The Back Page

LEADERS WHO CAN’T COUNT

The problem with our premiers is they’re unable to read a balance sheet

PAUL WELLS January 12 2004
The Back Page

LEADERS WHO CAN’T COUNT

The problem with our premiers is they’re unable to read a balance sheet

PAUL WELLS January 12 2004

LEADERS WHO CAN’T COUNT

The Back Page

The problem with our premiers is they’re unable to read a balance sheet

PAUL WELLS

FOOL ME ONCE, the saying goes, shame on you. Fool me twice, shame on me.

But fool me constantly, with a big smirk on your face the whole time, like Lucy pulling the ball away when Charlie Brown tries to kick it? Well, then we have a problem that needs fixing.

Here’s the problem: Our leaders can’t stop lying to us about our own money.

Perhaps 2003 was the year the shell game finally became too obvious to ignore any longer. Eight provinces held elections. Three elected new governments. In each of them the story was the same.

In Quebec, Jean Charest hired a former auditor general to check the province’s books. He discovered a $4.4-billion deficit where the Parti Québécois had claimed there wasn’t one.

In Ontario, Dalton McGuinty hired a former provincial auditor to check the province’s books. He discovered a $5.6billion deficit where the Ontario Tories had claimed there was none.

In Newfoundland, Danny Williams hired PricewaterhouseCoopers to check the province’s books. As I write, the results haven’t been made public. $o this is just a nutty guess here, but I’m thinking it’ll be bad news.

It happens all the time. In Manitoba a few years ago, Gary Doer hired Deloitte & Touche to discover a deficit of up to $417 million where the Manitoba Tories had claimed there was none. In British Columbia, a guy went to court to try to overturn the 1996 election result after the “balanced” budget of Glen Clark’s NDP government magically turned into a $369-million deficit after the voting was done.

It’s going to keep happening, too, if we keep letting our leaders get away with it.

One thing that’s striking about these audits is that they take so little time to carry out. Within a few weeks after the arrival of a new government, some retired auditor or accounting firm has a report ready that explains how the old government was hiding its fiscal mess.

The other constant is that the bad news is so rarely a surprise. Not only didn’t you have to be a rocket scientist to suspect Ernie Eves’s Ontario Tories were so staggeringly poll-driven they would spend the province into a hole, all sorts of independent observers said they were doing it. The Fraser Institute put the deficit at $4.5 billion at mid-campaign. But Eves was able to shrug it off.

Nor was he the only Ontario party leader playing silly bugger with the numbers. McGuinty spent the campaign accusing Eves of hiding the deficit—but he based his own projections largely on an assumption the budget would be balanced. The inevitable result of McGuinty’s double-talk is the litany of broken promises and delayed action that has marked McGuinty’s early months in office. He must have known better. But he put winning the election ahead of responsible planning. Now everyone in Ontario is paying for it.

Well, enough is enough. If we can’t trust our politicians to do something as simple as tell us how much of our money they have, it’s time to shame them into giving that responsibility to grown-ups instead.

Fortunately, and not for the first time, we have an interesting idea from Quebec. In a piece in Le Devoir just before Christmas, a federal government economist named Sébastien Labonne described the PQ government’s fiscal shell games in depressing detail before concluding: “It may be time to contemplate the establishment of an independent organization to evaluate the budget and the economy, such as the Congressional Budget Office in the United States.”

Precisely so. The CBO does a lot of what our federal and provincial auditors do, but it has a valuable additional role. It offers periodic statements on the size of the federal surplus or deficit, along with projections on how the deficit (these days it’s a great big deficit) will grow over time.

That’s not enough to keep politicians from trying to distort the fiscal picture. But it provides an independent, authoritative touchstone to make it obvious when they are.

We need the same in Canada. And not just for Quebec, but for every government: a permanent, small office of auditors with statutory authority to report on the state of each province’s books, and on the federal government’s. At regular intervals, say twice a year, not just after a leader fails at his latest attempt to fast-talk the electorate.

Every government could add this responsibility to its auditor general’s list of tasks. But it would be even more useful to have one Canada Truth-in-Budgeting Office to fact-check every government.

The premiers are meeting in February in British Columbia. Which of them will bring this idea to the table? Or will Paul Martin shame them all by moving first? d

To comment: backpage@macleans.ca Read Paul Wells’s Weblog, “Inkless Wells,” at www.macleans.ca/paulwells