Public Accounts Committee on Nov. 28th, 2017

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

As my time is passing by, I will get back to that, but let me go back to the report of January 20.

The report identifies serious problems with 58 of the 124 elements analyzed. It also indicates that the situation was so problematic that a date could not be set for implementing nearly 90% of those 58 elements.

How is it that your department chose to pull the trigger even after such a critical report? We are talking about a report that said that the system should not be launched, that nearly half of the elements under analysis posed serious problems, and that the time frame as to when they would be fixed was not known.

[Marie Lemay]

As I told you, I wasn't on the job then. I do know, however, that a lot of reports were completed, and a lot of work was done. As you know, though, it's a complex matter involving numerous people. What I was told is that the problems raised had all been mitigated.

I think everyone realized that, with such a major transformation project, some problems were likely, but no one imagined the scale of the problems. I am convinced that the decision to proceed would not have been made had we thought it would lead to the situation we are dealing with today. The decision-makers at the time believed that the problems had been mitigated.

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

Later, when you were preparing to launch the second phase, did you not have any indications that the issues had not been fixed, that the 58 serious problems flagged prior to the launch still existed and that no estimated date as to when they would be resolved was known?

[Marie Lemay]

Between the two launches, we had around eight weeks, in other words, four pay periods.

Of course problems arose, but, as I told you initially, I think they were seen as a normal part of launching such a major transformation initiative. In fact, we confirmed that with our counterparts, because Public Services and Procurement Canada did not do this on its own. We again checked with the deputy ministers to make sure everyone was of the view that the process should move forward. At that time, we were all under the impression that we could go ahead with the second phase.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Ms. Lemay. I'm sure we'll come back to that.

Mr. Christopherson, please, you have seven minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair.

I have to say that the scale of the government incompetence and its negative impact on Canadian citizens is mind-boggling. I've been around a long time, but I have to really search my memory to remember a file that was as bad as this one in terms of the governance and its negative impact on Canadian citizens, the ones who work for this government and for Canadians, and it's ongoing still.

Normally we're looking at the past and at past damage. As we're here today, there's still ongoing damage, and I have to say at the outset, Chair, that a lot of the answers we're getting are not sufficient. There's still way too many grey areas and unknowns. I'm hoping that we stay at this until we get the answers we need, because the main goal for us is to make sure we get this fixed and to bloody well make sure it doesn't happen again.

I want to say, first of all, to Deputy Lemay, thank you for the apology. You said, “I am deeply sorry for the hardship being felt by the public servants and their families.” That alone doesn't change anything, but I know it matters. That's appreciated, and I wanted to acknowledge it. I would also say that I was disappointed that the Treasury Board, which has overall responsibility, didn't feel the same need to come in and apologize.

Where do you begin?

IBM is who was hired to implement Phoenix, correct?

[A voice]

Yes.

[David Christopherson, NDP, Hamilton Centre, ON]

Let's start with this. How much culpability does IBM have in this, versus the government?

[Les Linklater, Associate Deputy Minister, Department of Public Works and Government Services]

Thank you for the question.

We entered into a contract with IBM in 2011 after an open and transparent process. IBM provided a bid that met all of the mandatory requirements and we entered into a contract under authorities from Treasury Board to be able to design, build, and implement Phoenix.

At this point, the task authorization construct of the contract held and IBM performed the required work that PSPC, as the project sponsor-manager, provided to the company to be able to build and implement the system.

[David Christopherson, NDP, Hamilton Centre, ON]

You didn't answer my question. I don't know what the heck “task authorization construct” is.

I asked, how culpable IBM is versus how culpable the government is. You didn't come anywhere near answering. Please answer.

[Marie Lemay]

Can I try?

[David Christopherson, NDP, Hamilton Centre, ON]

Please.

[Marie Lemay]

I'll give you a bit of an example. The way the contract was structured is that we would give a task to IBM and they would come back to us with this task. If there are issues, it's like any contract and we can withhold money, but when the task is completed, then we pay them.

Pardon me for the example, but it's a bit like building a house. We decide on the foundation. We build a foundation, and it's okay. Then we—PSPC, as the project manager—would say that these are the types of walls we want. Does it make sense? Then we give a task to IBM. They do the work and then they come back to us. If it meets the requirements that we've set up for this particular part of the job, then they have completed the task.

The answer is that throughout the project IBM has done what we have asked them to do. We were the project managers. They were not. They were the integrator, which is different from certain other projects.

I go back to the cumulative effect of risk and issues in this project. It's not IBM that was the project manager on this one.

[David Christopherson, NDP, Hamilton Centre, ON]

All right, so you're saying that IBM is not to be held in a major way to account. That resides with government. Is that correct?

[Marie Lemay]

Yes, that's what I'm saying.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you. We could have got there a lot quicker.

Deputy, in your opening remarks you said that you agree with the AG, as every deputy does who ever darkens the doorway here. Yet the Auditor General has a conflicting opinion from your department. Your department believes that you're going to be able to clear this up with about a half a billion dollars, give or take, in three years. The Auditor General says you're not going to be able to do it for that amount in that length of time, yet in your opening remarks you said, we agree with the Auditor General. Which is it?

[Marie Lemay]

I don't believe that we have actually put forward the finalization of the plan and the budget that it will take to get us to the end state, so it's hard to agree on finances on that point. We haven't finished that work.

[David Christopherson, NDP, Hamilton Centre, ON]

I'd like the Auditor General's thoughts on that, please.

[Michael Ferguson]

Thank you.

What we put in the report was based on a survey that we had done of the department: the money that had already been spent and the money that they expected to spend. That was the $540 million. We asked them for their projections over a three-year time period.

Those were numbers that we put together. They weren't the numbers of the department. But even based on that, we felt that it was going to take longer. Again, remembering that what we're looking at is not just how long it's going to take to pay people the right amount on time, but also how long it's going to take to get to an efficient system. After the individual problems have been reduced, there will still be a lot of work to do to get the system to the point where it's efficient. That's why we believe it's going to cost more than the $540 million that the department told us they have either spent or plan to spend.

[David Christopherson, NDP, Hamilton Centre, ON]

Deputy, I'd like your thoughts on that.

[Marie Lemay]

I agree with the Auditor General.

[David Christopherson, NDP, Hamilton Centre, ON]

You also come in with that tattooed on your forehead: “We agree with the Auditor General. Thanks very much. Good-bye.”

[The Chair, Conservative, Kevin Sorenson]

You still have 30 seconds.

[David Christopherson, NDP, Hamilton Centre, ON]

My goodness.

I'll get you warmed up. I'm going to be coming back to this business of comparing with Australia and how quickly they both identified the problem and put together a comprehensive plan, which the government is telling me they still don't have right now. If it's not one of my colleagues, I'll be coming back there, so give some thought to that.

Thanks, Chair.

[The Chair, Conservative, Kevin Sorenson]

Thanks very much, Mr. Christopherson.

We'll now move to Monsieur Massé.

Mr. Massé, you have seven minutes. Go ahead.