Public Accounts Committee on March 9th, 2021

[The Chair, Conservative, Kelly Block]

I will call this meeting to order. I welcome you to meeting number 21 of the Standing Committee on Public Accounts.

The committee is meeting in public today to receive two separate briefings. There will be two one-hour panels, the first with a representative from the Privy Council Office and the secretary of the Treasury Board. Unfortunately, the Clerk of the Privy Council is unable to be with us due to illness, and I'm sure all members join me in wishing him a speedy recovery. The second briefing is from the deputy minister of finance.

Members will have noticed that I have asked to extend our meeting today by 30 minutes so that we can go in camera for some very timely committee business. I hope all of you can stay for that extra time.

Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25, 2021, and therefore members may be attending in person in the room or remotely using the Zoom application. I'm sure you can tell by now that I am in the room.

For those participating virtually, interpretation services are available for this meeting. As you know, you have the choice, at the bottom of your screen, of floor, English or French. Before speaking, click on the microphone icon to activate your own mike. When you are done speaking, please put your mike on mute to minimize any interference. When speaking, please speak slowly and clearly.

Unless there are exceptional circumstances, the use of headsets with a boom microphone is mandatory for everyone participating remotely. Also, as always, should any technical challenges arise, please advise me, and I will note that we may need to suspend for a few minutes as we need to ensure all members are able to participate fully.

I'd now like to welcome our witnesses.

Joining us from the Privy Council is Janine Sherman, deputy secretary to the cabinet, senior personnel and public service renewal. From the Treasury Board Secretariat, we have Peter Wallace, secretary of the Treasury Board of Canada, and Roch Huppé, Comptroller General of Canada.

Welcome.

I will now turn the floor over to Ms. Sherman.

You have five minutes.

[Janine Sherman, Deputy Secretary to the Cabinet, Senior Personnel and Public Service Renewal, Privy Council Office]

Thank you, Madam Chair.

I would like to thank the committee for the opportunity to be here today and to speak about the culture of the public service, an issue that is critically important to our effectiveness. Given the size, scope and geographic reach of our public service, we are really speaking about a range of different cultures within the varied work environments of public servants.

Yet, public servants are guided by a set of common values that extend across the enterprise: our commitment to providing excellent services to Canadians; our responsibility to provide the government of the day with our best advice; and our dedication to continuous improvement and renewal.

The committee has called upon the public service, in undertaking its operations, to examine best practices in respect of transformation and governance. These comparisons and principles have the potential to inform key issues such as project management, but they have also helped shape our current approach to public service renewal, “Beyond 2020”.

Beyond 2020 was launched in January 2019 and sought to build on the growing spirit of innovation and collaboration across the public service. It's a framework focused on nurturing the mindsets and behaviours within the public service that are necessary to build a more agile, more inclusive and better-equipped institution.

Its application is driven by departments, agencies, communities and individual public servants. Measuring how we are progressing is critical to informing our efforts, both in terms of identifying best practices and highlighting the areas that need greater attention and effort.

One important measure is the opinion of our employees. We are seeing strong progress in a number of areas relating to having their voices and ideas heard, being empowered and thinking differently. For example, in the 2019 public service employee survey, responses indicate that employees have an increasing view that they have opportunities to provide input into decisions that affect their work, that they feel encouraged to be innovative or take initiative in their work, and that they would be supported by their department or agency if they proposed a new idea.

Public service renewal is not an academic exercise that exists outside or alongside the priorities of the day. To the contrary, it is what positions us to quickly adjust and tackle new and emerging priorities. This has been particularly evident in the face of two current challenges for the public service: supporting Canadians through the COVID-19 pandemic and advancing anti-racism, diversity and inclusion.

After the pandemic hit, we heard from public servants that the core aspects of our renewal approach have increased in relevance. In delivering on the government's efforts to support Canadians through the pandemic, we are seeing that the Beyond 2020 themes of being agile, inclusive and equipped are being lived out in quite extraordinary ways. This is a result, in part, of having a strong focus on delivering results for Canadians, which in turn has relied on a relentless commitment to service and to finding innovative ways to deliver practical solutions.

The role of the public service in supporting during the pandemic is still unfolding. It has shown us that the status quo is not always an option. The reality of needing to generate policy, program and technology responses in near real time over the last year has served to highlight the positive and important role that innovation and agility can play in bringing ideas to light more quickly and adjusting at pace to feedback.

It will be important for us to harvest lessons from this experience, to use these findings to help inform our renewal efforts going forward. I believe we will be well served in this work by a defining feature of our enterprise-wide culture: that is, notably, a willingness to look closely at where we need to make change and to learn from our experience, which brings me to the second issue I'll touch on.

We need to tackle racism and increase diversity and inclusion in the public service. Communities and networks of diverse public servants have been working to advance equity and inclusion in our organizations. Despite these efforts and ongoing work, we have not made the progress that we need to. This is why, on January 22, 2021, the clerk released “Call to Action on Anti-racism, Equity, and Inclusion in the Federal Public Service”. The call to action is about setting expectations for leaders at all levels to take concrete steps to create a more representative and inclusive public service.

Departments and agencies are already showing a strong commitment to that progress. They're creating anti-racism task forces, advancing a dialogue to better understand and address what is transpiring in the workplace. We have offerings from the Canada School of Public Service on anti-racism, alongside other diversity and inclusion offerings.

We are continuing to develop disaggregated data to provide a better understanding of the experiences of public servants from diverse backgrounds. It is this data that will help us identify where gaps exist, but we must now act on what the results are telling us.

I started by saying I was here to talk about public service culture, and in doing so, I've just outlined a few examples that demonstrate our commitment to renewal, with a focus on culture through our own mindsets and behaviours.

Public service culture and renewal is a journey. It has a past; we are living its present; and it will evolve in the future. It is never static. We will always welcome opportunities to have open conversations about what we have learned and where we need to improve.

Thank you, Madam Chair.

[The Chair, Conservative, Kelly Block]

Thank you very much, Ms. Sherman.

We will go to Mr. Wallace for five minutes.

[Peter Wallace, Secretary of the Treasury Board of Canada, Treasury Board Secretariat]

Thank you so much.

I'm joined by Roch Huppé, who serves as the comptroller general of Canada. I aim to be as brief and direct as I can. This is an important dialogue.

I want to start off by emphasizing that the Treasury Board Secretariat accepts the Auditor General's spring 2018 report and Michael Ferguson's personal accompanying commentary. By “accept”, I don't mean grudgingly accept the recommendations. I mean we embrace the analysis and have worked fundamentally to understand and implement those incredibly important recommendations to prevent the tragedy of Phoenix from ever occurring again.

We take this seriously. We're pleased to report on the progress we've made to date. We're also pleased to discuss with this committee some of the limitations and some of the work we frankly have left to continue to do.

I want to speak to three areas of progress and reform and also acknowledge the limits on those. The first has been essentially the rule set for the policy level. The Treasury Board and the secretariat have worked hard to include the policies and directives that guide deputies and other decision-makers. We've put in place a wide number of policies. These are policy reforms. These are publicly available. They're on the web. I think they're quite consistent with those in other governments. They're largely consistent with those that guide large private sector institutions.

Fundamentally, we've established new lines of accountability and standards around IT projects, including some gating and peer review that didn't exist before and an enterprise architecture review board. That sounds kind of boring and jargony, but it means that the chief information officer now has direct eyes on business-critical projects and reviews [Technical difficulty—Editor] prior to investment. We've also put in place a series of other mechanisms and we're happy to answer detailed questions on those in terms of the IT policies.

Roch Huppé, in his role as comptroller general, has been instrumental in establishing new standards for project management. We have senior designated officials and project sponsors for each project, so we actually know who is in charge, which throat to choke and where the primary points of accountability are. We now require concept cases, so we actually know what the projects are about, what they're supposed to be doing and how digital principles can be applied. We've made sure that we've established competency profiles, so that we have some sense of who is in charge of these projects, not only from an accountability perspective, but what their capabilities should be and how we can track that well.

We've also been quite busy working on the HR side. Since April 2020, we have a new set of HR policies in place that effectively increase the flexibilities for deputies to implement their responsibilities with respect to human resources. In particular, deputies can now retrospectively recover performance pay that might have been given in error if the deputy understood in future what they.... Sorry, I won't bother with a detailed explanation. Effectively, we've now given deputies the power to recover performance pay retroactively and also to deploy executives where they need them the most. These are flexibilities that were not available before and are significant reforms.

It's early days and, frankly, the realities of 2020 and 2021 have impaired our ability to collect data and get an early sense of how these reforms are working. We'll continue to monitor and adjust.

These policy changes are important. They're useful and they're directionally correct. I'm very comfortable with them, but I don't take it for granted that they will have the necessary impact. It is something we need to monitor and be on top of. In this area, we're completely and fundamentally on top of the notion of the Auditor General around form and substance. We're paying a huge amount of attention to the application of these new policies with respect to major new programs in terms of income support, immigration reform and, of course, the NextGen of HR-to-pay systems.

These are fundamentally focused on different and more structured methodologies. The early results from these, including the Auditor General's most recent review in February of this year, have shown some real progress. We're very pleased with that.

The last thing I want to talk about is cultural reform. We remain relentlessly focused on the culture of the public service and essentially ensuring that we now have in place enterprise-wide governance for major programs, including a couple of deputy minister committees that I personally chair. Importantly, we are putting in place new internal audit resources to make sure that decision-makers are able to deal with something that they were unable to get in Phoenix, which is a direct line of sight into the actual, independent and verifiable-by-internal-audit understandings of progress against objectives.

We are learning from our experiences in the pandemic where, as Ms. Sherman indicated, we've been able to respond with some considerable agility.

I will finish very briefly by saying that we have the policies and processes in place. We do not take progress for granted. We remain relentlessly focused on making sure that we have policies in place, that we have actual lived experience, that we focus in on the results to date, and that we work with the deputy minister cadre to ensure a great deal of attention on information technology, learning the lessons of Phoenix, and staying on top of these vital areas.

It's much appreciated. We genuinely look forward to questions, because we think this is an incredibly important dialogue. We are pleased to share with this committee our progress and limitations.

Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much.

I will now go to our round of questioning.

We will begin with Mr. Berthold, for six minutes.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Chair, I would like to join you in wishing the Clerk of the Privy Council a speedy recovery. We hope he'll be back as soon as possible, healthy and fit.

Ms. Sherman and Mr. Wallace, thank you very much for your presentations.

We're waiting for additional answers. The committee asked to see you again because recommendation 1 on senior executive accountability left many questions unanswered.

Mr. Wallace, I believe you said that several new policies have been put in place and that Treasury Board can now recover performance bonuses. That wasn't possible in the past. That's important.

I have another little message, Ms. Sherman and Mr. Wallace. I'd like to acknowledge the excellent work of the public service employees who respond to citizens, sometimes with limited means, since things are changing so quickly. We see that a considerable effort is being made to respond to citizens, and I wanted to share that with you.

I'd like to come back to the point we're discussing today. Ms. Sherman, you talked a lot about culture and the new policy to attract executives to the public service. At this committee, we want to know what is being done to ensure that executives are held accountable for their actions. That's what was missing in the various responses, and we haven't been satisfied with the ones we've received from the government so far.

Do you have a specific document outlining all the measures that have been put in place since 2019 to ensure the accountability of deputy ministers and executives of the public service?

[Janine Sherman]

If I can answer the question with respect to deputy ministers, the accountability regime is essentially the performance management program, which is an established program. It has been in place for some time. It's outlined on our website. It does require a rigorous process of evaluation for deputies, in terms of the expected results annually, as well as the achievements they make.

As my colleague mentioned, in terms of performance pay, the significant change was made in April 2018, so prior to the 2019 time frame, but the same in terms of the recovery of performance pay in certain situations.

The overall performance management regime does remain the same. I would highlight that there are several elements of that in terms of program and policy results, management results and leadership results. There is a corporate commitment set each year by the Clerk of the Privy Council.

Since 2017-18, I believe, there has been a requirement for deputy ministers to focus on some of the Phoenix-related issues in terms of ensuring that employees receive pay, that their own systems are working properly and they are addressing concerns, and that they are contributing to the work of Public Services and Procurement Canada as well as the Treasury Board Secretariat in terms of—

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

I'm sorry to interrupt you, Ms. Sherman.

[Janine Sherman]

It's okay.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Ms. Sherman, we were talking primarily about the accountability structure, in other words how the government resolves serious cases of mismanagement or major anomalies.

Does the government keep a record of serious management anomalies or problems in each department? How many cases have there been in recent years, since the 2018 reporting deadline? Do we know the number of cases or of disciplinary actions taken?

Is it possible to give us a picture, with concrete numbers, of how accountability of public service executives has improved since then? How has that translated?

On the improvements you mentioned, Mr. Wallace, has everyone suddenly become better? Is there no more mismanagement? Have there been cases where intervention was required?

[Peter Wallace]

No, and I don't want to give you an assurance that there is no more bad management.

The policies were put in place on April 1, 2020. They extend the ability the deputies already have, and the accountability in these instances rests with the deputy heads of the institutions. They extend the accountability deputies already have to deal with poor performance, make it possible to retroactively catch up with performance pay that may have been given in error, and also provide deputies with better flexibilities in terms of the deployment of their resources.

Frankly, these are early days. We do not yet have secure numbers on how these authorities have been implemented. It will have been complicated by the realities of the pandemic over the course of the past year. Again, reforms allowed deputies an ability to have additional tools to drive cultural change in their organizations and to apply accountability.

I do wish I were able to give you a number. Unfortunately, the realities of 2020 and early 2021 will obscure the data signal. You'll have to ask me that question in the future. I apologize for not being able to give you a clear answer.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Berthold and Mr. Wallace.

We will now move to Mr. Fergus, for six minutes.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you very much, Madam Chair.

Like my colleague Mr. Berthold, I wish Mr. Shugart a full and speedy recovery. As a resident in the national capital region for over 30 years, and as a member of Parliament, I've had the opportunity to work with Mr. Shugart many times. He's a public servant who has dedicated himself to providing services to the public. We wish him a full recovery.

I'd like to thank Ms. Sherman and Mr. Wallace for being with us and for their testimony. They spoke about the importance of changing not only the policies but also the culture in response to the Auditor General's report on information technology systems.

My first question is for Ms. Sherman.

As we know, changing policies and culture is difficult, but changing policies seems a little easier to me than changing the culture. You talked about the importance of the Clerk of the Privy Council's initiative. He encouraged the community of deputy ministers to better combat racism, and specifically anti-Black racism in the public service, to ensure that the richness of Canada's diversity is reflected at all levels of the public service.

Can you elaborate on what initiatives you think are necessary to ensure that Black Canadians are no longer discriminated against in the public service?

[Janine Sherman]

It is, as you have pointed out, a focus and a priority that the Clerk of the Privy Council has put out there for the public service. We are taking it very seriously and looking for significant concrete action to be taken at all levels of leadership.

I would also highlight that, in addition to the call to action, which I've mentioned is reinforcing the importance of action, there's a lot of work that has been done, but we haven't made enough progress. It is actually looking for ways to improve the results we have. We're working on that.

The deputy ministers have also received, in their performance management for the current year, a request to take on particular activities. We've given them a list of things that we are expecting them to do around training, awareness, retention, promotion and leadership development in terms of Black employees in particular and all the different groups of visible minorities and persons with disabilities.

We are expecting people to take significant action. Some of that is training and awareness building, things like unconscious bias training, and then going even deeper into the organizations to make sure there is a dialogue, so that the voices of public servants are heard, people who have, potentially, experienced a very different public service from the ideal we strive for.

There will be an effort to improve recruitment and retention. I would point out that, for some of that, we often have very good results on representation at different levels of the public service. I know we need to do more to ensure that the leadership levels reflect the same diversity and representation. There are efforts to do external recruitment, to look more carefully at our hiring processes and promotion processes inside the organization, to look at any of the systemic barriers and to review policies and programs related to human resources and to hiring.

The disaggregated data that I mentioned is helping us understand, within the representativeness of the public service, where there are particular gaps and areas of focus, in terms of either particular functions and communities or different racialized groups and how they may be represented and under-represented.

That will help ensure that we have a much broader and comprehensive approach going forward in terms of improving the representation of Black employees as well as other racialized groups.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Madam Chair, I hope I still have a few minutes left.

[The Chair, Conservative, Kelly Block]

You have 30 seconds.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

In that case, I'll be very brief.

Mr. Wallace, you talked about the importance of changing the culture to make up for the problems with the Phoenix pay system.

In 15 seconds, can you give us an overview of the lessons you learned and tell us about the new NextGen system, which ensures that public servants are paid properly?

[Peter Wallace]

Very briefly, the original Phoenix was done with incredibly ridiculous and catastrophic tunnel vision. People were making decisions without information, without sharing the information.

We've made sure that NextGen is far more broadly based, infinitely more exclusive, done on an iterative, agile, step-by-step basis. The most recent Auditor General look-see at that, published in February of this year, confirms that we're on the right track. We're not claiming victory yet, but we're certainly in a much better place.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Fergus and Mr. Wallace.

We will now move to Mr. Blanchette-Joncas, for six minutes.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Madam Chair.

I can only agree with the wishes for a speedy recovery offered to the Clerk of the Privy Council. I won't dwell on these wishes, as my time is more limited than that of some of my colleagues.

Good morning to the witnesses.

My first question is for Mr. Wallace and Mr. Huppé and concerns the infamous Phoenix pay system.

I can only tell you about the many cases in which I've had to intervene regarding the hell that some public servants are going through. People have told me about their distress. I've heard many testimonies about bankruptcy, divorce and even suicide.

I understand that you have good words of encouragement for better pay management and technological advances, but you'll understand that it does nothing to reassure me. Until I'm told that the problem is completely resolved, I won't be reassured.

You mentioned the competency of existing managers.

Have the people who needed to improve their competencies done so? Were the people who didn't have the competencies required replaced in an effort to fix the problem immediately?

You could, indeed, say it was a monstrous Tower of Babel.

[Peter Wallace]

We'll have different answers to the question. It's much appreciated. The actual performance of Phoenix is getting better, but we are of course on our way to replace the system, which is the ultimate objective. The backlog and other aspects have been improving gradually over time.

There remains a relentless focus on two critical components. The first is making sure that the existing Phoenix system does perform better. As I've indicated, we've seen much better outcomes and results from that, and a gradual whittling down of the backlog and a reduction in the harms done, but that remains a very real and pressing concern. We continue to work very directly with our employees, bargaining agents and others to try to improve the performance.

More fundamentally, we're focused on the competencies necessary to get a new system in place. That is being put in place by our colleagues at Shared Services Canada. As I've indicated, we believe that we are on the right track in terms of the procurement process. The Auditor General has reviewed the initial steps and has commented favourably on this, but frankly it's a long way to go and we will need to develop significant new competencies in the application of software as a service, which is not something that the Government of Canada has done before. With Roch and with our new project management standards, we are looking forward to develop those competencies and make sure that we are in a position to deliver excellent results on a going-forward basis.

Roch, is there anything you would you like to add?

[Roch Huppé, Comptroller General of Canada, Treasury Board Secretariat]

I don't have much to add, but I have to say that the last point that was raised is important.

One of the most important things is to make sure we understand the competencies and expertise these people need. We are currently working with the community to develop that. We have developed competency profiles.

We're working hard with the Canada School of Public Service to ensure that training is improved. There have been improvements, but there must be more. We're working with some universities to see what programs might be of interest. It's one of the steps that will continue in the coming months and years. Our goal is to improve people's competencies and their chances of success. These are mostly very complex projects. We need to make sure that we give people the tools to meet those challenges.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, gentlemen.

My next question will be much more specific because I'm trying to get a better understanding of what's going on.

Were people who didn't have the necessary competencies dismissed or transferred to other departments or positions?

I can't ignore the fact that people have taken their own lives because of the incompetence of some people. The question is clear: Have the public servants who made mistakes been held accountable?

[Peter Wallace]

I apologize for the general nature of this answer. I've been part of the Government of Canada since 2018 and obviously joined at a point after much of the original concern with Phoenix had been realized. The questions have, I believe, been asked historically, and I believe that the government has indicated...or that accountabilities have been realized but that these are confidential HR matters.

I don't believe that I have specific additional information that I can share with the committee about the events of 2016, 2017 and 2018. I apologize for not having this information. I don't know if others may have additional information they can share, but I believe this is covered by the broad confidentiality provisions of employment law.