Canada Science and Technology Museum Corporation

Canada Science and Technology Museum Corporation AnnuAl RepoRt 06/07 ManageMentDiscussion overview This year’s highlight was a long awaited injection of government funding to address significant pressures on the organization. An announcement of $11.1 million in one-time funding over a three year period will allow the Canada Science and Technology Museum Corporation to redress some capital infrastructure concerns as well as health and safety issues on its three sites. The primary focus will be projects at the Canada Aviation Museum site, the one site owned by the Corporation with an approved long-term plan. The Corporation received some encouragement for a new Science and Technology Museum. The Minister of Heritage invited the new Chairman to present a revised plan for the proposed institution. Plans have progressed on this project, including discussions with the community and costing alternatives for the physical facility. We also received one-time funding of $4.3 million to offset previous year shortfalls and the 2006–2007 cost for operating the Canada Aviation Museum’s storage hangar. This funding has been crucial for the Corporation, as it is having dificulties meeting its mandate due to inflationary pressures and operating expenses for the storage facilities. The Corporation also succeeded in securing funds from Government for investment financing for a project to enhance the revenue-generating capacity at the Canada Aviation Museum and accelerate philanthropic efforts. This $4.5 million will be repaid to government from its new revenue streams, the surplus will be retained by the Corporation for long-term growth. 52 | Management Discussion Canada Science and Technology Museum Corporation AnnuAl RepoRt 06/07 anDanalysis The Corporation was encouraged by its attendance growth in 2006-2007.We have exceeded the 700,000 visitor mark and increased our market share by 2% in national museum visitation. The increase of 45,000 visitors was particularly significant this year since the market has decreased by 100,000 visitors. The growth can be partially attributed to the opening of the Food for Health exhibition at the Canada Agriculture Museum, a unique collaboration of Government departments and agencies concerned with Canadian health and food safety. The Canada Science and Technology Museum’s presentation of a forensic science exhibition Autopsy of a Murder and Lumière (the result of a tri-party agreement with Musée de la Civilisation in Quebec City and Science Centre of Montreal) also contributed to the increase in visitation. Our Web presence also continues to grow with an increase of 580,000 visits (30%), consisting of 8.09 million page views and an average duration of 8.27 minutes indicates that the reach is qualitative, not only quantitative. Innovative programming, highlighting our rich collection and staff expertise, has successfully engaged Canadians through on-site experiences, virtual programming and outreach efforts. strengths and issues The Collection The Corporation has the richest and most comprehensive scientific and technological collection in Canada. It is well positioned to take a leadership role in the area of scientific literacy, while also protecting Canada’s scientific and technological history through the artifacts it preserves for future generations. As the collection continues to grow, the Corporation faces significant challenges in cataloguing and providing adequate appropriate storage. Reaching Canadians The Corporation understands that, in order to remain relevant to all Canadians — while also taking its place as a national leader in the field of science and technology — it must reach out beyond the National Capital Region. The Corporation, therefore, has undertaken an extensive examination of outreach opportunities, and concluded that the use of the Internet, travelling exhibitions, and artifact loans are the most cost-effective means for it to achieve this objective. The most recent exhibition Food for Health has been designed to travel across Canada; suitcase-style exhibits will be prepared to tour smaller communities. Canada Science and Technology Museum’s most current exhibition on “Forestry” is booked to travel to Montreal and Quebec City with venues being negotiated in Western Canada. The Corporation has begun to survey, research and analyze its current Internet offerings in an effort to redevelop the Science and Technology website. Development in the on-line collection has continued to progress. Other web enhancements include Canadian Culture On-Line funded projects; Picturing the Past website launched during this past fiscal year. Two new web essays are in the planning stage and will be launched in the first half of 2007. The Corporation maintains a wealth of information and artifacts, and will continue to preserve this legacy and share it with Canadians and the world. Management Discussion | 53 Canada Science and Technology Museum Corporation AnnuAl RepoRt 06/07 expenses by Activity 18% 33% 35% 14% Support Activities (18%) Sharing Knowledge (35%) Heritage Preservation (14%) Accomodation (33%) Human Resources The Corporation’s main strength is its dedicated staff, which is committed to preserving and disseminating Canada’s rich scientific and technological heritage for the benefit of all Canadians. Succession planning will continue to be a priority for the Corporation with 25% of its population and 50% of management eligible to retire in the next five years. Financing As stated in the overview, the Corporation has received one-time funding to redress cumulative shortfalls, and capital remediation. The collection growth and inflation impact on the operations still needs to be addressed in order to stabilize its operation; securing funding for the storage facility at the Canada Aviation Museum continues to be a top priority for the Corporation. Efforts to self-generate revenue will continue concentrating our efforts to develop sponsorship opportunities along with a stronger focus on philanthropic ventures which have evolved over the year. Museum management sees these as being the two areas which will provide the highest return on investment. Facilities The Canada Aviation Museum buildings are the only structures occupied by the Corporation that were conceived and built to house a collection and welcome visitors. The public face of the Canada Science and Technology Museum is an aging building which has been modified from its original use as a bakery. The Canada Agriculture Museum received approval in 2006–2007 for a long-term site plan; it will require some building modifications and re-purposing of space to accommodate the growing clientele. The Corporation’s vast collection of over 40,000 artifacts is currently stored in industrial grade warehouses and has exceeded the buildings’ physical space. Our Business The Corporation’s business can be summarized in four main activities: Heritage Preservation – Collection management, conservation and research Sharing Knowledge – Dissemination of research related to the Corporation’s historically significant collection through educational and community programs, exhibitions and websites Accommodation – Housing and securing the collection, visiting public and office accommodations Support Activities – Governance and central support services, which include human resources, finance and museum administration. Financial Perspective The appropriation originally allocated by the federal government for 2006–2007 was $25.6 million, this was supplemented by one-time funding from government to address some health and safety issues and redress prior year shortfalls. The Corporation also received through the Canadian Culture On-Line program to assist in improving the access of our collection to Canadians. Total appropriation in our statements is reported on an accrual basis in the amount of $32.9 million. The Corporation received confirmation of the incremental funds in November; $2.8 million of the net income will flow to the balance sheet and redress the cumulative operating shortfalls. The balance will be reallocated to projects delayed during the fiscal year while waiting for the decision. 54 | Management Discussion Canada Science and Technology Museum Corporation AnnuAl RepoRt 06/07 comparison of Financial Results (in thousands of dollars) planned 2006/07 2005/06 2004/05 2003/04 ReVenues Parliamentary appropriation general Revenues total Revenues eXPenses Personnel accommodation Depreciation operations total expenses net Income (loss) eQuItY oF CAnADA $26,891 4,354 31,245 16,508 8,721 2,570 4,864 32,663 (1,418) $5,833 $32,891 4,307 37,198 18,209 7,625 2,438 5,080 33,351 3,847 $11,098 $27,408 3,788 31,196 16,919 8,373 2,453 5,800 33,545 (2,349) $7,251 $24,007 4,178 28,185 4,462 7,090 1,989 5,387 28,928 (743) $9,600 $24,730 4,160 28,890 15,268 6,318 1,902 5,212 28,700 190 $10,343 Revenues The Corporation has three main sources of funds; government appropriation, self-generated revenue/cost recovery, and contributions from philanthropy. This said, the philanthropic contributions amounting to $60,000 make up less than 1% of the overall source of funds. The Corporation participated in a study to review revenue-generating potential in the cultural sector. The results of this report will be used to develop strategies for enhancing self-generated revenue — despite the poor location and inadequate infrastructure. The Corporation’s main source of revenue (41%) continues to be admission and program fees. Efforts under the Nationally Recognized Leaders Pillar are continuing to increase our market share and overall attendance — aging facilities, limited resources for programs and exhibition renewal, along with the lowest promotional spending of the four National museums, make this particularly challenging. A direct correlation exists between attendance and commercial operations revenue. This category includes retail sales, Internet sales and food service operations accounting for $959 thousand in gross revenue. New sources of revenue include leasing office spaces at the Canada Aviation Museum and trailers at the Canada Science and Technology Museum. Facilities rentals were up by $149,000 compared to last year. The Corporate Development revenue includes membership,fundraising and sponsorship.The Corporation understands the importance of Source of Funds 72% 12% 16% 0% Contributions $60,000 (<1%) Revenue $4,247,000 (12%) Additional Government Funding $5,691,000 (16%) Base appropriation $25,577,00 (72%) Management Discussion | 55 Canada Science and Technology Museum Corporation AnnuAl RepoRt 06/07 Cost of operations 15% 30% 55% Revenue 17% 16% 41% 23% 3% Interest (3%) Corporate Development (16%) Commercial Operations (23%) Other Cost Recovery (17%) Admission (41%) partnerships, and has established an aggressive goal of $2.5 million in annual contributions from partners by 2009–2010.An inventory of the programs, exhibitions and visitor profiles has been taken to review possible links to industry in helping us reach this objective. Sponsorship revenue for the year came primarily from federal partners supporting the Canada Agriculture Museum’s newest exhibition Food for Health and its related programming. The membership program continues its successful growth with an all-time high achievement of $259,629 involving an estimated 26,000 individuals. The Museum members continue to be strong supporters of the Corporation. The Corporation’s foray into philanthropic activities has been limited by the resources available. Staffing turnover resulted in vacancies for most of the fiscal year in this area.As a result, we maintained annual appeals but didn’t expand them. The Corporation generated $133,500 through its appeals. Donations collected for special project trust accounts are considered revenue in the year the project funds are spent, in keeping with donor objectives. This year’s withdrawal of $60,000 from trust accounts is reported in the Income Statement. Cost of Operations The Corporation’s Programs (15%) total expenses Facility (30%) were $33.4 million Personnel (55%) compared to $33.5 million last year. Programs continued to be delayed pending the decision of the equity funding injection in the fourth quarter. The two main uses of funds are personnel costs at $18.2 million and accommodations required to safeguard the collection at $10.1 million. The remaining $5.1 million went toward collecting and preserving artifacts, continuing research, developing and delivering exhibition and programs,promoting the three Museums and administrative support. Personnel The Corporation paid a great deal of attention to personnel costs, which account for more 55% of total expenses. The new classification system, implemented to comply with the pay equity legislation which came into effect in 2005–2006, continues to be refined. Operating three sites results in a duplication of costs — admission desks, visitor services and protection services must be in place for each site for the health and safety of visitors. Succession planning will continue to be a priority for the Corporation with 25% of its staff and 50% of Senior Management eligible to retire in the next five years. The Corporation requires highly skilled and uniquely qualified individuals who are not readily available in the employment sector.A particular challenge for the Corporation will be finding the financial resources to train successors in an environment where salary dollars already consume a large proportion of our operating costs. 56 | Management Discussion ... - tailieumienphi.vn