YEU Draft Financial Statements

43

YUKON EMPLOYEES UNION Whitehorse, YT

FINANCIAL STATEMENTS For the year ended March 31, 2022

Draft - April 20, 2022

44

TABLE OF CONTENTS Page

Management's Responsibility for Reporting

Independent Auditor's Report

Statement of Financial Position

1

Statement of Operations

2

Statement of Changes in Net Assets

3

Statement of Cash Flows

4

Notes to the Financial Statements

5 - 13

Schedule of Project Grant

Schedule of Government Of Canada Wage Subsidy

Draft - April 20, 2022

45

MANAGEMENT'S RESPONSIBILITY FOR REPORTING The accompanying financial statements have been prepared by management, which is responsible for the reliability, integrity and objectivity of the information provided. They have been prepared in accordance with Canadian accounting standards for not-for-profit organizations. Where necessary the statements include amounts that are based on informed judgements and estimates by management, giving appropriate consideration to reasonable limits of materiality.

In discharging its responsibility for the integrity and fairness of the financial statements and for the accounting systems from which they are derived, management maintains the necessary system of internal controls designed to provide assurance that transactions are authorized, assets are safeguarded and proper records are maintained. These controls include quality standards in hiring and training employees, written policies and procedures manuals, and accountability for performance within appropriate and well-defined areas of responsibility. The Board's management recognizes its responsibility for conducting the Board's affairs in accordance with the requirements of applicable laws and sound business principles, and for maintaining standards of conduct that are appropriate.

Avery Cooper & Co. Ltd., Chartered Professional Accountants annually provides an independent, objective audit for the purpose of expressing an opinion on the financial statements in accordance with Canadian generally accepted auditing standards.

Executive Director April 21, 2022

46

INDEPENDENT AUDITOR'S REPORT To the Members of Yukon Employees Union Opinion We have audited the financial statements of Yukon Employees Union (the "Union"), which comprise the Statement of Financial Position as at March 31, 2022, and the Statements of Operations, Changes in Net Assets, and Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Union as at March 31, 2022, and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Union in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Union's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Union or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Union's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Draft - April 20, 2022

47

INDEPENDENT AUDITOR'S REPORT, continued



Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.



Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Union's internal control.



Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.



Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Union's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Union to cease to continue as a going concern.



Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Avery Cooper & Co. Ltd. Chartered Professional Accountants Yellowknife, NT April 21, 2022

Draft - April 20, 2022

48

YUKON EMPLOYEES UNION STATEMENT OF FINANCIAL POSITION March 31, 2022 ASSETS 2022 CURRENT Cash Accounts receivable (note 3) Current portion of loan receivable

$ 1,066,272 212,732 56,101

2021

$

872,856 207,861 55,961

1,335,105

1,136,678

LOAN RECEIVABLE (note 4)

1,530,110

1,586,210

INVESTMENTS (note 5)

4,578,293

4,399,521

DUE FROM RELATED PARTY (note 6)

18,408

42,408

TANGIBLE CAPITAL ASSETS (note 7)

245,462

277,913

$ 7,707,378

$ 7,442,730

$

$

LIABILITIES CURRENT Trade payables and accruals Wages and benefits payable

29,019 127,948

54,874 174,100

156,967

228,974

39,767

80,750

196,734

309,724

5,993,048

5,569,329

INVESTED IN CAPITAL ASSETS per page 3

245,465

277,916

RESTRICTED EMERGENCY FUND per page 3

1,272,131

1,285,761

7,510,644

7,133,006

$ 7,707,378

$ 7,442,730

SEVERANCE LIABILITY (note 8)

NET ASSETS UNRESTRICTED per page 3

Approved: Director

Director

Draft - April 20, 2022 See accompanying notes

1

49

YUKON EMPLOYEES UNION STATEMENT OF OPERATIONS For the year ended March 31, 2022 (note 20) 2022 Budget REVENUES Investment income Membership dues Interest income Project grant Government of Canada wage subsidy

$

2,987,214 -

2022 Actual

$

78,569 3,170,070 4,039 -

2021 Actual

$

80,219 2,810,495 12,315 32,915 12,855

2,987,214

3,252,678

2,948,799

20,000 98,703 110,000 41,500 3,000 3,121 63,000 83,000 203,000 133,000 2,228,890

32,451 1,573 114,310 136,233 37,488 257 3,195 104,537 99,510 205,317 40,642 2,199,729

44,703 93,151 52,002 2,657 144,438 68,930 199,588 38,588 2,253,705

2,987,214

2,975,242

2,897,762

EXCESS OF REVENUES OVER EXPENSES FROM OPERATIONS

-

277,436

51,037

OTHER INCOME (EXPENSES) Gain (loss) on sale of investments Unrealized gain (loss) on investments Investment management fees

-

(191) 120,357 (19,964)

20,765 82,525 (19,356)

-

100,202

83,934

EXPENSES Amortization Bad debts Communications Conferences Donations Fees and dues Interest and bank charges Office & Administration Professional fees Rent Travel Wages and benefits

EXCESS OF REVENUES OVER EXPENSES

$

-

$

377,638

$

134,971

Draft - April 20, 2022 See accompanying notes

2

50

YUKON EMPLOYEES UNION STATEMENT OF CHANGES IN NET ASSETS For the year ended March 31, 2022 (note 20) 2022

BALANCE, opening

Unrestricted

Invested in Capital Assets

$ 5,569,329

$

277,916

Restricted Emergency Fund

Total

$ 1,285,761

$ 7,133,006

Excess of revenues over expenses

377,638

-

-

377,638

Amortization of capital assets

32,451

(32,451)

-

-

Net transfer from unrestricted fund to restricted fund

13,439

-

(13,439)

-

191

-

(191)

-

Unrestricted gain on restricted marketable securities BALANCE, closing

$ 5,993,048

$

245,465

$ 1,272,131

$ 7,510,644 2021

BALANCE, opening

Unrestricted

Invested in Capital Assets

$ 5,436,032

$

301,379

Restricted Emergency Fund

Total

$ 1,260,624

$ 6,998,035

Excess of revenues over expenses

134,971

-

-

134,971

Purchase of capital assets

(21,240)

21,240

-

-

Amortization of capital assets

44,703

(44,703)

-

-

Unrestricted gain on restricted marketable securities

(25,137)

-

25,137

-

BALANCE, closing

$ 5,569,329

$

277,916

$ 1,285,761

$ 7,133,006

Draft - April 20, 2022 See accompanying notes

3

51

YUKON EMPLOYEES UNION STATEMENT OF CASH FLOWS For the year ended March 31, 2022 2022 CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from membership dues Cash receipts from other revenue Cash paid to suppliers Cash paid for wages and benefits

2021

$ 3,178,144 $ 3,068,620 190,020 199,086 (809,903) (622,723) (2,225,050) (2,226,090) 333,211

418,893

24,000 (40,983)

24,000 -

(16,983)

24,000

55,960 (178,772)

55,821 (21,240) (172,290)

(122,812)

(137,709)

INCREASE IN CASH

193,416

305,184

CASH, opening

872,856

567,672

CASH, closing

$ 1,066,272

CASH FLOWS FROM FINANCING ACTIVITIES Repayment from related party Severance liability

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from loan receivable Purchase of tangible capital assets Increase in investments

$

872,856

Draft - April 20, 2022 See accompanying notes

4

52

YUKON EMPLOYEES UNION NOTES TO THE FINANCIAL STATEMENTS March 31, 2022 1.

NATURE OF OPERATIONS The Yukon Employees Union (the "Union") (the "Union") is a trade union representing various employee groups ("Locals") in the Yukon Territory since 1966. The Union negotiates contracts, resolves employee grievances, and facilitates training to Union members. The Union is a Component of, and operates under a Charter granted by, the Public Service Alliance of Canada ("PSAC"). The Union is exempt from income taxes under paragraph 149(1)(k) of the Income Tax Act (Canada).

2.

SIGNIFICANT ACCOUNTING POLICIES These financial statements are prepared in accordance with Canadian accounting standards for notfor-profit organizations. The significant accounting policies are detailed as follows: (a) Cash equivalents The Union considers all investments with maturities of three months or less and bank loans with no fixed terms of repayment to be cash equivalents.

Cash with investment managers is considered part of the investments. (b) Financial instruments The Union initially measures its financial assets and liabilities at fair value, except for certain non-arm’s length transactions. The Union subsequently measures its financial assets and financial liabilities at amortized cost, except for securities quoted in an active market, which are subsequently measured at fair value. Unrealized gains and losses as a result of fair value adjustments at year end are included in investment income for the year. (c) Tangible capital assets Tangible capital assets are recorded at cost. The Union provides for amortization using the declining balance method at rates designed to amortize the cost of the tangible capital assets over their estimated useful lives. One half of the year's amortization is recorded in the year of acquisition. No amortization is recorded in the year of disposal. The annual amortization rates are as follows: Automotive Paving Office equipment Computer equipment

30% 5% 20% 30 - 55%

Amortization of leasehold improvements is recorded over the remaining term of the lease plus the first renewal option at an annual rate of 6%.

Draft - April 20, 2022 5

53

YUKON EMPLOYEES UNION NOTES TO THE FINANCIAL STATEMENTS March 31, 2022 2.

SIGNIFICANT ACCOUNTING POLICIES, continued (d) Revenue recognition The Union recognizes revenue from dues when received or receivable when the amount to be received can be reasonably estimated and ultimate collection is reasonably assured.

Investment income and interest on loan are recognized as revenue when earned.

Rental revenue is recognized on a monthly basis as per the rental agreement. (e) Measurement uncertainty The preparation of financial statements in accordance with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Significant areas requiring the use of estimates include: Allowance for doubtful accounts, severance liability, and the estimated useful lives of capital assets. Actual results may differ from management's best estimates as additional information becomes available in the future.

3.

ACCOUNTS RECEIVABLE 2022 Due from PSAC: - Membership dues - Cost sharing - Rent Staff - loans Other receivables Superannuation recovery

2021

$

211,955 308 469 -

$

147,313 30,237 16,397 2,919 6,479 4,516

$

212,732

$

207,861

Draft - April 20, 2022 6

54

YUKON EMPLOYEES UNION NOTES TO THE FINANCIAL STATEMENTS March 31, 2022 4.

LOAN RECEIVABLE Unsecured loan receivable from Yukon Employees Union Building Association, 40 year amortization period, repayable in blended monthly installments of $5,000 including interest at 0.25%, maturing in 2049.

Loan receivable

2022

2021

$ 1,586,211

$ 1,642,171

56,101

55,961

$ 1,530,110

$ 1,586,210

Less current portion

Estimated principal receipts are as follows: 2023 2024 2025 2026 2027 Subsequent years

$

56,101 56,241 56,382 56,523 56,664 1,304,300

$ 1,586,211

Draft - April 20, 2022 7

55

YUKON EMPLOYEES UNION NOTES TO THE FINANCIAL STATEMENTS March 31, 2022 5.

INVESTMENTS Investments are managed by CIBC Wood Gundy. The fair value of the Union’s investments are determined by reference to published price quotations in an active market.

The Union's investments as at March 31, 2022 are as follows: 2022 Market Unrestricted investments: Cash and cash equivalents Equities

Restricted investments: Cash and cash equivalents Fixed income

$

24,690 3,043,887

2022 Cost

$

24,690 3,299,215

2021 Market

$

43,228 2,980,527

2021 Cost

$

43,228 3,088,466

3,068,577

3,323,905

3,023,755

3,131,694

13,953 1,285,401

13,953 1,240,435

422,254 863,507

422,254 845,573

1,299,354

1,254,388

1,285,761

1,267,827

$ 4,367,931

$ 4,578,293

$ 4,309,516

$ 4,399,521

Restricted investments have been set aside to offset any costs that may arise attributable to the internally restricted Emergency Strike Fund described in Note 10.

Draft - April 20, 2022 8

56

YUKON EMPLOYEES UNION NOTES TO THE FINANCIAL STATEMENTS March 31, 2022 6.

RELATED PARTY TRANSACTIONS (a) During the year, the Union entered into transactions with the Yukon Employees Union Building Association which is related by common control. (note 20) 2022 Transactions Revenue - Interest income Expenses - Rent

2021

$

4,039 $ (183,726)

4,179 (180,913)

$

(179,687) $

(176,734)

These transactions are in the normal course of operations and have been valued in these financial statements at the exchange amount which is the amount of consideration established and agreed to by the related parties.

The advances are non-interest bearing with no set terms of repayment. (b) Due from related party 2022 Yukon Employees Union Building Association

$

18,408

2021 $

42,408

The balance due from the related party is unsecured, non-interest bearing with no specific terms of repayment. Since there is no intention to request payment of this amount during the next fiscal year, this amount has been classified as a non-current liability in the financial statements.

7.

TANGIBLE CAPITAL ASSETS

Cost Automotive Paving Office equipment Leasehold improvements Computer equipment

$

Accumulated amortization

2022

2021

Net

Net

62,039 147,683 380,046 243,929 191,058

$

49,378 69,876 357,008 119,524 183,507

$

12,661 77,807 23,038 124,405 7,551

$

18,087 81,902 28,797 132,346 16,781

$ 1,024,755

$

779,293

$

245,462

$

277,913

Draft - April 20, 2022 9

57

YUKON EMPLOYEES UNION NOTES TO THE FINANCIAL STATEMENTS March 31, 2022 8.

SEVERANCE LIABILITY Employees of the Union accrue severance benefits based on their current wage and period of service. The estimated liability for each employee is based on the assumption the Union will close operations and all employees laid off. Under the Collective Bargaining Agreement, if laid off for the first time, employees accrue severance at a rate of two weeks pay for the first and one week pay for each succeeding complete years of employment. If an employee resigns before retiring they accrue severance at one half of one week's salary per year of service. The rate of pay used to determine their actual severance is their current rate at the time they leave the Union.

9.

COVID-19 On March 11, 2020, there was a global outbreak of a novel coronavirus known as COVID-19, which has had a significant impact on organizations and companies through the restrictions put in place by federal, provincial, territorial and municipal governments regarding travel, business operations and isolation or quarantine orders.

While the Union is unable to quantify the overall financial effect of these events, it continues to take measures to mitigate the effects of the current crisis.

10.

RESTRICTED EMERGENCY STRIKE FUND A resolution was passed at the 2005 Convention which initiated the creation of the Emergency Strike Fund designed to address the costs incurred as a result of any future strike of the members of the Yukon Employees Union.

Restrictions on this fund have been imposed internally by the Executive of the Union.

Expenses charged to the Fund during the year is $nil (2021 - $nil).

The balance at the end of the year agrees to the market value of the investment account with CIBC Wood Gundy which was set up to support this Fund (see Note 5).

11.

MEMBERSHIP DUES 2022 Gross dues from PSAC Dues payable to Locals

2021

$ 3,176,673 $ 2,822,533 (6,603) (12,038) $ 3,170,070

$ 2,810,495

Draft - April 20, 2022 10

58

YUKON EMPLOYEES UNION NOTES TO THE FINANCIAL STATEMENTS March 31, 2022 12.

RENTAL REVENUE The Union entered into a lease and cost sharing agreement with PSAC whereby it rents part of the office and meeting space from the Union at $5,846 per month. The lease expired on December 31, 2018 and was not renewed.

13.

LEASE COMMITMENTS The Union's commitment under a property lease agreement with the Yukon Employees Union Building Association, exclusive of occupancy costs, is $180,932 ($15,832 per month) for the next fiscal year. The rate will be reviewed on an annual basis and the lease is indefinite.

Additionally, the Union has a contract with Xerox Canada Ltd. for printing equipment with scanning that expires on October 31, 2022. Quarterly charges for the lease are $747. Monthly charges are based on the number of copies printed and scanned.

14.

FINANCIAL INSTRUMENTS The Union's financial instruments consist of cash, marketable securities, accounts receivable, restricted marketable securities, loan receivable, accounts payable and accrued liabilities, wages and benefits payable, and severance liability. Unless otherwise noted, it is management's opinion that the Union is not exposed to significant interest rate, currency, credit, cash flow, or liquidity risks. The fair value of these financial instruments approximate their carrying values, unless otherwise noted.

Market risk The Union is exposed to significant market risk, which is the risk that the value of marketable securities will fluctuate as a result of changes in market prices. Market values of marketable securities are determined in full by direct reference to published price quotations in an active market.

15.

COMMUNICATIONS 2022 Actual

2022 Budget Telephone Newsletter Advertising and promotion Library and subscriptions Internet and website

2021 Actual

$

38,703 25,000 20,000 14,220 780

$

53,787 24,881 16,506 16,024 3,112

$

48,666 18,750 5,260 19,950 525

$

98,703

$

114,310

$

93,151

Draft - April 20, 2022 11

59

YUKON EMPLOYEES UNION NOTES TO THE FINANCIAL STATEMENTS March 31, 2022 16.

DONATIONS 2022 Actual

2022 Budget Donations Bursary Political Action

17.

2021 Actual

$

25,000 8,000 8,500 -

$

22,488 8,000 7,000 -

$

12,466 8,000 31,536 -

$

41,500

$

37,488

$

52,002

OFFICE AND ADMINISTRATION 2022 Actual

2022 Budget Office supplies Printing

2021 Actual

$

41,000 2,000

$

59,133 27,876

$

59,133 4,708

$

43,000

$

87,009

$

63,841

Total costs of $nil (2021- $21,240) in computer equipment have been treated as capital costs and added to tangible capital assets.

18.

RENT 2022 Budget Office rent Meeting room rental Insurance

2022 Actual

2021 Actual

$

190,000 3,000 -

$

183,726 1,101 20,490

$

180,913 1,376 17,300

$

193,000

$

205,317

$

199,589

Draft - April 20, 2022 12

60

YUKON EMPLOYEES UNION NOTES TO THE FINANCIAL STATEMENTS March 31, 2022 19.

TRAVEL 2021 Actual

2021 Budget Travel Accommodation Per diems

20.

$

57,000 40,000 36,000

$

9,619 28,066 12,576

$

8,170 18,484 11,934

$

133,000

$

50,261

$

38,588

WAGES AND BENEFITS

Wages - Staff Wages - Members Medical and Health Insurance Superannuation Canada Pension Plan & Employment Insurance Staff Training Yukon Bonus Vehicle Allowance Workers Compensation

21.

2020 Actual

2021 Budget

2021 Actual

2020 Actual

$ 1,240,047 555,000 144,000 155,502

$ 1,217,082 556,248 148,386 150,239

$ 1,215,928 608,610 137,839 169,128

52,941 24,800 36,000 15,600 10,000

58,880 14,517 30,000 15,080 9,297

52,405 7,758 30,000 14,430 4,752

$ 2,233,890

$ 2,199,729

$ 2,240,850

BUDGET AMOUNTS The 2022 budget amounts on the Statement of Operations, are presented for information purposes only and are unaudited. The budget was approved by the members at the 2021 Convention.

Draft - April 20, 2022