Corporate Plan 2025-26 to 2029-30 Summary

APPENDIX E: Financial Statements and Budgets

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).

Note that the financial statements below do not include cost recovery (refer to page 16 for more information).

Disposals

CATSA manages its assets, including asset disposal, as part of a lifecycle management regimen 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.

Statement of Financial Position

Statement of Financial Position
(in thousands of dollars)		 Actual
2023/24		 Forecast
2024/25		 Plan
2025/26		 Plan
2026/27		 Plan
2027/28		 Plan
2028/29		 Plan
2029/30
ASSETS
Current assets
Cash  $            9,955  $          10,000  $          10,000  $          10,000  $          10,000  $          10,000  $          10,000
Trade and other receivables        130,036        181,028        190,390          87,903          88,318          88,047          86,635
Inventories          14,462          18,011          13,415             9,907             9,290             7,685             7,051
Prepaids             8,506             5,985             4,674             6,303             6,490             6,683             6,882
 $        162,959  $        215,024  $        218,479  $        114,113  $        114,098  $        112,415  $        110,568
Non-current assets
Property and equipment
and intangible assets
EDS  $        347,302  $        396,703  $        436,647  $        472,360  $        504,208  $        534,564  $        557,531
Non-EDS          22,584          26,321          29,610          33,150          35,590          31,652          28,970
 $        369,886  $        423,024  $        466,257  $        505,510  $        539,798  $        566,216  $        586,501
Right-of-use assets  $          17,059  $          16,105  $          12,582  $          10,560  $          10,796  $            8,757  $            8,957
Employee benefits asset          57,088          59,856          56,933          54,009          51,086          48,162          45,238
 $        606,992  $        714,009  $        754,251  $        684,192  $        715,778  $        735,550  $        751,264
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables  $        140,214  $        191,393  $        200,755  $          98,268  $          98,683  $          98,412  $          97,000
Holdbacks                142                      -                      -                      -                      -                      -                      -
Lease liabilities             2,389             3,527             2,007             2,440             2,566             2,700             2,207
Deferred government funding
related to operating expenses		          22,968          23,996          18,089          16,210          15,780          14,368          13,933
Derivative financial liabilities                  82                      -                      -                      -                      -                      -                      -
 $        165,795  $        218,916  $        220,851  $        116,918  $        117,029  $        115,480  $        113,140
Non-current liabilities
Lease liabilities  $          16,808  $          14,810  $          12,368  $            9,929  $            9,948  $            7,671  $            8,044
Deferred government funding
related to capital expenditures		        368,994        422,244        465,571        504,918        539,300        565,807        586,172
Employee benefits liability          18,484          20,246          21,310          22,375          23,439          24,503          25,568
Derivative financial liabilities                  10                      -                      -                      -                      -                      -                      -
 $        404,296  $        457,300  $        499,249  $        537,222  $        572,687  $        597,981  $        619,784
Equity
Accumulated surplus  $          36,901  $          37,793  $          34,151  $          30,052  $          26,062  $          22,089  $          18,340
 $        606,992  $        714,009  $        754,251  $        684,192  $        715,778  $        735,550  $        751,264

Statement of Comprehensive Income (Loss) and Equity

Statement of Comprehensive
Income and Equity
(in thousands of dollars)		 Actual
2023/24		 Forecast
2024/25		 Plan
2025/26		 Plan
2026/27		 Plan
2027/28		 Plan
2028/29		 Plan
2029/30
Expenses
Pre-Board Screening  $        598,298  $        695,580  $        732,244  $        287,428  $        288,910  $        294,035  $        292,179
Hold Baggage Screening            166,242            173,225            175,032            104,134            106,738            108,773            108,091
Non-Passenger Screening            155,190            160,190            193,744              66,468              65,792              65,208              64,619
Restricted Area Identity Card Program                 4,670                 4,656                 4,491                 4,653                 4,681                 4,715                 4,294
Corporate services              55,847              60,866              62,016              60,168              62,823              64,098              63,763
Total expenses  $        980,247  $    1,094,517  $    1,167,527  $        522,851  $        528,944  $        536,829  $        532,946
Other expenses (income)
Finance costs  $               515  $               692  $              619  $               507  $                463  $               419  $               367
Write-off of property and equipment
and intangible assets		                    510                          -                          -                          -                          -                          -                          -
Net (gain) loss on fair value of
derivative financial instruments		                    104                     (92)                          -                          -                          -                          -                          -
Gain on disposal of property
and equipment		                      65                          -                          -                          -                          -                          -                          -
Foreign exchange loss (gain)                     (44)                     (59)                          -                          -                          -                          -                          -
Total other expenses (income)  $            1,150  $               541  $               619  $               507  $                463  $               419  $               367
Revenue
Finance income  $            3,061  $            3,297  $                    -  $                    -  $                     -  $                    -  $                    -
Other income                      18                         3                          -                          -                          -                          -                          -
Total revenue  $            3,079  $            3,300  $                    -  $                    -  $                     -  $                    -  $                    -
Financial performance before
government funding		  $        978,318  $    1,091,758  $    1,168,146  $        523,358  $        529,407  $        537,248  $        533,313
Government funding
Parliamentary appropriations for
operating expenses		  $        932,092  $    1,040,338  $    1,107,831  $        457,373  $        455,924  $        456,906  $        455,929
Parliamentary appropriations for
lease payments		                 2,058                 3,431                 4,147                 2,826                 2,904                 2,984                 3,066
Amortization of deferred government
funding related to capital expenditures		              42,984              44,970              52,526              59,060              66,589              73,385              70,569
Total government funding  $        977,134  $    1,088,739  $    1,164,504  $        519,259  $        525,417  $        533,275  $        529,564
Financial performance  $         (1,184)  $         (3,019)  $         (3,642)  $         (4,099)  $         (3,990)  $         (3,973)  $         (3,749)
Other comprehensive income
Item that will not be reclassified to
financial performance
Remeasurement of defined
benefit plans		  $            2,956  $            3,911  $                     -  $                     -  $                     -  $                     -  $                     -
Total comprehensive income  $            1,772  $               892  $           (3,642)  $          (4,099)  $          (3,990)  $          (3,973)  $          (3,749)
Equity
Accumulated surplus, beginning of year  $          35,129  $          36,901  $          37,793  $          34,151  $          30,052  $          26,062  $          22,089
Total comprehensive income                 1,772                    892               (3,642)               (4,099)               (3,990)               (3,973)               (3,749)
Accumulated surplus, end of year  $          36,901  $          37,793  $          34,151  $          30,052  $          26,062  $          22,089  $          18,340

Statement of Cash Flows

Cash flow table

Statement of Cash Flows
(in thousands of dollars)		 Actual
2023/24		 Forecast
2024/25		 Plan
2025/26		 Plan
2026/27		 Plan
2027/28		 Plan
2028/29		 Plan
2029/30
Cash flows provided by (used in)
Operating activities
Financial performance  $           (1,184)  $           (3,019)  $           (3,642)  $           (4,099)  $           (3,990)  $           (3,973)  $           (3,749)
Items not involving cash
Depreciation and amortization              45,285              47,902              55,709              61,489              69,033              75,935              73,028
Write-off of property and
equipment and intangible assets		                    510                          -                          -                          -                          -                          -                          -
Change in fair value of financial
instruments at fair value
through profit and loss		                    104                     (92)                          -                          -                          -                          -                          -
Gain on disposal of property
and equipment		                      65                          -                          -                          -                          -                          -                          -
Amortization of deferred
government funding related
to capital expenditures		             (42,984)             (44,970)             (52,526)             (59,060)             (66,589)             (73,385)             (70,569)
Other non-cash transactions                  (308)                          -                          -                          -                          -                          -                          -
Change in net employee
benefits asset/liability		                     (88)                 2,905                 3,987                 3,989                 3,987                 3,988                 3,989
Net change in working
capital balances		               (5,482)                    187                          -                          -                          -                          -                          -
 $           (4,082)  $            2,913  $            3,528  $            2,319  $            2,441  $            2,565  $            2,699
Investing activities
Parliamentary appropriations
received for capital funding		  $          25,593  $          98,220  $          95,853  $          98,407  $        100,971  $          99,892  $          90,934
Purchase of property and
equipment and intangible assets:
EDS             (15,984)             (88,932)             (85,533)             (86,921)             (88,882)             (92,584)             (83,632)
Non-EDS               (7,805)               (9,412)             (10,320)             (11,486)             (12,089)               (7,308)               (7,302)
 $            1,804  $              (124)  $                     -  $                     -  $                     -  $                     -  $                     -
Financing activities
Lease principal payments  $           (1,552)  $           (2,744)  $           (3,528)  $           (2,319)  $           (2,441)  $           (2,565)  $           (2,699)
 $           (1,552)  $           (2,744)  $           (3,528)  $           (2,319)  $           (2,441)  $           (2,565)  $           (2,699)
Decrease in cash   $           (3,830)  $                  45  $                     -  $                     -  $                     -  $                     -  $                     -
Cash, beginning of year  $          13,785  $            9,955  $          10,000  $          10,000  $          10,000  $          10,000  $          10,000
Cash, end of year  $            9,955  $          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
(in thousands of dollars)		 Actual
2023/24		 Forecast
2024/25		 Plan
2025/26		 Plan
2026/27		 Plan
2027/28		 Plan
2028/29		 Plan
2029/30
Financial performance before
government funding		  $      978,318  $  1,091,758  $  1,168,146  $      523,358  $      529,407  $      537,248  $      533,313
Non-cash expenses
Depreciation and amortization  $      (45,285)  $      (47,902)  $      (55,709)  $      (61,489)  $      (69,033)  $      (75,935)  $      (73,028)
Write-off of property and equipment
and intangible assets		                (510)                        -                        -                        -                        -                        -                        -
Non-cash finance costs related
to leases		                (505)                (687)                (619)                (507)                (463)                (419)                (367)
Change in fair value of financial instruments
to fair value through profit and loss		                (104)                    92                        -                        -                        -                        -                        -
Gain on disposal of property and equipment                   (65)                        -                        -                        -                        -                        -                        -
Non-cash loss on foreign exchange recognized
in financial performance		                  155                   (18)                        -                        -                        -                        -                        -
Employee benefits expense                    88             (2,905)             (3,987)             (3,989)             (3,987)             (3,988)             (3,989)
Parliamentary appropriations
for operating expenses 		  $      932,092  $  1,040,338  $  1,107,831  $      457,373  $      455,924  $      456,906  $      455,929
Other items affecting funding
Net change in prepaids and inventories  $          3,715  $          1,028  $       (5,907)  $        (1,879)  $           (430)  $        (1,412)  $           (435)
Total operating appropriations used  $      935,807  $  1,041,366  $  1,101,924  $      455,494  $      455,494  $      455,494  $      455,494

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 reference level funding. CATSA continues to support Transport Canada in the development of an operationally effective long-term funding strategy. Incremental funding will be required for 2026/27 and beyond to allow the organization to maintain operations. The narrative that follows reflects the priorities set out CATSA’s Strategic Plan, subject to available funding.

Operating

Operating Plan by Major
Expenditure Category
(Figures are in thousands)		 Actual
2023/24		 Forecast
2024/25		 Budget
2024/25		 Plan
2025/26		 Plan
2026/27		 Plan
2027/28		 Plan
2028/29		 Plan
2029/30
OPERATING EXPENDITURES
Screening Services
and Other Related Costs		        783,274        878,748        938,740        938,194         289,619         289,619        289,619        289,619
Equipment Operating
and Maintenance		          52,394          59,640          56,780          55,147           56,500           56,500          56,500          56,500
Program Support
and Corporate Services		        103,208        106,282        101,954        108,583         109,375         109,375        109,375        109,375
SUBTOTAL  $    938,876  $1,044,670  $1,097,474  $1,101,924  $    455,494  $    455,494  $    455,494  $    455,494
Revenue and
Other Income		           (3,069)           (3,304)                    -                      -                      -                      -                      -                      -  
TOTAL  $    935,807  $1,041,366  $1,097,474  $1,101,924  $    455,494  $    455,494  $    455,494  $    455,494

2024/25 Financial Results

Net operating expenditures are estimated to be $1,041.4 million, which is $56.1 million lower than the Corporate Plan budget of $1,097.5 million. The major factor contributing to the variance is lower spending due to a delay in the introduction of Transport Canada regulations for enhanced NPS.

2025/26 – 2029/30 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 the 95/15 wait-time service level in the face of increasing passenger volumes, the implementation of enhanced non-passenger screening in late 2024/25, and screening contractor billing rate increases.

Equipment Operating and Maintenance spending includes the costs to support CATSA’s EDS and non-EDS equipment. These costs increase over the planning period primarily due to new deployments of more advanced technology, in addition to anticipated contractual rate increases on several of CATSA’s extended warranty agreements with equipment vendors. 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, as well as other business-related costs. 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.

Capital

Capital Plan by Major Initiative
(Figures are in thousands)		 Actual
2023/24		 Forecast
2024/25		 Budget
2024/25		 Plan
2025/26		 Plan
2026/27		 Plan
2027/28		 Plan
2028/29		 Plan
2029/30
CAPITAL EXPENDITURES
Explosives Detection Systems (EDS)
PBS  $       11,966  $       42,691  $       51,046  $       58,539  $       48,631  $       45,947  $       64,199  $       60,741
HBS            11,556            42,460            44,438            26,994            38,290            42,935            28,385            22,891
NPS              1,471              3,657              3,657                     -                       -                       -                       -                       -  
Total EDS  $       24,993  $       88,808  $       99,141  $       85,533  $       86,921  $       88,882  $       92,584  $       83,632
Non-EDS
PBS  $         3,694  $         4,634  $         6,074  $         4,807  $         3,850  $         3,753  $         3,222  $         3,539
HBS                 265                 743                 470                 694                 112                 124                 108                 132
NPS                 259                 130                 196                    63                 175                    59                    52                    63
RAIC              2,380              1,310                 898                 388                 497                 539                 463                 554
Corporate Services              3,265              6,026              6,582              8,515              9,678            10,518              6,447              6,080
Total Non-EDS  $         9,863  $       12,843  $       14,220  $       14,467  $       14,312  $       14,993  $       10,292  $       10,368
TOTAL  $       34,856  $     101,651  $     113,361  $     100,000  $     101,233  $     103,875  $     102,876  $       94,000

2024/25 Financial Results

Capital expenditures are estimated to be $101.7 million, which is $11.7 million lower than the Corporate Plan budget of $113.4M. The major factors contributing to the variance are lower spending on project support for the deployment of computed tomography (CT) at PBS checkpoints, and revised 2024/25 plans, including delays, for several projects. Consequently, CATSA may seek Finance Canada approval for a capital re-profile from 2024/25 to 2025/26. The potential re-profile has not been reflected in the capital budget for 2025/26.

Key priorities in 2024/25 capital spending include the deployment of CT technology at PBS, which will improve the passenger screening experience by permitting laptops and liquids, gels, and aerosols (within the 100ml limit) to remain in carry-on bags, and the replacement of the oversize HBS X-ray units with CT technology, which is to be completed in 2025/26.

2025/26 – 2029/30 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. From 2025/26 - 2029/30, significant capital investments for PBS include the replacement of existing X-ray equipment with CT technology which began in 2024/25, as well as the replacement of ETD units and bottle liquid scanners. In HBS, the capital plan reflects an acceleration of the replacement of High-Speed CT units which began in 2024/25, along with completing the replacement of the existing oversize X-Ray units in Class 1 airports with CT technology. CATSA’s capital plan also provides for the lifecycle management of non-EDS equipment and systems including IT network infrastructure, BPSS equipment and CCTV cameras.

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 to minimize disruption to screening operations.

The five-year plan also includes funds to deploy supplemental FBS units in a primary position. This deployment is planned in parallel with the introduction of CT technology. The plan also includes investments in innovation, as well as funding to accommodate capacity expansion at both PBS and HBS screening operations. The budget also includes funds for improvements to regional offices and screening officer training space, and annual lease payments.

The capital plan does not include any additional funding to address requirements for the Toronto Pearson International Airport LIFT initiative which is aimed at transforming the airport into one of the most advanced, sustainable and passenger-friendly airports in the world. While CATSA has had preliminary discussions with the airport authority, sufficient information is not currently available to identify specific budgetary requirements. CATSA will return to government for supplemental funding if the project requirements exceed the organization’s available funding.

As capital project delays may arise, CATSA will work with airport authorities and vendors to accommodate revised project plans. As a result, the organization may require a re-profile of funds to account for delays in capital projects.

Date modified: