Don’t let Canada be jailed for debt

Posted on February 17, 2011 in Governance Debates

Source: — Authors: – news/opinions/editorials
Published Thursday, February 17, 2011.

It would be a shame if the double-barrelled warning from Kevin Page, the Parliamentary Budget Officer, were to get lost in the crush of a fast-paced news agenda.

Parliament, he says, is failing to live up to its basic responsibilities, because it doesn’t know what the financial implications are of the government’s many crime bills.

“There is genuine concern that Parliament is losing control of its fiduciary responsibilities of approving financial authorities of public monies as afforded in the Constitution,” he told the House finance committee this week. “In the recent past, Parliament was asked to approve changes to crime legislation without financial information or knowledge of monies set aside in the fiscal framework.”

As if that were not serious enough, he warns – in a separate point – that the Canadian economic miracle is unsustainable. Our society is getting older. In 1971, there were 7.8 people of “working age” for every one over 65; in 2008, that ratio fell to 5.1, and expected to drop at a fast clip, to 3.8 in 2019 and 2.5 in 2033. And productivity growth is getting weaker. It grew 2.6 per cent a year from 1962 to1976; 1.2 per cent a year from 1976 on; and just 0.8 per cent since 2000.

Although they are separate points, it is important to understand the financial problem posed by the crime bills in the context of the long-term fiscal sustainability problem.

Canada needs to focus its energies, and money, on raising productivity, which will require, among other things, greater attention to research and development and to producing a more educated population. To the extent Canada allows for untrammelled (and unnecessary) growth of the prisons, it will have less money available to invest in people and productivity.

Mr. Page told the committee he does not accept the government’s contention that the costs are a “cabinet confidence.” “I think if Parliament wants access to information… whether it’s crime or something else, that they should receive access before they approve financial authorities.”

Canada may be facing an enormous jump in prison costs, just when it can least afford it. Mr. Page’s strong warnings deserve wide dissemination.

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