Public Accounts Committee on Nov. 28th, 2017

[Chandra Arya, Liberal, Nepean, ON]

Thank you.

You said that we are the project managers, so basically you're giving a clean chip to IBM. If we are the project managers, then the responsibility is with us.

Let me ask how many people were fired for this mess we are in, which has cost taxpayers at least $540 million.

[Marie Lemay]

Fired...? I can't answer that. I don't know.

[Chandra Arya, Liberal, Nepean, ON]

How many people have been demoted?

[Marie Lemay]

I wouldn't be able to tell you at this point.

[Chandra Arya, Liberal, Nepean, ON]

How many people have been disciplined? How many people have had their performance bonuses cut? Because we are the project manager, it is our responsibility.

[Marie Lemay]

I can tell you that, on the performance pay, we had this discussion at one of the committees previously. You know how performance pay works every year. There are objectives, so there are some measures that were taken for 2015-16.

[Chandra Arya, Liberal, Nepean, ON]

Thank you.

I'm sure that in addition to IBM you had many other consultants who advised at various stages. I'm sure you hired consultants who tested this, or who at least did a review of the system, before they said it was ready to go. How many of these consultants have been blacklisted?

[Marie Lemay]

I'm not able to answer your question. I could go back and give you those answers.

[Chandra Arya, Liberal, Nepean, ON]

My concern is that among my constituents I have a lot of public service employees who have very good expertise. I have a constituent who has more than 20 years' experience in IT systems, both in the federal government and outside. He says, and I quote, that the pension system is getting bad data from Phoenix and may eventually collapse. I don't know. This is just one anecdote I've heard. I'm very much concerned.

With my limited time, Mr. Chair, I would like to ask the AG this. Who is responsible for this loss to the taxpayer of at least $540 million?

[Michael Ferguson]

Again, what we have is a system that was implemented and that didn't work. This audit was not about trying to identify who made what decisions and who was responsible for what. We're going to come back and revisit the decision in the second audit.

All I can tell you at this point is that when this system was put in place, it wasn't ready to process the transactions that it was asked to process, and now a lot of time, effort, and money are being spent trying to get the system back to where it needed to be.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Arya.

We'll now move back to Mr. Deltell.

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

Thank you, Mr. Chair. I want to continue with some reports.

The CFOs from a number of departments met on January 13, 2016, to assess the readiness of the Phoenix system a few weeks before the launch.

Here are their observations. The Correctional Service of Canada, which has shift workers, reported a testing success rate of 50%. The failure rate, then, was 50%, so that is huge.

It says:

There was no live data environment to understand the system

No report to perform analysis on error on pay sheet

Training at the last minute

Agriculture and Agri-Food Canada reported the same thing, in other words, a testing success rate below 50%. The department also indicated that it didn't know how to resolve the problem at the time of testing.

After conducting 25 tests, Employment and Social Development Canada determined that system readiness and effectiveness was questionable.

As well, the RCMP said, “No issue log of issues and defects. The error rate is going up.” At Public Safety, it's exactly the same thing, “Testing result issue: 30% errors not satisfactory.” The RCMP also talked about the fact that the “Test over promotion/overtime failed” and asked, “What will be the work around?”

The Canadian Coast Guard raised the potential consequences of delaying Phoenix implementation.

Employment and Social Development Canada also had this to say:

“At go live it will be 'bumpy'.”

In short, Mr. Chair, the assessment of all the departmental directors at the January 13 meeting, mere weeks before Phoenix was to go live, showed that the system still had major flaws.

Earlier, Deputy Minister, you said that, in the previous report, errors had been made because each organization was working in isolation. Here, however, we have a meeting attended by most, if not all, of the departmental directors involved in the first launch of Phoenix.

Why did the department not take into account the major red flags raised by those who would be responsible for managing the problems?

[The Chair, Conservative, Kevin Sorenson]

Mr. Ferguson or Ms. Lemay...?

[Marie Lemay]

Mr. Deltell, their observations were certainly heard.

We also held a meeting with all the deputy ministers at the end of January, before the decision was made to proceed with the launch. Everyone was reassured by the fact that a range of risk mitigation measures had been taken. The recommendation came from us and our Treasury Board counterparts. Together, we decided, after the meeting, to go ahead. I imagine those issues were discussed. The people on our end were satisfied that mitigation measures had been put in place.

[Yaprak Baltacioglu]

Just to clarify, there was a meeting following that meeting. There were a number of those kinds of meetings with the heads of HR and with CFOs as the issues arose. That's why Treasury Board Secretariat hired another third party. I think that's the report you were referring to.

Again, as Ms. Lemay said, there was a deputy ministers' meeting at the end of January. At that meeting, we asked the departments the following question: do you feel, as a department, you are ready to get onto Phoenix? At the same time, PSPC presented that the system was ready. Each individual deputy minister, for their department, were asked to be ready.

The majority of the deputy ministers at the time, given the balance of the knowledge they had, felt that should the Phoenix system go forward, they would be ready to on-board to Phoenix. The decision was taken by PSPC to do the first phase and the second phase with the input of the deputy ministers' sense of their readiness.

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

Mr. Chair, I have a lot of respect for democracy. If the majority wins, that's fine. But here we're not talking about the majority. Here we're talking about the fact that we need a strong level of safety. It's not 50% plus one, in that case.

Since you talked about it, what was the exact result? How many deputy ministers said go and how many said no go?

[Yaprak Baltacioglu]

There were no no-gos. Two departments felt that they were not sure if we were ready to go, because they didn't have a good enough sense of the testing results for their departments.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

Welcome, Mr. Whalen. You have five minutes.

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

Thank you, Mr. Chair.

Mr. Ferguson, Mr. Deltell referred to the Gartner and S.i. reports, which were available to the department in January 2016. I understand from the House of Commons committee on operations and estimates, where I asked a similar question before, that the minister was not provided these documents until September 2016.

Will your next report help clarify for us whether information available to the department was withheld from the minister?

[Michael Ferguson]

I can't tell you at this point. What we're going to do is get access to all of the information. We're in the process of getting access to all of the information.

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

Mr. Ferguson, I think it would be excellent, if you found in your deliberations that Mr. Deltell's documents were actually not made available to the minister until six months after the decisions were made.... I think it would be helpful to our committee to know that.

I'll slide on here and go to this. Some of the underlying axioms here are that there would be cost savings from transferring the 40-year-old system to a new system, and that somehow now the department appreciates that it has the right level of staffing. I'd like to challenge a couple of those.

What will happen, Mr. Linklater, to the 200 pay experts who are currently working on collective agreement implementation?

[Les Linklater]

Once those agreements have been fully implemented, we'll move that capacity on to the queue.

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

How many collective agreements are there?

[Les Linklater]

At this point, we're working to implement 20.

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

No. How many are there across all of government?