November 13th 2018 – Baffling financial presentations hamper councillors, ratepayers and voters seeking to hold municipal governments to account, says a new report from the C.D. Howe Institute. In “Show Us the Numbers: Grading the Financial Reports of Canada’s Municipalities,” authors William B.P. Robson and Farah Omran criticize nearly all of Canada’s larger municipalities for numbers that are obscure, misleading, and just plain late.
“I often tell my students in public finance: Don’t be embarrassed if you can’t understand city budgets. It’s not you – it’s them,” said Robson, President and CEO of the Institute.
This report grades the financial presentations of major Canadian municipalities in their most recent budgets and financial statements. Of those assessed, Toronto, Durham Region, Quebec City, and Longueuil failed, providing little information in reader-friendly form. More happily, Surrey garnered an A+ for clarity and completeness of its financial presentation, York Region is a close second with an A, while Vancouver and Markham also performed well.
Among the major flaws in the financial accountability of the cities with the bottom marks were:
- Budgets that use different accounting than financial statements, making what should be simple comparisons of plans to past results, or results to past plans, hard or impossible;
- Burying of key budget numbers deep in budget documents where readers cannot easily find them, and may not recognize them if they do;
- Budgets voted after the fiscal year has already started, and financial statements released six months or more after the year had ended.
Accordingly, the report’s key recommendations are:
- Budgets should match financial statements so readers can easily make the relevant comparisons;
- Budgets and financial statements should present the key figures early and prominently
- Budgets and financial statements must be timely enough to give elected representatives meaningful control.
Cities deliver vital services to Canadians, Omran and Robson observe. It is time for them to raise their financial management to a level in line with their importance in Canadians’ lives.
The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.
For more information contact: William B.P. Robson, President and CEO, C.D. Howe Institute; Farah Omran, Junior Policy Analyst, C.D. Howe Institute; Laura Bouchard, Communications Officer, C.D. Howe Institute; at 416-865-9935 or email@example.com