Canada is struggling and government is part of the problem

Canada is struggling. Living standards in this country have been stagnant for the better part of a decade, reflecting anemic productivity, poor competitiveness, weak innovation, and lacklustre corporate investment. Last year, Canadian per capita real incomes actually declined as immigration surged and the cost of living spiked. Worse still, over the next decade, growth in our living standards is expected to be among the lowest of all OECD countries. Government is part of the problem. Federal spending, public service employment, and the national debt are soaring, but delivery of essential government services is sputtering, and the Bank of Canada has been left to fight inflation single-handedly. Policy-driven immigration is surging while the country has a housing and cost-of-living crisis. While the government has publicly committed to NATO’s two per cent defence spending target, the recent defence policy statement shows no path to meeting it. Government procurement is a mess, whether it is the controversial and wildly-expensive ArriveCan app, or badly-needed ships and planes to protect Canadians and our sovereignty. And, despite ambitious decarbonization goals, the government’s climate change policy is increasingly unclear and confusing. Canadians are well aware of this. Poll after poll suggests the public is skeptical of whether their national government is working effectively. Poor delivery of core government services, perplexing policy choices, and miscues in policy execution are contributing factors to the national malaise. Whether the 2024 federal budget will actually move the needle on our structural problems of poor productivity, weak innovation, tepid business investment, and housing supply gaps remains to be seen. The degree of success, however, will be shaped not only by the policy merits of the initiatives themselves and the state of the fiscal framework, but also by the government’s capacity to deliver on the proposed new measures. This highlights the key question of what can be done to provide more effective and efficient delivery of government programs and services. In our recent policy brief published by the Johnson-Shoyama School of Public Policy, we set out some areas in government that need urgent and purposeful attention. First, “political short-termism” has led to a shift in governing towards an attitude of “all politics, all the time.” Nurtured by social media, this political myopia comes at the expense of focussed priorities, considered policy analysis, and effective implementation. It is time for governments to take a more focussed and long-term view. Short-termism has governments chasing too many issues and declaring too many priorities. This is manifest in a perpetual focus on press releases and issues management. Short-termism also encourages endless consultation on any number of topics, often as ostensible proof of the government’s interest in a problem or in a particular group of voters. The result is that effective provision of government programs, across so many issues, becomes nearly impossible. Governments need to target a limited set of priorities, and execute on them well. This requires deep policy capacity within government, not an over-reliance on consultants. It requires greater project management expertise in the public service to deliver the new programs. And, all this has to be done while efficiently delivering the core government services that Canadians need and expect. Second, excessive centralization of decision-making in the Prime Minister’s Office (PMO) has sidelined cabinet, ministers, and the public service. This is neither good for responsible government, nor for effective government. It’s time to restore collective cabinet decision-making and ministerial accountability. Growing centralization of power in the PMO has been a feature of governance in Ottawa over several decades. In recent years these trends intensified with political staff—tightly orchestrated by PMO—playing an increasing role not only in shaping and controlling the advice given to ministers, but also in the implementation of those decisions. This means that short-term political considerations can colour both what is done and how it’s done. It's time to allow ministers to be ministers again, and to restore the cabinet as the primary forum for government decision-making. The PMO should return to its traditional role of providing political advice to the prime minister. Running government operations, and ensuring they operate efficiently, should be the responsibility of the public service. That’s what they are employed to do. Third, the federal government has become bloated. Spending levels grew 75 per cent between 2015 to 2023, the federal public service expanded by almost 40 per cent (or over 100,000 employees), the number of government agencies has proliferated, and ever-expanding regulations and red tape are an increasing internal “tax” on initiative and effectiveness. Future spending promises surged again in the 2024 budget. To provide a public benchmark to gauge this torrid growth, over the same period the Canadian population increased by just under 12 per cent—or less than 10 per cent adjusting for the recent surge in non-permanent residents—and the economy grew by just over 14 per cent. Paradoxically, despite the growth in spending and in the public service, too few people are hired for leading-edge skills in operations, information systems, and project management. Rather, the skills valued in government today have more to do with managing needlessly complex processes and seemingly endless consultations while avoiding risk and dealing with the omnipresent PMO. To improve the delivery of core government services requires not only reining in spending growth and right-sizing the federal public service, but also streamlining top-heavy management structures, cutting internal red tape, speeding up procurement, and renewing the federal public service. Renewal means attracting people with the critical skills needed for 21st century government operations, empowering them to solve problems, and instituting a management focus on results and accountability—not box-checking. This agenda for more efficient and effective government is neither radical nor partisan—it’s an approach to governing that has been adopted by Liberal and Conservative governments in the past. It is an agenda that would be welcomed by public servants and Canadians. It’s time to restore confidence in the government's ability to get things done. If we can do that, then everyone wins. Kevin Lynch is a former clerk of the Privy Council and the deputy minister of Finance Canada and Industry Canada. Jim Mitchell is an adjunct professor at Carleton University and a former senior federal public servant. The Hill Times