Last week, news broke that Michael Sabia, Deputy Minister of Finance Canada, will be stepping down from his post to assume the role of CEO at Hydro-Quebec. Sabia was appointed to the role of Deputy Minister in December 2020. Many consider the position one of the most important civil servant posts in government, working closely with the Minister of Finance to develop the yearly federal budget, amongst other responsibilities. Sabia’s appointment to the top job at Hydro-Quebec has sparked questions regarding whether he has the right expertise for a role in the energy sector, with some raising concerns that he is not nationalist enough for the prominent Quebec role. The motivation behind Sabia’s departure from the federal Finance department is a topic of interest, as it may have implications for both the Department of Finance and the broader governmental landscape.
Sabia has had an impressive career in the federal and Quebec public service and has held prominent roles at Canadian National Railway (CN), Bell Canada Enterprises, and Caisse de dépôt et placement du Québec (CDPQ). He played a pivotal role in CN and Bell’s privatization deals, although the latter fell apart due to the 2008 recession, and received praise for revitalizing the once-struggling CDPQ. His wealth of experience made him a valuable asset to the Liberal government, and he has been a fixture within the party’s orbit since the Trudeau government first won in 2015. Notably, he was appointed as one of the 14 members of an economic advisory council formed by former finance minister Bill Morneau, served as chair of the Canada Infrastructure Bank, and reportedly communicated regularly with Trudeau and Minister of Finance Chrystia Freeland throughout the pandemic.
Sabia’s appointment as Deputy Minister of Finance came at a moment when the government was under pressure to get Canada’s economy through the pandemic recovery without heavy scarring. By many accounts, his role was meant to be temporary. However, his tenure has not been without its challenges. His early progress was criticized, with insiders saying he was unsuccessful in delivering an economic-growth agenda and curbing spending. However, the same insiders also acknowledged that he was operating in a political environment inconducive to doing so. Sabia oversaw the delivery of three budgets that included multi-billion dollar support programs for individuals and businesses, as well as ambitious innovation programs such as the Canada Growth Fund and $10-a-day childcare.
But the most interesting aspect of Sabia’s departure may be as a sign of changes to come to a government that has been in power for nearly a decade and is lagging in the polls. It has become clear that the government is in need of a reboot and a reset. One could imagine Sabia’s departure leading to a bigger deputy minister shuffle across government. There have been rumours of a Cabinet shuffle, or even a prorogation, all of which would allow for the government to reflect on and reassess its priorities and undergo a refresh – and chart a revitalized path forward. All of this, of course, comes against the backdrop of uncertain timing for the next election and continued fears of a recession.
This tumult may be why Sabia has decided to leave. While he has not spoken publicly about his reasons, speculation from insiders ranges from the desire to get a head start in pursuing new opportunities outside of government, suggestions he saw the writing on the wall and had no interest in sticking around for the fallout, dissatisfaction with the Liberals’ fiscal policy direction, to simply being ready to return to Montreal at a pretty solid landing spot post government. While we may never know his motivations, his departure is a useful reminder of the evolving dynamics within the senior ranks of the government.
Sabia’s farewell means the loss of a valuable asset to the Liberal government and may signal further changes to come. Until then, we will certainly be watching out for the impacts of his exit.
