Government Operations Committee on Nov. 29th, 2016

[Kelly McCauley, Conservative, Edmonton West, AB]

I'm pretty sure that at a previous committee Public Services stated that you did not get a copy, or is it that you got a copy and you didn't inform the minister?

[Gavin Liddy]

No. I got a copy of the draft report on the 29th, and we did not pass it on to the minister because we felt that we had addressed all of the issues raised by Gartner. I'll quote:

Gartner has identified only one criterion with a high probability of occurring, and a high negative impact....

That was with respect to testing, and it was based on interviews and incomplete knowledge of the people who were interviewed. So when we went live—

[Kelly McCauley, Conservative, Edmonton West, AB]

“Departmental testing—”

[Gavin Liddy]

—we had—

[Kelly McCauley, Conservative, Edmonton West, AB]

Let me finish: “Departmental testing has achieved approximately a 50% pass rate.”

[Gavin Liddy]

Yes, which is incorrect. That was based on interviews with people who are in departments and who weren't aware of what we had actually done.

We ran 16,000 tests. When we went live, we had 124 pay and pension defects remaining, none of which were critical. In the regional pay system that we were running, we were working with over 1,000 defects. We did 150 releases a year. We—

[Kelly McCauley, Conservative, Edmonton West, AB]

We have asked repeatedly in this committee—Mr. Weir asked repeatedly—if we could not have delayed, and we were getting “no, no, no”, that we had to go ahead. It's pretty clear in the Gartner report, which said yes, apart from reputation, we can delay a second time, and it identifies that you had better have these contingency plans addressing the exact same thing that the minister has been going on about on the staffing issues. Right in here, it said to be prepared for it, that they could not find the plans, and yet we still went ahead. I have to ask why.

[Gavin Liddy]

Because the system was ready to go ahead, and we were dealing with an old regional pay system that was failing repeatedly and a huge error rate. Then, when we did cut over, we ran three pay cycles, and the cutover was successful. The problems we've had are basically when—

[Kelly McCauley, Conservative, Edmonton West, AB]

What about the issues of contingency and the issues of if we have to delay? You need to have a contingency plan for the staffing changes, but no plan was done and you went and pulled the trigger. The department—

[Gavin Liddy]

No. There was a contingency—

[Kelly McCauley, Conservative, Edmonton West, AB]

—and this government pulled the trigger anyway and went ahead.

[Gavin Liddy]

If I could answer the question, Mr. Chair....

[Kelly McCauley, Conservative, Edmonton West, AB]

Please.

[Gavin Liddy]

We ran three pay cycles after we first cut over. We did have a contingency plan. We augmented the pay centre staff by 10% to make sure we had capacity and, in a number of departments, which is referred to in the Gartner report, we had to change when we were rolling them out. That was the contingency plan, which we did adopt.

When we ran three pay cycles in the month of February, we felt—and this is what the previous deputy reported, and which we advised the minister of—that the system had actually worked. It wasn't until May and June that we realized the transactions were not being entered, and that the pay centre was behind schedule. That is when it emerged we had significant issues, but when we made the decision to cut over, we felt like we were ready. We felt we had resolved all of the issues raised by Gartner, even though we didn't get the report until January 29, and we were relying on the independent third party that was hired to do a systematic review of the process end to end and their advice.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

Madam Ratansi, you have five minutes, please.

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

Thank you, Minister, for setting the record straight that the overpayment offered during the 2012 to 2015 period was in the amount of $246 million. I hope that has been recovered.

Regarding the question that Mr. McCauley asked, I am looking at a letter that the deputy minister sent, which states:

The Department confirms that no outside consultants advised against implementing Phoenix....Independent reviews were completed by S.i. Systems, in alignment with the Treasury Board Secretariat policy, prior to going live. S.i. Systems' report states that "[on] the basis of the evidence provided, the Review Team feels that the Transformation of Pay Administration initiative should proceed to the next phase—a two-phase deployment of Phoenix, as scheduled.

Then it talked about the benefits outweighing the risk.

Could you explain to me this contradiction between the Gartner report and the S.i. Systems report?

[Gavin Liddy]

I don't see it as a contradiction, actually. I think both reports found, at certain points, some of the same things.

S.i. Systems did a more systematic review. It interviewed and it looked at data it gathered. The Gartner report was based on interviews with departments exclusively. We felt like we addressed all of the issues that were raised in both the Gartner report and the S.i. Systems report. Ultimately S.i. Systems recommended that, on balance, we should proceed, since the risks of remaining on the old system were—

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

When the interviews took place with departments and the department's response was probably that it was not comfortable going live, could you tell me whether you had sufficient competencies or capabilities within the departments to take on such large-scale enterprise projects? Is it there? Is that why the department felt a little uncomfortable going live on Phoenix?

[Gavin Liddy]

In our case, we didn't feel uncomfortable. We thought we were ready to go. We had already delayed it.

I would also say that we felt we had the competencies to deliver the project. My predecessor had spent years in the department, in the compensation world. The person who is the lead of the project, who will come to the table shortly, is Brigitte Fortin. She had spent years—and they had already implemented a very complicated pension project, which serves over 800,000. We had no fundamental issues when we implemented that and in fact, the service levels are very high now and we've actually moved forward on that.

We felt that we certainly had the competencies and we felt that we had the right partners involved. We did a number of independent reviews. It wasn't just S.i. Systems. We also had Maplesoft come in and do a review in 2014. We felt that the delay instead of launching in October and December had bought us the time to resolve the remaining defects and get our partner departments ready to go.

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

Minister, do you want to respond?

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

I think part of the problem, and we've acknowledged this, and what became clear to us was that, in terms of the output through Miramichi, and this was no fault of the employees at Miramichi at all, there just wasn't sufficient training carried out with the employees. That, for me, was an issue when we talked about this, in that we need to make sure that our employees have the skill sets necessary to do the job expected of them.

I think the reality is that there was a decision made prior to the launch of Phoenix, when the department determined that it was ready to go. The training that had taken place through working with IBM was a train-the-trainer model. For anyone who knows, on a file of this magnitude, you really need to have more in-depth training of individuals who are going to be dealing with a payroll system as complicated as the one that we have with the Government of Canada, so that was an issue.

Right now, of course, what we've done as a government is we've made sure that our employees are trained.

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

I have a quick question.

When we were doing the study of Shared Services, the challenges they were facing was due to a lack of consultation to develop their IT transformation plan. Could you give us an update on what's happening there? Those are large initiatives that the government is undertaking.

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

I'm really pleased to report that the transformation plan has been completed. I am very pleased with the input that we have received. We've certainly consulted industry, but as well, there have been opportunities for Canadians to have a say on the transformation of Shared Services. The president is here, Ron Parker, who will be speaking after I leave.

We're really looking forward to having a system that is the right system for the Government of Canada, recognizing that anything we do in terms of an enterprise-wide system for government takes time. We have to be prepared to invest, as we did in the previous budget, because the resources just weren't made available. It's the same thing with Phoenix. These are enterprise-wide solutions that really do need to have the proper attention and resources dedicated to them for us to realize on the vision.

[The Chair, Conservative, Tom Lukiwski]

Thank you, Minister.

Our final intervenor will be Mr. Weir, for three minutes, please.

[Erin Weir, NDP, Regina—Lewvan, SK]

Madam Minister, experienced pay experts were laid off, in many cases because they did not want to relocate to Miramichi. How can you say it was a mistake to lay off experienced pay experts, but that it was not a mistake to relocate the pay centre to Miramichi?