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Tim Beauchamp, Director
Public Sector Accounting
Chartered Professional Accountants
277 Wellington Street West
Toronto, Ontario M5V 3H2
May 14, 2013
Re: PSAB Draft Strategic Plan 2013-2016
Dear Mr. Beauchamp,

We have read the above-mentioned Invitation to Comment and in general agree with the Boards
objectives and strategies over the planning period. However we do have the following comments
for your consideration:
The objectives of the draft strategic plan are all very much focused on stakeholders.
With Government Not-for-Profit Organizations and Other Government Organizations now
applying Public Sector Accounting Standards (PSAS) the stakeholder group is much
broader. In our client base we now have a number of small organizations applying PSAS.
We are concerned that those stakeholders are not being adequately considered. The
strategic plan seems to focus only on improving communications with the Boards
historical stakeholders. We agree that communication with this group needs to be
improved; however lines of communication need to be opened with the broader group as
well.
It is also important to note that this broader group of stakeholders are likely not a group
that will respond to requests for comment. If the lines of communication are going to be
opened with these stakeholders, the Board is going to need to develop new methods of
outreach.
Paragraph 16 indicates that the current standards have been well accepted. In general
we agree with this comment, however we are noticing an increased number of instances
where organizations are adopting a PSAS plus / minus approach and in many cases these
organizations are being instructed or legislated to do so by the government which
controls the organization. This practice seems to be primarily related to government
transfers and financial statement presentation. As long as this practice continues the
Boards objective of achieving one financial reporting framework used by all entities who
apply the public sector handbook is undermined.
We have concerns with the phase out of the PS 4200 Series. Our concerns are twofold:
1. The proposed timeline seems very short. Many government not-for-profits are
currently in the process of adopting PSAS with the PS 4200 Series for the very first
time. Asking these same entities to adopt PSAB without the PS 4200 Series so
soon after making the initial transition seems overly burdensome.
2. As mentioned above we believe the Board needs to open the lines of
communication with its new stakeholders. Many of those new stakeholders are
government not-for-profit organizations that have chosen to apply the PS 4200
Series. In many cases this decision was made because these are community
based organizations whose members view their organization as being very similar
to a private sector not-for-profit organization. Before any decisions are made
related to the elimination of the PS 4200 Series, we would hope the Board makes
significant outreach efforts to these stakeholders. We are aware that the process
to eliminate the PS 4200 Series is linked to the Joint PSAB/AcSB project to
improve not-for-profit standards.
We agree with the need to have a conceptual framework that is widely accepted and
used for the development of standards. However we are concerned with the apparent
disconnect between the Board and its constituents. Our understanding is that the Board
is moving towards a conceptual framework that is very much driven by the Statement of
Financial Position, while the focus of constituents is on the results of the Statement of
Operations. Further to our above comments related to acceptance of the standards, this
disconnect could undermine many of the Boards objectives as laid out in the strategic
plan.
Thank you for your consideration of the above-noted comments. If you have any further
questions, please contact me at 416-369-6937.

Yours sincerely,


Armand Capisciolto, CPA, CA
CPA (Michigan)
National Accounting Standards Partner
BDO Canada LLP
Ministry of Finance
Office of the Budget and Treaslll y Boanf
Office of the Provincial Controller Division
Frost Building South, 2"
1
Floor
7 Queen's Park Crescent
Toronto ON M7A 1Y7
Tel . (416) 325-8017
Fax. (416) 325-2029
May 17,2013
Mr. Tim Beauchamp
Ministere des Finances
Bureau du budget et du Consell du
Bureau du contr1\leur provincial
Edllice Frost Sud, 2"
7 Queen's Park Cr.
Toronto ON M7A tY7
(4f6) 325 80t7
(416) 325 2029
Director Public Sector Accounting
Canadian Institute of Chartered Accountants
277 Wellington Street West
Toronto ON M5V 3H2
Dear Mr. Beauchamp:

t >
1/r Ontario
RE: Comments on PSAB's Draft Strategic Plan for 2013-2016
Thank you for the opportunity to comment on the Public Sector Accounting Board's
PSAB's Draft 2013-2016 Strategic Plan. We are pleased to provide our feedback
for consideration by PSAB and the Accounting Standards Oversight Council
(AcSOC).
General Comments
We acknowledge PSAB's efforts over the past few years in addressing a number of
key accounting issues facing Canada's public sector. In particular, we appreciate
PSAB's efforts to achieve greater consistency in accounting standards for various
types of public sector entities, thus facilitating consistent accounting for similar
transactions. We also acknowledge PSAB's responsiveness to government's
concerns on the new government transfers and financial instruments standards.
While we appreciate PSAB's use of plain language throughout the Invitation to
Comment (lTC), we suggest that PSAB could enhance the consistency of
understanding and clarify its intent with regards to its Mission Statement (as
referenced in the lTC} by using wording that is consistent with the Mission
Statement reflected in PSAB's approved Terms of Reference. The latter more
clearly reflects an emphasis on users, decision-making, and accountability which
are important from Ontario's perspective. Similarly, for the sake of consistency, we
also recommend that PSAB link decision-making and accountability to its objective
of developing 'high quality' standards referenced in paragraph 40.
-. ./2
Mr. Beauchamp
Page2
Ontario supports PSAB's plan to undertake a comprehensive review of the financial
reporting environment at the conclusion of the proposed 2013-2016 plan.
Comments for PSAB's consideration regarding the scope of such a review are
provided in the appendix to this letter.
Standard Setting in the Public Sector in Canada
PSAB describes the use of financial statements as providing information needed by
users to help assess and judge a public sector entity's financial operations and
management. We believe that this description should emphasize the impact that
accounting standards can have on decisions under legislated balanced budget
frameworks, particularly in Canada where legislated fiscal policy frameworks and
accounting frameworks are closely aligned. We recommend that PSAB consider its
messaging in this introduction as its context may significantly influence the direction
and acceptability of future standards. Further, we encourage PSAB to ensure
consistent language in its Terms of Reference, Statement of Operations, Due
Process Procedures, Strategic Plan and Conceptual Framework due process
exposures to ensure consist and clear messaging of PSAB's intent.
2013-2016 Strategies: Finalize the Conceptual Framework
We agree that the conceptual framework is a key priority over the next few years
and Ontario will continue to provide input to PSAB's current conceptual framework
project to ensure that public sector accounting standards continue to serve the
public interest. Our focus as a senior government is to ensure that the Province's
financial reports provide clear and understandable information to users reflecting
the economic substance of the government's activities and which support sound
fiscal policy decision-making. In this regard we note the absence of reference to
users, decision-making usefulness and accountability within the context of PSAB's
Mission Statement or Objectives as stated in the lTC.
2013-2016 Strategies: Improve Consultation with and Information for Stakeholders
We support PSAB's objective of having stakeholders who are engaged in the
development of PSAB standards. The success of PSAB is largely dependent upon
how well it can engage and consult with stakeholders and help senior governments
meet their accountability objectives, while recognizing the importance of developing
standards that support sound decision-making as well. We recommend the Board
and AcSOC consider opening PSAB's meetings to public observations as well as
making publicly available copies of staff submissions (data sheets) and meeting
.. ./3
Mr. Beauchamp
Page 3
minutes. Such practices, considered the benchmark for organizational
transparency and accountability, have been successfully adopted by other
international and national standard setters without diminishing their independence
as standard setters.
2013-2016 Strategies: Engage in and Influence Standards Development by the
IPSASB
Earlier we recommended that PSAB ensure that consistent language be used
throughout its documents including the Draft Strategic Plan and the approved
Terms of Reference. The Draft Strategic Plan states that PSAB does not have a
convergence strategy to move to International Public Sector Accounting Standards
and that PSAB will continue to set national public sector standards for the
Canadian public sector. Ontario supports this strategy as stated. We noted that in
contrast, PSAB's Terms of Reference states as one of its objectives: "[to]
participate with other standard setters in the development of a single set of high
quality internationally accepted public sector financial reporting standards." It is
possible that a reader could interpret this objective as stated in the Terms of
Reference as a strategy for convergence with internationally accepted public sector
financial reporting standards. We suggest that the Terms of Reference be
amended to reflect the strategy and objectives as outlined in the Draft Strategic
Plan.
PSAB's Draft Plan states that international accounting standards have helped to
facilitate the global flow of invested capital and that government should also report
on a consistent and comparable basis as they command a large portion of the bond
market. Ontario disagrees that such advantages as provided to the private sector
by worldwide reporting using comparable standards automatically translates into a
comparable benefit to the public sector. While governments do command a large
share of the bond market, sovereign debt is primarily assessed through its credit-
rating. The rating agencies that provide these ratings are very familiar with the
specific government's budget and financial statements and make their assessment
as well as derive the ensuing ratings on a combination of cash flows (which are
relatively consistent regardless of the basis of accounting) and net debt positions
{both current and forecast). In order to maintain generally accepted accounting
standards in Canada's public sector, it remains important that standards reflect the
realities of the Canadian environment and result in clear and understandable
information to users which supports transparency and accountability in reporting,
and sound fiscal policy decisions.
. . ./4
Mr. Beauchamp
Page 4
Further to the above comments and in the spirit of transparency, Ontario expects
PSAB to dialogue with the senior government community regarding any alterative
directions being considered for the longer-term (i.e. convergence to IPSASB).
Given the Canadian context of aligned fiscal accountability and financial reporting
frameworks, serious implications and reactions associated with any convergence
activity will need to be fully explored by PSAB and senior Canadian governments.
Please see the attached appendix for additional comments related to specific
paragraphs of the Draft Strategic Plan.
Thank you again for the opportunity to comment on PSAB's Draft Strategic Plan for
2013-2016.
Sincerely,
Murray Lindo
ADM and Provincial Controller
Office of the Provincial Controller Division
Enclosure
c. Kevin Nye, Chair, Accounting Standards Oversight Council
Rod Monette, Chair, Public Sector Accounting Board
Greg Orencsak, Associate Deputy Minister
Attachment
Appendix
Scope of the Comprehensive Review of the Financial Reporting Environment
Over the next three years we encourage PSAB to review its standard setting process
to identify areas for improved efficiency and effectiveness, particularly with respect to
the government transfers and financial instruments standards to identify lessons
learned and areas for improvement.
As noted in our response, quality accounting standards should support accountability
and sound fiscal policy decisions. Given the impact that PSAB's standards can have
upon fiscal policy decisions under Balanced Budget legislation, it is important that
mechanisms be in place to resolve interpretative issues on a timely basis.
In regards to the government transfers standard in particular, we would have liked for
PSAB to reconsider deferring the effective date of the standard in light of the
outstanding concerns being faced by some governments. It is our understanding that
the new standard, effective 2012-13, is being interpreted differently by auditors and
preparers. As part of the conceptual framework project the Task Force has
introduced the concept of deferred debits and credits which might alleviate and
negate such differences of opinion. In an environment where transparency and
accountability in financial reporting are key reporting objectives, and where
government fiscal policy decisions can be impacted by such differences in opinion, it
is important for PSAB to be proactive in addressing such issues.
While PSAB acknowledges the need to consider implementation issues resulting
from standards, we would suggest a need to broaden its focus beyond the suggested
timing-related considerations. In particular, PSAB should also acknowledge other
factors including:
- appropriation related considerations as were required in conjunction with the
implementation of PSAB's new tax revenue standard and which will be required
as part of the new environmental contamination standard;
potentially significant changes in the annual surplus/deficit results under
Balanced Budget legislation which may impact government fiscal policy decisions
(e.g. reporting of unrealized gains/losses on financial instruments where standard
excludes hedge accounting);
impact on ministry oversight and resource allocation decisions for public sector
entities; and,
ability to provide adequate communications and training to public sector entities
and to minimize the potential cost impact of changes on entities and
ratepayers/taxpayers (e.g. impact of rate regulated accounting under IFRS).
r-\Hydro

Montral, le 14 mai 2013
Monsieur Tim Beauchamp
Directeur
Comptabilit du secteur public
277, rue Wellington Ouest
Toronto(Ontario) MSV 3H2
Hydre-Qubec
s tage '
75, boulevard Ren Lvesque ouest
Montral (Qubec)
H2Z 1A4
Tl. : (514) 289-2211-4180
Tlc. : (514) 289-4702
Croteau.lise@hydro.qc.ca
Objet : Appel commentaires sur le Projet de plan stratgique 2013 2016 du Conseil sur la
comptabilit dans le secteur public (CCSP)
Monsieur,
Nous vous faisons parvenir cette lettre dans le cadre de l'appel commentaires publi par le
Conseil sur la comptabilit dans le secteur public qui vise connatre le point de vue des parties
prenantt;s canadiennes sur son projet de plan stratgique pour la priode 2013 2016.
Nous sommes d'avis que le plan stratgique propos est pertinent et adquat. Toutefois, nous
profitons de l'occasion pour ritrer la proposition que nous avons faite l'expos-sondage
intitul Modification de la Prface d'exclure de la dfinition d' organisme sans but lucratif du
secteur public un organisme qui est sous le contrle d'une entreprise publique. Cette exclusion
permettrait aux deux entits d'utiliser le mme rfrentiel comptable soit la Partie 1 du Manuel de
1 'ICCA - Comptabilit. Nous croyons que cette modification irait dans le mme sens que votre
objectif de limiter le nombre de rfrentiels utiliss devant permettre notamment de restreindre le
nombre d'ajustements de consolidation apporter.
Veuillez agrer, Monsieur, l'expression de nos salutations distingues.

Lise Croteau, FCPA, FCA
Vice-prsidente - Comptabilit et contrle
Hydro-Qubec





Aile St-Amable, 1
er
tage
1058, rue Louis-Alexandre-
Taschereau
Qubec (Qubec) G1R 5T2
Tlphone : 418 643-7677
Tlcopieur : 418 644-2135




2



Le 17 mai 2013




Monsieur Tim Beauchamp
Directeur
Comptabilit du secteur public
Comptables Professionnels Agrs
277, rue Wellington Ouest
Toronto (Ontario) M5V 3H2


OBJET : Projet de plan stratgique 2013 2016



Monsieur,

Le plan stratgique du Conseil sur la comptabilit dans le secteur public (CCSP)
2013-2016 dcrit les grands objectifs que souhaite atteindre le CCSP au cours de
la priode de 2013 2016 ainsi que les diffrentes stratgies adopter pour
parvenir ces objectifs. Il a donc une influence directe sur les projets qui seront
entrepris au cours de ces trois annes.

Nous appuyons le CCSP dans ses dmarches de consulter les parties prenantes
afin de connatre leurs points de vue et suggestions relativement au plan
stratgique du CCSP pour la priode de 2013 2016. Ainsi, nous souhaitons vous
faire part de nos commentaires sur diffrents lments du plan stratgique.

Dentre de jeu, nous souhaitons appuyer la stratgie propose afin que le CCSP
sassure de pouvoir obtenir les points de vue des diffrentes parties prenantes
par leur rle actif dans llaboration des normes, et ce, afin de sassurer de la
prise en compte de leurs considrations. Nous sommes heureux de constater que
le CCSP prcise particulirement que Comme il sagit de parties prenantes
importantes, il est essentiel que le CCSP demeure lcoute des gouvernements
et entretienne de bonnes relations avec eux. Nous tenons galement soutenir
linitiative du CCSP de prparer une analyse des effets lors de la publication
dune nouvelle norme ainsi que des indications de mise en uvre de celle-ci.



-2-
3

De faon gnrale, nous sommes en accord avec le plan stratgique propos,
lexception des travaux portant sur la viabilit long terme des finances
publiques. Les ressources du CCSP tant limites, nous sommes davis que celui-
ci ne devrait pas traiter de cet lment notamment car llaboration du nouveau
cadre conceptuel ainsi que plusieurs normes importantes (apparents,
restructurations entre apparents, actifs, etc.) ne sont pas encore finalises.

Pas seulement les tats financiers

Nous sommes en dsaccord avec ltablissement ventuel dun cadre pour la
prparation dinformation sur la viabilit long terme des finances publiques, tel
quindiqu au paragraphe 14.

Nous croyons quil revient aux gouvernements de dcider de la nature de
linformation divulguer en ce qui concerne leur prennit fiscale. En effet, les
gouvernements sont aptes publier cette information, comme ils le font
actuellement. De plus, de par leur pouvoir de taxation et leur pouvoir
discrtionnaire quant la modification de ltendue ou de la qualit de leurs
programmes, ou quant la mise en uvre de ceux-ci, linformation publie
lgard de la prennit fiscale des gouvernements peut ne pas tre le reflet de
lavenir.

La prparation de cette information fait intervenir plusieurs hypothses
concernant des vnements futurs, champ dexpertise hors du domaine
comptable. Ainsi, des carts entre les projections et les faits sont susceptibles de
se produire, ce qui pourrait avoir pour consquence daltrer la confiance des
utilisateurs et de miner la crdibilit des rapports. De plus, comme les
ressources du CCSP sont limites, elles devraient tre utilises des mandats
prioritaires comme le cadre conceptuel et llaboration de normes importantes.

Stratgies pour la priode de 2013 2016

Comme mentionn prcdemment, nous sommes en dsaccord avec lobjectif du
CCSP dinclure les informations non financires dans ses rsultats viss prsent
au paragraphe 40 b).

Nous sommes davis que les objectifs poursuivis devraient tre limits
linformation de nature financire contenue dans les tats financiers. Les normes
comptables font autorit en matire de comptabilit et de prsentation
dinformation financire dans les tats financiers. Dans ce contexte et compte
tenu des ressources limites disponibles, le CCSP devrait centrer ses efforts sur
ce domaine.


-3-









Objectif atteindre

Avoir des parties prenantes bien informes qui connaissent et acceptent la
procdure officielle relative llaboration des normes

Nous sommes en dsaccord avec le paragraphe 59. Nous ne croyons pas que
lanalyse des effets et les indications de mise en uvre devraient tre rdiges
pour les parties prenantes qui sont peu au fait des valuations fondes sur la
comptabilit dexercice. Nous sommes davis que ces documents sont pertinents
pour lensemble des parties prenantes, particulirement pour les prparateurs et
les auditeurs.

Esprant que ces commentaires vous seront utiles, veuillez agrer, Monsieur, nos
salutations distingues.



La directrice de la normalisation,


Vicky Lizotte, CPA, CA