THE FEDERAL BRIDGE CORPORATION LIMITED

ANNUAL REPORT BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 2014-15 BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 2 The FederalBridgeCorporationLimited

Inside frontCoverPhoto: Front CoverPhoto: 6. 5. 4. 3. 2. 1. CONTENTS

APPENDIX APPENDIX CONSOLIDATED STATEMENTS FINANCIAL MANAGEMENT DISCUSSION ANDANALYSIS PERFORMANCE ASSESSMENT DELIVER ONTODAY’S ANDPRIORITIES PLANS GOVERNANCE CORPORATE PROFILE MESSAGE MESSAGE

Seaway internationalBridgeinCornwall, Ontario. Sault Ste.MarieInternationalBridge (toplefttoright)andNorthChannelBridgeatthe Arch superstructureattheoldNorth ChannelBridgeinCornw Blue W FROM THECHAIRPERSON FROM THEPRESIDENT AND CHIEFEXECUTIVE OFFICER B –LIST OFABBREVIATIONS A –BOARD OF DIRECTORS ater Bridge at Point Edward, Thousand Islands Bridge, ater BridgeatPointEdward, ThousandIslandsBridge, ......

all ...... 80 22 28 35 78 10 12 4 6 7 BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 3 2014-15 Annual Report Annual 2014-15 NOTE TO THE READER TO NOTE

Please note that the FBCL 2014-15 Annual Report that the FBCL 2014-15 Annual note Please the reports represents of legacy Federal The River its wholly-owned (FBCL) including Limited subsidiaries St. Mary’s Bridge Corporation (SIBC) Ltd. from (SMRBC) Bridge Corporation, International Bridge Company Seaway and The Bridge Authority April January 1, 2014 to information for the legacy 31, 2015. The Blue Water September January from to report2014 1, (BWBA)dates This 2015. 31, includes also (FBCL) Limited Corporation Bridge entitynew the Federal from information The as known also legacy the amalgamation of formed by FBCL with legacy BWBA,which was legacy SMRBC 31, 2015. March 1, 2015 to subsidiaryand its remaining February from SIBC, BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES and to ensure ongoingcross-border andsafety. fluidity business model in placeatSaultSte. Lansdowne Marie, andCornwall tolling atalllocations;and, partnership iii)expandourexisting bridge initiatives of border suchas the modernization facilities and automated ii)buildon underourauthority; bridges ofinternational portfolio across bestpractices the implement consistent policiesandindustry These changeswillallow corporate us, amongstotherobjectives, to: i) FBCL. seven-year withthelegacy journey remarkable I amconfidentthatthechallengesaheadwillonlyadd to my vote ofconfidence corporation to leadthisnew for thenext four years. As President andCEO, Iampleased to have received thegovernment’s of to (JCCBI) theMinister Incorporated Transport intheprevious year. FBCL’slegacy shares of andChamplainBridges The Cartier Jacques Additionally,and Michigan. thischangeincludedthedivestiture of Cornwall theProvince between andtheStates ofNew ofOntario York located inSaultSte.bridges Point Marie, Edward, Lansdowne and underoneportfolio,brings theCanadian interest ininternational willbepursuedatalater date. (SIBC) Corporation This effectively (BWBA). Bridge The amalgamationoftheSeaway International parent Crown andtheBlue Corporation Water Authority Bridge another Company Bridge River (SMRBC), subsidiaries, theSt.Mary’s withoneofits FBCLcorporation the amalgamationoflegacy redefined entity. FBCLcorporate wascreated entity This new through legislation for provided theestablishmentofanew theauthority A COMPLETERENEWAL exciting foundation for thefuture. renewal, impressive accomplishmentsandtheestablishment ofan wasdefined by acomplete corporate LimitedCorporation (FBCL).It The 2014-15fiscal year wasamonumental year for The Federal Bridge 4 Micheline Dubé Micheline MESSAGE FROM THEPRESIDENT AND CHIEFEXECUTIVE OFFICER –OnFebruaryfederal 1,2015,new The FederalBridgeCorporationLimited as well as adjusted all legacy corporations’as well asadjusted alllegacy financialinformation to have to March corporations 31st realigned ofthelegacy theyear-ends to additionto efforts thecollective realize In theamalgamation, we inJuly2014to bidfarewell.one lasttimeonthebridge finaltribute gathered structure,to thishistorical thecommunity In and theprojectisprogressing rapidly. isnow being dismantled ChannelBridge structure oftheoldNorth However, theprojectisnotyet completed. The large high-level super Project. Replacement ChannelBridge oftheNorth 2014, aspart Cornwall,In we crossing successfullyopenedthenew inJanuary initiated. andautomation pilot projectswereinfrastructure modernization andtoll rehabilitation oftheCBSALansdowne PortofEntry Further east,atthe Thousand IslandsBridge, Lansdowne, a for onborder itsimpact efficiency. and automation hasbeeninstalledandresults pilotproject assessed completion. Throughout 2014-15,atoll infrastructuremodernization Edward was theasphaltreplacement project which isnearing project initiatedbrokerages andlogisticskey in2015 firms. A Point Blue Water operations;alongwithcommercial Bridge custom (CBSA), Agency The Canadian Food (CFIA) andthe Agency Inspection offices houses corporate facility forthe Border Canadian Services by the Canada Green Building certification Council. The ultra-modern LEED (Leadership inEnergy andEnvironmental Design) Silver Last December, theBlue Water officecomplex,was awarded Bridge of theprojectisnow well underway. maintenance garagewascompleted andfunctional. The finalphase Project, Free Duty thenew shopbecameoperationalandthe oftheCanadian Plaza Redevelopment SaultSte. aspart In Marie proactive andassociated maintenance structures. ofthebridges exchange effective operationsas andcurrency well as toll collection respective mandates allowing for essentialtrafficmanagement, locationhave bridge consistently delivered Our teams atevery intheir U.S. in commercial in Canada’s trafficindicatinga recovery tothe exports to thedownward inthe Canadian dollaranda3%increase fluctuation by linked characterized adecreaseprimarily of2%inpassengertraffic This represents a1%decrease over year. theprior This is traffic profile 11.7M vehicles to thefour withintheportfolio. bridges international FBCL,we andthencombinedunderthenew welcomed corporations asseparate 1,2014,collectively legacy April thepastyear starting In hasdeliveredCorporation strongly ineachoftheseareas. operations.finance thebridge Iamproud to announcethatthe thepublicinterest andrevenue purpose, serving generationto neighbour andtradingpartner. exercising In thisrole, FBCLhasadual Canada’s to ourlargest andeconomicnetworks transportation and the United States. These structures play a vital role in connecting Canada between andtourism isto enabletrade,bridges partnership ACCOMPLISHMENTS TO DATE –The role ofourinternational key BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES

1 5 Canada Green Building Council 2014-15 Annual Report Annual 2014-15 (Leadership in Energy and Environmental Design) Silver certification by the(Leadership in Energy and Environmental Design) Last December, the Blue Water Bridge Corporate Center was awarded LEED awarded Bridge Corporate Center was Water the Blue Last December, LEED: American system of standardization of high performance green buildings developed by the US Green Building Council in 1998. Council Building the US Green of high performance by buildings developed LEED: American of standardization system green 1 Micheline Dubé, President and CEO Micheline President Dubé, International Financial Reporting Standards (IFRS). This will allow for for will allow This ReportingInternational (IFRS). Financial Standards From reportingresults within the industry. comparative of our financial one corporation the transition to has perspective, a human resources kept who have employees the optimism by been met with cautious operating duringthe business seamlessly these important corporate changes. reading the 2014-15 Annual will find in you – As A VIEW FORWARD Report, a unique opportunity does represent amalgamation achieve to international bridge portfolio. in Canada’s the operational excellence of integration of this goal hinges on the successful achievement The the organization optimize to processes and corporate culture people, portfolio management. Only afterand advance stronger this successful takes pursue place will the Corporation be in a position to integration for proposition value greater create and operational efficiencies greater interest. Canadian manner the changes significantly portfolioA approach management the legacy from its mandate in which the newwill deliver FBCL Itcorporations. individual decision-making shift from is a core a to government’s The collective view of the portfolio of bridges as a whole. continuedthe with newthe realized be only can FBCL for vision members and U.S. board dedication of our outstanding employees, where in each of the communities deeply invested are We partners. working to committed and are with our located our bridges are manner. and collaborative stakeholders in a transparent will be filled with that the coming months and years anticipate We identify best practicesour quest to continue and to we challenges as fortunate to are We corporate policies and culture. and align renew who view of employees group engaged and professional a most have the bridges and every value to their own as incredible deliver day Canadians. BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES A NEWFBCL underourauthority.national bridges to institute inthemanagementofinter consistent bestpractices hasinitiatedThe reorganization amajorcorporate corporation inorder driven andincredibly rewarding. For thisyear andnew), wasactive, theBoard results ofDirectors (legacy . Corporation. the new thatensurewith diverse effective backgrounds andskills oversight of directors Our Board ofindependentand experienced iscomprised corporations. andculture legacy ofthevarious history corporate directors will beinvaluablebridge andbuildonthe aswe preserve and ChiefExecutive (CEO) andanumberofmanagement Officer organization. legacy ofmyThe position,thatofthePresident continuity amalgamated following Corporation tenure my asChairofthe short of Transport oftheBoard asChairperson ofDirectors to leadthenewly I was honoured Minister to appointmentfrom accept the five-year the oversight andstrategic direction. Board ofseven Corporate Directors whoare accountablefor the to Parliament through of theMinister isgoverned byTransport. a It the Province ofOntario. As aparent Crown itisaccountable Corporation, FBCL owning andmanaging four in Canadian bridges international foraccountability bridges.international Their amalgamation results in governance issues, allowing for increased focus andgreater amalgamation remaining). The amalgamationresolved historical offour formedcorporation from entities(withone thesumofparts 6 Connie Graham

– 2014-15 marked the creation of the new FBCL, a thecreation FBCL,a ofthenew – 2014-15marked The FederalBridgeCorporationLimited MESSAGE FROM THECHAIRPERSON - the travelling public. ofCanada and intheirservice performance delivers corporate superior passionate team. Great thingsare to FBCLteam come asournew to with such anaccomplishedand work honour andprivilege we delivered the Government’s is my vision for It Corporation. the new forcorporations theircommitment,diligenceandprofessionalism as I ampersonallygrateful to Board membersandstaffofthelegacy management controls well into thefuture. optimize safety, bridge and fiscally prudent financial security, efficiency and invest intechnology, humancapitalandinfrastructure inorder to to evolve. The Board recognizes its responsibility to methodically plan umbrella, continue customer andGovernmentofCanada expectations additionto ongoing stewardshipIn FBCL oftheassetsundernew andapplicationacross ofpractice theportfolio. consistency ingovernance and ensure bestpractices the adoptionofmodern Board hasinitiated arenewal andboard ofallcorporate policiesto HumanResources (HR)andpolicy. the Importantly, risk, enterprise Whole inorder to address itsresponsibilities inallareas offinance, structure; theFinance andAudit Committee andtheCommittee ofthe advance the organization. The Board has adopted a two-committee continuousandconsistent oversightbeen ensuring to capacity DIRECTING THEWAY FORWARD 2015. culminated inthefinal realization ofamalgamationson 1, February forand principles thetransitionofcorporations. Alloftheseefforts amalgamation agreement policies corporate and development of key corporate profiles,bylaws, establishmentofan thelegal framework, Board structure includingthedefinitionofnew corporate andCEO providedcorporation significant ofthefuture inputinto allaspects its amalgamation preparations, transformation.corporate In each andnew) were spentlaying (legacy the groundworkefforts for of profound change. As we look back ontheyear, muchofthe Boards’ highly-focused thisperiod managementduring governance andrisk related matters are theresponsibilityofBoard whichisproviding planforterm strategic assetdevelopment. Allgovernance- portfolio andiii)approvinggovernance structuresandperformance, along- operational oversight, Crown ii)institutingbest-practice Corporation governancecorporate function. These are: i)responsible financialand AT THEHELM Connie Graham,Chairperson – The Board hasthree areas ofresponsibilityinits – The Board’s new has first priority BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 7 Ownership of the Canadian interest in the Seaway in Ownership interest of the Canadian 2014-15 Annual Report Annual 2014-15 Aerial view of the deck view Aerial the old high level of removal North Bridge in Channel Ontario Cornwall, The design, construction, acquisition, financing, maintenance, maintenance, construction, design, acquisition, financing, The demolition or repair, operation, management, development, facilities, structures, of bridgesreconstruction or other related easements, worksproperties,or approaches, including or communication transmission equipment, pipelines power structure, other related such bridge, with any integrated of Ontario, work, linking or property, facility, the Province or Michigan, of States United York New of the states to Canada other with any jointly or in cooperation America, either alone, MANDATE MANDATE Ownership of the Canadian interest in the Ownership Islands: Thousand interest of the Canadian bridgeThe by is managed Islands InternationalThousand Bridge. Island BridgeThousand Authority (TIBA),the an entity of the State between the agreement under a bi-national U.S., York, of New TIBA; and, FBCL and asset owners, Cornwall: management for FBCL is responsible International Bridge Crossing. including the Northof the whole bridge crossing Channel Bridge, jointThe and the South Channel Bridge. an international roadway, onSIBC by international agreement by managed are operations entity. U.S. a federal FBCL and SLSDC, behalf of the asset owners, undertakenMajor are capital projects Canadian FBCL. directly by

• • (a) 1.2 and establishedTransport the Minister by of approved Our mandate, legacy of its Agreement Amalgamation within the executed so that our of stewardship the highest level provide is to corporations, for users. and efficient safe bridges structures are and associated business or undertakingThe the to Corporation of the shall be limited following: Financial Administration Administration Financial Canada Business Corporations Business Corporations Canada WHO WE ARE 1. CORPORATE PROFILE CORPORATE 1. Ownership, management and operation of the management and Ownership, Edward: Point linking Bridge, Point portionWater Canadian of the twinned Blue Michigan. Ontario Huron, Port FBCL works in close to Edward, the of manager and operator the owner, MDOT, collaboration with portion of the bridge;U.S. Ownership of the Canadian interest in the Sault Marie: Ownership interest Sault of the Canadian Ste. bridge theThe is managed by Marie InternationalSte. Bridge. Internationalentity (IBA), an BridgeStatethe Administration of between an international agreement through of Michigan, U.S., and the IBA, a division of the Michigan FBCL the asset owners, (MDOT). bridgeThe Transport are operations Department of the Sault Ste. of Directors, a joint international Board by overseen Marie Bridge Authority (SSMBA); (FAA) and is an agent of Her Majesty. As a parent Crown Corporation Crown a parent As Majesty. and is an agent of Her (FAA) (CBCA) and listed in Schedule III Part 1 of the of 1 Schedulein Part III listed and (CBCA)

• • Act Transport. Ministerthe of through Canada of reportsit Parliament the to St. Mary’s with the Legacyamalgamated FBCL River Bridge Company (SMRBC), a wholly-ownedon January subsidiary, 27, 2015 and the Bridge Corporation, Authority (BWBA), Crown a parent Water legacy Blue The subsidiary, its remaining 1, 2015. Amalgamation with on February InternationalSeaway Bridge(SIBC), Corporation, Limited is expected to the St. partner, with its U.S. once agreement date, occur at a later The Development Corporation (SLSDC), Seaway Lawrence is reached. at interest federal the Canadian for FBCL is responsible amalgamated as follows: international bridge locations in Ontario, four FBCL is a corporation created under the FBCL is a corporation created Act 1.1 BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES capacities andpowers ofanaturalperson. asamendedfrom timeto the CBCA,andthesearticles, time, the For the foregoing purposes, the has,Corporation to the FAA, subject travelling public with efficiency andtravelling respect. publicwithefficiency the operationsto thebenefitof of bridge Canada whileserving We strive to optimize the safety, security, and capacity sustainability Mission management andstaff together work to plantheway forward. willberevisitedThese aspects andreconfirmedBoard, asthe senior help define the framework for the Corporation’s strategic direction. The mission,visionandpillarsto hasestablishedaninterim Corporation 1.2.1 2 1 O SIBC is a subsidiary of FBCL and operates bridge the and FBCL operates of aSIBC subsidiary is (c) (b)

INTERNATIONAL INTEREST —CANADIAN BRIDGEPORTFOLIO INTERNATIONAL BRIDGE PORTFOLIO PORTFOLIO BRIDGE INTERNATIONAL perates the bridge under an International Agreement

contemplated inparagraph (a)or(b). bridge, orotherrelated structure, facility, orproperty work incidentalto any orotheractivities Any business, undertaking Governor inCouncil may and, determine; may deemappropriate, andconditions asthe onsuchterms facilities, asthe Governor inCouncil orproperties, works orotherrelatedreconstruction ofotherbridges structures, operation, management,development, repair, demolitionor The acquisition,financing, design, construction, maintenance, the United States ofAmerica; inCanada orin orgovernmental authority person, legalentity PUBLIC P 8 Michigan DepartmentMichigan of Transportation FBCL FBCL Sault Ste Sault International Bridge Authority International Bridge Authority Sault Ste Sault MDOT / Owner of the Canadian section

/ SAULT STE SAULT . . Marie Bridge Authority Owner of the U Marie International Bridge International Marie OLICY OBJECTIVES ( SSMBA ( ) IBA

. ) MARIE .S . section section . The FederalBridgeCorporationLimited 1

s under an International Agreement FBCL FBCL MDOT / Owner of the Canadian section

/ Blue Water Bridge Water Blue Owner of the U POINT EDWARD EDWARD POINT — C — THE FEDERAL BRIDGE CORPORATION LIMITED (FBCL CORPORATION BRIDGE LIMITED FEDERAL THE INTERNATIONAL BRIDGE OWNERS / PARTNERS OWNERS BRIDGE INTERNATIONAL MDOT FBCL

ANADIAN INTEREST ANADIAN .S . section . s OPERATORS OPERATORS The Thousand Islands Bridge Authority Bridge Islands Thousand The FBCL FBCL OTTAWA FBCL willdeliver pillars: itsmissionthrough 5key Pillars crossings Canada between andtheUnited States. overseeing thefederal interests oftheentrusted bridge international FBCL isthe Canadian Crown thatis responsibleCorporation for Vision GANIZATIONAL STRUCTURE 1.3 Thousand Islands International Bridge International Islands Thousand ( TIBA • • • • •

/

Owner of the Canadian sections ) / ) / managed in a manner that limits associated risk andcost; managed inamannerthatlimitsassociated risk of information, ofoperations andaccuracy ensure efficiency Effective useoftechnology, utilizingcommonplatforms to maintenance programs; independent inspections, and appropriate capital and focused through aprogram onsafety andsecurity of Stewardship assets under its responsibility, of the bridge approach andfocused onproviding excellent customer service; An relationships withstakeholders. structure, therequired andstrong andskills, capacity Sound optimization andcostcontainment;and, through a shared revenue approach, investment, prioritized toll ofoperations,Sustainability maintenance andadministration THOUSAND ISLANDS Owner of the U organization management operatingwithaportfolio OR TIBA governance through ofthecorporation, anoptimized

1 .S . section .

)

, Ltd. Ltd. , InternationalBridgeThe Corporation Seaway Saint Lawrence Seaway Development Corporation Saint Seaway Lawrence Corporation Development FBCL FBCL ( SLSDC / Seaway International Bridge Owner of the Canadian section ) / ) / Owner of the U CORNWALL ( SIBC

) .S . section . s 2

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 9 100% North Channel Bridge 32% South Bridge Channel

Free passage Aboriginal Free community o o Subsidiary Incorporated in 1962, continued in 1979 as a CBCA corporation four Canadians; four Eight Directors, FBCL. SLSDC by appointed U.S., for Directors U.S. recommends appointment. FBCL/SLSDC SIBC operates Seaway International Bridge International Seaway Crossing Cornwall SIBC 100% Canadian 50% rift bridge Bridge

o o FBCL/TIBA TIBA operates Chair and U.S. six Directors, three U.S; three Canadian, by appointed County. Jefferson FBCL recommends Directors Canadian appointment. for Thousand IslandsThousand International Bridge Lansdowne 2014-15 Annual Report Annual 2014-15 50% of twin bridges

ACTIVITIES Blue Water Bridge Blue Water o Currency exchange Point Edward Point

CORPORATE SERVICES CORPORATE 50% of international bridge

Bridge operations, securityBridge operations, and maintenance and licenses including Duty Free Leases CBSA and CFIA facilities operations o FBCL/MDOT operates MDOT-IBA Eight Directors equallyappointed to each owner by Mariethe Sault Ste. Bridge Authority (SSMBA). Sault Ste. Marie Sault Ste. Sault Ste. Marie Sault Ste. International Bridge Operations International Engineering, projectsCapital agreement agreement inspections

Seven Directors (includes the Chairperson and the President and CEO) appointed by and CEO) appointed (includes the ChairpersonSeven Directors and the President in Council. Governor Ottawa Incorporated 2015 as a CBCA corporation. in 2015 amalgamation with SMRBC and BWBA. • • • • Headquarters Portfolio Portfolio management of bridges andfour of:oversight FBCL Y OF OPERATIONS communications, finance, human resources, information technology and management, internal audit, legal affairs, strategic planning strategic and management, internal audit, legal affairs, technology information human resources, finance, communications, SUMMAR

Board ofBoard Directors International and Agreement Oversight Bridge ownership Location in Location Ontario Status Corporate Operations 1.4 BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES are appointed by theGovernor inCouncil, inaccordance withsection and thePresident andCEO. andthePresidentThe Chairperson and CEO The Board iscomposedofseven directors, includingthe Chairperson 2.3 theBoard initsoversightaddition to role. supporting in ofthecorporation managementandperformance the day-to-day President andCEOisalsoamemberoftheBoard andisaccountablefor which isaccountablefor theoversight andstrategic direction. The of Minister is governed byTransport. a Board of DirectorsIt (the Board) As aCrown FBCLisaccountableto Corporation, Parliament through the 2.2 structure. for throughaccountability bridges international asingleBoard governance issues, allowing for increased focus and greater The significantly amalgamationwillcontribute to resolving historical Corporation. amalgamated willcontinueunderthenewly corporations legacy Directors appointed by FBCL). All activities,assetsandliabilitiesofthe willcontinueto beoverseen by itsownowned Board subsidiary of Board. place, (Note thatwholly- thatuntilamalgamationwithSIBCtakes matters governance-related are now theresponsibility ofthenew ofthesepositionswillbeanassetmoving forward.continuity All reappointed to theirrespective roles organization. inthenew The andthePresidentChairperson FBCLwere andCEOofthelegacy the President andCEO, were appointed uponamalgamation. The The Board ofDirectors entity, ofthenew and includingtheChairperson Limited.Corporation underthe name continuing asonecorporation The Federal Bridge under the CBCA, FBCL and BWBA the amalgamation of legacy Phase three oftheamalgamationtook placeonFebruary 1,2015,with the agreement ofitsU.S. partner, SLSDC. amalgamate subsidiary, withitsremainingSIBC, wholly-owned to subsidiaries, SMRBC.FBCLexpects with oneofitswholly-owned 27,2015,FBCLamalgamated asecondphase, completedIn onJanuary Crown Corporation. ofFBCLandbecomeastandaloneparent cease to beasubsidiary 2014,thefirstphaseofamalgamationsaw JCCBI early Montreal in In 2013. also entitledFBCL. The Billreceived RoyalAssent 12th, onDecember responsibilities to theresulting entity anew amalgamated corporation, andgivesoperate bridges international control andmanagement Crown SMRBC,SIBCandFBCL)thatown or (BWBA, Corporations Action Plan 2013Act 2013, the Government of Canada announced - October In 2.1

CERTAIN CROWN CORPORATIONS 2013ACT,PLAN NO.2,REORGANIZATION OF FBCL BO PUBLIC A CHANGE INFOCU 10 ARD CCOUNTABILITY , No. 2whichauthorized theamalgamationoffour S -ECONOMIC ACTION The FederalBridgeCorporationLimited 2. GOVERNANCE Economic Economic by theBoard, oneofwhom isappointed asChair oftheCommittee. The GovernanceCommittee iscomposedofthree Directors appointed in thenominationandrenewal processMinister for Board membership. structures and processes, the and related also supports matters. It responsibilities on standards and behavior, of integrity governance The Governance Committee assiststheBoard infulfillingits oversight Governance Committee review plannedfor thefall. of allthemembersandafurther withinaCommitteefunctions ofthe Whole to allow for familiarization Laws. The Board ofDirectors hasopted to exercise thesecommittees’ The following committees have beenestablishedwithintheFBCLBy- by-laws ofthecorporation. assigned toother functions itby theBoard andthatare includedinthe examination, anditsresulting plansandreports. The FAC performs responsible to review andadvisetheBoard withrespectto aspecial and theannualauditor’s ofthecorporation. report The FAC isalso consolidated financialstatements, any auditofthecorporation internal FAC is responsible for advising the Board on matters of the oversight of The role of the FAC is as mandated for audit committees in the FAA. The of theCommittee. Directors appointed by theBoard, oneofwhomisappointed asChair management andinsuranceneeds. The FAC iscomposedofthree offinancialinformation, management controlrisk reporting practices, thestandardsbehalf ofthecorporation, andbehaviour, ofintegrity the The Finance andAudit Committee (FAC) isresponsible to oversee, on OFTHEFBCLBOARDOMMITTEES Finance Audit and Committee 2.3.1 Code for Directors. Interest expressed of understanding oftheprinciples intheConflict requires hisorher Director thateachnew review andacknowledge related tomaking potential areasofinterest. ofconflict The Corporation ofinterest,conflict andare required to recuse themselves from decision operate by-laws, ofcorporate undertheterms designed to prevent and ingoodfaith,accordance withtheFAA. They are briefed onand Directors oftheBoard are required honestly, to act diligently, judiciously andapprovedcorporations of by theMinister Transport. guided by the Amalgamation Agreement established by thelegacy exercisingIn theirfunctions,theFBCLBoard ofDirectors willbeinitially are risks identifiedandmanaged. Boards, Bridge Canadian directors aswell ofInternational asensure that approve policies and by-laws, recommend appointment of the approvefinancial performance, budgetsandfinancialstatements, anddirection,ensure objectives corporate goodgovernance, monitor As per the FAA, thedutiesand responsibilities of the Board are to set the GovernorinCouncil. President andCEO, are appointed withtheapproval by theMinister of 105 oftheFAA. The directors, andthe otherthantheChairperson

C BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 11 2014-15 Annual Report Annual 2014-15 P Integrated long-term capital plan developed as basis for capital for as basis long-term capital plan developed Integrated prioritization and annual capital budget; and, internal services.Shared Funds surplus to operating requirements used for capital re- used for surplus operating requirements to Funds in all portfolio bridgesinvestment in support of public policy objectives; with each bridge as a established Revenues centrally managed, corporate services including an appropriate allocation;cost centre, of each bridge based expenditures Operational and maintenance on common policies;

• • • • • The diversity of the operations across our bridge portfolio is significant. our bridge portfolio diversity across of the operations The is significant. International the Seaway Bridge has the most volume, Water Blue The and operating environment has the most challenging Bridge Crossing Thousand Islands and traffic patterns at the the demographics International Marie Bridge International Ste. and the Sault Bridge differ a uniqueThe establishment of the new FBCL entity provides significantly. opportunity adopting best both through look at all possibilities, to within the portfolio common approach practices and a comprehensive alignmentThe opportunities. strategic identifying broader and through of best practices will include direct participation and policies in this area as the Corporation as well across employees bridge directors, from partners. U.S. from representatives 2.4 the manner in changes significantly A portfolio approach management MANAGEMENT ORTFOLIO the legacy from its mandate the Corporationwhich will deliver not a portfolio of corporations are one but rather We corporations. assets (onceportfolio a federal of Corporation overseeing Crown parent used in pursuit of are which is completed) amalgamation with SIBC public policy Key objectives. aspects of the portfolio management (partly be implemented to approach in parallel with, and partly of the legacy the integration corporations)subsequent to include: (PSDPA) came into force on force came into (PSDPA) C BO

Public Servants Disclosure Protection Act Servants Disclosure Protection Public The The 2.3.3 ODE OFCONDUCT April 15, 2007. Its in the public sector purpose encourage employees is to come Corporations and other public agencies to including Crown has that serious believe wrongdoing to reasons forward if they have should them against reprisal to protection taken provide place and to public provide promptly of the Act is to One requirement they do so. certain cases of wrongdoingaccess to founded respecting information Specifically, forward under the PSDPA. brought a disclosure from resulting the recommendationsthe Corporation must describe the wrongdoing; and the corrective action taken the chief the chief executive; by made to executive. the spirit to of the PSDSA, and has had no Corporation fully adheres The date. to disclosures The Governor-in-Council establishes the remuneration paid to the Chair, the Chair, paid to Governor-in-Council the remuneration establishes The of remuneration The and CEO. members and the President other Board the Government’s members follows the Chair and other Board Appointees Council in Governor Part-time Remunerationfor Guidelines The section Corporations and is pursuant to 108 of the FAA. in Crown diem ofa per and $7,500 - $6,400 of retainer annual an receives Chair while other meetings, and committee regular attending $200 - $300 for of $3,200 - $3,800 and a per paid an annual retainer members are Board all reasonable for reimbursed members are diem of $200 - $300. Board and meals, accommodations, out-of-pocket including travel, expenses, in the performanceincurred their duties. of by provided and CEO are conditions of the President employment The Governor-in- Full-Time for of Employment and Conditions Terms the and CEO position salaryThe the President range for Appointees. Council a receive does not and CEO President The - $208,600. 3) is $177,400 (CEO Governor-in-Council mayThe meetings. Board attending per diem for and CEO performance 15 percent up to of pay President the to also grant of key the achievement to performance according of the base salary, of Directors. the Board as determined by objectives, Governmentthe on modeled is management senior Remuneration for (EX) salary Group Executive scales. of Canada 2.3.2 REMUNERATION ARD OFDIRECTORS Human Resources Committee Human Resources (HRC) Committee oversee Human Resources to The is responsible review and of theevaluation policies, compensation and benefits performance of the emergency and review and CEO’s President appointed Directors HRCThe is composed of three management plan. Chair of the Committee. as one of whom is appointed the Board, by BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES comprehensive fiscal year. finalplaninthenext develop amore standard approach for theseplansatallofourbridges. The Board willreview theseplansinorder to establishanintegrated planningstages.in theearly Presently from 5years haveto several 40years, ofthebridges capitalplansvarying long-term we to willwork The projects have corporations. beeninitiated andbudgeted by thelegacy While many are currently inadvancedstagesofdelivery, othersare assetsaswellThe following theconditionofbridge as planned maintenance, describes capitalplansandspecialprojects. long-term section 3.2 to ensure security, bridge safety andinfrastructurerenewal. majorprojectsare currently beingdelivered locations exchange atallofthebridge PERATIONS, activities.Important andcurrency maintenance functions CAPITAL ANDSPECIAL PROJECTS areoftolls, bridges Our international complexoperationswhichincludethecollection trafficmanagement,inspections,capital projects, 3.1 Strategic efficient and Outcome ontheinfrastructuretransit maintained, operated –Safe managed and bytheFBCL.

12 A VIEWP O ER LOCATION The FederalBridgeCorporationLimited 3. DELIVERONTODAY’S ANDPRIORITIES PLANS Ontario and Massena, N.Y.Ontario andMassena, between Cornwall Island, Channel Bridge Bridge –South The Seaway International BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 13 2014-15 Annual Report Annual 2014-15 Major Multi-Year Project Updates Project Major Multi-Year 1. CBSA CANADIAN PLAZA REDEVELOPMENT ($51.6M) 1. CBSA CANADIAN PLAZA REDEVELOPMENT The Sault Ste. Marie International Bridge opened in Marie International Sault Ste. The within crossing trade 1962 is the only international and Northern Ontario 975 kilometers in northwestern Michigan The tender for the construction of the CBSA facilities was issued and award of works is planned for Spring 2015. of works is planned for the constructionissued and award of the CBSA facilities was for tender The S

The annual inspection concluded that the overall condition of the bridge is operationally sound. Regular maintenance activities Regular bridge condition of the maintenance annual inspectionThe consistent is operationally sound. concluded that the overall Critical Member (FCM) inspections are Fracture the inspection from report carried been with the recommendations have out each year. The FCM inspection the structural would compromise integrity of the bridge. structural whose failure defined as non-redundant members half was inspectedwas performed in 2013. half during on the Canadian 2014 while the U.S. track, to capitaland implemented being maintenance detect inform and presently is system monitoringmanagement asset and full A It with stages of being populated in the latter is currently the U.S. peer colleagues across by has been reviewed system The investments. bridge planning. for historic information data and is generating valuable Bridge(s) condition and maintenance Bridge(s) condition The first phase of construction (Phase B) which included the Duty Free building and the IBA maintenance garage where opened for opened where garage maintenance IBA the and building Free Duty construction the of included first phase which B) The (Phase the bridge and to in December the Plaza 2014, including truck access to business in October completion followed 2014. Substantial project Way. from Carmen’s advance to continue 2014 to building in November contract demolish the existing Duty a separate to FBCL simultaneously initiated Free garage and CBSA structures has been completed. of an existing maintenance all demolition, with the exception the project. Currently over substantially returnedwere August 2014 but all compliant bids in tendered second phase of construction A) was first The (Phase the fall through project, without impacting of Requirement, the CBSA Statement a value management and redesign budget. FBCL initiated of 2014. 3.2.1 MARIE,ON) STE. BRIDGE–(SAULT MARIEINTERNATIONAL STE. AULT BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES Progress Ste. ofmajorprojects inSault Mariecan bemonitored atthe“Ongoing Projects” tabat summer of2015. gates andpatron fare displays. throughout The automation hasbeenunderconstruction 2014-15andwillbelive ofthetoll inthe software Once completed, toll thenew by plazawillhave sixbooths, seven allofwhichwillbeequippedwithautomated toll lanesserved card readers, project commencedin2014andisadvancingasplanned, 2015. lanesopenandascheduledcompletiondate withseveral new ofOctober redevelopment aimsto improve traffic flow and safety, as wellas infrastructurethatisattheendofits renew Thelife-cycle. redevelopment The projectisjointlyfundedfrom revenues Bridge. theFBCLandIBA,owners between oftheSaultSte. International Marie The 14 2. TOLL ANDADMINISTRATION FACILITIES REPLACEMENT ANDAUTOMATION ($8.9M–SHARED WITH U.S. PARTNER) The FederalBridgeCorporationLimited October shop openedlast FreeNew Duty

www.federalbridge.ca. Toll Ste. Plaza inSault Marie Construction site oftheU.S. BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 15 2014-15 Annual Report Annual 2014-15

Major Multi-Year Project Updates Project Major Multi-Year The twinned Blue Water Water twinned Blue The Edward, Bridge links Point Huron, Port to Ontario, Michigan 1. TOLL INFRASTRUCTURE RENEWAL AND AUTOMATED TOLLING ($3.2M) TOLLING AUTOMATED AND INFRASTRUCTURE RENEWAL TOLL 1. BL

The existing computer-based tolling system and utility system infrastructure supporting tolling being modernized existing computer-based The operations in each lane are the toll risk mitigation of information ensure as to and necessary as well bridge meet the needs of the current travellers to as a preferred measure options (currently cash, bridge tokens options from and prepay the payment broaden is to aim of the newThe system systems. cards. commercial-only) also include debit and credit to by lane Phased launch of the system testing. year with intensive the throughout being completed were Modifications to the new system is expected June 2015. by these new each lane is reconstructed, As manner. underway of reconstructing each lane in a systematic are the process complete Plans to the newlanes will be connected system. to An annual engineering assessment of the twinned bridge structures is jointly funded with the co-owner, MDOT. The Canadian half of the Canadian The assessment of the twinnedAn annual engineering MDOT. bridge structures is jointly funded with the co-owner, Bridge is in operationally sound condition, which, in part, of diligence in performinga result is Water assessments yearly engineering Blue recommendations. and acting maintenance on qualified professionals by Span 1 of the twinned span was the original bridges in 1938 and Span 2 opened in 1997. Once the new opened span was opened, vehicles than 6,000 commercial With more 13, 1999. November It traffic on to two years. reopened for renovations closed for immediately total busiest for and the third vehicles commercial for second busiest international land crossing is Canada’s it the bridge daily, crossing Corridor. twinnedThe a keyTrade span bridges are link in the Ontario-Quebec Gateway and Continental vehicles. and maintenance Bridge(s) condition 3.2.2 3.2.2 ON) EDWARD, BRIDGE–(POINT UE WATER BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES maintenance workers. assignments for department order to automatically identifyandschedulepreventative tasks,and facility including time and resources usage, in will trackawiderangeofmaintenance vehicle, equipment andcontrols. time,purchase Over it andmanagementalerts supply will beexpandedto inventory alsoincorporate subsequentyears, In theprogram Department. Maintenance over thecourseofyear by the routine tasksundertaken document and include in a computer-based schedule its formative assets. In BWB stages, the program will andvalueof time andgainsthemaximumperformance process thebestuseofemployee and schedulethatmakes the mostappropriate preventative maintenance work program. The overall of the program purpose is to establish 15 involved thedevelopment ofapreventative maintenance initiative commenced infiscal software year 2014- A further function. ofCanadaother threats require to thesecurity improvements to thesystem’s capabilitiesrelated customer to tracking theircompliance the Federal government’s responsibilities for prevention thedetection, financingand anddeterrence laundering, ofmoney terrorist activity changesinrequirementstransactions. Recent by theFinancial AnalysisCentreTransactions that facilitates ofCanada (FINTRAC) andReports Exchange improvementsThe Currency software madeinthepastallowed for greater inthemanagementoffinancial functionality ofBWB’spositively allofitsdepartments. advanceallaspects by linking activities beinginstalledby MDOT.the U.S. withacompatiblenetwork inconcert itsentirety, In theinfrastructureimprovement initiative would wouldThe also fibreincorporate expanded network optic communications technology, across and into capable of connecting the bridge updating technologies onaphasedbasisto more andestablishinganetwork BWB’s effectively meet current andfuture needs. whichsince2009hasincluded comprehensive aforward-looking, ofitsnetwork, view disparate hasbeentaking installations. BWBA plazacurrentlyManaging thetransmissionofutilitiesanddatathrough encompassesabroad theBWB mixofoldandnew, integrated and weeks ofthissinglespanoperation. ensure thattheday to day traffic volumes are wellmanaged. bridge hasnotexperienced inthefirst any majordelaysseven The orbackups spanisclosed.bridge BWB,The MDOT, staffat U.S. CustomsBorder and Patrol (CBP) andCBSAhave invested considerableplanningtime to This projectisacoordinated both between owners ofthebridge, MDOT effort andFBCL,inorder to minimize theamountoftime onMarch 29,2015withtheclosureThe ofSpan1andtheredirection2. Span1Asphalt project started Replacement ofalltraffic toSpan 16 The willbecompleted work ontheCanadian inmid-summer2015 portion Progress ofBlueWater Bridgemajorprojects can bemonitored atthe“Ongoing Projects” tabat 3. INFRASTRUCTURE, NETWORKS ANDSYSTEMS IMPROVEMENTS ($1.0M–PHASEDAPPROACH) NETWORKS 3. INFRASTRUCTURE, The FederalBridgeCorporationLimited 2. SPAN 1RESURFACING ($3M)

operator andcompleted in2014 which was fundedby the Freethe Duty store expansion at projects BWB included Other www.federalbridge.ca. BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 17 2014-15 Annual Report Annual 2014-15 The Thousand Thousand The Islands Bridge International opened in 1938 was Major Multi-Year Project Update Project Major Multi-Year 1. REHABILITATION OF CBSA LANSDOWNE PORT OF ENTRY ($60M) OF CBSA LANSDOWNE PORT OF ENTRY 1. REHABILITATION SAND ISLANDS INTERNATIONAL BRIDGE (LANSDOWNE,ON) ISLANDSSAND INTERNATIONAL THOU

Construction of new PILs, office space, secondary office space, Construction of new examination facilities; PILs, commercial and, routing; configuration and traffic of the road Improvements garage and brokerage facilities. and storage Construction of a maintenance Demolition primary-inspection-lanes current of the and secondary examination warehouse commercial (PILs), main CBSA building, examination facilities;

• • • • The schematic design was finalized and preliminary works such as environmental assessment, surveying and geotechnical studies, hydro and assessment, surveyinghydro and preliminary was finalized works schematic design The such as environmental studies, and geotechnical contract underway works including utilities are removal Early preparation and the rock site completed. were communications relocation A property efficiency that will enhance the site purchase has been secured. this summer. 2015 should be completed which began in February 2017-18. completion by for project is estimated The The annual inspection concluded that the overall condition of the bridge is good. Regular maintenance activities Regular the with of the bridge condition maintenance annual inspectionThe consistent is good. concluded that the overall theyears are planned in the next Maintenance works and repairs five the inspection from report carriedrecommendations are out each year. garage. maintenance Canadian at the bridge piers at the Canadian and asphalt replacement of concrete rehabilitation FBCL is directly responsible to oversee the inspection programs for the Canadian Bridge the Canadian and the Rift for Bridges the inspection projects and manage capital programs oversee to FBCL is directly responsible boundaryThe Island and Hill and isIsland, is at the International Wellesley carried Rift, out at these bridges and CBSA facilities. between spans. bridged two arched parallel by and maintenance Bridge(s) condition FBCL initiated a $60M rehabilitation project on April 1, 2014. This Port of Entry, in operation since the 1950’s, has been identified as a priority in in operation since the 1950’s, Port of Entry, This project on April 1, 2014. a $60M rehabilitation FBCL initiated such, a full in April the Government of Canada 2013. As as announced by Action Plan Beyond the Border States the Canada/United will include the: major elements The modernization and expansion of the CBSA facilities will be completed. 3.2.3 BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES Progress ofThousand Islands majorprojects can bemonitored atthe“Ongoing Projects” tabat estimated to at$7.0Mandisexpected becompleted in2016-17. component. Each phase of this project is being considered for funding by the owners, proportional FBCL and TIBA. The whole project is were ontheinfrastructure andisscheduled to becompleted inmid-2015,withaprioritization completed in2014.Design isunderway toll thenew system feasibility inboththeplazas andadministrationbuildings. studies modernize Initial theexistinginfrastructure to support This projectisto replace theexistingcomputerized toll system lanesinbothCanada andtheU.S. inalltoll collection Toll Plazas aswell as 18 preparation for thenew Port ofEntry at the Thousand IslandsBridgein removalRock andblastingunderway 2. TOLL MODERNIZATION INFRASTRUCTURE ANDAUTOMATION ($7M–SHARED WITH U.S. PARTNER) The FederalBridgeCorporationLimited View ofthesitedesignfornewportEntryatLansdowne,On. www.federalbridge.ca. BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 19

2014-15 Annual Report Annual 2014-15

. www.cornwallbridge.ca Major Multi-Year Project Update Project Major Multi-Year 1. NORTH ($74.8M) CHANNEL BRIDGE Ongoing demolition of the old North Bridge Channel Ontario. in Cornwall, is completion Project 2016-17 planned for SEA

. The $74.8M project encompasses the construction $74.8M project The bridge of a new and the demolition of the old North low-level Bridge Channel at the traffic opened to in newThe bridge facilities were and toll infrastructure improvements. International as related Seaway as well Bridge, January a CBSA-funded project and construction services management delivered In 2014. we the temporary parallel, for CBSA Port of Entry. all members of the community walk the old North to FBCL invited On July 8, 2014, SIBC in collaboration with Bridge Channel and view a brief commentary special communityThis featured event on the the occasion. set up on the bridge for that were the historical photos historynewthe with North replacement its bridge, old the of following the on BridgeChannel (see photos demolition and the planned two pages). a despite progress 2014 with great bridge in August demolition work of the old high-level structure was initiated highly technical The temporarya required which parts removed Large were structure super the of complete. takewill and to months 24 winter harsh to up effort team from FBCL and SIBC staff to a traffic due opened to working plaza were and toll road The be constructed. to road detour 24 hour bridge access during enable the community have the ongoing demolition of particulardiligently to to sections of the old bridge. The willwork be contracttender once the demolition for is sufficiently advanced. will be scheduled realignment for the final contractThe the infrastructure for storm and water sewer, to upgrades incorporate as much as possible, with the City to of Cornwall coordinated 2016-17. full project completion is planned for The roadway. length of the realigned The NorthThe The Channel Bridge South Channel to has been newlyBridge is considered traffic in constructed January and opened to 2014. annual inspection to reports. condition according be in operationally sound 3.2.4 includes the North traffic in 1962, to which opened international crossing This Channel and theBridge South Channel Bridge linked by Replacement Norththe The of underwaycurrently capital BridgeChannel Canadian major a is Project corridor. internationalroadway an ON) parliamentaryproject funded through appropriations. BRIDGE(CORNWALL, INTERNATIONAL WAY and maintenance Bridge(s) condition Work progress can be monitored on the project blog site at site blog on the project be monitored can progress Work BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES history alongthewayhistory displayed ongiant billboards Participants were ableto read about thebridge’s speech on the history ofthebridge speech onthehistory Wade Dorland, makes BridgeDirector apassionate 20 In July 2014, SIBC in collaboration with FBCL invited all members of the community to walk the old North Channel Bridge one last time before In July2014,SIBCincollaborationwithFBCLinvitedallmembersofthecommunitytowalk theoldNorthChannelBridgeonelasttimebefore the final demolition stages. The event was planned as a fitting tribute to an historic structure and iconic bridge, to allow the community the finaldemolitionstages.Theevent was plannedasafittingtributetoanhistoricstructureandiconicbridge,allowthecommunity to bidafinalfarewell.Thousandsoflocalresidentsgatheredviewhistoricalphotossetupfortheoccasion. The FederalBridgeCorporationLimited The Seaway International Bridge-North ChannelSpan 1962-2014 dampen the spirits ofsome The day ended withrain but was not enough to participated intheFinalparticipated Walk The firstoftheapproximately 5,000peoplewho

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 21

Bob Kilger appreciated theappreciated ______opportunity say to Mayor of Cornwall of Cornwall Mayor occasion and really occasion skies for many years”. skies years”. for many from both sides of the both sides from which has graced our which has graced “Thousands of citizens took advantage of this advantage took bridge, including myself, including myself, bridge, farewell to this landmark to farewell Two young boys have fun with the have boys young Two on the roadway peeling laminate 2014-15 Annual Report Annual 2014-15

patiently for the walk to begin to the walk for patiently The crowd listens to the speech and waits to listens crowd The ______After a long exhausting day, some of the employees some of the employees day, a long exhausting After are the last to make their way off the bridge their way make the last to are bridge was to Cornwall.” to bridge was Sarah Hunter, residents Hunter, Sarah Paul Brisebois, Resident Brisebois, Paul Participants were provided with sidewalk with provided were Participants messages along the way leave chalk to “It was wonderful! We couldn’t couldn’t wonderful!“It was We was a once in a lifetime chance.” in a lifetime chance.” a once was shows how big of an impact the how shows “The amount of pedestrians large stop and take pictures before. This before. pictures and take stop Cassidy Savard, Lacy McFarland, Lacy McFarland, Savard, Cassidy walking was heart warming, really heart was walking warming, BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES CY -THEFEDERALBRIDGECORPORATION LIMITED to deliver itsmandate. undertake The following thatFBCLisdeliveringin2014-15andwillcontinueto are targets objectives, thecorporate by strategies activity andperformance 4.1 2. 1. 2014-15 Performance Measures U.S. andjointrepresentation ontherespective Boards ofDirectors. FBCL’s andassociated structuresincludingCBSAfacilities. bridges international The operationsare managed through agreement international withthe andrehabilitation of consistsofallmajorconstruction projectsaswell asothermajorcapitalexpenditures thesafety andsecurity This ensuring activity 1-Rehabilitate,Activity Construct, andOperate Manage 4. 3.

long-term capital requirements.long-term to assist infunding opportunities budget. projectsontimeand bridge utilized. technologies are explored and/or areas.on high-risk andreporting reports inspection safety by continuingreview of Review revenue Review generation Deliver fundedinternational Ensure innovations ornew Ensure bridge international LEGA 22 4. PERFORMANCE ASSESSMENT The FederalBridgeCorporationLimited revenues Crossings –review International ($74.8M) ChannelBridge North ($60M) facility CBSA Lansdowne PortofEntry ofthe Thousand Islands:Renewal ($51.6M) Rehabilitation. Sault Ste. Customs Plaza Marie and/or technologies used Types ofresults ofinnovation (ERM) Management Risk ofFBCLEnterprise as part onassetrisks and formal reports meetingswitheachdivision Joint program ofresults ofinspection Reporting Performance Indicators Annually 2014-17 2014-18 2014-18 Annually Annually Annually Timeline negotiated for the new North Channel Bridge. ChannelBridge. negotiated for North thenew leases have toll utility been 1,2014.New rates April exchange fluctuations. SaultSte. increased Marie –AllcrossingsMet have adjusted toll rates for currency is underway. behalf. The structure demolition ofthehigh-level bridge ontheir ofEntry CBSAPorts andinterim temporary for theCBSA-funded management services construction 2014.FBCLalsodelivered theproject and January - Met andtoll facilitiesopenedin The bridge new beganFebruary issuedandworks 2015. contract includingutilitiesareworks underway. removal Rock designsSchematic are finalized. site preparation Early hasbeensecured. that willenhancethesite efficiency Funding purchase 1,2014.Property wasallocated April 2015. Spring facilities wasissuedandaward isplannedfor ofworks occupied. The tender for oftheCBSA theconstruction Freeand Duty are completed andbuildingsare now completed. ofthemaintenance Construction garage acquisitionsandprojectdesignProperty phasesare innovations technologies. andnew National Research Council andotherorganizations on explored atitsbridges. FBCLcontinuesto withthe work Automated tolling upgrades are beingimplemented or maintenance or capital remediation required. decks ofitsstructuresto theappropriate determine concentrationintheconcrete thechloride determining attechnologyimplemented. for FBCLisalsolooking and straingaugesto compare readings have been ChannelBridge, satellite monitoring –At theNorth Met foris beingcollected analysisandreporting. information onotherfacilitiesandassets More in-depth ofERM. of Directors aspart are presentedand reports anddiscussedwiththeBoard are assetrisks Partially monitored met.Bridge quarterly Met Status BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 23 27, 2015 followed by amalgamation with BWBA by on 27, 2015 followed

2014-15 Annual Report Annual 2014-15 Status January and the President of Directors 1, 2015. FBCL Board February has been and the transition process appointed and CEO were initiated. Met - Savings of 5% identified in 2012 have been maintainedMet of 5% identified in 2012 have - Savings in infrastructure. reinvestment for Met – FBCL maintains interactive websites (blogs) for its (blogs) for Met websites – FBCL maintains interactive to Islands Thousand Marie with in Sault Ste. major projects FBCL and be activated once construction there. works begin SIBC held a community Bridge walk, the old to as a farewell Northhigh-level the by Channel Bridge which was replaced bridge. new low-level Met – All reports on time. submitted audits of Completed Met approved. - Internal Plan Audit (IT)Technology and financial infrastructure FBCL Information management of major contract. by Met been approved – ERM and Internal policies have Audit the FBCL Board. Met completed – FBCL amalgamation with SMRBC was Timeline Annually Annually Annually 2013-14 to 2015-16 2014-16 2014 -15 Performance Indicators Performance Amount of savings reportedAmount of savings on keyas an update initiatives Statistics on number of subscribers to and visitors sites Policy frameworks in eachPolicy the by activity approved area FBCL Board Number of reports meeting in a delivered requirements timely manner Delivery of multi-year, corporate-wide Internal Plan Audit Report the of on progress phases of new corporate structure Continue to support to Continue budget Keep stakeholders and restraint measures. restraint international bridge users on the status informed well trafficof works and resulting disruptions using social media and other tools. Deliver newDeliver corporate Review FBCL and update Meet all legislative andMeet all legislative structure and amalgamation of FBCL as announced in the 2013 Act, Plan Action Economic 2. No. policy framework. regulatory reporting requirements.

5. 4. 3. 2. 1. 2014-15 Performance Measures 2014-15 Performance Internal services at FBCL are groups of related activities and resources that support the needs of programs and other corporate obligations. These that support and other corporate obligations. activitiesInternal and resources the needs of programs of related services groups at FBCL are services support management management services and reporting, planning include governance, strategic and resource including finance, relations. communications and human Activity Services 2- Internal BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES continue to undertake to deliver itsmandate onbehalfoftheamalgamated FBCL. continue to undertake delivered The followingBWBA in2014-15andwill thatthelegacy are targets objectives, thecorporate by strategies activity andperformance 4.2.1 4. 3. 2. 1. 2014-15 Performance Measures expertise. appropriately scheduledandappliedinspections,maintenance andrepairs, work andexternal internal usinganappropriate mixofproperly skilled andongoingsafetyEnsure integrity oftheBlue thestructural Water andassociated facilitiesthrough Bridge afiscallyresponsible program involving andOperate 1-Manage Activity

BWBA Maintenance personnel Maintenance BWBA thecapabilitiesof extend development program a mid-to capital long- term maintenance program operatingand annual bridge engineering study Continue to replenish and Plan, develop andimplement andimplementan Develop Complete annualbridge 24 LEGA CY -BLUE WATER BRIDGEAUTHORITY

The FederalBridgeCorporationLimited Performance Indicators • • • • • • • • •

work costeffectivelywork within-houseresources operating planandminormaintenance project management systems andHVAC technologies operationsofbuilding manage theday-to-day to effectively Department, Maintenance trained by employees seasonedMaintenance on budget competitive by qualifiedcontractors pricing projects inamannerthatencourages capital program withinthedeclared timeframe capabilities projects inamannerthatiswithinBWBA’s fiscal ofthebridge integrity structural and minormaintenance to work protect the Establish a technical capability within the withinthe Establish atechnical capability On-board employees new to bementored and Complete majorcapitalprojectsontimeand Tender andmajorcapital minorwork select Ensure fundingisavailable the to conduct minorandmajormaintenance Schedule Provides listofrecommendations for major Within ofMDOT terms MOU Perform a substantial proportion of the ofthe Perform asubstantialproportion Status seasonal requirements. Met. Work iscompleted onacontinuousbasisper training from seasoned staff. years.two They are receiving and ongoingmentoring FourMet. employees new were hired over thepast All projectsare monitored for scheduleandbudget. All tenders areto competitive subject bidprocess. Corporate plan. Ongoing –A5-year program isdetailedintheFBCL Met. BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 25 Status Ongoing. A general plan has been Ongoing. the phased installation for developed installation work is beingThe period. internal in phases both by completed staff and outside contractors. subject competitive are to All tenders bid process. schedule for monitored All projects are and budget. discussions and Preliminary Ongoing. a incorporated into were feedback packagetender in which was awarded January of 2014. and implementation of the design The is ongoing and expected tosystem toll in the summer of 2015. be completed BWBA in cooperation withOngoing. carried plan out a joint master MDOT, final master The in 2013-14. update the BWBA by plan was accepted board has in Q2 2014. Funding of directors this phased for been allocated not yet date. work project and no tendering to 2014-15 Annual Report Annual 2014-15 A suitable design reflecting key customer- centric element for the reflecting key centric A suitable design element for customer- is prepared of development A phased program the phased construction of the plaza elements funding for Multi-year pricing competitive each phase generates for process tender Project Each phase contract on time and on budget is completed plaza of the Canadian the features by drawn traffic increases, Passenger Identify appropriate elements of an automated tolling system tolling elements of an automated Identify appropriate opportunities have preferred and customers review to Employees implementation and serviceAn appropriate introduction plan is impacted the by adversely Supports employees for developed pricing a number of competitive by generates process tender Project contractThe on time and on budget is completed Plan is developed for the phased installation of utilities and data for is developed Plan be undertakenSelect to of the work is allocated segment in-house by pricing a number of competitive by generates process tender Project contractThe on time and on budget is completed Canadian plaza is selectedCanadian the demolition of old plaza facilitate to is secured Funding is secured; scheduling of the implementation phase will bebuildings; Preliminary deliberations in Q2 2014 of Directors as the Board considered contractors a number of qualified by proposal and to offer feedback offer and to proposal developed system introduction of the automated qualified contractors networking the plaza infrastructure for IT personnel qualified contractors

Performance Indicators Performance • • • • • • • • • • • • • • • • The timelyThe The installationThe introduction of new and technologies, and the integration of improvement select information management systems of utilities and data networking the infrastructure for plaza

Create a customer- Create Install a cost-effective, centered Canadian centered bridge plaza modern bridge tolling system • • Develop a phased plan that will facilitate:

3. 2. 1. 2014-15 Performance 2014-15 Performance Measures To undertake a phased program involving the migration and updating of support system infrastructure that will allow for a continuation of the a continuation and updating of support undertake the migration for infrastructure that will allow involving system program a phased To the bridge modernize To management systems. information of and improvement as the integration of the plaza, as well staged development new develop and sustainable investigate To bridge Canadian plaza. a customer-centered create To in a cost-effective manner. system tolling generation. revenue of non-toll sources Activity 2- Improve and Modernize Activity 2- Improve BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 4. Measures 2014-15 Performance sources ofnon-toll revenue generation. tolling system manner. inacost-effective To create acustomer-centered plaza. Canadian bridge To investigate sustainable anddevelop new staged development oftheplaza,aswell astheintegration andimprovement ofinformation managementsystems. To modernize thebridge To aphasedprogram system involving infrastructurethatwillallow for themigration undertake andupdatingofsupport acontinuationthe 2-ImproveActivity andModernize

non-toll revenue sustainable sources of Introduce new,Introduce 26 • • • • • Performance Indicators The FederalBridgeCorporationLimited

developed andbudgeted case for each plan update project The plansare implemented assustainableandgenerate revenue The finalprojectsare andanimplementationplanis selected The projectteam presents itstop alternatives alongwithabusiness A projectteam isformed to evaluate theopportunities ofthemaster isprepared capital A listofpotential aspart opportunities term period.term fordiscontinued theeffort theshort- however, theBoard ofdirectors into different looked BWBA options; Status BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 27 Status Ongoing. Increased opportunitiesOngoing. exist post- will amalgamation. Met. Met. has been implemented Social media content all inform basis to on a regular and updated about traffic conditions and future customers maintenance. Ongoing. Hired bilingual staff in 2013. Automated Hired in 2013. Automated bilingual staff Ongoing. certain in fall of 2013. processes business 2014-15 Annual Report Annual 2014-15 Define program elements and quality elements and parameters Define program serviceIdentify core and divide tasks team other employees opportunities for involve to Look Survey identify needs and support to customers elements and quality parameters Define program serviceIdentify core divide tasks team, other employees opportunities for involve to Look surveys customer identify needs and supportFrom Services needs of operational target accurately feedback positive offer Operational groups the Official to Maintain and enhance adherence for requests to stakeholderImprove response Review and report process planning product to production timeline, realistic Establish a more Services performed are with use of in less staff time, Supportservices will assist BWBA meet or to in interaction with customers interests existing social through best addressed interests media avenues groups Act Languages acts under ATIP information improvement for identify areas by input and feedback greater for which allows and managers directors time-saving processes automated perform guidelines or within legislative well applicable where requirements,

Performance Indicators Performance • • • • • • • • • • • • • • • • Re-engineer the customer Re-engineer the customer Refine and the development Review and improve business Review and improve service support function service support function delivery of corporate planning and reporting function administration and support services added value offer to operational groups

4. 3. 2. 2014-15 Performance Measures 2014-15 Performance 1. To improve the reliability, value and scope of support services provided to BWBA’s operational groups, customers and government partners.and government customers operational groups, value and scope of support services BWBA’s the reliability, to provided improve To Activity 3- Business, Customer and Financial Support and Financial Services Customer Activity 3- Business, BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES ease oftravel with: purposes, businessorpersonaltravel andto provide an export/import crossingsinternational whilepromoting theefficient flow oftrafficfor continueto ensure thesafepartners andsecure passageatallits andassociated structures.all ourbridges FBCLandinternational majorrehabilitation long-term identify andprioritize requirements on isto through mitigate and sustainability risks regular inspections bridge ORE BUSINESS ANDSTRATEGY safetyOur strategy andfinancial ofbridge to deliver onthepriorities 5.1 FBCL’s are; mainactivities Marie Bridge Marie Ste.Sault YEAR TO DATE COMPARISONS Bridge International Seaway Bridge Islands Thousand Bridge Blue Water All Bridges • •

organization isgreater thanthesum oftheparts. of thedisparate organizations, to ensure thattheintegrated andsynergy.expertise The challengeisto integrate theresources and management,whichwillprovide great strength innumbers, Corporations, allspecializedoperations bridge ininternational for theemployees brought together from Crown four legacy ethical managementandefficientactivities oversight ofits To thatensure goodgovernance, provide services internal andassociated structures; and,bridges To manage, operate, andrehabilitate construct itsinternational facilitiesfor andmaintenance ofmodern onstruction C) roactive trafficmanagement to avoid longdelays; B) A) C 28

C Ongoing in P maximum effectiveness ofborder operations. your route andpay thetoll inany manneryou sochoose;and, TOTAL Trucks/Commercial Passenger Cars TOTAL TOTAL Trucks/Commercial TOTAL Trucks/Commercial Trucks/Commercial Passenger Cars Passenger Cars Passenger Cars TOTAL Trucks/Commercial Passenger Cars vestments intechnology –allowing you to plan The FederalBridgeCorporationLimited 5. MANAGEMENT DISCUSSION ANDANALYSIS 11,752,873 2,083,022 2,208,185 2,093,917 5,367,749 1,940,051 2,133,672 1,720,550 1,544,887 3,822,862 2,135,738 9,617,135 142,971 373,367 2013-14 74,513 11,584,931 1,890,341 2,327,372 2,074,843 5,292,375 1,756,581 2,262,250 1,687,449 1,608,520 3,683,855 2,194,796 9,390,135 133,760 387,394 2014-15 65,122 -192,681 -167,942 119,187 -183,470 -139,007 -227,000 CHANGE -19,074 -75,374 128,578 -33,101 14,027 63,633 59,058 -9,211 -9,391 earning some$40Mforearning directreinvestment. crossings are International welcomeOur bridges approximately 12 millionvehicles each year 5.2.2 TRAFFIC PATTERNS toperiod.expected affect intheplanning andtrafficpatterns tourism suchasdecreased areby factors Canadians. gasprices also Other commercial traffic),butdecreases cross-border shoppingand tourism (andthusincreased andcross-bordermanufacturing exports increased by bridges.Canadian international Aweaker dollarsupports cross-borderimpact trafficpatterns, andthe toll revenues generated inthecentral provinces.sectors Fluctuations intheCanadian dollar toexpected belargely offset inthe manufacturing by increasing activity is intheresource-producing regionseconomic activity ofthecountry maintain moderate, economicgrowth. thoughweaker Declining low for couple of years. the next Overall, to Canada is expected decreased to approximately 80 cents U.S. to and is expected remain CONOMIC IMPACT onthe significantCanadian economy. impacts The Canadian dollarhas hashad The significant drop ofoilsincelate-2014, inthe globalprice 5.2.1 into accountcrossing locationdifferences.that arise, taking theestablishmentofacommonapproach issues will permit to key significant changes. The amalgamationandcreation FBCL ofthenew arethese factors monitored andplansare adapted to address createopportunities, challengesandimposethreats. Onceidentified, whichmay factors highlightitsstrengths,external generate PERATING CONTEXT deliveringitsmandate, In isaffected theCorporation and by internal 5.2 PERCENT -12.60% -0.91% -1.40% -9.25% -1.43%

5.40% -6.44% -9.46% -1.92% -3.64% -2.36% 3.76% 4.12% 6.03% 2.77%

O E located at each of our international bridge crossings,located bridge ateachofourinternational improved cross-border trade. As CBSAfacilitiesare through shared prosperity border andby supporting tradeandeconomicgrowth, bysupport improving the out arangeofinitiatives to and promote security The U.S./Canada BeyondtheBorder Plan Action sets 5.2.3 BEYOND THEBORDERACTION PLAN 2013-14 to 2014-15dueto thesefactors. higher. However, total trafficdecreased 1.43% from commercial trafficwhichispositiveis astherevenue four hasincreased bridges international by 2.77%in but a5.40%increase intotal traffic. all Totaltrafficusing hadadecreaseBridge of12.60%incommercial traffic decrease International intotal Seaway trafficandthe 3.76% increase incommercial trafficbuta0.91% traffic, the a Bridge saw International ThousandIslands in commercial trafficand decrease of 1.40%in total total traffic, Blue Bridge hadanincrease Water of4.12% decreasesin of6.44%incommercial trafficand9.25% had Bridge 2014-15; SaultSte. International Marie atmostcrossings. 2013-14to comparing impact In conditions especiallythiswinter alsohadanegative 5.2.1 above). (section Bad weather Economic Impact bydirectly impacted theeconomy in asdescribed BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 29 0 We continued the path set by We Projects Likely Result to Projects Adverse in Significant Effects Environmental Canadian Environmental Assessment Environmental Canadian FBCL is committed to affordable and affordable to FBCL is committed ONMENTAL ASSESSMENT ACT ASSESSMENT ONMENTAL 2 2014-15 Annual Report Annual 2014-15 CANADIAN ENVIR RE

High Level BridgeHigh Demolition, North Level Channel Bridge Replacement, Nations Bridge Crossing Three Islands BridgeThousand Redevelopment, CBSA Facility Pension Pension plan affordability: The Corporation pension plans. financially sustainable Crown Corporations specific Crown has directed Governor in Council in principle its pension plans align that ensure including FBCL to We Public Plan. ServicePension available with the with benefits our various meet these pension plans to will adjust and integrate requirements. Continued fiscal responsibility: fiscal Continued legacy the use of public funds respect for corporations in the strong with practices in line implement wage restraint in continuing to by in process utilizing a value engineering public sector, the broader sharing internal servicesall of its major capital projects, all across use of technology. broader in the locations and investing Safety and security: A priority is of Canada of the Government is facing security and Canada the safety protect to of Canadians. risk activities, especially home-grown of terrorist increasing International importantterrorists. Bridges represent and assets symbols making security and the them a potential in Canada target We acts intentional and disruptions. terrorism of vandalism, for U.S. thatwork with partners threats potential monitor continuously to the securitycould compromise of our international bridges and/ or cause property of a bridge or impact closure the flow damage, of traffic. Projects Not Likely Result to Projects Adverse in Significant Effects Environmental 2012

1. 2. • • • NUMBER OF DETERMINATIONS FOR PROJECTS NUMBER OF DETERMINATIONS Act, Act, Report on Activities two (2) projects in Fiscal evaluations for environmental FBCL completed in significant 2014-2015, with both projects not likely result to Year The projects are: two effects. environmental adverse 5.2.8 report to lands and outside on its activities on federal FBCL is required under sectionsCanada of the 67-68 5.2.7 PRIORITIES GOVERNMENT TO SPONSE Tunnel, the Ambassador Bridge and the new Gordie Howe international BridgeAmbassador the Howe new the and Gordie Tunnel, being which is currently Windsor Bridge and betweenDetroit constructed. and tolls factorsthese increasing including plans adjust and monitor We looking opportunities generating long-termrevenue at other ensure to financial sustainability of all our international crossings. S COMPETITION CU

There are various ownership and management models for international various and management models for ownership are There at an advantage versus crossings bridges that place some geographical a varietyothers due to or Canada to of factors such as operations limited directly example One participation financial federal entity. another of Island bridgesThousand is the and competing with Cornwall this bridge are facilities for customs The Bridge. Ogdensburg-Prescott the bridge to and since the bridge in proximity placed at a land crossing not the facilities, custom PWGSC and as a result, provides owned, is U.S. bridgethe does not assume owner Therefore, Bridge Authority itself. which in turnlocation, the to due facilities CBSA the of costs associated and places the bridge advantage. toll rates at a competitive do not affect the Detroit-Windsor Bridge faces competition from Water Blue Also, 5.2.6 FBCL has a variety of complexity of stakeholders its to that add a layer These policy operations, establishment, and delivery of its projects. CBSA, CFIA and Agencies, Central TC, partnersinclude federal such as and Government ServicesWorks (PWGSC), Canada CBP as U.S. Public local First and agencies, and municipal governments as provincial well agencies, enforcement law and agencies, governments U.S. Nations, make continue to improvements We unions and emergency responders. our communityto and engagement and communications using blogs communitythat identified concerns ensure are to media social other and that the contributions of its international bridges are and addressed, clearly understood. 5.2.5 TAKEHOLDERS The Customs Act (Section Act (Section 6) and Health of Animals Act Customs 31) require The the international bridge provide to of any or operator the owner and customs for costs maintenance and operations accommodations, janitorial, as maintenance, Expenses include such items facilities. border and complexity expanding size of CBSAThe property and utilities. taxes atrequirements federal funding current in significant facilities results The Islands. Thousand Marie and Sault Ste. bridges, two of FBCL’s both Bridge for Water the Blue been made at already have investments costs of operating and maintainingThe years. CBSA and CFIA in recent work with our partners continue to We also escalating. these facilities are the most cost-effective optionsto develop best define the needs and to requirements. address to 5.2.4 IMPACT OFANIMALSACT ANDHEALTH ACT STOMS these initiatives have a direct impact of traffic and on the flow have these initiatives the engage with our partners, continue to CBSA We facilities requirements. (TC) Canada Transport the objectives meet action of the to and plan. at the of the plazas Most rehabilitation notable is the complete Islands InternationalThousand Bridge is the where crossing Lansdowne Marie International and at the Sault Ste. located Bridge in SSM. Another Blue at the example of partnership initiative wait-time is the joint border flow on the traffic Michigan improve to Bridge with the MDOT Water collection and improved toll side of the bridge technology through booths. customs BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES damage, theflow oftraffic. closure orimpact ofabridge andassociated structuresand/orcauseproperty bridges international to monitor potential threats ofthe thatcouldcompromise thesecurity safety andwellbeing ofCanadian communities. We withpartners work loss oflife oradverse economiceffects, andsignificantly the undermine infrastructureortechnologies couldresult in Disruptions ofimportant organizations mustadaptto thisevolving threat environment. threatsCanada facesincreasingly andfederal complexnationalsecurity 5.3.3 produce acomprehensive standing. oftheirstructural view inorder incollaborationwithU.S. to partners are bridge undertaken forand operatingthesebridges usersandemployees. These initiatives thehighestlevel ofsafetyinfrastructure andensuring inmaintaining programs thelife aimedatextending view withalong-term ofthe safety atalltimes. We are bridge ourinternational administering inspected, maintained, monitored andrepaired appropriately to ensure associated structures. The ensures Corporation are thatthesebridges andfocus and isthe safety bridges Our top oftheinternational priority 5.3.2 across level risks theportfolio. key corporate- profile therisk the to confirm policy, andre-examine overpractices thecomingyear, we willreview ERM ourcorporate togetherwork to standardize assessmentandmanagement risk FBCLin2008.As we in2007andlegacy BWBA Examinations oflegacy amalgamation andissuesidentified by the OAG initsSpecial aremost oftherisks related to thestrategic issuesassociated with out its mandate and We in are tocarrying a number ofrisks subject andoperationalprocesses. making management approach thatisintegrated into planning, decision- policies ensure risk aconsistent, comprehensive and enterprise-wide for managing withintheirarea risk ofresponsibility. management Risk Committees, thePresident andCEO, andallemployees are accountable ERFORMANCE DRIVERS TRATEGIC ISSUES AND RISKMANAGEMENT responsibility. Accordingly, membersoftheBoard ofDirectors, its managementto The beashared considersrisk Corporation 5.3.1 5.3 New York State. State andMichigan crossings and owners bridge Ontario atinternational bridge between effective border crossings. closelywith We and work U.S. partners accommodate andto coordinate to ensure activities efficientand withCBSA, working TC andthesurrounding communitiesto TAKEHOLDER RELATIONSHIPS governments andagencies, law enforcement andU.S. agencies. FBCLis includefederalprovincial Our stakeholders partners, andmunicipal 5.2.9

KEY P 30 S SECURITY INFRAS S TRUCTURE SAFETY The FederalBridgeCorporationLimited officers and approval of key policies. officers andapprovalkey policies. of By-Laws, of confirmation appointmentofcommittee membersand organization meetings including organizationalcorporate matters, atitsinitial swiftly to ensurewere businesscontinuity undertaken definite assetmoving Decisions onimmediate forward. requirements whichisa boardsCorporation experience bridge andalsointernational However, mostoftheBoard membershave onCrown experience Amalgamation Agreement, portfolio. withinthenew andallbridges governance requirements, managementapproach, theportfolio charged itselfwithCrown withrapidlyfamiliarizing Corporation business. bridge in theinternational The appointed newly Board is (once amalgamationwithSIBCiscompleted)subsidiaries whowere all parent wholly-owned two Crown corporations, aswell aspre-existing and operational models. The renewed organization together brings The amalgamationrepresents asignificant changeinourgovernance 5.3.5 not berequired intheforeseeable future . given thegoodconditionofFBCL’s assets, majorcapital investment will revenue increasing Notwithstanding operatingcosts, uncertainty. to to rebuild fundfuture itsreserves capitalrequirements despite some current program of capital projects. This should enable the Corporation ofthe will be ingoodcondition followingThe assetportfolio delivery with economicconditionsaffecting traffic volumesand toll revenues. inline facefinancialuncertainty earnings. bridges Ourinternational capital expenditures would befundedby theaccumulated share ofnet revenues would cover operatingandmaintenance expenseswhile The premise fundingmodelisthattoll bridge oftheinternational 5.3.4 including: Upon amalgamation, many challenges were required to be addressed on March 31,2015,therefore, nocomparative information isprovided. sinceitsexistence on Februarycorporation 1,2015to itsfinancialclose GAMATION consolidated financialstatements presentedactivities ofthe the reflect represents federal anew asatFebruary 1,2015. corporation The 1.1, insection The ofFBCL,asdescribed amalgamated corporation 5.4 he carrying valueofthe assetsandliabilitiesreceived from he carrying d) valueofthe assetsandliabilitiesreceived from he carrying c) financial records BWBA wereegacy required to be b) a)

AMAL GOVERNANCE SUSTAINABILITY accounting policies of the amalgamated corporation of FBCL. ofFBCL. accounting policies oftheamalgamated corporation were BWBA adjusted inorderthe legacy comply with the Standards Financial (IFRS);and,International Reporting FBCLwere adjustedthe legacy inorder to complywith corporation’s ofMarch 31; year-end adjusted from itsprevious ofAugust year-end 31to thenew February 1,2015; immediately preceding thecreationat corporation ofthenew 31,2015,the date SIBC, closedfinancial recordsJanuary on T T L All legac y corporations and the legacy FBCL subsidiary, FBCLsubsidiary, andthelegacy y corporations BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 31 2014-15 Annual Report Annual 2014-15 Assets cash equivalents and 2015. Cash 31, at March $45.6M assets are Current 31, 2015, current March At asset at $23.6M. the major current are $14.0M. Non-current of $328.2M. Non- assets totaled were investments primarily assets are made up of propertycurrent of and equipment properties non- 2015, 31, March At $20.5M. of investment and $301.7M in comparison the variance, to The $5.9M. totaled investments current two values. by of $10.9M is primarily Plan Corporate represented significant$5.6M higher than expected due to are receivable Accounts in of Canada Government the the Corporation from amounts due to The on-going capital projects. three to government-funded relation combination of property property and equipment and investment is policy$5.9M higher than expected due to choices made after the was completed. Plan Corporate Liabilities twoThe 31, 2015. $34.9M at March liabilities are current In aggregate, otherand trade makethat are liabilities items line major current up of $11.1M and decommissioning liabilitypayables of $12.2M. A major the for amounts owing is from component of trade and other payables North Channel Bridge demolition at SIBC of $5.2M. Non-current liabilities of consist Bondsprimarily payable consist of bonds and loans payable. is non-current$74.7M of outstanding debt of which $70.7M nature. in the by listing of $110.0M at 6.41% in 2002 bonds had an original These carrying the no adjustment to was There legacy the value of BWBA. the carrying by and as a result bonds, value of the bonds was recognized and due on the loans payable 1, 2015. Repayments FBCL on February facility of which $17.6M is long-term$18.2M, equaled credit in nature. a twenty over to surplus revenues toll loans will be paid from These in The variance in liabilities and equity, twenty-fiveyear period. of $10.9M, is primarily a Plan comparison the Corporate due to to 31,variance liabilities ($6.4M) at March and accrued payable in accounts the timing of work performed was due to This on various projects 2015. payments. and the associated INCOME OF COMPREHENSIVE STATEMENT CONSOLIDATED financial FBCL, in the first set of consolidated operating period The for the 1, 2015, to of February date the amalgamation is from statements, since this is the As mentioned above, 31, 2015. year end of fiscal March FBCL, for the amalgamated financial statements first set of consolidated prior to However, has been given. information no comparative legacythe amalgamation, corporations transitional joint developed analysis. for below shown expectations that are of results 10.9 10.9 Variance 362.9 362.9 Corporate Plan Corporate 373.8 373.8 March 31, 2015March

C

Total Assets Total equity and liabilities Total of financial position Consolidated statement statement Consolidated (in millions) 5.5 5.5 OF FINANCIAL POSITION STATEMENT CONSOLIDATED FINANCIAL RESULTS ONSOLIDATED sum of the legacy corporationsThe making currently Crown up FBCL By the end of the financial strength. it a position of solid provided have of Statement Consolidated 31, 2015, the ended fiscal period, March following in the was reflected the new organization for Position Financial manner: Note 27 of the consolidated financial statements provides detailed provides financial statements 27 of the consolidated Note on this transition. information MODEL PORTFOLIO FBCL REVENUE AND primary four and services; from tolls derived sources: are revenues FBCL’s leases and permits; currency services, income. exchange interest and affected are these levels and is directly attributableto traffic Profitability including fluctuating a number of factors, currencyby rates, exchange and economy and the U.S. the strength/weakness of both the Canadian U.S. when the tourism bridge-specific in its local Historically, areas. exportstoor expanding, tend products Canadian of robust is economy thein increase an in result also will economy Canadian growing A rise. land services of goods, flow the countries’ and people across two in economic with such increases Our profitability improves borders. between the major international crossings since its bridges are activity, two trading nations. ownership and in the responsibility inherent significant have We that ofmanagement of our bridges structures, and associated Under the portfolio all financial model, and public interest. stewardship ancillary bridge operations, used for bridge-related are revenues and payments debt maintenance, and construction,activities, repairs an operating point-of-view, From other activities within our mandate. generated revenue operations through sustainability of each location’s major for requirements however, in our mandate; is inherent new of bridges North (i.e. or replacement rehabilitation Channel Bridge) of CBSA facilities (i.e. replacement arising from and requirements Islands)Thousand Marie and at Sault Ste. rehabilitations Plaza Customs the portfolio’s basis through being funded on a project-by-project are payments. transfer some federal also through and net revenue BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES to thetimingofbondpayments. due corporations) from tocontributed corporation the new the legacy discounting thecash was minimal(again,after fund financingactivities generated from was also healthy operating activities while the need to funding major maintenance throughout the summer months. Cash March, investmentscorporations. In matured for of the purpose $19.9M that was brought into fromFBCL Corporation the new legacy theperiod, FBCLgeneratedDuring discountingthe $3.6Mincash,after CONSOLIDATED STATEMENT OFCASHFLOW technology, andhumanresources expenses. salaries, payments inlieuoftax,insurance, accounting, information theperiod. Administrativeduring madeupof expensesare primarily totaling $1.6M for theperiod. Administration expensesequaled $1.0M operational buildings. These were thehighestofallexpenses and benefits of operationsstaff and depreciationbridges and salaries of with expectations.Expensesfor madeupof operationsare primarily exchange andadministrationwere CBSA andCFIA,currency inline Expenses are madeupofoperations, maintenance, TIBA expenses, Expenses values. been trending negative astravel plansare to currency closelylinked howeverhas as an offset,dollar; bridge locations passenger traffic at all dueto thedecreaseincreasing inthevalueofCanadian exports positive trends dueto animprovement intheU.S. economy and the Point Edward crossings andLansdowne bridge have beenshowing the total ofwhichwas$5.9Mfor theperiod. Commercial trafficatboth Exchange, TIBA revenues, interest, foreign exchange gain,andother, leasesandpermits, Currency ismadeupoftollsRevenue andservices, Revenue of$5.1M. is in-linewiththetransitionalexpectation The consolidated operatingexpensesfor totaled $5.1M. theperiod This FBCL’s consolidated revenue for totaled $5.9M. theoperatingperiod CONSOLIDATED REVENUEANDEXPENSES For monthsendedMarch thetwo 31,2015 Revenue government funding Operating income before Operating expenses 32 The FederalBridgeCorporationLimited March 31, March 31, 2015 2015 5.20 5.90 5.90 0.70 $ Expectation Transitional 362.9 362.9 362.9 0.23 $ Variance 10.9 10.9 10.9 0.45 $ judgment isinvolved if there in determining are circumstances intangible assets that are not yet available for use. Management testing impairment annually for addition, the performs Corporation when circumstances indicate that there In may be impairment. testing onitslong-lived impairment assets, The performs Corporation Assets ValuationLong-Lived components. to thevalue oftheentire assetandifitsusefullife differs from theother component isaccounted for separately ifitissignificant incomparison equipment, intangible assets and investments A properties. and judgment to thecomponentisationofproperty determine order toIn establishusefullives for theseassets, usesits Management The appropriateness ofuseful lives oftheseassetsisassessedannually. assets asoutlinedinNote 3oftheconsolidated financialstatements. management’s provided by the estimates of service of the periods are depreciated over theirusefullives. Usefullives are basedon andequipment,intangibleProperty assetsandinvestment properties Properties andEquipment,Property Intangible Assets andInvestment under different conditionsorusingdifferent assumptions. differentwhere thatmaterially it islikely amountscouldbe reported judgmentsor subjective aboutmatters or thatare inherently uncertain The below accountingestimates complex require described particular could differ from thoseestimates. of TIBA operations, inputs. results anddecommissioningliability Actual arrangements; classification ofleases;joint presentation testing; inputsfor thecalculationofemployee benefitplans; equipment, intangible assets, and investment impairment properties; and which includecomponentsandassociated usefullives ofproperty with IFRSrequires estimates managementto andjudgements make The preparation oftheconsolidated financialstatements inaccordance and equipment. of property government funding received years in prior relating to the acquisition wasinrelation to BWBA thepresentationfrom of the legacy value of the assets and liabilities received adjustment to the carrying translationgainsandlosses. currency The mostsignificant policy ofsomeassets($0.5M),andthepresentation offoreign a write-down andequipmentinvestment whichresulted properties in property received FBCLwere from thecomponentizationofits thelegacy valueoftheassetsandliabilities significant adjustments to thecarrying are corporations discussed in Notefrom 27. the legacy The most value oftheassetsandliabilitiesreceived items relating to thecarrying oftheadjusting the consolidated financialstatements. Asummary The significant accountingpoliciesofFBCLare inNote 3 described to values of the assets and liabilities received corporations. from the legacy establishing itsaccountingpoliciesaswell thecarrying asdetermining Standards (IFRS). Reporting The organization new used judgments in organization Financial wasjudgedby managementto beInternational The appropriate for selected accountingframework thenew ACCOUNTING POLICIES ANDESTIMATES BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 33 2014-15 Annual Report Annual 2014-15 DEBT ANALYSIS DEBT legacyOn the issuance of the bonds for BWBA, two restricted reserve Indenture. Trust established based on the terms of the Master funds were reserve first The fund entitled Debt ServiceFund began with a Reserve be necessary the fund would into if the balance of $4.5M. Payments Debt ServiceGross 3.00. Ratio below dropped Coverage was the Operating and Maintenance second reserveThe fund required In$2.0M. of amount the with began that accordance ContingencyFund be at least to the fund was required with the terms of the Indenture, and Operating of the (25%) twenty-fiveMaintenanceto equal percent the legacy by expenses incurred BWBA. arrangement. A joint venture is an arrangement whereby the parties is an arrangement whereby arrangement. A joint venture rights the net assets of the arrangement to have joint control that have the Corporation has judgment, of the arrangement. In Management’s at the be joint operations, determinedtwo to arrangements that are Despite the SIBC (SIBC) MarieCornwall crossings. (SSMBA) and Sault Ste. international the due to subsidiary, wholly owned operation being a 100% a joint operation by it is considered its operations, governing agreement Marie a is considered in Sault Ste. joint operation This management. the high interdependency between due to operation, however foreign functionalSSMBA and FBCL, the currency is the management by judged dollar. Canadian Bridge Islands International Thousand arrangement an international with partner is a third There that was be a joint arrangementjudged not to the Corporation as does not jointly four of the the fact this is derived from that TIBA. Significantly control the USby appointed are Directors of Board the members of seven partner 4 of explained in Note details are in the arrangement. Further the financial statements. Liability Decommissioning consideringin obligationan whether Corporationjudgment applies The its to site the restore and asset, an remove and dismantle to exists In constructed. the instances where those assets were condition before an to make to or improvement an addition a demolition is required as these no decommissioning liability is recognised existing set of assets, types of demolitions do not trigger legal or constructive a obligation. the demolition costs will be capitalisedUnder these types of demolitions, as site the cost of the new asset being constructedto and recognised areassets of set an entire where case the in However, costs. preparation decision (legal obligation), of a government being demolished as a result the demolition costs isa decommissioning liability account for to Under these types of demolition, the demolition costs will recognised. the cost of the asset being demolished. be capitalised to to estimated using the cash flows the provision used for are Estimates settle the obligation, to obligation, the time required settle the present The used in the calculations. discount rates and the determination for in and judgments management has assessed estimates Corporation’s locations. decommissioning liabilities at three to relation indicating that testing for impairment is required, and in determining impairment is required, for indicating that testing for GeneratingCash Unit (CGU) their identify assets to of grouping the the purpose of impairment testing. Corporation assesses impairment comparingThe by the recoverable The its carrying to group value. or CGU asset, CGU amount of a long-lived as the higher of: amount is defined recoverable or ii) fair i) value in use, amount determination of the recoverable The sell. value less cost to and estimation. management judgment involves and assumptions, estimates significant amount involves recoverable The and outflows, cash inflows future to respect including those with and assumptions could estimates These and asset lives. discount rates of future estimates if the current results, future Corporation’s the affect the determinations will affect These performance and fair values change. periods. amount of amortisation in future recognised BenefitPlans Employee cost of other post-employmentThe benefits and other long-term actuarially is earned benefits by employees determined usingemployee on service method prorated unit credit and management’s the projected and mortality as ages of employees, rates, of retirement best estimate other post-employment benefits costs for as expected health care well used in actuarial rates Discount based on long- are calculations only. on the employee a material effect and can have rates term interest externalManagement employs benefit liabilities. expertsto advise the use to to estimates Corporation appropriate when deciding upon the benefit plan obligations and expenses. value employee Leases Corporation is partyThe which requires arrangements, leasing many to Management determine the lease is a finance or operating whether to of ownership substantially all of the risks assessing if by and rewards lease, whenever lease finance as a A lease is classified the lessee. to passed have of substantially all of the risks and rewards the terms of the lease transfer classified as All other leases are the lessee. of the asset to ownership in determining whether judgment, most significant The operating leases. of ownership, substantially all of the risks and rewards the lease transfers at the be exercised to assured reasonably options are is whether renewal Corporation considers both the minimumThe inception of the lease. determine to in order as the contingent rent, as well lease payment at be exercised to assured reasonably options are whether the renewal all of the judgment, Inthe inception of the lease. management’s be operating leases. to considered leases are Corporation’s Arrangements Joint status Corporation’s the assessing in Managementjudgment applies when it is party In joint arrangements. to assessing if the Corporation of an arrangement, the parties must determinehas joint control involved returnsare of the the if the activities arrangement affect that significantly Corporation the is determined, Once joint control collectively considered. in determining whether the arrangement is a jointapplies judgment A joint operation is an arrangement operation or a joint venture. the parties of the arrangement have joint control whereby that have the to relating the liabilities, and obligations for rights the assets, to BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES that the community can likely afford canlikely that thecommunity to maintain. toll thetoll rate rate adjustment in2015-16willbring to amaximum operationsare process.bridge minimized theconstruction during A and to the traffic thatimpacts flow planning hasgoneinto ensuring is anticipated to becompleted by March of2018.Agreat dealof $32.9M, is funded through the Gateway and Border Crossings Fund and Project isplannedto begin inJune2015. whichisvaluedat The work, phaseoftheCanadian SaultSte. Plaza Redevelopment thenext In Marie, berequiredrates andwilllikely adjustmentsto to toll make rates. as Point Edward and Lansdowne. are All bridges reviewing exchange and Cornwall, willbeoffset by highercommercial trafficatothers, such tois expected reach some20%atbridges, suchasSaultSte. Marie significantly limitits decrease as the in passengertraffic that reduction modelshouldenableitto maintainitsrevenueand portfolio and/or basis. and willmonitor theresults onabridge-by-bridge The revenue traffic bridges. crossing international FBCLisno exception tothis effect, been dropping, isandwillhave aconsiderableeffect onthe volume of and USdollarsin2015,whereby thevalueofCanadian dollarhas The significant changeintheexchange rate the between Canadian 5.6 the corporation’s debtstructure. indicator for managing performance regularly asitremainsRatio akey Coverage reviews anumberofratiosincludingtheGross Service Debt abolished undertherevised Master Trust Indenture. Management Upon amalgamationatFebruary 1,2015,bothofthesefundswere

OUTLOOK 34 goose andbroughtthebirdtoRaptor Society. Thebirdwas curedandlaterreleasedinthe pond Last April inPointEdward, Ontario,twoBlueWater Bridgeemployeesrescuedaseverelyharmed The FederalBridgeCorporationLimited area nearthebridge to mitigate thisrisk. year will be tollmonitoring rates the next and operations closely during hardship beyond. inthe2015-16fiscal year andperhaps SIBCandFBCL to isexpected to contribute alarge community Mohawk financial exchange rates combinedwith thechallengeoffree passageto the ofthe increasedcrossing. theefficiency fluctuating The ofthe effect of2016. done inthespring spanhas bridge The significantly shortened initiated to uponcompletionofthedemolition,whichisexpected be and on budget. Alignment of the approaches will be to bridge the new Cornwall, In thedemolitionofoldNCBismoving ontime forward be completed by 2018. will be tendered through the fall and winter. to This is project expected of2015. spring The following site preparationworks andconstruction excavation hasbeenawarded contract willbegin andworks inthe Lansdowne, is being constructed. customs In anew facility The rock automatedthe new toll program willfollow. offeringsto suchasself-managedaccountslinked Additional service phased-in approach willaddafew theyear. lanesatatimeduring program will be ongoing through the summer and fall of 2015. The by offering more payment automated service optionswithanew toll to move withminimaldelays. Further, aninitiative to enhancecustomer tospan isexpected becompleted inJune2015. The trafficisexpected PointIn Edward, andwaterproofing onthe westbound resurfacing BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 35

As at March 31, 2015 As of March 31, 2015 of March As 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED Consolidatedfinancial statements Consolidated Financial Statements Financial Consolidated For the month2 period ended March 31, 2015 For the 2-month persiod eneded March 31, 2015 persiod eneded March the 2-month For

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 36 Notesto the consolidated financial.... statements Consolidatedflows cash statement of ...... 7 Consolidated in equity changes statement of 6 ...... income comprehensive of .... statement Consolidated Consolidated 4 financial position statement ...... of Independent Report Auditor’s 2-3 ...... Management’s Responsibility for Financial Statement contents of Table 2015 31, March Limited Corporation Bridge Federal The Management’s for Responsibility financial Statements Notes to theconsolidated financialstatements Consolidated statement ofcashflows Consolidated statement ofchangeinequity Consolidated statement ofcomprehensive income Consolidated statement offinancialposition Auditor’sIndependant Report

The Federal BridgeCorporation Limited

...... 8 ...... 5 ...... s………………………………………………………………………………………1

-41 -41 43 42 41 40 38 37 44 BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 37 se Page 1 d The pective y-owned ubmitted tatements iaryexercise EconomicAction Plan s ing Officer ,and the regulations, articles, and statements. Natalie Kinloch ChiefOperat Act,No. as2 amendedby the inancialstatements reported herein represent two the month CanadaBusiness Corporations Act 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED the , the , EconomicAction Plan 2013 described in Note to1 the consolidated financial Canada MarineAct independent Board of Directors. The consolidated f ofperiod operations since the amalgamation of legacy the Federal Bridge Corporation Limited (legacy FBCL)and Water Bluethe Bridge Authority (BWBA) February at 2015,1, which resulted in a new organisation calle The consolidatedThe financial statements contained in this Annual Report have been prepared by FBCL management inaccordance withInternational Financial Reporting Standards (IFRS).The integrity and objectivity ofdata the in these consolidated financialstatements is responsibility the of FBCL management and management the of its wholly-ownedsubsidiary, The Seaway International Bridge Corporation, Ltd. (SIBC),which reports directly to an Statement Financial for Responsibility Management’s Federal Bridge Corporation Limited (FBCL). compilingIn the consolidated financial statements, FBCL management relies on the audited financial statements of its wholly-owned subsidiary, and on representations made by managementof subsidiary. the isIt necessary for management make to assumptions and estimates based on information available the at of date consolidatedthe financial statements. Areas where FBCL managementand managementof its wholly-owned subsidiary have made significant estimates and judgements include components and associated useful lives of property and equipment, intangible assets, and investment properties, impairment testing, inputs for the calculation of employee benefits plans, classification of leases, classification of arrangements, joint presentation of The Thousand Island Bridge Authority (TIBA) operations, and decommissioning liability. FBCL management is also responsible for all other information in the Annual Report and for ensuring that this information is consistent, where appropriate,with the information and contained data in the consolidatedfinancial statements. supportIn of its responsibility, FBCL management completed the consolidation of the financial statements. FBCL management and the management of its wholly-owned subsidiary have developed and maintain books of account, records, financial and management controls, information systems and management practices for res their financial statements. Thesedesigned are to provide reasonable assurance as to reliability the of fina ncial information,assets that safeguarded are and controlled, transactions that and in accordance are with Part of X the FinancialAdministration Act Act,2014 No. the 2, groups are performing their responsibilities discuss and to auditing, internal controls, and other relevant financial matters. AuditThe Committee of FBCL’s wholly-owned subsidiary has reviewed its respective financial s with its external auditors. The wholly-owned subsidiary’s of Board Directors has approved and submitted its financial together statements with external the auditor’s report to the FBCL (parent) Board of Directo FBCLrs. The Audit Committee has reviewed consolidated the financial statements with the external auditor and has s itsreport the to FBCLBoard of Directors. The FBCL Boardof Directors has reviewed and approved the consolidatedfinancial statements. MichelineDubé Presidentand Chief Executive Officer by-laws of FBCL and its wholly-owned subsidiary, as well as the directive issued pursuant sectionto the 89 of FinancialAdministration Act The FBCL Board of Directors is composed of six directors arewho not employees of FBCL and one director who isPresident the of CEO and The FBCL. Board FBCL of Directors Board the and of Directors of wholl its subsidiary are responsible for ensuring that each corporation’s management fulfils responsibilities their for financial reportingand internal control. The Board of Directors of the wholly-owned subsidiary reports directly the to FBCL Committee meets with management and the independent external auditor to review the manner in which the November 25, 2015 Board ofBoard Directors. The FBCL Board of Directors theand Board of Directors of its wholly-owned subsid their responsibilitiesthrough their own Audit Committeescomprised of Board of Directors members.Each Audit BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 38 The Federal BridgeCorporation Limited BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 39 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 40 LIMITED CORPORATION BRIDGE FEDERAL THE Current Liabilities Current Liabilities ts sse a l Tota Non-Current Assets Non-Current The accompanying notes form an integral part of these consolidated financial statements. financial consolidated ofthese part form anintegral notes The accompanying Director ______ofDirectors Board Approved the by Commitments liabilities Contingent Total Equity and Liabilities Equity Non-Current Liabilities Current Assets Current ts Asse (in thousands of dollars) Canadian thousands (in as at March 31, 2015 March 31, at as ConsolidatedFinancial of Statement Position Current portion of loans payable payable of loans portion Current Deferred revenue Holdbacks liability Decommissioning operations of joint partner the US Due to Employee benefits Employee Trade payables andother Non-CurrentTotal Assets Current portion of deferred capital funding of deferredportion Current capital payable of bonds portion Current Investments Investments assets Intangible properties Investment andequipment Property Total Current Assets Current Total Prepaids Total Equity Total Accumulated other comprehensive income comprehensive other Accumulated earnings Retained @ no par - value 2 shares capital Share Non-CurrentTotal Liabilities liability Decommissioning funding Deferred capital Deferred revenue benefits Employee payable Bonds payable Loans Total Current Liabilities Current Total Trade receivables andother Investments Investments equivalents andcash Cash The Federal BridgeCorporation Limited Director ______Notes 16 15 14 13 12 11 25 24 18 17 10 10 20 13 18 15 19 17 16 7 9 8 7

373,814 328,186 301,735 233,047 373,814 232,741 105,840 12,183 11,120 20,468 45,628 70,740 17,572 34,927 14,003 23,562 2,864 1,075 1,849 5,940 3,999 7,685 1,291 6,564 2,142 7,531 2015 654 619 378 306 564 - 43 $

Page 4 4 Page BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES

$ (7) 87 27 (54) 910 127 909 644 687 480 135 772 107 166 (298) (237) (972) (972) 2015 Page 5 3,867 1,004 5,186 4,165 4,363 4,450 5,873 1,592 4,186 41

19 21 18 Notes ctionAgency operations vailable-for-sale investments net income 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED Cumulative gain reclassifiedgain Cumulative to income sale a on of Investments revaluation loss on available-for-sale investments Actuariallosses Currency exchange Maintenance Security Border Canada Agency & Food Inspe Canadian Administration ThousandIslands InternationalBridge expenses Amortisationcapital deferred of funding Funding with respect to decommissioning liability Interestexpense Currency exchange ThousandIslands InternationalBridge revenue Interest Foreign exchange gain Other Operations Leasespermits and Tolls and services Consolidated Statement of Comprehensive Income of Statement Comprehensive Consolidated March 31,for 2015 period two-month ended the Total Other Comprehensive Income accompanyingThe notesform an integral partthese of consolidated financialstatements. Total Comprehensive Income the for Period Items to reclassifiedbe to net income specific when conditions met are Total Expenses Total Operating Income Before Government Funding Other Comprehensive Income Items that will not be reclassified subsequently to GovernmentFunding Total Non-Operating Income Income Net Total Government Funding Non-OperatingItems Expenses Total Revenue (in thousands of Canadian dollars)thousands (in Canadian of Revenue

THE FEDERAL BRIDGE CORPORATION LIMITED BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 42

LIMITED CORPORATION BRIDGE FEDERAL THE The accompanying notes form an integral part of these consolidated financial statements. financial consolidated of these part anintegral form notes The accompanying le onavailable-for-sa loss revaluation Investments dollars) of Canadian thousands (in Actuarial gains (losses) gains Actuarial Income: Comprehensive Other income Net Income: Comprehensive Total andBWBA FBCL received from legacy assets Net Other Comprehensive Income total Income Comprehensive Other investments of available-for-sale sale on income to reclassified gain Cumulative Balance at March 31, 2015 31, March at Balance Income Comprehensive Total for the two-monthfor period ended 2015 March 31, Consolidated Changes Statement of in Equity The Federal BridgeCorporation Limited Notes 19 27

Earnings Income Total Total Income Earnings Comprehensive Retained 228,813 367 232,741

4,165 3,928 (237) (237) - - $ $ Accumulated

4,165

3,867 229,180

Other 306 - - (54) (61) (61) (7)

233,047

Page 6 6 Page (237) (298) (54) (7)

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 43 1 3 $ 69 92 89 - (87) (69) 621 102 121 575 (302) (104) (182) (903) Page 7 1,630 2,214 2,027 2,568 6,559 1,844 4,165 (4,532) (2,125) 19,939 19,836 23,562 23,562

9 97 13 (4,895) 10 10 18 Notes 2015 orations seconsolidated financial statements. eriod ns 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED Cash cash and legacyfrom equivalents received corp Increase indue to US thepartner of joint operatio Purchase investments of Repayment loans of payable Interest included received in operating activities Interest paid included inoperating activities Proceeds saleon investments of Government funding related funding Government to acquisitions propertyof and equipment received Payments property for and equipment Decrease revenue in deferred Decreasein decommissioning liability Decreasein prepaids Increasein trade other and payables Changes in Working Capital: Increasein trade other and receivables Depreciation investment of properties Depreciation intangible of assets Loss disposal on assets of Depreciation property of and equipment Adjustmentsfor: Amortisation capital deferred of funding Change in employee Change benefits Foreign exchange gain Net income Consolidated Statement of Cash Flows of Cash Statement Consolidated 31, March 2015 ended period for two-month the Net Cash Generated byActivities Investing Cash Flows from Financing Activities Financing from Flows Cash Net Cash Generated by Financing activities Net increasein cashand cash equivalents Cash cash and equivalents at thethe beginning of p Cash and Cash Equivalents at the End of the Periodof at the End Equivalents and Cash Cash flow information cash on Supplementaldisclosure The accompanying The notes an form integral partthe of Foreign exchange gain cash on and cash equivalents held currency in foreign Net Cash Generated by Operating Activities Cash Flows from Investing Activities Investing from Flows Cash Cash Flows from Operating Activities Operating from Flows Cash (in thousands dollars) Canadian of

THE FEDERAL BRIDGE CORPORATION LIMITED BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 44 1. 1. dollars) (in thousands of Notes to the Consolidated Financial Statements LIMITED CORPORATION BRIDGE FEDERAL THE The Corporation is in the process of phasing in the in phasing of the process in is Corporation The Authority and Activities By OrderBy Councilin2015-31 datedP.C. Januarythe2015,26, Corporation grantedwas necessary all app BridgeCorporation, Ltd. (SIBC), is also subject to International Seaway Thesubsidiary, The crossings. land the at based (CFIA) AgencyInspection Food Canadian y re i Cucl .. 0418 dtd eebr 1 December dated 2014-1382 P.C. Council in Order By River. Lawrence St. the crosses that bridge international the provision similar A (CBSA). Agency Services Border and maintain, free of charge, adequate buildings, accommodations or other facilities for customs and the Canada The portfolio. Corporation’s the under bridges the pursuant to Section 89 of the Administration Financial follows: Actas the the the amalgam from resulting entity is new a “Corporation”) (the Limited Corporation Bridge The Federal

with another parent Crown corporation Blue Water Br Water Blue corporation Crown parent another with M St. subsidiary, its with corporation Crown parent The Corporation’s wholly-owned subsidiary, SIBC,op subsidiary, wholly-owned The Corporation’s undertak may also Moreover,the Corporation (U.S.). bridges international four Province of Ontario in Canada to theof State of New Y operation and ownership the involve activities primary Corporation’s The Act Administration 2. No. Act, the by provided authorities the operates the Canadian portion of the crossing. The other side of the crossing is owned and operated b operated and owned is crossing the of (MDOT). of Transportation Department side other The crossing. the of portion Canadian the operates Jeffer of entity an (TIBA), Authority Bridge State Islands of New Thousand York. the At the owner, crossing U.S. between the with Sarnia, also Ontario, is Bridge, and Port Huron, Michigan, the Corporation applica agreement The owns MDOT. of and entity an Authority, niy al Se Mre rde diitain SMA ad t oeain s oe y h Itrainl B International the by done is operation its and (SSMBA) Administration Bridge Marie Ste. Sault entity fo agreements other two owner, to party a theagreement this also Bridge, is MichiganInternational Marie Ste. Sault the to Departmentregards Corporation In The bridges. international the of of Transportation Corporation. the as authorities (MDOT). same the to The bridge oversight is through a joint inte LawrenceDevelopment SeawayCorporation (SLSDC) as agre per 6) Note in described (as operation joint a The consolidated financial statements were approved and authorised to issue by the Board of Directors Directors of Board the by issue to authorised and approved were 2015. 25, November statements financial consolidated The Metc 55 is Corporation the of office registered The ( ( b a ) to outline its implementation strategies with res with strategies implementation its outline to ) ) to) ensure that the pension will plans provide Canada Business Corporations Act Corporations Business Canada International Bridges and Tunnels Act Tunnels and Bridges International corporate plan and subsequent corporate plans until normal age of retirement, corresponds with the age age Service the Pension Plan; and with the corresponds at received retirement, those of than other age available, normal are benefits retirement which at age the that and years 65 to raised is retirement of age normal the that 2015, 1, betw January after or on hired employee any for (ii) ratio cost-sharing service currentcontributions, to be phased in formembers all by December 2017, 31, and, 50:50 a (i) The Corporation is an agent parent Crown Corporation listed in Part I of Schedule III ofthe Financial The Federal BridgeCorporation Limited and is not subject to income tax under thetax provisi under incometo subject not is and Economic Action Plan 2013 Act, No. Plan 2 2013Act, Economic Action of the legacy The Federal Bridge Corporation Limited (the “legacy FBCL”), a a FBCL”), “legacy (the Limited Corporation Bridge Federal The legacy the of for the purposes of ownership and management of the of management and ownership of purposes the for Customs Act, section 6 section Act, Customs ement between the Corporation as Canadian owner and the the alfe, Suite 1210, Ottawa, Ontario, K1P 6L5. 6L5. K1P Ontario, Ottawa, 1210, alfe, Suite se changes by the required dates. dates. required the by changes se ary’s River Bridge Company (SMRBC) on January 27, 2 27, January on (SMRBC) Company Bridge River ary’s idge idge Authority (BWBA) on February 1, 2015, erates the Seaway International Bridge crossing in Cornwall as as Cornwall in crossing Bridge International Seaway the erates e other activities incidental to the bridge busines bridge the to incidental activities other e ork or the State States the in or o Michigan theork of United in the the in pect to the commitments set out in paragraph ( paragraph in out set commitments the to pect Canada Marine Act Marine Canada ble to the operations of the Thousand Islands International International Islands Thousand the of operations the to ble U.S. owner. As a Crown Corporation, SIBC, isSIBC, also Corporation, As Crown a owner. U.S. 0, 2014, the Corporation is also subject to a direc the commitments are fully implemented. implemented. fully are commitments the Plant Protection Act Protection Plant the Economic Action Plan 2014 Action Plan 2014 amended,, as by Economic the ons of the the of ons at which they are available under the Public een employee and employer for pension pension for employer and employee een requires the Corporation to provide, equip equip provide, to Corporation the requires for the purposes of the management of of management the of purposes the for Income Tax Act Tax Income mandates similar support for the the for support similar mandates .

in accordance with is with the U.S. r the operation operation the r y the Michigan y the Michigan international ations under a son County, County, son s. s. linking the the linking ) in) its next The Saint Saint The f America America f rnational rovalsof 015 and and 015 subject subject Page 8 8 Page ridge tive tive on on BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 45 e w and Page 9 e been porting nd with s as this Financial s follows:s s as these f f its shares The legacy d liabilities ed by IFRS yingvalues ies received and services. . Income Income Tax Act . The legacy FBCL had three wholly-owned Canada Business Corporations Act. BA. wn corporation; on May 21, 1964, and became a Crown corporation on bruary 1, 2015 involved, among other things, (i) th Income Act Tax rporation listed in Part I of Schedule III of the 98 under the lt lt of the ownership in the joint operations and hav e 27. ot been realised to date. first year of operations. of how carrying value of those assets and liabilit and assets those of value carrying how of res of SMRBC, there were no adjustments to the carr ncil, P.C. 2014-0142 legacy FBCL transferred 100% o dge Incorporateddge (the ”JCCBI”), SMRBC and SIBC. ding shares of JCCBI, Minister to the Transport.of 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED BlueWaterBridge Authority Act Significant Accounting Policies Policies Accounting Significant

, and was not subject to income tax under the provisions of the Phase I - JCCBI becoming a stand-alone parent Cro parent a stand-alone JCCBI becoming - I Phase SMRBC; and SIBC subsidiaries, remaining two its FBCL with legacy the of - Amalgamation II Phase BW FBCL with legacy the of Amalgamation - III Phase Functional and Presentation Currency The consolidated financial statements are presented in Canadian dollars, which is the Corporation’s functional currency. ofBasis Preparation Statement of Compliance Corporation’s financial statements. statements. financial An Corporation’s explanation Not in discussed Corporation is measured was the by The amalgamation of the legacy FBCL with BWBA on Fe on BWBA with FBCL legacy the of amalgamation The creation of a new Corporation as of the date of amalgamation and (ii) the recognition of the assets an of the assets recognition the and (ii) amalgamation of date as a of the Corporation of new creation received from the legacy Corporations at their carr ying value as at the date of amalgamation in the ne consolidated financial statements represent FBCL’s FBCL’s represent statements financial consolidated and otherwise indicated within these notes. goods for exchange in given consideration the of value fair the on based generally is cost Historical The The financial statements are consolidated as a resu The consolidated The financial statements have consolidated been in prepared accordance Financial with International Re flow cash and operations of months two include statements financial consolidated The (IFRS). Standards the represents operations and cash aryFebru from flows 1, 2015, the date the Corporation was created, to March 31, 2015. In addition, no comparative information is included in the consolidated financial statement prepared prepared on the historical cost basis as explained in the accounting policies below, except as permitt The legacy FBCL was incorporated on September 2, 19 FBCL was an agent parent Crown Corporation listed in Part I of Schedule III of the Financial Administration the Act of III Schedule of I Part in listed Corporation Crown parent agent an was FBCL was not not was subject to income under provisionstax the of the subsidiaries: The Jacques Cartier and Champlain Bri BWBAwas established by the Since legacy FBCL previously owned 100 % of the shalegacythepreviouslySinceFBCL of %owned 100 On February 13, 2014, as authorised by Order in Cou in Order by authorised as 2014, 13, February On in JCCBI, which also represented all of the outstan a 2015 27, January on SMRBC with As authorised by legislation, legacy FBCL amalgamations completed its February on BWBA 2015. 1, npla to restructureits announced Canada of theGovernment Corporationthe 2013, In in three phases, a received from SMRBC.received amalgamationThe of Corporationthe SIBCwith n has April 26, 2002. It was a non-agent parent Crown Co Crown parent non-agent a was It 2002. 26, April Administration Act Basis of Presentation and Presentation of Basis . 2. 2. Corporation of Amalgamation THE FEDERAL BRIDGE CORPORATION LIMITED Statements Financial Consolidated the to Notes ofthousands(in dollars)

3 BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 46

3 dollars) (in thousands of Notes to the Consolidated Financial Statements LIMITED CORPORATION BRIDGE FEDERAL THE . Basis of Presentation and h Croain cons o te ses liabilitie assets, the for accounts Corporation The oprto de nt ae infcn ifune vr IA t s o a ascae Te oprto reco Corporation The associate. an not is it TIBA over influence significant have not does Corporation operation in accordance with the IFRSs applicablet the Corporation. The Corporation has no interesti no has Corporation The theCorporation. as assets by the Corporation. All maintenance expe theborder andas a result, the acquisitions of pro an ownership the for responsible is Corporation The proportionateofrevenues, share gross expens depreciationgross es, of property and equipment. joint control have of not TIBA it does is not a joint arrangement Corporation the and since Since the crossing. the crossing, the by generated are that revenues gross to entitled is Corporation the TIBA, the with agreement this of structure the of nature the to due and The Thousand Islands International Bridge is managed theby TIBA. In accordance with a bi-national ag recognises in relation to its interest in a joint operation: unde operation: joint a in interest its to relation in activities recognises its undertakes Corporation the When activ relevant the about decisions when require only unanimous consent ofthe parties sharing co exists which arrangement, an of control of sharing agreed liabilities, the for obligations and assets, the to A joint operation is a joint arrangement whereby th to the fair value measurement in its entirety, whic entirety, its in measurement value fair the to me value fair the to inputs the which to degree the In addition, for financial reporting purposes, fair asset the of characteristics characteristics into account when pricing the asset the account into takes estimated using another valuation technique. In estimating the fair value of an asset or a liability, date measurement the at participants market between Fair value is the price thatwould be received to selltransaction asset paid an to or transfer liability a orderly in an Accounting for the Thousand Islands International B International Islands theThousand Accountingfor Interests in Joint Operations InterestsJoint in The significant accounting policies are set outbel • • • • • • • • The Federal BridgeCorporation Limited itsexpenses of any includingexpenses, incurred share its jointly. its share of the revenuefrom the sale of the output by operation; the joint and, its revenue from the sale itsshare of of the outpu its liabilities, including its share of any liabili any of share its including liabilities, its itsassets assets, share its any held including of jointly; Levelinputs 3 inputs unobservable are thefor asse the entity can access at the measurement date; ly; and, indirect or directly either liability, or asset the for are observable 1, that Level within included prices quoted than other inputs, are inputs 2 Level Level 1 inputs in are quoted (unadjusted) prices ac

Significant Accounting Policies (continued)

value measurements are categorised into Level 1, 2 Level into are categorised measurements value relating to the arrangement. Joint control is the the is control Joint arrangement. the to relating ecognised recognised are properties investment and equipment and perty ow. ow. h are described as follows: follows: as described are h e parties e that parties have joint of control have rights the arrangement n the assets or then assets liabilities of TIBA. or liability at the measurement date. date. measurement the at liability or ridge ridge o the particular assets, liabilities, and expenses. revenues asurements are observable and the significance of t ofsignificancethe observable areandasurements nses incurred for the CBSA are also 100% the respon the 100% also are CBSA the for incurred nses and is also responsible for 50% of the operating expenses for for expensesoperating the of 50% for responsiblealso is and , eeus n epne rltn t is neet i interest its to relating expenses and revenues s, ntrol. ntrol. d major maintenance of the bridges on the Canadian themajorbridgesthe maintenanceofond , regardless of whether that price is directly observable or or observable directly is price that whether of regardless , jit prtos te oprto a a on oper joint a as Corporation the operations, joint r r iblt i mre priiat wud ae tho take would participants market if liability or ties incurred jointly; jointly; incurred ties

t arising from the joint operation; operation; joint the from arising t tive markets for identical assets or liabilities th or liabilities assets for identical tive markets t or liability. liability. or t

the Corporation Corporation the or 3 based on on based 3 or contractually 50% of the he inputs inputs he reement, reement, sibility of of sibility a joint a n Page 10 side of of side rds its its rds ator ator ities ities se se at at BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES

47 o he ioning on on are udes a ome in Page 11 Page funding ants such ants atements traight line pkeep, and repair of the Corporation’s assets; tion of the currency exchange facility operated at operated tion of the facility exchange currency at the Thousand Islands (see Note 4); Note (see Thousand Islands the at he Corporation’s share of expenses as a result of t of he expenses as share Corporation’s aof result me me the currency exchange transaction is completed. nvestment properties that are subject to depreciati through the toll lanes. Deferred revenue also incl also revenue Deferred lanes. toll the through is performed rather than at the time the decommiss the time the at than rather performed is as the assets acquired using the government using fundingassets acquired . the as the dated dated Statement of Financial Position in the fiscal year in s interest related to investments. vel vel and tourism offices and private coffee shops. in the Consolidated Statement of Comprehensive Inc eration received or receivable. expand its operations. Revenue is recognised on a straightlinea on recognised is Revenue operations. its expand e, excluding contingent rent, are recognised on are rent, e, recognised a excluding contingent s . Theserevenuesincludepayments. ten fromreceived as vehicles pass through toll as toll booths. pass vehicles through of the lease. Deferred revenues that will be recognised greater 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED Significant Accounting Policies (continued) Policies Accounting Significant

Maintenance: expenses related to the maintenance, u maintenance, the to related expenses Maintenance: Operations: expenses related to the collection of toll revenue; t represents Bridge: International Islands Thousand crossing the to pertaining agreement international crossing; Sarnia the Currency Currency exchange: expenses pertaining to the opera • • • • Government Funding Funding Government Leases and permits revenue is recognised when services are rendered. Minimum lease payments relating t operating leases that the lessee is required to mak earned as recognised is rent contingent while basis re natu of the expenses surrounding as such. Detail is presented detailedare in Note 22. Functional departments are defined as such: Functional of presentation expenses st The Corporation’s financial managementconsolidated its reviews itstherefore expenses function, by as Duty Free stores, commercial custom brokers, tra liability is recognised. i and equipment and property for funding Government recorded as deferred capital funding on the Consoli the period in which the work on the decommissioning which the purchase is recorded, with income being recognised in the Consolidated Statement of Comprehensive Income on the same basis and over the same periods Revenue Recognition Recognition Revenue Revenue is measured at the fair value of the consid relating to decommissioning liability is recognised Toll revenue is recognised when tolls are collected Currency exchange revenues are recognised at the ti to tenant commercial a for lease operating prepaid basis over the life of the portion non-cancellable than 1 year after the reporting period are considered non-current deferred revenue. Interest is recognised using the effective interest rate method and recorded in the period in which it is earned. Payments received in US dollars are translated into Canadian dollars at daily exchange rates. rates. exchange daily at dollars Canadian into translated are dollars US in received Payments companies. trucking commercial and users vehicle passenger by advancein paid representstollsrevenue Deferred Revenue is recognised at the time the vehicles pass The Corporation is financed using its own operating income. The Corporation receives federal government funding specificfor acquisitions majorofproperty andequipment investmentand properties, decommissioningforaswell as of specific assets. Government funding is recognised as a receivable when the related expenditure is incurred. Government The primary component of revenue in this category i category this in of revenue component primary The Basis of Presentation and Presentation of Basis . 3 THE FEDERAL BRIDGE CORPORATION LIMITED Statements Financial Consolidated the to Notes ofthousands(in dollars)

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 48

3 dollars) (in thousands of Notes to the Consolidated Financial Statements LIMITED CORPORATION BRIDGE FEDERAL THE . Basis of Presentation and Cash and Cash Equivalents CashEquivalents Cashand Cash and cash equivalents include cash and highly l tm o poet ad qimn, nagbe assets intangible accumulated depreciation and impairment. equipment, and property of Items the date of acquisition. transactions are used. Exchange differences arising dat the at rates exchange the case which in period, that during significantly fluctuate rates exchange custo. noe n epne tm ae translate are items expense and Income acquisition. exception of non-monetary items which are not retranslated from their exchange rates prevailing at their date of of date their at prevailing rates exchange their from retranslated not are which items non-monetary of exception The Corporation’s proportionate share the of assets share proportionate The Corporation’s of historical costin a foreign currency are not re operat of part as income net in recorded are losses rate denominatedforeignretranslatedcurrenciesarein the transaction at the of recognised dates are the currency at functional prevailing exchange Corporation’s the than other currencies in Transactions es prevailing at the end of each reporting period, with the the with period, reporting each of end the at prevailing rat es exchange using dollars Canadian into translated

theirtheestimatedusefullives, liusing straight intangib equipment, and Property basis. prospective with period, reporting each of end depreciation the and at values reviewed residual lives, useful estimated The lives. useful their over values residual Depreciation is recognised so as to write off the cost of assets (other than land and projects in prog in projects and land than (other assets of cost the off write to as so recognised is Depreciation Properties Investment Assets and Intangible Equipment, Propertyand ForeignCurrencies Investment properties properties Investment Intangible assets improvements Property Buildings equipment and Vehicles Bridges and roads Asset of Type • • diitain te xess eae t te managem the Corporation. to related expenses the Administration: and Border Service Agency and the Canadian Food Inspect maintena certain and facilities provide to required is Corporation The operations: Agency Inspection Food Canadian & Agency Security Border Canada The Federal BridgeCorporation Limited

Significant Accounting Policies (continued) 10 – 70 years years 70 – 10 years5 years 30 – 10 years10 70 – years 33 – 5 75 years5 – Line Straight ne depreciation method, as follows: follows: as method, depreciation ne translated. translated. ing expenses. Non-monetary items that are measured iquid investments with maturities of three months o of months three maturities with investments iquid , if are recognised any, in net income. and liabilities denominated in foreign currency of at the rates prevailing at that date and the result the and date that at prevailing rates the at the effect of any changes in estimate accounted for accounted estimate in changes any of effect the d over over d depreciate are properties investment and assets, le . t h ed f ah eotn pro, oeay it monetary period, reporting each of end the At s. d at the average exchange rates for the period, unless unless period, the for rates exchange average the at d n ivsmn poete ae esrd t ot less cost at measured are properties investment and nce of these facilities at its crossings to the Can ion Agency, for which there is no related revenue; revenue; related no is there which for Agency, ion ent and oversight of the operations of the the of operations the of oversight and ent ress) less their their less ress) method are are method SSMBA are are SSMBA ing gains or or gains ing r less from from less r es of the in terms terms in Page 12 on a ems ems s of of s ada

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 49 is en on cash r r loss on on an tment tment Page 13 Page rty rty and ets and sset sset and or future ermine if estimate rate that nded use. ded in the , the useful are added to ets, which are cordance with cordance . ts usefuldifferslifets t t of specific borrowings pending their expenditure ble ble assets and investment properties. A component is e e any indications of impairment. An impairment loss ue ue of money and the risks specific to the asset. Wh ise from the continued use of the asset. Any gain o gain Any asset. the of use continued the from ise its recoverable amount. Where it is not possible to reviews its property and equipment, intangible ass e classified to the appropriate categories of prope s or investment properties is derecognised upon disposal or property and equipment, intangible assets or inves Corporation estimates the recoverable amount of the the sales proceeds and the carrying amount of the a the of amount carrying the and proceeds sales the es when completedwhenes andreadyintendedfor Depre use. ciation ts ts value in use and its fair value less costs to sell. In assessing sts eligible for capitalisation. property and equipment and investment properties based on prospective basis. ed ed out under an operating lease, the asset is inclu when the properties are held to earn rental income assets within the CGU are reviewed in order to det remaining value after the impairment is recognised is impairment the after value remaining cost. Cost includes design, engineering and sionalprofes fees, f time to get ready for their intended use or sale, or use intended their for ready get to time f order to determine if the useful lives should be shortened. Any ition, construction or production of qualifying ass qualifying of production or construction ition, fying fying assets, borrowing costs are capitalised in ac sets are substantially ready for their intended use or these assets, Management uses its judgment to determine the omparison to the value of the entire asset and if i 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED Significant Accounting Policies (continued) (continued) Policies Accounting Significant

Borrowing Costs Borrowing Leases leases. classified as operating are leases All arising on the disposal or retirement of an item of item an of retirement or asset intangible and equipment, of An property item disposal the when no future on economic benefits are expected to ar arising the Corporation's accounting policy. Such assets ar material inputs and capitalised salaries. For quali properties is determined as the difference between income. net in recognised is Assets in the course of are construction carried at equipment,intangible assets investmentor properti Appropriateness of depreciation methods and estimate of useful annuallives basis. In order to establish useful lives f and residual values are assessed commences when the assets are ready for their inte their for ready are assets the of these when assets, on the same basis as other assets, commences investment properties to determine whether exceeds there amount carrying asset’s an when ar recognised qualifying assets is deducted from deducted coassets the borrowing is qualifying incurred. are they which in period in the ome inc net in recognised are costs borrowing other All the recoverable amount of an individual asset, the reflects current market assessments of impairment the indicators time exist the val useful lives of the a have that assets For re-assessed. be should these value value in use, the estimated future cash inflows are discounted to their present value using a discount componentization componentization of property and equipment, intangi from the other components. Properties are classified as investment properties rental is probable. As lessor, when assets are leas consolidated statement of financial position within primary use. their Borrowingcosts directly attributable thetoacquis assets that necessarily take a substantial period o as as the such until time assets, of those cost the Investment income earned on the temporary investmen belongs. asset the which to (CGU) unit generating i of greater the is CGU a of amount recoverable The in reviewed are CGU the within assets the of lives changes in estimated useful lives are recorded on a accounted for separately, if it is significant in c in significant is it if separately, for accounted Impairment At the end of each reporting period the Corporation Basis of Presentation and Presentation of Basis .

3 THE FEDERAL BRIDGE CORPORATION LIMITED Statements Financial Consolidated the to Notes ofthousands(in dollars) BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 50

3 dollars) (in thousands of Notes to the Consolidated Financial Statements LIMITED CORPORATION BRIDGE FEDERAL THE . Basis of Presentation and Retirement and Other Post-Employment Benefits Benefits Post-Employment Other and Retirement Employee Benefits asset will reduce the decommissioning liability. A A liability. decommissioning the reduce will asset underlying the obligation and updates assumptions such as discount rates. Actual costs incurred to dis dutd t h ed f ah eid o elc te p the reflect to period each of end the at adjusted the Corporation to cover current service costs. Pu costs. service current cover to Corporation the employe the both by required are Contributions Canada. of Government the by sponsored and legislation nsion Pe Service by the Plan Public are covered employees SIBC (Plan), a defined benefit plan establish benefit plans are recognised as an expense when employees have rendered service entitling them to the the to them entitling service rendered have employees when expense an contributions. as recognised are plans benefit usqet o h iiil esrmn o te decomm the of measurement initial the to Subsequent asset. identified the are costs liabilitydecommissioning associated The material). is money of value time the amou carrying its obligation, present the settle to flows cash the measuredusing provisionis a When obligation.the surrounding uncertainties risks and obliga present the settle to required consideration could have an impairment analysis, whereas bridge operations (as a separate CGU) could not have an impairment and theIt properties has been investment that assessed currency exchange facilities represent varying demolished. These costs are then amortised on a st a on amortised then are costs These demolished. employees have rendered service and represent the t the represent Contri and service rendered have costs. employees service current cover to Corporation C plans. pension contribution defined and benefits Employees ofpensi total the represent and service therendered have Sault con furthercontributi Consequently, Plan. the of pay deficiencies Ste. to obligation constructive Marie or legal Bridge Authority defi Michigan’s of State the in participate (SSMBA) these plans are shared by the employees and the Cor the and employees the by shared are plans these in defined contribution private participate pension plans and th employees remaining Corporation’s The SSMBA. past event, it is probable that the Corporation wil Corporation the that probable is it event, past be made of the amount of the obligation. The amount recognised as a provision is the best estimate of estimate best the is provision a as recognised amount The obligation. the of amount the of made be the end of each reporting period when an impairment indication exists and changes are made to remainin assetsor the value in use cannot be determined. In these situations the usefullives of the assets a calculation completed. The bridge operations cannot have an impairment calculation the because the of fair value The decommissioning liability is recognised when th when recognised is liability decommissioning The structures. other and roads, ass the liability reflect liability Decommissioning livesprospective a on basis. Decommissioning Liability The Federal BridgeCorporation Limited

Significant Accounting Policies (continued) ociated with retiring and certain long-livedbridges assets as such l be required to settle the obligation, and a relia a and obligation, the to settle l required be gain or may loss be incurred settlement upon of the ons are recognised as an expense in the year when e whenyearthe expense in an recognisedare asons nt is the present value of those cash flows(when t tion at the of end the reporting period, int taking rsuant to legislationrsuantto Corporationcurrently theplace,in no has on obligation relating to SIBC employees. raight line basis over the period to the end of the of end to the period the over basis line raight capitalised as part of the cost of the long-lived a e Corporatione presenta has obligation (legal) a as the the and employees the both by required are ontributions butions are recognised as an expense in the year when when year the in expense an as recognised are butions sae f ie cags n siae ftr cs fl cash future estimated in changes time, of assage rbtos ih epc t ay at evc o fund or service past any to respect with tributions otal pension obligation relating to the employees o employees the to relating obligation pension otal poration. Payments to defined contribution retirem contribution defined to Payments poration. issioning liability obligation, the obligation may may obligation the obligation, liability issioning ble estimate can re reviewed at at reviewed re o account the useful life of of life useful he effect of of effect he liability. liability. CGU’s that that CGU’s pose of the the of pose ed through ed through result of a sset being sset estimated estimated mployees mployees e costof g useful Page 14 es and f the the f the the ows ows ned ned ent ent ing ing be be BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 51 by ng to The h it is unt of other Page 15 Page luations lated by benefits ue of the gnised in osses osses are the entitythe ulting ulting in a tual deficittual liabilities. n to which it lso recorded in tion tion and exceptional service and has been with the by the Corporation in respect of services provided of of March 31.The Corporation provides service awards f defined benefit costs within the function in whic in function the within costs benefit defined f hey occur. Actuarial gains and losses recognised in obligation is based on market rates for t non-curren high of financial position with a charge or credit reco etained earnings and will not be reclassified to net income. income. net to be not reclassified and will earnings etained ost ost of these benefits are determined on an l actuaria basis ese service awards are a fixed dollar value provide d to the service service and Management’s best estimate assumptions. d statement of financial position represents the ac the represents position financial of statement d -current -current high quality bonds. Actuarial gains and l period to the net defined benefit liability or asse t. Defined the projected unit credit method, with actuarial va ng period. The discount rate used to determine the accrued on benefits. These benefits are not pre-funded, res Past service costs associated with post-employment the plan amendment or curtailment occurs, or when when or occurs, curtailment or amendment plan the stancethesedefinedpost-employmentprogram.For benefits, ccruing ccruing to employees in respect of wages and salaries, annual m m employee benefits are measured at the present val e costs are presented in expense as per the functio gation. gation. 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED Significant Accounting Policies (continued) (continued) Policies Accounting Significant

service service cost (including current service cost, past settlements); service and curtailments cost, as well as gains and losses on and income; or expense interest net losses. and gains actuarial • • • in the Corporation’s defined benefit plan. plan. benefit defined Corporation’s the in The employee benefits recognised in the consolidatebenefitsthe recognisedemployeeinThe employee every five years. The obligation and the c employees up to the reporting and measurement date employees with a long history organisation of for a commitment,predetermined period dedicaof time. Th using the projected unit credit method prorated on a are and occur they which in period the in gains and losses full Actuarial in are relates. recognised expenses as per the function to which they relate. estimated future cash outflows expected to be made Liabilities recognised in respect of other long-ter discount rate used to determine the accrued benefit bonds. quality Current service cost, interest cost and past servic are recognised as an expense at the earlier recognises related restructuring costs of or terminati when deficit equal to the accrued liability benefit obli applying applying the discount rate at the beginning of the benefit costs are categorised as follows: Past Past service cost is recognised in net income in the period of a plan amendment. Net interest is calcu The Corporation presents the first two components o The Corporation also provides certain eligible employees with defined post-employment benefits includi Short-Term and Other Long-Term Employee Benefits health, dental, life insurance and an employee assi employee an and insurance life dental, health, the cost of providing benefits is determined using other comprehensive income in the period in which t comprehensive income are reflected immediately in r incurred. leave and sick leave in the period the related service is rendered. Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amo A liability is recognised for short-term benefits a the benefits expected to be paid in exchange for the related service and are presented within current being being carried out at the end of each annual reporti benefit obligation is based on market rates for non reflected immediately in the consolidated statement Basis of Presentation and Presentation of Basis . 3 THE FEDERAL BRIDGE CORPORATION LIMITED Statements Financial Consolidated the to Notes ofthousands(in dollars)

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 52

3 dollars) (in thousands of Notes to the Consolidated Financial Statements LIMITED CORPORATION BRIDGE FEDERAL THE . Basis of Presentation and that are directly attributable to the acquisition o acquisition the to attributable directly are that less impairment. any measreceivablesare and Loansactivemarket. an in Loans and receivables are non-derivative financial measurement of financial instruments in subsequent periods depends on their classification. Transacti classification.their on dependsperiods subsequent in instrumentsfinancial ofmeasurement deducted from the fair value of the financial asset financial the of value fair the from deducted Financial Assets at Fair Value through Profit & Los &ValueAssets Fair throughProfit at Financial (iii) future estimated discounts exactly that rate the is ofallocatingand interest incomeexpenseand over calcul of method a is method interest effective The provisions of the instruments. Financial assets and assets Financial instruments. the of provisions financialFinancialassetsandliabilities recoare (i) Loans and Receivables Receivables Loansand recognised in net income. TheCorporation does not have such financial assets at thistime. rem on arising losses or gains any withvalue, fair atstated are FVTPL atassets Financial FVTPL. at The Corporation’s financial assets and financial li Financialassets theclassifiedfinancialwhenareFVTPL at as asset is either it trading for or held Financial Instruments Instruments Financial (ii) Asset/Liability Trade and other payables payables other and Trade receivables other and Trade Investments Holdback Holdback operations operations joint the of partner US to Due Bonds payable payable Bonds payable Loan Financial Assets Classification of Financial Instruments Effective Interest Method Method Interest Effective The Federal BridgeCorporation Limited

Significant Accounting Policies (continued) Held-to-maturity Held-to-maturity Available-for-sale Classification Other liabilities liabilities Other receivables and Loans Other liabilities liabilities Other Other liabilities liabilities Other liabilities Other Other liabilities liabilities Other gnised when the Corporation becomes a party to the the to party a becomes Corporation the when gnised s (FVTPL) (FVTPL) s r issue of financial assets and financial liabilitifinancialassetsandfinancial ofissue r abilities are classified and measured as follows: follows: as measured and classified are abilities s or financialliabilities, as appropriate, on init assets assets with fixed or that payments determinable are not quoted cash flows cash through the expected lifeinstru of the ating the amortised cost of a financial asset or fi the relevant period to net income. The effective in effective The income. net to period relevant the iaca iblte ae ntal maue a fa at measured initially are liabilities financial ured at amortised cost using the effective interest effective the using cost amortised at ured Amortised cost cost Amortised value Fair Subsequent Measureme Amortised cost cost Amortised A Amortised cost cost Amortised Amortised cost cost Amortised cost Amortised Amortised cost cost Amortised mortised cost cost mortised es are added to or or to added are es ial recognition. recognition. ial is designated as as designated is nancial liability liability nancial ment. ment. ir value. The The value. ir easurement easurement contractual terest rate rate terest method, method, on costs costs on Page 16 nt nt BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 53 ce ying ated t the d d in an Page 17 Page method fference account. account. ent ent on a t to initial amount of observable airment for s previously previously s l l assets with ial assets are assets ial current, and and current, is reclassifiedis e end of each ankruptcy or financial re-organisation; or re-organisation; financial or ankruptcy ounterparty; or certificates held by the Corporation that are trade llectible, it is written off against the allowance ing ing amount is reduced through the use of an allowan off are credited against the allowance account. Changes in in Changes account. allowance the against are credited off recognised recognised in net income. Other changes in the carr nd fixed and fixed payments with fixed or determinable assets ancial e intent and ability to hold to maturity. Subsequen one fiscal year are classified as non-current. non-current. as classified are year fiscal one at correlate with default on receivables. ed by the impairment loss directly for all financia trade receivables, assets are assessed for impairm amount of the impairment loss recognised is the di the is recognised loss impairment the of amount ent could include: anner described in Note 26. Changes in the carrying the in Changes 26. Note in described anner t, the estimated future cash flows of the investment have been

6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED Significant Accounting Policies (continued) (continued) Policies Accounting Significant

breach of contract, such as a default or delinquency in interest or principal payments; or payments; principal or interest in delinquency or default a as such contract, of breach significant financial difficulty of the issuer or c it becoming probable that the borrower will enter b the disappearance of an active market for that financial asset because of financial difficulties. difficulties. financial of because asset financial that for market active an of disappearance the • • • • termined to be impaired,deloscumulativeterminedthebe isto gainor or investment of thedisposedis When equity. reserve assets financial available-for-sale on (loss) gain revaluations investments the in accumulated income. net to Impairment of Financial Assets under under the heading of investments revaluations gain (loss) on available-for-sale financial assets ve reser within active active market are classified as financial available-for-sale assets and are stated at fair value at th reportingperiod. Fair value determinedis inthe m amount of available-for-sale financial assets are recognised in other comprehensive income and accumul available-for-sale available-for-sale financial assets relating to changes in foreign calculated currency using rates (see the below), effective interest interest income method are Available-for-Sale Financial Assets Government of Canada, provincial bonds and deposit Held-to-Maturity Investments Financial assets are assessed for indicators of impairment at the end of each reporting period. Financ period. reporting each of end the at impairment of indicators for assessed are assets Financial considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asse affected. impairm of evidence objective assets, financial For Subsequent recoveries of recoveries written amountsSubsequent previously the carrying amount of the allowance account are recognised in net income. income. in net recognised are account allowance the of amount carrying the Held-to-maturity investments are non-derivative fin maturity dates that the Corporation has the positiv recognition, held-to-maturity investments are measured at amortised cost using the less anyeffective impairment. Investmentsinterestas thatclassified are areyear fiscal due next tothe within mature those scheduled to mature in a period greater than between the asset's carrying amount and the present value rate. interest effective original of asset's financial estimated future cash flows, discounted a The carrying amount of the financial is asset reduc the exception of trade receivables, where the carry account. account. When a trade receivable is considered unco collective basis even if they were assessed not to be impaired individually. Objective evidence of imp a as portfolio well as of days, receivables 60 of could period include credit the average Corpor the ation's past past of experience payments, collecting an inincrease portfolio the in payments delayed of number the th conditions economic local or national in changes For financial assets carried at amortised cost, the For For certain categories of financial assets, such as Basis of Presentation and Presentation of Basis .

3 THE FEDERAL BRIDGE CORPORATION LIMITED Statements Financial Consolidated the to Notes ofthousands(in dollars) BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 54 3 dollars) (in thousands of Notes to the Consolidated Financial Statements LIMITED CORPORATION BRIDGE FEDERAL THE 4. Key Key Sources of Estimation Uncertainty and Critica 4.

. Basis of Presentation and benefits will be required to settle the obligation. the settle to required be will benefits past i it a and reliably,estimated be of can that obligation result a as if, recognised is provision A ContingenciesProvisions and il e eurd o ete h olgto, r h a the or obligation, the settle to required be will reliability. reliability. events but is not recognised because it is not prob not is it because recognised not is but events future events not wholly within the control of the the of control the within wholly not events future by only the be confirmed occurrencewill existence whose and or events non-occurrence of one or more uncertain liability contingent a remote, is benefits economic Other financial liabilities are subsequentlymeasur For financial assets measured at amortised cost, if cost, amortised at measured assets financial For (iv) (loss)income. on available-for-salenet to financialreclassified assets also reser is ve for-sale financial assets,the cumulative gain or l is receivable and received consideration the of sum the and amountcarryingasset's betweenthedifference entirety, theits infinancial asset derecognitiona of On judgements, estimates and assumptions about the car the about assumptions and estimates judgements, The preparation of the consolidated financial statements in accordance with IFRS requires management t The Corporation derecognises a financial asset when f reallocated is recognised loss impairmentinvestments revaluations gain (loss) theon available-for-sale financial assets reserve of to netincome. amount the assets, financial sale for available For recognised. have been not would impairment the had been cost amortised the what exceed not does reversed is impairment the date the at investment the of the previously recognised impairment loss is revers and lythe be decreases decrease can related objective to an event occurring after the impairment was r of the revision and future periods if the revision affects both current and future periods. periods. future and current both affects revision the if periods future and revision the of in are the recognised period in which the estimate review assumptionsare underlying and estimatesThe estimates. these ar knowledge, that industry factors on other based and experts are with assumptions consultation associated and estimates The sources. other from apparent icagd cneld r hy xie Te differenc The derecognised and the consideration paid and payableis recognised expire. in netincome. they or cancelled liabilities discharged, financial derecognises Corporation The Key Sources Estimation of Uncertainty DerecognitionAssets Financial of Use of Estimates and Judgments Judgments and Estimates Useof Other Financial Liabilities Liabilities Financial Other The Federal BridgeCorporation Limited

Significant Accounting Policies (continued) oss previously accumulated in the investments revaluations gain revaluations investments thegain accumulated in oss previously able that an outflow of resources embodying economic benefits benefits economic that able embodying of an outflow resources Corporation; orwhen a present obligation arise has s probable that an outflow of resources embodying e is revised if the revision affects only that period only affects if is the revised revision Unless the possibility of an outflow of resources resources of outflow an of possibility the Unless ed at amortised cost using the effective interest method. method. interest effective the using cost amortised at ed mount of the obligation cannot be measured with suf with measured be cannot obligation the of mount ed through net income to the extent that the carryi the that extent the to income net ed through event, the Corporation has a present legal or cons is disclosed when a possible obligation has arisen from past past from arisen has obligation possible a when disclosed is , in a subsequent period, the amount of the impairm the of amount the period, subsequent a in , recognised in net income. On derecognitionrecognised On income. an netin of the contractual rights to the cash flows from the the from flows cash the to rights contractual the e considered to be relevant. Actual results may dif may results Actual relevant. be to considered e l Judgments l Judgments when, and only when, the Corporation's obligations obligations Corporation's the when, only and when, bten h cryn aon o te iaca liab financial the of amount carrying the between e ed on an ongoing an basis.on ed Revisions toaccounting est rying amounts of assets and liabilities that are no liabilitiesthatare and assetsryingamounts of , or in the period period the in or , asset expire. n from past past from n embodying embodying ng amount ecognised, ecognised, available- conomic conomic fer from from fer rom the the rom t readily readily t ent loss loss ent tructive tructive o make make o Page 18 imates imates ficient ficient ility ility are are

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES t s 55 is es lan an hese CGU t the

ainty. ul life terest there future Page 19 Page or other sets that utlined in expertsto amounts. statements ts usefuldifferslifets is involved in determining if there are circumstanc r r long-term employee benefits earned by employees i priate estimates to use to value employee benefit p ble ble assets and investments properties. A component e recoverable amount of a long-lived asset, CGU or , Management uses its judgment to determine the lity lity rates, as well as expected health care costs f in in actuarial calculations are based on long-term in tment properties are depreciated over their useful lives. long-lived long-lived assets, when circumstances indicate that lives. These estimates and assumptions could affec dit method prorated on service and Management’s bes es es and assumptions, including those with respect to and the future carrying value of assets. assets. of value carrying future the and forms impairment testing annually for intangible as intangible for annually testing impairment forms l Judgments (continued) (continued) Judgments l tes tes of future performance and fair values change. T atements are decisions made by Management, based on on recognised in future periods. e benefite liabilities. Management employs external essed at each reporting date. ime the decision is made. Judgments relate to appli cation of amount involves management judgment and estimation. judgment management involves amount and in determining the grouping of assets to identify their CGU omparison to the value of the entire asset and if i 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED accounting policies, and decisions related to the measurement, recognition and disclosure of financial of disclosure and recognition measurement, the to related decisions and policies, accounting Judgments Judgments included in the consolidated financial st analysis of relevant information available at the t Information about significant areas of financial estimation consolidated the in recognised uncertainty amounts the on effect and significant most the have that policies critical judgments in applying accounting are included below and in the statement notes relating to Determinations of critical items judgements will subject be reass to significant estimate uncert Property Property and equipment, intangible assets and inves Useful lives are based on management’s estimates of the periods of service provided by the assets as o Note Note 3. The appropriateness of useful lives of these assets is assessed annually. Changes to the usef indicatingthat testing forimpairment isrequired, determinations will affect the amount of amortisati of amount the affect will determinations The cost of other post-employment benefits and othe accounted for separately, if it is significant in c in significant is it if separately, for accounted from the other components. Long-LivedValuation Assets The Corporation performs impairment testing on its may be impairment. In addition, the Corporation per group to its carrying value. The ii)recoverable use, or in fair value value i) of: less amount higher as the defined is cost to sell. The determination of the recoverable The recoverable amount involves significant estimat In order to componentisation of establish property and equipment, intangi useful lives for these assets estimates would affect future depreciation expenses are not yet available for use. Management judgment cash inflows and outflows, discount rates and asset Corporation’s future results, if the current estima for the purpose of impairment of the purpose testing. for The Corporation assesses impairment by comparing th rates and can have a material effect on the employe the on effect material a have can and rates advise the Corporation when deciding upon the appro and expenses. obligations post-employment post-employment benefits only. Discount rates used actuarially actuarially determined using the projected unit cre estimate of retirement ages of employees, and morta Property andProperty Equipment, Intangible and Assets Investment Properties Employee BenefitEmployee Plans

4. 4. Critica and Uncertainty Estimation of Sources Key THE FEDERAL BRIDGE CORPORATION LIMITED Statements Financial Consolidated the to Notes ofthousands(in dollars) BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 56 4. Key Key Sources of Estimation Uncertainty and Critica 4. dollars) (in thousands of Notes to the Consolidated Financial Statements LIMITED CORPORATION BRIDGE FEDERAL THE Estimates are used for the provision using the cash oenet eiin lgl biain, dcmisoig iblt t acut o te eoiin cost the asset being of demolition cost demolished. the to the for capitalised be account will to costs liability recognised. Under these types of the demolition, decommissioningdemolition a obligation), (legal decision government siteas preparation costs. However, in the case wh the costs will demolitions, demolition be capitalis recognised as these types of demolitionsrequired do not tri to make an addition or improvement to an e reasonabl are ord options in renewal rent, the contingent thewhether as determine well as payment lease minimum the both considers Corporation The lease. incepti the at exercised be to assured reasonably e ar options renewal whether is ownership, of rewards ng whetherin determini judgment, theThe significant most leases. lease transfers substantially all of all of the riskspassedto lessee.the A lease classifiedfi a is andas rewardso of rewards and risks the of substantiallyall if assessing by oflease,operating or finance a ownershipis lease of thearrangemen leasing many to party is Corporation The as Leases and restore the site to its condition before those those before condition its to site the restore and The Corporation applies judgment in considering whe Decommissioning Liability thesing. cros relateto they as thecrossing of operator Cornwall the at judgmen operations, joint Management’s be to determined In arrangement. the of assets prtos i i cniee a on oeain y aaeet Ti jit prto i Sut t. Mari Ste. Sault in operation joint This management. by operation joint a subsidiary considered owned is wholly it operations, 100% a being operation SIBC discount rates used in the calculations. The Corporation’s Corporation’s The calculations. the in used rates discount for determination the in judgments and estimates assessed has management and obligation, the settle to oprto rgt o rsosblte t te asset the the to give responsibilities not does or agreement rights the Corporation However, expenses. and revenues related bridge the to share proportionate can the Corporation that although It determined was members of the Board of Directors are appointed by net the to rights have arrangement the of control joint have that parties the whereby arrangement an is venture obligati and assets, the to rights have arrangement in judgment applies Corporation the determined, is of returns the affect significantly that a activities of control joint has Corporation the if assessing Corpor the assessing in judgment applies Management Arrangements Joint Management’sleases. operating judgment,be to all of the Corporation’sconsidered are leases to be thistoway the due to structure be the agreemen of arrangementthirdw This significant TIBA.Corporationhavetheofassociatedoesnot influence as an Signifi TIBA. control jointly not does Corporation arrangemejoint a be to notjudged internationalwas thatpartner an thirdwitharrangement a isThere Bridge IslandsThousandInternational the a joint Corporation’s the on information Additional FBCL, and SSMBA between interdependency high the to functional currency due judged managementby is the Canadian dollar. however operation, foreign a considered arrangeme an is operation joint A venture. joint a The Federal BridgeCorporation Limited r substantially substantially r transfe lease the of terms the whenever lease nance the arrangement are collectively considered. Once collectivelyconsidered. arearrangementthe flows toestimated settle the present obligation, the time required ed to the cost of the new asset being a constructed assetswereconstructed. theIn instances where a ere an entire set of assets are being demolished as demolished being are assets of set entire an ere rrangements can be found in Note 6. ad iblte rcre o te iaca stateme financial the on recorded liabilities and s gger a legal or constructive obligation. Under the Under obligation. constructive or legal a gger set to the lessee. All other leases are classified are leases other All lessee. the to set n arrangement, the parties involved must determine if the the if determine must involved parties the arrangement, n t with the partner which gives the Corporation the rights to a a to rights the Corporation the gives which partner the with t (SIBC) and Sault Ste. Marie (SSMBA) crossings. Des crossings. (SSMBA) MarieSte. Sault and (SIBC) determining whether the arrangement is a joint oper joint a is arrangement the whether determining cantly this is derived from the fact that four of t l Judgments (continued) appoint three of the seven members, TIBA is not co not is TIBA members, seven the of three appoint ons for the liabilities, relating to the arrangemen the to relating liabilities, the for ons the US partner in the arrangement. arrangement. the in partner US the ther an obligation exists to dismantle and remove a remove and dismantle to exists obligation an ther ts, which requires Management to determine whether whether determine to Management requires which ts, relation to decommissioning liabilities at three locations. threeat liabilities locations. relation decommissioning to y assured to be exercised at the inception of the l he the of control joint have that parties the whereby nt ation’s status when it is party to joint arrangements. In In arrangements. joint to party is it when status ation’s itn st f ses n dcmisoig liability decommissioning no assets, of set xisting , due to the international agreement governing its its governing agreement international the to due , t, the Corporation has two arrangements that are are that arrangements two has Corporation the t, wnership have have wnership nd nd recognised demolition is is demolition the risks and and risks the joint control control joint as operating as a result a of a se types of of types se nts of the the of nts t. A joint as judged as he seven seven he on of the the of on nt as the the as nt nsidered nsidered pite the the pite ation or or ation ease. In In ease. n n asset, Page 20 er to to er e is is e s is is s the the is is BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES

57 n or ts the Page 21 gations ration is d SLSDC ies ies held-for-

es es that of gran SIBC a there agreement governing is ds ds beginning on or after January 1, 2018. The Corpo 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED

the operation of the Sault Ste. Marie International Bridge through a separate legal entity, the Sault Ste. Bridge Marie Authority (SSMBA) and for operational delivery by the International Bridge Authority (IBA), an entity of MDOT. The Corporation has the right to appoint 50% of the directors of the Board of SSMBA which directs the The Corporation has entered into an arrangement with the Michigan Department of Transportation (MDOT) f relevant activities of the Bridge and its operations, and the Corporation has concluded it has joint control Althougharrangementstructuredjointthevehicle, separateIBA.Corporationthe a is consideredas the purpose with and design of the arrangement and concluded that each of the parties have rights to the assets and obli for the liabilities of the joint arrangement and SSMBA has been classified as a joint operation. The consolidated financial statements of the Corporation include 50% SSMBA. of the assets, liabilities, revenues and expenses of the value option is applied. The treatment of embedded derivatives under the new standard is consistentwith is standard new IAS the derivatives embeddedunder 39 of treatment Theapplied. is option value and is applied to financial liabilities and non-derivative host contracts not within the scope of this standard. The effective date for this standard is for annual perio The following accounting standards are issued but not yet effective. Management is still assessing the potential impactsof thesestandards, however is not it expected to have these implemented until the effective dates. IFRS 9, Financial Instruments Financial39, IAS replace will and 2014, 24, July on IASB the by issued was 9”) (“IFRS Instruments Financial 9, IFRS asset financial a whether determine to approach single a uses 9 IFRS Measurement. and Recognition Instruments: is measured at amortised cost or fair value, replacing multiple rules in IAS 39. The approach in IFRS 9 is based on flow cash contractual the and model business its of context the in instruments financial its manages entity an how characteristics of the financial assets. Two measurement categories continue to exist liabilities in to IFRS account 9; fair for value ancial fin through profit or loss (“FVTPL”) and amortised cost. Financial liabilit standard. Companies can elect to use either a full or modified retrospective approach when adopting this standard this adopting when approach retrospective modified or full a either use to elect can Companies standard. evaluating currently is Corporation The 2018. 1, January after or on beginning periods annual for effective is it and the impact of IFRS 15on its consolidated financial statements. trading are measured at FVTPL, and all other financial liabilities are measured at amortised cost unless the fair currently evaluating the impact of IFRS 9on its consolidated financial statements. IFRS 15, Revenue from Contracts with Customers Customers with from Contracts Revenue 15, IFRS IFRS 15, Revenue from Contracts with Customers (“IFRS 15”) was issued by the IASB on May 28, 2014, and will Construction11,IAS18,Revenue, Contracts, replaceout IAS sets15 related interpretations revenue.and IFRS on are that contracts for except customers, with contracts all to apply that revenue recognising for requirements the control a uses 15 IFRS instruments.financial andinsurance contracts leases, on Standards the of scope the within based approach to recognise revenue which is a change from the risk and reward approach under the current each appoint 50% of the Directors, the Corporation concluded it has joint control of SIBC with SLSDC. Although the joint arrangement is structured as a separate vehicle the Corporation considered the purpose and design of liabilities the for obligations and assets the to rights have parties the of each that concluded and arrangement the statements financial consolidated The operation. joint a as classified been has SIBC and arrangement joint the of of the Corporation include 50% of theassets, liabilities, revenues and expenses of SIBC. Board of Directors of SIBC with the full power to manage the affairs of SIBC. Since the Corporation an (SLSDC) for operation of toll bridges across the St. Lawrence River between the City of Cornwall, Ontario, Canada Ontario, Cornwall, of City the between River Lawrence St. the across bridges toll of operation for (SLSDC) and Rooseveltown, New York, United States of America through a wholly-owned subsidiary of the Corporation, SIBC. Although the Corporation owns 100% of the shar The Corporation has entered into a joint operation with the St. Lawrence Seaway Development Corporatio

5. Policies Accounting in Changes Future THE FEDERAL BRIDGE CORPORATION LIMITED LIMITED CORPORATION BRIDGE FEDERAL THE Statements the Financial to Consolidated Notes (in thousands of dollars) 6. Joint Operations BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 58

8. Trade and Other Receivables Receivables Other and Trade 8. 7. Investments thousands of(in dollars) Statements Financial Consolidated Notes tothe BRIDGE THE FEDERAL

impaired. not but due past are that receivables Age of earn an average effective interest rate of 2.65%. of rate interest effective average earn an tomatu term The average 1.76%. of rate annual average days, Corporation’s deposit398 for the is certificates tomaturity term The average Total 91-120 days 121+ days 121+ 60-90 days As at March 31 March at As Trade receivables agencies and departments Federal As at March 31 March at As Held-to-maturity carriedinvestments at amortized cost Available for sale investments carried at fair value atfair carried investments Availablesale for As at March 31 March at As Total investments Total Long term portion Long term Deposit certificates Deposit Governmentof Canada bonds investments held-to-maturity Total Provincial bonds Provincial Less: Current portion bonds Corporate Total available for sale investments sale for available Total The Federal BridgeCorporation Limited CORPORATION LIMITED

rity for the Corporation’s bonds is 9.6 years, and they they 9.6 years,and Corporation’s bondsis for the rity

and earnsinterestatan

19,943 Page 22 7,685 14,174 14,174 14,003 2015 6,268 1,417 5,940 2015 5,769 1,208 2,149 2,412 2015 142 107 34 $ $ 1 $

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 59

Page 23 23 Page

(25) 2015 - 1,844 (32) 301,735 2015

- - - - $ $ - - $$ 1,740 26,158 26,158 24,418 26,158 391,186 26,158

89,451 87,632

389,370 1,848 - - 106 4,484 4,484 12,864 17,454 12,970 17,454

- - - - - 465 465 17,405 17,405 80,336

28%. The bridges The 28%. roadsand costs include decommissioning - - - 274 274 6,398 6,398 62,931 10,713 10,713 16,940 10,962 10,962 Vehicles 17,301 17,360 17,360 80,336 Vehicles

- - - - - 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED Bridges and Property Projects Bridges and Property Projects

(25)

(32) 91

- - - $$ $$ - - $$ $$ 17 Land Land Roads and Equipment Buildings Improvements in Progress Total Land Land roads and equipment Buildings Improvements in progress Total 188,162 48,114 48,114 CORPORATION LIMITED LIMITED CORPORATION 13,585 47,115 999 236,276

depreciation disposal of assets - corporations corporations Propertyand Equipment As at March 31 Balance, Balance, of end period Net Book Value, Net Book period of end 13,602 Accumulated Accumulated received Assets the from legacy Eliminated on Depreciation As at March 31 Balance, end period of 13,602 236,276

Cost received Assets the legacy from Additions Disposals Transfers Additions to land includes $17 of interest expense capitalised during the period. The weighted average capitalisationrate on borrowedfunds generally is 3. of $17,608of which have been fully depreciatedand buildingsthe include costsdecommissioning $1,681of in which $505 has been depreciated to date.

Notes to the Notes to Consolidated FinancialStatements 9. THE FEDERAL BRIDGE dollars)(in of thousands

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 60 11. Trade and Other Payables Payables Other Tradeand 11.

10. Intangible Assets and Investment Properties Properties andInvestment Assets Intangible 10. thousands dollars) of (in Statements Financial Consolidated the to Notes BRIDGE THE FEDERAL 31, 2015. 31, 2015. March at $821 to be determined been has property investment this of value fair total The investment property. of the value assessthe to technique valuation market the used has and location this of vicinity immediate the FBCL purchased aproperty in thelegacy pastsix months, Withinthe located. is property where the Is the Thousand at property investment the of Fair value this inve of fair value The total 2014. November in use into which came mechanical systems and its the building completion of costs incurredforthe construction acquisitions andfor actual property incurred expenditures on actual based determined was Ste. Marie Sault at property investment the of Fair value attached. systems themechanical as well as isin building that the region condition and of building,age, type the include value the fair determine to obsolescence. Theinputsused the deducting while building of the cost replacement the estimating by determined was property investment b has investmentproperty the of value The totalfair the na of because market in the transactions observable on been determined propertyhasnot the The forobsolescence. of adjusted value hasbeen and Price Index has and 2010 1, September at as determined was value location. fair The relevant the in properties of valuation the in experience recent and qualifications appropriate who isamemb valuator an independent by performed valuation a on based determined been has Bridge Water the Blue at property investment the of Fair value 2015. March 31, at investment vacant were properties No recognised. also was $245 of rent Contingent expenses. maintenance within reported was $9 expenses of Direct operating permits'. 'leases within and included amountsto$437 2015 31, for March Rental income commercialprop properties comprise Investment T Federal departments and agencies March31 As at As at March 31 March As at Balance, end of period Additions corporations legacy the from received Assets Cost Assets received from the legacy corporations legacy the from received Assets Accumulated depreciation Balance, end of period Depreciation expense Netbook value, endofperiod rade payables rade The Federal BridgeCorporation Limited CORPORATION LIMITED stment property has been determined to be $3,741 at March 31, 2015. 2015. March 31, at $3,741 to be property determined stment has been erties that are leased to third parties. parties. third to leased are erties that been extrapolated to March 31, 2015 using the Consumer usingthe Consumer March 2015 31, to extrapolated been lands International Bridge is only composed of the land land of the Bridge is only composed International lands een determined to be $20,561. The fair value of the the of value Thefair $20,561. be to determined een ture of the property and the lack of comparable data. data. of comparable lack the and property of the ture er of the Appraisal Institute of Canada and have have and of Canada Institute Appraisal the er of From this value, obsolescence has been deducted. deducted. has been obsolescence this value, From

Intangible Assets Assets Intangible 1,028 1,028 985 982 43 — 3 $$

Investment Investment Pro 11,120 23,882 20,468 10,898 p Page24 23,869 3,414 2015 3,293 erties 2015 121 222 13 $

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 61

92 otal Page 25 25 Page 2015 T 1,291 (4,987) 18,369 12,183 13,474

iii 4 - 681 681 250 250 435 435 685 685 Islands housand housand BC in ON), Cornwall, bears T

ii - 7 7 856 856 856 856 (195) 1,044 1,044 Ste. Marie

i $$ $ $ e g s on engineering estimates of timing, inflation, site 81 - e disposal of the existing North Channel Bridge are the demolition of the existing high-level bridge. The new Customs Plaza in Sault Ste. Marie. During the North North the construction of a new Customs Plaza in Lansdowne, (4,792) Brid 11,933 11,933 11,933 Channel Sault

6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED

CORPORATION LIMITED LIMITED CORPORATION Less: Current portion Long-term portion As at March 31 Liability received from the legacy corporations 16,644 Reductions arising from payments Balance at end of period Interest accretion interest at a rate which varies between 1.43% and 1.79% and is payable on demand. The carrying amount approximates its fair value. The amount owed SLSDC to the U.S. partner joint of the operations (relating to SI

estimation ofestimation liability decommissioning this depend costs availabilityconditions, of specialised workforce, and commodity prices thefor recycling of material. The estimated cash flows of $19,585 required to settle the decommissioning liability have been discounted using a rate that reflects market current assessments of the time value of money and the risks specific to the liability of 2.92% 3.04%.to thePer current project schedule, cash payments th for The Corporation has constructed a new low-level North Channel Bridge in Cornwall. Now newthat this bridge is circulation,open for the is proceeding Corporation with expected to occur in the 2015 and 2016 calendar years. These cash flows will be funded from government funding to be received at the time of demolition. The Corporation has also initiated construction of a construction of this new plaza the existing assets will be demolished. The estimates related to this liabilitydecommissioning depend on engineering variables such as timing, inflation, site conditions, and contractor scheduling. The estimated flows cash of $1,100 required to settle the decommissioning liability have been discounted using ratea thatreflects current market assessments of thetime valuemoneyof andthe risks specific to the liability of 2.68% to 2.86%. thePer current projectschedule, paymentscash for the demolitionof existing structures are expected to occur in the 2015, 2016, and 2017 calendar years. These cash flows will be funded from government funding to be received at the time of demolition. Additionally, the Corporation has initiated a project for at theOntario, Bridge. International ringDu Islands Thousand construction of the new plaza the existing assets willbe demolished. The estimatesrelated tothis decommissioning liability depend on engineering variables such as timing, inflation, site conditions, and scheduling. The estimatedcontractor cash flows of $700 required to settle the decommissioning liability have been discounted using a rate that reflects current market assessments of the time value of money and the risks specific to the liability of 2.70%. thePer current projectschedule, paymentscash for the demolitionof existing structures are expected to occur in the 2015 and 2017 calendar years. These cash flows will be funded from government funding to be received at the time of demolition.

i. ii. iii. 13. DecommissioningLiability 12. Due to Due 12. PartnerUS theof Joint Operations THE FEDERAL BRIDGE Notes to the Consolidated FinancialStatements (in of dollars) thousands

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 62 6 Loans Payable 16. Holdbacks 14. thousands of(in dollars) Statements Financial Consolidated Notes tothe BRIDGE THE FEDERAL 15. Deferred Revenue Deferred Revenue 15.

applicable to current construction works on the Nort the works on construction current to applicable are Suchholdbacks contracts. oftheindividual payholdbacksuponsubstantialcompletion Corporation to and warranty, rectification pertaining to its obligations fulfills latter the that toensure to contractors due total onthe amount an retains The Corporationtemporarily Installation and Toll Plaza Resurfacing projects at the Blue Water Bridge. Bridge. Water Blue the at projects Resurfacing Plaza Toll and Installation TollProgram the Electronic as well project,as Rehabilitation Customs Plaza Marie Ste. Sault project, the $5 million @ 3.28 % locked until March 15, 2018 15, March until locked % @3.28 $5million facility(b) Credit monthly payable 2021 27, July into locked % @4.42 $4million $3 million @ 2.85 % locked until July 27, 2019 27, July until locked % @2.85 $3million $4 million @ 3.81% locked until July 27, 2018 27, July until locked @3.81% $4million 2016 27, July until locked % @3.37 $4million facility term $15million (a) Total loans payable As at March 31 March at As Prepaid professional fees professional Prepaid Non-current prepaid facility rentals prepaid facilityCurrent rentals Prepaid commercial/commutervehicles Debit cards Passenger vehicles tokens/tickets vehicles Passenger Long-term portion Less: Current portion Current Less: As at March 31 March As at Total deferred revenue Long-term portion Current portion Less: The Federal BridgeCorporation Limited CORPORATION LIMITED h Channel Bridge, the Thousand Islands Customs Plaza IslandsCustoms Thousand the h ChannelBridge, correction of defects in work. The contracts call for the the callfor Thecontracts work. correction ofdefectsin

5,006 Carrying Carrying 2,142 1,402 1,004 2,142 2,864 Page 27 2015 17,572 18,191 384 72 2,681 4,634 3,623 3,651 3,602 2015 Cost 2 $ 619

$

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 63 2015 Total 1,259 1,259 1,259 1,259 1,259 19,428 25,723  $ 2015 Page 27 Page cost 3,999

74,739 70,740 74,739 Carrying

594 594 616 616 640 640 546 546 570 570 4,566 4,566 7,532 Interest Ž›’ƒ›‡–•‘ˆ͚͆͠‘˜‡”ƒ–™‡–›Ǧ›‡ƒ” ’ƒŽ‘––‘‡š ‡‡†ƒƒ–—”‹–›‘ˆ͚͝›‡ƒ”•Ǥ ‡ȋ‘–‡͙͟ȌǤ–ƒ” Š͙͛ǡ͚͙͘͝ǡ͙͆͛ǡ͟͝͝ Šƒ„‹Ž‹–ƒ–‹‘”‘Œ‡ –ƒ––Š‡ƒ—Ž––‡Ǥƒ”‹‡ ”‡†‹–‹•’”‘Š‹„‹–‡†–‘„‡—•‡†–‘ ‘˜‡” ƒ•Š ͚͙͘͝Ǥ‡”–Š‡‹‹•–‡”‘ˆ ‹ƒ ‡‹•–”— –‹‘ •–Š‡•ƒ‡•‡ —”‹–›ƒ•–Š‡ˆ—ŽŽ„‘†‹••—ƒ ‡ ƒ” Š͙͛ǡ͚͙͘͝ǡ͆͜ǡ͛͜͞‹’”‹ ‹’ƒŽ’ƒ›‡–•  ‹ƒ ‡ƒ•’ƒ”–‘ˆ–Š‡‘”’‘”ƒ–‹‘ǯ•„‘””‘™‹‰ ƒƒƒ†‹ƒ Šƒ”–‡”‡†„ƒ‹–Š‡–‘–ƒŽƒ‘—–‘ˆ –Š‡‡˜‡–‘ˆ–‡’‘”ƒ”› ƒ•Š†‡ˆ‹ ‹‡ ‹‡•”‡•—Ž–‹‰ –ˆƒ ‹Ž‹–›ˆ‘”–Š‡‡š–ˆ‹˜‡›‡ƒ”•ƒ†–Š‡”‡ƒˆ–‡”ƒ”‡ $$ $ 665 643 619 713 689 14,862 18,191 Principal

6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED ‡‘ˆ ”‡†‹––‘„‡—•‡†‹ ͘͘͘Ž‹   ’‡”‹‘†ǡƒ–ƒ‹–‡”‡•–”ƒ–‡‘ˆ͛Ǥ͚͠ά™‹–Šƒˆ‹˜‡›‡ƒ”–‡”Ǥ– ‹–‡”ƒ–‹‘ƒŽ„”‹†‰‡ǤŠ‡–‡”•ˆ‘”–Š‡”‡’ƒ›‡–‹ Ž—†‡‘–Š ”‡ƒ‹‡†‘—–•–ƒ†‹‰Ǥ ‘Ǧ —””‡–„ƒ•‹•™‹–Š’‡”‹‘†‹ ’ƒ›‡–•‘ˆ‹–‡”‡•–ƒ†’”‹ ‹ ˆ‹ƒ ‡’”‘’‡”–›ƒ “—‹•‹–‹‘•”‡Žƒ–‹‰–‘–Š‡ƒƒ†‹ƒŽƒœƒ‡ Š‹• ˆƒ ‹Ž‹–› ƒ””‹‡• –Š‡ •ƒ‡ •‡ —”‹–› ƒ•”‡ƒ‹‡††”ƒ™‘–Š‹•ˆƒ ‹Ž‹–›‹ˆ‘—”–”ƒ Š‡•Ǥ –Š‡ ˆ—ŽŽ „‘† ‹••—ƒ ȋ‘–‡͙͟ȌǤ‘–Š‹‰Šƒ•„‡‡†”ƒ™‘–Š‹•ˆƒ ‹Ž‹–›ƒ–ƒ” Š͙͛ǡ ‹ —Ž›͚͙͘͝ǡ–Š‹•ˆƒ ‹Ž‹–›™ƒ•”‡†— ‡†–‘͆͝ǡ͘͘͘Ǥ •Š‘”–ƒ‰‡•”‡•—Ž–‹‰ˆ”‘‘’‡”ƒ–‹‰Ž‘••‡•ǤŠ‹•ˆƒ ‹Ž‹–› ƒ””‹‡ ˆ”‘–Š‡–‹‹‰‘ˆ ƒ’‹–ƒŽ‡š’‡†‹–—”‡’ƒ›‡–•ǤŠ‹•Ž‹‡‘ˆ ͛Ǥ Š‡–Š‹”†ˆƒ ‹Ž‹–›‹•ƒ͆͝ǡ͘͘͘—•‡ —”‡†‘Ǧ”‡˜‘Ž˜‹‰–‡” ”‡†‹–ˆƒ ‹Ž‹–›–‘–ƒŽ‹‰͆͝ǡ͘͘͘–Šƒ–™ƒ•—•‡†–‘ ͚Ǥ Š‡•‡ ‘† ”‡†‹–ˆƒ ‹Ž‹–›‹•ƒ”‡†— ‹‰–‡”ˆƒ ‹Ž‹–›ǡ™Š‹ Š‘”‹‰‹ƒŽŽ›™ƒ•†”ƒ™ˆ‘”͙͆͝ǡ͘͘͘‘ƒˆ‹š‡†”ƒ–‡ǡ ͙Ǥ Š‡ˆ‹”•–ˆƒ ‹Ž‹–›‹•ƒ͙͆͝ǡ 2016 2019 2018 2017 Thereafter 2020  As at March 31 March at As As at March 31 Series 2002-1 bonds maturing Total Long-Term Bonds Payable Less: current portion July 9, 2027 payable semi- annually on January 9 and July 9 ’ŽƒǤ  Š‡‘”’‘”ƒ–‹‘ƒ‹–ƒ‹•–Š”‡‡•‡’ƒ”ƒ–‡ ”‡†‹–ˆƒ ‹Ž‹–‹‡•™‹–Š ͆͛͝ǡ͘͘͘ǤŠ‡•‡ˆƒ ‹Ž‹–‹‡•Šƒ˜‡„‡‡ƒ’’”‘˜‡†„›–Š‡‹‹•–‡”‘ˆ ”‹ ‹’ƒŽƒ†‹–‡”‡•–’ƒ›‡–•ˆ‘”–Š‡–‡”ˆƒ ‹Ž‹–›ƒ† ”‡†‹ ƒ•ˆ‘ŽŽ‘™•ǣ ͙͟Ǥ ‘†•ƒ›ƒ„Ž‡  ͙͞Ǥ ‘ƒ•ƒ›ƒ„Ž‡ȋ ‘–‹—‡†Ȍ 7+()('(5$/%5,'*(&25325$7,21/,0,7(' 1RWHVWRWKH&RQVROLGDWHG)LQDQFLDO6WDWHPHQWV LQWKRXVDQGVRIGROODUV   BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 64

17. Bonds Payable (continued) (continued) Payable Bonds 17. thousands of(in dollars) Statements Financial Consolidated Notes tothe BRIDGE THE FEDERAL v) The aggregate of all borrowings, subordinated debt and purchase money obligations does not exceed any any exceed not does obligations money and purchase debt borrowings, subordinated all of aggregate The v) iv) Except for borrowings arising as a result of movements in the termination values of swap agreements and and agreements swap of values termination in the of movements result a as arising borrowings for Except iv) ii) i) any Bondsoutstand for requirement isthe Below funding. government to are subject default of event in an Canada principal of Payment principal. its who is Canada right of in Majesty Her of and Corporation, obligations ofthe unconditional unsecured, and direct, The Bondsconstitute 2027. 9, July 2002-1, due semi-annually,Series payable Bonds, Revenue 6.41% $110,000, of The Corporationvalue face has at issued a od aal. bonds payable. in non-current included been FBCL have legacy the and BWBA theamalgamationoflegacy restructuring from bond the to related $360 costs of financing and bonds the of issuance the to related of $1,300 Financing costs Principal and interest payments for the bonds for forthebonds payments and interest Principal 2019 2018 2017 2020 T 2016 As at March 31 hereafter limitations on the amount of borrowings ou ofborrowings limitations ontheamount agreement. agreement. Ma at Indenture.As supplemental a pursuant to is it unless indebtedness additional any for liable become otherwise or assume incur, create, not shall the Corporation and any time at aggregate the in $2,000 exceeding not money obligations any purchase industry. the standards in am in such types and be maintained Insurance will theduedates. on paid be duly will The principalandinterest The Federal BridgeCorporation Limited CORPORATION LIMITED

ing or any obligations under the indenture: the obligations under ing orany tstanding imposed upon the Corporation. Corporation. the upon imposed tstanding the next five years and thereafter are as follows: as follows: are thereafter yearsand five next the Principal 51,860 74,739 5,191 4,863 4,557 4,269 3,999 ounts in accordance with sound business practices and ounts in of and interest on the Bonds by Her Majesty in rightof in Her Majesty by theBonds of andintereston $$$ rch 31, 2015 the Corporation has no active swap swap no active has the Corporation 2015 rch 31,

Interest 14,786 36,337 3,695 4,329 4,617 4,023 4,887

Page 28 111,076 66,646 8,886 8,886 8,886 8,886 8,886 Total 2015 BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 65

Page 29 29 Page $ (87) 564 6,119 1,096 2015 6,564 7,128

(the Plan). Under the Plan, the as disclosed in Note 3.as disclosed in Note n’s financial results. The actuarial actuarial The results. financial n’s d inflation. to The ofportion Corporation’s pension changes in discount rates, mortality rates, per capita post-employment benefits to its eligible employees s of earnings. Thebenefits are coordinated with ed contributions basedemployer aon multiple of the currentareservice charged incometo are services as ssistanceprogram wellas other as long-term benefits operate and administer an employee pension plan. Public Service Pension Plan n’s portion of pension contributions amounted to $91. ion’s pension contributions amounted to $53. ral contribution rate effective at year end was a multiple of 1.28. The can cause volatility in the Corporatio 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED $8 during the period. the during $8 CORPORATION LIMITED LIMITED CORPORATION

Less: Current portion Current Less: portion Non-current As at March 31 at March As Balance, end of period of end Balance, Amortisation of deferred capital funding Government funding for capital expenditures received expenditures capital for funding Government Liability received from the legacy corporations the legacy from received Liability the Consolidated Statement of Financial Position as as Position of Financial Statement on the is Consolidated recorded This of Canada. funding Government deferred capital funding for the amount of depreciable property. The recognition of deferred this capital funding in net income is limited each period to the same rates of depreciation Deferred Capital Capital Deferred Funding received, and continues projects the CorporationFor certain major capital has funding to receive, from the Additionally, employees of SIBC are enrolledin the Employees of the Corporation may voluntarily pension subjectjoin the plan, to eligibility requirements. The pension plan, which is a defined-contribution pension is plan, funded on a basis money-purchase with members contributing up to 6.5% of their annual earnings. In accordance with the theplan, required Corporation is to fund matching contributions, withsome eligible employees receiving double contributions. matching As be discussed in Note 1, the Corporation will revising the employer and employee contributions as required by noted directive. During the year, the Corporat PensionBenefits The Corporation has contracted two outside firms to which consist of service awards. Benefit costs related to Benefit awards. service of consist which Other than the pension plan, the Corporation provides Canada/QuébecPlanPension benefitsand they are indexe contributions amounted The employees of SSMBA participate in the State of Michigan’s defined benefit and defined contribution plans. requiredis SSMBA to make contributions to the defined benefit plan based anon actuarially determined rate. theFor definedcontribution plan, SSMBA is required to contribute 4.0% of payroll plus upto an additionalmatch 3.0%. of The contribution requirements of the plan members andSSMBA are established andmay be amended by state legislation. During the year, the Corporatio OtherBenefits health,through dental,life insurance andan employeea rendered. The risks associated with these benefits include employees’ required contribution. The gene Government of Canada holds a statutory obligation for the payment of benefits relating to the Plan. Pension benefits generally accrue up to a maximum period of 35 years at an annual rate of 2% of pensionable service times theaverage of the best five consecutive year claim costs and general inflation that President of the Treasury Board of Canada sets the requir 31, 2015.Marchat valuation was performed as Notes to the Notes to Consolidated FinancialStatements 18. THE FEDERAL BRIDGE dollars)(in of thousands 19. Employee Benefits

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 19. thousands of(in dollars) Statements Financial Consolidated Notes tothe BRIDGE THE FEDERAL 66 Changes in other comprehensive income during the period: period: the comprehensive incomeduring Changes inother Post-employment expense recognised net in Actuarial loss - demographic assumptions Other - gain Actuarial cost Interest Current service cost Benefits paid Corporations legacy the from received Liability Defined benefit obligation benefit Defined 31 March at As Balance, end of period end of Balance, Other comprehensiveincome year the during arising losses Actuarial Net post-employment expense recognisedperiod in Interest cost Currentcosts service As at March 31 March at As As at March 31 MarchAs at

The following table sets forth the status of th of the status forth sets table Thefollowing

Employee Benefits (continued) Benefits Employee The Federal BridgeCorporation Limited CORPORATION LIMITED

income during the period is as follows: follows: isas period the during income e post-employment non-pension related benefit plan: plan: non-pensionrelatedbenefit e post-employment

employment

employment

Post- 85 44 41 7,454 7,147 Post- (178) 415 (15) 44 41 Page 30

$$ (237) 2015 (237)

long-term long-term $ Other Other 2015 2015 (12) 77 88 (1) 11 - 2 1 1 $

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 342 67 (334) 2015 2015 1,836 1,655 (1,382) (1,276) 3.70% 3.70% 2.00% 4.50% 2.50%

Page 32 32 Page CPMPublic Table generational improvements using CPM Scale B Scale CPM using improvements actuarial calculations and has identified the following the identified has and calculations actuarial ing the Corporation’s accrued benefit obligations and obligations benefit accrued Corporation’s the ing of the actual change in the defined benefit obligation unlimited number of shares without par value. The r in isolation of one another, as some of the assumptions assumptions the of some as another, one of isolation in r 2015 is 7.3% per annum decreasing linearly to 4.5% per 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED

CORPORATION LIMITED LIMITED CORPORATION The significant actuarial assumptions adopted in measur in adopted assumptions actuarial significant The benefitnet plan expenseare follows:as Asat March 31 As at March 31 Discount rateincreaseDiscount - % 1 of Discount ratedecrease - % 1 of Futuremortality - increaseof year1 age Future mortality - decrease of 1 year age rates Trend - increase % of 1 % 1 of decrease - rates Trend Weighted average assumptionsas at: Discount Rate, accruedbenefit obligation cost benefit Rate, Discount rates: escalation costs claims capita per Estimated inflation General care vision and Dental program assistance Employee Mortality rates Corporation hastwoCorporation issuedand fully paidshares. The Corporation’s articles of incorporation authorise an The The assumed health care inflation rate as of March 31, in 2022/2023the annum year.fiscal Expected benefits to be paid regarding the post-employment benefit plans for the year end March 31, 2016 are $110. averageThe expected maturity ofthe plan obligation is 22 years. Sensitivity Analysis the in used assumptions the reviewed has Corporation The assumptions as those that could result in a significantinimpactthedefineda result obligation: as on could benefit those assumptions that as it is unlikely that a change in assumptions would occu would assumptions in change a that unlikely is it as may correlated.be The sensitivity analysis above may not be representative

19. Employee Benefits (continued) THE FEDERAL BRIDGE (in of dollars) thousands Notes to the Consolidated FinancialStatements

20. Capital Issued BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 68

2 RelatedTransactions Party 22. Information Expense Supplementary 21. thousands of(in dollars) Statements Financial Consolidated Notes tothe BRIDGE THE FEDERAL corporation. of the the activities and directing controlling forplanning, responsibilities and authorities the who have the Boardof as are defined personnel Key management statements. financial consolidated in these been reflected not have which charge no at audits, statement financial suchas services, also receives Corporation The parent $nil. payable accounts and parties, with related receivable accounts $nil in operations recorded joint 31, 2015,the $nil. AtMarch of government funding and During the period, the joint operations incurred expenses expenses incurred operations joint the period, the During $186. payable accounts and parties, related with accounts receivable AtMarc of$5,210. governmentfunding revenue, and parent Corp period, the During the ON. Cornwall, in facility aCBSA of construction to the government related entities revenue from related government with expenses incurred of The nature 27. inNote explained as value the carrying at received were and liabilities assets as these amalgamation of the as part received and liabilities of the assets exception the with fair value at are measured These operations course ofbusiness. in thenormal theseentities with transactions corporations. TheCorporationentersinto Crown Government agencies of Canada, and all to terms ofcommonownership The Corporationisrelatedin below. disclosed are parties related andother Corporation the between transactions of Details 7. Note disclosed in are investments certificates and deposits bonds government 21, and Note disclosed in are benefits to employee relating transactions party note. Related inthis disclosed andarenot on consolidation eliminated been have operations joint its share of its and Corporation the transactions between and Balances th for Income ofComprehensive Statement ofexpenses breakdown the show tables The following Compensation of Key Management Personnel Personnel Management of Key Compensation Transactions with Government Related Entities Entities Related Government with Transactions Depreciation of intangible assets Loss on disposal of assets Professional services Professional Depreciation of investment property of investment Depreciation Repairs and maintenance services and Goods Salariesand employee benefits equipment and property of Depreciation Total Expenses Total Two-Months 31 EndedMarch The Federal BridgeCorporation Limited CORPORATION LIMITED oration incurred expenses totaling $2, and recorded revenue, deferred $2, revenue, andrecorded totaling expenses incurred oration is largely in the form of governme the largely in is e two-month period ended March 31, 2015. 31, 2015. March two-month ended period e h 31, 2015, the parent Corporation recorded $6,004 in in Corporationrecorded$6,004 parent 2015,the h 31, Directors and members of the senior executive teams teams senior and of executive the Directors members totaling andrecorded $nil, totaling by nature for each function on theConsolidated each function by naturefor entities consists of training costs. The nature of The nature costs. oftraining entities consists nt funding, as well as fees related related fees as well as funding, nt revenue, deferred revenue, deferredrevenue, revenue,

Page 32 5,186 1,191 1,595 1,844 2015 109 121 316 3 7 $ BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES

69

$ $ 9 2015 13 1,120 2,392 1,467 4,979 116 138 2015 Page 33 33 Page

ingent rent, based on sales at these Duty Free Shops, ication ication date of these statements. It the is opinion of e Corporation, and its partners, also act as thelessors the claimant or defendant or is involved in certain the Blue Water Bridge crossing has also paid for the rporation from these lessees. One of these stores also , the , legallong-term onproceedings matter,this which n, as often dependsit outcome on the of specific events Seaway International Crossing. The SeawayInternational amount of Crossing. the claim d revenues. Transport Canada has assumed responsibility well as spacerenting bridgesthe on at twofor crossings matters will not result in materialany liabilities to the Corporation. The 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED the non-cancellable lease term. non-cancellable lease term. the

CORPORATION LIMITED LIMITED CORPORATION Total Two-Months Ended March 31 March Ended Two-Months Short-term employee benefits employee Short-term Wages benefits other post-employment and Retirement As 31 March at As Within one After one but year not more than five than five More Total for four Dutyfor Free atShops three itsof as crossings, space in the Corporation buildings at various crossings. Th natural gas lines and telecommunications companies. Cont ofexpansion the building. This payment was recorded as deferred revenue and is recognised revenueas on a straight-line basis, amortised over is the largest component of the rent received by the Co has asmaller fixed component of its rent. Contingent revenue recognisedduring the current period for these stores was $234. The lessee of the Duty Free Shop at including, including, but not limited to, the length of legal proceedings. isFBCL The named as adefendant jointly severallyand with its subsidiary corporation SIBC and Her Majesty in regards itsto mandatefor the collection of tolls at the have spanned decades, ofand the basis inclusion of elements of bridge tolls and revenues must also be deliberated. In the normal normal the itsIn of course activities, Corporationthe is timing of cash outflows related to the claims is uncertai accountingto subject million, $50 is bridgefor an tolls SIBC and FBCL are its agent parent Crownto defend corporation corporations in theiragainst own the claim. rights and, with respect to this claim, they are being sued for taking actions that they are mandated to take as agents of Her Majesty. The outcome, timing and amount of any settlement of this claim cannot be determined this at timedue to uncertaintiesprimarily related to resolution the of separatea land claim by samethe party Also against MajestyHer that must considered.be first pendingclaims or lawsuits. To the extent that a futureevent is likely to occur, and areasonable estimate of the loss can be made, an estimated liability is accrued and an expense is recorded in the consolidated financial statements. At March 31, 2015, there were six claims made by current and former employees against the Corporation, three of which have been settled by the publ management that the settlement of such Compensation of key managementpersonnel was as follows: Related Party Transactions (continued) Party Transactions Related The Corporation has entered into entered has contracts with fifteenCorporation The customs logisticstwo and brokers rentwho companies The future minimum rental receivable under non-cancellable operating leases are as follows:

24. ContingentLiabilities Notes to the Notes to Consolidated FinancialStatements 22. THE FEDERAL BRIDGE dollars)(in of thousands 23. Facility RentalsFacility 23. BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 70

25. Commitments for Expenditure for Expenditure Commitments 25. thousands of(in dollars) Statements Financial Consolidated Notes tothe BRIDGE THE FEDERAL

agreements for amounts totaling $27,731. $27,731. totaling amounts for agreements forma principally commitments Corporationhas a) The Total commitments for office spacTotal commitments follows: as are years, contracts,in and other administrative, projects, maintenance, forcapital Total commitments termination. of rights Corporation’s contractual the to subject year. Disb one over periods beyond services and for goods agreements intocontractual enters Corporation the business, of course normal the b) In More than five than More five than more not but year one After Within one More than five than More five than more not but year one After Within one As at March 31 March at As Total As at March 31 March at As Total exercised, which has $338 in remaining payments. payments. remaining in has$338 which exercised, spac for office lease There remains 13months ofa 2015. March 31, at $142 which total outstanding The Corporationhasadministrativecontracts 2015. March31, at commitmentof$609 outstanding havean contracts andotherawarded Maintenance $26,642. of commitment with anoutstanding equipment Capital Capital as contracts project been awarded at have The Federal BridgeCorporation Limited CORPORATION LIMITED

e, in years, are as follows: follows: areas years, e, in ursements largely depend on future volume-related requirements and are and are requirements volume-related on future depend ursements largely intenance and constructionintenance and and rental contracts, e, with a renewal option, which has not yet been been yet whichhasnot option, a renewal e, with March 31, 2015 for the purchase of property and and property of purchase the for 2015 31, March

27,393 24,027 3,366 2015 2015 338 312 26 — — $ $ Page 34 34 Page

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 71 Level Level 2015 2015 Level 1 Level Level 1 Level 2 Level 2 Level Level 2 Level Level 1 Level Level 1 Level 2 Level 2 Level Level 2 Level Page 35 35 Page Page 35 35 Page 5,769 1,826 5,769 1,826 14,174 18,191 74,739 14,174 18,191 74,739

$ $ $ $ lents, available-for-sale lents, available-for-sale Value Cost Value Cost 5,769 1,826 5,769 1,826 18,220 95,076 14,383 18,220 95,076 14,383 l Position for its financial assets l Position for its financial assets d 81% of the total amount due. d 81% of the total amount due. risk on risk cash, equiva cash risk on risk cash, equiva cash ying value due to the short-term nature of these ying value due to the short-term nature of these accounts receivable sinceminimised is portionlarge a of accounts receivable sinceminimised is portionlarge a of ult on its obligationson inult resulting contractual financial loss ult on its obligationson inult resulting contractual financial loss d otherd the d an holdback, payables, portioncurrent the of d otherd the d an holdback, payables, portioncurrent the of

6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED s Consolidated Statement of Financia Statement s Consolidated s Consolidated Statement of Financia Statement s Consolidated s at an investment grade “A” or equivalent. Management believes the risk s at an investment grade “A” or equivalent. Management believes the risk cash equivalents, and available-for-sale investments is reduced substantially cash equivalents, and available-for-sale investments is reduced substantially governmental departments comprise governmental departments comprise

fair value on a recurring basis fair value on a recurring basis CORPORATION LIMITED LIMITED CORPORATION CORPORATION LIMITED LIMITED CORPORATION Available-for-sale investments Available-for-sale Due to US partner of joint operations Loans payable Loans payable Bonds Held-to-maturity investments Held-to-maturity Available-for-sale investments Available-for-sale Due to US partner of joint operations Loans payable Loans payable Bonds Held-to-maturity investments Held-to-maturity As at MarchAs at 31 Financial instrumentsFinancial measured at Financial instrumentsFinancial measured at amortised costs Financial instrumentsFinancial measured at As at MarchAs at 31 Financial instrumentsFinancial measured at amortised costs Fair ValueFair Credit Risk Credit The fair values of held to maturity investments are quoted from active trading markets for identical assets. The Corporation manages by risk this dealing members of the Canadian only with Payment Association or the monitoringclosely by and Government the issuance creditof collection and commercialto carrying The clients. amount reported on the Corporation' cash surpluses in low-risk instrument of loss is not significant. The credit risk associated with the isamount owed from federal government generally departments within 90 days. As at March 31, 2015, accounts receivable from federal The fair valuesfair The tradeof and other receivables, trade an loans payable and bonds payable approximate their carr instruments. valuesThe carrying and and assets financial fair liabilities values listed are thein of Corporation’sthe remaining following table: Credit risk refersrisk Credit theto thatrisk counterparty willdefa investments, and trade and other receivables. A discounted cash flow method, using a factored rate equal to the prevailing market rate of interest for loans and debt bondshaving similar terms and conditions, was usedto determine thefair value of theloans payable bonds payable. and to the Corporation. The Corporation is subject to credit exposed netexposed credit risk, to of any applicable provisions the maximum represents for losses, amount exposed to credit risk. The credit risk is not significant for the Corporation. The credit risk associated with cash, thatensuring by surplusescash investments.liquid highly in invested are is policy Corporation's The investto Fair ValueFair Credit Risk Credit The fair values of held to maturity investments are quoted from active trading markets for identical assets. The Corporation manages by risk this dealing members of the Canadian only with Payment Association or the monitoringclosely by and Government the issuance creditof collection and commercialto carrying The clients. amount reported on the Corporation' cash surpluses in low-risk instrument of loss is not significant. The credit risk associated with the isamount owed from federal government generally departments within 90 days. As at March 31, 2015, accounts receivable from federal The fair valuesfair The tradeof and other receivables, trade an loans payable and bonds payable approximate their carr instruments. valuesThe carrying and and assets financial fair liabilities values listed are thein of Corporation’sthe remaining following table: Credit risk refersrisk Credit theto thatrisk counterparty willdefa investments, and trade and other receivables. A discounted cash flow method, using a factored rate equal to the prevailing market rate of interest for loans and debt bondshaving similar terms and conditions, was usedto determine thefair value of theloans payable bonds payable. and to the Corporation. The Corporation is subject to credit exposed netexposed credit risk, to of any applicable provisions the maximum represents for losses, amount exposed to credit risk. The credit risk is not significant for the Corporation. The credit risk associated with cash, thatensuring by surplusescash investments.liquid highly in invested are is policy Corporation's The investto

26. 26. Instruments Financial THE FEDERAL BRIDGE Notes to the Consolidated FinancialStatements (in of dollars) thousands

26. 26. Instruments Financial THE FEDERAL BRIDGE Notes to the Consolidated FinancialStatements (in of dollars) thousands

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 72

6 Financial Instruments (continued) 26. thousands dollars) of (in Statements Financial Consolidated the to Notes BRIDGE THE FEDERAL

Minister of Finance. securities in accordance with the policies approved by Board the of Directors and in line with guidance from the prices caused by factors specific to prices an specific caused factors by Price risk is the risk that investments the value will as of fluctuate available-for-sale a result of changes in market $166. Comprehensive was Income exchange foreign the 2015 31, March ended period month th assessed has Management applicable. where dollars Canadian to balances account bank US converting by and versa vice and rate Canadian the with impact on the Corporation’s results. The Corporation manage ex average the in variation 3% hypothetical A crossings. The Corporation foreign is exchange to currency subject rate value would not impact the net income of the Corporation fair the in change a However rates. fixed at interest bear also payable bonds and payable loans facility, Credit material. be would not 2015 31, March at rates interest in variation 1% hypothetical a of impact The rate. interest market the of fluctuations maturity of to 9.6 term average and an pr Canada, of Government the of bonds Available-for-sa rate. fixed a at interest bear investments available-for-sale Certain not material. would be 2015 March 31, at interest rates A in variation 1% changes in market interest rates. The Corporation is subjec to due fluctuate will instrument financial a of flows cash future or value fair the that risk the is risk rate Interest risks. these of all to exposed risk. is The risk price Corporation rate and of risk, risk: interest currency ch from results on impact an of risk the is risk Market Risk Market Maximum risk resulting from financial instruments is equivalent to their fair value. value. fair their to is equivalent instruments financial from risk resulting Maximum oprto mngs h rs b etbihn bdes mitiig cash Co The disbursements. maintaining planned The due. budgets; fall they establishing as obligations by its establishing cash forecasts and monitoring cash flows as well as meet matching terms risk of investments to the timing of to able the be not manages will Corporation Corporation the that risk the is risk Liquidity The following table presents a maturity analysis of the Corporations financial liabilities based on the expected expected the on based liabilities financial Corporations the of analysis maturity a presents table following The The amounts are the contractual undiscounted cash flows. flows. cash undiscounted contractual the are The amounts date. maturity contractual the to Position Financial of Statement Consolidated the of date the from flows cash Liquidity Risk Holdbac Long-term debt payable Long-termdebt T T As at March 31 Due to US partner of the joint operati joint the of partner US to Due otal rade and other payables k The Federal BridgeCorporation Limited CORPORATION LIMITED rporation invests surplus cash in high in cash surplus invests rporation investment, its investment, issuer, or all factors affecting a mark

years. The fair market value of these instruments is indirectly affected by by affected is these indirectly instruments of value The fair years. market ovincial governments, and corporate banks with fixed rates of interest interest of rates fixed with banks corporate and governments, ovincial o e currency risk as not significant for the Corporation. During the two- the During Corporation. the for significant not as risk currency e

150,821 Carrying Less than 3 months 3 than Less Carrying 136,799 amount 3 months to 1 year to1 months 3 amount 11,120 1,076 1,826 $$ $ anges in market prices. Market risk comprises three types three comprises risk Market prices. market in anges change rate during the year would not have a material material a have not would year the during rate change t to interest rate risk on it as as the Corporation holds the liabilities until maturity.

nsolidated Statement of Statement Co nsolidated the in recognised gain risk on tolls collected in US dollars at international dollars international at US in tolls risk collected on s this risk by periodically 9,838 9,488 315 credit quality governqualitycredit - 35 reserves and credit facilities, facilities, credit and reserves 126,654

s cash and cash equivalents. le investments also include also investments le adjusting the US toll rates 12,140 9,830 1,269 1,041 et or market segment. or market segment. et - ment and corporate and ment

128,843 1 Page36 1,826 2015 Over Over y 363 - ear BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 73 Page 37 37 Page mulated other comprehensive comprehensive other mulated feguard its ability to continue as a going concern, to , the legacy FBCL prepared its consolidated financial corporations’ statements of financial position, starting Accounting Accounting Standards (“PSAS”) and BWBA applied IFRS. that the Corporation can borrow is $130 million with ngs, share capital and accu and capital share ngs, rporation as oftherporationas date amalgamationof and (ii) recognitionthe of the s received from legacy Corporations 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED

CORPORATION LIMITED LIMITED CORPORATION Capital Management income. income. As per legislative authorities, the maximum amount approval. Finance of Minister The Corporation’s objectives in managing capital are to sa and objectives.mission to fulfilits and base asset its fund As stated in Note 2, the amalgamation of legacy FBCL with legacy BWBA on February 1, 2015 involved, among Co new a of(i)creationthe things, other amalgamation of date the at as value carrying their at corporations legacy the from received liabilities and assets in the new Corporation’s financial statements. Previously The Corporation defines its capital as its retained earni retained its as capital its defines Corporation The statements in accordance with Canadian Public Sector The carrying values of the assets and liabilities received have been adjusted, where applicable, at the amalgamation date of to comply with IFRS and adoptedby theCorporation. to align with the accounting policies, methods and assumptions Presented here is a reconciliation of each of the legacy from their latest published audited financial statements, incorporating all the operating results from the date immediately following the latest published audited financial statements to the date immediately prior to the amalgamation.

27. liabilitie and assets of Accounting Notes to the Consolidated FinancialStatements 26. (continued) Instruments Financial THE FEDERAL BRIDGE (in of dollars) thousands

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 74

27. Accounting of assets and liabilities received from legacy Corporations (continued) (continued) Corporations legacy from received liabilities and assets of Accounting 27. thousands of(in dollars) Statements Financial Consolidated Notes tothe BRIDGE THE FEDERAL ** The restatement of prior period errors relate to: ** Therestatementofpriorperioderrorsrelateto: SMRBC. from received values thecarrying to adjustments no therewere sharesofSMRBC, the %of 100 previously owned FBCL legacy Since 2015. 27, January on took place SMRBC and FBCL legacy between amalgamation * The

Priorperiod adjustments ** (i) and (ii) Increasein portfolio investment remeasurement in Increase foreign exchange remeasurement Net operating surplus Governmenttransfers International Thousand Islands Bridgeexpense Administration expense Operations expense Maintenance expense Total Revenue ACCUMULATED SURPLUS, January 31, 2015 31, January ACCUMULATED SURPLUS, ACCUMULATED SURPLUS, March 31, 2014 (restated) 2014 31, March ACCUMULATED SURPLUS, reported) previously (as 2014 31, March ACCUMULATED SURPLUS, TOTAL ASSETS NON-FINANCIAL FINANCIAL ASSETS FINANCIAL LIABILITIES TOTALFINANCIAL ASSETS NON-FINANCIAL ASSETS NET DEBT TOTAL LIABILITIES Prepaid expenses T Cash and cash equivalents Federal departments and agencies Accounts receivable Restricted cash Federal departments and agencies liabilitiesAccounts payable andaccrued Portfolio investments Other Deferred revenue Credit facility Asset retirement obligation Employee future benefits Holdback 852 Due to agovernment partner Other ** (ii) angible capital assets ** (i) (ii) (i) surplus was decreased by the same amount. same amount. the by decreased surplus was accumulated the and $447 by increased was balance payable accounts 2014 31, March the result, As a expensed. being than rather payable accounts against applied was NCB in 2009 the closure of the managing of assistance the in Government Canada of by the provided the funding A portion of by$3,314. decreased were surplus accumulated and capital assets of tangible amount carrying 2014 31, March the result, a As used. being NCB ceased old the when ofta aspart was capitalized that The remaining unamortized asset retirement cost re retirement unamortized asset The remaining The Federal BridgeCorporation Limited CORPORATION LIMITED ngible capital assets should have been derecognized by January 2014 2014 January by derecognized been have should assets capital ngible (restated)** 2014 March 31, 80,807 1111,4 96,296 15,145 81,151 30,094 77,046 34,199 (3,761) 415 506 (9,151) (5,046) (4,105) 17,869 13,813 80,978 4,820 1,644 4,900 3,872 1,565 9,035 4,635 374 781 173 133 Legacy FBCL -PSAS FBCL Legacy 31, 2015activity * April 1,2014- Jan. lated to the Cornwall North Channel Bridge(NCB) theCornwallNorth lated to 00987,145 10,099 211 32,038 (2,161) 727 22,887 (7,207) 11,445 13,159 50696,054 15,076 (5,704) (1,394) (3,881) 171 3,139 - (1,761) (1,565) 382 - (3,872) 420 4,765 (4,270) (4,349) ,8 5,819 1,184 9,276 14 4,666 (154) 40 13,413 (400) 489 0 18,369 500 8 1,570 789 0 1,848 204 334 6)311 (63) 9242 69 5887 35 138 5 2015 January 31,

Page 38 BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 75 Page 39 39 Page

46 - 376 238 271 425 2,136 6,200 2,303 2,741 3,999 7,235 1,692 9,128 13,204 70,740 15,174 16,835 21,988 142,505 203,776 244,948 102,443 244,948

7 6 (7) 86 58 202 156 246 610 (850) (437) (178) (124) (181) (870) (508) (621) (252) (787) (225) (787) 1,612 1,175 4,936 2,303 4,123 (2,311) (1,505) (2,371) (6,506) (2,267) (2,580) 11,384 (1,962)

Legacy BWBA - IFRS BWBA Legacy September 1, 2014 Jan. 31, - 2015 activity 31,2015 January 39 - 213 500 419 419 6,625 1,934 2,495 3,913 6,506 2,313 9,353 13,382 73,111 16,679 17,865 141,330 204,646 104,405 245,735 245,735

August 31, 2014 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED

CORPORATION LIMITED LIMITED CORPORATION Accountingof assetsand liabilitiesreceived from legacy Corporations(continued) General and administrative and General Maintenance and other expensesother and Maintenance property investment of Depreciation assets intangible of Depreciation losses actuarial OCI - 31, January 2015Retained Earnings, Net income - bridge operations - bridge income Net AND EQUITY LIABILITIES TOTAL Depreciation of property, plant and equipment plant property, of Depreciation debt long-term on Interest Salaries, wages and benefits wages Salaries, Total revenue Total Non-current loans payable loans Non-current Non-current bonds payable bonds Non-current EQUITY Retained August 31, Earnings, 2014 Total liabilitiesTotal Trade and other receivables Prepaid expenses Prepaid Total currentassets Investments Property, plant equipment and plant Property, Intangible assets assets Intangible Deferred revenue Current portion of loans payable loans of Current portion payable bonds of portion Current Total currentliabilities benefits Employee Non-current deferredNon-current revenue ASSETS Current 15,682 Cash Investments1,264 Investment properties properties Investment funds Restricted Holdbacks payable TOTAL ASSETS TOTAL LIABILITIESAND EQUITY Current Trade and otherpayables

27. THE FEDERAL BRIDGE dollars)(in of thousands Notes to the Notes to Consolidated FinancialStatements

BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES

Total equity and liabilities and equity Total Current assets ts Asse Equity Non-current liabilities Non-current Non-current assets Non-current Total assets Total Current liabilities Current Liabilities Deferred funding capital urn oto fbn aal - liabilities current Total ofpayable bond portion Current Total equity Total - payable of loan portion Current Deferred revenue liabilities Decommissioning Holdback 887 Holdback Deferred capital funding funding Deferred capital payable Bonds Total assets current 13,413 Investments equivalents cash and Cash Prepaids Accumulated other comprehensive income comprehensive other Accumulated operations joint of the partner US to Due Retained earnings Retained Total non-current liabilities non-current Total liabilities Decommissioning Deferred revenue payable Loan Trade and other receivables receivables Trade other and Employee benefits Employee Property and equipment and Property Total non-current assets non-current Total assets Intangible property Investment Employee benefits Employee Investments Trade and other payables payables Trade other and 76

7 Accounting of assets and liabilities received from legacy Corporations (continued) 27. dollars) (in thousands of Notes to the Consolidated Financial Statements LIMITED CORPORATION BRIDGE FEDERAL THE

wer that values amalgamation: carrying the and position financial stat 2015 31, corporations’January legacy thereconciliationbetween a isfollowing The Corporation.the align to order in adjusted were values carrying Upon amalgamation, the legacy FBCL’s carrying value The Federal BridgeCorporation Limited shown aboveshown

31, 2015 as as 2015 31,

As at Jan. Jan. at As 119,183 119,183 27,372 87,145 18,369 23,129 85,839 96,054 96,054 4,765 4,666 4,666 1,848 1,306 4,709 5,819 311 242 138 ------$ $ $ $ $ $ $ $ $ $ $ $ $

iii

i iii v 91,843 iv, v

iv i ii ii vi v i86,308 v, vi

adjusting adjusting Legacy FBCLLegacy nre Notes entries IFRS IFRS (1,100) (1,291) (3,902) (3,902) (4,211) 1,100 1,291 3,432 3,741 3,902 (470) (191) (939) (470) (470) 191 469

Carrying value Carrying

of assets and and of assets

Feb. 1, 2015 1, Feb. received on received liabilities liabilities accounting policies of the legacy BWBA with those with BWBA legacy the of policies accounting 118,713 118,713 s were adjusted to comply with IFRS and the legacy BWBA’s legacy the and IFRS with comply to adjusted were s 26,272 86,675 17,078 19,227 99,486 4,475 4,765 5,766 1,848 9,511 4,709 1,291 3,741 3,902 5,819 rcie b te oprto a a te ae f the of date the at as Corporation the by received e 191 311 887 367 242 138 ------shown aboveshown 31, 2015 as as 2015 31,

As at Jan. Jan. at As 142,505 142,505 244,948 203,776 222,960 244,948 13,204 15,174 93,315 70,740 21,988 16,835 3,999 9,128 2,741 2,136 6,200 7,235 2,303 1,692 425 271 238 376 ------46 Alignment of Alignment vii

Accounting Accounting

oiisNotes Policies Legacy BWBA 5,555 5,555 vii 6,119 6,119 vii 6,119 6,119 564 564 - -

17,078 1,848

Carrying value 1,291

of assets and and of assets

e.1 05IFRS 2015 1, Feb. received on on received liabilities liabilities 142,505 142,505 251,067 209,895 229,079 251,067 13,204 15,174 98,870 70,740 21,988 16,835 3,999 2,741 2,136 9,692 6,200 5,555 7,235 2,303 1,692 564 425 271 238 376 - - - - - 46 ements of of ements Page 40 of the the of

229,180 228,813 104,636 369,780 328,565 301,738 369,780 17,679 19,939 35,964 15,711 70,740 41,215 20,576 3,999 3,052 1,158 2,136 5,085 5,555 7,235 6,205 7,511 FBCL 564 616 367 480 138

46 BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 77 Page 41 41 Page under PSAS) into current in both current and non-current liabilities. liabilities. andnon-current current in both t retirement obligation” the associated useful lives) did not affect the carrying the affect not did lives) useful associated the ce $15,000 line of credit to a $5,000 line of credit. This credit. of line $5,000 a to credit of line $15,000 ce with the accounting policies of the Corporation, and did not affect the (Continued) Corporations from legacy received s 6.0 CONSOLIDATED FINANCIAL STATEMENTS 6.0 CONSOLIDATED CORPORATION LIMITED LIMITED CORPORATION Presentation of investment - under IFRS the Corporation must separate its investments into current and non-current amounts. This resultedThis inamounts. non-current areclassification of $3,902. and current into payable loans its separate must Corporation the IFRS under - payable loans of Presentation resultedThis inamounts. non-current areclassification of $191. Presentation of decommissioning decommissioning liability (formerly referred to as “asse liabilities amounts.This non-current and resultedin reclassificationa $1,291.of - under IFRS Presentation of investmentCorporation properties - presentsunder its IFRS investmentthe properties into the Corporation dedicateda line itemon statement its offinancial position. must separate and property its separate to has Corporation its the IFRS under - equipment and property of Componentisation previously of aspects partial in resulted process This 16. IAS with accordance in components into equipment capitalised toassets bederecognized in theamount of$470. Presentation of foreign currency translation - under IFRS the Corporation foreign currency translations are shown in net income rather than in remeasurement gains and losses. This resulted in a reclassification of $939. Presentationofgovernment funding - conformthe to presentation to Corporation’sthe policy,accounting which is to set up the government funding as deferred capital funding, an adjustment to the acquisition cost of property and equipment of reallocate $9,181 the and remaining to unamortised accumulated amounts depreciation of deferredcapital funding. The presentation ofwasupdated government $3,062 funding was received made in to previous years to (i) adjustmentto thelineofbeen crediteffected. has (ii) (iii) (iv) (v) (vi) (vii) values received from the legacy FBCL. Components and useful lives of the legacy BWBA were also adjusted on a prospective basis in order to comply valuesof theassets received thelegacyfrom BWBA. redu to FBCL directed Finance of Ministerthe 2015, July In In respect to the componentisation of property and equipment, all changes and adjustments were made on a (and components of establishment The basis. prospective Notes: 27. Accounting of 27. liabilitie and assets THE FEDERAL BRIDGE (in of dollars) thousands Notes to the Consolidated FinancialStatements

28. Subsequent Event BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES THE FEDERALBRIDGECORPORATION LIMITED BOARD OFDIRECTORS Member Diana Dodge Member Atkinson Gary Chairperson TropeaDeborah AUDIT COMMITTEE COMMITTEES OFTHEBOARD Connie Graham BOARD OFDIRECTORS Diana Dodge Diana Dodge Vice-chairperson Richard Talvitie Director Pascale Daigneault Director Micheline Dubé Micheline Director Deborah TropeaDeborah Director Atkinson Gary Chairperson Director 78

4

2

6

1

5

7

4 3

APPENDIX A The FederalBridgeCorporationLimited 2 (as ofMarch 31, 2015) 1 3 Corporate Secretary E.PigeonJacques Q.C. President andCEO Dubé Micheline OFFICERS OFTHECORPORATION Member TropeaDebbie Member TalvitieRick Member Dubé Micheline Member Connie Graham Member Diana Dodge Member Pascale Daigneault Chair oftheCommittee Atkinson Gary OFTHEWHOLE COMMITTEE 6

5 7 BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 79

2014-15 Annual Report Annual 2014-15 OFFICERS AND SENIOR MANAGEMENT AND OFFICERS Micheline Dubé & CEO President Dorland Wade General Manager Natalie Kinloch Treasurer Carrie Mann-Lavigne Deputy General Counsel Q.C. Jacques E. Pigeon, Secretary and Corporate General Counsel OF DIRECTORS BOARD OF THE COMMITTEES COMMITTEEMANAGEMENT Micheline Dubé Chairperson Carrie Mann-Lavigne Member Pisani Salvatore Member COMMITTEE AUDIT Marsha Sienkiewicz Chair Q.C. Jacques E. Pigeon, Member Natalie Kinloch Member (as of march 31, 2015) 31, (as of march

President and Director President Glenn Hewus Director Natalie Kinloch Director and Treasurer Carrie-Mann Lavigne Director Lavigne Thomas BOARD OF DIRECTORS DIRECTORS OF BOARD Micheline Dubé Director Q.C. Jacques E. Pigeon, Director Pisani Salvatore Director and Vice-President Marsha Sienkiewicz and Assistant-Treasurer Director THE SEAWAY INTERNATIONAL BRIDGE CORPORATION, LTD. LTD. CORPORATION, BRIDGE INTERNATIONAL THE SEAWAY BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 80 APPENDIX B–LIST OFABBREVIATIONS CBSA CBCA BWBA ATIP TIBA TC SSMBA SMRBC SLSDC SIBC PWGSC PSPP PAA OAG MDOT JCCBI IFRS IBTA IBA FBCL FAA ERM

The FederalBridgeCorporationLimited THOU TRANSP S S S THE SEA PUBLIC W PUBLIC SER P OF MICHIGAN DEP J INTERNA INTERNA INTERNA THE FEDERALBRIDGEC F ENTERP CANAD CANAD BL A ACQUES CARTIER BRIDGES ANDCHAMPLAIN INCORPORATED T. MARY’S RIVERBRIDGECOMPANY T. LAWRENCE SEAWAY DEVELOPMENT CORPORATION INANCIAL ADMINISTRATION ACT AULT STE. MARIEBRIDGEAUTHORITY ROGRAM ALIGNMENTARCHITECTURE CCESS TO INFORMATION ANDPRIVACY UE WATER BRIDGEAUTHORITY FICE OFTHEAUDITORFICE GENERALOFCANADA SAND BRIDGEAUTHORITY ISLANDS A BORDERSERVICES AGENCY A BUSINESS CORPORATIONS ACT RISE RISKMANAGEMENT ORT CANADA TIONAL FINANCIAL REPORTINGTIONAL FINANCIAL STANDARDS TIONAL BRIDGES ANDTUNNELS ACT TIONAL BRIDGEADMINISTRATION WAY INTERNATIONAL BRIDGECORPORATION LIMITED ORKS ANDGOVERNMENT SERVICES CANADA VICE PENSION PLAN ARTMENT OFTRANSPORTATION ORPORATION LIMITED BEST PRACTICES IN MANAGING INTERNATIONAL BRIDGES 81

2014-15 Annual Report Annual 2014-15

P.O. Box 10 Box P.O. P.O. Box 836 Box P.O. www.sibc.ca www.sibc.ca PARTNERS 934 Bridge Plaza Blue Water BridgeBlue Water www.tibridge.com Fax: (613) 932-9086 Fax: Fax: (315) 482-5925 Fax: Fax: (519) 336-7622 Fax: Fax: (613) 993-6945 Fax: 1555 Venetian 1555 Venetian Blvd, Phone: (519) 336-2720Phone: www.saultbridge.com/ Ottawa, Ontario K1P 6L5 Toll Free: 1-866-422-6346 Free: Toll Sault Ste. Marie MI 49783 Sault Ste. Cornwall, Ontario K6H 5T7 Ontario Cornwall, Telephone: (613) 932-6601 (613) 932-6601 Telephone: Telephone: (315) 482-2501 Telephone: Telephone: (613) 993-6880 Telephone: Lansdowne, Ontario K0E 1L0 Lansdowne, 55, Metcalfe Street, Suite 1210 Suite Street, 55, Metcalfe CORPORATE OFFICES CORPORATE Point Edward, Ontario, N7T 0A9 Ontario, Edward, Point www.federalbridge.ca / [email protected] www.federalbridge.ca THE FEDERAL BRIDGE CORPORATION LIMITED CORPORATION THE FEDERAL BRIDGE SAULT STE. MARIE BRIDGE AUTHORITY MARIE BRIDGE AUTHORITY STE. SAULT THE THOUSAND ISLANDS BRIDGE AUTHORITY THE THOUSAND THE SEAWAY INTERNATIONAL BRIDGE CORPORATION, LTD. LTD. BRIDGE CORPORATION, INTERNATIONAL THE SEAWAY