Study ranks cities on budget and public disclosure

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The C.D. Howe Institute study has disclosed its results after studying the budgetary processes in cities across Canada and it turns out Toronto barely made the grade, with a C.

The institute ranked 28 Canadian cities and gave top marks to Surrey B.C., that just about made it passed Peel Region with an A-plus grade, up from a solid B last year.

C.D. Howe’s report “Fuzzy Finances: Grading the Reports of Canada’s Municipalities” argues that almost all of Canada’s bigger municipal governments “obscure financial reports” with inconsistent presentations of key numbers.

Those numbers are in annual budgets — the spending blueprints crafted by municipal councils and presented to the public using a different account system than that used for end-of-year financial statements, which record what actually happened with the city’s expenses and revenues.

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The researchers chided budget-makers for using cash accounting — which recognizes revenues when cash is received and expenses when they are paid — rather than accrual accounting, where revenues and expenses are recorded when earned, no matter when the money is actually received or paid out.

The think tank also gave lower grades to municipalities that present gross, rather than net, figures in budgets that it says understate both spending and revenues.

Peel Region did so well, he said, because politicians there set the budget and released financial statements quite early and gave residents information in an easy-to-understand format.

Other GTA rankings were:

• York Region: A-, up from a B+

• Markham: A-, up from a B

• Brampton: B-, down from an A-

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• Mississauga: B, same as last year

• Vaughan: B-, same as last year

• Durham: D-plus, same as last year

The reason why the institute conducts these rankings is to help municipalities improve their grades by encouraging them to make changes that will make it easy for residents to understand what exactly the budget is all about, how much revenue is collected, where tax dollars go and to be in the loop. It could lead to some residents writing in with some great suggestions. Getting more citizens to participate in healthy public debate and get involved is a great democratic practice and tradition and bringing that to fruition often starts with good communication starting with the budget. – CINEWS

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