A Public Service That Works for Better Government Services

The Goal

To create a modern, effective, and accountable federal civil service that delivers better services at lower cost. Our goals:

• Within four years, reduce the size of the federal civil service to 2015 levels (a reduction of ~110,000 employees) saving ~$13 billion per year for Canadian taxpayers.
• Mandate and publish department performance metrics and targets for all federal civil services. Use these metrics to determine performance-based pay and employment decisions. 

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Background and Motivation

Canadian public sector productivity has stagnated for decades, pulling down the growth of the Canadian economy. Canada’s federal workforce has swelled to the largest number ever, consuming a disproportionate share of national resources while delivering diminishing results.

• Stagnant productivity: Since 2008 Canadian public sector productivity has flatlined. Increasing productivity, doing more with less, is the engine that drives all economic growth. To improve requires investments in new technologies, new ideas and a consistent culture of high performance and accountability. Since the Financial Crisis our private sector has made these investments, adopting new technologies and workforce practices to survive. Public sector productivity has declined as the civil service has added headcount without making the changes needed to make workers more effective.

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• Overgrown bureaucracy: The federal civil service added more than 110,000 employees between 2015 and 2023. This increased the workforce-to-population ratio from 0.72% to 0.91%, the largest proportion since the stagflation of the 1970s. The Canada Revenue Agency (CRA) alone has grown from 40,000 to 59,000 employees since 2015 – a 48% growth in headcount or almost 3x the population growth over the same period¹. This is 1.5x the size of the UK tax authority and 2x size of the Australian tax authority on a per capita basis². 
• Declining service: At the same time that real federal spending has grown 32% since 2010, citizen satisfaction is at a historic low. There have been significant issues with delays in immigration, benefits, and tax processing. Today only 16% of Canadians say they receive good value from government services³.
• Poor accountability: A lack of consequence has created a complacent culture. Firing for incompetence is virtually nonexistent—in 2016, this was <0.03% of employees⁴. Private sector rates are more than 20x greater. Low performers are not only less productive, they also drag down high performers, preventing our best public service employees from having the impact they could. 

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Real-World Solutions

It is possible to create a productive, efficient civil service with a culture of performance. We have done it in the past and we can do it again. 

• Canada: In 1993, facing a large deficit and ballooning debt, the Liberal government under Jean Chrétien pushed to restore fiscal discipline. Every government service was subjected to rigorous evaluation based on “six tests” to determine if the service was necessary and how it could be delivered most efficiently. Departmental operating budgets were cut by 20% on average and from 1995 to 2000, federal spending as a share of GDP fell from 22% to 17%. By 2006, it had fallen to 15%, the lowest level since the 1940s^5,6. 

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• Singapore: In Singapore the public sector has an essential mandate to attract the best talent in the country and run the government efficiently. The Public Service Division benchmarks salaries against the private sector to ensure competitiveness. The Civil Service Performance Bonus ties pay to economic growth and individual performance. Additionally, Singapore enforces strict accountability with structured exit policies, allowing for easier termination of underperforming employees. Canada must adopt a similar, merit-driven culture in government. 
• Private sector: Private sector firms need to continuously invest in productivity improvements or risk bankruptcy. Companies that do not create a culture of performance, adopt new technologies, and streamline operations collapse under the weight of inefficiency. The government is not a company, but we must find ways to create similar incentives for our civil service. Our agencies cannot be considered “too big to fail”.

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Why This Matters

High costs mean higher taxes, less investment in innovation, a weaker economy, and a lower standard of living. If we do not reform the system, costs will rise, productivity will continue to stagnate, and essential services will continue to deteriorate. If instead we create a civil service with a culture of performance that rewards competence and results, our government could be as productive as the best private sector companies in the world, offering world-class service in a way that is smart and cost-effective. 

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What Needs To Be Done

We are proposing comprehensive legal and structural reforms to create a leaner, more accountable, and results-driven civil service.

• Set ambitious targets: Introduce a performance and results system to set and cascade clear, ambitious, aligned, and measurable targets for service levels and costs in all departments. 
• Improve Accountability: Currently, only executives are judged based on service performance, and >97% meet their expectations and are given their at-risk pay or more⁸. Enhance the current performance system to include all civil service employees. Reward high performers with merit-based pay and career advancement based on ambitious targets. 
• Review Our Services: Create a tough review process to ask if a program serves the necessary public interest, was affordable, and fits the federal mandate. If the answer is no, eliminate the program. 
• Reset to a New Baseline: Rapidly return to a reasonable size for the civil service through a combination of a hiring freeze, buyouts, early retirement, and transition support to encourage voluntary departures following the approach that Jean Chrétien used in the 1990s.
• Streamline Dismissals: Amend the Financial Administration Act to allow termination after two consecutive quarters of unsatisfactory performance. 

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How To Do It

To achieve these reforms:

• Clear Targets: Within four years, the federal workforce will be reduced to 0.65% of the population.
• New Oversight Mechanisms: Establish an independent time-bounded agency to audit departmental efficiency and effectiveness, and propose cost-saving measures.
• Tracking and Transparency: Create modern dashboards to publicly share federal and departmental progress against workforce efficiency and core service metrics*.
• Issue Immediate Changes: Issue Orders in Council to freeze hiring, start a program review, offer buyouts and strengthen mechanisms for dismissal.
• Legal Amendments: Modify the Public Service Employment Act and the Financial Administration Act to streamline hiring, firing, and performance tracking.

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Common Questions

How will reducing the federal civil service by around 110,000 employees in just four years avoid causing a loss of institutional knowledge and a “brain drain” We are recommending a strategic combination of hiring freezes, voluntary buyouts, and early retirements. Not mass layoffs. This allows high-performing staff to remain while underperformers opt out or retire, preserving institutional knowledge. Meanwhile, by rewarding strong performers we will attract and retain top talent, reducing risk of a brain drain.

Will a focus on performance-based metrics lead to short-term thinking and incentivize “gaming” the system instead of delivering genuine long-term improvements? All performance metrics will be aligned with broader, long-term outcomes—like faster service delivery, cost efficiency, and citizen satisfaction—there is less room to “game” short-term numbers. Regular audits and publicly available dashboards discourage manipulation, and aligning targets from top to bottom ensures that everyone’s short-term goals support long-term service improvements.

Will these reforms lead to unfair firing of public servants? The focus of the reforms is to develop clear, transparent performance standards. The emphasis on accountability and clear expectations helps high performers and ensures consistent due process, protecting employee rights while enabling appropriate dismissals for truly underperforming staff.

Won’t adding oversight agencies just increase bureaucracy instead of reducing it? Our recommended review process is time-bounded with the aim of streamlining existing processes rather than adding permanent layers. Once processes are improved and departments are right-sized, the review group will be phased out. 

Conclusion

We must act now to reform Canada’s civil service. By rewarding performance, cutting waste, and increasing accountability taxpayers will save billions, businesses will thrive under a more responsive system, and we will develop a government that prizes excellence and works for Canadians. In five years, Canada’s government will deliver better services with fewer resources and have created a culture of performance that ensures Canadian prosperity. 

* Core Service Metrics. The Federal Civil Service should be measured and held accountable just like any service provider. We should have a set of core service metrics including: Passport Issuance Turnaround Time, Immigration Processing Timelines, Employment Insurance (EI) Claims Processing Speed, Tax Filing and Refund Turnaround, Call Centre Responsiveness, Benefits Payment Accuracy Rate, User Satisfaction, and more that reported quarterly or better. These should be used to measure civil service effectiveness and be available to the public through easily accessible public dashboards.

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