The PBO found numerous discrepancies in the government’s spending estimates and found itself in the spotlight as a result. The Harper government undermined Kevin Page’s work to hold the government accountable, cut the PBO’s funding, tried to limit Page’s mandate as well as his reporting to Parliament and the Canadian public, and failed to fully cooperate with his investigations.

In the 1980s, the Mulroney government presided over a period of exponential growth in the federal debt and deficit but consistently underestimated the extent of the problem in Finance Department forecasts. The mistrust of government forecasts continued under the Chrétien and Martin Liberals, albeit from the opposite perspective – a series of so-called “surprise surpluses” were announced as the government implemented deficit reduction measures.

In this context, and with the Sponsorship Scandal highlighting the need for “truth in budgeting” in its 2006 election platform, the Conservatives called for an “independent Parliamentary Budget Authority.” The position of Parliamentary Budget Officer was created by legislation in 2006 and, oddly, was placed under the authority of the Parliamentary Library. The lack of alignment and mission fit between the Library and the PBO would have serious consequences.

The PBO position was not actually filled until March 2008. The appointee was Kevin Page, an economist with almost three decades of experience in the federal public service, notably with Finance Canada, the Treasury Board Secretariat and the Privy Council Office.

As Parliamentary Budget Officer, Page was mandated to provide independent analysis to Parliament on the state of Canada’s finances, the government's financial estimates, and trends in the Canadian economy. If requested by a Parliamentary committee or member of Parliament, the PBO is also responsible to estimate the financial cost of any proposal for matters over which Parliament has jurisdiction.

Page caused consternation within the government from the outset.

In October 2008, in one of the PBO’s first major reports, Page issued an analysis of the cost of Canada’s military mission in Afghanistan. The Harper government had affirmed that the Afghan mission’s costs to date were less than $8 billion, but the PBO suggested that they could total $18.1 billion, or $1,500 per Canadian household by 2011. That report prompted Commons Speaker Peter Milliken and Senate Speaker Noel Kinsella to complain to Parliamentary Librarian (PL) William Young that Page was overstepping his mandate.

One month later, the PBO criticized the government for how financial records were being kept. Page told MPs that Canada's deficit could rise to as high as $13 billion in the coming year, due largely to Conservative cuts to the GST and increased spending.

Budget cuts and mandate challenges

At the end of 2008, just nine months after taking his office, Page learned that his budget was going to be cut by one-third (from $2.7 million to $1.8 million) and freezing it at that level. The PBO has estimated it needs about $5 million a year to properly analyze Canada’s budgets and economic forecasts, and provide advice to Parliament.

Also, the government, the Parliamentary Librarian, and the Commons and Senate Speakers argued that the PBO should have a more limited mandate to monitor government spending. The PL asserted that the PBO is accountable to his office and not to Parliament; that the PBO is not independent; that there should be a further reduction in the scope of the PBO; and that the PBO was a position that could be equated to that of other executives in the Library.

In response, Kevin Page sought a legal opinion from the firm McCarthy Tétrault regarding the legislative mandate of his Office. This external legal opinion determined that, in fact, the role of the PBO had been “systematically undermined” by the Library of Parliament. This undermining, from the vantage point of Kevin Page, took the form of: reducing the PBO’s budget by 33 per cent; delaying adequate staffing; hampering timely reporting to Parliament and the public; and impeding contracts for specialised services.

In another setback for the government’s position, the Canadian Parliamentary Review concluded that “placing the PBO within the Library of Parliament rather than providing the post with its own office, resources and legislative mandate was doomed to failure.” Page noted that the Parliamentary Librarian had gone so far as to find that the PBO “is not to provide analysis and opinion to parliamentarians such that could be seen to challenge the government of the day.”

These two issues -- (a) the stability of the PBO’s own funding and the implications of this funding on the office’s independence, and (b) conflicting interpretations of the PBO’s mandate – would continue to cloud Page’s work.

The smaller PBO keeps hammering away

Despite these impediments, the PBO led a small team of economists and researchers who, in their first three years, produced seven economic and fiscal updates and 50 other reports and briefing notes. Numerous experts found Page’s work accurate and pertinent.

Analysis of the PBO in the Canadian Parliamentary Review suggested that Page’s “record of success” in producing consistently highly competent studies gave him some degree of protection from political pressures. The Review noted that the role of the PBO “has the potential to threaten some of the most important vested interests and departments of the federal government, namely Finance, Treasury Board and the Privy Council.”

In July 2009, 129 economists, including seven current Canada Research chairs, openly called  for more political support for the PBO because of its success in “elevating democratic debate in Canada.” A former senior bureaucrat praised the PBO for his “superior forecasting ability.” By contrast, a recent review of PBO fiscal forecasts by the Globe and Mail claims that government estimates are more accurate.

In a study in January 2010, Page reported on the deterioration of the financial situation in Canada, asserting that Canada has a “structural deficit” and will not meet its 2015 target for erasing the deficit. Such projections again put Page at odds with the Minister of Finance’s projections and with comments made by the Prime Minister during the same period.

In response, the Prime Minister’s Office produced an outraged internal memo criticizing Page, according to the Globe and Mail. Conservative MP Royal Galipeau (Ottawa-Orleans, Ont.) interpreted the PBO studies as being “political decisions" and that the office has “been politicized” at the expense of the Conservatives, reported The Hill Times.

In 2009, the government offered to restore the PBO’s budget to $2.8-million per year - the amount orginally planned, but on the condition that Page would no longer report on “the state of the nation's finances and trends in the national economy” directly to the House of Commons and the public. Page refused.

A new government strategy: non-cooperation

Finally, in March 2010, the government restored the PBO’s annual budget to the original planned level of $2.8-million that Page had been promised, without requiring him to stop reporting his findings to Parliament and the public.

Since having the budget restored, the PBO has continued to challenge government financial estimates, but has faced increasing non-cooperation. In January 2011, the PBO noted that it had been running into stiff resistance in its quest for details on the government’s five-year plan of internal budget freezes.

Also in early 2011, the PBO found itself in the midst of the debate over whether the Harper government was in contempt of Parliament for refusing to provide the House of Commons with detailed information on the cost of it proposed justice legislation, the estimated costs of the F-35 aircraft, and the estimated costs of the planned reduction of corporate tax rates.

The PBO confirmed to Parliament that the government did have such information in its hands and that Parliament had the right to that information and, in fact, needed the information to make its decisions.

In 2010, Kevin Page announced that he would not seek reappointment when his term of office expires in March 2013. Some welcomed the announcement. Others worried that when Page’s term ends it will be impossible to fill the post, and his leaving "will mark the end of an experiment in accountability and transparency that was doomed from the beginning." 

Relevant Dates

• December 12, 2006: Federal Accountability Act is passed to create the Parliamentary Budget Office.
• March 25, 2008: Kevin Page is appointed as the first Parliamentary Budget Officer.
• October 2008: The PBO publishes one of its first major reports, and the first controversial report, analysing the cost of Canada's military mission in Afghanistan.
• November 2008: Commons and Senate Speakers Peter Milliken and Noel Kinsella complain that Page is overstepping his mandate.
• December 2008: Nine months after taking office, Kevin Page learns that his budget is to be cut by one-third (from $2.7 million to $1.8 million).
• January 2009: Kevin Page seeks a legal opinion regarding the legislative mandate of his Office.
• June 2009: The government offers to restore the $2.8 million budget with conditions.
• January 2010: Kevin Page puts forth another controversial report which again put his Office at odds with the Harper government, and the Prime Minister's Office responds with an outraged internal memo criticizing Page.
• March 2010: The government restores the PBO's budget to the original $2.8 million without conditions.
• September 2010: Kevin Page announces that he will not seek reappointment when his term of office expires in March of 2013.