Federal Economic Development Agency for Southern Ontario Financial Statements (Unaudited)

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, 2019, and all information contained in these statements rests with the management of the Federal Economic Development Agency for Southern Ontario (FedDev 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 FedDev Ontario's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in FedDev 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). This provides 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. This is accomplished 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 Agency; and through conducting risk-based assessments to ensure 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.

FedDev 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 FedDev Ontario have not been audited.

James Meddings
Deputy Head
Signed at Waterloo, Canada (August 23, 2019)

Lisa St-Amour, MBA, CPA, CMA
A/Chief Financial Officer

Federal Economic Development Agency for Southern Ontario
Statement of Financial Position (Unaudited)
As at March 31, 2019 (in thousands of dollars)
Liabilities
-	2019	2018
Accounts payable and accrued liabilities (Note 4)	30,355	57,622
Vacation pay and compensatory leave	1,185	1,025
Employee future benefits (Note 5)	801	877
Other liabilities (Note 6)	0	50
Total liabilities	32,341	59,574
Financial assets
Due from Consolidated Revenue Fund	30,309	57,625
Accounts receivable and advances (Note 7)	12,477	4,847
Loans (Note 8)	299,040	260,074
Total financial assets	341,826	322,546
Financial assets held on behalf of Government
Accounts receivable and advances (Note 7)	(12,335)	(4,733)
Loans (Note 8)	(299,040)	(260,074)
Total financial assets held on behalf of Government	(311,375)	(264,807)
Total net financial assets	30,451	57,739
Departmental net debt	1,891	1,836
Non-financial assets
Prepaid expenses	25	11
Tangible capital assets (Note 11)	8	25
Total non-financial assets	33	36
Departmental net financial position	(1,858)	(1,800)

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, 2019 (in thousands of dollars)
Expenses
-	2019 Planned Results	2019	2018
Economic Development in Southern Ontario	123,398	140,283	180,024
Internal Services	19,449	18,048	18,249
Expenses incurred on behalf of Government	(7,931)	(16,881)	(8,011)
Total expenses	134,916	141,450	190,263
Revenues
Gains on disposal of assets	0	20	0
Other revenue	0	191	189
Revenues earned on behalf of Government	0	(191)	(189)
Total revenues	0	20	0
Net cost of operations before funding and transfers	134,916	141,430	190,263
Government funding and transfers
Net cash provided by Government	-	165,454	156,983
Change in Due from Consolidated Revenue Fund	-	(27,316)	30,511
Services provided without charge by other government departments (Note 12)	-	3,214	3,355
Transfer of assets from (to) other government departments (Note 13)	-	20	0
Net cost of operations after government funding and transfers	-	58	(584)
Departmental net financial Position – Beginning of year	-	(1,800)	(2,385)
Departmental net financial position – End of year	-	(1,858)	(1,800)

Segmented information (Note 14)

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, 2019 (in thousands of dollars)
Change due to tangible capital assets
-	2019	2018
Net cost of operations after government funding	58	(584)
Amortization of tangible capital assets	(17)	(28)
Net gain on disposal of tangible capital assets including adjustments	20	0
Proceeds from disposal of tangible capital assets	(20)	0
Total change due to tangible capital assets	(17)	(28)
Change due to prepaid expenses	14	11
Departmental increase (decrease) in net debt	55	(602)
Departmental net debt – Beginning of year	1,836	2,438
Departmental net debt – End of year	1,891	1,836

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 2019 (in thousands of dollars)
Operating activities
-	2019	2018
Net cost of operations before government funding and transfers	141,430	190,263
Non cash items:
Amortization of tangible capital assets (Note 11)	(17)	(28)
Gain (loss) on disposal of capital assets	20	0
Services provided without charge by other government departments (Note 12)	(3,214)	(3,355)
Variations in Statement of Financial Position
Increase (decrease) in accounts receivable and advances	28	16
Increase (decrease) in prepaid expenses	14	11
Decrease (increase) in accounts payable and accrued liabilities	27,267	(30,039)
Decrease (increase) in vacation pay and compensatory leave	(160)	206
Decrease (increase) in future employee benefits	76	(79)
Decrease (increase) in other liabilities	50	(11)
Transfer of liabilities to other government departments (Note 13)	(20)	0
Cash used in operating activities	165,474	156,983
Capital investing activities
Proceeds from sale of tangible capital assets	(20)	0
Cash used in capital investing activities	(20)	0
Net cash provided by the Government of Canada	165,454	156,983

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

Federal Economic Development Agency for Southern Ontario
Notes to the Financial Statements
As at March 31, 2019

1. Authority and objectives

The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) operates under the authority that 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. The Agency is part of the Innovation, Science and Economic Development (ISED) portfolio.

In 2018-19, FedDev Ontario's core mandate was to strengthen southern Ontario's economic capacity for innovation, entrepreneurship and collaboration; and promote the development of a strong and diversified southern Ontario economy. The Agency delivered on its mandate through its core transfer payment program, the Southern Ontario Prosperity Program and its three streams tailored to the specific opportunities and challenges of southern Ontario:

The Southern Ontario Prosperity Initiatives (SOPI): targeted business innovation and investments to strengthen the regional innovation ecosystem and regional diversification.
The Advanced Manufacturing Fund (AMF): promoted continued growth and increased productivity of Ontario's advanced manufacturing sector by supporting large-scale, incremental and transformative activities.
The Eastern Ontario Development Program (EODP): addressed the unique challenges in eastern Ontario.

Agency investments through these programs aligned with the broader Innovation and Skills Plan (ISP).

Budget 2018 called for a review of regional development agencies' (RDAs) innovation programming, resulting in a new, consolidated program suite across all RDAs called Regional Economic Growth through Innovation (REGI). The Agency transitioned to this new suite of innovation programming in December 2018, as it wound down initiatives delivered under the Southern Ontario Prosperity Program.

In addition to delivering its core programming, FedDev Ontario also played an important role as a federal delivery agent for national programs. These included the Community Futures Program, and the Economic Development Initiative. It also delivered services in the region, including the Industrial and Technological Benefits policy, Small Business Services (formerly known as Canada Business Ontario, part of the Canada Business Network), and worked with federal and provincial partners on the Accelerated Growth Service initiative, helping high-growth firms scale-up with a coordinated and streamlined approach to business support services.

Fiscal year 2018–19 marked the last year of FedDev Ontario's second five-year funding mandate (2014–2019). Renewed funding of $920 million for a further six years was allocated to the Agency in Budget 2018, for continued support of economic growth in southern Ontario. FedDev Ontario also received $33 million in funding to deliver the Government of Canada's Women Entrepreneurship Strategy (WES) in southern Ontario, through the Women Ecosystem Fund and the Women Entrepreneurship Fund, to increase the number of women-owned and women-led businesses. In addition, the Agency received $116 million in incremental funding to support regional delivery of the Innovation and Skills Plan. Finally, Budget 2019 announced that FedDev Ontario will be granted permanent status in 2024-25. As a permanent agency, FedDev Ontario will be a stable, long-term partner to support innovative businesses, networks and communities across southern Ontario to foster sustained growth in a vital and dynamic region of Canada.

With its headquarters in Waterloo and offices in Toronto, Peterborough and Ottawa, FedDev Ontario has a 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. FedDev Ontario works closely with the Government of Ontario and key federal departments and agencies to support the southern Ontario economy. 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.

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:

Parliamentary authorities — 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 2018–19 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 2018–19 Departmental Plan.
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.
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.
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.
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.
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.
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.
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.
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:

Asset class Amortization period

Computer hardware 10 years

Machinery and equipment 10 years

Vehicles 3 to 7 years
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.

Asset class	Amortization period
Computer hardware	10 years
Machinery and equipment	10 years
Vehicles	3 to 7 years

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)
Adjustments for items affecting net cost of operations but not affecting authorities:
-	2019	2018
Net cost of operations before government funding and transfers	141,430	190,263
Amortization of tangible capital assets	(17)	(28)
Gain (loss) on disposal of tangible capital assets	20	0
Services provided without charge by other government departments	(3,214)	(3,355)
Decrease (increase) in vacation pay and compensatory leave	(160)	206
Decrease (increase) in employee future benefits	76	(79)
Refunds of prior years' expenditures	2	17
Refunds of previous years' accounts payable	1,664	292
Total items affecting net cost of operations but not affecting authorities	(1,629)	(2,947)
Adjustments for items not affecting net cost of operations but affecting authorities:
Increase (decrease) in prepaid expenses	14	11
Increase (decrease) in advances	19	16
Loans issued on behalf of Government	96,701	62,817
Increase in other receivables	171	91
Total items not affecting net cost of operations but affecting authorities	96,905	62,935
Current year authorities used	236,706	250,251

b) Authorities provided and used (in thousands of dollars)
Authorities provided:
-	2019	2018
Vote 1 – Operating	27,666	27,611
Vote 5 – Contributions	212,009	242,199
Statutory amounts	2,928	3,055
Less:
Authorities available for future years	(20)	0
Lapsed: Operating	(1,071)	(520)
Lapsed: Contribution	(4,805)	(22,093)
Lapsed: Proceeds from the disposal of crown assets	(1)	(1)
Current year authorities used	236,706	250,251

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 (in thousands of dollars)
-	2019	2018
Accounts payable – Other government departments and agencies	333	425
Accounts payable – External parties	28,287	55,296
Other External Payables	2	0
Total accounts payable	28,622	55,721
Accrued liabilities	1,733	1,901
Total accounts payable and accrued liabilities	30,355	57,622

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 2018-19 expense amounts to $2,639,562 ($2,745,645 in 2017-18). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2017-18) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2017-18) 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, 2019, 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 (in thousands of dollars)
-	2019	2018
Accrued benefit obligation - Beginning of year	877	798
Expense for the year	(48)	238
Benefits paid during the year	(28)	(159)
Accrued benefit obligation - End of year	801	877

6. Other Liabilities

Other liabilities represent amounts received from third parties to be disbursed for a specified purpose. As at March 31, 2019, FedDev Ontario has no other liabilities.

Other Liabilities (in thousands of dollars)
-	Opening Balance	Receipts	Payments	Closing Balance
Canada/ Provinces Service Agreement	(50)	(250)	300	0

7. Accounts receivable and advances

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

Accounts receivable and advances (in thousands of dollars)
-	2019	2018
Receivables – Other government departments and agencies	44	48
Receivables – External parties	12,291	4,685
Employee advances	142	114
Gross accounts receivable and advances	12,477	4,847
Accounts receivable held on behalf of government	(12,335)	(4,733)
Net accounts receivable and advances	142	114

8. Loans receivable

The following table presents details of FedDev Ontario's unconditional repayable contribution balances:

Loans receivable (in thousands of dollars)
Loans receivable:
-	2019	2018
Unconditionally repayable contributions	351,243	298,528
Less: Unamortized discount	0	0
Subtotal	351,243	298,528
Less: Allowance for uncollectibility	(52,203)	(38,454)
Gross loans receivable	299,040	260,074
Loans held on behalf of Government	(299,040)	(260,074)
Net loans receivable	0	0

Unconditionally repayable contributions

Unconditionally repayable contributions relate to contributions made to outside parties that must be repaid without qualification. The repayable contributions portfolio consists of 204 non-interest bearing loans issued in the years from 2009 to 2019 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 $52,203,382 ($38,454,429 in 2017-18) has been recorded.

Loans receivable are considered a financial asset held on behalf of the Government and are not available to discharge the department's liabilities; as such, the loans receivable are presented as a reduction to the entity's gross loans receivable.

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:

Contractual obligations (in thousands of dollars)
-	2020	2021	2022	2023	2024	Total
Transfer payments	92,315	54,396	28,897	22,628	12,265	210,502
Total	92,315	54,396	28,897	22,628	12,265	210,502

The contractual obligations for transfer payments for 2020 and beyond are related to projects under the Southern Ontario Prosperity Program, Community Futures Program as well as the new Regional Economic Growth through Innovation Program.

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, 2019, FedDev Ontario has no contingent liabilities based on the legal assessment carried out by Department of Justice of potential liability.

11. Tangible capital assets (in thousands of dollars)

Capital Asset Class	Opening Balance	Acquisitions, Transfers and Adjustments	Disposals and Write-Offs	Closing Balance	Opening Balance^{Footnote *}	Amortization^{Footnote *}	Acquisitions, Transfers and Adjustments	Disposals and Write-Offs	Closing Balance	2019	2018
-	Cost				Accumulated Amortization					Net Book Value
Computer hardware	10	0	0	10	7	1	0	0	7	3	3
Machinery and equipment	25	0	0	25	17	2	0	0	20	5	8
Vehicles	319	0	50	269	305	14	0	50	269	0	14
Total	354	0	50	304	329	17	0	50	296	8	25

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:

Common services provided without charge by other government departments (in thousands of dollars)
-	2019	2018
Employer's contributions to the health and dental insurance plan	1,594	1,750
Accommodation	1,620	1,605
Total	3,214	3,355

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) Other transactions with related parties (in thousands of dollars)
	2019	2018
Expenses – Other government departments and agencies	6,273	6,224

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

13. Transfer from/to other government departments (in thousands of dollars)

Assets	Current Year
Accounts Receivable and Employee Advances	(20)
Adjustment to the departmental net financial position	(20)

14. Segmented information (in thousands of dollars)

Presentation by segment is based on FedDev Ontario's Departmental Results Framework. 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 core responsibility, 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
-	Economic Development in Southern Ontario	Internal Services	2019 Total	2018 Total
Transfer payments
Transfers to non-profit organizations	109,648	0	109,648	115,701
Transfers to Industry	0	0	0	0
Transfer to other levels of government	(588)	0	(588)	41,390
Total transfer payments	109,060	0	109,060	157,091
Operating expenses
Salaries and employee benefits	12,140	12,448	24,588	26,209
Professional and special services	951	3,112	4,064	3,890
Accommodation	801	819	1,620	1,605
Travel	220	524	744	761
Amortization	0	17	17	28
Communication (and postage)	170	390	560	282
Furniture and equipment	4	510	514	186
Equipment repair and maintenance	2	19	20	35
Rental	22	132	154	102
Utilities, materials and supplies	31	59	90	76
Bad debt expense	16,881	0	16,881	8,011
Other operating expenses	1	18	19	(2)
Expenses incurred on behalf of Government	(16,881)	0	(16,881)	(8,011)
Total operating expenses	14,342	18,048	32,390	33,172
Total expenses	123,402	18,048	141,450	190,263
Revenues
Amortization of discounts	0	0	0	0
Other revenue	0	211	211	189
Revenues earned on behalf of Government	0	(191)	(191)	(189)
Total revenues	0	20	20	0
Net cost from continuing operations	123,402	18,028	141,430	190,263

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Federal Economic Development Agency for Southern Ontario Financial Statements (Unaudited) — As at March 31, 2019

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