The Role of Central Agencies Government of Canada Gouvernement du Canada Privy Council Office Bureau du Conseil privé The Role of Central Agencies Presentation to the Financial Management Institute June 11, 2015 National Arts Centre, Panorama Room Heather Sheehy, Director of Operations, Machinery of Government, Privy Council Office

Presentation Roadmap The Westminster System of Government Role of Central Agencies Privy Council Office Department of Finance and Treasury Board Secretariat Parting thoughts Discussion

The Westminster System: Key Elements The Prime Minister is the first Minister and the architect of government, including defining Ministers’ roles and the Cabinet decision-making system Ministers are collectively and individually responsible to Parliament Deputy Ministers are the Minister’s principal source of support in fulfilling his or her responsibilities and in respecting his or her accountability to Parliament Public servants provide non-partisan policy advice to Ministers and conduct departmental operations through the exercise of the Minister’s legal authorities Exempt staff provide the Minister with advice that is politically engaged, but play no role in departmental operations and do not exercise any of the Minister’s powers, duties and functions

Central Agencies In the exercise of their authority, the Prime Minister and the Cabinet are supported by both line departments and central agencies Central agencies play a key role in the successful formulation and implementation of governmental policies and programs by overseeing interdepartmental mechanisms of information-sharing, consultation and coordination Typically, people refer to three central agencies: the Privy Council Office (PCO), the Department of Finance and the Treasury Board Secretariat (TBS)

Why is coordination necessary?

Government is complicated

Government is complicated It’s crowded with ideas There are a lot of decision makers to manage The speed of decision making is accelerating 24/7 communications Savvy stakeholders and citizens with high expectations A complex and immediate digital environment Speed Ascendance of issues management Centralization of Decision-Making Perpetual campaign mode Pressures Impact

Roles at a glance Finance TBS PCO Supports PM, Ministers in PM’s portfolio, and Cabinet Coordinates government priorities and policy agenda Supports cabinet-decision-making system: ensures that departmental submissions meet information needs of Cabinet and are coordinated with other departments and overall policy agenda Responsible for overall intergovernmental relations Advises the PM on the machinery of government Supports Governor in Council Appointments Finance Supports the Minister of Finance Develops government’s macro- economic policy and fiscal framework Analyzes the economic and fiscal impacts of policy initiatives Allocation of funds from fiscal framework for new initiatives Prepares annual Budget Government-wide financial reporting TBS Supports Treasury Board and its President Responsible for the estimates and expenditure management system Reviews submissions from Ministers for funding Reviews existing programs Provides financial and performance information to Parliament Manages government-wide financial, administrative and HR policies Employer for core public service Supports the consideration of regulations

Clerk of the Privy Council and Secretary to the Cabinet Prime Minister Clerk of the Privy Council and Secretary to the Cabinet Maintains unity in Cabinet and provides direction to Ministers Has unique powers: appointment and mandate of Ministers appointment of senior officials management of Cabinet leadership on the direction of policy / finance Supported by the Prime Minister’s Office: Comprised of exempt staff Political strategy and tactics Political dimensions of policy initiatives, problems, etc. PM’s agenda and travel Communications / national political liaison As Deputy to the Prime Minister provides advice and staff support As Secretary to the Cabinet supports all Ministers collectively and individually Head of the Public Service Comprised of public servants (est. 835 FTEs in 15/16) Coordinates, not duplicates, work of departments Small, flat organization to facilitate information sharing and fast decisions Moves people in and out Supported by the Privy Council: “The Prime Minister’s Office is partisan, politically oriented, yet operationally sensitive. The Privy Council Office is non-partisan, operationally-oriented, yet politically sensitive.” Gordon Robertson, Clerk of the Privy Council and Secretary to the Cabinet, 1971.

PCO: Prime Minister’s Department Supports the Prime Minister as Head of Government Priority setting (e.g., assists with the writing of the Speech from the Throne; developing the federal Budget) Policy development (e.g., foreign affairs, defence, national security and intergovernmental affairs, as well as other priorities) Coordination of ministerial mandates Government organization National security Senior appointments Supports other ministers within the PM’s portfolio (e.g., the Leader of the Government in the House and the Minister of Intergovernmental Affairs)

PCO: Cabinet Secretariat Manages the flow of business to ensure that the decision-making process functions according to the standards set by the Prime Minister Keeps track of departmental initiatives Ensures proper consultation Plays a challenge function to ensure that MCs are consistent with the government’s overall policy direction Specifically, with respect to Cabinet and Cabinet committee meetings, PCO provides for: Agendas Briefings to Chairs Committee minutes Cabinet decisions Priorities and Planning Government Administration Treasury Board (statutory) Operations Foreign Affairs and Security Economic Prosperity Social Affairs Machinery of Government

PCO: Machinery of Government Protects the Prime Minister’s prerogative for the machinery of government Provides advice and support to the Prime Minister, Clerk, PCO Secretariats and departments on: How government decisions are made. For example: the design of collective Cabinet decision-making process What organizational support is needed for Ministers to discharge their mandates. For example, decisions about: the design of organizations, including their structure, mandate, powers, duties and functions, and place within ministerial portfolios; and whether existing organizations can be used to implement a policy decision or whether changes are required to that organization or a new organization is necessary Who is responsible for implementing decisions. For example: determining which minister should do what; and the types of mandates, powers, duties and functions they need to implement government decisions

PCO: Supporting the Clerk’s role as head of the Public Service Provides strategic policy advice and analysis to the Clerk on whole-of- government initiatives for improving government efficiency and effectiveness, and for maintaining a strong, dynamic and relevant Public Service. Provides advice and support to the Deputy Minister Board of Management and Public Service Renewal and supports the Prime Minister’s Advisory Committee on the Public Service. Examples: Clerk’s Annual Report to the Prime Minister The public service management agenda (e.g., Blueprint 2020)

Department of Finance One of the original departments of the Government of Canada. Established by statute under the Financial Administration Act and has authorities under numerous other Acts Supports the Minister in the management of the Consolidated Revenue Fund Supports the Minister of Finance in development the government’s macro- economic policy, including tax policy and tax expenditures, as well as the overall fiscal framework, and for analyzing the economic and fiscal impact of proposals by any Minister. Develops the annual budget. The budget is the government’s fiscal plan. It outlines projected revenues, changes in taxation and new spending plans. Manages federal borrowing on financial markets Administers major transfers of federal funds to the provinces and territories Develops regulatory policy for the country’s financial sector

Treasury Board A committee of Cabinet established by Financial Administration Act and composed of the President of the Treasury Board, the Minister of Finance and four other ministers appointed by the Prime Minister In contrast to the Department of Finance which is responsible for establishing general policy on government revenues and expenditures, the Treasury Board oversees the management of the government’s expenditures and has responsibilities for government administration, as outlined in the Financial Administration Act and other Acts

Treasury Board Secretariat Assists the Treasury Board in fulfilling its duties Is headed by the Secretary of the Treasury Board, who is the equivalent of a deputy minister Sets administrative policies and monitors management performance Oversees expenditure management and performance information (e.g., Reports on Plans and Priorities and Departmental Performance Reports) Acts as the principal employer of the public service Superannuation – pension Labour relations Collective bargaining The Secretariat also includes the Office of the Comptroller General of Canada, which is responsible for providing government-wide direction and assistance on financial management and internal audit

Some Parting Thoughts… The central agencies play a key role in decision-making processes and administration They work to ensure policy coordination, good administrative practices, and prudent fiscal management Their influence and authority is often due to their proximity to the Prime Minister and Cabinet or control over the purse strings rather than the statutory authority Must balance a centralization of control and authority with sufficient flexibility and autonomy to allow line departments to effectively manage issues