Mostafa Askari, Sahir Khan and Kevin Page of the Institute of Fiscal Studies and Democracy (IFSD) at University of Ottawa are former officials in the Parliamentary Budget Office.
Change is difficult. It is particularly challenging in the deeply ingrained institution of Canada’s parliamentary system. In 2008, Canada’s Parliamentary Budget Office (PBO) was small, not well known and was threatened with budget cuts and shutdowns on multiple occasions. Not only did it survive, it now thrives. It’s no small testament to the need for fiscal transparency and the office’s success that its mandate was clarified and expanded in new legislation in 2017.
An important new addition was the costing of political parties’ platforms during the election period. The objective was to have independent cost estimates of policy proposals with an aim of informing voters. Campaign debates could then focus on the benefits and efficacy of policy proposals rather than the credibility of the cost estimates. Offices in Australia and the Netherlands undertake similar work with positive results.
The PBO’s new role has restrictions. It only costs individual measures and does not assess the overall credibility of the platforms’ fiscal plans (i.e. transparency, fiscal sustainability). Furthermore, the PBO cannot release a costing until the party announces the measure publicly and informs the office in writing that it can be released.
While we do not believe it is necessary to compel political parties to have their policy proposals costed by the PBO, we do believe this campaign period is an opportunity to assess the impact of the new mandate. So far, since the PBO’s estimates are considered unbiased and well-researched, there is positive pressure on all parties to have their proposals costed.
While political parties may feel some anxiety about this new mandate, PBO as an institution also carries risk. Election-platform costing is undertaken in a very compressed time frame and in a highly partisan electoral environment. PBO might find itself constrained in making comments to defend its work and reputation for fear of affecting the election process.
So far in this campaign, we have seen a number of proposals by different parties, and most of them have been costed by PBO. More will certainly be released in the coming weeks. While observers have raised concerns about the magnitude of the fiscal cost of some of the proposals, no one has questioned the objectivity of the estimates. In our view, this represents major progress in Canada’s election campaign process.
We believe there are a number of advantages to having all party proposals costed by one independent and non-partisan organization. Costing complex policy proposals is difficult and resource-intensive. Parties do not have sufficient in-house resources and expertise to carry out such costings. Even if they did, voters might not trust the numbers coming out of party war rooms as much as the work of a reliable third party.
In past elections, political parties hired private consultants with different levels of expertise to prepare or validate platform costings. (Disclosure: IFSD has done this, at no cost, for Ontario Progressive Conservative and NDP platforms.) As a result, there may not be full confidence that the estimates were reliable and unbiased. Costing by PBO, which has extensive expertise and experience in costing complex proposals, eliminates concerns about the reliability or bias in the cost estimates.
We also need to consider how voters and media will handle a platform that has measures costed by a mix of PBO and other third parties (i.e. parties shopping for costings). From the perspectives of quality and objectivity, should citizens and the media prefer PBO costings over party-generated estimates? Does it follow that platforms with a greater percentage of PBO costings (relative to party-generated) are preferable? Accordingly, we believe that PBO’s legislation and protocols should be reviewed after the election to consider if changes, in consultation with PBO, may be necessary to improve the process.
In this context, consideration should also be given after the election to have PBO release details of all costings used by parties including methodologies and numbers. This will promote transparency and policy development.
We believe that Canadians will benefit from a closing of the gap between the political narrative put out by political parties and the means to achieve those objectives. While some may consider this a constraint on traditional campaign strategy, it can only serve to enhance the legitimacy of a new government and the trust of Canadians in their state institutions. Canadians can be proud that they have an institution in the PBO that is considered reliable to do so – by all political parties.
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