Pinocchio Index Shows Governments' Budget Overruns Total $82 Billion: C.D. Howe Institute

TORONTO, Sept. 15, 2011 /CNW/ - Total budget overruns for Canadian federal, provincial and territorial governments amounted to $82 billion over the past decade, revealing a continuing lack of accountability to voters about budget promises, according to a report released today by the C.D. Howe Institute. In "Impulse Spending: Canada's 2011 Fiscal Accountability Rankings," authors Colin Busby and William Robson compare what legislators vote for at budget time with what their governments actually spend in the ensuing fiscal year. They identify the governments with the best and worst records at keeping their budget promises.

"Fiscal pressures and sovereign debt concerns around the world are intensifying scrutiny of government finances," commented William Robson. "Even in Canada, where these pressures and concerns are less acute, federal and provincial fiscal controls could be better."

The study finds some Canadian governments still present budgets to their legislatures using different accounting than appears in their public accounts at year-end. Some present their public accounts far too late while others do not always receive an unqualified approval from auditors. Most, however, have improved their financial reporting over time - with Ottawa, Ontario and New Brunswick standing out - showing that progress is possible, and setting the mark for others to follow.

When it comes to the differences between budgets and results, spending overruns and missed revenue targets have been commonplace over the past decade, say the authors. Spending overruns - particularly in jurisdictions dependent on resource revenues - are so frequent and large that Canada entered the recent slump with debts and taxes higher than would have occurred if governments had fulfilled their budget promises. The worst performers among provinces have been Saskatchewan, Alberta and Prince Edward Island.

Canada's reputation for good fiscal management is deserved, they say, but events elsewhere are raising the bar. Legislators and citizens alike should insist on comparable presentations in budgets and public accounts, publication of results that is more transparent and timely, and hold governments more strictly to account when the year-end results - as is too often the case - are badly out of line with budget plans.

For the study go to: http://cdhowe.org/pdf/Backgrounder_142.pdf
For the Pinocchio Index go to: http://cdhowe.org/wp-content/uploads/2011/09/Pinocchio-Index.gif

SOURCE C.D. Howe Institute

For further information:

William Robson, President and CEO;

Colin Busby, Senior Policy Analyst,

C.D. Howe Institute, 416-865-1904; email: cdhowe@cdhowe.org


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