Evidence of meeting #49 for Procedure and House Affairs in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was costs.
A recording is available from Parliament.
4:55 p.m.
Parliamentary Budget Officer, Library of Parliament
Sir, again, I have not seen the material.
4:55 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
If I can help you a little with the opening statement of the minister, Minister Toews explains that the material does not provide baseline funding, nor does it provide annual reference-level funding for all the bills.
Our order to the government required a breakdown of incremental cost estimates--and you referred to this earlier in your statement--a breakdown of baseline departmental funding requirements, total departmental annual reference levels, and detailed cost accounting analysis and projections. If the government did not provide in today's binders or data dumps to committee baseline funding or annual reference-level information for the bills, would you agree it has not met the requirement of our motion to comply with the Speaker's ruling?
4:55 p.m.
Parliamentary Budget Officer, Library of Parliament
Sir, we would agree. Just to emphasize, when we produce our work, our estimates, our starting point is we would like to know whether this money is in the fiscal framework or not. All cost estimates are based on methodologies. We need to know what the methodology is. We need to know what the underlying assumptions are. We need to know the breakdowns between what is operating and what is capital.
If you are talking about crime legislation in particular, I think there are statistics like head counts, the amount of time spent in prison, the number of new prisons that need to be provided. I think parliamentarians need to know that in order to do their due diligence function.
4:55 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
So you would agree that if the government has not provided baseline funding and annual reference-level funding information, then it would not have complied with the requirements of the motion.
5 p.m.
Parliamentary Budget Officer, Library of Parliament
Agreed, sir. I would highlight as well that when we look back, the only information available to parliamentarians right now on crime legislation—and I'm not aware of any specific paper that has been drafted other than the material that was provided today, which I have not seen—that has been brought together in a consolidated fashion would be the report on plans and priorities for 2010-11. There are no specific breakouts provided for Bill C-25, the Truth in Sentencing Act, or any other legislation.
Again, in the budget documents, which are planning documents, we have not seen reference to specific crime legislation, so we don't know how the baselines have been adjusted or whether or not they should be adjusted.
5 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
On February 17 the government House leader tabled information in Parliament to respond to our motion claiming that it had provided all the information. In fact the Prime Minister said that the government had provided all the information, and the parliamentary secretary to the House leader said that.
In your report after that, you said the government did not provide the finance committee or the PBO with the analysis, key assumptions, drivers, and methodologies behind the figures presented. Today you are telling us that because of the government's failure to provide baseline funding information and annual reference-level information, the government continues to fail to come clean to the finance committee to meet the requirements of our motion.
5 p.m.
Parliamentary Budget Officer, Library of Parliament
Sir, again, we have not seen the binder, so it's very hard for us—
5 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
But if the information does not provide baseline funding or annual reference levels, you will agree it's not adequate to meet—
5 p.m.
Parliamentary Budget Officer, Library of Parliament
That was one part of the information we required. Again, as I've said, we wanted the five-year...we wanted the breakdowns of O and M, capital.... I'm referring to the report the PBO did in February, which was released to parliamentarians and to the House finance committee on February 25. We produced a table as to what was provided and not provided. We ticked off the boxes.
So there's a lot of information, particularly in those breakdowns, that may be in the report today. I have not seen them before.
5 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
You will endeavour now to provide the same analysis of the current information. Given the strict timeline the committee is on this week, when can you bring that analysis back to committee? We have to make a decision on whether or not the government is in contempt by the end of the week. Can you report back to us and provide similar analysis in that time period?
5 p.m.
Parliamentary Budget Officer, Library of Parliament
In terms of analysis, it would not take us long to go back to the original request and tick off the boxes to say what's in and what's not in. That's not a hard thing to do.
As you know, when we undertake our own costing and provide independent cost estimates, that takes a long time. So not having seen what's in the binder, it's difficult for us to provide a test of reasonableness as to whether the numbers that were provided are reasonable in terms of magnitudes.
But certainly from an information point of view, we could tick off the boxes to see whether or not, from a transparency point of view, the information was provided.
5 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
So your office will provide that information to this committee before Friday, which compares the information that our motion requested from the government with what the government provided today and also with what the government provided on February 17?
5 p.m.
Parliamentary Budget Officer, Library of Parliament
Again, without seeing the content, we will certainly do our best. If that is the wish of the committee, we could undertake that work. Certainly from an information perspective, what's in, what's been met, and what's not been met, we can do.
But again, to emphasize, it's a test to reasonableness: do the magnitudes make sense in the context of the proposed legislation? That would go beyond a 24-hour period. As an example, we took many months to do the work we did on the Truth in Sentencing Act.
5 p.m.
Conservative
5 p.m.
Conservative
Tom Lukiwski Conservative Regina—Lumsden—Lake Centre, SK
Thank you very much.
Thank you, Mr. Page, for being here today.
First I want to go to an incorrect assumption that our colleague, Mr. Brison, has been floating here today, and that deals with the committee's request about, number one, information on baseline funding, and, number two, annual reference levels. If Mr. Brison had taken the time to read the explanatory notes--and I understand, Mr. Page, you haven't seen the documents that came today so I'm certainly not suggesting that you should know what's contained here. But in the explanatory notes...and I'm just going to read a couple of sections here for you very quickly.
The committee requested, of course, “the baseline departmental funding requirement excluding the impacts of the bills and Acts broken down by Capital, Operations and Maintenance and Other categories.” In the explanatory note the government states, “For some bills...the baseline funding can be identified and is recorded in the appended answers.” So that information is provided. Mr. Brison says it isn't, and it has been today.
The explanatory note goes on to say that “For some bills, however, baseline funding does not exist because implementing a bill may involve new activities that were not previously funded and as a result, did not have an existing baseline funding level.”
It goes on to say, “Finally, for some bills there is no clear answer to the request because baseline funding is not categorized in a manner that directly relates to the object of the bill.”
I'm not going to ask you to comment on that, sir, only because you haven't had a chance to examine the entire document and it would be unfair of me to ask that. Suffice it to say that in response to Mr. Brison's allegations that we have not provided proper information, in fact the government has done exactly that, and I'm sure this will certainly be identified by you, sir, once you've had an opportunity to read these documents.
But let me go back to some testimony we just recently heard from the associate secretary to the Treasury Board of Canada, Mr. Alister Smith. Mr. Smith commented just a few moments ago that many times a difference in opinion between cost estimates from your office and the Department of Finance may not be differences in fact but differences in the assumptions made by both your office and the Department of Finance. Would you agree that this would be an accurate statement, generally speaking?
5:05 p.m.
Parliamentary Budget Officer, Library of Parliament
Sir, in the work we tend to do as budget officers, we are projecting forward and providing cost estimates, so we are dealing with assumptions. That's why it's so important to have information on assumptions. My office needs to be transparent about assumptions, as does the Department of Finance or the Treasury Board or Correctional Service Canada.
5:05 p.m.
Conservative
Tom Lukiwski Conservative Regina—Lumsden—Lake Centre, SK
Understood, but would it be fair to say that if the assumptions are different between your office and that of the Department of Finance, there will quite conceivably, and probably most likely, be a difference at the end of the cost projections?
5:05 p.m.
Parliamentary Budget Officer, Library of Parliament
I agree. I think your point highlights the importance of both the PBO and the government being transparent on assumptions.
5:05 p.m.
Conservative
Tom Lukiwski Conservative Regina—Lumsden—Lake Centre, SK
So let's go to a specific example and see if we can square a circle a little to see why there may be some differences of opinion on cost.
Much of the criticism about some of our crime bills revolves around your report alleging that the actual cost of crime legislation will be far higher than what is expected or projected by the government. I think that is a fair statement. However, I would point out that on February 17, during an exchange between Madam Mourani and Correctional Service Commissioner Don Head, an important point was made. This all goes down to my initial question on assumptions.
Your office operated on the assumption that housing a female inmate costs $340,000 a year, when Mr. Head confirmed that in reality it is far less than that; it could be as low as an average of $113,974 a year. So the assumption you were using, as opposed to the assumption CSC was using, at the low average could be a difference of over $200,000 per inmate. Could that possibly be a reason why some of your projections could be considered to be grossly overestimated?
5:05 p.m.
Parliamentary Budget Officer, Library of Parliament
I think what we're probably talking about are differences in definitions. That's slightly different from saying differences in assumptions.
On those types of costs, we took the information from testimony that Mr. Head, the commissioner, had made to various committees. We were able to extract that type of information from the Correctional Service of Canada. So it's probably about whether we are talking about inclusive costs, operating and capital, direct and indirect, or some smaller definition of it. But you can definitely get significant ranges.
Sahir, do you want to add anything?
March 16th, 2011 / 5:05 p.m.
Sahir Khan Assistant Parliamentary Budget Officer, Expenditure and Revenue Analysis, Office of the Parliamentary Budget Officer, Library of Parliament
On some of the main drivers of costs, if you look at the low end of the PBO range, to some extent it's not that different from the estimate of the government. The biggest assumption difference is when capacity constraints are hit, and the extent to which the government will accommodate that by increasing density versus construction. We've made it quite clear in the paper when that tipping point occurs. That's why if we understood where those constraints were from the government side, we could be in a better position to reconcile differences.
5:05 p.m.
Conservative
Tom Lukiwski Conservative Regina—Lumsden—Lake Centre, SK
Again I would point out that Mr. Head himself was disputing the projections or assumptions that your office was using. They were the ones you testified provide the information your office requires to make an accurate report and cost projections. Mr. Head himself, the source of the information, was disputing your projections at committee.
5:10 p.m.
Parliamentary Budget Officer, Library of Parliament
Again, we would have to go back to how he was using information. We got the information from Correctional Service of Canada. I think you were talking about whether we were using a partial figure for those sorts of costs for women's prisons or whether we were using the full figure that included operating and capital costs.
5:10 p.m.
Conservative
Tom Lukiwski Conservative Regina—Lumsden—Lake Centre, SK
But suffice it to say that's where there could be severe differences of opinion. It does not necessarily mean the Department of Finance facts are wrong or that yours may be wrong. The differences in cost projections could in many cases be simply put down to different assumptions being used.
5:10 p.m.
Parliamentary Budget Officer, Library of Parliament
I agree that we need to be really clear on assumptions. From the work we did, particularly with respect to crime, I think the bigger issue we found to be the fundamental factor was whether or not we were going to change occupancy rates. As Mr. Khan just said, that would really drive higher capital costs.
So if the government is prepared to double-bunk, triple-bunk, or what have you--and there's a lot of information in the report we prepared last year on this issue--most of your costs would be operating. You could avoid a lot of the capital costs.
