Tag Archives: Fiscal Transparency and Accountability Act

Accounting for pricey election promises

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How toothless are New Brunswick’s booked rules to force political parties, in campaign mode, to explain exactly how they will make good on their spending promises? Indeed, how opaque is the Conservative machine’s commitment to transparency?

The provincial Liberals want to know and have been demanding answers since late June when the Tory-inspired Fiscal Transparency and Accountability Act came into effect. At that time, the Grits issued a statement, under their leader Brian Gallant’s imprimatur.

“It’s clear that this government is focused solely on spending announcements to help their election campaign, and not on growing our economy or creating jobs,” he said. “It’s ridiculous and unacceptable. This government is burying election promises in government announcements so they can avoid their own transparency legislation that requires all promises to be costed in election platforms,” said Gallant.

Last week, the Liberals were at it again, charging that the Conservatives have made $433 million worth of spending promises without independently costing out those announcements. They even unveiled a spreadsheet that, they say, accurately reflects the dollar value of each Tory vow between June 24 and August 20.

In contrast, insisted Liberal Dieppe candidate Roger Melanson, “We are being transparent and accountable. I think the outgoing premier who set out the rules in this legislation should follow the same rules.”

For their part, the Tories aren’t talking. In June, however, then-Finance Minister Blaine Higgs told the Saint John Telegraph-Journal, “If they (Liberals) know something that has been promised or announced that’s not in their budget, well, then they should tell me because I don’t know about it. . .Anything during the election process will then be identified as either new money or budgeted money. It will have to be costed if it is new money.”

To which Mr. Melanson retorted, “If that’s the case, it means they were using taxpayers’ money. . .to try to buy their votes.”

There is, of course, more than a healthy dose of political posturing on both sides of the issue. But the bottom line is that all of this is largely beside the point.

To begin with, the Fiscal Transparency and Accountability Act is a fundamentally silly piece of legislation. It mandates that political parties assign dollar values to their campaign promises and threatens to strip them of their tax-funded operating allowances if they don’t. But it says nothing about the fact that when the provincial government is flat broke, putting price tags on election promises is utterly meaningless.

The Act also enshrines the following, as yet, unachievable priorities: “Annual balanced budgets on or before the end of the first fiscal period;con or before the end of the first fiscal period, the Province’s net debt for a fiscal year will be less than the net debt for the preceding fiscal year; on or before the end of the first fiscal period, a net debt-to-GDP ratio that is at or below 35 per cent; and after March 31, 2017, quarterly fiscal updates will include a statement of the actual expenses and revenue to the end of the quarter to which the update relates.”

And the penalty for failing to meet these objectives is a walk to the metaphorical woodshed unless, of course, the following contingency applies: “The Minister may recommend to the Lieutenant-Governor in Council that the applicability of sections 6, 9 and 10 be suspended for any fiscal year if the Minister is of the opinion that an economic or financial crisis has occurred that makes it unreasonable for those sections to apply in that fiscal year. . .On the recommendation of the Minister, the Lieutenant-Governor in Council may issue an order that sections 6, 9 and 10 do not apply in the fiscal year set out in the order.”

So, then, do we not now endure an “economic or financial crisis” in this province? Or what would we call a $12-billion debt and $500-million annual deficit?

Transparency and accountability are functions of money management. First comes the money. Then comes the management.

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Setting the fiscal stage for a political melodrama

 

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It is organizationally awkward, bureaucratically regressive and probably unworkable. 

But say this for the drafters of New Brunswick’s newest law designed to reign in public spending: When it comes to crafting high, political theatre, they hold a candle to no one; certainly, no other Canadian legislator of similarly hawkish mien.

With one merry swoop in deference to the provincial election, coming soon to a voting station near you, Finance Minister Blaine Higgs has tabled the Fiscal Transparency and Accountability Act, which he says will render New Brunswick “one of the most accountable provinces in Canada.” 

It will do this, apparently, by requiring government to reduce the deficit by at least $125 million – or, as the case may be, preserve a budgetary surplus – in any given year. The consequences of failure would, for the first time, directly hit each cabinet minister where he or she lives: in the pocketbook, and in the form of a $2,500 penalty.

The Act, its proponents claim, will also restore common sense to the administration of the province’s finances – which currently labour under a $500-million deficit and a long-term debt of almost $12 billion – by compelling political parties to put a dollar figure beside each of their election promises at the risk of losing their annual operating allowances.

In his official statement in the Assembly, Mr. Higgs struck a triumphant tone.  “New Brunswick will be the only province with this level of transparency required for election promises,” he said. “Elected representatives must be accountable for taxpayers’ dollars, not only when making commitments to voters, but also when making decisions at the cabinet table. Just as New Brunswickers must face personal consequences for not keeping up with household bills, Mr. Speaker, so must elected representatives see personal consequences for not keeping up with our province’s bills. That. . .is true accountability.”

Perhaps; still, it’s odd that the only way this government seems able to deliver “true accountability” to taxpayers is by functioning as if it were its own trustee in bankruptcy

In effect, these new schedules of penalties for non-performance and injunctions against empty promises all but concede that government is a wastrel. It’s a deadbeat dad whose awful track record with the family’s nest egg has landed the whole clan in the chicken coop. It can’t be counted upon to do the right thing on its own. 

Clearly, then, the solution should be obvious: The Tory government will regulate itself, just like before; only. . .well, better.

Astonishingly, the province’s other main parties seem all too willing to oblige Mr. Alward and company in legitimizing this fiction.

Liberal finance critic Roger Melanson made a good show of his faux opposition on Wednesday when he intoned, “To have the minister of finance present this piece of legislation and make a statement like this, it’s quite ironic in the fact that if you look at the specific results from this government and this minister of finance for the last three-and-a-half years, he has missed his financial targets over and over and over.”

A New York minute later he had this to say: “It (the Act) makes sense and I think taxpayers, New Brunswickers, are expecting any political party or any government to be accountable, to be transparent and to be financially responsible.”

But how valid is that commitment when it’s delivered under threat of self-imposed reprisals in the event that the government falls off the spending wagon once again?

Moreover, what are the new costs associated with administering a law that must involve third parties to mete out its complex brand of justice? Are there mitigating circumstances that might waive the various fines and levies? If so, when and how do they kick in?

According to the legislation, cabinet ministers are off the hook if certain “extraordinary events” such as recessions, natural calamities and other so-called acts of God cost the budget $20 million or more. Again, though, who decides what fits the definitions, and what are the mechanisms? 

One element does seem clear, much to the expected chagrin of the Canadian Taxpayers Federation. In a nicely sneaky and utilitarian way, the new legislation essentially guts the archly populist (and retrograde) Taxpayer Protection Act. 

Now, a government that faces a $400-million annual deficit in New Brunswick no longer needs to hold a referendum to obtain the public’s expressed permission to raise new taxes or hike the HST.

Here, then, witness one piece of political theatre stooping to conquer another in high style, indeed.

 

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