Government Operations Committee on Nov. 29th, 2016

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

We don't have a number on that at this point in time.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay.

Even if Phoenix seemed like the right solution at the time, knowing what you know now, would you acknowledge that it was a mistake to rush ahead with the implementation?

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

Clearly the payroll system that existed for the Government of Canada needed to be replaced. I think the issue, as I mentioned earlier, came from trying to achieve savings at the expense of employees. Phoenix was the payroll system that the previous government decided we should go with. The reality is that when you remove compensation advisers who are familiar with everything to do with government payroll, that becomes an issue.

In terms of the actual rollout, I was told that all the information that was needed had been looked at, that they were ready to go, and that we had nothing to be concerned about. In February, as the rollout happened, people seemed to be satisfied that it was working well. Then in April, I think it was with the second—

[Erin Weir, NDP, Regina—Lewvan, SK]

I think there were all sorts of problems reported in February. I think your government went ahead with phase two of Phoenix even though there were a lot of known problems in phase one.

I want to go back to your point about the importance of experienced pay advisers. Was it a mistake to locate the main centre in Miramichi, given that none of the people who had expertise on federal payrolls were located there?

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

I don't think it was the wrong decision. As I always say, it's important to make sure that we have federal employees outside of Ottawa. There's an opportunity in other parts of the country to have federal employees. I think that's important.

I think that if sufficient training had been done, we would not be having an issue today. If compensation advisers had been kept on in Ottawa to support the Miramichi centre, we would not be experiencing what we're experiencing today.

Locating the centre in Miramichi was not a mistake. The mistake was removing the compensation advisers who could support the employees that were in the Miramichi centre.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. Whalen, you have seven minutes please.

[Nick Whalen, Liberal, St. John's East, NL]

Thank you very much, Mr. Chair.

Thank you Minister for coming today.

It's clear from the testimony we're hearing today that, as with Shared Services Canada, the previous government left Canadians and government workers with a transformation initiative that was doomed to fail.

Compensation advisers were fired. Savings from pay modernization were already booked before they were really earned. Legacy systems were left understaffed. It's clear that the die was cast, but it would be helpful if you could explain to us what your staff officials told you would have happened had you wanted to stop the transformation initiative in February or April.

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

Clearly, the fact that 700 compensation advisers had been let go made it impossible for us not to proceed, because we did not have the human resources necessary to deal with payroll that we should have had. We were now down to 500-and-some employees in Miramichi. Actually, we probably didn't have 500 or even 600 until later, because only so many were brought in at a time.

That the human resources aspect was not considered—people with experience, people who know government payroll—was a real issue for us. We were training employees and making sure that they had a good appreciation and understanding of government payroll. At the same time, we were trying to deal with a backlog of cases. We were trying to deal with complicated cases. I think the big issue for us was the layoff.

Even if we had wanted to get some of these individuals back, they had moved onto other jobs. Some had retired. It was impossible to access the employees because they had gone onto other jobs.

[Nick Whalen, Liberal, St. John's East, NL]

Minister, you talked a bit about the backlog with Mr. Weir.

I read the synopsis of the current state of the queue and I guess they took a snapshot of a point in time on November 16. They said they would expect at steady state they would have 80,000 in the queue, and that they would be able to process 100,000 in the queue. It looks like with 200,000 in the queue, it should take six months to work through the backlog and get down to steady state. I'm concerned. Perhaps you can provide us with some confirmation that you're satisfied that the department isn't burying the hard cases as they seem to have done with the projections that were given to us in the summer, where the hard and difficult cases were buried, and now we have 15,000. Do we have confidence that they're not doing that in respect of the 200,000 in the queue under the new system?

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

I have no reason to believe that anything is being buried. When they started working on those 82,000 cases, I believe that clearly when they got down to the more complicated cases, it took much more time. I have no reason to believe that in the queue there are complicated cases, because we have put processes in place now to deal with these issues as they arise, compared to having inherited 40,000 cases that predated Phoenix.

[Nick Whalen, Liberal, St. John's East, NL]

Fantastic.

Earlier in our study into the Phoenix situation, we'd asked, I believe it was, Mr. Liddy, about who was letting go of the pay advisers, and who was responsible for the decision-making that led to almost 1,000 pay advisers being let go on the Friday before the election. I'm wondering whether or not you could speak to the advice that was given to your department immediately after having come in about those almost 1,000 people who were let go, the decision-making that went into their being fired.

It's my understanding that departments that chose to keep their pay advisers didn't have the problems. It was only those who made the very clear mistake to save money at the expense of workers' pay who have caused this crisis.

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

That's the problem that I think we all now acknowledge. Letting go of people with the experience to deal with the government payroll caused the problem. As I said, I don't think we would be here today having this discussion if these individuals had not been let go in the 45 departments that we brought together. The other 55 departments still have compensation advisers. They're not experiencing the same difficulty. We're all under the Phoenix payroll system, but they have the compensation advisers so that employees can deal with their compensation advisers. That's what we don't have in the other 45 departments.

[Nick Whalen, Liberal, St. John's East, NL]

Minister, after all of this, with various points along the way of people being unnecessarily or improperly being let go from the work that they were doing in managing the legacy system, do you have confidence in the advice that your officials are giving you?

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

The officials were given a job to do. They were told that the government payroll system was going to be replaced, and it needed to be. It was broken. There's no doubt about that. The problem I think was that it was based on realizing $70 million in savings annually. When that is the focus, or that is what you're being told—how to realize that $70 million annually—then you work according to the directive you've been given.

The reality is that to achieve that $70 million annually, it meant fewer compensation advisers, which makes sense if the system is up and running, but not before you've implemented the system. Realizing savings is a possibility when you put a system in place that you're comfortable is working properly.

The problem for us is that having Phoenix up and running without the support of compensation advisers to enable us to get to that steady state point where we needed to get to wasn't possible.

[Nick Whalen, Liberal, St. John's East, NL]

Do you feel now that officials throughout the PSPC are aware that they need to appropriately staff their legacy systems in the context of any transformation initiative so that we won't see this continually happening? I think this might be the third or fourth place we've seen this already in our first year.

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

I think it's really important that officials are able to speak clearly and inform those who are telling them that something needs to be done, of what steps should be taken to get there.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We'll go to five-minute rounds now.

Mr. McCauley.

[Kelly McCauley, Conservative, Edmonton West, AB]

Welcome back, everyone.

I think I can echo Ms. Shanahan's comment. I think we'd prefer at this point to be past this.

I have to state right off the top that I'm very disappointed that you commented that casting blame doesn't help public servants facing frustrating pay delays, and then you launched right into the blame game. It's very disappointing. I think if your government had focused half the time on fixing the system rather than on blaming the previous government, we wouldn't be here today.

You stated that it is because of the layoffs, yet your department still pulled the trigger and went ahead. We have the Gartner report, and I'll read from it: “Departmental testing has achieved approximately a 50% pass rate.” Gartner identified that the training hadn't been done. Yet the department still went ahead. We knew of the problems in advance, yet your department still went ahead.

On March 10, you commented on the process of going ahead with Phoenix as an “example of innovation” and the “future direction of government operations” and that it's “proven to be a success”. Your ADM at the time commented that it was a remarkable job and then later that it was absolutely a good idea to move to Phoenix. Yet now it's blame the past.

I'm just curious. How do you reconcile blaming the previous government when it was your government that pulled the trigger? If you knew of all these problems, why did you say, right after Phoenix started, that it was a success, and why did your department go ahead?

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

I would love for it to have been a success, and nobody is more seized with the issue of making sure that Phoenix is a success than I am. The reality is that no, I'm not interested in pointing a finger in terms of blaming—

[Kelly McCauley, Conservative, Edmonton West, AB]

Yet that's all we've heard from you.

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

—but when it's pretty obvious that the focus is on achieving savings versus keeping employees who know the system, that's really important to point out, which I've done.

[Kelly McCauley, Conservative, Edmonton West, AB]

Let me just ask why you did not step back. If that was the issue, why did you go ahead? Why did you not step back and say, “It's not ready. Gartner's aware that it's not ready.”

We heard from PSAC in January about their concerns.

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

At no point did either report, certainly the report I was shown, indicate that we should not proceed. In fact, the difficulty, I was told at the time, was that 700 employees had been laid off. Going back to not proceeding wasn't a possibility, because we did not have the human resources personnel to do that.

[Kelly McCauley, Conservative, Edmonton West, AB]

It just seems very odd, if we knew of these issues, that you still went ahead.

I want to bring you back to September 19. We asked you on September 19 about paying bonuses to the bureaucracy responsible for this fiasco, and you said at the time, and I'll quote you again, “I am not even versed in how the public service gets paid bonuses”.

It has been two months. I hope you've taken the time to be versed on the bonus system. I'd like to find out right now whether you've ruled out paying bonuses to those responsible for this mess. Have you paid out any bonuses for those responsible for this?

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

I'll repeat again that the ongoing pay issues are not acceptable. My focus has never been on paying bonuses. I have my personal opinion on performance pay for PSPC executives involved in Phoenix, but Treasury Board guidelines are clear. Executive pay is a responsibility of the deputy minister and the clerk.