Alberta Premier Danielle Smith ranked the highest in a new provincial report card on fiscal management, while British Columbia Premiers David Eby and Newfoundland’s Andrew Furey ranked the lowest.
The Fraser Institute report graded each premier’s economic oversight in the fiscal year of 2023/ 2024 on their relative budgetary performance. The study measured the rankings based on government spending, taxes, debt and deficits from the start of their tenure to the end of that fiscal year.
It measured program spending by analyzing total provincial spending while subtracting the tax dollars used to pay interest on the government’s accumulated debt.
To measure a province’s performance in keeping tax rates competitive, the authors of the study focused on both corporate income tax and personal taxes. The report looked at both the province’s general corporate income tax rate in that fiscal year and the average annual change in that tax rate during the premier’s tenure.
To measure fiscal management of personal tax rates, the Fraser Institute used eight measures, including marginal tax rates on individual income and the annual change of those rates during the premier’s tenure. The top marginal tax rate in effect during that year and the number of tax brackets in each province were also measured.
The two premiers who ranked the highest, New Brunswick’s Blaine Higgs and Manitoba’s Heather Stefanson, are no longer sitting as premiers but were included due to their governments tabling the budgets for that year.
The data showed that Higgs had the best record among current and former premiers at managing his province’s finances, while Furey had the worst record after considering the three measures of fiscal performance.
Furrey ranked last in tax rates out of all the provinces and ninth out of 10 for deficits and debt, while his government spending levels were middle of the pack among provinces.
To judge relative deficit and debt spending performance, the report evaluates the premier’s use of deficit financing for government spending and whether they reduced their province’s debt burden. It looked at the average annual deficit or surplus as a percentage of GDP and the percentage change of this measure throughout each premier’s tenure.
However, Smith ranked number one among those still sitting and received an overall grade of 63.7 out of 100. Her government did the best in keeping personal and income taxes low, scoring an over 80 point grade for taxes while scoring 100 and ranking the best at managing her province’s deficits and debt.
“Premier Danielle Smith of Alberta ranks the best among current premiers primarily due to maintaining relatively low tax rates and running budget surpluses during her tenure,” Jake Fuss, the Director of Fiscal Studies at the Fraser Institute, told True North.
Despite ranking first among premiers overall due to her management of the debt and Alberta’s tax rates, Smith ranked the worst in terms of government spending in relation to the provinces’ GDP.
Eby ranked ninth among the ten premiers in fiscal management. According to the study, Eby scored the worst out of the premiers on his management of the province’s debts and deficits, scoring a 3.1 out of 100 mark.
Despite this, Eby ranked first in his record on government spending and taxes, though Fuss explained that this is due to his brief stint as premier of the province compared to other premiers.
“While he scores well on government spending, this is an anomaly since there is only one year of data to evaluate him on and B.C.’s spending in subsequent years is expected to climb dramatically,” Fuss said. “Premier Eby scored last on deficits and debt due to the size of B.C.’s deficit and his record on debt accumulation.”
After Canada’s Atlantic provinces, Quebec Premier Francois Legault was ranked the next worst premier for the fiscal year 2023/ 2024. Though he scored middle of the pack in overall rankings, Quebec’s government spending ranked the second worst in the country.
Ontario Premier Doug Ford was ranked the second highest overall for fiscal management though he ranked seventh for deficit and debt management and sixth in terms of his government’s management of tax rates.
According to Fuss, economic success and responsible fiscal management “go hand in hand.”
“To adopt prudent fiscal policy, governments must restrain spending, work intentionally to balance budgets, and avoid substantial tax burdens that harm economic activity,” he said. “These fiscal fundamentals lay the best foundation for an economy to grow and people to prosper.”
