Finance Committee on May 10th, 2017

[The Vice-Chair, Conservative, Ron Liepert]

Okay.

Did you want to take a few more seconds?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

I simply want to say a word in French to conclude.

Mr. Page, thank you very very much for the services you provided to Canada. As you know quite well, the party I represent sometimes had an opinion that differed from the content of your reports, but that is how democracy works. You were there to present your vision, and then the political debate took place. We are very proud to have worked with you.

We are especially proud of the services you provided to Canada.

[The Vice-Chair, Conservative, Ron Liepert]

We'll go to Mr. Grewal.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, sir.

Thank you, Mr. Page and Mr. Khan, for being here today.

Mr. Page, I'm going to go back to the original question. In your opinion, is the mandate of the PBO to work for parliamentarians and Parliament, or is it for Canadians?

[Kevin Page]

It works for parliamentarians. When we were drafting reports, however, we wanted to write them in such a way that all Canadians could read the reports. Effectively, then, you're working for both, and you do not want to work in a partisan way, so in that sense you feel that you're working for what is best for the country.

[Sahir Khan]

We did a great deal of consultation in the initial period in the PBO, and we heard from a number of parliamentarians that it's very important to reach Canadians. Financial and economic language is not the language of politics, necessarily, so there was a very important educational opportunity to ensure that our work was accessible, that we were explaining it to people. A number of MPs from all parties said, if our constituents can appreciate and understand the material, it will reflect back to us, and then we can use it and start to get a filter for what's important to us.

We learned over time that parliamentarians are very close to their constituents and that it's important that we consider that they both matter.

[Raj Grewal, Liberal, Brampton East, ON]

I wouldn't disagree with you at all. Democracy functions best when parliamentarians are the voice of the people.

I want to know about the costing of political parties' platforms. It's a great tool to give Canadians an independent verification of what a party is campaigning on. A party can't just say, we're going to give everybody $100 a day and also balance the books. I think it's extremely important. Other countries, Australia and the Netherlands, already have this in place.

You mentioned, Mr. Page, when the question was asked by my colleague, that it would be very labour-intensive. In what way do you see the PBO as being able to carry out this function? There has to be a certain framework, such as that the platform is submitted to the PBO x number of days before a writ period, to ensure that they all come out on the same day. It wouldn't be that party A submitted theirs and it was released, and then party B's was submitted, and party C's was released two days before the campaign. The costing, in my humble opinion, would have to be done before the writ period so that it doesn't impact the decisions or isn't like the October surprise in a Canadian election.

[Kevin Page]

Yes, sir, I wouldn't imagine that the parliamentary budget officer or office is going to do much sleeping before the election writ is dropped. You would need to have a process that had all of what you described. In addition, you would have to have relationships with all the key departments so that you had access to data and models.

Also, you'd have to expect that the parliamentary budget officer and officials in the parliamentary budget office would be spending time with the political parties understanding the proposals. Often these proposals would not be defined in such a way that you could do a real analysis.

There would have to be stipulations around when you release these reports and how the analysis is presented, before they use the stamp of the parliamentary budget office.

[Sahir Khan]

Look at the Australian model. The PBO does a great deal of confidential work for political parties during the year. By the time you get to a writ period, they actually have a kind of costing book that has been done confidentially for MPs. That's a particular way to do this work. It's one modality.

It also runs in conflict, however, with what the OECD guidelines are for independent fiscal institutions, to which Canada is a signatory. These say that work should not be confidential, that it should be released simultaneously to all parties. As Mr. Page has said, the modalities matter, and this committee probably has a stake in how that new obligation of the PBO is actually discharged.

I'll also add that there's always an element of risk. Some of the major costing reports we did for parliamentarians, such as that on the F-35 fighter jet, take months to undertake, and that's if you get the data. In that case we didn't have it, so it took a little longer but we still did it. The issue is that it may not always dovetail with electoral processes.

[The Vice-Chair, Conservative, Ron Liepert]

Mr. Grewal, I have to end it there and thank Mr. Page and Mr. Khan.

I ask committee members to please stay in your seats. We're going to have a presentation by the parliamentary budget officer first, and then we'll break for the vote.

Thank you again, gentlemen. If I could have the group come up as quickly as they can, we'll do the presentation before we break.

Mr. Fréchette, I'm not going to do the introductions. If you want to introduce your team, please go ahead. We have about six minutes for the presentation. If we don't finish, we'll have to come back, but I leave it up to you.

[Jean-Denis Fréchette, Parliamentary Budget Officer, Library of Parliament]

Thank you. I'll go quickly to my remarks.

Mr. Chair, vice-chairs and members of the committee, thank you for this opportunity to address the changes to the PBO's mandate and operations, as set out in Bill C-44.

You have in your hands a discussion paper that outlines the major implications these changes could have on the PBO's effectiveness and ability to provide services to members of the Senate and House of Commons.

There is a paradox in the drafting of this bill. In the introduction, the new mandate is well written and respects the spirit of the PBO's role, as evidenced in proposed section 79.01:

Sections 79.1 to 79.5 provide for an independent and non-partisan Parliamentary Budget Officer to support Parliament by providing analysis, including analysis of macro-economic and fiscal policy, for the purposes of raising the quality of parliamentary debate and promoting greater budget transparency and accountability.

The paradox comes later when the bill imposes restrictions on this independence, in addition to undermining the PBO’s ability to effectively and efficiently respond to Parliament's requests. The most restrictive restrictions include, first, the degree of control that the Speakers of the Senate and the House of Commons will be expected to exercise over the office of the PBO’s activities; second, the limits of the PBO’s ability to initiate reports and members’ abilities to request cost estimates of certain proposals; third, the risks flowing from the PBO’s involvement in preparing cost estimates of election proposals; and finally, the restrictions on the PBO’s access to and—this is important—disclosure of information, and the lack of an effective remedy for refusals to provide access to information.

I see no problem in submitting a work plan to the Speakers. However, the PBO would become the only officer of Parliament to require the approval of both Speakers for his or her annual work plan. It seems clear to me that this will place considerable pressure on the two Speakers in regard to their neutrality, particularly during an election year and especially in the absence of a joint committee that has yet to be created.

Furthermore, if one adds to that obligation that the direction and control of the office of the PBO and its officers is vested in the Speakers, it is easy to see how time-consuming it could become for them and their own administration. That is why I'm fairly confident that this aspect of the bill will be reviewed and revised by the government.

The current wording of paragraph 79.2(1)(f), which deals with the freedom of any member of the Senate or House of Commons to request an estimate of the financial cost of any proposal, can be interpreted in more than one way and should be clarified.

Lastly, with respect to access to information, the absence of any mention of a remedy in the event of a refusal suggests that it will be up to the two Speakers to intervene in the event that a department or agency refuses to provide information requested by the PBO, or refuses that information be released by the PBO. This too could exert additional pressure on the two Speakers, and create a challenge for their staff, which will have to manage these matters of parliamentary privilege.

Thank you, Mr. Chair.

[The Vice-Chair, Conservative, Ron Liepert]

Thank you for your remarks.

We have only five minutes, so I think we will now break. I would ask committee members to please get back here as quickly as you can after the vote.

[The Chair, Liberal, Wayne Easter]

We'll reconvene.

Welcome again, and thanks for staying, folks.

We'll go with five-minute rounds, starting with Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair, and thank you for your patience, gentlemen. It is very much appreciated.

First, I have just a general comment. As a new MP—I guess I've been here about 18 months—the PBO to me is an indispensable tool in what I do as a parliamentarian. I know it was set up under a prior government and then rather—I'm going to use my own words—had its wings clipped a few times and has been restrained. We've now come out with some new legislation that I think improves it. Our House leader has stated in the House that amendments are welcome, and so forth.

For me, the PBO is something I utilize frequently. I look forward to your reports and read them. They allow me to do my job in a more effective manner, absolutely. Thank you for that and for your service.

My question relates to the proposed legislation, concerning making the PBO an independent officer of Parliament. How important is that component?

[Jean-Denis Fréchette]

How important is it? It's very important. As a function that provides services to parliamentarians, it is important for the capacity of an independent officer of Parliament to provide transparency, to be honest and open in providing information to parliamentarians on a non-partisan basis, and also to have a positive relationship with the public service. I think the culture of the public service will have to undergo some evolution in terms of accepting what the parliamentary budget officer is doing for the parliamentarians, hence the importance of independence.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Okay.

I've read the report that was issued on May 3, 2017, on the reforms of the office of the parliamentary budget officer put out by your office, which listed some concerns about the legislation. I want to ask you to elaborate on concern number two: limits to the PBO's ability to initiate reports and members' ability to request cost estimates of certain proposals.

Can you elaborate a little more what your views on that concern are?

[Mostafa Askari, Assistant Parliamentary Budget Officer, Office of the Parliamentary Budget Officer, Library of Parliament]

There are different parts to that part of the legislation. The first part of the mandate is very prescriptive, in the sense that it stipulates that the PBO can provide assessment of very specific government documents, and there are four mentioned in the legislation. That, to us, is very restrictive, because during the year, outside of the budget cycle, the government may actually table other documents on other programs that they may decide to propose. That part of the legislation essentially prevents the PBO from providing a fiscal or economic assessment of those documents.

The other part of this mandate relates to the rights of members of Parliament and senators to request the PBO to do studies. The language that is in the bill right now in fact restricts any request by members of Parliament to ask the PBO to do costing of government programs, because in the way this is worded right now, it's only on the issues that the members are considering to propose rather than the proposals that are made by the government. That, then, is also restrictive.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

On that point, then, we introduced, for example, the groundbreaking and transformational Canada child benefit. The PBO did an analysis of the cost of it. We've indexed the program, which is great, and it's going to reduce poverty by about 40% for children, which is also an historic measure for us. With the existing bill, to get the cost assessment of it would require that a member of Parliament request it, if the legislation stays as proposed; whereas now you can just go out and do it because it is a government piece of legislation.

[Mostafa Askari]

No. In fact under the proposed legislation a member of Parliament cannot ask us to do that costing. The committee can, but not a member of Parliament or a senator. We won't be able to do that costing on our own, because the only way we could do it is if it were part of our work plan, which means that you would have to anticipate what the government was going to propose, which is again impossible.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you Mr. Sorbara.

We go to Mr. Albas for a five-minute round.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you Mr. Chair. I'd like to thank all our witnesses today for the work they do for Canadians, particularly for parliamentarians. On that note, I would like to ask a few questions.

First of all, do you feel that two hours of study of this portion of the bill is appropriate for the level of what we're doing here?

[Jean-Denis Fréchette]

You are the legislators. It's not up to me to decide whether it's appropriate.

If the bill were easy.... As I said in my opening remarks, there are some paradoxes in the bill. It seems to be written in two different ways: in one way to provide independence, and in the other way with a lot of restrictions. I cannot say two hours, four hours, or whatever would suffice. I'm just saying that there is something that has to be fixed in the bill to provide real independence to the PBO.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Were you consulted on the nature of the changes presented in Bill C-44 before they were tabled?

[Jean-Denis Fréchette]

No. We were consulted in early 2016. We were asked to provide some kind of draft legislation—our own vision—which we released in mid-summer because the document was leaked. Since then, we have had no contact with anyone on the legislation.