We're going to begin on time. What you will soon learn is that the old school teacher never dies. The bell rings at 12 and we begin at 12.
We have two guests with us today. But before we move to the guests, there are a couple of things we need to do quickly.
First, your steering committee met in camera earlier this week. We had unanimous agreement on a number of things, including that the committee undertake a study on the Library of Parliament and the Office of the Parliamentary Budget Officer, and that senior officials from Treasury Board and Privy Council Office involved in the legislation be invited to appear before us. Also invited to our meeting next week would be members of the committee of former parliamentarians who oversaw or made suggestions with respect to the legislation, and the consultants who worked with the Library of Parliament to establish the office when it was set up. We do so in order to set the context for everyone, so that we will all be on the same page when we move on to deal with future issues, as soon as we come back in the new year.
The other thing we decided was that witnesses would be given ten minutes to make their presentations, and that during the questioning of witnesses, each one would be limited to five minutes, because this is a very large committee. Then we would move on, and you can go to a second round.
A very quick item is that we need to get a budget adopted before the end of the fiscal year, which, as you know, is next week. So would someone move that the proposed budget in the amount $29,500 for the study on the Office of the Parliamentary Budget Officer be adopted?
Thank you, Senator Carstairs and Mr. Goldring, for your invitation to brief the committee on my understanding of the accountability framework and the role of the Parliamentary Budget Officer.
I believe you have just received a copy of my CV, and a summary description of the terms of reference prepared by the library when I was engaged in October 2006 has been circulated to you. I also received from the library a copy of the documents binder that has been circulated to all members. I was directly involved in the preparation of some of those key background documents and would certainly be prepared to comment or respond to questions from members about them.
I will focus my opening remarks on two key issues that I believe the committee should study and on my understanding of the statutory provisions that frame those issues. The first issue is the management accountability of the Parliamentary Budget Officer within the library, and the second is the autonomy of the officer with respect to the content of his work.
With respect to the issue of the accountability framework, the act in section 79.1 states that the Parliamentary Budget Officer is “an officer of the Library of Parliament”. The position created is that of an officer, not of an office. Section 79.5 authorizes the Parliamentary Budget Officer to exercise specific authorities in his own name to fulfill his mandated duties. It specifically does not authorize the direct hiring of permanent staff.
Subsection 79.5(4) makes clear that the exercise of those authorities is subject to section 74, which vests the direction and control of the library in the Speakers, and subsection 75(2), which establishes that the Parliamentary Librarian has the rank of deputy head of a department of the Government of Canada and, subject to the direction and control of the Speakers, has the control and management of the library.
My understanding of the Financial Administration Act, which is referenced in the legal opinion in your binder from Gowling Lafleur Henderson.... I'm citing the bottom of page 2: Under the Financial Administration Act, responsibilities for that act are vested in a deputy head, “...which for the Library is the Parliamentary Librarian. Any other employee of a department or agency can only exercise authorities under the FAA as specifically delegated to them.”
I would note in parenthesis that the Governor in Council appoints many persons to positions within the organizational structure of a department—for example, associate deputy ministers. However, I am not aware that any such appointed individual has claimed the authority to function outside the management framework of the Financial Administration Act.
The Parliamentary Budget Officer has made public a legal opinion from McCarthy Tétreault, which asserts:
...the librarian is, in fact, obliged to ensure that his overall control and management of the library facilitates the ability of the PBO to fulfill his mandate.
I am quoting page 6 of that opinion.
The issue for the committee to examine is the extent to which the Librarian is required to compromise his legal authority as deputy head to another position on the sole basis that the Governor in Council appointed an individual to that position. Against that legal framework, I would like to outline to the committee the assumptions under which I developed the job description and the organizational framework for the Parliamentary Budget Officer.
The first assumption was that the statute created a focused capacity within the library to carry out the specific mandates enumerated in section 79.2, paragraphs (a) to (d). It is interesting to note that, unlike the case with other positions that are by statute created as officers of Parliament, the Librarian controls the selection process. In addition, the executive brief prepared by Ray & Berndtson for all candidates approached to consider the position stated on page 3: “For purposes of management accountability, the Officer is subordinate to the Parliamentary Librarian and the two Speakers.”
The brief also noted that the officer was responsible directly for the implementation of the mandate set out in the statute.
A second assumption concerns the specific mandates to assist in the review of the estimates, which is in paragraph (c) of section 79.2, and to “estimate the financial cost of any proposal that relates to a matter over which Parliament has jurisdiction”—paragraph 79.2(d).
These functions have always been carried out on the request of committees or members by the library, specifically by the research branch. One of the specific accountabilities enumerated in the job description of the Parliamentary Budget Officer, the third accountability, is to establish an effective working relationship with PIRS, the branch of the library that provides research and reference services for Parliament, so as to “ensure the integration of the work of the PBO in the overall support of the library to the effective operation of parliamentary committees”.
My working hypothesis was that the Parliamentary Budget Officer represented an enhanced capacity within the library to improve its support to parliamentarians, who are the clients and decide what to request from the resources of the library. Within the legal framework outlined above, the Librarian has the sole accountability for the stewardship and allocation of all resources appropriated by Parliament and consequently must be able to retain ultimate authority over those resources.
I will speak for a moment to the mandated autonomy of the office. While I believe the authority of the PBO to manage resources is legally dependent on delegated authority from the deputy head, I interpreted the mandate assigned to the officer in section 79.2 to fall within his authority to execute.
There is a distinction, however, between the mandate in pargraph (a) of section 79.2, which confirms a proactive role to provide independent analysis to the Senate and House of Commons “about the state of the nation’s finances, the estimates of the government and trends in the national economy”, and the other three areas of the mandate, which depend upon a request from a parliamentarian or a committee for the officer to undertake the work. As I noted earlier, I think the statute anticipates, in paragraph 79.5(c), that the Parliamentary Budget Officer would draw upon existing resources within the library to assist him to respond to requests under those sections. I would also observe that the word “independent” appears in the statute only with respect to the analysis mandated in paragraph 79.2(a).
I think there are two areas in which this committee could provide guidance related to the execution of the mandate. First, it was always anticipated that demands from parliamentarians, especially for costing of proposals, would exceed resources available. In fact, the Librarian is constantly realigning resources within his organization to maximize the support he provides to parliamentarians. The Parliamentary Budget Officer job description, in point 5 in his accountabilities, anticipated such a scenario by assigning responsibility to the budget officer to ensure the creation, in consultation with the Speakers of the Senate and House of Commons and the Librarian of Parliament, of criteria and guidelines to manage requests for expert analysis or cost estimates from the clientele. Your observations on managing with scarce resources could provide helpful guidance to both the Librarian and the Parliamentary Budget Officer.
Second, I think this committee could provide an early sounding board on whether the style of reporting that the Parliamentary Budget Officer has adopted is useful to parliamentarians. The Parliamentary Budget Officer published on his website, on August 15, a proposed operating model. Observations on the acceptability of the approach outlined could provide useful guidance as the work of the Parliamentary Budget Officer evolves.
In summary, in fulfilling my mandate to elaborate a role and organization structure to support the Parliamentary Budget Officer, I anticipated that the officer would enrich the capacity of the library to fulfill its traditional role to support parliamentarians in carrying out their responsibilities. I foresaw the Parliamentary Budget Officer as an interpreter of economic and financial proposals advanced by the government, an innovator in identification of systems and technology improvements that would enhance the presentation of information on fiscal and budgetary proposals of the government, and an educator enriching the understanding and insights of parliamentarians.
I believe establishment of the officer to be a significant step to strengthen the accountability role of parliamentarians, and I hope your deliberations will help clarify the operations of the officer and ensure his continuing contributions to Parliament's deliberations.
Thank you for your attention. I am certainly prepared to respond to comments or questions.
Thank you for your invitation to appear before the Joint Committee on the Library of Parliament to discuss the creation of the office of the Parliamentary Budget Officer. If it pleases the committee, I would like to give you a brief overview of how that office was created under the Federal Accountability Act.
As honourable members and senators know, the Federal Accountability Act was omnibus legislation that amended 46 existing statutes and created two new ones. Included in this package were amendments to the Parliament of Canada Act to create the new office of the Parliamentary Budget Officer, or PBO. These amendments came into force when the Federal Accountability Act received royal assent in December 2006. The Library of Parliament then began work to establish the office, including running the search process to identify candidates for the position of PBO.
Under the statutory provisions, the PBO is appointed by the Governor in Council from a list of names provided by a committee that is formed and led by the Parliamentary Librarian. The first PBO, Kevin Page, was appointed through this process in March 2008.
As stated in the legislation, the PBO is an officer of the Library of Parliament, with a specific mandate to provide the Senate and House of Commons with independent analysis on the state of the nation's finances, the estimates of the government, and trends in the national economy. This mandate also includes undertaking research at the request of certain parliamentary committees as well as responding to requests from parliamentarians for costing of proposals that may be considered by Parliament.
As I just noted, the legislation expressly states that the research and analysis provided to parliamentarians by the PBO is to be independent. The Library of Parliament reports through the Parliamentary Librarian to the Speakers of the House and Senate, and its direction and management are completely independent from the executive, meaning the government.
This means that the Treasury Board Secretariat and other central agencies play no role in determining how the library and its offices, including the PBO, operate or perform their mandates. The estimates for the library are prepared by the Parliamentary Librarian and approved by the Speakers of the House and Senate. They are then transmitted to the President of the Treasury Board, who tables them in Parliament, and nothing more.
As honourable Members and Senators can see, the PBO and the Library of Parliament as a whole are fully independent from the Government in their operation and funding. However, one area where TBS and other departments continue to interact with the PBO is the provision of data.
Specific provisions in the Parliament of Canada Act grant the PBO access to financial and economic data that is in the possession of departments and agencies and that is needed for the PBO to perform its statutory mandate. When providing such data, departments follow statutory limits placed on the disclosure of cabinet confidences, personal information, and information subject to specific prohibitions.
Thank you, Madam Chair.
Last night, I reviewed some background material supplied by the Library of Parliament on the creation of the office of Parliamentary Budget Officer. According to these documents and others that I have read, everything seems to have been done to ensure that things run smoothly. However, after several months, the realization has dawned that relations between the Parliamentary Librarian and the Parliamentary Budget Officer are strained. There are those who say that the Parliamentary Budget Officer is overstepping his mandate by pursuing initiatives not set out in his job description or primary mandate. Others maintain that the Parliamentary Budget Officer's mandate will not amount to much if the incumbent continues to encounter roadblocks in communicating his reports.
You were involved in drafting the job description for the position of Parliamentary Budget Office. A consulting firm was subsequently hired to do the head hunting and to provide an exact job description. In the job description, it is mentioned only once that the Parliamentary Budget Officer reports to the Parliamentary Librarian. However, the job description appears to give the incumbent considerable latitude and his relationship with the Parliamentary Librarian seems limited to something more superficial. In fact, he could operate independently.
In your opinion, is the PBO which you helped create and which is experiencing some growing pains moving in the right direction, or is there in fact a problem?
I think that's a very fundamental question.
The office has not evolved as I expected it would, in the sense that I anticipated that it would follow much more closely the perspective of the role outlined in the document he received on the views of a committee of former parliamentarians. I would urge you all to review that document, because I think there is considerable wisdom in that, and it very much guided our future direction of how we should establish the office.
If I could just make a comment, the officer has to be in a partnership with the Librarian with respect to resources, because the Librarian has the legal accountability. The officer seems to believe he is not part of the library, but separate from the library. That is not my reading of the construct of the act. You, as the committee, may decide it should become separate, and that's certainly within your purview, but I think this tension between the Librarian and the officer reflects the fact that each has his own responsibilities. I don't think anybody has challenged the officer's responsibility for the execution of the mandate, but the Librarian has responsibility for the accountability of resources.
Those two responsibilities have to be bridged in some way, and it will take a dialogue between the two participants to bridge it. I'll be blunt and say that until the Parliamentary Budget Officer recognizes that he must work with the library and the Librarian, this tension will continue. Like a bad marriage, if the two parties don't talk, something is going to fail.
As part of my background research, I investigated as many officers of parliamentary systems as I could identify—and there are very few in the world. There are probably only about a dozen, and most of them are created within congressional systems of government, where the executive and the legislative branches are very separate, and the office created is a servant of the legislative branch, full stop.
This office is an experiment within a Westminster-style of government, where the executive is part of the legislative branch. In that sense, you have to bear in mind the constitutional conventions governing the overall state of how governments in a Westminster system operate. I don't believe you can create a separate office for a budget that doesn't have to reflect the fact that there's still an executive embedded within that legislature. It's quite different.
Briefly, I didn't find any precedents for this in a Westminster-style system of government. There is a type of office in the United Kingdom called the scrutiny office, which is staffed by public servants on loan. Its main function is to try to improve the interpretation of data provided in expenditure proposals placed before the United Kingdom Parliament. I think there are 18 individuals in that office at the present time.
In answer to the other part of your question, I considered the constitutional framework, but I didn't consider whether there were any other options for the design of the office, because I was governed by what the statute provided. When I was engaged, that statute was in second reading before the Senate, and amendments, to the extent it was going to be amended, had already been tabled in the Senate and the House. So I was dealing with what Parliament would obviously approve. That constrained my terms of reference.
Because it is the only such office in the Westminster style, I think it behoves us to try to make it work.
Mr. Darling and Mr. Wild, I have four questions, and I'll pose them rapidly. I hope we'll have time.
In your opinion, could a source of the conflict--as you've identified that there is a conflict here--reside in the insistence, I suppose, by the executive to retain the authority to appoint the budgetary officer? Because the appointment was by Governor in Council, as opposed to from within the library itself. That's the first question.
Second, when I read the act, I sensed there was an inherent conflict in giving the budgetary officer the ability--and I don't deny there should be an ability--to direct the use of staff when required, yet the ultimate responsibility for the allocation of resources rests with the library. How could that be addressed?
You referred to the style of reporting, and then you encouraged members to read former parliamentarians' reflections on this matter. I would like you to elaborate on that. You said this was one of the areas that we, as a group, perhaps should consider.
Finally, Senator Stratton asked you this, and you said yes, that the responsibility of setting up protocols rests with the budgetary officer. I would have thought that establishment of protocols also requires agreement with the Department of Finance and Treasury Board officials, and Parliament, because it is the entity that this office serves. Would an agreed-upon protocol--agreed upon by the budgetary officer, the governmental institutions, and Parliament--be an avenue of solution?
Could I go back to your first question, which was whether there was a conflict inherent in the way the appointment process worked?
To my knowledge, no, there was not. Mr. Page was one of many candidates approached by the executive headhunters to consider the position. He agreed to participate in the interview phase. It was quite clear, in his mind—and he had the documents you have in your binder—that he was part of the library.
The style of appointment tended to underline, because of the key role it gave to the Parliamentary Librarian, that this was indeed within the library. I think it's only when he arrived that Mr. Page concluded he should set up what I would call an independent office.
He's not drawing on any of the other support systems, as far as I understand, within the normal mechanisms of the library to support parliamentarians. He is drawing upon the central corporate services, the finance services and personnel services, to support what he's doing, but he's not engaged in a dialogue to work out procedures and protocols.
Let me go to your second question, but I'll give you an example for the first.
Is there a potential for conflict in the allocation of staff? There could be. But at the moment, Mr. Page has not asked for any staff from the library. He has insisted on hiring only staff who report directly to him. And when I look at his mandate, for example, he is to assist you as parliamentarians in the review of the expenditure estimates of government. Those estimates take place in a very tight timeframe under parliamentary rules, and the entire resources of the research branch are utilized to assist all the committees who have to do that review.
If you have to start staffing a separate parliamentary budget office to duplicate that function, or, alternatively, to strip that capacity out of the research branch and assign it to the Parliamentary Budget Officer, you are designing an entirely different support system for Parliament from what is in existence today, and you ought to think seriously about the implications of doing that.
Thank you very much, Chair. I appreciate it.
Thank you both for appearing today.
I have to tell you, at a time when the economy's going to hell in a handbasket and we're spending unforeseen billions of dollars and going into deficit, the fact that we're debating the person who is going to be providing us with analysis of what's going on economically is just plain nuts. Hopefully, we'll get this resolved quickly.
I was interested to hear, Mr. Darling, that you went as far as you could in referring to an independent office, given the legislative framework you were handed. I'd like to take you outside of that and just ask you, what would be the downside? I ask this because some of us are looking at this and saying the only way we're really going to resolve it is to have an independent officer of Parliament, and decide what the rules of engagement are, if you will, and then move forward. And rest of this is just not going to get cleared up.
I can make the argument for the upsides. What are the downsides, aside from the cost? There is an increased cost, I accept that—and that may be the biggest downside. But are there any other downsides we need to consider structurally, were we to go to that system, if you will, rather than this unravelled golf ball we have now?
That's a very good question, and it's one I did some reflecting on. I realized that until we had the individual in place it would be difficult to set out any protocols. But you have a point of view of the guidelines, set out by the officer in his operating model, which he posted on his website. One of his guidelines is that he will only appear as a witness and he will publish in advance on his website everything he does.
I have difficulty with that, for two reasons. The first is that the individual is presuming how he will relate to Parliament. Maybe Parliament would rather he appear not as a witness but as a briefer to the committee. I think Parliament should review how it wants its relationship with this individual to evolve.
My second difficulty with it is, as I pointed out in my remarks, that three of the four mandated areas are on request. It seems to me, as a matter of courtesy, that if I request something, I receive the report and I decide what use I wish to make of it, including doing nothing with it. I think that control must also be in the hands of parliamentarians.
I think there's a void here that needs to be reviewed, and that some steps need to be taken to clarify, because I think Mr. Page put a proposal out and I don't think you've had any discussion as to whether it's an acceptable proposal. I would urge you to examine it. That's one of the comments I made in my opening remarks.
I do think there should be a different regime from what's there now.
My short answer to your question is that I think you should look at how you can strengthen the overall staff support capacity to improve the review of estimates. Whether you embed it in an independent Parliamentary Budget Officer or leave it with the library and separate that function out--it could go either way.
Let me remind you that the review of the estimates, in committee stage, in the House, was only added to this bill on the suggestion of a former Clerk of the House, Robert Marleau. It was never part of the original construct that was tabled by the government.
Quite frankly, it was accepted by the government, but there weren't any consequential changes made because of that. For example, with that addition, you should have listed in this statute a reference to the parliamentary Standing Committee on Government Operations and Estimates. It's missing. The budget that was set up, and it was a very notional budget before anybody started to think about how it would work, assumed that the focus would only be on the costing of requests, the costing of private members' bills, which was subsequently dropped, and preparing a report on the analysis of the economy.
The concept has evolved, and it will continue to evolve. I think we should be conscious of that.
Your suggestion of embedding a capacity within a parliamentary library or Parliamentary Budget Officer to provide Parliament with continuous review and analysis of expenditures of departments is a step forward. I think there are other areas that could be improved on, such as changing the format in which you appropriate money for estimates, but that's an entirely different discussion.
I think it's a positive idea, and it should be part of your thinking of how you want the support of parliamentarians and the review of the estimates to evolve.
Just on your comment, indeed there was a job description. You have it in your binder. It was sent to the Privy Council Office on December 22, 2006. They finally classified it in July of 2007 and they classified it at a level—and this was subject to discussion in two other parliamentary committees, one in the Senate and one in the House—equivalent to an executive director, an EX-3 in the public service, one step below an assistant deputy minister.
It was our judgment that the level probably wouldn't attract good candidates, and we asked the recruiting firm to approach every person they could identify who would have appropriate qualifications, recognizing that the salary could be a barrier. The firm did that, and a number of individuals refused to be considered for the competition because the salary was too low. And in fact Mr. Page, when he participated in the competition, made clear that he would not accept the appointment unless he received a salary equivalent to the grade he then held in the public service, which was at an assistant deputy minister's salary level.
So there were some problems in recruitment related to the level of classification, in that qualified candidates screened themselves out at the salary that we could legally represent was available.
I think the accountabilities are there. I have just one further point. Before I left the office, I had prepared job descriptions for two direct reports to the office, one being for the position responsible for fiscal analysis, and the other for the position responsible for budgetary analysis. The officer made changes to those, and that's his right, but there was work done to help get that person operational as quickly as possible. He received those job descriptions upon his appointment.
And thank you for appearing here today, gentlemen.
My question is to explore a little further your comments, Mr. Darling, on the differences between the congressional system and the Westminster system and whether there is possibly a difficulty in this mainly due to how the congressional United States system functions. It's a two-party system, and this is a multi-party system. Does that add extra complexities?
Was the method of reporting ever detailed in job descriptions or given some definition? It would sound to me as though some matters, such as simply putting information on a website and releasing information during possibly sensitive times such as writ periods, could be readily dealt with. Understandably, parliamentarians are still members of Parliament until the day of an election, so we still have duties to do during the writ period. That might be an additional complication.
The question is about the complexities of the congressional versus the Westminster model and the methodology of doing the reporting, which sounds as though it would either be in conflict with the government's main reporting or would be duplicating the effort of doing the reporting. My comment is that maybe it is a more explanatory commentary on the government's reporting that should have been the intention of this job description.
Could you comment on some of that, please, Mr. Darling?
First of all, let me state quite clearly that in my opinion this is an officer whose purpose is to support all parliamentarians, and it is indifferent to party structures or the number of parties in the House. It can work in any model. It's there to provide information to all parliamentarians. I don't think that's an issue. I don't think it's an issue in the case of the congressional versus the Westminster system either.
On the reporting question, I think the question is how the output of the office becomes released. I've explained my views on that. I think there has to be an engagement with parliamentarians to discuss how they wish it to be released. That hasn't taken place yet. I have views, but I think more importantly you should be looking at options that you would like to put in place.
On the difference between a congressional and a Westminster system, let me say this. The United States' Congressional Budget Office was established in 1974. The reason it was established was that Congress has the authority to add tax and expenditure measures to legislation, and they discovered that they were out of control. They created that office to provide a framework to know what they were doing. That was its prime function. I'm told that today 90% of its work is related to the costing of individual either tax or expenditure proposals from members of Congress or the Senate, and the office's estimate has to be attached as part of one before such a proposal can go forward to the assemblies for consideration.
The office also has a mandate to make a ten-year forward projection of the state of the economy and its impact on the fiscal expenditures of government. Interestingly, Tim O’Neill, when he did a study for the Department of Finance in 2004, made a similar recommendation for some sort of office that would have that long-term outlook. That was never implemented, and I don't think ten years is a very helpful framework anyway.
South Korea set up an office in about 2003 modelled on the American one. The Philippines have had an office, again modelled on the American one, since about 1989. You find in the European community some variants on the model. There is an estimating capacity in the government of the Netherlands. It's an interesting model. First of all, everything they do they put on their website—I think that may have influenced Mr. Page—but they are mandated to provide a cost of the electoral platform of every party that is running for office in that country and post it.
I'm making these points only to say that you can define what you want an officer to do. It doesn't matter what the system of government is, but in terms of its fundamental operating, you have to respect the constitutional frameworks that bind the government and how it operates and respect the role that parliamentarians and Parliament have in giving assent to what is being proposed.
I don't know whether that helps, but that's my thought.