Government Operations Committee on Sept. 19th, 2016

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

I have read the documents you sent us and I am struck by priority three. That is the table. We can see that on July 4, 41 employees were mentioned, and since July 28, the number referred to is 57. Did you have any trouble in this regard? You said you had worked with the unions to find other positions for these compensation advisors, but I imagine that when someone receives a notice from his or her employer that there is no more work, he looks for work elsewhere. Were there such cases?

[Marie Lemay]

In fact, there were all kinds of cases. It was not as easy as you might have thought.

As you can see, at the outset, there was a plateau. We managed to add people because we opened offices here and there. In fact, there are now four. The unions helped us by allowing the employees who had received notices to come back without being penalized.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Successfully attaining your objectives by October 31 is entirely linked to the number of employees you are going to hire. Are you going to be able to reach the objectives regarding the number of hires? I see that by September 26, you may have added 250 employees.

[Marie Lemay]

That is the plan.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

And have these 250 employees to be hired by the week of September 26 been given the proper training? Are they ready to work now?

[Marie Lemay]

That is an excellent question. In fact, people need several weeks to get used to the system. New employees are not totally autonomous from one day to the next.

You are referring to a type of curve that probably looks a little like a hockey stick. It is normal for it to change when it comes to the volume of transactions, or the productivity of satellite offices, because these employees are not fully operational on the first day.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Under priority three, as of October 5, you were to solve the problems of close to 40,000 people in the space of two pay periods. That represents a lot of people. It is half of your objective. Do you think you are going to make it?

[Marie Lemay]

I understand why we are asked that question a lot. This is not just based on our intuition. If you study this, you will see that as of the month of July, there were a certain number.

How are we going to manage to resolve all of the cases in the backlog? The same curve that applies to the compensation officers—the one that looks like a hockey stick—applies to the resolution of cases, but with a lag. That is why we still intend to resolve the cases that make up the backlog and affect 82,000 employees. We believe we are going to be able to do so.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

We saw in the media that certain employees are worried about their T4s. Has the department spoken to the Canada Revenue Agency about these 80,000 cases, since there could be some errors? Do you have a plan in place?

[Marie Lemay]

This is a topic of discussion within the federal government, whether we are talking about the Department of Finance, the Canada Revenue Agency, or Treasury Board. We are also discussing things with our partners the unions. This issue is very important for the employees, who want to solve these problems as quickly as possible, that is before the end of the year, so that the T4 forms properly reflect their remuneration for the year concerned.

The 200 employees who are going to work in the satellite offices are going to help us stabilize things. They can also help us to recover the amounts due. Our objective is to do as much as possible before the end of the year so as to reduce T4-related issues as much as possible.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

We know that there are holidays in the month of December. People leave on family holidays. It would be difficult for me to go back to my riding and tell people that I am very sorry not to know whether they will receive proper T4s by February 28, but that they will have to comply with the law in any case.

[Marie Lemay]

Allow me to go back to one of the issues.

Earlier, the minister explained that at the outset, when we were making emergency payments, we were applying a policy under which we recover an amount as soon as it is available. We stopped doing that because that approach was not very humane in light of the circumstances. We wanted to ensure that we were not automatically taking back the salary of people who had just received an emergency payment. We wanted to stagger that over several payments and several pay periods.

Currently, we are discussing things with the unions and our colleagues at Treasury Board so as to determine what this will represent. In fact, the longer things take, the greater the repercussions on the fiscal year and on the T4 forms. Consequently, we are going to try to resolve things during the current fiscal year.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Perfect.

How much time do I have left, Mr. Chair?

[The Chair, Conservative, Tom Lukiwski]

You have 20 seconds.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

[The Chair, Conservative, Tom Lukiwski]

I had Mr. Blaney on my list.

Mr. Falk, do you care...? If not, I'll go to Mr. Weir.

[Ted Falk, Conservative, Provencher, MB]

Sure. I care a lot.

[The Chair, Conservative, Tom Lukiwski]

I bet you do.

Mr. Falk, for seven minutes.

[Ted Falk, Conservative, Provencher, MB]

Thank you very much, Mr. Chairman.

Thank you, Deputy Minister, Associate Deputy Minister, and Assistant Deputy Minister, for coming to the committee.

This is a file that I'm not intimately familiar with, but I've been trying to pick it up. Certainly, I've been hearing about it in the media, and I've been hearing about it from folks in my riding. In fact, as recently as two weeks ago I was at an event in my riding and a federal employee asked when the Phoenix system would be fixed. He said that he was on parental leave and was still getting paid, but he was trying to be smart about it. He was putting the money into an account, he said, because he knows they're going to ask for it back.

There are obviously problems to fix. I hope everybody who's receiving payments and shouldn't be is as wise as that individual and is setting that money aside with the understanding that they're going to be asked to repay it.

As you know, people's paycheques are a very sensitive thing. In a construction company that I own, I employ close to 100 people, and there are a lot of things you can tamper with when it comes to employment. You can change people's job descriptions. You can change what they do. You can change their hours of work. You can change their roles and their positions, but once you've committed to paying them on a biweekly or monthly basis, that's like a sacred cow. We have electronic funds payments in my company, and I know from my own experience that when payment is due on Thursday at midnight, by Friday at 12:01 a.m. people are on their computers to make sure that money is in their account, because if it's not in the account, it creates a lot of problems. It creates problems with automatic payments that are due. It creates problems with cheques written on the understanding that the money would be in the account.

When that money doesn't show up in the account, it creates problems for the livelihoods of these people. It creates problems in their families because they get cheques that are bounced, they get damaged credit ratings, or they get overdraft charges at their banks. They get late payment notices and late payment fees, and their credit ratings are damaged.

I'm wondering about this. As a department, you've said that these employees are going to be compensated. How do you expect and intend to compensate for some of these things?

[Marie Lemay]

First, let me tell you that we are heartbroken when we hear these stories. We want employees to get paid and we are working so hard to fix the system and make sure that we get to our steady state as soon as possible.

We have done many things. One is that, to start with, we've tried to prioritize our work so that if employees do not get paid and should, they have a place to go. If they're not finding their way through their department, they come directly to us through some of the forms and processes we've put in place, so we can actually know and act on it. We've put some additional systems in place to make sure employees would have that. It's the same thing for the emergency payments. If they need them and can't get them through their department, we make sure they have a process by which we can help them get that.

Now, in terms of compensation, you may have heard that our colleagues at Treasury Board have put a system in place. A claims unit has been set up. On their website, they have some of the eligible expenses. There's an across-government process so that everybody is treated fairly and will be made whole.

[Ted Falk, Conservative, Provencher, MB]

It's encouraging to hear that.

How do you compensate somebody for a credit rating that has been damaged or for a cheque that may have bounced at a local vendor or merchant? Their credibility has been damaged in their community and in the places where they do business, and that kind of compensation is very difficult. That's one side of the coin.

The other side of the coin is something that I find very disturbing in just what I've been picking up here. Prior to the rollout of the Phoenix system, IBM raised caution flags as to the readiness of the system to go into full implementation. After that, Public Service Alliance of Canada raised cautionary flags about proceeding with the secondary rollout, but in all those instances, the department proceeded anyway.

What I heard here earlier is that you had a third party outside consultant. Also, did I hear correctly that the Treasury Board also had a consultant separate from yours?

[Marie Lemay]

I will let Mr. Liddy answer that, but I think it's important for me to make sure it's clear that nobody went ahead or recommended to go ahead with a system that we thought would experience the difficulties that we did. Yes, the implementation did not go as planned. We're not happy with that; we are doing everything we can to fix it, and we have to put a lot of measures in place, but if we had thought that would be the case, we obviously would not have proceeded with implementation.

[Ted Falk, Conservative, Provencher, MB]

Just before you answer that, when I look at it and I see that the developer of the program is sending up caution flags, the employee union is sending up caution flags, and you proceed anyway; you even proceed with the hiring of a third party outside consultant. That tells me that you recognized that maybe you needed to get a third opinion. That should have been another caution flag. That's three caution flags that were not heeded, yet you proceeded anyway. It seems kind of reckless that the department would have done that in the presence of those cautionary flags.

Now we have to hire additional folks to correct the problem. We have a problem. We have a mess. We have to fix it. We have to keep our employees happy. We have to do some damage control. What's it going to cost us? What are all these extra employees going to cost?

This system was supposed to save us money, to save the taxpayers money, but now it's going to cost extra money. Do you have a cost estimate for what all of this is going to cost?

[Marie Lemay]

We do. Maybe I'll let Gavin talk to the rollout of the system beforehand so you have the answers to your questions.

[The Chair, Conservative, Tom Lukiwski]

A short answer would be beneficial.