Interim statement renews surplus deficit debate

Statistics Canada is wrong, says Premier Dennis Fentie. Contrary to recent Stats Canada data, Yukon finances are not in a deficit position, he said.

Statistics Canada is wrong, says Premier Dennis Fentie.

Contrary to recent Stats Canada data, Yukon finances are not in a deficit position, he said.

And Thursday, Fentie took the unprecedented step of releasing an interim financial statement for publication.

The document, offered three-and-a-half months before a territorial election must be called, shows the Yukon with a $44.8 million surplus.

“The financial statement you have before you shows that our projections and estimates have somewhat improved over the tabling of the main budget this spring,” said Fentie, who was flanked by Finance officials and other Yukon Party MLAs.

“It includes all obligations that are related to management board decisions to date.”

Which means all money promises made by the government since the 2006-2007 budget was released in March, including Dawson City’s $3.43 million bailout package and a $50,000 purse increase for the Yukon Quest, were calculated in the statement.

The territory’s surplus has even grown slightly from the $38 million noted in a supplementary budget released March 31, at the end of the fiscal year.

“When we came to office in 2002, there was no cash, and today we have millions of dollars in the bank, because we applied cash-management principles to the financial management of the territory, so instead of being cash poor we actually have cash available,” said Fentie.

“It’s been evident in the past that Statistics Canada has been wrong in counting heads here in the Yukon, so obviously in this situation they are wrong in counting dollars.”

In June, Statistics Canada released a cross-country review of provincial and territorial government finance across the country, and pegged the Yukon as one of the jurisdictions running “small deficits.”

The Yukon has a $13 million deficit, according to the June 15 edition of The Daily, Statistics Canada’s periodical publication that is available online.

The national number-crunching agency got its raw data from the Yukon.

“We use the Yukon government’s budget report as the starting point for our numbers,” said Bruce Orok, one of the authors of the June report.

“With that, we adjust, according to the concepts within our classification framework, to the extent that we have to, to put the bottom line on a comparable basis not only with other provinces and territories, but also comparisons through time,” Orok said Friday.

“It’s just a way for us to make sure that the comparisons are accurate across the country.”

Statistics Canada used a modified cash accounting system to crunch its data.

Statistics Canada also included arm’s length government agencies, such as the Yukon Worker’s Compensation Health and Safety Board and the Whitehorse Hospital Corporation, in its calculation of the Yukon’s financial health.

The Finance department does not.

Statistics Canada is entitled to use any methodology it chooses, said deputy Finance minister Bruce McLennan.

“They’ve used a methodology that doesn’t capture all the elements of the financial statements,” said McLennan.

“They estimate what our lapses are going to be at the year end, and they use other estimates which, frankly, I don’t even understand exactly how they arrive at those numbers.

“But they have their reasons for using those, whereas we have more current information.”

The Yukon uses a “full-accrual” style of accounting endorsed by the Canadian Institute of Chartered Accountants that most other jurisdictions in Canada have adopted, he added.

Statistics Canada gets its information from the Yukon government statistics bureau and from budget documents and public accounts.

Financial statements prepared for public accounts, which detail the actual expenditure of budget projections, are used to determine “the financial resources realistically available to the government to meet its program responsibilities.”

At the end of fiscal 2005, the government reported a $1.4 million surplus and $52.1 million “cash and cash equivalents,” according to the Yukon’s 2004-2005 public accounts.

However, in an interview, McLennan said the territory had $86 million in cash at the end of the year.

“At the end of the year, we were at $86 million (cash in the bank) and as of today … $130 million.”

McLennan was unavailable to explain the discrepancy between his figures and those published in public accounts.

The Finance department has been in touch with the territorial statistics bureau, and will now vet financial statements before they are submitted to Statistics Canada in the future, “so we can understand where they are getting their numbers from and make sure there are no shortfalls in the information they are using,” he said.