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 cooperate with his investigations.

Background

In the 1980s, the Mulroney government presided over a period of growth in the federal debt and deficit that were inaccurately or inadequately forecasted by Finance Department officials. Under the Chrétien and Martin Liberals, a series of “surprise surpluses” were announced as the government implemented deficit reduction measures.

A push for “truth in budgeting” led to the creation of an “independent Parliamentary Budget Authority” in 2006. The Parliamentary Budget Officer (PBO) was established in the non-partisan Library of Parliament. The lack of alignment and mission fit between the Library and the PBO would have consequences later on, as would the lack of clarity regarding the PBO’s budget, its staffing, its reporting lines and the extent and nature of its independence.

The PBO position was ultimately filled in March 2008 by Kevin Page. An economist with almost three decades of experience in the federal public service, Mr. Page had served previously with Finance, the Treasury Board Secretariat and the Privy Council Office.

As Parliamentary Budget Officer, Page was mandated to provide objective and independent analysis to Parliament on the state of Canada’s finances, government estimates and trends in the Canadian economy. The PBO can also undertake economic and fiscal research on the request of certain committess, and, if requested by a Parliamentary committee or Member of Parliament, has the authority for estimating the financial cost of any proposal under consideration.

Rough beginnings

For the outset, Mr. Page caused consternation. In October 2008, MrI. 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 William Young that Page was overstepping his mandate.

One month later, the PBO criticized the government's financial record-keeping. 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 own budget was going to be cut by one-third (from $2.7 million to $1.8 million) and frozen at that level.

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 Parliamentary Librarian asserted that the PBO is not accountable to Parliament but rather to the Librarian, just like other executives in the Library.

Mr. Page sought a legal opinion from the national law firm McCarthy Tétrault regarding his legislative mandate. This external legal opinion determined that the PBO’s operating model is supposed to be non-partisan, objective and fully transparent, and that this is consistent with the Parliament of Canada Act. While clearly a part of the Library of Parliament (LOP), the PBO is distinct from other senior executives due to the functional independence required in order to fulfill the legislated mandate, while operating within the administrative control of the LOP. The opinion further noted that the administrative control of the LOP should not impinge on the PBO in fulfilling the Office’s mandate and should be supportive of the process. In a lengthy analysis of the conflicts caused by differing perspectives on the role and responsibility of the PBO, Brooke Jeffrey wrote in the Canadian Parliamentary Review 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 himself 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.”

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 Mr. Page’s work.

The smaller PBO keeps hammering away

A 2010 analysis of the PBO in the Canadian Parliamentary Review suggested that Mr. Page’s “record of success” in producing consistently highly competent studies gave him some degree of protection from political pressures. 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 review of PBO fiscal forecasts by the Globe and Mail claimed that government estimates are more accurate.

In a study in January 2010, Mr. 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 put him at odds with the Minister of Finance’s projections and with comments made by the Prime Minister at that time. 

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 “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 originally 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 then, the PBO has continued to challenge government financial estimates, but 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.

The PBO also found itself in a 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 decisions.

In 2012, following the March budget, Mr. Page sought details over the impact of $5.1 billion-a-year budget cuts to key departments inlcuding Finance, Foreign Affairs, Immigration and citizenship, Environment and Treasury Board, or even how those cuts were to be achieved. Mr. Page also targeted the Canadian Food Inspection Agency (CFIA) where cuts were especially controversial in the wake of a massive beef recall in September 2012, which resulted in E.Coli infections. 

As of October 21, 2012, Mr. Page claimed that he was refused access for months of details of the cuts from 62 government departments, and has threatened to take the government to court.  

Will not seek reappointment

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.
• term of office expires in March of 2013.
• March 2012: The Government of Canada’s budget contains $5.2 billion in spending cuts. Mr. Page asks the Clerk of the Privy Council for details. None are forthcoming.
• October 2012: Mr. Page writes directly to all federal deputy ministers, requesting details of the impacts of spending cuts.  As a result of the failure of 62 out of 82 government deparments to comply, Mr. Page announces that the "PBO will be filing and serving legal notice on all non-compliant deputy heads [of departments]."