Well, it’s official — the Yukon is in the red.
According to Statistics Canada, the Fentie government has put the Yukon in a deficit position.
This year, according to federal number crunchers, the territory is running a $13 million debt.
But the territory has announced a $38 million surplus as of March 31.
And it predicts that, next year, there will still be $9 million, or so, in the bank.
So what’s going on?
Well, something’s amiss.
Government accounting is alchemy, a confusing and oft-illusory world.
Ottawa accounts for spending one way. The territory another. Statistics Canada probably another.
Sometimes, governments account for spending using full accrual — logging the full cost of stuff at the time it is purchased, even if it hasn’t been paid for yet.
Others use cash accounting, counting every dollar spent as an expenditure, but only when the cheque is cut.
So there are various accounting processes in place.
It’s confusing.
But Yukon citizens have only to consider two things.
First, that Ottawa currently pegs the territory in a deficit position.
And, second, that the Fentie government, by its own accounting, has logged one of the smallest surpluses in recent memory.
So, no matter how you cut it, the territory is, financially, pretty weak.
This before you toss in all the other millions Fentie has announced this year, but not budgeted for, like the $4.43 million Dawson City bailout, the $9 million extra needed for the Hamilton Blvd. extension, the increase in teacher wages (and it will soon negotiate with the larger Yukon Employees Union), the $6.25 million college pension topup, the $1 million hospital pension topup … and the list goes on.
Fentie said he’ll account for the extra spending through a supplementary budget later this year.
Alright, but where is he cutting? Or where is the extra money coming from?
Ottawa is now spending billions on Canada’s military, and has grown noticeably cool to increasing provincial and territorial transfers, and may, in fact, even cut them.
If provinces want more money they can increase taxes, is the Harper government’s newest riff on the fiscal imbalance.
This doesn’t bode well for the Yukon, which has benefited from a disproportional transfer of federal cash.
So things are looking grim for whatever government wins the next territorial election, which must be called before November.
Rest assured, if Fentie wins then long-promised projects will be cut.
If another government wins, it, too, will be hobbled by a lack of cash.
Fentie has pooh-poohed Statistics Canada assertions the territory has a $13 million deficit.
But, with this being an election year, whom are you going to believe?
Fentie, the incumbent Finance minister fighting for re-election? Or federal civil servants working for Statistics Canada in Ottawa with nothing to prove through its financial analysis?
The smart money is on Ottawa.
Unfortunately, in the territory, there’s nothing left to wager. (RM)