I do. Thank you, Mr. Chair.
As the chair indicated, my name is Kathleen Owens. I'm the assistant comptroller general for assets and acquired services at the Treasury Board Secretariat. My colleague, Mark Schizkoske, is the director of procurement policy.
It's certainly a pleasure to be here today to provide you with an overview of Treasury Board policy and the regulatory framework for procurement in the Government of Canada.
As you know, the Treasury Board Secretariat is the administrative arm of the Treasury Board, a statutory committee of cabinet that acts as the government's management board, providing leadership to federal organizations through the approval of government-wide administrative policies and directives.
It's the administrative policy framework around the acquisition or procurement of goods and services that I'm here to talk to you about today.
Procurement is a key mechanism federal organizations use to meet their business needs and deliver results to Canadians. In 2015, the government entered into over 342,000 contracts totalling nearly $20 billion. As a government, we buy a very wide range of goods and services, including professional and construction services, with the majority of our contracts valued at less than $25,000.
In support of the government's commitments to open data, Canadians can find information on government contracts through a number of sources: the open government portal, as well as the purchasing activity report and the report on the proactive disclosure of contracts over $10,000.
I've provided the links in my opening remarks if you want to look at those sites.
When departments need to make purchases to address their operational needs, they have to apply a relatively complex web of procurement rules. Procurement is governed by a combination of legislative, regulatory, and policy requirements, including Canada's commitments under modern treaties with indigenous peoples and provincial and territorial governments, as well as 11 domestic and international trade agreements.
Accountabilities in procurement are also complex.
The Treasury Board sets the administrative policy for federal procurement across government and considers departmental proposals to enter into contracts for high-value and high-risk procurements. The secretariat monitors government-wide performance in the management of procurement and can make recommendations to the Treasury Board on policy changes and on specific departmental transactions.
Public Services and Procurement Canada and Shared Services Canada both act as common service providers that procure on behalf of departments and have exclusive mandates for goods and certain IT services. My colleague from PSPC will explain more about that in a few minutes.
Ultimately, it's deputy heads of departments who are accountable for complying with the requirements of the Treasury Board contracting policy. All departments have the ability to procure goods and services delegated to their minister within certain financial thresholds.
The principles of fairness, openness and transparency are the basis for government procurement, and they are set out in the Financial Administration Act. The Government Contracts Regulations support openness by requiring that bids be solicited before entering into a contract. There are four limited exceptions to this obligation: when a contract is below $25,000; when the contract is for a pressing emergency; when it is not in the public interest to solicit bids; and when there is only one supplier who can provide the good or service.
The Treasury Board contracting policy sets out the principles and the steps for how government procurement should be conducted. It applies to 98 federal organizations, listed in schedules I, I.1, and II of the Financial Administration Act. I would note that the policy does not cover crown corporations or the Canada Revenue Agency, which establish their own internal policies and procedures for procurement.
The objective of the TB contracting policy is to ensure that contracting is conducted in a manner that enhances access for all suppliers, competition, and fairness. The process should withstand public scrutiny for prudence and probity and should result in best value for the crown. By “best value”, we don't necessarily mean the lowest price, but the combination of price, technical merit, and quality, or, as appropriate, the optimal balance of overall benefits to the crown and the Canadian people.
The contract values above which TB approval is required are set out in the policy so that TB ministers can exercise their oversight role over certain transactions. TB can approve exceptions to these limits, which require departments to seek TB authority for emergencies or other department-specific contracting requirements, such as bulk fuel purchases or specialized provisions for construction.
The contracting policy also requires that departments ensure that operational requirements take pre-eminence, that competition is the norm wherever possible, that other national objectives, including aboriginal or socio-economic development priorities, can be supported, and, that departments comply with the government's trade agreement obligations.
In addition to the contracting policy, there are other related TB-approved policies relevant to procurement processes. For example, the policy on green procurement requires that environmental objectives are integrated into contracting decisions.
Now, I will say that the TB contracting policy was approved in the late 1980s and has not been fundamentally renewed in several decades. It has had periodic updates and additions that make it a combination of principles, legal requirements, and practical guidance. Over time, it has developed into a complex web of over 300 requirements, and some are very prescriptive, process-oriented rules. It can be very difficult to navigate for those who are not procurement specialists.
In terms of this committee's two areas of interest for your study on procurement, I can say that beyond encouraging fairness and openness for all participants in the procurement process, the contracting policy does not have specific provisions for small and medium enterprises. My colleagues at PSPC have programs to support small suppliers, which you will hear about.
The contracting policy does have several requirements for contracting with indigenous businesses, including contracting authorities related to modern treaties, as I've mentioned, and also that contracting authorities observe the requirements of the procurement strategy for aboriginal business, which is led by Indigenous and Northern Affairs Canada.
The effectiveness of TB Contracting Policy requirements is something that the Treasury Board Secretariat is currently examining as we undertake a policy reset exercise, in support of the direction given to the Treasury Board president in his mandate letter to review policies to reflect a more modern approach to comptrollership.
Over the past several months, we have held consultations with departments and are working to develop a policy that enables more flexible and innovative procurement strategies, and streamlines policy requirements. We also want to develop policy and guidance that enables better horizontal linkages between procurement, project management and asset management functions to improve project and procurement planning, and hopefully ensure better outcomes overall.
As you can see, this is a very technical policy area, further influenced by a complex legal environment and a number of different players with overlapping responsibilities. Ten minutes is not sufficient to give you the full picture of this, but I hope this gives you a general overview with which to begin your study.
I'm happy to answer any questions you have. Thank you.
Good morning, Mr. Chair and committee members. Thank you for inviting me to be with you today.
I am the assistant deputy minister for the acquisition program at Public Services and Procurement Canada. Accompanying me is Mr. Desmond Gray, the director general of the office of small and medium-sized enterprises.
I understand that your main interest is to gain an overview of the federal procurement process and to receive some general information related to the set-aside for aboriginal businesses and on small and medium-sized enterprises.
The procurement environment involves many players, the key ones being Treasury Board Secretariat, which, as we heard from Ms. Owens, establishes and monitors the regulatory and policy environment; my department, PSPC, which provides common procurement services and tools to client departments; likewise, Shared Services Canada provides common IT procurement services to client departments; individual federal departments and agencies, which buy goods and services under their own delegations; and, finally, the suppliers that compete for government procurement opportunities.
Mr. Chair, I will keep my remarks focused on the role and responsibilities of Public Services and Procurement Canada, or PSPC.
First and foremost, PSPC is the common service provider for the bulk of government purchasing. The department procures approximately $18 billion's worth of goods and services annually on behalf of client departments, equalling roughly between 77% and 80% of the government's annual procurement expenditures.
At PSPC, there are approximately 1,300 procurement specialists working either in the National Capital Region or in regional offices across Canada. For additional context, the total number of procurement specialists in all of government is about 3,100, meaning PSPC is the employer to about 40% of the government's procurement workforce.
PSPC's authority as a common service provider stems from the Department of Public Works and Government Services Act, which gives the Minister of Public Services and Procurement exclusive responsibility for the procurement of goods. To maximize efficiencies, the Minister has delegated to other departments the authority to acquire goods under $25,000.
PSPC does not have the same exclusive responsibility for procuring services. Instead, other departments can undertake their own procurement of services. Above a certain threshold, usually $2 million, departments have the option of using PSPC or going directly to Treasury Board for contracting authority. PSPC does, however, have exclusive responsibility for the procurement of certain types of services, including printing and translation.
The procurement process is guided by the principles of fairness, openness, transparency, competition, and integrity. Open competition is the default, both in regulation and in practice. PSPC has a well-established code of conduct for procurement that sets out the expectations for ethical conduct on the part of both the employees and the suppliers. PSPC employees receive training and reinforcement of desired and expected behaviours.
Mr. Chair, I thought it would be helpful to share some examples of what we buy on behalf of our clients. We buy everything from complex systems and consulting services to construction and military equipment. This includes aircraft, bridges, the services of health practitioners, bulk purchases of drugs and vaccines, satellites, and repairs and retrofits to government properties to reduce its carbon footprint as part of the greening of government operations.
Regardless of whether PSPC is buying a good or a service, considerable time is spent up front, analyzing how best to acquire it, how it will be used, and how it will be disposed of. This thoughtful approach is designed to help us achieve best value and reduce costs. It means having a thorough understanding of the market conditions and choosing the most efficient method of supply for what is being purchased.
PSPC uses several methods of supply. Some of the most common include standing offers, which are used when it is possible to define the requirement but expected quantities and timing are not known. For example, we have a standing offer for fuel, which allows client departments to purchase fuel as needed at predetermined pricing. Another method of supply is the supply arrangement, which is used to establish a pool of suppliers when there is a recurring need that has not yet been defined. Think of it as a pre-qualified list of suppliers we can call up when client departments determine what they need—for example, professional services for auditors, or tires for heavy equipment. A further method of supply is to enter into a contract with task authorizations, under which the work will be performed on an “as and when requested” basis.
Regardless of the method of supply, significant effort goes into developing the procurement strategy. This starts with the business commissioning phase, in which the client department defines the need. Next, PSPC and its client work together to select the appropriate procurement strategy. During this phase, extensive industry engagement may occur. We work with the client department to identify what socio-economic levers can be brought to bear. For example, the procurement strategy for aboriginal businesses, known as PSAB, is considered at this stage. The goal of PSAB is to maximize the participation of, and benefit to, indigenous peoples, businesses, and communities. Last year PSPC managed set-asides for indigenous business contracts worth around $112 million. We will also take into consideration the applicable trade agreements. If a procurement is valued at or above certain thresholds, the obligations of the agreement apply.
The solicitation is launched and posted on our buyandsell.gc.ca website, which makes publicly available PSPC's procurement opportunities, both active and closed.
We will typically receive questions from interested suppliers. PSPC responds in a transparent manner; the answers are developed, translated, and posted on the web to ensure a fair and competitive playing field for all potential bidders. The minimum length of time a solicitation needs to be posted to satisfy trade obligations is stipulated in the trade agreements and is often extended if suppliers ask for extra time.
The solicitation material contains the statement of work prepared by the client, the contractual clauses, guidelines on conflict of interest, and the evaluation criteria and basis of selection. Once the solicitation is closed, the client conducts the technical evaluation of the bids, and PSPC conducts the financial evaluation.
As a key part of the procurement process, PSPC manages the contract, monitors the execution of the contractor's obligations, and seeks to mitigate risks, such as a delay in the production or delivery of a good.
Depending on the complexity and the monetary value, PSPC will use an independent third party fairness monitor, whose role is to provide an unbiased and impartial opinion on the fairness of the process. If a bidder has concerns that the procurement process was not conducted fairly, there are mechanisms in place to resolve these disputes. The Office of the Procurement Ombudsman is one such mechanism. My colleague Lorenzo leraci will provide more details.
Mr. Chair, I would like to spend the last few moments of my remarks focusing on suppliers. As the committee is likely aware, Canada's supplier base is composed primarily of SMEs. As of today, there are approximately 7,900 suppliers with active PSPC contracts, 80% of which are small and medium-sized Canadian enterprises.
To help SMEs navigate the procurement process, PSPC administers the Office of Small and Medium Enterprises, OSME, whose objective is to increase SME access to federal procurement, reduce barriers, simplify the contracting process, and provide tools to suppliers interested in doing business with us.
Over and above the dedicated efforts of OSME, PSPC works closely with TBS, a host of departments, the national Supplier Advisory Committee, and individual suppliers to explore ways to improve and modernize our approaches to delivering procurement. This supports Minister Qualtrough's mandate to increase the diversity of bidders—including women, indigenous peoples, persons with disabilities, and visible minorities—and to take measures to increase the accessibility of the procurement system to such groups while working to increase the capacity of these groups to participate in the system.
PSPC officials look forward to having the opportunity to come back and present in more detail on PSAB and SMEs.
Thank you, Mr. Chair and committee members.
Mr. Chair and committee members, thank you for your invitation. It is a pleasure to speak with you about the work done by our office and its role in the federal government's procurement process.
I was named interim procurement ombudsman in May 2016, after having occupied the position of deputy procurement ombudsman for four years. As the interim procurement ombudsman, I have the honour of working with a group of dedicated and quality people who seek to make a positive difference in the lives of Canadians. They do this by helping to resolve procurement-related issues and by promoting fairness, openness, and transparency in federal procurement.
My remarks this morning will focus primarily on the ombudsman's mandate, the work we do, and how we operate. Let me begin with my mandate.
The position of procurement ombudsman became fully operational in May 2008, when our regulations came into force.
The ombudsman's mandate has four main components. I will give you an overview of each one and will go into more detail about them a little later.
The first component is to review any complaint respecting the award of a contract for the acquisition of goods below the value of $25,000 and services below the value of $100,000.
The second component is to review any complaint respecting the administration of a federal contract.
The third component is to review the procurement practices of departments to assess their fairness, openness and transparency.
Lastly, the fourth component is to ensure that a dispute resolution process is provided.
The procurement ombudsman's mandate is government-wide. There are nearly 100 federal organizations that fall within the mandate.
The ombudsman reports to the . In this regard, the ombudsman is required to submit an annual report to the minister, who in turn is required to table that report in Parliament. Nonetheless, neither the minister nor her staff are involved in our daily activities, our operations, or our reports.
In addition, my office and I operate at arm's length from Public Services and Procurement Canada and all other federal agencies.
Allow me now to give you an overview of the type of work we do.
As I mentioned, the first area of my mandate is to review complaints regarding the awarding of federal contracts for goods under $25,000 and services under $100,000. This part of the mandate was established by the government due to the fact that the federal procurement system, prior to the creation of our office, was limited in providing mechanisms for suppliers who had issues related to the awarding of low dollar value contracts.
For larger dollar value contracts, where the trade agreements apply, suppliers could and still can turn to the Canadian International Trade Tribunal, the CITT. The CITT, as a quasi-judicial tribunal, examines whether procurements undertaken by federal organizations are compliant with domestic and international trade agreements.
While suppliers with issues related to the awarding of larger dollar value contracts could go to the CITT, suppliers with issues concerning lower dollar value contracts had three choices, none of which were very effective for a small business.
First, they could attempt to have their issue addressed by the contracting department, which sometimes worked and sometimes did not. Second, they could accept the situation as an unfortunate cost of trying to do business with federal departments. Third, they could take legal action, which is costly and often not a realistic avenue for small businesses. In creating the Office of the Procurement Ombudsman, the government filled the gap for these low dollar value contracts.
Allow me to emphasize that this part of my mandate is the only one where there are dollar limits. In the other three areas of my mandate, which I will discuss a little later, there are no financial limits on the contracts that we can review.
When a written complaint is submitted to my office, I am required to make a determination within 10 working days after the filing of that complaint as to whether or not to review the complaint.
During those 10 working days, my office will attempt to facilitate a resolution to the issue where possible. If dialogue is unsuccessful and does not result in the withdrawal of the complaint or the cancellation of the awarding of the contract, and if the complaint meets the regulations, then I am required to initiate a review of the complaint.
Once that's completed, I issue a report, which I am required to send to the minister of the contracting department, the Minister of Public Services and Procurement, and the Canadian supplier who filed the complaint. In addition, I provide a copy of the report to the deputy head of the contracting department.
As my mandate is to review contracts of lower dollar values, or where the trade agreements do not apply, the review assesses whether the awarding of the contract was done in a way that aligned with the Treasury Board contracting policy and respected the principles of fairness, openness, and transparency.
In an instance where a written complaint does not meet the criteria of the regulations, I am required to inform the contracting department and provide them with a copy of the complaint. I use this as an opportunity to bring the complaint to the attention of the deputy head of the contracting department.
Another part of my mandate that I would like to discuss briefly concerns the review of procurement practices. In this area, my office works independently in reviewing the procurement practices of federal agencies to assess the fairness, openness and transparency of them, and to recommend improvements.
We determine the subjects of the reviews, in part based on the comments we receive from Canadian suppliers and federal officials. We also undertake an assessment of the various parts of the procurement process to identify the ones that may pose a risk to fairness, openness and transparency.
In addition, we undertook follow-up reviews to determine whether the federal agencies had taken steps to respond to the recommendations made by the ombudsman in the previous reports relating to the review of procurement practices.
So far, our follow-up reviews, which are available on our website, have confirmed that federal agencies follow the ombudsman's recommendations seriously and, in general, take steps to respond to these recommendations.
The last part of my mandate that I would like to provide you a brief overview of is alternative dispute resolution. The ombudsman is required to ensure that a dispute resolution process or service is made available to the parties of a federal contract—namely, a supplier and a federal department. Either party to the contract can request this process. When we receive a written request, we ask the other party to participate in our voluntary process.
Since my appointment as interim procurement ombudsman, we've handled 16 requests for our dispute resolution process. Of these, four requests were declined by one of the parties; 10 requests were withdrawn after our office helped the parties reach an informal resolution prior to the launch of our formal process; and, in two cases, we addressed them through our formal process. In both those cases, we were able to help the supplier and the federal organization reach a legally binding settlement agreement.
Lastly, my office doesn't hesitate to invest the time and effort needed to respond to people who contact us. Every time someone contacts us with a procurement-related question, issue or concern, we try to provide impartial and helpful information, quickly and professionally.
Our approach is three-pronged: to educate, facilitate and investigate. These three pillars are described in detail in the annual reports my office produces. I encourage you to consult these documents to learn more about this.
In undertaking our work, we seek to be a useful recourse mechanism for Canadian suppliers and federal officials who are dealing with procurement issues. We strive to be part of the solution by promoting fairness, openness, and transparency in federal procurement.
As it's the one-year anniversary, you'll recall that Mr. Weir, a couple of others, and I met in an emergency meeting on Phoenix a year and a half ago, on July 28. At that time, Ms. Lemay stated that October 31, a year ago today, would be a hard deadline for clearing the Phoenix backlog. On September 19, 2016, before that deadline, Ms. Lemay said, “We have made a commitment to the backlog, and I am told we intend to meet that date.” On October 6, Ms. Lemay said that we're on target, next month is a big month, we're going to get to that target, and we're going to meet that target. Ms. at the same time agreed that they were going to meet that target, and of course we missed the target. Things have blown up. Things are getting worse. I think we're now at a backlog of over 200,000 employees and over 300,000 to 350,000 individuals.
I want to read for you some of the letters we've received from people affected by the Phoenix system to really emphasize how important this issue is and the fact we're not getting anywhere, and why we need the working group to appear before us to explain what they're doing to fix Phoenix.
Very recently, it was in the news that a public servant waited until his two children finished their university exams to tell them he was dying. He was 61 years old. He passed away. Due to Phoenix, they were not able to get his pension cheque. It wasn't until the family went public that the money was actually provided.
I have a letter here: “My name is Sebastian. I've been a public servant since 2014. In April I took leave without pay for medical reasons. My pay should have been stopped and wasn't. I received an overpayment and notified my manager immediately so I could try to resolve the issue. I returned to work in June, reduced my hours, and continued to be paid full-time. I took additional leave without pay in 2016 and continued to be paid. I spoke repeatedly with my manager to resolve the issue. I didn't want to receive payments I wasn't entitled to. In October, I suddenly didn't get a paycheque—no notice, just no pay. It had been clawed back to apply to other overpayments.”
Here's another one: “I went on maternity leave. My son was born eight weeks early. He spent three weeks in neonatal care. I should have spent the whole time holding my son, the only care we could provide, instead of spending hours, first from the hospital bed following my emergency C-section, and then from the hallway outside the NICU, calling and calling and trying to get my record of employment so that I could actually receive income during this stressful period. I was told at that time that it would take six months. I eventually received an email copy of a handwritten ROE but never received an original one to submit. I continued to contact my pay centre to resolve my overpayment. I was working with one compensation adviser who advised me my overpayment was about $15,000, which was close to what I had calculated, when he suddenly stopped responding to me. I called back again. It was $7,500 and then $22,000 was owed. No one would tell me why or how these amounts were calculated. I was still getting paid. I was a category 3.”
Keep in mind that she is on maternity leave and still in care, having delivered a baby son two months early. She was in the lowest priority.
She continues: “He would not even take a message and have someone call me back. I ended up sitting at my desk in the middle of my call centre, bawling my eyes out while trying to talk to someone at the pay centre. I was being told no one knew what my overpayment was, but my pay stub said $22,000 and they might just try and recover that. In 2017, I received my T4, followed by an amended T4.”
If you recall, I think it was in November, over a year ago, that we had another meeting with Ms. Lemay and Minister . We brought up the issues of the T4s, and we were told not to worry about it and that everything was in hand. I think it turned out that 70,000 T4s were delivered incorrectly—“in hand”.
I might as well continue.
This letter says: “By my calculations, I received $50,000 in 2016. I should have received $35,000. I received a T4 for $20,000. I requested a new T4 many times, but so far have no success.” Keep in mind that income recorded on the T4 affects your benefits, such as the child care benefits, the next year.
Again: “Working with a new compensation adviser, he advised me that my overpayment was now $30,000 because Phoenix had generated additional payments of $15,000, which was never actually paid to me. Of that $15,000, I received $6,800. The remainder was paid to CRA for taxes. I'm told I am expected to repay the entire $15,000 and will wash out all tax at that time.”
It still goes on: “Here is my issue. Because my T4 was low, I had credits I wasn't able to use. I have two other children who qualify for the disability tax credit.” Keep in mind that the CRA has also changed their rules. That's probably going to affect her children with regard to the disability tax credit.
She continues: “When I couldn't use those credits, my husband claimed them. Now when I get a new T4 those credits aren't available for me to claim and this creates an expense for me in the form of additional taxes” that should have been her husband's. She says, “The child tax benefit has been calculated incorrectly and I'll be left with an overpayment to pay there as well. I understand that we're able to submit up to $200 relating to our prepared...”.
This nightmare story goes on for three more pages. I'm not going to continue with it. I have quite a few others that I would like to read out.
Here's one where a federal government employee spent three months fearing she would lose her home after missing a $750 payment as a result of a massive government mess-up. Unable to meet her financial requirements, she missed a payment to the Bank of Montreal. At first they said no worries: you have the government apologizing for an error. Later, the bank said, “We don't care that you're facing these hardships, we just want our money.”
On and on we go with the Phoenix problems.
This next letter goes on for four pages. It reads: “Life through the eyes of a federal employee in Canada and the failed Phoenix system”, and continues: “Would you work for a company that told you they would not pay you for the job you do? So many of us already do. Imagine that you have a job you spent years working towards, a job that requires you to work days, nights, weekends, but you do it because you enjoy it and it gives you a chance to provide for your kids. Imagine one day that your boss tells you that due to an internal issue the pay is wrong. He promises it will be fixed and tells you it isn't that bad, it isn't affecting many people, which is also what they tell the media. Months go by without answers. You realize that most of your co-workers are in similar situations. You ask your boss what's going on: we don't know, they're working on the problem. There's no set date for the foreseeable future when the pay will be fixed.”
One of my constituents came in about a pay issue. She was told that we have the levels 1, 2, and 3, and if you get your emergency pay your issue is sent to the very back of the queue. They're paying you, so “don't worry, you've got emergency pay, and we'll cover you for this time”. The second you access your emergency pay, you're sent to the very back of the queue behind 200,000 other people and your pay is again messed up the very next month.
We've all heard the stories about people who are being affected and losing their cars and losing their homes.
Here's one that was sent in: “What the F is going on?” This gentleman, Brendan, is working flat-out on a special project the federal government claims is one of its key priorities. He says, “It's just not a high enough priority for them to pay me properly.”
Here's another one. A 36-year-old policy analyst returned from paternity leave in May. His first paycheque, which he had to wait 10 weeks for, was missing two weeks' salary. A few weeks after returning from leave, he left one department and switched to another, and of course the pay did not follow him.
Here's another one. Shannon went on leave about a year ago to care for her young children. She's been on the run and in hot pursuit of her employer, the federal government, which is sending her paycheques that she's not owed. The person who prepares her tax returns, she said, suggested that “I close my bank account to stop the direct deposits”. She's been getting overpaid. If you recall from one of their earlier meetings, the government is not even able to tell who's getting overpaid and how much they're getting overpaid by. This employee has actually reached out. The government kept paying her so her accountant said to just close the bank account.
Federal employees are entitled to five years of unpaid leave to care for a preschool-aged child, a feature that's been in place for decades, but one that the Phoenix system doesn't seem to accept. Biweekly payments towards her annual salary of $70,000 as a project manager have thrown a massive wrench in her life. She can't spend the money because it doesn't belong to her, but those deposits have meant that she can no longer qualify for the child benefit. I mentioned this earlier. Again, it goes on your T4, and money received this year affects your benefits for the next year. Here's someone who's caring for her child but can't get the much ballyhooed child tax benefit because she's getting overpaid. She tried to stop the overpayments and the government won't stop paying her—a nice problem to have—but now she can't get her child benefit.
This goes on and on. You can see me flipping pages. I have more stories.
Here's one from a gentleman who worked for the Food Inspection Agency and was moved to an acting position various times and was paid. Then he was told he was overpaid—which he wasn't—so money was taken back. He was underpaid or not paid at all between February 2016 and August 2017. In consequence, he's had to borrow money from family to make mortgage payments. His credit rating has been destroyed because he maxed out credit cards and an overdraft that will take years to restore, not to mention the stress caused by having to contact the Phoenix pay system over and over without getting anything straightened out.
I don't know if you recall, but about a year ago we heard from Ms. Lemay and Ms. Foote that we were almost at a “steady state”.
A gentleman who worked for Ag Canada for 33 years and retired in May of 2016 has still not received all the money owed to him as of a couple of weeks ago. He's unable to contact the Phoenix pay centre because no one answers the calls. José had agreed to return for a 90-day period in January, February, and March, but when the Phoenix pay system failed to pay him in February, he resigned. As of October 11, he has not been paid for that period either.
In July 2015, a gentleman employed with the Canada Food Inspection Agency for 17 years lost his job because of cutbacks. His problem arose with trying to transfer his public pension, which took 18 months and caused considerable stress. In December 2016 he received a letter informing him that, due to system upgrades, excessive payments will only be paid in January 2017, which he considered not acceptable and, he said, “would create a situation where there would be a massive personal tax penalty incurred by myself if this payment is deferred until 2017.” The matter was resolved quickly after he threatened to go into the office.
Now, one of the issues is people coming in and making comments to the MPs' offices. We're following up—we have a direct line—but even now it's taking three months to get a simple response to our queries, leaving our constituents on hold. Again, that gentleman I just talked about is another situation with regard to the T4s or getting paid in the wrong year.
Another one is a student who worked for Parks Canada at Radium Hot Springs for two summers in a row. Because of delays in payment for 2016, he wasn't fully paid until May 2017. As of October 5, he's still owed almost $3,000 for his employment during the summer of 2017. The young man is responsible for payments for expenses while attending university, but is finding it difficult when he's not being paid on time. The office was called three times and he has spoken to three different officers, who claim to be sending messages for processing. However, each time the staff are told that there's no record of his previous calls—this is right from an MP's office.
I have some constituent quotes here from an MP's office: “I'm a new mother. I do not have enough money. My savings account covers six months' worth of living expenses. I'm at a loss. I'm scared to lose my home, my vehicle, and everything I've worked so hard for.”
A gentleman, Ross, said: “I'm currently at the wrong rate of pay. All of the members of my team have moved to the correct pay scale and I have not. Rather, I'm stuck at a pay scale from two years ago.”
Adam said: “I have suffered financial hardship over the past year due to the Phoenix pay system. As a young man with a family, you can assume that this money is very important to me. I called numerous times without avail, sometimes spending upwards of three hours on hold or waiting to speak someone, only to get, ‘We are working on it.’”
This is from Doug: “I have worked for the government from 1985 to 2006 in the human resources profession, ironically, and taught as a casual instructor from 2014 to 2016. As a non-active employee, my fear is that my life will remain last in priority, despite unpaid hours and incorrect pay being more than a year overdue. This is doubly problematic, since I need a proper and complete ROE in order to quality for EI.”
Nicole said: “I'm a single mother with two children in elementary school, and I'm dependent on my income for myself and my children. With not having any income, I am finding it very difficult to keep up with expenses. I'm now in a dire situation.”
At this time last year, we were getting phone calls and inquiries from people who were struggling to find money to buy Halloween candy and costumes, and, a bit later, to provide gifts for their children for Christmas.
From James: “I'm in bank overdraft having to pay for interest while I wait at least five pay periods.”
From Camilla: “An overpayment on a biweekly basis, yet a negative impact on my 2016 tax filing will have a negative impact on my 2017 filing until such a time as it's resolved.”
Sheila said: “I worked for the Department of National Defence for over 30 years and retired in July. I'm still waiting for my severance pay.” That was in July 2016.
From Mark: “I'm frustrated, as my wife is ill, and one of my only reasons I accepted a higher-paying position was to allow for her to work less. I joined the civil service to serve Canadians and take pride in what I contribute. By no means did I expect to face this continued embarrassment.”
From Krista: “After 17 years with the government, I've never felt so disregarded as what I do now.”
From Nicole: “I've been requesting an amended T4 since early February. It's very frustrating, especially since my husband's work has slowed down due to the economy in Alberta and this tax return would alleviate a lot of stress in our family.”
From Terry: “I'm extremely frustrated and wonder if there's any point in continuing my employment with the federal government, because there seems to be a lack of respect from the government in handling my concerns.”
From Shannon: “I'm still not being paid my full entitlements on my paycheque and do not have dental coverage after nine months of employment. I put my life on the line every day and I go to work as a correctional officer. This job is hard enough. I worry about how I'm going to feed my family and pay my bills on top of this. It's ridiculous.” This is from someone who works in Correctional Services in a prison. I won't go into full details on her background, but it's not a pleasant job to work inside the prison system.
Those last 15 or so that I've read to you are from one MP in Edmonton. If you think about it, there are 338 of us around the country, and these are from just one MP, in just the last six months.
Am I running out of time, Mr. Chair?
I will keep going. I have more cases here.
A constituent, after their last day of work, continually received their pay deposit for over five months. Again, it's a nice problem to have unless you're honest and you want to return the money and not get taxed. While the constituent has done everything in their power to work with the Phoenix pay system to get this issue resolved, the issue is still ongoing. It has affected their ability to file their taxes properly.
This has caused extreme stress, and it is taking countless hours of their personal time to try to properly resolve the issues. They've been instructed only that they will need to repay the gross amount even though they only received the net amount. It will balance out when they do their taxes, but in the meantime, they're being inconvenienced further by needing to repay money that they never received. You can imagine that the taxes deducted over five months would come to a significant amount. To date, the pay centre has still not provided them with the accurate amount that needs to be repaid. This is now a full year after the individual stopped working for the government.
In another case, a constituent has not had any EI premiums deducted in 2017. They are concerned that they will now need to pay the EI maximum contribution when they file their taxes in 2017. There's also a concern that this could affect insurable hours on the record of employment should they fall ill and need to take sick leave. This error was noticed by the constituent, who has spent a considerable amount of personal time in trying to get this issue resolved.
In case three, a constituent retired in January 2017. He had to wait until this week for his severance pay and an additional 400 hours of leave time that was to be paid to him. He retired in January, and this information is from just three weeks ago. He worked closely with the pay centre, but was told that he was not a hardship case so his only option was to wait in a queue to get this issue resolved. He is retired and not getting his severance payment and his pay, so I'm not sure how that is not a hardship case, but this is something that is going on every single day with our public servants.
There are others. There are several cases specifically for individuals who worked in Correctional Services Canada. They include issues with inaccurate deductions, not receiving top-up pay, being paid at the wrong pay level even though they were working at a higher pay level, and not being able to add children to the benefit plan in a timely manner, so on top of all this, they're having to pay out of pocket for dentists and pharmaceuticals.
Here's a comment from one of the staffers: “There's no system in place that allows an MP to assist with Phoenix cases that are not classified as hardship cases. So we have someone who retired and it was nine months and they still haven't received severance pay and 400 hours' leave, but that's not termed ‘hardship’. So even when they are a hardship in reality, they're not termed 'hardship'. It's a catch-22. The constituency offices cannot deal with anything and push things up the line that are not called 'hardship' by the government.”
I think it's very much like this attack on diabetes sufferers. You have diabetes but you're no longer getting the tax credit for it until you actually suffer for it, but if you suffer for it, you don't get it.
Our office has been informed that the only real option constituents have is to submit their complaint and wait till it's their turn. There are over 200,000 individual cases outstanding already. I can't imagine how long it's going to take to, quote, wait their turn.
I have another couple of cases here.
This individual says: “From April 8, 2016 to December 31, I was on parental leave. However, my ROE was not sent to EI until the end of November. I ended up receiving regular pay the whole time. In December 2016 I received EI benefits in the amount of $18,200. I sent the money back to the Receiver General per the Phoenix call centre. Please note I was informed to return ASAP so I would not be issued a T4E, which subsequently was issued. In April I received a phone call from the pay and benefits adviser stating I was overpaid approximately $50,000 by regular pay instead of EI and parental top-up and I'd have to pay the gross amount back even though I only received $40,000 net pay.”
Again, it's overpaying by x amount, reducing the taxes.... You're getting overpaid by $50,000 and you're only getting net $40,000, but the government is asking for the full $50,000 back.
The individual continues: “In addition, the pay adviser informed me that I was owed $30,000 gross in top-up pay for my parental leave for my benefits. I requested that these monies be kept by the employer because I was already owed around $50,000 and the gross amount could be applied to my overpayment. Unfortunately, the payment was already sent. I was taxed at the 50% tax bracket because of payment received in one lump sum, receiving $15,500 from that. If I return the extra monies received in 2016, why would they not reverse this pay situation?”
It again goes back to the T4s, which we were told a year and a half ago not to worry about because everything was in hand.
I want to go over one last one. I have about 40 more, but I see we're losing time and I want to leave some time for my colleagues to comment on this.
It reads: “My name is Michael. I work for the Department of National Defence at Borden, classification is PIP09C2. Phoenix no longer considers me a C2 even though that has not changed in the 34 years of service, and I'll be turning 65 on August 5. I would very much like to plan my retirement, but I'm being held hostage, so to speak, by Phoenix. When I talk to the Phoenix pension people and do a pension calculation estimate, all that is seen is the wrong information from the Phoenix pay system. When I retire from the civil service neither I nor my personal support clerk will have Internet access to Phoenix. Thank you for listening to my issues. I'd like to get this fixed and move on with my life.”
I know that I've used up a lot of time, but quite literally these are only about a third of the issues. Half of these are issues right from my office. On the one from Borden, people have reached out to me because their MPs in their areas have not been able to get Phoenix and because they've seen us on committee and have asked us to take it up.
I'm going to turn over the—