Opinion

Former Budget Watchdog Kevin Page on Canada's 'Grotesquely Wrong Elites'

And how to re-democratize government spending. A Tyee interview.

By David Beers 10 Mar 2014 | TheTyee.ca

David Beers is editor of The Tyee.

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Former parliamentary budget officer Kevin Page: 'Democracy needs a strong and independent media.'

Kevin Page served from 2008 to 2013 as Canada's parliamentary budget officer, an independent watchdog paid by the citizenry to provide non-partisan analysis of the economy, the nation's finances and what the government spends and how it justifies doing so. He reported to the Speaker of the House of Commons and the Senate, but he wasn't out to make friends of politicians. When Page dared question government estimates and forecasts, he faced withering fire from the party in power. No matter the heat, Page never melted.

The Huffington Post named Page its 2012 news story of the year, calling him a "persistent thorn in the side of the governing Tories, and perhaps the best opposition member never elected to Parliament. Despite Ottawa's Orwellian grip on messaging, and despite public condemnation of his work by some of the most senior members in Stephen Harper's cabinet, Page as parliamentary budget officer has managed to cut through the noise, crunch the numbers, demand accountability and speak truth to spin."

Since his term ended, if anything Page has deepened his watch dog growl, telling The Tyee the "elites" running Canada are "grotesquely wrong" to cut investments in environmental research.

"I do not strongly identify with one political party," Page told The Tyee, adding: "I think it might be interesting to have a coalition government some day in Canada." That coalition, if it reflected Page's admirers, would be pretty interesting, given that Page last year received the highest honour given by the conservative Canadian Taxpayers Federation, and this Thursday delivers the keynote at the annual gala of the progressive Canadian Centre for Policy Alternatives in Vancouver.

Here's the rest of the Tyee's conversation with Kevin Page:

The Tyee: You spent most of your career as a "quiet" civil servant -- the public was not aware of your work. But as the first PBO you were very public and quite prepared to have very public disagreements with the government. What informed that transition in your role?

Kevin Page: "I believe the profile of the Parliamentary Budget Office was due to a number of factors.

"Economic and fiscal uncertainty increased significantly with the 2008-09 recession and the return of budgetary deficits. This created need by Parliament for additional analysis.

"Two, the government and public service sought to move forward on a number of significant policy files without providing any substantive financial information to Parliament and Canadians. They asked MPs to vote on the provision of financial authorities related to tough-on-crime legislation, military procurement or fiscal restraint without the provision of information they needed to hold the government to account. Our Westminister system of parliamentary responsible government was breaking down. PBO became an important source of information in this vacuum.

"Finally, the people that came to PBO wanted to build something special for their country -- a budget office that was lean, analytical, transparent and accessible. This model clashed with the current public service model which was becoming less transparent. The model we employed was fully consistent with OECD principles for independent fiscal institutions. We did not look for profile. It came with the environment and the job."

What were the three most significant disputes you had with the government as PBO -- the most significant issues on which you disagreed with their forecasts?

"One, PBO had a very different outlook for the economy and our fiscal situation in the fall of 2008. We came out ahead of the government's fall update with the warning of a recession and deficits. The finance minister released his fiscal update a week after the PBO release and indicated no recession and deficit. When it became apparent the world economy was in a recession, the opposition parties started talking of a coalition government. The prime minister quickly prorogued Parliament and came back with a new outlook and budget.

"Two, PBO released a report in 2011 saying the cost of the F35 fighter planes were going to be significantly more expensive than indicated by the defence minister over its life cycle. We were heavily criticized by the government and public service at the time. A year later the auditor general released a report indicating that the government and public service had similar numbers to PBO but did not release them to the public. The F35 saga continues.

"Three, PBO had a different perspective on the sustainability of the Old Age Security (OAS) program in 2012. The prime minister said the program was not sustainable and raised the age eligibility requirement. PBO, using similar numbers as the chief actuary, prepared annual long-term fiscal sustainability reports and indicated that the program was sustainable (the federal fiscal structure was sustainable with respect to stabilizing debt to GDP after the government reduced the escalator on the Canada Health Transfer). Sometime later, after criticism by the auditor general for not releasing sustainability analyses, the government released its own analyses and indicated that the federal fiscal structure was sustainable and since OAS was funded by general revenues, it too was sustainable before the government changed the age eligibility requirement."

Why is an office like the PBO necessary? Why does it matter to the good functioning of our democracy?

"In our Westminster parliamentary democracy, the 'power of the purse' rests with the House of Commons. No money should be spent or tax legislation changed unless the executive gets approval from the House of Commons. We want members of Parliament to have access to financial information before they vote. An independent PBO can help level the playing field between the executive/public service and the legislature with respect to access to financial information before money is authorized. Without this information -- there is no accountability. The system breaks down. The current system is badly broken. We do not have the necessary checks and balances in place. MPs are often forced to vote without the information it needs. MPs have lost the power of the purse. They need to regain it."

What are the key lessons you take away from your experience as PBO?

"There is one key or overarching lesson. Change is difficult. But as George Bernard Shaw said 'without change, there is no progress.' The Conservative Party wanted a PBO when they were in opposition. They wanted more financial information to hold the executive to account. While in power, they did not want a strong PBO. Other parties may behave in a similar way. When you have power there is a tendency to want to control information and messaging. We will need institutional reform. Our institutions in Ottawa are degenerating. There will be a price to pay in terms of the strength of our democracy and prosperity."

Some scientists say federal libraries and other valuable infrastructure for making decisions is being unnecessarily destroyed in the name of budget cutting, but the real goal is to silence sources of environmental criticism. The Tyee has followed the story closely, for example here. Do you think the Harper government has used budget cutting as an excuse to achieve other political aims including undercutting the work of scientists whose findings could be cited by critics of the government's policies?

"I am deeply concerned about the lack of transparency, analysis and debate on the choices and impact of government programs and operations that are being eliminated and scaled back in the name deficit reduction. This includes reductions in spending to support information and knowledge at Environment Canada, Statistics Canada and elsewhere. The government created a structural deficit problem when it cut the GST and corporate income taxes too deeply with respect to our fiscal structure and long-term economic and demographic fundamentals. It is now trying to reduce a structural deficit while our economy continues to operate below its potential. It launched an austerity program in Budget 2012 without a plan for Parliament to scrutinize.

"PBO tried to get information on the cuts in advance of decisions to scale back science and veterans support etc. but were told by the public service and cabinet ministers that we were exceeding our legislative mandate. PBO sought a reference opinion at the Federal Court on this issue. There should be a plan in place to explain to Parliament and Canadians the choices and impact analysis on the cuts. This plan does not exist. The system is broken. MPs are voting on departmental spending plans without the information they need to assess austerity impacts. We are closing veterans offices in the name of efficiency but spending more on recreation trails. MPs should debate these issues.

"One of my favourite writers, Martin Wolf of the Financial Times, wrote a piece a few weeks ago about the state of leadership. He said we 'have high quality people but weak leadership.' He said we have an implicit pact with our elites. We want them to do their best and at least get things 'partly right,' not 'grotesquely wrong.' I fear that on the management of our institutions and on the long-term issue of climate change our elites are grotesquely wrong. We should be increasing investments in environmental research, not decreasing."

Is it good practice, in your opinion, to roll large amounts of budget-related policies into one omnibus bill, as the Harper government has done recently?

"Omnibus budget bills can be used effectively in legislative debate if they are omnibus because they have integrated components. This can happen when a government moves forward with major reforms on a policy envelope -- economic, social or environmental etc. It is possible to have policy change that requires change in a number of acts. In the past few years, we have had omnibus budget bills that brought together many unconnected changes to laws across many different policy files. This was done to limit debate and not enhance debate.

"Bruce Cockburn has a song that says 'the trouble with normal, is that it always gets worse.' To the extent that omnibus budget bills are the new normal, our democracy is getting worse not better. There is less debate and accountability."

Has this government achieved more or less transparency around the budgeting process? Is the process now more or less democratic?

"The current government (and public service) has achieved record lows with respect to budget transparency. We need to reverse the trend line. Canadians should make institutional renewal a major issue in the 2015 election. We need evidence-based decision making and rule-based democracy. Without it, there will not be progress on major policy issues that will impact future generations."

What is the main reform to Canada's budgeting process you'd like to see?

"I would like to see real reform to our appropriation process. We need to better connect the budget plan with departmental spending plans. We should have departmental spending plans fully consistent with the budget plan. As it stands now, you cannot add departmental spending plans and get the budget plan numbers.

"We need to review the process and incentives. MPs are asked to review departmental spending plans but have little to no impact on the plans.

"We need to change the voting structure. MPs currently vote on inputs like operations and capital when they should vote on program activities like aboriginal education or icebreaking by the Coast Guard. Cabinet ministers and deputy ministers should have to return to Parliament to get approval when they move spending authority from programs like border infrastructure to G8 legacy type spending. They do not have to in the current system. We need to change the control gates.

"Also, we need to review the way the public service supports Parliament, not just the executive. The current system under supports the work of the legislature to hold the executive to account. We need to change the appropriations system and return the power of the purse back to the House of Commons."

Do you think Canada's news media does a good job of reporting on budget?

"The media needs more access and help from experts on budget issues. Past deputy ministers of finance like Scott Clark are invaluable, as is Peter DeVries, a legendary fiscal policy director. Budgets have become very difficult to read. There is a lot of communication material -- regarding announcements of old events, etc. -- that make it very difficult to discern what is new.

"The media needs to keep the pressure on our political leaders to keep the focus on longer term issues that have impact that goes beyond the electoral cycle. They need to remind their readers as well when we are keeping our collective heads in the sand and letting down future generations.

"Democracy needs a strong and independent media."

Do you strongly identify with any particular political party? How would you describe your political leanings if you care to share them?

"I do not strongly identify with one political party. In my lifetime I have voted for all major national parties -- Conservative, Liberal, NDP and Green Party. I want strong representation in my riding. I want the system to change to free up my local MPs to better represent their ridings.

"With the current state of our institutions (weakened), I am quite comfortable with minority parliaments. I want the prime minister and his cabinet to feel the need of moving forward on policy issues only with the confidence of Parliament and the will of the people. I think it might be interesting to have a coalition government some day in Canada. Again, without change, there is no progress."

Former parliamentary budget officer Kevin Page is Jean-Luc Pepin research chair in the faculty of social sciences at the University of Ottawa. On Thursday, March 13, he gives the keynote at the annual fundraising gala of the Canadian Centre for Policy Alternatives, B.C. Office. Find out more about the event here.  [Tyee]

Read more: Federal Politics

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