How Do Canada Provinces Grade In Taxpayer Fiscal Transparency?

September 15, 2022 – Taxpayers and citizens need greater fiscal transparency from Canada’s federal, provincial and territorial governments, says the latest report from the C.D. Howe Institute.

In “The Right to Know: Grading the Fiscal Transparency of Canada’s Senior Governments, 2022,” William B.P. Robson and Nicholas Dahir graded these governments’ budgets, estimates and financial statements on how well they let legislators and voters understand their fiscal plans and hold them to account for fulfilling them. The grades range from A to D. While some of the governments present helpful and timely budgets and financial statements, others fall badly short.

The authors underline that budgets, estimates and financial statements must let interested but non-expert users find and understand and act on key information.

“Taxpayers’ and citizens’ ability to monitor, influence and react to how legislators and officials manage public funds is fundamental to representative government,” say Robson and Dahir. “We need to check that legislators and government officials are acting in the interest of the people they represent, and we need to respond if we conclude that they are acting negligently or in their own interest. Financial reports are key tools for monitoring governments’ performance of their fiduciary duties.”

While much of the financial information presented to legislators and the public by Canada’s governments has improved over time, the assigned grades reveal significant shortfalls. This year’s report card covers year-end financial statements for fiscal year 2020/21 and budgets and estimates for 2021/22. The results were as follows:

• Manitoba, British Colombia and the Northwest Territories trailed the the class with grades of D;
• The federal government got a D+ – which was actually an improvement from an F last year, when it failed to produce a budget;
• Newfoundland and Labrador also got a D+;
• Nova Scotia scored a C and Prince Edward Island scored a C+;
• Quebec scored a B- and Ontario scored a B;
• Nunavut, Saskatchewan, and New Brunswick each scored B+;
• Alberta and Yukon topped the class with grades of A and A- respectively.

These governments tax, spend and borrow hundreds of billions of dollars, and the fiscal impact of the COVID-19 pandemic will make their financial position all the more important in the future. The authors conclude: “This annual report card hopes to encourage further progress and limit backsliding. Canadians can get more transparent financial reporting and better fiscal accountability from their governments, if they demand it.” For the Silo, Lauren Malyk.

For more than 60 years, the C.D. Howe Institute has researched and published on policy challenges and potential solutions aimed at improving the performance of Canada’s economy and raising Canadians’ living standards.

Read the Full Report

Featured image via GIFT- The Global Initiative for Fiscal Transparency