The evaluation and comparison of fiscal governance across Canadian provinces is among eight research projects at the University of Saskatchewan (USask) awarded a total of $1.36 million in Insight grants by the Social Sciences and Humanities Research Council (SSHRC) of Canada.
The federal program supports research that deepens understanding of individuals and societies.
“USask’s research addresses unanswered questions about the human condition, the way we live today and our history,” said Karen Chad, Vice President Research. “These funding awards will help top researchers promote positive societal change and delve deeper into the human character.”
Haizhen Mou, of the Johnson-Shoyama Graduate School of Public Policy, has been awarded $170,715 for a three-year research project on Fiscal Governance in the Canadian Provinces. Her project will evaluate whether fiscal rules work the way they are intended in the Canadian provinces.
Beginning in the 1990s, governments in a wide variety of jurisdictions began adopting rules that would require them to meet particular fiscal targets. The most common rule requires a balanced budget within a particular timeframe, but other rules stipulate debt levels, establish savings funds, limit expenditure growth, or require referendums prior to tax increases. The effectiveness of such rules depends on their design and the fiscal governance regime in which they work.
“This study will help provinces learn from one another about fiscal governance,” said Associate Professor Mou. “Ranking the Canadian provinces on each of these fiscal governance criteria will illuminate the risks and identify practices that meet democratic norms and standards of professional management.”
With significant public service responsibilities, provincial governments exercise substantial budgetary authority and assume considerable fiscal risk.
“The ability of the provinces to manage risk is a constant concern because provincial tax bases are relatively narrow, provinces do not have access to monetary policy, and provincial economies are trade dependent,” says Mou. “Unilateral decisions by the federal government to reduce transfers, offload spending, and announce pan-Canadian programs complicate fiscal decision making at the provincial level.”
Mou’s research team, including co-investigator Michael Atkinson, will develop a set of metrics to evaluate fiscal rules, examining their stringency, clarity and transparency. The team will also interview key finance officials and politicians to further evaluate the norms that keep a ‘deficit bias’ under control.
“Fiscal governance is necessary in ensuring Canada’s continued fiscal health,” says Doug Moen, JSGS Executive Director. “The research that Haizhen and team are conducting will provide provincial governments with practical tools and frameworks needed to continue working towards a sustainable financial future.”
Few, if any, countries have provided more fiscal capacity to their sub-national governments than Canada.
“These lessons and insights will also be useful for other entities including the European Union and the United States,” says Mou. “The set of metrics and the evaluation framework we will employ can help move governance research from a high-level theoretical discussion to practical applications in related areas including, for example, environmental governance, financial regulations, the regulation of party finance, and political ethics.”
The SSHRC is the federal research funding agency that promotes and supports research and training in the humanities and social sciences.
For more information contact:
Erica Schindel, Communications and Marketing Specialist
Johnson Shoyama Graduate School of Public Policy