Friday, March 12, 2010

2010 Budget: The Transparency of the Parliamentary Budget Office

Recently the Parliamentary Budget Office released a report critiquing the government's budget, and within its pages is a quote from an IMF paper that was used to argue for greater transparency, but without including context, the PBO intentionally or unintentionally gave a slightly unfair impression of the government.

In the Parliamentary Budget Office (PBO) report titled Assessment of the Budget 2010 Economic and Fiscal Outlook, the current government is referred to again and again as being non-transparent. As a result of the government refusing to provide certain assumptions and tax estimates, the PBO diverges significantly in projections and is unable to fully analyze the 2010 budget. In a paragraph commenting on this point, there is a selected quote taken from an International Monetary Fund (IMF) working paper that is worth noting. On page 1 of the PBO report it states:

"This lack of transparency was highlighted in the 2005 Review of Canadian Fiscal Forecasting and IMF staff have also noted that the Government “could enhance the understanding of budgetary forecasts by providing more information on the assumptions and methods underlying the translation of the macroeconomic outlook into fiscal projections.” A complete assessment of the fiscal outlook presented in Budget 2010 requires this additional information."
With the PBO's report using the IMF quote in that phrasing creates the appearance that the IMF singled out Canada for not making additional information public, that it is somehow not a common practice; however when one references the IMF paper in question a different impression can be garnered.

The IMF working paper How Do Canadian Budget Forecasts Compare with Those of Other Industrial Countries includes a small phrase prior to the quote which the PBO left out, and though minor does lend itself to some interesting context. From page 3 of the IMF paper:
"As is the case with many other countries, Canada could enhance the understanding of budgetary forecasts by providing more information on the assumptions and methods underlying the translation of the macroeconomic outlook into fiscal projections."
As said previously this is a minor difference, but it does, through context, lessen the importance of transparency that the PBO had impressed through out its report and in subsequent media interactions. Canada is not the only country refusing to make certain aspects of its projections public, and as such maybe there is good reason for it not to.

Though transparency might be desired, the lack thereof is not uncommon. In using a quote from an IMF paper to argue for greater transparency, without including context, the PBO either intentionally or unintentionally created a slightly unfair impression of the government.

I must conclude by emphasizing the Parliamentary Budget Officer Kevin Page deserves the utmost respect and in previous interactions has shown himself to be the most dedicated and efficient of public servants. It is only out of interest to this very minor selective use of a quote that this post is written.

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