Human Resources Committee on May 7th, 2026

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

In short, you're telling me that employees are to blame because they were uncomfortable managing change and had worked with the old system for a long time.

[Cliff Groen]

I didn't say employees are to blame, sir. It's just that they had some challenges, which is to be expected. For instance, whenever I upgrade my cellphone, I get a different model and it takes some getting used to, even though my old phone was more or less up to date. The old system was 60 years old. This was a big change.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

I get it, thank you.

The update refers to $473 million in 2031 for day-to-day operations. Normally, that represents 10% of costs. This therefore comes to $600 million to $1 billion a year for system operation.

Do you think that amount could be accurate?

[Cliff Groen]

I missed—

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

Operating costs are projected at $473 million from 2031. However, normally, these costs represent 10% of the total cost, and so if the total cost is expected to be $6.6 billion, operating costs would come to $660 million a year, and could reach $1 billion per year due to cost overruns. That is what it would cost Canadians.

[Cliff Groen]

I'm sorry, but I don't quite understand what you mean by operating costs.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

Never mind.

Let's recap the current situation: 70,000 seniors have not received their pension; the Liberal government refuses to acknowledge that there's a problem; the system is not working and employees have told us that it is unusable; and there are cost overruns of $5.5 billion as well as a further half a billion dollars that was not announced in the economic update.

Mr. Chair, I propose that the committee resume debate on Ms. Larouche's motion to order the production of documents on the management of the benefits delivery modernization.

[The Chair, Liberal, Bobby Morrissey]

Monsieur Lefebvre made a motion, which I rule to be in order because it's consistent with the topic that the committee is discussing.

Is there debate on the motion or does—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Is it dilatory?

[The Chair, Liberal, Bobby Morrissey]

It's a dilatory motion, so we have to go immediately to a vote. I'll ask the clerk to call a recorded vote. The vote is on whether the committee wishes to return to the motion of Madame Larouche.

(Motion negatived: nays 6; yeas 5)

Your time has concluded, Monsieur Lefebvre.

We'll move to Ms. Tesser Derksen.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Thanks very much Mr. Chair.

It's nice to be here this morning. I am filling in for my colleague, MP Koutrakis. Thanks for the warm welcome.

I want to mention the motion we just voted on. I think it's important that people understand that the reason we didn't vote in favour of the motion is that we have witnesses we want to hear from and we didn't want to—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Why did you shut it down last time?

[The Chair, Liberal, Bobby Morrissey]

I'll have order. I'll not tolerate any disruption in the committee. The witnesses are here to present evidence as questioned by the member who has the floor at the time. Please respect that.

Go ahead, Ms. Tesser Derksen.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Thanks, Mr. Chair. I appreciate that.

Some of you may know that I am regular member of the Standing Committee on Public Accounts. We have been dealing quite extensively with this issue there. We've had motions presented there that we've debated at length. It's supposed to be a non-partisan committee. We do a pretty good job of that at public accounts. We have good discussions and are able to put good probing questions to our witnesses there. I appreciate the opportunity to do some of the same here.

I want to direct my question to Mr. Groen.

Yesterday at public accounts we had some of your colleagues from Public Services and the Treasury Board, as well as the Auditor General. We received some good information from them.

Some common themes have been arising throughout our time of questioning witnesses. My interpretation of those themes is that we have a very complex project on our hands. There's been a lot of difficulty in estimating costs with accuracy. This may be my opinion, but there seems to have been some underestimating on the part of the departments on the magnitude and breadth of the project over time.

I want to talk to you a little bit about the costs. You did address them, somewhat, in your opening remarks. You referred to the initial estimates as “a rough order of magnitude”, which was based on preliminary estimates. We've had some quite significant increases.

I'd like you to take us through the complexities of those initial cost estimates and how the departments budget for unknown contingencies that may arise

[Cliff Groen]

In 2017, when ESDC first received the authority to proceed with this program, there was a requirement that when any project was initiated, as Treasury Board policy, you had to provide an estimate, in a rough order of magnitude, before you could even start the work.

In budget 2017, tied to that decision, an initial estimate of $1.8 billion was put forward. That was before any planning work started on the program, because we did not have the authority. Budget 2017 provided $12 million for initial planning work, and it was understood—and all the documentation submitted as part of that proposal was clear—that we had to do the detailed planning work to have any understanding of the costs.

As things have evolved since 2017, the costs have changed. There are three primary reasons for that evolution of costs.

First, we're dealing with 50- and 60-year-old systems. When we open those systems and code that were developed decades ago, there are things that we do not know. The documentation in the systems related to the coding and the infrastructure could not possibly have been known until we opened the hood. Unravelling that complexity and ensuring that we are doing it appropriately was critical.

Second, some scope of the program has changed as well. In particular, the migration of 14 ESDC call centres was not part of the initial scope. That has resulted in an additional change related to the overall scope and, as a result, the cost estimate for the program.

Third, cybersecurity costs have absolutely contributed to the increase in costs as well. In 2017, there were real cybersecurity issues. However, in 2026, with the advent of lots of new technologies, one of which is AI, the reality is that these present a new threat landscape. Therefore, that has resulted in additional cost estimates to ensure that these programs are adequately protected, from a cybersecurity perspective.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Thanks for that.

I know there was a review by some consultants who said the initial cost estimates for software and implementation were well below the industry average and timelines would likely be much longer. Perhaps they had the benefit of hindsight. You did explain that it was impossible at the time to estimate how much complexity you'd be dealing with.

Do you think that's a fair comment from those consultants, that the industry average was a certain threshold and that we fell far below estimating?

[Cliff Groen]

I think that is a fair conclusion. It's also consistent with the Auditor General's 2023 finding that the initial estimates were lower than similar projects.

The challenge with the BDM program is that it's the largest IT project, not just in the history of the Government of Canada, but also in Canada and in our entire history, period.

The complexity of the size and scope made it very difficult to have an initial estimate. Could we have done better in terms of that initial estimate? For sure.

I'm very proud to report that, as the program has evolved, as we have done the detailed planning and have begun executing, our estimates are now way more accurate. For the old age security program, now that the OAS and BDM programs have been completed, we have ended up 6% lower than the estimated total cost for that component of the BDM program.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

In the Auditor General's 2023 report, she was pretty pointed in her critique. She said that some of the biggest, most important computer systems were basically falling apart and might crash. She pointed out that it had been decades since it was first brought to the government's attention, that there was a “significant issue” with “delays in modernizing” and that it was crucial to do so. Based on her opinion, there was really no choice but to modernize and to do it quickly.

It was quite a different time 24 years ago. You've already mentioned cybersecurity. We have AI as well. I want to give you an opportunity to comment on how these more modern problems have added complexity to the implementation of this already very complex project.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

We're well over the time. Perhaps you could you address that in another question.

Ms. Larouche, you have the floor for six minutes.

[Andréanne Larouche, Bloc, Shefford, QC]

Thank you very much, Mr. Chair.

Mr. Groen and Mr. Hickey, thank you for joining us today.

Although you say that you did take care of people, some red flags were raised, but the department ignored them. In 2017, you started the benefits delivery modernization with Cúram. Say what you will about your figures, Mr. Groen and Mr. Hickey, but the fact is, the Auditor General raised the red flag about cost overruns in a 2023 report. Mid-June last year, the Public Service Alliance of Canada said that it was anticipating delays with benefits delivery. We've seen media stories stating that the Cúram platform has an employee rating of one out of 10.

Earlier this year, in response to my questions in the House of Commons, we started to hear that there were a few cases, and eventually, at committee, it was revealed that there were 85,000 cases. The number has gone down since then after the media broke the story and because of the work we have done and the questions we have asked in this committee and in the Standing Committee on Public Accounts. There was some filibustering here in this Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities and in the Standing Committee on Public Accounts in order to withhold documents. I'll come back to that later.

That brings me to my question.

Over 85,000 people have been affected by delays associated with the Cúram system. That was confirmed in the Standing Committee on the Status of Women when we asked questions as part of the study on senior women. The former president of FADOQ, which is now the National Association of Federal Retirees, spoke about some tragic cases where people could not afford rent, medication and groceries.

Has the government now acknowledged that this project has had serious human consequences on vulnerable Canadians? Well, yes, you have acknowledged that because you had to add $176 million in the last economic update.

[Cliff Groen]

I don't know if there was a question about that, but I'd like to point out that one senior waiting one year for their benefits is one senior too many.

When it comes to the delivery of various programs for millions of Canadians, I wish I could say that everyone receives their benefits on time, but unfortunately, that's not possible and it's not the case. Last fall, we rolled out an action plan to address the issues that lead to benefits not getting through on time, and we have achieved some positive results.

I'd also like to reiterate that the system has nothing to do with things not working well. Yes, transitioning to a new system is a big project, and employees have challenges adjusting. We had to give them the support they needed to help them use the system. However, 7.7 million Canadians continue to get old age security benefits, and that was the challenge we faced when the project was launched. The old system was at risk of failure, and we wouldn't have been able to pay a single senior, and that would have been unacceptable.

[Andréanne Larouche, Bloc, Shefford, QC]

You also ignored the red flags regarding this system that were raised somewhere else. The Standing Committee on Public Affairs managed to pass a motion for an independent public inquiry into the Cúram system to shed a light on this matter and to give people all the information they need. However, that was rejected in the House by the Liberals and the Speaker.

Earlier, there was a proposal to resume debate on my motion, which reads as follows:

That the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities request that the Department of Employment and Social Development, the Department of Public Works and Government Services, the Privy Council Office, as well as the Prime Minister’s Office, provide to the clerk of the committee, within 30 days of the adoption of this motion, all reports, correspondence, emails and documents related to the management of the benefits delivery modernization since January 1, 2017, and that the departments and offices responsible for producing the documents apply redactions in accordance with the legal obligations set out in the Privacy Act and the Access to Information Act.

What is holding up the production of these documents? Why can't we get the documents, Mr. Groen?

Can you give us a commitment that you will provide us with the documents?

[Cliff Groen]

I know that this issue has been discussed in this committee, today and on previous occasions. I'm not in a position to comment on that, but I'd like to say one thing: This is at least my fourth time before you and I've also appeared before other parliamentary committees, and I'm always happy to come and answer your questions because this program is extremely important for Canadians. I'm glad to see that this issue has prompted questions.

[Andréanne Larouche, Bloc, Shefford, QC]

Canadians have the right to know why cost overruns have reached $6 billion.

Here is my final question: Who allows cost overruns? Who writes the cheques when costs start to spiral out of control?

Is there an independent budget oversight mechanism?

[Cliff Groen]

Thank you for that question.

As I've said multiple times, there are no cost overruns. There were estimates for this program and there have been many presentations in Parliament about the budget requirements associated with this program since 2017. We managed the evaluation of these cost estimates appropriately.