Op-Eds
Published in the Financial Post
The budgets that show a city’s plans for the upcoming fiscal year and the audited financial statements that report its results after year-end are crucial tools both for the city councillors who steward public funds and for the public that holds them accountable. But, as the C.D. Howe Institute’s latest scorecard on the transparency and accountability of Canada’s 32 largest municipalities reveals, many city budgets remain opaque. They are more likely to confuse councillors and the public than inform them.
Unlike their budgets, the financial statements of Canadian municipalities are comprehensible even to people who aren’t experts. They present revenues, expenses and the bottom-line…
In the book Zombie Economics, John Quiggin explained how dead ideas – assumptions about market economics refuted by the 2008-09 financial crisis – live on in the minds of many people, including those charged with cleaning up the mess. While not supported by evidence or analysis, these narratives persist as “dead ideas that still walk among us.” Why? Largely because they advance the interests of particular (typically elite) groups who want to believe in them and make them true.
Likewise, corporate governance best practices are typically based on intuition, opinion and rhetoric. Such thinking has been elevated – mandated by regulators and rated by a burgeoning class of governance experts for whom such standards become self-…
The 2023 fall economic statement projected large deficits through 2028-29 and a net debt-to-GDP ratio that rises in 2024-25 and then declines only slightly, remaining well above the prepandemic level through 2028-29. Interest payments eat up almost 14 per cent of revenue. The 2024 budget must correct this imprudent treatment of risk.
Debt’s risk is lost opportunity. When servicing costs rise, more tax dollars have to go toward financing the debt, leaving less room for more meaningful expenditure.
The federal government justified the deficits and debt by showing the net debt-to-GDP ratio declining through 2055-56. This is not credible.
First, high debt produces economic costs, even if sustainable under the narrow…
The annual panic over the City of Toronto budget is peaking. The 2024 version stands out in a bad way, with a double-digit tax increase proposed for homeowners and many businesses. Yet much of the ritual is familiar. For one thing, it is late: The city is already collecting and spending money council has not approved. Worse, the dire numbers from city staff last week are long on alarm and short on useful information.
Suppose you are preparing a year-ahead budget for your family, or a business or non-profit. You start with recent experience. Your last complete year is key, because you have actual revenue and expenses for that year, and know the difference between them – your surplus or deficit. The current year isn’t yet over –…
Before the release of the federal 2023 Fall Economic Statement, we laid out a framework for grading it. We hoped for transparency about the government’s finances, frankness about the economic and fiscal challenges, and a halt to populist tax measures. Sadly, the Statement presented by Finance Minister Chrystia Freeland falls short — often far short — on all these priorities.
Our overall grade for the 2023 Fall Statement is a D. It puts dozens of pages of political messaging ahead of the key numbers, avoids the serious challenges that require major shifts in policy and prefigures more of the same fiscal measures that have led to our current plight.
Our grading framework started with a simple request: Cut…
