Kevin Page is president and CEO, and Sahir Khan is executive vice-president, of the Institute of Fiscal Studies and Democracy, at the University of Ottawa. Mr. Page is a former Parliamentary Budget Officer and Mr. Khan was a former Assistant Parliamentary Budget Officer.
Canada's Parliamentary Budget Office (PBO) faces an inflection point in its short history.
For the PBO, an uncertain beginning was followed with a tentative acceptance, and now, with a new offer of a sustainable future. There were positive commitments from the 2015 Liberal election platform and the most recent Fiscal Update. Legislation is anticipated early in 2017. Abraham Lincoln made the case that there are times when "the better angels of our nature" will bring about positive outcomes. Sadly, when it comes to the PBO, our experience says "no." Former U.S. president Ronald Reagan's line, "trust but verify," is a good one in this context.
The decision to fortify the PBO is taking place at an important juncture for money and politics. Global uncertainty and fear are up. Who among us did not feel a little off balance watching Britain vote on Brexit or the U.S. election campaign? Closer to home, we saw successive elections fought in the context of the declining trust in our institutions. The current Liberal government may be losing some of the tailwind from the last election and flying straight into the headwind of increasingly complex policy and economic decisions: electoral reform, health-care renewal and carbon pricing, and others.
With the Liberal government just a little more than one year into its mandate, it may be asking whether it is worthwhile to strengthen Parliament's capacity to hold the government to account. The answer is yes, but given the headwinds, it would be natural for the government to be reluctant democrats.
Why should Canadians care about the PBO? Simple: Ask yourselves, do you want your MP to have information he or she needs to vote and to hold the government to account? Of course you do. But, you may ask, do not the government and public service provide this information? The answer is rarely. It turns out governments and public servants are not incentivized to provide information they control to others to hold them to account when they spend your money.
But MPs need support. Information is power. MPs have to scrutinize and appropriate $300-billion a year, oversee another $100-billion-plus in tax expenditures, vote on an annual budget bill while monitoring a $2-trillion economy – all before the fiscal year-end of March 31, about 200 days before Public Accounts is tabled with the Auditor-General's report. To do this work, they have the support of the PBO (about 15 people and $2.8-million a year).
The Conservatives, with the support of Parliament, created the PBO in 2006. The mandate was broad but the legislation was weak. In the early years, PBO faced a lot of roadblocks, such as budget cuts, little information access, constant questioning of the mandate; the usual stuff when people don't want the light of accountability shining too brightly on dark corners. But for the first time, Parliament got to see the cost of a war, the life-cycle cost of the F-35 fighter planes, tough-on-crime bills, changes to Old Age Security or the Canada Health Transfer, fiscal sustainability and the impact of austerity. The PBO helped to level the playing field.
Now, the Liberal government wants to improve the PBO's legislation. They want to make the Parliamentary Budget Officer an Officer of Parliament, removed from the Library of Parliament. This will likely come with an improved appointment process led by Parliament. They want the office to help cost party platforms before an election. They want to provide the PBO with additional funding. This is all good. Now, let's get ready to see the fine print. News alert – the government and public service do not like competing with PBO on economic and fiscal projections and financial analysis.
There are at least four areas of risk with new legislation that may not be obvious until the bill is tabled. First, will the PBO mandate be reduced to ensure that it stops doing certain types of reports – for example, providing economic and fiscal forecasts? Second, will the appointment process ensure that the next PBO is experienced in the dark arts of government budgeting or will he/she be an administrator? Third, will the PBO freely report to Parliament and taxpayers through its website or be forced to report on a fixed schedule through committee(s)? Fourth, will departments and agencies exchange information with the PBO and will there be real consequences if the government and public service refuses to provide financial information?
Details matter, especially when you are spending taxpayer money. Let's embrace transparency, debate and accountability. We need strong legislation for the PBO. Stay tuned.