October 15, 2010
An Agenda for a More Efficient, Effective and Accountable Federation
The paper argues that the federal and provincial-territorial governments in Canada are too often unproductively involved in the same policy space. While there is sometimes compelling logic for both governments to be active in a particular policy area, unnecessary overlap and duplication is a luxury that Canadians can no longer afford.
The paper highlights the need for governments to work together to clarify their roles and responsibilities. It recommends several areas where responsibilities need to be uploaded, devolved or streamlined/disentangled in order to make government more efficient, effective and accountable.
The recommendations made here constitute a new intergovernmental agenda for the federation: a re-ordering of roles and responsibilities for the purpose of giving governments the power and resources they need to respond nimbly and effectively to better serve Canadians in a rapidly changing world.
Governments are under significant pressure to find ways to continue to deliver high-quality public services and even enhance them in strategically targeted ways while spending less money. Citizens expect their governments to operate as effectively and efficiently as possible and should feel confident that their governments are seeking creative options for the delivery of public services.
In response to these pressures, separate efforts to deliver administrative efficiencies and cost-savings are underway at the federal and provincial levels. So far, these initiatives are being undertaken independently of one another. They do not encompass the wide range of activities where both orders of government are active, policy space is shared and service delivery overlaps or is entangled. The potential savings and improved policy development from clarifying “who does what” in the federation are considerable.
This paper highlights the need for governments to work together to clarify their roles and responsibilities. It recommends several areas where responsibilities need to be uploaded, devolved or streamlined/disentangled in order to make government more efficient, effective and accountable.
The paper surveys the range of government activity in the social and economic spheres and identifies a series of interim and transformative steps that governments could undertake. We are confident that these interim measures can deliver substantial cost-savings over the short term, although quantifying these is beyond the scope of the paper. Our aim is to start a conversation that will uncover further opportunities to rationalize roles and responsibilities.
It is sometimes beneficial to have both orders of government involved in a policy field. However, Canadian governments have been too quick to compliment themselves on their ability to manage overlapping jurisdictions and intergovernmental competition in the same policy space. They have not been sufficiently honest with themselves that intergovernmental jostling in the same policy area produces inefficiencies, poor policy outcomes, confused service delivery and, ultimately, public displeasure with the ability of governments to deliver effectively on key priorities. Given current fiscal challenges and global competition, this refusal to deal honestly with the realities of a broken intergovernmental model does not serve Canadians well.
Canada’s federal system is filled with distorted incentives: blame avoidance, credit-taking, finger-pointing and the competitive and duplicative provision of programs in popular spending areas. This paper concludes that the federal, provincial and territorial governments should acknowledge these problems and work together to address them.
Given short-term budgetary challenges and medium-term structural and demographically related fiscal challenges, it is time for governments to work together to clarify their roles and responsibilities. Once this is done, governments will be better able to make difficult trade-offs and pursue innovative policy solutions within their own areas of responsibility—and be held accountable for their performance by the public.
Nineteenth century institutional arrangements groan under the weight of 21st century pressures. At a time when many other countries are moving ahead, Canada’s model of federalism—in which governments spend extraordinary amounts of time managing interdependence—is a barrier to innovative policy solutions and timely responses to public problems. It has also imposed overlapping and burdensome accountability and reporting regimes on businesses and non-profit organizations.
One way to minimize intergovernmental conflicts is to reduce the areas in which more than one government is involved. One way to adopt timely policy responses is to reduce the number of actors who must first agree.
Most Canadians do not care which government delivers a particular service. The agenda laid out in this paper responds to that feeling by identifying which government is best positioned to make policy or deliver a program for Canadians. The recommendations are practical not ideological.
This paper is the first of a two-part story. The second part of this study, scheduled for release by the Mowat Centre in 2011, will consider necessary adjustments to Canada’s fiscal architecture to accommodate evolving Canadian fiscal realities and the changes recommended herein.
Redefining “who does what” inevitably provokes a re-thinking of how government services are funded. Does each order of government have adequate resources to properly fulfill its functions? Holding governments to account requires that they have appropriate fiscal resources for their areas of responsibility.
Together, the two papers will constitute a new intergovernmental agenda for the federation: a re-ordering of roles and responsibilities, coupled with the modernization of Canada’s fiscal architecture, for the purpose of giving governments the power and resources they need to better serve Canadians in a rapidly changing world.
Josh Hjartarson, Matthew Mendelsohn & James Pearce
October 15, 2010