June 14, 2018

The Right Honourable Justin Trudeau, P.C., M.P. *

Prime Minister of Canada
Langevin Block
80 Wellington Street
Ottawa, Ontario
K1A 0A2

Dear Prime Minister,

I am writing to formally request that your government, pursuant to the Inquiries Act, call a
public inquiry regarding the federal public service Transformation of Pay Administration
Initiative, which I will refer to in this letter as “Phoenix” for the sake of brevity.

As you are aware, independent reports by the firm Goss Gilroy Inc. and the Office of the
Auditor General of Canada (OAG), respectively, have uncovered disturbing details about
both the development and the implementation of Phoenix. In fact, many of the concerns
previously expressed by the Public Service Alliance of Canada (PSAC) and the other unions
representing federal public service workers were proven correct by the evidence found by
both the OAG and Goss Gilroy.

In addition to these reports, further evidence has come to light through documents previously
kept hidden from the public and the unions. This includes the 2009 business case for
Phoenix, which was made public by the media in the fall of 2017.

From beginning to end this project was, to use the words of the Auditor General, an
“incomprehensible failure”. We cannot let such a disaster repeat itself. Both the Goss Gilroy
report and the OAG reports clearly advise that the problems that have led to the Phoenix
debacle have not been resolved. Although both reports point to significant problems, neither
were tasked with making recommendations that address those problems. As the Auditor
General said himself, in order to prevent this type of failure from occurring again, there is a
need for “changes that go beyond the recommendations” made in the OAG report.
Below I outline some outstanding questions and issues that must be addressed. However,
these are not suggested limits to the scope of the inquiry, but rather just some of the reasons
why such an undertaking is required.

Lack of meaningful consultation

As mentioned above, neither the unions nor many other stakeholders were ever provided
the 2009 business case on pay transformation. PSAC requested a copy at the first meeting
of the TPAUMC (Transformation of Pay Administration Initiative Union Management
Committee) in 2012, but the department now known as Public Services and Procurement
Canada refused to provide it. When we finally saw the business case years later, the pitfalls
in it were startling.

For example, it asserts without one iota of evidence that, “The initiative will improve
performance and efficiency, significantly reduce costs and position outsourcing as an option
worthy of serious consideration in the future.” It also identifies ten risks – though oddly not
one of them being that people might not get paid. Even though these risks included
readiness and privacy, it fails to address how to mitigate those risks. The impetus for
continuing with the project was based on evidence that supported its continuation and not
whether it was addressing real problems or if many of its goals were either achievable or
advantageous.

This was a key document; one that convinced Treasury Board and the Cabinet to approve
the initiative. However, had PSAC been given the business case when we asked for it in
2012, even without the benefit of hindsight, we would have raised our concerns with the
assumptions, gaps and lack of mitigation strategies.

This is only one example of the failure of the government to engage in real consultation with
the federal public service unions. Real consultation, as opposed to vapid lip service, is an
important risk management strategy for government change initiatives. Moreover, the
employer is still making important decisions about Phoenix sustainability without consulting
in advance with the unions. As the OAG and Goss Gilroy reports clearly indicate, the cultural
and systemic problems that led to Phoenix still exist.

Accountability

In a project this large, and a failure this epic, there are many candidates for culpability. The
reality is, no single person is responsible. That being said, only by following the lines of
accountability will we be able to learn from this disaster and prevent it from recurring. We
need to know who made the decisions, as well as how and why these decisions were made.
While the OAG’s second report does some of this, it was not exhaustive. For example, as
stated in the report, “We did not examine events leading to the centralization of pay advisors
or the events after Phoenix was implemented.” The design of the centralization process is a
huge part of the flaw, including the dismantling of all existing capacity before the new
capacity was fully in place and tested.

Similarly, at some point in the project it was determined that 550 staff in Miramichi, plus a
new computer program, could do the work of 1200 staff and the old system – but how this
conclusion was reached remains a mystery.

More importantly, systemic problems about the roles of the senior bureaucracy and their
relationship with elected members, similar to those raised by the Gomery and Tait reports
and others, are pointed to but not addressed. Phoenix is a consequence of a long-standing
problem of accountability with respect to the public interest, that needs to be addressed in
relation to why no one with authority said no to Phoenix.
In the interest of preventing future, government-wide failures, it is necessary to question
what responsibility the various government departments, agencies and organizations have
to their employees. The failure of departments to be ready was a massive cross-
governmental failure, which took place in part because the departments actively participated
in the dismantling of their internal compensation capacity.

Phoenix has also exposed an evolution to complete abandonment by Treasury Board in its
role in enforcement and directing departments.

Cultural change needed

There is an absolute requirement to find a way to expose and overturn this kind of damaging
culture in the federal public service that both the OAG and Goss Gilroy reports point to.
This includes the organizational culture at Public Services and Procurement Canada that
led dozens of people to participate in moving ahead on a project that was so flawed. It also
includes the failure – from conception, to implementation, and beyond – to engage with and
listen to the experience of the front-line workers in the compensation field.

We know this culture hasn’t changed. We continue to see it daily in our efforts to work with
the government to mitigate and resolve pay problems. We also know it won’t change without
concerted effort.

Public hearings

The reports by the OAG and Goss Gilroy have provided great insight to the Phoenix debacle.
However, by the very nature of how these reports are prepared, we only see the end result.
A public inquiry, on the other hand, would provide a public forum for witness testimony and
evidence. Most importantly, this would give those most affected by Phoenix, the federal
public service workers themselves, a chance to tell their own stories.

I thank you for your consideration of my request and I look forward to hearing from you.

Yours sincerely,

Chris Aylward
National President

c.c. The Honourable Scott Brison, President of the Treasury Board

The Honourable Carla Qualtrough, Minister of Public Services and Procurement
The Honourable Ralph Goodale, Minister of Public Safety and Emergency
Preparedness