At the AcSOC meeting on October 17-18, 2019, Geoff Gatien, Associate Deputy Minister and Controller of Nova Scotia, accompanied by Aurel Tess, the Provincial Comptroller of Manitoba, addressed the AcSOC about the Canadian Council of Comptrollers’ concern with the planned amendments to Section PS 3450, Financial Instruments, and Section PS 2601, Foreign Currency Translation. Both standards become effective on April 1, 2021.

Mr. Gatien noted that net debt and net debt to gross domestic product are key indicators to the financial condition of governments. He and Mr. Tess stated that the Canadian Council of Comptrollers does not believe that the standards as drafted are in the public interest. Mr. Tess said that the risk of artificial volatility will change the debt management practices of senior governments, which will lead governments to be reluctant to borrow in foreign markets. This will likely increase the cost of borrowing in the Canadian markets and reduce the funds available to governments.

Mr. Gatien added that the artificial volatility will have to be explained to members of the Legislature and the public. This may lead to numerous qualifications in government financial statements, which may erode confidence in Canadian public sector accounting standards. Mr. Gatien informed AcSOC that the PSAB Chair expressed a willingness to consider a solution developed by senior government representatives. Following a question-and-answer period, the AcSOC Chair thanked Mr. Gatien and Mr. Tess for their presentation. He noted that AcSOC takes their feedback seriously and wants to ensure stakeholders have an opportunity to voice their concerns.

Review the meeting summary on the AcSOC's Web site.