Six of Canada's largest cities, including Montreal, Hamilton and Victoria, received failing grades for the fiscal transparency of their budgets, while six others earned spots on the honour roll, in a new report card from the C.D. Howe Institute.

In "Making Sense of City Budgets: Grading the Fiscal Accountability of Canada's Municipalities, 2025," authors William B.P. Robson and Nicholas Dahir assess the transparency and accountability of 39 major cities.

This latest in the C.D. Howe Institute's annual reports on municipal finances includes Charlottetown, Fredericton, Iqaluit, St. John's, Victoria, Whitehorse and Yellowknife, expanding its coverage to all provincial and territorial capitals.

The grades do not assess whether cities tax or spend too much or too little. Instead, they measure whether city budgets and financial statements provide clear and timely information so that councillors, taxpayers and other non-expert readers can evaluate and hold local governments accountable for their decisions.

"From water to transit to emergency services, municipalities deliver the services Canadians rely on every day," says Robson, President Emeritus and Fellow-in-Residence, C.D. Howe Institute. "Councillors need clear financial information to do their jobs, and taxpayers need it to understand and evaluate their decisions. When only specialists can decipher budgets, accountability breaks down."

Richmond and Quebec City, top performers in the past, earned top marks again, joined this year by Markham, Saskatoon, Vancouver and York Region. Iqaluit, newly added to the rankings, also performed strongly. These cities stood out for publishing timely budgets that clearly highlighted key figures aligned with Public Sector Accounting Standards (PSAS), allowing direct comparison with financial statements.

At the other end of the spectrum, Charlottetown, Gatineau, Hamilton, Montreal, Victoria and Whitehorse received failing grades. In several cases, including Gatineau and Hamilton, poor performance has persisted for years. The report finds that many budgets still lack PSAS-consistent figures, split spending into fragmented categories, and are approved only after the fiscal year is already underway.

The report recommends that municipalities present PSAS-consistent budgets, showing consolidated revenues, expenses and bottom-line projections on a single page, accessible in a single document. It also calls for earlier budget releases, clearer comparisons between budget plans and year-end results, and more timely financial reporting so councillors and the public can assess fiscal health and service capacity and promptly act on any problems.

"Poor financial reporting weakens democratic oversight and discourages meaningful public engagement," says Dahir, Research Officer, C.D. Howe Institute. "Now in its 15th year, this report reflects a simple premise: citizens can only hold local government to account when budgets are clear, comparable and timely."

• Read the Full Report