Federal Economic Development Agency for Southern Ontario Financial Statements (Unaudited) — As at March 31, 2018

Federal Economic Development Agency for Southern Ontario

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, 2018, and all information contained in these statements rests with the management of the Federal Economic Development Agency for Southern Ontario. 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 judgement, 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 Federal Economic Development Agency for Southern Ontario's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Federal Economic Development Agency for Southern Ontario's Departmental Results Report, is consistent with these 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 and due diligence; through communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the Federal Economic Development Agency for Southern Ontario; 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 Federal Economic Development Agency for Southern Ontario 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 2015–16 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 Core Control Audit of the Federal Economic Development Agency for Southern Ontario.

The financial statements of the Federal Economic Development Agency for Southern Ontario have not been audited.

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James Meddings, Deputy Head
Signed at Waterloo, Canada

August 31, 2018
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Vimal Gopal, CPA, CMA A/Chief Financial Officer



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Federal Economic Development Agency for Southern Ontario
Statement of Financial Position (Unaudited)
As at March 31, 2018 (in thousands of dollars)
2018 2017
Liabilities
Accounts payable and accrued liabilities (Note 4) 57,622 27,582
Vacation pay and compensatory leave 1,025 1,231
Employee future benefits (Note 5) 877 798
Other liabilities (Note 6) 50 39
Total liabilities 59,574 29,650
Financial assets
Due from Consolidated Revenue Fund 57,625 27,114
Accounts receivable and advances (Note 7) 4,847 2,736
Loans receivable (Note 8) 260,074 189,080
Total financial assets 322,546 218,930
Financial assets held on behalf of Government
Accounts receivable and advances (Note 7) (4,733) (2,638)
Loans receivable (Note 8) (260,074) (189,080)
Total financial assets held on behalf of Government (264,807) (191,718)
Total net financial assets 57,739 27,212
Departmental net debt 1,836 2,438
Non-financial assets
Prepaid expenses 11 0
Tangible capital assets (Note 11) 25 53
Total non-financial assets 36 53
Departmental net financial position (1,800) (2,385)

Contractual obligations (Note 9)
Contingent liabilities (Note 10)

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

Federal Economic Development Agency for Southern Ontario
Statement of Operations and Departmental Net Financial Position (Unaudited)
For the year ended March 31, 2018 (in thousands of dollars)
2018 Planned Results 2018 2017
Expenses
Technological Innovation 49,473 49,104 53,357
Business Development 20,731 28,334 39,419
Community Economic Development 104,946 102,586 63,222
Internal Services 20,072 18,249 18,339
Expenses incurred on behalf of Government 11,000 (8,011) (13,451)
Total expenses 206,222 190,263 160,886
Revenues
Amortization of discounts 1,167 0 368
Other revenue 0 189 72
Revenues earned on behalf of Government (1,167) (189) (440)
Total revenues 0 0 0
Net cost of operations before funding and transfers 206,222 190,263 160,886
Government funding and transfers
Net cash provided by Government - 156,983 162,955
Change in Due from Consolidated Revenue Fund - 30,511 (7,164)
Services provided without charge by other government departments (Note 12) - 3,355 3,897
Transfer of the transition payments for implementing salary payments in arrears - 0 0
Transfer of assets from (to) other government departments - 0 0
Net cost of operations after government funding and transfers - (584) 1,198
Departmental net financial position – Beginning of year - (2,385) (1,187)
Departmental net financial position – End of year - (1,800) (2,385)

Segmented information (Note 13)

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

Federal Economic Development Agency for Southern Ontario
Statement of Change in Departmental Net Debt (Unaudited)
For the year ended March 31, 2018 (in thousands of dollars)
2018 2017
Net cost of operations after government funding (584) 1,198
Change due to tangible capital assets
Amortization of tangible capital assets (Note 11) (28) (38)
Total change due to tangible capital assets (28) (38)
Change due to prepaid expenses (11) (10)
Departmental increase (decrease) in net debt (602) 1,150
Departmental net debt – Beginning of year 2,438 1,288
Departmental net debt – End of year 1,836 2,438

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

Federal Economic Development Agency for Southern Ontario
Statement of Cash Flows (Unaudited)
For the year ended March 31, 2018 (in thousands of dollars)
2018 2017
Operating activities
Net cost of operations before government funding and transfers 190,263 160,886
Non cash items:
Amortization of tangible capital assets (Note 11) (28) (38)
Services provided without charge by other government departments (Note 12) (3,355) (3,897)
Transition payments for implementing salary payments in arrears 0 0
Variations in Statement of Financial Position
Increase (decrease) in accounts receivable and advances 16 93
Increase (decrease) in prepaid expenses 11 (10)
Decrease (increase) in accounts payable and accrued liabilities (30,039) 6,791
Decrease (increase) in vacation pay and compensatory leave 206 (317)
Decrease (increase) in future employee benefits (79) (514)
Decrease (increase) in other liabilities (11) (39)
Cash used in operating activities 156,983 162,955
Capital investing activities
Acquisitions of tangible capital assets (Note 11) 0 0
Proceeds from sale of tangible capital assets 0 0
Cash used in capital investing activities 0 0
Net cash provided by the Government of Canada 156,983 162,955

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

Federal Economic Development Agency for Southern Ontario
Notes to the Financial Statements (Unaudited)
As at March 31, 2018

1.  Authority and objectives

The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) was established in 2009 as a separate organization under Schedule I.1 of the Financial Administration Act to support economic growth in southern Ontario through the delivery of federal programs and services.

As announced in Budget 2018, FedDev Ontario's mandate was renewed for a third term, from 2018–19 to 2023–24. The Agency has been allocated $920 million in core funding for this six-year period to support economic growth in southern Ontario through the delivery of federal programs and services. With renewed funding, FedDev Ontario will continue to deliver programs and services to support innovation and economic growth, leading to the jobs of the future and maintaining Canada's competitive edge in the fast-paced and increasingly global economy.

FedDev Ontario's mandate is to support economic growth and competitiveness in southern Ontario. As one of the federal departments and agencies that make up the ISED portfolio, FedDev Ontario supports a number of the Government of Canada's commitments, including helping Canadian businesses grow, innovate and export in order to create good-quality jobs and wealth for Canadians; and working with stakeholders to improve the impact of programs to support innovation and entrepreneurship.

To achieve its mandate, FedDev Ontario delivers three core transfer payment programs designed to address specific opportunities and challenges facing the region: the Southern Ontario Prosperity Initiatives; the Advanced Manufacturing Fund; and the Eastern Ontario Development Program. FedDev Ontario, like other regional development agencies across the country, also plays an important role as a federal delivery agent for national programs, specifically the Community Futures Program, the Economic Development Initiative and the Canada 150 Community Infrastructure Program. The Agency also delivers special projects such as the $2 million grant for the Mohawk Lake Rehabilitation Project.

FedDev Ontario also delivers services at the regional level to firms and other stakeholders on national initiatives. In this regard, the Agency works with southern Ontario firms to identify opportunities to participate in defence procurement projects in support of the Industrial and Technological Benefits Policy. In addition, the Agency operates Canada Business Ontario (part of the Canada Business Network), which helps entrepreneurs gain access to government business information, such as available funding opportunities. The Agency also operates the Accelerated Growth Service (AGS), an initiative through which established high-growth firms are offered information and potential access to relevant federal and/or external programs and services intended to help with specific growth objectives.

With its headquarters in Waterloo and offices in Toronto, Peterborough and Ottawa, FedDev Ontario provides a strong federal presence across southern Ontario and facilitates collaboration with a broad range of stakeholders, including post-secondary institutions, not-for-profit organizations, municipal and provincial governments, Indigenous communities and private sector firms. The Agency plays an important role in convening key regional stakeholders to enable more seamless support to businesses and other organizations within the region, with a particular emphasis on working closely with the Government of Ontario and key federal departments and agencies to ensure complementary approaches in supporting the southern Ontario economy. In addition, through ongoing partnerships with other federal departments and agencies, FedDev Ontario ensures that the perspectives of southern Ontario are reflected in decision-making at the federal level.

Technological Innovation

FedDev Ontario facilitates business-led partnerships with post-secondary institutions and research institutions to support the creation of new products, services, processes and markets. The Agency also promotes the continued growth and increased productivity of Ontario's manufacturing sector by supporting transformative advanced manufacturing activities; advancing adoption of cutting-edge technologies; establishing clusters or global supply chains; and fostering collaboration between the private sector and post-secondary and research institutions.

Business Development

FedDev Ontario supports a broad spectrum of firms at various stages of growth. Agency investments help early-stage companies and entrepreneurs access capital and develop the necessary skills to grow their businesses and commercialize their innovations; help more established businesses improve productivity; support scale up of businesses to effectively compete in global markets; and support business integration into global value chains.

Community Economic Development

FedDev Ontario leverages regional assets to support economic diversification and growth in communities across southern Ontario. The Agency supports community-based organizations that provide southern Ontario firms with the information, training and financial assistance loans they need to sustain and grow their businesses. It also delivers national infrastructure programs that benefit communities across southern Ontario.

Internal Services

FedDev Ontario's internal services deliver high-quality and timely advice and services across the organization. The internal services function plays a pivotal role in support of the Agency's program delivery activities, its ability to meet administrative and corporate requirements and accountabilities, and ensuring its alignment with Government of Canada priorities. FedDev Ontario's internal services include policy and research activities that enable the Agency to effectively communicate the region's interests in national and regional policy discussions, champion the region's assets and convene stakeholders to respond to regional challenges and opportunities.

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 the Canadians public sector account standards.
Significant accounting policies are as follows:

  1. Parliamentary authorities—The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to FedDev Ontario 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 2017–18 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 2017–18 Departmental Plan.
  2. Net Cash Provided by Government—FedDev Ontario operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by FedDev Ontario is deposited to the CRF, and all cash disbursements made by FedDev Ontario 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 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 FedDev Ontario is entitled to draw from the CRF without further appropriations to discharge its liabilities.
  4. Revenues:
    Revenues that are non-respendable are not available to discharge FedDev Ontario's liabilities. While the Deputy Head is expected to maintain accounting control, he or she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross revenues.
    Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
    Effective 2017–18, in accordance with Government of Canada accounting policies, FedDev Ontario records unconditionally repayable loans at face value since loans have been determined to not have significant concessionary terms. As a result, FedDev Ontario no longer records revenues on the unconditionally repayable loan.
  5. Expenses—Expenses are recorded on the accrual basis:
    Transfer payments are recorded as expenses 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. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.
    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.
  6. Employee future benefits:
    1. Pension benefits: Eligible employees participate in the Public Service Pension Plan (Public Service Superannuation Act), a multi-employer plan administered by the Government. FedDev Ontario's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. FedDev Ontario'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 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. 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 if an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.
  9. Tangible capital assets—All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. FedDev Ontario does not capitalize intangibles, works of art, and historical treasures that have cultural, aesthetic, or historical value, assets located on Indian Reserves and museum collections.
    Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
    Amortization of tangible capital assets
    Asset class Amortization period
    Computer hardware 10 years
    Machinery and equipment 10 years
    Vehicles 3 to 7 years
  10. 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 allowances for doubtful accounts, 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.

3. Parliamentary authorities

FedDev Ontario 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, FedDev Ontario 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:

a) Reconciliation of net cost of operations to current year authorities used (in thousands of dollars)
2018 2017
(In thousands of dollars)
Net cost of operations before government funding and transfers 190,264 160,886
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (28) (38)
Services provided without charge by other government departments (3,355) (3,897)
Decrease (increase) in vacation pay and compensatory leave 206 (317)
Decrease (increase) in employee future benefits (79) (514)
Unamortized discount & adjustments to transfer payments 0 (7,333)
Refunds of prior years' expenditures 17 41
Refunds of previous years' accounts payable 292 152
Total items affecting net cost of operations but not affecting authorities (2,947) (11,906)
Adjustments for items not affecting net cost of operations but affecting authorities:
Increase (decrease) in prepaid expenses 11 (10)
Increase (decrease) in advances 16 93
Loans issued on behalf of Government 62,817 72,664
Transition payments for implementing salary payments in arrears 0 0
Increase in other receivables 91 409
Total items not affecting net cost of operations but affecting authorities 62,935 73,156
Current year authorities used 250,251 222,136
b) Authorities provided and used (in thousands of dollars)
2018 2017
(In thousands of dollars)
Authorities provided:
Vote 1 – Operating 27,611 26,870
Vote 5 – Contributions 242,199 227,680
Statutory amounts 3,055 2,838
Less:
Lapsed: Operating (520) (1,418)
Lapsed: Contribution (22,093) (33,834)
Lapsed: Proceeds from the disposal of crown assets (1) 0
Current year authorities used 250,251 222,136

4.  Accounts payable and accrued liabilities

The following table presents details of FedDev Ontario's accounts payable and accrued liabilities:

FedDev Ontario's accounts payable and accrued liabilities
2018 2017
(In thousands of dollars)
Accounts payable – Other government departments and agencies 425 454
Accounts payable – External parties 55,296 25,387
Total accounts payable 55,721 25,841
Accrued liabilities 1,901 1,741
Total accounts payable and accrued liabilities 57,622 27,582

5.  Employee future benefits

a)  Pension benefits

FedDev Ontario'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 Plans benefits and they are indexed to inflation.

Both the employees and FedDev Ontario contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Canada's 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 2017–18 expense amounts to $2,745,645 ($2,530,737 in 2016–17).  For Group 1 members, the expense represents approximately 1.01 times (1.12 times in 2016–17) the employee contributions and, for Group 2 members, approximately 1.00 times (1.08 times in 2016–17) the employee contributions.

FedDev Ontario'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

Severance benefits provided to FedDev Ontario'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, 2018, 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:

Changes in the obligations during the year
2018 2017
(In thousands of dollars)
Accrued benefit obligation - Beginning of year 798 284
Expense for the year 238 521
Benefits paid during the year (159) (7)
Accrued benefit obligation - End of year 877 798

6.  Other Liabilities

Other liabilities represent amounts received from third parties to be disbursed for a specified purpose. Activity during the year in these accounts is as follows:

Amounts received from third parties
Opening Balance Receipts Payments Closing Balance
(In thousands of dollars)
Canada / Provinces Service Agreement 39 332 321 11

7.  Accounts receivable and advances

The following table presents details of FedDev Ontario's accounts receivable and advances balances:

FedDev Ontario's accounts receivable and advances balances
2018 2017
(In thousands of dollars)
Receivables – Other government departments and agencies 48 474
Receivables – External parties 4,685 2,164
Employee advances 114 98
Gross accounts receivable and advances 4,847 2,736
Accounts receivable held on behalf of government (4,733) (2,638)
Net accounts receivable and advances 114 98

8.  Loans receivable

The following table presents details of FedDev Ontario's loans and transfer payments recoverable balances:

FedDev Ontario's loans and transfer payments recoverable balances
2018 2017
(In thousands of dollars)
Loans receivable 298,528 266,832
Less: Unamortized discount 0 (16,542)
Subtotal 298,528 250,290
Less: Allowance for uncollectibility (38,454) (61,210)
Gross loans receivable 260,074 189,080
Loans held on behalf of Government (260,074) (189,080)
Net loans receivable 0 0

a)  Loans receivable from unconditionally repayable contributions

The loans receivable portfolio consists of 205 non-interest bearing loans issued in the years from 2009 to 2018 with prescribed annual repayment terms.  The loans are recorded at face value since loans have been determined to not have significant concessionary terms. An allowance of $38,454,429 ($61,209,790 in 2016–17) has been recorded.

Unconditionally repayable contributions relate to contributions made to outside parties that must be repaid without qualification.

9.  Contractual obligations

The nature of FedDev Ontario's activities can result in some large multi-year contracts and obligations whereby FedDev Ontario 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:

Significant contractual obligations that can be reasonably estimated
2019 2020 2021 2022 Total
(In thousands of dollars)
Transfer payments 128,108 500 713 0 129,320
Total 128,108 500 713 0 129,320

The contractual obligations for transfer payments for 2019 and beyond are related to new projects under the Southern Ontario Prosperity Initiatives, as well as, ongoing commitments under the Advanced Manufacturing Program, Community Futures Program, Eastern Ontario Development Program and the Economic Development Initiative.

10.  Contingent liabilities

In the normal course of its operations, FedDev Ontario becomes involved in various legal actions. Some of these potential liabilities 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 has been identified. As at March 31, 2018, FedDev Ontario has no contingent liabilities based on the legal assessment carried out by Department of Justice of potential liability.

11. Tangible capital assets

Tangible capital assets
Cost (in thousands of dollars) Accumulated Amortization (in thousands of dollars) Net Book Value (in thousands of dollars)
Capital Asset Class Opening Balance Acquisitions, Transfers and Adjustments Disposals and Write-Offs Closing Balance Opening Balance Amortization Acquisitions, Transfers and Adjustments Disposals and Write-Offs Closing Balance 2018 2017
Computer hardware 10 0 0 10 6 1 0 0 7 3 4
Machinery and equipment 25 0 0 25 15 2 0 0 17 8 10
Vehicles 319 0 0 319 280 25 0 0 305 14 39
Total 354 0 0 354 301 28 0 0 329 25 53

12.  Related party transactions

FedDev Ontario is related as a result of common ownership to all government departments, agencies and Crown corporations. FedDev Ontario enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, FedDev Ontario has an agreement with the Department of Innovation, Science and Economic Development related to the provision of information technology, finance and administration services. During the year, FedDev Ontario received common services that were obtained without charge from other government departments as disclosed below.

(a)  Common services provided without charge by other government departments

During the year, FedDev Ontario received services without charge from certain common service organizations, related to accommodation services and the employer's contribution to the health and dental insurance plans.  These services provided without charge have been recorded in FedDev Ontario's Statement of Operations and Departmental Net Financial Position as follows:

Services received without charge
2018 2017
(In thousands of dollars)
Employer's contributions to the health and dental insurance plan 1,750 1,673
Accommodation 1,605 2,224
Total 3,355 3,897

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 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 FedDev Ontario's Statement of Operations and Departmental Net Financial Position.

(b) Administration of programs on behalf of other government departments

Under a Memorandum of Understanding signed with Infrastructure Canada on August 9, 2009, FedDev Ontario administered four programs. Three of the four programs (Canada Strategic Infrastructure Fund, Canada-Ontario Municipal Rural Infrastructure Fund, and the Municipal Rural Infrastructure Fund) were completed in 2015–16. The fourth program, Building Canada Fund – Communities Component was completed in 2016–17. During 2017–18 FedDev Ontario did not incur any expenses on behalf of Infrastructure Canada as all four projects were completed. These expenses are reflected in the financial statements of Infrastructure Canada and are not recorded in these financial statements.

Programs administered on behalf of other government departments
2018 2017
(In thousands of dollars)
Building Canada Fund-Infrastructure Canada 0 12,787
Total 0 12,787

(c)  Other transactions with related parties

Other transactions with related parties
2018 2017
(In thousands of dollars)
Expenses—Other government departments and agencies 6,224 7,692

Expenses and revenues disclosed in (c) exclude common services provided without charge, which are already disclosed in (a).

13. Segmented information (in thousands of dollars)

Presentation by segment is based on FedDev Ontario's Program Alignment Architecture (PAA). 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 and revenues generated for the main programs, by major object of expense and by major type of revenue. The segment results for the period are as follows:

Segmented information (in thousands of dollars)
Expenses Technological Innovation Business Development Community Economic Development Internal Services 2018 Total 2017 Total
(In thousands of dollars)
Transfer payments
Transfers to non-profit organizations 42,745 16,028 56,928 0 115,701 99,919
Transfers to Industry 0 0 0 0 0 7,373
Transfer to other levels of government 0 0 41,390 0 41,390 21,204
Total transfer payments 42,745 16,028 98,318 0 157,091 128,496
Operating expenses
Salaries and employee benefits 2,563 6,412 3,976 13,258 26,209 24,133
Professional and special services 715 63 29 3,083 3,890 4,340
Accommodation 140 422 238 805 1,605 2,224
Travel 165 50 67 479 761 511
Amortization 0 0 0 28 28 38
Communication (and postage) 51 0 0 231 282 361
Furniture and equipment 2 0 0 184 186 549
Equipment repair and maintenance 10 0 0 25 35 29
Rental 3 0 0 98 102 133
Utilities, materials and supplies 8 3 6 60 76 72
Bad debt expense 2,702 5,356 (47) 0 8,011 13,451
Other operating expenses 0 0 0 (2) (2) 0
Expenses incurred on behalf of Government (2,702) (5,356) 47 0 (8,011) (13,451)
Total operating expenses 3,657 6,950 4,316 18,249 33,172 32,390
Total expenses 46,401 22,978 102,634 18,249 190,263 160,886
Revenues
Amortization of discounts 0 0 0 0 0 368
Other revenue 0 0 0 189 189 72
Revenues earned on behalf of Government 0 0 0 (189) (189) (440)
Total revenues 0 0 0 0 0 0
Net cost from continuing operations 46,401 22,978 102,634 18,249 190,263 160,886
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