0. Canadian PBO Spending Analysis
6 June 2017

1. Our role: fiscal analysis
Provide independent analysis to Parliament on:
the state of the nation's finances
provide independent analysis to Parliament of the government's estimates
Upon request, estimate the financial cost of any proposal

2. PBO priorities vis-à-vis OECD Principles
OECD Principles for Budgetary Governance
Source: OECD

3. PBO priorities vis-à-vis OECD Principles
(1) Enabling macro-fiscal oversight
Budgets should be comprehensive, accurate and reliable
Fiscal policy should have clear, credible and predictable limits
Budgets should be aligned with the medium-term expenditure framework
Budgets should account for longer-term sustainability and fiscal risks
(2) Promoting micro-fiscal scrutiny
Budget documents and data should be open, transparent and accessible
Budget execution should be actively planned, managed and monitored
(3) Quality budgetary allocation
The capital budgeting framework should be coherent, enabling cost-effectiveness
Performance, evaluation and value for money should be integral to the budget process

4. OECD Principles for Budgetary Governance
(1) Macro-fiscal oversight Budgets should be comprehensive, accurate and reliable
Tools:
Preferred option: independent fiscal forecast
Detailed
Control of input data and assumptions
Internally consistent
Time intensive
Next best: analysis of exogenous forecasts
Adjust and interpret Government’s projections
Examine and contextualize Government’s projections
OECD Principles for Budgetary Governance

5. Macro-fiscal oversight OECD Principles for Budgetary Governance
Blended analysis based on data availability
OECD Principles for Budgetary Governance

6. Macro-fiscal oversight
Scrutiny of exogenous projections
Operating spending
Pension provisions
Adjust government estimates using known common forecast variables:
Interest rates
Accrued service

7. (1) Macro-fiscal oversight Fiscal policy should: have clear, credible and predictable limits; be aligned with the medium-term expenditure framework
Source: OECD and PBO

8. (1) Macro-fiscal oversight Consistent tracking of key political fiscal commitments

9. (2) Promoting micro-fiscal scrutiny Budgets should be open & transparent; budget execution managed & monitored
Tools:
Policy/program costing
Quarterly in-year expenditure estimate updates
Links accrual and cash accounting domains
High frequency monitoring of budget objectives
Fiscal data exploration tool
Browseable
Searchable by function
Aligned to cash-based vote structure
Accessible interface

10. (2) Promoting micro-fiscal scrutiny Policy/program costing
OECD Principles for Budgetary Governance
Trade agreements
Defence procurement
Children’s benefits
Infrastructure

11. (2) Promoting micro-fiscal scrutiny In year modeling of existing financial data

12. (2) Promoting micro-fiscal scrutiny Web applications
Budget Tracking Tool
Exploratory tool
Data is visualized, malleable across categories
Built using existing accounting data
Previous form: Integrated Monitoring Database
OECD Principles for Budgetary Governance

13. (3) Quality budgetary allocation
Capital budgeting
Infrastructure program monitoring and forecasting
Economic impact estimation
Performance & value-for-money
Target and outcome tracking
Aligned to program framework
OECD Principles for Budgetary Governance

14. OECD Principles for Budgetary Governance
Conclusion
Macro-fiscal
Independent forecast, supplemented by analysis of government data
Contextualize data relative to fiscal targets
Micro-fiscal
Policy costings on high priority spending items
Provide coherence to various financial documents
Use web tools to enhance accessibility, relevance and depth of program data
OECD Principles for Budgetary Governance