It’s time for real clarity on Canada’s finances
We are now into, what, the fourth “oops” moment of the new government — though the week is not out — wherein it confesses that the promises on which it was elected seven weeks ago are no longer operative.
The 25,000 Syrian refugees who were supposed to be admitted before New Year’s are now down to 10,000 because — who knew? — it would be impossible to screen them all in that time, certainly not on Canadian soil as the Liberals had originally planned.
The fighter jets that were supposed to have been brought home from Syria are still flying missions because — who knew? — our allies are not entirely happy to see us desert them.
The tax increase on the rich that was supposed to pay for the tax cut for the near rich is at least $1 billion short of the mark and probably $2 billion, because — who knew? — the Liberals have discovered the rich tend to respond to government attempts to take more of their income by reporting less of it.
And, of course, the deficit that was supposed to come in at a modest $10 billion for two years is now headed for, well, your guess is as good as mine — $15 billion? $20 billion? Already the Liberals are hinting that some of the other promises on which they were elected — restoring home mail delivery, for example — might have to be delayed or reversed.
Naturally this is all the Conservatives’ fault. Without evident sense of shame, the Liberals are performing that much-loved vaudeville routine, “The Cupboard is Bare,” wherein an incoming government professes itself shocked to find the books are — who knew? — not quite in the robust shape the outgoing government had claimed.
Sure enough, the $7 billion in surpluses over the next four years projected in the spring budget has been transformed, according to the Finance department, into $8 billion in deficits, even before any of the Liberals’ planned spending increases. Of course, a skeptic might wonder whether the new government was now cooking the books to make them look worse than they are, the better to lower expectations.
And indeed the independent Parliamentary Budget Officer’s estimates, issued some days after Finance’s, put the government on a slightly better footing, at least in the short term: a surplus of $1.2 billion in the current fiscal year, versus Finance’s deficit of $3 billion; a deficit next year of $3 billion, rather than $4 billion. (Though the PBO’s numbers for subsequent years are actually more pessimistic than Finance’s.)
The question to be asked here is not whose numbers are less trustworthy, the Conservatives’ or the Liberals’. The question is why the books should be entrusted to either of them. Why must the rest of us depend upon the government of the day, of whatever party, to tell us the state of the country’s finances, when we know they are probably lying?
Why should such basic bits of data as how much the government takes in and how much it spends be maintained as the closely guarded prerogative of the government in general, and Finance in particular, to be bent, folded and manipulated into whatever shape suits their political masters? In short, why shouldn’t everyone be working off the same set of figures, inside government and out?
In fact, we’ve already gone part of the way down that road. Once upon a time, Finance ministers used to base their budgets on their own projections of economic growth and the like, until these grew so discredited that the practice was adopted of using an average of privatesector forecasts. Yet the rest of the budget process is still subject to the same dark arts as before.
The PBO, brought in by the newly minted Conservative government after the sponsorship scandal, was an attempt to move things a little further in this direction. Yet its success has been limited. It can ask departments for information — say, on how they plan to achieve certain spending cuts — but enforcing its demands has proved difficult.
The Liberals have promised greater independence to the PBO — the platform pledges that it will be “properly funded, and answerable only, and directly, to Parliament” — but not a great deal more authority. The only explicit commitment is to include “the costing of political party platforms” in its mandate. (One wishes this had applied, say, to the Liberals in 2015.)
But surely it is the government that owes a special duty of transparency. Rather than requiring the PBO to approach government departments for fiscal information, surely it should be the other way around. Why couldn’t the PBO, or some such arms’ length agency, be the common repository of all such information, to be dispensed impartially to government and opposition parties alike?
Essentially this amounts to taking the books out of the hands of Finance (which produces the budget and the estimates), or Treasury Board (which issues the public accounts at the end of the fiscal year) and putting them under independent control and supervision. Responsibility for verifying the books is already assigned to an independent officer of Parliament, the auditor general; this would simply be an extension of the same principle.
Working off numbers supplied by others, and available to all, Finance would become, as it should be, a purely policy-making body — not the place where the fiscal bodies are buried.
WHY SHOULDN’T EVERYONE BE WORKING OFF THE SAME SET OF FIGURES, INSIDE GOVERNMENT AND OUT? — COLUMNIST ANDREW COYNE