Alberta Tops Fiscal Performance Index

Contact:

Michael Walker, Executive Director
The Fraser Institute, (604) 714-4545 Email: michaelw@fraserinstitute.ca

Release Date: 23 March 1999

VANCOUVER, BC>>>  Alberta tops the rankings for the third consecutive time in the Fiscal Performance Index 1999, a ranking of the Canadian provinces and forty-six American states, released today by The Fraser Institute.

Published every two years, the institute’s Fiscal Performance Index measures the performance of the Canadian Provinces and the US states using fourteen variables that reflect changes in spending, changes in government revenue, and changes in the structure of taxation (see Table 1).

"The purpose of the Index is to provide Canadians with information about how their own provincial government taxes and spends their money relative to how other North American jurisdictions spend and tax," says Fraser Institute Executive Director, Michael Walker.

Alberta out-performed all the provinces and the forty-six states that were ranked on the Fiscal Performance Index to end up on top for the third consecutive time. Strong spending control yielded the highest possible score of 100 on the spending index. Deficit elimination, income tax rate cuts, holding the line on other tax rate hikes, and decreases in revenue relative to personal income put Alberta seventh overall on the tax and revenue tables.

On the other end of the spectrum, British Columbia has the distinction of holding the last spot on the tax and revenue ranking, the 2nd spot on the spending ranking , and having the third worst fiscal performance in North America.

The provinces that have had the most success in eliminating and even reversing large deficits (Alberta, Saskatchewan, and Ontario) performed the best on the spending index. In general, the majority of the provinces performed well on the spending index; seven are in the top half of the rankings. This is due to recent spending restraint in Canada, in combination with the fact that many US states have recently eased their spending restraint.

However, the provinces did not perform as well on the tax and revenue rankings due to the fact that several states cut tax rates, and a few increased them, while six provinces cut some tax rates, and seven of them increased them.

This is the first time since The Fraser Institute’s Fiscal Performance ranking began that more than half of the provinces received a score of over 50 out of 100 (fifty is a passing score). Only New Brunswick and British Columbia failed.

The method of constructing this index is taken from a US study, conducted by the renowned Cato Institute, of the fiscal performance of forty-six American governors. Cato data on the states is added to the Fraser Institute data on the provinces and the rankings are re-tabulated.

The Fiscal Performance Index is part of The Fraser Institute’s on-going program of assessing the tax and expenditure behaviour of governments in Canada. The Index will be followed up later this year by a province-to-province set of rankings that takes into consideration such variables as debt measures and local government spending.

Table 1: Overall Performance Among the Provinces and States

Established in 1974, The Fraser Institute is an independent public policy organization based in Vancouver.

For further information, or for a copy of Fiscal Performance Index 1999, contact:

Suzanne Walters, Director of Communications,
The Fraser Institute, (604) 714-4582,
Email suzannew@fraserinstitute.ca

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