– The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies through research that is nonpartisan, evidence-based and subject to definitive expert review.
CANADA – Alberta and New Brunswick come out on top in the Institute’s latest report card on government financial reporting, with Prince Edward Island trailing the pack
In ‘Numbers You can Trust? The Fiscal Accountability of Canada’s Senior Governments, 2017‘, authors Colin Busby and William B. P. Robson assesses the quality of financial information published by Canada’s federal, provincial and territorial governments, and their success or failure in fulfilling their budget promises over the past 15 years.
“Despite some improvements, too many Canadian governments still present opaque numbers, fail to satisfy their legislative auditors, take too long to present budgets or report year-end results, and spend far more than they budgeted,” commented Robson.
“Our key question is whether an intelligent and motivated non-expert – a citizen, taxpayer or legislator – can get valid, timely and readily understood figures in governments’ budgets, estimates, and financial reports,” Busby explained. “In some jurisdictions, it is easy. In others, it is next to impossible.”
This latest edition of the Institute’s annual report on the fiscal accountability of Canada’s senior governments gives Alberta and New Brunswick grades of A+ for the quality and timeliness of their financial information. Ottawa and British Columbia also do well.
Newfoundland and Labrador and Nova Scotia, though not in the top tier, have improved markedly. Quebec (C+) and Prince Edward Island (C-) do relatively poorly among the provinces, and Northwest Territories and Nunavut present figures that would be a struggle even for experts.
Comparing budget commitments to actual results, the authors document 15 years of significant overshoots of both spending and revenue. On average, over all governments and all 15 years, governments spent 2.3 percent more than budgeted, which cumulates to a remarkable $69 billion. The Prairie provinces and the territories recorded the worst overruns; Ontario and Quebec did much better.
Over the same period, revenues also overshot projections by 2.3 percent annually, cumulating to $95 billion more than budgeted. Although the overshoots tended to get smaller over the 15 years, a suspicious pattern of in-year spending “surprises” coinciding with in-year revenue “surprises” suggests less than prudent fiscal management.
The authors conclude: “Governments should provide better financial documents, and voters and legislators need to use those documents to hold governments to account for their use of public funds.”
