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A SNA-fu in the North

The formula I use for this column is simple: take an issue relevant for Northern Ontario, add some real economics, and try to make it entertaining. Unfortunately, I want to talk regional accounting.
David Robinson, Economist, Laurentian University,

The formula I use for this column is simple: take an issue relevant for Northern Ontario, add some real economics, and try to make it entertaining.

Unfortunately, I want to talk regional accounting. Regional accounting is actually important for the North. Regional accounting involves real economics. Regional accounting is also deadly dull.

Fortunately, regional accounting is a mythical beast in Northern Ontario. Mythical beasts are exotic, mysterious, sexy, and maybe even a bit entertaining.

Regional accounts have been successfully introduced in Prince Edward Island and in Nunavut.

They even have them in southern Ontario, but they never come north of the French River.

A properly harnessed System of Regional Accounts is a real beast of burden for managing the economy.

It is actually impossible to run a country, province or a region without good economic data, and regional accounts are the minimum you can make do with.

Naturally, all the sensible Northern politicians promise to bring home a System of Northern Accounts for us. For the entertaining part of the column, I’ll call it a “SNA-fu.”

We are talking about very old information technology here. Somewhere around the middle of the 20th century, governments created national accounts to keep track of production, income and investment. Before long, almost everyone knew at least a little bit about Gross National Product (GDP), and every policymaker with more than two marbles to play with could talk about trade deficits, economic stimulus and GDP growth.

The newer European system of national and regional accounts (ESA 1995) makes it possible to describe the total economy of a region, country or group of countries, its components and its relations with other total economies.

Without regional accounts like this, most of the wealth coming from Northern Ontario mines, for example, could appear as taxes and profits in southern Ontario and no one would know!

Senior governments could be sucking the region dry and even they wouldn’t know!

Without regional accounts there is no way to tell if the province and the federal government are spending as much in the North as they take out in taxes.

Maybe the south is subsidizing Northern Ontario. Maybe the North is still subsidizing the south.

I am almost 100 per cent sure that Michael Gravelle, the minister of Northern development and mines, doesn’t know.

Perhaps other northern MPPs, like Sarah Campbell or John Vanthof, should ask him.

We in the North depend on resources, so the SNA-fu would have to include natural resource accounts. The old national systems were designed mainly to keep track of what is bought and sold so that the government could collect taxes efficiently.

They ignored the environment and natural resources depletion. A system for the North would have to take lessons from the European “green” accounts as well as their new system of regional accounts. Prince Edward Island, with a population one fifth as large as Northern Ontario’s, already has regional accounts.

It also has its own Bureau of Statistics and it produces an annual statistical review that is roughly 113 times better than the data published for the Northern Growth Plan.

The Yukon, Nunavut, and the Northwest Territories together, with a total population smaller than PEI, each have their own regional accounts.

Northern Ontario is obviously very special – our cabinet members don’t need a SNA-fu to govern the region effectively.

Not that we could tell how effective they are without a SNA-fu.

Our bureaucrats have told some of our politicians that a SNA-fu is too costly and too hard to produce. The truth is that, based on existing data sources, developing the SNA-fu would be fairly cheap and fairly easy.

The Conference Board of Canada and the Centre for Spatial Economics, not to mention the forecasting firm Infometrica, all have the capacity to design a system. Anyone already living in the 21st century, like retired Research In Motion researchers or WikiLeaks founder Julian Assange, could probably do it.

The problem is politics. Northern politicians don’t know they need a SNA-fu, southern politicians don’t want to find out what the accounts would show, and the ministry staff don’t know how to do it.

But the North needs a SNA-fu, Mr. Gravelle. Make it so.