Government Operations Committee on Sept. 19th, 2016

[The Chair, Conservative, Tom Lukiwski]

Colleagues, we'll begin. Could we ask all of our witnesses to take their seats, please. Thank you.

Welcome to the 25th meeting of the Standing Committee on Government Operations and Estimates.

We have with us today, once again, the minister responsible for the Phoenix pay system, and a couple of her colleagues.

Minister Foote, welcome once again. I would ask you to please introduce to the committee the colleagues you have with you, and then I believe you have an opening statement as well.

[Judy Foote, Liberal, Minister of Public Services and Procurement]

Thank you, Mr. Chair. It's good to be back again.

With me is the deputy minister, Marie Lemay. Next to Marie is Gavin Liddy, the associate deputy minister. It's good to have both of them here with me today.

Good afternoon, bonjour. Thank you for the opportunity to provide you with another status update on the Government of Canada's Phoenix system.

At the outset, I will repeat what I have said numerous times, that what we are discussing today is not the fault of the employees at the Public Service Pay Centre in Miramichi, nor of government employees in general.

In the interest of brevity, my opening statement will focus on three main areas. First is the progress we have made, which is reflected by the current number of pay cases. Second is the actions we have taken since Deputy Lemay appeared before you on July 28. Third is a sense of what we expect pay administration will look like once it reaches a steady state.

As I've said many times, it is absolutely unacceptable for any public servant to not be paid or to be shortchanged for work performed. Fixing pay administration is a top priority and is certainly a top priority for me as the minister. I am committed to ensuring that federal employees get paid on time the money they are owed for work performed.

Today I can report that while there are employees still affected by pay problems, there has been steady progress since the committee last met. The numbers that follow are from the most recent complete pay period: August 24 to September 7.

In the priority one group are public service employees who informed us that they are not receiving any pay. There were actually 59 newly reported cases in that two-week period compared to 720 that were reported on July 18.

In the priority two group are those whose pay is affected by going on leave or exiting the public service. There were 335 new cases compared to 1,100 reported on July 18.

In the priority three group is the backlog of those employees receiving their regular pay, but missing supplementary pay. We started with 82,000 cases, and we are now at 67,500.

In late July our call centre received an average of 2,500 calls a day, and wait times were just under four minutes. The call centre is now receiving 1,250 calls a day on average, with a wait time of about five seconds.

You may be wondering why there is a discrepancy between the number of cases I just stated and the numbers that I reported when I appeared before you previously. As with any major IT system transformation, challenges were expected with Phoenix, and issues did arise. When Phoenix came online, the Public Service Pay Centre was faced with a backlog of about 40,000 cases. Early on, issues related to this backlog were, for the most part, manageable. However, reported pay problems outpaced our capacity to respond, which is why the department took decisive action and hired additional employees.

Since July 28, one of the two main sources of problems with the implementation of Phoenix was the large backlog of unprocessed pay requests. As you heard last time, four additional temporary pay units were set up to handle the backlog and allow the pay centre to deal with incoming pay requests and new cases. As of late July, 57 compensation advisers had been hired to work at the temporary unit in Gatineau, and at satellite offices in Winnipeg, Montreal, and Shawinigan, and those four offices were still being set up. They now have been up and running for several weeks and we now have over 200 employees—220 to be exact, and that number will go to 250—in place who are becoming more proficient with every case they handle.

The other major source of pay issues relates to the learning curve of Phoenix users. Deputy Lemay explained in July that when the department introduced Phoenix it underestimated the amount of training required. The implementation of Phoenix was much more than a new piece of software. It fundamentally changed the way government human resources need to operate. Much more should have been done to plan and prepare for the significant shift. Resources that were allocated for the implementation of Phoenix were not sufficient to ensure a smooth and successful rollout.

To fill this gap, Public Services and Procurement is holding training sessions for human resources staff across the government. Fourteen sessions have been scheduled this month that address those most common for users. The sessions also allow the department to gather feedback, which is used to adjust training materials and find ways to enhance the system.

The department continually renews its website with updated tools, technical guides, and frequently asked questions. Deputy Lemay is working closely with her deputy colleagues, chief financial officers, and heads of human resources across government to identify the problems that are arising and how to solve them.

There is also a constant flow of information to human resources staff and Phoenix representatives across government to highlight ways to prevent common issues. As well, we have a process for continuously improving Phoenix.

The department is working with IBM and pay specialists to identify ways to help our pay advisers more efficiently process payments. Our goal is to make it easier for our pay advisers to get pay flowing to their colleagues throughout the government.

While these efforts are critical, they do not provide much comfort to those who have experienced pay issues. We are working tirelessly to help each and every employee experiencing a problem with his or her pay. No employee need go without pay. I strongly encourage employees to request the emergency salary advances that can be provided by their own departments or through our Phoenix feedback form.

Employees who have received emergency advances or have been incorrectly overpaid will have these amounts recovered over multiple pay periods to reduce the associated financial burden. On September 15, Treasury Board Secretariat announced a process to reimburse employees for any out-of-pocket expenses incurred as a result of missing pay, such as financial penalties for missed or late payments. Employees can claim such expenses through their own departments using a form found on the Canada.ca website, as long as they have receipts and documentation.

Returning to the backlog for a moment, Deputy Lemay made a commitment to clear the backlog by October 31, and I am told we intend to meet that date. We are starting to see our satellite units becoming more operational and processing more transactions daily. The bulk of the transactions in the backlog should be addressed between the end of September and the end of October, which is when we will have the majority of our compensation advisers processing cases at full capacity.

Clearing the backlog alone will not bring us to what we call a steady state, however, and the temporary pay units will remain in place, and I have said that repeatedly as well. They will remain in place until we have reached steady state. We will have reached steady state when pay requests are processed efficiently, consistently, and with minimal errors.

We have made progress through the remedies we have put in place, but we still have a distance to go. Many partners have helped us get there. Key among these are the unions that have been instrumental in helping us identify problems and staff the temporary pay centre in Gatineau and the three additional pay hub units.

Deputy Lemay and I have visited the pay centre and met with employees in Miramichi. Employees heard it directly from me. They have my full support and in no way should they feel that this situation is of their making.

I have seen first-hand the hard work and commitment of employees involved with the Phoenix initiative. These employees are hard-working and dedicated to getting our pay system back on track. They have collectively stepped up to ensure that public service employees throughout the country are being paid for their work.

In June, I requested a review by the Auditor General of Canada, and I am pleased to report that he has agreed to perform a financial and performance audit of Phoenix.

The department is also committed to an independent assessment of the planning and implementation of Phoenix, which, of course, dates back many years. What has been learned from this experience will be used in planning for future projects.

We're pleased to be here today to answer your questions, and I look forward to having the opportunity to do so.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, Minister, and colleagues. It is my understanding, Minister, and perhaps you could confirm, that you will be able to be with us until 4:30 p.m.

[Judy Foote, Liberal, Bonavista—Burin—Trinity, NL]

I will.

[The Chair, Conservative, Tom Lukiwski]

Madam Lemay and Mr. Liddy will be with us for the second hour, from 4:30 p.m. until 5:30 p.m., after which we will go in camera for some committee business.

Minister, we'll follow the usual procedure for questions and answers. The first round of questions will be a seven-minute round. We'll start with the government side. Madam Ratansi, please, for seven minutes.

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

Thank you, Minister, for being here, and thank you for the update. It is commendable that you're trying to do your best to mitigate some of the challenges and problems left by the previous government. It's an interesting situation because people don't understand what really happened. A Globe and Mail article really paints a very bad picture. It says:

Canada isn't some tin-pot country that can't pay its workers.... It's a G7 country.... Stephen Harper's Conservative government was eager to demonstrate it could wring billions of dollars of savings out of a fat government bureaucracy it neither liked nor trusted.

And it brought in this Shared Services Canada and the Phoenix system. The article goes on to say that both have been “unmitigated disasters”.

How do you put in a system without training the workers and by firing 1,000 payroll advisers who have now taken on different jobs? I think it is important for people to realize that your department and the government have been working hard, but there is still more work to be done. As you mentioned, it is important that no employee goes without pay. I understand that you have opened up satellites in Winnipeg, in Shawinigan, in Montreal, and a temporary call centre in Toronto.

Could you tell me, in your current assessment, how long those centres will be left open?

[Judy Foote, Liberal, Bonavista—Burin—Trinity, NL]

Thank you for the question.

Early on I committed to keeping those centres open for as long as we needed to keep them open, the idea being that we're looking at hiring 250 compensation advisers. We need to be able to make sure that we get to what we call a steady state. The definition of that steady state we don't have yet; of course we're looking to past practice to determine what was a steady state, but with a new system, we'd like to think that it will be better than it has been in the past. In order to get there, in order to make sure that as few employees as possible go without pay for work performed if all of the information is entered correctly.... We want to make sure that these individuals we've hired to help our employees, particularly those in Miramichi who are doing a really good job but who need some help from time to time, are kept until we no longer need them.

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

For the backlog that will be targeted to be covered by October 31, do you think your department will be able to meet the deadline of October 31?

[Judy Foote, Liberal, Bonavista—Burin—Trinity, NL]

That's a question I continue to ask. It's really important for me as minister to have that comfort that we are doing everything we possibly can to clear up that backlog, bearing in mind that 40,000 of the 82,000 actually came from the previous system; they predated Phoenix. This is why we ended up with 80,000 as a backlog, because, of course, when you brought a new system on stream, you had the employees in Miramichi who were trying to deal with not only the daily cases that they had—employees who were needing to be paid—but they also had the backlog of 40,000 to deal with. That just created more of a backlog. That's how we ended up with the 80-odd thousand.

We are working really hard and we're finding that the more experience the public service employees who are working on the Phoenix system have, and the more they get to work on the system, the better they are at doing it. It is not through no fault of their own that they're not better at doing it, but I think you indicated at the outset that one of the things we have found is that the employees who were expected to do this work were expected to do so without sufficient training.

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

There's the issue of sufficient training and the ones who had training were let go and they found other jobs. The lack of planning, the lack of testing the system, and the lack of dollars now lead you to not realize any savings. In fact, the Harper Conservatives had realized a savings of $70 million, which will probably now go into millions in deficit.

Do you have any sense of how much it will cost you and your department and the government to repair the damages done by the previous Conservatives?

[Judy Foote, Liberal, Bonavista—Burin—Trinity, NL]

What we're looking at is that the previous government looked at saving, I think, $70 million annually, so this year they would have been saving $70 million as a result of the introduction of Phoenix and, yes, the elimination of some 700 positions for compensation advisers. There's that and the decisions that were made around the training that was required, but not determined to be a path that the previous government should have gone down....

Then we're going to look at spending in the realm of about $50 million, I would say, so instead of the $70 million, whether or not we'll even realize on the $20 million we don't know, because, as I said, Treasury Board has already introduced measures that will enable them to help those employees who are finding themselves hard done by because of issues associated with Phoenix.

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

Minister, when I was in Newfoundland, the staff at Miramichi were very stressed out. I understand you visited them. Do you have a sense of their well-being now? Have you given them an assurance? Have they received extra help and extra training? Are they now in a good place?

[Judy Foote, Liberal, Bonavista—Burin—Trinity, NL]

We are working very closely with the union, and we need to, because of course they are there and they know exactly what stress levels the employees are experiencing. I met with them and I can tell you that they want to do their very best and they're working really hard. We've put in place employee assistance personnel to work with them to help them particularly to deal with stressful situations.

I went there purposely to tell them that what is happening with Phoenix is not anything of their making, that in fact this is happening, and that, really, in terms of the measures that should have been taken in advance when the previous government decided they were going to go with Phoenix, maybe a little more thought should have gone into those measures, to make sure.... If you have a vision for a new payroll system, the focus should not be on realizing savings. You should first realize your vision and then get your savings once your vision has been realized.

[The Chair, Conservative, Tom Lukiwski]

Thank you, Minister.

Mr. Blaney, please, for seven minutes.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Thank you, Mr. Chair.

In her statement, Ms. Foote told us that everything would be resolved by October 31. Rather than doing partisan politics like my friends across the way, I want to say that I intend to table a motion. The people listening to us are the thousands of Canadian workers who have not been paid and are chasing their money.

Madam Minister, you asked me a little earlier if I had had a good summer. I had a good summer because, happily, I received the remuneration I was due. However, that is not what happened to one of the chief engineers of the coast guard, who is missing $8,000, or to a sailor who does not earn very much if you compare his salary to that of other federal employees, who has received no pay and cannot pay his mortgage or rent or buy groceries. In addition, you are surely aware of the pathetic case reported by the media of a woman who was coming back from sick leave because of breast cancer. She has four children and is going through an administrative nightmare.

These people did not have a good summer, and they are the reason we are here today. We are not here to do partisan politics. We want solutions. That is why, Mr. Chair, I intend to table a motion to invite the minister to report on the status of the situation, and her schedule. This situation is a disaster, Madam Minister. It is an absolute shambles.

Madam Minister, this is shocking. We have had the opportunity of hearing you, as well as Minister Brison. I think we had the wool pulled over our eyes, because we were told that everything was fine, thank you very much!

On March 10, the Deputy Minister of Public Works and Government Services talked about popping open the champagne. We have to put the champagne back in the refrigerator, because Canadian families have not been receiving their paycheques, and they need them.

On April 19, a month later, we were told that even if problem cases totalled only 1%, they would not launch the system. One per cent of 300,000 public servants means 3,000 people. There were 80,000, and now there are 60,000. Things are not going well at all.

Madam Minister, you knew from the beginning that the pay system was not ready to be implemented. Why did you give the go-ahead when you knew that this was going to create a complete shambles? I am going to put my question in English to facilitate understanding.

Why have you decided to give the green light to the implementation of Phoenix despite having been briefed on potential risks which could threaten the financial livelihood of Canadian families?

[Judy Foote, Liberal, Bonavista—Burin—Trinity, NL]

Thank you for the question.

First, let me correct something you said at the outset. At no point did I say that come October 31 everything will be solved. That is not what we said. We said that the backlog of cases, the 82,000, is what the department is telling me will be solved.

That doesn't mean we won't continue to have challenges. We are talking here about a payroll system of 300,000 employees. There is no payroll system in the country, I would expect, where you don't have challenges if you have a payroll of even half that magnitude.

What we are telling you is that when we get to what is referred to as a steady state, where you know you're going to have some challenges but nothing of the magnitude we have now.... The reality is that we will always have challenges. Will we have thousands of people going without pay? I hope not. That's certainly not where my head is.

I have said repeatedly that it is totally unacceptable for any public service employee to go without pay for work performed. To suggest that it would be acceptable to anyone...it's certainly not. I too have seen the stories that you have referenced. My heart aches for those individuals who are impacted. I too have constituents who are finding themselves in the same situation.

Of course it's not acceptable and we are doing everything we can to deal with that. When you talk about hitting a green light, what is really interesting is if you look at the decision made by the previous government.... I know that you have referenced partisanship. I try to steer away from that, because my issue is to solve the problem. My issue is to not continue to point fingers, but the reality is that what we inherited meant that 700 compensation advisers had been let go by the previous government.

Employees who had been doing that very work—you're now asking why the work is not getting done—were let go by the previous government. It's kind of hard when I ask, “Are you sure this is going to work? Are you sure I'm not going to face issues here? Are you sure that employees are not going to go without pay? Are you sure we're ready to go with Phoenix?”, and I'm told every time, after every briefing note, “Ready to go”, “Ready to go”, “Ready to go”. That is based on the information that would have come from the previous government's decision to implement Phoenix.

You're asking me questions here. The reality is that if those employees had not been let go, if the vision had been allowed to proceed without trying to realize $70 million in savings, I'm expecting that we would not be finding ourselves in the same situation we're in today.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Madam Minister, whether—

[Judy Foote, Liberal, Bonavista—Burin—Trinity, NL]

It is mine to fix, and I'm going to fix it, with the department.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Well, I expect that you will fix it, and I would really appreciate it if you would come back here a month from now and confirm what you said just a few minutes ago regarding the backlog that your deputy minister has committed to eliminate, eliminate, eliminate. I have here a fancy chart, and let me see where it is. I just have to go to your website. This is the backlog: 67,500. These are those who are waiting to get paid for what they did, for what they earned and what they honestly deserve to be paid.

Madam Minister, I disagree with you on whether we have a problem of trust or a problem of judgment, whether you were misinformed, which is a big problem, or whether you made the decision...and this is what we are told: that you had your civil servants telling you the system was not ready; you had the consultants telling you the system was not ready. Now we have entered into this. We are into this mess. What is even more frustrating for us here on this position is that we were told all along the way, “Oh, it's minor; we have just a little emergency, and we are settling this, and only a couple of dozen were affected—”

[The Chair, Conservative, Tom Lukiwski]

Mr. Blaney, excuse me, but I'm going to have to interrupt there. I suspect you could go on for quite some time, and I'm sure the minister would respond accordingly, but we do have some time constraints before us so that we can have all members ask questions of the minister.

Minister, I think you understand where Mr. Blaney is coming from. You may want to phrase a bit of a response in your subsequent answers, but for now we are going to Mr. Weir, please, for seven minutes.

[Erin Weir, NDP, Regina—Lewvan, SK]

Thank you.

Madam Minister, the last time you appeared before this committee I asked about the Phoenix pay system and you indicated that there were only 77 unresolved cases. After Parliament adjourned, the government acknowledged that there were 80,000 employees who had been paid incorrectly but promised that would be rectified by the end of October.

You've repeated that date today, but it strikes me that with 67,500 outstanding cases the government is not actually on track to resolve that backlog by the end of October. I wonder if you could speak to that timeline of going from 80,000 in July, to 67,000 in September, to having it resolved by October.

[Judy Foote, Liberal, Bonavista—Burin—Trinity, NL]

Thank you for the question.

I am as on top of this as you expect me to be and want me to be and am asking the same questions, because I need the assurance—and the employees who are going without pay need the assurance—that they are going to be compensated for work performed. There's not a day goes by when that question doesn't get asked: are we going to meet the October 31 deadline? I ask that question of the deputy minister. I ask that question of anybody who has anything to do with the Phoenix system. I am told that, based on the number of additional employees we have hired, looking at the number of employees who are getting paid as a result of the additional employees having been hired, and looking at the efficiencies that are being realized in Miramichi as employees become much more familiar with the system, the October 31 deadline is a real deadline.

We are talking about the backlog, and you understand that, because I think there was some concern—

Yes?

[Erin Weir, NDP, Regina—Lewvan, SK]

So you do have confidence that the 67,500 cases that are the current backlog will be resolved by the end of October.

[Judy Foote, Liberal, Bonavista—Burin—Trinity, NL]

I have—

[Erin Weir, NDP, Regina—Lewvan, SK]

It's not just that you're being told that. You yourself believe that deadline.