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The Public Sector Accounting (PSA) Handbook underpins all accounting by Canada’s public sector. The handbook does not allow inherited natural resources to be counted as “real” assets, arguing that “the costs, benefits and economic value of such items cannot be reasonably and verifiably quantified using existing methods.”
We respectfully disagree. The handbook suggests that natural assets have no inherent value and do not make an economic contribution. Natural capital valuations and the growing experience of municipalities testing the value of their natural assets say otherwise. The handbook sends the wrong message and gives local governments limited incentive and no direction, from an accounting perspective, to inventory or value their natural areas.
Local governments are already creatively working around the handbook’s wording and interest is mounting for changes. The Public Sector Accounting Board is now consulting on two documents that could open the door for natural assets to be properly considered in public sector accounting.
This marks a real opportunity for change. MNAI is working with partners to provide input into the PSAB consultations by the November 28 deadline. Contact us if you want to be involved. General information on the consultations can be found here.