TSSA Annual Report - ontla.on.ca · TSSA actively pursues a best practices approach to corporate...

Technical Standards and Safety Authority

2004/2005 A N N U A L R E P O R T

T H E N EW FAC EOF SAF E TY

TSSA AR 2004 FINALv7.0 9/1/05 8:08 PM Page a

Technical Standards and Safety Authority (TSSA) is an organizationdedicated to increasing public safety in the home, workplace and at recre-ational facilities. It was created in 1996 as a not-for-profit, self-fundeddelegated administrative authority to administer and enforce public safetylaws in designated industry sectors: boilers and pressure vessels, operatingplants, elevating devices, fuel handling and stuffed/upholstered articles. It is also involved in the training and certification of operating engineers andtechnicians. In addition, TSSA has the ability to engage in discretionary services as long as it does not detract from or conflict with its delegatedresponsibilities.

The corporation’s range of safety services includes public education andconsumer information, training and certification, licensing and registration,engineering design review, inspections, investigations, safety managementconsultation, and enforcement and prosecution activities.

Working with partners in industry, government, advisory councils and thepublic, TSSA strives for a goal of zero serious injuries and fatalities in itsregulated sectors. The corporation continues its work to recognize andrespond to the needs of its customers and its employees to enhance publicsafety. Through its commitment to creating a work environment that isconducive to high morale and performance for its employees, and serviceexcellence for its customers, TSSA is moving towards achieving its vision ofbecoming the world leader in public safety services.

TSSA has a wholly owned subsidiary, TSSA Services Inc., which was incorpo-rated January 9, 2003 under the laws of the State of Georgia, as a U.S.Domestic Profit Corporation. The subsidiary had no operations in thecurrent period.

On The Cover:

Debra Thiel, Customer Service Advisor

Gord Kanani, Senior Special Devices Engineer, Elevating and Amusement Devices Safety Program

Christina Passfield, Inspector, Elevating and Amusement Devices Safety Program

Fiscal Year 2004/2005Performance Highlights

Technical Standards and Safety AuthorityCorporate Profile

Over the course of fiscal year 2004/2005, TSSA:

• introduced a comprehensive customer service enhance-ment strategy; based on results of previous customersatisfaction surveys and an internal assessment ofservice delivery processes, the focus of the strategy ison improving key business processes to alleviatesystemic obstacles to enhanced customer services;

• developed and delivered safety training programsspecifically designed to address knowledge gaps withowners and contractor groups, including propertymanagers’ training courses for boilers, and weldingand repair training programs;

• completed 675 audits under the repair and pipingcontractor audit program in response to an industryrequest to ensure contractors worked to appropriatestandards;

• delivered root cause analysis training – designed toenhance risk-based maturity and add to an ability toidentify root causes – to all inspectors in all programs;

• realized new safety partnerships, including with theOffice of the Fire Marshal, the Toronto TransitCommission and the Ontario Snow Resorts Association;

• introduced a Discretionary Services Policy, which hasbeen accepted by the Ontario government and hasreceived support from industry representatives;

• rationalized and simplified its management structure,to streamline and flatten the organization; and

• received the international Arthur Quern Quality Awardfrom the Risk and Insurance Management Society Inc.,for significant contributions in the field of riskmanagement and safety improvement.

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2004/2005 A N N U A L R E P O R T

The Technical Standards and Safety

Authority presents the ‘new face of safety’.

It is characterized by an active attitude and

a new focus on results. It will be evidenced

through the corporation’s commitment to

creating a work environment that is

conducive to high morale and performance

for its employees, and service excellence

for its customers.

CONTENTS

A Message from the Chair 2

Reporting and Corporate Oversight 3

A Message from the President andChief Executive Officer 5

The New Face of Safety 6

Going Forward with Public Safety 12

Performance Reporting:Balanced Scorecard 18

Fiscal Year 2005/2006 Outlook 25

Management’s Discussion and Analysis 26

Management Responsibility forFinancial Reporting 28

Auditors’ Report 29

Consolidated Financial Statements 30

Notes to ConsolidatedFinancial Statements 33

Corporate Information 38

TSSA AR 2004 FINALv7.0 9/1/05 6:06 PM Page 1

T E C H N I C A L S T A N D A R D S A N D S A F E T Y A U T H O R I T Y2

A Message from the Chair

Last year my message as Chair focused on TSSA’s commitment

to transparency, accountability and good governance. I am

confident in saying that significant energy and efforts have

been devoted to demonstrating TSSA’s commitment to these

principles in the past year.

Since our inception in 1996, we have continued to

evolve to the point where our vision of becoming a world

leader in safety services is more than wishful thinking.

TSSA has made steady progress on the path to

becoming a risk-based, multifaceted and prevention-oriented

organization committed to the safety of the public in

Ontario. Our commitment to public safety is showing results.

The fact that TSSA is poised to offer its safety services, in fact

the benefits of the entire “safety system” approach to those

outside Ontario, is clear indication we are going forward with

the right product, the right people and the right approach to

service delivery.

The things we have done well in the past – consolidating

our safety expertise, building healthy, productive partnerships,

identifying and responding to customer needs, and developing

strong technical competencies – have secured the foundation

for our goals in the future.

If I could list accomplishments I am most proud of as

Chair, I would cite our unwavering commitment to customer

service, the high calibre and commitment to safety of

employees, our leading governance practices, and the quest

for improvement and innovation evident in the development

of the safety system approach. All of these are worth

celebrating; however, I would not suggest for a moment that

it is time to rest on our laurels.

TSSA has made great strides as an organization, with

a clear plan to move forward with confidence in pursuit of

challenging new objectives.

In September 2005, I will complete my term as Chair

of TSSA’s Board of Directors, having served on the founding

Board of TSSA since 1997. I would like to pay tribute to all the

Directors who have served with distinction and dedication.

Their engagement with TSSA’s mission, their governance skills

and their commitment to public safety have been exemplary.

I am confident TSSA is now an organization endowed with a

strong foundation, a positive track record, a skilled workforce

and Board and executive leadership to make strides in pursuit

of safety goals. Clearly, new stakes are in the ground and TSSA

is moving in the right direction.

Glenna Carr

Chair, Board of Directors

M O V I N G F O R WA R D

W I T H C O N F I D E N C E


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TSSA actively pursues a best practices approach to corporate

governance and corporate disclosure. As a not-for-profit

corporation without share capital, TSSA is committed to the

principles of transparency and accountability in all aspects of

its operations.

TSSA’s Board of Directors is responsible for promoting

the stewardship of the corporation, including promoting

sound corporate governance practices. The Board provides

oversight of the organization and takes a leading role in the

establishment of the corporation’s strategic direction. The

Board and senior management monitor emerging governance

best practices, with a view to adopting those that would best

serve to improve and enhance TSSA’s governance regime.

Among its key responsibilities, the Board:

• regularly reviews with management the strategic environ-

ment, the emergence of new risks and opportunities, and

the implications for TSSA’s strategic direction;

• approves strategic plans that take into account TSSA’s

major risks and opportunities, and oversees management of

those risks;

• charges the President and Chief Executive Officer of the

corporation with the general management and direction of

the business, and affairs of the corporation;

• appoints, monitors and assesses the performance of the

President and Chief Executive Officer;

• oversees the appointment, monitoring and succession

planning for senior management;

• monitors the external communications of the corporation,

including public disclosures;

• approves the fiscal plan and ensures the integrity of the

corporation’s reported financial performance.

During the fiscal year 2004/2005, TSSA accomplished

a number of objectives related to corporate governance.

Following a review of best practices, the organization

approved revised and updated terms of reference for each

Board committee. It also approved and completed a new

process for the selection of a Board Chair, and it completed

R E P O R T I N G A N D

C O R P O R A T E O V E R S I G H T

TSSA’s Board of Directors is responsiblefor promoting the stewardship of thecorporation, including promoting sound corporate governance practices.The Board provides oversight of the organization and takes a leading role inthe establishment of the corporation’sstrategic direction.



position profiles for the Board Chair, and the President and

Chief Executive Officer.

As well, TSSA completed a skills assessment of directors,

which served to enhance the organization’s Board member

profile, in support of the recruitment of new directors.

TSSA provides transparent performance reporting by

way of this annual report and its yearly business plan. All of

these documents are also available through the corporation’s

website at www.tssa.org.

TSSA also reviews its performance with the Ontario

government on a quarterly basis utilizing a performance

report that is consistent with the company’s risk-based

approach to safety services. The quarterly reports include two

main features:

• risk assessment inputs, such as the number of design

reviews completed, the number of inspectors and inspections,

and the number of certifications; and

• risk control tools, such as the number of Director’s Orders

issued, completed prosecutions, convictions and the value

of the awards, and public awareness activities.

In keeping with good governance practices, TSSA’s

Board of Directors has adopted a board charter. The charter

describes the Board’s mandate, accountability and composition,

and sets out a board-specific code of conduct. The charter is

also available through the corporation’s website.

In keeping with good governancepractices, TSSA’s Board of Directors hasadopted a board charter. The charterdescribes the Board’s mandate, accountability and composition, and sets out a board-specific code of conduct.


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A Message from the President and

Chief Executive Officer

Having recently joined TSSA, I spent considerable time during

my initial months learning about the organization, and the

views and ideas of its employees and external stakeholders.

Any organization’s success depends on the capabilities and

commitment of its employees; therefore, a top priority for me

is to ensure our work environment is optimally conducive to

high morale and performance. This will enable us to attract

and retain the top resources necessary to deliver high quality

safety services in Ontario and fulfill our vision of becoming

the world leader in public safety services. As such, nurturing a

high performing team is one of our four interrelated strategic

priorities for the upcoming plan period.

With respect to our other strategic priorities, first

and foremost, we are committed to enhancing public safety.

This is the mandate of our organization and what each of

us strives for in all of our actions. We are committed to a

journey towards zero serious injuries and fatalities. We

will work with industry, our advisory councils and other

stakeholders to ensure that Ontario is the safest jurisdiction

possible with respect to the sectors we regulate.

While our organization is unique in comparison to

most service companies by virtue of our regulatory role, this

unique and privileged position only reinforces the need for

providing excellence in customer service. We will continue to

work with industry and consumer representatives as well as

other members of the public to enhance service delivery, and

we will act to improve corporate processes in response to

customer needs and concerns.

Finally, we will grow the organization by selectively

providing safety services outside Ontario. Working in other

jurisdictions will enhance our ability to attract and retain top

industry resources, and enable us to impact public safety

more broadly. The revenues generated will allow us to invest

in our safety services, research and development activities,

and knowledge management.

Impacting the safety and well-being of every person

in Ontario through our actions is a tremendous responsibility.

With strong Board leadership, an exceptional and committed

team, and effective and valuable industry relations, we

can continue to make a meaningful difference and achieve

our vision.

I am very pleased to have this opportunity to be part

of this important and dynamic organization.

Kathy Milsom

President and Chief Executive Officer

T H E N E W F A C E O F

P U B L I C S A F E T Y


T H E N EW FAC EOF SAF E TY


“TSSA’s top priority is to provide unmatched service toour customers. This is a commitment that begins with ourown people. Improved public safety is a great incentiveto stay focused on customer service excellence.”LUISA ARMSTRONG, Manager, Customer Services

TSSA has launched a number of initiatives designed toenhance customer service throughout the organization. It ismore than an attitude of cooperation; it is also a way to directinteractions with customers, industry representatives, otherstakeholders and the public. The recent opening of TSSA’sCustomer Contact Centre, providing ready answers to inquiries,underscores the commitment to customer service excellence.As one of the major corporate challenges, TSSA employees aredevoted to understanding the basic needs of customers, andworking to meet and exceed their expectations.

The new face of safety begins with our talented, professional staff, and is clearlyreflected in our employees’ interactions with customers, industry representatives and thepublic. Some examples of how TSSA employees are utilizing innovative, cutting-edgesafety solutions to identify and mitigate technology-related risk follow.

C U S T O M E R S A R E A T T H E

C E N T R E O F O U R P E R F O R M A N C E


“An effective inspection process means more thanensuring compliance with regulations. It also involveseffective partnerships with industry to see what isworking and what changes might be necessary.”MARCO GALLUCCI, Inspector, Fuels Safety Program

While regulations play a critical part in theoverall safety system, they are only effectivein concert with a proactive inspection team.TSSA’s approach to inspection ensures thatrisk mitigation resources and approaches arein place, and it provides a vital, ongoing linkbetween risk users and the regulations inexistence. Ultimately, TSSA sees front-lineinspection by fully qualified professionals as akey step in ongoing, responsible risk manage-ment and mitigation.

O U R S A F E T Y S Y S T E M M A I N T A I N S

T H E H I G H E S T S T A N D A R D S I N

T H E A R E A S R E G U L A T E D B Y T S S A

2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 7



Training and certification of professionalsensures that fully trained, knowledgeableand qualified persons are doing thefront-line safety work and, in turn,promoting the overall safety system.Whether in support of existing regula-tions or to bring a safety mentality toan unregulated environment, TSSA’straining and certification regime plays akey role in risk identification andcontrol.

A C O M M I T M E N T T O

L E A R N I N G A N D

T R A I N I N G B R I N G S

B E T T E R R E S U L T S

“Our trainingprograms producethe most proficientsafety professionalsavailable. Theexpertise is based onpersonal experienceand commitment,backed by real-world practicality.”MACKENZIE HILL, Operations Coordinator,Training and Certification


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“While never completely avoidable, risk canbe anticipated, identified and lessened.We work with our customers to mitigate riskwithin a proven safety management system.”SRIKANTH MANGALAM, Risk Management Advisor

Some element of risk is always presentin times of ever-evolving technology;however, such risk can be effectivelymanaged and mitigated through acombination of regulation enforcementand applied safety resources. TSSA’srisk management team understandsthat an innovative safety system isaimed at protecting the health andwellbeing of those interactingwith technology. As such, TSSA hasincorporated in its safety systemproven ways of identifying risk andlimiting its impact to minimum levels.

U N D E R S T A N D I N G A N D

M A N A G I N G R I S K I S A

C R I T I C A L C O M P O N E N T I N

T H E VA L U E C H A I N

Srikanth MangalamRisk Management Advisor

Gabriela DeleanuTechnical Leader, Boilersand Pressure Vessels

Oscar AlonsoPipelines/Vehicles andNatural Gas Engineer

Perpetua CoelhoRisk and InsuranceAnalyst



Regulation in a technological environ-ment generally serves as a functionallegal control establishing benchmarksfor safety and control of risk; however,TSSA recognizes that although regula-tions are based on risk analysis, theyare not necessarily static. Factors suchas design, inspection, maintenance andhuman behaviour all impact on theregulations governing the safe use oftechnology. TSSA seeks to work with itscustomers and industry partners toachieve safety outcomes against abackdrop of voluntary compliance andcooperation. TSSA uses appropriateprogressive disciplinary processes,including administrative penalties,directives and prosecution, to ensurethat regulations and overall safety arebeing observed.

E X P E R T I S E I N

N E G O T I A T I N G

T H E C O M P L E X

R E G U L A T O R Y

E N V I R O N M E N T

“New technology invitesthe need to considerupdating currentregulations. Our closerelationship withmanufacturers, customersand government regulatorskeeps us focused on safetyconcerns.”TOM AYRES, General Counsel


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“TSSA’s success will be dependent on the individualcontributions and commitment of each of its employeesin meeting corporate objectives and customer needs.”KATHY MILSOM, President and CEO

TSSA appreciates that an organization isonly as strong and as effective as its teamof employees. To build on past successesand to achieve future objectives, TSSAis creating a work environment thatsupports all employees and enables themto innovate and excel in support ofcorporate priorities. Promoting a cultureof continuous improvement, measuringperformance, meeting targets and settingnew goals with full staff support andcommitment will enable TSSA to meet andexceed its objectives.

T H E R I G H T P E O P L E D O I N G

O U T S T A N D I N G W O R K



Achievements in fiscal year 2004/2005, though varied, exhibit

clear safety and customer service themes. As well, recent

achievements indicate the emphasis on TSSA making optimal

use of the skills, experience and abilities of its employees in

meeting its corporate objectives.

In terms of public safety reporting, TSSA, as in

previous years, continues to evaluate its data and associated

analyses including root cause analysis of incidents to identify

safety concerns and design corresponding safety strategies

across all program areas. Details of the strategies being

implemented are available on TSSA’s website at www.tssa.org.

Setting safety targets, and measuring TSSA’s perform-

ance against these targets, is vital in assessing TSSA’s progress

on the journey to zero serious injuries and fatalities, and

will enable TSSA to demonstrate improved safety results on a

year-by-year basis.

TSSA made notable progress in the areas of public

safety, customer service and financial performance over the

past year. In the public safety area, TSSA delivered root cause

analysis training to all inspectors in each program area. TSSA

also developed and delivered safety training programs specifi-

cally designed to address knowledge gaps with building

owners and contractor groups, including property managers’

training courses for boilers, and welding and repair training

programs.

New and expanded partnerships also characterized

TSSA operations in fiscal year 2004/2005. TSSA entered into

safety partnerships with the Office of the Fire Marshal for a

seasonal safety campaign, the Toronto Transit Commission for

an escalator safety effort that will commence in fiscal year

2005/2006, and the Ontario Snow Resorts Association for the

Look, Load and Lower campaign.

Another accomplishment that is noteworthy is the

completion of special safety assessments of organizations

ranging from truck and engine manufacturing to utility

energy systems. These assessments resulted in safer plants,

reduced down time, and updates to management operation

and maintenance policies.

Also of note, TSSA’s amusement devices engineering

team completed a preliminary consultative review for the

new Sledgehammer ride at Paramount Canada’s Wonderland.

This was the first ride of its type to be installed anywhere in

the world, and TSSA was involved with approval of manufac-

turing and assembly reports, and on-site verification of

compliance during construction and installation.

TSSA furthered its involvement with industry repre-

sentatives and other stakeholders through such activities as

the TSSA-led emergency response procedures program to

assist firefighters when responding to incidents involving

elevators.

G O I N G F O R WA R D

W I T H P U B L I C S A F E T Y


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Over the past 12 months, TSSA made significant

strides in its safety enhancement efforts, as well as contin-

uing to transform itself from an enforcement-centred

organization to one in which proactive compliance and

prevention are key motivators. This is in keeping with the

corporation’s strategic and business objectives for the fiscal

year 2004/2005.

TSSA also continued its efforts to establish additional

benchmarks and performance standards by which to measure

its performance in the safety programs. Numerous customer

service enhancement initiatives took root over the past

operational term. TSSA completed an extensive customer

service survey to gauge customer views on service delivery

and to identify areas in need of improvement.

In addition, TSSA placed considerable emphasis and

effort on identifying, understanding and resolving employee

concerns, and responding to ideas and suggestions. This is in

keeping with its commitment to creating a work environment

that is conducive to high morale and performance, and

in recognizing and rewarding employee contributions. The

organizational structure was also reviewed, rationalized

and streamlined to render it more responsive and cost

effective.

TSSA’s balanced scorecard, found on pages 18 to 24

of this report, provides more detailed information about fiscal

year 2004/2005 goals and corresponding achievements in the

areas of public safety, service delivery, strategic development,

the development of a high performing team, and financial

performance. Some highlights for the various program areas

follow.

Boilers and Pressure Vessels Safety Program

TSSA is responsible for regulating all pressure retaining

components manufactured or used in Ontario, with a

commitment to ensuring the safety of boilers, pressure

vessels and piping systems.

The past year saw the boilers and pressure vessels

program team concentrating on communication and infor-

mation efforts to alert industry partners about the cause of

incidents in a more timely and efficient manner.

Other key initiatives for TSSA’s boilers and pressure

vessels team over the past year include:

• developing a new training course for repairs and welding;

and

• completing the first year of a mandatory compliance

program to certify organizations involved in piping and

repair with more than 600 companies becoming certified.

Operating (Power) Engineering Safety Program

TSSA examines and certifies over 15,000 power plant

engineers and operators to confirm their qualifications. In

Over the past 12 months, TSSA madesignificant strides in its safety enhance-ment efforts, as well as continuing totransform itself from an enforcement-centred organization to one in whichproactive compliance and prevention arekey motivators.



addition, TSSA operating engineering inspectors conduct

initial and periodic inspections at operating plants to ensure

they are registered, operating safely and are in compliance

with safety regulations.

Highlights from the fiscal year 2004/2005 include:

• issuing 6,819 directives related to non-compliance with

safety regulations;

• carrying out a comprehensive inspection regime; and

• with the Boilers and Pressure Vessels Safety Program,

developing a greenhouse strategy with key stakeholders.

Elevating Devices Safety Program

TSSA is responsible for regulating the safety of more than

43,000 elevating devices in Ontario. These devices include

elevators, escalators, moving walks, lifts for persons with

physical disabilities, passenger ropeways, construction hoists

and ski lifts.

The past year was typically challenging for TSSA staff

in the elevating devices sector, due to an increase in the

overall number of elevating devices in Ontario.


• issuing more than 55,000 directives, of which 1,226 were

considered of a serious nature;

• developing investigative criteria to help determine which

types of elevator incidents are most worthy of investigation

and follow-up;

• enhancing partnerships and public outreach efforts, such as

an arrangement with local firefighters for training in the

rescue of passengers trapped in elevators, and liaison with

large elevator/escalator operators to promote a safe rider

message; and

• continuing work with the Elevator and Escalator Safety

Foundation to help bring the Safe-T Rider message to

elementary school children; the message has been delivered

to four million grade four students in North America since

the program was launched in 1993; the program reached

40,000 Canadian students in 2004.

Amusement Devices Safety Program

TSSA is responsible for regulating the safety of all amuse-

ment rides in Ontario. These devices include roller coasters,

Ferris wheels, go-karts, inflatables and water slides. Ride

operators must also be licensed and are responsible for

the safe and proper set-up, maintenance and operation of

all rides.

In addition to noting a decrease in the number of

incident reports in fiscal year 2004/2005, the amusement

devices program was responsible for the regulation of 1,137

amusement rides in Ontario, an increase of 317 from the

previous year.

Highlights from fiscal year 2004/2005 include:

• ongoing emphasis to industry operators to report all

amusement ride incidents and near-misses;

• adopting a two-pronged education campaign aimed at

users and operators;

• delivering targeted safety material and information to

go-kart and water-slide operators across the province;

• conducting 28 safety tour campaigns;

• partnering with larger fair operators to provide seasonal

safety messages to more than 140,000 Ontarians; and

• in partnership with industry, developing best practices for

the amusement industry to promote safety in the workplace.


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Fuels Safety Program

TSSA provides fuel-related safety services associated with the

safe transportation, storage, handling and use of hydrocarbon

fuels such as gasoline, diesel, propane and natural gas. TSSA

delivers programs and services that regulate the safe use of

motor fuels, heating fuels and gaseous fuels for private,

industrial and commercial uses in Ontario.


• issuing more than 20,000 directives, based on 2,000

scheduled inspections;

• conducting 1,700 audits of registered contractors and more

than 6,000 unannounced inspections;

• lending TSSA’s expertise in the fuel safety area, which led

to requests from other jurisdictions to investigate incidents

involving treatment, storage and distribution of hydro-

carbon fuels;

• investigating 1,525 natural gas pipeline incidents, noting

that the most common cause of problems centred on

improper excavation by contractors, failure to locate

pipelines before digging and locators providing inaccurate

information about the position of pipelines; and

• ongoing partnerships with other stakeholders to ensure

proper respect for buried pipelines and efforts to promote

One Call legislation, aimed at establishing a single

telephone number for information about the exact location

of underground infrastructure prior to excavation.

Upholstered and Stuffed Articles Safety Program

TSSA protects the public from potential hazards related to the

manufacture of upholstered and stuffed articles by ensuring

that manufacturers, renovators and home hobbyists use only

clean, new filling materials in these articles. TSSA also ensures

that these items are properly labeled and that filling

materials are disclosed to the public.

Highlights of the fiscal year 2004/2005 include:

• expanding and enhancing the upholstered and stuffed

articles inspection program to extend public safety

coverage in Ontario, and to encourage fairness throughout

the industry;

• adding Mandarin language services to TSSA’s website, to

assist the large group of Asian customers with communica-

tions regarding applicable regulation and related services,

such as registration, label approval and inspection services;

and

• enhancing cooperation with Canada Customs to avoid the

importation of secondhand materials to be sold in Ontario.

Achievements in all program areas for the fiscal year

2004/2005 indicate TSSA’s ongoing commitment to engage

all stakeholders in enhancing its safety services, and to

making note of all factors to understand and reduce risk.


“TSSA’s Quality Assessed Facility program wasdeveloped to create safe work environments byforming a partnership between TSSA’s expertsand a company’s employees. The program setshigh standards for safer management of criticalequipment and operations, and reviewsprogress on an ongoing basis. TSSA recentlybrought its Quality Assessed Facility expertiseto our operation at International Truck andEngine Corporation in Chatham, Ontario. To usethe word ‘quality’ is a never-ending pursuit andthe program offered by TSSA took Internationalin the direction we need to go for safety, relia-bility and repeatability. When shutdowns are$1,800 per minute or $864,000 per day, everyminute of down time is a lost opportunity toproduce. This particular problem has been anon-issue in the last several years due to whatwas achieved with the [TSSA Quality Assessed]facility program.”

Mike DavisMaintenance Manager/Chief Operating

Engineer/CWB Weld Supervisor

International Truck and Engine Corporation

QUALITY ASSESSMENT PROGRAM GETS RESULTS ON MANY LEVELS



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“Some plant owners don’t always have theopportunity to read TSSA bulletins or notices,resulting in occasional communication gaps. Insome cases, this led to colleagues not beingaware of regulation changes until they werealready in place. Recently, on invitation by ourindustry association, TSSA presented an infor-mation session to the University of Toronto andother universities across the province tohighlight what’s going on and to hear what ourissues are as plant owners and operators. It’sclear to me that TSSA is continuously improvingits relationship with industry partners.”

Bruce D. DoddsDirector, Utilities and Building Operations,

University of Toronto

WORKING TO IMPROVE INFORMATION FLOW TO INDUSTRY PARTNERS


P E R F O R M A N C E R E P O R T I N G :

B A L A N C E D S C O R E C A R DTSSA uses a balanced scorecard tool to document, manage, measure and report on performance in five key areas:

Public Safety, Service Delivery, Strategic Development, Human Resources and Financial Performance. The following

balanced scorecard provides the fiscal year end results of TSSA’s performance against fiscal year 2004/2005 goals.


Enhance safety in all business lines. Implement action plans to address

identified safety priorities and enhance

risk-based maturity in business lines by:

• improving investigations through

application of root cause analysis;

• identifying new discretionary services

that respond to gaps in the safety

system;

• targeting the unlicensed; and

Root cause analysis training has been delivered to all inspectors in all programs, as

planned. The training has enhanced risk-based maturity and had a positive effect in

terms of the causal information obtained and TSSA’s ability to identify root cause.

TSSA acted to improve investigations through improved inspector checklists, data

collection and on-site analysis. The integration of the new process into the POSSE®

(software) database has resulted in improved data quality and analysis.

TSSA developed and delivered safety training programs specifically designed to

address knowledge gaps with owners and contractor groups including:

• property managers’ training courses for boilers, and

• welding and repair training programs.

For unlicensed bounce (devices for bouncing upon) operators, work with school

boards and insurance companies has led to an awareness campaign that was

launched in April 2005. In addition, TSSA has worked in partnership with the

Ontario Association of Agricultural Societies, and Festivals and Events to raise

awareness regarding unlicensed amusement device operators at February and

March 2005 conventions.

675 audits were completed for the newly introduced repair and piping contractor

audit program developed in response to an industry request to ensure that all

contractors worked to appropriate standards.

P U B L I C S A F E T Y2004/2005 Objectives Performance Targets Performance Results


Enhance safety in all business lines.

(continued)

Gain national and international

acceptance of Safety Index.

Encourage harmonization of safety

outcome measurement and

reporting across Canada.

• building partnerships to support

public awareness and education.

Endorsement of Safety Index received

from stakeholders, including other

Canadian regulators.

National amusement devices incident

database established.

Enhanced pipeline incident database

established.

TSSA entered into safety partnerships with:

• the Office of the Fire Marshal for a seasonal safety campaign, including

SummerSmart which was launched in the spring 2005;

• the Toronto Transit Commission (TTC) for escalator safety which will commence in

fiscal year 2005/2006 (TTC delayed implementation due to labour relation issues);

and

• the Ontario Snow Resorts Association for the Look, Load and Lower campaign.

TSSA continued work on the Safety Index enhancements recommended by the

external panel of risk measurement experts and supported by stakeholder consulta-

tions, including TSSA’s advisory councils. Quebec has shown interest in participating

in the development and testing of the Safety Index. In addition, the National Public

Safety Advisory Committee (NPSAC) members agree on the benefits of a quantita-

tive measurement of safety efforts and taking a cautious approach to development.

An enhanced amusement devices incident database, to better enable TSSA to

analyze incidents, has been established and is being utilized in Ontario. The tool has

been designed to enable the incorporation of nationwide data.

NPSAC has agreed to a framework and principles for a national incident database

and a working group is designing a pilot that will utilize amusement devices data.

Development of an enhanced Canadian pipeline incident database, the Damage

Information Reporting Tool (DIRT), has been actively supported by TSSA on behalf

of the Ontario Common Ground Alliance.

P U B L I C S A F E T Y2004/2005 Objectives Performance Targets Performance Results

2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 19


Target key customer satisfaction

drivers and implement strategies

for improvement.

Enhance service delivery efficiency.

Enhance service delivery quality

and consistency.

Achieve the following improvements

based on 2002 customer survey

results:

• 5% in value (58%);

• 5% in timeliness (70%); and

• 5% in service quality (non-inspection

services: 69%; inspection services

80%).

70% overall inspector utilization and

59% Fuels Safety Program inspector

utilization.

Develop additional or preferred

efficiency targets.

Quality audits indicate strategic plan

objectives achieved and future priori-

ties identified.

The key driver results from the 2004 customer survey are:

• value 57%

• timeliness 68%

• service quality (non-inspection: helpfulness) 67%

• inspection services 81%

In addition, safety effectiveness was rated at 77%, unchanged from 2002.

In keeping with TSSA’s commitment to continuously enhance customer services, a

comprehensive customer service strategy, based on the research results, was

established and implementation began over the course of the fiscal year. The focus

of the strategy is on improving key business processes identified as major influ-

encers, including accounting, licensing, registration and certification, training and

certification, inspection and engineering. The implementation of the first phase of

the Customer Contact Centre, effective March 1, 2005, also focused on addressing

several of the key customer service issues identified through the 2004 survey.

Inspector utilization for the fiscal year was:

• 70.9% overall; and

• 56.0% for the Fuels Safety Program.

An enhanced engineering utilization measure is in the development phase.

A review of initial audit results led to the development of an enhanced audit

checklist and supporting analysis tools that will be implemented in fiscal year

2005/2006.

S E R V I C E D E L I V E R Y2004/2005 Objectives Performance Targets Performance Results



The previously referenced checklist and tools will enable data collection. In the

absence of the tools, data was not available for this measure in fiscal year 2004/2005.

This item was deferred to fiscal year 2005/2006.

2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 21

S E R V I C E D E L I V E R Y2004/2005 Objectives Performance Targets Performance Results

Demonstrate the value of TSSA’s

strategic goals to current stake-

holders.

Service delivery shows a 5% improve-

ment in accuracy, and 5% improvement

in variance for inspection and engineering

programs.

Complete implementation of quality

management program six months following

completion of POSSE/Ranger software

rollout.

Develop and deliver an expanded

performance report to the government

on a quarterly basis.

Regulated customers express support

for TSSA’s strategic directions.

An expanded quarterly performance report has been provided to the government,

starting with the first quarter of fiscal year 2004/2005.

An Ontario government internal audit positively recognized the TSSA enhanced

performance report. Subsequently, a number of additional metrics have been added,

including the number of directives issues and resolved, or have been developed,

such as the number of scheduled inspections. These enhancements will be incorpo-

rated in fiscal year 2005/2006 reporting.

TSSA has refocused its approach to discretionary services to ensure avoidance of

both potential and perceived conflicts of interest, and to underscore the benefits

of discretionary services to the regulated business. TSSA has also developed a

Discretionary Services Policy, which has been accepted by the Ontario government,

and has received positive reaction from industry representatives. A letter of support

was received from the Ontario government.

S T R A T E G I C D E V E L O P M E N T2004/2005 Objectives Performance Targets Performance Results

Enhance service delivery quality

and consistency.

(continued)


Develop new discretionary safety

services in existing business lines to

ensure sustainable safety outcomes

and revenue growth.

(continued)

Accelerate recognition of TSSA as a

full-service safety provider by

delivering existing services outside

Ontario.

Add new business lines in Ontario.

Effective marketing plans delivered for

all discretionary safety services in

existing business lines.

Successful delivery of discretionary

services from existing business lines in

at least two provinces.

Ontario government agrees to at least

one TSSA contract (including a pilot

project).

A planning session with broad employee participation identified the top eight

initiatives to pursue. Opportunity teams were formed to conduct market

research/assessment and develop marketing plans. A Vice President of Business

Development was recruited to provide strategic leadership.

Property manager training for elevating devices was delivered in Regina through a

partnership with the Building Owners and Managers Association (BOMA).

A pressure piping seminar was delivered in Halifax.

TSSA was awarded a contract for water slides inspection for an operator in Victoria

as a result of a cooperative relationship with an amusement device insurer.

A memorandum of understanding has been developed with the Ministry of

Environment for digester and landfill gas systems.

Hydrogen safety is currently unregulated in Ontario. TSSA is providing services

related to Hydrogen safety to address an existing safety gap with this alternative

fuel planned for future use in transportation and other uses. TSSA and the

government have been working to address the regulatory gap and the government

has agreed in principle to support changes to the Technical Standards and Safety

Act, 2000 that would enable the development of a regulatory framework for Hydrogen.

S T R A T E G I C D E V E L O P M E N T2004/2005 Objectives Performance Targets Performance Results



H U M A N R E S O U R C E S2004/2005 Objectives Performance Targets Performance Results

Expand organizational capability to

deliver enhanced safety services in

Ontario.

Build dedicated resources and

unique capabilities that support

entry into markets outside Ontario.



addition of new business lines in

Ontario.

Regional pilot meets success criteria.

New roles/accountabilities incorpo-

rated into the reward management

system.

Development and use of the following

metrics as management tools and

future use as strategic objectives:

• capability index; and

• performance results index.

Succession planning in place.

The organizational structure has been redesigned to resolve inherent internal

conflicts/questionable fit (Payroll, Internal Audit, Risk Management), flatten and

streamline reporting relationships in Operations (remove a layer of managerial

hierarchy), and enhance operational efficiency and effectiveness. The redesigned

organizational structure has resulted in the creation of an Administration and

Customer Services function to promote more effective delivery of services internally

and externally, and an internal audit function to support organizational effective-

ness from both a regulatory compliance and best-practices perspective.

A review of the regional pilot concept indicated it is not in the best interests of the

organization.

A process to review all job descriptions within the organization has begun to ensure

that the required skills and capabilities are identified for each position, and to

enable a clear understanding of individuals’ roles and responsibilities.

A revised performance management system is in development to respond to identi-

fied concerns by employees and external stakeholders.

Development of the capability index and the performance results index has been

identified to be superfluous in view of the introduction of a performance manage-

ment system that directly links employee performance objectives to core job

responsibilities, and corporate goals and objectives.

Senior management team succession plan was developed and presented to the

Human Resources Committee of the Board.

2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 23



H U M A N R E S O U R C E S2004/2005 Objectives Performance Targets Performance Results

Achieve cost recovery from inspec-

tion and engineering activities in

existing business lines.

Ensure the cost-effective delivery of

discretionary services in existing

business lines.

Effectively manage cash flow.

Employee survey priorities identified

and improvement targets defined prior

to implementing mini-audit.

Employee occupational health

and safety performance assessment

(phase 1 of 3) implemented and ready

to support the addition of an

employee safety index.

3.4% excess in mandatory services.

New fee schedules approved for

Elevating Devices, Amusement Devices,

and Upholstered and Stuffed Articles

Safety Programs.

12.8% surplus in discretionary services.

Accounts receivable outstanding days

reduced to 60 days.

An action plan responding to both the 2004 employee opinion survey and a

February 1, 2005 employee planning session was developed to address the top work

environment priorities. The action plan was made available to all employees and

action items are progressing on schedule, with employees receiving regular progress

updates.

Phase one of the employee health and safety assessment was successfully imple-

mented ahead of schedule. Three of six performance metrics have been integrated

into a quarterly occupational health and safety report, consistent with phase 1 of

the assessment development.

A $2.29 million excess or 6.3% of mandated services was achieved for the fiscal

year, exceeding the budgeted excess of $1.07 million.

New fee schedules were approved for Elevating Devices (fees unchanged),

Amusement Devices and Ski Lifts (increases in inspection, engineering and licensing

fees), and Upholstered and Stuffed Articles (fees unchanged) safety programs.

The discretionary business achieved break-even status for fiscal year 2004/2005. For

fiscal year 2005/2006, only profitable business lines will be pursued, thereby

projecting an appropriate surplus.

As of fiscal year-end, outstanding days were reduced to 76 days from 84 days in

fiscal year 2003/2004. The target was not met, as a holistic approach to addressing

issues related to TSSA’s invoicing/billing policies/processes had to be implemented,

as noted under the service delivery objective.

F I N A N C I A L P E R F O R M A N C E2004/2005 Objectives Performance Targets Performance Results



addition of new business lines in

Ontario.

(continued)


2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 25

TSSA is focusing on four strategic priorities to help guide its

operations for the next fiscal year.

The four strategic priorities are:

• positive safety outcomes;

• customer service excellence;

• a high performing team; and

• strategic growth.

It is believed that a steady focus on each of these

priorities will help TSSA realize its vision of becoming a world

leader in safety services.

TSSA’s journey to zero serious injuries and fatalities

requires world-class data collection and analysis to support its

risk-based approach. As such, TSSA will make investments to

build its safety research and development capability. It is under-

stood that having the means to measure and report on safety

outcomes is essential to TSSA’s ability to validate the effective-

ness of the safety systems, and apply it in all existing and new

circumstances.

Customer satisfaction is a key priority for any

service-based organization. TSSA has identified customer

satisfaction as a key corporate priority, recognizing that the

relationship between customers and stakeholders is critical

to improving safety outcomes. TSSA also recognizes the

importance of developing and maintaining effective relation-

ships with customers and stakeholders as an important

tool in fulfilling the organization’s mission and mandate.

Although TSSA has an exceptional workforce, it is

recognized that for employees to excel, TSSA must create a

work environment that is conducive to high morale and

performance. Recognizing the value of its employees, TSSA will

focus on making substantial progress in enhancing the work

environment, in response to employees’ needs and concerns.

The fourth key strategic priority for TSSA is strategic

growth. TSSA’s risk-based approach has identified many

innovative safety solutions that are consistent with the

organization’s mission and vision. While some new opportu-

nities do not involve the exercise of TSSA’s delegated

regulatory authority, they can serve to enhance TSSA’s

expertise in delivering its regulatory services. As such, oppor-

tunities for discretionary services will contribute to positive

safety outcomes and will enable strategic investments,

including additional research and development activities.

While each of TSSA’s four strategic priorities

contributes to the goal of becoming a world leader in safety

services, special emphasis is being placed on the impact of a

high performing team. TSSA’s success in leveraging of the

skills, experience and practical knowledge of its employees

will enable the organization to deliver the remaining three

priorities areas and, in turn, set the stage for continued

growth and accomplishment.

F I S C A L Y E A R 2 0 0 5 / 2 0 0 6 O U T L O O K



The following Management’s Discussion and Analysis (MD&A)

should be read in conjunction with the consolidated financial

statements included in this annual report. MD&A information

is growing in importance as a key part of an organization’s

governance disclosure efforts. It is designed to disclose infor-

mation to help readers understand an organization through

the eyes of management.

This section provides an overview of the previous year

of operations at TSSA and how the organization performed

from a financial perspective.

TSSA also uses a balanced scorecard to set objectives,

monitor and manage performance, and report outcomes in

five key areas, one of which is financial performance.

Mandated Revenue

TSSA’s mandated business continued to expand with revenue

growth in program areas. Mandated revenue for the year was

$36.1 million, which is $705,000 above budget. Overall

mandated revenue was $1.53 million higher than for fiscal year

2004, representing an annual growth rate of 4.4 per cent.

Total operational costs were below budget by

$364,000, due to such factors as staffing deferrals, an insur-

ance premium increase being less than expected, deferral of

customer service training (pending full development and

implementation of the customer service strategy), and some

savings realized through in-house development and facilita-

tion of certain training programs.

Discretionary Revenue

TSSA’s discretionary business fell short of targets for the last

fiscal year. The outcome stemmed from the absence of a

clearly articulated strategic plan for business development,

the refocusing of the business beyond Ontario, and the need

to recruit a Vice President of Business Development to

provide strategic leadership. Although revenue generated

from the Canadian Nuclear Safety Commission contract

amounted to $1.9 million, which is $218,000 higher than

budget, other revenue from discretionary services remained

at lower levels.

Total discretionary revenue fell short of target by

$528,000. With a strategic growth focus to business

development and strong corporate leadership, enhanced

performance was already evidenced shortly after fiscal year

end by confirmation that an international customer agreed

to a submitted proposal.

Net Assets

As of April 30, 2005, TSSA’s net assets are $12.7 million.

Of that total, $4.7 million is invested in capital assets and

$8.0 million is unrestricted.

M A N A G E M E N T ’ S D I S C U S S I O N

A N D A N A LY S I S


2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 27

2005 2004Actual Budget Actual

MANDATED REVENUEBoilers, Pressure Vessels/Operating Engineers $ 9,169 $ 8,745 $ 8,647Elevating Devices, Amusement Devices/Upholstered and Stuffed Articles 14,913 14,707 14,721Fuels Safety 11,995 11,920 11,180Total Mandated Revenue $ 36,077 $ 35,372 $ 34,548

DISCRETIONARY REVENUEBoilers, Pressure Vessels/Operating Engineers $ 2,612 $ 2,544 $ 1,845Elevating Devices, Amusement Devices/Upholstered and Stuffed Articles 516 619 245Fuels Safety 842 1,335 1,045Total Discretionary Revenue $ 3,970 $ 4,498 $ 3,135

TOTAL REVENUEBoilers, Pressure Vessels/Operating Engineers $ 11,781 $ 11,289 $ 10,492Elevating Devices, Amusement Devices/Upholstered and Stuffed Articles 15,429 15,326 14,966Fuels Safety 12,837 13,255 12,225Total Revenue $ 40,047 $ 39,870 $ 37,683

TECHNICAL STANDARDS AND SAFETY AUTHORITY

S U M M A R Y O F R E V E N U E SYear ended April 30, 2005, with comparative figures for 2004

($ in thousands)



The consolidated financial statements of TSSA have been

prepared by management in accordance with generally

accepted accounting principles as prescribed by the Canadian

Institute of Chartered Accountants.

Management maintains financial and management

reporting systems that include appropriate controls to

provide reasonable assurance that the corporation’s assets are

safeguarded, to facilitate the preparation of relevant, reliable

and timely financial information.

Where necessary, management uses judgment to

make estimates required to ensure fair and consistent

presentation of this information.

The Board of Directors of TSSA is composed of 18

members, one of whom, the President and CEO, is an

employee of the organization. The Board of Directors has the

responsibility to review and approve the financial statements,

as well as overseeing management’s performance of its

financial reporting responsibilities. The Board of Directors has

approved the financial statements contained herein.

The auditors are responsible for auditing the financial

statements and have issued a report thereon.

All other financial and operating data included in

the annual report are consistent, where appropriate, with

information contained in the financial statements.

Kathy Milsom

President and CEO

Ellen Chui

Chief Financial Officer

M A N A G E M E N T R E S P O N S I B I L I T Y

F O R F I N A N C I A L R E P O R T I N G


2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 29

To the Members of Technical Standards

and Safety Authority

We have audited the consolidated statement of financial

position of Technical Standards and Safety Authority (TSSA)

as at April 30, 2005 and the consolidated statements of

operations, changes in net assets and cash flows for the year

then ended. These financial statements are the responsibility

of TSSA’s management. 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 plan and perform an audit to obtain reason-

able assurance whether the financial statements are free of

material misstatement. An audit includes examining, on a

test basis, evidence supporting the amounts and disclosures

in the financial statements. An audit also includes assessing

the accounting principles used and significant estimates

made by management, as well as evaluating the overall

financial statement presentation.

In our opinion, these consolidated financial state-

ments present fairly, in all material respects, the financial

position of TSSA as at April 30, 2005 and the results of its

operations and its cash flows for the year then ended in

accordance with Canadian generally accepted accounting

principles. As required by the Ontario Corporations Act, we

report that, in our opinion, these principles have been applied

on a basis consistent with that of the preceding year.

Chartered Accountants

Toronto, Canada

May 27, 2005

A U D I T O R S ’ R E P O R T



2005 2004

ASSETSCurrent assets:

Cash $ 1,051 $ 1,650Short-term investments (note 3) 8,556 7,129Accounts receivable 4,145 5,605Prepaid expenses 811 693

14,563 15,077

Long-term investments (note 3) 10,293 8,047

Capital assets (note 4) 4,656 1,999

$ 29,512 $ 25,123

LIABILITIES AND NET ASSETSCurrent liabilities:

Accounts payable and accrued liabilities $ 7,220 $ 6,170Deferred revenue 9,595 8,549

16,815 14,719

Net assets:Invested in capital assets 4,656 1,999Unrestricted 8,041 8,405

12,697 10,404

Commitments and contingencies (note 5)

$ 29,512 $ 25,123

See accompanying notes to consolidated financial statements.

On behalf of the Board:

Chair of the Board of Directors Chair of the Audit, Risk and Finance Committee

TECHNICAL STANDARDS AND SAFETY AUTHORITY (Incorporated under the laws of Ontario)

C O N S O L I D A T E D S T A T E M E N T O F F I N A N C I A L P O S I T I O NYear ended April 30, 2005, with comparative figures for 2004

($ in thousands)

(Restated - note 2)


2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 31

2005 2004

Revenue $ 40,047 $ 37,683

Expenses:Salaries, wages and benefits 23,581 22,166Operating 12,827 12,684Amortization 1,346 997

37,754 35,847

Excess of revenue over expenses $ 2,293 $ 1,836

2005 2004Invested in

capital asset Unrestricted Total Total

Net assets, beginning of year:As previously reported $ 1,999 $ 9,035 $ 11,034 $ 9,206Adjustment to reflect accounting for

accrued unused vacation (note 2) – (630) (630) (638)As restated 1,999 8,405 10,404 8,568

Excess (deficiency) of revenue over expenses (1,388) 3,681 2,293 1,836

Investment in capital assets 4,045 (4,045) – –

Net assets, end of year $ 4,656 $ 8,041 $ 12,697 $ 10,404



C O N S O L I D A T E D S T A T E M E N T O F O P E R A T I O N SYear ended April 30, 2005, with comparative figures for 2004

($ in thousands)

C O N S O L I D A T E D S T A T E M E N T O F C H A N G E S I N N E T A S S E T SYear ended April 30, 2005, with comparative figures for 2004

($ in thousands)

(Restated - note 2)

(Restated - note 2)(note 6)



2005 2004

Cash provided by (used in):

Operating activities:Excess of revenue over expenses $ 2,293 $ 1,836Items not involving cash:

Amortization 1,346 997Loss on disposal of capital assets 42 1

Change in non-cash operating working capital 3,438 1,0997,119 3,933

Investing activities:Short-term investments (1,427) (2,722)Long-term investments (2,246) 291Acquisition of capital assets (4,045) (530)

(7,718) (2,961)

Increase (decrease) in cash (599) 972

Cash, beginning of year 1,650 678

Cash, end of year $ 1,051 $ 1,650

Supplemental cash flow information:Interest received $ 645 $ 369Interest paid 8 11



C O N S O L I D A T E D S T A T E M E N T O F C A S H F L O W SYear ended April 30, 2005, with comparative figures for 2004

($ in thousands)

(Restated - note 2)


2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 33

TSSA is the designated administrative authority responsible for the administration of the Technical Standards and Safety Act,

2000, which officially became law in Ontario effective June 2001. The designation and delegation of responsibility is made under

the authority of the Safety and Consumer Statutes Administration Act, 1996 (the Act) of Ontario. TSSA’s primary objective is to

promote and undertake activities which enhance public safety, including training, certification, licensing, registration, audit,

quality assurance, inspection, investigation, enforcement and other technical safety services. TSSA is incorporated under the

Corporations Act of Ontario as a corporation without share capital and is a not-for-profit organization under the Income Tax Act.

These consolidated financial statements include the accounts of TSSA and its wholly owned subsidiary TSSA Services, Inc. TSSA

Services, Inc. was incorporated on January 9, 2003 under the laws of the State of Georgia as a U.S. Domestic Profit Corporation

and had no operations during the current period.

1. SIGNIFICANT ACCOUNTING POLICIES

(a) Revenue recognition:

Revenue from the provision of inspection and engineering services is recorded when services are performed. Licensing, registration

and certification fees are recognized evenly over the period covered by the fee. Unearned fees are recorded as deferred revenue.

(b) Investments:

(i) Short-term investments:

Short-term investments are recorded at the lower of cost and market value.

(ii) Long-term investments:

Interest bearing long-term investments intended to be held to maturity are carried at amortized cost. Interest is recog-

nized on an effective yield basis. These investments are written down to their estimated realizable value when this

amount is less than amortized cost, unless TSSA has reason to believe it will be able to recover the carrying amount.

The loss is recognized as an expense. Estimated realizable value is the present value of future cash flows discounted at

the rate of interest inherent in the investment on acquisition.

T E C H N I C A L S T A N D A R D S A N D S A F E T Y A U T H O R I T YN O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Year ended April 30, 2005

($ in thousands)



(c) Capital assets:

Purchased capital assets are recorded at cost. Leases that transfer substantially all the benefits and risks of ownership are

capitalized. Replacements are expensed in the year of replacement. Amortization is provided on a straight-line basis over the

estimated useful lives of the assets at the following annual rates:

Business systems 20%

Equipment 25%

Furniture and fixtures 20%

Computer software 50%

Computer hardware 33%

Leasehold improvements Remaining term of lease

Amortization of a capital asset commences when it is brought into service.

Contributed capital assets are recorded at fair value at the date of contribution.

(d) Basis of accounting:

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles. The

preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts

of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the

reported amounts of revenue and expenses during the year. Actual results could differ from those estimates.

2. PRIOR PERIOD ADJUSTMENT

TSSA has identified an increase to the balance for accrued unused vacation entitlement of its employees. Such vacation entitle-

ment was formerly accrued only for amounts being paid out in cash to departing employees. This amount is now fully accrued.

TSSA has retroactively accounted for this and has changed previously reported amounts for salaries, wages and benefits

(decreased by $8), accounts payable and accrued liabilities (increased by $630), unrestricted net assets, end of year (decreased

by $630) and unrestricted net assets, beginning of year (decreased by $638).


2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 35

3. INVESTMENTS

(a) The short-term investments consist of bankers’ acceptances and bonds, with yields between 2.2% and 6%, maturing prior to

December 19, 2005.

(b) Long-term investments consist of:

2005 2004

Cost Market value Cost

Government bonds, with effective rates of

2.65% to 5.75%, maturing on

August 9, 2006 to September 10, 2007 $ 1,967 $ 1,956 $ 2,561

Corporate bonds, with effective rates of

3.00% to 6.46%, maturing from

May 4, 2006 to December 30, 2010 8,326 8,385 5,486

$ 10,293 $ 10,341 $ 8,047

4. CAPITAL ASSETS

2005 2004

Accumulated Net carrying Net carryingCost amortization amount amount

Business systems $ 3,633 $ 2,175 $ 1,458 $ 1,580

Equipment 592 287 305 44

Furniture and fixtures 1,104 188 916 30

Computer software 1,377 1,313 64 124

Computer hardware 2,496 1,779 717 217

Leasehold improvements 1,290 94 1,196 4

$ 10,492 $ 5,836 $ 4,656 $ 1,999



5. COMMITMENTS AND CONTINGENCIES

(a) Operating facility:

Under the terms of its banking agreement, TSSA has available a demand operating facility of up to $750. This facility bears

interest at TSSA’s bank’s prime rate and is secured by a general security agreement over TSSA’s assets and assignment of fire and

business interruption insurance. As at April 30, 2005, no amounts were drawn on the facility.

(b) Lease obligations:

TSSA leases office space, vehicles and equipment. Future minimum payments, by year and in the aggregate, under operating

leases with initial or remaining terms of one year or more, consist of the following:

2006 $ 968

2007 915

2008 780

2009 727

2010 689

Thereafter 3,939

Total minimum lease payments $ 8,018

(c) Litigation:

TSSA has been named as defendant in certain litigations alleging actual and punitive damages; however, it is management’s

belief that the ultimate outcome will not materially affect TSSA’s financial position. Settlement, if any, will be accounted for

during the period of resolution.

(d) Service contracts:

Under the terms of a service contract, TSSA is required to carry certain insurance coverages for a 10-year period after the

completion of services rendered under this contract.

(e) Letter of credit:

TSSA has a letter of credit of $500 outstanding as a term and condition of a contract.


2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 37

6. INVESTED IN CAPITAL ASSETS

Change in net assets invested in capital assets is calculated as follows:

2005 2004

Deficiency of revenue over expenses:

Amortization of capital assets $ (1,346) $ (997)

Loss on disposal of capital assets (42) (1)

$ (1,388) $ (998)

Net change in invested in capital assets is as follows:

2005 2004

Purchase of capital assets $ 4,045 $ 530

7. PENSION PLAN

TSSA has established a defined contribution pension plan for its employees. Contributions by TSSA on account of current service

pension costs amounted to $970 (2004: $922).

8. FINANCIAL INSTRUMENTS

The carrying values of cash, short-term investments, accounts receivable and accounts payable and accrued liabilities approximate

their fair values due to the relatively short periods to maturity of the instruments.

The fair values of the long-term investments are based on quoted market values as disclosed in note 3.

9. INDEMNIFICATION OF DIRECTORS

TSSA has indemnified its past, present and future directors against expenses (including legal expenses), judgments, and any

amount actually or reasonably incurred by them in connection with any action, suit or proceeding in which the directors are

sued as a result of their service, if they acted honestly and in good faith with a view to the best interest of TSSA. The nature

of the indemnity prevents TSSA from reasonably estimating the maximum exposure. TSSA has purchased directors’ liability

insurance with respect to this indemnification.



1 Moshe WertheimSenior Vice President,O & Y Enterprise

2 Elizabeth DowdeswellPresident, Nuclear WasteManagement Organization

3 Rudy RiedlPresident,R. G. Riedl Consulting Inc.

4 Kathy MilsomPresident and ChiefExecutive Officer, TSSA

5 Allan KupcisPast Chairman, Canadian Nuclear Association

6 George IrwinChairman and ChiefExecutive Officer, I-Toys Inc.

7 Glenna CarrChief Executive Officer,Carr-Gordon Limited(TSSA Chair)

8 Don AronsonPresident,Aronson & Associates Inc.

9 Maureen ShawPresident and ChiefExecutive Officer, IndustrialAccident PreventionAssociation

10 Ed MinichPast President and ChiefExecutive Officer, OtisCanada

11 Brian LackeyVice President, Operationsand Chief Engineer,Greater Toronto AirportsAuthority

12 Gary HansonGeneral Manager and ChiefOperating Officer,West Edmonton Mall

13 Bruna GiacomazziPast Chief Credit Officer,HSBC Bank Canada

14 Robbie ShawManaging Director,Development ProjectNova Scotia CommunityCollege

15 Peter RidoutMember, Consumers’Association of Canada

16 Mary ShenstoneDirector, Sector LiaisonBranch Ministry of GovernmentServices

Katherine Crooks(not shown)

Vice PresidentSuncor EnergyProducts Inc.

TSSA BOARD OF DIRECTORS (as of June, 2005)

C O R P O R A T E I N F O R M A T I O N

1 2

34

5 6

7

8

9

10

11

12

13

14

1516


2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 39

SENIOR MANAGEMENT TEAM (2004/2005)

1 Ellen ChuiChief Financial Officer

2 Vince RentonActing Director, HumanResources

3 Dave LisleDirector, Public Relations and Communications

4 Ted DanceVice President, Operations

5 Kathy MilsomPresident and CEO

6 John SlauenwhiteVice President, BusinessDevelopment

7 David ScrivenCorporate Secretary

8 Tom AyresGeneral Counsel

TSSA BOARD COMMITTEES (2004/2005)

Standing CommitteesTSSA requires all directors to be a member ofone of the three standing committees: Audit,Finance and Risk, Governance andNomination, and Human Resources. TheGovernance and Nomination Committee hasspecific composition requirements. ThePresident and CEO is a non-voting member ofall committees.

Audit, Finance and RiskThe Audit, Finance and Risk Committee hasleadership responsibility for monitoring theintegrity of TSSA’s internal controls andmanagement information systems, approvingthe fiscal plan, and ensuring the integrity of thecorporation’s reported financial performance. Ed Minich, ChairBruna Giacomazzi, MemberMaureen Shaw, MemberMary Shenstone, MemberMoshe Wertheim, MemberKathy Milsom, Non-voting Member

Governance and NominationThe Governance and Nomination Committeehas leadership responsibility for strategicplanning, monitoring external communica-tions, including public disclosures, andcorporate governance policies.

George Irwin, ChairGlenna Carr, MemberMichael Lio, MemberGary Hanson, MemberRudy Riedl, MemberKathy Milsom, Non-voting Member

Human ResourcesThe Human Resources Committee has leader-ship responsibility for monitoring andassessing the performance of the Presidentand CEO, succession planning for seniormanagement, and key human resourcepolicies of the corporation. Elizabeth Dowdeswell, ChairBob Callow, MemberKatherine Crooks, MemberAllan Kupcis, MemberBrian Lackey, MemberPeter Ridout, MemberKathy Milsom, Non-voting Member

Corporate SecretaryDavid Scriven

1

2

3

4

56

7 8



TSSA STATUTORY APPOINTMENTS The individuals listed below are designated asDirector or Chief Officer for specificRegulations under Ontario’s TechnicalStandards and Safety Act, 2000.

John W. B. Coulter, C.E.T., TECH C.E.I.

Chief OfficerOperating EngineersOntario Regulation 219/01

Roland Hadaller, P.Eng. DirectorCompressed Natural GasOntario Regulation 214/01

Fuel Oil RegulationOntario Regulation 213/01

Gaseous FuelsOntario Regulation 212/01

Liquid FuelsOntario Regulation 217/01

Oil and Gas Pipeline SystemsOntario Regulation 210/01

Propane Storage and HandlingOntario Regulation 211/01

Fuel Industry CertificatesOntario Regulation 215/01

Certification of Petroleum EquipmentMechanicsOntario Regulation 216/01

Amusement DevicesOntario Regulation 221/01

Certification and Training of AmusementDevice MechanicsOntario Regulation 187/03

Elevating DevicesOntario Regulation 209/01

Certification and Training of Elevating DeviceMechanicsOntario Regulation 222/01

Rick Mile, DirectorBoilers and Pressure VesselsOntario Regulation 220/01

Dara Vorkapic, DirectorUpholstered and Stuffed ArticlesOntario Regulation 218/01

INDUSTRY ADVISORY COUNCILS TSSA is committed to meaningful, ongoingconsultations with its stakeholders, and itbenefits from the advice of 11 industryadvisory councils. These councils and theirchairs are listed below:

Denton Hoffman (Chair)Agricultural

Virginia Ludy (Chair)Amusement Devices

Glen Crawford (Chair)Boilers and Pressure Vessels

Jack Elias (Chair)Elevating Devices

Paul Rietdyk (Chair)Natural Gas

Donald C. Knibbs (Chair)Operating Engineers

Mark Nebel (Chair)Petroleum

Martin Clough (Chair)Propane

Bruce Haynes (Chair)Ski Lift Services

Gerry McGuire (Chair)Training Services

Don Strain (Chair)Upholstered and Stuffed Articles

CONSUMERS ADVISORY COUNCIL The Consumers Advisory Council (CAC)provides input to TSSA concerning the public’sperspective on safety associated with TSSA’sbusiness procedures and regulatory activities.

During the fiscal year, the CAC focusedon two main aspects of its mandate: facili-tating and promoting public input, andoversight of the safety education fund.

With respect to public input, the CACtogether with TSSA identified an assessmentframework and agreed upon next steps. Inparticular, the CAC provided helpful input inthe development of the new website. Withrespect to the safety education fund, the CACaffirmed an accounting of the current fundstatus, made recommendations regarding theterms of reference for the fund and has agreedupon an approach to identifying opportunitiesto put the fund to its intended use.

Members continue to increase theirinvolvement in TSSA related activities throughattendance in advisory council chairs’meetings, enhancing their role as provider ofconsumer perspective to the industrialadvisory councils’ deliberations and TSSAquarterly customer service meetings.Consumers Advisory Council (2004/2005)David Hahn (Chair)Patricia JensenIan KennedyEdward KoenDonna RussettLarry SchwartzDiana TengElizabeth VircKathryn Woodcock


2 0 0 4 / 2 0 0 5 A N N U A L R E P O R T 41

Customer Contact and Issue ManagementTSSA is committed to delivering customerservice excellence through the effective handlingof customer contacts and issues management.

TSSA’s enhanced approach includes:• all levels of the organization;• encouraging an organizational culture that

welcomes feedback as an opportunity toimprove services;

• empowering staff to resolve issues on thefirst contact; and

• conducting root cause analysis on feedbackto improve business processes, communica-tion and service delivery.

TSSA is committed to providing timelyresponse to all contacts. To further this goal,on March 1, 2005, TSSA launched a newCustomer Contact Centre. Trained and capableTSSA staff and enhanced technology nowprovide TSSA’s customers and the generalpublic with a single point of contact to reachthe organization. Initiatives underway for thecurrent fiscal year will expand TSSA’s ability tohandle a greater variety of enquiries andtransactions.

During fiscal year 2004/2005, TSSAtracked a total of 23,535 enquiries and 4,294issues. Over 45 per cent of the issues fellunder the service delivery category. Over thesame period of time, TSSA received 1,862expressions of appreciation for services delivered.

TSSA will continue to strive towardimproving processes and service delivery as a

way to increase customer satisfaction andimprove safety outcomes in Ontario.

ENFORCEMENT ACTIVITYIn 2004/2005, TSSA pursued 20 prosecutions.TSSA continues to maintain a high level ofcompliance in the industries it regulates bytargeting enforcement resources in conjunc-tion with its risk management strategy.

Prosecutions are one high-profileenforcement activity used by TSSA. Legalorders are also utilized as an immediateenforcement tool. For example, the number oflegal orders issued regarding natural gaspipeline strikes has risen by over 1,000 percent since 1997. TSSA has completed anadministrative monetary penalties pilot projectin the Fuels Safety Program. TSSA intends toassess the impact of the administrativemonetary penalties before implementing it onthe Elevating and Amusement DevicesProgram. Administrative monetary penaltiesprovide an additional tool for obtainingcompliance with our safety standards.

FRENCH LANGUAGE SERVICESConsistent with its French Language ServicesPolicy, TSSA responded to all requests forFrench services during the year. TSSAcontinues to monitor requests for services inthe French language to determine the appro-priate level of service to meet public safetyand customer service needs.



3300 Bloor Street West

14th Floor, Centre Tower

Toronto, ON

Canada M8X 2X4

Tel: 416-734-3300

Fax: 416-231-1626

Toll-Free: 1-877-682-8772 (TSSA)

E-mail: [email protected]

Find out more at www.tssa.org


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