Government Operations Committee on Dec. 6th, 2018

[The Chair, Conservative, Tom Lukiwski]

Colleagues, it being 3:30, we'll convene this meeting.

I want to welcome Minister Qualtrough back to our committee.

It's good to see you again, Minister Qualtrough. It's been a while. You never phone; you never write. It's good to have you here.

[Carla Qualtrough, Minister of Public Services and Procurement and Accessibility]

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Minister Qualtrough, I think you've appeared before enough committees to know the procedure. We'll be asking you to introduce the officials who are with you and then commence with your opening statement, which will be followed by questions from our committee members.

Madam Minister, would you care to introduce your officials and begin your statement?

[Carla Qualtrough]

Thank you.

Hello, committee members.

Joining me from Public Services and Procurement Canada are Les Linklater, associate deputy minister, human resources-to-pay stabilization; Michael Vandergrift, associate deputy minister; Marty Muldoon, chief financial officer, finance and administration branch; and André Fillion, assistant deputy minister, defence and marine procurement, acquisitions program.

From Shared Services, we have Ron Parker, president; Sarah Paquet, executive vice-president; and Denis Bombardier, chief financial officer.

May I proceed?

[The Chair, Conservative, Tom Lukiwski]

Committee members, I just want to remind you that we are televised.

Please, Minister, the floor is yours.

[Carla Qualtrough]

Mr. Chair and committee members, I welcome the opportunity to appear before you this afternoon to discuss the 2017-18 supplementary estimates (A) for Public Services and Procurement Canada and Shared Services Canada.

As many of you are aware, both departments play an integral role in the federal government by supporting the operations of other departments and agencies in providing important services directly to Canadians. To support those operations, we are requesting $185.9 million in supplementary estimates (A). This includes $60.9 million for Public Services and Procurement Canada and $125 million for Shared Services Canada.

Allow me to begin with our request for Shared Services. SSC provides modern, reliable and secure information technology infrastructure services in support of the digital delivery of programs and services to Canadians. Of the $125 million that the department is seeking, $97.6 million will support projects that are mission-critical to Government of Canada IT operations. Examples include the migration of key government applications that support services to Canadians into more secure and modern public cloud solutions or enterprise data centres.

To date, the department has closed down over 160 legacy data centres that presented significant security and service risks to the Government of Canada and opened three enterprise data centres. This includes the new, state-of-the-art facility in Borden, Ontario, which is the Government of Canada's largest enterprise data centre and the result of a successful public-private partnership. It requires no service disruptions for maintenance and provides greater physical and cyber security for Canadians' personal information.

These supplementary estimates also include $14.6 million to expand and support information technology services at Immigration, Refugees and Citizenship Canada.

These investments are part of the government’s strong commitment to ensure we are properly resourced to address evolving IT needs and opportunities.

I am continually impressed by the tremendous determination and hard work of SSC's employees in meeting the technology needs of its customer departments. Whether it's protecting government systems against security breaches, supporting our immigration officers at points of entry, or implementing the fastest recorded computer platform in the government to support timely and accurate weather forecasts and warnings, the department plays a crucial role in improving services to Canadians.

But perhaps the best way to sum up the department's progress is by looking at its customer satisfaction survey results. Since 2015, customer satisfaction has been consistently trending upward—something I am particularly proud of. This is a direct result of the hard work of SSC officials and appropriate government investment in the organization.

From the beginning, our government committed to delivering common IT infrastructure that is reliable and secure, while at the same time providing departments what they need in order to deliver services that are timely, citizen-centred, and easy to use. That is exactly what we are doing.

Let me now turn to Public Services and Procurement Canada.

As announced in budget 2018, responsibility for the build in Canada innovation program, or BCIP, will be transferred to Innovation, Science and Economic Development Canada at the end of the fiscal year, as part of a broader initiative to streamline and simplify the suite of innovation programs across the federal government.

Of the $60.9 million we are requesting for the department, $39.8 million is for the BCIP. This money will fund the first of four years for the renewed BCIP program, so that we can build upon its success and meet those high demands going forward.

As this committee heard directly during the procurement study, BCIP helps Canadian businesses bring their innovative projects or services to market. It does this by matching them with federal departments and agencies that can use a company’s product, helping to bridge the pre-commercial gap by providing innovators with a successful first real use of their pre-commercial innovations.

There have already been 353 contracts, worth $163 million, awarded under this program; 80% of the firms that benefited from the program brought their products to market, and 78 of those products have been exported to 48 countries. Simply put, we know the program works, and the volume of submissions is rapidly growing. I can tell you that we are encouraged by the increasingly high demand for this flagship innovation procurement program.

On that note, I would like to thank this committee for its recommendations on procurement modernization, including BCIP.

I now turn to our request of $13.6 million for continued efforts to stabilize the Phoenix pay system.

This request, which includes $11.8 million transferred from last fiscal year, will fund ongoing functional and technical support to the pay system. This work is within the scope of the contract between the federal government and IBM. It also includes $1.8 million for funding to increase support services to employees with pay issues within PSPC. This item represents PSPC’s portion of the $25 million announced in budget 2018 to hire more staff to support employees within the department on human resources-to-pay issues.

As I’ve said before, I remain fully committed to ensuring that Canada’s public servants are paid accurately and on time. There is no greater issue that continues to face the public service, and our government has no higher priority. That’s precisely why we have significantly increased our capacity to address employee pay issues.

Since Phoenix was launched, we have nearly tripled the number of compensation staff, from 550 to more than 1,500. This includes the 700 positions eliminated by our predecessors. This is but one of the suite of measures we’ve put in place to stabilize the pay system.

We're also implementing innovative ways of working—including a new approach called pay pods, which I described during my appearance in May.

Unlike last year, we are no longer at the stage of diagnosing problems. Instead, we are in the process of optimizing our systems to meet the needs of compensation centre staff, unions and employees using the Phoenix system.

Pay pods group together teams of pay specialists that exclusively service specific departments and agencies.

For the departments involved in the pilot project, we have seen a substantial reduction in the backlog and the number of employees with pay issues has dropped significantly.

With this proven success, we're now in the process of implementing pay pods across government. We are rolling out pay pods so that by mid-2019, all 46 organizations served by the pay centre will be transitioned to the pay pod model. As of October 2018, half of all pay centre employees are now served by a pod.

With the actions we've taken, we are now starting to see a steady decline in the case backlog. In fact, we've seen more than a 21% reduction in the queue since January 2018, even as we've taken on additional work to process $1.5 billion in retroactive payments for employees. Said differently, we've been able to decrease our queue of transactions awaiting processing by about 130,000 transactions.

Even greater improvements are seen when we focus on the departments with pay pods. Since January 2018, pay pod departments have seen a 23% decrease in backlogs. We are optimistic that our efforts will continue this positive trend.

The next item I would like to discuss is the $5.5 million we have requested for the federal contaminated sites action plan. That amount would be transferred to two Alaska Highway projects. This important roadway stretches nearly 2,500 kilometres across northern British Columbia and southern Yukon into Alaska, and it is key to the economic prosperity of the regions it serves. This funding will help us to continue to ensure the highest standards of safety and environmental responsibility as we undertake important renovation work.

The last of PSPC's requests is $2.5 million to better support the Government of Canada's digital advertising fund. The fund is administered by the Privy Council Office in accordance with Treasury Board Secretariat policy, and managed by my department through our online advertising unit. Created in 2013, the digital advertising fund aims to use digital advertising to communicate with Canadians rapidly about major announcements and priorities, including unforeseen issues. The increase in funding would allow departments and agencies to better communicate on emerging issues related to things like health and safety recalls.

Mr. Chair, as you can see, PSPC and SSC have diverse mandates, and the nature of our funding requests reflects the numerous ways that our departments touch the lives of Canadians.

I am proud of the unique role our departments play, and I am deeply grateful for the talented and dedicated public servants that have brought their skills to PSPC and SSC.

We look forward to your questions. Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you, Minister.

Before we commence with questions, I just want to reconfirm that you are with us for the first hour, as I understand.

[Carla Qualtrough]

Yes.

[The Chair, Conservative, Tom Lukiwski]

Your officials will be with us for the last hour.

[Carla Qualtrough]

Yes.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We will start with our seven-minute rounds.

Madame Ratansi, go ahead.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you.

Thank you, Minister, for being here.

I know that the supplementary estimates (A) have already been voted on in the House, but I'm glad you're here because we have a few questions that arise from your presentation.

You are requesting $11.8 million for funding of the “functional and technical support to the pay system”. I understand that the backlog has dropped by 130,000 since January 2018. Could you explain what efforts are being made to further reduce the backlog quickly?

[Carla Qualtrough]

Thank you for your question.

As I said in my speech, we are taking a real client-centred approach to addressing pay issues. We have recognized that it's better to address employees as a whole and to deal with all of their individual transactions. That is what has happened through the pay pod model.

I will remind this committee that it was in fact employees in Miramichi who came up with this concept in the first place. I'm very pleased that it is rolling out as successfully as it is. We are trying to bring departments online as quickly as we can, as their capacity permits, and we intend to have pay pods serving all departments serviced by the pay centre in early spring of next year—it depends how you define spring, I suppose, but by May of next year.

Les, I don't know if you want to add anything.

[Les Linklater, Associate Deputy Minister, Human Resources-to-Pay Stabilization, Department of Public Works and Government Services]

We are also continuing to maintain and increase our capacity in terms of human resources, both in Miramichi and in our regional offices. An important development over the course of the last year has been the establishment of our client contact centre in Gatineau, with 200 staff who have access to the Phoenix system and to the case management tool. They are now able to provide first-point-of-contact response and assistance to staff who are calling, for a certain number of transactions.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you.

Your budget also includes the 700 employees who were fired by the previous government. Have you re-hired them?

[Carla Qualtrough]

Yes. As I said, we have increased capacity from the 550 who were in place when we launched Phoenix to approximately 1,500. These are certainly not the exact individuals because some, of course, had moved on or retired, but we have replaced those individuals.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

In terms of your pay pods, you said that the initiative has been suggested by the employees themselves. You are rolling out pay pods to all 46 organizations. When, approximately?

[Carla Qualtrough]

As of October of this year—so just last month—we have pay pods servicing approximately half of the clients served by the pay centre, so approximately 110,000 employees. By next May, all employees serviced by the pay centre will have pay pods in place.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Can you give an update on how you plan to roll out those pay pods? You suggested that there's been a decrease in backlogs by 23% through this pay pod system. Is it the combination of pay pods and customer services that you have adopted?

[Carla Qualtrough]

Les and his team have done a lot of work to identify the operational readiness of a department or an agency to be able to deliver through the pay pod model. Working with departments and agencies, they have basically determined a rollout list of when a certain department or agency will be getting a pay pod.

A very interesting thing about the pay pod model is that it's quite nimble, in the sense that it responds to the needs of the individual agency or department. Maybe you can give an example. Some are serviced internally. It's very agile.

[Les Linklater]

Indeed, for pod zero, the pilot pod that was set up about a year ago, in December 2017, we have been keeping with the principle that new never becomes old. As new intake and new transactions come into the pay centre, to the pod, those are dealt with first. Any spare resources that the pod has over the course of a pay period are directed to the priorities of the individual departments, as the minister flagged. Some departments choose to do more complex cases. Others look at older cases, but really they set the priority, provided we are able to stay on top of the new intake.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

The Phoenix system has been giving a lot of constituents a lot of headaches, especially with respect to the CRA and the T4 slips. Now that we are coming to year-end, could you tell me what work is being done for the upcoming tax season and what lessons have been learned so that our constituents are not crying and being chased after by CRA?

[Carla Qualtrough]

We're definitely building on the improvements and the lessons learned over the past three years, and we have been for some time. In fact, I'm not sure the work ever stopped from last season. We've been preparing for this upcoming season. CRA, TBS, unions and employees themselves have all been very focused on ensuring that we address any potential issues with T4s, whether it be employees identifying overpayments or anything else.

Les, is there something you'd like to add?

[Les Linklater]

We have a very detailed operational plan with the CRA and their partners. We have already been doing dry-run testing to be able to produce the T4s in February. To ensure system stability, we've put an operational freeze on any further system changes during the period between now and the release of the T4s. The inputs that we enter into the system will result in appropriate and correct T4s for staff.

We're also working with unions and Treasury Board Secretariat to make sure that staff are aware of their responsibilities around reporting overpayments. We're also getting ahead of that curve to ensure that we're lowering the stress and providing an opportunity for staff to repay net overpayments as opposed to the gross.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Do the technical issues that were there in Phoenix remain? Does IBM continue to be a good partner when it comes to addressing the Phoenix issues?