Government Operations Committee on Oct. 24th, 2022

[Chris Pogue]

Yes, I have.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Great.

Do you believe that, in your company, call to action 92 should be posted in the staff room, be part of your policies, be at the front and centre of your company's operations?

[The Chair, Conservative, Kelly McCauley]

You have 15 seconds for a quick answer.

[Chris Pogue]

I think it should be part of the way we think about things we do every single day. If posting it helps us think about it, then it should be posted.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Do you think it should be embedded in your policies?

[Chris Pogue]

I think it's embedded in our policies by virtue of the diversity and inclusion policies we have across the group. It would already be included by virtue of that approach.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Pogue.

I'm afraid that's time, Mr. Johns.

Mr. Pogue and Mr. Cormier, thank you for joining us today.

Again, if there's anything you wish to share, please send it to the clerk. I think there were issues.... Mr. Cormier, you were going to get back to us on suggestions for the F-35 procurement, but I'd certainly be very interested, as well, in your thoughts on—you touched on it—de-risking or creating a culture that is less risk averse...in our procurement. I'd certainly love to see that, as well.

Again, gentlemen, thanks for being with us.

We are suspending for about 10 minutes, in order to set up our next witnesses.

Thank you.

[The Chair, Conservative, Kelly McCauley]

We are back in session.

Welcome, witnesses, to part two of meeting number 35 of government operations and estimates—as I call it, the mighty OGGO.

We'll have several witnesses today. We're going to go from 12 to about 12:45. Then we're going to stay public, and we're going to discuss the schedule going forward.

We have witnesses today from the the Professional Institute of the Public Service of Canada. We have Jennifer Carr, president; and Eva Henshaw, vice-president. From the Public Service Alliance of Canada, we have Michele Girash, national political action officer; Liam McCarthy, director, negotiations and programs branch; and Howie West.

We're going to start with a five-minute opening from Mr. McCarthy.

We are short of time, so I ask that you do keep it close to five minutes or less than five minutes but not longer.

Thank you. Go ahead, Mr. McCarthy.

Then we will hear from Jennifer Carr.

[Liam McCarthy, Director, Negotiations and Programs Branch, Public Service Alliance of Canada]

I'll do my best. There's a lot to say on this important topic.

I thank you very much for the opportunity to address the committee.

The PSAC is the largest union in the federal public service, representing over 230,000 workers, the majority of whom are in the federal public service.

Let me begin by saying that the strategic policy review announced in the last budget must include unions to determine how best to provide public services and not waste or offload the responsibilities to the private sector.

There's been an ideological drive towards contracting out that is not evidence-based nor in the best interest of Canadians. As an example of it not being in the best interest of Canadians, in late 2020, PSAC published a report showing that contracting out of cleaning services at DND can cost 35% more. DND spending on those contracts alone was $68 million more than if it had done the work in-house. We know it is only a sample of what is really going on across all departments and agencies.

The procurement process to contract out work favours corporate secrecy over the rights of Canadians to know how funds are spent and how services are managed. During our examination of the privatization of public sector work, we have submitted dozens of ATIP requests for documents that we know exist, but with limited success. This lack of transparency shows the government values its relationships with large corporations over the public's right to know.

It's also important to point out that the Public Service Employment Act and the Employment Equity Act exist to make sure that the public service is representative of the population it serves, and contracting out undermines those very important efforts. Jobs that are contracted out are more precarious than jobs in the public sector, and the human resources committee's all-party report on precarious work was tabled in the House in 2019. It called on the government to review human resources policies and budgeting practices to ensure that they are incentivizing hiring employees on indeterminate contracts. It's time for the government to heed its committee's advice on that front.

Across the departments and agencies, we see a wrong-headed preference to offload management and human resource responsibilities, and that has contributed to this problem. I will run through a couple of examples of some of the problems associated with contracting out.

Veterans Affairs Canada has a $570-million contract for rehabilitation services that will transfer the work of case managers to a profit-making corporation that was established just to obtain the contract. Their priority is to make money and not to serve veterans. Services to veterans and their families will suffer, and the role of case managers, the key to supporting veterans trying to navigate the system, will be undermined and reduced. We are already seeing concerns about veterans' personal information being shared with private contractors without their consent.

Canadians who call 1-800-O-Canada looking for help with important life situations such as unemployment, sickness, maternity and parental leave benefits are unlikely to know that they aren't speaking to a Government of Canada employee. They're talking to a precarious worker, paid a low wage with no benefits, no job security and no real connection to the very department the caller is seeking help and information from.

At CFB Comox, new buildings were recently added to the base's infrastructure without appropriate attention being paid to staffing and facility needs. The added work made it impossible for the existing staff complement to meet the maintenance needs, so now the base has contracted out that work to the private sector instead of staffing up to meet those requirements.

Another example is the requirement of the government's ability to fulfill access to information requests, and those requests are quite extensive. In our very submission to the review of ATIP legislation last year, we were able to show that understaffing and contracting out the work of ATIP officers has resulted in unacceptable time lags and inconsistencies.

Also, to give one more example, one would expect that customs and immigration duties at Canada's airports would be performed by CBSA employees, yet at Pearson airport, as an example, many security and service-oriented duties such as escorting travellers, answering phones and monitoring the needs of clients are now contracted out to GardaWorld.

What we're recommending is the following:

The government's default premise should be public sector delivery instead of contracting out. Commitments should be further reflected in the public sector collective agreements that we're currently negotiating. The government needs better metrics, including tracking contracting out and use of temporary agencies. The government should audit all current contracts and require justification and business cases for all use of contractors and temporary agencies.

There need to be staffing envelopes in every program so that they have the proper—

I'm sorry. Is that my time?

[The Chair, Conservative, Kelly McCauley]

Mr. McCarthy, I'm sorry, but your five minutes are up. If you'd like to send the rest of your comments to the clerk, they will be distributed to the committee. Thanks very much.

Ms. Carr, go ahead, please, for five minutes.

[Jennifer Carr, President, The Professional Institute of the Public Service of Canada]

Thank you.

As noted, my name is Jennifer Carr. I am the president of the Professional Institute of the Public Service of Canada. I am accompanied by vice-president Eva Henshaw. The institute represents over 65,000 public service professionals. Most of our members work for the federal public government.

Years of unchecked spending by government departments on contracting out has created a shadow public service of consultants and temporary staff operating alongside the government workforce. Contracting out means higher costs and lower quality of services for Canadians. There's less transparency, less accountability and a loss of institutional knowledge. When work is outsourced, the related skills and expertise leave the public service when the contract ends. The real cost of contracting out is way too high. We have wasted money. We have poor hiring practices. We erode the capacity and we create safety concerns.

The government, according to a Carleton University research project, spent an estimated $15 billion in the last fiscal year on contracts across the core public service departments and agencies. Our members, especially the 20,000 IT professionals, are calling out the government for its overreliance on contracting out. The institute has filed over 2,500 grievances concerning work that was outsourced rather than being assigned to already existing expertise inside the government. We have to ask why.

From our research, between 2011 and 2021 the federal government outsourced over $21 billion in IT work to IT consultants, management consultants and temporary help contractors. Spending on outsourced personnel increased from $1 billion in 2011 to nearly $2.2 billion in 2018, an increase of more than 113%.

Hiring contractors skirts all internal hiring practices and the goals of the government, including those regarding regional development, bilingualism, and equality and equity. Canadians cannot afford any more failed outsourced IT projects. We have only to look at the disastrous Phoenix pay system as a glaring example.

From our research, in the last fiscal year, we saw $2.3 billion spent on information technology service contracts, while at the same time the government spent $1.85 million on its own IT workforce. The bottom line is that it spends more on contracts than it does on public servants that deliver vital IT services. I want to share with you two clear examples of how this breaks down, how a contractor costs more than hiring a federal public service member does.

At the Department of National Defence they hired one IT architect. The cost was $360,000 per year. This contract was repeated for over eight years. The equivalent public service salary, including pension costs of 17%, would be $148,000 a year. The difference is $1.5 million, for just this one resource alone.

At Shared Services Canada, three IT resources for a contract of five years cost $14.1 million. This contract was tendered and posted for another four years. This would be an equivalent of three public servants, with pension costs of 17% calculated already of $1.85 million. The difference for this contract to the public purse was over $12 million.

IT is not the only profession that is seeing high numbers of costly contracting services. The federal government spent $2.1 billion on contracted out health services. With retention and recruitment being an ongoing issue, the federal government has been using contracting out to private nurse employment agencies as a band-aid solution for years. They're parachuting in nursing staff on a temporary basis to look after patients in remote and isolated first nations communities, which is one role for federal public servants, without offering them the consistency or quality of care they deserve.

There is no doubt that it would be far more cost-effective if we invested in a fully funded, permanent public sector solution. This opens the door to outright privatization in what should be publicly delivered health care for first nations communities. We urgently need plans that meet the needs of the Canadian northern population and give health care workers who care for these populations the support and resources they need to do their jobs.

Our call to action is that each one of us has a stake in the fight against outsourcing. This is about fairness. It's about giving Canadians reliable services and stopping the waste on outsourced projects like Phoenix. We need to modernize our hiring policies to create efficient timelines for hiring—

[The Chair, Conservative, Kelly McCauley]

Ms. Carr, I'm afraid I have to cut you off there. Like the others, if you wish to submit anything in writing, that would be wonderful.

We're going to start with Mrs. Kusie for six minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Mr. Chair.

Thank you very much to all of the witnesses for being here today.

I checked National Newswatch this morning, as I do every morning at 6 a.m., and the top story was “Ottawa's pandemic hiring boom adds billions to federal payroll”. Specifically, it mentioned there was a 12% increase in federal employment in two years—35,000 new jobs over the last two years. That's over 5% a year, which outpaces the private sector as well as the economy.

When we look at where those jobs were added, ESDC, which is “responsible for passport processing and Service Canada offices, added 8,500 positions. Immigration, Refugees and Citizenship Canada, which has been dealing with the crises in Afghanistan and Ukraine—along with a huge backlog of visa applications—hired 1,750 people.” We have these incredible expenditures and additional employees.

The CBC article also states that in emailed statements, “PHAC and ESDC both said that more than half of their new hires were non-permanent positions, while the CRA noted that its workforce rises and falls with the tax season.”

Based on the dismal numbers we received this morning on extreme expenditure yet poor delivery of services to Canadians, how should we be using—or not using, in this case—outsourcing to better deliver value for money for Canadians?

I'll start with Madam Carr.

Could you please respond to that?

[Jennifer Carr]

Of course, those are the hiring areas where we have seen a lack of stability in the public service. I'd like to counter that. This is because of years of under-resourcing and cuts that happened way before this time.

With the passport situation, it's my understanding that public servants were crying out to the government to put proper resourcing behind passports, knowing that, when we implemented the 10-year rule, there would be a crunch for people with new passports making its way forward.

This is what I call catch-up after years of under-sourcing, and people getting by and doing more with less. When there is a cry for services, some of it can be outsourced, but public servants need to do passport applications and the vital work of checking and making sure that applications are done in a correct, fair and transparent process.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you for that, Madam Carr.

Previously, in another life as a consular officer, I completed that passport training myself, so I know how rigorous it is.

What I think you're referring to, Madam Carr, is another quote from the former parliamentary budget officer. I'm going to read that here. It is very much in alignment with some of the comments you have made here today. Perhaps you can support this quote and even provide more information around it. It goes back to your comments about the band-aids.

This quote from him was incredibly alarming. Former parliamentary budget officer Kevin Page said, “There is no strategic human resource plan you know for the Government of Canada. There's no evidence whether or not we've made really good hiring decisions with the significant increase in the complement of the public service.”

There is no human resource plan, Madam Carr. It's unbelievable to me that, after seven years in government, this government has not determined how to effectively determine the human resource organizational structure of a single department, never mind all the shortfalls we're seeing.

Can you comment on this quote, please? Perhaps you could expand upon your statement in your opener about the necessity to stop with the band-aids to get value for money for Canadians through better organization, structuring and planning in our federal government.

[Jennifer Carr]

Thank you for that comment. For sure, that is one of those things. I'm going to pass it over to my VP, Eva Henshaw, to talk about her work with the chief information officer, and why we are so short-staffed and what is happening.

Eva.

[Eva Henshaw, Vice-President, The Professional Institute of the Public Service of Canada]

Thank you.

I know that the chief of the information office is currently looking at the IT resources. They have stated that we are short by 8,000 employees in the IT offices. That alone is quite alarming, since we only have approximately 17,000 IT workers across Canada.

It doesn't surprise me to see those quotes, because when you look at the budgets and the plans that come up from the departments, you see that the overall resource plans for human resources of the public service are not there. They do not want to increase their footprint of public servants, for whatever reason—we're not sure. However, we do see their plans on other budgets that are increased on a yearly basis in which they are able to contract out resources through those budgets and not the public servant budgets.

[The Chair, Conservative, Kelly McCauley]

I'm afraid your time is up, Ms. Kusie.

Ms. Thompson is next for six minutes, please.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you, Mr. Chair. Thank you to the witnesses.

I'm going to ask the same question of Ms. Carr and also Mr. McCarthy, beginning perhaps with you, Ms. Carr.

Departments are required to consider internal staff before outsourcing a project, but you say that this doesn't happen enough. Could those make-or-break policies be strengthened, and if so, how?

Mr. McCarthy, this will go afterwards to you.

[Jennifer Carr]

That goes into the 2,500 grievances we have on the table right now. These are not areas where we don't have the expertise in-house. These are not projects that our public servants are not prepared to deliver or perform. On the ground and in the capacity, our members are seeing contracts being placed for outside workers to come in and do exactly the same job—sit next to them and do the same project—and are crying that this is a public servant job.

It has to do with the hiring practices. It also has to do with the “de-professionalization” of the role of HR within the public service. They took away the HR resources and they left hiring up to the managers. When a professional like an engineer or an IT professional, who has no expertise in hiring...it's much easier to put a contract together with an outside agency, to say, “Hire what I need”, versus coming up with criteria to hire within. Especially in the Department of National Defence—I don't have the actual numbers right now—we are seeing a reliance on what is called internal contracting out to DCC, Defence Construction Canada, which has way beyond extended their mandate to provide services to the Department of National Defence.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

I'll go to Mr. McCarthy.

[Liam McCarthy]

I'll make a quick comment and then turn it over to Howie West.

There is a pervasive culture inside senior management toward contracting out. It's often viewed as a bit of a panacea in terms of ways of delivering public services, so that will be a challenge, even with policy direction change, to reverse that particular culture.

I'll ask Howie West to make some more specific comments.

Thank you.

[Howie West, Work Reorganization Officer, National Programs Section, Public Service Alliance of Canada]

Thank you, Liam. Thank you, Mr. Chair and Madam Thompson.

The problem is quite straightforward, really. There are lots of constraints around how contracting is done, but as you realized from your session last week with departmental heads, there are absolutely no constraints around the decision to make or buy. That's a long-lasting practice.

Because there are no constraints around that decision, people tend to buy more than make. There are internal rewards for that practice in terms of taxes, if you overextend your salary-wage envelope. Not only does that have a financial impact on a department manager who is thinking about something that needs to be done, but it also has a psychological impact. If you know that the organization is taxing you if you hire as opposed to contract, then you tend to do what the organization tends to want.

There is a systemic failure there, and that's been brewing for about 20 or 30 years, since new public management came in. It's an ideological problem.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you. I'd love to get another question in for both sides. I'm sorry to cut you off, but time is short.

Do you support the plan to phase in a requirement that 5% of federal contracts go to indigenous businesses, and what challenge does that policy face?

Again, that question is first for Ms. Carr and then for Mr. McCarthy.

[Jennifer Carr]

Certainly, when it comes to diversity and inclusion, and making sure that there's a benefit to all populations in Canada, I do support that. I do think though that it is not going to stop contracting out. In fact, you might have what I call “tokenism”. You'll have big firms hiring people who have first nations experience, or they'll have somebody on their board, but it will not change. These are million-dollar contracts, and making sure that they are actually in the hands of first nations people, I believe, might be a big challenge.