Thursday, September 17, 2015

On unclear pictures

David Akin may have been right to point out that Justin Trudeau's response to the federal government's latest fiscal update was based on an avoidable lack of knowledge. But it's worth noting why it's so difficult for anybody to have an accurate picture of what's actually happened within the federal government - as Akin himself observes in a follow-up post:
In any given year, we won’t know what the final numbers are, including lapses, for the government as a whole and for individual departments until a document called the Public Accounts of Canada is tabled in Parliament. All during the budget year, several types of documents are tabled which update Parliamentarians and the public on the government’s spending plans. The Budget Plan is the best known and most widely covered but other less well-known documents with weird titles like Supplementary Estimates ‘C’ or Reports on Plans and Priorities are also important information-rich budget documents.  [A handy primer here if you want to dig deep on the federal government budget cycle] But it is the annual Public Accounts of Canada which provide the final definitive numbers for the federal government’s fiscal year and which closes the books on that fiscal year. Until the Public Accounts are published for fiscal year x, pretty much everything about fiscal year x is an educated guess by the Finance Department, the Parliamentary Budget Office or Treasury Board.  [Go deep on more info for The Public Acccounts at the Library of Parliament Web site]

We do have the Public Accounts of Canada for the 2013-2014 (FY14) fiscal year. But the Public Accounts of Canada for FY15 will not and cannot be published until after this federal election when the next Parliament convenes.

And here we have our conundrum so far as our debate about the surprise surplus in FY15. We have the Consolidated Financial Statements of the Government of Canada for the FY15. This is the document [pdf] that came out this week that told us about the surprise surplus for FY15. These statements are verified by the Auditor General. But this financial statement has only some general things to say about lapses and is not very much help in providing us detailed information about which departments or agencies left money on the table.
What Akin doesn't note is the difficulty in comparing one set of documents to another - which makes it (seemingly unnecessarily) difficult to actually see what money has been spent compared to what's been approved on a historical basis.

If one wants to compare the money actually spent in 2014-2015 compared to the previous year alone for a relatively short list of departments as well as a government-wide comparison of amounts spent to amounts budgeted, that information is indeed found in the consolidated financial statements which the Cons went out of their way to release in advance of today's economic debate.

But if you want to compare the funding approved for 2014-2015 to the amounts actually spent by department? Good luck with that, since the consolidated financial statements don't go to that level of detail, and the estimates (PDF) reviewed by Parliament (and supplemented as noted by Akin) are based on different accounting methodologies and classifications.

To take Veterans' Affairs funding as an example, the estimates indicate that funding for the year should be approximately $3.6 billion, while the consolidated financial statements indicate actual funding of just over $1 billion. 

To be clear, that doesn't mean that much veterans' affairs funding lapsed, as additional money was likely spent under other categories (largely transfer payments). But it does mean we have no way of directly comparing what the government actually approved for 2014-2015 with what was spent. And it's hard to see how anybody besides the Cons could be considered responsible for the selective release of information.

Nor do the consolidated financial statements offer any historical perspective on the comparison between approved and actual funding. It's possible for a department's spending to be up from one year to the next even as both numbers fall far short of what was debated and approved by Parliament. But you won't find that information without sifting through past documents - which themselves typically reflect at best a year's worth of historical data.

It's theoretically possible to make year-by-year comparisons between estimates and amounts spent by digging through a combination of financial statements, estimates and departmental plans and trying to trace the connections between various dollar figures. (Or alternatively, an MP can request that the information be prepared by a department.) But particularly in the context of an election campaign, we surely have to ask why the flow of information is set up to make it so difficult for anybody to put the government's self-serving headline numbers in context.

In sum, it's fair to ask opposition leaders to be responsible in commenting on the state of the public purse. But we shouldn't give the benefit of any doubt to a government going out of its way to blur the picture.

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