Thank you very much, Madam Chair and members of the committee.
Thank you for this opportunity to discuss the main estimates and the departmental plan for Public Services and Procurement Canada. With me today is Les Linklater, our associate deputy minister, who joined us in early March; our chief financial officer, Marty Muldoon; and Lisa Campbell, our ADM responsible for our military procurement.
Let me first say that our hearts go out to the many Canadians who have been affected by the floods. As you know, our department is responsible for managing federal buildings and vital infrastructure. During the peak of the flooding, our officials closely monitored the situation to assess its impact on our bridges and on our dams.
We also worked closely with the Department of National Defence and other partners, and maintained contingency plans to assist them with any emergency requests for suppliers such as sandbags.
As you know, Public Services and Procurement Canada, or PSPC, delivers a broad range of services that are essential to the federal government's day-to-day operations, from real property management to procurement to translation.
As the government's central purchasing agent, our department strives to use its spending power to generate meaningful economic and social benefits for Canadians.
For example, it's estimated that contracts awarded to date through the national shipbuilding strategy will contribute close to $7.7 billion to Canada's GDP and create or maintain more than 7,000 jobs a year, on average, between 2012 and 2022. The strategy is spurring the economy and equipping our navy and coast guard with the ships they need to protect and serve Canadians.
Public Services and Procurement Canada is also home to the translation bureau, which supports the federal government's efforts to communicate with Canadians in both official languages. In February, announced measures to strengthen the bureau's capacity to carry out its mandate.
Two days ago, I announced the appointment of Stéphan Déry as the new chief executive officer of the translation bureau. I am confident that he will provide the leadership needed to build strategic alliances and partner with stakeholders to position the translation bureau for long-term sustainable success.
Here on Parliament Hill, our important rehabilitation work continues. The West Block, the Government Conference Centre and Phase 1 of the Visitor Welcome Centre are progressing on time and on budget and will be ready as planned in fall 2018.
I will now turn to Phoenix. I would like to begin by reminding the committee members how we got to the current situation.
In 2009 the government approved the transformation of pay administration initiative, which included two interconnected projects—the consolidation of pay services, which led to the creation of the public service pay centre in Miramichi, and the pay modernization project, which focused on replacing the government's antiquated pay technology.
Much of the attention related to pay issues was focused on Phoenix, the technology, but pay consolidation played a significant role in where we find ourselves today. In 2014 this consolidation resulted in the reduction of 700 compensation positions in 46 departments.
Phoenix was implemented in February 2016, and this committee knows all too well that we soon began seeing pay problems. Now more than a year out, many people have asked how this could have happened. Let me share some of the reasons.
First, we had a backlog of employee cases to deal with shortly after Phoenix was launched. We underestimated the learning curve associated with Phoenix. We now know that the change management and common human resources processes were not completed before the implementation.
But most importantly, we lacked capacity in terms of personnel. We did not have enough experienced, knowledgeable pay experts to help transition to the new system or to compensate for the low levels of productivity. These 700-plus compensation employees would have been a game changer had they been available to us.
Since last July we've taken a number of concrete actions to address and resolve the issues as soon as possible. In June announced the opening of satellite offices. We set up Gatineau, Montreal, Shawinigan, Winnipeg, Halifax, and Kingston with more than 200 compensation staff. We've opened a national call centre and created a feedback form for employees. We provided additional training and regularly updated employees and media through messages and briefing. We made a number of technical enhancements to facilitate and automate processing.
Finally, we worked closely with Revenue Canada to prepare the 2016 tax filing season and created a liaison unit to answer the questions related to taxes.
With these measures, we have made some progress toward stabilizing the pay system.
We have been able to reduce the original July 2016 backlog of 82,000 employee cases to approximately 5,500—4,200 of which are complex acting transactions that will be completed in the coming months.
As planned, we reached a steady state for parental leave transactions in March and for disability leave in April. Transactions received at the pay centre in both these categories are now processed within 20 days, 95% of the time.
In March, we introduced a new enhancement to automate calculations for acting payments.
Tax season was a major priority for the department. To date, we have processed approximately 49,000 amended tax slips for employees as we corrected their pay file and processed their overpayments. Employees who receive amended tax slips do not have to refile. Their taxes will be automatically adjusted.
There has been some progress but we know that we have so much more to do. Even though we regularly process pay every two weeks for 300,000 employees and we also pay about 50,000 payments in automated overtime, too many employees are still waiting too long for additional payments such as promotions and changes in their files, including transfers. We still hear stories of employees suffering through these delays.
To help we are receiving support from departments and agencies to improve our pay processing speed and accuracy. We just launched a boot camp with compensation advisory staff from departments. They will be able to process transactions within their department remotely to support the pay centre. Treasury Board is leading a review of the processes being used across the government to approve and submit pay requests. This change management work remains a key to having a well-functioning pay system.
Throughout government, there is a shared desire to serve and support employees, and we will keep taking steps to deliver the best possible pay service.
We are pleased to support and work with the recently struck ministerial working group as they take a whole-of-government approach to resolving this situation once and for all.
There is recognition that, to ensure employees are paid accurately and on time, and have the experience they deserve, a whole-of-government approach—end to end—is required. This additional oversight will ensure the effective implementation of the necessary measures to get us there.
In conclusion, allow me to spend just a moment on our main estimates to support the government in achieving its objectives.
We are estimating expenditures of $3.7 billion in 2017-18, a net increase of $824 million from the year before. This increase includes $365 million to repair and maintain federal buildings across Canada to ensure they are healthy and secure workplaces, $106 million for rehabilitation of the Parliament Buildings, $75 million to rehabilitate other major public infrastructure, and $68 million to install an environmentally friendly heating system for federal buildings in the national capital region, and other major greening projects.
It also includes $36 million for continuing the remediation of federal contaminated sites, and $22 million to provide federal organizations with the ability to accept electronic payments from Canadians. The remaining $150 million is primarily to address price and volume fluctuation on expenses associated with federal real property.
Our departmental plan reflects these main estimates and our efforts to deliver on the government's priorities.
Our employees are dedicated professionals who take their responsibilities seriously and continually strive to serve our clients better to the ultimate benefit of all Canadians.
Thank you, Madam Chair. We're happy to take the committee's questions.
Madam Chair, we are pleased to appear before your committee to discuss Shared Services Canada's 2017-2018 main estimates and departmental plan.
With me are John Glowacki, Chief Operating Officer, Alain Duplantie, Chief Financial Officer and Senior Assistant Deputy Minister for Corporate Services, and Sarah Paquet, Senior Assistant Deputy Minister of Strategy.
Shared Services is mandated to modernize the government's information technology infrastructure. Created in 2011, we deliver email, data centre, network, and workplace technology device services, as well as cyber and IT security services to the departments and agencies across the Government of Canada.
Our work supports the digital delivery of programs and services such as employment insurance, pension benefits, and emergency responses. As outlined in our departmental plan, improving the delivery of IT infrastructure services is our top priority. As a recent example, SSC played a leading role earlier this year in managing the cyber-vulnerability related to a software called Apache Struts 2, which became a worldwide problem for government and private sector systems around the beginning of March.
Canada was well positioned to respond to this threat thanks to SSC's enterprise-wide security approach. This approach provides a better view of government networks and infrastructure, and therefore the ability to take quick and coordinated action for all departments and agencies that are part or our security perimeter.
Ultimately, all systems and services for Canadians remain secure as SSC coordinated with the Treasury Board Secretariat and the Communications Security Establishment to quickly isolate vulnerable systems and ensure the protection of government and citizen data.
This fiscal year is an important one for us. With our planned 2017-18 budget of $1.7 billion, we will continue to strengthen cybersecurity and refresh legacy mission-critical IT infrastructure. We will also build on our progress towards achieving our target state. Our goal, for example, is the consolidation of what's now estimated at approximately 700 legacy data centres to seven or fewer enterprise data centres. To date, we have closed more than 90 legacy data centres and opened two enterprise data centres. Construction is under way for a third enterprise centre in Borden, Ontario.
SSC's main estimates represent an increase of almost $176 million over last year. This is mostly due to the multi-year funding provided in budget 2016, which we're investing in a number of projects to maintain and replace legacy mission-critical infrastructure, critical IT equipment, and some security investments.
SSC is using these funds to replace more than 40,000 out-of-date components, such as older servers, networks and telecommunication systems.
This includes upgrades to a number of telephone systems, including six RCMP operational control centres in British Columbia for 911 capability.
We have also replaced 3,000 BlackBerry devices for Global Affairs Canada to ensure secure and reliable mobile communications at missions abroad.
Today many of the government's infrastructure components are reaching the end of their life cycles, and some are no longer supported by vendors. Our work in maintaining legacy equipment is therefore vital to keeping the operations of the government running smoothly to ensure continuity of services to Canadians.
Shared Services Canada also secures the integrity of the network systems and information. As I discussed earlier, the security we provide is a clear advantage for the Government of Canada. It did not exist before SSC.
Our cybersecurity efforts were supported by Budget 2016 funding of $77 million over five years. Our department collaborates closely with other agencies, such as the Communications Security Establishment, in putting in place security controls.
This work includes maintaining the integrity of the IT supply chain. To date, Shared Services Canada has performed more than 17,000 supply chain assessments and will continue to incorporate security controls for all of our procurements.
On procurement, I would like to mention that budget 2017 included proposed legislative amendments to make the delivery of IT goods and services simpler, easier, and faster. The proposed changes would amend the Shared Services Canada Act and were part of the budget implementation act.
This would allow the minister responsible for Shared Services Canada to delegate the purchase of certain items, such as workplace technology devices, directly from vendors through SSC's contracting vehicles. SSC will continue to set up IT contracts and ensure economies of scale. As well, we will continue to perform the supply chain integrity assessments to ensure only trusted equipment, software, or services are used in the delivery of services.
We welcome these changes as they will provide better service to our customers while ensuring value for money in enterprise security using our procurement tools.
This coming year, we will update the Government of Canada IT infrastructure plan to modernize IT infrastructure and government-wide cyber and Internet security.
The updated IT plan will reflect lessons learned from SSC's early experience as well as the broad-based consultations we held last year with SSC employees and other federal public servants, Canadians, and industry. Overall, we received more than 2,500 submissions from stakeholders. The updated plan will also reflect the views of parliamentarians, the Auditor General, and the independent panel of experts commissioned by the Treasury Board Secretariat.
Once the plan is considered by ministers, it will be our road map for the subsequent three years. It will include timelines for moving to a simpler, smarter, and more secure government-wide platform.
We have already taken action on some of the recommendations.
For example, we have developed a service management strategy to deliver service excellence and improve the planning, costing and delivery of our services to customers and Canadians.
As part of this, we survey chief information officers every month, asking them questions on five key areas: timeliness, ease of access, positive outcome, process aspects, and engagement experience. This past March, we scored 3.2 out of 5, up from 2.71 in July 2016, and the highest we've scored to date. This is an important achievement, reflecting the heroic efforts of our employees. We must continue, because there is still a lot to do.
We are also in the process of renewing all business arrangements with our customers. These arrangements clearly identify the IT services and support we provide, as well as our service performance standards. They are a key part of our commitment to quality service delivery.
We're also increasing the agility of government IT. This includes completing a collaborative procurement process to establish standard and secure access to commercially available cloud services for unclassified data for all of our customers. Among their many benefits, cloud services will permit easier and faster access to compute and storage services. They will also allow government workers to be more innovative in how they offer services to Canadians.
Much remains to be done to modernize government IT, but we are making steady and important progress. We are also proud of the partnerships we have established with our customers and what we've achieved together.
Madam Chair, this concludes my remarks. We would be pleased to take the committee's questions.
If you'll allow me, I can give you a bit of background on this.
The project was actually two projects that were happening at the same time. Phoenix is the technology—the modernization. All departments have access to Phoenix, and the pay is paid through Phoenix.
There was a concurrent project called “consolidation of pay”. The idea was to be able to service, through compensation advisers, a number of departments together. In this project, 46 departments were originally targeted to have all their compensation advisers in one pay centre under PSPC at Miramichi. For those 46 departments there is actually a diminution of the equivalent of 700 compensation staff, from about 1,250 to 550.
The 55 other departments that are not serviced by the pay centre, but are using Phoenix, kept their compensation advisers. The consolidation was a further phase that did not take place, so they still have the same number of compensation advisers. That's important because, as you know and we know, it's a major transformation. What you're hearing from your constituents, we're hearing, and it is unacceptable.
It is a unique—and probably the most complex—transformation. There were expectations that with technology like that you would have some things that would happen in getting used to it, and you would need some transition time. The problem is that we had absolutely no resiliency in the system to be able to manage or compensate for some of these things as we were doing the transition, so if we had had those 700 people and kept them maybe another year, for example, I'm convinced that you wouldn't be hearing what you're hearing today. We would be able to service the employees, and we'd be able to process more transactions.
We would still be working through some issues as we implement the system. That would happen, and I'm not saying that all the issues the employees are facing are due to the capacity, but I think the reason you're hearing about the majority of these issues is that we're not able to process fast enough what I'll call the change orders.
Every two weeks we run the pay for 300,000 people, but on any day an employee in the public service has either an acting or a termination, they're going on leave, or they're hired. All of these change orders need a compensation adviser to work on them. That's the capacity we don't have right now. It's taking so long and it's creating a ripple effect, which is absolutely unacceptable.
Sorry, that's not my question. I have limited time. I apologize, but that's not my issue. That wasn't much of an answer. I'm sorry, but that doesn't cut it. You went from 100%, to 98%, to 97%. You tell us that you have an aggressive plan to fix these things, but your target is only 95% when just a while ago we were at 100%.
Then in your statement—and this is where the disconnect is—you say that the department will also continue to ensure that pension transactions are processed within established timelines, and then you turn around in the documents and the data says your target is only 95%. That, at best, is a 2.75% increase. That's barely inflation.
Let's move to another one in the same area, page 39. “Having finalized this multi-year project, PSPC will embrace further innovation with a view to increase program efficiency and effectiveness”. Wow.
Then we take a look at page 41, again under performance indicators, “Cost per account (GC-wide) to administer the Public Service Pension Plan (PSSA)”. In 2013-14 it was $155.12, then it went up to $165.32, then to $165.50, and now it's going to $178. Yet you just finished saying in the language that you were going to embrace all this innovation and all this increased efficiency. Where the heck is it?
Look at the next one: cost per account to administer the Royal Canadian Mounted Police. You took over the issue. The first stats we have is 2015-16 at $135.78 per. The government took it over from the RCMP, and now you're projecting it's $156.
Tell me, where's your efficiency, effectiveness, and innovation there?
I understand, but rightfully said that the problem was not due to the Phoenix software, itself, but that it, instead, had to do with the structural implementation, among other things. She was, however, the minister during half of that rollout.
Ms. Lemay, I can't get over this, but there are still people today who haven't been paid for six months, people like the Drouin family in Montreal. In your monthly updates, however, you say that these kinds of extreme cases no longer exist, that they were dealt with at least five months ago. How is it that people still have not received any pay?
In the Mauricie and Outaouais regions, 4,000 homes are currently flooded. If we assume that there are four people per household, we are talking about 16,000 people who have been affected. As for Phoenix, we are talking about 82,000 cases. Far more people are dealing with Phoenix pay issues than the flooding problems. The issues with Phoenix have sent families into crisis and caused people to lose their homes because they couldn't pay their mortgages. The situation is just as urgent and dire as the flooding in the Outaouais. contributed $1 million to the Red Cross, on behalf of the government. His response was swift. In fact, he surveyed the flood zones by helicopter last night.
It is quite clear that, from the beginning, the government never saw the Phoenix pay problems as urgent or a crisis in need of a quick resolution. How is it possible, Ms. Lemay, that, to this day, there are people who have not been paid in six months?
Thank you, Madam Chair.
It's unfortunate to be on the receiving end of such low blows. The merits of a committee member's questions are not for judging, Mr. Ayoub. Like you, I want to be part of the solution. At the end of the day, however, every government is responsible for its own actions.
I want to talk about the structure around the implementation of Phoenix. If it wasn't ready, why, then, did the minister make the decision, on February 24, 2016, to go ahead with the rollout, when she hadn't seen the reports? It is, after all, rather incredible that the minister shirked her ministerial responsibility. If 700 employees were actually laid off by the previous government—something that was never really confirmed—and if that reduction in staff caused problems with the implementation of the new system, why did the minister make the decision to go ahead?
That's the problem. The Liberal government has to answer for this, because it made the decision to go ahead with the rollout of Phoenix, not the Conservatives.
Why, then, Ms. Lemay, despite all your information, did the minister give the green light on February 24, 2016?