Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 7 - Evidence, September 19, 2006 - Afternoon meeting
OTTAWA, Tuesday, September 19, 2006
The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill C-2, providing for conflict of interest rules, restrictions on election financing and measures respecting administrative transparency, oversight and accountability, met this day at 1:47 p.m. to give consideration to the bill.
Senator Donald H. Oliver (Chairman) in the chair.
The Chairman: Honourable senators, we meet today to continue our study of Bill C-2, providing for conflict of interest rules, restrictions on election financing, and measures respecting administrative transparency, oversight and accountability. This bill is more commonly known as the federal accountability act.
As senators, witnesses and members of the public, both in this room and across Canada on television know, this bill reflects a central portion of the new government's agenda. It is one of the most significant pieces of legislation brought before Parliament in recent years.
The committee is giving the bill extensive, careful and detailed study. Prior to starting our meeting this morning we had already held over 40 hours of meetings on the bill and heard from more than 47 witnesses.
This week we continue to look at various aspects of the bill, including accountability, ethics and conflict of interest, political financing, the parliamentary budget office and access to information and privacy.
Our first witness is William R. Young, Parliamentary Librarian. Dr. Young assumed that key role in December 2005, after 18 years at the library in various capacities, and also serving two assignments with the public service. A professional historian, Dr. Young has written several books as well as academic and popular articles, and has also taught senior courses and seminars at McGill, Simon Fraser and York universities. He also held an appointment as adjunct professor of the faculty of graduate studies at the University of Toronto.
Mr. Young, welcome to you and your associates. Please make your presentation. Following that, we will engage in a series of questions and answers from honourable senators.
William R. Young, Parliamentary Librarian, Library of Parliament: Mr. Chairman and honourable senators, I am pleased to appear before this committee and contribute to its examination of Bill C-2. In my short opening statement, I want to make a few points that I hope will be of use in your consideration of the bill.
I want to start off by introducing my colleagues: Mr. Jacques Sabourin, who is the Director General of Corporate Services, and Mr. James Kalwarowsky, who is the Director of the Economics Division. They are on my left and right. That is no indication of where they stand.
Behind us, I have brought with me also Mr. Hugh Finsten, the Associate Parliamentary Librarian and Director General of the Research Branch and Mr. James Robertson, who is a Principal in the Law and Government Division.
All of us are aware that the Library of Parliament exists to provide professional, non-partisan services and support to all parliamentarians. As Parliamentary Librarian, I am the head of this important service that supports you in carrying out your work in our democratic system. It is from this responsibility and this perspective that I approach Bill C-2 and the specific provisions creating the new position of parliamentary budget officer.
To put it simply, if Parliament decides that it wants to create this new budget officer, then it is my duty to carry out the wishes of Parliament. It is my job to have the officer ready to serve you and all parliamentarians promptly and effectively.
The Library of Parliament operates within a statutory framework provided by Parliament. My staff and I are ready to implement whatever the law provides when it is eventually proclaimed. In order to be prepared, we have already begun preliminary planning for the new administrative arrangements that will be required to get this new PBO function running effectively as soon as possible after proclamation of the legislation.
We have engaged the services of former senior public servants to assist in setting up this new capacity, and it is my intention to bring together a group of former Parliamentarians to serve as an informal sounding board and to provide client perspective as we plan and implement the PBO function.
I have also been, and will continue to be, engaged in consultations on this matter with appropriate federal officials and with experts from Canada and other countries.
I believe it is essential to the effectiveness of this new function, especially from the perspective of Parliament as a whole, and from that of the government, that the parliamentary budget officer be clearly understood to be a specialized capability, fully integrated within the Library of Parliament and not a free-standing parliamentary officer or institution.
With the parliamentary budget officer placed clearly under the authority of the Parliamentary Librarian, senators and members of the House can be assured that he or she will function as their servant, operating within the library's established and well-known professional ethos of non-partisan service to Parliament. We intend to continue building on the expertise that we already have in place, avoid duplication of effort or resources, and generally look for economies of scale wherever possible.
I am satisfied that the amendments made to the original bill now capture an appropriate working relationship between the Parliamentary Librarian and the parliamentary budget officer. The proposed amendment in subsection 79.5(4), of the Parliament of Canada Act sets out clear responsibilities for the activities mandated to the PBO office while requiring that those responsibilities be performed within the overall authority and responsibility of the librarian for all resources at the library.
The remain two areas where I believe some adjustments to the wording of the bill would both facilitate the ready implementation of this part of Bill C-2 and avoid potential difficulties in the future.
My first concern touches on the scope of responsibilities of the parliamentary budget officer. As it stands, i.e., in proposed section 79.2(e) of the amended Parliament of Canada Act, Bill C-2 provides that, among other things, the mandate of the parliamentary budget officer is to ``estimate the financial cost of any proposal that relates to a matter over which Parliament has jurisdiction.''
One area of concern that we have is that the term ``proposal'' in the bill requires one clarification for the PBO to work well for you as Parliamentarians who will use the service. By opening the door for the PBO to be required to respond on virtually any matter of interest to any senator or member of the House in their various capacities, invites more work for this new PBO function than might be reasonable.
It risks frustrating the intentions and expectations of Parliamentarions on all sides.
Accordingly, I would recommend that requests for work by the parliamentary budget officer with respect to proposals be subject to such rules and procedures as may be established by each chamber, perhaps on the recommendation of the Standing Joint Committee of the Senate and the House of Commons on the Library of Parliament. Alternatively, requests could be channelled through a relevant committee of each House. Either alternative would leave decisions on priorities to parliamentarians and not to those in the library, whose job is to serve them.
My second concern relates to the control of costs, and thus indirectly to the effectiveness of the new parliamentary budget officer in the parliamentary budget office function in the library.
In its current form, Bill C-2 contains no provision assuring the PBO of access to government data without charge. This might seem like a small matter, but it is an intensely practical one for me as Parliamentary Librarian. To put it simply, if we have to pay the normal costs of, for example, Statistics Canada data sets, this could easily impose an unreasonable financial burden on the new office and, therefore, on the library as a whole.
It is easy to argue that we could simply put forward a request for additional funds to the two Speakers, but this would always be after the fact and it would inevitably involve trade-offs against the other needs of the library and other services that you, as parliamentarians, are entitled to from the library. Again, the risk is that our service to members could be too easily impaired by this unpredictable need for funds.
A better solution, surely, would be to have the bill offer the same clarity with respect to access that is provided for in respect to other officers of Parliament. In particular, I would like to cite as an example the Auditor General Act, which provides that access to government data should be given to the Auditor General at no charge.
I believe that the foregoing amendments are entirely respectful of the purpose and spirit of the bill and would facilitate the early implementation and effective operation of this important new function. I can assure Honourable Senators, that the Library of Parliament's management and staff are ready to ensure that the PBO function fully meets the expectations of Senators and Members of the House of Commons in providing professional services of the highest standard.
We will spare no effort to fulfil this responsibility.
I am very pleased to answer any questions you might have.
The Chairman: Thank you very much for that overview, Mr. Young, and for your two suggestions for improvement.
Before turning to Senator Day, I would like you to give me some assistance with your understanding and interpretation of the phrase, ``any proposal.''
Mr. Young: ``Any proposal,'' as I read it, and I stand to be corrected by my colleague Mr. Robertson, is totally unrestricted. It could be written questions. It could be recommendations made by committees.
The bill specifically mentions a private member's bill. That is covered in a different way; it covers estimates. A proposal could be anything that comes before Parliament. That is the way I read the act.
The Chairman: That is what the act appears to say, but it is pretty broad and wide. It would not take much of an interpretation of any proposal to suddenly open the flood gates.
Mr. Young: That is my point. The parliamentary budget officer could easily have 250 requests in the first week of being put in place. Requests could be in the form of written questions, oral questions or anything that comes before either the House or the Senate.
The Chairman: The word ``proposal'' therefore is not, in your interpretation, confined to such things as Main Estimates and Supplementary Estimates?
Mr. Young: No. Estimates are covered in another section of the bill.
The Chairman: You could be called upon to do some costing for a new private member's bill?
Mr. Young: That is right, but that is also covered in a different clause. This issue is everything apart from those things. It could be any private member's bill, whether it has any chance of coming before either House in debate. How many private member's bills are tabled in any session of Parliament? Does anyone have an idea? Mr. Roberston states that there are currently 140.
Senator Day: We thank you for coming to help us with this concept of parliamentary budget officer. Have there been a number of reports, letters or recommendations for the creation of this position, to your knowledge?
Mr. Young: As I understand it, there were two major reports. One was in 1994 and the other was around 2004. The reports made some mention of the function that the officer — not necessarily the office — is designed to carry out.
Senator Day: Did you take that as a criticism in any way of what the Library of Parliament was doing up to that point?
Mr. Young: No, because the functions are not those that the Library of Parliament has necessarily had the resources or the capacity to carry out in the past. We do studies of estimates and we have done work on the estimates. That function was added as an amendment in the House of Commons on the suggestion of the former clerk, and the House accepted that recommendation.
Senator Day: Are you talking about the wording of the estimates?
Mr. Young: Yes: Fiscal forecasting is not something that the library was ever asked to do in any comprehensive way.
Senator Day: Until Bill C-2 came along, fiscal forecasting was not a function that the Library of Parliament performed?
Mr. Young: No: The library has performed some of the other functions mentioned in Bill C-2. For example, as you probably know, we have assigned analysts to every committee. Those analysts, in the course of their functions, provide briefing information for committees on the estimates. We have also had an economics division that has done economic analysis.
Two years ago, we put together a team that specializes in the area of assisting committees with estimates. Analysts normally assigned to a committee can call upon that team for additional expertise or support when they prepare briefing material or support a committee dealing with the estimates.
Fiscal forecasting was not something that the library has done. However, this bill is a natural complement to what the library has carried out. Putting this additional function in will provide committees in their work with additional expertise in the finance area, particularly on the estimates. This addition complements the existing functions of the Library of Parliament.
Senator Day: Is such a person, organization or service available in other parliaments, either provincially or in similar parliaments such as the U.K. or Australia?
Mr. Young: I think this person is unique in those countries that utilize the Westminster model of government. Yes, there are analogous operations, but nothing similar.
For example, in New Zealand I believe the Auditor General performs certain functions the Auditor General does not perform here, which is to help in terms of future spending. The Auditor General here is concerned with accountability for past spending.
I believe there is something in the Netherlands, although I am not sure exactly what. Of course, the United States has a Congressional Budget Office, but that office again performs a different function. Korea has recently put in place a budget office, and they are trying to puzzle through some of the same issues that we are looking at now.
There is a conference in Korea sometime at the end of October where they will bring together countries that have these operations to look at issues they have in common. They are trying to solve them.
Senator Day: Is one of those issues parliamentarians' lack of confidence in forecasting revenue available to the government? A series of surpluses have been significantly more than predicted at the beginning of the year. Those surpluses have caused parliamentarians some difficulty and concern in that they are looking at estimates and a budget based on a forecast of a certain amount of money, and it turns out to be significantly more.
Mr. Young: As far as I know, the major impetus for the conference in Korea is around the fact — and it is one of the issues I raised today — that any operation, whether it holds the government to account for spending or fiscal forecasting, can only do its job if it has access to the appropriate information in a timely way. That seems to be one of the major international stumbling blocks, namely the effective functioning of this kind of operation. I suspect that goes for fiscal forecasting as well as retrospective forecasting.
Senator Day: Let me understand this. This idea may not be exclusively related to Canada, but we seem to be right up there in the forefront with respect to this new model and this idea from the fiscal forecasting point of view. There are some other aspects.
If we look at Bill C-2, powers given to the parliamentary budget officer include a number of other powers in the budget officer's mandate, including, as you have indicated, an amendment in the House of Commons on estimates.
Also, each Member of Parliament who has a private member's bill has the ability to request an estimate of costs on that bill. However, that estimate aspect — not the fiscal forecasting portion — is something that you were doing and could do in the Library of Parliament.
Mr. Young: To some extent. I will ask Mr. Kalwarowsky because he is the director. He has been the one working on that side.
Senator Day: Mr. Kalwarowsky how will this help parliamentarians from the holding the government accountable point of view? That is what I would like to get to. I would like to know how this new position will help us.
James Kalwarowsky, Director, Economics Division, Library of Parliament: It is true that the library and the economics division has provided a broad range of economic service to parliamentarians. We provide an analyst to any committee that has an economic issue, and so on. We respond to individual requests. The parliamentary budget officer function has a narrower and very specific mandate. We provide service on estimates, but the parliamentary budget officer will be resourced more and can perhaps do a little bit more foresight work, a little more advanced work and also dedicate more resources to that.
We comment on the state of the economy when we are asked but we do not spend a significant amount of time helping parliamentarians interpret the economy. We try to help understand the forecasts and so forth. It is important to understanding where the fiscal numbers are coming from and get a sense of whether the fiscal projections are where the consensus is out in the country and why.
Mr. Young: One other thing that I think is important here is that this will be legislated. The current services with regard to economic forecasting and the estimates are not legislated. Under this proposed legislation, these services will be legislated. By embodying this in the legislation, it gives this function a certain heft that it hitherto has not had.
Senator Day: You will participate in the appointment of this new person. The process has you participating from a list of three names submitted in confidence to the Leader of the Government in the House of Commons by a committee formed and chaired by the Parliamentary Librarian. This person will in part be someone that you recommend. You will recommend through a committee that will recommend three people and then the government will choose one of those three. Am I reading that correctly?
Mr. Young: That seems to be the way it works.
Senator Day: You do not get to set the salary of that individual.
Mr. Young: I do not get to set my own salary either.
Senator Day: Either do we, now.
How much is this person under your control and your budget, and how much is this person with you, in your physical area, but not really part of you?
Mr. Young: That was an initial concern when the bill was tabled in the House of Commons. For an accountability act to create an officer who is not accountable, which was the initial interpretation I had of the bill, was a bit of a contradiction. I pointed this out and there was an amendment introduced in the House to ensure that this officer is accountable through me to the Speakers so that the Library of Parliament cannot function as a two-headed monster. There must be one person responsible for its estimates and spending. There must be one person accountable for its work to you people. Within that framework, however, I see this person as being akin to an associate parliamentary librarian with a special designated function. Because there will be a special designated function, obviously that person will need the ability to make decisions with regard to that function, to carry out the responsibilities associated with that function and to have the support required to do his or her job in an appropriate manner. The position would include an independent mandate to some extent within the library, but it would definitely, for the purposes of accountability to Parliament and to the Speakers, who are my bosses, flow through me.
Senator Day: When you say ``accountability,'' accountability in terms of how many people he or she hires; what the overall section budget will be; what the estimate is for the next year?
Mr. Young: Yes, that is correct.
Senator Day: That will all flow through you and through you to the Speakers?
Mr. Young: That is correct.
Senator Day: Are you satisfied now with the changes that have been made in that regard? Are you satisfied that the flow of authority and responsibility will be there?
Mr. Young: It could be slightly clearer in some ways but by virtue of the for greater certainty, section 74 and subsection 75(2) apply in respect of the exercise of the powers described in subsections 1 to 3. The bill says in subsection 74 and 75, 75(2) that the Parliamentary Librarian has the rank of a deputy head of a department of the Government of Canada, and subject to section 74, which refers to the Speakers and the joint committee, has the control and management of the library. I am satisfied with that amendment introduced in the House that the lines of authority are clear enough.
Senator Day: You have proposed two other amendments. You have a concern about the ability to have access to documents without having to pay for them. If you are not setting that person's budget directly, that still impacts on you overall budget wise, I suppose.
Mr. Young: If I were to have to go back and seek additional funding to pay for data sets, in the meantime you are in a cash management situation; your life is just not a comfortable life as a manager, as someone who is responsible for spending money in an appropriate and accountable way.
Senator Day: Have you done any estimates as to how much more this will cost to establish this office?
Mr. Young: We have started to look at some of the costs. That, to tell you the truth, is one of the reasons for bringing in this former senior public servant because I believe that this must be looked at quite carefully.
I can give you ballpark numbers but, ultimately, the level of resources that is required to carry out the function will be very dependent on the final form of this bill and the act as adopted, and the demand and the volume of work. I have a planning process in place. We are starting to make provisions for an interim operation because obviously this will be an incremental piece because the skill set required for the people who work for the parliamentary budget officer will be highly skilled individuals and we will not find them tomorrow. Therefore we are trying to put in place an interim operation so that within a short period of time after the bill is passed, we will be able to provide some sort of service, whether it is done on contract or by transferring some of the economists who are currently in place and are familiar with some of these functions over to work and support this parliamentary officer function. We are actively planning this. That is why, as I said, I brought in the senior former public servant.
Senator Day: Ballpark, to set it up for the first year, what do you anticipate?
Mr. Young: I will defer to my director general of corporate services on that one.
Jacques Sabourin, Director General, Corporate Services, Library of Parliament: We have been looking at this and we are really drawing numbers a bit out of the clouds. As Mr. Young said, this will be demand driven and it will depend on how much and how quickly senators and members of the House of Commons and committees will want us to respond. We are planning to use the initial implementation stages when we are drawing on resources that we already have, possibly contracts, so that we can as quickly as possible begin giving core services if we can, and keep track of that and evaluate so that we can come back to you and incrementally suggest the adjustments. That will be for you to approve at that point.
The initial year is always more difficult because it is not simply the operation and the salaries, but space and software, especially for some areas where it is not furnished by the departments. The first year includes computer equipment and some collateral additions also to help recruit and staff these positions.
I could throw out a figure, let us say from here to the end of the year, that would be approximately $800,000 to $1 million, but that is iffy. In the ensuing years it could be established, if we get going quickly enough, in a more scientific or reliable way, if you will.
Senator Day: I suppose if we had this person in place we could contact that person and say, ``Make an estimate about how much it will cost.''
Mr. Sabourin: You could, but I am not sure he or she — unless they have their salary well set — could give you any more information at this time, because we need more direction.
Senator Day: Our Standing Senate Committee on National Finance has commented many times that we are concerned about new initiatives. A low estimate is put in, and then we see more and more supplements come in. Is this something that will happen here?
Mr. Young: It is demand driven, so it will be difficult to cost. As I said, as originally introduced in the House, the estimate of cost would be different than the one you might come up with, now that it has cleared the House and the mandate of the parliamentary budget officer has changed.
Senator Day: By adding the estimate aspect to it?
Mr. Young: Yes.
Senator Day: You suggested the word ``proposal.'' You said we must put limits on that word. You suggested that a clearing house for these demands could be the Standing Joint Committee on the Library of Parliament.
Mr. Young: We have discussed this one because it is a little difficult. We are servants of Parliament. We have a defined role; committees also have a defined role. In many ways committees can make recommendations to the respective Houses but the committees do not have the powers of those Houses. My sense is that the wording of any amendment should be that the Houses themselves define the level of service that they feel is appropriate for their members.
We can advise you and give you information, but I honestly do not think that saying yes or no to an individual suggestion should be a committee's job or the job of either chamber. Setting parameters around which the work of the budget officer would be carried out would be entirely appropriate.
Senator Day: I agree with you. If you do not put limits on demands placed on this budget officer, these demands could grow exponentially. There must be some control or you would be working for the budget officer instead of the other way around.
Mr. Young: What can I say? I agree with you. We are trying to find an operation that is appropriate for the use it was intended for, so that the structure is appropriate for Parliament. We are puzzling through that right now: What kind of structure is appropriate and what kind of function is appropriately conducted by this person? You do not want something that will do the work of three-quarters of the Department of Finance and half the Treasury Board. You will end up with an operation of 1,000 people. That is not appropriate for Parliament.
It strikes me that the role of parliamentary budget officer is more to assist parliamentarians in sorting through the huge amount of information they receive and helping them make sense out of that information, rather than generating more that parliamentarians must then try to sort through themselves.
Senator Day: When I look at the proposed section 79.2 of the amendments to the Parliament of Canada Act on page 98 of Bill C-2. I follow you that when a committee has been struck by either House of Parliament and the committee makes demands on this person, then there is a check. The committee has its mandate from Parliament, from either House. Those last two areas, though, ``when requested to do so by a member of either House'' and ``when requested to do so by a member of either House or by a committee,'' do not have any limit on them at all.
A member can put demands on the budget officer, and someone will have to say, ``I am sorry but I cannot do that.'' Will it be first come, first served? Do the demands from a committee come before the demands of an individual? There must be limits on this. Should those limits be in the legislation or should there be a provision in the legislation?
Mr. Young: I think there should be some kind of provision in the legislation. We suggested some wording as a possibility, which I can give you now or later.
The Chairman: Can you give it now?
Mr. Young: I will see if I can find it. This is Mr. Robertson's.
James Robertson, Principal, Law and Government Division, Library of Parliament: As Mr. Young said, I think the idea would be not to set out the limits in the legislation but to set out how those limits are to be determined. It could be: ``When requested to do so by a member of either House and, subject to such rules and processes adopted by the Senate or the House of Commons, estimate the financial cost.''
We can come up with the exact wording or suggest precise wording. The idea is to say that a procedure is envisaged by the legislation whereby a committee of the two Houses or of either chamber shall recommend guidelines, procedures and criteria. Those recommendations would be ratified and concurred with by each chamber. This provision would thereby allow someone to assess the requests made by individual members and determine whether they meet those criteria or not.
Senator Milne: Mr. Robertson, precisely where would this provision come into the act?
Senator Day: Under the proposed sections 79.2(d) and 79.2(e).
Mr. Robertson: I was specifically looking at section 79.2(d).
Senator Day: Page 98.
Senator Day: Do you see section 79.2(b) and 79.2(c)? I think something like that needs to be included in section 79.2(d) and 79.2(e).
Senator Milne: Fine.
Mr. Robertson: That is the rough wording. The best thing would be for Mr. Young to have additional consultations and we will submit, through the clerk, more precise wording to be considered by the members of the committee.
Senator Day: That would be helpful if you would do that. I have reached the end of my questions.
The Chairman: Mr. Robertson, what is the procedure that the Library of Parliament uses now when members of the House of Commons and senators make requests for assistance, briefs and so on? How do you handle that?
Mr. Young: This should be the Associate Parliamentary Librarian and Director General of the Parliamentary Information Research Service. Mr. Finsten is the man who makes those determinations, so I will let him answer that.
The Chairman: It would be useful to know what your present procedure is.
Hugh Finsten, Associate Parliamentary Librarian, Library of Parliament: We try to handle all the requests. If deadlines cannot be met, we negotiate. We always provide members of the committee with the information they need when they need it. Sometimes the request is negotiated. We never turn down a request; we always try to provide something, depending on how much time we have and the rest of the work that perhaps the individual analyst is doing.
The Chairman: You do not have a formal written procedure, first come, first served, with time limits, and so on?
Mr. Finsten: We have no written procedure. In theory it is first come, first served. We try to meet all requests and provide members with the response we can, depending on the amount of time we have.
Mr. Young: Level-of-service guidelines are important for any institution such as the library and so I have requested that the various parts of the library look at the guidelines for their various clients to get a sense of whether they meet the current requirements or need to be revised. That is an ongoing process. We are looking at ways to consolidate the guidelines so that our employees can have a sense of what they should be saying and offering to parliamentarians. It would be fair and appropriate for the staff to have some kind of codification. I will raise that with the joint committee when it meets. Those things must be determined in consultation with senators and with our clients. Certainly, it is timely, given the budget officer issue.
Senator Stratton: It would appear that we are attempting to codify without truly knowing what we are dealing with. If that is the case, then perhaps each chamber should take it upon itself through regulations; after the act is passed, the responsibility becomes theirs. If the Library of Parliament is seen to be imposing, there will be a push back and we are afraid of that happening. We want to be careful how we proceed with this because we do not want to put a fence around the intent of this, which is to allow committees and parliamentarians to do their jobs better. How can you tell them what they think they need to have? That is a basic argument and so we must allow them the freedom under the guidelines of the House of Commons or the Senate, to do that. It could be through instruction or a recommendation rather than an amendment. If we were to proceed with an amendment we would be codifying, which is my concern.
Mr. Young: The amendment would simply set in place a process to develop a framework. My fear is that we are learning as we go. I believe that is your sentiment as well. You do not want something set in stone at this time because we do not know what it will look like in two years. By developing a framework that can be reviewed at an appropriate time, we can give this new function the best start in life. Without a framework, we would not be maximizing the opportunity that this presents.
Mr. Robertson: Mr. Young's point is that those decisions should be made by the chambers and not made by the Library. The difficulty is that without an amendment, there is concern that the current wording would allow any member of the Senate or the House, if his or her proposal were not studied as they wished to raise a question of privilege saying that the statute had not been complied with. The proposal is that there be some permissive wording that is not limited or mandatory to allow the two Houses to develop guidelines, criteria and processes for ensuring that proposals from individual members would be controlled or vetted in advance.
As Senator Day said, there is a built-in process for committees. The difficulty arises with requests from individual members of Parliament. I would be reluctant to say that each request must be reviewed by your colleagues because that would interfere with the rights of individual parliamentarians. However, I would say that the process needs to be set out and allowed for in the legislation.
Senator Stratton: We are treading on delicate ground. I want to see what you come up with so that we can take a look at it.
Senator Milne: Mr. Young, I appreciate that you are prepared to do whatever Parliament mandates you to do. You have answered my first question by saying that this new budgetary officer will be a good fit within the Library of Parliament, which provides such an essential service to parliamentarians. What would we do without our Library of Parliament? The library is absolutely essential and irreplaceable. I am highly concerned about the budgetary impacts of this budgetary office on the library. Your first suggestion is to put parameters around the word ``proposal.'' What kind of budgetary impact will this have on you from the time that the bill comes into effect and the next budgetary year? Will it cut you down?
Mr. Young: An amendment entitling the Library of Parliament to free and timely access to data would relieve a huge amount of budgetary pressure. We have begun to invest some of our resources in the preparation and organization for this change. Between now and the next budget, there will be the supplementary estimates that I can use and make submissions through the Speakers of the Houses for funding to carry out the implementation. I am not too concerned with the process in place. We have been in touch with the relevant departments to give them a heads-up that this is coming, which includes Treasury Board for estimates and Public Works and Government Services Canada for physical space. I hope that will serve to get them thinking as well.
Mr. Sabourin: I could add that one part of trying to keep the costs down to a modest level is that we have some services to researchers where there might be only some collateral increase. Certainly it would be less than if we were to set up a separate office. We would use our publications, editing and other central services to provide services to the PBO.
Mr. Young: I have also revamped the contracting policy so that it is up-to-date, which enables this function to begin relatively smoothly with that basis of administrative support and policies in place.
Senator Milne: Your first suggestion should come within the act rather than in the regulations. Is that right?
Mr. Young: Will there be regulations? I am not sure about that.
Senator Milne: There will not be regulations in this respect and so it has to be clarified within the act.
Mr. Young: That would be my advice.
Senator Milne: Your second recommendation is to control costs and the costs of getting material from Statistics Canada.
Could you provide us with the relevant wording in the Auditor General Act that covers that area?
Mr. Young: The Auditor General's Act in section 13(1) states:
Except as provided by any other Act of Parliament that expressly refers to this subsection, the Auditor General is entitled to free access at all convenient times to information that relates to the fulfillment of his or her responsibilities and he or she is also entitled to require and receive from members of the federal public administration any information, reports and explanations that he or she considers necessary for that purpose.
Now, from my perspective, I think that I would recommend slightly different wording. I would insert the word ``timely'' and ``free'' in front of ``access'' and remove the words ``at all convenient times'' so the subclause reads:
...is entitled to timely and free access to any financial or economic data...
That would be my suggestion.
The Chairman: Mr. Young, would you mind tabling with our committee, once you have had a chance to finalize it with your staff, and send it to the clerk of the committee so we could have the benefit of your expertise on that subject?
Mr. Young: Certainly, I will.
Senator Joyal: Welcome, Mr. Young, and your team. May I express to you the satisfaction of having seen all the premises of the Library of Parliament being accessible to the Canadian public again in such a wonderful way? I want to express my congratulations to all those who have been involved. You are fortunate, Mr. Young, to enter into your new position in a job that has been performed by your predecessor. It does not diminish your merit, but I think it falls upon you to maintain the high standards that have been reached in the past.
That being said, Mr. Young, I was listening to Senator Stratton and I am trying to parallel the parliamentary budget officer with the Auditor General. In the past, whenever there has been a reference to the status of that new officer, people had in mind the budget officer of the United States. They were thinking of the ``corresponding'' — because it seems they are not on an equal status — function performed by the American counterpart.
Can you draw a parallel between the two?
Mr. Young: I think there is a significant difference between the two positions. When bills go before Congress they can be on any subject, but any congressman or senator can propose an amendment on a totally different subject. For example, if it is a space bill, it might have an amendment with regard to agriculture tagged onto it by a congressman or senator. Quite often American bills passed by the U.S. Congress have this huge omnibus quality to them. The congressional budget office, to a large extent, exists to cost those measures as the amendments are proposed. Obviously, the passage of a bill in the U.S. Congress is, to some extent, dependent on obtaining the support of individual congressional representatives with their particular issue attached as an amendment to that bill.
Senator Joyal: I am thinking more about the government estimates or government spending. I was thinking that the key services that could be delivered to senators or MPs, members of the House, would be for the parliamentary budget officer to be in attendance at the committee and to play a role similar to the Auditor General in the committee.
I have had the privilege of being the vice-president of the Public Accounts Committee, I would say 30 years ago, in my other incarnation. I remember the role that the Auditor General played in the committee. He was always in attendance at the committee hearing. He could comment about the testimony that the committee was receiving after the deputy minister or the person who was invited to testify had finished or completed and could in fact qualify in the committee, in the presence of the witnesses, the statement or the declaration made by the committee, or the figures brought by the committee. The committee could advise, even on the basis of occasional contradictory statements. If we are dealing with estimates — and a key function of Parliament is essentially a study of the estimates — I envisaged a role of the parliamentary officer as an essential component of that parliamentary exercise.
I am not sure that the PBO would have the independent status comparable to the role of the Auditor General. The role would be different concerning attendance to committees' hearings, the studying of the estimates and government bills and so on.
Mr. Young: A lot of this must be defined. I am not saying he or she would or would not, but I think that the Auditor General is dealing to some extent, because it is ex post facto; it is dealing with things that have in fact happened in the past. It is to some extent a much more verifiable operation than trying to predict what may or may not happen in the future, given the state of the economy or the state of the nation's finances. I am not saying this person could not, should not, and would not, but I am saying that it is a far more difficult role to carry out in terms of the future projections. Currently, the government is projecting and there are all these different fiscal forecasters out there; none of them tend to agree on anything. What I see this person doing is advising parliamentarians in terms of the strengths and weaknesses, for example, of others' forecasts. I am not sure that could not be done in a committee meeting. It does not have to be behind closed doors. It could, in fact, be someone who comes before a committee and explains. As I said, because it is not retrospective in dealing with something that happened which is verifiable, it is based on a best guess. In the future it is a different situation.
Senator Joyal: Let me take a real example. Let us take a bill establishing the gun registry, a subject that has been at a great level of debate. Ex post facto, the Auditor General checked the expenses, but suppose we are studying the bill, the first bill, and we have the witnesses, the Department of Justice, the solicitors general, they come to the committee and they say that the cost will be $4 million, at the most. Then we, as parliamentarians who vote the budget, have the idea that it might be more costly so we call upon the parliamentary budget officer. We listen carefully to what he or she has to say on the figures or the feasibility conclusions of the Solicitor General's department or the Minister of Justice.
In practical terms, I can see a real involvement by the parliamentary budget officer in the discussion of a bill. For example, there are many financial implications in the bill we are studying right now. I do not need to outline them for you. I am sure that from now on, as soon as we receive a bill, the first question will be: How much will this legislation cost? We will vote on this bill at some point in time, but we will not know how much more money the legislation will require from the government's purse.
From now on, I see the parliamentary budget officer as a permanent adjunct on a regular basis to the work of committees on bills and on review of the estimates if that person is to deliver the service that parliamentarians expect they will receive. I can see something much more compelling than the good intention we might have at the beginning, because all that is at the core of the deliberative function of the House of Commons and the Senate. You can imagine that, as much as the Auditor General has become a determining part of the deliberation of Parliament, the parliamentary budget officer could be a crucial part of the determination and voting on some proposal of the government.
Mr. Young: In my view, that is more or less what the analysts that work in the research branch currently do. They provide you with that information. As I said at the outset, this function is complementary and an extension of an existing function. I think it will be up to each committee to decide whether the committee wants this individual to go on record and appear before that committee. When I was an analyst at the research branch, I appeared before committees, not necessarily to comment on legislation but as a witness. It was not unheard of in the past for people working in the library to perform that function.
Senator Joyal: Yes, but there is a sea of difference between our learned researcher, who provides us with documentation that I read, and the real crux of debate in Parliament over an issue that becomes strongly contested.
Mr. Young: Ultimately, this person is there to serve you. This person is not there to get public profile for himself or herself. The service is to be determined by you in your capacities as legislators and senators to hold government to account. I will not prejudge how that individual should or should not work, but that individual is not there to seek separate public profile; the individual is there to serve Parliament. It is the prerogative of Parliament, the committees, senators and members of the House to determine how those services will be used within the parameters as set out by the legislation.
Senator Joyal: We call the position a parliamentary officer. The position bears the title of ``officer.'' When I read the status of that officer, as you put it in neutral terms, I noticed the officer is essentially chosen by you. A committee that is formed by you puts forward a list of three names. There is no qualification of the membership of the committee. You could appoint whoever you want to that committee. You recommend three people, and the Governor-in-Council chooses one of them. However, parliamentarians per se do not have a resolution to adopt and are not consulted via the leaders of the recognized parties and so forth. It is totally what I would call an administrative, bureaucratic initiative. Parliament is not involved in the selection of the person at all.
Mr. Young: Senator, this was the bill as tabled. I had no input into drafting this bill. My job, as I think I said at the beginning, is to implement what Parliament decides in an efficient, timely and appropriate way. I cannot really comment on those processes. That is something that you might consider asking the drafters of the bill and the people responsible. I am there to make the provisions work. If you change the provisions, I will make those changed provisions work too. I am not here to say that they are good, bad or indifferent. I am here as your servant to ensure that your decisions are carried out in an expeditious way.
Senator Joyal: The term of reference is five years. The term is shorter than for any of the other parliamentary officers — the Commissioner of Official Languages, the Auditor General, the Information Commissioner, the Privacy Commissioner and the Chief Electoral Officer.
Mr. Young: Again, that was not my recommendation or decision. I suggested months and months ago that if this role were to be open to an academic, legislators might want to allow a shorter term, because an academic seeking leave from a university would not necessarily be able to be away longer than five years. That is why it says up to five years. However, I was not responsible for that language.
Senator Joyal: In relation to the access provision, proposed section 79.3(2), I have another concern about the financial or economic data to which the parliamentary budget officer will not have access. I do not have before me here the comparable provision in the Auditor General Act.
Mr. Young: I just read it out. I can give you a copy.
Senator Joyal: I am on subparagraph (2) of section 79.3, not (1), which talks about the restrictions. You were talking about the general access. Mr. Young, are the limits imposed on that new officer comparable to the limits the Auditor General faces when the Auditor General implements his or her terms?
Mr. Young: I am sorry. I do not have an answer to that question. I am not aware of what the limits are.
Mr. Robertson: We need to look into that. We will get back to the committee on that point. I posit as a possibility that the difference is that the Auditor General reports on Parliament, and there may not be the same restrictions. The budget officer works for Parliament, and there may be executive versus legislative distinctions, which is why restrictions are imposed for the budget officer but not for the Auditor General. However, we will confirm the wording of the Auditor General Act.
Senator Joyal: Especially when I read subparagraph 2(b) of section 79.3, there is no question. I will give you an example. When a government establishes a program, that program has financial implications. Figures are always attached to the cost of implementating the program. There are various scenarios or options. Those scenarios and options, of course, are the result of financial analysis based on past experience or projections based on feasibility studies and so forth. If you bar the parliamentary budget officer from all that information, then the Department of Finance will tell you, this is what it costs, period. You will not have access to any of the previous information on which the department based the analysis. Will that poor person try to redo the work of the Department of Finance or the related department in order to perform their duties?
In light of my previous experience as a minister of the Crown, if someone decides to shelve and leave in the drawer all the economic and financial information from the Department of Finance on the cost of the programs they want to put forward, good luck in trying to redo it by their own means. This is especially true when they consider the clerical or technical support within the Department of Finance compared to the person in their service who will try to gather that kind of information. It will be a real challenge.
With that exclusion, we will make the job of that person so difficult that the result will be limited in terms of its input into parliamentary debate.
Mr. Young: I agree with you. If the input is in a Treasury Board submission, which has options, that input would be deemed to be advice and, therefore, inaccessible.
Honestly, I am not sure precisely what the implications of that exclusion are for the work of this officer. Again, I brought this senior public servant in, who has worked as a senior official in Treasury Board, the Department of Finance and the Privy Council Office, as someone who can help sort through some of this information. However, I do not have the answer right here.
Senator Joyal: Can you review that, Mr. Young, with your people?
Mr. Young: We will have a look at it. We can send additional information to the clerk.
Senator Joyal: I am concerned that eventual users of the service have input into the development of the position. Let me be more specific. Some members in the other place and senators have a keen interest in the study of estimates and government accounts in the past. Those persons have the benefit of experience in terms of what they need and what would be helpful from the role of parliamentary budget officer.
As you mentioned in your presentation, you want to establish an advisory committee of some sort to define how the job that is now contemplated will work. It would certainly be helpful if the committee had parliamentarians as members, probably identified by the leader of the respective parties so that committee membership is open to anyone. Those members would help you to devise the various ways and means to implement the status of that officer.
Mr. Young: I agree that we need some sense of what the clients require. Until this bill is passed, however, I am not sure that I am in a position to seek the input of existing parliamentarians. That is why I asked former parliamentarians who have been users of these services to serve as a surrogate sounding board. I worked through the Canadian Association of Former Parliamentarians to ensure there is an appropriate representation. That was why I did it that way until the bill was passed.
Senator Joyal: I totally agree. You cannot request the help of parliamentarians on something that Parliament has not yet decided upon. I do not suggest that. I suggest that parliamentarians be part of the committee when the bill goes through Parliament and is enacted. The objective of the position, which I think is sound and which I support, should be met in a way that is user friendly and will provide the help we expect from the person who holds that position.
Mr. Young: That is entirely what I want to do. I appreciate that suggestion.
The Chairman: Thank you, Mr. Young. You have told us that this new body, the parliamentary budget officer, who will provide estimates of financial costs of proposals, is not really new because people in the Library of Parliament, who are economists and so on, now do estimates,. You told us that should the bill pass, you will not have to start from square one in ramping up for this new position.
Mr. Young: That is correct.
The Chairman: You may need to hire a lot of new personnel. Where would they be located? They would not be in the library. Have you looked at new space?
Mr. Young: I do not know whether you are aware of this, but the bulk of the staff of the Library of Parliament is currently at 50 O'Connor Street, the Clarica building. We could use some empty spaces there. I have put Public Works and Government Services Canada on notice that we will look for more space. I think I have options on any space that comes up.
I have tried to cover these things off. It is difficult to work with a staff that is scattered all over hell's half acre, as you know. We are trying to set up in such a way that we can function as a team, and that these people will be integrated into, and have access to, the other expertise that is available and already in place in the library.
The Chairman: That was my next question. Do you see the office of the parliamentary budget officer as separate and distinct or integrated?
Mr. Young: There are two things. The bill establishes a parliamentary budget officer. We are trying to make provision for a parliamentary budget office function to support that officer. My view is that we can prepare — and we will prepare, and we will have interim arrangements in place — but once this individual is appointed, the individual will undoubtedly have their own view. We will be nimble and we will alter our arrangements to ensure that if there are valid concerns and reasons to look at a differently structured organization, those concerns can be accommodated.
Senator Joyal: I feel that your prognosis of $800,000 is modest.
Mr. Young: My director general is a frugal man.
Senator Joyal: Let me give you an example that we have heard here, I think it was 10 days ago. When the Senate Ethics Officer, SEO, testified here, he was asked how much his office would cost. He said in the vicinity of $900,000.
Mr. Young: This $800,000 is for the balance of the first year only. The annual amount in future, when the office is fully staffed and operating, probably would be three times-plus that amount.
Senator Joyal: That is what I was going to tell you. When I think of the technical support of the SEO versus the technical support of the parliamentary budget officer with actuarial officers, economists and so forth who command high salaries, those salaries will be reflected in the overall budget, like it or not. I was surprised when you stated that figure.
Mr. Young: No, Mr. Sabourin was talking only about the initial part.
Mr. Sabourin: The set-up part, designing.
Mr. Young: To the end of March, 2007.
Mr. Sabourin: Yes.
The Chairman: Mr. Young, thank you and your associates for this helpful and useful information. The body and the legislation are brand new, and we need a lot of help to get our minds around how they can function and work. You shed a lot of light on that. You will send some of the drafting we asked for to the clerk.
Mr. Young: Thank you very much, it has been my pleasure. It is my first appearance before any parliamentary committee since I have taken over. Thank you so much for the baptism by fire.
The Chairman: It was not by fire.
I am now pleased to welcome Mr. Peter Dobell, Founding Director of the Parliamentary Centre, which he launched in 1968, after serving for 16 years in the Canadian Foreign Service. The centre aims to strengthen legislatures in Canada and around the world. Mr. Dobell is the author of various books and studies. He is a member of the trilateral commission and a member of the Order of Canada. He has been on the board of the Institute for Research on Public Policy since its foundation in 1972.
Peter Dobell, Founding Director, Parliamentary Centre: Honourable senators, it is an honourable to be here today. I am also pleased that it became necessary for the schedule to the changed so that I followed Mr. Young rather than preceded him, as it helped to establish for me some of the dimensions of the rather difficult decisions with which you will be faced.
I will briefly comment on the congressional budget office. In the United States, the legislature, which is autonomous, decided that it needed the resources in order to effectively — I would even use the word ``confront'' the executive. In Canada, it is interesting — I think this is a reasonable assumption — that the initiative for PBO is the product of a minority Parliament. I do not think it would have happened if we had successive majority governments. It is true, as Mr. Young pointed out, that CBO has great resources and a very wide mandate, much greater than the parliamentary budget office.
Having listened to Mr. Young and agreeing with much of what he said, it is prudent for me to suggest that I would differ with him. When he says that the PBO is an extension of the library, in terms of where it is situated in the bill, it is. However, one must recognize that the library as it now operates is a demand-driven organization. It provides assistance to committees and it responds to requests from individual members. Where I think we are dealing with something different in PBO, or has elements of difference, is that it has a mandate. The initial mandate is to determine whether, in its view, the figures in the budgets are accurate. That is it what started it. We then had in the House of Commons the important addition that there should be activity in the area of estimates. That is the most important addition to this proposed legislation.
As I have suggested, the principal mandate of PBO is to analyze figures in the budget and report when, in its judgment, there are questionable components of that budget. The critical thing is that the PBO is expected to take the initiative. Without a request, it must prepare the information, the analysis, that would enable it to respond to that major question. In other words, it is not only collecting information but it must be in a position to be able to go public with the results.
It is not formally the same, as Senator Joyal suggested, as the Auditor General, but there is a great deal in common with the situation of this new body. It is very important that this power be confirmed. It is implicit in the act but how the first incumbents handle that responsibility will establish a pattern for the future. If this is to become an agency that can be a powerful assistant to Parliament, it must have a degree of initiative. That must be accepted.
I can well understand the problems that Mr. Young faces, since it is suggested that the PBO become part of the library, but it is certainly unusual to have an Order-in-Council appointment that is under someone who is also an Order-in-Council appointment. We are facing quite a new situation.
I want to get to what I consider the real core of where this could become very important to Parliament.
The mandate of the PBO was extended to provide estimates-related research. To me this addition is critically important because the members of the House of Commons who are responsible for observing and reporting on estimates have done an absolutely miserable job.
Just as I think the PBO is mandated to examine budget figures critically and report results publicly, I think the PBO should also take the initiative and examine estimates. This area must be completed with some care, however, because it is not the place of this agency to question the policies that expenditures are intended to support. That area is for members of Parliament to question.
However, it is appropriate to examine Departmental Performance Reports that are sent to Parliament in the autumn. In these reports, each department reports on the extent to which they have achieved the planned results and the planned outcomes promised in the previous spring submissions, and whether the resources requested have been sufficient and well used.
In other words, the department comes in with a performance report indicating that in the past the department undertook to do this, this and this at a certain level of cost and whether they achieved their goal. Of course, if they are honest, often they have not.
If the PBO identifies deficiencies revealed in performance reports, committees will do what they do not do presently. Committees never look at performance reports. The reports are too complicated. Committee members do not have the background, knowledge or even the time to do the analysis. However, a body like the PBO could do that analysis. If the analysis were available, then I think the committees would find the time to use it.
The Chairman: Do you think the analysis of the performance reports should be addressed by the House of Commons Standing Committee on Public Accounts and the Standing Senate Committee on National Finance?
Mr. Dobell: I think they should be addressed in each committee.
The Chairman: In the Senate?
Mr. Dobell: In the Senate, the National Finance Committee should be the committee to address this issue.
To me, the important aspect is that Bill C-2 promotes transparency and accountability. Its main focus, apart from PBO and however it develops, is with respect to creating or strengthening agencies and in tightening the rules.
Surely the principal function of Parliament is to hold the government to account, and the bill is silent on how to strengthen Parliament's capacity. In fact, the main instrument for Parliament to hold the government to account are the estimates, and they have been virtually ignored. Maybe there has been one political meeting with a minister, one or two possible meetings with officials, but not something that is really an exercise of accountability.
I think a strong parliamentary budget office that takes initiative in this fairly constrained way would make an enormous difference to promoting accountability.
Three committees are identified in the bill as having power to request analyses: the Standing Senate Committee on National Finance, House of Commons Finance and Services Committee and the House of Commons Standing Committee on Public Accounts. However, there is a fourth committee in the House of Commons that is not directly your responsibility.
The House of Commons Standing Committee on Government Operations and Estimates was given a mandate when it was established only a few years ago to propose ways to improve the review of estimates. The committee has completed one fairly good report, but this legislation gives a new opportunity. I think that committee should be added as an amendment.
It may not have been included in the House, I do not know. The fact that the current Standing Committee on Government Operations and Estimates is chaired by the opposition might be a reason why there was hesitancy. I do not know. I cannot explain why it was not included initially, because it should be included.
The Chairman: Is it tradition that the National Finance Committee and the Public Accounts Committee are chaired by a member of the opposition?
Mr. Dobell: That has been true since the beginning, yes. You are right. Come to think of it, the National Finance Committee was chaired by Doug Everett many years ago, and it was in a Liberal government.
I think the tradition started in 1984 in the Senate as a way of getting support from the opposition. I have not researched this, but it occurs to me that the committee was always chaired by government members when there was a majority government.
I have another thought I would like to present to you. It is closely related.
Supplementary Estimates are the instrument used by the executive to shift reports between departments after the annual estimates. The Supplementary Estimates in the House of Commons have been referred to House committees since 1985, directly to each House committee. Prior to that, they went to the House of Commons Miscellaneous Estimates Committee. The advantage there was they could then overlook the estimates, as can the Senate committee that receives all of them, and see where the changes take place and where money is taken to put into another department. I think this information is important in giving Parliament a sense of what changes have taken place during the course of the year.
That committee was stopped by the McGraw committee, which I think at a time was trying to build the strength of standing committees and decided to send them to each standing committee. In retrospect, I think that was an error.
My own view is that it would be best to refer Supplementary Estimates were to the House of Commons Standing Committee on Government Operations and Estimates, which could then either conduct an inquiry itself or refer specific inquiries to an individual committee.
Again with the assistance of the parliamentary budget office, this committee could provide another way for Parliament to hold the government to account. That is an additional reason I think it is important to include the Government Operations and Estimates Committee in the bill.
It is fair to say that because the library is a responsive organization, when it comes to estimates, and because its resources are limited and it observes that the members do not take much interest, there is not the kind of in-depth analytical support that could help standing committees make an effective examination of estimates.
The staff must have the capacity to respond to questions if the parliamentary budget office has detected deficiencies. The staff must be capable of that kind of analysis; not just the kind of economic analysis needed to judge whether the budget figures are accurate. When it comes to looking at estimates, and particularly performance reports, where a deficiency has occurred, one has to recognize Treasury Board faces this problem all the time. Naturally, when a department finds it has not really met the performance that it promised, it manages in a very skilful way to not be dishonest but, at the same time, to make it pretty hard to see where the problem has occurred. So much so, in fact, that people in Treasury Board have to have special training in order to be able to detect. This is something that takes years of experience in how members of the executive handle money.
My strong feeling — and this is more an obiter dicta to the next head of PBO — is that he or she should be able to hire officials, former officials from Treasury Board or even hire them away from Treasury Board, as long as they have the experience to detect where a cover is hiding some failure.
If the PBO is to review performance reports as well as the budget and possibly examine the Supplementary Estimates, one must recognize this is going to be a large office. Senator Joyal is right. I t is proposed that this be part of the library, but I think, depending on who the head of PBO is and how much he or she takes up the mandate, it could be a tense relationship, because, as Bill Young pointed out, the library is neutral and is very careful to be neutral. It does not stick its neck out. This office will be expected to stick its neck out, and that, I think, is going to produce tension. I am happy that a man of Bill Young's ability is in that job and he has good personal relationships, because unless he is able to get hired someone who does not use the mandate and does not undertake an initiative, I think this is going to be difficult.
Senator Joyal: His term of office is longer than the PBO, so he might be saved by that.
Senator Day: He gets to nominate him.
Mr. Dobell: With adequate and appropriately skilled staff, PBO could greatly enhance Parliament's capacity to hold the government to account. Coming in by the back door, I think this is a very interesting proposal.
The Chairman: Mr. Dobell, your years of experience and knowledge have certainly shone through in your presentation today.
Mr. Dobell: I am glad it still shines. It is getting pretty dull these days.
The Chairman: A number of professors and experts in public administration who, for years, have been saying that in order to hold government to account, you really have to start empowering parliamentary committees to do their jobs more effectively. With this new body that you have been describing, the parliamentary budget office, that is certainly one of the ways in which more financial estimates information can be given to committees and to parliamentarians.
We have had some other professors and experts appear before this committee on C-2, Mr. Mitchell, Mr. Arthur Kroeger, and other professors. They have said that maybe the parliamentary committee should be strengthened in other ways and not just with research. I was wondering if you have any thoughts on what other things could be done, apart from the PBO, to strengthen parliamentary committees so they can better hold the government to account.
Mr. Dobell: Essentially the power is there. It is how they organize themselves. Just to give a very simple little proposal, which is followed in a number of parliaments, if members did not sit government on one side, opposition on the other side, you change the dynamic of the committee. That does not require any empowerment; it just requires a chairman who says: Why do we not mix up a little bit?
The Chairman: Interesting. It is shining through again.
Mr. Dobell: There are many small things that could be done. For instance, and this is one side where the Senate is way ahead of the House, they could stay in committees long enough to thoroughly understand their subject.
The Chairman: The electorate has something to do with that.
Mr. Dobell: If you go back, the extreme example here was Senator Salter Hayden who for 20 years was the chairman of the Standing Senate Committee on Banking, Trade and Commerce. There are many other people with eight, 10, 12 years, and those are the senators who are able to lead a group and the rest of the committee. Those people do not have to be educated every year. That is something that I know a number of members would like to happen, but the leaders like to move these guys around.
Senator Milne: I believe that Mr. Dobell has just suggested longer terms than eight years for senators.
Senator Stratton: Good try.
Mr. Dobell: I actually wrote Molgat's report, and it was nine years.
Mr. Dobell: Parliamentary secretaries should become a career path. They should be the link between the department and the committee. A good parliamentary secretary can help the committee to understand the problems and can bring them information when they need it.
Mulroney started out, I think, handling committees very strongly. There were a number of strong committee chairs and they all stayed in office for the four years of that Parliament. Come the next Parliament, the only two who did not stay, all the rest were dumped and the two of them were because they were so tough, one was Don Blenkarn, and he was very good in addition, and the other one was Pat Nowlan, who was just difficult.
Back in the Mackenzie King-St. Laurent period, some parliamentary secretaries held office for 10 years, even between two governments, and they became junior ministers. They were extremely effective. Committees then did not meet very often, but that would also allow for the development of committee chairs after they had shown some experience.
I can remember taking a group of senators and members of Parliament to Washington, when I still had the money to do it, to look at what we could do to strengthen committees. One of them was to get chairmen with experience. A charming member from Quebec in the Conservative Party had just succeeded as chair of the energy committee. He was quite honest. He said, ``My only experience in the energy industry is when I go to self-serve and pump my own gas.''
Ministers should encourage their staff, the officials, to be as informative as possible. You mentioned you had Mr. Kroeger as a witness. When Mr. Kroeger was a deputy minister, he had sufficient confidence, he knew the subject well enough, and he negotiated the Crow's Nest agreement. He is writing a book on it now.
There is a fear that officials have of appearing before committees, not so much Senate committees, which they find more polite, usually better informed and much less political. That creates an environment where they are much more comfortable. So that all contributes to better committee reports, and you are the beneficiaries of that because most of those things you have done yourselves.
Senator Day: Mr. Dobell, thank you very much for your comments. I share your view that this is a very interesting proposal, and I believe that the concept is good in that if it is developed properly it will provide parliamentarians and committees within Parliament with more tools to do our jobs more effectively. So many people have said that committees must be given more help in this process to hold the government accountable, and that is the way it is supposed to work.
I am concerned about some of the wording that appears here in establishing this particular office. Were you here when Mr. Young and his group made some recommendations for some changes? Do you take issue with any of those proposed changes?
Mr. Dobell: I think he was right to try to put some constraint on requests from individual members. The bodies that should be assisted are the Houses themselves, and the committees. To me, the request for information by individuals can be, and is, well handled by the library. I do not think they need that in addition. If they are working together they can cross the corridor and say, ``Give me a little help on this, would you.''
I would go further than he did and say it should be eliminated.
Senator Day: Mr. Young discussed the two proposed amendments at page 98 of the bill, 79.2 (d) and (e). He referred to the words, ``when requested to do so by members of either House, estimate the financial cost of any proposals.'' He said that could be anything.
Mr. Dobell: If PBO is going to be part of the library, I think that request should go through the normal channels and they would have all the people, the informed people, available.
I should not say this, but I know of occasions where some of these requests for quite serious work are then used to assist a member of the family who has a larger project in school. It does not happen often, but unfortunately it does happen occasionally. This is an area where there is enough capacity to assist members, and it does not need more.
Senator Stratton: I am more curious about the time when we were going through the gun control issue. We were told it was $2 million or $3 million and it ended up at $1 billion. We would get the Treasury Board officials in who would present the costs for this coming year and we would say to them, ``What about next year?'' I have been on the Finance Committee for a long time and it was consistent: We do not think there will be any costs; we think it is under control. There was no vehicle by which the committee could take hold of the situation. We wanted to do something, but we were frustrated in our endeavours to try to do something. This is the reason for this office, that just for that fact alone you could have the ability to say to someone, after two or three years of escalating costs like this, it is time to get something happening.
How do you perceive this office handling that type of situation?
Mr. Dobell: The real problem with that was what is called ``vote-wording'', was the trap. The gun control bill was included in the general administration bill of the Department of Justice, so that this new office should be encouraged — and this is something that would only come later; I do not think it can go in the bill — to get support for modification of some vote-wording.
From the executive's point of view, they like just a few votes because then they can move expenditure around easily without having to go back to Parliament. However, it means that things get lost. This new would certainly be able to examine and should find out the problems, but it would be easier for all of you if there were some modification of vote- wording as well so that particular controversial programs, the costs of those could be clearly seen at any time.
Senator Stratton: I appreciate that answer. It is where I was hoping you would go.
The other problem was as they were going through the implementation of this gun control bill and the costs kept escalating, they ran into a great number of unknowns, in particular, with software that did not do what it was intended to do.
They then changed departments for the management of the issue. My concern is with this new office managing a new program. Government should take risks and it certainly took a big risk on this one and, apparently, lost. For this kind of issue, where do you think this office would help us to better understand and help the department understand what went wrong and where it is going wrong? Our job is not only to look at the problem as we see it unfold but also to try to get in front of the problem. When we knew that a problem was unfolding and the department did not seem to be managing it, which became apparent, we were frustrated by not being able to get in front of it and find a way to manage it. Do you see this office helping a committee, such as the Standing Senate Committee on National Finance, to accomplish that goal?
Mr. Dobell: It depends on what you mean by ``manage.'' The executive manages and Parliament holds the executive to account.
Senator Stratton: Yes, okay.
Mr. Dobell: Excuse me for being direct but I do not think it is the job of senators to tell the department how to run it. Rather, you want to be able to find out where it has gone wrong.
Senator Stratton: That is it, exactly. With my apologies, I used the wrong term. We need to get out in front of them because if they do not know or they cannot explain it to us, then surely to goodness this office must help us get there.
Mr. Dobell: Let us assume that the program was started with a single vote. Immediately after they run into problems, they have to come back and explain the problems that have arisen and ask for more money. You have to analyze whether that is an appropriate request. The answer is something as detailed, controversial and tricky as that. That agency would be able to help you to monitor it but if there were a single vote, it would come to your and their attention much more quickly.
Senator Stratton: A single vote is not likely to happen. In the view of governments, part of the reason they do these bills is so they can do precisely what they did. It does not matter which government because they can be placed in the same category. If we cannot have that, could that office truly help us?
Mr. Dobell: You would have heard about the problem much sooner if the office were to exist; there is no question about that.
Senator Day: I have a supplementary question. The Standing Senate Committee on National Finance initially demanded of Treasury Board that they show the gun control agency as a separate vote. We were the first committee, long before the Auditor General, to raise the flag that the agency did not appear to be managed well because the agency kept coming back for supplementary estimates, although the amounts were small in the beginning. You are right in saying that we needed to see it separately and not buried in another vote in order to do our job; and we were able to achieve that.
Senator Stratton: However, we were not able to solve the problem.
Senator Day: The second step is for the Senate to gain the attention for its reports that the reports deserve, but that is another issue. We raised the issue of the gun control agency long before the Auditor General raised it but it was not picked up and noticed until the Auditor General talked about it. That issue is for another day. We are moving in the right direction by having a parliamentary budget officer. I am not sure that we have achieved what we want to achieve with the wording in the bill.
If we accept the wording as it reads and pass the bill, is it not be misleading to call this person a parliamentary officer? The individual will not be appointed by parliamentarians. We do not have any control over the budget of the parliamentary budget officer where normally a parliamentary officer works for Parliament and helps Parliament to do its job. Indirectly, we will receive help but we will not be involved in any way in the appointment of this person. Do you see that as a difficulty?
Mr. Dobell: I did not come here to suggest amendments. This situation is curious where an Order-in-Council appointment in a sense is made subordinate to another Order-in-Council appointment. I see it as a difficult, intense relationship.
If you separated it from the Library of Parliament, then you would create an independent agency. There would not be the same tension but that is a matter for senators to determine.
As I pointed out in answer to your question, the library can and should answer independently of this new PBO if you drop the reference to ``any proposals.'' The library can handle that. It is funny to have someone who is an Order- in-Council appointment but, in effect, a subordinate to the Parliamentary Librarian.
Senator Day: You saw the appointment process wherein the Parliamentary Librarian chooses which PBO candidate is appointed.
Mr. Dobell: I do not know whether that came as an initiative of the Parliamentary Librarian or as a decision of the executive as the safest way to proceed. That is, perhaps, how it happened.
Senator Day: I do not know the answer to that, either. Perhaps we will find out before we finish this review.
Do you find it interesting or problematic that the parliamentary budget officer can hire specialists independently as the officer sees fit?
Mr. Dobell: The officer certainly should be able to do so.
Senator Day: In terms of creating tension, we would have an office within the Library of Parliament headed by a person who would bear the title of parliamentary officer but would not truly be a parliamentary officer. In effect, the officer would work under the Parliamentary Librarian but would have the authority to hire their own specialists, not in consultation with the librarian, and appoint people from the Library of Parliament. Presumably, that would be in consultation because the parliamentary budget officer would work for the Parliamentary Librarian as opposed to the Library of Parliament. Do those elements support your argument that some tension could develop?
Mr. Dobell: If the parliamentary budget officer is to be truly in control, it is necessary for his staff to report directly to him.
Senator Cochrane: Mr. Dobell it is wonderful having you here. Your experience and expertise is fascinating. I wish I had known of you and your expertise many years ago.
Would you like to see this parliamentary budget officer located in the Library of Parliament?
Mr. Dobell: I think there would be tension and constraint; it would complicate. On the other hand, I have the sense that there would be resistance to it being independent because it might become too strong; too much like the Auditor General.
Senator Milne: Mr. Dobell, I must admit that I was one of the greenhorns that you were speaking about when I with a first asked to chair this particular committee years ago. I protested that I was not a lawyer; what did I know about legal and constitutional affairs and they told me that was a good thing.
You have pointed out that this Order-in-Council appointee, working underneath another Order-in-Council appointee is sort of a ``new animal.'' The questioning has gone around whether the office should be within the Library of Parliament or stand alone. Should the office stand alone? Should we make this amendment? The librarian told us that he was not involved in the drafting of this bill. I assume he did not ask for this.
Mr. Dobell: I think that is true, he did not ask for it. He is a friend of mine so I do not want to move him aside, but it seems that in the end, his life would be easier if it was a separate office.
Senator Milne: Or this person could not independently hire people within the parliamentary budget.
Mr. Dobell: The problem is that the Library of Parliament budget itself is limited. In the last Parliament the need was great and the library was constrained. If they stay in the library, the PBO will be given access to some of it, but then the two of them will be fighting over who is to be supported.
Senator Milne: This is one of my grave concerns because the Library of Parliament provides such an invaluable service to parliamentarians that I do not want to see their budget being leached away. Any budget for this particular officer should be in addition to the Library of Parliament.
Mr. Dobell: If it stays there will undoubtedly be additional monies given, but then, potentially, there will be competition. It is a bit like the reverse of the gun control. I think that the demand would grow quite rapidly for it. When looking at the Auditor General, for example, the staff is huge.
Senator Milne: I also look at some parliamentarians that are likely to come up with multiple requests for information on various costing items.
Mr. Dobell: I would think it very important, if you decide to go down that route, that you absolutely remove that; the individual member can ask for it. They can go to the library and the library has many competent people to provide that assistance. You do not want the two agencies, if they are separate, competing once again.
Senator Milne: That would double the cost.
Your second suggestion was to add in the committee on government operations and expenses as a fourth —
Mr. Dobell: Estimates.
Senator Milne: Yes, estimates, as a fourth committee under section 79.2. It goes to (b) and then it has (i), (ii) and (iii) underneath it. It would be (iv); an extra committee should be added under there. That makes a good deal of sense to me because all four of these committees would then, in the normal parliamentary procedure, be chaired by opposition members. They certainly are in the Senate and they would be in the House of Commons as well.
Your third issue was on staffing. You need enough staff to help the standing committees make a real in-depth analysis of estimates and identify deficiencies in the performance reports. That is a further responsibility you would direct to this person.
Mr. Dobell: Obviously, that will not be part of the legislation. It depends on how the head of that agency looks at it. I think that is important. Since you gave me the opportunity to talk, I have done it.
Senator Milne: You are suggesting that as part of their role?
Mr. Dobell: That is correct.
Senator Joyal: Welcome, Mr. Dobell. I appreciate your contribution to parliamentary life. It is a great service you do to the people of Canada to make yourself available to Canada and to parliamentarians.
I want to come back on the issue of this new position because it has the potential of changing the capacity of Parliament to keep the government accountable. Considering the bill as a whole, it has the greatest opportunity and was probably not conceived like that. As you pointed out, the estimates, which is what the government has to deal with, was added in the House of Commons when it studied the bill. I am convinced that we must strengthen the independence and the capacity of that role if we want the position to perform and achieve the results in the way that Senator Stratton and other member have been pointing out.
I am quite concerned that the terms were limited — was conceived originally to three years and then increased to five years — was added to the estimates. You now propose that we add the operations and estimate committee of the House of Commons. I am grateful that you pointed out that this is a new position within the government structure because that officer will have the statutory job or responsibility to provide objective analysis of the estimates of the government. This is not upon request; this is a yearly responsibility.
If you ask any person with a minimum of public administration experience what would be entailed in providing, ``objective analysis to the Senate and to the House of Commons about the state of the nation's finances, the estimates of the government and trends in the national economy,'' you would immediately have an idea of the wide range of issues that are raised. We cannot have the perception that this person will be just there on call, waiting for members of Parliament or senators to ask for an opinion on this or that. That person will have to establish their own operation that will have the responsibility to give objective analysis of the state of the nation's finances, the government estimates, and third, the trends in the national economy. If I were the person occupying that job, I would have to establish the capacity within my own office to do an objective analysis on those three topics. This is such an important addition in the government's operations that it deserves the proper status and capacity to perform, if, as you say, this could be a major change in the way that Parliament holds the government to account.
Based on your experience, I wonder if we should not review the status of that person and the underlying capacities that should be provided if that position is to be meaningful within the context of the mandate that it receives from this legislation.
Mr. Dobell: I think I have already more or less responded to that question when it was asked by Senator Day.
The one qualification I would make in your general statement is that one must be very careful in distinguishing when you use the word ``estimates.'' This officer could not or should not start expressing opinions as to whether a government program is good or bad. It must only be based on the performance. That is objective, and it is post facto.
Senator Joyal: Value for money is the realm of the Auditor General.
Mr. Dobell: That is right.
Senator Joyal: There are two distinctive mandates. I know the mandate of the Auditor General is to evaluate.
Mr. Dobell: The Auditor General is post facto, too. This, in a sense, is immediate. The performance reports arrive in October to the House or to the Senate. That office should immediately sit down and compare them with their previous reports to determine to what degree they have met their goals and in what way are they trying to hide things that have gone wrong without actually being dishonest. That would make a huge difference.
Senator Joyal: My second point is about the strengthening of Parliament — the question that was put to you by our chair. If you look at the Gomery report, the first eight deal in one way or another with the work of committees. I have the French version, so I will paraphrase it in English. The first is: To offset the imbalance that exists between the resources that are available to the government and the resources that are available to parliamentary committees and their members, the government should increase considerably the financing granted to parliamentary committees.
That is the first Gomery recommendation, over and above all the allegations of scandal and so on. It is the same with the seventh recommendation: That the members of the committee of public accounts should be there during the whole period of a legislature or a Parliament, if you want. Continuity, expertise, independence and access to means are essential for any committees to perform its duties.
I totally subscribe to the objective of this position, but I am not so sure that we are initiating changes in the committee's work or procedures. The rules of the House would have to be changed because the estimates are deemed adopted by a day. The committee might not even have one meeting, and the estimates are deemed to be adopted. We must fundamentally change the procedure and the way that committees are supported by Parliament if we want this issue of accountability to be dealt with in a reasonable way. At the same time, should we not consider asking for, in adopting those provisions, a recommendation that there be immediate change brought to the way that the committees are structured and the way they perform their duties? Otherwise, the legislation will be good on paper but in practical terms it will not be implemented.
Mr. Dobell: I am not sure I fully agree with you. As an aside, if you look at the Gomery papers you will find the first one is mine. The first eight recommendations are taken from it, so I fully subscribe to all of them. Where I think I disagree with you is that this agency should not be commenting on the estimates as they are presented in the spring, in February, March, April, because that is political. The time that they should be engaged is the autumn, which the committees never look at that, but there are performance reports there then. That is objective information, and it is not political to say that they have promised something and they have not done it. That is just factual. When it comes to the estimates, you are right. Come May 31, they are adopted, or they are deemed to have been adopted whether they have been discussed or not.
Senator Day: In the House of Commons?
Mr. Dobell: That is right. However, there is no reason that they cannot go on examining the estimates. In other words, we have encouraged committees to keep looking. They are not judging whether the estimates are is good or bad, but they should use that information in their other work. They are technically alive all year. The only thing that is not alive is that they must provide enough money so the government can function.
Senator Joyal: Again, I come back to the strengthening of Parliament. Should we not really take initiative to review the way we staff committees in terms of membership of members of Parliament? As you said yourself, the musical chair weakens the committee, by definition. There should be a balance between experience and training, because there is a continuous flow in Parliament. Should we not reconsider the way the chairs are elected and appointed by ``government leaders'' or leaders of the other parties? Should we not look at the way the committees function in terms of budget and capacity to hire support and so on? Should we not consider how the committees should structure their work, on which aspects they should concentrate their work and so on? I think there is a real benefit to study the way we have operated thus far in order to hold the government more accountable in the future on the basis of the help and support we receive from the PBO.
Mr. Dobell: I cannot disagree with anything you suggest. Indeed, if you would like to come and work for the Parliamentary Centre, we will give you an opportunity to express those views.
However, in effect, you digress from the principal questions about the decisions you need to take regarding this office. You could say it would be nice if these things were done, but I do not think you can put it into the legislation.
Senator Joyal: I am not saying that. If we satisfy ourselves that adopting this bill is good and, at the same time, we accept business as usual on Monday morning, I think we will have a nice statute on paper but we will not have changed the way Parliament holds the government to account.
Mr. Dobell: It certainly would be better if those things had happened, but I think you are taking on a whole lot.
Senator Joyal: Should we ask the Parliamentary Centre to restudy the operation of committees so that you can come forward with a recommendation?
Mr. Dobell: If you would like to hire us, we would be pleased to do so.
Senator Stratton: This is a point of clarification. Is that all right, Senator Day? This is from Treasury Board, on the question of contracting authority. The note is 79.54 on top of page 100:
... provides that the contracting power, section 95(5.1) is subject to sections 74 and 75(2) of the Parliament of Canada Act, which provides that the officers, clerks and servants of the Library of Parliament are subject to the direction and control of the Speaker of the Senate and the Speaker of the House of Commons, and the Parliamentary Librarian has the control and management of the library. Together, these provisions mean that —
Senator Milne: Page 100?
Senator Stratton: Page 100, at the top. I will get this off the hard copy as well.
Together, these provisions mean that the PBO's power to contract is subject to the control and management of the librarian, as well as the direction of the Speakers.
The Chairman: Mr. Dobell, do you wish to comment on that? If not, on behalf of our committee, once again, thank you very much for coming. We have all appreciated your insights, based upon your years of experience and knowledge in this area, and it will help us in our deliberations.
Mr. Dobell: I have enjoyed it. Thank you very much.
We are joined by Don Drummond, senior vice-president and senior economist with the TD Bank Financial Group. He worked with the Department of Finance for 23 years in various senior positions, including Assistant Deputy Minister of Fiscal Policy and Economic Analysis, Assistant Deputy Minister of Tax Policy and Legislation and, most recently, Associate Deputy Minister. He joined the TD Bank in June 2000.
We are also joined by Mike McCracken, Chair and Chief Executive Officer with Informetrica Limited. Informetrica is a privately owned Canadian company specializing in quantitative economic research. The company's products and services provide comprehensive coverage of Canadian economic prospects and public policy.
The committee welcomes you both to our hearings.
Don Drummond, Senior Vice-President and Chief Economist, TD Bank Financial Group, as an individual: I apologize that I did not come with any prepared remarks. My excuse is that I was not given much notice. I certainly did look at the legislation, and I have a couple of comments to start off with.
First, and most important, this legislation is a good idea. I have lived with some of the problems encountered by not having this facility for 23 years, and this legislation is the right kind of approach. It was always frustrating to see bills presented, either private members' bills from the opposition or bills from the government, without being costed out or with totally unrealistic expectations. Someone would say that something would cost $20 million, and it could cost hundreds of millions of dollars, yet the person promoting that bill did not have access to resources to know that information.
Some people see this legislation as an attack or a discomfort. When I was in the Department of Finance, I would have looked at it in the opposite way because I thought the existing situation put people in finance in an awkward position. I frequently assisted people with bills like that, but the help always seemed to be under the table, and a favour. You are compromising: Who are you accountable to, Parliament or the minister?
Therefore, I think this legislation is a good idea. It is a big step forward from the current structure in which there is a capacity within the House of Commons finance committee to have independent analysis of the forecasts, and the committee brought in outside contract people to help with that. History shows that the committee was reliant upon the people in the Department of Finance. That position is awkward because when you go before that committee, are you accountable to the Parliament and that committee, or are you accountable to the Minister of Finance? You are very much compromised in that position. That is the positive side.
I am not sure there is a negative side, but an interesting feature of the bill is that the legislation is vague as to what this officer is to do. If we take the proposed section 79.2(a), the role is to comment on the state of the nation's forecast. That is not necessarily a problem. If I was that officer, I would probably appreciate that vagueness because you could craft it in your image, but I am not sure what the drafters of the legislation and Parliament expect the person to do. Would they just comment on the Department of Finance forecast or would they do their own forecast? Would they do their forecast with an internal research capacity or would they contract people like Mr. McCracken to do the forecast for them?
If I had a notion of what kind of budget was to be provided I could probably answer those questions, because some you can do with a reasonable budget and some you cannot. I have heard some references, but again, it is not in the legislation. I do not know what kind of budgeting has any status. They could do a reasonable amount, but would certainly fall short of some possible expectations of what they will do. Again, they are to do research on economic and fiscal matters and on estimates, but there is no indication of what type of research. That is a wide-open field and I find that interesting.
The other issue I have is that it is very clear and it is written out precisely in the legislation that they be given appropriate access to the data; in other words, full access to the data, barring any confidentiality rules. I can speak from experience that doing this type of analysis involves more than just data. It is heavily dependent upon methodologies. As an example, the bulk of the budget measures or even the bulk of the private member's bills that come forward tend to involve aspects of the personal income tax system. The Department of Finance would traditionally cost those and traditionally develop the view of the economic impact by using a micro-simulation model, which is a sample of the personal income tax returns. I would be hard-pressed on the outside, and I think Mr. McCracken would be as well, to do those detailed costs without access to that type of tool. There was quite a controversy a number of years ago when Human Resources was denied access to that model, even using it for policy purposes. That is a question I had: Will this office be given access to that or will it be at the mercy of Department of Finance to run these methodologies for them?
My take, being in this business for a long time, is that when you have the data and the methodologies you can do things, and when you are dependent on someone else, you do not do things. Someone else is always busy and there is always a budget being prepared. While it is specified the deputy ministers of the respective departments are to give their utmost attention to these requests, which is in the legislation; it is not necessarily in the practice. You do need capacity for some of these in-house matters.
I hope there is realism about what this will address and what it will not address. This will not give a super-accurate budget forecast. It will help in that understanding. There is usually scorn when people say that, but the deficit is the difference between two large numbers. You change one a little bit, you change the deficit. This will not pinpoint it to the second.
There is a lot of information I do not think that this office will get and, in fact, it would seem that the budgets do not have. As an example, I would draw your attention to the 2006 budget. There is one entry in the 2006 budget for the entire total of program spending of almost $100 billion. There is not one single break-out. I do not know what this officer would do with that information. How would you forecast that? It is one-third of the determination of the ultimate budget balance. Look at that budget. There is no estimate for spending. It is in the Department of Defence, overseas development assistance, Aboriginals, health and welfare, government wages: nothing. It is all aggregated into one lump.
I know why it is not broken out in the budget, because they never did resolve off the various central agencies and departments as single numbers, so there are problems this office will confront. Maybe this office will help resolve some of those problems; that could be positive.
Second, it is not just about the data that is specified. There are the methodologies. If the office does not have the sufficient resources, or sufficient access to them, they will not get too far.
In summary, on the forecasts, they need the information, but they will need adequate resources to do a legitimate job of either commenting on finance forecasts or doing their own. I am not sure the proposed legislation appreciates the complexity of costing out the various proposed budget measures and again they would have to be given access to that.
Finally, in terms of realism about what this will solve, I went before the Public Accounts Committee eight times with the Minister of Finance on the estimates of the Department of Finance. Remember, the Department of Finance looks after interest on the public debt, and all the major transfers are almost half of the government spending. In eight annual appearances we did not receive one single question on the Department of Finance estimates. If there had been a parliamentary budget office, the members of Parliament might have been better informed. Maybe there would have been a question or two. However, I do not think so. I thought we were unique. Since I have been out of government, I have asked that question of many deputies and ministers. They, too, have had that experience: They never get any questions on their estimates. It is always something current: What will be in the budget?
Again, this might help but there are root problems that I do not think that this office will solve, and that is fine. You cannot solve everything. I hope there will be a degree of realism. I know your task is in the legislation. My only particular point in the proposed legislation, which is either a blessing or a problem, depending on your perspective, is the vagueness as to what this office is supposed to do for Parliament.
The Chairman: Did you ever appear before the Senate National Finance Committee when you were in the Department of Finance?
Mr. Drummond: Yes, I did appear many times, but it was always over specific issues. It was not over questions of the estimates. Similarly, we did not receive any general questions on the estimates. We had huge programs. We had interest on the public debt. We had all the major transfers, and they moved by great amounts year by year. I accompanied a number of ministers in that process and they were armed with big briefing books and had studied them. They said, ``Thanks a lot for making me spend all that time on them.''
There are other issues brewing there. The estimates are not scrutinized by Parliament. That is a blunt statement, but I will stand by it. I will return to the budget example. Parliament is asked to vote authority on that and all it is getting for the entire total of direct program spending is one lump sum. Parliament does not receive any details in any department. I really do not know Parliament can sign off and vote on that.
Mike McCracken, Chair and Chief Executive Officer, Informetrica Limited: It would be useful to recognize that this activity, or something very similar to it, has been going on in the United States for many years, particularly since 1974, in the form of the Congressional Budget Office, with many of its structures not unlike what you are putting forward. To give you a rough idea, last year they reported 230 employees and a budget of U.S. $35 million. They produced 95 papers, appeared before 30 committees, put out 600 federal cost estimates, and put out a thousand impacts on state and local governments and businesses more generally. This serves basically the Senate and the House in the U.S. If you are interested in further detail, including copies of all their studies, they are all available on www.cbo.gov. The notion of an open, transparent government in which ordinary people can also find out what is going on may be a virtue you would like to study more closely.
What will this parliamentary budget officer do? The proposed legislation started with a focus on the budget forecast, and that is tough enough, as Mr. Drummond has outlined. I see in there that it had added estimates-related research and analysis, so that the expenditure and tax measures specifically they can be asked to evaluate by any of the parliamentary committees, and, as well, the cost implications of bills that are proposals or private member's bills at an earlier state.
It is in some sense opening up. It will help Mr. Drummond's problem of this group not looking at the expenditure side because surely they will be as part of a review of the estimates as they are tabled. That may help them get a fix on where things are off, or not, as the case may be.
That brings us to the question of what concept we have of the resources available to this parliamentary budget office. Is it the salary of one junior person? It could be very cheap. It would probably not accomplish much, but it might be able to do something about one of the drivers of this whole area, which is the perceived bias in the Department of Finance forecasts over many years in their overall budget outlays.
If you want to be serious, you should be looking at a staff in the order of 50 to 150, consulting budgets, subscription services, a website to run it and a budget of about $15 million.
If you look at the operations of the parliamentary library, for example, you can see almost a doubling every year of the accesses to the website by citizens for information about what is going on in Parliament. I have no reason to think that will suddenly stop. In fact, I think this function will provide some real meat on the bones of what is currently provided. Make sure you provide adequate initial resources or encourage people to do so.
There has been a brief experiment over several quarters of an external panel for budget forecasts that was used by the House of Commons Standing Committee on Finance. The panel had multiple members, and it put out quarterly forecasts of the budget. It was an open and transparent process. There was debate amongst the people there.
One area of difficulty has been mentioned by Mr. Drummond, namely the need for full cooperation from the central agencies. People engaged in that exercise tell me they always had to walk that tightrope. However, it is worth keeping.
The United States Congressional Budget Office has an advisory council made up of about 20 top economists in the United States who meet twice a year to comment both on the budgets and the other elements, but also on more general principles involved in what they are doing. The advisory council also includes all the past heads of the Congressional Budget Office because the head of the office changes with the control of the House of Representatives and Senate. There is more turnover than perhaps is anticipated in the system proposed here.
What challenges or issues will this group face? Challenges will probably start with inadequate resources. The group will scramble to do something with very little.
There will be tension with central agencies. The Department of Finance has a long history of opposing anyone who criticizes their efforts, whether that be the Economic Council of Canada, which the department managed to kill in 1991-92; private sector agencies, who the department takes great umbrage with, or other agencies within government federally and provincially. There is no reason to believe that blissfulness will suddenly emerge in that area.
Then, of course, the parliamentary budget officer must do something. This individual will have to lay down a track record. After four or five years, someone will tote up the numbers and see if the officer is any better than the Department of Finance or a random draw of numbers between plus and minus 100.
That history will always be there. I think it would be wise for this parliamentary budget officer to provide a variety of services and not have the job dependent on whether the individual captures, as Mr. Drummond described it, the small difference between two large numbers. Indeed, the parliamentary budget officer might well focus attention on how we should report this number. There is nothing magic about a zero or a 10.6. It could equally be a plus or minus 10 billion around some number like 7.2 or something, which would be as helpful as what they are now putting out.
Mr. Drummond is worried about the access to microsimulation models. These types of models are particularly valuable for evaluating personal income tax and sales-tax-type changes.
Fortunately, in Canada, we do have a separate microsimulation model that is maintained by Statistics Canada on an ongoing basis. The department has just released model 14, implying they have been doing this for at least 14 years. Indeed, often there is a lag between those models.
It is a very good tool. It is a static microsimulation model, subject to some difficulties. Generally speaking, I have not run across situations where people counter that it is not as good as, or not as correct as, the Department of Finance model is. However, if you feel that the Department of Finance model should be the one that people have access to, there is certainly legislation for that.
I recently came back from a conference on the microsimulation applications around the world. Norway has a system where the microsimulation model, which has a lot of detailed and specific information about individuals, is kept at the statistical agency, but it runs or is made for the Department of Finance and for other agencies within the Norwegian government to evaluate their proposals. Norway has learned to walk and chew gum at the same time. The country can actually service someone in the public without running into these apparent conflicts that we have here.
I think there is room to satisfy more technical areas by looking at what people do elsewhere. We would be well served by examining the activities in Europe more so than in the U.S.
Spain, for example, has recently put a microsimulation model on the Web where an individual can evaluate particular tax proposals, et cetera, and see the results right then and there. It is a straightforward tool and one which people are using increasingly to understand what is going on in that country. There is no reason we could not do the same thing.
Let me stop at that point and leave it open for questions. I tried to put some numbers out. You might want to contrast them with the total budget for the Library of Parliament. One of the first costing exercises you can assign this parliamentary budget officer might be to cost out their own program.
The Chairman: Mr. Drummond, I was interested in your comment that there is a lot of information this new parliamentary budget officer will not get. From your years in the Department of Finance, you probably know that as a fact.
I am told that when the Minister of Finance and the Department of Finance prepare the budget, that it is a closed shop. The Treasury Board, which is responsible for preparing the Main Estimates, does not have access to a lot of the data that is available in that department.
Was that your experience when you were there? Is it still your experience? What do you think should be done so that this new parliamentary officer can have access to some of that information in a timely way?
Mr. Drummond: The Treasury Board certainly did not have access to the budget measures until shortly before the budget was finished, but the Main Estimates were based upon legislation. In a sense, the Treasury Board did not need it; that is not the problem. Treasury Board did not have access to the tax measures but, again, they did not need that.
The problem is a different one. I am going on a tangent, but I enjoy taking any opportunity to speak to it because it has kept me up more nights than anything else in my life.
When you go into a budget period, there is no single set of numbers that all central agencies and departments have agreed upon in spending, which is why in the 2006 budget you see only that total. There is no agreement on what the department funds for budgets.
This issue first came to a head during a program review in 1995, when we gave the departments not only what they were supposed to cut but what their new budget levels were. It became apparent there were four different sets of books on what the department spent. The PCO, Treasury Board, the Department of Finance and the department all had one, and they were all different. They could eventually be reconciled.
The Chairman: Through the Department of Finance?
Mr. Drummond: Through either the Department of Finance or the Treasury Board, but ultimately the Treasury Board did it in the Main Estimates. It took a long time, far too long for me.
I particularly remain scarred from this because there was a moment where the program review exercise almost collapsed, and it became apparent to everybody that we did that. That was 1995. We are sitting here in 2006 and it is still not resolved.
If this parliamentary budget officer was expected to be current with the budget process and to be able to comment on it by the time the budget arrived, this officer would not know what the departmental spending numbers were, and probably would not know until a fair bit after.
To my mind, there is always a flaw in the Main Estimates because the Main Estimates do not match the budget numbers. I understand that.
The Chairman: I was trying to make that point.
Mr. Drummond: The difference, of course, is that the Main Estimates does not reflect things that do not have parliamentary approval, whereas the budget does.
From my perspective, there is not even a careful exercise to lay out the differences between the two. That is one reason why the Main Estimates have such little profile.
There was a time where the lock-up in the Main Estimates drew almost as many media members as the budget. Now the lock-up is just an empty room, and the Main Estimates are kept in a closet somewhere because no one understands them or is interested in them. That may be why the Main Estimates receive so little parliamentary scrutiny.
The Chairman: Do you not think there is a lot that can be done between Treasury Board and the Department of Finance to cooperate a bit more?
Mr. Drummond: Absolutely. It remains on my record to my discredit that, having identified this problem in 1995, I left in 2000 and I did not solve the problem. There were all kinds of initiatives and it was always going to happen and this was going to be a budget that does it, so I will take that part on my record. It has been six years since I left and the first thing I notice in the budget because I try, as Mr. McCracken probably does, to do my own set of fiscal numbers. You are starting where various different commitments have been made to increase defence so I want to know what defence will go and I look in the budget and what is there? There is one total for the entire department's spending. That is $80 billion shown as one lump.
Personally I find that ridiculous. I really question when Parliament passes that budget, what are they passing? They are not passing an idea of what these individual departments are going to spend. It is basically just a blank cheque.
Senator Joyal: When I read clause 79.2(a), which gives the mandate to the PBO, it says that the mandate is to ``provide objective analysis to the Senate and the House of Commons about the state of the nation's finances, the estimates and the government and trends in the national economy.'' What surprises me, Mr. Drummond, is that the Auditor General, the Chief Electoral Officer and others give a yearly report to Parliament. In this proposed legislation we do not have a time frame in the mandate. In other words, it does not say specifically that on a yearly basis we will get those conclusions or the results of the objective analysis.
Mr. Drummond: I absolutely agree on the time period and I would broaden it out. I can take clause 79(2)(a), I am now the parliamentary budget officer and I could say that I agree that the budget estimates looks reasonable, I see no problem with the Treasury Board's estimates and the trends in the national economy are very favourable, we are at an all-time low unemployment rate and I am finished. I have satisfied the legislation. I did that all in one sentence and I could do that every week if you want in terms of your time period. It is vague not only in time but it is a completely open book. I could have that one sentence or, as Mr. McCracken said, the CBO produced 79 reports and does its own independent fiscal forecast. That, too, would be consistent with this proposed legislation. One sentence or the CBO model; they are both consistent with the same legislation. Therefore the question becomes who fills this out? Someone fills this out and will it be filled out by the Library of Parliament, will it be filled out jointly by the House of Commons and the Senate, or will it be filled out by the parliamentary budget officer? I do not know. That part is not specified out in the bill.
There will be a history and a protocol established over the period of the first five years of this term, but you cannot take this proposed legislation and envision exactly what this office will do. That is probably fairly unique with a piece of legislation. Again, it is not necessarily a problem if you are a parliamentary budget officer and not necessarily a problem if you are a member of Parliament, but I do find it passing odd how vague it is.
Senator Joyal: Do you have a suggestion on how we should frame the terms of reference so that we do not end up with the minimum, but with a reasonable expectation of the contribution this position will bring to Parliament?
Mr. Drummond: Mr. McCracken and I both spoke about its resourcing. I do not want to mix up whether the cart goes before the horse or the horse is going before the cart, but I do not want to give it a mandate that will be unrealistic given its budget.
If I put a budget constraint aside, I would a semi-annual report on all these aspects. I think that they should be able to have a complete capacity to do a fully independent set of fiscal forecasts, not just comment that I agree with the finance forecast or I do not agree with the finance forecast. I would like them to have the independent capacity to be able to do their own, as the Congressional Budget Office does.
In regard to the trends in the national economy, you have the Department of Finance. There is an entire excellent statistical agency in Statistics Canada. That one I would rewrite, actually. You do not need them to do an independent report on the trends in the national economy. We have that well covered and we have all kinds of private sector firms, both Mr. McCracken and I are doing that. It is the fiscal where there is a gap because no one else has the resources to do that. I would relate it to the trends in the national economy as they affect the fiscal. I do not need them to tell me what the unemployment rate is; the employment rate is going down or GDP is going up. We have all that covered. However, I would be much more specific on what we want, particularly in the estimates. What do we want them to analyze in the estimates? Are these things reasonably costed or are they poorly reflected in the priorities of the government? I do not know. Poorly reflected in the priorities of the government, strikes me more as a role for the Auditor General than for this office, but the proposed legislation leaves that in a state of confusion I think.
Senator Joyal: Could you take it upon yourself to look into that wording and come forward to us with what you consider on the basis of your experience to be a better way to be realistic about the job of PBO on the basis of what you think the position should be supporting and the terms of reference, so that the expectation is not everything and at the end of it so nothing that everybody will be frustrated from what we can expect from them?
Mr. Drummond: I would do a completely different term of reference if it had Mr. McCracken's $15 million or had the number I heard floating around. The amount of money I hear floating around is less than the entire budget of my small economics group. With a budget of that nature you could do some interesting things but you cannot do the things I just rhymed off right then. There is no point in setting an expectation that you can.
Senator Joyal: Yes, but on the other hand, as you said, it is so open-ended that any one of us around this table can expect that it will do the job but in fact it will not do the job. Therefore should we not be focusing more on what you think should be helpful for Parliament to do its job of keeping the government to account?
Mr. Drummond: Sure, as long as there is an understanding the flow becomes you set out that mandate and then you fund it in an adequate fashion.
The Chairman: I would like to hear Mr. McCracken's views on the same point about the wording.
Mr. McCracken: It is not surprising that in the legislation you do not have the specifics. It seems to me that until you know the resource level you cannot know for sure what is going on. You all have added material which will change that resource requirement as well. However, if I ask a staff member to give me a report on X tomorrow, or in one month or in six months, I will get a different product. The key would be to conceive of how can the Senate or the House committees specify when they want that material. It is important for you to get the material when it is relevant to your deliberations. It is no good to have it six months after the fact.
On the other hand, by signalling them, would you give us by one month or one week from today your best estimate on this, that that comes conditional on resources that can be applied over that period? You could make it like a regulation or a stipulation that comes in the request for the parliamentary budget officer to carry on a piece of work on which you set the time parameter. For the budget you might specifically say I want it in 60 days or in 90 days from the tabling of the budget. In other words, an interval that provides sufficient time to do a decent job but not so long that it is a non-issue in terms of when it comes up.
That would be a way of framing it that perhaps could satisfy both. Then if you give it lots of resources you can be more demanding.
The Chairman: In terms of the language of the mandate, which was really the question coming from Senator Joyal, which was answered by Mr. Drummond, what do you say about the language?
Mr. McCracken: I would say in a timely fashion, and then what defines timely will be the request from the parliamentary committee or others. That is at least an idea for you to consider. You are trying to write something that will last 30, 40 or 50 years, right?
The Chairman: Yes, but in terms of the mandate, trends in the national economy, and so on.
Mr. McCracken: I would leave that, quite frankly. While Mr. Drummond does not think that matters and that the finance department is the best in the world in that regard, it is important to know what are the underlying assumptions behind a given forecast.
The CBO's forecast of the national economy is based on all current policies continuing. That is their setting. They put them out knowing they are unrealistic, but if it has not been approved in the legislation, it is not in the base case or the item off of which they will do it. They will therefore put out fairly large forecasts of budget deficits in the future, knowing full well that someone will have to take action sometime. They nevertheless do it that way as a starting point and then cost the impact off of that budget for different policies that they might do.
To some degree they have also begun talking about the problem: Does the budget itself affect the path of the economy, which is what we used to expect the Department of Finance to do, to try to affect the way the economy worked in a positive way. That tends not to be, I am told, a part of the current catechism at the Department of Finance. They take it on the basis of no feedback from whatever their budget measures are.
It would be preferable to have them do that broader part. They will have to spend their resources wisely.
Mr. Drummond: For clarity, Mr. McCracken started disagreeing with me, but I think he said the same thing as I did, just so we understand that. My point is that we do not need or even want this parliamentary budget officer to be commenting on trends in the national economy for the sake of commenting on trends in the national economy. It is trends in the national economy as they affect the fiscal situation. I would agree with Mr. McCracken and add the feedback of the fiscal situation from the national country.
I do not want to replicate what Statistics Canada does in reporting the trends of the national economy because the people there do a fine job and they have the resources to do that type of reporting. I do not expect to see a separate report from this parliamentary budget officer saying, this is what the economy has done, except for this is what the economy has done in terms of its relevance for the fiscal situation.
Mr. McCracken: Just so that you do not think we are of the same mind, Statistics Canada does not produce forecasts of the economy; it keeps track of the history of the economy. Statistics Canada is not an independent source of forecasts.
The other general comment is that there are elements of the forecast, the assumptions underlying the budgets, which are not spelled out. What they are will affect what might well happen to the kind of economy that you have.
A parliamentary budget officer can say, for example, by the way, my unemployment rate in this world looks like X. That would be a breakthrough. We have not even seen mention of the word ``unemployment'' in the federal budget during Mr. Drummond's period there, and certainly no forecast of where it is going. The exchange rate is another total vacuum. Both of those have a substantial effect on specific government programs, corporate profits tax, unemployment insurance benefits and unemployment insurance contributions.
I am quite prepared to say these trends affect the responsibilities of the office in terms of costing and in terms of the budget impacts, but that is almost everything. It is just a question of the order in which you tick them off in terms of their relevance or their importance to the economy.
Senator Joyal: To summarize, you would qualify the trends in the national economy as they affect the fiscal situation of the country. You would add that to the proposed legislation.
Mr. Drummond: I would go even further, because I think we uncovered in our exchange another ambiguity. Trends could mean a comment on the historical trends or the outlook. You would want to be clear; you do not want the person to comment on the past. More particularly, you want them to comment on the future rather than the past because, again, the past is adequately covered at the moment.
Senator Joyal: Would you keep the fact that there should be a time frame to get those conclusions that provide, on a semi-annual basis, an objective analysis?
Mr. Drummond: Yes. I have not thought about this; I am winging it at this point. You might want to be precise about when in the semi-annual time frame. It strikes me that you would not want it too far out. You want to connect it to the budget cycle.
Senator Joyal: As you said, when the data would be made available, it will be useful for Parliament so that there is not a discrepancy of two or three months, which can make a difference on the accuracy of the conclusions.
Mr. McCracken: It cannot start before the budget is tabled. That is what you are trying to determine as the statement there. The question is: What is a reasonable response time to expect a group of people to be able to come up with something which, on the one hand is cogent, and on the other hand is timely?
I do not know why I say it, but to me 60 days would be a good test. If they deliver on that consistently, you can tighten up the screws to 30 or 45 days. It is not like we know when that budget will be. There is a notional time of sometime in March or April, but we have a few instances where they are at other periods, and we have had economic statements which were really budgets and vice versa.
Mr. Drummond: I think the key report is not the one after the budget. The key report is the one that comes in the fall. It is the fiscal outlook in the fall that sets the framework for the budget. The decisions are already made by the budget, but it is in that October, November, December period when all the decisions are being made.
The Chairman: That is what Mr. Dobell told us this morning.
Mr. Drummond: That is right. Do I have resources, do I have to cut spending or raise taxes on balance? Do I have $10 billion that I can play around with here? That is when you need to know it. I would think somewhere at a reasonably close proximity to the government's fall update would be one of the semi-annual reports, and the second could be ex post to the budget. I would be more interested in the pre-budget one than in the post-budget one.
Senator Joyal: In other words, there is room there to qualify the time within the fiscal year whereby the conclusion of the objective analysis should be made available to parliamentarians.
Mr. Drummond: Yes. I think we have made the language a little more precise in our give and take here in terms of what they would do in those three instances. We have added a time dimension to it, and what is still to be debated for you is what does it mean to analyze the state of the nation's finances? Is it just a comment on what finance is doing or is it to have your own independent capacity to create another view? We then come back to the resourcing issue.
Senator Day: In the section we are looking at here, section 79, pages 97-98 of Bill C-2, you can see most of the mandate of this new parliamentary budget officer. We were just talking about the very first paragraph, but most of the mandate is to provide support to the standing committees of both Houses. Down at the bottom we have discussed clauses (d) and (e) for individual parliamentarians providing support. It is a team of experts standing by; much like the parliamentary library does now in helping us with research and that kind of thing.
I see the paragraph you have been talking about at page 97 and I see that as being kind of a different mandate and one that is not there just to serve committees and Parliament but to start acting more like the Congressional Budget Office in the U.S. Our equivalent in Canada would be the Auditor General who makes her own decisions where she will go, what she will look at, and comes out with reports that are timely but not directed by parliamentarians. She goes ahead and does these on her own. Is that what you see happening as you read section 79.2(a)?
Mr. Drummond: I see that proposed subsection (a) is very different from (b), (c), (d) and (e), on which I did not comment much because I understand them and they are fairly straightforward. The distinction is not that the Congressional Budget Office does only 79.2(a) because it also does 79.2(b), (c), (d) and (e). They cost many kinds of proposals so that is one of their regular clauses. Those are straightforward and the language is fairly obvious. If a bill comes before the House, the parliamentary budget office would submit a costing. If a member of the government, the opposition or the Senate were contemplating something but had not yet got to the point of the bill, they could request the PBO to assist them in the costing. Those are entirely appropriate activities and it is my view that you do not need any further specification as to what is implied under that. Proposed section 79.2(a) is so open-ended. I agree that they are completely different. The other ones are driven by requests whereas (a) is more routine and regular, although there is no time dimension. It might be or might not be regular but I would envision it as more regular.
Senator Day: Parliamentarians have been looking for support for committees in their work of studying estimates and reports in the fall on performance, et cetera. We have been receiving some support from the Library of Parliament but there is suggestion that perhaps it could be better. That has driven this proposal. Has proposed section 79.2(a) not gone further than what we are looking for? Perhaps it will create something that we might not need or want in Canada.
Mr. McCracken: If I recall the way in which this evolved, we started with (a) and then (b), (c) and (e) were tacked on by parliamentarians understandably looking for more research. It would be a complete reversal to drop (a), if you were going down that road, although I have no objection to (b) and (e). The problem with (a) is the limitation, the timing and the framework. It is my understanding that it helps the Congressional Budget Office to respond to a bill that has some limits on the aggregate spending. The CBO's job is to report whether departments are tracking with those restrictions and within the Gramm-Rudman-Hollings Act.
We are looking at the mechanism but without necessarily having the legislation that would guide the laying out of the process. It strikes me that this is not a bad way and it could be that you do this once or twice a year in a general way. Probably the trickiest word in (a) is ``objective,'' because it will be tough enough to obtain a decent analysis much less a decent objective analysis. How do you do that? One way is by having a balance of people participating in some synthesis of those views, but it is tricky. If we add the words ``national and provincial economies,'' that could tie up their time frames even more. It is more important in Canada than it is in the United States in terms of the relative importance of the provinces. I would stay with (a).
Senator Stratton: There is a reason for section 79.2(a) and we must find out from the people that put it in. We may not agree with them, but at least we will know why it is in the proposed legislation.
Senator Milne: Senator Stratton, I would suggest that we bring in statements from the Department of Finance, or whatever. We need them before us so that we can deal with them directly.
Senator Stratton: I just sent an e-mail to say that we need to have Treasury Board officials before the committee.
Senator Milne: That would be better.
Senator Stratton: We need them to respond to these questions.
The Chairman: The Steering Committee has plans to bring back the President of Treasury Board and senior officials, and the Minister of Justice and senior officials.
Mr. Drummond: If we want to know the rationale that led to 79.2(a), it is in the budget and in every reference that the Prime Minister has made to it. The budget does not specifically address (b) to (e). This is a government attempt to improve the credibility/transparency of the budget. For that, you absolutely need 72.2(a) in its generic form. There is no mystery in my mind why it is there. It is simply a question of whether it is workable given that it is so vague.
Senator Milne: Both of the witnesses have been talking about proposed section 79.2(a). Mr. McCracken, you are right in saying that objective analysis will not be from one source only because then it would be subjective. The analysis must come from at least two different sources, so that doubles the costs for analysis. Mr. McCracken, you are also right in saying that the Department of Finance has a long history of resisting any intrusion onto its turf. It was almost 10 years ago that each government department was mandated to do gender-based analysis and the Department of Finance is still not doing it on budgetary matters. Certainly, the department has a long history of that.
Mr. Drummond and Mr. McCracken, both of you have concentrated your comments on amendment 79.2(a) to the Parliament of Canada Act and said that it is open-ended and that parameters need to be built around it. The Library of Parliament was more concerned about amendment 79.2(d), the financial cost of any proposal that is so wide, so broad and so encompassing that they could not even begin to estimate how much it would cost.
Mr. McCracken, you talked about a staff of 50-150 and a budget of up to $15 million. When you have any proposal, not just for bills or private members' bills but any proposal, it becomes very broad. I would like to know your estimate of that cost.
Mr. McCracken: My rough estimates, which took me a few hours to put together, show that you can produce a cost for a proposal quickly, although the issue becomes the quality of the estimate and whether it is reproducible. The main thing that you try to do is to build a model of where your costs originate. You make that open and let other people examine the step-by-step procedure that you use. In that way objections can be voiced. That is about all you can hope to do. The way of controlling the budget will be in the time that is provided for the action, whether it is within one week or within one month, and the kind of stipulation on costing that will keep them from going crazy. It will work only if they have adequate resources because these will be random events when people come up with ideas.
I am heartened by the fact that for about 40 years, I believe, in the Netherlands, the Economic Policy Institute has been providing this service to all parties in the government on an ongoing basis for very little money. It is done within a set of rules such that when a proposal is put forward it is available to anyone. That controls some of the sillier ideas. It is necessary, in their view with a perpetual minority government, to have a much stronger tendency to try to beef up the research capacities of their committees and parties. I am not forecasting to that extent but, certainly, it is part and parcel of how the entity will function.
For example, if you have proportional representation, you will likely end up with a collection of parties and coalitions. You need to find the proper institutions to parallel that development to provide the necessary information for decision-makers to use. Many European countries have done this for some time and the principles are clear in terms of what they do. They try to make an open transparent process, and to have a team of good expert people deliver it. As a general rule, I think parliamentarians are happy with the service they get. I think that is all you look for here, at least initially.
Senator Milne: I want to ask Mr. Drummond exactly the same question: Would you put any parameters around ``any proposal?''
Mr. Drummond: No: I think it would be the height of irresponsibility for Parliament to consider a bill when it does not know the cost. I think that has to be there.
Senator Milne: This is not a bill. This is a proposal.
Mr. Drummond: No, proposed section 79.2(d) reads, ``the financial cost of proposals contained in any Bill.'' So we are talking about parameters.
Senator Milne: That is section 79.2(d); I am looking at section 79.2(e).
Mr. Drummond: I think a queue could form if there were an awful lot of those but I think you have that service from the parliamentary library right now; this legislation expands that service.
I am sorry. You referred to section 79.2(d). My only change to section 79.2(d) is that I would take out the words ``when requested to do so by a member of either House.'' I think there should be a spot on the private member's bills where it is incumbent on the parliamentary budget officer to give the cost regardless of whether it is requested or not. I would not fuss with that because I am sure someone would always request it. I do not know why that part is triggered by a request.
I fully support section 79.2(e); I think that service should be available to Parliament. These ideas, I think, can go quite far and come to sad conclusions when someone gets an idea you can do something with a small amount of money and the reality is, it costs an awful lot more than that. I think the ideas need to be informed by those parameters.
The Chairman: When it says ``any proposal,'' does that not open the floodgates? I am talking about section 79.2(e).
Mr. Drummond: Yes, it does. That is why I think it will come back to the resources that are required. The answer may be: It might take a while to get to it. I have difficulty with the concept that says a member of Parliament cannot go to the parliamentary library.
The Chairman: We do it now.
Mr. Drummond: That is why I have not fussed with it. It is not another department. It is part of the library. You are expanding the capacity of the parliamentary library to assist you on those matters. I do not view section 79.2(e) as anything new and different from what you have.
The Chairman: People who sit at this table from the Library of Parliament provide wonderful research support to this committee on this bill.
Mr. Drummond: Probably today if you asked them what the cost will be to limiting the pension income credit or something, just to pick anything, they would probably say: I do not know how to approach that. Section 79.2(e) says you have to add, in the Library of Parliament, a capacity to do that, because otherwise someone will advance a proposal saying, ``Let us do this,'' thinking it will cost $10 million and maybe the reality is different from that.
Senator Day: In fairness to the Library of Parliament, they say they can do it now and that function will be moved over to this newly created office. They can do it and they are doing it, but not to the same extent. Mr. Young thinks there will be a flood of requests coming in, but they try, now, to answer all the requests.
Mr. McCracken: It may well be that this officer, reporting to the librarian, may decide that certain requests like the initial costing of proposals continue to be done by the group that is currently doing it.
The Chairman: They would have to supplement it probably.
Mr. McCracken: The office might generate common tools that could be used and could migrate forward as those proposals become bills. I think the level of sophistication that you might require on your costing would go through. When your department gets a hand on the bill, the costing would need to have the ability to add rows and columns to provide for additional things. No doubt you would take some things out too. It must be a flexible environment in terms of any kind of a costing model, but there is no reason that costing could not go right along with the bill and be part of the processing of it in the same way that you send a word processing file along as you go through this process.
Senator Day: Bottom of page 99, proposed section 79.5(3):
The Parliamentary Budget Officer may authorize a person employed in the Library of Parliament to assist him or her....
I think that contemplates what you talked about: moving people over to act on behalf of this budget officer.
Senator Joyal: My question is in relation to section 79.3(1). My question would be to Mr. Drummond. On the basis of your past experience with the finance department, if you were the person to occupy that position tomorrow, what would be your biggest challenge in performing your duty? I put budgetary consideration aside in assuming you have the budgetary capacity to perform your duty. What would be your major preoccupation in terms of dealing with the administration?
Mr. Drummond: First off, I apologize because I cannot answer that irrespective of the budget, because the first thing I would do is to try to make myself as independent of the government as I could. I did not mean to say ``independent:'' I am obviously a body of Parliament. I do not want to be totally dependent and beholden to the various departments for information. I want to insulate the office as much as I can from that. My number one problem is that I will ask for the information and will get it a year later. That would be my worry. That is why I came back to it.
That has been my experience in life, and I bet Mr. McCracken would back me up on that because his group has all the data and they built all the methodologies. Even if they could have borrowed them from someone else, they still built them. Why do they do that: Because you do not want to go cap in hand to someone else and be dependent upon their time schedule. My worry would be that I need something in October 2007 and I get the answer: We are busy doing a budget and we will get back to you. Then they do not get back to me.
That is why my first thing, which unfortunately comes back to budgeting, would be to create my own methodologies. A decision was made about ten years ago in the Department of the Environment that they were not going to build models and methodologies to evaluate the impact of environmental policies. Natural Resources Canada did and who ended up controlling the file and looking at the policies? Environment Canada had to go begging to Natural Resources Canada every time it needed something to be done. You cannot be dependent on someone for all of that.
That would be my number one worry. It is in the legislation and I know the deputy minister has to comply on a timely basis but reality might be a little different than that.
Senator Joyal: It does not say ``timely.'' I raise that question with you in section 79.3, because I wonder if the wording of section 79.3 should not be amended to include ``timely and free access.'' One way for the department to refuse you the figures would be to say that the cost is too high and the budget is not available this year to provide you with the information you request.
I wonder, on the basis of your experience with public administration, if the language of section 79.3 should not be tightened a little to give the means to perform the duty that is expected of the budget officer.
Mr. Drummond: There is a time dimension and I read it as a ``timely basis.'' It does not actually say that. We probably need some legal expertise. What does it mean? If you skip out the large parts it says that ``the Parliamentary Budget Officer is entitled... to access at all convenient times to any financial or economic....''
I interpret that to mean the convenience of the parliamentary budget office, not the convenience of the deputy minister. That is why I interpret it as a timely basis, although I might be wrong in both my legal and grammatical interpretation. If I am, there is a big problem. If that is at the convenience of the deputy minister, then woes betide this parliamentary budget officer, but I do not think that is the way it is written. I think it is at the convenience of the parliamentary budget office.
Senator Joyal: I have a different interpretation.
Mr. Drummond: Then there is a problem. ``Sorry, it is not convenient right now. Come back later.''
Senator Joyal: Exactly. It is the same argument that you use yourself. ``We are busy preparing the budget now, so come back two weeks from now. We are going to finish our parliamentary study.'' That leaves the convenient time in the hands of the person that is requested to provide the information. It is not timely for you.
Mr. Drummond: I think the very fact that we have identified an ambiguity around ``convenient times'' means we have identified a real problem.
Senator Joyal: That is why I raised the issue on the basis of your experience. We are trying to give that position the capacity to perform the objective analysis that should be coming out of that office. Some of us have experience with Public Accounts committee in the past and so on, so we are trying to give the position the capacity to have the statutory possibility to fill the mandate that is contemplated in Bill C-2. That is what we are trying to get from you.
Mr. Drummond: My experience, I regret to say, is that such requests were not handled very speedily, for either the reason that Mr. McCracken advanced, that the people in the Department of Finance are generally not nice people, as a possible explanation, or that they are very busy. Take your pick.
Senator Joyal: In other words, you suggest that we should add that aspect to section 79.3.
Mr. Drummond: Absolutely. I think it has to say something like ``in a timely fashion.'' That is still vague, but at least it is a hook. If it does not come in a timely fashion, the parliamentary budget officer could come back on it.
Senator Day: Mr. Drummond and Mr. McCracken have commented on the primary purpose for this aspect of this proposed legislation. The part I like is supporting committees. I do not thing the other part was necessary, and I want to be convinced.
According to proposed section 79.2, this new parliamentary budget officer will have to do various things that we have talked about, study trends and national economy, et cetera. Is this part of the proposed legislation reflective of a basic mistrust in the work that is being done by the Department of Finance? The Department of Finance can do all of these things, but has someone not been happy with the estimates of budget surpluses and that kind of thing and is then saying we want someone to second guess them? Is that what this is all about?
Mr. Drummond: I think that is exactly what it is about. There have been certain inaccuracies in budget forecasts. They have all tended to be in one direction recently. There is a variety of reasons for that. It is not just because the Department of Finance people cannot forecast. It starts with, ``Thou shall never have even one cent of deficit,'' and when you are operating like that, obviously you skew everything to come to a surplus, and that is the result.
Mr. Drummond: I think Mr. McCracken is absolutely right in terms of the chronology of it, and (b) to (e) were added afterwards. The main purpose of this from the government's perspective is all around (a), and I think this is trying to achieve one or other of the following: The parliamentary budget officer will say, with some credibility, ``The budget estimates look fine to me and they are unbiased, and hence the credibility and transparency of the budget will be improved, or they will say, ``No, they do not look credible,'' and you will end up with either improvements in the process or a better set of numbers with which to work. I suspect the government, and no doubt the Department of Finance, is hoping for the former rather than the latter, but in either case, it does address the objective of improving the credibility and transparency of the budget. If you go back to the original wording of the budget, that is what it is all about.
Senator Day: Surely access to information could solve that problem. If access to information allowed us to check the work being done by the Department of Finance, we would not need to set up an entire department and do our own fiscal modelling. It has already been done. All we want to do is go in and see what information they have.
Mr. Drummond: But who would do it? Who would sort out the information? This is one of the flaws of the current arrangement. They have hired various different private sector firms on contract to help do the forecast. There is no body coordinating and making sure that is an ongoing exercise. You need a body to coordinate all that. The Department of Finance could dump on you 100,000 pages of material, and what would you do with it? Senators do not have the time to go through that, and, as we have demonstrated, you do not have the staff, either individually or through the parliamentary library, to do that. That is what this is all about.
Senator Day: You do not think the Department of Finance is generating real, honest to goodness numbers?
Mr. Drummond: I do not think that is the issue. That is not the issue that was presented politically. There is a knock on the credibility of the budget estimates, and I think that is undeniable. You can sit here and defend them or attack them, whichever way you want, but the credibility is not all that high. This is all about increasing that credibility. You need some form of (a) to address that. The provisions in (b) to (e) will help in an indirect fashion, but it is indirect.
Senator Day: I have no difficulty with (b) to (e). I just do not know why we cannot get the information for (a) from the Department of Finance.
Mr. Drummond: You probably can, but I am not sure what you would do with it once you got it.
Senator Day: Are you suggesting that they are influenced by their minister such that they will not give the proper information to the public and to parliamentarians?
Mr. Drummond: No. I think that, within the parameters of their operation, they do the best estimates they can, but different groups have different estimates. My estimate of the budget balances is different from theirs; Mr. McCracken's are different from mine and from the Department of Finance, and who is to sort out who is the most reliable? This is another voice. It might not even be a better voice. As Mr. McCracken was saying, you build up a track record. If the person has done five consecutive terrible forecasts, the credibility of that office will be in tatters as well.
The Chairman: Gentlemen, before you came today, we heard a witness say that once this new office gets up and running, it can assist parliamentary committees such as Senator Day's committee, the National Finance Committee, which looks at estimates and so on, by analyzing the performance reports of various departments that now, for the most part, are not analyzed by any committee. This new budget officer could give a lot of advice and assistance and help parliamentarians look into something that should be done. I would love to hear both of your comments. Is that realistic?
Mr. Drummond: First, it comes back to resourcing. This is already a pretty full slate here between 79.2(a) to (e), and it will probably require more resources than I think the government is contemplating, and to add on something further will just lead to failure. Second, your purpose is not to construct another Auditor General capacity. The Auditor General should look back; this office should look forward. There should be a very tight distinction between those two things. A fair number of comments have been that this parliamentary budget office should be associated with the Auditor General, and I could not disagree with that more. That is totally blurring that look back, and it compromises the integrity of the Auditor General's office. Similarly, I do not think that this office should be spending time with its limited resources on looking back. That is a function better for the auditor and the auditors of the individual departments.
Mr. McCracken: Depending on the technique used for evaluating these expenditures, there is a good chance that they in fact will have to look back to find out what the relationships between, for example, the OAS program and the number of elderly and the outlays that are being made on their behalf. You would want to build that on a historical record and then use that to forecast into the future, and then monitor what the actual outlays are against your anticipated forecast.
Mr. Drummond's distinction is a useful. This group can be emphasizing forward-looking aspects of what is done. Indeed, in the CBO legislation, they are charged with producing, on a regular basis, a ten-year forecast. If you recall, it has always been difficult for the Department of Finance to put out a forecast with any known length. It will depend on their mood on that particular budget, but it is typically one, two or five years at most.
However, with this provision that these are our 10-year forecasts based on current policies continued — which is kind of a strange animal and something perhaps of interest to some but not all — in that same context, that gives you the milieu in which you can say, this is based on a specific population forecast; this is the number of older people; and this is the implied Old Age Security program that is there. If those numbers are out, the department can come back and say, We disagree; we will do better in getting people to take up OAS, and not misdirect them in terms of what they can achieve in that area.
It is possible that this process helps improve not only the numbers over time, but perhaps even the performance. That is what really it is all about. That is what we want at the end of the day, namely, a better functioning, more open sense of what all these numbers are about. If the process removes bias, which may or may not be there in the Department of Finance exercise, such that there is no difference between what this group says and what the Department of Finance says in future budgets, great. However, it will not happen without that threat to the department of someone continuing to say, this is not right. Publicity has been there for some time and the threat alone has not cured their ways.
I suggest there is plenty of room for more people to look at it. If you want to go further, you can always say, let us put the Economic Council of Canada back in place and give section 79.2(a) to them. That would involve another piece of legislation. That was Bill C-75.
Mr. Drummond: The comment about the time period going forward reminds me that while I said there was an ambiguity in section 79.2(a) about what the trends in the national economy mean — is that backward or forward looking? — I should have made the same comment about providing analysis about the state of the nation's finances. That could be, in fiscal year 2005-06 we had a surplus of X dollars, and then sit down; it could be an outlook that matched the time period of the budget; or it could be a 10-year outlook, as Mr. McCracken referred to. It is totally open-ended.
That whole section 79.2(a) could be entirely backward looking, which is what we do not want because we do have an annual statement that is signed off by the Auditor General. We are already covered on that basis. However, there is no reference anywhere in that paragraph to forward looking.
Senator Joyal: Section 79.1(3) states:
The Governor in Council may select the Parliamentary Budget Officer from a list of three names submitted in confidence, through the Leader of the Government in the House of Commons, by a committee formed and chaired by the Parliamentary Librarian.
If you were to give advice to the Parliamentary Librarian, who would you put on that committee to select the PBO?
On the basis of your experience, I ask you a similar question, namely, what is the first obstacle that person would face on the basis of selection? I am now before the mandate. How would you proceed to form a committee to select that person?
Mr. Drummond: It would follow naturally, in the best traditions of Canada, to have someone from every region, an equal balance of men and women and an equal balance of anglophones and francophones. Once you have done that, you are done.
Mr. McCracken: But you have to do that with two people. Certainly, two Speakers is logical. I was surprised, in fact, that provision was not there, rather than two eminent persons. I would have thought you could do it in that fashion.
Mr. Drummond: Follow the model used in the Canada Pension Plan Investment Board. It worked really well.
The Chairman: On behalf of the committee, I want to thank you very much. You have been stimulating, challenging and informative. It will help us in our ongoing deliberations on Bill C-2.
The committee adjourned.