-A A +A

The latest C.D. Howe Institute annual report card on municipal financial reporting in Canada featured a dismal coincidence.

Regina and Saskatoon had the worst grades among the 31 cities whose budgets and annual reports we look at — the only Fs in the group.

Is there something about Saskatchewan — something in the water or the air — that condemns Regina and Saskatoon to fail this test of transparency and accountability? Does the C.D. Howe Institute have it in for Saskatchewan?

No and no — and for proof, Regina and Saskatoon don’t need to look far to see how to improve their marks. Not to Vancouver, which topped the cities class with A+, nor to Surrey or Quebec City, with As, nor to Richmond or Markham or Vaughan, with grades of A-. The example for Regina and Saskatoon could not be closer: it’s their own provincial government.

The C.D. Howe Institute also produces a report card on the quality and transparency of financial reporting by the federal and provincial governments. In the latest version of that report, Saskatchewan was a top performer. Its A- equaled the best scores among the senior governments. If its budget had not been late, Saskatchewan could have scored A+.

The gap between Fs for Regina and Saskatoon, and A-range grades for top cities and provinces is big. But one change can close it.

Readers of Saskatchewan’s provincial budget will find, right up front, a table that shows the province’s revenue, expense and bottom line in the latest two years for which final numbers are out, estimates for revenue, expense and the bottom line for the year about to end, and projections of revenue, expense and the bottom line for the upcoming budget year. All these numbers are comparable year to year, with consistent accounting.

The table is clearly labelled – no expertise in accounting or budgeting needed to understand the numbers. And it is on page 7.

That doesn’t sound like a big deal. It seems pretty basic. Let readers see, at a glance, whether the province expects revenues to go up or down, whether it expects expenses to go up or down, and whether it expects a surplus or a deficit on the bottom line.

It is no coincidence that Saskatchewan’s annual report after year-end presents similar numbers. A reader of Saskatchewan budgets and annual reports can easily see how close actual revenues, expenses and the bottom line came to the budget projections. From there, legislators, journalists and voters can quickly proceed to deeper questions, like whether revenue and expense should do what the budget projects, or whether results different from projections signal problems.

Readers of Regina’s and Saskatoon’s documents cannot do this. Both cities present their results in a format similar to Saskatchewan’s results, but their budgets are completely different. They present separate operating and capital budgets. They show services funded by fees separately from services funded by taxes.

Readers of their budgets cannot tell whether revenues or expenses will go up or down from the current year, or what the bottom line will be. Readers of their annual reports cannot find comparisons to budget projections with numbers that appeared in the budgets themselves. Proceeding to deeper questions about the wisdom of budget projections or the reliability of results is pretty tough when the basic numbers are a mystery.

Saskatchewan has not always topped the class in the C.D. Howe Institute’s report card on senior governments. As recently as 2018, Saskatchewan got a C. Regina and Saskatoon can improve also.

If they did, they would do more than join Vancouver, Surrey, Quebec City and the other A-range cities in the report. They would help councilors, journalists and voters understand municipal finances. They would promote confidence — among other surprises, people would see that both cities budget for, and achieve, surpluses. And they would inspire less cynicism from critics who find city budgets incomprehensible, and conclude that municipal finances are a mess.

There is nothing in Saskatchewan, or in the C.D. Howe Institute’s report, that dictates failing grades for Regina and Saskatoon. To improve from F — potentially all the way to A — they only need to do what the provincial government already does.

William Robson is the CEO of the C.D. Howe Institute, where Miles Wu is a Research Assistant.

Published in the Saskatoon StarPhoenix