Government Operations Committee on June 7th, 2018

[Marie Lemay]

I apologize. I wasn't there in February 2016, but when we came in May, it was that small number. Then we said by June that we realized this is bigger. It's not the normal.... That's when we started setting up the offices. We started a proceeding.

You'll remember that we received a number of transactions from the departments that were pre-Phoenix. It was something we did not expect, and at that time we thought that building the capacity to address those would help.

[Kelly McCauley, Conservative, Edmonton West, AB]

Let me just interrupt you.

[Marie Lemay]

Can I just—?

[Kelly McCauley, Conservative, Edmonton West, AB]

Let me just interrupt you there. We all knew. We knew in January, because we brought it up. We actually have you or Minister Foote stating that the unions had warned you in January 2016 that there were problems with Phoenix, with the testing. We have all the reports showing that there were issues. We had meetings in February at which we brought it up, and we had our meetings in OGGO in April, when we brought it up, and we had issues in May.

Why did it take so long—until June—to recognize this, with everyone telling us we had issues? Why did it take so long? Is this just, again, part of the culture of—?

[Marie Lemay]

That's what I'm trying to get at. Remember, the “go live” was in February. The first meeting I recall is May 2016, at which we talked about numbers, and in June we built the capacity.

The one thing we realized in the fall was that this was a much more complex problem in terms of having to make sure of the HR-to-pay link, and that we needed to make sure that the integration and the data.... That's when we started engaging the department.

In early 2017, Les joined us, and the Prime Minister set up the working group of ministers. There was a team of integrated HR-to-pay people set up, and we've been continuing to build the capacity and work on those fronts.

I think we have acted very quickly with the information that we had. In the planning of the project, there were a number of flaws. When the implementation happened, we had to react—

[Kelly McCauley, Conservative, Edmonton West, AB]

I'm almost out of time. I want to ask a question to Mr. Ferguson.

You've been, I think, four times with us now in the last week. How confident are you that the recommendations you put in the fall report and this report are being followed up, that we're addressing the “incomprehensible” culture or the incomprehensible errors?

[Michael Ferguson]

In our work, we like to go back and do an audit before we comment on how successful implementation has been. We've seen the action plan. We are quite confident that the departments involved have taken our recommendations seriously, but as to saying how effective they have been, I think the metrics will show that. If the number of people and of outstanding pay changes start to reduce, the metrics will start to show whether they are being successful. Then, at some time in the future, we'll come back to do some additional work on it.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks very much.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Thank you.

[Kelly McCauley, Conservative, Edmonton West, AB]

I want to introduce my motion, please.

[The Vice-Chair, Liberal, Yasmin Ratansi]

I'm so sorry. You're out of time.

We'll go to Mr. Blaikie. Take seven minutes, please.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I want to come back to the question of the two projects being pursued in tandem and whose decision that was. Part of the reason I want to come back to it is that what I find disappointing in the answer—and I appreciate that Ms. Lemay was not there and that it wasn't the current minister either—is that when we talk about trying to learn lessons, I'm not reassured from your answer that you figured out who took that decision because you wanted to talk to them, or that the department is making an effort to talk to the people who made those decisions at the time to understand what went wrong.

Have you reached out to some of the former deputy ministers who were there, to sit down with them? If so, why can't you offer a better idea of what the thinking was at the time? Is it because you haven't talked to them about it?

[Marie Lemay]

First, I would say that I can tell you how we would plan it, if we had to, so that we could go there, but we've been so focused on getting the issue solved.... I don't mean to sound like...but we have really focused on the future and getting a pay issue addressed. We're now starting to be able to turn our eye to....

We've obviously taken the lessons from the Auditor General and from Goss Gilroy to try to adjust, but also on a go-forward basis to make sure that no other project was starting and was being tripped up. That's where we've had to focus our attention. We will soon be able to go back in more depth to some of the “where” and “what” questions. To a certain extent we want to get those answers, if they benefit us in planning for the future in terms of lessons learned. We have, however, been able to capture what the Auditor General and Goss Gilroy have said for the future.

To answer your question, then, we're much more focused on the future than on looking backwards right now.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I hear you on that. I would humbly suggest that I think those conversations are important, in part to try to initiate the culture change the Auditor General has talked about. If you don't go back and talk to those people—and I'm not talking about a witch hunt or persecuting them or anything like that—and have those conversations, then I don't know how you show in your department that it matters who took what decision when and that people now are still concerned to know. The answer that “I wasn't there and I don't know, and you'd have to talk to somebody else, but I don't know who that person would be” seems to me to be part and parcel of the culture that leads to a lack of accountability, if people feel that the buck can be passed that easily.

[Marie Lemay]

I just want to reassure you, though—and I'm sorry if that is the impression I gave—that we did talk to the people who were in the department at the time. Again, though, delving into all of the eight years of what decision was made when didn't feel at that point like the best use of our time at the moment.

I take your point, though, and we will do so as we reflect on going forward, the minute we have this more under control. We're just starting to see some signs. We're not declaring victory. We're just working really hard to get people paid accurately and on time.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

In the time I have left, I would like to come back to the question we left from my last intervention about how you address mistakes within an organization. You don't want to be so hard on everybody all the time that nobody feels they can make a mistake. That leads to a kind of perverse culture. On the other hand, if there aren't any consequences for anybody, particularly with respect to very large mistakes that have important consequences both for government, in terms of cost and everything else, but also for staff morale and on the lives of individual staff who are being seriously affected at a personal level, then that's probably also not good for an organizational culture.

I'd like to hear first from you, Ms. Lemay, and then I wouldn't mind hearing from Mr. Ferguson as well, on the same points.

Try to give a brief answer so that we have time for both.

[Marie Lemay]

I want to thank you for the question, because it's a really good one.

In this specific case, the performance of the senior executives who were responsible and were reporting directly to the DM was assessed. We have tools in place within the federal government and those were used. The one thing I believe is that there was no ill intent. I don't think these people woke up in the morning to make the system crash.

Looking now at everything and all the information we have, yes, they made mistakes, but even the Auditor General pointed out that there were other issues of oversight, of governance. To bring it down to two or three people is, I think, not to understand the complexity of this whole thing.

The people were assessed, their performance was assessed with the tools that we have, and I think this was noticed—I know it was in my department—and it's a question of balance, of being fair in our assessment of mistakes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Ferguson, what do you think of that as a response?

[Michael Ferguson]

I would say that in something like the Phoenix situation it is particularly difficult to address that question, because the problems touch so many people and have affected so many people.

As the deputy said, I'm sure that the people involved in the project didn't intend it to turn out this way, but I think we saw two problems in the course of our audit. One was that it was not clear, right from the very beginning, who was going to be accountable and responsible. The other part of it was, and you see part of the consequences of it today, the churn—for example, at the deputy minister level. The number of different people who served in the role as deputy minister makes it hard. Even the individual who was in place at the time of the decision had only been in that role for about a year. I think this makes it difficult to identify somebody as accountable.

That's why in my message I indicate that, either by design or by accident, it almost seems as though Phoenix was set up in such a way as not to have somebody who was specifically accountable or responsible. A lot of it was that in the beginning it was not identified who was going to be accountable, and then there was so much turnover at the deputy minister level that it makes it hard to assign accountability.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Thank you.

Mr. Peterson has the last seven-minute round.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you, Madam Chair.

I think I'm the last intervenor here, so I'm going to thank the department, frankly, for working from a difficult situation toward some progress, towards the outcome that we all want, and that is to make sure that all the federal public servants are paid properly and on time. Kudos for that, for the work you've done to recover from what, frankly, I think we all agree was a very difficult situation. It came about for a plethora of reasons, as iterated in the reports that we've seen and testimony here before our committee. There was the forced savings of $70 million, the removal of 800 personnel, the lack of oversight, which we see in the most recent report. Some of these behaviours were actually rewarded as innovative, which I don't think is appropriate.

Then, we're moving forward now and trying to get to some resolution, which I think is important, and I commend all of you who played a role in helping us all, as public servants ourselves, to improve lives and the situation. We all empathize and sympathize with employees who are in a precarious situation for pay reasons, if they're not being paid on time or have tax liabilities that put them in a situation in which they're not able to pay their own bills.

On behalf of everyone on the committee, I think it's fair to say that we thank you for the efforts you're making. There's much work to be done, but progress is always good to see. Thank you for that.

I want to go back to the word we've talked about a lot: culture. I don't want to call the culture a scapegoat culture, because when you say “scapegoat”, there is the implication that it's not deserved. The culture, however, is I think blameworthy at least and responsible for some of the shortcomings.

Mr. Ferguson, you're the one who put this word or concept into our committee's deliberations with your second report. How would you characterize the culture that was in place during the eight-year frame of your second report, from 2008 to 2016—if you could characterize it, even?

[Michael Ferguson]

You cannot capture a culture in one word. There are many different ways of looking at it. In the message I delivered, I talked about a number of different things. Again, as we discussed earlier, one of those, particularly when you're dealing with something such as a payroll project, is that in government, back office administrative projects are in general not government's favourite types of project. I think they are by definition controlled very tightly on things such as budget and timeline, but it is very difficult to establish how much it's going to cost or how long it's going to take. When you're doing a complex IT project, it's a very difficult thing to do up front. I think that's one aspect.

The other aspect is that in general when there are going to be budget savings from a project, governments have a tendency to try to take those out of departments too early. We also see—and I think Phoenix illustrates it—that sometimes when people are responsible for something, they fall back on looking at the policies and follow the policies from a form perspective rather than a substance perspective, so that they can say they did everything in the policy, but without necessarily making sure they were doing it with the intent with which the policy was requiring it to be done.

I think, then, that there are many different aspects of the culture. As I say, for me it was a reflection upon the fact that somehow Phoenix happened. Despite all the different controls and all the different procedures and policies in place, somehow Phoenix happened. I'm not trying to say that my characterization of culture is right, but I think there needs to be a discussion about how it was that Phoenix was able to happen, even though all of those controls and restrictions were in place. Do people feel that those controls are in fact too restrictive and therefore need to be able to say, “We followed the policy”, and be able to defend themselves by saying that?

I think there's a lot of thinking and discussion that needs to go on about the culture.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

I like the concept you introduced of form over substance. Is that to suggest that a public servant, when stuck with a dilemma in the implementation of this program, would refer to the policy to figure out what to do instead of picking up the phone and talking to somebody? Is that part of the problem?

[Michael Ferguson]

I think part of the problem is more that they look to the policy. The policy tells them to do something, and then they do it in a way that they can argue fits the form rather than the substance.

In the Phoenix situation, the example I would give would be that the senior executives brought in S.i. Systems to do an external review. S.i. Systems did their work and identified some issues, but their work was controlled essentially by the people responsible for the project and they reported to the people responsible for the project. The substance for why an external review was done was to get essentially an independent and objective view, and that review should have been done in reporting directly to the deputy minister rather than to the project executives.

It was a case of saying, okay, the policy requires us to do this, and we will do this, but it was not done in a way that was really respecting why the policy was saying it should be done.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

You alluded to this in your report.... Actually, you didn't allude to it; you expressly said there was a miscommunication, I think. I don't want mis-characterize it, but I'm going from memory. There was a mistrust between the levels within the bureaucracy and then between perhaps the DMs and the political...or not a “mistrust” but maybe a reluctance to have open communication.