Impartial data essential for economy, democracy

Hey there, time traveller!
This article was published 21/9/2016 (329 days ago), so information in it may no longer be current.

The news Wayne Smith, the chief statistician of Canada, has resigned should worry us. He is the second chief statistician to resign in six years. After serving just two years, Munir Sheikh resigned in 2010, in objection to replacement of the long-form census with a voluntary survey. Prior to that, Ivan Fellegi had served in that position for 23 years.

Why should you and I care about the comings and goings of senior civil servants? What do dull, dry data matter to the ordinary Canadian?

In fact, business and government depend on the flow of impartial and unbiased data as an essential oil for the economy and democracy. Facts such as the inflation rate or unemployment information produced by Statistics Canada are what economists term "public goods." They serve the general interest, and only a collective process, namely government, produces such information.

Businesses certainly collect masses of information on their customers and the customers of their competitors, but never publish these data — they are "private goods," reserved solely for the use of management.

Statistics Canada is an acknowledged world leader in the collection and dissemination of official statistics, and Canadians have an expectation it will offer independent and unbiased assessment of our economy and society. The cancellation, then restoration, of the long-form census, and now the current dispute over information-management systems, potentially undermine the mandate of Statistics Canada, revealing it is far from an independent agency.

At first glance, the problem is simple to see. The chief statistician reports to the minister of innovation, science and economic development, a politician. This creates direct political oversight and is one factor in why two successive chief statisticians have resigned.

Contrast this with the auditor general. This agency reports directly to Parliament, a relationship that is rooted in statute. The auditor general is probably the most independent public servant in the Canadian government. In addition to the law, the auditor general is appointed for seven years, purposely out of step with the normal political cycle.

Further, Canada has benefited from a series of fiercely independent auditors general who have firmly established the principle of providing the Canadian taxpayers and citizens with regular reports showing the foibles of public finance. The auditor general has 575 employees, a testimony to the extraordinary skill of past auditors in promoting the office and the popularity with which its reports are received by the public and media. The institution of an independent fiscal watchdog is now well-entrenched at all levels of government.

The government of the day always has ultimate control of any agency in the short run, whether or not it reports to Parliament. It determines budgets. Cost control can be a very effective control. It was the reason offered by the Conservative government for cutting the long-form census. In an effort to reduce spending on IT, the current government has created Shared Services Canada to manage information across the federal government, including Statistics Canada.

The exiting chief statistician has signalled this agency has implemented practices that compromise the ability of Statistics Canada to process and manage information it collects, including census data. The government has doubled down and reaffirmed Shared Services Canada is here to stay. Where this is headed is anyone’s guess, but we are in danger of damaging a key institution in our economy and democracy.

An institution is much more than bricks and mortar or a physical document; it is a set of principles and practices that are invented, evolve and need tending.

To understand this, recall King Solomon. When confronted by two women, both claiming to be the mother of a foundling baby, he could not decide who was being truthful. According to biblical legend, he proposed to divide the baby in half, letting each claimant have part of the child. The false mother appeared indifferent, but the true mother reacted with horror, saying it was preferable that the child remain whole and go with her competitor.

The truth emerged as a result of a process, and not because Solomon decided. He created a process, or an institution, that made the correct decision apparent to all. In complex and large decisions, creating processes where the truth emerges is always preferable to a single person making the final pronouncement, something the prime minister would be well to understand as he alone decides which pipeline should proceed.

As with other key institutions, such as the criminal and civil justice systems or the electoral process, the flow of unbiased data is essential for our economy and democracy. As Daniel Moynihan so clearly stated, "You are entitled to your own opinions but not your own facts." Preserving the flow of facts underpins public discourse and economic decisions and makes Statistics Canada key to the institution of independent data that supports our society.

Gregory Mason is an associate professor of economics at the University of Manitoba and a senior consultant at PRA Inc. His views are his own.

www.gregorymason.ca