Canada’s Chartered Accountants are expressing concern at the significant amount of spending committed for future years in yesterday’s federal budget.
The government announced program spending and tax initiatives of $49 billion over the next five years. These spending commitments largely focus on 2007 to 2010. Committing to this spending now, may restrict flexibility in the future should economic growth or revenue slow, says the Canadian Institute of Chartered Accountants (CICA).
“With the interest meter running at $95 million a day, paying attention to reducing the federal debt is a way to ensure that the government retains fiscal flexibility for the benefit of future generations,” said David Hope, chairman of the CICA board of directors. “We are encouraged to see the government affirm its commitment to reducing the federal debt to 25% of GDP by 2014, but there still remains a long way to go to reach this target.”
CICA also urged the government to place more emphasis on fulfilling last year’s commitment to improve financial management and accountability by increasing the number of professionally accredited comptrollers in government departments, and putting in place new corporate governance rules for Crown corporations. “Improved transparency and accountability will do much to restore public confidence in the government and its administration,” said Hope.