Public Accounts Committee on Nov. 28th, 2017

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

First, I'd like to pick up on what my fellow member Mr. Deltell said.

Right off the bat, I want to say that our thoughts are obviously with the 152,000 workers affected by the Phoenix pay problems. That said, I reacted the way I did earlier because we can all try to rewrite history or the fix the past, but it won't change a thing.

As I understand it, Ms. Lemay is saying that the decision to launch the system in February was made because there was no other option. The regional pay system had been in place for more than 40 years. In fact, the Auditor General's predecessor, Ms. Fraser, noted in her spring 2010 report that the IT system was “at risk of breaking down” and that “a breakdown would have wide and severe consequences”.

Obviously, she couldn't predict the future. The decision was made, the system was launched, and here we are today.

My question is for either Ms. Lemay or Mr. Linklater. Let's imagine we could wave a magic wand and resolve all of the outstanding pay requests today. Would PeopleSoft work? Would the IBM system work?

[Marie Lemay]

We're going to share the answer on this one, if you don't mind.

I would say that, obviously, PeopleSoft works. It works outside the federal government. Many companies and governments use it.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Does it work, though, in the case of pay transactions?

[Marie Lemay]

In the current context, there are problems we absolutely have to fix.

I will let Mr. Linklater talk about the linkages between pay and the HR processes. I would like to speak to the culture within the federal government that caused us problems and delayed the processing of pay requests.

We have always processed transactions on a delayed basis. For instance, people didn't expect to receive their overtime pay the following week. It would take months. What's more, if someone was in an acting position, we weren't in the habit of adding their name to the system right away. It would be done eventually, at which point the person would receive the acting pay to which they were entitled.

The PeopleSoft system is designed to process transactions in real time. As soon as they are processed late, complex manual calculations are necessary. Initially, that was problematic for us, but now, much of that processing is automated.

To answer your question, I would say that it would work. Mr. Linklater may be able to speak to that further.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

I understand, Ms. Lemay. I was in the public service for 16 years. I received my pay every two weeks. I'm quite familiar with all the federal government pay mechanisms.

Again, my question is very simple. If all the outstanding pay requests were resolved, would the pay system work today and be capable of processing all new routine transactions, whether on a delayed basis or not?

[Les Linklater]

Yes, the system definitely works.

Beyond the IT component, however, we have serious problems in relation to the HR processes.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Great, that answers my question.

In June, the Office of the Auditor General put the number of outstanding pay requests at 495,000. How many are there today?

[Les Linklater]

As of October 18, the pay centre had 520,000 outstanding transactions to process.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

What is your plan to deal with that?

My focus is making sure you have a solid game plan to resolve the problems so that all employees receive what they are owed as quickly as possible.

Practically speaking, what is your plan? If the system works, as you say, and if all new transactions as of today are processed correctly, how do you intend to resolve all the outstanding requests? What's your plan?

[Les Linklater]

As Ms. Lemay mentioned, we are currently increasing our processing capacity through HR measures.

Once we've finished implementing the collective agreements and gotten through this year's tax season, we expect that this increased capacity will enable us to tackle the outstanding transactions at the pay centre.

At the same time, the team I head in the government is studying the HR processes to improve the pay process.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Mr. Linklater, forgive me for cutting you off, but I'm short on time.

I'm very familiar with the federal public service. It is made up of smart and talented people with considerable expertise. Some 300,000 federal public servants work hard managing government operations and programs, day in and day out.

Given your existing organizational resources and your plan, can you tell me, today, when we can expect to have an effective system capable of processing all pay transactions? I'm not referring to a system that relies on all kinds of stopgaps and workarounds.

When will you be able to pay federal workers correctly?

[Les Linklater]

As the Auditor General mentioned in his report, it's a long-term process.

Some measures have already been initiated, and we are in the midst of developing more to tackle the system's most critical stress points. As we increase processing capacity and modify processes, the situation employees are facing will improve.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

I'm going to be perfectly frank with you. I have trouble wrapping my head around the fact that, today, before this committee, in light of the Auditor General's report and all the analysis performed to date, not to mention the expertise you no doubt possess—like all members of your team and public servants—you aren't equipped with an action plan to resolve all the problems by a specific date. That baffles me.

I want officials from your department to come back to this committee with a concrete game plan as soon as possible. I want to see a specific timeline so that we can give federal employees a game plan and say when we will be able to resolve all of their pay problems.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Monsieur Massé. I would also mention to our committee that the game plan was circulated yesterday, with the timelines laid out as far as achievements go. We have some of that. However, I think your question was very good, Monsieur Massé, in that we wanted something more distinct.

We're into the second round of questioning.

Mr. McCauley, you have five minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thank you.

Mr. Ferguson, in your opinion, was PSPC open and transparent about the Phoenix fiasco?

[Michael Ferguson]

I think the thing we identified was that they didn't understand the size of the problem they were facing. They didn't recognize the size of the problem. I think perhaps the messaging was that they were going to be able to solve the problems with the system by October of 2016, and I think that was what they truly believed at the time. I think it was more of an issue that they didn't understand the size of what they were dealing with rather than anything else.

[Kelly McCauley, Conservative, Edmonton West, AB]

Your report says that PSPC, as you mentioned, underestimated the scale of the fiasco. It took months to even recognize that there was a problem. It's taken over a year to establish a plan, which hasn't been published yet. There was a response to your report. I'm going to quote the word salad from PSPC. They're going to implement a multi-phased, evergreen suite of measures and an HR-to-pay integrated plan to improve pay issues that recognizes the causes and nature of government-wide...and so on and so on.

Given your experience with the problems of the management at PSPC addressing Phoenix, do you think this is a reasonable response to your report and the issues you've stated?

[Michael Ferguson]

We haven't looked at what they're planning on doing in the whole HR-to-pay environment. I would say that the department will need to examine very closely the risks of taking on the additional part of the project—the HR-to-pay piece. The HR piece adds more complexity, and I think they need to make sure they have examined the risks well. That may be part of the solution that is required, but it could also add complexity to what they're trying to do to solve the problem. Again, we haven't audited that, but the fact that they're now moving into an HR-to-pay environment I think perhaps expands the scope of the project, and they need to understand the risks they're taking on.

[Kelly McCauley, Conservative, Edmonton West, AB]

You stated several times in your report that PSPC underestimated or misreported the number of problems we had. The number of outstanding pay requests that you calculated was 29% higher than what was reported by PSPC. We've seen that as well repeatedly in our committee meetings. When we'd heard that there was a backlog of 80,000, it was reported in committee that there were just 77 issues.

Why do you think PSPC was so far out? Do you believe they were misleading Canadians or that they just lacked the competence? We repeatedly brought it up in committee. We heard repeated briefings on how they'd turned the corner; they'd done it; they'd almost reached a steady state. Yet, this whole time the problem was growing larger and larger. Why do you think that was?

[Michael Ferguson]

The difference between our two numbers—our number being 29% higher—was that we counted essentially all transactions that needed to be processed by the pay centre. Even if something was a duplicate, for example, we counted it, because somebody in the pay centre needs to go through all of the transactions to figure out which things are duplicates. We were looking at it, not just from the point of view of the people waiting to get paid or the people who were underpaid or overpaid, we were also looking at it from the point of view of the people in the Miramichi pay centre and the work they have to deal with.

We're not disputing the number that PSPC put together, but we felt it was providing one picture of the whole problem. We felt that you need to start with what the total size of the problem is, the total amount of work that needs to be done. Then, from there, that can be broken down.

[Kelly McCauley, Conservative, Edmonton West, AB]

Do you think the way that you tracked it and PSPC tracked it led to their underestimating the size of the issue? Or were they willfully ignoring it, do you think?

Again, where we saw 80,000 in reality, we were being told there were only 77 outstanding to pay, and 500 total. This was four months after the original start of Phoenix.

[Michael Ferguson]

Again, I think the problem was that initially they felt they could resolve those pay requests for the 82,000 people they originally identified. They thought they could get those all resolved by October 2016, and I think then discovered that was a larger task than they expected. In the meantime, while they were trying to resolve those, additional requests were coming in and the problem got worse.

Again, I think it was very much not identifying the size of the problem early enough in the process.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. McCauley. We'll come back.

Mr. Arya, you have five minutes, please.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Chair.

I know personally that there are very talented public service employees in my riding of Nepean, in Ottawa-Gatineau, and elsewhere in Canada. These are very highly qualified people, and they have a great deal of expertise. Some have the feeling that they were not involved, and they were not consulted in designing or developing or implementing the system.

I know that one of the root causes for the big mess we are in is the overreliance of the federal government on outside contractors. According to the report, I believe the federal government spent $2.7 billion on IT staffing, bringing in professionals from outside rather than relying on trained public servants.

Alex Benay, Canada's chief information officer, said, “more investment is required in better preparing internal IT staff to address the needs of the [Government of Canada]”. I think that is one of the root causes, in my opinion.

Now, the unions, the Professional Institute of the Public Service of Canada, which represents I think about 50,000 employees, wants the government to scrap the Phoenix system and start from scratch. I think PIPSC president, Debi Daviau, said give us a year and we'll build a working replacement for this troubled system. I understand that the Public Service Alliance of Canada is also in support of this.

To the Deputy Minister Marie Lemay, have you had any discussions on this issue?

Please keep it short, as I have a very short time.

[Marie Lemay]

We've been working closely with the unions, since I've been there anyway. Recently I know that my colleague Les had conversations with PIPSC.