Canada’s governments consistently miss spending and revenue targets

Canada’s federal, provincial and territorial governments have regularly missed budget spending and revenue targets during the last decade, with spending overruns of $48 billion combined, says a report by the C.D. Howe Institute’s Colin Busby and William B.P. Robson.

The study notes that these governments brought in far more revenue than anticipated in their budgets. “While caution in forecasting can explain some of the revenue overshoot,” notes Robson, “revenue and spending surprises, up or down, tend to occur together – more suggestive of opportunism than good fiscal management.”

However, the survey of financial reports does reveal some good news: In the second half of the past decade, the spending and revenues reported by Canada’s senior governments, at the end of each fiscal year, have tended to better match the projections in the budget at the beginning of the year than they did in the first half of the decade. The quality of reporting has also improved: Ontario, New Brunswick, Saskatchewan, and the federal government received A-level grades in this year’s rankings.

Among the governments receiving poor grades, Quebec, Newfoundland and Labrador, PEI, and the Northwest Territories each received a D grade, while Nunavut ranked lowest with an E. The report notes that Alberta, which earned a C-level grade in 2014, stands to score better in the future. Its 2015 budget contained numbers which should be reconcilable with the province’s public accounts for that year.

“While Canadian governments have done much to improve their reporting of, and stewardship of, public money as measured in this survey, there is still ample room to do better,” state the authors. “An intelligent and motivated Canadian should be able, with reasonable effort, to get a clear picture of what governments are planning to raise and spend, what they actually raised and spent, and how the results compared to the plans,” they conclude.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.