Battling the Deep Status Quo: Policy Innovation in Canada’s Public Service (Part I) (Copy)
by Sharon Ayele & Jonathan Craft
From Destination to Discipline argued it’s time to develop a discipline of public service policy innovation in Canada. That the deliberate adoption of new ways to develop and implement public policy shouldn’t be the exception to the rule but central to how Canada’s government makes public policy.
Against this backdrop Policy Ready and the Institute on Governance brought together public servants in Ottawa to explore the state and future of policy innovation in Canada. We discussed how to foster, scale, and sustain meaningful innovation across government in a period of government transition.
Two sessions were organized with a morning session including senior policy leaders with deep experience and a system wide perspective. The afternoon session featured a range of policy practitioners from across the front lines of federal policy innovation.
These conversations brought into focus why policy innovation is so challenging. What it takes to make innovation happen, to scale it, and to sustain it as part of how the public service operates.
This post shares key insights from the morning session. A second post will do the same from the afternoon session along with some comparative insights from across both conversations.
“No getting around Westminster”: Structure, Culture, and Incentives
The coffee had barely been poured before the conversation turned to structural and cultural conditions that constrain policy innovation within the federal landscape.
The deep status quo.
Canada’s Westminster style governing arrangements give us a professional public service and ministerial responsibility - but also a fragmented institutional ecosystem with complex rule-based authority and accountability arrangements.
Many spoke about how muddy accountability and fragmented authority make advancing policy hard - and innovating even harder. Policy issues no longer fall in clear categories, with neat and tidy accountabilities, but often span multiple departments and units and branches within them. While innovation was possible, too often energy and resources were being sunk on coordination, navigation, and management of the policy process instead of innovating within it.
The public service is a ‘guardian institution’ as one participant put it. It promotes rules based accountability and avoids risk by design. Some pointed to how a host of restrictive rules have already been dismantled to enable innovation but others lamented the long shadow of the perception of rules as stifling policy innovation. Rules existed or must exist somewhere that prevented innovation. The deep status quo at work.
An underwater statue garden
Senior leaders widely recognized that public service culture was problematic. It incentivizes compliance, reporting, and monitoring - not policy innovation. Many, unsurprisingly, pointed to risk aversion. This was a senior leader's challenge with those in positions of authority needing to better recognize the risks in not taking risks and needing to better incentivize staff to normalize policy innovation. But executive compensation, program design, and funding cycles were systematic barriers that created a culture averse to policy innovation too.
This was not just all ‘inside baseball’ either. Senior leaders were clear that when a partner, another order of government, or a community needs support—for example, to improve health, housing, or for economic development —it often has to figure out how to navigate the government maze. That there are often multiple government programs and departments, often with their own forms, deadlines, and reporting requirements.
The conversation however was not all doom and gloom. Policy innovation happens.
Seeding, Awakening, and Scaling Policy Innovation
Senior leaders were quick to point to the COVID-19 pandemic or global financial crisis as examples of when the crisis facilitated policy innovation. The group recognized the need to sustain a mindset and practices for policy innovation in absence of crisis.
For some this was a matter of awakening the latent capacity in the system. Helping public servants ask questions to confirm rules really existed or to work within the system to innovate. Convening skills were highlighted with more than one participant talking about the need to bring together teams, branches, and even departments and ministers to help ensure a ‘no surprises’ environment and to lay groundwork for policy innovation.
Someone watering a garden
Many bemoaned the persistence of "pilotitis"—small-scale experiments that never matured into broader reforms. Senior leaders stressed the need for structures and accountability mechanisms that allow successful innovations to be mainstreamed and scaled. Pilots that do not show promising results need to be wound down but without penalizing those who experimented. Likewise, while ‘digital’ was seen as having eclipsed ‘innovation’ it had materialized mostly through innovations in service delivery. There was a need to seed innovation sooner ‘upstream’ in the policy process.
The importance of aligning evaluation functions with innovation goals was highlighted as a way to embed learning and drive accountability for experimentation. Many also identified the need to modernize concrete policy tools - like grants and contributions (G&C) agreements. These instruments (and their guidance) were flagged as inflexible and inconsistent. Several participants describe how these instruments made policy innovation difficult particularly when working across government or with specific types of non-government partners. G&C have been reformed before but participants were clear that further reforms, informed by contemporary policy practice, were needed to drive innovation.
A slew of innovation examples were discussed. They ranged from systemic finance reforms in the wake of the global financial crisis to small experiments that tested mentorship training in the skilled trades. The latter started with just a few hundred apprentices but grew to reach over 25,000 across the country as evaluations showed it worked and convening helped secure opportunities to scale it.
There was capacity and opportunity within the system - but senior leaders needed to help incentivize it, could nurture it when it was nascent, and had to work to scale innovations.
The discussion helped crystalize what could reinforce and stimulate more policy innovation:
Embedding innovation in daily work through institutionalized directives and targets creates real incentives to experiment and innovate in the policy space. The directive on experimentation was highlighted as were various innovation prizes and working groups. Case studies and examples were also identified as helping socialize and normalize innovation in everyday practice.
Cross-Sector and Horizontal Collaboration: Many called for deeper integration across departments and with non-governmental actors. Proposals included policy incubation hubs within each department, human resource reforms to foster interdisciplinary teams, and innovation partnerships that include the private sector and academia. Examples were shared of community-focused funding mechanisms and collaborative horizontal policy initiatives.
Embedding Innovation in Organizations: One particularly impactful example was the National Research Council’s model, which mandates that 20% of researchers’ time be spent on experimentation. This built-in time, along with domain expertise and funding, creates a sustainable model for continuous innovation.
Redesigning Core Instruments: There’s a need to rethink foundational elements of government such as grants and contributions (G&Cs), regulatory processes, and procurement systems. Innovations like "sludge audits" and outcome-based funding were presented as tools to simplify and streamline burdensome procedures.
Leadership, Accountability, and Trust: Trust—both internal and external—was noted as critical to advancing innovation. Encouraging executive-level engagement with front-line service experiences and operational policy staff needed to happen more. Additionally, participants underscored the need to clarify and support accountability to empower risk-taking.
Strengthen Convening Practices: to enable policy innovation by bringing together the needed teams, units, and departments early. To highlight the value proposition, find consensus, and demystify innovative policy practice.
Innovation isn’t always about building something new. Sometimes, it’s about stopping what doesn’t work anymore—and making space for something better. The morning ended not with big conclusions but with more questions and a recognition that innovation in the policy space requires ongoing commitment and that senior executives have a particular role to play in taking on the deep status quo.
Sharon Ayele is Coordinator and Administrator, Learning at the Institute on Governance
Jonathan Craft is Associate Professor at the University of Toronto and founder of Policyready.ca