Exit interview with Parliamentary Budget Officer Kevin Page - Macleans.ca

Exit interview with Parliamentary Budget Officer Kevin Page

The PBO talks about his tenure and his hopes and fears for the office


Friday morning, I sat down with Kevin Page to discuss his time as Parliamentary Budget Officer, the future of the office and the ability of Parliament to scrutinize government spending.

Above is video of six and a half minutes of that conversation and below is a fuller, but slightly abridged, transcript of our 25-minute chat.

Q: Obviously your term is coming up, we’re down to days now, how do you feel about your tenure? Are you feeling somewhat happy with your time here? Do you feel like you accomplished something?

A: Well, we feel, I feel, we feel, the office feels that there’s a body of work that we can look back on and will be there for a period of time and we feel really good about that. And I think we felt like we came into build a true legislative budget office. We felt like we’ve shown people what that could look like. Do I feel good about the future, knowing that there’s still problems with this legislation and there’s controversy around interim appointments, where will the office be? No, there’s too much uncertainty. I wish I could leave the office in a better place. So it’s a mixed feeling.

Q: In the short term, do you have a sense of what this office is going to look like under an interim PBO? Will reports be released? Will your staff be kept on? Do you have any sense of what that’s going to look like?

A: Well, I know the people in the office very well because we worked shoulder to shoulder together for five years and we fought on every product [for] this concept of independence. So the work was definitely our work. We were not steered by bureaucrats. We were not steered in a different direction by different members of parliament or senators. So I think in the short term, the very, very short term, the next few weeks, these people have really strong backbones, they will continue to protect the independence of the office and the work. I think once you get beyond the next few weeks, how does this play out? I don’t know. It’s just too hard to say.

Q: I wanted to deal with a bit—because there’s been a fair amount of criticism or questioning of the role—some of the things that have been said about you and the office. So, for instance, Andrew Saxton, Conservative MP, during the House debate over the PBO and the NDP motion, “for 48 years, the Library of Parliament has served members of parliament, its employees did not grandstand or hold regular press conferences, they simply did their job and served parliament.” Brent Rathgeber, on a bit of the same idea, talked about, “while the current PBO is fond of issuing press releases and holding press conferences.” First of all, how would you respond to those criticisms of your profile or how you conducted yourself?

A: Well, first of all, the office provides independent analysis, that’s what it says in the legislation. So if you provide independent analysis, I need to speak for the office and I should be held responsible and accountable for how I have done that. Just to the actual nature of the comments, the specific nature of the comments, what press conferences? I think we actually did release one report in a very, kind of, controversial time, during an election period, on the costing of Afghanistan, we had a press conference. We wanted to release that report after all leaders, including the Prime Minister, said release the report. We wanted to release it in a very non-partisan way and we wanted to have people have one opportunity to ask questions. So that was the only press conference in five years. We don’t actually release press releases. We have no communications people in my office. We just write papers. And when we go to committee, we bring the paper, the paper’s on the table, there’s no binders of Qs and As. We, like you, we know the material and we’re comfortable with that material.

So I think, to me, I don’t think, if we’re fighting about the business model or if we’re fighting about the profile, that’s a very different thing than talking about the quality of the work. Like, I don’t think there’d be any profile if the quality of the work wasn’t there. And I think there is a link between the business model and the quality of the work. We’re a very open office. Like, we’re the antithesis of public service right now, where they can’t talk to other people, they can’t publish. We don’t release anything until we talk to everybody that’s deemed to be an expert. And we make it completely transparent and we put it up on our website. Everything we’ve done is actually on our website. So that I feel proud about. So when they talk about press releases and conferences, actually that doesn’t even exist. Like there is no press conferences or press releases. And I would know that because, well, I’ve been here for the five years.

Q: It’s tough to parse some of the complaints because a lot of the criticism and discussion over the last few weeks and months hasn’t been terribly direct. But there seems to be some idea or sense or complaint that your profile is too great or greater than other officers of parliament. Do you have any explanation for that? Do you look back on it and ever wonder whether you acted too aggressively or should have been more demure somehow in how you handled it?

A: Well, I think, first of all, if you go back the past five years, it’s been a pretty interesting ride: just in terms of context. We went from strong economic growth, low unemployment rates to a significant recession. We went from surpluses to deficits. And we had a government and a public service that moved forward on major legislation and said, you don’t need any information. So on the tough on crime agenda, you couldn’t put together more than a couple pages on the numbers. On fighter planes, up and until KPMG did a report for the government, there wasn’t even more than one piece of paper.

So, in a sense, I think some of the controversy, the profile was more demand driven. A huge gap was created by the lack of transparency and also the need for more information around the economic and fiscal environment. I think we filled the gap. The fact that the other side, basically the public service side or the government side, did not respond with analysis meant that they actually elevated our profile. So I think in a different time, or at a time hopefully in the future, when PBO does its work, which is really just adding and subtracting numbers, the public service does its work, shows its numbers, there’s no profile in this environment and then we sort things out in calculations. So I think we occupied a space and we were elevated effectively, I think to a large degree, by a lack of transparency by the public service and the government.

Q: Do you think you ever strayed into policy analysis?

A: Well, on every project that we do, we know there are policy issues … We know, say, when we cost a war, for us we do a methodology. What’s the cost of boots on the ground? How much capital in Afghanistan? How fast is it depreciating? How do you actuarial calculations around death and disability? That’s really geeky stuff, but all around that we know there’s major policy issues. There’s opportunity costs when you spend money on a war vis-a-vis spending money on infrastructure, education or health care. Because of a theatre of a war, capital depreciates, what kind of military do we want after a dozen years in Afghanistan? How much capital do we want to replace? Did we set aside enough money to deal with post-traumatic stress? Those are all policy issues. We never touched those issues. But to tell you that I didn’t know they existed—we could talk about every single project, I know that they existed.

People have said specifically in the case of, say, Old Age Security, when we changed age eligibility, we came out and said, actually, the program’s sustainable. And some people have said, well Kevin, that’s a political comment, that’s a normative comment. And we said, actually, not for us. We’re like actuaries when we do these calculations and we’ve been doing them since 2010. You either have a fiscal structure that’s sustainable in terms of debt to GDP or you don’t. And once the government made decisions around the Canada Health Transfer, we had a sustainable fiscal structure, at the federal level not the provincial level. And so we respond in that sort of context. That’s the box that we work in.

But, to be honest, with a week to go, I’m almost a little bit disappointed that we didn’t see the policy discussions around these issues, whether it’s fighter planes—do we really need a stealth fighter plane?—on the tough crime agenda—what if didn’t spend the money that we’re spending now to have more inmates in for longer periods of time? What if we spent it on more community centres? Would there be an impact? We never went into that area, but we never really saw a rich conversation in Parliament, either. But we didn’t touch those subjects.

Q: The estimates process has come up a fair bit in the last couple years and you’ve commented on it. When you look at other models … do you see it better elsewhere? Are we worse off than other jurisdictions?

A: I think just when you look at the Canadian system right now, how much scrutiny is taking place, what’s the quality of that scrutiny, what’s the quality of the documents that are provided to parliaments, I don’t think I’m stretching the truth by saying, and I think a lot of parliamentarians from different political stripes would say the same, our system doesn’t work. So I think you start right away with a system that doesn’t work.

We don’t see members of parliament incented to actually scrutinize spending, to go to standing committees and to scrutinize spending: Where are we spending the money? Do we have too much overhead, not enough overhead? Looking at program evaluations for different programs—should we be fixing these things?—and then tracking them on a year-over-year basis. So we have to ask ourselves: why don’t they feel incented when this is such a constitutional responsibility?

And I’ve commented as well on the control gates, at committee and elsewhere. It is just wrong when deputy ministers and cabinet ministers, members of the executive, move monies around freely within these massive votes—you know, border infrastructure funds—and they don’t have to go back to Parliament. The lack of a level playing field between the executive and Parliament is just a huge problem. And the public service, they feel like their job is to support the executive. And all the opposition who have to hold the government to account, they’re relying on a dozen people at PBO and some staffers at the library. So there’s major problems.

When we look to other parts of the world, are there things that we can take? Absolutely. We could learn from New Zealand, where they have proactive disclosure. So people like me that, in my old life, would’ve been costing fighter planes or crime bills, we would have to release that material, which is just financial in nature, because it’s not political in nature. So we could learn from that.

New Zealand, as well, as an example, deputy ministers of finance, they actually put their name on their forecasts. Sweden, they actually, after they launch a new program in a budget, committee members sit around and say, well, what’s the performance framework that we’re going to evaluate this program [with]. They debate it across party lines.

So, yeah, I think there’s things that we can learn, but I don’t think it’s really cutting and pasting. It’s like when we launched PBO. We didn’t go to the Congressional Budget Office and say, okay, let’s just cut and paste and we’ll overlay a congressional legislative budget office and a Westminster budget office. It’s just a bit more complicated. But our system is broken. And I think if you had the chair of the operations and estimates committee or anybody that’s chairing a standing committee, they would say it’s broken.

Q: Did you have a sense that it was broken beforehand? When you were on the public service side, was this a concern or did this come to you as you stepped into the PBO role?

A: I think the public servants, like me for 27 years, know the system is broken. And know that the playing field is nowhere near level. Know that the House of Commons does not really have the power of the purse. That we’ve titled the information so that it just serves the Prime Minister and the Finance Minister. I think one of the reasons why nobody wanted to be the parliamentary budget officer was because nobody really wanted to try to tilt that playing field. They were quite happy, because it served everybody. It served the prime minister. It actually serves bureaucrats to have it this way too because the phones don’t ring. Aaron’s not calling people, looking at spending going up and down relative to authorities because he doesn’t have access to information. So once you try to level the playing field, that’s a lot of change. And it’s a big fight. And there’s no way, a legislative budget officer, after five years, is going to win that battle. I like that quote from the theologian Niebuhr, who says, “nothing worth doing can be achieved in one lifetime.” I think when you’re dealing with institutions, this takes a long time to turn this boat in a different direction. But it needs to be turned.

Q: Did you ever have anybody whose opinion you trusted suggest that you had put a foot wrong or overstepped your mandate. Because there’s been all sorts of comment from beyond your office, but I assume you’re also seeking opinion from people you know. Were people ever in your ear saying, you need to tone it down, you need to walk this back?

A: Throughout the five years and particularly early on when we were trying to establish the business model, I think there’s a quote from Barry Anderson from the OECD at the time, he said, “Kevin, cement dries quickly.” So if you want to build a true legislative budget office, don’t say you’re going to be there in five years, you’ve got to start with your first product.

There are all kinds of people with great experience that I had worked with in the past that provided advice, some was positive and some was saying, maybe there’s another way. It varied, everything from, one of the persons I worked for, Peter DeVries, who I just totally admired, a legendary director of fiscal policy, early on, he said, Kevin, does it really make sense for you to be putting your projections up before Minister Flaherty puts out his projections. So we had a discussion like that and there’s no public servant I admire more than Peter DeVries. And at the end of the day, it’s my call and my call, in that particular issue, was I wanted something in front of Parliament so the House finance committee, members of the opposition, actually had numbers before Minister Flaherty showed up or didn’t show up, in terms of the House finance committee, to present his budget or his updates. And the reason for that was, I think that you want a real debate on this environment: how much uncertainty around this environment, is the deficit cyclical or structural, do we have longer term issues? To do it afterwards and not to do it an independent way, to us, was just commenting from the peanut gallery. There’s nobody I respect more than Pete DeVries, but at the end of the day, I’m responsible for that type of approach. There’s lots of these decisions that we did debate along the way.

Q: Tom Mulcair’s private member’s bill before the House to change the mandate for the PBO, do you think it goes far enough?

A: It would. It would go very far, in terms of correcting the problem that we’re experiencing right now. And I think what we’re seeing playing out right now is really just a problem of the legislation, which was not properly established. I was appointed by the Prime Minister, I work for this Prime Minister as a public servant. And I work at pleasure. Who really wants to work at pleasure? They would be more comfortable being dismissed by cause. And when you take a job and you’re appointed by a prime minister and you’re the watchdog of the finances of the prime minister’s government, at the get go, with the opposition, there’s not going to be trust. You can clean these things up and I think the private member’s bill starts to look at those issues.

So it would help and I think the issue of independence—I think there’s a lot of confusion about independence. For us, it’s not about being better or different, it’s really that we want people to know that this is our view. That’s why it’s so important for us, just like you, you put your name on your work, we put our names, individual authors, put their names on their work, people that peer review the papers put their names on their work. We want people to know this is our work and we want them to have a different data point. And so, within the library model, which is where we’re situated, that’s just not congruent. They need to provide confidential services to members of parliament who are looking at private member’s bills, policy development. Whereas I think in our model, people need to know that this is our work and so it’s very different business model. So I think the future’s not sustainable for us to be in a world where you have the parliamentary budget officer, I have this responsibility to the legislature for this mandate, but administratively I report through the librarian. So the librarian could say, you know, I don’t want you to have a website, I don’t want you to hire these people, I’m not signing off on that contract. And all of a sudden your independence is no longer there. And whereas I think for the five years, people have a strong sense that the work that we provided was our view, a PBO view. And that I would be held as responsible and I was also willing to be accountable for that work.

Q: Does it go far enough on the demand or the ability of the PBO to demand documentation from the government side?

A: There are different models in different countries that have much stronger access provisions. To me, it’s two things. There’s the force of legislation and the culture. If we don’t change the culture in this town right now, which is complete secrecy—nothing up on websites, sorry can’t talk to you—if we don’t change the culture to be more analytical, more open and transparent, we have a really big problem.

Stronger legislation helps. So if it’s clear that we’re operating within our sandbox, within the mandate and we ask for information, it should come. Over the last five years, we’ve used weak legislation, but we’ve done it in a very transparent way. So you know, Canadians know, members of parliament know, when we’re working on a project, I will write a letter to the deputy and it will say, we’re working on behalf of taxpayers, on behalf of these members of parliament, it’s within our mandate, here’s what we need to do our job. We’ll get a response back and that all gets posted on the website. So in the meantime, while we don’t have stronger legislation, we find the way to work in this environment is with complete transparency.

Q: Going forward, I know a lot remains unknown and subject to change, do you think though that there is some possibility that this office gets improved, that the right person gets put in this job and that this carries on or are you really quite pessimistic that this is going to head in a bad direction?

A: Well, I think there are two scenarios for the short and medium term, the next year or two. I think one scenario is somebody gets appointed with knowledge and experience and will continue to fight for the independence of the work of the office. As I’ve said before, we have at least three people in my office that can do that. If that scenario plays out, the office will continue to grow. Not grow in a sense of more publicity or stature because that could change—if the government becomes more transparent, I think we go back to where we need to be—but I think the quality of the work, because we’re new and we’re just tackling big projects, we’re just wrapping our heads around military procurement or sustainability issues, et cetera, and these issues will evolve as the political agenda evolves and the quality of our work will even get better. So that’s a comfortable scenario, even thought it’s not sustainable because the legislation won’t continue to sustain it over a longer period of time.

On the other hand, if this office is being unwound as we speak—the fact that the process to replace me as parliamentary budget officer is just really starting and I’m out the door in a week. The fact that the governor-in-council, the Prime Minister, has appointed on an interim basis the parliamentary librarian, who has—very nice person, smart lady—but no experience on a budget. Where we have people with major experience within my office who could have acted. And we have a process to replace me that is completely secretive—can’t tell you their names, trust me it’s going to be fine—and then we find out there’s somebody from the Privy Council Office, which supports the executive not Parliament, actually on the selection committee. These are all negative, negative signals for the short term. That could be, okay, we’re unwinding the office, we don’t want over the next two years, as we lead up to the next election, to have somebody doing independent work as we launch new initiatives.

So those are the two scenarios. Where would you put your money? I think as an economist, you kind of try to understand how do the systems work, how are they incented to work? And in the current legislation, it’s all titled toward the executive side, so they will appoint the next person. And so what’s the incentive for the government to appoint somebody that’s worked on budgets in the past? What I’ve said, our office is a bit of an accident or a bit of an experiment. Because we were given this opportunity and collectively we just decided, for public service reasons, we’re just going to try to be a true legislative budget office and we’re going to go as long as we can, even though, in my case, I work at pleasure. So if the legislation’s not strengthened then I would put my money on how the incentives are in the current system and it’s not good for PBO.

Having said that, if people like yourself and members of parliament, opposition, the official opposition and Canadians say, you know what, I really like this, I like it when elected representatives come to Ottawa and they have financial information. I feel like it empowers them. I want the power of the purse to be with the House of Commons. I want them to be motivated when they scrutinize spending initiatives. Then I think maybe the office goes through a difficult period for the short term, but the long term is quite positive. And so I think it was incumbent upon me and my office to raise the bar as high as we can, to show people that if you’ve got 15 people and you operate in a very open, transparent way, you could do a lot of work on tough issues with a very different business model. So then maybe PBO comes back in a couple of years. So that is our hope, getting back to Niebuhr, “Nothing of real value can be done in one lifetime, so you’re saved by hope.” So I guess the hope is that we’ve raised the bar, maybe we go through a dark period, but it comes back and gets even stronger.