I recently served on a special panel reviewing the City of Toronto’s financial problems. We were seeking a more stable long-run match between the city’s revenues and expenses.

Our final report, released six weeks ago, provided a reasonably balanced grab bag of ideas: some operational efficiencies here, some new taxes there. Above all, a clarion call to adequately fund our cities, so they can fulfill their crucial economic and social role.

Throughout the exercise, however, I felt a gnawing unease. Why are public-sector activities subject to high-profile scrutiny (such as our panel), but private-sector performance is taken for granted? Our panel turned over every rock at City Hall in search of waste, inefficiency or unexploited revenue opportunities. And everyone I met had free advice on the subject. I think that most governments receive similar scrutiny — from opposition critics, journalists and cranky taxpayers alike.

Yet, public-sector operations account for just 22 per cent of Canada’s GDP. What about the other 78 per cent? Who’s reviewing the private sector?

Just down the street from Toronto City Hall is that temple of fiscal debauchery known as Bay Street. I can assure you there’s more waste, corruption and self-serving opulence there than in Toronto’s chronically broke government (or any other government, for that matter).

Never mind the destruction that Bay Street’s wild mood swings wreak on the macroeconomic level. Just the massive resources uselessly consumed there every trading day are galling enough. Most of this waste occurs behind closed doors, so you don’t actually see it, whereas the work effort of city maintenance workers is monitored personally by every taxpayer who walks by.

Here’s one relatively trivial but telling example. Our fiscal panel held several sessions in an executive boardroom at City Hall. That clamshell-shaped building may be an icon of modernist architecture, but inside, it’s downright humble, verging on shabby.

The boardroom has bare concrete walls, decorated with fading city maps. No windows. A simple, pockmarked table. Stackable chairs. Ratty coffee in Styrofoam cups. Officials (including, at times, the mayor) made their presentations using a noisy portable projector and a pull-down screen.

By coincidence, just before we released our report, I participated in a lunchtime seminar at one of Bay Street’s top legal firms, a company specializing in mergers and acquisitions. This firm takes up four entire floors of what is probably downtown’s priciest tower. And it felt more like a five-star hotel than a place of productive, frugal work.

First-class furnishings. Fine original art — with plaques identifying artists and titles. Complimentary wireless Internet and glossy reading materials. Black leather swivel chairs. In-house video-conferencing and production. Gourmet buffet on fine china. As I started my presentation, the spectacular view was temporarily shaded by automated blinds, and a built-in projector and screen descended from the ceiling.

The millions spent on tax-deductible luxury every year in that office can’t possibly represent an economically rational investment. Yes, it may impress the hell out of the firm’s well-heeled clients. But there’s nothing efficient about it. Similarly, the claim that this waste occurs in the private sector, and hence isn’t our business, is equally false. We pay for it through the prices charged by the law firm’s clients, the mark-up on our mortgage payments or any number of other indirect channels.

We didn’t find too much waste in Toronto’s municipal services. Operationally, most programs are well run. Workers make less than their private-sector counterparts. And the leader of Canada’s sixth-largest government works at a boardroom table that would embarrass any second-rate derivatives trader.

So, while we continue to demand full value for our tax dollars, let’s cast a baleful, penny-pinching gaze over at the wasteful excess of private enterprise. Directly or indirectly, that’s our money they throw around — and one way or another, we’ll be stuck with the bill at the end of the day.

We need a special fiscal review committee to inquire into the self-dealing, pocket-lining and Ponzi-scheming of the brokers, bankers and private equity magnates who lecture governments non-stop about “fiscal responsibility.” I would volunteer to be the first member — but I’m not holding my breath.

Jim Stanford

Jim Stanford is economist and director of the Centre for Future Work, and divides his time between Vancouver and Sydney. He has a PhD in economics from the New School for Social Research in New York,...