support of its responsibility for the integrity and reliability of these financial statements and for the accounting system from which they are derived, management has developed and maintains a system of internal controls to provide reasonable assurance that transactions are properly authorized and recorded, that financial information is reliable, that the assets are safeguarded and liabilities recognized, and that the operations are carried out effectively. The Bank has an internal Audit Department whose functions include reviewing internal controls, including accounting and financial controls and their application.
The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal controls and exercises this responsibility through the Audit and Finance Committee of the Board. The Audit and Finance Committee is composed of members who are neither officers nor employees of the Bank and who are financially literate. The Audit and Finance Committee is therefore qualified to review the Bank’s annual financial statements and to recommend their approval by the Board of Directors. The Audit and Finance Committee meets with management, the Chief Internal Auditor, and the Bank’s independent auditors who are appointed by Order-in-Council. The Audit and Finance Committee has established processes to evaluate the independence of the Bank’s independent auditors and oversees all services provided by them. The Audit and Finance Committee has a duty to review the adoption of, and changes in, accounting principles and procedures that have a material effect on the financial statements, and to review and assess key management judgments and estimates material to the reported financial information.
These financial statements have been audited by the Bank’s independent auditors, KPMG LLP and Deloitte LLP, and their report is presented herein. The independent auditors have full and unrestricted access to the Audit and Finance Committee to discuss their audit and related findings.
Ottawa, Canada, February 15, 2013
S. VOKEY, CPA, CA
Chief Accountant and
To the Minister of Finance, registered shareholder of the Bank of Canada (the “Bank”)
We have audited the accompanying financial statements of the Bank, which comprise the statement of financial position as at December 31, 2012, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform an audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Bank as at December 31, 2012, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
Statement of financial position (Millions of dollars)
Cash and foreign deposits (note 4)
Securities purchased under resale agreements (note 5a)
Advances to members of the Canadian Payments Association (note 5b)
Investments (notes 6, 7)
Government of Canada treasury bills
18,987.3
18,545.6
56,277.3
43,553.3
75,607.3
62,424.2
Property and equipment (note 8)
Intangible assets (note 9)
Other assets (note 10)
77,807.3
64,247.2
Bank notes in circulation (note 11)
63,700.0
61,028.8
Deposits (note 12)
11,701.5
1,512.5
Other liabilities (note 13)
77,368.8
63,822.6
Equity (note 15)
Commitments, contingencies and guarantees (note 17)
DAVID H. LAIDLEY, FCPA, FCA
Lead Director and Chair,
(See accompanying notes to the financial statements.)
Statement of comprehensive income (Millions of dollars)
Interest earned on securities purchased under resale agreements
Bank note research, production and processing
Actuarial losses on defined-benefit plans
Items that may subsequently be reclassified to net income
Transfer to Receiver General for Canada
(1,022.2)
(1,067.0)
Statement of cash flows (Millions of dollars)
Other revenue received
Payments to or on behalf of employees and to suppliers
Net increase (decrease) in advances to members of the Canadian Payments Association
10,810.3
Proceeds from maturity of securities purchased under resale agreements
40,109.3
17,052.7
Acquisition of securities purchased under resale agreements
(40,500.2)
(16,438.6)
Repayments of securities sold under repurchase agreements
Proceeds from securities sold under repurchase agreements
11,607.4
Net (increase) decrease in Government of Canada treasury bills
6,362.5
Purchases of Government of Canada bonds
(17,766.7)
(15,422.9)
Proceeds from maturity of Government of Canada bonds
5,403.1
(13,265.2)
(3,717.0)
Net increase in bank notes in circulation
Remittance of ascertained surplus to the Receiver General for Canada
(1,156.1)
INCREASE (DECREASE) IN CASH AND FOREIGN DEPOSITS
CASH AND FOREIGN DEPOSITS, BEGINNING OF YEAR
CASH AND FOREIGN DEPOSITS, END OF YEAR
(Amounts in the notes to the financial statements of the Bank of Canada are in millions of Canadian dollars, unless otherwise stated.)
1. The business of the Bank of Canada
The Bank of Canada (the Bank) is the central bank of Canada. The Bank is a corporation under the Bank of Canada Act and is wholly owned by the Government of Canada and is exempt from income taxes. The Bank is a Government Business Enterprise, as defined by the Public Sector Accounting Board Handbook and, as such, adheres to the standards applicable to publicly accountable enterprises as outlined by the Canadian Institute of Chartered Accountants (CICA).
The responsibilities of the Bank focus on the goals of low and stable inflation, financial system stability, a safe and secure currency, and the efficient management of government funds and public debt. These responsibilities are carried out as part of the broad functions described below.
Contributes to solid economic performance and rising living standards for Canadians by keeping inflation low, stable and predictable.
Promotes a safe, sound and efficient financial system, both within Canada and internationally.
Designs, produces and distributes Canada’s bank notes, focusing on the deterrence of counterfeiting through research on security features, public education and partnership with law enforcement; replaces and destroys worn and withdrawn notes.
Provides high-quality, effective and efficient funds-management services: for the Government of Canada, as its fiscal agent; for the Bank; and for other clients.
Compliance with International Financial Reporting Standards (IFRS)
These financial statements have been prepared in accordance with IFRS and conform to the disclosure and accounting requirements of the Bank of Canada Act and the Bank’s bylaws.
The Board of Directors approved the financial statements on February 15, 2013.
The financial statements have been prepared on the historical cost basis, except for the available-for-sale financial assets (AFS), which are measured at fair value, and the defined-benefit assets and obligations, which are recognized as the net of the plan assets, and the present value of the defined-benefit obligation.
Significant accounting estimates and judgments in applying accounting policies
The preparation of the financial statements requires management to make judgments, estimates and assumptions based on information available at the statement date that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and related information. Actual results could differ from these estimates, in which case the impact will be recognized in the financial statements of a future fiscal period.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. These estimates are primarily in the area of employee benefit plans (note 14) and the fair values of certain financial instruments and collateral taken (note 7).
The Bank’s functional and presentation currency is the Canadian dollar.
Fiscal-agent and custodial activities
Responsibility for the operational management of the Government of Canada’s financial assets and liabilities is jointly borne by both the Bank (as fiscal agent for the Government) and the Department of Finance. In this fiscal-agent role, the Bank provides transactional and administrative support to the Government of Canada in certain areas. Assets, liabilities, expenditures and revenues to which this support relates are those of the Government of Canada and are not included in the financial statements of the Bank.
Securities safekeeping and gold custodial activities are provided to foreign central banks and international organizations. The assets, and income arising thereon, are excluded from these financial statements, since they are not assets or income of the Bank.
The significant accounting policies of the Bank are summarized below. These policies have been consistently applied to all years presented, unless otherwise stated.
(a) Translation of foreign currencies
Investment income and expenses denominated in foreign currencies are translated at the exchange rate in effect at the date of the transaction. Fair-value items denominated in foreign currencies are translated at the exchange rate in effect at the date of the fair-value measurement. Monetary assets and liabilities denominated in foreign currencies are translated to Canadian dollars at the rates of exchange prevailing at the end of the reporting period. The resulting gains and losses are included in Other revenue. Gains or losses on equity investments classified as AFS, along with any exchange-related gains or losses, are recognized in the available-for-sale reserve within Other Comprehensive Income.
The Bank accounts for all financial instruments using settlement-date accounting. Financial instruments are measured at fair value on initial recognition, plus transaction costs, if any, for all financial assets not carried at fair value through net income. Subsequent to initial recognition, they are accounted for based on their classification.
Subsequent to initial recognition, financial assets classified as AFS are measured at fair value using quoted market prices, with the exception of the Bank for International Settlements (BIS) shares, which are measured using significant non-observable inputs. Unrealized changes in the values of AFS financial assets measured at fair value are recognized in Other Comprehensive Income and accumulated in the available-for-sale reserve in equity until the financial asset is derecognized or becomes impaired. At that time, the cumulative unrealized gain or loss previously recognized in Other Comprehensive Income is reclassified from equity to net income. The Bank’s financial assets designated as AFS consist of Government of Canada treasury bills and other investments, which comprise BIS shares.
Financial assets that the Bank has the intent and ability to hold to maturity are classified as held-to-maturity (HTM). Subsequent to initial recognition, financial assets classified as HTM are measured at amortized cost using the effective interest method less any impairment losses. The effective interest method uses the rate inherent in a financial instrument that discounts the estimated future cash flows over the expected life of the financial instrument so as to recognize interest on a constant-yield basis. Government of Canada bonds are classified as HTM.
The Bank has not classified any of its financial assets as fair value through net income, other than cash and foreign deposits.
All other financial assets are classified as loans and receivables. Subsequent to initial recognition, these are measured at amortized cost less any impairment losses using the effective interest method of amortization.
The Bank derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire. On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in net income.
The Bank has classified its financial liabilities as other liabilities. These liabilities are initially recognized at fair value. Subsequent to initial recognition, financial liabilities are measured at amortized cost using the effective interest method, with the exception of bank notes in circulation, which are measured at face value. The Bank has not classified any of its financial liabilities as fair value through net income.
The Bank derecognizes financial liabilities when the Bank’s obligations are discharged, cancelled or expire. The difference between the carrying amount of the financial liability derecognized and the sum of the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in net income.
(c) Securities purchased under resale agreements
Securities purchased under resale agreements are reverse repo-type transactions in which the Bank purchases securities from designated counterparties with an agreement to sell them back at a predetermined price on an agreed transaction date. For accounting purposes, these agreements are treated as collateralized lending transactions and are recorded on the Statement of Financial Position at the amounts at which the securities were originally acquired, plus accrued interest.
(d) Securities sold under repurchase agreements
Securities sold under repurchase agreements are repo-type transactions in which the Bank sells Government of Canada securities to designated counterparties with an agreement to buy them back at a predetermined price on an agreed transaction date. For accounting purposes, these agreements are treated as collateralized borrowing transactions and are recorded on the Statement of Financial Position at the amounts at which the securities were originally sold, plus accrued interest.
(e) Securities Lending Program
The Bank operates a Securities Lending Program to support the liquidity of Government of Canada securities by providing a secondary and temporary source of these securities to the market. These securities-lending transactions are fully collateralized by securities and are generally one business day in duration. The securities loaned continue to be accounted for as investment assets. Lending fees charged by the Bank on these transactions are included in Other revenue at the maturity date of the transaction.
Property and equipment consists of land, buildings, computer equipment, other equipment and related projects in progress. Property and equipment is recorded at cost less accumulated depreciation, except for land, which is not depreciated, and is net of any related impairment losses. Projects in progress are recorded at cost but are not depreciated until the asset is available for use. Cost includes expenditures that are directly attributable to the acquisition or construction of the asset.
When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment. Upon replacing a significant part of an item of property and equipment, the carrying amount of the replaced part is derecognized.
Depreciation is calculated using the straight-line method and is applied over the estimated useful lives of the assets, as shown below. The estimated useful life and depreciation method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
Intangible assets are identified non-monetary assets without physical substance. The Bank’s intangible assets consist of computer software internally developed or externally acquired.
Costs that are directly associated with the internal development of identifiable software are recognized as intangible assets if, in management’s best estimate, the asset can technically be completed and will provide a future economic benefit to the Bank. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates.
Computer software assets that are acquired by the Bank and have finite useful lives are measured at cost less accumulated amortization and accumulated impairment losses.
Amortization is calculated using the straight-line method and is applied over the estimated useful lives of the assets, which may vary from 3 to 15 years. The estimated useful life and amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
(h) Bank note inventory
Bank note inventory consists of production materials, including polymer substrate and ink, and is recorded at the lower of cost and the net realizable value. The cost to produce finished bank notes is expensed as incurred.
(i) Leases
Where the Bank is a lessee
Leases of equipment where the Bank has assumed substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease’s inception at the lower of the fair value of the leased asset or the present value of the minimum lease payments. The corresponding lease obligations, net of finance charges, are included in Other liabilities. Each lease payment is allocated between the liability and finance charges to achieve a constant rate of return on the finance lease obligation outstanding. Equipment acquired under finance leases is depreciated over the shorter of the asset’s useful life or the lease term.
Other leases are classified as operating leases. Payments made under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the period of the lease.
Where the Bank is a lessor
Leases granted on the Bank’s property were assessed and classified as operating leases because the risks and rewards of ownership are not transferred to the lessees. Operating lease income is recognized on a straight-line basis over the period of the lease.
For financial assets that are not classified as fair value through net income, the Bank assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of assets is impaired. Once impaired, financial assets carried at amortized cost are remeasured at the net recoverable amount, with the amount of impairment recognized in net income. Unrealized losses on impaired AFS financial assets are recognized in net income at the time of impairment.
Non-financial assets, including property and equipment, and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount exceeds its recoverable amount.
Intangible assets under development are assessed for impairment on an annual basis.
(k) Employee benefits
Short-term employee benefits include cash salary, bonus, annual leave, health benefits, dental care and statutory benefits and are measured on an undiscounted basis.
The Bank sponsors a long-term disability program.
The liability recognized in respect of this plan amounts to the present value of the defined-benefit obligation. The present value of the defined-benefit obligation is calculated by discounting estimated future cash flows using interest rates of high-quality corporate bonds with terms to maturity approximating the estimated duration of the obligation. The expense recognized for the fiscal year consists of current service costs, interest costs, actuarial gains and losses, and past service costs.
The current service costs and the benefit obligations of the plan are actuarially determined on an event-driven accounting basis. Actuarial gains and losses are recognized immediately in net income in the period in which they occur. Past service costs arising from plan amendments are recognized immediately in Staff costs in the period in which they occur.
Post-employment defined-benefit plans
The Bank sponsors a funded defined-benefit pension plan (the Bank of Canada Registered Pension Plan) and a funded defined-benefit supplementary pension arrangement (the Bank of Canada Supplementary Pension Arrangement), which are designed to provide retirement income benefits to eligible employees. Benefits provided under these plans are calculated based on years of service and average full-time salary for the best five consecutive years and are indexed to reflect changes in the consumer price index on the date payments begin and each January 1 thereafter.
Effective January 1, 2012, the plan by-laws were amended to reflect a new defined-benefit plan design for eligible employees hired after that date and for current plan members who selected the new design for service from that date forward. The amendment increased the age at which members are entitled to receive pension benefits, removed the bridge benefit and adjusted employee contributions.
The Bank also sponsors other unfunded post-employment defined-benefit plans, which include life insurance and eligible health and dental benefits, as well as a long-service benefit program for employees hired before January 1, 2003.
The net asset or liability of these plans is recorded on the Statement of Financial Position. The asset or liability recognized at fiscal year-end in respect of these plans is composed of the present value of the defined-benefit obligation less the fair value of plan assets, where applicable. The present value of the defined-benefit obligation is calculated by discounting estimated future cash flows using interest rates of high-quality corporate bonds with terms to maturity approximating the estimated duration of the obligation. The expense recognized for the fiscal year consists of current service costs, interest costs, expected return on plan assets and past service costs.
The current service costs and the benefit obligations of the plans are actuarially determined using the projected unit credit method. Actuarial gains or losses arise from the difference between the actual rate of return and the expected rate of return on plan assets for that period and from changes in the actuarial assumptions used to determine the accrued benefit obligation. Actuarial gains or losses are recognized immediately in the period in which they occur in Other Comprehensive Income. Past service costs arising from plan amendments that have vested are immediately recognized as an expense. Non-vested past service costs are amortized over the period until the related benefits become vested. Plan assets of funded benefit plans are determined according to their estimated fair value at the end of the fiscal year.
A provision is recognized if, as a result of a past event, the Bank has a present legal or constructive obligation that can be estimated reliably as at the statement of financial position date, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are included under Other liabilities (note 13).
(m) Revenue recognition
Interest revenue earned on Government of Canada treasury bills and bonds is recorded using the effective interest method. Dividend revenue on the BIS shares is recorded as dividends are declared.
Realized gains (losses) on the sale of Government of Canada treasury bills are recorded at the time of sale as a reclassification from Other Comprehensive Income and are calculated as the excess of proceeds over the amortized cost at the transaction date.
Interest earned on securities purchased under resale agreements is recorded using the effective interest method.
Other revenue is composed mostly of interest earned on advances to members of the Canadian Payments Association (CPA) and is recorded using the effective interest method.
(n) Changes in accounting policies
The Bank adopted the amendments to IFRS 7 Financial Instruments: Disclosures (IFRS 7), effective January 1, 2012. IFRS 7 was amended in October 2010 to provide additional disclosure on the transfer of financial assets, including the possible effects of any residual risks that the transferring entity retains. These amendments require disclosure relating to the Bank’s securities sold under repurchase agreements and securities-lending transactions. There was no material impact on the financial statements as a result of these amendments.
IAS 1 Presentation of financial statements (IAS 1) was amended in June 2011 to provide additional disclosure in the Other Comprehensive Income section of the financial statements by grouping items of Other Comprehensive Income into two categories: (i) items that will not be reclassified to net income; and (ii) items that may subsequently be reclassified to net income when specific conditions are met. The amendments are effective for annual periods beginning on or after July 1, 2012, and are to be applied retrospectively. The Bank early adopted these amendments effective January 1, 2012, and applied them retrospectively. The adoption of these amendments resulted only in presentation changes on the Statement of Comprehensive Income.
(o) Future changes in accounting policies
The following new standards and amendments issued by the International Accounting Standards Board (IASB) have been assessed as having a possible effect on the Bank in the future. The Bank is currently determining the impact of these standards and amendments on its financial statements.
(i) Standards effective for annual and interim financial statements for periods beginning on or after January 1, 2013
In June 2011, the IASB published an amended version of IAS 19 Employee Benefits (IAS 19). Adoption of the amendment is required for annual periods beginning on or after January 1, 2013, with early adoption permitted. The amendment is generally applied retrospectively with certain exceptions.
The amendments require the following:
• immediate recognition of actuarial gains and losses in Other Comprehensive Income;
• immediate full recognition of past service costs in profit or loss;
• recognition of expected return on plan assets in profit or loss to be calculated based on the rate used to discount the defined-benefit obligation; and
• additional disclosures that explain the characteristics of the entity’s defined-benefit plans and risks associated with the plans, as well as disclosures that describe how defined-benefit plans may affect the amount, timing and uncertainty of future cash flows, and details of any asset-liability match strategies used to manage risks.
The amendments also affect termination benefits, which would now be recognized at the earlier of: when the entity recognizes costs for a restructuring within the scope of IAS 37 Provisions or when the entity can no longer withdraw the offer of the termination benefits.
The Bank will not be affected by the elimination of the corridor approach, since the policy to immediately recognize all actuarial gains and losses was adopted at the time of the Bank’s transition to IFRS.
While the final quantitative impact of adopting the amendments cannot be confirmed, the estimated net impact of the restatement for the year ended December 31, 2012, will be an increase in benefit plan expenses and a reduction of actuarial losses on defined-benefit plans of $16 million.
On May 12, 2011, the IASB issued IFRS 11 Joint Arrangements (IFRS 11). IFRS 11 provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. The standard addresses inconsistencies in the reporting of joint arrangements by requiring a single method to account for interests in jointly controlled entities.
The Bank is currently evaluating the impact and has made a preliminary determination that IFRS 11 will result in additional disclosures but will not have an impact on the Bank’s financial statements. IFRS 11 is to be applied retrospectively.
On May 12, 2011, the IASB issued IFRS 12 Disclosure of Interests in Other Entities (IFRS 12). IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities.
The Bank is currently evaluating the impact and has made a preliminary determination that IFRS 12 will result in additional disclosures but will not have an impact on the Bank’s financial statements. IFRS 12 is to be applied retrospectively.
On May 12, 2011, the IASB issued IFRS 13 Fair Value Measurement (IFRS 13). IFRS 13, which is effective from January 1, 2013, defines fair value, sets out in a single IFRS a framework for measuring fair value and requires disclosures about fair-value measurements. IFRS 13 does not determine when an asset, a liability or an entity’s own equity instrument is measured at fair value. Rather, the measurement and disclosure requirements of IFRS 13 apply when another IFRS requires or permits the item to be measured at fair value (with limited exceptions).
The Bank is currently evaluating the impact and has made a preliminary determination that IFRS 13 will result in additional disclosures but will not have an impact on the Bank’s financial statements. IFRS 13 is to be applied prospectively.
IFRS 7 and IAS 32
IFRS 7 Financial Instruments: Disclosures (IFRS 7) and IAS 32 Financial Instruments: Presentation (IAS 32) were amended in December 2011 to provide additional accounting requirements and disclosures related to the offsetting of financial assets and financial liabilities. The new disclosures under IFRS 7 are effective for annual and interim financial statements for periods beginning on or after January 1, 2013. The clarifying amendments to IAS 32 are effective for annual periods beginning on or after January 1, 2014. The Bank is currently evaluating the impact of these amendments to IFRS 7 and IAS 32 on its financial statements and has made a preliminary determination that they do not have an impact on the Bank’s financial statements.
(ii) Standards effective for annual periods beginning on or after January 1, 2015
IFRS 9 Financial Instruments (IFRS 9) as issued in November 2009 and revised in October 2010, and the related consequential amendments, will replace International Accounting Standard 39 Financial Instruments: Recognition and Measurement (IAS 39). IFRS 9 relates to the recognition and derecognition and measurement of financial assets and financial liabilities.
IFRS 9 eliminates the existing financial asset categories and requires all financial assets to be classified on initial recognition, either at amortized cost or at fair value on the basis of the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.
Gains and losses on financial assets measured at fair value will be recognized through net income, with the exception of equity investments not held for trading, which the Bank elects on initial recognition to have gains or losses recognized directly in equity.
The new standard also requires the use of a single impairment method for financial assets based on expected losses and incurred losses, replacing the multiple impairment methods in IAS 39.
IFRS 9 requires all financial liabilities not designated at fair value through net income to be subsequently measured at amortized cost using the effective interest method.
IFRS 9 is effective for annual periods beginning on or after January 1, 2015, although early adoption is permitted. The Bank is currently evaluating the impact of IFRS 9 on its financial statements, and will continue to do so as the remaining stages of this project, relating to hedge accounting and financial asset impairment, are finalized.
4. Cash and foreign deposits
Cash and foreign deposits is composed of cash on hand as well as highly liquid demand deposits in foreign currencies with other central banks or international financial institutions. Included in this balance is CAN$6.7 million (CAN$6.2 million at December 31, 2011) of foreign deposits.
5. Loans and receivables
Loans and receivables are composed primarily of securities purchased under resale agreements and, if any, advances to members of the Canadian Payments Association. These transactions are fully collateralized in accordance with publicly disclosed collateral eligibility and margin requirements. Financial risks related to these instruments are discussed in note 7.
(a) Securities purchased under resale agreements
Securities purchased under resale agreements for terms of one business day are acquired to reinforce the target overnight interest rate. Securities are acquired through buyback transactions with primary dealers where the counterparties may accept an amount up to their pre-specified limit.
Securities purchased under resale agreements for terms of longer than one business day are acquired through an auction process. Details of these auctions are announced by the Bank in advance. Bids are submitted on a yield basis, and funds are allocated in descending order of bid yields.
Balances outstanding at December 31, 2012, consist of agreements with original terms to maturity ranging from 23 to 24 days. (Balances outstanding at December 31, 2011, consist of an agreement with original terms to maturity of 14 days.)
(b) Advances to members of the CPA
Advances to members of the CPA are typically composed of liquidity loans made under the Bank’s Standing Liquidity Facility. These advances mature the next business day. Interest on overnight advances is calculated at the Bank Rate. The Bank Rate is the rate of interest that the Bank charges on one-day loans to major financial institutions.
There were no securities loaned under the Securities Lending Program at December 31, 2012 ($Nil at December 31, 2011).
In Other investments, the Bank holds 9 441 BIS shares (9 441 BIS shares at December 31, 2011) in order to participate in the BIS. Ownership of the BIS shares is limited to central banks, and new shares can only be acquired following an invitation to subscribe extended by the BIS Board of Directors. The shares are non-transferable unless prior written consent is obtained from the BIS.
7. Financial instruments and risk management
The Bank’s financial instruments consist of cash and foreign deposits, securities purchased under resale agreements, advances to members of the CPA, other receivables, investments (consisting of Government of Canada treasury bills, Government of Canada bonds and shares in the BIS), bank notes in circulation, deposits and other liabilities (excluding post-employment and long-term employee benefit obligations).
Cash and foreign deposits, Government of Canada treasury bills and BIS shares are measured at fair value. All other financial instruments are measured at amortized cost using the effective interest method, with the exception of bank notes in circulation, which are measured at face value.
(i) Carrying amount and fair value of financial instruments
The carrying amount and fair values of financial assets and liabilities are presented in the following table:
60,881.8
48,511.0
77,519.7
82,124.2
63,966.7
68,924.4
77,165.9
63,641.9
(ii) Financial instruments measured at fair value
Financial instruments measured at fair value are classified using a fair-value hierarchy that reflects the significance of the inputs used in making the measurements:
Level 2 — inputs other than quoted prices included in Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 — inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
The fair-value hierarchy requires the use of observable market inputs wherever such inputs exist. A financial instrument is classified at the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.
Financial assets at fair value as at December 31, 2012
BIS shares
18,994.1
19,336.8
Financial assets at fair value as at December 31, 2011
18,557.3
18,882.6
There were no transfers of amounts between levels in 2012.
The fair value of the BIS shares is estimated as being 70 per cent of the Bank’s interest in the net asset value (NAV) of the BIS at the reporting date. This formula is equivalent to the methodology applied by the BIS to determine the pricing of any new shares issued. While the Bank considers that the 30 per cent discount against the BIS’s net asset value continues to be the appropriate basis for valuation, the valuation inputs are not considered to be observable, and a 5 per cent change in discount to the NAV would not materially impact the fair value of the BIS shares. There were no changes to the valuation technique during the year.
The following table reconciles the estimated fair value of the BIS shares determined using Level 3 fair value measurements for the period from January 1 to December 31:
Opening balance at beginning of year
Change in fair value recorded through OCI
Closing balance at end of year
(iii) Financial instruments not measured at fair value
Fair values of securities purchased under resale agreements are determined using market yields to maturity for similar instruments available at the Statement of Financial Position date.
Fair values of Government of Canada bonds are determined based on unadjusted quoted market prices in an active market.
The carrying amount of cash and foreign deposits, advances to members of the CPA, other receivables, deposits, and other financial liabilities (which is composed of other liabilities, excluding the portion representing accrued benefits liabilities as described in note 14) approximates fair value, given their short-term nature. The face value of bank notes in circulation is equal to their fair value.
(b) Financial risk
The Bank has a well-established framework for identifying, managing and monitoring pertinent areas of risk. This framework is supported by the Board of Directors, which ensures that the Bank has a robust risk-management process in place. The Bank is exposed to financial risk (credit risk, market risk and liquidity risk) associated with the management of the Bank’s financial assets and liabilities. The Financial Risk Office, which is independent of operations, monitors and reports on the financial risks relating to the Bank’s balance sheet. The following is a description of those risks and how the Bank manages its exposure to them.
Credit risk is the risk that a counterparty to a financial contract will fail to discharge its obligations in accordance with agreed-upon terms.
The Bank is exposed to credit risk through its cash and foreign deposits, investment portfolio, and advances to members of the CPA, and through market transactions conducted in the form of securities purchased under resale agreements and loans of securities. The maximum exposure to credit risk is estimated to be the carrying value of the items listed above. There are no past due or impaired amounts.
Advances to members of the CPA and securities purchased under resale agreements are fully collateralized loans. Collateral is taken in accordance with the Bank’s publicly disclosed eligibility criteria and margin requirements accessible on its Web site. Strict eligibility criteria are set for all collateral, and the Bank requires excess collateral relative to the size of the loan provided.
In the unlikely event of a counterparty default, collateral can be liquidated to offset credit exposure. The credit quality of collateral is managed through a set of restrictions based on asset type, term to maturity, and the credit ratings of the securities pledged.
The credit risk associated with the Bank’s investment portfolio, representing 97 per cent of the carrying value of its total assets (97 per cent in 2011), is low because the securities held are primarily direct obligations of the Government of Canada, which holds a credit rating of AAA. The Bank’s advances to members of the CPA and securities purchased under resale agreements, representing 2 per cent of the carrying value of its total assets (2 per cent in 2011), are collateralized obligations of various Canadian-based financial institutions.
Collateral held against securities purchased under resale agreements at the end of the reporting period was in the form of securities issued or guaranteed by the Government of Canada. The fair value of collateral held totalled $1,864.0 million, representing 101 per cent of the amortized cost of $1,838.3 million ($1,481.0 million, representing 102 per cent of the amortized cost at December 31, 2011).
Large Value Transfer System (LVTS) Guarantee
The Bank is exposed to credit risk through its guarantee of the LVTS. The maximum exposure under this guarantee is described in note 17, Commitments, contingencies and guarantees.
(ii) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk.
The Bank’s investment in Government of Canada treasury bills and bonds counteracts the non-interest-bearing bank notes in circulation liability, and supports the Bank’s operational independence to conduct monetary policy. These assets are acquired in proportions that broadly resemble the structure of the Government of Canada’s domestic debt outstanding in order to reduce interest rate risk from the perspective of the Government of Canada.
The Bank’s exposure to fair-value interest rate risk arises principally through its investment in Government of Canada treasury bills, which are short term in duration, and Government of Canada bonds. The fair value of the Government of Canada treasury bills portfolio held by the Bank is exposed to fluctuations owing to changes in market interest rates. Unrealized gains and losses on the Government of Canada treasury bill portfolio are recognized in the Available-for-sale reserve in the Equity section of the Statement of Financial Position until they mature or are sold. Government of Canada bonds are carried at amortized cost and are acquired with the intention of holding them to maturity. All other financial assets or liabilities with an interest rate component are carried at amortized cost or at face value.
The Bank’s revenue will vary over time in response to future movements in interest rates. These variations would not affect the ability of the Bank to fulfill its obligations, since its revenues greatly exceed its expenses.
The figures below show the effect at December 31 of an (increase)/decrease of 25 basis points in interest rates on the fair value of the Government of Canada treasury bill portfolio and other comprehensive income.
$(16.2) / 15.4
$(15.9) / 15.4
The Bank’s exposure to interest rate risk in the form of fluctuations in future cash flows of existing financial instruments is limited to Government of Canada deposits and cash and foreign deposits, since these instruments are subject to variable interest rates. The remainder of the Bank’s financial assets and liabilities have either fixed interest rates or are non-interest-bearing.
The figures below show the effect at December 31 of an increase/(decrease) of 25 basis points in interest rates on the interest expenses paid on Government of Canada deposits.
Interest expense on Government of Canada deposits
$20.5 / (20.5)
$5.0 / (5.0)
For all financial instruments, except bank notes in circulation, the future cash flows of the Bank are dependent on the prevailing market rate of interest at the time of renewal.
The following table illustrates interest rate risk relative to future cash flows by considering the expected maturity or repricing dates of existing financial assets and liabilities.
Weighted-average interest rate %
Non-interest-sensitive
1 business day to 1 month
Advances to members of the CPA
7,039.2
8,898.9
Government of Canada bonds (see footnote d)
5,987.2
30,439.4
18,010.4
Shares in the BIS
8,879.5
14,886.1
Members of the CPA
64,370.7
12,795.2
Interest rate sensitivity gap
(64,022.5)
(7,839.1 )
6,666.1
Government of Canada bonds (see footnote e)
4,573.2
23,129.2
15,398.7
4,540.2
7,118.3
13,453.4
61,627.5
(61,300.6)
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
The Bank is exposed to currency risk primarily by holding shares in the BIS. These shares are denominated in Special Drawing Rights (SDRs). The SDR serves as the unit of account for the International Monetary Fund (IMF) and its value is based on a “basket” of four major currencies: the euro, the U.S. dollar, the pound sterling and the Japanese yen. SDRs are translated into Canadian-dollar equivalents at the rates prevailing on the date when the fair value is determined.
Consistent with 2011, at December 31, 2012, the Bank did not hold a significant amount of foreign currencies.
Given the small size of the Bank’s net foreign currency exposure relative to its total assets, currency risk is not considered significant.
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from changes in interest and exchange rates), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or by factors affecting all similar financial instruments traded in the market.
The Bank is exposed to other price risk through its investment in the BIS. For accounting purposes, the Bank treats BIS shares as AFS and the fair value of these shares is estimated on the basis of the net asset value of the BIS, less a discount of 30 per cent. Accordingly, these shares are revalued to reflect movements in the net asset value of the BIS and in the Canadian dollar. The price risk faced on BIS shares is incidental to the general reasons for holding them and is immaterial compared with other market risks faced by the Bank.
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. As shown in the following table, the Bank’s largest liability is Bank notes in circulation. As a counterpart to this non-interest-bearing liability with no fixed maturity, the Bank holds a portfolio of highly liquid, interest-bearing securities. In the event of an unexpected redemption of bank notes or a significant withdrawal from the Government of Canada’s deposit for the prudential liquidity management plan, the Bank has the ability to settle the obligation by selling its assets.
As the nation’s central bank, the Bank is the ultimate source of liquid funds to the Canadian financial system and has the power and operational ability to create Canadian-dollar liquidity in unlimited amounts at any time. This power is exercised within the Bank’s commitment to keep inflation low, stable and predictable.
LVTS Guarantee
The Bank is exposed to liquidity risk through its guarantee of the LVTS. The maximum exposure under this guarantee is described in note 17, Commitments, contingencies and guarantees.
The following table presents a maturity analysis of the Bank’s financial assets and liabilities. The balances in this table do not correspond to the balances in the Statement of Financial Position, since the table presents all cash flows on an undiscounted basis.
19,050.0
7,050.0
8,950.0
Government of Canada bonds (see footnote f)
55,344.6
30,295.8
17,268.8
76,649.7
8,880.0
14,900.0
76,804.9
Net maturity difference
(516.2)
(76,455.4)
In cases where counterparties to securities purchased under resale agreements substitute collateral after the outset of an agreement, portions of the carrying values presented may mature earlier than as presented, where the amount maturing early is dependent on the value of the collateral being substituted. Where collateral has been substituted, agreements are typically re-established under the same terms and conditions. The information presented in the above table is prepared according to agreements in place as at December 31, 2012.
Liabilities with no fixed maturity include Bank notes in circulation and Government of Canada Deposits. Historical experience has shown that bank notes in circulation provide a stable source of long-term funding for the Bank. Government of Canada Deposits are deposits held in the Bank’s capacity as the Government of Canada’s fiscal agent.
6,675.0
8,925.0
Government of Canada bonds (see footnote g)
42,994.6
4,560.0
22,990.8
14,993.8
63,462.4
13,485.0
63,403.1
(63,066.1)
Transfers to other asset categories
Projects in progress 2012
Included in Carrying amounts at December 31, 2012
Additions during 2012
Commitments at December 31, 2012
Projects in progress consist primarily of $42.3 million related to the Enhanced Business Continuity initiative (December 31, 2011 — $26.2 million), $8.2 million related to the Head Office Renewal Program (December 31, 2011 — $4.9 million) and $2.3 million related to the Currency equipment adaptation (December 31, 2011 — $1.0 million). The Currency Systems Evolution Program (December 31, 2011 — $1.2 million) was put in service in 2012 and removed from Projects in progress.
As a result of the program to overhaul and modernize the head office building, the estimated useful lives of the components related to the existing facility were adjusted to reflect the planned start of the construction on December 31, 2013. The impact of this change was an increase to depreciation expenses of $2.5 million for the year ended December 31, 2012 and an estimated increase of $17.9 million for the year ending December 31, 2013.
Commitments consist primarily of $17.7 million related to the program to overhaul and modernize the head office building (December 31, 2011 — $Nil million).
Projects in progress 2011
Included in Carrying amounts at December 31, 2011
Additions during 2011
Commitments at December 31, 2011
Projects in progress consist primarily of $21.7 million related to the Auctions and Markets Applications Program (December 31, 2011 — $11.2 million), $1.7 million related to the Currency equipment adaptation (December 31, 2011 — $1.5 million), $7.7 million related to the data management stream of the Analytic Environment Program (December 31, 2011 — $4.0 million) and $1.4 million related to the Tri-Agency Data Systems Renewal (December 31, 2011 — $Nil million). The Currency Systems Evolution Program (December 31, 2011 — $7.8 million) was put in service in 2012 and removed from Projects in progress.
Bank note inventory
Accrued pension benefit asset (note 14)
11. Bank notes in circulation
In accordance with the Bank of Canada Act, the Bank has the sole authority to issue bank notes for circulation in Canada. A breakdown by denomination is presented below.
17,202.1
16,894.1
10,144.8
9,447.7
32,742.5
31,027.1
Other bank notes
Other bank notes include denominations that are no longer issued but continue to be legal tender. Bank notes in circulation are non-interest-bearing liabilities and are due on demand.
The liabilities within Deposits consist of $13,291.3 million in Canadian-dollar demand deposits ($2,481.0 million at December 31, 2011). The Bank pays interest on the deposits for the Government of Canada, banks and other financial institutions at short-term market rates, and interest expense on deposits is included in the Statement of Comprehensive Income. Further information on the rates of interest is presented in the interest rate risk table in note 7.
Deposits from the Government of Canada consist of $1,701.5 million for operational balances and $10,000.0 million held for the prudential liquidity management plan ($1,512.5 million and $Nil, respectively, at December 31, 2011).
Accrued transfer payment to the Receiver General for Canada
Post-employment defined-benefit obligations (note 14)
All other liabilities and provisions
The accrued transfer payment to the Receiver General for Canada of $82.2 million (December 31, 2011 — $78.4 million) is included in the $1,022.2 million transfer to the Receiver General for the year presented in the Statement of Changes in Equity (December 31, 2011 — $1,067 million), and is included under Other liabilities.
For the year ended December 31, 2012, an amount of $78.4 million related to 2011 net income and $940.0 million related to 2012 net income was remitted to the Receiver General for Canada ($126.1 million related to 2010 net income and $1,030 million related to 2011 net income was remitted in 2011).
Effective January 1, 2012, the plan by-laws were amended to reflect a new defined-benefit plan design for eligible employees hired after that date and for current plan members who selected the new design for service from that date forward.
The Bank also sponsors other benefit plans, which include life insurance and eligible health and dental benefits and a long-term disability program, as well as a long-service benefit program for employees hired before January 1, 2003.
The Bank is the administrator of the pension plans. The Bank’s Board of Directors has established a Pension Committee and has delegated to it the responsibility for carrying out the Bank’s duties as administrator of the plans, including adherence to the guidelines established in the Statement of Investment Policy and Procedures (SIPP) that is approved annually by the Board. A separate trust fund has been established for each plan to receive and invest contributions and pay benefits due under the plans.
The Bank measures its accrued benefits obligations and fair value of plan assets for accounting purposes as at December 31 of each year. The most recent actuarial valuation for funding purposes of the Registered Pension Plan was done as of January 1, 2012, and the next required valuation will be as of January 1, 2013.
The total cash payment for employee future benefits for 2012 was $48.5 million ($52.2 million in 2011), consisting of $38.6 million ($43.1 million in 2011) in cash contributed by the Bank to its pension plans and $9.9 million ($9.1 million in 2011) in cash payments directly to beneficiaries for its other post-employment benefit plans. The total cash payments expected for 2013 are $44.7 million, consisting of $36.5 million in cash contributed to its pension plans and $8.2 million in cash payments to its other post-employment benefit plans.
Regulations governing federally regulated pension plans establish certain solvency requirements that assume that the plans are wound up at the valuation date. The actuarial valuation of the Registered Pension Plan completed at January 1, 2012, reported a solvency deficit of $95.9 million, and the Bank is making additional contributions to fund this solvency deficit over a period of five years. In 2012, $19.4 million of the employer contributions to the plan represented solvency deficit payments. Contributions in 2013 will be based on the actuarial valuation as at January 1, 2013, and are estimated to be $36.5 million, which consists of $20.2 million in regular contributions to cover current service costs and $16.3 toward the elimination of the solvency deficit.
Benefit obligations and plan assets of post-employment defined-benefit and long-term benefit plans were composed of the following components during the year:
Pension benefit plans (see footnote h)
Benefit payments and transfers
Defined-benefit obligation
Defined-benefit obligation at end of year
Defined-benefit asset/(liability)
Accrued pension benefit asset
Post-employment defined-benefit obligations
The Plan’s investments are subject to credit, liquidity and market risks. Of these risks, the most significant is asset volatility, since plan liabilities are calculated using a discount rate set with reference to Canadian AA-corporate bond yield. If plan assets underperform this yield, a deficit will be created. Requirements for asset diversification and investment eligibility serve as basic risk-management tools for the investment portfolio as a whole.
The Plan’s SIPP requires that its investments be held in a diversified mix of asset types and also sets out requirements for investment eligibility. The diversification of assets serves to decrease the variations in the expected return performance of the portfolio. The current practice is to conduct an Asset-Liability Modelling (ALM) study every three years. The ALM assists the Pension Committee in establishing an asset allocation that is consistent with the pension plan’s objectives and the Bank’s risk tolerance.
Plan assets consist of the following:
Debt instruments (see footnote i)
Securities issued or guaranteed by the Government of Canada
Statutory deposit and other
Benefit plan expenses recognized in the Statement of Comprehensive Income are composed of the following components:
Benefit plan expense recognized
Actuarial gains and losses pertaining to post-employment benefit plans are recognized in Other Comprehensive Income and are accumulated in Equity in the Actuarial gains reserve.
Cumulative actuarial losses recognized in Other Comprehensive Income
Cumulative actuarial losses recognized, beginning of year
Actuarial losses recognized in current year
Cumulative actuarial losses recognized, end of year
The significant assumptions used are as follows (on a weighted-average basis):
Benefit plan expense
Expected rate of return on assets
Assumed medical cost trend
Initial medical cost trend rate
Medical cost trend rate declines to
The discount rate is determined by reference to Canadian AA-corporate bonds with terms to maturity approximating the duration of the obligation.
The expected rate of return on assets that is determined by management relates to the entire Plan asset portfolio on a weighted-average basis, and is based on market expectations, at the beginning of the period, for returns over the entire life of the obligation. As such, the expected rate of return may not be indicative of the short-term performance of Plan assets or of market conditions generally.
The assumption for life expectancy for the scheme valuations assumes that a male member reaching 60 in 2012 will live for 25 years (2011: 25 years) and a female member 27 years (2011: 27 years). The mortality assumptions used in the scheme valuations are based on standard tables published by the Society of Actuaries, which were adjusted in line with both current industry and the actual experience of the relevant scheme.
Change in obligation
Impact of 0.50 percentage point increase
Impact of 0.50 percentage point decrease
Medical cost trend rates
Impact of 1.00 percentage point increase
Impact of 1.00 percentage point decrease
The above sensitivity analyses are based on a change in assumptions while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. The method and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous year.
Summary of historical adjustments
(1,468.5)
(1,292.4)
(1,066.6)
(866.6)
Experience adjustments on plan assets
Experience adjustments on plan benefits
Change in actuarial assumptions
15. Equity
The Bank’s objectives in managing its capital are in compliance with the Bank of Canada Act and have not changed from the previous year. There are no other externally imposed capital requirements at the end of the reporting year.
The elements of equity are shown in the table below:
The authorized capital of the Bank is $5.0 million divided into 100 000 shares with a par value of $50 each. The shares are fully paid and have been issued to the Minister of Finance, who is holding them on behalf of the Government of Canada.
The statutory reserve was accumulated out of net income until it reached the stipulated maximum amount of $25.0 million in 1955.
The special reserve was created in 2007 further to an amendment to the Bank of Canada Act to offset potential unrealized valuation losses due to changes in the fair value of the Bank’s available-for-sale portfolio. The amount held in the special reserve is reviewed regularly for appropriateness using value-at-risk analysis and scenario-based stress tests and may be amended, pursuant to a resolution passed by the Board of Directors. The value-at-risk analysis uses historical data to estimate the maximum possible extent of unrealized valuation losses of the Bank’s treasury bill portfolio. The scenario-based stress tests assess the impact of a rapid increase in interest rates on the value of the Bank’s treasury bill portfolio. This reserve is subject to a ceiling of $400 million; an initial amount of $100 million was established in September 2007.
The available-for-sale reserve represents cumulative movements in the fair value of the Bank’s available-for-sale portfolios, as shown below.
The actuarial gains reserve was established on January 1, 2010, upon the Bank’s transition to IFRS at an initial amount of $119.7 million to cover future net actuarial losses and to accumulate the net actuarial gains related to the Bank’s post-employment defined-benefit plans.
Actuarial gains reserve established on January 1, 2010
Accumulated net actuarial losses applied to the reserve
The net income of the Bank, less any allocation to reserves, is considered to be ascertained surplus and is transferred to the Receiver General for Canada, consistent with the requirement of section 27 of the Bank of Canada Act.
Based on an agreement signed with the Minister of Finance, the Bank will deduct from its remittances to the Receiver General and set against Retained earnings an amount equal to unrealized losses on AFS financial assets, unrealized actuarial losses on post-employment benefit plans and other unrealized or non-cash losses that would expose the Bank to the risk of negative capital arising as a result of changes in accounting standards or legislation. During 2012, the Bank withheld $77.6 million ($188.4 million during 2011) and, as at December 31, 2012, $266.0 million ($188.4 million as at December 31, 2011) in withheld remittances was outstanding.
16. Leases
(a) Operating leases commitments
The Bank occupies leased premises in Ottawa, Halifax, Montréal, Toronto, Calgary, and Vancouver. The minimum payments are determined at the beginning of the lease and may vary during the term of the lease. Contingent rent on premises leases is based on building operating costs; for office equipment leases, contingent rent is based on usage.
As a result of the program to overhaul and modernize the head office building, during 2012, the Bank signed a five-year lease agreement for temporary office space. In 2012, provisions totalling $15.1 million for the final year of the lease and for site restoration costs were recorded and are included under Other liabilities.
At December 31, 2012, the future minimum payments are $82.9 million for rent, real estate taxes and building operations. The expiry dates vary for each lease, from October 2013 to October 2025.
Premises leases
Due within one to five years
Due later than five years
Total premises lease commitments
(b) Lease payments receivable
The Bank owns buildings in Ottawa, Montréal and Toronto and leases space to Government of Canada departments and agencies under operating leases. Under the current non-cancellable lease agreements, the total minimum lease payments receivable and contingent rent included in income are as follows:
Lease payments receivable
Receivable within one year
Receivable within one to three years
Total lease payments receivable
17. Commitments, contingencies and guarantees
(a) Long-term contracts other than leases
The Bank has a long-term contract with an outside service provider for retail debt services that expires in 2021. At December 31, 2012, fixed payments totalling $172.9 million remained, plus a variable component based on the volume of transactions.
In 2010, the Bank entered into a long-term agreement with an outside service provider for data centre services that commences in 2013 and expires in 2022. Fixed payments over the term of the agreement totalling $17.5 million will begin on January 1, 2013.
Commitments related to the program to overhaul and modernize the head office building are included in commitments for Property and equipment in note 8.
Minimum annual payments for long-term contracts other than leases
Due within three to five years
Total minimum annual payments
(b) Foreign currency contracts
The Bank is a counterparty to several foreign currency swap facilities as follows:
Bilateral liquidity swap facilities with central banks
Bank of Japan (denominated in Japanese yen)
Swiss National Bank (denominated in Swiss francs)
Bank of England (denominated in British pounds)
European Central Bank (denominated in euros)
Federal Reserve Bank of New York (denominated in U.S. dollars)
Other swap facilities
Exchange Fund Account of Canada (denominated in Canadian dollars)
Banco de México (denominated in Canadian dollars)
The bilateral liquidity swap facilities were established to provide liquidity in each jurisdiction in any of their currencies, should market conditions warrant.
The US$30 billion facility with the Federal Reserve Bank of New York expires on February 1, 2014. The swap facilities with the Bank of Japan, the Swiss National Bank, the Bank of England and the European Central Bank expire on February 1, 2014.
These facilities can be structured as either a Canadian-dollar liquidity or a foreign currency liquidity swap arrangement and can be initiated by either party. The exchange rate applicable to the swap facilities is based on the prevailing market spot exchange rate as mutually agreed upon by the parties.
The other swap facilities established with the Federal Reserve Bank of New York and with the Banco de México have indefinite terms and are subject to annual renewal, expiring on December 14, 2013.
The Bank is also party to a standing foreign currency swap facility with the Exchange Fund Account of Canada. There is no stated maximum amount under this agreement.
None of the liquidity or other swaps were accessed, by either party, in 2012 or 2011. No related commitments exist at December 31, 2012 ($Nil at December 31, 2011).
(c) Contingency
The 9 441 shares in the BIS have a nominal value of 5 000 special drawing rights (SDRs) per share, of which, 25% (i.e. SDR1,250) is paid up. The balance of SDR3,750 is callable at three months’ notice by a decision of the BIS Board of Directors. The Canadian equivalent of this contingent liability was $54.2 million at December 31, 2012 ($55.3 million at December 31, 2011), based on prevailing exchange rates.
In the normal course of operations, the Bank enters into certain guarantees, which are described below.
The LVTS is a large-value payment system, owned and operated by the CPA. Any deposit-taking financial institution that is a member of the CPA can participate in the LVTS, provided that it maintains a settlement account at the Bank, has the facilities to pledge collateral for LVTS purposes, and meets certain technical requirements. The system’s risk-control features, which include caps on net debit positions and collateral to secure the use of overdraft credit, are sufficient to permit the system to obtain the necessary liquidity to settle in the event of the failure of the single LVTS participant having the largest possible net amount owing. The Bank guarantees to provide this liquidity, and, in the event of a single-participant failure, the liquidity loan will be fully collateralized. In the extremely unlikely event that there were defaults by more than one participant during the LVTS operating day, in an aggregate amount in excess of the largest possible net amount owing by a single participant, there would not likely be enough collateral to secure the amount of liquidity that the Bank would need to provide to settle the system. This might result in the Bank having unsecured claims on the defaulting participants in excess of the amount of collateral pledged to the Bank to cover the liquidity loans. The Bank would have the right, as an unsecured creditor, to recover any amount of its liquidity loan that was unpaid. The amount potentially at risk under this guarantee is not determinable, since the guarantee would be called upon only if a series of extremely low-probability events were to occur. No amount has ever been provided for in the liabilities of the Bank, and no amount has ever been paid under this guarantee.
Other indemnification agreements
In the normal course of operations, the Bank provides indemnification agreements with various counterparties in transactions such as service agreements, software licences, leases and purchases of goods. Under these agreements, the Bank agrees to indemnify the counterparty against loss or liability arising from acts or omissions of the Bank in relation to the agreement. The nature of the indemnification agreements prevents the Bank from making a reasonable estimate of the maximum potential amount that the Bank would be required to pay such counterparties. No amount has ever been paid under such indemnifications.
The Bank does not insure against direct risks of loss to the Bank, except for potential liabilities to third parties and where there are legal or contractual obligations to carry insurance. Any costs arising from risks not insured are recorded in the accounts if, as a result of a past event, the Bank has a present legal or constructive obligation that can be estimated reliably as at the statement of financial position date, and it is probable that an outflow of economic benefits will be required to settle the obligation.
The Bank is related in terms of common ownership to all Government of Canada departments, agencies and Crown corporations. To achieve its monetary policy objectives, the Bank maintains a position of structural and functional independence from the Government of Canada through its ability to fund its own operations without external assistance and through its management and governance.
In the normal course of its operations, the Bank enters into transactions with related parties, and material transactions and balances are presented in these financial statements. Not all transactions between the Bank and government-related entities have been disclosed as permitted by the partial exemption available to wholly owned government entities in International Accounting Standard 24 Related Parties (IAS 24).
The Bank provides funds-management, fiscal-agent and banking services to the Government of Canada, as mandated by the Bank of Canada Act, and does not recover the costs of these services.
Bank of Canada pension plans
The Bank provides management, investment and administrative support to the Bank of Canada Registered Pension Plan. Services in the amount of $0.6 million ($0.6 million in 2011) were fully recovered from the Plan in 2012.
Key management personnel and compensation
The key management personnel, responsible for planning, directing and controlling the activities of the Bank, are the members of the Governing Council, the Management Council and the Board of Directors. The number of key management personnel as at December 31, 2012, was 22 (23 in 2011).
The compensation of key management personnel is presented in the following table:
Short-term employee benefits and post-employment benefits apply to Bank of Canada employees only.
There were no other long-term employee benefit costs or termination benefits related to key management personnel in 2012.
Updated Ministerial Instructions
Notice is hereby given, under subsection 87.3(6) of the Immigration and Refugee Protection Act, that the Minister of Citizenship, Immigration and Multiculturalism has established the following Ministerial Instructions that, in the opinion of the Minister, will best support the attainment of the immigration goals established by the Government of Canada.
Authority for Ministerial Instructions is derived from section 87.3 of the Immigration and Refugee Protection Act (IRPA). Instructions are directed to officers and their delegates who are charged with handling and/or reviewing applications for permanent or temporary visas to enter Canada.
The Instructions are consistent with the IRPA objectives as laid out in section 3 of the Act and are compliant with the Canadian Charter of Rights and Freedoms.
The Instructions do not apply to refugees or protected persons or persons making a request on humanitarian or compassionate grounds from within Canada.
The Instructions respect all previously established accords and agreements including the Quebec-Canada Accord and all existing agreements with provinces and territories.
These Ministerial Instructions identify eligibility criteria for applications and requests for certain immigration categories. Applications meeting these criteria are eligible for processing under these Instructions.
These Instructions will come into force on May 4, 2013, and apply to applications received by designated CIC offices on or after May 4, 2013.
All applications received by designated CIC offices prior to May 4, 2013, shall continue to be considered for processing according to the Ministerial Instructions in place at the time of their receipt.
These Instructions are intended to manage the processing of new applications received for the Federal Skilled Worker Class in order to help address key labour market pressures faced by the Canadian economy while enabling CIC to continue to reduce application inventories and prepare for the introduction of a new application management system.
Cap on the number of applications to be processed per year
A maximum of 6 000 new complete applications submitted for the Federal Skilled Worker Class, without an offer of arranged employment, will be considered for processing per 12-month period. The maximum of 6 000 new complete applications is allocated as follows:
A maximum of 5 000 applications will be considered for processing under an occupation list stream. Within the 5 000 cap, a maximum of 300 applications submitted for each eligible occupation set out below will be considered for processing each year; and
A maximum of 1 000 applications will be considered for processing under a PhD student/graduate stream each year.
For further clarity, there is no limit on the number of new applications with offers of arranged employment that will be considered for processing.
In calculating the caps, applications will be considered in order of the date they are received. Applications received on the same date will be considered for processing having regard to routine office procedures.
For the unique purpose of calculating the caps, the cap year will begin on May 4, 2013, and end on April 30, 2014, unless otherwise indicated in a future Ministerial Instruction. Subsequent years will be calculated from May 1 to April 30, unless otherwise indicated in a future Ministerial Instruction.
Instructions for processing Federal Skilled Worker Class applications
In order to be included under the caps and considered for processing, applications must be completed according to the application kit requirements in place at the time the application is received by the designated office and must meet the criteria set out below.
Complete Federal Skilled Worker applications received by the Centralized Intake Office in Sydney, Nova Scotia, on or after May 4, 2013, whose applicants meet the language threshold for the Federal Skilled Worker Class as set by the Minister pursuant to subsection 74(1) of the Immigration and Refugee Protection Regulations, in each of the four language abilities (speaking, reading, writing, oral comprehension); (see footnote 1) that provide evidence of the applicant having at least 1 year of continuous, full-time or equivalent part-time, paid work experience acquired in the last 10 years in the primary skilled occupation as specified in the application; (see footnote 2) and that do not exceed the caps set out above, shall be placed into processing if they meet one of the following three criteria:
1. Offer of arranged employment stream: Applications submitted with a qualifying offer of arranged employment as described in subsection 82(1) and consistent with the requirements of subsection 82(2) of the Immigration and Refugee Protection Regulations.
2. Occupation list stream: Applications from skilled workers who, as per the 2011 version of the National Occupational Classification (NOC), have experience in one of the following eligible occupations and have indicated this occupation as their primary occupation in their application:
3. PhD student/graduate stream
i. Applications from international students who are currently enrolled in a PhD program delivered by a provincially or territorially recognized private or public post-secondary educational institution located in Canada, who have completed at least two years towards their PhD, who are in good academic standing, and who are not recipients of a Government of Canada award requiring them to return to their home country to apply their knowledge and skills; (see footnote 3) or
ii. Applications from foreign nationals who have completed a PhD program from a provincially or territorially recognized private or public post-secondary educational institution located in Canada no more than 12 months prior to the date their application is received by the Centralized Intake Office in Sydney, Nova Scotia. Applicants must not have received a Government of Canada award that required them to return to their home country to apply their knowledge and skills; or if they were a recipient of such an award, they must have satisfied the terms of the award. (see footnote 4)
In all cases, applicants meeting the criteria set out in Ministerial Instructions are still subject to the Federal Skilled Worker Class requirements and all other applicable requirements of the IRPA.
Cap and sub-caps on the number of applications to be processed per year
A maximum of 3 000 new applications submitted for the Federal Skilled Trades Class will be considered for processing per 12-month period.
Within the 3 000 cap, a maximum of 100 new applications submitted for each of the skilled trade occupations set out in Group A below will be considered for processing each year. No such sub-cap will apply to applications submitted for skilled trade occupations in Group B. For further clarity, the total of all applications considered for processing shall not exceed 3 000. As well, caps apply irrespective of whether an application is made with a qualifying offer of employment or a certificate of qualification from a provincial or territorial apprenticeship authority.
Instructions for processing Federal Skilled Trades Class applications
Complete applications from skilled tradespersons received by the Centralized Intake Office in Sydney, Nova Scotia, on or after May 4, 2013, whose applicants meet the language threshold for the Federal Skilled Trades Class as set by the Minister pursuant to subsection 74(1) of the Immigration and Refugee Protection Regulations, in each of the four language abilities (speaking, reading, writing, oral comprehension), (see footnote 5) and that do not exceed the identified caps, shall be placed into processing if they,
as per the 2011 version of the National Occupational Classification (NOC), provide evidence of the applicant having at least two years (24 months) of full-time or equivalent part-time paid work experience, acquired in the last five years, in one of the eligible skilled trade occupations (see footnote 6) in either Group A or B, set out below:
Group A — Occupations sub-capped at 100 applications per occupation
Group B — Occupations for which there are no sub-caps
7372 Drillers and blasters — surface, mining, quarrying and construction
In all cases, applicants meeting the criteria set out in Ministerial Instructions are still subject to the Federal Skilled Trades Class requirements and all other applicable requirements of the IRPA.
Federal Immigrant Investor Class
The temporary pause on the receipt of new applications in this class is renewed and will remain in place until further notice. This pause is implemented to manage inventory pressures.
Applicants in the Federal Skilled Worker and Federal Skilled Trades Classes whose applications are received on or after May 4, 2013, and who do not meet the criteria described above, shall be informed who their application does not qualify for processing and their processing fees shall be returned.
Interim Order Modifying the Operation of the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations
Whereas certain provisions of part 86 of title 40 of the United States Code of Federal Regulations correspond to certain provisions of the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (see footnote a);
And whereas certain provisions of the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (see footnote b) are inconsistent with part 86 of title 40 of the Code of Federal Regulations as amended by section 18 of the final rule in respect of greenhouse gas emission standards published on September 15, 2011 in volume 76 of the Federal Register of the United States, at page 57377, and by section 13 of the final rule in respect of greenhouse gas emission standards published on October 15, 2012 in volume 77 of the Federal Register of the United States, at page 63156,
Therefore, the Minister of the Environment, pursuant to subsection 163(1) of the Canadian Environmental Protection Act, 1999 (see footnote c), makes the annexed Interim Order Modifying the Operation of the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations.
Gatineau, April 12, 2013
1. For greater certainty, words and expressions used in this Interim Order and defined in the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (in this Order referred to as the “Regulations”) have the same meaning as in those Regulations.
2. (1) Despite section 10 of the Regulations, a company may, in respect of its passenger automobiles and light trucks of a given model year that are emergency vehicles, elect to be exempted from the requirement of conforming to the exhaust emission standards for nitrous oxide (N2O) and methane (CH4) set out in section 1818(f)(1) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR, if it reports that election in its end of model year report.
Emergency vehicles — fleets
(2) Despite subsection 8(1) of the Regulations, a company may, for the purposes of sections 10 and 13 to 40 of the Regulations, elect to exclude emergency vehicles from its fleets and its temporary optional fleets of passenger automobiles and light trucks of a given model year, if it reports that election in its end of model year report.
Emission standards — nitrous oxide
3. (1) For each test group in respect of which a company uses, for a given model year, an alternative emission standard for nitrous oxide (N2O) under section 1818(f)(3) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR, the company must use the following formula and add the sum of the results for each test group, expressed in megagrams of CO2 equivalent, to the number of credits or deficits calculated in accordance with subsection 20(3) of the Regulations for the fleet to which the test group belongs:
A is the total number of passenger automobiles or light trucks of the test group;
B is the exhaust emission standard for nitrous oxide (N2O) set out in section 1818(f)(1) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR, for the model year in question, expressed in grams per mile;
C is the alternative exhaust emission standard for nitrous oxide (N2O) to which the company has elected to certify the test group, expressed in grams per mile; and
D is the assumed total mileage of the vehicles in question, namely,
Emission standards — methane
(2) For each test group in respect of which a company uses, for a given model year, an alternative emission standard for methane (CH4) under section 1818(f)(3) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR, the company must use the following formula and add the sum of the results for each test group, expressed in megagrams of CO2 equivalent, to the number of credits or deficits calculated in accordance with subsection 20(3) of the Regulations for the fleet to which the test group belongs:
B is the exhaust emission standard for methane (CH4) set out in section 1818(f)(1) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR, for the model year in question, expressed in grams per mile;
C is the alternative exhaust emission standard for methane (CH4) to which the company has elected to certify the test group, expressed in grams per mile; and
(This note is not part of the Interim Order.)
The Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (the Regulations), which came into force in September 2010, establish common greenhouse gas (GHG) emission requirements in Canada and the United States for companies that manufacture or import new passenger automobiles and light trucks (hereinafter referred to as light-duty vehicles) of the 2011 and later model years. The Regulations establish progressively more stringent GHG emission standards for new light-duty vehicles for the 2011 to 2016 model years.
Since September 2010, the United States Environmental Protection Agency (U.S. EPA), which is the U.S. agency responsible for regulating light-duty vehicle GHG emissions, has amended its regulations. While a great many of these amendments have been designed to serve as a post–model year 2016 regulatory regime, with progressively more stringent GHG emission standards for the 2017 to 2025 model years, some of these amendments impact the operation of the pre-2017 model year period.
The purpose of the Interim Order Modifying the Operation of the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (the Interim Order), made pursuant to subsection 163(1) of the Canadian Environmental Protection Act, 1999 (CEPA 1999), is to maintain alignment of Canada’s Regulations with those of the United States with respect to the treatment of emergency vehicles (see footnote 7) and the options for complying with the emission standards for nitrous oxide (N2O) and methane (CH4). This Order will address this issue on a temporary basis until the amendments are finalized through publication in the Canada Gazette, Part Ⅱ.
In December 2012, the proposed Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations were published in the Canada Gazette, Part Ⅰ. (see footnote 8) The vast majority of this regulatory proposal would establish common GHG emission requirements in Canada and the United States for the 2017 and later model years; however, it also includes amendments to align the treatment of emergency vehicles and the options for demonstrating compliance with the emission standards for N2O and CH4 with those of the U.S. EPA.
The Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations are targeted for publication in the Canada Gazette, Part Ⅱ, later in 2013. Once they are published, there will be common Canada–United States requirements for light-duty vehicles for all future model years.
Treatment of emergency vehicles
The U.S. EPA’s Final Rule for light-duty vehicle GHG emissions for the 2017 and later model years — published in October 2012 (see footnote 9) — amended provisions related to the treatment of emergency vehicles for all model years following the publication. As amended, the U.S. EPA regulations provide regulated manufacturers of light-duty vehicles with the option of excluding emergency vehicles from the calculations of both the fleet average carbon dioxide equivalent (CO2e) emission standards and fleet average carbon-related emission values. These vehicles are also not subject to the prescribed emission standards for N2O and CH4. The Interim Order provides Canadian companies that manufacture or import new light-duty vehicles with the same options related to the treatment of emergency vehicles.
Complying with emission standards for N2O and CH4
The U.S. EPA’s Final Rule for heavy-duty vehicle GHG emissions for the 2014 and later model years — published in September 2011 (see footnote 10) — amended provisions related to the light-duty vehicle emission standards for N2O and CH4. As amended, the U.S. EPA regulations provide regulated manufacturers of light-duty vehicles with the option of certifying vehicle test groups to emission levels that are higher (i.e. less stringent) than the prescribed standards. However, manufacturers that use this option must account for the higher emissions through the calculation of CO2e emission deficits, which must be included in the calculations of fleet average emission performance. The Interim Order provides Canadian companies that manufacture or import new light-duty vehicles with the option to report, for test groups, N2O and/or CH4 emission values that are higher than the prescribed standards. However, companies that use this option must account for the higher emissions. This approach is consistent with that prescribed in the U.S. EPA regulations.
The Interim Order will, in accordance with subsection 163(3) of CEPA 1999, cease to have effect 14 days after it is made unless it is approved by the Governor in Council within that 14-day period. If approved, the Interim Order will, in accordance with subsection 163(5) of CEPA 1999, remain in force for a period of up to one year. It will cease to have effect when it is repealed or when the Regulations are amended to give effect to the Order, or one year after the Interim Order is made, whichever is earlier.
The primary objective of the Interim Order is to maintain alignment of Canada’s light-duty vehicle GHG emission Regulations with those of the United States. Environment Canada believes that aligning these Regulations with those of the U.S. EPA provides significant environmental and economic benefits while enhancing the competitiveness of the Canadian auto industry. Canada–United States regulatory alignment with respect to light-duty vehicle GHG emissions is consistent with the objectives of the Canada-United States Regulatory Cooperation Council. It is anticipated that the Interim Order will have a negligible impact on the environmental outcomes of the Regulations; however, it will help to avoid unintended consequences of imposing different requirements on Canadian and U.S. companies.
The Interim Order temporarily modifies the operation of the Regulations with respect to the treatment of emergency vehicles and the options for complying with the emission standards for N2O and CH4 in order to maintain alignment between the Canadian and U.S. regulations.
In accordance with the Regulations, regulated companies are required to subject any passenger automobiles or light trucks that meet the conditions of an emergency vehicle to the prescribed emission standards starting with the 2012 model year. Given the unique role that emergency vehicles play, there are numerous characteristics (e.g. horsepower, high accessory load) that reduce the ability of manufacturers to reduce emissions without compromising the utility of these vehicles.
The objective of this modification, which would provide regulated companies with the option to exclude emergency vehicles from compliance obligations, is to help to avoid the unintended consequences of negatively impacting the performance or utility of emergency vehicles.
The emission standards for N2O and CH4 established in the Regulations were set at a level intended to serve as a cap in order to prevent future increases in the emissions of these substances. These standards were not intended to lead to emission reductions or the application of new technologies.
In accordance with the Regulations, regulated companies have two compliance options: (1) demonstrate that all passenger automobiles and light trucks comprising their fleets emit lower than the prescribed emission levels for N2O and CH4; (see footnote 11) or (2) convert the N2O and CH4 emissions from all passenger automobiles and light trucks comprising their fleets into CO2e and adding the results to the carbon-related exhaust emission value. Certain regulated companies have noted that certain models of vehicles in their existing fleets are challenged to meet the prescribed emission levels for N2O and CH4 and there is no lead time to develop technological solutions. Therefore, they are required to comply using option (2), despite the fact that the vast majority of their vehicles meet the conditions of option (1). The use of option (2) is estimated to raise an affected company’s carbon-related exhaust emission value by 3 to 4 grams of CO2e per mile. (see footnote 12)
The objective of this modification, which would provide regulated companies with the option to report, for individual model types, N2O and/or CH4 emission values that are higher than the prescribed standards, is to avoid unintended increases in company carbon-related exhaust emission values as a result of having as few as one vehicle that is unable to comply with the prescribed emission standards.
On October 13, 2010, Canada published the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations, which established light-duty vehicle GHG emission standards in Canada, aligned with those in the United States.
On September 15, 2011, the U.S. EPA published an amendment to its light-duty vehicle GHG emission regulations that modified the options available to regulated companies for complying with the emission standards for N2O and CH4.
On October 15, 2012, the U.S. EPA published an amendment to its light-duty vehicle GHG emission regulations that modified the treatment of emergency vehicles in compliance obligations for regulated companies.
By providing regulated companies with the option of excluding emergency vehicles from compliance obligations, it is anticipated that these vehicles will continue to be designed to meet the necessary performance criteria demanded by the role that these vehicles play. On a national scale, the volume of new light-duty emergency vehicles entering the fleet on an annual basis is minor when compared to the rest of the new vehicle fleet. It is not anticipated that this will negatively impact the GHG emission reduction outcomes of the Regulations.
By providing regulated companies with the option to comply with the N2O and/or CH4 emission requirements by reporting emission levels higher than the prescribed standard and accounting for the higher emissions as CO2e, affected companies would avoid the unintended increase of 3 to 4 grams per mile in their carbon-related exhaust emission value. While this would lower the fleet average compliance obligation by this same amount, the N2O and CH4 emission standards were not intended to lead to reductions in the emissions of these substances. By requiring that companies convert higher emissions for individual model types into CO2e and include it in their carbon-related exhaust emission values, companies are still accountable for these higher emissions. Alignment with the U.S. EPA on light-duty vehicle emission regulations is a priority under the Canada-United States Regulatory Cooperation Council (RCC). This interim order is a commitment with the RCC workplan on light-duty vehicles.
The two issues being addressed by this Interim Order were first communicated to Environment Canada by auto industry representatives through consultations related to the development of the proposed Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations. Several meetings have taken place between Environment Canada and auto industry representatives in recent months to discuss the intent and content of this Interim Order. The auto industry is supportive of the modifications being made by this Interim Order as they maintain Canada–United States alignment.
On December 8, 2012, the proposed Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations were published in the Canada Gazette, Part Ⅰ. The proposal included amendments to align with the U.S. EPA with respect to the treatment of emergency vehicles and the options for complying with the emission standards for N2O and CH4. Environment Canada has not received any comments from interested parties related to these specific amendments.
Telephone: 819-994-3706
Fax: 819-953-7815
Email: GHGRegDev_Vehicles@ec.gc.ca
Significant New Activity Notice No. 17093
Whereas the Minister of the Environment and the Minister of Health have assessed information in respect of the substance germanium dioxide, Chemical Abstracts Service Registry No. 1310-53-8, under section 83 of the Canadian Environmental Protection Act, 1999;
In relation to the substance germanium dioxide, a significant new activity is any use where the substance is engineered to contain particles of particle size ranging from 1 to 100 nanometres in one or more dimensions, in a quantity greater than 100 kg in any one calendar year.
(b) the analytical information to determine the primary and secondary particle size of the substance;
(c) the information specified in Schedule 4 to the New Substances Notification Regulations (Chemicals and Polymers);
(e) the identification of every government department or government agency, either outside or within Canada, to which the person proposing the significant new activity has provided information regarding the use of the substance and, if known, the department’s or agency’s file number and, if any, the outcome of the department’s or agency’s assessment and risk management actions in relation to the substance imposed by the department or agency; and
(f) all other information or test data in respect of the substance that are in the possession of the person proposing the significant new activity, or to which they have access, and that are relevant to determining whether the substance is toxic or capable of becoming toxic.
Publication of the Revised In-Commerce Substances List
The Minister hereby gives notice of the publication of the Revised In-Commerce Substances List on the In-Commerce Substances Unit Web site of Health Canada.
Further to Health Canada’s Notice of Intent of September 4, 2010, the formal revision of the In-Commerce Substances List (ICL) has been completed, and the Revised In-Commerce Substances List is now available on Health Canada’s Web site at www.hc-sc.gc.ca/ewh-semt/contaminants/person/impact/ list/revised-icl_lsc-revisee_tbl-eng.php.
With the publication of the Revised In-Commerce Substances List, a 90-day correction and review period will start. Any person may, during the correction and review period, forward in writing any recommended correction of a substance which appears on the revised ICL to Health Canada at the following address:
In-Commerce Substances Unit
99 Metcalfe Street, 11th Floor, PL 4111A
Email: ICSU-USE@hc-sc.gc.ca
Full contact information must be included in any request for correction.
After the close of the correction and review period, the revised ICL will be updated accordingly and re-published on the Health Canada Web site.
2013-405
Fadden, Richard
2013-404
Fonberg, Robert
Senior Advisor to the Privy Council Office to be styled Special Advisor to the Clerk of the Privy Council and Secretary to the Cabinet
Fothergill, Simon
2013-408
Deputy Secretary to the Cabinet (Legislation and House Planning and Machinery of Government) and Counsel
Neville, Richard Joseph
2013-410
Ste. Anne’s Hospital Transfer Project
2013-373
2013-407
Deputy Secretary to the Cabinet (Operations)
Volk, Coleen
2013-409
Deputy Secretary to the Cabinet (Senior Personnel)
Chair of the Board of Management (part-time position)
The Canada Revenue Agency (CRA) is a large and complex organization that touches the lives of Canadians every day. Its mission is to administer tax, benefits and related programs and to ensure compliance on behalf of governments across Canada, thereby contributing to the ongoing economic and social well-being of Canadians. The CRA has a workforce of approximately 40 000 employees located across Canada with an annual budget of over $4 billion. The CRA processed almost $419 billion in taxes and duties in 2012–2013, and issued 111 million benefit and credit payments totalling approximately $21 billion for federal, provincial and territorial, and Aboriginal governments. The CRA’s governance structure comprises a Minister, a Commissioner and a Board of Management, as defined in the Canada Revenue Agency Act.
The Board of Management was established in 1999 to support the Agency in achieving its mission and mandate. It is composed of 15 appointed members, including the Chair and the Commissioner. The Board provides strategic guidance and oversees the organization and administration of the CRA as well as the management of its resources, services, property, personnel and contracts. It is expected to bring a forward-looking, strategic perspective to the CRA’s operations and to foster sound management and service delivery.
The role of the Chair of the Board of Management is to facilitate highly effective Board performance. This is achieved by providing leadership in the management of the Board’s affairs and by ensuring that the Board fulfills its legislated mandate and responsibilities with full transparency and the application of sound governance practices. The Chair is responsible for guiding the Board in the fulfillment of its mandate and convening and presiding over Board meetings. He/she is required to participate in approximately five meetings per year with the Board of Management, as well as participate in regular teleconferences and ad hoc meetings as needed.
The successful candidate should possess a degree from a recognized university in a relevant field of study, or an acceptable combination of education, job-related training and/or business experience.
The qualified candidate would have experience in successfully managing large organizations in order to identify problems, review strategies and maintain accountability. Experience in board capacity development and succession planning is required. The selected candidate would possess experience in corporate governance, including the coordination of committees and the selection of committee members.
The ideal candidate would be knowledgeable about the roles and responsibilities of the Chair and the CRA Board of Management. The position also requires the candidate to have knowledge of the CRA’s mandate and of the legislative framework within which it operates. Knowledge of the current best practices in corporate governance is needed.
The suitable candidate would have demonstrated leadership and decision-making qualities and organizational abilities to ensure that Board meetings are conducted in an efficient, effective and focused manner. He/she would possess the ability to anticipate emerging issues and develop strategies to enable the Board of Management and the Agency to seize opportunities and resolve problems, as well as the ability to foster debate and discussions among Board members, facilitate consensus and manage conflicts, should they arise. The ability to build constructive relationships and facilitate information sharing and meaningful dialogue among Board members as well as with Agency management, the Minister and the Commissioner is essential. The preferred candidate would have superior communication skills, both written and oral.
A team- and consensus-builder, the ideal candidate should also possess sound judgment and superior interpersonal skills. He/she should be tactful and discreet, have initiative and possess high ethical standards and integrity.
The successful candidate must be willing to travel throughout Canada to attend meetings of the Board of Management.
Pursuant to the CRA’s enabling legislation, the Chair of the Board must be a Canadian citizen or a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act. Moreover, the incumbent must not be a member of the Senate or House of Commons or a member of a provincial or territorial legislature, or be employed on a full-time basis in the public service of Canada or of a province or territory.
Further details about the CRA and its activities can be found at www.cra-arc.gc.ca/menu-eng.html. For specific information regarding the Board of Management, please go to www.cra-arc.gc.ca/board.
Interested candidates should forward their curriculum vitae by May 21, 2013, to the Assistant Secretary to the Cabinet (Senior Personnel), Privy Council Office, 59 Sparks Street, 1st Floor, Ottawa, Ontario K1A 0A3, 613-957-5006 (fax), GICA-NGEC@ pco-bcp.gc.ca (email).
Meeting the language threshold is evidenced by the inclusion in the application of a test from a designated language testing organization. A designated language testing organization is an organization designated pursuant to subsection 74(3) of the IRPR. Test results must be less than two years old on the date on which the application is received by the Centralized Intake Office in Sydney, Nova Scotia.
A skilled occupation is one that is listed in skill type 0 (managerial occupations) or skill level A (professional occupations) or B (technical occupations and skilled trades) in the 2011 version of the Canadian National Occupational Classification (NOC) matrix. Work experience will reflect the actions described in the lead statement for the occupation as set out in the occupational descriptions of the NOC, including the performance of a substantial number of the main duties and all of the essential duties described.
Applicants are required to include, in their application package, a letter of attestation from the recognized provincial or territorial post-secondary education institution where they are pursuing their PhD. The letter shall contain the following attestations:
That the applicant is currently enrolled in a PhD program and has completed at least two years towards obtaining the PhD; and
That the applicant is deemed in good academic standing to the satisfaction of the institution.
The letter of attestation must be completed using the template included in the application kit, and signed by the Dean of Graduate Studies (or their delegate). Applicants will also be required to declare that they are not a recipient of a Government of Canada award requiring them to return to their home country to apply their knowledge and skills, by completing the appropriate section in Schedule 3.
Applicants are required to include, in their application package, official transcripts supplied by the recognized provincial or territorial post-secondary education institution where they completed their PhD, showing the awarding of a PhD. Applicants will also be required to declare, by completing the appropriate section in Schedule 3, that they were not a recipient of a Government of Canada award requiring them to return to their home country to apply their knowledge and skills; or if they were a recipient of such an award, they will be required to declare that they have satisfied the terms of the award, by completing the appropriate section in Schedule 3.
Applicants must have two years of full-time or equivalent part-time paid work experience in one of the eligible occupations and not combined partial year experience in multiple occupations.
Carrying amounts of Government of Canada bonds include accrued interest.
Interest Payments on Government of Canada bonds are classified according to their coupon date.
For the Supplementary Pension Arrangement, in which the accrued benefit obligation exceeds plan assets, the accrued benefit obligation and fair value of plan assets totalled $83.2 million ($74.4 million at December 31, 2011) and $63.1 million ($58.4 million at December 31, 2011), respectively.
Debt instruments consist of fixed-income securities and inflation-linked assets.
“Emergency vehicle” means a vehicle that is manufactured primarily for use as an ambulance or a police vehicle.
www.canadagazette.gc.ca/rp-pr/p1/2012/2012-12-08/html/reg1-eng.html
Page 63158 of the U.S. Federal Register, Vol. 77, No. 199, Monday, October 15, 2012.
Page 57377 of the U.S. Federal Register, Vol. 76, No. 179, Thursday, September 15, 2011.
Exhaust emissions of N2O shall not exceed 0.010 grams per mile at full useful life; exhaust emissions of CH4 shall not exceed 0.030 grams per mile at full useful life.
Page 57193 of the U.S. Federal Register, Vol. 76, No. 179, Thursday, September 15, 2011.