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Climate Change Central
Working Together on Sensible Solutions
2000 Annual Report
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Profile
Climate Change Central is a unique public-private partnership that promotes the development of innovative responses to global climate change and its impacts. Climate Change Central builds links and relationships between businesses, governments and other stakeholders in Alberta interested in pursuing greenhouse gas reduction initiatives. This annual report is the Chief Executive Officer’s report to the Alberta Minister of Environment on Climate Change Central’s achievements and financial statements for the year 2000. The report also provides information to stakeholders wishing to learn about our organization. With offices in Calgary and Edmonton, Climate Change Central operates as a not-for-profit corporation supported by public and private funding.
Table of Contents
1
CEO’s Message
3
Climate Change Central – Introduction
7
Vision and strategic objectives
9
Organization and Board of Directors
11
Financial statements
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CEO’s Message
Welcome to Climate Change Central’s first annual report. This report is titled “working together on sensible solutions,” because these words sum up the unique opportunity of Climate Climate Central. They emphasize the importance of working together to make a difference in addressing environmental issues. They reflect the rich tradition that Albertans share in developing pragmatic solutions to tough environmental challenges. As an environmental issue, climate change is too far-reaching to be left solely to any one organization or sector to solve. Individual organizations in the private and public sectors certainly have their role to play. But for Albertans to be truly successfully in tackling this major environmental issue, industry, government and other stakeholders must work together to achieve efficient and cost-effective solutions. In November 1999, Climate Change Central was established as a unique public-private partnership to help to meet this need for collaborative action. Climate Change Central’s objective is to build links and relationships between businesses, governments and other stakeholders in Alberta interested in pursuing new greenhouse gas reduction initiatives. Since its founding, a brand new organization has rapidly taken shape. In 2000, Climate Change Central’s Board of Directors was formed, bringing together a distinguished group of leaders from across our different sectors in Alberta. These currently include Premier Ralph Klein as Executive Chair of the Board, and the Hon. Lorne Taylor, Minister of Environment, and David Tuer, President and Chief Executive Officer, PanCanadian Petroleum, as Co-Chairs. The Board will provide ongoing strategic direction and oversight to Climate Change Central’s programs and activities.
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During 2000, staff were also hired from the private and public sectors to oversee daily operations for Climate Change Central, and ambitious strategic plans and objectives were developed. These objectives are summarized on pages 7 and 8. In May 2001, we held an official office opening for Climate Change Central in Calgary, where we announced the organization’s investment in two climate change projects. One project will estimate the costs of injecting carbon dioxide, a greenhouse gas, into underground geological formations in Alberta. The other project will study potential greenhouse gas reductions through land management practices. Over the coming months, Climate Change Central’s programs will focus on innovation, technology, education and public participation to reduce greenhouse gas emissions and to strengthen Alberta’s environmental energy advantage. These activities will lead to further project announcements. This annual report provides a review of financial statements for 2000 and an introduction to our organization. A more detailed annual report will be issued for 2001, after Climate Change Central’s first full year of operation. As our organization moves forward with our plans and project activities, I look forward to working with Albertans on developing sensible solutions to climate change and to keeping you informed on Climate Change Central’s progress in future annual reports.
Allan F. Amey, President and Chief Executive Officer
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Climate Change Central Introduction
Why is climate change an important issue?
In Alberta and internationally, there is growing awareness of the issue of global climate change. This issue represents a significant risk to Alberta’s resource-based economy and our future quality of life. At the same time, it is also an important opportunity for Albertans to turn a major environmental challenge to our advantage. Why was Climate Change Central established?
In 1999, a Round Table meeting sponsored by the Alberta government brought together leaders from Alberta’s private and public sectors to discuss the climate change challenge. These leaders urged collaboration among Albertans, and recommended the creation of a public-private partnership to provide a renewed focus for action. Climate Change Central was established to meet this need. How will Climate Change Central support climate change action?
Climate Change Central’s role is to serve as a: • broker and door-opener for stakeholders to advance climate change solutions and projects • clearinghouse for information on best practices, current activities and available opportunities • accelerator and incubator in identifying potential partners and funding • barrier-busting advocate to overcome economic, regulatory, market or technology constraints • communicator and marketer of Alberta’s climate change accomplishments In this way, our organization fosters actions that help Albertans to address a major environmental issue while strengthening the province’s economy and long-term competitiveness.
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What kinds of actions are supported by Climate Change Central?
Climate Change Central brings together project proponents and funders to encourage project activities in a number of program areas: • greenhouse gas management (capture and geologic storage of carbon dioxide emissions, and use of methane emissions) • land use management (biological sinks that capture and store carbon dioxide emissions) • energy efficiency in buildings and communities • improved vehicle and transportation efficiencies • alternative power generation • public education and outreach How is Climate Change Central funded?
Climate Change Central is a not-for-profit corporation supported by public and private funding. To date the Alberta government has contributed $7.5 million to establish and support the corporation.
The climate change innovation process
GETTING STARTED
OPPORTUNITY
4
• Proposals • Applicant self assessment
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C3 Climate Change Central
promotes leadership by
bringing together diverse
opportunities and people to achieve effective climate change actions; innovation through the exchange of knowledge, ideas and best practices; and outreach
CELEBRATE SUCCESS
activities that focus attention on Alberta’s successes in addressing the climate change challenge.
DEVELOPING YOUR PROJECT • Partnerships • Funding • Mentoring • Knowledge networks • Climate change intelligence
DELIVERING YOUR PROJECT • Marketing/ promotional activities
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Climate Change Central opens green office
When Climate Change Central officially opened its Calgary headquarters in May 2001, it provided the city with a showcase example of sustainable design. The office, designed by Duncan and Company Interior Design Consultants of Calgary, provides a number of environmental benefits, including: • energy-efficient lighting features that will save 21 tonnes of greenhouse gas emissions annually • innovative floor coverings from recycled materials • recyclable office furniture • water conservation fixtures • reuse of building materials For its strict compliance with environmental criteria, the office has been awarded Environment Canada’s EcoLogo certification. The office is only the second in Canada to be certified under the EcoLogo Program.
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Vision and strategic objectives
Our vision
Our strategic objectives
Alberta, as an acknowledged world leader, achieves zero net greenhouse gas emissions* while enhancing the province’s economic performance, quality of life, and ability to adapt to climate change effects. expand Alberta’s efforts to address climate change
• enhance Albertans’ performance in reducing net greenhouse gas emissions while strengthening Alberta’s economy and long-term competitiveness • promote an enabling framework of policies and programs that expedite results and remove barriers to action in both the short and long term accelerate Alberta’s leadership in technological innovation
• accelerate technology deployment in Alberta, together with commercialization and prototyping initiatives • showcase and expand Alberta’s environmental competitive advantage through growing national and international technology transfers accentuate Alberta’s strategic role
• establish a clearinghouse for local and global best practices to address climate change • champion effective responses to climate change in national and international arenas by focusing attention on Albertans’ exemplary performance
* net greenhouse emissions – man-made greenhouse gas emissions less any reductions achieved through a variety of mechanisms.
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leverage Alberta’s global relationships
• actively pursue national and international alliances with climate change leaders for specific climate change initiatives • multiply the funding available for climate change activities in Alberta through the development of a broad portfolio of project and financial alliances celebrate Alberta’s successes in addressing climate change
• communicate broadly Alberta’s technical, education and policy successes in contributing to the climate change challenge • expand public awareness of the climate change issue and what individuals, businesses, institutions and governments can do about it
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Organization and Board of Directors
Staff at Climate Change Central coordinate a wide range of programs and services, and offer business and government experience in climate change policy, strategic planning and project development. They report to Allan F. Amey, President and CEO, Climate Change Central. The organization’s Board of Directors is comprised of experienced leaders including representatives from major industry sectors, non-governmental organizations, institutions, municipalities and the Government of Alberta. The Board provides direction to Climate Change Central’s strategic plans and objectives, and includes the following members: • Honorable Ralph Klein Premier, Government of Alberta (Executive Chair)
• Honorable Lorne Taylor Minister of Environment, Government of Alberta (Co-Chair)
• David A. Tuer President & CEO, PanCanadian Petroleum Limited (Co-Chair)
• Elaine McCoy, Q.C. President, Macleod Institute for Environmental Analysis (Vice Co-Chair)
• Luke Ouellette MLA, Innisfail-Sylvan Lake
• Bruce Beattie Chair, Alberta Environmentally Sustainable Agriculture Council
• Charles Fischer President & CEO, Nexen Inc.
• Paul Griss • Bob Hawkesworth Alderman, City of Calgary
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• Bill Hunter Vice-President, Operations, Alberta-Pacific Forest Industries Inc.
• Darshan Kailly President & CEO, Canadian Freightways Canada
• David Lynch Dean, Faculty of Engineering, University of Alberta
• Patricia McCunn-Miller Board Member, National Round Table on the Environment and the Economy
• Lewis Nakatsui President, Lincolnberg Homes Ltd.
• David Pollock Executive Director, Pembina Institute for Appropriate Development
• Ross Risvold Mayor, Town of Hinton
• Steve Snyder President & CEO, TransAlta Corporation
• Gordon Ulrich President & CEO, Luscar Ltd.
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C L I M AT E C H A N G E C E N T R A L
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Auditor’s Report
To the Directors We have audited the statement of financial position of CLIMATE CHANGE CENTRAL as at DECEMBER 31, 2000 and the statements of operations, fund balances and cash flows for the nine months then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable 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 financial statements present fairly, in all material respects, the financial position of the Corporation as at December 31, 2000, and the results of its operations and cash flows for the nine month period then ended in accordance with generally accepted accounting principles.
CALGARY, ALBERTA
CHARTERED ACCOUNTANTS FOR YOU, LLP
March 22, 2001
CHARTERED ACCOUNTANTS
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Statement of Financial Position as at December 31, 2000
Restricted Operating Fund
ASSETS
CURRENT
Cash
$
Marketable securities (note 3)
210,195 5,193,760
Accounts receivable
19,276
Prepaid expenses
30,500 5,453,731
CAPITAL ASSETS (note 4)
LIABILITIES
210,242 5,663,973
$
160,042
CURRENT
Accounts payable FUND BALANCES
$
210,242
INVESTED IN CAPITAL ASSETS RESTRICTED FUND BALANCE (note 5)
5,293,689 5,503,931 $
APPROVED ON BEHALF OF THE BOARD:
David Tuer Director
12
Charles Fischer Director
5,663,973
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Statement of Operations for the nine month period ended December 31, 2000
Restricted Operating Fund
REVENUES
Donations in Kind-Province Government (note 6)
$
Donations in Kind-Industry (note 7)
4,045 21,347
Provincial Government Grant (note 5)
6,000,000
Interest income
96,748 6,122,140
EXPENSES
Amortization
22,169
Board governance
132,814
Contracts, wages and benefits
299,992
General and administration
113,395
Premise operations and maintenance
49,839 618,209 5,503,931
EXCESS OF REVENUES OVER EXPENSES
Fund balance, beginning of period FUND BALANCE END OF PERIOD
13
– $
5,503,931
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Statement of Cash Flows for the nine month period ended December 31, 2000
Restricted Operating Fund
CASH FLOWS FROM OPERATING ACTIVITIES
Grants and Ministry Support
$
6,004,045
Industry contributions
21,347
Interest income
96,748
Cash payments for operating expenses
(485,774)
Net cash generated from operating activities
5,636,366
CASH FLOWS FROM FINANCING AND INVESTING ACTIVITIES
Purchase of capital assets
(232,411)
Purchase of marketable securities
(5,193,760)
Net cash used in financing and investing activities
(5,426,171) 210,195
INCREASE IN CASH FUNDS FOR THE PERIOD
Cash funds, beginning of period CASH FUNDS, END OF PERIOD
14
– $
210,195
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Notes to Financial Statements December 31, 2000
NOTE 1
Purpose of the Organization
NOTE 2
Significant Accounting Policies
Climate Change Central (“The Company”) was incorporated on March 31, 2000, under part 9 of the Companies Act, (Alberta), as a not-for-profit company. "The Company" is to act as a catalyst for, and a coordinator of, activities undertaken by Alberta individuals, businesses, institutions and governments to reduce greenhouse gas emissions and to increase Alberta's Environmental Energy Advantage. The Company is a not-for-profit organization and under section 149(1) of the Income Tax Act is exempt from the payment of income taxes.
These financial statements have been prepared on the basis of generally accepted accounting principles applicable to a going concern which assumes that the Company will continue to be able to realize its assets and discharge its liabilities in the normal course of operations. These financial statements are prepared on accounting policies of which the more significant ones are: a) Fund Accounting
The Company follows the restricted fund method of accounting for contributions. The operating fund accounts for the company's operations. This fund is comprised of the following: i) The ‘Operating Fund’ see note # 5; and ii) Other Funds received from Government and Industry, which are restricted to use in operations. b) Revenue Recognition
Restricted contributions are recognized in the period in which they are received or receivable if the amount to be received can be reasonably estimated and collection reasonably assured. Amounts pledged as future contributions are not recognized in the accounts. There were no unrestricted funds received in the current year.
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c) Amortization of Capital Assets
Purchased capital assets are recorded at cost. Capital assets under $500 are expensed to the appropriate expense accounts. The Company charges amortization on capital assets on a straight-line basis over their estimated useful lives using the following rates: Computer hardware Computer software Furniture and fixtures Leasehold improvements Office equipment
3 years 3 years 5 years 10 years 5 years
d) Investments
Investments are recorded at the lower of cost and market value. e) Goods and Services Tax
The Company is entitled to a rebate of 50% of the GST paid in the year. One half of the GST paid is recorded as a receivable and one half is added to the cost of the good or service purchased. f) Contributed Services
Volunteers contribute significant hours to Climate Change Central to assist the company in carrying out its mandate. Because of the difficulty in determining their fair value, contributed services are not recognized in the financial statements. g) Financial Instruments
The Company's financial instruments consist of cash, marketable securities, accounts receivable and accounts payable. The fair value of these financial instruments approximates their carrying values.
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NOTE 3
Marketable
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Marketable securities consist of premium money market fund investments invested in BMO Mutual Funds with the Bank of Montreal.
Securities
December 31, 2000
NOTE 4
Capital Assets Cost
Furniture and fixtures Office equipment Leasehold improvements Computer hardware Computer software
$ 156,480 2,768 50,998 14,889 7,276 $ 232,411
$
$
Accumulated Amortization
Net Book Value
15,648 277 2,550 2,481 1,213 22,169
$ 140,832 2,491 48,448 12,408 6,063 $ 210,242
The Company has granted security interests to certain lessors of office equipment and computer hardware.
NOTE 5
Province of Alberta Funding Agreement
Pursuant to the provisions of the Climate Change Central Operations the “Funding Agreement” dated July 13, 2000 between the Company and Her Majesty the Queen in Right of Alberta as represented by the Minister of the Environment (The “Province”), the Province paid to the Company the sum of $6,000,000 to establish an Operating Fund, (The “Operating Fund”). The Operating Fund may be applied to reasonable start up costs and administrative cost of the company for the purposes of its establishment and its operations in furtherance of the Objectives set forth in the Funding Agreement which are consistent with the Business Plan and Strategic Plan as may be in effect from time to time. All income earned by the investment of the Operating Fund shall form part of the Operating Fund. 17
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Unless terminated sooner, in accordance with the Provincial Funding Agreement or by mutual agreement of the Minister and the Company, the Funding Agreement shall end on March 31, 2003 at which time the Minister may require the Company to pay to the Minister all or any portion of the Operating Fund that has not been expended or committed to be expended. The Company had granted to the Government a security interest in its present and after acquired personal property.
NOTE 6
Other Ministry Support
The Province has provided seconded staff. This has been recognized in these financial statements in the amount totaling $4,045.
Industry Contributions
Industry has provided seconded staff. This has been recognized in these financial statements in the amount totaling $21,347.
NOTE 8
As this is the first year of operation of the Company, no comparative figures are available.
NOTE 7
Comparative Figures
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NOTE 9
Commitments
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The Company has entered into operating lease agreements whose terms extend beyond the current fiscal year. The commitments are as follows: a) Premises
The Organization has entered into a lease agreement expiring on June 30, 2005. The minimum annual lease payments are as follows: For the 12 months ending December 31, 2001 For the 12 months ending December 31, 2002 For the 12 months ending December 31, 2003 For the 12 months ending December 31, 2004 For the 12 months ending December 31, 2005
$54,509 $56,605 $60,798 $62,895 $31,447
b) Computer Equipment
The Organization has entered into a lease agreement expiring on May 31, 2003. The minimum annual lease payments are $24,123.
NOTE 10
Share Capital
Share Capital is not disclosed on the statement of financial position as per disclosure requirements for not-for-profit organizations. Authorized: 100,000 common voting shares with a nominal or par value of $1.00 each Issued: 200 common voting shares for a total value of $200.00 were issued in 2000.
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“Climate Change Central is a unique private-public partnership that will help us tackle a global concern with the know-how and creativity of Alberta’s greatest resource – its people.” Ralph Klein, Premier of Alberta
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Climate Change Central
Suite 100 999 – 8th Street S.W. Calgary, Alberta Canada T2R 1J5 Tel: (403) 517-2700 Fax: (403) 517-2727
7th Floor South Petroleum Plaza 9915 – 108 Street Edmonton, Alberta Canada T5K 2G8
Toll-free phone: 1-866-609-2700 Email: contact@climatechangecentral.com Website: www.climatechangecentral.com