It appears the core review of government services has collapsed with a whimper, rather than a bang. Premier Christy Clark promised the review during the 2013 election campaign.
Her reasoning was clear. Years of penny-pinching had failed to bring spending under control. Something more far-reaching was needed to create genuine breathing room.
Bill Bennett, minister of energy and mines, was given the task of carrying out a core review that would change the way his government did business. He was asked to find savings of $50 million, with everything on the table.
And the project did show promise — initially. Within a few months, the Pacific Carbon Trust and the Provincial Capital Commission had been dissolved, for a combined saving of $6 million. Their work was reassigned to government ministries.
And the consulting firm Ernst & Young was commissioned to review public-sector compensation.
But after that, no additional economies were announced, and the review was terminated at the end of 2014 without a final report being issued.
So how much of the $50 million did Bennett actually find? As best we can determine, just under half — $24 million. Most of that ($18 million) was produced by managing cash more effectively, a sensible measure, but hardly earth-shaking.
Bennett’s staff did give us a list of two additional economies, worth $27 million, which they say brings the total to $51 million. But there are serious problems with this list.
The larger of the two savings — $22 million — comes from a successful effort to lower generic drug prices. However, that initiative began long before the core review was set up.
The Health Ministry announced in February 2012 that its existing generic drug agreement had been cancelled and legislation was being drafted to set a lower price. That’s how the $22 million was found. It had nothing to do with the core review.
In addition, the remaining $5 million was supposedly saved by letting post-secondary institutions charge tuition fees for adult basic education. But that’s not a saving, it’s a fee increase.
What are we to make of this? The provincial government will spend $47 billion this year. A $50-million savings target is just 0.001 per cent of that sum. And it couldn’t be met?
There are two possible explanations. First, we’ve had six or seven zero-growth budgets in a row. Yet the demand for government services is constantly increasing as our population expands and grows old.
Those needs had to be met somehow, and most of the money came from ransacking ministry cupboards. The low-hanging fruit had already been picked.
Yet Bennett knew that. Indeed, it’s why the core review was established.
The second possibility is that for all the brave talk, Bennett and Clark lacked the willpower to follow through. For there were numerous options to consider.
The Ernst & Young study, for example, showed that municipal salaries have increased much faster than inflation. Why not pressure local governments to reconsider their compensation model, if necessary by withholding transfer payments?
Our court system, with its ever-lengthening trial delays, badly needs an overhaul. And why are government agencies in the business of selling liquor, running casinos and operating a car-insurance program?
Changes on this scale, of course, would upset a lot of apple carts. But wasn’t that clear from the outset?
As things stand, the only remaining option is to continue with penny-pinching, and that indeed is what the 2016 budget promised. Yet we’ve been doing this for close to a decade now, and the results are painfully obvious. Critical services such as child care, public schools and post-secondary education are all showing signs of chronic underfunding.
We do need fundamental changes. Unfortunately, the core review didn’t produce them.
