Budgets from scratch in new law
Bill 1 will require government departments to display need for public money
A new Alberta law will force every government department to dismantle its budget and rebuild it from scratch, justifying each expense along the way.
The law, called the Results-based Budgeting Act, could mean substantial restructuring of government service delivery, and critics warn it will usher in an era of privatization.
The new law will be the government’s flagship Bill 1, and is expected to be tabled in the legislature at the start of the spring session, which opens Tuesday.
Deputy premier Doug Horner said the goal is to identify the result government wants to achieve, then “rebuild the department or the pro- gram or the service delivery mechanism based on that.
“There are 100 different definitions for zero-based (budgeting),” Horner said Wednesday. “That’s why Premier (Alison Redford) was insistent that we start dealing with results, we start getting results out of our program delivery and value for the taxpayer.”
Horner assured Albertans that “this is not a witch hunt.
“It’s not about cutting. It’s not about laying hordes of people off. It’s about delivering services better,” he said.
During the Conservative leadership race, Redford pledged to demand departments conduct detailed program reviews and show why programs and services cannot be delivered by community-based organizations or the private sector.
“Within six months, I want to identify services that can be transferred to community leadership or privatized,” Redford said in her platform.
In Fort Mcmurray last week, Redford said “one of the things we’re going to be talking about is the zerobased budgeting approach.
“Over a three-year period, every department ... will have to go back and build their budget from a zero base. That means they have to examine all of the programs in their departments, they have to ensure their programs are achieving the outcomes we believe, as government, Albertans want.”
Redford said the process could lead to the cancellation of programs and the introduction of new programs that better respond to needs.
“It’s sound fiscal policy, it’s what the private sector does, and I think it’s going to bring a level of accountability to political decision-making and government spending that we haven’t seen in Alberta before,” Redford said.
NDP Leader Brian Mason said the new process will throw government services into chaos.
“This is the ultimate in conservative ideology driving the budgeting process,” Mason said. “I’m expecting that as a result of this we’re going to see one goody budget just before the election, followed by three years of deep cuts and privatization.
“They are beginning to show their true colours.”
Alberta Party Leader Glen Taylor said in a statement his party supports zero-based budgeting but that “budgets should be built in the open,” not behind closed doors.
Zero-based budgeting first gained prominence in the 1970s under U.S. President Jimmy Carter, according to a recent report prepared for the City of Calgary by the Chicagobased Government Finance Officers Association. Interest declined in part because economic conditions improved, author Shayne Kavanagh writes.
“The attraction of zero-based budgeting, for many, is that the ‘zero’ in zero-based budgeting sends a powerful message to all stakeholders that the line will be held on spending and that nothing will be taken for granted,” Kavanagh wrote.
“Applying the label to the budgeting process makes this statement, even if the actual budget process doesn’t conform fully to zero-based budgeting theory.”