2018-2019 Annual Report · 2020-02-11 · CDCS receives reimbursement from Agriculture and Agri-food Canada for eligible costs incurred for certain projects. c) Administration contract

2018-2019

Annual Report

Annual General

MeetingMonday

January 13, 2020Hall A, Meeting Room 1

Prairieland Park Saskatoon, Saskatchewan

Mandate

The Canary Seed Development Commission of Saskatchewan was established in 2006 under the Agri-Food Act, 2004 to represent Saskatchewan’s Canary seed growers.

THE CSDCS VISIONImproved Canary seed profitability through increased market diversity and crop innovation.

THE CSDCS MISSIONTo coordinate research and market use expansion for the advancement of the Canary seed industry for the benefit of growers and other stakeholders.

canaryseed.ca

1

2019 Board and StaffLucas sutherLandchairEston, SKC: 306.962.7279 [email protected]

chad hasKeYWadena, SKC: [email protected]

JustIn KOrteMuenster, SKC: [email protected]

rIchard LIndsaYArborfield SKC: [email protected]

darren YunGMannVice-chairSt. Gregor, SKC: 306.231.8733 [email protected]

ADVISORS pIerre hucL51 Campus DriveSaskatoon, SK S0H 2J0 C: 306.966.8667 [email protected]

BILL MaYPO Box 760 Indian Head, SK S0G 2K0 C: 306.695.5225 [email protected]

daVId nOBBsBox 339 Saskatoon, SK S7K 3L3C: [email protected]

EXECuTIVE DIRECTOR KeVIn hursh566 Adilman Drive Saskatoon, SK S7K 7H5 T: 306.933.0138 C: 306.222.0238 [email protected]

CSDCS OFFICE aGrIBIZ cOMMunIcatIOns cOrp.adeLe Buettner, General ManagerBay 6A – 3602 Taylor Street EastSaskatoon, SK S7H 5H9T: [email protected]

canaryseed.ca

Office hours: Monday to Friday 8:00 a.m. to 4:00 p.m.

2

csdcs annual General MeetingMonday, January `13, 2020Hall A, Meeting Room 1, Prairieland Park, Saskatoon, SK

Agenda

8:30 a.m. registration

8:50 a.m. Opening remarks and announcements

9:00 a.m. agronomic update

•Micronutrientand crop sequencing trials Bill May, AAFC Indian Head

•AphidEconomicThresholdResearch Tyler Wist, AAFC Saskatoon

9:50 a.m. canary seed and the canadian Grain commission

Patti Miller, Chief Commissioner, Canadian Grain Commission

10:30 a.m. coffee

10:45 a.m. csdcs annual Business Meeting

11:20 a.m. Market Outlook: canary seed and competing crops Chuck Penner, LeftField Commodity Research

12:15 p.m. Lunch

3

10:40 a.m.

call to Order and Opening remarks

approval of agenda

approval of Minutes

election results

Financial review Kevin Hursh, Executive Director

approval of Budget

research Kevin Hursh, Executive Director

annual report 2018-2019 and proposed activities 2019-2020 State of the Industry, Lucas Sutherland, Chair

resolutions

new Business

adjourn Meeting

4

csdcs annual Business MeetingMonday, January `13, 2020Hall A, Meeting Room 1, Prairieland Park, Saskatoon, SK

Agenda

•ThattheAgendaoftheJanuary13,2020AnnualBusinessMeeting be approved as presented.

* That the minutes of the January 14, 2019 Annual Business Meeting be approved as presented.

•ToappointanAuditChair.

•ThattheCSDCSauditedfinancialstatementsfortheyearendingJuly 31, 2019 be approved as presented.

•ThattheCSDCSappointTwigg&Companyasauditorfortheyear ending July 31, 2020.

•ThattheStateoftheIndustryreportbeapprovedaspresented.

•ThatTheCanarySeedDevelopmentCommissionofSaskatchewanformally request that Canary seed be included as an official crop under the Canada Grains Act, thereby bringing it under the licencing and bonding provisions of the Canadian Grain Commission.

5

csdcs annual Business MeetingMonday, January `13, 2020Hall A, Meeting Room 1, Prairieland Park, Saskatoon, SK

Motions to be Presented

6

Meeting held at canadian room, saskatoon Inn – saskatoon, sK

1. Meeting called to order by chair sutherland at 11:06aM

2. approval of the agenda

Motion #1 To approve the agenda as presented. Justin Korte/Darren Yungmann/Carried

3. approval of the Minutes

Motion #2 That the minutes of the January 8, 2018 meeting be approved as presented.

David Nobbs/Justin Korte/Carried

4. Financial review Hursh presented the audited financials and the 2019-2020 budget.

Motion #3 That Rick Lindsay be appointed audit chair for 2018-2019.

Justin Korte/Lyal Lee/Carried

Motion #4 That the Canaryseed Development Commission of Saskatchewan’s audited financial statements for the year ended July 31, 2018 be approved as presented.

Lyal Lee/Darren Yungmann/Carried

Motion #5 That the Canaryseed Development Commission of SaskatchewanappointTwigg&Companyasauditorfortheyear ending July 31, 2019. Lyal Lee/Chad Haskey/Carried

cdcs annual Business MeetingMonday, January 14, 2019SaskatoonInn&ConferenceCentre,Saskatoon,Saskatchewan

2019 Minutes

7

5. annual update Chair Sutherland provided a State of the Industry update.

Motion #6 That the State of the Industry report be approved as presented.

Darren Yungmann/Justin Korte/Carried

7. resolutions No resolutions

8. new Business

9. adjourn Meeting

Motion #8 To adjourn the January 14, 2019 Annual Business Meeting.

Darren Yungmann

8

TWIGG & COMPANY CHARTERED PROFESSIONAL ACCOUNTANTS 650 REGENCY CENTER

333 - 25th STREET EAST

L.D. SAFINUK B. Comm., CPA, CA SASKATOON, SK. S7K 0L4 M. LINGARD B. Comm., MPAcc., CPA, CA

TELEPHONE (306) 244-0808 FACSIMILE (306) 244-0004 www.twiggandcompany.com

CANARYSEED DEVELOPMENT COMMISSION OF SASKATCHEWAN

AUDITED FINANCIAL STATEMENTS

for the year ended July 31, 2019

9





Independent Auditors’ Report To the Board of Directors of Canaryseed Development Commission of Saskatchewan

Qualified Opinion We have audited the financial statements of Canaryseed Development Commission of Saskatchewan, which comprise the statement of financial position as at July 31, 2019, and the statements of operations, changes in net assets, and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. In our opinion, except for the possible effects of the matter described in the basis for qualified opinion paragraph, these financial statements present fairly, in all material respects, the financial position of Canaryseed Development Commission of Saskatchewan as at July 31, 2019, and its financial performance and its cash flows for the year then ended in accordance with accounting standards for not-for-profit organizations. Basis for Qualified Opinion The commission collects a levy from Saskatchewan producers through buyers of Canaryseed, the completeness of which is not susceptible of satisfactory audit verification. It was not practical for us to verify whether all buyers of Canaryseed produced in Saskatchewan have collected and remitted the required levy to the commission. Accordingly, our verification of these revenues was limited to the amounts recorded in the records of the commission. Therefore, we were not able to determine whether any adjustments might be necessary to revenue, excess of revenues over expenses and cash flows from operations for year ended July 31, 2019, current assets as at July 31, 2019 and July 31, 2018, and net assets at both the beginning and end of the July 31, 2019 and July 31, 2018 years. The audit opinion on the financial statements for the year ended July 31, 2018 was modified accordingly because of the possible effects of this limitation in scope. We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of Canaryseed Development Commission of Saskatchewan 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 to these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

10





Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing financial statements, management is responsible for assessing Canaryseed Development Commission of Saskatchewan’s ability to continue as a going concern, disclosing, as applicable, matters related to the going concern and using the going concern basis of accounting unless management either intends to liquidate Canaryseed Development Commission of Saskatchewan or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing Canaryseed Development Commission of Saskatchewan’s financial reporting process. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but it 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 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 misstatements of the 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.

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 Canaryseed Development Commission of Saskatchewan’s internal control.

11





Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of the 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 Canaryseed Development Commission of Saskatchewan’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the 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 auditors’ report. However, future events or conditions may cause Canaryseed Development Commission of Saskatchewan to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements,

including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

12





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 that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may be reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. “DATE” Saskatoon, Saskatchewan Chartered Professional Accountants

13


STATEMENT OF FINANCIAL POSITION as at July 31, 2019

With comparative information for 2018 2019 2018 CURRENT: Cash $ 139,719 $ 305,758 Restricted cash 236,395 - Short-term internally restricted investments (Note 6) 113,608 232,060 Accounts receivable (Note 3) 19,374 32,175 Prepaid expense 42,338 1,680 551,434 571,673 LONG-TERM: Long-term internally restricted investments (Note 6) - 111,163 $ 551,434 $ 682,836 LIABILITIES CURRENT: Accounts payable and accrued liabilities (Note 4) $ 23,093 $ 19,557 Deferred contributions (Note 5) 8,304 88,499 31,397 108,056

NET ASSETS INTERNALLY RESTRICTED (Note 6) 350,003 343,223 UNRESTRICTED 170,034 231,557 520,037 574,780 $ 551,434 $ 682,836 COMMITMENTS (Note 11) APPROVED BY THE BOARD: Director Director

14


STATEMENT OF OPERATIONS for the year ended July 31, 2019

With comparative information for 2018 2019 2019 2018 Budget Actual Actual REVENUE: (unaudited) (Note 7) Producer check-off fees (Note 8) Fees $ 250,000 $ 261,506 $ 245,701 Refunds ( 15,000) ( 14,477) ( 11,387) Net 235,000 247,029 234,314 Interest 4,000 7,310 5,504 Miscellaneous - - - Agriculture Marketing Program (AMP) funding 20,000 15,127 35,598 Canadian Agriculture Adaptation Program (CAAP) - 7,153 - Ministry of Agriculture funding - 53,755 - 259,000 330,374 275,416 EXPENSES: Research and development (Note 12) 215,000 223,031 54,216 Market development - 30,374 75,266 Administration contract (Note 9) 14,000 10,363 11,052 Board of directors 13,500 14,576 14,808 Communications 14,000 8,771 5,733 General and administration 30,800 35,512 28,092 Annual meeting 12,000 10,503 9,710 Election 500 75 - Management fees (Note 10) 52,000 51,912 50,400 351,800 385,117 249,277 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENSES FOR THE YEAR $( 92,800) $( 54,743) $ 26,139

15


STATEMENT OF CHANGES IN NET ASSETS for the year ended July 31, 2019

With comparative information for 2018 Internally 2019 2018 restricted Unrestricted Total Total BALANCE – BEGINNING OF YEAR $ 343,223 $ 231,557 $ 574,780 $ 548,641 Transfers 6,780 ( 6,780) - - Excess (deficiency) of revenue over expenses for the year - ( 54,743) ( 54,743) 26,139 BALANCE – END OF YEAR $ 350,003 $ 170,034 $ 520,037 $ 574,780

16


STATEMENT OF CASH FLOWS for the year ended July 31, 2019

With comparative information for 2018 2019 2018 OPERATING ACTIVITIES: Excess (deficiency) of revenue over expenses for the year $( 54,743) $ 26,139 Changes in non-cash working capital Balances related to operations: Accounts receivable 12,801 14,726 Prepaid expenses ( 40,658) ( 99) Accounts payable and accrued liabilities 3,536 ( 16,361) Deferred contributions ( 80,195) - ( 104,516) ( 1,734) Total from operating activities ( 159,259) 24,405 INVESTING ACTIVITIES: Net disposals (purchases) of investments ( 6,780) ( 5,173) Total from investing activities ( 6,780) ( 5,173) INCREASE (DECREASE) IN CASH AND EQUIVALENTS FOR THE YEAR ( 166,039) 19,232 CASH AND EQUIVALENTS, BEGINNING OF YEAR 305,758 286,526 CASH AND EQUIVALENTS, END OF YEAR $ 139,719 $ 305,758 CASH AND EQUIVALENTS CONSISTS OF: Cash 139,719 305,758 $ 139,719 $ 305,758

17


NOTES TO FINANCIAL STATEMENTS for the year ended July 31, 2019

1. AUTHORITY:

The Canaryseed Development Commission of Saskatchewan (“CDCS”) was established on February 23, 2006, pursuant to The Canaryseed Development Plan Regulations (“Regulations”), under the authority of The Agri-Food Act, 2004. The purpose of CDCS is to assist in growing the canaryseed industry through research, communications and market development programs. The activities of CDCS are funded primarily by a check-off fee charged on canaryseed sales from canaryseed production in Saskatchewan.

2. SIGNIFICANT ACCOUNTING POLICIES: The financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit organizations in Part III of the CPA Canada Handbook and include the following significant accounting policies:

a) Revenue recognition:

Producer check-off fees are recognized upon receipt of the Buyer’s report. Refunds are recognized when refund applications are received from producers and the requested refund has been agreed to check-off fee records.

The Commission follows the deferral method of accounting for contributions, which include government funding and grants. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred or restrictions met. Unspent amounts are included in deferred contributions. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Interest, dividends, and other revenue are recognized as earned.

b) Research and development projects:

Expenses are recognized when projects are approved, and the recipient has met eligibility criteria. Funds advanced to recipients prior to eligibility criteria being met are recorded as advances. CDCS receives reimbursement from Agriculture and Agri-food Canada for eligible costs incurred for certain projects.

c) Administration contract expense: Administration contract expense is a fee charged by the Agriculture Council of Saskatchewan

(“ACS”), to CDCS for administering the check-off fee program. The fee includes a charge for time spent by ACS staff and a share of ACS’s overhead costs. The expense is recognized as the service is received.

18



2. SIGNIFICANT ACCOUNTING POLICIES (continued):

d) Financial instruments:

The Commission initially measures its financial assets and financial liabilities at fair value. It subsequently measures all its financial assets and financial liabilities at amortized cost, except for investments in equity instruments that are quoted in an active market, which are measured at fair value. Changes in fair value are recognized in the statements of operations in the period incurred.

Financial assets subsequently measured at amortized cost include cash and accounts receivable. Financial liabilities subsequently measured at amortized cost include accounts payable and accrued liabilities and deferred contributions. The fair value of the cash, accounts receivable, and accounts payable and accrued liabilities approximates their carrying value due to their short-term nature.

e) Use of estimates:

The preparation of financial statements in conformity with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are reviewed periodically and, as adjustments become necessary, they are reported in excess of revenues and expenses in the periods in which they become known.

Significant estimates include, but are not limited to, the valuation of deferred contributions,

and accruals for certain revenues and expenses. f) Income taxes: The Commission qualifies as a tax-exempt organization under section 149 of the Income Tax Act. g) Contributions in-kind:

Contributions in-kind are recorded at fair value for goods or services used in the normal course of operations that would otherwise have been purchased.

h) Cash and cash equivalents:

Cash and cash equivalents consist of balances with banks and short-term investments with maturities of three months or less.

19



3. ACCOUNTS RECEIVABLE: The accounts receivable balance consists of the following:

2019 2018 Levies receivable $ 18,659 $ 30,294 Grants receivable 715 1,881

$ 19,374 $ 32,175

4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES: The accounts payable and accrued liabilities balance consists of the following:

2019 2018 Trade payables $ 2,631 $ 2,802 Research and development payables - 262 Levy refunds payable 15,356 11,387 Accrued liabilities 5,106 5,106

$ 23,093 $ 19,557

5. DEFERRED CONTRIBUTIONS:

The Commission receives funding from the Ministry of Agriculture and the Diverse Field Crop Cluster to be held, administered and distributed in accordance with the related funding agreements. Deferred contributions related to expenses of future periods represent unspent externally restricted funding for the purposes of paying operating expenditures in future periods. In the current year, The Commission repaid $34,744 of the previously deferred contributions due to no longer requiring the funds.

2019 2018

Opening deferred contributions for expenses of future periods $ 88,499 $ 88,499 Contributions during the year: Diverse Field Crop Cluster (DFCC) 8,304 -

Less: Amounts recognized as program expenses (ADF) ( 53,755) - Unspent funds repaid to the Ministry of Agriculture ( 34,744) -

Ending deferred contributions for expenses of future periods $ 8,304 $ 88,499

The deferred contributions and revenue relates to the following:

Ministry of Agriculture (ADF) $ - $ 88,499

Diverse Field Crop Cluster (DFCC) 8,304 -

$ 8,304 $ 88,499

20


NOTES TO FINANCIAL STATEMENTS

for the year ended July 31, 2019

6. INTERNALLY RESTRICTED INVESTMENTS:

2019 2018 Months to

Maturity Market

Value ($)

Yield to Maturity

(%)

Market Value

($)

Yield to Maturity

(%) Operating investments: Cash Short-term guaranteed investment certificates

-

2

236,395

113,608

-

2.20

-

232,060

-

1.50

Long-term guaranteed investment certificates

-

-

-

111,163

2.20

350,003 343,223

The Commission has internally restricted net assets for the completion of certain projects and to refund the check-off fees in the event of the disestablishment of the Commission.

During the current year $6,780 (2017 - $3,887) has been internally restricted. Any investment income

earned on the internally restricted funds have been allocated to the internally restricted net asset balance. 7. BUDGET: The Board approved the 2018/2019 fiscal year budget on November 3, 2017. The budget figures included

in the accompanying financial statements are unaudited.

8. PRODUCER CHECK-OFF FEES: Under the Regulations, each buyer of canaryseed is required to remit to CDCS a check-off fee of $1.75 per

net tonne of canaryseed marketed upon final settlement to producers. Producers can request a refund of check-off fees paid from August 1 to July 31 by submitting a refund application by August 31.

9. ADMINISTRATION CONTRACT:

The Agriculture Council of Saskatchewan Inc. charged CDCS $ 10,363 (2018 - $11,052) for administering the check-off fee program and the business activities of CDCS of which $981 (2018 - $975) is included in accounts payable.

21



10. MANAGEMENT FEES: During the year, the Commission entered into a contract with Hursh Consulting & Communications Inc.

and AgriBiz Communications Corp. for management services and rent. This contract began on August 1, 2017 and will continue for three years with the option to renew by any or all parties. Annual payments due in each year are as follows:

11. RESEARCH COMMITMENTS:

The Commission is committed to funding research and development projects over several years to benefit

the Canaryseed industry. Annual payments due in each of the next five years are as follows:

Year ending July 31: 2020 61,659

Year ending July 31: 2020 117,307 2021 108,342 2022 116,454 2023 2,640 2024 -

22



12. RESEARCH AND DEVELOPMENT: The research and development expense is comprised of the following:

2019 2018 University of Saskatchewan (Breeding and germplasm development) $ 128,500 $ 20,000 Agriculture and Agri-Food Canada (The Effects of Macro and Micro Nutrients on the Yield and Development of Canaryseed) 10,000 - Agriculture and Agri-Food Canada (Crop Sequencing of Large Acreage Crops and Special Crops) - 10,000 Agriculture and Agri-Food Canada (Impact of aphids on canaryseed) - 20,000 University of Saskatchewan (Glabrous hulls in livestock diets) 7,690 - Ministry of Agriculture (Allergenicity Considerations in Glabrous Canary Seed) 51,130 - Other research and development expenses 25,711 4,216

$ 223,031 $ 54,216

13. FINANCIAL INSTRUMENTS: The Commission as part of its operations carries a number of financial instruments. It is management’s

opinion that the Commission is not exposed to significant interest, currency or credit risks arising from these financial instruments except as otherwise disclosed.

Credit risk

The Commission is exposed to credit risk from potential non-payment of accounts receivable. Most of the

accounts receivable were collected shortly after year-end. Interest rate risk

Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a

change in the interest rates. Changes in market interest rates may have an effect on the cash flows associated with some financial assets and liabilities, known as cash flow risk, and on the fair value of other financial assets or liabilities, known as price risk. The Commission is exposed to interest rate risk on its investments.

23





INDEPENDENT PRACTITIONER’S REASONABLE ASSURANCE REPORT ON

COMPLIANCE

To the Board of Directors of Canaryseed Development Commission of Saskatchewan We have undertaken a reasonable assurance engagement of Canaryseed Development Commission of Saskatchewan's compliance during the period August 1, 2018 to July 31, 2019, with the provisions of the following legislative and related authorities (“the Agreements”) pertaining to its financial reporting, safeguarding agency resources, spending, revenue raising, borrowing and investing activities.

The Agri-Food Act, 2004 The Canaryseed Development Plan Regulations Commission Orders #07/16 to #12/16

Management’s Responsibility Management is responsible for Canaryseed Development Commission of Saskatchewan’s compliance with the specified requirements of the Agreements. Management is also responsible for such internal control as management determines necessary to enable Canaryseed Development Commission of Saskatchewan’s compliance with the specified requirements. Our Responsibility Our responsibility is to express a reasonable assurance opinion on Canaryseed Development Commission of Saskatchewan’s compliance based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with the Canadian Standard on Assurance Engagements 3531, Direct Engagements to Report on Compliance. This standard requires that we plan and perform this engagement to obtain reasonable assurance about whether the entity complied with the specified requirements, in all significant respects. Reasonable assurance is a high level of assurance, but it is not a guarantee that an engagement conducted in accordance with this standard will always detect a significant instance of non-compliance with specified requirements when it exists. Instances of non-compliance can arise from fraud or error and are considered significant if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users of our report. A reasonable assurance compliance reporting engagement involves performing procedures to obtain evidence about the entity’s compliance with the specified requirements.

24





INDEPENDENT PRACTITIONER’S REASONABLE ASSURANCE REPORT ON COMPLIANCE

(continued from previous page)

The nature, timing and extent of procedures selected depends on our professional judgement, including an assessment of the risks of significant non-compliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a basis for our opinion. Our Independence and Quality Control We have complied with the relevant rules of professional conduct/code of ethics applicable to the practice of public accounting and related to assurance engagements, issued by various professional accounting bodies, which are founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentially and professional behaviour. The firm applies the Canadian Standard on Quality Control 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance Engagements and, accordingly, maintains a comprehensive system of quality control, including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Opinion In our opinion, Canaryseed Development Commission of Saskatchewan has complied with the specified requirements established in the Agreements during the period of August 1, 2018 to July 31, 2019, in all significant respects. We do not provide a legal opinion on Canaryseed Development Commission of Saskatchewan’s compliance with the specified requirements. “DATE” Saskatoon, Saskatchewan Chartered Professional Accountants

25





INDEPENDENT AUDITORS’ REPORT To the Board of Directors of Canaryseed Development Commission of Saskatchewan: We have audited the Canaryseed Development Commission of Saskatchewan’s control as of July 31, 2019 to express an opinion as to the effectiveness of its control related to the following objectives:

(1) To safeguard agency resources. That is, to ensure its assets are not lost or used inappropriately; to ensure it does not inappropriately incur obligations; to establish a financial plan for the purposes of achieving it financial goals; and to monitor and react to its progress towards the objectives established in its financial plan.

(2) To prepare reliable financial statements.

(3) To conduct its activities following laws, regulations and policies related to financial reporting, safeguarding agency resources, revenue raising, spending, borrowing and investing.

Management’s Responsibility The Organization’s management is responsible for maintaining effective control over the objectives stated above.

Auditors’ Responsibility Our responsibility is to express an opinion based on our audit as to the effectiveness of its control related to the following objectives:

(1) To safeguard agency resources. That is, to ensure its assets are not lost or used inappropriately; to ensure it does not inappropriately incur obligations; to establish a financial plan for the purposes of achieving it financial goals; and to monitor and react to its progress towards the objectives established in its financial plan.

(2) To prepare reliable financial statements.

(3) To conduct its activities following laws, regulations and policies related to financial reporting, safeguarding agency resources, revenue raising, spending, borrowing and investing.

(continued on next page)





INDEPENDENT AUDITORS’ REPORT To the Board of Directors of Canaryseed Development Commission of Saskatchewan:

(continued from previous page)

We used the control framework developed by The Chartered Professional Accountants of Canada (“CPA Canada”) to make our judgments about the effectiveness of the Canaryseed Development Commission of Saskatchewan’s control. We did not audit certain aspects of control concerning the effectiveness, economy and efficiency of certain management decision-making processes.

CPA Canada defines controls as comprising those elements of an organization that, taken together, support people in the achievement of the organization’s objectives. Control is effective to the extent that it provides reasonable assurance that the organization will achieve its objectives.

We conducted our audit in accordance with the standard for audits of internal control over financial reporting set out in the CPA Canada Handbook – Assurance. This standard requires that we plan and perform the audit to obtain reasonable assurance as to the effectiveness of Canaryseed Development Commission of Saskatchewan’s control related to the objectives stated above. An audit includes obtaining an understanding of the significant risks related to these objectives, the key control elements and control activities to manage these risks and examining, on a test basis, evidence relating to control.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Control can provide only reasonable and not absolute assurance of achieving objectives reliably for the following reasons. There are inherent limitations in control including judgement in decision-making, human error, collusion to circumvent control activities and management overriding control. Cost/benefit decisions are made when designing control in organizations. Because control can be expected to provide only reasonable assurance, and not absolute assurance, the objectives referred to above may become ineffective because of changes in internal and external conditions, or that the degree of compliance with control activities may deteriorate.

Opinion In our opinion, based on the limitations noted above, Canaryseed Development Commission of Saskatchewan’s control was effective, in all material respects, to meet the objectives stated above as of July 31, 2019 based on the CPA Canada criteria of control framework.

(continued on next page)





INDEPENDENT AUDITORS’ REPORT

To the Board of Directors of Canaryseed Development Commission of Saskatchewan:

(continued from previous page) We have also audited, in accordance with Canadian generally accepted auditing standards, the financial statements of the Canaryseed Development Commission of Saskatchewan, which comprise the statement of financial position as at July 31, 2019, and the statements of operations, change in net assets, and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. We have issued our report dated “DATE” which is the same date as the date of the report on the effectiveness of internal controls. “DATE” Saskatoon, Saskatchewan Chartered Professional Accountants

28

Budget 2019/2020CDCS Draft Budget 2020 - 2021

2020-2021Draft Budget

Projected RevenuesProducer check-off fees

Fees 250,000$ Refunds 15,000$

Net 235,000$

AMP Funding 20,000$CAP Funding 6,653$Interest and other income 4,000$

Total Projected Income 265,653$

Projected ExpendituresResearch projectsResearch HUCL 10,000CDC Breeding (Hucl) 90,000Agronomy (May) 20,000AMP Project 40,000Diverse Field Crop Cluster - CAP 25,000Dehulling application 5,000 Total Research Expenses 190,000

CommunicationsAnnual Meeting 12,000Newsletter 10,000Website 2,000OtherTotal Communications Expenses 24,000

Director ExpensesDirector Expenses 5,000.00Director Per Diem 10,000.00Total Director Expenses 15,000.00

AdministrationBank Charges 500.00Board Meeting Expenses 2,000.00Bookkeeping 9,000.00Election 1,000.00Insurance 1,700.00Legal and Audit Fees 6,000.00Management 52,000.00Management Expenses 1,000.00Memberships / Subscriptions 1,500.00Office Expense 4,000.00Office Rent 7,200.00Service Contract Levy Central 12,000.00

Total Administration Expenses 97,900

Total Expenditures 326,900

Surplus (Deficit) for the year (61,247)

29

Payee List August 1, 2017 - July 30, 2018

Canaryseed Development Commission of SaskatchewanPayee List

August 1, 2017 - July 31, 2018

PAYEE LIST August 1, 2018 July 31, 2019

Canary Seed Development Commission ofSaskatchewan

Personal Services (Threshold $2,500)Clancy, K Honorariums 400Haskey, C Honorariums 2,000Korte, J Honorariums 400Lindsay, R Honorariums 2,000Nobbs 1,200Sutherland, L Honorariums 2,000Yungmann, D Honorariums 2,800Total Honorariums 10,800

Clancy, K Reimbursement for Expenses 234Haskey, C Reimbursement for Expenses 703Korte 109Lindsay 1,210Sutherland, L Reimbursement for Expenses 1,073Yungmann, D Reimbursement for Expenses 792Total Reimbursements 4,120

Total Personal Services 14,920

Research and Development (Threshold $5,000)Agriculture and Agri Food Canada 58,505Diverse Field Crop Cluster 55,179Ministry of Agriculture 34,744Synthesis Network Ltd 6,133Sask Food Industry Development Centre 11,550University of Saskatchewan 102,190Misc. payments under $5,000 8,480Total Research and Development 276,781

Extension (Threshold $5,000)Saskatoon Inn 5,317Misc. payments under $5,000 12,955Total Extension 18,272

Supplier Payments (Threshold $20,000)AgriBiz Communications 21,869Hursh Consulting & Communications 51,912Misc. payments under $20,000 11,267Total Supplier Payments 85,048

Other Payments (Threshold $20,000)Refunds 14,831Total Other Payments

Total 409,852

, David - Honorariums

, J - Reimbursement for Expenses, R - Reimbursement for

14,831

Expenses

There were two big stories in the Canary seed sector as the 2018-19 crop year came to a close. One was bad news, the other good.

The bad news was the failure of ILTA Grain, leaving a number of unpaid farmers. For Canary seed, this is especially troubling since the crop is not licenced and bonded by the Canadian Grain Commission. It appears unlikely that Canary seed producers will receive any compensation and some are out hundreds of thousands of dollars.

The issue of whether Canary seed should be a regulated crop covered under the Canada Grains Act has been discussed at past AGMs, but there has never been a clear indication that producers supported a change. Some worried that the licencing and bonding costs of purchasing companies would be passed along to producers as lower prices. Others worried about the Canadian Grain Commission instituting unwanted grades. Furthermore, there was the concern that producers unpaid for other crops have not always recouped all of their money anyway.

In light of the ILTA issue, the AGM in January 2020 will deal again with the issue of licencing and bonding. A resolution will be presented so that registered producers may vote on the issue, thereby providing guidance to the board of directors.

The good news in Canary seed is the improvement in prices. In mid-harvest, prices improved to the 30 cent per pound range and, for a change, the improved value wasn’t fleeting. For producers with decent yields, Canary seed profitability has improved dramatically.

On the research side, the development of new varieties of Canary seed continues at the University of Saskatchewan’s Crop Development Centre and the Commission continues its support of this work spearheaded by Pierre Hucl. Unfortunately, dry conditions this spring meant poor emergence at the University’s plots in and around Saskatoon, therefore, hampering research progress in 2019.

Meanwhile, Bill May of Agriculture and Agri-Food Canada at Indian Head continued his work on micronutrients, crop sequencing and the economic threshold for aphid control.

Management Report 2019

30

By Kevin Hursh, Executive Director and Adele Buettner, General Manager

31

Development of the human food market for de-hulled glabrous Canary seed has been frustratingly slow. De-hulling capacity is limited and no marketing champion has emerged. However, the Commission continues to support projects aimed at facilitating human food consumption.

Through the work of the Saskatchewan Food Centre, we now have a better handle on the shelf life of de-hulled seed as well as flour. Nutrition fact sheets are posted at www.canaryseed.ca. Working through Synthesis Agri-Food Network, we have determined that Canary seed can be sold into the European market for food use without the need for further regulatory approvals.

And we have made a decision on branding. If you have a sharp eye, you may have noticed that we are now using two words and capitalizing the first word when referring to the crop. We’re going with “Canary seed” rather than “canaryseed” in all our literature.

In most scientific studies, it has always been two words and that is also the requirement for ingredient lists on food products. We’re also using a capital C to emphasize that Canary seed comes from the Canary Islands. This is similar to Brussels sprouts.

Market research has shown that food companies and many consumers are not enamored with a name that suggests birdseed. In food circles, we will use “Alpiste (Canary seed)” since Alpiste is the Spanish name by which many existing consumers know the crop.

Canary seed for human consumption is not driving market demand; nevertheless, it will be interesting to see what happens with contract prices for 2020 and seeded acreage next spring due to improved prices in the birdseed market.

Notes..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................32

Documents

2018-2019 Annual Report · 2020-02-11 · CDCS receives reimbursement from Agriculture and Agri-food Canada for eligible costs incurred for certain projects. c) Administration contract