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The Canadian Government, the World Bank and the International Monetary Fund:
A REPORT CARD on FINANCE CANADA’S 2007 ANNUAL REPORT to PARLIAMENT
Executive Summary
Every year at the end of March, the Minister of Finance tables the “Report on Operations under the Bretton Woods and Related Agreements Act”. The Bretton Woods Conference in 1944 established the World Bank and International Monetary Fund (IMF). The annual report details Canadian priorities, commitments and interests over the past fiscal year at these institutions. The annual report to Parliament is an important tool for assessing the government’s actions within these institutions relative to its foreign policy and development objectives, and for informing Parliament and the Canadian public about Canadian priorities at these important multilateral fora. Canada is among a number of countries that report to Parliament on their activities at these institutions.
The annual report is also important because, despite sustained calls for improved transparency at the institutions, there is still limited disclosure of IMF and Bank Board discussions. This makes it difficult for parliamentarians and the public to determine whether the government positions that are put forth in Board discussions are consistent with stated Canadian priorities. The annual report, then, is the only tool by which Finance Canada regularly informs parliamentarians about government activities at the Bank and IMF.
Yet these reports have never been debated by Parliament nor by any parliamentary committee. The Canadian Executive Directors to the Bank and Fund have not appeared before a commons committee since the last hearing was held in 1995. The Finance Minister has also never briefed the relevant parliamentary committees on government positions regarding Bank and IMF issues prior to attending the institutions’ bi-annual meetings. And while two sub-Committees on International Financial Institutions existed from 1992 to 1997 under the Finance and Foreign Affairs’ Standing Committees, there is currently no regular venue for involving parliamentarians on issues related to the Bank and IMF.
Since 1995, the Halifax Initiative has produced report cards on the annual report to Parliament. These report cards evaluate the transparency and accountability of Finance Canada to Parliamentarians. They do not assess the performance of the international financial institutions in these areas or the government’s positions on specific issues. Now that greater information is available on the latter, the Halifax Initiative will provide a separate critique on this content.
Past report cards have outlined general weaknesses in the annual reports, such as the duplication of content from year to year, and the lack of clarity on Canadian goals and priorities at the institutions. This year’s report card, like last year’s, evaluates the improvements in the 2007 Annual Report relative to the following:
- best practices;
- recommendations made in previous Halifax Initiative report cards;
- previous annual reports to Parliament; and
- the Auditor General’s 1992 review of the annual report.
Overview of this year’s report
In general, the 2007 Annual Report marks a substantial improvement over the 2005 and 2006 annual reports, both in format and in particular, in content.
In terms of format, there are a number of positive changes: the organization of the report into three distinct sections (a comprehensive introduction to the institutions and Canada’s place within them, an overview of Canadian priorities and actions in 2007, and Canadian medium- term priorities looking forward) is much more logical than previous iterations of the report; situating Canadian policy priorities and actions for both institutions within three core principles establishes a useful framework for reporting on government actions over the past year and in its activities looking forward; and the report also does well to identify those objectives that apply to both institutions and to include these in common sections (for example, on governance reform, sound finances and transparency). In all, the new medium term framework does a much better job of articulating a more coherent and consistent government strategy for the Bank and Fund.
In terms of content, there are also a number of positive changes: for the first time ever, the report has provided Canadian positions and activities on all the issues it addresses, not just a select few; in the 2007 overview, there are more consistent indications of the directions in which Finance would like the institutions to go, looking forward, on specific issues; these “indications”, along with the medium term priorities that provide context, goals, short and medium term actions, give the reader a better sense of the government’s forward-looking strategy with respect to the institutions; and, lastly, financial information remains strong, with the welcome addition of disaggregated figures for Canadian contributions to Multi-Donor Trust Funds. While the new medium term framework provides benchmarks against which to evaluate the government’s performance in the coming years, next year’s annual report would do well to include indicators against which to evaluate, more clearly, success in meeting these goals.
Marking Scheme
A – Substantial Progress - on par with best practice.
B – Some Progress - demonstration of “good faith”.
C – Little Progress - cosmetic changes, nothing of substance added.
D – No change.
Annual reports from 2001 – 2005 earned a “D” grade under this scheme. The 2006 Annual Report received an overall “B-“. This year’s annual report receives an overall “B+”.