Budget oversight: The pit bull

As the government-hired watchdog over your money, Kevin Page is tough, tenacious, outspoken. No wonder some in Ottawa want him muzzled.

Kevin Page is a calm guy. That’s evident from the way he’s sunk his slim frame into a chair in his office, chin resting in his hand, speaking in a languid monotone. His demeanour rarely changes, even when talking about those in Ottawa who want to kick him out as the country’s first Parliamentary Budget Officer. “There are former parliamentarians saying I should be held in contempt of Parliament and should be fired,” he says. “But I’m okay with them saying that. That’s just part of the debate.”

There’s more debate than Page expected when he was appointed in March 2008. His job is to provide independent analysis of Canada’s finances, trends in the economy and scrutiny of federal budget estimates, ensuring the government is honest in reporting how it will spend taxpayer money.

Page released his first report last fall, a sweeping study of the costs of the Afghanistan war: up to $18 billion by 2011 if current troop levels are maintained, billions more than the Department of Defence was reporting. His forecasts have contradicted the Department of Finance’s rosy projections on several occasions—and proven to be more accurate. Despite the quality of the work, Page has been accused of violating the legislation behind his position and running wild with his mandate. He says some in Ottawa are trying to rein him in, and he’s engaged in a public feud over his budget. Without an increase, the ability of the office to function is in jeopardy. He alleges “interference,” though from whom specifically he says he honestly doesn’t know.

Supporters contend the Conservatives are punishing Page for embarrassing the government. “Every time he comes out with a report, it pisses them off,” says Thomas Mulcair, the NDP finance critic. The irony is the Conservatives established the PBO, though it’s clear not everyone in the party is happy with Page. “I almost now take with a grain of salt some of the comments that are coming from Kevin Page,” says Patrick Boyer, a former Conservative MP who helped establish the position. “He’s wrapping himself in this flag of accountability, as if anything he is doing is right and justifiable because he is the white knight. I don’t need to take any lessons from anybody on democratic accountability.”

Page’s performance and the entire purpose of the PBO are now under review by the standing joint committee on the Library of Parliament, the institution in which he’s housed. The committee, composed of a handful of MPs and senators, is supposed to determine whether the PBO is functioning properly—and if not, whether the problem is the legislation, the mandate, or Page himself. It could table a report to Parliament as early as June recommending changes. More than a few witnesses in committee meetings singled out Page as the problem; others argue situating the PBO within the Library was a bad idea.

Everyone wants the matter resolved quickly. At a time when Ottawa is spending unprecedented amounts of taxpayer money to stave off economic collapse, the man charged with scrutinizing the process is engaged in a fight to get an additional $1 million in funding for an office that’s already stretched thin and sidetracked by bureaucracy. One member of the Library committee, Bloc MP Gérard Asselin, complained in a recent meeting that his colleagues were just nitpicking. “Let us give him the funding he needs,” he said. “Let him do his work without getting in the way.”

Theories abound on whether Page is the victim of poorly drafted legislation, the target of a vengeful federal government, or digging his own grave by knowingly operating outside his mandate. But he is unapologetic. “I went to the OECD, and they said the Americans have the best budget office, bar none. Why can’t we be the best in five years?” he asks. “If that’s overstepping my mandate, then I’m earning my money.”

A Parliamentary Budget Officer was long overdue in Canada. Many countries, including the U.K., the U.S. and Mexico, have independent fiscal oversight bodies. In Canada, MPs are tasked with holding the government to account on spending matters, but they have neither the resources nor the expertise to challenge budget estimates coming out of the Department of Finance. With an independent body to provide its own analysis, however, MPs can have a better understanding of the numbers. Parliamentarians can also request the PBO investigate a costing issue, which was the case with the Afghanistan report.

The Department of Finance has been notoriously bad at predicting government surpluses and deficits. Former prime minister Paul Martin produced a number of surprise surpluses during his time as finance minister, which gave the impression the Liberals were either disingenuous or careless in handling public money. The Conservatives pounced. Stephen Harper led the charge during his 2006 campaign, modelling himself as a champion of transparency in government. The Liberals were embroiled in the sponsorship scandal and a loss of public trust, which meant Harper’s message resonated with voters. Once elected, the Tories wasted no time in including the PBO in the Federal Accountability Act and ushering it through Parliament.

At the time, Kevin Page was employed as the assistant secretary for macroeconomic policy with the Privy Council Office. The 51-year-old has spent nearly three decades toiling behind the scenes for the Department of Finance, the Treasury Board Secretariat and the PCO. He never intended to be an economist. Growing up in Thunder Bay, Ont., his main interest was sports. He bounced between science, criminology, math and economics at Simon Fraser and Lakehead universities, and later earned a master’s degree in economics from Queen’s in 1982.

Don Drummond, now chief economist at Toronto-Dominion Bank, hired Page as a price analyst at the Department of Finance after he graduated. Other candidates had better grades than Page, but Drummond was impressed by how well-rounded he was. “I like when people have got some spark and imagination, and a broad set of interests,” Drummond says. Samy Watson, Page’s boss at the PCO in the ’90s, says the way Page dealt with people set him apart. “He was able to give fearless advice in a non-confrontational way,” Watson recalls.

Indeed, nothing about Page suggests controversy. Friends describe him as quiet, and say he has an almost Zen-like serenity. He’s never gotten angry with the kids he’s coached on various community sports teams, which includes a baseball squad for kids with physical disabilities. But he’s certainly no wimp. He’s gotten banged up more than once playing hockey. A puck smashed into his face last year, shattering bone below his right eye. Doctors installed a titanium plate.

Despite his qualifications, Page wasn’t particularly interested in the PBO job when a headhunter first approached him. He was struggling with the death of his 20-year-old son, Tyler, who was struck by a train a few months earlier while walking home along a railway line after being at a bar with friends in Perth, Ont. “I actually talked to him before,” Page says. “I remember saying, ‘Be careful.’” Page and his wife, Julia, later set up a bursary in Tyler’s name at Algonquin College’s Perth campus, where he was a masonry student, and the family hand out the awards themselves. “The train goes right behind the school. You’re there handing out the awards, and the train just goes flying by,” Page says. “That’s life.”

But after some arm-twisting, Page decided the job was worth investigating. He quickly developed a few headaches. “I was concerned about whether it was set up for success or failure,” he says. “I had concerns about how it was resourced, and how much interest there was in creating it.” The mandate is large and the budget, $1.8 million, is small. A lot of time passed between the creation of the office in December 2006 and actually appointing someone to fill it in March 2008. And the Prime Minister can dismiss the budget officer without involving Parliament. Page also worried about how the PBO would operate. There was no clear consensus, but he thought a process could be worked out.

The idea of being a part of something new and significant also held great appeal. He took the job.

Trouble started after the very first report. Page held a press conference in October to release a study on the cost of the war in Afghanistan, during the middle of the federal election campaign. It was unprecedented for a federal agency to release such a potentially explosive document with no government sitting to defend its actions and no MPs around to ask questions in Parliament. “It makes clear he thinks he’s his own boss, because that’s not the convention,” says Sharon Sutherland, a former professor at the University of Ottawa and an expert on the machinery of government. Auditor General Sheila Fraser told the Library committee in April that she would never release anything during an election. Herb Breau, a former Liberal MP who helped define the role of the PBO, told the committee he was shocked. “I just about fell off my chair,” he said. “This is not what it was meant to be.” Page was setting the political agenda himself, Breau argued, rather than simply providing objective information for Parliament.

Page was in a difficult situation. The MP who requested the report, the NDP’s Paul Dewar, wanted it released. So did the other opposition parties. Page refused to release it until he heard from the Conservatives, he says, to avoid the perception he was playing politics. When Harper said he wasn’t going to interfere, Page took the report public. Had he held on to it until after the election, he could just as easily have been accused of interfering by hiding crucial information. Shortly afterward, the speakers of the House of Commons and the Senate, who oversee the Library of Parliament, wrote to Page’s direct superior, Parliamentary Librarian William Young, and reprimanded Page for his conduct on the Afghanistan report. They also told Young to further integrate Page’s role into the Library. He seems genuinely baffled at the idea he could have done anything differently. “My mandate and my mission is to provide transparency around budget issues,” he says.

Critics have also piled on Page for holding a news conference. Breau told the committee Page has no business talking to media, an assertion supported by former Conservative MP Boyer. “If anything brings additional pressure on this officer of Parliament, it is his intentional efforts to seek media and publicity,” Boyer said.

Page never wanted to have a news conference, but with no sitting Parliament to report to, he says he had no other option. “To simply release the report and then run away and hide under your desk would have been disingenuous,” says Ian Lee, director of the MBA program at the Sprott School of Business in Ottawa. The report did not make a case for whether Canada should be in Afghanistan or not—that’s not the PBO’s role. But speaking to the media is part of his job, Page argues. “It’s my obligation because I honestly feel like the media play a very, very important role,” he says.

Page attracted more attention when he delivered a fiscal forecast in November that predicted a deficit in 2009. Finance Minister Jim Flaherty announced a week later that the government would in fact produce a surplus. Page was right. In December, Page found out his budget was going to be increased by 1.5% for 2009—nearly $1 million short of the $2.7-million budget he expected. “My budget was cut after we talked about a different economic scenario. It looked more like interference to me,” he says. “It’s asinine to be cutting oversight in a period of time when you’re going into a deep recession, and adding a significant fiscal stimulus package. This is the time when you have to make sure there’s proper oversight.”

Page hasn’t been able to do all of the hiring he’d like—he let one employee go in March, leaving about a dozen staffers. He sent a letter to the prime minister in January, and another to Opposition leaders, claiming his independence was in jeopardy. He wrote that Young had told him not to produce work that could be seen to challenge the government. The prime minister didn’t respond, but the Opposition leaders have taken up the cause.

The accusation of interference is indeed serious, but it’s important to understand the context. The PBO is part of the Library of Parliament, not an independent office, and Page is supposed to report to the speakers of both houses through Young. The Library’s main function is to provide MPs with background information they can use in drafting bills. It does no oversight work. Naturally, the Library needs to avoid the perception that it produces biased information, and so it prefers anonymity.

The Conservatives may have thought it was logical to put the PBO in the Library, since both conduct research for MPs and doing so could save money. But the two roles are radically different. A budget office needs to be transparent and accessible to have credibility. It will unavoidably generate controversy, which the Library hates. Sutherland says the Conservatives may not have done enough planning when establishing the PBO. “They were not students of Parliament,” she says. Page’s grievances may be understandable, since he was bestowed with a lofty title and a broad mandate, but bound into another institution. (Each day Page comes into his office, he walks by signs reading “Library of Parliament,” not “Parliamentary Budget Officer.”) She also puts no blame on Young, since he’s only following the legislation.

Take the way the Library handles information: reports given to MPs are considered privileged unless the member decides to make them public. That’s how some would prefer Page to operate in response to requests. Power over information is given to parliamentarians in this model, and the PBO was set up to serve them, according to Allan Darling, a longtime bureaucrat contracted to write the job description and develop a framework for how the PBO would operate within the Library. “It’s critical to understand that if the government would have wanted something different, they wouldn’t have situated it in the Library of Parliament,” Darling says. The Library is supposed to strengthen Parliament and enhance the ability of MPs and senators to debate. “That’s what Kevin missed,” he claims.

But the confidential, solicitor-client-like relationship the Library follows would not work for an oversight body, according to Page. “Can’t do it,” he says bluntly. “You’d have no credibility.” Last summer, he consulted with parliamentarians and representatives from foreign budget offices and determined the best way to report is to make everything public, posting all reports on the office’s website. Following the Library model would create a quiet and essentially neutered watchdog. Some speculate that’s what the Conservatives want. Carleton’s Lee believes they had second thoughts once in power, and placed the position in the Library to weaken it. “This was the proverbial Canadian way: We’ll have a PBO if necessary, but not necessarily a PBO,” he says. Mulcair, the NDP finance critic, adds: “If he were as anonymous as the Parliamentary Librarian, the Conservatives would be able to dismiss him. He’s a flesh-and-blood character with huge credibility.”

Are the Conservatives trying to starve Page’s office? There’s no doubt in the minds of the Opposition, of course. “This is a government that likes to have only one voice heard—its own,” says Liberal finance critic John McCallum. “It therefore is seeking to undermine Page.”

But like everything else about the PBO, the issue is nuanced. Young insists Page’s budget wasn’t cut. He received $1.8 million for the first year, to increase in 2009. The amount discussed within the Library last year was $2.7 million. Page said the money had already been set aside, but Young says it was a hypothetical amount, never a guarantee. Page planned the development of the office based on that projection regardless, so the 1.5% increase in December was a shock.

Young told the committee in May that Page wasn’t singled out. The entire Library got the same 1.5% boost, and every division is strained. He had to reassess budget estimates in the fall when the economy worsened, and held meetings with senior managers to discuss how to reallocate. Page didn’t attend those meetings, even though he was invited. “He took the figure of $2.7 million. He refused to budge,” Young said.

Page doesn’t buy the explanation. “This is not really about a million dollars,” he says. “The resource issue was just a way to shut things down for a period of time and have this debate.” Indeed, the Liberals proposed a motion in the Library committee to increase the PBO’s budget in April, but members rejected it, since no conclusions on the PBO had been reached. Many observers argue it’s highly unprofessional for Page to even be discussing his budget publicly and not internally with Young, which could land him in contempt of Parliament.

Liberal MP John McKay has demanded answers from the government about the PBO’s budget during Question Period. The Conservatives say Young determines Page’s budget and they have nothing to do with it. Conservative MP Pierre Poilievre quipped last month in response to McKay, “I am prepared to draw that honourable member a map, so that he can find the Library of Parliament.”

Party members have said little about the PBO publicly. Finance Minister Jim Flaherty has been ambivalent in the media, saying it’s a new office undergoing “growing pains.” Conservative MPs Daryl Kramp and James Rajotte, who sit on the standing committee on finance to which Page delivers his economic reports, say his work has been helpful and he’s doing what’s asked, but don’t have much to say beyond their dealings with him in committee. Poilievre, who shepherded the Federal Accountability Act through the House of Commons, wouldn’t comment. The Prime Minister’s Office stated it has no input on the PBO’s budget or activities—and that it was best left to others to comment on Page.

But the Library draws its funding from a pool of money set aside for the House of Commons and the Senate, and the speakers of both houses have to approve the Library’s estimates before funds are distributed. The government could theoretically increase the budget for both houses and indicate that the money is for the PBO.

That may not be prudent now, with so much uncertainty about how the PBO should operate. A few options are being tossed around in the Library committee. The one most favourable to Page is to take the PBO out of the Library and make it fully independent, similar to the auditor general. “The spirit of the legislation was to create an office with independence,” Page says. “The Prime Minister referred to this position as being independent outside and inside the House, and the Conservative platform, going back to 2005, talked about an independent authority.”

But many of the committee witnesses so far—largely MPs and bureaucrats involved in establishing the PBO—seem to favour the Library approach. Page wrote to committee members suggesting they talk to MPs who have requested his services, Opposition finance critics who have used his economic and fiscal reports, and to governance experts. That hasn’t happened.

Some committee members, such as Conservative Senator Terrance Stratton, are openly critical of Page. Stratton favours the Library model, and is vexed at how Page handles reports on the economy, which have been more pessimistic (but more accurate) than the government’s. “He should not be saying to the prime minister, ‘No, you’re wrong,’” Stratton says. “Because if you do that, you’re preaching gloom and doom.”

Some of Page’s colleagues are surprised at how hard he’s fighting. “He didn’t invite conflict at any point in his career. He’s never been a flashy or controversial person,” Drummond says. “I would think this has been very difficult for him on a personal basis.” Drummond has a couple of theories. One is that Page indicated during his job interview that this was to be his last position with government, which could be making him more fearless. He also wonders how Page may have changed after the death of his son. Watson, Page’s old boss at the Privy Council Office, sees a connection, too. “In some ways, losing his son made him even stronger,” he says.

Page largely rejects any connection. “I don’t think there is, other than realizing life is short and you want to make the most of it,” he says. He asserts he is simply doing the job as required, and more clarity on his role is crucial if the PBO is ever to be successful. What he finds most frustrating is that all of the attention on him right now is about process, and there is little discussion of the actual work, which even some of his critics praise as being exceptional. Page wants that to change, but he’ll have to wait until the Library committee finishes its report and a consensus emerges on the PBO. He realizes he could be ousted. Senior employees in his office say they don’t expect many to stick around without him. A lot of them took their jobs because of Page.

He had a chance to make his case in front of the committee in mid-May, breathlessly explaining why he needs full independence and offering no sign of regret for his style. Nothing was resolved, but Page provided a peek beneath his serene exterior, sounding agitated and sometimes avoiding answering questions directly. “Why did you have such difficulty in deciding to answer the question?” asked Liberal MP Ken Dryden, after two other members unsuccessfully grilled Page on whether he would release a report an MP deemed privileged. (He would.) “I wish I could do it over again, sir,” Page responded to Dryden. “But it would be the same answer.”