As governments around the world face spiralling budget deficits, policy-makers may want to study Canada’s successful deficit reduction program of the 1990s.
As Clerk of the Privy Council, Secretary to the Cabinet and head of the public service, Wayne Wouters supports the Prime Minister, directs government business and leads Canada’s civil servants.
Earlier in his career, Wouters served as Assistant Secretary to the Cabinet for Program Review. In this role he oversaw preparation of the expenditure reduction plan that was part of the 1995 Federal Budget.
“With the Program Review in the mid-1990s, our aim was to eliminate a deficit of 6% of GDP. “Because we had to cut so significantly, it was a bridge too far to say you could have achieved that type of deficit reduction simply through efficiency savings.”
So what was the key to achieving deficit reductions in the 1990s? “First and foremost, there was political leadership. We had a Prime Minister who was clear on his intent and said we were going to address the deficit.”
Wouters goes on to say that getting the process right is critical. “It is one thing to say we are going to reduce the deficit, but you have to build accountability and buy-in.”
David Herle, senior political advisor to then-Finance Minister Paul Martin, says, “There was a continuing economic torpor that meant people really began to feel we would never come out of the recession.”
He adds, “People need to say ‘we have a bad economy because of the deficit.’ When the deficit stops being seen as a symptom and starts being seen as a cause that’s when you can start to mobilize the political will for real changes.”
David Herle on leadership and political will: “But what’s paramount is ensuring that people understand why you are doing this, why they have to make sacrifices and what the benefit will be.”
Herle, while at pains to stress that “When you’re cutting there are inevitably going to be losers,” reiterates that consensus is the foundation of any successful program.
“Leadership and political will is very important,” he says. “But what’s paramount is ensuring that people understand why you are doing this, why they have to make sacrifices and what the benefit will be. Most people can buy into that.”
In his current role, Wayne Wouters works closely with the Prime Minister, Stephen Harper and oversees Canada’s federal public service. He strongly believes that it is incumbent on him and his colleagues to be open to new ideas and suggestions.
“The world is becoming increasingly complex, with globalization and technological advances, and I think we have to recognize that governments no longer have all the ideas or all the tools to address the needs of Canadians,” he says. As for the future, Wouters is an optimist, suggesting that great opportunities are on offer for his country.
“I am honored to serve as Clerk of the Privy Council and am very proud of our public service. We still have our issues and tensions but Canadians come together when we need to. There has been tremendous cooperation between federal and provincial governments on the economic crisis.
“The structure of our federation means collaboration is how government works. It is part of who we are. It is something we have always had to do. Healthcare, education and welfare are all delivered by the provincial governments. We may not be perfect, and we often emphasize our differences, but our public service is amongst the best in the world. I think we do a pretty good job in serving Canadians.”