Public Accounts Committee on Dec. 14th, 2023

[Andrew Hayes]

Yes, I stand by it.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Would you have anything to add regarding the pace of the government's work to achieve its targets for modernizing IT systems?

[Andrew Hayes]

I do not have a lot to add.

I would say it is important to accelerate this modernization, because there are risks of system failures. One that I am thinking of is the benefit payment system. As you said, these systems are extremely important for Canadians. Almost everyone will use these programs at one time or another over their lifetime.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

I would now like to address Ms. Luelo, from Treasury Board Secretariat, who is participating in the meeting by videoconference.

Ms. Luelo, do you agree with the figures published in the Auditor General's Report 7 regarding the pace of IT systems modernization, which will not enable you to achieve your own objectives in that regard?

[Catherine Luelo]

That is a good question, Ms. Sinclair-Desgagné; thank you for that.

I would say that I absolutely agree with the conclusion of the Auditor General. I think about one of the pieces of language used in the report. I might just highlight that we really must focus on modernization and maybe be a little bit less ambitious around transformation. Those two words are very different but very important.

To your point, these are the most vulnerable population. We need to move as quickly as we possibly can to get off old infrastructure, old application, and on to new. I think the ESDC team is on a very good path there, but that requires us to adjust our expectations around what we talk about as transformation. Frankly, I think that's a very good decision. I think we build to allow for transformation in the future. Right now the focus has to be on retiring the technical debt.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you.

So you are distinguishing between modernization and transformation. When you say we need to pick up the pace, what is Treasury Board going to do, in concrete terms? Right now, what we learn from the Auditor General's report is that Treasury Board does not have all the data from the departments for accelerating the process.

First, are you going to be getting that information from the departments?

Second, what strategy are you planning to put in place?

Third, what measures are you going to implement as part of that strategy so that it is put in place and contributes to accelerating the process?

[Catherine Luelo]

Those were three rapid-fire questions; I hope I get the answers to all three.

One, you are correct. We don't have all the information. We are putting in place a new system in 2024 that is going to assist with that. We have enough of the right information that we shouldn't wait until we get more fulsome information to go. That's message number one.

Message number two is from the modernization, transformation perspective. As part of the reviews we do—granted we do them on an subset of programs—benefits delivery modernization is one that we have spent a lot of time on. We are continuing to go in and do assurance activities with these programs to ensure that they are not getting too, I'll use the word “distracted”, around transformation and stay very focused on the tight scope of managing.

I think, from a broader sense, that we will be looking to provide dashboards to the different departments through 2024 that help them identify where they have specific issues and assists in putting together business cases to have those upgraded.

I would note, and I haven't had a chance to say it, that we spend about $10 billion a year on technology. I'm not sure if this is about more money at this stage, because we have lack of staffing, and we have an inability to access the resources even externally. The talent pool is very light. This is about the right work done better versus doing more work.

[The Chair, Conservative, John Williamson]

Thank you, Ms. Sinclair-Desgagné.

I will turn the floor over to the next speaker, Mr. Desjarlais.

You have the floor for six minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I want to thank the witnesses for being present. Although you are many, I hope we can keep up with the information that gets supplied today.

This committee is concerned. Earlier this week, we passed a motion.

It expressed:

decades of unchecked spending on outsourcing—which accelerated in 2006—has cost Canadians tens of billions of dollars while creating a shadow public service that works alongside the real public service—but without the same hiring practices or transparency requirements

If it's in relation to outsourcing in Canada, I think the Auditor General may be familiar with my position. For example, we heard, a few weeks ago, in relation to the National Capital Commission, remarks on the reality that, since 2018, they've had to take on private contracting to try to make up the huge deficits that have compounded within their ministry due to government underfunding of critical services. It's beginning to paint a picture for me. Audit after audit has begun. I begin to clearly see a continued pattern of outsourcing, which is ballooning the costs while also diminishing our public service.

I'll turn to recommendation 7.37 of the modernizing information systems audit.

It states:

In coordination with [SSC] and in consultation with departments and agencies, [TBS] should finalize and implement a comprehensive strategy for addressing the information technology modernization needs of departments and agencies. The strategy should

among other things

address the scarcity of personnel with the needed skills to support information technology modernization...

My question is for the deputy auditor general. How severe is the shortage of qualified personnel within the public service?

[Andrew Hayes]

I would start by saying that, in both of these reports, we identified the importance of skilled personnel to do the work needed. I think the reality of recruitment and retention challenges—it is a competitive marketplace for skilled IT professionals—means the government has to look creatively at how to retain and attract these people. Also, the government has to take a good, careful look at how it will train and upskill its current employees.

The importance of the recommendation you cited, 7.37, is that a strategy that is comprehensive and takes into consideration all of these factors is needed, at this point. It's long overdue.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Would you suggest that lacking the skilled public service required has a direct impact on the desire of these ministries to outsource?

[Andrew Hayes]

I would say there are certain circumstances where outsourcing is needed, for sure. For example, where it doesn't make “value for money” sense to have a particular skill set on staff 100% of the time throughout the year, it makes sense to outsource. Likewise, in situations of peak need, it makes sense to outsource.

What is important is that we don't lose the skill set of our public servants, and that we are able to account for the reasons why we are outsourcing.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

ESDC has spent $409.7 million on just four contracts alone. There was a further $70.5 million contract with IBM, and another with PricewaterhouseCoopers valued at $147 million. We're approaching $1 billion. These are astronomical figures. They're immense, and they're heavy for Canadians. All this spending has led to the brutal findings of the Auditor General. They're warning of another Phoenix.

I mentioned earlier that outsourcing, both in the instances for the National Capital Commission that we heard about audits for.... We've heard about audits for other instances, where outsourcing continues to run rampant. Phoenix is one of the largest fiascos we've seen in the history of Canada. We still have public servants today who don't even get their paycheques. You have to forgive me for being so concerned about the fact that IT specialists from outside government could be recommending systems that are now supposed to be in charge of things like CPP, employment insurance or old age security. These are extremely important programs that are valuable to Canadians. We're just going to gamble on it and get a similar result to Phoenix. I'm nervous about the risk these contracts take on for Canadians, both in price increases.... They're not serving Canadians. The difference between the public service and...is that the public service wants to serve Canadians. Their primary job is to serve Canadians. McKinsey's job is to make money for their shareholders.

How can Canadians get assurances that these programs aren't going to be gambled away, finding the same problems we found with Phoenix?

[Paul Thompson]

I very much appreciate the concern around the intricacy of this project and the risks associated with it. I can assure you that we have a very strong contingent of public servants working on this project under the leadership of Cliff and John.

The reality is, though, that we don't have all the expertise, as the deputy auditor general noted. All this expertise and experience does not reside within the public service.

If we look at the lessons learned from other jurisdictions as to how they implemented such projects, it's almost always with the help of experienced vendors that have actually executed these projects elsewhere. That's the kind of experience we're trying to tap into here with the project in Canada.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

How much money do these guys make off the public service?

[The Chair, Conservative, John Williamson]

Mr. Desjarlais, I'm afraid that is your time. We will come back to you shortly.

We're turning now to Mrs. Gray.

You have the floor again for five minutes.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

The deputy minister of ESDC had confirmed that the budget will now be greater than $2.2 billion and you're working on developing what that new budget might be.

Can you just quickly let us know what that timeline is expected to be? When would that be completed?

[Cliff Groen]

As Deputy Minister Thompson indicated, we're currently working on that. We expect that will be completed within the next four to six months.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Great. Thank you very much.

Once that new budget is developed, could that be tabled for this committee, please, whenever that timeline is met within the next four to six months?

[Cliff Groen]

Sure.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

I mean the detailed budget.

Thank you very much.

For 2023-24, approximately 500 public service workers are working on the benefits delivery modernization program.

Can someone confirm that for us here today?

[Cliff Groen]

I believe that number is correct. I have a table here.

Give me one moment. My apologies.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Can you also confirm, whether it's yourself or someone else here, that approximately $669 million has been given to contracts for outside consultants?

[Cliff Groen]

Actually, I found the table I was referring to.

In 2023-24, it's estimated that 965 public servants are working on the program. That's in this fiscal year.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you for updating us on that.

Can we also confirm, for the outside consultants, that there has been about $669 million in contracts?