Ottawa, 3 April 2012—The Department of Finance Canada has sound practices for developing effective market debt strategies as well as responding to emerging risks and changes in funding requirements, says Michael Ferguson, Auditor General of Canada, in his Report tabled today in the House of Commons. At $30.9 billion last year, the interest charges on the government’s $802 billion debt accounted for 11.4 percent of government spending.
“Interest charges on the public debt limit the policy choices available to government,” said Mr. Ferguson. “Improved reporting on the interest-bearing debt not only helps managers manage but also helps Canadians understand what they can afford as a nation.”
The audit found that while Finance Canada has made major advances in its tools for debt management, it needs to provide more information to decision makers and Canadians about how well the debt management strategy is performing.
The audit also found that Finance Canada and the Treasury Board Secretariat could improve their reporting on the government’s public sector pension plan liabilities, which totalled $146 billion at the end of March 2011. While complete financial information on the pension plans is available, it is dispersed among several reports and not presented in ways that non-experts can understand. The impact of the public sector pension plans on the budgetary balance and debt charges needs to be better explained.
“Canada is a world leader in recording public sector pension liabilities in its financial statements,” said Mr. Ferguson. “But the information needs to be easier to find in order to be understood by a broader audience.”
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The chapter “Interest-Bearing Debt” is available on the Office of the Auditor General of Canada website.
For more information, please click here.