December 8, 2009
Media Release - 2009 Local Government Performance Index
Frontier’s third annual report on municipal finances and reporting standards
Red Deer: The Frontier Centre for Public Policy today released the third annual Local Government Performance Index. It is the largest assembly of local government statistics ever published in Canada. The Index compares each of 88 municipalities’ revenues, expenditures, capital and financial assets with regional averages for B.C. the Prairies, Ontario, Quebec, and the Maritime provinces.
· The average municipality which reported a capital asset value reported $18,228 worth of capital assets per household. In other words, municipal governments manage assets equivalent to most household’s second or third most valuable asset.
· Reported capital asset values are highest on the Prairies, followed by B.C. the Maritimes, and Quebec. Ontario municipalities did not report any values.
· The average Canadian municipality reported $4,971 of revenue in 2008, up slightly from $4,869 in 2007.
· The greatest sources of revenue were taxation at 46%, user fees at 23% and transfers from other governments at 16%.
· The average Canadian municipality spent just over half of its expenditure on salaries and benefits, approximately one-third on contracted services, material, and supplies, and approximately 2.5% or $122 per household on interest on long-term debt.
The index also compares standards of disclosure in municipalities’ annual reports, asking questions such as: Do cities report on performance gained from their expenditures, do they provide explanations of what their expenditure items cover, do they report the values of their capital assets, and do they report the depreciation and maintenance costs on those assets?
Disclosure: Reporting Highlights
· Almost all cities now report the value of their capital assets except for those in Saskatchewan and Ontario. Reporting capital asset values is the first step towards managing infrastructure and is a Public Sector Accounting Board requirement.
· The best reporting is found in B.C. and Alberta. Canada’s top ten cities on that measure are found in those two provinces. The worst reporting is found in the Maritimes. Ontario municipalities were severely disadvantaged because they did not report the value of capital assets.
· Municipalities reporting only in French were omitted from the reporting assessment. However, so too were Whitby (Ont.), St John’s (N.L.), Norfolk County (Ont.), and Aurora (Ont.) due to very poor quality or absent annual reports.
The Index’s author, David Seymour, points out that the variations amongst Canadian cities are dramatic. “Some cities have no debt while in others each household is effectively paying hundreds of dollars per year just to cover the interest on municipal debt. On another matter, some cities present glossy accounts of their performance with numerical measures while others can’t bring themselves to present adequate financial statements. If every city in Canada performed as well as the best cities, the entire country would be dramatically better off.”
About the Local Government Index
Municipal government is clearly a significant part of the Canadian economy, given the capital assets and level of expenditure per household it controls. However the dispersed nature of municipal government means it often fails to attract the level of attention that other levels of government do. The Local Government Performance Index is designed to focus attention on how municipalities do business, how they compare to each other in terms of performance, and how they report on their performance by comparing Canada’s largest municipalities in one comparable format.
For more information and to arrange an interview with the study's author, media (only) should contact:
Troy Media Corporation
Top Ten Municipalities Ranked by Reporting Standards
Bottom Ten Municipalities Ranked by Reporting Standards
2009 Local Government Performance Index (Policy Series)
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."