2011 St. Lawrence Seaway Managment Corp. financial report
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Transcript of 2011 St. Lawrence Seaway Managment Corp. financial report
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The eview o the Copoations fnancialposition and opeating esults, ate itsthiteenth yea o opeation, should be eadin conjunction with the audited fnancial
statements on the ollowing pages. Theesults o 2010/11 cove the peiod omApil 1, 2010 to Mach 31, 2011, while thecompaative numbes ae o the peiodom Apil 1, 2009 to Mach 31, 2010, andthe look ahead coves the peiod omApil 1, 2011 to Mach 31, 2012.
ovErviEw
FInancIal perForMance
The Corporation is governed by a Management, Operationsand Maintenance Agreement signed with the ederalgovernment in 1998 or a twenty-year period, which was
renewed ater the initial ten-year term. 2010/11 was the thirdyear o the current ten-year term. The nancial success othe Corporation is measured by comparing the total cost
o operating against the business plan established or thescal period.
In 2010/11, the Corporations spending on manageable costs
and asset renewal projects amounted to $117.8 million,
which breaks down into $67.0 million o operating expendi-tures, $49.3 million o regular and major maintenance, and$1.5 million o capital expenditures. The business plan targetwas $122.7 million.
rESuLtS of oPErationS
revenueS
Toll revenue increased 20.9% in the scal year, rom$50.1 million in 2009/10 to $60.7 million in 2010/11, ater a24.3% decrease in 2009/10. The Corporation continued toprovide a 20% Cargo Toll discount or new business which
generated $2.9 million o new business in 2010/11. Othernavigation revenue increased 7.2%, while power generationrevenue increased 57.0%, due to the maximization o useo water at times when the spot rates were high. Investmentincome derived rom the working capital balances increasedby 161% with higher cash sums on hand and better interestrates due to a new investment product.
Capital asset acquisitions are unded by the Capital FundTrust; the net contribution is credited to a deerred balancesheet account, and amortized on the same basis as the
assets or which the contribution was made. The amortiza-tion o this deerred contribution relating to capital assets
amounted to $1.5 million in 2010/11, 6% higher than the
previous year.
Overall, the Corporations total revenue increased by 19.4%in 2010/11, to $66.0 million, compared to the previous years$55.2 million total.
managEmEntdiSCuSSion and
anaLySiS
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revIeW oF actual to aDjuSteD BuSIneSS plan coSt
(in millions o dollas)
n Actual
n Business Plan
2007/2008 2008/2009 2009/2010 2010/20112006/2007
101.
3
101.
2
100.
6
102.
8
116.
3
118.
0
112.
0
117.
8
coMparISon oF actual to aDjuSteD BuSIneSS plan
(in millions o dollas)
revenues Adjusted Manageable Costs
(opeating expenses)
Asset renewal
including capital
expenditues
64.
4
89.
7
67.
0
69.
9
50.
8
52.
8
revIeW oF revenueS
(in millions o dollas)
76.
7
87.
1
83.
6
87.
4
69.
4
81.
0
53.
8
88.
7
expenSeS
Operating expenses or 2010/11 relating to the manage-
ment and operation o the Seaway inrastructure amountedto $67.0 million. This represents an increase o 3.1% rom
the previous year, and is below the business plan target o$69.9 million by 4.1%.
The combined salaries, wages and benets totalled$61.2 million, or 91% o total operating costs. The compar-able gure or 2009/10 was $58.8 million or 90% o total
operating costs. Salaries and wages paid to employees
amounted to $44.6 million, an increase o 5.6% over last
years $42.2 million. Current and uture employee benetsand pension costs amounted to $16.6 million equivalent tolast years gure. An increase in active employee health
insurance oset by a decrease in accumulated employeeleave resulted in employee benets remaining stable.
The Corporation employed 575 ull-time equivalents (FTEs)in 2010/11, up 0.5% rom the previous years level o 572.
All other operating costs, ater allocation o salaries and
wages to asset renewal, amounted to $5.8 million or2010/11, compared to $6.2 million the previous scal year,with insurance premiums remaining the major expense at$1.8 million.
aSSet reneWal
Asset renewal expenditures, representing the cost o mainten-ance and major repairs o locks, canals, bridges, buildingsand other inrastructure assets excluding capital acquisi-
tions, totalled $49.3 million or the current year, compared to$45.2 million in 2009/10. The approved ve-year envelope
or this purpose, which also includes capital expenditures,is set at $270 million.
aMortIzatIon oF capItal aSSetS
The amortization expense o $1.6 million or the year endingMarch 31, 2011 was up slightly rom the previous years amount.
Reer to Note 2(e) or the accounting policy detail.
122.
7
117.
8
2007/2008 2008/2009 2009/2010 2010/20112006/2007
64.
4
89.
7
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lIquIDItY anD FunDIng caSh FloW
Rules regarding the liquidity and unding o the Corporationare clearly set out in the Management, Operations and
Maintenance Agreement and the Capital Trust Agreementwith Transport Canada. The Corporations cash surplusor shortall is paid to, or reimbursed by, the Capital Fund
Trust.
In 2010/11, the Corporation was in a negative cash fow position.
The Corporation was able to cover all o the controllable costs
or the year with revenues however, or the second year, thetotal revenue generated, less the amortization o deerred
contributions related to capital assets ($64.4 million), wasinsucient to pay or the Corporations operating expenseso $67.0 million. Added to the cash decit on operation o$2.6 million, were mandatory additional pension paymentso $17.1 million to pay down part o the pension solvency
decit and the asset renewal expenditures o $50.8 millionduring the year including capital acquisitions o $1.5 million.Reer to notes 3 and 9 o the ollowing nancial statementsor explanations on the amounts owed or paid rom theCapital Fund Trust or capital asset acquisitions and the
contribution towards the Corporations excess expenses
over revenues.
The Corporation normally maintains the minimum workingcapital and cash in the bank required to meet all o its nancialobligations to its employees and trade creditors. The cashlevel at March 31, 2011 was $5.9 million, compared to theprevious years $14.3 million. This cash balance is a returnto the normal cash required to pay those amounts payableearly in the new scal year.
Looking forward
The Corporation expects an improvement in trac and tollrevenues in 2011/12 as the North American and Europeaneconomies continue to emerge rom the global economiccrisis.
We also expect that operating expenses will be higher than2010/11 due to an increase in maintenance inrastructure which
we expect will also increase personnel-related costs.
Asset renewal expenditures, including capital asset purchases,
or 2011/12 are expected to increase by $7.2 million to reach
$58.0 million, as part o the $270 million o asset renewalprojects in the 5-year plan or the period April 1, 2008 to
March 31, 2013.
managEmEntdiSCuSSion andanaLySiS
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The accompanying nancial statements o the St. Lawrence Seaway Management Corporation
and all inormation in this Annual Report are the responsibility o management.
The nancial statements have been prepared by management in accordance with Canadiangenerally accepted accounting principles consistent with the accounting policies set out inthe notes to the nancial statements. Where necessary, management has made inormedjudgments and estimates in accounting transactions. Inormation contained elsewhere
in the Annual Report is consistent, where applicable, with that contained in the nancial
statements.
In ullling its responsibilities, management has developed and maintains systems o internalcontrol designed to provide reasonable assurance that the Corporations accounting records
are a viable basis or the preparation o the nancial statements. Policies and proceduresare designed to ensure that transactions are appropriately authorized and assets aresaeguarded rom loss or unauthorized use.
The Board o Directors carries out its responsibility or review o the annual nancial state-ments principally through the Audit Committee. The Board o Directors has appointed anAudit Committee consisting o three outside directors.
The Audit Committee meets during the year, with management, the internal and externalauditors, to review any signicant accounting, internal control and auditing matters to satisyitsel that management responsibilities are properly discharged and to review the nancialstatements beore they are presented to the Board o Directors or approval.
The external and internal auditors have ull and ree access to the members o the Audit
Committee with and without the presence o management.
The independent auditors Ernst & Young LLP, whose report ollows, have audited the
nancial statements.
Terence F. Bowles Karen Dumoulin
President & CEO Director o FinanceMay 19, 2011 May 19, 2011
managEmEntS rESPonSiBiLityfor finanCiaL rEPorting
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indEPEndEntauditorS rEPort
TO THE MEMBERS OF
the St. laWrence SeaWaY
ManageMent corporatIon
We have audited the accompanying nancial statements
o The St. Lawrence Seaway Management Corporation,which comprise the balance sheet as at March 31, 2011
and the statements o revenue and expenses, changes innet assets and cash fows or the year then ended, and
a summary o signicant accounting policies and other
explanatory inormation.
managEmEntS rESPonSiBiLityfor thE finanCiaL StatEmEntS
Management is responsible or the preparation and airpresentation o these nancial statements in accordance
with Canadian generally accepted accounting principles,
and or such internal control as management determinesis necessary to enable the preparation o nancial state-
ments that are ree rom material misstatement, whether
due to raud or error.
auditorS rESPonSiBiLity
Our responsibility is to express an opinion on these nancialstatements based on our audit. We conducted our audit
in accordance with Canadian generally accepted auditingstandards. Those standards require that we comply with
ethical requirements and plan and perorm the audit to
obtain reasonable assurance about whether the nancial
statements are ree rom material misstatement.
An audit involves perorming procedures to obtain audit
evidence about the amounts and disclosures in the nancialstatements. The procedures selected depend on theauditors judgment, including the assessment o the risks omaterial misstatement o the nancial statements, whetherdue to raud or error. In making those risk assessments,
the auditors consider internal control relevant to the entitys
preparation and air presentation o the nancial statementsin order to design audit procedures that are appropriate inthe circumstances, but not or the purpose o expressing anopinion on the eectiveness o the entitys internal control.An audit also includes evaluating the appropriateness o
accounting policies used and the reasonableness o accounting
estimates made by management, as well as evaluating theoverall presentation o the nancial statements.
We believe that the audit evidence we have obtained in
our audit is sucient and appropriate to provide a basis
or our audit opinion.
oPinion
In our opinion, the nancial statements present airly, in allmaterial respects, the nancial position o The St. LawrenceSeaway Management Corporation as at March 31, 2011and the results o its operations and its cash fows or theyear then ended in accordance with Canadian generally
accepted accounting principles.
othEr mattEr
The nancial statements o The St. Lawrence Seaway
Management Corporation or the year ended March 31,
2010, were audited by another auditor who expressedan unmodied opinion on those statements on April 30,
2010.
Ottawa, Canada, Chartered Accountants
May 19, 2011 Licensed Public Accountants
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year ended March 31, 2011
($000's) 2011 2010
RevenueTolls $ 60,651 $ 50,147Other navigation revenue 1,415 1,320Licence ees 143 144Power revenue 1,997 1,272Insurance recovery 843Investment revenue 162 62Gain on disposal o capital assets 37 2Amortization o deerred contributions related to capital assets (Note 7) 1,547 1,457
65,952 55,247
ExpensesOperating 66,998 65,012Asset renewal 49,276 45,215Amortization o capital assets 1,642 1,576
117,916 111,803
Deciency o revenue over expenses beore contribution rom Capital Fund Trust (51,964) (56,556)
Contribution rom Capital Fund Trust or expenses (Note 9) 67,072 54,116
EXCESS (DEFICIENCY) OF REVENUE OVER EXPENSES $ 15,108 $ (2,440)
StatEmEnt of rEvEnuEand ExPEnSES
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StatEmEnt of ChangESin nEt aSSEtS
year ended March 31, 2011
($000's)
Invested in Equity o Operating Total
Capital Assets Canada Results 2011 2010
BALANCE, BEGINNING OF YEAR $ 699 $ 7,820 $ $ 8,519 $ 10,959
EXCESS (DEFICIENCY) OF REVENUEOVER EXPENSES 15,108 15,108 (2,440)
Net acquisition o capital assets 1,464 (1,464) Capital assets contributions, net o amortization 55 (55)
Pension plan and other benet plans variances 15,231 (15,231)
Amortization o capital assets (1,642) 1,642
BALANCE, END OF YEAR $ 576 $ 23,051 $ $ 23,627 $ 8,519
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as at March 31, 2011
($000's) 2011 2010
CURRENT ASSETS
Cash and cash equivalents $ 5,912 $ 14,271Accounts receivable Trade 8,371 5,131Accounts receivable Other 2,620 1,170
Due rom Capital Fund Trust (Note 3) 27,661 23,096Supplies inventory 3,225 3,243Prepaid expenses 789 499
48,578 47,410
CAPITAL ASSETS (Note 4) 8,909 9,087DUE FROM EMPLOYEE TERMINATION BENEFITS TRUST FUND (Note 5) 14,725 14,545ACCRUED BENEFIT ASSET (Note 6) 30,051 12,018
$ 102,263 $ 83,060
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 20,378 $ 19,154Employee benets payable 1,717 1,719Due to Employee Termination Benets Trust Fund (Note 5) 90 21
22,185 20,894
EMPLOYEE TERMINATION BENEFITS 14,725 14,545DEFERRED CONTRIBUTIONS RELATED TO CAPITAL ASSETS (Note 7) 8,333 8,388ACCRUED BENEFIT LIABILITY (Note 6) 33,393 30,714
78,636 74,541
COMMITMENTS AND CONTINGENCIES (Notes 10 and 11)
NET ASSETS
Invested in capital assets 576 699Equity o Canada (Note 8) 23,051 7,820
23,627 8,519
$ 102,263 $ 83,060
FINANCIAL STATEMENTS APPROVED BY THE BOARD
Terence F. BowlesDirector
David MuirDirector
BaLanCEShEEt
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year ended March 31, 2011
($000's) 2011 2010
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES:
OPERATINGExcess (deciency) o revenue over expenses $ 15,108 $ (2,440)Items not aecting cash
Amortization o capital assets 1,642 1,576Gain on disposal o capital assets (37) (2)Amortization o deerred contributions related to capital assets (1,547) (1,457)Employee uture benets variance (15,354) 2,097
(188) (226)
Net changes in non-cash operating working capital items (Note 13) (3,671) 4,650
(3,859) 4,424
FINANCINGContributions rom the Capital Fund Trust towards acquisitions o capital assets 1,492 1,729(Increase) decrease in due rom Capital Fund Trust (4,565) 7,155
(3,073) 8,884
INVESTINGAcquisitions o capital assets (1,492) (1,729)Proceeds rom disposal o capital assets 65 96
(1,427) (1,633)
NET CASH (OUTFLOW) INFLOW (8,359) 11,675
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 14,271 2,596
CASH AND CASH EQUIVALENTS, END OF YEAR $ 5,912 $ 14,271
StatEmEnt ofCaSh fLowS
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notES to thEfinanCiaL StatEmEntSYear ended March 31, 2011
($000s)
naturE of BuSinESS
The St. Lawrence Seaway Management Corporation (the Corporation)
was constituted as a not-or-prot corporation under Part II o theCanada Corporations Act on July 9, 1998. Pursuant to an agreement
with her Majesty, certain assets o The St. Lawrence Seaway Authority (the SLSA), a CrownCorporation, were transerred eective October 1, 1998, to the Corporation. These assets
relate to the operation o the St. Lawrence Seaway comprising a deep waterway betweenMontreal and Lake Erie (the Seaway). As a result o a urther agreement with the Ministero Transport, the Corporation assumed responsibility or the management, operation andmaintenance o the Seaway or an initial period o ten years and has now renewed or a
urther ten years.
The transerred assets included all o the movable capital assets, intangibles and workingcapital o the SLSA. Ownership o the real property, locks, bridges, buildings and other
xtures was transerred to the Government o Canada on wind-up o the SLSA.
The Corporation is the Trustee or the Employee Termination Benets Trust Fund and orthe Capital Fund Trust.
The Corporation is exempt rom income tax under section 149(1)(l)o the Income Tax Act(Canada).
The Corporation was mandated to manage, operate and maintain the Seaway in accord-ance with a Management, Operation and Maintenance Agreement (the Agreement), whichrequires the Corporation to negotiate ve-year business plans throughout the term o theAgreement with the Minister o Transport. The business plan includes anticipated revenuesand operating costs and an Asset Renewal Plan. The Corporation is mandated to chargetolls and other revenues to nance the operation and maintenance o the Seaway, and torecover rom the Capital Fund Trust such additional unds, to eliminate operating decitswhen required, in accordance with the terms o the Agreement. The current Agreement isor the period rom April 1, 2008 to March 31, 2013.
1
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Summary of SignifiCant aCCounting PoLiCiES
The nancial statements have been prepared in accordance with
Canadian generally accepted accounting principles (GAAP) or not-or-prot organizations using the deerral method o accounting. A summary
o signicant accounting policies ollows:
a) finanCiaL inStrumEntS
All nancial assets are required to be classied as either held-or-trading, held-to-maturityinvestments, loans and receivables or available-or-sale. All nancial liabilities are requiredto be classied as held-or-trading or other liabilities.
The classication depends on the purpose or which the nancial instruments were acquiredor issued, their characteristics and the Corporations designation o said instruments at
the time o initial recognition. Settlement date accounting is used and transaction costs
related to investments are expensed as incurred.
Classication:Cash and cash equivalents ......................................................Held-or-tradingAccounts receivable .................................................................Loans and receivablesDue rom Capital Fund Trust ....................................................Loans and receivablesDue rom Employee Termination Benets Trust Fund ..............Loans and receivablesAccounts payable and accrued liabilities ................................Other liabilitiesEmployee benets payable ......................................................Other liabilitiesDue to Employee Termination Benets Trust Fund ...................Other liabilities
helD-For-traDIng
These nancial assets are measured at air value at the balance sheet date. Fair value fuc-tuations including interest earned, interest accrued, gains and losses realized on disposaland unrealized gains and losses are included in investment revenue.
loanS anD receIvaBleS
These nancial assets are measured at amortized cost using the eective interest rate
method, less any impairment.
other lIaBIlItIeS
These nancial liabilities are recorded at amortized cost using the eective interest rate
method.
B) rEvEnuE rECognition
Toll revenue and other service charges are recognized as revenue when persuasive evidenceo an arrangement exists, service delivery has occurred, the price to the customer is xedor determinable and collection is reasonably assured.
2
notES to thEfinanCiaL StatEmEntSYear ended March 31, 2011
($000s)
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2 Summary of SignifiCant aCCounting PoLiCiES (Cont.)
C) SuPPLiES invEntory
Supplies inventory comprises parts and supplies used in the operation and maintenance othe Seaway. It includes spare parts which were transerred to the Corporation on October 1,1998. Certain parts were transerred at nominal value. Supplies are valued at the lower o costand net realizable value. Cost is determined using the weighted average cost ormula.
d) CaPitaL aSSEtS
Capital assets o the Corporation consist o temporary structures, movable assets such asmotor vehicles, small vessels employed in the operation o the Seaway and oce urniture
and equipment, including computers and related sotware. Such assets are capitalized ithey have an initial cost o at least $5 (ve thousand dollars).
Additions are recorded at cost. The cost o assets sold, retired or abandoned, and the
related accumulated amortization are removed rom the accounts on disposal. Gains orlosses on disposals are credited or charged to operations.
Amortization is recorded using the straight-line method based on the estimated useul
service lives o the assets.
The Corporation treats all major maintenance and reurbishment costs, as well as any
additions to existing capital assets o the Seaway which were transerred to the Governmento Canada on the wind-up o the SLSA, (dened as existing managed assets), as assetrenewal expenses.
E) ContriButionS rELatEd to CaPitaL aSSEtS
Contributions received or the acquisition o capital assets are deerred and amortized torevenue on the same basis as the amortization o the acquired asset.
f) imPairmEnt of Long-LivEd aSSEtS
Long-lived assets are tested or recoverability whenever events or changes in circum-
stances indicate that their carrying amount may not be recoverable. An impairment lossis recognized when their carrying value exceeds the service potential. The amount o
the impairment loss is determined as the excess o the carrying value o the asset over
its air value.
g) EmPLoyEE tErmination BEnEfitS
Employees o the Corporation are entitled to specied benets as provided or underlabour contracts and conditions o employment. These benets include severance benetscalculated on accumulated sick leave and urlough leave which are payable upon termina-tion o employment. For most employees the benets correspond to 75% o the balanceo the employees accumulated sick leave days. Certain employee groups are entitled toreceive severance payments based on years o service. Employees can accumulate upto teen days o sick leave per year. The liability or benets is recorded in the accountsas the benets accrue to the employees.
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2 Summary of SignifiCant aCCounting PoLiCiES (Cont.)
h) PEnSion PLan
The Corporation has established its own dened benet pension plan and employees
were allowed the option o transerring their entitlement to the new plan or remaining withthe Public Service Superannuation Plan. All employees, on or ater April 1, 1999, becomemembers o the Corporations pension plan.
The cost o employee uture benets earned by employees is actuarially determined usingthe projected benet method prorated on service and managements best estimate o
discount rate, retirement ages o employees and expected health care costs. Plan obliga-tions are discounted using current market interest rates and plan assets are presented at air
market value. The Corporation amortizes past service costs and cumulative unrecognizednet actuarial gains and losses, in excess o 10% o the greater o the projected benetobligation or the market-related value o plan assets, over the expected average remainingservice lietime (EARSL) o the active employee group covered by the plans. The EARSLhas been determined to be seven years under the Pension Benet Plan and our years orthe Supplementary Pension Benet Plan.
i) uSE of EStimatES
The preparation o nancial statements in conormity with Canadian GAAP requires manage-ment to make estimates and assumptions that aect the reported amounts o assets andliabilities and disclosures o contingent assets and liabilities at the date o the nancial
statements and the reported amounts o revenue and expenses during the reporting period.Actual results could dier rom these estimates.
The estimated useul lie o the capital assets and the assumptions o expected economictrends or the post employment benets are the most signicant items where estimates
are used.
j) futurE aCCounting ChangES PuBLiC SECtor aCCounting Board (PSaB) StandardS
The Accounting Standards Board is requiring that government not-or-prot organizationsadopt the Public Sector Accounting Board Standards (PSAB) or year-ends beginning
ater January 1, 2012.
The St. Lawrence Seaway Management Corporation will adopt the PSAB standards
eective April 1, 2012.
The Corporation is currently evaluating the impact o the adoption o these new standardson its nancial statements.
notES to thEfinanCiaL StatEmEntSYear ended March 31, 2011
($000s)
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duE from CaPitaL fund truSt
The Corporation has an amount receivable rom the Capital Fund Trustto cover specic Seaway support obligations such as the Corporationsdecits, net capital acquisitions and other short-term cash requirements
in accordance with the Trust Agreement.
Changes in the balance due rom the Capital Fund Trust at March 31 were as ollows:
2011 2010
Net balance, beginning o year $ 23,096 $ 30,251
Cash paid by the Capital Fund Trust (8,154) (17,303)
Payment o previous years decit (55,845) (45,697)Contribution receivable or capital acquisitions 1,492 1,729
Contribution receivable or expenses 67,072 54,116
Net balance, end o year $ 27,661 $ 23,096
CaPitaL aSSEtS
Annual
Amortization
Rate
2011 2010
Cost
Accumulated
Amortization
Net Book
Value
Net Book
Value
Inormation technology systems 20% $ 7,502 $ 5,730 $ 1,772 $ 1,865
Vehicles 10-20% 6,627 4,259 2,368 2,251
Floating equipment 2-20% 3,955 3,673 282 358
Machinery and oce equipment 2-20% 4,538 2,836 1,702 1,637
Inrastructure equipment 2-20% 6,755 4,432 2,323 2,493
Assets under construction 462 462 483
$ 29,839 $ 20,930 $ 8,909 $ 9,087
duE to / from EmPLoyEE tErminationBEnEfitS truSt fund
This amount represents the obligation or the accrued employee termina-tion benets liability o the Corporation which is represented by the net
assets in the Employee Termination Benets Trust Fund, adjusted or any cumulative unreal-ized gains or losses on available-or-sale nancial assets. Any shortall in the EmployeeTermination Benets Trust Funds net assets will be unded by the Government o Canadathrough the Capital Fund Trust.
3
4
5
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PoSt EmPLoymEnt BEnEfitS
The Corporation has dened benet pension plans or employees andalso provides post employment benets, other than pension, includingsupplemental health and lie insurance or retired employees. The last
actuarial valuation was perormed in December 2009 or the Pension Benet Plan, March2011 or the Supplementary Pension Benet Plan and December 2009 or the Other BenetPlans. Inormation about the dened benet plans and post employment benets are asollows:
2011
Pension
Beneft Plan
Supplementary
Pension
Beneft Plan
Other
Beneft
Plans
Accrued benet obligation
Balance, beginning o year $ 167,339 $ 1,191 $ 44,462
Current service cost (employer) 5,306 43 1,738
Interest cost 11,305 82 3,033
Member contributions 2,061 3
Benets paid (7,162) (37) (1,835)
Actuarial loss 28,023 143 6,843
Balance, end o year $ 206,872 $ 1,425 $ 54,241
Plan assets
Fair value, beginning o year $ 176,634 $ 1,729 $ 14,761
Return on plan assets 11,436 57
Corporation contribution 23,085 200 2,094
Investment experience gain 4,486 22
Member contributions 2,061 3
Benets paid (7,162) (37) (1,835)
Fair value, end o year $ 210,540 $ 1,974 $ 15,020
Funded status plan surplus (decit) $ 3,668 $ 549 $ (39,221)
Unamortized net actuarial loss 25,513 321 5,828
Accrued benet asset (liability) recognized $ 29,181 $ 870 $ (33,393)
Elements o costs recognized in the year:
Current service cost (employer) $ 5,306 $ 43 $ 1,738
Interest cost 11,305 82 3,033
Expected return on plan assets (11,436) (57)
Net actuarial loss amortization 9 2
$ 5,175 $ 77 $ 4,773
6
notES to thEfinanCiaL StatEmEntSYear ended March 31, 2011
($000s)
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6 PoSt EmPLoymEnt BEnEfitS (Cont.)
SignifiCant aCtuariaL aSSumPtionS
The signicant actuarial assumptions adopted in measuring the Corporations accrued
benet obligations and net periodic benet cost, are as ollows:
(Weighted average assumptions as o January 1, 2011)
Pension
Beneft Plan
Supplementary
Pension
Beneft Plan
Other
Beneft
Plans
Discount rate 5.75 % 5.75 % 5.75 %
Expected rate o return on plan assets 6.00 % 3.00 % %
Rate o compensation increase 3.50 % 3.50 % 3.50 %
(Weighted average assumptions as o January 1, 2010)
Pension
Benet Plan
Supplementary
Pension
Benet Plan
Other
Benet
Plans
Discount rate 6.75 % 6.75 % 6.75 %
Expected rate o return on plan assets 6.25 % 3.13 % %
Rate o compensation increase 3.50 % 3.50 % 3.50 %
For measurement purposes, a 7.94% health care cost trend rate was assumed or2011 (2010 8.13%), decreasing gradually to 4.5% in 2029 and remaining at that level
thereater.
The expected rate o return on other benets plans is NIL% because the terms whereby theEmployee Termination Benets Trust Fund was established providing that all the incomeearned by the Trust Fund is to be transerred to the Capital Fund Trust.
PLan aSSEtS
The Plans asset allocation, by asset category, is as ollows:
2011 2010
Cash % %
Equity securities 68 % 66 %
Debt securities 32 % 34 %
Total 100 % 100 %
notES to thEfinanCiaL StatEmEntSYear ended March 31, 2011
($000s)
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45The St. Lawence Seaway Management Copoation
dEfErrEd ContriButionS rELatEd to CaPitaL aSSEtS
Deerred contributions related to capital assets represent contributionsrom the Government o Canada through the Capital Fund Trust or theacquisition o capital assets as per the Agreement and are amortized
on the same basis as the amortization o the acquired asset.
The deerred contributions balance or the year is composed o the ollowing:
2011 2010
Balance, beginning o year $ 8,388 $ 8,116
Plus: Current year contributions or the acquisition o capital assets 1,492 1,729
Less: Amortization o assets acquired with deerred contributions (1,547) (1,457)
Balance, end o year $ 8,333 $ 8,388
Equity of Canada
2011 2010
Secured contribution o Canada $ 36,000 $ 36,000
Contribution to the Capital Fund Trust (24,000) (24,000)
Surplus/(Decit) 11,051 (4,180)
$ 23,051 $ 7,820
Upon transer o certain assets o the SLSA to the Corporation on October 1, 1998, the
Corporation signed a general security agreement with the Government o Canada coveringall the assets o the Corporation, evidenced by a limited recourse term promissory note witha ace value o $36,000. The note is payable without interest on the earlier o (a) March 31,2018, and (b) the termination or any reason whatsoever, o the Agreement. Recourse bythe Government o Canada is limited to a) the collateral as dened in the general securityagreement, and b) the Hypothecated Property (as dened in the Deed o Movable Hypothecbetween the Corporation and the SLSA); and set o against the Purchase Price (as denedin the Option Agreement between the Corporation and Her Majesty).
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46
ContriButionS from thE CaPitaL fund truSt
The Corporation is entitled to contributions rom the Capital Fund Trustto und the operating decit and or capital asset acquisitions in accord-ance with the Agreement. The contribution towards operations is equal
to the excess o expenses over revenue, adjusted or the non-cash items or amortization odeerred contribution related to capital assets, amortization o capital assets, the undepreci-ated cost o capital assets disposed o, and the post retirement benets variation.
2011 2010
Excess o expenses over revenue beore adjustments $ 51,964 $ 56,556
Plus: Gain on disposal o assets 37 2Amortization o deerred contributions related to capital assets 1,547 1,457
Pension plan and other benet plans variances 15,231
Less: Proceeds rom disposal o capital assets (65) (96)
Pension plan and other benet plans variances (2,227)
Amortization o capital assets (1,642) (1,576)
Contribution rom Capital Fund Trust or expenses $ 67,072 $ 54,116
Contribution rom Capital Fund Trust towards acquisitions o capital assets $ 1,492 $ 1,729
CommitmEntS
The Corporation has entered into various contractual commitments
or capital and other expenditures which expire within the next ve
years. The minimum annual costs or each o the next ve years is
as ollows:
2011/12 $ 1,516
2012/13 516
2013/14 339
2014/15 110
2015/16 20
$ 2,501
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10
notES to thEfinanCiaL StatEmEntSYear ended March 31, 2011
($000s)
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47The St. Lawence Seaway Management Copoation
ContingEnCiES
The Corporation, in the normal course o business, experiences claimsor a variety o reasons. Claims outstanding at March 31, 2011 totalling$5,636 (2010 $3,136) have not been provided or in the accounts.
Management is o the opinion that these actions will not result in any material losses to theCorporation. Claims relating to operation and maintenance o the Seaway incurred by theSLSA prior to October 1, 1998 became the obligation o Transport Canada.
LEttEr of guarantEE
As at March 31, 2011, the Corporation issued a letter o guarantee amounting to $392
(2010 $392).
CaPitaL managEmEnt
The Corporations objectives when managing capital (net assets) areto orecast quarterly cash fows accurately in order to minimize the
cash requirement rom Transport Canada while maintaining sucientcash to maintain its operations. For more inormation on the Corporations objectives,
policies, procedures and process or managing capital, reer to Note 1 to the nancial
statements.
Capital management objectives, policies and procedures are unchanged since the preceding
year. The Corporation has complied with all the capital requirements.
nEt ChangES in non-CaSh working CaPitaL BaLanCES
2011 2010
Accounts receivable trade $ (3,240) $ 2,185
Accounts receivable other (1,450) 200
Supplies inventories 18 (148)
Prepaid expenses (290) (21)Accounts payable and accrued liabilities 1,224 2,734
Employee benets payable (2) (88)
Due to employee termination benets trust und 69 (212)
$ (3,671) $ 4,650
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14dirECtorS and offiCErS rEmunEration
The remuneration earned by the directors and ocers, in dollars, wasas ollows:
a) Directors remuneration comprises a xed ee and a per diem based on attendance
at meetings o the Board and its committees.
2011
Ian MacGregor (eective November 30, 2009. Chair eective August 18, 2010 until present) $ 40,635
Guy Vronneau (Chair until August 18, 2010) 19,530
Robert Armstrong (eective November 1, 2010) 8,242
Jonathan Bamberger (eective August 28, 2010) 11,708
Peter Cathcart (ceased to hold oce September 30, 2010) 12,075
Wayne Devlin (eective January 17, 2011) 4,778
Richard Gaudreau (ceased to hold oce May 4, 2010) 3,938
Paul Gourdeau (eective August 6, 2009) 26,040
William Keys (ceased to hold oce November 18, 2010) 18,742
Ralph Mercier (eective November 18, 2010) 8,242
William Mooney (ceased to hold oce January 16, 2011) 18,323
David Mothersill (eective January 26, 2009) 33,810
David Muir (eective May 5, 2010) 23,887$ 229,950
b) Remuneration paid or the six (6) ocers, as employees o the Corporation, was as
ollows:
2011
Terence Bowles, (President/CEO, eective November 1, 2010) $ 125,800
Richard Core, (President/CEO until October 31, 2010, Board Advisor) 413,000Jean Aubry-Morin, Vice President Corporate Sustainability 190,300
Guy Yelle, Vice President Maisonneuve 212,100
Karen Dumoulin, Director o Finance 144,400
Yvette Homan, Counsel & Secretary 119,400
$ 1,205,000
notES to thEfinanCiaL StatEmEntSYear ended March 31, 2011
($000s)