Evidence of meeting #3 for Library of Parliament in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cost.
A recording is available from Parliament.
Liberal
The Joint Chair Liberal Gagan Sikand
Good afternoon, everybody. I call this meeting to order.
Today we're receiving a briefing from the Parliamentary Budget Officer. I'd like to introduce Mr. Fréchette.
Mr. Fréchette, if you'd like to introduce your colleagues as well, then we'll get started. Thank you.
Jean-Denis Fréchette Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Thank you, Mr. Chair.
Madam Joint Chair, Mr. Joint Chair, vice-chairs, honourable senators and members of Parliament, thank you for this invitation.
I am accompanied today by Mr. Jason Jacques, Chief Financial Officer and Senior Director, Costing and Budgetary Analysis, and by Ms. Sloane Mask, Deputy Chief Financial Officer and Acting Director, Parliamentary Relations, Outreach and Planning.
As you know, amendments to the Parliament of Canada Act last year resulted in the position of Parliamentary Budget Officer being recognized as an independent officer of Parliament. The order in council of September 21, 2017, established its status as such and confirmed that its legislative mandate would be expanded to include the costing of political parties' election platforms. September 21 was also the date that marked the separation of the PBO and the Library of Parliament, which meant that the PBO had to quickly establish its own administrative processes and internal controls.
Every separation involves a certain level of risk and uncertainty that can affect ongoing operations. New legislative requirements were also introduced as part of PBO's services to parliamentary committees, senators, and MPs. These new requirements included additional administrative responsibilities resulting from the new legislation, for example, annual reports to be tabled on activities, work plans, submitting reports to both Speakers, and so on. As such, it was strategically imperative to act quickly to maintain services to parliamentarians, without interruption, throughout the transition.
Given the situation, a decision was made to negotiate with the administration of the Library of Parliament to have it provide administrative services in the short and medium term. This decision was based on the following criteria: services at competitive costs compared with other organizations; the political neutrality of the Library of Parliament; the experience it has acquired since 2005 in providing similar administrative services to another independent officer of Parliament, namely the Office of the Conflict of Interest and Ethics Commissioner; the added benefit of having a team of library managers already familiar with the needs of the Office of the PBO, ensuring that PBO analysts and managers could continue their analysis activities during the transition; the flexibility to revisit the administrative agreements after the 2019 election; and, most importantly, the option to remain as part of the House of Commons IT environment for data protection, not only while Parliament is in session but also during election periods, during which political parties may decide to submit their campaign promises, on a confidential basis, to have the financial costs evaluated by the Office of the PBO.
I am also glad to report that our 2018-19 estimates have been considered by the Speaker of the Senate and the Speaker of the House of Commons, who conducted their thorough due diligence. After which, the PBO's chief financial officer and deputy chief financial officer exercised oversight attesting our budget requirements. Our budget was then referred to a parliamentary standing committee for final approval.
For 2018-19, the PBO 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. You will find further details in the notes we provided beforehand.
In conclusion, I'd like to say that for this year and the subsequent year, our planning is based on a voted budget of $7 million, which is due to the additional support needed for the transition, as well as to an increased number of requests from parliamentarians.
Next year's budget will also total $7 million. This is due to additional costs generated by the general elections, since it will be an election year, during which, as I mentioned, the Office of the PBO will have to cost the political parties' election platforms. Afterwards, our annual budget will stabilize at $6.5 million annually for a period of three years, until the next general elections.
Thank you, Madam Joint Chair and Mr. Joint Chair.
Liberal
The Joint Chair Liberal Gagan Sikand
Thank you for your testimony.
We'll move to questions.
Senator Mercer, you have five minutes.
Terry M. Mercer Senator, Nova Scotia (Northend Halifax), Lib.)
Thank you, Chair.
It's great to finally see you here. It's taken a while.
The cost that political parties will incur to comply with new rules, has that been calculated? We continue to add more and more duties to political parties to comply with rules that we come up with in this place, but there's never any reference to the cost of that, which reduces the effectiveness because all political parties are supported by good Canadians who are donating their money. Many of them would be surprised at how much of their money is going for compliance as opposed to what they are actually donating for.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Do you mean the cost of compliance for the parliamentary budget office itself?
That's why we were very careful. My two CFOs beside me did their work in terms of limiting the amount of money. When we planned our new budget, the main criterion was how many parliamentarians we have to serve compared with other parliaments in the world. As I mentioned in my remarks, costing the electoral platforms, it will be $500,000 more that we will ask for every general election just to serve the political parties.
In that context, we don't calculate how much we spend on each project, but we are very efficient. Since the new legislation, we are up to 25 requests for analysis and reports that we did.
Senator, Nova Scotia (Northend Halifax), Lib.)
I would suggest then, and I'll allow colleagues around the table to contradict me, that someone else around this table or a group that one of us represents will challenge your numbers. I'll tell you that now. They'll say that your numbers are wrong. You will come up with a number and they'll say, no, that can't be the case. Maybe it will be a party that I support or somebody else supports, but you need to anticipate that.
How are you going to be able to demonstrate that your numbers are accurate numbers in the middle of a campaign where everybody's trying to say that their numbers are the right ones and yours are not?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I think the independence of the PBO now is part of that. It would have been impossible to do the costing of electoral platforms during the election while being part of the Library of Parliament. I think it would have created some kind of risk. There are still risks associated with doing that.
As I mentioned, political parties can contest the numbers, and we've developed some guidelines. We met all the political parties so far and they know what to expect from us. They know the timeline. We made a commitment that we will be able to.... 120 days before the general election is the date that is the beginning for political parties to submit their platforms for costing.
What we are afraid of is not the political parties themselves contesting the numbers. That we can deal with. It's going to be the fake new, false news, using the PBO's numbers on blogs and so on. This is something that we are concerned about, but we are prepared to do that.
Senator, Nova Scotia (Northend Halifax), Lib.)
How will you police that?
How are you going to identify and contradict the fake news?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
The legislation is very strict. We do the platform costing. We give the numbers to a representative of a political party, and we have to keep that confidential until the political party writes back to the PBO saying that they have made it public. If they don't write—if they just say, “We made it public”—and I know they made it public, that's one thing, but I cannot release the document. That is the insurance of political parties revealing the right approach.
If they don't, or if they use the numbers and manipulate them—which I'm pretty sure political parties will not do—we will go public afterwards. Not only that, but Jason and I also had meetings with the Chief Electoral Officer, and we will have a meeting with the commissioner of Canada Elections to discuss whether we will be perceived as a third party.
My concern was that I don't have any parliamentary privilege, so during the campaign, I don't want to be under the gun of any other third parties who will attack us. In that context, as I said, the quality and the validity of our reports will be the insurance that will protect us against false news, fake news, and so on.
Liberal
The Joint Chair Liberal Gagan Sikand
Thank you for that.
That's the end of the five minutes.
Madame Quach, you have five minutes.
NDP
Anne Minh-Thu Quach NDP Salaberry—Suroît, QC
Thank you, Mr. Chair.
Mr. Fréchette, thank you for being here with us today.
Could you describe for us, if you will, the changes in your office since your mandate and powers were amended by Bill C-44?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Certainly.
I'd say there have been three or four major changes.
I mentioned the first one in my remarks, and that is the costing of the parties' electoral platforms. Allow me to mention in passing that there is only one other PBO in the world that has the legislative authority to do that sort of calculation, which is the Australian one. The beauty of their mandate is that not only do they cost the electoral platforms, but their report is only published 30 days after the election. This is related to the question put by Senator Mercer. The PBO is protected against data manipulation. Thirty days after the election, it can publish a report that presents the real facts.
NDP
Anne Minh-Thu Quach NDP Salaberry—Suroît, QC
And are you supposed to publish your report much later?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
For instance, if we calculate the cost of an electoral platform, or of a measure—it could be just a measure, although we prefer to cost the entire platform—I can provide the information to a political party, and that party must advise us, in writing, if it intends to use our data. Afterwards we will release our report. The legislation allows us to do that.
After the election, we will publish a report. In fact, we must submit an annual report to both speakers in the beginning of the year, i.e. 30 days before the end of the fiscal year. We also plan to prepare a report on the election, that is a report on how things were done. The point is to provide food for thought to the parliamentary debate on the quality of this legislation, which is relatively strict for us. That is one of the important changes.
As for the second change which I alluded to, it explains the increase in our budget. Currently, we can process three types of requests. We can generate our own reports during a given year—not necessarily an election year, but any year generally. The reports on the government's taxation and fiscal soundness are an example. Parliamentary committees may also submit requests for cost analyses.
Four other committees may also submit requests to us. They are mentioned in the act, and they are the Standing Senate Committee on Finance, the House of Commons Standing Committee on Public Accounts, the House of Commons Standing Committee on Government Operations and Estimates, and the House of Commons Standing Committee on Finance. These four committees may submit specific requests regarding economic trends or any other macroeconomic analysis. All of the other committees may request analyses on the cost of measures being examined by Parliament.
And finally, all of the senators and members of Parliament may also request analyses on the cost of certain measures, for instance a motion, a private member's bill or a government bill. What has changed since 2017 is that the act now states that we “shall” carry out an analysis when a request is submitted to us. Previously, we had a choice; we could say to a member or a senator that we could or could not do what they asked. Now, the word “shall” is used throughout the act. This imposes an obligation, which is extremely difficult, hence the importance of having a few more people to carry out these cost analyses.
In conclusion, both the International Monetary Fund, in its analysis of independent financial institutions, as well as the Organization for Economic Co-operation and Development, the OECD, have stated that cost analyses, for the entire network of PBO offices in the world, represent the most time-consuming task for a team of analysts. So clearly, we need more people to carry out the cost analyses and allow us to comply with the legislative requirement.
NDP
Anne Minh-Thu Quach NDP Salaberry—Suroît, QC
Do you think you have enough staff to meet these requirements?
Regarding the costing of electoral platforms, you said that the Australian PBO had a brilliant procedure. Would you like to see changes in Canada so that your report would only be tabled 30 days after having done an analysis?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I am not asking for any changes, and I am working with the law as it stands. It has just been amended and I am not in a position to request a legislative change. As I said, it's a new model.
We copied the Australian model to some degree by asking the Canadian PBO to perform this costing analysis, but a different process was chosen, which is to have us publish our figures during the electoral campaign. There is thus a risk that our figures or other elements may be subject to challenges. We aren't infallible, especially since we are required to work rather quickly.
There is another aspect regarding the law that comes into play during an electoral campaign.
Liberal
The Joint Chair Liberal Gagan Sikand
I'm sorry. I'm going to have to cut you off. Thank you.
Mr. Saroya, go ahead.
Conservative
Bob Saroya Conservative Markham—Unionville, ON
Thank you, Mr. Chair.
Thank you to the witnesses for coming up and providing us thoughts from your side.
To the PBO, do you believe that a committee is necessary to review the work of your office? Is this no longer the case after the changes? Do you believe we should have the committee involved in the transition?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Do you mean a committee like this committee?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
The legislators decided to, as I said, separate, to get the PBO outside the Library of Parliament. Therefore, at that point, it was clear that the PBO was no longer under the jurisdiction of this committee.
However, the legislators added a fourth committee to the list of the already three main committees that were mentioned in the old legislation. The four committees I mentioned previously, we have one from the Senate and three from the House of Commons. They are really those that if we do have a problem in terms of access to information and so on, we can always turn to them.
This year, as I mentioned in my remarks, the Treasury Board referred our budget to the government operations committee of the House of Commons for its review. I cannot comment more as to having one specific committee. I can give you the example of the Auditor General who basically reports to the public accounts committee.
Conservative
Bob Saroya Conservative Markham—Unionville, ON
Will we see any difference from your previous position to an agent of the House of Commons, an agent of the Parliament? Can we expect the same progress, the same sorts of reports tomorrow versus previously?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, probably. Being an agent of Parliament, a real independent agent of Parliament, is different from being an agent of the library, which was the case before. It provides, I would not say more credibility, but certainly more room to manoeuver in terms of the budget. That is, as I mentioned, a costing platform will cost, for us.... We just planned a budget of $500,000 for a general election year. I'm not sure how it would have been possible to do that under the Library of Parliament at that time.
Being an agent of Parliament, being part of that great family of other agents of Parliament provides this freedom to manoeuver and also this credibility in conducting some of the responsibilities and duties that are now part of the legislation.
Conservative
Bob Saroya Conservative Markham—Unionville, ON
This is something different. Do you see duplication between your office and the Library of Parliament? If so, how do you recommend we reduce the unnecessary duplication between the two parties, between your office and the library?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
The legislator, in his or her wisdom, included a clause in the legislation where it is mentioned that unnecessary duplication.... I don't know why in English it's “unnecessary duplication”.
The French only mentions “duplication”, without any qualifier.
“Duplication” is already unnecessary.
The parliamentary librarian and I have to maintain a collaborative approach to make sure that taxpayers' money is well used in terms of our mandate. Luckily, my colleague, Madam L'Heureux, and I have a very good working relationship. We share this kind of information, and we make sure there is no duplication between her mandate and the PBO's mandate.