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Frontier Centre for Public Policy

Federal government’s bloated bureaucracy needs an immediate overhaul

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From the Frontier Centre for Public Policy

By David Leis

I recently had the pleasure of speaking with the Honourable Preston Manning about the ever-growing size of Canada’s federal bureaucracy. Manning, a seasoned politician with an impressive legacy of public service, recently wrote a compelling column urging the next government to rein in the federal bureaucracy.

Our conversation highlighted the need for a strategic approach to managing the state’s size and ensuring efficient and effective government operations and democratic accountability. This issue is relevant to Canadians as the size of government in Canada continues to increase at historic levels and acts as a major impediment to our nation’s productivity, standard of living and quality of life.

The size of the state has also led to a change in our culture. Some assume that the government will do everything, which, of course, has never worked.

During our conversation, Manning highlighted the dramatic growth of the federal civil service, which has nearly doubled during the Trudeau years. This expansion, he said, poses a significant challenge for any new government trying to control this vast machinery by elected representatives. His central argument was clear: a new government must be prepared with a solid plan to manage and, where necessary, reduce the federal bureaucracy’s size to ensure its effectiveness and that it serves the needs of Canadians.

One of his primary suggestions was a return to merit-based hiring. The current emphasis on diversity, equity, and inclusion, he pointed out, sometimes comes at the expense of efficiency and effectiveness. While acknowledging the importance of a diverse workforce, Manning stressed that competence and capability, not ideology, should be the core criteria for hiring civil servants. This approach, he said, would ensure that the government is staffed by professionals who can deliver high-quality public services.

Privatization also came up as a key theme in our conversation. Manning pointed out that certain government functions could be better managed by the private sector. He said that by contracting out services that the private sector can deliver more cost-effectively, the government can reduce its size and focus on its core responsibilities. This shift would not only decrease public expenditure but also enhance the efficiency of service delivery to the public.

We also discussed the issue of federal encroachment into provincial jurisdictions and the need for it to focus on its own responsibilities, many of which are underperforming. The Trudeau government has been overstepping its constitutional boundaries in areas like healthcare, natural resources, and municipal governance. By respecting provincial jurisdictions, the federal government could reduce its role and the size of its bureaucracy while empowering those levels of government closer to the people. This decentralization would enable the provincial governments to manage their affairs more effectively, leading to a more balanced and efficient federation.

Building public support for reducing the size of the government was another crucial point in our conversation as Canadians struggle with high taxation and affordability. Survey after survey suggests a low level of trust in government as they witness high levels of deficits and debt as their standard of living continues to fall. Manning pointed out that, during the formation of the Reform Party, there was initially little public support for balancing the budget. However, through persistent efforts, public awareness and support for fiscal responsibility significantly increased. Similar efforts are needed today, he said, to educate the public about the importance of controlling government size and spending to serve Canadians better.

Our conversation also delved into the rule of law and the need for greater transparency to the public to ensure stronger accountability. Canada has one of the most secretive approaches to handling government documents in the Western world. Many documents are held indefinitely when they should be released publicly. Ironically, this secrecy has created a challenge for historians who seek to research past government decisions and can find few original documents because they are not public.

Manning also recommended periodically reviewing programs and either renewing or discontinuing them based on their effectiveness. This approach, he said, would enhance accountability and prevent the perpetuation of ineffective programs that no longer serve any purpose.

A particularly striking part of our discussion was the concept of a vertical political culture, where an elite class wields significant power, often at the expense of ordinary citizens. Manning argued that this description of elites and power is more relevant today than the traditional left-right political spectrum. The public must elect representatives committed to empowering citizens rather than perpetuating elite control, particularly within a massive, complex state bureaucracy.

Manning urged voters to ask candidates specific questions about how they plan to reduce the size of the federal civil service and manage public spending. By holding elected officials accountable, citizens can ensure that their concerns are addressed and that the government remains responsive to their needs, he said.

My discussion with Preston Manning highlighted the urgent need for strategic planning and public engagement in managing the size of Canada’s federal bureaucracy to ensure democratic control. His call for a return to merit-based hiring, increased privatization, respect for provincial jurisdictions, and greater transparency offers a roadmap for a more efficient and effective government.

As Canada faces increasing fiscal challenges and public dissatisfaction, his insights provide a timely reminder of the importance of prudent governance and active citizenship.

David Leis is the Frontier Centre for Public Policy’s vice president for development and engagement and host of the Leaders on the Frontier podcast.

Business

Hudson’s Bay Bid Raises Red Flags Over Foreign Influence

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From the Frontier Centre for Public Policy

By Scott McGregor

A billionaire’s retail ambition might also serve Beijing’s global influence strategy. Canada must look beyond the storefront

When B.C. billionaire Weihong Liu publicly declared interest in acquiring Hudson’s Bay stores, it wasn’t just a retail story—it was a signal flare in an era where foreign investment increasingly doubles as geopolitical strategy.

The Hudson’s Bay Company, founded in 1670, remains an enduring symbol of Canadian heritage. While its commercial relevance has waned in recent years, its brand is deeply etched into the national identity. That’s precisely why any potential acquisition, particularly by an investor with strong ties to the People’s Republic of China (PRC), deserves thoughtful, measured scrutiny.

Liu, a prominent figure in Vancouver’s Chinese-Canadian business community, announced her interest in acquiring several Hudson’s Bay stores on Chinese social media platform Xiaohongshu (RedNote), expressing a desire to “make the Bay great again.” Though revitalizing a Canadian retail icon may seem commendable, the timing and context of this bid suggest a broader strategic positioning—one that aligns with the People’s Republic of China’s increasingly nuanced approach to economic diplomacy, especially in countries like Canada that sit at the crossroads of American and Chinese spheres of influence.

This fits a familiar pattern. In recent years, we’ve seen examples of Chinese corporate involvement in Canadian cultural and commercial institutions, such as Huawei’s past sponsorship of Hockey Night in Canada. Even as national security concerns were raised by allies and intelligence agencies, Huawei’s logo remained a visible presence during one of the country’s most cherished broadcasts. These engagements, though often framed as commercially justified, serve another purpose: to normalize Chinese brand and state-linked presence within the fabric of Canadian identity and daily life.

What we may be witnessing is part of a broader PRC strategy to deepen economic and cultural ties with Canada at a time when U.S.-China relations remain strained. As American tariffs on Canadian goods—particularly in aluminum, lumber and dairy—have tested cross-border loyalties, Beijing has positioned itself as an alternative economic partner. Investments into cultural and heritage-linked assets like Hudson’s Bay could be seen as a symbolic extension of this effort to draw Canada further into its orbit of influence, subtly decoupling the country from the gravitational pull of its traditional allies.

From my perspective, as a professional with experience in threat finance, economic subversion and political leveraging, this does not necessarily imply nefarious intent in each case. However, it does demand a conscious awareness of how soft power is exercised through commercial influence, particularly by state-aligned actors. As I continue my research in international business law, I see how investment vehicles, trade deals and brand acquisitions can function as instruments of foreign policy—tools for shaping narratives, building alliances and shifting influence over time.

Canada must neither overreact nor overlook these developments. Open markets and cultural exchange are vital to our prosperity and pluralism. But so too is the responsibility to preserve our sovereignty—not only in the physical sense, but in the cultural and institutional dimensions that shape our national identity.

Strategic investment review processes, cultural asset protections and greater transparency around foreign corporate ownership can help strike this balance. We should be cautious not to allow historically Canadian institutions to become conduits, however unintentionally, for geopolitical leverage.

In a world where power is increasingly exercised through influence rather than force, safeguarding our heritage means understanding who is buying—and why.

Scott McGregor is the managing partner and CEO of Close Hold Intelligence Consulting.

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Business

Canada Urgently Needs A Watchdog For Government Waste

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From the Frontier Centre for Public Policy

By Ian Madsen

From overstaffed departments to subsidy giveaways, Canadians are paying a high price for government excess

Not all the Trump administration’s policies are dubious. One is very good, in theory at least: the Department of Government Efficiency. While that term could be an oxymoron, like ‘political wisdom,’ if DOGE is useful, so may be a Canadian version.

DOGE aims to identify wasteful, duplicative, unnecessary or destructive government programs and replace outdated data systems. It also seeks to lower overall costs and ensure mechanisms are in place to evaluate proposed programs for effectiveness and value for money. This can, and usually does, involve eliminating some departments and, eventually, thousands of jobs. Some new roles within DOGE may need to become permanent.

The goal in the U.S. is to lower annual operating costs and ensure that the growth in government spending is lower than in revenues. Washington’s spending has exploded in recent years. The U.S. federal deficit exceeds six per cent of gross domestic product. According to the U.S. Treasury Department, annual debt service cost is escalating unsustainably.

Canada’s latest budget deficit of $61.9 billion in fiscal 2023–24 is about two per cent of GDP, which seems minor compared to our neighbour. However, it adds to the federal debt of $1.236 trillion, about 41 per cent of our approximate $3 trillion GDP. Ottawa’s public accounts show that expenses are 17.8 per cent of GDP, up from about 14 per cent just eight years ago. Interest on the escalating debt were 10.2 per cent of revenues in the most recent fiscal year, up from just five per cent a mere two years ago.

The Canadian Taxpayers Federation (CTF) continually identifies dubious or frivolous spending and outright waste or extravagance: “$30 billion in subsidies to multinational corporations like Honda, Volkswagen, Stellantis and Northvolt. Federal corporate subsidies totalled $11.2 billion in 2022 alone. Shutting down the federal government’s seven regional development agencies would save taxpayers an estimated $1.5 billion annually.”

The CTF also noted that Ottawa hired 108,000 more staff in the past eight years at an average annual cost of over $125,000. Hiring in line with population growth would have added only 35,500, saving about $9 billion annually. The scale of waste is staggering. Canada Post, the CBC and Via Rail lose, in total, over $5 billion a year. For reference, $1 billion would buy Toyota RAV4s for over 25,600 families.

Ottawa also duplicates provincial government functions, intruding on their constitutional authority. Shifting those programs to the provinces, in health, education, environment and welfare, could save many more billions of dollars per year. Bad infrastructure decisions lead to failures such as the $33.4 billion squandered on what should have been a relatively inexpensive expansion of the Trans Mountain pipeline—a case where hiring better staff could have saved money. Terrible federal IT systems, exemplified by the $4 billion Phoenix payroll horror, are another failure. The Green Slush Fund misallocated nearly $900 million.

Ominously, the fast-growing Old Age Supplement and Guaranteed Income Security programs are unfunded, unlike the Canada Pension Plan. Their costs are already roughly equal to the deficit and could become unsustainable.

Canada is sleepwalking toward financial perdition. A Canadian version of DOGE—Canada Accountability, Efficiency and Transparency Team, or CAETT—is vital. The Auditor General Office admirably identifies waste and bad performance, but is not proactive, nor does it have enforcement powers. There is currently no mechanism to evaluate or end unnecessary programs to ensure Canadians will have a prosperous and secure future. CAETT could fill that role.

Ian Madsen is the Senior Policy Analyst at the Frontier Centre for Public Policy.

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