The plight of residents living on the Attawapiskat reserve began long before news broke last year that some band members were living in conditions resembling a war zone.

Between the Chief, her Council (the band has received over $90 million since 2006) and the federal government, which handled the crisis poorly from the beginning, there’s plenty of blame to go around for this unacceptable situation.

But the root of the problem, an all too familiar one on reserves across Canada, begins and ends with the Indian Act.

It’s a paternalistic document and an abject failure that denies natives basic property rights, thereby keeping them in a cycle of poverty.

In 1969, an infamous “White Paper”, written by then Indian affairs minister Jean Chretien for the Trudeau government, recommended abolishing the Indian Act.

This suggestion was met with a resounding “no” from the native leadership of the time.

Arguably, one of the most vocal opponents was Harold Cardinal, who wrote in his book, The Unjust Society, a response to the paper: “In spite of all government attempts to convince Indians to accept the white paper, their efforts will fail, because Indians understand that the path outlined by the Department of Indian Affairs through its mouthpiece, the Honourable Mr. Chretien, leads directly to cultural genocide. We will not walk this path.”

In 2012, Cardinal’s words would be out of step with many present-day native leaders, some of whom have made impassioned pleas for the abolition of the Act.

Unfortunately, the Conservative government, like the Liberal government before it, hasn’t shown a willingness to do this.

Instead, it has chosen to introduce Bill C-27, “An act to enhance the financial accountability and transparency of First Nations.” Although this bill on its own won’t undo the damage of the Indian Act, it helps to address one of the fundamental problems on many native reserves today — a lack of accountability for taxpayers’ dollars spent.

It’s worth noting this bill could also apply to every government department.

Brought forward by Aboriginal Affairs Minister John Duncan, the stated purpose of the legislation, which is quietly making its way through Parliament, is to “enhance the financial accountability and transparency of First Nations by requiring the preparation and public disclosure of their audited consolidated financial statements and of the schedules of remuneration paid by a First Nation or by any entity that it controls, as the case may be, to its chief and each of its councillors, acting in their capacity as such and in any other capacity, including their personal capacity.” The average on-reserve population is almost 1,200 residents.

Over $7 billion is spent annually on “transfers” to reserves across the country.

While it comes as no surprise to those living on reserves, there is little or no disclosure of where this money has been spent.

Among the most egregious controversies, one chief received a salary of over $970,000 ­tax-free on a reserve in Atlantic Canada where there were 304 residents.

Other reserve politicians were paid more than provincial premiers and the prime minister.

To be sure, many reserves have done extremely well with economic development initiatives, while ensuring a decent standard of living for their residents.

This legislation is meant to deal with the worst of the worst, so individual band members can ask their leaders where the money went when the water isn’t running, the heat isn’t turned on, or the school isn’t being built.

It’s a direct way of empowering natives to question their leaders, without fear of reprisal.

It’s shocking to learn when South Africa was establishing its system of apartheid, it based it on the model Canada had established with our reserve system — nothing of which to be proud.

Although the Harper government won’t dismantle this system entirely, it deserves credit for taking steps to making it more accountable to those who live within it.

< http://www.torontosun.com/2012/05/04/an-accountable-act >

Just two months ago, economists and policy wonks were cheering the news that Statistics Canada, the much lauded government statistics office, had eliminated fees for its online databanks, making millions of figures available for free.

Now the quantity of that data is under threat from the biggest budget cuts in recent memory.

Experts fear the quality will fall as well, hurting StatsCan’s global reputation and compromising data that shapes government financial and social policy, as well as business investment.

Nearly half of the agency’s 5,700 staff have received the layoff notices that are being issued in many federal departments as the government seeks to eliminate the budget deficit by 2016.

The final job cuts will be far smaller than that, but there is bound to be pain.

“Government departments will see the volume and detail of information available sharply reduced,” Chief Statistician Wayne Smith said last month in a sombre private message that spoke of 2012 as “a year of sacrifice.”

In a video of his address obtained by Reuters, Smith said spending cuts at StatsCan would be much deeper than the $33.9 million — or about seven per cent — outlined in the federal budget due to an “unprecedented” loss of an additional $20 million in income from other government departments.

Three-quarters of the savings would come from cutting programs, meaning fewer surveys, less data and less analysis.

Right now, StatsCan employs an army of experts to conduct 350 surveys that range from the market-movers like employment to curiosities like dried egg stocks and bee-keeping.

StatsCan isn’t saying what it will cut. But the Conservative government says the impact will be minimal at StatsCan and across the entire federal bureaucracy.

“Seventy per cent of our staff reductions have been in back office and administrative positions. They do not affect front line at all,” said Tony Clement, the minister who oversaw the process for deciding where and how much to cut spending.

“We’ve made it clear in all of these cases that for the services that Canadians depend upon, they have been red-circled.”

That’s a promise that rings hollow with many of StatsCan’s present and former staff, among them Ivan Fellegi, who aspired to be a poet in his native Hungary before fleeing to Canada and joining StatsCan in 1957. He was the agency’s chief statistician from 1985 to 2008 and is now retired.

“Everything that is going to be cut is going to hurt a lot,” said Fellegi, who still has an office in StatsCan that he visits twice a week. “A lot of the bureau’s budget is basically not touchable.”

The latest cuts are seen as a huge setback for an institution viewed as a global benchmark for unbiased, accurate social and economic data and research since it was created almost a century ago.

Canada spends an average $530 million, or about $16 per capita on government statistics, a tiny fraction of its $276 billion annual budget. In Australia, where the main statistics office shares StatsCan’s top international billing, the cost is some $17 a head, but that excludes farm and commodities data which, unlike in Canada, is gathered by a separate agency.

Experts say it’s very difficult to compare countries’ spending on official statistics because many have decentralized their data-gathering activities.

StatsCan, which boasts the second lowest revision rate to GDP numbers of the G7 countries, is one of the most compliant with standards from the International Monetary Fund and the Organization for Economic Cooperation and Development (OECD), along with Australia and the United States.

But StatsCan faced howls of protest last year for eliminating — at government behest — the compulsory long-form census that supplemented the basic census form with questions on ethnicity, income and housing. It was replaced with a shorter, voluntary survey.

Critics say the new methodology breaks the historical statistics chain, making comparisons harder. They warn the less than complete numbers will have a ripple effect on other data, including employment, that may not be apparent for years.

Chief Statistician Munir Sheikh quit in protest, and chief economic analyst Philip Cross later followed suit.

StatsCan was already reeling from a 2010 budget freeze. And the decision to stop charging fees robbed it of at least $2 million in outside revenue. Unions estimate some 700 jobs will vanish, ending a 25-year no layoffs policy instituted by Fellegi.

Former staffers said the new cuts could not only affect the quality of data and damage its reputation, but risk financial market volatility. The sources asked not to be identified because they are not authorized to speak, or due to the sensitivity of the matter.

StatsCan likely won’t tinker with the three top-tier indicators — the labour force survey, consumer price index and the dozens of “national accounts” surveys that produce gross domestic product estimates. But beyond that little is clear.

“Fiscal and monetary programs will not be affected,” StatsCan said when asked if economic indicators would be cut.

Getting rid of the composite leading indicator is seen as a no-brainer as it needs an update to remain relevant. The agency will stop publishing seasonally-adjusted data for new motor vehicle sales.

Other items for the axe could include social surveys, data processing and analytical work, former staffers said.

StatsCan said its quality controls would remain in place. “We maintain analytical capacity to verify the accuracy and relevance of the statistics it produces, assist users in interpreting the data, and develop relevant concepts for the production of statistics,” the agency said.

It’s true that StatsCan’s plight appears mild compared to that of Britain’s Office for National Statistics, which will be cut by 17.4 per cent in real terms over four years.

The Australian Bureau of Statistics also faced cost pressures in 2008. It reduced the sample size of its employment survey after cuts, only to have its funding restored because of the negative impact on markets.

Kimberly Zieschang, head of the IMF statistics department’s real sector division, said belt-tightening governments should note that economic indicators offer a big bang for their buck, as they are essential for sound fiscal and monetary policy. And Paul Schreyer, deputy director of the OECD’s statistics directorate said statistics agencies need to analyse data as well as collect it in order to spot errors.

The thought of cuts to the relatively small team of analysts at StatsCan pains Fellegi, who built up a team of experts to popularize the numbers and shed light on key issues of the day. “I spent decades building up those areas because they were weaknesses before,” he said.

The reliability of data was on the minds of economists at National Bank recently after jobs data showed a precipitous drop in fourth-quarter employment in the province of Quebec. Taken at face value, the figures would have signalled a severe recession. The bank asked StatsCan to review its methodology.

StatsCan defended its methods and said all such surveys are subject to sampling variability, advising users to watch for trends rather than monthly changes.

Markets have put a premium on quality data since the global financial crisis. For now Canada is on one end of the credibility spectrum while countries like Greece and Argentina, who have fudged their data, are on the other extreme.

Some 200 academics who gathered in Ottawa last month to celebrate StatsCan’s newly free data want to make sure things stay that way. Their cheerleading was a polite way of telling the government to lay off statistics.

“This conference represents a broad-based effort on the part of the Canadian academic community and others who see high quality official statistics as an important pillar of a modern market economy and democracy,” said Joseph Doucet, dean of the Alberta School of Business and an adviser to the provincial government on energy and regulatory policies.

Reuters

< http://www.ottawacitizen.com/business/StatsCan+StatsCan/6555599/story.html >

The federal government employs 400,000 people, more or less – and will probably still employ 400,000 people, more or less, when it completes its modest downsizing in 2015. With a maximum hit of 12,000 people, it is a modest downsizing, indeed: one worker a year, for three years, for every 100 workers who keep their jobs. By way of perspective, New Brunswick lost 5,700 jobs in March alone. Nova Scotia lost 2,900. Prince Edward Island lost 200. Newfoundland lost 700. Atlantic Canada, in other words, lost almost as many jobs in a single month (9,500) as the country will lose in three years from the elimination of jobs in the federal government. For the most part, no one much noticed or much cared. Most of these folk, after all, were private-sector workers.

Assume for a moment, as absurd as the proposition may sound, that the federal government delivered its services slightly more efficiently in the future than it does now. Arbitrarily, say 1 per cent more efficiently. This feat would eliminate 4,000 jobs – with no loss in either quality or quantity of services. Now extend this single-point increase in efficiency to three years. This feat would eliminate 12,000 jobs with no loss in either quality or quantity of services.

These calculations show that the problem with government isn’t so much payroll as productivity. Make a single percentage-point increase in efficiency in the federal work force annually for 10 years – and you would save 40,000 jobs: once again, with no loss in either quality or quantity. (Alternatively, as some people would see it, the government could increase services by 10 per cent with no increase in payroll.)

Most governments and many people continue to make the same grievous error – the assumption that public-sector solutions necessarily require more public-sector workers. Bureaucracies, by their nature, generate procrastination and waste, but 21st-century economics will compel governments to get efficient. In 2004, long before the Great Recession, McKinsey & Company, the U.S.-based management consultant, published a study of public-sector productivity and presciently warned: “All public services will face epic squeezes in the years ahead.” The company was right.

“For all the talk of reinventing government, nothing much has happened,” McKinsey concluded in this report. “The political culture [of most governments] remains oriented to legislation, not to the proper management of programs.”

McKinsey noted that U.S. public-sector productivity once matched private-sector productivity – and, in fact, did so through much of the 20th century. For whatever reasons, this record of public-sector productivity advances ended abruptly early in the 1980s.

McKinsey returned to this theme in a commentary last September: “If the G8 nations could increase public-sector productivity by 1.5 per cent annually,” it said, “they could generate benefits worth $1-trillion (U.S.) a year – equivalent to 1.5 per cent to 2.5 per cent of these nations’ combined GDP.” The goal is not unreasonable: U.S. private-sector productivity has increased at this rate annually for the past three decades.

For Canada, this kind of productivity gain could produce a windfall equal to as much as $35-billion a year. The public sector is Canada’s largest industry by far, administering one-third of the country’s entire economy. Excused from the need to get productive, it constitutes a constant drag on economic growth.

For governments, the message is ominous: Get productive or get out. For its part, the controversial Drummond report cited low public-sector productivity as Ontario’s “ultimate challenge.” Although the government has ignored much of this report, Finance Minister Dwight Duncan now proposes to assign “productivity teams” – auditors, analysts, consultants – to look for ways to kick-start a productivity renaissance. It’s a start.

What else could governments do?

They could require that every public-sector hiring pay for itself in increased productivity – the same way many businesses do. They could outsource much more work to the private sector – if necessary, in other countries. They could reward deputy ministers (and other executive-class public servants) who solve problems – as opposed to perpetuating them. Such managers are as important as CEOs of large enterprises. They could retrieve management rights and prerogatives from public-sector unions – and limit increases in pay and perks to increases in per-capita productivity.

Public-sector unions, alas, still don’t get it. Before public-sector productivity can rise, governments will need to get their attention – or arbitrarily eliminate more of the jobs these unions exist to protect.

< http://www.theglobeandmail.com/news/opinions/opinion/ottawa-should-do-the-math-productivity-trumps-head-counts/article2409632/ >

The Government of Ontario tabled its annual budget on March 24, asking everyone from affluent seniors to corporations to help the government tackle its deficit. Find charts and graphs below detailing the province’s revenue, spending, debt, proposals and projections for the years ahead.

_____________________________________________________________________________________________

< balancebudget2_1389205a.jpg >

See also:  < debt2_1389204a.jpg >;  < expense-revenue2_1389202a.jpg >;  < pensions2_1389206a.jpg >;  < Drug-benefit2_1389203a.jpg >.

< http://www.theglobeandmail.com/news/politics/infographic-ontarios-budget-by-the-numbers/article2383185/?from=2388767 >

Our voting system weakens Canada’s cohesion. It artificially amplifies the regional concentration of political party support at the federal level. With 50% of the vote in a given province, a federal party could end up taking almost all the seats. But with 20% of the vote, it may end up not winning any seats at all. This is how Ontario appeared more Liberal than it really was, Alberta more Reform-Conservative, Quebec more Bloc, etc.

I do not see why we should maintain a voting system that makes our major parties appear less national and our regions more politically opposed than they really are. I no longer want a voting system that gives the impression that certain parties have given up on Quebec, or on the West. On the contrary, the whole spectrum of parties, from Greens to Conservatives, must embrace all the regions of Canada. In each region, they must covet and be able to obtain seats proportionate to their actual support. This is the main reason why I recommend replacing our voting system. The issue now is to come up with an alternative.

I propose the “proportional-preferential-personalized vote,” or “P3” for short (not to be confused with P3 construction projects!).

We would elect three to five MPs per riding rather than one. The number of seats would remain the same; what would be reduced is the number of ridings. This would provide moderate proportional representation, which corrects the regional distortions of the current electoral system.

Indeed, the party that gets the most votes in a riding would probably win three seats out of five or two out of three. Thus, seats would be truly up for grabs in all ridings, even in the most Conservative ones in Alberta and the most Liberal ones in Toronto and Montreal.

However, using this moderate proportional voting system would be less likely to result in one-party majority governments. And should a coalition government prove necessary, it should be stable and coherent. One way to prepare parties to such eventualities would be to use preferential voting. Under this system, voters are invited, when casting their votes, to rank the parties in order of preference.

The great advantage of preferential voting is that it promotes cooperation among the parties. It is actually in each party’s interest to persuade those who support other parties that it represents a second acceptable choice. The parties are thus encouraged to highlight similarities in their objectives and platforms.

By seeking out the transfer of subsequent voting preferences from their respective voters, parties would better prepare themselves to govern together. Thus, these coalitions would be predictable for voters, and even influenced by them, and, as a result, likely coherent.

Finally, voters should be allowed not only to rank parties by preference, but also to select a candidate. They would choose the candidate they prefer from among those put forward by the party they select as their top preference. In other words, voters would choose only one candidate in the party of their first choice. This would allow Canadians to continue voting for real live candidates, not just for parties. Hence, voting would remain personalized.

This is how the ballots would be counted: First, the voters’ first party preferences would be tallied. If one or more parties failed to obtain enough first choices to win a seat, the party that got the smallest number of votes would be eliminated and its voters’ second choices would be transferred to the remaining parties. The second and subsequent choices of the eliminated parties would be allocated until all of the parties still in the running obtain at least one seat. This would produce the percentages of votes that determine the number of seats obtained by the various parties.

Then, the voters’ choices as to their preferred candidate among those attached to their preferred party are counted. If a party obtained two seats, that party’s two candidates who received the highest number of votes would win those two seats.

We would thus get a voting system that enhances our political parties’ Canada-wide presence, reinforces the level of cooperation that should exist between parties, makes every vote count and ensures that there are seats truly at stake throughout Canada. P3 voting is a perfect fit for Canada, a great tool to promote cohesion in our vast, decentralized and diverse country.

Stéphane Dion is the former leader of the Liberal party and federal Liberal MP for St-Laurent and Cartierville.  A longer version iof this text is available on www.ideefederale.ca

< http://fullcomment.nationalpost.com/2012/04/22/stephane-dion-canada-needs-a-new-voting-system/#more-75406 >

A second round of major cuts to the public sector is slicing off the hands that serve the public and the heads that serve the federal government.

The Public Service Alliance of Canada said Wednesday that more than 5,500 civil servants have been given notice, including more than 250 who provide client services to military veterans.

Hundreds of policy analysts were also among those told that their jobs are on the block as the Conservatives seek to slash spending by $5.2 billion over the next three years.

The tension between the political and policy branches of government has been palpable since the Conservatives were elected in 2006, with perhaps the highest-profile case being the resignation of Canada’s chief statistician over the decision to cancel the long-form census.

“What we’ve seen over the past little while is a change in what’s expected of advisers,” said Claude Danik, executive director of policy for the Canadian Association of Professional Employees, which represents more than 13,000 economists and social scientists who advise the government on public policy.

“In the past they wanted advice that was independent. We don’t feel that’s still what is being asked. It depends on the department but they’re often told to find information that will support particular positions.”

Danik says he doesn’t see the cuts as political but they do raise a serious question: “How will departments be able to carry out their mandates with these cuts?”

A spokesperson for Treasury Board President Tony Clement said since the cuts only eliminate four per cent of the public service over the next three years, there will still be plenty of advice and support to go around.

“This government respects and appreciates the hard work that public servants do for this country,” Jennifer Gearey said in an email.

“We have found fair, balanced and moderate savings measures to ensure jobs, economic growth, and long term prosperity for all Canadians.”

According to PSAC, unionized employees in 23 federal departments received notice Wednesday, with 1,137 staff at the Canadian Border Services Agency notified their position could be on the hit list, and 689 such positions at Agriculture Canada.

The number of notifications doesn’t represent the number of actual jobs that could be cut, union officials explained.

The system requires all employees who do a particular job to be notified no matter how many of their positions are being eliminated.

Geographically, Ottawa bore the biggest brunt with 2,224 workers put on notice, according to the union.

Among the analysts told Wednesday that they’ll be affected by the job cuts are those who work at Foreign Affairs, Treasury Board, and Health Canada.

Danik said it appeared many of the cuts at Health were coming from within the branch of the department that focuses on First Nation and Inuit health.

A spokesperson for the department couldn’t say what programs are being cut because not all employees have been notified.

“We are still continuing to provide core health services to First Nations and Inuit,” Stephane Shank said.

Other departments, including Treasury Board and the Privy Council Office, gave the same response when asked for more details about the cuts, refusing to confirm job numbers or programs under the knife because the notification process is ongoing.

But now that individuals are being told, the departments should come clean with the public on what programs are being affected, said John Gordon, national president for PSAC.

“I think they’ve been muzzled by the government,” he said.

Almost all federal departments were told last month to slash their budgets by five per cent or more, meaning few will be immune from job cuts.

Others notified Wednesday include workers at the Canadian Space Agency, Environment Canada and the Canadian Food Inspection Agency.

Some 308 employees are being let go from the food inspection agency, the union said.

“With fewer independent food safety professionals working in the public interest, industry self-policing will increase and consumers will be left to fend for themselves,” said Bob Kingston, president of the union representing food inspectors.

A spokeswoman for Agriculture Minister Gerry Ritz said the government is actually increasing resources for food safety, pointing to $51 million outlined in the budget.

“The Agency will not make any changes that would in any way place the health and safety of Canadians at risk,” Meagan Murdoch said in an email.

She said one way the cuts will be achieved is by moving the grants and contributions programs into one office.

New Democrats said the cuts are putting Canadians at risk.

“These cuts are just another scary reminder that Conservatives care more about funding their backwards priorities rather than protecting Canadians’ safety and trust in the food industry,” said Malcolm Allen, NDP critic for Agriculture and Agri-Food.

As the cuts were being announced, the Harper government was trumpeting funds for a meat processing plant in Toronto.

“We will enhance food safety and traceability, improve plant efficiency, and reduce operating costs through the purchase of value-added equipment,” David Schwartz, president of Quality Meat Packers, said in a statement included in the government’s press release.

Altogether, about 19,200 jobs will be lost over the next three years following last month’s budget.

Some workers could be reassigned, while others will be given the option of leaving early; about 7,000 of the job cuts reported in the budget will be due to attrition, the government said.

But PSAC has said the number is much larger.

A budget freeze in 2010 saw 9,700 positions lost and there are still 6,300 jobs that will be cut as a result of the 2007-2010 spending reviews, the union said.

< http://www.huffingtonpost.ca/2012/04/11/public-service-cuts-jobs-canada_n_1418178.html >

In the wake of the Drummond report on reforming Ontario’s public services—which includes 362 recommended reforms to balance the books by 2018—CCPA Research Associates share their analyses:

- In Debunking Drummond, Erin Weir writes about how more realistic revenue projections and policies to bolster revenue would reduce the pressure for austerity.

- In Drummond, Deconstructed, Karen Foster questions the gospel according to Drummond—and asks if the report is really our best and only option.

- Erin Weir posts a response to The Harvard International Review’s interview with Don Drummond: Drummond Misdiagnoses Ontario’s Economy.

- Erin Weir questions the assumption underlying the Drummond Commission’s gloomy fiscal picture in his blog post, Deflating Drummond.

- In Drummond: The Good, The Bad and The Ugly, Erin Weir breaks down the Drummond report and shares his advice on how the Ontario government can (and should) move forward.

- Jim Stanford gives us ten macroeconomic factoids to keep in mind as we counter the overarching claim that Ontario just can’t afford our already-stretched network of public services:
   Ten Points on Recession, Deficits, and Austerity in Ontario.

< http://www.policyalternatives.ca/newsroom/updates/drummond-commission-report-countering-cutbacks-ontario >

Ontario has 82 taxpayer-funded health agencies. A handful, such as Cancer Care Ontario and the Trillium Gift of Life Network, are widely known. A couple — ehealth Ontario and ORNGE — broke into the public consciousness because of scandal. But most operate in obscurity.

These agencies are often where trouble breeds.

Even when they’re benign, they diffuse health decisions over so many different bodies that it’s impossible for Ontarians to keep track.

And they’re expensive. Many are headed by well-paid executives and provide jobs for hundreds of government appointees.

Is this a smart way to use public funds? Is it a good way to deliver health care? Is it a responsible way to spend taxpayers’ money?

Surprisingly, banker Don Drummond, who just conducted a year-long review of Ontario’s public spending, said very little about this issue. As chair of the province’s Commission on Reform of Ontario’s Public Services, he talked about the need to streamline health-care services. But his only suggestion on the profusion of government satellites was: Consolidation of health service agencies and/or their boards should occur where appropriate while establishing any new consolidated agencies as separate legal entities to limit major labour harmonization and adjustment costs.”

There was nothing about scrapping any of them, reducing their allocation or folding them into the health ministry.

It would be reckless, of course, to take an axe to these agencies without a thorough investigation of what they do and how effectively they do it. But at a time of austerity, Ontarians need to know why the government needs so many stand-alone health agencies. Do patients benefit? Do taxpayers get value for their money?

To weigh this question, some basic information is needed.

All health agencies are not equal. Some, such as Cancer Care Ontario, organize services and deliver treatment. Some, such as the Health Professions Appeal and Review Board, adjudicate disputes between health-care providers and patients. And some are purely advisory. They conduct studies and surveys designed to influence government policy.

Nor are the members of all agencies compensated equally. Some get up to $188,950 a year. Others are merely reimbursed for their out-of-pocket expenses.

Each type of agency needs to be considered separately:

• Those that bring together health specialists in a sprawling field such as cancer research and treatment make sense. A separate agency gives the government a way to allocate a specific amount and let those best qualified decide how to distribute it.

• Similarly, agencies that adjudicate disputes within the health-care sector clearly need to be independent of government.

• For advisory agencies, the rationale is less clear. Does the government really need 20 councils representing every health-care profession from dental hygienists to respiratory therapists? Does it need 25 district health unit boards as well as 14 Local Health Integration Networks (LHINs)? Does it need arms-length expert committees to guide its choices on autistic spectrum disorders, HIV/AIDS and rabies? Does it need an external recruiting agency to hire health-care workers?

There isn’t likely to be a better time than now to cull these agencies (plus the 526 that report to other ministers). The premier is determined to cut provincial expenditures. Health Minister Deb Matthews has just embarked on a comprehensive overhaul of the health-care system. And the public is primed for belt-tightening.

Surely some of these agencies have outlived their purpose; some are maintained for reasons of political expediency and some exist chiefly to lobby the government.

By winnowing down the list, ministers could differentiate between agencies that do valuable work and those that make government more opaque, less accountable and more costly. They could simplify the maze that has developed at and around Queen’s Park.

It’s not just a matter of efficiency, it’s a question of fairness. At a time when Ontarians are being asked to sacrifice, it would unconscionable to deprive kids living in poverty, families warehoused in homeless shelters and struggling legal aid clinics of provincial support to perpetuate unnecessary government agencies.

(A complete list of provincial government agencies is on the website of Ontario’s Public Appointments Secretariat.)

< http://www.thestar.com/opinion/editorialopinion/article/1143399–too-many-needless-government-agencies-in-ontario >

Canada’s statistics agency is refining the consumer price index, a key economic yardstick for matching pensions and salaries to the rising cost of living – and the result could mean sizable savings for governments and corporations that hike payments annually to keep pace with inflation.

Statistics Canada’s consumer price index, known as CPI, is a widely followed gauge of inflation that has an enormous impact on Canadians’ lives. It’s used to determine cost-of-living increases in people’s pay and pensions, as well as government benefits, such as old age security.

For years, however, some economists outside Statistics Canada have argued the consumer price index’s measure of inflation overestimates what’s happening – concerns that echo a longstanding debate in other countries, such as the United States.

Statistics Canada acknowledges that one kind of bias that creeps into consumer price tracking can add as much as 0.2 percentage points to the consumer-price-index measure of inflation – meaning that when inflation is measured at 2 per cent, the true rate would be 1.8 per cent.

The agency is more than 18 months into the CPI Enhancement Initiative, which attempts to improve the precision of its work. Statscan received extra funding to tackle the “measurement bias” – cash that rises to as much as $15-million in the fifth year of the effort – and make the index more attuned to Canadians’ spending habits.

The effort is under way as the Harper Conservatives try to squeeze savings out of government and trim expenses in order to balance the budget by 2015-16.

If Statscan is successful in reducing overestimation of consumer price inflation, then annual increases in public or private wages and pensions indexed to the CPI will end up smaller than they would have been.

This could mean companies have to pay out less in annual wage increases, but it will also offer some cost savings for Ottawa, economist and former Finance Canada official Don Drummond notes.

For instance, the federal government spends about $36-billion annually on old-age-security benefit payments and increases in the program are linked to the CPI index.

If Statistics Canada removes 0.2 percentage points of over-estimation in the inflation rate, then the annual cost-of-living rate increase for old-age security will be that much lower.

It would mean more than $72-million in savings the first year, and the benefits of the freed-up cash would accumulate annually – meaning its value would grow to $144-million in the second year and $216-million in the third.

While Canadians might complain about a reduction in the growth of their paycheques or pension payouts, Mr. Drummond said, they’re just losing what was never theirs: “You were being compensated for some inflation that never occurred.”

Some economists outside Statistics Canada talk of a much bigger over-estimation. A Bank of Canada economist estimated in 2005 that several kinds of “measurement bias” adds as much as 0.6 percentage points to the consumer-price-index reading of inflation – meaning that when inflation is measured at 2 per cent, the true rate would be 1.4 per cent.

Statistics Canada isn’t willing to embrace this economist’s estimate, but there’s a lot riding on producing a better gauge of consumer price inflation.

The Bank of Canada watches changes in the consumer price index to help decide whether it needs to take action to keep inflation on target. The amount of income Canadians are allowed to earn tax- free rises in connection with the index.

“We really need this measure to be as precise as it’s possible to be,” chief statistician Wayne Smith said in a recent interview.

Statistics Canada says it’s not concerned with how their fine-tuning might affect cost-of-living increases in wages or benefits or pensions. “We’re just trying to produce the most accurate statistic,” Richard Evans, director of Statscan’s consumer-prices division, said in an interview.

Statscan cautions that it does not expect to remove all the measurement bias in its readings.

Statistics Canada monitors the prices of a “basket” of about 600 goods and services purchased by consumers to keep track of increases in the consumer price index.

The main cause of measurement bias is the failure to change the makeup and weighting of items in the “basket” quickly enough to reflect shifting spending behaviour.

“In effect, we end up giving too much importance to the things whose prices are rising and not enough to the things whose prices are dropping,” Mr. Evans said.

Statistics Canada is switching gears to be more nimble, just as its counterparts in other countries have done as they struggle with the same measurement challenges.

It’s moving from updating and adjusting the basket of consumer goods and services every two years instead of every four years. The agency will eventually shift to revising it every year.

< http://www.theglobeandmail.com/news/politics/cpi-retooling-could-result-in-big-savings-for-ottawa-business/article2335937/ >