Tracking government finances
From big-ticket items, like health insurance and education, to the annoying pothole at the end of the street, the way that governments collect and spend money touches all Canadians.
Statistics Canada has been tracking the ins and outs of government finance, stretching back to before the days of the Dominion Bureau of Statistics. As Canadian society became more complex, Statistics Canada grew more sophisticated at measuring government finances, adjusting accounting methods, fine-tuning and tracking.
The next leap comes next summer. In 2014, Statistics Canada will publish data according to a new international standard, Government Finance Statistics (GFS), a program that provides standardized and comprehensive statistics—revenues, expenses, assets and liabilities—on all levels of government, including government business enterprises.
StatCan watchers are aware that the agency temporarily reduced its publication of government finance statistics as of 2009, while resources were channelled to re-engineer the GFS.
Why is the change important? Policy wonks, economists, data users and providers, international institutions, academics, researchers, labour unions, politicians and taxpayers benefit from higher quality GFS data. Revenue statistics from the program are used in the equalization program of the federal–provincial governments. Government finance statistics are also used by government for analytical, policy and forecasting purposes.
"GFS data will be more meaningful and more robust. The higher the quality of the data, the better the analytical results will be," says Philippe Samborski, senior economist and one of the leads of the team that has been working since 2010 on GFS implementation.
Beyond data quality, GFS offers other advantages:
GFS is a comprehensive framework developed by the International Monetary Fund (IMF). It will allow users to make international comparisons more easily.
Although there is a worldwide move to adopt the IMF standards, Statistics Canada has been among the leaders in implementing it full scale. Each country must strive to make the international standards applicable to its own specific circumstances.
In fact, the change puts government finances on the same footing as other major StatCan statistical programs, like Gross Domestic Product, System of National Accounts, and Balance of Payments. And, GFS will be harmonized with these programs to provide one set of government data from Statistics Canada.
Better provincial data
The GFS will continue to make data comparable across jurisdictions. This is important because provinces and municipalities in Canada present their finances differently. This way, an analyst in Saskatchewan will be able to look across the border to Manitoba and know that the measures are comparable.
In addition to the economic classification of the GFS, Statistics Canada will be implementing the United Nation's Classification of Functions of Governments (COFOG) a framework which presents public expenditures by function. This presents data somewhat differently to show how much governments in Canada are spending on health, education, and on other broad functions.
Will the GFS be comparable with old data? There may be some breaks in the data series as GFS is introduced, due to a change in concepts and sources of data.
What is the payoff? Higher data quality, and more detail. Just as the average household works better when everyone knows the bottom line, GFS data will provide governments with better information and context to manage Canadians' resources.
Next month: Classifying data...
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