Government Operations Committee on Oct. 31st, 2017

[Arianne Reza]

I think from the PSPC perspective our workforce is a key risk for us. On the one hand, we actually have the bodies we need; we have approximately 1,300 procurement specialists, so I think Lorenzo's report was really looking system-wide—

[Kelly McCauley, Conservative, Edmonton West, AB]

I'm running out of time. Mr. Ieraci needs to speak, I think.

[Lorenzo Ieraci]

Really quickly, the point in the annual report was really about all the federal departments and agencies that fall within our mandate.

[Kelly McCauley, Conservative, Edmonton West, AB]

Oh yes—

[Lorenzo Ieraci]

A number of them—not PSPC—talked about the limited capacity they have, particularly in the medium and senior levels of procurement officers, so there is a system-wide need.

Some federal organizations are in good shape; others, not so good. It's the ones that are not in good shape, to use a colloquialism, that really need the help in terms of being able to hire additional staff and get them trained up to make sure they can deal with all the complexities that were spoken about by my counterpart.

[Kathleen Owens]

I can speak from a Treasury Board perspective. We have 12 departments involved in a collective staffing process to recruit procurement officials, including from outside the federal government.

[Kelly McCauley, Conservative, Edmonton West, AB]

I'm going to interrupt you here. I'm sorry, but I have to get to other business.

I want to introduce and discuss my motion that I submitted on October 5. I'll read it into the record:

That the Committee invite the Chair of the Working Group of Ministers on Achieving Steady State for the Pay System to provide a briefing to the Committee on the working group’s progress; That the meeting be held outside of the Committee’s regular schedule if necessary; And that the meeting be held no later than October 31, 2017

I realize that's a difficult timeline. I invite one of my colleagues to perhaps propose an amended date.

The reason we wish to discuss this, obviously, is the Phoenix issue. Today is the first birthday for or anniversary of the hard deadline set by Ms. Lemay and—

[The Chair, Conservative, Tom Lukiwski]

Colleagues, I'm sorry to interrupt.

Just to let all colleagues know, particularly since we have some new members at committee, the motion has been received and is in order. We're establishing a speakers list now.

Mr. McCauley is beginning to speak to his motion. I have Mr. Weir and Mr. Shipley who have indicated they would also like to speak to it. I think you are getting the motion distributed to you as I speak.

Sorry for the interruption, Mr. McCauley. Back to you.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thank you.

As it's the one-year anniversary, you'll recall that Mr. Weir, a couple of others, and I met in an emergency meeting on Phoenix a year and a half ago, on July 28. At that time, Ms. Lemay stated that October 31, a year ago today, would be a hard deadline for clearing the Phoenix backlog. On September 19, 2016, before that deadline, Ms. Lemay said, “We have made a commitment to the backlog, and I am told we intend to meet that date.” On October 6, Ms. Lemay said that we're on target, next month is a big month, we're going to get to that target, and we're going to meet that target. Ms. Foote at the same time agreed that they were going to meet that target, and of course we missed the target. Things have blown up. Things are getting worse. I think we're now at a backlog of over 200,000 employees and over 300,000 to 350,000 individuals.

I want to read for you some of the letters we've received from people affected by the Phoenix system to really emphasize how important this issue is and the fact we're not getting anywhere, and why we need the working group to appear before us to explain what they're doing to fix Phoenix.

Very recently, it was in the news that a public servant waited until his two children finished their university exams to tell them he was dying. He was 61 years old. He passed away. Due to Phoenix, they were not able to get his pension cheque. It wasn't until the family went public that the money was actually provided.

I have a letter here: “My name is Sebastian. I've been a public servant since 2014. In April I took leave without pay for medical reasons. My pay should have been stopped and wasn't. I received an overpayment and notified my manager immediately so I could try to resolve the issue. I returned to work in June, reduced my hours, and continued to be paid full-time. I took additional leave without pay in 2016 and continued to be paid. I spoke repeatedly with my manager to resolve the issue. I didn't want to receive payments I wasn't entitled to. In October, I suddenly didn't get a paycheque—no notice, just no pay. It had been clawed back to apply to other overpayments.”

Here's another one: “I went on maternity leave. My son was born eight weeks early. He spent three weeks in neonatal care. I should have spent the whole time holding my son, the only care we could provide, instead of spending hours, first from the hospital bed following my emergency C-section, and then from the hallway outside the NICU, calling and calling and trying to get my record of employment so that I could actually receive income during this stressful period. I was told at that time that it would take six months. I eventually received an email copy of a handwritten ROE but never received an original one to submit. I continued to contact my pay centre to resolve my overpayment. I was working with one compensation adviser who advised me my overpayment was about $15,000, which was close to what I had calculated, when he suddenly stopped responding to me. I called back again. It was $7,500 and then $22,000 was owed. No one would tell me why or how these amounts were calculated. I was still getting paid. I was a category 3.”

Keep in mind that she is on maternity leave and still in care, having delivered a baby son two months early. She was in the lowest priority.

She continues: “He would not even take a message and have someone call me back. I ended up sitting at my desk in the middle of my call centre, bawling my eyes out while trying to talk to someone at the pay centre. I was being told no one knew what my overpayment was, but my pay stub said $22,000 and they might just try and recover that. In 2017, I received my T4, followed by an amended T4.”

If you recall, I think it was in November, over a year ago, that we had another meeting with Ms. Lemay and Minister Foote. We brought up the issues of the T4s, and we were told not to worry about it and that everything was in hand. I think it turned out that 70,000 T4s were delivered incorrectly—“in hand”.

I might as well continue.

This letter says: “By my calculations, I received $50,000 in 2016. I should have received $35,000. I received a T4 for $20,000. I requested a new T4 many times, but so far have no success.” Keep in mind that income recorded on the T4 affects your benefits, such as the child care benefits, the next year.

Again: “Working with a new compensation adviser, he advised me that my overpayment was now $30,000 because Phoenix had generated additional payments of $15,000, which was never actually paid to me. Of that $15,000, I received $6,800. The remainder was paid to CRA for taxes. I'm told I am expected to repay the entire $15,000 and will wash out all tax at that time.”

It still goes on: “Here is my issue. Because my T4 was low, I had credits I wasn't able to use. I have two other children who qualify for the disability tax credit.” Keep in mind that the CRA has also changed their rules. That's probably going to affect her children with regard to the disability tax credit.

She continues: “When I couldn't use those credits, my husband claimed them. Now when I get a new T4 those credits aren't available for me to claim and this creates an expense for me in the form of additional taxes” that should have been her husband's. She says, “The child tax benefit has been calculated incorrectly and I'll be left with an overpayment to pay there as well. I understand that we're able to submit up to $200 relating to our prepared...”.

This nightmare story goes on for three more pages. I'm not going to continue with it. I have quite a few others that I would like to read out.

Here's one where a federal government employee spent three months fearing she would lose her home after missing a $750 payment as a result of a massive government mess-up. Unable to meet her financial requirements, she missed a payment to the Bank of Montreal. At first they said no worries: you have the government apologizing for an error. Later, the bank said, “We don't care that you're facing these hardships, we just want our money.”

On and on we go with the Phoenix problems.

This next letter goes on for four pages. It reads: “Life through the eyes of a federal employee in Canada and the failed Phoenix system”, and continues: “Would you work for a company that told you they would not pay you for the job you do? So many of us already do. Imagine that you have a job you spent years working towards, a job that requires you to work days, nights, weekends, but you do it because you enjoy it and it gives you a chance to provide for your kids. Imagine one day that your boss tells you that due to an internal issue the pay is wrong. He promises it will be fixed and tells you it isn't that bad, it isn't affecting many people, which is also what they tell the media. Months go by without answers. You realize that most of your co-workers are in similar situations. You ask your boss what's going on: we don't know, they're working on the problem. There's no set date for the foreseeable future when the pay will be fixed.”

One of my constituents came in about a pay issue. She was told that we have the levels 1, 2, and 3, and if you get your emergency pay your issue is sent to the very back of the queue. They're paying you, so “don't worry, you've got emergency pay, and we'll cover you for this time”. The second you access your emergency pay, you're sent to the very back of the queue behind 200,000 other people and your pay is again messed up the very next month.

We've all heard the stories about people who are being affected and losing their cars and losing their homes.

Here's one that was sent in: “What the F is going on?” This gentleman, Brendan, is working flat-out on a special project the federal government claims is one of its key priorities. He says, “It's just not a high enough priority for them to pay me properly.”

Here's another one. A 36-year-old policy analyst returned from paternity leave in May. His first paycheque, which he had to wait 10 weeks for, was missing two weeks' salary. A few weeks after returning from leave, he left one department and switched to another, and of course the pay did not follow him.

Here's another one. Shannon went on leave about a year ago to care for her young children. She's been on the run and in hot pursuit of her employer, the federal government, which is sending her paycheques that she's not owed. The person who prepares her tax returns, she said, suggested that “I close my bank account to stop the direct deposits”. She's been getting overpaid. If you recall from one of their earlier meetings, the government is not even able to tell who's getting overpaid and how much they're getting overpaid by. This employee has actually reached out. The government kept paying her so her accountant said to just close the bank account.

Federal employees are entitled to five years of unpaid leave to care for a preschool-aged child, a feature that's been in place for decades, but one that the Phoenix system doesn't seem to accept. Biweekly payments towards her annual salary of $70,000 as a project manager have thrown a massive wrench in her life. She can't spend the money because it doesn't belong to her, but those deposits have meant that she can no longer qualify for the child benefit. I mentioned this earlier. Again, it goes on your T4, and money received this year affects your benefits for the next year. Here's someone who's caring for her child but can't get the much ballyhooed child tax benefit because she's getting overpaid. She tried to stop the overpayments and the government won't stop paying her—a nice problem to have—but now she can't get her child benefit.

This goes on and on. You can see me flipping pages. I have more stories.

Here's one from a gentleman who worked for the Food Inspection Agency and was moved to an acting position various times and was paid. Then he was told he was overpaid—which he wasn't—so money was taken back. He was underpaid or not paid at all between February 2016 and August 2017. In consequence, he's had to borrow money from family to make mortgage payments. His credit rating has been destroyed because he maxed out credit cards and an overdraft that will take years to restore, not to mention the stress caused by having to contact the Phoenix pay system over and over without getting anything straightened out.

I don't know if you recall, but about a year ago we heard from Ms. Lemay and Ms. Foote that we were almost at a “steady state”.

A gentleman who worked for Ag Canada for 33 years and retired in May of 2016 has still not received all the money owed to him as of a couple of weeks ago. He's unable to contact the Phoenix pay centre because no one answers the calls. José had agreed to return for a 90-day period in January, February, and March, but when the Phoenix pay system failed to pay him in February, he resigned. As of October 11, he has not been paid for that period either.

In July 2015, a gentleman employed with the Canada Food Inspection Agency for 17 years lost his job because of cutbacks. His problem arose with trying to transfer his public pension, which took 18 months and caused considerable stress. In December 2016 he received a letter informing him that, due to system upgrades, excessive payments will only be paid in January 2017, which he considered not acceptable and, he said, “would create a situation where there would be a massive personal tax penalty incurred by myself if this payment is deferred until 2017.” The matter was resolved quickly after he threatened to go into the office.

Now, one of the issues is people coming in and making comments to the MPs' offices. We're following up—we have a direct line—but even now it's taking three months to get a simple response to our queries, leaving our constituents on hold. Again, that gentleman I just talked about is another situation with regard to the T4s or getting paid in the wrong year.

Another one is a student who worked for Parks Canada at Radium Hot Springs for two summers in a row. Because of delays in payment for 2016, he wasn't fully paid until May 2017. As of October 5, he's still owed almost $3,000 for his employment during the summer of 2017. The young man is responsible for payments for expenses while attending university, but is finding it difficult when he's not being paid on time. The office was called three times and he has spoken to three different officers, who claim to be sending messages for processing. However, each time the staff are told that there's no record of his previous calls—this is right from an MP's office.

I have some constituent quotes here from an MP's office: “I'm a new mother. I do not have enough money. My savings account covers six months' worth of living expenses. I'm at a loss. I'm scared to lose my home, my vehicle, and everything I've worked so hard for.”

A gentleman, Ross, said: “I'm currently at the wrong rate of pay. All of the members of my team have moved to the correct pay scale and I have not. Rather, I'm stuck at a pay scale from two years ago.”

Adam said: “I have suffered financial hardship over the past year due to the Phoenix pay system. As a young man with a family, you can assume that this money is very important to me. I called numerous times without avail, sometimes spending upwards of three hours on hold or waiting to speak someone, only to get, ‘We are working on it.’”

This is from Doug: “I have worked for the government from 1985 to 2006 in the human resources profession, ironically, and taught as a casual instructor from 2014 to 2016. As a non-active employee, my fear is that my life will remain last in priority, despite unpaid hours and incorrect pay being more than a year overdue. This is doubly problematic, since I need a proper and complete ROE in order to quality for EI.”

Nicole said: “I'm a single mother with two children in elementary school, and I'm dependent on my income for myself and my children. With not having any income, I am finding it very difficult to keep up with expenses. I'm now in a dire situation.”

At this time last year, we were getting phone calls and inquiries from people who were struggling to find money to buy Halloween candy and costumes, and, a bit later, to provide gifts for their children for Christmas.

From James: “I'm in bank overdraft having to pay for interest while I wait at least five pay periods.”

From Camilla: “An overpayment on a biweekly basis, yet a negative impact on my 2016 tax filing will have a negative impact on my 2017 filing until such a time as it's resolved.”

Sheila said: “I worked for the Department of National Defence for over 30 years and retired in July. I'm still waiting for my severance pay.” That was in July 2016.

From Mark: “I'm frustrated, as my wife is ill, and one of my only reasons I accepted a higher-paying position was to allow for her to work less. I joined the civil service to serve Canadians and take pride in what I contribute. By no means did I expect to face this continued embarrassment.”

From Krista: “After 17 years with the government, I've never felt so disregarded as what I do now.”

From Nicole: “I've been requesting an amended T4 since early February. It's very frustrating, especially since my husband's work has slowed down due to the economy in Alberta and this tax return would alleviate a lot of stress in our family.”

From Terry: “I'm extremely frustrated and wonder if there's any point in continuing my employment with the federal government, because there seems to be a lack of respect from the government in handling my concerns.”

From Shannon: “I'm still not being paid my full entitlements on my paycheque and do not have dental coverage after nine months of employment. I put my life on the line every day and I go to work as a correctional officer. This job is hard enough. I worry about how I'm going to feed my family and pay my bills on top of this. It's ridiculous.” This is from someone who works in Correctional Services in a prison. I won't go into full details on her background, but it's not a pleasant job to work inside the prison system.

Those last 15 or so that I've read to you are from one MP in Edmonton. If you think about it, there are 338 of us around the country, and these are from just one MP, in just the last six months.

Am I running out of time, Mr. Chair?

[The Chair, Conservative, Tom Lukiwski]

Mr. McCauley, you have as much time as you need until one o'clock.

[Kelly McCauley, Conservative, Edmonton West, AB]

I will keep going. I have more cases here.

A constituent, after their last day of work, continually received their pay deposit for over five months. Again, it's a nice problem to have unless you're honest and you want to return the money and not get taxed. While the constituent has done everything in their power to work with the Phoenix pay system to get this issue resolved, the issue is still ongoing. It has affected their ability to file their taxes properly.

This has caused extreme stress, and it is taking countless hours of their personal time to try to properly resolve the issues. They've been instructed only that they will need to repay the gross amount even though they only received the net amount. It will balance out when they do their taxes, but in the meantime, they're being inconvenienced further by needing to repay money that they never received. You can imagine that the taxes deducted over five months would come to a significant amount. To date, the pay centre has still not provided them with the accurate amount that needs to be repaid. This is now a full year after the individual stopped working for the government.

In another case, a constituent has not had any EI premiums deducted in 2017. They are concerned that they will now need to pay the EI maximum contribution when they file their taxes in 2017. There's also a concern that this could affect insurable hours on the record of employment should they fall ill and need to take sick leave. This error was noticed by the constituent, who has spent a considerable amount of personal time in trying to get this issue resolved.

In case three, a constituent retired in January 2017. He had to wait until this week for his severance pay and an additional 400 hours of leave time that was to be paid to him. He retired in January, and this information is from just three weeks ago. He worked closely with the pay centre, but was told that he was not a hardship case so his only option was to wait in a queue to get this issue resolved. He is retired and not getting his severance payment and his pay, so I'm not sure how that is not a hardship case, but this is something that is going on every single day with our public servants.

There are others. There are several cases specifically for individuals who worked in Correctional Services Canada. They include issues with inaccurate deductions, not receiving top-up pay, being paid at the wrong pay level even though they were working at a higher pay level, and not being able to add children to the benefit plan in a timely manner, so on top of all this, they're having to pay out of pocket for dentists and pharmaceuticals.

Here's a comment from one of the staffers: “There's no system in place that allows an MP to assist with Phoenix cases that are not classified as hardship cases. So we have someone who retired and it was nine months and they still haven't received severance pay and 400 hours' leave, but that's not termed ‘hardship’. So even when they are a hardship in reality, they're not termed 'hardship'. It's a catch-22. The constituency offices cannot deal with anything and push things up the line that are not called 'hardship' by the government.”

I think it's very much like this attack on diabetes sufferers. You have diabetes but you're no longer getting the tax credit for it until you actually suffer for it, but if you suffer for it, you don't get it.

Our office has been informed that the only real option constituents have is to submit their complaint and wait till it's their turn. There are over 200,000 individual cases outstanding already. I can't imagine how long it's going to take to, quote, wait their turn.

I have another couple of cases here.

This individual says: “From April 8, 2016 to December 31, I was on parental leave. However, my ROE was not sent to EI until the end of November. I ended up receiving regular pay the whole time. In December 2016 I received EI benefits in the amount of $18,200. I sent the money back to the Receiver General per the Phoenix call centre. Please note I was informed to return ASAP so I would not be issued a T4E, which subsequently was issued. In April I received a phone call from the pay and benefits adviser stating I was overpaid approximately $50,000 by regular pay instead of EI and parental top-up and I'd have to pay the gross amount back even though I only received $40,000 net pay.”

Again, it's overpaying by x amount, reducing the taxes.... You're getting overpaid by $50,000 and you're only getting net $40,000, but the government is asking for the full $50,000 back.

The individual continues: “In addition, the pay adviser informed me that I was owed $30,000 gross in top-up pay for my parental leave for my benefits. I requested that these monies be kept by the employer because I was already owed around $50,000 and the gross amount could be applied to my overpayment. Unfortunately, the payment was already sent. I was taxed at the 50% tax bracket because of payment received in one lump sum, receiving $15,500 from that. If I return the extra monies received in 2016, why would they not reverse this pay situation?”

It again goes back to the T4s, which we were told a year and a half ago not to worry about because everything was in hand.

I want to go over one last one. I have about 40 more, but I see we're losing time and I want to leave some time for my colleagues to comment on this.

It reads: “My name is Michael. I work for the Department of National Defence at Borden, classification is PIP09C2. Phoenix no longer considers me a C2 even though that has not changed in the 34 years of service, and I'll be turning 65 on August 5. I would very much like to plan my retirement, but I'm being held hostage, so to speak, by Phoenix. When I talk to the Phoenix pension people and do a pension calculation estimate, all that is seen is the wrong information from the Phoenix pay system. When I retire from the civil service neither I nor my personal support clerk will have Internet access to Phoenix. Thank you for listening to my issues. I'd like to get this fixed and move on with my life.”

I know that I've used up a lot of time, but quite literally these are only about a third of the issues. Half of these are issues right from my office. On the one from Borden, people have reached out to me because their MPs in their areas have not been able to get Phoenix and because they've seen us on committee and have asked us to take it up.

I'm going to turn over the—

[The Chair, Conservative, Tom Lukiwski]

I have a speakers list, Mr. McCauley. Mr. Weir is next on my speakers list once you've concluded your remarks.

[Kelly McCauley, Conservative, Edmonton West, AB]

I will conclude my remarks and let Mr. Weir have a moment.

[Erin Weir, NDP, Regina—Lewvan, SK]

Thank you.

Just on a point of procedure, if I want to move an amendment, do I have to do that right away or can I do that at the end of my comments?

[The Chair, Conservative, Tom Lukiwski]

You can move it at any time, but once you move the amendment, that amendment then is open for debate.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay. Fair enough. I'll speak first and then I'll move an amendment.

I think Mr. McCauley has done a good job of outlining the gravity of problems with the Phoenix payroll system. Recognizing that we're very short on time, I won't add to the litany of problems that Canadians have had with Phoenix. I will speak to the motion just to say that Phoenix is well within the mandate of our committee, and I think it's unreasonable that our committee has not yet heard from the new Minister of Public Services and Procurement or from the head of the ministerial working group on Phoenix.

The argument we've heard from the government side of the table is that we shouldn't study Phoenix until after the Auditor General reports. I certainly think it's good that the Auditor General is looking at Phoenix, and our committee will be eager to examine the results of that report. If the Minister of Public Services and Procurement does not want to appear until after the Auditor General reports, that's probably fair enough.

However, it also makes sense to hear from the head of the ministerial working group on Phoenix. It would be entirely possible for that minister to report to our committee on the work they've done to date before the Auditor General reports. There's really no need to wait until after the AG's report to get some sort of an update on what this ministerial working group has been doing and what it has achieved.

I speak in support of the motion. However, I would now move to amend the motion to change “October 31” to “November 30”.

[The Chair, Conservative, Tom Lukiwski]

I need to suspend for a very few seconds to consult with my clerk to make sure that this amendment is in order.

We'll reconvene. The amendment is in order. You may speak to the amendment. I have a speakers list now, for the 30 seconds or so that we have left, on the amendment.

I have Mr. McKinnon, on my list, but I also....

Mr. Weir, have you concluded?

[Erin Weir, NDP, Regina—Lewvan, SK]

Just to speak to the amendment, I would note that today is October 31, so I think it's only reasonable to allow more time to invite the chair of the ministerial working group to come and testify. I believe that a full month is a more than reasonable length of time to arrange that testimony. Also, as I've already explained, our committee does need to hear from that minister on what the working group has been doing and what it has achieved with respect to Phoenix.

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

Since the amendment is in order and we're speaking to that, although we only have, by my count, about 30 seconds left, I will entertain anyone who wishes to speak to the amendment.

Mr. Shipley.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

Again, in our minds, this does certainly meet the purview of OGGO to be studying it—

[The Chair, Conservative, Tom Lukiwski]

Colleagues, it being one o'clock—I'm sorry for the interruption, Mr. Shipley—I will adjourn the meeting, but before I do so, I would like to thank our witnesses for being here. My apologies; however, for the last 20 minutes or so, even though you haven't been able to speak to the subject material that you had come here prepared to speak to, I hope that you have been informed by some of the stories about your colleagues in the public service.

Thanks to all of you for your attendance. We are adjourned.