Financial Statements (unaudited) - For the year ended March 31, 2024

Financial Statements (unaudited) - For the year ended March 31, 2024 (PDF Version)

Copyright

© His Majesty the King in Right of Canada, as represented by the Minister of Housing, Infrastructure and Communities, 2024.

Catalogue No. T91-9E-PDF

ISSN 2818-0372

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, 2024, 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 Actand 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, 2024 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	2024	2023
Liabilities
Accounts payable and accrued liabilities (note 5)	$1,892,860	$1,862,372
Samuel De Champlain Bridge Corridor Project (note 4)	751,090	758,650
Vacation pay and compensatory leave	11,936	9,630
Employee future benefits (note 9)	3,609	2,990
Deferred revenue (note 7)	2,036	1,956
Total net liabilities	2,661,531	2,635,598
Financial assets
Due from Consolidated Revenue Fund	1,885,587	1,840,283
Accounts receivable and advances (note 10)	7,269	21,996
Total gross assets	1,892,856	1,862,279
Financial assets held on behalf of Government	(2,596)	(2,441)
Total net financial assets	1,890,260	1,859,838
Departmental net debt	771,270	775,760
Non-Financial assets
Tangible capital assets (note 10)	2,587,289	2,640,623
Total non-financial assets	2,587,289	2,640,623
Departmental net financial position	$1,816,019	$1,864,863

Contractual obligations (note 12)

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	2024 Planned Results	2024	2023
Expenses by Core Responsibility
Public Infrastructure, Communities, Affordable Housing and Homelessness Policy	$63,713	$72,607	$55,627
Public Infrastructure, Communities and Homelessness Investments	34,970	44,124	37,564
Public Infrastructure and Communities Investment Stewardship and Delivery	9,530,691	7,433,438	6,684,481
Internal Services	59,653	87,136	72,069
Total expenses	9,689,027	7,637,304	6,849,741
Revenues
Other revenues (note 6)	2,555	2,596	2,441
Revenues earned on behalf of Government	(2,555)	(2,596)	(2,441)
Total revenues	-	-	-
Net cost of operations before government funding and transfers	9,689,027	7,637,304	6,849,741
Government funding and transfers
Net cash provided by Government of Canada		7,525,695	6,428,799
Change in due from Consolidated Revenue Fund		45,304	363,099
Services provided without charge by other government departments (note 13)		17,379	13,580
Net transfer of salary overpayments from (to) other government departments		56	35
Transfer of assets and liabilities from other government department (note 11)		26
Net cost of operations after government funding and transfers		48,844	44,228
Departmental net financial position - Beginning of year		1,864,863	1,909,091
Departmental net financial position - End of year		$1,816,019	$1,864,863

Segmented Information (note 14)

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	2024	2023
Net cost of operations after government funding and transfers	$48,844	$44,228
Change due to tangible capital assets	-
Acquisition of tangible capital assets (note 11)	2,852	4,534
Amortization of tangible capital assets (note 11)	(56,090)	(56,052)
Proceeds from disposal of tangible capital assets	(35)
Proceeds from disposal of real property	(23)
Transfer from other government departments	26
Net gain (loss) on disposal of tangible capital assets and real property including adjustments	(64)
Total change due to tangible capital assets	(53,334)	(51,518)
Net increase (decrease) in departmental net debt	(4,490)	(7,289)
Departmental net debt – Beginning of year	775,760	783,049
Departmental net debt – End of year	$771,270	$775,760

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	2024	2023
Operating activities
Net cost of operations before government funding and transfers	$7,637,304	$6,849,741
Non-cash items
Amortization of tangible capital assets (note 11)	(56,090)	(56,052)
Gain (loss) on disposal of tangible capital assets and real property	(64)
Net transfer of salary overpayments and advances (from) to other government departments	(56)	(35)
Services provided without charge by other government departments (note 13)	(17,379)	(13,580)
Variations in Statement of Financial Position:
Decrease (increase) in accounts payable and accrued liabilities (note 5)	(30,488)	(334,465)
Increase (decrease) in accounts receivable and advances (note 10)	(14,882)	(27,769)
Decrease (increase) in vacation pay and compensatory leave	(2,306)	(391)
Decrease (increase) in employee future benefits (note 9)	(619)	(237)
Decrease (increase) in deferred revenue (note 7)	(81)	(97)
Cash used in operating activities	7,515,339	6,417,114
Capital investing activities
Acquisitions of tangible capital assets (note 11)	2,852	4,535
Proceeds from disposal of tangible capital assets	(35)
Proceeds from disposal of real property	(23)
Cash used in capital investing activities	2,794	4,535
Financing activities
Payments on obligation under Public Private Partnership (note 4)	7,161	7,150
Cash used in capital investing activities	7,161	7,150
Net cash provided by Government of Canada	$7,525,694	$6,428,799

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 Housing, 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, Communities, Affordable Housing and Homelessness Policy:

Infrastructure Canada (INFC) sets policies for both public infrastructure and approaches for the development of affordable housing, address homelessness that target the needs of Canadians and stakeholders (public/private partners) while considering finite resources. Policies are set through strategies, plans, consideration of alternative financing models and funding programs, and eligibility requirements among other tools and their 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, disaster mitigation, and approaches to address homelessness, among other areas, which have impacts on the quality of life of Canadians.

Public Infrastructure, Communities and Homelessness Investments:

Infrastructure Canada (INFC) uses a range of funding mechanisms to maximize value-for-money in direct (leveraging infrastructure investments) government investment in infrastructure and to address affordable housing and homelessness:

• Allocation-based programs offer stable funding for projects that balance both national priorities with local needs of Provinces and Territories;
• Direct-funding programs award funding to projects that are selected through an application process; and,
• Alternative financing arrangements identify projects that are delivered in partnership with either private sector or non-government organization and Infrastructure Canada or Crown Corporations under the Minister of Intergovernmental Affairs, Infrastructure and Communities.

Public Infrastructure and Communities Investment Stewardship and Delivery:

Infrastructure Canada (INFC) 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 the services that are provided within a department so that it can meet its corporate obligations and deliver its programs.

There are 10 categories of internal services:

• 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
• 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 2023-2024 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 2023-2024 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
   Revenues are comprised of revenues earned from non-tax sources. They include exchange transactions where goods or services are provided for consideration where a performance obligation exists, and non-exchange transactions where no performance obligations exist to provide a good or service. These transactions can be recurring or non-recurring in nature. Recurring transactions are viewed as ongoing, routine activities that form part of the normal course of operations and can be used to indicate if they can be reasonably expected to be earned again in future years. Deferred revenue consists of amounts received in advance of the delivery of goods and rendering of services that will be recognized as revenue in a subsequent fiscal year as it is earned. Other revenues are recognized in the period the event giving rise to the revenues occurred. Revenues that are non-respendable are not available to discharge the department's liabilities. While the Departmental Deputy Head is expected to maintain accounting control, he or she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are earned on behalf of the Government of Canada and are therefore presented as a reduction of the entity's gross revenues. Revenues earned on behalf of Government consist of the sale of services and gains on the sale of assets. These are recognized when earned.
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 11. 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. If the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, a provision 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 and disclosed 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	2024	2023
   Net cost of operations before government funding and transfers	$7,637,304	$6,849,741
   Adjustments for items affecting net cost of operations but not affecting authorities
   Amortization of tangible capital assets	(56,090)	(56,052)
   Gain (loss) on disposal of tangible capital assets	(64)
   Services provided without charge by other government departments	(17,379)	(13,580)
   Decrease (increase) in vacation pay and compensatory leave	(2,306)	(390)
   Decrease (increase) in employee future benefits	(619)	(237)
   Refund of previous year's expenditures	48,430	37,131
   Other	31	28
   Total items affecting net cost of operations but not affecting authorities	(27,997)	(33,100)
   Adjustments for items affecting net cost of operations but not affecting authorities
   Acquisitions of tangible capital assets	2,852	4,535
   Payments of obligation under Public Private Partnership	7,561	7,151
   Proceeds from disposal of tangible capital assets	(35)
   Increase (decrease) in salary overpayments and advances	41	632
   Loss (Gains) on Other Foreign Exchange Valuations	(1)
   Total items not affecting net cost of operations but affecting authorities	10,418	12,318
   Current year authorities used	$7,619,725	$6,828,959

2. Authorities provided and used

   (in thousands of dollars)

   N/A	2024	2023
   Authorities
   Vote 1 – Operating expenditures	$298,583	$259,072
   Vote 5 – Capital expenditures	97,072	21,712
   Vote 10 – Contributions	7,162,794	6,813,266
   Statutory Amounts
   Employee Benefit Plan	25,289	18,370
   Minister Office Salary and Car Allowance	134	185
   Canada Community-Building Fund	2,367,617	2,268,967
   Proceeds from disposal	35
   Less
   Authorities available for future years	-	-
   Lapsed: Operating	(13,280)	(10,216)
   Lapsed: Capital	(86,660)	(10,027)
   Lapsed: Contributions	(2,231,824)	(2,532,370)
   Proceeds from disposal	(35)
   Current year authorities used	$7,619,725	$6,828,959

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 2024.

In 2023-24, $0.38M 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 until October 31st 2049.

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	2024
2025	$49,778
2026	49,778
2027	49,778
2028	49,778
2029 and subsequent	1,144,642
Total estimated payments	1,343,752
Less: imputed interest (5.59%)	592,663
Balance of obligation under public private partnership	$751,090

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	2024	2023
Accounts Payable - Other government departments and agencies	$9,227	$8,438
Accounts Payable - External parties	1,871,069	1,842,997
Total accounts payable	1,880,296	1,851,435
Accrued Liabilities	12,564	10,937
Total accounts payable and accrued liabilities	$1,892,860	$1,862,372

6. Revenues

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.

7. 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	2024	2023
Opening balance	$1,956	$1,858
Amounts received	2,443	2,347
Revenue recognized	2,363	2,249
Closing balance	$2,036	$1,956

8. Contingent liabilities

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

Claims have been made against 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, 2024. Infrastructure Canada has no claim and litigation with related parties at March 31, 2024.

9. 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 2023-24 expense amounts to $14,973,464 ($12,001,357 in 2022-2023). For Group 1 members, the expense represents approximately 1.02 times (1.02 times in 2022-2023) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2022-2023) 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, 2024, 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	2024	2023
   Accrued benefit obligation - Beginning of year	$2,990	$2,753
   Expense for the year	719	368
   Benefits paid during year	(100)	(131)
   Accrued benefit obligation - End of year	$3,609	$2,990

10. Accounts receivable and advances

(in thousands of dollars)

N/A	2024	2023
Receivables - Other government departments and agencies	$6,536	$20,025
Receivables - External parties	692	1,954
Advances - Employees	41	17
Total accounts receivable and advances	$7,269	$21,996
Assets held on behalf of government	(2,596)	(2,441)
Net accounts receivable and advances	$4,673	$19,555

11. 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 to 7 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 2024
(in thousands of dollars)

Capital asset class	Opening balance	Acquisitions	AdjustmentsFootnote1	Disposals	Write-offs	Closing balance
Land	128,535	-	109	(122)	-	128,522
Works and infrastructure	2,690,019	-	377	-	-	2,690,395
Machinery and Equipment	137	-	-	(137)	-	-
Computer Hardware	691	-	-	-	-	691
Informatics Software - Developed and Purchased	15,318	-	91	-	-	15,408
Motor Vehicle	116	46	49	(72)	-	138
Leasehold Improvements	7,218	-	-	-	-	7,218
Assets under construction	2,389	2,806	(576)	-	-	4,619
Total	2,844,422	2,852	49	(331)	-	2,846,992

Accumulated amortization 2024
(in thousands of dollars)

	Opening balance	Amortization	Adjustments	Disposals	Write-offs	Closing balance
Land	-	-	-	-	-	-
Works and infrastructure	(189,118)	(53,269)	-	-	-	(242,386)
Machinery and Equipment	(137)	-	-	137	-	-
Computer Hardware	(273)	(124)	-	-	-	(396)
Informatics Software - Developed and Purchased	(11,109)	(1,819)	-	-	-	(12,928)
Motor Vehicle	(116)	(12)	(23)	72	-	(78)
Leasehold Improvements	(3,047)	(867)	-	-	-	(3,914)
Assets under construction	-	-	-	-	-	-
Total	(203,799)	(56,090)	(23)	209	-	(259,702)

Net Book Value
(in thousands of dollars)

Capital asset class	2024	2023
Land	128,522	128,535
Works and infrastructure	2,448,009	2,500,901
Machinery and Equipment	-	-
Computer Hardware	295	418
Informatics Software - Developed and Purchased	2,480	4,208
Motor Vehicle	60	-
Leasehold Improvements	3,304	4,171
Assets under construction	4,619	2,389
Total	2,587,289	2,640,623

12. 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)

	2025	2026	2027	2028	2029 and thereafter	Total
Transfer payments	9,045,945	7,743,681	5,885,110	4,849,388	6,913,563	34,437,687
Other goods and services	55,693	55,709	55,456	55,284	1,057,832	1,279,974
Total	9,101,638	7,799,390	5,940,566	4,904,672	7,971,395	35,717,661

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	2024	2023
   Employer's contribution to the health and dental insurance plans	$13,136	$9,398
   Accommodation	4,243	4,182
   Total	$17,379	$13,580

   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	2024	2023
   Accounts receivable – Other government departments and agencies	$6,536	$20,025
   Accounts payable – Other government departments and agencies	9,227	8,438
   Expenses – Other government departments and agencies	54,873	53,590

   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. 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, and Communities, Affordable Housing and Homelessness Policy	Public Infrastructure, and Communities and Homelessness Investments	Public Infrastructure and Communities Investment Stewardship and Delivery	Internal Services	2024	2023
Transfer payments
Contributions	$407	$ -	$ 7,249,994	$ -	$7,250,401	$6,512,861
Total transfer payments	$407	-	$7,249,994	$-	$7,250,401	6,512,861
Operating expenses
Salaries and employee benefits	54,720	41,603	48,747	64,315	209,385	151,879
Professional and special services	13,317	1,350	16,571	12,712	43,950	57,186
Rentals	1,132	845	1,208	4,325	7,510	7,352
Amortization	-	-	55,087	1,003	56,090	56,052
Repairs and maintenance	-	-	20,482	932	21,414	19,076
Transportation and communications	359	153	472	845	1,829	1,339
Acquisition of machinery and equipment	2	-	5	672	679	3,667
Information	2,651	167	5	173	2,996	740
Utilities, materials, and supplies	17	5	20	102	144	167
Other	1	1	40,848	2,056	42,906	39,421
Total operating expenses	72,607	44,124	183,445	87,136	386,903	336,880
Total expenses	72,607	44,124	7,433,438	87,136	7,637,304	6,849,741
Revenues
Other revenues	-	-	2,561	-	2,561	2,441
Revenues earned on behalf of government	-	-	(2,561)	-	(2,561)	(2,441)
Total revenues	-	-	-	-	-	-
Net cost from continuing operationsFootnote 2	$72,607	$44,124	$7,433,438	$87,136	$7,637,304	$6,849,741

15. Subsequent events

Funding letters for the Canada Community-Building Fund for a total amount of $1,797,783,843 were signed and provided to the recipients of Nunavut, Ontario, British Columbia, Quebec, Prince Edward Island and Northwest Territories on June 27, 2024. In addition Funding letters for a total amount of $406,572,683 were signed and provided to the recipients of Alberta, New Brunswick, Nova Scotia, Newfoundland and Labrador on July 2, 2024.These letters indicate to each recipient the amounts of funds to be disbursed in 2024-25. Overall, a first payment of $1,102,178,263 will be released no later than mid July 2024. Outstanding Funding letters for the recipients of Yukon, Saskatchewan and Manitoba represent a total amount of $163,801,031.

On June 20th 2024, the departmental enabling legislation has made its way through the legislative process and received Royal Assent. As a result, the legal name of the Office of Infrastructure of Canada has become the Department of Housing, Infrastructure and Communities.

Along with the new legislation, the department has received Treasury Board Secretariat (TBS) approval to change the Department's applied title from Infrastructure Canada to Housing, Infrastructure and Communities Canada (HICC).

In recognition of the important link between housing and infrastructure, this legislation formalizes the mandate and role of the Department of Housing, Infrastructure and Communities to advance national housing outcomes, reduce and prevent homelessness, and support and promote public infrastructure to foster inclusive, sustainable, and prosperous communities.

ANNEX to the Statement of Management Responsibility Including Internal Control over Financial Reporting for the Fiscal Year ending March 31, 2024

1.0 Introduction

This document summarizes the measures taken by Infrastructure Canada (INFC) 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 and the Departmental Plan for the 2023-2024 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 the 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.
• Assessment results and action plans to senior departmental management as applicable, and 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 (and 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, as follows:

2.2.1 Common Service Arrangements

• Public Services and Procurement Canada (PSPC), 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. Infrastructure now administers the payment of its staff salaries in-house, but some staff salaries are still in the transfer process from PSPC management;
• 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 Canada, 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.

Readers of this annex may refer to the annexes of the above-noted organizations for a greater understanding of the systems of internal controls over financial reporting related to these specific services.

Infrastructure Canada relies on other external service providers and departments for the processing of certain transactions and information that are recorded in its financial statements, as follows:

2.2.2 Specific Arrangements

• Public Services and Procurement Canada, which provides pay compensation services. As previously mentioned, this service arrangement is changing, as INFC has taken on its compensation services in-house and has significantly progressed in transferring in all employee pay files.
• Federal delivery partner (Transport Canada), which manages certain contribution programs on behalf of Infrastructure Canada.
• Innovation, Science and Economic Development Canada (ISED), 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 (ESDC), which provides and supports the Common System for Grants and Contributions, used in the delivery of the Reaching Home program; and
• Canada Mortgage and Housing Corporation (CMHC), which as Canada's national housing agency, is an important partner in building new capacities and functions within the department, to deliver Canada's housing mandate.

3.0 Departmental assessment results for the 2023 to 2024 fiscal year

The following table summarizes the status of the ongoing monitoring and testing activities according to the 2023-2024 rotational plan.

3.1 Progress during the 2023 to 20243 fiscal year

INFC completed all planned assessments. Findings were communicated to stakeholders and remedial actions are in progress:

Key Control Areas	Status
Acquisition Cards	Operating Effectiveness Assessment
Cabinet Submissions	Operating Effectiveness Assessment
Entity Level Controls	Ongoing Monitoring Assessment
Information Technology General Controls	Ongoing Monitoring Assessment

The key recommendations from the 2023-2024 control assessment activities are summarized below:

3.2 New or significantly amended key controls

In 2023-2024, Infrastructure Canada further strengthened and embedded existing controls through improved staffing, with special focus on the Department's Housing Mandate, the implementation of various policy updates, as well as the Management Action Plan (MAPs) that resulted from process reviews by Internal Controls, Internal Audit and central agencies tasked with monitoring, such as the Treasury Board of Canada, the Offices of the Auditor and Comptroller Generals, 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 (AC)	Implement a periodic quality assurance exercise on cardholders document retention. Reinforce positive security verification. Provide a comprehensive refresher training to shareholders. Update procedures in relation to FAA Section 33 due diligence requirements. Reinforce credit limits, amendment and disposal requests documentation.
Cabinet Submissions	Implement an Off-Cycle Budget Proposal documentation process. Maintain documentation for a complete and final Budget. Improve communication when sharing Cabinet's decisions on Memoranda to Cabinet (MCs). Reinforce the procedure around MC format selection and annex requirements. Develop a mechanism to verify key stakeholder participation and confirm MC's approver list. Reinforce the functional reviewer sign off process for Treasury Board submissions.
Entity Level Controls	Provide recommendations to increase collaboration and scale the core governance to match the departmental growth. Improve accessibility to financial policies for employees. Update the Internal Disclosure of Wrongdoing and Reprisal Protection's website and reference document for INFC's staff. Integrate INFC's Investment planning to its Integrated Business Planning process. Continue the talent management plan by formally integrating succession planning. Update the fraud risk management framework and conduct a fraud risk assessment. Update the Internal Control Framework and Ongoing Monitoring Plan. Evaluate the integration of automated controls within each business process assessment. Improve the monitoring process related to the creation of letters of offer.
Information Technology (IT) General Controls	Regularly perform and document management review of external housing system reports. Review user profiles' design to restrict key business functions according to key job duties. Obtain and retain approval on system access requests prior to granting any access. Efficiently manage and review user accesses by appropriately restricting system accesses. Reinforce the process for deploying system changes. Perform and retain evidence of periodic system reviews and completed remediation actions. Apply INFC, or Government of Canada minimum password configurations standard. Define and document roles & responsibilities around automated jobs activities. Document and retain automated jobs monitoring activities.

Internal Controls performs periodic follow-ups to encourage and verify 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 five 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 its frequency of controls monitoring. INFC considers changes and emerging risks within its operational environment, and these are reflected in the process risk levels and related frequency of testing incorporated in the monitoring plan.

Approved Rotational ongoing risk-based monitoring plan

Key Control Areas	2024-25	2025-26	2026-27	2027-28	2028-29
Budgeting and Forecasting	✔	-	✔	-	✔
IT General Controls	-	-	✔	-	✔
Procure to Payment	-	✔	-	✔	-
Transfer Payments	-	✔	-	✔	-
Capital Assets	-	-	✔	-	-
Entity Level Controls	-	-	-	✔	-
Payroll	-	✔	-	-	✔
Project Management	✔	✔	-	-	✔
Acquisition Cards	-	-	✔	-	-
Cabinet Submissions	-	-	-	✔	-
Financial Reporting & Financial Close	✔	-	-	-	-
Travel, Hospitality, Conferences & Events	✔	-	-	-	-