Archived - Review of Canadian Federal Fiscal Forecasting

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Processes and Systems

Tim O'Neill
O'Neill Strategic Economics

June 2005

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Table of Contents

Executive Summary

Section 1 - Introduction

Section 2 - Qualitative Analysis of Fiscal Forecast Accuracy:
Summary of Consultations

2.1 Nature and Key Elements of the Problem 2.2 The Economic and Fiscal Forecasts: Issues and Solutions 2.3 Surplus Versus Deficit 2.4 Fiscal Anchor and the Role of Caution 2.5 Time Frame 2.6 Institutional Remedies 2.7 Conclusion

Section 3 - Quantitative Analysis of Fiscal Forecast Accuracy

3.1 Forecast Processes 3.2 The "Big Picture" on Fiscal Forecasting 3.3 Calculating Forecast Accuracy 3.4 Canada's Forecast Accuracy - An International Comparison 3.5 Track Record of Economic Forecasts 3.6 Impact of Economic Forecast Differences 3.7 Other Factors Influencing Fiscal Forecast Accuracy 3.8 Conclusions

Section 4 - Recommendations

4.1 The Need for Transparency 4.2 Improving Accuracy & Timeliness of Data 4.3 Fiscal Rules - Options 4.4 Possible Institutional Changes 4.5 Summary of Recommendations

Tables and Charts

Appendix 1 - Individuals Consulted

Appendix 2-A - Recommendations of the Ernst & Young Report

Appendix 2-B - Evolution of Budget Forecast Procedures

Appendix 2-C - Prudence Included in Fiscal Forecasts Since 1994

Bibliography