Remarks by Michael Wernick, Clerk of the Privy Council, at the Finance Canada Town Hall

Speech

June 11, 2018
Michael Wernick, Clerk of the Privy Council

Check Against Delivery

Thanks Rob [Stewart, Associate Deputy Minister and G7/G20 & Financial Stability Board Deputy for Canada]. I will take a slightly longer historic view than the Minister did.

First, I want to give a quick shout out to Minister Bill Morneau and acknowledge his recap of the adventures of the last few years that we have been through together. My answer on that question is, yes it is the best job I can imagine, but not every day. I think, Minister, you would probably, in an unguarded moment, share that view. Today, I will take a slightly longer view.

I started at the Department of Finance Canada 37 years ago, during the summer of 1981. As an ES-1, my salary was $15,900. It has been a tremendous ride ever since. I spent six years here, worked on several budgets and transition packages for changes of government. There were many things going on during those six years. I am going to go through just a little bit, of what was going on in the background over that period. I could also talk about other things such as the arrival of the first McIntosh computer in the Department of Finance or fax machines. I can tell you a whole technology story set during my days at Finance.

When I arrived in the Department of Finance that summer, the big challenge that was preoccupying everybody was stagflation, low growth and very high inflation. People were walking away from mortgages that summer and were being offered six-month renewals at 21% interest rates. There was a sense that we could not get inflation under control. Minister [Marc] Lalonde brought in 6% inflation targets. He was wildly criticized by the press of the day. They thought that he was being completely unrealistic and that it could never be achieved.

We can fast-forward to a convulsive national debate about free trade with the United States, the original decision to get into the free trade agreement and then NAFTA [North American Free Trade Agreement]. The first wave of disruptive technology comes along: the internet changes, supply-chains, entire industries, the way government worked. There was a sense that we could never solve the fiscal and debt problems that were piling up. We had debt numbers that were crawling up into 100% of GDP [gross domestic product] and deficits of 6% of GDP. These are all numbers you can look up. This era was followed by the Chrétien government and with Paul Martin in the Chair of Finance Minister. Together, they brought in the famous 1995 budget.

We went from a 6% of GDP deficit to a surplus in less than four years without the kind of social upheaval and disruption that you have seen in many European countries when they have tried to do a lot less. In the background, we were going through a national unity crisis, a referendum on the possibility of breaking up the country that was driving up interest rates, and the Asian Tiger crisis, for those of you in the room with long memories. We went through the tech crash of 2001 and all the optimism caused by that internet phenomenon suddenly turned to ashes, and stocks went from $180 to $3, and people's savings evaporated.

Then, the global financial crisis of 2008-2009, a sickening feeling that we did not know where the bottom was as institutions started to crumble, ministers and leaders around the world, trying to figure out a path through that. The creation, in a matter of weeks, of a very large stimulus package, which took the Canadian economy through those periods better than any other economy in the G7 or the OECD [Organisation for Economic Co-operation and Development]. Then, a decision by the government to unwind that stimulus put the brakes on in 2012. Then, we went from those kinds of deficits and investments back to surplus in a few years.

Then, we go into a conversation that began with this government around the fundamentals of growth. Also a conversation with Canadians about how to get onto a higher growth track so that we could generate the good jobs for people and the revenues that would pay for the health, education and other social services that Canadians have come to expect. The many opportunities and challenges that we are talking about these days, and the Minister referred to so many of them: being able to tackle the retirement income system, the health system, employment and student aid, just to name a few.

Today, we are also talking about the environment, the economy, carbon pricing, and how to grow an economy and still leave a planet for our grandchildren. We are also talking about the place of Indigenous peoples in the country and how they can become full participants in our society, our economy and our decision-making. How we can create growth which is truly inclusive and that does not leave great sections of the Canadian population isolated and behind and feeling that the system does not work for them, which you have seen in Britain and Europe and south of the border. There, it has turned into people becoming unhappy with the entire system and turning on it with anger. These are big issues. It has been quite a ride.

Why do I tell this story?

Because we take for granted that we live in a country under the rule of law, with a free press, independent courts, a vigorous legislature, and the ability of governments to take decisions and implement them. There are not many countries that can say that. There are many countries that would wrestle with these issues and give up in defeat. They could never create the conditions—either to find the answers to solutions or to steer a country through them and implement and execute them. Time after time, generation after generation, Canadians have risen to that challenge.

Because it is now National Public Service Week, I am sure I will be telling that line many times this week. We have a very strong, values-driven partnership between the women and men that go out, knock on doors, and get a democratic mandate to sit in that Cabinet room or that legislature. They take decisions on behalf of the other 36 million Canadians supported by a values-based, capable, excellent, non-partisan public service. Moreover, we wrestle with the issues together, we give advice, we implement direction and it has been an amazing partnership that has served this country very well. It has allowed Canada, repeatedly, to respond to change and challenge better than almost any other country in the world.

That is a legacy. That is your legacy. It is our legacy as Canadians, and we need to pass it on to future generations in good shape. You happen to work in a remarkable part of that public service. You are at the centre of all these important decisions, the allocation of resources and the creation of new policies. I cannot think of a public policy issue that you have not been part of or would not be part of, going forward.

I want to thank you for where you have come from and what you have done. I want to challenge you to continue that legacy into the future, to always pursue excellence in your analysis, evidence in your advice, to challenge your own assumptions about the way the world works or what is going on out there. You have specialized expertise in some areas that nobody else in town has, and you have partners all around the public service that have deep expertise and networks and connections. Learning how to collaborate with other organizations and teams is the secret sauce of public service these days.

Be open to people, bring them in, and bring in new talents, new voices and new ideas. Find more inclusive tables of decision-making so that every voice is heard and every talent is given an opportunity to contribute. It is not a time to rest on our laurels. It is a time to double down because the challenges are so big out there. The world is sometimes a disturbing place to watch on the evening news. Canada will come through it because we have the governance and an excellent, non-partisan and values-driven public service.

There is no algorithm for good government. It is based on people. People with skills, with values, and with a passion and a commitment to serve their country and make a difference in their communities. Pass it on to the next generation in better shape than you inherited it. That is the legacy and tradition of the Department of Finance, the Public Service of Canada, which is, on several rankings, the best or among the handful of best public services in the world. I am talking about rankings by the World Bank Governance Index, the OECD, other think tanks, institutions, business schools and the Forbes magazine.

We get a lot of feedback about what we could or should have done better and we accept that. When it happens, we pick ourselves up, learn from it and commit to do better. The feedback loops tend to focus on what we could or should have done better. However, do not ever lose sight of what we do well. It is a remarkable public service, it is a remarkable country, and you are a remarkable institution. Be proud.

Thank you.

Pictures of the event are available on-line


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