Original post on September 18, 2023
Parliament has returned in Canada for what’s likely a final session before the election. If history is any guide, the government will find it hard to make progress before the election – and whoever wins will need to look afresh at public sector reform
The most memorable aspect of the summer of 2023 in Canada will likely be the impact of extreme weather events. Time will tell if this was an outlier or the first of many such summers as climate change continues. The images of skies turned orange from forest fire smoke, of walls of flame advancing on evacuated towns, and of flooded fields and streets may linger. My own home city of Ottawa experienced two tornado warnings, a rarity in these parts, following on two major winter storms, which are not.
It was a brief off season for conventional politics and a welcome respite for many public servants after the serial dramas of pandemic, a fierce debate around hybrid work, and a two week strike in April. Issues that had been swirling in the spring, such as the invocation of the Emergencies Act, foreign interference and use of management consultants largely faded from view. Some will return as a criminal trial get underway regarding the occupation and an enquiry will begin on foreign interference now that agreement has been reached among the political parties on its mandate and leadership.
Parliament resumed on 18 September for what will be the final innings before an election that will come in October 2025, or perhaps sooner in some scenarios. The cabinet benches have been shuffled and refreshed, but the context has changed. There is a growing sense that the governing Liberals are in deep trouble, trailing substantially in the polls for the first time, with time running out on their chances of a comeback.
There are many explanations being offered by the pundit class for the Liberal slump – the return of inflation and interest rates that make home mortgages more expensive or a more generalized sense of economic insecurity would be the main contenders. Housing is apparently the new top of mind issue for Canadians, especially younger families. Perhaps the most plausible is Tired Government Syndrome, as the prime minister approaches a ninth and tenth year in office. Polling suggests that most voters, regardless of party preference, think he has simply reached his best before date.
I was at the centre of government for the final chapters for PMs Mulroney, Chretien, and Harper. The end days of a long serving government’s mandate present particular challenges for the public service that supports it and sap the morale of political staffers in fragile employment. So too do the successor governments that result when the incumbent party decides to change leader. John Turner, Kim Campbell and Paul Martin presided over unsuccessful short-lived sequels to their predecessors.
The Trudeau government will now struggle to reconcile conflicting instincts and objectives. Ministers will be impatient to get things done – either to complete and implement initiatives or to launch new ones. They will be keen to get away from Ottawa and announce things. But the government has struggled to take decisions. Projects have languished and vacancies have accumulated.
The shifting sands of politics
From now on, remaining time to move legislation forward will rapidly diminish like sands in an hourglass (to borrow a pre-digital analogy). And more importantly the financial context has shifted against them. During the pandemic Canada, like most countries, spent heavily on health measures and economic supports to businesses and workers. Assisted by a rebound in revenues, the government was able to pour substantial resources into programmes and litigation settlements and respond to pressure to transfer more money to the provinces for health care. The last few years saw an unusual surge in hiring in the federal public service, which is now about a quarter larger than when the Trudeau government took office.
One effect of the fiscal context is political. The Liberals are vulnerable to being framed as having lost control of the country’s finances and will be looking for ways to counter. They cannot just spend their way back to popularity and will need to be more selective. Nor can they do much to increase revenues without paying a high price politically. A first modest step to signal fiscal prudence was taken in the March 2023 Budget. It is unlikely to be the last word as there should be two more Budgets before the election.
Read more: Canadian government spending cuts being ‘rushed’, warns union
The other effect is on the public service. It has been a decade since the last serious exercise in spending cuts – Stephen Harper’s Deficit Reduction Action Plan. Many of the current middle and senior managers have only known abundance and lost the muscle memory of previous cohorts who managed through a series of spending reviews over a couple of decades. It seems everything now has to be learned again for the first time.
What remains to be seen is whether the fiscal imperative can be linked up to the growing sense that the public sector needs a serious upgrade. It is difficult to be optimistic if you lived through previous periods of austerity. The central agencies that drive these exercises tend to become very short term in their thinking. The go-to response is to cut the very things that could improve long term capabilities – training, leadership development, technology, and the hiring of energetic new talent. The exercises usually shy away from anything that will irritate external stakeholders and aren’t designed to tackle more complex structural issues such as job classification, the number and role of middle managers, the role of geography in hiring and layoffs, the relationship between common service providers and individual departments and agencies, and more.
Nevertheless, it will be worth trying to draw out the political parties on what they intend to do to improve how government works and to call out simplistic platitudes and gimmickry from all sides. My view is that whatever policy platform Canadians choose next time, the politicians have a rendezvous coming with public sector reform. There was a flicker of debate in the current New Zealand election, and there are a range of initiatives in the UK and Australia worth a look, so perhaps better is possible here in Canada.