The centrepiece of my undergraduate public management course is a budgeting simulation in which a group of ministers and public servants either divide up a fiscal windfall or allocate a collective budget cut. A manual for this simulation is to be published by the IPAC Case Program, but has been forthcoming for quite some time.

This year, we anticipated the March 22 federal government budget by allocating a $6 billion dollar infrastructure fund for the 2016-7 fiscal year, with priorities of public transit, green infrastructure, and social infrastructure. I divided the 34 students in the class into 14 program department teams consisting of a minister and deputy minister and two central agency teams, the Prime Minister and her chief of staff and Minister of Finance and her deputy minister. The program department teams were required to submit 5 page written proposals (with technical appendices) for new programs to be supported by the infrastructure fund. A few days later, the Prime Minister and Finance Minister would lead a cabinet discussion about which of the proposals to fund.

Despite the large number of roles involved, the simulation worked very well. By that I mean the students learned a considerable amount about public sector budgeting, and they also managed a decision-making process that led to reasonable outcomes. They have my congratulations — and the grades that attest to this assessment.

I’ll summarize what they did well, looking first at the program departments and then the central agents.
The best of the program department teams read their department’s Report on Plans and Priorities carefully, and then found something new that wasn’t already in the plan for the 2016-17 fiscal year. The Veterans’ Affairs team developed a program to build 1500 units of housing, in 60 low-rise complexes throughout the country, to house homeless veterans free of charge while receiving rehabilitation services. The team also worked up a detailed and credible estimate of the cost of its program, both in terms of initial construction and ongoing maintenance and support.

In one case program departments created an alliance: Indigenous Affairs and Natural Resources proposing a collaborative initiative to improve energy conservation in aboriginal or northern communities.

At the Cabinet meeting, ministers spoke passionately about the strengths of their proposals, including their political implications for the Trudeau Government, and also criticized other departments’ proposals.

The simulation included a two-hour Cabinet meeting conducted during regular class time but in a boardroom rather than the regular classroom. The PM and Finance Minister teams handled the meeting effectively in several ways. Before the meeting, they made their priorities clear. They sent the program departments the agenda for the meeting in advance, including a 2 minute constraint on introductory statements. Rather than having every department present its proposals and then discuss them all, the PM and Finance Minister established five groups of related departments and opened up discussion after the departments in each group made their presentations. They ran the meeting efficiently, keeping comments short and to the point, and then moving on to the next group of departments.

The PM sought input about the proposals, but made it clear that she would make the final decisions, which were released in a memo a few days after the cabinet meeting. Natural Resources Canada made a proposal – that was opposed by most of the other departments – to subsidize the oil and gas industry in this period of market turmoil. The PM decided to define a consensus that overruled the majority, reasoning that it was important to use the opportunity created by the election of four Liberal MPs in Alberta to expand support there. In my view, the Prime Minister and her chief of staff, aided by the Finance team, made wise decisions.

All this is not to say that the students couldn’t have done better. Some program departments didn’t define their proposals very clearly or cost them out very well. There could have been more interdepartmental alliances. In presenting their proposals, departments could have developed narratives about program recipients. A story about a homeless veteran who turns his life around with the help of counselors at one of the new housing complexes could have been an exemplary and moving policy narrative.

The simulation involves much more work for me as instructor than simply lecturing about the budget process. The workload includes designing the specifics of the simulation, which change from year to year, assigning teams that as much as possible satisfy student preferences, advising the teams in numerous emails and phone calls, and then grading the written assignments and debriefing the students. That said, after many years of running these simulations, I find myself completely in agreement with Confucius’s maxim, part of which served as rubric for this post:

I hear and I forget. I see and I remember. I do and I understand.