Prologue

A couple of years ago, the name of Revenue Canada morphed into the Canada Customs and Revenue Agency. It was not just a name change: the government was concerned that its overly-centralized, rules-oriented bureaucracy wasn’t well equipped for collecting taxes from Canadians. So, it hived the tax man and his 40,000 employees off to be on their own, with a prescriptive culture based on values and the authority and flexibility needed to do the job right.

The new agency structure is different from the rest of the public service. It has a management board that oversees its strategy and forward planning, much like a board of directors in the private sector. It has a performance management system that ties senior executive pay more closely to performance criteria. It also classifies its own jobs and bargains with its employees to meet its own needs.

Most would agree that a streamlined, efficient revenue agency designed for a complex, competitive, globalized world is a good idea. However an important question remains unanswered: if the system was not good enough for the people who collect money from Canadians, why is it good enough for the other 200,000 public servants who spend that money on citizens’ behalf.

The structure and machinery for this side of government activity is largely what it was 30 years ago: top-down, organized in stand-alone silos, rules-oriented, dependent on a five foot thick personnel and financial management manual that says how things are to be done and how public servants are to be managed and paid.

Canadians should not take kindly to a government that creates an efficient tax collecting machine with no corresponding action to ensure that the machinery for redistributing their taxes is equally modern and efficient. This “governance deficit” in our federal public service amounts to a quiet crisis. It costs us dearly, but few know about it, fewer talk about it and hardly anyone seems to care.

I use the word governance for a reason. “Corporate governance” is a topic of daily discussion everywhere these days. “Governance” is a catch all for the tools, principles and approaches that organizations use to go about their business. It encompasses operating values, behaviours, traditions and other elements of organizational culture, as well as structure, decision-making processes and accountability mechanisms. It speaks to the way organizations treat and involve their employees, clients or customers, and suppliers in their operations. Governance is the process through which each of these internal elements responds to change in the outside world.

Good governance and good performance go hand in hand. Companies with strong corporate governance are generally efficient and ethical. Firms with questionable governance practices may run afoul of regulators and are punished, sooner or later, in the marketplace.

The same relationship between governance and performance should hold true in the public sector. Governments that are open, ethical, efficient and accountable are likely to deliver the mix of policies and services citizens want.