Improving Budget Accountability and Transparency: Strengthening the Parliamentary Budget Office
Kevin Page’s term as the Parliamentary Budget Officer (PBO) expires in March 2013. He has already announced that he will not seek a renewal of his appointment. In this regard, he has done the government a favour since the chances of the Harper Government renewing his term are virtually non-existent given how they have treated him and his office.
Since its creation, the PBO has been in a constant battle with the government over its lack of independence, its inadequate budget, and its inability to hire staff. This is ironic given it was the Conservatives who promoted the idea of an independent PBO during the 2006 election. But no one should be surprised, given the government’s dislike of independent analysis and research, and opposing opinion.
Unless the PBO’s mandate is changed and the Office reports directly to Parliament, rather than to the Library of Parliament, it will never be fully independent and have access to information from departments and agencies that it requires to provide Parliamentarians and the public with the expert analysis they need to hold the Government to account.
The most recent example is the refusal of the Privy Council Office (PCO) to provide PBO with information on how government departments and agencies are implementing the Budget 2012 expenditure cuts. According to the PBO, this information is required by Parliament to adequately fulfill its responsibilities to oversee government appropriations. The PCO has refused to provide the information, at first arguing it would violate Workforce Adjustment Agreements and lately that such requests are outside the PBO’s mandate. As a result, PBO may be forced to take the PCO to Court in an attempt to secure it. Accountability and transparency have once been completely ignored.
The attitude of the government towards the PBO should not be a surprise to anyone. When the PBO began to issue reports critical of the government, the government’s response was to attack him personally and professionally. The Minister of Finance characterized the work of the PBO as “incredible and unbelievable”. At no time has the government ever made public its own analysis and research as a rebuttal to the work of the PBO.
The idea of an independent Parliamentary Budget Office arose in late 2004 when the final outcome for the surplus for 2003-04 came in at $9.1 billion rather than the estimated $1.9 billion provided in the Budget. The Conservative Opposition criticized the Liberal Government for deliberately underestimating the surplus and presenting biased fiscal projections. This was not an issue when the federal government was in deficit but became one once the budget was balanced and annual surpluses, larger than forecast, emerged.
The House of Commons Standing Committee on Finance held a series of meetings in late 2004 and 2005 to discuss the issue of establishing an independent budget office. Many countries had already established such an office to provide independent advice and analysis to their legislatures and its committees. According to a 2007 Organization for Economic Co-operation and Development (OECD) survey of its 30 member countries, along with another 8 non-OECD countries, 16 reported that they had “a specialized budget research office/unit attached to the legislature to conduct analyses of the budget”. The largest independent budget office is the Congressional Budget Office (CBO) in the United States. From its very beginning, the CBO has expanded its functions far from what was originally envisaged, to become a nonpartisan, independent, objective, analytical agency, highly respected by Congress.
After an extensive review, the Committee recommended the establishment of an independent budget office, reporting directly to Parliament.
As part of its 2006 election platform, the Conservative Party promised to “create an Independent Budget Authority to provide objective analysis directly to Parliament about the state of the nation’s finances and trends in the national economy; require government departments and agencies to provide timely information to the Parliamentary Budget Authority to ensure it has the information it needs to provide accurate analyses to Parliament; and ensure that government fiscal forecasts are updated quarterly and that they provide complete data for both revenue and spending forecasts” .
Amendments to the Parliament of Canada Act in 2006 created the position of Parliamentary Budget Officer within the Library of Parliament. This was quite a change from the 2006 election promise and related documents, in which they had indicated that it would be an independent agency, reporting directly to Parliament. This resulted in a conflict between the Government and the Parliamentary Budget Officer over his mandate and independence. A special committee examined concerns raised by the PBO concerning independence and concluded that, based on the applicable legislation, PBO was overstepping its mandate.
Since its creation, the PBO has published its own economic and fiscal forecasts, studies on fiscal sustainability, information on government spending and estimates of proposed government initiatives. The PBO has provided credible estimates on the costs of the
F-35 fighter, the costs of the Afghan War as well as credible analysis on the fiscal affects of an aging population.
In total, since its creation the PBO has issued 1nearly 150 publications. None of this information would have been available to Parliament and to the public without the PBO.
Make the PBO Truly Independent and Give it Real Authority
In the present federal environment, there is a definitive need for independent analyses and research. This was not always the case. At one time governments, both Liberal and Conservative, asked their public servants to provide their best advice, regardless of disagreement, wanted policy options costed, and were even willing to publish reports and analysis and defend them in public. In fact, during those years there was no need for a PBO. But with the current government that use of evidenced-based policy decisions no longer exists and there is no certainty that it will reappear in the future.
A strengthened (more resources), and more independent (report to Parliament) PBO would promote greater understanding of complex budget issues; it would strengthen credibility by encouraging simplification and forcing the government to defend its economic and budget forecasts; it would improve the budget process by promoting a straightforward and more understandable and open process; it would promote accountability by commenting on the government’s projections and analysis; finally, by being nonpartisan it would provide analysis and research to all political parties.
Although the opposition parties have promised to make the PBO more independent, it is highly doubtful that the current government will make any changes to the mandate of the PBO. Accountability and transparency have once again become irrelevant. Indeed the government is more likely to weaken the mandate of the PBO. Kevin Page has set a high bar and much will be revealed in the appointment (if there is one) of the next Parliamentary Budget Officer.