EVIDENCE

Standing Committee on Government Operations and Estimates NUMBER 024 1st SESSION 42nd PARLIAMENT Thursday, July 28, 2016 Le jeudi 28 juillet 2016 Standing Committee on Government Operations and Estimates CANADA [Recorded by Electronic Apparatus] EVIDENCE July 28, 2016 Committee Edited Evidence * Table of Contents * Number 024 (Official Version) Official Report * Table of Contents * Number 024 (Official Version) Témoignages * Table des matières * Numéro 024 (Version officielle) 24 28 07 2016 2016/07/28 14:00:00 House of Commons Comité permanent des opérations gouvernementales et des prévisions budgétaires Standing Committee on Government Operations and Estimates OGGO Chair Mr.

Tom Lukiwski 42 1

(1400) [ English ]

The Chair (Mr. Tom Lukiwski (Moose Jaw—Lake Centre—Lanigan, CPC)) :

I call the meeting to order. It's 2 p.m., and I believe we have everyone from the committee here. Mr. McCauley, excuse me, if I could just make some opening remarks first, I'll get back to you, if that's all right, and then to Madam Ratansi. First, welcome to everyone. I'm glad to see you back here. It's good to see you. I was hoping we wouldn't see each other until September, but obviously this is a very important day for us. I want to remind all members that this is a special meeting, requested through Standing Order 106(4), and that it is also televised.

I would like to spend a couple of moments going over some procedural aspects of the meeting and how it will be conducted, and then we'll get into the meeting itself. Unlike our regular committee meetings, which are structured for two hours and only two hours, this special meeting has no predetermined adjournment time. Therefore, we will be sitting for as long as members around this table have questions or comments to make. We will adjourn only when all members have exhausted all of their questions, comments, or observations.

Our first order of business is that we need to agree as a committee that we wish to examine the Phoenix pay system. That was included in the letter of request under Standing Order 106(4). We have to agree at this table that we want to go forward and examine the Phoenix pay system. Then, and only then, will this meeting continue. We all know that Mr. Weir, for example, has a motion on notice that discusses potential witnesses. I suspect, although I do not know, that there will be other motions from the floor.

You can make a motion from the floor—that is admissible—if there are motions pertaining to witnesses to come forward. We have a number of officials in the gallery today. For the benefit of committee members, and perhaps for the members of the media who are in attendance, I want to let you know who will be in the gallery and will be available, if requested, to come forward to speak to this committee.

We have Donna Lackie, the national president of the Government Services Union; Marie Lemay, deputy minister, Public Services and Procurement; Rosanna Di Paola, associate assistant deputy minister of accounting, banking, and compensation; Gavin Liddy, associate deputy minister; and also Debi Daviau, president of the Professional Institute of the Public Service of Canada. These officials are in the audience. If any of them are requested to come forward, they will be available if the committee so agrees. Ladies and gentlemen, if a motion is presented, debate will begin on that motion.

The normal rules of procedure will take place, that is to say that there is no time limit for debates, and speakers can speak more than once. However, as chair, I would encourage you to please make your comments as succinct as possible. The longer we are debating motions, the longer it will take to potentially have witnesses before us. In the cases of motions that are requesting certain witnesses to appear, I think the witnesses will probably be fairly self-apparent as to why they are being asked to appear.

I don't believe we need to spend an awful lot of time on debate, but that is strictly up to the members around this committee. Also, I would strongly encourage members to try to avoid the blame game if possible, and I say this with all sincerity. We're all partisan animals around here. We can all go out and do our partisan hits with the media, but the reality is that this is a very serious problem. The aggrieved parties are the employees of the federal government. I think it serves no useful purpose for members of this committee to start blaming one another as to who did what and when did they do it.

I hope that we are of one mind. The purpose of this meeting is to certainly determine what went wrong, but more importantly the remedies to fix the problems. If we can focus on that, then hopefully we can all be part of the solution. Finally, ladies and gentlemen, on a separate matter, after we conclude the special meeting, I would ask concurrence of the members around this table for an in camera five-minute meeting so our clerk can update us on future committee business. That concludes my opening remarks. Mr. McCauley, and Mr. Weir, you're on the list of speakers. I had recognized you first.

(1405) Mr. Kelly McCauley (Edmonton West, CPC) :

Thank you, Mr. Chair. I appreciate your comments. I'd like to put forward a motion:

That the Minister of Public Services and Procurement Canada appear before the Standing Committee on Government Operations and Estimates no later than Friday, August 5, 2016, on the issue of the government's failure to adequately implement the Phoenix payroll system; and that the meeting be televised.

The Chair :

That concludes your motion?

Mr. Kelly McCauley :

Yes.

The Chair :

The motion is now up for debate. I will assemble a speakers list. Mr. McCauley, you made the motion, so I'll ask you to speak to it, if you could, briefly, please.

Mr. Kelly McCauley :

Very briefly, the Minister of Public Services and Procurement is responsible for the Phoenix pay system. It is her department that is responsible for rolling out and looking after it. I think it's imperative that we have her here to discuss it with us, explain her plans on fixing the system, and how we're going to go forward with that.

The Chair :

Thank you, Mr. McCauley. Madam Ratansi.

Ms. Yasmin Ratansi (Don Valley East, Lib.) :

Thank you, Mr. Chair. Mr. McCauley's motion is not unreasonable, but we have to be mindful that we have the deputy minister here today. In our motion in the July 25 letter that we sent, we asked the deputy minister to come. We need to hear first from the deputy minister as to what solutions have been.... We know the problems. Plenty of people have not been paid. We can hear from the people who are working, the bureaucrats who are working, and then we can hear from the minister later on, in September, because we need to figure out, as a committee, the time frame. We have other issues we are working on.

We need to work with the deputy minister first, figure out what it is, and then as a committee come up with a solid plan. I do not dispute that the minister has to come, but the minister coming will give the same answers as the deputy minister, will not help our case. I think it is important that if we want to solve this problem and not play political games, then we should get to listen to the deputy minister and then move forward. Thank you.

The Chair :

Madam Ratansi, before I go to Mr. Weir, you mentioned the motion that you had contained in your letter. As I'm sure you're aware, the motion will have to be presented today.

Ms. Yasmin Ratansi :

Do you wish me to present the motion now?

The Chair :

No, we're dealing with Mr. McCauley's motion. But before we can deal with what you would like to see, we would have to have that motion presented.

Ms. Yasmin Ratansi :

Fair enough.

The Chair :

Mr. Weir.

Mr. Erin Weir (Regina—Lewvan, NDP) :

I would speak in favour of the motion. I think it's self-evident that we need to hear from the minister on the Phoenix pay system. I would note that the reason we're here today is that we recognize that this is an urgent crisis. I would disagree with Madam Ratansi that it would be reasonable to wait until September to hear from the minister. In fact, Mr. Chair, I would note that the minister is in Ottawa today. I wonder if we might be able to ask her to testify to our committee this afternoon. I think if you were to canvass my Conservative colleagues, they would agree that if it's possible, it would be quite desirable.

The Chair :

Mr. Weir, in response to your request, we're dealing with Mr. McCauley's motion, which I believe has a deadline of August 5. That is the motion we are debating and will ultimately vote upon. It is out of order to actually ask the minister to appear this afternoon. We'll deal with the motion as it was read. Madam Ratansi.

Ms. Yasmin Ratansi :

Just as a procedural matter, does the motion that I presented for July 25 come before Mr. McCauley's motion? I just want to clerk to clarify it.

The Chair :

I'll speak to that and ask the clerk to verify. My understanding procedurally is that the motions at this meeting will be in the order that you were recognized by the chair. Mr. McCauley had his hand up first. I recognized him. If there are no more comments, we will vote on his motion. You are the next individual, Madam Ratansi, whom I recognized. If you have a motion at that time, you can present it. We will proceed from there. Are there further comments or questions on Mr. McCauley's motion? Seeing none, I will call the question. (Motion negatived)

The Chair: Madam Ratansi, you now have the floor.

Ms. Yasmin Ratansi :

In my letter to you, signed by four of the committee members, we asked that the committee hold a briefing with the Deputy Minister of Public Services and Procurement Canada on the issues surrounding the Phoenix payroll system. The motion is as follows:

That the committee hold a briefing with the Deputy Minister of Public Services and Procurement Canada, on the issues surrounding the Phoenix payroll system.

(1410) The Chair :

That is the motion. You certainly can to speak to it, if you want to elaborate.

Ms. Yasmin Ratansi :

Well, I think we have a system that has its challenges. The deputy minister has been giving a weekly brief on what is happening with the system. Since the deputy minister and her assistants are very engaged with the system, they would be the right people to be able to give us an update on the resolution to the problems—whether things are moving the way they are, what resources they need, etc.—so they will be the right people to have as our witnesses.

The Chair :

Are there comments? Mr. Weir.

Mr. Erin Weir :

Mr. Chair, I think all members of this committee would certainly be keen to have an opportunity to ask questions and a discussion with the deputy minister, but I also think the reason we've convened this meeting is to hear from a broader range of voices. As the chair mentioned at the outset, in addition to the deputy minister, there are other officials present. There are the presidents of the two largest federal public service unions in the room prepared to testify. So I would think that all members of the committee would want to hear from these witnesses and I would propose what I hope is a friendly amendment to include all of those witnesses named by the chair in this motion.

The Chair :

We are now debating the amendment. Madame Ratansi.

Ms. Yasmin Ratansi :

Mr. Chair, I'm happy with the amendment and I'd be happy to entertain the amendment, and if we could combine the two, that would be fine with me.

The Chair :

All right. Mr. McCauley.

Mr. Kelly McCauley :

Ms. Ratansi took the words out of my mouth.

The Chair :

Thank you. Now, procedurally, unless there are further comments, we will vote on the amendment. Mr. Weir, I'll try to summarize. If I'm off base here, please correct me. The amendment is to include in addition to the deputy minister of Public Services and Procurement all the public officials whom I had identified in my opening remarks, including the leaders of the two public service unions as well as two associate deputy ministers.

Ms. Yasmin Ratansi :

You've given an amendment. I am fine with it, but in terms of managing the way in which we are going to call the witnesses forward, I'd appreciate it if we could go with the deputy minister first and then we can go with the public service unions and other members who are there. That would be fine by us.

The Chair :

Mr. Weir.

Mr. Erin Weir :

Just to clarify, is the proposal to have an hour with the deputy minister and her officials, and then an hour with representatives of the two federal public service unions?

Ms. Yasmin Ratansi :

I think that would be ideal.

The Chair :

If I can interject again, if you don't mind, since we have no pre-determined adjournment, it would be an hour. It could be less, it could be more. It depends on how many questions come from this committee. So when witnesses approach the table—and I'll have to deal with that in a moment, how we get them here—you can ask questions until the sun goes down. They are not here restricted to one hour. They're not here for a full hour. It all depends on the committee members and their questions.

Are we in agreement then that if the amendment passes, we will request the deputy minister plus the associate and assistant deputy ministers to approach the table? We will need agreement from this entire committee for that, if the motion passes, followed by the two leaders of the public service unions. Are we all clear on that? Then on the amendment, all in favour? All opposed? (Amendment agreed to [See Minutes of Proceedings ])

The Chair: The main motion, all in favour? (Motion as amended agreed to [See Minutes of Proceedings ])

The Chair: Now we will deal with this immediately, but we will need agreement. Even though the motion has passed, we have not actually made a formal request for those officials to come forward. Madam Ratansi, committee members, will you all agree to my calling the senior officials from the public service forward?

Some hon. members: Agreed.

The Chair: We then ask Madame Lemay, Madame Di Paola, and Mr. Liddy to approach the table. Thank you all for being here. Madame Lemay, I understand you have some opening remarks. Please proceed, and if you wouldn't mind, even though I've called you all forward, please introduce your colleagues for the benefit of the committee.

(1415) Ms. Marie Lemay (Deputy Minister, Department of Public Works and Government Services) :

Thank you very much. Good afternoon. I appreciate the opportunity to appear before this committee to discuss the Government of Canada's new pay system, Phoenix, and our plan to address some of the issues that we're facing. I can certainly appreciate your interest in understanding the challenges that we're facing. Accompanying me today are associate deputy minister Gavin Liddy; and Ms. Rosanna Di Paola, the associate assistant deputy minister for accounting, banking, and compensation.

I'll begin with a little background on the Phoenix system and we'll then provide you with an overview of the challenges we faced, and where we are today, before discussing our plan to resolve these issues, if that's okay with you. Before going further, I want to emphasize that it is unacceptable for any Government of Canada employee to go unpaid or to be incorrectly paid for the work performed. Employees are coming to work every day, they're putting in the hours required of them and sometimes more, delivering the services that Canadians require, and they're keeping our country safe and secure.

In exchange, they're owed timely compensation to pay their mortgages, to feed their families, and we definitely understand that. [ Translation ] Now I'd like to provide a bit of context for the serious need underlying the Government of Canada's decision to adopt a new pay system and the challenges associated with such a complex undertaking.

Public Services and Procurement Canada is responsible for administering the pay of more than 290,000 federal employees, in other words, everyone working in the more than 100 departments, agencies and organizations that make up the federal public service, in addition to MPs, senators, and their staff. Administering pay for the Government of Canada is complex, given that some 27 collective agreements setting out more than 80,000 pay rules had to be programmed into the system. A number of years ago, it became very clear that the federal government's pay system had become inefficient and was at risk of failing.

The regional pay system, as it was called, was more than 40 years old. Over 1,000 workarounds and temporary patches had been deployed over the years. It had become increasingly difficult to maintain, and it relied on outdated technology that put the sustainability of the administration of pay at risk. At the same time, the pool of specialized employees with knowledge of the outdated technology was fast disappearing. A major outage would have put pay service operations at risk for weeks, even months.

In fact, a major system failure in 2003 affected the pay of 4,000 public servants. [ English ] The Government of Canada initiated plans for transforming the administration of pay services through two related projects. The first project was to replace the outdated pay system through the purchase of a new off-the-shelf commercial system that would be integrated with government human resources applications. As part of the procurement process, the government acquired the PeopleSoft-based system, a reputable and well known payroll software.

Working with the vendor, IBM, the department configured it and called it Phoenix. The other project was to consolidate front line pay services administration from across government to a new public service pay centre in Miramichi, New Brunswick. The Miramichi pay centre was staffed with 550 employees, who were hired in three waves, the last of which was completed in December 2014. A report by the government operations committee in 2008 recommended support for pay modernization and for potentially redistributing activities to the regions.

The goal was, and remains, to attain a modern, responsive, and flexible pay system that is also cost-effective and sustainable. [ Translation ] Deployment of the Phoenix pay system required six years of preparation by our and other departments, as well as IBM, the supplier responsible for Phoenix's design and implementation. More than 16,000 different pay scenarios were tested to make sure the software ran smoothly. At IBM's recommendation, the original deployment

schedule was delayed to allow for further testing and ensure due diligence. The scheduled October 2015 rollout was pushed back to February 2016, and the December 2015 rollout was postponed to April 2016. In December, positive test results and a third-party review confirmed the decision to go ahead with system implementation. In addition, in January, consultations with deputy ministers from all the departments involved resulted in support for system deployment. Therefore, on February 24 of this year, Phoenix was rolled out for 120,000 employees across 34 departments.

On March 9, the first batch of Phoenix-issued paycheques were generated. On April 21, another 67 departments were integrated as part of the second rollout, representing a total of nearly 170,000 public servants. (1420) [ English ] When Phoenix went live in February, the pay centre had a backlog of 20,000 employee cases that should have been cleared prior to implementation but weren't completed on time. This was exacerbated by backlogs in departments. For example, after going live with Phoenix we received 20,000 employee extra-duty pay requests.

As well, there was a steep learning curve associated with the new system within departments and the pay centre. Therefore, despite the significant planning and preparation, we have faced critical problems affecting a considerable number of employees who have experienced a pay issue of one kind or another. I'll give you a sense of the different categories that we're addressing in priority sequence, the numbers associated with each, and our plan to address the situation. [ Translation ] Our top priority is employees who are not being paid. As I already mentioned, that is completely unacceptable.

Those affected are mainly new hires, students, and employees who are returning to work after being on unpaid leave and whose pay has not been restored. At our technical briefing last week, I indicated that 720 employees had reported not receiving any pay. We committed to making sure 486 of them received a payment on the next payday, so July 27. I can tell you that all of those employees received their pay yesterday. We expect 139 of the remaining employees to be paid on August 10, since we now have the information we need to proceed.

We are still waiting for information on 35 employees, and after a thorough check, we determined that 60 individuals did not appear in our system. Since last week, another 589 employees have reported problems tied to missing pay. We are addressing 210 of those cases, with the objective of paying them on August 10. Like last week, we are working with departments to resolve cases where we are lacking employee information. [ English ] The second priority is employees whose pay may be affected by their going on leave or exiting the public service.

Last week I reported that about 1,100 employees had brought these issues to our attention. Since July 18, we've addressed 74 cases, and we're processing the remainder as quickly as possible. Employees reporting these types of issues can expect to have their case addressed within six weeks. The third priority is those who are receiving regular pay, but missing supplementary pay, such as acting or extra duty pay and salary increment adjustments. This group consists of about 80,000 employees.

Without diminishing the importance of this, these are employees who are receiving their regular paycheque, but are missing amounts. Since July 18, approximately 1,100 employee cases out of the 80,000 backlog have been resolved, and those employees will see the adjustments on their August 10 paycheques if they haven't already seen them. [ Translation ] We are not finished, but we are making progress. We are also taking steps to make sure all cases are processed. First, we have hired more people and are creating temporary pay offices all over the country.

We increased the number of staff at the pay centre in Miramichi, adding 40 employees at the beginning of the year. We are currently taking steps to manage the workload of employees at the centre, who have been dealing with excessive workloads in recent months. Yesterday, Minister Foote and I had the opportunity to meet with employees at the Miramichi pay centre. We thanked them for their hard work and repeated the message that they were not to blame for this situation. We created a temporary pay unit in Gatineau with 57 employees so far. We expect that number to rise to 115 in the coming weeks.

I want to say how grateful we are for the support of our union partners, who are helping us find ways to encourage employees and rehire former compensation advisers on a temporary basis. We are also creating temporary regional hubs in Winnipeg, Montreal, and Shawinigan. The Winnipeg office, which has 20 compensation advisers, will start processing cases in mid-August, and we expect the number of staff to rise to 50. The hubs in Montreal and Shawinigan should be up and running in the coming weeks, with 20 compensation advisers at each location. In addition, we have set up a national call centre in Toronto.

This is not a compensation centre but, rather, a call centre. Yesterday, the centre received 2,500 calls. None were dropped, and the average wait time was under four minutes. Callers with missing pay issues are referred to the pay centre using an electronic form that the call centre agent fills out. (1425) [ English ] Secondly, we are ensuring that there's flexibility in the system to address the very real financial needs of every affected employee. We've encouraged managers to take advantage of the existing processes through which they can issue emergency payments to employees.

The Treasury Board Secretariat is exploring options to reimburse employees for the out-of-pocket expenses they have incurred as a result of inaccurate or missing pay. We have encouraged employees to report their pay problems as quickly as possible through our website and to speak to their manager if they have a pay problem, to discuss the next steps and the resources available to them. [ Translation ] Thirdly, additional resources are being developed to ensure all Phoenix users fully understand the roles they play to keep pay requests moving quickly and accurately.

This issue is at the heart of the problems we’ve faced. While we provided training to employees and met with every department on a weekly basis prior to implementation, it’s clear that we under-estimated the amount of time it would take for all users to be become trained and familiar with the system. This has created extra stress for the employees at the Public Service Pay Centre. Enhanced tools and additional training are being developed and will be offered to both employees and managers in our department and other departments.

The first set of tools will include job aids, tutorials and webcasted events and will be made broadly available across the public service in the coming weeks. In addition, our department and the Canada School of Public Service are working together to develop additional mandatory training to help employees and managers. We will also be developing a tool kit for managers with reference materials such as checklists and tips for helping employees who are having pay issues. [ English ] We've already completed enhancements that are speeding up transactions.

For example, the pay system now recognizes automatically adjust level for acting to ensure compensation is paid at a correct rate. Fourth and most importantly, we're working on the system itself. We continue to make adjustments and move forward with plans offering enhancements that are increasing automation and shortening timelines. We've started sending managers emails notifying them that they need to approve a transaction in the system. We expect this will have a substantial impact.

While I can tell you that these actions are proving effective, they do not for one minute negate the fact that every employee deserves to be paid for the hours they put in. Anything else is unacceptable. Last week I reported that two privacy breaches related to the Phoenix pay system have been fixed. On July 26, I was made aware of a further privacy breach allowing four employees to access names and identification numbers of employees from other departments. We have informed the Office of the Privacy Commissioner.

Our special investigation unit has assessed and reported that these breaches are deemed very low risk. I have instructed my department to conduct additional testing to identify additional potential vulnerabilities. The road to pay transformation has not been smooth, but we are committed to learning from this process. We are committed to independent assessments that would provide valuable insight into the planning and implementation of major projects and that would benefit our department and other government organizations.

Minister Foote has asked the Auditor General of Canada to review the implementation of the Phoenix system. If there is an audit, we will, of course, fully support the Auditor General and his staff in their work. [ Translation ] In closing, I want to acknowledge the hard work of the Phoenix project team and the employees at the Public Service Pay Centre. I also want to thank the other departments for their support. I look forward to helping the committee with its work.

I want to reiterate to the committee members that we are in the process of fixing the problems and that getting employees paid remains our most urgent priority. [ English ] I was asked yesterday by someone, “Did employees get paid today?” The answer to that question is that over 294,000 got paid their regular pay yesterday and, in addition, close to 35,000 of other types of payments, such as extra-duty pay, were received.

(1430) Thank you. I look forward to your questions. My colleagues and I are here to answer any questions you may have.

The Chair :

Thank you, Madame Lemay. For the benefit of the committee, even though this is a special meeting, I'm going to recommend to the committee that we follow the normal rotation of slots that we have in our regular committee meetings. As a refresher, that means the first round will be seven minutes for questions and answers. That will include two Liberal speakers, one Conservative, and one New Democrat. The second round will be four speakers for five minutes, with two Conservatives and two Liberals. The third round will be one three-minute intervention by Mr. Weir.

We will then go back to the start with seven, five, and three, and continue questioning until all questions have been posed and answered. With that we will start our seven-minute round with Madam Ratansi.

Ms. Yasmin Ratansi :

Thank you, Chair, and thank you, Madame Lemay and your colleagues, for being here. We're all here today because, as you mentioned, it is unacceptable that a single person who has worked and put in the hours is not paid. My colleagues and I have seen or heard from lots of our constituents constantly that these people have not received their pay. There is dire hardship and we would like to resolve the problems. We don't want to put blinkers on. We're not in the habit of putting blinkers on, so we would like to resolve the issue.

You have just made a presentation that you ran in parallel 16,000 test cases before you made the system go live. Is that correct? Yes. Was there a parallel system running and, if there was, were there kinks in the system brought to your knowledge?

Ms. Marie Lemay :

I'm sorry, I just want to make sure that I understood the question. You're wondering if we saw some of the challenges before launching the system.

Ms. Yasmin Ratansi :

Yes. Did you run a parallel system while you were doing...?

Ms. Marie Lemay :

We did.

Ms. Yasmin Ratansi :

Okay. When you were testing the system, were there issues you encountered that brought some concerns to you?

Ms. Marie Lemay :

There were, and that's why the actual launch was delayed. There was a third-party evaluation. The whole launch was delayed until everybody felt that...first of all, the vendor, the departments.... We had a third-party evaluation. There was a state of readiness that was established to be a good state to move forward with the launch.

Ms. Yasmin Ratansi :

Was the problem with Phoenix a technical problem or a human resources problem? What was it? Was it a combination of both? Because these problems, whether it's 750 people not getting paid or one person not getting paid, are really unacceptable. People have faced a lot of hardships, as you know. What was the reason there were issues? Were there technical problems with the system?

Ms. Marie Lemay :

To me, when we talk about the system, it is from the moment somebody works until that person get a paycheque in his or her bank account. There are many parts in this system. There is obviously the user, who has to put information in, and managers, who have to approve. There is the software that is in-between, and there is the pay centre, where compensation advisers have to work. So there are different elements in that system.

We knew, and I think it was a recognized fact, that when you launch a system and a transformation of the magnitude of this one—remember that we're talking about close to 300,000 employees and over 100 departments.... Remember the rule we talked about, the 80,000. This is a massive undertaking. There was a recognition that there were things that you would not know until you actually turned the system and that there would be a learning curve for people in getting used to the system. In my assessment, when you look back, I would say there were two things we did not see coming.

The first thing was that we did not expect to have a backlog when we transferred. So at the end, before the transfer to Phoenix, a number of transactions were there, at the very end, as we were about to change to Phoenix. There were about 20,000 transactions that arrived at the tail end that we didn't have time to process. So we started with a backlog. On top of that, about 20,000 extra-duty pay transactions were transferred to us, once the system was launched, that were actually pre-Phoenix. So we started with a backlog of 40,000 transactions right there. That part we had not evaluated properly.

The other thing we underestimated, I believe, was the time and effort we would need to make sure that the users understood the new system, because it's a different system in terms of use. I'll give you a short example: overtime. It used to be that you would fill out your form for overtime, and then it would take eight to 12 weeks to get paid, because it was paper and it would go through the system. Today if you work overtime, you enter it, your manager approves it, and it's paid on the next paycheque. If you enter your overtime.... Maybe overtime is not a good example. I'll give you the example of acting pay.

Acting pay is the same thing. If you enter the acting pay when a person is acting in a position, it will be done automatically. But if you decide to wait, and a month or three months later, you say, “Oh, I have to make sure that this person gets the acting pay”, and it is then processed, it becomes a manual transaction. It's not automated, because it's outside the current system. It's a system that is made to be used live. There are a lot of things I think we underestimated that we needed to make sure employees understood: how to use the system, what to do. That's what we're working on very hard.

(1435) Ms. Yasmin Ratansi :

Going forward, with the solutions you have shown us, or the actions you have taken, are you satisfied that this system will go forward without a glitch or that people will be paid and we won't hear any more complaints about it? You say there are 234 people who have still not been paid. They'll be paid August 10. Is that acceptable?

Ms. Marie Lemay :

I would say in response that we expect there to be a transition period. There is a transition period where we will face issues that we have to correct, whether it's how we program the system, make adjustments to some of the rules, whether it's making sure people understand how it's used, making sure that managers understand that they need to do some of the paperwork, whether it's onboarding or others right away. These things will keep happening for a bit as we are transitioning. There is a learning curve.

To say to you that we're done and we're not going to have any more issues...we fully expect that we will keep seeing some issues. The key thing is that we now understand where the backlog is and the composition of how we got here. But more importantly, we have a process for people who do not get paid. If somebody doesn't get paid, we absolutely need to know about it because if we don't know, we can't address it. If we know, we're able to go to the root cause and find out why they're not getting paid. So far, we've been able to address many of them. If we find another reason we will address it.

It's really important for employees to tell us when they have pay issues so that we can adjust the system. The good news is that because we have the temporary centres—and we have, as I've told you, several of those now—we can deal with the backlog that was created and monitor how we're doing at the Miramichi pay centre, where there is still a learning curve. Indeed, it's a new system there too. They're doing much better in terms of the system. Yesterday, employees were saying that it's been a huge difference from day one to now in terms of their use of the system. We'll monitor that very closely.

We will keep the temporary units until we've reached a steady state. We have them for the transition period. Once we've reached a steady state, and Miramichi is processing and the system is functioning how it should, then we'll be in a position to remove them.

The Chair :

For the benefit of the committee members, just because of the subject material here, I'm going to give a little latitude on the length of questions and answers. That was a fair bit over seven minutes, but, again, I think it's important that everyone gets a full understanding of what's going on within Phoenix. We'll turn now to Mr. McCauley for seven minutes, please.

(1440) Mr. Kelly McCauley :

Ms. Lemay, it's known that executives of the public service are eligible to receive performance bonuses. Have any current or former executives from the Department of Public Works received bonuses in 2015?

Ms. Marie Lemay :

In 2015, I would have to look. I'm sorry, I wasn't there in 2015. In 2016 I can tell you, no.

Mr. Kelly McCauley :

Well, the year is not over yet, so....

Ms. Marie Lemay :

Sorry, you mean for the year 2015? Absolutely, I can answer your question. I apologize. No, nobody has, and it's not a priority. We're really focused on getting people paid. That's what we're focused on. That will be the last priority for us.

Mr. Kelly McCauley :

So no ADMs or DMs, etc., received bonuses?

Ms. Marie Lemay: No.

Mr. Kelly McCauley: Perfect. The media obviously has been reporting very widely—we see them here today—on the personal stories of civil servants not being paid. A pregnant mother had to quit her job because she couldn't pay for her daughter's day care, etc. There are thousands of stories. This mismanagement by big government has real life, day-to-day consequences. I have a very simple and blunt question. Who is taking responsibility for this personally, and in the real world who is going to get fired for this?

Ms. Marie Lemay :

The answer to your question is that right now we're taking it collectively, because we're absolutely focused on fixing it. We are spending very long days—a number of us—in making sure that we get people paid. After that we're committed to doing an evaluation, we're committed to looking at lessons learned. There's going to be the Auditor General, there are going to be a number of processes, and we will be able to answer your question at that point more substantially. At this point our efforts are solely focused on getting people paid.

Mr. Kelly McCauley :

I'll ask at another committee meeting then. We've heard before that it was ultimately Minister Foote's decision to implement the Phoenix pay system. Ministers do receive technical advice from civil servants obviously. What was your advice to the minister on going live with Phoenix?

Ms. Marie Lemay :

I was not in the position personally, but I can tell you that Minister Foote did receive the advice to roll out Phoenix for the February launch.

Mr. Kelly McCauley :

Okay, and the next launch after that, the two?

Ms. Marie Lemay :

Oh yes, I was there, and the advice was to do the second phase.

Mr. Kelly McCauley :

Was that from you?

Ms. Marie Lemay :

I'm trying to remember if it was prior to when I arrived. When I arrived, actually, the data had already been converted, because the 21st—

Mr. Kelly McCauley :

There were two portions. There was the February and the April...and we heard in committee from the President of the Treasury Board that unless we're 99% sure it's working, we're not going to go ahead. Which of the civil servants—and I assume it was you—advised Minister Foote that “We're ready, let's go”?

Ms. Marie Lemay :

I understand your question, but I want to clarify one thing. The date of the 21st is the date when the system was on, but the data conversion started way before that. The data conversion actually started at the beginning of April. But with the information that we had in April, I would have recommended to her to go to the second phase. I actually had conversations with the unions about this. We were at a stage where we had implemented the first wave. The number of complaints we were getting—and we were monitoring this—was actually very low.

I remember that even in May, when we were at this committee, I believe Minister Foote talked about the number of complaints we were getting. I think at the time we had only 77 that were unresolved, so that is what we were seeing at the time. As I said earlier, we expected to see see some and that we'd be able to address them. If I had been asked to make an official recommendation to her, I would have said, yes, the same way, but I did talk to the unions about our moving in that direction. Yes, I was really supportive of it.

Mr. Kelly McCauley :

Okay. Did you flag with the minister the possibilities of things like this occurring: “Here's a risk, do we go forward?” Or was it an unequivocal “Let's go”?

Ms. Marie Lemay :

Maybe I should turn to my colleague who was there during that whole transition step, because, unfortunately, as I said, I only came in at the tail end of that portion of it.

Mr. Kelly McCauley :

I realize that, but I would expect someone in your position would have done the look-back and asked people before.

Ms. Marie Lemay :

The reality is that we all expected there to be some transition period. Whether it was me, or the private sector, I think everybody expected that this would not happen without a single.... There was a transition planned, so yes, the recommendation to the minister was clearly, “Go ahead”. That's the advice she got from officials, clearly.

(1445) Mr. Kelly McCauley :

Okay. You mentioned that you had discussions with the union, but we've heard from them that they were advising as early as January not to proceed, but you're saying their advice to you was to proceed.

Ms. Marie Lemay :

No. What I'm saying—

Mr. Kelly McCauley :

Did I mishear?

Ms. Marie Lemay :

Sorry, I may have misspoken. I joined on April 11, and I believe I met with our representative, Ms. Lackie, probably on the Wednesday of my first week, and we had conversations about Miramichi at the time and the folks there. The meeting I had with the heads of the union was on April 25. Prior to that they had already started raising their request to not go to phase two. At that time, once you'd launched the first wave, I think it would have been really difficult not to go to the second wave. You're managing two systems.

People are working with two different systems, trying to understand and learn one while they're dealing with the other one. There's crossover from departments that are on the old system to a new system. It was really felt, and I think if you validate with industry they would say that with a move like that, you're better to move all the pieces—

Mr. Kelly McCauley :

I have a couple of quick questions because I'm running out of time.

Ms. Marie Lemay :

Sorry.

Mr. Kelly McCauley :

I think I know the answer. Looking back, would you have advised, “Let's run with the two systems for a bit longer”? Did you or anyone else in your department, the ADMs, suggest that maybe you should run a bit longer with them both to smooth out everything before proceeding fully?

Ms. Marie Lemay :

I think I would have made another type of recommendation. I think I would have looked at making sure that the employees and all the departments really understood the magnitude of the change in terms of the change management associated with that. I would have made sure that we did have additional compensation advisers, just in case we were going to transition. But I would have said that it was necessary to move to the second phase.

The Chair :

Thank you. Mr. Weir, for seven minutes, please.

Mr. Erin Weir :

I think what we've heard so far really underscores the need for this committee to hear directly from the minister . I would note again that she is in Ottawa today, so it's quite unfortunate that she has not made herself available for this meeting. I would like to start where your statement concluded, by mentioning that a large number of federal employees have been paid correctly. To me, that's a little bit like saying that two out of three isn't bad. But I really don't think that is very much consolation to the third of the federal employees who have not been paid correctly.

Deputy Minister Lemay, you've suggested that based on what was known at the time, the decision to implement Phoenix was defensible. I would ask, knowing what you know now, do you still think it was the right decision?

Ms. Marie Lemay :

I will answer in the same way I just did. I think we could have taken additional measures, but the move to the second wave and the move to Phoenix is the right decision. But I would have done it a little differently, and I would have taken additional measures knowing what I know today.

Mr. Erin Weir :

Okay. I think you said that the implementation of phase two was somehow inevitable or sensible based on phase one already being in place. Do you regret, though, the implementation of phase one? Do you think Phoenix was the right way to go from the beginning?

Ms. Marie Lemay :

Phase one had a lot of planning and a lot of testing, and as I said in my presentation—and maybe we can expand I on this if you wish—there were a number of steps taken before launching it. There was testing. The launch was actually delayed. It was originally planned in three, got moved to two, it was delayed, and there was a third-party assessment. And again, I remember even the Secretary of the Treasury Board checking with all departments as to the readiness of everyone for the change to Phoenix. At the time, it was definitely felt that we were ready, as ready as we could be.

In terms of the system and the data, again, I think that the change management portion is something we underestimated, and maybe having a few additional people to help us to the transition would have been better.

Mr. Erin Weir :

You've also said that you can't address what you don't know, and you referenced the fact that when the minister was in this very chair on May 17, and I asked her about Phoenix, she indicated that there were only 77 unresolved cases. We now know that there are 80,000 federal employees who have not been paid correctly. I'm wondering how the number went from less than 80 to 80,000. How was your department and the minister not aware of the gravity of this problem sooner?

(1450) Ms. Marie Lemay :

A couple of things. Maybe I should first clarify that the 80,000 are not people going without pay. These are different things. These issues concern acting promotions, transfers, extra duty pay, and things like that. As for the number that the minister gave, it's the number that we were tracking. It is the number that we were tracking at Miramichi when we were getting complaints. This was from our intake and our tracking of complaints in cases resolved and left to resolve. Those are the numbers we had.

Following my meeting with the unions on April 25, I believe, one of the decisions was that we would have regular meetings to make sure that we heard all of the issues, because the biggest challenge in the implementation at first was that we were hearing things, but we didn't have the data. We were asking to have all the information from every channel that we could, so we could address some of the issues. The unions worked really closely with us to try to get us everything that they heard from their members, and then they sent another series directly through Minister Foote 's office.

At that point, we realized we were at capacity with the phone lines, and it was when we decided to put our web form up so that we could ask people to go to the website and fill in the forms and make sure we had all the information. That attracted and got us the real information and data, because a number of employees have told us about their issues through that web form. The numbers grew substantially from that point.

Mr. Erin Weir :

I have another question about the transmission of information within your department. It's been reported that it was known back in January that Phoenix had breached the personal information of federal employees, yet the minister indicates that she was not aware of this privacy breach until last week. I'm wondering how that happened.

Ms. Marie Lemay :

I think we have to remember that there are processes that we follow in the event of privacy breach. I don't want to diminish in any way the importance of this, but the fact that the breaches are about information, employee names, and employee numbers, there's not a lot that you can do with that. You can't go into the systems; you need other things like codes and other sorts of codes. So the evaluation that was done and is still the one that remains today from our investigation

section is that the risk is actually very low. In very low-risk cases, there's no need in the process to advise the employees because there's really no risk to their personal information. The process was not to immediately inform the minister. We have actually changed the process after this, because Phoenix being Phoenix, even if the risk is very low, the minister felt it is extremely important. We are all on the same page. So for any small Phoenix issue, we have now developed a process to make sure that we're all aware immediately.

Mr. Erin Weir :

You mentioned that the federal payrolls are very complex and also that the concept of Phoenix was to run them using off-the-shelf software from IBM. Do you believe that it was realistic to think that off-the-shelf software could handle the federal payrolls?

Ms. Marie Lemay :

It's an off-the-shelf software, but as we have said, we modified it to fit our needs, and there are 80,000 rules that we had to put in. It is a customized off-the-shelf software, let's put it that way. But it is a proven system. It's a system that has worked well, so that was the decision, and to my knowledge a good one.

The Chair :

Thank you very much. Mr. Whalen.

Mr. Nick Whalen (St. John's East, Lib.) :

Thank you very much, Mr. Chair, and thank you all for coming here today. In my riding of St. John's East, there happen to be, even though it's as far east as you can get from here, a number of people who work irregular hours who are having difficulty getting their rightful pay, especially ships' captains and whatnot. From earlier testimony, my understanding is that it used to take eight to twelve weeks for regular pay to be paid, yet the time between phase one and phase two was only about eight weeks.

I would thus not expect people to complain seriously during that type of window; they wouldn't even necessarily have noticed that there were glitches with the system in the timeline before the phase two decision was made. What do you think about that?

(1455) Ms. Marie Lemay :

We actually have a number of cases in the backlog that pre-date by quite a bit. You're right that, when you look at the past, there was a time between work done and work paid. The expectation with this system is that we'll be much better. The transition has made it such that we are seeing cases that are unacceptable and that we have to fix, but the hope is that once we're to our steady state, we will be much further ahead than before. At this point, we're hearing a lot of things, which is good.

I think it's really important to know that...we need this information, and some of it will be on things that we would have never heard before. The fact that we had this issue and that it has been so prominent is good, because we're going to get everything out, all of the issues that employees are having, and we'll be able to address them.

Mr. Nick Whalen :

It sounds to me as if there will be a certain amount of continuous change management to be done. You talked about some enhancements, changes to manager processes that will be happening going forth. Are there extra non-budget expenditures going into the additional design work that's being done to customize Phoenix?

Ms. Marie Lemay :

That's a good question. The plan was that there would be $70 million in savings every year with the implementation of Phoenix. I think it's fair to say that this year we won't achieve that. We estimate the cost of the one-off—the temporary unit, the call centre, and all those initiatives—to be between $15 million to $20 million, and we are still evaluating the cost. We will be working on other ways, as you mentioned, to accelerate and enhance, so we're evaluating the cost of that. I don't have a number for you today, but remember that there was a planned $70 million a year in savings.

Mr. Nick Whalen :

Maybe we won't worry too much about the timeline of how the backlog developed, but with respect to remedying the backlog, I'm looking at some of the numbers from your presentation earlier and then from your presentation today—your weekly update. It seems, with about 56 employees working on resolving backlog issues, that they got through 1,100 in one week. You extrapolate that out for the number of new independent centres and are saying that we should be through this at the end of October. Will you be able to continually update us, week by week, as to whether or not this is still an achievable target?

Ms. Marie Lemay :

Absolutely, and thank you for the question. It's on the website. I wanted to mention in my presentation that we actually have put a workflow timeline.... Maybe I can pass this around. I'm sorry; it's just off the press this morning, and we're putting it on our website. It gives employees the possibility of looking at the types of issues and when we expect to have them resolved. Yes, we will update this on a regular basis.

Mr. Nick Whalen :

That's good. Managing expectations of employees is really a huge part of the battle here, because people are quite upset right across the country. With respect to the issue you noted around automated retroactive pay adjustments not being provisioned in the system, will the enhancements that are being made to the system allow managers to do retroactive automated pay adjustments so that those will also be processed more efficiently?

Ms. Marie Lemay :

Maybe I can let Rosanna give you a little bit of detail. I believe it's going to be in July.

Ms. Rosanna Di Paola (Associate Assistant Deputy Minister, Accounting, Banking and Compensation, Department of Public Works and Government Services) :

Yes. We have a few retroactive automations going in. We have one going in mid-August to allow the retroactivity calculations to be done automatically. Right now they all have to be done manually, so there has to be a compensation adviser who has to manually go in and intervene versus putting in the dates in the past and allowing Phoenix to automatically calculate. So those things are going in. There is one other big “mass retroactivity”, which is what we call it. As collective agreements get signed, we have to then pay back.

For PSAC, for example, I think, for the next collective agreement, whenever it gets signed, we have to go back a year or two. This will allow Phoenix to automatically calculate those.

(1500) Mr. Nick Whalen :

Are you saying this functionality, which would be required or expected to be needed in the case of any type of union negotiation, did not exist in February? Or did it exist and people weren't properly trained on it? What was the status of the ability of the system to handle retroactive pay adjustments at the time of launch?

Ms. Rosanna Di Paola :

It could handle it, but needed a manual intervention versus an automated process. What we're doing in mid-August and then in mid-September is allowing the system to automate that calculation.

Mr. Nick Whalen :

I have one final question. Our committee is seeing a fair number of issues arising out of the change management process on the IT side in government. One of the things that I've noticed, and I'm hearing certain witnesses say that it's all of a piece and to do it all in one fell swoop, to just implement the system. But my experience in the private sector has been that you would pilot certain new initiatives. You'd do it with a small percentage of the number of people involved. You'd check to see how that affected the training times.

You would measure the types of timelines that are required to resolve problems, maybe 5%, and then you would be able to multiply that by 20 and figure out how many additional resources you would need to roll out the full process. I'm wondering why pilots were not used.

Ms. Rosanna Di Paola :

Our initial intent was to pilot, and then around May of last year, we decided we weren't quite ready to go ahead with the pilot. But what we did was to reconfigure the way we were going to go live. Rather than go live with a mishmash of departments, we took a grouping of 34 departments. They had two things in common. One, their pay was being administered at the pay centre, so there was a concentration of compensation advisers, the people who really know how to administer pay, in one location, targeted. We could go there, “SWAT-team” it, and everybody was there to gather around the people who were going to use it.

That was one commonality. The second commonality of these 34 departments was that they were all on the same PeopleSoft HR platform. Phoenix is based on a North American payroll with PeopleSoft, so the two integrate perfectly. You enter information into a chart; it flows into payroll. That integration was key. It eliminated the need to do duplicate key entry, which was the case before we went live with Phoenix. Before we went live with Phoenix, every time anybody did acting pay—the deputy mentioned acting, as an example—somebody had to put the information in a chart. They'd have to re-key it into payroll.

The error rate was high. That was all fixed. The first grouping of “go-live” in February was very concentrated. It was the same types of departments. It was just the right approach in our view.

The Chair :

For the benefit of the committee, I remind committee members that we will be here as long as it takes. If you have questions, we will remain here until your questions have been asked and answers have been proffered. I know, Mr. Whalen, you wanted an additional question Mr. Richards, welcome to our committee. You have five minutes, please.

Mr. Blake Richards (Banff—Airdrie, CPC) :

Thanks, Mr. Chair. In response to some of the other questions you received today, you were fairly clear that the advice that had been given to the minister by officials had been to proceed. It sounds like that was unreserved advice. But I'm curious; I'm struggling to understand it. I know that the PSAC had expressed some reservations. I have a copy of a memo from their website, I believe it is, on my BlackBerry. I'll just read briefly from it. They indicate, and this was on from April 5:

For some time now, and since the new pay system Phoenix was launched at the Public Works Pay Centre, we have been hearing from our members of numerous problems and concerns.

They go on to indicate that they're

...taking [those] concerns seriously and [they're] following up with the employer to see if they can slow down the implementation of the new system until errors can be corrected to avoid future problems. The PSAC has already communicated with management that they either need to add more staff at the pay centre or slow down the pace files are being transferred.

It sounds like there were certainly some concerns raised by PSAC. Were those concerns provided, in terms of advice to the minister that “We have received this from PSAC. There are some concerns here. Maybe this should be slowed down”? Was that ever communicated to the minister?

(1505) Ms. Marie Lemay :

They were certainly received by staff. Maybe I'll turn to Gavin, who was there the whole time, but we certainly knew about these. We assessed that with everything else that we had by way of complaints when we were looking at April, and our recommendation to the minister was to go ahead.

Mr. Blake Richards :

Sure, but wouldn't it have been something that was fairly important to communicate to the minister, when there are concerns in the public service union, that they were recommending that this be slowed down? Would it not be something you'd think the minister should be aware of and that should be taken into consideration in the advice given to the minister? I really would have to ask again: was this not provided to the minister?

Ms. Marie Lemay :

Do you have an answer, Gavin?

Mr. Gavin Liddy (Associate Deputy Minister, Department of Public Works and Government Services) :

I don't recall, actually. I know we provided a briefing note to—

Mr. Blake Richards :

Could we ask that you get back to this committee to indicate whether the minister was informed of those concerns, and were they taken into account in the advice that the minister received? I think that's an important point.

Ms. Marie Lemay :

I can tell you that we took them into consideration, and our advice was clear: to move.

Mr. Blake Richards :

Sure, but it's certainly something I think should have been communicated to the minister also, for her decision-making as well. Did anyone ever flag to the minister the possibility that people could be in a situation of not getting paid? Was that ever brought to the minister's attention? Was it something that was given to her for consideration, that there was a possibility that people might not get paid?

Ms. Marie Lemay :

There definitely was not, in those words, when I was there.

Mr. Blake Richards :

No. I would wonder why not. You were indicating earlier that there was a backlog that you said was unanticipated, but why would it have been unanticipated? Why would a large backlog like that not have been something that could have been anticipated, and why would that not have been communicated to the minister?

Ms. Marie Lemay :

The backlog, again, are people who are getting paid, and these are adjustments and incrementals. In the past there were time delays between times of acting pay and overtime and payments. That is something that was in the system previously. If we're talking about those.... When I talk about not being paid, it's people in our category one, the 720 who came to us and said that they were not getting paid. Those are the ones who are very important to us and are a surprise that we really have to understand and get to the bottom of it. We have processes to make sure that we address and correct them so that they don't happen again.

Mr. Blake Richards :

There's another area I want to ask about. On May 17 when the minister appeared before this committee, she indicated that there were only 77 outstanding files to resolve, and since then we've obviously heard that the number is far larger: about 80,000 affected cases. That was only a few weeks later, I guess; I would imagine that those 80,000 cases didn't just magically appear within those few weeks. On top of that, even today we've heard that there are, I think, 500 more cases that have showed up. Who told the minister that there were only 77 cases?

Ms. Marie Lemay :

We did.

Mr. Blake Richards :

Was that, then, just completely incorrect information that the minister received at that time, or was it just incomplete information, or...?

Ms. Marie Lemay :

It was the information we had at the time. Do you want to add something, Gavin?

Mr. Gavin Liddy :

Yes. Those were the complaints we had received. In our case, and the deputy has given some examples, before Phoenix there were lengthy delays in receiving backlog—acting pay, extra-duty pay, transfers, those types of things—and they were measured in weeks and weeks. When we went live with Phoenix, the goal was to clear those up—every single case—within 20 working days, or four weeks. The 81,000 public servants are those who have exceeded the four weeks. There weren't complaints on those; those were files that we were not able to close out within the four-week service standard.

That's why there's a difference in the number. As the deputy also said, we were hearing often—from the union, members of Parliament, through the minister's office, and from other deputies—that there were problems. That's why we went with the live web form, because these weren't getting to us. We were getting some complaints, but our phone system wasn't able to handle the volume, and you probably heard in the press about the numerous people who phoned hundreds of times and weren't able to get through. We wanted therefore to establish a different methodology. Even today we're at about 10,000 complaints.

There are lots of public servants who haven't complained, and that was the difference between the two numbers. Those are the complaints we had heard and those were the numbers that were unresolved at the time we provided the number to the minister.

The Chair :

Thank you, Mr. Liddy. Mr. Grewal, take five minutes, please.

(1510) Mr. Raj Grewal (Brampton East, Lib.) :

Thank you, Mr. Chair, and thank you, Ms. Lemay, for coming today. A lot of the questions have focused on what went wrong. I think we can all agree that there was an issue with the rollout. That's a discussion for another time. I think there are two discussions to be had here. The purpose of this committee meeting, for me, particularly, is to ensure that people get paid, because it's not right that people are working and are not being paid, especially when you hear the heartbreaking stories in the news recently, especially about students.

Not too long ago, I was a summer student, and I can only imagine the stress of not being paid through the summer. So I'm very pleased to see that priority number one includes students and new hires who may have their first jobs out of university and have to pay student debt and are living off credit cards. It's unacceptable that anybody is working and is not being paid. It's very unacceptable, in my humble opinion, for people to be incurring additional expenses because they're not being paid on time, whether that's credit card interest, missing loan payments, or mortgage payments.

Can you please talk about some of the solutions we've implemented, particularly how many more people we have hired to solve this problem so we can get people the money they rightfully deserve?

Ms. Marie Lemay :

In Miramichi we hired 40 additional staff at the beginning of the year. We expect to have more than 115 soon in Gatineau, 50 in Winnipeg, 20 in Shawinigan, and 20 in Montreal. That is a significant number of people who are going to be coming to the table to help us get through the backlog. We're also doing an education component, which is going to be extremely important in the change management aspect of the system. We've also created internally what we call an operations centre to make sure that we can get all the information and that we have a process that flows.

Like you, when we hear cases of people not being paid, I don't want that. The important thing for people who are not getting paid is that they get in touch with us, because we have processes to get them paycheques in a fairly short time, and if they need an emergency salary payment, they can get it in days. Nobody should go without money if they need it and they've worked for it. In terms of students, if I can just pause, the way the system works, and the way it worked before Phoenix, is that you have to work for two weeks before you're entered into the system and get paid.

When you join the public service and are on-boarded—all your information is in and everything is settled—on day one, it will take, if you're lucky, three or probably four weeks to get paid, no matter what. This has nothing to do with Phoenix. It was like that before. The challenge for a student who is with us for 10 weeks or 12 weeks is that you start with four weeks, assuming that the person who hired you and on-boarded you put everything in. If you wait one week or two to on-board your student, you're now at six weeks. We'll have to pay very special attention to students, because they are so important to us.

For the next wave of students we are trying to find a process that will alleviate that, because we have to make sure that they get that earlier.

Mr. Raj Grewal :

My second question is very much focused on the compensation mechanisms that will be implemented to help alleviate the pain that's been caused because of Phoenix, such as if somebody was late with a mortgage payment and there are interest charges, if somebody was late with a tuition payment, or if there are interest charges on credit card bills. In my humble opinion, I think everybody should be in a neutral position, if not better. Nobody should be in a worse position because of a technicality or, in all honesty, a mistake. The blame game can go on for years, and there is a time and a place for that.

I really am focused on the workers to ensure that they're put in a position that's equal to if not better than if this problem never occurred in the first place. Can you please talk about what the department is looking into to ensure that people are compensated fairly?

Ms. Marie Lemay :

I can tell you that we're very seized with these issues, and our colleagues at the Treasury Board are working with the unions and are developing a process. We don't have the details yet. As soon as we have them, we'll make them available. We're asking employees to keep whatever pieces of documentation they can and to keep track of what it is costing them. There will be a process in place, and they will be made aware of how they can make a claim.

(1515) Mr. Raj Grewal :

I'm very glad to hear that. Even though people are so frustrated with the system, it gives them some reassurance that at the end of the day they will be able to get to a neutral position, if not better. My last question focuses on the fact that—

The Chair :

Mr. Grewal, if may I interject, I'm sorry—

Mr. Raj Grewal :

Mr. Chair is a fair guy, so I will defer to him.

The Chair :

We will have an opportunity for your third question, but it will have to come in a subsequent round. Mr. McCauley, for five minutes please.

Mr. Kelly McCauley :

I want to go back to the implementation. What would have been the risks of not pulling the trigger and going through with phase two despite the evidence or information at the time that we weren't ready for it? We've heard from the minister and yourself, “No, we couldn't have delayed it”. What were the risks of delaying it?

Ms. Marie Lemay :

We believed that the risk of delaying it was greater than not delaying it. Do you want to speak to that?

Mr. Kelly McCauley :

What were the risks? Not what you believe are the risks; what were the risks, please?

Mr. Gavin Liddy :

Yes, the risks were running two systems. The risk of running two systems in parallel is that, for example, if someone transfers from one government department to another, then you have no ability to transfer their pay file. The longer we ran two systems the more of a problem that would have been. Also, we didn't have the compensation staff to do it at the time, because all of them were fully employed on the new system, or were getting ready to transfer. Those are the two most significant risks. Once we had pulled the trigger in January, unless there were a significant catastrophic problem with the software itself, we almost had to go ahead with the second wave.

Mr. Kelly McCauley :

Okay. One of my colleagues asked earlier if you had ever briefed the minister or the cabinet that we should not proceed with this system, and your comment was that you didn't recall and you didn't know. How is it that on something this big—

Mr. Gavin Liddy :

No, I said that I didn't recall whether or not we had specifically told the minister that the union had objected or had concerns, because we brief the minister sometimes two and three times a week on four or five different files. We do that week after week after week, so I don't recall every specific piece of advice I've ever given to the minister.

Mr. Kelly McCauley :

Okay. Did you ever advise her that this was going to be a big problem, or was it just the information you had, “Ah, it's going to be a pain but we can muddle through.”?

Mr. Gavin Liddy :

I don't think we used the words that we would “muddle through”. We felt that—

Mr. Kelly McCauley :

You know what I mean by that.

Mr. Gavin Liddy :

—the considered risks were that, on balance, we should go forward. We did outline that this was not going to be, in all cases, a smooth process. I'll go back to what the deputy said. Paying people relies on somebody getting a letter of offer, then signing the letter of offer. Then it relies on the HR professional to submit that to the Phoenix system, and then it relies on an individual pay person in the Phoenix system to enter it into the software, so there are lots of different players.

I think that of the 589 people who've indicated they weren't paid in the last pay period, only 210 are in the system, goes to the extent of the issue. It's a number of different steps that have to be taken to get somebody paid, so it's really about getting all of those pieces from end to end, as the deputy said, working efficiently. That's where our biggest challenges are today, getting it all working from end to end.

Ms. Marie Lemay :

If I may, Mr. Chair, I just want to be absolutely clear on this. We did recommend to the minister to go ahead. That's clear. I only want to make sure it's very clear. It was our recommendation.

Mr. Kelly McCauley :

Okay, thank you. We've heard today a lot of stuff coming out in the press—a gentleman not getting paid and that when he finally gets paid, he gets overpaid. Have there been any large inadvertent payments made, or caught just before they were issued? We heard rumours of huge amounts of possible overpayments.

Ms. Marie Lemay :

Yes, there have been, and we have a process to get them back. So the answer is yes.

Mr. Kelly McCauley :

How much is at risk here? I've heard figures in the millions.

Ms. Rosanna Di Paola :

I don't recall every one, but we do have stop-gap measures in the systems that will not issue payments. Some could be...not $1 million, but some could be legitimate with severance payments going into the tens of thousands of dollars. But we do have stop-gap measures in both Phoenix and in the standard payment system that will stop a large payment from going through. It gets withdrawn and we look to see if it's legitimate or not.

Mr. Kelly McCauley :

What was the highest amount of an inadvertent payment?

Ms. Rosanna Di Paola :

Sorry, I don't recall.

Mr. Kelly McCauley :

No? Okay. Very good. The Prime Minister said he's taking personal responsibility to ensure that the system gets fixed and he's tasked the Clerk of the Privy Council with fixing the issues—obviously working with you. What is the Clerk of the Privy Council doing, and what role is the Prime Minister playing in that work?

(1520) Ms. Marie Lemay :

We have been keeping the Privy Council Office aware of every step in the last month. We've been working together and they've been supporting us in many ways. What you have to remember, I think, is that this is not a PSPC issue solely. It is an enterprise-wide transformation, a Government of Canada issue, and my colleagues are totally seized with that. It is their employees who are having issues, after all, so it's not just us. It's the collective of the Government of Canada who are concerned and acting at every step of the process.

The Chair :

Mr. Ayoub, for five minutes, please.

[ Translation ]

Mr. Ramez Ayoub (Thérèse-De Blainville, Lib.) :

Thank you, Mr. Chair. Welcome and thank you for being here today. This is really about a crisis of confidence. As far as I'm concerned, the main goal of this meeting is to come up with solutions. We want reassurance that we will find concrete solutions to the problems affecting employees. That is my number one concern. I'm sure we'll get a full review of what happened. You already touched on that. Pointing fingers will definitely not solve anything today. I agree with the committee chair's recommendation that we shouldn't politicize the evidence.

Unfortunately, I see the members on the other side of the table playing politics with this instead of focusing on solutions and the positive side. I'd like you to talk about short-term solutions. Some people have not been paid at all. You said that people need to report it if they haven't been paid, so that solutions can be found, because solutions do exist. The chart just passed around presents some priorities and solutions. I want to explore the details of this. Some people have been waiting three months to be paid. I've heard that some people may have to wait up to nine months.

Is that true, or are those just rumours? I see that some solutions do exist. I'd like you to elaborate on this and provide assurances that there will be no other problems in the short term. Tell me a little more about the solutions to reassure me. I will likely have more questions after that.

Ms. Marie Lemay :

In early June, when we learned about the growing number of problems, we decided that we had to provide employees with a process by which they could contact us directly, and we would then forward their requests to the departments, or else we would find a way to accelerate the process in certain critical cases. That is why we set priorities for our work. I hope you'll be reassured to hear that if someone hasn't been paid, he doesn't have to wait. Ideally, he would speak to his manager and his department.

If there's a problem and nothing happens, he could then contact us directly and we would take the necessary steps. If we have the information, we will move forward; otherwise, we will get the information from his department. There's a way for people to contact us and get money quickly, in addition to salary advances, which are available. This goes for people in the first category, in other words, priority one. We've also put a process in place for people in the second category, or priority two, and that list is a little longer.

At the same time, what's interesting is that we've confirmed with our colleagues at Service Canada that people going on parental leave, for example, don't have to wait to get the document they usually receive when they start their leave, the Record of Employment. They can submit a request directly to get their employment insurance benefits. They can still move forward while we are fixing the problem. The other positive aspect has to do with the backlog, which is outlined in the document we handed out earlier.

People who submitted transactions before Phoenix or who've been in the system for some time can look at this and know that their transactions will be resolved within a certain timeframe—

Mr. Ramez Ayoub :

I'd like to interject. Have the cases reported had any follow-up? If someone hasn't been paid for two or three weeks, for example, have cases like that been monitored from the beginning, to ensure that they're getting their pay or emergency pay in the meantime? Is anyone doing this kind of follow-up, or would that file end up in the pile with all the others? Is a supervisor or someone examining these kinds of files individually?

(1525) Ms. Marie Lemay :

Thank you for your question. We have done something about that. Every week, actually, on a daily basis, Ms. Di Paola sends our colleagues in finance all requests for emergency pay that we receive. She forwards them directly to the departments so that they know, if they're not already aware, that some of their employees have asked for emergency pay. Those payments can be issued in just a few days. We aren't leaving people in the lurch.

Mr. Ramez Ayoub :

So there's no reason for someone not to have any money or any pay at all and be forced to find another source of income. There shouldn't be any cases like that. That is my understanding.

Ms. Marie Lemay :

Absolutely.

Mr. Ramez Ayoub :

Thank you.

[ English ]

The Chair :

Thank you very much. Mr. Weir, we're down to three minutes for you, sir, and then after that, we'll go back to taking questions.

Mr. Erin Weir :

Thank you. I think I would have to respectfully disagree with the notion that implementing phase two of Phoenix was the correct decision, especially given what we know now, that Phoenix has resulted in about a third of federal employees not being paid correctly. Now Mr. Liddy made the argument that the risks of not implementing phase two outweighed the risks of implementing it. Just to make that a bit concrete, are you saying that if phase two of Phoenix had not been implemented, more than a third of federal employees would not have been paid correctly?

Mr. Gavin Liddy :

Possibly, and possibly not paid at all, if we were running two systems. Again, we're talking about a third of the public servants that aren't being paid correctly. You're absolutely right. However, it's a delay in the payment that they're expected to receive. They are receiving their base pay. What they're not receiving is their acting pay or their transfer from one government department to another. These were problems we experienced before Phoenix was implemented as well, with weeks and weeks of delay. The system was designed to fix those weeks of delays, and I'm confident that we'll get there once we've cleared the backlog.

Mr. Erin Weir :

Surely you're not suggesting that the problems with the federal government's payrolls before Phoenix were worse than what we're seeing now.

Mr. Gavin Liddy :

The delays in paying people acting pay, transferring from other government departments, and extra duty pays were certainly in the weeks and weeks of delay.

Mr. Erin Weir :

What proportion of federal employees would that have been under the previous system?

Mr. Gavin Liddy :

I don't have those figures. I have figures for a number of departments, not by number of employee, but by the number of weeks delay. They're up to 24 weeks, depending on the category. These are 2009 figures, when the case was made to go forward with Phoenix.

Mr. Erin Weir :

To ask a similar kind of question a different way, how much worse would things need to be for you to concede that it was a mistake to rush ahead with the implementation of Phoenix?

Ms. Marie Lemay :

Can I just make sure that I didn't misspeak? I believe I said that in my opinion I would have done things differently. There are things that we would have done differently. We're not saying this is a success, by a long shot. We realize there are real issues, there are real people involved, and we're really serious about solving it. Please don't go away from here thinking that we think this is a great thing and that phase two is all good. That's not the case. What we're saying is that we could have done things differently and we're trying to address them now. We will learn a lot from this—a lot.

We will put in place and make sure that people get paid, and we will make the system better and make it what it's supposed to be. The transition is much more difficult and much longer than we thought. That's what I would like the committee to take away.

The Chair :

We'll go back to the seven-minute rotation now. Mr. Gerretsen, I have you on my list as the first speaker on the government side.

Mr. Mark Gerretsen (Kingston and the Islands, Lib.) :

Thank you very much, Mr. Chair, Thank you for taking the time to come to speak to us and answer our questions. My constituency office in Kingston and the Islands has been dealing with this since well before the beginning of April. Because we have a lot of government employees, but perhaps government employees in different departments, we've seen different phases of this. It's taken me a while to wrap my head around this, and I wouldn't even say that I'm fully there yet. What I can say is that there seems to be very specific issues that are different throughout different departments in the government.

In particular, I'll give you one example. In the military, there are military and non-military personnel. The military personnel are fine. The non-military personnel need to use Phoenix to go into if they're doing shift work and log their hours. Their superior, who is a military personnel, then has to go into Phoenix and approve that. The problem is that the military personnel don't have PRI numbers, so they can't get into Phoenix. That's one problem. There is another problem. We've talked a lot about underpayment, people who are owed money. How about people who have been overpaid?

It seems simple enough because you have a device to take that money back, but what about their pension payments? Usually pension payments are just one direction. Their pension is based on what they're making, and if we've overpaid them and put more into their pension, how do we take that money back? I'm not asking you to drill down into the details of answering these questions, but I want assurance that you understand and have a knowledge of all of these individual problems so that you can move forward.

Then the next question is what resources do you need, if any, to help improve and make it happen quicker than the timelines you've indicated in your chart here?

(1530) Ms. Marie Lemay :

We are aware, definitely, of the military issue. Maybe you want to speak to that quickly.

Ms. Rosanna Di Paola :

You have that perfectly right: they don't have a PRI, so they can't go into Phoenix. We're going to fix that, so we have an October enhancement release with Phoenix to allow military in DND and officers in the RCMP the ability to approve transactions for their non-military, non-officer employees. That's a fix that will be coming in October.

Mr. Mark Gerretsen :

Okay.

Ms. Marie Lemay :

In answer to your question, then, we are aware of many issues, which we are addressing. That's why it's so important that employees reach out to us, if they are having a problem. I can't guarantee you today that we are aware of 100% of the issues. If we don't know about one.... That's why it's so important. We think we know just about all of them, because we've been hearing a lot, we're logging them, we're processing them, and we're dealing with when to address them. But it is important that employees reach out and tell us.

For one thing, it's so that we can solve their problem quickly; for another, if it's an issue we haven't encountered, we need to know, because we need to be able to fix it.

Mr. Mark Gerretsen :

Do you have the resources you need to get to delivering on this, or do you need more resources?

Ms. Marie Lemay :

Right now, with the centres and everything, we feel that we have the resources. But I can tell you that our minister has told us that she wants this fixed and that it's for us to come up with the solutions. We're not being held back as to resources to put this to bed. Right now, the thing we'll be monitoring the most closely is our pay centre in Miramichi, and when we reach, I'll say, the steady state—when people are fully used to the system, when some of the automation comes in, when that flow is steady—that's when...

If we see that it's not, the temporary units that we have are there to stay, and if we can get more compensation advisers, we have said that we would take as many as we can. I know that the unions have put something on their website calling out to compensation advisers to reach out to us. That's been very helpful, and I hope we get more. If we get more, we'll bring them into the satellite units, and you'll see that timeline go down.

Mr. Mark Gerretsen :

I have about two minutes left, and my last question might take some time to explain. To me and I think to many people out there, in particular those who are affected by this, it seems a long period of time to be asking people to wait for a fix to what is perceived as a simple problem. Can you walk me through what happens from the moment that somebody calls and creates a complaint or does so online? Why does it take so long to actually get things sorted out so that people start getting paid? Is it just a sheer matter of volume versus the number of people there to deal with the cases?

What is making it take so long? I have an employee in my Parliament Hill office who started working for me on April 18. I signed the contract with her at the beginning of April. She got her first pay yesterday. She was beyond the three months' probationary period before she even got paid once. Why does it take so long for this stuff to become aligned properly?

Ms. Marie Lemay :

I almost want to ask you who put her in the system, but I'm not going to go there.

(1535) Mr. Mark Gerretsen :

I put it into the system, and it was done properly.

Some hon. members: Oh, oh!

Ms. Marie Lemay :

In answer to your question, I really hope that as of last week, people who have pay issues are not waiting anymore. What you're referring to is that there was a period when we were assessing the size of the issues and the backlog and everything. That period was for us the time when we realized that it was outstripping our capacity. We now have processes in place, so that if we have the information, somebody who's not getting paid will not wait more than three days and until the next paycheque, if we know. If we don't have the information, if there are things missing, we have to go back to the department.

The departments are very seized with this, and we will get the information so that it's on the next one. The situation you described would not happen today. If the person reaches out to us—let's say, after four weeks—then it would be either at the following paycheque or, if we're missing information, after that.

Mr. Mark Gerretsen :

What about shift work and people who are required to put hours into Phoenix and their manager has to approve it?

Ms. Marie Lemay: It's the same thing.

Mr. Mark Gerretsen: It's the same thing? Thank you.

The Chair :

Thank you, and my apologies, Mr. Gerretsen; I didn't welcome you to the committee, so welcome. Mr. Richards, take seven minutes, please.

Mr. Blake Richards :

I want to just return to something similar, because it's still quite unclear to me what is being done to fix this issue. I was reading a CBC

article that mentions a government call centre that's been set up in Toronto. I'm just going to quote from it:

...staffed by 100 temp-agency workers, to answer the phones from the thousands of panicked workers calling in looking for answers. These temps, who do not have security clearance, and are largely charged with reading from a script, are in place to reassure bureaucrats and provide updates on their file. They will not be able to resolve pay problems...

Then it goes on to say:

One of those scripts instructs them to tell public servants that if they informed the government of pay problems before June 1, there would be some sort of resolution by October.

It doesn't seem to line up with what we're hearing today, I guess. I'm not accusing anybody. We're hearing from people who are saying they haven't been paid in months. I've heard that from people in my riding, and I know it's being heard all across the country. You have call centres being set up just to tell people, “Well, gee, everything's going to be all right”.

I would suspect that for someone who has a mortgage payment to make and doesn't have the money to do so, or who maybe can't afford to feed their kids, or whatever it might be, that little bit of reassurance from someone in a call centre isn't really going to cut it. We've been here for an hour and a half now, and I still don't have an understanding of what is being done to fix this issue. We're hearing that people are being paid and that there's no one who hasn't gone without pay, but that's not what I'm hearing out there. Something seems to be lost in translation, I guess.

I still don't really understand what's being done to fix this issue. When you're getting thousands of calls at a call centre, it sounds to me like there must be people who still aren't being paid, and it's been months. Can we get a better sense as to what is being done to fix this, because I still don't get it?

Ms. Marie Lemay :

I wish I could give you a simple answer. Again, I go back to the fact that this is not a simple transformation, right?

Mr. Blake Richards :

Understood.

Ms. Marie Lemay :

It's a system that has many, many components. That's why we're touching all these different components at the same time to make sure that, at the end, all of them are functioning so that the system works perfectly. That's why you're hearing different things, right? When we're talking about the temporary units, that's the capacity for the backlog, for the transition, and it could be for overflow if we need it a bit for Miramichi.

When we talk about education and about a manager and an employee—I say education, but it is change management—it's about the tools that we're going to be producing very shortly for the users themselves to make the transaction easier, because if the transaction is not done properly, the system will reject it and create an issue that will then create a backlog. So getting the first step is actually very important. On the software side, we're working very closely with IBM to make sure that a lot of the enhancements we're looking at are all done on time or faster.

We're going to be looking at every little issue that's raised, because there are issues, and we're addressing them. On the programming, if we thought we should do something one way and now it's another way, we'll address that. So we're working on all fronts. At Miramichi, we heard a lot of complaints that people weren't getting through. It was taking over 30 minutes at one point to get through.

(1540) Mr. Gavin Liddy :

You wouldn't get in. The call would be dropped.

Ms. Marie Lemay :

They couldn't reach the call centre. That's when we decided to create the web form and to push people to communicate with us through that form. It turned out that people were still calling the call centre, and we didn't know how many calls were not actually getting through. So what we have done with the temporary call centre in Toronto is to enable people to go through a first screening and talk to the employee. If it is a category one or category two, or a case that needs to be transmitted to the pay centre, it's done through a form to the pay centre. You might find this fact interesting. The first day, and we did this on Monday, so Monday there was—

Mr. Blake Richards :

Can you tell me the date the web form was set up?

Ms. Marie Lemay :

I think it was the beginning of June, but I'd have to come back to you.

Mr. Blake Richards :

Okay. And then the call centre...?

Ms. Marie Lemay :

The call centre was Monday.

Mr. Gavin Liddy :

Tuesday.

Ms. Marie Lemay: Tuesday, sorry.

Mr. Gavin Liddy: Tuesday morning, 7 a.m.

Mr. Blake Richards :

Can you give me a rough sense of when the web form was set up? Can you give me a rough idea? I know you can't give me an exact date.

Ms. Rosanna Di Paola :

We've always had a form. The one we promoted was recent; it's been for about four weeks now. We had another form on the site but only for pay centre clients, employees who were administered out of the pay centre. We had that form there right from the outset.

Ms. Marie Lemay :

This one was one that we promoted to employees to give us the information. As for the call centre, the interesting fact to me is that the first day, they received 1,700 calls and only 1,000 needed to have cases transmitted to the Miramichi pay centre. That means, the way I interpret it, is that there were at least 700 people who didn't necessarily need to talk to a compensation adviser within the next 48 hours. That might be a really good thing because it means there's a triage there.

Mr. Blake Richards :

Sorry, could I interrupt you there for a second? Can you give me a sense as to some of the reasons for that? You're saying that 700 didn't need to talk to an adviser, but what criteria determine that they didn't need to call? Does it mean they were in fact paid? What does it mean?

Ms. Rosanna Di Paola :

We encourage people to call the pay centre even if they are going on maternity leave and want to know what documentation they need to fill out. In that case, we take down their information, we send them their forms to fill out—

Mr. Blake Richards :

You're saying that those 700 would all be people for whom this wasn't an issue. It wasn't this specific issue, but some other pay issue that they had, or questions.

Ms. Rosanna Di Paola :

Or questions. It's not all pay issues—a lot of them are pay questions. They just don't know how to navigate the complexities of the collective agreement and we can point them to the website.

Ms. Marie Lemay :

The good thing about that is it liberates the people at the Miramichi pay centre to actually get the cases that they need to work on and to go through. We're hoping that's going to be a great addition.

The Chair :

Mr. Weir, for seven minutes, please.

Mr. Erin Weir :

When I asked about the advisability of using off-the-shelf IBM software to run federal payrolls, the answer was that this approach was a proven success; but aren't there many examples, both within Canada and around the world, of IBM encountering problems in trying to run public sector payrolls? I'm thinking of a lawsuit between the Australian state of Queensland and IBM over a somewhat similar boondoggle there.

Mr. Gavin Liddy :

I'm not aware of IBM's experience in other jurisdictions. When the decision was made to go with different options for a pay system back in 2009, a number of options were examined and it was felt that a commercial off-the-shelf product would be the best route to go. A competitive process was run and IBM came to the table with PeopleSoft, which I believe is one of the largest HR management systems in the world. As well, the Government of Canada was going with the PeopleSoft HR system as well, so it was felt that the HR and the pay system would be best able to talk together if they were using the same software.

Mr. Erin Weir :

When you say you're not familiar with the experience of IBM around the world doing public sector payrolls, presumably that's something the government looked at in making this decision.

Mr. Gavin Liddy :

In 2009, I'm sure they did, but I don't know the specifics on that. I wasn't in the department then.

(1545) Mr. Erin Weir :

If you could come back to the committee with a bit more information on those international comparisons, I would certainly welcome it. I suppose now that we're into this mess I wonder what kind of liability or contractual obligations IBM might have to try to fix the problem?

Mr. Gavin Liddy :

Again, I think I'll go back to the deputy's opening remarks. It's a system of systems. Our experience to date is that the software is functioning as we told IBM to program it. For example, we didn't tell IBM to make sure that military service numbers could be used, which is something that we should have done as a department. But the IBM software is working as it was supposed to. They have a contract. If there are warranty issues that are a result of their fault, they fix them at no charge to the Government of Canada. But, as I said, the software is working.

It's really about when you combine all parts of the system, meaning managers, individuals, HR specialists. That's where we have to get the system working better together so that people understand exactly what has to be done to get a pay transaction going. There are a lot of examples of where we have room to improve that.

Mr. Erin Weir :

Will the government be making public the terms and conditions of the contract with IBM that you mentioned?

Mr. Gavin Liddy :

I'm not sure. I think there's commercial confidentiality with the firm and we'd have to get the firm's permission to do that.

Mr. Erin Weir :

Okay, I ask because this seems like an aspect of the issue that maybe merits further exploration. However, I guess you're suggesting that the problem is not with the software, but with the utilization of the software. In that vein I guess I would ask whether Miramichi was the right place to locate the Phoenix pay centre?

Mr. Gavin Liddy :

There were a number of options studied and a number of criteria: did they have enough people, what was the population base, bilingual capacity, that type of thing? A number of options were presented to the government at the time. Miramichi fit all the criteria of those options when that decision was made.

Mr. Erin Weir :

It's been reported that a number of people who had expertise in federal payrolls were unable to relocate to Miramichi. Was that a problem in the implementation of Phoenix?

Mr. Gavin Liddy :

I'll ask Rosanna to comment on that, but it was anticipated that not everyone would want to move from Winnipeg, Ottawa, or Edmonton to the pay centre. The training program was designed to take that into account and to train people from scratch—and it was a new system as well.

Ms. Rosanna Di Paola :

We did put in place a professional development program, because we had estimated that very few people would actually move to the Miramichi. The training program was lengthy. It went on for two years. The movement of employee accounts to Miramichi was done very deliberately in small pieces to allow the compensation advisers to learn compensation. As the deputy mentioned, 27 collective agreements and 80,000 business rules are difficult to digest all at once, and it did take a two-year program. We brought 460 individuals through that program over a few years.

Mr. Erin Weir :

Okay, but it seems not to have worked. I wonder if the current approach of setting up these supplementary pay centres in Gatineau and other parts of the country implicitly acknowledges that trying to centralize the whole payroll operation in Miramichi didn't make sense.

Ms. Marie Lemay :

Our assessment is not that it has not worked. Our assessment is that the transition is where the issue is and learning curve of everyone involved in the transition to the Phoenix system. Whether it would be in Miramichi or Ottawa or Chibougamau, it would be the same issue that people would have to deal with. Also, the temporary units are temporary until we reach the steady state.

Mr. Erin Weir :

Speaking of those temporary units, I just want to pick up on the CBC report that Mr. Richards also referenced about employees being hired at some of these temporary centres who do not necessarily have proper training with Phoenix or proper expertise. Do you have any response to that report?

Ms. Marie Lemay :

I'm not sure which report you're referring to, but the compensation advisers have compensation adviser experience. They get training on Phoenix when we on-board them, so that's an onboarding thing. There's been confusion I think in the media between the Toronto call centre and the temporary units where we actually process cases with compensation advisers. As we discussed earlier, Toronto is a call centre, meaning that the people there don't have access to the information about employees and their data. They take the information and they transmit it to the pay centre. Those people don't need to have that same training.

(1550) The Chair :

Monsieur Drouin, for seven minutes, please.

[ Translation ]

Mr. Francis Drouin (Glengarry—Prescott—Russell, Lib.) :

Thank you, Mr. Chair. Ms. Lemay, thank you for accepting the committee's invitation. Some people would have preferred if the minister came, but I know ministers often rely on the people around them for their expertise. I also know that there is plenty of expertise here today. You tested 16,000 pay scenarios, I think. Did all those scenarios work? What happened when the scenarios didn't work? I see you've developed a plan. Had that plan already been developed a year ago or when the transition to the Phoenix pay system was being planned?

Ms. Marie Lemay :

There are two aspects to that question. Gavin can start us off.

Mr. Gavin Liddy :

I'll let Rosanna begin and then I'll take over.

Ms. Rosanna Di Paola :

I'll talk about the testing we did on the Phoenix pay system and the 16,000 scenarios. We verified those scenarios, but we didn't apply them directly in July of last year because they had too many defects. There were too many major, critical defects for us to implement the Phoenix system. We therefore postponed the implementation date.

Mr. Francis Drouin :

Last July, had you already established priorities one, two and three? Were you already anticipating these problems?

Ms. Rosanna Di Paola :

No.

Ms. Marie Lemay :

We established the categories and the timeline you see here relatively recently, actually, after analyzing the scope of the backlog and deciding to create temporary units to deal with the problem. As I said earlier, we believe it is unacceptable that people aren't getting paid. We did not think this was even a possibility. We had to find a way to help people quickly, to make sure they would be paid and to understand the problem. That is what led us to establish the first and second categories. As for the third category, that timeline was set to complete all transactions submitted before June, in other words, the backlog.

Mr. Francis Drouin :

You said it's unacceptable that people aren't getting paid, and you're absolutely right. Would it be possible for an employee to be classified as priority one first, but later be classified as priority two, because of another problem? This morning I spoke to someone who had accumulated 375 hours. She was paid this week. That problem was resolved, but she didn't get her bilingualism bonus. Could that be considered priority three, where other allowances should be resolved?

Ms. Marie Lemay :

Yes, that's possible.

Mr. Gavin Liddy :

Normally, I think, if someone is classified as priority one and his or her file includes other requests, we would try to resolve everything at once.

Ms. Marie Lemay :

That is our goal, but we probably weren't able to achieve it last week. Our goal is to resolve everything when dealing with one file. The question is whether that's possible right now.

Mr. Francis Drouin :

How many compensation advisors have you hired since the crisis?

Ms. Marie Lemay :

We added 40 people in Miramichi in January. We now have 57 employees in Gatineau, but we are planning for another 115. They've been hired and will begin working in the coming weeks. The Winnipeg centre has 20 people, and that number could go up to 50. There are another 40 people. I'll let you do the math.

Mr. Gavin Liddy :

That's about 240 people.

Mr. Francis Drouin :

Let's look at priority three, as an example. If the committee were to meet in November, can we expect all those problems to be resolved? How did you establish this timeline?

Ms. Marie Lemay :

The people doing the work have been very diligent. The figures we have given you include our predictions and the number of people who will be in the various centres. We wanted to divide up the work to figure out how to get it all done. Each centre has been given specific transactions to address. Of course, if there are 20 people instead of 40, production is not as high. Also, as we indicated earlier, we have to provide some training for the first few weeks, so those first few weeks are a little less productive. We took all that into account to ensure that our timeline is respected.

I'm very hopeful that we'll get this done quickly. It's important to remember that some problems are beginning to be resolved and that for some people, this has to happen tomorrow, not in October.

(1555) Mr. Francis Drouin :

Would you say this timeline is “conservative”? I'm sorry, Mr. Chair, but that will be the only partisan term I use today. Are these figures “conservative”?

Ms. Marie Lemay :

We believe these figures are realistic.

Mr. Francis Drouin :

Okay. What is the purpose of the call centre in Toronto? You said that it is filtering calls. Are you encouraging employees to call that centre?

Ms. Marie Lemay :

First of all, we now know how many people need to speak with someone at the pay centre. As Mr. Liddy mentioned, before Tuesday, we didn't even know that some people were trying to call, because their calls weren't getting through. Going forward, everyone should be able to speak with someone. This allows us to triage the issues. As I said earlier, as of Tuesday, we were able to see, with supporting stats, that not everyone needed to speak with a compensation advisor. This means that the compensation advisors in Miramichi can focus on the files they need to work on.

We hope this will free them from having to deal with files that people with no experience in compensation can take care of instead. That could make things easier. We have made the following commitment: if people call the pay centre in Miramichi and have a category one or category two problem, someone from the pay centre will call them back within 48 hours to follow up on their file.

Mr. Francis Drouin :

There was no way to keep track of how many people called Miramichi and waited on hold for a while, only to hang up when they were fed up?

Ms. Marie Lemay :

That's right.

Mr. Francis Drouin :

Is there any way to keep track of those calls now?

Ms. Marie Lemay :

Yes, we now know the exact number of calls and the wait times. As I said earlier, the response time is under four minutes. That is a considerable improvement.

[ English ]

The Chair :

We're going to go into a five-minute round. I would just remind all members again that we will continue to ask questions as long as needed, but we do have Madame Lackie and Madame Daviau waiting to answer any questions you may have of them as well. We will go now to Mr. Richards for five minutes.

Mr. Blake Richards :

I just have one quick question, and I think my colleague might have one or two as well, so I'll pass my time to him if I have some left, and I expect I will. I want to return to where I was at in my last intervention. I'm sure there are hundreds, if not thousands, of civil servants paying attention to what's occurring here today, those who have been left without pay, wanting to make sure they have answers. I think we'd be remiss if we didn't have the answer to this question for them. I know we touched around the edges of it earlier in a question that I think Mr. Grewal had asked.

I want to ask it directly and give you an opportunity to respond, because I think it's important that the public servants who are watching have the answer to this question. It's regarding the reimbursement of expenses. There are expenses people would have incurred as a result of not being paid, and I know you'd indicated that was going to be addressed and fixed, but I wonder if you can tell them when they can expect to see a reimbursement of those expenses resulting from this rushed implementation.

Ms. Marie Lemay :

What I can tell you at this time is that discussions are ongoing, as we speak, between Treasury Board and the union. People are seized with this. There's a real desire to be able to share a process very quickly, but I don't have a date. I believe it will be imminent, because it is a real issue, as we all recognize.

Mr. Blake Richards :

I appreciate the word “imminent”. I hadn't really heard anything else that gave me any sense of this, and so I appreciate it. I hope that is accurate and that it's meant in the way that I would take it to be meant, because these are obviously real people with real lives. There are real consequences here and there are real expenses, and they need to be paid as quickly as possible. I hope, if anything, we've left that impression today. I'm sure you're well aware of that, but I hope we've left the impression of how urgent and important it is that these people be treated fairly and expeditiously with what they need and what they require. With that, I'll turn it over to my colleague Mr. McCauley.

(1600) Mr. Kelly McCauley :

Great. Following up on Mr. Richard's question, I think we heard earlier today that there are about $15 million to $20 million in added costs that we're looking at in addressing all of this. Are these various fees that we're going to cover for all of our civil servants in that $15 million to $20 million range, or are they on top of that?

Ms. Marie Lemay :

Just to be precise, the $15 million to $20 million is for the one-off costs, like the satellite centre, the call centre—

Mr. Kelly McCauley :

Okay, so would this be on top of those?

Ms. Marie Lemay :

This would be on top. Also, we're looking at how we can work differently, either with partner enhancements.... We might have additional costs there, remembering again that the savings that were supposed to occur this year were in the order of $70 million, and in every year from now on.

Mr. Kelly McCauley :

Right. I just wanted to see if it's in that total. Maybe we can just walk back quickly. You mentioned that we did an earlier testing of 16,000 test cases. Did I hear right that before we went live, we did 16,000, but there were some issues involved so we pushed the implementation back? Was that correct?

Ms. Marie Lemay :

Yes. Maybe I'll let Mr. Liddy walk you through it.

Mr. Kelly McCauley :

If it's correct, then what was the date of the testing?

Mr. Gavin Liddy :

On the testing, there was a May 2015 checkpoint, meaning that we would make a decision on whether we would go live in October and December, which were the first implementation dates. At that point in time, we'd been at it for about 70 months. It