The C.D. Howe institute has ranked the financial statements of municipal governments across Canada and found the City of Surrey has the clearest presentation in the country.
Surrey earns an A- grade for its financial transparency, making it the only city in Canada to earn a grade better than a B. It scored well because its budgets are presented in a way that makes them understandable and clearly comparable to actual results.
Most other cities ranked poorly because their financial statements are confusing, with numbers presented using cash accounting, rather than the standard accrual basis used by accountants.
This lack of clarity can have real consequences when it comes to holding governments accountable for their actions.
“[The differences between how cities present their financial statements and budgets] have real-world consequences—notably budgets that exaggerate the costs of capital up front, thereby distorting investment decisions and obscuring the sustainability of city finances over time,” the report states.
“More generally, inconsistent presentations hamper the ability of legislators, ratepayers and voters to hold their municipal governments to account.”
The City of Vancouver earned a grade of B-. It received a lower score than Surrey because it did not present budget and actual numbers in the same way, making it difficult to measure performance.
The study found the cities with the clearest budgets, after Surrey, were Niagara (B), Brampton (B-), Halifax (B-), Mississauga (B-), Ottawa (B-), Vancouver (B-) and York (B-).
The cities with the worst financial statement clarity were Vaughan (F), Durham Region (D-), Toronto (D-), Windsor (D-) and Winnipeg (D-).
While municipal governments do not present their figures in a set fashion, federal and provincial government budgets and financial statements all follow a standard format that makes them relatively easy to understand and compare, C.D. Howe said.
