Ottawa receives a “D” grade on fiscal accountability report card

An economic think tank has given the Carney government a “D” grade in its latest report card for senior governments, citing a lack of transparency in how Ottawa decides to tax Canadians’ earnings.

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An economic think tank has given the Carney government a “D” grade in its latest report card for senior governments, citing a lack of transparency in how Ottawa decides to tax and spend Canadians’ earnings.

The C.D. Howe Institute released its evaluation, titled, Making the Grade: The Fiscal Accountability Report Card for Canada’s Senior Governments, 2025 on Thursday, which assessed how “clearly each senior government reports on its public finances.”

The various governments were graded on metrics of accessibility, reliability, the timeliness of their budgets, estimates, and year-end financial statements.

“Looking back, we’ve seen progress – more governments are using consistent accounting. But timeliness is an ongoing challenge. Too many budgets are late, and most governments take far too long to produce their financial statements,” said the institute’s president William B.P. Robson.

“We also highlight concerning instances of gaps between what budgets promise and what the public accounts later show.”

The federal government’s grade dropped this year as Prime Minister Mark Carney’s budget had “key numbers buried hundreds of pages deep” and was plagued by “inconsistent accounting and delayed financial statements.”

Ultimately, Ottawa was given a “D for lateness and obscure presentations in its budget and estimates.”

“A motivated but non-expert citizen seeking to understand a government’s fiscal situation and plans should be confident in identifying the key numbers in budgets, estimates and public accounts,” reads the study.

“The user of those documents should be able to see what that government plans to do before the year starts and to compare that with what it did shortly after the year has ended. As this report card shows, governments that do not meet these standards could make some straightforward changes to improve.”

Provincially, Alberta ranked highest with an A+ for budgets, estimates and public accounts, all of which proved to be presented in a timely, accessible and reliable manner.

“Alberta stood out for presenting numbers consistent with Public Sector Accounting Standards in all its documents, releasing its public accounts within 90 days of fiscal year-end, and providing regular in-year updates,” said the institute.

Quebec followed Alberta with a B+, with Prince Edward Island, Nova Scotia, New Brunswick, Saskatchewan, British Columbia, Yukon and Nunavut all earning Bs.

British Columbia also saw a decline this year, despite once holding an A-level grade, due to discrepancies flagged by its auditor general, earning a B as well.

Ontario received a B-, while Newfoundland and Labrador earned a C.

Meanwhile, Manitoba and the Northwest Territories both came in with grades of D-, faring worse than the federal government in 2025

“People shouldn’t need to be accountants to understand a government’s budget and financial statements,” said the institute’s research officer Nicholas Dahir.

“A motivated voter, legislator or reporter should be able to find the key numbers easily – to see what the government planned to spend and collect at the start of the year, and to compare those plans with the actual revenues, expenses and surplus or deficit reported after year-end.”

The institute projects that Alberta is also on track to maintain its top position next year, “while the federal government – which has not yet produced a budget for the 2025/26 fiscal year,” is on track to being downgraded from a D to an F.

“A current example of muddying the waters is the federal government’s decision to move the amortization of its unfunded pension liabilities out of compensation costs in the expense numbers of its budgets, public accounts and fiscal monitors, instead showing them as a charge below a conceptual ‘operational balance’ line,” reads the study.

“This presentation diverts attention from a major component of the cost of federal employees. It also makes these charges look like the result of circumstances outside the government’s control, which they are not.”

According to Robson, the top-performing governments prove to Ottawa that financial accountability and transparency can be done, “and others should follow their lead.”

“If Canadians demand better financial reporting, and legislators take their responsibility to steward public funds seriously, governments will have no excuse for falling short,” he said.