Public Accounts Committee on Nov. 28th, 2017

[Les Linklater]

Given the scope of the work at the pay centre, we'll dedicate the resources to the most complicated work that we have at the pay centre.

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

Right, so I don't see when those 200 employees ever get dedicated to the backlog.

The Auditor General noted that the amount in backlog grew over the entire course of his study period. Has it continued to grow since then?

[Les Linklater]

Yes, it has.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. Whalen.

I will now move to Mr. Christopherson, please.

[David Christopherson, NDP, Hamilton Centre, ON]

Those were great questions. That was very impressive, Mr. Whalen.

One of the things I observe from listening to my staff talk about this is that just like Google, which started as a noun and became a verb, Phoenix, which started as a noun, is also now a verb. People who work for the government talk about being “Phoenixed”. It's part of the regular lexicon here on the Hill. “You've been Phoenixed.” It's the worst thing that can happen to you.

I want to move on to when the problems first started surfacing. I signalled ahead of time that I was going to come back to this issue of the comparison with Australia. Of course it can't be a direct comparison. We understand that. However, certainly it's close enough that the Auditor General has offered it up as a comparison.

It took this government four months to realize there was a systemic problem. For four months, the government focused on the smoke while the house burned down. In four months, Australia had a comprehensive plan in place. Sixteen months later here, we still don't have a comprehensive plan.

Tell me how it is that we are so much more incompetent in dealing with this than a government that is a fraction of the size of Canada's.

[Marie Lemay]

Part of your answer is in your last statement. This transformation is a large one.

In terms of the plan and the initiatives—and I'll let my colleague talk about this—we have identified some measures that are being processed, and you have some of the timelines in the action plan.

In terms of Queensland, when we were doing the contract we looked at other places where PeopleSoft had been used and where IBM had worked. The timing of Queensland and us did not particularly work out for the RFP, although once we launched—and I think this is your question—remember that we were in real crisis management, and remember that we had no capacity and we were making sure that people who weren't getting paid were getting paid.

I personally met with some university professors who were doing a study on Queensland, actually, at the beginning of September, to have a conversation with them to see if they had found anything that we weren't doing that Australia was doing. At the time, everything we saw that they were doing was something we had started doing and actioning.

On the delay after the launch, in eight weeks we were announcing our satellite office and we were in capacity-building mode. The first thing, no matter what, was getting the capacity back up. That was the first thing we had to do. We will have to get this system efficient, but we needed the capacity to be able to take the pain away. That's what we're still trying to do.

[David Christopherson, NDP, Hamilton Centre, ON]

I'm hoping, Chair—and I think you'll find there's going to be agreement—that we will have at least a second hearing to delve into all of this. You're signalling that my time is running out, but we're getting superficial answers, and there's a lot more drilling down to do on this. The fact that they had the Australian model to go by, and the Australians still were able to do it fresh in four months, does speak to the competency of the two bureaucracies. We'll come back to this again.

Thanks, Chair.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Christopherson.

We'll now move to Mr. Chen, please.

Mr. Chen, you have five minutes.

[Shaun Chen, Liberal, Scarborough North, ON]

Thank you, Mr. Chair.

Last week the Auditor General reminded us that government departments are too focused on their own activities instead of the perspective of the people we serve. I want to thank Ms. Lemay for highlighting the negative impact and hardship the Phoenix implementation has had on our public servants. I empathize with the tens of thousands of employees who have not been paid properly, whether they're underpaid, overpaid, or waiting for other types of adjustments, but they are not the only people who are outraged at what is happening. When Canadians are hearing from the Auditor General that $540 million is what's needed, at the minimum, to fix the Phoenix system, they too deserve an apology.

My colleague Mr. Arya pointed out that consultants must have evaluated the system before and during the rollout to offer their advice. As we know, one such review was completed by Gartner Incorporated, and it included a dozen significant risks. Departments, for example, had not completed end-to-end testing. They had also not fully implemented the training programs that were required. To make matters worse, as was pointed out by my colleague Mr. Whalen, the Gartner report was not made available to the minister until six months later.

This is how an article in yesterday's Ottawa Citizen characterized the situation:

After nearly a decade in development, Phoenix suffered the flaw of unstoppable bureaucratic momentum. The directors of the project seemed not inclined to pay much attention to last-minute advice unless it happened to line up with where they were going anyway.

This brings me to the question I have today. Where are going, and are we going to fix this? I think that's on the mind of every Canadian who has come across this issue.

I've heard today that 700 employees have been hired. I've heard apologies. Are we going to strike the right balance? There was a decrease in pay advisers in 2014. Now you're hiring a whole bunch of new people to try to get caught up with all the transactions that have not been processed.

At the end of the day, I know that when you have a train that is moving, and it is moving fast, and you have problems with the train, you can add people to it, but if you don't stop it and go back and fix the problem, then it's only going to go faster. To me, this is a train that is continuing to speed up. When you look at the graphs in the Auditor General's report, you see how the situation has exacerbated itself with an exponential increase in the number of public servants with outstanding pay requests and the number of outstanding pay requests in total. The problem comes across as an unstoppable train.

Perhaps you don't have an answer for this, but how are you going to strike the right balance with respect to training and with respect to the number of employees? This number of $540 million is a starting point. We've heard that in Australia it has cost over $1 billion.

Canadians really want to know.

[Les Linklater]

Thank you for the question.

All of our efforts are focused on stabilizing the system. The management action plan that we've prepared in response to this first audit of the Auditor General lays out a number of concrete things that we are doing. We are building capacity, as Madam Lemay mentioned, and you referenced. We are also working across government and with the union and with venders to identify root causes within the system for the pain points and the difficulties for processing transactions from an HR-to-pay perspective.

We are expecting a final report in the coming week from what we're calling “root cause analysis” that will be added to the suite of measures we're looking at. We are looking at some of the discrete processes—the acting process, terminations, transfer in and out of departments—where we know we have significant issues at the pay centre with processing and where we need to update the business process to streamline it to reflect the realities of today's workplace.

[Shaun Chen, Liberal, Scarborough North, ON]

Have you engaged consultants at this point, particularly those who have already looked at the system and identified potential issues? Have you brought outside people in to look at how this project can be better managed moving forward, and what requirements need to be set?

[Les Linklater]

We have. We have worked with PricewaterhouseCoopers to lay the groundwork for our suite of actions, which we will continue to add to as issues are resolved or arise.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. Linklater. We'll now move back to Mr. Deltell.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you so much, Mr. Chair.

We have seen since the beginning of this audit that twice, at two moments, the government was aware that there was an alarming report to not go so fast, and unfortunately the government decided to push the button in February. That was the first leg. The second leg occurred on April 26, 2016.

That's where it gets interesting. A few days prior, 10 days before pulling the trigger on the second phase of implementation, a House of Commons committee held a meeting.

That was on April 19, 2016. Ms. Baltacioglu, secretary of the Treasury Board, was in attendance. This is what she said at the meeting:

Before the next phase of departments are brought onboard to the new system, Public Services and Procurement Canada, which is the responsible department, is checking with every department and identifying the areas that we have problems with. We are feeding into them and alerting them if we are running into problems. If they feel we're not ready, they will delay. If they feel that 99% of it is going to work, then we will go forward.

Madam, has there been 99% success?

[Yaprak Baltacioglu]

Clearly not, sir. At the time with the knowledge we had, we asked PSPC to check with every department. When the initial wave happened, there was no sense of the magnitude of the problems we were running into. The magnitude of the problems became way more apparent by about June. By that time the second phase had gone. The managers of the project felt that they were mitigating or managing the risks that were identified. Those were the assurances given to the system.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

We are to understand, then, that when you made the decision, 99% of the people involved were telling you that it was going to work. Is that correct? This is exactly what you said: if 99% of departments were in agreement, then you would go forward.

[Yaprak Baltacioglu]

Sir, what I said was that they, meaning PSPC, would move forward only if they were 99% sure. At the time, they were sure it was going to work.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

They were 99% sure?

[Yaprak Baltacioglu]

The 99% was used as an assurance that.... This is a system that manages the pay of public servants. It's a basic need for an employer to be able to pay their people. The risk with this one has to be very low, and that was understood. At the time, the managers of this program felt that they had workarounds for some of the risks, and they had management strategies for the risks. That's what was presented to every department.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Madam, you're the one who set the bar at 99%. Was it 99% when you pushed the button for the second time?

[Yaprak Baltacioglu]

I didn't push the button, sir, first of all. We are a central agency, but we have a big responsibility as the employer, because basically if people don't get paid, of course it's our responsibility in the global sense. We made sure that everybody was aware and that PSPC was aware that this was a no-fail project, and they felt that they were ready.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

If you're not the one who pushed the button, who did it?

[Yaprak Baltacioglu]

The authority given by the government was to the Minister of Public Services and Procurement Canada according to the Treasury Board discussion and according to their legislative basis and the OICs that were given in 2009.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

You're talking about a group, and I'm talking about someone. Who's the one who called the shot?

[Yaprak Baltacioglu]

The decision, according to the decisions from various cabinets and orders in council and the legislation, for the pay administration function rests with Public Services and Procurement Canada.