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Releasing the First Quarter Update is an Easy Fix for a Silly Mistake

Author: Todd MacKay 2016/10/11

When a car spins out of control the driver never thinks about the times a seatbelt wasn’t really necessary.

The vast majority of government transparency is routine, but, on the odd occasion, it’s critically important.

The Saskatchewan government says it’s withholding its first quarter budget update this year. That’s a mistake. The government has a responsibility to provide transparency.

For more than a decade, the provincial government has let taxpayers know what’s happening with their money every three months. It’s the same routine reporting publicly traded companies and Crown corporations provide. Most of the time the quarterly updates are little more than insomnia cures.

But sometimes the first quarter update is jarring.

Saskatchewan was cruising to an operational surplus (although it planned to borrow $700 million for infrastructure) when the province released its 2015-16 budget. Then the first quarter update landed with a thud on Aug. 31, 2016.

“Without any action, a $292-million deficit is projected for 2015-16,” stated the first quarter update.

The Saskatchewan government was acknowledging an operational deficit for the first time in years. Sadly, despite this early warning, the first quarter forecast became much worse in reality.

“Saskatchewan finished 2015-16 with a $675-million deficit,” stated the province when it released the final numbers.

The province says its cancelling the first quarter update this year because the budget was late and the numbers haven’t changed much. That’s nonsense. The newly elected Manitoba government released its budget 24 hours prior to Saskatchewan and still managed to produce a first quarter update. Even if there’s nothing exciting to report, the government still has the responsibility to provide transparency.

The first quarter update is more important than usual this year.

“We are commencing a government-wide process of transformational change,” said Finance Minister Kevin Doherty in his budget address. “Our goal is to ensure the sustainability of high quality public services delivered in the most efficient, cost effective way possible.”

The government promised this “transformational change” will deliver a balanced operational budget next year.

It may well be true the first quarter budget update wouldn’t show much change in the actual numbers for the first three months, but surely the projections would show some evidence of progress toward this promised transformational change. If so, the government should take credit for the hard work. If the province’s spending is on a deficit trajectory, taxpayers have the right to hold their elected officials accountable.

There’s also a principle that extends beyond this year. The early warning sounded by one problematic first quarter, such as last year’s report, makes it worth the effort to produce dozens of routine updates. A quick look at our Western neighbours shows that setting the precedence that its acceptable to neglect this basic transparency would be dangerous.

Alberta has legislation requiring the finance minister to provide financial updates every quarter – complete with hard deadlines. The Alberta budget projected an operational deficit of $10.4 billion and the first quarter update shows that projection rising to $10.9 billion. No doubt Alberta Premier Rachel Notley could avoid some criticism if her predecessors had gotten rid of that legislation and started skipping first quarter updates.

Premier Brad Wall has acknowledged mistakes in the past. He’s made a virtue out of fixing them. This mistake is easy to fix. Ministry of Finance officials are routinely tracking and updating these numbers internally. Just release the first quarter update.


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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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