It is still discussed seriously by some in the media and generally in Canada , that when a different political party gets elected , the first thing it will do is look at the books and that they will almost surely find all those nefarious goings on of the previous government. We can’t say what we really can do , even after all those promises , since we don’t know the state of the books.
They do know.
Now, in this age of instant communication and access to information, it never ceases to amaze me how little people really know. Sadly, the TV, Internet etc has been great for celebrities and one liners , but bad for anything beyond the obvious. And this cooking the books is characteristic of this phenomenon .
There is this public document called the Budget , with a speech and pages and pages of charts and figures of the estimates , and analysis of year over year, debt position etc. This is a legal requirement for all governments in Canada. Now once this is public , usually through Parliament, Legislature, there are multiple analysis by the opposition parties , media , think tanks like Conference Board of Canada, large accounting firms like Ernest Young, and numerous National Organizations like Mining Association, Manufacturers Association , Farming Interests, Fishing Interests , and the list is endless.
But , on top of all this , is the credit rating agencies, like Standard and Poor, Moody’s , and Fitch. Each of these international organizations have experts dedicated to rigorously dissecting national and Provincial budgets since they rate the credit worthiness of Governments and many ‘public ‘ businesses. To get it wrong would have dire consequences for that agency. That ‘ s how Ontario got downgraded recently, how the US Government got downgraded a few years ago by Standard and Poor, and France just recently. And, of course, international agencies, like the International Monerary Fund and the World Bank also assess our finances.
I remember being questioned by one of these agencies years ago . Just to give you an idea of the detail to which these credit rating agencies will go , I was asked about that coming year’s projected throughput at one fish plant in northern Newfoundland . There were well over forty fish plants at that time operating.
If that isn’t enough there is a legal requirement for the public accounts to be produced . Section 64 of the Financial Administration says:
64. (1) A report, called the Public Accounts, shall be prepared by the Receiver General for each fiscal year and shall be laid before the House of Commons by the President of the Treasury Board on or before December 31 next following the end of that fiscal year or, if the House of Commons is not then sitting, on any of the first fifteen days next thereafter that the House of Commons is sitting.
Contents of Public Accounts
(2) The Public Accounts shall be in such form as the President of the Treasury Board and the Minister may direct, and shall include
(a) a statement of
(i) the financial transactions of the fiscal year,
(ii) the expenditures and revenues of Canada for the fiscal year, and
(iii) such of the assets and liabilities of Canada as, in the opinion of the President of the Treasury Board and the Minister, are required to show the financial position of Canada as at the termination of the fiscal year;
(b) the contingent liabilities of Canada;
(c) the opinion of the Auditor General of Canada as required under section 6 of the Auditor General Act; and
(d) such other accounts and information relating to the fiscal year as are deemed necessary by the President of the Treasury Board and the Minister to present fairly the financial transactions and the financial position of Canada or as are required by this Act or any other Act of Parliament to be shown in the Public Accounts.
When a political party seeking to be the Government or just elected as a new Government says we have to look at the books , it is either incompetence in that they have not examined the budget, the public accounts , the views of credit rating agencies , IMF etc in which case they were not doing their job as an opposition , or that they are trying to hoodwink the public with a groundless political statement.
Either way, you ‘ve been taken .