Exhibit 99.2
CONSOLIDATED FINANCIAL STATEMENTS
for the fiscal year ended March 31, 2017
Consolidated Financial Statements
Statement of Responsibility
for the Consolidated Financial Statements of
the Province of Nova Scotia
Responsibility for the integrity, objectivity, and fair presentation of the consolidated financial statements of the Province of Nova Scotia rests with the government. These financial statements are prepared on behalf of the Minister and Deputy Minister of Finance and Treasury Board by the Controller In accordance with Canadian public sector accounting standards.
The consolidated financial statements include a Consolidated Statement of Financial Position, Consolidated Statement of Operations and Accumulated Deficits, Consolidated Statement of Changes in Net Debt, and Consolidated Statement of Cash Flow. They present fairly, in all material respects, the financial position and the results of operations for the year ended March 31, 2017. The government is responsible for maintaining a system of internal accounting and administrative controls in order to provide reasonable assurance that transactions are appropriately authorized, assets are safeguarded, and financial records are properly maintained.
Under the mandate In Section 19 of the AUDITOR GENERAL ACT, the Auditor General of Nova Scotia provides an independent opinion on the consolidated financial statements prepared by the government.
Geoffrey Gatien, CPA, CA
Associate Deputy Minister and Controller
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| 5161 George Street Royal Centre, Suite 400 Halifax, Nova Scotia B3J 1M7 | Auditor General of Nova Scotia |
INDEPENDENT AUDITOR’S REPORT
To the Members of the Legislative Assembly of Nova Scotia:
Report on the Consolidated Financial Statements
I have audited the accompanying consolidated financial statements of the Province of Nova Scotia, which comprise the consolidated statement of financial position as at March 31, 2017, and the consolidated statement of operations and accumulated deficits, consolidated statement of changes in net debt and consolidated statement of cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information.
Government’s Responsibility for the Consolidated Financial Statements
The Government of Nova Scotia is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
My responsibility is to express an opinion on these consolidated financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion
In my opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Province of Nova Scotia as at March 31, 2017, and the results of its operations, changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.
Michael A. Pickup, CPA, CA
Auditor General of Nova Scotia
July 20, 2017
Halifax, Nova Scotia
902 424 4046 tel 902 424 4350 fax www.oag-ns.ca Michael.Pickup@novascotia.ca |  |
Consolidated Financial Statements
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Statement 1
Province of Nova Scotia
Consolidated Statement of Financial Position
As at March 31, 2017
($ thousands)
| 2017 | 2016 | |||||||
| (as restated) | ||||||||
Financial Assets | ||||||||
Cash and Short-Term Investments | 1,079,431 | 710,041 | ||||||
Accounts Receivable | 913,349 | 840,380 | ||||||
Inventories for Resale | 3,469 | 6,890 | ||||||
Loans Receivable (Schedule 3) | 2,308,943 | 2,400,924 | ||||||
Investments (Schedule 3) | 183,286 | 91,581 | ||||||
Investment in Government Business Enterprises (Schedule 6) | 215,071 | 189,795 | ||||||
Assets Held for Sale | 1,552 | — | ||||||
| 4,705,101 | 4,239,611 | |||||||
Liabilities | ||||||||
Bank Advances and Short-Term Borrowings | 1,171,011 | 576,210 | ||||||
Accounts Payable and Accrued Liabilities | 2,064,145 | 1,937,188 | ||||||
Deferred Revenue (Note 4) | 258,881 | 235,049 | ||||||
Accrued Interest | 214,953 | 216,798 | ||||||
Unmatured Debt (Schedules 4 and 5) | 13,089,820 | 13,524,557 | ||||||
Unamortized Foreign Exchange Translation Gains and Losses, Premiums and Discounts | 69,724 | 107,466 | ||||||
Pension, Retirement and Other Obligations (Note 5) | 2,791,435 | 2,718,345 | ||||||
| 19,659,969 | 19,315,613 | |||||||
Net Debt | (14,954,868) | (15,076,002) | ||||||
Non-Financial Assets | ||||||||
Tangible Capital Assets (Schedule 7) | 5,754,331 | 5,724,134 | ||||||
Inventories of Supplies | 72,634 | 70,504 | ||||||
Prepaid Expenses | 14,813 | 18,710 | ||||||
| 5,841,778 | 5,813,348 | |||||||
Accumulated Deficits | (9,113,090) | (9,262,654) | ||||||
Accounting Changes (Note 2)
Restricted Assets (Note 3)
Contingencies and Contractual Obligations (Note 10)
Trust Funds under Administration (Note 12)
The accompanying notes and schedules are an integral part of these Consolidated Financial Statements
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Statement 2
Province of Nova Scotia
Consolidated Statement of Operations and Accumulated Deficits
For the fiscal year ended March 31, 2017
($ thousands)
| Adjusted | ||||||||||||
| Estimate 2017 | Actual 2017 | Actual 2016 | ||||||||||
| (as restated) | ||||||||||||
Revenue (Schedule 1) | ||||||||||||
Provincial Sources | ||||||||||||
Tax Revenue | 5,610,312 | 5,576,539 | 5,457,623 | |||||||||
Other Provincial Revenue | 1,486,166 | 1,571,227 | 1,471,931 | |||||||||
Net Income from Government | ||||||||||||
Business Enterprises (Schedule 6) | 382,228 | 394,591 | 387,757 | |||||||||
Investment Income | 182,117 | 185,547 | 190,125 | |||||||||
| 7,660,823 | 7,727,904 | 7,507,436 | ||||||||||
Federal Sources | 3,505,106 | 3,500,366 | 3,430,114 | |||||||||
Total Revenue | 11,165,929 | 11,228,270 | 10,937,550 | |||||||||
Expenses (Schedule 2) | ||||||||||||
Agriculture | 64,177 | 68,997 | 63,673 | |||||||||
Business | 154,164 | 152,639 | 135,589 | |||||||||
Communities, Culture and Heritage | 84,028 | 98,342 | 79,456 | |||||||||
Community Services | 1,057,852 | 1,078,629 | 1,047,601 | |||||||||
Education and Early Childhood Development | 1,607,576 | 1,619,279 | 1,585,062 | |||||||||
Energy | 30,727 | 36,821 | 30,450 | |||||||||
Environment | 86,057 | 87,938 | 74,282 | |||||||||
Finance and Treasury Board | 22,782 | 23,431 | 20,723 | |||||||||
Fisheries and Aquaculture | 12,765 | 12,226 | 9,928 | |||||||||
Health and Wellness | 4,406,287 | 4,462,231 | 4,478,850 | |||||||||
Internal Services | 185,447 | 180,180 | 136,969 | |||||||||
Justice | 331,171 | 328,134 | 328,116 | |||||||||
Labour and Advanced Education | 418,709 | 436,490 | 404,666 | |||||||||
Assistance to Universities | 380,605 | 441,585 | 374,125 | |||||||||
Municipal Affairs | 191,789 | 200,148 | 160,564 | |||||||||
Natural Resources | 81,861 | 83,347 | 86,448 | |||||||||
Public Service | 208,301 | 203,345 | 195,608 | |||||||||
Seniors | 1,598 | 1,526 | 1,483 | |||||||||
Transportation and Infrastructure Renewal | 463,320 | 521,856 | 507,515 | |||||||||
Restructuring Costs | 187,538 | 53,619 | 98,639 | |||||||||
Pension Valuation Adjustment (Note 5) | 66,251 | 17,191 | 141,828 | |||||||||
Refundable Tax Credits | 137,602 | 133,738 | 120,644 | |||||||||
Debt Servicing Costs (Note 6) | 857,911 | 837,014 | 868,532 | |||||||||
Total Expenses (Note 7) | 11,038,518 | 11,078,706 | 10,950,751 | |||||||||
Provincial Surplus (Deficit) | 127,411 | 149,564 | (13,201) | |||||||||
Accumulated Deficits, Beginning of Year | ||||||||||||
As Previously Reported | (9,283,586 | ) | (9,272,928) | |||||||||
Accounting Changes (Note 2) | 20,932 | 23,475 | ||||||||||
As Restated | (9,262,654 | ) | (9,249,453) | |||||||||
Accumulated Deficits, End of Year | (9,113,090 | ) | (9,262,654) | |||||||||
The accompanying notes and schedules are an integral part of these Consolidated Financial Statements
Consolidated Financial Statements
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Statement 3
Province of Nova Scotia
Consolidated Statement of Changes in Net Debt
For the fiscal year ended March 31, 2017
($ thousands)
| Adjusted | ||||||||||||
| Estimate | Actual | Actual | ||||||||||
| 2017 | 2017 | 2016 | ||||||||||
| (as restated) | ||||||||||||
Net Debt, Beginning of Year | ||||||||||||
As Previously Reported | (15,096,934) | (15,096,934) | (15,030,615) | |||||||||
Accounting Changes (Note 2) | — | 20,932 | 23,475 | |||||||||
As Restated | (15,096,934) | (15,076,002) | (15,007,140) | |||||||||
Changes in the Year | ||||||||||||
Provincial Surplus (Deficit) | 127,411 | 149,564 | (13,201) | |||||||||
Acquisitions and Transfers of | ||||||||||||
Tangible Capital Assets | (645,000) | (458,854) | (466,459) | |||||||||
Amortization of Tangible Capital Assets | 442,204 | 427,416 | 424,332 | |||||||||
Disposals of Tangible Capital Assets | — | 1,241 | 4,599 | |||||||||
Acquisitions of Inventories of Supplies | — | (2,130) | (14,661) | |||||||||
Use (Acquisitions) of Prepaid Expenses | — | 3,897 | (3,472) | |||||||||
Total Changes in the Year | (75,385) | 121,134 | (68,862) | |||||||||
Net Debt, End of Year | (15,172,319) | (14,954,868) | (15,076,002) | |||||||||
The accompanying notes and schedules are an integral part of these Consolidated Financial Statements
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Statement 4
Province of Nova Scotia Consolidated
Statement of Cash Flow
For the fiscal year ended March 31, 2017
($ thousands)
| 2017 | 2016 | |||||||
| (as restated) | ||||||||
Operating Transactions | ||||||||
Provincial Surplus (Deficit) | 149,564 | (13,201) | ||||||
Sinking Fund and Public Debt Management Fund Earnings | (90,475 | ) | (95,982) | |||||
Amortization of Premiums and Discounts on Unmatured Debt | 426 | (781) | ||||||
Amortization of Tangible Capital Assets | 427,416 | 424,332 | ||||||
Net Income from Government Business Enterprises | (394,591 | ) | (387,757) | |||||
Profit Distributions from Government Business Enterprises | 369,317 | 356,550 | ||||||
Gain on Disposal of Tangible Capital Assets | (4,161 | ) | (3,330) | |||||
Net Change in Other Items (Note 8) | 747,502 | 125,883 | ||||||
| 1,204,998 | 405,714 | |||||||
Investing Transactions | ||||||||
Repayment of Loans | 358,222 | 468,975 | ||||||
Advances and Investments | (397,716 | ) | (502,123) | |||||
Write-offs | 39,770 | 36,937 | ||||||
| 276 | 3,789 | |||||||
Capital Transactions | ||||||||
Acquisition of Tangible Capital Assets | (458,854 | ) | (466,459) | |||||
Proceeds from Disposal of Tangible Capital Assets | 5,402 | 7,929 | ||||||
| (453,452 | ) | (458,530) | ||||||
Financing Transactions | ||||||||
Debentures Issued | 675,049 | 1,039,848 | ||||||
Repayment of Federal Equalization Repayable Loan | — | (12,032) | ||||||
Amortization of Foreign Exchange Gains | (20,866 | ) | (27,175) | |||||
Sinking Fund Withdrawals (Installments) | (26,309 | ) | 177,719 | |||||
Repayment of Debentures and Other Long-Term Obligations | (1,010,306 | ) | (1,032,054) | |||||
| (382,432 | ) | 146,306 | ||||||
Cash Inflows | 369,390 | 97,279 | ||||||
Cash Position, Beginning of Year | 710,041 | 612,762 | ||||||
Cash Position, End of Year | 1,079,431 | 710,041 | ||||||
Cash Position Represented by: | ||||||||
Cash and Short-Term Investments | 1,079,431 | 710,041 | ||||||
The accompanying notes and schedules are an integral part of these Consolidated Financial Statements
Notes to the Consolidated Financial Statements
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Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
1. Financial Reporting and Accounting Policies
The Province’s consolidated financial statements are prepared in accordance with Canadian public sector accounting standards using the following significant accounting policies:
| (a) | Government Reporting Entity |
The government reporting entity (GRE) is comprised of the General Revenue Fund, other governmental units (GUs), government business enterprises (GBEs), and the Province’s share of government partnership arrangements (GPAs). GUs and GBEs represent the entities that are controlled by the government. Control is defined as the power to govern the financial and operating policies of another organization with expected benefits or the risk of loss to the government from the other organization’s activities. Control exists regardless of whether the government chooses not to exercise its power to govern so long as it has the ability to govern. Control must exist at the financial statement date, without the need to amend legislation or agreements. GPAs represent entities for which decision making and significant risks and benefits are shared with other parties outside of the GRE.
Trusts administered by the Province are excluded from the GRE and are disclosed in Note 12 for information purposes only.
| (b) | Principles of Consolidation |
A GBE is a self-sustaining organization that has the financial and operating authority to sell goods and services to individuals and non-government organizations as its principal activity and source of revenue. GBEs are accounted for on the modified equity basis. Their accounting principles are not adjusted to conform with those of the Province. The total net assets of all GBEs are reported as Investment in Government Business Enterprises on the Consolidated Statement of Financial Position. The total net income from all GBEs is reported as a separate item on the Consolidated Statement of Operations and Accumulated Deficits.
A GPA is a contractual arrangement between the government and a party or parties outside the GRE. The partners have significant clearly defined common goals, make a financial investment in the partnership, share control of decision making, and share, on an equitable basis, the significant risks and benefits associated with the operations of the government partnership. The Province’s interest in partnerships is accounted for using the modified equity method as GPAs do not meet the threshold of materiality and cost-benefit to use the proportionate consolidation method.
A GU is a government organization that is not a GBE or GPA. GUs include government departments, public service units, funds, agencies, boards, commissions, and government not-for-profit organizations and service organizations. The accounts of GUs are consolidated on a line-by-line basis after adjusting the accounting policies to be consistent with those described in Note 1(d). Significant inter-organization balances and transactions are eliminated.
A complete listing of the organizations within the Province’s GRE is provided in Schedule 10.
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Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
1. Financial Reporting and Accounting Policies (continued)
| (c) | Presentation of Estimates |
Each year, the Province prepares an annual budget, referred to as “the Estimates,” which represents the financial plan of the Province presented by the government to the House of Assembly for the fiscal year commencing April 1. The Estimates, forming the basis of the Appropriations Act, are prepared primarily for the management and oversight of the General Revenue Fund based upon the government’s policies, programs, and priorities. Impacts of consolidation are summarized in the Estimates and included on a net basis as Consolidation and Accounting Adjustments.
For consolidation purposes, the Estimates were adjusted on a line-by-line basis to gross up the associated revenues and expenses of the consolidated entities in order to be comparative with these consolidated financial statements.
| (d) | Significant Accounting Policies |
Revenues
Revenues are recorded on the accrual basis. The main components of revenue are various taxes, legislated levies, program recoveries, user fees, and investment income. Revenues from Personal and Corporate Income Taxes, as well as Harmonized Sales Tax and Petroleum Royalties, are accrued in the year earned based upon estimates using statistical models. Tax revenues are recorded at the amount estimated, after considering certain adjustments for non-refundable tax credits and other adjustments from the federal government. Refundable tax credits are not recognized as a reduction of tax revenues. Petroleum Royalties are recorded at the amount estimated and may be reduced by a portion of estimated abandonment costs for the future decommissioning or restoration of offshore field assets.
Government transfers are recognized as revenue in the period during which the transfer is authorized and all eligibility criteria are met, except when and to the extent that the transfer stipulations give rise to an obligation that meets the definition of a liability. Transfers meeting the definition of a liability are recorded as deferred revenue and are recognized as revenue when the funds are used as intended.
Expenses
Expenses are recorded on the accrual basis and are reported in more detail in Note 7, Expenses by Object. Grants and other government transfers are recognized as expenses in the period at the earlier of: 1) the transfer being authorized and all eligibility criteria are met by the recipients, and 2) time of the payment.
Provisions are made for probable losses on certain loans, investments, loan guarantees, accounts receivable, advances, forgivable loans, and for contingent liabilities when it is likely that a liability exists and the amount can be reasonably determined. These provisions are updated as estimates are revised, at least annually.
Financial Assets
Cash and Short-Term Investments are recorded at cost, which approximate market value, and include R-1 (low, middle, high) rated federal and provincial government bills or promissory notes, bankers’ acceptances, term deposits, and commercial paper. Terms of investments are generally 1 to 90 days. The weighted average interest rate of short-term investments was 0.64 per cent at year-end.
Notes to the Consolidated Financial Statements
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Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
1. Financial Reporting and Accounting Policies (continued)
Accounts Receivable are recorded at the principal amount less valuation allowances.
Inventories for Resale are held for sale in the ordinary course of operations and are recorded at the lower of cost and net realizable value.
Loans Receivable are recorded at cost less adjustments for concessionary assistance and any prolonged impairment in value. Concessionary assistance consists of subsidies provided by the Province and is recognized as an expense at the date of issuance of the loan. Any loan write-offs must be approved by the Governor in Council. Loans usually bear interest at approximate market rates and normally have fixed repayment schedules.
Investments are recorded at cost less adjustments for concessionary assistance and any prolonged impairment in value. Concessionary assistance consists of subsidies provided by the Province and is recognized as an expense at the date of investment. Any write-down of an investment to reflect a loss in value is not reversed if there is a subsequent increase in value.
Liabilities
Bank Advances and Short-Term Borrowings have initial maturities of one year or less and are recorded at cost, which approximates market value. At year-end, short-term Canadian dollar borrowings had a weighted average interest rate of 0.57 per cent.
Liabilities for Contaminated Sites are recognized when an existing environmental standard is exceeded, the Province is directly responsible or accepts responsibility, the Province expects to remediate and give up future economic benefits, and a reasonable estimate of the amounts can be made. The liability is measured based on the best estimate of the expenditures required to complete the remediation, net of any expected recoveries. Contaminated sites are a result of any chemical, organic, radioactive material or live organism being introduced directly or via the air into soil, water, or sediment that exceeds an environmental standard.
Deferred Revenue is recorded when funds received are restricted by external parties for a stated purpose, such as a specific program or the purchase of tangible capital assets. Deferred revenue is recognized into revenue over time as the recognition criteria are achieved or is drawn down to reimburse third parties as conditions are met.
Unmatured Debt is comprised of debentures and various loans in Canadian and foreign currencies, as well as capital leases. Debt is recorded at par, net of sinking funds, which include the Public Debt Management Funds.
Hedge accounting is used when financial instruments form a hedging relationship, the relationship is highly effective, and it is considered to be consistent with the Province’s financial risk management goals. To have reasonable assurance of the effectiveness of a hedging relationship, the Province must expect the relationship to be effective in achieving offsetting changes in the fair value or cash flows of the hedged item and the hedging item. Effectiveness requires a high correlation of changes in fair values or cash flows. To ensure hedge effectiveness, the Province employs non-speculative derivatives that match the critical terms of the underlying hedged item.
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Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
1. Financial Reporting and Accounting Policies (continued)
Hedging relationships include synthetic instruments, which involve relationships between two or more assets or liabilities with matching terms for the purpose of emulating the net cash flows or other characteristics of a single asset or liability. Synthetic instrument accounting is used to account for the assets and liabilities in a synthetic instrument relationship as though they were the item being emulated.
Sinking Fund and Public Debt Management Fund investments are recorded at cost and consist primarily of debentures of the Province of Nova Scotia, other provincial governments, and the Government of Canada. Premiums and discounts on sinking funds are deferred and amortized over the life of the investment. Amortization and realized gains and losses for premiums and discounts relating to sinking fund balances and installments are netted against sinking fund earnings.
Unamortized Foreign Exchange Translation Gains and Losses result when debentures payable in foreign currencies and sinking funds invested in foreign currencies are translated into Canadian dollars at the rate of exchange in effect at March 31 and upon entering into derivative contracts. Foreign exchange gains and losses on the translation of foreign currency are amortized on a straight-line basis over the remaining term of the related monetary item.
Premiums and Discounts, as well as underwriting commissions relating to the issuance of debentures, are deferred and amortized over the term of the related debt. Amortization and realized foreign exchange gains and losses, premiums and discounts relating to debt balances, serial retirements, sinking fund balances, and installments are charged to debt servicing costs except as noted above.
Pension, Retirement and Other Obligations include various employee future benefit plans, including accumulated sick leave benefits, where responsibility for the provision of benefits rests with the Province. Liabilities for these plans are calculated using the projected benefit actuarial method using accounting assumptions that reflect the Province’s best estimates of performance over the long term. The projected benefit actuarial method attributes the estimated cost of benefits to the periods of employee service. The net liability represents accrued employee benefits less the market related value of plan assets (if applicable) and the balance of unamortized experience gains and losses. The market related values are determined in a rational and systematic manner so as to recognize asset market value gains and losses over a five-year period.
Contingent Liabilities, including provisions for losses on loan guarantees, are potential obligations that may become actual liabilities when one or more future events occur or fail to occur. If the future event is likely, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements. In cases where an accrual is made, but exposure exists beyond the amount accrued, this excess exposure would also be disclosed, unless the impact is immaterial or the disclosure would have an adverse effect on the outcome of the contingency.
Net Debt
Net Debt represents the total liabilities of the Province less its financial assets. Net debt is the accumulation of current and past annual surpluses and deficits and net investments in non-financial assets.
Notes to the Consolidated Financial Statements
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Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
1. Financial Reporting and Accounting Policies (continued)
Non-Financial Assets
Tangible Capital Assets have useful lives extending beyond the accounting period, are held for use in the production and supply of goods and services, and are not intended for sale in the ordinary course of operations. They are recorded at gross historical cost (or estimated cost when the actual cost is unknown) and include all costs directly attributable to the acquisition, construction, development, and installation of the tangible capital asset, except interest. Tangible capital assets include land, buildings, major equipment and software, vehicles, ferries, roads, highways, and bridges.
Tangible capital assets do not include intangibles or assets acquired by right, such as forests, water, and mineral resources, or works of art and historical treasures. Tangible capital assets are amortized to expense over the useful lives of the assets. The amortization methods and rates applied by the other governmental units are not adjusted to the methods and rates used by the General Revenue Fund.
Inventories of Supplies are held for consumption or use by the Province in the course of its operations and are recorded at the lower of cost and current replacement cost.
Prepaid Expenses are cash disbursements for goods or services, other than tangible capital assets and inventories of supplies, that will provide economic benefits in one or more future periods. The prepaid amount is recognized as an expense in the year the good or service is used or consumed.
Accumulated Deficits
Accumulated Deficits represent the total liabilities of the Province less financial assets and non-financial assets. This represents the cumulative balance of net surpluses and deficits arising from the operations of the Province.
| (e) | Measurement Uncertainty |
Uncertainty in the determination of the amount at which an item is recorded in the financial statements is known as measurement uncertainty. Many items are measured using management’s best estimates based on assumptions that reflect the most probable set of economic conditions and planned courses of action. Uncertainty exists whenever estimates are used because it is reasonably possible that there could be a material difference between the recognized amount and another reasonably possible amount.
Measurement uncertainty exists in the accruals for such items as pension, retirement and other obligations, liabilities for contaminated sites, and federal and provincial source revenues. The nature of the uncertainty in the accruals for pension, retirement and other obligations arises because actual results may differ significantly from the Province’s various assumptions about plan members and economic conditions in the marketplace. Uncertainty exists in the liabilities for contaminated sites because the actual extent of the remediation activities, methods, and site contamination may differ significantly from the Province’s original remediation plans.
Uncertainty related to Income and Sales Taxes, petroleum royalties, Canada Health Transfer, and Canada Social Transfer arises because of the possible differences between the estimated and actual economic growth and other assumptions used in statistical models to accrue these revenues.
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Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
1. Financial Reporting and Accounting Policies (continued)
| (f) | Future Changes in Accounting Policies |
The Public Sector Accounting Board (PSAB) of the Chartered Professional Accountants of Canada has issued new accounting standards with the following effective dates:
Effective April 1, 2017
PS 2200 Related Party Disclosures - defines related parties and establishes disclosure requirements for related party transactions
PS 3210 Assets - provides guidance for applying the definition of assets and establishes general disclosure requirements for assets
PS 3320 Contingent Assets - defines and establishes disclosure requirements for contingent assets
PS 3380 Contractual Rights - defines and establishes disclosure requirements for contractual rights
PS 3420 Inter-Entity Transactions - provides guidance for accounting and reporting transactions between public sector entities within a government’s reporting entity
Effective April 1, 2018
PS 3430 Restructuring Transactions - defines restructuring transactions and provides guidance on recognition and measurement of assets and liabilities transferred in a restructuring transaction
Effective April 1, 2019
PS 1201 Financial Statement Presentation - replaces PS 1200 with general reporting principles for disclosure of information and is effective in the period PS 2601 and PS 3450 are adopted
PS 2601 Foreign Currency Translation - replaces PS 2600 with revised accounting and reporting principles for transactions that are denominated in a foreign currency
PS 3041 Portfolio Investments - replaces PS 3040 with revised accounting and reporting principles for portfolio investments and is effective in the period PS 2601 and PS 3450 are adopted
PS 3450 Financial Instruments - defines and provides guidance for accounting and reporting all types of financial instruments including derivatives
PSAB has agreed to review certain sections of PS 1201 and PS 3450, including a potential option for hedge accounting, by April 1, 2019.
These new accounting standards have not been applied in preparing the Province’s consolidated financial statements. The Province is currently assessing the impact of these standards, and the extent of the impact of the adoption of the standards on the consolidated financial statements has not yet been determined.
Notes to the Consolidated Financial Statements
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Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
2. Accounting Changes
During the year, the Province discovered that the retirement health benefit liabilities for three of its entities were overstated in past years as part of Pension, Retirement and Other Obligations on the Consolidated Statement of Financial Position. The employee population data for the Nova Scotia Utility and Review Board, Nova Scotia Innovation Corporation, and Nova Scotia Liquor Corporation were inadvertently included in the Province’s actuarial calculations in addition to being included as part of the consolidation of those separate entities. As a result of this correction, the opening accumulated deficits in 2016 decreased by $23.5 million, pension valuation adjustment increased by $3.3 million, debt servicing costs decreased by $0.8 million, and the provincial deficit increased by $2.5 million. The current year impact was a decrease of $20.9 million to opening accumulated deficits with a corresponding decrease in net debt.
| ($ thousands) | 2017 | 2016 | ||||||||||||||||||||
| | Net Debt April 1, 2016 | | | Accumulated Deficits April 1, 2016 |
| | Provincial Deficit | | | Net Debt April 1, 2015 | | | Accumulated Deficits April 1, 2015 |
| ||||||||
Correction to Retirement Health Benefits Liability | 20,932 | 20,932 | (2,543 | ) | 23,475 | 23,475 | ||||||||||||||||
3. Restricted Assets
As at March 31, 2017, assets of $70.7 million (2016 – $56.7 million) were designated for restricted purposes by parties external to the Province. Restricted cash and short-term investments totaled $9.9 million (2016 – $18.7 million) and comprised: $2.6 million (2016 – $13.7 million) for Nova Scotia Health Authority (NSHA) Centre for Clinical Research, $4.3 million (2016 – $3.1 million) for gas market development as part of the Nova Scotia Market Development Initiative Fund, $1.5 million (2016 – $1.0 million) for endowment and scholarship funds, and $1.5 million (2016 – $0.9 million) for various other purposes.
Restricted investments totaled $60.8 million (2016 – $38.0 million) and comprised: $44.9 million (2016 – $24.6 million) for NSHA Centre for Clinical Research and other NSHA purposes, $13.1 million (2016 – $10.7 million) for endowment funds, and $2.8 million (2016 – $2.7 million) for various other purposes.
Externally restricted inflows not spent by year-end create a liability that will be settled by using the restricted assets for their intended purposes. The restricted assets described in this note are segregated from other assets and will be used as prescribed in a future period.
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Notes to the Consolidated Financial Statements
As at March 31, 2017
4. Deferred Revenue
| ($ thousands) | 2017 | 2016 | ||||||
Housing Nova Scotia – Social Housing Agreement and Other Federal Funding | 57,506 | 49,486 | ||||||
Nova Scotia Health Authority – Capital and Research Funds | 48,513 | 47,141 | ||||||
Provincial-Territorial Base Funding Agreement – Infrastructure and Highways | 36,200 | 41,210 | ||||||
Izaak Walton Killam Health Centre – Capital and Research Funds | 35,673 | 31,732 | ||||||
Resource Recovery Fund Board Inc. – Unearned Revenue from Container | 19,592 | 17,974 | ||||||
Nova Scotia Community College | 17,069 | 13,294 | ||||||
Halifax Regional School Board | 7,274 | 5,017 | ||||||
Seniors Pharmacare | 6,965 | 5,029 | ||||||
Elmworth Energy Corporation – Kennetcook Project | 4,025 | — | ||||||
Annapolis Valley Regional School Board | 3,755 | 2,263 | ||||||
Waterfront Development Corporation Limited | 3,097 | 3,427 | ||||||
Trade Centre Limited | 2,958 | 3,029 | ||||||
Public Archives of Nova Scotia | 2,314 | 2,296 | ||||||
Other Externally Restricted Funds | 13,940 | 13,151 | ||||||
Total Deferred Revenue | 258,881 | 235,049 | ||||||
5. Pension, Retirement and Other Obligations
The Province offers a variety of pension and other retirement, post-employment, compensated absences (accumulated sick leave), and special termination benefits. Most plans are unfunded and are economically dependent on the Province. Except as otherwise noted, the cost of benefits are recognized in the periods the employee provides service. For benefits that do not vest or accumulate, a liability is recognized when an event that obligates the Province to pay benefits occurs.
| (a) | Description of Obligations |
Pension Benefit Plans
The Province participates in two funded pension plans, the Nova Scotia Public Service Superannuation Plan (PSSP) and the Nova Scotia Teachers’ Pension Plan (TPP). Both plans are defined benefit plans with plan assets primarily composed of Canadian and foreign equities, government and corporate bonds, debentures, secured mortgages, and real estate. The plans are jointly funded with contributions from employees being matched by the Province. Benefits paid upon retirement are based on an employee’s length of service, rate of pay, and inflation adjustments.
On April 1, 2013, the PSSP transitioned to a joint governance structure where the Minister of Finance transferred responsibility for the PSSP to the Public Service Superannuation Plan Trustee Inc. (PSSPTI), the new trustee of the PSSP. PSSPTI is a body corporate comprised of 13 board members – six representing the Province as the employer, six representing the employees, and an independent chairperson. Due to this change, the Province no longer has any residual liability for the PSSP and therefore does not record PSSP assets or liabilities in these consolidated financial statements. The Province’s pension expense for the PSSP is limited to the employer contributions paid to the PSSP, which are equal to the employee contributions. The contribution rate is set by PSSPTI pursuant to the legislated funding policy and is set for a five-year cycle.
Notes to the Consolidated Financial Statements
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Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
5. Pension, Retirement and Other Obligations (continued)
As at December 31, 2016, the PSSP was 102.8 per cent funded. Indexing of 0.85 per cent per year was previously approved for January 1, 2016 to December 31, 2020 and no changes to member and employer plan contributions were made. The Province’s employer contributions to the PSSP in 2017 were $81.8 million (2016 – $82.2 million).
On April 1, 2006, the Minister of Finance transferred responsibility for the governance of the Nova Scotia Teachers’ Pension Plan to the Teachers’ Pension Plan Trustee Inc. (TPPTI). TPPTI is a body corporate comprised of nine board members – four nominated by the Nova Scotia Teachers’ Union, four nominated by the Province, and one Chair agreed to by both parties. As a result of this transfer, the Province and Union agreed to share all surpluses and deficits of the plan equally. The Province accounts for one-half of all components of the accrued benefit liability associated with this plan in these consolidated financial statements. In addition, the Province recognizes one-half of components associated with the net benefit plans expense associated with this plan. As at March 31, 2017, the total accrued benefit liability associated with this plan was $638.5 million (2016 – $590.6 million).
As at December 31, 2016, the TPP’s funded ratio was 77.7 per cent. Section 27B(3)(a) of the TPP Regulations stipulates that when the most recent actuarial valuation shows an actuarial deficit of more than 10.0 per cent, no indexing shall be provided to those pensioners under the variable indexing provision (those who retire on or after August 1, 2006, and those who retired prior to August 1, 2006 but elected to participate in the variable indexing provision). In accordance with Regulation 27C(1), the Province contributed an additional $10.1 million to the TPP in 2017 based on the actuarial present value of the forgone indexing as determined by the Plan’s actuary. During the year, the weighted average actual rate of return on plan assets of the TPP was 11.2 per cent (2016 – -1.2 per cent). The total market value of plan assets at March 31, 2017 was $4.9 billion (2016 – $4.7 billion). The liability for TPP benefits recorded in 2017 was based on the most recent actuarial valuation performed at December 31, 2015 and extrapolated to March 31, 2017.
The Province has several other unfunded defined benefit pension plans. Benefits paid upon retirement are based on an employee’s length of service, rate of pay, and inflation adjustments. The liabilities for these other pension benefit plans recorded in 2017 were based on the most recent actuarial valuations performed between September 30, 2014 and December 31, 2015 and extrapolated to March 31, 2017.
Employees in the health sector are members of a multi-employer defined benefit pension plan. As the Province does not sponsor this plan, the annual net benefit plan expense is the amount of required contributions provided for employees’ services rendered during the year. The accrued benefit asset (liability) of this plan is not recognized in these consolidated financial statements. The most recent actuarial valuation was performed at July 1, 2014 and extrapolated to December 31, 2016, which indicated a funding surplus of $1.72 billion (2016 – $1.60 billion). The Province’s employer contributions to this multi-employer plan in 2017 were $96.8 million (2016 – $97.1 million).
Other Retirement Benefits
The Province sponsors two other unfunded retirement benefits: retirement allowances and retirement health plan benefits. Benefits paid upon retirement for retirement allowances are based on an employee’s length of service and rate of pay. Retirement health plan benefits vary depending on the collective agreements negotiated with each group. The Province pays 83 65.0 per cent and 100.0 per cent of the cost of retirement health plan benefits for the PSSP and TPP retirees, respectively.
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Notes to the Consolidated Financial Statements
As at March 31, 2017
5. Pension, Retirement and Other Obligations (continued)
Effective April 1, 2015, the Province discontinued its retirement allowance plans for non-bargaining unit staff. As part of contract negotiations, the Province proposed the withdrawal of its retirement allowance plans for unionized staff effective April 1, 2015, and no new members will be admitted into the plans. The payment of retirement allowances will be deferred until retirement and will be calculated based on accumulated service as of April 1, 2015, or as of the first day of a new collective agreement for those contracts expiring after that date, and salary upon retirement. The Province reflected the discontinuation of these retirement allowances for both unionized and non-bargaining unit staff in the previous year. The Province expects these benefit changes for unionized staff to be ratified in the near future during contract negotiations. The discontinuation does not apply to a person who is entitled to receive a service award under the Public Service Award Regulations made under the Provincial Court Act.
The liabilities for these other retirement benefit plans recorded in 2017 were based on the most recent actuarial valuations performed between March 31, 2014 and September 30, 2016 and extrapolated to March 31, 2017.
Post-Employment Benefits
The Province offers a Self-Insured Workers’ Compensation Plan. For this plan, the amount recorded in these financial statements represents the actual amount of benefits paid during the year plus the actuarial estimate of future payments based on claims ongoing at year-end. The liability for this post-employment benefit plan recorded in 2017 was based on an actuarial valuation performed at March 31, 2017.
The Province also participates in the Nova Scotia Public Service Long Term Disability Plan (LTD Plan). The Province has no residual responsibility to the LTD Plan for any shortfalls in funding. As a result, the Province does not account for any net position of the LTD Plan in these consolidated financial statements. The LTD Plan is managed and administered, under joint trusteeship, by a Board of Trustees appointed by the two plan Sponsors: the Province and the Nova Scotia Government and General Employees Union (NSGEU). The LTD Plan is funded equally by employer and employee contributions and all liability for benefits resides exclusively with the LTD Plan’s trust fund. The most recent actuarial valuation was performed at December 31, 2016, which indicated a funded ratio of 186.0 per cent. The Province’s employer contributions to this plan in 2017 were $6.5 million (2016 – $6.5 million).
Accumulated Sick Leave Benefits
The Province’s Regional School Boards, Health Authorities, and Nova Scotia Community College have collective agreements containing sick leave provisions that accumulate but do not vest. Under Public Sector Accounting Standards, governments must measure and record an obligation associated with the accumulated sick leave benefits (ASLBs) that are anticipated to be used in future years. The Province’s ASLBs are unfunded, meaning there are no assets set aside to cover the related costs of these benefits in the future.
Due to the nature of these benefits, a liability and expense are measured using actuarial valuations to estimate their financial value. An actuarial assumption must be developed to reflect the probability of employees actually using ASLB “banked days”. This involves a detailed analysis of several years of data to determine historical usage. A historical usage pattern is not based on the data group as a whole but must take into account a number of specific factors such as, but not limited to, gender, age, and type of contract or job functions, each of which may impact the anticipated amount of accumulated sick leave time to be taken in
Notes to the Consolidated Financial Statements
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Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
5. Pension, Retirement and Other Obligations (continued)
the future. As a result, the anticipated usage assumption may involve a number of criteria and circumstances that then must be applied to the data in coordination with other actuarial assumptions such as discount rate, retirement assumptions, future salary increases, mortality rates, etc.
The liabilities for ASLBs recorded in 2017 were based on the most recent actuarial valuations performed between March 31, 2014 and March 31, 2015 and extrapolated to March 31, 2017.
Special Termination Benefits
The Province has offered early retirement incentive programs to members of the PSSP and TPP at various times commencing in 1986 and 1994, respectively. Qualified members were offered additional years of pensionable service if they elected to retire early. The cost of these benefits was accrued in the year the employee accepted the early retirement option and continue to be calculated using actuarial valuations. The liabilities for special termination benefits recorded in 2017 were based on the most recent actuarial valuations performed at December 31, 2015 and extrapolated to March 31, 2017.
(b) Summary of Balances at Year-End
| ($ thousands) | 2017 | 2016 | ||||||||||||||
| Pension Benefits | Other Benefits | Total | Total | |||||||||||||
| (as restated) | ||||||||||||||||
Projected Benefit Obligation, | 3,480,753 | 2,061,496 | 5,542,249 | 5,422,536 | ||||||||||||
Current Benefit Cost | 72,021 | 71,789 | 143,810 | 142,726 | ||||||||||||
Interest Cost | 213,456 | 74,393 | 287,849 | 293,704 | ||||||||||||
Actuarial (Gains) Losses | 68,252 | (23,228 | ) | 45,024 | (9,449) | |||||||||||
Benefit/Premium Payments | (226,017 | ) | (96,068 | ) | (322,085) | (330,735) | ||||||||||
Other | 693 | 1,475 | 2,168 | (218) | ||||||||||||
Curtailment | — | — | — | 24,207 | ||||||||||||
Plan Amendments | — | — | — | (522) | ||||||||||||
Projected Benefit Obligation, | ||||||||||||||||
End of Year | 3,609,158 | 2,089,857 | 5,699,015 | 5,542,249 | ||||||||||||
Market Related Value of Plan Assets, | ||||||||||||||||
Beginning of Year | 2,545,296 | — | 2,545,296 | 2,475,230 | ||||||||||||
Expected Return on Plan Assets | 160,137 | — | 160,137 | 160,212 | ||||||||||||
Actuarial Gains | 49,880 | — | 49,880 | 3,179 | ||||||||||||
Benefit Payments | (226,017 | ) | — | (226,017) | (331,151) | |||||||||||
Other | 794 | — | 794 | 899 | ||||||||||||
Employer Contributions | 81,662 | — | 81,662 | 188,280 | ||||||||||||
Employee Contributions | 52,484 | — | 52,484 | 48,647 | ||||||||||||
Market Related Value of Plan Assets, | ||||||||||||||||
End of Year | 2,664,236 | — | 2,664,236 | 2,545,296 | ||||||||||||
Funded Status, End of Year | (944,922 | ) | (2,089,857 | ) | (3,034,779) | (2,996,953) | ||||||||||
Unamortized Net Actuarial (Gains) Losses | 274,246 | (30,902 | ) | 243,344 | 278,608 | |||||||||||
Accrued Benefit Liability, | ||||||||||||||||
End of Year | (670,676 | ) | (2,120,759 | ) | (2,791,435) | (2,718,345) | ||||||||||
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Notes to the Consolidated Financial Statements
As at March 31, 2017
5. Pension, Retirement and Other Obligations (continued)
| (c) | Actuarial Assumptions |
The table below shows significant assumptions used to measure pension and other benefit plan obligations.
| 2017 | 2016 | |||||||||||||||||
| Pension Benefits | Other Benefits | Pension Benefits | Other Benefits | |||||||||||||||
Long-term inflation rates | 2.00% | 2.00% | 2.00% | 2.00% | ||||||||||||||
Expected real rate of return on plan assets: | ||||||||||||||||||
TPP | 4.41% | 4.61% | ||||||||||||||||
Rate of compensation increase | 0.00% to | 0.00% to | 0.00% to | 0.00% to | ||||||||||||||
| 2.00% | 2.00% | 2.00% | 2.00% | |||||||||||||||
| + merit | + merit | + merit | + merit | |||||||||||||||
Discount rates: | ||||||||||||||||||
TPP | 6.50% | 6.70% | ||||||||||||||||
Other Plans | 3.59% | 3.71% | ||||||||||||||||
Other assumptions
7.0 per cent annual rate increase in the cost per person for covered healthcare benefits in 2016-17, decreasing to an ultimate rate of 4.5 per cent per year over 15 years.
7.0 per cent annual rate increase in the cost per person for covered prescription drugs in 2016-17, decreasing to an ultimate rate of 4.5 per cent per year over 15 years.
Actuarial assumptions are reviewed and assessed on a regular basis to ensure that the accounting assumptions take into account various changing conditions and reflect the Province’s best estimate of performance over the long term.
The net unamortized actuarial gains (losses) are amortized on a straight-line basis over the expected average remaining service life (EARSL) of the related employee groups ranging from 5 years to 17 years. The Province’s weighted-average EARSL is 15 years.
Notes to the Consolidated Financial Statements
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Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
5. Pension, Retirement and Other Obligations (continued)
| (d) | Net Benefit Plans Expense |
The table below shows the components of the net benefit plans expense.
| ($ thousands) | 2017 | 2016 | ||||||||
| Pension Benefits | Other Benefits | Total | Total | |||||||
| (as restated) | ||||||||||
Current Benefit Cost | 72,021 | 71,789 | 143,810 | 142,726 | ||||||
Employee Contributions | (52,484) | (15) | (52,499) | (48,662) | ||||||
Employer Contributions * | 51,202 | — | 51,202 | 48,990 | ||||||
Plan Amendments | — | — | — | (522) | ||||||
Curtailment | — | — | — | 24,207 | ||||||
Amortization of Net Actuarial | ||||||||||
(Gains) Losses | 32,626 | (715) | 31,911 | 41,719 | ||||||
Recognition of Actuarial Losses on | ||||||||||
Plan Amendments | — | — | — | 554 | ||||||
Curtailment | — | — | — | 73,103 | ||||||
Settlement | — | — | — | (129) | ||||||
Other | 244 | (283) | (39) | (501) | ||||||
Interest Cost | 213,456 | 74,393 | 287,849 | 293,704 | ||||||
Expected Return on Plan Assets | (160,137) | — | (160,137) | (160,212) | ||||||
Employer Contributions to | ||||||||||
Multi-Employer Plan | 178,661 | 6,511 | 185,172 | 185,751 | ||||||
Net Benefit Plans Expense | 335,589 | 151,680 | 487,269 | 600,728 | ||||||
Recorded as: | ||||||||||
Fringe Benefits Expense | 277,637 | 64,729 | 342,366 | 325,408 | ||||||
Pension Valuation Adjustment | 4,633 | 12,558 | 17,191 | 141,828 | ||||||
Net Pension Interest Cost | 53,319 | 74,393 | 127,712 | 133,492 | ||||||
Net Benefit Plans Expense | 335,589 | 151,680 | 487,269 | 600,728 | ||||||
| * | This represents one-half of the employer contributions made by the Province to the TPP. Included in the figures above are one-half of all transactions associated with TPP to reflect the Province’s share of this plan under joint trusteeship. |
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Notes to the Consolidated Financial Statements
As at March 31, 2017
6. Debt Servicing Costs
| ($ thousands) | 2017 | 2016 | ||
| (as restated) | ||||
CDN$ Denominated Debt | 711,646 | 737,341 | ||
Pension, Retirement and Other Obligations | 127,712 | 133,492 | ||
Capital Leases | 9,386 | 11,262 | ||
Other Debt | 8,438 | 10,175 | ||
Amortization of Premiums and Discounts on Unmatured Debt | 426 | (781) | ||
Amortization of Foreign Exchange Gains | (20,594) | (22,957) | ||
Total Debt Servicing Costs | 837,014 | 868,532 | ||
Total debt servicing costs for the Province’s government business enterprises were $7.2 million (2016 – $7.3 million) for the year ended March 31, 2017.
7. Expenses by Object
| ($ thousands) | 2017 | 2016 | ||||||
| (as restated) | ||||||||
Grants and Subsidies | 3,961,168 | 3,715,025 | ||||||
Salaries and Employee Benefits | 3,907,170 | 4,043,023 | ||||||
Operating Goods and Services | 1,674,484 | 1,622,327 | ||||||
Professional Services | 267,307 | 275,293 | ||||||
Amortization | 427,416 | 424,332 | ||||||
Debt Servicing Costs | 837,014 | 868,532 | ||||||
Other | 4,147 | 2,219 | ||||||
Total Expenses by Object | 11,078,706 | 10,950,751 | ||||||
8. Cash Flow — Net Change in Other Items
| ($ thousands) | 2017 | 2016 | ||
| (as restated) | ||||
Increase in Receivables from Government Business Enterprises | (1,999) | (4,054) | ||
Increase in Accounts Receivable | (70,970) | (58,895) | ||
Increase in Short-Term Borrowings and Accounts Payable | 721,758 | 31,845 | ||
Decrease in Inventories for Resale | 3,421 | 313 | ||
Increase in Assets Held for Sale | (1,552) | — | ||
Increase in Inventories of Supplies | (2,130) | (14,661) | ||
Decrease (Increase) in Prepaid Expenses | 3,897 | (3,472) | ||
Increase (Decrease) in Deferred Revenue | 23,832 | (3,718) | ||
Increase (Decrease) in Accrued Interest | (1,845) | 978 | ||
Increase in Pension, Retirement and Other Obligations | 73,090 | 177,547 | ||
Total Net Change in Other Items | 747,502 | 125,883 | ||
Notes to the Consolidated Financial Statements
|
Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
9. Contaminated Sites
Various provincially owned properties throughout the province are considered environmental or contaminated sites. Studies are ongoing to assess the nature and extent of damage to develop remediation plans. Provisions for these costs are recorded when it is determined a liability exists and a reasonable estimate of the remediation costs can be made. As at March 31, 2017, a total liability for contaminated sites of $212.2 million (2016 – $171.7 million) has been recorded in Accounts Payable and Accrued Liabilities.
Engineering and environmental studies generated estimates for the cost of remediation of the Sydney Steel Corporation (SYSCO) and adjacent sites as well as the Sydney Tar Ponds/Coke Ovens site. As a result, the Province recorded liabilities totaling $318.5 million in 2000 for environmental site clean-up. At March 31, 2017, $68.1 million (2016 – $70.8 million) remains unspent. This provision will continue to be utilized for future decommissioning, demolition, and remediation of SYSCO’s and adjacent sites, including the long-term maintenance and monitoring of the Sydney Tar Ponds/Coke Ovens site. Based on currently available information, the provision, in aggregate, appears sufficient to cover the future estimated costs to remediate these sites.
Other remediation liabilities amounting to $144.2 million (2016 – $100.9 million) have also been recognized, and include $130.2 million (2016 – $88.5 million) for the remediation of Boat Harbour in Pictou County. The Province’s estimate for the removal of effluent is based on environmental studies, engineering reports, and extrapolation techniques similar to those that have been used at other contaminated sites with which the Province was involved. At this stage in the process, the Province continues to test and refine its current remediation strategy, and as a result there is still significant measurement uncertainty related to this estimate. A comprehensive remediation plan is expected to be finalized within the next three to four years.
The Province has identified various other sites where contamination is known or expected to exceed an environmental standard, and those which may contain certain levels of contamination but the extent is unknown. No liability for remediation of these sites has been recognized in these consolidated financial statements as there is either no basis for a reasonable estimate or the Province does not expect to give up any future economic benefits. In some cases, a risk-based remediation plan is being pursued to address any known safety hazards. Studies are ongoing to assess the nature and extent of damage and to develop remediation plans, if necessary. The Province may record a liability in the future if contamination at any of these sites is determined to exceed an environmental standard and a reasonable estimate of the related remediation costs can be made.
10. Contingencies and Contractual Obligations
| (a) | Contingent Liabilities |
Lawsuits
The Province is involved in various legal proceedings arising from government activities. These disputes have resulted from breaches of contract, damages suffered by individuals or property, and related elements. These claims include items with pleading amounts and items where an amount is not specified. While the total amount claimed in these actions may be significant, their outcomes are not certain.
When a liability is determined to likely exist and the amount can be reasonably estimated, the amount is recorded as an accrued liability and an expense. The accrued liability for pending litigation in process at March 31, 2017 was $29.9 million (2016 – $32.2 million).
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Notes to the Consolidated Financial Statements
As at March 31, 2017
| 10. | Contingencies and Contractual Obligations (continued) |
Guarantees
Guarantees by the Province are authorized by various acts of legislature and provided through specific agreements and programs to repay promissory notes, bank loans, lines of credit, mortgages, and other securities. Provisions for losses on guarantees are recorded when it is likely that a loss will occur. The amount of the loss provisions represents the Province’s best estimate of future payments. Estimates take into consideration the nature of the loan guarantees, loss experience, and current conditions. The provisions are reviewed on an ongoing basis and changes in the provisions are recorded as expenses in the year they become known. Details on guarantees authorized, utilized, and accrued are presented in Schedule 8.
Other Contingent Liabilities
The Province also has contingent liabilities in the form of indemnities. The Province’s potential liability, if any, cannot be determined at this time.
| (b) | Contingent Gains |
The Province may receive funds in the future from recoveries of various types of claims paid out and other agreements pending the occurrence of certain events. Recoveries are recorded once the contingent events occur, are measurable, and collectability is reasonably assured.
| (c) | Contractual Obligations |
As at March 31, 2017, the Province has contractual obligations as follows:
| ($ thousands) | Government | Total | ||||||||||
| Governmental | Business | Contractual | ||||||||||
| Fiscal Year | Units | Enterprises | Obligations | |||||||||
2018 | 1,132,615 | 27,816 | 1,160,431 | |||||||||
2019 | 855,699 | 5,498 | 861,197 | |||||||||
2020 | 464,680 | 1,739 | 466,419 | |||||||||
2021 | 562,816 | 1,722 | 564,538 | |||||||||
2022 | 399,787 | 1,600 | 401,387 | |||||||||
2023 to 2027 | 1,819,513 | — | 1,819,513 | |||||||||
2028 to 2032 | 1,848,386 | — | 1,848,386 | |||||||||
2033 to 2037 | 800,716 | — | 800,716 | |||||||||
2038 and thereafter | 65,724 | — | 65,724 | |||||||||
| 7,949,936 | 38,375 | 7,988,311 | ||||||||||
These contractual obligations are comprised of $7,632.4 million from the General Revenue Fund, $317.5 million from the Province’s governmental units, and $38.4 million from the government business enterprises. Included are contractual obligations from the Department of Health and Wellness of $3,485.7 million for service agreements with long-term care facilities and $124.1 million for the management of the ground ambulance fleet, $2,197.5 million from the Department of Justice for Royal Canadian Mounted Police (RCMP) policing services, $656.5 million from the Department of Labour and Advanced Education for university assistance, $162.7 million from the Department of Education and Early Childhood Development for their commitment to exercise the purchase option on several P3 schools, $134.3 million from Halifax Regional School Board for transportation services, and $128.8 million from Nova Scotia Business Inc. for projects approved under various programs.
Notes to the Consolidated Financial Statements
|
Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
| 10. | Contingencies and Contractual Obligations (continued) |
Leases
As at March 31, 2017, the Province was contractually obligated under various operating leases. Future minimum annual lease payments are as follows:
| ($ thousands) | Government | Total | ||||||||||
| Governmental | Business | Lease | ||||||||||
| Fiscal Year | Units | Enterprises | Payments | |||||||||
2018 | 75,453 | 11,115 | 86,568 | |||||||||
2019 | 60,201 | 13,402 | 73,603 | |||||||||
2020 | 49,854 | 12,554 | 62,408 | |||||||||
2021 | 37,879 | 11,306 | 49,185 | |||||||||
2022 | 26,770 | 9,554 | 36,324 | |||||||||
2023 to 2027 | 39,941 | 17,780 | 57,721 | |||||||||
2028 to 2032 | 2,245 | — | 2,245 | |||||||||
| 292,343 | 75,711 | 368,054 | ||||||||||
11. Risk Management and Use of Derivative Financial Instruments
As a result of borrowing in both Canadian and foreign financial markets and being a party to financial instruments, the Province is exposed to interest rate risk, foreign exchange risk, credit risk, and liquidity risk. The Province employs various risk management strategies and operates within fixed risk exposure limits to ensure exposure to risk is managed in a prudent and cost effective manner. A variety of strategies are used, including the use of derivative financial instruments (derivatives). Derivatives are financial contracts, the value of which is derived from underlying instruments. The Province uses derivatives to hedge and to mitigate foreign exchange risk and interest rate risk. The Province does not use derivatives for speculative purposes.
Interest rate risk
Interest rate risk is the risk that debt servicing costs will vary unfavourably due to fluctuations in interest rates. To reduce its exposure to interest rate risk, the Province uses derivatives to manage the fixed and floating interest rate mix of its debt portfolio. Interest rate contracts include swap agreements and options on swaps. These contracts are used to vary the amounts and periods for which interest rates on borrowings are fixed or floating.
As at March 31, 2017, the Province has executed 38 interest rate swap contracts to convert certain interest payments from fixed to floating. These swaps have terms remaining of 0.2 years to 14.6 years, a notional principal value of $1.1 billion, and a negative mark to market value of -$10.2 million.
Credit risk
Credit risk is the risk that a counterparty will default on its contractual obligations. The Province manages its credit risk exposure from derivatives by, among other activities, dealing only with high credit quality counterparties and regularly monitoring compliance to credit limits. The Province’s policy requires that a minimum credit rating for counterparties to derivative transactions be “A” with a stable outlook as determined by the major credit rating agencies.
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Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
11. Risk Management and Use of Derivative Financial Instruments (continued)
Liquidity risk
Liquidity risk is the risk that the Province will not be able to meet its financial commitments over the short term. To reduce liquidity risk, the Province maintains liquid reserves (cash and cash equivalents) at levels that will meet future cash requirements and will give the Province flexibility in the timing of issuing debt. In addition, the Province has a short-term note program, uncommitted bank lines, and discretionary sinking funds as alternative sources of liquidity. This risk is also managed by distributing debt maturities over many years and having up to 50.0 per cent of long-term debt with a maturity of over 15 years.
Foreign exchange risk
Foreign exchange risk is the risk that the cash flows needed to repay the interest and principal on loans in foreign currencies will vary due to fluctuations in foreign exchange rates. To manage this risk, the Province uses derivative contracts to convert foreign currency principal and interest cash flows into Canadian dollar denominated cash flows. Derivative contracts hedge the underlying debt by matching the critical terms to achieve effectiveness. Foreign exchange contracts include swap agreements that are used to convert the liability for foreign currency borrowing and associated costs into Canadian dollars.
The Province has currency swap contracts which convert foreign denominated debt into Canadian dollar denominated debt as follows:
($ thousands)
| ||||||||||||||||
Termination Date | Original Currency | Original Principal | Current Currency | Current Principal | Mark to Market 1 | |||||||||||
April 16, 2019 | UK£ | 60,000 | CDN$ | 114,387 | (17,046) | |||||||||||
February 1, 2019 | US$ | 200,000 | CDN$ | 198,000 | 64,922 | |||||||||||
July 1, 2019 | US$ | 200,000 | CDN$ | 199,900 | 56,923 | |||||||||||
November 15, 2019 | US$ | 244,000 | CDN$ | 246,318 | 71,359 | |||||||||||
March 1, 2020 | US$ | 300,000 | CDN$ | 409,200 | (17,109) | |||||||||||
May 1, 2021 | US$ | 300,000 | CDN$ | 312,002 | 85,395 | |||||||||||
April 1, 2022 | US$ | 300,000 | CDN$ | 379,517 | 18,122 | |||||||||||
July 30, 2022 | US$ | 300,000 | CDN$ | 329,310 | 58,664 | |||||||||||
Total | US$ | 1,844,000 | CDN$ | 2,074,247 | 338,276 | |||||||||||
| 1 | Mark to Market is an indication of the swap’s market value as at March 31, 2017. It is also the equivalent of the present value of future cash flows based on market conditions at March 31, 2017. |
Notes to the Consolidated Financial Statements
|
Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2017
12. Trust Funds Under Administration
Trust fund assets solely administered by the Province are as follows:
| ($ thousands) | 2017 | 2016 | ||
Nova Scotia Credit Union Deposit Insurance Corporation 1 | 28,280 | 25,387 | ||
Public Trustee 2 | 59,307 | 56,830 | ||
Miscellaneous Trusts 3 | 26,960 | 26,110 | ||
Total Trust Funds Under Administration | 114,547 | 108,327 | ||
| 1 | - Represents trust with December 31 year-end |
| 2 | - Financial statements of these funds are available in Public Accounts –Volume 2 |
| 3 | - Miscellaneous trusts include a large number of relatively small funds |
Other
The Nova Scotia Teachers’ Union and the Province agreed to joint trusteeship of the Nova Scotia Teachers’ Pension Plan (TPP) effective April 1, 2006. Under joint trusteeship, the Trustee of the Plan is the Nova Scotia Teachers’ Pension Plan Trustee Inc., of which the Province has four of nine members. The Trustee is responsible for the administration of the Fund and investment management of fund assets. The total net assets available for benefits as at December 31, 2016 were $4.9 billion (2015 – $4.7 billion).
Effective April 1, 2013, the Minister of Finance transferred responsibility of the Public Service Superannuation Plan to a new trustee, Public Service Superannuation Plan Trustee Inc. As a result of this transfer, the Province no longer has any responsibility for this plan. Total net assets available for benefits as at March 31, 2017 were $6.0 billion (2016 – $5.5 billion).
The Nova Scotia Public Service Long Term Disability Plan (LTD Plan) operates as a joint trusteeship. As such, the Board of Trustees is appointed by the two plan Sponsors: the Province and the Nova Scotia Government and General Employees Union (NSGEU). The Trustee is responsible for the administration of the Fund and investment management of fund assets. The LTD Plan is funded equally by employer and employee contributions and all liability for benefits resides exclusively with the LTD Plan’s trust fund. Total net assets available for benefits as of December 31, 2016 were $154.0 million (2015 – $149.1 million).
13. Related Party Transactions
Included in these consolidated financial statements are insignificant transactions with various provincial crown corporations, agencies, boards, and commissions. Significant related party transactions have been offset and eliminated for purposes of consolidated reporting. Parties are deemed to be related to the General Revenue Fund due to common control or ownership by the Province of Nova Scotia.
The most significant unadjusted related party transactions are described in more detail in Schedule 6 – Government Business Enterprises.
14. Comparative Figures
Certain of the prior year’s figures have been reclassified to conform to the presentation format adopted in the current year.
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Schedule 1
Revenue
For the fiscal year ended March 31, 2017
($ thousands)
| 2017 | 2016 | |||||
Provincial Sources | ||||||
Tax Revenue | ||||||
Personal Income Tax | 2,616,878 | 2,648,157 | ||||
Corporate Income Tax | 610,307 | 398,109 | ||||
Harmonized Sales Tax | 1,696,901 | 1,770,080 | ||||
Tobacco Tax | 222,234 | 217,009 | ||||
Motive Fuel Tax | 258,501 | 254,011 | ||||
Other Tax Revenue | 171,718 | 170,257 | ||||
| 5,576,539 | 5,457,623 | |||||
Other Provincial Revenue | ||||||
Recoveries | 417,921 | 438,681 | ||||
Other Revenue from Governmental Units | 543,132 | 530,594 | ||||
Municipal Contributions to School Boards | 258,083 | 249,018 | ||||
Petroleum Royalties | 1,799 | (91,752) | ||||
Registry of Motor Vehicles | 133,077 | 130,317 | ||||
Other Government Charges | 62,511 | 61,626 | ||||
Miscellaneous | 149,176 | 149,945 | ||||
Net Gain on Disposal of Crown Assets | 5,528 | 3,502 | ||||
| 1,571,227 | 1,471,931 | |||||
Net Income from Government Business Enterprises | 394,591 | 387,757 | ||||
Investment Income | ||||||
Interest Revenue | 95,072 | 94,143 | ||||
Sinking Fund and Public Debt Management | ||||||
Fund Earnings | 90,475 | 95,982 | ||||
| 185,547 | 190,125 | |||||
Total Provincial Sources | 7,727,904 | 7,507,436 | ||||
Federal Sources | ||||||
Equalization Payments | 1,732,893 | 1,777,759 | ||||
Canada Health Transfer | 945,539 | 899,593 | ||||
Canada Social Transfer | 349,635 | 341,034 | ||||
Recoveries | 264,142 | 215,531 | ||||
Offshore Accord | 33,255 | 36,779 | ||||
TCA Cost Shared Revenue | 24,337 | 32,410 | ||||
Crown Share | 2,176 | (2,716) | ||||
Other Federal Transfers | 148,389 | 129,724 | ||||
Total Federal Sources | 3,500,366 | 3,430,114 | ||||
Total Revenue | 11,228,270 | 10,937,550 | ||||
Schedules to the Consolidated Financial Statements
|
Schedule 2
Expenses
For the fiscal year ended March 31, 2017
($ thousands)
| 2017 | 2016 | |||||||
Agriculture | ||||||||
Department of Agriculture | 60,688 | 55,033 | ||||||
Nova Scotia Crop and Livestock Insurance Commission | 2,377 | 3,282 | ||||||
Nova Scotia Harness Racing Fund | 1,034 | 983 | ||||||
Perennia Food & Agriculture Incorporated | 4,898 | 4,375 | ||||||
| 68,997 | 63,673 | |||||||
Business | ||||||||
Department of Business | 58,250 | 46,033 | ||||||
Bioscience Enterprise Centre Incorporated | — | 28 | ||||||
Film and Creative Industries Nova Scotia | — | 381 | ||||||
Nova Scotia Business Inc. | 39,714 | 28,957 | ||||||
Nova Scotia Innovation Corporation | 15,721 | 14,999 | ||||||
Nova Scotia Strategic Opportunities Fund Incorporated | 12 | 10 | ||||||
Renova Scotia Bioenergy Inc. | — | 18 | ||||||
Tourism Nova Scotia | 20,683 | 25,306 | ||||||
Trade Centre Limited | 12,777 | 14,845 | ||||||
Waterfront Development Corporation Limited | 5,482 | 5,012 | ||||||
| 152,639 | 135,589 | |||||||
Communities, Culture and Heritage | ||||||||
Department of Communities, Culture and Heritage | 92,774 | 73,460 | ||||||
Art Gallery of Nova Scotia | 3,226 | 3,672 | ||||||
Public Archives of Nova Scotia | 169 | 109 | ||||||
Schooner Bluenose Foundation | 13 | 31 | ||||||
Sherbrooke Restoration Commission | 2,127 | 2,154 | ||||||
Vive l’Acadie Community Fund | 33 | 30 | ||||||
| 98,342 | 79,456 | |||||||
Community Services | ||||||||
Department of Community Services | 891,878 | 885,110 | ||||||
Housing Nova Scotia | 186,751 | 162,491 | ||||||
| 1,078,629 | 1,047,601 | |||||||
Education and Early Childhood Development | ||||||||
Department of Education and Early Childhood Development | 351,735 | 329,829 | ||||||
Annapolis Valley Regional School Board | 133,137 | 134,890 | ||||||
Cape Breton-Victoria Regional School Board | 147,695 | 153,077 | ||||||
Chignecto-Central Regional School Board | 204,676 | 200,536 | ||||||
Conseil scolaire acadien provincial | 68,993 | 65,592 | ||||||
Halifax Regional School Board | 474,149 | 465,896 | ||||||
Nova Scotia School Boards Association | 937 | 586 | ||||||
Nova Scotia School Insurance Program | 4,377 | 4,237 | ||||||
South Shore Regional School Board | 78,092 | 75,317 | ||||||
Strait Regional School Board | 83,808 | 84,791 | ||||||
Tri-County Regional School Board | 71,680 | 70,311 | ||||||
| 1,619,279 | 1,585,062 | |||||||
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Schedule 2
Expenses (continued)
For the fiscal year ended March 31, 2017
($ thousands)
| 2017 | 2016 | |||||||
Energy | ||||||||
Department of Energy | 36,716 | 29,920 | ||||||
Nova Scotia Market Development Initiative Fund | — | 411 | ||||||
Pengrowth Nova Scotia Energy Scholarship Fund | 105 | 119 | ||||||
| 36,821 | 30,450 | |||||||
Environment | ||||||||
Department of Environment | 36,214 | 24,783 | ||||||
Resource Recovery Fund Board Inc. | 51,724 | 49,499 | ||||||
| 87,938 | 74,282 | |||||||
Finance and Treasury Board | ||||||||
Department of Finance and Treasury Board | 23,431 | 20,723 | ||||||
Fisheries and Aquaculture | ||||||||
Department of Fisheries and Aquaculture | 11,910 | 9,543 | ||||||
Nova Scotia Sportfish Habitat Fund | 316 | 385 | ||||||
| 12,226 | 9,928 | |||||||
Health and Wellness | ||||||||
Department of Health and Wellness | 2,097,002 | 2,112,858 | ||||||
Gambling Awareness Foundation of Nova Scotia | 118 | 42 | ||||||
Izaak Walton Killam Health Centre | 260,721 | 281,859 | ||||||
Nova Scotia Health Authority | 2,097,866 | 2,077,848 | ||||||
Nova Scotia Health Research Foundation | 6,524 | 6,243 | ||||||
| 4,462,231 | 4,478,850 | |||||||
Internal Services | ||||||||
Department of Internal Services | 180,180 | 136,969 | ||||||
Justice | ||||||||
Department of Justice | 302,861 | 301,316 | ||||||
CorFor Capital Repairs and Replacement Fund | 43 | — | ||||||
Law Reform Commission of Nova Scotia | 277 | 277 | ||||||
Nova Scotia Legal Aid Commission | 24,953 | 26,523 | ||||||
| 328,134 | 328,116 | |||||||
Schedules to the Consolidated Financial Statements
|
Schedule 2
Expenses (continued)
For the fiscal year ended March 31, 2017
($ thousands)
| 2017 | 2016 | |||||||
Labour and Advanced Education | ||||||||
Department of Labour and Advanced Education | 221,054 | 198,083 | ||||||
Nova Scotia Community College | 215,396 | 206,583 | ||||||
Occupational Health and Safety Trust Fund | 40 | — | ||||||
| 436,490 | 404,666 | |||||||
Assistance to Universities | 441,585 | 374,125 | ||||||
Municipal Affairs | ||||||||
Department of Municipal Affairs | 194,898 | 155,111 | ||||||
Nova Scotia E911 Cost Recovery Fund | 4,599 | 4,712 | ||||||
Nova Scotia Municipal Finance Corporation | 651 | 741 | ||||||
| 200,148 | 160,564 | |||||||
Natural Resources | ||||||||
Department of Natural Resources | 78,550 | 81,930 | ||||||
Acadia Coal Company Limited Fund | — | 1 | ||||||
Crown Land Mine Remediation Fund | 30 | 45 | ||||||
Crown Land Silviculture Fund | 3,319 | 2,730 | ||||||
Habitat Conservation Fund | 234 | 186 | ||||||
Nova Scotia Primary Forest Products Marketing Board | 50 | 99 | ||||||
Off-Highway Vehicle Infrastructure Fund | 1,162 | 1,454 | ||||||
Species at Risk Conservation Fund | 2 | 3 | ||||||
| 83,347 | 86,448 | |||||||
Public Service | ||||||||
Public Service | 194,984 | 187,188 | ||||||
Nova Scotia Utility and Review Board | 8,361 | 8,420 | ||||||
| 203,345 | 195,608 | |||||||
Seniors | ||||||||
Department of Seniors | 1,526 | 1,483 | ||||||
Transportation and Infrastructure Renewal | ||||||||
Department of Transportation and Infrastructure Renewal | 517,911 | 502,166 | ||||||
Harbourside Commercial Park Inc. | 911 | 1,060 | ||||||
Nova Scotia Lands Inc. | 3,027 | 4,289 | ||||||
Sydney Steel Corporation | 7 | — | ||||||
| 521,856 | 507,515 | |||||||
Restructuring Costs | 53,619 | 98,639 | ||||||
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Schedule 2
Expenses (continued)
For the fiscal year ended March 31, 2017
($ thousands)
| 2017 | 2016 | |||
(as restated)
| ||||
Pension Valuation Adjustment | 17,191 | 141,828 | ||
Refundable Tax Credits | 133,738 | 120,644 | ||
Debt Servicing Costs | ||||
General Revenue Fund | 794,718 | 823,390 | ||
Annapolis Valley Regional School Board | 745 | 788 | ||
Cape Breton-Victoria Regional School Board | 853 | 916 | ||
Chignecto-Central Regional School Board | 1,188 | 1,250 | ||
Conseil scolaire acadien provincial | 358 | 340 | ||
Halifax Regional School Board | 3,566 | 3,710 | ||
Housing Nova Scotia | 13,753 | 14,517 | ||
Izaak Walton Killam Health Centre | 1,768 | 2,006 | ||
Nova Scotia Community College | 2,334 | 2,171 | ||
Nova Scotia Health Authority | 13,936 | 14,640 | ||
Nova Scotia Innovation Corporation | 73 | 81 | ||
Nova Scotia Legal Aid Commission | 412 | 413 | ||
Nova Scotia Municipal Finance Corporation | 176 | 164 | ||
Nova Scotia Strategic Opportunities Fund Incorporated | 1,611 | 2,169 | ||
Nova Scotia Utility and Review Board | 33 | 36 | ||
Renova Scotia Bioenergy Inc. | — | 500 | ||
Resource Recovery Fund Board Inc. | 11 | 8 | ||
Sherbrooke Restoration Commission | 38 | 40 | ||
South Shore Regional School Board | 367 | 304 | ||
Strait Regional School Board | 520 | 552 | ||
Tourism Nova Scotia | 77 | 77 | ||
Trade Centre Limited | 66 | 65 | ||
Tri-County Regional School Board | 402 | 381 | ||
Waterfront Development Corporation Limited | 9 | 14 | ||
| 837,014 | 868,532 | |||
Total Expenses | 11,078,706 | 10,950,751 | ||
Schedules to the Consolidated Financial Statements
|
Schedule 3
Loans and Investments
As at March 31, 2017
($ thousands)
| Loans and Investments | Provisions | Net 2017 | Net 2016 | |||||||||||||||
Loans Receivable | ||||||||||||||||||
Agriculture and Rural Credit Act | 183,226 | 15,567 | 167,659 | 169,980 | ||||||||||||||
Educational & Services Products (NS) Limited | 15 | — | 15 | 15 | ||||||||||||||
Labour and Advanced Education – Student Loans Direct Lending | 222,657 | 111,846 | 110,811 | 107,852 | ||||||||||||||
Fisheries Development Act | 103,951 | 2,317 | 101,634 | 102,685 | ||||||||||||||
Halifax-Dartmouth Bridge Commission | 160,000 | — | 160,000 | 160,000 | ||||||||||||||
Nova Scotia Business Inc. | 33,440 | 11,185 | 22,255 | 28,969 | ||||||||||||||
Housing Nova Scotia | 560,941 | 4,499 | 556,442 | 573,415 | ||||||||||||||
Nova Scotia Innovation Corporation | 9,067 | 4,627 | 4,440 | 3,738 | ||||||||||||||
Nova Scotia Jobs Fund | 597,041 | 216,200 | 380,841 | 419,174 | ||||||||||||||
Nova Scotia Market Development Initiative Fund | — | — | — | 1,120 | ||||||||||||||
Nova Scotia Municipal Finance Corporation | 792,573 | — | 792,573 | 813,386 | ||||||||||||||
Nova Scotia Strategic Opportunities Fund Incorporated | 12,073 | — | 12,073 | 20,141 | ||||||||||||||
Perennia Food & Agriculture Incorporated | — | — | — | 273 | ||||||||||||||
Resource Recovery Fund Board Inc. | 178 | — | 178 | 164 | ||||||||||||||
Venture Corporations Act | 559 | 559 | — | — | ||||||||||||||
Waterfront Development Corporation Limited | 22 | — | 22 | 12 | ||||||||||||||
Total Loans Receivable | 2,675,743 | 366,800 | 2,308,943 | 2,400,924 | ||||||||||||||
Investments | ||||||||||||||||||
Art Gallery of Nova Scotia | 3,878 | — | 3,878 | 3,594 | ||||||||||||||
Gambling Awareness Foundation of Nova Scotia | 3,858 | — | 3,858 | 3,782 | ||||||||||||||
Nova Scotia Business Inc. | 29,572 | 16,746 | 12,826 | 13,055 | ||||||||||||||
Nova Scotia Community College | 10,107 | — | 10,107 | 8,872 | ||||||||||||||
Nova Scotia Health Authority | 44,912 | — | 44,912 | 24,557 | ||||||||||||||
Nova Scotia Innovation Corporation | 42,915 | 15,365 | 27,550 | 23,806 | ||||||||||||||
Nova Scotia Jobs Fund | 25,712 | 22,712 | 3,000 | 3,000 | ||||||||||||||
Nova Scotia School Insurance Program | 8,372 | — | 8,372 | 8,381 | ||||||||||||||
Nova Scotia Strategic Opportunities Fund Incorporated | 64,986 | — | 64,986 | — | ||||||||||||||
Perennia Food & Agriculture Incorporated | 1,770 | — | 1,770 | 1,488 | ||||||||||||||
Public Archives of Nova Scotia | 2,027 | — | 2,027 | 1,046 | ||||||||||||||
Total Investments | 238,109 | 54,823 | 183,286 | 91,581 | ||||||||||||||
The provisions listed above include $1.3 million (2016 – $0.3 million) for possible guarantee payouts from the Nova Scotia Jobs Fund Act. Also included in the provisions is $8.2 million (2016 – $8.5 million) for the Debt Reduction Assistance Program of the Department of Labour and Advanced Education Student Loans, of which $0.2 million (2016 – $0.4 million) relates to the student loans guaranteed by the Province.
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Schedule 4
Unmatured Debt
As at March 31, 2017
($ thousands)
| 2017 | 2016 | |||||||||||||||||
| Gross Unmatured Debt | Sinking Funds and Defeasance Assets | Net Unmatured Debt | Net Unmatured Debt | |||||||||||||||
General Revenue Fund | 15,639,409 | 2,712,532 | 12,926,877 | 13,346,366 | ||||||||||||||
Housing Nova Scotia | 152,915 | — | 152,915 | 168,053 | ||||||||||||||
Nova Scotia Health Authority | — | — | — | 194 | ||||||||||||||
Nova Scotia Municipal Finance Corporation | 8,038 | — | 8,038 | 8,919 | ||||||||||||||
Nova Scotia Power Finance Corporation | 749,300 | 749,300 | — | — | ||||||||||||||
Waterfront Development Corporation Limited | 1,990 | — | 1,990 | 1,025 | ||||||||||||||
Total Unmatured Debt | 16,551,652 | 3,461,832 | 13,089,820 | 13,524,557 | ||||||||||||||
Gross Unmatured Debt
All debt is presented in Canadian dollar equivalents and after giving effect to currency swap contracts itemized in Note 11.
Gross Unmatured Debt consists of the outstanding current and long-term debt of the Province’s General Revenue Fund and governmental units. Current and long-term debt of the government business enterprises is reflected on the Consolidated Statement of Financial Position as part of Investment in Government Business Enterprises and further detailed in Schedule 6.
Sinking Fund Assets
As at March 31, 2017, the General Revenue Fund held Sinking Funds and Public Debt Management Funds of $2,712.5 million (2016 – $2,595.8 million). These funds were comprised of $1,836.0 million in Sinking Funds and $876.5 million in Public Debt Management Funds. The total market value of both funds was $2,979.5 million at year-end. During the year, contributions were $26.3 million, total earnings were $90.5 million, and there were no redemptions.
Sinking fund assets are recorded at cost, which include premiums and discounts associated with the purchase of these investments. These premiums and discounts are amortized on a straight-line basis over the term of the related investment. The net unamortized portion of the premiums and discounts relating to sinking fund assets as at March 31, 2017 was $22.4 million (2016 – $28.9 million) and is included as part of the value of the sinking funds.
Schedules to the Consolidated Financial Statements
|
Schedule 4
Unmatured Debt (continued)
As at March 31, 2017
($ thousands)
Sinking fund assets consist primarily of debentures of the provincial governments and Government of Canada with fixed interest rates ranging from 2.0 to 9.6 per cent. Sinking fund payments normally commence on the first anniversary date of the issue of the debenture and are designed to retire the debt over the relevant period to maturity. The Province held a carrying value of $493.9 million (2016 – $493.9 million) of its own debentures in Sinking Funds as active investments at March 31, 2017.
As per the Nova Scotia Power Corporation Privatization Agreement, Nova Scotia Power Finance Corporation provides for defeasance of its debt. The portfolio of defeasance assets consists of Nova Scotia Power Corporation, other provincial governments and utilities, and Federal US bonds, coupons, and residuals. This debt is shown net of defeasance assets on the Consolidated Statement of Financial Position.
Debt Repayments
Projected net principal repayments, capital lease payments, and sinking fund requirements for the next five years and thereafter are as follows:
| Net Principal Repayments | Capital Lease Payments | Sinking Fund Payments | Total Payments | |||||||||||||
2018 | 424,195 | 34,657 | 26,309 | 485,161 | ||||||||||||
2019 | 1,023,488 | 33,921 | 24,048 | 1,081,457 | ||||||||||||
2020 | 1,091,411 | 26,996 | 17,899 | 1,136,306 | ||||||||||||
2021 | 1,161,109 | 20,414 | 17,899 | 1,199,422 | ||||||||||||
2022 | 1,202,460 | 5,321 | 10,017 | 1,217,798 | ||||||||||||
2023 and thereafter | 7,956,716 | 12,960 | — | 7,969,676 | ||||||||||||
| 12,859,379 | 134,269 | 96,172 | 13,089,820 | |||||||||||||
Net principal repayments are comprised of the principal amounts due on loans and debentures less available designated sinking funds to retire the debentures.
In addition, the Province has approximately $876.5 million (2016 – $866.8 million) in unrestricted sinking funds that can be used towards the retirement of any unmatured debt. The use of these funds is evaluated each year based on a detailed analysis of cash requirements and market conditions. These unrestricted sinking funds consist of cash and cash equivalents, primarily of Canadian financial institution bankers’ acceptances and provincial commercial paper, and longer term investments of fixed and/or floating federal, federal agency, and provincial term credits.
| 2017 | 2016 | |||||||
Term to Maturity | ||||||||
Cash and Cash Equivalents | 40,787 | 11,435 | ||||||
1 to 3 years | 477,556 | 181,277 | ||||||
3 to 5.5 years | 358,200 | 674,132 | ||||||
Public Debt Management Funds | 876,543 | 866,844 | ||||||
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Schedule 5
Gross Unmatured Debt
As at March 31, 2017
($ thousands)
| Foreign | ||||||||||||
| Exchange | CDN $ | Maturity | ||||||||||
| Rate | Amount | Dates | Interest Rates | |||||||||
Debentures | ||||||||||||
General Revenue Fund (CDN$) | 15,486,785 | 2017 to 2062 | 1.6% to 11.8% | |||||||||
General Revenue Fund (US$) | 0.751 | — | 2017 to 2032 | 5.1% to 9.5% | ||||||||
General Revenue Fund (UK£) | 0.601 | — | 2019 | 11.8% | ||||||||
Nova Scotia Municipal Finance Corporation | 8,038 | 2017 to 2032 | 1.8% to 2.2% | |||||||||
Nova Scotia Power Finance Corporation (CDN$) | 350,000 | 2020 to 2031 | 10.3% to 11.0% | |||||||||
Nova Scotia Power Finance Corporation (US$) | 0.751 | 399,300 | 2021 | 9.4% | ||||||||
Total Debentures | 16,244,123 | |||||||||||
Loans | ||||||||||||
General Revenue Fund – Other Debt | 18,355 | 2017 to 2022 | 0.6% to 2.2% | |||||||||
Housing Nova Scotia | 152,915 | 2017 to 2042 | 1.9% to 6.6% | |||||||||
Waterfront Development | ||||||||||||
Corporation Limited | 1,990 | Demand loan | — | |||||||||
Total Loans | 173,260 | |||||||||||
Capital Leases | ||||||||||||
General Revenue Fund | 134,269 | 2018 to 2027 | 6.0% to 7.3% | |||||||||
Total Capital Leases | 134,269 | |||||||||||
Gross Unmatured Debt | 16,551,652 | |||||||||||
Call, Redemption and Other Features
General Revenue Fund
Canadian debentures include $1,079.4 million in Canada Pension Plan (CPP) debentures, which are redeemable in whole or in part before maturity, on six months notice, at the option of the Minister of Finance of Canada.
The interest rates shown for the Canadian and US debentures reflect the fixed interest rates only. There are debentures that have floating interest rates. Floating interest rates are adjusted on a daily or quarterly basis.
Housing Nova Scotia
Mortgages and notes payable are secured by investments in social housing.
Schedules to the Consolidated Financial Statements
|
Schedule 6
Government Business Enterprises
As at March 31, 2017
($ thousands)
| 2017 | 2016 | |||||||||||||||||||||||||
| Nova Scotia | ||||||||||||||||||||||||||
| Halifax- Highway 104 | Provincial | |||||||||||||||||||||||||
| Dartmouth Bridge Commission | Western Alignment Corporation | Nova Scotia Liquor Corporation | Lotteries and Casino Corporation | Total | Total | |||||||||||||||||||||
Cash | 11,172 | 614 | 5,492 | 21,968 | 39,246 | 47,131 | ||||||||||||||||||||
Accounts Receivable | 910 | 913 | 3,321 | 54,964 | 60,108 | 56,111 | ||||||||||||||||||||
Inventory | — | 8 | 54,100 | 2,260 | 56,368 | 54,306 | ||||||||||||||||||||
Investments | 49,542 | 56,303 | — | 10,560 | 116,405 | 151,683 | ||||||||||||||||||||
Tangible Capital Assets | 248,379 | 28,599 | 40,637 | 75,974 | 393,589 | 338,948 | ||||||||||||||||||||
Other Assets | 344 | 497 | 5,292 | 9,761 | 15,894 | 14,823 | ||||||||||||||||||||
Total Assets | 310,347 | 86,934 | 108,842 | 175,487 | 681,610 | 663,002 | ||||||||||||||||||||
Accounts Payable | 17,995 | 5,107 | 42,778 | 118,694 | 184,574 | 175,445 | ||||||||||||||||||||
Unmatured Debt | 175,551 | 37,024 | — | 25,711 | 238,286 | 249,365 | ||||||||||||||||||||
Other Liabilities | 3,725 | 4,875 | 27,318 | 7,761 | 43,679 | 48,397 | ||||||||||||||||||||
Total Liabilities | 197,271 | 47,006 | 70,096 | 152,166 | 466,539 | 473,207 | ||||||||||||||||||||
Equity | 113,076 | 39,928 | 38,746 | 23,321 | 215,071 | 189,795 | ||||||||||||||||||||
Total Liabilities | ||||||||||||||||||||||||||
and Equity | 310,347 | 86,934 | 108,842 | 175,487 | 681,610 | 663,002 | ||||||||||||||||||||
Total Revenue | 31,431 | 23,188 | 616,880 | 436,177 | 1,107,676 | 1,121,893 | ||||||||||||||||||||
Debt Servicing | 1,255 | 3,920 | 944 | 1,102 | 7,221 | 7,327 | ||||||||||||||||||||
Other Expenses | 15,670 | 9,212 | 376,715 | 304,267 | 705,864 | 726,809 | ||||||||||||||||||||
Total Expenses | 16,925 | 13,132 | 377,659 | 305,369 | 713,085 | 734,136 | ||||||||||||||||||||
Net Income | 14,506 | 10,056 | 239,221 | 130,808 | 394,591 | 387,757 | ||||||||||||||||||||
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Schedule 6
Government Business Enterprises (continued)
As at March 31, 2017
Halifax-Dartmouth Bridge Commission
The Halifax-Dartmouth Bridge Commission (HDBC), operating as Halifax Harbour Bridges, was created in 1950 by a special statute of the Province of Nova Scotia (now the Halifax-Dartmouth Bridge Commission Act). The purpose of HDBC is to construct, maintain, and operate bridges and their necessary approaches across the Halifax Harbour, between the communities of Halifax and Dartmouth, and across the North West Arm.
HDBC currently operates and maintains two toll bridges across the Halifax Harbour: the Angus L. Macdonald Bridge and A. Murray MacKay Bridge. In accordance with the Halifax-Dartmouth Bridge Commission Act, the Nova Scotia Utility and Review Board, a provincially controlled public sector entity, sets the rates, tolls, and charges to be paid for the use of the two bridges operated by HDBC.
In the spring of 2015, HDBC embarked on a significant and necessary project known as “The Big Lift”. This involves replacing the road deck, floor beams, stiffening trusses, and suspender ropes on the suspended spans of the Angus L. Macdonald Bridge. When the project is complete, a significant amount of the bridge infrastructure will be new. This will help to extend the life of the bridge and reduce future maintenance. At the end of February 2017, 46 out of 46 segments had been replaced, marking a major milestone in the project. As at March 31, 2017, work was still ongoing with the overall project scheduled to be complete by the fall of 2017.
Long-Term Loan Agreements with the Province
2007 Loan Agreement — On July 25, 2007, HDBC entered into a long-term unsecured loan agreement with the Province for $60.0 million with a final maturity date of December 4, 2019. This agreement requires annual principal repayments of $3.0 million plus interest, with a final principal repayment of $9.6 million along with all accrued and unpaid interest thereon due on the final maturity date. At March 31, 2017, HDBC had a balance of $15.6 million (2016 – $18.6 million) repayable on the loan, of which $3.0 million is due within a year. HDBC made a $17.4 million prepayment of the principal on October 22, 2014, which was applied against the final payment on maturity due in 2019.
Interest is payable semi-annually on June 4 and December 4 of each year. The average interest rate over the life of the loan is 5.19 per cent. Interest expense on the long-term debt for the current year was $0.9 million (2016 – $1.1 million), of which $258.0 thousand (2016 – $310.0 thousand) was accrued at year-end.
2015 Loan Agreement — On February 6, 2015, HDBC entered into a long-term unsecured loan agreement with the Province for $160.0 million in relation to the capital project to replace the suspended span of the Angus L. Macdonald Bridge. This loan is to be repaid over twenty years starting June 1, 2019 with annual principal repayments of between $4.0 million and $10.0 million. Interest is paid semi-annually on June 1 and December 1 of each year. The average interest rate over the life of the loan is 2.8 per cent. A portion of the interest charges related to this loan are capitalized and included as part of capital assets. Capitalized interest on the loan for the current year was $4.3 million (2016 – $4.3 million), of which $1.4 million (2016 – $1.4 million) was accrued at year-end.
Restricted Reserve Funds
The 2007 and 2015 Loan Agreements require that HDBC maintain three reserve funds: an Operating, Maintenance & Administrative Fund, Debt Service Fund, and Capital Fund. At year-end, restricted assets for these funds totaled $14.6 million (2016 – $10.8 million) and were invested in GICs, bankers’ acceptances, and term deposits with rates between 0.87 and 1.65 per cent. Interest income on restricted assets for the year totaled $466.0 thousand (2016 – $925.0 thousand), of which $348.0 thousand (2016 – $853.0 thousand) was included as part of capital assets.
Schedules to the Consolidated Financial Statements
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Schedule 6
Government Business Enterprises (continued)
As at March 31, 2017
Halifax-Dartmouth Bridge Commission (continued)
Big Lift Fund
The Big Lift Fund consists of proceeds from the 2015 loan not yet expended on the Macdonald Bridge suspended span replacement project. Under the terms of the loan agreement, these amounts have been invested in term promissory notes issued by the Province of Nova Scotia. The promissory notes mature monthly, through September 2017, in various amounts to enable HDBC to make payments to third parties within the following 30 days in respect of capital improvements to the Macdonald Bridge.
Line of Credit Agreement with the Province
On June 30, 2008, HDBC entered into an agreement with the Province for a $60.0 million revolving, unsecured line of credit, which is available until December 5, 2019. At year-end, HDBC had no advances outstanding against this line of credit (2016 – $nil) and no draws or accrued interest for the year (2016 – $nil).
Highway 104 Western Alignment Corporation
The Highway 104 Western Alignment Corporation (H104) was established for the purpose of financing, designing, constructing, operating, and maintaining a 45 km stretch of highway (referred to as the Cobequid Pass) between Masstown and Thomson Station in the counties of Colchester and Cumberland, Nova Scotia. The Highway 104 Western Alignment Corporation Act, which authorizes the collection of tolls, states that toll collection will cease upon complete payment of all costs and liabilities relating to H104. This includes financing, design, construction, operation and maintenance, and any repair, improvement, alteration, or extension. The forecasted repayment date of all costs and liabilities relating to H104 is in 2026.
Related Party Transactions
At March 31, 2017, H104 had a receivable from the Province in the amount of $697.3 thousand (2016 – $685.4 thousand). Government grants are recognized initially as deferred income at fair value when there is reasonable assurance that they will be received and H104 will comply with the conditions associated with them. Grants to cover expenses incurred are recognized in profit or loss on a systematic basis in the same periods in which the expenses are recognized. Grants to cover the cost of an asset are deferred and amortized to operations over the expected project life or useful life of the asset using the straight-line method.
Transactions with various Crown corporations, ministries, agencies, boards, and commissions related to H104 by virtue of common control by the Province are included in the financial statements of H104 and are routine operating transactions carried out as part of H104’s normal day-to-day operations. These transactions are individually insignificant, and collectively, they increase enforcement costs by $60.0 thousand (2016 – $60.0 thousand), maintenance services by $1.2 million (2016 – $1.2 million), inventory by $14.0 thousand (2016 – $21.3 thousand), and property, plant and equipment by $369.5 thousand (2016 – $292.7 thousand).
Omnibus Agreement
The Omnibus Agreement, dated April 1, 1996, is an agreement between H104, the Contractor, the Operator, and the Province to design, finance, construct, operate, and maintain the Highway 104 Western Alignment. Under this agreement, the Province retains ownership of the highway. However, H104 is granted the right to operate the highway and collect tolls for a 30-year period, after which time the right will revert to the Province. Overall, the Province has contributed $27.5 million to this project.
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Schedule 6
Government Business Enterprises (continued)
As at March 31, 2017
Highway 104 Western Alignment Corporation (continued)
The capital, major maintenance, and debt service restricted reserve accounts, which have been established in accordance with the Omnibus Agreement, totaled $56.3 million (2016 – $49.4 million) at year-end. They are comprised of investments that are recorded at fair value and include accrued interest of $71.2 thousand (2016 – $47.0 thousand), a weighted-average term of 6.1 months (2016 – 6.1 months) to maturity, and a weighted-average interest rate of 0.94 per cent (2016 – 0.85 per cent).
Annual Roadway Maintenance Agreement
The annual roadway maintenance agreement is a 30-year agreement between H104 and the Department of Transportation and Infrastructure Renewal for the provision of annual roadway maintenance services and is renewable in five-year increments. The annual fee was $1.2 million for the current fiscal year (2016 – $1.2 million). During the year, H104 incurred management fees of $224.2 thousand (2016 – $239.0 thousand) to the Province.
Long-Term Debt
Long-term debt is comprised of senior toll revenue bonds bearing interest of 10.25 per cent per year, compounded semi-annually, and maturing March 31, 2026. The bonds are payable in equal installments of interest and principal. At year-end, H104 had $34.4 million (2016 – $37.0 million) of long-term debt and $2.7 million (2016 – $2.4 million) of debt maturing within one year. Interest expense on the long-term debt was $3.9 million (2016 – $4.2 million) for the year.
Minimum principal repayments for the next five years are as follows:
2018 – $2.7 million, 2019 – $3.0 million, 2020 – $3.3 million, 2021 – $3.6 million, 2022 – $4.0 million.
Long-term debt is secured by a first charge and security interest over all the present and future property and assets, including but not limited to, cash and securities held in trust, rights under all material contracts, and all accounts receivable and interest.
Nova Scotia Liquor Corporation
The Nova Scotia Liquor Corporation (NSLC) derives its mandate from the Liquor Control Act, Chapter 260 of the Revised Statutes of Nova Scotia, 1989. NSLC was created June 1, 2001, by Chapter 4 of the Government Restructuring (2001) Act, via continuance of the Nova Scotia Liquor Commission as a body corporate. NSLC operates retail sales locations across the province of Nova Scotia.
Related Party Transactions
In 2017, remittances to the Minister of Finance and Treasury Board totaled $247.0 million (2016 – $240.0 million). All other transactions with the Province are deemed to be collectively insignificant to NSLC’s financial statements.
Upon conversion to International Financial Reporting Standards (IFRS) in 2012, NSLC reclassified its payable to the Minister of Finance and Treasury Board from a liability to equity. NSLC’s equity was $38.7 million (2016 – $46.8 million) at year-end. NSLC’s main objectives for managing capital are to ensure sufficient liquidity in support of its financial obligations to achieve its business plans and to continue as a self-sufficient entity in order to provide continuous remittances to the Province.
Schedules to the Consolidated Financial Statements
|
Schedule 6
Government Business Enterprises (continued)
As at March 31, 2017
Nova Scotia Provincial Lotteries and Casino Corporation
The Nova Scotia Gaming Corporation (NSGC) was incorporated on February 15, 1995 by Chapter 4 of the Acts of 1994-95, the Gaming Control Act. The Gaming Control Act was amended on November 13, 2012, whereby the name of NSGC was changed to Nova Scotia Provincial Lotteries and Casino Corporation (NSPLCC). The principal activities of NSPLCC are to develop, undertake, organize, conduct, and manage casinos and other lottery business on behalf of the Province of Nova Scotia. Revenues of NSPLCC are derived from two casinos, located in Halifax and Sydney, as well as ticket and video lottery sales.
Payable to the Province
NSPLCC had a payable to the Province in the amount of $101.2 million (2016 – $91.5 million) at year-end. In addition to the net income of $130.8 million (2016 – $127.5 million), NSPLCC is required to pay to the Province 20.0 per cent of casino gaming revenue, otherwise known as win tax. This amounted to $13.8 million in the current year (2016 – $13.9 million).
Capital Lease Arrangements
At March 31, 2017, NSPLCC had long-term commitments for minimum lease payments relating to non-cancellable capital leases of $nil (2016 – $33.0 thousand) and current portion of long-term leases of $nil (2016 – $118.0 thousand). Included in NSPLCC’s commitments is its share of the Atlantic Lottery Corporation Inc.’s (ALC) capital lease payable for the purchase of non-gaming information technology assets contracted as part of an outsourcing agreement with CGI Group Inc. This contract was terminated in September 2016, consequently ending all capital leases and associated liabilities.
Special Payments to Government Departments
NSPLCC is obligated to make direct payments annually to two provincial government departments: Department of Communities, Culture and Heritage (in support of the Cultural Federation of Nova Scotia and Sport Nova Scotia) and Department of Agriculture (in support of the Exhibition Association of Nova Scotia). In 2017, these payments totaled $0.2 million (2016 – $0.2 million).
As part of its 2005 and 2011 Gaming Strategies, the Province approved contributions of $3.0 million to the Department of Health and Wellness in 2017 (2016 – $3.0 million) to fund problem gambling treatment and $0.5 million (2016 – $0.5 million) to fund youth gambling prevention.
Contribution to Gambling Awareness Foundation of Nova Scotia
Video Lottery (VL) retailers in Nova Scotia have agreed, under the terms of their agreements with ALC, to contribute one per cent of their VL commission to the Gambling Awareness Foundation of Nova Scotia (GAFNS). NSPLCC has agreed to contribute an amount equal to all contributions made by the VL retailers. At March 31, 2017, NSPLCC had a payable to GAFNS in the amount of $43.0 thousand (2016 – $41.0 thousand).
Contribution to Nova Scotia Harness Racing Fund
NSPLCC annually contributes to the Nova Scotia Harness Racing Fund, pursuant to the Nova Scotia Harness Racing Fund Regulations. These contributions go towards supporting the harness racing industry in Nova Scotia. In 2017, the contribution was $1.0 million (2016 – $1.0 million).
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Schedule 6
Government Business Enterprises (continued)
As at March 31, 2017
Nova Scotia Provincial Lotteries and Casino Corporation (continued)
Due to Atlantic Gaming Equipment
At March 31, 2017, the amount due to Atlantic Gaming Equipment Limited was $25.7 million (2016 – $31.4 million), of which $6.9 million (2016 – $9.3 million) was classified as current. This liability represents a portion of ALC’s debt used in the acquisition of property, plant and equipment operated on behalf of NSPLCC. All amounts are payable by ALC and are due on or before July 2026.
The debt is based on variable interest rates ranging from 1.5 to 3.5 per cent. The aggregate maturity of long-term debt, which is comprised of NSPLCC’s portion of ALC’s debt and debt incurred jointly with the other Atlantic provinces, for the next five years is approximately as follows: 2018 – $7.3 million, 2019 – $7.5 million, 2020 – $6.3 million, 2021 – $2.6 million, 2022 – $2.7 million. Included in interest expense is $1.1 million (2016 – $1.0 million) relating to long-term debt.
Safe Gaming System Inc.
NSPLCC has been made aware of a statement of claim filed by Safe Gaming System Inc. alleging a patent infringement related to its responsible gaming device known as the My-Play System. The amount claimed by the plaintiff is a royalty based on a percentage of amounts wagered on video lottery terminals in the province during the relevant time period. The trial commenced on May 23, 2017; however, since the outcome is undeterminable at this time, no amounts have been accrued in NSPLCC’s financial statements.
Disputed HST Assessments
Included in accounts receivable at March 31, 2017 is $53.5 million (2016 – $45.8 million) that was paid to Canada Revenue Agency (CRA), on a without prejudice basis, for an assessment of HST in respect to the operation of certain video lottery terminals. NSPLCC is contesting this matter with CRA and has filed a notice of appeal to the Tax Court. The outcome of the appeal is undeterminable at this time. The amount paid to CRA has been classified as a non-current asset in NSPLCC’s financial statements due to the uncertainty of when NSPLCC expects the dispute to be resolved.
Queen Elizabeth II Health Sciences Centre Auxiliary
The Queen Elizabeth II Health Sciences Centre Auxiliary, operating as Partners for Care, is a volunteer-based non-profit, charitable organization. The primary objective of Partners for Care is to generate revenue for Nova Scotia Health Authority (NSHA) through parking and retail services, rental activities, and other special projects that generally take place within the hospital premises. Partners for Care was identified and consolidated as a government business enterprise by NSHA.
The Partners for Care bylaws were amended in June 2016. This resulted in a loss of control for NSHA, which then ceased application of the modified equity method to consolidate the results of Partners for Care in its financial statements.
Schedules to the Consolidated Financial Statements
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Schedule 7
Tangible Capital Assets
As at March 31, 2017
($ thousands)
| 2017 | 2016 | |||||||||||||||||||||||||||||||
| Land | Buildings and Land Improve- ments | Machinery, Computers and Equipment | Vehicles and Ferries | Roads, Bridges and Highways | Total | Total | ||||||||||||||||||||||||||
Costs | ||||||||||||||||||||||||||||||||
Opening Costs | 998,921 | 5,091,641 | 1,639,499 | 193,575 | 3,044,628 | 10,968,264 | 10,559,128 | |||||||||||||||||||||||||
Transfers | 160 | (47,313) | (422) | 685 | 118 | (46,772) | (5,311) | |||||||||||||||||||||||||
Additions | 19,527 | 157,653 | 64,862 | 16,959 | 202,633 | 461,634 | 468,850 | |||||||||||||||||||||||||
Disposals | (438) | (898) | (9,870) | (4,912) | (187) | (16,305) | (54,403) | |||||||||||||||||||||||||
Closing Costs | 1,018,170 | 5,201,083 | 1,694,069 | 206,307 | 3,247,192 | 11,366,821 | 10,968,264 | |||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||||||||
Opening | ||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||
Amortization | — | (2,346,866) | (1,255,238) | (119,099) | (1,522,927) | (5,244,130) | (4,872,522) | |||||||||||||||||||||||||
Transfers | — | 44,505 | 22 | (535) | — | 43,992 | 2,920 | |||||||||||||||||||||||||
Disposals | — | 614 | 9,559 | 4,810 | 81 | 15,064 | 49,804 | |||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||||||||
Expense | — | (158,798) | (88,539) | (16,825) | (163,254) | (427,416) | (424,332) | |||||||||||||||||||||||||
Closing | ||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||
Amortization | — | (2,460,545) | (1,334,196) | (131,649) | (1,686,100) | (5,612,490) | (5,244,130) | |||||||||||||||||||||||||
Net Book Value | 1,018,170 | 2,740,538 | 359,873 | 74,658 | 1,561,092 | 5,754,331 | 5,724,134 | |||||||||||||||||||||||||
Opening Balance | 998,921 | 2,744,775 | 384,261 | 74,476 | 1,521,701 | 5,724,134 | 5,686,606 | |||||||||||||||||||||||||
Closing Balance | 1,018,170 | 2,740,538 | 359,873 | 74,658 | 1,561,092 | 5,754,331 | 5,724,134 | |||||||||||||||||||||||||
Increase (Decrease) in Net Book Value | 19,249 | (4,237) | (24,388) | 182 | 39,391 | 30,197 | 37,528 | |||||||||||||||||||||||||
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Schedule 7
Tangible Capital Assets (continued)
As at March 31, 2017
Amortization is calculated on a declining balance basis for most assets of the General Revenue Fund. The amortization percentages of the more common tangible capital assets are as follows:
Buildings and Land Improvements | 5 – 30 per cent | |||
Machinery, Computers and Equipment | 15 – 50 per cent | |||
Vehicles and Ferries | 15 – 35 per cent | |||
Roads, Bridges and Highways | 5 – 15 per cent |
Capital leases of the General Revenue Fund are amortized on a straight-line basis over the length of each lease, ranging from 3 to 25 years.
Amortization is generally calculated on a straight-line basis for assets of the governmental units. The estimated useful lives of the more common tangible capital assets are as follows:
Buildings (including Leasehold Improvements) | 2 – 60 years | |||
Machinery, Computers and Equipment | 2 – 60 years | |||
Vehicles and Ferries | 3 – 7 years |
Capital leases of the governmental units are amortized on a straight-line basis over the length of each lease, ranging from 5 to 45 years.
Social Housing assets are included in Buildings and Land Improvements and relate to Housing Nova Scotia. These assets are amortized using the straight-line method. The net book value of these assets is $270.8 million (2016 – $290.4 million).
Included in the closing costs of the various classes as at March 31, 2017 are costs for assets under construction, which have not yet been amortized. These costs relate to Buildings and Land Improvements of $160.7 million, Machinery, Computers and Equipment of $24.1 million, Vehicles and Ferries of $2.7 million, and Roads, Bridges and Highways of $64.5 million.
Capital leases are included in the various classes as at March 31, 2017 as follows: Buildings and Land Improvements – cost of $463.6 million, accumulated amortization of $373.9 million; Machinery, Computers and Equipment – cost of $38.2 million, accumulated amortization of $38.2 million; and Vehicles and Ferries – cost of $25.6 million, accumulated amortization of $15.9 million.
Schedules to the Consolidated Financial Statements
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Schedule 8
Direct Guarantees
As at March 31, 2017
($ thousands)
| Foreign | ||||||||||||||
Exchange Rate | Authorized 2017 | Utilized 2017 | Utilized 2016 | |||||||||||
Bank Loans | ||||||||||||||
Department of Labour and Advanced Education – Student Loan Program | 632 | 632 | 2,256 | |||||||||||
Department of Transportation and Infrastructure Renewal (US$) | 0.751 | 6,655 | — | — | ||||||||||
Nova Scotia Business Inc. | 1,500 | 1,075 | 825 | |||||||||||
Nova Scotia Jobs Fund Act | 61,600 | 48,598 | 58,708 | |||||||||||
Total Bank Loan Guarantees | 70,387 | 50,305 | 61,789 | |||||||||||
Mortgages | ||||||||||||||
Housing Nova Scotia Act | 6,602 | 6,602 | 7,465 | |||||||||||
Housing Nova Scotia Act – | ||||||||||||||
Canada Mortgage and Housing | ||||||||||||||
Corporation Indemnities | 41,166 | 41,166 | 49,002 | |||||||||||
Total Mortgage Guarantees | 47,768 | 47,768 | 56,467 | |||||||||||
| ||||||||||||||
Total Direct Guarantees | 118,155 | 98,073 | 118,256 | |||||||||||
Less: Provision for Guarantee Payout | ||||||||||||||
Department of Labour and Advanced Education – Student Loan Program | (348 | ) | (547) | |||||||||||
Housing Nova Scotia Act | (4,506 | ) | (4,194) | |||||||||||
Nova Scotia Business Inc. | (295 | ) | (367) | |||||||||||
Nova Scotia Jobs Fund Act | (1,266 | ) | (250) | |||||||||||
| (6,415 | ) | (5,358) | ||||||||||||
Less: Provision for Student Debt Reduction Program | ||||||||||||||
Department of Labour and Advanced Education – Student Loan Program | (217 | ) | (397) | |||||||||||
| ||||||||||||||
Net Direct Guarantees | 91,441 | 112,501 | ||||||||||||
(Not provided for in these Consolidated Financial Statements) | ||||||||||||||
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Schedule 9
Segment Reporting
For the fiscal year ended March 31, 2017
Segment reporting is designed to assist users in identifying the resources allocated to support the major activities of government and to better understand the performance of segments.
The following schedules provide segment information for the 2017 and 2016 fiscal years. Segment results represent the activities of that segment and include any inter-segment transactions. Inter-segment eliminations are shown in a separate column and show the reconciliation to total consolidated amounts. The Province has determined that the following segments represent the major activities of government.
Health
The provision of such services and institutions to the public that will lead to a higher state of personal health.
Education
The provision of all aspects and phases of training to equip people with necessary skills to pursue productive lives. This includes: Primary to Grade 12, post-secondary and advanced education, as well as labour support.
Infrastructure & Public Works
The provision of the means to facilitate the effective and efficient movement of persons and property. This includes the net results of the Halifax-Dartmouth Bridge Commission and the Highway 104 Western Alignment Corporation.
Social Services
The provision of services and assistance to economically and/or socially disadvantaged persons requiring aid.
Natural Resources & Economic Development
The provision for the maintenance and upkeep, efficient extraction, processing, and utilization of the natural attributes of the province with the aim of creating employment and contributing to the material well-being of residents.
Other Government
Revenues and expenses that relate to activities that are not identified as a separate segment or cannot be directly allocated on a reasonable basis to individual segments because they support a wide range of service delivery activities. This includes certain items from the General Revenue Fund such as general tax revenues, sinking fund earnings, debt servicing costs, and the pension valuation adjustment.
Schedules to the Consolidated Financial Statements
|
Schedule 9
Segment Reporting (continued)
For the fiscal year ended March 31, 2017
($ thousands)
| Infrastructure & | ||||||||||||||||||||||||||||||||||||||
| Health | Education | Public Works | Social Services | |||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||
Provincial Sources | ||||||||||||||||||||||||||||||||||||||
Tax Revenue | 222,234 | 217,009 | — | — | 258,501 | 254,011 | — | — | ||||||||||||||||||||||||||||||
Other Provincial Revenue | 526,789 | 591,939 | 447,045 | 459,748 | 21,563 | 20,850 | 109,156 | 106,181 | ||||||||||||||||||||||||||||||
Net Income from GBEs | — | 394 | — | — | 24,562 | 18,580 | — | — | ||||||||||||||||||||||||||||||
Investment Income | 880 | 2,117 | 9,153 | 8,557 | — | — | 25,638 | 26,644 | ||||||||||||||||||||||||||||||
Federal Sources | 994,693 | 953,151 | 300,380 | 269,492 | 23,017 | 31,651 | 301,985 | 279,612 | ||||||||||||||||||||||||||||||
Total Revenues | 1,744,596 | 1,764,610 | 756,578 | 737,797 | 327,643 | 325,092 | 436,779 | 412,437 | ||||||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||||||||||
Grants and Subsidies | 1,878,992 | 1,881,867 | 704,212 | 603,664 | 14,569 | 21,114 | 781,451 | 772,235 | ||||||||||||||||||||||||||||||
Salaries and Employee Benefits | 1,701,749 | 1,834,713 | 1,378,386 | 1,363,215 | 124,438 | 121,912 | 160,432 | 159,118 | ||||||||||||||||||||||||||||||
Operating Goods and Services | 797,064 | 738,314 | 316,444 | 337,752 | 172,947 | 164,917 | 136,572 | 119,408 | ||||||||||||||||||||||||||||||
Professional Services | 40,078 | 59,017 | 20,445 | 14,436 | 17,634 | 12,983 | 7,706 | 4,915 | ||||||||||||||||||||||||||||||
Amortization | 93,545 | 99,623 | 83,472 | 84,137 | 191,985 | 186,759 | 23,449 | 23,690 | ||||||||||||||||||||||||||||||
Debt Servicing Costs | 16,470 | 17,502 | 10,335 | 10,411 | — | — | 38,381 | 39,997 | ||||||||||||||||||||||||||||||
Other | 725 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total Expenses | 4,528,623 | 4,631,036 | 2,513,294 | 2,413,615 | 521,573 | 507,685 | 1,147,991 | 1,119,363 | ||||||||||||||||||||||||||||||
Segment Result | (2,784,027 | ) | (2,866,426 | ) | (1,756,716 | ) | (1,675,818 | ) | (193,930 | ) | (182,593 | ) | (711,212 | ) | (706,926) | |||||||||||||||||||||||
|
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Schedule 9
Segment Reporting (continued)
For the fiscal year ended March 31, 2017
($ thousands)
| Natural Resources & | Other | Inter-Segment | ||||||||||||||||||||||||||||||||||||
| Economic Development | Government | Eliminations | Total | |||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||||||
| (as restated) | (as restated) | |||||||||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||
Provincial Sources | ||||||||||||||||||||||||||||||||||||||
Tax Revenue | 360 | 403 | 5,095,444 | 4,986,200 | — | — | 5,576,539 | 5,457,623 | ||||||||||||||||||||||||||||||
Other Provincial Revenue | 142,943 | 33,594 | 408,585 | 415,134 | (84,854 | ) | (155,515 | ) | 1,571,227 | 1,471,931 | ||||||||||||||||||||||||||||
Net Income from GBEs | — | — | 370,029 | 368,783 | — | — | 394,591 | 387,757 | ||||||||||||||||||||||||||||||
Investment Income | 5,703 | 4,053 | 172,714 | 180,376 | (28,541 | ) | (31,622 | ) | 185,547 | 190,125 | ||||||||||||||||||||||||||||
Federal Sources | 44,728 | 41,150 | 1,835,563 | 1,855,058 | — | — | 3,500,366 | 3,430,114 | ||||||||||||||||||||||||||||||
Total Revenues | 193,734 | 79,200 | 7,882,335 | 7,805,551 | (113,395 | ) | (187,137 | ) | 11,228,270 | 10,937,550 | ||||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||||||||||
Grants and Subsidies | 175,598 | 97,414 | 440,914 | 369,683 | (34,568 | ) | (30,952 | ) | 3,961,168 | 3,715,025 | ||||||||||||||||||||||||||||
Salaries and Employee Benefits | 127,034 | 133,237 | 422,351 | 518,844 | (7,220 | ) | (88,016 | ) | 3,907,170 | 4,043,023 | ||||||||||||||||||||||||||||
Operating Goods and Services | 125,786 | 160,316 | 140,440 | 108,024 | (14,769 | ) | (6,404 | ) | 1,674,484 | 1,622,327 | ||||||||||||||||||||||||||||
Professional Services | 14,408 | 15,109 | 168,226 | 169,768 | (1,190 | ) | (935 | ) | 267,307 | 275,293 | ||||||||||||||||||||||||||||
Amortization | 6,238 | 6,435 | 28,727 | 23,688 | — | — | 427,416 | 424,332 | ||||||||||||||||||||||||||||||
Debt Servicing Costs | 2,162 | 5,137 | 824,169 | 854,221 | (54,503 | ) | (58,736 | ) | 837,014 | 868,532 | ||||||||||||||||||||||||||||
Other | 4,567 | 4,313 | — | — | (1,145 | ) | (2,094 | ) | 4,147 | 2,219 | ||||||||||||||||||||||||||||
Total Expenses | 455,793 | 421,961 | 2,024,827 | 2,044,228 | (113,395 | ) | (187,137 | ) | 11,078,706 | 10,950,751 | ||||||||||||||||||||||||||||
Segment Result | (262,059 | ) | (342,761 | ) | 5,857,508 | 5,761,323 | — | — | 149,564 | (13,201) | ||||||||||||||||||||||||||||
Schedules to the Consolidated Financial Statements
|
Schedule 10
Government Reporting Entity
As at March 31, 2017
The General Revenue Fund is comprised of the Province’s departments and public service units, special operating agencies, and special purpose funds, which are consolidated with the governmental units, government business enterprises, and a proportionate share of government partnership arrangements to form the Province’s government reporting entity.
| Departments and Public Service Units | Special Operating Agencies | |
| (Consolidation Method) | (Consolidation Method) | |
| Agriculture | Nova Scotia Apprenticeship Agency | |
| Business | Nova Scotia Home for Colored Children | |
| Invest Nova Scotia Fund | Restorative Inquiry | |
| Nova Scotia Jobs Fund | Sydney Tar Ponds Agency (inactive) | |
| Communities, Culture and Heritage | ||
| Community Services | Special Purpose Funds | |
| Education and Early Childhood Development | (Consolidation Method) | |
| Energy | ||
| Environment | Acadia Coal Company Limited Fund | |
| Finance and Treasury Board | CorFor Capital Repairs and Replacements Fund | |
| Muggah Creek Remediation Fund | Crown Land Mine Remediation Fund | |
| Public Debt Management Fund | Crown Land Silviculture Fund | |
| SYSCO Decommissioning Fund | Democracy 250 (inactive) | |
| Fisheries and Aquaculture | Gaming Addiction Treatment Trust Fund | |
| Health and Wellness | Habitat Conservation Fund | |
| Internal Services | Nova Scotia Coordinate Referencing System Trust Fund | |
| Justice | Nova Scotia E911 Cost Recovery Fund | |
| Labour and Advanced Education | Nova Scotia Environmental Trust | |
| Municipal Affairs | Nova Scotia Government Acadian Bursary Program Fund | |
| Natural Resources | Nova Scotia Harness Racing Fund | |
| Public Service | Nova Scotia Market Development Initiative Fund | |
| Aboriginal Affairs | Nova Scotia Nominee Program Fund | |
| Communications Nova Scotia | Nova Scotia Sportfish Habitat Fund | |
| Elections Nova Scotia | Occupational Health and Safety Trust Fund | |
| Executive Council | Off-Highway Vehicle Infrastructure Fund | |
| Human Rights Commission | P3 Schools Capital and Technology Refresh Fund 1 | |
| Intergovernmental Affairs | Pengrowth Nova Scotia Energy Scholarship Fund | |
| Legislative Services | Scotia Learning Technology Refresh Fund | |
| Nova Scotia Police Complaints Commissioner | Select Nova Scotia Fund | |
| Nova Scotia Securities Commission | Species at Risk Conservation Fund | |
| Office of Immigration | Sustainable Forestry Fund | |
| Office of Regulatory Affairs and | Vive l’Acadie Community Fund | |
| Service Effectiveness | ||
| Office of Service Nova Scotia | Governmental Units | |
| Office of the Auditor General | (Consolidation Method) | |
| Office of the Information and | ||
| Privacy Commissioner | Annapolis Valley Regional School Board | |
| Office of the Ombudsman | Art Gallery of Nova Scotia | |
| Public Prosecution Service | Arts Nova Scotia | |
| Public Service Commission | Cape Breton-Victoria Regional School Board | |
| Seniors | Check Inns Limited (inactive) | |
| Transportation and Infrastructure Renewal | Chignecto-Central Regional School Board | |
1 |
– Includes all refresh funds related to P3 schools.
|
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Schedule 10
Government Reporting Entity (continued)
As at March 31, 2017
| Governmental Units (continued) | ||
| (Consolidation Method) | ||
| Conseil scolaire acadien provincial | Perennia Food & Agriculture Incorporated | |
| Creative Nova Scotia Leadership Council | Public Archives of Nova Scotia | |
| Gambling Awareness Foundation of Nova Scotia | Resource Recovery Fund Board Inc. | |
| Halifax Regional School Board | Schooner Bluenose Foundation | |
| Harbourside Commercial Park Inc. | Sherbrooke Restoration Commission | |
| Sydney Utilities Limited | South Shore Regional School Board | |
| Housing Nova Scotia | Strait Regional School Board | |
| Cape Breton Island Housing Authority | Sydney Environmental Resources Limited (inactive) | |
| Cobequid Housing Authority | Sydney Steel Corporation | |
| Eastern Mainland Housing Authority | Tourism Nova Scotia | |
| Metropolitan Regional Housing Authority | Trade Centre Limited | |
| Western Regional Housing Authority | Tri-County Regional School Board | |
| Invest Nova Scotia Board | Upper Clements Family Theme Park Limited (inactive) | |
| Izaak Walton Killam Health Centre | Waterfront Development Corporation Limited | |
| Law Reform Commission of Nova Scotia | 3104102 Nova Scotia Limited | |
| Nova Scotia Arts Council (inactive) | 3052155 Nova Scotia Limited (inactive) | |
| Nova Scotia Business Inc. | ||
| Nova Scotia Independent Production Fund | Government Business Enterprises | |
| Nova Scotia Community College | (Modified Equity Method) | |
| Nova Scotia Community College Foundation | ||
| Nova Scotia Crop and Livestock Insurance | Halifax-Dartmouth Bridge Commission | |
| Commission | Highway 104 Western Alignment Corporation | |
| Nova Scotia Farm Loan Board | Nova Scotia Liquor Corporation | |
| Nova Scotia Fisheries and Aquaculture Loan Board | Nova Scotia Provincial Lotteries and Casino Corporation | |
| Nova Scotia Health Authority | Atlantic Lottery Corporation (25% ownership) | |
| Nova Scotia Health Research Foundation | Interprovincial Lottery Corporation (10% ownership) | |
| Nova Scotia Innovation Corporation | Nova Scotia Gaming Equipment Limited | |
| 1402998 Nova Scotia Limited | ||
| 3087532 Nova Scotia Limited | Government Partnership Arrangements | |
| Nova Scotia Lands Inc. | (Modified Equity Method) 3 | |
| Nova Scotia Legal Aid Commission | ||
| Nova Scotia Municipal Finance Corporation | Atlantic Provinces Special Education Authority | |
| Nova Scotia Power Finance Corporation | (approximately 56% share) | |
| Nova Scotia Primary Forest Products Marketing | Canada-Nova Scotia Offshore Petroleum Board | |
| Board | (50% share) | |
| Nova Scotia School Boards Association 1 | Canadian Sports Centre Atlantic | |
| Nova Scotia School Insurance Exchange 2 | (approximately 14% share) | |
| Nova Scotia School Insurance Program | Council of Atlantic Premiers | |
| Association 2 | (approximately 46% share) | |
| Nova Scotia Strategic Opportunities Fund | Halifax Convention Centre Corporation (inactive) | |
| Incorporated | (50% share) | |
| Nova Scotia Utility and Review Board | ||
1 – Entity is a partnership controlled by the eight school boards.
2 – Entity is a partnership controlled by the eight school boards and the Nova Scotia Community College.
3 – GPAs do not meet the threshold of materiality and cost-benefit to use the proportionate consolidation method.
