Ralph Heintzman is a senior fellow of Massey College in the University of Toronto. In the Government of Canada, he held numerous senior executive positions, including head of the Office of Public Service Values and Ethics. He is a recipient of the Vanier Medal, Canada’s highest honour in public administration.

The Auditor-General of Canada and the Clerk of the Privy Council disagree. The Auditor-General, Michael Ferguson, says the Phoenix pay fiasco points to a serious cultural problem in the federal public service. The Clerk, Michael Wernick, the public service’s head, says this is just a sweeping generalization, unsupported by evidence.

And both are right.

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Mr. Wernick is right to argue that the federal public service is not a broken organization. In fact, though far from perfect (as Mr. Wernick admits), it is, in many ways, an outstanding one. In recent international rankings, it has been assessed as one of the best public services in the world – if not the best.

But Mr. Ferguson is equally right to say that the Phoenix pay fiasco points to a serious problem. The Auditor-General says, correctly, that the Phoenix mess is further evidence of an “obedient” public service whose “ability to convey hard truths has eroded, as has the willingness of senior levels – including ministers – to hear hard truths. This culture causes the incomprehensible failures it is trying to avoid.”

In other words, the public service of Canada has a problem of truth-telling – or, as we say in the public sector, speaking truth to power. But it is not alone. In fact, every large, hierarchical organization, in the public or private sector, has the same problem of truth-telling. For obvious reasons.

Managers are only human. And so they have an inevitable tendency to surround themselves with people who agree with them, support their ideas and directions and tell them what they want to hear. Anyone who has ever been a manager or a leader will recognize this temptation.

Employees are also human. They want to succeed, to be rewarded and promoted. And they know their boss controls these rewards. So, inevitably, they seek to enjoy their superior’s favour. Which often means telling them what they want to hear, rather than what the employee really thinks. Anyone who has been an employee in a large organization knows how often they have succumbed to this temptation.

These are facts of life in every large organization, public or private. But they are even more powerful in public bureaucracies because of their democratic mission. Their primary role is to serve elected officials at the top of the organizational pyramid. So the tendency to “manage up” is even more pronounced in the public sector than in the private sector, where it is balanced by the need to “manage down” toward employees, clients and customers, on whom the survival of the organization – its bottom line – ultimately depend.

Because of these facts of life, well-performing organizations introduce practices to mitigate them, and ensure that organizational truths – on which performance and success ultimately depend – can nevertheless be told. One of the reasons for the popularity of “organizational learning” theories and methodologies over the past few decades has been the obvious need to cultivate truth in organizations. The same thing can be said of upward feedback, employee climate surveys and so on.

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The problem is not just that the federal public service has done less than it could in this area. It is that, for more than two decades, it has often denied there is a problem at all. And has sometimes instituted or protected practices that make it worse.

When the Clerk of the Privy Council says the Auditor-General’s diagnosis isn’t supported by the evidence, he’s overlooking a lot. More than 20 years ago, the Tait Report already warned about a widespread perception that “the climate of support for honest discussion and dialogue within the public service has deteriorated.” Ten years later, Peter Larson and David Zussman reported on a climate of “fear” in the federal public service, driven by the career ambitions of public servants, a climate of self-censorship at odds (they said) with “one of the core values of the ‘independent, politically neutral public service’ … its deemed ability to give fearless advice – sometimes called ‘speaking truth to power.’”

Since then, others have reported on this same climate of fear and self-censorship. Public-administration scholar Donald Savoie, for example, has repeatedly described the centralization of power in the federal government which has produced what he calls “court government,” a culture in which officials often conduct themselves as “courtiers” seeking preferment rather than as truth-tellers. As recently as last year, a study of the Phoenix initiative by management consultants Goss Gilroy Inc. already concluded that its failings were partly rooted in a public-service culture that “does not reward speaking truth to power.”

Perhaps the most overlooked analysis of the core problems of the federal public service – and some core solutions – is the Gomery Report. The problem, Justice John Gomery said, starts at the top, and in the relationships of deputy ministers (DMs) both with their ministers and with the Clerk. To fix the tone at the top, he made two key recommendations. The first is to give deputies both the obligation and the tools to draw a line, when needed, between public service and political accountability, by adopting the British convention of the accounting officer. The second is to establish a new process for the appointment of DMs, in order to strengthen their independence and their ability to speak truth to power – both to ministers and to the Clerk.

Justice Gomery’s diagnosis and his two key proposals were (almost) exactly right. But they were rejected out of hand by the senior public service and its external supporters, on the mistaken grounds that the first would create conflict between DMs and ministers (the opposite of the British experience) and that the second contradicts the public service’s need for centralized command and hence for the equivalent of a private-sector CEO, who can select their own “subordinates.”

However, the organizing principle in the public sector is not centralized command but rather the diffusion of power, for at least two good reasons.

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The first reason is that there is no simple bottom line, as in the private sector. Public goods are inherently contestable. To discern the public interest, you can and must argue, frankly and vigorously, not just about the goals but about how to get there. A self-censoring public service, unable to speak truth even to itself, cannot provide good advice to ministers, or even to its own superiors, nor implement decisions effectively. When candour about professional judgment is “discouraged or inhibited,” as the Tait Report said, good government suffers.

The second reason is trust. The criterion of success for a public service is trust: the trust of all the actors in the political process (not just the current ministry), the trust of its own employees and the trust of all the citizens of Canada, regardless of political persuasion. The public service holds a public trust – it is a trustee of good, honest and impartial public administration – and it has constantly to earn that trust. A public service where honest expression of professional judgment is inhibited cannot earn – or deserve – the trust of its various stakeholders. That is why many things which, in the private sector, are under the centralized control of a CEO – such as staffing, for example – are often put beyond political or central control in the public sector.

It is a commonplace that one of the most powerful forces shaping the culture of any organization is the tone at the top. The behaviour of top leaders radiates down through the whole organization. So, if the federal public service wishes to make progress in addressing the cultural problem diagnosed by the Auditor-General (among others), it needs to start at the top. To reform the culture at the top, it should return to the two key recommendations of the Gomery Commission, but rethink them.

Taking advantage of internal and external opposition, the Harper ministry’s commitment to implement Justice Gomery’s recommendation about the accounting officer was gutted in the Federal Accountability Act (FedAA). This part of the FedAA is a fraud. It adopted the “accounting officer” name but none of its British content. Despite being given the title, federal DMs still have neither the obligation nor the tools to draw a line, where needed, between political and public-service accountability. This must be corrected.

But even if DMs are more clearly obligated and better equipped, they will not use their tools freely unless they enjoy greater independence and security. This is where a revised version of Justice Gomery’s recommendation for a new appointment process comes in. Although he correctly diagnosed the problem, his proposed solution retained a role for the Clerk in the appointment process, thus perpetuating the hierarchical relationship – of boss to employees – between DMs and the Clerk, with all its inevitable disincentives for truth-telling. A proper solution would take the secretary to cabinet right out of the equation, and give responsibility for recommendations on DM appointments to an arm’s-length body, as in New Zealand. The logical Canadian approach would be to give this function to a strengthened and reinvigorated Public Service Commission.

When Mr. Wernick was appointed Clerk in January, 2016, Prime Minister Justin Trudeau mandated him to develop “advice on a process to fill the position on a permanent basis.” As far as I know, he has not yet fulfilled this mandate. When he does, he should broaden his advice to include the appointment process for all deputy ministers, not just the Clerk. He should recommend a new, arm’s-length process in which the Clerk is no longer responsible for recommendations on DM appointments – and thus remove a key obstacle to truth-telling at the top of the public service. Together with fundamental reform of the obligations and tools of DMs as accounting officers, a new appointment process will help reshape a public-service culture the Auditor-General is not alone in diagnosing.

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The public service of Canada is a great national institution, part of the essential framework of our parliamentary democracy. Enhancing and protecting its capacity for truth-telling should be a high priority.