2023 Reports 5 to 9 of the Auditor General of Canada to the Parliament of Canada
Report 8—The Benefits Delivery Modernization Programme
At a Glance
Employment and Social Development Canada’s Benefits Delivery Modernization programme is the largest information technology project undertaken to date by the federal government. The programme had 2 key goals:
- migrate Old Age Security, Employment Insurance, and Canada Pension Plan benefits to a modern cloud‑based platform
- transform benefits delivery and the user experience to meet the needs of diverse groups, including seniors, people in remote locations, Indigenous peoples, and refugees
The information technology systems currently used to deliver these benefits to Canadians are between 20 and 60 years old and at risk of failing. If these systems were to fail, it could greatly affect the more than 10 million Canadians who rely on them to meet their daily needs.
We found that in the face of ongoing delays, cost increases, and staffing challenges, the department showed flexibility by adjusting its approach from working on both of the programme’s goals in tandem to prioritizing the migration of the aging systems to reduce the risk of system failure. However, this approach meant delaying the programme’s much‑needed transformation component, which is intended to improve how people access and receive these benefits, including reducing the occurrence of inaccurate payments. The programme is more than halfway into its initially planned timeline, and all 3 benefits are still operating on outdated systems with limitations.
As time goes on and estimated costs continue to rise, we are concerned that decision makers may scale back or eliminate the transformation component of the 3 benefits, resulting in a final product that does not consider the needs of millions of Canadians who rely on them. The Benefits Delivery Modernization programme is an opportunity for the federal government to demonstrate how it could improve the planning and execution of large, multi‑year information technology projects.
Key facts and findings
- In the 2022–23 fiscal year, the federal government planned to provide about $125 billion in Old Age Security and Canada Pension Plan benefits to about 8.3 million Canadians and about $25 billion in Employment Insurance benefits to about 2.6 million Canadians
- The Benefits Delivery Modernization programme was launched in 2017 and was supposed to finish by 2030. Since its launch, Employment and Social Development Canada encountered numerous obstacles and delays in its implementation. For example, the department revised its estimated date for migrating Old Age Security benefits to a new platform from December 2023 to December 2024 and told us that any delays encountered during the migration may shift the completion date to December 2025. Our review indicated that there is a significant risk this will happen.
- In 2017, the department’s initial estimated cost of the programme was $1.75 billion. This estimate has increased twice since then and is likely to increase again. As of the latest estimate in April 2022, the cost had increased by 43% to $2.5 billion, even though no benefits had yet moved to the new platform.
Why we did this audit
- More than 10 million Canadians rely on the three benefits examined to meet their day‑to‑day needs, but the information technology systems that deliver them are decades old and at risk of failure.
- Implementing a complex information technology project in the federal government requires a sustained, multi‑year commitment.
- The longer it takes to complete the Benefits Delivery Modernization programme, the more susceptible the project will be to rising costs and changing government priorities over time.
Highlights of our recommendations
- Using its experience with the Benefits Delivery Modernization programme, Employment and Social Development Canada should work with the Treasury Board of Canada Secretariat to
- develop and implement a more realistic and precise approach to estimating and reporting costs for large, multi‑year information technology projects that will be used by the programme going forward and also by other government departments planning similar projects
- ensure that any future changes (including to cost estimates or timelines) do not result in the transformation component being curtailed or eliminated
Please see the full report to read our complete findings, analysis, recommendations and the audited organizations’ responses.
Exhibit highlights
The benefits undergoing modernization
| Benefit | Purpose and form | Eligibility | Number of recipients in the 2022–23 fiscal year | Planned spending in the 2022–23 fiscal year | Age of information technologyIT system (rounded) |
|---|---|---|---|---|---|
| Old Age Security (includes the Guaranteed Income Supplement) | Income support through monthly taxable payments | Canadians or legal residents aged 65 years and older who meet the residency requirements | 7.0 millionNote * | $67.7 billion | 60 years |
| Canada Pension Plan | Monthly taxable payments that provide a source of retirement income | Persons aged 60 years or over who have made at least 1 valid contribution to the plan | 6.5 millionNote * | $57.2 billion | 20 years |
| Employment Insurance | Biweekly payments that replace up to 55% of a worker’s salary (to a maximum of $61,500 in 2023) while they are not working | Unemployed workers who are looking for a job or are upgrading their skills Workers taking time off because of illness, pregnancy, childbirth (or adoption), or to care for a critically ill or injured person or a family member at significant risk of death | 2.6 million | $24.8 billion | 50 years |
Source: Based on data from Employment and Social Development Canada.
Estimated project costs have increased significantly since the initial estimate
| Date of cost estimate | Cost ($ billions) | Incremental increase over previous estimate (%) | Cumulative increase from initial rough estimate (%) |
|---|---|---|---|
| August 2017 (initial rough estimate) |
$1.75 billion | Not applicable | Not applicable |
| April 2019 (revised estimate) | $1.9 billion | 8% | 8% |
| October 2021 (first increase) | $2.2 billion | 16% | 26% |
| April 2022 (second increase) | $2.5 billion | 14% | 43% |
| November 2022 (possible increases noted by PricewaterhouseCoopersPwC case study) |
$2.7 to $3.4 billion | 8% to 36% | 54% to 94% |
Source: Based on data from Employment and Social Development Canada
Service transformation is at risk
Text version
This chart shows how services begin and end in terms of schedule, cost, and scope and how Benefits Delivery Modernization is progressing with respect to those 3 items.
How projects begin: Projects begin by trying to balance costs, schedule, and scope.
How projects end: Projects end typically with cost and schedule increases and a reduced scope.
How Benefits Delivery Modernization is progressing: The Benefits Delivery Modernization programme has experienced delays and increased cost estimates. What the scope will be in the end is not known.
Infographic
Text version
Modernizing Information Technology Systems and the Benefits Delivery Modernization Programme
The Government of Canada requires reliable information technology systems to deliver its services to Canadians. Many of these systems are aging and are in need of modernization.
We have completed 2 audit reports on this topic: a report on modernizing information technology systems and a report on the Benefits Delivery Modernization programme.
The Modernizing Information Technology Systems report examined whether the lead organizations supported departments and agencies in modernizing information technology systems.
The Benefits Delivery Modernization Programme report examined the modernization of the Canada Pension Plan, Old Age Security, and Employment Insurance.
Modernizing information technology systems
Overall, the Treasury Board of Canada Secretariat and Shared Services Canada did not do enough to lead and support departments and agencies to modernize outdated information technology systems.
Two thirds of applications were reported as in poor health and in need of modernization.
The Treasury Board of Canada Secretariat lacked a strategy and an effective funding approach to support the modernization of applications.
Many aging systems are maintained on outdated infrastructure, which is costly, resource intensive, and unsustainable.
The Treasury Board of Canada Secretariat’s ability to oversee projects was limited. The secretariat could oversee only 15 to 25 high-risk projects at a time
As of May 2023, the secretariat has monitored 22 high‑risk information technology projects out of the approximately 2,100 active projects. The total planned cost for the 22 projects being overseen was about $5.1 billion. The total planned cost of the 2,100 active projects was about $44 billion. This included projects to develop new applications and infrastructure and to modernize applications in poor health.
Progress on modernizing applications and closing data centres has been slow
Shared Services Canada depends on departments and agencies to first modernize their applications before it can make progress on closing older data centres.
65% of the approximately 4,500 applications had not been modernized. We found no schedule in place to perform this work. Many data centres identified for closure will remain open until modernization is complete. Shared Services Canada had not closed 280 out of the 720 data centres it had identified for closure.
The Benefits Delivery Modernization programme
When faced with ongoing delays, cost increases, and staffing challenges, Employment and Social Development Canada showed flexibility in its management of the programme by adjusting its approach to prioritize the migration of the aging systems to ensure that Canadians continue to receive their benefits.
Three aging systems were in critical need of modernization to ensure Canadians keep receiving the benefits they need: Old Age Security, which is 60 years old; Employment Insurance, which is 50 years old; and the Canada Pension Plan, which is 20 years old.
In 2022–23, the government planned to provide about $150 billion in payments for these 3 benefits to more than 10 million people.
Programme timeline
Estimated project costs have increased significantly since the initial 2017 estimate.
The programme started in 2017 at an estimated cost of $1.75 billion. The expected end date at the start of programme was 2030. The potential delay is up to 4 years at an estimated cost of $3.4 billion or more.
By prioritizing the migration, the much-needed transformation component of the 3 benefits is on hold.
A chart shows how projects begin and end in terms of schedule (time), cost, and the scope of the transformation component of Benefits Delivery Modernization. The chart also shows how Benefits Delivery Modernization is progressing with respect to those 3 items:
- How projects begin: Projects begin by trying to balance costs, schedule, and scope. The scope is to transform delivery and the user experience.
- How projects end: Projects end typically with large cost and schedule increases and a reduced scope. The scope is scaled back or eliminated.
- How Benefits Delivery Modernization is progressing: The Benefits Delivery Modernization programme experienced increases in cost and schedule. What the scope will be in the end is not known. The transformation component is on hold.
As time goes on and estimated costs continue to rise, we are concerned that decision makers may scale back or eliminate the transformation component, resulting in a final product that does not consider the needs of millions of recipients.
The Benefits Delivery Modernization programme is the largest information technology project undertaken to date by the federal government.
This programme is an opportunity for the federal government to demonstrate how it could improve the planning and execution of large, multi-year information technology projects.
Related information
Entities
Tabling date
- 19 October 2023
Related audits
- 2023 Reports of the Auditor General of Canada to the Parliament of Canada
Report 7—Modernizing Information Technology Systems - 2021 Reports of the Auditor General of Canada to the Parliament of Canada
Report 1—Procuring Complex Information Technology Solutions
Parliamentary hearings