Mr. Ferguson’s audit, released on April 3, said the F-35 fighter jets would be billions higher than predicted by the Department of National Defence, putting the costs more in line with Parliamentary Budget Officer Kevin Page’s estimates released last March.
“There should be a renewed movement to make the Parliamentary budget officer a full officer of Parliament as has been recommended by all kinds of observers. He deserves to be,” said NDP MP Pat Martin (Winnipeg Centre, Man.). “The work is just too valuable. In the same way the auditor general reviews spending after the fact, we need the Parliamentary Budget Officer to comment on proposed spending at the front end like the Congressional Budget Officer in the United States. It would be such an asset and such a resource to Parliament to have that objective independent third party analysis of proposed spending.”
Liberal House Leader Marc Garneau (Westmount-Ville Marie, Que.) told The Hill Times last week that if the Liberals formed the next government, they would create an independent office. “The irony is that this government created the position and they’ve done nothing but abuse it or heap criticism on it. We recognize the benefit of it,” he said. “And yes, the PBO can sometimes tell you something you don’t want to hear, but that’s why you want to have that function there.”
Last March, at the request of former Liberal MP Ujjal Dosanjh and current Liberal MP Dominic LeBlanc (Beausejour, N.B.), Mr. Page’s office undertook a study of how much Canada would pay as a result of sole-sourcing the F-35 procurement and what the forecast for its acquisition and operational costs would be. In the report, An Estimate of the Fiscal Impact of Canada’s Proposed Acquisition of the F-35 Lightning II Joint Strike Fighter, the PBO estimated that it could cost more than 20 per cent more to sole-source the fighter jets from Lockheed Martin. In addition, the report said the total ownership cost for the jets would be $29.3-billion, including $19.6-billion of ‘ongoing sustainment cost’ over 30 years to replace the current fleet of CF-18 fighter jets.
The government immediately dismissed the report, saying that it did not agree with the PBO’s methodology. In response, DND put out its own report, saying that the costs would be much lower than the PBO’s assessment, putting the estimate at $14.7-billion over 20 years.
Mr. Ferguson, in his spring report released on April 3, revealed however that the true cost would be closer to $25.1-billion over 20 years. The report stated that the government did not account for a number of costs, “likely underestimated” full life-cycle costs, and did not demonstrate due diligence in its procurement strategy for the 65 fighter jets.
“We also have significant concerns about the completeness of cost information provided to Parliamentarians. In March 2011, National Defence responded publicly to the Parliamentary Budget Officer’s report. This response did not include estimated operating, personnel, or ongoing training costs,” the AG’s report states. “Also, we observed that National Defence told Parliamentarians that cost data provided by U.S. authorities had been validated by U.S. experts and partner countries, which was not accurate at the time. At the time of its response, National Defence knew the costs were likely to increase but did not so inform Parliamentarians.”
After Mr. Ferguson released his report, the government immediately said that it accepts the AG’s recommendations and is moving quickly to make changes to the procurement process.
“The government has not acquired the aircraft. The government has not signed a contract. The government has frozen the funds for acquisition. The government will examine the process,” Prime Minister Stephen Harper (Calgary Southwest, Alta.) said in Question Period.
“The government has said it will set up a separate and distinct secretariat, and we will make sure there are independent verification processes. That is how the government will proceed.”
The difference in responses the government gave between Mr. Page a year ago and the AG today “shows great disrespect” to the PBO, Mr. Martin said.
“The AG carries a lot more weight. Page, they’ve painted him as a rogue and they’ve kind of tried to neutralize him. You can’t do that with the AG,” said one lobbyist, who did not want to be named.
Mr. Martin agreed. “I think they realized that they could not show the same disrespect to the auditor general because that office is so trusted and so revered by the Canadian people,” he said. “When the auditor general came out and validated the findings of the Parliamentary budget officer, it didn’t leave the Conservatives very many options in terms of how to respond. … They just didn’t know which way to turn. It hasn’t been pretty to watch, but I hope the PBO felt some satisfaction that he was right.”
In response to the AG’s report, the PBO sent out a press release saying that “the recent auditor general’s report reveals that, in June 2010, DND’s true cost estimate was approximately $25 billion—representing a difference of $10-billion. The inclusion of this difference would bring DND’s cost estimate in line with that of the PBO. The PBO remains ready and willing to serve Parliament by providing independent analysis on any new options the Government may wish to consider replacing Canada’s aging fleet of CF-18s.”
In an email interview last week, Mr. Page told The Hill Times that he doesn’t believe his office’s relationship with the government is further strained because of the AG’s report.
“In fact, we hope that the work we have done related to costing (i.e., F-35, crime, aboriginal educational infrastructure, Afghanistan, private member bills etc.); the PBO expenditure monitoring and economic and fiscal analysis (projections, estimates of output gaps, cyclically adjusted budget balances, fiscal sustainability etc.) will build bridges of trust with Parliamentarians, public servants and Canadians—not because our numbers are right (because no one can predict the future) but because we have conducted this work in an open, transparent and authoritative manner (explicit assumptions, methodologies, engagement with experts etc.),” Mr. Page said. “We are cognizant that sensitive political issues are now being discussed with the release of the recent AG report, but we feel the earlier work by the PBO on F-35 has served its purpose by providing Parliament with a financial framework, analysis and independent cost estimates.”
Mr. Garneau said that the relationship couldn’t be more strained than it already is, ever since the PBO released cost estimates on Canada’s involvement in Afghanistan which were higher than the government’s numbers. The government has criticized the PBO’s fiscal forecasting on deficits and took a partisan shot at Mr. Page when The Globe and Mail reported that he was unwittingly attending a Liberal fundraiser last fall by circulating a memo questioning Mr. Page’s “lapse of judgment.” Mr. Page didn’t realize it was a partisan event and cancelled his appearance at the event.
“Mr. Page has hurt his ability to function as an independent official to whom all Members of Parliament can look to for support,” the Conservative memo said.
All of this followed a very public battle for adequate funding and resources for the Parliamentary Budget Office in 2009 and questions over the PBO’s mandate.
The relationship between the Conservatives and Mr. Page’s office could be described as “poisonous, dysfunction and abusive on the part of the government,” Mr. Martin said. “The fact is, they can’t bamboozle the PBO and they hate him for it. Comments by Conservative MPs have ranged from rude to malicious to downright slanderous over the last couple of years,” Mr. Martin told The Hill Times. “That’s only escalated since his research into the F-35s have been validated and confirmed, much to the government’s embarrassment. Honestly, Kevin Page is a modern-day hero. He’s one of the best friends the Canadian taxpayers ever had.”
The Conservative government set up the office in 2006 under the Federal Accountability Act to “ensure truth in budgeting” and appointed Mr. Page to the position in March 2008. Mr. Martin, who sat on the legislative committee on the Federal Accountability Act, said he doesn’t believe the Conservatives ever intended to have a “really robust” PBO.
“They had structured his office in such a way that they didn’t expect such vigorous and robust oversight. I think they very deliberately avoided making him a full Officer of Parliament and putting him under the research department of the Library,” Mr. Martin said. “I guess they thought that he couldn’t really get in their way with those kinds of tools, but in spite of all odds, he’s been incredibly effective at scrutiny, and oversight and due diligence so it’s to his credit that he’s been so effective without even the necessary tools to do the job. … They were more surprised than anyone when he started doing meaningful and important work.”
PMO communications director Andrew MacDougall did not return an email last week for comment, but Mr. Garneau said that the government’s treatment of the PBO “is nothing short of disgraceful” and “has been a farce.”
Meanwhile, with budget cuts affecting the majority of the public service, Mr. Page said his office budget was frozen this year at $2.8-million. Mr. Martin said this budget is “woefully inadequate.”
Mr. Page said that if compared to other budget offices, for example in the U.S., the U.K. and Australia, the PBO’s budget is small compared to its large mandate.
“We will prioritize based on materiality and risk. If the big issues in front of Parliament relate to crime bills or new military equipment or fiscal sustainability (i.e. OAS [Old Age Security], health etc) we will do our very best to ensure Parliament has additional data points and analysis from the PBO,” he said. “At some point, hopefully sooner rather than later, Parliament may wish to decide whether they got the legislation right, including the right size of budget. As the first Parliamentary Budget Officer and with my commitment that I will serve one five-year term, I hope that they will reconsider the appointment process, the legislative independence of the office, the legislative commitment to transparency in the work of the PBO and the mandate-budget issue.”
NDP MP Peggy Nash (Parkdale-High Park, Ont.) currently has a private member’s bill on the Order Paper to make the Parliamentary Budget Officer an independent Officer of Parliament. It was originally a private member’s bill by NDP MP Paul Dewar (Ottawa Centre, Ont.) and was debated briefly in the previous Parliament.
Conservative MP Andrew Saxton (North Vancouver, B.C.), then-Parliamentary secretary to the Treasury Board president, said during debate in the last Parliament that the government supported referring the bill to a House committee “where its implications for the structure and activities … can be given full consideration by Parliamentarians.”
He noted, however, that the bill had some potential problems with it.
“The changes proposed in this bill would likely result in some duplication of efforts with the Library of Parliament. The new office that would be created, if this bill were to pass, would almost certainly require new appropriations,” he said, adding regardless that the PBO “already operates independently of government and answers to Parliament as an office of the Library of Parliament. It is Parliament, not the government, that sets the funding level for the Parliamentary Budget Office.”
Mr. Page’s term ends next March, but Mr. Martin said he is not worried about the government axing the position.
“I think there’d be such a human cry if they try to attack that office now, that the general public wouldn’t tolerate it,” he said. “I don’t think they would dare try to eliminate it or to hamper it any further by further budget cuts. This is where we should be spending more money, more oversight, more scrutiny, more transparency.”
Original Article
Source: hill times
Author: BEA VONGDOUANGCHANH
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