The Pinocchio Index: Governments Over-Shoot Budgets by $65 Billion over
Decade: C.D. Howe Institute

TORONTO, May 13 /CNW/ - Canadian governments exceeded their budget promises by $65 billion in spending over the past decade, worsening the budgetary impacts of the financial crisis, according to a study released today by the C.D. Howe Institute. In "Target Practice Needed: Canada's 2010 Fiscal Accountability Rankings," Colin Busby and William Robson say spending overruns over the past 10 years by the federal, provincial and territorial governments limited debt reduction and tax relief in earlier years, and materially added to current deficits.

In their fourth annual fiscal accountability rankings of Canada's governments, the authors compare what legislators voted for at budget time with what their governments actually raised and spent during the year. They also compare total spending overruns for each government with its planned deficit for the 2009/10 fiscal year.

New Brunswick and Quebec have fulfilled their spending promises better than other jurisdictions. Resource-dependent jurisdictions do poorly: Saskatchewan's record is unimpressive, and Alberta - though ahead of Nunavut - has the worst record of fulfilling spending promises among the provinces.

The study also compares the transparency, quality and timeliness of financial reporting. Its findings underline the need for better revenue projections, tighter spending scrutiny and better oversight by legislators and voters.

For the study click here. http://www.cdhowe.org/pdf/backgrounder_129.pdf

For the Pinocchio Index showing spending overruns go to: http://www.cdhowe.org/images/Pinnochio.gif

For further information: Colin Busby, Policy Analyst, or William Robson, CEO, C.D. Howe Institute, [phone]; e-mail: [email protected]