Canada Financial Report

Canada Financial Report
Luis Erausquin Granados
Fachhochschule Wiesbaden-University of Applied Sciences
Canada´s Financial Progress in an
International Context
Table of contents:
1. Introduccion & overview
2. Regular framwork
3. Budgetary Balance, Financial Requirements/Surplus &
National Accounts Budget Balance.
4. Canada´s Financial Progress in an International Context
Introduccion & overview
• Follow the anglo-saxon model in financial reporting
• Share the U.K. as former colonial power
• More developed accountancy professsion than credit-based
– CICA (Canadian Institute of chartered accountants)
– CGAAC (Certified general accountancts associatio)
– SMAC (Society of management accountants)
Coordiantion between autonomous procincial institutes
Small role in standart setting than CICA
Regulatory framework
• Resembles:
– U.K.: Importance of company law
– U.S.A. :securities commision
• Cananda as a federation:
– Division of power under constitution
– .Provincial securities commision (e..g. S.E.C.)
• Developing of accounting rules in six phases *
– 1864/1946: Main influences. Market & traditions from U.K.
– 1946/1967: Technical expertise
• In 1946 CICA established and Accountaing & Auditing Research
Committe recogniced into CICA handbook containing
recomendations.
– 1967/1973: Establishment of permanent bureaucracy:
• Recomendations (1946) were given recognitions in the 1970s by
securities comissions and federal and provincial legislatures
– In Canada Securities Adminidtrators .National Policy Statement
– Canada business Corporation Acts (1975):Transferred requierements to
fianancial statements from the bodz of Act to Regulatory Section.
– 1973/1981: Ontario Securities Act 1978 and other provincial
legislation contain the same requierement.Canadian legislation
requires financial statementsto be in concordance with CICA
handbook.
– 1981/1990: In 1988 as result of criticism of slowness standar
settings process CICA established an Emergencing Issues
Committe (EIC).
– Since 1990: Current situacion is that Canada standars are
developed by CICA´s Accounting Standards Board (1991) as
succesor to Accounting Standards Committe
• Board comprises: 13 part-time voluntieer voting members,including
accountants in public practices, comerce, fiannce and education
• Not less than 2/3 of Board´d members are CICA members.
Budgetary Balance, Financial
Requirements/Surplus & National Accounts
Budget Balance
• Federal Govenment´s Fiscal Measures:
– Two based on Public Accounts(1):
• Budgetary Balance:include all financial transactions between
government and habilities incurried during the year for which
no cash payment has been made.
• Financial Requirements surplus
– One on the sistem of National Accounts(2):
– Porpouse of Public Account(1):
• Provide information to Parlament in government´s Financial
activities as requiered under the financial Administration Act.
• Based On general accepted accounting principles for public
sectors and auited by Auditor General of Canada
– Diferences between budgetary balance and financial
requierements/surples (1): the treatment of federal
government employee´s pension account
• Budgetary balance includes the total annual pension related
obligations
• Finacial requierements/surplus includes only the benefits paid
out in that year less employee premiums paid
– Primary objetive of National Account(2):To measure
current economic production and income
• The curent National Accounting and fiancial
requierements/surples treat the transaction of federal
goverment employee´s pension accounts similarly
• National Accounting Balances used for international fiscal
comparison by the Organisation for Economics Cooperation
and development and international Monetary Found
• The National Accounting provide a constistent framework for
comparition of fiscal position of the various levels of
government of Canada
Each of three measures provide important complementar
perspectives on the Government´s Fiscal Position
Canada´s Financial Progress in an
International Context
Overview:
• Compare Canada´financial position with that of the Group
of Seven(U.S.A, U.K, France, Germany, Japan & Italy)
tend to complicate international finance comparition:
– Diferences in accounting methods among countries afect
compativility of data
– Financial responsabilities are distributed aming various levels of
government in each country
Significant budget Surpluses for Canada:
• Following the recesion of 1990´s total government sector
deficit peaked at 8 % of gross domestic producction (GDP)
in 1992,compared to G-7 average deficit-to-GDP ratio of
4,5
• Subsequent deficit reduction effors by all levels of Canada
government resulted in a total government budget suplus in
1997
• Canada´s budget improvement over 1992-1999 surpassed
that of all other G-7 countries
Fasten decline in program Spending:
• Between 1992 and 1999 Canada implemented the largest revolution in
program spending relative to GDP of any G-7 countries. Dropped
8.5% percentaje compared to 1.5 for G-7
(See Chart A 4.3)
Sharp Decline in Cnada´s Net Debt-to GDP Ratio
• Over last years Canada experienced the sahrpest decline in the debt to
GDP ratio of the G-7.In 1999 Canada´s debt to GDP ratio was 10%
above the G-7 average.
• A further reduction in debt burden remain a kez objection of Canada
garnnmet´s fiscal policy
Bibliography
Nobes,Chritopher/Parker, Robert;
Comparative International Accounting
Hemel Hempstead:Prentice Hall Europe:6th edition 2000
Fabozzi, Frank/ Modigliani, Franco
Financial Markets & institutions
Prentice Hall Europe:1996
Radebaugh, Lee/ Gray, Sindney
International accounting and multinational enterprise
John Wiley & Sons Inc.,New York 1993
Internet
- http://www.fin.gc.ca
- http:// www.canada-es.org