Additional notes: Standing Committee on Government Operations and Estimates—March 12, 2020

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Phoenix overpayments privacy breach

Context

On February 4, 2020, Public Services and Procurement Canada (PSPC)’s Pay Administration Branch (PAB) distributed, via encrypted email, a personnel overpayment information report to the chief financial officers (CFO) and heads of Human Resources (HR) of 62 government organizations, containing information on 69,087 public servants.

Key messages

• The Government of Canada takes its responsibilities under the Privacy Act very seriously and is fully committed to the protection and security of the personal information under its control
• PSPC acted quickly and followed a systematic approach to immediately contain the breach, report it and launch an internal review
• The recipients of the information were trusted individuals—Chief Financial Officers and Heads of Human Resources. Therefore, we are confident that the risk to affected individuals is very low and there is no evidence that this information was shared outside of the government
• That said, we recognize that this situation may be concerning to affected individuals, so on February 17 we worked with the affected departments to ensure that individuals were notified
• At the same time, work is underway to ensure there is a clear understanding of the cause of this issue and the measures needed prevent reoccurrences

Current status

The internal investigation is ongoing. Most individuals have been notified. All emails were deleted from Shared Services Canada and departmental email servers

Background

Each pay period, PSPC’s Phoenix Operations Centre sends an overpayment report to departments and agencies.

On February 4, a spreadsheet containing the overpayment information of a total of 69,087 public servants was inadvertently sent by encrypted email to 161 chief financial officer (CFO)s and heads of HR in 62 departments.

Instead of containing each department’s information, the spreadsheet contained the information of employees with overpayments from various departments.

Personal information disclosed included the name, addresses, personal identification numbers and overpayment amount. No social insurance numbers or dates of birth were disclosed.

Within hours of the incident, the Phoenix Operations Center requested that recipients delete the email.

Public Services and Procurement Canada’s privacy breach protocol was activated and an internal investigation was launched.

Public Services and Procurement Canada contacted the chief security officers of all 62 departments requesting that all copies of the email be destroyed. Access to information and privacy coordinators of the departments were also contacted to assist their departments in this task.

As of February 28, all departments had confirmed deletion of the emails.

The Office of the Privacy Commissioner and Treasury Board of Canada Secretariat were also notified on February 7.

On February 17, PSPC sought the collaboration of departments and agencies to notify affected individuals within their organizations.

Questions and answers

Question 1: Has the Office of the Privacy Commissioner received complaints? If so, is the Privacy Commissioner investigating?

Answer 1: Yes the Privacy Commissioner has received over 30 complaints and has decided to launch an investigation. PSPC has not received the official notice of investigation. PSPC’s Privacy Management Division is collaborating with the Office of the Privacy Commissioner.

Question 2: Why did PSPC task other departments to notify individuals instead of notifying individuals directly?

Answer 2: PSPC does not have up to date contact information for all government employees and determined that departments were in a better position to assist in ensuring individuals were notified promptly.

Question 3: How many breaches has PSPC reported in the last fiscal year? How many were deemed material? How many were related to Phoenix?

Answer 3: A material privacy breach has the highest risk impact as it involves sensitive personal information; could reasonably be expected to cause serious injury or harm to the individual; and/or involves a large number of affected individuals.

All material privacy breaches were reported to the Office of the Privacy Commissioner and the Treasury Board Secretariat as per policy requirements.

The Phoenix-pay related breaches table summarizes the total number of privacy breaches (which could include mis-mailed letters or misdirected emails) and the total number of material privacy breaches.

It should be noted that the increased incidence of reporting of breaches demonstrates a greater understanding by employees of their privacy obligations and an understanding that transparency around reporting is critical to effectively manage privacy-related incidents.

Question 4: How does PSPC manage breaches of personal information?

Answer 4: PSPC has a robust privacy breach protocol to manage all privacy breaches. The protocol ensures breaches are assessed promptly by enabling the chief privacy officer to convene a breach response team who will oversee the management and response to medium and high risk breaches. The response team promptly determines level of injury and risk, materiality and, as required, process for early notification. PSPC formally investigates all material privacy breaches to ensure lessons are learned and that remedial plans are established as required.

Pest management in federal office facilities

Context

Recently, there have been confirmed reports of the presence of bedbugs in buildings in the Public Services and Procurement Canada (PSPC) inventory which has received significant attention from members of the media, employee unions, and federal employers.

Key messages

• We understand that employees are concerned about the presence of bedbugs in our buildings, and we are taking these concerns very seriously
• When bedbugs are reported, Public Services and Procurement Canada brings in pest management experts to investigate, and if required, conduct a full treatment of the affected area
• My department has engaged an industry expert who confirms that current pest management practices are appropriate, and we will continue to vigorously address all reported cases

If pressed on PSPC actions:

• We are taking this issue very seriously and have been working closely with facility managers in affected departments to address detections immediately
• PSPC has invested approximately $400,000 in bedbug detection, remediation, and monitoring
  • other federal departments have also made investments for similar services
• With respect to bedbugs, it is important to note that all but one detection were in the “very low” range which is defined as less than 20 insects—in most cases, 1 to 5 bugs
• PSPC continues to work closely with landlords and federal departments to mitigate future incidents of pests. Follow up visual inspections have been ongoing and will continue on a weekly basis until further notice

Background

Bedbugs can be unknowingly brought into the workplace on the personal effects of employees or visitors (that is, bags, shoes), and even in mail packages.

Public Services and Procurement Canada is taking this issue very seriously and has been working closely with facility managers in affected departments to address detections immediately.

When bedbugs are reported, pest management experts are engaged to confirm the presence with an initial inspection. Canine inspections are conducted as required and monitoring traps installed. If bedbugs are confirmed, a full treatment of the affected area is completed. Elements of the treatment could include vacuuming, steaming and the application of a treatment spray. When possible, treatments are completed afterhours to minimize the impact on employees. Monitoring programs are put in place as it is not uncommon to require follow up treatments.

With the increase in reports of bedbugs, PSPC is implementing a risk-based approach to proactive monitoring which includes high traffic areas.

Various communications have been distributed across government to further enhance the prevention, detection and management of bedbugs in the workplace including additional instructions to the cleaning contractor community to reinforce the actions to take if they notice pests or their remnants.

Consultation also took place with federal public sector unions.

To support government wide communication and knowledge sharing, a PSPC website on Control of Bedbugs in Federal Facilities was published, complete with infographics, helpful links, and videos on PSPC pest management methods.

Buildings with bedbug presence detected

As of February 12, 2020, in the past 6 months, 51 locations have been investigated, treated for a confirmed presence, and are being monitored. Of these 51, the level of detection was:

• very low (1 to -20 bugs) 50 buildings
• moderate (101 to 1000 bugs) 1 building

Minister and deputy minister refits

Context

On February 10, 2020, CBC published an article entitled “Renovations to cabinet ministers' offices cost $1.6 million over past 4 years”. According to CBC, analysis of answers to parliamentary order papers shows that in 2019, the government spent $1.6 million on furniture, renovations and artwork for cabinet ministers’ offices.

Key messages

• The government is committed to efficient, rigorous oversight of all expenses, including those related to real property
• The government is also responsible for providing work accommodations that meet occupational health and safety requirements for all staff
• The repairs undertaken addressed wear and tear of aging ministerial accommodations for 13 offices in the National Capital Area
  • three offices for new ministers were also refurbished
• Expenditures relating to ministers’ departmental offices are subject to rigorous Treasury Board policies
  • together, these policies ensure that assets are managed in a sustainable and financially responsible manner that support the cost-effective and efficient delivery of government
• These expenditures are transparently provided each year in the Public Accounts of Canada, so that Canadians are able to hold the government to fully account for the cost implications of real property decisions

Background

On February 10, 2020, CBC published an article entitled “Renovations to cabinet ministers' offices cost $1.6 million over past 4 years”. According to CBC, analysis of answers to parliamentary order papers shows that in 2019, the government spent $1.6 million on furniture, renovations and artwork for cabinet ministers’ offices.

The article cited expenditures of $364,928 on costs ranging from $68 for towels for Finance Minister Bill Morneau's office to $82,859 to set up an office for the minister of Fisheries, Oceans, and the Canadian Coast Guard and her staff.

The Conservative Party’s Ethics Critic, Michel Barrett, and New Democratic Party House Leader, Peter Julian, are both cited in the online article. The article also mentions that figures from former governments are not available since opposition members of parliament (MPs) did not pose similar questions at that time.

A departmental spokesperson from Public Services and Procurement Canada (PSPC) is quoted as saying “These projects are done following Treasury Board policies and are modest, cost-effective and allow the minister and their staff to work in functioning offices in the 21st century. Each respective department is responsible for determining its priorities and for the associated costs.”

Public Services and Procurement Canada, in consultation with the departmental facilities management group, is responsible for initial fit-up of office space based on functional and operational requirements and applicable cost guidelines. Changes to existing offices (during a minister's tenure or on appointment of a new minister) are funded by the department, unless the minister seeks furnishings over and above the departmental standard; if so, these are then charged to the minister’s office budget.

The Treasury Board Policy on the Management of Real Property and the Treasury Board Policy on Management of Materiel apply to departmental ministers’ offices (not Parliament Hill offices). These policy instruments seek to ensure real property and materiel are managed in a sustainable and financially responsible manner that support the cost-effective and efficient delivery of government programs. They do not contain any specific standards for departmental ministers’ offices, but require that real property and materiel assets be managed in a manner that considers full life-cycle costs and benefits, demonstrates sound management practices and is fair, transparent and financially responsible. 

The Treasury Board policies for ministers’ offices consolidates the various financial, personnel, and administrative rules and regulations that govern expenses incurred by ministers and their exempt staff when they perform duties directly related to their responsibilities. Ministers and ministers of state are responsible and accountable for applying the policies for ministers' offices, including expenses.

As per the policies, office requirements of the minister in the department's headquarters are normally accommodated within the space allocated to the department. The minister's requirements are normally coordinated by the deputy minister.

Public Services and Procurement Canada response to Order Paper question-86 tabled on January 27 2020

Question: Conservative Party of Canada (CPC) Chris Lewis (Essex)—With regard to renovation, redesign and refurnishing of ministers’ or deputy ministers’ offices since January 1, 2019: (a) what is the total cost of any spending on renovating, redesigning, and refurnishing for each ministerial office, broken down by (i) total cost, (ii) moving services, (iii) renovating services, (iv) painting, (v) flooring, (vi) furniture, (vii) appliances, (viii) art installation, (ix) all other expenditures; and (b) what is the total cost of any spending on renovating, redesigning, and refurnishing for each deputy minister’s office, broken down by (i) total cost, (ii) moving services, (iii) renovating services, (iv) painting, (v) flooring, (vi) furniture, (vii) appliances, (viii) art installation, (ix) all other expenditures?

Response: PSPC led an initiative to identify ministerial offices across government in need of refurbishment. This initiative addressed spaces that required modest repairs such as paint and carpet replacement. There were 13 offices in the National Capital Area and 3 new offices for potential new ministers that were refurbished during the recess period. Costs related to changes to existing ministers offices were funded by the client department.

With regard to renovation, redesign and refurnishing of the PSPC Minister’s Office between January 1, 2019 and December 6, 2019, see attached Annex 1. All decisions pertaining to refurbishment expenditures were initiated by the department and consistent with PSPC’s cross-government initiative.

With regard to renovation, redesign and refurnishing of the PSPC deputy minister’s offices between January 1, 2019 and December 6, 2019, see attached Annex 2.

Details of annex 2: The amounts reported were specifically for renovation, redesign and refurnishing. The work done in the PSPC Minister’s Office was consistent with a PSPC led initiative to refurbish ministers’ offices across government. Real Property Services (RPS), conducted an inventory to identify ministers’ offices which were in need of refurbishment. The amount to refurbish the Minister of PSPC’s office was $39,779.96 and the Deputy Minister’s Office was $37,147.30.

Use of national security exceptions

Context

National security exceptions (NSE) provided for in trade agreements allow Canada to take whatever actions it considers necessary to protect its national security interests. The purpose of the NSE is to ensure that parties to the agreements are not required to compromise their national security interests through application of the trade agreements. For many procurements, it is difficult to isolate national security concerns. As such, Canada will normally remove a procurement entirely from the obligations of the relevant trade agreements.

Key messages

• The government is committed to fair, open and transparent procurement that deliver the best value for Canadians
• The NSE provided for in trade agreements allow Canada to take the actions considered necessary to protect its national security
• Invoking a NSE does not affect the obligation to comply with the Government’s Contract Regulations with respect to soliciting bids

Background

Signatories to the trade agreements made a conscious decision to ensure considerable discretion to comply in the context of their own domestic security requirements. Recognizing it is very difficult to predict how threats to national security will evolve and change, the trade agreements give signatories the flexibility to invoke NSE when necessary.

NSE should be considered when 1 or more of the following may be affected by the requirement:

• economic security
• environmental security
• human security
• sovereignty
• national defence and military threat
• protection of intelligence

Departments are encouraged to reflect NSE accountabilities in their processes and systems.

The Canadian International Trade Tribunal found that “the most senior level of substantive policy formulation and advice to the department on all supply operations activities…” has the authority to invoke the use of the NSE. When Public Services and Procurement Canada acts as the contracting authority, a NSE can only be invoked by either the assistant deputy minister of the Defence and Marine Procurement or procurement branches. Additionally, the Acquisitions Program implements a rigorous NSE review process to ensure the rationale provided is satisfactory and consistent with the Treasury Board Secretariat guidelines for invoking national security exceptions.

Procurements under national security exception

Given the common security concerns of procurements related to the Government of Canada’s information technology infrastructure systems and services, it is more efficient to invoke the NSE for a class of goods and services, rather than to invoke on a case-by-case basis for individual procurements.

However, invoking the NSE does not dictate any specific:

• procurement approach or strategy
• security requirement (meaning, for example, it does not automatically dictate the requirement to be Secret)
• acceleration of the procurement process
• security clearance requirement
• limitation of competition
• pool of available suppliers (for example, Canadian only)

A NSE invocation does not mean that the procurement will necessarily be sole-sourced or fast-tracked. Typically, a competitive process is held amongst a group of qualified suppliers in order to procure based on best value during a competitive procurement process.

Jurisprudence regarding the national security exception

For nearly 20 years, jurisprudence from the Canadian International Trade Tribunal and the courts consistently indicated that the tribunal does not have the jurisdiction to conduct an inquiry into procurements that are subject to the national security exception, in which case it is invoked for all purposes. However, this changed in 2016 and the Canadian International Trade Tribunal has now conducted a number of full procurement inquiries even though the national security exception had been invoked for all purposes:

• A complaint by Hewlett-Packard regarding the procurement for a supercomputer used by Environment and Climate Change Canada to process meteorological data used, among other things, to provide strategic support to the Department of National Defence missions worldwide, to allow Health Canada to assess the transport and dispersion of nuclear and other hazardous materials released into the atmosphere, and to provide severe weather warnings to air traffic controllers and other transportation officials
• A complaint by MD Charlton regarding the procurement of night-vision goggles to be used by the Royal Canadian Mounted Police
• A complaint by Harris Corporation, regarding a second attempt to procure the night-vision goggles required by the Royal Canadian Mounted Police

Unfortunately, because the Tribunal had found that Hewlett-Packard’s complaint was not valid, the Federal Court of Appeal considered the question of jurisdiction to be moot and dismissed Shared Services Canada’s application for judicial review.

The Federal Court of Appeal did not decide whether the Canadian International Trade Tribunal has the jurisdiction to conduct full inquiries into national security procurements. This means that, while this issue can be addressed in a future case, for now the law remains uncertain.

As a result, companies bidding on procurements under the national security exception can always seek legal recourse either through the federal or provincial superior courts.

Surplus federal property disposal for affordable housing

Context

The federal lands initiative (FLI) makes suitable properties available to selected proponents at a discounted cost so that they can provide affordable housing that is energy efficient, accessible and socially inclusive.

In accordance with its National Office Portfolio Plan, Public Services and Procurement Canada (PSPC) will dispose of underperforming and underutilized properties. In doing so, these properties will be made available for the FLI as a contribution to enhancing the affordable housing stock.

Key messages

• The government is committed to increasing the supply of affordable housing, including by making surplus federal properties available through the federal lands initiative
• The Canadian Mortgage and Housing Corporation (CMHC) launched this initiative in 2018 with a target of 4,000 new or renovated housing units that would be energy efficient, accessible and socially inclusive
• The federal lands initiative will facilitate subsidies of up to $200 million for the transfer of federal lands to affordable housing providers
• Public Services and Procurement Canada will continue to support and encourage the development of sustainable, accessible, mixed-income, mixed-use developments and communities

Background

The FLI was launched in 2018 with a target of making 4,000 suitable properties available to selected proponents over a ten year period.

Over the next 10 years, the FLI will facilitate subsidies of up to $200 million for the transfer of federal lands to housing providers to encourage the development of sustainable, accessible, mixed-income, mixed-use developments and communities. Surplus federal properties across Canada will be made available through the new program to partners that repurpose them to provide housing at less-than-market rates. The partners will receive the federal properties at a value somewhere between market value and $1. The difference between market value and transfer value represents the government’s contribution towards the provision of affordable housing.

Each housing project must meet the following NHS requirements:

• affordability: 30% of units must have rents at less than 80% of local median market rents
• energy efficiency: a minimum 25% reduction in energy consumption and greenhouse gas emissions compared to either national building codes or past performance
• accessibility: 20% of units must meet accessibility standards

After the transfer of a property to a housing provider, a restrictive covenant will be placed against the property for a fixed timeframe of at least 25 years to ensure compliance with these requirements by the private sector partner.

The FLI is being led by the Canada Mortgage and Housing Corporation (CMHC) and is a component of the government’s larger National Housing Strategy. Along with CMHC, partners in the FLI include PSPC, Canada Lands Company Limited, and Employment and Social Development Canada. Canada Mortgage and Housing Corporation is responsible for managing the program’s budget, selecting the proponents, and reporting on performance.

Public Services and Procurement Canada’s role is to assess its portfolio to identify properties that are surplus to its requirements (usually those assets that are underperforming and/or underutilized together with those sites that have redevelopment potential). PSPC also provides disposal related services that facilitates the transfer of the property to the affordable housing proponents.

Delay in defence projects

Key messages

Defence procurement projects can be large, complex, and require assessments and reviews throughout the procurement process.

Over two thirds of projects under Canada’s defence policy: Strong, Secure, Engaged are in the implementation phase, near completion, or completed.

For example National Defence has provided the Canadian Army with:

• modern medium range radar systems, one of which is currently being prepared for deployment in Alaska
• medium support vehicle systems which are currently deployed in Latvia

Additionally, the Royal Canadian Navy’s Halifax-Class Frigates have been modernized and deployed overseas.

National Defence will continue to work with other departments and Canadian industry to deliver on major projects.

Phoenix system and process innovation

Commitment

Since the launch of Phoenix 4 years ago, Public Services and Procurement Canada (PSPC) implemented a series of measures focused on stabilizing the pay system. These include increasing the compensation workforce, providing employees with greater support, introducing the pay pods model, increased automation of transactions and implementing technical fixes that have improved payroll processing.

We are working closely with all stakeholders, including employees, federal public sector unions and the private sector for innovative solutions to accelerate pay stabilization. The Government of Canada (GC) is committed to helping rebuild public servants’ confidence in the integrity of the government pay system.

Mass retro

A new methodology automated the mass retroactive payments generated by the 2018 round of collective agreements.

With the new payment method, raises are calculated, entered into Phoenix and lump-sum retroactive payments are issued to employees before the negotiated 180-day deadlines.

What’s significant is that Phoenix can process these retroactive payments with little or no manual intervention. We expect that only 10% of the 2018 round of collective agreements transactions will need manual intervention, resulting in a reduction of hundreds of thousands of manual transaction. In comparison, the 2014 round swamped the system and left compensation advisors manually processing and validating more than 70% of collective agreements transactions.

This new methodology gives more breathing room for the Pay Centre’s compensation advisers, who can then focus on current intake and the backlog.

This innovation was a pay employee initiative. They used their experience to identify ways to fix the mass retro process and maximize automation. The result is faster turn-around time for employees to receive their hard earned money. It’s another great example of innovation in action.

MyGCPay

MyGCPay is a new web application developed by PSPC to help rebuild federal government employees’ confidence in the integrity of their pay. MyGCPay provides employees with a centralized and simplified view of their pay and benefits. It helps employees identify pay issues earlier and allows them to monitor their open cases with more detail.

The application allows employees to:

• view the most current information about their pay and benefits
• print important documents such as, tax slips and proof of employment
• identify pay issues earlier and, if an employee’s current or former department was served by the Pay Centre, monitor any open enquiries and cases in detail
• access historical information, pay cheques, benefits plans, enquiries, and Pay Centre cases dating back to 2016

MyGCPay was created by employees for employees. Designed with the user in mind, the application was developed using a 5-phase approach: prototype, public opinion research, user-testing, pilot and implementation.

It is an example of innovation in action, where an idea was brought to fruition by using readily available open-source software. This helped keep costs at a minimum and deliver results to public servants. This application is available to Government of Canada employees in all departments and agencies.

Robotic process automation

Public Services and Procurement Canada launched a procurement process in August 2018 to engage the private sector in innovative solutions to help stabilize the pay system.

As part of this process a contract extension was awarded to KPMG in November 2019 to automate manual pay processes.

The use of robotic automation services to process manual transactions, such as confirming accuracy and completeness of data entry, will allow compensation staff at the Public Service Pay Centre to focus on more complex cases.

Public Services and Procurement Canada and IBM have also been working collaboratively to introduce robotic automation for payroll processing activities. With currently 8 “bots” in use, the results of this project include 120 hours gained and 16 processes improved.

Further innovations

Multiple technical changes to stabilize the system have been implemented, including over 2,500 systems fixes and enhancements. They have improved payroll processing, such as increased automation of transactions.

Pay Centre employees are proactively developing and improving in-house tools to improve efficiency and accuracy in processing their work, including a letter wizard, a severance pay calculator, and a client analysis dashboard (CAD) tool that has reduced the need for manual calculations and the time required to research a pay file.

The innovation garage is the agile and iterative approach for PSPC and IBM to collaborate on developing and delivering solutions according to human resources (HR)-to-pay ecosystem. The first initiative from the innovation garage is expected in 2020.

Further work is underway regarding retroactive payments and we are working on initiatives to improve how the system handles late transactions (for example, actings).

Partnerships with the private sector are ongoing to improve outcomes through innovation.

Public Services and Procurement Canada is working departments and agencies in improving the HR data that is submitted to Phoenix to make processing easier and more automated.

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Date modified:

2023-05-10