Sept. 4, 2026    |  Sign up + past editions    |    Unsubscribe  

Hi all, 

The Ministry of Magic. That’s the inside nickname some public servants have been using while waiting to see what Digital Transformation Canada would actually become. The new federal organization launched this week.

Now the magic is supposed to begin.

The new organization brings together pieces of various departments under a new high-powered leader from the private sector: former Google CFO Patrick Pichette. Its mandate is ambitious — modernize how government develops, buys, and uses technology, and finally cut through decades of duplication and fragmentation.

The big question is whether it can conjure the co-ordination and authority to drive the digital-government agenda and fix the machinery many argue has held it back.

Let’s dig in.

Today:

Unicorn on the move: Scott Jones goes to CSE.
Too many, too much: Digital government’s problem.
Two decades of trying: It started with the one-stop shop.
And the plumbing?: Will it be fixed?
The first crack: If a star appointee won’t stay….

An AI version of the more storied Ministry of Magic from the Harry Potter series.

THE MODEL
It’s all very corporate

There’s been plenty of hand-wringing and debate at the centre over this one. This is the biggest retooling and shake-up of the government’s stalled digital agenda. It could be the transformation – dare we say it? – that starts running government like an enterprise.

A couple of models have been on the table for discussion over the past several months. The announcement has been set to go and delayed several times.

The ambition is big. So is the debate over where to put the muscle to make it happen: TBS, PCO, or Shared Services Canada (SSC). So far, it's not being called a department or an agency, and Pichette isn’t a deputy head or a president. He’s a CEO. A corporate title. Very C-suite. Right now, it looks like a souped-up Shared Services, or, as one senior bureaucrat put it, “SSC plus.”

Patrick Pichette at the Liberal Party of Canada convention in Montreal in April. THE CANADIAN PRESS IMAGES/Graham Hughes  

Is Pichette a de-facto CIO? Shared Services Canada and the Canadian Digital Service will be rolled in and many expect they’ll be fully absorbed. DTC is also pulling in “selected functions” from TBS, PSPC and Service Canada at ESDC, though what that means in practice is still unclear. Also unclear: what happens to the position of chief information officer at Treasury Board. It has sat empty since March, when Dominic Rochon moved to PCO as deputy secretary to the cabinet for national security and intelligence.

Buy Canadian, grow Canadian tech. The new organization reports to Joël Lightbound, minister of Government Transformation, Public Works and Procurement. He has promised to use digital technology to strengthen Canada’s sovereignty and its tech sector to help local companies grow and compete globally.

The digital unicorn heads to CSE. Scott Jones, president of Shared Services Canada, is heading back to the Communications Security Establishment, Canada’s cyber agency, where he has spent much of his career. He replaces Caroline Xavier, who is set to retire as chief.

There has been plenty of speculation about SSC’s fate in all this, and whether Jones would stay or go. One senior official calls him a “unicorn” in the public service: a “world-class digital leader” in a system that doesn’t have many.

WHAT’S MISSING
The power problem

Digital government in Canada has been stuck. Its governance is highly fragmented. Too many departments have a hand in it. Too many systems, too many procurement processes and pockets of expertise scattered everywhere. No one holds the power or authority to force change and make it all work as one system.

“There’s no organization on the planet that would centralize all of those in one place,” as one former senior bureaucrat put it.

But infrastructure is just as big a problem, with outdated wiring and plumbing that government has been slow to modernize. It still relies on legacy IT systems, old servers and an unwieldy patchwork of software built up over decades. Similarly, others argue that many HR rules and collective agreements still reflect a pre-internet era and need updating.

“It all lives together like some weird Frankenstein on old ancient machines,” said one long-time bureaucrat.

A longstanding issue is that the CIO can set rules and standards but doesn’t actually manage the department CIOs. They report to their own deputy ministers.

Before the announcement, there was speculation that Digital Transformation Canada might change that, adopting a model like Justice Canada’s, where government lawyers work inside departments but belong to a centralized legal service. There’s no mention of that in the announcement.

The problems are reflected in Canada’s dismal standing in the global e-government landscape. Twenty-five years ago, Canada was a poster child for e-government.

Fifteen years ago, we were third in the UN rankings. Now we’re 47th out of 193.

That’s not the ranking you’d expect from a government that says it’s on a wartime footing to rebuild the economy.

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20 YEARS ON
New machinery, old problem

Canada’s digital agenda is sputtering after 20 years of new machinery meant to fix it.

Service Canada opened in 2005 with a vision of a one-stop shop for government services. Shared Services Canada, the agency that runs the government’s IT plumbing and wiring, came six years later. By 2017, the Phoenix fiasco was in full flight. Partly out of that came the Canadian Digital Service, a SWAT team of tech geeks dispatched to fix specific problems and show departments how digital could work.

CDS set up shop at Treasury Board at a time when digital was full of possibility and politically ripe after Phoenix. Then-Treasury Board president Scott Brison took on the title of digital minister and elevated his disruptor CIO, Alex Benay, to deputy minister, giving the job more clout to remake how government did digital.

It didn’t last.

CDS was moved to Service Canada in 2023 to support the Trudeau government’s first minister of Citizens’ Services, a cabinet post Carney scrapped. Critics say it never fully lived up to its potential there.

CDS is Canada’s answer to 18F, the U.S. digital services team the Trump administration eliminated as part of the DOGE cuts. CDS has avoided that fate. Now it’s being folded into Digital Transformation Canada, where some argue it could be supercharged and given new life “on steroids.”

Bold move, but devil is in the details. “We’ve had years of trying new things in digital, and it hasn’t been enough,” said digital expert Ryan Androsoff, a vice-president at the Institute on Governance and one of the co-founders of the Canadian Digital Service.

The creation of the new organization is the biggest shake-up of the machinery of digital government in 15 years.

“My first impression is that this is a good thing. Canada has long suffered from a very fractured digital governance landscape, and this is the boldest move by far in a long time to pull all those pieces together in one place.”

Ryan Androsoff

But “the devil will be in the details,” he warns, particularly how the organizations are merged and managed, and whether TBS retains its policy and oversight functions for digital and services.

Here’s reaction from another CDS alumnus.

But back to Androsoff, who pointed out: “This government has often chosen to work around the public service with new institutions instead of trying to fix the plumbing of government itself. I think that's the big question now on digital: are they actually willing to fix the plumbing?” he said.

“Is this going to be a mechanism to do that, or is this another approach where they build something new to work around what they view as public-service infrastructure which isn’t working as well as it should?"

Androsoff is right.

MEET… THE WALL
When new machinery hits old machinery

The Carney government has a habit of building more machinery when it can’t make the existing machinery work the way it wants. The prime minister and his right hand, PCO Clerk Michael Sabia, have made little secret of their frustration.

They think the bureaucracy is too slow to deliver, and they have a priority list they want delivered fast. The answer has been to bypass the public service. A new agency and a heavyweight outsider to run it. Major Projects. Housing. Procurement. Defence Investment. Now digital.

The first crack in the pattern of new agencies came lately, with reports that Doug Guzman is set to step down.

Guzman is the star recruit Carney brought in a year ago to head the Defence Investment Agency and speed up procurement as the government ramps up spending on the military and Coast Guard.

Doug Guzman (rear) with Carney at CANSEC, the annual defence-industry trade show of the Canadian Association of Defence and Security Industries, in Ottawa, May 27, 2026.
THE CANADIAN PRESS/Justin Tang  

He was deputy chair at RBC and, like Carney, spent part of his early career at Goldman Sachs. He took a considerable pay cut to make the move. Even so, his reported salary of between $577,300 and $679,100 is more than any deputy minister earns.

Here’s a prime ministerial pick brought in to do things differently, and he, too, is hitting the bureaucracy wall. It raises a pretty basic question: how well does this model work when the new leaders run into the old machinery?

“He was a star appointee,” said one long-time bureaucrat. “If people won’t stay in the job, that kind of undermines the model.”

Which brings us to Pichette.

He spent seven years as Google’s global CFO from 2008 to 2015. He played a leadership role in the company’s growth and supported the creation of the Alphabet structure. He was involved in close to 150 acquisitions. He later chaired Twitter’s board, joined Montreal-based venture-capital firm Inovia Capital and was a director at Cohere, a Canadian AI company.

He’s stepping in at a time of massive churn in digital leadership across government.

But job cuts, the push to delayer, the lure of new jobs and ERI’s penalty-free early pensions, plus ordinary retirements have dramatically thinned the ranks of the government’s most digitally literate leaders. It gives the government an unusually clean slate to bring in new blood and rebuild digital leadership.

Along with Scott Jones, Dominic Rochon and Caroline Xavier, others who have left or moved on in recent months include:

Cliff Groen, who has retired as ESDC’s associate DM and chief operating officer at Service Canada.

Raj Thuppal, executive VP at Shared Services, has moved to become Chief Digital Officer Public Sector Canada at ServiceNow.

John Ostrander, associate DM, benefits delivery modernization at ESDC, is now in the Ontario public service as DM for public-service renewal and lean excellence.

Stephen Burt, Canada’s chief data officer, is now associate DM of strategy, AI and data at Ontario’s Ministry of Public and Business Service Delivery and Procurement.

Alex Benay, former CIO and associate deputy minister at PSPC leading enterprise pay – the HR-and-pay system to replace the troubled Phoenix system – is now a senior vice-president at OpenText.

Taki Sarantakis, president of the Canada School of the Public Service and a key architect of the Digital Academy at the school, has retired.

The new organization will recruit outside expertise through a fellowship model, bringing in specialized private-sector talent for short-term assignments, including in AI, while transferring that knowledge back into the public service.

Two other potential recruiting pipelines include: an interchange program proposed in budget 2025 to bring 50 outside leaders in tech, finance and other fields into government. And something called the Prime Minister’s Innovation Fellows Program, proposed in the government’s AI strategy. It would bring in technical talent, particularly around AI.

Lots to watch.

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A bit about me. I write The Functionary as part of my work covering and analyzing the federal public service for Policy Options, where I am the Accenture Fellow on the Future of the Public Service. I've reported on the public service for more than two decades, covering parliamentary affairs and politics for the Ottawa Citizen and iPolitics. My work has been recognized with a National Newspaper Award and a Canadian Online Publishing Award.