2020 to 2021 Supplementary Estimates (A): Standing Committee on Government Operations and Estimates—November 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
- Funding of $500 million was provided to Public Services and Procurement Canada (PSPC) to meet expected needs related to the COVID-19 pandemic by expanding its procurement scope and to purchase supplies without unnecessary delays
- This funding will allow 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
Continued support for the Government of Canada’s pay system
- PSPC is seeking access to $203.5 million in voted appropriations in 2020 to 2021 [Redacted] to continue to eliminate the backlog of pay issues for public servants and continue delivering and stabilizing pay for the Government of Canada
- The Government of Canada is committed to supporting employees and resolving public service pay issues as quickly as possible
- This new funding will allow ongoing progress to eliminate the backlog and stabilize the pay system. To do so, we will:
- sustain employee capacity
- increase our processing rate
- increase the automation of as many transactions as possible through system enhancements
- Since the launch of Phoenix, PSPC implemented a series of measures focused on stabilizing the pay system. These include increasing the compensation workforce, providing employees with greater support through our Client Contact Centre, introducing the pay pods model, and implementing technical fixes that have improved payroll processing, such as increased automation of transactions
- As a result, over the past 2 years the Pay Centre's backlog of transactions with financial implications has been reduced by more than half
- We have a series of changes planned to further adapt the pay system to the complex needs of the public service
- In addition to efforts underway, we are working closely with all stakeholders, including experts, federal public sector unions and the private sector for innovative solutions to accelerate pay stabilization
- We continue to regularly share information on progress with employees and Canadians through various platforms and tools
National Capital Commission funding
The National Capital Commission is seeking approval to access $52.4 million:
- this investment in support of critical repair and maintenance work will assist the NCC in ensuring that major infrastructure assets remain safe, resilient and enjoyable for current and future generations of residents and visitors to the National Capital Region
- examples of major projects that will be completed with these funds include:
- Portage and Champlain Bridge maintenance and rehabilitation
- Flooding damage repairs
- park rehabilitation (Nepean Point; Jacques Cartier Park, etc.)
- deferred maintenance of rental properties
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.
Supplementary Estimates (A) placemat
Parliamentary reporting and supply cycle
April
- Beginning of fiscal year
April to June
- Tabling of spring Supplementary Estimates (SE) for 2020 to 2021
- Approval of 2nd interim supply for 2020 to 2021 Main Estimates
- Approval of spring SE supply bill for 2020 to 2021
July to December
- Approval of 2020 to 2021 Main Estimates (full supply)
- Tabling of 2019 to 2020 Public Accounts
- Tabling of fall SE for 2020 to 2021
- Tabling of 2019 to 2020 Departmental Results Report
- Budget 2020 presentation
- Economic and fiscal update for 2020
January to March
- Tabling of last SE for 2020 to 2021
- Tabling of 2020 to 2021 Main Estimates
- Tabling of 2020 to 2021 Departmental Plan
- Budget 2021 presentation
- Approval of last SE supply bill for 2020 to 2021
- Approval of interim supply of 2020 to 2021 Main Estimates
Process
- Supplementary Estimates seeks additional funding for spending requirements that are incremental to, or not developed in time for inclusion in, the Main Estimates presented at the beginning of the fiscal year
- Considering the circumstances created by the COVID-19 pandemic, parliament brought some changes to the estimates process. For the current fiscal year, the Committee of the Whole will be reviewing and voting on the Supplementary Estimates (A) as well as on a second interim supply for Main Estimates
- Non-urgent organizational requirements have been deferred to future estimates, except where an organization has an anticipated cash pressure in advance of supply for the fall 2020 to 2021 Supplementary Estimates in December
- The items in the 2020 to 2021 Supplementary Estimates (A) include funding for the Government of Canada`s pay system as well as funding for the procurement of supplies relating to the COVID-19 pandemic
Highlights
- Supplementary Estimates (A) were tabled on June 2, 2020. The total funding sought by Public Services and Procurement Canada (PSPC) in the Supplementary Estimates (A) for 2020 to 2021 is $745.1 million as detailed in the Financial Overview
- This will increase PSPC’s 2020 to 2021 in-year net budget from $4.0 billion to $4.8 billion
- PSPC’s 2020 to 2021 gross budget will increase from $7.8 billion to $8.5 billion
- With the funding received in Supplementary Estimates (A), PSPC will have its funding required to continue support for the Government of Canada’s pay system and to expand its procurement scope and purchase supplies to meet urgent needs due to the COVID-19 pandemic
| 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 | 41.6 |
| Total statutory appropriations | 541.6 | |
| 2020 to 2021 total Supplementary Estimates (A) adjustments | 745.1 | |
Funding for COVID-19 procurement
- Funding of $500 million was provided to PSPC to meet expected needs related to the COVID-19 pandemic by expanding its procurement scope and to purchase supplies without unnecessary delays
- This funding will allow 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
Continued support for the Government of Canada’s pay system
- PSPC is seeking access to $203.5 million in voted appropriations in 2020 to 2021 [Redacted] to continue to eliminate the backlog of pay issues for public servants and continue delivering and stabilizing pay for the Government of Canada
- The Government of Canada is committed to supporting employees and resolving public service pay issues as quickly as possible
- To continue progress on this front, PSPC sought additional funding to continue efforts to eliminate the backlog of pay issues for public servants, maintain measures to deliver pay and support employees, and stabilize pay for the Government of Canada
- This new funding will primarily help to eliminate the backlog and to stabilize the pay system. To do so, PSPC will:
- sustain employee capacity
- increase its processing rate
- increase the automation of as many transactions as possible through system enhancements
[Redacted]
Funding to continue support for the Government of Canada’s pay system
Supplementary Estimates (A): $203.5 million in 2020 to 2021
The following table includes total funding per fiscal year.
| 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) [Redacted] in 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 human resources (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 (such as, 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:
- Pay Centre queue decreased by 53% from January 2018 to September 30, 2020, and now stands at 296,000 (excluding collective agreement implementation cases)
- over the same period of time, the backlog of transactions with financial implications has decreased by 68%, and now stands at 124,000
- the queue of 2014 collective agreement implementation cases as of September 30, 2020 has decreased by 88% since September 30, 2019
- PSPC has met service standards 71% of the time on average so far this year, compared to a 57% average over 2018 to 2019
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
| 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:
- personal protective equipment (for example, masks, gloves and gowns)
- medical equipment (for example, ventilators, hospital beds)
- health supplies (for example, medication, sanitizers, wipes)
- temporary shelters and emergency mobile hospital units
- other critical supplies (for example, food, food protection, components to create critical supplies)
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.
| 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 | [Redacted] |
| Air charter services | 5 | $120,000,000 | $0 | [Redacted] |
| Strategic sourcing support | 1 | $9,649,125 | $5,460,636 | [Redacted] |
| Personal protective equipment catalogue | 1 | $2,735,795 | $2,735,795 | $0 |
| IT services and professional services | 1 | $529,460 | $529,460 | $0 |
| Subtotal logistic | 13 | $178,471,400 | $8,782,911 | $169,688,489 |
| Mobile respiratory care unit | 2 | $300,000,000 | $300,000,000 | $0 |
| Ward beds | 1 | $449,175 | $449,175 | $0 |
| 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 | $0 |
| N95 masks | 1 | $25,707,848 | $25,707,848 | $0 |
| Thermometers | 2 | $2,260,000 | $2,260,000 | $0 |
| Face shields | 1 | $3,672,500 | $3,672,500 | $0 |
| Surgical masks / Coveralls | 1 | $28,811,915 | $28,811,915 | $0 |
| Subtotal second $500 million (ESRC) | 8 | $86,007,213 | $86,007,213 | $0 |
| 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]
- logistics/inventory management/cost recovery: [Redacted]
- request for proposal (RFP) cloth masks: [Redacted]
- 3 RFPs to procure for:
- 5 million face shields (domestic production): [Redacted]
- 25 million disposable face masks: [Redacted]
- 25 million disposable face masks (Indigenous businesses) : [Redacted]
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