Join ITQ as embattled parliamentary budget officer Kevin Page makes his first post-budget appearance before the Finance committee – which, if the linked story is accurate, could turn out to be a memorable one.
Yikes. Not sure what just happened there, but I seem to have wiped out my first few updates, which is an unfortunate start to what could be one of the more important meetings that ITQ will liveblog this week. I’ll spare you the details, but rest assured that there is some serious frowning being directed towards WordPress.
Anyway, hi everyone! Welcome to the Finance committee meeting already in progress; Kevin Page – the parliamentary budget officer – is in the midst of delivering his opening statement to members, and it’s – well, I won’t say bleak, but he definitely seems to have a slightly less rosy view of the government’s fiscal fortunes.
More numbers, more analysis – I’m not going to transcribe this word for word, since I’m pretty sure I’d mangle at least some of the numbers, thereby unintentionally crashing the market and doing even more damage to the Canadian economy. Besides, I think the report he’s reading is available online, so I can link to that afterwards.
It’s important for parliamentarians to debate the benefits of the economic stimulus plan, Page stresses, which provokes vigourous nodding from Thomas Mulcair.
And – questions! Starting with John McCallum, who thanks Page for all the support he’s provided to Parliament, and goes straight to the accountability issue – is the infrastructure money likely to get out as quickly as the budget suggests, he wonders – and how will that be monitored?
That depends, Page explains – his office uses best practices, and there are other ways to put in place a “robust framework” for accountability, but it will require cooperation from the government, as well as the efforts of parliamentarians.
On to job creation: McCallum asks for his projection, given the current climate – and Page acknowledges ‘significant declines’ over the last few months; private sector forecasts project slightly less extreme job losses than the recent prediction from the Toronto Dominion Bank, but the numbers are getting weaker and weaker. As for the government projections, Page says that those, too, look weak given the size of the stimulus package, but it’s something that requires month to month monitoring. McCallum goes back to the 140,000 figure, but Page isn’t willing to confirm or deny that number.
And that’s it for John McCallum’s first round, which seemed awfully short — seven minutes really isn’t nearly long enough to dig into the nitty gritty details – and Jean LaForest takes the mic; he wonders whether Canada has any hope of recovery if the American stimulus package fails. Page reminds the committee that the situation really isn’t as dire up here – our fundamentals are in better shape – but agrees that a weakened American economy could have a profound impact, which is why he really, really thinks that monthly monitoring is necessary.
Jean La Forest wonders if Canada is “missing something” by not going in the same direction as the US, and Page notes that the numbers are, well, bigger down there – and the state of the economy is much worse.
And – wait, why is Ted Menzies asking a question? Doesn’t the NDP get a turn? Anyway, Menzies echoes McCallum’s appreciation for the work of the budget officer, and wonders where he gets *his* numbers, as far as his projection – private sector economists? Finance? “How solid are they,” he wonders. There is definitely a slight undercurrent of — not quite hostility, but a protectiveness towards the government’s forecast, which Page, of course, has just suggested may be too rosy.
Page notes that he sees his role as serving *all* parliamentarians – not just the opposition is the unspoken implication – and obligingly describes the process used by his office, which is based on best practices from around the world. The PBO will give different scenarios, lows and highs, in order to provide parliamentarians with as much information as possible to “facilitate the debate.” As for the projections, he acknowledges that the uncertainty makes it, well, uncertain. “This is a humbling business,” he says.
Ah, there we go: the NDP now gets the slot after the government, apparently, and Thomas Mulcair starts off by promising Page that he and his office will be “protected” in doing their work before asking him to break down the $8 billion number, which seems to him to be “entirely hypothetical.” After thanking him for his support, Page notes that this is a “highly technical question” – okay, that makes me feel a little less bad for not following it – and reminds the committee that his office has been seeking more information on the proposed asset sales, as well as how much will be saved through strategic review and program cuts.
The upshot: the stimulus package is actually closer to $32 billion than $40 billion when you take into account reduced spending and the freeze on EI premiums.
John McKay gets all philosophical for a moment, wondering what *is* stimulus, really – is there any generally accepted definition used by economists? After the usual caveat – extraordinary times, etc – Page does his best to explain – but McKay wonders if there is any way to measure the relative benefits of investing in, say, infrastructure at a university versus road repair, and that kind of thing. Page agrees that there are always ways to get more “bang for your buck”, and gives a few examples – and one of his staffers – whose nameplate I can’t read, alas – gives a bit more of an explanation.
The second Bloc Quebecois MP pipes up, and notes that, as per the Liberal amendment, the government will have to provide quarterly reports; under the PBO mandate, he wonders, will he be able to provide *simultaneous* reports? Page assures him that his office is “ready and willing” to do that – he’s prepared to start right away, and would be happy to analyse the quarterly reports. When is the first one due, anyway? I think the end of March?
As Mike Wallace waggles his fingers intensely, Laforest brings up tax cuts – specifically the GST cuts that cost the government $12 billion in revenue – and wonders if any of the measures proposed in this package will have a similar effect. Those were long-term changes, Page points out – permanent, ongoing measures like that would push the government “to the line” of creating a structural deficit, which is the *bad* kind, remember?
Oh, that’s why Mike Wallace was so attentive – he gets to speak now. He wonders what the process is for releasing information in future, since it should go to parliamentarians first, yes? Ooh, is that a shot at Page? If it is, he’s pretending that he didn’t notice; he explains that the office takes requests from committees, and makes the resulting report public after tabling, but they also prepare briefing notes independent of committee requests, and those are made public when complete. So there.
Okay, it’s getting downright crackly between Wallace and Page; after a short go-round on whether a quote in a recent report represents the position of the parliamentary budget office – yes, it does – it’s on to monetary policy, and whether Page takes that into account in his forecasts; by the end, the two are coming perilously close to talking over each other.
Massimo Pacetti wonders if there is any evidence that a stimulus package can work “that quickly” – as quickly as the government is projecting, I guess – and Page once again patiently explains how hard it is to make projections given the uncertainty principle, and notes that the Finance department uses the same private sector forecasts as his office.
Hey, it’s Maxime Bernier! And he, too, wants to know more about how difficult it is to make economic forecasts – it’s not a “hard science”, he says, but a social science – really, it’s all quite random. Yes? Well, no: Kevin Page will happily admit that it is a social science, but when it comes to making projections, they do use actual numbers, charts and models.
Are we noticing a theme in the questions coming from the government side of the room?
Oh dear, we have grumbling: Mulcairian grumbling, to be precise, and directed at the chair, who, he says sadly, is beginning his tenure as chair on a “poor” note; he accuses Rajotte of allowing Wallace to “attack” the witness, and also seems to have noticed that the order of questions that the opposition members agreed to earlier this week does appear to favour the government. (ITQ to opposition members: Well, maybe you shouldn’t have been in such a hurry to pass it, then.)
Rajotte reminds the now universally grumbly opposition members how very fair he is – just ask the folks on the last committee he chaired! – and promises Mulcair that in future, if a meeting is supposed to go for an hour, he’ll cut it off right at the sixty minute mark unless the entire committee agrees to extend it, and adjourns the meeting before any further grievance can be aired.