Prov­ince has changed its ac­count­ing method: re­port

Edmonton Journal - - CITY - SAMMY HUDES

Al­berta’s bud­gets may ap­pear big­ger nowa­days than years past, but that’s not nec­es­sar­ily a sign that more of your tax dol­lars are be­ing spent.

That’s ac­cord­ing to a new re­port, co-au­thored by Ron Knee­bone and Mar­garita Wilkins of the Univer­sity of Cal­gary’s School of Pub­lic Pol­icy, which ex­am­ines changes to the prov­ince’s ac­count­ing con­ven­tions which be­gan un­der the last Pro­gres­sive Con­ser­va­tive gov­ern­ment.

Up un­til then-premier Jim Pren­tice’s fi­nal bud­get, gov­ern­ment ex­pen­di­tures and rev­enues re­lated only to mat­ters as­so­ci­ated with the poli­cies and de­ci­sions of elected of­fi­cials were in­cluded, which is known as a fis­cal-plan ba­sis.

But start­ing in 2015, the gov­ern­ment started using a con­sol­i­dated fi­nan­cial ba­sis for its bud­gets — a method main­tained by Premier Rachel Not­ley and her gov­ern­ment — which also in­cludes rev­enues and ex­pen­di­tures for Crown-con­trolled school boards, uni­ver­si­ties and col­leges, and health en­ti­ties.

“It makes it dif­fi­cult to com­pare ap­ples to ap­ples,” said Knee­bone, since com­par­isons to past bud­gets in Al­berta’s his­tory, in ad­di­tion to deficits or sur­pluses, can’t prop­erly be cal­cu­lated with­out ac­knowl­edg­ing for the changes in ac­count­ing.

“By do­ing this, what they did is they in­creased the size of the gov­ern­ment, whereas if you were a PC gov­ern­ment you prob­a­bly didn’t want to do that,” he said. “It made the gov­ern­ment seem big­ger than it was other­wise, and it made the deficit dif­fer­ent. It made the debt larger.”

The new study helps clean up the data, mak­ing nec­es­sary math­e­mat­i­cal ad­just­ments to en­able peo­ple to com­pare.

“If we’re, as tax­pay­ers and vot­ers, go­ing to hold gov­ern­ment ac­count­able, we have to have a proper mea­sure of their per­for­mance,” Knee­bone said.

Un­der the old ac­count­ing method, Al­berta’s deficit in the 2016-17 NDP bud­get, which came out to $10.8 bil­lion un­der the new ap­proach, would have been $11.8 bil­lion.

The last PC bud­get would have been about $400 mil­lion higher had the tra­di­tional ap­proach been used.

But Knee­bone said nei­ther party was try­ing to play pol­i­tics by opt­ing for the con­sol­i­dated cal­cu­la­tion.

“There’s noth­ing ne­far­i­ous go­ing on here, it’s just that they changed the way that they did their ac­count­ing, but it does mat­ter,” he said.

“This is how gov­ern­ments talk to cit­i­zens.”

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