FORM 18-K/A

For Foreign Governments and Political Subdivisions Thereof

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

to

ANNUAL REPORT

of

PROVINCE OF NOVA SCOTIA

CANADA

(Name of Registrant)

Date of end of last fiscal year: March 31, 2020

SECURITIES REGISTERED*

(As of close of fiscal year)

 

 

Title of issue  

Amounts as to

which registration

is effective

 

Names of

exchanges on

which registered

N/A

  N/A   N/A

 

 

Names and addresses of persons authorized to receive notices

and communications from the Securities and Exchange Commission:

NICOLAS MARION

Consul and Chief Representative

Department of Finance Canada – New York

Canadian Consulate General

1251 Avenue of the Americas

New York, New York 10020-1175

 

DAVID H. LANDAU

Meister Seelig & Fein LLP

125 Park Avenue

New York, NY 10017

 

KELLIANN DEAN

Deputy Minister of Finance & Treasury Board

Province of Nova Scotia

P.O. Box 187

Halifax, Nova Scotia B3J 2N3

 

*

The Registrant filed this annual report on a voluntary basis.

 

 

 


The undersigned registrant hereby amends its Annual Report on Form 18-K for the fiscal year ended March 31, 2020, to add the following exhibits:

 

99.1    Public Accounts for the fiscal year ended March 31, 2021, pages 69 to 127
99.2    Consent of the Auditor General

 

ii


EXHIBIT INDEX

 

Exhibit
Number

    

Description

  (1    Public Accounts, 2020-2021, pages 69 to 127
  (2    Consent of the Auditor General

 

iii


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to its Annual Report to be signed on its behalf by the undersigned, its authorized agent, as of the 22nd day of September 2021.

 

Province of Nova Scotia
By:  

/s/ Roy Spence

  Director, Liability Management & Treasury Services

 

iv


EX-99.1

Exhibit 99.1

 

 

Consolidated Financial Statements

 

 

Statement of Responsibility

for the Consolidated Financial Statements

of the Province of Nova Scotia

Responsibility for the integrity, objectivity, and fair presentation of the consolidated financial statements of the Province of Nova Scotia rests with the government. These financial statements are prepared on behalf of the Minister and Deputy Minister of Finance and Treasury Board by the Controller in accordance with Canadian public sector accounting standards.

The consolidated financial statements include a Consolidated Statement of Financial Position, Consolidated Statement of Operations and Accumulated Deficits, Consolidated Statement of Changes in Net Debt, Consolidated Statement of Cash Flow, and notes to the consolidated financial statements. They present fairly, in all material respects, the financial position and the results of operations for the year ended March 31, 2021. The government is responsible for maintaining a system of internal accounting and administrative controls in order to provide reasonable assurance that transactions are appropriately authorized, assets are safeguarded, and financial records are properly maintained.

Under the mandate in Section 19 of the Auditor General Act, the Auditor General of Nova Scotia provides an independent opinion on the consolidated financial statements prepared by the government.

 

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Geoffrey Gatien, CPA, CA

Associate Deputy Minister and Controller

 

 

    

    

69

 



        Auditor General of Nova Scotia   

5161 George Street

Royal Centre, Suite 400

Halifax, Nova Scotia

B3J 1M7

  

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Independent Auditor’s Report

To the Members of the Legislative Assembly of Nova Scotia:

Report on the Audit of the Consolidated Financial Statements

Opinion

I have audited the consolidated financial statements of the Province of Nova Scotia, which comprise the consolidated statement of financial position as at March 31, 2021, and the consolidated statement of operations and accumulated deficits, consolidated statement of changes in net debt and consolidated statement of cash flow for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In my opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Province of Nova Scotia as at March 31, 2021, and its consolidated results of operations, consolidated changes in its net debt and its consolidated cash flow for the year then ended in accordance with Canadian public sector accounting standards.

Basis for Opinion

I conducted my audit in accordance with Canadian generally accepted auditing standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of my report. I am independent of the Province of Nova Scotia in accordance with the ethical requirements that are relevant to my audit of the consolidated financial statements in Canada, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

 

    

 


    

Key Audit Matters

Key audit matters are those matters that, in my professional judgement, were of most significance to the audit of the consolidated financial statements of the Province of Nova Scotia for the current year. In applying my professional judgement to determine key audit matters, I considered those matters that are complex, have a high degree of uncertainty, or are important to the public because of their significance.

The key audit matters were addressed in the context of my audit of the consolidated financial statements of the Province of Nova Scotia as a whole, and in forming my opinion thereon. I do not provide a separate opinion on these matters. Key audit matters are as follows:

 

   

KEY AUDIT MATTER

 

  

HOW WE ADDRESSED THIS MATTER

 

   

Major tax revenues (PIT, CIT, HST)

 

Major tax revenues include personal income tax (PIT), corporate income tax (CIT), and harmonized sales tax (HST) and were determined to be a key audit matter because:

 

• Major tax revenues are material and are based on management’s best estimates using statistical models and assumptions regarding future events; and

 

• Significant uncertainty is present in these estimates, as they involve forecasting future economic and tax filing data since there is a delay in when the Province receives actual results (i.e. once personal tax returns are filed). This uncertainty has increased due to the unprecedented impact of COVID-19 on the Province.

 

Major tax revenues are disclosed in:

 

• Note 1, Financial Reporting and Accounting Policies; and

 

• Schedule 1, Revenue.

  

 

 

We concluded that major tax revenues are fairly stated, in all material respects, and are disclosed appropriately in accordance with Canadian public sector accounting standards.

 

The matter was addressed by:

 

• Obtaining an understanding of the systems, processes, and controls over major tax revenues.

 

• Testing the underlying data used in the various tax revenue estimation models and reviewing evidence to support the key assumptions.

 

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KEY AUDIT MATTER

 

  

HOW WE ADDRESSED THIS MATTER

 

   

Pension, retirement and other obligations

 

Pension, retirement, and other obligations are a key audit matter because:

 

• The Province’s liability is material and is determined by an actuarial expert;

 

• Significant uncertainty exists as the liability is based on detailed actuarial assumptions which are subject to change in the future; and

 

• Amounts recorded in the financial statements may materially change as assumptions vary.

 

Pension, retirement, and other obligations are disclosed in:

 

• Note 1, Financial Reporting and Accounting Policies; and

 

• Note 4, Pension, Retirement and Other Obligations.

  

 

 

We concluded that pension, retirement, and other obligations are fairly stated, in all material respects, and are disclosed appropriately in accordance with Canadian public sector accounting standards.

 

The matter was addressed by:

 

• Obtaining an understanding of the systems, processes, and controls used to value the liability.

 

• Testing the employee data used by the Province’s actuary in their valuation for accuracy and completeness.

 

• Relying on the work of the Province’s consulting actuary.

 

• Testing the underlying data used in the valuation of the Province’s liability and reviewing evidence to support the key assumptions used.

 

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KEY AUDIT MATTER

 

  

HOW WE ADDRESSED THIS MATTER

 

   

Liabilities for contaminated sites

 

Liabilities for contaminated sites are a key audit matter because:

 

• The liabilities are subject to significant uncertainty, are material and are estimates of the future costs required to complete the necessary clean-up of the Province’s contaminated sites;

 

• The Province identified 133 contaminated and other environmental sites which are at various stages of evaluation. A liability has been recorded for 42 sites; and

 

• In the future, as additional environmental investigations are completed, it may be possible that the Province will need to account for additional liabilities related to these sites if it determines that contamination exceeds an environmental standard, a reasonable estimate of the related remediation costs can be made, and it is expected future economic benefits will be given up to remediate the sites.

 

Liabilities for contaminated sites are disclosed in:

 

• Note 1, Financial Reporting and Accounting Policies; and

 

• Note 9, Contaminated Sites.

  

 

 

We concluded that liabilities for contaminated sites are fairly stated, in all material respects, and are disclosed appropriately in accordance with Canadian public sector accounting standards.

 

This matter was addressed by:

 

• Obtaining an understanding of the systems, processes, and controls relating to identifying and evaluating contaminated sites.

 

• Assessing the reasonability of clean-up costs for contaminated sites, including changes to the Province’s estimated costs to clean up Boat Harbour.

 

• Assessing the Province’s accounting for liabilities associated with the clean up of abandoned mine sites based on the criteria for recognition in accordance with Canadian public sector accounting standards.

 

• Reviewing the Province’s disclosure of the uncertainty associated with this liability to ensure it is appropriate in accordance with Canadian public sector accounting standards.

 

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Other Information

The Government of Nova Scotia is responsible for the other information. The other information comprises the information included in Volume 1 of the Public Accounts of Nova Scotia, but does not include the consolidated financial statements and my auditor’s report thereon, which I obtained prior to the date of this auditor’s report, and the Form 18-K Securities and Exchange Commission filing, which is expected to be made available to us after that date.

My opinion on the consolidated financial statements does not cover the other information and I do not and will not express any form of assurance conclusion thereon.

In connection with my audit of the consolidated financial statements, my responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work I have performed on the other information that I obtained prior to the date of this auditor’s report, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

When I read the Form 18-K Securities and Exchange Commission filing, if I conclude that there is a material misstatement therein, I am required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Canadian Public Sector Accounting Standards (PSAS), and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Province of Nova Scotia’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern assumption. The going concern basis of accounting has been used in the preparation of the consolidated financial statements, as the Province of Nova Scotia continues to operate as a going concern.

Those charged with governance are responsible for overseeing the Province of Nova Scotia’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

My objectives are to obtain reasonable assurance about whether the consolidated 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 my 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 consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, I exercise professional judgment and maintain professional skepticism throughout the audit. I also:

 

   

Identify and assess the risks of material misstatement of the consolidated 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 my 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.

 

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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 the Province of Nova Scotia’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 the Province of Nova Scotia’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Province of Nova Scotia to cease to continue as a going concern.

 

   

Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

 

   

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Province of Nova Scotia to express an opinion on the consolidated financial statements. I am responsible for the direction, supervision, and performance of the group audit. I remain solely responsible for my audit opinion.

I 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 I identify during my audit.

I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards.

 

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Kim Adair-MacPherson, FCPA, CA, ICD.D

Auditor General of Nova Scotia

Halifax, Nova Scotia

September 13, 2021

 

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Consolidated Financial Statements

Statement 1    

Province of Nova Scotia

Consolidated Statement of Financial Position

As at March 31, 2021

($ thousands)

 

 

     2021          2020  

Financial Assets

     

Cash and Short-Term Investments

     1,697,375         1,219,037  

Accounts Receivable

     966,269         1,067,581  

Inventories for Resale

     3,180         2,862  

Loans Receivable (Schedule 3)

     2,238,330         2,247,429  

Investments (Schedule 3)

     158,015         166,187  

Investment in Government Business Enterprises (Schedule 6)

     329,493         329,465  
             5,392,662         5,032,561  

Liabilities

     

Bank Advances and Short-Term Borrowings

     1,200,635         1,275,824  

Accounts Payable and Accrued Liabilities

     1,893,450         1,653,378  

Deferred Revenue (Note 3)

     279,408         247,998  

Accrued Interest

     199,453         191,814  

Pension, Retirement and Other Obligations (Note 4)

     2,803,874         2,694,329  

Liabilities for Contaminated Sites (Note 9)

     412,978         398,909  

Unmatured Debt (Schedules 4 and 5)

     14,812,829         13,683,163  

Unamortized Foreign Exchange Translation Gains and Losses, Premiums and Discounts

     190,798         129,543  
     21,793,425         20,274,958  

Net Debt

     (16,400,763)        (15,242,397)  

Non-Financial Assets

     

Tangible Capital Assets (Schedule 7)

     7,126,376         6,365,379  

Inventories of Supplies

     148,468         87,489  

Prepaid Expenses

     35,112         40,317  
     7,309,956         6,493,185  

Accumulated Deficits

     (9,090,807)        (8,749,212)  

Restricted Assets (Note 2)

Contingencies and Contractual Obligations/Rights (Note 10)

Trust Funds Under Administration (Note 12)

Impact of COVID-19 Pandemic (Note 15)

The accompanying notes and schedules are an integral part of these Consolidated Financial Statements

 

 

    

    

 

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Public Accounts Volume 1 — Consolidated Financial Statements

 

Statement 2    

Province of Nova Scotia

Consolidated Statement of Operations and Accumulated Deficits

For the fiscal year ended March 31, 2021

($ thousands)

 

 

     Adjusted               
     Estimate
2021
     Actual
2021
    Actual
2020
 

Revenue (Schedule 1)

       

Provincial Sources

       

Tax Revenue

             6,191,370        5,664,531       6,163,195  

Other Provincial Revenue

     1,433,401        1,485,301       1,552,114  

Net Income from Government Business Enterprises (Schedule 6)

     391,814        384,261       388,621  

Investment Income

     168,688        146,507       208,482  
     8,185,273        7,680,600       8,312,412  

Federal Sources

     4,278,397        4,605,267       3,971,431  

Total Revenue

     12,463,670        12,285,867       12,283,843  

Expenses (Schedule 2)

       

Agriculture

     48,062        54,186       58,042  

Business

     160,281        164,048       211,390  

Communities, Culture and Heritage

     100,184        119,859       105,578  

Community Services

     1,002,202        1,016,984       994,833  

Education and Early Childhood Development

     1,842,645        1,844,466       1,810,882  

Energy and Mines

     63,735        60,721       34,242  

Environment

     101,877        133,302       99,032  

Finance and Treasury Board

     24,282        23,456       122,093  

Fisheries and Aquaculture

     18,093        14,963       21,797  

Health and Wellness

     4,952,830        5,245,728       4,870,848  

Justice

     374,397        389,257       365,870  

Labour and Advanced Education

     461,582        475,371       468,989  

Assistance to Universities

     433,420        475,447       447,789  

Lands and Forestry

     82,619        107,628       83,473  

Municipal Affairs and Housing

     444,295        472,260       446,519  

Public Service

     140,337        141,996       138,130  

Seniors

     2,711        2,575       2,716  

Service Nova Scotia and Internal Services

     299,618        299,546       295,110  

Transportation and Infrastructure Renewal

     537,991        580,936       591,408  

Restructuring Costs

     341,032        81,455       170,662  

Pension Valuation Adjustment (Note 4)

     75,832        61,066       50,439  

Refundable Tax Credits

     131,451        123,842       64,391  

Net Loss on Disposal of Crown Assets

            4,218        

Debt Servicing Costs (Note 6)

     769,168        734,152       827,323  

Total Expenses (Note 7)

     12,408,644        12,627,462       12,281,556  

Provincial Surplus (Deficit)

     55,026        (341,595     2,287  

Accumulated Deficits, Beginning of Year

        (8,749,212     (8,751,499

Accumulated Deficits, End of Year

        (9,090,807     (8,749,212

The accompanying notes and schedules are an integral part of these Consolidated Financial Statements

 


 

Consolidated Financial Statements

 

Statement 3    

Province of Nova Scotia

Consolidated Statement of Changes in Net Debt

For the fiscal year ended March 31, 2021

($ thousands)

 

 

     Adjusted                
    

Estimate

2021

    

Actual

2021

    

Actual

2020

 

Net Debt, Beginning of Year

             (15,242,397)        (15,242,397)        (14,992,969)  

Changes in the Year

        

Provincial Surplus (Deficit)

     55,026         (341,595)        2,287   

Acquisitions and Transfers of Tangible Capital Assets

     (1,042,407)        (1,208,207)        (665,241)  

Amortization of Tangible Capital Assets

     452,804         442,190         440,228   

Disposals of Tangible Capital Assets

     —         5,020         2,292   

Acquisitions of Inventories of Supplies

     —         (60,979)        (9,495)  

Use (Acquisitions) of Prepaid Expenses

     —         5,205         (19,499)  

Total Changes in the Year

     (534,577)        (1,158,366)        (249,428)  

Net Debt, End of Year

     (15,776,974)        (16,400,763)        (15,242,397)  

 

 

 

 

 

 

The accompanying notes and schedules are an integral part of these Consolidated Financial Statements

 

 

    

    

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Public Accounts Volume 1 — Consolidated Financial Statements

 

Statement 4    

Province of Nova Scotia

Consolidated Statement of Cash Flow

For the fiscal year ended March 31, 2021

($ thousands)

 

 

     2021     2020  

Operating Transactions

    

Provincial Surplus (Deficit)

     (341,595     2,287  

Sinking Fund and Public Debt Management Fund Earnings

     (57,802     (93,670)  

Amortization of Premiums and Discounts on Unmatured Debt

     (5,982     (1,156)  

Net Income from Government Business Enterprises (Schedule 6)

     (384,261     (388,621)  

Profit Distributions from Government Business Enterprises

     384,233       325,969  

Amortization of Tangible Capital Assets (Schedule 7)

                 442,190       440,228  

Loss (Gain) on Disposal of Tangible Capital Assets

     4,401       (454)  

Net Change in Other Items (Note 8)

     372,766       (45,620)  
     413,950       238,963  

Investing Transactions

    

Repayment of Loans Receivable

     385,717       284,589  

Advances and Investments

     (373,459     (416,228)  

Write-offs

     5,013       110,892  
     17,271       (20,747)  

Capital Transactions

    

Acquisition of Tangible Capital Assets

     (1,208,207     (665,241)  

Proceeds from Disposal of Tangible Capital Assets

     619       2,746  
     (1,207,588     (662,495)  

Financing Transactions

    

Debentures and Other Debt Issued

     2,422,363       1,654,167  

Amortization of Foreign Exchange Gains and Other Items

     3,838       (16,547)  

Net Sinking Fund Withdrawals (Instalments)

     (17,899     837,519  

Repayment of Debentures and Other Long-Term Obligations

     (1,153,597     (2,125,309)  
     1,254,705       349,830  

Cash Inflows (Outflows)

     478,338       (94,449)  

Cash Position, Beginning of Year

     1,219,037       1,313,486  

Cash Position, End of Year

     1,697,375       1,219,037  

Cash Position Represented by:

    

Cash and Short-Term Investments

     1,697,375       1,219,037  

 

 

 

 

The accompanying notes and schedules are an integral part of these Consolidated Financial Statements

 


 

Notes to the Consolidated Financial Statements

 

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

1. Financial Reporting and Accounting Policies

The Province’s consolidated financial statements are prepared in accordance with Canadian public sector accounting standards using the following significant accounting policies:

 

  (a)

Government Reporting Entity

The government reporting entity (GRE) is comprised of government components within the General Revenue Fund, other governmental units (GUs), government business enterprises (GBEs), and the Province’s share of government partnership arrangements (GPAs). GUs and GBEs represent the entities that are controlled by the government. Control is defined as the power to govern the financial and operating policies of another organization with expected benefits or the risk of loss to the government from the other organization’s activities. Control exists regardless of whether the government chooses not to exercise its power to govern so long as it has the ability to govern. Control must exist at the financial statement date, without the need to amend legislation or agreements. GPAs represent entities for which decision making and significant risks and benefits are shared with other parties outside of the GRE.

Trust funds that are administered by the Province but not controlled are excluded from the GRE and disclosed in Note 12.

 

  (b)

Principles of Consolidation

A government component is not a separate entity but is an integral part of government, such as a department, agency, or public service unit within the General Revenue Fund, or a special purpose fund. A GU is a government organization that is not a GBE, GPA, or government component. GUs include certain boards, commissions, service organizations, and government not-for-profit entities. The accounts of government components and GUs are consolidated on a line-by-line basis after adjusting the accounting policies to be consistent with those described in Note 1(d). Significant inter-organization balances and transactions are eliminated.

A GBE is a self-sustaining organization that has the financial and operating authority to sell goods and services to individuals and organizations outside of the Province’s GRE as its principal activity and source of revenue. GBEs are accounted for on the modified equity basis. Their accounting principles are not adjusted to conform with those of the Province. The total net assets of all GBEs are reported as Investment in Government Business Enterprises on the Consolidated Statement of Financial Position. The total net income from all GBEs is reported separately as revenue on the Consolidated Statement of Operations and Accumulated Deficits.

A GPA is a contractual arrangement between the government and a party or parties outside the GRE. The partners have significant clearly defined common goals, make a financial investment in the partnership, share control of decision making, and share, on an equitable basis, the significant risks and benefits associated with the operations of the government partnership. The Province’s interest in partnerships is accounted for using the modified equity method, as GPAs do not meet the threshold of materiality and cost-benefit to use the proportionate consolidation method.

A complete listing of the organizations within the Province’s GRE is provided in Schedule 10.

 

 

    

    

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Public Accounts Volume 1 — Consolidated Financial Statements

 

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

1.   Financial Reporting and Accounting Policies (continued)

 

  (c)

Presentation of Estimates

Each year, the Province prepares an annual budget, referred to as the Estimates, which represents the financial plan of the Province presented by the government to the House of Assembly for the fiscal year commencing April 1. The Estimates, forming the basis of the Appropriations Act, are prepared primarily for the management and oversight of the General Revenue Fund based upon the government’s policies, programs, and priorities. Impacts of consolidation are summarized in the Estimates and included on a net basis as Consolidation and Accounting Adjustments.

For consolidation purposes, the estimates in Budget 2020-21, tabled on February 25, 2020, were adjusted on a line-by-line basis by grossing up the associated revenues and expenses with those of the Province’s governmental units in order to properly reflect the estimates on a comparative basis in these consolidated financial statements.

 

  (d)

Significant Accounting Policies

Revenues

Revenues are recorded on the accrual basis in the fiscal year that the events giving rise to the revenues occurred. Revenues from personal and corporate income taxes and harmonized sales taxes are recorded in the year in which the taxable event occurs based upon estimates using statistical models after considering certain non-refundable tax credits and other adjustments from the federal government. As actual or more current economic data and information from the federal government becomes available for prior years, adjustments to tax revenues are recorded in the current year. Non-refundable personal and corporate income tax credits are tax concessions (relief of taxes owing), which are recorded as reductions to the corresponding tax revenues. Refundable personal and corporate income tax credits are transfers made through the tax system (financial benefits other than relief of taxes owing), which are recorded as expenses, not as reductions to tax revenues. Petroleum royalties are recorded based upon estimates using economic models and may be adjusted in the current year based on updated forecasts, as well as estimated abandonment costs for the future decommissioning or restoration of offshore field assets.

Government transfers received for operating purposes are recognized as revenue in the period during which the transfer is authorized and all eligibility criteria (if any) are met, except when and to the extent that the transfer stipulations give rise to an obligation that meets the definition of a liability. Transfers meeting the definition of a liability are recorded as deferred revenue and are recognized as revenue as the stipulations are satisfied.

Government transfers received for capital purposes and contributed assets are recognized as revenue in the period that the tangible capital assets are acquired. Capital transfers that have been received in advance of project completion are recorded as deferred revenue and are recognized as revenue as the related eligible expenditures are incurred.

Expenses

Expenses are recorded on the accrual basis in the fiscal year that the events giving rise to the expenses occurred and are reported in more detail in Note 7, Expenses by Object. Grants and other government transfers are recognized as expenses in the period at the earlier of: 1) the transfer being authorized and all eligibility criteria are met by the recipients, and 2) time of the payment.

 


 

Notes to the Consolidated Financial Statements

 

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

1. Financial Reporting and Accounting Policies (continued)

Provisions are made for probable losses on certain loans, investments, loan guarantees, accounts receivable, advances, forgivable loans, and for contingent liabilities when it is likely that a liability exists and the amount can be reasonably determined. These provisions are updated as estimates are revised, at least annually.

Financial Assets

Cash and Short-Term Investments are recorded at cost, which approximates market value, and include R-1 (low, middle, high) rated federal and provincial government bills or promissory notes, bankers’ acceptances, term deposits, and commercial paper. Terms of investments are generally 1 to 90 days. The weighted average interest rate of short-term investments was 0.14 per cent at year-end.

Accounts Receivable are recorded at the principal amount less valuation allowances.

Inventories for Resale are held for sale in the ordinary course of operations and are recorded at the lower of cost and net realizable value.

Loans Receivable and Investments are recorded at cost less adjustments for concessionary assistance and any prolonged impairment in value. Concessionary assistance consists of subsidies provided by the Province and is recognized as an expense at the date of issuance of the loan or date of the investment. Loans usually bear interest at approximate market rates and normally have fixed repayment schedules. Any write-down of a loan or investment to reflect a loss in value is not reversed if there is a subsequent increase in value. Any write-offs must be approved by Governor in Council.

Liabilities

Bank Advances and Short-Term Borrowings have initial maturities of one year or less and are recorded at cost, which approximates market value. At year-end, short-term Canadian dollar borrowings had a weighted average interest rate of 0.13 per cent.

Deferred Revenue is recorded when funds received are restricted by external parties for a stated purpose, such as a specific program or the purchase of tangible capital assets. Deferred revenue is recognized as revenue as the stipulations are met, funds are used for their intended purpose, or related eligible capital expenditures are incurred.

Pension, Retirement and Other Obligations include various employee future benefit plans, including accumulated sick leave benefits, where responsibility for the provision of benefits rests with the Province. Liabilities for these plans are calculated using the projected benefit actuarial method using accounting assumptions that reflect the Province’s best estimates of performance over the long term. The projected benefit actuarial method attributes the estimated cost of benefits to the periods of employee service. The net liability represents accrued employee benefits less the market related value of plan assets (if applicable) and the balance of unamortized experience gains and losses. The market related values are determined in a rational and systematic manner so as to recognize asset market value gains and losses over a five-year period.

Liabilities for Contaminated Sites are recognized when an existing environmental standard is exceeded, the Province is directly responsible or accepts responsibility, the Province expects to remediate and give up future economic benefits, and a reasonable estimate of the amounts can be made. Contaminated sites are a result of any chemical, organic, radioactive material, or live

 

 

    

    

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Notes to the Consolidated Financial Statements

As at March 31, 2021

 

1. Financial Reporting and Accounting Policies (continued)

organism being introduced directly or via the air into soil, water, or sediment that exceeds an environmental standard. These liabilities include the costs directly attributable to remediation activities, including costs related to post-remediation operation, maintenance, and monitoring that are an integral part of the remediation strategy. They are measured based on the best estimate of the expenditures required to complete the remediation, net of any expected recoveries. The carrying amounts of liabilities for contaminated sites are reviewed at each financial reporting date and updated as additional information is available. Any revisions to the amounts previously recognized are accounted for in the period in which the revisions are made.

Unmatured Debt is comprised of debentures and various loans in Canadian and foreign currencies, capital leases, and long-term debt related to Public-Private Partnership (P3) assets. Debt is recorded at par, net of sinking funds, which include the Public Debt Management Funds. Under P3 arrangements, the Province uses private sector partners to design, build, finance, and maintain certain infrastructure assets. Assets procured through P3s are recognized as tangible capital assets, and the related long-term obligations are recognized as other unmatured debt in these consolidated financial statements as the assets are constructed.

Hedge accounting is used when financial instruments form a hedging relationship, which is highly effective, and is considered to be consistent with the Province’s financial risk management goals. To have reasonable assurance of the effectiveness of a hedging relationship, the Province must expect the relationship to be effective in achieving offsetting changes in the fair value or cash flows of the hedged item and the hedging item.

Hedge effectiveness requires a high correlation of changes in fair values or cash flows. To ensure effectiveness, the Province employs non-speculative derivatives that match the critical terms of the underlying hedged item. Hedging relationships include synthetic instruments, which involve relationships between two or more assets or liabilities with matching terms for the purpose of emulating the net cash flows or other characteristics of a single asset or liability. Synthetic instrument accounting is used to account for the assets and liabilities in a synthetic instrument relationship as though they were the item being emulated.

Sinking Fund and Public Debt Management Fund investments are recorded at cost, netted against unmatured debt, and consist primarily of debentures of the Province of Nova Scotia, other provincial governments, and the Government of Canada. Premiums and discounts on sinking funds are deferred and amortized over the life of the investment. Amortization and realized gains and losses for premiums and discounts relating to sinking fund balances and installments are recorded as part of sinking fund earnings.

Unamortized Foreign Exchange Translation Gains and Losses result when debentures payable and sinking funds invested in foreign currencies are translated into Canadian dollars at the rate of exchange in effect at March 31 and upon entering into derivative contracts. Unrealized foreign exchange gains and losses on the translation of foreign currency are deferred and amortized on a straight-line basis over the remaining term of the related monetary item.

Premiums and Discounts, as well as underwriting commissions relating to the issuance of debentures, are deferred and amortized over the term of the related debt. Amortization and realized foreign exchange gains and losses, premiums and discounts relating to debt balances, serial retirements, sinking fund balances, and installments are charged to debt servicing costs except as noted above.

 


 

Notes to the Consolidated Financial Statements

 

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

1. Financial Reporting and Accounting Policies (continued)

Contingent Liabilities, including provisions for losses on loan guarantees, are potential obligations that may become actual liabilities when one or more future events occur or fail to occur. If the future event is likely, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the consolidated financial statements. In cases where an accrual is made, but exposure exists beyond the amount accrued, this excess exposure would also be disclosed, unless the impact is immaterial or the disclosure would have an adverse effect on the outcome of the contingency.

Net Debt

Net Debt is measured as the difference between the Province’s liabilities and financial assets, which represents the accumulation of all past annual surpluses/deficits and cumulative net acquisitions of non-financial assets.

Non-Financial Assets

Tangible Capital Assets have useful lives extending beyond the accounting period, are held for use in the production and supply of goods and services, and are not intended for sale in the ordinary course of operations. They are recorded at gross historical cost (or estimated cost when the actual cost is unknown) and include all costs directly attributable to the acquisition, design, construction, development, installation, and betterment of the tangible capital asset, as well as interest related only to the financing of P3 assets during construction. Tangible capital assets include land, land improvements, buildings, major equipment and software, vehicles, ferries, roads, highways, and bridges.

Tangible capital assets are written down when conditions indicate that they no longer contribute to the Province’s ability to provide services, or when the value of future economic benefits associated with the tangible capital assets are less than their net book value. The net write-downs are accounted for as amortization expense and are not reversed.

Contributed tangible capital assets received are recorded at their fair market value on the date of contribution, except in circumstances where the value cannot be reasonably determined, in which case they are recognized at nominal value. Tangible capital assets do not include intangibles or assets acquired by right, such as forests, water, and mineral resources, or works of art and historical treasures. Tangible capital assets are amortized to expense over the useful lives of the assets. The amortization methods and rates applied by the other governmental units are not adjusted to the methods and rates used by the General Revenue Fund.

Inventories of Supplies are held for consumption or use by the Province in the course of its operations and are recorded at the lower of cost and current replacement cost.

Prepaid Expenses are cash disbursements for goods or services, other than tangible capital assets and inventories of supplies, that will provide economic benefits in one or more future periods. The prepaid amount is recognized as an expense in the year the good or service is used or consumed.

Accumulated Deficits

Accumulated Deficits are measured as the difference between the Province’s Net Debt and non-financial assets. This represents the cumulative balance of net surpluses and deficits arising from the operations of the Province.

 

 

    

    

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Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

1.   Financial Reporting and Accounting Policies (continued)

 

  (e)

Measurement Uncertainty

Measurement uncertainty exists in determining certain amounts at which items are recorded or disclosed in these consolidated financial statements. Many items are measured using management’s best estimates based on assumptions that reflect the most probable set of economic conditions and planned courses of action. Uncertainty exists whenever estimates are used because actual results may differ materially from the Province’s estimates.

Measurement uncertainty that is material exists in the estimation of tax revenues, pension, retirement and other obligations, liabilities for contaminated sites, and the value of tangible capital assets.

Personal Income Tax (PIT) revenue of $2.88 billion (2020 – $2.98 billion), Corporate Income Tax (CIT) revenue of $315.9 million (2020 – $475.6 million), and Harmonized Sales Tax (HST) revenue of $1.84 billion (2020 – $2.04 billion), see Schedule 1, may be subject to subsequent revisions based on changes to key tax revenue inputs. Changes to tax revenue inputs can be based on new or revised information, possible differences between the estimated and actual economic growth, and other assumptions used in statistical modelling to accrue these revenues. When these changes are to revenue estimates of prior years, they are classified as prior years’ adjustments (PYAs), see Note 5. Revisions to tax revenue inputs and variances in actual experience can result in significant estimate changes. Some of the key variable inputs related to tax revenues include, but are not limited to, the following:

 

Personal Income Tax    Corporate Income Tax    Harmonized Sales Tax  

•  Personal taxable
income levels

  

•  National corporate
taxable income levels as

  

•  Personal consumer expenditure levels

 

    

•  Provincial taxable

  

provided by Finance

  

•  Provincial GDP

 

income yield

•  Tax credits uptake

  

Canada

•  Nova Scotia’s share of national taxable income

  

•  Spending by exempt industries

•  Rebate levels

 
    

•  Tax credits uptake

  

•  Residential housing investment

 

The liabilities for pension, retirement and other obligations of $2.80 billion (2020 – $2.69 billion), see Note 4, are subject to uncertainty because actual results may differ significantly from the Province’s various long-term assumptions about plan members, return on investment of pension fund assets, health care cost trend rates for retiree benefits, the Province’s long-term cost of borrowing, and other economic conditions. Uncertainty exists in the liabilities for contaminated sites of $413.0 million (2020 – $398.9 million), see Note 9, because the actual nature and extent of the remediation activities, methods, and site contamination may differ significantly from the Province’s anticipated remediation plans. The net book value of tangible capital assets of $7.13 billion (2020 – $6.37 billion), see Schedule 7, is subject to uncertainty because of differences between estimated useful lives of the assets and their actual useful lives. Other areas requiring the use of management estimates include allowances for doubtful accounts and the valuation of loans receivable and investments.

 


 

Notes to the Consolidated Financial Statements

 

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

1. Financial Reporting and Accounting Policies (continued)

 

  (f)

Future Changes in Accounting Standards

The Public Sector Accounting Board (PSAB) has issued the following new accounting standards effective April 1, 2022:

 

   

PS 1201 Financial Statement Presentation replaces PS 1200 with general reporting principles for disclosure of information and is effective in the period PS 2601 and PS 3450 are adopted

 

   

PS 2601 Foreign Currency Translation replaces PS 2600 with revised accounting and reporting principles for transactions that are denominated in a foreign currency

 

   

PS 3041 Portfolio Investments replaces PS 3040 with revised accounting and reporting principles for portfolio investments and is effective in the period PS 2601 and PS 3450 are adopted

 

   

PS 3280 Asset Retirement Obligations defines and provides guidance for accounting and reporting retirement obligations associated with tangible capital assets and includes the withdrawal of PS 3270 Solid Waste Landfill Closure and Post-Closure Liability

 

   

PS 3450 Financial Instruments defines and provides guidance for accounting and reporting all types of financial instruments including derivatives

PSAB has also issued the following new accounting standards effective April 1, 2023:

 

   

PS 3160 Public Private Partnerships provides guidance on the accounting, measurement, and disclosure of infrastructure assets and related liabilities where the government procures the assets using a private sector partner

 

   

PS 3400 Revenue provides guidance on the accounting and reporting of revenue from exchange and non-exchange transactions

These new accounting standards have not been applied in preparing these consolidated financial statements. The Province does not expect PS 3160 to have a significant impact on the current accounting and disclosures of public private partnerships. The Province is currently assessing the impact of the other standards, and the extent of the impact of their adoption on the consolidated financial statements has not yet been fully determined.

2. Restricted Assets

As at March 31, 2021, assets of $106.3 million (2020 – $101.2 million) were designated for restricted purposes by parties external to the Province. Restricted cash and short-term investments totaled $33.7 million (2020 – $30.3 million), comprised of: $26.1 million for Nova Scotia Health Authority (NSHA) Centre for Clinical Research (2020 – $20.8 million), $4.5 million for gas market development as part of the Nova Scotia Market Development Initiative Fund (2020 – $4.4 million), $2.0 million for endowment and scholarship funds (2020 – $2.3 million), and $1.1 million for various other purposes (2020 – $2.8 million).

Restricted investments totaled $72.6 million (2020 – $70.9 million), comprised of: $50.2 million for NSHA Centre for Clinical Research and other purposes (2020 – $49.3 million), and $22.4 million for endowment funds (2020 – $21.6 million).

Externally restricted inflows not spent by year-end create a liability that will be settled by using the restricted assets for their intended purposes. The restricted assets described in this note are segregated from other assets and will be used as prescribed in a future period.

 

 

    

    

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Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

3. Deferred Revenue

 

($ thousands)    2021      2020  

Canada-Nova Scotia Emergency Treatment Fund

     1,455        2,183  

Canada-Nova Scotia Home and Community Care and Mental Health and Addictions Services Funding Agreement

     4,600        4,549  

Canada-Nova Scotia Workforce Development Agreement

     11,348         

Cape Breton-Victoria Regional Centre for Education

     2,181        2,288  

Chignecto Central Regional Centre for Education

     1,193        1,297  

Conseil scolaire acadien provincial

     3,259        2,487  

Develop Nova Scotia

     2,920        2,698  

Federal Gas Tax Fund

     3,239        2,896  

Halifax Regional Centre for Education

     4,771        5,400  

Housing Nova Scotia – Social Housing Agreement and Other Federal Funding

     65,733        53,013  

Izaak Walton Killam Health Centre – Capital, Research, and Other Restricted Funds

     30,913        28,185  

Nova Scotia Community College

     30,762        26,701  

Nova Scotia Health Authority – Capital, Research, and Other Restricted Funds

     76,320        70,107  

Nova Scotia Market Development Initiative Fund

     1,076         

Perennia Food & Agriculture Incorporated

     93        4,781  

Public Archives of Nova Scotia

     2,404        2,422  

Resource Recovery Fund Board Inc. – Unearned Revenue from Container Deposits, Paint Levies, and Tire Deposits

     22,284        21,893  

Seniors Pharmacare

     6,234        8,205  

Other Externally Restricted Funds

     8,623        8,893  

Total Deferred Revenue

         279,408          247,998  

4. Pension, Retirement and Other Obligations

The Province offers its employees a variety of pension and other retirement, post-employment, compensated absences (accumulated sick leave), and special termination benefits. Most plans are unfunded and are economically dependent on the Province. Except as otherwise noted, the cost of benefits is recognized in the periods the employee provides service. For benefits that do not vest or accumulate, a liability is recognized when an event that obligates the Province to pay benefits occurs.

 

  (a)

Description of Obligations

Pension Benefit Plans

The Province participates in multiple funded pension plans. The Nova Scotia Public Service Superannuation Plan (PSSP) and the Nova Scotia Teachers’ Pension Plan (TPP) are defined benefit plans with plan assets primarily composed of Canadian and foreign equities, government and corporate bonds, debentures, secured mortgages, and real estate. The plans are jointly funded with contributions from employees being matched by the Province. Benefits paid upon retirement are based on an employee’s length of service, rate of pay, and inflation adjustments.

Since April 1, 2013, the PSSP operates under a joint governance structure whereby the Minister of Finance and Treasury Board transferred responsibility of the PSSP to the Public Service Superannuation Plan Trustee Inc. (PSSPTI), the new trustee of the PSSP. PSSPTI is a body corporate comprised of 13 board members – six represent the Province as the employer, six

 


Notes to the Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

4. Pension, Retirement and Other Obligations (continued)

represent the employees, and an independent chairperson. Due to this transfer and the changes made to the Public Service Superannuation Act effective April 1, 2013, the Province no longer has any residual liability for the PSSP and therefore does not record PSSP assets or liabilities in these consolidated financial statements. The Province’s pension expense for the PSSP is limited to the employer contributions paid to the PSSP, which are equal to the employee contributions. The contribution rate is set by PSSPTI pursuant to the legislated funding policy and is set for a five- year cycle.

As at March 31, 2021, the PSSP was 97.6 per cent funded. Based on the PSSP’s funded health, indexing of 0.85 per cent per year was previously approved for the period of January 1, 2016 to December 31, 2020 and no changes to member and employer plan contributions were made. The most recent funded health review for the five-year cycle starting January 1, 2021 and ending December 31, 2025 was completed in 2019-20. As at December 31, 2019, the funded ratio was 98.5 per cent, below 100.0 per cent; therefore, no indexing will be paid during the current five- year cycle, and no changes to member and employer plan contributions were made. The Province’s contributions to the PSSP in 2021 were $92.3 million (2020 – $88.7 million).

On April 1, 2006, the Minister of Finance and Treasury Board transferred responsibility for the governance of the TPP to the Teachers’ Pension Plan Trustee Inc. (TPPTI). TPPTI is a body corporate comprised of nine board members – four nominated by the Nova Scotia Teachers’ Union (NSTU), four nominated by the Province, and one Chair agreed to by both parties. Under a joint governance structure, the Province and NSTU membership equally share all surpluses and deficits of the plan. The Province accounts for one-half of all components of the accrued benefit liability associated with this plan in these consolidated financial statements. In addition, the Province recognizes one-half of the components associated with the net benefit plan expense associated with this plan. As at March 31, 2021, the total accrued benefit liability associated with this plan was $897.3 million (2020 – $804.0 million).

As at December 31, 2020, the TPP was 79.0 per cent funded. The TPP Regulations stipulate that when the most recent actuarial valuation shows an actuarial deficit of more than 10.0 per cent, no indexing shall be provided to those pensioners under the variable indexing provision (those who retired on or after August 1, 2006, and those who retired prior to August 1, 2006 but elected to participate in the variable indexing provision). In accordance with Regulation 27C(1), the Province contributed an additional $20.7 million to the TPP in 2021 (2020 – $23.3 million) based on the present value of the forgone indexing as determined by the TPP’s actuary. The Province’s total contributions to the TPP in 2021 were $128.3 million (2020 – $129.6 million).

During the year, the weighted average actual rate of return on TPP plan assets was 17.8 per cent (2020 – -2.5 per cent). The total market value of plan assets at March 31, 2021 was $5.5 billion (2020 – $4.9 billion). The liability recorded in 2021 for the TPP was based on the most recent actuarial valuation performed at December 31, 2019, extrapolated to March 31, 2021.

Another one of the Province’s significant funded pension plans is the Nova Scotia Health Employees’ Pension Plan (NSHEPP), a multiemployer defined benefit pension plan, funded by employer and employee contributions. As at December 31, 2020, the NSHEPP was 126.0 per cent funded. As the Province does not sponsor this plan, the annual net benefit plan expense is the amount of required contributions provided for employees’ services rendered during the year. The accrued benefit asset (liability) of this plan is not recognized in these consolidated financial statements. The most recent actuarial valuation was performed on July 1, 2020 and extrapolated to December 31, 2020, which indicated a funding surplus of $2.2 billion (2020 – $2.1 billion). The Province’s contributions to this plan in 2021 were $117.1 million (2020 – $109.7 million).

 

 

 

    

    

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Notes to the Consolidated Financial Statements

As at March 31, 2021

 

4. Pension, Retirement and Other Obligations (continued)

The Province is also responsible for the Pension Plan for the Non-Teaching Employees of the Nova Scotia Education Entities, which provides pension benefits to the non-teaching employees of the participating Regional Centres for Education (RCEs) and the Conseil scolaire acadien provincial (CSAP). The Province fully accounts for the accrued benefit asset and net benefit plan expense of this plan. The most recent actuarial valuation was performed on December 31, 2019 and extrapolated to March 31, 2021. As at December 31, 2019, the plan was 108.2 per cent funded, and the total market value of the plan assets at March 31, 2021 was $206.2 million (2020 – $170.4 million). Employer contributions in 2021 were $5.6 million (2020 – $5.2 million).

The Province has several other unfunded defined benefit pension plans. The liabilities for these other plans recorded in 2021 were based on the most recent actuarial valuations performed between December 31, 2018 and September 30, 2020 and extrapolated to March 31, 2021.

Retirement Allowances

The Province sponsors retirement allowance plans for which benefits are paid upon retirement based on an employee’s length of service and rate of pay. The Province discontinued its retirement allowance plans for unionized staff and non-union civil servant/management employees on April 1, 2015 and August 11, 2015 (discontinuation dates), respectively, and no new members will be admitted into the plans. Effective April 1, 2020, service accumulation was discontinued for public service awards for those entitled to receive a service award under the Public Service Award Regulations made under the Provincial Court Act. An early service award pay-out has not yet been communicated to those eligible. The payment of any remaining retirement allowances will be deferred until retirement and calculated based on accumulated service as of the respective discontinuation dates, or as of the first day of a new collective agreement for those contracts expiring after that date, and salary upon retirement.

The liabilities for these retirement allowance plans recorded in 2021 were based on the most recent actuarial valuations performed between March 31, 2018 and October 31, 2020 and extrapolated to March 31, 2021.

Post-Employment Benefits

The Province sponsors two unfunded post-employment benefit plans: a Self-Insured Workers’ Compensation Plan and retirement health benefits, some of which contain a life insurance provision. Retirement health benefits vary depending on the collective agreements negotiated with each group. The Province pays 65.0 per cent and 100.0 per cent of the cost of retirement health benefits for the PSSP and TPP retirees, respectively.

For the Self-Insured Workers’ Compensation Plan, the amount recorded in these consolidated financial statements represents the actual amount of benefits paid during the year plus the actuarial estimate of future payments based on claims ongoing at year-end.

The liabilities for these post-employment benefit plans recorded in 2021 were based on the most recent actuarial valuations performed between December 31, 2019 and March 31, 2021 and extrapolated to March 31, 2021.

 


Notes to the Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

4. Pension, Retirement and Other Obligations (continued)

The Province also participates in the Nova Scotia Public Service Long Term Disability Plan (LTD Plan). The Province has no residual responsibility to the LTD Plan for any shortfalls in funding. As a result, the Province does not account for any net position of the LTD Plan in these consolidated financial statements. The LTD Plan is managed and administered, under joint trusteeship, by a Board of Trustees appointed by the two plan sponsors: five nominated by the Province, five nominated by the Nova Scotia Government and General Employees Union (NSGEU), and one Chair agreed to by both sponsors. The LTD Plan is funded equally by employer and employee contributions and all liability for benefits resides exclusively with the LTD Plan’s trust fund. The most recent actuarial valuation was performed at December 31, 2020 and indicated a funded ratio of 150.0 per cent. The Province’s contributions to this plan in 2021 were $7.5 million (2020 – $7.4 million).

Accumulated Sick Leave Benefits

The Province’s RCEs and CSAP, health authorities, and Nova Scotia Community College (NSCC) have collective agreements containing sick leave provisions that accumulate but do not vest. The Province must measure and record a liability associated with the accumulated sick leave benefits (ASLBs) anticipated to be used in future years. The Province’s ASLBs are unfunded, meaning there are no assets set aside to cover the related costs of these benefits in the future.

Due to the nature of these benefits, a liability and expense are measured using actuarial valuations to estimate their financial value. An actuarial assumption must be developed to reflect the probability of employees actually using ASLB “banked days”. This involves a detailed analysis of several years of data to determine historical usage. A historical usage pattern is not based on the data group as a whole but must take into account a number of specific factors such as, but not limited to, gender, age, and type of contract or job functions, each of which may impact the anticipated amount of accumulated sick leave time to be taken in the future. As a result, the anticipated usage assumption may involve a number of criteria and circumstances that then must be applied to the data in coordination with other actuarial assumptions such as the discount rate, retirement age assumptions, future salary increases, mortality rates, etc. The liabilities for ASLBs recorded in 2021 were based on the most recent actuarial valuations performed between March 31, 2018 and August 15, 2020 and extrapolated to March 31, 2021.

Special Termination Benefits

The Province offered early retirement incentive programs to members of the PSSP and TPP in 1986 and 1994, respectively. Qualified members were offered additional years of pensionable service if they elected to retire early. The cost of these benefits was accrued in the year the employee accepted the early retirement option and continue to be calculated using actuarial valuations.

The liabilities for these termination benefits recorded in 2021 were based on the most recent actuarial valuations performed at December 31, 2018 and extrapolated to March 31, 2021.

 

 

    

    

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Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

4. Pension, Retirement and Other Obligations (continued)

 

  (b)

Summary of Balances at Year-End

($ thousands)                  2021          2020  
     Pension 
Benefits 
    Other 
Benefits 
    Total          Total  
                               

Projected Benefit Obligation,

           

    Beginning of Year

     3,932,842       1,846,380       5,779,222          5,722,671  

Current Benefit Cost

     90,610       89,983       180,593          165,150  

Interest Cost

     222,497       58,240       280,737          284,367  

Actuarial Losses (Gains)

     225,637       (157,312     68,325          (71,723

Benefit/Premium Payments

     (251,029     (66,915     (317,944)          (323,503

Other

     1,822       (294     1,528          2,023  

Curtailment

           50       50           

Plan Settlement

                          237  

Projected Benefit Obligation,

                                   

    End of Year

         4,222,379           1,770,132           5,992,511              5,779,222  

Market Related Value of Plan Assets,

           

    Beginning of Year

     2,868,270             2,868,270          2,842,309  

Expected Return on Plan Assets

     161,161             161,161          175,149  

Actuarial Gains (Losses)

     21,716             21,716          (68,251

Benefit Payments

     (251,029           (251,029        (248,384

Other

     1,302             1,302          1,270  

Employer Contributions

     105,783             105,783          105,841  

Employee Contributions

     61,680             61,680          60,336  

Market Related Value of Plan Assets,

                             

    End of Year

     2,968,883             2,968,883          2,868,270  

Net Benefit Plans Deficiency, End of Year

     1,253,496       1,770,132       3,023,628          2,910,952  

Unamortized Net Actuarial Gains (Losses)

     (386,526     166,772       (219,754        (216,623

Accrued Benefit Liability,

                                   

    End of Year

     866,970       1,936,904       2,803,874          2,694,329  
 


Notes to the Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

4. Pension, Retirement and Other Obligations (continued)

 

  (c)

Actuarial Assumptions

Below are the significant assumptions used to measure the Province’s benefit plan obligations.

 

    2021          2020  
    Pension
Benefits
     Other
Benefits
         Pension
Benefits
     Other
Benefits
 

Long-term inflation rate

    2.00%        2.00%          2.00%        2.00%  

Expected real rate of return on plan assets:

            

TPP

    3.68%             4.26%     

Rate of compensation increase

   
1.5% - 2.0%
+ merit
 
 
    
1.5% - 2.0%
+ merit
 
 
      
2.0% - 2.5%
+ merit
 
 
    
2.0% - 2.5%
+ merit
 
 

Discount rates:

            

TPP

    5.75%             6.35%     

Other Plans

             3.01%                   3.24%  

Other assumptions

 

   

7.0 per cent annual rate increase in the cost per person of covered health care benefits for 2020-21, decreasing to an ultimate rate of 4.0 per cent per annum over 20 years

 

   

7.0 per cent annual rate increase in the cost per person of covered prescription drugs for 2020-21, decreasing to an ultimate rate of 4.0 per cent per annum over 20 years

Actuarial assumptions are reviewed and assessed on an annual basis to ensure that they take into account various changing conditions and reflect the Province’s best estimate of performance over the long term.

The net unamortized actuarial gains (losses) are amortized on a straight-line basis over the expected average remaining service life (EARSL) of the related employee groups ranging from 5.0 to 18.0 years. The Province’s weighted-average EARSL is 15.0 years.

 

  (d)

Sensitivity Analysis

Changes in actuarial assumptions can result in significantly different estimates of the projected benefit obligations. The table below indicates the possible changes to these obligations for the more significant benefit plans as a result of slightly different key actuarial assumptions.

 

($ thousands)                                      2021
          

Pension

Benefits

          

Other

Benefits

           Total

Possible change in obligations due to:

           

a) Discount Rate – 0.5% Decrease

    249,874       6.3%       181,571       10.4%       431,445     7.6%

b) Salary Growth Rate – 1.0% Increase

    143,555       3.6%       13,999       0.8%       157,554     2.8%

c) Health Care Cost Trend Rate – 1.0% Increase

    n/a       n/a       375,265       21.5%       375,265     6.6%

The above sensitivity analyses are based on a change in one assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the projected benefit obligations to significant actuarial assumptions, the same method was applied as when calculating the projected benefit obligations recognized on the statement of financial position.

 

 

    

    

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Public Accounts Volume 1 — Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

4. Pension, Retirement and Other Obligations (continued)

 

  (e)

Net Benefit Plans Expense

The table below shows the components of the net benefit plans expense.

($ thousands)                  2021           2020  
    

Pension 

Benefits 

   

Other 

Benefits 

    Total            Total  

Current Benefit Cost

     90,610       89,983     180,593         165,150  

Employee Contributions

     (61,680         (61,680)         (60,346

Employer Contributions *

     64,161           64,161         64,796  

Plan Settlement

                       237  

Loss on Curtailment

           50     50          

Amortization of Net Actuarial

            

Losses (Gains)

     45,840       (1,623   44,217         42,890  

Recognition of Actuarial Losses (Gains) on Settlement

           (711   (711)         (204

Other

     33       (599   (566)         (7

Interest Cost

     222,497       58,240     280,737         284,367  

Expected Return on Plan Assets

     (161,161         (161,161)         (175,149

Employer Contributions to

            

    Multi-Employer Plans

     209,415       7,465     216,880         205,896  

Net Benefit Plans Expense

         409,715           152,805         562,520             527,630  

Recorded as:

            

Fringe Benefits Expense

     323,626       58,252     381,878         367,973  

Pension Valuation Adjustment

     24,753       36,313     61,066         50,439  

Net Pension Interest Cost

     61,336       58,240     119,576         109,218  

Net Benefit Plans Expense

     409,715       152,805     562,520         527,630  

 

  *

This represents one-half of the employer contributions made by the Province to the TPP. Included in the figures above are one-half of all transactions associated with the TPP to reflect the Province’s share of this plan under joint trusteeship.

 


Notes to the Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

5. Prior Years’ Adjustments (PYAs)

PYAs resulting from measurement uncertainty reflect updates to the Province’s forecasts and revisions to information obtained from the federal government relating to prior years. The current year revenues and corresponding PYAs are reported on Schedule 1 as follows:

 

($ thousands)                    2021                           2020  
     Current      PYA      Total             Current      PYA    Total  

Provincial Sources

                    

Personal Income Tax

     2,928,319        (45,859)        2,882,460           2,890,224      87,672       2,977,896  

Corporate Income Tax

     410,906        (94,999)        315,907           537,865      (62,240)      475,625  

Harmonized Sales Tax

     1,901,013        (64,120)        1,836,893           1,936,772      107,940       2,044,712  

Petroleum Royalties

            38,794        38,794                7,813       7,813  

Preferred Share Dividend 1

     14,417               14,417           3,777      7,475       11,252  

Large Corporations Tax 1

                                  (49)      (49)  
        (166,184)               148,611    

Federal Sources

                    

Canada Health Transfer

     1,078,379        (1,828)        1,076,551           1,043,370      (367)      1,043,003  

Canada Social Transfer

     386,932        (661)        386,271           376,945      (135)      376,810  
        (2,489)               (502)   

 

  1

Included in Other Tax Revenue on Schedule 1

6. Debt Servicing Costs

 

($ thousands)    2021      2020  

CDN$ Denominated Debt

     610,001         692,897  

Pension, Retirement and Other Obligations

     119,576         109,218  

Capital Leases

     9,525         11,247  

Other Debt

     7,073         22,112  

Amortization of Premiums and Discounts on Unmatured Debt

     (5,982)        (1,156

Amortization of Foreign Exchange Gains

     (6,041)        (6,995

Total Debt Servicing Costs

                 734,152                    827,323  

For the year ended March 31, 2021, total debt servicing costs for the Province’s government business enterprises were $9.4 million (2020 – $10.4 million).

7. Expenses by Object

 

($ thousands)    2021      2020  

Grants and Subsidies

     4,656,001        4,286,537  

Salaries and Employee Benefits

     4,506,731        4,381,405  

Operating Goods and Services

     1,901,670        1,986,696  

Professional Services

     382,361        356,519  

Amortization

     442,190        440,228  

Debt Servicing Costs

     734,152        827,323  

Other

     4,357        2,848  

Total Expenses by Object

            12,627,462               12,281,556  

 

 

    

    

 

 

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Public Accounts Volume 1 — Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

8. Cash Flow — Net Change in Other Items

 

($ thousands)    2021              2020  

Decrease (Increase) in Receivables from Government

     

Business Enterprises

     4,537        (41,900)  

Decrease (Increase) in Accounts Receivable

             96,775         (96,596)  

Increase in Inventories for Resale

     (318)        (359)  

Increase (Decrease) in Bank Advances and Short-Term Borrowings

     (75,189)        197,585  

Increase (Decrease) in Accounts Payable and Accrued Liabilities

     240,072        (178,013)  

Increase in Deferred Revenue

     31,410        27,101  

Increase (Decrease) in Accrued Interest

     7,639        (27,985)  

Increase in Pension, Retirement and Other Obligations

     109,545        76,747  

Increase in Liabilities for Contaminated Sites

     14,069        26,794  

Increase in Inventories of Supplies

     (60,979)        (9,495)  

Decrease (Increase) in Prepaid Expenses

     5,205        (19,499)  

Total Net Change in Other Items

     372,766        (45,620)  

9.  Liabilities for Contaminated Sites

Various provincially owned sites throughout the province are known to be or at risk of being contaminated. Studies are ongoing to assess the nature and extent of damage to develop remediation plans. Provisions for these costs are recorded when it is determined a liability exists and a reasonable estimate of the remediation costs can be made. As at March 31, 2021, a total liability for contaminated sites of $413.0 million (2020 – $398.9 million) has been recorded in these consolidated financial statements.

The Province’s estimates for remediation are based on environmental studies, engineering reports, and if appropriate, extrapolation techniques similar to those used for other contaminated sites with which the Province was involved. These estimates have been measured on an undiscounted basis. As at March 31, 2021, the Province has identified and continues to track approximately 133 sites in total. Of these, 42 were identified as sites where action is likely and for which a liability was recorded, including the following:

Boat Harbour in Pictou County

As at March 31, 2021, a liability of $274.5 million (2020 – $260.1 million) has been recognized for the remediation of effluent on site. At this stage in the process, the Province continues to test and refine its current remediation strategy, and as a result, there is still significant measurement uncertainty related to this estimate. A comprehensive remediation plan is under review by the federal regulator, and an approval decision is pending.

The federal government has committed to reimbursing the Province for up to $100.0 million in eligible remediation costs incurred on this project. This federal commitment has not been reflected as part of the Boat Harbour remediation liability but has been disclosed as a contractual right in Note 10(e) and is expected to result in revenue in future periods as the remediation is completed.

 


Notes to the Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

9. Liabilities for Contaminated Sites (continued)

Sydney Steel Corporation (SYSCO) and Adjacent Sites including the Sydney Tar Ponds/Coke Ovens site As at March 31, 2021, a liability of $59.6 million (2020 – $63.5 million) has been recognized for future decommissioning, demolition, and remediation of SYSCO’s and adjacent sites, including the long-term maintenance and monitoring of the Sydney Tar Ponds/Coke Ovens site expected until 2039.

Abandoned Mine Sites

The Province is responsible for the risk management and potential remediation of certain historic abandoned mines that exist on Crown land. For most of these mine sites, the companies that caused the contamination no longer exist. The mining operations were primarily comprised of gold and other metals, coal, gypsum, and limestone. The risk of contamination at these sites primarily comes from mine tailings and other possible contaminants that were left on site.

The Province has identified two former gold mine sites where contamination is known to exceed an environmental standard. A liability of $59.5 million (2020 – $47.9 million) has been recognized for these sites. In addition, the Province will be providing notification in accordance with the Contaminated Sites Regulations regarding contamination on eight historic gold mining sites on Crown lands where contamination is expected to exceed an environmental standard. The Province has also identified other abandoned mine sites where contamination is expected to exceed an environmental standard but where additional investigation is necessary before providing notification. While remediation may be required in the future, no liability has been recognized for these other sites as further testing and evaluation is required to determine the extent of contamination and possible site management options. If remediation activities are required for these sites, a liability will be recorded when the extent becomes measurable.

For the remaining 83 identified sites, 59 of which are additional abandoned mine sites, no liability for remediation has been recorded either because they have a minimal risk of requiring future remediation or the extent of contamination and possible remediation activities is unknown. They are at various stages of evaluation, and studies will continue to assess the nature and extent of contamination to develop remediation plans and record a liability, if necessary. For the sites with minimal contamination, the Province does not expect to give up any future economic benefits as there is likely no significant environmental impact or risks to human health.

10. Contingencies and Contractual Obligations/Rights

 

  (a)

Contingent Liabilities

Lawsuits

The Province is involved in various legal proceedings arising from government activities. These disputes have resulted from breaches of contract, damages suffered by individuals or property, and related elements. These claims include items with pleading amounts and items where an amount is not specified. While the total amount claimed in these actions may be significant, their outcomes are not certain.

When a loss due to a lawsuit is likely to occur and the amount can be reasonably estimated, the amount is recorded as an accrued liability and an expense. The accrued liability for pending litigation in process as at March 31, 2021 was $101.8 million (2020 – $106.9 million).

 

 

    

    

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Public Accounts Volume 1 — Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

10. Contingencies and Contractual Obligations/Rights (continued)

Guarantees

Guarantees by the Province are authorized by various acts of legislature and provided through specific agreements and programs to repay promissory notes, bank loans, lines of credit, mortgages, and other securities. Provisions for losses on guarantees are recorded when it is likely that a loss will occur. The amount of the loss provisions represents the Province’s best estimate of future payments. Estimates take into consideration the nature of the loan guarantees, loss experience, and current conditions. The provisions are reviewed on an ongoing basis and changes in the provisions are recorded as expenses in the year they become known. Details on guarantees authorized, utilized, and accrued are presented in Schedule 8.

Other Contingent Liabilities

The Province also has contingent liabilities in the form of indemnities. The Province’s potential liability, if any, cannot be determined at this time.

 

  (b)

Contingent Gains

The Province may receive funds in the future from recoveries of various types of claims paid out and other agreements pending the occurrence of certain events. Recoveries are recorded once the contingent events occur, are measurable, and collectability is reasonably assured.

 

  (c)

Contractual Obligations

As at March 31, 2021, the Province had contractual obligations as follows:

 

($ thousands)           Government      Total  
     Governmental      Business      Contractual  
Fiscal Year    Units      Enterprises      Obligations  

2022

     1,837,998        3,244        1,841,242  

2023

     1,370,146        1,687        1,371,833  

2024

     1,205,566        1,607        1,207,173  

2025

     650,232        1,604        651,836  

2026

     1,475,544        1,604        1,477,148  

2027 to 2031

     2,102,526               2,102,526  

2032 to 2036

     675,850               675,850  

2037 to 2041

     323,252               323,252  

2042 and thereafter

     114,528               114,528  
     9,755,642        9,746        9,765,388  

These contractual obligations are comprised of $9,410.8 million from the General Revenue Fund, $344.9 million from the Province’s governmental units, and $9.7 million from the government business enterprises. Included are contractual obligations for the Department of Health and Wellness of $3,640.5 million for service agreements with long-term care facilities, $1,729.1 million for the Department of Justice for the Royal Canadian Mounted Police (RCMP) policing services, $1,149.9 million for Assistance to Universities relating to post-secondary operating grants, $849.4 million for the Department of Transportation and Infrastructure Renewal (TIR) for future commitments related to P3 arrangements ($432.7 million for the capital portion and $416.7 million for the operating and maintenance portion), $210.6 million for TIR for various school, health, and other construction projects, $177.6 million for the Department of Municipal Affairs and Housing (MAH) for future commitments associated with the Federal Gas Tax transfer, $172.8 million for MAH for various funding commitments under the Investing in Canada Infrastructure Program, and $108.4 million for the Halifax Regional Centre for Education mostly for transportation services.

 


 

Notes to the Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

10. Contingencies and Contractual Obligations/Rights (continued)

 

  (d)

Operating Leases

As at March 31, 2021, the Province was contractually obligated under various operating leases. Future minimum annual lease payments were as follows:

 

($ thousands)           Government      Total  
     Governmental      Business      Lease  
Fiscal Year    Units      Enterprises          Payments  

2022

     88,843        51        88,894  

2023

     77,766        51        77,817  

2024

     63,916        52        63,968  

2025

     54,121        35        54,156  

2026

     41,783               41,783  

2027 to 2031

     77,461               77,461  

2032 to 2036

     14,239               14,239  

2037 to 2041

     14,555               14,555  

2042 and thereafter

     5,776               5,776  
     438,460        189        438,649  

 

  (e)

Contractual Rights

As at March 31, 2021, the Province had contractual rights as follows:

 

($ thousands)           Government      Total  
     Governmental      Business      Contractual  
Fiscal Year    Units      Enterprises      Rights  

2022

     520,069               520,069  

2023

     358,179               358,179  

2024

     203,390               203,390  

2025

     104,454               104,454  

2026

     92,913               92,913  

2027 to 2031

     131,371               131,371  

2032 to 2036

     2,381               2,381  

2037 to 2041

     2,381               2,381  

2042 and thereafter

     913               913  
     1,416,051               1,416,051  

These contractual rights are comprised of $369.4 million for the Department of Transportation and Infrastructure Renewal for various federal funding programs, including $100.0 million for the reimbursement of remediation costs associated with the Boat Harbour site in Pictou County as described in Note 9. Other contractual rights include $224.4 million for Housing Nova Scotia for federal funding initiatives under the National Housing Strategy, $177.6 million for the Department of Municipal Affairs and Housing for the Federal Gas Tax transfer, $145.2 million for the Department of Education and Early Childhood Development for Early Learning and Child Care programs and other federal funding programs, and $125.6 million for the Department of Health and Wellness for various federal funding programs.

 

 

    

    

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Public Accounts Volume 1 — Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

11. Risk Management and Use of Derivative Financial Instruments

As a result of borrowing in both Canadian and foreign financial markets and being a party to financial instruments, the Province is exposed to interest rate risk, credit risk, liquidity risk, and foreign exchange risk. The Province employs various risk management strategies and operates within fixed risk exposure limits to ensure exposure to risk is managed in a prudent and cost effective manner. A variety of strategies are used, including the use of derivative financial instruments (derivatives). Derivatives are financial contracts, the value of which is derived from underlying instruments. The Province uses derivatives to hedge and to mitigate foreign exchange risk and interest rate risk. The Province does not use derivatives for speculative purposes.

Interest rate risk

Interest rate risk is the risk that debt servicing costs will vary unfavourably due to fluctuations in interest rates. To reduce its exposure to interest rate risk, the Province uses derivatives to manage the fixed and floating interest rate mix of its debt portfolio. Interest rate contracts include swap agreements and options on swaps. These contracts are used to vary the amounts and periods for which interest rates on borrowings are fixed or floating.

As at March 31, 2021, the Province had executed 36 interest rate swap contracts to convert certain interest payments from fixed to floating and from floating to fixed. These swaps have terms remaining of 0.2 years to 14.3 years, a notional principal value of $1.0 billion, and a mark to market value of -$7.0 million. A one per cent increase or decrease in interest rates would result in a $5.9 million increase or decrease in debt servicing costs on floating financial instruments outstanding at the end of the fiscal year.

Credit risk

Credit risk is the risk that a counterparty will default on its contractual obligations. The Province manages its credit risk exposure from derivatives by, among other activities, dealing only with high credit quality counterparties and regularly monitoring compliance to credit limits. The Province’s policy requires that a minimum credit rating for counterparties to derivative transactions be “A–” with a stable outlook as determined by the major credit rating agencies.

Liquidity risk

Liquidity risk is the risk that the Province will not be able to meet its financial commitments over the short term. To reduce liquidity risk, the Province maintains liquid reserves (cash and cash equivalents) at levels that will meet future cash requirements and will give the Province flexibility in the timing of issuing debt. In addition, the Province has a short-term note program, uncommitted bank lines, and discretionary sinking funds as alternative sources of liquidity. This risk is also managed by distributing debt maturities over many years and having up to 50.0 per cent of long- term debt with a maturity of over 15.0 years.

Foreign exchange risk

Foreign exchange risk is the risk that the cash flows needed to repay the interest and principal on loans in foreign currencies will vary unfavourably due to fluctuations in foreign exchange rates. To manage this risk, the Province uses derivative contracts to convert foreign currency principal and interest payments into Canadian dollar denominated cash flows. Derivative contracts hedge the underlying debt by matching the critical terms to achieve effectiveness. Foreign exchange contracts include swap agreements that are used to convert the liability for foreign currency borrowing and associated costs into Canadian dollars.

 


 

Notes to the Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

11. Risk Management and Use of Derivative Financial Instruments (continued)

The Province has currency swap contracts that convert foreign denominated debt into Canadian dollar-denominated debt as follows:

($ thousands)                                   

Maturity

Date

   Original
Currency
     Original
        Principal
     Current
            Currency
     Current
        Principal
     Mark to
        Market 1
 

May 1, 2021

     US$        300,000        CON$        312,002        55,299  

April 1, 2022

     US$        300,000        CON$        379,517        4,265  

July 30, 2022

     US$        300,000        CON$        329,310        39,037  

Total

     US$        900,000        CON$        1,020,829        98,601  

 

  1 

-Mark to Market is an indication of the swap’s market value as at March 31, 2021. It is also the equivalent of the present value of future cash flows based on market conditions at March 31, 2021.

12. Trust Funds Under Administration

Trust fund assets solely administered by the Province are as follows:

($ thousands)

 

     2021      2020  

Nova Scotia Credit Union Deposit Insurance Corporation 1

     37,182        34,405  

Public Trustee 2

     58,677        54,450  

Miscellaneous Trusts 3

     34,110        25,984  

Total Trust Funds Under Administration

         129,969            114,839  

 

  1

- Represents trust with December 31 year-end

  2

- Financial statements of these funds are available in Public Accounts - Volume 2

  3

- Miscellaneous trusts include a large number of relatively small funds

Other

The Nova Scotia Teachers’ Union and the Province agreed to joint trusteeship of the Teachers’ Pension Plan (TPP) effective April 1, 2006. Under joint trusteeship, the trustee of the Plan is the Teachers’ Pension Plan Trustee Inc. (TPPTI), of which the Province appoints four of nine members. TPPTI is responsible for the administration of the trust fund and investment management of fund assets. The total net assets available for benefits as at December 31, 2020 were $5.5 billion (2019 – $5.4 billion).

Effective April 1, 2013, the Minister of Finance and Treasury Board transferred responsibility of the Public Service Superannuation Plan to a new trustee, Public Service Superannuation Plan Trustee Inc., of which the Province appoints six of 13 members. Due to this transfer and the changes made to the Public Service Superannuation Act effective April 1, 2013, the Province no longer has any responsibility for this plan. As at March 31, 2021, the total net assets available for benefits were $7.2 billion (2020 – $6.4 billion).

The Nova Scotia Public Service Long Term Disability Plan (LTD Plan) operates as a joint trusteeship between the Province and the Nova Scotia Government and General Employees Union (NSGEU), of which the Province appoints five of 11 trustees. The Trustees are responsible for the administration of the trust fund and investment management of fund assets, and all liability for benefits resides exclusively with the LTD Plan’s trust fund. The total net assets available for benefits as of December 31, 2020 were $174.3 million (2019 – $166.3 million).

 

 

    

    

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Public Accounts Volume 1 — Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

13. Related Party Transactions

Included in these consolidated financial statements are insignificant transactions with various provincial Crown corporations, agencies, boards, and commissions. Significant related party transactions have been eliminated for purposes of consolidated reporting. Parties are deemed to be related to the General Revenue Fund due to common control or ownership by the Province.

Related parties also include key management personnel having the authority and responsibility for planning, directing, and controlling the activities of the Province, their close family members, and any entities closely affiliated with these individuals. Key management personnel for the Province have been identified as the Premier, Cabinet Ministers, other MLAs appointed to Treasury and Policy Board, Deputy Ministers, Associate Deputy Ministers, and the senior leaders and Board members of the Province’s controlled entities. The Province may enter into transactions with these individuals and entities in the normal course of business measured at the exchange amount.

For the year ended March 31, 2021, there were no transactions to report between the Province and key management personnel, their close family members, or any entities affiliated with them at a price different than fair market value or under terms different than what two unrelated parties would agree to.

The most significant unadjusted related party transactions are described in more detail in Schedule 6 – Government Business Enterprises.

14. Contributed Services

Volunteers contribute a significant amount of their time each year to support the delivery of certain programs and services within the health and education sectors. The fair value of these contributed services is not readily determinable and, as such, they are not recognized in these consolidated financial statements.

15. Impact of COVID-19 Pandemic

As a result of the COVID-19 outbreak that was declared a pandemic on March 11, 2020, the Province has been operating under a provincial state of emergency through the release of these Public Accounts. Throughout the year, varying degrees of restrictions were in place, which were reflective of the public health conditions being experienced by the Province.

Operational Impact

The Province experienced considerable operational impacts due to COVID-19 including delays and deferrals in most non-urgent health care services and surgeries, clinic closures, and changes in employee absenteeism. Nova Scotia Health Authority (NSHA) and IWK Health Centre established COVID-19 assessment centers across the province, increasing virtual care, further enhancing lab testing capacities, ensuring personal protective equipment (PPE) supply was sufficient to meet demand, and coordinating vaccination clinics throughout the province. Mandatory screening protocols and visitor restrictions were also put into place across the province.

In addition, the Province developed the Back-to-School plan for the 2020-21 pre-primary to grade 12 school year, and students returned to in-class instruction in September 2020 under various protocols, including the extensive use of PPE by staff and students, and enhanced cleaning and ventilation checks. Subsequent to year-end, effective April 28, 2021, all schools in the province were temporarily closed and students moved to at-home virtual learning. The temporary closure ended on June 2, 2021, and students returned to in-class instruction for the remainder of the 2020-21 school year.

 


 

Notes to the Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

15. Impact of COVID-19 Pandemic (continued)

Government business enterprises were also significantly impacted. Nova Scotia Gaming Corporation (NSGC) ceased video lottery operations and closed its casinos on March 15, 2020. Video lottery operations began a gradual reopening June 6, 2020 and casinos reopened on October 5, 2020.

Intermittent regional and provincial disruptions continued to significantly impact NSGC’s financial performance during the year. The Nova Scotia Liquor Corporation experienced significant change in its operations, with reduced sales to restaurants and bars; however, sales to individuals out- performed budgeted estimates. Individuals made fewer visits to NSLC stores, but the average purchase was of higher value. Reduced travel also impacted toll revenue of both Highway 104 Western Alignment Corporation and Halifax-Dartmouth Bridge Commission resulting in decreased net income for both organizations.

Financial Impact

COVID-19 has caused significant volatility and thus increased measurement uncertainty related to the impacts of the virus. The effects of this pandemic will continue into the foreseeable future, and the Province continues to assess and monitor the effects on its financial condition. These consolidated financial statements include the financial impact of COVID-19 on the Province’s revenues, expenses, and tangible capital assets, summarized as follows:

 

($ thousands)    2021  

Revenue by Federal Initiative

  

Federal-Provincial Safe Restart Agreement

     289,526  

Essential Health Care Workers Program

     80,737  

Federal Safe Return to Class Funding for Primary-12

     47,880  

Workforce Development Agreement Recovery Efforts

     25,713  

Contributions of Personal Protective Equipment

     18,362  

Total COVID-19 Related Federal Revenue

     462,218  

Gross Expenses by Department

  

Health and Wellness

     391,747  

Municipal Affairs and Housing

     77,548  

Education and Early Childhood Development

     67,400  

Community Services

     55,531  

Labour and Advanced Education & Assistance to Universities

     51,544  

Other Departments

     53,961  

Total COVID-19 Related Gross Expenses

     697,731  

Total COVID-19 Related Tangible Capital Asset Spending

     242,020  

Inventory of Vaccines, Vaccination Supplies, and Personal Protective Equipment (PPE)

The Province received COVID-19 vaccines at no cost from the federal government in support of the vaccination roll-out plans. Due to confidentiality clauses embedded in contracts between the federal government and the various COVID-19 vaccine manufacturers, the federal government was not in a position to share information related to the price per dose of vaccines. Therefore, COVID-19 vaccines received from the federal government at no cost have not been reflected in these consolidated financial statements due to the difficulty in determining fair value. During the year, the Province received 186 thousand COVID-19 vaccines and held 70.2 thousand in inventory at March 31, 2021.

Certain vaccination supplies and PPE that were received from the federal government at no cost have been estimated and reflected in these consolidated financial statements using the average costs for similar materials. The recorded value of these vaccination supplies and PPE is $18.4 million.

 

 

    

    

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Public Accounts Volume 1 — Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2021

 

16. Subsequent Events

41st Provincial General Election

On July 17th, 2021, the Nova Scotia legislature was dissolved, and a general provincial election was called. The 41st provincial general election was held on Tuesday, August 17th, 2021. Members of the 64th Legislative Assembly of Nova Scotia were sworn in on Monday, August 30th, 2021. The Province’s new Executive Council was sworn in Tuesday, August 31st, 2021 forming a new majority government lead by the Progressive Conservative Party of Nova Scotia.

Federal-Provincial Agreement on Childcare

In July 2021, the Province entered into a $605.0 million funding agreement on childcare with the federal government. Federal funding will be provided over five years through the Canada-Nova Scotia Canada-Wide Early Learning and Child Care Agreements. The funding is contingent on the Province delivering on commitments consistent with the principles of the multilateral framework, such as to reduce fees for early learning and increase the number of childcare spaces.

Nova Scotia Innovation Corporation Gain

In July 2021, Nova Scotia Innovation Corporation realized a $101.0 million gain on the disposition of an investment.

Nova Scotia Health Authority Board Dissolved

On September 1, 2021, the Board of the Nova Scotia Health Authority (NSHA) was dissolved. NSHA is now led by a team of four two representatives of NSHA and two representatives from the Province. The two representatives from NSHA are the Chief Executive Officer (CEO) and the Administrator. Representing the Province are the Deputy Minister of Health and Wellness and the CEO of the Office of Health Care Professionals Recruitment.

17. Comparative Figures

Certain of the prior year’s figures have been reclassified to conform to the presentation format adopted in the current year.

 


Schedules to the Consolidated Financial Statements

Schedule 1

Province of Nova Scotia

Revenue

For the fiscal year ended March 31, 2021

($ thousands)

 

 

     2021                     2020  

Provincial Sources

    

Tax Revenue

    

Personal Income Tax *

     2,882,460       2,977,896  

Corporate Income Tax *

     315,907       475,625  

Harmonized Sales Tax *

     1,836,893       2,044,712  

Tobacco Tax

     208,002       183,035  

Motive Fuel Tax

     223,787       266,539  

Cannabis and Vaping Product Tax

     9,241       7,341  

Other Tax Revenue *

     188,241       208,047  
     5,664,531       6,163,195  

Other Provincial Revenue

    

Recoveries

     416,687       443,828  

Other Revenue of Governmental Units

     411,709       471,217  

Municipal Contributions to Regional Centres for Education

     282,826       274,639  

Petroleum Royalties *

     38,794       7,813  

Offshore License Forfeitures

     2,000       1,000  

Registry of Motor Vehicles

     137,128       135,023  

Other Government Charges

     50,261       65,641  

Miscellaneous

     145,896       151,598  

Net Gain on Disposal of Crown Assets

           1,355  
     1,485,301       1,552,114  
                

Net Income from Government Business Enterprises (Schedule 6)

     384,261       388,621  

Investment Income

    

Interest Revenue

     88,705       114,812  

Sinking Fund and Public Debt Management Fund Earnings

     57,802       93,670  
     146,507       208,482  
                

Total Provincial Sources

     7,680,600       8,312,412  

Federal Sources

    

Equalization Payments

     2,145,883       2,009,037  

Canada Health Transfer *

     1,076,551       1,043,003  

Canada Social Transfer *

     386,271       376,810  

Recoveries

     341,466       341,862  

Offshore Accord

           8,227  

TCA Cost Shared Revenue

     85,421       35,112  

Crown Share

     (994     4,340  

Other Federal Transfers

     570,669       153,040  

Total Federal Sources

     4,605,267       3,971,431  
                

Total Revenue

     12,285,867       12,283,843  

*   See Note 5 for details of Prior Years’ Adjustments

 

 

    

    

 

 

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Public Accounts Volume 1 — Consolidated Financial Statements

Schedule 2

Province of Nova Scotia

Expenses

For the fiscal year ended March 31, 2021

($ thousands)

 

 

     2021                      2020  

Agriculture

     

Department of Agriculture

     34,175        41,060  

Nova Scotia Crop and Livestock Insurance Commission

     2,859        7,307  

Nova Scotia Harness Racing Fund

     1,014        1,012  

Perennia Food & Agriculture Incorporated

     16,138        8,663  
     54,186        58,042  

Business

     

Department of Business

     42,391        103,204  

Develop Nova Scotia

     10,704        11,841  

Nova Scotia Business Inc.

     70,912        60,541  

Nova Scotia Innovation Corporation

     10,800        13,523  

Nova Scotia Strategic Opportunities Fund Incorporated

     3        11  

Tourism Nova Scotia

     29,238        22,270  
     164,048        211,390  

Communities, Culture and Heritage

     

Department of Communities, Culture and Heritage

     112,968        98,963  

Art Gallery of Nova Scotia

     3,810        4,050  

Gaels Forward Fund

     14        10  

Public Archives of Nova Scotia

     138        178  

Schooner Bluenose Foundation

     20        15  

Sherbrooke Restoration Commission

     2,868        2,322  

Vive l’Acadie Community Fund

     41        40  
     119,859        105,578  

Community Services

                 

Department of Community Services

     1,016,984        994,833  

Education and Early Childhood Development

     

Department of Education and Early Childhood Development

     198,187        232,372  

Annapolis Valley Regional Centre for Education

     172,517        163,855  

Cape Breton-Victoria Regional Centre for Education

     177,344        174,114  

Chignecto Central Regional Centre for Education

     253,173        246,606  

Conseil scolaire acadien provincial

     101,625        96,078  

Halifax Regional Centre for Education

     647,561        608,565  

Nova Scotia Education Common Services Bureau

     261        669  

Nova Scotia School Insurance Program

     6,994        4,965  

South Shore Regional Centre for Education

     95,028        93,256  

Strait Regional Centre for Education

     99,605        100,336  

Tri-County Regional Centre for Education

     92,171        90,066  
     1,844,466        1,810,882  
 


Schedules to the Consolidated Financial Statements

Schedule 2

Province of Nova Scotia

Expenses (continued)

For the fiscal year ended March 31, 2021

($ thousands)

 

 

     2021                      2020  

Energy and Mines

     

Department of Energy and Mines

     60,639        34,052  

Acadia Coal Company Limited Fund

            1  

Crown Land Mine Remediation Fund

     57        54  

Nova Scotia Market Development Initiative Fund

     25         

Pengrowth Nova Scotia Energy Scholarship Fund

            135  
     60,721        34,242  

Environment

     

Department of Environment

     44,737        40,992  

Green Fund

     28,759         

Resource Recovery Fund Board Inc.

     59,806        58,040  
     133,302        99,032  

Finance and Treasury Board

                 

Department of Finance and Treasury Board

     23,456        122,093  

Fisheries and Aquaculture

     

Department of Fisheries and Aquaculture

     14,674        21,466  

Nova Scotia Sportfish Habitat Fund

     289        331  
     14,963        21,797  

Health and Wellness

     

Department of Health and Wellness

     2,467,749        2,220,636  

Gambling Awareness Foundation of Nova Scotia

     217        547  

Izaak Walton Killam Health Centre

     287,738        280,545  

Nova Scotia Health Authority

     2,490,024        2,369,120  
     5,245,728        4,870,848  

Justice

     

Department of Justice

     360,527        337,653  

Nova Scotia Legal Aid Commission

     28,730        28,217  
     389,257        365,870  

Labour and Advanced Education

     

Department of Labour and Advanced Education

     249,027        233,831  

Nova Scotia Community College

     226,274        235,138  

Occupational Health and Safety Trust Fund

     70        20  
     475,371        468,989  
                 

Assistance to Universities

     475,447        447,789  

 

 

    

    

 

 

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Public Accounts Volume 1 — Consolidated Financial Statements

Schedule 2

Province of Nova Scotia

Expenses (continued)

For the fiscal year ended March 31, 2021

($ thousands)

 

 

     2021                      2020  

Lands and Forestry

     

Department of Lands and Forestry

     105,223        79,661  

Crown Land Silviculture Fund

     625        1,684  

Habitat Conservation Fund

     73        187  

Off-highway Vehicle Infrastructure Fund

     1,473        1,652  

Species-at-risk Conservation Fund

     234        289  
     107,628        83,473  

Municipal Affairs and Housing

     

Department of Municipal Affairs and Housing

     265,823        266,992  

Housing Nova Scotia

     200,096        173,530  

Nova Scotia E911 Cost Recovery Fund

     5,835        5,296  

Nova Scotia Municipal Finance Corporation

     506        701  
     472,260        446,519  

Public Service

     

Public Service Units

     132,304        128,751  

Mi’kmaw Youth Fund

     28        22  

Nova Scotia Utility and Review Board

     9,664        9,357  
     141,996        138,130  

Seniors

                 

Department of Seniors

     2,575        2,716  

Service Nova Scotia and Internal Services

                 

Department of Service Nova Scotia and Internal Services

     299,546        295,110  

Transportation and Infrastructure Renewal

     

Department of Transportation and Infrastructure Renewal

     564,531        581,585  

Harbourside Commercial Park Inc.

     901        611  

Nova Scotia Lands Inc.

     15,504        9,209  

Sydney Steel Corporation

            3  
     580,936        591,408  
                 

Restructuring Costs

     81,455        170,662  
                 

Pension Valuation Adjustment

     61,066        50,439  
                 

Refundable Tax Credits

     123,842        64,391  
                 

Net Loss on Disposal of Crown Assets

     4,218         
 


 

Schedules to the Consolidated Financial Statements

Schedule 2

Province of Nova Scotia

Expenses (continued)

For the fiscal year ended March 31, 2021

($ thousands)

 

 

     2021                     2020  

Debt Servicing Costs

    

General Revenue Fund

     708,109       800,307  

Annapolis Valley Regional Centre for Education

     362       381  

Cape Breton-Victoria Regional Centre for Education

     360       388  

Chignecto Central Regional Centre for Education

     574       602  

Conseil scolaire acadien provincial

     191       195  

Develop Nova Scotia

     9       67  

Halifax Regional Centre for Education

     1,472       1,531  

Housing Nova Scotia

     10,534       10,653  

Izaak Walton Killam Health Centre

     815       856  

Nova Scotia Community College

     3,026       2,893  

Nova Scotia Health Authority

     7,818       8,161  

Nova Scotia Innovation Corporation

     50       52  

Nova Scotia Legal Aid Commission

     382       334  

Nova Scotia Municipal Finance Corporation

     125       140  

Nova Scotia Strategic Opportunities Fund Incorporated

     17       86  

Nova Scotia Utility and Review Board

     24       23  

Resource Recovery Fund Board Inc.

     13       13  

Sherbrooke Restoration Commission

     5       10  

South Shore Regional Centre for Education

     (58     164  

Strait Regional Centre for Education

     213       257  

Tourism Nova Scotia

     40       39  

Tri-County Regional Centre for Education

     71       171  
     734,152       827,323  
                

Total Expenses

     12,627,462       12,281,556  

 

 

    

    

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Public Accounts Volume 1 — Consolidated Financial Statements

Schedule 3

Province of Nova Scotia

Loans and Investments

As at March 31, 2021

($ thousands)

 

 

     Loans      Provisions     

Net

2021

    

Net

2020

 

Loans Receivable

           

Agriculture and Rural Credit Act

     179,750        15,065        164,685        159,645  

Fisheries Development Act

     231,471        2,055        229,416        193,511  

Halifax-Dartmouth Bridge Commission

     151,000               151,000        156,000  

Harbourside Commercial Park Inc.

     922               922        1,121  

Housing Nova Scotia

     503,215        5,110        498,105        509,229  

Labour and Advanced Education –

           

Student Loans Direct Lending

     229,620        92,100        137,520        139,315  

Nova Scotia Business Inc.

     20,583        10,756        9,827        11,229  

Nova Scotia Innovation Corporation

     2,153        121        2,032        2,263  

Nova Scotia Jobs Fund

     407,200        111,834        295,366        304,808  

Nova Scotia Municipal Finance Corporation

     749,210               749,210        770,183  

Other

     1,867        1,620        247        125  

Total Loans Receivable

     2,476,991        238,661        2,238,330        2,247,429  
           
     Investments      Provisions     

Net

2021

    

Net

2020

 

Investments

           

Art Gallery of Nova Scotia

     4,099               4,099        4,019  

Gambling Awareness Foundation of Nova Scotia

                          4,184  

Nova Scotia Business Inc.

     18,362        18,362               350  

Nova Scotia Community College

     19,339               19,339        38,710  

Nova Scotia Health Authority

     50,312               50,312        49,326  

Nova Scotia Innovation Corporation

     60,658               60,658        46,763  

Nova Scotia Jobs Fund

     3,271        1,771        1,500        1,950  

Nova Scotia School Insurance Program

     6,687               6,687        8,319  

Perennia Food & Agriculture Incorporated

     4,808               4,808        6,338  

Public Archives of Nova Scotia

     2,177               2,177        2,219  

Resource Recovery Fund Board Inc.

     8,435               8,435        4,009  

Total Investments

     178,148        20,133        158,015        166,187  

The provisions listed above include $7.5 million (2020 – $7.5 million) for possible guarantee payouts from the Nova Scotia Jobs Fund Act. Other provisions include $7.4 million (2020 – $7.5 million) for the Debt Reduction Assistance Program related to the student loans portfolio of the Department of Labour and Advanced Education, of which $0.1 million (2020 – $0.1 million) relates to the student loans guaranteed by the Province.

Maturity dates for loans range from calendar year 2021 to 2050, with some loans having no set maturity date. Interest rates for loans range from 0.0 to 10.0 per cent, with some loans having variable interest rates. Most investments have no set maturity dates or interest rates.

The security on loans can include life insurance, company assets, personal guarantees, or the value of the parent company, if applicable. Security can range from an unsecured position to a fully secured position.

 


Schedules to the Consolidated Financial Statements

Schedule 4

Province of Nova Scotia

Unmatured Debt

As at March 31, 2021

($ thousands)

 

 

                     2021          2020  
    

Gross

Unmatured

Debt

    

Sinking

Funds and

Defeasance

Assets

    

Net

Unmatured

Debt

   

 

  

Net

Unmatured

Debt

 

General Revenue Fund

     16,791,548        2,099,798        14,691,750          13,556,935  

Develop Nova Scotia

     4,335               4,335          500  

Housing Nova Scotia

     110,811               110,811          119,001  

Nova Scotia Municipal Finance Corporation

     5,933               5,933          6,727  

Nova Scotia Power Finance Corporation

     577,250        577,250                  

Total Unmatured Debt

             17,489,877                2,677,048                    14,812,829                  13,683,163  

Gross Unmatured Debt

All debt is presented in Canadian dollar equivalents using the exchange rates established by the terms of the currency swap contracts itemized in Note 11.

Gross Unmatured Debt consists of the outstanding current and long-term debt of the Province’s General Revenue Fund and governmental units. Current and long-term debt of the government business enterprises is reflected as part of Investment in Government Business Enterprises on the Statement of Financial Position and further detailed in Schedule 6.

Sinking Fund Assets

As at March 31, 2021, the General Revenue Fund held Sinking Funds and Public Debt Management Funds of $2,099.8 million (2020 – $2,024.1 million). These funds were comprised of $1,156.0 million in Sinking Funds and $943.8 million in Public Debt Management Funds. The total market value of both funds was $2,146.7 million at year-end. During the year, sinking fund contributions were $17.9 million, total earnings were $57.8 million, and there were no redemptions.

Sinking fund assets are recorded at cost, which include premiums and discounts associated with the purchase of these investments. These premiums and discounts are amortized on a straight-line basis over the term of the related investment. The net unamortized portion of the premiums and discounts relating to sinking fund assets as at March 31, 2021 was $17.4 million (2020 – $2.3 million) and is included as part of the value of the sinking funds.

Sinking fund assets consist primarily of debentures of the provincial governments and Government of Canada with fixed interest rates ranging from 0.95 to 9.6 per cent. Sinking fund payments normally commence on the first anniversary date of the issue of the debenture and are designed to retire the debt over the relevant period to maturity. At March 31, 2021, the Province held a carrying value of $280.7 million (2020 – $280.7 million) of its own debentures in sinking funds as active investments.

As per the Nova Scotia Power Corporation Privatization Agreement, Nova Scotia Power Finance Corporation provides for defeasance of its debt. The portfolio of defeasance assets consists of Nova Scotia Power Corporation, other provincial governments and utilities, and Federal US bonds, coupons, and residuals. This debt is reported net of defeasance assets.

 

 

    

    

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Public Accounts Volume 1 — Consolidated Financial Statements

Schedule 4

Province of Nova Scotia

Unmatured Debt (continued)

As at March 31, 2021

($ thousands)

 

Debt Repayments

Projected net principal debt repayments, capital lease payments, payments related to Public-Private Partnership (P3) arrangements, and sinking fund requirements for the next five years and thereafter are as follows:

 

     Net Principal
Repayments
     Capital Lease
Payments
    

P3

Payments

    

Sinking Fund

Payments

    

Total

Payments

 

2022

     1,215,931        7,582               10,017        1,233,530  

2023

     1,042,803        5,411                      1,048,214  

2024

     858,096        5,833        65,282               929,211  

2025

     865,316        5,986        2,002               873,304  

2026

     844,710        6,173        2,081               852,964  

2027 & thereafter

     9,718,319        98,352        58,935               9,875,606  
             14,545,175                129,337                128,300                10,017                14,812,829  

Net principal repayments are comprised of the principal amounts due on loans, debentures, and long-term debt related to leased capital assets and assets acquired under P3 arrangements, less available sinking funds designated to retire the debentures. Net principal repayments for P3 arrangements include payments at substantial completion of approximately 50.0 per cent of costs incurred during construction.

In addition, the Province has approximately $943.8 million (2020 – $930.1 million) in unrestricted sinking funds held in the Public Debt Management Fund. While these funds are not restricted by debt covenants, they are bound by legislation under the Finance Act to be used to pay or retire debentures, securities, or other debt instruments of the Province. The use of these funds is evaluated each year based on a detailed analysis of cash requirements and market conditions. These unrestricted sinking funds consist of cash and cash equivalents, primarily of Canadian financial institution bankers’ acceptances, provincial commercial paper, and longer term investments of fixed and/or floating federal, federal agency, and provincial term credits.

The term to maturity of these unrestricted sinking funds are summarized as follows:

 

     2021      2020  

Term to Maturity

     

Cash and Cash Equivalents

     154,886        277,789  

1 to 3 years

     529,264        554,423  

3 to 5 years

     259,630        97,844  

Public Debt Management Funds

             943,780                930,056  
 


Schedules to the Consolidated Financial Statements

Schedule 5

Province of Nova Scotia

Gross Unmatured Debt

As at March 31, 2021

($ thousands)

 

 

   

Foreign

Exchange

Rate

    

CDN $

Amount

    

Maturity

Dates

     Interest Rates  

Debentures

          

General Revenue Fund (CDN$)

       16,512,179        2021 to 2062        1.00% to 9.60%  

General Revenue Fund (US$)

    0.795               2021 to 2022        8.25% to 9.13%  

Nova Scotia Municipal Finance Corporation

       5,933        2021 to 2032        1.75% to 2.25%  

Nova Scotia Power Finance

          

Corporation (CDN$)

       200,000        2031        11.00%  

Nova Scotia Power Finance

          

Corporation (US$)

    0.795        377,250        2021        9.40%  

Total Debentures

               17,095,362        

Loans

          

General Revenue Fund Other Debt

       21,732        2022        0.39% to 2.31%  

Develop Nova Scotia

       4,335        Demand loan         

Housing Nova Scotia

       110,811        2021 to 2048        1.00% to 6.50%  

Total Loans

       136,878        

Capital Leases and P3 Arrangements

          

General Revenue Fund Capital Leases

       129,337        2021 to 2043        6.36% to 7.25%  

General Revenue Fund P3 Arrangements

       128,300        2043 to 2053        3.62% to 3.95%  

Total Capital Leases and P3 Arrangements

       257,637        
                

Gross Unmatured Debt

       17,489,877        

Call, Redemption and Other Features

General Revenue Fund

Canadian debentures include $900.1 million in Canada Pension Plan (CPP) debentures, which are redeemable in whole or in part before maturity, on six months’ notice, at the option of the Minister of Finance of Canada. All debt is presented in Canadian dollar equivalents using the exchange rates established by the terms of the currency swap contracts itemized in Note 11.

Long-term debt obligations arising from P3 arrangements are recognized as unmatured debt as the underlying tangible capital assets are constructed. At substantial completion, which is estimated in 2023-24, the Province will repay approximately 50.0 per cent of the costs incurred during construction, with the remaining balance to be repaid over the term of the contracts.

The interest rates shown for the Canadian and US debentures reflect the fixed interest rates only. There are debentures that have floating interest rates. Floating interest rates are adjusted on a quarterly basis.

Housing Nova Scotia

Notes payable are secured by investments in social housing.

 

 

    

    

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Public Accounts Volume 1 — Consolidated Financial Statements

Schedule 6    

Province of Nova Scotia

Government Business Enterprises

As at March 31, 2021

($ thousands)

 

 

                                 2021          2020  
         Halifax- Highway 104                                  
    

Dartmouth

Bridge

    Commission

    

Western

Alignment

Corporation

    

Nova Scotia

Gaming

Corporation

    

Nova Scotia

Liquor

Corporation

     Total           Total  

Cash

     12,609        727        21,281        31,326        65,943          65,021  
Accounts Receivable    173      1,015      88,246      3,729      93,163          90,543  

Inventory

     38        17        3,186        69,097        72,338          67,588  

Investments

     15,069        88,732        14,775               118,576          121,280  

Tangible Capital Assets

     271,279        21,731        59,624        89,305        441,939          457,577  

Other Assets

     319        600        5,958        12,155        19,032          17,256  

Total Assets

     299,487        112,822        193,070        205,612        810,991          819,265  

Accounts Payable

     4,746        1,938        138,778        59,449        204,911          202,257  

Unmatured Debt

     151,000        24,556        17,637        36,446        229,639          242,607  

Other Liabilities

     4,144        3,626        8,222        30,956        46,948          44,936  

Total Liabilities

     159,890        30,120        164,637        126,851        481,498          489,800  

Equity

     139,597        82,702        28,433        78,761        329,493          329,465  

Total Liabilities and Equity

     299,487        112,822        193,070        205,612        810,991          819,265  

Total Revenue

     25,968        18,549        227,879        797,944        1,070,340          1,103,966  

Debt Servicing Costs

     4,187        2,730        597        1,889        9,403          10,443  

Other Expenses

     21,048        9,751        124,304        521,573        676,676          704,902  

Total Expenses

     25,235        12,481        124,901        523,462        686,079          715,345  

Net Income

     733        6,068        102,978        274,482        384,261          388,621  
 


Schedules to the Consolidated Financial Statements

Schedule 6  

Province of Nova Scotia

Government Business Enterprises (continued)

As at March 31, 2021

 

Halifax-Dartmouth Bridge Commission

The Halifax-Dartmouth Bridge Commission (HDBC), operating as Halifax Harbour Bridges, was created in 1950 by a special statute of the Province of Nova Scotia (now the Halifax-Dartmouth Bridge Commission Act). The purpose of HDBC is to construct, maintain, and operate bridges and their necessary approaches across the Halifax Harbour, between the communities of Halifax and Dartmouth, and across the North West Arm.

HDBC currently operates and maintains two toll bridges across the Halifax Harbour: the Angus L. Macdonald Bridge and A. Murray MacKay Bridge. In accordance with the Halifax-Dartmouth Bridge Commission Act, the Nova Scotia Utility and Review Board, a provincially controlled public sector entity, regulates toll rates charged for the use of the two bridges operated by HDBC.

Long-Term Loan Agreements with the Province

2015 Loan Agreement

On February 6, 2015, HDBC entered into a long-term unsecured loan agreement with the Province for $160.0 million in relation to the capital project to replace the suspended span of the Angus L. Macdonald Bridge (the Big Lift project). This loan is to be repaid over twenty years starting June 1, 2019 with annual principal repayments of between $4.0 million and $10.0 million. As at March 31, 2021, HDBC had a balance of $151.0 million (2020 – $156.0 million) repayable on the loan, of which $6.0 million is due within a year.

Interest is paid semi-annually on June 1st and December 1st of each year. The average interest rate over the life of the loan is 2.8 per cent. For the year ending March 31, 2021, interest on the loan was $4.2 million (2020 – $4.3 million), of which $1.4 million (2020 – $1.4 million) was payable at year-end.

Restricted Reserve Funds

The 2015 Loan Agreement requires that HDBC maintain three reserve funds: Operating, Maintenance & Administrative (OM) Fund, Debt Service Fund, and Capital Fund. At year-end, restricted assets for these funds totaled $15.1 million (2020 – $15.4 million). These restricted assets were invested in GICs and term deposits with rates between 0.70 and 0.89 per cent. Interest income on restricted assets for the year totaled $0.2 million (2020 – $0.5 million).

Line of Credit Agreement with the Province

A $60.0 million revolving, unsecured line of credit with the Province issued June 30, 2008, matured on December 5, 2019. Subsequently on April 6, 2020, HDBC entered into a new agreement with the Province for a $60.0 million revolving, unsecured line of credit that matures on March 31, 2025. Interest is charged on outstanding balances at a rate equal to the arithmetical average of the discount rates on Canadian Dealer Offered Rate (CDOR) banker’s acceptances applicable on the date of the requested advance payable at maturity.

At March 31, 2021, HDBC had no advances outstanding against the line of credit (2020 – $nil) and no draws or accrued interest for the year (2020 – $nil).

 

 

    

    

 

 

 

 

 

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Public Accounts Volume 1 — Consolidated Financial Statements

Schedule 6  

Province of Nova Scotia

Government Business Enterprises (continued)

As at March 31, 2021

 

Highway 104 Western Alignment Corporation

The Highway 104 Western Alignment Corporation (H104) was established for the purpose of financing, designing, constructing, operating, and maintaining a 45 km stretch of highway (referred to as the Cobequid Pass) between Masstown and Thomson Station in the counties of Colchester and Cumberland, Nova Scotia. The Highway 104 Western Alignment Corporation Act, which authorizes the collection of tolls, states that toll collection will cease upon complete payment of all costs and liabilities relating to H104. This includes financing, design, construction, operation and maintenance, and any repair, improvement, alteration, or extension. The forecasted repayment date of all costs and liabilities relating to H104 is in 2026.

Related Party Transactions

H104 had a receivable from the Province in the amount of $0.6 million (2020 – $0.7 million) at year-end. Government grants cover certain expenses incurred and costs of assets. They are recognized initially as deferred revenue at fair value when there is reasonable assurance that they will be received and H104 will comply with the conditions associated with them. Grants to cover expenses incurred are recognized in profit or loss on a systematic basis in the same periods in which the expenses are recognized. Grants to cover the cost of an asset are deferred and amortized to operations over the expected project life or useful life of the asset using the straight-line method.

Transactions with various Crown corporations, ministries, agencies, boards, and commissions related to H104 by virtue of common control by the Province are included in the financial statements of H104 and are routine operating transactions carried out as part of H104’s normal day-to-day operations. These transactions are individually insignificant, and collectively, include maintenance services of $1.4 million (2020 – $1.3 million), enforcement costs of $60.0 thousand (2020 – $60.0 thousand), and purchases of inventory of $nil (2020 – $8.1 thousand) and property, plant and equipment of $48.7 thousand (2020 – $46.6 thousand).

Omnibus Agreement

The Omnibus Agreement, dated April 1, 1996, is an agreement between H104, the Contractor, the Operator, and the Province to design, finance, construct, operate, and maintain the Highway 104 Western Alignment. Under this agreement, the Province retains ownership of the highway. However, H104 is granted the right to operate the highway and collect tolls for a 30-year period, after which time the right will revert to the Province. Overall, the Province has contributed $27.5 million to this project.

Restricted reserve accounts for capital, major maintenance, and debt service have been established in accordance with the Omnibus Agreement. At March 31, 2021, restricted assets totaled $88.7 million (2020 – $84.2 million) and were comprised of investments recorded at amortized cost and included accrued interest of $57.6 thousand (2020 – $0.4 million), a weighted-average term of 4.6 (2020 – 4.3) months to maturity, and a weighted-average interest rate of 0.2 per cent (2020 – 1.5 per cent).

 


 

Schedules to the Consolidated Financial Statements

Schedule 6    

Province of Nova Scotia

Government Business Enterprises (continued)

As at March 31, 2021

 

Highway 104 Western Alignment Corporation (continued)

Annual Roadway Maintenance Agreement

The annual roadway maintenance agreement is a 30-year agreement between H104 and the Department of Transportation and Infrastructure Renewal for the provision of annual roadway maintenance services and is renewed annually. The annual fee was $1.4 million for the current fiscal year (2020 – $1.3 million). During the year, H104 also incurred management fees of $48.7 thousand (2020 – $42.8 thousand) to the Province.

Long-Term Debt

Long-term debt is comprised of senior toll revenue bonds bearing interest of 10.13 per cent per year, compounded semi-annually, and maturing March 31, 2026. The bonds are payable in equal installments of interest and principal. At year-end, H104 had $20.6 million (2020 – $24.6 million) of long-term debt and $4.0 million (2020 – $3.6 million) of debt maturing within one year. Interest expense on the long-term debt was $2.7 million (2020 – $3.1 million) for the year.

Minimum principal repayments for the next five years are as follows:

  2022 – $4.0 million   
  2023 – $4.4 million   
  2024 – $4.9 million   
  2025 – $5.4 million   
  2026 – $5.9 million   

Long-term debt is secured by a first charge and security interest over all the present and future property and assets, including but not limited to, cash and securities held in trust, rights under all material contracts, and all accounts receivable and interest.

Nova Scotia Gaming Corporation

The Nova Scotia Gaming Corporation (NSGC) was incorporated on February 15, 1995 by Chapter 4 of the Acts of 1994-95, the Gaming Control Act. The Gaming Control Act was amended November 13, 2012, whereby the name of NSGC was changed to Nova Scotia Provincial Lotteries and Casino Corporation (NSPLCC). Effective April 18, 2018, the name of the Corporation was changed back to the Nova Scotia Gaming Corporation. The principal activities of NSGC are to develop, undertake, organize, conduct, and manage casinos and other lottery business on behalf of the Province of Nova Scotia. Revenues of NSGC are derived from two casinos, located in Halifax and Sydney, as well as ticket and video lottery sales.

Payable to the Province

NSGC had a payable to the Province in the amount of $121.9 million (2020 – $116.0 million) at year- end. In addition to the net income of $103.0 million (2020 – $121.2 million), NSGC is required to pay to the Province 20.0 per cent of casino gaming revenue, otherwise known as win tax. This amounted to $3.4 million in the current year (2020 – $15.3 million).

 

 

    

    

 

 

 

 

 

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Public Accounts Volume 1 — Consolidated Financial Statements

Schedule 6  

Province of Nova Scotia

Government Business Enterprises (continued)

As at March 31, 2021

 

Nova Scotia Gaming Corporation (continued)

Special Payments to Government Departments

NSGC is obligated to make direct payments annually to two provincial government departments: Department of Communities, Culture and Heritage (in support of the Cultural Federation of Nova Scotia and Sport Nova Scotia) and Department of Agriculture (in support of the Exhibition Association of Nova Scotia). In 2021, these payments totaled $0.2 million (2020 – $0.2 million).

As part of its 2005 and 2011 Gaming Strategies, the Province approved contributions of $3.0 million to the Department of Health and Wellness in 2021 (2020 – $3.0 million) to fund problem gambling treatment and $0.5 million (2020 – $0.5 million) to fund youth gambling prevention.

Contribution to Nova Scotia Harness Racing Fund

NSGC annually contributes to the Nova Scotia Harness Racing Fund, pursuant to the Nova Scotia Harness Racing Fund Regulations. These contributions go towards supporting the harness racing industry in Nova Scotia. In 2021, the contribution was $1.0 million (2020 – $1.0 million).

Due to Atlantic Gaming Equipment Limited

As at March 31, 2021, the amount due to Atlantic Gaming Equipment Limited was $15.3 million (2020 – $19.4 million), of which $4.3 million (2020 – $5.5 million) was classified as current. This liability represents a portion of Atlantic Lottery Corporation Inc.’s (ALC) debt used in the acquisition of property, plant and equipment operated on behalf of NSGC. The amount owing has no fixed terms of repayment, is non-interest bearing, and is due on demand if NSGC withdraws from the ALC Unanimous Shareholders Agreement.

Disputed HST Assessments

Included in accounts receivable at March 31, 2021 is $82.3 million (2020 – $77.3 million) that was paid to Canada Revenue Agency (CRA) for an assessment of HST in respect to the operation of certain video lottery terminals sited on First Nation reserves in the province of Nova Scotia. NSGC continues to remit amounts to CRA, on a without prejudice basis, solely to avoid the accumulation of interest and penalties. NSGC is contesting this matter with CRA and on November 14, 2016, through ALC, filed an appeal with the Tax Court. The outcome of the appeal is undeterminable at this time. The amount paid to CRA has been classified as a non-current asset in NSGC’s financial statements due to the uncertainty of when NSGC expects the dispute to be resolved.

Other Comprehensive Income

During the year, NSGC reported $7.4 million in other comprehensive income (OCI) related to its share of Atlantic Lottery Corporation’s OCI (2020 – $3.9 million). As at March 31, 2021, accumulated OCI was $14.8 million (2020 $7.3 million).

 


 

Schedules to the Consolidated Financial Statements

Schedule 6  

Province of Nova Scotia

Government Business Enterprises (continued)

As at March 31, 2021

 

Nova Scotia Liquor Corporation

The Nova Scotia Liquor Corporation (NSLC) was created June 1, 2001, by Chapter 4 of the Government Restructuring (2001) Act, via continuance of the Nova Scotia Liquor Commission as a body corporate. NSLC derives its mandate from the Liquor Control Act, Chapter 260 of the Revised Statutes of Nova Scotia, 1989 and the Nova Scotia Cannabis Control Act passed in the Nova Scotia Legislature on April 17, 2018. NSLC operates retail sales locations across the province and has the authority to wholesale, store, distribute, and sell cannabis, while complying with federal requirements and promoting responsible consumption. Upon passing of the Nova Scotia Cannabis Control Act, 3313086 Nova Scotia Limited was dissolved and, under the provisions of the Act, specific responsibilities and authorities related to cannabis distribution and retailing, were assigned to NSLC. In addition, all rights, title, and interest in any real or personal property of 3313086 Nova Scotia Limited vested in the NSLC and all its obligations and liabilities became those of NSLC.

Related Party Transactions

During the year, remittances to the Minister of Finance and Treasury Board totaled $283.0 million (2020 – $209.8 million), which are disclosed in NSLC’s statement of changes in equity. All other transactions with the Province are deemed to be collectively insignificant to NSLC’s financial statements.

Equity

Upon conversion to International Financial Reporting Standards (IFRS) in 2012, NSLC reclassified its payable to the Minister of Finance and Treasury Board from a liability to equity. NSLC’s equity was $78.8 million (2020 – $88.6 million) at year-end. NSLC’s main objectives for managing capital are to ensure sufficient liquidity in support of its financial obligations to achieve its business plans and to continue as a self-sufficient entity in order to provide continuous remittances to the Province.

Other Comprehensive Income

During the year, NSLC reported -$1.3 million in other comprehensive income (OCI) related to actuarial losses on defined benefit plans (2020 – $1.4 million). As at March 31, 2021, accumulated OCI was

$2.2 million (2020 – $3.6 million).

 

 

    

    

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1 — Statements

Schedule 7

Province of Nova Scotia

Tangible Capital Assets

As at March 31, 2021

($ thousands)

 

 

                                            2021          2020  
     Land     

Buildings

and Land

Improve-

ments

    

Machinery,

Computers

and

Equipment

    

Vehicles

and

Ferries

    

Roads,

Bridges

and

Highways

    Total          Total  

Costs

                           

Opening Costs

         1,088,936         6,010,277         1,351,714         231,345         4,013,702        12,695,974           12,207,273   

Transfers

        (4,738)        4,738                   (3)  

Additions

     48,084         530,554         125,976         32,742         470,851        1,208,207           665,241   

Disposals

     (492)        (12,555)        (58,208)        (19,895)                (91,150)          (176,537)  

Closing Costs

     1,136,528         6,523,538         1,424,220         244,192         4,484,553        13,813,031           12,695,974   

Accumulated

                     

Amortization

                     

Opening

                     

Accumulated

                     

Amortization

        (2,953,995)        (1,013,324)        (155,630)        (2,207,646     (6,330,595)          (6,064,615)  

Transfers

               (9)                   

Disposals

        9,991         56,447         19,692           86,130           174,245   

Amortization

                     

Expense

        (164,391)        (68,855)        (19,051)        (189,893     (442,190)          (440,228)  

Closing

                     

Accumulated

                                                               

Amortization

              (3,108,386)        (1,025,741)        (154,989)        (2,397,539     (6,686,655)          (6,330,595)  
                                                               

Net Book Value

     1,136,528         3,415,152         398,479         89,203         2,087,014        7,126,376           6,365,379   

Opening Balance

     1,088,936         3,056,282         338,390         75,715         1,806,056        6,365,379           6,142,658   

Closing Balance

     1,136,528         3,415,152         398,479         89,203         2,087,014        7,126,376           6,365,379   
                                                               

Increase (Decrease) in Net Book Value

     47,592         358,870         60,089         13,488         280,958        760,997           222,721   
 


 

Schedules to the Consolidated Financial Statements

Schedule 7

Province of Nova Scotia

Tangible Capital Assets (continued)

As at March 31, 2021

 

Amortization is calculated on a declining balance basis for most assets of the General Revenue Fund. The amortization rates of the more common tangible capital assets are as follows:

 

Buildings and Land Improvements

   5 – 30 per cent 

Machinery, Computers and Equipment

   20 – 50 per cent

Vehicles and Ferries

   15 – 35 per cent

Roads, Bridges and Highways

   5 – 15 per cent 

Capital leases of the General Revenue Fund are amortized on a straight-line basis over the length of each lease, ranging from 3 to 25 years.

Amortization is generally calculated on a straight-line basis for assets of the governmental units. The estimated useful lives of the more common tangible capital assets are as follows:

 

Buildings (including Leasehold Improvements)

        and Land Improvements

   2 – 60 years 

Machinery, Computers and Equipment

   1 – 60 years

Vehicles and Ferries

   3 – 7 years   

Capital leases of the governmental units are amortized on a straight-line basis over the length of each lease, ranging from 5 to 45 years.

Social Housing assets are included in Buildings and Land Improvements and relate to Housing Nova Scotia. These assets are amortized using the declining balance method. The net book value of these assets is $192.9 million (2020 – $210.4 million).

Included in the closing costs of the various classes as at March 31, 2021 are costs for assets under construction, which have not yet been amortized. These costs relate to Buildings and Land Improvements of $471.6 million; Machinery, Computers and Equipment of $104.8 million; Vehicles and Ferries of $18.0 million; and Roads, Bridges and Highways of $289.1 million.

P3 arrangements are included in the various categories as follows: Buildings and Land Improvements of $21.1 million and Roads, Bridges and Highways of $95.6 million. Of the total P3 costs, 18.1 per cent relates to health care infrastructure and 81.9 per cent relates to highways. These assets are included in the figures above as under construction and have not yet been amortized.

Capital leases are included in the various asset classes as at March 31, 2021 as follows:

 

     Cost     

Accumulated

Depreciation

 

Buildings and Land Improvements

   $ 278.0 million      $ 116.7 million  

Machinery, Computers and Equipment

   $ 9.0 million      $ 6.4 million  

Vehicles and Ferries

   $ 23.8 million      $ 13.2 million  

 

 

    

    

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Public Accounts Volume 1 — Consolidated Financial Statements

Schedule 8  

Province of Nova Scotia

Direct Guarantees

As at March 31, 2021

($ thousands)

 

 

                     2021          2020       
    

Foreign

Exchange

Rate

     Authorized      Utilized          Utilized       

Bank Loans

               

Department of Business – Forestry Contractor Relief Program

        5,000        1,106          882    

Department of Business – Small Business Loan Guarantee Program

        20,000        16,871             

Department of Labour and Advanced Education – Student Loan Program

        179        179          272    

Department of Transportation and Infrastructure Renewal (US$)

     0.795        6,289                    

Nova Scotia Jobs Fund Act

        53,180        44,826          47,934  

Total Bank Loan Guarantees

        84,648        62,982          49,088    

Federal Loans

               

Nova Scotia Strategic Opportunities Fund Incorporated

        385        385          2,027    

Total Federal Loan Guarantees

        385        385          2,027    

Mortgages

               

Housing Nova Scotia Act

                        5,700    

Housing Nova Scotia Act Canada Mortgage and Housing Corporation Indemnities

        10,300        10,300          13,800    

Total Mortgage Guarantees

        10,300        10,300          19,500    
                                 

Total Direct Guarantees

                95,333                73,667              70,615    

Less: Provision for Guarantee Payout

               

Department of Business – Forestry Contractor Relief Program

           (277        (221  

Department of Business – Small Business Loan Guarantee Program

           (2,543           

Housing Nova Scotia Act

           (3,706        (3,936  

Nova Scotia Jobs Fund Act

           (7,460        (7,460  

Nova Scotia Strategic Opportunities Fund Incorporated

           (385        (2,027  
           (14,371)          (13,644  

Less: Provision for Student Debt Reduction Program

               

Department of Labour and Advanced Education Student Loan Program

           (78)          (100  
                           

Net Direct Guarantees

           59,218          56,871    

(Not provided for in these consolidated financial statements)

 

            

* Amount was updated from the prior year based on the most current information

 


Schedules to the Consolidated Financial Statements

Schedule 9  

Province of Nova Scotia

Segment Reporting

As at March 31, 2021

 

Segment reporting is designed to assist users in identifying the resources allocated to support the major activities of government and to better understand the performance of segments.

The following schedules provide segment information for the 2021 and 2020 fiscal years. Segment results represent the activities of that segment and include any inter-segment transactions. Inter- segment eliminations are shown in a separate column and show the reconciliation to total consolidated amounts. The Province has determined that the following segments represent the major activities of government.

Health

The provision of such services and institutions to the public that will lead to a higher state of personal health.

Education

The provision of all aspects and phases of training to equip people with necessary skills to pursue productive lives. This includes: Primary to Grade 12, post-secondary and advanced education, as well as labour support.

Infrastructure & Public Works

The provision of the means to facilitate the effective and efficient movement of persons and property. This includes the net results of the Halifax-Dartmouth Bridge Commission and the Highway 104 Western Alignment Corporation.

Social Services

The provision of services and assistance to economically and/or socially disadvantaged persons requiring aid.

Natural Resources & Economic Development

The provision for the maintenance and upkeep, efficient extraction, processing, and utilization of the natural attributes of the province with the aim of creating employment and contributing to the material well-being of residents.

Other Government

Revenues and expenses that relate to activities that are not identified as a separate segment or cannot be directly allocated on a reasonable basis to individual segments because they support a wide range of service delivery activities. This includes certain items from the General Revenue Fund such as general tax revenues, sinking fund earnings, debt servicing costs, and the pension valuation adjustment.

 

 

    

    

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  Public Accounts Volume 1 — Consolidated Financial Statements

Schedule 9  

Province of Nova Scotia

Segment Reporting (continued)

For the fiscal year ended March 31, 2021

($ thousands)

 

 

                                Infrastructure &              
    Health       Education       Public Works       Social Services
                             
    2021     2020       2021     2020       2021     2020       2021     2020

Revenue

                     

Provincial Sources

                     

Tax Revenue

    208,002     183,035                 223,787     266,539          

Other Provincial Revenue

    404,691     466,109       415,640     471,516       24,169     17,760       206,293     110,914

Net Income from GBEs

                        6,801     20,172          

Investment Income

    1,085     1,626       8,271     13,008                 22,293     23,332

Federal Sources

    1,176,795     1,126,084       345,272     315,447       88,557     36,128       283,914     270,453

Total Revenue

    1,790,573     1,776,854       769,183     799,971       343,314     340,599       512,500     404,699

Expenses

                     

Grants and Subsidies

    2,253,857     1,914,874       789,393     724,568       53,548     67,176       926,092     905,781

Salaries and Employee Benefits

    1,937,653     1,897,525       1,614,013     1,563,036       141,091     140,349       157,064     142,742

Operating Goods and Services

    962,462     1,057,824       326,980     352,942       118,670     109,002       138,411     135,697

Professional Services

    58,478     52,127       23,868     25,586       71,726     68,830       6,994     7,280

Amortization

    81,727     84,194       86,396     88,155       218,371     209,674       21,875     22,302

Debt Servicing Costs

    9,001     9,494       6,211     6,582                 31,790     32,810

Other

    1,617     1       1                     1,177    

Total Expenses

    5,304,795     5,016,039       2,846,862     2,760,869       603,406     595,031       1,283,403     1,246,612
                                                     

Segment Result

    (3,514,222   (3,239,185)       (2,077,679   (1,960,898)       (260,092   (254,432)       (770,903   (841,913)
 


Schedules to the Consolidated Financial Statements

Schedule 9  

Province of Nova Scotia

Segment Reporting (continued)

For the fiscal year ended March 31, 2021

($ thousands)

 

 

   

Natural Resources &

Economic Development

     

Other

Government

  Inter-Segment
Eliminations
      Total  
                           
    2021     2020       2021     2020       2021     2020       2021     2020  
                                                       

Revenue

                     

Provincial Sources

                     

Tax Revenue

    490     446       5,232,252     5,713,175                 5,664,531       6,163,195  

Other Provincial Revenue

    194,857     139,780       447,790     433,217       (208,139   (87,182)       1,485,301       1,552,114  

Net Income from GBEs

              377,460     368,449                 384,261       388,621  

Investment Income

    3,530     2,466       133,888     192,212       (22,560   (24,162)       146,507       208,482  

Federal Sources

    47,322     42,763       2,663,407     2,180,556                 4,605,267       3,971,431  

Total Revenue

    246,199     185,455       8,854,797     8,887,609       (230,699   (111,344)       12,285,867       12,283,843  

Expenses

                     

Grants and Subsidies

    157,180     177,264       643,998     542,109       (168,067   (45,235)       4,656,001       4,286,537  

Salaries and Employee

                     

Benefits

    151,429     140,088       510,758     502,320       (5,277   (4,655)       4,506,731       4,381,405  

Operating Goods and

                     

Services

    192,400     178,440       179,595     167,497       (16,848   (14,706)       1,901,670       1,986,696  

Professional Services

    15,930     14,073       207,808     190,665       (2,443   (2,042)       382,361       356,519  

Amortization

    16,617     16,730       17,204     19,173                 442,190       440,228  

Debt Servicing Costs

    130     256       724,634     817,860       (37,614   (39,679)       734,152       827,323  

Other

    1,304     7,874       708           (450   (5,027)       4,357       2,848  

Total Expenses

    534,990     534,725       2,284,705     2,239,624       (230,699   (111,344)       12,627,462       12,281,556  
                                                         

Segment Result

    (288,791   (349,270)       6,570,092     6,647,985                 (341,595     2,287  

 

 

    

 

 

    

 

 

 

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Public Accounts Volume 1 — Consolidated Financial Statements

Schedule 10    

Province of Nova Scotia

Government Reporting Entity

As at March 31, 2021

 

The General Revenue Fund is comprised of the Province’s departments, public service units, special operating agencies, and the net income from government business enterprises, which are consolidated with the special purpose funds, governmental units, and a proportionate share of the government partnership arrangements to form the Province’s government reporting entity.

 

Departments and Public Service Units

   Special Operating Agencies

(Consolidation Method)

   (Consolidation Method)

Agriculture

   Nova Scotia Apprenticeship Agency

Business 1

   Nova Scotia Home for Colored Children

Invest Nova Scotia Fund

  

Restorative Inquiry

Nova Scotia Jobs Fund

   Sydney Tar Ponds Agency (inactive)

Communities, Culture and Heritage 1

  

Community Services

   Special Purpose Funds

Education and Early Childhood Development

   (Consolidation Method)

Energy and Mines 1

  

Environment 1

   Acadia Coal Company Limited Fund

Finance and Treasury Board

   CorFor Capital Repairs and Replacements Fund

Muggah Creek Remediation Fund

   Crown Land Mine Remediation Fund

Public Debt Management Fund

   Crown Land Silviculture Fund

SYSCO Decommissioning Fund

   Democracy 250 (inactive)

Fisheries and Aquaculture

   Gàidheil Air Adhart (Gaels Forward Fund)

Health and Wellness

   Gaming Addiction Treatment Trust Fund

Justice

   Green Fund

Labour and Advanced Education 1

   Habitat Conservation Fund

Lands and Forestry 1

   Mi’kmaw Youth Fund

Municipal Affairs and Housing 1

   Nova Scotia Coordinate Referencing System Trust Fund

Public Service

   Nova Scotia E911 Cost Recovery Fund

Aboriginal Affairs 1

   Nova Scotia Environmental Trust

Communications Nova Scotia

   Nova Scotia Government Acadian Bursary Program Fund

Elections Nova Scotia

   Nova Scotia Harness Racing Fund

Executive Council

   Nova Scotia Market Development Initiative Fund

Freedom of Information and Protection

   Nova Scotia Nominee Program Fund

of Privacy Review Office

   Nova Scotia Sportfish Habitat Fund

Human Rights Commission

   Occupational Health and Safety Trust Fund

Intergovernmental Affairs

   Off-highway Vehicle Infrastructure Fund

Legislative Services

   P3 Schools Capital and Technology Refresh Fund 2

Nova Scotia Police Complaints Commissioner

   Pengrowth Nova Scotia Energy Scholarship Fund

Nova Scotia Securities Commission

   Scotia Learning Technology Refresh Fund

Office of Immigration 1

   Select Nova Scotia Fund

Office of the Auditor General

   Species-at-risk Conservation Fund

Office of the Ombudsman

   Sustainable Forestry Fund

Public Prosecution Service

   Vive l’Acadie Community Fund

Public Service Commission

  

Regulatory Affairs and Service Effectiveness

   Governmental Units

Seniors 1

   (Consolidation Method)

Service Nova Scotia and Internal Services

  

Transportation and Infrastructure Renewal 1

   Annapolis Valley Regional Centre for Education
   Art Gallery of Nova Scotia
   Arts Nova Scotia

1 – Restructured February 23, 2021 and August 31, 2021 Original name listed here

2 – Includes refresh funds related to P3 schools

 


 

Schedules to the Consolidated Financial Statements

Schedule 10    

Province of Nova Scotia

Government Reporting Entity (continued)

As at March 31, 2021

 

Governmental Units (continued)

(Consolidation Method)

 

Cape Breton-Victoria Regional Centre for Education

  

Nova Scotia School Insurance Program

Check Inns Limited (inactive)

  

Association 2

Chignecto Central Regional Centre for Education

  

Nova Scotia Strategic Opportunities Fund Incorporated

Conseil scolaire acadien provincial

  

Nova Scotia Utility and Review Board

Creative Nova Scotia Leadership Council

  

Perennia Food & Agriculture Incorporated

Develop Nova Scotia

  

Public Archives of Nova Scotia

3104102 Nova Scotia Limited

  

Resource Recovery Fund Board Inc.

Gambling Awareness Foundation of

  

Schooner Bluenose Foundation

Nova Scotia (inactive)

  

Sherbrooke Restoration Commission

Halifax Regional Centre for Education

  

South Shore Regional Centre for Education

Harbourside Commercial Park Inc.

  

Strait Regional Centre for Education

Sydney Utilities Limited

  

Sydney Environmental Resources Limited (inactive)

Housing Nova Scotia

  

Sydney Steel Corporation

Cape Breton Island Housing Authority

  

Tourism Nova Scotia

Cobequid Housing Authority

  

Tri-County Regional Centre for Education

Eastern Mainland Housing Authority

  

Upper Clements Family Theme Park Limited (inactive)

Metropolitan Regional Housing Authority

  

3052155 Nova Scotia Limited (inactive)

Western Regional Housing Authority

  

Invest Nova Scotia Board

  

Government Business Enterprises

Izaak Walton Killam Health Centre

  

(Modified Equity Method)

Nova Scotia Arts Council (inactive)

  

Nova Scotia Boxing Authority

  

Halifax-Dartmouth Bridge Commission

Nova Scotia Business Inc.

  

Highway 104 Western Alignment Corporation

Nova Scotia Independent Production Fund

  

Nova Scotia Gaming Corporation

Nova Scotia Community College

  

Atlantic Lottery Corporation (25% ownership)

Nova Scotia Community College Foundation

  

Interprovincial Lottery Corporation (10% ownership)

Nova Scotia Crop and Livestock Insurance

  

Nova Scotia Gaming Equipment Limited

Commission

  

Nova Scotia Liquor Corporation

Nova Scotia Education Common Services Bureau 1

  

Nova Scotia Farm Loan Board

  

Government Partnership Arrangements

Nova Scotia Fisheries and Aquaculture Loan Board

  

(Modified Equity Method) 3

Nova Scotia Health Authority

  

Provincial Drug Distribution Program

  

Atlantic Provinces Special Education Authority

Nova Scotia Innovation Corporation

  

    (approximately 56% share)

1402998 Nova Scotia Limited

3087532 Nova Scotia Limited

  

Canada-Nova Scotia Offshore Petroleum Board (50% share)

Nova Scotia Lands Inc.

  

Canadian Sports Centre Atlantic

Nova Scotia Legal Aid Commission

  

    (approximately 14% share)

Nova Scotia Municipal Finance Corporation

  

Council of Atlantic Premiers

Nova Scotia Power Finance Corporation

  

    (approximately 31% share)

Nova Scotia Primary Forest Products Marketing Board

  

Halifax Convention Centre Corporation (50% share)

Nova Scotia School Insurance Exchange 2   

1 – Formerly Nova Scotia School Boards Association

2 – Entity is a partnership controlled by the seven Regional Centres for Education, Conseil scolaire acadien provincial, and the Nova Scotia Community College

3 – GPAs do not meet the threshold of materiality and cost-benefit to use the proportionate consolidation method

 

 

    

    

 

 

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EX-99.2

Exhibit 99.2

 

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INDEPENDENT AUDITOR’S CONSENT

To: The Department of Finance and Treasury Board of the Province of Nova Scotia

I consent to the use of my independent auditor’s report dated September 13, 2021 to the Members of the Legislative Assembly of Nova Scotia on the consolidated financial statements of the Province of Nova Scotia, comprising the consolidated statement of financial position as at March 31, 2021, and the consolidated statement of operations and accumulated deficits, consolidated statement of changes in net debt and consolidated statement of cash flow for the year then ended, and related notes and schedules, included in the Public Accounts of Nova Scotia for the fiscal year ended March 31, 2021 that is included in Amendment No. 1 to the Province of Nova Scotia’s Annual Report on Form 18-K to be filed with the U.S. Securities and Exchange Commission on the Electronic Data Gathering, Analysis and Retrieval system on September 22, 2021 and to be incorporated by reference into the Province of Nova Scotia’s Registration Statement File No. 333-214108 previously filed with the U.S. Securities and Exchange Commission.

Kim Adair-MacPherson, FCPA, CA, ICD.D

Auditor General of Nova Scotia

Halifax, Nova Scotia

September 22, 2021

 

  

Kimberly.Adair-MacPherson@novascotia.ca

902 424 4046 tel

902 424 4350 fax

www.oag-ns.ca

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