Canadian Nuclear Safety Commission (CNSC) Annual Report 2007-08

Funding of Operations

CNSC's operations are currently funded through an annual appropriation from Parliament. Its requirements are largely driven by the level of demand for licensing and regulatory oversight and by Canada's international commitments. When its workload increases, CNSC applies to the Treasury Board Secretariat to increase its cost-recoverable expenditures and related fee revenues or to receive new program funding.

The Government of Canada recovers most costs associated with CNSC's regulatory activities from licensees, in accordance with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations (2003). CNSC collects fees and deposits them to the Consolidated Revenue Fund. Some licensees, such as hospitals and universities, are exempt from paying fees. In addition, fees are not charged for activities that result from CNSC obligations that do not provide a direct benefit to identifiable licensees. These include activities with respect to Canada's international obligations (including the non-proliferation of nuclear weapons), public responsibilities such as emergency management and public information programs, and updating of the NSCA and associated regulations as appropriate.

Recently, due to growth in the nuclear sector, CNSC has experienced rapidly increasing demand for its licensing, licensee certification and pre-project power plant design review activities, and consequently explored alternate funding mechanisms to meet future resource requirements. In 2007-08, CNSC received approval from Treasury Board for revenue spending authority commencing in 2008-09. This authority is being phased in over a two-year period, with full implementation of revenue spending authority for all cost-recoverable activities effective for 2009-10. The authority will enable CNSC to address growth within the nuclear sector.

Additional Funding Resources Received for 2007-08

For 2007-08, CNSC's actual expenditures were $99.8 million. Fees received were approximately $72.6 million. As a result of growing activity in all areas of the nuclear sector over the past several years, CNSC has experienced a substantial increase in its workload in most areas of its responsibility. In its 2006 budget, the Government of Canada recognized CNSC's need to expand and allocated it additional funds of more than $93 million, the majority of which is recoverable from licensees, to improve regulatory oversight over a five-year period, of this funding, $23.9 million was allocated to the plan for 2007-08. These additional resources enabled CNSC to fund the growth of its regulatory program, including overseeing nuclear power reactor refurbishment projects, expansion of uranium mining, research facilities, waste management, the use of nuclear substances, (including healthcare facilities), and addressing risks to security of nuclear facilities, while implementing a range of improvement initiatives. In the 2007-08 Supplementary Estimates “B”, CNSC requested $0.96 million from Treasury Board to carry out a specific Commission Tribunal Order. These resources were required for the seizure and disposition of nuclear substances and prescribed equipment held by a licensee.

In addition, after the receipt of two applications for site licensing for construction of new power reactors in Canada, CNSC requested and received approval for incremental funding in 2006-07 that included funding of $5.6 million for 2007-08 to process these applications. These funds are also required to modernize CNSC’s regulatory framework for the construction of new power plants in Canada. CNSC will continue to prepare to meet new demands with respect to new nuclear power plants and its responsibilities for domestic safeguards and non-proliferation as it shifts to a revenue-spending regime.

Financial Statements

Management Responsibility for Financial Statements

The integrity and objectivity of the accompanying financial statements of the Canadian Nuclear Safety Commission (CNSC) for the year ended March 31, 2008, and all information included in its annual report, are the responsibility of CNSC 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. 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 CNSC's financial transactions. Financial information submitted to the Public Accounts of Canada and included in this annual report and CNSC's Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal controls 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 and regulations as well as CNSC policies and statutory requirements such as the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations. 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 communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout CNSC.

CNSC's external auditor, the Auditor General of Canada, has audited the financial statements and at the specific request of CNSC, compliance with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations. The Auditor General has reported on her audit and compliance findings to CNSC and to the Minister of Natural Resources.


Michael Binder
President


Claude Caron
Vice-President and Chief Financial Officer

Ottawa, Canada May 30, 2008

AUDITOR’S REPORT

To the Canadian Nuclear Safety Commission and the Minister of Natural Resources

I have audited the statement of financial position of the Canadian Nuclear Safety Commission as at March 31, 2008 and the statements of operations, equity of Canada and cash flows for the year then ended and the Commission's compliance with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations pursuant to the Nuclear Safety and Control Act. These financial statements and compliance with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations are the responsibility of the Commission’s management. My responsibility is to express an opinion, based on my audit, on these financial statements and compliance with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations pursuant to the Nuclear Safety and Control Act.

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 and whether the Commission has complied with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and evidence supporting compliance. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation and compliance with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations.

In my opinion, these financial statements present fairly, in all material respects, the financial position of the Commission as at March 31, 2008 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. Further, in my opinion, the Canadian Nuclear Safety Commission has complied, in all significant respects, with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations pursuant to the Nuclear Safety and Control Act.


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

Ottawa, Canada May 30, 2008

Statement of Financial Position as at March 31

2008 2007
Assets
Financial assets:
Due from the Consolidated Revenue Fund $ 17,461,994 $ 8,406,396
Accounts receivable (note 4) 9,764,934 8,324,188
27,226,928 16,730,584
Non-financial assets:
Prepaid expenses 196,263 582,032
Tangible capital assets (note 5) 3,041,461 3,428,462
Total assets $ 30,464,652 $ 20,741,078
Liabilities and equity of Canada
Accounts payable and accrued liabilities $ 8,333,969 $ 8,406,396
Payable to licensees 9,128,025 -
Vacation pay 4,644,528 3,992,297
Deferred revenue (note 6) 1,671,320 6,461,887
Employee severance benefits (note 7b) 13,534,978 11,524,621
37,312,820 30,385,201
Equity of Canada (6,848,168) (9,644,123)
Total liabilities and equity of Canada $ 30,464,652 $ 20,741,078

Contractual obligations and contingent liabilities (note 10). The accompanying notes are an integral part of these financial statements.

Approved by:

Michael Binder
President

Claude Caron
Vice-President and Chief Financial Officer

Statement of Operations and Equity for the year ended March 31

2008 2007
Revenues
Licence fees $ 72,565,186 $ 58,253,077
Contract projects - 1,695,707
Other 11,076 34,343
Total revenues (note 9) 72,576,262 59,983,127
Expenses
Salaries and employee benefits 76,815,904 65,525,990
Professional and special services 17,094,416 13,687,346
Accommodation 5,755,992 4,696,942
Furniture, repairs and rentals 4,884,188 4,077,910
Travel and relocation 4,256,915 4,168,898
Communication and information 2,054,498 2,292,936
Grants and contributions 994,520 239,226
Utilities, materials and supplies 841,002 809,218
Other 740,533 789,147
Total expenses (note 9) 113,437,968 96,287,613
Net cost of operations $ 40,861,706 $ 36,304,486

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

Statement of Equity of Canada for the year ended March 31

2008 2007
Equity of Canada at beginning of year $ (9,644,123) $ (7,142,721)
Net cost of operations (40,861,706) (36,304,486)
Services provided without charge (note 12a) 10,117,084 8,629,299
Net cash provided by government (note 3c) 24,484,980 25,077,310
Change in due from the Consolidated Revenue Fund 9,055,598 96,475
Equity of Canada at end of year $ (6,848,167) $ (9,644,123)

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

Statement of Cash Flows for the year ended March 31

2008 2007
Operating activities
Net cost of operations $ 40,861,706 $ 36,304,486
Non-cash items:
Amortization of tangible capital assets (note 5) (426,500) (523,429)
Services provided without charge by government departments and agencies (note 12a) (10,117,084) (8,629,299)
Net (loss) or gain on disposal of surplus assets (55,362) 25,301
Variations in statement of financial position:
Increase in accounts receivable 1,440,746 2,743,027
(Decrease) or increase in prepaid expenses (385,769) 237,665
Increase in liabilities (6,927,619) (5,868,385)
Cash used by operating activities 24,390,118 24,289,366
Capital investment activities
Acquisitions of tangible capital assets (note 5) 102,172 813,245
Proceeds on disposal of surplus assets (7,310) (25,301)
Cash used by capital investment activities 94,862 787,944
Net cash provided by government (note 3c) $ 24,484,980 $ 25,077,310

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

Notes to Financial Statements as at March 31, 2008

1. Authority and objectives

The Canadian Nuclear Safety Commission (CNSC) was established in 1946 by the Atomic Energy Control Act. Prior to May 31, 2000, when the federal Nuclear Safety and Control Act (NSCA) came into effect, CNSC was known as the Atomic Energy Control Board (AECB). CNSC is a departmental corporation named in Schedule II to the Financial Administration Act and reports to Parliament through the Minister of Natural Resources.

The Nuclear Safety and Control Act provides comprehensive powers to CNSC to establish and enforce national standards for nuclear energy in the areas of health, safety and environment. It establishes a basis for implementing Canadian policy and fulfilling Canada's obligations with respect to the non-proliferation of nuclear weapons. CNSC is empowered to require financial guarantees, order remedial action in hazardous situations and require responsible parties to bear the costs of decontamination and other remedial measures.

CNSC's objectives are to:

  • regulate the development, production and use of nuclear energy and the production, possession and use of nuclear substances, prescribed equipment and information in order to: a) prevent unreasonable risk to the environment, to the health and safety of persons and to national security; and b) achieve conformity with measures of control and international obligations to which Canada has agreed; and
  • disseminate scientific, technical and regulatory information concerning: a) the activities of CNSC; b) the development, production, possession, transport and use of nuclear energy and substances; and c) the effects of nuclear energy and substances use on the environment and on the health and safety of persons.

CNSC also administers the Nuclear Liability Act, including designating nuclear installations and prescribing basic insurance to be carried by the operators of such nuclear installations, and the administration of supplementary insurance coverage premiums for these installations.

Pursuant to the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations, CNSC recovers costs related to its regulatory activities from users licensed under the NSCA. These costs include the technical assessment of licence applications, compliance inspections and the development of licence standards.

During the fiscal year, CNSC made administrative amendments to its Cost Recovery Fees Regulations. As a result of these changes, CNSC is required to refund payments received against estimated fees that are in excess of the year-end actual fee calculation. This change does not impact the calculation of deferred revenues where the licence period goes beyond the end of the fiscal year.

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 significant accounting policies are:

a) Parliamentary appropriations

CNSC is financed by the Government of Canada through parliamentary appropriations. Appropriations provided to CNSC 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 two bases of reporting.

b) Net cash provided by government

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

c) Due from the Consolidated Revenue Fund

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

d) Revenue

Revenue is recognized in the period in which the underlying transaction or event occurred that gave rise to the revenue. Licence fee revenue is recognized on a straight-line basis over the period to which the fee payment pertains (normally three months or one year). Licence fees received for future year licence periods are recorded as deferred revenue. Revenue from licence fees, special projects and other sources is deposited to the Consolidated Revenue Fund and is not available for use by CNSC.

On December 17, 2007, the Government of Canada conferred on CNSC the authority to respend licence fee revenue. The authority will be phased in over the 2008–09 and 2009–10 fiscal years. The first phase, effective April 1, 2008, includes the following:

  • new licence applications for Class I nuclear facilities of all applications received on or after October 1, 2007
  • applications for licences for new reactors received on or after August 17, 2006
  • new applications for uranium mines or mills, inclusive of all applications received on or after October 1, 2007, to construct or operate a mine or mill
  • all new applications, received on or after October 1, 2007, for nuclear waste activities that are not located at a Class I or Class II nuclear facility or at a mine or mill

The second phase, effective April 1, 2009, will include all other cost-recovered activities.

Certain educational institutions, not-for-profit research institutions wholly owned by educational institutions, publicly funded health care institutions, not-for-profit emergency response organizations and federal government departments are not subject to the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations. CNSC provides licences to these organizations free of charge. The value of licences provided free of charge is calculated on the same basis as licence fees for organizations subject to the regulations.

e) Payable to licensees

Payable to licensees represents the excess of collections on estimated fees charged over the actual fees earned as calculated at year-end.

f) Vacation pay and compensatory leave

Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.

g) Grants and contributions

Grants are recognized in the year in which the conditions for payment are met. Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement.

h) Services provided without charge by other government departments and agencies

Services provided without charge by other government departments and agencies are recorded as operating expenses at their estimated cost. These include services such as accommodation provided by Public Works and Government Services Canada, contributions covering employer's share of employees' insurance premiums and costs paid by Treasury Board Secretariat, salaries and associated legal costs of services provided by Justice Canada, audit services provided by the Office of the Auditor General, and workers' compensation benefits provided by Human Resources and Social Development Canada.

i) Pension benefits

All eligible employees participate in the Public Service Pension Plan, a multi-employer plan, administered by the Government of Canada. CNSC's contributions to the plan are charged to expenses in the year incurred and represent the total CNSC obligation to the plan. Current legislation does not require CNSC to make contributions for any actuarial deficiencies of the plan.

j) Employee severance benefits

Employees are entitled to severance benefits, as provided for under their respective terms of employment. The cost of these benefits is accrued as employees render the services necessary to earn them. The obligation related 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.

k) Accounts receivable

Accounts receivable are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

l) Contingent liabilities

Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

m) Tangible capital assets

Tangible capital assets with an acquisition cost of $10,000 or more are recorded at their acquisition cost. Amortization is calculated on a straight-line basis over the estimated useful life of the asset as follows:

Table: Tangible capital assets

Asset class Amortization period
Buildings 20 to 30 years
Furniture and equipment 5 to 20 years
Informatics equipment and software 2 to 5 years
Motor vehicles 4 years

n) Nuclear Liability Reinsurance Account

CNSC administers the Nuclear Liability Reinsurance Account on behalf of the federal government. CNSC receives premiums paid by the operators of nuclear installations for the supplementary insurance coverage and credits these to the Nuclear Liability Reinsurance Account in the Consolidated Revenue Fund. Since CNSC does not have the risks and rewards of ownership, nor does it have accountability for this account, it does not include any of the associated financial activity or potential liability in its financial statements. Financial activity and liability is, however, reported in note 11 of these financial statements.

o) 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 employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary appropriations

CNSC receives its funding through 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 and future years. Accordingly, CNSC has different net results of operations for the year on a government funding basis than on an accrual accounting basis. These differences are reconciled below.

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

2008 2007
Net cost of operations $ 40,861,706 $ 36,304,486
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (Less):
Amortization of tangible capital assets (426,500) (523,429)
Vacation pay and compensatory leave (652,231) (374,449)
Services provided without charge by other
government departments and agencies
(10,117,084) (8,629,299)
Revenue not available for spending 72,576,262 59,983,127
Employee severance benefits (2,010,357) (2,378,758)
Bad debts (205,728) -
Other expenses 102,144 (170,747)
59,266,506 47,906,445
Adjustments for items not affecting net cost of operations
but affecting appropriations:
Add (Less):
Acquisitions of tangible capital assets 102,172 813,245
Variation in prepaid expenses (385,769) 237,665
(283,597) 1,050,910
Current year appropriations used $ 99,844,615 $ 85,261,841

b) Appropriations provided and used

2008 2007
Parliamentary appropriations voted:
Vote 20 – CNSC operating expenditures $ 93,488,162 $ 84,035,099
Less:
Lapsed appropriation 3,643,534 6,954,701
89,844,628 77,080,398
Statutory:
Spending of proceeds from the disposal of surplus assets 25,301 -
Contributions to employee benefit plans 9,974,686 8,181,443
Current year appropriations used $ 99,844,615 $ 85,261,841

c) Reconciliation of net cash provided by government to current year appropriations used

2008 2007
Net cash provided by government $ 24,484,980 $ 25,077,310
Revenue not available for spending 72,576,262 59,983,127
Change in net position in the Consolidated Revenue Fund:
Variation in accounts receivable (1,440,746) (2,743,027)
Variation in accounts payable and accrued liabilities (72,427) 96,475
Variation in payables to licensees 9,128,025 -
Variation in deferred revenues (4,790,567) 3,018,703
Other adjustments (147,549) (573,078)
Refunds of prior years' expenses 106,637 402,331
Current year appropriations used $ 99,844,615 $ 85,261,841

4. Accounts receivable

2008 2007
Licence fees $ 9,663,089 $ 7,331,816
Other government departments 172,225 607,992
Suppliers 135,348 384,380
Gross receivables 9,970,662 8,324,188
Allowance for doubtful accounts 205,728 -
Net receivables $ 9,764,934 $ 8,324,188

5. Tangible capital assets

6. Deferred Revenue

2008 2007
Balance at beginning of year $ 6,461,887 $ 3,443,184
Less: revenue recognized in licence fees in the year (6,449,922) (3,443,184)
Add: fees received in the year for future year license periods 1,659,355 6,461,887
Balance at end of year $ 1,671,320 $ 6,461,887

As a result of the administrative change referred to in note 1, the deferred revenue for 2007–08 fiscal year includes only the fees collected where the licence period goes beyond the end of the fiscal year.

7. Employee future benefits

a) Pension benefits

CNSC and all eligible 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 5 consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans and they are indexed to inflation. The employer's and employees' contributions to the plan were as follows:

Table: Pension benefits

2008 2007
CNSC contribution to pension plan $ 7,271,546 $ 6,029,723
Employees' contributions $ 3,575,784 $ 2,970,173

CNSC's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the plan's sponsor.

b) Employee severance benefits

CNSC provides severance benefits to its employees based on eligibility, years of service and final salary. This benefit plan is not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:

Table: Employee severance benefits

2008 2007
Accrued benefit obligation, beginning of year $ 11,524,621 $ 9,145,863
Expense for the year 2,821,208 3,298,366
Benefits paid during the year (810,851) (919,608)
Accrued benefit obligation, end of year $ 13,534,978 $ 11,524,621

8. Licences provided free of charge by CNSC

CNSC provides licences free of charge to educational institutions, not-for-profit research institutions wholly owned by educational institutions, publicly funded health care institutions, not-for-profit emergency response organizations, and federal departments. The total value of these licences amounted to $ 8,953,300 (2007 – $8,604,263).

9. Summary of expenditures and revenues by cost recovery fee category

Revenue Licences
provided free
of charge
(note 8)
2008 total value
of licences and
other revenue
2007 total value
of licences and
other revenue
2008 cost of
operations
2007 cost of
operations
Licensing, certification and compliance
Power reactors $ 49,914,392 $ - $ 49,914,392 $ 38,029,224 $ 49,914,394 $ 38,510,606
Non-power reactors 1,403,797 571,709 1,975,506 1,978,188 1,975,507 2,003,228
Nuclear research and test establishments 5,141,436 - 5,141,436 4,139,206 5,141,437 4,191,601
Particle accelerators - 900,343 900,343 623,235 900,343 631,124
Uranium processing facilities 3,361,237 - 3,361,237 2,873,812 3,424,390 2,910,190
Nuclear substance processing facilities 652,625 - 652,625 1,030,886 844,045 1,043,935
Heavy water plants 10,145 - 10,145 74,212 10,145 75,151
Radioactive waste facilities 1,566,384 - 1,566,384 1,781,286 1,566,382 1,803,834
Uranium mines and mills 5,531,206 70,421 5,601,627 4,206,650 5,601,628 4,259,898
Waste nuclear substances 203,287 901,194 1,104,481 1,439,173 1,193,429 1,457,917
Total regulatory plan activity fees 67,784,509 2,443,667 70,228,176 56,175,872 70,571,700 56,887,484
Nuclear substances 3,957,528 4,196,047 8,153,575 8,045,583 8,697,113 9,069,086
Class II nuclear facilities 267,865 2,295,313 2,563,178 2,034,819 3,294,172 3,198,448
Dosimetry services 41,234 3,273 44,507 49,057 1,123,965 724,989
Total formula fees 4,266,627 6,494,633 10,761,260 10,129,459 13,115,250 12,992,523
Transport licences and transport package certificates 203,650 - 203,650 262,159 696,757 542,437
Radiation device and prescribed equipment certificates 119,000 15,000 134,000 124,985 410,639 493,603
Exposure device operator certificates 191,400 - 191,400 164,866 141,307 130,092
Total fixed fees 514,050 15,000 529,050 552,010 1,248,703 1,166,132
Total licensing and certification 72,565,186 8,953,300 81,518,486 66,857,341 84,935,653 71,046,139
Non-licensing and non-certification
Co-operative undertakings 11,076 - 11,076 34,343 19,399,365 15,948,817
Stakeholder relations - - - - 8,241,758 6,100,717
Regulatory framework - - - - 825,786 910,126
Special projects, other revenue and related expenses - - - 1,695,707 35,407 2,281,814
Total non-licensing
and non-certification
11,076 - 11,076 1,730,050 28,502,315 25,241,474
Total $ 72,576,262 $ 8,953,300 $ 81,529,562 $ 68,587,391 $ 113,437,968 $ 96,287,613

10. Contractual obligations and contingent liabilities

a) Contractual obligations

The nature of CNSC's activities results in some multi-year contracts and obligations whereby CNSC will be committed to make some future payments when the services and goods are received. As of March 31, 2008, CNSC has significant future years' contractual obligations for the following:

Table: Contractual obligations

2009 2010 2011 2012 2013 &
thereafter
Total
Acquisitions of goods
and services
$ 3,327,024 $ 172,096 $ 28,287 $ 8,523 $ 125 $ 3,536,055
Operating leases 79,111 67,300 65,550 19,640 1,074 232,675
Total $ 3,406,135 $ 239,396 $ 93,837 $ 28,163 $ 1,199 $ 3,768,730

b) Contingent liabilities

Claims have been made against CNSC in the normal course of operations. Legal proceedings for claims totalling approximately $55,250,000 (2007 – $55,250,000) were still pending at March 31, 2008. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the financial statements.

11. Nuclear Liability Reinsurance Account

Under the Nuclear Liability Act (NLA), operators of designated nuclear installations are required to possess basic and/or supplementary insurance of $75,000,000 per installation for specified liabilities. The federal government has designated the Nuclear Insurance Association of Canada (NIAC) as the sole provider of third-party liability insurance and property insurance for the nuclear industry in Canada. The NIAC provides insurance to nuclear operators under a standard policy.

The policy consists of two types of coverage: Coverage A and Coverage B. Coverage A includes only those risks that are accepted by the insurer; that is, bodily injury and property damage. Coverage B risks include personal injury that is not bodily; for example, psychological injury, damage arising from normal emissions and damage due to acts of terrorism. Effective in 2003, the federal government agreed to provide coverage for damage due to acts of terrorism, which was previously provided under Coverage A.

The NIAC receives premiums from operators for both coverages; however, premiums for Coverage B risks are remitted to the federal government, which reinsures these risks under its reinsurance agreement with the NIAC. Through the reinsurance agreement, the federal government also pays the difference (supplementary insurance) between the basic insurance amount set by CNSC and the full $75,000,000 of liability imposed by the NLA. As of March 31, 2008, the total supplementary insurance coverage is $584,500,000 (2007 – $584,500,000).

All premiums paid by the operators of nuclear installations for the supplementary insurance coverage are credited to a Nuclear Liability Reinsurance Account in the Consolidated Revenue Fund. Premiums received in respect of coverage for damage due to acts of terrorism amount to $284,528 (2007 – $280,592). Claims against the supplementary insurance coverage are payable out of the Consolidated Revenue Fund and charged to the Account. There have been no claims against or payments out of the account since its creation.

As explained in note 2n), CNSC administers the Nuclear Liability Reinsurance Account on behalf of the Government of Canada through a specified purpose account consolidated in the Public Accounts of Canada. During the year, the following activity occurred in this account:

Table: Nuclear Liability Reinsurance Account

2008 2007
Opening balance $ 1,389,745 $ 1,107,553
Receipts deposited 286,128 282,192
Closing balance $ 1,675,873 $ 1,389,745

12. Related party transactions

CNSC is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. CNSC enters into transactions with these entities in the normal course of business. Some of these transactions are on normal trade terms applicable to all individuals and enterprises, while others are services provided without charge to CNSC. All material-related party transactions are disclosed below.

a) Services provided without charge

During the year, CNSC received services that were obtained without charge from other government departments and agencies. These are recorded at their estimated cost in the financial statements as follows:

Table: Related party transactions

2008 2007
Accommodation provided by Public Works and Government Services Canada $ 5,681,677 $ 4,628,001
Contributions for employer's share of employee benefits provided by the Treasury Board Secretariat 4,198,602 3,808,698
Salary and associated costs of legal services provided by Justice Canada 91,000 91,000
Audit services provided by the Office of the Auditor General of Canada 90,000 69,600
Other 55,805 32,000
Total $ 10,117,084 $ 8,629,299

b) Payables and receivables outstanding at year-end with related parties

During the year, CNSC incurred expenses $22,928,967 (2007 – $21,189,735) as a result of transactions with related parties, which included services provided without charge of $10,117,084 (2007 – $8,629,299) as described above. CNSC recognized revenue of $6,837,879 (2007 – $7,257,208) as a result of transactions with related parties, which included accounts receivable in the amount of $465,582 (2007 – $955,809).

Table: Payables and receivables outstanding at year-end with related parties

2008 2007
Accounts receivable with other government departments and agencies $ 637,808 $ 1,563,801
Accounts payable to other government departments and agencies $ 454,351 $ 1,509,510