Public Policy Sources #39:
Jurisdiction Analysis
This section focuses on each jurisdiction's performance.
Federal Government
| Federal Government | Score | Rank |
|---|---|---|
| Budget Performance | 53.9 | 3 |
| Spending | 100.0 | 1 |
| Tax Rates & Revenue | 31.8 | 11 |
| Debt & Deficit | 29.8 | 9 |
The federal government received an overall score of 53.9 for a rank of 3rd on the strength of spending cuts offset by poor scores on tax rates and revenue and debt and deficit.
Spending
The federal government cut spending between 1994/95 and 1999/00 while the provinces as a whole increased spending. Federal spending cuts coupled with steady population growth and strong GDP and personal income growth explain why the federal government scores so well on the Spending sub-index. Federal government spending scores are also helped by the fact that transfers to the provinces are included as federal spending, although this factor alone does not affect its spending sub-index rank.
Tax rates and revenue
The federal government received a score of 31.8 and the bottom rank on the Tax Rates and Revenue sub-index because of a relatively small drop in personal income tax, no changes to other tax rates, high marginal personal and corporate income tax rates, and strong growth in revenue as a percent of GDP.
Debt and deficit
The federal government scored 29.8 for a rank of 9th on the Debt and Deficit sub-index because it had an overall deficit as well as increased debt over the respective study periods. The only variable which shows improvement is debt as a percent of GDP.
British Columbia
| British Columbia | Score | Rank |
|---|---|---|
| Budget Performance | 41.7 | 8 |
| Spending | 28.2 | 8 |
| Tax Rates & Revenue | 58.9 | 5 |
| Debt & Deficit | 38.0 | 8 |
British Columbia received an overall score of 41.7 for a rank of 8th. Its best showing was 5th on the Tax Rate and Revenue sub-index because of personal income tax cuts, a relatively low reliance on federal transfers, and no growth in revenue as a percent of GDP.
Spending
British Columbia received a score of 28.2 to rank 8th on the Spending sub-index. The poor showing is the result of relatively small decreases in spending relative to GDP and personal income, and a high spending-to-GDP ratio.
Tax rates and revenue
British Columbia scored 58.9 for the 5th rank on the Tax Rates and Revenue sub-index because of personal income tax cuts, a relatively low reliance on federal transfers, and no growth in revenue as a percent of GDP.
Debt and deficit
British Columbia received a score of 38.0 and 8th rank on the Debt and Deficit sub-index because it is one of six jurisdictions that had an overall deficit, and is one of five jurisdictions with an increase in debt per capita. Of the two jurisdictions that experienced an increase in its debt-to-GDP ratio, BC's was the higher.
Alberta
| Alberta | Score | Rank |
|---|---|---|
| Budget Performance | 74.3 | 1 |
| Spending | 44.9 | 4 |
| Tax Rates & Revenue | 77.9 | 1 |
| Debt & Deficit | 100.0 | 1 |
Alberta received the top overall score of 74.3 and the top rank. Alberta ranked first on the Tax Rate and Revenue sub-index and the Debt and Deficit sub-index; their only weakness was the 4th place rank on spending due mainly to the increases in spending over the last three years, especially the large increase in 1999/00.
Spending
Alberta received a score of 44.9 to rank 4th on the Spending sub-index. This is the only sub-index that Alberta did not dominate. Its rank reflects increased spending per capita and relatively small declines in spending as a percent of GDP and personal income.
Tax rates and revenue
Alberta scored 77.9 for the top rank on the Tax Rates and Revenue sub-index because of small personal income tax cuts, the absence of a sales tax, the lowest top marginal tax rate and tax-to-GDP ratio in the country, and the least reliance of all the jurisdictions on federal transfers.
Debt and deficit
Alberta received a perfect score of 100 and top rank on the Debt and Deficit sub-index because it did not have a single deficit year, decreased debt by almost $3,000 per person, and all but eliminated its net debt.
Saskatchewan
| Saskatchewan | Score | Rank |
|---|---|---|
| Budget Performance | 51.2 | 5 |
| Spending | 22.3 | 9 |
| Tax Rates & Revenue | 60.6 | 4 |
| Debt & Deficit | 70.5 | 2 |
Saskatchewan received an overall score of 51.2 for a rank of 5th based on a good rank for debt and deficits, a moderate rank on tax rates and revenues, and a relatively poor showing on spending.
Spending
Saskatchewan received a score of 22.3 to rank 9th on the Spending sub-index. The poor showing is the result of small increases in spending per capita, small decreases in spending as a percent of GDP and personal income, and a high spending-to-GDP ratio.
Tax rates and revenue
Saskatchewan scored 60.6 for the 4th rank on the Tax Rates and Revenue sub-index because of its growth in tax revenue as a percent of GDP, the small cuts to the personal income tax structure, and high top marginal tax rate. One positive area for Saskatchewan is its significant cut to the sales tax rate.
Debt and deficit
Saskatchewan received a score of 70.5 and 2nd rank on the Debt and Deficit sub-index because it is one of five jurisdictions that posted a surplus for the period of the study and managed a reduction in debt per capita and debt as a percent of GDP, second only to Alberta.
Manitoba
| Manitoba | Score | Rank |
|---|---|---|
| Budget Performance | 52.4 | 4 |
| Spending | 31.4 | 7 |
| Tax Rates & Revenue | 57.8 | 6 |
| Debt & Deficit | 67.9 | 3 |
Manitoba received an overall score of 52.4 for a rank of 4th based on a third place rank for debt and deficits, and a moderate rank on both tax rates and revenue, and spending.
Spending
Manitoba received a score of 31.4 to rank 7th on the Spending sub-index. This moderate showing is the result of small increases in spending per capita, small decreases in spending as a ratio of GDP and personal income, and a high spending-to-GDP ratio.
Tax rates and revenue
Manitoba scored 57.8 for the 6th rank on the Tax Rates and Revenue sub-index because it is in the middle of the pack on tax rates, tax cuts, and tax revenue, both from federal government transfers and as a percent of GDP.
Debt and deficit
Manitoba received a score of 67.9 and 3rd rank on the Debt and Deficit sub-index because it did not have a single deficit year over the study period and managed a significant reduction in debt per capita and debt as a percent of GDP.
Ontario
| Ontario | Score | Rank |
|---|---|---|
| Budget Performance | 47.6 | 7 |
| Spending | 54.1 | 2 |
| Tax Rates & Revenue | 71.5 | 2 |
| Debt & Deficit | 17.1 | 10 |
Ontario received an overall score of 47.6 for a rank of 7th. Ontario's strong performance on spending and tax rates and revenues is significantly offset by its dismal performance on debt and deficits.
Spending
Ontario received a score of 54.1 to rank 2nd on the Spending sub-index. This strong showing is the result of decreases in per capita spending, spending relative to personal income and GDP, and a low spending-to-GDP ratio.
Tax rates and revenue
Ontario scored 71.5 for the 2nd rank on the Tax Rates and Revenue sub-index because it has cut its top marginal tax rate by almost three times that of the next best jurisdiction, has a relatively low corporate income tax rate, a low reliance on federal transfers, and has an average decrease in tax revenue as a percent of GDP.
Debt and deficit
Ontario received a score of 17.1 and 10th rank on the Debt and Deficit sub-index because it had a deficit in every year but one, added $1,461 per person in debt, and increased the debt-to-GDP ratio by 3.7 percentage points.
Quebec
| Quebec | Score | Rank |
|---|---|---|
| Budget Performance | 27.5 | 11 |
| Spending | 40.7 | 5 |
| Tax Rates & Revenue | 38.6 | 10 |
| Debt & Deficit | 3.1 | 11 |
Quebec received the lowest overall score of 27.5 and the 11th rank. Quebec's best rank was 5th on spending; it ranked second to last on tax rates and revenue, and last on debt and deficit. Where appropriate, Quebec's figures have been adjusted to factor out the federal tax abatements. These adjustments had a small positive impact on Quebec's score, but no impact on its Budget Performance Index rank.
Spending
Quebec received a score of 40.7 to rank 5th on the Spending sub-index. This, their best score on any of the three sub-indices, results from decreases in per capita spending, spending relative to personal income, and spending relative to GDP partially offset by the highest spending-to-GDP ratio in the country.
Tax rates and revenue
Quebec scored 38.6 for the 10th rank on the Tax Rates and Revenue sub-index because it has implemented one of the smallest cuts to personal income tax rates in the country, has increased the sales tax rate, and has had the second largest average increase in tax revenue as a percent of GDP.
Debt and deficit
Quebec received a score of 3.1 and the 11th rank on the Debt and Deficit sub-index because, of the six jurisdictions that had an overall deficit, theirs was the largest. Furthermore, it had the second largest increase in debt per capita, and had only a small decrease in the debt-to-GDP ratio.
New Brunswick
| New Brunswick | Score | Rank |
|---|---|---|
| Budget Performance | 56.3 | 2 |
| Spending | 52.3 | 3 |
| Tax Rates & Revenue | 62.3 | 3 |
| Debt & Deficit | 54.2 | 7 |
New Brunswick received an overall score of 56.3 and the 2nd overall rank. New Brunswick earned a third rank on both spending and tax rates and revenues, as well as a moderate rank on debt and deficits.
Spending
New Brunswick received a score of 52.3 to rank 3rd on the Spending sub-index. This strong showing is the result of relatively large decreases in per capita spending, spending relative to GDP, and spending relative to personal income.
Tax rates and revenue
New Brunswick scored 62.3 for the 3rd rank on the Tax Rates and Revenue sub-index because of personal income and sales tax cuts, the second lowest tax-to-GDP ratio in the country, and the second largest drop in tax revenue as a percent of GDP in the country.
Debt and deficit
New Brunswick received a score of 54.2 and 7th rank on the Debt and Deficit sub-index because it had an overall deficit, an increase in debt per person, and a small decrease in the debt-to-GDP ratio.
Nova Scotia
| Nova Scotia | Score | Rank |
|---|---|---|
| Budget Performance | 41.7 | 9 |
| Spending | 12.1 | 11 |
| Tax Rates & Revenue | 55.2 | 7 |
| Debt & Deficit | 57.8 | 5 |
Nova Scotia received an overall score of 41.7 and the 9th overall rank. Nova Scotia's best rank was 5th on debt and deficits; it ranked 7th on tax rates and revenues, and last on spending.
Spending
Nova Scotia received a score of 12.1 to rank last on the Spending sub-index. This poor showing is the result of increases in spending per capita and spending relative to personal income, and the smallest decrease in spending as a percent of GDP in the country.
Tax rates and revenue
Nova Scotia scored 55.2 for the 7th rank on the Tax Rates and Revenue sub-index because of small personal income tax cuts, a high reliance on federal transfers, and growth in revenue as a percent of GDP. One strong point is its decrease in sales tax because of the introduction of the HST.
Debt and deficit
Nova Scotia received a score of 57.8 and 5th rank on the Debt and Deficit sub-index because it had an overall deficit, a small decrease in debt per person, and a small decrease in the debt-to-GDP ratio.
Prince Edward Island
| Prince Edward Island | Score | Rank |
|---|---|---|
| Budget Performance | 48.8 | 6 |
| Spending | 38.7 | 6 |
| Tax Rates & Revenue | 44.0 | 9 |
| Debt & Deficit | 63.7 | 4 |
Prince Edward Island received an overall score of 48.8 and the 6th overall rank. Prince Edward Island ranked 4th on debt and deficits, 6th on spending, and 9th on tax rates and revenue.
Spending
Prince Edward Island received a score of 38.7 to rank 6th on the Spending sub-index. This moderate showing is the result of increased spending per capita, small decreases in spending relative to personal income and GDP, and a relatively low level of spending as a percent of GDP.
Tax rates and revenue
Prince Edward Island scored 44.0 for the 9th rank on the Tax Rates and Revenue sub-index. It implemented only small personal income tax cuts, it is the only province to have increased the business tax rate, it has the highest sales tax rate in the country, it has a high reliance on federal transfers, and it had only a small decrease in average annual tax revenue as a percent of GDP.
Debt and deficit
Prince Edward Island received a score of 63.7 and 4th rank on the Debt and Deficit sub-index because it is one of five jurisdictions that posted a surplus for the period of the study and it had a decrease in debt per person and in the debt-to-GDP ratio.
Newfoundland
| Newfoundland | Score | Rank |
|---|---|---|
| Budget Performance | 39.3 | 10 |
| Spending | 12.6 | 10 |
| Tax Rates & Revenue | 50.6 | 8 |
| Debt & Deficit | 54.7 | 6 |
Newfoundland received the second lowest overall score of 39.3 and the 10th rank. Newfoundland's best rank was 6th on the Debt and Deficit sub-index; it ranked 8th on tax rates and revenue, and second to last on spending.
Spending
Newfoundland received a score of 12.6 to rank 10th on the Spending sub-index. This results from the largest increase in per capita spending in the country, a moderate decrease in spending relative to GDP, an increase in spending relative to personal income, and a high level of spending relative to GDP.
Tax rates and revenue
Newfoundland scored 50.6 for the 8th rank on the Tax Rates and Revenue sub-index. It is the only province to increase personal income tax rates (by imposing a 10 percent surtax in 1996). Furthermore, it has one of the highest top marginal income tax rates, and it has a high reliance on federal transfers. A few points of strength are that Newfoundland has decreased its sales tax with the introduction of the HST, it has the lowest rate of corporate income tax, and its strong GDP growth has helped it to post the largest decline in average annual tax revenue as a percent of GDP in the country.
Debt and deficit
Newfoundland received a score of 54.7 and the 6th rank on the Debt and Deficit sub-index because although it is one of five jurisdictions that posted a surplus for the period of the study, it had only a small decrease in the debt-to-GDP ratio, and had one of the largest increases in debt per capita in the country.
info@fraserinstitute.ca
4th Floor, 1770 Burrard Street, Vancouver, BC, Canada, V6J 3G7
Tel: (604) 688-0221 Fax: (604) 688-8539 Book Orders: 1-800-665-3558 ext. 580
You can contact us at the above email address for any comments or information requests. Please report any dead links or technical problems.