Economic and Fiscal Update 2021: Issues for Parliamentarians

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Communications

Quotes

• The delay in the Government’s release of its audited financial statements has undermined parliamentarians’ ability to meaningfully scrutinize proposed Government spending.

• Consistent with the PBO’s mandate to promote fiscal transparency, I am recommending that Parliament consider legislative amendments to require tabling of the Government’s financial statements no later than September 30, which would avoid a repeat of the long delay experienced in 2021.

• Our report shows that since the start of the pandemic, the Government has spent, or has planned to spend, $541.9 billion in new measures—almost one third of which is not part of the COVID-19 Response Plan.

• We estimate that remaining platform measures would amount to $48.5 billion in net new spending over 2021-22 to 2025-26.

• The Government’s own fiscal guardrails indicate that stimulus spending should be wound down by the end of fiscal year 2021-22. It appears to me that the rationale for the additional spending initially set aside as ‘stimulus’ no longer exists.

News Release

{"id":25,"created_at":"2022-01-17T08:22:26-05:00","updated_at":"2022-01-19T08:59:08-05:00","slug":"pbo-recommends-legislative-amendments-to-improve-fiscal-transparency-le-dpb-recommande-des-changements-legislatifs-pour-ameliorer-la-transparence-des-finances-publiques","title_en":"PBO recommends legislative amendments to improve fiscal transparency","title_fr":"Le DPB recommande des changements l\u00e9gislatifs pour am\u00e9liorer la transparence des finances publiques","body_en":"The Parliamentary Budget Officer (PBO) today released his report on the Government\u2019s 2021 Economic and Fiscal Update. The report highlights key issues arising from the Government\u2019s Update published on December 14, 2021.\n\nFiscal transparency\nThe Government released its Update on the same day that it tabled its audited financial statements for 2020-21\u2014close to nine months after the close of the fiscal year (March 31st).\n\n\u201cThe delay in the Government\u2019s release of its audited financial statements has undermined parliamentarians\u2019 ability to meaningfully scrutinize proposed Government spending,\u201d says PBO Yves Giroux.\n\nThe PBO report notes that Canada falls short of the standard for advanced practice in the International Monetary Fund\u2019s financial reporting guidelines, which recommends that governments publish their annual financial statements within six months.\n\n\u201cConsistent with the PBO\u2019s mandate to promote fiscal transparency, I am recommending that Parliament consider legislative amendments to require tabling of the Government\u2019s financial statements no later than September 30, which would avoid a repeat of the long delay experienced in 2021,\u201d adds Mr. Giroux.\n\nThe PBO report includes several recommended amendments to the Financial Administration Act for consideration, including moving the required release date of the Public Accounts by three months, from December 31st to September 30th, as well as requiring Departmental Results Reports to be released no later than September 30th.\n\nFiscal measures since the start of the Pandemic\n\u201cOur report shows that since the start of the pandemic, the Government has spent, or has planned to spend, $541.9 billion in new measures\u2014almost one third of which is not part of the COVID-19 Response Plan,\u201d says Mr. Giroux.\n\nOf the non-pandemic spending, the report identifies $69.2 billion in stimulus spending, $49.9 billion related to \u201cbuilding a better economy\u201d, $24.2 billion in compensation to First Nations children and their families, and $33.3 billion in \u201cother\u201d measures.\n\nThe new measures announced in the Update are largely in addition to the measures included in the Liberal Party of Canada\u2019s 2021 election platform. \u201cWe estimate that remaining platform measures would amount to $48.5 billion in net new spending over 2021-22 to 2025 26,\u201d adds Mr. Giroux.\n\nFiscal guardrails\nThe Update continued to track selected labour market indicators (\u201cfiscal guardrails\u201d), highlighting the fact that Canada has recovered 106% of the jobs lost at the start of the pandemic.\n\nThe fiscal guardrail indicators in the Update showed that the employment rate, total hours worked and excess unemployment effectively returned to their pre-pandemic benchmarks by November 2021, well before the end of the 2021-22 fiscal year\u2014the first year of the Government\u2019s stimulus plan initially announced in its 2020 Fall Economic Statement.\n\nAccording to Mr. Giroux, \u201cthe Government\u2019s own fiscal guardrails indicate that stimulus spending should be wound down by the end of fiscal year 2021-22. It appears to me that the rationale for the additional spending initially set aside as \u2018stimulus\u2019 no longer exists\u201d.","body_fr":"Le directeur parlementaire du budget (DPB) a rendu public aujourd\u2019hui son rapport sur la Mise \u00e0 jour \u00e9conomique et budg\u00e9taire de 2021 du gouvernement du Canada. Le rapport met en lumi\u00e8re les principaux probl\u00e8mes d\u00e9coulant de la Mise \u00e0 jour publi\u00e9e par le gouvernement le 14 d\u00e9cembre 2021.\n\nTransparence des finances publiques\nLe gouvernement a publi\u00e9 la Mise \u00e0 jour le jour m\u00eame o\u00f9 il a d\u00e9pos\u00e9 ses \u00e9tats financiers v\u00e9rifi\u00e9s pour 2020-2021, soit pr\u00e8s de neuf mois apr\u00e8s la fin de l\u2019exercice financier (31 mars).\n\n\u00ab Le retard dans la publication par le gouvernement de ses \u00e9tats financiers v\u00e9rifi\u00e9s a mis \u00e0 mal la capacit\u00e9 des parlementaires d\u2019examiner de pr\u00e8s les d\u00e9penses propos\u00e9es par le gouvernement \u00bb, a d\u00e9clar\u00e9 le DPB, Yves Giroux.\n\nLe rapport du DPB note que le Canada ne respecte pas la norme de pratique avanc\u00e9e \u00e9nonc\u00e9e dans les directives du Fonds mon\u00e9taire international en mati\u00e8re de production de rapports financiers selon laquelle les gouvernements devraient publier leurs \u00e9tats financiers annuels dans un d\u00e9lai de six mois.\n\n\u00ab Conform\u00e9ment au mandat du DPB consistant \u00e0 promouvoir la transparence des finances publiques, je recommande au Parlement de modifier la loi pour exiger que les \u00e9tats financiers du gouvernement soient publi\u00e9s au plus tard le 30 septembre, ce qui \u00e9viterait les longs retards de 2021 \u00bb, a ajout\u00e9 M. Giroux.\n\nLe rapport du DPB propose plusieurs modifications \u00e0 la Loi sur la gestion des finances publiques, notamment le report de trois mois de la date de publication des comptes publics (du 31 d\u00e9cembre au 30 septembre), et l\u2019obligation de publier les rapports minist\u00e9riels sur les r\u00e9sultats au plus tard le 30 septembre.\n\nMesures budg\u00e9taires depuis le d\u00e9but de la pand\u00e9mie\n\u00ab Notre rapport montre que, depuis le d\u00e9but de la pand\u00e9mie, le gouvernement a d\u00e9pens\u00e9 ou pr\u00e9vu de d\u00e9penser de nouvelles mesures de 541,9 milliards de dollars et que pr\u00e8s du tiers de ces d\u00e9penses ne s\u2019inscrivent pas dans le plan d\u2019intervention pour la COVID-19 \u00bb, a signal\u00e9 M. Giroux.\n\nParmi les d\u00e9penses non li\u00e9es \u00e0 la pand\u00e9mie, le rapport fait \u00e9tat de 69,2 milliards de dollars pour la relance, de 49,9 milliards de dollars pour le renforcement de l\u2019\u00e9conomie, de 24,2 milliards de dollars pour le d\u00e9dommagement des enfants des Premi\u00e8res Nations et leurs familles, et 33,3 milliards de dollars pour la mise en place d\u2019autres mesures.\n\nLes nouvelles mesures annonc\u00e9es dans la Mise \u00e0 jour s\u2019ajoutent pour la plupart aux mesures pr\u00e9vues dans le programme \u00e9lectoral du Parti lib\u00e9ral du Canada pour 2021. \u00ab Nous estimons que les autres mesures de ce programme repr\u00e9senteraient 48,5 milliards de dollars en nouvelles d\u00e9penses nettes de 2021-2022 \u00e0 2025-2026 \u00bb, a pr\u00e9cis\u00e9 M. Giroux.\n\nGarde-fous budg\u00e9taires\nLa Mise \u00e0 jour continue de suivre certains indicateurs du march\u00e9 du travail (\u00ab garde-fous budg\u00e9taires \u00bb) et pr\u00e9cise que le Canada a r\u00e9cup\u00e9r\u00e9 106 % des emplois perdus au d\u00e9but de la pand\u00e9mie.\n\nSelon ces indicateurs, le taux d\u2019emploi, le nombre total d\u2019heures travaill\u00e9es et l\u2019exc\u00e9dent de ch\u00f4mage \u00e9taient effectivement revenus \u00e0 leur niveau d\u2019avant la pand\u00e9mie en novembre 2021, bien avant la fin de l\u2019exercice 2021-2022, ce qui correspond \u00e0 la premi\u00e8re ann\u00e9e du plan de relance du gouvernement annonc\u00e9 dans l\u2019\u00c9nonc\u00e9 \u00e9conomique de l\u2019automne 2020.\n\nSelon M. Giroux, \u00ab les garde-fous budg\u00e9taires du gouvernement indiquent que les d\u00e9penses de relance devraient \u00eatre r\u00e9duites d\u2019ici la fin de l\u2019exercice 2021-2022. La raison d\u2019\u00eatre initiale de ces d\u00e9penses suppl\u00e9mentaires, soit la relance \u00e9conomique, ne semble plus pr\u00e9sente \u00bb.","release_date":"2022-01-19T09:00:00-05:00","is_published":"2022-01-19T08:59:08-05:00","internal_id":"COM-2122-025","permalinks":{"en":{"website":"https:\/\/www.pbo-dpb.ca\/en\/blog\/news-releases--communiques-de-presse\/pbo-recommends-legislative-amendments-to-improve-fiscal-transparency-le-dpb-recommande-des-changements-legislatifs-pour-ameliorer-la-transparence-des-finances-publiques"},"fr":{"website":"https:\/\/www.pbo-dpb.ca\/fr\/blog\/news-releases--communiques-de-presse\/pbo-recommends-legislative-amendments-to-improve-fiscal-transparency-le-dpb-recommande-des-changements-legislatifs-pour-ameliorer-la-transparence-des-finances-publiques"}},"pivot":{"publication_id":642,"news_release_id":25}}