The world we knew is no more. Change is essential. That is Prime Minister Mark Carney’s mantra, and there’s no doubt that change is needed. We are confronted by a hostile neighbour, face a disrupted global geopolitical landscape and have a structurally weak Canadian economy. The question, however, is less what the government intends to do, but rather can it deliver on the new policy directions it is promising?
This challenge is made more difficult by years of poor policy execution and inadequate service delivery by government — failures that Carney has explicitly recognized. His solution is to create powerful, special-purpose agencies to deliver on his policy agenda rather than fixing existing operational problems.
To date, the Carney government has launched five such agencies to turbo-charge its goal of “getting things done.” They are the Major Projects Office, the Defence Investment Agency, Build Canada Homes, the Financial Crimes Agency and the Canada Strong Fund. But are they the right way to fix the operational challenges of delivering on ambitious policy promises? There are good reasons to worry that this approach carries more risks than benefits.
The new agencies
The Major Projects Office (MPO) is intended, according to the legislation behind it, to ensure that key projects to boost the economy and encourage investment will be fast-tracked without harming the environment or Indigenous rights. The minister overseeing the MPO has significant powers to override the authority of other ministers in “projects of national interest” and to speed up approvals through regulatory over-rides. The legislation is silent on the MPO’s administrative authorities and whether its staff would be public servants. The office’s role is to support the minister in exercising the exceptional powers bestowed by the legislation.
But where does that leave existing organizations, such as Natural Resources Canada, and regulatory bodies, such as the Impact Assessment Agency? Are they being circumvented for major projects only? If so, is this the right approach to reduce the excessive regulatory burden which is holding back Canadian productivity and growth? It appears that the government has given itself the power to ignore existing statutes and regulations for major projects, but is not acting to fix the regulatory problems that plague the vast majority of firms and the economy.
Capacity for Change: Designing a Public Service Built to Deliver
The Defence Investment Agency (DIA) willalso have powers to operate across ministerial portfolios and authorities to move important military and security acquisitions forward quickly. Its minister has a broad mandate to recommend, implement and promote policies to produce, purchase and fund items related to national defence and security. The DIA wraps in many procurement functions and powers from National Defence, the Treasury Board Secretariat, Public Services and Procurement Canada, and Innovation, Science and Economic Development Canada (ISED). Quite an arsenal!
The DIA is to have a CEO who functions as a deputy head. But the powers the minister can delegate to the CEO are far-reaching and quite different from anything a regular department would normally be empowered to do. How these authorities will square with the powers, duties and functions of other ministers and their departments remains to be seen. Also worth watching is whether the DIA will attempt to broadly reshape military and security acquisitions or focus solely on major purchases.
The appeal of moving faster
Build Canada Homes (BCH) has an ambitious stated purpose to “promote, support and develop the supply of affordable housing in Canada,” as well as innovative and cost-effective housing construction. The agency is to have wide-ranging powers which allow it to do whatever the prime minister directs within a broad mandate that veers outside the traditional federal housing lane.
Many functions of BCH duplicate those of the Canada Mortgage and Housing Corporation and Infrastructure Canada, which could be adapted to include the new agency’s goals. Besides the announcement value of a shiny new entity to tackle the affordable housing crisis, presumably the government believes that a smaller, “high-powered” organization will be able to move faster to get things going. Yet startup and teething costs for new organizations are usually underestimated and co-ordination with existing ones can be challenging.
The Financial Crimes Agency (FCA) is being established “as a specialized federal law enforcement agency” to investigate financial crimes and help recover the proceeds of crime. But the functions proposed for the FCA are already the responsibility of the RCMP. Why duplicate the RCMP’s federal policing role? Why not reinforce this aspect of its mandate with additional powers and resources? In short, why not fix the RCMP rather than add another layer of complexity to policing?
Canadians doubt the public service is ready for future challenges
The Canada Strong Fund (CSF) will be an arm’s-length, Crown corporation that is being advertised as “Canada’s first national sovereign wealth fund.” It is to be seeded with an initial investment of $25 billion financed by money the government borrows. Besides the novelty of being a wealth fund financed by debt, the CSF is the newest member of the “federal financing ecosystem.” This is an elegant term to describe a crowded and overlapping field including the Business Development Bank of Canada, Export Development Canada, the Canada Indigenous Loan Guarantee Corp., the Canada Growth Fund, the Canada Infrastructure Bank and Farm Credit Canada.
The obvious question is whether a clear need exists for more government bodies that can make investments in the public interest. Why add to an already long list of government financing institutions rather than adjust and focus the mandates of similar organizations?
Are these new agencies necessary?
Government is already complex. Are the functions being assigned to the above agencies outside the mandates of existing government organizations? The answer is no. Their legislative purposes fall squarely within the purview of one or more existing federal entities.
Creating something new can attract talent and bring energy into government, but it often involves hollowing out existing organizations. This is disruptive. It also introduces frictions, costs and inefficiencies — and can take years to sort out.
A sense of urgency in these difficult times is a virtue. “Getting things done” more quickly is a national necessity. But adding organizations when similar ones already exist is seldom the answer. The lasting solution is not found in workarounds. It lies in reforming, modernizing and streamlining how the federal government operates so that it is an effective provider of public policy today and into the future.
