Transcript
[Music] Amanda Lang : Welcome to the business of government, where we look at how our government functions in Canada, its shortcomings, and yes, its strengths.
This week, we’re talking about the quality of the Civil Service, the people who actually do the work of putting policy in place and, in theory at least, the ones who stick around and build expertise on the various working parts of government. Politicians, of course, come and go, and our civil servants are supposed to be the permanent residents. They’re the ones that elected officials rely on for advice and guidance.
But is it our imagination or has the quality of the Civil Service deteriorated over time? One thing we do know is that it’s bigger than ever, but is the knowledge base as strong as it needs to be? So today, we’re asking the question, where are the experts? Michael Wernick was Canada’s top civil servant. He was Clerk of the Privy Council from 2016 to 2019.
It was impressive, uh, and provinces would say it came at a cost to other governments, uh, I think. But are you—but they’re, you know, they—they have their answerability to their voters as well. Any provincial Premier is free to raise income tax, or sales tax, or corporate tax, and make up a difference. Do you worry that that kind of, uh, focus on fiscal balance is missing these days? Does that concern you?
That’s a political—that’s for, you know, that’s for the 2025 election. If people want a government that’s, that’s, uh, running small surpluses, they should vote for one. I don’t think it really matters whether that government is, you know, running at 15 percent of GDP or 13 of GDP. Um, you know, we have to make decisions about what’s important to Canadians, whether it’s health transfers or, you know, bulking up defense spending for a more dangerous world, or, you know, better infrastructure in our cities. Uh, you know, politics is about choosing.
One subject that has gotten a fair amount of attention lately has been the size and quantity of consulting contracts, and I know you’ve written about this. Um, you’ve obviously had lots of time to be involved in this kind of thinking around these things. What’s your—is it worrisome that we seem to be outsourcing, uh, knowledge and decisions in this way, if I can put it that way?
Well, as I told the Parliamentary committee, I’ve never seen management consultant firms play a role in policy. I’ve seen lobbyists, I’ve seen special interest groups play a role in policy, but never management consultants. They basically are in the area of service delivery, operations, and transactional kinds of things. They bring expertise from working with private sector clients, you know, in the financial sector, or telecom, or services, or tech. Technology is changing so quickly, you know, we could talk about the arrival of cloud computing and social media and AI. The idea that the public service could keep up all by itself is just indefensible. You need to bring in outside perspective and expertise. Some of the antidote to that, you know, mentality of “Well, this is the way we always do things,” is to find out how it’s done elsewhere. So I think, well-used, they can play a very positive role in keeping the learning software going.
If people are worried about a dependency on outside firms, then my answer would be: What are you going to do about it? And I would double the investment in training and leadership development so the capacity, you know, in-house is made stronger.
One thing that I have heard is that there’s a reliance on outside management, outside views, consultants to, uh, to reassure, if you will, that there is—there’s sort of a lack of confidence inside departments that—that they have the information. I don’t know whether that’s a political lack of confidence or a bureaucratic one, but does that resonate with you at all? Does that have anything—?
I said that in my article. It cascades down that, um, Treasury Board ministers and specific ministers, um, often are a little skeptical of public service advice, especially about costing and about, you know, about implementation. They—they do seek reassurance from, you know, a “Good Housekeeping seal,” to use an old metaphor. Uh, and that’s a common reflex by ministers, and I don’t think ministers should be expected to, you know, depend 100% on public service advice about these things. Um, so—but it cascades through, you know, into the public service leadership as well that, um, you know, it’s good practice to use outside auditors.
It’s good practice to, you know, to bring in external legal consultants, uh, you know, to check on, on, uh, you know, the advice that’s been given, so they can play a complementary role to internal capacity that can actually be helpful. It—I guess what seemed surprising to many is that the, uh, the sheer dollar volume of consulting contracts rose as the bureaucracy, uh, swelled as well. In other words, we have more people on staff and we’re also outsourcing some of this, uh, this work.
Well, as I told the committee, it’s not a zero-sum—it’s not a teeter-totter. It just means there’s more work. Uh, there’s more projects at a faster, a larger volume at a faster pace with shorter deadlines. So there’s more work for everybody—more work for public servants and more work for external contractors. If you want to slow it down, then you have to slow down the pace of work and—and make decisions about, well, “This is no longer, you know, urgent,” or “We’re not going to do this anymore.” Those are hard decisions to make.
They are. I’m curious for your view on that—that relationship between, uh, the, uh, the political side, so the minister, if you will, and, uh, and the civil service. I mean, you alluded to this, that there can be sometimes a little bit of, um—you didn’t say tension, but I’m going to say tension between the two. Is that relationship working for the most part as it should, or is there something we could do to improve it?
I think it generally works quite well. And again, the evidence is things get done, and this is a successful country. And it, you know, it is an open, transparent, democratic country that ranks very highly in all the governance measurements around the world. Um, so, basically, you know, evidently something is working. You can end up with pair bonds where you have a, you know, a difficult relationship—I talk about this in my book. Sometimes it’s the minister, the chief of staff, sometimes it’s the senior official, and it’s really important at the top level, you know, the 80 or so senior leaders at the top of a pyramid of over 300,000 people are the ones that spend the most time with ministers. That having a good trust and working relationship is essential.
One of the suspicions I think you’d find most of your fellow Canadians harbor is that there is bloat inside departments, that if we could just get in there and simplify, and, uh, you know, that there’d be tons of cost cuts available. Uh, are you here to say that that work does get done and—and what’s available does get cut? Or do you think there is still some room in there for, uh, for more leanness or efficiency?
It’s always worth trying to do better and be leaner, and sometimes, you know, a broad spending review, uh, you know, will—will help. Uh, the hardest argument to make, though, is we need to make an investment to do better. We, you know, we need to replace the I.T. system, and it’s going to cost you before you see the return.
That’s a very difficult argument to get approval for, and so, uh, if you really want, if you want to go at that, you also have to be prepared to make investments in training, in new technology followed. That’s, you know, that’s private sector practice. You spend money on tools and technology and training. And I’d like the public sector to do that as well. There is a perception, even when some of those investments are made, and you know Phoenix is the, the one that comes to mind, it’s sort of the famous one, but there’s this perception that we don’t do a good job, whether that’s implementing a big project, whether that’s procurement over time.
Again, how do you reframe that for us? If, if you want to, is there another way? There’s no way to defend the specific incidents, uh, but you know, IT project failures are rampant in the private sector as well. It is, it is a tough thing to do and to do well. Um, and you know, I could finger point to other examples, you know, in the private sector.
The risk tolerances and the cybersecurity risks associated with the public sector make it, you know, doubly hard in some ways. Um, so, uh, clearly, um, we just have to keep working on, you know, new technologies, whether it’s, uh, you know, Zoom-based work platforms or what artificial intelligence is going to do to, you know, to some of the service delivery and so on. Um, just, you know, if I can go back to, you know, it’s worth trying to make the operations of government leaner, but you’re not going to balance the budget on that.
You know, overwhelmingly, what the $400 billion the government, federal government will spend this year will go to are transfers to provinces and transfers to individuals. There are six big programs that account for about two-thirds of the dollars. So you know, you could, you could cut the public service in half, you would save $20 billion. It’s not going, you know, so it’s worth doing because better outcomes and better services and better policies, you know, are the result. But it’s not going to be the key to fiscal balance. That’s a fair point, that it’s, it’s not the big budget item, and maybe we shouldn’t pick on it. You’ve alluded to the fact that our government functions well relative to others. Are there countries that you would look at in comparison and say we should emulate?
Are there any other countries out there or functioning governments that you think get some things better than we do? There are always examples to learn from, and I participate in a lot of international forums. But I kind of get tired of hearing about Singapore and Estonia because, like Estonia’s one million people in, you know, in an area smaller than Metro Toronto. So, uh, you know, we’re a big country of 40 million people spread across six time zones, and we are a federation in which we have, you know, multiple layers of government. So there’s a limit to how much you can take from England or Finland or Germany. But, you know, it’s always worth trying. And of course, the other piece of this that, uh, maybe you don’t think there’s any issue, but I guess my question would be if there’s more we should be doing on attracting and retaining, uh, the best and brightest. And I guess maybe it is rose-colored glasses, Michael. It’s possible.
I, I mean, I was a child in the 1970s. It felt as though maybe the quality is the same, but the respect people had for our civil servants, uh, was phenomenally higher. I don’t think that’s in any dispute. They were just among the most respected practitioners out there. And that has changed. And I, I can’t help but wonder if that doesn’t actually have that kind of vicious cycle effect where then you don’t attract the same caliber of people.
Maybe also true in the political realm. I, I never, I mean, the evidence is I never had trouble attracting good talent, uh, and there were people from law firms and private sector firms and universities willing to come in and spend some time in government. They may not want to devote their entire career to it. I’m an advocate of more interchange. It’s a good idea to have people crossing from the private, public, and not-for-profit sectors for a period of time and learning about, you know, about what it’s like on the other side. We only do handfuls of that a year. We should be doing probably 100 to 200 interchanges every year. And then people go back to their private sector careers or they do their government job with a lot more awareness of the rest of the rest of Canada.
There is, um, when you do get those successes, uh, especially people who are bringing special knowledge, special experience, there’s this perception. And again, we can find pockets in the private sector. So maybe it’s not fair to pick on government, but it’s a super important service for all of us. So I’m going to pick on it a little bit. There is this impression that the kind of big ideas, the fast-moving people get slowed down, that there’s a weight to, uh, to the system that stops things from happening the way they might as fast as they might or at all. Any truth to that? Well, you work in an environment with very different risk tolerances, as I talked about. So definitely, and you work in a place where authority and decision-making is far more distributed than it would be in, you know, the top floor of a corporate office tower, where you could walk around to five people and get a decision.
And there’s this feedback there. So, you know, managing at the top levels of the public sector is far more difficult. Um, you know, and and so, uh, but, you know, my experience is that that’s the challenge and that’s the reward. And, you know, being an innovator and a reformer in the public sector, uh, is a very rewarding career. You know, one of the things, um, we spend less time on in general is thinking about innovation in services. Um, although companies do it, of course, by way of their own business models. Do we innovate enough in the delivery of government services? Is that a constant process as well internally? Well, I mean, there were no iPhones in 2007, and now people do all kinds of things on apps. So, you know, evidently, a lot of service transactional services have migrated to the internet, to, you know, interactive websites, to, you know, phone apps and so on. And that will continue, uh, you know, as AI-driven chatbots, you know, become, you know, frontline services and so on. Blockchain will affect, uh, you know, payment systems and so on.
So, there’ll be a constant wave. I don’t think the public sector can ever be the first mover because of that, you know, that risk tolerance and IT failure in government, you know, is something that can end the career of a minister or, you know, a senior official. Uh, so that the art in it is spotting things that are happening in the private sector and the technology world and saying, okay, now how can I apply this to, you know, to the business of the service that I’m managing? And that’s a constant, uh, effort by the public sector, starting from the position that you think things are pretty good, uh, because I don’t want to make this next session, this question, sound like I haven’t been listening. I think you think that our government functions pretty well and the bureaucracy works. What would you put on a list of things that would improve it that wouldn’t, that would make it even? I don’t want to be misunderstood. There are lots of things to attend to, you know, information management within the government is a shambles, and I told the Parliamentary committee that very directly. We do, you know, the public sector does not invest enough in training and leadership development, and I told the Parliamentary committee that directly. There are obviously areas of service that, you know, that need to be fixed and corrected when problems are detected.
I’m not making the argument that government is perfect. I’m making the argument that it learns and adapts and moves forward, and more attention to how it works, especially how it works internally, is very, very welcome. I’m glad you’re doing this series. Um, you know, it is so important to the security and prosperity of, you know, Canadians that we should pay more attention to how the public sector works and also occasionally admit that it’s getting it right.
Well, I, I, I get more irritable with all the commentary which kind of trash-talks the country as if we’re some kind of failing Stalinist Gulag when all of the evidence is we’re one of the most successful societies and countries in the world. Uh, you know, both in terms of prosperity and quality of life and inclusion. Uh, there’s a whole other theme we could talk about, about, you know, that nostalgic Public Service of the 1970s and 80s was run by white males, you know, and there’s been an arc of inclusion to bring women into leadership roles.
Uh, you know, uh, the public service I joined, you could lose your security clearance for being gay, uh, and that’s the language of the time. Uh, a lot of effort to catch up to the diversity of a country where a quarter of Canadians were born outside this country. You know, I could go on. Uh, you know, the public service now is 55% female, and half of the leadership ranks are female. I don’t think we want to go back to some nostalgic time, you know, of old white men sitting around the Reno Club. Michael, some of the time it feels as though people think, you know, you could just get rid of the government, uh, it’s not playing this particularly useful role or it’s, it’s an encumbrance if anything else to this hard-working private sector that wants to get things done. Uh, what’s the reality in your view of that?
But the reality is that private and public sectors are completely co-dependent. I mean, there would be no public sector if there was no growth and income and wealth to tax to pay for things. The lesser-known part of it is how much of a private sector growth and innovation comes from government. Uh, you know, there’s some obvious parts to this that we tend to only think about, you know, from time to time. Uh, you know, the Coast Guard and Border Services and the Seaway authorities make commerce possible for a trading nation. It’s 250 billion dollars a year through a ports, three billion dollars a day across the Canada US border as we learned during the pandemic, um, you know, the government procurement is important to, you know, the demand and the prosperity of all kinds of businesses across Canada.
Uh, I think the least known one is how much innovation came out of the public sector, either you know, government research labs or government research grants. You know, the entire consumer electronics industry came from alkaline batteries, which were just, you know, invented at the University of Toronto.
Everything on a smartphone came from the public sector: the Internet Protocol, the HTML code, the wireless protocol, touch screens. Siri started with a government grant. The Google search engine, you know, started with a National Science Foundation grant. There would be no Apple, no Google, or Tesla without the seed money and the risk-taking by the by the public sector. The entire fracking industry came from U.S. Energy Department grants. The pharmaceutical industry, you know, comes from, you know, medical research grants and university research. The grains and oil seeds industry comes from experimental farms and, you know, government research, and so on. There’d be no biotech. I could go on and on.
Uh, so I think it’s better to think about the interconnection and the co-dependency, uh, that, you know, for Canadians, when you have a strong public sector, you have a strong private sector, and vice versa. And it is something that Canada does better than many other countries. I think it’s such an important point to remember, uh, to get the kind of net benefit of having a government that’s functioning well and plays these important roles.
I guess the pushback would be, you know, procurement is an interesting one. You actually often hear, and maybe it’s our tendency to focus on those negative stories—and by our tendency, I mean journalists’ tendency, uh, perhaps—you hear about, you know, companies that can’t sell into government, that government is too risk-averse, that their procurement policies, you know, don’t favor, uh, new products, these kinds of things. Do you think those are at the margin? Do you think, for the most part, they—the importance of that purchasing power—outweighs any of those complaints?
Well, I mean, the complaints are probably coming from unsuccessful bidders, which sounds a bit unkind. I mean, procurement is a very complicated process, but it’s carrying all kinds of objectives, and value for money is only one. Politicians have loaded it up with regional development and supporting small business, promoting Canadian Champion companies, and, you know, tracking, uh, greenhouse gas emission targets, and, uh, supporting equity-seeking groups to build businesses. And I, and I can go on and on. There are a lot of layers to procurement policy, and because we’re an open trading nation, it has to comply with, you know, our trade agreements with our partners.
So, you know, it’s difficult to make procurement processes work fast. The ones that get attention are the big, dramatic ones—like when we buy 88 fighter jets—but there’s a lot of routine public, you know, public service procurement that works very well and, you know, just isn’t really newsworthy. I think most people would agree that, at least optically, when we do buy fighter jets, we don’t do a good job of it. It takes too long, and it costs more than we thought, and we see a bunch of reversals of decisions. Is that a political problem or a bureaucratic one?
A bit of both. I’m not aware of any country that really is happy with its defense procurement system. The Americans aren’t, the Brits aren’t, the French aren’t, uh, you know, so, uh, it is a particular challenge. It’s a topic for another day whether, you know, defense procurement can be made to work better. Overall, though, the only other kind of complaint you would hear is sometimes government is taking up, of course, they’re crowding out, um, capital, uh, from other parts of the market. In other words, if the government wasn’t doing it, the private sector would do it. That’s not true of some things; literally, only the government can do some functions. But is there an argument to be made that when our government does get bigger in our economy, it is actually at the cost of the private sector?
Not at a macroeconomic level. Uh, you know, there’s no evidence of a shortage of capital, you know, for the private sector, um, and, and the public sector often fills in risk zones that private sector lenders are not willing to take. I mean, that’s why we have a variety of government credit institutions, uh, you know, like BDC, EDC, and Farm Credit, and so on, because the market isn’t fully, you know, fully fulfilling that space.
So, sorry, I guess the bottom line is, the message that you might share is that we should remember the benefits, the co-dependency, I guess, in a very positive way of, uh, both public and private sector—not two solitudes. I mean, the key point is, you know, the boundaries between what government does and, and what the private and not-for-profit sectors do—and let’s not forget the 80,000 Canadian charities and not-for-profits—is a matter for democratic politics to settle. We can pick people that would prefer things to be outsourced or privatized, and we can pick people that prefer they’d be, you know, delivered directly by government. That’s a choice we can make in a couple of years.
So, good to have you. Appreciate your time, Michael.
Well, thank you for your interest. I think, uh, you know, as I said, uh, peace, order, and good government is in the interest of all Canadians.
On the next episode of The Business of Government: Remember nudge policies? The use of behavioral psychology to help govern was a big change in the mid-2000s. But in a world of increasingly polarized views, does a nudge still work, or do you need something more like a sledgehammer? That’s coming up on The Business of Government.