May: The Day of [Budget] Sacrifice

2025/11/03 Leave a comment

Good piece:

….The budget, he [Daniel Quan-Watson] says, also marks a sharp philosophical turn. For a decade, the public service operated on a “do everything” instinct – fix every injustice, chase every big ambition, launch every initiative.
 
That era is over.
 
“It’s not that yesterday’s priorities don’t matter,” he says. “It’s that some things matter even more today. You ask, ‘Where are the injustices?’ You get one – maybe six, but it isn’t 22.”
 
“We’re not going for stars now – we’re going for low-orbit satellites. And if you catch one, you’ll be lucky.”
 
This is the moment to lead. As Anil Arora, Canada’s former chief statistician puts it, the public service needs doers, not more talkers.
 
“For too long, leadership has been about coming up with ideas, putting them out there and walking away. That won’t cut it anymore. The country doesn’t just need policy – it needs people who can implement and deliver. This is real. This is our moment. Step up when the country needs you.”

The warning signs of decline. All this comes against a backdrop of a public service – while still among the world’s best – is showing cracks. Jocelyne Bourgon is a former clerk. She is one of the architects of the 1995 program review and has advised governments around the world. She’s taken a hard look at how Canada’s public service stacks up globally. Her conclusion: it’s slipping.

The warning signs are there. Morale is down. Fewer public servants feel valued. Citizens report declining satisfaction with government services – from health care and passports to Phoenix pay, digital procurement, and CRA call centres. Canada’s e-government ranking tells the same story: we were third in the world in 2010. Now we’re 47th.
 
Bourgon (above) calls this an inflection point – a moment to act before the decline deepens. And with the Carney government signalling major downsizing and operational shifts in the budget, the public service is about to face that challenge head-on.

Source: The Day of Sacrifice

This CSPS is a very good reference document. Have highlighted the lessons learned but a must read for those interested in governance and program reviews. Found the tech observation particularly of interest:

Lessons from Past Spending Reviews

  • Lesson 1: Review impacts are not well tracked or understood.
  • Lesson 2: Spending reviews have not presented detailed analysis of the service-level impacts to Canadians.
  • Lesson 3: It is generally difficult to determine the impact of spending reviews on services to different populations in Canada.
  • Lesson 4: Program reductions tend to be undone over time.
  • Lesson 5: Spending reviews affect the federal workforce through job losses, expected productivity gains, uncertainty around change, and other morale-related considerations.
  • Lesson 6: Several second-order observations from this review have implications for how future spending restraint may be carried out.

These observations are not directly related to the mechanics of reviews, but could constrain fiscal or other policy in a way that changes the shape or importance of spending reviews. The following observations fall into this category.

  • Lesson 7: Canada is unlikely to further increase free trade in the same dramatic manner as with the 1991 launch of the North American Free Trade Agreement (NAFTA).
  • Lesson 8: Raising consumption taxes (i.e. HST) remains a broad-based option for increasing revenue.
  • Lesson 9: Canada’s public service uses roughly the same labour mix to run its programs as it has since 1946.

Technological developments during the past 80 years, if not the past 30 years, should have reduced the labour requirement. Computers, digital automation, and internet communications have made direct services easier to provide to Canadians. Forms and databases automate many tasks with higher accuracy, e.g. security checks, benefit applications, tax returns. Yet, the same number of Canadians is served by each public servant after decades of efficiency measures in spending restraint. Why is this? An un-nuanced early result appears to be that programs are more complex, as is the work to deliver them, even while the inflation-adjusted value delivered to each Canadian has not changed much in the last fifty years. However, some of this complexity may be unnecessary.

  • Lesson 10: Federal operations have legislative or policy barriers that reduce the full benefit of technological advances and maintain or increase complexity.

Source: CSPS: Canada’s Federal Spending Reviews – Lessons

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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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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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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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