Evidence of meeting #58 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was projections.
A recording is available from Parliament.
Parliamentary Budget Officer, Library of Parliament
Sir, we assume that cabinet did have access to financial information from Correctional Service Canada with respect to crime legislation and that they would never have approved legislation without access to financial information methodologies and assumptions from Correctional Service Canada.
I think our issue has been, should Parliament have access to that information? We think they should have access before they approve financial authorities.
Robert Carrier Bloc Alfred-Pellan, QC
Good morning, Mr. Page.
Good morning, gentlemen.
It is quite refreshing to hear objective comments on our financial situation. I think comments like these are important for a democracy that wants to work well. But what I am hearing is that you are predicting a worrisome structural deficit and that there is little information or fiscal sustainability analysis of some of the government's decisions.
As my colleague said earlier, you described the political climate in one case. But you know from experience that, when we talk about the government, the decisions are inherently political. Regardless of the results of elections or the actual result of the measures taken by a political party in power, the government’s job is to govern the country. Each budgetary or political measure that is established should include a long-term analysis, not only short-term, over a year for example.
Could you please tell me again about the importance of including this analysis in the projections?
Parliamentary Budget Officer, Library of Parliament
I think it’s really important for the government. It is also the IMF's take on things. The government also declared three years ago that it was necessary to make long-term projections to address fiscal sustainability issues. We also talked in our speech today about the importance of carrying out structural analyses and analyses dealing with the quantification of risk, gaps in production and other things like that. It is important that all parliamentarians have a good debate on the policies that should be adopted, as Mr. Mulcair mentioned, to increase growth, productivity or other things.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
In the document you submitted last January 20, you pointed out that the government will not be able to freeze its operating budget and that staff-related expenses will increase by 8.3% per year. The worst part is that decisions made in terms of the Correctional Service will cancel out all the progress that could have been made by other departments in order to reach those objectives. The fact that decisions like that cancel out the government’s objectives is rather serious, in my view. The decision is not well thought out.
Is that the conclusion of your study?
Parliamentary Budget Officer, Library of Parliament
I think there are two major questions. First, there is the objective to freeze operational expenses for three years. Then there is the implementation of crime legislation. I think that if those laws come into force, the Correctional Service will need additional resources.
You are right to say that it is necessary to have a plan that deals with the allocation of operational restrictions, meaning to find out what the impact will be on other departments if there is an increase in the budget of a department.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
You pointed out that the government does not provide you with information easily and that it uses cabinet confidence as the reason for not sending it to you. I read that you obtained some information from the actual departments.
So your entire analysis, which is very important, relies on information that is perhaps truncated or incomplete. Do you think you can still make reasonably accurate projections or recommendations, given that you perhaps have not received all the information you wanted from the government?
Parliamentary Budget Officer, Library of Parliament
In terms of the changes to crime legislation, the only information we have received is public information, such as reports on plans and priorities and information from human resource plans. We don't have the methodology or the department's projections that would allow us to speculate, to do a good analysis and to determine whether the figures from Correctional Service Canada are reasonable. It must also be said that, when we look at the budget plan, there is no adjustment to provide for the changes to crime legislation, neither in the 2010 budget nor in the long-term economic and fiscal update. Lack of transparency is a major issue.
Conservative
Conservative
Mike Wallace Conservative Burlington, ON
Thank you, Mr. Chair, and thank you for coming this morning.
I have a number of questions. The first one from your presentation that struck me was that PBO is committed to expanding its work this spring on fiscal sustainability to include all levels of government.
Where are you getting the authority to look at all levels of government? Is that in your mandate?
Parliamentary Budget Officer, Library of Parliament
Yes, sir, it is.
In the act of Parliament, it says independent analysis on economic--
Conservative
Parliamentary Budget Officer, Library of Parliament
Sir, we transfer a large percentage of the other resources we bring in through the Consolidated Revenue Fund, through transfers, to other levels of government. It's very difficult to look at fiscal sustainability--
Conservative
Mike Wallace Conservative Burlington, ON
Mr. Page, were you not last year asking for more money because you didn't have enough bodies to do the job? And now are you not adding to your own workload?
Parliamentary Budget Officer, Library of Parliament
No, sir. When we provide planning frameworks for you--and again, we're providing this information for you, for all parliamentarians--we want you to have a good sense not only of what those projections are but of the assumptions behind those projections. Is there risk? Is it cyclical? Is it structural? Are there questions of fiscal sustainability, not just for one level of government but for all levels of government?
We provide this for you so that you can make decisions for the future.
Conservative
Mike Wallace Conservative Burlington, ON
Exactly on that point, Mr. Page, as the budgetary officer, I think you've correctly pointed out four key risk opportunities, if you want to call them opportunities.
Why do you not present it this way? I expect you to do the analysis: based on these assumptions, this is what the deficit will be; based on those assumptions, that will be the deficit. And you give us a range. We're not asking you to be right or wrong. We're saying that if those assumptions become accurate,whether that's the GDP, job growth, or all those other things, this is where the deficit will be in 2015 if the results are this.
Why is there not a range? Why is the glass, in your presentation today, in my view, completely half empty and not half full, when we are hearing good news on the economic scene?
Why are you not providing parliamentarians with an analysis instead of an opinion?
Parliamentary Budget Officer, Library of Parliament
Actually, sir, when we provide these projections--again, the projection is in front of you today--as I alluded to one of your colleagues earlier, we're saying that the deficit is $56 billion, or roughly 3.5% in 2009-10. We're saying that the deficit is going to be less than $40 billion this year. We're saying that the deficit is going to fall to $30 billion.
Sir, President Obama released their budget yesterday. If you provided those sorts of numbers to Congress, they would be quite happy.
Conservative
Mike Wallace Conservative Burlington, ON
My question, which you didn't answer, was whether you could provide that for us. Are we not giving you the right direction to be able to provide for us the kind of analysis we would be interested in? I could question you on the assumptions that show us reining in the deficit, the ones that don't, and the ones that make it worse. Could your office do that? Yes or no.
Parliamentary Budget Officer, Library of Parliament
Sir, yes we could. May I add one point?
Conservative
Mike Wallace Conservative Burlington, ON
No, you can't, because I have only five minutes.
I agree with Mr. Paillé. Would you agree that your job isn't to make political comment?
Conservative
Mike Wallace Conservative Burlington, ON
So you picked on transfer payments for health care--which are based on a policy decision and a political decision--and where we're going with them. I actually agree with Mr. Paillé that maybe you should have had a broader approach.
There's a fair amount of politics in your statement today, in my view. For example, I have sent your office, numerous times, when there's been a private member's bill from the opposition, questions about how much funding it would take. I've asked you to tell me what it's going to cost, and you do a great job of letting me know, 90% of the time, that there isn't enough information, that the wording is so wishy-washy you can't make a determination, and that you would have to set up a whole new model and so on and so forth.
I don't see a comment about parliamentarians losing control over fiduciary responsibility. You're willing to comment on a motion by this committee on how economic information from departments, which we've declared is cabinet confidence, is an issue--
