Federal budget process lacks transparency, says national accountants’ association in new report 

The Certified General Accountants Association of Canada (CGA-Canada) says it’s time for greater transparency around the budget process, particularly with so-called surprise surpluses.

“Two years ago, the federal government conceded that the successive, larger-than-expected surpluses had eroded the credibility of the budget process, yet the process hasn’t materially changed,” said Anthony Ariganello, CGA-Canada’s President and CEO. “The entire budget process needs to be more transparent. It’s become far too difficult for Canadians to make sense of the practice and to fully understand how their tax dollars are being spent.”

Successive governments have identified debt reduction as a fiscal priority and have used a portion of Canada’s surpluses to pay down the national debt. Federal program spending, however, has consistently spiked in the last third of the fiscal year. “What becomes increasingly disquieting is that government seems to be compelled to build in surprise surplus methodology to pay down debt,” said Rock Lefebvre, CGA-Canada’s Vice-President of Research and Standards, and author of The Federal Budget Surplus: Surprise or Strategy?

A planned surplus is one that is incorporated into the projections presented in the budget. A surprise surplus occurs when the actual budgetary balance exceeds the planned surplus.

“You have to wonder whether these surpluses have allowed governments to be much less disciplined in their budgetary spending,” Ariganello noted. “The use of any federal surplus should be decided within the budgetary process, not as a consequence of poor planning.”

Although program spending can often garner public support for governments, it is not fiscally prudent to over-spend, emphasized the association. CGA-Canada has long urged governments to demonstrate fiscal prudence and to ensure that program spending generates the best value for taxpayers’ dollars.

Among the report’s other findings:

• Ottawa could have reduced the national debt by an additional $30 billion over the last decade, if its surprise surpluses had been used for that purpose.
• Canada’s fiscal forecasting is far less accurate than that of other countries;
• This country’s current mix of taxes is woefully inefficient, relying disproportionately on personal income taxes.