Financial Statement Highlights
CATSA’s financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and approved by the Accounting Standards Board of Canada (AcSB).
Disposals
CATSA manages its assets, including asset disposal, as part of a lifecycle management regime or as part of new technology requirements. The disposal of assets is governed by corporate policy and procedures that ensure compliance with applicable legislation and regulations concerning the disposal of Crown assets. In its annual financial statements (see CATSA’s Annual Report), CATSA discloses contingent liabilities associated with the removal of explosives detection system equipment from airports across Canada, some of which contains hazardous materials, as well as the restoration of facilities contractually required under lease agreements.
Statement of Financial Position
| Statement of Financial Position | Actual | Forecast | Plan | Plan | Plan | Plan | Plan |
|---|---|---|---|---|---|---|---|
| (Figures are in thousands) | 2021/22 | 2022/23 | 2023/24 | 2024/25 | 2025/26 | 2026/27 | 2027/28 |
| ASSETS | |||||||
| Current assets | |||||||
| Cash | $ 7,581 | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,000 |
| Trade and other receivables | 100,670 | 137,318 | 170,173 | 189,510 | 190,704 | 88,564 | 88,564 |
| Inventories | 11,406 | 11,105 | 11,284 | 10,016 | 9,144 | 8,375 | 7,600 |
| Prepaids | 6,835 | 7,770 | 8,003 | 8,243 | 8,490 | 8,745 | 9,008 |
| Derivative financial assets | 34 | 1,473 | - | - | - | - | - |
| $ 126,526 | $ 167,666 | $ 199,460 | $ 217,769 | $ 218,338 | $ 115,684 | $ 115,172 | |
| Non-current assets | |||||||
| Property and equipment and intangible assets | |||||||
| EDS | 384,129 | 359,687 | 413,751 | 459,488 | 489,673 | 519,070 | 546,136 |
| Non-EDS | 23,342 | 20,548 | 28,274 | 28,818 | 29,012 | 28,489 | 23,639 |
| $ 407,471 | $ 380,235 | $ 442,025 | $ 488,306 | $ 518,685 | $ 547,559 | $ 569,775 | |
| Right-of-use assets | 16,569 | 13,575 | 13,756 | 11,803 | 8,705 | 7,592 | 16,045 |
| Employee benefits asset | 56,950 | 60,599 | 60,946 | 62,258 | 63,573 | 64,840 | 66,083 |
| Derivative financial assets | 6 | 40 | - | - | - | - | - |
| $ 607,522 | $ 622,115 | $ 716,187 | $ 780,136 | $ 809,301 | $ 735,675 | $ 767,075 | |
| LIABILITIES AND EQUITY | |||||||
| Current liabilities | |||||||
| Trade and other payables | 106,748 | 147,811 | 180,666 | 200,003 | 201,197 | 99,057 | 99,057 |
| Holdbacks | 1,637 | - | - | - | - | - | - |
| Provisions | 200 | - | - | - | - | - | - |
| Lease liabilities | 3,129 | 2,166 | 3,395 | 3,568 | 3,706 | 3,446 | 2,904 |
| Deferred government funding related to operating expenses | 18,241 | 18,875 | 19,287 | 18,259 | 17,634 | 17,120 | 16,608 |
| $ 129,955 | $ 168,852 | $ 203,348 | $ 221,830 | $ 222,537 | $ 119,623 | $ 118,569 | |
| Non-current liabilities | |||||||
| Lease liabilities | 14,107 | 12,264 | 12,171 | 9,851 | 6,296 | 5,022 | 14,163 |
| Deferred government funding related to capital expenditures | 406,579 | 379,509 | 441,469 | 487,867 | 518,363 | 547,354 | 569,687 |
| Employee benefits liability | 19,107 | 17,011 | 18,405 | 19,799 | 21,194 | 22,588 | 23,982 |
| $ 439,793 | $ 408,784 | $ 472,045 | $ 517,517 | $ 545,853 | $ 574,964 | $ 607,832 | |
| Equity | |||||||
| Accumulated surplus | $ 37,774 | $ 44,479 | $ 40,794 | $ 40,789 | $ 40,911 | $ 41,088 | $ 40,674 |
| $ 607,522 | $ 622,115 | $ 716,187 | $ 780,136 | $ 809,301 | $ 735,675 | $ 767,075 |
Statement of Comprehensive Income (Loss) and Equity
| Statement of Comprehensive Income and Equity |
Actual | Forecast | Plan | Plan | Plan | Plan | Plan |
|---|---|---|---|---|---|---|---|
| (Figures are in thousands) | 2021/22 | 2022/23 | 2023/24 | 2024/25 | 2025/26 | 2026/27 | 2027/28 |
| Expenses | |||||||
| Pre-Board Screening | $ 391,517 | $ 542,210 | $ 580,165 | $ 646,169 | $ 652,858 | $ 264,961 | $ 270,030 |
| Hold Baggage Screening | 161,558 | 152,669 | 169,612 | 182,580 | 191,097 | 107,265 | 108,745 |
| Non-Passenger Screening | 149,831 | 143,295 | 205,161 | 261,387 | 267,702 | 95,825 | 95,202 |
| Restricted Area Identity Card Program | 3,598 | 4,838 | 4,759 | 4,896 | 4,870 | 5,211 | 5,273 |
| Corporate services | 48,911 | 52,530 | 54,277 | 55,933 | 57,533 | 59,270 | 60,203 |
| Total expenses | $ 755,415 | $ 895,542 | $1,013,974 | $1,150,965 | $1,174,060 | $ 532,532 | $ 539,453 |
| Other expenses (income) | |||||||
| Impairment of property and equipment | $ 1,940 | $ - | $ - | $ - | $ - | $ - | $ - |
| Foreign exchange loss (gain) | 1,128 | (35) | - | - | - | - | - |
| Finance costs | 203 | 275 | 338 | 316 | 247 | 243 | 569 |
| Write-off of property and equipment and intangible assets |
196 | - | - | - | - | - | - |
| Net (gain) loss on fair value of derivative financial instruments |
(1,237) | (1,473) | 1,513 | - | - | - | - |
| Total other expenses (income) | $ 2,230 | $ (1,233) | $ 1,851 | $ 316 | $ 247 | $ 243 | $ 569 |
| Revenue | |||||||
| Other income | $ 268 | $ 2,427 | $ - | $ - | $ - | $ - | $ - |
| Total revenue | $ 268 | $ 2,427 | $ - | $ - | $ - | $ - | $ - |
| Financial performance before government funding | $ 757,377 | $ 891,882 | $1,015,825 | $1,151,281 | $1,174,307 | $ 532,775 | $ 540,022 |
| Government funding | |||||||
| Parliamentary appropriations for operating expenses | $ 677,463 | $ 850,393 | $ 968,064 | $1,098,452 | $1,115,070 | $ 467,943 | $ 467,941 |
| Parliamentary appropriations for lease payments | 3,876 | 3,483 | 2,504 | 3,711 | 3,815 | 3,949 | 4,015 |
| Amortization of deferred government funding related to capital expenditures | 78,986 | 40,327 | 41,572 | 49,113 | 55,544 | 61,060 | 67,652 |
| Total government funding | $ 760,325 | $ 894,203 | $1,012,140 | $1,151,276 | $1,174,429 | $ 532,952 | $ 539,608 |
| Financial performance | $ 2,948 | $ 2,321 | $ (3,685) | $ (5) | $ 122 | $ 177 | $ (414) |
| Other comprehensive income | |||||||
| Item that will not be reclassified to financial performance | |||||||
| Remeasurement of defined benefit plans | $ 21,320 | $ 4,384 | $ - | $ - | $ - | $ - | $ - |
| Total comprehensive income | $ 24,268 | $ 6,705 | $ (3,685) | $ (5) | $ 122 | $ 177 | $ (414) |
| Equity | |||||||
| Accumulated surplus, beginning of year | $ 13,506 | $ 37,774 | $ 44,479 | $ 40,794 | $ 40,789 | $ 40,911 | $ 41,088 |
| Total comprehensive income | 24,268 | 6,705 | (3,685) | (5) | 122 | 177 | (414) |
| Accumulated surplus, end of year | $ 37,774 | $ 44,479 | $ 40,794 | $ 40,789 | $ 40,911 | $ 41,088 | $ 40,674 |
Statement of Cash Flows
| Statement of Cash Flows | Actual | Forecast | Plan | Plan | Plan | Plan | Plan |
|---|---|---|---|---|---|---|---|
| (Figures are in thousands) | 2021/22 | 2022/23 | 2023/24 | 2024/25 | 2025/26 | 2026/27 | 2027/28 |
| Cash flows provided by (used in) | |||||||
| Operating activities | |||||||
| Financial performance | $ 2,948 | $ 2,321 | $ (3,685) | $ (5) | $ 122 | $ 177 | $ (414) |
| Items not involving cash | |||||||
| Depreciation and amortization | 80,662 | 43,929 | 44,863 | 52,431 | 58,910 | 64,462 | 71,361 |
| Impairment of property and equipment | 1,940 | - | - | - | - | - | - |
| Other non-cash transactions | 1,515 | 163 | - | - | - | - | - |
| Write-off of property and equipment and intangible assets |
196 | - | - | - | - | - | - |
| Amortization of deferred government funding related to capital expenditures |
(78,986) | (40,327) | (41,572) | (49,113) | (55,544) | (61,060) | (67,652) |
| Change in net employee benefits asset/liability | (2,052) | (1,361) | 1,047 | 82 | 80 | 127 | 151 |
| Change in fair value of financial instruments at fair value through profit and loss |
(1,237) | (1,473) | 1,513 | - | - | - | - |
| Net change in working capital balances | 24,497 | 4,016 | - | - | - | - | - |
| $ 29,483 | $ 7,268 | $ 2,166 | $ 3,395 | $ 3,568 | $ 3,706 | $ 3,446 | |
| Investing activities | |||||||
| Parliamentary appropriations received for capital funding |
$ 16,217 | $ 13,293 | $ 103,532 | $ 95,511 | $ 86,040 | $ 90,051 | $ 89,985 |
| Purchase of property and equipment and intangible assets: |
|||||||
| EDS | (47,184) | (12,420) | (90,253) | (87,835) | (78,118) | (82,454) | (85,640) |
| Non-EDS | (1,339) | (2,510) | (13,279) | (7,676) | (7,922) | (7,597) | (4,345) |
| $ (32,306) | $ (1,637) | $ - | $ - | $ - | $ - | $ - | |
| Financing activities | |||||||
| Lease principal payments | $ (3,682) | $ (3,212) | $ (2,166) | $ (3,395) | $ (3,568) | $ (3,706) | $ (3,446) |
| $ (3,682) | $ (3,212) | $ (2,166) | $ (3,395) | $ (3,568) | $ (3,706) | $ (3,446) | |
| Decrease in cash | $ (6,505) | $ 2,419 | $ - | $ - | $ - | $ - | $ - |
| Cash, beginning of year | $ 14,086 | $ 7,581 | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,000 |
| Cash, end of year | $ 7,581 | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,000 |
Reconciliation of Financial Performance (IFRS) to Operating Appropriations Used
| Reconciliation of Financial Performance to Operating Appropriations Used | Actual | Forecast | Plan | Plan | Plan | Plan | Plan |
|---|---|---|---|---|---|---|---|
| (Figures are in thousands) | 2021/22 | 2022/23 | 2023/24 | 2024/25 | 2025/26 | 2025/26 | 2027/28 |
| Financial performance before government funding |
$ 757,377 | $ 891,882 | $1,015,825 | $1,151,281 | $1,174,307 | $ 532,775 | $ 540,022 |
| Non-cash expenses | |||||||
| Depreciation and amortization | $ (80,662) | $ (43,929) | $ (44,863) | $ (52,431) | $ (58,910) | $ (64,462) | $ (71,361) |
| Impairment of property and equipment | (1,940) | - | - | - | - | - | - |
| Non-cash loss on foreign exchange recognized in financial performance |
(211) | (123) | - | - | - | - | - |
| Write-off of property and equipment and intangible assets |
(196) | - | - | - | - | - | - |
| Non-cash finance costs related to leases | (194) | (271) | (338) | (316) | (247) | (243) | (569) |
| Employee benefits expense | 2,052 | 1,361 | (1,047) | (82) | (80) | (127) | (151) |
| Change in fair value of financial instruments at fair value through profit and loss |
1,237 | 1,473 | (1,513) | - | - | - | - |
| Parliamentary appropriations for operating expenses |
$ 677,463 | $ 850,393 | $ 968,064 | $1,098,452 | $1,115,070 | $ 467,943 | $ 467,941 |
| Other items affecting funding | |||||||
| Net change in prepaids and inventories | $ (2,838) | $ 634 | $ 412 | $ (1,028) | $ (625) | $ (514) | $ (512) |
| Total operating appropriations used | $ 674,625 | $ 851,027 | $ 968,476 | $1,097,424 | $1,114,445 | $ 467,429 | $ 467,429 |
Operating and Capital Plans
The five-year operating and capital budgets reflect CATSA’s approved funding levels with the budget for 2026/27 and beyond reverting to CATSA’s A-Base funding. While CATSA continues to support Transport Canada in the development of an operationally effective long-term funding strategy, incremental funding will be required in order to allow CATSA to maintain current operations. The narrative that follows reflects the strategic plans CATSA has developed, subject to available funding.
Operating
| Operating Plan by Major Expenditure Category |
Actual | Forecast | Budget | Plan | Plan | Plan | Plan | Plan |
|---|---|---|---|---|---|---|---|---|
| (Figures are in thousands) | 2021/22 | 2022/23 | 2022/23 | 2023/24 | 2024/25 | 2025/26 | 2026/27 | 2027/28 |
| OPERATING EXPENDITURES | ||||||||
| Screening Services and Other Related Costs | 548,480 | 714,087 | 720,054 | 814,966 | 937,522 | 948,484 | 309,429 | 309,429 |
| Equipment Operating and Maintenance | 38,134 | 42,726 | 43,015 | 50,455 | 51,390 | 55,238 | 51,000 | 51,000 |
| Program Support and Corporate Services | 88,214 | 96,603 | 95,945 | 103,055 | 108,512 | 110,723 | 107,000 | 107,000 |
| SUBTOTAL | $ 674,828 | $ 853,416 | $859,014 | $ 968,476 | $1,097,424 | $1,114,445 | $ 467,429 | $ 467,429 |
| Revenue and Other Income | (203) | (2,389) | - | - | - | - | - | - |
| TOTAL | $ 674,625 | $ 851,027 | $859,014 | $ 968,476 | $1,097,424 | $1,114,445 | $ 467,429 | $ 467,429 |
Net operating expenditures totaled $851.0 million, which was $8.0 million lower than the Corporate Plan budget of $859.0 million. The major factors contributing to the variance were lower spending due primarily to the purchase of fewer screening hours than planned, partially offset by the attendance incentive program for screening personnel for the peak summer travel season and training requirements for new screening officers.
Throughout 2022/23, CATSA’s spending in response to the pandemic has decreased significantly from levels seen in 2021/22. In the prior year, pandemic-related spending included the performance of temperature screening, as instructed by the Government of Canada, until August 2021, as well as purchasing additional personal protective equipment, supplemental checkpoint sanitization and the deployment of acrylic barriers. The cost of these pandemic-related items has dropped significantly from $25.1 million to $5.5 million in 2022/23.
2023/24 – 2027/28 Financial Plan Highlights
Funding requirements for Screening Services and Other Related Costs will increase over the planning period mainly to reflect additional screening hours to support an improved wait time service level, increasing passenger volumes, the implementation of 100% NPS screening, and screening contractor billing rate increases.
Equipment Operating and Maintenance spending includes the costs to support CATSA’s EDS and Non-EDS equipment. Funding requirements in this area increase over the planning period due primarily to new deployments of more advanced technology, in addition to higher maintenance support costs owing to the terms of a new maintenance service provider contract. In addition, deployments of new and more advanced technology will require training for CATSA’s maintenance service provider.
Program Support and Corporate Services includes salaries and benefits to support CATSA’s workforce. Over the five-year planning period funding requirements increase due to inflationary increases, as well as other support costs for various corporate initiatives including IT modernization and cybersecurity. CATSA’s indeterminate workforce increases over the planning period in an effort to support industry recovery by allocating key resources to maintain critical functions.
Capital
| Capital Plan by Major Initiative | Actual | Forecast | Budget | Plan | Plan | Plan | Plan | Plan |
|---|---|---|---|---|---|---|---|---|
| (Figures are in thousands) | 2021/22 | 2022/23 | 2022/23 | 2023/24 | 2024/25 | 2025/26 | 2026/27 | 2027/28 |
| CAPITAL EXPENDITURES | ||||||||
| Explosives Detection Systems (EDS) | ||||||||
| PBS | $ 3,394 | $ 4,700 | $ 23,415 | $ 45,269 | $ 62,014 | $ 61,404 | $ 59,369 | $ 66,880 |
| HBS | 1,575 | 6,083 | 27,083 | 39,681 | 25,796 | 16,617 | 23,057 | 18,658 |
| NPS | 3 | - | 4,006 | 5,303 | 25 | 97 | 28 | 102 |
| Total EDS | $ 4,972 | $ 10,783 | $ 54,504 | $ 90,253 | $ 87,835 | $ 78,118 | $ 82,454 | $ 85,640 |
| Non-EDS | ||||||||
| PBS | $ 1,971 | $ 2,274 | $ 3,103 | $ 10,548 | $ 3,509 | $ 3,462 | $ 4,271 | $ 3,937 |
| HBS | 88 | 98 | 490 | 100 | 102 | 104 | 121 | 114 |
| NPS | 24 | 28 | 480 | 223 | 493 | 100 | 114 | 105 |
| RAIC | 226 | 401 | 2,066 | 2,263 | 498 | 498 | 567 | 522 |
| Corporate Services | 2,854 | 3,156 | 3,032 | 2,649 | 6,785 | 7,573 | 6,473 | 3,682 |
| Total Non-EDS | $ 5,163 | $ 5,957 | $ 9,171 | $ 15,783 | $ 11,387 | $ 11,737 | $ 11,546 | $ 8,360 |
| TOTAL | $ 10,135 | $ 16,740 | $ 63,675 | $ 106,036 | $ 99,222 | $ 89,855 | $ 94,000 | $ 94,000 |
2022/23 Financial Results
Capital expenditures totaled $16.7 million, which was $47.0 million lower than the Corporate Plan budget of $63.7M. The lower spending is primarily related to capital project delays due to supply chain issues experienced by CATSA’s vendors, as well as revised airport schedules. As a result, CATSA will seek Finance Canada approval for a capital re-profile of $44.8 million from 2022/23 to 2023/24. These funds have been reflected in the capital budget for 2023/24.
Key priorities in 2022/23 capital spending included the start of two major EDS lifecycle management programs which will continue into future planning periods. These programs will upgrade all existing full body scanners to the latest technology at PBS checkpoints, and replace existing oversize HBS X-ray units with CT technology. In addition, CATSA purchased HBS equipment to expand checked baggage screening capacity at the Montreal Trudeau International and Kitchener-Waterloo airports, as well as additional CATSA Plus equipment for deployment at the Vancouver International Airport.
2023/24 – 2027/28 Financial Plan Highlights
The lifecycle management of CATSA’s EDS equipment and systems is a key corporate priority and annually represents a significant portion of the capital spending. Over the 2023/24 - 2027/28 period, the Capital Plan for PBS includes the replacement of existing PBS X-ray equipment with CT technology starting in 2023/24, the deployment of additional PBS screening lines to accommodate an improved wait time service level, as well as the continued replacement of existing full body scanners. In HBS, the replacement of the existing HBS oversize X-Ray units with CT continues, while the later years of the plan include funding to begin replacing high-speed CT units which were are nearing the end of their useful life.
As part of the lifecycle management plan, CATSA will explore options for new technologies with the aim of optimizing screening operations as well as ensuring alignment with its international partners. In each deployment scenario, work will be coordinated with airport authorities in order to minimize disruption to screening operations.
CATSA’s capital plan also provides for the lifecycle management of non-EDS equipment and systems including IT network infrastructure, CCTV cameras and the replacement of the Secure Identification and Time Tracking platform as well as the Learning Management System. The budget also consists of annual lease payments.
As capital project delays may arise, CATSA will work with airport authorities and vendors in an effort to accommodate revised project plans. As a result, CATSA may require a re-profile of funds to account for delays in capital projects.