Statement of Revenue and Expenditures
|For the Year Ended March 31, 2021||Note(s)||2021||2020|
|Fees and Levies||3||$12,713||$37,728|
|Salaries and Wages||59,792||62,158|
|Employee Benefits||5, 6||13,805||13,233|
|Transportation and Communications||943||1,688|
|Supplies and Equipment||549||656|
|Deficit of Revenue Over Expenditures||$ (57,204)||$ (4,340)|
See accompanying notes to the financial statement.
On behalf of the Board:
Notes to the Financial Statement
For the Year Ended March 31, 2021
- Nature of Opeations
The Alcohol and Gaming Commission of Ontario (AGCO) is an Ontario provincial regulatory agency reporting to the Ministry of the Attorney General (MAG). The agency was established on February 23, 1998 under the Alcohol and Gaming Regulation and Public Protection Act, 1996, which was amended in 2018 and re-named the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996 when the AGCO became responsible for the regulation of retail cannabis sales.
The AGCO is responsible for regulating the alcohol, gaming and horse racing industries and sectors as well as cannabis retail in accordance with the principles of honesty and integrity, and in the public interest. In so doing, the AGCO administers the Liquor Licence Act, Gaming Control Act, 1992, Horse Racing Licence Act, 2015 and the Cannabis Licence Act, 2018. The AGCO also administers sections of the Wine Content and Labelling Act, 2000 and the Liquor Control Act as well as the charity lottery licensing Order-in-Council 1413/08.
As a regulatory agency with a governing board reporting to MAG, the AGCO receives its annual spending authority from the Ministry’s printed estimates, as approved by the Ontario Legislature. The AGCO is funded from a combination of revenue from the Consolidated Revenue Fund and recoveries.
The AGCO is exempt from income taxes. The AGCO’s head office is located at 90 Sheppard Avenue East, North York, Ontario, Canada, M2N 0A4.
- Significant accounting policies
- Basis of accounting
The financial statement is prepared on a cash basis of accounting. Consequently, revenues are recognized when received rather than when earned, and expenditures, except for certain transactions with related parties, are recognized when cash is disbursed rather than when the obligation is incurred. Expenses allocated to the AGCO by Ministries of the Province of Ontario (Note 4a) are expensed when charged, as these transactions are not settled in cash.
The financial statement is presented in Canadian dollars (the AGCO’s functional currency).
At the transaction date, revenue or expenditures in currencies other than the AGCO’s functional currency are recognized in Canadian dollars at the exchange rate in effect at that date.
Revenue from fees, licenses and registrations are recorded in the fiscal year that the payment is received.
Revenue from other sources include awarded costs from court received in the fiscal year.
The AGCO is authorized to recover costs of its regulatory activities in accordance with the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996. The AGCO records recoveries in the Statement of Revenue and Expenditures when the payment is received.
- Basis of accounting
- Fee and levies
The AGCO collects fees and levies from the issuance of licences, permits and registrations to the following sectors:
2021 2020 Cannabis $8,067 $8,907 Gaming $2,161 $14,253 Liquor $2,485 $14,563 Other - $5 Total $12,713 $37,728
- Related party transactions
The Province of Ontario is a related party as it is the controlling entity of the AGCO. Organizations that are commonly controlled by the Province of Ontario are also related parties of the AGCO. Transactions with related parties are outlined below.
All related party transactions were measured at the exchange amount, which is the amount of consideration established and agreed upon by the related parties.
Ministries of the Province of Ontario
During the course of the year, the AGCO entered into the following transactions with various Ministries of the Province of Ontario:
The AGCO has statutory authority to carry out specific types of investigations, inspections and other similar activities in accordance with the Acts and regulations that it administers. The AGCO has dedicated Ontario Provincial Police (OPP) officers within its Investigation and Enforcement Bureau to perform these activities. A Memorandum of Understanding between the AGCO and OPP establishes that the AGCO is responsible for funding the salaries, wages, expenses and administrative support costs for these OPP officers. For the year ended March 31, 2021, the AGCO was charged $14,488 (2020 - $16,390) by the Ministry of the Solicitor General for these costs.
The Ministry of Government and Consumer Services (MGCS) provides the AGCO with network, telecommunication and administrative services. For the year ended March 31, 2021, the AGCO was charged $1,410 (2020 - $1,561) by MGCS for these costs. MGCS also provides the AGCO with other services such as accounting and cash management without charge.
The Ministry of Transportation supplies the AGCO with leased vehicles that are used by employees to perform their duties. For the year ended March 31, 2021, the AGCO was charged $661 (2020 - $893) for this cost.
For the year ended March 31, 2021, MAG charged the AGCO $481 (2020 - $376) for legal services, horse racing regulatory costs, Workplace Safety Insurance Board charges and other administrative services.
MAG provides the AGCO with leased office space at 6 (2020 – 6) locations across the province without charge.
- Liquor Control Board of Ontario (LCBO)
For the year ended March 31, 2021, the AGCO paid LCBO $125 (2020 - $136) for winery audit services and administrative costs.
- Ontario Racing Management Inc. (ORM)
For the year ended March 31, 2021, the AGCO paid ORM $120 (2020 - $138) for the rent of one office location.
- Pension costs
Certain employees of the AGCO participate in the Public Service Pension Plan (PSPP) and the Ontario Public Service Employees Union Pension Plan (OPSEUPP), which are defined benefit pension plans for employees of the Province and many provincial agencies. The Province of Ontario is the sole sponsor of PSPP and a joint sponsor of OPSEUPP with the Ontario Public Service Employees Union. The sponsors of these plans determine the AGCO’s annual payments to the respective plans. The AGCO’s responsibilities with regard to PSPP and OPSEUPP are limited to its contributions. Payments made to the plans are recognized as an employee benefits expenditure when contributions are made to the plans. The AGCO’s required annual payments of $4,573 (2020 – $4,428), is included in employee benefits expenditure in the Statement of Revenue and Expenditures.
- Post-employment benefits
- Non-pension post-employment benefits
The costs of non-pension benefits for eligible pensioners are paid by the Province of Ontario and is not included in this financial statement.
- Separation costs
Separation costs made to employees are recognized as an employee benefits expense when payment is made. For the year ended March 31, 2021, these separation costs amounted to $293 (2020 - $300).
- Non-pension post-employment benefits
- AGCO Board of Directors’ remuneration
The AGCO’s Board of Directors are part time appointees and are remunerated according to Schedule B of the Management Board of Cabinet’s Agencies and Appointments Directive. Total remuneration paid to the Board of Directors during the year was $105 (2020 - $121).
- COVID-19 impacts
On March 11, 2020, COVID 19 was declared a global pandemic by the World Health Organization. The Government of Ontario declared a state of emergency on March 17, 2020. In response, to support its licensees and registrants, the AGCO extended the terms of licences, authorizations and registrations through a series of announcements between March 18, 2020 and January 14, 2021. Effective March 18, 2020, the combined term extensions granted were as follows:
Active liquor and gaming licences, authorizations and registrations – 15 months;
Active cannabis licences, authorizations and registrations – 9 months;
Active horseperson licences – 12 months; and
Horseperson licences expired within six months of March 18, 2020 – 12 months.
Further, in recognition of the impact the pandemic had on businesses that rely on in-person patrons, the AGCO provided recovery waivers to the Ontario gaming sector and refunded any recoveries already collected.
The horse racing sector was allowed to operate for a significant part of the year without patrons in attendance. The AGCO waived fees for all Ontario racetrack operations for the months of April and May 2020. The AGCO also fully waived licensing and regulatory fees for racetrack operators who were required to cancel their scheduled races as a result of the emergency declaration and province wide shut down orders.
These AGCO cost relief measures resulted in a significant decrease in fees, levies and recoveries for the year ended March 31, 2021.