Brian Lee Crowley, managing director of the Macdonald-Laurier Institute and former Clifford Clark Visiting Economist at the Finance department, said that the budget-making process has become “a peculiar animal” and that governments should go back to basics.
“I think the time is coming pretty soon where we want to revisit the whole budget process and introduce a little more rigour and discipline to it. I don’t think this government’s going to volunteer to do that. That’s not a partisan comment. Governments that have been in office for an extended period of time tend to settle into certain established ways of doing things,” Mr. Crowley told The Hill Times last week.
“There’s quite a widespread sense that the way we do budgets is not as transparent and open and accountable as it might be. I suspect that the next time there’s a change, whenever that is, this will be one of the things that gets a lot of attention and I think rightly so,” said Mr. Crowley.
Mr. Crowley said that while there are “details” in the 442-page budget, they are not the right details.
“Ironically, it’s about more detail and less detail. You need to focus more on the taxing and spending priorities of the government, which I think is traditionally what budgets are about, and clear out a lot of the other stuff, which traditionally we’ve handled separately for pretty good reasons. And once you’ve got a focus on what the budget is for and what it’s about, then more detail about that,” he said. “I think those would be two welcome changes I think.”
Elly Alboim, a principal at the Earnscliffe Strategy Group, who worked on federal budgets as a strategic communications adviser for the federal Liberals from 1994 to 2006, said the Department of Finance used to be referred to as the “priesthood of the government,” but that it is quickly losing its credibility among economists and the Canadian public because of the “manipulative” budgets being produced under the current Conservative government.
“A budget is supposed to be a full disclosure of both sides of the ledger; revenue, and expenditure, and detailed analysis of all of them. This does not conform really to what a budget should be by most accounts,” said Mr. Alboim. “In what should be a full and frank disclosure of the nation’s finances and the government’s intention we now have a much more political document with much less economic and fiscal substance.”
Mr. Alboim noted that in the late 1980s and early ’90s, the former Progressive Conservative government under Brian Mulroney started creating deficits and missing financial targets while the Finance minister kept reporting optimistic fiscal projections.
As a result, the Finance Department “developed a significant credibility problem that the financial markets and economists in the country reached a point where they didn’t trust the Department of Finance’s numbers and they didn’t trust the way they were reporting out,” Mr. Alboim told The Hill Times, noting that when the federal Liberals took over in 1993, the department began to work “very hard” to restore that credibility.
“They said, and I think they were right, that if the Department of Finance doesn’t have credibility, it creates uncertainty for investment and uncertainty in the marketplace. I think it’s fair to say that in the last three or four years, maybe five, the Department of Finance’s credibility has been substantially weakened and has taken us back to the bad days of the early ’90s,” he said. “I think it’s very unhappy circumstance. Governments can do a lot of political things, but management of the economy is a kind of sacred trust, and the Department of Finance has a special responsibility to deliver honestly and without camouflage, a fair statement of the economic and fiscal reality of the country and a fair statement of the budget process of the government of Canada. I think the standard has lowered under this government and I think that’s very unfortunate.”
Mr. Alboim described this year’s budget’s “opaqueness,” or lack of details on the government’s fiscal plan.
In 1995, the budget consisted of 197 pages, including 30 pages of department-by-department spending analyses and a detailed overview of cuts to the public service in the government’s attempt to balance the budget by downsizing. On average, the Liberals’ budgets from 1995 to 2005 were about 292 pages long (the 2002 budget was not available online).
The Conservatives’ first budget in 2006 was 302 pages and grew to 442 in 2013, for an average of 406 pages, but the Conservatives’ budgets have less details on how the government plans to spend.
In a column after the 2013 budget was released, Maclean’s magazine columnist Paul Wells wrote that the Canadian government “no longer publishes an annual budget. In fact, it seems to have stopped two years ago.”
Most of the budget is a recounting of what the government has already spent or announced in previous budgets, going back to 2006, or explaining in long preambles why the budget items are necessary.
In many instances, however, there are mentions of policy proposals with no “budgetary” line to go along with it.
For example, the government says it will “renew its support for Pathways to Education Canada” but “details will be announced in the coming months.”
There is no indication whether there is a dollar amount that goes with that renewed support and no time-frame for how many months it will take to announce the plan.
Additionally, according to the budget, the government will support Yukon College’s Centre for Northern Innovation in Mining and “details will be announced in the coming months.”
Other examples of the lack of details or fiscal plan include the government’s commitment to consult with First Nations on a First Nation Education Act with no explanation on whether it will invest funds to implement this new act, or when it will be introduced.
Similarly, there is a broad statement that “Economic Action Plan 2013 announces the government’s intention to test new approaches to attracting immigrant investors to Canada” with no details about how much money will be invested to test these new approaches.
Under a heading “Supporting a Vibrant Shipbuilding Industry & Helping Canadian Businesses Test Their Innovations” the government does not announce any new funding, but rather explains what it has already done on the shipbuilding procurement front and hails it as a success.
Similarly, the 2013 budget “announces investments in economic and security initiatives to implement Canada’s commitments under the Canada-United States Beyond the Border Action Plan” but only lists upgrading border infrastructure in certain places, and no funding announcement, or details about how much was spent to upgrade what was mentioned.
“They [Conservative budgets] disclose less than budgets have before them. It’s a strange thing when you have to read a budget like the Chinese used to read wall posters where obscure lines in a budget indicate legislation or initiatives to come without detail,” Mr. Alboim said. “Last year, the environmental measures that were only hinted at obscurely and then formed a major part of the omnibus bill, there’s a manipulative approach to budget disclosure. That’s a little disturbing.”
Liberal MP Ralph Goodale (Wascana, Sask.), a former Finance minister under former prime minister Paul Martin, said that he hopes a new government will take the budget-making process seriously because Canadians aren’t able to get the “big picture” of the nation’s finances under the current system where only unconnected programs, grants, or infrastructure funding are announced.
Mr. Goodale said because there is no longer an overview of whole of government spending other than the few lines that shows the overall revenues and expenses, the fiscal plan is “convoluted and impenetrable,” leaving Canadians severely uninformed.
“A healthy democracy depends on being informed, and Mr. Harper’s policy is exactly the opposite, to keep the electorate as uninformed as possible simply feeding the spin lines and the Pablum that comes out of his communication shop which is deliberately and maliciously misleading,” he said, noting that the government’s projections for a balanced budget by 2015 are all aimed to garner support during an election year, but that Canadians won’t know if it’s the truth until 18 months later when the public accounts are released.
The government’s budget document estimates it will bring in that much revenue over five years by ending an agreement which gave preferential treatment to Chinese imports, along with 71 other countries starting in 2015.
“They needed a little pot of revenue to include in the budget to make sure that they could claim that they would be balanced by 2015,” Mr. Goodale said.
Summa Strategies vice-president Tim Powers, a former Conservative staffer, said that while the budget has indeed become “more of a political communications tool,” which he said started with the Liberals, it’s not necessarily problematic if the information can be found elsewhere for example in the main estimates or plans and priorities documents.
“The public has the ability, I think, to get most of the information that it wants by using or accessing many of the online and other public tools that are there to find information. I think it gets down to presentation rather than availability of information. I stand to be corrected there, but if the information is available, I can live with that,” he told The Hill Times.
Mr. Crowley said, however, that the Conservatives lost an opportunity to clearly focus the public’s attention on the government’s program by not releasing a transparent budget.
“For a government that’s so compulsive about communicating and wanting to control message, and so on, I have to say that it’s surprising that they’ve allowed budgets to become such massive unfocused things,” he said. “It’s not only mixing together all kinds of things, but it’s also giving us a little less detail and guidance about the government’s spending plans and priorities. I think we’ve lost some clarity and definition. I don’t think it’s disastrous, but on the other hand, clarity, transparency, are both essential for accountability.”
Mr. Alboim said when he was helping to prepare budgets for 11 years, senior Finance officials demanded transparency and disclosure. “I know that in the culture that used to be at Finance this kind of stuff would’ve been severely frowned upon. I don’t know what’s changed since and I don’t know what happens around the table,” he said. “They used to call Finance the priesthood of the government. They had a set of principles on disclosure that they really couldn’t be moved from.”
Original Article
Source: hilltimes.com
Author: BEA VONGDOUANGCHANH
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