May: The Functionary on PBO expenditure review recommendations

2025/08/30 Leave a comment

Good discussion of the PBO recommendations:

…WHY IT MATTERS
It’s about measurement and accountability

It introduces a methodology to track personnel spending using more frequent pay data. It separates projections for civilian and non-civilian staffing (military/RCMP included). It distinguishes head counts (actual people) from FTEs (work equivalent). This is critical because past cuts reduced head counts while FTEs actually rose.

It’s a baseline for expenditure review. It sets clear starting points for measuring cuts, which didn’t exist before. It allows tracking of whether the public service is truly shrinking under the expenditure review. It provides capacity for twice-yearly updates so parliamentarians can monitor progress.

It’s an operating split vs. a capital budget split. The government plans to balance the operating budget while splitting expenditures into operating and capital budgets.It creates an incentive to shift operating expenses into capital (childcare transfers, immigration programs, infrastructure) to make balancing easier. Without clear definitions, departments may label operating expenses as “productivity investments” and put them under capital.

There are risks for public-service managers. Operating budgets face greater restraint since balancing that budget is Carney’s fiscal anchor. There is uncertainty over what counts as operating vs. capital. There’s a need to deliver the same services with fewer resources. Previous cuts show departments often hire more permanent staff to maintain service despite headcount reductions.

POST-GIROUX
Whoever takes over, it will be temporary

Giroux’s term ends Sept. 2, five days after departments’ Aug. 28 deadline for proposed 15-per-cent spending reductions that will shape the next federal budget in October. He leaves with another 20 or so reports in the pipeline for his successor.

I wrote in July about the unknowns surrounding Giroux’s fate and the huge impacthe’s had on the office. At the time, the Privy Council Office said it was committed to appointing a “highly qualified individual” and noted the Parliament of Canada Actallows for an interim appointment in the event of a vacancy.

This week, it offered no timeline other than in to say “due course.” It didn’t say whether the position will be filled before the budget.

The only option now is a temporary appointment until the House and Senate return. A formal appointment requires approval from both chambers. Some suggest the government would prefer an interim watchdog rather than have its moves scrutinized by someone with Giroux’s experience and track record.

Source: The Functionary

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Globe editorial: Ottawa’s AI push must translate into savings [translation]

2025/08/21 Leave a comment

Other areas ripe for AI use are the overhead functions of HR and Finance:

…That is a good thing. Translators are no strangers to machines; they’ve been using computer tools for decades. But they have often warned that the programs are imperfect and nowhere near good enough to replace them. “At times, a ChatGPT translation will make sense,” Joachim Lépine, co-founder of LION Translation Academy in Sherbrooke, Que. wrote in a LinkedIn post this month. But “’sometimes useful’ is not good enough for high-stakes situations. Only humans have professional judgment. Period.”

However, new generative AI tools are rapidly improving in quality and are good enough to competently handle routine translations of mundane texts such as policy documents, press releases or memos. The more the programs learn from the language fed into them, the better they should become – although more critical documents such as laws and court rulings should continue to be handled by humans.

A centrepiece of the bureau’s rethink is its AI project, a program called PSPC Translate, which draws from the government’s data and language storehouse. It could serve as a bellwether for further government efficiencies and savings using AI. True success would be if the initiative translated into real savings and allowed government to slash the size of the bureau. 

Source: Ottawa’s AI push must translate into savings

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McLaughlin: This DOGE Won’t Hunt: A Canada-U.S. Comparison

2025/08/08 Leave a comment

Good analysis and recommendations on how to curb government expenditures:

“DOGE is not for Canada. Here’s why:

  • First, a DOGE-style, top-down process can only exist in presidential forms of government like America’s not parliamentary forms of government like Canada’s. Despite his ‘First Buddy’ status at the time, even the limited cabinet-style meetings Trump held with Elon Musk in the room degenerated into tense public disputes between Musk and cabinet secretaries.⁸ It must have been worse behind the scenes with shoving altercations being reported.⁹ Prime ministers strive to avoid that spectacle at all costs. It is the surest way to lose authority both with the public and within the government and caucus. [How many British prime ministers were there exactly in 2022?] DOGE would be a skin graft that would and should be be rejected by our system of governance. 
  • Second, DOGE was rushed and forced. It did not take into account vital missions or mandates of governing agencies. Witness the subsequent rehires to ensure key health or safety activities continued. It tried to squeeze in too much in too short a timeframe. Chaos resulted.
  • Third, DOGE evaded the law. DOGE-inspired lawsuits have made the process and results anything but orderly or complete. Judges have stayed some decisions requiring complete rehires of staff while others have proceeded. The result is a legal quagmire of confusion.
  • Fourth, it was talent-agnostic. It took little to no account, as far as can be seen, in retaining top-tier talent. It was ‘billboard budgeting’, announcing big across-the-board cuts in both funding and personnel without thinking through expertise or performance. Probationary hires, for example, were the first to go because they were the least protected by civil service rules and could account for early ‘wins’. But real skepticism exists as to whether it actually produced results.¹⁰
  • Fifth, it was run by a big personality and a bunch of tech nerds with no actual government experience and with no realistic, definable goals. At first, Musk said it would cut $2 trillion from the $7 trillion federal budget. Then, it became $1 trillion. Finally, he said DOGE would save $150 billion. In truth, the biggest cuts Elon made were to his own ambitions. Here’s what they say they have saved (as of time of this post). As you can see, the definition of “savings” is an elastic mouthful:

What Should Canada’s Approach Be Instead?

Here’s my list:

  1. Don’t try to do it all at once. Do it over time. A judicious application of time-limited hiring freezes for some public service classifications and employee attrition will get the headcount down. 
  2. Apply across-the-board cuts to get some results early, show seriousness, and secure political buy-in internally and externally that this is fair and not aimed at any one constituency. But don’t rely on these alone.
  3. Get out of actual program areas by making real choices about what is the role of the federal government in certain areas. Shrink government’s cost by shrinking government’s footprint.
  4. Resist starting up new boutique initiatives for headlines and stakeholders. They cost money and require more public servants.
  5. Combine public service reductions with deliberate productivity enhancements through AI and digital technologies.
  6. Conduct a root-and-branch customer service delivery assessment of programs to find efficiencies now. Ask these two questions: 1. What is the unit cost of delivering a particular service? 2. How many people, across how many departments, touch a service delivery or operational decision by the government?
  7. Bear in mind that new, different skill sets are needed in the public service and some hiring must still occur to enhance its overall performance.
  8. Set measurable goals for success that are both financial (balancing the operational budget, a stated government priority), and non-financial (better citizen service delivery results, improved labour productivity, etc).
  9. Create a process to do this that can be sustained between and over budget cycles, so it leads to a permanent reduction in the public service headcount. 
  10. Finally, hold ministers and deputy ministers accountable – politically for the former and financially for the latter – for results. That should get their attention!

Here endeth the lesson!“

Source: This DOGE Won’t Hunt: A Canada-U.S. Comparison

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Derek Burney: Serious government downsizing should start at the top

2025/08/07 Leave a comment

A mixture of some I agree with, some that he should know better given his time in government and heading the Harper transition team and others that are grounded in his ideological perspective. And while greater private sector perspectives and interchanges needed, not sure that previous experience justifies such confidence (without the extreme Musk/DOGE example):

“…Here are some practical suggestions:

1. As the government’s Chief Human Resources Officer has attested, there are too many senior executives in the public service, slowing productivity and creating workplace conflicts. Sharp cuts are needed to excessive ADM (Assistant Deputy Minister) positions and the government should consider eliminating one complete level of senior management — the position of Directors General. Superfluous positions like “Deputy” Director or “Associate” Deputy Minister — extra baggage causing sluggish performance — should be removed.

2. The Treasury Board Secretariat, ostensibly responsible for program management and controlling growth, has failed abysmally at its fundamental role and should be revamped and headed by an external business executive with a proven track record for efficient results.

3. All woke-induced prescriptions like DEI should be dropped, giving more exclusive value to meritocracy with clear descriptions of achievement goals and accountability for all senior public service positions.

4. The government’s faint-hearted effort to recognize the importance of artificial intelligence was to designate a minister with the responsibility but with few specific duties or resources. AI is the most significant technological innovation in more than a century. Implemented with appropriate guard rails to prevent misuse, Artificial Intelligence can reduce waste in government, sharpen technological innovation, improve productivity and expedite decision-making. It will require substantial investments in energy to serve new data centres, to update our electricity grid and develop new technologies. The Americans are moving at warp speed to maintain their global lead. Canada cannot afford to stand pat.

5. The military cannot be spared especially with the massive increase in spending it will belatedly receive. As the ranks were reduced in the past two decades, the ratio of enlisted personnel to officers rose substantially to 2.8:1 whereas the U.S. Marines is at 7.1:1. That trend undermines any notion that more funds will produce better performance. The current model of procurement is flawed with overlapping responsibilities among different departments and ever-lengthening overruns on delivery. The system should be outsourced to an independent tribunal with knowledge and experience relating to current technologies. Australia may offer a compelling model.

6. All governments in Canada should stop pandering to Indigenous groups with gratuitous expressions of atonement as in King Charles’ speech from the throne (written by the PMO/PCO), and at major events across Canada. Giving Indigenous communities real partnerships in major, national-interest projects would do much more for their well-being than sanctimonious verbal expressions of regret.

7. It is time to drive a stake through the climate hysteria that has stifled economic development for more than two decades. As Joe Oliver articulated cogently in these columns, public concern about climate change has declined dramatically in Canada. In 2022, 73 per cent of Canadians believed we were confronting a climate emergency. But now only four per cent say climate change is the No. 1 issue facing the country, according to a recent Leger poll. Many favour instead efforts to expedite pipelines to tidewater that “will bring economic growth, employment, energy security and funding for social programs or tax relief.”

Remaining vestiges of climate hypocrisy, including some in the current cabinet, stubbornly support unrealistic EV mandates and inconsistent wind-power farms that blight our physical environment. “Net-zero” targets are patently unrealistic. All are being rejected by the U.S. while it accelerates conventional energy development. Growing climate realism should give Canadian politicians the courage to implement energy projects needed to secure economic growth.

8. For serious downsizing, the government should assign the role to an external panel of five credible business executives with relevant knowledge and experience.

Prime Minister Mark Carney gained a spectacular victory in the April election (due partly to the relatively inept performance by the Opposition Leader and his campaign team.) Carney has about six more months to demonstrate that he can act forcefully on that victory. Otherwise, confidence and trust will evaporate as quickly as it did for his predecessor. The challenge begins in the government itself where he has unfettered control.”

Source: Derek Burney: Serious government downsizing should start at the top

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Savoie: Shaving department budgets won’t be enough to rein in federal spending 

2025/07/24 2 Comments

Agree. Full-scale program review, as per Chrétien/Martin, best approach:

…The Ottawa-based bureaucracy is loaded with policy and program evaluation units. One would think that they are always at the ready to identify which programs are failing and those that are long past their best-by date. Program evaluation units, found in all government departments and most agencies, have been missing in action, unwilling or unable to report that programs fail to deliver what they promise, for fear of casting the government in a negative light. 

The units report to the government, not Parliament, as they deal with access to information legislation and other transparency requirements. No minister wants to stand before the House of Commons or the media to explain why departmental programs are missing the mark or should be eliminated. Whatever the reason, the units are still kept busy turning a crank not attached to anything.

Instead of announcing reduction targets from above that generate countless meetings with the objective of identifying possible cuts that stand to cause minimal damage to departments, the Cabinet could go with a different approach, one that would have a longer lasting impact. The government could, for example, eliminate two management layers. There are, at the moment, anywhere between six and nine management layers in the federal government, which are costly, slow down decision making and, all too often, generate non-productive work. The Treasury Board could also eliminate 90 per cent of “associate” positions attached to senior management jobs, which have mushroomed in recent years, in part to get around wage freezes or to award promotions that would not otherwise exist.

The federal government is home to hundreds of organizations and programs. Rather than try to shave a 7.5-, 10- or 15-per-cent cut to existing spending with uncertain success, Cabinet should review all organizations and all programs to see which ones no longer meet expectations or could be eliminated with limited impact on Canadians. 

Government organizations and programs are the product of political decisions and it is incumbent on Cabinet to decide whether they should continue. The exercise would enable Cabinet ministers to ask pointed questions about government programs and operations. Decisions to establish and eliminate organizations and programs belong to politicians, and not to anyone else. If the goal is to restructure the expenditure budget, this is where they need to look.

The Carney government has unveiled new spending commitments to strengthen the national economy, soften the blow of U.S. tariffs and boost defence spending. Mr. Carney’s planned cuts will not generate the required savings to support the various new spending commitments. The government can increase taxes, such as the HST, or it can take a close look at its organizations and programs and decide which ones still square with its policy agenda. This calls for a genuine political review of programs, not a process of trying to shave spending on selected activities which, history shows, only offers temporary savings. 

Source: Shaving department budgets won’t be enough to rein in federal spending

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Krauss: Trump’s War on Science

2025/07/17 Leave a comment

Hard not to agree on the medium to long term impact. The age of ignorance…:

…The economic and military interests of the nation are best served by supporting a vibrant research culture in STEM fields like physics and biology. We need materials science and aerospace engineering research to develop new batteries and hardened materials for use in the military, as well as theoretical work in areas like quantum physics—which is vital not just for quantum computing but also for encoding sensitive messages. We need biological research in areas like immunology and genomics to protect against future pandemics. In short, the best and brightest scientists in the country need to be supported and encouraged to conduct curiosity-driven research—which produced almost half the current GDP of the nation within a single generation.

To do all this, we will also need to recruit the brightest minds from all over the world. Instead, the current administration seems bent on disallowing talented foreign scholars and students from studying and working in this country. In the past, many of these students—including Elon Musk—chose to stay in the United States after their studies ended and have created innovative technologies that have bolstered the US economy in myriad ways.

The culture wars in higher education have hurt both teaching and research, but the current policy of dismantling the government–science partnership that has helped drive US leadership in science and technology is worse. Leadership in these fields may soon pass to Europe—or, worse, to China. A great deal of damage has already been done, and it may soon be too late to fix it, as laboratories close down and first-rate researchers either leave their fields or move abroad.

Curiosity-driven science and research are crucial to the economic success of our nation. They must not be made subservient to political goals. It is worth remembering the words of Robert Wilson, the first director of the Fermi National Laboratory, which houses the nation’s largest particle accelerator. In 1969, when Congress asked him whether the particle accelerator would aid in the defence of the nation, Wilson responded, “It has nothing to do directly with defending our country except to make it worth defending.”

Source: Trump’s War on Science

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Carney’s plan to cut tens of billions in spending is tough but doable, experts say

2025/07/16 Leave a comment

Always interesting to listen to the assessments of previous clerks on some of the lessons learned:

….Mel Cappe, who served as clerk of the Privy Council from 1999 to 2002, a position that includes heading up the public service, said meeting those targets will be tough but doable.

“There’s somebody in the public who’s going to be outraged by the cuts,” he said. “This is going to require all ministers holding hands, saying prayers together.”

…But previous clerks of the Privy Council say it will be difficult for the government to avoid cutting staff because wages, benefits and pensions are such a large part of the operating budget.Leaning on attrition

In 2023-24, excluding one-time payments like back pay made after a new collective agreement was signed, the federal government spent $65.3 billion on salaries, pensions and benefits. That was a 10 per cent increase over the previous year.

“In 1995, the wage bill was so high that it was necessary to invest some money to facilitate people to leave by giving them cashouts,” Cappe said.

“If you are going to do that on a massive scale, you have to be prepared to see those costs up front. Because it will save you a lot of money in the long run.”

Michael Wernick — the clerk of the Privy Council from 2016 to 2019 — told CBC News that relying on attrition “doesn’t make any sense as a management strategy.”

“What happens if your absolute key cybersecurity expert retires next week? You’re not going to replace her?” he said. “If your aspiration is a serious compression of the numbers, then you have to be more mindful about it and you have to do layoffs and buyouts.”

Where you cut — rather than how much

One of the ways the prime minister has said his government will cut operating expenses is by looking for ways to employ artificial intelligence and automation.

Wernick says that approach will require investment in training and technology and that, like buyouts for public servants, comes with an upfront cost.

But both former clerks say the Liberal government can hit its targets and they have a suggestion for how it can be done.

“Stop doing some things, rather than an across-the-board cut,” Cappe said.

By going this route, staff no longer carrying out a given function can be moved to work on other government priorities. Wernick says cutting entire lines of business also prevents spending from creeping back up.

“If you don’t kill the program entirely, the pressure to restore it will come in almost immediately from the clients, from the mayors, from the caucus,” Wernick said.

Donald Savoie, an expert in public administration and governance at the Université de Moncton, said the government can be downsized without hurting service delivery.

“Let’s look at programs that we don’t need anymore, let’s look at organizations that we don’t need anymore,” Savoie said.

He said there is also room to cut the use of consultants and outside contractors, but Wernick warned doing so would cut off access to expertise. That can be mitigated, he said, by training public servants — but that comes with an upfront cost.

Trying to emulate Chrétien and Martin’s fiscal success

Savoie said Carney has two things in common with Chrétien that bode well for his cost-cutting ambitions.

The first is that unlike Brian Mulroney, Stephen Harper and Trudeau, both Carney and Chrétien had experience working in government well before securing the country’s highest office.

Savoie said that means Carney, like Chrétien before him, knows which levers to pull.

The other thing both men share is a mandate to respond to a national crisis. In the 1990s, Canada’s federal debt was so large compared to the economy that a third of every dollar collected in tax went just to service its interest payments.

“I think what helped Chrétien immensely in 1994-95 is Canadians were seized with a real crisis,” Savoie said.

“So Canadians said: ‘we got a problem’ and so [Chrétien] could draw on public support. And in the same vein, Carney can draw on public support because Canadians see that dealing with Trump, dealing with tariffs, is very tough and some tough decisions have to be taken.”

For that reason, Savoie said, Canadians will be much more open to suffering through cuts than they were five to 10 years ago, which may be just enough political licence for the expenditure review to bear fruit.

Source: Carney’s plan to cut tens of billions in spending is tough but doable, experts say

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Clerk letter to Public Service

2025/07/09 Leave a comment

Good letter with three priorities, focus, simplify, accountability. Clear test for both political and official levels:

Dear Colleagues,

Today marks the third time in my career that I have joined the federal public service. The first was a long time ago when I was fresh out of school. More recently, I rejoined about five years ago as the Deputy Minister of Finance. And here I am today, in a new role.

So, you might well ask, why? Why am I here? Of course, the most direct answer is that the Prime Minister asked me to take this on. I am grateful to him for the opportunity to do this job at this point in Canada’s history.

Why does this period present such a compelling opportunity for all of us?

First, the federal public service is one of Canada’s great institutions. I have believed this for decades. It has a long-distinguished history of advising successive governments through challenging periods. And, over time, it has shown its ability to evolve and become more diverse to reflect the country itself. For all those reasons, the public service plays an integral part in our system of government – in our democracy. If we have learned anything from the turbulent world we live in, it should be to never take for granted our democratic system of government, and the institutions that support it and make it work.

Second, I believe that we are at a particular moment in our history. The world is changing fast. And in some fundamental ways. While the changes we are living aren’t easy, they give us, as a country, the opportunity right now to make decisions that will put Canada’s economy on a more resilient path; that will make us a more prosperous and fairer country; and that can strengthen our national unity in the face of an increasingly divided world. That is a tall order. It will only be accomplished with a lot of hard work inside government and across the country. It is an opportunity that we cannot miss.

Third, I am convinced that the public service has an indispensable role to play in ensuring we seize this opportunity. As public servants, if we are to deliver on that goal, we need to keep three words in mind.

· Focus: the Government’s priorities are very clear, as set out in the missions that the Prime Minister has launched. Our job is to be disciplined and concentrate on those. By staying tightly focused on priorities, we can help them become realities faster.

· Simplify: Our internal processes have become quite complicated. When that happens, there is always the risk that following the process is so time-consuming that everything slows down – at a time when we need to speed up because the world is moving as fast as it is. Windows of opportunity open and close. The world waits for no one. When processes get too onerous, they can also obscure what really matters most and why we are all here: to have an impact for the benefit of Canadians. Trying to simplify processes is going to be a priority. I know it is easier said than done. But it has to be addressed.

· Accountability: From the advice we give ministers to the decisions we take in running departments and programs to the services we provide to Canadians – from national defence to issuing a passport – we need to have a sense of personal accountability for what we do. Accountability is about commitment. It is about initiative – it is about taking that extra step that no one may have asked you to take, but that is often needed to make something a success. Successful organizations always have two characteristics. Formal accountabilities have to be clear – it’s the job of senior management to ensure that they are. And people need to feel and act in a personally accountable way. Helping to build those accountabilities and a culture of personal accountability will be key priorities for me.

In my experience, leadership is a lot about listening. Listening to the open and honest debates we need. In these uncertain times, when the standard operating procedures just don’t work anymore, rigorous debate is the best path to the best decisions. In this, our diversity is a continuing source of strength. With diversity comes the differing perspectives that make those debates even more worthwhile.

A final point: be proud. Proud of the work you do. Proud of serving Canada and Canadians.

I look forward to working with all of you.

Michael Sabia

Source: Clerk letter to Public Service

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Cabinet ministers asked to find ‘ambitious’ spending cuts as Carney government prepares first budget

2025/07/09 Leave a comment

To watch, significant targets:

Federal cabinet ministers are being asked to find “ambitious” internal savings this summer ahead of the 2025 budget as Prime Minister Mark Carney’s government decides how it will pay for the billions of dollars in new spending that it recently announced.

Specifically, ministers must find ways to reduce program spending by 7.5 per cent in the fiscal year that begins April 1, 2026, followed by 10 per cent in savings the next year and 15 per cent in the 2028-29 fiscal year.

Program spending refers to the costs related to services provided directly by Ottawa. It excludes large categories such as federal transfers to the provinces and territories for health and social services, debt payments, and direct transfers to individuals such as seniors benefits. 

Finance Minister François-Philippe Champagne sent two letters to all cabinet ministers Monday informing them of plans for a “Comprehensive Expenditure Review” as well as a new pre-budget process related to minister requests for new funding.

“You will be expected to bring forward ambitious savings proposals to spend less on the day-to-day running of government, and invest more in building a strong, united Canadian economy,” Mr. Champagne wrote in one of the letters.

Source: Cabinet ministers asked to find ‘ambitious’ spending cuts as Carney government prepares first budget

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The Functionary: New clerk expectations

2025/06/21 Leave a comment

More notes of caution but I wish them well:

…But are they too alike? That’s the worry. Both bring a Goldman Sachs-style mindset with big ambition that prizes speed and outcomes, which could drive them to barrel ahead — not listening, not slowing down, ignoring red flags.

Would deputies raising alarms about a Phoenix-style pay disaster get heard? Or would they be dismissed as risk-averse and stuck in public-service inertia?

As one long-time deputy minister said:

“Neither Carney nor Sabia has worked in the parts of government that actually deliver services. Finance manages crises — it doesn’t build systems. Fixing immigration or modernizing service delivery isn’t about reacting fast. It’s about designing complex programs, managing risk, and building IT that actually works. That’s not their wheelhouse.”

Goldman pace, Ottawa reality. The kind of style that works at Goldman Sachs — where there’s a deep bench of talent ready to step in — doesn’t translate easily to the public service, where replacements aren’t so easy to find or groom. Burnout here carries real risks, and losing top talent isn’t as simple as hiring the next in line.

Tellier and Sabia also came up in a different era. Barking orders and command-and-control leadership were the norm in the 1990s. But that style is now widely seen as outdated.

These days clerks prioritize wellness and mental health. And many public servants are tired. They haven’t a breather since the pandemic. There’s been Trump’s trade war, the federal election, two government transitions, and new crises keep coming – wars, fires.

Can the public service handle a hard-driving, two-year push for massive changes – with the chaos of layoffs? And can Carney stay focused to get his big things done?

The new guard is, well, older. Carney and his lieutenants — Sabia, chief-of-staff Marc-André Blanchard, and principal secretary David Lametti — are all white, male Boomers or Gen Xers leading a millennial-dominated public service that’s 58-per-cent women. 

Many public servants have only ever worked under the Trudeau government, where wellness, DEI, values and ethics, and work-life balance were top priorities. Money flowed and the public service grew. Gears are now shifting to high performance, speed, outcomes, spending and job cuts. That’s a culture shift.

The real leadership test may be less about what gets done — and more about how.

Source: New clerk expectations

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