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Former top bureaucrat calls for major overhaul of the federal government
The Confederation Building (Photo: Reading Tom/Flickr, CC BY 2.0)
OTTAWA – A former top bureaucrat is calling for a major structural overhaul of the federal government targeting outdated departments, bloated management, and urging reforms in key central agencies like the Privy Council Office and Treasury Board.
Michael Wernick, former clerk of the Privy Council and now Jarislowsky Chair in Public Management at University of Ottawa, offers bold recommendations in the Resetting the Public Service series, published by the Canadian Public Administration Journal, as Canada gears up for a Liberal leadership race, spring election and the political tumult of a Trump administration.
The series of 21 articles examines deep-rooted problems in the public service with aims to guide the next government—likely a Conservative one—through a strategic transition and avoid hasty across-the-board cuts that could worsen the situation.
Revamping the machine
In his paper, Wernick argues current structures of government – its departments, HR, IT, and procurement frameworks – are “no longer fit purpose.”
Technology, the internet and today’s global crises have upended the public service, but the way departments are organized and workers are managed – what Wernick calls a “pyramid of occupations and density of management” – hasn’t changed much.
He said the cost of living with structures “beyond their best before date” is high, especially now that many Canadians think the public service grew too big with no improvement in services. That, he warned, can lead to “simplistic solutions that can damage future capabilities.”
“Past experience shows that squeezing operational budgets often leads to cuts in hiring, training and deferring the upgrading of technology. Any serious effort to make the federal state more effective and regain the confidence of Canadians must do better. Structural reform should be an integral part of that agenda,” he wrote.
Wernick recommends breaking up, merging, or reorganizing some of the more than 300 departments, agencies, and Crown corporations.
Machinery changes, however, are controversial, time-consuming, and disruptive. The last major overhaul merged trade, development, and diplomacy into what’s now Global Affairs Canada, and split Indian and Northern Affairs, along with First Nations health, into two separate departments.
The most radical shakeup in recent history was led by the short-lived Kim Campbell government in 1993, collapsing 35 departments into 23. Some were merged, others eliminated, and new ones created, including Canadian Heritage, Health and Public Safety.
The Conservatives, expected to form the next government, haven’t talked about machinery changes other than promises to defund the CBC and abolish the Canada Infrastructure Bank. Leader Pierre Poilievre’s criticism of “wokeism” raises questions about the fate of the Centre on Diversity and Inclusion embedded at the Treasury Board or even the Department of Women and Gender Equality.
Scrap PSPC and start over
Wernick argues Public Services and Procurement Canada should be dismantled, and spinning its real estate and procurement operations into separate agencies.
The department contains a patchwork of many overhauls over the years, including one in 2015. It’s been at the centre of scandals and management failures, including the Phoenix pay system, the sponsorship scandal, the ArriveCAN debacle and allegations of corruption in contracting.
As central purchaser, PSPC manages the purchase of $27 billion a year in goods and services from tanks to pens. PSPC’s realty arm oversees 20,000 properties and 30,000 buildings.
Procurement is weighed down by too many rules and policy goals, Wernick said. In addition to buying goods and services, governments want procurement to support social, economic and environmental goals. They want it to bolster small businesses, start-ups and Indigenous firms while greening government and addressing regional disparities.
Wernick proposes creating two new entities: Procurement Canada to handle all purchasing and contracting, and Real Property Canada to manage real estate. Managing real estate is also complicated by accessibility requirements, environmental concerns, asbestos cleanup, spills, and the demands of hybrid work.
Another possibility is creating a new agency for military procurement, which could be expanded to include all security and cybersecurity purchases for the Coast Guard, border services, the RCMP and intelligence agencies.
Fix central agencies
The central agencies—PCO, Treasury Board, and Finance—are the powerhouse nerve centres that have largely escaped restructuring over the years. Wernick argues it’s time for a rethink.
The UK recently undertook a similar review with its Commission on the Centre of Government, which concluded its central agencies – No. 10, the Cabinet Office, and the Treasury – needed restructuring to improve decision-making and ensure effective delivery on government priorities.
Senior bureaucrats have long complained the centre isn’t working like it should. Treasury Board is often criticized for falling short on its mandates as budget office, management board, and employer.
There’s been much debate on how bureaucrats bungled ArriveCAN or Phoenix with some arguing it’s time for a chief operating officer who oversees and is accountable for service and delivery. Some argue the job should be in PCO and go to the deputy clerk.
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But Wernick said Treasury Board already has the authority and is the keeper of all the rules and policies on how government operates. He calls for legislation to strengthen Treasury Board’s role in public service delivery and make its minister (the TBS president) the COO. Instead, PCO stays focused on cabinet support and policy and leaves operations to Treasury Board.
He proposes other tweaks to the system:
- Elevate the Coast Guard to a full department from a special operating agency within Fisheries and Oceans.
- Review the 2017 split of INAC into Crown-Indigenous Relations and Northern Affairs (CIRNAC) and Indigenous Services Canada (ISC), with the possibility of recombining them or creating a new department for Northern and Arctic Affairs.
Fixing the pyramid: Streamlining HR and reducing management
Critics have long argued government human resources, technology and finances were built for another time and are out sync with the speed and expectations of the digital age.
A key problem is the job classification system with 70 occupations and many levels and pay rules enshrined in collective agreements. Changes would have to be negotiated with unions.
Wernick argues the effort to streamline the HR system with unions, dug in on protecting member interests first, may not be worth the cost and time.
Rather, he says government could live with the rigidities of its unionized workforce if it sped up staffing. Despite years of attempts, it still takes nearly seven months to fill a position—a process many believe AI could significantly streamline.
Another issue is the expanding number of executives, which has outpaced the growth of the unionized workforce over the last 15 years. There are now over 9,000 executives across five levels, with about 80 deputy ministers above them, ranked by four levels.
Over time, the executive layer has become thicker with the proliferation of new “half-step” positions, such as senior and associate assistant deputy ministers (ADMs)—a pattern seen across other executive levels as well.
This thickening of the executive ranks raises significant questions. Are these appointments narrowing the scope and responsibility of executive roles, or are they necessary due to the increased pace and volume of work?
Some argue that the proliferation of these positions contributes to high turnover, with many not staying in jobs long enough to learn the ropes or be accountable for decisions under their watch.
Additionally, some of the movement stems from using promotions to offer higher pay to keep or attract talent.
As clerk, Wernick pushed to restructure the executive ranks and overhaul their compensation but never gained political backing after the Phoenix fiasco. He suggests reducing the five executive levels to three—senior, middle, and junior. This would require a review of the need and scope of each position, potentially taking three years and offering buyouts to those displaced.
Previously, the most discussed option was collapsing the five levels into three—merging EX-4 and EX-5, as well as EX-1 and EX-2, while keeping EX-3 intact.
The executive ranks tend to be dominated by policy experts and Wernick argues more weight should be given to those with skills and experience in operations and service.
One possible solution is to create a separate track that would allow specialists in fields like IT or data to be promoted for those skills without having to move into management. This would likely mean raising salaries for the lowest tier of executives to make these jobs more appealing to executives while also rewarding specialists for their expertise.
This article first appeared on Policy Options and is republished here under a Creative Commons license.
