Part of the build-up to this week’s budget was the incoming

Carney government

’s signalling of intention regarding the federal state. The prime minister and the finance minister set the table by launching summer sprints to review spending, regulation and procurement and through comments that suggested reallocation of spending priorities was coming. Spending less on government operations was one of the seven priorities in the common mandate letter to ministers. They have worked for months to build the case that some types of spending should be thought of, and accounted for, as investment.

In parallel, the new government put “government transformation” in the foreground. There is a new Cabinet committee chaired by the finance minister that is literally called “Government Transformation/Government Efficiency.” The government also inherited a Task Force on Public Sector Productivity from its predecessor.

Early on the new government expressed its aspirations to change not just what the federal government does, but how it works. The opening moves certainly indicated ambition. Ministers were specifically tasked with defence procurement and with

artificial intelligence

. New entities are being created: Build Canada Homes, a Major Projects Office, a Defence Investment Agency. Serious people with deep private sector experience have agreed to come into the public sector in these parlous times.

 

The November budget certainly sets some important directional signals for the federal public service, alongside a long to-do list of policy implementation and legislation. Regulatory reform remains a work in progress. The budget definitively brings to an end a long period of growth in operating budgets and personnel, bending the curve toward a smaller workforce.

But it stops short of “transformation” and if the government survives the confidence votes, we will see in the coming months whether that early ambition will accelerate or fizzle out.

Here are a few thoughts on how government can stay on the path to “generational” reform of state capacity.

The first task is to handle the compression of budgets and personnel in a way that protects future capabilities. Treasury Board Secretariat is the government’s management board and the closest approximation of a chief operating officer role. It could require departments and agencies to benchmark and report their spend — sorry, their investment — in training, professional development, leadership capabilities and management acumen.

Looking to the future the government could commit to double the investment in its workforce. It could ask the

Parliamentary Budget Office

to do the benchmarking and recommend better ways to track and prevent backsliding. It could police a floor on hiring students and co-op placements so that middle managers can’t take the easy way out of tight budgets. It could offer the unions a learning passport that guarantees a minimum number of hours of training per year.

The ambition to reduce dependency on outside contractors, now repeated in successive budgets, hasn’t been matched with a commitment to upskill public servants to take on the work. It is also curious that the government hasn’t acted decisively to simply ban public servants from having side hustles as contractors.

Serious transformation would go beyond just squeezing the number of executives to embrace a deeper structural pruning that reduces the number of management layers and adopts two-track compensation that distinguishes true executives from senior professionals. Adding new tools for recruitment and retention pay would import good practice from the private sector, as would a more flexible suite of pension and benefits options.

Serious transformation would also look to reduce the concentration of the federal service in the capital from the current percentage in the low 40s to a target of “two-thirds not in Ottawa/Gatineau.”

Serious transformation would have to tackle unpleasant and difficult legislative reforms that previous governments have kicked down the road. The Access to Information Act and the Employment Equity Act have aged out and need a major software update. Next year marks the 20 year anniversary of the Accountability Act, which needs a tune-up to make it fit for purpose for the 2020s.

Serious transformation would involve ambitious use of AI to assist and augment the internal functions of government, especially human resources, finance, information management and procurement so that operational pace can be quickened and resources moved to their best use. Greater candour and engagement about the impact on jobs is needed as are retraining and adjustment tools.

Greater candour is also needed about the implications of new AI-driven tools for language translation and interpretation and the rules around language of work. Serious ambition for digital government would mean much more investment in the underlying data architecture and information resources.

Serious state reform would include deep structural and legislative makeovers of particular organizations. The

Canada Revenue Agency

has already been identified the place to start, but a good list of candidates would include Canada Post, the CBC, the RCMP, the Coast Guard and the constellation of “central agencies.”

Perhaps most importantly, the government has correctly identified the new permanent level of uncertainty and change we have entered. Canada needs a much more robust supply chain of ideas, not just about policy but about delivery and execution. We invest more in research on crop rotation than on how the massive and complex public sector could work better. There are many options, including a Build Better Government Fund for externally sourced research and dialogue, a new Advisory Body on Technology in Government and perhaps a revival of Stephen Harper’s Prime Minister’s Advisory Committee on the Public Service. There could be a collaborative effort with the other levels of government in our federation who face similar challenges.’

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Our sovereignty, security, prosperity and quality of life will require the rhetoric and ambition of “government transformation” to be turned into bold and often controversial action in the coming months. Let’s not allow the sense of urgency to dissipate.

Michael Wernick is the Jarislowsky Chair in Public Sector Management at the University of Ottawa and former clerk of the Privy Council.