Donald J. Savoie is the Canada Research Chair in public administration and governance at Université de Moncton and the author of Speaking Truth To Canadians About Their Public Service.
We are dealing with a capricious U.S. President who is taking selfish nationalism to new heights.
Donald Trump is wrong to argue that the U.S. doesn’t need anything from Canada – think potash, rare minerals, water, electricity, oil and gas, tourism dollars and a politically stable and reliable trading partner. One has to be hopelessly naive to think that Canada could simply become America’s 51st state or that Canada would accept the same standing as Rhode Island, with only 3,144 square kilometres in size, or Wyoming, with a population of 590,000. (Note that New Brunswick is bigger in size than Rhode Island and has more residents than Wyoming.) And why would we agree to join a country that has a US$34-trillion debt? We have more than enough debt in Canada as it is.
Canadians need to take seriously Mr. Trump’s game plan designed to weaken Canada’s economy, for whatever purpose he has in mind. Our Minister of Foreign Affairs, Mélanie Joly, maintains that Canada is facing an “existential” crisis. To be sure, Canada cannot win an outright tariff war with the U.S. given the imbalance between the two economies. If Mr. Trump stays the course with his tariff agenda, Canada will have to cope with a severe economic disruption.
Accessing the U.S. market has been easy because of the free trade agreement, proximity to market and comparable political institutions. Buying Canadian and bringing down interprovincial trade barriers hold promise. But more is needed. Our export-oriented businesses must retool in their search for new markets – but that’s easier said than done. The road ahead for our private sector is full of challenges.
What about the public sector? In the past when confronting a crisis, the public sector simply battened down the hatches and waited for the storm to pass. It became skilled at giving the appearance of change while standing still. But this moment is different, and it calls for a fundamental rethink of Canada’s public sector. A rapid-fire gutting, as Elon Musk’s DOGE team is doing in the U.S., isn’t the answer, but that doesn’t mean things here should stay the way they are.
Canada’s underperforming public service is too big, too costly. It keeps growing in good and bad times at both the federal and provincial levels. Since 2020-21, the size of the federal public service, for example, has grown by 3.7 per cent annually, above the average growth rate of 1 per cent between 2007 and 2020 (the pre-COVID pandemic period). The IMF reports that the public sector in Canada accounts for 42.5 per cent of GDP. In the U.S., the figure is 36.3 per cent – and that was before Mr. Musk was let loose with his chainsaw.
Canadians know that they are not getting value for their money from the public sector, as public opinion surveys show. It’s time to finally deal with activities that have long passed their best-before date and to accept that our public sector managers have lost the ability to manage and, in particular, deal with non-performers. This is costly and saps the morale of many public sector workers who work hard in the public interest. What is often lost in the debate is that public sector managers want to perform at the top level; they don’t want to be handcuffed by overly demanding transparency requirements and the work of public sector unions.
These unions have a lot to answer for. The fact that 77 per cent of public sector workers in Canada belong to a union, compared to 15.5 per cent in the private sector, speaks to the problem. Their purpose is to promote the interest of their members, because that is what they are paid to do. They only need to push against political will, which is at times shaky, while private sector unions must push against unbending markets forces that are certain to become more difficult in the Trump era.
An election campaign provides the opportunity for a debate on the role of government and public sector unions, and to ask if the federal government still requires nearly 300 organizations. Canadians should also ask if the federal government has encroached too far in areas of provincial responsibilities because it has the spending power to do so. Time would be better spent debating these issues rather than reacting to every social media message or change of mind that comes out of the White House.