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On PBO reform, Liberals make the right call

The centre block of the Parliament buildings is reflected in a puddle on Monday, February 1, 2016. (Adrian Wyld/THE CANADIAN PRESS)

Kevin Page and Sahir Khan are the former parliamentary budget officer and assistant PBO, respectively. They now lead the Institute of Fiscal Studies and Democracy at the University of Ottawa.

You would be forgiven if you missed the Friday-afternoon press release from the Liberal members of the House of Commons finance committee (FINA) announcing changes to Bill C-44, the government’s Budget Implementation Act (BIA), which contained changes to the Parliamentary Budget Officer’s (PBO) legislation. Weekend planning or the suspenseful Conservative leadership convention would be good excuses. But unlike typical Friday government news releases, this one was neither benign nor bad news.

The PBO was established via the Federal Accountability Act (2006) by the Conservative government as the fulfilment of a campaign commitment. To the Conservatives, what looked like a great idea in opposition became less so in government. The resulting PBO legislation was a half-measure with an expansive mandate hamstrung by limited resources and the constraints of being buried in the Library of Parliament.

After the PBO managed to undo a few shackles and released a number of credible but contrarian reports, the Harper government, the public-service leadership and the parliamentary apparatus initiated a sustained fight with the PBO over its mandate, operations and access to information. These forces even went so far as to cut the PBO’s budget and force it to seek a reference in the Federal Court of Canada.

But the PBO survived. It did so with the support of tough opposition MPs and senators (and a few brave government ones) as well as a tenacious media and engaged Canadians.

In their 2015 electoral platform, the Liberals decided that the status quo was no longer acceptable and promised to “make the Parliamentary Budget Officer truly independent.” This was implemented through the BIA, where the government tabled amendments to the Parliament of Canada Act.

The reaction to the proposed changes was not good, with many observers, including the current PBO and ourselves, viewing the amendments as a step backward. Senators and MPs rang alarm bells, and the government signalled its openness to amendments. At the Institute of Fiscal Studies and Democracy, we compared the proposed changes with the current act as well as with the Organization for Economic Co-operation and Development’s Principles for Independent Fiscal Institutions. We also proposed amendments to address the gaps. (You can read the report here.)

The issues included the following: a smaller mandate, political approvals for work plans, restrictions on publishing, lack of qualifications for the PBO position, little recourse for denied information requests and no independent PBO evaluation. Some changes were subtle and designed to slow the office down, while others were more overt and included restricting the PBO from ever going back to Federal Court. There was plenty of blame to go around between the public service and the politicians.

Liberal FINA members submitted 12 amendments designed to address the shortcomings in the original BIA. The bottom line is that the amendments appear to address the gaps identified by the IFSD. Gone are the work-plan approvals. Costing is back in. Publishing is open by default. The PBO must meet professional qualifications. The speakers no longer control the office, and the Federal Court is again available to arbitrate and clarify as necessary.

At the IFSD, we have critiqued the current government on a range of issues from the PBO and fiscal matters to infrastructure and skills and innovation. It is just as important that we recognize and commend the Liberal government for reversing course on the BIA while strengthening the very institution, Parliament, tasked with holding it to account. The action of a majority government proactively amending the BIA is a very positive precedent for Parliament and Canadians. The government has placed Canada’s PBO on strong legislative footing.

The PBO legislation will be an important milestone for parliamentary fiscal scrutiny, but there is more work to do. Renewal efforts must continue to address systemic weaknesses in the financial system. The current estimates process is terribly broken and needs a fundamental overhaul.

Without such a reform, parliamentarians will continue to struggle to defend taxpayer interests. But this week, Canadians witnessed a government prioritizing accountability and transparency ahead of its own short-term political interests. The original movie was good but a little light in plot. We like the sequel (the director’s cut, at least), and we can’t wait for the next one.