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Business Commentary The dark warning Canada’s Auditor-General left behind when he died

Auditor-General Michael Ferguson’s spring 2018 report was the usual government-gone-wrong show, including a payroll system that doesn’t pay workers much of the time and agencies that can’t deliver basic health services to First Nations.

But what resonates nearly a year later is the uncharacteristically bleak message he delivered alongside the audit. Mr. Ferguson concluded that Ottawa was condemned to repeat such “incomprehensible failures” because the business of government was badly broken. More than 40 times he used the words “fail,” “failure,” or “failed” to describe the work of government.

For the New Brunswick-born accountant, who died of cancer this month at the age of 60, the 2018 dressing-down was the accumulation of eight years of frustration as auditor-general, plus decades of ignored warnings from his predecessors.

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Perhaps Mr. Ferguson knew his time was running out. He clearly wanted MPs, bureaucrats and all Canadians to know what he had learned.

“We always get the department agreeing to our recommendations, but then somehow we come back five years later, 10 years later and we find the same problems,” he lamented in a 2018 CBC interview. “It almost is like the departments are trying to make our recommendations and our reports go away by saying they agree with our recommendations.”

Elected officials and bureaucrats keep repeating the same mistakes. Audits identify problems. Officials promise swift corrective action, but nothing really changes. Rinse. Repeat.

Mr. Ferguson believed he had identified the crux of the problem: a “broken government culture.” Obedient public servants fear mistakes and risk. They are completely unwilling to deliver bad news to their elected masters. And ministers don’t want to hear it anyway. It’s like an echo chamber.

The irony is that there are a lot more top bureaucrats than ever in Ottawa, doing less of what they are supposed to do – provide good advice and strong counterweight to politicians. The number of deputy ministers in the federal government has mushroomed in the past decade, with some departments now having as many as six deputy-level officials. That’s like one company with multiple CEOs.

Facing off against these often spineless bureaucrats are ministers and their staff, who exert more power than ever. Mr. Ferguson said ministers don’t want to hear “hard truths” because they are focused on their political agenda, quick results, image management and the next election.

The combination is toxic – for the government, and more importantly, for taxpayers. Getting things wrong inflates the cost of government and, inevitably, the revenues it needs to pay for all of its programs.

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The stakes are high. Ottawa spent $310.7-billion in the 2017-18 fiscal year, plus another $22-billion in interest on the debt. It raised $313.6-billion in taxes from Canadians to pay for that – not enough.

The disastrous rollout of the government’s Phoenix pay system three years ago is a microcosm of how broken government can lead to costly failures. The system took seven years to build, cost $310-million and it still doesn’t work properly. Instead of saving Ottawa money, as the former Conservative government promised it would, it will take at least $1.2-billion just to get it working properly. Warnings of looming problems were buried or ignored. Ottawa is already looking at replacing Phoenix with an entirely new system that could be phased in starting as early as the end of this year.

Replicate that cycle over the multi-billion-dollar inventory of major technology, infrastructure and defence projects under way across the federal government, and you get some idea of the potential financial risk involved.

Mr. Ferguson’s stark warning about government failure won’t make it easy to find the next auditor-general, appointed for a non-renewable 10-year term. Who would want a job preaching the virtues of sound management practices to people who aren’t listening?

Of the many tributes on Parliament Hill this week for the respected Mr. Ferguson, not one promised to implement his audit recommendations.

Prime Minister Justin Trudeau, for example, praised Mr. Ferguson for “improving our democracy and protecting the integrity of our public institutions.”

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Fine. But if Mr. Trudeau really wanted to honour Mr. Ferguson’s legacy, he would have pledged to repair the dysfunctional relationship between bureaucrats and elected officials.

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