Board of Management of the Toronto Zoo · 2014. 6. 26. · Board of Management of the Toronto Zoo...

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Private and Confidential

Board ofManagement ofthe Toronto Zoo

2013 Year-end reportto the Audit Committee

Prepared as ofMay 12, 2014

PricewaterhouseCoopers LLPNorth American Centre, 5700 Yonge Street, Suite 1900, North York, Ontario, Canada M2M 4K7T: +1 416 218 1500, F: +1 416 218 1499, www.pwc.com/ca

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

Private and confidential

May 12, 2014

Members of the Board of Management of theToronto Zoo

Dear Members of the Board of Management:

We have substantially completed our audit of the financial statements (the financial statements) of theBoard of Management of the Toronto Zoo (the organization or the Zoo) prepared in accordance withPublic Sector Accounting Standards including standards that apply only to government not-for-profitorganizations for the year ended December 31, 2013. We propose to issue an unqualified report on thosefinancial statements, pending resolution of outstanding items outlined on page 1. Our draft auditor’sreport is included in Appendix B.

We have issued the accompanying report to assist you in your review of the financial statements. Itincludes an update on the status of our work, as well as a discussion on the significant accounting andfinancial reporting issues dealt with during the audit process.

We propose to review the key elements of this report at the upcoming meeting and discuss with you ourkey findings.

We would like to express our sincere thanks to the management and the staff of the organization who haveassisted us in carrying out our work and we look forward to our meeting on May 15, 2014. Should you haveany questions or concerns prior to the Board meeting, please do not hesitate to contact me in advance.

Yours very truly,

Michael NicolóEngagement PartnerAudit and Assurance Group

cc: John Tracogna, Chief Executive OfficerRobin Hale, Chief Operating OfficerPaul Whittam, Manager of Financial Services

Board of Management of the Toronto Zoo Year-end report to the Board of ManagementDecember 31, 2013

The matters raised in this and other reports that will flow from the audit are only those that have come to our attention arising from or relevant toour audit that we believe need to be brought to your attention. They are not a comprehensive record of all the matters arising and, in particular,we cannot be held responsible for reporting all risks in your business or all internal control weaknesses. This report has been prepared solely foryour use and should not be quoted in whole or in part without our prior written consent. No responsibility to any third party is accepted, as thereport has not been prepared for, and is not intended for, any other purpose. Comments and conclusions should only be taken in context of thefinancial statements as a whole as we do not mean to express an opinion on any individual item or accounting estimate.

PwC

Contents Page

1. Executive summary 1

2. Audit administration 3

3. How we performed the audit 5

4. Significant audit, accounting and financial reporting matters 7

5. Summary of unadjusted and adjusted items 10

6. Other required communications 12

7. Internal control recommendations 13

8. Our commitment to audit quality 15

9. 2013 audit fees 16

10. Changes for not-for-profit organizations 17

Appendices

Appendix A: Engagement letter

Appendix B: Draft auditor’s report and draft financial statements

Appendix C: Management representation letter

Appendix D: Improvements proposed by the Accounting Standards Board and Public Sector Accounting Board

Appendix E: Director Connect Newsletter

Appendix F: 2014 Federal budget – How it affects you and the charitable and not-for-profit sector


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1. Executive summary

a. Status of the audit

We have substantially completed our audit of the 2013 financial statements. Our auditor’s report will be issuedonce we receive and have completed our audit work on the outstanding items noted below.

This document includes the required communications between an auditor and the Audit Committee, as required byCanadian generally accepted auditing standards (Canadian GAAS).

The following items will need to be completed/received prior to the issuance of our opinion. We will provide anupdate on the status of these items at our upcoming meeting.

Outstanding itemStatus as at May 15, 2014

i. Receipt of updated City of Toronto Confirmation

ii. Receipt of reliance letter from Buck Consulting

iii. Legal update to the date of the audit report

iv. Receipt of signed management representation letter

v. Subsequent events update to the date of audit report

vi. Approval of the financial statements by the Policy andFinance Committee / Board of Management


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b. Key issues for discussion

Discussion item Summary For furtherreference

Items discussed withmanagement

During the course of our work we discussed the followingitems with management: Treatment of related party transactions Employee future benefits Capital assets Deferred revenue Payroll Management estimates Risk of management override of controls Budgeted figures

Section 4

Summary ofunadjusted items

As a result of our audit, we identified unadjusted items withan effect of $193,400 understatement of excess of revenueover expenses for the year.

Unadjusted and adjusted items are listed in section 5. In our opinion, the financial statements, taken as a whole, are

free of material misstatement.

Section 5

Fraud No instances of fraud were noted as part of our auditprocedures.

Section 3

Managementrepresentations

Under Canadian GAAS, we are required to inform you of therepresentations we are requesting from management. A copyof the management representation letter is included inAppendix C.

Appendix C


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2. Audit administration

a. Your team

Your client service team comprises the following individuals:

Name Role Number ofyears onengagement

Phonenumber

Email address

Michael Nicoló Engagementleader

3 416 218 1395 [email protected]

PamelaPapadopoulos

Engagementmanager

3 416 218 1528 [email protected]

Katrina Saskiw Senior Associate 2 416 941 8383ext. 25217

[email protected]

b. Our audit objectives

As the organization’s auditor, our primary responsibility is to form and express an opinion on the organization’sfinancial statements as at December 31, 2013 and for the year then ended in accordance with Public SectorAccounting Standards (PSAS) for government not-for-profit organizations. The financial statements are preparedby management with the oversight of those charged with governance (the Board of Management). An audit of thefinancial statements does not relieve management or the Board of Management of its responsibilities.

We conducted our audit in accordance with Canadian GAAS. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance whether the financial statements arefree from material misstatement.

In addition, we are committed to being a trusted advisor to management and to the Board of Management. Whereappropriate, we will provide management our views and insights and also advise management of other services wefeel could be helpful ─ at all times staying within the realms of our independence rules.

c. Engagement terms

Our engagement letter (included in Appendix A), which was agreed to by the City of Toronto, sets out the terms andconditions for our engagement as the independent auditor of the organization for the above-mentioned year.

In addition, our engagement letter outlines our responsibilities as the auditor and the responsibilities ofmanagement.


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d. Our service deliverables

Our audit and audit related service deliverables with respect to 2013 are:

Audit and audit related services Timing/status

Audit opinions Financial statement audit for the Toronto Zoo March/April 2014

Other services Final report on the results of the audit to theBoard of Management for approval

May 15, 2014


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3. How we performed the audit

a. Our audit approach

Our audit approach is designed to allow us to execute a quality and efficient audit. We do this by:

i. gaining an understanding of the business by focusing on new developments and key business issues affectingthe organization as well as management’s monitoring of controls and business processes;

ii. identifying significant audit risks, sharing our perspectives, obtaining your feedback and ensuring our audit istailored to these risks;

iii. using well-reasoned professional judgment, especially in areas that are subjective or require estimates; andiv. leveraging reliance where possible on the organization’s internal controls and information technology and data

systems.

In the current year, our work included testing of key controls in the following areas:

Purchases, payables and disbursements Payroll

All other areas were subject to tests of detail and substantive analytical testing.

Throughout the audit, we scale our work based on the size of an account balance, its complexity and its impact onthe financial statements. As a result, you will always hear us talking to you about the key issues.

b. Materiality

Misstatements, including omissions, are considered to be material if they (individually or in aggregate with othermisstatements) could reasonably be expected to influence the economic decisions of users, taken on the basis of thefinancial statements.

Judgments about materiality are made in light of surrounding circumstances and are affected by the size or natureof a misstatement, or a combination of both. A common measure for setting materiality for a not-for-profitorganization is to use 1/2% to 2% of revenue or expenditures.

Accordingly, we set our materiality for the audit as follows:

Basis Amount

Overall materiality 2% of expenditures $1,060,000

Unadjusted and adjusted items in excess ofthis amount are reported to the Board ofManagement

10% of overall materiality $106,000


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c. Discussion on fraud risk

Canadian GAAS requires us to discuss fraud risk annually with the Audit Committee. We understand that part ofyour governance role is also to consider the fraud risks facing the organization and the responses to those risks.

Required discussion: Fraudrelated processes

Through our audit process (and prior years’ audits), we have developed anunderstanding of your oversight processes including:

Whistleblower policy Code of conduct Board of Management charters Discussion at Policy and Finance Committee meetings and our

attendance at those meetings Business performance reviews Review of related party transactions Consideration of tone at the top

Are there any new processes or changes to the above that we should beaware of?

Required discussion: Fraud Management has reported any instances of fraud to the Auditor General.No instances of fraud were noted as part of our audit procedures.

We would like to ask whether you are aware of instances of actual,suspected or alleged fraud affecting the Zoo?

An auditor’s responsibilities for detecting fraud

We are responsible for planning and performing the audit to obtain reasonable assurance that the financialstatements are free of material misstatements, whether caused by error or fraud.

The likelihood of not detecting a material misstatement resulting from fraud is higher than the likelihood of notdetecting a material misstatement resulting from error, because fraud may involve collusion as well as sophisticatedand carefully organized schemes designed to conceal it.

During our audit, we performed the following procedures in order to fulfill our responsibilities: inquiried of management, the Audit Committee and others related to any knowledge of fraud or suspected

fraud; performed disaggregated analytical procedures, primarily over revenue and consider unusual or unexpected

relationships identified in planning the audit; incorporated an element of unpredictability in the selection of the nature, timing and extent of our audit

procedures; performed additional required procedures to address the risk of management’s override of controls, including:

- testing internal controls designed to prevent and detect fraud;- examining journal entries and other adjustments for evidence of the possibility of material misstatement

due to fraud;- reviewing accounting estimates for biases that could result in material misstatement due to fraud,

(including a retrospective review of significant prior years’ estimates); and- evaluating the business rationale of significant unusual transactions.


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4. Significant audit, accounting and financialreporting matters

Preparation of the financial statements requires management to select accounting policies, as well as make criticalaccounting estimates and disclosures that may involve significant judgment and measurement uncertainty. Thesematters can significantly impact the organization’s reported results.

These risks were identified based on discussions with management, our knowledge of the business and currentdevelopments in your industry and the economy.

Item Discussion

Treatment ofrelated partytransactions

A high amount of activity occurs between the Zoo and the City of Toronto (the City).This includes transactions such as receipt of operating funding and other charges. Inaddition, there are numerous Funds (e.g. Animal Transaction Reserve Fund, ZooStabilization Reserve Fund, etc.) maintained by the City that are not recorded in thefinancial statements of the Zoo.

We received independent confirmation from the City of Toronto confirming thefollowing balances to ensure that they have been accurately and completely presentedand/or disclosed in the accounts of the Zoo:

- General appropriation revenue- Capital works program financing- Receivable and payable balances from/to City- Animal transaction reserve fund- Endangered species reserve fund- Zoo Stabilization reserve fund

Management interacts with City accounting staff to ensure transactions and balancesare accurately reflected in the Funds maintained by the City. We have no visibility tothe accounts maintained by the City and rely on their confirmation for these balances.

With regards to employee future benefits, consistent with prior years, the City onlyconfirms the change in the employee benefit obligation as an expense to the Zoo. As aresult of this there is a reconciling amount of $799,845 (2012 - $543,196) related tothese costs.

We have reviewed the related party note disclosure with respect to the relationshipwith the City and it appears to be appropriate.


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Item Discussion

Employee futurebenefits

We obtained the actuarial valuation report prepared by Buck Consulting for 2013 andreviewed the reasonability of the assumptions in calculating the post-retirementbenefit liability, and noted no significant exceptions.

We have also reviewed the accounting treatment of the employee benefit obligation inaccordance with PSAS, and noted an expense of $932,380 (2012 - $788,365) related tocurrent service costs, interest cost and amortization of actuarial gain (loss) recognizedin the statement of operations. We noted a reconciling expense item with the City of$799,845 (2012 - $543,196) related to expected benefit payments of the Toronto Zoo,as noted in the Buck Consulting report.

Completion of the employee benefit obligation work at the City of Toronto group auditlevel remains open.

Capital assets We have reviewed selected invoices and other documents supporting additionscapitalized by the Zoo in the year. We have also recalculated depreciation andassessed the reasonability of the useful lives of the capital assets. We noted adifference in depreciation estimate resulting in a proposed audit adjustment of$193,400. Refer to section 5 of this report.

We have also reviewed significant expense accounts such as repairs andmaintenance accounts to ensure no significant amounts were expensed that shouldhave been capitalized. No exceptions were noted.

Deferred revenue We have reviewed management’s estimate of deferred revenue for reasonablenessand assessed the reasonability of management’s basis for recognizing deferredamounts to net income based on supporting documentation.

A control recommendation from the prior year has been updated for the currentyear, and has been included in Section 7 of this report.

Payroll We have also obtained the ADP CSAE 3416 report on the operating effectiveness ofcontrols at the service organization for fiscal 2013. We obtained an understandingof the controls relied on by the organization and the results of the testing of thosecontrols. We have validated key management controls around the payroll cycle, andtested the year-end payroll reconciliation. No exceptions were noted.

Managementestimates

During the course of our work, we performed work on the accruals by reviewingsupporting documentation for the balances, to assess the appropriateness of thereported amounts. On an overall basis, we noted no issues.

Risk ofmanagementoverride ofcontrols

Accounting regulatory authorities require that the risk of material misstatement due tomanagement override of controls be considered a significant risk on every auditengagement. In the current year, we tested of a sample of manual journal entries forappropriateness. We noted no issues as a result of our testing.


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Item Discussion

Budgeted figures Currently, under PSAS for government not-for-profit organizations, presentation of thebudgeted figures is not a requirement. This budgeted information has been presentedand audited to comply with the City audit team’s reporting requirements.


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5. Summary of unadjusted and adjusted items

We have concluded that the financial statements taken as a whole are free of material misstatement and (pendingthe completion, to our satisfaction, of the outstanding matters identified in section 1), we are prepared to issue anunqualified opinion on the financial statements. Our responsibility is to issue an opinion as to whether the financialstatements are free of material misstatement.

Under Canadian GAAS, we are required to communicate to you the unadjusted items and the effect that they mayhave on our opinion and to request that unadjusted items be corrected. As a result of our audit, we identifiedcertain items and have discussed these with management, and management adjusted the financial statements toreflect certain of these items. Management has concluded that the remaining unadjusted item, which is described in(a) below, is immaterial individually and in the aggregate.

We are also required to communicate the effects of any unadjusted items that relate to prior periods. We did notidentify any such items.

a. Unadjusted items

If the item below, a difference in estimate, were adjusted the effect on the Zoo’s financial statements would be asfollows:

Excess ofrevenue over

expense

Statement of financial position

DescriptionOverstated

(understated)$

Assets(overstated)understated

$

Liabilitiesoverstated

(understated)$

Net assetsoverstated

(understated)$

To reduce the estimate fordepreciation, based on PwC’scalculation in accordance withthe half-year rule

DR Accumulated depreciation

CR Depreciation expense (193,400)

193,400

Total unadjusted difference (193,400) 193,400 - -


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b. Adjusted items

Adjustments made by the Zoo as part of the audit process are as follows:

Excess ofrevenue over

expense

Statement of financial position

DescriptionOverstated

(understated)$

Assets(overstated)understated

$

Liabilitiesoverstated

(understated)$

Net assetsoverstated

(understated)$

To record a portion of thebenefits expense for the year

DR Expenses

CR Transfer from City

132,535

(132,535)

Total adjusted difference 132,535 132,535 - -


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6. Other required communications

Canadian GAAS requires that the external auditor communicate certain matters to the Board of Management thatmay assist you in overseeing management’s financial reporting and disclosure process.

Below, we summarize these required communications as they apply to you:

Matter to be communicated PwC’s response

Management’s representations Under Canadian GAAS, we are required to inform you of therepresentations we are requesting from management. A copyof the management representation letter is included inAppendix C.

Significant deficiencies in internalcontrol

Canadian GAAS requires us to communicate to the AuditCommittee internal control weaknesses identified as part ofour audit that are considered to be significant deficiencies.

A significant deficiency is defined as an internal controldeficiency that we consider merits the attention of the Boardof Management.

During our work, we did not note any significantdeficiencies; however, we have included an update to prioryear control recommendations to strengthen certain areas ofthe Zoo’s internal control systems in Section 7.

Significant difficulties or disagreementsthat occurred during the audit

No difficulties or disagreements occurred while performingour audit that requires the attention of the Board ofManagement.

Fraud and illegal acts No fraud came to our attention as a result of our auditprocedures.


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7. Internal control recommendations

The purpose of our audit was to enable us to express an opinion on the financial statements. The audit includedconsideration of internal control relevant to the preparation of the financial statements in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of internal control.

During our prior year audit, we identified the following control recommendations that we have discussed withmanagement and wish to bring to your attention.

Update on prior year findings

Observation Recommendation Management’s response

Deferred Revenue

Through our testing of thedeferred revenue process, PwCnoted that management madeefforts to improve the tracking ofits deferred revenue activities forbetter reporting purposes in thecurrent year. As a result, therewere also amounts in the deferredrevenue balance recognized intoincome in the current year, whereexpenses had been incurred inprior periods. This resulted incut-off adjustments reported inSection 3.

PwC also noted that$76K ofmembership revenues from themonth of December wererecognized as revenue, ratherthan being deferred, as a result ofdeferred membership revenue notbeing completely reviewed beforefinal posting to the general ledger.

We recommend that managementcomplete a final review of thedeferred revenue schedule forreasonability at each month's end toestablish reasonability of amountsin the account. This will add a checkto ensure that the manual processfor tracking deferred membershiprevenue is most accurate.

Update for 2013:During our testing of deferredrevenue, we noted that the reviewprocess was not fully implemented.While review of deferredmembership was performed in theyear, we recommend a multi-levelreview of the year-end deferredrevenue, including deferredmembership, prior to posting to thegeneral ledger.

Management is in agreement withthis recommendation.


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Observation Recommendation Management’s response

HST/GST Tracking

During our testing of thereasonability of HST/GSTbalances, we noted that the Zoodoes not maintain a receivableaccount for HST/GST activity. Allactivity is maintained in a payableaccount. At year-end, weproposed a reclassification fromaccounts payable to accountsreceivable.

We recommend that managementset up a receivable account forGST/HST tracking purposes toavoid reportingunderstatements/overstatements ofaccounts payable or accountsreceivable balances at year end.

Update for 2013:We observed a new GST/HSTreceivable account in the generalledger this year. As a result, therewere nounderstatement/overstatementaccounts payable or receivablebalances noted in the current year.This has been remediated in thecurrent year.

This has been remediated in thecurrent year.


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8. Our commitment to audit quality

We are proud of PwC’s long history of delivering high quality and recognize that quality in everything we do isparamount. We know that you expect our people to be competent, objective and embody the right level ofprofessional skepticism - while at all times maintaining an open dialogue with your management team. We believeour core values described below ensure that we achieve audit quality and quality service at the same time.

Core value How it helps us execute a high quality audit

Investing in relationships We believe that the professional relationships we foster withmanagement and the Board of Management allow us to have openand candid dialogue over issues including, when necessary, askingthose difficult questions.

Relationships also allow us to provide timely advice and enable us tobetter understand the organization’s operations.

Sharing and collaborating Tackling today’s complex business issues requires the collaborationof different team members from various areas of our firm such as taxor valuation experts.

Our experts will work with members of your team to help solvecomplex issues and bring forward best practices.

Putting ourselves in others’ shoes Listening to and understanding others’ perspectives allow forenhanced dialogue and allow us to think about issues from variouspoints of view.

We consider issues from multiple perspectives, starting with thestandards, and including the views of management and the Board ofManagement as well as our assessment of what financial statementusers expect. While we will express our views or preferences, we donot impose them on you unless we believe that there are no otheralternatives within the standards.

Enhancing value Our understanding of the business and execution of a quality auditallow us to identify issues that are important to the Board ofManagement and management.

Within the realms of our independence rules, there are opportunitiesto provide recommendations and insight on improvements incontrols, operations and other areas of business that can enhanceshareholder value.

These core values govern how we operate - the audit work and documentation of procedures in our files are alsoalways of the same high standard. Our people are subject to continuous training to ensure that they are equippedwith the right tools and best practices to achieve quality and a focus on continuous improvement.

Although our audits are planned to focus on the key risks, our professional audit standards and regulators requireus to ensure that we have sufficient evidence in all areas of our files. While we strive to achieve high quality in a costeffective manner, the reality is that we are being required to do more to comply with existing standards and to meetour regulator’s interpretations of what audit quality is. This means that you will see us performing procedures inareas that you might consider lower risk.

As always we welcome your feedback on our performance and your views on how we achievequality. You have our commitment that audit quality is paramount and you can have the confidencethat the audit work performed by PwC will stand up to the scrutiny of contributors and otherstakeholders.


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9. 2013 audit fees

Our estimated fees were based on the agreed upon fee with the City of Toronto. Our fees exclude taxes, as outlinedin the City of Toronto engagement letter.

Service description Estimated fees2013

$

Actual fees -prior year

$

Audit of the financial statements 19,990 18,710

Total audit services 19,990 18,710

During the audit, additional time was incurred dealing with employee future benefits and other matters. Ananalysis will be prepared and discussed with management. Any billable amounts will be approved in accordancewith the agreed upon terms of the City of Toronto engagement letter.


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10. Changes for not-for-profit organizations

As part of our commitment to quality service, we now draw your attention to new and emerging accounting,auditing and regulatory developments together with their assessed impact on the Zoo’s financial reporting:

Improvements proposed by the Accounting Standards Board andPublic Sector Accounting Board

In April 2013, the Accounting Standards Board (AcSB) and Public Sector Accounting Board (PSAB) issued astatement of principles on Improvements to Not-for-Profit Standards. These principles are expected to beincorporated into future exposure drafts issued by each Board. The proposals would affect Part III of the CPACanada Handbook – Accounting, and the CPA Canada Public Sector Accounting (PSA) Handbook including the PS4200 series of Sections, to improve existing standards for financial reporting by NFPOs. The effects of theseproposals would be significant. The timing of the exposure drafts and effective dates for individual standards hasnot yet been determined. More details can be found in Appendix D.


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Appendix A: Engagement letter


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Appendix B: Draft auditor’s report and draft financialstatements

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FOR DISCUSSION WITH MANAGEMENT ONLY – SUBJECT TO AMENDMENT

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Board of Management ofthe Toronto Zoo

Financial StatementsDecember 31, 2013

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PricewaterhouseCoopers LLPNorth American Centre, 5700 Yonge Street, Suite 1900, North York, Ontario, Canada M2M 4K7T: +1 416 218 1500, F: +1 416 218 1499

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.



June 5, 2014

Independent Auditor’s Report

To the Directors of

Board of Management of the Toronto Zoo

We have audited the accompanying financial statements of the Board of Management of the Toronto Zoo,

which comprise the statement of financial position as at December 31, 2013 and the statements of

operations, changes in net assets, remeasurement gains and losses and cash flows for the year then ended,

and the related notes, which comprise a summary of significant accounting policies and other explanatory

information.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in

accordance with Canadian public sector accounting standards, 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.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted

our audit in accordance with Canadian generally accepted auditing standards. Those standards require

that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in

the financial statements. The procedures selected depend on the auditor’s judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the entity’s

preparation and fair presentation of the financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by management, as well as evaluating the

overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinion.


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Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Board of Management of the Toronto Zoo as at December 31, 2013 and the results of its operations, its

remeasurement gains and losses, changes in its net assets and its cash flows for the year then ended in

accordance with Canadian public sector accounting standards.

Chartered Professional Accountants, Licensed Public Accountants

Board of Management of the Toronto ZooStatement of Financial PositionAs at December 31, 2013



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Approved by the Board of Directors

Chair Vice-Chair

The accompanying notes are an integral part of these financial statements.


2013$

2012$

Assets

Current assetsCash 8,968,593 6,312,547Accounts receivable

City of Toronto (note 3) 976,678 3,376,005Trade 1,200,844 1,459,971

Inventories 589,725 364,210Prepaid supplies 249,605 291,886

11,985,445 11,804,619

Capital assets - net (note 4) 2,476,495 1,502,818

Receivable from City of Toronto (note 3(c)) 11,308,050 11,175,515

25,769,990 24,482,952

Liabilities

Current liabilitiesAccounts payable and accrued liabilities (notes 3 and 15) 6,704,488 7,604,162Deferred revenue (note 5) 4,149,664 3,621,743Toronto Community Foundation (note 11) 554,591 11,344

11,408,743 11,237,249

Employee future benefits payable (note 6) 11,308,050 11,175,515

22,716,793 22,412,764

Net Assets

Accumulated remeasurement gains (losses) 2,381 (421)

Internally restricted fund (note 7) 3,050,816 2,070,609

3,053,197 2,070,188

25,769,990 24,482,952

Commitments and contingencies (notes 13 and 14)

Board of Management of the Toronto ZooStatement of OperationsFor the year ended December 31, 2013




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2013 2012

Budget$

Actual$

Actual$

(note 16)

RevenueFunding from City of Toronto

General appropriation 11,648,288 11,648,288 11,108,000Capital works contribution 171,000 - 171,000

Funding from deferred revenue 1,085,354 481,235 954,951Admission 17,452,503 17,535,062 12,255,672Membership 4,233,846 3,877,727 3,398,284Food services 6,958,870 7,712,376 6,049,073Gift shop operations 3,344,000 4,046,962 2,589,029Parking 3,413,518 3,720,585 3,023,559Rides and rentals 1,243,000 1,182,049 795,863Education programs 897,411 870,086 798,475Other revenue and recoveries 1,272,837 1,694,972 1,707,536Development (note 12) 2,324,160 1,574,901 787,145Interest 10,000 6,530 16,688

54,054,787 54,350,773 43,655,275

ExpensesOperations and administration 21,232,688 20,968,971 16,764,106Conservation, education and wildlife 15,128,190 14,999,839 13,868,746Marketing and communications 3,939,845 3,364,430 3,094,601Food services 5,409,594 5,853,331 4,914,508Gift shop operations 2,559,655 2,703,295 1,998,448General management 3,313,553 3,217,702 1,987,008Development 2,471,262 1,093,392 940,876Amortization of capital assets - 626,359 493,488Post-employment benefits - net (note 6) - 132,535 245,169

54,054,787 52,959,854 44,306,950

Excess of revenue over expenses (expensesover revenue) before the following - 1,390,919 (651,675)

Transfer to Toronto Community Foundation(note 11) - (543,247) -

Additional transfer (to) from City of Toronto(notes 1 and 3(b)) - - (47,007)

Transfer from City of Toronto related to changein employee future benefits payable(note 3(c)) - 132,535 245,169

Excess of revenue over expenses (expensesover revenue) for the year - 980,207 (453,513)

Board of Management of the Toronto ZooStatement of Changes in Net AssetsFor the year ended December 31, 2013


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2013 2012

Internallyrestricted

$Unrestricted

$

Accumulatedremeasurement

gains (losses)$

Total$

Total$

(note 7)

Net assets - Beginningof year 2,070,609 - (421) 2,070,188 3,424,122

Excess of revenue overexpenses (expensesover revenue) for theyear - 980,207 - 980,207 (453,513)

Interest on internallyrestricted fund (note 7) 6,530 (6,530) - - -

Change in net assetsinvested in capitalassets 973,677 (973,677) - - -

Transfer of internallyrestricted funds tocapital fund - - - - (900,000)

Unrealized gains (losses)attributable to foreignexchange - - 2,802 2,802 (421)

Net assets - End of year 3,050,816 - 2,381 3,053,197 2,070,188

Board of Management of the Toronto ZooStatement of Remeasurement Gains and LossesFor the year ended December 31, 2013


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2013$

2012$

Accumulated remeasurement gains (losses) - Beginning ofyear (421) -

Unrealized gains (losses) attributable to foreign exchange 2,802 (421)

Accumulated remeasurement gains (losses) - End of year 2,381 (421)

Board of Management of the Toronto ZooStatement of Cash FlowsFor the year ended December 31, 2013


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2013$

2012$

Cash provided by (used in)

Operating activitiesExcess of revenue over expenses (expenses over revenue) for the year 980,207 (453,513)Add: Items not involving cash

Transfer of internally restricted funds to capital fund - (900,000)Amortization of capital assets 626,359 493,488Employee future benefits payable 132,535 245,169Unrealized gains (losses) attributable to foreign exchange 2,802 (421)

1,741,903 (615,277)Changes in non-cash working capital balances

Accounts receivableCity of Toronto 2,399,327 (315,433)Trade 259,127 730,226

Inventories (225,515) 59,922Prepaid supplies 42,281 (18,456)Receivable from City of Toronto (132,535) (245,169)Accounts payable and accrued liabilities (899,674) 1,322,348Deferred revenue 527,921 (136,783)Toronto Community Foundation 543,247 (228,665)

4,256,082 552,713

Capital activitiesPurchase of capital assets (1,600,036) (23,286)

Increase in cash during the year 2,656,046 529,427

Cash - Beginning of year 6,312,547 5,783,120

Cash - End of year 8,968,593 6,312,547

Board of Management of the Toronto ZooNotes to Financial StatementsDecember 31, 2013

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1 Operations and relationship with the City of Toronto

The Board of Management of the Toronto Zoo (the Board) is a local board established by the City of Toronto

(the City). The Board operates, manages and maintains the zoological gardens and related facilities known as

the Toronto Zoo (the Zoo) under the terms of an agreement between the Board and the City. As defined within

the City of Toronto Act, 1997, the City is entitled to any surplus resulting from the Board’s activities and is

responsible for any deficit the Board incurs (note 3(b)).

The live collection of the Zoo is the property of the City and accordingly is not recorded in the accounts of the

Board. The Board trades and sells specimen surpluses according to its needs, recording animal trades at fair

value. All these transactions are recorded through the Animal Transaction Reserve Fund held by the City

(note 8). In addition, the City maintains an Endangered Species Reserve Fund for the Board (note 9).

The City established the Zoo Stabilization Reserve Fund in 1996 for the purpose of investing in revenue-

generating activities of the Board, preparing for special events in advance of the budget year and offsetting

revenue shortfalls. The Zoo Stabilization Reserve Fund is also recorded in the accounts of the City (note 10).

Major capital facilities are the property of the City. Consequently, major capital facilities are recorded in the

accounts of the City and not in these financial statements (note 4). In addition, the Board contributes to the

City’s vehicle and insurance reserve and expenses these contributions as made. Contributions for the year

amounted to $333,000 (2012 - $333,000) for the vehicle reserve and $201,183 (2012 - $201,183) for the

insurance reserve, and are included within operations and administration on the statement of operations.

In 2012, the accreditation status of the Zoo was rescinded by the Association of Zoos and Aquariums (AZA). The

AZA stated its decision was entirely due to governance matters and the decision by Toronto City Council,

overturning a previous Board decision, regarding the transfer of elephants to another facility. The Zoo may

experience difficulties in transacting with other AZA accredited facilities in the areas of animal breeding loans

related to the Species Survival Plans (SSP) and other animal acquisition requests on a case by case basis. At the

same time, other AZA accredited facilities could request the return of animals or species currently on loan to the

Zoo. Toronto Zoo management is working toward reinstatement of its AZA accreditation.

The Board is a registered charity and as such is not subject to income taxes.

2 Summary of significant accounting policies

These financial statements are prepared in accordance with Canadian public sector accounting standards

(PSAS) including the accounting standards that apply only to government not-for-profit organizations as issued

by the Canadian Public Sector Accounting Board, and include the following significant accounting policies.

Revenue recognition

Revenue from admissions and other related services is recognized at point of sale. The Board follows the

deferral method of accounting for contributions. Unrestricted contributions are recognized as revenue when

received or receivable if the amount to be received can be reasonably estimated and collection is reasonably


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assured. Restricted contributions are deferred and recognized as revenue in the year in which the related

expenses are recognized.

Membership revenue is recognized in the statement of operations based on amortization of which all fees paid

over the length of the one to two-year membership period.

Education programs revenue is recognized once services have been provided and payment is received.

Inventories

Inventories consist of gift shop merchandise and are recorded at the lower of cost, recorded on a first-in, first-

out basis, and net realizable value.

Capital assets

Capital assets are recorded at cost and are amortized on a straight-line basis over their estimated useful lives as

follows:

Computer equipment 3 yearsOther equipment and animal structures 5 - 10 yearsFurniture 10 years

Impairment of capital assets

The Board reviews the carrying amount, amortization and useful lives of its capital assets regularly. If thecapital asset no longer has any long-term service potential to the Board, the excess of the net carrying amountover any residual value is recognized as an expense in the statement of operations.

Contributed materials and services

Agreements are entered into with corporate sponsors whereby the sponsors provide products, advertising or

entertainment support to the Zoo. In return, consideration is provided in a number of diverse ways, including

specific rights to events and promotional activities or advertising recognition. Because of the difficulty of

determining their fair value, contributed materials and services are not recognized in the financial statements.

Employee future benefits

The Board has adopted the following policies with respect to employee future benefit plans:

the Board’s contributions to a multi-employer, defined benefit pension plan are expensed when

contributions are due;

the costs of termination benefits and non-vesting and non-accumulating compensated absences are

recognized when the event that obligates the Board occurs. Costs include projected future compensation


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payments, health-care continuation costs and fees paid to the independent administrators of these plans,

calculated on a present value basis;

the costs of other employee benefits are actuarially determined using the projected benefits method pro-rated on service and management’s best estimate of retirement ages of employees, salary escalation andexpected health-care costs;

past service costs from plan amendments are recognized in the period incurred;

employee future benefit liabilities are discounted using the City’s cost of borrowing; and

net actuarial gains and losses are amortized over the expected average remaining service life of the related

employee group.

Derivative financial instruments

The Board utilizes derivative financial instruments in the management of its purchase of electricity. The Board’s

policy is not to utilize derivative financial instruments for trading or speculative purposes.

Derivative contracts entered into by the City in connection with the purchase of electricity, to which the Board is

a party, are not designated to be a hedging relationship and are recorded at their fair value as a financial asset

or a financial liability based on quoted market prices or dealer quotes with changes in fair value, if any,

recorded in the statement of operations.

Financial assets and liabilities

The Board initially measures its financial assets and liabilities at fair value. The Board subsequently measures

all its financial assets and financial liabilities at amortized cost. Changes in fair value are recognized in the

statement of operations.

Financial assets measured at amortized cost include cash, accounts receivable and long-term receivable from

the City. Financial liabilities measured at amortized cost include accounts payable and accrued liabilities.

Transaction costs are capitalized and amortized on an effective interest rate basis over the useful life of the

related financial instrument.

Foreign currency translation

Monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the

rate of exchange in effect at the statement of financial position date. Non-monetary assets and liabilities are

translated at the rates prevailing at the transaction dates. Revenue and expenses are translated at the exchange

rates on the date of the transaction. Realized exchange losses of $20,396 (2012 - $770) are included in the

statement of operations. Unrealized foreign exchange losses are included in the statement of remeasurement

gains and losses.


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Use of estimates

The preparation of these financial statements in conformity with PSAS requires management to make estimates

and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent

assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses

during the reporting period. Actual results could differ from those estimates.

3 Related party transactions - City of Toronto

a) In the normal course of operations, the Board incurs costs for various expenses payable to the City such as

hydro, legal, and other administration costs. Transactions between the City and the Board are made at the

agreed on exchange amount. In addition, the Board manages on behalf of the City the capital program for

the Zoo. As a result, the Board will incur capital expenses that are recoverable from the City and these

expenses comprise a large component of the year-end receivable with the City.

b) As part of the terms of the agreement between the Board and the City, any operating excess or deficiency is

to be transferred to or recovered from the City (note 1). These amounts are included in current accounts

receivable from the City or payable to the City and the changes during the year are as follows:

2013$

2012$

Due (to) from the City related to operating expenses -Beginning of year (878,471) 1,309,155

Amounts paid by the City during the year - (2,140,619)Excess funding (payable) receivable from the City - (47,007)

Due from (to) the City related to operating expenses - Endof year (878,471) (878,471)

c) The Board has recorded a non-interest bearing, long-term receivable in connection with the expected

recoveries of employee benefit costs (note 6) from the City, since the City is ultimately responsible for

any deficit the Board incurs.

d) In the normal course of operations, the Board purchases hydro energy services from Toronto Hydro, which

is a related party by virtue of its relationship with the City. In the current year, services purchased from

Toronto Hydro during the year amounted to $1,433,528 (2012 - $1,263,610). The amount payable to

Toronto Hydro at year-end was $157,926 (2012 - $214,486).


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4 Capital assets

The live collection of the Zoo and the major capital facilities are the property of the City. The City, through its

capital works program, financed approximately $4,673,152 (2012 - $6,434,425) of capital improvements to the

Zoo during the year. Since the capital facilities are not an asset of the Board, these amounts have not been

recorded in these financial statements.

Capital assets consist of the following:

2013

Cost$

Accumulatedamortization

$Net

$

Computer equipment 174,630 164,644 9,986Other equipment and animal structures 5,612,495 3,316,931 2,295,564Furniture 297,058 126,113 170,945

6,084,183 3,607,688 2,476,495

2012

Cost$

Accumulatedamortization

$Net

$

Computer equipment 159,651 159,651 -Other equipment and animal structures 4,103,397 2,725,271 1,378,126Furniture 221,099 96,407 124,692

4,484,147 2,981,329 1,502,818

5 Deferred revenue

Deferred revenue includes the amount of funds that have been received from membership operations and

specific grant-based operating projects the Board has not yet expended.

The changes for the year in the deferred revenue balance are as follows:

2013$

2012$

Balance - Beginning of year 3,621,743 3,758,526Amounts received and deferred 3,579,367 3,601,838Amounts recognized (3,051,446) (3,738,621)

Balance - End of year 4,149,664 3,621,743


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6 Employee benefits

The Board has a number of defined benefit plans providing pension, sick leave, gratuity benefits and other

retirement and post-employment benefits, including health, dental, life insurance and long-term disability

benefits to certain employees. Information about the Board’s defined benefit plans, other than the multi-

employer defined benefit plan have been noted, in aggregate, below.

2013$

2012$

Sick leave 2,873,260 3,101,830Other retirement and post-employment benefits 8,753,616 8,689,849

Total accrued benefit obligations 11,626,876 11,791,679Unamortized actuarial loss (318,826) (616,164)

Total employee future benefits payable 11,308,050 11,175,515

Under the sick leave benefit plan, unused sick leave can accumulate and employees may become entitled to a

cash payment when they leave the Board’s employment. The liability for the accumulated sick leave days

represents the extent to which the eligible employees’ accumulated sick leave has vested and could be taken in

cash by them on termination.

The continuity of the Board’s accrued benefit obligations is as follows:

2013$

2012$

Balance - Beginning of year 11,791,679 10,699,335Current service costs 487,848 405,813Interest cost 394,673 394,187Benefits paid (799,845) (543,196)Actuarial (loss) gain (247,479) 835,540

Balance - End of year 11,626,876 11,791,679

The total expenses related to these benefits include the following components:

2013$

2012$

Current service costs 487,848 405,813Interest cost 394,673 394,187Amortization of actuarial gain (loss) 49,859 (11,635)

932,380 788,365


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For purposes of the financial statement presentation, these expenses are included in the figures in the

statement of operations. These expenses are not included in the budget numbers, as they are not part of the

financial planning process with the City and as such they result in an excess (deficiency) of revenue over

expenses from budget.

Estimated payments made during the year are as follows:

2013$

2012$

Sick leave 286,166 188,286Other retirement and post-employment benefits 513,679 354,910

799,845 543,196

The net expense recorded by the Zoo for its post-employment benefit expense less estimated benefits paid

during the year is as follows:

2013$

2012$

Total expenses 932,380 788,365Estimated benefits paid (799,845) (543,196)

132,535 245,769

The benefit plans, as noted above, are all unfunded; however, the Board participates in reserve funds

established by the City. The amounts contributed to these reserve funds during the year were $1,864,715 (2012 -

$1,715,254) and are included in the statement of operations.

Due to complexities in valuing the liabilities, actuarial valuations are conducted on a periodic basis. The most

recent actuarial valuation was completed on December 31, 2012.

The significant actuarial assumptions adopted in measuring the Board’s accrued benefit obligations and benefit

costs are as follows:

2013%

2012%

Discount rate for accrued benefit obligationsSick leave 4.1 3.5Other retirement and post-employment benefits 3.6 - 4.4 3.1 - 3.8

Discount rate for accrued benefit costsSick leave 4.1 3.5Other retirement and post-employment benefits 3.6 - 4.4 3.1 - 3.8

Rate of compensation increase 3.0 3.0


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For measurement purposes, a 6.4% (2012 - 6.8%) annual rate of increase in the per capita cost of covered

health-care benefits was assumed. The rate is assumed to decrease gradually to 4.0% by 2020 and remain at

that level thereafter.

In addition to the above-noted plans, the Board makes contributions to the Ontario Municipal Employees

Retirement Fund, which is a multi-employer plan, on behalf of qualifying employees. The plan is a defined

benefit plan, which specifies the amount of the retirement benefit to be received by the employees based on the

length of service and rates of pay. Total employer contributions for the year ended December 31, 2013

amounted to $1,754,384 (2012 - $1,799,111).

7 Internally restricted fund

Details of the internally restricted net assets are as follows:

2013$

2012$

Invested in capital assets 2,476,495 1,502,818Ride & Revenue Development project 574,321 567,791

3,050,816 2,070,609

The Board has internally restricted $574,321 (2012 - $567,791) for the Ride & Revenue Development project,

consisting of insurance proceeds and interest earned thereon, from the monorail property damage claim for

anticipated capital improvements.

8 Animal Transaction Reserve Fund

The Animal Transaction Reserve Fund is a fund of the City and is not recorded in these financial statements.

The purpose of the Animal Transaction Reserve Fund is to accumulate all funds earned from animal trading

activity, which are available to the Zoo to be used to finance any net cost of animal trading activity. Details of

the Animal Transaction Reserve Fund are as follows:

2013$

2012$

Balance - Beginning of year 92,711 204,066Revenue

Revenue from animals sold 13,000 11,773Interest earned 5,795 6,372

ExpensesAnimals purchased (59,551) (129,500)

Balance - End of year 51,955 92,711


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9 Endangered Species Reserve Fund

The Endangered Species Reserve Fund is a fund of the City and is not recorded in these financial statements.

The Endangered Species Reserve Fund was established for the purpose of funding conservation, education and

research projects for the preservation of endangered species. Details of the Endangered Species Reserve Fund

are as follows:

2013$

2012$

Balance - Beginning of year 889,389 829,965Revenue

Interest earned 17,628 15,615Donations, grants and wishing wells 48,379 92,809

ExpensesServices and rentals (43,054) (49,000)

Balance - End of year 912,342 889,389

10 Zoo Stabilization Reserve Fund

The Zoo Stabilization Reserve Fund is a fund of the City and is not recorded in these financial statements. The

City established the Zoo Stabilization Reserve Fund for the purpose of investing in revenue generating

activities, preparing for special events in advance of the budget year and offsetting revenue shortfalls with the

objective of reducing the Zoo’s reliance on the City’s tax levy. For years beginning after December 31, 2004, any

excess funds are to be transferred to the City, unless approved otherwise, as a transfer to the Zoo Stabilization

Reserve Fund.

In the 2013 budget, the City granted the Zoo a five-year exemption starting in 2013, to allow operating

surpluses to be contributed to the Zoo Stabilization Reserve Fund. These contributions are to be applied to any

unforeseen year-end operating deficits during the five-year period. Any unapplied contributions are to be

transferred to the Zoo Animal Transaction Reserve Fund at the end of the five years. As a result of the 2013

operations, the Zoo contributed $2,938,402 to the Zoo Stabilization Reserve Fund.

11 Toronto Community Foundation

In an agreement between the Board and the dissolved Toronto Zoo Foundation, the Toronto Zoo Foundation’s

financial assets of $6,293,769 were transferred to the Toronto Community Foundation (the Foundation). The

Foundation performs a financial stewardship role and administers the funds in accordance with the terms of

the trust agreement between the Foundation and the Board.


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The value of funds administered by the Foundation as at December 31 is outlined below:

2013$

2012$

Donor restricted funds 2,370,496 2,008,260Internally restricted 2,823,781 2,392,324Unrestricted 3,148,675 2,667,571Development 29,365 24,879

8,372,317 7,093,034

The Board and the Foundation entered into a Trust Distribution Agreement on May 29, 2009, which defines

how the trust property is distributed to the Zoo and the reporting requirements for the parties.

A separate development fund agreement between the Foundation and the Board, effective August 17, 2010,

outlines the process relating to funds raised subsequent to this date by the development division of the Zoo and

transferred to the Foundation, to be held by this organization on behalf of, and for the future use of, the Zoo.

The value of the funds governed under the development fund agreement was $1,565,870 (2012 - $1,240,949).

As a result of development operations, the Board recorded a transfer to the Foundation in the amount of

$543,247. A payable of $554,591 (2012 - $11,344) has been reflected in the statement of financial position.

12 Development activities

During the year, the development activities for the Zoo are as follows:

2013$

2012$

Contributions 2,192,603 1,762,577Deferred revenue (1,160,949) (975,432)Transfer to Toronto Community Foundation 543,247 -

Development revenue 1,574,901 787,145

Contributions received for program expenses not yet incurred are reflected in deferred revenue on the

statement of financial position.

13 Capital expenditures commitment

As at December 31, 2013, the Board was contractually committed for $850,598 in capital expenditures.

Payment of these commitments is expected in 2014, based on management’s best estimate.


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14 Contingencies

In the normal course of its operations, the Board is subject to various arbitrations, litigations and claims. Where

a potential liability is determinable, management believes the ultimate disposition of the matters will not

materially exceed the amounts recorded in the accounts. In other cases, the ultimate outcome of the claims

cannot be determined at this time. Any additional losses related to claims will be recorded in the year during

which the liability is determinable.

15 Pay equity

An accrual for pay equity amounts due to employees and former employees of $98,650 (2012 - $203,456) is

included in accounts payable and accrued liabilities. Any increase or decrease to this accrual for pay equity has

no impact on the excess revenue over expenses since there is an equal and offsetting adjustment to the transfer

of funding to the City.

16 Budgeted figures

The budgeted figures presented in the statement of operations have been obtained from the 2013 budget

approved by the Council of the City of Toronto.

17 Comparative figures

Certain comparative figures have been reclassified to conform to the current year’s presentation.


PwC

Appendix C: Management representation letter

[Please print on Zoo letterhead]

June 5, 2014

Michael NicolóPricewaterhouseCoopers LLPNorth American Centre5700 Yonge Street, Suite 1900North York, Ontario M2M 4K7

We are providing this letter in connection with your audit of the financial statements of the Board ofManagement of the Toronto Zoo (“the Zoo”) as of December 31, 2013 and for the year then ended forthe purpose of expressing an opinion as to whether such financial statements present fairly, in allmaterial respects, the financial position, the results of operations, remeasurement gains and losses andthe cash flows of the Zoo in accordance with Canadian public sector accounting standards.

Management’s responsibilitiesWe have fulfilled our responsibilities, as set out in the terms of the audit engagement letter datedNovember 1, 2010. In particular, we confirm to you that:

We are responsible for the preparation and fair presentation of the financial statements inaccordance with Canadian public sector accounting standards;

We are responsible for designing, implementing and maintaining an effective system of internalcontrol over financial reporting to enable the preparation and fair presentation of the financialstatements that are free from material misstatement, whether due to fraud or error. In this regard,we are responsible for establishing policies and procedures that ensure financial statements areprepared in accordance with Canadian public sector accounting standards;

We have provided you with all relevant information and access, as agreed in the terms of the auditengagement; and

All transactions have been recorded in the accounting records and are reflected in the financialstatements.

We confirm the following representations:

Preparation of financial statementsThe financial statements include all disclosures necessary for fair presentation in accordance withCanadian public sector accounting standards and disclosures otherwise required to be included thereinby the laws and regulations to which the Zoo is subject.

We have appropriately reconciled our books and records (e.g. general ledger accounts) underlying thefinancial statements to their related supporting information (e.g. sub ledger or third party data). Allrelated reconciling items considered to be material were identified and included on the reconciliationsand were appropriately adjusted in the financial statements. There were no material unreconcileddifferences or material general ledger suspense account items that should have been adjusted orreclassified to another account balance. There were no material general ledger suspense account itemswritten off to a balance sheet account, which should have been written off to a profit and loss accountand vice versa. All intergovernmental unit accounts have been eliminated or appropriately measuredand considered for disclosure in the financial statements.

2

Accounting policiesWe confirm that we have reviewed the Zoo’s accounting policies and, having regard to the possiblealternative policies, our selection and application of accounting policies and estimation techniques usedfor the preparation and presentation of the financial statements is appropriate in the Zoo’s particularcircumstances to present fairly in all material respects its financial position, results of operations,remeasurement gains and losses and cash flows in accordance with Canadian public sector accountingstandards. We are eligible to and have selected to apply the standards for government not-for-profitorganizations in CPA Canada Public Sector Accounting Handbook Sections PS 4200 to PS 4270.

Internal controls over financial reportingWe have designed disclosure controls and procedures to ensure material information relating to theZoo, is made known to us.

We have designed internal control over financial reporting to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of the financial statements for externalpurposes in accordance with Canadian public sector accounting standards.

We have disclosed to you all deficiencies in the design or operation of disclosure controls andprocedures and internal control over financial reporting that we are aware.

Disclosure of informationWe have provided you with:

Access to all information of which we are aware that is relevant to the preparation of the financialstatements, such as records, documentation and other matters including:− Contracts and related data;− Information regarding significant transactions and arrangements that are outside of the

normal course of business;− Minutes of the meetings of shareholders, management, directors and committees of directors.

The most recent meetings held were February 24, 2014; Additional information that you have requested from the Zoo for the purpose of the audit; and Unrestricted access to persons within the entity from whom you determined it necessary to obtain

audit evidence.

Completeness of transactionsAll contractual arrangements entered into by the Zoo with third parties have been properly reflected inthe accounting records and, where material (or potentially material) to the financial statements, havebeen disclosed to you. We have complied with all aspects of contractual agreements that could have amaterial effect on the financial statements in the event of non-compliance.

FraudWe have disclosed to you:

The results of our assessment of the risk that the financial statements may be materially misstatedas a result of fraud;

All information in relation to fraud or suspected fraud of which we are aware affecting the Zooinvolving management, employees who have significant roles in internal control or others wherethe fraud could have a material effect on the financial statements; and

All information in relation to any allegations of fraud, or suspected fraud, affecting the Zoo’sfinancial statements, communicated by employees, former employees, analysts, regulators orothers.

3

Compliance with laws and regulationsWe have disclosed to you all aspects of laws, regulations and contractual agreements that may affect thefinancial statements, including actual or suspected non-compliance with laws and regulations whoseeffects should be considered when preparing the financial statements.

We are not aware of any illegal or possibly illegal acts committed by the Zoo’s directors, officers oremployees acting on the Zoo’s behalf.

Accounting estimates and fair value measurementsSignificant assumptions used by the Zoo in making accounting estimates, including fair valueaccounting estimates, are reasonable.

For recorded or disclosed amounts in the financial statements that incorporate fair valuemeasurements, we confirm that:

The measurement methods are appropriate and consistently applied; The significant assumptions used in determining fair value measurements represent our best

estimates, are reasonable and have been consistently applied; No subsequent event requires adjustment to the accounting estimates and disclosures included in

the financial statements; and The significant assumptions used in determining fair value measurements are consistent with the

Zoo’s planned courses of action. We have no plans or intentions that have not been disclosed toyou, which may materially affect the recorded or disclosed fair values of assets or liabilities.

Significant estimates and measurement uncertainties known to management that are required to bedisclosed in accordance with CPA Canada Public Sector Accounting Handbook Section PS 2130,Measurement Uncertainty, have been appropriately disclosed.

Related partiesWe confirm that we have disclosed to you the identity of the Zoo’s related parties as defined by CPACanada Public Sector Accounting Handbook Section PS 4260, Disclosure of Related Party Transactionsby Not-for-Profit Organizations, and all the related party relationships and transactions.

The identity, relationship, balances and transactions with related parties have been properly recordedand adequately disclosed in the financial statements, as required by Canadian public sector accountingstandards.

The list of related parties attached to this letter as Appendix A accurately and completely describes ourrelated parties and the relationships with such parties.

Going concernWe have no plans or intentions that may materially alter the carrying value or classification of assetsand liabilities reflected in the financial statements (e.g. to dispose of the business or to ceaseoperations).

Assets and liabilitiesWe have satisfactory title or control over all assets.

Receivables, other than contributions receivable accounted for in accordance with the CPA CanadaPublic Sector Accounting Handbook Section PS 4220, Contributions Receivable, recorded in thefinancial statements, represent bona fide claims against debtors for sales or other charges arising on or

4

before the balance sheet date and are not subject to discount except for normal cash discounts.Receivables classified as current do not include any material amounts that are collectible after one year.All receivables have been appropriately reduced to their estimated net realizable value.

We confirm that contributions received in the year have been recognized as revenue in the appropriatefund and reflect restrictions placed on the use of the contributions by the donor.

We have recorded or disclosed, as appropriate, all liabilities, in accordance with Canadian public sectoraccounting standards. All liabilities and contingencies, including those associated with guarantees,whether written or oral, under which are contingently liable in accordance with the CPA Canada PublicSector Accounting Handbook Section PS 3300, Contingent Liabilities, have been disclosed to you andare appropriately reflected in the financial statements.

Litigation and claimsAll known actual or possible litigation and claims, which existed at the balance sheet date or exist now,have been disclosed to you and accounted for and disclosed in accordance with Canadian public sectoraccounting standards, whether or not they have been discussed with legal counsel.

Misstatements detected during the auditCertain representations in this letter are described as being limited to those matters that are material.Items are also considered material, regardless of size, if they involve an omission or misstatement ofaccounting information that, in light of surrounding circumstances, makes it probable that thejudgment of a reasonable person relying on the information would have been changed or influenced bythe omission or misstatement.

We confirm that the financial statements are free of material misstatements, including omissions.

The effect of the uncorrected misstatement in the financial statements, as summarized in theaccompanying schedule (Appendix B), is immaterial, both individually and in the aggregate, to thefinancial statements taken as a whole. We confirm that we are not aware of any uncorrectedmisstatements other than that included in Appendix B.

The adjusted misstatement identified during your audit and summarized in the attached table(Appendix C) has been approved by the Zoo and adjusted in the financial statements.

Cash and banksThe books and records properly reflect and record all transactions affecting cash funds, bank accountsand bank indebtedness of the Zoo.

All cash balances are under the control of the Zoo, free from assignment or other charges andunrestricted as to use, except as disclosed to you.

The amount shown for cash on hand or in bank accounts excludes trust or other amounts which are notthe property of the Zoo.

Arrangements with financial institutions involving compensating balances or other arrangementsinvolving restrictions on cash balances, line of credit or similar arrangements have been properlydisclosed.

All cash and bank accounts and all other properties and assets of the Zoo are included in the financialstatements as at December 31, 2013.

5

Accounts receivable

All amounts receivable by the Zoo were recorded in the books and records.

Amounts receivable amounted to $2,177,522 and are considered to be fully collectible.

Amounts receivable are not subject to discount, except for normal cash discounts, which areappropriately provided for.

All receivables were free from hypothecation or assignment as security for advances to the Zoo, exceptas hereunder stated.

The Zoo has disclosed to us all transfers of receivables (including securitizations) that have occurredduring the year.

All contributions receivable that are recorded in the balance sheet are reasonably assured of collectionand we have made you aware of all relevant facts and circumstances in making this determination.Recognized contributions receivable do not include any bequests.

Inventory

Inventories classified as held for resale and held for consumption in the financial statements are statedat the lower of cost or net realizable value, cost being determined on the basis of, with due provisionrecorded to reduce all damaged, wholly or partially obsolete, or unusable inventories to their estimatedselling price less estimated cost to sell. Inventory quantities at the balance sheet dates were determinedfrom physical counts or from the Zoo’s perpetual inventory records, which have been adjusted on thebasis of physical inventories taken by competent employees at year-end. Liabilities for amounts unpaidare recorded for all items included in inventories at balance sheet dates, and all quantities billed tocustomers at those dates are excluded from the inventory balances.

Provision has been made to reduce excess or obsolete inventories to their estimated net realizablevalue.

The Zoo has chosen to recognize inventories and other contributions of materials and services. Allrecognized contributed materials and services have been recorded at fair value when the fair value canbe reasonably estimated and they are used in the normal course of the organization’s operations andwould otherwise have been purchased. The amounts recorded as fair value represent management’sbest estimates of these amounts.

There have been no events conditions or changes in circumstances that indicate inventory held forconsumption will no longer be used or consumed in the Zoo’s operations.

Capital assets

All charges to capital asset accounts represented the actual cost of additions or the fair value at the dateof contribution.

All contributed tangible capital assets have been recorded at fair value at the date of the contribution.

No significant capital asset additions were charged to repairs and maintenance or other expenseaccounts.

6

Book values of capital assets sold, destroyed, abandoned or otherwise disposed of have been eliminatedfrom the accounts.

Capital assets owned by the Zoo are being depreciated on a systematic basis over their estimated usefullives, and the provision for depreciation was calculated on a basis consistent with that of the previousdate. During the year, we reviewed the appropriateness of the depreciation policy and estimate ofuseful lives for tangible capital assets, taking into account all pertinent factors. Any changes in ourassessment from the prior year have been adequately disclosed and reflected in the financialstatements.

There have been no events, conditions or changes in circumstances that indicate that a capital asset nolonger contributes to the Zoo’s ability to provide goods and services. We believe that the carryingamount of the Zoo’s long-lived capital assets is fully recoverable in accordance with CPA CANADAPublic Sector Accounting Handbook Section PS 4230, Capital Assets Held by Not-for-ProfitOrganizations.

Deferred revenue

All material amounts of deferred revenue meet the definition of a liability and were appropriatelyrecorded in the books and records.

Contributions

We have recorded all contributions received during the period in the financial statements. We havedisclosed the existence and nature of all external restrictions on material contributions received in theyear.

Retirement benefits, post-employment benefits, compensated absences and terminationbenefits

All arrangements to provide retirement benefits, post-employment benefits, compensated absences andtermination benefits have been identified to you and have been included in the actuarial valuation asrequired.

The details of all pension plan amendments since December 31, 2012, the date of the last actuarialvaluation, have been identified to you.

The actuarial valuation dated December 31, 2012 incorporates management’s best estimates.

The actuarial assumptions and methods used to measure liabilities and costs for financial accountingpurposes for pension and other post-retirement benefits are appropriate in the circumstances.

The Zoo plans to continue to make frequent amendments to the pension or other post-retirementbenefit plans, which may affect the amortization period of prior service cost.

All changes to the plan and the employee group and the plan’s performance since the last actuarialvaluation have been reviewed and considered in determining the plan expense and the estimatedactuarial present value of accrued pension benefits and value of plan assets.

The Zoo’s actuaries have been provided with all information required to complete their valuation as atDecember 31, 2012.

7

We confirm that the extrapolations are accurate and include the proper reflection of the effects ofchanges and events occurring subsequent to the most recent valuation that had a material effect on theextrapolations.

The employee future benefit costs, assets and obligations have been determined, accounted for anddisclosed in accordance with CPA Canada Public Sector Accounting Handbook Section PS 3250,Retirement Benefits and CPA Canada Public Sector Accounting Handbook Section PS 3255, Post-employment Benefits, Compensated Absences and Termination Benefits. In particular:

The significant accounting policies that the Zoo has adopted in applying CPA Canada Public SectorAccounting Handbook Section PS 3250 and CPA Canada Public Sector Accounting HandbookSection PS 3255 are accurately and completely disclosed in the notes to the financial statements.Each of the best estimate assumptions used reflects management’s judgment of the most likelyoutcomes of future events.

The best estimate assumptions used are, as a whole, internally consistent, and consistent with theasset valuation method adopted.

The discount rate used to determine the accrued benefit obligation was determined by reference tothe Zoo’s borrowing rates at the measurement date on high-quality debt instruments with cashflows that match the timing and amount of expected benefit payments; or inherent in the amountat which the accrued benefit obligation could be settled.

The assumptions included in the actuarial valuation are those that management Buck Consultantsto use in computing amounts to be used by management in determining pension costs andobligations and in making required disclosures in the above-named financial statements, inaccordance with CPA Canada Public Sector Accounting Handbook Section PS 3250.

In arriving at these assumptions, management has obtained the advice of Buck Consultants, but hasretained the final responsibility for the assumptions.

The source data and plan provisions provided to the actuary for preparation of the actuarial valuationare accurate and complete.

The percentage of the fair value of total plan assets represented by each major category held at themeasurement date is not disclosed because it is not expected to be useful in understanding the risksand expected long-term rate of return for the plan assets.

All changes to plan provisions or events occurring subsequent to the date of the actuarial valuation andup to the date of this letter have been considered in the determination of pension costs and obligationsand as such have been communicated to you as well as to the actuary.

Statements of operations, changes in net assets and remeasurement gains and losses

All transactions entered into by the Zoo have been recorded in the books and records presented to you.

All amounts have been appropriately classified within the statements of operations, changes in netassets and remeasurement gains and losses.

Any changes to internal fund restrictions that are reflected in the financial statements, but not yet

8

approved by the Board of Directors will be approved prior to the Board of Directors approving thefinancial statements.

The accounting principles and policies followed throughout the year were consistent with prior year’spractices (, except as disclosed in the financial statements).

Events after balance sheet dateWe have identified all events that occurred between the balance sheet date and the date of this letterthat may require adjustment of, or disclosure in, the financial statements, and have effected suchadjustment or disclosure.

Yours truly,

Board of Management of the Toronto Zoo

John Tracogna, Chief Executive Officer

Robin Hale, Chief Operating Officer

Paul Whittam, Manager of Financial Services


PwC

Appendix D: Improvements proposed by theAccounting Standards Board and Public SectorAccounting Board

In April 2013, the Accounting Standards Board (AcSB) and Public Sector Accounting Board (PSAB) issued astatement of principles on Improvements to Not-for-Profit Standards. These principles are expected to beincorporated into future exposure drafts issued by each Board. The proposals would affect Part III of the CICAHandbook - Accounting, and the CICA Public Sector Accounting (PSA) Handbook including the PS 4200 series ofSections, to improve existing standards for financial reporting by NFPOs. The effects of these proposals would besignificant. The timing of the exposure drafts and effective dates for individual standards has not yet beendetermined.

Key proposals affecting private and public sector NFPOs

A contribution would be recognized as an asset when the NFPO has control of the contribution, would exercisethat control if necessary and can reasonably estimate the amount to be received. A contribution would berecognized as revenue, except when the contribution gives rise to an obligation (liability).

These proposals would replace the deferral and restricted fund methods with a different model of revenuerecognition, resulting in significant changes to how contributions - including endowments - are accounted for.Accounting for contribution pledges could also be affected.

A capital asset would be recognized by an NFPO regardless of the size of the NFPO.

Key proposals affecting private sector NFPOs

The accounting for tangible capital assets would follow Part II of the CICA Handbook, including requirementsfor measurement and disclosure of held-for-sale assets. Additional guidance on the application of write-downsof tangible capital assets would be provided.

Collections of works of arts and historical treasures would be accounted for at either cost or nominal value.

Controlled NFPOs would be consolidated (excluding a large number of immaterial organizations) andcontrolled profit-oriented enterprises would be accounted for using the equity method.

Financial statement presentation would follow the standards in Part II, requiring expenses by both functionand object (nature).

Key proposals affecting public sector NFPOs (GNFPOs)

The accounting for tangible capital assets, controlled and related entities, and financial statement presentationwould follow the standards in the CICA PSA Handbook currently followed by governments and governmentorganizations, removing current options available.

The financial statements would require presentation of a “net debt” indicator (rather than net assets) andinclude a statement of change in net debt and budget information. This could be a significant presentationchange for GNFPOs.

The full publication can be found at: http://www.frascanada.ca/standards-for-not-for-profit-organizations/documents-for-comment/item73780.pdf

http://www.frascanada.ca/standards-for-not-for-profit-organizations/documents-for-comment/item73780.pdf

http://www.frascanada.ca/standards-for-not-for-profit-organizations/documents-for-comment/item73780.pdf


PwC

Appendix E: Director Connect Newsletter

Follow Us

DirectorConnect Your corporate governance community

January 2014

Welcome to the January 2014 issue of DirectorConnect, PwC’s online information community for directors. Register now for PwC’s Center for Board Governance webcast Key considerations for board and audit committee members. Join your peers and our panel of experts as they discuss the issues that should be top of mind for board and audit committee members in 2014. According to our 17th Annual Global CEO Survey, 71% of Canadian CEOs believe that a shifting demographic will have a major impact on their organization over the next five years. With 42% believing the government is not doing enough to create jobs for young people, the majority of Canadian CEOs have made it their organizational priority to create these jobs themselves. Is your organization prepared for this coming shift? Find out how CEOs globally feel about the important issues affecting their organizations. We invite you to view the results of our 17th Annual Global CEO Survey by clicking here. View the Canadian responses, click here. What makes the millennial generation so different then the generations that came before? Find out what directors and executives should know about engaging your multi-generational workforce and keeping your Millennial customers happy at our upcoming Audit Committee Connect event series. Save the date for your local city: Vancouver – April 1, 2014 Calgary – April 2, 2014 Toronto – April 15, 2014 As always, we welcome your comments and feedback on this newsletter and the DirectorConnect program. David Forster Leader, DirectorConnect Program

To speak to a PwC professional about governance contact David Forster

For information on PwC's directors' programs contact Carly Toth

Visit DirectorConnect for the latest news and insights on issues relevant to directors.

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A Canadian perspective for directors The board’s role in strategic planning – An interview with Chris Clark, former CEO of PwC Canada We sat down with Chris Clark, former CEO of PwC Canada and on the board of five public companies and two not-for-profit organizations, to explore his thoughts on how boards are getting involved in their organization’s strategy and the role boards can play in ensuring a commitment to transparency and disclosure are considered in the strategic plan.

The Directors’ Cut – The power of data: What directors need to know about Big Data, analytics and the evolution of information This paper summarizes the discussions of our recent Audit Committee Connect events on Big Data and information management. Find out how your company can mine the mountain of data they sit on and start to transform your business. Paying Taxes 2014: The Canadian summary Paying Taxes is a unique study from PwC, World Bank and IFC. Now in its ninth year, the study provides data on tax systems in 189 economies around the world, with an ability to monitor tax reform.

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Key considerations for board and audit committee members - Webcast This webcast will focus on the issues top of mind for board and audit committee members. The webcast will address the regulatory environment, financial reporting developments, cybercrime and board leadership. Please join us on Wednesday, January 29 at 2:00pm ET for this one-hour webcast. Webcast date and time: Wednesday, January 29, 2014 2:00pm - 3:00pm ET CPE credits: This webcast will qualify for 1.0 hour CPE credit. Read more in the December issue of At a glance which can be downloaded at the link below: Key considerations for board and audit committee members, 2013-2014 version 2013 Annual Corporate Directors Survey & 2013 Investor Survey comparison How do corporate directors think they’re doing in their oversight roles? How does this compare to what investors think? What attributes do investors say are important in prospective board members? What about directors? We asked directors and investors about these and other boardroom matters, and the messages vary. Often, it depends on whose shoes you're in.

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BoardroomDirect: Update on current board issues – December 2013 This issue of BoardroomDirect addresses the changing boardroom agenda and outlines topics that can help enhance the quality of board and management discussions in this coming year. BoardroomDirect Special Edition: Audit Committee Disclosure This special edition of BoardroomDirect includes an analysis of a new report on audit committee disclosure from a collaboration of organizations led by the Center for Audit Quality (CAQ).

The quarter close – Directors edition: A look at this quarter’s financial reporting issues – Q4 2013 The Q4 2013 edition focuses on the upcoming revenue recognition standard, structured payables programs, implications of government tax incentives, retiree health plans, implications of stock repurchases, the PCAOB's revised proposal on disclosing information about the auditors, corporate governance issues and SEC rule making. In brief: PCAOB reproposes amendments to disclose name of engagement partner and certain other participants in audits (No. 2013-49) On December 4, the Public Company Accounting Oversight Board ("PCAOB" or the “Board”) reproposed for public comment amendments to the PCAOB’s auditing standards that would require disclosure in the auditor’s report of the name of the engagement partner and information about certain other participants in the audit. Director dialogue with shareholders – what you need to consider In most companies, management usually handles communications with investors, but at times, direct communication between investors and directors can be beneficial. This book, jointly written by the PwC Center for Board Governance and attorneys from Weil Gotshal & Manges is a valuable resource.

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Appendix F: 2014 Federal budget – How it affects youand the charitable and not-for-profit sector

Tax Insightsfrom Tax ServicesIssue 2014-08

2014 Federal budget: How it affectsyou and the charitable and not-for-profit sector

February 12,2014

In brief

This Tax Insights considers proposals in Canada's February 11, 2014 federal budget that affect thecharitable and not-for-profit sector.

In detail

Charities and giving

Donations of ecologicallysensitive land

Current rule

Tax relief for donations ofecologically sensitive land, oreasements, covenants andservitudes on that land, isclaimable in:

• the year the donation ismade, or

• any of the following fivetaxation years of the donor

Proposal

The donation carry-forwardperiod is extended from fiveyears to ten for such donationsmade after February 10, 2014.

Donations of certified culturalproperty

Current rule

Donations of certified culturalproperty are measured at fairmarket value as determined bythe Canadian Cultural PropertyExport Review Board for thepurpose of determining thevalue of the donation.

Proposal

The budget introduces a rulelimiting the value of a certifiedcultural property donation to itscost amount to the donor if theproperty was acquired as part ofa tax shelter giftingarrangement.

The proposed restriction appliesto donations made afterFebruary 10, 2014.

Estate donations

Proposals

Donations made by a will, andthose made by designationunder a:

• registered retirementsavings plan

• registered retirementincome fund

• tax-free savings account, or

• life insurance policy

will no longer be deemed to bemade by the individualimmediately before theindividual's death.

Charitable donations of giftsmade as a consequence of thedonor's death will be deemed tohave been made bytheindividual's estate at the timethe property is transferred to aqualified donee, if the transferoccurs within 36 months afterdeath.

pwc www.pwc.com/ca/taxinsights

Tax Insights

The trustee of the individual's estatewill have the flexibility to allocate theavailable donation among:

• the taxation year of the estate inwhich the donation is made

• an earlier taxation year of theestate, and

• the last two taxation years of theindividual

The proposals apply to donationsmade in the context of a death thatoccurs after 2015, providing greaterflexibility for gifts made through adonor's will or as a consequence of adonor's death.

Charity tax compliance andelectronic access

Proposals

The federal government will providefunding to the Canada RevenueAgency (CRA) to implement a systemto permit electronic filing of charityapplications and annual T3oloregistered charity information returnswithin the next five years.

Charities will be allowed to conductcertain aspects of their charitablelottery operations electronically,including electronic ticket sales andthe online issuance of lottery ticketsand receipts.

Amendments will be made to theCriminal Code to accommodate thesechanges.

State-supported terrorism

Proposals

If a Canadian registered charity or aCanadian registered amateur athleticassociation accepts a donation afterFebruary 10, 2014, from a state (or a

state agency) that is considered to be asupporter of terrorism under the StateImmunity Act, its application forregistration can be refused or itsexisting registration can be revoked atthe discretion of the Minister ofNational Revenue.

Public consultation for non-profitorganizations (NPOs)

The budget did not announce anyspecific measures that will affect thetax exemption criteria for non-profitorganizations.

The federal government stated itsconcerns that certain organizationsclaiming income tax exemption as anon-profit organization were 'earningprofits that are not incidental tocarrying out the organization's non-profit purposes, making incomeavailable for the personal benefit ofmembers or maintainingdisproportionately large reserves.'

These concerns arose from the CRA'sreview of NPOs over the previousthree and a half years under its NPORisk Identification Project.

The federal government continues toreview whether the income taxexemption and related reportingrequirements for non-profitorganizations remain properlytargeted and provide sufficienttransparency and accountability.

A consultation paper in respect of theincome tax exemption requirementsand related reporting requirementsfor non-profit organizations will bereleased for commentary.

The good news is that the federalgovernment will exclude from its

review registered charities andamateur athletic associations, twogroups of tax-exempt organizationsthat are already heavily regulated.

Consultation on socialfinanceand social enterprise

The federal government announced itscontinued work with leaders in thenot-for-profit and private sectors toexplore the potential for social financeinitiatives and to examine the barriersto their success.

In December 2013, the Minister ofEmployment and Social Developmentcreated a new Ministerial AdvisoryCouncil on Social Innovation, whichincludes experts and practitioners inthe fields of social finance and socialenterprise.

GST/HSTchangesfor the healthcare sector

Proposals

Proposed changes relating to thehealth care sector include:

• expanding the existing exemptionfor training services that assistindividuals with a disorder ordisability to include the services ofdesigning a training plan

• expanding the list of GST/HSTexempt health care services toinclude acupuncture, ornaturopathic services supplied bya naturopathic doctor, if renderedto an individual

• zero-rating eyewear speciallydesigned to treat a defect of visionby electronic means if supplied onthe written order of a physician oroptometrist for use by a consumernamed in the order

2

pwc

Tax Insights

Let's talk

For a deeper discussion of the implications of these budget proposals, please contact your PwC advisor, or:

Brenda Lee-Kennedy

Audrey Diamant+1 (416) 218 1452

+1 (416) 687 [email protected]

audrey.i.diamantca.pwc.com

2014 budgets: PwC will keep you up-to-date on tax changes in Canada's federal and provincial budgets.Go to www.pwc.com/ca/budget

© 2014 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights reserved.

PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure forfurther details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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