Financial Statements (unaudited) - For the year ended March 31, 2023 (PDF Version)

Statement of Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2023, and all information contained in these statements rests with the management of Infrastructure Canada. These financial statements have been prepared by management using the Government's accounting policies which are based on Canadian Public Sector Accounting Standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of Infrastructure Canada’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in Infrastructure Canada’s Departmental Results Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout Infrastructure Canada and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2023 was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.

The effectiveness and adequacy of Infrastructure Canada’s system of internal control are reviewed by the work of internal audit staff, who conduct periodic audits of different areas of Infrastructure Canada’s operations, and by the Departmental Audit Committee, which oversees management’s responsibilities for maintaining adequate control systems and the quality of financial reporting, and recommends the financial statements to the Deputy Head of Infrastructure Canada.

The financial statements of Infrastructure Canada have not been audited.

Infrastructure Canada
Statement of Financial Position (Unaudited)
As at March 31
(in thousands of dollars)

N/A	2023	2022
Liabilities:
Accounts payable and accrued liabilities (note 5)	$1,862,372	$1,527,906
Samuel De Champlain Bridge Corridor Project (note 4)	758,650	765,801
Vacation pay and compensatory leave	9,630	9,239
Employee future benefits (note 8)	2,990	2,753
Deferred revenue (note 6)	1,956	1,858
Total net liabilities	2,635,598	2,307,557
Financial assets:
Due from Consolidated Revenue Fund	1,840,283	1,477,184
Accounts receivable and advances (note 9)	21,996	49,744
Total gross assets	1,862,279	1,526,928
Financial assets held on behalf of Government	(2,441)	(2,420)
Total net financial assets	1,859,838	1,524,508
Departmental net debt	775,760	783,049
Non-Financial assets:
Tangible capital assets (note 10)	2,640,623	2,692,140
Total non-financial assets	2,640,623	2,692,140
Departmental net financial position	$1,864,863	$1,909,091

Contractual obligations (note 11)

The accompanying notes form an integral part of these financial statements.

Infrastructure Canada
Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

N/A	2023 Planned Results	2023	2022
Expenses by Core Responsibility:
Public infrastructure
Public Infrastructure, Communities and Rural Economic Development Policy	$59,753	$55,627	$40,724
Public Infrastructure and Communities Investments	40,448	37,564	20,381
Public Infrastructure and Communities Investment Oversight and Delivery	9,248,687	6,684,481	6,698,400
Internal Services	61,979	72,069	65,292
Total expenses	9,410,867	6,849,741	6,824,797
Revenues:
Other revenues (note 12)	2,470	2,441	2,420
Revenues earned on behalf of Government	(2,470)	(2,441)	(2,420)
Total revenues	-	-	-
Net cost of operations before government funding and transfers	9,410,867	6,849,741	6,824,797
Government funding and transfers:
Net cash provided by Government of Canada		6,428,799	8,509,376
Change in due from Consolidated Revenue Fund		363,099	432,738
Services provided without charge by other government departments (note 13)		13,580	11,529
Net transfer of salary overpayments from (to) other government departments		35	99
Transfer of assets and liabilities from other government department (note 14)			(55)
Net cost of operations after government funding and transfers		44,228	(2,128,890)
Departmental net financial position - Beginning of year		1,909,091	(219,799)
Departmental net financial position - End of year		$1,864,863	$1,909,091

Segmented Information (note 15)

The accompanying notes form an integral part of these financial statements.

Infrastructure Canada
Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

N/A	2023	2022
Net cost of operations after government funding and transfers	$ 44,228	$(2,128,890)
Change due to tangible capital assets
Acquisition of tangible capital assets (note 10)	4,534	8,938
Amortization of tangible capital assets (note 10)	(56,052)	(54,960)
Total change due to tangible capital assets	(51,518)	(46,022)
Net increase (decrease) in departmental net debt	(7,289)	(2,174,912)
Departmental net debt – Beginning of year	783,049	2,957,961
Departmental net debt – End of year	$775,760	$783,049

The accompanying notes form an integral part of these financial statements.

Infrastructure Canada
Statement of Cash Flows (Unaudited)
For the Year Ended March 31
(in thousands of dollars)

N/A	2023	2022
Operating activities
Net cost of operations before government funding and transfers	$6,849,741	$6,824,797
Non-cash items
Amortization of tangible capital assets (note 10)	(56,052)	(54,960)
Services provided without charge by other government departments (note 13)	(13,580)	(11,529)
Net transfer of salary overpayments (from) to other government departments	(35)	(99)
Variations in Statement of Financial Position:
Decrease (increase) in accounts payable and accrued liabilities (note 5)	(334,465)	1,749,023
Increase (decrease) in accounts receivable and advances (note 9)	(27,769)	(10,840)
Decrease (increase) in vacation pay and compensatory leave	(391)	(2,226)
Decrease (increase) in employee future benefits (note 8)	(237)	(415)
Decrease (increase) in deferred revenue (note 6)	(97)	(53)
Transfer of liabilities from other government department (note 14)	-	55
Cash used in operating activities	6,417,114	8,493,753
Capital investing activities
Acquisitions of tangible capital assets (note 10)	4,535	8,938
Cash used in capital investing activities	4,535	8,938
Financing activities
Payments on obligation under Public Private Partnership (note 4)	7,150	6,685
Cash used in capital investing activities	7,150	6,685
Net cash provided by Government of Canada	$6,428,799	$8,509,376

The accompanying notes form an integral part of these financial statements.

Notes to the Financial Statements (Unaudited)

1. Authority and Objectives

The Office of Infrastructure of Canada (INFC) was created in 2002 as a separate organization under Schedule I.1 of the Financial Administration Act. The applied name for this organization is Infrastructure Canada. INFC is funded through annual and statutory appropriations received from the Parliament of Canada and is not taxable under the provisions of the Income Tax Act. INFC reports to the Minister of Infrastructure and Communities.

Infrastructure Canada works closely with all orders of government and other partners to enable investments in social, green, public transit and other core public infrastructure, as well as trade and transportation infrastructure.

INFC reports on its mandate under three core responsibilities, as well as internal services, in support of its activities as described below.

Public Infrastructure and Communities: INFC sets policies for public infrastructure and that targets the needs of Canadians and stakeholders (public/private partners) while considering finite resources. Policies are set through strategies, plans, and consideration of alternative financing models, funding programs, and eligibility requirements. Outcomes are monitored to inform future decision making. Policy solutions determine how the federal government supports public infrastructure development, bridges, public transit, clean water and wastewater and disaster mitigation, among other areas, which have impacts on Canadians’ quality of life.

Public Infrastructure and Communities Investments: INFC identifies investment opportunities across a range of funding mechanisms aimed to maximize value-for-money as the Government of Canada directs investment into infrastructure.

Public Infrastructure and Communities Investment Oversight and Delivery: Conduct oversight to ensure recipients comply with project requirements and projects are delivered according to agreements. Infrastructure Canada oversees programs and projects as well as major bridges, Crown corporations and alternative financing arrangements. While Crown corporations operate at arm's length, the Department plays a secretariat role in supporting them. Across all programming, numerous monitoring activities are used to oversee projects and ensure they are delivered as expected for Canadians.

Internal Services: Internal Services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct services that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Management Services; Materiel Management Services; and Acquisition Management Services.

2. Summary of significant accounting policies

These financial statements have been prepared using the Government's accounting policies stated below, which are based on Canadian Public Sector Accounting Standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian Public Sector Accounting Standards.

Significant accounting policies are as follows:

1. Parliamentary authorities
   INFC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to INFC do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the “Expenses” and “Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2022-2023 Departmental Plan. Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2022-2023 Departmental Plan.
2. Consolidation
   INFC has received dividends on behalf of the Government of Canada from the Canada Mortgage and Housing Corporation (CMHC). As per the Government of Canada Accounting Handbook, these dividends are not recorded in INFC's financial statements as they do not relate to INFC's activities. INFC is simply acting as a flow‑through mechanism for administrative purposes in order to enable the Government of Canada to receive the dividends.
3. Net cash provided by government
   INFC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by INFC is deposited to the CRF and all cash disbursements made by INFC are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the Government.
4. Amounts due from or to the CRF
   Amounts due from or to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that INFC is entitled to draw from the CRF without further authorities to discharge its liabilities.
5. Revenues
   Other revenues are recognized in the period the event giving rise to the revenues occurred. Deferred revenue consists of amounts received in advance of the delivery of goods and rendering services that will be recognized as revenue in a subsequent fiscal year as it is earned. Revenues that are non-respendable are not available to discharge INFC’s liabilities. While the Deputy Head is expected to maintain accounting control, they have no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented as a reduction of the entity’s gross revenues.
6. Expenses
   Transfer payments are recorded as an expense in the year the transfer is authorized and all eligibility criteria have been met by the recipient.   In situations where payments do not form part of an existing program, transfer payments are recorded as expenses when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.
   Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
   Services provided without charge by other government departments for accommodation and employer contributions to the health and dental insurance plans are recorded as operating expenses at their carrying value.
7. Employee future benefits
   1. Pension benefits: Eligible employees participate in the Public Service Pension Plan (Public Service Superannuation Act), a multi-employer plan administered by the Government. INFC’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. INFC’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan’s sponsor.
   2. Severance benefits: The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole. 
8. Accounts and loans receivable
   Accounts and loans receivable are initially recorded at cost and where necessary, are discounted to reflect their concessionary terms. Concessionary terms of loans include cases where loans are made on a long-term, low interest or interest-free basis. Transfer payments that are unconditionally repayable are recognized as loans receivable. When necessary, an allowance for valuation is recorded to reduce the carrying value of accounts and loans receivable to amounts that approximate their net recoverable value.
9. Non-financial assets
   The cost of acquiring land, buildings, equipment and other capital property is capitalized as tangible capital assets and, except for land, are amortized to expense over the estimated useful lives of the assets, as described in Note 10. All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined in the Indian Act, works of art, museum collection and Crown land to which no acquisition cost is attributable; and intangible assets. 
10. Contingent liabilities
    Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.
11. Contingent assets
    Contingent assets are possible assets which may become actual assets when one or more future events occur or fail to occur. If the future event is likely to occur or fail to occur, the contingent asset is disclosed in the notes to the financial statements.
12. Measurement uncertainty
    The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the Samuel De Champlain Bridge Corridor Project asset and liability, the payables at year end, contingent liabilities, the liability for employee future benefits, and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
13. Related party transactions
    Related party transactions, other than inter-entity transactions, are recorded at the exchange amount.
    Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:
    
    1. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
    2. Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.

3. Parliamentary authorities

INFC receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, INFC has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

1. Reconciliation of net cost of operations to current year authorities used

   (in thousands of dollars)

   N/A	2023	2022
   Net cost of operations before government funding and transfers	$6,849,741	$6,824,797
   Adjustments for items affecting net cost of operations but not affecting authorities:
   Amortization of tangible capital assets	(56,052)	(54,960)
   Services provided without charge by other government departments	(13,580)	(11,529)
   Decrease (increase) in vacation pay and compensatory leave	(390)	(2,226)
   Decrease (increase) in employee future benefits	(237)	(415)
   Refund of previous year's expenditures	37,131	20,064
   Decrease (increase) in accrued liabilities related to Budget Implementation Act	-	2,170,316
   Other	28	12
   Total items affecting net cost of operations but not affecting authorities	(33,100)	2,121,262
   Adjustments for items affecting net cost of operations but not affecting authorities:
   Acquisitions of tangible capital assets	4,535	8,938
   Payments of obligation under Public Private Partnership	7,151	6,685
   Increase (decrease) in salary overpayments andadvances	632	400
   Proceeds from disposal of tangible capital assets	-	-
   Loss (Gains) on Other Foreign Exchange Valuations	-	(1)
   Total items not affecting net cost of operations but affecting authorities	12,318	16,022
   Current year authorities used	$ 6,828,959	$8,962,081

2. Authorities provided and used

   (in thousands of dollars)

   N/A	2023	2022
   Authorities:
   Vote 1 – Operating expenditures	$259,072	$219,919
   Vote 5 – Capital expenditures	21,712	176,926
   Vote 10 – Contributions	6,813,266	5,809,349
   Statutory Amounts:
   Employee Benefit Plan	18,370	14,066
   Minister Office Salary and Car Allowance	185	89
   Canada Community-Building Fund (Gas Tax Fund)	2,268,967	4,490,082
   Less:
   Authorities available for future years	-	-
   Lapsed: Operating	(10,216)	(15,226)
   Lapsed: Capital	(10,027)	(161,303)
   Lapsed: Contributions	(2,532,370)	(1,571,821)
   Current year authorities used	$6,828,959	$8,962,081

4. Samuel De Champlain Bridge Corridor Project

After a competitive process, in 2015, Signature on the St. Lawrence Group (SSL) was awarded the contract and is responsible for the design, construction, financing, operation, maintenance and rehabilitation of the corridor. The new bridge crossing was fully opened to traffic on July 1, 2019 and construction of the remainder of the corridor was substantially completed in October 2019. Work to complete elements of the corridor that were deferred and to correct minor deficiencies is expected to be completed by the end of 2023.

In 2022-23, $1.4M was spent on the project and it has been added to the existing bridge asset value. The total asset value of the Samuel De Champlain Bridge Corridor (SDCBC) project is $2.69B.

Ownership of the bridge and related corridor remains with federal government, and Signature on the St. Lawrence Group will operate the corridor for 27 years.

Obligation under Public Private Partnership

INFC has entered into a public private partnership agreement with SSL for the project. The obligations related to the upcoming years include the following:

(in thousands of dollars)

N/A	2023
2024	$120,051
2025	49,778
2026	49,778
2027	49,778
2028 and subsequent	1,124,145
Total estimated payments	1,393,530
Less: imputed interest (5.59%)	634,880
Balance of obligation under public private partnership	$758,650

5. Accounts payable and accrued liabilities

The following table presents details of INFC’s accounts payable and accrued liabilities:

Accounts payable and accrued liabilities
(in thousands of dollars)

N/A	2023	2022
Accounts Payable - Other government departments and agencies	$8,438	$7,459
Accounts Payable - External parties	1,842,997	1,511,186
Total accounts payable	1,851,435	1,518,645
Accrued Liabilities	10,937	9,261
Total accounts payable and accrued liabilities	$1,862,372	$1,527,906

6. Deferred Revenue

Deferred revenue represents the balance at year-end of unearned revenues stemming from amounts received from external parties that are related to Samuel De Champlain Bridge Corridor project. Details of the transactions related to this account are as follows:

(in thousands of dollars)

N/A	2023	2022
Opening balance	$1,858	$1,805
Amounts received	2,347	2,230
Revenue recognized	2,249	2,177
Closing balance	$1,956	$1,858

7. Contingent liabilities

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

Claims have been made against the Infrastructure Canada in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. Claims and litigations for which the outcome is not determinable and a reasonable estimate can be made by management amount to approximately $379 million as at March 31, 2023. Infrastructure Canada has no claim and litigation with related parties at March 31, 2023.

8. Employee future benefits

1. Pension benefits:

   INFC's employees participate in the public service pension plan (the “Plan”), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits and they are indexed to inflation.

   Both the employees and INFC contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

   The 2022-23 expense amounts of $12,001,357 ($9,502,926 in 2021-2022). For Group 1 members, the expense represents approximately 1.02 times (1.01 times in 2021-2022) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2021-2022) the employee contributions.

   INFC's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the Consolidated Financial Statements of the Government of Canada, as the Plan's sponsor.

2. Severance benefits:

   Severance benefits provided to INFC’s employees were previously based on an employee’s eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees.  Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By March 31, 2023, substantially all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

   The changes in the obligations during the year were as follows:

   Severance benefits
   (in thousands of dollars)

   N/A	2023	2022
   Accrued benefit obligation - Beginning of year	$2,753	$2,338
   Expense for the year	368	615
   Benefits paid during year	(131)	(200)
   Accrued benefit obligation - End of year	$2,990	$2,753

9. Accounts receivable and advances

(in thousands of dollars)

N/A	2023	2022
Receivables - Other government departments and agencies	$20,025	$41,216
Receivables - External parties	1,954	8,514
Advances - Employees	17	14
Total accounts receivable and advances	$21,996	$49,744
Assets held on behalf of government	(2,441)	(2,420)
Net accounts receivable and advances	$19,555	$47,324

10. Tangible capital assets

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

Asset class	Amortization period
Works and Infrastructure	5 to 100 years
Machinery and Equipment	5 years
Computer Hardware	3 to 5 years
Informatics Software – Purchased and Developed	2 to 8 years
Vehicles (non-military)	5 years
Leasehold Improvements	Term of lease

Assets under construction are recorded in the applicable capital asset class in the year that they are put into service and are not amortized until they are put into service.

Cost 2023
(in thousands of dollars)

Capital asset class	Opening balance	Acquisitions	AdjustmentsFootnote1	Disposals	Write-offs	Closing balance
Land	127,851	684	-	-	-	128,535
Works and infrastructure	2,688,572	-	1,446	-	-	2,690,019
Machinery and Equipment	137	-	-	-	-	137
Computer Hardware	661	30	-	-	-	691
Informatics Software - Developed and Purchased	15,628	-	-	-	(311)	15,318
Motor Vehicles	116	-	-	-	-	116
Leasehold Improvements	10,358	-	459	-	(3,599)	7,218
Assets under construction	473	3,821	(1,905)	-	-	2,389
Total	2,843,797	4,535	-	-	(3,910)	2,844,422

Accumulated amortization 2023
(in thousands of dollars)

	Opening balance	Amortization	Adjustments	Disposals	Write-offs	Closing balance
Land	-	-	-	-	-	-
Works and infrastructure	(135,864)	(53,254)	-	-	-	(189,118)
Machinery and Equipment	(137)	-	-	-	-	(137)
Computer Hardware	(149)	(124)	-	-	-	(273)
Informatics Software - Developed and Purchased	(9,610)	(1,810)	-	-	311	(11,109)
Motor Vehicles	(108)	(8)	-	-	-	(116)
Leasehold Improvements	(5,789)	(857)	-	-	3,599	(3,047)
Assets under construction	-	-	-	-	-	-
Total	(151,656)	(56,052)	-	-	3,910	(203,799)

Net Book Value
(in thousands of dollars)

Capital asset class	2023	2022
Land	128,535	127,852
Works and infrastructure	2,500,901	2,552,708
Machinery and Equipment	-	-
Computer Hardware	418	512
Informatics Software - Developed and Purchased	4,208	6,018
Motor Vehicles	-	8
Leasehold Improvements	4,171	4,569
Assets under construction	2,389	473
Total	2,640,623	2,692,140

11. Contractual obligations

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

Contractual obligations
(in thousands of dollars)

	2024	2025	2026	2027	2028 AND THEREAFTER	TOTAL
Transfer payments	9,112,728	7,578,321	6,126,244	3,982,002	8,701,593	35,500,888
Other goods and services	66,678	62,505	59,034	58,782	1,115,006	1,362,005
Total	9,179,406	7,640,826	6,185,278	4,040,784	9,816,599	36,862,893

12. Revenue

Revenues consist of lease and use of public property related to the Samuel De Champlain Bridge Corridor Project and nominal revenue from Access to Information fees.

13. Related party transactions

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

1. Common services provided without charge by other government departments

   During the year, INFC received services without charge from certain common service organizations, related to accommodation and the employer’s contribution to the health and dental insurance plans. These services provided without charge have been recorded in INFC’s Statement of Operations and Departmental Net Financial Position as follows:

   Common services provided without charge by other government departments
   (in thousands of dollars)

   N/A	2023	2022
   Employer's contribution to the health and dental insurance plans	$9,398	$7,651
   Accommodation	4,182	3,878
   Total	$13,580	$11,529

   The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public.  As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Services and Procurement Canada and audit services provided by the Office of the Auditor General are not included in INFC's Statement of Operations and Departmental Net Financial Position.

2. Other transactions with related parties

   Other transactions with related parties
   (in thousands of dollars)

   N/A	2023	2022
   Accounts receivable – Other government departments and agencies	$20,025	$41,216
   Accounts payable – Other government departments and agencies	8,438	6,476
   Expenses – Other government departments and agencies	55,590	40,923

   Expenses disclosed in (b) exclude common services provided without charges, which are already disclosed in (a).

   Other Government Departments (OGDs) and agencies administer certain programs on behalf of INFC.  Funds are advanced to these OGDs and agencies, namely Transport Canada and Employment and Social Development Canada, during the fiscal year.  An accounts receivable is recorded for the unused portion that will be returned to INFC after year end while an account payable is recorded when INFC must provide additional funds to these OGDs and agencies.

14. Transfer from other government department

Effective October 26, 2021, Infrastructure Canada was transferred the responsibility for the Homelessness Policy Directorate from Employment and Social Development Canada, in accordance with Order in Council 2021-0952, including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, the Department received the following liabilities related to the Homelessness Policy Directorate from Employment and Social Development Canada on October 26, 2021:

Transfer from other government department
(in thousands of dollars)

N/A	2023	2022
Liabilities:
Salaries and benefits payable	$0	$55
Adjustment to the departmental net financial position	$0	$55

15. Segmented Information

Presentation by segment is based on INFC's core responsibilities. The presentation by segment is based on the same accounting policies as described in the Summary of Significant Accounting Policies in Note 2. The following table presents the expenses incurred for the main core responsibilities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

Segmented Information
(in thousands of dollars)

N/A	Public Infrastructure, Communities and Rural Economic Development Policy	Public Infrastructure and Communities Investments	Public Infrastructure and Communities Investment Oversight and Delivery	Internal Services	2023	2022
Transfer payments
Contributions	$-	$-	$6,512,861	$-	$6,512,861	$6,540,433
Total transfer payments	-	-	6,512,861	-	6,512,861	6,540,433
Operating expenses
Salaries and employee benefits	36,637	26,562	39,631	49,049	151,879	120,696
Professional and special services	17,129	9,959	17,576	12,522	57,186	41,897
Rentals	1,115	732	1,165	4,341	7,352	7,003
Amortization	-	-	55,064	988	56,052	54,950
Repairs and maintenance	-	-	18,336	740	19,076	16,726
Transportation and communications	342	158	244	594	1,339	1,777
Acquisition of machinery and equipment	9	3	5	3,650	3,667	3,173
Information	384	145	39	171	740	581
Utilities, materials, and supplies	10	4	14	138	167	52
Other	-	-	39,545	-124	39,421	37,499
Total operating expenses	55,628	37,564	171,619	72,069	333,880	284,364
Total expenses	55,628	37,564	6,684,481	72,069	6,849,741	6,824,797
Revenues
Other revenues	-	-	2,441	-	2,441	2,420
Revenues earned on behalf of government	-	-	(2,441)	-	(2,441)	(2,420)
Total revenues	-	-	-	-	-	-
Net cost from continuing operationsFootnote 2	$55,628	$37,564	$6,684,481	$72,069	$6,849,741	$6,824,797

16. Subsequent events

Funding letters for the Canada Community-Building Fund for a total amount of $2,367,617,331 were signed and provided to recipients on May 11, 2023. These letters indicate to each recipient the amount of funds to be distributed in 2023-24. A first payment of $1,183,808,666 has been released by summer 2023.

ANNEX to the Statement of Management Responsibility Including Internal Control over Financial Reporting for the Fiscal Year ending March 31, 2023

1.0 Introduction

This document summarizes the measures taken by Infrastructure Canada to maintain an effective system of internal control over financial reporting, including information on internal control management, assessment results and related action plans.

Detailed information on Infrastructure Canada's authority, mandate, and program activities can be found in the Departmental Results Report for the 2022-2023 fiscal year and the Departmental Plan for the 2022-2023 fiscal year.

2.0 Departmental system of internal control over financial reporting

2.1 Internal control management

Infrastructure Canada has a well-established governance and accountability structure to support departmental assessment efforts and oversight over its system of internal control. A departmental Internal Control Financial Management framework, approved by the Deputy Head, is in place and comprises:

• Organizational accountability structures as they relate to the internal control management to support sound financial management, including roles and responsibilities of senior managers in their areas of responsibility for control management
• Values and ethics
• Ongoing communication on statutory requirements, and policies and procedures for sound financial management and control; and
• Assessment results and action plans to the Deputy Head and senior departmental management and, as applicable, the Departmental Audit Committee (DAC).

The DAC provides advice to the Deputy Head on the adequacy and functioning of the department's risk management, control and governance frameworks and processes. Infrastructure Canada’s DAC is composed of four external members, three internal ex-officio members and meets a minimum of three times per year (or more frequently if required).

2.2 Service arrangements relevant to financial statements

Infrastructure Canada relies on other organizations for processing certain transactions that are recorded in its financial statements, mostly through the common service and specific arrangements detailed below. Readers of this annex may refer to similar annexes of the noted organizations for a greater understanding of the systems of internal controls over financial reporting related to these services:

2.2.1 Common Service Arrangements

• Public Services and Procurement Canada, which administers the payment of salaries and the procurement of goods and services, in accordance with Infrastructure Canada’s Delegation of Financial Signing Authorities, and provides accommodation services
• Treasury Board Secretariat, which provides information on public service insurance and centrally administers payment of the employer’s share of contributions toward statutory employee benefit plans
• Department of Justice, which provides legal services; and
• Shared Services Canada, which provides information technology infrastructure services in the areas of data center and network services. The scope and responsibilities are addressed in the interdepartmental arrangement between Shared Services Canada and Infrastructure Canada.

2.2.2 Specific Arrangements

• Public Services and Procurement Canada, which provides pay compensation services
• Federal delivery partner (Transport Canada), which manages certain contribution programs on behalf of Infrastructure Canada; and
• Innovation, Science and Economic Development Canada, which hosts Infrastructure Canada's departmental financial management system, the Integrated Financial Management System (IFMS). The service arrangement also includes system support.
• Employment and Social Development Canada, which supports the Homelessness Policy Directorate and the Reaching Home program in the areas of service delivery and Information Technology.

3.0 Departmental assessment results for the 2022 to 2023 fiscal year

The following table summarizes the status of the ongoing monitoring and testing activities based on the 2022-2023 rotational plan.

3.1 Progress during the 2022 to 2023 fiscal year

Key Control Areas	Status
Acquisition Cards	Design effectiveness testing was completed as planned. There were no findings.
Procure to Payment	Ongoing monitoring was completed as planned. Findings have been communicated to stakeholders and remedial actions are in progress.
Budgeting and Forecasting	Ongoing monitoring was completed as planned. Findings have been communicated to stakeholders and remedial actions are in progress.
Transfer Payments	Ongoing monitoring was started in 2021-2022 and was well advanced, but not completed due to time and resource constraints. This prior year review was duly completed early in 2022-2023.

The key recommendations from the 2022-2023 control assessment activities are summarized below.

3.2 New or significantly amended key controls

In 2022-2023, Infrastructure Canada further strengthened and embedded existing controls through improved staffing, the implementation of various policy updates and memoranda of understanding, as well as recommendations and MAPs resulting from process reviews by Internal Controls, Internal Audit and central agencies tasked with monitoring, such as the Treasury Board Secretariat, the Office of the Auditor General, the Office of the Comptroller General, etc.

3.3 Remediation

Key controls tested within the year largely operated as intended, with the following areas for improvement identified:

Key control areas	Areas for improvement
Acquisition Cards	There were none identified.
Procure to Payment	Involve Financial Management Advisors (FMAs) on all Requests for Contract and Requests-for-Amendment, whether or not there is a financial component. Reinforce the rights, responsibilities, and limitations of Financial Signing Authorities (FSA) delegation, and review and communicate the req uirements of the Contract Filing Checklist (CFC) to all procurement officers. Implement an appropriate tool (job guide, standard operating procedure, etc.) to address identified gaps in the review, payment and documentation of invoices within IFMS. Implement the Procurement Process Modernization Initiative (PPMI) IFMS module as a priority for 2023-2024. Review and remind procurement clients of the process for managing final invoices. Review and document the Proactive Disclosure process, to add an additional layer of verification, prior to publishing contract information on Canada.ca, and reconcile contract details in both IFMS and the proactive disclosure system, with the signed Task Authorizations and Contracts.
Budgeting and Forecasting	Continue efforts in developing and implementing the Integrated Branch Planning (IBP) process. Once implemented, these controls should be tested for operating effectiveness. Document planning, budgeting and forecasting processes and ensure that the guidance is finalized, reviewed, approved and made available to key stakeholders. Follow the described Financial Situation Report (FSR) Standard Operating Procedures process, collect FSR Attestations from the Assistant Deputy Ministers, and respect the established deadlines. Adopt a clear implementation strategy for Power BI and increase the automation of the FSR process. Report FSRs using a consistent approach and tools (i.e., dashboard or summary table) with consistent elements when reporting to senior management. Grant IFMS access rights on an as-needed basis, according to job duties and remove user access in a timely manner, when no longer required.
Transfer Payments	Continue efforts in implementing the Recipient Auditing Framework and monitor the progress of recipient funding agreements to ensure that terms and conditions are met. Continue to revise and refine transfer payment processes, ensuring that these processes are harmonized and implemented across programs, yet remain flexible to accommodate the peculiarities of each program at INFC.

Internal Controls performs periodic follow-ups to ascertain and encourage progress on closing identified gaps.

4.0 Departmental action plan for the next fiscal year and subsequent years

Infrastructure Canada’s approved ongoing monitoring plan over the next three fiscal years, based on an annual validation of the high-risk processes and controls, with related adjustments to the ongoing monitoring plan as required, is shown in the following table.

The Department uses a risk-based approach to the frequency of controls monitoring. The Department considers changes and emerging risks within its operating environment, and these are reflected in the process risk levels and their related frequency of testing, incorporated in the monitoring plan.

Approved Rotational ongoing (risk-based) monitoring plan

Key Control Areas	2023-24	2024-25	2025-26
IT General Controls	X		X
Budgeting and Forecasting		X
Transfer Payments	X		X
Entity Level Controls	X
Capital Assets		X
Cabinet Submissions	X
Payroll		X
Procure to Payment			X
Acquisition Cards	X
Financial Reporting and Financial Close			X
Travel, Hospitality, Conferences and Events		X
Project Management (new process planned for design effectiveness review)	X

Copyright

© 2023 HIS MAJESTY THE KING IN RIGHT OF CANADA as represented by the Minister of Housing, Infrastructure and Communities.

Catalogue No. T91-9E-PDF

ISSN 2818-0372