THE BLOG

What Your Provinces Did While You Were Out Partying

07/09/2013 05:29 EDT | Updated 09/08/2013 05:12 EDT
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Parliament Building in Victoria, British Columbia

When one has a chance to talk to politicians without cameras or microphones present, the more candid ones admit they are frustrated by public and press inattention to what the politicians consider important or accurate. It is true in Ottawa, Victoria, Toronto, or Edmonton (where I've heard the same complaint in all those capital cities from all the political parties). Politicians and their staff report frustration about issues they believe critical but are buried by some comparatively minor political event, or scandal, that instead makes the front pages.

I have some sympathy for the irritation. Governments can be roasted over occasionally minor matters that amount to a couple of bucks -- though that's the public's right -- but receive little credit for major reforms that save taxpayers tens of millions of dollars.

That said, politicians are often derided because they treat the public with disdain, such as when governments try to bury bad news by releasing it when they hope no one pays attention -- say, at the end of a day close to the first long weekend of summer.

This happened twice in just the past two weeks. In British Columbia, just before the July long weekend, the provincial government announced it would appeal a recent B.C. Supreme Court decision that criticized the province for billing private property owners for expensive archaeological digs desired by the bureaucrats.

As I've written previously, anyone who owns property in British Columbia should be on notice: if the government decides your property is an official heritage site, you are on the hook for potentially ruinous costs.

At present, the archaeological branch in B.C. catalogues 38,927 property sites in the province as archaeologically significant, with 11,300 new sites added since just 2005. Past hits to private property owners have ranged from $35,000 to $400,000 for government-decreed archaeological work. So the rule now is caveat emptor about buying, owning and redeveloping property in beautiful British Columbia.

A second slide-by-the-voters manoeuvre also took place just before the July long weekend: the Alberta government released its annual report and as per the norm over the past five years, much of it was written in red ink.

The first big number from the last fiscal year (April 1, 2012 to March 31, 2013) is $3.1-billion. That was the provincial deficit last year, according to the consolidated figures. Or "just" $2.8-billion when one looks at how the numbers are prepared for provincial budgets. (There is a difference but the details would test a reader's attention.)

Neither number is calculated in the manner the province once did. As Albertans might recall, back in the February budget, the province decided it would change how it reported surpluses and deficits. The net effect is that henceforth, deficits will look smaller and surpluses bigger.

Except the new way of crunching numbers allows Alberta's provincial debt to increase every year, even when the province claims an operational surplus.

The justification in the new provincial accounting is that it parallels how businesses record their financial state of affairs. Except that little of what governments do, regrettably, mirror privates sector realities. (For example, one core difference: businesses must earn their revenues from consumers voluntarily. They must provide goods and services at a quality that is reflective of their price or go under. Governments have few such incentives in the short-term.)

On borrowing, the significant difference between the private and government sector is the existence of natural restraints on borrowing too much. Companies that look overstretched will quickly find themselves without additional sources of borrowed cash. They must thus economize or risk bankruptcy.

In contrast, governments rarely feel such outside pressure unless they are reckless for decades (i.e., Greece, and perhaps Ontario in the near future). That means government rarely ask themselves if they could deliver some service in a different manner, more effectively, and for a more reasonable price. Instead, they borrow (and tax) more.

Back to the annual report and another big number you might have missed while on vacation: $10.9-billion. That is the unfunded public sector pension liability owed by all Albertans. That is double the $5.4-billion figure the province faced in 2006.

Or put it this way: Alberta has had a significant debt for some time--the unfunded liabilities in public sector pension plans. Perhaps that is another reason why the province released unflattering numbers right about the time many Albertans took off for a holiday weekend.

Hiding things from the public's attention may be "smart" politics, but it does the public a great disservice. Those who engage in such sport should hardly be surprised the public is then wary of giving the political class credit, even whey deserve plaudits for tackling substantive issues.