Government Operations Committee on Oct. 27th, 2009

[The Chair, Liberal, Yasmin Ratansi]

Committee members, we have quorum, so we will begin.

We have before us Mr. Kevin Page, the Parliamentary Budget Officer. With him are Mostafa Askari, who is an assistant parliamentary budget officer; Sahir Khan, who is also an assistant parliamentary budget officer; and Peter Weltman, who is a financial adviser.

I understand, Mr. Page, you have some opening remarks. So we will begin with that. You're available for two hours, right, Mr. Page? Fair enough.

The floor is yours, Mr. Page.

[Kevin Page, Parliamentary Budget Officer, Library of Parliament]

Thank you, Madam Chair.

My staff and I appreciate the opportunity to appear before the committee today to answer your questions regarding my recent assessment on the government's third quarterly report on budget implementation.

Before we begin with questions, I want to first take the chance to provide some context regarding, one, the purpose of my assessments; two, key considerations regarding the government's most recent report; and three, where we go from here on quarterly reporting to Parliament.

As all of us are aware, the quarterly implementation reports to Parliament were a key condition for legislative approval of budget 2009. At the time, there was an appreciation across many countries, not only Canada, that the unprecedented level of fiscal stimulus warranted greater transparency on the part of governments. Shortly after this, your colleagues in the House of Commons Standing Committee on Finance asked me to prepare assessments on each quarterly report prepared by the government.

The purpose of my assessments is to highlight areas where parliamentarians may wish to push for greater transparency in the reports—in particular, to highlight information and analysis that could help Parliament provide oversight on the economic stimulus package.

From the beginning I have used three principles to guide my assessments. One, members of the Canadian Parliament should be able to expect a level of reporting comparable to that provided to legislatures in other international jurisdictions. Two, the government's quarterly reports should meet the same quality standards as existing financial reporting to Parliament. Three, the government should only be expected to share data and information that is already collected in the normal course of its businesses.

The last point is particularly important. Whenever we highlight information gaps, it pertains to data already collected and held by the government.

As I mentioned in our first report that was issued in March, the content and quality of reporting to Parliament on public money is a long-standing issue. There have been several reforms and uneven progress over the past decade with respect to the estimates. As such, it is important that we all have realistic expectations regarding what the government could achieve at the outset.

In my first assessment, I highlighted the need for balance in reporting between the level of reporting and the need for expediency. I identified the types of information that are already collected by the government, which could be useful to support Parliament's oversight and answer basic questions like:

– How much money?

– For what?

– How many people will be helped?

– How many projects will be funded?

– How will it be implemented?

– How is success measured?

– What are the key risks?

– How will they be managed?

To help track each of these indicators, my staff prepared a monitoring spreadsheet to capture and organize all information presented in the government's reports. It is currently over 47 pages long.

In my second assessment, after reviewing the substantial additional data presented by the government, I concluded that parliamentarians might benefit from a more strategic approach to reporting. This means: more detail on the larger, higher risk programs; less information regarding smaller, lower risk initiatives; and better organization of the information that is reported.

Drawing on good practices in other countries, my second assessment also included draft templates that could be used to organize the implementation data in a more useful manner. I also attempted to initiate my own analysis of infrastructure stimulus spending using the data collected by the government through its own reporting requirements.

By the third report we expected there would be some clarity in the links among inputs, outputs, and outcomes.

In my most recent assessment, I noted that the government continues to make progress on improving the quality of its quarterly reports to Parliament; however, this progress falls short on what one might reasonably expect. In particular, the government continues to use a one-size-fits-all approach to reporting, which means that smaller measures have a good level of exposure, but parliamentarians could be left wondering about progress on larger items such as infrastructure.

I also suggested that parliamentarians might benefit from improved organization of the government's reports. For instance, the names of some initiatives change from one report to the next. It's a small thing, but it makes it hard to track progress over a nine-month period if the titles of programs are changing.

Finally, I indicated that parliamentarians might wish to ask the government to establish a comprehensive framework to assess the success of budget 2009 in achieving the government's economic objectives of growth and job creation. By drawing on good practice in the United States, I outlined four potential approaches that you might ask the government to use.

As I have highlighted throughout my assessments, the government's quarterly reports represent a unique opportunity to test drive and improve interim reporting to Parliament. While the reports are not perfect, they do represent a substantial improvement on the current financial reporting regime, where the budget is presented early in the year, the estimates are tabled in March, and the public accounts are presented about 18 months later. During the year and a half between the estimates and the public accounts, Parliament has very limited information to assess whether and how well the money they have appropriated has been spent.

Some in this Parliament have argued that this lacuna undermines the key constitutional responsibility of legislators to provide oversight of the executive. In that spirit, the government is to be commended for beginning to provide legislators with relevant financial and operating information that could be used to exercise oversight of public moneys. For the first time, the quarterly budget implementation reports allow members of the House of Commons and Senate to answer basic questions like the following. Has this program been implemented yet? Are there any results to date? Have there been delays in implementation?

With this in mind, I released another note last week that generally supported the government's proposal to implement a legislative quarterly reporting regime for all departments, agencies, and crown corporations. If this, the legislative amendments in Bill C-51, receive royal assent, Parliament will begin to benefit from this type of disclosure that's already provided in many other OECD jurisdictions, Canadian provinces, and U.S. states.

At the same time, I have also highlighted several considerations that parliamentarians may wish to debate as this proposal progresses, including the following. What type of non-financial data should be included in the reports, such as staffing figures and disclosures on high-risk, large information technology projects. How will the reports be linked to the budget and estimates to ensure that Parliament has a cohesive view of federal finances? What options are available to minimize the cost and disruption of the new reporting regime on the financial community and the public service, which is currently juggling several other reform efforts?

Thank you for the opportunity to make an opening statement. I look forward to your questions.

[The Chair, Liberal, Yasmin Ratansi]

Thank you, Mr. Page.

And I understand you have brought the 47-page spreadsheet. Is it available for general distribution? Is that what your intent was?

[Kevin Page]

We brought some copies with us. It is certainly available on our website. We understand it's very onerous. There is a lot of very detailed information contained in there. It's probably not something that lends itself well to examination at this type of committee, but it is background information available on our website.

[The Chair, Liberal, Yasmin Ratansi]

Okay, fair enough. The reason I asked was that you had mentioned that 47 pages, and if somebody wants to take a quick look and just understand how your flow chart works or how this spreadsheet works, then perhaps they can. But if you feel that might be onerous or might confuse the committee, then I will leave it.

[Kevin Page]

We do have a number of copies here that we can make available. I'm not quite sure we have enough copies.

[The Chair, Liberal, Yasmin Ratansi]

Fair enough. Thank you.

We'll go to our first round of questions for eight minutes, and we will start off with Ms. Hall Findlay.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you very much, Madam Chair.

Thank you very much, everybody, for being here and taking the time to be with us this afternoon.

Mr. Page, from listening to your comments and reading the report, I think you are being appropriately diplomatic in suggesting that more detail on larger, high-risk programs would be good, with perhaps less information on smaller, lower-risk initiatives. However, I'd like to read from a recent article by Jim Travers of The Toronto Star, where he talks about your trying to winkle sense out of the most recent Conservative stimulus report:

Along with noting the critical absence of key data on how billions are being spent and what they are, or are not, achieving, the Parliamentary budget officer points a frustrated finger at the federal practice of creating confusion by changing programs names, definitions, and purposes.

Obviously he's being a little more blunt than you are.

I have two parts to this question. You have indicated frustration in the past due to sheer lack of information. I can assure you that we share that frustration in this committee. For several months now, we have been asking for detailed numbers on infrastructure spending, even before the stimulus package was proposed, because of earlier concerns about the Building Canada fund and money not being spent. I hope to ask a little more about that later.

In your efforts that have been challenged to just get information, what reasons are given for not providing that information? Can you comment a little on this changing of names and changing of departments? We've certainly seen the same thing in the estimates and found it extremely hard to track. If you can comment on that as well, it would be very much appreciated.

[Kevin Page]

Thank you for your questions.

On the first question, we have an information protocol that we developed working with central agencies. When we request information in order to do our analysis, we typically send a letter to the deputy minister of the department and give what we think is sufficient time, depending on the nature of the request, for them to provide a response. On the issue relevant to today of the infrastructure stimulus fund, we wanted more detailed information on the quarterly reports the department was getting. We asked for it at the beginning of September. We gave a roughly two-week window. We have not received that information yet. So two months have gone by.

I had a conversation very recently with the deputy minister, who indicated this information will be coming very shortly. I'll likely get it this week and start to roll it out on a province-by-province basis, so we consider that to be very good news. We were told that information will include whether the project has been announced and signed off by both ministers; the total outlays for disbursements at the federal, provincial, and regional levels; and the timelines for implementation of the project. That's really good news, but we still haven't received that information, so we're not in a position today to give you the economic stimulus value of the money being spent.

So we apologize we're not in a position to provide the appropriate briefing to you today on that economic stimulus impact. The reason provided to me by the deputy minister is that it's a substantive data request. In the case of the infrastructure stimulus fund, you're talking about thousands of projects across all provinces and territories. They needed more time to clean up the database, and we expect to get a spreadsheet in a very few days.

On the second point, maybe I'll ask Sahir to highlight some of the areas where we've identified changes in names. It's part of that detailed 47-page spreadsheet. We track every initiative in budget 2009, and there are more than 100 initiatives. For every initiative, we track when the authorities were provided. We go through each quarterly report to see if there are any indicators, output measures, performance measures, or expectations of results. Do we have any indication of what moneys have flowed? It's available to you on a measure-by-measure basis that you can use. We want to make it available. Through that detailed level of tracking we have noticed that things have changed, so we've highlighted that. We don't mind doing that.

I don't know what the reason is, other than perhaps the government thought a better presentation was necessary. It's probably be a question better put to Minister Baird.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you very much.

You expressed almost an apology for the inability to provide more detailed analysis. And on the record, I will thank you and your entire office for the real efforts in providing that analysis and recognizing that it's really hard to do without the underlying information. So I just want to say thank you, at least for the effort.

Quite honestly, I'm a little bit concerned about letting the government off the hook by saying it needed more time. We have witnessed several countries engaging in the same exercise, recognizing that stimulus was needed and putting money out the door. The United States, for example, on its website www.recovery.org, has an extraordinary amount of information that is detailed.

With regard to projects the municipalities are involved in, for example, we had the Federation of Canadian Municipalities and two municipal representatives from Quebec at committee not too long ago talking about how so many of the projects that have been announced have not yet been started. And that, combined with the timeframe of 2011.... They've been very clear. It is still the policy that if a project is not finished by 2011, then the municipality will be on the hook for the costs. The number that was given was 3,000 projects that have been announced to great fanfare--the government is quite happy to take advantage of announcements. But announcements don't make jobs. And only a third have actually broken ground. We now have lost the construction season.

For the remaining two-thirds of the projects, from a budgetary perspective, if you were in a municipality.... I know it's awkward to put you in this position, but theoretically, if you were budgeting for a municipality and you now saw half of your window disappear because of the construction season being gone, would you not be thinking twice about whether to actually start some of those projects if you knew you were going to be on the hook if you couldn't get them done within only a year?

[Kevin Page]

I think this would be a major concern for municipalities in most regions of Canada--their ability to start projects in the fall or winter season, depending on the nature of the project.

Once we get a chance to look at the spreadsheet data provided by the Deputy Minister of Transport, Infrastructure and Communities, we'll be able to provide you with some of the timeline-related issues and what the jobs impacts, potentially, could be.

That was our original reason for requesting the data, too. In my position as budget officer, I feel that not only do we need to provide advice on the flow of the money--is the money flowing--but on what is the potential impact both in terms of output and in terms of jobs.

When we look at the economy right now, at third quarter we're going to see very modest growth. We still see that we were losing private sector jobs in this country over the summertime. There are a lot of issues about how strong the fourth quarter will be and even 2010. So it's very important that we.... We agree. We need to track the stimulus spending, particularly infrastructure, because that's where the multiplier is the largest and can have the biggest impact on jobs for Canadians.

But again, when we get the spreadsheet, we'll turn our attention to it very quickly to give you that assessment of what the impact could be.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

Madame Hall Findlay, you'll have another chance. We've got two hours.

Next is Madame Bourgeois, pour huit minutes, s'il vous plaît.

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

Thank you, Madam Chair.

Mr. Page, gentlemen, good afternoon.

Mr. Page, this is the second time we have had the opportunity to meet. I remember that shortly after you took up your duties in March 2008, you came to see us, in May 2008. We could feel your emotion because you had just been granted enormous powers under the Federal Accountability Act, but also under the Parliament of Canada Act, given that you were to report to the Parliament of Canada.

We would therefore tend to believe that you would provide us with all the analyses, all of the information, all explanations concerning budgets, and more particularly, the Government of Canada's economic stimulus plan. I kept the documents you provided us with when you appeared before the committee. You have an extremely impressive background. You are a tax expert. And despite the fact that we have such an expert before us, the report does not answer our questions. I find it quite problematic. Nor can we discover what the real impacts of the economic stimulus plan are. Unless I am mistaken, there are only estimates in your report.

One thing made me angry. You attached a request for information sent to Infrastructure Canada to your document. It is a very good letter, respectfully addressing the person you sent it to. You wanted access to all of the databases in order to be able to closely follow the development of infrastructure projects under the stimulus fund, which would be key to explaining this famous plan to us. You added very specific elements.

Unfortunately, the answer you received said that it was impossible to provide you with this information with such short notice. You had given them two weeks, which, in my opinion, seems quite appropriate. Furthermore, I did some research on my own about this. When a department has good planning and is well organized, they can easily respond to the questions of the parliamentary budget officer within 15 days and provide these statistics. So your request was perfectly justified.

Then you were told that you would have access to this information in due course. It was a deputy minister who responded to you—personally, I was blown away by that—while copying a Mr. Timothy Sargent, the Assistant Secretary to the Cabinet in the Privy Council Office.

Since you have worked at the Privy Council Office as a tax expert, could you tell us if we can assume that the Prime Minister's entourage knows that you do not have all of the documents required in order to answer parliamentarians' questions?

[Kevin Page]

I do not quite understand why I did not receive the information. It might be better to ask those questions to the Minister of Transport, Infrastructure and Communities' deputy. Recently, I spoke to him and he told me that it would be a huge project and that he already has several projects. Ms. Finley told me that, with approximately 3,000 projects, it is a lot of information, and it is difficult to create a good structure for that information. It may be best to ask Mr. Baird those questions.

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

That is fine, and furthermore, that is what we will do.

Now, if I am not mistaken, the projects should have been submitted in June. In theory, in September, at least half of the infrastructure projects—if not all of them—should have been submitted, so that we would know if there had been a fair, forthright and honest sharing of them between the provinces. However, we do not have them.

My attention was also drawn to your appendix C. This appendix includes plans and expectations, and the right-hand column deals with actual performance. I underlined the names that were all listed. Does that mean you did not receive the answers?

[Kevin Page]

Yes, that is true.

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

Mr. Page, without wanting to put you on the spot, how can you claim that this famous economic stimulus plan has been implemented properly and that all of the projects are transparent and in compliance?

[Kevin Page]

Without the information, I am not in a position to state that the infrastructure projects have had a positive impact on the economy.

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

So currently, we are relying on estimates. You must feel somewhat uncomfortable in your position. In fact, when you appeared in May 2008, you told us that your mandate included an important provision giving you the right to “... to free and timely access to any financial or economic data in the possession of the department that are required for the performance of his or her mandate.”

You have those powers. Are we to understand that the Privy Council, the departments and the people in this government overseeing financial activities are stripping you of your rights and thumbing their noses at parliamentarians? In fact, you must report to Parliament. In short, it seems that these people do not give a hoot about the requirement to report and to demonstrate a degree of transparency.

[Kevin Page]

I agree that we need to improve the accountability and that a certain level of transparency is required. It is true that I did not receive some important information to allow me to do my work.

[The Chair, Liberal, Yasmin Ratansi]

Ms. Bourgeois, your time is up.

Thank you.

We'll now go to Monsieur Jacques Gourde.

Pour huit minutes, Monsieur Gourde.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you, Madam Chair.

Good afternoon, gentlemen.

Your office sent a letter to Infrastructure Canada last September 2nd. Infrastructure Canada responded with a letter dated September 16th. According to your office, you received it on September 23rd. This letter must be subject to the rules of access to information.

It is indicated in the Infrastructure Canada letter that, even if the department worked on providing the information requested, the 10-day deadline—and it must have been 10 business days, in my opinion—was too short a time.

Could you please tell the committee exactly what you were asking for in this letter?

[Kevin Page]

If you wish, we could read the contents of the letter. Is that what you are asking?

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Yes.

[Sahir Khan, Assistant Parliamentary Budget Officer, Expenditure and Revenue Analysis, Office of the Parliamentary Budget Officer, Library of Parliament]

In our letter to the deputy minister, we asked specific questions about the database in which the department receives information from participants in the infrastructure program. The answer about the participants was obtained in the usual way, in my opinion.