PLANT

Government waste cost taxpayers as much as $197B since 1988

Fraser Institute study identifies systemic problem: 614 instances of mismanagement .


The Fraser Institute showcases 25 years of wasted government spending.

VANCOUVER — It appears over the past 25 years Canada’s federal governments have been sloppy spenders, costing taxpayers as much as $197 billion, according to a study by the Fraser Institute.

The public policy think tank with offices across Canada estimates federal government waste and mismanagement identifies 614 instances of cost overruns, unnecessary spending, inefficiencies, inaccurate reporting of financial information, and other failures in federal programs and initiatives that have cost taxpayers between $158 billion and $197 billion.

“While there’s a tendency to blame the government of the day for mismanagement and failure, the reality is that government failure is a systemic problem,” said Charles Lammam, Fraser Institute resident scholar in economic policy and lead author of the study.

Federal Government Failure in Canada: 2013 Edition examines Auditor General reports from 1988 to 2013 notes the true cost is likely much higher, since the estimate excludes the cost of 235 failures (or 38% of the total examined) where the Auditor General did not provide enough information to calculate a cost. It also excludes potential failures in programs and initiatives that the Auditor General did not review.

Here are some examples:

• Icebreaker modernization (1990). A $125 million project to modernize a major Canadian Coast Guard icebreaker ended up costing $74 million more than planned but the Auditor General concluded the entire modernization was a “major capital expenditure not based on a demonstrated need.”

• Tradespeople productivity (1994). The productivity of tradespeople within the Department of National Defence was approximately 33% lower than comparable commercial tradespeople, resulting in additional costs of $50 million a year.

• Regional economic development programs (1995). Industry Canada sponsored the construction of a new $2.2 million fish plant in Quebec, but the more than 250 jobs created were completely offset by the resulting closure of a nearby established plant that also received federal subsidies.

• Credit cards for public servants (1997). Balances on public servant credit cards were not paid on time and resulted in $80,000 in unnecessary interest costs over the span of just four months.

• Office space (2000). Public Works and Atlantic Canada Opportunities contracted office space in Sydney, NS that was twice as large as similar offices and cost 20% to 30% more than alternatives of superior quality. The facility was never used for its intended purpose and at most, two federal employees were located at the site.

• Heating expense relief (2001). Less than a quarter of the $1.5 billion spent to assist low-income families facing emergency heating costs actually went to low income families and roughly 90,000 Canadians who were in need of immediate assistance did not receive relief.

• Satellite communications (2002). The Department of National Defence took eight years to develop a $174 million satellite communications system but later determined that the commercial system it had been using was sufficient to meet existing needs and required fewer staff to operate.

• Foreign aid (2005). The Canada International Development Agency spent $69 million intended for tsunami relief in Southern Asia on non-tsunami related activities in the 2004/05 fiscal year.

• Staff overtime (2008). Staff overtime costs at Corrections Canada rose 42% between 2002/03 and 2007/08 although the number of corrections officers, inmates, and violent incidents remained constant over that time. The Auditor General cited unrecorded leave (between 3% and 35% of staff absences) was as a main cause.

• Security screening visa applications (2011). Canada Border Services Agency (CBSA) failed to properly conduct security screenings for permanent residence visa applications. Eighty per cent of reviewed security screenings did not include all the mandatory security checks.

• Public security and anti-terrorism initiative (2013). The Auditor General could not determine how $3.1 billion had been allocated over the previous decade for the $12.9 billion Public Security and Anti-Terrorism Initiative.

Click here for a copy of the report.