Government spending during COVID-19 remains uncertain, a fiscal crisis occurred

Canadian governments' lack of transparency in their finances has become a prominent concern, with issues such as bureaucratic circumvention of freedom of information laws and ministers providing generic responses to questions. This lack of transparency was particularly evident during the COVID-19 pandemic, which not only posed health and economic challenges but also fiscal ones. Government spending and borrowing reached unprecedented levels, but the exact allocation of funds remains unknown.

Two years have passed since the end of the fiscal year that encompassed the pandemic, yet Canadians and their elected representatives still have limited knowledge of how the government responded during this time. While some basic information is available, such as the total expenses and accumulated deficits, the details are lacking. Only one out of the 14 senior governments provided a summary of COVID-19's impact on its revenue, expenses, and bottom line. Other governments provided minimal information, with fewer than half quantifying the impact on health spending, and none quantifying the impact on the overall financial situation.

The public accounts published by these governments after the fiscal year should provide clear explanations of any deviations from the initial projections outlined in their spring budgets. However, these accounts often fall short, with discrepancies between budget numbers and public accounts and unexplained patterns of underprojection. The lack of transparency and accountability following the unprecedented crisis of COVID-19 is concerning.

Access to information is further hindered by the delay or absence of timely budgets. The federal government, for example, never presented a budget for the 2020-21 fiscal year. Without these budgets, it is difficult to compare projected and actual results accurately.

While some information can be gleaned from budgets, public accounts, and other sources like Statistics Canada, the overall lack of systematic information is frustrating. Questions remain about how governments funded pandemic-related health expenses, whether they saved in other areas, and how their borrowing affected the burden of debt servicing.

Transparency in public finances is always essential to hold governments accountable for their actions. During a crisis as severe as the pandemic, this transparency becomes even more crucial. Unfortunately, many senior governments in Canada failed to meet this transparency test during the 2020-21 fiscal year.

The COVID-19 pandemic has highlighted the need for improved transparency in government finances. Canadians should prioritize addressing this issue to ensure good governance and accountability.


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