Government waste and mismanagement cost taxpayers at least $197 billion since 1988: report

Andy Radia
October 31, 2013

It's sort of apropos that, in the midst of the ongoing Senate expense scandal, the Fraser Institute released their latest report about government waste and mismanagement.

The policy think-tank's study, titled Federal Government Failure in Canada, is a good reminder for all of us that while we collectively fret about $90,000 in inappropriate expenses claims, we should probably be paying more attention to the costly decisions made by our MPs and senior bureaucrats.

The report's authors examined Auditor General reports from 1988 to 2013 and identified 614 failed programs and initiatives costing Canadian taxpayers between $158 billion and $197 billion.

"The study covers a fairly long period with five prime ministers from two different political parties. 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," Charles Lammam, lead author of the study, said in a press release accompanying the report.

"Many people continue to look to government to solve new problems in society. But as the Auditor General reports illustrate, government can’t be counted on to deliver a range of tasks—whether it’s basic things like accurately issuing cheques or managing credit cards, or whether it’s more complex activities like major procurement projects, economic development initiatives or helping low-income Canadians."

Here are just a couple of the many examples highlighted in the report released on Thursday:

Bilateral Economic and Social Development Programs (1993)

The Auditor General noted that the Canadian International Development Agency’s development aid often went to areas of industry in developing countries that had little or no effect on the poorest citizens, who were the main targets of aid. For example, a large part of the $1.3 billion given to Pakistan in relief through the 1980s had gone to state-owned infrastructure projects in rail transportation and energy rather than directly to Pakistan’s poorest people.

Satellite Communications (2002)

The Department of National Defence (DND) took eight years to develop a $174 million satellite communications system. When the system was completed, DND determined that the commercial system it had been using was sufficient to meet existing needs and required fewer staff to operate. In addition, the new military satellite communications system would require an extra $15 million to meet current operational standards. The system remains in storage.

The report also includes highly publicized flubs such as the Sponsorship scandal, the F-35 fiasco and the infamous G-8 legacy fund.

The full list of blunders can be seen here.

[ Related: Canadians rank Senate expense scandal as more “serious” than Liberal sponsorship scandal: poll ]

The Fraser Institute report is a good compliment to the Canadian Taxpayers Federations' annual Teddy Waste Awards which are awarded in March.

One of the federal nominees last year was Agri-Food Canada who invested $5 million in a hemp processing company in Waskada Manitoba. Unfortunately, the federal government didn't do their due diligence — the company went bust within 9 months of receiving the millions in taxpayer dollars.

[ Related: Ontario premier defends $500k subsidy to secure 2016 NBA all-star game ]

And that's only the federal government's boondoggles.

Last week, the National Citizens Coalition launched a campaign chiding the Ontario government for a multi-million dollar air ambulance scandal, the $1 billion gas plant closure fiasco and a $1.5 billion E-health scandal.

Ahhh, our tax dollars at work.

[ More Political Points: Is Stephen Harper throwing Nigel Wright under the bus? ]

It seems everywhere we look — at every level of government with all political stripes — there is widespread waste and mismanagement.

Is there a solution? More oversight? Better politicians? More skilled bureaucrats?

The Fraser Institute suggests that sometimes governments just aren't very effective "vehicles" for "accomplishing outcomes" because politicians and bureaucrats have motivations not necessarily conducive to successful programs.

Politicians, notes the report, "are assumed to be vote-maximizers, interested in gaining election or re-election, while bureaucrats are assumed to prefer job security, larger budgets, and more power and influence."

Lammam argues that — in some instances — governments need to contract out, privatize or simply cede the activity.

"The over 600 cases of government failure examined in our study clearly demonstrate the limitations of government," Lammam said.

"As Canadian taxpayers, we need to think more critically about what tasks governments can and can’t do well, and how to harness the strengths of the private

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