Financial Statements (unaudited) - For the year ended March 31, 2020

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, 2020, 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 recognizes the challenges given the fiscal profile of funding programs and is working diligently with all parties to address.

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, 2020 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 is 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 which 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	2020	2019
Liabilities:
Accounts payable and accrued liabilities (note 5)	1,135,550	3,452,313
Samuel De Champlain Bridge Corridor Project (note 4)	881,773	1,831,514
Vacation pay and compensatory leave	4,636	3,076
Employee future benefits (note 7)	2,510	2,493
Contingent liabilities (note 6)	N/A	14,700
Total net liabilities	2,024,469	5,304,096
Financial assets:
Due from Consolidated Revenue Fund	977,517	1,200,183
Accounts receivable and advances (note 8)	155,806	22,488
Total gross assets	1,133,323	1,222,671
Financial assets held on behalf of Government	(358)	(33)
Total net financial assets	1,132,965	1,222,638
Departmental net debt	891,504	4,081,458
Non-Financial assets:
Tangible capital assets (note 9)	2,887,431	2,666,798
Total non-financial assets	2,887,431	2,666,798
Departmental net financial position	1,995,927	(1,414,660)

Contractual obligations (note 10)

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	2020 Planned Results	2020	2019
Expenses by Core Responsibility:
Public infrastructure	7,475,121	5,474,119	7,716,207
Internal Services	55,004	63,000	66,796
Total expenses	7,530,125	5,537,119	7,783,003
Revenues:
Other revenues (note 11)	114	541	395
Revenues earned on behalf of Government	(114)	(541)	(395)
Total revenues	-	-	-
Net cost of operations before government funding and transfers	7,530,125	5,537,119	7,783,003
Government funding and transfers:
Net cash provided by Government of Canada	N/A	9,161,172	4,944,799
Change in due from Consolidated Revenue Fund	N/A	(222,665)	700,645
Services provided without charge by other government departments (note 12)	N/A	9,156	8,658
Net transfer of salary overpayments from (to) other government departments	N/A	43	5
Net cost of operations after government funding and transfers	N/A	(3,410,587)	2,128,896
Departmental net financial position - Beginning of year	N/A	(1,414,660)	714,236
Departmental net financial position - End of year	N/A	1,995,927	(1,414,660)

Segmented Information (note 13)

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

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

N/A	2020	2019
Net cost of operations after government funding and transfers	(3,410,587)	2,128,896
Change due to tangible capital assets
Acquisition of tangible capital assets (note 9)	1,204,763	523,916
Adjustments to assets under construction (note 9)	(869)	-
Amortization of tangible capital assets (note 9)	(33,520)	(2,042)
Adjustments to Samuel De Champlain Bridge Corridor Project Asset (note 9)	(949,741)	-
Total change due to tangible capital assets	220,633	521,874
Net increase (decrease) in departmental net debt	(3,189,954)	2,650,770
Departmental net debt – Beginning of year	4,081,458	1,430,688
Departmental net debt – End of year	891,504	4,081,458

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)

	2020	2019
Operating activities :
Net cost of operations before government funding and transfers	5,537,118	7,783,003
Non-cash items :
Net transfer of salary overpayments (from) to other government departments	(43)	(5)
Adjustments to assets under construction (note 9)	(869)	-
Services provided without charge by other government departments (note 12)	(9,156)	(8,658)
Amortization of tangible capital assets (note 9)	(33,520)	(2,042)
Adjustments to Samuel De Champlain Bridge Corridor Project Assets (note 9)	(949,741)	412,387
Variations in Statement of Financial Position:
Decrease (increase) in accounts payable and accrued liabilities (note 5)	2,316,763	(2,871,990)
Decrease (increase) in Samuel De Champlain Bridge Corridor Project Liability (note 4)	949,741	(412,387)
Increase (decrease) in accounts receivable and advances	132,992	(58,530)
Decrease (increase) in contingent liabilities (note 6)	14,700	(7,700)
Decrease (increase) in employee future benefits (note 7)	(17)	(322)
Decrease (increase) in vacation pay and compensatory leave	(1,559)	(485)
Cash used in operating activities	7,956,409	4,833,271
Capital investing activities
Acquisitions of tangible capital assets (note 9)	1,204,763	111,528
Cash used in capital investing activities	1,204,763	111,528
Net cash provided by Government of Canada	9,161,172	4,944,799

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 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.

Starting in fiscal year 2018-19, INFC reports on its mandate under one core responsibility, as well as internal services, in support of its activities as described below.

Public Infrastructure: INFC’s key business lines and initiatives are grouped in the following Program Inventory:

• Investing in Canada Phase 1 – Funding Allocations for Provinces and Territories;
• Investing in Canada Phase 1 – Funding for Federation of Canadian Municipalities;
• Investing in Canada Infrastructure Program;
• Gas Tax Fund – Permanent Funding for Municipalities;
• New Building Canada Fund – National Infrastructure Component;
• New Building Canada Fund – Funding Allocations for Provinces and Territories;
• Historical Programs;
• Samuel De Champlain Bridge Corridor Project;
• Gordie Howe International Bridge Project;
• Toronto Waterfront Revitalization Initiative;
• Smart Cities Challenge;
• Disaster Mitigation and Adaptation Fund; and
• Research and Knowledge Initiative.

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 2019-2020 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 2019-2020 Departmental Plan.
2. 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
3. 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.
4. Revenues
   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 INFC’s liabilities. While the Deputy Head is expected to maintain accounting control, she has 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.
5. Expenses
   Transfer payments are recorded as an expense when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program.  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 estimated cost.
   The accrued expenses related to Construction in Progress – Samuel De Champlain Bridge Corridor Project are the estimated value of the project assets, provided by the private partner.
6. Employee future benefits:
   1. Pension benefits:  Eligible employees participate in the Public Service Pension Plan (Public Service Superannuation Act), a multiemployer 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: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
7. 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.
8. Non-financial assets
   The cost of acquiring land, buildings, equipment and other capital property are 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 9.  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.
9. 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.
10. 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.
11. 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 Construction in Progress – 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.
12. 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	2020	2019
   Net cost of operations before government funding and transfers	5,537,119	7,783,003
   Adjustments for items affecting net cost of operations but not affecting authorities:
   Decrease (increase) in accrued liabilities related to Budget 2019	2,230,596	(2,230,596)
   Decrease (increase) contingent liabilities	14,700	(7,700)
   Refund of previous year’s expenditures	6,517	9,450
   Other amounts to be charged later to authorities	13	(13)
   Other expenditures not affecting authorities	10	-
   Decrease (increase) in employee future benefits	(17)	(322)
   Adjustments for assets under construction	(869)	-
   Decrease (increase) in vacation pay and compensatory leave	(1,559)	(485)
   Services provided without charge by other government departments	(9,156)	(8,658)
   Amortization of tangible capital assets	(33,520)	(2,042)
   Total items affecting net cost of operations but not affecting authorities	(2,206,715)	(2,240,366)
   Adjustments for items affecting net cost of operations but not affecting authorities:
   Decrease (increase) in vacation pay and compensatory leave	1,204,763	111,528
   Services provided without charge by other government departments	271	85
   Amortization of tangible capital assets	1,205,034	111,613
   Current year authorities used	8,948,868	5,654,250

2. Authorities provided and used

   (in thousands of dollars)

   N/A	2020	2019
   Authorities:
   Vote 1 – Operating expenditures	186,770	135,577
   Vote 5 – Capital expenditures	1,324,769	1,026,670
   Vote 10 – Contributions	5,226,080	3,367,804
   Statutory Amounts:
   Employee Benefit Plan	8,526	7,013
   Minister Office Salary and Car Allowance	89	86
   Gas Tax Fund	4,340,912	2,170,596
   Municipal Asset Management Program (Budget 2019)	60,000	-
   Less:
   Lapsed: Operating	(72,229)	(49,851)
   Lapsed: Capital	(115,795)	(915,018)
   Lapsed: Contributions	(2,010,254)	(88,627)
   Current year authorities used	8,948,868	5,654,250

4. Construction in Progress – Samuel De Champlain Bridge Corridor Project

After a competitive process, in 2015, Signature on the St. Lawrence Group 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 some weather sensitive elements of the corridor that was deferred is expected to be completed by the end of 2020.

Ownership of the bridge and related corridor remains with federal government, and Signature on the St. Lawrence Group will operate the corridor for 30 years.

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	2020	2019
Accounts Payable - Other government departments and agencies	10,228	2,245
Accounts Payable - External parties	1,117,437	1,212,756
Total accounts payable	1,127,665	1,215,001
Accrued Liabilities	7,885	2,237,312
Total accounts payable and accrued liabilities	1,135,550	3,452,313

The 2018-19 accrued liabilities include a one-time transfer payment expense of $2.170 million through the federal Gas Tax Fund and $60 million through the Municipal Asset Management Program as announced in Budget 2019.

6. Contingent liabilities

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

There are no new claims made against INFC in the normal course of operations. The claims and litigations from 2018-19 have been resolved; therefore, there are no outstanding contingent liabilities as at March 31, 2020.

7. 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 2019-2020 expense amounts of $5,906,848 ($4,890,780 in 2018-2019). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2018-2019) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2018-2019) 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, 2020, 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	2020	2019
   Accrued benefit obligation - Beginning of year	2,493	2,171
   Expense for the year	194	495
   Benefits paid during year	(177)	(173)
   Accrued benefit obligation - End of year	2,510	2,493

8. Accounts receivable and advances

Accounts receivable and advances
(in thousands of dollars)

N/A	2020	2019
Receivables - Other government departments and agencies	114,683	16,662
Receivables - External parties	41,113	5,807
Advances - Employees	10	19
Total accounts receivable and advances	155,806	22,488

9. 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	Amorization period
Works and Infrastructure	5 to 100 years
Machinery and Equipment	5 years
Computer Hardware	3 years
Informatics Software – Purchased and Developed	3 to 7 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 2020
(in thousands of dollars)

Capital asset class	Opening balance Footnote 2	Acquisitions	AdjustmentsFootnote 1	Disposals and write-offs	Closing balance
Land	108,013	15,003	-	-	123,016
Works and infrastructure	-	-	2,786,237	-	2,786,237
Machinery and Equipment	-	-	137	-	137
Computer Hardware	-	165	-	-	165
Informatics Software - Developed and Purchased	7,245	-	3,103	(42)	10,306
Motor Vehicles	111	-	-	-	111
Leasehold Improvements	6,089	-	558	-	6,647
Assets under constructionFootnote 3	2,554,734	239,854	(2,790,904)	-	3,684
Total	2,676,192	255,022	(869)	(42)	2,930,303

Accumulated amortization 2020
(in thousands of dollars)

Capital asset class	Opening balance	Amortization	Adjustments	Disposals and write-offs	Closing balance
Land	-	-	-	-	-
Works and infrastructure	-	(29,983)	(383)	-	(30,366)
Machinery and Equipment	-	(34)	(103)	-	(137)
Computer Hardware	-	(5)	-	-	(5)
Informatics Software - Developed and Purchased	(5,645)	(2,303)	-	42	(7,906)
Motor Vehicles	(57)	(22)	-	-	(79)
Leasehold Improvements	(3,693)	(687)	-	-	(4,380)
Assets under construction		-	-	-	-
Total	(9,395)	(33,034)	(486)	42	(42,873)

Net Book Value
(in thousands of dollars)

Capital asset class	2020	2019
Land	123,016	108,013
Works and infrastructure	2,755,871	-
Machinery and Equipment	-	-
Computer Hardware	160	-
Informatics Software - Developed and Purchased	2,400	1,600
Motor Vehicles	32	55
Leasehold Improvements	2,267	2,396
Assets under construction	3,684	2,554,734
Total	2,887,430	2,666,798

10. 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)

	2021	2022	2023	2024	2025 AND THEREAFTER	TOTAL
Transfer payments
Public infrastructure
Border Infrastructure Fund	13,124	-	-	-	-	13,124
Building Canada Fund-Communities Component	21,069	12,915	-	-	-	33,984
Building Canada Fund-Large Urban Centres Component	20,567	16,347	16,346	6,347	-	59,607
Building Canada Fund-Major Infrastructure Component	355,747	150,515	64,963	69,829	-	641,054
Canada Strategic Infrastructure Fund	12,125	-	-	-	11,842	23,967
Clean Water and Wastewater Fund	280,530	56,643	34,089	53,617	107,828	532,707
Disaster Mitigation and Adaptation Fund	83,396	97,333	97,074	76,388	229,181	583,372
Green Infrastructure Fund	68,650	40,834	64,803	5,896	13,757	193,940
Investing in Canada Infrastructure Program	2,479,305	4,370,740	5,244,380	4,737,949	16,440,772	33,273,146
Municipal Asset Management Program	-	25,788	-	-	-	25,788
Municipalities for Climate Innovation Program	25,746	2,640	-	-	-	28,386
New Building Canada Fund-National Infrastructure Component	294,507	301,501	159,455	111,609	219,548	1,086,620
New Building Canada Fund-Provincial-Territorial Infrastructure Component-Small Communities Fund	264,317	219,000	173,804	226,645	-	883,766
New Building Canada Fund-Territorial Infrastructure Component-National and Regional Projects	1,445,822	979,232	511,594	462,082	423,642	3,822,372
P3 Canada Fund	346,895	-	53,300	-	-	400,195
Provincial-Territorial Infrastructure Base Funding	12,500	-	-	-	-	12,500
Public Transit Infrastructure Fund	703,514	176,392	169,988	186,719	-	1,236,613
Smart Cities Challenge	3,367	2,809	2,374	1,871	1,859	12,280
Toronto Waterfront Revitalization Initiative	94,148	50,440	81,000	55,000	-	280,588
Purchases
Samuel De Champlain Bridge Corridor Project (Operations and Maintenance) (note 4)	14,095	91,918	37,199	38,323	1,215,103	1,396,638
Total transfer payments, and purchases	6,539,424	6,595,047	6,710,369	6,032,275	18,663,532	44,540,647

11. Revenue

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

12. 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)

   	2020	2019
   Employer's contribution to the health and dental insurance plans	4,902	4,229
   Accommodation	4,254	4,429
   Total	9,156	8,658

   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)

   	2020	2019
   Accounts receivable – Other government departments and agencies	114,683	16,662
   Accounts payable – Other government departments and agencies	10,228	2,218
   Expenses – Other government departments and agencies	41,246	40,151

   Expenses disclosed in (b) exclude common services provided without charges, which are already disclosed in (a). Common services include other support services from other government departments, such as providing financial and human resources systems, as well as salary recoveries between departments.

   Other Government Departments (OGDs) and agencies administer certain programs on behalf of INFC.  Funds are advanced to these OGDs and agencies, namely Transport 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.

13. 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 or the main programs, 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)

	Public Infrastructure	Internal Services	2020	2019
Transfer payments
Contributions	5,384,051	-	5,384,051	7,671,165
Total transfer payments	5,384,051	-	5,384,051	7,671,165
Operating expenses
Salaries and employee benefits	32,537	43,035	75,572	61,818
Professional and special services	39,887	12,834	52,721	48,508
Rentals	2,433	4,461	6,894	5,728
Amortization	30,026	3,008	33,034	2,042
Repairs and maintenance	8,682	204	8,886	1,952
Transportation and communications	379	1,049	1,428	1,334
Acquisition of machinery and equipment	145	179	324	2,333
Information	79	469	548	520
Utilities, materials, and supplies	45	118	163	141
Other	(24,146)	(2,357)	(26,503)	(12,538)
Total operating expenses	90,067	63,000	153,067	111,838
Total expenses	5,474,118	63,000	5,537,118	7,783,003
Revenues
Other revenues	541	-	541	395
Revenues earned on behalf of government	(541)	-	(541)	(395)
Total revenues	-	-	-	-
Net cost from continuing operations	5,474,118	63,000	5,537,118	7,783,003

14. Subsequent events

Funding letters for the Gas Tax Fund for a total amount of $2,170,315,887 were signed and provided to recipients. These letters indicate to each recipient the amount of funds to be distributed in 2020-2021.

ANNEX to the Statement of Management Responsibility Including Internal Control over Financial Reporting for the Fiscal Year ending March 31, 2020

1.0 Introduction

This document provides summary information on 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 2019 to 2020 Fiscal Year and the Departmental Plan for the 2019 to 2020 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 of its system of internal control. A departmental internal control management framework, approved by the Deputy Head, is in place and comprises:

• Organizational accountability structures as they relate to 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.

The Departmental Audit Committee 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 Departmental Audit Committee is composed of four external members and meets up to four times per year (and more frequently as 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, 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 Canada, which provides legal services; and
• Shared Services Canada, which provides information technology infrastructure services in the areas of data centre 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 or 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;
• 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.

3. Departmental assessment results during the 2019 to 2020 fiscal year

The following table summarizes the status of the ongoing monitoring activities according to the previous fiscal year’s rotational plan.

Progress during the 2019 to 2020 fiscal year

Previous fiscal year's rotational ongoing monitoring plan for current fiscal year

Key control areas	Status
Travel	Complete. The travel business process has been documented, reviewed by process owners, walked through and assessed for operating effectiveness. Findings have been communicated to stakeholders and remedial actions are underway.
Procure-to-Payment	Complete. The procure-to-payment business process has been documented, reviewed by process owners, walked through and assessed for operating effectiveness. Findings have been communicated to stakeholders and remedial actions are underway.
Hospitality	Complete. The hospitality business process has been documented, reviewed by process owners, walked through and assessed for design effectiveness. Findings have been communicated to stakeholders and remedial actions are underway.
Cabinet Submissions	Design effectiveness testing was started in 2019-20 but was delayed due to changes to TBS guidance on cabinet submissions which were implemented after the process began as well as time and resource constraints. This testing will be completed in 2020-21 and has been prioritized for completion in order to minimize the risk of this delay. The on-going monitoring plan has been adjusted to reflect this delay and return this item to the required risk-based monitoring frequency moving forward.
Transfer Payments	Design effectiveness testing was planned for the 2019-20 exercise but was not completed due to time and resource constraints. This testing will be completed in 2020-21 and has been prioritized for completion in order to minimize the risk of this delay. The on-going monitoring plan has been adjusted to reflect this delay and return this item to the required risk-based monitoring frequency moving forward.
Entity Level Controls	Operating effectiveness testing was planned for the 2019-20 exercise but was not completed due to time and resource constraints. This testing will be completed in 2020-21 and has been prioritized for completion in order to minimize the risk of this delay. The on-going monitoring plan has been adjusted to reflect this delay and return this item to the required risk-based monitoring frequency moving forward.
IT General Controls	Design effectiveness testing was planned for the 2019-20 exercise but was not completed due to time and resource constraints. This testing will be completed in 2020-21 and has been prioritized for completion in order to minimize the risk of this delay. The on-going monitoring plan has been adjusted to reflect this delay and return this item to the required risk-based monitoring frequency moving forward.
Budgeting and Forecasting	Operating effectiveness testing was planned for the 2019-20 exercise but was not completed due to time and resource constraints. This testing will be completed in 2020-21 and has been prioritized for completion in order to minimize the risk of this delay. The on-going monitoring plan has been adjusted to reflect this delay and return this item to the required risk-based monitoring frequency moving forward.

The key findings and significant adjustments required from the current fiscal year’s assessment activities are summarized below.

3.1 New or significantly amended key controls

Due to the impact of COVID-19 on the working environment at Infrastructure Canada modifications have been made to the risk assessment and rotational monitoring plan as well as to some of the Internal Control over Financial Management processes. The risk assessment and monitoring plan were adjusted to address changes in work setting, availability of personnel and technology as well as to include the testing of processes impacted by COVID-19. The internal controls team at INFC has launched a process to identify all of the internal control steps that have been impacted by COVID-19 as well as to assess the design and operating effectiveness of the changes made. The major changes identified have been in document retention and the process surrounding financial delegation. Some matters of consistency have been flagged but no major issues have been identified. An action plan is currently in development with stakeholders and will be put into place once ratified by all parties.  

3.2 Ongoing monitoring program

As part of its rotational ongoing monitoring plan, Infrastructure Canada completed its reassessment of the financial controls within the business processes of cabinet submissions, hospitality, procure-to-payment and travel. For the most part, the key controls that were tested performed as intended, with remediation required in the following areas.

• Hospitality
• Improvements needed on the forms for departmental event plans, petty cash claims and hospitality. A management action plan has been prepared.
• Remediation procedures surrounding non-compliance with existing hospitality procedures should be clarified and enforced proactively. A management action plan has been prepared.
• Documentation and training should be updated to more clearly communicate how commitments need to be created prior to the payment of acquisition card transactions. A management action plan has been prepared. 
• Procure-to-payment
• Procedures for completing the Security Requirements Checklist for contracts require improvement and clarification. A management action plan has been prepared.
• Signature cards require revision to show the expiry date for financial delegation training. A management action plan has been prepared.
• Quality control procedures related to contracts over $10K require additional vigor and will be modified to ensure they are being applied uniformly. A management action plan has been prepared.
• Internal training documentation regarding delegated financial authorities should be updated to more strongly communicate the requirements for reviewing transactions prior to approval. A management action plan has been prepared.
• Procedures for review and approval of the Procurement Review Committee on sensitive contracts will be modified to ensure that committee delays do not negatively impact existing contracts. A management action plan has been prepared.
• Travel
• The quality assurance checklist for travel requires updating and additional communications to ensure it is used properly. A management action plan has been prepared.
• A bi-annual review of approvers in HRG should be implemented to ensure that system authorities match delegated authority signature cards. This procedure is to be documented in a standard operating procedure. A management action plan has been prepared.
• All executive and excluded group employees are required to use travel cards for eligible travel card expenditures and this needs to be re-communicated to staff and included in general travel information. A management action plan has been prepared.

4. Departmental action plan for the next fiscal year and subsequent years

Infrastructure Canada’s rotational ongoing monitoring plan over the next five fiscal years, based on an annual validation of the high-risk processes and controls and related adjustments to the ongoing monitoring plan as required, is shown in the following table. The plan has been adjusted to include the items that were not completed in the 2019-20 fiscal year due to factors such as time and resource constraints as well as changes implemented to TBS guidance documents. The monitoring plan in outlying years has been adjusted for the delayed items in order to return INFC back in line with the risk-based monitoring frequency.  

Rotational Ongoing (Risk-Based) Monitoring Plan

Key control areas	2020-21		2021-22		2022-23		2023-24		2024-25
	DEFootnote4	OEFootnote5	DE	OE	DE	OE	DE	OE	DE	OE
Entity Level Controls		Yes					Yes
IT General Controls	Yes							Yes
Budgeting and Forecasting		Yes	Yes			Yes	Yes			Yes
Capital Assets	Yes			Yes	Yes			Yes	Yes
Transfer Payments	Yes			Yes	Yes			Yes	Yes
Cabinet Submissions	Yes					Yes
Payroll			Yes							Yes
Procure to Payment			Yes			Yes	Yes			Yes
Acquisition Cards	Yes							Yes
Financial Reporting and Financial Close			Yes							Yes

 

New Processes to be added based on the yearly risk assessment

Key control areas	2020-21		2021-22		2022-23		2023-24		2024-25
	DE	OE	DE	OE	DE	OE	DE	OE	DE	OE
Procedures impacted by COVID-19	Yes	Yes
ConferencesFootnote6	Yes
EventsFootnote7	Yes
Travel, Hospitality, Conferences and EventsFootnote8				Yes	Yes			Yes