ANNUAL REPORT TO THE LEGISLATURE 2019-2020 Healthy People, Healthy Saskatchewan
saskhealthauthority.ca
Table of Contents Healthy People, Healthy Saskatchewan
Letter of Transmittal 1
Vision, Mission, Values 3
Governance System 4
Key Activities of the Fiscal Year 6
Management Report 10
Financial Overview 11
Auditor’s Report and 2019-20 Financial Statements 15
Appendices
Appendix A: Organizational Structure 57
Appendix B: Executive Leadership Team Overview 58
Appendix C: Unions 59
Appendix D: Funded Organizations 60
Appendix E: Payee Disclosure List 64 Letter of Transmittal Healthy People, Healthy Saskatchewan
Dear Minister Reiter:
The Saskatchewan Health Authority (SHA) is pleased to provide you and the residents of our province with the SHA’s Annual Report to the Legislature 2019-2020.
The annual report is a legislated requirement which demonstrates the SHA’s commitment to transparency and accountability. This year’s report includes the approved audited financial statements for the year ending March 31, 2020. Due to the demands on the health system caused by the COVID-19 pandemic, this report is an abbreviated one compared to previous years.
A key accomplishment for our organization was to achieve accredited status following the first phase of the accreditation survey process, which took place Nov. 24-29, 2019. Achieving accreditation indicates we have met a nationally accepted standard of quality and safety. Participating in the process ensures our ongoing commitment to a culture of continuous improvement.
The SHA continues to enhance health care for all Saskatchewan residents by focusing on the following four general areas: • Connected care for the people of Saskatchewan; • Delivering safe and high quality health care; • Establishing physicians as leaders in the health care system; and • Improving system-wide co-ordination and alignment of services.
More information on these areas of focus is outlined in the Ministry of Health Plan for 2019-20.
By working toward these goals, we are aligning and integrating health services to ensure people receive high quality, timely health care, regardless of where they live in Saskatchewan.
Our commitment to a philosophy of patient and family centred care underpins our activities and is the foundation for our values of safety, accountability, respect, collaboration and compassion.
Our commitment to accountability and transparency is demonstrated through:
• The SHA Board of Directors meetings, which holds quarterly meetings open to the public; • The SHA website, www.saskhealthauthority.ca, which includes news articles, reports and other publications, as well as archived news releases. This website garners more than two million page views per year; • Social media (Facebook, Twitter) channels, which have attracted 30,000 followers – more than the combined total of all channels of the province’s former regional health authorities;
SHA Annual Report 2019-20 1 • Our commitment to transparency and accountability through a strong relationship with news media outlets. Our organization responds to more than 1,300 media requests per year on a wide variety of topics; and • Daily internal communications with our approximately 40,000 health care workers and more than 2,600 physicians.
The progress achieved in 2019-20 is due to the dedication and commitment of staff and physicians of the SHA and our many partners, including the people we serve. We are profoundly grateful for the fortitude, determination and professionalism of all those involved in the response to the COVID-19 pandemic. Although the full impact of the pandemic on the health system will be unknown for some time, what has become clear is that as an amalgamated authority we are in a better position to manage and co-ordinate services through a time of great uncertainty.
Respectfully submitted,
R.W. (Dick) Carter, Chairperson Saskatchewan Health Authority Board of Directors
SHA Annual Report 2019-20 2 Vision, Mission, Values and Philosophy of Care
VISION Healthy People, Healthy Saskatchewan MISSION We work together to improve our health and well-being. Every day. For everyone. VALUES
SAFETY: Be aware. Commit to physical, psychological, social, cultural and environmental safety. Every day. For everyone.
ACCOUNTABILITY: Be responsible. Own each action and decision. Be transparent and have courage to speak up.
RESPECT: Be kind. Honour diversity with dignity and empathy. Value each person as an individual.
COLLABORATION: Be better together. Include and acknowledge the contributions of employees, physicians, patients, families and partners.
COMPASSION: Be caring. Practice empathy. Listen actively to understand each other’s experiences.
Our Philosophy of Care conveys our vision, values, beliefs and goals and defines our purpose and direction to staff, physicians, patients and families.
Our commitment to a philosophy of patient and family centred care is at the heart of everything we do and is the foundation for our values. This philosophy of care is, in essence, our culture: who we are, the shared purpose that brings us all together and how our patients and families experience care every day. Through meaningful engagement and co-creating mutually beneficial partnerships among employees, physicians, patients, families, clients and residents, together we ensure a seamless health system that supports Healthy People, Healthy Saskatchewan.
SHA Annual Report 2019-20 3 Governance System Healthy People, Healthy Saskatchewan
The SHA is governed by the SHA Board of Directors. The Board consists of 10 voting members, appointed to three-year terms by the Lieutenant Governor in Council. The Board is accountable to the minister of health to achieve the goals and objectives of the SHA, ensuring effective planning, delivery and evaluation of all health care programs, on behalf of the residents of Saskatchewan.
The Board recognizes the paramount importance of patients and families as key in the delivery of the health-care services provided by the SHA. The Board incorporates the patient experience into its work to inform the strategic direction for the SHA.
The SHA governance system is outlined in The Provincial Health Authority Act and The Provincial Health Authority Administration Regulations supported by the initial General Bylaws of the SHA, and further detailed in the Governance Charter, updated and approved on Feb. 26, 2020. The Governance Charter reflects the provincial legislation, direction, philosophy and principles governing the SHA – a large, complex, high profile and accountable public sector organization. It describes in detail the Board’s accountabilities to, and relationships with, key stakeholders and the chief executive officer (CEO) inclusive of the CEO’s authority and expectations. The governance philosophy is guided by the following principles:
• The Board provides strategic direction and leadership. • The Board adheres to the highest ethical and legal standards in the conduct of its business. • The Board makes decisions on the best available evidence. • The Board’s approach to governance is open: receptive to information that will enable the Board’s work, responsive to the expectations of the public and transparent regarding the decisions that are made. • Members are to act in the best interests of the Board as a whole. • The relationship between the Board and the CEO is based upon trust, collaboration and clear understanding of roles and responsibilities of the Board and the CEO.
The Governance Charter also outlines the Board’s structures and governance processes whereby strategic goals are set, key relationships are maintained, assets of the organization are safeguarded and quality care is supported in accordance with best practices, service excellence and national performance standards such as those of Accreditation Canada. The Board fulfills its governance role and responsibilities through the following committees of the Board chaired by Board members, recommended by the Board chairperson and formally appointed by the Board:
• Governance and Human Resources Committee; • Quality and Safety Committee; • Audit, Finance and Risk Committee; • Board Practitioner Hearing Committee; and • Practitioner Liaison Committee.
SHA Annual Report 2019-20 4 The SHA has also established an internal audit function that supports the SHA to accomplish its objectives by bringing a systematic and disciplined approach to evaluate and improve its operations. The chief audit officer (CAO) does this by providing insight and advice to help drive improvements in governance, risk management and control processes, balanced with assurance on key risk mitigations and controls through the completion of audit work. The CAO reports functionally to the Board, with a dotted line to the CEO for day-to-day administrative matters to maintain the CAO’s independence and objectivity.
SHA Board Members by Location R.W. (Dick) Carter, Chairperson, Regina (1) Grant Kook, Vice-Chairperson, Saskatoon (2) Brenda Abrametz, Prince Albert (3) Marilyn Charlton, Weyburn (4) Judy Davis, Regina (5) Robert Pletch, Regina (6) Dr. Preston Smith, Saskatoon (7) Rosalena Smith, Pinehouse Lake (8) Dr. Janet Tootoosis, North Battleford (9) Tom Zurowski, Saskatoon (10)
SHA Annual Report 2019-20 5
Key Activities of the Fiscal Year Healthy People, Healthy Saskatchewan
April • The SHA welcomes a new physician to Porcupine Plain. • The Turning Point Program based in Yorkton begins offering comprehensive testing for sexually transmitted infections and blood-borne infections. • The SHA evacuates the Biggar and District Health Centre as a precautionary measure because of wildfires.
May • The SHA expands newborn screening for early signs of hearing loss to all 18 hospitals in Saskatchewan that regularly deliver babies. • Turtleford area’s new helipad is certified for use. • $250,000 in increased funding is announced to develop a program that provides ongoing mental health supports for both public and private emergency medical services providers throughout the province. • The SHA Safety Charter is officially signed. • The SHA’s Board approves a $3.97 billion operating budget targeting record investments in mental health and addictions services. • Swift Current welcomes five additional primary care physicians.
June • The Patient and Family Leadership Council meets for the first time. • Six new addictions treatment beds open at Saskatoon-based Calder Centre.
July • A Request for Proposal is issued to support the opening of 75 residential support beds for people with severe, persistent mental health needs. • 10 new inpatient addiction treatment beds open at Pine Lodge in Indian Head. • The new Lloydminster Hospital helipad opens. • A new heliport opens to serve Royal University Hospital and Jim Pattison Children’s Hospital in Saskatoon. • The SHA is awarded $3.5 million to lead CAN Health West Network, a health and industry partnership designed to develop innovative technological solutions to address health care challenges.
SHA Annual Report 2019-20 6 August • Jim Pattison Children’s Hospital in Saskatoon begins operating dedicated 24-hour children’s emergency services. • Regina General Hospital extends its hours of mental health crisis support through expanded access to psychiatric nurses. • Funding for a new four-bed Epilepsy Monitoring Unit at Royal University Hospital in Sasktoon is announced. • Four Directions Community Health Centre in Regina moves to a new location to better serve clients. • Two new physicians begin serving the residents of Assiniboia and surrounding area.
September • The SHA partners with Gateway Regional Victim Services for a Facility Dog program to support people in central and northern Saskatchewan. • The SHA and the Meadow Lake Tribal Council sign a memorandum of understanding to work together. • A Request for Proposal is issued in support of opening 50 new addiction treatment beds across Saskatchewan. • The SHA announces permanent funding for a community paramedicine pilot in Prince Albert after a successful one-year pilot program helped provide proactive care to prevent emergency room visits and hospital admissions. • Plans are initiated to upgrade the neonatal special care nursery at Prince Albert’s Victoria Hospital to a Level 2 neonatal intensive care unit. • The Jim Pattison Children’s Hospital in Saskatoon officially opens. • Royal University Hospital in Saskatoon opens a new adult emergency department.
October • The Moose Jaw Family Wellness Centre holds its grand opening. • A new physician is welcomed to the Strasbourg area. • X-ray equipment at the Wilkie and District Health Centre is upgraded from film to digital images, supporting quicker diagnosis and improved care for patients. • A Request for Proposal is issued in support of opening six new youth residential addictions treatment beds in southern Saskatchewan. • The Government of Saskatchewan announces $10 million to reduce surgical wait times in Saskatchewan.
November • Accreditation Canada performs on-site visits at SHA facilities and with SHA leaders, physicians and staff. Accreditation Canada determines that the SHA has met the fundamental requirements of the accreditation program and commends the SHA for its ongoing work to integrate accreditation to improve the quality and safety of its programs and services. • New Rapid Access to Addictions Medicine Clinic opens in Prince Albert.
SHA Annual Report 2019-20 7 December • A new $2.4 million CT scanner starts operations at St. Paul’s Hospital. • The SHA marks its second anniversary. • Huggies® No Baby Unhugged initiative launches to support vulnerable newborns. • An upgraded helipad at the Victoria Hospital in Prince Albert opens for use. • The SHA issues a call for tenders for construction of a 72-bed long-term care home in Meadow Lake to replace the existing 55-bed Northland Pioneers Lodge.
January • First Nations and Métis patients desiring traditional medicine supports and services now have easier access through the introduction of the Traditional Pathways Program. • A new type of iron supplement introduced at Pasqua Hospital’s Ambulatory Care Infusion Clinic in Regina is expected to reduce wait times and ensure timely care for patients needing iron infusions. • Medical health officers meet in early January to discuss reports of a novel pneumonia which has been identified in China. • Through continued online surveillance, public health officials recognize that a potential pandemic-like illness is possible. • Medical health officers begin meeting to plan how to respond to a new disease. Meeting regularity soon escalates to every second day, then daily. • Public health begins putting processes in place to manage the expected first case of COVID-19 and to initiate contact tracing.
February • The SHA announces a partnership with Emmanuel Villa Personal Care Home in Emerald Park and Brightwater Senior Living in Regina to open 100 new community long-term care spaces in the Regina area. • The SHA announces a partnership with Mayfair Diagnostics to expand community-based MRI services in Saskatoon, improving access to advanced medical imaging. • The SHA releases the results of a review of patient flow and capacity challenges at the major hospitals in Saskatoon and Regina. • The health system begins to rapidly plan for a potential pandemic. Information management processes and testing designs and processes are developed. The SHA begins to prepare community, acute, emergency and intensive care staff. • Working groups focused on infection control, employee health and laboratory testing, as well as other topics pertinent to a pandemic, begin meeting. • The SHA begins increasing its personal protective equipment inventory to ensure a six-month supply and starts evaluating the potential needs of primary care physicians and of individuals and care givers who will be instructed to self-isolate. • Medical health officers and SHA leaders meet to develop and employ a public health response and management processes.
SHA Annual Report 2019-20 8 March March activities are overwhelmingly focused on developing and executing a response to the COVID-19 pandemic. • The SHA initiates a process to conduct market sounding to determine the feasibility of a privately built, owned and operated parkade at Regina General Hospital. • The Government of Saskatchewan announces a commitment of $300 million for a new multi-story addition to the Victoria Hospital, including a new acute care tower, replacement of the existing mental health space and renovations to the current facility. • Thirty-six additional permanent acute care in-patient beds open at Royal University Hospital in Saskatoon to accommodate patients admitted through the emergency department. • In response to the coronavirus, an SHA Emergency Operations Centre is activated to co-ordinate COVID-19 planning and response activities. • Plans are announced for a new six-station hemodialysis unit in Meadow Lake, making it easier for patients in the northwest region to access this service. • The SHA opens its first dedicated COVID-19 testing centres in Regina, Saskatoon and Prince Albert between March 13-16. As the COVID-19 pandemic evolves, testing becomes available in 50-plus locations around the province. By the end of March, dedicated assessment and treatment centres are added in Saskatoon and Regina. • A new payment code is created for physicians to provide services virtually or by telephone, enabling continuity of access to key health care services as COVID-19 pandemic evolves. • New visitor restrictions are in effect at all SHA facilities to help contain the spread of COVID-19. • Healthline 811 infrastructure is upgraded, increasing information technology phone capacity to more than 500 lines to meet COVID-19 demand and callback features are implemented to enhance services to patients. Staffing capacity is increased from 13 staff to approximately 250 to meet COVID-19 demand. As a result, the number of callers who are on hold or in the queue are reduced to zero. • An initial contact tracing surge plan is implemented to respond to COVID-19, resulting in a 300 per cent increase in staff who are able to perform contact tracing. • The SHA rolls out a new broadcast system that will allow the SHA and affiliates to contact all of our employees and physicians by email, automated phone call or text message to convey important, urgent information such as COVID-19 updates, required staffing needs and to offer urgent shifts. • The Roy Romanow Provincial Laboratory performs 8,000 COVID-19 tests by the end of March, ranking third in Canada for the number of travel and non-travel related tests performed per capita.
SHA Annual Report 2019-20 9 Management Report Healthy People, Healthy Saskatchewan
June 1, 2020
Saskatchewan Health Authority Report of Management
The accompanying consolidated financial statements are the responsibility of management, and are approved by the Saskatchewan Health Authority Board of Directors. The consolidated financial statements have been prepared in accordance with Canadian Public Sector Accounting Standards and of necessity include amounts based on estimates and judgements. The financial information presented in the annual report is consistent with the consolidated financial statements.
Management maintains appropriate systems of internal control, including policies and procedures, which provide reasonable assurance that the SHA’s assets are safeguarded and the financial records are relevant and reliable.
The Board delegates responsibility for reviewing the consolidated financial statements and overseeing management’s performance in financial reporting to the Audit, Finance and Risk Committee. The Audit, Finance and Risk Committee meets with the Board, management and the external auditors to discuss and review financial matters and recommends the consolidated financial statements to the Board for approval. The Board approves the annual report and, with the recommendation of the Audit, Finance and Risk Committee, approves the consolidated financial statements.
The appointed auditor conducts an independent audit of the consolidated financial statements. The auditor’s report expresses an opinion on the fairness of the consolidated financial statements prepared by management.
Scott Livingstone Robbie Peters Chief Executive Officer Vice President Finance and Chief Financial Officer Saskatchewan Health Authority Saskatchewan Health Authority
SHA Annual Report 2019-20 10 Financial Overview Healthy People, Healthy Saskatchewan
The SHA converted from Not-For-Profit Public Sector Accounting Standards (PS 4200 to PS 4270) to full Public Sector Accounting Standards (PSAS) effective April 1, 2018. SHA financial statements are prepared on a consolidated basis and include the following legal entities:
• Health Shared Services Saskatchewan (3sHealth) • St. Paul’s (Grey Nuns) of Saskatoon
Annual Operations
For the year ended March 31, 2020, the SHA recorded a consolidated surplus of $65.49 million compared to a deficit of $28.74 million in 2018-19. Included in this is a surplus of $3.22 million from operations of the SHA, a surplus of $62.97 million from capital accounts, and nominal amounts from 3sHealth and community trust accounts.
Accumulated Surplus
The accumulated surplus includes the operating, capital and community trust funds. The accumulated surplus as at March 31, 2020 was $1.32 billion, compared to $1.26 billion as at March 31, 2019. This includes designated assets, which are assets that have been formally designated by the authority to indicate the authority’s intention to use those assets for a specific purpose. The SHA Board of Directors continues to formally designate Ministry of Health (MoH) and Alberta Health Services (AHS) capital funding, unspent donations, and Saskatchewan Housing Corp. (SHC) reserves. Designated assets totalled $79.48 million as at March 31, 2020, compared to $106.32 million as at March 31, 2019.
Revenues
During the 2019-20 fiscal year, revenue totalling $4.38 billion was recorded. This represents an increase of 5.9 per cent over 2018-19, and a favorable variance from budget of $225.8 million. Ministry of Health revenue accounts for the majority of the additional revenue this fiscal year, and includes one-time grant funding of $87.7 million ($18.0 million in 2018-19) and funding for COVID-19, mental health and addictions and connected care and community care.
SHA Annual Report 2019-20 11 Government targeted funds received and recognized as revenue in 2019-20, but to be expensed in 2020-21, amount to $15.39 million. There was also a favorable variance in recoveries of $60 million due to unbudgeted recoveries from eHealth and other external organizations.
Other Government, 2.4% Fees, 3.7%
Donations, 1.5%
Ancillary, 0.8%
Recoveries, 2.2%
Other, 0.7%
Ministry of Health, 88.7%
The overall distribution of revenues remained consistent with the prior year. The Ministry of Health transfers accounted for 88.7 per cent of SHA total revenues (2018-19 – 88.9 per cent).
Expenses
Expenditures of $4.32 billion were incurred by the SHA in 2019-20, compared to budgeted expenditures of $4.10 billion, resulting in an unfavorable variance of $214.21 million. This is an increase of $148.93 million in expenses compared to 2018-19.
Expenditures by Function are highlighted in the following pie chart and the percentages by Function are consistent between 2019-20 and 2018-19.
SHA Annual Report 2019-20 12 Ambulatory Care Inpatient & Services, 7.3% Resident Services, 39.4% Diagnostic & Therapeutic Services, 13.4%
Ancillary, 0.5%
Community Support Services, Health Services, 22.9% 16.5%
The distribution of expenses by category (generally referred to as expenses by object) has also remained consistent with the prior year (see pie chart below), with salary and benefit costs, including medical remuneration, accounting for approximately 70.4 per cent of total expenditures (69.9 per cent in 2018-19).
Support Services, 1.3%
Other, 3.6%
Medical & Surgical Supplies, 5.6%
Salaries & Benefits, 70.4% Amortization, 2.9% Contracted-out Services, 2.7% Drugs, 1.7%
Grants, 7.6%
Property Services, 4.2%
SHA Annual Report 2019-20 13 During the year ended March 31, 2019, the SHA provided funding of $98.64 million ($98.49 million in 2018-19) to prescribed health-care organizations (HCOs) and $215.60 million ($214.58 million in 2018-19) to affiliates. Additional information can be found in Appendix D of the annual report on prescribed HCOs and affiliates.
In March 2020, the World Health Organization declared the outbreak of novel coronavirus (COVID-19) as a pandemic which continues to spread throughout Canada and the world. On March 18, 2020, the Government of Saskatchewan (SK) declared a provincial state of emergency due to the pandemic. The COVID-19 pandemic is complex and rapidly evolving and will have a major impact on the health sector and the SHA. The pandemic is expected to lead to an increase in demand for health services which could impact the SHA’s financial position and operations but the full impact cannot be reasonably estimated at this time.
Capital
Capital investment for 2019-20 totalled $217.12 million, compared to $168.12 million in 2018-19. The majority of funding was provided by the Ministry of Health with the remainder of the SHA’s funding provided by various sources, such as foundations and rural trust contributions. Major acquisitions include the progress in the Administrative Information Management System (AIMS), Jim Pattison Children’s Hospital equipment and information technology infrastructure, electrical renewal projects, multiple renovations and generator, parking lot, and elevator projects. Amortization expense was $124.74 million ($134.10 million in 2018-19).
Debt
SHA’s debt of $106.51 million (2019 - $106.27 million) is composed of banker’s acceptances, mortgages, energy performance loans and debentures. Further information related to the SHA’s debt is disclosed in Note 8 of the March 31, 2020 audited consolidated financial statements.
In addition, the SHA has approved operating lines of credit totalling $58.2 million as at March 31, 2020 ($57.2 million as at March 31, 2019).
Other
The SHA is responsible for managing various community trust funds. The community trust funds are restricted funds that reflect community generated assets transferred to the SHA in accordance with the pre-amalgamation agreements signed with the amalgamating health corporations in May 1993. Under the terms of the pre-amalgamation agreements, the assets are accounted for separately and use of the assets is subject to restrictions. Information regarding these funds can be found in Note 11 of the March 31, 2020 audited consolidated financial statements.
SHA Annual Report 2019-20 14
Consolidated Financial Statements of
SASKATCHEWAN HEALTH AUTHORITY
Year ended March 31, 2020
SHA Annual Report 2019-20 15
INDEPENDENT AUDITOR’S REPORT
To: The Members of the Legislative Assembly of Saskatchewan
Opinion
We have audited the consolidated financial statements of Saskatchewan Health Authority, which comprise the consolidated statement of financial position as at March 31, 2020, and the consolidated statement of operations, remeasurement gains and losses, change in net debt, and cash flow for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of Saskatchewan Health Authority as at March 31, 2020, and the consolidated results of its operations, remeasurement gains and losses, changes in net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Saskatchewan Health Authority in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian public sector accounting standards for Treasury Board’s approval, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Saskatchewan Health Authority’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Saskatchewan Health Authority or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Saskatchewan Health Authority’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
SHA Annual Report 2019-20 16 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Saskatchewan Health Authority’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Saskatchewan Health Authority’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Saskatchewan Health Authority to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control identified during the audit.
Regina, Saskatchewan Judy Ferguson, FCPA, FCA June 1, 2020 Provincial Auditor Office of the Provincial Auditor
SHA Annual Report 2019-20 17 SHA Annual Report 2019-20 18 Statement 2 SASKATCHEWAN HEALTH AUTHORITY Consolidated Statement of Operations
Year ended March 31, 2020 (in thousands of dollars)
Budget Actual Actual 2020 2020 2019 (Note 15) (Note 19) Revenues Ministry of Health - General Revenue Fund $ 3,771,108 $ 3,887,431 $ 3,678,311 Other provincial 49,934 58,763 60,775 Federal government 5,461 7,097 7,216 Alberta funding for Lloydminster 41,236 40,726 41,606 Patient & client fees 120,465 120,921 119,328 Out of province (reciprocal) 30,603 28,083 30,269 Out of country 8,347 11,579 11,995 Donations 37,305 63,873 29,660 Ancillary 34,881 35,896 30,658 Recoveries 36,309 96,409 89,876 Research grants 1,012 1,492 1,086 Investment 78 4,341 5,599 Other 19,305 25,195 29,276 Restructuring (Note 18) - - 2,999 Total Revenues 4,156,044 4,381,806 4,138,654
Expenses Inpatient & resident services Nursing administration 37,401 34,851 36,421 Acute 860,541 935,787 889,086 Supportive 468,934 483,205 476,349 Integrated 152,053 162,726 161,065 Rehabilitation 11,725 13,419 12,568 Mental health & addictions 65,731 68,729 63,826 1,596,385 1,698,717 1,639,315
Ambulatory care services 294,667 316,620 300,608 Diagnostic & therapeutic services 588,671 577,334 559,913
Community health services Primary health care 149,814 151,874 145,480 Home care 148,484 150,340 144,084 Mental health & addictions 151,522 149,125 139,206 Population health 100,727 100,184 96,344 Emergency response services 91,387 94,826 93,048 Other community services 65,985 63,952 63,710 707,919 710,301 681,872
Support services Program support 199,516 253,890 240,923 Operational support 550,252 589,033 568,247 Other support 138,171 145,139 151,286 Employee future benefits 3,784 3,782 3,121 891,723 991,844 963,577
Ancillary 22,747 21,503 22,106 Total Expenses (Schedule 1) 4,102,112 4,316,319 4,167,391
Surplus (deficit) $ 53,932 $ 65,487 $ (28,737) Accumulated surplus from operations, beginning of year $ 1,255,599 1,255,599 1,284,336 Accumulated surplus from operations, End of Year $ 1,309,531 $ 1,321,086 $ 1,255,599
The accompanying notes and schedules are part of these consolidated financial statements. 3
SHA Annual Report 2019-20 19 Statement 3 SASKATCHEWAN HEALTH AUTHORITY Consolidated Statement of Remeasurement Gains and Losses
Year ended March 31, 2020 (in thousands of dollars)
2020 2019
Accumulated remeasurement gains (losses), beginning of year $ (1,112) $ (92) Unrealized gains (losses) attributed to: Interest rate swap (Note 8) (2,492) (1,020)
Accumulated Remeasurement Gains (Losses), End of Year $ (3,604) $ (1,112)
The accompanying notes and schedules are part of these consolidated financial statements.
4
SHA Annual Report 2019-20 20 Statement 4 SASKATCHEWAN HEALTH AUTHORITY Consolidated Statement of Change in Net Debt
Year ended March 31, 2020 (in thousands of dollars)
Budget Actual Actual 2020 2020 2019 (Note 15)
Surplus (deficit) (Statement 2) $ 53,932 $ 65,487 $ (28,737)
Effects of changes in tangible capital assets: Acquisitions (Note 3) (188,930) (217,118) (168,118) Amortization (Note 3) 118,793 124,740 134,097 Net (gain) loss on disposals and write-downs - 1,663 3,908 Restructuring transaction (Note 18) - - (1,693) Proceeds received on disposal - 39 318 (70,137) (90,676) (31,488)
Effects of other changes: Net use (acquisition) in inventories for consumption - (2,036) 4,562 Net use (acquisition) in prepaid expenses - 1,563 4,496 - (473) 9,058
Net remeasurement gains (losses) for the year - (2,492) (1,020)
(Increase)/decrease in net debt for the year (16,205) (28,154) (52,187) Net debt, beginning of year (453,135) (453,135) (400,948) Net debt, End of Year (Statement 1) $ (469,340) $ (481,289) $ (453,135)
The accompanying notes and schedules are part of these consolidated financial statements.
5
SHA Annual Report 2019-20 21 Statement 5 SASKATCHEWAN HEALTH AUTHORITY Consolidated Statement of Cash Flow
Year ended March 31, 2020 (in thousands of dollars)
2020 2019
Operating Activities Surplus (deficit) (Statement 2) $ 65,487 $ (28,737) Non-cash items included in surplus (deficit) Amortization of tangible capital assets 124,740 134,097 Net loss on disposals and write-downs of tangible capital assets 1,663 3,908 Net change in non-cash working capital (Note 12) (2,061) 67,759 189,829 177,027
Capital Activities Purchase of tangible capital assets (217,118) (168,118) Restructuring transaction (Note 18) - (1,693) Proceeds on disposal of tangible capital assets 39 318 (217,079) (169,493)
Investing Activities Purchase of investments (61,158) (60,143) Redemption of investments 62,298 71,939 1,140 11,796
Financing Activities Repayment of debt (14,434) (10,261) Acquisition of debt 7,818 3,730 Net proceeds from revolving credit facilities 7,528 26,200 Repayment of obligations under long-term financing arrangement (2,662) (2,572) (1,750) 17,097
Net increase (decrease) in cash during the year (27,860) 36,427 Cash, beginning of year 206,015 169,588
Cash, End of Year (Schedule 2) $ 178,155 $ 206,015
The accompanying notes and schedules are part of these consolidated financial statements.
6
SHA Annual Report 2019-20 22
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
1. Legislative Authority
During 2017-18, the Saskatchewan Health Authority (SHA) was established pursuant to The Provincial Health Authority Act (the Act). The SHA is a not-for-profit organization and is not subject to income taxes and property taxes on certain properties, from the federal, provincial and municipal levels of government. The SHA is a registered charity under The Income Tax Act (Canada).
2. Significant Accounting Policies These consolidated financial statements have been prepared in accordance with Canadian public sector accounting standards, issued by the Public Sector Accounting Board and published by Chartered Professional Accountants of Canada.
a) SHA reporting entity
The SHA’s reporting entity includes the following organizations that are controlled by the SHA. These entities are consolidated after necessary adjustments to a basis consistent with the accounting policies of the SHA. The transactions and inter-entity balances between SHA and the following entities have been eliminated on consolidation:
i) Health Shared Services Saskatchewan (3sHealth) ii) St. Paul’s (Grey Nuns) of Saskatoon (St. Paul’s)
b) Revenue recognition
Revenue is recognized in the period in which the transaction or events that give rise to the revenue as described below occur. All revenue is recorded on an accrual basis, except when the accrual cannot be determined with a reasonable degree of certainty.
i) Government transfers Transfers from Ministry of Health (MoH), other Government of Saskatchewan ministries and agencies and other government entities are referred to as government transfers.
Government transfers are recognized as revenue in the period during which the transfer is authorized and eligibility criteria are met, except when and to the extent that transfer stipulations give rise to an obligation which meets the definition of a liability. Transfers meeting the definition of a liability are recognized as revenue as the liability is settled.
ii) Fees and charges, ancillary operations and other income
Fees and charges, ancillary operations, and other income are recognized in the period that goods are delivered or services are provided. Amounts received for goods or services that have not been provided by year-end are recorded as deferred revenue. 7
SHA Annual Report 2019-20 23
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
2. Significant Accounting Policies (continued)
b) Revenue recognition (continued)
iii) Donations, fundraising and non-government contributions Donations, fundraising and non-government contributions are received from individuals, corporations, and other not-for-profit organizations. These contributions may be unrestricted or externally restricted. Unrestricted contributions are recognized as revenue when received. Contributions with external restrictions are recorded as deferred revenue and are recognized as revenue when used for the specified purpose as outlined in Note 11. In-kind donations of assets are recorded as revenue at fair value at the date of contribution if a reasonable estimate can be made.
iv) Investment income Investment income includes dividend income, interest income and realized gains or losses on the sale of investments. Unrealized gains and losses are recognized in the consolidated statement of remeasurement gains and losses until the related investments are sold. Once realized, these gains or losses are recognized in the consolidated statement of operations.
c) Cash
Cash is comprised of cash on hand and balances with a financial institution.
d) Non-financial assets
Non-financial assets are assets held for consumption in the provision of services. These assets do not normally provide resources to discharge the liabilities of the SHA unless they are sold.
8 SHA Annual Report 2019-20 24
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
2. Significant Accounting Policies (continued)
d) Non-financial assets (continued)
i) Tangible capital assets
Tangible capital assets are recorded at cost, while normal maintenance and repairs are expensed as incurred. Donated tangible capital assets are recorded at their fair value at the date of contribution (if fair value can be reasonably determined). During construction, these assets are recorded based on their percentage of completion and are disclosed as construction in progress. Amortization commences when the asset is put in service. Tangible capital assets procured through public private partnerships are valued at the total of the nominal value of progress payments made during or on completion of construction and the present value of the future capital payments, discounted to the date the asset is available for use, using the Government’s borrowing rate for long-term debt at the time the agreement is signed.
Tangible capital assets, with a useful life exceeding one year, are amortized primarily on a straight-line basis over their estimated useful lives as follows:
Land improvements 2.5 to 33% Leasehold improvements 3.0 to 80% Building & improvements 2.0 to 20% Equipment 2.5 to 50%
ii) Inventory held for consumption
Inventory consists of general stores, medical and surgical, pharmacy, and other inventory held for consumption. They are expensed as they are consumed. All inventories are held at the lower of net realizable value or cost as determined on a weighted average basis.
iii) Prepaid expenses
Prepaid expenses are prepaid amounts for goods or services that will provide economic benefits in one or more future periods.
9 SHA Annual Report 2019-20 25
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
2. Significant Accounting Policies (continued)
e) Employee future benefits
i) Pension plans
Pension liabilities are calculated using the values as provided by the pension plan in the plan’s audited financial statements, and for multi-employer plans the percentage of the SHA employees who are active plan members, as outlined in Note 14. Changes in the pension liabilities that result from adjustments in estimated gains and losses and changes in actuarial assumptions are amortized on a straight-line basis over the expected average remaining service life of the related employee group. Amortization commences in the year following the determination of the adjustment. Losses resulting from plan amendments are recognized in the period of the plan amendment.
ii) Disability income plans
Employees of the SHA participate in several disability income plans to provide wage-loss insurance due to disability. The SHA follows post-employment benefits accounting for its participation in the plans. Accordingly, the SHA expenses all contributions it is required to make in the year.
iii) Accumulated sick leave benefit liability
The SHA provides sick leave benefits for employees that accumulate but do not vest. The SHA recognizes a liability and an expense for sick leave in the period in which employees render services in return for the benefits. The liability and expense is developed using an actuarial cost method. Actuarial gains and losses are amortized on a straight-line basis over the expected average remaining service life of the related employee groups.
f) Obligation under long-term financing arrangement
The Meadows in Swift Current opened in May of 2016 with a Public Private Partnership (P3) agreement that extends to April 2046. The SHA amortizes the cost of the completed project over its useful life, expenses the annual interest, and settles the long-term liability to the private sector partner over the term of the agreement. In addition, life cycle, operations, and maintenance obligations are expensed as paid. Obligations under long-term financing arrangement are disclosed in Note 10.
The long-term receivable from the MoH is collected over the term of the funding agreement.
10 SHA Annual Report 2019-20 26
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
2. Significant Accounting Policies (continued) g) Measurement uncertainty
In the preparation of the consolidated financial statements, management makes various estimates and assumptions in determining the reported amounts of assets and liabilities, revenues and expenses and in the disclosure of contingencies and contractual rights and obligations. Changes in estimates and assumptions will occur based on the passage of time and the occurrence of certain future events. The changes will be reported in revenues or expenses in the period in which they become known. Significant items subject to such estimates and assumptions include the estimated accumulated sick leave liability, other employee future benefits, and estimates of the useful lives of tangible capital assets.
h) Financial instruments
The SHA has classified its financial instruments into one of the following categories: i) fair value or ii) cost or amortized cost.
All financial instruments are measured at fair value upon initial recognition. The fair value of a financial instrument is the amount at which the financial instrument could be exchanged in an arm’s-length transaction between knowledgeable and willing parties under no compulsion to act.
Freestanding derivative instruments continue to be measured at fair value. Gains and losses are recognized in the consolidated statement of remeasurement gains and losses until the instruments are derecognized.
The following financial instruments are subsequently measured at cost or amortized cost:
i) Accounts receivable ii) Investments iii) Accounts payable and accrued liabilities iv) Debt
All financial assets are assessed for impairment on an annual basis. When a decline is determined to be other than temporary, the amount of the loss is reported in the consolidated statement of operations.
Related debt premium or discount and transaction costs are included in the carrying value of financial instruments recorded at cost or amortized cost and are amortized into interest expense using the effective interest rate method.
11 SHA Annual Report 2019-20 27
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
2. Significant Accounting Policies (continued) i) Leases
Leases that transfer substantially all of the benefits and risks of ownership related to the leased property from the lessor to the SHA are accounted for as a capital lease. Other leases are accounted for as operating leases with contractual obligations disclosed in Note 6b).
j) New accounting standards in effect
A number of new Canadian public sector accounting standards and amendments to standards are not yet effective for governments and have not been applied in preparing these consolidated financial statements. The following standards will come into effect as follows:
i) PS 3280 Asset Retirement Obligations (effective April 1, 2021), a new standard establishing guidance on the recognition, measurement, presentation and disclosure of a liability for retirement of a tangible capital asset.
ii) PS 3400 Revenue (effective April 1, 2022) a new standard establishing guidance on the recognition, measurement, presentation and disclosure of revenue.
12 SHA Annual Report 2019-20 28
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
3. Tangible Capital Assets
Land & Buildings & Construction Improvements Improvements Equipment in Progress 2020 2019
Cost, beginning of year $ 44,444 $ 2,488,717 $ 982,669 $ 352,770 $ 3,868,600 $ 3,789,770 Reclassification between asset classes 233 293,539 (121) (293,651) - - Acquisitions 455 43,895 70,645 102,123 217,118 168,118 Write-downs - - (15,980) (1,081) (17,061) (20,233) Disposals - - (11,961) - (11,961) (13,856) Write-down of assets due to threshold change1 - - (1,419) - (1,419) (63,325) Transfer of tangible capital assets related to restructuring transaction (Note 18) - - - - - 8,126 Cost, End of Year 45,132 2,826,151 1,023,833 160,161 4,055,277 3,868,600
Accumulated amortization, beginning of year 14,533 1,345,457 840,930 - 2,200,920 2,153,578 Amortization 1,174 82,461 41,105 - 124,740 134,097 Write-downs - - (15,980) - (15,980) (18,346) Disposals - - (11,341) - (11,341) (12,692) Write-down of assets due to threshold change1 - - (1,418) - (1,418) (62,150) Transfer of tangible capital assets related to restructuring transaction (Note 18) - - - - - 6,433 Accumulated amortization, End of Year 15,707 1,427,918 853,296 - 2,296,921 2,200,920
Net Book Value $ 29,425 $ 1,398,233 $ 170,537 $ 160,161 $ 1,758,356 $ 1,667,680 1 Starting April 1 2018, the SHA adopted the capital threshold of $5, assets under this value were written down.
13 SHA Annual Report 2019-20 29
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
4. Accumulated Surplus Accumulated surplus is comprised of the following:
March 31, Additions during Reductions March 31, 2019 the year during the year 2020
Invested in Tangible Capital Assets: Net book value of tangible capital assets $ 1,667,680 $ 217,118 $ 126,442 $ 1,758,356 Less: Debt owing on tangible capital assets (113,000) (15,346) (11,942) (116,404) 1,554,680 201,772 114,500 1,641,952
Government transfers for tangible capital assets 86,349 125,725 153,095 58,979 Donations 14,747 62,752 62,013 15,486 Canadian Mortgage & Housing Corporate Reserves 5,225 18 233 5,010 106,321 188,495 215,341 79,475
Unrestricted surplus (deficit) (405,402) 5,061 - (400,341) Total Accumulated Surplus from Operations 1,255,599 395,328 329,841 1,321,086
Accumulated Remeasurement gains (losses) (1,112) - 2,492 (3,604)
Total Accumulated Surplus $ 1,254,487 $ 395,328 $ 332,333 $ 1,317,482
The purpose and nature of each category above is as follows:
a) Government transfers for tangible capital asset expenditures represents the amount restricted by the board to allow for the renewal and replacement of equipment, buildings, and building service equipment.
b) Donations represents the portion of accumulated surplus in relation to funds received as donations in the name of specific facilities or programs, however not with external restrictions attached.
c) Canadian Mortgage and Housing Corporation (CMHC) Reserves represents the portion of accumulated surplus the SHA is required to maintain for certain replacement reserves as a condition of receiving subsidy assistance from CMHC.
14 SHA Annual Report 2019-20 30
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
5. Contractual Rights SHA has the following contractual rights:
a) Rental Revenue
Rental revenue of $3.2 million (2019 - $3.4 million) from contracts for retail space, non-profit activity or office space. Contract expiry terms range from June 30, 2020 to November 7, 2027.
b) Saskatchewan Housing Corporation (SHC) mortgage subsidy
SHC mortgage subsidy of $4.3 million (2019 - $5.8 million) for supportive care homes financed by CMHC. Contract expiry terms range from September 30, 2020 to February 1, 2030.
c) Ministry of Health Grant
The SHA has a $14.1 million (2019 – $61.4 million) capital and operating project agreement with the Ministry of Health expiring March 31, 2021. This agreement outlines the SHA’s requirement to undertake the implementation of the provincial health system’s administrative information management system (AIMS) on behalf of the health system as a whole, and the Ministry’s provincial assistance to assist the SHA in financing the cost of the project.
The SHA has contractual rights for the next five years as outlined in the table below:
Rental SHC Ministry of Total Total Revenue Subsidy Health Grant 2020 2019 2020 $ - $ - $ - $ - $ 49,107 2021 1,005 771 14,100 15,876 15,776 2022 944 765 - 1,709 1,608 2023 738 759 - 1,497 1,473 2024 480 755 - 1,235 2,680 2025 and subsequent 55 1,289 - 1,344 -
15 SHA Annual Report 2019-20 31
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
6. Contractual Obligations a) Capital assets acquisitions
At March 31, 2020, contractual obligations for the acquisition and construction of tangible capital assets over the next five years are as follows:
Total Total 2020 2019
2020 $ - $ 154,895 2021 100,505 8,677 2022 8,030 5,295 2023 - 5,295 2024 - 1,568 2025 and subsequent - -
b) Operating leases
Minimum annual payments under operating leases on property and equipment over the next five years are as follows:
Total Total 2020 2019
2020 $ - $ 18,823 2021 22,217 15,103 2022 22,164 12,351 2023 15,279 7,091 2024 9,724 8,384 2025 and subsequent 8,633 -
16 SHA Annual Report 2019-20 32
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
6. Contractual Obligations (continued) c) Contracted Health Care Organizations (HCOs)
The SHA has agreements with and provides annual grant funding to HCOs for the delivery of health care services. Certain of these contracts have provisions for continuation of services and/or purchase of facilities in the event of termination. Services provided in the year ended March 31, 2020 will continue to be contracted for the following fiscal year. Minimum annual payments to HCOs over the next five years are as follows:
Total Total 2020 2019
2020 $ - $ 47,944 2021 48,167 47,944 2022 46,075 46,071 2023 46,075 46,071 2024 44,551 44,546 2025 and subsequent 44,551 -
d) Obligations under long-term financing arrangement
The SHA has contractual obligations in the form of a P3 agreement. Refer to Note 10 for this information.
7. Contingencies
The SHA, along with others, is a defendant to several claims, which have been brought against it over the years because of its medical operations. The SHA believes these claims are without merit or are covered by insurance. Settlements, if any, in excess of insurance coverage, would be accounted for as a charge against operations in the period in which settlements arise.
17 SHA Annual Report 2019-20 33
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
8. Debt
Balance Outstanding Title of Issue Interest Rate Annual Repayment Terms 2020 2019
Banker's acceptances 1.64% to 5.03% $4.3 million principal & interest. $ 83,012 $ 75,348 Maturing April 3, 2020 to July 10, 2035.
CMHC mortgages 0.98% to 10.00% $3.7 million principal & interest. 10,430 14,014 Renewal dates June 1, 2020 to February 1, 2030. Energy performance 3.02% to 5.33% $1.4 million principal & interest. 7,263 12,184 contract loans Mortgage renewal dates October 31, 2023 to January 1, 2028. Other mortgages 3.13% to 5.79% $1.1 million principal & interest. 4,302 2,911 Renewal dates August 1, 2020 to June 1, 2025. Other Debt: Debentures payable 1,506 1,817
$ 106,513 $ 106,274
Principal repayments required in each of the next five years and thereafter are estimated as follows:
2021 $ 49,457 2022 6,670 2023 6,384 2024 9,855 2025 and subsequent 34,147
As at March 31, 2020, the SHA had revolving credit facilities available to a maximum of $99.5 million (2019 - $88.1 million). The facilities may be drawn by way of banker’s acceptances of $79.5 million (2019 - $78.1 million) and leases of $20.0 million (2019 - $10.0 million).
18 SHA Annual Report 2019-20 34
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
8. Debt (continued) a) Banker’s acceptances
The SHA has reduced its exposure to interest rate fluctuations by entering into an interest rate swap on the full amount of its revolving credit facility for the Jim Pattison Children’s Hospital (JPCH) Early Works Project ($22.6 million) and the Energy Performance Contract ($16.5 million). The interest rate swap effectively fixes the interest rate on the JPCH Early Works Project debt at 2.96% until July 10, 2035; the Energy Performance Contract debt at 2.17% until May 23, 2031 ($10.4 million), and 1.97% until September 30, 2029 ($3.6 million), and 5.03% until September 4, 2024 ($2.5 million). The table includes these amounts in banker’s acceptances.
The fair value of the interest rate swaps are recorded on the consolidated statement of financial position with changes in the fair value reflected in the consolidated statement of remeasurement gains and losses. For the year ended March 31, 2020 the market value loss on the interest rate swap was $2.5 million (2019 - loss of $1.0 million).
The banker’s acceptances are not secured. Interest paid on the banker’s acceptances during the year was $2.0 million (2019 - $1.6 million).
b) CMHC mortgages
SHC may provide a mortgage subsidy for supportive care homes financed by CMHC. The subsidy may change when the mortgage renewal occurs. For each of the mortgages, the SHA has pledged the related buildings of the special care homes as security, which have a net book value of $65.8 million (2019 - $79.5 million). Interest paid on mortgages during the year was $266 (2019 - $398). The average term to maturity is 4.4 years (2019 – 4.9 years).
c) Energy performance contract loans
Energy performance contracting is a unique program that allows the SHA to implement facility improvements, reduce energy costs, and improve health and comfort conditions. The projects are expected to provide utility cost savings that will pay for the cost and financing of the projects within an established period. Interest paid on the energy performance contract loans during the year was $413 (2019 - $520), and they are not secured. The average term to maturity is 6.1 years (2019 – 8.0 years).
19 SHA Annual Report 2019-20 35
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
8. Debt (continued) d) Other mortgages
Other mortgages include all non-CMHC mortgages, for which the SHA has pledged the related buildings as security, which have a net book value of $9.2 million (2019 - $7.8 million). Interest paid on other mortgages during the year was $185 (2019 - $111). The average term to maturity is 5.7 years (2019 – 7.8 years).
e) Debentures payable
The SHA owns and operates several accommodation units occupied by “unit holders.” In consideration for a life interest in a “right of use” of the accommodation unit, the unit holder contributes a lump sum deposit. In accordance with the debenture agreement, in the event of the death of the unit holder or termination of the occupant agreement by either party, the SHA is obligated to repay the unit holder or their representative the lesser of:
i) The original sum; or ii) The fair market value of the holders’ right of use.
The debenture payable represents the accumulated amount of deposits received from the market unit holders. These debentures are non-interest bearing with no fixed terms of repayment. The specific land and buildings to which the debentures relate have been pledged as collateral.
20 SHA Annual Report 2019-20 36
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
9. Capital Lease Payable
Title of Issue Interest Rate 2020 2019
Capital leases for equipment 0.00% to 13.93% $ 9,891 $ 6,726
Interest paid on the above capital leases during the year was $181 (2019 - $139). The average term to maturity for the above leases is 3.8 years (2019 - 3.5 years). Principal repayments required in each of the next five years and thereafter are estimated as follows:
2021 $ 2,842 2022 2,554 2023 2,124 2024 1,827 2025 and subsequent 544
Closing net book value of leased tangible capital assets is as follows:
Accumulated Net Book Value Cost Amortization 2020 2019
Equipment $ 17,103 $ 6,719 $ 10,384 $ 7,066
Assets under capital lease are included in tangible capital assets in Note 3. The assets are amortized on a straight-line basis over the economic life beginning in the year of acquisition. The amortization expense for the year is $2.2 million (2019 - $2.1 million).
21 SHA Annual Report 2019-20 37
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
10. Obligations Under Long-term Financing Arrangement
In September 2014, the SHA entered into a P3 arrangement with Plenary Health Swift Current Limited Partnership for the design, build, finance, and maintenance of The Meadows in Swift Current (a long-term care facility). This P3 obligation is calculated using a discount rate of 3.50% that extends to April 2046.
The change in the obligation was as follows:
Total Total 2020 2019
Obligation, beginning of year $ 116,685 $ 119,257 Payments (2,662) (2,572)
Obligation, End of Year $ 114,023 $ 116,685
The SHA has the following payment schedule related to its P3 arrangement:
Contractual Obligation Operation & Life Cycle Maintenance Total Total Obligation Payment Payments 2020 2019
2020 $ - $ - $ - $ - $ 8,244 2021 6,616 156 1,561 8,333 8,333 2022 6,616 204 1,600 8,420 8,420 2023 6,616 239 1,640 8,495 8,495 2024 6,616 262 1,681 8,559 8,559 2025 and subsequent 146,100 17,617 49,981 213,698 213,698 Total minimum payments 172,564 18,478 56,463 247,505 255,749 Less interest costs (58,541) - - (58,541) (62,495)
$ 114,023 $ 18,478 $ 56,463 $ 188,964 $ 193,254
22 SHA Annual Report 2019-20 38
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
11. Deferred Revenue
Balance Beginning Less Amount Add Amount Balance of Year Recognized Received End of Year
Community trusts $ 5,232 $ 99 $ 264 $ 5,397 Donations 942 380 347 909 Endowments 799 1 17 815 Government of Saskatchewan 3,403 51,512 53,300 5,191 Other 966 706 2,829 3,089 Research 1,513 809 990 1,694
Total Deferred Revenue $ 12,855 $ 53,507 $ 57,747 $ 17,095
The purpose and nature of each deferred category is as follows:
a) Community trusts – The community trust fund is a restricted fund that reflects community generated assets transferred to the SHA in accordance with the pre-amalgamation agreements signed with the amalgamating health corporations in May 1993. Under the terms of the pre- amalgamation agreements, the assets are accounted for separately and use of the assets is subject to restrictions.
b) Donations – Funds received from individuals, corporations and other not-for-profit organizations that are in the name of specific facilities or programs, with external restrictions as to how they are spent.
c) Endowments - Grants that must be maintained in perpetuity. Funds are recognized only when used for the purpose or purposes specified.
d) Government of Saskatchewan – Government transfers from the MoH with stipulations that give rise to an obligation which meets the definition of a liability.
e) Other – Unexpended non-government of Saskatchewan revenue with stipulations or external restrictions for the use of funds.
f) Research - Funds received for which the contributor has placed restrictions on the use of the resources, for the purpose of research. Revenue for research is recognized as expenses are incurred as the research project progresses.
23 SHA Annual Report 2019-20 39
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
12. Net Change in Non-cash Working Capital
Total Total 2020 2019
(Increase) decrease in accounts receivable $ (2,666) $ 8,397 (Increase) decrease in inventory held for consumption (2,036) 4,562 (Increase) decrease in prepaid expenses 1,563 4,496 Increase (decrease) in accounts payable and accrued liabilities (6,944) 43,656 Increase (decrease) in deferred revenue 4,240 3,527 Increase (decrease) in employee future benefits 3,782 3,121
$ (2,061) $ 67,759 13. Trusts Under Administration a) Patient and resident trust accounts The SHA administers funds held in trust for patients and residents using the SHA's facilities. The funds are held in separate accounts for the patients or residents at each facility. The total cash held in trust as at March 31, 2020 was $3.2 million (2019 - $3.1 million). These amounts are not reflected in the consolidated financial statements.
b) Employee benefit plans transactions and assets Included in these consolidated financial statements are expenses of $11.8 million (2018 – $9.8 million) relating to the operation of the employee benefit plans (EBP’s). Accounts receivable includes $1.2 million (2018 – $3.8 million) due from EBP’s while accounts payable includes $245 (2018 – $Nil) related to expenses for the EBP’s. The fair value of total assets and surplus net assets of the EBP’s under 3sHealth’s administration at December 31 are:
2019 2018 Fair Value Surplus Fair Value Surplus
Disability Income Plan – CUPE $ 85,190 $ 55,667 $ 79,309 $ 54,091 Disability Income Plan – General 62,978 29,180 57,465 27,653 Disability Income Plan – SEIU West 60,275 35,079 56,537 33,593 Disability Income Plan – SUN 89,382 44,082 82,302 44,824 Core Dental Plan 14,603 11,646 12,557 10,006 In-Scope Extended Health / Enhanced Dental Plan 190,989 136,288 178,326 124,729 Out-of-Scope Extended Health / Enhanced Dental Plan 6,673 2,852 6,639 2,979 Group Life Insurance Plan 77,114 26,552 66,827 17,493 Out-of-Scope Flexible Spending Plan 1,212 746 1,397 938
$ 588,416 $ 342,092 $ 541,360 $ 316,306 24 SHA Annual Report 2019-20 40
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
13. Trusts Under Administration (continued) b) Employee benefit plans transactions and assets (continued)
Subsequent to December 31, 2019, financial markets were negatively impacted by the outbreak of a strain of the novel coronavirus (COVID-19), which was declared a pandemic by the World Health Organization on March 12, 2020. This has resulted in significant economic uncertainty as the EBP’s have been subject to market fluctuations and may continue to experience significant volatility as the situation evolves. The duration and impact of this pandemic is unknown at this time and as such, an estimate of the potential impact on the EBP’s future operating results has not been made.
14. Employee Future Benefits a) Pension plans Employees of the SHA participate in one of the following pension plans:
i) Multi employer joint defined benefit plan
Joint defined benefit plans are governed by a formal agreement between the joint sponsors, which establishes that the joint sponsors have shared control over the plan. Funding contributions are shared mutually between the employer and plan members. The sponsors share, on an equitable basis, the significant risks of the plan. Accordingly, the SHA accounts for only its portion of the plan. Plan assets and surpluses are restricted for member benefits or certain other purposes as set out in the agreement. Plan benefits are determined on the same basis as defined benefit plans.
The accrued benefit obligation is determined using the projected accrued benefit actuarial cost method. Pension fund assets are valued at market-related values by averaging the difference between the net investment income on a market-value basis and the expected investment income, based on expected rate of return on plan assets, over a five year period.
The SHA sponsors one joint defined benefit pension plan, Saskatchewan Healthcare Employees’ Pension Plan (SHEPP). The SHA contributes to the plan at a ratio of 1.12 to 1 of employee contributions. Any actuarially determined deficiency is the responsibility of participating employers and employees in the ratio of 1.12 to 1. SHEPP and their governing body determine contribution rates. The SHA participating employer contributions for SHEPP represents approximately 89.63% of the total employer contributions to the plan.
25 SHA Annual Report 2019-20 41
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
14. Employee Future Benefits (continued) a) Pension plans (continued) i) Multi employer joint defined benefit plan (continued)
Total Total SHEPP 2020 2019
Plan status open open Member contribution rate (% of salary) 8.10-10.70 8.10-10.70 Number of active members 37,946 37,338 Number of SHA active members 33,697 32,988 SHA member contributions $ 145,653 $ 142,373 SHA employer contributions $ 163,124 $ 159,455 Average age of active members (years) 43.9 44.1 Number of former members entitled to deferred pension benefits 2,119 2,057 Number of superannuates and surviving spouses 19,061 18,317
Actuarial valuation date Dec.31/18 Dec.31/17 Long-term assumptions used Rate of compensation Increase Actual Actual Expected rate of return on plan assets (%) 6.30 6.60 Discount rate (%) 6.30 6.60 Inflation rate (%) 2.00 2.25 Expected average remaining service life (years) 12.80 12.70 Post-retirement index (% of annual increase in Consumer Price Index) Ad hoc Ad hoc
Total Total Pension Liability 2020 2019
Accrued benefit obligation, beginning of year $ 6,843,700 $ 6,683,200 Current period benefit cost 256,000 256,800 Interest cost 435,100 422,900 Actuarial gains (losses) 119,900 (179,500) Benefit payments (362,500) (339,700) Accrued Benefit Obligation, End of Year $ 7,292,200 $ 6,843,700
26 SHA Annual Report 2019-20 42
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
14. Employee Future Benefits (continued) a) Pension plans (continued) i) Multi employer joint defined benefit plan (continued)
Total Total Pension Liability (continued) 2020 2019
Plan assets, beginning of year $ 7,287,202 $ 6,779,471 Employer contributions 180,526 177,156 Employee contributions 167,106 161,643 Return on plan assets1 461,236 447,840 Actuarial gains 91,306 60,889 Benefit payments (362,536) (339,797) Plan Assets, End of Year2 $ 7,824,840 $ 7,287,202 Unamortized estimation adjustments3 (393,329) (330,700) Total Pension Liabilities (Assets)4 $ (925,969) $ (774,202) Valuation allowance of Pension Asset (not available for employer use)5 $ 925,969 $ 774,202
SHA Portion of Pension Liabilities (Assets) $ - $ -
1 The plan assets had an actual rate of return of 11.5% (2019 - (-0.10%)). 2 The market value of Plan investments at December 31, 2019 (the basis for our 2020 disclosure) is $8.04 billion (2018 - $7.22 billion); as at March 31, 2020 market value is $7.41 billion for plan assets of $7.91 billion. 3 Unamortized estimation adjustments are amortized to pension expense commencing in the year following the adjustment up to 12.8 years. 4 The total pension liabilities (asset) is based on the latest actuarial valuation extrapolated to December 31, 2019. Changes in assumptions can result in significantly higher or lower estimates of pension liability. The pension liability would increase by $1.01 billion or would decrease by $817 million if the discount rate was decreased or increased by one percentage point respectively. 5 The SHA has not recorded any portion of the SHEPP pension asset as plan assets and surpluses are restricted for future member benefits.
27
SHA Annual Report 2019-20 43
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
14. Employee Future Benefits (continued) a) Pension plans (continued) ii) Defined contribution plan and other plans
SHA participates in several multi employer defined benefit pension plans including Regina Civic Employees’ Superannuation and Benefit Plan (RCESP), Local Authorities Pension Plan (LAPP), and one defined contribution plan, Public Employees' Pension Plan (PEPP). The SHA follows defined contribution plan accounting for its participation in the plans. The SHA’s financial obligation to these plans is limited to making the required payments to these plans according to their applicable agreements. Accordingly, the SHA expenses all contributions it is required to make in the year. Defined contribution plans provide pensions based on accumulated contributions and investment earnings. Employees contribute a percentage of salary.
Pension expense is included in Compensation – benefits in Schedule 1 and is equal to the SHA contributions amount below.
Below is a summary of the SHA defined contribution plans:
Total Total LAPP1 RCESP2 PEPP 2020 2019
Plan status open open open Member contribution rate (% of salary) 3 8.39-12.84 7.80-13.10 5.00-7.60 SHA contribution rate (% of salary) 3 9.39-13.85 8.80-14.60 5.00-6.60
SHA participation Number of active members 194 1,473 341 2,008 1,911 Member contributions $ 820 $ 7,350 $ 1,767 $ 9,937 $ 9,515 SHA contributions $ 905 $ 8,185 $ 1,787 $ 10,877 $ 10,487
1 Certain employees of the SHA participate in LAPP, a multi employer defined benefit plan. The plan decided to reduce the unfunded obligation through increased contribution rates to provide benefit security as at January 1, 2018 the plan was able to reduce contribution rates. At December 31, 2018 audited financial statements for LAPP reported an accrued benefit obligation of $41.0 billion (2017 - $37.9 billion) and pension fund assets at market value of $44.5 billion (2017 - $42.7 billion). 2 Certain employees of the SHA participate in RCESP a multi employer defined benefit plan. The plan was amended effective January 1, 2016. Employers agreed to amortize the unfunded liability over a twenty year period. In respect to the pre- amended deficit, the employer/employee contribution rates changed from an equal cost sharing to 60:40 contribution ratio. The sharing of future deficits shall be in accordance with the new funding policy. At December 31, 2018 audited financial statements for RCESP reported an accrued benefit obligation of $1.5 billion (2017 - $1.4 billion) and pension fund assets at market value of $1.5 billion (2017 - $1.5 billion). 3 Contribution rate varies based on employee group for PEPP.
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SHA Annual Report 2019-20 44
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
14. Employee Future Benefits (continued) b) Disability income plans Employees of the SHA participate in one of the following disability income plans administered by 3sHealth:
i) General established in 1975 ii) CUPE established in 1975 – affiliated with the Canadian Union of Public Employees iii) SEIU-West established in 1975 – affiliated with the Service Employees International Union iv) SUN established in 1982 – affiliated with the Saskatchewan Union of Nurses v) SGEU established in 1981 - affiliated with the Saskatchewan Government and General Employee’s Union
The SHA’s financial obligation to these plans, except SGEU, is limited to making the required payments to these plans according to their applicable agreements. Disability expense is included in Compensation – benefits in Schedule 1 and is equal to the SHA contributions amount below.
General CUPE SEIU
Number of active members 5,571 10,673 8,026 Member contribution rate (% of salary) 0.00-1.13* 1.18 1.13 SHA contribution rate (% of salary) 0.00-1.13* 1.18 1.13 Member contributions $ 2,608 $ 4,721 $ 3,382 SHA contributions $ 2,729 $ 4,718 $ 3,365
Total Total SGEU SUN 2020 2019
Number of active members 380 9,206 33,856 33,570 Member contribution rate (% of salary) 1.50 0.61 SHA contribution rate (% of salary) - 0.72 Member contributions $ 129 $ 3,880 14,720 $ 14,712 SHA contributions $ - $ 4,484 15,296 $ 15,487
* Contribution rate varies based on employee group.
29 SHA Annual Report 2019-20 45
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
14. Employee Future Benefits (continued)
c) Accumulated sick leave benefit liability
The cost of the accrued benefit obligations related to sick leave entitlement earned by employees is actuarially determined using the projected benefit method prorated on service and management’s best estimate of inflation, discount rate, employee demographics and sick leave usage of active employees. The SHA has completed an extrapolation as of March 31, 2020 of the March 31, 2019 valuation. Key assumptions used as inputs into the actuarial calculation are as follows:
2020 2019
Discount rate 2.20% 2.50% Earnings escalation rate 0.00% to 2.00% 0.00% to 2.00% Expected average remaining services life 14.2 years 14.2 years
Earnings increase for seniority, merit and promotion is as follows: Employee groups For ages 15 to 29 2.00% 2.00% For ages 30 to 39 1.50% 1.50% For ages 40 to 49 1.00% 1.00% For ages 50 to 59 0.50% 0.50% For ages 60 and over 0.00% 0.00%
2020 2019
Accrued benefit obligation, beginning of year $ 122,349 $ 105,029
Cost for the year Current period benefit costs 14,503 13,094 Interest expense 3,041 2,928 Actuarial gains (losses) 2,793 15,266
Benefits paid during the year (15,901) (13,968) Accrued benefit obligation, end of year 126,785 122,349
Unamortized net actuarial loss (23,658) (23,004)
Benefit Obligation, End of Year $ 103,127 $ 99,345 30
SHA Annual Report 2019-20 46
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
15. Budget
The SHA board approved their 2019-2020 budget plan on May 29, 2019, while the 3sHealth board approved their budget plan on March 27, 2019.
16. Financial Risk Management The SHA has exposure to the following risks from its use of financial instruments: credit risk, market risk and liquidity risk.
The Board ensures that the SHA has identified its major risks and ensures that management monitors and controls them. The Board oversees the SHA’s systems and practices of internal control, and ensures that these controls contribute to the assessment and mitigation of risk.
a) Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The SHA is exposed to credit risk from the potential non-payment of accounts receivable. The majority of the SHA’s receivables are from MoH – General Revenue Fund, Saskatchewan Workers’ Compensation Board, health insurance companies or other provinces. Therefore, the credit risk on accounts receivable is minimal. The SHA is also exposed to credit risk from cash and investments.
The SHA manages its credit risk surrounding cash and investments by dealing solely with reputable banks and financial institutions, and utilizing an investment policy to guide their investment decisions. The SHA invests surplus funds to earn investment income with the objective of maintaining safety of principal and providing adequate liquidity to meet cash flow requirements.
Management reviews accounts receivable to determine if a valuation allowance is necessary to reflect impairment in collectability.
The aging of Ministry of Health and other accounts receivable as at March 31, 2020 was:
31
SHA Annual Report 2019-20 47
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
16. Financial Risk Management (continued) b) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates or interest rates, will affect SHA’s income or the value of its holdings of financial instruments. The objective of market risk management is to control market risk exposures within acceptable parameters while optimizing return on investment.
i) Foreign exchange risk
Foreign exchange risk is the risk the fair value of financial instruments denominated in a foreign currency will fluctuate because of changes in the foreign exchange rates. The SHA operates within Canada, but in the normal course of operations is party to transactions denominated in foreign currencies. The SHA believes that it is not subject to significant foreign exchange risk from its financial instruments.
ii) Interest rate risk
Interest rate risk is the risk the fair value of future cash flows or a financial instrument will fluctuate because of changes in the market interest rates. Financial assets and financial liabilities with variable interest rates expose the SHA to cash flow interest rate risk.
The SHA’s investments include guaranteed investment certificates and term deposits bearing interest at coupon rates. As at March 31, 2020, the interest rates on the investments held by the SHA bear minimal risk and therefore the overall risk to the SHA due to fluctuating interest rates is minimal. Although management monitors exposure to interest rate fluctuations, it does not employ any interest rate management policies to counteract interest rate fluctuations.
The majority of the SHA’s long-term debt outstanding as at March 31, 2020 and 2019 has fixed interest rates. The SHA has entered into interest rate swaps to effectively fix the interest rates, and further reduce the interest rate risk, on certain debt. Refer to Note 8 for this information.
32 SHA Annual Report 2019-20 48
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
16. Financial Risk Management (continued) c) Liquidity risk
Liquidity risk is the risk that an organization is not able to fulfill its financial obligations as they become due.
The SHA manages liquidity risk by continually monitoring actual and forecasted cash flows from operations and anticipated investing and financing activities. The SHA relies on grants from the MoH through the General Revenue Fund. To obtain sufficient funds, the SHA provides the Ministry with capital and operating budgets and quarterly forecasts.
As at March 31, 2020, the SHA is committed to the following liabilities, including principal and interest, based on the expected undiscounted cash flows from the reporting date to the contractual maturity date:
Carrying Due in less Due in 1-3 Due in 3-5 Due after 5 amount than 1 year years years years
Accounts payable and accrued liabilities $ 508,546 $ 508,546 $ - $ - $ - Debt 106,513 49,457 13,054 14,394 29,608 Capital lease payable 9,891 2,842 4,678 2,371 - Obligations under long-term financing arrangement 114,023 2,754 5,799 6,209 99,261
Total Financial Liabilities $ 738,973 $ 563,599 $ 23,531 $ 22,974 $ 128,869
Fair value of interest rate swaps
The fair value of the interest rate swaps are recorded in the consolidated statement of financial position with changes in fair value reflected in the consolidated statement of re- measurement gains and losses. Accordingly, the determination of fair value requires judgment and is based on market information where available and appropriate. Fair value measurements are categorized into levels within a fair value hierarchy based on the nature of the inputs used in the valuation. The interest rate swap is determined to be Level 1, where by quoted prices are readily available from an active market, and no items have transferred between hierarchy levels 1 to 3.
At March 31, 2020 the market value loss on the interest rate swap was $2.5 million (2019 – loss of $1.0 million).
33 SHA Annual Report 2019-20 49
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
16. Financial Risk Management (continued) c) Liquidity risk (continued)
Lines of credit
The SHA has several approved operating lines of credit totaling $58.2 million (2019 - $57.2 million). Interest rates vary from prime minus 1.00% to prime plus 1.00%. Total interest paid on the lines of credit in 2020 was $634 (2019 - $528).
17. Related Parties
These consolidated financial statements include transactions with related parties. The SHA is related to all Saskatchewan Crown Agencies such as ministries, corporations, boards, and commissions under the common control of the Government of Saskatchewan, as well as its key management personnel and their close family members. Additionally, the SHA is related to organizations where they have key management personnel and/or their close family members in common. Transactions with these related parties are in the normal course of operations and are settled on normal trade terms.
18. Restructuring
The SHA is under the control of the Government of Saskatchewan and is related to all Saskatchewan Crown Agencies such as ministries, corporations, boards, and commissions. The Physician Recruitment Agency of Saskatchewan (PRAS), a Treasury Board Crown Corporation and the Roy Romanow Provincial Lab (RRPL), a MoH laboratory, are also under the control of the Saskatchewan government.
In January 2017, the Government of Saskatchewan’s Advisory Panel on Health System Structure recommended that the assets, liabilities and related responsibilities for the operation of PRAS and RRPL transfer to the SHA.
a) Physician Recruitment Agency of Saskatchewan
On July 23, 2018, the SHA assumed the responsibility of the ongoing operation of PRAS. The SHA is responsible for coordinating the recruitment of health professionals to Saskatchewan and actively working to optimize the health sector workforce for the province.
34 SHA Annual Report 2019-20 50
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
18. Restructuring (continued)
a) Physician Recruitment Agency of Saskatchewan (continued)
No compensation was paid or received for the transfer and there were no restructuring costs related to the transfer.
From the date of transfer to March 31, 2019, revenue related to the operation of PRAS includes MoH funding of $1.2 million. Expenses related to the operation of PRAS include program support of $1.4 million, and amortization of $105.
b) Roy Romanow Provincial Laboratory
The transfer from the MoH of the assets, liabilities and the responsibility for the ongoing operation of RRPL occurred April 1, 2018. The SHA is responsible for public health services in water testing, bacteriology, virology, immunoserology and molecular diagnosis.
No compensation was paid to or received from MoH for the transfer and there were no restructuring costs related to the transfer.
From the date of transfer to March 31, 2019, revenue related to the operation of RRPL includes MoH funding of $30.1 million and other revenue of $1.4 million. Expenses related to the operation of RRPL include diagnostic and therapeutic services of $31.4 million, and amortization of $455.
The net carrying amount of the assets and liabilities is detailed below:
2020 2019 Total RRPL PRAS Total
Carrying amount of assets and liabilities received at restructing date: Accounts receivable $ - $ 86 $ 981 $ 1,067 Accounts payable and accrued liabilities - (319) (270) (589) Tangible capital assets - 1,563 130 1,693 Inventory held for consumption - 475 - 475 Prepaid expenses - 261 92 353
Total Net Carrying Amount Received $ - $ 2,066 $ 933 $ 2,999
35 SHA Annual Report 2019-20 51
SASKATCHEWAN HEALTH AUTHORITY Notes to the Consolidated Financial Statements
Year ended March 31, 2020 (in thousands of dollars)
19. Comparative Information
Certain of the comparative figures have been reclassified to conform to the financial statement presentation adopted in the current year.
20. Subsequent Events
In March 2020, the World Health Organization declared the outbreak of novel coronavirus (COVID- 19) as a pandemic which continues to spread throughout Canada and the world. On March 18, 2020, the Government of Saskatchewan (SK) declared a provincial state of emergency due to the pandemic. The COVID-19 pandemic is complex and rapidly evolving and will have a major impact on the health sector and the Saskatchewan Health Authority. The pandemic is expected to lead to an increase in demand for health services which could impact the Saskatchewan Health Authority’s financial position and operations but the full impact cannot be reasonably estimated at this time.
21. Collective Bargaining Agreements
The Saskatchewan Union of Nurses (SUN) and the Health Services Association of Saskatchewan (HSAS) contracts expired on March 31, 2018. Negotiations are under way for SUN and HSAS and the impact on these consolidated financial statements is not determinable and no accrual has been made. The provider union contracts made up of the Canadian Union of Public Employees (CUPE), and Saskatchewan Government and General Employee’s Union (SGEU) is in effect until March 31, 2022. The provider union contract for Service Employees International Union (SEIU-West) expired March 31, 2017 and estimates of the retroactive settlement of $5.0 million have been accrued in these consolidated financial statements, which includes $4.3 million for the SHA and $712 for payment to the affiliates.
36 SHA Annual Report 2019-20 52 Schedule 1 SASKATCHEWAN HEALTH AUTHORITY Consolidated Schedule of Expenses by Object
Year ended March 31, 2020 (in thousands of dollars)
Budget Actual Actual 2020 2020 2019 (Note 15) (Note 19)
Advertising & public relations $ 1,317 $ 562 $ 652 Amortization 118,793 124,740 134,097 Board costs 548 451 461 Compensation - benefits 429,992 441,342 426,033 Compensation - salaries 2,153,524 2,210,456 2,129,862 Continuing education fees & materials 3,819 3,717 3,307 Contracted-out services 99,137 97,186 95,141 Diagnostic imaging supplies 4,861 4,598 4,633 Dietary supplies 1,663 1,828 1,837 Drugs 66,076 72,277 67,336 Food 36,548 38,188 37,260 Grants to ambulance services 41,616 42,849 42,094 Grants to health care organizations & affiliates 281,885 285,102 282,303 Housekeeping & laundry supplies 13,979 15,184 14,457 Information technology contracts 16,059 30,239 27,790 Insurance 7,198 8,319 8,201 Interest 9,310 8,371 11,189 Laboratory supplies 37,215 40,165 39,344 Medical & surgical supplies 140,168 150,933 146,938 Medical remuneration & benefits 363,983 386,937 356,934 Meetings 800 616 546 Net (gain) loss on disposals and write-downs - 1,663 3,908 of tangible capital assets Office supplies & other office costs 19,765 20,601 20,248 Other (13,509) 25,258 22,865 Professional fees 17,254 27,516 23,864 Prosthetics 47,724 48,098 47,942 Purchased salaries 15,317 19,784 20,072 Rent/lease/purchase costs 40,037 56,225 52,521 Repairs & maintenance 60,928 63,941 58,915 Supplies - other 10,352 12,088 11,669 Therapeutic supplies 902 1,134 1,003 Travel 25,691 25,198 24,479 Utilities 49,160 50,753 49,490
$ 4,102,112 $ 4,316,319 $ 4,167,391 37
SHA Annual Report 2019-20 53 Schedule 2 SASKATCHEWAN HEALTH AUTHORITY Consolidated Schedule of Cash and Investments
As at March 31, 2020 (in thousands of dollars)
2020 Effective Coupon 2019 Carrying Value Maturity Rate Rate Carrying Value
Cash $ 178,155 $ 206,015 Investments Money Market Mutual Fund $ 7,201 $ 3,059 Guaranteed Investment Certificate 2,766 June 4, 2020 - August 18, 2022 1.50 - 7.55% 2.35 - 8.90% 6,780 Term deposit 3,570 April 21, 2020 - December 3, 2022 0.25 - 3.15% 4,836 Other 390 392 Total investments $ 13,927 $ 15,067
Total:* $ 192,082 $ 221,082 *Included in cash and investments is $17.1 million (2019 - $12.9 million) restricted as a result of agreements with external parties.
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SHA Annual Report 2019-20 54 Schedule 3 SASKATCHEWAN HEALTH AUTHORITY Schedule of Board Remuneration
Year ended March 31, 2020
Travel and Sustenance Other Total Total Retainer Per Diem Expenses Expenses CPP 2020 2019
Carter, R.W. - Chair $ 43,500 $ 6,000 $ 5,536 $ 25 $ - $ 55,061 $ 53,924 Abrametz, Brenda 28,500 6,000 2,237 19 1,759 38,515 39,027 Charlton, Marilyn 25,000 3,375 2,532 32 1,441 32,380 33,625 Davis, Judy 28,500 3,750 1,377 35 1,642 35,304 37,746 Kook, Grant 28,500 1,500 - - 1,525 31,525 32,801 Pletch, Robert 28,500 4,125 1,363 30 - 34,018 35,369 Smith, Dr. Preston 25,000 2,625 430 - 1,403 29,458 29,377 Smith, Rosalena 25,000 1,875 3,018 18 1,370 31,281 31,368 Tootoosis, Dr. Janet 25,000 4,500 118 - 1,518 31,136 30,317 Zurowski, Tom 25,000 4,875 736 22 1,519 32,152 33,112
Total $ 282,500 $ 38,625 $ 17,347 $ 181 $ 12,177 $ 350,830 $ 356,666
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SHA Annual Report 2019-20 55 Schedule 4 SASKATCHEWAN HEALTH AUTHORITY Schedule of Senior Management Salaries, Benefits, Allowances and Severance
Year ended March 31, 2020
2020 2019 Salaries, Benefits and Benefits and Salaries1 Allowances2 Total Allowances1,2
Livingstone, Scott - Chief Executive Officer $ 397,525 $ 8,803 $ 406,328 $ 402,290 Ashdown, Leanne - Chief Audit Officer 196,393 7,200 203,593 133,084 Babyn, Dr. Paul - Physician Executive 317,911 7,604 325,515 315,134 Earnshaw, Karen - Vice President 284,843 7,982 292,825 280,877 Garratt, Sharon - Vice President 265,649 7,757 273,406 262,438 Hamilton, Dr. Erin - Physician Executive 249,868 6,213 256,081 - Hansia, Dr. Rashaad - Physician Executive 196,529 4,585 201,114 - Laurent, Suann - Chief Operating Officer 359,619 8,450 368,069 364,073 McKechney, Kim - Vice President 222,370 7,961 230,331 221,433 McLetchie, Andrew - Vice President 265,649 1,475 267,124 257,756 Miller, Corey - Vice President 265,649 7,431 273,080 262,377 Northcott, Mike - Chief Human Resources Officer 264,868 8,567 273,435 277,943 Peters, Robbie - Vice President 326,926 9,123 336,049 332,517 Shaw, Dr. Susan - Chief Medical Officer 335,400 8,088 343,488 317,305 Vachon, Beth - Vice President 289,091 8,025 297,116 289,405 Wahba, Dr. Mark - Physician Executive 83,387 2,215 85,602 301,791 Wasko, Dr. Kevin - Physician Executive 311,311 7,980 319,291 308,314 Will, Andrew - Vice President 326,926 7,823 334,749 331,630 Young, Dr. Stephanie - Physician Executive 118,135 1,305 119,440 282,628
Total $ 5,078,049 $ 128,587 $ 5,206,636 $ 4,940,996
1. Salaries include regular base pay, overtime, honoraria, sick leave, vacation leave, and merit or performance pay, lump sum payments, and any other direct cash remuneration. Severance in 2020 was $nil (2019 - $nil).
2. Benefits and Allowances include the employer's share of amounts paid for the employees’ benefits and allowances that are taxable to the employee. This includes taxable: professional development, non-accountable relocation benefits, personal use of an automobile, cell-phone, computer, etc., as well as any other taxable benefits.
40
SHA Annual Report 2019-20 56 Appendices Appendix A: Organizational Structure
SHA Board of Directors
Scott Livingstone Chief Executive Officer Leanne Ashdown Chief Audit Officer Suann Laurent Chief Operating Officer
Lori Frank Executive Director Governance/Policy Dr. Susan Shaw Beth Vachon Mike Northcott Robbie Peters Andrew Will Kim McKechney Chief VP Quality, Chief Human VP Finance and VP Infrastructure, VP Community Medical Safety and Resources Chief Financial Information and Engagement and Officer Strategy Officer Officer Support Communications
Andrew Sharon Garratt Dr. Erin Karen Dr. Kevin Dr. Rashaad Dr. Paul McLetchie Hamilton Corey Miller Earnshaw Wasko VP Integrated Hansia Babyn VP Integrated (interim) VP Integrated Physician Urban Health Physician VP Provincial Physician Northern Physician Rural Health Executive and Chief Executive Programs Executive Health Executive Nursing Officer
July 4/2019
The organizational chart is current as of March 31, 2020.
SHA Annual Report 2019-20 57 Appendix B: Executive Leadership Team Overview
Chief Executive Officer & Chief Operating Officer Scott Livingstone, CEO, Saskatoon (1) Suann Laurent, COO, Saskatoon (2)
Quality, Safety & Strategy and Chief Medical Officer Beth Vachon, VP Quality, Safety & Strategy, Swift Current (3) Dr. Susan Shaw, Chief Medical Officer, Saskatoon (4)
Human Resources Mike Northcott, Chief Human Resources Officer, Saskatoon (5)
Finance Robbie Peters, VP Finance and CFO, Regina (6)
Infrastructure, Information & Support Andrew Will, VP Infrastructure, Information & Support, Saskatoon (7)
Integrated Northern Health Andrew McLetchie, VP Integrated Northern Health, Prince Albert (8) Dr. Erin Hamilton (interim), Physician Executive, North Battleford (9)
Integrated Rural Health Karen Earnshaw, VP Integrated Rural Health, Grenfell (10) Dr. Kevin Wasko, Physician Executive, Swift Current (11)
Integrated Urban Health Sharon Garratt, VP Integrated Urban Health & Chief Nursing Officer, Regina (12) Dr. Rashaad Hansia, Physician Executive, Regina (13)
Internal Audit Leanne Ashdown, Chief Audit Officer, Saskatoon (14)
Provincial Programs Corey Miller, VP Provincial Programs, Saskatoon (15) Dr. Paul Babyn, Physician Executive, Saskatoon (16)
Community Engagement & Communications Kim McKechney, VP Community Engagement & Communications, Saskatoon (17)
SHA Annual Report 2019-20 58 Appendix C : Unions
The majority of SHA’s employees belong to one of five unions. Unions provide their members with advice and support and bargain with the Saskatchewan Association of Health Care Organizations to establish terms and conditions of employment, including wages and benefits. The SHA works with unions to ensure high quality, timely care for patients and to provide a safe environment free of physical, emotional or psychological harm for patients and health care providers. Union members provide services in long-term care, home care, acute care, health care centers, public health, mental health and community health.
SHA’s union partners are:
• The Saskatchewan Union of Nurses (SUN): SUN represents more than 9,400 SHA registered nurses, registered nurse practitioners, registered psychiatric nurses and graduates.
• The Health Sciences Association of Saskatchewan (HSAS): HSAS represents approximately 3,700 SHA employees. Roles include pharmacists, addictions counsellors, dietitians, audiologists, emergency medical services staff, epidemiologists, infection control practitioners, occupational and physical therapists, health inspectors and psychologists.
• The Canadian Union of Public Employees (CUPE), the Service Employees International Union-West (SEIU-West) and the Saskatchewan Government and General Employees’ Union (SGEU): CUPE, SEIU-West and SGEU represent SHA’s health care providers. They work in a variety of medical and non-medical positions. Included are housekeeping, dietary and continuing care aides, licensed practical nurses, cooks, medical, lab and diagnostic technologists, maintenance staff, cleaners, clerical workers, porters, and purchasing, health records and registration clerks.
o CUPE represents approximately 12,700 SHA employees in the former Prairie North, Prince Albert Parkland, Regina Qu’Appelle, Sun Country and Sunrise health regions.
o SEIU-West represents more than 8,800 SHA employees in the former Cypress, Five Hills, Heartland and Saskatoon health regions as well as 19 staff at Meadow Lake Clinic in the former Prairie North Health Region.
o SGEU represents approximately 1,600 SHA employees in the former Kelsey Trail, Keewatin Yatthé and Mamawetan Churchill River health regions as well as about 160 Roy Romanow Provincial Laboratory staff.
SHA Annual Report 2019-20 59 AppendixAppendix C Funded D: OrganizationsFunded Organizations a) Prescribed Health Care Organizations (HCOs)
The SHA has entered into agreements with those who meet the definition of prescribed HCOs pursuant to the Act to provide health services.
These organizations receive operating funding from the SHA on a monthly basis in accordance with budget amounts approved annually. During the year, the SHA provided the following amounts to prescribed HCOs:
2020 2019 (000's of dollars) (000's of dollars)
615672 Saskatchewan Ltd. $ 561 $ 561 757 Mohr’s Holding Inc. 18 18 Autism Resource Centre Inc. 1,147 749 Autism Treatment Services of Saskatchewan Inc. 2,398 2,334 Blaine Lake Ambulance Care Ltd. 465 458 BridgePoint Centre for Eating Disorders Inc. 592 587 Canadian Mental Health Association (Saskatchewan Division) Inc. 1,873 1,509 Canora Ambulance Care (1996) Ltd. 1,416 1,411 Crestvue Ambulance Services Ltd. 1,253 1,353 Crocus Co-operative 322 360 Cupar Lions Volunteer Ambulance Inc. 325 325 Duck Mountain Ambulance Care Ltd. 865 853 Edwards Society Inc. 440 437 Elrose Volunteer Fire Brigade Inc. 13 13 Extendicare (Canada) Inc. 40,071 40,666 Fillmore Ambulance Inc. 88 88 Gull Lake & District Ambulance Corporatio 239 239 Hope's Home Incorporated 955 955 Imperial and District Ambulance Inc. 150 151 J.T. Ambulance Service Inc. 501 503 Kelvington Ambulance Care Ltd. 506 500 Libbie Young Centre Inc. 511 508 Lifeline Ambulance Service Inc. 2,254 2,247 M.D. Ambulance Care Ltd. 12,754 12,415 Marshall’s Ambulance Care Ltd - 960 McKerracher Support Services Inc. 153 153 Melfort Ambulance Care (1999) Ltd. 573 566 Midway Ambulance Care Ltd. 840 860 Parkland Ambulance Care Ltd. 3,348 3,272 Phoenix Residential Society Inc. 1,603 1,558
SHA Annual Report 2019-20 60 AppendixAppendix C Funded D: Funded Organizations Organizations (continued) (continued)
a rescribed HC s continued
2020 2019 s o dollars s o dollars