Posted by Ian Lienert
In countries where the legislature is strongly independent from the executive, a strong case can be made for establishing an independent Budget Office, as it can assist the legislature to scrutinize the draft annual budget proposed by the executive and provide analytical support to the legislature for alternative budget proposals. In countries where parliament’s budgetary powers are limited, there is less incentive for members of parliament to scrutinize the governments’ draft budget proposals, since the “alternative budget” function is less, or possibly non-existent (in a few countries, parliament can make no changes in the draft budget without the authorization of the government). Even in these countries, parliament can still benefit from the existence of an independent office that provides analytical support for clarifying to parliamentarians the complexities embodied in a government’s draft budget.
With this in mind, legislation was recently adopted in Canada to create a Parliamentary Budget Officer, whose main mandates are to provide objective analysis to parliament on the government’s macro-fiscal estimates and analytical support on budget-related issues to members of parliament and certain parliamentary committees. Staffing of the new office is currently taking placing.
In December 2006, the Canadian Parliament adopted the Federal Accountability Act. The new statute has several components. Amendments were made to several of the main laws governing Canada’s political and public financial management system at federal level; these included provisions relating to administrative transparency, oversight and accountability. In Part 2 of the Act, amendments to the Parliament of Canada Act establish within the Library of Parliament the position of the Parliamentary Budget Officer, whose mandate is threefold, notably to:
- Provide objective analysis to the Senate and House of Commons about the estimates of the government, the state of the nation’s finances and trends in the national economy.
- Undertake research into those things when requested to do so by certain Parliamentary committees.
- Provide estimates of the costs of proposals contained in Bills introduced by members of Parliament other than in their capacity as ministers of the Crown.
The act provides the Parliamentary Budget Officer with a right of access to data that are necessary for the performance of his or her mandate (for the full act, click here).
On March 14th, 2008, the Leader of the Government in the House of Commons appointed Mr. Kevin Page as Canada’s first Parliamentary Budget Officer. During 2008, further staff qualified to perform the above mandates are being appointed, with a view to bringing total staff up to 20.
Although Canada’s system of government is based on the Westminster model, in which the legislative and executive branches are more integrated than in countries with other forms of government, the legislature nonetheless has a fiduciary obligation to scrutinize the planned expenditures of the government. In Canada, this is done through the parliamentary approval of the government's appropriations bills (i.e. Estimates). The PBO is well placed through its legislated mandate to assist Parliament, its committees and ultimately the public with this complex yet important budgetary function. In this context, the PBO plans to emphasize transparency and will publish all of its studies on its website, once it is established. For more background on the creation of the office, see The Accountability Act and the Parliamentary Budget Officer (29 June 2006).
This is an interesting development in Canada, worth watching closely to see how it evolves.
