measuring the fiscal performance of canada’s premiers, … · decem ber 2012 measuring the fiscal...

Main Conclusions

ðð The fis cal per for mance of 10 Cana dian pre miers (eight cur rent and two for mer) ismea sured up to the 2011/12 fis cal year for three com po nents of fis cal pol icy: gov ern ment spend ing, taxes, and debt and deficits.

ðð Over all, the 10 pre miers ranked, in order: Kathy Dunderdale, pre mier of New found land& Lab ra dor, first place (with a score of 71.4 out of a pos si ble 100.0); David Alward,pre mier of New Bruns wick, 2nd (70.4); Brad Wall, Sas katch e wan, 3rd (61.6); Christy Clark, Brit ish Colum bia, 4th (60.8); Ed Stelmach, for mer pre mier of Alberta, 5th (49.1); DarrellDex ter, Nova Sco tia, 6th (37.9); Jean Charest, for mer pre mier of Que bec, 7th (35.9);Dal ton McGuinty, Ontario, 8th (28.9); Rob ert Ghiz, Prince Edward Island, 9th (23.5);Greg Selinger, Man i toba, last over all (19.2 out of 100.0).

ðð On the Gov ern ment Spend ing com po nent, New Bruns wick’s David Alward took topposi tion with a score of 88.5, fol lowed by New found land & Lab ra dor’s KathyDunderdale (70.8) and Brit ish Colum bia’s Christy Clark (54.5). The remain ing pre miers scored below 50.0 on this com po nent: Darrell Dex ter (31.3), Jean Charest (29.9), EdStelmach (28.6), Brad Wall (27.5), Rob ert Ghiz (13.9), Dal ton McGuinty (12.3), andMan i toba’s Greg Selinger, who was last, scoring 0.0.

ðð On the Taxes com po nent, New Bruns wick’s David Alward again led the pre miers with ascore of 87.6 out of 100.0. Pre miers from Can ada’s most pop u lous prov inces, Dal tonMcGuinty (Ontario) and Jean Charest (Que bec), scored 54.8 and 38.0, rank ing 5th and8th, respec tively, on this component.

ðð On the Debt and Deficits component, Newfoundland & Labrador’s Kathy Dunderdaleand Saskatchewan’s Brad Wall tied for first place with perfect scores of 100.0. NovaScotia’s Darrell Dexter came in 3rd (68.4), followed by British Columbia’s Christy Clarkwith a score of 65.0. The remaining premiers scored below 50.0 on this component: EdStelmach (48.6), Jean Charest (39.9), David Alward (35.1), Robert Ghiz (24.8), DaltonMcGuinty (19.7), and Greg Selinger, who scored lowest on this component (12.7).

Decem ber 2012

Measuring the Fiscal Performanceof Canada’s Premiers, 2012

by Milagros Palacios, Charles Lammam,Amela Karabegovic, and Niels Veldhuis

Intro duc tion

With bud get def i cits and increasedgov ern ment debt expected in nearly all prov inces yet again this fis calyear, pru dent fis cal man age ment isa press ing eco nomic issue for manyCana di ans. This is rightly so, assound fis cal pol icy is a key deter mi -nant of any prov ince’s long-termeco nomic suc cess. Sound fis cal

pol icy requires pro vin cial pre miersto pri or i tize—not sim ply increase— gov ern ment spend ing, ensure bal -anced bud gets, and avoid impos inga tax bur den so heavy that itbecomes a dis in cen tive for peo ple to work hard, save, invest, and beentre pre neur ial. The eco nomicrecord shows clearly that these fac -tors help foster economic growthand prosperity.

This Fra ser Alert is designed to help Cana di ans hold their pro vin cialpolit i cal lead ers account able for therel a tive per for mance of their fis calpol i cies. In this third edi tion ofMea sur ing the Fis cal Per for mance of Can ada’s Pre miers, the authors pro -vide an objec tive, empir i cal assess -ment of how Can ada’s pre miershave man aged the pub lic finances of their prov inces and whether theyhave pur sued sound, long-termeconomic policies.

How per for mance ismea sured

This report mea sures the rel a tivefis cal pol icy per for mance of 10Cana dian pre miers.1 Using avail able his tor i cal data, each pre mier’s per -for mance is mea sured over the time

Mea sur ing the Fis cal Per for mance of Can ada’s Pre miers, 2012 2www.fraserinstitute.org

About the authors

Amela Karabegovi� is a senior econ o mist in the Fra ser Insti tute'sFis cal Stud iesdepart ment.

Niels Veldhuis is a senior econ o mistand Pres i dent of theFra ser Insti tute.

Charles Lammam is asso ci ate direc tor of theFra ser Insti tute’s Cen tre for Tax & Bud getPol icy.

Milagros Palacios is asenior econ o mist in theFra ser Insti tute’s Fis calStud ies depart ment.

Table 1: Period in which the premiers are evaluated

Prov ince Pre mier Period eval u ated

BC Christy Clark 2011/12

AB Ed Stelmach* 2007/08 to 2011/12

SK Brad Wall 2008/09 to 2011/12

MB Greg Selinger 2010/11 to 2011/12

ON Dalton McGuinty 2004/05 to 2011/12

QC Jean Charest* 2003/04 to 2011/12

NB David Alward 2011/12

NS Darrell Dexter 2009/10 to 2011/12

PE Robert Ghiz 2007/08 to 2011/12

NL Kathy Dunderdale 2011/12

* = former premier.Notes a) Ed Stelmach is the former premier of Alberta; he left office on October 7,2011. His performance was evaluated instead of that of current premier AlisonRedford because he was in power for more than half of the 2011/12 fiscal year.b) Dalton McGuinty announced on October 15, 2012 that he would step down asleader of the Ontario Liberals after the party chooses his successor in January 2013.c) Jean Charest is the former premier of Quebec; he left office on September 19,2012. His performance was evaluated instead of that of current premier PaulineMarois because he was in power for the entire 2011/12 fiscal year.d) David Alward became premier of New Brunswick on October 12, 2010, butwas evaluated only for 2011/12 since his predecessor Shawn Graham was inpower for more than half of the 2010/11 year. Moreover, Premier Alward didnot table a budget for the 2010/11 fiscal year.e) Kathy Dunderdale became premier of Newfoundland & Labrador onDecember 3, 2010, but was evaluated only for 2011/12 since her predecessorDanny Williams was in power for more than half of the 2010/11 fiscal year.Moreover, Premier Dunderdale did not table a budget for the 2010/11 fiscal year.

Sources: Websites of various provincial election bodies (see references).


he or she held office up to the mostrecent year (the 2011/12 fis cal year).2

Some pre miers were eval u ated overa lon ger period than oth ers. Forinstance, Que bec’s for mer pre mierJean Charest was eval u ated for thelon gest period (2003/04 to2011/12), whereas Brit ish Colum -bia’s Christy Clark, New Bruns -wick’s David Alward, andNew found land & Lab ra dor’s KathyDunderdale were eval u ated for theshort est period (just the 2011/12 fis -cal year) (see table 1).

Each pre mier received an over allscore (out of 100.0) and rank (out of 10) derived from their per for manceon three core com po nents of fis calpol icy: 1) gov ern ment spend ing, 2)taxes, and 3) debt and def i cits.3

Each com po nent con tains mul ti plemea sures and there are, in total, 13mea sures. Each mea sure is scoredon a scale from 0.0 to 100.0; higherper form ing pre miers receive higher

scores and lower per form ing pre -miers receive lower scores.4 The scores for the mea sures areweighted equally within each com -po nent. In the cal cu la tion for theover all score, the three com po nentsare also equally weighted.

Over all results

Table 2 con tains the over all scoresand rank ings for each pre mier, aswell as their scores and rank ings onall three com po nents. Fig ure 1 dis -plays the over all scores only.

Table 2: Overall performance of Canada’s premiers, scores (out of 100) and ranks (out of 10)

Prov. Pre mier

Over all Gov ern mentSpend ing

Taxes Debt andDef i cits

Score Rank Score Rank Score Rank Score Rank

NL Kathy Dunderdale 71.4 1 70.8 2 43.3 7 100.0 1

NB David Alward 70.4 2 88.5 1 87.6 1 35.1 7

SK Brad Wall 61.6 3 27.5 7 57.4 4 100.0 1

BC Christy Clark 60.8 4 54.5 3 62.8 3 65.0 4

AB Ed Stelmach 49.1 5 28.6 6 70.0 2 48.6 5

NS Darrell Dexter 37.9 6 31.3 4 14.1 10 68.4 3

QC Jean Charest 35.9 7 29.9 5 38.0 8 39.9 6

ON Dalton McGuinty 28.9 8 12.3 9 54.8 5 19.7 9

PE Robert Ghiz 23.5 9 13.9 8 32.0 9 24.8 8

MB Greg Selinger 19.2 10 0.0 10 44.8 6 12.7 10

Sources: Tables 3, 4, and 7; calculations by authors.

Fig ure 1: Over all per for mance of Can ada’s pre miers

Source: Table 2.

19.2

23.5

28.9

35.9

37.9

49.1

60.8

61.6

70.4

71.4

0 10 20 30 40 50 60 70 80 90 100

Greg Selinger (MB)

Robert Ghiz (PEI)

Dalton McGuinty (ON)

Jean Charest (QC)

Darrell Dexter (NS)

Ed Stelmach (AB)

Christy Clark (BC)

Brad Wall (SK)

David Alward (NB)

Kathy Dunderdale (NL)

Score

New found land & Lab ra dor Pre mier Kathy Dunderdale ranked firstover all with a score of 71.4 out of100.0, fol lowed closely by NewBruns wick Pre mier David Alward(70.4). Sas katch e wan Pre mier BradWall (61.6) and Brit ish Colum biaPre mier Christy Clark (60.8) werethe only other two pre miers to score above 50.0.

The remain ing six pre miers scoredbelow 50.0: Alberta’s for mer Pre -mier Ed Stelmach (49.1); Nova Sco -tia’s Pre mier Darrell Dex ter (37.9);Que bec’s for mer Pre mier JeanCharest (35.9), Ontario’s Dal tonMcGuinty (28.9), and PrinceEdward Island’s Rob ert Ghiz (23.5). Man i toba’s Greg Selinger had thedubi ous dis tinc tion of rank ing lastover all with a score of 19.2.

Com po nent 1: Gov ern ment spend ing

The first com po nent mea sures therel a tive per for mance of the pre -miers on gov ern ment spend ing; itcon sists of two mea sures. The firstis the aver age annual dif fer encebetween the growth in pro vin cialgov ern ment pro gram spend ing andeco nomic growth over the pre mier’s


Table 3: Government spending, scores (out of 100) and ranks (out of 10)

Gov ern mentSpend ing

Annual dif fer ence betweenpro gram spend ing

and economic growth(in per cent age points)

Annual dif fer ence betweenpro gram spend ing and

infla tion plus pop u la tiongrowth (in per cent age points)

Prov. Pre mier Score Rank Difference Score Rank Difference Score Rank

NB David Alward 88.5 1 (6.0) 77.0 2 (5.9) 100.0 1

NL KathyDunderdale

70.8 2 (12.8) 100.0 1 1.4 41.6 4

BC Christy Clark 54.5 3 (1.8) 41.1 4 (0.6) 68.0 2

NS Darrell Dexter 31.3 4 1.5 12.7 7 0.8 50.0 3

QC Jean Charest 29.9 5 0.3 22.5 5 1.8 37.3 6

AB Ed Stelmach 28.6 6 0.9 17.6 6 1.6 39.6 5

SK Brad Wall 27.5 7 (2.7) 48.9 3 4.2 6.0 9

PE Robert Ghiz 13.9 8 1.9 9.1 8 3.2 18.7 8

ON DaltonMcGuinty

12.3 9 2.5 3.9 9 3.0 20.6 7

MB Greg Selinger 0.0 10 2.9 0.0 10 4.6 0.0 10

Notesa) Program spending is generally defined as total spending minus debt charges (interest payments on debt).b) As a result of returning to the provincial sales tax (PST), British Columbia had to repay $1.6 billion to the federalgovernment which was originally intended as funding for BC to transition to the harmonized sales tax (HST). In thespending analysis above, the $1.6 billion was excluded from BC’s 2011/12 program spending because it is a one-timespending item that the current premier inherited from the previous leader. Moreover, this one-time expense is not included in program spending in official government documents such as budgets and public accounts.c) Since scores are based on data that contain several decimal places, premiers may receive slightly different scores eventhough their underlying data appears to be the same.

Sources: Canada, Department of Finance (2012); Provincial Budgets (2012); Provincial Public Accounts (various issues);Statistics Canada (2012a, 2012b, and various issues); calculations by authors.

ten ure (eco nomic growth is thenom i nal growth in pro vin cial grossdomes tic prod uct (GDP)). The sec -ond mea sure is the aver age annualdif fer ence between growth in pro -gram spend ing and the rate of infla -tion plus pop u la tion growth in theprov ince. Pre miers who increasedspend ing faster than eco nomicgrowth and the rate needed to com -pen sate for infla tion and pop u la tion growth per formed worse on thiscom po nent than their coun ter parts.

Table 3 pres ents the scores andrank ings for the Gov ern mentSpend ing com po nent. Pre mierDavid Alward of New Bruns wickranked first with a score of 88.5; hewas the only pre mier who actu allyreduced pro gram spend ing over histen ure. Spe cif i cally, over the oneyear Alward’s per for mance waseval u ated, he reduced nom i nal pro -gram spend ing by 2.0%. Alwardreduced spend ing while the pro vin -cial econ omy grew 4.0% and the

com bined rate of infla tion and pop -u la tion growth equalled 3.9%.

Kathy Dunderdale of New found -land & Lab ra dor (70.8) ranked sec -ond on the Gov ern ment Spend ingcom po nent, fol lowed by ChristyClark of Brit ish Colum bia (54.5).5

Both of these pre miers kept aver agepro gram spend ing growth belowthe rate of pro vin cial eco nomicgrowth. The remain ing seven pre -miers scored below 50.0. Man i toba’s Greg Selinger ranked last with ascore of 0.0 out of 100.0. Over Pre -mier Selinger’s ten ure, pro gramspend ing in Man i toba grew at anaver age rate of 7.8%, which was well above the aver age rates of eco nomic growth (4.9%) and infla tion pluspop u la tion growth (3.2%) in theprov ince.

Com po nent 2: Taxes

The sec ond com po nent mea suresthe rel a tive per for mance of the

pre miers on tax a tion. The Taxescom po nent is composed of twosub-com po nents. The Cor po rateIncome Tax sub-com po nent usestwo mea sures to assess per for -mance: the prov ince’s gen eral cor -po rate income tax rate in 2012 andthe aver age annual change in thegen eral cor po rate income tax rateover the pre mier’s ten ure. The Per -sonal Income Tax sub-com po nent con sists of seven mea sures. Theseinclude mar ginal tax rates on per -sonal income in 2012 and theaver age annual changes in thoserates over the pre mier’s ten ure atthree lev els of income: $50,000,$75,000, and $150,000.6 Anothermea sure included in the Per sonalIncome Tax sub-com po nent is the num ber of tax brack ets in a prov -ince’s per sonal income tax sys tem. Pre miers who main tained lowertax rates and reduced them rel a -tive to their coun ter parts per -formed better, as did pre mierswho pre sided over per sonal


Table 4: Taxes, scores (out of 100) and ranks (out of 10)

Prov. Pre mier

Taxes Cor po rate Income Tax

Per sonalIncome Tax

Score Rank Score Rank Score Rank

NB David Alward 87.6 1 100.0 1 75.2 1

AB Ed Stelmach 70.0 2 71.7 2 68.3 2

BC Christy Clark 62.8 3 71.7 2 53.8 3

SK Brad Wall 57.4 4 68.0 4 46.8 5

ON Dalton McGuinty 54.8 5 65.1 5 44.5 6

MB Greg Selinger 44.8 6 54.4 6 35.2 9

NL Kathy Dunderdale 43.3 7 37.0 7 49.6 4

QC Jean Charest 38.0 8 33.5 8 42.6 7

PE Robert Ghiz 32.0 9 21.7 9 42.2 8

NS Darrell Dexter 14.1 10 21.7 9 6.4 10

Sources: Tables 5, 6a, and 6b; calculations by authors.

income tax sys tems with fewer,rather than more, tax brack ets.

Table 4 sum ma rizes the scores andrank ings for the Taxes com po nentand each sub-com po nent. NewBruns wick’s David Alward rankedfirst over all with a score of 87.6.Alberta’s for mer Pre mier EdStelmach ranked sec ond, scor ing70.0. Christy Clark of Brit ishColum bia (62.8.), Brad Wall of Sas -katch e wan (57.4), and Dal ton

McGuinty of Ontario (54.8) werethe only other pre miers to scoreabove 50.0. Nova Sco tia’s DarrellDex ter ranked last with a score of14.1 out of 100.0.

Cor po rate Income Tax

Table 5 dis plays the scores andrank ings for the Cor po rate IncomeTax sub-com po nent and mea sures.David Alward received a per fect score of 100.0 on this sub-com po nentpartly because New Bruns wick’s

cor po rate income tax rate is tiedwith Alberta and Brit ish Colum biafor low est in the coun try. In addi -tion, Alward was in power whenNew Bruns wick’s rate decreasedfrom 11.0% in 2010 to 10.0% in2011, giv ing him the larg est aver ageannual per cent age reduc tion (4.5%)among the pre miers. Ed Stelmachand Christy Clark tied for sec ondplace with a score of 71.7, fol lowedby Brad Wall (68.0) and Dal tonMcGuinty (65.1). Greg Selinger


Table 5: Corporate income tax, scores (out of 100) and ranks (out of 10)

Cor po rateincometax rate

Gen eral cor po rateincome tax rate

in 2012

Annual per cent agechange in the gen eral

cor po rate income tax rate

Prov. Pre mier Score Rank Tax rate Score Rank Change Score Rank

NB David Alward 100.0 1 10.0 100.0 1 (4.5) 100.0 1

AB Ed Stelmach 71.7 2 10.0 100.0 1 0.0 43.4 4

BC Christy Clark 71.7 2 10.0 100.0 1 0.0 43.4 4

SK Brad Wall 68.0 4 12.0 65.3 6 (1.5) 70.7 2

ON Dalton McGuinty 65.1 5 11.5 74.0 4 (0.7) 56.1 3

MB Greg Selinger 54.4 6 12.0 65.3 6 0.0 43.4 4

NL Kathy Dunderdale 37.0 7 14.0 30.7 8 0.0 43.4 4

QC Jean Charest 33.5 8 11.9 67.1 5 3.1 0.0 10

PE Robert Ghiz 21.7 9 16.0 0.0 9 0.0 43.4 4

NS Darrell Dexter 21.7 9 16.0 0.0 9 0.0 43.4 4

Notesa) Corporate income tax rates for 2012 (and all other years) are the rates in effect at year’s end or the date when the premierleft office.b) New Brunswick’s general corporate income tax rate was supposed to decrease to 8% on July 1, 2012, according to theplan outlined in the 2009 provincial Budget. The Alward government, which came into power in October 2010, allowed therate to decrease from 11% to 10% on July 1, 2011, but rescinded the reduction to 8% in 2012.c) Ed Stelmach left office in 2011 but the corporate income tax rate in Alberta has not changed in 2012.d) Ontario’s general corporate income tax rate was supposed to decrease to 11% on July 1, 2012, and again to 10% on July 1, 2013, according to the plan outlined in the 2009 provincial budget. The McGuinty government rescinded these ratereductions in Budget 2012.e) In British Columbia’s 2012 Budget, the Clark government signalled that the general corporate income tax rate willincrease from 10% to 11% on April 1, 2014, contingent on the state of government finances.

Sources: Treff and Perry (various editions); Treff and Ort (various issues); PriceWaterHouseCoopers (2012); ProvincialBudgets (2012); calculations by authors.

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(54.4) was the only other pre mier to score above 50.0 on the Cor po rateIncome Tax sub-com po nent. Rob -ert Ghiz and Darrell Dex ter tied forlast place with a score of 21.7because they main tained the high est cor po rate income tax rate amongthe prov inces (16.0%) and did notreduce the rate dur ing their ten ures.

Per sonal Income Tax

The scores and rank ings for thePer sonal Income Taxsub-component and mea sures areshown in tables 6a and 6b. NewBruns wick Pre mier David Alwardwas first over all with a score of 75.2,partly because he allowed a mar -ginal tax rate reduc tion pre vi ously

announced by his pre de ces sor onincomes of $50,000 and $75,000 togo through. That said, New Bruns -wick’s tax rates on mid dle and highincome earn ers are still gen er allyhigher than the flat tax rate of 10.0% lev ied in Alberta. In addi tion, NewBruns wick’s per sonal income taxsys tem has four sep a rate tax


Table 6b: Personal Income Tax, scores (out of 100) and ranks (out of 10) (continued)

Annual changein the mar ginal tax rate

at $50,000


at $75,000


at $150,000

Prov. Pre mier Per cent Score Rank Per cent Score Rank Per cent Score Rank

NB David Alward (1.6) 100.0 1 (1.6) 91.6 2 0.0 100.0 1

AB Ed Stelmach 0.0 0.0 2 0.0 0.0 4 0.0 100.0 1

BC Christy Clark 0.0 0.0 2 0.0 0.0 4 0.0 100.0 1

NL Kathy Dunderdale 0.0 0.0 2 0.0 0.0 4 0.0 100.0 1

SK Brad Wall 0.0 0.0 2 0.0 0.0 4 0.0 100.0 1

ON Dalton McGuinty 0.0 0.0 2 0.0 0.0 4 0.0 100.0 1

QC Jean Charest 0.0 0.0 2 (2.0) 100.0 1 0.0 100.0 1

PE Robert Ghiz 0.0 0.0 2 (1.5) 86.8 3 0.0 100.0 1

MB Greg Selinger 0.0 0.0 2 0.0 0.0 4 0.0 100.0 1

NS Darrell Dexter 0.0 0.0 2 0.0 0.0 4 2.7 0.0 10

Notesa) Personal income tax rates for 2012 (and all other years) are the rates in effect at year’s end or the date when the premierleft office.b) The three income levels are in constant dollars (adjusted for inflation) to minimize the problem of threshold indexationcausing perceived tax rate changes and to ensure longer-term premiers are not disadvantaged compared to shorter termones. It is important to note that tax rate changes at the various income levels can occur either due to changes in actual taxrates or changes in income thresholds.c) Personal income tax rates include surtaxes where applicable. Quebec’s tax rates are adjusted for the federal abatement.The number of tax brackets is after surtaxes are applied.d) Ed Stelmach left office in 2011 but the personal income tax rates in Alberta have not changed in 2012.e) New Brunswick’s David Alward came into power in October 2010 and allowed a personal tax rate reduction (on incomeof $50,000 and $75,000) enacted by a previous government to go through in 2011. However, the Alward governmentdelayed personal income tax rate reductions that were scheduled for 2012.f) Since scores are based on data that contain several decimal places, premiers may receive slightly different scores eventhough their underlying data appears to be the same.

Sources: Treff and Perry (various editions); Treff and Ort (various issues); PriceWaterHouseCoopers (2012); ProvincialBudgets (2012); calculations by authors.


Table 7: Debt and deficits, scores (out of 100) and ranks (out of 10)

Debt anddeficits

Annual sur plus (def i cit)as a per cent age

of GDP

Annual per cent agechange in net debtas a share of GDP

Prov. Pre mier Score Rank Percent Score Rank Percent Score Rank

NL Kathy Dunderdale 100.0 1 2.31 100.0 1 (18.7) 100.0 1

SK Brad Wall 100.0 1 0.85 100.0 1 (16.9) 100.0 1

NS Darrell Dexter 68.4 3 (0.08) 92.6 4 1.1 44.3 5

BC Christy Clark 65.0 4 (0.11) 89.6 5 2.2 40.4 6

AB Ed Stelmach 48.6 5 (0.03) 97.2 3 14.3 0.0 10

QC Jean Charest 39.9 6 (0.74) 30.7 6 (0.3) 49.0 3

NB David Alward 35.1 7 (0.81) 23.7 7 0.5 46.4 4

PE Robert Ghiz 24.8 8 (0.94) 11.1 8 2.8 38.6 7

ON Dalton McGuinty 19.7 9 (1.03) 2.7 9 3.3 36.8 8

MB Greg Selinger 12.7 10 (1.06) 0.0 10 6.7 25.5 9

Notesa) Surplus (deficit) is the difference between revenues and total spending before any unusual items, transfers to funds,consolidation adjustments, and forecast allowances.b) Premiers that generated average surpluses were automatically assigned a score of 100.c) Alberta has net assets (or negative net debt) because the value of financial assets exceed gross debt. While Alberta’s netasset position is unique among the provinces, the value of its assets has been declining over time beginning in fiscal year2007/08. During Ed Stelmach’s tenure, Alberta’s net assets decreased as a share of GDP by an average of 14.3% per year.Since the second debt and deficits measure is meant to capture annual changes in net debt, Stelmach’s performance isevaluated using the reduction in Alberta’s net assets.d) If accounting changes were made to the underlying debt and deficits data, the authors used data that had been adjustedretroactively. However, in cases where revised data was not provided (Quebec), the authors omitted years where the changetook place.e) As a result of returning to the provincial sales tax (PST), British Columbia had to repay $1.6 billion to the federalgovernment which was originally intended as funding for BC to transition to the harmonized sales tax (HST). In the analysis above, the $1.6 billion was excluded from BC’s 2011/12 deficit and debt because it is a one-time spending item that thecurrent premier inherited from the previous leader. Had we included the $1.6 billion in BC’s 2011/12 deficit and debt,Premier Clark would have ranked 8th on this component and 5th overall.f) Jean Charest recorded a deficit, on average, but still managed to reduce net debt as a share of the economy. It is possiblefor a premier to incur a deficit while at the same time reducing net debt. A deficit (or surplus) is the difference between total revenue and total spending, while net debt is gross debt minus financial assets. So changes in net debt can occur due tochanges in gross debt or changes in financial assets, or both.g) Since scores are based on data that contain several decimal places, premiers may receive slightly different scores eventhough their underlying data appears to be the same.

Sources: Canada, Department of Finance, 2012; Provincial Budgets, 2012; Provincial Public Accounts (various issues);Statistics Canada, 2012b; calculations by authors.

brack ets com pared to Alberta’s sin -gle bracket. Ed Stelmach (68.3) andChristy Clark (53.8) were the onlyother pre miers to score above 50.0on the Per sonal Income Taxsub-com po nent. Ontario’s Dal tonMcGuinty (44.5) and Que bec’s JeanCharest (42.6), pre miers from Can -ada’s most pop u lous prov inces,ranked sixth and sev enth, respec -tively. Nova Sco tia’s Darrell Dex terranked last with a score of just 6.4.Nova Sco tia’s per sonal income taxsys tem has five sep a rate tax brack ets (tied for sec ond highest) andincludes some of the high est mar -ginal tax rates in the coun try.

Com po nent 3: Debt and def i cits

The final com po nent mea sures therel a tive per for mance of the pre -miers on debt and def i cits. Spe cif i -cally, it mea sures a pre mier’s use ofdef i cit financ ing for gov ern mentspend ing and whether they increased or reduced their prov ince’s accu mu -lated debt bur den. The Debt andDef i cits com po nent includes twomea sures, both of which are cal cu -lated rel a tive to the size of the pro -vin cial econ omy (GDP). Def i citsand sur pluses are cap tured by theaver age annual def i cit or sur plus asa per cent age of GDP over the pre -mier’s ten ure. Debts are cap tured by the aver age annual per cent age change in net debt as a share of GDP. Pre -miers who recorded def i cits andincreased gov ern ment debt per -formed worse than those who bal -anced their books and reducedpro vin cial debt.

Kathy Dunderdale of New found -land & Lab ra dor and Brad Wall of

Sas katch e wan tied for first place onthe Debt and Def i cits com po nentwith per fect scores of 100.0 (seetable 7). These two pre miers werethe only ones to both record a sur -plus and reduce net debt, on aver age, dur ing their ten ures. Darrell Dex terof Nova Sco tia was a dis tant thirdscor ing 68.4 on this com po nent.Christy Clark was the only otherpre mier to score above 50.0 (65.0).

The other six pre miers (Ed Stelmach, Jean Charest, David Alward, Rob ert Ghiz, Dal ton McGuinty, and GregSelinger), failed to score above 50.0since all incurred a def i cit, on aver -age, and all except Que bec’s JeanCharest increased net debt dur ingtheir ten ures.

Con clu sion

In the cur rent eco nomic cli mate,the pur suit of sound fis cal pol icy byour polit i cal lead ers is an impor tantfoun da tion for improv ing our eco -nomic well-being. This Fra ser Alertmea sures the rel a tive per for manceof 10 Cana dian pre miers in threecore areas of fis cal pol icy: gov ern -ment spend ing, taxes, and debt anddef i cits. Pre miers who fare wellshould be com mended, while thoselag ging behind should use the per -for mance of oth ers as a model forreform. Regard less of where theyranked, all pre miers, even thosewith high rank ings, have room forimprove ment.

Notes1 At the time of writ ing, eight of the

pre miers included in this Alert arecur rently in power and two are for -mer pre miers. While Ontario pre -mier Dal ton McGuinty announced

his res ig na tion on Octo ber 15, 2012,he is con sid ered a cur rent pre mierbecause his party has n’t yet cho sen asuc ces sor. The suc ces sor will beselected in early 2013.

2 Data for the 2012/13 fis cal year areavail able, but are derived from gov -ern ment pro jec tions. Data for2011/12 are from his tor i cal records.

3 For a review of the aca demic lit er a -ture high light ing why each fis cal pol -icy com po nent is impor tant foreco nomic per for mance, please seethe orig i nal and more com pre hen sive study upon which this Fra ser Alert isbased (Lammam et al., 2010).

4 The scores for each mea sure are cal -cu lated using a min-max for mula.For addi tional details on the meth od -ol ogy, please see Lammam et al.,2010: 48-52.

5 Kathy Dunderdale’s strong per for -mance on the Gov ern ment Spend ingcom po nent is in part due to New -found land & Lab ra dor’s sig nif i canteco nomic growth, not her abil ity torestrain the growth in gov ern mentpro gram spend ing. For instance, over the one year Dunderdale’s per for -mance was eval u ated, the pro vin cialecon omy grew a con sid er able 17.5%,while at the same time pro gramspend ing increased 4.7% (a dif fer ence of 12.8 per cent age points).

6 See Lammam et al., 2010, for anexpla na tion of why these three lev elsof income were selected.

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