Parliamentary Budget Officer

Parliamentary Budget Officer
Agency overview
Formed	2006
Headquarters	Ottawa, Ontario, Canada
Employees	18
Annual budget	$2.8 million (FY 2012)
Agency executives	Jean-Denis Fréchette^[1], Parliamentary Budget Officer Mostafa Askari, Assistant PBO, Economic and Fiscal Analysis Sahir Khan, Assistant PBO, Expenditure and Revenue Analysis
Parent agency	Library of Parliament
Website	www.pbo-dpb.gc.ca/

The Parliamentary Budget Officer (PBO) provides independent analysis to Canadian Parliament on the state of the nation's finances, the government's estimates and trends in the Canadian economy; and upon request from a committee or parliamentarian, estimates the financial cost of any proposal for matters over which Parliament has jurisdiction.^[2]

History

The Parliamentary Budget Officer was established in 2006 as one of the Independent Oversight Offices created as part of the Federal Accountability Act. The powers of the PBO are enshrined in the Parliament of Canada Act (Sections 79.1-79.5).^[3]

Mission

"The PBO will support Parliament in exercising its oversight role in the government’s stewardship of public funds by ensuring budget transparency and promoting informed public dialogue with an aim to implement sound economic and fiscal policies in Canada."^[4]

Organisation

The Officer is an independent officer of the Library of Parliament who reports to the Speakers of both chambers. The PBO is organized into two divisions: Economic and Fiscal Analysis, and Expenditure and Revenue Analysis. Each division is led by an Assistant Parliamentary Budget Officer. Both divisions support the PBO’s role to inform parliamentarians and improve budget transparency.^[5]

The Economic and Fiscal Analysis Division

The Economic and Fiscal Analysis Division provides economic and fiscal analysis, outlook and risk assessments. This analysis relies heavily on the use of econometric and statistical models and includes broader research on macroeconomic and fiscal policy.^[6]

The Expenditure and Revenue Analysis Division

The Expenditure and Revenue Analysis Division analyzes program costs and estimates, assesses budgetary systems and provides cost estimates on Parliamentary proposals. This work often involves financial analysis and ‘due-diligence’, assessing business cases and developing cost methodologies.^[7]

Operating model

The PBO’s basic operating model was developed through extensive stakeholder consultations.^[8]

Independence: The PBO’s advice is independent, objective and non-partisan.^[9]
Open and Transparent Publishing Model: The PBO’s analysis is openly reported to committees and parliamentarians and is freely accessible to all on its public website.^[10]
Collaboration and Partnering: The PBO works with academics, think tanks, consulting firms and external experts to provide authoritative analysis. Peer review is also used when appropriate to ensure the quality and credibility of the analysis.^[11]
Setting Priorities Based on Materiality and Contribution Potential: The PBO maintains an independent research plan, while simultaneously responding to incoming requests from parliamentarians and committees.

Given resource limitations, research priorities are set using two core principles:^[12]

materiality: the issue can reasonably be expected to have a substantive impact on the government’s finances, estimates or the Canadian economy and;
contribution potential: the issue has the potential to increase budget transparency and/or promote informed parliamentary and public dialogue towards implementing sound budget policy and financial management

Access to information

The PBO has developed an information protocol. This process relies on the legislated provisions of the Parliament of Canada Act to provide the PBO with free and timely access to information from departments and agencies, while simultaneously providing them with clarity, predictability and transparency for all PBO information requests.^[13]

The Parliament of Canada Act states that, "the Parliamentary Budget Officer is entitled, by request made to the deputy head of a department... to free and timely access to any financial or economic data in the possession of the department that are required for the performance of his or her mandate."^[14]

Government resistance

In 2012, a number of large government departments refused to disclose the number of job cuts and how much service in each department would be affected. Some cabinet ministers, such as Minister of Finance Jim Flaherty and Treasury Board President Tony Clement, who refused to disclose their numbers, said that the PBO was exceeding his office's mandate by requesting such information.^[15] Other MPs defended the PBO, arguing that it is extremely difficult to vote on a budget when details aren't known about how significant cuts will affect government services and programs.^[16] The PBO argued that it is his job to inform parliamentarians and the public about what a $5.2-billion cut will do to government. It's especially relevant for MPs, he said, who are obligated to scrutinize spending plans and vote on budget bills.^[17] The PBO stated that it was prepared to take the issue to Federal Court to attempt to force the Government to comply.

Relation to Library of Parliament and the Office of the Auditor General

The PBO and the Parliamentary Information and Research Service (PIRS) of the Library of Parliament and the Office of the Auditor General of Canada provide distinct, but complementary services to support Parliament.^[18]

The PIRS provides research and analytical support through responses to individual MP requests on a confidential basis, working with committees to draft reports and conducting occasional research projects. The PBO, on the other hand, provides independent economic, fiscal and financial analysis to Parliament and parliamentarians. The PBO also provides these types of reports to relevant committees upon request.^[19]

The Office of the Auditor General of Canada takes a retrospective view of the public accounts and plays an assurance role. This is distinct from the PBO’s work, which is largely prospective in nature and in a decision support role for Parliament.^[20]

Independence

Peggy Nash introduced a private member's bill that would make the Parliamentary Budget Office independent from the Library of Parliament, as the Office of the Auditor General of Canada is.^[21]

Notable reports

Cost of F-35 fighter jets

In March 2011, the PBO published a 65-page peer-reviewed report that estimated the cost of buying F-35 fighter jets. The PBO estimated the full cost to be $29.3-billion, including upgrade costs of $3.9-billion, much higher than the $9-billion the Department of National Defence had publicly estimated.^[22] The Auditor General later reached a similar conclusion as the PBO.^[23]

Sustainability of Old Age Security

In February 2012, the PBO released an analysis of the projected cost, over the next 70 years, of benefits to the elderly. It concluded that those costs would rise for a number of years relative to GDP, then fall back very close to current levels (slightly less than 15 per cent of total federal program spending). This report contradicted the government's statement that Old Age Security was unsustainable.^[24]