Beyond Bureaucracy: Governing for the Nineties

Head Table Guests

John A. Campion, Partner, Fasken Campbell Godfrey and 1st Vice-President, The Empire Club of Canada; Howard Cohen, President, Design Exchange; Derek Brown, Vice-President and Director, RBC Dominion Securities; Paul Hellyer; Harry T. Seymour, President and CEO, Pathfinder Learning Systems Corporation and a Past President, The Empire Club of Canada; Lyn McLeod, Leader of the Liberal Party of Ontario; Mary Byers, Co-author of the forthcoming book, Atlantic Hearth, Early Homes and Families in Nova Scotia, to be published in 1994 and a Director, The Empire Club of Canada; Robert Kelly, Executive Vice-President, Finance, Toronto Dominion Bank; Rev. Dr. Arthur P. Lee, Minister, Agincourt Baptist Church; Tony Fell, Chairman and CEO, RBC Dominion Securities.

Introduction by Dr. Jackman

Premier John Savage is in one special way an historical artifact. All of Canada's other premiers were and are native-born Canadians. Only Premier Savage is not. He was born in Wales of an Irish physician father and Welsh nurse mother. He came to Canada in his mid-thirties, worked as a physician, became fascinated with the social problems of Nova Scotia and succumbed into the world of partisan politics. That he is Canada's only non-native born premier gives evidence, on the one hand, to what a wonderful land of opportunity Canada really is or, on the other hand, how desperately Canada needs immigrants.

Married to Margaret, they have lived in Dartmouth 26 years (since 1967). They have seven children, the last of which, Brigit, was born in Canada.

The Premier, as a young boy, was educated at a boarding school run by Irish Christian Brothers. He later attended Queen's Medical School in Belfast. As an all-around boy he was elected president of the Student Council and he also received his "rugby blue."

After medical school he served three years in military service on a troop ship serving the Near and Far East. Following that he established a family medical practice in a small Welsh town outside Newport.

Now he moved to Canada in the mid-sixties about the time of Expo in Montreal, as you remember, when the 50s, 60s and 70s were great boom times in Canada and they weren't the 80s and 90s as we know it now. Canada was a land of opportunity, great promise and optimism. It was to this country that Dr. Savage came. Joining the Dartmouth Medical Centre, he was on the faculty of the Dalhousie Medical School and a trainer in the family practice residency programme.

Since that time, he has contributed to Dartmouth as a physician, a leader in many community initiatives, as Chairman of the Dartmouth School Board and as Mayor. He helped start day-care centres in communities where they were needed and established drug-addiction programmes. For his work in setting up the first detox centres he became known as the "hippie doctor."

Dr. Savage first became mayor in 1985. He was re-elected twice before resigning to become leader of the Liberal Party.

In 1989, the Winnipeg Free Press (July 29/89) stated, Dartmouth Mayor is Nova Scotia Liberals' dream candidate--MacKay.

As Mayor of Dartmouth, Dr. Savage pioneered the concept of a "healthy community." He established many firsts in Dartmouth, including an annual celebration of multiculturalism and the first ever municipal book awards. Two years ago he was instrumental in getting Peter Gzowski, from Toronto, to hold his first Golf Tournament for Literacy in Nova Scotia.

On June 20, 1992, he was elected leader of the Nova Scotia Liberal Party.

One year later on May 25, 1993 Dr. Savage was elected premier of Nova Scotia. His party took 40 of 52 seats and ended 15 years of Progressive Conservative government.

His achievement was greeted by headlines and bylines across Canada:

Halifax Chronicle Herald--May 20, '93; John Savage: former hippie doctor campaigns with caution.

Calgary Herald--May 27,'93; "Welsh windbag" buckles in. Vancouver Sun--May 27, '93; A "come from away" rises above Savage epithets to premiership.

Financial Post Daily--May 26, '93; Liberals sweep Nova Scotia election.

In office only six months, initiatives are beginning to come forth. We are interested Mr. Premier, in what your plan is for your province. We are interested in knowing you better as Canada's newest premier. So please welcome Dr. Savage who will speak to us about Beyond Bureaucracy: Governing for the Nineties.

John Savage

Thank you, Mr. Chairman and I want to thank The Empire Club for the kind invitation to be here today.

I am delighted that Lyn Macleod is here today also. Lyn travelled to my home town, Dartmouth, Nova Scotia, almost a year ago now. She was the keynote speaker at the convention which nominated me as the Liberal candidate for my riding. I felt very honoured that she agreed to join us.

This is my second trip to Toronto since our government was elected in May. I always enjoy visiting this city. Not only is it a cosmopolitan and multicultural city, the entire Canadian landscape is reflected on the streets of this town. Toronto is home to immigrants from every region of Canada, including my own region, the Maritimes.

Maritimers call it "goin' down the road." There are many ex patriot Nova Scotians here. Most of them left our part of the country because it could not offer the same opportunity as Toronto or Calgary or Vancouver. They are economic refugees. Like all economic refugees, they were driven here by a dream. A dream of a better future. A dream of finding a job at the end of the unemployment line. In 1980, those dreams usually played out into "real life." In 1990, they are almost as illusive in downtown Toronto as they are on the streets of Sydney, or the coastal towns of Nova Scotia's eastern shore.

We are all facing the same collision with reality, the same challenge to rethink what it is we do, why we do it, and how we do it--as we enter the world of the 21st century. Governments are challenged to develop new ways of doing things, not just because of the demands of fiscal restraint. We must develop new ways to do things because the old models are rigid, inefficient, and ill-suited to a world defined by dynamism and change.

Ladies and gentlemen, the economic downturn of the past couple of years has been called a "recession." But, of course, it's more than a recession. Our economy has gone through radical and fundamental changes. In Nova Scotia, many of our traditional resource industries are in a state of virtual collapse. Changing market conditions have been compounded by ecological pressures, such as the collapse of the fishery. Seventy thousand Nova Scotians are not just "unemployed." Many of them face the possibility that their old jobs will never return, because those jobs simply do not exist any more.

Some analysts are already comparing today's electronic revolution with the industrial revolution that transformed the world in the final decades of the 19th century. We are challenged not just to adapt to changing technology. We are challenged to look beyond the status quo, and to seek the new paradigms that will redefine our current "problems" as new opportunities and new ways of doing things.

It is a difficult challenge--but not an impossible challenge. Things are tough right now in Nova Scotia, but there are many new opportunities in the picture. Think, for example, about that "highway of dreams" I referred to earlier--a lifeline that has traditionally connected small communities in Nova Scotia with job markets in Toronto. Generations of Maritimers and Newfoundlanders have "gone down the road," leaving behind communities robbed of hope, robbed of their best and brightest. Today that highway no longer stands as a physical obstacle between my home town and yours. The paved highway is rapidly becoming obsolete. It's been replaced by an electronic highway. Nova Scotians are realizing that they are no longer at a disadvantage because of where they live. As a matter of fact, we are beginning to think of our geographic location as one of our best assets--and if you have been to Nova Scotia you will know exactly what I mean.

I suspect you have begun to think about Nova Scotia and its potential in a new way as well, or you would not have asked me to be here today. As the Premier of a new government, my challenge is quite clear. Adapting to the status quo is not an option. Government reform and restructuring is the central theme in my leadership. It is no longer a matter of choice. At a time when governments would like to spend more, to boost the economy and to relieve some of the pain created by economic turmoil, the cupboard is bare.

We must create the conditions which will spawn the growth of a new economy and create jobs. But we must do it without capital resources. We must protect health care and social services. But we must protect them by pruning them back. We must reposition ourselves for the revolution of the 21st century. But we must do it on a shoestring. We must bring our finances under control. But we will probably have to lay people off in order to do it. We must govern better by governing differently, and governing less. These seeming paradoxes are the daily bread of politics in the 90s.

In May, Nova Scotians voted overwhelmingly for change, and our government was elected with a large majority. Nova Scotia Liberals came to office, after 15 years in opposition, with ambitious social and economic plans and a determination to change the style and substance of government in our province. We began work on that agenda, right on day one. We do not believe we can afford to wait until our second or third year in office to make the tough decisions.

Our priorities are economic development and job creation, together with government restructuring and reform, and a four-year strategy for re-establishing fiscal control. It is a three-pronged goal, but it is really a single goal, because it will take all three working together to build a better future for Nova Scotians, and a better climate for business. We believe that providing Nova Scotians with better service from government, at a cost they can afford, is not just a step towards fiscal control. It is an important step towards creating a more dynamic environment that will help give our province a competitive edge.

Our first order of business, by necessity, has been some major housekeeping. The previous "tenants" left us with some rather nasty financial surprises. We found a government three months into its budget year, with no budget and no control on spending. In some departments, the entire annual budget was spent, and more, in the first three months of the budget year. We found a government that was not just in disarray. It was a government mired in cynicism. A government that kept borrowing money, rather than making tough decisions. Our province, less than one million people, carries a net debt approaching $8 billion. Our current operating deficit is $400 million. Twenty-one cents of every dollar in revenue must be spent to service the debt. Clearly, this pattern cannot continue.

This fall we passed legislation committing the government to a four-year programme of spending cuts. Next year and the year after we will cut operating expenditures by three per cent annually. In each of the following years we will reduce expenditures by an additional two per cent. We chose this course because government cannot legislate balanced budgets. It can only control expenditures, while making every effort to shore up its revenues. Our objective is nothing short of a major turnaround: to produce an operating surplus by fiscal 1997-98. The New York credit rating agencies wondered if our fiscal programme was too ambitious. We think it is realistic and achievable.

But to achieve our cost-cutting goals, programmes will be eliminated. There is no other way. In the weeks and months ahead, we face tough decisions.

We must maintain and improve delivery of those services Nova Scotians, indeed all Canadians, value most. Necessity demands that we eliminate, or fundamentally alter, the remainder. In Nova Scotia, an uncompromising review of every aspect of government is well advanced.

We have initiated management audits in seven major departments. They are being conducted by outside consultants with no vested interests. Only two have been completed so far, but already, the process is uncovering a maze of inefficiency, needless red tape, isolated bureaucratic empires, high stress, low morale, dismal productivity--in short, broken government, and an inefficient, rule-driven bureaucracy that is completely ill-adapted to respond to the demands of a world in transition.

The solutions include cutting out layers of bureaucracy; wholesale elimination of departments, agencies and divisions; decentralized decision-making; new management ideas and radically altered attitudes. It won't be easy.

Establishing working structures and systems to replace stifling bureaucratic controls is only half the equation--the easy half. Changing attitudes, altering the very culture of the public sector will be more difficult. The days of guaranteed job security, regardless of performance are gone. Productivity, creativity and flexibility will be requirements for success in the public sector, just as they are in private business. We will be hiring more senior managers on term contracts; bringing people in from the private sector to do a specific job. This would allow constant renewal, new ideas, new styles, a more vibrant workplace. Changes of this magnitude are frightening, there is no question. But they are also a source of new hope.

Our reform of Pharmacare--the provincial drug plan for seniors--is a good example of the benefits that can be achieved through healthy and constructive government reform. The government attacked inefficiencies in the delivery of seniors' Pharmacare and enacted reforms that will save that vital programme from oblivion. We did not increase costs to seniors. We maintained the programme not by spending more but by spending smarter. We saved between ten and twenty million dollars, by addressing the problem of over-medication that has been undermining the health of seniors for years. That same approach will be applied right across the health system.

Another area where fundamental, substantive change is well under way is in our economic development efforts. Our government has rejected the traditional, failed models of economic development. Taxpayers can't afford any more hand-outs to industry. That economic development model was a dismal failure at any rate. As often as not the subsidized industry, and the jobs it brought, disappeared as soon as the free money ran out. Our new economic focus is a community-based model. It is built on the philosophy that people know what will and what will not work in their home communities. It rests on the idea that public investment dollars are safest when entrusted to people with a stake in the success of the enterprise and a stake in the community.

Grants are out. Loans are in. The government's role is to provide customer service, technical expertise, to ensure there is an adequately trained work force and to provide infrastructure.

A lot can also be achieved by governments working together. In the past few months, Maritime and Atlantic co-operation has taken on an important new dimension. With the co-operation of Premiers McKenna, Wells and Callbeck, the Atlantic provinces have worked out joint agreements that will positively affect the delivery of health care, education, as well as joint purchasing. These successes have involved some individual sacrifices. But parochial interests have been set aside because there is good faith and agreement between the parties. Agreement that as leaders, our job is to accept the changes that will bring about better government, at a cost taxpayers can afford.

In our relationship to the Federal Government, what we seek is not hand-outs, but partnership in our economic development plan. Ottawa has a role to play in infrastructure development by helping to ensure workers are properly trained for the jobs that will exist. A long-term economic goal of federal and provincial governments must be the elimination of the wide economic disparities across Canada. Ultimately that will spell an end to equalization payments. But that day is a long way off.

Meanwhile, the private sector is not waiting for the politicians to negotiate equalization. The private sector is creating a level playing field of its own, by going head to head with the competition in the global marketplace. Nova Scotians are determined to cast aside the "poor cousin" mentality that has pervaded the Maritimes, because they know the traditional geographic barriers to doing business in our region have now lifted. They have been replaced by an electronic marketplace in which Nova Scotia is well-positioned for success.

• We have a unique coastal location, easily accessible by air and sea to North, South and Central America, and to Europe.
• We have a highly-trained work force, and one of the finest university and training infrastructures in Canada.
• We have medical and medical research facilities which are now being recognized as major drawing cards by the pharmaceutical industry.
• We have a small but exceptional information sector, already leading the way in key areas of expertise and innovation, such as telephone voting and its many applications.
• We have an enviable lifestyle and a pristine and beautiful environment. This may be Canada's best kept secret.

Ladies and gentlemen, I mentioned earlier that our government came to office with an ambitious agenda. In Nova Scotia many have said our agenda was too ambitious, and led to rookie mistakes during our first legislative session. Yes, we made mistakes. But we have managed to move forward on many fronts.

In the legislative session just ended--our first--we introduced 48 pieces of new legislation. That is just the ground work. The reforms I have talked about really will not begin to shape until the new year. We anticipate another busy legislative session in the spring.

There are critical times in the history of Nova Scotia. This is one of those times. What we do, or do not do, right now, will determine whether or not our province survives. I believe that we will rise to the challenge.

The tough decisions made by government today will mean a better Nova Scotia tomorrow. The hard choices made today will mean a healthy economy and employment for our people. We will be bold. We will be courageous. And we will be prepared to do what is difficult--because if we combine that with the resources and possibilities inherent in our province and in our people, we cannot fail.

Thank you very much.