Government Operations Committee on May 8th, 2018

[The Chair, Conservative, Tom Lukiwski]

Colleagues, I'll convene the meeting now, if I may.

I want to welcome our guests from the Office of the Parliamentary Budget Officer. It's good to see you all again.

Colleagues, before we begin our opening statements and rounds of questions, I should inform all of you that since Mr. Erin Weir is no longer a permanent member of this committee, we are compelled under Standing Order 106(2) to elect a second vice-chair. The second vice-chair must be a member of the opposition, but not a member of the official opposition, since this is one of the five committees that opposition members chair. If you do the math, you'll figure out that we're down to one person, who happens not to be here, but he will end up being our committee vice-chair nonetheless, so we still need to go through the election.

Madam Ratansi, go ahead.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

What's their name? We cannot elect them if we don't know their name.

[The Chair, Conservative, Tom Lukiwski]

It is going to be Mr. Daniel Blaikie, who is a member of this committee. That will be obvious as we go through the nomination and election process, which we are about to do right now.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I was going to appoint Sheila.

[The Chair, Conservative, Tom Lukiwski]

Colleagues, I will turn the presiding of this election, which will be brief, over to our clerk.

Patrick, do you want to continue?

[The Clerk of the Committee, Mr. Patrick Williams]

Thank you, Mr. Chair.

I am now prepared to receive a motion for the position of second vice-chair.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I so move.

How about Ms. Malcolmson? We want proportional representation. Women are lacking on this committee.

[An hon. member]

Gender parity.

[The Clerk]

It has been moved by Madam Ratansi that Daniel Blaikie be elected as second vice-chair of the committee. Is it the pleasure of the committee to adopt the motion?

[Some hon. members]

Agreed.

[The Clerk]

I declare the motion carried and Daniel Blaikie duly elected second vice-chair of the committee. Thank you.

[The Chair, Conservative, Tom Lukiwski]

I'm sure if he were here he'd give an acceptance speech, but we'll forgo that for now and perhaps let him speak at some future time. Thank you, colleagues.

Toward the end of our second hour, we will go to a brief in camera committee business portion of this meeting. I have only one item to deal with, and I will deal with it at that time. We'll try to keep our meeting as quick and efficient as possible. We'll have a full hour with the PBO, and only 50 minutes out of the allotted 60 minutes with the Privy Council Office, if that's all right with you.

Mr. Fréchette, I understand you have an opening statement. Following that, we'll go directly to questions. The floor is yours.

[Jean-Denis Fréchette, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer]

Thank you, Mr. Chair.

As per your committee order of reference related to vote 1 under the Office of the Parliamentary Budget Officer's main estimates for 2018-19, I am glad to report that our estimates have been considered by the Speaker of the Senate and the Speaker of the House of Commons, who conducted their thorough due diligence. Following that, the PBO's CFO and DCFO—Sloane Mask—exercised oversight attesting to our budget requirements. As per parliamentary procedure, our budget has been referred to your committee for final approval.

The PBO's budget totals $7.6 million, including a total voted budgetary requirement of $7 million, as well as a statutory budget component of $600,000 to fund the employee benefits program.

The budgetary request for the PBO's first full financial cycle as an independent entity supports the fulfillment of Parliament’s desire for transparent, timely, and credible electoral platform costing, in addition to funding non-recurring transition expenses to establish the office in accordance with Bill C-44. The request can be detailed as follows: a transferred appropriation from the Library of Parliament of $2.6 million for direct operating costs; $1.5 million to enhance economic, analytical, and administrative capacity; and $2.9 million for professional service and transition requirements.

For the current year, the $7 million is because of the transition to a new structure—outside the Library of Parliament—through the requirement to establish service agreements and the anticipated increase in requests from parliamentarians and parliamentary committees because of changes to our mandate.

For the next fiscal year, which also corresponds to a general election year, the amount requested will be $7 million as well, but this time mainly because of the statutory obligation to assess the cost of election platforms. Subsequently, the annual budget of the Office of the Parliamentary Budget Officer (PBO), will decline once again to $6.5 million a year. It will be constant during the first three years of the new, or the next Parliament.

As per the PBO's legislative mandate to provide impartial, independent analysis to help parliamentarians fulfill their constitutional role, which consists of holding government accountable, we published last week a report on the 2018-19 main estimates, which support the second appropriation bill for the current fiscal year. It follows the 2018-19 interim estimates, which was tabled in Parliament on February 12, 2018.

The government's expenditure plan and main estimates for 2018-19 outline $276 billion in total budgetary spending authorities. This represents an increase of approximately $18.1 billion compared to the total budgetary authorities identified last year, in 2017-18.

Statutory budgetary authorities are projected to be $163 billion in 2018-19, which is an increase of $7.2 billion compared to the total estimated statutory spending in 2017-18. Seniors' benefits and the Canada health transfer are two of the largest contributors to this increase, and are set to rise by $2.6 billion and $1.4 billion, respectively.

The federal organizations with the largest increase in their total budgetary authorities from the main estimates 2017-18 are the Treasury Board of Canada Secretariat, with $7.1 billion; Finance, with $3.8 billion; Employment and Social Development Canada, with $3.5 billion; National Defence, with $1.7 billion; and Immigration, Refugees and Citizenship Canada, with $709 million.

Finally, Mr. Chair, in November 2016, the PBO applauded the government's objective to enhance Parliament's role in upfront financial scrutiny. More recently, in our May 1 report, we said that the changes reflect an effort on the part of the government to improve alignment between the budget and the estimates. However, full reform requires that alignment to be accompanied by an alignment with parliamentary procedure, which means providing clear, specific, and transparent information to members in the object of the vote itself, which we haven't seen and therefore reported.

We welcome the statement of the President of the Treasury Board, who said that he would now correct the situation by including the table in the vote for the supply bill.

Thank you, Mr. Chair. We will be happy to answer your questions.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We will start our questioning with Monsieur Drouin.

You have seven minutes, Mr. Drouin.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

My thanks to Mr. Fréchette and his colleagues for appearing before us today.

The way the $7 billion was presented in the main estimates seems to pose a problem for you.

Can you briefly explain to me what the problem is?

[Jean-Denis Fréchette]

Let me go back to what I said earlier. We saw the expenditure table when the budget was announced in February. The Minister of Finance and the President of the Treasury Board have announced that this will ensure that the federal budget measures announced in February will be more in line with the main estimates. As I mentioned in my text, we welcomed this approach because it is something the minister has been asking to be done for two years.

When the supply bill was introduced, we were able to read the text of vote 40, which targeted only $7 billion, and we were a little confused. We had discussions with our colleagues in the House Administration on the procedure to follow. People all agreed that this committee was going to vote only on the $7 billion, without necessarily knowing the details of the table of measures, in which all the amounts are going to be aligned with the budget.

Therefore, we did our report and pointed out that it was not clear enough. I will use an expression that Ms. Mendes will understand: knowing is one thing, but seeing is believing. You did not see it and we did not see it either in the vote or in the description of the vote. So we said that we need a little more clarity.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay.

I'm sure you have read the article by Mr. DeVries and Mr. Clark, describing how the procedure will go forward. I do not want to seem like Guy A. Lepage, but who's telling the truth between you and Mr. DeVries and Mr. Clark, who have experience in the Department of Finance.

How can we ensure that there will be this parliamentary clarity? It is important for me and for all our colleagues to have a parliamentary oversight mechanism. What is the correct procedure to follow in the future? According to Mr. Clark and Mr. DeVries, if we follow the procedure you mentioned, the budget should be announced in November or December. Will departments have enough time to adjust?

[Jean-Denis Fréchette]

That's the burning question.

In their article, Mr. DeVries and Mr. Clark refer to Australia's budget. That's actually the one the President of the Treasury Board uses as a model. He has always used it. He has always said so, and we have always supported his approach.

In this particular case, they are referring to the future, to a better world, although this one is not so bad. In a perfect world, all the measures in the budget would be fully and perfectly aligned with the main estimates, as is the case in Australia, where Parliament's approval is very easy and transparent.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

There is still a culture change internally, that is, in all departments, when it comes to providing that information. We knew that it was part of the negotiations with the opposition parties in order to agree on the date of April 16 for at least two years. Then we will see how the departments will adjust.

We talked about Australia's model, but Ontario and Quebec are doing the same thing.

Have you studied those models? If so, do they have the same information?

[Jean-Denis Fréchette]

In Quebec and Ontario, parliamentary committees do this before the budget is announced. They have clearly had discussions beforehand. Subsequently, the budget is completed to reflect that.

As I said, we have always supported the comments of the President of the Treasury Board, Minister Brison, if he really wants to align it with Australia's model. In 2012, the Standing Committee on Government Operations and Estimates made recommendations to that effect. The Office of the Parliamentary Budget Officer always respects what parliamentarians are saying. In our opinion, the model proposed by the 2012 Standing Committee on Government Operations and Estimates was a good model that should be taken even further.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay.

The reason why you are here is basically to talk about votes. In terms of the votes that have been requested to date, you are asking for $7 million for 2018-19.

Will that money be earmarked for the new alignment you are anticipating for next year?

[Jean-Denis Fréchette]

For this year, we have a transition budget. It is important to understand that we are divorcing or separating from the Library of Parliament. A divorce can be expensive.

[Some hon. members]

Oh, oh!

[Jean-Denis Fréchette]

I do not know anything about that, but I'm starting to realize it.

An amount of $500,000 will be used for the transition. We will have to rewrite the services we provide. The library will provide us with services, and it will be on a cost-recovery basis. The reason we are continuing with the Library of Parliament, at least for two years or until the next election, is precisely to make the transition.

We must also ensure that the next PBO—my term is coming to an end—will have the authority to change the service agreements with the library. The $500,000 will be needed to rewrite policies and service agreements. You will also have to negotiate with a union. When the new legislative requirements were imposed on us, the union followed up for a while, but now we have to start the process again. Of course, there are costs associated with that.

The following year, the $500,000 will not be used to make the transition, but rather to purchase specific data to calculate the cost of the measures in the election platforms and to provide additional support. We well know that it will be brutal—forgive the expression—to do this calculation 120 days before the election period. It must be provided in a timely fashion to all political parties individually and confidentially. We will then need help to do the translation and analyses more quickly, as well as to enter into service agreements with departments. We are negotiating with each of the departments to obtain this service.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. McCauley, go ahead.