Evidence of meeting #121 for Government Operations and Estimates in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pco.
A recording is available from Parliament.
12:05 p.m.
Chief Financial Officer and Senior Director, Costing and Budgetary Analysis, Office of the Parliamentary Budget Officer
As mentioned in Jean-Denis' presentation—
12:05 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
The landing of the Hindenburg went more smoothly than Phoenix.
12:05 p.m.
Chief Financial Officer and Senior Director, Costing and Budgetary Analysis, Office of the Parliamentary Budget Officer
The other thing I'll mention is that on our website our office has published a detailed business case that we submitted to the speakers of the House of Commons and the Senate last year.
The analysis underpinning this business case is based upon the experiences of other independent fiscal institutions and the best practices identified by the OECD and IMF. I will say that we thought it was important to actually put the entire business case on the website, recognizing that as committee members you actually are still waiting for the detailed departmental plans to be tabled by various government departments and agencies. You're actually placed in a slightly awkward situation where you need to vote on supplementary estimates (C) and consider the interim estimates, all without those detailed plans for the coming fiscal year. Under Jean-Denis' guidance we actually decided to go one step further and table and share all that information from parliamentarians so they would be in a better decision to actually make those decisions.
The business case itself proposes a three-year plan that sees our office growing to about 41 staff, compared to the 20 that we had at this time last year, with an ongoing budget of about $7 million per year. I'd underline that this is about 10% lower than what we're proposing for the coming fiscal year, again, related to the non-recurring costs. Most of this additional funding would directly augment our ability to prepare research and analysis for parliamentarians. It would be going directly to the services that parliamentarians, generally speaking, seem to be happy with and have been demanding more of.
Most importantly, circling back to a point that Jean-Denis made earlier, we're confident that our budgetary proposal will allow us to fulfill Parliament's desire for transparent, timely, and relevant economic and financial analysis. Probably more important is the electoral platform costing which is a tall order for our office right now especially when looking around the world and recognizing that there is only one other OECD jurisdiction that actually undertakes this work. To that end as well, I'll also mention that our electoral platform strategy costing document has also been posted to our website and is available for all parliamentarians to take a look at. We're very keen to receive any feedback or suggestions you might have with respect to our initial proposal and our outline.
Thank you.
12:10 p.m.
Conservative
The Chair Conservative Tom Lukiwski
Thank you very much.
We'll now go into our seven-minute rounds of interventions.
Before I do so, however, colleagues, with your approval I'd like to suggest we make this a slightly truncated version because I would like to, if possible, get the approval and go through the votes and the motions on the supplementary estimates since we're going on to a two-week break. If we can get approval today, I will be able to table the report tomorrow.
With that in mind, Mr. Drouin, you have seven minutes, please.
12:10 p.m.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
Thank you, Mr. Chair.
Mr. Fréchette, thank you for being here today.
I have a few questions about the business plan you are implementing.
Why are you increasing your office's staff from 20 to 40 people? Is that enough to meet your new obligations?
12:10 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Thank you for your question.
We could always say that it is never enough, but the business plan we put forward is essentially a justification. The future is full of unknowns, as Jason and I mentioned. For example, your committee is now one of four committees that, under the law, can require us to fulfill their requests for economic and financial analyses. In the legislation, the word “shall” is used, which can be read as “must”.
All the other committees can ask the PBO—once again, the word “shall” is used—to analyze cost proposals related to private members' bills, government bills or committee motions, for example, and the PBO must do so. The example I have often given is that of the Standing Committee on Health that proposed a motion, a year ago, to have the PBO conduct an analysis of the pharmacare program.
The law now requires us to answer all those questions, but we don't know what the extent of committees' requests for that type of analysis will be. We were careful in developing our request. We think that, at first, the committees will not be as active as we expect, since this is new. In addition, we are nearing the election period. During the presentation, I used the word “frugal”, but I should have perhaps used the word “reasonable”.
I will talk about two other criteria. We also used examples of offices of parliamentary budget officers in other countries similar to ours that provide services similar to a Parliament of about 300 members, in addition to 105 senators. We found that we were following the standard.
Those are the main reasons. That said, the unknown is still election platform costing. We have no idea how active political parties will be 120 days before the next election and will ask us to estimate the cost of their election proposals. This is a bit of a shot in the dark, but, as I mentioned—and we said so in our business plan—we are certain enough that we will be able to respond to the requests over the next few months.
March 1st, 2018 / 12:15 p.m.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
As for calculating the financial cost of election platform measures, during the 120 days leading up to an election, a political party could, in theory, wait until the last minute to disclose its promises. We also know how that works in practice. Sometimes, the entire election platform is ready 15 days before the vote, but for the purposes of communication strategies, only one commitment is announced per day.
How do you plan to carry out that analysis? I assume you will have to work quickly.
12:15 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, and that is the beauty of having a somewhat smaller organization, which is also more flexible with fewer management systems operating in parallel. We are already preparing to develop cost models for defence. We already have a macroeconomic model in place. As of this summer, we will be using an approach to prepare ourselves mentally, as this will be a first experience for us, as well. So that is the beauty of a small flexible organization that can respond quickly.
We have two groups, some 30 analysts and two or three other people who will essentially be focusing on cost analysis during the election period. Will we succeed? My colleague Mr. Jacques—he also acts as the principal of the cost estimate and budget analysis team—and myself realize that it will be demanding, but we think we will manage it.
That said, Australia is the only other country with a PBO that does that type of calculation. You are completely right, as he received requests up until the last day before the election, and that is exactly what our legislation says. Political parties can submit requests for cost analysis until the day before the election.
12:15 p.m.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
I don't know whether I have understood you, Mr. Jacques. You said you hoped the transition will be managed better than the one for the pay system. Is that right?
You are not implementing another pay system because internal services will be shared with the library. Is that correct?
12:15 p.m.
Chief Financial Officer and Senior Director, Costing and Budgetary Analysis, Office of the Parliamentary Budget Officer
Yes, that's correct.
12:15 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
The choice was made because of what is happening. The library is already using the library and Phoenix compensation systems. It seems to be working relatively well. So we have decided to keep the compensation system. We have signed a service agreement with the library as far as compensation goes.
We have decided to develop our own capacity in human resources internally, essentially because we will have an intensive recruitment period over the next few months.
12:15 p.m.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
Okay.
So we can say that you are not losing your independence because you are sharing internal services with the Library of Parliament, which is also independent.
12:15 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Exactly.
That's what I mentioned in my criteria. The library already provides services to the Ethics Commissioner. It has provided those services for many years. Since 2005, the Library of Parliament has been providing IT, compensation and human resources services to the Ethics Commissioner. The commissioner decided, a few years ago, to use various other solutions available to him.
We had another constraint. As I said, we examined the costs provided by other groups, such as the Senate. We studied the possibility of the Senate providing us with an IT service comparable to the one provided by the library through the House of Commons. So I told myself that, if I asked the Senate to do this, it would be perceived as a decision to deal with the Senate rather than with the House of Commons. By staying with the library, we are remaining neutral.
12:15 p.m.
Conservative
12:20 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
I'll go back to the line of questioning of Mr. Drouin.
You're going to face some interesting challenges at election time.
In your 2016-2017 report on the activities of the office of the PBO, you state how in real dollars your budget has actually decreased about 13% since 2009, and you only have about half the staffing compared to that under international norms. In fact, your budget is considerably lower than that for just the Province of Ontario. I know you've presented a plan, and I want to congratulate and commend you on proactively posting your plan online. It's a great example for the other departments. Going forward, can you walk us through what you're budgeting for next year, what you're looking for? Do you have a sense of a commitment from the government that we're going to provide these much-needed funds so you can perform all of this valuable work for Canadians, Canadian taxpayers, and members of Parliament?
12:20 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
The upcoming year of 2018-19 and the following one of 2019-20 are not typical years, because 2019-20 will, as you know, be an election year. Ongoing after the election, we plan to have a $6.5 million budget excluding EBP, the employee benefits plan. It's voted, and it's going to be $6.5 million ongoing after the election.
In 2018-19 the total will be $6.9 million voted. The following year we will go a little bit higher because it is an election year. I can give you details about that. In the election year we plan for about $500,000 in additional costs.
12:20 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
For the election? We believe it will be. That includes, of course, additional capacity for translation, editing, and so on, and also access to information because it's going to be imperative to have quick access to information that year.
On that basis, we are signing some MOUs with Statistics Canada to have a privileged, quick, and efficient access to the data during that period.
Basically the budget for the next three years will go up until the election year, and after that $6.5 million. And probably it will have to be reviewed depending on whether over that period the committees are really demanding in terms of requests of costing their own proposals, and not only the parties but the costing of MPMBs or proposals that standing committees may develop themselves.
12:20 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
If you get to the $6.5 million, where will that bring you staffing-wise compared to other international standards or Ontario?
12:20 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
After an election year?
12:20 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
After an election year, $6.5 million will bring us to 41 full FTEs, 30 analysts, plus three people dedicated to help them in terms of web publishing and infographs and so on. After that, the PBO and deputy PBO. The difference, the six other people, will be for the administration, HR and communications.
Communications is a challenge. Now, as I mentioned in my presentation, we do have to table with the Speakers every time we publish our report, a self-initiated report. We have to table it with the speakers. We have to table our reports with the committees if the committee is a sponsor or the requester of a report. We have to develop some kind of capacity there.
12:20 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Right. Do you think it will bring you in line with your international cohorts then or close to?
12:20 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I will ask Jason.
Just before that, I'll note the example of the Australian PBO. Before the election in 2016 in Australia, the Australian PBO had about 25 to 30 people. The advantage he has over there is that during the election he can ask for having deemed employees from the Department of Treasury and Finance. He got 50 new deemed employees during the election of 2016.