Alberta, B.C. cited for worst expenditure overruns: study:
Think-tank calls for fiscal discipline, accountability
National Post
Tue 27 Feb 2007
Page: A8
Section:
Canada
Byline: Eric Beauchesne
Dateline: OTTAWA
Source: CanWest News
Service

OTTAWA - Federal, provincial and territorial governments
have spent $63.3-billion more over the past decade than they initially said they
would in their budgets, says a study calling for more fiscal discipline and
accountability by Canadian governments.

Alberta has one of the worst records for expenditure overruns, while Quebec
and Ottawa are among the best, the C.D. Howe Institute said in the study released yesterday.

But all governments have tended to spend more than they said they would in
their budgets, the think-tank said.

"A nationwide ranking of how well, and how poorly, Canadian governments have
kept their budget spending promises raises concerns about the accountability of
legislators to their voters," it said.

The study -- Missed Targets: Canada's 2007 Fiscal Accountability
Ranking--concludes that legislators and citizens should insist their governments
exercise better spending discipline.

Practices, such as fiscal yearend spending sprees, when expenditures tend to
get less public and legislative scrutiny than those planned for in budgets, have
lasting negative effects on the taxes Canadians pay and the public debts they
must support, it says.

"It is one thing for high levels of deficits or taxes to exist as a result of
commitments made and debated at budget time," it says. "It is quite another to
get them because of cost overruns during, or worse, right at the end of the
fiscal year.

"And, as recent unplanned federal surpluses at the federal level and spending
overruns in several provinces have highlighted, large recurring differences
between budget and outcomes may induce skepticism among policy-makers and the
public, undermining confidence in the budget process itself."

The report comes as the federal Conservative government has announced extra
year-end expenditures, such as $1.5-billion for the environment, to whittle down
what's on track to be another fatter-than-expected budget surplus.

The Conservative government has promised to use all surpluses to pay down
debt and then use all the interest savings to cut taxes the following year,
which may explain why it doesn't want too large a surplus.

One of the poorest spending records belongs to Alberta, which has on average
spent 7% a year more than planned in its budgets, or $13.9-billion.

Only Yukon, with overruns averaging 8%, and Nunavut at 9%, have done worse.

Alberta, along with British Columbia, are also the only governments whose
overruns have worsened in the past five years, Bill Robson, institute
president and one of the authors of the report noted in an interview.

That Alberta's expenditure overruns are getting worse is not surprising in
light of another finding, "that is, actual spending tends to be higher than
expected at budget time in years when revenue is higher than expected, and vice
versa."

Alberta will reap its second-highest ever surplus this year --$7-billion.

Quebec and New Brunswick, meanwhile, have the best records on this front,
with average overruns of less than 1%, followed closely by the federal
government with overruns averaging less than 2%.

It was surprising to find Ottawa was not one of the worst, Mr. Robson noted.

However, because of the large size of Ottawa's budget, in dollar terms it has
overspent a lot more than any other government --$20.8-billion since 1997, which
is the year it started generating steady surpluses rather than what had been
chronic deficits since the 1970s.

It was also surprising to find that Quebec did the best, Mr. Robson said, but
added that the province's fiscal situation may have forced it to impose more
discipline on itself.

Ontario had the fifth-best performance, with overruns averaging 2.18%, but
whose overspending at $13.4-billion was the third-highest.

Edition: National
Story Type: Business
Length:
592 words