Strategic Thoughts

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Feb 28, 2002

Two Progress Boards

The BC Progress Board duplicates the work that government is required to do in order to comply with the Budget Transparency and Accountability Act. That raises the question of what is the real purpose for the Board. Is it a payoff to certain supporters or does a government bent on eliminating waste really think it is necessary to duplicate performance monitoring?

The BC Progress Board's first report looks very similar to some the BC Business Summit's work. In fact, a key report on the Summit's website (pdf) was prepared by CCG Consulting Group Ltd. That consulting firm is also credited for some of the material in Chapter 2 (pages 3-6) of the Progress Board's report. Data in the BC Progress Board's report are presented in a thorough and competent manner, but with a definite bias with respect to which indicators are used and which are not.

Some critics might say the business-only appointments to the Board virtually assured it would become BC Business Summit Phase 2. That image is not helped by rhetoric throughout the report that constantly refers to the 1990s. Was that the logical basis for comparison or is it used as a proxy for the NDP? Perhaps the $350,000 per year that the Campbell government is giving to the Progress Board ought to be paid by the BC Liberal Party. That is more than the budget for the audio books for the blind program that the government is cutting!

Partisan or not, the Progress Board will be regularly pumping out reports at public expense so it warrants some attention. The Board's website proclaims:

"The BC Progress Board has a basic philosophy underlying the task of benchmarking BC's performance ... "What Gets Measured Gets Done"!"

That proclamation is probably true, and hence it becomes important to closely examine both what does and what does not get measured by the Board.

The BC Progress Board has focused on 6 of what it calls "core targets" as well as on 20 performance indicators. Of the 26 measurements picked by the BC Progress Board, 16 are identified by it as measures of economic performance. By comparison, the Oregon Progress Board measures 90 indicators of which 17 focus on the economy. Oregon divides its indicators into 7 topic areas: economy, education, civic engagement, social support, public safety, community development, and environment.

Differences between BC's and Oregon's indicators are explained in part by differences in goals. Oregon's Board says "economy benchmarks track progress toward achieving Oregon's first goal: quality jobs for all Oregonians". The BC Progress Board says it has "identified one overriding economic goal to guide our work going forward: Make BC an economic leader in Canada by 2010." Citizens come in second when the BC Board says "Although economic prosperity is the Progress Board's primary concern, Board members recognize that non-economic goals also matter. Citizens of BC also want a clean environment, a healthy population, and participation by as broad a cross-section of the population as possible in the fruits of economic growth."

The Oregon Board talks about a circle of prosperity where "A clean, appealing environment, a talented workforce, and responsive public services will attract and find a base for diverse, value-adding industries that provide well-paying jobs." The BC Board seems to cut that circle as it puts social and environmental concerns at the end of an economic chain.

The measures or indicators chosen by the two boards reflect the different attitudes. The BC Board looks at real disposable income per capita and average hourly earnings. The Oregon Board looks at income per capita, income per worker, income disparity, and percentage of workers at or above 150% of the poverty level. Oregon measures income disparity by looking at the ratio of average incomes of the highest 20% of families to lowest 20% of families. The BC Board included one measure of poverty, the percentage of families below Statistics Canada's low income cutoff; however, it included that measure not as an economic indicator but as an indicator of social conditions. The Oregon approach would appear to say that the economy is not performing if measures of inequality and poverty do not show improvement.

The Oregon Board reports on Worker Compensation costs. They note " Oregon is now a national leader, having lowered employer costs, raised worker benefits, and maintained falling injury, illness and fatality rates. In the future, this benchmark will rank Oregon against other states for overall costs associated with labor, energy and taxes. This is a more accurate reflection of the total cost of doing business in Oregon."

The Oregon Progress Board was created in 1989 to guide the state's strategic plan. After 13 years they are just now looking at adding more benchmarks that measure the cost of doing business in Oregon. Perhaps that is because their goals are so people oriented. They have a board and a process that has received all party support in their state's legislature. By contrast, the BC Board is narrow in composition and narrow in focus.

In contrast to Oregon, the BC Board has chosen in its first report to measure unit labour costs, the per capita tax burden and the top marginal tax rate. On page 26 of the BC report average hourly earnings is described as "a useful measure of individual prosperity", but on page 27 the real purpose for selecting hourly earnings as an indicator is made clear:

"From the point of view of workers, a higher wage rate in an area, other things being equal including the area's cost of living, suggests a better place to work. In the case of employers, other things being equal including labour productivity, a higher wage rate suggests a relatively high cost for doing business. The indicator is computed and ranked from the employer's point of view."

Most would have to say the employer's point of view is very well represented not only on the BC Progress Board but at the Cabinet table.

Judging by remarks in the Campbell government's Strategic Plan, some confusion exists between statutory requirements and the role of the Progress Board. In Oregon, legislation establishes the Oregon Progress Board and its mandate. In BC, legislative requirements are in BC's Budget Transparency and Accountability Act.

The BC Progress Board is a group of political appointments by the Premier. In contrast, BC's legislative requirements are the products of years of work by the former Auditor General to see that objective targets are put in place for measuring government performance. It will be interesting to monitor future reports of the BC Progress Board. The Board's role should not be confused with the reporting requirements of the Budget Transparency and Accountability Act.

 

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