Transition 2015: Perfecting the ‘How?’ of Governing


Policy Magazine
Kevin Lynch

After a long election campaign, Canadians have decided on the make-up of the new Parliament and who will govern us. How they should govern us is an issue much less discussed, yet equally vital to our long-term future.

Transitions are times for renewal, not only in political terms, but in how we look at the world around us and the future ahead of us. The public service provides the new government of the day with “transition books” that deal with all aspects of governing—a huge and valuable nonpartisan exercise. These substance of the transition briefings typically ranges from the machinery of government itself to short-term issues that must be dealt with; from the implementation of the new government’s policy platform to longerterm policy issues; from federal-provincial relations to relations with our global neighbours; from security and defence issues to foreign policy challenges and opportunities.

The transition process also provides an invaluable window on how well our system of governance and its core institutions—Parliament and its committees, Cabinet and its ministers, the Prime Minister’s Office and its span of control, the public service—are functioning today.

Democratic governance is about more than the ability to hold free and fair elections. It requires strong institutions. It demands respect for the rule of law and those who oversee it. It needs a system of checks and balances, set by either constitution, convention or both. It requires a professional and effective public service. It listens to the diverse and articulate voices of an independent media. And it is anchored by an informed and involved citizenry. 

To be sure, the context for governing in Canada and elsewhere is shifting. The “new normal” is a world of pervasive globalization, relentless competition, hyper-connectivity, perpetual innovation, aging demographics and rising volatility and risk. The role for government is certainly not lessened by this shifting context, indeed quite the opposite, although the nature of government’s role needs to evolve to reflect these new realities.

How well it is evolving to fulfill its role is the focus of a recent report by the Public Policy Forum’s Panel on Governance. The panel believes our system of governance, which is core to how we shape our collective values and goals as a nation, is in urgent need of a reboot.

T his renewal, in the panel’s view, does not require constitutional amendments or protracted federal-provincial negotiations, but it does require change. The report focused on the need for change in how Parliament and its committees work: in how balance is re-established between centralization in the PMO and delegation to ministers and departments; in how the public service interacts with the government, Parliament and the public; and, in how the responsibilities and accountabilities of political staff are clarified. It emphasizes that good governance is not an end in itself, but a means towards achieving a robust democracy for the benefit of all Canadians. 

The public service of Canada plays a core role in our Westminster system of governance. It is nonpartisan, serving governments past, present and future; it is permanent, providing a longer term policy and operational perspective; it is merit based, attracting competent professionals who want to make a difference for their country. And, as the panel report sets out, it faces challenges today.

The report puts forward a number of recommendations designed, essentially, to let the Public Service of Canada fulfil its intended role. Hopefully, these proposals will enjoy broad-based political and public support and be acted upon with alacrity while, at the same time, the public service itself will move forward with renewal. 

My intent here is to reflect on the “new global normal” and the operational opportunities and obstacles it presents for Westminster public services everywhere, and in so doing, consider five areas where the greatest scope for innovation and change may lie.

First, in a world that is exceedingly complex and interconnected, deep and broad policy capacity is a basic necessity of effective government. Policy obeys the basic law of supply and demand—without both the supply of high-quality policy analysis and options by the public service and the demand for evidence-based policy advice and options by the government, the market for public service policy capacity simply does not function. 

Policy advice by the public service should not be a monopoly—there are many sources of advice available to government. What it should be is value-added to other sources of advice in terms of its impartiality, timeliness, analytic quality, broad global perspective and long-term focus. 

Public service policy advice should eschew short-termism, which is such a challenge in so many aspects of business, politics and journalism today. Fearless policy advice must be based on extensive information and detailed analysis—multiplied anecdote is not knowledge. The capacity of public sector policy analysis to better utilize big data, big analytics and big computing power offers enormous potential for new insights in the many realms of government. Moreover, public service policy thinking should be more collaborative in its structure, both within government and outside, tapping the public and its vast “internet of ideas.”

As a country, we have to be bolder in our policy thinking if we are to thrive in this new global normal, and the public service should be able to contribute to these discussions. Whether it is how to re-invigorate our long-term growth potential, how to get productivity growth going again, or how best to make a trade and investment pivot to the emerging economic powerhouses in Asia led by China, we need diverse longer term policy views and analysis in the public domain, and spirited public discourse. 

Second, in a world experiencing a sharp spike in volatility and risk, risk management—not risk aversion—is the smart response by government. Risks today are more systemic, more global, more interconnected and more unpredictable in their diffusion than ever before. These characteristics are clear in the World Economic Forum’s 2015 ranking of the top 10 global risks which include: interstate conflicts; high and sustained unemployment, particularly for youth; failure of climate change adaptation; water crises; cyber attacks; asset bubbles; terrorist attacks; social instability; food crises; and, fiscal crises.

For any institution in a period of change and churn, whether a private sector firm or a government, risk aversion paradoxically amplifies risk rather than minimizing it. It is too often an approach to minimize shortTransition briefings typically ranges from the machinery of government itself to short-term issues that must be dealt with; from the implementation of the new government’s policy platform to longer-term policy issues. Policy term inconvenience while maximizing long-term pain.

Effective risk management is a key differentiator for long-term success in a changing world—whether you are confronting technology risk, geopolitical risk, economic forecast risk, security risk, social license risk or policy risk. Risk management is a strategy for long-term gain while accepting that risk and return are correlated and, since risks cannot be avoided, they should be analytically managed. Part of this entails reducing ever-expanding compliance regimes and their web of rules, and substituting risk management tools such as scenario analysis, stress testing and resiliency planning into government programs, services and operations.

Good in concept, but challenging in practice, and particularly so in government, where the negative consequences of realized risks too often outweigh the positive reactions to realized returns. A quandary to be sure, but risk management lies at the heart of innovation, and innovation is central to making government more productive, more connected, and more relevant—so everyone wins if a better balance can be achieved.

T hird, in a world where technological innovation is increasing exponentially, government should be at the leading—not the trailing—edge of innovation adaptation. In the financial world, as a comparator, “FinTech” has captured the imagination of the press and consumers, and the attention of investors, incumbents and regulators. From crowd-sourcing to peer-to-peer lending to mobile payments to roboadvisors to crypto currencies, financial innovation has the potential to improve the efficient allocation of capital to support growth, to reduce frictions and costs in the facilitation of payments, to transform the collection and analysis of data for decision making, and to broaden the accessibility of financial services.

The FinTech companies driving this financial innovation, usually innovative start-ups, are targeting financial intermediation functions for innovation, not challenging the institutions themselves. Their tools of the FinTech trade are new platform technologies, huge scalability, big data, cloud computing, and customer-centric business models.

Which raises the obvious question: Why not “GovTech”? Many of the core functions of government should be equally amenable to such innovations, and in so doing reduce public sector costs, increase government productivity and enhance the public’s experience of dealing with government.

There has been some such experimentation in the healthcare and education fields, but no one would describe Canada today as a leader in this field. There is likely even more scope in the back-office functions of government such as tax administration, transfer and pension administration, program delivery and information delivery. An added benefit of being a leader in GovTech is that the pioneer companies developing these innovative technologies and services will have enormous export potential to market these products to governments in other countries.

Fourth, in a world in which the revolution in communications technologies is totally transforming how people interact, government communications should join the revolution. This is about attitude and approach, not just technology.

Social media is disruptive—multiple voices, many platforms, competing narratives, hugely decentralized, totally interactive, very dynamic. All this is challenging for governments for a variety of reasons, but also rewarding. The reality, however, is that the public has already made the switch, particularly the younger generation, and the relevance of government communications is a real and present issue. The upsides of more open communications utilizing social media are clear: an opportunity to engage Canadians on issues in real time, to listen and interact as well as broadcast, to create new virtual networks, to give voice to government science. The downsides are loss in central control of communications and lack of a single message. The choice seems obvious.

Fifth, in a world of rapidly shifting career options, we need to make working for government as exciting as working at, say, Google or Facebook, and as meaningful as joining a social enterprise such as WorldVision or the United Way. Challenging, to be sure, but also doable; provided we update the brand promise.

The renewed brand must be about the potential of public service work to make a real societal difference, and this requires public service managers to delegate responsibility and encourage innovation. It is about the public validation of the role and work of public servants by the government and the public at large. And it is about active, not passive, recruitment of the next generation of Canadian leaders to give a public service career consideration, not for the pension but because the country needs their talents.

Simply put, a nonpartisan and empowered public service, one that is attractive to Canada’s best, brightest and most entrepreneurial talents, one where excellence is the benchmark and one in which risks are to be managed, not avoided, in the pursuit of innovation, is one that can contribute enormously to Canada’s long-term success as a robust democracy, strong economy and vibrant society.

Contributing Writer Kevin Lynch, Vice Chair of BMO Financial Group, is a former Clerk of the Privy Council, and former deputy minister of Finance.