All governments overspend
The
Gazette (Montreal)
Thu 01 Mar 2007
Page: A18
Section: Editorial /
Op-ed
Byline:
Source: The Gazette

The next time a Canadian government tables a budget,
taxpayers would be wise to take it with a grain - or a block - of salt.

A C.D. Howe Institute study
has found that Canadian governments - all 14 of them - have spent $63 billion
more over the last decade than what their announced budgets called for.

A couple of findings are headspinners: Alberta has the worst record for
overspending - that's right, debt-free, oil-rich, no-sales-tax Alberta - while
Quebec and Ottawa have the best record for maintaining discipline in spending,
beating out the other nine provinces and three territories. In other words, what
the two governments ended up spending in the real world was closest to the mark
when compared with what they told citizens at budget time they intended to
spend.

Pretty impressive, you say? Of course not. Rather, it simply confirms yet
again the dictum about statistics and lies.

Quebec's No. 1 ranking is sleight-of-hand stuff, as budget-watchers know only
too well. In its final spending figures, Quebec excludes much of its health and
education expenditures. Given that these are among the highest and
fastest-growing expenses for most governments, it's as ridiculous as a homeowner
excluding his mortgage and hydro payments from his annual household budget.

And Alberta coming in dead last is no less misleading. While politicians
there might well chronically underestimate how much they will spend, Quebecers
would kill to be in Alberta's financial position. The place has no deficit, no
debt - zilch, zero - and its citizens pay no provincial sales tax.

Compare that with Quebec: We owe about $90.4 billion if you're optimistic and
$122.4 billion if you're more accurate (the latter figures includes Quebec's
retirement-plan liabilities); we pay a 7.5-per-cent tax on everything from our
phone bills to our sandwich at lunch; and our "balanced budgets" are anything
but. So we are no less profligate than Albertans - probably more - and keep
digging ourselves into a deeper financial hole by adding to our accumulated debt
every year. And hiding that fact.

Yvan Guillemette, one of the authors of the study, marvels
at what the spending overruns cost us. "We could get rid of the GST, or at least
cut it by a few points. And $63 billion is bigger than Canada's entire defence
budget in that time."

Even for Albertans, the costs pile up. "That's money that could go toward
cutting income taxes, or plug it into Alberta's Heritage Fund."

And the $20 billion that Ottawa spent over and above what it promised to at
budget time could have gone to pay down some debts - or just under four per cent
of the $481.5 billion Canada owes.

As the authors of the study note, this undisciplined, reflex overspending is
a serious accountability issue.

"At the end of the day, we're paying for this," Guillemette said. "Or our
children will."

His solution is very appealing: That governments can spend only what they say
they will - with exceptions only for emergencies.

Edition: Final
Story Type: Editorial
Length:
502 words