Ronald D. Kneebone

Electoral and Partisan Cycles in Fiscal Policy: An Examination of Canadian Provinces

This paper examines the fiscal policy choices of Canadian provincial governments in the context of partisan and opportunistic cycles. We identify an electoral cycle in which the predilection of provincial governments of all political stripes to increase taxes is temporarily halted in election years. Opportunistic responses in spending are also present. Spending in highly visible areas (schools, roads and hockey rinks) tends to increase in election years. Partisan responses are largely absent from revenues but appear more frequently in program spending choices. Thus, Canadian political parties tend to favour differentiating amongst themselves via their spending, as opposed to their revenue, choices.

Fiscal Retrenchment and Social Assistance in Canada

Le point de départ de cet article est la convergence d’événements qui, au milieu des années 1990, ont amené certains gouvernements provinciaux du Canada à revoir leurs programmes d’aide sociale. Trois provinces en particulier – l’Alberta, la Colombie-Britannique et l’Ontario –, ont alors décidé de modifier de façon importante les procédures administratives qui permettent aux demandeurs d’avoir accès à des prestations d’aide sociale – et de les conserver. Nous établissons les effets qu’ont eus la conjoncture économique, les réductions de l’aide sociale et ces nouvelles procédures administratives sur les Canadiens bénéficiant de l’aide sociale.

Minding the public purse : the fiscal crisis, political trade-offs, and Canada's future

MacKinnons tenure as minister of finance coincided with a period of fiscal crisis in Saskatchewan. Two Progressive Conservative governments under Grant Devine had from 1982 to 1991 accumulated large amounts of debt and had committed the Government of Saskatchewan to participating in several expensive and risky megaprojects. In conjunction with a sluggish economy these factors combined to seriously stress the finances of the province. By 1993, the provinces credit rating was such that it was no longer able to borrow money in Canada and had to go cap-in-hand to the money market in New York. Add to this mix the need to cut tax rates in response to tax competition from Alberta, cuts to federal transfers, and the dumping on the province of responsibility for certain social programs by the federal government, and Saskatchewan was facing a full-blown fiscal crisis. By 1993 members of the Cabinet were even debating the possibility of defaulting on provincial debt. This book is a candid account of MacKinnons experiences during this turbulent time. As minister of finance, she was at the eye of the fiscal hurricane and she was the person most responsible for determining whether the provincial governments finances would collapse or recover. They recovered.

Deficits and Debt in Canada: Some Lessons from Recent History

This paper reviews the recent history of federal and provincial deficits and debt in Canada with the purpose of investigating whether rules of behaviour need to be imposed on fiscal authorities as a way of controlling the growth of these deficits and debt. The evidence suggests that the need for rules governing provincial fiscal behaviour is weak because financial markets already impose such rules and that they have been effective at controlling provincial budgetary choices. Financial markets fail to impose similar rules at the federal level due to a lack of credibility regarding the Bank of Canadas policy of not monetizing federal debt.

A Case of Institutional Endogeneity? A study of the Budgetary Reforms of the Government of Alberta, Canada

We undertake a case study of the budgetary reforms implemented in 1993 in the province of Alberta, Canada. Canadian provinces operate under political and institutional regimes which differ from those of US states but which closely resemble those member states of the proposed EMU. We examine the response of the government of Alberta to exogenous shocks to its revenues and expenditures during the 1966/67 to 1992/93.