Thank you very much, Madam Chair and members of the committee.
Thank you for this opportunity to discuss the main estimates and the departmental plan for Public Services and Procurement Canada. With me today is Les Linklater, our associate deputy minister, who joined us in early March; our chief financial officer, Marty Muldoon; and Lisa Campbell, our ADM responsible for our military procurement.
Let me first say that our hearts go out to the many Canadians who have been affected by the floods. As you know, our department is responsible for managing federal buildings and vital infrastructure. During the peak of the flooding, our officials closely monitored the situation to assess its impact on our bridges and on our dams.
We also worked closely with the Department of National Defence and other partners, and maintained contingency plans to assist them with any emergency requests for suppliers such as sandbags.
As you know, Public Services and Procurement Canada, or PSPC, delivers a broad range of services that are essential to the federal government's day-to-day operations, from real property management to procurement to translation.
As the government's central purchasing agent, our department strives to use its spending power to generate meaningful economic and social benefits for Canadians.
For example, it's estimated that contracts awarded to date through the national shipbuilding strategy will contribute close to $7.7 billion to Canada's GDP and create or maintain more than 7,000 jobs a year, on average, between 2012 and 2022. The strategy is spurring the economy and equipping our navy and coast guard with the ships they need to protect and serve Canadians.
Public Services and Procurement Canada is also home to the translation bureau, which supports the federal government's efforts to communicate with Canadians in both official languages. In February, Minister Foote announced measures to strengthen the bureau's capacity to carry out its mandate.
Two days ago, I announced the appointment of Stéphan Déry as the new chief executive officer of the translation bureau. I am confident that he will provide the leadership needed to build strategic alliances and partner with stakeholders to position the translation bureau for long-term sustainable success.
Here on Parliament Hill, our important rehabilitation work continues. The West Block, the Government Conference Centre and Phase 1 of the Visitor Welcome Centre are progressing on time and on budget and will be ready as planned in fall 2018.
I will now turn to Phoenix. I would like to begin by reminding the committee members how we got to the current situation.
In 2009 the government approved the transformation of pay administration initiative, which included two interconnected projects—the consolidation of pay services, which led to the creation of the public service pay centre in Miramichi, and the pay modernization project, which focused on replacing the government's antiquated pay technology.
Much of the attention related to pay issues was focused on Phoenix, the technology, but pay consolidation played a significant role in where we find ourselves today. In 2014 this consolidation resulted in the reduction of 700 compensation positions in 46 departments.
Phoenix was implemented in February 2016, and this committee knows all too well that we soon began seeing pay problems. Now more than a year out, many people have asked how this could have happened. Let me share some of the reasons.
First, we had a backlog of employee cases to deal with shortly after Phoenix was launched. We underestimated the learning curve associated with Phoenix. We now know that the change management and common human resources processes were not completed before the implementation.
But most importantly, we lacked capacity in terms of personnel. We did not have enough experienced, knowledgeable pay experts to help transition to the new system or to compensate for the low levels of productivity. These 700-plus compensation employees would have been a game changer had they been available to us.
Since last July we've taken a number of concrete actions to address and resolve the issues as soon as possible. In June Minister Foote announced the opening of satellite offices. We set up Gatineau, Montreal, Shawinigan, Winnipeg, Halifax, and Kingston with more than 200 compensation staff. We've opened a national call centre and created a feedback form for employees. We provided additional training and regularly updated employees and media through messages and briefing. We made a number of technical enhancements to facilitate and automate processing.
Finally, we worked closely with Revenue Canada to prepare the 2016 tax filing season and created a liaison unit to answer the questions related to taxes.
With these measures, we have made some progress toward stabilizing the pay system.
We have been able to reduce the original July 2016 backlog of 82,000 employee cases to approximately 5,500—4,200 of which are complex acting transactions that will be completed in the coming months.
As planned, we reached a steady state for parental leave transactions in March and for disability leave in April. Transactions received at the pay centre in both these categories are now processed within 20 days, 95% of the time.
In March, we introduced a new enhancement to automate calculations for acting payments.
Tax season was a major priority for the department. To date, we have processed approximately 49,000 amended tax slips for employees as we corrected their pay file and processed their overpayments. Employees who receive amended tax slips do not have to refile. Their taxes will be automatically adjusted.
There has been some progress but we know that we have so much more to do. Even though we regularly process pay every two weeks for 300,000 employees and we also pay about 50,000 payments in automated overtime, too many employees are still waiting too long for additional payments such as promotions and changes in their files, including transfers. We still hear stories of employees suffering through these delays.
To help we are receiving support from departments and agencies to improve our pay processing speed and accuracy. We just launched a boot camp with compensation advisory staff from departments. They will be able to process transactions within their department remotely to support the pay centre. Treasury Board is leading a review of the processes being used across the government to approve and submit pay requests. This change management work remains a key to having a well-functioning pay system.
Throughout government, there is a shared desire to serve and support employees, and we will keep taking steps to deliver the best possible pay service.
We are pleased to support and work with the recently struck ministerial working group as they take a whole-of-government approach to resolving this situation once and for all.
There is recognition that, to ensure employees are paid accurately and on time, and have the experience they deserve, a whole-of-government approach—end to end—is required. This additional oversight will ensure the effective implementation of the necessary measures to get us there.
In conclusion, allow me to spend just a moment on our main estimates to support the government in achieving its objectives.
We are estimating expenditures of $3.7 billion in 2017-18, a net increase of $824 million from the year before. This increase includes $365 million to repair and maintain federal buildings across Canada to ensure they are healthy and secure workplaces, $106 million for rehabilitation of the Parliament Buildings, $75 million to rehabilitate other major public infrastructure, and $68 million to install an environmentally friendly heating system for federal buildings in the national capital region, and other major greening projects.
It also includes $36 million for continuing the remediation of federal contaminated sites, and $22 million to provide federal organizations with the ability to accept electronic payments from Canadians. The remaining $150 million is primarily to address price and volume fluctuation on expenses associated with federal real property.
Our departmental plan reflects these main estimates and our efforts to deliver on the government's priorities.
Our employees are dedicated professionals who take their responsibilities seriously and continually strive to serve our clients better to the ultimate benefit of all Canadians.
Thank you, Madam Chair. We're happy to take the committee's questions.