Notes for an Address by
Jocelyne Bourgon
Clerk of the Privy Council and Secretary to the Cabinet

APEX Forum

Ottawa, Ontario
May 27, 1997

INTRODUCTION

Thank you for your invitation. It is good to see you all.

Your theme for this year’s conference "The Public Sector: Contributing to Canada’s Competitive Edge" is an important and timely one.

• For the past 15 years, Canada has been engaged in a process of downsizing and realigning the role of government. Some governments started earlier; others joined the effort more recently. But all are well on their way toward the goal of balancing their budgets.
• After all these years of effort and public debate about "less government" — we are running some risks — we are running the risk of losing sight of the importance of government in a well-performing civil society; of misunderstanding the key role that the public sector will be called upon to play in the future; and of discouraging those who would otherwise want to pursue a career dedicated to the public interest.

I, therefore, warmly welcome the opportunity to share some thoughts with you on

• The importance of public service as we enter the new millennium
• How the public sector will be called upon to contribute to competitiveness
• Why the way we serve matters

1. ECONOMY AND DEMOCRACY

As we come close to the end of the 20th century, democracy working together with a market economy stands as the uncontested model of societal organization.

Nobody knows how to run a successful economy other than through a market economic system. It is the most efficient way to use scarce resources and to ensure the pursuit of individual interests.

Democracy for its part has proven to be the best way to ensure social cohesion. It is the most efficient way to ensure the pursuit of the collective interest.

There are other models; but the countries which have the benefit of both systems have outperformed all others.

There are inherent tensions between democracy and a market economy. Both systems are rooted in very different beliefs.

• One is about the collective interest and pursuit of egalitarian values reflected in one person, one vote.
• The other is about the individual interest, the survival of the fittest.

But the history of the 19th and 20th centuries has taught us that there are great synergies between the two systems. Both systems can be mutually supportive and mutually beneficial.

• The market economy and its supporting private sector institutions provide wealth, growth, employment, and rising real wages.
• Democracy and its supporting public sector institutions, provide the legal framework for a peaceful life in a civil society, the pooling of resources to meet collective needs, and the environment for the market economy to flourish.

For countries, such as Canada, that are fortunate enough to have the benefit of both systems, it is not a matter of one sector triumphing over the other. It is a matter of balance.

Citizens decide where the balance lies at any given time. In societies like ours, the quest for balance is never over.

In Canada, we have seen the signs of this quest for balance.

From World War II to the late 1970s, citizens asked progressively more of government and of the public sector — from nation building, to managing macro-economic policies, to creating a social safety net, to expanding the regulatory regime in all sectors and all aspects of life.

Great results were achieved, but the dream did not materialize. No amount of regulation could protect citizens from every negative occurrence in their lives. Governments and government intervention could not protect Canadians from the effects of economic recessions, could not simultaneously fight inflation and high interest rates. The role of government has its limits and the cost of government was exceeding Canadians’ collective means. A new equilibrium was needed.

Through the 1980s and 1990s, citizens asked progressively more of the private sector. Less government, balanced budgets, freer trade, modernized taxation regimes, and reduced regulations were among the many measures needed to reap the benefits of a well-performing market economy. Great results were achieved, but once again the dream did not materialize.

It is important to remember that during this period Canada had one of the best growth records of the G-7 countries. But even the best sometimes is not good enough. An average economic growth of 1.3 percent through the 1990s means a drop in citizens’ standard of living. Unemployment reached an average of 10.1 percent in the 1990s and it currently stands at about 17 percent for youth. Real per capita disposable income has declined each year since 1988.

So the dream of constant growth, full employment, financial stability and rising real wages also proved illusive.

There are signs that the pendulum is about to start swinging again — in search of a new equilibrium and a new dream to fulfil.

Citizens will decide where the new equilibrium will lie in the years to come.

Wherever it is, it will be a synergy of the best of democracy and the best of the market economy; a balance between the pursuit of individual and collective interests; a partnership between the public sector and the private sector.

This partnership will, to a large extent, determine how successful Canada will be as a society as we enter the new millennium.

2. THE ROLE OF THE PUBLIC SECTOR

The public sector has a lot to offer in this partnership.

In a global environment, the public sector will be called upon to play a very key role. The quality and effectiveness of government will be crucial to national prosperity. Let me tell you why.

• Private investments

• In the industrial age, most industries had a natural home base — the result of the location of natural resources and easy access to capital, labour force, or markets. While this will continue to be the case for some time for some industries, it is changing for many others.

  Modern technology, world capital markets, inexpensive means of communications mean that more and more industries do not have a predetermined home base.

  In this environment, a country’s success will be achieved by creating economic and social conditions that are more attractive than those offered by other countries. A peaceful society with a modern infrastructure and a world-class work force — a society prepared to invest in its people and in research and development — will have an important comparative advantage.

  In the future, a nation’s comparative advantage will be created by what it does and the investments it makes. That means a key strategic role for government and the public sector.
   

• Knowledge and skills
• Knowledge and skills, and the ability to put knowledge and skills to work, will progressively stand out as one of the most important comparative advantages of nations. It will be key to productivity gains and to innovation in all sectors, old or new. More importantly, it will be key to citizens’ success and their sense of security.

  Knowledge and skills do not just exist. Acquiring them takes time and sustained investment in education and training. There again the public sector will be called upon to play a key role. No country has ever become even semi-literate without a publicly funded school system.
   

• Quality of life
• In a global environment, firms and countries will compete to retain and attract the human capital — the brain power — critical to their success and their future.

  Some are of the view that all it takes to attract and retain talent is wages and salaries. I think this view underestimates the diversity of human needs.

  Safe streets and neighbourhoods, clean air and water, good schools for children, world-class learning institutions, modern health care, and a peaceful society will all be significant factors in the competition for talent. There again the public sector contribution will be significant.
   

• Public investment
• The public sector has always played a role in making key investments in advance of market potential.
   
  • A recent example of public sector investment in advance of market potential is the Internet. It was developed by the U.S. Department of Defence and operated for almost 20 years before its market potential was realized.
  • In Canada, it took 20 years of development in government labs and universities before Canola, now a $2-billion industry, became marketable.

  So let me summarize. As Peter Drucker said "We are learning very fast that the belief that a free market is all it takes to have a functioning society — or even a functioning economy — is pure delusion . . . . The market by itself does not produce democracy and does not even produce a healthy and growing economy."

  Whatever the new century may hold, whatever citizens decide about the proper equilibrium over the next period of time, we can be sure that government and public sector institutions will have a key role to play, one that holds the promise of a strong public – private sector partnership.

3. THE WAY WE SERVE

The points I have raised so far are mainly about the role of the public sector and therefore about the policy challenges we will face. The way we serve will also be critical to Canada’s competitiveness.

A lot has been said about the changing nature of the market economy as it adjusts to a global environment, but the changes taking place in the public sector are not as well understood.

Nothing less than a quiet revolution has been under way in the public sector in Canada over the last few years. The changes have been so vast, so fast, and so profound, that very few people, including us and including experts, have a clear understanding of the reality today in the public service.

A few years ago, Canada was facing a serious fiscal problem both at the federal and provincial levels.

• Today, seven provinces have balanced their budgets, and five of those are repaying their debt.
• At the federal level, a zero cash requirement is in sight. By 1998–99, federal program expenditures as a percentage of GDP will be at the lowest level since 1949–50.

For most Canadians, the most visible sign of the changing role of government has been "less Government," but a more careful look reveals that more profound changes are under way. These are changes in the way we serve citizens.

• New relationships among governments

1. The realignment of roles by all governments in Canada has substantially reduced the degree of overlap and duplication among governments that existed even a few years ago.

   Today the public debate on overlap and duplication is lagging behind the reality of change in Canada.

   But no amount of streamlining or downsizing will ever replace the need for governments to work together to meet the needs of Canada and Canadians in the 21st century.

   In other words, the work on clarification of roles and on overlap and duplication is now giving way to a much more challenging phase — the management of interdependence among governments to serve Canadians. Governments must learn to set priorities together — to make decisions together.

   All across the country, away from the limelight and the attention of the media, governments are coming together to provide integrated services to citizens. The concept of single window is becoming a reality in Canada. Examples can be found right across the country.
    

   • In Prince Edward Island, the federal and provincial governments have entered into a knowledge-economy partnership agreement.
   • In Quebec, the Environmental Industry Virtual Office brings 18 partners under one roof. These include federal and provincial departments, business associations, regional economic development groups, and the City of Montreal.
   • In Ontario, the Toronto Harbour Remedial Action Plan is a partnership of four federal departments, three provincial departments, and over 20 regional and municipal governments, all committed to the rehabilitation of the Toronto waterfront.
   • In Alberta, a pilot project in the dairy processing sector brings together federal, provincial and municipal dairy inspection services. They are now working with 17 regional health authorities to rationalize food inspection services.
   • In British Columbia, the Canada Business Service Centre provides a "seamless" one-stop service for business information from 27 federal and 18 provincial agencies.

   This trend toward integrated service delivery is here to stay.
    

   • New partnerships

• The approach to governance is also changing. For the public interest to be well served, government does not need to do it all. The pursuit of the public good is not the exclusive prerogative of governments. The private sector, not-for-profit organizations, the voluntary associations, and citizens all have a role to play.

  Therefore, governments are entering into partnership arrangements that allow partners to achieve results that would be well beyond their reach if they were acting on their own.

  This is leading to an explosion of institutional models unknown even a few years ago. If your vision of the organization of government today is the traditional departmental model, look again — you were probably out of the country or on sabbatical during the last few years.
   

  • You will find government agencies providing services on behalf of several departments or several governments. The new Food Inspection Agency and the upcoming revenue agency are two examples.
  • You will find not-for-profit organizations as a form of private–public partnership. The Air Navigation System is a multiple public and private partnership. Forintek is a multiple partnership involving the Government of Canada, six provinces and 155 private companies.
  • You will find virtual organizations — a service agency without walls and without staff, one business plan, one budget, and one report to Parliament on behalf of departments working together in a co-ordinated fashion.

  This transformation is not without problems. But the trend is here to stay. Flexibility, adaptability and efficiency are not foreign to public sector services.
   

• A different relationship between government and citizens
• The use of information technology is transforming the relationship between government and citizens.

  This change will likely have the most profound impact on the role of governments in the years to come.

  The use of information technology is allowing government to be present, relevant, and adapted to local needs everywhere in Canada.
   

  • Human Resources Development Canada is delivering services electronically at about 5,000 kiosks in offices, shopping malls and universities across the country. This networking is comparable to that of Canada’s largest financial institution, which has about 4,700 automated teller machines.

  Technology is changing the nature of the services provided. It is also putting citizens in control.
   

  • Strategis is an electronic information network for businesses and enterprises. It was created only a year ago. It holds 665,000 electronic documents and 3 billion bytes of statistical data. There are 200,000 hits per day and 8.5 million electronic documents have been retrieved to date. Access is growing on a monthly basis.

  Technology is allowing government to provide services that could not be provided otherwise and is connecting Canadians and Canadian communities.
   

  • SchoolNet will link all of Canada’s 16,500 schools and 3,400 public libraries by 1998.
  • TeleHealth and TeleLearning are already a reality in Canada in several remote communities.

We have made good progress, and we will do more to ensure that the public sector plays its role to the fullest, contributing to Canada’s comparative advantage as we enter the next millennium.

Progress along these lines would do a lot to instil pride and respect for the role of government. It would do more for national unity than all the constitutional conferences held to date.

CONCLUSION

Let me now summarize and draw some conclusions.

First, countries that have the benefit of being a democracy and working with a market economy have outperformed all others. In a global environment, government and public sector institutions will be increasingly important to national prosperity and the well-being of Canadians.

Second, we are coming out of a phase which has seen important changes take place in the public sector in Canada.

A phase during which governments have realigned their role, balanced their budget and regained the capacity to make choices. A phase which has brought less government but also a modernized government, one better adapted to meet future needs.

So, my third conclusion is that the next phase must be about us — about people serving the public interest — and about pride in public service.

I have called this phase "La Relève." Some aspects of this phase will be

• to improve the management of our human resources;
• to help each other acquire the diversity of skills and experience that would prepare us to serve in the future;
• to remove the barriers and the rigidities;
• to better represent the Canadian population; and
• to prepare the next generation through coaching, mentoring and teaching.

It will be all that and more. Having seen the plans of action you have all prepared, I have no doubt about the outcome. Three years from now, when we look back, we will be amazed to discover just how much we will have done.

But there is another aspect to the work on La Relève — it is to rebuild pride.

It is fitting that the theme for National Public Service Week this year is "Serving Canadians with Pride."

It is no accident that Canada became the best country in the world in which to live. Public sector institutions can claim, with pride, their contribution toward achieving this result.

As the leaders of the public sector, we need to develop a better understanding of its contribution to Canadian society.

We need to recognize it. We need to talk about it — not with arrogance — but to explain and contribute to a better public understanding of the role of government in a modern society.

A career in the public sector is a career like no other because there is no greater reward than to be given the opportunity to make a difference in the life of one’s country.

Well then, the people in this room have been blessed.

• We were asked to reinvent and realign the role of government. We did it well.
• We were asked to help regain Canada’s fiscal sovereignty. We did it better than any other country in the world.
• We are now asked to give Canadians a modern and vibrant organization — one that instills pride among its employees and respect among the public.

I can’t wait to see you all next year. I might be given the chance to tell you more about your accomplishments.