Annual Report 2006-2007

Table of Contents ]

Providing Stewardship and Accountability
Institutes of Excellence
The Power of Volunteers
Financial Statement Discussion and Analysis
Auditor's Report and Financial Statement



Providing Stewardship and Accountability

CIHR reports to Parliament through the Minister of Health. Its Governing Council is chaired by CIHR's President and comprises 20 Canadians who have been appointed by Order-in-Council to renewable three-year terms. Council members represent a wide range of backgrounds and disciplines, reflecting CIHR's broad mandate and vision.

CIHR's Governing Council, 2006-07

Dr. Alan Bernstein
(Chair)
President
Canadian Institutes of Health Research

Dr. James Brien
Professor of Pharmacology and Toxicology
Director of Research
Faculty of Health Sciences
Queen's University

Dr. Michel Bureau
Professor
Faculty of Medicine
University of Sherbrooke
Director General
Ministère de la Santé et des Services sociaux du Québec

Dr. Harvey Chochinov
Canada Research Chair in Palliative Care
Professor of Psychiatry
University of Manitoba and CancerCare Manitoba

Dr. Nancy Edwards
(Vice-Chair)
Professor
School of Nursing
Department of Epidemiology and Community Medicine
Director
Community Health Research Unit
University of Ottawa

Dr. Brett Finlay
Professor
Michael Smith Laboratories
Department of Biochemistry and Molecular Biology
University of British Columbia

Dr. Victor Ling (until September 2006)
(Associate Vice-Chair)
Vice President
BC Cancer Agency

Dr. Patrick John McGrath
Professor of Psychology, Pediatrics and Psychiatry
Dalhousie University

Dr. Louise Nadeau (until June 2006)
(Vice-Chair)
Professor
Department of Psychology
University of Montreal

Dr. Rodney Ouellette
Director
Molecular Pathology Laboratory
CEO & Scientific Director
Beauséjour Medical Research Institute
Head of Research
Dr. Georges-L. Dumont Regional Hospital

Dr. Arthur Porter
Director General and CEO
McGill University Health Centre

Dr. Ray Rajotte
Professor of Surgery and Medicine
Director, Surgical-Medical Research Institute
Director, Islet Transplantation Group
University of Alberta

Dr. Carol Richards
Director
Centre for Interdisciplinary
Research in Rehabilitation and Social Integration
Laval University

Mr. Morris Rosenberg (ex officio)
Deputy Minister
Health Canada

Dr. Janet Rossant
Chief of Research
Hospital for Sick Children

Mr. Joseph Rotman (until June 2006)
Chairman and CEO
Roy L. Capital Corporation

Dr. Jean Rouleau
Dean of Medicine
University of Montreal

Dr. Robert Sheldon
Professor and Associate Dean of Clinical Research
Faculty of Medicine, University of Calgary
Vice-President, Research
Calgary Health Region

Mr. Arnold Steinberg
(Deputy Vice-Chair)
Principal, Retail and Investment Banking
Cleman Ludmer Steinberg, Inc.

Dr. Bill Thomlinson
Executive Director
Canadian Light Source Inc.
University of Saskatchewan

Dr. Cornelia Wieman
Co-Director
Indigenous Health Research
Development Program
Assistant Professor
Department of Public Health Sciences
Faculty of Medicine
University of Toronto

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Institutes of Excellence

CIHR is composed of 13 innovative Institutes. These Institutes bring together all partners in the research process - those who fund research, those who carry it out and those who use its results - to share ideas and focus on what Canadians need: good health and the means to prevent and fight diseases when they happen.

Each Institute is headed by a Scientific Director who is a leader in his or her field. Scientific Directors receive guidance from their Institute Advisory Boards, made up of volunteers from all areas of the health research community.

The following are CIHR's 13 Institutes and their Scientific Directors:

CIHR's Institute of Aboriginal Peoples' Health
Dr. Jeff Reading
University of Victoria

CIHR's Institute of Aging
Dr. Anne Martin-Matthews
University of British Columbia

CIHR's Institute of Cancer Research
Dr. Philip Branton
McGill University

CIHR's Institute of Circulatory and Respiratory Health
Dr. Peter Liu
University Health Network
University of Toronto

CIHR's Institute of Gender and Health
Dr. Miriam Stewart
University of Alberta

CIHR's Institute of Genetics
Dr. Roderick McInnes
Hospital for Sick Children
University of Toronto

CIHR's Institute of Health Services and Policy Research
Dr. Morris Barer
(until August 31, 2006)
University of British Columbia

Dr. Colleen M. Flood
(as of September 1, 2006)
University of Toronto

CIHR's Institute of Human Development, Child and Youth Health
Dr. Michael Kramer
Montreal Children's Hospital
McGill University

CIHR's Institute of Infection and Immunity
Dr. Bhagirath Singh
University of Western Ontario

CIHR's Institute of Musculoskeletal Health and Arthritis
Dr. Cyril Frank
(until December 31, 2006)
University of Calgary

Dr. Jane Aubin
(as of January 1, 2007)
University of Toronto

CIHR's Institute of Neurosciences, Mental Health and Addiction
Dr. Rémi Quirion
Douglas Hospital Research Centre
McGill University

CIHR's Institute of Nutrition, Metabolism and Diabetes
Dr. Diane Finegood
Simon Fraser University

CIHR's Institute of Population and Public Health
Dr. John Frank
University of Toronto

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The Power of Volunteers

Volunteers are the backbone of CIHR's reputation for excellence. They help to set research priorities and strategic directions, ensure that CIHR funding is allocated only to the very best research proposals and provide accountability to the people of Canada - the source of CIHR funding - and to the research community.

Each year, more than 2,200 expert reviewers volunteer their time to one of CIHR's peer review committees, assessing the strengths and weaknesses of each of the many thousands of funding applications CIHR receives. Their work is supplemented by that of thousands of external reviewers who submit written reports for consideration by peer review committees. CIHR's peer review system ensures that CIHR's funding process is fair and open, that taxpayers' money is spent wisely and that only the best and the brightest researchers are funded.

CIHR recognizes the dedication of its volunteers and thanks them for their continuing commitment to improving the lives of Canadians. A full listing of all CIHR volunteers can be found in The Power of Volunteers 2006-2007.

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Financial Statement Discussion and Analysis


Financial Highlights:


Analysis:

CIHR's growth is almost entirely dependent on increases to its appropriations approved by Parliament. The 6.2% increase to the 2006-07 CIHR budget resulted in commensurate increases to its net costs of operations which in turn is dominated by Grants and Award expenditures. Grants and Award expenses in 2006-07 totaled $810.2 million, an increase of $41.4 million or 5.4% as compared to 2005-06.

The following table indicates how 2006-07 Grants and Awards expenses were allocated by program area. Priority is given to funding health research and researchers through open competitions, strategic initiatives and knowledge translation. CIHR also participates with other federal agencies in a number of programs, including the Canada Research Chairs and Networks of Centres of Excellence.

As the graphic indicates, CIHR invests the largest share of its budget on research grants and personnel support awards in "open" competitions, enabling individual researchers, or groups of investigators, to pursue their own research priorities. Applications for assistance undergo rigorous peer review by committees of experts in the field. This process helps ensure that only those proposals that meet internationally accepted standards of excellence are funded.

Strategic Initiatives comprise the second largest area of investment and it targets high priority research areas identified by CIHR's Institutes after broad consultations with stakeholders and partners. These strategic initiatives address emerging health threats and other important health issues of concerns to Canadians such as obesity, cancer, vulnerable populations such as youths and Aboriginals or measures to improve the effectiveness of the health-care system itself.

Knowledge Translation (KT) is a critical and growing part of CIHR's mandate focused on the synthesis, exchange and ethically sound application of knowledge to accelerate the capture of the benefits of research for Canadians through improved health, more effective services and products and a strengthened health-care system.

2006-07 Grants and Awards Expenses1
$810.2 million

2006-07 Grants and Awards Expenses

Note 1: Figures do not include Refunds of previous years' expenses. Figures may vary due to rounding.

As noted earlier, the key business driver for CIHR is being provided Parliamentary Appropriations by the Federal Government. The table below summarizes the Parliamentary Appropriations received by CIHR in fiscal year 2006-07:

Summary of Parliamentary Appropriations

(in millions of dollars)

    2006-07
Main
Estimates

2006-07
Supplementary
Estimates

2006-07
Total
Appropriations

Vote 15 - Operating Expenses
(including Salaries & Employee Benefits)
45.9 - 45.9
2006 Operating Budget Carryforward - 1.9 1.9
2006 Federal Budget Increase - 0.7 0.7
Funding for Fabry's Disease - 0.3 0.3
Pandemic Preparedness Funding - 0.3 0.3
Procurement Savings - (0.3) (0.3)
Other Adjustments - (0.5) (0.5)
Transfer to CIHR Vote 20 - (1.0) (1.0)

  Total Vote 15 - Operating Expenditures 45.9 1.4 47.3
Vote 20 - Grants & Awards 786.8 - 786.8
2006 Federal Budget Increase - 16.3 16.3
Funding for Fabry's Disease - 10.6 10.6
Pandemic Preparedness Funding - 2.2 2.2
Transfer from CIHR Vote 15 - 1.0 1.0

Net Transfer of Funds to Other Departments

- (0.7) (0.7)

  Total Vote 20 - Grants & Awards 786.8 29.4 816.2
Total 2006-07 CIHR Parliamentary Operations 832.7 30.8 863.5
Total 2006-07 Authorities Spent     843.3

Total Lapsed Appropriations for 2006-07     20.2

Note: The total CIHR budget for 2006-07, as appropriated by Parliament, increased by $50.4 million over 2005-06 to $863.5 million. CIHR received an additional $30.8 million in Parliamentary Appropriations for 2006-07 through the Supplementary Estimates (see above). CIHR received an additional $19.6 million for 2006-07 through the Annual Reference Level Update (reflected in the Main Estimates column in the table above), including additional funding for programs such as the Canada Research Chairs ($15 million), HIV/AIDS research ($2.4 million) and Canada Graduate Scholarships ($2.0 million).

CIHR lapsed Parliamentary Appropriations in 2006-07 as follows:

(in millions of dollars)

  Vote Lapsed
Appropriations

15 Operating Expenses 3.7
20 Grants 16.5

  Total Lapsed Parliamentary Appropriations 20.2

Risks and Uncertainties:

Managing Multi-Year Commitments within an Annual Appropriation Funding Model

Rising Demand for Research Funding

Variance Analysis:

Change in Key Financial Indicators:

As evidenced by the table below, CIHR expenses and other key financial indicators have increased in relative proportion to the increased Parliamentary Appropriations received by CIHR in 2006-07.
(in millions of dollars)

  2006-07 2005-06 Increase % Increase

Parliamentary Appropriations 863.5 813.1 50.4 6.2 %
Net Cost of Operations 847.2 801.8 45.4 5.7 %
Grants & Awards Expenses 810.2 768.8 41.4 5.4 %
Operations and Administration Expenses 49.5 47.4 2.1 4.4 %
Salaries and Employee Benefits 31.7 29.6 2.1 7.1 %

Change in Expenditures by Strategic Outcome:
(in millions of dollars)

Strategic Outcome 2006-07 2005-06 Increase % Increase

Health Research 511.0 475.6 35.4 7.4 %
Health Researchers in Innovative Environments 284.3 275.2 9.1 3.3 %
Transforming Health Research into Action 62.5 61.7 0.8 1.3 %

Total Expenses

857.8 812.5 45.3 5.6 %

Trend Analysis:

CIHR Parliamentary Appropriations:
(in millions of dollars)

CIHR Parliamentary Appropriations

CIHR Net Cost of Operations:
(in millions of dollars)

CIHR Net Cost of Operations

CIHR Grants and Awards Expenses:
(in millions of dollars)

CIHR Grants and Awards Expenses

CIHR Operations and Administration Expenses:
(in millions of dollars)

CIHR Operations and Administration Expenses

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Auditor's Report and Financial Statements


Canadian Institutes of Health Research
Management Responsibility for Financial Statements

Responsibility for the integrity and objectivity of the accompanying financial statements of the Canadian Institutes of Health Research (CIHR) for the year ended March 31, 2007 and all information contained in these statements rests with CIHR's management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies and year-end instructions issued by the Office of the Comptroller General, which are consistent with Canadian generally accepted accounting principles for the public sector.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgement and gives due consideration to materiality. To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of CIHR's financial transactions. Financial information submitted to the Public Accounts of Canada and included in CIHR's Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility and by communications programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the organization.

The Standing Committee on Performance Measurement, Evaluation and Audit, appointed by the Governing Council of CIHR, has reviewed these statements with management and the auditors, and has reported to the Governing Council. The Governing Council has approved the financial statements.

The financial statements of CIHR have been audited by the Auditor General of Canada, the independent auditor for the Government of Canada.

Approved by:

James Roberge, CMA
Chief Financial Officer
Dr. Alan Bernstein, O.C., FRSC
President

June 1, 2007



Auditor's Report

To the Canadian Institutes of Health Research and the Minister of Health

I have audited the statement of financial position of the Canadian Institutes of Health Research (CIHR) as at March 31, 2007 and the statements of operations, equity and cash flow for the year then ended. These financial statements are the responsibility of CIHR's management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In my opinion, these financial statements present fairly, in all material respects, the financial position of CIHR as at March 31, 2007 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Nancy Y. Cheng, FCA
Assistant Auditor General
for the Auditor General of Canada

Ottawa, Canada
June 1, 2007



Statement of Operations
For the Year Ended March 31

(in thousands of dollars)
  2007
2006
Expenses (Note 4)
  Health research 511,042 475,620
  Health researchers in innovative environments 284,348 275,206
  Transforming health research into action 62,421
61,674

Total Expenses

857,811
812,500
Revenues (Note 5)
  Health research 6,319 6,264
  Health researchers in innovative environments 3,516 3,624
  Transforming health research into action 772 812
Total Revenues 10,607
10,700
Net Cost of Operations 847,204
801,800

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



Statement of Financial Position
As at March 31

(in thousands of dollars)
  2007
2006
Assets
Financial Assets
  Due from the Consolidated Revenue Fund 15,751 18,640
  Accounts receivable:    
    Other Federal Government departments 678 367
    External parties 395 353
  Advances 196
191

Total financial assets

17,020 19,551
 
Non-financial assets
  Prepaid expenses 445 542
  Tangible capital assets (Note 6) 3,904
4,049
Total non-financial assets 4,349
4,591

Total Assets

21,369
24,142
Liabilities
  Accounts payable and accrued liabilities    
    Other Federal Government departments 444 381
    External parties 2,577 3,913
  Vacation pay and compensatory leave 1,110 910
  Deferred revenue (Note 7) 12,730 14,346
  Employee severance benefits (Note 8) 5,248
4,633

Total Liabilities

22,109
24,183

Equity of Canada

(740)
(41)

Total Liabilities and Equity of Canada

21,369
24,142

Contingent liabilities (Note 9)

Contractual obligations (Note 10)

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


Approved by Governing Council:

Dr. Alan Bernstein, O.C., FRSC
Chair

Approved by Management:

James Roberge, CMA
Chief Financial Officer



Statement of Equity
For the year ended March 31

(in thousands of dollars)
  2007
2006
Equity of Canada, Beginning of Year (41) 273
  Net cost of operations (847,204) (801,800)
  Net cash provided by Government 844,170 790,458
  Change in due from the Consolidated Revenue Fund (2,889) 6,223
  Services provided without charge by other
Government departments (Note 11)
5,224
4,805
Equity of Canada, End of Year (740)
(41)

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



Statement of Cash Flow
For the Year Ended March 31

(in thousands of dollars)
  2007
2006
Operating Activities
  Net cost of operations 847,204 801,800
  Non-cash items:
    Amortization of tangible capital assets (1,498) (1,376)
   

Services provided without charge by other
Government departments

(5,224) (4,805)
    Gain on disposal of capital assets 4
-
  (6,718) (6,181)
  Variations in Statement of Financial Position:
    Increase (decrease) in accounts receivable
and advances
358 (124)
   

(Decrease) increase in prepaid expenses

(97) 342
    Decrease (increase) in liabilities
2,074
(6,856)
  2,335
(6,638)
Cash Used by Operating Activities 842,821
788,981
 
Capital Investment Activities    
  Acquisitions of tangible capital assets 1,358 1,477
 

Proceeds on disposal of capital assets

(9)
-
Cash Used by Capital Investment Activities 1,349
1,477
Financing Activities
  Net Cash Provided by Government of Canada 844,170
790,458

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



Notes to the Financial Statements
For the Year Ended March 31, 2007

1. Authority and Objectives

The Canadian Institutes of Health Research (CIHR) was established in June 2000 under the Canadian Institutes of Health Research Act, replacing the former Medical Research Council of Canada. It is listed in Schedule II to the Financial Administration Act as a departmental corporation.

CIHR's objective is to excel, according to international standards of scientific excellence, in the creation of new knowledge, and its translation into improved health, more effective health services and products, and a strengthened Canadian health care system. CIHR achieves these objectives through three strategic outcomes. The first strategic outcome is outstanding research, achieved by funding excellent and ethical health research across all disciplines that are relevant to health. The second strategic outcome is outstanding researchers in innovative environments, achieved by providing funding to develop and sustain health researchers in vibrant, innovative and stable research environments. The third strategic outcome is transforming health research into action, achieved by CIHR's knowledge translation activities and funding aimed to accelerate the transformation of research results into health benefits for Canadians and an improved health care system as well as helping to move new research breakthroughs toward potential commercial applications.

CIHR is led by a President who is the Chairperson of a Governing Council of not more than nineteen other members appointed by the Governor in Council. The Governing Council sets overall strategic direction, goals and policies and oversees programming, resource allocation, ethics, finances, planning and accountability.

CIHR has thirteen Institutes that focus on identifying the research needs and priorities for specific health areas, or for specific populations, then developing strategic initiatives to address those needs. Each Institute is led by a Scientific Director who is guided by an Institute Advisory Board, which strives to include representation of the public, researcher communities, research funders, health professionals, health policy specialists and other users of research results.

CIHR's grants, awards, and operating expenditures are funded by budgetary lapsing authorities. Employee benefits are funded by statutory authorities.

2. Significant Accounting Policies

These financial statements have been prepared in accordance with Treasury Board accounting policies and year-end instructions issued by the Office of the Comptroller General, which are consistent with Canadian generally accepted accounting principles for the public sector. The most significant accounting policies are as follows:

(a) Parliamentary appropriations - CIHR is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to CIHR do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the bases of reporting.

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

(c) Due from the Consolidated Revenue Fund represents the amount of cash that CIHR is entitled to draw from the Consolidated Revenue Fund without further appropriations, in order to discharge its liabilities.

(d) Revenues

(e) Expenses - Expenses are recorded on the accrual basis:

(f) Refunds of previous years' expenses - These amounts include the return of grants and awards funds to CIHR in the current fiscal year for expenses incurred in previous fiscal years due to cancellations; refunds of previous years' expenses related to goods or services; and adjustments of previous years' accounts payable. These refunds and adjustments are recorded as expenses in the financial statements but are recorded as revenue on an appropriation basis and therefore are excluded when determining current year appropriations used.

(g) Employee future benefits

  1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. CIHR's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation of CIHR to the Plan. Current legislation does not require CIHR to make contributions for any actuarial deficiencies of the Plan.

  2. Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

(h) Accounts receivable - These are stated at amounts expected to be ultimately realized. A provision for doubtful accounts is made for any amounts where recovery is considered uncertain.

(i) Contingent liabilities - Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense is 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.

(j) Tangible capital assets - All tangible capital assets having an individual initial cost of $5,000 or more are recorded at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the capital asset as follows:

Asset class Amortization period

Informatics hardware 3-5 years
Informatics software 3 years
Office equipment 10 years
Motor vehicles 5 years

Amounts included in work-in-progress are uncompleted capital projects which are transferred to informatics software upon completion, and are then amortized according to CIHR's policy.

(k) Measurement uncertainty - The preparation of these financial statements in accordance with Treasury Board accounting policies and year-end instructions issued by the Office of the Comptroller General, which are consistent with Canadian generally accepted accounting principles for the public sector, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, the liability for vacation pay and compensatory leave, employee severance benefits and the useful life of tangible capital assets. Actual results could differ significantly from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary Appropriations

CIHR receives most of its funding through annual parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through parliamentary appropriations in prior, current or future years. Accordingly, CIHR has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Reconciliation of net cost of operations to current year appropriations used

  2007
2006
(in thousands of dollars)
Net cost of operations 847,204 801,800
Adjustments for items affecting net cost of operations but not
affecting appropriations:
  Add (Less):
    Services provided without charge (5,224) (4,805)
    Gain on disposal of capital assets 4 -
    Refunds of previous years' expenses 2,432 4,132
    Employee severance benefits (615) (807)
    Amortization of tangible capital assets (1,498) (1,376)
    Vacation pay and compensatory leave (200) 174
    Other adjustments (94)
(61)
      (5,195) (2,743)
Adjustments for items not affecting net cost of operations
but affecting appropriations
  Add (Less):
    Acquisitions of tangible capital assets 1,358 1,477
    Prepaid expenses (97)
342
Current year appropriations used 843,270
800,876

(b) Appropriations provided and used

  2007
2006
(in thousands of dollars)
Parliamentary appropriations provided:    
Vote 15 - Operating expenditures 43,021 39,902
Less:    
Lapsed appropriation (3,657)
(1,393)
  39,364
38,509
Vote 20 - Grants 816,183 768,980
Less:    
Lapsed appropriation (16,536)
(10,832)
  799,647 758,148
Statutory contributions to employee benefit plans 4,259
4,219
Current year appropriations used 843,270
800,876

(c) Reconciliation of net cash provided by Government to Parliamentary appropriations used

  2007
2006
(in thousands of dollars)
Net cash provided by Government 844,170 790,458
Refunds of previous years' expenses 2,432 4,132
Cash proceeds on disposal of capital assets 9 -
Change in net position in the Consolidated Revenue Fund
  Variation in accounts receivable and advances (358) 124
  Variation in accounts payable and accrued liabilities (1,273) 976
  Variation in deferred revenue (1,616) 5,247
  Other adjustments (94)
(61)
 
(3,341)
6,286
Current year appropriations used 843,270
800,876

4. Expenses

  2007
2006
(in thousands of dollars)
Grants and awards
  Open competitions 487,917 478,109
  Strategic initiatives 195,762 171,878
  Institute support grants 13,000 13,000
  Knowledge translation 3,864 5,458
  Canada research chairs 82,205 72,900
  Networks of centres of excellence 27,500
27,500
Total grants and awards 810,248 768,845
Less: Refunds of previous years' grants and awards (1,972)
(3,777)
  808,276
765,068
Operations and administration
  Salaries and employee benefits 31,683 29,594
  Professional and special services 4,845 6,184
  Travel 3,425 3,957
  Accommodation 3,314 2,865
  Furniture, equipment and software 1,998 1,185
  Amortization of tangible capital assets 1,498 1,376
  Communication 1,450 1,308
  Other 1,322
963
Total operations and administration 49,535
47,432
Total expenses 857,811
812,500

5. Revenues

The following are the revenues recognized for the year:

  2007
2006
(in thousands of dollars)
Donations for health research 9,362 9,499
Cost sharing agreements with other Government departments 1,240 1,198
Gain on disposal of capital assets 4 -
Endowments for health research 1 2
Other -
1
Total revenues 10,607
10,700

6. Tangible Capital Assets

(in thousands of dollars)

Cost Accumulated amortization  
Capital asset class Opening balance Acquisitions Transfers, disposals
and
write-offs
Closing balance Opening balance Acquisitions Transfers, disposals
and
write-offs
Closing balance 2007
Net
Book Value
2006
Net
Book Value

Informatics hardware

Informatics software

Office equipment

Vehicles

Work-in-progress

1,817

6,574

345

23

14

111

1,206

-

32

9

-

-

-

(23)

-

1,928

7,780

345

32

23

1,270

3,347

89

18

-

276

1,184

34

4

-

-

-

-

(18)

-

1,546

4,531

123

4

-

382

3,249

222

28

23

547

3,227

256

5

14

Total 8,773 1,358 (23) 10,108 4,724 1,498 (18) 6,204 3,904 4,049

Amortization expense (in thousands) for the year ended March 31, 2007 is $1,498 (2006 - $1,376).

7. Deferred Revenue

Monies received as donations from various organizations and individuals for health research as well as interest on endowments are recorded as deferred revenue until such time that they are disbursed in accordance with agreements between the contributor and CIHR or in accordance with the terms of the endowments.

The transactions relating to these accounts are as follows:

  2007
2006
(in thousands of dollars)
Donations for health research
Balance, beginning of the year 14,344 9,097
  Add:
    Donations received 7,191 14,449
    Interest earned 553 297
  Less:
    Grants expensed 9,362
9,499
Balance, end of the year 12,726
14,344
Interest on endowments for health research
Balance, beginning of the year 2 2
  Add:
    Interest earned 3 2
  Less:
    Miscellaneous expenses 1
2
Balance, end of the year 4
2
Total deferred revenue 12,730
14,346

8. Employee Benefits

Employees of CIHR are entitled to specific benefits on or after termination or retirement, as provided for under various collective agreements or conditions of employment.

(a) Pension benefits - CIHR's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, multiplied by the average of the best five consecutive years of earnings. The benefits are integrated with the Canada/Quebec Pension Plans benefits and they are indexed to inflation. Both the employees and CIHR contribute to the cost of the Plan. CIHR's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

The 2006-07 expense represents approximately 2.3 times (2.6 in 2005-06) the contributions by employees.

CIHR's and employees' contributions to the Public Service Pension Plan for the year were as follows:

  2007
2006
(in thousands of dollars)
CIHR's contributions 3,139 3,121
Employees' contributions 1,378 1,203

(b) Severance benefits - CIHR provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:

  2007
2006
(in thousands of dollars)
Accrued benefit obligation, beginning of year 4,633 3,826
Expense for the year 898 1,024
Benefits paid during the year (283)
(217)
Accrued benefit obligation, end of year 5,248
4,633

9. Contingent Liabilities

A legal suit for employment equity was initiated by the Public Service Alliance of Canada against Her Majesty the Queen naming certain separate employer organizations of the Government of Canada, including the Canadian Institutes of Health Research (CIHR), as defendants. The amount of this claim, as it relates to CIHR, is estimated to be $747,000. In management's opinion, the outcome of this litigation is not presently determinable and no estimated liability has been accrued or expense recorded in the financial statements.

10. Contractual Obligations

CIHR is committed to disburse grants and awards in future years subject to the appropriation of funds by Parliament. In addition, the nature of CIHR's operating activities result in some multi-year contracts whereby CIHR will be committed to make some future payments when the goods or services are rendered. Future year contractual obligations are as follows.

(in thousands of dollars)
2008 2009 2010 2011 2012 and
thereafter
Total

Grants and awards

Operating

730,371

1,989

520,055

167

324,947

75

192,438

-

94,468

-

1,862,279

2,231

Total 732,360 520,222 325,022 192,438 94,468 1,864,510

11. Related Party Transactions

CIHR is related in terms of common ownership to all Government of Canada departments, agencies, and Crown Corporations. CIHR enters into transactions with these entities in the normal course of business and on normal trade terms.

During the year, CIHR received services which were obtained without charge from other Government departments as presented in part (a):

(a) Services provided without charge

  2007
2006
(in thousands of dollars)
Accommodation provided by Public Works and
Government Services Canada
3,314 2,865
Employer's contribution to the health and dental
insurance plans provided by Treasury Board Secretariat
1,772 1,864
Audit services provided by the Office of the Auditor
General of Canada
138
76
Total services provided without charge
by other Government departments
5,224
4,805

(b) Administration of programs on behalf of other government departments
CIHR administers funds received from other federal departments and agencies to issue grants, awards and related payments on their behalf. During the year, CIHR administered $1,239,838 ($1,198,175 in 2006) in funds for grants and awards. These amounts are reflected in CIHR's Statement of Operations as both revenues and expenses.

(c) Administration of CIHR funds by other government departments
Other federal departments and agencies administer funds on behalf of CIHR to issue grants, awards and related payments. During the year, other federal departments and agencies administered $87,331,623 ($76,965,301 in 2006) in funds for grants and awards. These amounts are reflected in CIHR's Statement of Operations as expenses.

12. Financial Instruments

The fair values of financial assets and liabilities approximate the carrying amounts of these instruments due to the short period to maturity.

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