New U of T study analyses governments' strategies to balance their budgets
TORONTO, Dec. 9 /CNW/ - The Mowat Centre and the School of Public Policy & Governance at the University of Toronto have released a new research report, Shifting Gears: Paths to Fiscal Sustainability in Canada, documenting the strategies governments will use to return to balanced budgets.
"Canadian governments do not face a short-term fiscal crisis on par with some European and US state governments," says Matthew Mendelsohn, Director of the Mowat Centre.
"But the impending demographic challenges, expectations of sluggish economic growth and the structural nature of deficits in most provinces will require Canadian governments to undertake action to ensure fiscal sustainability," he adds.
The report surveys the strategies being used by governments around the world to return to balanced budgets in the wake of the global financial crisis of 2008 through the lens of three approaches: tax increases, spending cuts, and modernizing public services. The most promising strategies are identified.
According to Jim Alexander, Associate Partner, Advisory Services at KPMG, which supported the research, "The strategies and leading practices are applicable to individual organizations within all jurisdictions. Organizations can leverage global strategies that have already been proven, and adapt them for their particular situation."
Archie Johnston, National Industry Leader, Public Sector of KPMG adds "Canadian governments should focus their perspective on making the right choices for the medium- and long-term future, not simply on the present activities designed to 'clean up.' Yes, governments need to concern themselves with reducing or eradicating current fiscal problems, but they should do so in a manner that makes them more efficient and effective going forward."
"Governments can cut services and raise taxes. But they can also look to make short-term investments that modernize outdated policy frameworks and cumbersome service delivery models. This strategy could help governments prepare for the fiscal challenges to come," says Mendelsohn.
Shifting Gears is the first report to assess governments' strategies to return to fiscal balance. The Mowat Centre and the School of Public Policy & Governance will monitor governments' efforts around the world and issue a second report in 2011.
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Julie Bannerjea, Head of Media/PR