Article original on July 29, 2024
GGF’s Management and Workforce Monitor newsletter is taking a break in August, but here we share insight from Michael Wernick, the former clerk of the Privy Council and secretary to the Cabinet on the likely impact of the looming spending review.
High summer in Canada has been unusually calm compared to the past few years. Last summer, attention was dominated by wildfires and evacuations. And before that there were the pandemic years. Yes, there are still serious fires and infections but the air of emergency has dissipated.
Looking around, our politics lack the drama we have watched unfold in other countries in this year of elections. “A week is a long time in politics” is a phrase possibly misattributed to Harold Wilson that seems particularly apt given recent events in Washington.
But here in Ottawa, in the circles that pay some attention to politics and public administration, there is more of a sense of quietly waiting for the next big thing to happen.
One of those things is the American election but another is regime change in Canada, which is now highly probable but not imminent. With an election coming no later than October 2025, the opposition Conservatives under 45-year-old Pierre Poilievre have built and maintained a massive lead in the polls that would bring them government and a ‘Starmeresque’ parliamentary majority. The governing Trudeau Liberals approach their ninth anniversary looking beleaguered and bedraggled, with cracks appearing in party unity after an unsettling by-election loss in a Toronto stronghold. Fifty-three-year-old Trudeau has been starting to feel the first shoves toward the door by Liberals who hope that a change of leader will limit the electoral damage – and that was before Joe Biden’s move.
They may get their wish but for now Trudeau’s inner team continues to trust in their ability to turn the tide. They look for the sort of moves that in a game of Go flip lots of pieces, and try to attend to issues that are seen as their vulnerabilities. It is a long list.
The biggest challenge for an ageing government isn’t any specific issue or indicator, but rather a deadly combination of malaise and gloom about the country and fatigue with a now far-too-familiar prime minister. The mood for change is being effectively stoked by their opponents and armchair critics.
En savoir plus: Lettre d’Ottawa : diagnostiquer les éléments du syndrome du gouvernement fatigué
The Canadian public service now faces a long interregnum where it is simultaneously serving a stressed government running out of time as well as thinking about what the next one may ask of it. Compounding the challenge is that the public service is now seen by many observers as one of the problems.
The federal workforce has grown considerably despite modest dampening of operating budgets. There has been a related sprawl of programmes and entities by an activist government. Much of what the public has heard will have focused on failures in IT procurement and backlogs in transactional services. The state looks bloated and less effective. I no longer try to argue with the assessment. The view is now so deeply entrenched that it has entered the political realm of “something must be done”. Poilievre repeats a handful of concise slogans and “fix the budget” is one of them.
Time approaching for a deep pruning of the federal state in Canada?
The better argument to have from now to the election is about what “doing something” or “fixing the budget” should look like.
It won’t be through nips and tucks. The math doesn’t work. And I don’t think it will be through emulating American style pay-go legislation. I have a strong sense that apart from the election, the other big thing that we are now waiting for is a serious broad spending review of the magnitude of those in 1995 et 2012. Realistically that would be a multi-year undertaking that would have to be launched after the next election.
I share the view that one is overdue and necessary but I hope that we can do it better than in the past. My view is that there will be a unique window in the first years following the next election to pursue a serious “deep pruning” of the federal state that simultaneously takes on five overlapping issues:
- Bending the curve on the volume of spending
- Streamlining programme sprawl and complexity
- Reducing a bloated headcount in the public service
- Resetting fenceposts between our federal and provincial governments
- Enhancing productivity and long-term capability of the public service
Dealing with these issues separately will be far less effective than recognising the interactions among them and dealing with state reform as a complete package. The best path to a more effective and affordable federal government will be to integrate these five lines of review and recommendation.
Those of us who managed through previous eras of downsizing know that attempts to reduce the headcount will quickly run into choices among specific programmes, functions, occupations and locations. Just squeezing the operating budgets with a view to cut personnel usually causes collateral damage to training and chokes off hiring of new talent. Investments in technology are often deferred.
The notion that one can starve the state toward innovation is demonstrably wrong but keeps resurfacing. Any serious review of the federal state must attend to future capabilities and requirements, not dwell on the past. And that future is going to be about greater uncertainty and, at least in part, about the disruptions wrought by AI and climate change.
Applying the language of productivity in the public sector
As I have written elsewhere, the optimist in me sees opportunity in leveraging the current focus on productivity in our economic discourse, which has become a torrent of commentary full of angst and handwringing but light on solutions.
The opportunity to apply the language of productivity to the public sector would help draw attention to the importance of effort and investment in training, management acumen and leadership development. It would strengthen the case for investment in technology and tools; for embracing both the upside potential and downside risk of AI; for stripping out redundant process and reporting; for shedding unproductive assets; and for thinning out management layers. The public service that emerges would be smaller and less concentrated in the capital but could also be better trained and equipped. It could become flatter, more resilient and agile.
This deep makeover of the federal government should be of interest to both major political camps. In a sense the election would be a choice of which set of ideological and political preferences and values would then shape the review and guide the decisions that flow from it. Perhaps that is hoping for too much. Canada is not immune to populism and polarisation, and it is always much easier to offer simple answers and easier to block change than to achieve it.
But there may be a path forward. Conservatives could approach it as a way to roll back the intrusion of the state into the economy and society. Progressives could see it as a way to restore confidence in government as an instrument of good. Both would have a stake in delivering competent and effective government if they want to retain the confidence of taxpayers and voters. So, both camps might learn to care more about capabilities.
Every so often a deep pruning is needed. But I am reminded of the wise words of Chauncey Gardiner in the 1979 film Being There: “As long as the roots are not severed, all is well. And all will be well in the garden.”
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