Shot across the bow by Canada’s top bureaucrat will likely not be the last

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Michael Wernick has also decided to engage in a high-risk, high return game of ‘gotcha’ with the country’s most powerful number-cruncher.

First published in The Hill Times on June 18, 2018.

OTTAWA—Two bureaucrats rarely make it to the front page of The Globe and Mail.

The normal modus operandi is to stay behind the scenes and work things out collegially.

It is usually the politicians’ job to create the news, and when a bureaucrat does make the paper, the result is generally not positive.

To witness last week’s battle between chief Ottawa bureaucrat, Privy Council Clerk Michael Wernick and Auditor General Michael Ferguson was a head-turner.

Wernick, a discreet, effective, behind-the-scenes presence has long experience in ministerial and prime ministerial preparatory work. He has obviously determined that the silence-is-golden mantra of past bureaucracies, is just not going to cut it.

Wernick has also decided to engage in a high-risk, high return game of “gotcha” with the country’s most powerful number-cruncher.

Taking on the auditor general is usually a mug’s game. Outgoing premier Kathleen Wynne challenged her provincial auditor general’s bookkeeping methods in the cost-accounting applied to Hydro One.

Wynne may have trotted out compelling arguments to explain why the AG cost assessment was bloated, but that message never penetrated the public consciousness.

The only thing people understood was that hydro costs were growing exponentially and the political blame was laid squarely at the feet of the governing Liberals.

Auditor General Bonnie Lysk accused the government of “dramatically” understating Hydro One expense estimates. Lysk’s claim was based on accounting principles which differed by more than $6-billion from numbers presented by the government.

The Lysk version of the story won the day when Ontario voters ousted the Liberals in favour of cost-cutting Progressive Conservatives under the leadership of Doug Ford.

However, the difference between federal and provincial spats is huge.

Wernick is not a politician. His fight is not about numbers.

Instead, it is about an ongoing AG trend to go beyond the normal bounds of auditing when it comes to reviewing government programs.

In the report on the problem-plagued Phoenix pay system, Ferguson underscored “pervasive cultural problems” plaguing the public service.

The audit correctly identified deficiencies in inter-departmental collaboration on Phoenix implementation and accused Public Services and Procurement Canada of moving too quickly without ensuring that human resource support and technology integration would be able to absorb the switch.

The auditor general glossed over the fact that the amount budgeted for implementation almost doubled in three years.

In 2009, Treasury Board had approved a $155-million budget but in 2012, IBM hiked the bill to $274-million. Normally, it is the job of the auditor general to encourage departments to refrain from spending and to find ways to live within agreed budget means.

Instead, the AG accused the department of not asking for more money. In this case, the criticism was levied because the department had decided to whittle down costs instead of going back to Treasury Board for more money.

The AG also laid a claim of “pervasive cultural problems” within the public service, citing turnover at the deputy minister level as evidence.

Wernick countered with numbers. Of the 33 deputy ministers over which Wernick has authority, he says 49 of 99 had been in the job more than three years, 27 more than four years, and 16 more than five years. Hardly a huge turnover, in public or private sector terms.

Ferguson was probably shocked at the public push-back by the top gun.

Normally, Privy Council officials swallow AG advice, even when the agency deviates from legal auditing functions. Most departments nod and scrape to audit recommendations and ignore “opinion pieces” sprinkled through audit reports.

The most egregious “opinion piece” I witnessed was an AG report criticizing Parks Canada for refusing to establish new federal parks on provincial land in Quebec. Post-referendum, some Parks Canada officials recommended the possibility of a lease in lieu of Quebec’s refusal to cede public land to the federal government.

At a political level we rejected the option of establishing Canada’s future national parks on land that was not owned by the federal government. The AG slapped our knuckles for the decision, even though the issue had absolutely nothing to do with cost containment.

Over the past two decades, many audits have emphasized public policy opinions far outside the ambit of the normal audit functions ascribed to an agency overseeing government spending.

Wernick’s unprecedented public pushback is not the end of this story.

Ferguson’s 10-year appointment, expiring in 2021, included a promise to become fully bilingual. That promise is subject to review.

This shot across the bow by Canada’s top bureaucrat will likely not be the last.

Sheila Copps is a former Jean Chrétien-era cabinet minister and a former deputy prime minister. Follow her on Twitter at @Sheila_Copps.