Lies, damn lies and budgets

If you were a budget officer for any government in Canada, I’ll bet you would lowball your revenue estimate for the coming year. And (except during election years) you would plan spending based on those estimates.

If you were a budget officer for any government in Canada, I’ll bet you would lowball your revenue estimate for the coming year. And (except during election years) you would plan spending based on those estimates.

I’m ready to bet the authors of a report written for the C.D. Howe Institute would do the same, if they were tasked with budget responsibilities.

And when revenues — surprise! — pan out better than worst-case, I’d bet both you and the people at C.D. Howe would have a list handy, of priorities for the extra cash.

So I have to take some exception to the snarky tone of both their report and the reporting done on their report, which gives half the provinces a failing grade for budget transparency, with most of the other half receiving a barely-passing grade.

In brief, their report says most provinces vastly under-estimate their incomes at budget time, and then use the “surplus” revenue as a type of slush fund for pet projects and goodies, without needing legislative budget approval.

When you look at their chart of provincial spending above budget from 2003-13, you might be shocked.

Saskatchewan overspent its budgets in that period by about 37 per cent, the highest in the country. Their $4.3 billion overspending earned them a D+.

Alberta “only” overspent by about 27 per cent, earning our province a C rating. Strange, though, because the dollar figure is a whopping $10.2 billion.

These budget methods have been the Get-Out-Of-Jail-Free card Alberta has played for as long as most of us can remember.

The A grade given the federal government, in my view, should be classified as an Easy A, because federal revenues are far more stable and predictable, as are their expenses. Transparency, as defined in the report, is politically easier.

On the expense side, the federal government mostly just issues transfers to the provinces, which then have to make the real-world decisions. Then, they need to figure out how many unemployed people there are, and how many babies will need family support payments.

Easy, compared with actually building schools, roads, hospitals and bridges, while delivering the social services (like health care and education) the feds only partially pay for.

The skepticism expressed in the report is warranted, though. But the causes for it are hardly surprising.

Colin Busby is one of the report’s authors, and he discussed it with the friendly audience on CBC’s The Lang & O’Leary Exchange.

“Their revenue targets come in quite a bit higher than they forecast, and that’s normal given that they are getting their revenue from royalties,” Busby said. “But that does spill over on the spending side. For every dollar they get that they didn’t anticipate, about 75 cents is translating into new spending.”

Bingo. But should anyone be surprised? Here’s a better question: would anyone else do it differently?

The best aspect of the C.D. Howe report is the hardest to translate in detail for a TV news audience, or a newspaper critic.

That aspect lies in the methods all the provinces and territories use to report — and to sometimes disguise — their budget estimates, versus the actual outcomes later. You can’t compare apples to apples across the country.

Prince Edward Island overspent its budgets by less than 15 per cent in the decade measured. The dollar figure was $200 million.

That’s just a tiny slice of Alberta’s overspending. Actually, provincial yearly overspending on the island is less than a rounding error on an Alberta budget.

Go figure. C.D. Howe apparently does. PEI was awarded a D- while Alberta got a C. But the mark reflects supposed transparency, not outcome. Which is kind of a joke.

There are lies, damn lies and budgets. Nobody expects Alberta’s estimate for revenue to be anything else than a couple billion or more on the low side.

School boards that have to build honest budgets based on provincial spending predictions must later re-write them when Christmas comes and the province shouts hooray and doles out cash they never thought they’d ever have. For a few days of “good” news, of course. For this, Alberta gets a passing grade?

The federal government doesn’t even know the actual rate of job availability nationally anymore, because of their cuts to Statistics Canada. So they use a data trawl of Kijiji ads instead. And they get an A?

That’s where skepticism passes into cynicism, and reports like this one from C.D. Howe appear somewhat less than reliable.

Follow Greg Neiman’s blog at readersadvocate.blogspot.ca.

Greg Neiman is a retired Advocate editor. Follow his blog at readersadvocate.blogspot.ca or email greg.neiman.blog@gmail.com.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

City council will have to wait longer to hear back from administration on possible alternative sites — if the homeless shelter is moved from Red Deer downtown. (Photo by LANA MICHELIN/Advocate staff).
Alternative sites for homeless shelter will be explored by the City of Red Deer

Council gave administration more time to return with a report

Quentin Lee Strawberry was found not guilty of second-degree murder in connection with stabbing death of Joseph Gallant in March 2019. (Photo from RCMP)
Updated: O’Chiese man found not guilty of 2019 stabbing death of Red Deer man

Quentin Strawberry found guilty of assaulting murdered man’s common-law partner

(Advocate file photo).
City of Red Deer property tax bills are in the mail

Red Deer 2021 tax notices are on their way. Red Deer property… Continue reading

‘Dear Future Children’ takes top audience prize at Hot Docs film festival

‘Dear Future Children’ takes top audience prize at Hot Docs film festival

FILE - Signage promoting the 77th annual Golden Globe Awards and NBC appears in Beverly Hills, Calif. on Jan. 5, 2020. NBC said Monday that will not air the Golden Globes in 2022. (Photo by Jordan Strauss/Invision/AP, File)
Amid outcry, NBC says it will not air Golden Globes in 2022

Amid outcry, NBC says it will not air Golden Globes in 2022

RCMP officers work at the scene after a shooting outside the international departures terminal at Vancouver International Airport, in Richmond, B.C., Sunday, May 9, 2021. Homicide investigators expect to release more information about a deadly shooting in Burnaby on Saturday that police say could be linked to a similar slaying at Vancouver's airport just one day later. THE CANADIAN PRESS/Darryl Dyck
‘We will do everything we can,’ B.C. police say to reassure public amid gang violence

‘We will do everything we can,’ B.C. police say to reassure public amid gang violence

Pentagon spokesman John Kirby speaks during a briefing at the Pentagon in Washington, Wednesday, May 5, 2021. (AP Photo/Manuel Balce Ceneta)
US ship fires warning shots in encounter with Iranian boats

US ship fires warning shots in encounter with Iranian boats

A Palestinian protester does a handstand next to a fire which was set on a road during clashes with Israeli police near Damascus Gate just outside Jerusalem's Old City, Sunday, May 9, 2021. Israeli police have been clashing with Palestinian protesters almost nightly in the holy city's worst religious unrest in several years. (AP Photo/Ariel Schalit)
Hamas launches new attack on Israel after Jerusalem clashes

Hamas launches new attack on Israel after Jerusalem clashes

Bloc leader Yves-Francois Blanchet holds a news conference before Question Period, Monday, May 10, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
NDP join Liberals to cut short debate, move pandemic election bill forward

NDP join Liberals to cut short debate, move pandemic election bill forward

Specimens to be tested for COVID-19 are seen at LifeLabs after being logged upon receipt at the company's lab, in Surrey, B.C., on Thursday, March 26, 2020. THE CANADIAN PRESS/Darryl Dyck
Iqaluit elders home evacuated after staff member tests positive for COVID-19

Iqaluit elders home evacuated after staff member tests positive for COVID-19

NDP leader Jagmeet Singh listens to a question as he speaks with reporters on Parliament Hill, Wednesday, May 5, 2021 in Ottawa. Singh says he believes there's a connection between anti-mask and anti-lockdown protests and far-right extremism. THE CANADIAN PRESS/Adrian Wyld
‘Pandemic of hate’: Leaders, experts warn anti-lockdown protests linked to far right

‘Pandemic of hate’: Leaders, experts warn anti-lockdown protests linked to far right

Most Read