Board of Directors


Jim Goetz

Chairman
Canadian Beverage Association

Neil Antymis

Treasurer
Canadian Beverage Association

Cheryl McLaughlin

Cott Beverages

Sylvain Mayrand

A. Lassonde Inc.

George Groumoutis

Sky Blue Water, Inc.

Victor Vrsnik

7-Eleven

Staff


From left to right: Riley Martin (Communications Coordinator), Ken Friesen (Executive Director), Ben Shantz (Administrative and Follow-Up Coordinator), Melissa Dorota (Senior Outreach Coordinator), Christa Rust (Program Manager), Justine Spearman (Data and Outreach Coordinator), Georgia Exell (Street Team Lead), Jaclyn Diduck (Senior Logistics and Schools Coordinator), Arielle Gurevich (Communications Manager), Kayla Orten-Lederhouse (Outreach Coordinator)

Five additional Reclay StewardEdge staff in the Toronto office provide analytical and accounting expertise and additional support as required.

Independent Auditor’s Report

To the members of Canadian Beverage Container Recycling Association

We have audited the accompanying financial statements of Canadian Beverage Container Recycling Association which comprise the statement of financial position as at December 31, 2017 and the statements of operations, changes in net assets and cash flows for the year then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these 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.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Canadian Beverage Container Recycling Association as at December 31, 2017 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.

Emphasis of matter

Without qualifying our opinion, we draw attention to note 2 of the financial statements which describes the restatement of comparative amounts in correction of a prior period error.

Statement of Financial Position

As at December 31, 2017

2017

2016

Assets

Restated (note 2)

Current Assets

Cash $3,674,864 $1,783,128
Accounts Recievable 703,006 1,025,712
Prepaid expenses 24,579 33,859
Inventory 298,667 473,184
4,701,116 3,315,883
Capital assets – net of accumulated amortization of $103,812 (2016- $74,609) 41,877 69,811

4,742,993

3,385,694

LIABILITIES AND FUND BALANCES

Current liabilities

Accounts payable and accrued liabilities (note 4) 1,764,975 1,811,571
 

Net Assets

Invested in capital assets 41,877 69,811
Unrestricted 2,936,141 1,504,312
2,978,018 1,574,123

4,742,993

3,385,694

Commitments (note 6)
Approved by the
Board of Directors


Jim Goetz
Chairman

Neil Anytmiss
Director

Statement of Operations

For the year ended December 31, 2017

2017

2016

Restated (note 2)

Revenue

Container Recycling Fees

$9,286,264

$9,059,154

Program Expenses

Multi Material Stewardship Manitoba 1,391,281 1,163,664
Awareness Campaign 2,680,042 2,043,377
Program Management Services 1,016,616 1,021,461
Municipal Public Spaces Program 685,469 1,143,897
Events Recycling Program 272,973 246,790
Industrial, Commercial and Institutional Program 794,920 1,404,280
Post-secondary Program 113,719 42,077
Government Buildings Program 292,539 231,047
Waste Audit 159,843 218,440
RE101 Schools 127,633 423,114
7,535,035 7,938,147

Operating Expenses

Administrative Expenses (Schedule) 288,474 263,673
Stewards Services 58,860 58,860
Bad debt expense recovery - -
347,334 322,533

Net Assets

7,882,369

8,260,680

Excess of revenue over expenses 1,403,895 798,474

Statement of Changes in Net Assets

For the year ended December 31, 2017

2017

2016

Invested in capital assets

Unrestricted

Total

Total

Restated (note 2)

Balance - Beginning of year

$69,811 $1,504,312 $1,574,123 $775,649
Excess of revenue over expenses - 1,403,895 1,403,895 798,474
Purchase of capital assets 1,269 (1,269) - -
Amortization of capital assets (29,203) 29,203 - -

Balance - End of year

41,877 2,936,141 2,978,018 1,574,123

Statement of Cash Flows

For the year ended December 31, 2017

2017

2016

Restated (note 2)

Cash provided by (used in)

Operating activities

Excess of revenue over expenses $1,403,895 $798,474
Item not affecting cash
Amortization of capital assets 29,203 18,460
1,433,098 816,934
Changes in non-cash working capital items
Accounts receivable 322,706 41,501
Prepaid expenses 9,280 (8,227)
Inventory 174,517 206,405
Accounts payable and accrued liabilities (46,596) (547,587)
1,893,005 509,026

Investing activities

Purchase of capital assets (1,269) (59,805)

Increase in cash during the year

1,891,736 449,221

Cash - Beginning of year

1,783,128 1,333,907

Cash - End of year

3,674,864 1,783,128

Notes to the Financial Statements

December 31, 2017

1. Incorporation and purpose of the organization

The Canadian Beverage Container Recycling Association (CBCRA) is a not-for-profit organization that was established by beverage companies to improve beverage container recycling rates in Manitoba. CBCRA’s purpose is to promote and facilitate the recycling of end-of-life beverage containers through the design and funding of recycling programs and public promotion and education.


CBCRA was incorporated without share capital on March 26, 2010 under Part II of the Canada Corporations Act and commenced operations on April 1, 2010. CBCRA’s objective is to carry on its operations without pecuniary gain to its members and any profits or other accretions to CBCRA are to be used in promoting its objects.


For income tax purposes, CBCRA qualifies as a not-for-profit organization which is exempt from income tax under Section 149(1)(l) of the Income Tax Act.

2. Restatement of prior period balances

The prior year comparative balances have been restated to correct for an isolated error. CBCRA management discovered that vendors should have been charging CBCRA retail sales tax (RST) on the purchase of recycling bins and other promotional materials even though CBCRA is a not-for-profit agency. CBCRA submitted a voluntary self-disclosure to the Manitoba Finance Taxation Department who confirmed that CBCRA is in fact a purchaser as defined in The Retail Sales Tax Act, thereby subject to RST. The Manitoba Finance Taxation Department determined based on the voluntary self-disclosure that the total exposure related to RST amounted to $1,196,282, and this has been fully accrued for by the CBCRA as at December 31, 2017. The calculation is based on inventory purchases and promotional materials since its incorporation.


The comparatives for the year ended December 31, 2016 have been retrospectively restated to correct the error and the financial statement line items have been increased/(decreased) by the following amounts:

Restatement of Prior Period Balances

As previously reported

Adjustment

As restated

Net assets as at January 1, 2016

Opening balance $1,597,133 $(849,951) $747,182

Statement of Financial Position as at December 31, 2016

Accounts payable and accrued liabilities 724,188 1,087,383 1,811,571
Net assets - unrestricted 2,591,694 (237,432) 1,504,312

Statement of Operations for the year ended December 31, 2016

Program expenses
Awareness campaign 2,034,437 8,940 2,043,377
Program management services 1,016,616 4,845 1,021,461
Municipal Public Spaces Program 1,068,225 75,672 1,143,897
Industrial, Commercial and Institutional Program 1,333,423 70,857 1,404,280
Government Buildings Program 230,810 237 231,047
RE101 Schools 390,815 32,299 423,114
Operating expenses
Administrative expenses 219,091 44,582 263,673

Statement of Cash Flows for the year ended December 31, 2016

Excess of revenues over expenses 1,035,906 (237,432) 798,474
Changes in non-cash working capital items
Accounts payable and accrued liabilities (785,019) 237,432 (547,587)

Notes to the Financial Statements

December 31, 2017

3. Summary of significant accounting policies

Revenue recognition

CBCRA follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred.


Container recycling fees are recognized as unrestricted income in the month in which they are earned, if the amount to be received can be reasonably estimated and collection is reasonably assured.

Cash

Cash consists of cash on hand and cash held at banking institutions.

Inventory

Inventory is recorded at landed cost and consists of recycling bins and carts being held for future use in CBCRA programs.

Capital assets and amortization

Capital assets are recorded at original cost less accumulated amortization.


Amortization of furniture and equipment is recorded on a declining balance basis of 20% over the assets’ useful lives. Amortization of computers and computer software is recorded on a declining balance basis of 33% over the assets’ useful lives.

Use of estimates

The preparation of financial statements in conformity 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates.

Financial instruments

a) Measurement of financial instruments

CBCRA initially measures its financial assets and financial liabilities at fair value adjusted by, in the case of a financial instrument that will not be measured subsequently at fair value, the amount of transaction costs directly attributable to the instrument.


CBCRA subsequently measures all its financial assets and financial liabilities at amortized cost, except for investments in equity instruments, which are subsequently measured at fair value. Changes in fair value are recognized in the statement of operations.


Financial assets measured at amortized cost include cash and accounts receivable.


Financial liabilities measured at amortized cost include accounts payable and accrued liabilities.

b) Impairment

Financial assets measured at amortized cost are tested for impairment when there are indicators of possible impairment. When a significant adverse change has occurred during the period in the expected timing or amount of future cash flows from the financial asset or group of assets, a writedown is recognized in the statement of operations. When events occurring after the impairment confirm that a reversal is necessary, the reversal is recognized in the statement of operations up to the amount of the previously recognized impairment.

4. Government remittances

Government remittances consist of amounts required to be paid to government authorities and are recognized when the amounts become due. In respect of government remittances, $1,196,282 (2016 - $1,087,383) is included within accounts payable and accrued liabilities.

5. Financial instruments

CBCRA manages risk and risk exposures by applying policies approved by the Board of Directors. The significant financial risks to which CBCRA is exposed are credit risk and liquidity risk.

a) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.


CBCRA’s financial instruments that are exposed to concentration of credit risk consist primarily of cash and accounts receivables. Cash, at times, may exceed amounts insured by the Canadian Deposit Insurance.

Corporation or the Credit Union Deposit Guarantee Corporation. CBCRA has a large number of members, which minimizes the concentration of credit risk on accounts receivables.

b) Liquidity risk

Liquidity risk is the risk that CBCRA will encounter difficulty in meeting obligations associated with financial liabilities.


CBCRA has established budgetary and cash forecasts to ensure it has the funds necessary for fulfilling its obligations.

6. Commitments

a) CBCRA has an operating lease for premises requiring approximate annual rental payments as follows:


2018 $45,182

b) A program management services agreement is in place with Reclay StewardEdge Inc. to provide various management, administrative and communication tasks to CBCRA until December 2017 at a monthly amount of $89,623 (2016 - $88,676).


During 2017, payments under this commitment totalled $1,075,476 (2016 - $1,080,321) and are included in program management services and steward services.

Schedule of Administrative Expenses

For the year ended December 31, 2017

2017

2016

Restated (note 2)
Amortization $29,203 $18,460
Audit, legal and professional fees 22,160 26,929
Board expenses 11,291 15,351
Bank charges 1,844 2,329
Consulting 9,893 1,040
Dues and memberships 5,046 3,836
Insurance 8,321 6,588
Interest and other charges 62,243 45,295
Office supplies 13,780 15,015
Postage and courier 9,367 6,027
Rent 100,839 105,857
Telephone 14,487 16,946

288,474

263,673