U of C report explores changes in Alberta budget accounting

Alberta’s budgets may appear bigger nowadays than in years past, but that’s not necessarily a sign that more of your tax dollars are being spent.

That’s according to a new report, co-authored by Ron Kneebone and Margarita Wilkins of the University of Calgary’s School of Public Policy, which examines changes to the province’s accounting conventions that began under the last Progressive Conservative government.

Up until former premier Jim Prentice’s final budget, government expenditures and revenues related only to matters associated with the policies and decisions of elected officials were included, which is known as fiscal plan basis. But starting in 2015, the government started using a consolidated financial basis for its budgets — a method maintained by Premier Rachel Notley and her government — which includes revenues and expenditures for Crown-controlled school boards, universities and colleges, and health entities.

“It makes it difficult to compare apples to apples,” said Kneebone, since comparisons to past budgets in Alberta’s history, in addition to deficits or surpluses, can’t properly be calculated without acknowledging the changes in accounting.

“By doing this, what they did is they increased the size of the government, whereas if you were a PC government you probably didn’t want to do that,” he said. “It made the government seem bigger than it was otherwise and it made the deficit different. It made the debt larger.”

The U of C study helps clean up the data, making necessary mathematical adjustments to enable people to compare.

“If we’re, as taxpayers and voters, going to hold government accountable, we have to have a proper measure of their performance,” Kneebone said.

Under the old accounting method, Alberta’s deficit in the 2016-17 NDP budget, which came out to $10.8 billion under the new approach, would have been $11.8 billion. The last PC budget would have been about $400 million higher had the traditional approach been used.

But Kneebone said neither party was trying to play politics by opting for the consolidated calculation.

“There’s no guarantee moving forward that the deficit will always appear to be smaller,” he said. “There’s nothing nefarious going on here, it’s just that they changed the way that they did their accounting, but it does matter . . . This is how governments talk to citizens. They put out a budget and annual reports indicating that these are our plans for the future and this is how it compares to what we’ve done in the past.”

Source: Calgary Herald