Impacts of IFRS Lunch and Learn June 28, 2011

- 2 - Project Update  IFRS decisions:  All decisions have been made: 10 disclosure choices 14 policy choices  OAG audit of the opening balance sheet complete  Since April 1, 2011, IFRS has been adopted as the basis of accounting for the Corporation

- 3 - IFRS Decision Summary

- 4 - Policy Decisions StandardDateDescriptionDecision Made IFRS 1 16-Sep-09PP&E: Deemed Cost Election Deemed cost election on real estate land and buildings True IFRS cost on all other assets IFRS 1 16-Sep-09Decommissioning costs electionEstimate the obligation at the transition date IFRS 1 16-Sep-09Borrowing costs electionApply IAS 23 from the transition date IFRS 1 16-Sep-09Application of IFRIC 4 Apply from the transition date (with assessment of pre leases) IFRS 1 16-Sep-09Business combinationsApply from the transition date IFRS 112-Nov-09 Election for different transition date subsidiaries Adopt CBC's transition date IFRS 1 10-Mar-10Financial instruments – designationNo changes in designation from current Canadian GAAP IFRS 1 10-Nov-10Employee benefits - transition approachFresh start approach IAS 2 12-Nov-09Inventory valuation methodologyValue at average cost IAS 1616-Sep-09PP&E post transition valuation methodologyAll asset classes on the cost basis IAS 1910-Nov-10Accounting for actuarial gains and lossesUse the Other Comprehensive Income (OCI) Approach IAS Mar-10 Financial instruments: Available-for-sale designation No changes in designation from current Canadian GAAP IAS Mar-10Financial instruments: Fair Value designationNo changes in designation from current Canadian GAAP IAS 4012-Nov-09Investment property valuationValue using the cost basis Approved by the Audit Committee

- 5 - Disclosure Decisions Disclosure TypeStandardDateDecision Made Cash flow statementIAS 712-Nov-09Net cash flow from operating activities determined by adjusting net profit Cash flow statementIAS 712-Nov-09 Interest and dividends received to be shown as an investing cash flow Cash flow statementIAS 712-Nov-09 Interest paid to be shown as a financing cash flow Note DisclosureIAS 1212-Nov-09 Tax – Reconciliation between tax expense and the product of accounting profit multiplied by the applicable tax rate Note disclosureIAS 2012-Nov-09 Grant income – Deferred capital funding will be disclosed gross from the capital asset to which it was provided Note disclosureIAS 2012-Nov-09 Grant income – Income funding will be disclosed as a credit to the income statement Note disclosureIAS 2112-Nov-09 The financial report will be reported in Canadian Dollars Note disclosure IAS 110-Mar-10Expenses classified by function Cash flow statementIAS 710-Mar-10The Indirect method will be used Income statementIAS 123-Feb-11Single statement of comprehensive income Approved by the Audit Committee

- 6 - Financial Impacts  The implementation of IFRS had financial impacts on the opening balance sheet in five areas: 1. Property and equipment 2. Pension plans and employee-related liabilities 3. Consolidation of the CBC Monetization Trust 4. Capitalization of Telesat satellite transponder lease 5. Allowance for doubtful accounts

- 7 - Property and Equipment  As a capital intensive organization, the implementation of IFRS had a significant impact on the accounting of our capital assets:  Real-estate land and buildings were revalued to their fair market value at transition resulting in an increase in our net book value of $162.4m  Real-estate buildings were parsed into five major components each with their own useful life for depreciation purposes Substructure65 years Shell30 years Interiors20 years Services25 years Building sitework15 years

- 8 - Property and Equipment  Asset policy updates:  Componetization policy guidance added  Componentization methodology is based on ATSM Uniformat II Classification for Building Elements (E ) major groups were noted before. More granular details also provided to assist in classification.  Derecognition guidance added  Derecognition is only applicable for disposals of assets or components > $100K (threshold)  With componentization it can be difficult to determine the original cost & A/D amounts to derecognize so a “proxy method” has been developed based on a current replacement value model. (Estimate original cost based on current value)  An Excel based tool has been developed to assist in calculation

- 9 - Property and Equipment  Asset policy updates:  Amortization assumptions must be be reviewed annually  New processes implemented since April 1, 2010 with Capital Process team  Derecognition of assets  Componentization for real-estate buildings  Annual review of amortization rates*  Annual review for impairment indicators* * Process will be updated to perform tasks quarterly, where necessary

Pension and Employee-Related Liabilities  The CBC/Radio-Canada Pension Plan is one of the most significant plans of any Canadian Crown Corporation  With the transition to IFRS, the actuarial valuation for accounting purposes was restated to reflect the new standard  Under IFRS, our actuarial liability decreased by $82.8m as of April 1, 2010.

Monetization Trust  IFRS required the consolidation of the CBC Monetization Trust with CBC/Radio-Canada  From an IFRS reporting standpoint, the assets monetized in the Trust and removed from our financial statements were reinstated and the gains made on the transaction eliminated for consolidated reporting purposes  The resulting entry impacted various asset and liability accounts with an adjustment to reduce retained earnings by $5.5m

Telesat Satellite Transponder Lease  Under IFRS, the criteria for the capitalization of a lease differ from that of Canadian GAAP.  Each significant lease was analyzed for classification as an operating lease or finance lease under IFRS.  All classifications previously made remained unchanged with the exception of our lease of seven satellite transponders from Telesat  At April 1, 2010 the lease of the transponders was capitalized as though it had always been accounted accordingly under IFRS:  Capitalization of finance lease$119.9m  Accumulated amortization(64.3m)  Obligations under finance lease(73.0m)  Opening retained earnings17.4m

IFRS finance leases  Terminology: IFRS uses the term “Finance Lease” not “Capital Lease”  IFRS does not evaluate leases based on the CGAAP “bright lines” (75% of life, 90% of fair value)  IFRS is subjective (“major” portion of the economic life, “substantially all” of the fair value)…no quantitative thresholds  Lease analysis tool was developed to help with the assessment  Asset policy has been updated. Capital lease policy will likely be eliminated.  IFRIC 4 / EIC-150 “Determining whether an Arrangement contains a Lease” are aligned…no process change

Allowance for Doubtful Accounts (AFDA)  AFDA provision is based on impairment guidance in IAS 39 – Financial Instruments  IFRS requires first doing an assessment to find evidence of impairment then determining impairment to recognize (allowance)  More detailed guidance has been added to Credit & Collection Policy as to how assess (assessment of uncollectability) and then measure the AFDA to recognize (likelihood of uncollectability).  Process has already been used and policy change vetted by SSC.

Training  Leases  IFRIC 4  Ad-hoc as required/requested