Canadian Public Sector Better Prepared Than Most for Challenges Ahead

    Should Adapt to Continue Providing Services: KPMG

    TORONTO, Aug. 11 /CNW/ - Canada's public sector is better suited than
many of its foreign counterparts to make the changes necessary to survive and
thrive in the current economic downturn, according to a KPMG International
survey entitled The Wolf is at the Door.
    The survey demonstrates that governments around the world are facing
challenges of how they will provide key services to their citizens. The
economic downturn and aging populations are all factors having profound
effects on the public sector. These factors are likely to put more demands on
the public sector than it is presently seeing, but provide it with fewer
resources with which to meet these demands.
    Canada, the survey notes, has one or two years to draw up plans to change
its business models to ensure its ability to continue providing key services
during the difficult times ahead-without compromising on the quality of those
    Other countries, particularly the UK and the United States, face greater
challenges; these governments have borrowed heavily to bail out banks and
manufacturers, and to finance fiscal stimuli.
    KPMG International surveyed 124 government decision makers in six
countries-Australia, Canada, Germany, the Netherlands, the UK, and the United
    "We have never witnessed a time like this when so many countries have
shared similar long-term challenges," said Craig Fossay, a Partner in KPMG's
Government Sector practice. "Governments in Canada need to implement cost
savings initiatives and performance measurement programs that will enable them
to make tough decisions to create the healthy economy that we want and need in
the future."

    Other key findings of the survey are:

    -   Sixty three percent of global respondents are unlikely to change
        their strategy in the next year as a result of the current global
        economic downturn
    -   Eighty one percent of Canadian respondents are unlikely to change
        their strategy in the next year as a result of the downturn
    -   Sixty percent of global respondents are making long-term changes to
        try to put their organization in a good position for the next decade
    -   Fifty two percent of Canadian respondents are making long-term
        changes to try to put their organization in a good position for the
        next decade
    -   A quarter of global respondents are planning to change the
        eligibility criteria for the services they offer
    -   Only five percent of Canadian respondents are planning to change
        their eligibility criteria.

    "The economic downturn has to be seen as an opportunity for the public
sector to reflect on traditional ways of thinking and acting," said Astrid
Göbel, of KPMG in Germany. "There are many examples of challenges like this
generating new ideas and solutions."
    How are public sector organizations planning to cope with this reality?
Only 20 percent of global respondents indicate they are making radical changes
to their organizations and are planning to change their business or service
delivery models; however:

    -   Seventy seven percent of global respondents are planning to increase
        their productivity-to offer the same services at a lower cost
    -   Forty three percent of global respondents are planning to change
        (though not necessarily reduce) the range of services they offer.

    Public sector organizations are complex and face certain statutory
requirements to provide services. While private sector companies have the
option to stop manufacturing products that are no longer profitable,
governments don't always have that option. Once the public gets used to
receiving a particular government service, it is very difficult to just stop
providing it.
    "It makes sense not to do something yourself that somebody else can do
for a third of the cost," said KPMG's Craig Fossay. "For example, some
governments have public private partnerships and have outsourced routine
transactional activities."
    Governments and public servants in Canada have the opportunity now to
plan and implement the reform necessary to put the public sector in a good
position to face the next decade.

    About KPMG

    KPMG LLP, a Canadian limited liability partnership established under the
laws of Ontario, is the Canadian member firm affiliated with KPMG
International, a global network of professional firms providing Audit, Tax,
and Advisory services. Member firms operate in 144 countries and have more
than 137,000 professionals working around the world.

For further information:

For further information: or to arrange a media interview, please
contact: Mark Klein, Manager, Media Relations, KPMG,, (416)
777-3895; Julie Bannerjea, Senior Manager, Media Relations, KPMG,, (416) 777-3243

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