Notes to Financial Statements

December 31, 2014

(in thousands of dollars)



1 Ontario College of Teachers’ mandate

The Ontario College of Teachers (the College) was established by an Act of the Ontario Legislature proclaimed on July 5, 1996.

The College is an independent, self-regulating professional body with authority to license and regulate the practice of teaching in Ontario.

The affairs of the College are administered by a Council comprised of 37 members of whom 23 are elected by the membership and 14 are appointed by the Lieutenant-Governor-in-Council.

As a not-for-profit professional membership organization, the College is not liable for income taxes.



2 Summary of significant accounting policies

The financial statements of the College have been prepared in accordance with Accounting Standards for Not- for-Profit Organizations (ASNPO). The significant accounting policies followed by the College are outlined below:

Revenue recognition

The College follows the deferral method of accounting for revenues.

Membership fees received are deferred and recognized as revenue in the year to which the fee relates.

All other unrestricted revenues are recognized as revenue when received or receivable, if the amounts to be received can be reasonably estimated and collection is reasonably assured.


Investments include cash and short-term, highly liquid investments that are held for investment purposes rather than to meet short-term cash commitments.

Capital assets are recorded at cost and are amortized on a straight-line basis over their estimated useful lives, as follows:


10 years


3, 4, and 10 years

Computer equipment

4 years

Software 3 years

Building improvements

15 years


30 years

During the year, the College re-evaluated the useful lives of its capital assets. Based on historical patterns, it was decided to extend the life of desktop and laptop computers from 3 years to 4 years and it was decided to reduce the expected life of some non-computer equipment from 10 years to 4 years. This change in estimate was applied prospectively and resulted in a net increase in amortization expense of $391 for 2014.

Financial instruments

Financial liabilities are initially recognized at fair value less any financing fees or transaction costs. The financial liabilities are subsequently measured at amortized cost.

Financial assets are initially recognized at fair value plus any financing fees or transaction costs. Investments are recorded at amortized cost and include accrued interest.

Financial assets are assessed for impairment on an annual basis at the end of the fiscal year if there are indicators of impairment. If there is an indicator of impairment, the College determines if there is a significant adverse change in the expected amount or timing of future cash flows from the financial asset.  If there is a significant adverse change in the expected cash flows, the carrying value of the financial asset is reduced to the highest of the present value of the expected cash flows, the amount that could be realized from selling the financial asset or the amount the College expects to realize by exercising its right to any collateral. If events and circumstances reverse in a future period, an impairment loss will be reversed to the extent of the improvement, not exceeding the initial carrying value.  Impairments are recognized through the use of an allowance account, with a corresponding charge in the statement of operations and member’s equity.

It is management’s opinion that the College is not exposed to significant interest, currency or credit risk arising from components of these financial statements.

Use of estimates

The preparation of financial statements in conformity with ASNPO requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.



3 Capital Assets

      2014 2013
  Cost Accumulated amortization Net Net
  $ $ $ $
Furniture 5,399 3,981 1,418 1,371
Equipment 3,930 2,301 1,629 1,389
Computer equipment 1,474 1,118 356 890


110 69 41
Building improvements 14,377 3,836 10,541 11,500
Building (note 5) 12,834 1,925 10,909 11,337
Land (note 5) 7,660 7,660 7,660
  45,784 13,230 32,554 34,147



4 Accounts payable and accrued liabilities

Included in accounts payable and accrued liabilities are government remittances owing of $163 (2013 - $129).



5 Mortgage payable

On June 23, 2010, the College purchased eight floors of a 15-floor commercial condominium building at 101 Bloor Street West. The vendor retained the bottom six floors, including the valuable ground floor retail space. Total cost of the property purchased was $20.5 million, which was recorded in capital assets.

The College received a $14.12 million mortgage from its bank to finance the purchase. The mortgage is amortized over 30 years and is secured by the property. Held as collateral for the mortgage are the property, a chattel mortgage and a general assignment of rents and leases.

The College also received a $6.14 million construction mortgage from its bank to finance the building improvements. This mortgage bears the same terms as those of the building acquisition mortgage.

  2014 2013
  $ $
Bank of Montreal, 5.77% payable in monthly instalments of principal and interest of $93, maturing June 30, 2020 13,329 13,660
Bank of Montreal, 5.77% payable in monthly instalments of principal and interest of $40, maturing June 30, 2020 5,796 5,940
  19,125 19,600
Less: Current portion 503 475
  18,622 19,125


Principal payments are due as follows:

2015 503
2016 533
2017 564
2018 598
2019 633
Thereafter 16,294

Interest expense of $1,118 (2013 - $1,144) relating to the mortgage is included in operating support in the statements of operations.




6 Investments

  2014 2013
$ $
Bank of Montreal cashable 1.25% GIC, maturing March 6, 2015 1,010
Bank of Montreal High Interest Savings Account, variable rate 3,717 3,670
  4,727 3,670

Included in the investment balance is $10 (2013 - $nil) of accrued interest.



7 Commitments

The College has entered into various operating lease commitments for office equipment. The estimated annual payments for these operating lease commitments are as follows:

2015 65
2016 65
2017 63
2018 57




8 Contingencies

a) In 2013, a claim of $270 was made against the College relating to disagreements in the scope and nature of certain restoration work performed by the College at its previous office space. The College believes that it performed all restoration work according to accepted standards and is disputing the claim.

b) The College is involved in claims that arise from time to time in the normal course of operations. Other than as noted above, management is unaware of any matters that will have a material adverse effect on the financial position of the College or its results of operations. No amount has been provided in the financial statements in respect of these claims. Consistent with the above-noted claim, gains or losses, if any, sustained upon the ultimate resolution of these claims will be accounted for prospectively in the period of settlement in the statements of operations and members’ equity.



9 Pension plans

Employees who are certified teachers are required to participate in the Ontario Teachers’ Pension Plan (OTPP), a defined benefit pension plan. All but four non-teacher employees are members of the Ontario Municipal Employees Retirement System (OMERS), a defined benefit pension plan with similar characteristics to the OTPP. Both OTPP and OMERS are multi-employer pension plans. The College matches the contributions made by the employees. Contributions are based on a statement from the respective plan for each fiscal year.  

The College’s total annual pension expense for the two plans was $1,473 (2013 - $1,460), which is included in the employee compensation expense in the statement of operations.



10 Credit facility

The College has an unsecured operating line of credit of $5,000, which bears interest at the bank prime plus 0.5%. As at December 31, 2014 (2013 - $nil), no amounts had been drawn against this facility.



11 Liquidity risk

Liquidity risk is the risk the College will not be able to meet its financial obligations when they come due. The College manages its liquidity risk by forecasting cash flows from operations and maintaining a credit facility to ensure it has sufficient available funds to meet current and foreseeable financial requirements. The College has sufficient funds to meet its current obligations.



12 Other items

During 2014 the College successfully concluded a long standing dispute with CRA resulting in the refund of $1,765, net of related expenses, of GST and HST.  These amounts were received and recorded before year-end.

The College was also favourably reassessed for property tax of $1,212, net of related expenses.  This amount was not received prior to year-end and is recorded as an account receivable.


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