PACP Committee Report

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Appendix A: Cost Estimates

In response to a question during the hearing, Employment and Social Development Canada (ESDC) provided the following information:

The Benefits Delivery Modernization (BDM) Programme is a complex, large-scale, multi-year undertaking and the programme plan continues to be updated as scope, timing and other factors are assessed. As more information is known about the BDM Programme, costing becomes more refined.

As a pathfinder Programme in the GC, estimates can only be assessed with what is known at a point in time. This means that costs will continue to evolve as the complexity of transitioning off the current legacy systems is further assessed and informs the scope, timelines, and dependencies. Cost estimates are based on an approved methodology, including detailed analysis and calculations, considering various known factors.

In fall 2017, Treasury Board (TB) approved Programme Authority for BDM to establish processes and technology for the Department of Employment and Social Development (ESD) to provide a seamless client experience to Canadians seeking Employment Insurance, Canada Pension Plan and Old Age Security benefits regardless of the program or service they wish to access. The Rough Order of Magnitude (ROM) for BDM based on preliminary estimates was $1.75 billion.

In December of 2020, TB approved an amended Programme Authority of $2.2 billion. The revised ROM estimate accounted for previously unknown and unquantified estimates related to the complexity of unravelling hundreds of legacy applications and the migration of millions of client files; the everchanging cyber security landscape; and an overall increased effort to execute the project.

At present BDM is responding to the Auditor General’s recommendations to evolve the costing approach. Further analysis is being undertaken to ensure the costing factors in known costs, sequencing of benefit onboarding and the defined scope.

ESDC also provided cost estimate details for the initial budget of $1.75 billion and the revised budget of $2.2 billion in the following table.

Table A.1 Cost Estimate Details for the Initial Budget and the Revised Budget

Cost Type	Tranche 1 FY 1	Tranche 1 FY 2	Tranche 1 FY 3	Tranche 2 FY 4	Tranche 2 FY 5	Tranche 3 FY 6	Tranche 3 FY 7	Tranche 4 FY 8	Tranche 4 FY 9	Total
Internal Salary	14,276,608	37,942,714	23,334,822	23,171,320	23,454,816	38,985,313	39,468,335	43,320,531	43,865,129	287,819,588
Internal Salary Costs	11,082,169	22,779,528	19,008,563	17,150,167	17,360,114	26,991,937	27,326,605	24,039,917	24,342,682	190,081,682
Operating Costs	750,429	10,049,321	n/a	1,637,301	1,657,187	4,831,116	4,890,701	11,408,206	11,551,037	46,775,298
Employee Benefit Plans	2,444,010	5,113,865	4,326,259	4,383,852	4,437,515	7,162,260	7,251,029	7,872,408	7,971,410	50,962,608
Professional Services	26,790,952	69,132,368	78,398,154	90,452,227	91,566,385	94,647,158	95,827,921	81,603,739	82,639,039	711,057,943
Professional Services Fees	24,562,482	64,368,556	73,491,364	67,883,333	68,722,086	72,157,064	73,059,323	66,610,081	67,456,525	578,310,814
Operating Costs	n/a	n/a	n/a	16,234,392	16,431,568	15,967,380	16,164,316	9,426,350	9,544,368	83,768,374
Travel Expense	2,228,470	4,763,812	4,906,790	6,334,502	6,412,731	6,522,714	6,604,282	5,567,308	5,638,146	48,978,755
IT Software and Infrastructure	173,295,030	38,838,304	39,460,946	40,096,040	40,743,836	65,832,961	66,995,495	29,750,647	30,191,535	525,204,794
Operating Costs	7,783,285	15,723,777	15,884,128	16,047,686	16,214,515	16,384,681	16,558,250	16,735,291	16,915,872	138,247,485
IT Software and Infrastructure	165,511,745	23,114,527	23,576,818	24,048,354	24,529,321	49,448,280	50,437,245	13,015,356	13,275,663	386,957,309
Internal Services	2,414,133	6,041,042	4,522,560	6,194,148	6,270,094	9,175,403	9,289,261	9,691,963	9,814,008	63,412,612
Additional SSC Costs	51,692	79,705	92,067	88,993	88,993	146,730	146,730	159,399	159,399	1,013,708
Tax	26,127,878	15,516,158	15,321,683	16,971,275	17,200,329	20,862,415	21,167,044	14,476,070	14,667,975	162,310,827
Total 2017 Estimate	242,956,293	167,550,291	161,130,232	176,974,003	179,324,453	229,649,980	232,894,786	179,002,349	181,337,085	1,750,819,472
Adjusted Tranche 1 Estimate	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	450,000,000
Total 2020 Estimate	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	2,200,819,472

Source: Table provided by Employment and Social Development Canada.