Harper’s Accountability Act, ten years on…
Did it clean up government? Or did it merely make public servants more risk averse?
Maryantonett Flumian and Karl Salgo
When the government of Stephen Harper took office on February 6, 2006, “accountability” defined the spirit of the times. The prime minister renamed his ministerial playbook Accountable Government, and the new government’s first order of business was a promised Federal Accountability Act (FedAA). The government described the Act as its signature legislation, and within a year most of its elements were in place.
Now, who could be against accountability? Accountability is a cornerstone of good government and no one, least of all a public servant, would try to deny this.
Still, our own view, bluntly, is that both the Act and the audit culture it sustains are fundamentally wrongheaded, and have contributed to a normative culture that is a roadblock to modernization. Far from fostering genuinely efficient stewardship of public resources, this culture over-manages minor risks in government, ignores far larger ones, and stifles appropriate risk-taking and innovation. If Prime Minister Justin Trudeau’s government is serious about its focus on delivering better outcomes for Canadians, it needs to shift to a system of accountability that is itself more focused on outcomes and less on micro constraints and the avoidance of blame.
To this day, the FedAA — which was actually part of a broader program of initiatives described as the “Federal Accountability Action Plan” — stands, we would argue, as the definitive legislative monument to risk-averse, blame-avoiding institutional rigidity in the government of Canada.
So, as the Act approaches its tenth anniversary, we may well ask: Accountability for what? Has government become more accountable as a result of the act? More to the point, has the FedAA and similarly-spirited initiatives contributed to better societal outcomes? Does it position the Canadian government to evolve nimbly to meet the challenges of governing in the digital age?
The FedAA was an omnibus bill that amended many existing statutes (roughly four dozen) and introduced a range of new ones. It was supplemented by a range of administrative measures that did not require legislative change, and collectively these were styled as the “Federal Accountability Action Plan”. Without any attempt at exhaustiveness, here’s a list of some of the key initiatives:
- The Financial Administration Act (FAA) was amended to, among other things, make deputy ministers accounting officers for their departments and strengthen the internal audit function. This included requiring deputies to ensure appropriate audit capacity and establish departmental audit committees, and implementing a new Treasury Board Internal Audit Policy, which strengthened the role of the Comptroller General (OCG). In addition to monitoring internal audits across government, the OCG ensured the conduct of horizontal audits of cross-cutting areas determined to be high-risk.
- The FAA also was amended to make fraud involving public funds an offence under the Act (fraud, of course, being already an offence under the Criminal Code, which was also amended), with prison terms of up to 14 years for fraud over $5,000. A corresponding Action Plan initiative included development of a compliance framework that required departmental disciplinary codes “to provide clarity on types of misconduct and the corresponding range of consequences,” as well as a deputy minister committee “to ensure consistent application of disciplinary measures and appropriate follow-through.”
- The Access to Information Act (ATIA) was amended to bring a number of previously excluded Crown corporations under its regime.
- Under the Elections Act, new caps were placed on individual party and candidate donations, while organizational donations were banned altogether. Additionally, candidates were required to report gifts over $500, while those that might appear to influence performance were banned entirely.
- Under the Lobbying Act, senior public officials were prohibited from lobbying for five years after leaving the government’s employ.
- A Public Appointments Commission was to be established to develop guidelines, review and approve the selection processes proposed by ministers to fill vacancies within their portfolios, and to report publicly on the government’s compliance with the guidelines.
- The conflict of interest code applicable to Governor-in-Council appointees, elected officials and political staffers was tightened, expanded in reach and legislated as the Conflict of Interest Act (COIA). The centerpiece of the Act was a demanding regime of disclosure and/or divestment of financial interests, coupled with the use of recusals where conflicts were still considered to arise. Responsibility for its administration was handed to a new officer of Parliament, the Conflict of Interest and Ethics Commissioner, who also administers the Conflict of Interest Code for members of the House of Commons.
Among the most significant changes, new independent officers — agents and officers of Parliament, and ombudspersons — were appointed to serve as official “guardians” of specific spheres of activity or conduct norms:
- The Conflict of Interest and Ethics Commissioner (COIEC), mentioned above;
- The Public Sector Integrity Commissioner (PSIC), who as administrator of the Public Service Disclosure Protection Act (PSDPA, aka the Whistleblower Act) encourages disclosure of wrongdoing in the public service and protects public servants against reprisals for such disclosure;
- The Commissioner of Lobbying (an Agent of Parliament) replaced the Registrar of Lobbying (an official within the public service) and was armed with increased investigative powers under the Lobbying Act;
- The Parliamentary Budget Officer (PBO) was established to provide independent analysis of the government’s estimates and forecasting, the state of national finances, and national economic trends. Although established as an office within the Library of Parliament, the office received its own statutory mandate and independently exercised authority;
- The Procurement Ombudsman was established to review and investigate complaints against government procurement practices, which were also tightened (or made more “fair, transparent and open”) under the reforms. Subsequently, other ombuds offices would be established by Order in Council (e.g., the Taxpayers Ombudsman and the Veterans Ombudsman).
In addition to the new guardians, an important existing guardian, the Auditor General, was given expanded investigatory powers — including the so-called “follow-the-money” authority to inquire at his or her discretion into the use of funds by private sector transfer recipients — and an expanded budget to go with them.
An interesting feature of these new “guardian” functions was the extent to which executive authority was devolved to independent officers who were answerable only to Parliament regarding their substantive mandates (as opposed to their administrative practices).
By Canadian standards, the rhetoric surrounding the FedAA and Action Plan was surprisingly charged. The then president of the Treasury Board described the Act as “the toughest anti-corruption law ever passed in Canada,” and the action plan booklet spoke of “cleaning up” government polling, advertising and procurement. The PBO would ensure “truth” in budgeting and anonymous contributions were characterized as “secret.”
Regardless of whether the FedAA was in itself Canada’s toughest anti-corruption law of all time, it certainly took the cumulative effect of public sector controls to a new level. But one of the interesting things about the rhetoric of corruption and ‘cleaning up’ was its relative disconnect to the situation on the ground.
The FedAA initiatives took place in the wake of the Gomery Inquiry into the so-called sponsorship scandal. That incident was certainly unsettling and did unearth a level of sloppiness about certain well-established rules and principles. Perhaps it was even true that, as the then-Auditor General said, “they (one asserts the usual caveats around this pronoun) broke every rule in the book.” But even (or perhaps particularly) if we assume that this statement was more or less accurate, it is not evident how it constituted a basis for creating new rules. Indeed, a lot of new rules — for funding, contracting, procurement and financial reporting — had just been put in place in the wake of the grants and contributions scandal at HRSDC in 2000.
On their face, many of the FedAA provisions don’t sound outrageous. Who can be against more rigorous audit, or tough penalties for misuse of public monies, or constraining conflicts of interest? What kind of person doesn’t want to see wrongdoing in the public sector reported, or strict rules on procurement, or a closer eye kept on whom public servants are meeting and why?
The stark reality, however, is that most of the FedAA measures were not evidence-based. Not only were the problems to which they purportedly responded not shown to exist to any statistically significant degree, but there was no evident analysis of how the measures would address the purported problems in an effective and proportionate way. Many (though not all) of the measures filled notional gaps — that is, they put laws into the nooks and crannies where none existed before, or more precisely, where such explicitness had not existed before. But few were demonstrated to fill functional gaps — that is, to actually stop practices that had been identified as prevalent. A good number of them were simply legislative expressions of collective anger.
To be fair, control systems in the public sector are never directed exclusively to operational effectiveness. The mandates of most public sector organizations are oriented to societal outcomes that are difficult, if not impossible, to measure in the financial terms of a for-profit corporation. This has important implications in a spate of functional areas — staffing, procurement and so on — where practices cannot be justified principally in terms of whether the organization yields favourable rates of return.
That’s one reason why public sector controls and oversight are largely about providing assurance that no misconduct is taking place. Perhaps even more fundamentally, work in the public sector is considered to be a public trust. For the most part, citizens cannot simply opt out of government programs, service delivery mechanisms and rules — which means governments have to be especially circumspect about how they spend taxpayer dollars.
Partly for these reasons, the public sector has a distinct, largely codified system of values, which include probity and frugality in the use of public funds. Accordingly, the constraints imposed by the FedAA cannot be viewed exclusively in terms of their impact on outcomes. But surely neither should they be judged without regard to that impact. We make public expenditures for a reason beyond frugality. Indeed, a recent survey of Canadians found that more prefer their public service to follow broad principles than detailed rules and procedures, and even those who favour detailed rules tend to reject them when they carry a cost in direct expenditures or delays.
It also needs to be noted that the FedAA Action Plan included certain counterbalancing elements. Most notable were the commitments to revisit the “web of rules” governing public service conduct under the auspices of the Treasury Board, and to establish a “blue ribbon panel” that would find ways to cut through the red tape constraining SME and NFP access to grants and contributions.
A methodologically rigorous assessment of the impact of the FedAA — like one of the need for it — remains to be conducted. To date, much reported criticism draws on a broadly negative assessment by the public service textured by compelling personal anecdotes. A public service thumbs-down is neither definitive nor something that should be casually dismissed. Indeed, a systematic survey of public service experience would make a good starting point for a robust analysis. In the meantime, however, our principal basis for assessing the FedAA remains a parsing of what the legislation did and did not do.
Before assessing the individual elements of the legislation, let’s consider its overall thrust. Did this act about accountability have anything to say about being accountable for better outcomes? For working collaboratively on horizontal files? Did it give deputy ministers the responsibility and flexibility to improve the bottom line? Indeed, did it include any inducements to work pro-actively for improvements?
On the contrary, almost every provision was a further proscription, a more refined behavioural restraint, an intensification of scrutiny to smoke out unknown misdemeanours. And more to the point, the requirements of this regime could be satisfied in a purely negative way — that is, not by actually delivering something good, but by keeping your head down and avoiding blame.
As befits accountability legislation, the FedAA strengthened internal audit requirements in government departments and designated deputy heads as “accounting officers” for their organizations, meaning that they had to account in some way to Parliament for their managerial custodianship. Now, internal auditing is itself a laudable practice — one that that should actually be welcomed by a CEO as a tool for keeping tabs on the organization. However, the actual impact of internal audits on government departments is an area that merits closer study; the decision to conduct an audit by external committees may at least initially have reinforced a tendency to see the function as something to be managed rather than embraced.
As for the accounting officer function, this was evidently structured to minimize the risk of public servants becoming politically accountable to Parliament (itself a defensible goal). Partly for this reason, the responsibility is cast heavily in terms of demonstrating compliance with Treasury Board rules. But again, that is really not an outcome-oriented focus for deputy ministerial accountability, and it is highly unlikely that disregard for Treasury Board requirements was a significant problem in the deputy community. There is also the possibility that it reinforced a siloed focus on one’s own department.
One of the most characteristic and significant aspects of the FedAA was the intensification of oversight by “official guardians”. The legislation created or re-mandated no fewer than four agents or officers of Parliament and one ombudsperson (the Procurement Ombudsman), all with administrative costs and legislated responsibilities that required compliance by government officials — political, public service or both. Additionally, several departmental ombuds functions were subsequently established by Order in Council under the Action Plan.
One can readily quantify the budgets of these offices, less readily the corresponding expenditure on departmental compliance apparatuses, and still less easily the time expended by public servants to meet their obligations under these multiple regimes. Perhaps most elusive of all is the impact of the rules on public service and political behaviour, and the “gotcha” culture they inspired.
If we look at the COIA — which was largely an enactment of an earlier code into statute — we see first of all the judicialization of public sector conduct norms. People tend to assume such a change gives the provisions teeth. Perhaps it does. Equally, however, it invites a narrow conception of compliance and entails the devolution of prime ministerial responsibility.
We also see an intensification of pettiness. For example, gifts made to public office holders (POH) or family members by persons other than relatives or friends of the POH must be declared, itemized and evaluated. That’s easier said than done after one of the POH’s children has a large wedding. More fundamentally, the divestment provisions in the legislation will be sufficient to make some people think twice about public life. Whether the impact is salutary merits public discussion.
The PSDPA — the so-called whistleblower act — has proved to be something of an odd duck. Theoretically it was sweeping in its implications, because it mandated a public service charter and public sector code of conduct, violations of which are punishable as “wrongdoing” under the Act. The new Code of Conduct for the Public Sector was adopted by the Treasury Board in 2012, though no public service charter has been put in place. The regime was not without risk of abuse; it would not have been hard for public servants who were facing legitimate pressure to shape up to insulate themselves from managerial “reprisals” by bringing allegations of wrongdoing against their superiors.
In any case, the regime has mostly been remarkable for its relative dearth of activity. This raises the question of whether the law was essentially unnecessary, whether the public service has simply fallen into line for fear of its grievance processes, or whether it is a failure as a way to enforce behavioural norms. Given the prevalence of mental health complaints across the public service, one suspects that a lack of perceived grievances is unlikely to be the reason for low level of take-up under the system.
The Lobbying Act is, in principle, not intended to set behavioural standards but simply to ensure transparency with respect to what is recognized as a legitimate activity. As such the regime existed for many years before the FedAA as the Lobbyist Registration Act. However, whereas the Registrar of Lobbyists had been a mere functionary within the public service, the Commissioner of Lobbying was elevated to full Agent of Parliament status. This sent a critical signal in terms of tone and in upping the political ante around communications between public servants and external organizations.
Further, the new law included a minor provision permitting the Commissioner to request verification of reported meetings with senior public office holders (SPOHs — those at level EX-04 and above) from the SPOH’s themselves. No documentation requirements were set for SPOH’s, who could in principle reply that they were unable to verify given (say) the passage of time. However, the legislation was construed as establishing a public service duty to document the details of meetings, which is reported anecdotally to have had a chilling effect on the readiness of senior officials to meet with lobbyists. The gap between public servants and the outside world was discernably widened, and not for the last time.
The Lobbying Act also includes a provision prohibiting former public office holders from engaging in lobbying activity for five years after leaving office. Widely regarded as draconian, it is thought to be a further disincentive to participate in the public sector since it shuts off major potential career options — although anecdotally compliance is said to be less than strict.
One could go on in like vein about other guardians, such as the Procurement Ombudsman, but the key point is an increase in compliance and process without demonstrated benefit. Perhaps most importantly, if the purpose of these changes was to inspire confidence and trust in the system it is far from clear that this has happened. Indeed, public opinion research suggests no improvement in confidence concerning the health of our public institutions, and even a worsening, during the decade following the introduction of the FedAA; and it cannot be denied that the Act and the culture it supports have encouraged mistrust between elected officials and public servants.
Any commitment of public sector resources — whether a direct monetary outlay or the indirect costs of compliance — should not be undertaken without some demonstrated need. This alone renders the machinery of the FedAA suspect. However, in the case of many of its provisions, the biggest cost of the FedAA arguably was the distraction from, and in many respects frustration of, key changes that are needed for public sector modernization. Again, it reinforced exactly the wrong normative culture, in which accountability is about protecting oneself through compliance with an increasingly refined checklist of don’ts, rather than demonstrating actual achievement.
The Westminster system was not designed with the digital era in mind and will need to evolve before the two can co-exist in a way that benefits citizens. For the most part, Canada’s extremely traditional version of Westminster is beholden to industrial age command-and-control organizational models and cultures that increasingly miss opportunities to serve Canadians better. In keeping with both classical conceptions of ministerial accountability and Weberian principles of public administration, our public sector bureaucracies operate like stovepipes, channelling information vertically. As social and technological conditions have evolved, these stovepipes have become obstacles to, rather than enablers of, progress. Ironically, the government’s adoption of new technological systems has actually tended to solidify old processes and cultural norms by encoding them directly into new systems of software.
The demand for control on the part of this siloed, compartmentalized and often insular system sits ill with the need for information sharing, collaboration and increased public engagement demanded by an emerging networked environment. In this environment, both policy development and service delivery need, and are able, to be achieved horizontally.
Change of this scale requires innovation, rational risk-taking, and a willingness to act on an enterprise level. The FedAA inspired precisely the opposite — a culture of compliance, risk-aversion and anxious focus on vertical accountabilities.
Even measures that, in themselves, are difficult to fault — such as the recalibration of deputies as accounting officers and beefing up the audit function — reinforced verticality and deepened what was already an audit culture. The accounting officer function is conceived explicitly in terms of demonstrating compliance with Treasury Board rules, and the renewed emphasis on comptrollership sent a signal through the senior ranks of the public service to take shelter in the safe harbour of compliance. This was not an environment in which to push for innovative financial and governance arrangements that might not succeed, and that would certainly compromise vertical control. Interestingly, government policy came to favour shared administrative solutions, but it supported them inadequately when it came to providing the needed authorities.
We need to replace what the FedAA has given us — more detailed rules and more costly and powerful people to oversee them; a chilling effect on public service and engagement with the outside world; and redoubled focus on departmental siloes and accountability conceived as compliance — with a system oversight and accountability that hones in on real risks across the system and that encourages collaboration, innovation and a focus on outcomes. Are public servants accountable for ticking boxes, or for helping the government of the day improve the lives of Canadians in meaningful ways?
If there is a real risk to the effective governance in Canada today, it is the risk that government will not meet these challenges, diminish in relevance, and be beaten at its own game by external providers of goods and services with no mandate to look out for the public interest.
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