Inexperience at root of federal government stumbles

October 16, 2017, 2:03 pm

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Government’s inner workings are Byzantine. Civil servants who are beyond the reach of voters propose and sometimes push policy positions. It’s up to the elected politicians to accept, reject or modify the advice from their bureaucrats.

Like a John Lecarre spy novel, there are many agendas at work in the public service, often overlapping and sequenced, like a chess game.

From altruism—it seems like the right thing to do—to darker self-serving motives like growing a department’s reach, budget and the power of civil service managers, many factors can underlie the recommendations of bureaucrats.

And the people pitching ideas are patient. Just because today’s political watchers reject an idea, nothing prevents it from being advanced again in a couple of years.

It is the job of intelligent, diligent and well-briefed Cabinet Ministers to use governance principles to ask the right questions in order to test civil service recommendations and, at the same time, ensure that policy jibes with the government’s political priorities.

Two recent slippery spells for the Justin Trudeau Liberals bear out the need for diligence and the necessity of having some adults in the room.

For years, senior Department of Finance bureaucrats have wanted to rein in the use of corporations for tax planning by professionals and business operators.

Some of this is motivated by a desire to stop what they see as tax avoidance. In other cases, it’s about envy and hubris from senior bureaucrats making $200,000 a year, with six weeks of vacation and generous taxpayer-paid pensions, who don’t like people getting tax advantages not enjoyed by Ottawa mandarins.

In the past, politicians named Jean Chrétien, Paul Martin, Stephen Harper and Jim Flaherty all rebuffed the advice to go after corporations because it would harm business investment and wouldn’t play on Main Street.

Is it mere coincidence this time that an inexperienced Prime Min­is­ter who is a trust fund millionaire insulated from real world values becomes the one to finally take the Finance Department suggestions and run with them?

At his side in this folly is not a Finance Min­is­ter of the Martin or Flaherty experience but an inherited multi-millionaire who never held elected office until 17 months before he rolled out Finance’s corporate tax plans in his latest budget.

Then, there was last week’s debacle where Canada Revenue Agency supposedly “got ahead” of the government by expanding the interpretation of tax rules to grab previously untaxed employee discounts.

It is part of the bureaucratic code that nothing happens without Ministerial approval. So how did this one slip by?

We’ll likely never know but in 2015 when Justin Trudeau rolled out his “diversity cabinet”—one of the least experienced in Canadian history—we assumed that he had at least covered basic competencies.

The Minister of Revenue is Diane Lebouthillier, a social worker from the Gaspe region of rural northern Quebec who was in municipal politics before being elected to Parliament. She has never participated before in the governance of an enterprise even close to the size or complexity of CRA.

While proudly noting earlier this year that she had finally been able to do her first interview in English, she wasn’t up for live radio interviews in English when we asked this week.

After three days of defensive scrambling, the government backed down.

But it is not known if the CRA Minister unquestioningly deferred to “experts” in her department giving her advice on taxing employee discounts; or if someone was asleep at the switch and simply missed the implications of CRA’s briefing.

It is also possible that this CRA decision was the product of a combination of inexperience, naïveté and the dangerous belief of those making the mistakes that they are the smartest people in the room.

This is becoming a pattern and it is not going to end well.

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