TORONTO, Nov. 23, 2011 /CNW/ - A new study from the C.D. Howe institute
lifts the veil on opaque budgeting and routinely missed spending
targets in Canada's major cities. In "Holding Canada's Cities to
Account: An Assessment of Municipal Fiscal Management," Benjamin Dachis
and William Robson report groundbreaking research on major Canadian
municipalities, and grade cities on the clarity of their budgeting and
financial reporting, and on their records in hitting - or, more often,
missing - budgeted spending targets.
"Cities are the most visible level of government for most Canadians,
providing services such as waste collection, policing and transit. Yet
their budgets are the most opaque," said Mr. Dachis, a Policy Analyst
at the Institute.
Municipalities typically present numbers in their budgets that do not
match the numbers in their end-of-year financial reports, says Mr.
Robson, President and CEO of the Institute. "So councillors and
taxpayers who seek to hold these municipal governments to account face
a daunting task. Worse, when you do peer through the messy numbers, you
find that most cities routinely miss budget targets by large amounts."
Dachis and Robson also note, however, that amid the mixed record are
municipalities with clearer numbers and better records for spending
control. Leaders that earned "A"s for budget clarity are Surrey, BC,
and Markham and London in Ontario. Their performance, along with
improvements in financial reporting at the federal and provincial
levels in recent years, show that progress is possible.
To improve financial performance and budget clarity, say the authors,
Canadian cities should copy some of the past decade's budgeting reforms
by higher-order governments. Specifically, either of their own accord
or by provincial mandate, Canadian cities should:
Adopt accrual accounting in budgets;
Integrate operating and capital budgets;
Present multi-year budgets;
Report department-by-department results on the same basis as in budgets;
Show gross, rather than net revenues and expenditures.
These changes would create clearer, more consistent budgets and help
bring the financial management of Canada's municipalities into line
with their fiscal impact and their importance in Canadians' lives.
For the study go to: http://www.cdhowe.org/pdf/Backgrounder_145.pdf
SOURCE C.D. Howe Institute
For further information:
Benjamin Dachis, Policy Analyst;
William Robson, President and CEO,
C.D. Howe Institute