ARCHIVED - Financial Statements For the Year Ended March 31, 2009

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Table of Contents

• Statement of Management Responsibility
• Statement of Operations (Unaudited) For the Year Ended March 31
• Statement of Financial Position (Unaudited) At March 31
• Statement of Equity of Canada (Unaudited) For the Year Ended March 31
• Statement of Cash Flow (Unaudited) For the Year Ended March 31
• Notes to the March 31, 2009 Financial Statements (Unaudited)
  • 1. Authority and Objectives
  • 2. Summary of Significant Accounting Policies
  • 3. Parliamentary Appropriations
  • 4. Excise Taxes
  • 5. Accounts Receivable and Advances
  • 6. Taxes Receivable
  • 7. Tangible Capital Assets
  • 8. Accounts Payable and Accrued Liabilities
  • 9. Payable to Provinces
  • 10. Deposit Accounts
  • 11. Employee Severance Benefits
  • 12. Contingent Liabilities
  • 13. Related Party Transactions
  • 14. Comparative information

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Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2009 and all information contained in these statements rests with Canada Border Services Agency's (Agency) management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.
 
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 the Agency's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Agency's Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the Agency. 

The financial statements of the Agency have not been audited.

Statement of Operations (Unaudited) For the Year Ended March 31

(in thousands of dollars)

	2009				2008
	Access	Security	"Science & Technology"	Total	Total
Revenues
Tax revenues
Excise taxes (Note 4)	17,348,016	0	0	17,348,016	19,586,767
Customs import duties	4,036,148	0	0	4,036,148	3,902,834
Excise duties	1,238,251	0	0	1,238,251	1,235,082
Total	22,622,415	0	0	22,622,415	24,724,683
Non-tax revenues
Seized property	46,457	0	0	46,457	22,135
Sale of goods and services	21,631	3,038	234	24,903	20,642
Interest, penalties and fines	23,843	45	47	23,935	31,563
Miscellaneous	1,764	1,350	616	3,730	1,300
Forfeitures of cash bonds	0	1,567	0	1,567	2,050
Gain on sale of assets	117	66	69	252	138
Total	93,812	6,066	966	100,844	77,828
Total Revenues	22,716,227	6,066	966	22,723,259	24,802,511
Operating Expenses
Salaries and employee benefits	763,545	342,451	176,816	1,282,812	1,095,626
Professional and special services	86,625	85,744	89,968	262,337	260,526
Transportation and telecommunication	27,772	30,779	12,047	70,598	67,793
Rental of land and buildings	27,501	15,708	16,142	59,351	56,819
Amortization	14,137	12,051	8,257	34,445	32,378
Materials and supplies	9,851	6,789	3,708	20,348	26,100
Repair and maintenance	14,439	9,098	429	23,966	25,843
Consumable machinery and equipment (parts)	6,607	10,323	17,977	34,907	19,471
Other	3,818	4,676	1,522	10,016	8,119
Bad debts (Recovery)	67,732	72	75	67,879	(35,170)
Total Expenses	1,022,027	517,691	326,941	1,866,659	1,557,505
Net Results	21,694,200	(511,625)	(325,975)	20,856,600	23,245,006

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

Statement of Financial Position (Unaudited) At March 31

(in thousands of dollars)

	2009	2008
Assets
Financial assets
Cash	1,344,105	1,271,299
Accounts receivable and advances (Note 5)	152,255	402,803
Taxes receivable (Note 6)	1,070,172	1,376,608
Total financial assets	2,566,532	3,050,710
Non-financial assets
Prepaid expenses	141	266
Inventory	7,110	7,205
Tangible capital assets (Note 7)	383,825	334,580
Total non-financial assets	391,076	342,051
Total	2,957,608	3,392,761
Liabilities and Equity of Canada
Liabilities
Accounts payable and accrued liabilities (Note 8)	276,050	2,017,076
Payable to provinces (Note 9)	13,451	6,907
Taxes payable	1,531	22,570
Deposit accounts (Note 10)	39,329	39,547
Employee severance benefits (Note 11)	207,198	182,784
Total	537,559	2,268,884
Equity of Canada	2,420,049	1,123,877
Total	2,957,608	3,392,761

Contingent liabilities (Note 12)
The accompanying notes form an integral part of these financial statements.

Statement of Equity of Canada (Unaudited) For the Year Ended March 31

(in thousands of dollars)

	2009	2008
Equity of Canada, beginning of year	1,123,877	3,278,544
Net results	20,856,600	23,245,006
Current year appropriations used (Note 3)	1,647,636	1,448,707
Revenue not available for spending	(22,721,025)	(24,803,029)
Change in net position in the Consolidated Revenue Fund (Note 3)	1,360,937	(2,174,632)
Services provided without charge from other government departments (Note 13)	152,024	129,281
Equity of Canada, end of year	2,420,049	1,123,877

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

Statement of Cash Flow (Unaudited) For the Year Ended March 31

(in thousands of dollars)

	2009	2008
Operating activities
Net results	20,856,600	23,245,006
Non-cash items:
Services provided without charge by other government departments	152,024	129,281
Amortization of tangible capital assets	34,445	32,378
Loss on disposal and write-down of tangible capital assets	(2,699)	(5,952)
Variations in Statement of Financial Position:
Decrease (Increase) in accounts receivable and advances	250,548	(385,359)
Decrease (Increase) in tax receivables	306,436	(81,566)
Decrease (Increase) in prepaid expenses	125	(107)
Decrease (Increase) in inventory	95	(3,399)
(Decrease) Increase in accounts payable and accrued liabilities	(1,741,026)	1,840,893
Increase (Decrease) in payable to provinces	6,544	(1,335)
(Decrease) Increase in deposit accounts	(218)	(1,276)
(Decrease) in tax payables	(21,039)	(1,096)
Increase in employee severance benefits	24,414	14,723
Cash generated by operating activities	19,866,249	24,782,191
Capital investment activities
Acquisitions of tangible capital assets	(81,264)	(48,815)
Proceeds from disposal of tangible capital assets	275	138
Cash used by capital investment activities	(80,989)	(48,677)
Financing activities
Net cash forwarded to the Government of Canada	(19,712,454)	(25,528,954)
Net cash used	72,806	(795,440)
Cash, beginning of year	1,271,299	2,066,739
Cash, end of year	1,344,105	1,271,299

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

Notes to the March 31, 2009 Financial Statements (Unaudited)

1. Authority and Objectives

The Canada Border Services Agency is responsible for providing integrated border services that support national security and public safety priorities and facilitate the free flow of persons and goods. The Canada Border Services Agency Act received royal assent on November 3, 2005. The Agency is a departmental corporation named in Schedule II of the Financial Administration Act and reports to Parliament through the Minister of Public Safety. The Agency is funded through appropriations from the Government of Canada.

The Agency is responsible for the administration and enforcement of the following acts or portions of these acts: the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act, the Citizenship Act, the Immigration and Refugee Protection Act, as well as other acts on behalf of other federal departments and provinces.

In delivering efficient and effective border management that contributes to the security and prosperity of Canada, the Agency operates under the following program activities:

1. The Access program activity ensures the lawful flow of people and goods while promoting compliance with border legislation/regulations.
2. The Security program activity, within the context of the government's security agenda, and through effective and efficient border management, ensures the safety and security of Canadians.
3. The Science- and Technology- Based Innovation ("Science and Technology") program activity utilizes the science and technology capacity of the Canada Border Services Agency to modernize border management and increase the effectiveness and efficiency of border operations.

2. Summary of Significant Accounting Policies

The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

Significant accounting policies are as follows:

(a) Parliamentary appropriations

The Agency is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the Agency do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the bases of reporting.

(b) Net Cash Forwarded to the Government of Canada

The Agency operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Agency is deposited to the CRF and all cash disbursements made by the Agency are paid from the CRF. The net cash forwarded to the Government of Canada is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.

(c) Change in net position in the Consolidated Revenue Fund

The change in net position in the Consolidated Revenue Fund is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non respendable revenue recorded by the Agency. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Tax revenues

Tax revenues reported in this statement include revenues assessed under the authority of the Customs Act, the Customs Tariff, the Excise Act and the Excise Tax Act. These taxes include: excise taxes, which consist of the goods and services tax (GST) and the harmonized sales tax (HST), excise duties and customs import duties.  Domestic HST and GST, as well as the input tax credits accorded for GST/HST paid on importations and domestic transactions, are not reflected in these statements as the Canada Revenue Agency is responsible for their administration.

The determination of the Agency';s tax revenues is based on the taxes and duties assessed that relate to goods authorized by the Agency to enter into Canada during the fiscal year that ended March 31. These revenues are recognized at the time the goods are released.

The Canadian customs and tax systems are predicated on self-assessment where importers are expected to understand the laws and comply with them. This has an impact on the completeness of duty and tax revenues when importers fail to comply with laws, for example, if they do not declare or incorrectly declare goods imported. The Agency has implemented systems and controls in order to detect and correct situations where importers are not complying with the various acts it administers. These systems and controls include performing audits of importer records where determined necessary by the Agency. Such procedures cannot be expected to identify all undeclared or incorrectly declared importations or other cases of non-compliance. The Agency does not estimate the amount of unreported duties and taxes. However, such amounts are included in revenues when assessed.

(e) Non-tax revenues

Non-tax revenues reported in this statement include revenues collected on behalf of the Government of Canada under the Immigration and Refugee Protection Act, the Agriculture and Agri-Food Administrative Monetary Penalties Act and other similar legislation.

Non-tax revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenue.

(f) Expenses

All expenses are recorded on an accrual basis:

• Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment. The liability for vacation pay and compensatory leave is calculated at the salary levels in effect at the end of the year for all unused vacation pay and compensatory leave benefits accruing to employees.
• Services provided without charge by other government departments for accommodation, workers' compensation benefits, the employer's contribution to the health and dental insurance plans and legal services are recorded as operating expenses at their estimated cost.

(g) Cash

Cash includes amounts received in Agency offices or by Agency agents as at March 31 but not yet deposited to the credit of the CRF of the Government of Canada.

(h) Accounts receivable and advances

Accounts receivable and advances are stated at amounts expected to be ultimately realized; a provision is made for doubtful accounts where recovery is considered uncertain. 

(i) Taxes receivable

Taxes receivable represent duties and taxes and other revenues assessed or estimated by the Agency but not yet collected. All receivables are stated at amounts ultimately expected to be realized. A provision is made for doubtful accounts where recovery is considered uncertain. This allowance for doubtful accounts reflects management's best estimate of the collectability of amounts assessed but not yet paid.

(j) Inventory

Inventory consists of forms, publications and uniforms and is not intended for resale. Items in the inventory are valued at cost using the weighted average cost method. Items that are considered obsolete are written off. The cost of inventory is charged to operations in the period in which the items are used.

(k) Tangible capital assets

All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. Amortization of capital assets, except land, is performed on a straight-line basis over the estimated useful lives of the assets as follows:

Asset class	Amortization period
Buildings	30 years
Works and infrastructure	40 years
Machinery and equipment	10 years
Information technology equipment	5 years
In-house-developed software	7 years
Purchased software	3 years
Vehicles	5 years to 10 years
Leasehold improvements	Over the useful life of the improvement or the lease term, whichever is shorter.
Assets under construction	Once in service, determined in accordance with asset type.

(l) Taxes payable

Taxes payable to importers represent refunds and related interest resulting from assessments completed after March 31 for excise duties, customs import duties and GST/HST for current or prior year imports.

(m) Employee future benefits

1. Pension benefits: Eligible employees participate in the Public Service Superannuation Plan, a multi-employer plan administered by the Government of Canada. The Agency's contributions to the Plan are charged to expense in the year incurred and represent the Agency's total obligation to the Plan. Current legislation does not require the Agency to make contributions for any actuarial deficiencies of the Plan.
2. Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. 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. 

(n) Contingent liabilities

Contingent liabilities are potential liabilities, which 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.

(o) Environmental liabilities

Environmental liabilities reflect the estimated costs related to the management and remediation of contaminated sites. Based on management's best estimates, a liability is accrued and an expense recorded when the contamination occurs or when the Agency becomes aware of the contamination and is obligated or is likely to be obligated to incur remedial costs. If the likelihood of the Agency's obligation to incur these costs is either not determinable or unlikely, or if an amount cannot be reasonably estimated, the costs are disclosed as contingent liabilities in the notes to the financial statements.

(p) Measurement uncertainty

The preparation of these financial statements, in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. 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 contingent liabilities, environmental liabilities, the liability for employee severance benefits, the allowances for doubtful accounts 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.

3. Parliamentary Appropriations

The Agency receives most of its funding through Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Agency has different net results for the year on a government funding basis than on an accrual accounting basis.

These differences are reconciled below:

(a) Reconciliation of net results to current year appropriations used

	2009	2008
	(in thousands of dollars)
Net results	(20,856,600)	(23,245,006)
Adjustments for items affecting net results but not affecting appropriations
Add (Less):
Revenue not available for spending	22,721,025	24,803,029
Services provided without charge	(152,024)	(129,281)
(Bad Debt) Recoveries of debt	(67,879)	35,170
Amortization of tangible capital assets	(34,445)	(32,378)
Employee severance benefits	(24,414)	(14,723)
Loss on disposal and write-down of tangible capital assets	(2,699)	(5,952)
Other	(16,372)	(14,473)
Total	22,423,192	24,641,392
Adjustments for items not affecting net results but affecting appropriations
Add (Less):
Acquisition of tangible capital assets	81,264	48,815
Inventory variation	(95)	3,399
Prepaid expenses	(125)	107
Total	81,044	52,321
Current year appropriations used	1,647,636	1,448,707

(b) Appropriations provided and used

	2009	2008
	(in thousands of dollars)
Parliamentary appropriations
Vote 10 – Operating expenditures	1,579,624	1,429,161
Vote 15 – Capital expenditures	115,505	99,364
Total	1,695,129	1,528,525
Statutory amounts
Contributions to employee benefit plans	161,233	149,791
Spending proceeds from disposal of surplus crown assets	396	262
Refunds of amounts credited to revenues from previous years	42	519
Court Awards	11	0
Collection agency fees	4	8
Total	161,686	150,580
Available for use in subsequent years
Vote 10 – Operating expenditures	(146,524)	(165,816)
Vote 15 – Capital expenditures	(62,505)	(64,462)
Total	(209,029)	(230,278)
Appropriations available for future years	(150)	(120)
Current year appropriations used	1,647,636	1,448,707

(c) Reconciliation of net cash provided by (forwarded to) Government to current year appropriations used

	2009	2008
	(in thousands of dollars)
Net cash provided by (deposited to) Government	(19,712,454)	(25,528,954)
Revenue not available for spending	22,721,025	24,803,029
Change in net position in the Consolidated Revenue Fund
Variation in accounts receivable	484,178	328,515
Variation in accounts payable and accrued liabilities	(1,755,739)	1,837,186
Variation in non-financial assets	(49,025)	(25,757)
Other adjustments	(40,351)	34,688
Total	(1,360,937)	2,174,632
Other	2	0
Current year appropriations used	1,647,636	1,448,707

4. Excise Taxes

Effective January 1, 2008, the GST and HST rates applied against imported goods were reduced from 6% and 14% to 5% and 13% respectively. The excise tax revenue amount appearing in the statement of operations reflects the reduction in the rates. Revenues from excise taxes are remitted in monthly installments to the Department of Finance Canada on the basis of a remittance schedule set by that department. The amounts remitted represent the participating provinces' share of the HST collected by the Agency under the terms of the Comprehensive Integrated Tax Coordination Agreement.

The following table presents details of the excise tax revenues:

	2009	2008
	(in thousands of dollars)
GST/HST (net)	17,266,282	19,448,447
Excise tax - gasoline	34,448	91,955
Other excise tax	47,286	46,365
Total excise taxes	17,348,016	19,586,767

 

5. Accounts Receivable and Advances

The following table presents details of the accounts receivable and advances:

	2009	2008
	(in thousands of dollars)
Receivables from other Federal Government departments and agencies	147,265	397,334
Receivables from external parties	4,306	4,338
Employee advances and other receivables	1,673	1,832
Total	153,244	403,504
Less: allowance for doubtful accounts on external receivables	(989)	(701)
Total	152,255	402,803

 

6. Taxes Receivable

Taxes receivable represent the customs duties, excise taxes, GST and HST due to the Receiver General for Canada as a result of importations into Canada.

The following table presents details of taxes receivable:

	2009	2008
	(in thousands of dollars)
Taxes receivable	1,209,436	1,498,855
Less: allowance for doubtful accounts	(139,264)	(122,247)
Net taxes receivable	1,070,172	1,376,608

 

7. Tangible Capital Assets

(in thousands of dollars)

	Cost				Accumulated amortization				2009	2008
Capital asset class	Opening balance	Acquisi- tions	Transfers, disposals, write-offs	Closing balance	Opening balance	Amorti-zation	Transfers, disposals, write-offs	Closing balance	Net book value	Net book value
Land	5,204	57	794	4,467	0	0	0	0	4,467	5,204
Buildings	147,559	4,507	(7,062)	159,128	50,447	5,753	346	55,854	103,274	97,112
Leasehold Improvements	0	1,026	(7,127)	8,153	0	2,092	(229)	2,321	5,832	0
Works and infrastructure	1,124	0	0	1,124	356	21	0	377	747	768
Machinery and equipment	61,864	8,289	858	69,295	29,984	6,030	464	35,550	33,745	31,880
Information technology equipment, in-house-developed and purchased software	132,540	4,088	(283)	136,911	66,331	17,928	2,368	81,891	55,020	66,209
Vehicles	26,755	3,715	2,086	28,384	20,077	2,621	2,139	20,559	7,825	6,678
Assets under construction	126,729	59,582	13,396	172,915	0	0	0	0	172,915	126,729
Total	501,775	81,264	2,662	580,377	167,195	34,445	5,088	196,552	383,825	334,580

8. Accounts Payable and Accrued Liabilities

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

	2009	2008
	(in thousands of dollars)
Payables to external parties	41,133	45,877
Payables to other Federal Government departments and agencies	67,042	1,873,122
Accrued salary, vacation pay and compensatory leave	167,875	98,077
Total	276,050	2,017,076

9. Payable to Provinces

The following table presents details on the memorandums of understanding (MOUs) that have been established between the provinces and the Agency, whereby the Agency collects provincial sales, alcohol and tobacco taxes on behalf of the provinces and remits these collections directly to the provinces. 

	2009	2008
	(in thousands of dollars)
Payable to provinces, beginning of year	6,907	8,242
Receipts from taxpayers	179,841	102,245
Refunds to taxpayers	(2,361)	(1,249)
Payments to provinces	(170,936)	(102,331)
Payable to provinces, end of year	13,451	6,907

 

10. Deposit Accounts

The deposit accounts were established to record cash and securities required to guarantee payment of customs duties and excise taxes on imported goods pursuant to the Customs Act and the Excise Tax Act and to guarantee the compliance of transporters and individuals with the provisions of the Immigration and Refugee Protection Act. 

The following table presents details on the deposit accounts:

	Opening Balance	Receipts	Payments	Closing Balance
	(in thousands of dollars)
Guarantee deposit accounts	34,482	12,406	(12,101)	34,787
Other deposit accounts	5,065	55	(578)	4,542
Total deposit accounts	39,547	12,461	(12,679)	39,329

11. Employee Severance Benefits

(a) Pension benefits

The Agency's employees participate in the Public Service Pension 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
two percent per year of pensionable service, times the average of the best five consecutive years of earnings.  The benefits are integrated with Canada/Quebec pension plan benefits and they are indexed to inflation.

Both the employees and the Agency contribute to the cost of the Plan. The 2008-2009 expense amounts to $116,410,000 ($109,197,000 in 2007-2008), which represents approximately 2.0 times (2.1 in 2007-08) the contributions by employees.

The Agency'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.

(b) Severance benefits

The Agency provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:

	2009	2008
	(in thousands of dollars)
Accrued benefit obligation, beginning of year	182,784	168,061
Expense for the year	35,623	26,158
Benefits paid during the year	(11,209)	(11,435)
Accrued benefit obligation, end of year	207,198	182,784

12. Contingent Liabilities

a) Contaminated sites

Liabilities are accrued to record the estimated costs related to the management and remediation of contaminated sites where the Agency is obligated or likely to be obligated to incur such costs. The Agency identified one site in 2009 (one site in 2008) where such action is possible and for which a liability of $362,000 ($770,000 in 2008) has been recorded. The Agency's ongoing efforts to assess contaminated sites may result in additional environmental liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. These liabilities will be accrued in the year in which they become known.

(b) Claims and litigation

Claims have been made against the Agency in the normal course of operations. Legal proceedings for claims totaling approximately $1,686,000,000 ($121,000,000 in 2008) were still pending as at 0March 31, 2009. In addition, appeals for previously assessed customs duties, excise duties, GST and HST have been received in the amount of $109,000,000 ($80,000,000 in 2008).

Some of these claims and appeals 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 and expense are recorded in the financial statements. As at March 31, 2009, the Agency has recorded an estimated liability of $290,000 ($290,000 in 2008) in relation to claims and appeals.

13. Related Party Transactions

The Agency is related in terms of common ownership to all Government of Canada departments, agencies and Crown corporations. The Agency enters into transactions with these entities in the normal course of business and on normal trade terms. Also during the year, the Agency received services, which were obtained without charge from other government departments as presented in part (a).

(a) Services provided without charge

During the year, the Agency received without charge from other departments, accommodation, legal services, workers' compensation coverage and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the Agency's statement of operations as follows:

The Government has structured some of its administrative activities for efficiency and cost-effectiveness such that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the Agency's statement of operations.

	2009	2008
	(in thousands of dollars)
Accommodation	58,403	56,388
Employer's contribution to the health and dental insurance plans	79,530	67,509
Workers' compensation coverage	346	523
Legal services	13,745	4,861
Total	152,024	129,281

(b) Administration of programs

The Agency has arrangements with the Canada Revenue Agency for the provision of information technology services, which are paid for on a quarterly basis for a total of $118,475,000 in 2009 ($128,614,000 in 2008).

14. Comparative information

Comparative figures have been reclassified to conform to the current year's presentation.