A Parliamentary Budget Officer for Canada

By Levy, Gary | Canadian Parliamentary Review, Summer 2008 | Go to article overview

A Parliamentary Budget Officer for Canada


Levy, Gary, Canadian Parliamentary Review


On March 14, 2008 the Government House Leader announced the appointment of Kevin Page as Canada's first Parliamentary Budget Officer. The Office is intended to strengthen the capacity of Parliament to better hold government to account by increasing transparency in the Government's fiscal planning framework and improving scrutiny of the estimates. This article outlines the mandate of the Office and the appointment process. It concludes with some thoughts about the future of this new parliamentary office.

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The creation of a Parliamentary Budget Officer is arguably one of the most radical parliamentary reforms in Canadian history. A World Bank-OECD survey in 2003 identified only eleven countries with budget research organizations attached to their legislatures. Most have a congressional system of government where the legislative branch is able to propose its own expenditures or taxes.

   The bench mark, of course, is the Congressional Budget Office in
   the United States, established in 1974, with an estimated staff of
   230 professionals. Korea established a National Assembly Budget
   Office in 2003, with a staff of 92. The Philippines created the
   Congressional Planning and Budget Department in 1990, with a staff
   of approximately 50 people. (1)

Among Westminster model Parliaments the United Kingdom established a Scrutiny Unit in 2002, within the Committee Office of the House of Commons, to provide advice on expenditures and draft bills. This Unit has a staff of seven professionals, seconded from other organizations. To date the main focus of this unit appears to be improvements in the presentation of information from the Treasury to improve the ability of members to discuss the estimates. (2)

Background

For years Canadian parliamentarians have been concerned over the divergence between the fiscal forecasts of the Department of Finance contained in the budget and the actual numbers at the end of the fiscal year. A 1994 review of the Finance Department by Ernst and Young resulted in some improvements to the methodology, however, their recommendation to establish an independent forecasting agency to provide economic and fiscal policy forecasts was ignored.

In 2004 Dr. Tim O'Neill reviewed the processes employed to prepare federal fiscal forecasts. He concluded that:

* Budget balance projections have been too low in each of the last ten years by an average of over $10 billion

* Total revenues were under-forecast in seven of the last eight years but their contribution to budget balance under-forecasts has been quite modest in recent years.

* Total program expenditure projections have more consistently contributed to the budget balance under-forecasts, having been on the high side in all but one of the last ten years.(3)

Among his recommendations Dr. O'Neill proposed the creation of an agency within government with a mandate to focus on the medium-to-long term fiscal implications of structural and demographic factors. He suggested the office be attached to either the Library of Parliament, the Office of the Auditor General or accountable to the House of Commons Standing Committee on Finance.

The 2006 Election Platform of the Conservative Party proposed creation of an independent Parliamentary Budget Authority to provide objective analysis directly to Parliament about the state of the nation's finances and trends in the national economy. This commitment led to inclusion of a Parliamentary Budget Officer in Bill C-2, the Accountability Act, the first item of business introduced by the new government in April 2006.

From Bill to Act

The Accountability Act underwent extensive amendments during hearings before a Legislative Committee of the House in May and June 2006 and the Senate Standing Committee on Legal and Constitutional Affairs from July to November 2006. The provisions relating to the Parliamentary Budget Office were only a small part of the Act and by no means the most controversial. …

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