Vol. 151, No. 13 — April 1, 2017

GOVERNMENT NOTICES

BANK OF CANADA

FINANCIAL STATEMENTS (YEAR ENDED 31 DECEMBER 2016)

Financial reporting responsibility

Management of the Bank of Canada (the Bank) is responsible for the financial statements, which are prepared in accordance with International Financial Reporting Standards. The amounts and financial information included in the statements reflect management’s best estimates and judgment. Financial information presented elsewhere in the Annual Report is consistent with the financial statements.

Management is responsible for the integrity and reliability of the financial statements and the accounting system from which they are derived. The Bank maintains a system of internal controls to provide reasonable assurance that transactions are properly authorized and recognized, that financial information is reliable, that assets are safeguarded and liabilities recognized, and that operations are carried out effectively. The Bank’s internal audit department reviews internal controls, including the application of accounting and financial controls.

The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal controls and exercises this responsibility through the Audit and Finance Committee of the Board. The Audit and Finance Committee is composed of members who are neither officers nor employees of the Bank and who are financially literate. The Audit and Finance Committee is therefore qualified to review the Bank’s annual financial statements and to recommend their approval by the Board of Directors. The Audit and Finance Committee meets with management, the Chief Internal Auditor and the Bank’s independent auditors who are appointed by Governor-in-Council. The Audit and Finance Committee has established processes to evaluate the independence of the Bank’s independent auditors and oversees all services provided by them. The Audit and Finance Committee has a duty to review the adoption of, and changes in, accounting principles and procedures that have a material effect on the financial statements, and to review and assess key management judgments and estimates material to the reported financial information.

These financial statements have been audited by the Bank’s independent auditors, PricewaterhouseCoopers LLP and Ernst & Young LLP, and their report is presented herein. The independent auditors have full and unrestricted access to the Audit and Finance Committee to discuss their audit and related findings.

Ottawa, Canada, 16 February 2017

Stephen S. Poloz
Governor

Carmen Vierula, CPA, CA
Chief Financial Officer and Chief Accountant

Independent auditors’ report

To the Minister of Finance, registered shareholder of the Bank of Canada (the “Bank”)

We have audited the accompanying financial statements of the Bank, which comprise the statement of financial position as at 31 December 2016 and the statements of net income and comprehensive income, changes in equity, and cash flows for the year then ended, and related notes, which comprise a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform an audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the 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 financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Bank as at 31 December 2016 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Other matter

The financial statements of the Bank for the year ended 31 December 2015 were audited by Ernst & Young LLP and Deloitte LLP who expressed an unmodified opinion on those statements dated 11 February 2016.

Ottawa, Canada, 16 February 2017

PricewaterhouseCoopers LLP
Chartered Professional Accountants
Licensed Public Accountants

Ernst & Young LLP
Chartered Professional Accountants
Licensed Public Accountants

BANK OF CANADA

Statement of financial position (Millions of Canadian dollars)

 

31 December 2016

As at 31 December 2015

ASSETS

   

Cash and foreign deposits (notes 4, 7)

19.3

11.2

Loans and receivables (notes 5, 7)

   

Securities purchased under resale agreements

8,277.0

6,089.4

Other receivables

5.2

7.3

 

8,282.2

6,096.7

Investments (notes 6, 7, 8)

   

Government of Canada treasury bills

16,791.8

18,220.3

Government of Canada bonds

79,845.9

75,763.5

Other investments

395.0

405.2

 

97,032.7

94,389.0

Property and equipment (note 9)

570.7

431.4

Intangible assets (note 10)

36.2

37.9

Other assets (note 11)

164.9

180.7

Total assets

106,106.0

101,146.9

LIABILITIES AND EQUITY

   

Bank notes in circulation (notes 7, 12)

80,478.6

75,496.9

Deposits (notes 7, 13)

   

Government of Canada

20,228.4

22,617.3

Members of Payments Canada

499.7

500.4

Other deposits

2,103.4

1,475.2

 

22,831.5

24,592.9

Securities sold under repurchase agreements (notes 7, 8, 14)

1,500.0

-

Other liabilities (note 14)

808.9

558.9

Total liabilities

105,619.0

100,648.7

Equity (note 16)

487.0

498.2

Total liabilities and
equity

106,106.0

101,146.9

Commitments, contingencies and guarantees (notes 17, 18)

Stephen S. Poloz
Governor

Carmen Vierula, CPA, CA
Chief Financial Officer and Chief Accountant

Derek D. Key
Lead Director, Board of Directors

Phyllis Clark
Chair, Audit and Finance Committee

(See accompanying notes to the financial statements.)

BANK OF CANADA

Statement of net income and comprehensive income (Millions of Canadian dollars)

 

For the year ended

 

31 December 2016

 

31 December 2015

INCOME

     

Interest revenue

     

Interest earned on investments

1,605.6

 

1,747.4

Dividend revenue

3.6

 

3.8

Interest earned on securities purchased under resale agreements

37.4

 

4.3

Other interest revenue

0.2

 

0.3

 

1,646.8

 

1,755.8

Interest expense

     

Interest expense on deposits

(122.7)

 

(128.8)

NET INTEREST INCOME

1,524.1

 

1,627.0

Other revenue

7.2

 

8.5

Total income

1,531.3

 

1,635.5

EXPENSES

     

Staff costs

228.1

 

215.3

Bank note research, production and processing

52.2

 

72.5

Premises costs

42.1

 

32.3

Technology and telecommunications

38.0

 

35.5

Depreciation and amortization

35.6

 

38.2

Other operating expenses

70.4

 

65.9

Total expenses

466.4

 

459.7

NET INCOME

1,064.9

 

1,175.8

OTHER COMPREHENSIVE INCOME (LOSS)

     

Items that will not be reclassified to net income

     

Remeasurements of the net defined-benefit liability/asset

4.1

 

13.7

Items that may be reclassified subsequently to net income

     

Change in fair value of available-for-sale financial assets

(11.4)

 

48.9

Other comprehensive income (loss)

(7.3)

 

62.6

COMPREHENSIVE INCOME

1,057.6

 

1,238.4

(See accompanying notes to the financial statements.)

BANK OF CANADA

Statement of changes in equity (Millions of Canadian dollars)

For the year ended 31 December

 

Share
capital

 

Statutory reserve

 

Special reserve

 

Available-
for-sale reserve

 

Retained earnings

 

Total

Balance, 1 January 2016

5.0

 

25.0

 

100.0

 

368.2

 

-

 

498.2

Comprehensive income for the period

                     

Net income

-

 

-

 

-

 

-

 

1,064.9

 

1,064.9

Remeasurements of the net
defined-benefit liability/asset

-

 

-

 

-

 

-

 

4.1

 

4.1

Change in fair value of BIS shares

-

 

-

 

-

 

(10.2)

 

-

 

(10.2)

Change in fair value of Government of Canada treasury bills

-

 

-

 

-

 

(1.0)

 

(0.2)

 

(1.2)

 

-

 

-

 

-

 

(11.2)

 

1,068.8

 

1,057.6

Surplus for the Receiver General for Canada (notes 14, 16)

-

 

-

 

-

 

-

 

(1,068.8)

 

(1,068.8)

Balance, 31 December 2016

5.0

 

25.0

 

100.0

 

357.0

 

-

 

487.0

 

Share
capital

 

Statutory reserve

 

Special reserve

 

Available-
for-sale reserve

 

Retained earnings

 

Total

Balance, 1 January 2015

5.0

 

25.0

 

100.0

 

319.3

 

-

 

449.3

Comprehensive income for the period

                     

Net income

-

 

-

 

-

 

-

 

1,175.8

 

1,175.8

Remeasurements of the net
defined-benefit liability/asset

-

 

-

 

-

 

-

 

13.7

 

13.7

Change in fair value of BIS shares

-

 

-

 

-

 

50.0

 

-

 

50.0

Change in fair value of Government of Canada treasury bills

-

 

-

 

-

 

(1.1)

 

-

 

(1.1)

 

-

 

-

 

-

 

48.9

 

1,189.5

 

1,238.4

Surplus for the Receiver General for Canada (notes 14, 16)

-

 

-

 

-

 

-

 

(1,189.5)

 

(1,189.5)

Balance, 31 December 2015

5.0

 

25.0

 

100.0

 

368.2

 

-

 

498.2

(See accompanying notes to the financial statements.)

BANK OF CANADA

Statement of cash flows (Millions of Canadian dollars)

For the year ended

 

31 December 2016

 

31 December 2015

CASH FLOWS FROM OPERATING ACTIVITIES

     

Interest received

1,746.4

 

1,836.2

Dividends received

3.6

 

3.8

Other revenue received

9.8

 

3.7

Interest paid

(122.7)

 

(128.8)

Payments to or on behalf of employees/suppliers and to members of Payments Canada

(380.3)

 

(391.1)

Net increase (decrease) in deposits

(1,761.4)

 

1,397.3

Proceeds from maturity of securities purchased under resale agreements –
overnight repo

57,389.0

 

36,387.6

Acquisition of securities purchased under resale agreements – overnight repo

(56,389.0)

 

(37,387.6)

Repayments of securities
sold under repurchase agreements

-

 

(115.1)

Proceeds from securities
sold under repurchase agreements

1,500.0

 

115.1

Net cash provided by operating activities

1,995.4

 

1,721.1

CASH FLOWS FROM INVESTING ACTIVITIES

     

Net decrease in Government of Canada treasury bills

1,418.5

 

1,136.6

Purchases of Government of Canada bonds

(18,504.0)

 

(16,721.8)

Proceeds from maturity of Government of Canada
bonds

14,330.0

 

11,986.8

Proceeds from maturity of securities purchased under resale agreements – term repo

65,412.5

 

5,975.4

Acquisition of securities purchased under resale
agreements – term repo

(68,602.8)

 

(8,299.6)

Additions of property and equipment

(165.3)

 

(173.1)

Additions of intangible assets

(7.9)

 

(6.7)

Net cash used in investing activities

(6,119.0)

 

(6,102.4)

CASH FLOWS FROM FINANCING ACTIVITIES

     

Net increase in bank notes in circulation

4,981.7

 

5,473.4

Remittance of surplus to the Receiver General for Canada

(849.5)

 

(1,090.4)

Net cash provided by financing activities

4,132.2

 

4,383.0

EFFECT OF EXCHANGE RATE CHANGES ON FOREIGN CURRENCY

(0.5)

 

1.1

INCREASE IN CASH AND FOREIGN DEPOSITS

8.1

 

2.8

CASH AND FOREIGN DEPOSITS, BEGINNING OF YEAR

11.2

 

8.4

CASH AND FOREIGN DEPOSITS, END OF YEAR

19.3

 

11.2

(See accompanying notes to the financial statements.)

BANK OF CANADA

Notes to the financial statements
For the year ended 31 December 2016

1. The business of the Bank of Canada

The Bank of Canada (the Bank) is the nation’s central bank. The Bank is a corporation established under the Bank of Canada Act, is wholly owned by the Government of Canada and is exempt from income taxes. The Bank does not offer banking services to the public.

The Bank is a Government Business Enterprise as defined by the Canadian Public Sector Accounting Standards and, as such, adheres to the standards applicable to publicly accountable enterprises as outlined by the Chartered Professional Accountants of Canada (CPA Canada). In compliance with this requirement, the Bank has developed accounting policies in accordance with International Financial Reporting Standards (IFRS).

As of 23 January 2017, the address of the Bank registered head office has been updated to 234 Wellington Street, Ottawa, Ontario.

The Bank’s mandate under the Bank of Canada Act is “to promote the economic and financial welfare of Canada.” The Bank’s activities and operations are undertaken in support of this mandate and not with the objective of generating revenue or profits. The Bank’s four core areas of responsibility are the following:

  • Monetary policy: The objective of monetary policy is to preserve the value of money by keeping inflation low, stable and predictable.
  • Financial system: The Bank promotes safe, sound and efficient financial systems, within Canada and internationally, and conducts transactions in financial markets in support of these objectives.
  • Funds management: The Bank provides funds-management services for the Government of Canada, the Bank itself and other clients. For the government, the Bank provides treasury management services and administers and advises on the public debt and foreign exchange reserves.
  • Currency: The Bank designs, issues and distributes Canada’s bank notes, oversees the note distribution system and ensures a supply of quality bank notes that are readily accepted and secure against counterfeiting.

The Corporate Administration function supports the management of the Bank’s human resources, operations and strategic initiatives, as well as the stewardship of financial, physical, information and technology assets.

The Bank has the exclusive right to issue Canadian bank notes, and the face value of these bank notes is the most significant liability on the Bank’s balance sheet. The Bank invests the proceeds from the issuance of bank notes into Government of Canada securities, which are acquired on a non-competitive basis. These assets enable the Bank to execute its responsibilities for the monetary policy and financial system functions.

Interest income derived from Government of Canada securities is the Bank’s primary source of revenue each year. The income generated from the assets backing the bank notes in circulation (net of bank note production and distribution costs) is referred to as “seigniorage,” which provides a stable and constant source of funding for the Bank’s operations, enabling it to function independently of government appropriations. A portion of this revenue is used to fund the Bank’s operations and reserves; the remaining net income is remitted to the Receiver General in accordance with the requirements of the Bank of Canada Act.

2. Basis of preparation

Compliance with International Financial Reporting Standards (IFRS)

These financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (IASB) and conform to the disclosure and accounting requirements of the Bank of Canada Act and the Bank’s bylaws.

The Board of Directors approved the financial statements on 16 February 2017.

Measurement base

The financial statements have been prepared on a historical cost basis, except for the available-for-sale (AFS) financial assets, which are measured at fair value, and the net defined-benefit liability/asset of employee benefit plans, which is recognized as the net of the fair value of plan assets and the present value of the defined-benefit obligation.

Significant accounting estimates and judgments in applying accounting policies

The preparation of the financial statements requires management to make judgments, estimates and assumptions based on information available at the statement date that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, as well as related information. The Bank based its assumptions and estimates on information that was available when these financial statements were prepared. Existing circumstances and assumptions about future developments may change, however, in response to market fluctuations or circumstances that are beyond the control of the Bank. In such cases, the impact will be recognized in the financial statements of a future fiscal period.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Significant estimates are primarily in the area of the fair values of the shares in the Bank for International Settlements (BIS) (note 7), collateral (note 8) and employee benefits (note 15).

Functional and presentation currency

The Bank’s functional and presentation currency is the Canadian dollar. The amounts in the notes to the financial statements of the Bank of Canada are in millions of Canadian dollars, unless otherwise stated.

Fiscal-agent and custodial activities

Responsibility for the operational management of the Government of Canada’s financial assets and liabilities is borne jointly by the Bank (as fiscal agent for the Government of Canada) and the Department of Finance. In this fiscal-agent role, the Bank provides transactional and administrative support to the Government of Canada in certain areas, consistent with the requirement of section 24 of the Bank of Canada Act. The Bank does not bear the risks and rewards as part of its role as fiscal-agent. The assets, liabilities, expenditures and revenues to which this support relates are those of the Government of Canada and are not included in the financial statements of the Bank.

Securities safekeeping and other custodial activities are provided to foreign central banks, international organizations and other government-related entities. The assets, and income arising therefrom, are excluded from these financial statements since they are not assets or income of the Bank.

3. Significant accounting policies

This section contains the Bank’s accounting policies that relate to the financial statements as a whole. Significant accounting policies specific to a note are included within that note. These specific accounting policies refer to loans and receivables (note 5), securities lending (note 6), financial instruments (note 7), property and equipment (note 9), intangible assets (note 10), other assets (note 11), securities sold under repurchase agreements and other liabilities (note 14), employee benefits (note 15) and leases (note 17).

There were no new or amended standards adopted by the Bank during fiscal 2016 that had a material impact on its financial statements.

Translation of foreign currencies

Investment income and expenses denominated in foreign currencies are translated at the exchange rate in effect at the date of the transaction. Fair-value items denominated in foreign currencies are translated at the exchange rate in effect at the date of the fair-value measurement. Monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the exchange rates prevailing at the end of the reporting period. The resulting gains and losses are included in Other revenue. Gains or losses on equity investments classified as AFS, along with any gains or losses related to the exchange rate, are recognized in the available-for-sale reserve within Other Comprehensive Income.

Impairment of financial assets

For financial assets that are not classified at fair value through net income, the Bank assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of assets is impaired. Once impaired, financial assets carried at amortized cost are remeasured at the net recoverable amount, with the amount of impairment recognized in net income. Unrealized losses on impaired AFS financial assets are recognized in net income at the time of impairment.

Impairment of non-financial assets

Non-financial assets, including property and equipment and intangible assets, are reviewed annually for impairment and whenever events or changes in circumstances indicate that the carrying amount exceeds its recoverable amount.

Intangible assets under development are assessed for impairment on an annual basis.

Revenue recognition

Interest revenue earned on Government of Canada treasury bills and bonds is recognized in net income using the effective interest method. Dividend revenue on shares in the BIS is recognized as dividends are declared.

Realized gains and losses on the sale of Government of Canada treasury bills are recognized in net income at the time of sale as a reclassification from Other Comprehensive Income and are calculated as the excess of proceeds over the amortized cost at the transaction date.

Interest earned on securities purchased under resale agreements is recognized using the effective interest method.

Other interest revenue is composed of interest earned on deposits and interest earned on advances to members of Payments Canada and is recognized using the effective interest method.

Future changes in accounting policies

The following new standards issued by the IASB were assessed as having a possible effect on the Bank in the future. The Bank is currently determining the impact of these standards on its financial statements.

  • IFRS 9 Financial Instruments (IFRS 9)
  • In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments bringing together the classification and measurement, impairment and hedge accounting phases of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement.
  • IFRS 9 eliminates the existing financial asset categories and adopts a principles-based approach to the classification of financial assets driven by cash-flow characteristics and the business model in which an asset is held.
  • IFRS 9 also introduces an expected loss impairment model for all financial assets not measured at fair value through profit or loss (FVTPL). The model has three stages: (i) on initial recognition, 12-month expected credit losses are recognized in profit or loss and a loss allowance is established; (ii) if credit risk increases significantly and the resulting credit risk is not considered to be low, full lifetime expected credit losses are recognized; and (iii) when a financial asset is considered credit-impaired, interest revenue is calculated based on the carrying amount of the asset, net of the loss allowance, rather than on its gross carrying amount.
  • IFRS 9 also includes a new hedge accounting model, together with corresponding disclosures about risk management activities for those applying hedge accounting. The new model represents a substantial overhaul of hedge accounting that will enable entities to better reflect their risk management activities in their financial statements. The most significant improvements apply to those entities that hedge non-financial risk, which is not applicable for the Bank.
  • The IASB has set 1 January 2018 as the mandatory effective date for the adoption of IFRS 9, although early adoption is permitted. The Bank has made a preliminary assessment that IFRS 9 will result in a change to the classification and measurement of Government of Canada treasury bills from fair value through other comprehensive income (FVOCI) to amortized cost, but will not have a significant impact on the Bank’s financial statements. The impact of the changes to accounting for financial instrument impairment are still being assessed, but no significant impact on the Bank’s financial statements is expected.
  • IFRS 15 Revenue from Contracts with Customers (IFRS 15)
  • IFRS 15, as issued in May 2014, relates to the recognition of revenue that applies to all contracts with customers (except for contracts that are within the scope of the standards on leases, insurance contracts and financial instruments).
  • IFRS 15 establishes a five-step model to apply to revenue from contracts and extensive requirements for revenue disclosure. The standard also addresses the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity’s ordinary activities.
  • The IASB has set 1 January 2018 as the mandatory effective date for the adoption of IFRS 15, although early adoption is permitted. The Bank has made a preliminary assessment that IFRS 15 will not have a significant impact on the Bank’s financial statements.
  • IFRS 16 Leases (IFRS 16)
  • On 13 January 2016, the IASB issued IFRS 16, which provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessees and lessors. It supersedes IAS 17 Leases and its associated interpretive guidance. Significant changes were made to lessee accounting with the distinction between operating and finance leases removed and assets and liabilities recognized in respect of all leases (subject to limited exceptions for short-term leases and leases of low-value assets). In contrast, IFRS 16 does not include significant changes to the requirements for lessors.
  • IFRS 16 is effective 1 January 2019 with earlier application permitted for companies that have also adopted IFRS 15 Revenue from Contracts with Customers. The Bank has made a preliminary assessment that IFRS 16 will not have a significant impact on the Bank’s financial statements.
  • IAS 7 Statement of Cash Flows (IAS 7)
  • The IASB published final amendments to IAS 7 on 29 January 2016. The amendments are intended to clarify IAS 7 to improve information provided to users of financial statements about an entity’s financing activities. The amendments come with the objective that entities shall provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities. The amendments are effective for annual periods beginning on or after 1 January 2017, with early adoption permitted. The Bank has made a preliminary assessment that changes to IAS 7 will not have a significant impact on the Bank’s financial statements.

4. Cash and foreign deposits

Cash and foreign deposits is composed of cash on hand as well as highly liquid demand deposits in foreign currencies with other central banks or international financial institutions. Included in this balance is Can$18.2 million (Can$10.3 million at 31 December 2015) of foreign deposits. Credit risk related to these foreign deposits is discussed in note 8.

5. Loans and receivables

Loans and receivables is composed primarily of securities purchased under resale agreements and, if any, advances to members of Payments Canada. These transactions are fully collateralized in accordance with publicly disclosed collateral eligibility and margin requirements. Financial risks related to these instruments are discussed in note 8.

Accounting policy

Securities purchased under resale agreements are repo-type transactions in which the Bank purchases securities from designated counterparties with an agreement to sell them back at a predetermined price on an agreed transaction date. For accounting purposes, these agreements are treated as collateralized lending transactions and are recognized on the Statement of Financial Position at the amounts at which the securities were originally acquired, plus accrued interest.

Securities purchased under resale agreements

The securities purchased under resale agreements are composed of overnight repo operations and term repo operations. The overnight repo matures the next business day, and the duration of a term repo generally ranges from 1 to 90 business days.

Balances outstanding at 31 December 2016 consist of agreements with original terms to maturity ranging from 18 to 85 days (from 22 to 85 days at 31 December 2015).

Advances to members of Payments Canada

Advances to members of Payments Canada are typically composed of liquidity loans made under the Bank’s Standing Liquidity Facility. These advances mature the next business day. Interest on overnight advances is calculated at the Bank Rate. The Bank Rate is the rate of interest that the Bank charges on one-day loans to major financial institutions.

As at 31 December 2016, there were no advances to members of Payments Canada ($Nil at 31 December 2015).

6. Securities-Lending Program

The Bank operates a Securities-Lending Program to support the liquidity of Government of Canada securities by providing the market with a secondary and temporary source of these securities. These securities-lending transactions are fully collateralized by securities and are generally one business day in duration.

Accounting policy

The securities loaned continue to be accounted for as investment assets. Lending fees charged by the Bank on these transactions are included in Other revenue at the maturity date of the transaction.

Securities lending

As at 31 December 2016, there were no loaned securities in the Bank’s investments ($Nil at 31 December 2015).

7. Financial instruments

The Bank’s financial instruments consist of cash and foreign deposits, securities purchased under resale agreements, advances to members of Payments Canada, other receivables, investments (consisting of Government of Canada treasury bills, Government of Canada bonds and other investments), bank notes in circulation, deposits, securities sold under repurchase agreements and other liabilities (excluding the net defined-benefit asset/liability for pension benefit plans, other employee benefit plans and lease contracts).

In Other investments, the Bank holds 9 441 BIS shares (9 441 BIS shares at 31 December 2015) in order to participate in the BIS. Ownership of BIS shares is limited to central banks, and new shares can only be acquired following an invitation to subscribe extended by the BIS Board of Directors. The shares are non-transferable unless prior written consent is obtained from the BIS. The fair value of the BIS shares totalled $395.0 million ($405.2 million at 31 December 2015).

Accounting policy

The Bank accounts for all financial instruments using settlement-date accounting. Financial instruments are measured at fair value on initial recognition, plus transaction costs, if any, for all financial assets not carried at fair value through net income. Subsequent to initial recognition, they are accounted for based on their classification.

Subsequent to initial recognition, financial assets classified as AFS are measured at fair value using quoted market prices, with the exception of the BIS shares, which are measured using significant non-observable inputs. Unrealized changes in the values of AFS financial assets measured at fair value are recognized in Other Comprehensive Income and accumulated in the Available-for-sale reserve in Equity until the financial asset is derecognized or becomes impaired. At that time, the cumulative unrealized gain or loss previously recognized in Other Comprehensive Income is reclassified from Equity to Net income. The Bank’s financial assets designated as AFS consist of Government of Canada treasury bills and the Bank’s investment in the BIS shares.

Financial assets that the Bank has the intent and ability to hold to maturity are classified as held-to-maturity (HTM). Subsequent to initial recognition, financial assets classified as HTM are measured at amortized cost using the effective interest method less any impairment losses. The effective interest method uses the rate inherent in a financial instrument that discounts the estimated future cash flows over the expected life of the financial instrument in order to recognize interest on a constant-yield basis. Government of Canada bonds are classified as HTM.

The Bank has not classified any of its financial assets as fair value through net income, other than cash and foreign deposits.

All other financial assets are classified as loans and receivables. Subsequent to initial recognition, these are measured at amortized cost less any impairment losses using the effective interest method.

The Bank derecognizes a financial asset when it considers that substantially all of the risks and rewards of the asset have been transferred or when the contractual rights to the cash flows of the financial asset expire. On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in net income.

The Bank has classified its financial liabilities as other financial liabilities. Financial liabilities are initially recognized at fair value. Subsequent to initial recognition, financial liabilities are measured at amortized cost using the effective interest method, with the exception of bank notes in circulation, which are measured at face value. The Bank has not classified any of its financial liabilities as fair value through net income.

The Bank derecognizes financial liabilities when the Bank’s obligations are discharged, cancelled or expire. The difference between the carrying amount of the financial liability derecognized and the sum of the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in net income.

Measurement of financial instruments

Cash and foreign deposits, Government of Canada treasury bills and BIS shares are measured at fair value. All other financial instruments are measured at amortized cost using the effective interest method, with the exception of bank notes in circulation, which are measured at face value.

Financial instruments measured at fair value

Financial instruments measured at fair value are classified using a fair-value hierarchy that reflects the significance of the inputs used in making the measurements:

  • Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;
  • Level 2 — inputs other than quoted prices included in Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
  • Level 3 — inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The fair-value hierarchy requires the use of observable market inputs wherever such inputs exist. In measuring fair value, a financial instrument is classified at the lowest level of the hierarchy for which a significant input has been considered.

 

Level 1

 

Level 2

 

Level 3

 

Total

Financial assets at
fair value as at
31 December 2016

Government of Canada treasury bills

16,791.8

 

-

 

-

 

16,791.8

BIS shares

-

 

-

 

395.0

 

395.0

 

16,791.8

 

-

 

395.0

 

17,186.8

Financial assets at
fair value as at
31 December 2015

Government of Canada treasury bills

18,220.3

 

-

 

-

 

18,220.3

BIS shares

-

 

-

 

405.2

 

405.2

 

18,220.3

 

-

 

405.2

 

18,625.5

There were no transfers of amounts between levels in 2016.

The fair value of the BIS shares is estimated to be 70 per cent of the Bank’s interest in the net asset value of the BIS at the reporting date. The 30 per cent discount to net asset value is equivalent to the methodology applied by the BIS for all share repurchases since the 1970s and was further endorsed in a decision by the International Court at the Hague relating to a share repurchase by the BIS in 2001 (the last share repurchase conducted by the BIS). The Bank considers that the 30 per cent discount against the net asset value of the BIS continues to be the appropriate basis for valuation. The Bank expects the value of the BIS shares to fluctuate over time in conjunction with the strength of the BIS balance sheet and exchange rates. Changes in the investment fair value at a reporting date are recorded in Other investments and in Other Comprehensive Income and are subsequently reflected in the Available-for-sale reserve. There were no changes to the valuation technique during the year.

The following table reconciles the estimated fair value of the BIS shares determined using Level 3 fair-value measurements:

 

31 December 2016

 

31 December 2015

Opening balance at beginning
of period

405.2

 

355.2

Change in fair value recorded through Other Comprehensive Income

(10.2)

 

50.0

Closing balance at
period-end

395.0

 

405.2

Financial instruments not measured at fair value

Fair values of Government of Canada bonds are determined based on unadjusted quoted market prices in an active market (Level 1). The fair value of Government of Canada bonds was $83,528.5 million at 31 December 2016 ($81,116.9 million at 31 December 2015). The fair value of all other financial instruments approximates their carrying value.

8. Financial risk management

The Bank maintains a strong risk culture and a comprehensive risk management and control framework to manage its risks. The Executive Council oversees risk management and the implementation of sound management processes to safeguard the Bank. The Board of Directors has an oversight role in the Bank’s performance of risk management.

The Bank is exposed to financial risk (credit risk, market risk and liquidity risk) associated with the management of the Bank’s financial assets and liabilities. The Financial Risk Office, which is independent of operations, monitors and reports on the financial risks relating to the Bank’s Statement of Financial Position. The following is a description of those risks and how the Bank manages its exposure to them.

Credit risk

Credit risk is the risk that a counterparty to a financial contract will fail to discharge its obligations in accordance with agreed-upon terms.

The Bank is exposed to credit risk through its cash and foreign deposits, investment portfolio and advances to members of Payments Canada, and through market transactions conducted in the form of securities purchased under resale agreements and loans of securities. The maximum exposure to credit risk is estimated to be the carrying value of the items listed above. There are no past due or impaired amounts.

Advances to members of Payments Canada, securities purchased under resale agreements and securities loaned are fully collateralized loans. Collateral is taken in accordance with the Bank’s publicly disclosed eligibility criteria and margin requirements, which are accessible on its website. Strict eligibility criteria are set for all collateral, and the Bank requires excess collateral relative to the size of the loan provided.

In the unlikely event of a counterparty default, collateral can be liquidated to offset credit exposure. The credit quality of collateral is managed through a set of restrictions based on asset type, term to maturity and the credit attributes, including ratings of the securities pledged.

Concentration of credit risk

The credit risk associated with the Bank’s investment portfolio, representing 91 per cent of the carrying value of its total assets (93 per cent in 2015), is low because the securities held are primarily direct obligations of the Government of Canada, which holds a credit rating of AAA.

The Bank’s advances to members of Payments Canada and securities purchased under resale agreements, representing 8 per cent of the carrying value of its total assets (6 per cent at 31 December 2015), are collateralized obligations of various Canadian-based financial institutions. The fair value of collateral pledged to the Bank against securities purchased under resale agreements at the end of the reporting period is presented below.

 

31 December 2016

 

31 December 2015

 

$

 

%

 

$

 

%

Securities issued or guaranteed by the
Government of Canada

878.4

 

10.1

 

1,918.6

 

30.4

Securities issued or guaranteed by a
provincial government

7,796.4

 

89.9

 

4,401.7

 

69.6

Total fair value
of collateral
pledged to
the Bank

8,674.8

 

100.0

 

6,320.3

 

100.0

As a percentage of amortized cost

   

105%

     

104%

The Bank’s securities sold under repurchase agreements, totalling $1,500.0 million, represent 1 per cent of the carrying value of its total liabilities ($Nil at 31 December 2015) and are collateralized obligations of the Bank guaranteed by Government of Canada securities. The fair value of collateral pledged by the Bank against securities sold under resale agreements at the end of the reporting period is $1,500.5 million ($Nil at 31 December 2015) and, as a result, the Bank is not exposed to significant credit risk on these instruments.

The Bank is exposed to credit risk through its guarantee of the Large Value Transfer System (LVTS) and through the execution of foreign currency contracts. The maximum exposure under guarantees and foreign currency contracts is described in note 18.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Bank’s investment in Government of Canada treasury bills and bonds counteracts the non-interest-bearing bank notes in circulation liability.

The Bank’s exposure to interest rate risk arises through fluctuations in the fair value of its investment in Government of Canada treasury bills, which are short-term, and from fluctuations in future cash flows from Government of Canada bonds.

The Bank’s revenue will vary over time in response to movements in interest rates. These variations would not affect the ability of the Bank to fulfill its obligations, since its revenues greatly exceed its expenses.

The figures below show the effect at 31 December of an (increase)/decrease of 25 basis points in interest rates on the fair value of the Government of Canada treasury bill portfolio and on Other Comprehensive Income.

 

31 December 2016

 

31 December 2015

Government of Canada treasury bills

(15.2) / 15.0

 

(15.2) / 15.1

The Bank’s exposure to interest rate risk in the form of fluctuations in cash flows of existing financial instruments is attributable to cash and foreign deposits, Government of Canada deposits, and a portion of other deposits since these instruments are subject to variable interest rates. The remainder of the Bank’s financial assets and liabilities have either fixed interest rates or are non-interest-bearing.

The figures below show the effect at 31 December of an increase/(decrease) of 25 basis points in interest rates on the interest expenses paid on Government of Canada deposits.

 

31 December 2016

 

31 December 2015

Interest expense on Government of Canada deposits

58.0 / (58.0)

 

56.7 / (56.7)

For all financial instruments, except bank notes in circulation, the future cash flows of the Bank depend on the prevailing market rate of interest at the time of renewal.

The following table illustrates interest rate risk relative to future cash flows by considering the expected maturity or repricing dates of existing financial assets and liabilities.

As at 31 December 2016

 

Non-interest-sensitive

 

Within 12 months

 

1 to 5 years

 

Over 5 years

 

Total

FINANCIAL ASSETS

                 

Cash and foreign deposits

-

 

19.3

 

-

 

-

 

19.3

Loans and receivables (see footnote 1)

5.2

 

8,277.0

 

-

 

-

 

8,282.2

Investments

                 

Government of Canada treasury bills

-

 

16,791.8

 

-

 

-

 

16,791.8

Government of Canada bonds (see footnote 2)

-

 

16,843.2

 

35,639.9

 

27,362.8

 

79,845.9

Shares in the BIS

395.0

 

-

 

-

 

-

 

395.0

 

400.2

 

41,931.3

 

35,639.9

 

27,362.8

 

105,334.2

FINANCIAL LIABILITIES

                 

Bank notes in circulation

80,478.6

 

-

 

-

 

-

 

80,478.6

Deposits

                 

Government of Canada

-

 

20,228.4

 

-

 

-

 

20,228.4

Members of Payments Canada

-

 

499.7

 

-

 

-

 

499.7

Other deposits

1,578.6

 

524.8

 

-

 

-

 

2,103.4

Securities sold under repurchase agreements

-

 

1,500.0

 

-

 

-

 

1,500.0

Other financial liabilities

598.7

 

-

 

-

 

-

 

598.7

 

82,655.9

 

22,752.9

 

-

 

-

 

105,408.8

Interest rate sensitivity gap

(82,255.7)

 

19,178.4

 

35,639.9

 

27,362.8

 

(74.6)

As at 31 December 2015

 

Non-interest-sensitive

 

Within 12 months

 

1 to 5 years

 

Over 5 years

 

Total

Financial Assets

                 

Cash and foreign deposits

-

 

11.2

 

-

 

-

 

11.2

Loans and receivables (see footnote 3)

7.3

 

6,089.4

 

-

 

-

 

6,096.7

Investments

                 

Government of Canada treasury bills

-

 

18,220.3

 

-

 

-

 

18,220.3

Government of Canada bonds (see footnote 4)

-

 

14,378.0

 

35,714.9

 

25,670.5

 

75,763.4

Shares in the BIS

405.2

 

-

 

-

 

-

 

405.2

 

412.5

 

38,698.9

 

35,714.9

 

25,670.5

 

100,496.8

Financial Liabilities

                 

Bank notes in circulation

75,496.9

 

-

 

-

 

-

 

75,496.9

Deposits

                 

Government of Canada

-

 

22,617.3

 

-

 

-

 

22,617.3

Members of Payments Canada

-

 

500.4

 

-

 

-

 

500.4

Other deposits

1,028.5

 

446.7

 

-

 

-

 

1,475.2

Securities sold under repurchase agreements

-

 

-

 

-

 

-

 

-

Other financial liabilities

353.3

 

-

 

-

 

-

 

353.3

 

76,878.7

 

23,564.4

 

-

 

-

 

100,443.1

Interest rate sensitivity gap

(76,466.2)

 

15,134.5

 

35,714.9

 

25,670.5

 

53.7

Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Given the small size of the Bank’s net foreign currency exposure relative to its total assets, currency risk is not considered significant.

The Bank is exposed to currency risk primarily by holding shares in the BIS. These shares are denominated in Special Drawing Rights (SDRs). The SDR serves as the unit of account for the International Monetary Fund (IMF), and its value is based on a “basket” of five major currencies: the euro, the U.S. dollar, the British pound, the Japanese yen and the Chinese renminbi. SDRs are translated into Canadian-dollar equivalents at the rates prevailing on the date when the fair value is determined.

Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from changes in interest and exchange rates), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market.

The Bank is exposed to other price risk through its investment in the BIS. For accounting purposes, the Bank treats BIS shares as AFS, and the fair value of these shares is estimated on the basis of the net asset value of the BIS, less a discount of 30 per cent. Accordingly, these shares are revalued to reflect movements in the net asset value of the BIS and in the Canadian dollar. The other price risk associated with BIS shares is incidental to the general reasons for holding them and is immaterial compared with other market risks faced by the Bank.

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liabilities with no fixed maturity include Bank notes in circulation and Government of Canada deposits. Historical experience has shown that bank notes in circulation provide a stable source of long-term funding for the Bank. Government of Canada deposits are deposits held in the Bank’s capacity as the Government of Canada’s fiscal agent. As a counterpart to these liabilities with no fixed maturity, the Bank holds a portfolio of highly liquid securities. In the event of an unexpected redemption of bank notes or a significant withdrawal from the Government of Canada’s deposit for the prudential liquidity-management plan, the Bank has the ability to settle the obligation by means of several tools.

As the nation’s central bank, the Bank is the ultimate source of liquid funds to the Canadian financial system and has the power and operational ability to create Canadian-dollar liquidity in unlimited amounts at any time. This power is exercised within the Bank’s commitment to keeping inflation low, stable and predictable.

The Bank is exposed to liquidity risk through its guarantee of the LVTS. The maximum exposure under this guarantee is described in note 18.

The following table presents a maturity analysis of the Bank’s financial assets and liabilities. The balances in this table do not correspond to the balances in the Statement of Financial Position since the table presents all cash flows on an undiscounted basis.

In cases where counterparties to securities purchased under resale agreements substitute collateral after the outset of an agreement, portions of the carrying values presented may mature earlier than as presented, where the amount maturing early is dependent on the value of the collateral being substituted. Where collateral has been substituted, agreements are typically re-established under the same terms and conditions. The information presented in the following table is prepared according to agreements in place as at 31 December 2016 and 31 December 2015, respectively.

As at 31 December 2016

 

No fixed maturity

 

Within 12 months

 

1 to 5 years

 

Over 5 years

 

Total

FINANCIAL ASSETS

                 

Cash and foreign deposits

19.3

 

-

 

-

 

-

 

19.3

Loans and receivables

-

 

8,288.0

 

-

 

-

 

8,288.0

Investments

                 

Government of Canada treasury bills

-

 

16,825.0

 

-

 

-

 

16,825.0

Government of Canada bonds

-

 

18,240.6

 

39,693.0

 

35,023.1

 

92,956.7

Shares in the BIS

395.0

 

-

 

-

 

-

 

395.0

 

414.3

 

43,353.6

 

39,693.0

 

35,023.1

 

118,484.0

FINANCIAL LIABILITIES

                 

Bank notes in circulation

80,478.6

 

-

 

-

 

-

 

80,478.6

Deposits

                 

Government of Canada

20,228.4

 

-

 

-

 

-

 

20,228.4

Members of Payments Canada

-

 

499.7

 

-

 

-

 

499.7

Other deposits

2,103.4

 

-

 

-

 

-

 

2,103.4

Securities sold under repurchase agreements

-

 

1,500.0

 

-

 

-

 

1,500.0

Other financial liabilities

-

 

598.7

 

-

 

-

 

598.7

 

102,810.4

 

2,598.4

 

-

 

-

 

105,408.8

Net maturity difference

(102,396.1)

 

40,755.2

 

39,693.0

 

35,023.1

 

13,075.2

As at 31 December 2015 (see footnote 5)

 

No fixed maturity

 

Within
12 months

 

1 to 5 years

 

Over 5 years

 

Total

FINANCIAL ASSETS

                 

Cash and foreign deposits

11.2

 

-

 

-

 

-

 

11.2

Loans and receivables

-

 

6,100.5

 

-

 

-

 

6,100.5

Investments

                 

Government of Canada treasury bills

-

 

18,250.0

 

-

 

-

 

18,250.0

Government of Canada bonds

-

 

15,870.8

 

39,861.6

 

33,658.8

 

89,391.2

Shares in the BIS

405.2

 

-

 

-

 

-

 

405.2

 

416.4

 

40,221.3

 

39,861.6

 

33,658.8

 

114,158.1

FINANCIAL LIABILITIES

                 

Bank notes in circulation

75,496.9

 

-

 

-

 

-

 

75,496.9

Deposits

                 

Government of Canada

22,617.3

 

-

 

-

 

-

 

22,617.3

Members of Payments Canada

-

 

500.4

 

-

 

-

 

500.4

Other deposits

1,475.2

 

-

 

-

 

-

 

1,475.2

Securities sold under repurchase agreements

                 

Other financial liabilities

-

 

353.3

 

-

 

-

 

353.3

 

99,589.4

 

853.7

 

-

 

-

 

100,443.1

Net maturity difference

(99,173.0)

 

39,367.6

 

39,861.6

 

33,658.8

 

13,715.0

9. Property and equipment

Accounting policy

Property and equipment consists of land, buildings, computer equipment, other equipment and related projects in progress. Property and equipment is measured at cost less accumulated depreciation, except for land, which is not depreciated, and is net of any related impairment losses. Projects in progress are measured at cost but are not depreciated until the asset is available for use. Cost includes expenditures that are directly attributable to the acquisition or construction of the asset.

When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment. Upon replacing a significant part of an item of property and equipment, the carrying amount of the replaced part is derecognized and any gain or loss recognized in depreciation.

Depreciation is calculated using the straight-line method and is applied over the estimated useful lives of the assets, as shown below. The estimated useful life and the depreciation method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

  • Buildings 15 to 65 years
  • Computer equipment 3 to 10 years
  • Other equipment 5 to 20 years

Leasehold improvements (included in Other equipment) are depreciated over the lesser of the useful life or the term of the lease.

Carrying value of property and equipment

 

Land and buildings

 

Computer equipment

 

Other equipment

 

Total

2016

             

Cost

             

Balances, 31 December 2015

457.4

 

41.0

 

82.9

 

581.3

Additions

139.8

 

18.9

 

6.6

 

165.3

Disposals

-

 

(3.2)

 

-

 

(3.2)

Transfers to other asset categories

(36.4)

 

12.1

 

24.3

 

-

Balances, 31 December 2016

560.8

 

68.8

 

113.8

 

743.4

Accumulated depreciation

             

Balances, 31 December 2015

(84.4)

 

(20.9)

 

(44.6)

 

(149.9)

Depreciation expense

(5.9)

 

(5.4)

 

(14.7)

 

(26.0)

Disposals

-

 

3.2

 

-

 

3.2

Transfers to other asset categories

-

 

-

 

-

 

-

Balances, 31 December 2016

(90.3)

 

(23.1)

 

(59.3)

 

(172.7)

Carrying amounts

             

At 31 December 2015

373.0

 

20.1

 

38.3

 

431.4

At 31 December 2016

470.5

 

45.7

 

54.5

 

570.7

The Head Office Renewal Program was completed in November 2016 with capital costs to date of $395.6 million. The commitments at 31 December 2016 primarily consist of finishing work and remaining equipment related to the Head Office Renewal Program and are expected to be completed during the first quarter of 2017.

Other equipment includes bank note inspection equipment that was obtained through a finance lease arrangement (note 17).

 

Land and buildings

 

Computer equipment

 

Other equipment

 

Total

Projects in progress 2016

             

Included in Carrying amounts at 31 December 2016

0.5

 

11.0

 

6.5

 

18.0

Commitments at 31 December 2016

17.1

 

0.1

 

16.4

 

33.6

 

Land and buildings

 

Computer equipment

 

Other equipment

 

Total

2015

             

Cost

             

Balances, 31 December 2014

291.5

 

39.3

 

79.1

 

409.9

Additions

165.9

 

3.0

 

4.2

 

173.1

Disposals

-

 

(1.3)

 

(0.4)

 

(1.7)

Transfers to other asset categories

-

 

-

 

-

 

-

Balances, 31 December 2015

457.4

 

41.0

 

82.9

 

581.3

Accumulated depreciation

             

Balances, 31 December 2014

(78.3)

 

(16.7)

 

(31.0)

 

(126.0)

Depreciation expense

(6.1)

 

(5.5)

 

(14.0)

 

(25.6)

Disposals

-

 

1.3

 

0.4

 

1.7

Transfers to other asset categories

-

 

-

 

-

 

-

Balances, 31 December 2015

(84.4)

 

(20.9)

 

(44.6)

 

(149.9)

Carrying amounts

             

At 31 December 2014

213.2

 

22.6

 

48.1

 

283.9

At 31 December 2015

373.0

 

20.1

 

38.3

 

431.4

 

Land and buildings

 

Computer equipment

 

Other equipment

 

Total

Projects in progress 2015

             

Included in Carrying amounts at 31 December 2015

255.3

 

6.4

 

4.1

 

265.8

Commitments at 31 December 2015

99.1

 

0.2

 

7.3

 

106.6

10. Intangible assets

Accounting policy

Intangible assets are identifiable non-monetary assets without physical substance. The Bank’s intangible assets consist of computer software internally developed or externally acquired.

Costs that are directly associated with the internal development of identifiable software are recognized as intangible assets if, in management’s best estimate, the asset can technically be completed and will provide a future economic benefit to the Bank. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates.

Computer software assets that are acquired by the Bank and have finite useful lives are measured at cost less accumulated amortization and accumulated impairment losses.

Amortization is calculated using the straight-line method and is applied over the estimated useful lives of the assets, which may vary from 3 to 15 years. The estimated useful life and amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in the estimate being accounted for on a prospective basis.

Carrying value of intangible assets

 

Internally generated software

 

Other software

 

Total

2016

         

Cost

         

Balances, 31 December 2015

49.1

 

64.1

 

113.2

Additions

4.3

 

3.6

 

7.9

Disposals

-

 

(4.6)

 

(4.6)

Transfers to other asset categories

-

 

-

 

-

Balances, 31 December 2016

53.4

 

63.1

 

116.5

Accumulated amortization

         

Balances, 31 December 2015

(41.0)

 

(34.3)

 

(75.3)

Amortization expense

(1.5)

 

(8.1)

 

(9.6)

Disposals

-

 

4.6

 

4.6

Transfers to other asset categories

-

 

-

 

-

Balances, 31 December 2016

(42.5)

 

(37.8)

 

(80.3)

Carrying amounts

         

At 31 December 2015

8.1

 

29.8

 

37.9

At 31 December 2016

10.9

 

25.3

 

36.2

 

Internally generated software

 

Other software

 

Total

Projects in progress 2016

         

Included in Carrying amounts at 31 December 2016

4.6

 

2.5

 

7.1

Commitments at 31 December 2016

-

 

-

 

-

 

Internally generated software

 

Other software

 

Total

2015

         

Cost

         

Balances, 31 December 2014

45.9

 

62.6

 

108.5

Additions

5.2

 

1.5

 

6.7

Disposals

(2.0)

 

-

 

(2.0)

Transfers to other asset categories

-

 

-

 

-

Balances, 31 December 2015

49.1

 

64.1

 

113.2

Accumulated amortization

         

Balances, 31 December 2014

(38.5)

 

(26.2)

 

(64.7)

Amortization expense

(4.5)

 

(8.1)

 

(12.6)

Disposals

2.0

 

-

 

2.0

Transfers to other asset categories

-

 

-

 

-

Balances, 31 December 2015

(41.0)

 

(34.3)

 

(75.3)

Carrying amounts

         

At 31 December 2014

7.4

 

36.4

 

43.8

At 31 December 2015

8.1

 

29.8

 

37.9

 

Internally generated software

 

Other software

 

Total

Projects in progress 2015

         

Included in Carrying amounts at 31 December 2015

7.0

 

1.4

 

8.4

Commitments at 31 December 2015

-

 

-

 

-

11. Other assets Accounting policy

Bank note inventory consists of production materials, including the polymer substrate and ink, and is measured at the lower of the cost or the net realizable value. The cost to produce finished bank notes is expensed as incurred.

Composition of other assets

 

31 December 2016

 

31 December 2015

Bank note inventory

3.0

 

11.1

Net defined-benefit asset
(note 15)

131.2

 

135.1

All other assets

30.7

 

34.5

Total other assets

164.9

 

180.7

Included in All other assets is a $15.7 million advance in connection with the Head Office Renewal Program, which is expected to remain in place through to the end of the project ($20.0 million at 31 December 2015). The advance is to facilitate the timely payment of subcontractor agreements.

12. Bank notes in circulation

In accordance with the Bank of Canada Act, the Bank has the sole authority to issue bank notes for circulation in Canada. A breakdown by denomination is presented below:

 

31 December 2016

 

31 December 2015

$5

1,265.0

 

1,232.5

$10

1,358.7

 

1,315.4

$20

19,459.0

 

18,729.3

$50

13,076.1

 

12,017.8

$100

44,178.2

 

41,032.2

Other bank notes

1,141.6

 

1,169.7

Bank notes in circulation

80,478.6

 

75,496.9

Other bank notes include denominations that are no longer issued but continue to be legal tender. Bank notes in circulation are non-interest-bearing liabilities and are due on demand.

13. Deposits

The liabilities within Deposits consist of $22,831.5 million in Canadian-dollar demand deposits ($24,592.9 million at 31 December 2015). The Bank pays interest on the deposits for the Government of Canada, members of Payments Canada and other financial institutions at short-term market rates, and interest expense on deposits is included in the Statement of Net Income and Comprehensive Income.

Deposits from the Government of Canada consist of $228.4 million for operational balances and $20,000.0 million held for the prudential liquidity-management plan ($2,617.3 million and $20,000.0 million, respectively, at 31 December 2015).

14. Securities sold under repurchase agreements and other liabilities

Accounting policy

Securities sold under repurchase agreements are reverse repo-type transactions in which the Bank sells Government of Canada securities to designated counterparties with an agreement to buy them back at a predetermined price on an agreed transaction date. For accounting purposes, these agreements are treated as collateralized borrowing transactions and are recognized on the Statement of Financial Position at the amounts at which the securities were originally sold, plus accrued interest.

A provision is recognized if, as a result of a past event, the Bank has a present legal or constructive obligation that can be estimated reliably as at the statement of financial position date, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Securities sold under repurchase agreements

Balances outstanding of $1,500.0 million at 31 December 2016 ($Nil at 31 December 2015) consist of agreements with original terms to maturity of one business day.

Composition of other liabilities

 

31 December 2016

 

31 December 2015

Surplus payable to the Receiver General for Canada

468.8

 

249.5

Net defined-benefit liability (note 15)

     

Pension benefit plan

38.2

 

37.4

Other benefit plans

172.0

 

168.2

All other liabilities and
provisions

129.9

 

103.8

Total other
liabilities

808.9

 

558.9

Surplus payable to the Receiver General for Canada

The following table reconciles the surplus payable to the Receiver General for Canada:

 

31 December 2016

 

31 December 2015

Opening balance at beginning of period

249.5

 

150.4

Remittance of surplus to the Receiver General for Canada

(849.5)

 

(1,090.4)

Surplus for the Receiver General for Canada (note 16)

1,068.8

 

1,189.5

Closing balance at
period-end

468.8

 

249.5

All other liabilities and provisions

Other liabilities consists of provisions, a finance lease obligation (note 17), accounts payable and accrued liabilities. Included in Other liabilities is a $19.9 million provision as a result of the program to overhaul and modernize the head office building for the lease agreement of the temporary office space and for site restoration costs ($15.1 million at 31 December 2015).

15. Employee benefits

Accounting policy

Short-term employee benefits

Short-term employee benefits include cash salary, bonus, annual leave, health benefits, dental care and statutory benefits and are measured on an undiscounted basis.

Long-term employee benefits

The Bank sponsors a long-term disability program.

The liability recognized in respect of this plan amounts to the present value of the defined-benefit obligation. The present value of the defined-benefit obligation is calculated by discounting estimated future cash flows using interest rates on high-quality corporate bonds with terms to maturity approximating the estimated duration of the obligation. The expense recognized for the reporting period consists of current service costs, interest costs, remeasurement gains and losses, and past service costs.

The current service costs and the benefit obligations of the plan are actuarially determined on an event-driven accounting basis. Remeasurement gains and losses, as well as past service costs arising from plan amendments, are recognized immediately on the Statement of Net Income and Comprehensive Income in the period in which they occur.

Post-employment defined-benefit plans

The Bank sponsors a funded defined-benefit pension plan (the Bank of Canada Pension Plan) and a funded defined-benefit supplementary pension arrangement (the Bank of Canada Supplementary Pension Arrangement, or SPA), which are designed to provide retirement income benefits to eligible employees. The Bank of Canada Pension Plan was established under the provisions of the Bank of Canada Act, 1934, and has remained in accordance with the Bank of Canada Act as subsequently amended. The Bank of Canada Pension Plan is a registered plan as defined in the Income Tax Act (Canada) (ITA) and, consequently, is not subject to income taxes. The Supplementary Pension Arrangement was created to pay pension benefits to Bank employees with annual earnings above the amount covered by the Bank of Canada Pension Plan, as provided under the ITA. The Supplementary Pension Arrangement is a Retirement Compensation Arrangement as defined in the ITA.

Benefits provided under these plans are calculated based on years of service and average full-time salary for the best five consecutive years and are indexed to reflect changes in the consumer price index on the date payments begin and each 1 January thereafter. The Bank is the administrator of the pension plans. The Bank’s Board of Directors has established a Pension Committee and has delegated to it the responsibility for carrying out the Bank’s duties as administrator of the plans, including adherence to the guidelines established in the Statement of Investment Policy and Procedures (SIPP), which is approved annually by the Board. A separate trust fund has been established for each plan to receive and invest contributions and pay benefits due under the plans.

The most recent actuarial valuation for funding purposes of the Pension Plan was done as at 1 January 2016, and the next required valuation will be as at 1 January 2017.

The Bank also sponsors other unfunded post-employment defined-benefit plans, which include life insurance and eligible health and dental benefits, as well as a long- service benefit program for employees hired before 1 January 2003.

The net asset or liability of these plans is recognized on the Statement of Financial Position. The net asset or liability recognized at period-end in respect of these plans is composed of the present value of the defined-benefit obligation less the fair value of plan assets, when applicable. The present value of the defined-benefit obligation is calculated by discounting estimated future cash flows using interest rates on high-quality corporate bonds with terms to maturity approximating the estimated duration of the obligation. The expense recognized for the reporting period consists of current service costs, past service costs, net interest on the net defined-benefit liability/asset, gains or losses arising on settlement (if applicable) and administrative costs. Net interest is calculated by applying the discount rate to the net defined-benefit liability/asset.

The current service costs and the benefit obligations of the plans are actuarially determined using the projected unit credit method. Remeasurements comprise actuarial gains and losses, the return on plan assets and the effect of the asset ceiling (if applicable). They exclude amounts included in net interest on the net defined-benefit liability/asset. Remeasurements are recognized immediately in Other Comprehensive Income in the period in which they occur. Past service costs are recognized at the earlier of when the plan amendment or curtailment occurs or when the entity recognizes related restructuring costs or termination benefits. Plan assets of funded benefit plans are determined according to their fair value at the end of the reporting period.

Termination benefits

A liability for termination benefits is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit or when the entity recognizes any related restructuring costs.

Net defined benefits

The changes in plan assets and defined-benefit obligations for the year are as follows:

 

Pension benefit plans

 

Other benefit plans

 

31 December 2016

 

31 December 2015

 

31 December 2016

 

31 December 2015

Fair value of plan assets

             

Fair value of plan assets at beginning of year

1,596.8

 

1,569.2

 

-

 

-

Interest income

65.2

 

62.5

 

-

 

-

Remeasurement gains (losses)

             

Return on plan assets (see footnote 6)

56.5

 

(20.5)

 

-

 

-

Bank contributions

27.5

 

25.4

 

-

 

-

Employee contributions

11.0

 

13.5

 

-

 

-

Benefit payments and transfers

(53.4)

 

(51.2)

 

-

 

-

Administration costs

(2.0)

 

(2.1)

 

-

 

-

Fair value of plan assets at end of year

1,701.6

 

1,596.8

 

-

 

-

Defined-benefit obligation

             

Benefit obligation at beginning of year

1,499.1

 

1,466.4

 

168.2

 

172.8

Current service cost

37.5

 

35.9

 

5.3

 

5.4

Interest cost

62.1

 

59.2

 

6.8

 

6.8

Employee contributions

11.0

 

13.5

 

-

 

-

Remeasurement (gains) losses

             

Arising from changes in demographic experience

-

 

1.7

 

-

 

-

Arising from changes in financial assumptions

52.2

 

(26.4)

 

(0.4)

 

(9.5)

Benefit payments and transfers

(53.3)

 

(51.2)

 

(7.9)

 

(7.3)

Defined-benefit obligation at end of year

1,608.6

 

1,499.1

 

172.0

 

168.2

Net defined-benefit asset (liability)

93.0

 

97.7

 

(172.0)

 

(168.2)

Net defined-benefit asset

131.2

 

135.1

 

-

 

-

Net defined-benefit liability

(38.2)

 

(37.4)

 

(172.0)

 

(168.2)

Net defined-benefit asset (liability)

93.0

 

97.7

 

(172.0)

 

(168.2)

Pension benefit plans asset mix

The Plan’s SIPP requires that its investments be held in a diversified mix of asset types and also sets out requirements for investment eligibility. The diversification of assets serves to decrease the variations in the expected return performance of the portfolio. The current practice is to conduct an Asset-Liability Modelling (ALM) study every three years. The ALM assists the Pension Committee in establishing an asset allocation that is consistent with the pension plan’s objectives and the Bank’s risk tolerance. The latest ALM was approved by the Pension Committee in September 2015.

The Plan’s investments are subject to credit, liquidity and market risks. Of these risks, the most significant is asset volatility because plan liabilities are calculated using a discount rate set with reference to the yield on Canadian AA-corporate bonds. If plan assets underperform this yield, a deficit will be created. Requirements for asset diversification and investment eligibility serve as basic risk management tools for the investment portfolio as a whole.

The pension benefit plan assets consist of the following:

 

31 December 2016

 

31 December 2015

 

Quoted

 

Unquoted

 

Total

 

%

 

Quoted

 

Unquoted

 

Total

 

%

Money market instruments

8.1

 

-

 

8.1

 

0.5

 

1.7

 

-

 

1.7

 

0.1

Equity instruments

                             

Canadian equity funds

317.7

 

-

 

317.7

 

18.8

 

308.7

 

-

 

308.7

 

19.4

Foreign equity funds

543.2

 

-

 

543.2

 

31.8

 

601.8

 

-

 

601.8

 

37.6

Debt instruments (see footnote 7)

                             

Securities issued or guaranteed by the Government of Canada

232.0

 

-

 

232.0

 

13.6

 

220.3

 

-

 

220.3

 

13.8

Other securities

353.6

 

-

 

353.6

 

20.8

 

354.2

 

-

 

354.2

 

22.2

Real estate funds

-

 

211.8

 

211.8

 

12.4

 

-

 

76.7

 

76.7

 

4.8

SPA statutory deposit

-

 

35.2

 

35.2

 

2.1

 

-

 

33.4

 

33.4

 

2.1

 

1,454.6

 

247.0

 

1,701.6

 

100.0

 

1,486.7

 

110.1

 

1,596.8

 

100.0

Defined-benefit obligations and expenses

The defined-benefit obligation, presented in terms of membership, is as follows:

 

Pension benefit plans

 

Other benefit plans

 

31 December 2016

 

31 December 2015

 

31 December 2016

 

31 December 2015

Active members

627.7

 

584.1

 

87.9

 

86.2

Pensioners

884.7

 

821.2

 

84.1

 

82.0

Deferred members

96.2

 

93.8

 

-

 

-

Defined-benefit obligation

1,608.6

 

1,499.1

 

172.0

 

168.2

Benefit plan expenses recognized in the Statement of Net Income and Comprehensive Income are composed of the following components:

 

Pension benefit plans

 

Other benefit plans

 

31 December 2016

 

31 December 2015

 

31 December 2016

 

31 December 2015

Current service cost, net of employee contributions

37.5

 

35.9

 

5.3

 

5.4

Net interest expense

(3.1)

 

(3.3)

 

6.8

 

6.8

Actuarial gains arising from changes in financial assumptions

-

 

-

 

(0.6)

 

-

Administration costs

2.0

 

2.1

 

-

 

-

Benefit plan expense recognized in Net Income

36.4

 

34.7

 

11.5

 

12.2

Remeasurement on the net defined-benefit liability/asset

             

Return on plan assets (excluding net interest)

(56.5)

 

20.5

 

-

 

-

Actuarial losses arising from changes in demographic experience

-

 

1.7

 

-

 

-

Actuarial (gains) losses arising from changes in financial assumptions

52.2

 

(26.4)

 

0.2

 

(9.5)

Remeasurement (gains) losses recognized in Other Comprehensive Income

(4.3)

 

(4.2)

 

0.2

 

(9.5)

Remeasurement gains and losses pertaining to post-employment benefit plans are recognized in Other Comprehensive Income and are accumulated in Equity.

The cumulative remeasurement losses recognized in Other Comprehensive Income are as follows:

 

Pension benefit plans

 

Other benefit plans

 

31 December 2016

 

31 December 2015

 

31 December 2016

 

31 December 2015

Cumulative remeasurement losses recognized, beginning of year

(216.5)

 

(220.7)

 

(16.6)

 

(26.1)

Remeasurement gains (losses) recognized in current year

4.3

 

4.2

 

(0.2)

 

9.5

Cumulative remeasurement losses recognized, end of year

(212.2)

 

(216.5)

 

(16.8)

 

(16.6)

Total cash payments

Regulations governing federally regulated pension plans establish certain solvency requirements that assume that the plans are wound up at the valuation date. Actuarial valuations for funding purposes are required annually under the Pension Benefits Standards Act. The actuarial valuation of the Pension Plan completed at 1 January 2016 reported a solvency surplus of $20.0 million and a three-year average solvency surplus of $37.0 million. Contributions in 2017 will be based on the actuarial valuation as at 1 January 2017 and are estimated to be $24.3 million ($22.0 million in 2016), consisting solely of regular contributions to cover current service costs.

Assumptions

The cost of the defined-benefit pension plans and other benefits plans and the present value of the benefit obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from future developments. These assumptions include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Owing to the complexities involved in the valuation and its long-term nature, a defined-benefit obligation is highly sensitive to changes in these assumptions.

The most recent actuarial valuation for funding purposes of the Pension Plan was done as at 1 January 2016, and the next required valuation will be as at 1 January 2017.

The significant assumptions used are as follows (on a weighted-average basis):

 

Pension benefit plans

 

Other benefit plans

 

31 December 2016

 

31 December 2015

 

31 December 2016

 

31 December 2015

Defined-benefit obligation

             

Discount rate

3.90%

 

4.10%

 

3.84%

 

4.02%

Inflation rate (see footnote 8)

2.00%

 

2.00%

 

n.a.

 

n.a.

Rate of compensation increase

3.20%

 

3.20%

 

3.20%

 

3.20%

 

+ merit

 

+ merit

 

+ merit

 

+ merit

Benefit plan expense

             

Discount rate

4.10%

 

4.00%

 

4.02%

 

3.99%

Inflation rate (see footnote 9)

2.00%

 

2.00%

 

n.a.

 

n.a.

Rate of compensation increase

3.20%

 

3.20%

 

3.20%

 

3.20%

 

+ merit

 

+ merit

 

+ merit

 

+ merit

Assumed medical cost trend

             

Medical cost trend rate

n.a.

 

n.a.

 

5.80 - 4.50%

 

5.95 - 4.50%

Year that the rate reaches the ultimate trend rate

n.a.

 

n.a.

 

2029

 

2029

The parameter most subject to change is the discount rate, which is determined by reference to Canadian AA-corporate bonds with terms to maturity approximating the duration of the obligation.

The weighted-average duration of the defined-benefit obligation is approximately 17 years for the Pension benefit plans and 6 to 19 years for the Other benefit plans.

The mortality assumptions used in the plan valuations are based on tables issued by the Canadian Institute of Actuaries. Actuarial adjustments to the tables are applied when recommended by the plan’s actuaries. In 2016, the assumption for life expectancy for the plan valuations assumes that a male member reaching 60 will live for approximately 27 years (2015: 27 years) and a female member approximately 29 years (2015: 29 years).

Sensitivity analysis

The following table outlines the potential impact of changes in certain key assumptions used in measuring the defined-benefit obligations and benefit costs.

Increase (decrease) in obligation (see footnote 10)

 

Pension benefit plans

 

Other benefit plans

Discount rate

3.90%

 

3.84%

Impact of 0.10 percentage point increase

(26.4)

 

(2.8)

Impact of 0.10 percentage point decrease

27.2

 

2.9

Rate of compensation
increase

3.20%

 

3.20%

Impact of 0.10 percentage point increase

4.5

 

0.3

Impact of 0.10 percentage point decrease

(4.4)

 

(0.3)

Mortality rate

     

Impact of 0.10 percentage point increase

(32.9)

 

(2.8)

Impact of 0.10 percentage point decrease

36.5

 

3.3

Inflation rate

2.00%

 

n.a.

Impact of 0.10 percentage point increase

24.2

 

n.a.

Impact of 0.10 percentage point decrease

(23.6)

 

n.a.

Medical cost trend rates

n.a

 

5.80%

Impact of 1.00 percentage point increase

n.a

 

30.4

Impact of 1.00 percentage point decrease

n.a

 

(23.4)

16. Equity

The Bank manages its capital to ensure compliance with the Bank of Canada Act. There were no other externally imposed capital requirements at the end of the reporting year.

The elements of equity are shown in the table below:

 

31 December 2016

 

31 December 2015

Share capital

5.0

 

5.0

Statutory reserve

25.0

 

25.0

Special reserve

100.0

 

100.0

Available-for-sale reserve

357.0

 

368.2

Retained earnings

-

 

-

Total equity

487.0

 

498.2

Share capital

The authorized capital of the Bank is $5.0 million divided into 100 000 shares with a par value of $50 each. The shares are fully paid and have been issued to the Minister of Finance, who holds them on behalf of the Government of Canada.

Statutory reserve

The statutory reserve was accumulated out of net income until it reached the stipulated maximum amount of $25.0 million in 1955, consistent with the requirement of section 27 of the Bank of Canada Act.

Special reserve

The special reserve was created in 2007 further to an amendment to the Bank of Canada Act to offset potential unrealized valuation losses due to changes in the fair value of the Bank’s available-for-sale portfolio. The amount held in the special reserve is reviewed regularly for appropriateness using value-at-risk analysis and scenario-based stress tests and may be amended, pursuant to a resolution passed by the Board of Directors. This reserve is subject to a ceiling of $400 million; an initial amount of $100 million was established in September 2007, consistent with the requirement of section 27.1 of the Bank of Canada Act.

Available-for-sale reserve

The available-for-sale reserve represents cumulative movements in the fair value of the Bank’s available-for-sale portfolios, as shown below:

 

31 December 2016

 

31 December 2015

Government of Canada treasury bills

-

 

1.1

BIS shares

357.0

 

367.1

Available-for-sale reserve

357.0

 

368.2

Retained earnings

The net income of the Bank, less any allocation to reserves, is considered to be ascertained surplus (surplus) and is transferred to the Receiver General for Canada, consistent with the requirement of section 27 of the Bank of Canada Act.

The Bank’s remittance agreement with the Minister of Finance was designed to enable the Bank to manage its equity requirements considering the volatility arising from fair-value changes and remeasurements (which are recorded in Other Comprehensive Income). This agreement allows the Bank to withhold from its remittance to the Receiver General any increase in cumulative net unrealized losses on AFS financial assets, unrealized remeasurements of the net defined-benefit liability/asset on defined-benefit plans and other unrealized or non-cash losses arising as a result of changes in accounting standards or legislation. Any decrease in withheld cumulative net unrealized non-cash losses is added to the remittance.

During 2016, the Bank reimbursed $3.9 million from its previously withheld remittances ($13.7 million in 2015). As at 31 December 2016, $109.4 million in withheld remittances was outstanding ($113.3 million as at 31 December 2015).

17. Leases

Accounting policy

Where the Bank is a lessee

Leases of equipment where the Bank has substantially assumed all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease’s inception at the lower of the fair value of the leased asset or the present value of the minimum lease payments. The corresponding lease obligations, net of finance charges, are included in Other liabilities. Each lease payment is allocated between the liability and finance charges to achieve a constant rate of return on the finance lease obligation outstanding. Equipment acquired under finance leases is depreciated over the shorter of the asset’s useful life or the lease term.

Other leases are classified as operating leases. Payments made under operating leases are charged to the Statement of Net Income and Comprehensive Income on a straight-line basis over the period of the lease.

Where the Bank is a lessor

Leases granted on the Bank’s property were assessed and classified as operating leases because the risks and rewards of ownership are not transferred to the lessees. Operating lease income is recognized on a straight-line basis over the period of the lease.

Operating lease commitments

The Bank occupies leased premises in Ottawa, Halifax, Montréal, Toronto, Calgary and Vancouver. The minimum payments are determined at the beginning of the lease and may vary during the term of the lease. Contingent rent on premises leases is based on building operating costs; for office equipment leases, contingent rent is based on usage. The expiry dates vary for each lease, from November 2017 to October 2025.

At 31 December 2016, the future minimum payments for rent, real estate taxes and building operations are presented below.

 

31 December 2016

 

31 December 2015

Due within one year

15.9

 

16.1

Due within one to five years

9.3

 

24.8

Due later than five years

1.4

 

1.7

Total premises lease commitments

26.6

 

42.6

Lease payments expensed

20.8

 

15.6

Finance lease commitments

As at 31 December 2016, the future minimum lease payments were $4.0 million ($6.6 million as at 31 December 2015) for equipment obtained through a finance lease arrangement (note 9). The net carrying amount of the equipment at 31 December 2016 was $3.8 million ($6.3 million at 31 December 2015). The finance lease obligation amounted to $3.7 million at 31 December 2016 ($6.5 million as at 31 December 2015) and is recorded in Other liabilities (note 14).

18. Commitments, contingencies and guarantees

Long-term contracts other than leases

Commitments related to the program to overhaul and modernize the head office building are included in commitments for Property and equipment in note 9.

The Bank has a long-term contract with an outside service provider for retail debt services that expires in 2021. At 31 December 2016, fixed payments totalling $91.5 million remained, plus a variable component based on the volume of transactions.

The Bank has a long-term contract with an outside service provider for data centre services that expires in 2025. At 31 December 2016, fixed payments totalling $10.6 million remained.

At 31 December 2016, the total minimum payments for long-term contracts, other than leases, Property and equipment and Intangible assets, are as follows:

Due within one year

22.5

Due within one to three years

45.0

Due within three to five years

34.7

Thereafter

1.8

Total minimum payments

104.0

Foreign currency contracts

The Bank is a counterparty to several foreign currency swap facilities as follows:

 

Maximum available

Bilateral liquidity swap facilities with central banks

 

Bank of Japan (denominated in Japanese yen)

Unlimited

Swiss National Bank (denominated in Swiss francs)

Unlimited

Bank of England (denominated in British pounds)

Unlimited

European Central Bank (denominated in euros)

Unlimited

Federal Reserve Bank of New York (denominated in U.S. dollars)

Unlimited

People’s Bank of China (denominated in renminbi)

200,000.0

Other swap facilities

 

Exchange Fund Account of Canada (denominated in Canadian dollars)

Unlimited

Federal Reserve Bank of New York (denominated in U.S. dollars)

2,000.0

Banco de México (denominated in Canadian dollars)

1,000.0

Bank for International Settlements (denominated in Canadian dollars)

100.0

Bilateral liquidity swap facilities with central banks

The bilateral liquidity swap facilities were established to provide liquidity in each jurisdiction in any of their currencies, should market conditions warrant.

The swap facilities with the Bank of Japan, the Swiss National Bank, the Bank of England, the European Central Bank and the Federal Reserve Bank of New York are standing arrangements with no expiry date. The Bank of Canada and the People’s Bank of China signed a reciprocal three-year Canadian-dollar/renminbi bilateral swap arrangement in November 2014.

These facilities can be structured as either a Canadian-dollar liquidity swap or a foreign currency liquidity swap arrangement and can be initiated by either party. The exchange rate applicable to the swap facilities is based on the prevailing market spot exchange rate as mutually agreed upon by the parties.

Other swap facilities

The other swap facilities established with the Federal Reserve Bank of New York and with the Banco de México, which expire on 12 December 2017, have indefinite terms and are subject to annual renewal.

The Bank is party to a standing foreign currency swap facility with the Exchange Fund Account of Canada. There is no stated maximum amount under this agreement.

The Bank is also party to a swap facility with the BIS for operational purposes. Transactions executed under this agreement are generally one business day in duration. The BIS swap was accessed in 2016 and 2015 for operational purposes. None of the other liquidity or other swaps were accessed, by either party, in 2016 or 2015. No related commitments existed as at 31 December 2016 ($Nil as at 31 December 2015).

Contingency

The 9 441 shares in the BIS have a nominal value of 5 000 Special Drawing Rights per share, of which 25 per cent (i.e. SDR1,250) is paid up. The balance of SDR3,750 is callable at three months’ notice by a decision of the BIS Board of Directors. The Canadian equivalent of this contingent liability was $63.9 million at 31 December 2016 ($67.9 million at 31 December 2015), based on prevailing exchange rates.

Guarantees

In the normal course of operations, the Bank enters into certain guarantees, which are described below.

LVTS guarantee

The LVTS is a large-value payments system, owned and operated by Payments Canada. Any deposit-taking financial institution that is a member of Payments Canada can participate in the LVTS, provided that it maintains a settlement account at the Bank of Canada, has the facilities to pledge collateral for LVTS purposes and meets certain technical requirements. The system’s risk-control features, which include caps on net debit positions and collateral to secure the use of overdraft credit, are sufficient to permit the system to obtain the necessary liquidity to settle in the event of the failure of the single LVTS participant with the largest possible net amount owing. The Bank guarantees to provide this liquidity, and, in the event of a single-participant failure, the liquidity loan will be fully collateralized. In the extremely unlikely event that there were defaults by more than one participant during the LVTS operating day, in an aggregate amount in excess of the largest possible net amount owing by a single participant, there would not likely be enough collateral to secure the amount of liquidity that the Bank would need to provide to settle the system. This might result in the Bank having unsecured claims on the defaulting participants in excess of the amount of collateral pledged to the Bank to cover the liquidity loans. The Bank would have the right, as an unsecured creditor, to recover any amount of its liquidity loan that was unpaid. The amount potentially at risk under this guarantee is not determinable, since the guarantee would be called upon only if a series of extremely low-probability events were to occur. No amount has ever been provided for in the liabilities of the Bank, and no amount has ever been paid under this guarantee.

Other indemnification agreements

In the normal course of operations, the Bank provides indemnification agreements with various counterparties in transactions such as service agreements, software licences, leases and purchases of goods. Under these agreements, the Bank agrees to indemnify the counterparty against loss or liability arising from acts or omissions of the Bank in relation to the agreement. The nature of the indemnification agreements prevents the Bank from making a reasonable estimate of the maximum potential amount that the Bank would be required to pay such counterparties. No amount has ever been paid under such indemnifications.

Insurance

The Bank does not normally insure against direct risks of loss to the Bank, except for potential liabilities to third parties and when there are legal or contractual obligations to carry insurance. However, in connection with the Head Office Renewal Program, the Bank has obtained insurance coverage for the period of construction to cover direct risks to the Bank’s property.

Any costs arising from risks not insured are recognized in the accounts if, as a result of a past event, the Bank has a present legal or constructive obligation that can be estimated reliably as at the statement of financial position date, and it is probable that an outflow of economic benefits will be required to settle the obligation.

19. Related parties

The Bank is related in terms of common ownership to all Government of Canada departments, agencies and Crown corporations. To achieve its monetary policy objectives, the Bank maintains a position of structural and functional independence from the Government of Canada through its ability to fund its own operations without external assistance and through its management and governance.

In the normal course of its operations, the Bank enters into transactions with related parties, and material transactions and balances are presented in these financial statements. Not all transactions between the Bank and government-related entities have been disclosed, as permitted by the partial exemption available to wholly-owned government entities in International Accounting Standard 24 Related Party Disclosures (IAS 24).

The Bank provides funds-management, fiscal-agent and banking services to the Government of Canada, as mandated by the Bank of Canada Act, and does not recover the costs of these services.

Bank of Canada pension plans

The Bank provides management, investment and administrative support to the Bank of Canada Pension Plan. Services in the amount of $0.9 million ($0.9 million in 2015) were fully recovered from the Plan in 2016.

Key management personnel and compensation

The key management personnel responsible for planning, directing and controlling the activities of the Bank are the members of the Executive Council, the Senior Management Council and the Board of Directors. The number of key management personnel as at 31 December 2016 was 27 (29 in 2015).

The compensation of key management personnel is presented in the following table:

 

31 December 2016

 

31 December 2015

Short-term employee benefits

4.8

 

5.0

Post-employment benefits

2.0

 

1.6

Directors’ fees

0.3

 

0.2

Total compensation

7.1

 

6.8

Short-term employee benefits and post-employment benefits apply to Bank of Canada employees only.

There were no other long-term employee benefit costs or termination benefits related to key management personnel in 2016 ($Nil in 2015).

20. Comparative figures

Certain comparative figures have been reclassified to conform to the current year’s presentation, which distinguishes the nature of overnight repo operations from term repo operations in the Statement of Cash Flows.

For the comparative Statement of Cash Flows, amounts related to the acquisition and proceeds from the maturity of term repo operations were reclassified from operating activities to investing activities. As a result, cash flows from operating activities increased by $2,324.2 million, and cash flows from investing activities decreased by $2,324.2 million.

[13-1-o]

DEPARTMENT OF THE ENVIRONMENT

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

Notice to provide information for the risk management of certain substances — Summer 2017

Pursuant to paragraph 71(1)(b) of the Canadian Environmental Protection Act, 1999 (hereinafter referred to as the “Act”), notice is hereby given that the Minister of the Environment requires, for the purpose of assessing whether to control, or the manner in which to control the substances described in Schedule 1 to this notice, any person described in Schedule 2 to this notice who possesses or who may reasonably be expected to have access to the information required in Schedule 3 to this notice, to provide that information no later than June 28, 2017, 3 p.m., Eastern Daylight Saving Time.

Responses to this notice shall be submitted to the Minister of the Environment, using the online reporting system available through Environment and Climate Change Canada’s Single Window at https://ec.ss.ec.gc.ca/. Inquiries concerning the notice may be directed to the Substances Management Information Line at 1-800-567-1999 (toll free in Canada), 819-938-3232 (outside of Canada) [telephone], or eccc.substances.eccc@canada.ca (email).

Pursuant to section 313 of the Act, any person who provides information in response to this notice may submit, with the information, a written request that the information or part of it be treated as confidential.

Pursuant to subsection 71(4) of the Act, the Minister of the Environment may, on request in writing from any person to whom this notice applies, extend the time or times within which the person shall comply with this notice. The person seeking such extension shall submit, prior to the deadline, a request to the Minister of the Environment, to the attention of the Substances Management Coordinator, Chemicals Management Plan, Gatineau, Quebec K1A 0H3, or eccc.substances.eccc@canada.ca (email).

Marc D’Iorio
Director General
Industrial Sectors, Chemicals and Waste Directorate

Jacqueline Gonçalves
Director General
Science and Risk Assessment Directorate

On behalf of the Minister of the Environment

SCHEDULE 1

Substances

Part 1

Hexavalent chromium compounds, including, but not limited to, the substances listed in the table below.

CAS RN (see footnote 11)

Name of the substance

1333-82-0

Chromium oxide

1624-02-8

Chromic acid (H2CrO4), bis(triphenylsilyl) ester Bis(triphenylsilyl) chromate

7329-33-1

Hexanoic acid, 2-ethyl-, chromium salt

7738-94-5

Chromic acid

7758-97-6

Chromic acid (H2CrO4), lead(2++) salt (1:1)

7775-11-3

Chromic acid (H2CrO4), disodium salt

7778-50-9

Chromic acid (H2Cr2O7), dipotassium salt

7789-00-6

Chromic acid (H2CrO4), dipotassium salt

7789-06-2

Chromic acid (H2CrO4), strontium salt (1:1)

7789-09-5

Chromic acid (H2Cr2O7), diammonium salt

10294-40-3

Chromic acid (H2CrO4), barium salt (1:1)

10588-01-9

Chromic acid (H2Cr2O7), disodium salt

11103-86-9

Chromate(1-), hydroxyoctaoxodizincatedi-, potassium

13423-61-5

Chromic acid (H2CrO4), magnesium salt (1:1)

13455-25-9

Chromic acid (H2CrO4), cobalt(2++) salt (1:1)

13530-65-9

Chromic acid (H2CrO4), zinc salt (1:1)

13530-68-2

Chromic acid

13765-19-0

Chromic acid (H2CrO4), calcium salt (1:1)

14307-33-6

Chromic acid (H2Cr2O7), calcium salt (1:1)

14307-35-8

Chromic acid (H2CrO4), dilithium salt

18454-12-1

Lead chromate oxide

20039-37-6

Chromic acid (H2Cr2O7), compd. with pyridine (1:2)

20195-23-7

Octanoic acid, chromium salt

49663-84-5

Zinc chromate hydroxide (Zn5(CrO4)(OH)8)

75578-75-5

Phenazinium, 3-[[7-[(4-aminophenyl)amino]-5-phenylphenazinium-3-yl]amino]-5-phenyl-7-[[5-phenyl-7-(phenylamino)phenazinium-3-yl]amino]-, salt with chromic acid (H2Cr2O7) (2:3)

Part 2

CAS RN

Name of the substance

Common name

68412-48-6

2-Propanone, reaction products with diphenylamine

PREPOD

9003-79-6

2-Propanone, polymer with N-phenylbenzenamine

 

Part 3

CAS RN

Name of the substance

Common name

13560-89-9

1,4:7,10-Dimethanodibenzo[a,e] cyclooctene, 1,2,3,4,7,8,9,10, 13,13,14,14-dodecachloro-1,4,4a,5,6,6a,7,10,10a,11, 12,12a-dodecahydro-

Dechlorane Plus, DP

84852-53-9

Benzene, 1,1′-(1,2-ethanediyl)bis[2,3,4,5,6-pentabromo-

DBDPE

1163-19-5

Benzene, 1,1′-oxybis[2,3,4,5,6-
pentabromo-

DecaBDE

Part 4

Refractory ceramic fibres, including, but not limited to, the substance listed in the table below.

CAS RN

Name of the substance

Common names

142844-00-6

Refractory ceramic fibre

RCF, Alumino-silicate wool

SCHEDULE 2

Persons required to provide information

1. This notice applies to any person who, during the 2015 or 2016 calendar year, manufactured a total quantity greater than 25 kg of a substance described in Part 1 of Schedule 1 to this notice.

2. This notice applies to any person who, during the 2015 or 2016 calendar year, manufactured a total quantity greater than 100 kg of a substance described in Parts 2 to 4 of Schedule 1 to this notice.

3. This notice applies to any person who, during the 2015 or 2016 calendar year, imported a total quantity greater than 25 kg of a substance described in Part 1 of Schedule 1 to this notice, whether alone, in a mixture or in a product at a concentration equal to or above 0.1% by weight (w/w%).

4. This notice applies to any person who, during the 2015 or 2016 calendar year, imported a total quantity greater than 100 kg of a substance listed in Part 2 of Schedule 1 to this notice, whether alone, in a mixture or in a product at a concentration equal to or above 0.1% by weight (w/w%).

5. This notice applies to any person who, during the 2015 or 2016 calendar year, imported a total quantity greater than 100 kg of a substance listed in Part 3 of Schedule 1 to this notice, at a concentration equal to or above 0.1% by weight (w/w%), whether

  • (a) alone, in a mixture, or in a product; or
  • (b) in a manufactured item that is
    • (i) a vehicle, aircraft or watercraft, or a part contained therein,
    • (ii) a construction material,
    • (iii) a carpet, vinyl or laminate flooring, or foam underlay for flooring,
    • (iv) a cable, a wire, an appliance, or an electrical device or equipment,
    • (v) a rubber conveyor belt,
    • (vi) a plastic pallet, other than a plastic pallet used to import other goods, or
    • (vii) clothing, footwear, bedding, furniture or furnishing if the substance is contained in a foam, leather, textile fibre, yarn or fabric.

6. This notice applies to any person who, during the 2015 or 2016 calendar year, imported a total quantity greater than 100 kg of the substance described in Part 4 of Schedule 1 to this notice, at a concentration equal to or above 0.1% by weight (w/w%), whether alone, in a mixture, in a product or in a manufactured item.

7. This notice applies to any person who, during the 2015 or 2016 calendar year, used a total quantity greater than 25 kg of a substance described in Part 1 of Schedule 1 to this notice, whether the substance was used alone, in a mixture or in a product at a concentration equal to or above 0.1% by weight (w/w%), for chromium electroplating, chromium anodizing or reverse etching.

8. This notice applies to any person who, during the 2015 or 2016 calendar year, used a total quantity greater than 100 kg of a substance listed in Part 2 or Part 3 of Schedule 1 to this notice, whether the substance was used alone, in a mixture or in a product at a concentration equal to or above 0.1% by weight (w/w%) in the manufacture of a mixture, a product, or a manufactured item.

9. This notice applies to any person who, during the 2015 or 2016 calendar year, used a total quantity greater than 1 000 kg of a substance described in Part 4 of Schedule 1 to this notice, at a concentration equal to or above 0.1% by weight (w/w%), whether the substance was used alone, in a mixture, or in a product.

10. For each activity with a substance, either manufacture, import or use, any person for whom the criteria set out in this Schedule have been met for both the 2015 and 2016 calendar years shall provide information prescribed in sections 6 to 11 of Schedule 3 to this notice for the 2016 calendar year only. If the criteria set out in Schedule 2 have been met only for the 2015 calendar year, any person who manufactured, imported or used a substance shall provide information prescribed in sections 6 to 11 of Schedule 3 to this notice for the 2015 calendar year only.

11. This notice does not apply to a substance described in Schedule 1, whether alone, in a mixture, in a product or in a manufactured item that

  • (a) is in transit through Canada;
  • (b) is, or is contained in, a hazardous waste or hazardous recyclable material within the meaning of the Export and Import of Hazardous Waste and Hazardous Recyclable Material Regulations and was imported pursuant to a permit issued under these Regulations;
  • (c) is, or is contained in, a pest control product registered under the Pest Control Products Act;
  • (d) is, or is contained in, a fertilizer or supplement registered under the Fertilizers Act;
  • (e) is, or is contained in, a feed registered under the Feeds Act; or
  • (f) is mixed with, or attached to, a seed registered under the Seeds Act.

12. Any person to whom this notice applies who

  • (a) manufactured, or imported alone, in a mixture or in a product, a substance described in Parts 1 to 3 of Schedule 1, shall provide the information requested in sections 4, 5, 6, 7, 8, 9 and 11 of Schedule 3;
  • (b) manufactured, or imported alone, in a mixture or in a product, a substance described in Part 4 of Schedule 1, shall provide the information requested in sections 4, 5, 6, 7, 8 and 9 of Schedule 3;
  • (c) imported a substance described in Part 3 of Schedule 1 in a manufactured item shall provide the information requested in sections 4, 5, 7, 8, 10 and 11 of Schedule 3;
  • (d) imported a substance described in Part 4 of Schedule 1 in a manufactured item shall provide the information requested in sections 4, 5, 7, 8 and 10 of Schedule 3; or
  • (e) used a substance described in Schedule 1 shall provide the information requested in sections 4, 5, 6, 7, 8 and 9 of Schedule 3.

SCHEDULE 3

Information required

1. The definitions in this section apply in this notice.

“manufacture” includes the incidental production of a substance.

“manufactured item” means an item that is formed into a specific physical shape or design during manufacture and has, for its final use, a function or functions dependent in whole or in part on its shape or design.

“mixture” means a combination of substances that does not produce a substance that is different from the substances that were combined, including prepared formulations and reaction mixtures that are fully characterized in terms of their constituent substances, hydrates, and homogeneous and heterogeneous alloys.

“product” excludes “mixture” and “manufactured item.”

2. If the person subject to the notice is a company that owns more than one facility, a single response to the notice shall be submitted. The single response shall amalgamate the information from all facilities owned by the company for each applicable question in the notice.

3. Where information required under Schedule 3 to this notice has already been sent to the Government of Canada, it may be relied on as a response to any question in Schedule 3 to this notice if

  • (a) the information previously submitted is applicable to the calendar year for which the person is reporting;
  • (b) the information meets the requirements of the specific question(s); and
  • (c) the person provides the following information:
    • (i) the CAS RN of the substance to which the submitted information relates,
    • (ii) the date on which the information was submitted,
    • (iii) the name of the person who submitted the information, and
    • (iv) the program and/or individuals to which the information was submitted.

4. Any person to whom this notice applies shall provide the following information: name of the person (e.g. company name), Canadian head office address, Federal Business Number (see footnote 12) and contact name and information.

5. For each substance described in Schedule 1 that a person manufactured, imported or used alone, in a mixture, in a product or in a manufactured item during either the 2015 or 2016 calendar year, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance; and
  • (b) whether the person manufactured, imported or used the substance alone, in a mixture, in a product or in a manufactured item according to the criteria set out in Schedule 2, during each of the 2015 and 2016 calendar years, by indicating “yes” or “no.”

6. For each substance described in Schedule 1 that a person manufactured, imported or used alone, in a mixture, or in a product during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance; and
  • (b) the total quantity of the substance manufactured, imported or used, reported in kilograms (rounded to two significant digits).

7. For each substance described in Schedule 1 that a person manufactured, imported or used alone, in a mixture, in a product or in a manufactured item during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance; and
  • (b) each applicable six-digit North American Industry Classification System (NAICS) (see footnote 13) code with respect to their involvement with the substance, the mixture, the product or the manufactured item containing the substance.

8. (1) For each substance described in Schedule 1 that a person manufactured, imported or used alone, in a mixture, in a product or in a manufactured item during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance; and
  • (b) each substance function code set out in section 12 of this Schedule that applies to the substance.

8. (2) Where code U999 is applicable for paragraph (1)(b), a written description of the substance function must be provided.

9. For each substance described in Schedule 1 that a person manufactured, imported or used alone, in a mixture, or in a product during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance;
  • (b) each consumer and commercial code set out in section 13 of this Schedule that describes the known or anticipated final goods containing the substance; and
  • (c) for each consumer and commercial code provided, the description and the common or generic name of the known or anticipated final goods containing the substance.

10. For each substance described in Part 3 or Part 4 of Schedule 1 that a person imported in a manufactured item during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the information in paragraphs (a), (b), (c), (d), (e), and (f) or paragraphs (a), (b), (c), and (d):

  • (a) the CAS RN of the substance;
  • (b) each consumer and commercial code set out in section 13 of this Schedule that describes the known or anticipated final goods containing the substance;
  • (c) for each consumer and commercial code provided, the description and the common or generic name of the known or anticipated final goods containing the substance;
  • (d) for each consumer and commercial code provided, the total number of imported manufactured items containing the substance (rounded to two significant digits);
  • (e) for each consumer and commercial code provided, the concentration, or range of concentrations, of the substance by weight (w/w%) in the manufactured item; and
  • (f) for each consumer and commercial code provided, the mass, or range of masses, of the manufactured item, in kilograms (rounded to two significant digits).

11. For each substance described in Parts 1 to 3 of Schedule 1 that a person manufactured or imported alone, in a mixture, in a product or in a manufactured item during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance;
  • (b) the name, city and province of 10 persons in Canada to whom the largest quantity greater than
    • (i) 25 kg of a substance described in Part 1 of Schedule 1 was sold,
    • (ii) 100 kg of a substance described in Part 2 or 3 of Schedule 1 was sold; and
  • (c) for substances manufactured or imported alone, in a mixture, or in a product, the total quantity of the substance sold to each person described in paragraph (b), reported in kilograms (rounded to two significant digits).

12. For the purpose of section 8, the following are the substance function codes and their corresponding descriptions:

Substance function codes

Title

Description

U001

Abrasives

Substances used to wear down or polish surfaces by rubbing against the surface.

U002

Adhesives and sealant substances

Substances used to promote bonding between other substances, promote adhesion of surfaces, or prevent seepage of moisture or air.

U003

Adsorbents and absorbents

Substances used to retain other substances by accumulation on their surface or by assimilation.

U004

Agricultural substances (non-pesticidal)

Substances used to increase the productivity and quality of farm crops.

U005

Anti-adhesive agents

Substances used to prevent bonding between other substances by discouraging surface attachment.

U006

Bleaching agents

Substances used to lighten or whiten a substrate through chemical reaction, usually an oxidative process which degrades the colour system.

U007

Corrosion inhibitors and anti-scaling agents

Substances used to prevent or retard corrosion or the formation of scale.

U008

Dyes

Substances used to impart colour to other materials or mixtures by penetrating into the surface of the substrate.

U009

Fillers

Substances used to provide bulk, increase strength, increase hardness, or improve resistance to impact.

U010

Finishing agents

Substances used to impart such functions as softening, static-proofing, wrinkle resistance, and water repellence.

U011

Flame retardants

Substances used on the surface of or incorporated into combustible materials to reduce or eliminate their tendency to ignite when exposed to heat or a flame.

U012

Fuels and fuel additives

Substances used to create mechanical or thermal energy through chemical reactions, or which are added to a fuel for the purpose of controlling the rate of reaction or limiting the production of undesirable combustion products, or which provide other benefits such as corrosion inhibition, lubrication, or detergency.

U013

Functional fluids (closed systems)

Liquid or gaseous substances used for one or more operational properties in a closed system. This code does not include fluids used as lubricants.

U014

Functional fluids (open systems)

Liquid or gaseous substances used for one or more operational properties in an open system.

U015

Intermediates

Substances consumed in a chemical reaction to produce other substances for commercial advantage.

U016

Ion exchange agents

Substances that are used to selectively remove targeted ions from a solution. This code also includes aluminosilicate zeolites.

U017

Lubricants and lubricant additives

Substances used to reduce friction, heat, or wear between moving parts or adjacent solid surfaces, or that enhance the lubricity of other substances.

U018

Odour agents

Substances used to control odours, remove odours, mask odours, or impart odours.

U019

Oxidizing and reducing agents

Substances used to alter the valence state of another substance by donating or accepting electrons or by the addition or removal of hydrogen to a substance.

U020

Photosensitive substances

Substances used for their ability to alter their physical or chemical structure through absorption of light, resulting in the emission of light, dissociation, discoloration, or other chemical reaction.

U021

Pigments

Substances used to impart colour to other materials or mixtures by attaching themselves to the surface of the substrate through binding or adhesion.

U022

Plasticizers

Substances used in plastics, cement, concrete, wallboard, clay bodies, or other materials to increase their plasticity or fluidity.

U023

Plating agents and surface treating agents

Substances applied to metal, plastic, or other surfaces to alter physical or chemical properties of the surface.

U024

Process regulators

Substances used to change the rate of a chemical reaction, start or stop the reaction, or otherwise influence the course of the reaction.

U025

Processing aids, specific to petroleum production

Substances added to water, oil, or synthetic drilling muds or other petroleum production fluids to control foaming, corrosion, alkalinity and pH, microbiological growth or hydrate formation, or to improve the operation of processing equipment during the production of oil, gas, and other products or mixtures from beneath the earth’s surface.

U026

Processing aids, not otherwise covered in this table

Substances used in applications other than the production of oil, gas, or geothermal energy to control foaming, corrosion or alkalinity and pH, or to improve the operation of processing equipment.

U027

Propellants and blowing agents

Substances used to dissolve or suspend other substances and either to expel those substances from a container in the form of an aerosol or to impart a cellular structure to plastics, rubber, or thermo set resins.

U028

Solids separation agents

Substances used to promote the separation of suspended solids from a liquid.

U029

Solvents (for cleaning or degreasing)

Substances used to dissolve oils, greases and similar materials from textiles, glassware, metal surfaces, and other articles.

U030

Solvents (which become part of formulation or mixture)

Substances used to dissolve another substance to form a uniformly dispersed solution at the molecular level.

U031

Surface active agents

Substances used to modify surface tension when dissolved in water or water solutions, or reduce interfacial tension between two liquids or between a liquid and a solid or between liquid and air.

U032

Viscosity adjustors

Substances used to alter the viscosity of another substance.

U033

Laboratory substances

Substances used in a laboratory for chemical analysis, chemical synthesis, extracting and purifying other chemicals, dissolving other substances, and similar activities.

U034

Paint additives and coating additives not otherwise covered in this table

Substances used in a paint or coating formulation to enhance properties such as water repellence, increased gloss, improved fade resistance, ease of application or foam prevention.

U061

Pest control substances

Substances used as active ingredients or formulants in products, mixtures or manufactured items used for directly or indirectly controlling, destroying, attracting or repelling a pest or for mitigating or preventing its injurious, noxious or troublesome effects.

U062

Active ingredients in health products and drugs

Substances used as active ingredients in natural health products or prescription or non-prescription drugs.

U063

Flavourants

Substances used as non-medicinal ingredients or excipients in foods, natural health products, and drugs that impart a certain flavour to the food, health product or drug.

U064

Contaminants

Substances naturally present in a reactant or a substance that is produced as a result of the manufacturing process and that has no beneficial properties in the final product, mixture or manufactured item.

U065

By-products

Substances resulting from the manufacturing process that can be partially or completely removed from the intended product, mixture or manufactured item and have commercial value on their own or when added to another product, mixture or manufactured item.

U066

Wastes

Substances that are removed from the final product, mixture or manufactured item during the manufacturing process and have no commercial value.

U999

Other (specify)

Substances with a substance function not otherwise described in this table. A written description must be provided when using this code.

13. For the purpose of sections 9 and 10, the following tables set out the consumer and commercial codes and their corresponding descriptions:

Table 1: Furnishings, cleaning, treatment or care

Consumer and commercial codes

Title

Description

C101

Floor coverings

Substances contained in floor coverings. This code does not include wood and pressed wood flooring products included in the Building or construction materials — Wood and engineered wood code.

C102

Foam seating and bedding

Substances contained in foam mattresses, pillows, cushions, and any seating, furniture and furnishings containing foam.

C103

Furniture and furnishings not otherwise covered in this table

Substances contained in furniture and furnishings made from metal, wood, leather, plastic or other materials. This code does not include foam seating and bedding products.

C104

Fabric, textile and leather articles not otherwise covered in this table

Substances contained in fabric, textile and leather products to impart colour and other desirable properties such as water, soil and stain repellence, wrinkle resistance, or flame resistance.

C105

Cleaning and furnishing care

Substances contained in products, mixtures or manufactured items that are used to remove dirt, grease, stains, and foreign matter from furniture and furnishings, or to cleanse, sanitize, bleach, scour, polish, protect, or improve the appearance of surfaces.

C106

Laundry and dishwashing

Substances contained in laundry and dishwashing products, mixtures or manufactured items.

C107

Water treatment

Substances contained in water treatment products, mixtures or manufactured items that are designed to disinfect, reduce contaminants or other undesirable constituents, and condition or improve aesthetics of water. Excludes any substance contained in pest control products as defined under the Pest Control Products Act.

C108

Personal care and cosmetics

Substances contained in personal care products, mixtures or manufactured items that are used for cleansing, grooming, improving or altering skin, hair, or teeth.

C109

Air care

Substances contained in products, mixtures or manufactured items that are used to odorize or deodorize indoor air in homes, offices, motor vehicles, and other enclosed spaces.

C110

Apparel and footwear care

Substances contained in apparel and footwear care products, mixtures or manufactured items that are applied post-market.

C160

Pet care

Substances contained in pet care products, mixtures or manufactured items that are used for cleansing, grooming, improving or altering skin, hair or teeth and intended for animal use.

Table 2: Construction, paint, electrical or metal

Consumer and commercial codes

Title

Description

C201

Adhesives and sealants

Substances contained in adhesive or sealant products or mixtures used to fasten other materials together or prevent the passage of liquid or gas.

C202.01

Paints and coatings

Substances contained in paints and coatings.

C202.02

Paint thinners or removers

Substances contained in paint thinners or removers.

C203

Building or construction materials — Wood and engineered wood

Substances contained in building and construction materials made of wood and pressed or engineered wood products, mixtures or manufactured items.

C204

Building or construction materials not otherwise covered in this table

Substances contained in building and construction materials not otherwise covered in this table.

C205

Electrical and electronics

Substances contained in electrical and electronic products, mixtures or manufactured items.

C206

Metal materials not otherwise covered in this table

Substances contained in metal products, mixtures or manufactured items not otherwise covered in this table.

C207

Batteries

Substances contained in non-rechargeable and rechargeable batteries including dry and wet cell units that store energy.

Table 3: Packaging, paper, plastic or hobby

Consumer and commercial codes

Title

Description

C301

Food packaging

Substances contained in single or multi-layered packaging consisting of paper, plastic, metal, foil or other materials which have or may have direct contact with food.

C302

Paper products, mixtures or manufactured items

Substances contained in paper products, mixtures or manufactured items.

C303.01

Plastic materials not otherwise covered in this table

Substances contained in plastic products, mixtures or manufactured items not otherwise covered in this table.

C303.02

Rubber materials not otherwise covered in this table

Substances contained in rubber products, mixtures or manufactured items not otherwise covered in this table.

C304

Toys, playground and sporting equipment

Substances contained in toys, playground and sporting equipment made of wood, metal, plastic or fabric.

C305

Arts, crafts and hobby materials

Substances contained in arts, crafts, and hobby materials.

C306

Ink, toner and colourants

Substances contained in ink, toners and colourants used for writing, printing, and creating an image on paper; and substances contained in other substrates, or applied to substrates to change their colour or hide images.

C307

Photographic supplies, film and photo-chemicals

Substances contained in photographic supplies, film, photo-processing substances, and photographic paper.

Table 4: Automotive, fuel, agriculture or outdoor use

Consumerand commercial codes

Title

Description

C401

Automotive care

Substances contained in products, mixtures or manufactured items used in automotive cleaning and care of exterior and interior vehicle surfaces. This code does not include antifreeze, de-icing products, or lubricants.

C402

Lubricants and greases

Substances contained in products, mixtures or manufactured items to reduce friction, heat generation and wear between solid surfaces.

C403

Anti-freeze and de-icing

Substances added to fluids to reduce the freezing point of the mixture, or substances applied to surfaces to melt or prevent build-up of ice.

C404

Fuels and related products, mixtures or manufactured items

Substances burned to produce heat, light or power, or added to inhibit corrosion, provide lubrication, increase efficiency of use, or decrease production of undesirable by-products.

C405

Explosive materials

Substances capable of producing a sudden expansion, usually accompanied by the production of heat and large changes in pressure upon ignition.

C406

Agricultural products, mixtures or manufactured items (non-pesticidal)

Substances used to increase the productivity and quality of plants, animals or forestry crops, produced on a commercial scale. Includes animal feed (any substance or mixture of substances for consumption by livestock, providing the nutritional requirements of livestock, or for the purpose of preventing or correcting nutritional disorders of livestock, as defined in the Feeds Act and Regulations).

C407

Lawn and garden care

Substances contained in lawn, garden, outdoor or potted plant, and tree care products, mixtures or manufactured items. Excludes any substance contained in pest control products as defined under the Pest Control Products Act.

C461

Pest control

Substances contained in any product, mixture or manufactured item for directly or indirectly controlling, preventing, destroying, mitigating, attracting, or repelling any pest.

C462

Automotive, aircraft and transportation

Substances contained in automobiles, aircraft and other types of transportation, or used in their manufacture.

C463

Oil and natural gas extraction

Substances that are, or are contained in, any mixtures, products or manufactured items, used for oil and natural gas drilling, extraction and processing.

Table 5: Items for food, health or tobacco

Consumer and commercial codes

Title

Description

C562

Food and beverage

Substances contained in food and beverage products, mixtures or manufactured items.

C563

Drugs

Substances contained in prescription and non-prescription drugs intended for humans or animals.

C564

Natural health

Substances contained in natural health products, mixtures or manufactured items intended for humans or animals.

C565

Medical devices

Substances contained in products, mixtures or manufactured items used for either the diagnosis, treatment, mitigation or prevention of a disease, disorder, or an abnormal physical state; or those used in restoring, correcting or modifying organic functions in humans or animals.

C566

Tobacco products, mixtures or manufactured items

Substances contained in products, mixtures or manufactured items composed in whole or in part of tobacco, including tobacco leaves and any extract of tobacco leaves.

Table 6: Products, mixtures or manufactured items not described by other codes

Consumerand commercial codes

Title

Description

C999

Other

Substances contained in products, mixtures or manufactured items that are not described within any other consumer and commercial code.

EXPLANATORY NOTE

(This note is not part of the notice.)

This notice requests data on certain substances for the purposes of informing risk management actions to control risks posed by substances that are “toxic” or that are proposed to be “toxic” as defined under section 64 of the Canadian Environmental Protection Act, 1999 (hereinafter referred to as the “Act”). The data collected in this notice will be used to determine whether to control, and the manner in which to control, a toxic substance. Risk management actions include the application of regulations or other instruments respecting preventive or control actions in relation to toxic substances in order to protect human health and the environment.

The data being gathered is needed to identify the current commercial status, such as commercial quantities and use patterns, of these substances, including mixtures, products, and manufactured items containing these substances. Information from manufacturers, importers and users of these substances is needed to inform risk management activities. This data will inform risk management activities such as the performance measurement of existing risk management instruments and their amendments, identifying whether there are new sources of exposure that may require risk management, and informing the development and implementation of new risk management instruments.

Pursuant to subsection 71(3) of the Act, every person to whom this notice applies shall comply with this notice within the time specified in the notice. The time specified in this notice is June 28, 2017, 3:00 p.m. Eastern Daylight Saving Time. Any person making a written request pursuant to subsection 71(4) of the Act should include the name of the party requiring an extension, the Chemical Abstracts Service Registry Number (CAS RN) of the substances for which the person will provide information, as well as the reason of the extension request.

Any person making a written request pursuant to section 313 of the Act should identify each part of the information that is to be considered confidential, and provide a rationale for the sensitivity of the information.

Persons not subject to this notice, who have a current or future interest in a substance set out in Schedule 1 to this notice, may identify themselves as a “stakeholder” for the substance by completing the voluntary Declaration of Stakeholder Interest using the online reporting system via Environment and Climate Change Canada’s Single Window at https://ec.ss.ec.gc.ca/. The person may be contacted for further information regarding their interest in these substances.

Persons who do not meet the requirements to respond and who have no commercial interest in the substances covered by this notice may submit a Declaration of Non-Engagement for the notice using the online reporting system via Environment and Climate Change Canada’s Single Window at https://ec.ss.ec.gc.ca/.

The Minister of the Environment and the Minister of Health are also inviting interested stakeholders to submit additional information that is deemed beneficial. Organizations that may be interested in submitting additional information in response to this invitation include those that manufacture, import, export or use this substance alone, in a mixture, in a product or in a manufactured item.

Compliance with the Act is mandatory and specific offences are established by subsections 272(1), 272.1(1), 272.2(1), 272.4(1) and 272.5(1) of the Act. Amendments to the fine scheme of the Act came into force on June 22, 2012. Subsections 272(2), (3) and (4) and 272.1(2), (3) and (4) of the Act set the penalties for persons who commit an offence under the Act. Offences include the offence of failing to comply with an obligation arising from the Act and the offence of providing false or misleading information. Penalties for the most serious offences include minimum fines and the amount of the fine can range from a minimum of $5,000 for an individual convicted following summary proceedings to a maximum of $6,000,000 for a large corporation convicted on indictment. The fine range doubles for second or subsequent offences and individuals may also be liable to a term of imprisonment of up to three years. Offences other than those in the category of “serious offences” are punishable by fines capped at a maximum that ranges from $25,000 for an individual convicted following summary proceedings to $500,000 for a large corporation convicted on indictment. The maximum fines are doubled for second or subsequent offences.

The current text of the Act, including the most recent amendments, is available on the Department of Justice website at http://laws-lois.justice.gc.ca/eng/acts/C-15.31/.

The Act is enforced in accordance with the Compliance and Enforcement Policy for the Canadian Environmental Protection Act, 1999 available at www.ec.gc.ca/lcpe-cepa/default.asp?lang=En&n=5082BFBE-1. Suspected violations under the Act can be reported to the Enforcement Branch by email at ec.dale-enviroinfo-eed-enviroinfo.ec@canada.ca.

Responses to the notice must be provided no later than June 28, 2017, 3:00 p.m. Eastern Daylight Saving Time using the online reporting system available through Environment and Climate Change Canada’s Single Window at https://ec.ss.ec.gc.ca/.

An electronic copy of this notice is available at the following website: www.chemicalsubstanceschimiques.gc.ca.

[13-1-o]

DEPARTMENT OF THE ENVIRONMENT

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

Notice to provide information for the risk management of certain substances — Fall 2017

Pursuant to paragraph 71(1)(b) of the Canadian Environmental Protection Act, 1999 (hereinafter referred to as the “Act”), notice is hereby given that the Minister of the Environment requires, for the purpose of assessing whether to control, or the manner in which to control, the substances described in Schedule 1 to this notice, any person described in Schedule 2 to this notice who possesses or who may reasonably be expected to have access to the information required in Schedule 3 to this notice, to provide that information no later than September 27, 2017, 3 p.m., Eastern Daylight Saving Time.

Responses to this notice shall be submitted to the Minister of the Environment, using the online reporting system available through Environment and Climate Change Canada’s Single Window at https://ec.ss.ec.gc.ca/. Inquiries concerning the notice may be directed to the Substances Management Information Line at 1-800-567-1999 (toll free in Canada) 819-938-3232 (outside of Canada) [telephone], or eccc.substances.eccc@canada.ca (email).

Pursuant to section 313 of the Act, any person who provides information in response to this notice may submit, with the information, a written request that the information or part of it be treated as confidential.

Pursuant to subsection 71(4) of the Act, the Minister of the Environment may, on request in writing from any person to whom this notice applies, extend the time or times within which the person shall comply with this notice. The person seeking such extension shall submit, prior to the deadline, a request to the Minister of the Environment, to the attention of the Substances Management Coordinator, Chemicals Management Plan, Gatineau, Quebec K1A 0H3, or eccc.substances.eccc@canada.ca (email).

Marc D’Iorio
Director General
Industrial Sectors, Chemicals and Waste Directorate

Jacqueline Gonçalves
Director General
Science and Risk Assessment Directorate

On behalf of the Minister of the Environment

SCHEDULE 1

Substances

Part 1

CAS RN (see footnote 14)

Name of the substance

Common name

584-84-9

Benzene, 2,4,-diisocyanato-1-methyl-

2,4-Toluene Diisocyanate

91-08-7

Benzene, 1,3,-diisocyanato-2-methyl-

2,6-Toluene Diisocyanate

26471-62-5

Benzene, 1,3,-diisocyanatomethyl-

Mixture of 2,6-Toluene Diisocyanate and 2,4-Toluene Diisocyanate

Part 2

CAS RN

Name of the substance

Common name

17540-75-9

Phenol, 2,6-bis(1,1-dimethylethyl)-4-(1-methylpropyl)-

DTBSBP

Part 3

CAS RN

Name of the substance

Common name

732-26-3

2,4,6-tri-tert-butylphenol

2,4,6-TTBP

Part 4

CAS RN

Name of the substance

Common name

117-81-7

1,2-Benzenedicarboxylic acid, bis(2-ethylhexyl) ester

Diethyl hexyl phthalate, DEHP

Part 5

CAS RN

Name of the substance

Common name

127-18-4

Tetrachloroethylene

Perchloroethylene (PERC)

79-01-6

Trichloroethylene

TCE

104-40-5

Phenol, 4-nonyl-

 

11066-49-2

Isononylphenol

 

127087-87-0

Poly(oxy-1,2-ethanediyl), α-(4-nonylphenyl)-ω-hydroxy-, branched

 

1323-65-5

Phenol, dinonyl-

 

137-99-5

Phenol, 2,4-dinonyl

 

25154-52-3

Phenol, nonyl-

 

26027-38-3

Poly(oxy-1,2-ethanediyl), α-(4-nonylphenyl)-ω-hydroxy-

 

26523-78-4

Phenol, nonyl-, 1,1′,1′′-phosphite

 

27176-93-8

Ethanol, 2-[2-(nonylphenoxy)ethoxy]-

 

27177-05-5

3,6,9,12,15,18,21Heptaoxatricosan-1-ol, 23-(nonylphenoxy)-

 

27177-08-8

3,6,9,12,15,18,21,24,
27-Nonaoxanonacosan-
1-ol, 29-(nonylphenoxy)-

 

27986-36-3

Ethanol, 2-(nonylphenoxy)-

 

28987-17-9

Phenol, nonyl-, barium salt

 

3050-88-2

Phenol, 4-nonyl-, phosphite (3:1)

 

31691-97-1

Poly(oxy-1,2-ethanediyl), α-sulfo-ω-(4-nonylphenoxy)-, ammonium salt

 

37205-87-1

Poly(oxy-1,2-ethanediyl), α-(isononylphenyl)-ω-hydroxy-

 

37251-69-7

Oxirane, 2-methyl-, polymer with oxirane, mono(nonylphenyl) ether

 

37340-60-6

Poly(oxy-1,2-ethanediyl), α-(nonylphenyl)-ω-hydroxy-, phosphate, sodium salt

 

51811-79-1

Poly(oxy-1,2-ethanediyl), α-(nonylphenyl)-ω-hydroxy-, phosphate

 

51938-25-1

Poly(oxy-1,2-ethanediyl), α-(2-nonylphenyl)-ω-hydroxy-

 

68081-86-7

Phenol, nonyl derivs.

 

68412-53-3

Poly(oxy-1,2-ethanediyl), α-(nonylphenyl)-ω-hydroxy-, branched, phosphates

 

68412-54-4

Poly(oxy-1,2-ethanediyl), α-(nonylphenyl)-ω-hydroxy-, branched

 

68515-89-9

Barium, carbonate nonylphenol complexes

 

68515-91-3

Phenol, nonyl derivs., barium salts

 

68515-93-5

Phenol, nonyl derivs., sulfides

 

7311-27-5

Ethanol, 2-[2-[2-[2-
(4-nonylphenoxy)ethoxy]ethoxy]ethoxy]-

 

84852-15-3

Phenol, 4-nonyl-, branched

 

84962-08-3

Phenol, dinonyl-, branched

 

87247-00-5

Phenol, 4-tripropylene-

 

9014-90-8

Poly(oxy-1,2-ethanediyl), α-sulfo-ω-(nonylphenoxy)-, sodium salt

 

9014-93-1

Poly(oxy-1,2-ethanediyl), α-(dinonylphenyl)-ω-hydroxy-

 

9016-45-9

Poly(oxy-1,2-ethanediyl), α-(nonylphenyl)-ω-hydroxy-

 

9051-57-4

Poly(oxy-1,2-ethanediyl), α-sulfo-ω-(nonylphenoxy)-, ammonium salt

 

26569-08-4

Phosphonic acid, bis(nonylphenyl) ester

 

20227-53-6

Phosphorous acid, 2-(1,1-dimethylethyl)-4-[1-[3-(1,1-dimethylethyl)-4-hydroxyphenyl]-1-methylethyl]phenyl bis(4-nonylphenyl) ester

 

1333-21-7

Phenol, dinonyl-, phosphite (3:1)

 

54771-30-1

Phosphorous acid, dinonylphenyl bis(nonylphenyl) ester

 

59379-70-3

Benzenesulfonic acid, hydroxydinonyl-, monoammonium salt

 

66197-78-2

3,6,9,12,15,18,21,24-
Octaoxahexacosan-1-ol,
26-(nonylphenoxy)-, dihydrogen phosphate

 

65045-87-6

Zinc, bis[O,O-bis[2-(4-nonylphenoxy)ethyl] phosphorodithioato-S,S′]-, (T-4)-

 

160799-28-0

Oxirane, methyl-, polymer with oxirane, 1-ethoxyethyl 4-tripropylenephenyl ether

 

SCHEDULE 2

Persons required to provide information

1. This notice applies to any person who, during the 2015 or 2016 calendar year, manufactured a total quantity greater than 100 kg of a substance described in Schedule 1 to this notice.

2. This notice applies to any person who, during the 2015 or 2016 calendar year, imported a total quantity greater than 100 kg of a substance listed in Part 1 of Schedule 1 to this notice, whether alone, in a mixture or in a product at a concentration equal to or above 0.1% by weight (w/w%).

3. This notice applies to any person who, during the 2015 or 2016 calendar year, imported a total quantity greater than 100 kg of the substance listed in Part 2 of Schedule 1 to this notice, whether alone or in a brake fluid in which the concentration of the substance is equal to or above 0.01% by weight (w/w%).

4. This notice applies to any person who, during the 2015 or 2016 calendar year, imported a total quantity greater than 100 kg of the substance listed in Part 3 of Schedule 1 to this notice, whether alone, in a fuel or in a lubricant in which the concentration of the substance is equal to or above 0.01% by weight (w/w%).

5. This notice applies to any person who, during the 2015 or 2016 calendar year, imported a total quantity greater than 100 kg of the substance listed in Part 4 of Schedule 1 to this notice, at a concentration equal to or above 0.1% by weight (w/w%), whether

  • (a) alone, in a mixture, or in a product; or
  • (b) in a manufactured item that is
    • (i) a vehicle, aircraft or watercraft, or a part contained therein,
    • (ii) a construction material,
    • (iii) a carpet, vinyl or laminate flooring, or foam underlay for flooring,
    • (iv) a medical device or equipment,
    • (v) a cable, a wire, an appliance, or an electrical device or equipment,
    • (vi) a rubber conveyor belt,
    • (vii) a plastic pallet, other than a plastic pallet used to import other goods,
    • (viii) clothing, footwear, bedding, furniture or furnishing if the substance is contained in a foam, leather, textile fibre, yarn or fabric, or
    • (ix) food packaging intended for saleable food or beverage.

6. This notice applies to any person who, during the 2015 or 2016 calendar year, imported a total quantity greater than 100 kg of a substance listed in Part 5 of Schedule 1 to this notice, at a concentration equal to or above 0.1% by weight (w/w%), whether

  • (a) alone, in a mixture, or in a product; or
  • (b) in a manufactured item that is intended to release the substance during conditions of use.

7. This notice applies to any person who, during the 2015 or 2016 calendar year, used a total quantity greater than 100 kg of a substance listed in Part 1 or Part 4 of Schedule 1 to this notice, whether the substance was used alone, in a mixture or in a product at a concentration equal to or above 0.1% by weight (w/w%) in the manufacture of a mixture, a product, or a manufactured item.

8. This notice applies to any person who, during the 2015 or 2016 calendar year, used a total quantity greater than 100 kg of the substance listed in Part 2 of Schedule 1 to this notice

  • (a) to manufacture a brake fluid in which the concentration of the substance is equal to or above 0.01% by weight (w/w%); or
  • (b) in a brake fluid in which the concentration of the substance is equal to or above 0.01% by weight (w/w%), for repackaging purposes.

9. This notice applies to any person who, during the 2015 or 2016 calendar year, used a total quantity greater than 100 kg of the substance listed in Part 3 of Schedule 1 to this notice

  • (a) to manufacture or blend a fuel or lubricant in which the concentration of the substance is equal to or above 0.01% by weight (w/w%); or
  • (b) in a fuel or lubricant in which the concentration of the substance is equal to or above 0.01% by weight (w/w%) for repackaging purposes.

10. This notice applies to any person who, during the 2015 or 2016 calendar year, used a total quantity greater than 1 000 kg of a substance described in Part 5 of Schedule 1 to this notice, at a concentration equal to or above 0.1% by weight (w/w%), whether the substance was used alone, in a mixture, or in a product.

11. For each activity with a substance, either manufacture, import or use, any person for whom the criteria set out in this Schedule have been met for both the 2015 and 2016 calendar years shall provide information prescribed in sections 6 to 11 of Schedule 3 to this notice for the 2016 calendar year only. If the criteria set out in Schedule 2 have been met only for the 2015 calendar year, any person who manufactured, imported or used a substance shall provide information prescribed in sections 6 to 11 of Schedule 3 to this notice for the 2015 calendar year only.

12. This notice does not apply to a substance described in Schedule 1, whether alone, in a mixture, in a product or in a manufactured item that

  • (a) is in transit through Canada;
  • (b) is, or is contained in, a hazardous waste or hazardous recyclable material within the meaning of the Export and Import of Hazardous Waste and Hazardous Recyclable Material Regulations and was imported pursuant to a permit issued under these Regulations;
  • (c) is, or is contained in, a pest control product registered under the Pest Control Products Act;
  • (d) is, or is contained in, a fertilizer or supplement registered under the Fertilizers Act;
  • (e) is, or is contained in, a feed registered under the Feeds Act; or
  • (f) is mixed with, or attached to, a seed registered under the Seeds Act.

13. Any person to whom this notice applies who

  • (a) manufactured, or imported alone, in a mixture or in a product, a substance described in Parts 1 to 4 of Schedule 1, shall provide the information requested in sections 4, 5, 6, 7, 8, 9 and 11 of Schedule 3;
  • (b) manufactured, or imported alone, in a mixture or in a product, a substance described in Part 5 of Schedule 1, shall provide the information requested in sections 4, 5, 6, 7, 8 and 9 of Schedule 3;
  • (c) imported the substance described in Part 4 of Schedule 1 in a manufactured item shall provide the information requested in sections 4, 5, 7, 8, 10 and 11 of Schedule 3;
  • (d) imported a substance described in Part 5 of Schedule 1 in a manufactured item shall provide the information requested in sections 4, 5, 7, 8 and 10 of Schedule 3; or
  • (e) used a substance described in Schedule 1 shall provide the information requested in sections 4, 5, 6, 7, 8 and 9 of Schedule 3.

SCHEDULE 3

Information required

1. The definitions in this section apply in this notice.

“manufacture” includes the incidental production of a substance.

“manufactured item” means an item that is formed into a specific physical shape or design during manufacture and has, for its final use, a function or functions dependent in whole or in part on its shape or design.

“mixture” means a combination of substances that does not produce a substance that is different from the substances that were combined, including prepared formulations and reaction mixtures that are fully characterized in terms of their constituent substances, hydrates, and homogeneous and heterogeneous alloys.

“product” excludes “mixture” and “manufactured item.”

2. If the person subject to the notice is a company that owns more than one facility, a single response to the notice shall be submitted. The single response shall amalgamate the information from all facilities owned by the company for each applicable question in the notice.

3. Where information required under Schedule 3 to this notice has already been sent to the Government of Canada, it may be relied on as a response to any question in Schedule 3 to this notice if

  • (a) the information previously submitted is applicable to the calendar year for which the person is reporting;
  • (b) the information meets the requirements of the specific question(s); and
  • (c) the person provides the following information:
    • (i) the CAS RN of the substance to which the submitted information relates,
    • (ii) the date on which the information was submitted,
    • (iii) the name of the person who submitted the information, and
    • (iv) the program and/or individuals to which the information was submitted.

4. Any person to whom this notice applies shall provide the following information: name of the person (e.g. company name), Canadian head office address, Federal Business Number (see footnote 15) and contact name and information.

5. For each substance described in Schedule 1 that a person manufactured, imported or used alone, in a mixture, in a product or in a manufactured item during either the 2015 or 2016 calendar year, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance; and
  • (b) whether the person manufactured, imported or used the substance alone, in a mixture, in a product or in a manufactured item according to the criteria set out in Schedule 2, during each of the 2015 and 2016 calendar years, by indicating “yes” or “no.”

6. For each substance described in Schedule 1 that a person manufactured, imported or used alone, in a mixture, or in a product during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance; and
  • (b) the total quantity of the substance manufactured, imported or used, reported in kilograms (rounded to two significant digits).

7. For each substance described in Schedule 1 that a person manufactured, imported or used alone, in a mixture, in a product or in a manufactured item during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance; and
  • (b) each applicable six-digit North American Industry Classification System (NAICS) (see footnote 16) code with respect to their involvement with the substance, the mixture, the product or the manufactured item containing the substance.

8. (1) For each substance described in Schedule 1 that a person manufactured, imported or used alone, in a mixture, in a product or in a manufactured item during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance; and
  • (b) each substance function code set out in section 12 of this Schedule that applies to the substance.

8. (2) Where code U999 is applicable for paragraph (1)(b), a written description of the substance function must be provided.

9. For each substance described in Schedule 1 that a person manufactured, imported or used alone, in a mixture, or in a product during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance;
  • (b) each consumer and commercial code set out in section 13 of this Schedule that describes the known or anticipated final goods containing the substance; and
  • (c) for each consumer and commercial code provided, the description and the common or generic name of the known or anticipated final goods containing the substance.

10. For each substance described in Part 4 or Part 5 of Schedule 1 that a person imported in a manufactured item during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the information in paragraphs (a), (b), (c), (d), (e), and (f) or paragraphs (a), (b), (c), and (d):

  • (a) the CAS RN of the substance;
  • (b) each consumer and commercial code set out in section 13 of this Schedule that describes the known or anticipated final goods containing the substance;
  • (c) for each consumer and commercial code provided, the description and the common or generic name of the known or anticipated final goods containing the substance;
  • (d) for each consumer and commercial code provided, the total number of imported manufactured items containing the substance (rounded to two significant digits);
  • (e) for each consumer and commercial code provided, the concentration, or range of concentrations, of the substance by weight (w/w%) in the manufactured item; and
  • (f) for each consumer and commercial code provided, the mass, or range of masses, of the manufactured item, in kilograms (rounded to two significant digits).

11. For each substance described in Parts 1 to 4 of Schedule 1 that a person manufactured or imported alone, in a mixture, in a product or in a manufactured item during the calendar year for which the person is responding to this notice, for which the criteria set out in Schedule 2 have been met, the person shall provide the following information:

  • (a) the CAS RN of the substance;
  • (b) the name, city and province of 10 persons in Canada to whom the largest quantity greater than 100 kg was sold; and
  • (c) for substances manufactured or imported alone, in a mixture, or in a product, the total quantity of the substance sold to each person described in paragraph (b), reported in kilograms (rounded to two significant digits).

12. For the purpose of section 8, the following are the substance function codes and their corresponding descriptions:

Substance function codes

Title

Description

U001

Abrasives

Substances used to wear down or polish surfaces by rubbing against the surface.

U002

Adhesives and sealant substances

Substances used to promote bonding between other substances, promote adhesion of surfaces, or prevent seepage of moisture or air.

U003

Adsorbents and absorbents

Substances used to retain other substances by accumulation on their surface or by assimilation.

U004

Agricultural substances (non-pesticidal)

Substances used to increase the productivity and quality of farm crops.

U005

Anti-adhesive agents

Substances used to prevent bonding between other substances by discouraging surface attachment.

U006

Bleaching agents

Substances used to lighten or whiten a substrate through chemical reaction, usually an oxidative process which degrades the colour system.

U007

Corrosion inhibitors and anti-scaling agents

Substances used to prevent or retard corrosion or the formation of scale.

U008

Dyes

Substances used to impart colour to other materials or mixtures by penetrating into the surface of the substrate.

U009

Fillers

Substances used to provide bulk, increase strength, increase hardness, or improve resistance to impact.

U010

Finishing agents

Substances used to impart such functions as softening, static-proofing, wrinkle resistance, and water repellence.

U011

Flame retardants

Substances used on the surface of or incorporated into combustible materials to reduce or eliminate their tendency to ignite when exposed to heat or a flame.

U012

Fuels and fuel additives

Substances used to create mechanical or thermal energy through chemical reactions, or which are added to a fuel for the purpose of controlling the rate of reaction or limiting the production of undesirable combustion products, or which provide other benefits such as corrosion inhibition, lubrication, or detergency.

U013

Functional fluids (closed systems)

Liquid or gaseous substances used for one or more operational properties in a closed system. This code does not include fluids used as lubricants.

U014

Functional fluids (open systems)

Liquid or gaseous substances used for one or more operational properties in an open system.

U015

Intermediates

Substances consumed in a chemical reaction to produce other substances for commercial advantage.

U016

Ion exchange agents

Substances that are used to selectively remove targeted ions from a solution. This code also includes aluminosilicate zeolites.

U017

Lubricants and lubricant additives

Substances used to reduce friction, heat, or wear between moving parts or adjacent solid surfaces, or that enhance the lubricity of other substances.

U018

Odour agents

Substances used to control odours, remove odours, mask odours, or impart odours.

U019

Oxidizing and reducing agents

Substances used to alter the valence state of another substance by donating or accepting electrons or by the addition or removal of hydrogen to a substance.

U020

Photosensitive substances

Substances used for their ability to alter their physical or chemical structure through absorption of light, resulting in the emission of light, dissociation, discoloration, or other chemical reaction.

U021

Pigments

Substances used to impart colour to other materials or mixtures by attaching themselves to the surface of the substrate through binding or adhesion.

U022

Plasticizers

Substances used in plastics, cement, concrete, wallboard, clay bodies, or other materials to increase their plasticity or fluidity.

U023

Plating agents and surface treating agents

Substances applied to metal, plastic, or other surfaces to alter physical or chemical properties of the surface.

U024

Process regulators

Substances used to change the rate of a chemical reaction, start or stop the reaction, or otherwise influence the course of the reaction.

U025

Processing aids, specific to petroleum production

Substances added to water, oil, or synthetic drilling muds or other petroleum production fluids to control foaming, corrosion, alkalinity and pH, microbiological growth or hydrate formation, or to improve the operation of processing equipment during the production of oil, gas, and other products or mixtures from beneath the earth’s surface.



U026

Processing aids, not otherwise covered in this table

Substances used in applications other than the production of oil, gas, or geothermal energy to control foaming, corrosion or alkalinity and pH, or to improve the operation of processing equipment.


U027

Propellants and blowing agents

Substances used to dissolve or suspend other substances and either to expel those substances from a container in the form of an aerosol or to impart a cellular structure to plastics, rubber, or thermo set resins.

U028

Solids separation agents

Substances used to promote the separation of suspended solids from a liquid.

U029

Solvents (for cleaning or degreasing)

Substances used to dissolve oils, greases and similar materials from textiles, glassware, metal surfaces, and other articles.

U030

Solvents (which become part of formulation or mixture)

Substances used to dissolve another substance to form a uniformly dispersed solution at the molecular level.

U031

Surface active agents

Substances used to modify surface tension when dissolved in water or water solutions, or reduce interfacial tension between two liquids or between a liquid and a solid or between liquid and air.

U032

Viscosity adjustors

Substances used to alter the viscosity of another substance.

U033

Laboratory substances

Substances used in a laboratory for chemical analysis, chemical synthesis, extracting and purifying other chemicals, dissolving other substances, and similar activities.


U034

Paint additives and coating additives not otherwise covered in this table

Substances used in a paint or coating formulation to enhance properties such as water repellence, increased gloss, improved fade resistance, ease of application or foam prevention.

U061

Pest control substances

Substances used as active ingredients or formulants in products, mixtures or manufactured items used for directly or indirectly controlling, destroying, attracting or repelling a pest or for mitigating or preventing its injurious, noxious or troublesome effects.


U062

Active ingredients in health products and drugs

Substances used as active ingredients in natural health products or prescription or
non-prescription drugs.

U063

Flavourants

Substances used as
non-medicinal ingredients or excipients in foods, natural health products, and drugs that impart a certain flavour to the food, health product or drug.

U064

Contaminants

Substances naturally present in a reactant or a substance that is produced as a result of the manufacturing process and that has no beneficial properties in the final product, mixture or manufactured item.

U065

By-products

Substances resulting from the manufacturing process that can be partially or completely removed from the intended product, mixture or manufactured item and have commercial value on their own or when added to another product, mixture or manufactured item.

U066

Wastes

Substances that are removed from the final product, mixture or manufactured item during the manufacturing process and have no commercial value.

U999

Other (specify)

Substances with a substance function not otherwise described in this table. A written description must be provided when using this code.

13. For the purpose of sections 9 and 10, the following tables set out the consumer and commercial codes and their corresponding descriptions:

Table 1: Furnishings, cleaning, treatment or care

Consumer and commercial codes

Title

Description

C101

Floor coverings

Substances contained in floor coverings. This code does not include wood and pressed wood flooring products included in the Building or construction materials – Wood and engineered wood code.

C102

Foam seating and bedding

Substances contained in foam mattresses, pillows, cushions, and any seating, furniture and furnishings containing foam.


C103

Furniture and furnishings not otherwise covered in this table

Substances contained in furniture and furnishings made from metal, wood, leather, plastic or other materials. This code does not include foam seating and bedding products.

C104

Fabric, textile and leather articles not otherwise covered in this table

Substances contained in fabric, textile and leather products to impart colour and other desirable properties such as water, soil and stain repellence, wrinkle resistance, or flame resistance.


C105

Cleaning and furnishing care

Substances contained in products, mixtures or manufactured items that are used to remove dirt, grease, stains, and foreign matter from furniture and furnishings, or to cleanse, sanitize, bleach, scour, polish, protect, or improve the appearance of surfaces.


C106

Laundry and dishwashing

Substances contained in laundry and dishwashing products, mixtures or manufactured items.

C107

Water treatment

Substances contained in water treatment products, mixtures or manufactured items that are designed to disinfect, reduce contaminants or other undesirable constituents, and condition or improve aesthetics of water. Excludes any substance contained in pest control products as defined under the Pest Control Products Act.


C108

Personal care and cosmetics

Substances contained in personal care products, mixtures or manufactured items that are used for cleansing, grooming, improving or altering skin, hair, or teeth.

C109

Air care

Substances contained in products, mixtures or manufactured items that are used to odorize or deodorize indoor air in homes, offices, motor vehicles, and other enclosed spaces.


C110

Apparel and footwear care

Substances contained in apparel and footwear care products, mixtures or manufactured items that are applied
post-market.

C160

Pet care

Substances contained in pet care products, mixtures or manufactured items that are used for cleansing, grooming, improving or altering skin, hair or teeth and intended for animal use.

Table 2: Construction, paint, electrical or metal

Consumer and commercial codes

Title

Description

C201

Adhesives and sealants

Substances contained in adhesive or sealant products or mixtures used to fasten other materials together or prevent the passage of liquid or gas.

C202.01

Paints and coatings

Substances contained in paints and coatings.

C202.02

Paint thinners or removers

Substances contained in paint thinners or removers.

C203

Building or construction materials — Wood and engineered wood

Substances contained in building and construction materials made of wood and pressed or engineered wood products, mixtures or manufactured items.

C204

Building or construction materials not otherwise covered in this table

Substances contained in building and construction materials not otherwise covered in this table.

C205

Electrical and electronics

Substances contained in electrical and electronic products, mixtures or manufactured items.

C206

Metal materials not otherwise covered in this table

Substances contained in metal products, mixtures or manufactured items not otherwise covered in this table.

C207

Batteries

Substances contained in
non-rechargeable and rechargeable batteries including dry and wet cell units that store energy.


Table 3: Packaging, paper, plastic or hobby

Consumer and commercial codes

Title

Description

C301

Food packaging

Substances contained in
single or multi-layered packaging consisting of paper, plastic, metal, foil or other materials which have or may have direct contact with food.


C302

Paper products, mixtures or manufactured items

Substances contained in paper products, mixtures or manufactured items.

C303.01

Plastic materials not otherwise covered in this table

Substances contained in plastic products, mixtures or manufactured items not otherwise covered in this table.

C303.02

Rubber materials not otherwise covered in this table

Substances contained in rubber products, mixtures or manufactured items not otherwise covered in this table.

C304

Toys, playground and sporting equipment

Substances contained in toys, playground and sporting equipment made of wood, metal, plastic or fabric.

C305

Arts, crafts and hobby materials

Substances contained in arts, crafts, and hobby materials.

C306

Ink, toner and colourants

Substances contained in ink, toners and colourants used for writing, printing, creating an image on paper; and substances contained in other substrates, or applied to substrates to change their colour or hide images.


C307

Photographic supplies, film and photo-chemicals

Substances contained in photographic supplies, film, photo-processing substances, and photographic paper.

Table 4: Automotive, fuel, agriculture or outdoor use

Consumer and commercial codes

Title

Description

C401

Automotive care

Substances contained in products, mixtures or manufactured items used in automotive cleaning and care of exterior and interior vehicle surfaces. This code does not include antifreeze, de-icing products, or lubricants.


C402

Lubricants and greases

Substances contained in products, mixtures or manufactured items to reduce friction, heat generation and wear between solid surfaces.

C403

Anti-freeze and de-icing

Substances added to fluids to reduce the freezing point of the mixture, or substances applied to surfaces to melt or prevent build-up of ice.

C404

Fuels and related products, mixtures or manufactured items

Substances burned to produce heat, light or power, or added to inhibit corrosion, provide lubrication, increase efficiency of use, or decrease production of undesirable by-products.


C405

Explosive materials

Substances capable of producing a sudden expansion, usually accompanied by the production of heat and large changes in pressure upon ignition.

C406

Agricultural products, mixtures or manufactured items (non-pesticidal)

Substances used to increase the productivity and quality of plants, animals or forestry crops, produced on a commercial scale. Includes animal feed (any substance or mixture of substances for consumption by livestock, providing the nutritional requirements of livestock, or for the purpose of preventing or correcting nutritional disorders of livestock, as defined in the Feeds Act and Regulations).



C407

Lawn and garden care

Substances contained in lawn, garden, outdoor or potted plant, and tree care products, mixtures or manufactured items. Excludes any substance contained in pest control products as defined under the Pest Control Products Act.



C461

Pest control

Substances contained in any product, mixture or manufactured item for directly or indirectly controlling, preventing, destroying, mitigating, attracting, or repelling any pest.

C462

Automotive, aircraft and transportation

Substances contained in automobiles, aircraft and other types of transportation, or used in their manufacture.

C463

Oil and natural gas extraction

Substances that are, or are contained in, any mixtures, products or manufactured items, used for oil and natural gas drilling, extraction and processing.

Table 5: Items for food, health or tobacco

Consumer and commercial codes

Title

Description

C562

Food and beverage

Substances contained in food and beverage products, mixtures or manufactured items.

C563

Drugs

Substances contained in prescription and non-prescription drugs intended for humans or animals.

C564

Natural health

Substances contained in natural health products, mixtures or manufactured items intended for humans or animals.

C565

Medical devices

Substances contained in products, mixtures or manufactured items used for either the diagnosis, treatment, mitigation or prevention of a disease, disorder, or an abnormal physical state; or those used in restoring, correcting or modifying organic functions in humans or animals.

C566

Tobacco products, mixtures or manufactured items

Substances contained in products, mixtures or manufactured items composed in whole or in part of tobacco, including tobacco leaves and any extract of tobacco leaves.

Table 6: Products, mixtures or manufactured items not described by other codes

Consumer and commercial codes

Title

Description

C999

Other

Substances contained in products, mixtures or manufactured items that are not described within any other consumer and commercial code.

EXPLANATORY NOTE

(This note is not part of the notice.)

This notice requests data on certain substances for the purposes of informing risk management actions to control risks posed by substances that are “toxic” or that are proposed to be “toxic” as defined under section 64 of the Canadian Environmental Protection Act, 1999 (hereinafter referred to as the “Act”). The data collected in this notice will be used to determine whether to control, and the manner in which to control, a toxic substance. Risk management actions include the application of regulations or other instruments respecting preventive or control actions in relation to toxic substances in order to protect human health and the environment.

The data being gathered is needed to identify the current commercial status, such as commercial quantities and use patterns, of these substances, including mixtures, products, and manufactured items containing these substances. Information from manufacturers, importers and users of these substances is needed to inform risk management activities. This data will inform risk management activities such as the performance measurement of existing risk management instruments and their amendments, identifying whether there are new sources of exposure that may require risk management and informing the development and implementation of new risk management instruments.

Pursuant to subsection 71(3) of the Act, every person to whom this notice applies shall comply with this notice within the time specified in the notice. The time specified in this notice is September 27, 2017, 3:00 p.m. Eastern Daylight Saving Time. Any person making a written request pursuant to subsection 71(4) of the Act should include the name of the party requiring an extension, the Chemical Abstracts Service Registry Number (CAS RN) of the substances for which the person will provide information, as well as the reason of the extension request.

Any person making a written request pursuant to section 313 of the Act should identify each part of the information that is to be considered confidential, and provide a rationale for the sensitivity of the information.

Persons not subject to this notice, who have a current or future interest in a substance set out in Schedule 1 to this notice, may identify themselves as a “stakeholder” for the substance by completing the voluntary Declaration of Stakeholder Interest using the online reporting system via Environment and Climate Change Canada’s Single Window at https://ec.ss.ec.gc.ca/. The person may be contacted for further information regarding their interest in these substances.

Persons who do not meet the requirements to respond and who have no commercial interest in the substances covered by this notice may submit a Declaration of Non-Engagement for the notice using the online reporting system via Environment and Climate Change Canada’s Single Window at https://ec.ss.ec.gc.ca/.

The Minister of the Environment and the Minister of Health are also inviting interested stakeholders to submit additional information that is deemed beneficial. Organizations that may be interested in submitting additional information in response to this invitation include those that manufacture, import, export or use this substance alone, in a mixture, in a product or in a manufactured item.

Compliance with the Act is mandatory and specific offences are established by subsections 272(1), 272.1(1), 272.2(1), 272.4(1) and 272.5(1) of the Act. Amendments to the fine scheme of the Act came into force on June 22, 2012. Subsections 272(2), (3) and (4) and 272.1(2), (3) and (4) of the Act set the penalties for persons who commit an offence under the Act. Offences include the offence of failing to comply with an obligation arising from the Act and the offence of providing false or misleading information. Penalties for the most serious offences include minimum fines and the amount of the fine can range from a minimum of $5,000 for an individual convicted following summary proceedings to a maximum of $6,000,000 for a large corporation convicted on indictment. The fine range doubles for second or subsequent offences and individuals may also be liable to a term of imprisonment of up to three years. Offences other than those in the category of “serious offences” are punishable by fines capped at a maximum that ranges from $25,000 for an individual convicted following summary proceedings to $500,000 for a large corporation convicted on indictment. The maximum fines are doubled for second or subsequent offences.

The current text of the Act, including the most recent amendments, is available on the Department of Justice website at http://laws-lois.justice.gc.ca/eng/acts/C-15.31/.

The Act is enforced in accordance with the Compliance and Enforcement Policy for the Canadian Environmental Protection Act, 1999 available at www.ec.gc.ca/lcpe-cepa/default.asp?lang=En&n=5082BFBE-1. Suspected violations under the Act can be reported to the Enforcement Branch by email at ec.dale-enviroinfo-eed-enviroinfo.ec@canada.ca.

Responses to the notice must be provided no later than September 27, 2017, 3:00 p.m. Eastern Daylight Saving Time using the online reporting system available through Environment and Climate Change Canada’s Single Window at https://ec.ss.ec.gc.ca/.

An electronic copy of this notice is available at the following website: www.chemicalsubstanceschimiques.gc.ca.

[13-1-o]

DEPARTMENT OF THE ENVIRONMENT

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

Order 2017-87-03-02 Amending the Non-domestic Substances List

Whereas, pursuant to subsection 87(5) of the Canadian Environmental Protection Act, 1999 (see footnote a), the Minister of the Environment has added the substances referred to in the annexed Order to the Domestic Substances List (see footnote b);

Therefore, the Minister of the Environment, pursuant to subsection 87(5) of the Canadian Environmental Protection Act, 1999 (see footnote c), makes the annexed Order 2017-87-03-02 Amending the Non-domestic Substances List.

Gatineau, March 23, 2017

Catherine McKenna
Minister of the Environment

Order 2017-87-03-02 Amending the Non-domestic Substances List

Amendment

1 Part I of the Non-domestic Substances List (see footnote 17) is amended by deleting the following:

28206-15-7
53026-27-0

Coming into Force

2 This Order comes into force on the day on which Order 2017-87-03-01 Amending the Domestic Substances List comes into force.

[13-1-o]

DEPARTMENT OF TRANSPORT

AERONAUTICS ACT

Interim Order Respecting the Use of Model Aircraft

Whereas the annexed Interim Order Respecting the Use of Model Aircraft is required to deal with a significant risk, direct or indirect, to aviation safety or the safety of the public;

Whereas the provisions of the annexed Interim Order Respecting the Use of Model Aircraft may be contained in a regulation made pursuant to section 4.9 (see footnote d), paragraphs 7.6(1)(a) (see footnote e) and (b) (see footnote f) and section 7.7 (see footnote g) of Part I of the Aeronautics Act (see footnote h);

And whereas, pursuant to subsection 6.41(1.2) (see footnote i) of the Aeronautics Act (see footnote j), the Minister of Transport has consulted with the persons and organizations that the Minister considers appropriate in the circumstances before making the annexed Interim Order Respecting the Use of Model Aircraft;

Therefore, the Minister of Transport, pursuant to subsection 6.41(1) (see footnote k) of the Aeronautics Act (see footnote l), makes the annexed Interim Order Respecting the Use of Model Aircraft.

Ottawa, March 13, 2017

Marc Garneau
Minister of Transport

Interim Order Respecting the Use of Model Aircraft

Interpretation

Definitions

1 (1) The following definitions apply in this Interim Order.

model aircraft means an aircraft, the total weight of which does not exceed 35 kg (77.2 pounds), that is mechanically driven or launched into flight for recreational purposes and that is not designed to carry persons or other living creatures. (modèle réduit d’aéronef)

Regulations means the Canadian Aviation Regulations. (Règlement)

restricted airspace means airspace of fixed dimensions that is so specified in the Designated Airspace Handbook and within which the flight of an aircraft is restricted in accordance with conditions specified in that Handbook, or airspace that is restricted under section 5.1 of the Act. (espace aérien réglementé)

unmanned air vehicle means a power-driven aircraft, other than a model aircraft, that is designed to fly without a human operator on board. (véhicule aérien non habité)

visual line-of-sight or VLOS means unaided visual contact with an aircraft sufficient to be able to maintain control of the aircraft know its location, and be able to scan the airspace in which it is operating to decisively see and avoid other aircraft or objects. (visibilité directe ou VLOS)

Interpretation

(2) Unless the context requires otherwise, all other words and expressions used in this Interim Order have the same meaning as in the Regulations.

Conflict between Interim Order and Regulations

(3) In the event of a conflict between this Interim Order and the Regulations, the Interim Order prevails.

Designated Provisions

Designation

2 (1) The designated provisions set out in column 1 of the schedule are designated as provisions the contravention of which may be dealt with under and in accordance with the procedure set out in sections 7.7 to 8.2 of the Act.

Maximum Amounts

(2) The amounts set out in column II of the schedule are the maximum amounts of the penalty payable in respect of a contravention of the designated provisions set out in column I.

Notice

(3) A notice referred to in subsection 7.7(1) of the Act must be in writing and must specify

  • (a) the particulars of the alleged contravention;
  • (b) that the person on whom the notice is served or to whom it is sent has the option of paying the amount specified in the notice or filing with the Tribunal a request for a review of the alleged contravention or the amount of the penalty;
  • (c) that payment of the amount specified in the notice will be accepted by the Minister in satisfaction of the amount of the penalty for the alleged contravention and that no further proceedings under Part I of the Act will be taken against the person on whom the notice in respect of that contravention is served or to whom it is sent;
  • (d) that the person on whom the notice is served or to whom it is sent will be provided with an opportunity consistent with procedural fairness and natural justice to present evidence before the Tribunal and make representations in relation to the alleged contravention if the person files a request for a review with the Tribunal; and
  • (e) that the person on whom the notice is served or to whom it is sent will be considered to have committed the contravention set out in the notice if they fail to pay the amount specified in the notice and fail to file a request for a review with the Tribunal within the prescribed period.

Application

Recreational Purposes

3 (1) Subject to subsection (2), this Interim Order applies in respect of model aircraft having a total weight of more than 250 grams (0.55 pounds) but not more than 35 Kg (77.2 pounds).

(2) It does not apply to

  • (a) unmanned air vehicles; and
  • (b) model aircraft operated at events organized by the Model Aeronautics Association of Canada (MAAC) or at airfields located in a zone administered by MAAC or a MAAC club.

Suspended Provision Of Regulations

Prohibited Use

4 The effect of section 602.45 of the Regulations is suspended in respect of the model aircraft referred to in subsection 3(1).

Model Aircraft Operating and Flight Provisions

Prohibitions

5 (1) A person must not operate a model aircraft

  • (a) at an altitude greater than 300 feet AGL;
  • (b) at a lateral distance of less than 250 feet (75m) from buildings, structures, vehicles, vessels, animals and the public including spectators, bystanders or any person not associated with the operation of the aircraft;
  • (c) within 9 km of the centre of an aerodrome;
  • (d) within controlled airspace;
  • (e) within restricted airspace;
  • (f) over or within a forest fire area, or any area that is located within 9 km of a forest fire area;
  • (g) over or within the security perimeter of a police or first responder emergency operation site;
  • (h) over or within an open-air assembly of persons;
  • (i) at night; or
  • (j) in cloud.

(2) A person must not operate more than one model aircraft at a time.

Right of Way

6 A person operating a model aircraft must give way to manned aircraft at all times.

Visual Line-of-Sight

7 (1) A person operating a model aircraft must ensure that it is operated within VLOS at all times during the flight.

(2) No person shall operate a model aircraft when the aircraft is at a lateral distance of more than 1640 feet (500 m) from the person’s location.

Contact Information

8 The owner of a model aircraft shall not operate or permit a person to operate the aircraft unless the name, address and telephone number of the owner is clearly made visible on the aircraft.

SCHEDULE

(Subsections 2(1) and (2))

DESIGNATED PROVISIONS

Column I



Column II

Maximum Amount of Penalty ($)

Designated Provision

Individual

Corporation

Section 5

3,000

15,000

Section 6

3,000

15,000

Section 7

3,000

15,000

Section 8

3,000

15,000

[13-1-o]

DEPARTMENT OF TRANSPORT

CANADA TRANSPORTATION ACT

Levy on shipments of crude oil by rail

Pursuant to subsection 155.4(4) (see footnote 18) of the Canada Transportation Act (the Act), the amount of the levy in respect of payments into the Fund for Railway Accidents Involving Designated Goods required by subsection 155.7(1) (see footnote 19) of the Act is $1.69 per tonne during the year commencing April 1, 2017.

March 23, 2017

Marc Garneau, P.C., M.P.
Minister of Transport

[13-1-o]

INNOVATION, SCIENCE AND ECONOMIC DEVELOPMENT CANADA

DEPARTMENT OF INDUSTRY ACT

RADIOCOMMUNICATION ACT

Notice No. SMSE-010-17 — Extension to the comment period: Consultation on the Licensing Framework for Non-Geostationary Satellite Orbit (NGSO) Systems and Clarification of Application Procedures for All Satellite Licence Applications

Notice No. SMSE-009-17 was published in the Canada Gazette, Part I, on March 4, 2017, and announced the release of the above-mentioned consultation. The deadline for submission of comments was indicated as April 3, 2017, and the deadline for submission of reply comments was within 15 days following the posting of all comments. The purpose of the present notice is to advise all interested parties that based on the merits of several requests for additional time to respond, the deadline for submission of comments has been extended to April 18, 2017. The deadline for reply comments will remain the same, 15 days following the publication date of the comments received. All comments received will be posted on Innovation, Science and Economic Development Canada’s Spectrum Management and Telecommunications website at www.ic.gc.ca/spectrum.

Obtaining copies

Copies of this notice and of documents referred to herein are available electronically on the Spectrum Management and Telecommunications website at www.ic.gc.ca/spectrum.

Official versions of Canada Gazette notices can be viewed at www.gazette.gc.ca/rp-pr/p1/index-eng.html.

March 23, 2017

Martin Proulx
Director General
Engineering, Planning and Standards Branch

[13-1-o]

OFFICE OF THE SUPERINTENDENT OF FINANCIAL INSTITUTIONS

BANK ACT

Schedules I, II and III

Notice is hereby given, pursuant to subsections 14(3) and 14.1(3) of the Bank Act, that Schedules I, II and III, as amended, were as shown below as at December 31, 2016.

SCHEDULE I

(Section 14)

As at December 31, 2016

Name of Bank

Head Office

B2B Bank

Ontario

Bank of Montreal

Quebec

Bank of Nova Scotia (The)

Nova Scotia

Bridgewater Bank

Alberta

Caisse populaire acadienne ltée

New Brunswick

Canadian Imperial Bank of Commerce

Ontario

Canadian Tire Bank

Ontario

Canadian Western Bank

Alberta

Cidel Bank Canada

Ontario

Citizens Bank of Canada

British Columbia

Continental Bank of Canada

Ontario

CS Alterna Bank

Ontario

DirectCash Bank

Alberta

Equitable Bank

Ontario

Exchange Bank of Canada

Ontario

First Nations Bank of Canada

Saskatchewan

General Bank of Canada

Alberta

Hollis Canadian Bank

Ontario

HomEquity Bank

Ontario

Home Bank

Ontario

Laurentian Bank of Canada

Quebec

Manulife Bank of Canada

Ontario

National Bank of Canada

Quebec

President’s Choice Bank

Ontario

Rogers Bank

Ontario

Royal Bank of Canada

Quebec

Tangerine Bank

Ontario

Toronto-Dominion Bank (The)

Ontario

Wealth One Bank of Canada

Ontario

VersaBank

Ontario

Zag Bank

Alberta

SCHEDULE II

(Section 14)

As at December 31, 2016

Name of Bank

Head Office

Amex Bank of Canada

Ontario

Bank of America Canada

Ontario

Bank of China (Canada)

Ontario

Bank of Tokyo-Mitsubishi UFJ (Canada)

Ontario

Bank One Canada

Ontario

BofA Canada Bank

Ontario

Citco Bank Canada

Ontario

Citibank Canada

Ontario

CTBC Bank Corp. (Canada)

British Columbia

Habib Canadian Bank

Ontario

HSBC Bank Canada

British Columbia

ICICI Bank Canada

Ontario

Industrial and Commercial Bank of China (Canada)

Ontario

J.P. Morgan Bank Canada

Ontario

J.P. Morgan Canada

Ontario

KEB Hana Bank Canada

Ontario

Mega International Commercial Bank (Canada)

Ontario

Shinhan Bank Canada

Ontario

Société Générale (Canada)

Quebec

SBI Canada Bank

Ontario

Sumitomo Mitsui Banking Corporation of Canada

Ontario

UBS Bank (Canada)

Ontario

Walmart Canada Bank

Ontario

SCHEDULE III

(Section 14.1)

As at December 31, 2016

Name of Authorized Foreign Bank (FB)

Name under which FB is permitted to carry on business in Canada

Type of Foreign Bank Branch (FBB)*

Principal Office

Bank of America, National Association

Bank of America, National Association

Full-service

Ontario

Bank of China Limited

Bank of China, Toronto Branch

Full-service

Ontario

Bank of New York Mellon (The)

Bank of New York Mellon (The)

Full-service

Ontario

Bank of Tokyo-Mitsubishi UFJ, Ltd. (The)

Bank of Tokyo-Mitsubishi UFJ, Ltd., Canada Branch (The)

Full-service

Ontario

Barclays Bank PLC

Barclays Bank PLC, Canada Branch

Full-service

Ontario

BNP Paribas

BNP Paribas

Full-service

Quebec

Capital One Bank (USA), N.A.

Capital One Bank (Canada Branch)

Full-service

Ontario

China Construction Bank

China Construction Bank Toronto Branch

Full-service

Ontario

Citibank, N.A.

Citibank, N.A.

Full-service

Ontario

Comerica Bank

Comerica Bank

Full-service

Ontario

Coöperatieve Rabobank U.A.

Rabobank Canada

Full-service

Ontario

Crédit Agricole Corporate and Investment Bank

Crédit Agricole Corporate and Investment Bank (Canada Branch)

Lending

Quebec

Credit Suisse AG

Credit Suisse AG, Toronto Branch

Lending

Ontario

Deutsche Bank AG

Deutsche Bank AG

Full-service

Ontario

Fifth Third Bank

Fifth Third Bank

Full-service

Ontario

First Commercial Bank

First Commercial Bank

Full-service

British Columbia

JPMorgan Chase Bank, National Association

JPMorgan Chase Bank, National Association

Full-service

Ontario

M&T Bank

M&T Bank

Full-service

Ontario

Maple Bank GmbH

Maple Bank

Full-service

Ontario

Mizuho Bank, Ltd.

Mizuho Bank, Ltd., Canada Branch

Full-service

Ontario

MUFG Union Bank, National Association

Union Bank, Canada Branch

Lending

Alberta

Natixis

Natixis Canada Branch

Lending

Quebec

Northern Trust Company (The)

Northern Trust Company, Canada Branch (The)

Full-service

Ontario

PNC Bank, National Association

PNC Bank Canada Branch

Full-service

Ontario

Royal Bank of Scotland plc (The)

Royal Bank of Scotland plc, Canada Branch (The)

Full-service

Ontario

Société Générale

Société Générale (Canada Branch)

Full-service

Quebec

State Street Bank and Trust Company

State Street

Full-service

Ontario

Sumitomo Mitsui Banking Corporation

Sumitomo Mitsui Banking Corporation, Canada Branch

Full-service

Ontario

U.S. Bank National Association

U.S. Bank National Association

Full-service

Ontario

UBS AG

UBS AG Canada Branch

Full-service

Ontario

United Overseas Bank Limited

United Overseas Bank Limited

Full-service

British Columbia

Wells Fargo Bank, National Association

Wells Fargo Bank, National Association, Canadian Branch

Full-service

Ontario

* An FBB, whose order is subject to the restrictions and requirements referred to in subsection 524(2) of the Bank Act, is referred to as a "lending" branch.

March 22, 2017

Jeremy Rudin
Superintendent of Financial Institutions

[13-1-o]

PRIVY COUNCIL OFFICE

Appointment opportunities

We know that our country is stronger — and our government more effective — when decision-makers reflect Canada’s diversity. Moving forward, the Government of Canada will use an appointment process that is transparent and merit-based, strives for gender parity, and ensures that Indigenous Canadians and minority groups are properly represented in positions of leadership. We will continue to search for Canadians who reflect the values that we all embrace: inclusion, honesty, fiscal prudence, and generosity of spirit. Together, we will build a government as diverse as Canada.

The Government of Canada is currently seeking applications from diverse and talented Canadians from across the country who are interested in the following positions.

Current opportunities

The following opportunities for appointments to Governor in Council positions are currently open for applications. Every opportunity is open for a minimum of two weeks from the date of posting on the Governor in Council Appointments website (http://www.appointments-nominations.gc.ca/slctnPrcs.asp?menu=1&lang=eng).

Position

Organization

Closing date

Chairperson

Canada Agricultural Review Tribunal

April 11, 2017

Chairperson

Canada Deposit Insurance Corporation

April 17, 2017

Directors

Canada Deposit Insurance Corporation

April 17, 2017

Vice-Chairperson

Canada Industrial Relations Board

April 17, 2017

Directors

Canada Mortgage and Housing Corporation

April 11, 2017

Chair of the Board

Canada Revenue Agency

April 5, 2017

President and Chief Executive Officer

Canadian Centre for Occupational Health and Safety

April 17, 2017

Vice-Chairperson

Civilian Review and Complaints Commission for the Royal Canadian Mounted Police

April 11, 2017

Members

Military Police Complaints Commission

April 17, 2017

Members

Veterans Review and Appeal Board

July 31, 2017

Upcoming opportunities

New opportunities that will be posted in the coming weeks.

Position

Organization

President (Chief Executive Officer)

Atomic Energy of Canada Limited

Commissioner

British Columbia Treaty Commission

Directors

Canada Development Investment Corporation

Commissioner for Workers

Canada Employment Insurance Commission

Director

Canada Post Corporation

Chairperson

Canadian International Trade Tribunal

Chairperson

Civilian Review and Complaints Commission for the Royal Canadian Mounted Police

Directors

First Nations Financial Management Board

Commissioner

First Nations Tax Commission

Sergeant-at-Arms

House of Commons

Chairperson

National Aboriginal Economic Development Board

Member

National Aboriginal Economic Development Board

Chairperson

National Battlefields Commission

Commissioner

National Battlefields Commission

Correctional Investigator of Canada

Office of the Correctional Investigator of Canada

Chairperson

Royal Canadian Mounted Police External Review Committee

[13-1-o]

  • Footnote 1
    Securities purchased under resale agreements are interest-bearing assets. Other receivables are non-interest-sensitive.
  • Footnote 2
    Interest payments on Government of Canada bonds are classified according to their coupon date.
  • Footnote 3
    Securities purchased under resale agreements are interest-bearing assets. Other receivables are non-interest-sensitive.
  • Footnote 4
    Interest payments on Government of Canada bonds are classified according to their coupon date.
  • Footnote 5
    Amounts as at 31 December 2015 have been updated to include cash flows from interest and coupon payments where applicable.
  • Footnote 6
    The return on plan assets excludes interest income.
  • Footnote 7
    Debt instruments consist of fixed-income securities and inflation-linked assets.
  • Footnote 8
    Other benefit plans does not include an inflation rate adjustment since it is a component of Assumed medical cost trend.
  • Footnote 9
    Other benefit plans does not include an inflation rate adjustment since it is a component of Assumed medical cost trend.
  • Footnote 10
    The sensitivity analysis presented in this table is hypothetical and should be used with caution. The analysis is based on a change in assumptions while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. The method and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous year.
  • Footnote 11
    The Chemical Abstracts Service Registry Number (CAS RN) is the property of the American Chemical Society, and any use or redistribution, except as required in supporting regulatory requirements and/or for reports to the Government of Canada when the information and the reports are required by law or administrative policy, is not permitted without the prior, written permission of the American Chemical Society.
  • Footnote 12
    The Federal Business Number is a nine-digit registration number issued by the Canada Revenue Agency (CRA) to Canadian businesses that register for one or more of the following: corporate income tax; importer/exporter account number; payroll (source) deductions (trust accounts); or goods and services tax. This number can be found on all forms issued to a business by the CRA. The first nine digits that appear on these forms is the Federal Business Number.
  • Footnote 13
    A list of six-digit North American Industry Classification System (NAICS) codes is available at the following Statistics Canada website: http://www23.statcan.gc.ca/imdb/p3VD.pl?Function=getVD&TVD=307532. Note that the Internet address is case sensitive.
  • Footnote 14
    The Chemical Abstracts Service Registry Number (CAS RN) is the property of the American Chemical Society, and any use or redistribution, except as required in supporting regulatory requirements and/or for reports to the Government of Canada when the information and the reports are required by law or administrative policy, is not permitted without the prior, written permission of the American Chemical Society.
  • Footnote 15
    The Federal Business Number is a nine-digit registration number issued by the Canada Revenue Agency (CRA) to Canadian businesses that register for one or more of the following: corporate income tax; importer/exporter account number; payroll (source) deductions (trust accounts); or goods and services tax. This number can be found on all forms issued to a business by the CRA. The first nine digits that appear on these forms is the Federal Business Number.
  • Footnote 16
    A list of six-digit North American Industry Classification System (NAICS) codes is available at the following Statistics Canada website: http://www23.statcan.gc.ca/imdb/p3VD.pl?Function=getVD&TVD=307532. Note that the Internet address is case sensitive.
  • Footnote 17
    Supplement, Canada Gazette, Part I, January 31, 1998
  • Footnote 18
    S.C. 1996, c. 10
  • Footnote 19
    S.C. 1996, c. 10
  • Footnote a
    S.C. 1999, c. 33
  • Footnote b
    SOR/94-311
  • Footnote c
    S.C. 1999, c. 33
  • Footnote d
    S.C. 2014, c. 39, s. 144
  • Footnote e
    S.C. 2015, c. 20, s. 12
  • Footnote f
    S.C. 2004, c. 15, s. 18
  • Footnote g
    S.C. 2001, c. 29, s. 39
  • Footnote h
    R.S., c. A-2
  • Footnote i
    S.C. 2004, c. 15, s. 11(1)
  • Footnote j
    R.S., c. A-2
  • Footnote k
    S.C. 2004, c. 15, s. 11(1)
  • Footnote l
    R.S., c. A-2