Corporate

24  | Workplace Safety & Prevention Services Workplace Safety & Prevention Services Notes to Financial Statements March 31, 2023 8 Monthly rental lease payments will be made based on agreed-upon amounts for fiscal 2024. During the year, the Corporation charged CHSI human resources service fees of $12,000 (2022 – $12,000). These transactions are in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties, and approximates the arm's length equivalent value. 13 Ministry of Labour, Immigration, Training and Skills Development Surplus funds retained by the Corporation must be used to support MLITSD's commitment to enhance health and safety in Ontario workplaces. No surplus funds can be used without written approval from MLITSD. MLITSD will notify the Corporation in writing in a timely manner regarding decisions related to proposed retention of surpluses. The use of surplus funds approved to be retained by the Corporation will be tracked by the Corporation and reported to MLITSD. Any amount not approved to be retained will be recovered by MLITSD. In the current year, MLITSD approved funding in the amount of $30,851,596 (2022 – $30,521,598), which includes a subsequent increase in funding of $330,000 (2022 – reduced funding of $908,912). MLITSD approved a deficit up to $3,481,406 (2022 – $3,227,886). 14 Economic dependence The Corporation is dependent on the MLITSD for funding a significant amount of its revenue based on annual budget submissions approved by the MLITSD. 15 Financial risk management The Corporation is exposed to certain financial instrument risks, such as credit risk and liquidity risk. Credit risk Credit risk is the risk one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Corporation's financial instruments that are exposed to concentrations of credit risk relate primarily to cash, investments and accounts receivable. The Corporation manages its exposure to this risk by maintaining its cash and investments with major Schedule I banks and, where feasible, obtaining prepayment for courses held. Accounts receivable are net of an impairment allowance of $23,840 (2022 – $24,431). Liquidity risk Liquidity risk is the risk the Corporation encounters difficulty in meeting its obligations associated with financial liabilities. Liquidity risk arises from accounts payable and accrued liabilities, exit benefits and commitments. The Corporation continues to focus on maintaining adequate liquidity to meet operating working capital requirements and capital expenditures.

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