The Conservatives may have turned on their own creation. But a study by the International Monetary Fund is full of praise for the Parliamentary Budget Office and the contributions it has made to better fiscal planning and greater public spending transparency despite efforts by the Harper government to derail its work and undermine its credibility.
The IMF report — Case Studies of Fiscal Councils: Functions and Impact — examines six such bodies, all of which drew on the experience of the U.S. Congressional Budget Office and all of which were designed to improve fiscal performance and transparency. Our own PBO seems to have had some of the greatest difficulties in getting its work done due to government stonewalling. But nonetheless, the IMF study says, its work has been impressive.
However, it warns that out PBO faces great challenges in its first transition period, as a new Parliamentary Budget Officer is sought to replace the outspoken Kevin Page, whose first five-year term expired in March. He was not appointed to a second term. It is not only members of the Harper government who dislike the PBO. Many senior bureaucrats are also hostile to exposing their work to greater public scrutiny.
Though Page stepped down in March, no successor has been named and there are legitimate fears that the government wants a successor who will be less inclined to question government accounting.
Page, for example, earned the ire of the Tories for challenging government estimates of the costs of the Canadian military participation in Afghanistan and the full life-cycle costs of the F-35 aircraft. To make matters worse, Page’s estimates were more accurate than those of the government. Likewise, Page’s calculations on economic growth and budget accounting turned out to be closer to the mark than those of the Department of Finance. As the IMF study shows, Finance projections on the economy and on federal spending and revenue have become more accurate since the PBO was created.
The PBO was part of a package of reforms to improve accountability introduced by the Tories after they came to power in 2006 and it received the support of all political parties. The PBO had two key roles: To provide MPs with expertise and independent information to understand fiscal matters and hold the government to account; and to provide an objective assessment of the economic and fiscal forecasts of the Department of Finance and improve their accuracy.
But to limit the role of the PBO, it was made part of the Library of Parliament rather than given full independence, as is the case with the Auditor-General. A bill earlier this year, introduced by Opposition Leader Tom Mulcair, would have made the PBO a full officer of Parliament with much greater independence. But the Conservative majority defeated the bill.
“From the outset, there have been issues surrounding the basic legal and operational design of the PBO, especially concerning its location, budget and mandate,” the IMF report notes. This lack of clarity, the report argues, “has resulted in tensions which the PBO argued threatened his office’s operational independence.” The Harper government reacted to early PBO reports, which highlighted inaccuracies in government accounting, with “an early attempt to reduce the budget and operational independence of the office,” it said.
Even today, the PBO’s mandate continues to be contested. The PBO, seeking details of departmental spending cutbacks, found that many departments simply refused to supply the information. This is shocking, reflecting a contempt for Parliament. Even more shocking, the PBO has had to seek recourse to the courts to get this information. But the issue remains unresolved.
Yet “despite the controversy that has often surrounded the PBO, the office has built up a good reputation, both domestically and internationally, and gain[ed] credibility,” the IMF report says. It adds that the PBO “has earned a reputation for good quality, independent analysis for its research, costings and forecasting work.”
But this isn’t what the government or senior bureaucrats may want.
Within government, the preference is for the PBO to remain a part of the Library of Parliament, with a much-diminished profile and limited power. But if it is to have the teeth as an independent entity working for Parliament and the people, then, like the Office of Auditor-General, it should become an independent officer of Parliament. That would best serve the interests of transparency and the effectiveness of Parliament in holding the government to account and hence democracy itself.
Economist David Crane is a syndicated Toronto Star columnist. He can be reached at crane@interlog.com.