Year ended March 31, 2025
Management’s Responsibility Statement
Year ended March 31, 2025
The financial statements contained in this annual report have been prepared by management in accordance with International Financial Reporting Standards (IFRS). The integrity and objectivity of the data in these financial statements are management’s responsibility. Some of the information in the financial statements is based on management’s best estimates and judgments and gives due consideration to materiality. Management is also responsible for all other information in the annual report and for ensuring that this information is consistent, where appropriate, with the information contained in the financial statements.
Management maintains a system of financial management and internal control designed to provide reasonable assurance that the financial information is reliable, assets are safeguarded, and transactions are in accordance with Part X of the Financial Administration Act and the Canadian Air Transport Security Authority Act, executed in accordance with prescribed regulations within parliamentary authorities, and properly recorded to maintain accountability of government funds. The Canadian Air Transport Security Authority’s (CATSA’s) Internal Auditor has the responsibility for assessing its network of risk management, control and governance processes.
The Board of Directors is responsible for overseeing our business and activities. In particular, the Board provides oversight to ensure that management fulfills its responsibilities for financial reporting and internal control, and exercises this responsibility through the Audit Committee, which is composed of directors who are not employees of CATSA. The Audit Committee meets regularly with management, the Internal Auditor and with the Office of the Auditor General of Canada (OAG). The OAG has full and unrestricted access to the Audit Committee to discuss their findings. The Board of Directors, upon recommendation of the Audit Committee, reviews and approves the financial statements.
The Auditor General of Canada conducts an independent audit, in accordance with Canadian generally accepted auditing standards, and expresses an opinion on the financial statements. The Independent Auditor’s Report is presented on the following pages.
Neil Parry
Interim President and Chief Executive Officer
Nancy Fitchett, CPA, CA
Vice-President, Corporate Affairs and Chief Financial Officer
June 18, 2025
Independent Auditor’s Report
To the Minister of Transport and Internal Trade
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the Canadian Air Transport Security Authority (CATSA), which comprise the statement of financial position as at 31 March 2025, and the statement of comprehensive income (loss), statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of CATSA as at 31 March 2025, and its financial performance and its cash flows for the year then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of CATSA in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
Management is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditor s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards as issued by the IASB, 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.
In preparing the financial statements, management is responsible for assessing ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate CATSA or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing CATSA's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit.
We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit 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 CATSA's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on CATSA's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause CATSA to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Report on Compliance with Specified Authorities
Opinion
In conjunction with the audit of the financial statements, we have audited transactions of the Canadian Air Transport Security Authority coming to our notice for compliance with specified authorities. The specified authorities against which compliance was audited are Part X of the Financial Administration Act and regulations, the Canadian Air Transport Security Authority Act and regulations, the by-laws of the Canadian Air Transport Security Authority, and the directives issued pursuant to section 89 of the Financial Administration Act.
In our opinion, the transactions of the Canadian Air Transport Security Authority that came to our notice during the audit of the financial statements have complied, in all material respects, with the specified authorities referred to above. Further, as required by the Financial Administration Act, we report that, in our opinion, the accounting principles in IFRS Accounting Standards as issued by the IASB have been applied on a basis consistent with that of the preceding year.
Responsibilities of Management for Compliance with Specified Authorities
Management is responsible for the Canadian Air Transport Security Authority's compliance with the specified authorities named above, and for such internal control as management determines is necessary to enable the Canadian Air Transport Security Authority to comply with the specified authorities.
Auditor's Responsibilities for the Audit of Compliance with Specified Authorities
Our audit responsibilities include planning and performing procedures to provide an audit opinion and reporting on whether the transactions coming to our notice during the audit of the financial statements are in compliance with the specified authorities referred to above.
Mimma Venema, CPA, CA, CGA
Principal
for the Auditor General of Canada
Ottawa, Canada
18 June 2025
Statement of Financial Position
| (In thousands of Canadian dollars) | As at March 31 | |
|---|---|---|
| 2025 | 2024 | |
| Assets | ||
| Current assets | ||
| Cash | $ 102,215 | $ 9,955 |
| Trade and other receivables (note 4) | 80,371 | 130,036 |
| Inventories | 18,776 | 14,462 |
| Prepaids | 8,603 | 8,506 |
| Derivative financial assets | 855 | - |
| 210,820 | 162,959 | |
| Non-current assets | ||
| Property and equipment (note 5) | 382,154 | 355,726 |
| Intangible assets (note 6) | 12,879 | 14,160 |
| Right-of-use assets (note 7) | 16,664 | 17,059 |
| Employee benefits asset (note 8) | 64,809 | 57,088 |
| Derivative financial assets | 59 | - |
| 476,565 | 444,033 | |
| Total assets | $ 687,385 | $ 606,992 |
| Liabilities and Equity | ||
| Current liabilities | ||
| Trade and other payables (note 12) | $ 182,949 | $ 140,214 |
| Holdbacks (note 12) | 35 | 142 |
| Lease liabilities (note 7) | 3,263 | 2,389 |
| Deferred government funding related to operating expenses (note 10) | 27,379 | 22,968 |
| Derivative financial liabilities | 58 | 82 |
| 213,684 | 165,795 | |
| Non-current liabilities | ||
| Lease liabilities (note 7) | 15,738 | 16,808 |
| Deferred government funding related to capital expenditures (note 10) | 389,690 | 368,994 |
| Employee benefits liability (note 8) | 22,445 | 18,484 |
| Deferred revenue - screening services - other | 4,571 | - |
| Derivative financial liabilities (note 12) | - | 10 |
| 432,444 | 404,296 | |
| Equity | ||
| Accumulated surplus | 41,257 | 36,901 |
| Total liabilities and equity | $ 687,385 | $ 606,992 |
Contingencies (note 9) and contractual commitments (note 13)
The accompanying notes are an integral part of these financial statements.
Approved by the Board and authorized for issue on June 18, 2025:
Thao Pham
Chairperson
Neil Parry
Interim President and Chief Executive Officer
Statement of Comprehensive Income (Loss)
| (In thousands of Canadian dollars) | Years ended March 31 | |
|---|---|---|
| 2025 | 2024 | |
| Expenses | ||
| Pre-Board Screening | $ 670,637 | $ 598,298 |
| Hold Baggage Screening | 172,283 | 166,242 |
| Non-Passenger Screening | 150,960 | 155,190 |
| Restricted Area Identity Card Program | 5,011 | 4,670 |
| Corporate services | 60,447 | 55,847 |
| Total expenses (note 11) | 1,059,338 | 980,247 |
| Other (income) expenses | ||
| Finance costs | 683 | 515 |
| Foreign exchange loss (gain) | 82 | (44) |
| Write-off of property and equipment and intangible assets | 81 | 510 |
| Net (gain) loss on fair value of derivative financial instruments | (948) | 104 |
| Loss on disposal of property and equipment | - | 65 |
| Total other (income) expenses | (102) | 1,150 |
| Financial performance before revenue and government funding | 1,059,236 | 981,397 |
| Revenue | ||
| Finance income | 3,459 | 3,061 |
| Miscellaneous income | 53 | 18 |
| Total revenue | 3,512 | 3,079 |
| Government funding | ||
| Parliamentary appropriations for operating expenses | 1,002,116 | 932,092 |
| Amortization of deferred government funding related to capital expenditures | 48,201 | 42,984 |
| Parliamentary appropriations for lease payments | 3,242 | 2,058 |
| Total government funding (note 10) | 1,053,559 | 977,134 |
| Financial performance | $ (2,165) | $ (1,184) |
| Other comprehensive income | ||
| Item that will not be reclassified to financial performance | ||
| Remeasurement of defined benefit plans (note 8) | 6,521 | 2,956 |
| Total comprehensive income (loss) | $ 4,356 | $ 1,772 |
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Equity
| (In thousands of Canadian dollars) | Accumulated surplus |
|---|---|
| Balance, March 31, 2023 | $ 35,129 |
| Financial performance | (1,184) |
| Item that will not be reclassified to financial performance | |
| Remeasurement of defined benefit plans (note 8) | 2,956 |
| Balance, March 31, 2024 | $ 36,901 |
| Accumulated surplus | |
| Balance, March 31, 2024 | $ 36,901 |
| Financial performance | (2,165) |
| Item that will not be reclassified to financial performance | |
| Remeasurement of defined benefit plans (note 8) | 6,521 |
| Balance, March 31, 2025 | $ 41,257 |
The accompanying notes are an integral part of these financial statements.
Statement of Cash Flows
| (In thousands of Canadian dollars) | Years ended March 31 | |
|---|---|---|
| 2025 | 2024 | |
| Cash flows provided by (used in) | ||
| Operating activities | ||
| Financial performance | $ (2,165) | $ (1,184) |
| Items not involving cash | ||
| Depreciation and amortization (note 11) | 50,610 | 45,285 |
| Change in net employee benefits asset/liability | 2,761 | (88) |
| Write-off of property and equipment and intangible assets | 81 | 510 |
| Amortization of deferred government funding related to capital expenditures (note 10) | (48,201) | (42,984) |
| Change in fair value of financial instruments at fair value through profit and loss | (948) | 104 |
| Other non-cash transactions | (520) | (308) |
| Loss on disposal of property and equipment | - | 65 |
| Net change in working capital balances (note 16) | 77,636 | (5,482) |
| 79,254 | (4,082) | |
| Investing activities | ||
| Parliamentary appropriations received for capital funding | 65,115 | 25,593 |
| Purchase of property and equipment | (48,534) | (20,119) |
| Purchase of intangible assets | (1,007) | (3,670) |
| 15,574 | 1,804 | |
| Financing activities | ||
| Lease principal payments | (2,568) | (1,552) |
| (2,568) | (1,552) | |
| Increase (decrease) in cash | 92,260 | (3,830) |
| Cash, beginning of period | 9,955 | 13,785 |
| Cash, end of year | $ 102,215 | $ 9,955 |
The accompanying notes are an integral part of these financial statements.