National Film Board

Public Accounts of Canada 2017 Volume III - Top of the page Navigation

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, 2017, and all information contained in these statements rests with the management of the National Film Board (the "Board"). These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards. They have been approved by the Board of Trustees.

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 Board's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Board's Departmental Performance Report, is consistent with these financial statements.

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

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Board 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.

The Board is subject to periodic Core control audits performed by the Office of the Comptroller General and uses the results of such audits to comply with the Treasury Board Policy on Internal Control.

A Core Control Audit was performed in 2016-2017 by the Office of the Comptroller General of Canada (OCG). The Audit Report and related Management Action Plan are posted on the departmental web site at www.onf.gc.ca.

The Office of the Auditor General, the independent auditor for the Government of Canada, has expressed an opinion on the fair presentation of the financial statements of the Board which does not include an audit opinion on the annual assessment of the effectiveness of the Board's internal controls over financial reporting.

Approved by:

Claude Joli-Coeur
Government Film Commissioner

Luisa Frate, CPA, CA
Director General, Finance, Operations and Technology
(Chief Financial Officer)

July 13, 2017
Montréal, Canada

Statement of authority provided (used) (unaudited) for the year ended March 31

(in thousands of dollars)

  2017 2016
EstimatesLink to footnote 1 Actual EstimatesLink to footnote 1 Actual
Cost of operation (negative 61,895) (negative 62,162) (negative 61,797) (negative 60,060)
Items not requiring use of funds 3,496 2,438
Operating source (use) of funds (negative 61,895) (negative 58,666) (negative 61,797) (negative 57,622)
Items requiring use of funds
Net capital acquisitions (negative 4,489) (negative 2,210)
Net other assets and liabilities (negative 760) (negative 89)
Authority provided (used) (negative 61,895) (negative 63,915) (negative 61,797) (negative 59,921)
Annual voted authority (used) 63,155 59,832
Revolving fund legislative authority used (negative 760) (negative 89)

Reconciliation of unused authority (unaudited) as at March 31

(in thousands of dollars)

  2017 2016
Credit balance in the accumulated net charge against the Fund's authority (negative 6,215) (negative 5,033)
Payables at year-end charged against the credit account after March 31 (negative 4,569) (negative 6,099)
Net legislative revolving fund authority used, end of year (negative 10,784) (negative 11,132)
Allocation from Treasury Board for the transition to salary payments in arrears 1,108
Revolving fund legislative authority limit 15,000 15,000
Unused legislative revolving fund authority carried forward 4,216 4,976

Independent auditor's report

To the Minister of Canadian Heritage

Report on the financial statements

I have audited the accompanying financial statements of the National Film Board, which comprise the statement of financial position as at 31 March 2017, and the statement of operations and departmental net financial position, statement of change in departmental net debt and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the financial statements present fairly, in all material respects, the financial position of the National Film Board as at 31 March 2017, and the results of its operations, changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Report on other legal and regulatory requirements

In my opinion, the transactions of the National Film Board that have come to my notice during my audit of the financial statements have, in all significant respects, been in accordance with the National Film Act and the by-laws of the National Film Board.

Tina Swiderski, CPA auditor, CA
Principal,
for the Auditor General of Canada

July 13, 2017
Montréal, Canada

Statements of financial position as at March 31

(in thousands of dollars)

  2017 2016
Liabilities
Accounts payable and accrued liabilities (Note 5) 3,689 4,662
Accrued salaries 2,082 1,915
Vacation pay and provision for salary revisions 2,921 1,046
Deferred revenue 388 445
Lease obligation for tangible capital assets (Note 6) 209 166
Employee future benefits (Note 7) 2,712 2,651
Total net liabilities 12,001 10,885
Financial assets
Due from Consolidated Revenue Fund 4,336 4,463
Accounts receivable (Note 8) 1,709 1,730
Deposits 90 100
Total net financial assets 6,135 6,293
Departmental net debt 5,866 4,592
Non-financial assets
Prepaid expenses 539 469
Inventory 142 131
Tangible capital assets (Note 9) 9,617 7,431
Total non-financial assets 10,298 8,031
Departmental net financial position 4,432 3,439

Approved by Board of Trustees:

Claude Joli-Coeur
Government Film Commissioner and Chairperson
National Film Board of Canada

Anita Patil Huberman
Member of the Board of Directors

July 13, 2017

Statement of operations and departmental net financial position for the year ended March 31

(in thousands of dollars)

  2017
Expected results
2017 2016
Expenses (Note 12a)
Audiovisual production 30,483 32,451 30,267
Accessibility and audience engagement 24,683 24,256 24,171
Internal services 9,578 10,212 9,009
Total expenses 64,744 66,919 63,447
Revenues (Note 12b)
Audiovisual products 3,060 2,813 2,957
Sponsoring production and pre-sales 2,473 1,921 349
Other revenues 50 23 81
Total revenues 5,583 4,757 3,387
Net cost of operations before government funding and transfers 59,161 62,162 60,060
Government funding and transfers
Net cash provided by Government of Canada 62,624 63,282 61,067
Change in due from Consolidated Revenue Fund (negative 127) (negative 1,231)
Net (revenue) cost of operations after government funding and transfers (negative 3,463) (negative 993) 224
Departmental net financial position, beginning of year 3,096 3,439 3,663
Departmental net financial position, end of year 6,559 4,432 3,439

Statement of change in departmental net debt for the year ended March 31

(in thousands of dollars)

  2017
Expected results
2017 2016
Net (revenue) cost of operations after government funding and transfers (negative 3,463) (negative 993) 224
Change due to tangible capital assets
Acquisition of tangible capital assets 5,856 4,532 2,375
Amortization of tangible capital assets (negative 2,474) (negative 2,346) (negative 2,722)
Loss on disposal of tangible capital assets (negative 161)
Total change due to tangible capital assets 3,382 2,186 (negative 508)
Change due to inventories 11 59
Change due to prepaid expenses 70 8
Net change in department net debt (negative 81) 1,274 (negative 217)
Department net debt, beginning of year 4,380 4,592 4,809
Department net debt, end of year 4,299 5,866 4,592

Statement of cash flows for the year ended March 31

(in thousands of dollars)

  2017 2016
Operating activities
Net cost of operations before government funding and transfers 62,162 60,060
Non-cash items
Amortization of tangible capital assets (negative 2,346) (negative 2,722)
Loss on disposal of tangible capital assets (negative 161)
Variations in statement of financial position
Variations in accrued salaries (negative 167) (negative 56)
Change in vacation pay and provision for salary revisions (negative 1,875) (negative 281)
Net change in employee future benefits (negative 61) 229
Change in accounts payable and accrued liabilities 1,235 2,455
Change in accounts receivable (negative 21) (negative 387)
Change in deposits (negative 10) 4
Change in deferred revenue 57 (negative 213)
Change in prepaid expenses 70 8
Change in inventory 11 59
Cash used in operating activities 59,055 58,995
Capital investing activities
Cash used to acquire tangible capital assets 4,060 2,034
Cash used in capital investing activities 4,060 2,034
Financing activities
Lease payments for tangible capital assets 167 38
Cash used in financing activities 167 38
Net cash provided by Government of Canada 63,282 61,067

Notes to the financial statements for the year ended March 31, 2017

1. Authority and purposes

The National Film Board was established in 1939 under the National Film Act and is the agency responsible for administering the Act.

The National Film Board (the "Board") is a cultural agency named in Schedule I.1 of the Financial Administration Act reporting to the Minister of Canadian Heritage. It is administered by a Board of Trustees appointed by the Governor in Council and chaired by the Government Film Commissioner.

The Board's legislative mandate is to initiate and promote the production and distribution of films in the national interest and, in particular:

The Board is not subject to income taxes.

2. Change in accounting policy

Until 2015-2016, the sponsored production and pre-sale revenues were accounted for based on the first dollar spent on the sponsored project. The new accounting policy is to recognize the revenue at the time of invoicing which is generally related to either the shipping of a product or the advancement of the work under the terms of the contract. The advantage of this approach will be to reconcile the revenues and the obligation of the Board.

For 2016-2017, the net cost of operations is $771 higher. Sponsored production and pre-sale revenues and the account receivables for non-invoiced revenues are lower of $771.

The new accounting method has no impact for the year of 2015-2016.

3. 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.

Unless otherwise specified, the figures presented in the financial statements are stated in thousands of Canadian dollars.

Significant accounting policies are as follows:

(a) Parliamentary authorities

Operations are funded through a permanent authority from Parliament (Revolving Fund) and Parliamentary authorities voted annually.

The Revolving Fund allows the Board to make payments out of the Consolidated Revenue Fund for working capital, interim financing of operating costs and capital assets acquisitions. This authority requires that the aggregate of admissible working capital and net book value of capital assets does not exceed $15 million.

The Board is also financed in part by the Government of Canada through Parliamentary authorities voted annually. Financial reporting of authorities provided to the Board 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 4 provides reconciliation between the two bases of reporting. The planned results amounts presented 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 2016–2017 Report on Plans and Priorities. The planned results amounts 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 were prepared for internal management purposes and have not been previously published.

Every year, the Board presents information on planned expenditures to Parliament through the tabling of Estimates publications. These estimates result in the introduction of supply bills (which once passed into legislation, become appropriation acts) in accordance with the reporting cycle for government expenditures. The Board exercises expenditure initiation processes such that unencumbered balances of budget allotments and appropriations are monitored and reported on a regular basis to help ensure sufficient authority remains for the entire period and appropriations are not exceeded.

Liquidity risk is the risk that the Department will encounter difficulty in meeting its obligations associated with financial liabilities. The Board's objective for managing liquidity risk is to manage operations and cash expenditures within the appropriation authorized by Parliament or allotment limits approved by the Treasury Board.

Consistent with section 32 of the Financial Administration Act, the Board's policy to manage liquidity risk is that no contract or other arrangement providing for a payment shall be entered into with respect to any program for which there is an appropriation by Parliament or an item included in estimates then before the House of Commons to which the payment will be charged, unless there is a sufficient unencumbered balance available out of the appropriation or item to discharge any debt that, under the contract or other arrangement, will be incurred during the fiscal year in which the contract or other arrangement is entered into.

The Board's risk of exposure and its objectives, policies and processes to manage and measure this risk did not change significantly from the prior year.

(b) Net cash provided by Government of Canada

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

(c) Due from or to the Consolidated Revenue Fund

Amounts due from or to the Consolidated Revenue Fund (CRF) are the result of timing differences between when a transaction affects the Board's authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Board is entitled to draw from the CRF without further authorities to discharge its liabilities. This amount is not considered to be a financial instrument.

(d) Expense recognition

Expenses are recorded on an accrual basis. Expenses related to audiovisual productions include the costs of activities for the development and production of audiovisual works of all kinds. Expenses related to accessibility and audience engagement include activities necessary to make the Board's productions accessible, including the preservation and conservation of the collection as well as the promotion and distribution of the works. Internal services are expenses incurred to meet the Board's programming and other general obligations.

Vacation pay is expensed, as the benefits are earned by employees under their respective terms of employment.

(e) Revenues

Sponsored production and pre-sales and revenues from the audiovisual products other than royalty revenues are recognized when amounts are due.

Royalty revenues are recognized once all of the Board's obligations have been fulfilled and its expenses have been accounted for, regardless of when the acquirer actually uses the work.

Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

(f) Accounts receivable

Accounts receivable are stated at amounts expected to be ultimately realized. A provision is recorded for external parties' accounts receivable where recovery is considered uncertain.

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Board is not exposed to significant credit risk. The Board provides services to other government departments and agencies and to external parties in the normal course of business. Accounts receivable are due on demand. The Board's maximum exposure to credit risk is equal to the carrying value of its accounts receivable.

(g) Inventory

Materials and supplies are valued at cost.

Film prints and other forms of visual presentation held for sale are valued at the lower of cost or net realizable value.

(h) Tangible capital assets

All tangible capital assets having an initial cost of $5,000 or more and leasehold improvements of $10,000 or more are recorded at their acquisition cost.

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

Asset class Amortization period
Technical equipment from 4 to 10 years
Software and data processing equipment from 5 to 10 years
Office furniture, equipment and other from 5 to 10 years
Leasehold improvements terms of the leases

Amounts related to projects in progress are transferred to the appropriate tangible capital assets category when the project is complete and amortized according to the Board's policy.

The Board has a collection of nearly twenty thousand audiovisual works produced since 1895. This inestimable collection is not intended for sale and does not have a measurable value. It has, however, been assigned a nominal value of $1 in the financial statements, appearing on the Statement of financial position and in note 9 as tangible capital assets to ensure that the reader is aware of its existence. The Board does not capitalize other intangibles that have cultural, aesthetic or historical value.

The Board enters into operating lease agreements to acquire the exclusive use of certain tangible capital assets over the term of the lease. These rental fees are charged to operations in the year to which they apply. The Board also enters into capital lease agreements by which substantially all the benefits and risks inherent to ownership of the assets are transferred to the Board. The Board then records an asset and an obligation corresponding to the present value of the minimum lease payments, excluding the portion thereof relating to executory costs. The assets recorded from a capital lease agreement are amortized on the same basis as other assets owned by the Board and the obligations are amortized over the lease term.

(i) Other financial assets and financial liabilities

Financial instruments of the Board are stated at cost or amortized cost. Financial assets consist of assets that could be used to reimburse existing liabilities or finance future operations.

The Board has the following financial assets:

Financial liabilities consist of accounts payable and accrued liabilities, and accrued salaries.

(j) Employee Future Benefits

Pension benefits

Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Board's contributions to the Plan are charged to expenses in the year incurred and represent the Board's total obligation to the Plan. The Board'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.

Severance benefits

Employees are entitled to severance benefits as provided under collective agreements or conditions of employment. In 2012, the program for all employees was eliminated and, consequently, the severance benefits ceased to accumulate. The cost of severance was recorded in the periods in which the benefits were earned by employees. The obligation under severance benefits is calculated at present value using the most probable management assumptions regarding wage, the discount rate and the timing of retirement. These assumptions are reviewed annually.

Compensated absences

Employees are entitled to sick leave and worker's compensation benefits as provided in their collective agreements or conditions of employment. Sick leave days accumulate but do not vest, enabling employees to be paid during their absence due to illness in recognition of prior services rendered. As the employees render services, the value of the compensated sick leave attributed to those services is recorded as a liability and expense. The Board records the cost of worker's compensation benefits to be paid when the event giving rise to the obligation occurs. Management uses assumptions and its best estimates, such as the discount rate, age of retirement, utilization rate of days in excess of the leave granted annually, probability of departure and salary review rate to calculate the present value of the compensated absences obligation. These assumptions are reviewed annually.

(k) 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.

(l) 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. 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 allowance for doubtful accounts, contingent liabilities, the liability related to 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.

4. Parliamentary authorities

The Board 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, the Board 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)

      2017 2016
    Net cost of operations before government funding and transfers 62,162 60,060
    Adjustments for items affecting net cost of operations but not affecting authorities
    Add (less)
    Loss on disposal of tangible capital assets (negative 161)
    Change in vacation pay and provision for salary adjustments not charged to authorities (negative 1,011) (negative 281)
    Change in accrued liabilities not charged to authorities (negative 78) 498
    Net change in employee future benefits (negative 61) 229
    Amortization of tangible capital assets (negative 2,346) (negative 2,722)
    Subtotal (negative 3,496) (negative 2,437)
    Adjustments for items not affecting net cost of operations but affecting authorities
    Add (less)
    Acquisition of tangible capital assets 4,322 2,171
    Lease payments for tangible capital assets 167 38
    Subtotal 4,489 2,209
    Current year authorities used 63,155 59,832
  2. Authorities provided and used:

    (in thousands of dollars)

      2017 2016
    Authorities provided
    Main Estimates 61,895 59,652
    Supplementary Estimates authorities 4,612 2,964
    Less:
    Authorities available for future years (negative 3,309) (negative 2,733)
    Frozen allotment (negative 43) (negative 51)
    Current year authorities used 63,155 59,832

5. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities are measured at cost and are due, mainly, within six months following the closing date.

The following table presents details of the Board's accounts payable and accrued liabilities:

(in thousands of dollars)

  2017 2016
Accounts payable - Other government departments and agencies 755 1,210
Accounts payable - External parties 2,792 3,324
Total accounts payable 3,547 4,534
Accrued liabilities 142 128
Total accounts payable and accrued liabilities 3,689 4,662

As at March 31, 2017, the accrued liability corresponds to the balance of the obligation for severance benefits.

6. Lease obligation for tangible capital assets

The Board has an agreement to lease technical equipment under two capital leases. The assets were capitalized using an implicit interest rate of 4% for the 2015-2016 contract and 3% for the new 2016-2017 contract. The corresponding bonds will be repaid during the term of the 3-year lease for both contracts. Payments for the year ended March 31, 2017 totalled $172 (2016 — $41). Interest of $5 (2016 — $3) is charged to operations.

(in thousands of dollars)

  2017 2016
2017 71
2018 143 71
2019 72 29
Total future minimum lease payments 215 171
Less: imputed interest (negative 6) (negative 5)
Balance of lease obligation for tangible capital assets 209 166

7. Employee future benefits

Pension benefits

The Board's eligible 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 2% per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plans benefits and are indexed to inflation.

Both the employees and the Board 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.

In 2017, the expense amount for Group 1 and Group 2 members of $3,263 (2016 — $3,220). For the member of the group 1, the charges represent approximately 1.12 times the employee contributions and for the group 2, the charges represent approximately 1.08 times the employee contributions. In 2016, the combined two groups represents approximately 1.3 times the employee contributions.

The Board'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.

Severance benefits and compensated absences

Severance benefits

The Board provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities.

As part of collective agreement negotiations and conditions of employment, the accumulation of severance benefits under the employees' severance pay program ceased commencing in 2012. Employees subject to these changes had, until December 31, 2013, the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. As at March 31, 2017, to calculate the obligation of the remaining portion, the Board uses a rate of compensation increase of 0.96% (2016 — 0.96%), an estimated discount rate of 1.94% (2016 — 1.61%) and a horizon of retirement estimated at 60 years old.

Compensated absences

The Board provides its employees with sick leave benefits based on their salary and the entitlements accumulated over their years of service. These entitlements are accumulated but do not vest. The Board has also recognized a worker's compensation obligation.

To calculate the obligation for sick leaves, the Board uses an average daily wage of $280 (2016 — $289), a rate of salary increase of 0.96% (2016 — 0.96%), an average annual utilization rate of 2.6% (2016 — 2.6%), a discount rate of 1.94% (2016 — 1.61%), a 5.18% (2016 — 5.16%) probability of employee departure and a retirement age assumption of 60 or 65 years old, depending on the beginning of employment.

To calculate the workers' compensation obligation, the Board uses the provisions of the applicable workers' compensation plan and a discount rate of 1.94%.

Information about the severance and compensated absence benefits, measured as at March 31, 2017, is as follows:

(in thousands of dollars)

  Severance benefits Compensated Absences Total
Balance as at March 31, 2015 944 1,936 2,880
Expenses for the year 84 (negative 111) (negative 27)
Benefits paid during the year (negative 175) (negative 27) (negative 202)
Balance as at March 31, 2016 853 1,798 2,651
Expenses for the year 269 (negative 104) 165
Benefits paid during the year (negative 77) (negative 27) (negative 104)
Balance as at March 31, 2017 1,045 1,667 2,712

8. Accounts receivable

The following table presents details of the Board's accounts receivable:

(in thousands of dollars)

  2017 2016
Receivables - Other government departments and agencies 302 363
Receivables - External parties 1,730 1,698
Subtotal 2,032 2,061
Allowance for doubtful accounts on receivables from external parties (negative 323) (negative 331)
Total accounts receivable 1,709 1,730

9. Tangible capital assets

(in thousands of dollars)

  March 31, 2016 Additions Disposals and write-offs Transfers March 31, 2017
Technical equipment
Cost 18,633 328 18,961
Accumulated amortization (negative 17,192) (negative 512) (negative 17,704)
Subtotal 1,441 (negative 184) 1,257
Software and data processing equipment
Cost 13,953 1,153 404 15,510
Accumulated amortization (negative 10,271) (negative 1,510) (negative 11,781)
Subtotal 3,682 (negative 357) 404 3,729
Office furniture, equipment and other
Cost 537 42 (negative 35) 544
Accumulated amortization (negative 529) (negative 5) 35 (negative 499)
Subtotal 8 37 45
Leasehold improvements
Cost 4,631 1,947 (negative 841) 238 5,975
Accumulated amortization (negative 3,573) (negative 319) 841 (negative 3,051)
Subtotal 1,058 1,628 238 2,924
CollectionLink to footnote 2
Work in progress 1,242 1,062 (negative 642) 1,662
Total
Cost 38,996 4,532 (negative 876) 42,652
Accumulated amortization (negative 31,565) (negative 2,346) 876 (negative 33,035)
Net book value 7,431 2,186 9,617

The above assets include equipment under capital leases for a total cost of $414 (2016 — $204) less accumulated amortization of $103 (2016 — $29). Current year amortization expense relating to property under capital leases amounts to $74 (2016 — $29).

Disposals and write-offs of $876 (2016 — $6,625) for the year are related to the abandonment of obsolete material and write-off of leasehold improvements.

10. Contractual obligations

The nature of the Board's activities can result in multi-year contracts and obligations whereby the Board will be obligated to make future payments for the acquisition of goods or services. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in thousands of dollars)

  2018 2019 2020 2021 2022& Total
Premises 4,498 1,170 1,049 763 7,275 14,755
Other goods and services 855 726 34 12 3 1,630
Total 5,353 1,896 1,083 775 7,278 16,385

The agreements for leased premises in the amount of $14,755 were signed with Public Services and Procurement Canada (PSPC).

11. Contingent liabilities

Various legal proceedings arising from the normal course of business are pending against the Board. Management believes that should Board be found liable pursuant to one or more of these proceedings, the aggregate liabilities resulting from such proceedings would not be material.

12. Expenses by major object and types of revenues

The following table presents the expenses committed and revenues generated by main expenditures objects and type of revenues.

a) Expenses

(in thousands of dollars)

  2017 2016
Salaries and benefits 38,591 35,653
Professional and special services 11,601 10,122
Rentals 5,961 6,265
Transportation and communication 2,983 3,120
Amortization of tangible capital assets 2,346 2,722
Materials and supplies 1,719 1,732
Repairs and upkeep 1,253 1,081
Cash financing in co-productions 970 1,020
Royalties 724 675
Information 446 491
Contracted film production and laboratory processing 289 395
Miscellaneous 36 10
Gain on disposal of tangible capital assets 161
Total 66,919 63,447

b) Revenues

(in thousands of dollars)

  2017 2016
Royalties and subscriptions 2,010 1,874
Stock shots 452 489
Film prints and downloads 335 473
Sponsored production and pre-sale 1,921 349
Miscellaneous 39 202
Total 4,757 3,387

13. Related party transactions

The Board is related, as a result of common ownership, to all government departments, agencies and Crown corporations. The Board enters into transactions with these entities in the normal course of business and on normal trade terms. During the year ending March 31, 2017, the Board leased premises from Public Services and Procurement Canada (PSPC) for the amount of $4,871 (2016 — $5,006).

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 PSPC and audit services provided by the Office of the Auditor General, are not included in the Board's Statement of Operations and Departmental Net Financial Position.

(in thousands of dollars)

  2017 2016
Accounts receivable - Other government departments and agencies 173 363
Accounts payable - Other government departments and agencies 755 1,210
Expenses - Other government departments and agencies 15,380 13,509
Revenues - Other government departments and agencies 322 377

14. The Documentary Channel

Since 2002, the Board owns a permanent share of 14% (14 x $1 units) of the specialized television channel The Documentary Channel. Pursuant to the investment agreement, the Board's obligations with respect to debts, liabilities, and other obligations are limited to the capital invested.

Revenues from portfolio investments are recognized only to the extent that they are received or eligible and they are presented under miscellaneous revenues in the income statement in the amount of $0 ($113 in 2016).

15. Comparative information

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

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