The Paul Wells Show - Michael Wernick: "There's no saviour coming"

Episode Date: October 14, 2026

Michael Wernick, the longtime senior civil servant who served as Clerk of the Privy Council under Justin Trudeau, shares his thoughts on Canada in the era of Donald Trump. "It's very different dealing with an administration that absolutely disrespects your sovereignty," he tells Paul Wells. "The people that are sort of advocating fortress North America, 'Let's hug them even more closely,' I think are deluded."Read more from Paul Wells at paulwells.substack.com

My guest today is Michael Wernick. We have to take seriously an existential threat to our very existence. That's new. And I don't think that ends with Trump. I'm Paul Wells. Welcome to the Paul Wells Show. What's it like to govern amid chaos? How does history translate to the day-to-day business of governing?

These are eternal questions. But these days, they just feel more urgent. So let's talk about all that. My guest today is Michael Wernick. He's the Yaroslowski Chair in Public Sector Management at the University of Ottawa, and he came to that job highly qualified. He was clerk of the Privy Council, Ottawa's most senior civil servant, from 2016 to 2019. Before that, he spent more than 30 years in the public service,

playing senior roles in finance, national unity, Canadian heritage, indigenous affairs, and more. He's a frequent commentator on the affairs of the nation. He's active on Substack, where we often try and, trade observations in real time, and I'm thrilled to have him here. While Welsho was presented by the Transition Accelerator, the energy transition is disrupting global power, and Canada needs to act now to secure its place in the emerging clean economy. With its rigorous, independent analysis and uniquely strategic approach, the Transition Accelerator is putting Canada on a path to win, economically and geopolitically.

Visit Transitionacceler.cairator.ca.ca.a.ca.com to learn more. All Well's show is presented by Camaco, a nuclear energy company proudly operating in Saskatchewan and Ontario for nearly four decades. Energy security, national security, and climate security are driving increased demand for safe, carbon-free nuclear energy. With Tier 1 uranium assets, critical fuel manufacturing capabilities, and best-in-class reactor technologies like the AP-1000 reactor, Camico plays a large role across the nuclear value chain to deliver power to the grid. Camico is thriving as a global leader and Canadian nuclear champion. It's meeting the moment for nuclear new builds at home and around the world. From ground to grid, Camico is powering Canada forward.

Michael Warnick, thanks for joining me. Well, thanks. I'm very pleased to be part of the reboot of the show. You were a faithful listener before? Longtime caller and listener. Bless you. We need more people like you. You got into the public service in 1981, and I saw a speech that you gave in Waterloo

where you said you were kind of grappling with the question of, is government harder now than it was then? And after some consideration, you decide, yeah, it sure is harder now. How come? Well, I would say some things stay the same or change very, very slowly and some things evolve very quickly.

from the perspective of governing or governance, which has been my field for the last little while. I mean, some things are constant. I started to describe them as firmware. You know, we have a Westminster system and a relationship with parliament. Federalism explains an awful lot of what happens in Canada. I keep saying to people, we're not Estonia, we're not Norway,

that everything important in Canada has a federalism dimension. We could talk about the voting system and what kind of government's, that gives us. And the remarkable resilience of the two old parties, the liberals and conservatives are 150 years old, and they still command about 80% of Canadian voters, which is really an outlier in political systems.

But in terms of actually governing, I do think it's a lot harder, even than when I was in the clerkship 10 years ago, and certainly when I started my career in the 1980s. And I've written and talked about, this. So some of these things are true of just about any democratic society. They're not uniquely Canadian. You know, it's fashionable to talk about polycrisis and convergence of crisis. My view is that's overdone. It was always complicated and

governing was always multitasking. There was nothing easy about the mid-1990s and all the things that were crashing in on Jean-Cretche. But the pace is accelerated. I think there's a lot less time for developing options and taking decisions and a lot less time for implementing them. So you talk about that as cycle time. But I think, you know, I would ballpark it that government's operating at about twice the pace that it was 20, 25 years ago. And so when you take those things together, you know, when governing is sort of multitasking with imperfect information, with lots of constraints, what I think has really changed is the competition for and the competition for focus by the people that we give decision-making power.

Yeah. So it's not only that everything's faster, everything's louder. Yeah, I mean, we could go on, you know, of course, about, you know, the information space and the sort of the end of the news cycle, the tsunami of social media, the fragmentation of markets and so on. But, you know, I think there are other things going on, which I wrote a piece for the OECD seem to be common traits for a lot of countries, a decline. of trust in institutions, you know, certainly politics, government, public service, universities, and so on. An erosion of rationality or reason, you know, my cohort of public servants,

you know, grew up sort of believing that better research or better facts would ultimately prevail in a policy argument. That's clearly not the case anymore. Everything is contested. And, you know, the combination of that and the sort of the evolution of technology, I was there for, you know, the introduction of the Internet, then we had social media, you know, enter the fray. Now, AI is obviously a very big factor in all of these things. And the competition to attract and keep talent is fierce, both in politics and in the public service part of government. So, you know, I just think you put all of those things together and, you know, the people that we elect now have a much, much tougher job.

And that's true at the, you know, provincial and local level as well. So I sometimes mentor young journalists. And everybody I know who fulfills that function in journalism, we ask each other and then we ask ourselves, should the advice be get out? Do you have a similar sort of first question that you have to ask when you're, when, when, when, when, when, when, when, when, when, when, when, when, when, um, when, you. A young person says I want to do a life in public service? Well, I spend a lot of time at the universities now. I drop in on other people's courses. I do hackathons with students and so on.

And I actually am gratified and encouraged to see that young people are still attracted to public service. They're looking for meaning and purpose in what they choose to spend their careers on. And so there's still a big pull to serve. and I've always had a lot of respect for people that go into partisan politics, you know, as elected officials or staffers. That's a very tough life and getting a lot harder. So, you know, anybody who wants to go in and try to make the country of the world a little bit better, you know, I'm glad to see that. My report from the front lines of the university is the kids are all right.

You know, we are still attracting really talented, motivated young people. because I hear many different reports from universities that nobody's reading, that nobody's actually producing arguments. They're using AI or they simply don't know how. At younger age cohorts in elementary and middle school attendance is in tatters since COVID. But you think that some of those concerns can be overstated? Well, I think they're real. I certainly talk to professors who are having to change their teaching methods. They're having to change their evaluation methods. I can't judge whether we're going through some big cognitive decline in Western societies.

There's certainly a lot of doom saying out there. My experience is those kinds of doom saying, doom things are always overdone. And people will find ways to respond. It is something to worry about it. concerned about. And, you know, when we look back on this period in our history and our politics, the only things that really are going to matter are the decisions that are taken about AI and climate warming. Everything else is going to look like noise 20 years from now. Unpack that. Well, these are the two big things that are going to affect our kids and our grandkids.

And there's still a chance to change the trajectory and the path we're on, both on AI, and on climate warming. And I guess I could throw in a third, which is are we gonna retain open societies and democratic government as we deal with those issues? So let's take climate because it is politically unfashionable these days. You're outside government. When you're out, you're out, you're not brought in

to make any of the big decisions that the Carney government is making. So you're just as much observer as I am. Do you think he's given up on climate because he's got other concerns that he judges more pressing? I'm a distant observer of what's going on. I think it creates a vulnerability to him because climate inexorably will continue to warm and present issues right across the spectrum of policies. I can understand why in his search for focus on a few big, things that this may have been, you know, put lower down the hierarchy. And I understand the dynamics of dealing with Alberta and some of the federalism dynamics

to it. What I would have liked to have seen is more evidence that he's backing off in the short term, but placing bets in the longer term, you know, on the energy transition and on, so maybe it's a bit of a, you know, a zig in order to, a zig-zag to move forward. And I follow it reasonably closely. I haven't seen that long-term bet being placed at this point. Okay. Let me play devil's avid.

Because I've been kind of wrestling with this question myself. Should we just all burn our copy of values, the Carney book from 2021 that seemed really preoccupied with this? And the counter argument is, if you build a new generation of infrastructure that is demonstrably more energy efficient, then over time you change the trajectory of energy use in a big cold country.

It's essentially the bet that Joe Biden was making while he was president, that you can build, you can export your natural resources and you can still get remembered by posterity as a pro-environment leader. jury's out on Biden. It sure is out on Carney. But I mean, they would say, for instance, that the Churchill, the big, you know, jumbo-sized Churchill Falls development that they announced a while ago is an indication that they're trying to build greener. Well, I think with climate warning, you know, to the extent I understand it, you've got to go to where the emissions are and unpack transportation, and unpack housing, unpack building. building materials and so on.

And what you see not just in Canada, but even in the United States and in other countries, is the market and the private sector are moving in certain directions to electrification of transport, two changes in the way that housing is built and so on. That's going to increase the demand for electricity, and we're going to go through a period of electrification in a lot of industries and a lot of sectors.

which is going to have an impact. So I'm still taken by the book from a couple of years ago about how to be a climate optimist if we can avoid some of the worst-case scenarios. I think with climate, what current generation of decision-makers can do is by time for our kids. You know, to avoid some of the worst-case scenarios,

we're going to go through 20, 30, 40 years of the effects of climate. warming, we're going to have to adapt and adjust to all kinds of aspects of that. But to, you know, to really bend the curve, to borrow an old metaphor, we have to buy some time to do that. And then, you know, hopefully our kids and our grandkids will have, you know, options with technology and methods that'll help dig out of the hole that we've created for them. You said that the, you know, the history books will judge us on climate and AI. And to some extent, whether we can retain a civil society.

This can be hard to keep in mind day to day because the neighbors are shouting at us as loud as they can. There's a, well, I think a barely rational, incredibly powerful U.S. president who's launched a harassment campaign against Canada. What do you think the effect of that is? And how do you think a Canadian government should handle that?

Well, I mean, I think I could. be dismissed as just another old guy sort of lamenting that the world I grew up in and spent most of my working career is gone. And there's many aspects of that that's true. When it comes to the United States, I think that is true. The United States that I grew up admiring, I'm an avid, you know, student and reader of American politics and history, immersed in American populous in American culture and sport, that America's gone. And the thing about Trump, who is, I think, insane. Like, I don't think that's a metaphor.

I think that's a diagnosis. And there is a short-term challenge of what to do as he has, you know, his faculties decline, his political situation changes. And the risk of him lashing out and doing very dangerous things to Canada and to the rest of the world is certainly there. But there's no savior coming. There's no fix. my view on the United States is that best case scenario is it's not going to be repaired in my lifetime. It's the work of one generation, maybe two, and that's the best case scenario.

There are others involving real civil disruption, you know, the slide into fascism. Some of the things that have been broken in America are not going to be easy to fix. So the counter argument is that we're a shrinking number of weeks away from midterms. The Democrats are going to do well, the Republicans, you know, We're going to put essentially the Trump toothpaste back in the tube. And nothing will be perfect, but all will be manageable pretty soon before Christmas. You don't buy it. No, I think that's naive.

I mean, we are still going to have the Trump administration holding the executive branch of government. We don't negotiate trade deals with Congress. Thank goodness. That's why there's a thing called Trade Promotion Authority. We don't want to be negotiating with 100 different senators. We're going to have to deal with the executive and what the executive can do in any number of areas. And I think what's probably happened over the last year is that now a fairly substantial slice of American public opinion, commentators, and politicians see Canada as an adversary or a problem

somewhere between sort of another Cuba slash Venezuela or at least a competitor. And the Trump view of trade as a sort of win-lose game is actually seeping into the way people talk about trade on both sides of the border. How so? I think you see that in the discussion that's broken out this week about should we or should we not have closer relationships with the EU is being caricatured as a sort of either or instead of, well, we can do both. We could increase exports to both the United States and Europe and be better off.

I think people have drifted off the sort of first-year economics Ricardian example where trade between two parties can make both parties better off. So what I expect, you know, with Europe, and I'm not privy to all the details, is a series of fairly practical administrative arrangements where Canadians are treated as Europeans in Europe and Europeans are treated as Canadians in Canada. they'll be fairly practical obliged. You roll them all up together, and you call that an associate membership. So, you know, we should all calm down as someone wrote. As is often the case, I mean, the people who are most invested in this current debate tend to be highly polarized.

And there are people who, I'm a little surprised by some people like me who are pro-European, but who say essentially, last Canada is going to take up with a proper society or set of societies, places that are progressive and happy and that we can leave the Americans behind. First of all, that understates really substantial democratic problems across Western Europe now. And then there's the people who say, including Pierre Paulyev and several of his conservative colleagues, in the first instance, they've they've throttled back a bit, but in the first

instance, they were talking about Europe as though it's essentially a loathsome place. Runaway immigration, the end of free speech, places where the police are afraid to go and so on. And the possibility of Europe as just a place where we can do business

and we can find common cause with parts of the populations, there seems to be almost no room for that. Well, it doesn't bode well for, you know, an edifying debate in Parliament over the next little while about what that relationship should be. I should declare my biases. You know, I'm an Americanafile, as I said. I come from English parents who immigrated here.

And I'm very much entangled with Europe. I have a German wife. My daughter lives and works in Berlin. I'm often in Europe. I have an affinity with Europe personally. But I think the point is we want to make common cause with other democratic open societies. It's a bit of a caricature, but there's a team autocrats and plutocrats and there's a team Democrats at open societies. And I'd rather be on that team.

And a core part of that for now is to be found in Europe. It's also to be found in Japan and South Korea and some other societies. and those are the countries that we want to have as close a relationship with as possible. But as you point out, like, Europe is a precarious balance. The French election, a few changes in German politics, and we could end up with a very different kind of dance partner than the one that we think we have. Is that a good argument for going slow on any kind of new relationship with the European Union?

Pretty soon the European Union might look like Le Penz. France and then off day Germany and reform Britain. Well, they're not the European Union anymore, but they're in the neighborhood. Yeah, I don't know that we, it's not clear to me that even if we had a sort of right-wing governments in Europe, that that would matter a lot to things like, you know, the research partnerships and mobility for post-secondary students. In the end, you know, this relationship, which is built on the fact that we're already in a trade agreement, were already members of the Council of Europe, we're already participants in the Organization for Security and Co-operation in Europe.

We already have a deep relationship. We're going to add some layers to it. And I suspect they're going to be very practical things that we bolt on to this relationship. I'm not sure that they would be entirely reversed. As an observer of European politics, I do kind of wonder if we are not inadvertently making a mistake, creating some new category of associate membership. And if I was Alice Vidal or Bardela in France, I might say, well, I'll have that.

Okay, so whatever Canada gets, Germany, like, that becomes a semi-Brexit for disgruntled of leaderships. I'm entirely speculating here. But the problem for the right-wing populists like Le Pen, you know, and, and, and, and, and vital and so on, is when you put to their public complete leaving the European Union, they're going to go, whoa, that seems pretty radical. But if you offer them a sort of halfway house where we're going to pick and choose, we'll leave the Euro, we'll leave this, we'll dismantle a lot of the Brussels bureaucracy,

and we'll be associate members and we'll all be friends, I think that may have some political appeal in Europe. I mean, one thing that's not getting a lot of coverage or attention in Canada, is how fraught the whole idea of a special deal for Canada is in Europe. There's a list of countries that are in accession talks. They want to become full members of the European Union. And they have the advantage of being in Europe, like Moldova and Montenegro and places like that.

And then there are countries like Norway that have a kind of an associate status, which doesn't look that attractive from here. I mean, they pay into, they pay their net contributors to the European Union, and they don't have any representation at that. the European Parliament or on the European Commission. It's a kind of a taxation without representation. And the immediate reaction in Europe to Fonder Lyon's speculation was, she has no mandate to do this.

We don't know what it means. And we've got our own problems at home. And just because Mark Carney's another pretty face, we can't shove all that other stuff aside just to flatter him. I wouldn't underestimate the value of Canada to Europe. We're a two trillion U.S. economy. We are a market. We are an important supplier. We can meet some of their needs. There are certainly opportunities for win-win arrangements. But, you know, European politics is extremely complex. The trade deal that Harper pursued and Trudeau and

Freeland brought to the finish line hasn't been fully ratified or implemented. And the test is going to come down to issues that resonate in domestic politics here and there, like what about access to the financial system? What about the foreign ownership limits on telecommunications? What about this peculiar rule you have about broadcasting? So in the end, there's going to be a lot of very practical issues that have to be worked through. And I think that there's a lot of symbolic politics on both sides that works for the current political leaders to say, we We need friends, we need allies. It's a dangerous world out there.

When you spend time in Europe, you realize you're on the front lines that the Donbass is not that far away from Berlin. These sort of escalating cyber attacks and hybrid warfare attacks are starting to unnerve European populations. So I think they also feel at a loss for a relationship with the United States that they've counted on for the best part of 80 years. And so it's understandable that they are looking out, looking for friends and looking for partners. While Welsha was presented by the transition accelerator, the energy transition is disrupting global power and Canada needs to act now to secure its place in the emerging clean economy. With its rigorous independent analysis and uniquely strategic approach, the transition accelerator is putting Canada on a path to win, economically, and

geopolitically. Visit Transitionaccelerator.ca to learn more. While Wells Show is presented by Camico, a nuclear energy company proudly operating in Saskatchewan and Ontario for nearly four decades. Energy security, national security, and climate security are driving increased demand for safe, carbon-free nuclear energy. With Tier 1 uranium assets, critical fuel manufacturing capabilities, and best-in-class reactor technologies like the AP-1000 and reactor, Camaco plays a large role across the nuclear value chain to deliver power to the grid. Camico is thriving as a global leader and Canadian nuclear champion.

It's meeting the moment for nuclear new builds at home and around the world. From ground to grid, Camico is powering Canada forward. I talked to General Wayne Eyre for another episode of this podcast. And he said, yeah, Article 5 of NATO is that one member state is attacked. all can respond. And part of the problem is it's really hard to tell when a, what constitutes an attack these days. There's sort of constant hybrid misinformation campaigns right now,

against Canada, against other countries. And we've seen 100 cases where a drone from somewhere flies where people don't want drones to be flying. And it's really hard to tell when your obligations are triggered in this domain as in many others. Yeah, so I think one of the areas that's been underway for quite some time where the European countries, the UK, or a rather distinction, in Canada, can do a lot of work together is on areas like cybersecurity, on protecting electoral systems, on what you can try to do to combat disinformation and, you know, psychic warfare sort of attacks on your society and so on. something we can share with, you know, that club of democracies and try to build greater resilience, you know, for the decade that's going forward. And, you know, I think that's an area where

we're going to part company with, you know, the major tech lords that dominate, you know, the European situation. And whatever their relationship, the U.S. government reflexively will defend the interests of the apples and Googles and the open AIs of the world. Okay, let's shift gears. Tell me, let's get started on your memoir. You came in to the public service shortly after the 1980 Quebec referendum, and you were in the group that had to deal with the approach and the aftermath of the 95 Quebec referendum.

And now we might be, we certainly are heading towards a referendum in Alberta and maybe towards one in Quebec. What do you, tell me what that was like to be working on that file, especially in around 95. Well, the risk of triggering, I mean, I've said that that year, the buildup and the referendum, and probably about a year afterwards, was the most searing and difficult experience I had in a public service career that reached nearly four decades. It was very, very stressful. And there was a real sense, particularly toward the end of the campaign, and I know you'll remember this,

that events were careening out of our control and that we could end up in the kind of scenarios that Chantelle Arbert wrote about and so on. So, you know, it was an existential battle that we ended up winning by about 54,000 votes, if I remember. And it's remarkable that so long after the fact that that has, you know, have receded in Quebec politics, that certainly wasn't what was expected

in the immediate aftermath, we thought Lucien Bouchard, arriving as Premier, was going to go for the kill in another referendum, and it never happened, which is quite amazing when you think about it. I mean, what I would say about the Quebec referendum is I was, you know, I'm proud to have played a part in supporting the Federalist team on that. But that battle waged over 30 plus years in Quebec society was basically between. very capable Quebec separatists like Levec and Parisot and Bouchard and others, who are ultimately defeated or held in check by a very capable Quebec federalist, Pierre Trudeau, Jean-Cretchen, Jean-Sheret, Daniel Johnson, Claude Ryan, and others. So in the case of Quebec, that's still going to have to be the case, that this is a battle for the hearts and minds of the Quebec public

and new generations of voters who see the world in a very different way. And in Western Canada, which I don't claim any particular expertise on, what's going to be important is Albertans with credibility who believe the futures in a United Canada have to win that argument. So it's going to be people like Harper and Kenny and Notley and Nenshi that have to win this argument. You're not seeing a lot of intervention by the federal prime minister at that point. Maybe if the polls were tighter, you'd see something different. But I think both in Quebec and Alberta, we should start thinking about the post-referendum scenarios. What is Daniel Smith going to do as a wounded Premier vulnerable to her caucus in the aftermath of the referendum? And in Quebec, we could have a very inconclusive result and, you know, a bout of supply deals and coalition partnerships

and perhaps another Quebec election, you know, in order to resolve this. People have been asking, where the hell is Mark Carney, the National Unity Prime Minister? Where are the sort of Trudeau-Kretchen-style speeches that say, you know, I was raised in Edmonton, and by God, we're going to fight for every inch? The theory that I'm toying with is we're seeing Mark Carney fight this referendum in his conduct of government. Obviously, the memorandum of understanding with Daniel Smith for a pipeline. which I really worry will at some point look like a bait and switch. Like at some point there's no pipeline and then what what was that all about, you know?

And then things like having Zelensky's Canadian visit be to Alberta. And what I think Kretchen thought he was going to be able to fight the 95 referendum on, which was a demonstration that government can work for the population that has to make the choice. and that might be a little easier in an environment where government ambition is growing, where every region of the country can win with these big projects and so on. But it's a little unsatisfying for those who remember the old National Unity Wars. Is it? I have zero line of sight to the way the Carney team thinks about this,

but I suspect your general thesis is right. There's never going to be a rational argument for either Alberta or Quebec to leave a very successful country in which people have contributed and done very well. They have to find the rocket fuel of emotion, of grievance, of humiliation, of being disrespected and so on. And they have to construct a version of Canada doesn't work in order to have any chance of succeeding. So I think, you know, at this point, I understand why the prime minister's focus would be on just taking the oxygen out of those arguments, showing some respect, listening, you know, addressing some of the areas that tend to be recurrent, you know, grievance issues in Western politics, and depriving, you know, the sort of emotional rocket fuel that might help the separatist cause. what the separatists in Alberta have going for them. And my casual sort of observation on social media is a sort of a weird blend of megapolitics

and sort of a view of Canada, which I think they're going to find out isn't shared by very many Albertans. Enoch Powell wrote that all political careers end in failure. You've seen that happen a few times. First of all, talk about what that's like in the room, a prime minister who was walking on water and is suddenly embattled. And then we'll talk about the current case.

Well, I think that's true. I mean, I'm more or less in the camp that says all governments defeat themselves. I think what you see in opposition tactics, even against an initially popular government, is they try to inflect as many razor cuts as possible and hope the government bleeds out, looking for issues around competence, frugality, integrity, hoping to find a gusher of a scandal somewhere. And then gravity kicks in, people get bored and tired.

You know, initially, you know, popular leaders like Tony Blair or Justin Trudeau or Brian Moroni end up leaving, you know, being more dislike than not. You're just governing, especially if you make tough choices, you build up scarch issue from the people that were unhappy with those choices. So I think, you know, the Carney government will come to an end. He may leave, you know, walking on his own feet like Brian Moroni did or he may be defeated. So for me, the interesting question about the Carney government and observing it from a distance is, wow, he's accumulated an awful lot of political capital.

And rather than sort of pick apart, how did he do that and does he deserve it, I'm very interested to see how he's going to spend it. And in some ways, I think we'll find out that Carney is a lot like Brian Moroni, who spent a lot of political capital on big bets, you know, sales tax reform that wasn't popular, free trade agreement, which, you know, was very divisive, constitutional reform. So I think you're seeing the Carney government, you know, similarly ambitious. What will tend to catch up with governments is delivery and execution and competence. kinds of issues over time.

That's what I've been writing and nagging about is spend some, you know, a time and attention on capacity and delivery and execution, you know, it's time to sort of retool and revamp, you know, some of the public service side of government. It's not something they've shown a lot of interest in yet, but, you know, they may get to it. But they're going to, you know, even starting from the politics end, they're going to need trophies and proof points and delivery.

to say, you know, we said we do these things and we're clearly moving forward. They're starting to accumulate a few of them. But that's going to, you know, that's going to be the tests, you know, for the next year or so. I would say, of all the things they committed to, the one which is the biggest risk for them is doubling the rate of housing construction because they have so little control of that as a federal government. And what you see in a lot of countries is young adults, young families are very volatile political constituency ripe for the taking by populace. And I think that that is a vulnerability for the current government. You can call it affordability.

But a lot of people are preoccupied in particular is access to housing. access to housing and and the cost of living more generally. I mean, Paulio sometimes talks about the diversity between the have-nots and the have yachts. And I actually think he's got quite a sturdy point there. There are people who are living not at all quiet lives of desperation in Canada right now.

And an investment summit in Yorkville with a bunch of pension fund managers of trillions must look very strange to people who are really not sure how they're going to pay next month's bills. Well, I'm sure that's true, but what's going to matter in the end is whether anything that happened this week pays off in investments and projects and, you know, the creation of economic activity and jobs and incomes for people and the sort of lifting of all boats, you know, through bringing the economic growth rate up,

which is something all governments aspire to. So we're in choppy waters because of the trade environment and we're going to see major disruption of industries and professions through AI. So there's not going to be anything easy about increasing the rate of growth or spreading the wealth. But Canada still has a reason. large and healthy middle class, which a lot of societies don't. And I think one of the factors in

whether, you know, we keep a sort of stable democratic politics is whether that, you know, that continues to be the case for another generation. I mean, the best, the best explanation for the fact, the astonishing fact in France that Marine Le Pen now looks likely to win in the second round, she looks likely to win the presidency, no matter who runs against her, is that the President. is that people tried all the reasonable solutions and they didn't work. So they're going to try some unreasonable solutions. Yeah, I think that's true in Europe. You know, I watched German politics very closely.

And, you know, the numbers are very clear that the old parties are the parties of older cohorts and younger generations are split between sort of far left and far right options, both of which are basically saying, you know, the system doesn't work for you. It's not inevitable that that happens in Canadian politics. I mean, one thing you could say about the Kearney agenda, whatever you think of it is, it's not clear what the alternative is. There aren't a lot of other ideas out there on offer. The sort of old, orthodox, conservative economics,

smaller government, lower taxes, animal spirits in the market, government shouldn't pick winners. It doesn't really have much to say to what we're going through today. what we're going through today. And the sort of the left part of politics has kind of gone deep down into identity politics, which doesn't offer any solutions either. So I think basically this is the path we're on, trying to build a little bit of resilience in a, you know, in the turbulent world,

find sources of growth and prosperity where we can is really the only path we could be on other than sort of drift and passivity. So one alternative is just suck it up. Admit that the current administration in the United States is a little erratic, but the line that says we're never going to move Canada away from the United States. They've been our closest neighbors and our protectors forever. Let's just keep our dime on that spot and ride out a rocky relationship with the United States, but admit that's going to be the main relationship.

Well, I think what's changed is we have to take seriously an existential threat to our very existence. That's new. And I don't think that ends with Trump, you know, whether you can go through all the scenarios of whoever is going to be in charge next. But I think, you know, you cannot play the game the way that the last four or five or six prime ministers have, which is you try to have the best parts of a close relationship. with the American economy and security blanket, but keep some distance and keep your options open. You know, that's something all prime ministers have pursued over the last 50 years. It's very different dealing with an administration that absolutely disrespects your sovereignty. And so, you know, I think that's changed. And it's changed the attitude of a lot of Americans.

It's changed the attitude of, you know, most Canadians at this point. The people that are sort of advocating Fortress North America, let's hug them even more closely. I think are diluted. Okay. We skip lightly past your governance concerns. First of all, I think it is true that this government, Kearney government, views itself as a crisis government

and doesn't have time for structural reform because that is going to be a gigantic time suck. Everyone in the public service, morale in the public service is rock bottom at all times. And that is, and that is, is often perceived outside Ottawa as Ottawa naval gazing of a kind that people don't like. What's the counter argument? Well, I'd remind people about 60% of the federal public services not in the capital region.

They're out there in communities all over the place, you know, in a whole range of professions. This sort of return to work, offices in Ottawa part of the public service is a very small part of the overall public service. I think the Carney government would tell you they have done some important workarounds. They've created new entities and brought new people in for the things that are important to them. So there's an array of new institutions from Build Canada homes to the major projects office to a defense procurement agency. So they're placing a bet that that will improve outcomes in those areas. The theory I hear from my little bit of contact with people that work in the service is that Essentially, we have two-speed government right now.

If you are involved in the core issues that matter to the government, and the people that say why you shouldn't, you know, the government should focus on fewer things are getting their way right now. If you're involved in energy or investment attraction or trade or housing or defense procurement, you get all the attention you could ever want and more. But if you're managing almost any other file, it's hard to get your calls return or to get direction, and you are starting to see other files seize up and slow down.

And that's another price the government will pay. Their ability to multitask and make sure that the people that care about these other files are getting at least some attention is going to be part of their challenge. What they haven't done, and this is what I've done a lot of writing and talking about, is take on the public service as a whole. to tackle some of the structural issues to, you know, to make it better and more effective. If not now, when are they going to do it, I guess would be my point. You know, if I was giving advice, I'd say take one of your four or five most talented

ministers and put them in charge of this. I mean, I, Ali Assashe was the minister for governance reform in the first Carney government, and he got to exercise that, or no, for like, for democratic overhaul or making everything better or something like that. And he got to exercise that function for a few weeks before the election call. And now he's no longer that minister. And I thought this is something I've seen before where the government announces that it's going to take on a major challenge. And then suddenly it's really hard to find any interest in that challenge.

And yet the challenge is still there, right? I mean, yeah, I think there are a couple of explanations. As I said, you know, the competition for focus and attention is fierce. and it's always an issue in politics of you move on to the next thing. Once you have made your announcement and moved it on, there's always a drop in attention and focus to almost any initiative. So that's inevitable, and you have to try to sort of find feedback loops

that keep your attention and focus on it. And basically, like, state reform doesn't have a lot of political upsides to it. You're run into a lot of resistance. You're going to run into issues. the unions and stakeholders and people that are vested in the status quo for very little upside return. But if you don't, you're going to pay the price in the slow decline of the kind of services and programs that Canadians see. And there's a fiscal argument for trying to get the most we can. You know, the public sector, both federally and provincially, you know, it costs a lot of dollars.

going to be chasing health care and pensions for an aging population and the kinds of investments in an economic agenda we've been talking about and a doubling of defense spending, then you know, reasonable finance managers are going to look for some kind of efficiency and productivity and say, I'm going to try to make sure that the dollars I spend on running the state are put to the best possible use. You know, we haven't had a serious tapping of the breaks in government since, you know, the Harper-Flarity budget of 2012 and nothing on the scale of the Kretchen Martin program review. I'm not the only person arguing that, you know, it is time for that. I guess what I've said in my writings, though, is you can't just take the existing system and

squeeze it by 10 or 15 percent and expect that to produce enduring gains in performance and productivity. You have to go under the hood and look at the plumbing and the wiring and the structural issues. Because if you cap the public service or cut everything by 3%, first of all, the most mobile people leave, and so that the people that you wish would stay tend to be the ones who leave. And secondly, those aren't choices. Like that isn't getting rid of what doesn't work. It's cutting into what probably does work because it's the next thing to cut.

Well, yeah, I mean, I'd phrase it, I agree, but I come from a different angle, is all of those people are being asked to do work. And you can't really make change unless you change the volume and the nature of the work that we're asking the public service to do. So I would prefer you work backwards from this is what we think the state needs to be doing in the years ahead. Do that as well as you can and cut back. The effect of what's going on right now, as far as I can tell, is you're asking the same volume of work. more in some cases because of the urgency on a smaller workforce. So if you don't invest in training and technology and tools

and really go at the sort of, you know, the sclerotic processes and structures, something's got to give. We were chatting going back and forth before this recording session and you said that you had read Doris Kearns Goodwin's memoir of the 60s recently and that it left you just in a bad place. come? Well, I think that's my grieving for lost America. And the most acute way to feel that loss is to read about the America of the 1960s and the possibilities and the optimism and the ambition of the Kennedy of Johnson years. And Doris writes about that in her book, an unfinished love

story. So, I mean, it's a starting point, but it's a starting point. But it, it's a, it just reinforces a sense of loss that that America, that people around the world have admired and seen as a beacon, an imperfect one, but certainly a beacon that inspired people to risk their lives in the streets of Tehran or Beijing or other societies, if that's fading from the scene, then we're all going to be worse off. And I just feel the sense of, grieving, you know, for the America that's gone. Back to the first question. I mean, is this a, this is not an inspiring landscape in which to be setting out into

the world to try and make a difference. Get in there and start bailing is kind of the instruction to almost any rookie public servant. And, you know, the grand old days of Brooke Claxton and Paul Martin, senior, 80 years ago, that, like, that, that, that, that seems like a lost civilization almost. Yeah, well, it was a civilization of white males of a certain sort of educational and social background. I have no nostalgia for to go back to those days. No, I think that there's still evidence that in Canada and in many other places, young people emerging into their adulthood want to find meaning and purpose in what they do and where they work.

And there's many different ways to do that. And some will go into, you know, electoral politics, some will go into business, Some will form NGOs. Some will become community organizers. And some will decide to go into various forms of public service, from the military to the Coast Guard, to the civilian parts of the public service. So I think what the public service will always offer

is that it's a direct channel to make a difference to your community and your country. Good note to end on. Michael Wernick, thanks for joining me today. Thanks for asking me in. Thank you to my presenting sponsor, the Transition Accelerator. Visit Transition Accelerator.ca to learn more. Thank you to my presenting sponsor, Camaco,

a global leader and Canadian champion in nuclear energy here at home and around the world. Camaco is powering Canada forward. And that's the Paul Welles show for this week. Remember to tell your friends about this podcast. Like and subscribe this show on your favorite podcast platform. You can watch these interviews on my YouTube channel, and you can find all of my writing, including new articles and a complete archive at Paul wells.substack.com. Thank you to my presenting sponsors, Camaco and the Transition Accelerator, for making all of this possible.

And thanks to you for listening. Have a good week.