Public Accounts Committee on June 12th, 2018

[Kelly McCauley, Conservative, Edmonton West, AB]

What about indigenous services, specifically?

[Michael Wernick]

Yes, there were more than 10 Auditor General chapters over the years on that specific department. That specific department was a legal construct based on contribution agreements, and the men and women who went into that department did the best they could with outdated legislation and contribution agreements. The path forward to do better on indigenous services was pointed out by Sheila Fraser in the spring 2009 report, which is to have a lot of the programs on a statutory basis, to have strong local delivery and service organizations, to build the capacity in the communities. It's not through any lack of effort or competency—

[Kelly McCauley, Conservative, Edmonton West, AB]

What is your level of confidence that the issues identified in the AG's report on the indigenous services delivery are going to be addressed?

[Michael Wernick]

I'm confident they are being taken very seriously by the minister and the officials and that if you ask them back a year from now, they'll be able to report on progress.

[Kelly McCauley, Conservative, Edmonton West, AB]

You have confidence.

[Michael Wernick]

Absolutely.

[Kelly McCauley, Conservative, Edmonton West, AB]

Let me ask you this, just continuing on about the public trust. Have you any concerns that there are other major projects across the government that are being given what we call “the Phoenix treatment”, perhaps a lack of transparency or perhaps not proper reporting, and are going down the path of another Phoenix-type project?

[Michael Wernick]

You are asking me if I know about unknown unknowns. One of the things I have trouble with in the Auditor General's language is—

[Kelly McCauley, Conservative, Edmonton West, AB]

My question is whether you have concerns that perhaps this is existing in other departments.

[Michael Wernick]

I have no doubt that errors and mistakes will be made across the public service. We're more than 300 organizations with 5,000 executives and 260,000 human beings coming in, and there will be—

[Kelly McCauley, Conservative, Edmonton West, AB]

Are there levels of the issues we had with Phoenix, for which there seemed to be an extreme lack of accountability to address the situation before it went off the cliff?

[Michael Wernick]

I'm not going to guarantee it will never happen, but I do have some confidence in the fact that we're here today and that with all of the multiple lines of accountability and oversight in government departments, these issues are surfaced, they are identified, remedies are put forward, and in many cases they are corrected.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Wernick and Mr. McCauley.

Mr. Christopherson, you have seven minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair.

First off, thank you very much for your attendance. It's good to see you again.

May I also echo your comments about the excellence of our public servants. I've served at all three orders of government and have said since almost 30 years ago how blessed we are. At that time I meant at the city level, and now I mean also in my experience at the provincial level and at the federal level. We are truly blessed, as a country, in the calibre of citizens who decide to put their professional careers and their abilities and their passion into making Canada a better place. We are so, so blessed. I say that all across the country, and I say it internationally, and I mean it from the bottom of my heart. Where there are problems, in the main it is not those individuals who are the problem; it's the systems and the procedures that the rest of us and the senior management have imposed on them. I think that's a great place for us all to start and to agree that individually we are so lucky as Canadians in terms of the people who choose to be in our public service at all three orders of government.

Second, I feel the need to nitpick a little bit. You talked about how you recently offered new information to the Auditor General, leaving the impression that it was graciously offered. Given the fact that the federal legislation is absolutely clear that the Auditor General is entitled to anything he or she wants, I am reminded of big corporations who brag to their new employees about all the benefits they're going to get, neglecting to mention that it was the union that actually fought for those rights and that some of us had to strike for them. The company then takes the credit, saying, “Here are all these wonderful things that we give you.” I just want to mention that if anybody's giving anything, it's the Auditor General respecting the niceties of how decision-making is made at the cabinet level, but at the end of the day the Auditor General of Canada is entitled to whatever information the Auditor General of Canada wants, and that's what the legislation says.

Now to the crux of it. I was so hoping this wasn't going to happen. What you said today, sir, is like my worst nightmare come true after I read this message from the Auditor General. When I read this, my jaw was on the floor, and I think there are a number of colleagues who would say they felt the same way. It's like, “Wow!” It was the opposite of what you are saying, Mr. Wernick. You're talking about how this is a one-off. This is a message from the Auditor General—not just a chapter, but a formal message from our Auditor General—the taxpayers' and citizens' best friend on Parliament Hill to Parliament, and what it says is we have a massive cultural crisis.

Therefore, when I listen to your remarks today, with all due respect, it's one of two things, and I say this to my colleagues: either we have a deputy of the Privy Council who has his head buried in the sand and is in complete denial about what the cultural problems are, or we have an Auditor General who's off the rails. There's not a lot of grey area here. There's not a lot of nuance.

What you're saying today, Mr. Wernick, is almost the opposite of what the Auditor General has said about what the problem is, what the solutions are, and what the observations are.

Where does that leave us? I thought we were going to have a Clerk who was going to come in and say, “We agree. We appreciate the focus on the problem and we want to be part of the solution. We want to work with you, public accounts, to be a part of that solution, with all of us working together.” Then I was trying to think how we would do this. It's brand new. It's kind of exciting, but, you know, it's really serious. We've never done this, not in my time, so how were we going to do it?

Instead, it's like we're at below zero—and don't ever refer to an Auditor General's report as “zero”, please. We are in deep trouble right now according to the Auditor General, whose sole mandate—and remember he's an agent of Parliament—is to make sure that Canadian taxpayers' money is well spent and they're getting the services that they deserve and are entitled to, but we have a Clerk of the Privy Council who's coming in and basically saying, “No, no, no, it's no big problem; no, no, no, it's not that at all. I disagree with the Auditor General. This is just another one-off problem. We'll work on it and we'll fix it.”

Well, Chair, that's not where we are. All I can say to you is that it seems to me that at some point pretty soon, we as a committee need to decide where we are. Do we agree that the Auditor General is off the rails, or do we agree that we have a huge problem that's made even more difficult by the top of the bureaucracy not accepting there's a problem?

Now, like most things in life, I suspect that somewhere in there is where we need to be. People know how I feel about the Auditor General and where I will likely be when we have those discussions in private or public, but I'm fair-minded. I like to think I'm fair-minded. I'm open-minded. I'm angry, but I'm open-minded about the process.

It seems to me, Chair, that at some point we need to find a way that we can decide where we are on these two extreme positions. The positions do not line up. Do we support the Auditor General or do we support the Clerk of the Privy Council? It seems to me that until we decide that, we can't decide on our course of action, because believing one takes you down one road and believing the other one takes you down another road. We could have the committee flying all over the place and being totally ineffective, which then would be us not doing our job and us letting our culture fail us.

Those are my thoughts, Chair. I'll leave it at that and hear what my esteemed colleagues think.

[The Chair, Conservative, Kevin Sorenson]

Unfortunately, your time is up with 10 seconds left. You've given us some things to think about here. Some of the comments that maybe Mr. Wernick would have—

[Michael Wernick]

I would hope, Mr. Chair, that I get a chance to respond to some of that.

[The Chair, Conservative, Kevin Sorenson]

—will have to be in someone else's time.

We will go to Mr. Massé, and then you can work in whatever you so choose as the time goes on.

Go ahead, Mr. Massé, please.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chair.

Mr. Wernick, thank you for being here with us this afternoon. We are pleased to see you here. It is important for us to hear your testimony. As my colleague Ms. Mendès said, we are pleased that you accepted our invitation on such short notice.

I would like first to respond to what our colleague Mr. Christopherson said. My colleagues know that I spent close to 17 years in various departments in the federal public service. So I can attest first-hand to the fact that many public servants work extremely hard, are committed and dedicated, and offer important services to people right across Canada. There are many examples of success in the public service.

I am thinking for instance about the Public Service Pension Centre in Shediac, which successfully completed a major modernization initiative in recent years.

I am also thinking of the largest documentary imagery centre, the Digital Imagery Research and Development Centre, in Matane. It was in fact developed by public servants who are dedicated to serving Canadians and other departments.

I am also thinking of the 40,000 Syrian refugees we welcomed recently, thanks to a department and public servants who were able to turn on a dime and do the important job they were given.

That said, I also fell over backwards when I saw the Auditor General's report and the message he sent us. This important message shook us and shook the public service and its management. I would even say it made them angry. The Auditor General is not the only one to say there are problems. Obviously, it is not black or white. There is something in between. Clearly, there are problems in the public service. As you pointed out, with 260,000 public servants, of course not everything is perfect.

I simply wanted to point that out. I was reading something by Donald Savoie recently, someone you are no doubt very familiar with. He was also quite blunt. I would like to hear your thoughts on what he said. I will read it out in English since it was written in English:

...the public service is now bogged down by rules, oversight and a controlling [centre] that it has “lost its way” and ability to manage....“they have learned the art of delegating up to PMO and PCO” rather than down to the front-line workers, as they did in the 1970s and 1980s, to get things done.

So I would like to hear your thoughts about how we have tackled certain problems in the public service and about potential solutions. As I said, it is not black and white. There is something in between.

You produced an annual report that is very positive on the whole. I know, however, that you are aware of problems that should be addressed and I would like to hear your thoughts on that.

[Michael Wernick]

Thank you for your question.

I am not saying the public service is perfect or does not make mistakes, even serious mistakes, from time to time. It was created by human beings and is managed by human beings. Further, its services are delivered by human beings. So mistakes are made. That said, we have a strong culture of learning and feedback. I invite you to look at the chart I gave the clerk.

There are many layers of oversight, lines of accountability, and feedback on the senior public service, all of which are, in an engineering sense, a negative feedback loop: what you did wrong, what you could have done better. There are almost no positive feedback loops other than performance, pay, and promotion within which senior public servants operate. I think you have to look very deeply at the incentives structure, which is the one in which human beings act, and culture is shaped by incentives and disincentives. There are opportunities to create incentives and disincentives that reward innovation and creativity, or that stifle it. That's a big topic, and I'm happy to exchange with you on that.

The importance of my report is it is a very rare opportunity to talk about the successes and the accomplishments. I've never been asked to a parliamentary committee to talk about three annual reports on the state of the public service. I've never been asked a question about the innovation fair, which showcases all the examples of letting people loose and asking them to come forward. I've never been asked a question about the prize challenges through which we're trying to develop solutions by working with outside partners. I could go on and on about those, but because your attention as parliamentarians, quite reasonably, is drawn to all of the feedback loops from almost a dozen institutions that are there simply to look very closely at particular issues and point out what could have and should have been done better.

I'm not complaining about that. I think that is the explanation for why we are as good as we are.

To jump to Mr. Christopherson's question—and by the way, it's the Auditor General who calls his opinion pieces “chapter zero”—if sweeping generalizations are made about the culture across 300 different organizations and all of their subunits spread across 10 provinces, three territories, and 100 different countries, none of those generalizations will stand up to scrutiny, and I bring you evidence. I bring you three annual reports full of stories showcasing the accomplishments and the successes of public servants. I bring you those six indicators that tell you of this success. If you want to ask somebody who knows organizations, I can suggest another witness to you: the global managing partner of McKinsey, who's looked at every big, top, high-performing private sector company in the world. He's is a Canadian, Dominic Barton. He's worked for Stephen Harper as part of his advisory committee on the public service and he's worked for Prime Minister Trudeau as chair of the growth council. Ask him what he thinks about the public service of Canada.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Wernick.

I would like to get back to your report, which is an important document. As you said, all or the majority public servants consult it and read it attentively. I noted an important finding.

[The Chair, Conservative, Kevin Sorenson]

Be very quick.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

On page 33, you say that “43% of public servants feel that the quality of their work suffers because of too many approval stages.”

You said earlier that you would like to talk about the structural reforms you could make. I would like to hear what you have to say on that specifically.

How can your reduce the approval stages in the federal public service?

[Michael Wernick]

I would like to say first that there are reasons for the processes, such as protecting public funds and ensuring that everything is done properly. There are checks at several levels to protect the public interest.

This has to be balanced with due diligence, innovation, and creativity.

I don't think there's a single answer to that. You can read about 30 speeches that I've given on that subject. A lot of this is what we do to ourselves, public servant on public servant, about creating rules and processes. I think the public service is ripe for a deep structural reform in the coming years to de-layer it and de-bureaucratize it. We've made some progress, but I think there's a lot more that could be done.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Wernick.

We will now move to the second round and Ms. Raitt.

[Lisa Raitt, Conservative, Milton, ON]

Thank you, Mr. Chair.

Thank you, Mr. Wernick. It's really nice to see you. As I look around the table, I'm probably the only one you have worked with in the past around the cabinet table, so I may be coming at this from a different perspective.

I'm glad you mentioned your speeches. I was taking a look at one you gave to the ADMs on April 11 that caught my attention. In it, you talked about the future, and I think that's fair enough. We know what's happened in the past; what are we going to do going forward on the pay system?

You said you were going to take all of what is emerging in disruptive technology, rethink the technology, project management, and procurement, and apply it to getting us a pay system that works. That will be one of the signature projects of the next few years.

That, to me, means we really have to understand what happened in this payroll system, specifically at the very end of the decision-making with respect to when it launched.

The Auditor General said that part of the reason he wrote this message was to explore the cause of the failures. One part of the cause of the failures that I don't see anything about is the one I want to discuss with you, knowing we've both had experience around the cabinet table.

Mr. Wernick, my understanding is that you became the Clerk of the Privy Council on January 20.