CGE LEADERSHIP SERIES 24 / Canadian Government Executive / Spring 2025 If you wanted to learn about the man and this like there’s infinite number of podcasts like he was doing, even you doing international podcasts, even during the campaign. And he’s, he’s written a lot and, you know, his book Value and Values. I would recommend even reading that book. Personally, I think he’s the right man for the time, if the extent that is possible to have somebody that is like ready, because the stakes are so high that Marta talked about. I’m glad we got this particular person at the helm I think for the public service, that’s a good thing. The stakes are so high for the public service right now, as Marta and Graham said. We are in historic times. I’m trying I was trying to think if we ever had a government that takes power in the middle of a crisis. The 2008 financial crisis was probably started in the fall and we had an election then, but the government didn’t necessarily see it as a crisis. And then they had to respond very quickly to it. I think in 2021, we were coming out of COVID, we didn’t see the Ukraine crisis. Now it seems like we’re in the middle of this crisis and literally playing out today in real time with the visit of our prime minister in the White House. I think we’re fortunate to have Prime Minister Carney and I think this would be good for the public service. It’s never been a more important time in my lifetime for the public service. Lori Turnbull Thank you very much. Before we totally landed in this crisis, one of the issues that had been percolating over the last couple of years, even, was the concept of review of the public service itself. Before all this Trump craziness happened, we seemed to be on a trajectory to a large Conservative majority with a muchreduced Liberal government, possibly a bloc Quebec official opposition and now, obviously that’s not what we got. We’re in a completely different world with a different set of priorities. I wonder what you think is going to happen to the public service question. Is there going to be a public service reform exercise? Is there going to be a meaningful spending review exercise? And I might I point to some of the comments that all three of you have made around the ambition of Mr. Carney’s agenda. This is going to be hugely expensive. How are we going to pay for more defence spending, for example? I’ll start maybe with Marta on this one. Do you have a sense of, of like, is public service reform going to fall off the table for right now? Is he going to do this in a nimble way? What do you think? Marta Morgan That’s a hard question to answer. He has said publicly that he’s going to cap the size of the public service. But that hasn’t really been a major focus of his campaign promises. He’s also made commitments about how he’s going to manage fiscally. He’s obviously coming in as a person who with his international economic experience, has an understanding that Canada’s strong fiscal management over many decades is, and has been, a real asset to us in times of crisis. It has been used to our benefit in times of crisis, which we’re in now. On the one hand, he’s going to be balancing some very major campaign commitments that will be expansive, creating new institutions like a new defense procurement agency, a new major projects management office. So he’s got some areas where he’s obviously looking to expand the government, but then he’s also wanting to be fiscally responsible. I think experience would suggest that what happens with the public service, if there’s any kind of program review or that sort of thing, it takes a little bit of time to get those things up and running. They don’t tend to be top of mind for the electorate. I think he will look at what’s happened over the last ten years and say there’s scope to make government more efficient. There’s scope to use new technology like AI to make some of our operations more efficient. There’s scope to streamline and rationalize programing in different areas whether it’s in innovation or sustainable development or decarbonization. In some ways a public service should welcome that because if it’s done in a very rational way, not just about cutting but about reallocating and allowing the public service to identify areas where they can be more efficient divert resources accordingly. It can actually be a really constructive activity. And I think he’s more likely to approach it in that direction,as opposed to the, south of the border model. Lori Turnbull I was going to ask that about how the whole DOGE approach could affect the conversations here. Kevin, please. Kevin Page I think the Liberal platform is very different than the Conservative platform. In terms of numbers, the deficits are bigger, quite a bit bigger in the Liberal platform than they were, even if you’ve kind of fixed the numbers that were in the Conservative platform. So government is going to get bigger actually. And if you look at where the money is going, a lot of that money, like is over a fouryear cycle. It’s about $130 billion more over the next four years. And about half of that in accrual terms is operating and the other half is capital. But if you look at the cash amount, it’s closer to $200 billion over four years. This is an historic amount of money going to build the country. And so I think that our capacity as a public service will be directed to build, to get this investment going. I was reading a book on the weekend called Abundance by Ezra Klein and Derek Thompson. Even in the US, they’re having their own debates about the size of government versus the capacity of government. It’s painful to watch what is going on in the United States. I’d be surprised if this Liberal government is going to do any version of that. There are cuts in the Liberal platform. It amounts to a little over $20 billion over four years. If you look at the numbers, our government is relative to the size of GDP in nominal terms, a lot bigger than it was a decade ago. It’s going to get bigger. And in terms of the dollar amount, a lot of that’s going to go to capital, some of it on the national defence side. But a lot of it is building infrastructure. It’s building homes, trade infrastructure. And we need it. There’s a risk around doing that. We should all be reading some literature out there in terms of how to do big projects. But he wants to build the Prime Minister in a big way. Graham Flack So let me drill down though, on the spending review. And I’m going to take a different approach on this because the platform proposes $13 billion ongoing in, quote, efficiencies from the public service. I just want to put that in context because I did the last spending review in the government. If you take a government budget of $450 billion, and you take out all the direct transfers to individuals, direct transfers to provinces. You take out capital budgets because, as Kevin can tell you, they’re all under underwater anyway. You have to take out addressed debt transfers. If you take out all the things off the top that they are politically unwilling to do, guess how much of the $450 billion is left? The base is now $93 billion. Half of that is grants and contributions, never politically popular cuts. So let’s say they take the grants and contributions off. Now, you’re down to $45 billion. A fifth of that is Department of Defence. I assume in a world where we’re growing the Department of Defence, you can’t cut the Department of Defence. Now, assuming you keep the normal political logic of we’re not going to do anything that’s going to create any noise, you’re talking about taking $13 billion ongoing out of a base of less than $40 billion to
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