Government Operations Committee on May 13th, 2008

[Kevin Page]

I do not know which departments have been selected.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

My second question pertains to your new duties. Given that you have only a limited number of employees working with you, how do you propose to keep information flowing between the members of Parliament and yourself on an ongoing basis?

[Kevin Page]

Thank you for your question. Today is an opportunity to begin this dialogue with the various members. As I said in my presentation, we have gone through various stages in developing our office. One stage involves consultations, but this will not be completed today. We need to continue.

As I said in my presentation, working on the Hill in this capacity is very different; it's a big learning curve for me. Working with members in the House and in the Senate is something I'm really looking forward to doing in this sort of dialogue. And I hope I have the right personality—I certainly have the energy—to maintain a constant dialogue.

Since my arrival--the appointment was on March 25--pretty much on a daily basis I've had a chance to have dialogue with various members of the House and the Senate. I've only recently started dialogue with various deputy ministers in departments with respect to establishing protocols of information. I met with the chief statistician at Statistics Canada, and I met with the Deputy Minister of Finance only yesterday. That process will continue, but I wanted to move to this process of consultations with you folks in committees and members of the House and Senate first.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

May I add something, Madam Chair?

I would like to congratulate you on this initiative and I hope that you will continue in the same direction. Members, particularly those in the opposition, have seen a decline in the availability of information coming from the government, both from politicians and the public service. This is an important role that we have as members of the opposition and simply as members of Parliament. It is important that we have a two-way relationship with you.

Thank you.

[Kevin Page]

I understand how you feel.

[The Chair, Liberal, Diane Marleau]

Thank you.

Mr. Warkentin.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Madam Chair.

Thank you, Mr. Page and Mr. Sabourin, for coming in this morning. We appreciate your testimony, and appreciate even more the job that you're going to do, or that you've already started doing.

I have to mention and pay some honour to one of my predecessors, Charlie Penson, who worked for almost a decade to see this position come into being. Possibly you know of his work. Certainly people back home are appreciative of this government for finally coming through with what he had been asking for over nearly a decade. Of course, he had ideas about what might be included in this position, and I see that for the most part you are on task to complete what he had in mind.

I'm wondering if you could just give us a little bit of information in terms of your response or how you might be able to assist us when we get numbers from departments or agencies, or even private sector firms with regard to estimates. In this committee a lot of different numbers from different people are thrown around, and sometimes I think committee members want to know where those numbers are coming from, and if the numbers in fact are legitimate. We hear in some cases about amounts amassed in terms of the deficit, in terms of building refits that need to be done within the public service.

Are you going to have the capacity to look through the estimates or look through these numbers to tell us if in fact these numbers are based on actual estimates given by contractors? What is your capacity when we see a number? Are you going to be able to delve into that number and tell us if there's room to play or room to manoeuvre within the numbers we're given?

[Kevin Page]

One of the provisions in the act of Parliament for the parliamentary budget officer is a provision to seek information from departments and agencies. Certainly, when working with members around this table, with other committees, and with other members not part of committees dealing with specific questions, we will have the capacity to approach deputy ministers and their departments to ask for that information. To bring back a deeper understanding of what's behind those numbers would certainly be one of our objectives when we ask for that information.

Often when one is looking at a range of costs, whether it's retrofits or take-up on a certain program, understanding what some of the factors are that could drive some of those costs is almost as important as any point estimate that we could provide to you. You'll have a sense of what class of estimate or projection has been put, if it's dealing with real property related issues or if it's dealing with take-up. Because very often even folks at the Department of Finance for fiscal planning purposes will be forced to put a number on the table, and behind the scenes they worry about take-up on programs. They worry about risk that may happen on the capital side as well. That information is very seldom brought forward.

So I think the role of the parliamentary budget officer will be to work with you to make sure you're satisfied that you have a good understanding of what's behind those numbers.

[Chris Warkentin, Conservative, Peace River, AB]

One of the things that this committee and I have identified as a challenge moving forward is the whole issue with regard to our aging demographic, on two fronts. First is the issue within the civil service of challenges as we look at an aging civil service and how that's going to translate moving forward. But second, we have the concern with regard to services being provided by the government to an aging population.

In your preamble, you did comment on the aging demographics. I'm wondering what interest you might have in that and what interest you might be able to pursue with regard to the aging demographics in the country.

[Kevin Page]

I think there's a lot of focus, and fiscal planning tends to be kind of one-year out. In fact, even in the current environment, there was a lot of focus in the year past on whether or not we were going to have a surplus of $10 billion, $11 billion, or $12 billion. One of the roles of the parliamentary budget officer could potentially be to look at fiscal planning from a much longer-term perspective. It certainly is the case in the Congressional Budget Office. When it looks at these issues it provides longer-term projections. Currently the government provides five-year plans on the economic and fiscal update, but when it actually produces its budgets they're only the current year plus the next two years out.

So looking at issues of aging demographics and other related issues, different policy parameters for different programs, what it could possibly mean to the fiscal situation over the next 10, 15, 20, or 30 years, could be something that the parliamentary budget officer could do. Certainly it could, if it's deemed to be a priority. This certainly plays out in the context of federal-provincial relations and fiscal federalism as well.

[Chris Warkentin, Conservative, Peace River, AB]

I agree absolutely. All these different points are going to be important to pursue obviously in your mandate. You're going to have a lot of work ahead of you, I am certain of that.

Finally, I just want to talk to you with regard to budgets and your ability to consider.... Now, this may be something the Auditor General has to pick up after the fact, but I'm wondering if there's anything you in your position might assist us with, in looking at different departments and the way money is spent on an annual basis. It's my desire, and I think that of many members of Parliament...because in this committee we've heard of the “March madness” syndrome within departments and different agencies. Our concern is that there doesn't seem to be any transparency except for end-of-year responses after the money is spent, after the Auditor General goes in or is able to go in. We don't ever get a full analysis of what might be possible to change or how much of a problem that end-of-year spending is.

I'm wondering if you have any thoughts on that or any thoughts as to what you might be able to do in terms of looking into that particular issue.

[Kevin Page]

I think there are different parts of the mandate of a parliamentary budget officer that would encourage him or her to look at issues around end-of-year spending. I will back up just in terms of one aspect of looking at the whole forecasting-related issue, which potentially could generate some pressure for end-of-year spending in departments. Trying to raise a level of understanding amongst parliamentarians as to what the likely fiscal outcomes could be at the end of the year would actually give you a better understanding of what kind of pressure or scope there will be for significant end-of-year spending. As we move through the course of the fiscal year, if the economy turns out to be much stronger and we have more revenues, you'll know that the government may be exceeding its fiscal targets in terms of fiscal flexibility. Obviously it will create pressure potentially for end-of-year type spending, creation of funds that will be disbursed by the end of year, trust funds, those sorts of things. We could certainly bring that to your attention.

There is a private member's bill out now that kind of looks at quarterly financial reporting. I think it's sponsored by Mr. Segal. As we look to what the best standards are, best practices, in terms of financial reporting through the year, I think that type of information, that kind of quarterly reporting by departments, will allow parliamentarians as well as the parliamentary budget officer to put their finger on large changes in spending that take place through the course of the year and try to get at some of the reasons behind it.

[Chris Warkentin, Conservative, Peace River, AB]

I appreciate that. Actually, I'm the member of Parliament who is bringing carriage to that particular bill in the House. We appreciate the work that we might do together on that particular issue.

Thank you very much.

[The Chair, Liberal, Diane Marleau]

Thank you.

Ms. Bourgeois.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you, Madam Chair.

Mr. Page, as far as I'm concerned, we have progressed too quickly today. I will tell you why. You have been in your position—and that has just hit me—for scarcely one-and-a-half months. Is that right? That means that it is perhaps too soon to be meeting with you. I was expecting more, I was expecting a well-defined plan regarding your role, your priorities, the use of your budget, the number of employees and so on and so forth. I have just realized that you have been there for a month and a half, so you cannot provide us with all of this information. Nevertheless, I want to have this information, as a member of this committee. Perhaps we could make arrangements to have you come back in six months' time to tell us how you intend to analyze the budgets, if you're going to do so based on a planning policy. At any rate, you have to do planning in order to prepare a budget, and you could, at that time, tell us what you are proposing. Meanwhile, I would imagine that you're going to have to consult with members of Parliament. So I would imagine that we would have a plan in six months' time.

I would like to go back to the question of 75-25. I'm well aware of the fact that this applies to public service employees. What's interesting about this is that, given that Quebec accounts for approximately 25% of Canada's population, I would have expected 25% of your team to be Québécois or francophones.

Can you give us any assurances on that regard?

[Kevin Page]

I think that 25% is a good percentage.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

So I would be expecting to see francophone Québécois on your team.

[Kevin Page]

Yes, absolutely.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Excellent. I would also like to know whether it is relevant, in your opinion, for the Canadian government to adopt accrual accounting not only in a general manner but throughout all departments? As an economist, what are your thoughts on the matter?

[Kevin Page]

Yes, absolutely.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

It is relevant. So we are not on the wrong track, as a committee, when we ask that this be the case for each department. Great.

In your presentation, you stated that you were going to be working in cooperation with forecasters from the Department of Finance and the private sector. Why would you want to work with Department of Finance forecasters since, in the final analysis, you have to, if I have understood your position correctly, explain what is happening to the Department of Finance? You don't have to make forecasts, but why would you be working with these people as well as people from the private sector?

[Kevin Page]

I think it is important to have a clear understanding of the various forecasts in the private sector.

Right now the Department of Finance takes an average of 20 private sector forecasts, and behind those forecasts there are some very different expectations around economic growth driven by many different factors--different expectations around what the dollar might be, where oil prices may be, some key assumptions for the economy that will have a huge impact, not only on the national economy but on the regional economy as well. A high dollar, a high oil price have a big impact, potentially, on Ontario and Quebec in particular.

So the work that we can do around working with private sector forecasters is to better understand what's behind their projections--information that is not made available in the budgets--so that you understand what's behind those projections.

Also, I think the role we could play is to take that information and put it in a fiscal context. What does it mean for the federal government going forward? How much fiscal flexibility does it have at its disposal in terms of bringing forth new measures? If we could bring that type of information forward in the fall in a timely way, we think it would help you understand, in a pre-budget consultation mode, what choices the government could be looking at. I think that would be useful.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

To conclude, I would like to tell you that in June and in December 2006, the Auditor General of Canada appeared before us and reported on various difficulties that we, as parliamentarians, have—because people confided to her—in understanding the budget process.

Do you intend to meet with the Auditor General of Canada?

[Kevin Page]

Since March 25, I have had only two opportunities to meet with the Auditor General.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Do you intend to work with her?