Hamilton’s F grade ranked the municipality as the worst under the criteria. Pictured: Mayor Andrea Horwath. Photo Credit: City of Hamilton.
The C.D. Howe Institute, a Canadian research think tank, gave the City of Hamilton a failing F letter grade for its 2023 budget process, citing issues with the transparency and timeliness.
The grade and further analysis were a part of the Institute’s annual report card judging the financial transparency of Canada’s largest cities.
The document is entitled “Show Us Our Money: Fiscal Accountability in Canada’s Cities, 2023” and ranks 32 different Canadian cities.
It is part of a decade-long project by the think tank to improve municipal fiscal accountability.
The report is co-written by the Institute’s CEO William Robson and Research Assistant Nicholas Dahir.
The authors say, “All governments should present financial information that is transparent, useful, and timely.”
“Grades for these cities range from A to F, reflecting how well their financial documents allow councillors and non-expert citizens to see proposed changes in revenues, and expenses, compare results to plans, and understand budgets’ implications for their city’s capacity to deliver services.”
The report analyzes the budgets presented at the beginning of each fiscal year as well as the financial statements that cities file at the end of the fiscal year, which is why the 2023 report was just recently released.
The top grade, an A, was awarded to Quebec City, Quebec and Richmond, British Columbia for the “clarity, completeness, and promptness” of their budgets.
Markham, Ontario was the highest-ranked Ontario city with its A-minus grade.
The nearby Niagara Region received a D grade.
But Hamilton’s F grade ranked the municipality as the worst under the criteria along with London, Ontario and Windsor, Ontario.
The Institute says that the City of Hamilton’s poor grade is due to a number of different factors.
First, they say that the city’s budget does not follow public sector accounting standards (PSAS) which “makes most municipal budgets impossible for non-experts to reconcile with municipal financial statements.”
Furthermore, comparisons of projections to the previous year were only made for the operating budget, not the capital budget.
Finally, the budget figures in the financial statements did not match the actual amount spent with variances left unexplained.
The report notes that municipalities usually underspend their budget projections and then provide no reason why that is the case.
For example, the City of Hamilton approved $2.64 billion in spending in the 2022 budget but spent $2.02 billion at year-end (23.7 per cent lower than expected).
Part of the issue is also that cities prepare budgets using different accounting methods than they use in their financial statements.
Additionally, the budget was voted on after the fiscal year had started and money was already committed or spent.
There is no deadline by which municipalities must have their budgets approved, meaning that deliberations can carry on well into the fiscal year.
The City of Hamilton’s 2023 budget was approved on March 29, 2023.
Overall, the report’s writers note that “Hamilton’s budget was late and did not contain a PSAS reconciliation. Its financial statements showed restated budget numbers in its comparison to budget projections, did not explain variances, and had below-the-line adjustments.”
Hamilton’s previous grades were a D-minus in 2019, a C-minus in 2020, and a C in 2021.
Hamilton received a D-plus grade in 2022, but that has now been downgraded to an F under new criteria that was adopted for this year’s review.
Based in Hamilton, he reaches hundreds of thousands of people monthly on Facebook, Instagram, TikTok, and Twitter. He has been published in The Hamilton Spectator, Stoney Creek News, and Bay Observer. He has also been a segment host with Cable 14 Hamilton. In 2017, he received the Chancellor Full Tuition Scholarship from the University of Ottawa (BA, 2022). He has also received the Governor General’s Academic Medal. He formerly worked in a non-partisan role on Parliament Hill in Ottawa.
