Transparency—it’s a wonderful concept. But in order to be meaningful it must be applied across the board.
Sorry, I got ahead of myself. I’m talking about Premier Redford’s decision to implement the “toughest and most transparent”* expenditure rules in all of Canada. Her new policy will require politicians, their staff, and about 400 senior civil servants to post their travel and meal expenses on line. In addition, the new policy will disallow any claims for booze or business class/first class airfares for domestic travel.
This is an excellent start that brings the government into alignment with expenditure policies that have existed in the private sector for at least a decade. But has Ms Redford gone far enough? (This is where you can lay bets that I’ll say no…and you’d be right.)
Here’s my first concern. The transparency of this policy is undermined by the fact that the policy can be waived by the Treasury Board.
Now the waiver of policies is not a new concept. In the corporate world the board of directors can waive the application of a policy to its senior executives, however if it does so the company must disclose the waiver—its purpose and for whom—to the public in its annual documents.
As Brian Mason so eloquently puts it “You can go to a cabinet committee behind closed doors and cancel all or a part of this entire policy. So they’ve left themselves a backdoor that’s huge and any expenditure problem that creates a problem politically…can simply be covered up”**And guess what, cabinet deliberations are shielded from FOIP requests…how convenient.
Here’s my primary concern: all this talk about the expenditure policy is a drop in the transparency bucket. Sure we’ll see a reduction in the misuse of public money—something I’d guess would be in the $10 million range***but what about transparency with respect to the looming $3 billion deficit?
Mr Horner recently presented the 2012 Q1 budget results. His presentation was pitifully bereft of details. In essence the 9 page report says Alberta’s economy is strong notwithstanding global uncertainty, but since 30% of Alberta’s revenue comes from non-renewable resources, primarily oil and gas revenues which are highly volatile, it’s difficult to predict revenues. The rest of the document is larded with high level charts and graphs culled from Stats Canada, Treasury and industry.
Compare this to last year’s Q1 update. It provided a line-by-line detailed analysis of what was budgeted, what the actual amounts were and, most importantly, the reasons for the change (up or down) from the budgeted number.
Here are some examples. In Q1 2011, bitumen royalty revenues were $773 million higher than expected in the first quarter because of higher oil price revenues and lower operator costs, but investment income from the Heritage Fund was $51 million lower than expected due to higher exchange rates.
The same level of detail is provided on the expense side of the ledger. For example, the department of Health spent $16 million less because the costs of its vaccination program and IT improvements were lower than projected. However Sustainable Development spent $230 million more (fighting forest fires and the pine beetle infestation) and Municipal Affairs spent an extra $234 million assisting Slave Lake. This is valuable information that helps us understand where our tax dollars are going.
This year’s Q1 report reads like a PR puff piece complete with a blandly reassuring statement about the ongoing health of Alberta’s economy. The only explanation for the failure to meet budgeted targets is the volatility of oil and gas revenues. Yes, we get that—a budget that is 30% based on volatile oil and gas revenues will be volatile, but that’s not all that drives the government off its budget numbers, remember last year’s experience with the $230 million extra required to fight forest fires and pine beetles and the $234 million for Slave Lake?
When Scott Hennig, head of the Canadian Taxpayers Federation (and a true champion for transparency) asked Mr Horner why the 2012 Q1 report was so skimpy, Mr Horner responded that he wanted to give reporters a more meaningful and understandable report. What? If the quarterly budget update has degenerated into a feel good brochure when can we expect the real thing?
Mr Hennig’s response was simple: “I wouldn’t trust anyone who wouldn’t show me any numbers.”****
And that is the nub of the issue–transparency engenders trust. It’s admirable that Ms Redford worked so hard to bring transparency to the government’s expense account policy. But I wish she’d devote as much attention to her colleague Mr Horner to ensure that Albertans have as much visibility into the projected $3 billion deficit as they have into an MLA’s attempt to claim a $4 mini bar item on the public tab.
*Calgary Herald, Sept 6, 2012, p A1
**Calgary Herald, Sept 6, 2012, p A4
***This is a guess based on 26 ministry offices X $40,000/year, plus 400 civil servants X $12,000/year, plus boards and committees at $2million
****Calgary Herald Online, Aug 31, 2012.