Connect with us
[bsa_pro_ad_space id=12]

Opinion

The repair job at Immigration

Published

17 minute read

PAUL WELLS

The department’s top bureaucrat answers a critical report, with rare candour

Seven months ago Neil Yeates, a retired former deputy minister of immigration, submitted a report on the organization of the department of Immigration, Refugees and Citizenship Canada to the current deputy minister, Christiane Fox.

Yeates’s 28-page report was blunt, plainspoken, critical but constructive. It said “the current organizational model at IRCC is broken.” At a time of global upheaval and dizzying growth in immigration levels, the department that decides who gets into Canada was no longer “fit for purpose,” he wrote. It was time for “major change.” When? “[T]he advice is to proceed now.”

On Thursday, a copy of Yeates’s report landed in my email inbox.

On Thursday night, Christiane Fox told me she is implementing many of Yeates’s recommendations, and described for me her plans for the department with a level of detail and candour I almost never see in today’s Ottawa.


I’m keeping the paywall off this story because I want it to be widely read. But producing work like this is my full-time job, and I’m able to get stories like this because people understand I’m writing for one of the best audiences in Canadian journalism. If you want to support my full-time work and join that audience, consider subscribing or upgrading to a paid subscription.

Copies of Yeates’s February IRCC Organizational Review Report have been floating around Ottawa because the department began implementing big changes this week. Some of the nearly 13,000 people who work in the department have asked for the rationale behind the changes. Yeates’s 28-page report makes the case succinctly.

Yeates was a top civil servant in Saskatchewan before moving to Ottawa in 2004. He held senior positions in three other departments before becoming deputy minister at Citizenship and Immigration Canada, the department now known as IRCC, where he served from 2009 to his retirement in 2013. That means he was Jason Kenney’s deputy minister for all of Kenney’s time at Immigration, but he was also a Trudeau Foundation mentor if you want to get excited about that instead.

His report’s purpose, he wrote, “is to provide strategic advice to the Deputy Minister on how the department can become a more efficient and effective organization.” After interviewing 36 people inside and outside the department, he decided it was a mess.

‘“[T]he current organizational model at IRCC is broken but is being held together by the hard work and dedication of staff,” he wrote. “At IRCC today department-wide planning is limited and some interviewees suggested it has in fact disappeared completely . There is no multi-year strategic plan, annual plans are not in place consistently across the department and consequently reporting is seen by many as haphazard.”

What the department did have going for it was a decent work environment: “In talking to senior managers at IRCC the culture was universally seen as ‘committed,’ ‘collaborative,’ ‘supportive’ and so on.” The senior managers Yeates interviewed saw this culture as “helping to overcome the shortcomings of the current organizational structure and of the weakness of the governance and management systems.”

The immigration department has always been the main portal between a messy world and an anxious nation. Lately the world had grown messier, Yeates noted, and the demands on the department were starting to hurt. “[T]he operating environment, both nationally and internationally, has grown ever more complex, unstable and frenetic,” he wrote.

In response, “the department has grown exponentially,” from 5,217 staff when Yeates left it in 2013 to12,721 this year, an expansion of 144%. The “Ex complement,” the department’s management cadre, grew from 135 to 227 over the same period, a smaller increase of 68%. That might explain why the department’s managers are so stressed, Yeates speculated. At any rate, the department’s structure was conceived for a much smaller staff and caseload.

To catch up, Yeates proposed big reform in four areas: Organizational Structure, Governance, Management Systems and Culture. He cautioned that tinkering with only one or a couple of those areas wouldn’t have the effect that a “Big Bang,” however difficult, would achieve.

The big problem in Organizational Structure was that the department isn’t organized along business lines: that one of the world’s leading destinations for asylum and humanitarian immigration doesn’t have an assistant deputy minister for asylum, for instance. The obvious challenge was that in a hectic world there will certainly be more crises, like those of recent years. “Should IRCC have a permanent ‘response team’ in place? The short answer is no.” Between crises that team of experienced trouble-shooters would just be twirling their thumbs. Instead Yeates proposed better contingency planning, including lessons learned from other crisis-management departments such as National Defence.

Under Governance, Yeates found a proliferation of over-large committees sitting through endless presentations and not really sure, at the end of each, whether they had decided anything. “Most of the actual decision-making occurs in DMO/ADM bilats,” he wrote, referring to meetings between the Deputy Minister’s office and a given Assistant Deputy Minister.

The section of Yeates’s report that deals with Management Systems reads like a parable of contemporary Ottawa: a “series of periodic crises” that somehow nobody anticipated, “descend[ing] into ‘issues management.’” What’s needed is much better planning and reporting, he wrote. When he was running the department barely a decade ago, every part of the department was reporting on progress against targets every three months. That system has fallen by the wayside. A department that’s obsessed with its “priorities” or with the to-do items in “a minister’s mandate letters” is “inherently limited” and guaranteed to be side-swiped by events intruding from the real world, he wrote.

The upshot of all this tunnel vision was that the department was expecting to “lapse,” or leave unspent, $368 million in projected spending for the year underway, even as passport-related spending was projecting a $238 million deficit.

Yeates’s report closed with the sort of plea that’s traditional in this sort of exercise, essentially pleading not to be ignored. “IRCC is at a crossroads and as Yogi Berra famously quipped ‘when you come to a fork in the road, take it,’” he wrote. Change is hard, but a “substantial majority” of the people he interviewed told him it was overdue.

Neil Yeates and Christiane Fox.

And that’s where the report ends. I had to decide what to do with it. First, always consider the possibility that you’ve been handed a fake report, or the first draft of something that was later amended beyond recognition. I emailed the office of Immigration Minister Marc Miller looking for comment. They handed me off to the civil servants in the department’s communications staff. But I also emailed Christiane Fox, the deputy minister, offering her a chance to comment. This is the sort of chance that people in Ottawa usually don’t touch with a barge pole.

But Fox called me on Thursday night and responded in detail. I asked: was the conversation on the record? She thought out loud for a few seconds, working her way up to a “Yes.” I don’t want to belabour this, but that answer is very rare these days.


The other way you can help me, besides subscribing, is to tell people about the work I’m doing here. Share this story with friends and family, or post it to your social networks. Let people know what we’re building here.

Share


Christiane Fox had been the DM at Indigenous Services for all of 22 months when she was sent to run IRCC in July of 2022. The new job “felt like crisis”: the department was sending weekly updates to an ad hoc committee of ministers whose job was to fix months of chaos in airports and passport offices.

“They felt like they were under duress,” Fox said. “Everyone was exhausted.” New staff were just “tacked on when there was a problem,” including the creation of an entirely new sector for Afghanistan. Fox talked about this with some of the most experienced public servants in town, including Yeates and Richard Dicerni, Fox’s former DM from her days as a young public servant at Industry, who passed away this summer and whose contribution to public life in Canada is hard to measure.

“I kind of said, ‘We’ve got to make some changes. And I don’t want to do it overnight. But I also don’t want to spend two years figuring out what a new model could look like.’” Yeates, whom she didn’t know well but who knew the department’s history, seemed like solid outside counsel.

While Yeates was doing his thing, Fox and the previous immigration minister, Sean Fraser, were consulting — with “business leaders, academics and clients” — about the department’s future. By June of this year, she had a plan, based on Yeates’s report and those consultations. She’s been rolling it out since then, from top managers on down, and on Wednesday, by way of explanation for the changes that are coming, she sent the Yeates report to enough people that I got a copy. A department-wide meeting is scheduled for this coming week.

What’s changing? “The model is now just more of a business-line model,” she said, reflecting Yeates’s first big recommendation.

So there’ll be a stronger crisis-planning sector. In a world that keeps producing humanitarian crises, the goal is to learn lessons for next time from Ukraine, Afghanistan and elsewhere. “Most importantly, we’ll have a group dedicated to thinking about these issues, planning for crisis.” It won’t eliminate the need to “surge,” or quickly add new staff when something flares up. “But in the past, we ended up surging so much that all of our other business lines suffered every time there was a crisis.” The goal now is to get better at anticipating so the department’s regular work doesn’t suffer.

“Asylum and Refugee. There was no Asylum ADM,” she said, reflecting another Yeates critique. “This is probably the thing that causes me the most heartache, in terms of, how are we going to deal with this as a country, globally? What are some of the tools that we have? How do we support the most vulnerable? How do we have a system that is fast and fair? So Asylum and Refugee will now be a sector within the department.”

In addition, there’ll be a sector focused on Economic Immigration and Family. “The business community didn’t really feel like we were actually talking to them about labour shortages, about skills missions, about what is the talent that the country needs.” And a sector on francophone immigration, identifying French-speaking sources of immigration and taking into account the needs of French-speaking newcomers.

“Other sectors remain kind of consistent. Like, we’ve always had a focus on border and security, but we will now have a team that’s really migration integrity, national security, fraud prevention, and looking at case management in that context.”

Fox said she’s working on more of a “client focus” in the department’s work. “When I joined the department I remember, my first few weeks, thinking, ‘Everybody talks about inventory and backlog and process.’ But I didn’t feel clients and people were at the forefront.” This may sound like a semantic difference. But anyone who’s been treated as inventory and backlog can testify to the potential value in any reform that restores a measure of humanity to recipients of government service.

I’ve been arguing for months here that simply acknowledging problems and identifying possible solutions is better communications than the happy-face sloganeering that passes for so much of strategic comms these days. Here, quite by accident, I’d stumbled across somebody who seems to have had similar thoughts. (There’s an irony here, because Fox’s CV includes a long stint as a director of strategic communications in the Privy Council Office.)

“There will be things that will come up,” Fox said, “that may not be as smooth a transition as we thought, or maybe a bit clunky, that we need to rethink. What we’ve told the employees is, it won’t be perfect. We needed to change, we’re going to change, but there’s going to be room for conversation around issues that arise as we go through this process.”

To subscribe to the full Paul Wells experience, upgrade your subscription.

Upgrade to paid

 

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

Business

The Digital Services Tax Q&A: “It was going to be complicated and messy”

Published on

A tax expert on the departed Digital Services Tax, and the fiscal and policy holes it leaves behind

It’s fun, and fair, arguing whether Mark Carney “caved” in suspending the application of Canada’s Digital Services Tax to revive broader negotiations with the Trump administration. But I figure there are other dimensions to this issue besides tactics. So I got in touch with Allison Christians, a tax law professor at McGill University and the founding director of the Canadian Centre for Tax Policy.

In our talk, Christians discusses the policy landscape that led to the introduction of the DST; the pressure that contributed to its demise; and the ways other countries are addressing a central contradiction of the modern policy landscape: without some kind of digital tax, countries risk having to impose costs on their own digital industry that the overwhelmingly US-based multinationals can avoid.

I spoke to Christians on Friday. Her remarks are edited for length and clarity.


 

Paul Wells: I noticed in your social media that you express inordinate fondness for tax law.

Allison Christians: You will not find a more passionate adherent to the tax cult than me. Yes, I do. I love tax law. Of course I do. How could you not? How could you not love tax law?

PW: What’s to love about tax law?

Christians: Well, tax law is how we create our country. That’s how we build our society. That’s how we create the communities that we want to live in and the lifestyle that we want to share with our neighbours. That’s how: with tax law.

PW: I guess the goal [of tax policy] is to generate the largest amount of revenue with the smallest amount of grief? And to send social signals while you’re at it. Is that right?

Christians: I don’t think so. Tax is not about raising maximum revenue. Tax is about deciding what society you’re trying to build and what portions of that society need to be made public, and what can be left to private interests which then need to profit. So we have decided in Canada, as a country, that basic minimum healthcare cannot be a for-profit enterprise. It has to be a public enterprise in order to make sure that it works for everybody to a certain basic level. So tax is about making those decisions: are we going to privatize everything and everyone pays for their own health care, security, roads, insurance, fire department etc. And if they can’t pay, then too bad? Or are we going to have a certain minimum, and that minimum is going to be provided in a public way that harmonizes across the communities that we have. And that’s what tax is about. It’s not about extracting revenue at all. It’s about creating revenue. It’s about creating a market. It’s about investing in a community. So I just object to the whole idea that tax is about extracting something from me, because what tax is doing is creating a market for me to be able to thrive. Not just me, but all of my neighbours, as well.

PW: Let’s jump forward to the events of the past couple weeks. Were you surprised when the Prime Minister suspended the Digital Services Tax?

Christians: I think “surprise” is probably too strong of a word, because nothing any political leader does to cope with the volatility of the United States would surprise me. We are dealing with a major threat, a threat that is threatening to annex us, to take our resources, to take our sovereignty, to take our communities and rip them apart and turn them into a different way of being. And that’s a serious threat. So nothing would surprise me in response to that. Disappointed, of course. But not disappointed in our Canadian response. More disappointed in the juggernaut that Trump has been allowed to become by his base, and that they’re pulling the rug out from under everyone that’s cooperated with the US agenda for decades, including us.

PW: What’s your best understanding of what the Digital Services Tax was designed to accomplish? And is it unusual as taxes go?

Christians: So to understand this, you really have to be a policy wonk, which isn’t much fun. So I’m gonna give you an example that might make it clear from the perspective of Canada. Why we might have a Digital Service Tax or might want something like it.

I want to preface this by saying that the Digital Service Tax is by no means the only way to do the underlying things we want to accomplish. Certainly other countries have been collecting DSTs and have been collecting billions of dollars, and US companies have had reserves for paying that Digital Service Tax. So we just left money on the table. But let me try to explain why we want to do the thing without getting too “tax nerdy” on you.

So I’m sure you can come up with the one Canadian company that’s streaming content on television or on digital devices.

PWCrave?

Christians: Yeah, that’s the one. Crave is owned by Bell Media and is a Canadian company. And Crave pays taxes in Canada. Crave has to compete against Netflix, which does not have to pay tax in Canada. Netflix just simply doesn’t have to pay the same way that Crave does unless we force them to pay. Crave has to compete with US and foreign content streamers. We may get to a point where we can get Netflix to collect some sales tax on the GST, for example. But if Netflix itself stays out of Canada, physically, but it’s still getting all those customers that otherwise Crave would have access to, then Crave is at a structural disadvantage.

Now tell me which Canadian provider competes with Google.

PW: I can’t think of one.

Christians: Exactly. There isn’t one. How are we supposed to get a homegrown competitor when our competition simply does not pay taxes, and any one we would grow here in Canada has to pay tax here? So we have to understand the Digital Service Tax as simply our response to the fact that we normally do not tax a company unless they are physically located in Canada. But now we’ve got to go into this digital space and say: you’re still here, even if we can’t see you and talk to you, you’re still here. You’re doing something in our market. And that’s what the Digital Service Tax was trying to deal with.

This Substack is reader-supported. To receive new posts and support my work, consider becoming a free or paid subscriber.

PW: Now, how are companies likely to respond to this Digital Services Tax? It seems to me the likeliest outcome would be that they would pass those costs on to their customers.

Christians: Yes, that is what companies have said they would do. Google talked about passing those costs on to the customers. And their customers obviously are advertisers. I want to point out that advertisers in Canada used to advertise in local newspapers and media. Now they advertise on Facebook, owned by an American-headquartered Company, Meta. Right now, they advertise on those foreign platforms, so we don’t have those advertising dollars here. Advertisers might have had to pay the Digital Service Tax if Google, or whoever, had passed it on to them. I think it’s fair to say, that Canadians advertising on those foreign platforms would have faced a gross-up to cover that tax.

PW: So, the net effect is that it just becomes more expensive for Canadian consumers. I’ve seen it argued that all this tax would have succeeded in doing is making Netflix more expensive.

Christians: Okay, that’s possible. I mean, that assumes the supply is totally elastic: you can increase the price of Netflix, and people will still pay it indefinitely. Right? So that’s the assumption in the short term. But the long-term assumption is that Crave becomes more competitive — because its competitors are paying the same tax that it is paying. The Crave subscription price may or may not respond, but if you put pressure on the foreign service providers in the same manner that’s on the Canadian providers, it might cost more, but we’re also getting the tax.

PW: I believe the Prime Minister, in an interview with the CBC said that he was thinking of getting rid of this thing, anyway. [The quote I’m reaching for here is: “Look, what we did this week is something that I think we were going to do anyways, in the end, for the deal.” At 1:07 in this video. — pw] Why do you think he would have been leaning in that direction? And do you think that absent a Truth Social post by President Trump, he actually would have gotten rid of the thing?

Christians: I can’t speculate too much about the politics of this, because I’m not talking to many of the people that make policy, but I know the complaints about the DST, and I don’t dispute them. It was going to be a complicated tax to collect and it was going to be messy in terms of compliance. There’s a lot of uncertainty around the tax and I know there’s always an enormous amount of pressure to reduce all taxes. There’s always going to be that segment of society that sees taxes being thrown down the drain and not as an investment in the society that we want to live in.

Share

American companies are famous for investing their money on lobbying and not in taxes. They spend their money convincing us that it would be bad for us to tax them, and they can spend a much smaller percentage of their money on lobbying and get us to believe that narrative. And the narrative is that somehow, if we tax Google, Google will go away and we won’t be able to use it. That Google won’t innovate. It’s nonsense, but it’s a story that resonates nonetheless. Was Prime Minister Carney pressured to get rid of the DST? Undoubtedly. And maybe he personally thinks there’s a better way to tax these companies than with an excise tax. I don’t fault him for thinking that. I have even written that there are better ways for Canada to collect this tax than the Digital Services Tax.

PW: I’m going to want you to tell me about these other ways. But I assume that if a Canadian government attempts any of these other ways, then the companies we’re talking about know that all they have to do is hit the Trump button and the pressure will be right back on.

Christians: That’s correct. There are a couple of [alternatives to the DST]. We could, like some other countries have done, redefine the types of income that we subject to withholding taxes in Canada. It’s a complicated technical idea, but basically any payments that go from our advertisers to Google, we could impose a withholding tax simply by expanding a couple of definitions in the Income Tax Act that would then carry over into our treaty. Now, people will push back on that, and say that you’re changing a deal, and people will object to that. And we can have an argument about that, but that possibility exists. That withholding tax is the most straightforward way to do this and we should probably already be thinking about it.

Another one that’s kind of fun, which I really enjoyed learning about when I came to Canada, is Section 19 in the Income Tax Act. So, Canadian advertisers are paying Google now, instead of a Canadian newspaper. Well, Section 19 basically says that whenever someone makes a payment for advertising to a foreign, non-Canadian media, that payment’s not deductible.

Now that provision seems to violate Free Trade rules because it changes, depending on who you make the payment to. But it’s a provision in law. The US objected to it when we adopted it by imposing a reciprocal tax on US advertisers paying Canadian outlets, which doesn’t seem to bother anybody.

PW: But the application of that will be very asymmetrical, right?

Christians: Yes, for sure. And I’ll tell you what the Canadian media noticed when we started paying for digital newspapers online: that they’re not subject to Section 19 — only print and traditional media are subject to this denial of deduction — and Canadian media advocated for this denial of deduction for online publications as well.

All you have to do is look at the wording of Section 19 — and you don’t even have to change the words — and all of a sudden all those payments to Google are not deductible. But if the payments were to Crave, they would be deductible, and if they are to the Globe and Mail, or other Canadian companies, they would be deductible. That is a different kind of advantage for the Canadian competitor that’s a little less susceptible to Trump’s understanding, and a little less susceptible to the politics that surround the Digital Services Tax. But it’s technical. You have to explain it to people, and they don’t believe you. It’s hard to understand it.

PW: Theoretically a two-time central-bank governor could wrap his head around it.

Christians: Yes, I think he could fully understand it, for sure. You’re absolutely right. Will he want to do it, though? I just don’t know.

PW: You said that there are other jurisdictions that continue, today, to successfully tax the web giants. Who are you thinking of?

Christians: Well, Austria’s been doing the Digital Service Tax since the beginning. The UK has the Diverted Profits Tax that they’ve been using. Australia has one that’s been enforced. Austria stands out because I think it was 2017, in Trump’s 1st term, and it was part of a group that Trump threatened to retaliate against, but they just quietly kept going and they’re still collecting it. Part of the narrative is that we, Canada, came too late to the DST party. We just weren’t part of that initial negotiation. We came in too late, and then it was too obvious, and people were able to isolate us from the pack.

PW: My understanding is we’re looking at a hypothetical $7.2 billion in revenue over 5 years. And that represents a shortfall that’s going to have to be found either in other revenue sources or in spending cuts, or in greater debt. Aside from the DST, do you think Canada could use a general overhaul of its tax code?

Christians: Always. Yes, absolutely! Taxes are funny, right? Because they come into every single political battle, and what ends up happening is that politicians treat the Tax Act and the tax system as a present-giving machinery, and not as a clear policy deliverance system.

I am, every day, surprised at how complicated the Canadian tax system is. It’s way too complicated. You can’t even fill out your own tax return in this country. You’re going to make mistakes because it’s just too ridiculously written. It’s too confusing. It’s too messy. So it’s time to take another look. But you need a commission [like the 1962 Carter royal commission on taxation]. You need to be bipartisan. You need to spend money on that. You need to think that the things that you do have long-term effects, and this takes political courage. And basically it requires upsetting a bunch of people and resetting things, and we just might not be at the right time politically to be doing that because people feel vulnerable to volatility from abroad. So it may not be the time to push that.

Invite your friends and earn rewards

If you enjoy Paul Wells, share it with your friends and earn rewards when they subscribe.

Invite Friends

Continue Reading

International

Elon Musk forms America Party after split with Trump

Published on

MXM logo MxM News

Quick Hit:

Elon Musk announced Saturday he is forming the “America Party,” claiming it will challenge what he calls the “one-party system” in Washington. The move follows his public split with President Trump and appears aimed at targeting Republicans who supported the president’s domestic agenda.

Key Details:

  • Musk announced the America Party on X, declaring that Americans are living under a “one-party system” and need a new political alternative.
  • The launch followed his criticism of Trump’s One Big Beautiful Bill.
  • On Independence Day, Musk posted a poll asking if Americans wanted “independence from the two-party (some would say uniparty) system,” which he cited as support for forming the party.

Diving Deeper:

Elon Musk formally announced the launch of his new political outfit — the “America Party” — on Saturday, marking a new chapter in his increasingly public clash with Republican leadership.

“When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy,” Musk wrote on his platform, X. “Today, the America Party is formed to give you back your freedom.”

The announcement comes as tensions between Musk and President Trump have escalated. While Musk previously worked closely with the administration as head of the Department of Government Efficiency, the relationship has deteriorated in the wake of Trump’s push for the One Big Beautiful Bill, a major domestic package that Musk now openly criticizes.

In a series of recent posts, Musk vowed to help primary Republican lawmakers who backed the bill. “They will lose their primary next year if it is the last thing I do on this Earth,” he posted earlier this week.

He’s offered few specifics beyond that, other than suggesting the party will “laser-focus” on a handful of Senate and House races in 2026. So far, there’s been no indication of a formal party structure, candidate recruitment, or funding plan.

Critics were quick to compare Musk’s move to Ross Perot’s 1992 presidential bid, which many credit with splitting the conservative vote and aiding Bill Clinton’s election. “You are pulling a Ross Perot, and I don’t like it,” one user reportedly responded on X.

Meanwhile, Trump has reportedly explored options to retaliate. According to multiple reports, the president has discussed whether to revoke federal contracts connected to Musk’s companies and even floated questions about his citizenship. “We’ll have to take a look,” Trump told reporters when asked directly.

While it’s too early to tell whether the America Party will amount to more than a personal platform, the political message is clear: Musk is now openly working against Republicans he once aligned with, and doing so under his own banner.

Continue Reading

Trending

X