Parliament’s financial and economic analyst.

The PBO’s mandate is to provide independent analysis to Parliament on the budget, the estimates and other documents, as well as matters of particular significance relating to the nation’s finances or economy listed in the PBO’s annual work plan; and at the request of a committee or a parliamentarian, to estimate the financial cost of any proposal that relates to matters over which Parliament has jurisdiction. Certain committees can also request analyses of the nation’s finances or economy or the estimates.

In the months before a general election, the PBO has an additional mandate of responding to requests from political parties or independent members of the House of Commons to estimate the financial cost of any election campaign proposal that the party or member is considering making.

By providing independent and non-partisan financial and economic analysis, we support Parliament with the goal of raising the quality of parliamentary debate on questions of public money and promoting greater budget transparency and accountability.

Many countries have established similar offices to provide economic and fiscal analysis to the legislature. The International Monetary Fund refers to such organizations as “fiscal councils”. The Organisation for Economic Co-operation and Development (OECD) – under which a network of PBOs has been established – refers to them as “parliamentary budget officials” and “independent fiscal institutions”. In Canada, there is one other office with a mandate similar to that of the PBO: Ontario’s Financial Accountability Office.

Analysis of the state of the nation’s finances

We provide analysis to Parliament on the state of the nation’s finances, which depends on the expenditures, revenues, assets and liabilities of the federal government. We focus on producing analysis that will be of practical use to parliamentarians in decision-making. Consequently, we are usually looking into the future to assess how the state of the nation’s finances will be affected by government decisions and economic trends.

Under this branch of our mandate, we publish semi-annual assessments of the government’s current and projected fiscal position and testify at the House of Commons Finance Committee. To provide a perspective of the sustainability of government finances over the long term, we prepare an annual report that assesses the fiscal sustainability of the federal, provincial and territorial governments, as well as the public pension plans.

These reports focus on how the nation’s fiscal position will be affected by policy measures, economic developments and demographic trends in the medium and long term.

We also publish analyses of other ongoing and future government expenses. For example, we have published reports on Federal Transfers to Provinces and Territories and the Fiscal Sustainability of Canada’s National Defence Program.

We also provide analysis of certain issues that are likely to impact the nation’s finances. For example, at the request of a parliamentarian, we provided an assessment of the Fiscal Impacts of Lower Oil Prices.

Analysis of the government’s spending plans

Each year, the government submits its spending plans and an annual economic policy statement (called the Budget) to the House of Commons. The government’s annual expenditure plans (called the Main Estimates) are submitted to the House of Commons for approval on or before March 1. Parliament will be asked to approve additional estimates (called Supplementary Estimates A, B, and C) during the course of the fiscal year to approve spending above and beyond that in the Main Estimates.

We provide Parliament with analysis of the Budget and Main and Supplementary Estimates to help parliamentarians understand what they are approving. Our quarterly Expenditure Monitor analyzes government spending to help parliamentarians understand how those estimates are being implemented.

We analyze whether enough funding has been dedicated to achieve the goals of certain projects. For example, we estimated the cost of the government’s proposed procurement of Arctic/Offshore Patrol Ships to show that Canada was unlikely to be able to obtain the planned number of ships with the funding it had allocated.

We also analyze general patterns in how the government allocates money. For example, we found that there was no significant relationship between a program’s performance and its funding through a review of Performance Budgeting.

The government can rarely achieve all its cuts through efficiencies. We provide analysis to help Parliament understand what cuts have been implemented and what impact those cuts are having. This information is primarily provided through quarterly reviews of federal program spending.

Analysis of trends in the Canadian economy

The government’s finances are linked to the performance of the Canadian economy. To help Parliament make informed financial decisions, we provide independent analysis of trends and developments in the Canadian economy. This information is provided primarily through our semi-annual economic and fiscal outlook and testimony at the House of Commons Finance Committee, as well as occasional updates. We also provide Parliament with information on trends in the labour market through our annual labour market assessment.

Estimation of the financial cost of proposals within Parliament’s jurisdiction

We also estimate the cost of any proposal within Parliament’s jurisdiction upon request from a parliamentarian. Many of our reports respond to requests for an estimate of the financial cost of a government proposal, such as to estimate the financial cost of extending Canada’s mission in Iraq.

Some costing questions are really directed toward estimating the magnitude of a liability. For example, we were asked to estimate the cost of remediating Canada’s contaminated sites, which represents a major liability for government. Other questions seek estimates of the magnitude of a missed opportunity or problem. For example, we have also been asked to estimate the revenue lost as a result of failing to address international tax evasion.