No Consistency Between the Estimates and the Budget Spending Projections: What Numbers Are To Be Believed?

On November 8, 2012, the President of the Treasury Board tabled Supplementary Estimates B for fiscal year 2012-13, which indicated that total estimates to date were down 2.0 per cent from the same period last year. He bragged about how the Government was controlling spending.  However, just four days later, the Minister of Finance, in his Economic and Fiscal Update, appeared to contradict his colleague by stating that total expenses for 2012-13 would be 3.9 per cent higher.

No reconciliation was provided to explain this discrepancy.  This leaves the impression that either the Government will embark on a massive spending spree before the end of the fiscal year, more cuts are coming or the Budget projections are inflated to ensure the deficit target will be realized if not bettered. Who should Canadians believe – “you’re not the same when you’re hungry Tony” or “green tie” Flaherty?

We have raised this issue, about the lack of a reconciliation between the Estimates and the Budget/Update expense projections, on numerous occasions (Improving Budget Accountability and Transparency: Parliament and Canadians Should Know What the Government is Planning to Spend but They Don’t. October 2012 and The Main Estimates and The Budget: No Transparency and No Accountability. March 2012:

Most of the difference is due to the fact that different accounting standards are being used.  The Budget projections primarily follow generally-accepted accounting principles set by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants.  The accounting standards underlining the Estimates have not evolved over time but have remained static, rendering comparisons with the Budget projections virtually impossible.  In addition, the Estimates are now usually tabled before the Budget, so that they are not up-to-date with the Budget projections. As a result, Parliamentarians and Canadians are left in the dark about Government spending. It is time that either the accounting principles used in the Estimates be consistent with those used in the Budget, or a detailed reconciliation be provided whenever the Estimates or Budget projections are updated.  

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