Hamilton’s D-range grade ranking put it amongst the worst municipalities in Canada. Photo credit: City of Hamilton
Canadian research think tank C.D. Howe Institute has given the City of Hamilton a D-plus grade for multiple problems with transparency, reliability, and timeliness of its 2022 budget process.
The grade appears in a study called “Show Us Our Money: Fiscal Accountability in Canada’s Cities, 2022” alongside rankings for 31 other major Canadian cities.
The Institute releases municipal budget transparency reports on an annual basis and is part of a decade-long project by the think tank on municipal fiscal accountability.
The 2022 report is co-written by the Institute’s CEO William Robson and Research Assistant Nicholas Dahir.
The Institute says that “municipal finances in Canada are unnecessarily confusing” and many municipal budgets are “opaque and late.”
They contend that “better budgets would help voters and councillors understand and manage city finances.”
The report analyzes both the budgets presented at the beginning of each fiscal year as well as the financial statements that cities release at the end of the fiscal year, which is why the recently released grades are for the 2022 budget year.
The 2022 report was released on March 7, 2023.
The top grade, an A, was awarded to Richmond, British Columbia for clarity, completeness, and promptness of their budget.
Markham, Ontario was the highest-ranked Ontario city with an A-minus. Surrey, Vancouver and Quebec City also received an A-minus.
Mississauga and Peel were in the B-range. Halton, Oakville, Niagara and Toronto received scores in the C-range.
Hamilton’s D-range grade ranking put it amongst the worst municipalities. Durham Region, Kitchener, London, Regina, and Halifax join Hamilton at the bottom.
The City of Halifax received the worst overall grade: a D-minus.
The Institute says that the City of Hamilton’s poor grade is related to a number of different factors that they measure.
First, the city’s budget did not present prominent headline numbers consistent with public sector accounting standards (PSAS).
Second, comparisons of projections to the previous year were only made for the operating budget, not the capital budget.
Third, the budget figures in the financial statements did not match the actual amount spent with variances left unexplained.
The report actually notes that municipalities usually underspend their budget projections, but then provide no reason why that is the case.
For example, the City of Hamilton approved 2.72 billion in spending in the 2021 budget but spent 1.92 billion at year-end (29 per cent lower than expected).
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 discussions can often be drawn out.
The City of Hamilton’s 2022 budget was approved on March 30, 2022. Of the cities in the study, Hamilton was the second slowest municipality to approve its budget. Some municipalities had their budgets approved as early as December 2021.
The city’s ranking on timeliness will also be poor in the next report, with the final 2023 budget approval given on March 29, 2023.
Hamilton’s previous grades were a D-minus in 2019, a C-minus in 2020, and a C in 2021. The D-plus grade for 2022 represents a somewhat significant step backwards.
It should be noted that the letter grades merely analyze the transparency and quality of each city’s budgets and financial statements. The Institute does not make judgments on each city’s financial situation or comment on specific budget allocations.
The full 36-page report can be viewed in the “Research and Insights” section of the C.D. Howe Institute’s website.
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.