The Yukon needs a legislative budget officer

We need a non-partisan, independent officer to publish factual and independent financial analysis

A lot of barbeque conversation has been sparked by recent reports that the number of Yukon government employees has tripled since the early 1990s.

Meanwhile, the Yukon government is burning through its cash pile at a rapid rate. After this fiscal year’s $83 million cash burn, we’ll be down to our last $10 million by the end of March. Unless something changes, we’ll need to borrow serious money in the coming years.

I’m sure people will be happy to lend us the money. Our credit rating is AA. They know the transfer payment will likely continue and future Yukoners will be able to pay back our debt.

Nothing is easier than kicking the can down the road.

Whether future Yukoners will be pleased to deal with the can later is another question.

Meanwhile, the government has hired some experts to review its financial situation.

One issue that keeps coming up is the believability of Yukon government financial reporting. For example, the capital and operating cost estimates for the new Whistle Bend continuing care facility have been a political football since well before the last election.

According to Yukon News reports, then-minister Mike Nixon told the Legislature in April 2016 that the facility would cost $28 million per year to operate. He said the government included these costs in its long-term fiscal plan. The new government says this is not the case. More recently, current minister Ranj Pillai told the News that “There is not even a proper human resources strategy in place, and I think the cost is about $36 million.”

I looked up the latest business case on the government’s Whistle Bend website. It is from 2014, and the main document is still marked “DRAFT.” The document was written at a time when multiple location and size options were on the table, so it is hard to tell what figures apply to the facility currently being built.

Basically, our legislators have been voting on capital and operating budgets for several years on this major project without all MLAs or the rest of us having a credible, up-to-date business case. We have to rely on whatever data the government of the day, whether blue or red, decides to give us.

Which brings me back to that barbeque conversation: we need one more government job in the Yukon.

We need a legislative budget officer. This is someone who is a non-partisan, independent officer of the legislature, like the ombudsperson, whose job is to publish factual and independent financial analysis of the budget and major bills.

Ottawa has the parliamentary budget officer, who flagged important issues like the true cost of the F-35 fighter jets.

Ontario has the Financial Accountability Office of Ontario, which puts out reports on highly-sensitive, multi-billion-dollar government initiatives such as the “Fair Hydro Plan.”

In Washington, DC, the Congressional Budget Office has recently shown the value of such an institution. It put out credible estimates of costs and how many Americans would lose health care coverage. CBO reports were a rare oasis of sanity in a hyper-partisan legislature that was about to vote on a critically important, but also mind-bogglingly complex, piece of legislation.

Despite the bad press they get, most politicians are not trying to deceive the public. But it is a high-pressure job. The temptation to release only the figures that make you look good is incredibly powerful.

Institutions are important. The institution of a legislative budget officer protects against any tendency to release only favourable data. The LBO is an important supplement to access-to-information laws. While the latter may get a keen citizen reams of spreadsheets and emails, the LBO has the skills and time to wade through the data and publish an assessment. This is critical for things like Whistle Bend where the business case has to include lots of assumptions, such as the number of aging Yukoners, the wage rates of nurses, and a load of other currently unknown cost factors.

The recent budget announced an investment of $1.96 million or about 20 per cent in additional spending in the Yukon department of finance to improve information gathering and analysis, modernize budgeting systems and create a program evaluation unit.

That is probably another 10 or 15 government staff. The activities they are supposed to be doing sound useful. With a reported 5,518 people on the government payroll as of last December, you have to invest in some finance whizzes to keep track of the money they spend.

But these finance whizzes still work for whichever politician is in the corner office.

As a citizen, I would be much more comfortable with the Whistle Bend project if I could download a report from the Yukon LBO with an independent cost assessment rather than relying on the minister of the day’s answer in Question Period.

The LBO is really a litmus test. If you believe a politician who says he or she wants more transparent numbers but won’t hire an LBO, then I have some swamp land in Whistle Bend I’d like to sell you.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist.

Yukon

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