Sunday, December 16, 2007

Sask. Party: Growth and Financial Security Act breaks election promise; Treasury Board to have power to pursue any initiative it considers appropriate


With the introduction of Bill No. 1 – An Act respecting Saskatchewan.s Growth and Financial Security and repealing certain Acts on Dec. 13, 2007, the Saskatchewan Party is on the verge of breaking one of its main election promises.

“We are committed to balanced budgets and economic growth, and The Saskatchewan Growth and Financial Security Act takes a number of steps to ensure this happens,” Finance Minister Rod Gantefoer said in a government news release.

However, the Bill that Gantefoer introduced in the legislature does not appear to deliver what his party promised during the 2007 provincial election.

Rather than tough legislation requiring balanced budgets every year the proposed Act will still allow for deficit budgets. The Act also reneges on Premier Brad Wall’s promise that the Growth and Financial Security Fund will be wound down. Furthermore, the Act appears to provide the Treasury Board with the ability to undertake any initiative it considers appropriate.

The Act also seems to fall short for the time being on the party’s promise to limit increases in the size of Saskatchewan’s civil service to the rate of population growth. The details of this particular promise won’t be known until the regulations are released.

By all accounts the Saskatchewan Party has broken its first major election promise.

In Sask. Party government creating own rainy-day fund (CBC News, Dec. 14, 2007) the CBC said the Saskatchewan Party “has flip-flopped on the need for a “rainy day” fund to avoid falling into deficit.”

Prior to the Nov. 7 election “the party criticized the former government for dipping into its Fiscal Stabilization Fund to balance its books.” Now it intends to do the very same thing and “set up a new contingency fund, called the Growth and Financial Security Fund, that will be used to balance the budget.”

In Balanced budgets could come with deficits: minister (StarPhoenix, Dec. 14, 2007) SP reporter James Woods noted “the government could still spend more than it takes in during a year and use money from the new fund to balance the budget, Finance Minister Rod Gantefoer said.”

Woods said “Gantefoer initially told reporters at the legislature he would call such a document a “balanced budget,” but then said the government would acknowledge it as a deficit.”

“I would think we would point clearly to the fact that it’s a deficit budget and the shortfall is made up from the Growth (and Financial Security) Fund,” he said.

Gantefoer admitted that “fundamentally, there is very little difference” in what the new government is now doing with the Growth and Financial Security Fund, which is also to be used for “economic growth initiatives.”

In Campaign platform released (Leader-Post, Oct. 20, 2007) Saskatchewan Party Leader Brad Wall promised the “fund will be drawn down and we’ll be back to transparency.”

Gantefoer now calls it a “goal.”

According to the CBC “the new legislation will make this fund a permanent fixture in the new government.”

In Sask. Party budget bill doesn't add up (Leader-Post, Dec. 14, 2007) political columnist Murray Mandryk wondered does the new legislation “really require balanced budgets every year” and “honestly reflect the spirit of the Saskatchewan Party's election promise?”

“Simply put; No, it doesn’t,” Mandryk said.

“[T]his first Saskatchewan Party government bill not only belies what the party promised in the election campaign, but isn’t even all that much different from what the former NDP government was doing.”

Mandryk states that “Wall told reporters last October during his platform launch that yearly deficits “would be impossible” under his government’s legislation and that it wasn’t good enough to balance the budget every four years because “municipalities are expected to balance it every year -- certainly, that’s the case in your home.””

“The Saskatchewan Party clearly implied it would introduce tough legislation requiring balanced budgets every year. Its first bill is anything but tough balanced budget legislation. It isn’t even what the Saskatchewan Party said it would do,” Mandryk said.

The StarPhoenix editorial board called the Saskatchewan Party’s first piece of legislation “discouraging for those who cast a ballot for Wall’s party expecting substantive changes to provincial governing policy after 16 years of NDP rule.”

In Rainy day fund another blast from the past (StarPhoenix, Dec. 15, 2007) the board also said the Act presented by Gantefoer “not only falls far short of his party’s (decidedly ill-advised) commitment to adopt a tough new law to require a balanced budget each year, but it’s substantively no different from what the New Democrats had done in government during recent years.”

“It’s certainly not enacting “stronger guiding financial principles to increase accountability and better secure the financial future for Saskatchewan people,” as he insists,” said the board.

Gantefoer’s mandate letter signed by Premier Brad Wall merely directs the finance minister to “Ensure the budget is balanced every year.” Unfortunately, it doesn’t say how.

The new legislation also appears to differ from what is recorded in the Saskatchewan Party Policy Book. Resolution DM05-3 Balancing the Budget states: “Be it resolved that a Saskatchewan Party government will pass strong Balanced Budget legislation that requires a balanced budget over each four year election cycle.”

The policy book also states that among the party’s guiding principles is “a firm commitment to balanced budgets.”

Sections 8 & 12 of the Constitution of the Saskatchewan Party (Feb. 2006) make it clear that “resolutions and motions passed by the Convention of the Party shall be binding on the Leader and members of the caucus of The Saskatchewan Party” and that it “shall be the duty of the Leader and the Party President to uphold and enforce the provisions of this Constitution.” It would seem that this is not happening.

TREASURY BOARD

Page 41 of the Saskatchewan Party 2007 election platform Securing the Future promises that under the new Act “government departments and agencies will be required to review all programs and services as part of the annual reporting process, to determine and document whether they are: Serving the public interest; Being provided efficiently and effectively; Accountable to the taxpayer; and Achieving the goals of a healthy, safe, innovative and prosperous province.”

Gantefoer’s mandate letter simply requires his Ministry to: “Ensure government departments and agencies review all programs and services as part of the annual reporting process.”

Part VI of the new legislation omits without explanation the reference to “serving the public interest” and does not specifically instruct government departments and agencies to undertake a review of all programs and services. The task instead appears to have been left solely up to the powerful Treasury Board.

Section 32(1) of the new Act reads: “In preparing the estimates for a fiscal year, Treasury Board shall review the existing and proposed programs and expenditures of ministries for the following purposes:

(a) to determine the adequacy of those programs and expenditures;

(b) to evaluate those programs and expenditures as to economy, efficiency and effectiveness and to determine the priorities amongst them;

(c) to ensure that there is accountability by the ministries to the Legislative Assembly respecting those expenditures and programs;

(d) to achieve any other purposes that Treasury Board considers appropriate.”

According to the Cabinet Secretariat the following persons constitute the current membership of Treasury Board as per Order in Council #974/2007:

Honourable Rod Gantefoer (Chairperson)
Honourable Lyle Stewart (Vice-Chairperson)
Honourable Wayne Elhard
Honourable Donna Harpauer
Honourable Darryl Hickie

Doug Matthies, Deputy Minister of Finance, is the committee Secretary.

In its election platform the Saskatchewan Party promised to place “all orders-in-council on-line, so the public can easily review government appointments.” However, the above information is not available on-line.

The Executive Government Processes and Procedures in Saskatchewan: A Procedures Manual (April 2004, Rev. March 2007), indicates that the Premier is responsible for deciding what committees are needed, what functions they will perform, and who their members will be. The Treasury Board is a statutory Cabinet committee.

The Saskatchewan Finance 2006-2007 Annual Report notes the powers and duties of Treasury Board are contained in sections 4 and 5 of The Financial Administration Act, 1993 which state:
Duties of Treasury Board
4 The board is responsible to the Lieutenant Governor in Council for all matters relating to:

(a) the finances, including revenues, expenses, assets and liabilities of the Government of Saskatchewan;

(b) the evaluation of programs of the Government of Saskatchewan;

(c) administrative policy and management practices and systems in the Government of Saskatchewan;

(d) the accounting policies and practices of the Government of Saskatchewan;

(e) the organization of all or any part of the Government of Saskatchewan; and

(f) any matters, in addition to those described in clauses (a) to (e), that the Lieutenant Governor in Council may assign to it.

Powers of Treasury Board
5 The board may:

(a) make orders and issue directives with respect to any matter set out in section 4;

(b) prescribe the form and content of the public accounts and the estimates that are presented to the Legislative Assembly;

(c) prescribe the form and manner of financial records and accounting systems of the Government of Saskatchewan;

(d) notwithstanding any other Act, designate a public agency that is to be subject to its orders and directives;

(e) direct any person receiving, managing or disbursing public money to keep any books, records or accounts that it considers necessary; and

(f) determine its rules and methods of procedure.
Comparing the duties of the Treasury Board as outlined in the proposed Saskatchewan Growth and Financial Security Act with those in The Financial Administration Act seems to reveal at least one interesting difference. Whereas in the latter the Lieutenant Governor in Council is responsible for assigning other duties to the board the new legislation leaves it up to the committee to decide on its own whether to add “any other purposes” it “considers appropriate.”

This could come in handy for a committee member like Lyle Stewart, the Minister of Enterprise and Innovation, who is mandated to create the controversial Enterprise Saskatchewan as the central economic development agency which will be governed by an unelected board dominated by business interests. Dale Botting, the former Saskatchewan director of the Canadian Federation of Independent Business (CFIB), is the deputy minister in charge of developing and implementing the plan which, according to Stewart’s mandate letter, includes “Reviewing key sector’s of Saskatchewan’s economy, to identify barriers to growth and make recommendations to government for their removal” and “Measuring and reporting on Saskatchewan’s tax and regulatory environment to ensure that Saskatchewan’s economy remains competitive within the New West.” Groups like the CFIB have over the years conveniently compiled a laundry list of demands in these areas it would like to see implemented.

Furthermore, the Act is not clear as to the criteria and process the government intends to use to “evaluate” the “economy, efficiency and effectiveness” and “determine the adequacy” of programs and expenditures and to “determine the priorities amongst them.”

It is likely to be at Treasury Board where any cuts to programs and services or changes in tax and regulatory environment will be determined.

It is interesting to also note that resolution EC05-8 Performing a Service-Based Review of Government Operations in the Saskatchewan Party Policy Book references the removal of barriers which is something the new Act does not. The resolution states: “Be it resolved that a Saskatchewan Party government will perform a service-based review of government operations to ensure all parts of government are:

a) Serving a compelling public interest;

b) Affordable within the fiscal environment of the province;

c) Providing services in the most efficient way possible;

d) Accountable to the taxpayer; and

e) Removing barriers to the development of an entrepreneurial and enterprising economy.”

It’s assumed Treasury Board could invoke Section 32(1)(d) of the new Act “to achieve any other purposes that Treasury Board considers appropriate” to take care of this oversight.

SIZE OF GOVERNMENT

On the matter of ensuring that the size of government does not grow faster than the rate of population growth the Saskatchewan Party’s election platform states that the Actwill limit increases in the size of Saskatchewan’s civil service to the rate of population growth” and “In years when the population does not grow, the provincial government would ensure that there was no net increase in the number of civil servants employed by the provincial government. Population decreases would not necessitate a decrease in the size of the civil service under the Saskatchewan Growth and Financial Security Act.”

This task is left to the Treasury Board as well but the details won’t be available until the regulations have been made public.

Section 33(2) of the proposed Act states: “Treasury Board shall monitor the size of the public service on a continual basis and determine whether or not the size of the public service, as determined by the method prescribed in the regulations, is growing or diminishing as a percentage of the population of Saskatchewan, as determined by the method prescribed in the regulations.”

Once again the Act affords the Treasury Board the power to “undertake any initiatives respecting the size of the public service that Treasury Board considers appropriate.”

It will be interesting to see how many times the committee exercises this part of the Act to further its conservative agenda.

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