Transition is in the air
By Ryan Androsoff, Vice-President of Learning and Leadership at the Institute on Governance.
Change is in the air, and it’s not just the melting of the spring snow. In March, Mark Carney was sworn in as Canada’s 24th Prime Minister along with a new Cabinet. We are now amid a federal election campaign which will conclude on April 28th followed by the swearing in of a new government and the convening of a new Parliament. Transition of one form or another is coming to the Government of Canada.
Indeed, here at the Institute on Governance we’ve been helping public servants get ready to navigate these changes through our new course: Navigating Government Transitions.
A government transition involves the transfer of administrative, legislative, and political duties and responsibilities from the outgoing government to the incoming one. This may include the appointment of new ministers and the identification of new political priorities. It the case of this coming transition, it is very plausible that it may also include some type of large-scale fiscal review. The federal public service has grown by more than 40% over the past decade, and the leaders of both the Conservative and Liberal parties have signaled that they would move to reduce the size of government if elected.
Over the past 30 years the Government of Canada has undertaken three significant fiscal reviews that led to major reductions in federal government spending and changes to how programs are delivered. These examples may provide useful context to what we may see happen under a new government in the months and years to come.
Program Review (1994-1996)
In response to poor economic performance and a high debt-to-GDP ratio that was impacting government operations, the Chrétien government announced the Program Review initiative in 1994. It was supported by a Secretariat in the Privy Council Office, a special Cabinet committee, as well as a steering committee of experienced Deputy Ministers. A series of six “tests” were put in place to evaluate every program under review, specifically: Public Interest, Role of Government, Federalism, Partnership, Efficiency, and Affordability.
The focus of Program Review was on identifying programs that could be reformed to be delivered differently or eliminated, rather than a focus on across-the-board spending cuts. A total of $18.8 billion in cuts were announced in the 1995 and 1996 budgets, 70% of which were found in the operational budgets of departments with the remainder coming from the reduction in transfer payments to individuals and other levels of government. By 1998 total federal departmental spending was reduced by 21.5%, though there was a wide disparity as to the level of reduction on a department-by-department basis, with some departments such as Transport and Natural Resources seeing their budgets reduced by more than 50%.
Strategic Review (2007-2010)
Budget 2007 announced the implementation of an annual strategic review process that would be administered by Treasury Board Secretariat. Departments and Agencies would go through a review process over the course of a 4-year cycle and would be required to assess program spending and operational costs with the goal of identifying options to reallocate 5% from their lowest-priority and lowest-performing program spending to high-priority and high-performing programs. Budget 2011 announced $2.8 Billion in annual savings as a result of the first cycle of these program reviews. However, given growing post-recession structural deficits the Harper government was motivated to find even greater savings to speed a return to balanced budgets.
Deficit Reduction Action Plan (2011-2015)
Initially conceived as one-time, year-long Strategic and Operating Review as part of a broader Deficit Reduction Action Plan (DRAP), the publicly stated focus was to find efficiencies in the Public Service with a particular focus on back-office functions and non-essential work. In practice, it became more specifically focused on finding savings to balance the federal budget rather than more strategic reforms to the operations of the public service.
Overseen by Treasury Board Secretariat, the scope of DRAP was the approximately $80 Billion in direct program spending appropriated by Parliament, with a goal of finding $4 Billion in annual spending reductions (a 5% cut) in baseline spending by FY2014-15. This goal was more than exceeded, in part enabled by a significant reduction in the public service workforce with over 26,000 FETs eliminated as of 2014.