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2020 to 2021 Supplementary Estimates (A): Standing Committee on Government Operations and Estimates—June 16, 2020

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Overview of Supplementary Estimates (A)

Context

The 2020 to 2021 Supplementary Estimates (A) were tabled in parliament on June 2, 2020. Items anticipated to attract interest include COVID-19 related procurement funding, funding to continue support for the Government of Canada’s pay system, and investments in the National Capital Commission (NCC).

Funding for COVID-19 procurement

Continued support for the Government of Canada’s pay system

National Capital Commission funding

The National Capital Commission is seeking approval to access $52.4 million:

Background

The Supplementary Estimates adjust the Government of Canada’s in-year expenditure plan as set out in the Main Estimates, usually to account for unforeseen or additional requirements that were not sufficiently developed in time for inclusion in the Main Estimates or for which a source of funds was not yet identified.

The 2020 to 2021 Supplementary Estimates (A) were tabled in Parliament on June 2, 2020.

2020 to 2021 Supplementary Estimates (A) placemat

Parliamentary reporting and supply cycle

April

April to June

July to December

January to March

Process

Highlights

Financial overview

Table 1: Financial overview of Voted appropriations and Statutory appropriations (in millions of dollars)
Item Description Total
Voted appropriations
A Government of Canada’s pay system
To address backlog of pay issues for public servants and stabilize pay for the Government of Canada		 203.5
Total voted appropriations 203.5
Statutory appropriations
B Supplies for the health system—COVID-19
To acquire critical goods and services for a broad range of essential sectors with urgent needs		 500.0
C Employee benefit plans 500.0
Total statutory appropriations 541.6
2020 to 2021 total Supplementary Estimates (A) adjustments table 1 note 1 745.1

Table 1 Notes

Table 1 Note 1

This is the total of the voted and statutory appropriations table combined.

Return to table 1 note 1 referrer

Funding for COVID-19 procurement

Continued support for the Government of Canada’s pay system

[Redacted]

Funding to continue support for the Government of Canada’s pay system

Supplementary Estimates (A): $203.5 million in 2020 to 2021

Table 2: Funding profile (The following table includes total funding per fiscal year (in millions of dollars))
  Fiscal year
2020 to 2021 [Redacted] [Redacted] [Redacted]
Total authorities 203.5 [Redacted] [Redacted] [Redacted]
Notes
  • Funding for 2020 to 2021 sought in this Supplementary Estimates (A) and future years in the Annual Reference Level Update 2021 to 2022
  • Supplementary Estimates of $203.5 million excludes Employee Benefit Plans (EBP), Shared Services Canada (SSC) and accommodations charges. [Redacted]

Summary

Public Services and Procurement Canada (PSPC) is seeking access to $203.5 million (Vote 1—operating expenditures) in 2020 to 2021 [Redacted] to eliminate the backlog of pay issues for public servants and continue delivering and stabilizing pay for the Government of Canada.

Purpose of the funding

Since Phoenix was implemented in 2016, ongoing resourcing levels have been insufficient to address pay issues and PSPC has requested additional funding every year in order to administer pay to public servants.

Resources are needed to eliminate the backlog of outstanding transactions; continue actions to deliver biweekly pay for federal employees; enhance system stability and data integrity; and engage stakeholders in the move towards stabilizing HR-to-Pay.

[Redacted]

Background

Under section 12 of the Department of Public Works and Government Services Act and order in council P.C. 2011-1550, the Minister of Public Services and Procurement is mandated to administer the disbursement of pay to employees of the federal public administration. PSPC administers the Phoenix pay processing system on behalf of the Government of Canada, generating payroll for nearly 400,000 active and inactive (that is, on leave or retired) employees.

[Redacted] the Initiative to fix the pay system, also known as the transformation of pay administration (TPA) initiative. The TPA initiative consisted of 2 components: the consolidation of pay services project (total cost of $118.6 million by project close), which merged the compensation workforce administering employee pay accounts from 46 organizations in a single Public Service Pay Centre in Miramichi, New Brunswick; and the pay modernization project (total cost of $190.7 million by project close), which replaced the government’s 40-year old payroll system and processes with a commercial off-the-shelf pay (COTS) and benefits solution (for example, PeopleSoft). The system, known as Phoenix, was rolled out in 2016 with limited functionalities.

To date, several audits and reviews have demonstrated that there were serious flaws in the planning and implementation of the TPA initiative. The Government of Canada failed to adequately test the system before it went live; underestimated the complexity of pay operations and the system capacity required to process transactions; and underestimated the time and effort that users across the Government of Canada would require to process HR transactions and adapt to the new integrated HR-to-pay systems environment. There were also issues with inadequate functionality and system performance. These issues, along with an inherited backlog of unresolved cases from the previous system, have resulted in a large volume of outstanding HR and pay transactions.

In addition, PSPC was not adequately resourced on an ongoing basis to deliver and stabilize pay. The department initially expected that starting in 2016 to 2017, the TPA initiative would generate annual savings of approximately $70 million that would then be harvested from Pay Centre client departments. After Phoenix was implemented, the government decided not to proceed with recouping these funds, as additional support was required for departments to support employees experiencing pay issues. The department has ongoing funding of around $80M/ year to manage systems and to process pay from the Pay Centre. This is equivalent to approximately 550 full-time equivalents (FTEs) in the Pay Centre and approximately 150 FTEs working to maintain and fix the information technology (IT) system. However, in the current context, more than 2,300 additional FTEs across multiple functions are needed to deliver and stabilize the pay system. [Redacted]

Current status

Funding provided to date has allowed PSPC to improve its capacity, productivity and efficiency in pay administration. One of the most significant projects completed in 2019 to 2020 was the roll-out of the pay pod service delivery model to all Pay Centre departments and agencies. Fully implemented in May 2019, the pay pod model has been successful in many respects, such as managing new cases in the queue; improving performance against service standards, data accuracy and quality; as well as has helping to increase collaboration between the pay pod and the client departments. Further results for HR-to-pay are outlined in recent reports. For example:

In addition, improvements have been made to upstream activities that affect intake into the queue and significant progress has been made on system improvements. Since Phoenix launched in 2016, PSPC has made over 2,500 system changes, fixes and enhancements. This work has helped to improve functionality for clients and added system automations to reduce the need for manual interventions.

[Redacted]

Funding for procurements to meet expanded needs—COVID-19

Supplementary Estimates (A): $500 million in 2020 to 2021

Table 3: Funding profile (in millions of dollars)

Fiscal year

2020 to 2021

Total authorities

500
Notes
  • Funding for 2020 to 2021 sought in this Supplementary Estimates (A)
    • Total authorities is available until September 30, 2020, if payments are required beyond this date, Public Services and Procurement Canada (PSPC) will advise the Treasury Board Secretariat and include the amounts in the next available Supplementary Estimates

Summary

Funding of $500 million (statutory authorities) in 2020 to 2021 to PSPC to expand its procurement scope and purchase supplies without unnecessary delays.

Purpose of the funding

In 2020 to 2021, [Redacted] granted PSPC access to a statutory appropriation under the Public Health Events of National Concern Payments Act.

This funding allows PSPC to be pro-active and aggressively acquire critical goods and services, such as personal protective equipment and health supplies, for a broad range of essential sectors with urgent needs as a result of the COVID-19 pandemic.

This funding will also be used to prepare against future uncertainties relating to COVID-19 by ensuring market availability and establishing an excess of supply, supporting the government’s direction on being “over-prepared”.

PSPC will recover costs from clients when possible and provide twice-monthly updates to the Department of Finance on the procurements made from the fund and any related cost recovery.

Background

On March 11, 2020, following the World Health Organization’s call for countries to take urgent and aggressive action to fight the COVID-19 pandemic, Prime Minister Justin Trudeau established a COVID-19 Response Fund as Canada’s whole-of-government response to the COVID-19 outbreak.

On March 20, 2020, an amendment to the Contracting Policy was approved in order to provide the minister of PSPC with enhanced emergency authorities to procure COVID-19 related goods and services. This included contracting authorities for measures to address the COVID-19 pandemic and procurement activities related to the development and dissemination of a vaccine.

On March 26, 2020, as part of the approved action plan to broaden the federal procurement approach to meet the needs of Canadians during the COVID-19 outbreak, a dedicated source of funds in the amount of $500 million was approved to provide PSPC the flexibility to order additional supplies to mitigate risks and to potentially address orders for an expanded client base, in particular those considered most vulnerable by the current pandemic including but not limited to Canadians in remote locations, Indigenous communities, Northern communities as well as seniors.

On March 30, 2020, approval was received to provide PSPC with the exceptional authority, during the COVID-19 pandemic, to acquire and provide goods and services on behalf of any entity in Canada or elsewhere, including the private sector.

On April 24, 2020, approval was also received to provide PSPC with the authority to transfer, lease or loan public property, such as supplies and equipment, to any government, body or person in Canada or elsewhere in response to the COVID-19 pandemic. The types of supplies and equipment include, but are not limited to:

The approved authorities allow PSPC to address the risks posed by increasingly limited supplies of key goods and services. PSPC will provide assistance to vulnerable sectors and those unable to acquire critical goods to ensure they continue to provide essential services while ensuring the health and safety of their workers and clients against the risks of COVID-19.

PSPC is collaborating with key federal departments such as Public Safety, the Public Health Agency of Canada, Health Canada, and Innovation Science and Economic Development to implement an effective and aggressive procurement strategy to combat the pandemic. PSPC is also working closely with provincial and territorial partners as well as other government departments to identify recipients of scarce resources and ensuring a proper allocation model.

Table 4: Overview of $500 million envelopes
Product and service category Number of contracts Contract value PSPC currently paying but may be covered in the future by another entity Notional agreement In place for reimbursement by other entities
Commitments against the first $500 million envelope
Logistics (accommodation, transportation, warehousing and other related services) 5 $45,557,020 $57,020,000 [Redacted]
Air charter services 5 $120,000,000 N/A [Redacted]
Strategic sourcing support 1 $9,649,125 $5,460,636 [Redacted]
Personal protective equipment catalogue 1 $2,735,795 $2,735,795 N/A
IT services and professional services 1 $529,460,000 $529,460,000 N/A
Subtotal logistic 13 $178,471,400 $8,782,911 $169,688,489
Mobile respiratory care unit 2 $300,000,000 $300,000,000 N/A
Ward beds 1 $449,175,000 $449,175,000 N/A
Nitrile gloves 1 $28,204,800 $28,204,800 $0
Subtotal first $500 million 17 $507,125,375 $337,436,886 $169,688,489
Commitments against the second $500 million envelope (essential services reserve contingency (ESRC))
Cloth face masks 3 $25,554,950 $25,554,950 N/A
N95 masks 1 $25,707,848 $25,707,848 N/A
Thermometers 2 $2,260,000 $2,260,000 N/A
Face shields 1 $3,672,500 $3,672,500 N/A
Surgical masks / Coveralls 1 $28,811,915 $28,811,915 N/A
Subtotal second $500 million (ESRC) 8 $86,007,213 $86,007,213 N/A
Grand total 25 $593,132,588 $423,444,099 $169,688,489
Second $500 million envelope: Pending contracts, and notional commitments—[Redacted]

The second $500 million envelop for the essential services contingency reserve estimate—[Redacted]

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