Niagara Region budget process receives poor grade from C.D. Howe Institute

Niagara Region received a D grade, only marginally better than the F received by Hamilton, London and Windsor. Pictured: Niagara Region Chair Jim Bradley. Photo Credit: Niagara Region. 

A major Canadian think tank gave Niagara Region a D grade when it comes to its 2023 budget process, criticizing the budget’s lack of transparency and lateness.

The grade and its associated analytics were part of the C.D. Howe Institute’s “Show Us Our Money: Fiscal Accountability in Canada’s Cities, 2023” report, which ranks 32 different Canadian cities in terms of budget quality and process methods. 

It is part of a 10-year project by C.D. Howe to improve fiscal accountability at the municipal level. 

The report is co-written by William Robson, C.D. Howe’s CEO, and Research Assistant Nicholas Dahir.

According to the report, budgets presented and/or approved after the beginning of the fiscal year, which in far too many cities is the norm, generally understate the size of city operations, omit key activities and exaggerate the costs of capital projects. 

Most municipal budgets, according to the report, are also essentially unreadable for the average taxpayer. 

The report laid out its grading criteria this way: “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.”

In its report, C.D. Howe analyzed both annual municipal budgets as well as financial statements filed by cities at the end of the year, which explains why the report was released well into 2024. 

Only two cities in Canada received an A grade: Quebec City, Quebec and Richmond, British Columbia. 

Niagara Region received a D grade, only marginally better than the F received by Hamilton, London and Windsor. 

The report provides a few reasons for Niagara’s poor grade.

First, Niagara Region’s budget only presents a public sector accounting standards (PSAS)-consistent surplus in its appendix and supplementary material, leading to a poor grade for transparency. 

Second, Niagara Region’s budget numbers were restated in its financial statements, but variances from the original budget numbers were not explained. 

Finally, Niagara Region’s budget was approved nearly two months into the year, rather than in the fall prior. 

In addition, the report notes that most municipalities underspend their budget projections and then don’t explain why. Niagara Region spent 23.4 per cent less in 2022 than the budget initially called for, one of the largest variances found in the report. 

Niagara Region’s grades have been steadily decreasing in recent years. Niagara received a B grade in 2020, a C grade in 2021, a C- grade in 2022 (under the present report’s criteria) and a D grade for 2023.

Those wishing to read the full report can do so HERE

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