REVIEW OF DRAFT FINANCIAL STATEMENTS FISCAL 2020 The financial statements of the General Synod are a consolidation of the General Synod and the Missionary Society. General Synod has responsibility for administering the self-insured annuity program, as well as the business and the governance of the ministries of the church national. General Synod also has the fiduciary responsibility for the administration of the Consolidated Trust Fund (CTF), which has separate audited financial statements. CONSOLIDATED STATEMENT OF OPERATIONS REVENUE Overall revenue in 2020 was $10.4M, a decrease of $867k from prior year. The two major components causing the decrease were lower proportional gifts of $146k, and revenue of $587k from the meeting of General Synod in 2019 which did not repeat. Proportional giving contributions from dioceses continue to be the largest single source of revenue for General Synod. Proportional giving was $7,669k in fiscal 2020, $146k lower than prior year.

Significant decreases from prior year were seen in several dioceses: o Eastern Newfoundland -$75k

o Ottawa -$64k o Athabasca -$50k o Western Newfoundland -$50k

o Saskatoon -$30k

There were also significant increases over prior year: o New Westminster $82k representing a higher percentage contribution o Arctic $77k paying prior year arrears.

Other smaller variances combined for a net decrease of $36k. A trend of decreasing proportional gifts is evidence that dioceses are struggling to maintain their proportional giving commitments to General Synod. While some dioceses contribute at the formula rate of 26%, fewer than ever can afford to contribute at this level and contribute as they are able.

Other revenue was $1,272k, a decrease of $517k from prior year. The component parts of other revenue are disclosed in note 3 of the financial statements and are shown below. $000s 2020 2019 Grants and other contributions 466 679 COVID-19 Emergency Wage Subsidy 267 - Cost-sharing 228 273 Anglican Book Centre 224 202 Other 87 48 General Synod – 2019 -

$1,272 587 $1,789

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Grants and other contributions were $213k lower than prior year. Included on this line is spending of amounts previously deferred as well as funds spent by the Council of the North out of their deferred revenue. Healing fund grants were $70k lower than prior year. In Global Relations, reduced program expenditures were seen in CAPA for a reduction of $20k from prior year, and Cuba mission priorities $107k as 2019 was the last year of the formal relationship with that church and General Synod. General Synod applied for and received the Canada Emergency Wage Subsidy (CEWS) for two periods in 2020, amounting to $267k. Cost-sharing includes revenue from the Anglican Foundation and the Primate’s World Relief & Development Fund for shared services and shares premises costs, rent from the 4th floor of Church House, and sharing of one Global Relations staff person with the Episcopal Church (3 months in 2020 vs 9 months in 2019). Revenue from the meeting of General Synod in 2019 (meals and accommodations) of $587k did not repeat in 2020. Anglican Journal revenue was $1,037k, or $232k lower than prior year. Components are shown in the table below. Distribution revenue decreased due to the project to vet the subscriber list, which is now only about one third of what it was in 2019. The decrease in advertising revenue is consistent with a continuing pattern of lower revenue as it is becoming more difficult to sell advertising in print publications. A small amount of advertising revenue is earned from online advertising. $000s 2020 2019 Donations 442 466 Heritage Canada grant 450 452 Distribution revenue 90 236 Advertising revenue 53 113 Other 2

$1,037 2 $1,269

Resources for Mission revenue was $468k, an increase of $27k over prior year. Most of the increase was due to better performance of the mail campaign Giving with Grace which increased by 8.3% over prior year. EXPENSES Total expenses were $9.0M for the year, a decrease of $3.4M from prior year. The four major factors causing the decrease were:

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o Total expenses of the meeting of General Synod, Vancouver, July 2019 were $1,375k which did not repeat in 2020. General Synod meets every triennium and is planned to meet again in July 2022 in Calgary.

o Overall travel and travel related program expenses were $834k lower in 2020 vs 2019 due to the COVID-19 pandemic.

o Anglican Journal postage and printing expenses were $505k lower in fiscal 2020 as a result of the initiative to vet the subscriber list. The number of subscribers was 39,200 at December 2020, reduced from 117,500 at December 2019 i.e. about one third of what it had been.

o Overall salaries and benefits were $391k lower than prior year as positions that became vacant due to resignation, retirement or restructuring were not replaced.

Individual ministry areas are discussed below. Council of the North grants at $2.15 million, were unchanged from prior year. The amount has been unchanged since 2013.

Financial Management and Administration expenses were $1,365k in 2020, $19k lower than prior year. Components were:

o Finance area for $575k, major components being staffing of 4.6 full-time equivalents $483k, audit fees $56k, bank charges $14k and $12k for contract staff to a cover short-term health leave.

o Property management costs of $352k consisting of property taxes net of municipal tax rebate $95k, insurance (all lines of coverage) $83k, repairs and maintenance $52k, utilities $39k, cleaning and other building services $33k, elevator maintenance $23k, net parking costs $22k.

o Information technology $187k for one staff, a managed services provider arrangement $66k, telecommunications $16k, hardware and software costs $13k.

o Service and support expenses of $134k, for staffing $117k (1.2 full-time equivalents facilities staff and a full-time receptionist), photocopier lease and usage $10k, postage meter lease and usage $3k.

o Depreciation on fixed assets $116k. Anglican Journal expenses were $1.0M in 2020, a decrease of $0.7M from prior year. Contributing factors were: o Salaries and benefits were $458k in fiscal 2020, a reduction of $75k from prior year as one staff

person retired and was not replaced and one position was vacant for 8 months of 2020. o Until fiscal 2020, postage has been the largest single line item in Anglican Journal expenses

every year. Postage in fiscal 2020 was $288k vs. $714k in prior year. The decrease in postage was a result of lower subscriptions. Subscriptions were 39,200 in December 2020 vs. 117,500 in December 2019 – a reduction of two thirds. This came about as a result of the project conducted in 2019 to vet the subscriber list by requesting individuals to affirm their desire to receive the Journal.

o Diocesan share was $134k in 2020, a reduction of $25k from prior year. Diocesan share is the sharing of Anglican Journal donations, net of fundraising expenses, with diocesan papers. Diocesan share decreased in 2020 due to lower donations, as well as higher expense resulting from a review of expenses allocated to the Journal Appeal campaigns.

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o Printing expense was $99k in 2020, a reduction of $79k from prior year. This was a secondary effect of the reduced subscriber list, partially offset by higher printing expense arising from more printed pages in some Journal editions during the year.

o Printing and mailing of donation receipts was $30k for the year, a reduction of $4k from prior year.

o Remaining expenses were made up of insurance, software maintenance, advertising expense, freelance writing and photography.

Indigenous Ministries expenses were $722k for the year, reduced from $1,033k in prior year. This ministry area includes the office of the National Indigenous Anglican Archbishop as well as the Anglican Healing Fund (formerly reported under the General Secretary’s area). Staff salaries and benefits were $482k in fiscal 2020, a reduction of $115k from prior year due to staff vacancies in 2020. Travel in current year was $30k vs $218k in prior year; the reduction was entirely due to COVID-19. Healing fund grants in 2020 were $40k, while there were grants of $110k given in prior year. Other Program Initiatives in 2020 included: o Grants provided to external parties funded by income on externally restricted endowments and

spending of deferred contribution by Council of the North for a total of $284k [2019 - $207k].

o Staff restructuring costs $211k [2019 - $156k].

o Expenses of the Anglican Book Centre $116k, consisting of cost of goods sold, product management fees under the new distribution arrangement with Gilmore Global, and product write-offs prior to the transition to Gilmore Global.

o Archives $91k.

o Statistics officer through a staff-sharing agreement with a diocese $13k. Communications expenses were $620k in 2020, a reduction of $112k from prior year. The variance was mostly in the area of salaries and benefits, which were $581k in current year and $687k in prior year. Other expenses included telecommunications $19k and the video digitization project funded by the Ministry Investment Fund $18k. Governance expenses of $541k were $1,487k lower than prior year, mostly due to expenses incurred relating to the meeting of General Synod 2019 in Vancouver ($1,376k). Savings in travel due to the pandemic were $108k (staff travel, Council of General Synod, Planning and Agenda). Legal expenses were $28k lower than prior year. Primate and House of Bishops expenses were $511k in 2020 or $284k lower than prior year. Part of this decrease was due to lower staff costs $78k, as a staff position was vacant for part of 2020. The balance of the reduction was entirely due to reduced travel as a result of the pandemic. Global Relations expenses were $325k in 2020 vs. $632k in prior year. Variances were due to:

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o The longstanding relationship with the Cuban church ended in 2019. The Episcopal Church of Cuba decided a number of years ago to return to The Episcopal Church. Cuba received $107k in funding support in 2019.

o The very last Bishops in Dialogue meeting was held early in 2020 (before the pandemic), and cost $19k less than prior year.

o Reduction in staff costs with the retirement of one staff person in March 2020. The position will not be replaced.

o COVID-19 resulted in significantly lower travel expenses, $10k in 2020 vs. $52k in prior year. Faith, Worship and Ministry expenses were $321k, a decrease of $103k over prior year, due almost entirely to lower program travel costs as a result of COVID-19. Resources for Mission expenses were $288k, lower than prior year by $63k. Factors were:

o Diocesan share for Giving with Grace was discontinued in 2020; amount in 2019 was $26k o Lower use of contractor $10k. o Reduced administrative support $10k. o Lower postage $15k.

Contributions to affiliated entities were $282k in 2020. Contributions included the Anglican Communion Office $105k, KAIROS $84k, the Canadian Council of Churches $51k, and the World Council of Churches $41k. Public Witness for Social and Ecological Justice expenses were $152k, a decrease of $16k from prior year mostly due to travel cancelled as a result of the pandemic. Investment Income Investment income recognized in the consolidated statement of operations is earned on the unrestricted portion of General Synod’s investment in the CTF, as well as those endowments where investment income is unrestricted. Interest and dividends earned on unrestricted General Synod assets invested in the CTF are used to support the annual operating budget. Net realized capital gains and net unrealized market gains are not included in the budget as these will fluctuate from year to year, and will be negative in some years. Consolidated Trust Fund investment performance was 13.7% [2019 – 14.5%] vs benchmark performance of 9.6% [2019 – 14.3%] before investment management fees and other expenses. The components of investment income are shown in the following table. $000s

2020 2019

Interest and dividends 237 287 Realized capital gains, net 699 105 Unrealized market value gains 1,115 1,571 Total $2,051 $1,963

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Undesignated Legacies Undesignated legacies of $1.1M were received during 2020. One of the legacies received was exactly $1.0M. 100% of undesignated legacies are transferred to Internally Designated Net Assets as per the current Ministry Investment Fund (MIF) guidelines. CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS Transfers between unrestricted net assets and various internally designated net asset balances are

shown below. The total net transfer to restricted net assets from unrestricted net assets is

$2,678,927. Transfers are reflected in the Statement of Changes in Net Assets in the audited

financial statements. Please also see note 9 in the audited financial statements.

Balance $ Jan 1-2020 to (from) Dec 31-2020 Ministry Investment Fund 3,952,266 1,073,475 (155,704) 4,870,037 Amounts invested in capital assets 2,364,987 88,131 (116,119) 2,336,999 Provision for contingencies 1,614,098 1,600,000 - 3,214,098 Provision for Sacred Circle 417,795 150,000 - 567,795 Provision for General Synod - 2022 377,698 150,000 - 527,698 Healing Fund 500,000 - - 500,000 ACCRC returned funds 249,509 - (110,856) 138,653 Provision for Lambeth 30,002 - - 30,002 Other 1,512,230 - - 1,512,230 $ 11,018,585 3,061,606 (382,679) $13,697,512

Transfers to / (from) Internally Designated Net Assets were composed of the following individual items: o Unrestricted bequests of $1,073,475 were transferred to the MIF while $155,704 was

transferred to unrestricted representing funding for previously approved MIF projects. o The decrease in capital assets was made up of additions capital, reduced by amortization for the

year. o Transfer to the provision for contingencies of $1,600,000. o $150,000 was transferred to the Provision for the next meeting of Sacred Circle as planned. o $150,000 was transferred to the Provision for the 2022 meeting of General Synod as planned. o $110,856 was transferred from funds returned from ACCRC to fund the ministry of the

Reconciliation Animator. CONSOLIDATED STATEMENT OF FINANCIAL POSITION ASSETS Total assets were $34.0 million, an increase of $5.2 million over prior year.

The cash position at the end of fiscal 2020 was $4.7 million, $1.9 million higher than previous year-end. Cash is generally at its highest level at the end of the fiscal year, due to dioceses catching up

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with proportional gifts and appeals during the 4th quarter. Receipt of the $1.0 million bequest towards the end of the year contributed to the high cash balance, as well as cash savings from favourable variance to budget.

Accounts Receivable of $2,181k included $1,115k in fourth quarter income distributions from the CTF, $993k for amounts received and accrued subsequent to the year-end cut-off on account of proportional giving and donations received in January but postmarked in 2020, $73k in receivables due to the Anglican Journal.

Inventory of $56k represented goods held on consignment by Gilmore Global.

Prepaid expenses, at $146k were $14k higher than previous year-end.

Investments of $24.5 million represent the General Synod share of the investment in the Consolidated Trust Fund. The General Synod investment in CTF includes several components:

$1.4 M assets required to honour annuity contract commitments $5.9 M endowment assets $0.6 M deferred contributions $16.6 M unrestricted and internally designated assets

Car loans advanced by the Missionary Society were $96k at the end of fiscal 2020, slightly lower than prior year, the lowest balance in over 20 years.

Capital Assets net of depreciation at $2.3 million are gradually decreasing over time as the building, and furniture and equipment purchased when General Synod moved into premises at 80 Hayden Street are amortized. Annual amortization exceeds annual asset additions. LIABILITIES Accounts payable and accrued liabilities were $0.9 million at the end of fiscal 2020. Major components were trade payables, expense accruals, funds held on behalf of dioceses regarding the Lambeth conference delayed due to the pandemic, and accrual for staff vacation time earned but not taken.

Deferred Contributions at $4.5 million were $0.2 million higher than prior year-end.

With no new annuity contracts being issued, annuities will continue to decrease year over year. Annuities were $1.4 million at the end of fiscal 2020. The balance at the end of fiscal 2020 includes a provision of $64k for contracts for which the annual actuarial valuation indicated that assets are not expected to be sufficient to satisfy commitments to annuitants.

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NET ASSETS The composition of net assets is shown in the table below. $000s 2020 2019 Unrestricted 7,542 5,691 Internally designated (note 9) 13,698 11,019 Endowments 5,900 5,253 Total $27,140 $21,963

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