It’s been clear for some time that the federal government’s botched payroll-system upgrade, dubbed Phoenix, is a fiasco of operatic proportions. Auditor-General Michael Ferguson’s report on the disaster, released this week, has now shed light on how this came to be.
The bottom line, in Mr. Ferguson’s opinion, is that Ottawa suffers from “pervasive cultural problems” that “stand in the way of achieving truly successful results for people.”
That is a damning accusation. Mr. Ferguson’s words conjure the image of a dysfunctional bureaucracy in which public service employees are unable to work in the best interests of Canadians.
Phoenix is certainly an example of just such a dysfunction. Mr. Ferguson calls it an “incomprehensible failure”; in other words, there was no inherent reason for it to go so wrong. To screw it up, you actually had to work at it.
Launched by the Conservative government of Stephen Harper in 2009, the goal was to spend $310-million to modernize a 40-year-old system responsible for paying 290,000 people across 101 departments and agencies. The Tories said the upgrade would reduce payroll staff by 1,200 people and save $70-million a year once it went into service in 2016.
Instead, it was a train wreck from Day 1. By last July, one out two federal paycheques had errors on them, and the system was faced with 500,000 requests for back wages. The cost to taxpayers since has ballooned to $1-billion; some federal employees are going unpaid and struggling to get by.
According to Mr. Ferguson, the problems arose because the project was centralized in the hands of just three executives at Public Services and Procurement Canada. The trio – so far unidentified – rushed the system out the door in order to meet deadline and budget targets set by the government.
In doing so, they neglected to fully test the system, ignored those tests that came back showing problems, eliminated key functions (such as the ability to handle back pay), failed to protect the system against data breaches, and didn’t bother to have a contingency plan in place.
All this happened with zero meaningful oversight. No one – no deputy minister, minister, cabinet committee or external consultant – supervised or otherwise assessed their work.
That meant that, when it came time to report to the deputy minister of Public Services and Procurement about the launch of the project, the three executives were able to pretend everything was fine. At a fateful meeting on Feb. 18, 2016, they didn’t mention any of the problems they knew about. And the deputy minister didn’t follow up with independent advice, because there was essentially none to be had.
The incompetence of the three executives, and their failure to disclose the serious problems they were aware of, are firing offences. The government says “measures” have been taken and that the three no longer work in payroll.
That’s small comfort. But the real issue, at least according to Mr. Ferguson, is not so much the trio’s performance as it is why they felt compelled to act the way they did.
The lack of oversight was certainly a factor. But so too may have been a politicized workplace that made it difficult for public servants to deliver bad news to their bosses.
In 2015, then-Parliamentary Budget Officer Kevin Page issued a report warning about the increasing politicization of the senior ranks of Canada’s public service.
It was one of many similar warnings against the centralization of power in the Privy Council and Prime Minister’s Office at the expense of career policy experts. It is telling that, over the seven years that Phoenix was developed, three different people served as deputy minister of Public Services and Procurement Canada.
Mr. Ferguson is over-dramatic when he invokes a culture unable of achieving “truly successful results.” Governments at all levels, and the people who work in them, routinely accomplish the task of keeping this country running.
But the Phoenix case is a quintessential example of a government project going off the rails. It would be helpful to have a deeper understanding of what happened: of why the department cycled through so many deputy ministers, what kind of pressure was coming from the PMO, who the three executives were and, above all, why they behaved as they did.
Canadians have the right to know what happened when things go as badly as the Phoenix project did. Mr. Ferguson has exposed the mechanics of that failure, but not the forces at play. A public inquiry could bring that out.