July 8, 2020

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Coping with crises in time of restraint

John Woods / The Canadian Press Files</p><p>Once the current crises are over, Premier Brian Pallister’s government must hold a post-mortem to identify lessons learned.</p>

John Woods / The Canadian Press Files

Once the current crises are over, Premier Brian Pallister’s government must hold a post-mortem to identify lessons learned.

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Facing a global pandemic, an economic freefall and widespread disruptions within society, many governments around the world have been forced to depart at least temporarily from their overriding budgetary strategies of austerity and downsizing. The contemporary crises have reminded us, if we needed reminding, that governments perform essential tasks within society.

In Manitoba, the premier and the health minister have been centre stage, describing government actions and reassuring us that the province will make it through the pandemic and the associated economic fallout. Experienced and knowledgeable leaders in health care have regularly informed us about the risks and the necessary precautions to be taken.

On the front lines, there are the thousands of "local heroes" who are directly confronting the disease, at risk to themselves and their families

Simultaneously, large parts of the Manitoba economy have shut down, causing businesses, community organizations and individuals to experience lost income, stress and anxiety. A sharp downturn that could become a recession is producing a deep hole in tax revenues for government.

Events have moved so quickly that the provincial budget delivered on March 19 was outdated on arrival. The premier promised to spend as necessary to protect and support Manitobans, but he also said the government would stay the course on its long-term budgetary path toward lower taxes, balanced budgets and reducing the accumulated debt.

My purpose is not to second-guess the government. Rather, in the interest of learning, I ask the question: did recent downsizing and restraint measures diminish the capacity of the provincial public sector to handle the surge in demands arising from the dual emergencies?

To explore the complicated issues involved, I am using the concept of organizational slack that has been widely studied and debated in the management studies literature. Put simply, slack refers to various kinds of resources which, under normal conditions, are surplus to the requirements for operating an organization at an optimal level. Those resources can be revenues, employees, equipment and even time to accomplish things. Slack can be created through deliberate planning, or can arise inadvertently through the dynamics of running government.

Management consultants regard slack in commercial firms as excess capacity that must be shed in the name of lean production and competitive advantage. They assume that because governments do not face competition, there is frequently excess capacity that can be eliminated through cutbacks and restraint.

Governments, however, are not the same as businesses. Curtailing a firm’s production of widgets will have fewer negative effects than a government removing resources needed to perform the core tasks of protecting society and citizens. Measuring slack is difficult, so when governments push hard for greater economy and efficiency, the result may be less effective and equitable public services.

Whether and why there is too little or too much slack in a government’s budget is a contentious topic. The Progressive Conservatives claim the NDP increased taxes, overspent, ran up deficits, increased borrowing costs and drained the "rainy day" fund. In office, the PCs have cut taxes and curtailed spending. Drastic actions have been taken to eliminate and to consolidate health services. Health is the most dramatic example of a number of policy systems that have been under budgetary strain.

The government did begin to replenish the rainy day fund. At its current level, however, the fund will cover emergency costs for only a few weeks. The decision to defer the provincial sales tax reduction made sense, but given the economic downturn, few revenues will be gained.

Delayering the bureaucracy has been another restraint measure. The government issued the directive that all parts of the public sector meet the nominal target of a 15 per cent reduction in the managerial ranks. It is unclear whether the target represented the government’s view, informed perhaps by outside consultants, that this was the amount of excess managerial capacity that existed.

During emergencies, policy creativity becomes crucial. Studies indicate the middle managers are often the source of innovation. When downsizing occurs, planning and policy analysts are often seen as expendable. Some departing managers will leave with first-hand knowledge of how past crises were handled. Finally, middle managers have the operational knowledge needed to repurpose spending, staff and equipment to address an emergency.

More than 2,000 people have left the public service since 2016. A smaller workforce means there are fewer people to do the extra work involved with meeting the urgent requirements of an emergency while still maintaining regular government operations.

Manitoba will survive the dual crises. When that time comes, an in-depth post-mortem must occur to identify lessons learned, and governments must ensure the capacity for resilience is built into the public-sector infrastructure.

Paul G. Thomas is professor emeritus of political studies at the University of Manitoba. He studied and occasionally practised public policy and management for over 40 years.


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