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Kathryn May
Hi there. It’s 2023 and return-to-office is here. For real this time and by decree. Treasury Board’s “hybrid-by-design” model begins rollout this week. The new normal for office workers: two to three days in the office after nearly three years of working remotely. Lots of turmoil and bad feelings. It has created new drama in collective bargaining that we’ll deep dive into.
Also, lots of talk about global consultants McKinsey and Company. What about all the other big consultants?

Here we go. 

* "Bad faith" complaints: A PSAC salvo and Treasury Board’s unusual counter.
* PSAC and its 15 groups: Positioning for strike.
* McKinsey and Company: And on the consultancy cycle goes. 
* “Government must code”: What ArriveCAN has shown us.
* Retirements: Four deputy ministers are retiring.
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Source: Reddit.

The emboldening of unions

The return-to-office order is putting wind in the sails of unions. To build momentum for strike votes of 165,000 workers, the Public Service Alliance of Canada (PSAC) is tapping into the fury of many public servants over going back to the office. The stage is set for lots of labour unrest.

Source: Twitter.
PSAC has been sabre-rattling about a general strike for months. It walked away from contract talks last spring over wages. The two big issues: wage increases to cover soaring inflation and remote work. 
First salvo. Unions cried foul over the return-to-office order for not being consulted and demanded evidence for the decision. PSAC quickly filed a bad-faith bargaining complaint against the government with the federal labour board. It claims the order breaches the statutory contract freeze that ensures all working conditions remain unchanged during bargaining. Remote work was the way work was done, and mandatory hybrid changes that.  
Treasury Board shoots back. The latest and unusual twist in this stalemate came when Treasury Board and the Canada Revenue Agency countered with “bad faith” bargaining complaints against PSAC. That was unusual enough. Then, Treasury Board, which rarely talks publicly about bargaining, went all-out with a statement this week on how PSAC is bargaining in bad faith, not following the process, seems hell-bent on striking and being disingenuous about how big a wage increase it has asked for. 
PSAC wants a 13.5 per-cent increase over three years; Treasury Board argues the union has 500 demands that would cost 14 per cent a year for each of those three years. It’s offering 8.5 per cent over four years. Oh, and the 35,000 tax workers at Canada Revenue Agency, also represented by PSAC, want a 30 per cent raise over three years.
Down in the weeds on what’s happening. PSAC is the largest union in the federal public sector, with four large bargaining groups or tables representing about 120,000 federal workers. Each group has its own issues, but raises to covering soaring inflation and remote work are the common issues for everyone.
PSAC has 15 component unions. The largest is the Union of Taxation Employees, which represents more than 35,000 workers at the Canada Revenue Agency. For a national strike, PSAC has to get each of its groups in a legal strike position at the same time. That takes some positioning.
All PSAC groups are at impasse with Treasury Board. Public Interest Commissions (PICs) have been appointed for each group to find middle ground and help reach a deal. Treasury Board and PSAC made representations over a series of hearings and are awaiting the non-binding recommendations from the various commissions.
What has rankled Treasury Board is that PSAC has plans to call strike votes for all its groups, starting with Canada Revenue Agency workers, before even seeing the reports from the Public Interest Commission.
Nothing stops PSAC from doing that. But Treasury Board officials argue the move shows PSAC wants to trigger a strike. They say it isn’t taking the process seriously and doesn’t care a whit what the reports say.
Aligning the stars for strike. A PIC – a Public Interest Commission – is the last stop on the road to strike, but certain conditions must be met for each group before PSAC can hit the picket line.  
  1. No strike can be called until seven days after the Public Interest Commission report.
  2. Agreements designating which workers are essential and can’t strike must be in place. (Union and management negotiate for these agreements, and it can be long and acrimonious.)
  3. A majority strike vote must have been held within the previous 60 days. (PSAC estimates a strike vote can take six to eight weeks.)
Past editions of The Functionary are here.
How things stand in getting stars aligned: Canada Revenue Agency will be the first shoe to drop. PSAC is starting strike votes for tax workers from Jan. 31 to April 7 – shortly before the April 30 tax filing deadline. The Public Interest Commission report is expected in April. There is no essential-services agreement in place.  
The juggernaut. PSAC’s program and administrative services group is the biggest bargaining group in government, with nearly 100,000 employees. These workers are the backbone of service delivery, including jobs in program management, communications, clerical, information services, data processing. Its PIC report is due in February. No essential services agreement is in place.
Operational group. Has about 10,500 workers, including those running federal buildings, firefighters, trades workers, cooks and hospital workers, lightkeepers and ships’ crews. Its PIC report is expected in late March. No essential services agreement is in place.
Technical services. Has 10,532 employees who work in everything from drafting and Illustration, engineering and scientific support, general technical work and inspection, from food to equipment. Its PIC report is expected this month, and as with the other groups, no essential services agreement is in place.
Education and library devices. This is the smallest group with about 1,140 members. Its PIC report is expected this month, and an essential-services agreement has been signed. This group could be in a legal strike position as early as next month.
The lack of an essential services agreement won’t prevent a strike if PSAC decides to stop haggling and agrees to designations that the government wants.
The system is broken. PSAC isn’t at all perturbed by the Treasury Board’s claims that it is flouting the process. PSAC wanted to bypass the whole PIC process in this round of bargaining and made such an appeal to the labour board, which rejected the request. Actually, PSAC wants the process scrapped. It’s ineffective, a hindrance and delays bargaining. But that’s a legislative battle to be fought once the dust settles after this round of bargaining.
Is it all money and influence?
Federal contracting is getting a lot of attention since a recent Radio-Canada probe into how much is spent on McKinsey and Company, the global management consultancy whose former boss is Dominic Barton, Canada’s former ambassador to China who has long ties with the Trudeau Liberals.
Investigative reporter Justin Ling zeroed in on what it means to outsource the work of government to a private consultancy.
Source: Twitter.
And journalist Paul Wells notes how brutally demoralizing the increased use of external consultancies is to the public service.
Source: Substack.
But it’s not just McKinsey. The government spends a pile on all the big consulting firms, more on some than on McKinsey – which is part of McKinsey’s defense of its federal contracts. Departments have a huge dependency on consultants for everything from IT to policy. Carleton University researchers have been digging into the patterns of contracting – which hit $15 billion in 2021-22 – (using the proactive disclosure database).
Take Deloitte: it had $172 million in contracts in 2021-2022 compared with $17 million paid to McKinsey. Same with KPMG, ($35.5 million), Pricewaterhouse Coopers ($115.6 million) or Ernst Young ($31.4 million). Or contractors like IBM ($515.5 million in 2021-22), which built Phoenix.  GC Strategies, which led the building of the ArriveCAN app, got $31.1 million last year.
Now, influence, especially on policy is a concern. In the National Post, Tristin Hopper talks about McKinsey’s opaque and outsized influence not just in Canada, and in the Globe and Mail, Konrad Yakabuski talks about the strategies McKinsey urges its young recruits to use.
But you have to ask why money spent on consultants and contractors – the biggest chunk for IT – keeps going up especially when departments keep hiring more public servants?  It’s even more worrisome when Carleton professor Amanda Clarke, who led the research, says a big problem is government doesn’t have the inhouse expertise to manage and design projects. It’s the case for IT, but for other areas, too.
It’s a vicious circle. A public service without the right skills – or can’t compete for them – loses politicians’ confidence in bureaucrats to get things done. That leads to more outsourcing and further hollowing out of the public service.
What do you think of the use of consultants? Let us know
Here’s a take from Alistair Croll, a digital expert and co-founder of Canada’s FWD50, an annual global digital conference. He knows IT and used the building of the ArriveCAN app to show MPs outsourcing is about more than money. It raises big questions about the public service’s capacity.
Yes, Canadians should be mad about ArriveCAN, but not the cost, he says. Alarm bells should ring because government is failing in its ability to deliver “reliable and accessible services on time and budget.” This, he argues, is what happens when the work government does is changing dramatically, but government is not.
“The hard truth is that we live in a digital society and deserve a digital government. ArriveCAN is a canary in the digital coal mine, warning us that we are unprepared, unwilling or unable to adapt to that new reality,” says Croll.
But he doesn’t stop there. Go to the 16:44:08 mark in the video below to hear Croll speaking to the standing committee on government operations and estimates.
Source: ParlVU
The UN annually assesses the digital governments of its 193 member nations. In 2010, Canada ranked third; today it sits at 32nd. (See page 66 of the report.)
Source: United Nations
Leading countries brag about their apps and innovations, and new IT grads actually want to work in government. But not here. Canada stumbles along, slow to adapt with old staffing and procurement rules and relies on outsourcing instead.
Too dependent. ArriveCAN drives home the government’s reliance on consultants, including IT staffing firms, colloquially called resume or body shops. GC Strategies, a two-person firm, acted like a headhunter, collecting millions in fees to put together the IT team that did the work to build ArriveCAN.
“The lesson here,” says Croll, “should be government should know how to build apps. We should be in charge of our own future. If you just look at the mark-ups we’re paying by not having a robust public sector that's technology smart, that explains a significant portion of these costs.”
“Government must code.” The lack of inhouse IT capacity in departments to manage, oversee and be accountable for projects is a key problem. 
“I don't want the government to be a hollowed-out shell of policymakers and bureaucrats completely dependent on the private sector for its operation,” says Croll. “We cannot abdicate the reinvention of our society to others. Government must code.”
Croll says there’s lots of room to work with industry on the utility part of computing and technology, such as cloud, broadband and off-the-shelf software, but it needs its own IT experts who know technology. That means big changes in public service compensation, culture, training and replacing those who can’t or won’t adapt.  
What’s at stake? Canada’s future. Canadians are becoming digital creatures, says Croll. We spend eight hours a day online, use apps for everything, sleep next to our iPhones and are always connected with screens in our pockets.
Digital forces government to rethink everything it does, how it serves Canadians and elects its leaders. “Hundreds of years from now, government will be as unrecognizable to us as democracy is to the monarchy.”
Maybe scholar Donald Savoie’s recent call for a royal commission to fix the public service will start to resonate. As Paul Wells writes, the warnings about to change the culture of the public service are a long time coming. 
A few deputy ministers are retiring
A shuffle is in the making to fill top jobs vacancies that are piling up with a wave of recent retirements. Leaving are: Christine Hogan at Environment and Climate Change Canada and François Daigle, deputy minister of justice and deputy attorney-general. Michael Keenan leaves Transport Canada later this month as does Siddika Mithani, president of the Canadian Food Inspection Agency.  
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Kathryn May writes about the federal public service for Policy Options magazine. She is the Accenture Fellow on the Future of the Public Service, providing coverage and analysis of the complex issues facing Canada’s federal public service. She has spent 25 years writing about the public service – the country’s largest workforce – and has also covered parliamentary affairs and politics for the Ottawa Citizen, Postmedia Network Inc. and iPolitics. The winner of a National Newspaper Award, she has also researched and written about public service issues for the federal government and research institutes. Twitter @kathryn_may. 
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