Disclosure by Municipalities ‘Unsatisfactory’

Commentary, Municipal Government, Frontier Centre

Canadian municipalities – particularly in Quebec – should adopt the practices of New Zealand municipalities when it comes to financial openness with the public, a small group of policymakers agreed yesterday.

“The level of disclosure (by Canadian local governments) is unsatisfactory,” Larry Mitchell, an analyst for the Winnipeg-based think tank Frontier Centre for Public Policy, told a round-table meeting co-sponsored by his group and the Montreal Economic Institute.

Mitchell is co-author of the centre’s initial Local Government Performance Index: A Financial Analysis of 30 Canadian Cities, which he said found many municipalities “seriously underperforming” when it comes to public accessibility of their finances.

Manitoba-born, New Zealand-raised Mitchell said that country is well-known for embedding a performance focus in all facets of the public sector – including local government.

“This brings the highest levels of transparency to the means by which New Zealand councils operate services and manage assets.”

He said the ultimate objective of the index initiative was economic improvement by opening up discussion and productive debate around three key issues:

  • Accounting standards and disclosure issues.
  • Financial management practice and asset (activity) management.
  • Municipal government culture.
  • The index Mitchell prepared with Saskatchewan policy analyst David Seymour collected more than 3,000 data points on the nation’s most populous jurisdictions, including six Quebec cities, by drawing on 2005 municipal financial statements and Statistics Canada figures.

    “We wanted to put ourselves in the position of stakeholders looking for public accessibility,” Mitchell said.

    That many of the targeted cities didn’t fully co-operate by completing a survey forwarded to senior staff, didn’t surprise some.

    “It’s pure manipulation of data in Quebec municipalities,” charged Jean-Paul Gravel, a professor of administrative science at Université Laval’s department of management. “I’ve been hired to make sense of municipal (financial) information.”

    Gravel argued one must consult the provincial Revenue Department “to get the real information” because municipalities are often “selective and play with the numbers.”

    Marcel Boyer, MEI vice-president and CEO, called the index a very useful document that should help bring up questions about existing practices.

    Peter Holle, founding president of the decade-old on-profit and non-partisan centre, said it is generally accepted that New Zealand does have the best practices. MEI president Paul Daniel Muller suggested that adopting such practices here “could lead to more transparency.”