Smith and Ford lead Canadian premiers in fiscal performance: Fraser Institute
Danielle Smith of Alberta and Doug Ford of Ontario are leading the pack in a recent Fraser Institute report on the fiscal performance of Canadian premiers.
The principal author of the study, Jake Fuss, the director of fiscal studies for the Fraser Institute, notes that the scores and rankings are “relative measures of performance,” not absolute, with the analysis comparing the performance of each premier against their counterparts. The premiers were measured from the time they first held office until the end of 2024/25.
Fuss said top ratings were given to Smith and Ford for “being more responsible with (taxpayers’) dollars.”
The rest of the list includes in order: former N.B. premier Blaine Higgs, Saskatchewan’s Scott Moe, Quebec’s François Legault, former P.E.I. premier Dennis King, Tim Houston of Nova Scotia, David Eby in B.C., former premier of Newfoundland and Labrador Andrew Furey, and finally, Manitoba’s Wab Kinew. (Higgs, King and Furey — left office during the 2024/25 fiscal year.)
Fuss had some caveats about the two frontrunners’ performances.
“Premier Smith had the highest score overall but performs poorly on government spending as program spending has grown faster than Alberta’s economy,” he told National Post in an email. “The surpluses she has run have also been, in part, a result of relatively high resource revenues. Having said that, she performs well in the overall rankings because Alberta’s tax rates remain among the lowest in the country and Premier Smith did balance the budget and reduce debt as a share of GDP.”
Fuss said Ford may have been “relatively restrained on program spending growth in comparison to other premiers. He has, however, consistently run operating deficits except for one year during his time in office. Ford’s second overall ranking is more a result of other premiers performing quite poorly on fiscal management than him performing particularly well.”
In the “government spending” category, Ford ranked first with a score of 83.2, ahead of Eby (80.8) and Moe (69.6). He had the second smallest annual difference between program spending growth and the rate of provincial economic growth.
A premier’s performance was judged as poor if program spending was increased faster than economic growth or the combined rate of inflation plus population growth.
Four premiers failed to achieve a score above 50 in that category: Smith (47.5), Houston (46.4), Legault (41.5), and Kinew (10.9). They oversaw program spending growing significantly faster than economic growth in their provinces.
“Premier Ford has been relatively restrained on program spending growth in comparison to other premiers,” notes Fuss. “He has, however, consistently run operating deficits except for one year during his time in office. Ford’s second overall ranking is more a result of other premiers performing quite poorly on fiscal management than him performing particularly well.
When it came to the category of debt and deficits, the picture flipped for Smith and Ford. Smith ranked highest and Ford placed seventh.
The premiers were evaluated on the use of deficit financing to fund government spending and whether they increased or reduced their province’s debt burden. Premiers that recorded deficits and increased government debt performed poorly compared to those who balanced budgets and reduced provincial debt.
Premiers received a perfect score of 100.0 on the sub-section if they averaged an annual surplus over all their years in office. Three premiers have managed this feat over their tenures: Smith, Higgs and Houston. Smith has reduced Alberta’s net debt as a share of GDP by more than any other premier (13.3 per cent decrease).
Meanwhile, three premiers all failed to score above 50. Furey, Kinew, and Eby ran significant deficits and increased net debt as a share of GDP during their tenures.
The premiers were also ranked on taxes, judged by combined assessments of provincial corporate tax and personal income tax regimes.
Legault was the only premier to preside over a decrease in the corporate income tax rate. The majority of premiers left their corporate rates unchanged.
The assessment of personal income tax management looked at 2024 marginal tax rates on personal income and the average annual change in those rates during the premier’s time in office at three income levels: $50,000, $75,000, and $150,000. (Income is taxed in brackets. Your marginal rate represents the highest bracket your income reaches. For example, if the system taxes the first $50K of income at 15 per cent and the next $50K at 20 per cent, and you make $60K, then your first $50K will be taxed at 15 per cent and the final $10K at 20 per cent. Your marginal rate is 20 per cent.)
The premiers were also judged on the number of tax brackets in the province.
The Fraser Institute deemed better performing premiers as those who maintained lower tax rates or reduced them relative to other provinces (or some combination of both). Premiers that maintained or implemented fewer tax brackets also received better scores.
Smith was the only premier to score above 80 on personal income tax. One premier scored in the 70s, Saskatchewan’s Moe. Eby of British Columbia (68.3) and Kinew of Manitoba (66.7) were the next closest, maintaining low marginal tax rates across income levels of $50,000, $75,000, and $150,000.
Smith maintained one of the lowest top rates, while Eby ranked the best for marginal rates at $75,000.
The last word, according to Fuss is that “premiers that score poorly in these rankings are generally not following principles of sound fiscal policy and are therefore adversely impacting economic stability and affordability in their province by imposing high tax rates and burdening residents with debt that will likely result in future tax increases, fewer services, or some combination of both.”
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