Public Accounts Committee on Nov. 28th, 2017

[Marie Lemay]

At the same time—

[Kelly McCauley, Conservative, Edmonton West, AB]

No one in their right mind would have read any of this and said.... It's clear that it's months and months away from being finished, yet it was “Let's go ahead”.

[Marie Lemay]

You'll remember that we did have another report that was clearing us to go, but as far as these other—

[Kelly McCauley, Conservative, Edmonton West, AB]

S.i. Systems identified a bunch of problems. S.i. Systems does say, yes, it's ready, but you have all these other things, your own staff, all the CFOs, Gartner....

[Marie Lemay]

At the time it was felt that there were workarounds, I'll call them, for all of these things, that there was a capacity to be able to handle this, and that was addressed. That goes to what I was saying earlier. In my opinion, the cumulative risk and the holistic view of this project were missing. We were looking at this like every single item and mitigating every single item, so late acting, yes, and it was planned for the enhancement to be automated later and that in the meantime we could do workarounds.

[Kelly McCauley, Conservative, Edmonton West, AB]

That's—

[The Chair, Conservative, Kevin Sorenson]

We're out of time on that, Mr. McCauley.

[Kelly McCauley, Conservative, Edmonton West, AB]

Okay. Thank you.

[The Chair, Conservative, Kevin Sorenson]

Okay.

We'll go to Mr. Whalen.

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

Thank you, Mr. Chair.

I'm going to try to take a different tack here in terms of the contract management and how we move forward, because pay will continually be changing and there will continually be small aspects of the system.... Maybe a new operating system will come on board. Maybe a completely new bargaining unit might come into existence. The more we can modularize, the more we can circumscribe each individual problem and deal with it specifically, the more robust the system can be and the better able the department will be to outsource and get competitive bids on smaller individual projects. It's something we talked about in our government operations and estimates committee as well—taking an agile approach to change management.

One of the things that might impede that is the existing contract. I was just wondering with the current contract in place with IBM and PeopleSoft for the software, who owns the customizations made to implement all the different specialized rules within the federal government's pay system? Does the federal government own that IP?

[Les Linklater]

Yes.

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

Okay, that's encouraging.

Ms. Baltacioglu, you're going to be reporting back on the standardized service levels by June 2016 and on the costs of pay implementation by May 2018. Are you going to be able to break that down for us on a piece-by-piece basis? How much of the cost and time and energy is being associated with implementing collective agreement X? How much time is being used for collective agreement Y? How much time and energy and money is being spent on normal pay backlog?

Is it going to be department by department? How are we going to be seeing this information so that we can get a sense of how each individual project and problem and process feeds into the overall cost of the Phoenix system and into pay generally? Or is that not going to be transparent to us and we will just be getting a grand total? I just want to know what we're going to be seeing.

[Yaprak Baltacioglu]

One commitment is that it will be transparent. If the committee has specific categories it wants us to survey, we will do that. I just heard you list a number of them. What we will report on is, originally, how much money was allocated for Phoenix, not only consolidation but also the system. We will break that down. We will tell you how much money was transferred from departments to PSPC for pay functioning, and how much was foregone savings, because the government's expected savings to be realized got put back into the system.

We will tell you, since the problem has become clear, how much money has been allocated and how much has been spent. We have those numbers. The Auditor General's number of $540 million is not a number that is concrete. As he put it, it's an estimate. We have to go to every department and get the actuals. Basically, it's an Excel sheet process, because everybody is working on different systems. When we get them, we're going to model them and put them....

The other thing we're going to do—

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

Thank you. That's very interesting, Ms. Baltacioglu. I have a good sense now that the reporting we're going to get is going to be comprehensive, and we'll have a good sense.

[Yaprak Baltacioglu]

Also, we will have a—

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

I'm sorry. I need to move on to the next aspect. I have some confidence that in May we'll see some good numbers.

In terms of the over 500,000-incident backlog that remains in the system, my understanding is that a lot of it relates to implementation of the new collective agreements and retroactive pay. I have two questions on this for either Ms. Lemay or Mr. Linklater. First, are we trying to do things to avoid retroactive acting pay and other things that are non-standard in the system in the collective agreement negotiation process, so that going forward we have a more transparent pay regime that's closer to the industry standard, that reflects the bonusing that people should receive, and that can be done without retroactive adjustments on a going-forward basis in a more easily managed way?

The second aspect of that question is this. Aside from the negotiations, why are we not getting more people on this file to clear the backlog, rather than waiting to reallocate people in the future? We have an existing backlog that we know about. Why do we not just outsource this to 1,000 boffins at IBM who can come in as experts and just fix this problem? Why are waiting until some unknown point in the future to fix the problem we have on our plate now, which can be solved with effort?

[Yaprak Baltacioglu]

On the collective agreements, we are responsible, as the employer, for the negotiation of the agreements. The reason this collective agreement is such a big load is that the previous agreements had expired. We were automatically working on retroactivity. We had no choice. You can't tell people they get nothing for two years and then we start to pay them on a future basis. It is a negotiation, and we did that in good faith with the union.

Hopefully, going forward...and we'll start the next round as early as next year, because these agreements, the ones that we just negotiated, are going to expire. In the future, we are going to try not to put a further burden on PSPC.

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

The quick question I wanted answered didn't get answered.

[The Chair, Conservative, Kevin Sorenson]

The final question will be from Mr. Deltell.

I will warn the committee that we are going to go in camera for a very short period of committee business dealing with a letter to be forwarded.

To all those here, at the conclusion of this meeting you are going to have to exit very quickly, please.

Mr. Deltell.

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

Thank you, Mr. Chair.

I'm pleased to inform the committee that I will share my time with Mr. McCauley.

Ms. Lemay, you said in your remarks—rather quickly, for that matter—that you didn't have the resources needed to respond to the Phoenix problems because of the 700 compensation positions that had been eliminated up to April 2016.

Can you tell us how many of those 700 positions were eliminated in November and December of 2015 and, then, in January, February, March, and April of 2016?

[Marie Lemay]

Actually, more than 700 positions were eliminated. Some 1,300 positions were cut, and we rehired more than 500 people. The 700 positions represents the difference between the two. I can tell you that, during the last wave—the one that coincided with the launch—989 positions had been eliminated. Two waves of cuts took place prior to that; in the first, 125 positions were eliminated, and in the second, 275.

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

That's very interesting, but it doesn't answer my question.

How many jobs were eliminated in November, December, January, February, March, and April?

[Marie Lemay]

I don't have that information with me. There were three waves of cuts. I can get back to you with the details.

[The Chair, Conservative, Kevin Sorenson]

I will interrupt for one moment here.

Please, these questions have been asked and we would really appreciate it if you could forward any types of answers to us at a later date. How many officials were fired on performance, not necessarily just on the switchover. How many officials were demoted. How many executives received performance pay and/or bonuses. Indeed, were there still bonuses paid out through this exercise?

Mr. McCauley.

[Kelly McCauley, Conservative, Edmonton West, AB]

I just want to follow up on the number of pay advisers. It's funny that you first started blaming the issue on the pay advisers on November 29, a year ago. However, as of March, April, June, July, and September 2016, none of these times actually mention the pay advisers.

I'm just curious. An entire year went by before you came up this idea of it all being because you laid off the pay advisers as a big issue. It was never mentioned before.

Let me finish.

It never came up in any of the other reports, such as the Gartner report or the S.i. Systems report.

When you read through the whole stack of ATIPs we did, it actually stated in one of the reports that at Miramichi they were ready to go, that they had enough staff. You stated that it's because of the pay advisers. Here we are now, two years later, and we have more pay advisers in Miramichi and throughout the government than we did before we actually started the process.

How confident are you that it is the main issue?