The position of the Parliamentary Budget Officer was created in December 2006 as part of the Federal Accountability Act.
It was a response to criticisms surrounding the accuracy and credibility of the federal government’s fiscal projections and forecasting process. At the time, some economists and parliamentarians were concerned that successive governments in the mid-to-late 1990s through the mid-2000s had shaped fiscal projections, overstating deficits and understating surpluses for political gain.
In September 2004, Ralph Goodale, the then Minister of Finance, commissioned a review of the federal government’s fiscal forecasting accuracy. Among the review’s recommendations was the creation of “an agency within government with a mandate to focus on the medium- to long-term fiscal implications of structural economic and demographic factors”.
The Conservative Party of Canada’s 2006 election platform went beyond what was proposed in that report. It committed to creating “an independent Parliamentary Budget Authority to provide objective analysis directly to Parliament about the state of the nation’s finances and trends in the national economy” and “ensure truth in budgeting”.
The proposed authority, renamed the PBO, was included in the Federal Accountability Act with a mandate that exceeded that outlined in the Conservative Party’s 2006 election platform. The Act included the costing of proposals falling within Parliament’s jurisdiction when requested to do so by a parliamentarian or committee, likely reflecting concerns about cost overruns in major government programs in the 1990s and early 2000s. The Senate further extended the PBO’s mandate to include analysis of the estimates at the request of committees mandated to study the estimates.
The Liberal Party of Canada’s 2015 election platform committed to making the PBO “truly independent of the government” and “accountable only – and directly – to Parliament”. The platform also committed to expand the PBO’s mandate to include “the costing of party election platforms”. These changes were included in the Budget Implementation Act, 2017, No. 1 and came into force in September 2017.