Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying consolidated financial statements for the year ended March 31, 2009 and all information contained in these statements rests with Public Works and Government Services Canada (PWGSC) management. These consolidated 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 consolidated financial statements. Some of the information in the consolidated 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 PWGSC's financial transactions. Financial information submitted to the Public Accounts of Canada and included in PWGSC's Departmental Performance Report is consistent with these consolidated financial statements.

These consolidated financial statements have been reviewed by the Department's Audit and Evaluation Committee which provides the Deputy Minister of Public Works and Government Services Canada with independent and objective advice, guidance, and assurance on the adequacy of the department's risk management, control, and governance processes. The Committee's oversight responsibilities extend to other core areas of departmental control and accountability including values and ethics, risk management, and the management control framework.

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 consolidated 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 PWGSC.

The consolidated financial statements of PWGSC have not been audited.

François Guimont, Deputy Minister
Public Works and Government Services Canada
Gatineau, Canada
August 5, 2009

André Léger, A/Chief Financial Officer
Public Works and Government Services Canada
Gatineau, Canada
August 5, 2009

Consolidated Statement of Operations (Unaudited)
For the year ended March 31

(in thousands of dollars)

	2009	2008
Expenses
Real Property	3,365,025	3,131,446
Information Technology	558,025	624,938
Acquisitions	433,812	372,152
Receiver General and Public Service Compensation	308,002	242,029
Translation Bureau	228,877	204,955
Consulting, Information and Shared Services	98,752	37,709
Audit Services Canada	33,774	74,810
Greening Government Operations	10,278	4,758
Business Integration	—	38,715
Total expenses	5,036,545	4,731,512
Revenues
Real Property	1,860,978	1,938,733
Information Technology	348,130	294,972
Acquisitions	181,130	193,826
Receiver General and Public Service Compensation	134,242	104,287
Translation Bureau	152,738	143,173
Consulting, Information and Shared Services	35,230	5,290
Audit Services Canada	27,948	24,611
Greening Government Operations	4	1,315
Business Integration	—	22,865
Total revenues	2,740,400	2,729,072
Net cost of operations	2,296,145	2,002,440

Segmented information (Note 16)

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

Consolidated Statement of Financial Position (Unaudited)
At March 31

(in thousands of dollars)

	2009	2008
Assets
Financial assets
Accounts receivable and advances (Note 4)	466,997	434,111
Inventory held for resale	5,495	5,357
Seized Property Working Capital Account	18,647	16,520
	491,139	455,988
Non-financial assets
Prepaid expenses	3,099	6,502
Tangible capital assets (Note 5)	4,620,487	4,567,966
	4,623,586	4,574,468
Total assets	5,114,725	5,030,456
Liabilities
Accounts payable and accrued liabilities (Note 6)	696,004	516,801
Other liabilities (Note 7)	85,660	77,019
Lease obligation for tangible capital assets (Note 8)	2,391,164	2,497,179
Vacation pay and compensatory leave	55,690	52,029
Employee severance benefits (Note 9)	231,508	184,213
Contingent and environmental liabilities (Note 10)	289,632	319,023
Lease inducements and deferred revenues	30,196	27,047
	3,779,854	3,673,311
Equity of Canada (Note 13)	1,334,871	1,357,145
Total liabilities and equity of Canada	5,114,725	5,030,456

Contractual obligations (Note 11)

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

Consolidated Statement of Equity of Canada (Unaudited)
For the year ended March 31

(in thousands of dollars)

	2009	2008
Equity of Canada, beginning of year	1,357,145	2,256,380
Net cost of operations	(2,296,145)	(2,002,440)
Current year appropriations used (Note 3)	2,461,498	2,347,228
Revenue not available for spending (Note 3)	(61,060)	(63,504)
Proceeds on sale-leaseback transactions for capital leases	—	(1,353,316)
Change in net position in the Consolidated Revenue Fund (Note 3)	(183,576)	119,030
Services received without charge from other government departments (Note 12)	57,009	53,767
Equity of Canada, end of year (Note 13)	1,334,871	1,357,145

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

Consolidated Statement of Cash Flow (Unaudited)
For the year ended March 31

(in thousands of dollars)

	2009	2008
Operating Activities
Net cost of operations	2,296,145	2,002,440
Non cash items:
Amortization of tangible capital assets (Note 5)	(440,120)	(382,103)
Gain or loss on disposals / Adjustments of tangible capital assets	(10,644)	(154)
Services received without charge from other government departments (Note 12)	(57,009)	(53,767)
Economic gain on sale-leaseback	—	163,662
Variations in Consolidated Statement of Financial Position:
Increase in financial assets	35,151	25,568
Decrease in prepaid expenses	(3,403)	(1,035)
(Increase) decrease in liabilities other than lease obligation for tangible capital assets	(212,558)	103,408
Cash used by operating activities	1,607,562	1,858,019
Capital investment activities
Acquisitions of tangible capital assets (Note 5)	483,104	430,406
Proceeds on disposal of tangible capital assets	(157)	(167)
Cash used by capital investment activities	482,947	430,239
Financing activities
Payments on lease obligation for tangible capital assets	126,353	114,496
Proceeds on sale-leaseback transactions for capital leases	—	(1,353,316)
Cash used by financing activities	126,353	(1,238,820)
Net cash provided by Government of Canada	2,216,862	1,049,438

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