Financial Statements
December 31, 2021
Management’s Responsibility For Financial Statements
Management of Ottawa Macdonald-Cartier International Airport Authority is responsible for the integrity of the accompanying financial statements and all other information in this Annual Report. The financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles, which for publicly accountable enterprises, and in the case of the Authority, require International Financial Reporting Standards. Their preparation necessarily involves the use of management’s best estimates and careful judgement, particularly in those circumstances where transactions affecting a current period are dependent upon future events. All financial information in the Annual Report is consistent with the information and data contained in the financial statements.
To discharge its responsibilities for financial reporting and safeguarding of assets, management believes that it has established appropriate systems of internal accounting control which provide reasonable assurance that the financial records are reliable and form a proper basis for the timely and reliable preparation of financial statements.
The Board of Directors discharges its responsibilities for the financial statements primarily through its Audit Committee, which is composed solely of directors who are neither officers nor employees of the Authority. This committee meets periodically with management and the independent auditors to review performance and to discuss audit, internal control, accounting policy, and financial reporting matters. The Audit Committee reports its findings to the Board of Directors which reviews and approves the annual financial statements. These financial statements were reviewed by the Audit Committee and approved by the Board of Directors.
The financial statements have been audited by Ernst & Young LLP, who were appointed at the annual general meeting. Their report is presented below.
Mark Laroche
President and Chief Executive Officer
Rob Turpin, CPA, CA, CPA (Illinois, USA)
Vice President, Finance and Chief Financial Officer
Ottawa Ontario Canada
February 23, 2022
Independent Auditor’s Report
To the Directors of
Ottawa Macdonald-Cartier International Airport Authority
Opinion
We have audited the financial statements of Ottawa Macdonald-Cartier International Airport Authority [the “Authority”], which comprise the balance sheet as at December 31, 2021, and the statement of operations and comprehensive loss, statement of changes in equity (deficiency) and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Authority as at December 31, 2021, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards [“IFRSs”].
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Authority in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of management and those charged with governance for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Authority’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Authority or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Authority’s financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’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 Authority’s ability to continue as a going concern. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Authority to cease to continue as a going concern.
- Evaluate the overall presentation, structure, and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Chartered Professional Accountants, Licensed Public Accountants
Ottawa, Canada
February 23, 2022
| 2021 $ |
2020 $ |
|
|---|---|---|
| Assets | ||
| Current | ||
| Cash and cash equivalents | 47,716 | 10,647 |
| Trade and other receivables [note 11] | 9,350 | 5,209 |
| Consumable supplies | 3,309 | 3,511 |
| Prepaid expenses and advances | 1,147 | 951 |
| Current portion of Debt Service Reserve Fund [note 7[a]] | 8,296 | — |
| Total current assets | 69,818 | 20,318 |
| Debt Service Reserve Fund [note 7(a)] | — | 6,867 |
| Finance lease receivables [note 12] | 11,643 | 11,612 |
| Property, plant and equipment, net [note 3 and 13] | 413,141 | 434,738 |
| Post-employment pension benefit asset, net [note 9] | 263 | — |
| Other assets [note 4] | 5,162 | 5,226 |
| 500,027 | 478,761 | |
| Liabilities and equity (deficiency) | ||
| Current | ||
| Bank indebtedness [note 5] | — | 30,000 |
| Accounts payable and accrued liabilities [note 9] | 14,981 | 14,315 |
| Current portion of long-term debt [note 7] | 14,023 | 13,116 |
| Total current liabilities | 29,004 | 57,431 |
| Other post-employment benefit liability [note 9] | 8,944 | 9,337 |
| Long-term debt [note 7] | 480,251 | 394,450 |
| Total liabilities | 518,199 | 461,218 |
| Commitments and contingencies [note 16] | ||
| Equity (deficiency) | ||
| Retained earnings (deficit) | (8,743) | 27,945 |
| Accumulated other comprehensive loss | (9,429) | (10,402) |
| Total equity (deficiency) | (18,172) | 17,543 |
| 500,027 | 478,761 |
On behalf of the Board:
Director
Director
| 2021 $ |
2020 $ |
|
|---|---|---|
| Revenue | ||
| Airport Improvement Fees [note 8] | 19,343 | 14,649 |
| Terminal fees and loading bridge charges | 7,871 | 9,440 |
| Landing fees | 5,185 | 5,216 |
| Concessions | 5,884 | 5,191 |
| Car parking | 2,695 | 4,481 |
| Land and space rentals [note 12] | 6,616 | 6,583 |
| Other revenue [note 13] | 9,044 | 3,024 |
| 56,638 | 48,584 | |
| Expenses | ||
| Interest [note 7[b]] | 21,476 | 20,189 |
| Ground rent [note 12 and 13] | — | 439 |
| Materials, supplies and services | 22,109 | 24,596 |
| Salaries and benefits [note 9 and 13] | 16,975 | 17,384 |
| Payments in lieu of municipal taxes | 1,469 | 5,502 |
| 62,029 | 68,110 | |
| Loss before depreciation | (5,391) | (19,526) |
| Depreciation | 31,297 | 31,638 |
| Net loss for the year | (36,688) | (51,164) |
| Other comprehensive income | ||
| Item that will never be reclassified subsequently to net loss | ||
| Remeasurement of defined benefit plans [note 9] | 973 | 1,424 |
| Comprehensive loss for the year | (35,715) | (49,740) |
| 2021 $ |
2020 $ |
|
|---|---|---|
| Retained earnings, beginning of year | 27,945 | 79,109 |
| Net loss for the year | (36,688) | (51,164) |
| Retained earnings (deficit), end of year | (8,743) | 27,945 |
| Accumulated other comprehensive loss, beginning of year | (10,402) | (11,826) |
| Items that will never be recycled into net loss | ||
| Income on remeasurement of defined benefit plan [note 9] | 973 | 1,424 |
| Accumulated other comprehensive loss, end of year | (9,429) | (10,402) |
| Total equity (deficiency) | (18,172) | 17,543 |
| 2021 $ |
2020 $ |
|
|---|---|---|
| Operating activities | ||
| Net loss for the year | (36,688) | (51,164) |
| Add items not involving cash | ||
| Depreciation | 31,297 | 31,638 |
| Amortization of deferred financing costs | 228 | 139 |
| Interest expense | 21,476 | 20,189 |
| Decrease in other assets | 63 | 63 |
| Increase in other post-employment benefit liability | 317 | 257 |
| 16,693 | 1,122 | |
| Net change in non-cash working capital balances related to operations [note 14] | (2,043) | 2,456 |
| Cash provided by operating activities | 14,650 | 3,578 |
| Investing activities | ||
| Purchase of property, plant and equipment [note 3] | (9,799) | (16,853) |
| Proceeds on disposal of property, plant and equipment | 100 | 60 |
| Lease payments received from finance leases | 512 | 504 |
| Change in accounts payable and accrued liabilities related to investing activities | (2,950) | 391 |
| Interest received | 112 | 267 |
| Cash used in investing activities | (12,025) | (15,631) |
| Financing activities | ||
| Increase in bank indebtedness and long-term debt [note 14] | 135,000 | 30,000 |
| Increase in Debt Service Reserve Fund [note 7[a]] | (1,428) | (121) |
| Debt issue transaction costs | (404) | — |
| Settlement of interest rate hedge | 283 | — |
| Interest paid | (20,891) | (20,103) |
| Repayment of bank indebtedness and long-term debt [note 14] | (78,116) | (8,753) |
| Cash provided by financing activities | 34,444 | 1,023 |
| Net increase (decrease) in cash during the year | 37,069 | (11,030) |
| Cash and cash equivalents, beginning of year | 10,647 | 21,677 |
| Cash and cash equivalents, end of year | 47,716 | 10,647 |