Measure productivity in the public sector? ‘Not being considered’

A federal working group struck to tackle sluggish productivity in Canada’s public service is calling for a deep cultural reset, sharper performance management and accelerated investment in artificial intelligence, even in an era of cost-cutting.

And while the Treasury Board of Canada Secretariat (TBS) has accepted much of that direction, it is quietly shelving some of the panel’s more ambitious ideas.

The Working Group on Public Service Productivity was appointed by the president of the Treasury Board in fall 2024 to “examine productivity in Canada’s federal public service and inform the government’s economic plan.” Supported by a secretariat at TBS, the group first met in December 2024 under the previous government and continued through spring and summer 2025, consulting with senior officials from Employment and Social Development Canada, the Privy Council Office, Shared Services Canada, Statistics Canada and TBS itself.

Members focused on several big levers, including: how to measure public sector productivity, how to support a more effective workforce and how to harness technology, especially AI. Their conclusions—now paired with a formal response from TBS—sketch out a roadmap for a leaner, more data‑driven and more digitally enabled federal government.

At the same time, the Treasury Board has drawn a clear line on scope. While it backs better federal metrics and AI deployment, it is not moving ahead on proposals such as measuring productivity across the entire Canadian public sector or creating new high‑level oversight roles for public service reform.

Call for hard productivity numbers

On measurement, the working group says Canada still lacks a robust framework to track whether public servants are actually becoming more productive. It argues that “accurate and transparent measurement of public service productivity is essential to improving outcomes for Canadians,” warning that without reliable data, it is difficult to assess efficiency or “identify areas for improvement.”

The panel’s first recommendation is that Statistics Canada “explore, test and report publicly on the development of a productivity measurement program for the public sector in Canada that uses a direct output approach.” That mirrors approaches in the United Kingdom, where the Office for National Statistics has tried to measure public outputs rather than just inputs such as staff and spending.

For front‑line services, the group wants concrete indicators linked to what Canadians actually experience. It says departments that deliver direct services should work with Statistics Canada to design productivity metrics “building on the recent State of Service report,” with the Treasury Board reviewing and approving the measures to ensure quality and comparability.

However, in its response, TBS signals it is not ready to widen that effort beyond the federal level. Recommendations “related to measuring productivity across Canada’s public sector” are listed among those “not being considered at this time because of other government priorities.”

Focus on culture and leadership

The most sweeping recommendations target how people are hired, managed and led. A productive public service “depends on a workforce that is skilled, motivated, and supported by a strong organizational culture,” the group says, and Ottawa must deliberately foster a culture that values “productivity, innovation, training and leadership development, and rigorous performance management.”

On culture, the panel urges the government to “foster a proud and distinctive organizational culture that supports a high-performing and innovative public service and discourages risk aversion and conformism.” Suggested actions include embedding public service values in recruitment and onboarding, supporting staff when “well-intentioned and prudent risk-taking and innovation result in failure,” and creating innovation “sandboxes” where new ideas can be tested outside normal rules.

The group also presses for a more deliberate approach to leadership, recommending more management training—particularly on “soft” skills to sustain “a collaborative and healthy organization”—and better succession planning to “bolster the deputy-head talent pool,” alongside more stable and needs‑based deputy minister appointments.

Improving performance management

On performance, the panel is blunt: “The government should support public service excellence through a culture of rigorous performance management.” It proposes mandatory, rigorous reviews before the end of a one‑year probation for both newly hired and newly promoted public servants, more training and clearer guidelines for managers, and public reporting in the Annual Report on the Public Service of how many employees have been dismissed or identified as underperformers.

It stresses that poor performance can reflect systemic problems—such as “insufficient training, lack of direction and managerial support”—and warns that performance processes must guard against bias and disproportionate disciplinary action for certain groups.

In response, the Treasure Board said Ottawa has established a Cabinet committee on Government Transformation to coordinate efforts to realize more effective and efficient government services and processes and to improve service delivery for Canadians: “Several working group recommendations could inform future work by this committee, such as recommendations related to upskilling, performance management, and ongoing investment in technology (including AI) to increase efficiency and effectiveness.”

AI, data and small tech projects at heart of digital push

On technology, the working group is emphatic that Ottawa must keep investing even when budgets are tight.

“Enhancing productivity requires investment, especially now when new technologies are emerging that can provide significant benefits,” it says. “Even in times of fiscal restraint, the government should make it a priority to invest in technology and associated training to support productivity and a world-class public service.”

The panel sees artificial intelligence as a “revolutionary opportunity” to improve productivity, but to responsibly accelerate the use of AI and exploit its productivity-enhancing benefits, it recommends investing in AI‑supported tools, improving data management, actively managing risks posed by generative AI, such as bias and hallucination, and ensuring managers and employees have access to AI‑related training.

It also calls for an external working group of people with public service, AI, HR and labour relations expertise to help Ottawa manage workforce impacts, including possible “workforce reallocations or reductions.”

Recommendations 'align with government initiatives'

Here, TBS is largely onside. It notes that the recommendations align with “many government initiatives that are underway now,” including an AI Strategy for the Federal Public Service 2025–2027 focused on an AI Centre of Expertise, secure and responsible use, training and talent pathways, and “building trust through openness and transparency.” It is also developing a “consistent approach to measuring the productivity impacts of AI use cases” and cites a memorandum of understanding with Canadian firm Cohere Inc. to explore AI deployment across government, alongside a Government of Canada Digital Talent Strategy.

Budget 2025, TBS adds, announced an Office of Digital Transformation to “proactively identify, implement and scale technology solutions” and a plan to partner with leading Canadian AI companies on a “made-in-Canada AI tool” for federal use.

Some structural proposals, however, will not move forward for now. TBS says recommendations on “establishing an independent organization to exercise a leadership function for evaluation,” “re-sequencing the Cabinet decision-making process,” and appointing a senior official dedicated full time to public service reform “are not being actively considered at this time.”