Madam Chair, Mr. Chair, members of the joint committee, good afternoon.
First of all, I'd like to thank you for taking me up on the suggestion I made when I was here last, because it is appropriate and fitting that members of this committee are the first to officially meet with the new parliamentary budget officer.
When Parliament legislated these new functions, it created an officer of the Library of Parliament, a position that would operate within the library's established mandate and ethos of providing authoritative, reliable, and above all, non-partisan and independent knowledge and information to parliamentarians.
When we last met, I shared my view that this committee could play a valuable role as a management board for the Library of Parliament. I know that we will benefit greatly from your insights as we begin implementing new services through the Parliamentary Budget Officer.
In fact, I would suggest establishing a focus group under the auspices of this committee to offer ongoing advice and help us ensure that Parliament is provided with the support and information it needs to sustain an appropriate scrutiny of the executive.
An ongoing, informal dialogue with members will help us deal with the questions that will certainly arise as statutory provisions are interpreted and given life through the delivery of this new service.
What are the specific needs and requirements of parliamentarians? How should priorities be set in the face of competing demands? Who is better to answer these questions than the parliamentarians who are the clients of these services?
By way of getting our dialogue started, I'm very pleased to introduce to you Kevin Page, the man who took on the challenge of being Canada's first parliamentary budget officer. This is Kevin's unveiling, but he objected to coming covered in a sheet and having me take it off.
Kevin started working with us just after Easter. For those of you who may not have seen his curriculum vitae, copies are available.
Kevin is one a very few individuals with experience working on relevant fiscal forecasting policy and expenditure portfolios within all three central economic agencies. This broad perspective will be of tremendous value to parliamentarians.
As you're going to find out, Kevin is a people person with a good sense of humour and a great reputation. And for your information, he's also a hockey fanatic and a hockey player. Most recently he took a puck to the head, so he needs to learn to duck both literally and figuratively.
His phone's already ringing off the hook with calls from skilled people across Ottawa who want to come to work with him. For me, this is great news for Parliament. It's a huge opportunity for us to build on the library's research capacity and add value to the services we already provide to parliamentarians.
Just before I ask Kevin to take over, I'm going to change the subject briefly.
I'd like you all to know about the event that's going to be hosted by John Steffler, the parliamentary poet laureate, next Tuesday. In recognition of National Poetry Month, John has organized a panel discussion entitled The Merits of Tradition and Innovation in the Arts, or Arguments for Cultural Continuity and Cultural Change. He's bringing in five prominent poets from across Canada in the afternoon, and there will be a poetry reading in the evening.
I'd like to thank the members of the committee for the ongoing support they've provided to the poet, and particularly Senator Trenholme Counsell, who's had a special interest and has been looking forward to an event like this.
Thank you again for your invitation to appear today.
Madam Chair, Mr. Chair and members of the Joint Committee, thank you for giving me the opportunity to speak to you today. I would also like to thank the Parliamentary Librarian, Mr. William Young, for all his efforts to increase the capacity of the Library of Parliament to serve Parliament.
I would also like to thank Mr. Allan Darling, a retired senior public servant, who has worked diligently with the Parliamentary Librarian to make this day a reality.
In my opening remarks I would like to take the opportunity to tell you a little bit about myself and how I approach the work of the parliamentary budget officer.
I have four messages. One, it is an honour and a privilege to serve Parliament. Two, we have an important and timely opportunity. Three, the building process will take time. And four, today marks an important step in the consultation process.
I am honoured to be Canada's first Parliamentary Budget Officer and to be an independent officer with the Library of Parliament, an institution with a long and prestigious history in Canada.
The Library of Parliament has a tradition of providing objective, non-partisan analysis and advice to Parliament. A well-known professor at the University of Ottawa, Sharon Sutherland, has recently described the level of service provided by the Library as a gold standard reputation.
I am very fortunate to be building capacity from the current strength of the Library of Parliament.
It is important that the members of the Joint Committee be comfortable with me as their Parliamentary Budget Officer. Trust must be accompanied by professional, unbiased and competent advice for me to be an effective servant of Parliament.
Now I'd like to add a few words, a little bit about my history, who I am. I was born in Thunder Bay in 1957. My love for my country was instilled by my grandparents, who were immigrants from Poland and the Ukraine.
My parents emphasized a number of values when raising their children: respect and compassion for others, hard work, and prudence when it comes to money. It's the latter I'm hoping will show over the next few years.
I share the values of my parents. I've been happily married for 26 years and am the father of three children. While I love Ottawa and remain a fan of the Senators, even after last night, I'm also very proud to be from Thunder Bay, a city with important history and one that has produced many public servants, including the late Chief Justice Bora Laskin, who went to my high school, and Derek Burney, who also went to my high school, a former Canadian ambassador to the United States.
I'm sorry, I had to do a little bragging.
As the Parliamentary Librarian has noted, I have spent more than 25 years in the federal public service. Many of these years were spent in central agencies in which I had the opportunity to work with others in the provision of advice related to economic, fiscal, and expenditure management issues. This is my first opportunity to work as an independent officer of the Library of Parliament, and I'm a little bit intimidated. I have lots to learn about how Parliament works, and I'm looking forward to serving and working with you in this new capacity.
I believe we have an important and timely opportunity with the creation of the role of Parliamentary Budget Officer. The importance stems from Parliament's “power of the purse”, which is a fundamental feature of democracy.
The mandate of the parliamentary budget officer is outlined in the Accountability Act, and it is now part of the Parliament of Canada Act. It has three components: one, objective analysis to the Senate and the House of Commons about trends in the economy, the state of the nation's finances, and the estimates of government; two, related research when requested by a committee of the Senate or the House of Commons, including the Standing Committee on National Finance in the Senate, the Standing Committee on Finance in the House of Commons, and the House of Commons Standing Committee on Public Accounts; and three, estimating the financial costs of proposals introduced by a member of either House other than a minister of the crown or by a committee.
The mandate includes one important provision which gives the Parliamentary Budget Office the power to access at convenient times any financial or economic data in the possession of the department that are required for the performance of his or her mandate. This will help stretch the budget of the Officer and the analytical capacity of the supporting team.
The genesis and momentum for the creation of the parliamentary budget officer role reflects a number of important concerns expressed by parliamentarians over the past decade: one, concerns that the size of fiscal forecasting errors were hindering public and parliamentary debate on budgetary choices and were damaging the credibility of the Department of Finance; two, concerns that more was required to strengthen accountability and effective scrutiny by Parliament of government spending and future spending plans; and three, concerns that private members' bills needed to be costed earlier in the legislative process and better integrated into the budget-making process.
With due regard to these concerns, I believe the launch of the parliamentary budget officer position comes at an opportune time.
One, the economic and fiscal situation of Canada is relatively strong as measured by many macroeconomic indicators: sustained and continuous economic growth, low inflation, low interest rates, low unemployment rates, projected fiscal balance, and a much improved debt-to-GDP ratio. It can be argued that it is better to launch this role in a period of relative economic strength rather than weakness.
Two, we are in a Parliament with a minority government. Political scientists such as Professor Peter Russell have noted that this situation encourages debate about budgetary choices, and negotiation and compromise on legislation.
As we look ahead, we can envisage many important and interesting debates. These include the current debates about the impact of a weaker U.S. economy on Canada's economy and fiscal situation, and the adjustment pressures in manufacturing related to a high dollar and high input prices.
They also include important longer term debates about raising the standard of living in Canada, ensuring balanced income growth, addressing issues related to aging demographics, realigning fiscal resources to new priorities in a balanced budget framework and ensuring environmentally sustainable economic growth.
Building the capacity to support the mandate of the parliamentary budget officer will take time. With the 2008 budget and the 2008-09 estimates now before standing committees, the next key milestone in a normal budgetary cycle for the parliamentary budget officer will be the 2008 economic and fiscal update in the autumn and the 2009 pre-budget consultations.
One can envisage a number of overlapping phases of development in the building process: firstly, a consultation phase with parliamentarians on priorities and potential outcomes, as well as consultations with departments and agencies on the way we will exchange information; secondly, a team building phase in which the office will be staffed within the Library of Parliament to serve parliamentarians; and thirdly, an implementation phase in which products and services are provided to parliamentarians.
While it is early days, work is under way to establish secondments from the public service for two experienced and high-performing individuals to serve in management positions: one, a director of economic and fiscal analysis, to serve parliamentarians with analysis and advice on economic and fiscal trends and their potential implications; and two, a director of expenditure and revenue analysis, to serve parliamentarians on financial costing, strategic support on the estimates, and assessment of budgetary systems.
In the context of establishing the role of the Parliamentary Budget Officer, a number of concerns have been raised publicly, including concerns about the independence of the advice, the size of the budget for the position and about whether or not the Officer will provide his own forecasts.
In this regard I wish to note that the parliamentary budget officer will maintain the tradition of the Library of Parliament in the provision of independent, non-partisan advice.
I will utilize all the resources provided to it in the most effective manner possible, and that includes leveraging current resources in the library, in federal departments and agencies through the provision of information, and to external stakeholders interested in serving Canadians. I will work with the Department of Finance and private sector forecasters to ensure that there is satisfactory comprehension and oversight by parliamentarians on the economic and fiscal outlook, the related risks, and the implications for fiscal planning and budgetary choices.
As I close, I want to thank you for giving me this important opportunity to open the dialogue on the implementation of the role of parliamentary budget officer. As I noted earlier, Parliament's power of the purse is a fundamental feature of democracy. It will be an honour and a privilege to support your efforts to ensure that the revenue and spending measures that are authorized by Parliament are fiscally sound, that they meet the needs of Canadians with available resources, and that they are implemented effectively and efficiently.
I am looking forward to hearing the views of honourable senators and members of the House of Commons on their expectations for the office and how it can best support their activities.
Thank you, very much.
Thank you very much. Those are excellent questions.
On the first question on the costing of bills, which is one of the three key pillars of the mandate, first, here is just a point. Some costing does take place now within the Library of Parliament. I'm sure perhaps a number of you have actually used the services of the Library of Parliament to do costing. I think this could turn out, perhaps, to be one of the most important functions: that we build in strength and capacity within the parliamentary budget officer role.
It's important, whether it's the Kelowna accord or some of the other issues that we read about in the newspapers now, that these things do receive a good costing and that there is transparency on these issues and perhaps a good dialogue, both between members here who are interested in private member's bills and, as well, even in the Department of Finance. We come to some agreement as to what the actual costing is, or we understand where the areas of difference are.
I'm certainly prepared to work to provide that kind of bridge and provide independent analysis on costing. I think the model we need to work to is that once we prepare those kinds of reports and provide the background analysis, we make that information as transparent and as available to people as possible. I think that will really build a lot of trust and maybe deal with some of the down-the-road kinds of questions that follow up with some of these bills, as well.
Just maybe as a word of caution, some of this effort on costing does take time. Certainly something as big as the Kelowna accord, which I think may have been costed by the previous government, is obviously a pretty substantive effort, and there'll be issues around cost.
We'll have to build. I think this is one of the things Mr. Young talked about: building the relationship with you folks, trying to discuss, again, the business model, the business plan, how we set priorities, even some of the service levels with respect to the amount of time that's going to be required to do appropriate costing, and then make those reports available.
Sir, I think your point about food prices is an excellent one. It's been much publicized in various magazines in recent times. While inflation right now is running below 2% on a year-over-year basis, food prices are running much higher. It's having a big impact on lower-income people. I think that is a major concern. So I think that would be an excellent area of research. We should be prepared, as an example, to look at stuff like that.
Thank you, sir, for the question.
Having worked on the other side of the fence—and as I said, this is a new opportunity for me down here to serve Parliament—I'm quite familiar with how much time and effort and energy goes into producing budgets. The economics analysis underscores the preparation of those budgets.
I think I can provide, working with a team that needs to be developed, a good explanation of what's behind some of those economic forecasts, what some of the trends are that are really going to make a difference in terms of the economy over the next few years, and what some of the risks might be in terms of that context.
I can't guarantee you, sir, that I'll have a better crystal ball than the 20 private sector forecasters Finance is using right now, but I'll give you a good explanation or commit to giving you a good explanation of what some of those factors are that will drive the forecast.
In terms of when we'll be able to prepare that information, sir, there's an office that needs to be built. It doesn't exist right now. You are looking at the office of the parliamentary budget officer right now. I'm pretty much it, with my assistant, Patricia Brown, sitting along the side.
We plan to staff up. We'll build a team upwards of 15 people with lots of experience in doing economic analysis and fiscal forecasting. So we hope to be in a much better position to answer some of the questions that were posed here today, like those on food prices and the impact on inflation. It probably will take literally a number of months, but as I said, we're in the position of hiring some management positions now.
In a sense, in terms of operations, we're probably looking more towards the fall as being a realistic date in terms of having sufficient capacity. It won't be full capacity. It'll be more an early fall kind of timeframe.
I think what's important for me is to use this type of opportunity to meet with you outside these sorts of rooms to get a sense of what your priorities are, how we can establish that working relationship, and work through some of the business plan and models. I'd do some of the human resources kind of planning in the background over the next few months.
Thank you, Mr. Chairman.
I too would like to congratulate you, Mr. Page, on your appointment to this position.
I would also like to welcome Mr. Young to this meeting.
When Mr. Young last met with the committee on February 13, he stated that the Parliamentary Budget Officer should be not providing forecasts as an alternative to the ones drawn up by the Department of Finance.
I am somewhat concerned by these comments. Your position has been created and if, in turn, you hire 15 people to help you, that represents a major expenditure. If the forecasts that you provide closely resemble the ones I received in the past from the Library, then the position will over time become more of an honourary, rather than an actual working position.
Ideally, when the position was created, what I wanted to see was someone who could provide federal budget forecasts in tandem with the Minister of Finance. After two or three years, if you are correct and the finance minister is always wrong, then I could use the Library as an exceptional reference source in terms of convincing my party either to approve a particular expenditure or convincing it that we cannot afford something as a result of the Library's forecasts.
If you cannot provide these forecasts, then I will have to rely on the minister's forecasts. The fact of the matter is that in the last 10 years, not one minister, regardless of his political affiliation, has been able to provide accurate forecasts for the coming fiscal year. Sometimes, the forecasts are off by $11 or $12 billion.
I would expect to incumbent of this position to be competing in some way with the Minister of Finance for the honour of providing accurate forecasts. We rely on private sector experts, but they do not have access to all of the data that you will have access to by virtue of your authority and your position.
So, I was just wondering about that. I do not expect to get an answer or a clear commitment from you today, but this is what I was hoping to get from your appointment
Thank you very much, and welcome. Your reputation precedes you. Everybody seems to love you, so this is very good.
I have two questions. One is around the costing, and one is on reporting.
On costing, we'll start with the easy one around private members' business. Would your office give an independent opinion as to whether this bill should have a royal recommendation?
Secondly, with committee reports, sometimes those exciting officials in Finance have managed to come up with estimates of the report cost, and they provide sufficient sticker shock to the minister that the recommendation, or response to the report, ends up being denied. I guess the disability tax credit report from our disability committee was one of those. Finance decided that if they did what the committee had asked, 10 million Canadians would qualify for it, which was completely wrong. I would like to know that you would be able to help us with problems like that and where on earth they got those numbers.
The second question is on the reporting. I wonder if you would be able to participate with members of Parliament in terms of advice, from Treasury Board to whatever, to make reporting as user-friendly as possible to parliamentarians, but also in how to annualize the performance report with the estimates back to the performance report.
I think Mr. Young will remember this. As chair of the disability committee, to be able to explain to officials that they said that last year.... With the lack of institutional memory that we have in parliamentary committees, where the membership turns over too often, it's really important that the researchers are able to provide that kind of information.
But I also want to know whether you will be able to look internationally, to other sources of reporting that have been viewed to be more user-friendly to parliamentarians and whether that could be part of a process we engage upon with Treasury Board, and with Auditor General reports, all of those sorts of things?
Thank you, Mr. Chairman.
I have several comments to make, which the witnesses may wish to take on board or respond to as they see fit.
First of all, I would like to see some work done--and perhaps, Mr. Young, it's a matter of updating material you already have--on the doctrine of budget secrecy, which, in my humble opinion, is greatly overdone. I think we all understand that there are certain budgetary decisions that must absolutely be held secret until the moment they are announced, but that need not apply to the entire budget. As a matter of fact, in recent years communications advisers to various finance ministers have developed to a very high art the practice of calculated leaks designed to manage public opinion and public expectations. I'd like to see some refinement of the doctrine of budget secrecy as it exists in modern traditions.
Second, I think I should pay one of my infrequent, but very sincere, compliments to the House of Commons. A lot of progress has been made in opening up the process in recent years, and in particular the work of the Commons committee on finance in its pre-budget role. and now have used that committee as a platform in order to try to put across some idea of what they're up against and the options that are before them. It also provides an opportunity for citizens to make public representations as to what they think the budget priority should be, instead of only making representations privately to the minister. Anything you can do to enhance the work of that committee in the pre-budget process, I think, would be very important.
I hope, and it may be a forlorn hope, that you'll be able to do something about the study of estimates in the House of Commons, which I think needs complete review.
That being said, the budgetary process, at least in the governments that I've observed, is very closely held. Essentially it's the Minister of Finance and the Prime Minister who know what is going on and who have access to all the materials. Other cabinet ministers, if they're brought in at all, are brought in on a need-to-know basis as matters affect their particular portfolios. One of the results, partly as a result of this, is that in the run-up to the annual budget, I believe there is still an inadequate understanding on the part of the public, parliamentarians, and perhaps even some cabinet ministers as to the real options a Minister of Finance faces.
Perhaps you can help us in this way. What are the real spending pressures that the minister faces in terms of the growth of statutory programs, in terms of pressures for new programs or improvements to existing programs? What are the revenue pressures that the minister is likely to face?
Some people seem to forget that while a downturn in the economy tends to depress revenues, it also puts upward pressure on costs for things like social assistance, unemployment benefits, and the like. Of course, much of this flows from the economic prospects.
I think we need a much more coherent and better presentation of the reality that any Minister of Finance faces in getting a budget ready. It will help us better, as parliamentarians, understand what is going on. It will particularly help opposition parties and non-ministers to think about what the other options or the alternatives are.
I'll leave it at that for the moment. Thank you.
You've given us lots of work to do and I'm getting even more intimidated about the people I have to hire and how fast they have to get started.
On the issue of the doctrine of budgetary secrecy and simply looking at the budgetary process in general, I think that would be a fascinating piece of work to do. And to put that in an international context in terms of how open are budget processes, particularly in parliamentary systems, I think would be a really interesting piece of work to do. As soon as we can get some capacity online, and perhaps working with some folks in the Library of Parliament now, we could get started on that.
In terms of your last point on looking at the issue of pressures, I think your point is very well taken. There are public servant officials, the Department of Finance, the Treasury Board Secretariat piece, the Privy Council Office, and as we move through the budgetary process they keep track of those pressures. Some of them are statutory, as you have said, sir, and some of them have capital components to them.
Certainly, Ministers of Finance and Prime Ministers, as they make those decisions in a budgetary context, are looking at new priorities versus existing spending pressures, and if there are some products we can look at that can keep track of some of those pressures that become quite well known, that could actually influence the pre-budget deliberation budget context. That would be an interesting thing to look at. We will have to take on that kind of work as well.
In terms of the comments about how various Ministers of Finance have used the House of Commons committee in trying to open up and make progress, I'd be happy to let the Deputy Minister of Finance know that they're happy with the progress and we'd maybe need to continue on with that work.
I certainly share your concern. There are a number of officials, and I've heard it even from a few ministers, who are concerned about the amount of scrutiny that's going on, particularly on the estimates side. So I hope that over the next five years.... It's a big topic to take on, but hopefully we can make some real progress on the kind of scrutiny that takes place in the broader estimates process.
Thank you, Madam Joint Chair.
I would like to also thank my colleagues for coming today.
We have lost the ability to have a full discussion today to determine future committee business, but before I go on to that, I would like to thank both Mr. Young and Mr. Page for coming today. We certainly appreciate your testimony and your fulsome answers to the questions that were posed to you.
We certainly appreciate and understand the challenges that you will face. We wish you all the best of luck as you journey forward, and the best on your endeavours in creating a parliamentary budget office that serves the best interests of parliamentarians and Canadians.
With that, I'll let you take your leave.
Colleagues, before we adjourn the meeting, we do have a couple of matters that were before you. Maybe we should have discussed them at the start.
Mr. Byrne has posed a question to the committee. There is a response to that in regard to an assessment from the Library of Parliament on incremental spending for the House of Commons, for the Senate, and of course, for the Library of Parliament, which is stand-alone. You'll find that in your information packages today.
We also have the matter of the estimates that we could or should discuss. I've had a brief discussion with my joint chair here, and it might be best if we convene a meeting as soon as possible to discuss the estimates.
We certainly would entertain any gestures or recommendations for witnesses to come in to testify alongside the people who would normally come to testify on the estimates. At that point in time, we could also shorten the meeting and maybe have an in camera session, with your permission, on future committee business.
Does that seem reasonable to everyone here?
Some hon. members: Agreed.
The Joint Chair (Mr. Blaine Calkins): With that, I thank everyone and adjourn the meeting.