Evidence of meeting #62 for Government Operations and Estimates in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was contracts.
A recording is available from Parliament.
NDP
Denis Blanchette NDP Louis-Hébert, QC
Thank you.
You said that you were going to be able to achieve some savings. I see that, basically, you're banking on the IP telephony system in order to achieve savings this year. First of all, has this been done? In addition, in your estimate, how much money will you be able to save simply by installing the IP telephony?
President, Shared Services Canada
To answer your first question, I would tell you that this has been done for this year. You are quite right in pointing out that we are banking a great deal on the telephony. In fact, this was the right time to do this. The government had a tendency to use old telephone systems that cost us a great deal of money. For example, the government uses a desktop telephone, which we refer to as the Centrex telephone, which costs us approximately $31 per month, whereas an IP telephone costs us approximately $15 per month.
Our plan calls for modernization. We used some aspects of this transformation plan to achieve savings this year. However, we are going to modernize the telephone system throughout the government. We are also going to consider the possibility that, for some people, it would make more sense to provide them with a cell phone rather than an office phone. At present, cell phones are not costing us a great deal of money.
NDP
President, Shared Services Canada
I will ask my colleague if he has some specific numbers. In any case, we have already established that we will be able to save $50 million over three years.
However, we think that we will be able to achieve even more savings with our third initiative, which is to modernize the networks. By modernizing the networks, we will be able to complete this exercise of modernizing the Government of Canada's telephony.
NDP
The Chair NDP Pat Martin
Thank you, Mr. Blanchette.
For the Conservatives, we have Bernard Trottier.
Conservative
Bernard Trottier Conservative Etobicoke—Lakeshore, ON
Thank you, Mr. Chair.
Thank you to our guests for being with us once again on this important initiative.
Recently there has been some discussion in Canada about cybersecurity. The Auditor General recently had a report in which he was talking about some of the vulnerabilities we have.
Could you describe how an initiative like Shared Services Canada enhances cybersecurity? Some people would say that if you have everything connected, as you describe, once somebody is in, technically they could then penetrate all the systems of the Canadian government. You described a little bit of this in your presentation. Could you tell us in a little more detail how this initiative enhances security?
President, Shared Services Canada
Thank you.
My colleague, Grant Westcott, has been very heavily involved in this since we created Shared Services Canada, so I'm going to ask him to answer your question.
Chief Operating Officer, Shared Services Canada
Thank you, Mr. Chair.
I'll try to answer this in a straightforward manner, although sometimes it gets a little bit complicated. The reality today is that most of our systems are interconnected, because departments communicate with each other. Our purpose now, through a number of initiatives that we've worked on with Public Safety and with CSEC, is to in fact establish a much more solid foundation upon which to move forward.
By way of example, in the past two years, we've created a thing called SCNet, which is a singular way for the government to connect to the Internet. Most of the departments in the Government of Canada now use that as the means by which they connect to the Internet.
By doing it that way, as opposed to having multiple departments with multiple different connection points, we can now establish monitoring and sensing to see what's actually going on. Our colleagues at CSEC are extraordinarily adept at determining whether or not there are inappropriate behaviours and that sort of thing going on. Because of this sensing and the way we've done it, we're now much more capable of actually determining whether or not things are appropriate. That's one example.
Building on that same example, in reference to the supplementary (C)s discussion around this year, we are now going to take that same framework around SCNet and build another Internet connection, but outside of the Ottawa area, because everything is concentrated in Ottawa. That's a secondary thing that we're going to do.
There's a third thing we're going to do when things happen. Prior to the creation of SSC, there were information protection centres. We had approximately 20 of these in various departments. When something went wrong, CSEC would determine it because of its sensing capability, but then it had to coordinate across all these information protection centres to mitigate any of the things that were going on or not happening properly. One of our responsibilities now is to actually consolidate all those information protection centres into a single centre so it's easier to coordinate when things go bump in the night and that sort of thing. Then we want to build a second centre to back that one up.
Those are examples of how we're progressing.
Conservative
Bernard Trottier Conservative Etobicoke—Lakeshore, ON
Thank you.
Just for the benefit of the committee, could you restate...? In terms of the things that are top secret, that's not part of your mandate. Is that correct?
Conservative
Bernard Trottier Conservative Etobicoke—Lakeshore, ON
Okay.
My last question has to do with the cost side of it.
You mentioned three things you're trying to do: improve service quality, reduce costs, and enhance security. In the time I have, I want to talk about costing.
Mr. Westcott, I know that you've worked in financial services before, and I know you would extensively benchmark how you perform from a cost point of view vis-à-vis your competitors.
How does the Government of Canada look at benchmarks? Typically when you look at costs, you'd say that between 1% and 3% or 4% of revenues is an appropriate figure to be spending on information services. What's the appropriate figure for the Government of Canada? I know that maybe revenue is not the right measure....
Chief Operating Officer, Shared Services Canada
That's a really difficult question. In the private sector, because of its competitive nature, you do get benchmarking services, and they are so focused on costs that the ability to actually compare is very well developed. In government, it's not quite the same thing.
By way of example, the U.S. government and the Canadian government are closely aligned in terms of organizational structures and mandates and those sorts of things. One way you can look at this is to say.... Usually, a way of perhaps describing this is that the U.S. itself—its economy and the government itself—is roughly 10 times the size of the Canadian government, but we spend about $5 billion in total on IT, whereas the U.S. government spends north of $81 billion on IT. When you do the 10:1 ratio, it doesn't quite work. I'm not sure whether we are underspending or they are overspending, but those are the only kinds of benchmarks we have on that type of thing at this juncture.
Part of what we are going to do, as we develop our business plans for data centres and networks, is to try to get to a more private-sector-like comparative framework, because we do have enough scale and we do have enough ability to actually figure out how much it costs to run a server, how much it costs us per square foot to manage a data centre, or how much it costs us to actually deploy a network connection per person in a building.
Those will feature in how we actually do our work in trying to move the agenda forward, and we will try to strive for private sector performance in that sense. As I said, it's a complicated subject, but that's a way of trying to describe it.
Conservative
NDP
The Chair NDP Pat Martin
Thank you, Bernard. Thank you, Mr. Westcott.
For the Liberals, John McCallum.
Liberal
John McCallum Liberal Markham—Unionville, ON
Thank you, Mr. Chair,
Welcome to our witnesses.
I notice that you have a contract with Bell for what's called “management consulting” for $400 million. That seems quite a lot of money, so I was wondering if you could explain what that's about.
President, Shared Services Canada
Thank you, Mr. Chair.
This is a contract that was signed in 2007. It was a renewal to something called the secure channel contract. You may be familiar with the secure channel, which earlier—in 1999 or 2000, I think it was—was originally negotiated. It used something called a PKI technology to keep communications secure. That contract was signed with Bell.
That contract was renewed for the last time in 2007, with the understanding with Bell that the objective of this last renewal was to move beyond the PKI technology to something that was—it's called SAML and I can't remember what SAML stands for—less proprietary than the PKI technology that was being used. The objective of the renewal of the contract was to move off the PKI technology, to finish the dependence and the reliance of the Government of Canada on that particular technology and approach, and to move to a more off-the-shelf kind of solution.
What has happened since 2007 is that gradually the costs of the secure channel went down, but more importantly, the government has in fact migrated off that contract. You may have seen references to the ability now for Canadians to use their credentials from their banks to be authenticated for government programs such as EI or others.
That is the end of that contract; it formally comes to an end.... It has one more option year for next year, but we have completed the migration onto the new system.
Liberal
John McCallum Liberal Markham—Unionville, ON
So the $400 million was spent over what period of time?
Liberal
John McCallum Liberal Markham—Unionville, ON
Okay.
You were required to find I think $150 million in savings through the strategic and operating review. You mentioned page 13 of your report, which contains a list of items, but it doesn't contain any dollar figures. Have you found that $150 million and is that summarized in those items?
President, Shared Services Canada
Thank you.
Well, we have identified savings initiatives worth $150 million and we can provide the committee with the list, with the dollar amounts next to them. For this first year, we identified an amount that was 5%, so it's $75 million for the first year, and those amounts have been identified and have been realized.
Liberal
Liberal
John McCallum Liberal Markham—Unionville, ON
Over three years, okay.
For my next question, I think I remember that in your previous appearance you said that the upfront investment in the e-mail transformation would be funded by further savings, presumably in addition to the $150 million. Have you found those further savings? If so, can you tell us where you found them?
President, Shared Services Canada
We are indeed funding the e-mail project internally, so the amounts we've spent so far obviously have been devoted to project management: all the work required to do the analysis, the inventories, the specifications, and run the industry engagement and the procurement. We have been able to finance that internally without any additional funding.
We found this funding in the same way that we identified the initiatives under the deficit reduction action plan, that is, by identifying operational savings through consolidation. It's our expectation that we will be able to fund the e-mail initiative internally. We will know exactly what the total cost of that internal funding is, of course, once we have identified a supplier, which will be in the spring.