1998-1999 BUDGET:

QUÉBEC ADOPTS AVANT-GARDE ACCOUNTING PRACTICES

(Québec City, March 31, 1998)—For several years, the Québec Auditor General has urged the government to update its accounting policies. Last December, a study committee made up of representatives of the Auditor General, the Comptroller of Finance and the ministère des Finances was set up.

Deputy Prime Minister and Minister of State for the Economy and Finance Bernard Landry today submitted the report prepared by the committee of experts and announced that the government has accepted all of the report’s recommendations. Québec is immediately adopting a series of accounting policies that, according to the committee, "put Québec at the forefront of governments in Canada concerning the application of public sector accounting standards."

The government is updating the accounting policies that have been applied for a number of years. "Gone are the days of retirement plan commitments that do not appear in the government’s financial statements. Gone are the days of disparate accounting in respect of specific agencies. Gone are the days of criticism and suspicion regarding the proliferation of special funds."

The report of the committee of experts contains recommendations to change nine accounting policies:
— accounting treatment of the retirement plans;
— accounting treatment and presentation of tangible capital assets;
— redefinition of the reporting entity and the attendant legislative amendments;
— accounting treatment of borrowings;
— accounting treatment of the cost of reorganizing the public sector;
— loans repaid by subsequent budget appropriations;
— presentation of consolidated financial statements and the budget process;
— inclusion of revenue and expense forecasts in the financial statements;
— transitional measures pertaining to the implementation of the reform.

From now on, the entire liability of the retirement plans will be recorded in the government’s balance sheet.

Moreover, the government will present consolidated financial statements, which will include 92 additional economic units reporting to varying degrees to the government. This consolidation integrates into the reporting entity the 34 special funds, thereby putting paid to criticism and suspicion concerning their number and showing that the Québec public sector overall is in sound financial health.

As recommended by the Study Committee, the government will adopt the new standard issued in September 1997 by the Canadian Institute of Chartered Accountants (CICA) stipulating that tangible capital assets be depreciated over their useful life.

WHETHER NEW STANDARDS OR OLD APPLY,
WE WILL NONETHELESS ACHIEVE OUR TARGETS

Under the new accounting policies, which are the most rigorous and demanding in Canada, the government is maintaining the $1.2-billion deficit target for this year and the elimination of the deficit next year. Whether new standards or old standards apply, we will nonetheless achieve our targets.

QUÉBEC GOVERNMENT DEFICIT ACCORDING TO THE OLD AND
NEW ACCOUNTING POLICIES

(in millions of dollars)

To conclude, Mr. Landry emphasized the unfailing rigour of the Québec Auditor General and his essential technical support in elaborating the reform, which will long be a guarantee of the accounting credibility of Québec’s public finances.

SOURCE: ANDRÉE CORRIVEAU
COMMUNICATIONS ADVISOR
OFFICE OF THE DEPUTY PRIME MINISTER
TELEPHONE: (418) 643-5270

Gouvernement du Québec   |  © Gouvernement du Québec, 2001