Public Accounts Committee on Nov. 28th, 2006

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Why is there such a high rotation rate for deputy ministers? You experienced it in your own career. Why were people switching you from departments every two years? At a maximum, I think you were in a department for four years. What precipitates this high rotation rate?

[Arthur Kroeger]

There's a two-part answer to the question. There was a time in Ottawa, when Mr. Trudeau was Prime Minister and Michael Pitfield was the clerk, that it was actually thought to be a rather good idea to have regular turnover of ministers and deputies, that it was kind of stimulating to have a new person to deal with and new ideas brought to bear, etc. That's long gone, and the general view is that you do want continuity, that you do want stability. I think a fair amount of headway has been made in that direction.

In my own case, I was a deputy for 17 years. Of those 17 years, I spent five years in the Department of Indian and Northern Affairs, which is a pretty long time; I spent four years in Transport—I'm rounding it a little bit, but that's close—and I spent four years in Employment and Immigration. Those were three departments where I served for quite a long time.

As a general rule in government, three years is a good period; four years is probably better. It isn't the case that seven years would be better yet. I mean, at a certain point you meet yourself coming around the other way, and it's time for somebody with fresh ideas to come into the department. But I think three or four years is a good rule.

Now, why can't you do that? It's because things happen. A deputy minister gets an offer from the Bank of Nova Scotia, sends in a resignation, and you have to replace him.

Then you get other things that will happen. The Prime Minister runs a cabinet shuffle and for one reason or another will appoint Minister X to a department where maybe the minister doesn't have any knowledge or isn't all that comfortable. You then find an experienced, very knowledgeable deputy and say, “I know it's a good idea to leave you in your job, but it's even more important for you to go in to support this new minister I've just appointed, so will you please go?” There are cases like that. There are unexpected things that happen.

I don't think anybody today says what Mr. Pitfield and Mr. Trudeau believed, that turnover is a good thing. What they cope with is a number of practical problems of limiting turnover to what you'd really like it to be, and what you'd like it to be is three or four years, in my book. But sometimes stuff happens and people get moved more frequently. It's not a good thing.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

We seem to have found that in departments that are problematic—Indian and Northern Affairs in the past while has been problematic—the turnover rate is much higher. In fact, I can't remember exactly what the average is for deputy ministers, but it was quite low, and it was skewed because at Census Canada you had someone there for 20 years, so the actual numbers are below these numbers.

I find three or four years to be not a very long time, especially when I take into context Mr. Wouters' testimony before us. He said that when he was first made deputy minister, it took him really about two years just to figure out the department.

Prior to Prime Minister Trudeau's time in office, what was the timeframe? Was it three or four years, five years, seven years?

[Arthur Kroeger]

It was probably somewhat longer. If you want to go back a long way.... Every time I have occasion to drop in on the Deputy Minister of Finance, which I don't do very often any more, I marvel at the row of pictures on the wall of people who served as Deputy Minister of Finance between, if I recall, 1870 and 1891—you know, 20 or 25 years in a job. Nobody does that anymore.

I think the tenure probably was longer in the fifties and sixties, although my recollection of that is somewhat limited.

Opinions will differ. Wayne Wouters is quite right that you really hit your stride after the second year. It doesn't mean that you're useless in the first two. If you're an experienced official and you've been a deputy elsewhere, there are a lot of things you can handle, because they require a general knowledge of how government works rather than the detailed knowledge of that particular portfolio. Nevertheless, you're better in your second year than you were in your first, and you're probably better in the third than you were in your second.

So I'm with you entirely on the desirability, but you have to recognize that a prime minister—and these are prime ministerial appointments—can face all sorts of situations that make it necessary to move people, even while recognizing that it's not a good idea.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

So back to my original question. We find problematic departments with turnover every six months, and you were saying things happen. What we find is that when things are happening in departments that should not be happening, or are not happening but should be happening, we end up with deputy ministers in front of us who shrug and say they've only been there six months. Then six months later, once again we're facing someone who's saying that he or she has only been there six months.

So fundamentally you're saying that the Prime Minister is the one we should be calling in front of us, since there doesn't seem to be any accountability from the deputy minister, because the turnover is so rapid.

When you were a deputy minister, how often did you disagree with your ministers? What were the different ways your political masters had of dealing with that?

[Arthur Kroeger]

I'd have to think for a bit.

In any working relationship, between a director general and an ADM, between a regional director and a director of operations, or between a deputy and a minister, day in and day out you don't see things identically. You argue it out.

You're in the Department of Transport and you've got a problem with grain transportation. “Well, I think we better go talk to the wheat pools.” “No, Minister, you don't want to do that. The first thing you want to do is talk to the Wheat Board.” That's the bread and butter of being in government.

Regarding bad disagreements, I don't remember ever having any big fights or terrible knock-down, drag-out arguments with ministers. You could have disagreements about the right way of dealing with a problem. This does come up in the field of aboriginal affairs, because that's such an emotional subject for everybody. Collectively, Canadians are not comfortable with much of what they see in the aboriginal world.

A newly appointed minister could come in and feel very strongly that we should do this. Sometimes you have to say, look, we tried that three years ago and here are the results, so think about this a bit before you push us down that road.

Those kinds of things can happen. Even after you've argued things out, and even when you have experienced people on both sides—the minister and the deputy—you can still get quite different views about what ought to happen. That's good; that's part of government. You shouldn't always be agreeing with your minister, nor should your minister always be agreeing with you. Usually you get a better result if you argue these things out.

I'm sure there are various past colleagues of mine who had terrible disagreements at one time or another, because sometimes personalities clash. I must have been lucky. I don't think that ever really happened to me on any significant number of occasions.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Wrzesnewskyj. Thank you, Mr. Kroeger.

Mr. Fitzpatrick for eight minutes.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Thank you very much.

I find your testimony quite positive, Mr. Kroeger. I share many of your sentiments. I think every organization or system is focused on providing a service or a product to ultimately a client or a customer, and government is no different. If we took some of the systems we've created in Ottawa and imposed them, let's say, on Toyota, I think it would take maybe a year before General Motors had completely surpassed them, and they'd be the ones in the financial pages with problems.

Generally speaking, in the private sector I think there are lots of case studies to show that companies that got to be dominated by number crunchers and accountants and audits are the ones that are going to hit the skids and fall behind the competition.

Another thing I recall from reading is that some of the really strong management people, such as Deming, said one of the keys in any organization is rooting out fear in the organization so that people can get on to do their jobs. In government I share your concern about risk-adverse things. There are so many rules and so many complications and cross-currents that it's darn hard for a lot of people to do their job, so that “when in doubt, mumble” might be the best strategy.

It leads me to one conclusion: what government should be doing is simplifying this excessive internal regulation, having fewer but more effective rules.

I'm pleased to see that you've come on board with our recommendation, which came out of our public accounts, to move toward the accounting officer concept, because a lot of the shenanigans we've seen in this committee over the years, it seems to me, we would have nipped in the bud right at the onset. So I appreciate your conversion to that; I see it as being one of the simplifying processes, so that we wouldn't need as many rules.

Another one that came up that intrigues me, because we saw it with the gun registry, is.... I think most of us suspect there were political overtones to the whole deal—that's another issue—but the Comptroller General and the rules made it quite clear, and the Auditor General made it quite clear, that you have to go to Parliament to get these expenditures approved. A deputy minister and her cohorts decided to find a creative way of getting around that.

We made a recommendation in this committee that if there were a disagreement between a deputy minister and the Comptroller General on a matter of accounting, basically the opinion of the Comptroller General should be final and conclusive and bring this thing to an end. I think that would have resolved the problem here, and the political masters would have had to face the music with Parliament on something that was really untoward in terms of Parliament and everything else.

What would be your reaction to our trying to simplify things and bringing in a rule like this, that if there's a fundamental difference over accounting between a deputy minister and the Comptroller General, the Comptroller General's opinion should be final on this matter?

[Arthur Kroeger]

I can see the point of that, but it gets a little more complicated when there's a disagreement between a minister and the Comptroller General, who is an official. Then the minister is ultimately accountable for what happens, including things having to do with rolling money into another fiscal year. But if a minister directs, it may be that it has to happen.

The formula in the Accountability Act is another way of dealing with it, wherein if there were a disagreement between the minister and the Comptroller General, the ministers of the Treasury Board would have to decide it.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

People would probably brush this off, but my thought on the Comptroller General's office is that it should be almost like the Auditor General's in terms of independence from the political operations. Maybe it isn't right now, but maybe it should be.

[Arthur Kroeger]

I think as a general rule that's a good principle. It would be a foolhardy deputy minister who got an opinion from his or her chief financial officer that said, “You can't do that” and said, “I'm going to do it anyway.” That's a recipe for real trouble. You don't ordinarily do that; in fact, you shouldn't do it at all.

And in the same way, with the Comptroller General, it's pretty courageous for somebody--

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

We must have a lot of foolhardy people here, because I have gun registry, sponsorship, and the Royal LePage thing probably cropping up. We have lease properties and a fairly long list of things where I would say people have decided to do something that I find not exactly correct, and that's why it comes up before this committee. And boy, we've had lots of problems, sir, with Indian Affairs issues. It's a head-scratcher for me. It's a system that, to me, is totally out of control, it almost seems, in some cases, and we're all frustrated with it. The temptation is to order more rules and inflict more pain, but I don't know if we're getting anywhere by doing that. That's my little spiel for the day anyway.

[Arthur Kroeger]

All I'll say is I spent nearly five years dealing with the complexities of Indian Affairs, and it looks a lot easier from the outside than it does from the inside.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

I have just one other comment. Another point Deming said is that consistency of purpose was very important too, and that lends itself to the importance of having some tenure with the deputy ministers. The Trudeau notion I think has to be total absolute nonsense. I can't see running something with that mentality. It would be chaos in the public service. Maybe we have to root that out and get back to some stability in how we run things here.

[Arthur Kroeger]

I think you're now down to an average of three years, which means that some people spend a lot more than three, even if there are less, so three years as an average is a lot better than it used to be. Whether you can make it even better...you might be able to.

Just before we conclude this exchange, I want to say that I wrote down that phrase, “root out fear”, because you've said in three words what I tried to say in my opening statement.

[The Chair, Liberal, Shawn Murphy]

There are just a couple of issues I want to pursue myself, Mr. Kroeger.

First of all, when I look at what goes on in the committee and the problems we've had, one of the issues I see is with a culture of proper administration in some of the departments, and you're quite right, the deputy ministers have a very difficult job. There's a lot of direction from the centre. They're dealing with a lot of horizontal issues, policy issues, and they have the press, the opposition, the NGOs, the courts, access to information requests, endless consultations with stakeholders, etc. It just seems to me that over the last perhaps generation there has been a drifting away from what I call probity and prudence and good administration in their mindset. As Mr. Williams pointed out, we have situations in which even the chief financial officer didn't have financial training. That, to me, would send out all kinds of red flags as to the administration of this department.

Do you have any recommendations on how we can take the pendulum and swing it back? Realizing the difficulties these people are under, the stresses and the challenges, we have to somehow implement a system from the top. It's a cultural thing. I agree with you 100% that we cannot implement 233 additional rules--that's not the way to go--but we have to have a culture of what I call proper administration, and it has to be open and transparent, so that the taxpayers of Canada, when they go to bed at night, are sure that their tax money is spent wisely.

[Arthur Kroeger]

I'll confess to being wary about nostalgia. I can remember people who said things really worked well on the Treasury Board 35 years ago; that was a golden age. I was in the Treasury Board 35 years ago and I can tell you it wasn't a golden age. Whenever something gets far enough in the past, one can lend it greater quality than it may deserve.

[The Chair, Liberal, Shawn Murphy]

The good old days.

[Arthur Kroeger]

Yes, the good old days, actually, weren't all that great. At least some of them that I lived through weren't all that great.

Having said that, I would go on more substantively to say that it's important to focus on the kinds of problems that you see in the system today, and above all, what you as a committee can do that would be most conducive to creating a culture of responsible conduct, a culture of concern for the public. You can make a case that people had greater concern for the public then or that they have greater concern for the public now. The important thing is, what can you as a committee do to increase sensitivity to public needs and to improve the functioning of government? If you can focus on what it is that's possible to do, I mean really in the realm of the possible, that's the place to go.

The thing to avoid is this. When Mr. Mulroney was Prime Minister, at one time, he started using the phrase “error-free government”. He was still new. When he'd been around a little longer, I think he understood there is no such thing. Attempts to achieve error-free government merely get you bureaucratic government without necessarily making government any less prone to errors at all.

Look, we've had five or six years of re-bureaucratization, and this morning the Auditor General brings in a report that does not have less content in it than it would have six years ago. So there are certain things that are done that don't get you results and there are certain things that you as a committee do that probably could get results. That is the toughest job you have before you, I think, to identify what the things are that you as a committee do that would not proliferate rules but would be conducive to the emergence of a culture.

[The Chair, Liberal, Shawn Murphy]

Thank you.

I have one other question, Mr. Kroeger. In the Federal Accountability Act there are a number of additional oversight bodies, the permanent director of advertising, the director of this.... Do you think, from your 50-year experience, they are going to be helpful to the situation?

[Arthur Kroeger]

Well, when I first saw the Federal Accountability Act I ventured an opinion--it may have been to this committee or to another--that probably a more experienced government wouldn't have put all those things in it, because some of them are more useful than others. It's a judgment call.

There's a proposal to create a director of public prosecutions. Well, practically, all prosecutions are handled by the provinces, so there's a question mark of how busy that official is going to be.

The Auditor General said Public Works actually has a quite sophisticated system of procurement. Do you want a procurement auditor? It's a call. An elected government has a perfect right to say, “Yes, we want a procurement auditor.” My own opinion, and it's only an opinion, is there are probably more oversight measures, more controls in the Federal Accountability Act than are strictly necessary, but the parliamentary process is to work those out. I believe the House and Senate are still in dialogue, so we'll see what the final version of the bill is.

[The Chair, Liberal, Shawn Murphy]

Okay.

You had a quick question, Mr. Poilievre.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

The director of public prosecutions doesn't deal with provincial prosecutions; it deals with prosecutions under federal law and with prosecutions that would otherwise have been done by the Attorney General. It just makes the DPP more independent from the cabinet of the day and more transparent.

The communications between the justice minister and the DPP have to be done in writing. In addition to that, I think members on the LIberal side moved that this individual be approved by the House of Commons before being appointed, which is a very interesting development.

I don't think the Accountability Act is about more rules. In fact, it isn't about more rules. There are not a whole lot of new rules in the Accountability Act. The new rules were already created by the previous Treasury Board president, as you pointed out. We call them Reg's rules, and there is a book.

I remember that when we first got there for our briefings, they said, this is the book, this is what we deal with, these are the 200 new hoops we jump through every morning on our way from our coffee to our desk.

I guess I'll pointedly ask the question. We get a lot of generalizations in this committee. People come before us and say we need more effort put on this, or more effort put on that; we need fewer rules, more rules, more oversight, less oversight. What I'd like from you is a to-do list, and I mean a very practical to-do list. What rules do you want chopped? What steps do we need to take? If you could ask the President of the Treasury Board to do three very tangible, clear, practical things, what would they be?

[Arthur Kroeger]

I think the way to get the answer to that question is to ask the blue ribbon panel. This is a very complicated area. I can't give you an answer saying to wipe out every third regulation that was passed, or take out all the ones that have to do with audit. It's more complicated than that.

It is exactly why Mr. Baird appointed the panel, which has been at work for about six months and has had a lot of expert advice. I saw a list of 27 recommendations. I don't think they're going to try to deal with any committee with 27 recommendations, but that's how detailed their work had to be.

I think that's the right way to come at the kind of question Mr. Poilievre raises; that is, when you're trying to thin out the wiring, get a good electrician to do it for you. I hope you have three good electricians who are at work on that problem. It is an important problem, and I think if it can be done well, it will make government work better.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Poilievre. Thank you, Mr. Kroeger.

That concludes our time, Mr. Kroeger. Do you have any parting comments to leave us with?