2020 to 2021 Supplementary Estimates (C): Standing Committee on Government Operations and Estimates—March 24, 2021

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Public Services and Procurement Canada 2020 to 2021 Supplementary Estimates (C) overview

Public Services and Procurement Canada (PSPC) is seeking a net increase of $23.2 million through Supplementary Estimates (C), increasing its available approved funding from $5.66 billion to $5.68 billion net of revenues.

Voted appropriations: $403.8 million increase

Supplies for the health system: COVID-19

$380.0 million in voted appropriations for payments to provide supplies for the health system to facilitate the procurement of critical goods and services including personal protective equipment (PPE) for the benefit of Canadians, such as those in essential services sectors.

Statutory authorities granted under the Public Health Events of National Concern Payment Act (PHENCPA) was repealed on December 31, 2020. PSPC is therefore seeking to convert $380.0 million of unused statutory funding into voted appropriation in order to continue activities related to the COVID-19 response, including the procurement of additional mobile health units (MHUs), after the expiry of the PHENCPA.

Purpose of funding:

Accommodation costs related to pension administration

$9.2 million in voted appropriations for accommodation costs for employees who provide pension services relating to the public service, Canadian Forces, Royal Canadian Mounted Police and Reserve Force pension plans.

Purpose of funding:

Emergency procurement response: COVID-19

$8.2 million in voted appropriations to improve the Government of Canada’s procurement processes (COVID-19) to support the delivery of PSPC’s emergency COVID-19 procurement response without reducing the service levels on other critical procurements that support government operations.

Purpose of funding:

Pension system data integrity

$6.1 million in voted appropriations for the administration and data integrity of the Public Service Pension Plan to continue maintaining data integrity within the Government of Canada’s pension system.

Purpose of funding:

Anti-money laundering and anti-terrorist financing regime

$0.4 million in voted appropriations to strengthen Canada’s anti-money laundering and anti-terrorist financing (AMLATF) regime to establish a dedicated team of forensic accountants to support Canada’s AMLATF regime, its partners and law enforcement agencies in fighting money laundering and terrorist financing in Canada.

Purpose of funding:

Statutory appropriations: $376.4 million net decrease

Supplies for the health system: COVID-19

($380.0 million) of statutory appropriations converted into voted appropriation for payments to provide supplies for the health system to facilitate the procurement of critical goods and services including PPE for the benefit of Canadians, such as those in essential services sectors.

Statutory authorities granted under the Public Health Events of National Concern Payment Act (PHENCPA) was repealed on December 31, 2020. PSPC is therefore seeking to convert $380.0 million of unused statutory funding into voted appropriation in order to continue activities related to the COVID-19 response, including the procurement of additional MHUs, after the expiry of the PHENCPA.

Purpose of funding:

Employee benefit plans

$3.6 million in statutory appropriations for contribution to the employee benefit plans.

Transfers between government departments: $4.3 million net decrease

Innovative Solutions Canada Program

($1.1 million) to the National Research Council of Canada (NRC) to support the COVID-19 challenge through the Innovative Solutions Canada (ISC) Program by developing a proof of concept of a digital platform for the Canadian industry.

Purpose of funding:

Data centre consolidations

($1.6 million) to Shared Services Canada (SSC) for reimbursement related to reduced accommodation requirements as a result of data centre consolidations associated to power consumption and space efficiencies.

Purpose of funding:

Financial management transformation

($1.6 million) to the Treasury Board Secretariat (TBS) to support the Government of Canada financial and materiel management (GCFM) solution project PSPC’s contribution to the financial management transformation (FMT) initiative led by TBS.

Purpose of funding:

Public Services and Procurement Canada 2020 to 2021 Supplementary Estimates (C)

Parliamentary reporting and estimates supply cycle

April 1

April to June

July to December

January to March

Estimates process

The government prepares the estimates to obtain authority from Parliament to spend public funds. It provides an overview of the government’s spending plans to deliver on its priorities and mandate.

The estimates are tabled in the House of Commons and then referred to standing committees for their review and report back to the House with their recommendations.

The estimates are divided into departmental “votes” which summarize the financial requirements for an expenditure category: operating, capital, or grants and contributions.

Supplementary Estimates:

Highlights

Financial overview

Table 1: Voted appropriations (in millions of dollars)
Item Description Total
A1 Supplies for the health system—COVID-19 To continue activities related to the COVID-19 response, including the procurement of additional mobile health units, after the expiry of the Public Health Events of National Concern Payment Act 380.0
B Accommodation costs related to pension administration To cover accommodation costs incurred for employees who provide pension services relating to the public service, Canadian Forces, Royal Canadian Mounted Police and Reserve Force pension plans 9.2
C Emergency procurement response—COVID-19 To support the delivery of PSPC’s emergency COVID-19 procurement response without reducing the service levels on other critical procurements that support government operations 8.2
D Pension system data integrity To continue maintaining data integrity within the Government of Canada’s pension system 6.1
E Anti-Money Laundering and Anti-Terrorist Financing (AMLATF) Regime To establish a dedicated team of forensic accountants to support Canada’s AMLATF Regime, its partners and law enforcement agencies in fighting money laundering and terrorist financing in Canada 0.4
Total voted appropriationstable 1 note 1 403.8

Table 1 Notes

Table 1 Note 1

Totals may not add up due to rounding.

Return to table 1 note 1 referrer

Table 2: Statutory appropriations (in millions of dollars)
Item Description Total
A2 Supplies for the Health System—COVID-19 Conversion of unused statutory funding into voted appropriation in order to continue activities related to the COVID-19 response after the expiry of the Public Health Events of National Concern Payment Act (380.0)
EBP Contributions to employee benefit plans (EBP) Applicable for salary envelop for: emergency procurement response—COVID-19, pension system data integrity, and anti-money laundering and anti-terrorist financing regime 3.6
Total statutory appropriationstable 2 note 1 (376.4)

Table 2 Notes

Table 2 Note 1

Totals may not add up due to rounding.

Return to table 2 note 1 referrer

Table 3: Transfers (in millions dollars)
Item Description Total
F Transfer to the National Research Council of Canada To support the COVID-19 challenge to Canadian industry through the Innovative Solutions Canada Program (1.1)
G Transfer to Shared Services Canada For reimbursement related to reduced accommodation requirements as a result of data centre consolidations (1.6)
H Transfer to the Treasury Board Secretariat To support the Government of Canada Financial and Materiel Management Solution Project. PSPC’s contribution to the financial management transformation (FMT) initiative led by Treasury Board Secretariat (1.6)
Total transfers (4.3)
2020 to 2021 total Supplementary Estimates (C) adjustmentstable 3 note 1 23.2

Table 3 Notes

Table 3 Note 1

Totals may not add up due to rounding.

Return to table 3 note 1 referrer

Supplementary Estimates (C) narratives

Funding to provide supplies for the health system: COVID-19

Supplementary Estimates (C): Converting unused statutory funding into voted appropriation: $380 million in 2020 to 2021

Table 4: Funding profile (in millions of dollars)
2020 to 2021 Statutory appropriation granted under Public Health Events of National Concern Payment Act Vote 1—Operating expenditures Total
Supplementary Estimates (A) 500 — 500
Supplementary Estimates (B) 100 400 500
Supplementary Estimates (C) (380) 380 0
Total authorities 220 780 1,000
Note

Statutory authorities granted under the Public Health Events of National Concern Payment Act (PHENCPA) were available until December 31, 2020

Summary

Statutory authorities granted under the PHENCPA was repealed on December 31, 2020. Public Services and Procurement Canada (PSPC) is therefore seeking to convert $380 million of unused statutory funding into voted appropriation (Vote 1—Operating expenditures).

Funding sought in the Vote 1—Operating expenditures will be used to facilitate the procurement of critical goods and services including personal protective equipment (PPE) for the benefit of Canadians, such as those in essential services sectors. It will provide PSPC with the necessary funding to continue activities related to the COVID-19 response, including the procurement of additional mobile health units (MHUs), following the expiry of the PHENCPA.

Purpose of the funding

The government established the Essential Services Contingency Reserve (ESCR) in August 2020 to provide access to PPE during the COVID-19 pandemic. It is a temporary reserve of supplies of PPE, sold at cost, to eligible essential service providers who work beyond the health-care system, such as people working in grocery stores, pharmacies and maintenance.

The funding will allow PSPC to continue be pro-active in acquiring critical goods and services, such as PPE and health supplies, through the ESCR to Canadian businesses that fall under the 10 essential service categories as defined in Public Safety’s Guidance on essential services and functions in Canada during the COVID-19 pandemic:

In addition, funding will be used for expenses associated to PPE such as those related to the ESCR case management system and order-intake tool, warehousing and logistics. As the ESCR infrastructure is also currently being leveraged to support the warehousing and distribution of test kits, funding would also be used to support these efforts.

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, thereby 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.

Furthermore, apart from the ESCR, in preparation for a resurgence of COVID-19 cases in the months to come, the funding will be used to procure MHUs to help provinces and territories increase critical care capacities in their hospitals.

Background

In order 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.

By the end of April 2020, PSPC was provided with the exceptional authorities during the period of the COVID-19 pandemic to:

The first statutory authority of $500 million was received under the PHENCPA and reported in Supplementary Estimates A. Subsequently, an additional $500 million was approved in Supplementary Estimates B. This brought PSPC’s total authorities to $1 billion, of which $600 million was provided in statutory funding and $400 million as voted appropriation to support the Government of Canada’s response to the pandemic and the safe restart. However, unused statutory authorities granted under the PHENCPA were repealed on December 31, 2020.

Through the Supplementary Estimates C, we are seeking to convert $380 million from statutory funding to Vote 1—Operating expenditures.

Current status

The ESCR provides a backstop to meet urgent, short-term needs for support where other sources of supply of PPE and critical COVID-19 related goods are unavailable and where significant disruptions in essential services are imminent. It started its public operations on August 3, 2020. Initial uptake for the ESCR has been minimal, likely reflecting the general availability of PPE and critical supplies on the open market, but it may also point to a public awareness issue. As of December 31, 2020, approximately $220 million of the $1 billion has been spent, including $71 million specific to the ESCR. Currently the ESCR inventory mainly includes 2-layer cloth face masks, surgical masks, goggles, KN95 respirators, disposable non-medical masks, disposable coveralls, thermometers, nitrile gloves, hand sanitizer, disinfecting wipes, disinfecting solution, disinfecting spray and face shields. Boot covers will also be added to the ESCR inventory. Additionally, funding has also been used for the development of a case management system and order-intake tool, a third party logistics provider to provide warehousing and inventory management, and ground transportation for order fulfillment.

Funding for accommodation costs related to pension administration

Supplementary Estimates (C): $9,193,852 in 2020 to 2021

Funding profile
Table 5: Superannuation account: 13% accommodation (in millions of dollars)
Fiscal year 2016 to 2017 2017 to 2018 2018 to 2019 2019 to 2020 2020 to 2021
Total authorities 7.5 7.9 8.0 8.1 9.2
Summary

Funding of $9.2 million (Vote 1—Operating expenditures) in 2020 to 2021 to Public Services and Procurement Canada (PSPC) for accommodation costs for employees who provide pension services relating to the Public Service Superannuation Act (PSSA), Canadian Forces Superannuation Act (CFSA), Royal Canadian Mounted Police Superannuation Act (RCMPSA), Canadian Forces Pension Fund (CFPF) and Reserve Force Pension Fund (RFPF).

Purpose of the funding

PSPC provides accommodation services to employees who administer the pension funds. The funding will be used to cover accommodation costs incurred for these employees.

As per Treasury Board Secretariat (TBS) guidelines, the accommodation cost is established at 13% of the approved salary resources.

The $9.2 million is broken down as follows:

Background

By the nature of the pension funds, legislation requires that expenditures for the operation and management of the pension funds be tracked and managed separately. Consequently, administration costs (including accommodation costs) are charged to the respective superannuation account as required by:

PSPC seeks TB authority once a year to access the accommodation funding from the Consolidated Revenue Fund (CRF):

Deposits are subject to annual review as part of the annual pension administration audit.

Funding to support the delivery of Public Services and Procurement Canada’s emergency COVID-19 procurement response

Supplementary Estimates (C): $8,184,499 in 2020 to 2021

Table 6: Funding profile (in millions of dollars)
Fiscal year 2020 to 2021
Total authorities 8.2
Notes

Summary

Public Services and Procurement Canada (PSPC) is seeking access to $8.2 million (vote 1—operating expenditures) in 2020 to 2021 to support the delivery of the emergency COVID-19 procurement response without reducing the service levels on other critical procurements that support government operations.

Purpose of the funding

The funding will enable PSPC to increase its staffing capacity to deliver timely and effective procurement services in support of the Government of Canada’s response to the COVID-19 pandemic, sustain government operations, and maintain economic opportunities for suppliers and essential service levels on other critical procurements.

More specifically, the funding will support the following activities:

Background

Since the beginning of the COVID-19 pandemic, PSPC has been continuously working towards securing medical equipment and medical supplies for frontline workers and Canadians. PSPC’s procurement experts are engaging with suppliers across the globe adjusting to and responding to scarcity and supply chains that are strained.

PSPC supports domestic suppliers through measures such as the supply hub to help organizations sell and buy personal protective equipment (PPE) during the pandemic, and the Essential Services Contingency Reserve for essential service providers to have access to PPE in order to keep their organizations running.

Moreover, PSPC has also undertaken activities that have not been traditionally assumed by the department, particularly in the area of logistical support for the transport, storage and distribution of PPE. Due to the urgent nature of the pandemic, PSPC deployed and reassigned staff from within the department to support the COVID-19 response efforts.

Current status

PSPC has been engaged in ongoing recruitment efforts to backfill positions in order to ensure continued delivery of common procurement services in support of government programs and operations.

For instance, in response to the call-outs from the Deputy Minister and from the Acquisitions Program Assistant Deputy Minister, the Procurement Branch received a high number of expressions of interest across numerous job types/occupational groups to support the COVID-19 short-term procurement effort. Current and former public servants, as well as procurement professionals from the private sector and from other jurisdictions, expressed interest (and are continuing to express interest) in contributing to the contracting and procurement response to COVID-19.

As the COVID-19 pandemic persists, the Human Resources Branch continues to work closely with hiring managers across PSPC to track and respond to their short-term resourcing needs, as well as to ensure their medium to longer-term needs for ongoing work and corporate priorities are met. Moreover, several advertised appointment processes have also been established to meet PSPC’s need for indeterminate staffing.

Funding for administration and data integrity of the Public Service Pension Plan

Supplementary Estimates (C): $6,054,185 in 2020 to 2021

Funding profile
Table 7: The following table includes total funding per fiscal year (in millions of dollars)
Fiscal year 2020 to 2021 [Redacted] [Redacted] [Redacted]
Total authorities 6.1 [Redacted] [Redacted] [Redacted]

[Redacted]

Summary

Public Services and Procurement Canada (PSPC) is seeking access to $6.1 million (Vote 1—Operating expenditures, in the special purpose allotment (SPA) entitled “Post Implementation of Pay System”) in 2020 to 2021 to continue maintaining data integrity within Government of Canada’s pension system.

Purpose of the funding

The funding will enable PSPC to maintain the required resources to address various data errors transmitted by the Phoenix pay system into the public service pension system.

PSPC will continue to process and correct data errors, such as incorrect salary information and pensionable allowances, and perform quality reviews and full validations of member accounts prior to the issuance of benefit payments. These activities will ensure the accuracy of payments and service delivery excellence is maintained.

Background

PSPC is responsible for the day-to-day administration of the Public Service Pension Plan for federal public service members and beneficiaries. The timeliness and accuracy of pension benefit payments depend on the integrity of the information received by the government’s pay system.

Since the implementation of Phoenix in 2016, the volume of posting errors, that are identified at the time that pay data is loaded into the pension system, have increased significantly with multiple errors being reported on a broader number of plan members accounts. The federal government has introduced several measures to address issues and challenges related to the pay system. The funds committed in the past few years have helped the pension program to reduce posting errors related to pay transactions and prevent a growing accumulation that would result in delays in processing member benefits upon their departure from the public service or through retirement. Activities to address data integrity continue to be required until issues with the pay to pension interface are resolved.

Current status

As of September 2020, the Pension Program contains approximately 15,000 posting errors per month, representing a downward trend since the same time last year. It is anticipated that this number may temporarily rise as a result of the recent signing of new collective agreements in the third quarter of 2020 before resuming a downward trend.

A backlog of just over 80,000 posting errors remains, of which 37,000 require resolution by the Pay Centre in order to clear the errors in the pension system. This volume recently started to trend downward in May 2020, showing a positive sign that incoming posting error volumes are declining and that additional staff put in place is now addressing earlier backlogs accumulated in the Phoenix system.

The current number of public service employees with posting errors in accounts remains at approximately 35,000, which is more than double the affected population in 2015 before Phoenix was launched. However, this is also trending downwards since May 2020.

Pay and pension system teams have been working collaboratively since January 2020 using an agile methodology to take pay to pension interface problems and identify possible solutions to improve the data transfer and re-align all salary data since Phoenix Go-Live. Initial pilots on small account populations have yielded positive results. A complex analysis on salary and allowance data between the pension and Phoenix systems was completed in December 2020 which showed only a 12.7% difference in salary data accuracy and only a 14.4% difference in allowance data accuracy between the systems. This is positive and demonstrates that the investment to protect the data integrity is working.

By May 2021, all salary and allowance data will be reloaded using improvements to the pay pension interface which will improve alignment and increase the accuracy of salary and allowance data from 73% to 97% between the pension and Phoenix systems. Additional workshops to address other data groups are being planned for other pay pension interface issues and will continue to go forward until posting error volumes are close to or better than their pre-Phoenix volumes.

It is important to note that the Pension Program moved from a risk based quality assurance model to 100% verification of member accounts prior to issuing pension benefits, this includes working with the member to validate service and working with pay to resolve any account errors so that the members account is complete and accurate at the time the benefit is issued.

The PSPC Pension Program continues to deliver full services to its members and all public service members are able to retire with their pensions. The Phoenix pay system is used only for employee payroll. The pension program has used a different system for issuance of pension payments since 2012 and pension payroll process is not impacted by Phoenix.

Funding to strengthen Canada’s anti-money laundering and anti-terrorist financing regime

Supplementary Estimates (C): $419,229 in 2020 to 2021

Funding profile
Table 8: The following table includes total funding per fiscal year (in millions of dollars)
Fiscal year 2020 to 2021 [Redacted] [Redacted] [Redacted] [Redacted] [Redacted]
Total authorities 0.4 [Redacted] [Redacted] [Redacted] [Redacted] [Redacted]
[Redacted]
Summary

Public Services and Procurement Canada (PSPC) is seeking access to $0.4 million (vote 1—operating expenditures) in 2020 to 2021 to establish a dedicated team of forensic accountants to support Canada’s anti-money laundering and anti-terrorist financing (AMLATF) regime, its partners and law enforcement agencies in fighting money laundering and terrorist financing in Canada.

Purpose of the funding

The funding will allow PSPC to create a dedicated team within the Forensic Accounting Management Group (FAMG) to provide forensic accounting services, on a no cost (or significantly reduced) basis, to AMLATF regime partners and law enforcement agencies.

The services provided by the dedicated team include the following:

PSPC is committed to have an independent value-for-money audit in 2024 to 2025 to assess the effectiveness of the initiative. The results will allow PSPC to revisit its best practises and assess the program’s performance in order to improve its effectiveness in delivering dedicated forensic accounting services to clients on money laundering and terrorist financing investigations.

Background

Canada’s AMLATF regime’s goal is to protect the integrity of Canada’s financial system by deterring individuals from using it to carry out money laundering, terrorist financing, or other criminal activities.

The need for specialized resources to combat money laundering was highlighted in a review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) completed by the Parliament in 2018. Consequently, in order to support the recommendation from the review as well as to strengthen the AMLATF regime, the Department of Finance Canada started a horizontal initiative that comprised consultations with stakeholders and collaboration with provincial and territorial partners on approaches to combat financial crimes in Canada.

In July 2020, funding for a dedicated team of forensic accountants to support the AMLATF regime was included in the Government of Canada’s economic and fiscal snapshot. This initiative will be implemented through 3 phases, with Phase I and II running in parallel in 2020 to 2021, and Phase III scheduled to start in 2021 to 2022.

Phase I
Phase II
Phase III

Upon completion, the initiative will provide funded forensic accounting resources to AMLATF Regime partners and law enforcement across Canada with the majority of the resources located near their clients, thereby ensuring efficiencies in communications and coordination of actions.

Current status

On December 11, 2020, FAMG launched its national inventory for senior forensic accountant (AU-04) positions, which was followed by the launch of a forensic accountant (AU-03) process in Western Canada in January 2021. Advertising for these positions was posted on social media, with paid placements in specialized industry publications issued on January 5, 2021. It is expected that candidates will be starting in their functions in summer 2021 and staggered over the remainder of the year.

A client engagement strategy was launched in winter 2021 with a goal of clearly identifying existing and new regime and law enforcement partners’ needs for the outgoing years in order to allocate service offerings. As required, the client engagement strategy will look to set up new memorandum of understanding (MOU) agreements with client partners.

Early procurement efforts are also underway to secure the additional software tools that will be required to fully deliver on the new mandate and as per the authorities obtained in the Treasury Board submission.

Transfer to National Research Council to support the COVID-19 challenge to Canadian industry through the Innovative Solutions Canada Program

Supplementary Estimates (C): $1,100,683 in 2020 to 2021

Table 9: Funding profile (in millions of dollars)
Fiscal year 2020 to 2021
Total authorities (1.1)
Summary

Transfer of $1.1 million (vote 5—capital expenditures) in 2020 to 2021 to the National Research Council (NRC) to support the COVID-19 challenge by developing a proof of concept of a digital platform for the Canadian industry through the Innovative Solutions Canada (ISC) Program.

Purpose of the funding

To fund the “COVID-19 challenge: An intelligent digital clearing house” issued under the ISC Program.

The funds will enable NRC to award grants to selected applicants to develop a proof-of-concept for a rapid response platform that allows Canadian industry and global communities of researchers, health providers and funders to exchange, share and procure expertise and materials in response to COVID-19. As part of this collaboration, PSPC agreed to finance the phase 1 proof of concept work using funding already set aside in the department’s mandated ISC special purpose allotment and transfer these funds to NRC who is the lead agency.

This digital platform will allow:

Background

The ISC is an initiative that seeks technology-based solutions for challenges faced by the Government of Canada. Eligible companies can apply through an online portal and the selected applicants may receive grant funding to research and develop (R&D) solutions to help the government overcome challenges.

The ISC Program consists of 2 streams, the challenge stream and the testing stream. The challenge stream is divided in 2 phases: the program solicits industry for solutions at phase 1 (proof of concept), and if successful through phase 1, innovations move into phase 2 (prototype development). The testing stream, formerly known as the Build in Canada Innovation Program (BCIP), supports late-stage R&D using procurement. If the prototype developed in phase 2 of the challenges stream suits the need of a government department, the government may procure the innovation in order to test it and provide the innovator with associated testing feedback.

Transfer to Shared Services Canada for reimbursement related to reduced accommodation requirements as a result of data centre consolidations

Supplementary Estimates (C): $1,551,311 in 2020 to 2021

Funding profile
Table 10: Data centre consolidation project (in millions of dollars)
Fiscal year 2016 to 2017 2017 to 2018 2018 to 2019 2019 to 2020 2020 to 2021 [Redacted]
Total authorities (2.2) (0.5) (0.5) (1.2) (1.6) [Redacted]
Summary

Transfer of $1.6 million (vote 1—operating expenditures, special purpose allotment (SPA) entitled “Real Property Services”) in 2020 to 2021 to Shared Services Canada (SSC) for reduced accommodation requirements as a result of data centre consolidations.

Purpose of the funding

Under an agreement with SSC, Public Services and Procurement Canada (PSPC) transfers to SSC the amount for power and space savings achieved from the closure of data centres, less the identified decommissioning costs PSPC has forecasted it will incur for fiscal year 2020 to 2021.

Background

Created in 2011, SSC’s mandate is to deliver email, data centre and telecommunication services to 43 federal departments and agencies. One of SSC’s main objectives is to generate savings through information technology (IT) consolidation. This project involves the closing and decommissioning of data centres and to consolidate them into new locations. Furthermore, the closure of the data centres would result in power and space savings.

Prior to September 2014, an agreement was signed between PSPC and SSC for the transfer of the power and space savings to SSC upon cessation of data centre operations, decommissioning and release of the space to PSPC for reassignment. The agreement was modified later to have the transfer of funding made upon the closure of data centres in order to allow for a more expedient process for closing and decommissioning data centres.

Data centre consolidation project:

PSPC’s responsibility:

Decommissioning of data centres:

Current status

Project completion date: SSC estimates that the project will end in fiscal year 2025 to 2026. This estimate relies on SSC funding being available to help data centre closures meet the objective. This end date is subject to change.

Milestones: As of the end of the second quarter of 2020 to 2021, SSC’s data centre closures program had closed 300 data centers, leaving 420 outstanding.

Risks: SSC identified the following risks that may impact the duration of the project:

Major accomplishments include:

Transfer to Treasury Board Secretariat to support the Government of Canada financial and materiel management solution project

Supplementary Estimates (C): $1,625,000 in 2020 to 2021

Table 11: Funding profile (in millions of dollars)
Fiscal year 2020 to 2021
Total authorities (1.6)
Summary

Transfer of $1.6 million (vote 5—capital expenditures) in 2020 to 2021 to Treasury Board Secretariat (TBS) as part of Public Services and Procurement Canada’s (PSPC) contribution to the financial management transformation (FMT) initiative led by TBS.

Purpose of the funding

PSPC’s contribution will be used to advance the FMT initiative. The fund will be invested in the development of the Government of Canada financial and materiel (GCFM) solution, the financial management system based on SAP’s next-generation S4/HANA platform.

Modernizing the current financial landscape will involve expanding the standardized financial management functionality gradually through successive release of the solution, and to on-board existing systems over time.

Background

Federal departments and agencies use financial systems to adhere to the Government of Canada’s standards on financial management and reporting. Today, most aspects of financial and materiel management are delivered as decentralized and largely departmental functions. While the systems, applications and products (SAP) has been identified as the enterprise resource planning (ERP) software of choice for financial management, most departments maintain their own customized financial management system. They also have their own data structure and financial coding, making it difficult to assemble consistent government-wide financial and performance information.

From a government-wide perspective, the current decentralized approach poses control risks to the finance function, is unduly complex and costly, and does not always respond effectively to the needs of managers, staff, and decision makers. Moreover, the current financial systems that the Government of Canada relies upon are increasingly becoming obsolete, which will affect departments’ ability to comply with the established statutes and policies on financial management. This is particularly problematic for smaller departments that are using obsolete and non-supported systems, such as the FreeBalance and Common Departmental Financial System (CDFS).

TBS has the mandate to implement a more modern approach to comptrollership as well as strengthen the clarity and consistency of financial reporting. To advance these priorities, TBS will be modernizing the financial and materiel management business processes across the Government of Canada and delivering an SAP solution for small departments and agencies. This solution, known as the GCFM solution, is a financial management system built on SAP’s next-generation S4/HANA enterprise resource planning platform. The design of the solution has the potential and scalability to allow the federal government to use standard, best practice business processes, supported by SAP’s off-the-shelf software capabilities to streamline routine processes.

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