Government Operations Committee on Dec. 8th, 2011

[John McCallum, Liberal, Markham—Unionville, ON]

—or five.

[Grant Westcott]

Mr. Chairman, could I try to answer the question?

[The Chair, NDP, Pat Martin]

Briefly, if you would. We're running out of time.

[Grant Westcott]

We've committed to deliver savings for our deficit reduction targets of 5% and 10%. At the same time, we've also found savings that will fund the e-mail project in years one, two, and three. The e-mail project starts to yield net savings in years two and three, and the bulk of the savings comes in year four. We've in fact funded it from our existing base, built a brand new e-mail system, and delivered the savings by year four, so the government benefits from that activity.

[The Chair, NDP, Pat Martin]

You're well over your time, John. Thank you.

Now, for the Conservatives, Kelly Block, you have five minutes, please.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Mr. Chair.

I would like to join my colleagues in welcoming you here, Minister, as well as Mr. Westcott and Madame Forand.

I've listened with interest to the opening remarks about this new project, as well as the questions that have been asked. I know my colleagues on this side have focused on e-mail and data centres. What I'd like to do is just ask about the networks that link all of these e-mails and e-mail systems and data centres. Can you tell us more about the status of the networks?

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Sure, I can. That's a big component to this undertaking.

Across the federal government there are more than 3,000 overlapping and uncoordinated electronic networks within and between departments and agencies. As Shared Services Canada streamlines and renews data centres, it will also at the same time be streamlining the networks that link data centres together. This will lead to further efficiencies and savings.

In addition, many government buildings house several departments. Instead of having one network for one building, each department has its own network. For example, Place du Portage in the national capital region, the Dominion Building in P.E.I., Canada Place in Alberta, and the Guy Favreau Complex in Quebec all have several departments and several different networks. The Guy Favreau Complex alone has nine different networks. This is inefficient and it's difficult to maintain.

The government can obviously save money by building networks once and by serving many departments at the same time. Through consolidation of these networks, we will also be able to provide a higher degree of security. Having an organized and coordinated system of electronic networks means it will be easier to detect and address security issues. That's one of the overarching reasons the Auditor General pointed out for moving ahead with this.

When we look at our aging IT infrastructure, there are concerns about cyber attacks and the security of our information, which is obviously key to delivering services to Canadians, and it's also important that we keep that information safe for Canadians, to safeguard that information. That's another reason why we have to move forward with this project. We have to move forward with transforming the way we are managing our networks, our e-mail system, and our data centres right now.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

I'm glad you mentioned that. That's a great segue into another question I have. The Government of Canada's IT structure has been a target of cyber attacks in the past. I'm just wondering what impact consolidation will have on the security of government IT systems.

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

The consolidation of services and assets will strengthen our efforts to ensure that government IT infrastructure is reliable and secure. By reducing the number of diverse e-mail systems, data centres, and networks, and by ensuring that security is built into any new infrastructure from the outset, the Government of Canada will be in a better position to deal with cyber attacks. Furthermore, our government stays committed to ensuring that online transactions are secure and that Canadians' personal information is protected.

The creation of Shared Services Canada builds upon existing programs and steps that have been taken to date—by reducing the number of diverse e-mail systems, data centres, and networks and by ensuring that security is built into any new infrastructure from the outset. It's obviously something that's on the minds of a lot of Canadians because they worry even in their own homes about the security of their e-mail systems, the security of their data. One way to think about it is to consider your home and how many doors and windows you have in your home. The more doors and windows you have, the more you have to secure them. It's all about access points—how many access points there are for potential cyber attacks. When you think about the fact that just one department has nine different networks, and you think about the number of access points into those systems, it's not difficult to understand why we need to consolidate and why we need to look at strengthening our efforts and our infrastructure so that it's more reliable and it's more secure.

Are there any comments either of you might like to make?

[Grant Westcott]

I think you've covered it well.

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Well, there you go.

[The Chair, NDP, Pat Martin]

Right on your five minutes, Kelly. Thank you very much.

That concludes our first round.

If I might take the liberty of one observation and one brief question, it seems the PricewaterhouseCoopers report could be wildly optimistic in its saving, and it could be wildly inaccurate in its cost projections. The only thing we know with any certainty is that massive IT projects like this are never on time and never on budget. Usually the costs explode.

Why do you think this outside group's analysis of our internal IT is accurate? How can you trust it?

I also worry about the contracting out of the work. Are we not going to be contracting out the expertise and the knowledge of the reworking? Isn't that a concern—from a security point of view and an ongoing maintenance point of view—that we may not have the internal expertise left once all this work is done?

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Quite the contrary. We have a lot of internal expertise that will work with us and guide us in this transformation, and will participate as we move forward. As I indicated early on, and as Liseanne mentioned, employees who work in this area are excited about this transformation and to participate in it. These are the people who are working with this aging IT infrastructure and they are the ones fixing it and servicing it. They know that moving to a more modern platform is important.

On your comments about the PricewaterhouseCoopers' report, we always look to ensure that there are proven models out there before we make a decision to move forward. I think that's important. We contracted PricewaterhouseCoopers to look at data centre consolidation in particular, and they came back with a report that makes all kinds of recommendations. It's just one piece of advice we've received and also proven models we've looked at.

But IT infrastructure consolidation is now considered to be an industry standard, so not moving ahead really isn't an option when you think about the fact that IT infrastructure and our IT backbone is responsible for delivering some of the most important services to Canadians.

[The Chair, NDP, Pat Martin]

Fair enough. I understand. Thank you.

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

The PricewaterhouseCoopers report is one tool that we're using for advice, but of course proven models and real world experience are out there. Of course, Grant has experience in the private sector with CIBC, but we've looked at what other governments, like Ontario and British Columbia, have done and also at some of the proven models other subnational governments have embarked upon overseas.

I'll maybe ask Grant to talk about what his experience in the private sector was.

[Grant Westcott]

As the minister has mentioned, I worked in banking for almost 10 years. We went through a similar journey as has been described here, where in fact we consolidated 22 data centres down to two. We did the same sort of thing around the telecommunications front, where we reduced the number of networks substantially and built up a global network. We did do a lot of the telephony conversion from old-style telephony to voice over IP. We also consolidated seven different network schemes into one enterprise network scheme.

All of that took place over a period of nine years. I'm not suggesting that there weren't some bumps and grinds along the way, but by and large we did it within the timeframes that we set out. The way we approached it—and I think this is the cornerstone of other experiences that have gone forward—was to make sure you don't turn these into megaprojects. You break them down into manageable chunks. You make sure that there's a clear understanding of what things need to be accomplished and what the benefits of that accomplishment are as well, so that you harvest the savings as you proceed.

Obviously there has to be significant oversight and governance associated with it. There is a fair amount of approaches and methodologies around the transparency of all the project management techniques, and you need to bring the right balance of capital experience and determination to the forefront.

This type of work is doable.

[The Chair, NDP, Pat Martin]

I just wanted to state the reservations that I have. Anyway, thank you.

Now for the NDP, Anne Minh-Thu Quach.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Thank you, Mr. Chair.

I also want to thank the minister, Mr. Westcott and Ms. Forand for coming to explain their new project.

I acknowledge the fact that we must improve infrastructure systems and networks, but it seems to me that this is being done at employees' expense. In fact, you said that 300 data centres would be reduced to 20. It's certain that thousands of jobs will be cut.

You say that this is good for the public service, but I am very skeptical. I think that eliminating quality jobs is rather alarming. In addition, I am wondering about how service accessibility in the regions will fare. Will people living in the regions have as much access to services as those with access to services concentrated in large urban centres?

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

The data centres themselves house data, and there are people who work to maintain those data centres. But it's not a service-related activity, so there are no front-line service delivery personnel associated with data centres.

When you see that large 300 data centres going down to 20, we're not talking about things like Service Canada organizations. There are no large numbers of personnel associated with those. As we move forward, in the event that there are any full-time reductions over the long term, we will manage those reductions with very careful human resource planning and with a view, obviously, to minimizing the impact on our staff.

We have said all along that we have a good rapport, communication, and open dialogue with the staff. Today we will continue with that. We're committed to that. We want them to be a part of this transformation, and we will continue to respect that commitment to them and include them in the plans as we move forward.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

I know that this service is not provided directly to the population, but if we go from 300 data centres to 20, several thousand jobs will eventually be cut. I assume that this will affect the service provided.

If departmental technology infrastructure has been somewhat neglected for so many years and has deteriorated, the government is somewhat responsible. Can the government guarantee us that the newly implemented system will be assessed more or maintained more regularly? We want to avoid the system being deemed outdated in a few years, so as to eventually justify additional cuts.

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

The Auditor General's report pointed to and reflects what you've said about the need to keep on top of our IT infrastructure. It's amazing to look at the changes in technology that are available to us, even in the last 10 years. You look at the changes in the network systems and e-mail systems and software availability even in 10 years—no matter how many decades some of this equipment goes back.

So there's a very strong business case around moving forward with this. It's built on proven business models in the public sector. As I said, the Government of Ontario has had a good experience, and the Province of British Columbia. Consolidation of IT infrastructure is something that was a conversation 10 years ago in the private sector. It has been proven to yield efficiencies, not only in security but in energy efficiency.

One of the first things that needs to be done in any successful consolidation is to bring together all of the resources, including our human resources, which is what we're doing right now. The first stage of this is stabilization, and that's why we have an ongoing dialogue with the employees. We want to call on them for their expertise as we move forward. While we're now responsible for the IT infrastructure of 43 departments, they are the people who have been in each of these departments doing this work, so they have the expertise, and we are including them in this plan as we move forward,

[The Chair, NDP, Pat Martin]

Your time is up, Madam Minh-Thu. Thank you.

Peter Braid is next for five minutes.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you, Mr. Chair.

Thank you, Minister and officials, for being here this afternoon.

Minister, you must be encouraged, as I am, to hear today not only the interest of opposition parties but their support of this initiative as well.

In your opening remarks you mentioned some examples of other jurisdictions that have previously gone through IT consolidation exercises. I think you mentioned Ontario and B.C. Perhaps there are some other examples internationally as well. We have some private sector examples, with which Mr. Westcott is very familiar.

Can you explain what lessons we've learned from these previous examples, and how we plan to apply these lessons to the federal government's exercise?

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

We're in a good position of moving forward now, in the sense that other governments have done this before us. There's a lot of private sector information out there, and examples, best practices, and proven models for us to take a look at.

Whether it's in the public sector or the private sector, it has been demonstrated that streamlining in the areas of e-mail, data centres, and telecommunications is the smart thing to do. Those are proven business models and they are reporting substantial savings and efficiencies.

Just as an example, I mentioned earlier that the Government of British Columbia began its IT consolidation in 2002 and reduced its data centres from over 100 to two in 2011. Of course, these are large servers that create a lot of heat and energy. Some of ours are very outdated. In British Columbia alone, as a result, energy costs are expected to go down by 50%.

In 2010 the United States government announced that it's working on reducing its 2,100 data centres by at least 800 by 2015. This is expected to save an estimated $3 billion annually. In the corporate world, IT consolidation is a continuous process, particularly when merger and acquisition activities are actually pursued. All major Canadian banks and insurance companies manage their IT infrastructures on an enterprise basis, which is what we're moving toward.

The enterprise-wide IT consolidation has been proven to yield both efficiencies and savings in the private sector. One of the key things they have learned is that it is essential to consolidate your infrastructure first and then begin a process of transformation and streamlining. That is what we're doing in our first stage that I've explained to you—stabilizing.

At the back of my mind I'm always very cognizant of the fact that the services we are delivering to Canadians today, like pension benefits—very important services for Canadians—have to be maintained throughout this entire process. Our number one priority is maintaining those services to Canadians. That is critical.

In the next part, our priority is to streamline and consolidate, but we always need to have top of mind that our number one priority is maintaining those critical services for Canadians.

Yes, it's a very large undertaking, but as Grant said, there are a lot of proven business models out there. If we approach this in the way we have outlined and planned, we believe it's achievable.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

All right. Thank you. I appreciate some of the specific examples of cost savings as well.

The current patchwork of systems across government is obviously very costly. By the very nature of IT infrastructure, its costs seem to be continually spiralling. How will this consolidation process and the shared services initiative help to manage the spiralling costs of IT over time?