The federal revenue projections are based on an average of economic projections from the private sector.
This should have been noted in the article.
Finance Canada stopped relying on its own internal modeling for economic growth in the 1980s and 1990s when the Mulroney government ran up huge deficits based on overly bullish estimates for economic growth. As a reaction/response, a protocol was established in the mid nineties for using a basket of private sector forecasts, mainly from the major banks, the Conference Board, and one major university. Statistics Canada’s forecasts used to be kept in the basket, but it doesn’t even look like their estimates are in their now.
This then begs the question, how is it that the private sector estimates of economic growth, that are the fundamental driver for tax revenue, so consistently off?
Why isn’t the CD Howe Institute posing that question?
Or if it’s a problem with Finance Canada’s tax model that crunches out the estimate of how much tax revenue will be gained for how much growth, then CD Howe should look a bit more deeply to be able to show that. Are there specific sectors that are consistently being under forecast for a specific level of growth?
Everything you say may be true, but the article/press release also complains to provincial government budgets, nonstandard accounting between levels of government, inconsistent delivery of budgets (not just due to the pandemic, if I’m reading it right), and, most importantly, MPs and MPPs giving budgets a pass.
This seems to come across at a certain level as whinging about the Constitution.
Both Budget and Supply (expenditure) bills get a lot of scrutiny in committees in Parliament.
The CD Howe Institute like other Think Tanks is regularly invited to testify in these proceedings at the federal and provincial levels. Can’t they offer more concrete examples of why they believe the estimates are systematically inaccurate and what might be the specific cause of the problem?
Government accounting isn’t the same as corporate accounting and necessarily follows different procedures. CD Howe knows this.
For example, due to the need for all money for expenditures to be voted each year in Supply bills, governments have historically been on a cash accounting basis, with very cautious introductions of accounting for assets etc.
Constitutionally, the provinces set their own budgeting practices, with oversight and advice from their Auditors General and Legislative Budget Officers. Is the CD Howe Institute suggesting that there be a federal-provincial constitutional process to standardize accounting procedures?
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The federal revenue projections are based on an average of economic projections from the private sector.
This should have been noted in the article.
Finance Canada stopped relying on its own internal modeling for economic growth in the 1980s and 1990s when the Mulroney government ran up huge deficits based on overly bullish estimates for economic growth. As a reaction/response, a protocol was established in the mid nineties for using a basket of private sector forecasts, mainly from the major banks, the Conference Board, and one major university. Statistics Canada’s forecasts used to be kept in the basket, but it doesn’t even look like their estimates are in their now.
This then begs the question, how is it that the private sector estimates of economic growth, that are the fundamental driver for tax revenue, so consistently off?
Why isn’t the CD Howe Institute posing that question?
Or if it’s a problem with Finance Canada’s tax model that crunches out the estimate of how much tax revenue will be gained for how much growth, then CD Howe should look a bit more deeply to be able to show that. Are there specific sectors that are consistently being under forecast for a specific level of growth?
Those are questions for the CD Howe Institute.
Everything you say may be true, but the article/press release also complains to provincial government budgets, nonstandard accounting between levels of government, inconsistent delivery of budgets (not just due to the pandemic, if I’m reading it right), and, most importantly, MPs and MPPs giving budgets a pass.
This seems to come across at a certain level as whinging about the Constitution.
Both Budget and Supply (expenditure) bills get a lot of scrutiny in committees in Parliament.
The CD Howe Institute like other Think Tanks is regularly invited to testify in these proceedings at the federal and provincial levels. Can’t they offer more concrete examples of why they believe the estimates are systematically inaccurate and what might be the specific cause of the problem?
Government accounting isn’t the same as corporate accounting and necessarily follows different procedures. CD Howe knows this.
For example, due to the need for all money for expenditures to be voted each year in Supply bills, governments have historically been on a cash accounting basis, with very cautious introductions of accounting for assets etc.
Constitutionally, the provinces set their own budgeting practices, with oversight and advice from their Auditors General and Legislative Budget Officers. Is the CD Howe Institute suggesting that there be a federal-provincial constitutional process to standardize accounting procedures?