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Proceedings of the Standing Senate Committee on
National Finance

Issue 12 - Evidence - September 2, 2003, 6:20 p.m.

OTTAWA, Tuesday, September 2, 2003

The Standing Senate Committee on National Finance, to which was referred Bill C-25, to modernize employment and labour relations in the public service and to amend the Financial Administration Act and the Canadian Centre for Management Development Act and to make consequential amendments to other acts, met this day at 6:20 p.m. to give consideration to the bill.

Senator Lowell Murray (Chairman) in the Chair.


The Chairman: Honourable senators, on Bill C-25 you will recall that in June we heard from the minister, the President of the Treasury Board, Ms. Robillard, and from the President of the Public Service Commission, Mr. Serson. This afternoon, we had as witnesses representatives of the four major employee associations in the federal government. Tomorrow, we will be hearing from other experts, commentators, people who have been closely involved for some time in these issues, including the former Auditor General and the present Auditor General, the Commissioner of Official Languages, and others.

Tonight we have an opportunity to step back for a moment, and think and talk about the history and culture of the Canadian public administration, the Public Service of Canada. No one in this country is better qualified to help us and lead that discussion than the two witnesses who are now before us at the table. You have their biographies in your briefing notes. You have lists of their many publications. I need not repeat what you already know about them. Professor Hodgetts literally wrote the book on the Public Service of Canada. There it is. It is called The Canadian Public Service: A Physiology of Government, 1867-1970. Generations of public administration students have used this as a kind of bible. It is well worth referencing at any time, including today, and probably into the future.

Professor Hodgetts and Professor Franks are, among other things, the authors of a fairly recent publication that is precisely germane to our discussions here: Parliament and Human Resource Management: The Role of the Public Service Commission as an Agent of Parliament. They prepared this paper for the Canadian Centre for Management Development in December 2001. I believe you have copies of that. If you do not, we will circulate it to you.

Let me say how very pleased we all are to have these eminent scholars before us tonight. I understand that Professor Hodgetts will speak first. His former student, Professor Franks, will not dare to comment on what he has heard, and he will speak second tonight.

Professor J. E. Hodgetts: Thank you, Mr. Chairman, and honourable senators. You will forgive me in my octogenarian state for sticking fairly closely to these notes. I think you will be thankful that I did. It has taken me 85- plus years to attain the honour of addressing this august body, and I am all the more appreciative for having had to wait so long.

I intend to concentrate on the historical context that has conditioned the creation of this complex and comprehensive bill for modernizing the public service that is now before you. Taking the liberties of an octogenarian, I shall adopt the stance of the mugwump, though I am equipping the mugwump with McLuhan's rear-view mirror, in order to make several general observations that I hope will give you some perspective when considering the details of the bill, a task I happily leave to you.

Let me begin with what I consider to be an extremely astute assessment of our system made many years ago by John Deutsch, who will be known to many of you, an economist mandarin and former principal of Queen's University. He had the habit of starting out in a very commonsensical sort of way that would lead you to say, ``John, get on with it.'' He would remark that Canada, in contrast to the U.S. system of divided powers with checks and balances, had the Westminster system of a union of powers with a political executive inside and responsible to the supreme legislature. However, it is the payoff in the first part of his assessment that is important. He would go on to say that, within the permanent executive branch, a Canadian version of the U.S. separation of powers and checks and balances prevailed.

I suspect this insight was derived from his experience sitting as secretary to the early Gordon Royal Commission on Administrative Classifications which, in fact, dealt with everything else but administrative classification. That commission produced a significant report at the close of the Second World War period which grappled with the same issues that had continued to be addressed by royal commissions from without and, as with this present bill, by innumerable committees and studies from within the public service.

John Deutsche's perception of that system operating with divided powers and accompanying checks and balances was amply verified when the Gordon commission's efforts to inject greater coordination of all the actors engaged in managing people was met by an outcry against the creation of a ``Czar of the Civil Service.'' That czar was the proposed director general of establishment to be housed in Treasury Board. It was shot down in flames as the competing stakeholders asserted their respective jurisdictional rights and extolled the virtues of checks and balances.

A decade and a half later, in the early 1960s, as editorial director for the Glassco Royal Commission, I had my own opportunity to observe first hand the prevailing truth of Deutsche's insight. I can still visualize the enormous chart laying out all the participants in the management of people and money — departmental managers, the Civil Service Commission, Treasury Board, the Department of Finance, the Privy Council Office — each of whom had been assigned a differently coloured card of its own to be shifted about under the functions assigned by law and regulation to each. This exercise in, what I would call, ``put and take,'' moved literally from drafting board to recommendations, again in the name of simplifying the system and achieving greater cohesion and coordination.

Seventeen years later, it was ``déjà vu all over again,'' when I found myself on the Lambert Royal Commission. There was, however, one major difference. Whereas Glassco had been prohibited from including Parliament under its review, the Lambert commission's reference included tracing the line of accountability through to and including Parliament. The number of participant stakeholders claiming some share in the management of the public service was increased not only by acknowledging that Parliament had a role but also, since Glassco's time, by the emergence of the right of unionized employees to engage in collective bargaining.

In the 25 years since Lambert that bring us to the present bill, still more participants can claim a say in the actions involving public service employees, that is, post the Bi and Bi Commission, a language commissioner; the Canada Constitution Act and in particular the Charter of 1982, a human rights tribunal, an equity tribunal and significantly greater input on the part of the judiciary itself, judicial activism. As well, formal recognition in legislation of 1993 of the Clerk of the Privy Council as head of the public service gave that office a much more salient role.

My own feeling is that, comprehensive as this omnibus bill is, it will not bring a magical union of powers to what seems to have become an extreme example of a system of the divided powers and attendant checks and balances.

Although it is sad, I conclude that this is something with which we must learn to live.

A second generalization about the historical context for this bill is that all preceding public service reform measures been predicated on the presumed need to reduce the delays and procedural impasses created by the conflicting and overlapping mandates of the agencies involved, while of course still ensuring that the basic values of merit for appointment and promotion are preserved. The paradoxical outcome, when the dust has settled after each major reform intervention, has been further additions to the roster of actors claiming a share in the process. There are two obvious consequences, impeding both the search for streamlining procedures and letting managers manage, the constant refrain in all reform efforts.

First, more participants inevitably undermine the efforts to speed up the process, to make it more businesslike. Second, and perhaps more importantly, the injection of new actors on the scene creates institutional angst among longstanding agencies whose mandates are now threatened. John Deutsch's separation of powers and checks and balances now comes forcefully into play as agencies jockey for position and a species of bureaucratic collective negotiation seeks for workable accommodations.

When one examines, over time, the way in which our public service has responded to such transactions, one feels like an archaeologist working one's way down from stratum to stratum, finding en route at least lingering traces of the impact of successive reforms for all, that each has at one point been dismissed as outmoded or irrelevant under changed conditions. In short, the system knows how to add but it is very poor at subtraction.

Permit me now to demonstrate how my context-setting generalizations have a bearing on Bill C-25. These should be treated as warning flags or points that might be raised with others more knowledge of them.

First, this is an omnibus bill that incorporates all the actors involved in the management of the human resources of the public service. Assembling in one bill legislation covering the staff relations regime, he legislation covering public service employment, together with relevant components of the Financial Administration Act and the act governing the Centre for Management Development, gives us a deceptive notion of reducing the chaos in Deutsche's division of powers to some kind of harmonious universe. My impression is that the two major enactments have been made longer with more statutory instructions built in, having the effect of further rigidifying the control regime whose simplification is sought.

I note here that, when I looked at the list of amendments produced by the other place, the bulk were concerned with the political activities of public servants and that this was incorporating much more detail than existed in the previous legislation. I cite that simply as an example of the way these acts grow.

Second, despite its omnibus nature, the bill for the most part applies only to what is now called the ``core public service.'' That ``core'' seems to be dwindling in numbers even as the provisions for managing grow more luxuriantly complex. We have long had what I like to call a second public service comprised of the ``structural heretics'' — another term of mine — that have made up the list of ABCs, the agencies, boards, commissions and corporations. Many are employers in their own right, and some of them only partially, if at all, are embraced by the management regime for the core. Recent downsizing and new management ideas have produced even more elusive additions to these outriders, such as special operating agencies, partnerships and the like. To my mind, they are all equally part of the Public Service of Canada and thus not immune to the values of merit, non-partisanship and accountability that the current Bill C-25 is dedicated to preserving.

I hasten to say this is not a call to add all these to the present bill, but simply a warning flag to suggest that Parliament has a very legitimate interest in the heretics, even though the constitutional ties of ministerial control and responsibility have been much modified.

Third, faithful to the tradition of all public service reforms, the Bill C-25 demonstrates my observation that we are better at addition than subtraction. I have the impression, but only that, that the new labour relations component of the bill adds more formal actors. While I am a little uncertain about that, I am definite about the fact that the revised public service employment portion of the bill does add at least one new major actor, the public service staffing tribunal, and greatly enlarges the role of the Centre for Management Development by centralizing training in a proposed public service college. Both changes are achieved by divesting the historically well-ensconced agency, the Public Service Commission, of its major responsibility for training, and of its adjudicative role in offering recourse on complaints arising from so-called internal appointments. This take-and-put exercise leaves me with a number of troubling questions. I will mention but a few of them.

Does the divestiture of two major activities of the Public Service Commission explain the curiously truncated commission now proposed, with a single full-time president and two or more part-time commissioners? I note the amendment made in committee in the House of Commons would confirm the appointment of the president by joint resolution, thus confirming the independence of the agency, putting it more or less in the same position as the Auditor General. However, it goes much further because in this case it is confirming the appointment, not a joint resolution confirming the firing of the person. I wonder also whether this agent of Parliament may be a somewhat hollowed out shell by this time and, if so, why then we should be paying so much attention to ensuring he is independent as he reports to Parliament. I have seen little or no discussion of the tribunal and how it relates to the parent from whom its functions were extracted.

Does the diversion of the training function from the PSC to the new college represent an undue centralization or monopolization of this activity? What happens to specialized departmental training programs? What about language training? Do the universities and colleges with specialized schools of business and public policy administration courses have a stake in this decision? I have heard no discussion of that.

My main concern comes back to the Public Service Staffing Tribunal, the PSST. Unlike the Public Service Commission, it will have full-time commissioners, but it will have the same independence and same reporting responsibilities to Parliament, as far as I can make out. Therefore, my question is: Do we now have two parliamentary agencies?

I note that the PSST has power to review the decisions of the PSC, as well as those of the deputy heads with the powers delegated by the PSC to them to make personnel decisions in certain areas. Do we have one parliamentary agency reporting on another parliamentary agency, one being superior to the other? How will this arrangement affect the role of the Public Service Commission as guardian and definer of merit and the merit system? I could ramble on about merit. I gather you have already had some discussion of it.

This latest reform exercise leaves many unanswered questions that, in my judgment, should not be left to be settled by regulation.

I am not sure whether it was Pope who provided the descriptive couplet for the situation we have always faced:

Great fleas have little fleas upon their backs to bite 'em,

And little fleas have lesser fleas, and so ad infinitum.

The Chairman: Thank you, Professor Hodgetts.

Professor Franks, will you please proceed?

Professor Ned Franks: Mr. Chairman, honourable senators, I feel a bit intimidated, coming after my august colleague and leader in many of these subjects who has done far more work on them than I have. I shall in my comments try to discuss the Public Service Commission as a parliamentary agency. I will align a few other comments with that.

I want to talk about many things, including whistle-blowing and merit. However, I have left them out of this presentation.

Before I begin my comments, I should mention that Professor Hodgetts and I had a discussion today with the Privy Council Office on various matters. They pointed out that, even though the Public Service Commission describes itself as an agent of Parliament and thinks of itself as such, it is not an agent of Parliament in formal terms. I asked if that meant it was a parliamentary agency and the response was that they were not too sure. Therefore, I hope we can all accept that if my terminology is inexact, unconstitutional, illegal — and I hope it is not improper — but I do hope it is understandable.

Bill C-25 is massive and complex. However, I have a tendency to simplify things rather than make them complex, and perhaps that is the right way to go. Like anything that is a product of such massive and complex work leading to such a massive and complex product, I think we must accept that the proposed act embodies many compromises and glosses over some difficulties. I do not believe we will get a perfect resolution to the problem because I am not even sure that we could find one if we started from scratch now.

I will talk about the parliamentary agency of the Public Service Commission. As we all know, the Westminster model of parliamentary cabinet and government embodies, if not a separation of powers, then a very clear separation of roles. Even though the classic definition of our form of government describes it as having a fusion of powers in the symbiotic connections between the executive — cabinet — and the legislature — Parliament — the fact remains that the executive, not Parliament, administers the powers of government. Parliament's role comes in two stages: first, in granting powers and funds to the executive through statutes and appropriation; and, second, after the executive has used these powers and spent these funds in holding it to account for its stewardship and management.

In normal circumstances, Parliament has no role in the actual exercise of power and the spending of funds. That is the responsibility of the executive. Parliament's role is to review and hold accountable, not to manage.

The Public Service Commission and its predecessor, the Civil Service Commission, to the extent that they are agents of Parliament and not the executive, are deviations from this standard. Human resources management is one of the core functions in public administration and the management of the business of government. Both of these agencies have had key, and in earlier times particularly, dominant roles in the management of human resources. In effect, they have exercised executive functions. If the roles of Parliament and the executive as described above were to have held true for human resource management, then the Public Service Commission and the Civil Service Commission would not have had executive functions but would have been restricted to a review of the government's human resources practices and reporting on these to Parliament and, in so doing, initiating the processes of accountability.

I can identify two reasons for this allocation of strong management roles to the two commissions, and the first goes back to the scientific management school, which was in vogue in 1918 when the Civil Service Commission was given these major functions and believed that you could clearly separate politics and administration, and that administration was a technical business, which in this case would become the function of the independent commission.

The other factor that entered in was that in 1918 the Auditor General of Canada actually did exercise executive functions in what they called then the pre-audit, and controlled the disbursement of funds. This role of the Auditor General was changed in 1931, and I think it is worth saying that, up until 1931, we did not have an effective accounting system or an effective system of financial control within government because of this split between the functions of the Auditor General in disbursement and the lack of a good accountability process to Parliament, as well as the inability of the government itself to control its own use of funds because an independent person was doing this.

I might add that my first kick at that question came in the early 1960s, when I was working for the government and then the Legislature of Saskatchewan on reforming the public accounts committee, which some of you may remember. Saskatchewan was the first province to accept the proper model, which the federal government by then had, but that was in the 1960s, and that is history now.

However, what did not happen is that the same discipline was imposed on the Civil Service Commission and its roles. As a result, the commission has had and still has a foot in both camps, and has had to perform an awkward sort of split as a result. One of the commission's feet is firmly in the parliamentary camp, where the commission serves as the agent of Parliament in attempting to prevent abuse by controlling much of human resources management. The commission's other foot, by necessity, is in the executive and management camp where its functions in human resources make it one of the key central agencies of government along with the Treasury Board Secretariat and the Privy Council Office.

The commission has never had a strong or close relationship with Parliament even though it is Parliament's agent. In recent years the Public Service Commission has attempted to strengthen its relationship with Parliament through its useful reports on the public service. I could add that there was some disapproval in certain parts of the executive that the Public Service Commission had the temerity to do this, but that was a tempest in a teapot.

In its role in management, the Public Service Commission has been reduced in powers through collective bargaining, where the Treasury Board serves as the employer, not the Public Service Commission, through the government's designation of the Clerk of the Privy Council as head of the public service, through changes in its functions through amendments to the Public Service Employment Act and others.

At the same time, strong forces have pushed the commission into the executive camp. The government has, whether intentionally or not, treated the position of commissioners on the Public Service Commission as parts of the public service. Not since 1985 has a president of the Public Service Commission served out the statutory 10-year term.

Putting the commission even more in the executive camp, the presidents of the commission have regarded themselves as deputy ministers among deputy ministers and have sat with the other deputy ministers as parts of their regular meetings. Indeed, several recent presidents of the commission have returned to the public service after leaving the commission, with one becoming the deputy minister of a line department.

I do not believe that this position for the commission and the commissioners is satisfactory. It leaves Parliament with a supposed agent that the executive treats as part of its own structure, while it leaves the executive with an inability in manage and control one of its key management functions.

I now come to a key point because, as I tried to say, we are making the best of a bad situation here. The structures proposed in the Public Service Modernization Act go a long way to improving the situation. The bill will place executive functions within the executive, with a Public Service Commission playing a much-reduced executive role with a proportionally greater role in audit and reporting.

However, the act also creates a new agent of Parliament — the Public Service Staffing Tribunal. I do not see the need for two parliamentary agencies in the field of human resources management. One reason for creating the Public Service Staffing Tribunal is that the present process and arrangements, including the mixture of decisions and appeal functions of the Public Service Commission, do not work satisfactorily. Perhaps the right answer would be to rework the functions and procedures of the Public Service Commission rather than have two agents of Parliament, particularly since the approach in Bill C-25 is to rid the commission of much of its management responsibilities. Organizational overkill is not an attractive solution.

In my paper I then touch on the merit principle. I will pass over that because it needs more attention than I give it here.

Most of the authority devolved from the Public Service Commission will, as I read the bill, be assigned to deputy ministers. The position of the deputy minister is the appropriate place for centring responsibility for human resources management and departments, as it is for departmental financial management. However, it should be noted that, to ensure the human resources management function operates properly within departments, the respective rolls of deputy ministers and ministers needs to be clarified.

Canada has not yet advanced far enough towards distinguishing the spheres of activity that properly belong to the public service from those that properly belong to politicians. Ministerial responsibility is a key essential to our parliamentary system, but it does not mean that in the last analysis the minister is or should be responsible for everything. Some things should be the responsibility of the public service, especially the senior managers in the public service, the deputy ministers. Nowhere does this hold true more than in the field of human resources management. This division of responsibility is recognized, among others, in both the Financial Administration Act and the Public Service Employment Act, which allowed delegation of authority to deputy ministers but not to the ministers. However, in practice in financial administration the division is murkier than it might appear from the statute, and this sort of murkiness must not be allowed to creep into human resources management.

The goals of modernization of the public service are first, to ensure that Canada has a first class public service and, second, to ensure that this public service is non-partisan and capable of serving and being trusted by successive governments of different political stripes. To achieve these two goals has proven difficult, as shown by the proclivity to hive off important parts of government from the core public service and by the continuing and usually frustrated attempts to make key reforms. The measures of this bill are, in their intention, a step in the right direction. However, they are only the beginning of what will likely prove to be a long, slow period of adjustment.

The Chairman: Thank you.

Senator Bolduc: I am pleased to see an old friend, again. I must say that when I returned from the University of Chicago in 1953, Mr. Franks was already a full professor at Queen's University and a kind of mentor to many who entered public administration in Canada.

I am sure members of this committee, after such a fine presentation by Mr. Franks and Mr. Hodgetts, understand well the historical background that is necessary to speak to such a subject as we have before us.

I noticed that you have both been rather silent on the issue of merit as the basic criterion for entry and advancement in the public service. I do not know if you had time to look carefully at that aspect of the bill, which is a lengthy document. If you consider the history and include comparisons with England, the United States and France, for example, do you think that this bill puts most of the roles in the hands of the administrators, where they should be? Do you think that the statutory provisions should be more explicit in terms of a mechanism to ensure the merit principle?

Mr. Hodgetts: I would say that, because of this confusion between the new agency, the PSST, and the Public Service Commission, I am a little concerned about who will do the defining. We originally thought it would be the Public Service Commission and then it would perform the audit function. However, as Professor Franks will undoubtedly add, ``merit'' is a weasel word. You could broaden it sufficiently to imply that it means the best-performing person. However, people will then say that the new regulations specify that the deputy minister does not have to make the choice of the best person; rather, the person just has to be competent; and we may add a few more criteria that we feel are necessary. Those would then become part of ``merit.''

On top of that, there is the equity issue and the treatment of native people. It becomes a big ball of wax. I doubt that any legislation could provide a clear definition. We require someone to be authorized to formulate the preliminary definition of ``merit.'' Parliament could then consider this in its own right and make its recommendations. That, then, would be audited.

I am concerned that there is a great fuzziness in the matter of the definition of ``merit'' and in the matter of who is to define it.

Mr. Franks: That is a good beginning, and it shows that Professor Hodgetts has read the act more closely than I have. I tend to use terrible jargon in phrases, so forgive me for doing so. However, ``merit'' is one of those words which I believe is similar to ``justice,'' ``good'' and ``fairness'' which all have contestable definitions. People do not agree. Those definition have ideological and other factors that affect them.

At its beginnings in the civil service, ``merit'' was defined in English terms and not in French terms. It included such things as education, experience. Veterans' preference trumped all other kinds of merit after the First World War. Bilingualism was added as an important part of it, as were equity of gender and ethnic origins. Identity politics creates demands for key figures as role models, et cetera. They all become factors. We ended up with a mishmash that I do not believe can be simplified. I would not like to see a large, detailed definition in an act because it would then become a subject of jurisprudence, much as would happen — not to frighten all senators — if the code of ethics for the Senate were part of a law rather than a standing order. You could open yourself to the courts on matters that you may not want to open to the courts.

``Merit'' means different things at different levels in the public service. I have a concern about the public service, which I am not satisfied this bill assuages, and that is that the key to an effective public service, ultimately, is a good senior public service that is across the service group of senior executives and potential senior executives. Merit for them has to be defined in much broader terms of experience and education than it is defined for people dealing with the public at the bottom where language becomes a key essence of fitness for the job.

Senator Bolduc: Do you not think that, precisely for that reason — merit is a kind of value and everyone can have a definition of it — we need a statutory administrative process to at least give us the basic procedure that is required to bring forth the best?

For example, formerly a public service examination was required before entry to the Department of Foreign Affairs. It was an open competition for all graduate students from Canadian universities.

Mr. Franks: I went through that exam.

Senator Bolduc: In that way, the relative value of people was determined. A jury of three or four senior officials decided where those examinees would be ranked. If there were standards in place, it could only help. We have always had public competition, but that cannot be done in all instances. However, it seems to me that public competition for entry to the public service should be a rule, even though it may be regionalized. At the same time, there should be an internal process of competition for promotion within the public service. As a matter of fact, they have that process in the Department of Foreign Affairs. We have received good service from those people, and many of them have become deputy ministers in different areas of government. I do not understand why we struck that out of the bill. I refer mainly to the reforms that occurred in 1993.

Mr. Franks: I read into that a desire to avoid excessive jurisprudence on the issue — excessive litigation — and to speed up the process. I do not know if they could achieve it.

Senator Bolduc: I can understand the right to appeal, either to the Civil Service Commission or to the Public Service Staffing Tribunal. That tribunal will be a specialized tribunal of the federal court. Why do we have that? In my opinion, we do not need it. You can go to the administrative court.

Mr. Franks: The best answer I can give out of my basic ignorance on most of the answers to it is that you should pursue this question with others and see if you can find a useful answer. It is something that bothers me. Lurking within what you are saying, I think, is a distinction between a regional or local public service, which is a perfectly decent thing to have, and a national public service, which is also essential. Perhaps we have not yet worked out how to do both of those. That is my feeling.

Senator Bolduc: Without being too detailed, perhaps we could introduce a statutory process whereby there would be competition within the public service, so that, say, a director from Health could be moved to Foreign Affairs and thereby broaden his or her experience. I have lived through that. That is the only way to train people for the top. If someone is required to deal with a different situation it gives that person a more relative perspective.

Senator Gauthier: I will ask you a simple question. Most Canadians are subject to the Canada Labour Code, but a special category called public servants is subject to the Public Service Employment Act, the Public Service Staff Relations Act and certain other statutes. Why do we need a Public Service Employment Act? Why do we not just have the Canada Labour Code?

Mr. Franks: I might be wrong on this, but I have the impression that some of the statutes creating the independent operating agencies do not specify which labour code they come under and I have often wondered if that means the come under neither.

However, we have a mishmash, even within the ``servants of the Crown,'' if I can use that expression broadly for the structural heretics as well as the central public service. I think there is a problem there. My feeling is that we run a risk of having a pure but sadly diminished central public service, and that more and more heretics are ignored.

In one year, if I remember rightly, when the Customs and Revenue Agency and Parks Canada or the Food Inspection Agency were separated, the public service was reduced by 25 per cent. The number of people who came under the legislation was cut by 25 per cent. Again, I recall that it was unclear what labour code they came under in some of those statutes.

I think you are on to a very real problem. I cannot solve it.

Senator Gauthier: Professor Hodgetts, would you please explain what you mean when you use the term ``heretics''? Why do the heretics have a special treatment?

Mr. Hodgetts: They are heretics in the sense that they do not conform to the conventional departmental lines of reporting and responsibility through being covered, say, by the Public Service Employment Act, and are not subject to the same conditions. They have a special category in the Financial Administration Act. In fact, there are several different categories in the appendix to that act. It is a dog's breakfast, if you like.

You mentioned the merit system and why this was applied, and I was wondering whether you heard evidence on that from your witnesses this afternoon. The problem for the unions is that merit does not come within the terms of conventional collective bargaining. That is because it is subject to the special regime under the jurisdiction of the commission and Treasury Board. That is what makes it special, if you like. The labour unions, I think, are still insistent that this does not make sense. You seem to be pointing in the same direction — that you do not understand why there is a difference. An explanation would entail my long lecture on the difference between government and private business practices, and I do not think you want to hear that.

Senator Gauthier: When I came here some 30 years ago, we had about 250,000 to 275,000 public servants. From that number we subtracted those who worked for the Post Office, Customs and Revenue and many others.

You mention in your paper that we have special operating agencies, partnerships and the like and those employees are what you call the heretics because they do profit from certain advantages but they have access to public service pensions and certain other programs. Why do we not just have one law for all Canadians? Why do we need a special public servant employment act or a public servant staff relations act? When I asked this before I was told that I was being difficult.

Mr. Hodgetts: I can take you back to the Glassco Commission in 1960, in which the question was asked: ``If the decision to go to a Crown corporation is based on the fact that the present recruitment conditions and the financial management practices are two hidebound for running a business, then why does not the same situation apply to a government department? Why do we not pull that out and do what you are saying?''

I will throw out my suggestion for my dear colleague, Peter Aucoin, who will appear before you tomorrow, and who has written such a magnificent piece for the last issue of the Canadian Public Administration journal on these heretics and the new heretics that I think he will have something quite important to say to you about what I have always called the ``second public service.''

My particular concern in mentioning that was that it is part of the public service. For that reason, it should not be lost sight of, even though it cannot be included in this act. It raises a series of serious problems about accountability, and that will be lost track of in this perpetual concern about rectifying this hardcore issue that, in my humble judgment, has produced a massive mess with which we have to learn to live.

The Chairman: Professor Franks, did you want to add anything?

Mr. Franks: Yes, I want to add one thing to what Professor Hodgetts said, which he will probably not agree with totally. One of the main identifying features of most heretics — not all — is that to some extent the board, commission or corporation that heads them has legal powers assigned to it, so that the responsibility of the minister for them is more limited than for the normal line department — this being one of the justifications for giving them the various forms of flexibility that they have. I am not satisfied that argument holds, but it is part of the definition of a heretic.

The Chairman: I should tell you that Senator Kinsella has been trained in theology and he knows the difference between heretics, schismatics, disparities of cult and so on. He may be able to give you a more precise definition of this phenomenon.

Senator Kinsella: I was going to ask whether they have gone too far in burning at the stake the Public Service Commission.

Senator Beaudoin: In your beautiful speeches, you say that the intention was to to have a first-class, non-partisan public service, and that those two characteristics are fundamental. However, the system as it is now in Canada has changed dramatically. ``Dramatically'' may be an exaggeration. We must either legislate to give effect to a merit system or the courts will do it and that will be based on the Charter of Rights and Freedoms of 1982.

In 20 years, the Supreme Court of Canada has ruled on 450 Charter cases. It is unprecedented in the history of this country. They will continue to do that if we do not take some action. My suggestion is that Parliament should do it. We should comply, of course, with the principles of the Charter of Rights and Freedoms. If we do not do that, they will do as they have done in many cases. They will do the job themselves as they have in fields such as euthanasia, assisted suicide and matters of that sort.

Senator Oliver: Same-sex marriages.

Senator Beaudoin: This is the tendency now. The very difficult problems are now before the court, before Parliament, or before both. The issue of same-sex marriage is being dealt with in both bodies. That is unique in our history. If we do not legislate the merit system, the court will find a solution based on section 15 of the Charter of Rights and Freedoms. I have no doubt about that.

Why do we not do our job? You say that the definition must remain general, probably a bit vague. That may be, but I am quite sure that it will be necessary to deal with the matter of merit. It is impossible skirt the issue. Do you not think that if we do not do it, the court will do it?

Mr. Hodgetts: Let us assume that we put it in the legislation somehow. Will the effect not be precisely the same highly judicialized process?

We have all of this built in. We now have a new agency to adjudicate. That is what the commission was doing previously. After that, there is the right of appeal to the courts. It will happen anyway. I do not seen any way that you can keep the courts out of this with all these provisions provided for public servants to appeal decisions made under the rubric.

The more you try to define the merit system, which we agree is a pretty dicey operation, the more opportunities there will be for people to say, ``No, merit was not followed in my case because of this and this portion of the definition of merit that is in the law.'' I do not see that that will avoid the problem.

I agree with you that we do not want to have that happening, but I do not see how it can be avoided.

Senator Beaudoin: It will happen, I agree with you. If we do not do it, they will do it. However, the minute you have a statute or legislation, you have jurisprudence. It is before the courts. It is unavoidable.

Mr. Hodgetts: Yes.

Senator Beaudoin: However, if we do our job adequately, we would write — to use the words of my colleague Senator Bolduc — a ``beautiful'' statute that is very well written and well thought out. I know it is possible to do that. We do have some statutes that are very well written, although they are not always perfect. If we do that, at least we will have done our job.

Of course, the court will intervene, and I have nothing against the court intervention because that is our system. However, I am strongly in favour of Parliament acting in the first instance. We must confirm our power to legislate, and we have a chance to do that with the civil service.

Mr. Franks: My reading of the bill, which I confess was cursory and probably inaccurate, is that a laddering measure of merit has been selected. In other words, people are in a ranking order. Merit is a doorway that you either pass through or you do not. There are numerous people on the one side who are considered to be meritorious from which the managers can choose their person.

I have asked myself why that was added. Was it put in to prevent litigation because it would open up the freedom to choose amongst a group of people without getting into issues of how to rank very good people one, two, three, four or five?

I suspect that the hope was that it would reduce the opportunities for litigation on the grounds of merit by simply saying that several people passed the requirements, but though many are called, few are chosen for a position. That is a question that is worth pursuing with the people who drafted this bill. I do not know the answer to that question and I could not find it in anything I read.

Senator Chaput: I appreciated both presentations. It gave me some history as to what has been tried before, what has worked and what has not worked as well. We always learn by whatever has been tried previously.

I would like Bill C-25 to enable us to address fundamental issues. This bill should lead to the development of procedures and perhaps more refined definitions of certain terms.

I will give you examples of fundamental issues. An example is equality of access to all Canadians. I do not believe there should be any geographic restrictions. Will the bill enable us to have that? Will it enable us to address the accountability issue, the transparency in the hiring process? We talked about the definition of merit. Will it allow us to push that definition further? Will it enable us to address proper delegation? It deals with the delegation of powers, but we all know that if delegation is not properly handled, it does not work.

According to your experience, do you think the bill, as it is now, will allow the development of some kind of action plan with procedures that will allow everyone to move on in a better way?

Mr. Franks: I will give a very brief answer, and Professor Hodgetts will undoubtedly think deeply about the question and give a better answer.

In the Canadian public service, there has always been a local public service and a national public service. It has always been recognized that some people are hired locally and not nationally. The question becomes where you hire locally and where you hire nationally.

We return to Senator Bolduc's point on the foreign service. They recruited nationally for their officer class in a competition. We never really succeeded in doing that for the potential senior civil servants at the national level in Canada. That is something that has bothered me.

It bothers me much less that, at the local level, conditions of employment and even the definition of merit are responsive to the local circumstances. There are areas in Canada where you really should speak Ukrainian if you are to be a decent public servant and deal with the public. There are many areas where bilingualism is essential, and many areas where unilingual French is okay and where unilingual English is okay. I could list half a dozen languages that are almost vital in some parts of Canada. Those facts need to be taken into account. You need the local sensitivity, but, at the same time, we need national standards and a national framework. That tension is very difficult to resolve because we are such a complex country.

The answer I give is that we wrestle with the two, and I do not think we ever get a satisfactory answer.

Mr. Hodgetts: As a historical recollection of what was called the locality preference, interestingly, in the debates over the first major civil service commission change in 1918, much of the debate focused around this issue of regional selection. The concern was that it was all going to be centralized in Ottawa. I think this is, perhaps, part of your concern. At the time, it was realized that this was a way of getting a handle on patronage, because the patronage proclivities extended exceptionally to the locality where the local MP was able to get his own people in.

There was a centralizing tendency built into the system at the beginning. I think the expression I used was that the first civil service commission was the equivalent of Alcoholics Anonymous. It was to serve as the conscience of the Members of Parliament in the selection of people. They were to be deprived of that privilege, and many of them claimed that they were very pleased to turn it over to someone else rather than being pestered by local people. That is the context, I think, in which this highly centralized notion was derived.

I do not know that I have the same understanding that you have, that because many of the significant appointments are made in Ottawa, the recruitment of people is necessarily confined to the Ottawa neighbourhood. Is that what you have in mind?

Senator Chaput: Yes. A colleague of mine, a senator, did quite a bit of research on the subject. Senator Ringuette came up with some interesting figures regarding the fact that, because geographic areas are limited, people out of those geographic areas cannot apply for a certain position. There is a limitation. If before there was more patronage at a local level, it seems to me that the situation now it is the opposite. I could be wrong, but that is what I am hearing.

Mr. Franks: One of the concerns that I have had in this, senator, relates to the strange words that are now used — ``determinate'' and ``indeterminate'' appointments. I believe I have that right. It seems to me that a lot of people — I do not know the proportion — come into the public service on determinate appointments. In other words, they are short term, as I would understand it in everyday English. They then get moved into a permanent position without there being an open competition. Perhaps that is part of your concern.

Senator Chaput: That is right.

Mr. Franks: That does need to be addressed, because it raises questions such as: How do you recruit people into the determinate or short-term positions? Do the same standards and processes apply as those that apply to long-term, permanent positions? You have put your finger on a problem in that area that will need to be addressed at some point.

Senator Chaput: Will this bill allow us to address these questions?

Mr. Hodgetts: The one component of it that is relevant, as I recall it, will not address your concern, and that is that these determinate appointments, the short-term ones, can be made permanent by a deputy minister's action after six months. In fact, they must be, or else they have to go. That would simply perpetuate what is your concern. I do not know enough about the details of the bill to be able to respond to your concern other than that.

Senator Kinsella: I was going to ask Professor Hodgetts to embark on his lecture of the distinction between the private sector and the public sector, for I, too, share what I am sure is his concern. We hear the terminology, ``the clients'' of the public service.

The Chairman: Stakeholders.

Senator Kinsella: Yes, terminology of that genre. This afternoon, we heard from the executive officers, as a group, from the sector of the public service. Briefly, is there not a concern that we should be aware of that as it relates to the philosophy, at least, or the background of this bill that seems to be moving us away from public service as something which is radically different from private sector employment settings?

Mr. Hodgetts: You are talking to a real mugwump on this one. I detest all of the vocabulary that has emerged out of what is called ``the new management movement,'' which is all derived from management consultancy firms on the private sector side. I have had to cope with this since the Glassco commission days when it was first invented: ``What is good for General Motors must be good for Canada and for the Canadian government.'' They then proceeded to implant these traditions, systems and so on into the Canadian government. Then we found out later that they had not even sold them to the private sector. We were, I think, in a sense, sold somewhat of a bill of goods in that.

I have always had a pretty strong bias against the injection of the so-called business principles into government. At the lowest level, there is no bottom line in most instances, and where there is a bottom line, we put these out to special agencies and converted them into the model of the private sector. We are left with a diminishing group of the hard core, if you like. That is dwindling as we speak, almost, and it makes one wonder whether this will ever cease.

I do not think I could really give you a clear-headed version of my lecture on the differences between public and private, but they are significant enough in terms of the defining of the public interest. Why do we bother about merit in that sense, other than the fact that we are working in a political context?

Senator Kinsella: Professor Franks, given this, what case could you make to sustain the proposition in this bill to take the recourse function that the Public Service Commission currently has for people who wish to appeal maltreatment that they perceive and to establish this other agency, the tribunal? What is the best argument do you think that could be made and, on the flip side, what is the best case to be made to leave it where it belongs in the Public Service Commission?

Mr. Franks: I really like both your questions. Let me answer your question on the use of the word ``clients'' to begin with, because I think I get as irritated as my colleague here on that.

In the food inspection service, who are the clients? Are they the people being inspected, or are they the people of Canada? Do we have something called a public good that public servants ought to be recognizing as something they try to achieve?

As far as I know, most front-line public servants like the public service because they are serving a general public good, not necessarily specific clients. It is not true of everyone because of the huge range of items at that level, but we run into pretty serious problems of demeaning the functions of the public service and the values they hold if we adopt business language solely.

The second question you asked is the one I would really like to answer, although I have absolutely no idea what the answer is. If I were trying to invent an answer, it would be something along the lines of my comment. They did not dare get rid of the Public Service Commission. They did not think it could be reformed, so they created another tribunal. In some of the literature you read it states that this tribunal will deal with grievances differently because it will not be working with precedents and it will not get rule-bound and hung up on all these legal details. I do not believe a word of it. I think you should ask other people who know far more about why they did it than I, so that you come up with an answer to your question. I do not believe you will go to bed satisfied.

Senator Milne: I want to thank you two gentlemen. This has been a most interesting view of the entire bill through a different prism than what we heard this afternoon.

Professor Hodgetts, I felt very depressed when I heard your litany of moving from the Gordon commission through the Glassco commission to the Lambert commission and on, and how futile it had all been.

Mr. Hodgetts: How repetitive it all was.

Senator Milne: It was going over the same ground again and again and again. Then you say that this particular bill may have the effect of further rigidifying the control regime.

From what we heard this afternoon, most groups were very much afraid that this was loosening up the regime far too much, giving far too much control to managers and far too much flexibility to managers, rather than rigidifying it.

Then Professor Franks came in from a slightly different angle and said that the measures in this bill are a step in the right direction. However, they are only the beginning of what will prove to be a long, slow period of adjustment. God help us if this goes on much longer and more slowly than this has already done so far.

I am having difficulty reconciling those two views; first of all, that it is basically going to set in concrete more solidly the present system within the civil service, and Professor Franks saying that it is at least a start.

Mr. Hodgetts: Part of my assumption was that the more actors you have involved in it, the more complicated you make it. Precisely because they have added this new public service staffing tribunal, I cannot see anything more than greater rigidity in it. I do not see where people would come out saying, ``We have streamlined this thing; we speeded up the process; we simplified the process.'' It has become much more heavily judicialized. There will be much more intervention of the courts. The public service staff appeal business is great for lawyers in this situation, but I really cannot see that there is any simplification or any streamlining.

Much of this is covered up by weasel words. We are now resorting to what is called ``a values-oriented regulatory regime,'' as if that dispenses with all rules and regulations of the game. That is absolute nonsense. I reject that as a simple-minded solution. That is my answer on the rigidification. I just do not see that it will help one whit. As I say, the more people you get into the act and the more elbowroom you have, I can see a great jurisdictional battle being built up, with all of the organizational upset for the Public Service Commission in trying to find its new role and adapting itself to the public service tribunal, which will take one of the core programs out of the commission to do precisely the same sort of thing, as I see it. I do not think it will function under fewer rules or regulations, as you were saying.

Mr. Franks: I think we are talking about two different things. One is the appeals process, where I agree totally with Professor Hodgetts that every time you give someone a position and a job and some authority, that person will have to make rules and regulations and establish procedures. The more people you have establishing procedures, rules and regulations, the more complicated it becomes. However, the other side is that the allocation of responsibility to deputy ministers simplifies a complex situation, accepting the qualifications and concerns that have been expressed here about local hiring versus the national public service, et cetera. Those are things that will have to be worked out.

I do feel that ``clarifying,'' if I can use that word — it is a weasel word — to describe what is happening to the agent of Parliament to be put more in a position of reviewing decisions and then reporting to Parliament on them rather than actually engaging in executive functions is a simplification, and it is a good one. That is where I wind up. There is good and bad in this. We will not get perfection.

The other answer that I would give you — and as I say it is a long, slow process — is that I am sure we will have amendments to this bill in five years when things happen, and five years again, and there is nothing wrong with that. Things change and adapt. What we need in much of this is creeping incrementalism rather than total reform.

Senator Oliver: My question is directed to Professor Hodgetts. Professor Franks has told us that the goals of this legislation and of the public service are to, first, have a first-class public service, and second, to have one that is non- partisan or free from politics and political action. In your remarks, you referred to something you saw in the other place, as you called it. You said that most of the amendments in the other place related to doing things to control the second point, that is, making sure that the public service was non-partisan. In this particular bill there are provisions so that deputy ministers and others cannot contribute money to political parties and so on, and there are other provisions to ensure that they do not get directly involved in the political process.

In the year 2003, how far do you think this should be going? What did you really think of the amendments that were made in the other place? Is this really necessary? In other words, in order to have the second component, a public service that is non-partisan and free from political influence, what is the best way for us as legislators and public policy- makers to be going about that?

Mr. Hodgetts: Again, there is an excess of zeal in creating more words in the legislation dealing with the various types. It could be handled much more simply. Professor Franks and I were talking about this on the way up. He has probably some very sensible remarks to make about the simplification that could occur in terms of the legislative statement about that, but partisanship is not all about the political activities of civil servants. There is also an abiding concern, particularly I think amongst the unions, about bureaucratic patronage. That kind of concern keeps floating up. I do not know with what support generally, but it is on people's minds, and I gather that somehow that is the component of it that is going to be dealt with by the public service staff tribunal, because it will deal with what are called inside appointments. I take those to be promotions, not the first appointments but the appointments made from inside. These are the ones that seem to be reserved for the tribunal.

In the presentation of the staff associations, I noticed that they were favourably disposed to the tribunal on that score. On the other hand, they were concerned that there were a number of things that had been left in the hands of the commission and they could not have access to those.

Senator Oliver: This gives them recourse.

Mr. Hodgetts: Yes. There is that other component in the matter of patronage and the political side of it.

Mr. Franks: I think that many things are best dealt with by simple prohibitions. ``Thou shalt not'' is much clearer than, ``Thou shalt.'' The ``thou shalt nots'' at the very senior levels, I think, refer to all public and private partisan activities. For instance, I firmly believe that, if a public servant gives testimony to one party caucus, then that public servant ought to give testimony to every party caucus, et cetera. I think that is a very clear ``thou shalt not.'' A very clear ``thou shalt not'' is that you shall not appoint people on the basis of their partisanship or party support.

Senator Oliver: If a deputy minister writes a cheque for $500 to a political party or a candidate, is there any magic in that? We used to have a provision in our Elections Act before the Charter that judges could not vote. I could never figure out why we had it there because it did not make a lot of sense to me. It is just like saying that a deputy minister cannot write a cheque for $100 to a politician. Will that taint him for life?

Mr. Hodgetts: There was a provision in the act some time ago that public servants could not vote either.

Mr. Franks: I do not know. We have had enough problems in Canada from time to time that I feel that at utterly senior levels, they have to be as pure as Caesar's wife.

At the middle and lower levels, you have to open up the opportunities for public servants to participate in politics. For the bulk of the public service, as long as they do not do things that interfere with their capacity to do their work or use their work to further partisan objectives, almost everything should be open to them. In fact, in many countries of the world, 40 per cent of the members of their national assemblies are public servants. There is a huge amount of knowledge and experience within the public service that is useful in public politics, just as much as it is useful inside.

Senator Oliver: Do you think that Bill C-25, as amended, has struck the proper balance?

Mr. Franks: May I plead ignorance, senator, on this one? I am not sure and I do not know enough about it to give you an answer.

Mr. Hodgetts: I gave a fairly rough and rapid reading to the 200 pages or so of this bill. As I stated before, my feeling is that there is excessive detail in there. The amendments simply add to that excess. I think there are simpler ways, as Professor Franks is saying, of trying to cope with that.

Someone will make judgments about that, and when they get into the act, there will be endless appeals on this. So it goes.

Senator Ringuette: I have a major concern in regard to geographic restriction. If you end up with a bureaucracy that is mostly centralized, then you lack the knowledge and the understanding of the regions, something which is fundamental to Confederation.

We have received reports that a lot of money, effort and time — in fact, 12 years — have been invested by senior public servants to design a universal standard classification system, without successful results. Therefore, we are being asked to modernize the public service staffing, complaints and employer-employee relations process while we do not have job classifications, which is basic. We do not have a structured pay and reporting system. We also know that only 4 per cent of government departments have HR planning. Yet, we want to delegate responsibility for human resources further and further to managers. That is a real concern to me. I feel that we are missing the basic requirements to be able to do that, so that our managers have the right HR training, and put into place a proper HR structure and requirements for the years to come. I say that knowing of the attrition that will be taking place within the federal public service.

I have all these concerns. I know you probably cannot deal with all of them tonight, but I would like to have your comments, please.

Mr. Franks: Senator, my guess is that you will be in the Senate long enough to see how some of these things play through.

Senator Ringuette: I will certainly be a watchdog.

Mr. Franks: May you do that.

One of the reasons departments have not done human resources planning and all the associated things is that much of the responsibility and the authority to handle human resources management are not within departments. Therefore, they have not had an incentive or the powers to do it. These things should be delegated to the deputy ministers, not further down in the departments. What the deputy minister does in a department is a different matter. The responsibility should very clearly be with the deputy minister. However, they should have more so that they have an incentive to do human resources planning, et cetera. There are many other things than human resources planning. All the equity considerations should be on their minds.

The universal standard classification has puzzled me as much as it has you, senator. One of the questions that I have always asked is: Why do not we classify the person rather than the position? That is what is done in the military. We could use that sort of basis for our work. It might be easier because then an employee could move up from position to position. You might have a ``3'' occupying a position at one time, a ``2'' the next and a ``4'' the next. In the navy, you might have a lieutenant commander, a commander or a captain as the captain of a ship. I have often wondered about that, but I cannot respond to it.

As for the regions, it is vital that inside our national public service, ignoring local public services, we have sensitivity to the variety of Canada. Professor Hodgetts told you about his royal commission experiences going back to Glassco. A few years later we had a royal commission on bilingualism. I did some studies for it on the public service. One of the things I found very strongly stated by the very senior and very few francophone public servants, primarily in the Treasury Board Secretariat where I worked, was that they felt they needed more francophones to have a francophone presence and a way of expressing things within the secretariat. There were too few to be a group to force changes. I think that is true for many groups within the public service. We find that, at the upper levels, there tends to be a homogenization and not enough representation of the minorities in the regions.

I see problems brewing in Canada, like in the Islington area of Toronto where there is a large Caribbean Black population. It makes me weep at the waste of human potential and at what goes on. We really must do something to force the public service, which after all in many ways is the creator and thinker about public policies and the initiator of a lot of ideas, to accept the diversity and the problems of Canada. That is the damnedest thing to do because you wind up with an organizational culture that reflects the dominant things, and primarily the dominant ones are upper middle class French and English European ethos. We will have to work at that. We have a real problem, I agree with you.

The Chairman: Professors Hodgetts and Franks, this has been a wonderful seminar and discussion. I hope you have enjoyed it as I think we all have. It has been extremely useful to the members of the committee. We thank you.

The committee adjourned.