Opening Statement before the Standing Committee on Public Accounts
Modernizing Information Technology Systems
(Report 7—2023 Reports of the Auditor General of Canada)
The Benefits Delivery Modernization Programme
(Report 8—2023 Reports of the Auditor General of Canada)
14 December 2023
Andrew Hayes
Deputy Auditor General
Mr. Chair, thank you for this opportunity to discuss our reports on modernizing information technology systems and on the Benefits Delivery Modernization programme. Both reports were tabled in the House of Commons on October 19th, 2023. I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinaabe people. Joining me today are Patrice Malboeuf and Jocelyn Matthews, the directors who were responsible for these audits.
These 2 reports are closely related. Our report on modernizing information technology systems examined the government’s overall approach to modernizing its systems, while our report on the Benefits Delivery Modernization programme focused specifically on the modernization of Old Age Security, the Canada Pension Plan, and Employment Insurance. More than 10 million Canadians rely on these 3 benefits.
Overall, we found that the Treasury Board of Canada Secretariat and Shared Services Canada did not do enough to lead and support departments and agencies in updating their information technology systems. These lead organizations still do not have a strategy to drive modernization efforts even though the government first identified aging systems as a significant concern more than 24 years ago.
Whether it’s applying for a benefit or managing the business of government, both Canadians and the public service need reliable information technology systems. We found that about two thirds of the government’s 7,500 software applications were in poor health. Of those, 562 are essential to the health, safety, security, or economic well‑being of Canadians. Some of the systems date back to the early 1960s. The risk that outdated systems could fail and that Canadians could lose access to essential services increases with every passing day.
While aging information technology infrastructure is a problem that the government has known about for decades, progress has been very slow. We found that in addition to the lack of centralized leadership and oversight, other factors had contributed to delays, including a shortage of skilled people to carry out the work and an inflexible funding approach.
Our report on the Benefits Delivery Modernization programme echoed these findings. In particular, this report shows the effects of the government’s inflexible funding approach. When the programme was launched in 2017, Employment and Social Development Canada estimated that it would cost $1.75 billion. That number has since been revised twice, and it will probably change again as delays and challenges persist. In April 2022, the cost estimate reached $2.5 billion. That’s a 43% increase since 2017. In other words, halfway through the programme’s 13‑year timeline, all 3 benefits are still running on systems that are between 20 and 60 years old.
Faced with ongoing delays, cost increases, and staffing challenges, Employment and Social Development Canada adjusted its approach and delayed transformation efforts to prioritize the migration of aging systems. This step was intended to mitigate the risk of system failure. The department also moved Old Age Security ahead of Employment Insurance in the migration schedule because Old Age Security was the oldest system with the greatest risk of failing.
The department’s decision to focus on migrating the systems to prioritize the continuity of benefits was the right one. However, we are concerned that if challenges and delays persist, decisions could be made to remove aspects of transformation or to take shortcuts to maintain the timelines or budget, as happened with the Phoenix pay system. Reducing or eliminating the transformation component of the programme increases the risk that the final product will not meet the needs of those who rely on these benefits, including seniors, Indigenous people, and refugees.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have. Thank you.