Public Services and Procurement Canada 2022 to 2023 Supplementary Estimates (B): Standing Committee on Government Operations and Estimates—November 24, 2022

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2022 to 2023 Supplementary Estimates (B) overview

Public Services and Procurement Canada (PSPC) is seeking a net increase of $192.2 million through Supplementary Estimates (B), increasing its available funding from $4.7 billion to $4.9 billion net of revenues.

Voted appropriations: $192.7 million increase

Supplies for the health system (COVID-19)

$135.9 million in 2022 to 2023 to continue supporting the Government of Canada’s response to COVID-19.

Purpose of funding

Government’s pay system

$20.5 million for 2022 to 2023 to continue delivering and stabilizing pay for the Government of Canada, temporarily increase pay processing capacity, and to mitigate recent challenges to queue management and support backlog elimination efforts.

Purpose of funding

Electronic procurement solution

$17.4 million for 2022 to 2023 to continue supporting the Electronic Procurement Solution (EPS) project. The EPS is a modern, cloud-based solution that will move federal procurement online and change the way government and suppliers interact to buy and sell goods and services.

Purpose of funding

Planning activities to support capital projects

$10.1 million for 2022 to 2023 to pursue the planning and delivery of critical infrastructure projects.

Purpose of funding

Card acceptance and postage fees

$8.8 million top-up funding in 2022 to 2023 for increases in non-discretionary expenses incurred by the Receiver General on behalf of federal departments and agencies for card acceptance and postage fees.

Purpose of funding

Statutory appropriations: $1.7 million net increase

Employee benefit plans

$1.7 million in statutory appropriations for contribution to the employee benefit plans.

The employee benefit plans (EBP) includes cost to the government for the employer’s matching contributions and payments to the Public Service Superannuation Plan, the Canada and Quebec pension plans, death benefits, and the employment insurance accounts.

EBP applicable on salary relating to government’s pay system.

Net transfers between government departments: ($2.2 million) net decrease

Greenhouse gas emissions

Transfer of $0.5 million from the Treasury Board Secretariat to Public Services and Procurement Canada: to support projects which will reduce greenhouse gas emissions in federal government operations.

Purpose of funding
Financial management transformation initiatives and the Comptrollership Data Strategy

Transfer of $1.1 million to the Treasury Board Secretariat (TBS) for its contribution to the financial management transformation (FMT) initiatives led by TBS.

Purpose of funding
Laboratories Canada initiative

Transfer of $1.6 million to the Department of Fisheries and Oceans (DFO) as lead for the Atlantic Science Enterprise Centre (ASEC), for their active role to support the implementation of phase I of the Laboratories Canada initiative.

Purpose of funding

Supplementary Estimates (B): Narratives

Funding to provide supplies for the health system

Supplementary Estimates (B): $135,896,951 in 2022 to 2023

Funding profile

Table 1: Funding to provide supplies for the health system (COVID-19) in fiscal year 2022 to 2023 (in millions of dollars)
Fiscal year 2022 to 2023
Supplementary Estimates 135.9
Total funding 135.9

Summary

Public Services and Procurement Canada is seeking access to $135.9 million (vote 1—operating expenditures) in 2022 to 2023 to continue supporting the Government of Canada’s response to COVID-19.

Purpose of the funding

The funding is sourced from previous years lapsed COVID-19 related funding in vote 1 carried into fiscal year 2022 to 2023.

Reprofile funding of $135.9 million will enable PSPC to continue to support the Government of Canada’s response to the pandemic including, but not limited to:

Background

In March 2020, following the World Health Organization’s call for countries to take urgent and aggressive action to fight the COVID-19 pandemic, Prime Minister Justin Trudeau established a COVID-19 Response Fund as Canada’s whole-of-government response to the COVID-19 outbreak.

In 2020 to 2021, PSPC was provided with $1.0 billion as part of the Public Health Events of National Concern Payment Act to procure supplies for the health system, essential service providers and other organizations and to support the Government of Canada’s response to the pandemic and a safe restart. The minister of PSPC was provided with the exceptional authority to acquire and provide goods and services on behalf of any entity in Canada or elsewhere, and transfer, lease or loan public property, such as supplies (for example, masks, gloves and gowns) and equipment (for example, ventilators, hospital beds and temporary shelters) to any government, body or person in Canada or elsewhere, as well as to provide assistance to vulnerable sectors and those unable to acquire critical goods.

Forecasting goods and services and their related costs is challenging given the constantly shifting needs for goods and services, supply chain shortages (for example, masks, gowns, gloves, freezers, and rapid tests), and logistical requirements relating to transportation, distribution and warehousing.

As the COVID-19 pandemic evolves, PSPC has had to continually adapt its procurement of supplies and operations to the shifting pandemic needs and requirements. In addition, PSPC, as owner of Canada's mobile health units (MHU), is in a position to deploy, operate and maintain these units. However, PSPC was requested to continue to wind down its COVID-19 spending by pursuing disposal of the mobile health units to the best placed, federal, provincial or international organizations.

Current status

PSPC is requesting access to $129.5 million, in addition to the $6.4 million previously secured reprofile for continued coverage of the dedicated procurement pandemic response and communications team. This funding will enable PSPC to continue to support the Government of Canada’s response to the COVID-19 pandemic by providing its clients with procurement and logistics services to quickly address changing and uncertain COVID-19 response requirements.

Funding for the government’s pay system

Supplementary Estimates (B): $20,534,023 in 2022 to 2023

Funding profile

Table 2: Funding for the Government of Canada’s pay system in fiscal year 2022 to 2023 (in millions of dollars)
Fiscal year 2022 to 2023
Supplementary Estimates 20.5
Future years – IBM Contract Amendment -

Summary

Public Services and Procurement Canada is seeking access to $20.5 million (vote 1—operating expenditures in the special purpose allotment entitled “Post Implementation of Pay System (PIPS)”) for 2022 to 2023 to continue delivering and stabilizing pay for the Government of Canada, temporarily increase pay processing capacity, and to mitigate recent challenges to queue management and support backlog elimination efforts.

Purpose of the funding

$13.3 million of the funding is sourced from prior years’ unused funds mainly due to delays in the deployment of the accelerator services which standardize and streamline pay processing methods to increase pay processing quality and productivity. The reprofiled funding will be used mainly for the continued investment in accelerator services as well as other activities identified through the 3-year plan (2020 to 2023). This plan and the associated oversight mechanisms ensure the integrated financial and strategic planning and prioritization of pay delivery and pay stabilization activities.

$7.2 million of the funding will be used to increase pay processing capacity for fiscal year 2022 to 2023 and to support backlog elimination efforts, thereby advancing the minister’s mandate of resolving outstanding Phoenix pay issues. This is in response to recent challenges impacting queue management, including the sustained trend in rising intake, and will be part of PSPC’s triennial strategy to continue administering pay beyond the pay program’s current funding window, ending March 2023.

Background

Since Phoenix was implemented in 2016, PSPC has requested additional funding every year, totalling more than $2 billion, in order to administer pay to public servants.

In 2020, PSPC put forward an ask to continue efforts towards the stabilization of the pay system. The investment of $271.3 million per fiscal year (2020 to 2021, 2021 to 2022, and 2022 to 2023), announced through the Economic and Fiscal Snapshot 2020, did not address the full funding pressures that the department is facing. Budget 2021 announced additional funding (totalling $46.8 million over 2 years) to reduce the backlog of pay issues.

PSPC’s current permanent funding envelope of about $80 million per year is equivalent to approximately 550 full-time equivalent (FTEs) in the Pay Centre and approximately 150 FTEs ensuring payroll integrity and supporting the compensation community enterprise-wide.

The program has been facing challenges with intake rising since April 2021 (a 26% increase over the previous year), often exceeding pre-pandemic levels. Recent analysis suggests this trend will continue, driven in part by the continuous growth in the public service.

The funding received via Supplementary Estimates (B) will allow PSPC to hire additional employees. As this request is only seeking funding for 1 year, funding to maintain these additional resources will be made as part of an upcoming request seeking renewal of core funding to maintain current program resources along with these new FTEs, and potentially to allow the department to hire additional FTEs in the future.

Current status

Delays in deliverables occurred in 2021 to 2022 resulting in planned costs not being incurred, and therefore lapsed. For example, the deployment of the accelerator services across the pay processing workforce was delayed due to timelines for negotiating costs with the vendor for the fourth wave. This service is delivered through contract with a third party and builds on improvements already implemented by transforming ways of working. It standardizes and streamlines pay processing methods and builds internal capabilities for all pay processing teams to increase processing quality and productivity.

In addition, a series of smaller initiatives (for example the development of a tool to reconcile amounts between the pay system and associated systems, a system change to fix an issue causing double deductions) also had delays in implementation due to extended timelines of required negotiations, delays in associated prerequisite activities, as well as onboarding of resources.

Funding for the e-procurement solution

Supplementary Estimates (B): $17,374,345 in 2022 to 2023

Funding profile

Table 3: Funding for the e-procurement solution in fiscal year 2022 to 2023 (in millions of dollars)
Fiscal year 2022 to 2023
Supplementary Estimates 17.4

Summary

Public Services and Procurement Canada is seeking access to $17.4 million (vote 1—operating expenditures) for 2022 to 2023 to continue supporting the e-procurement solution project.

Purpose of the funding

This funding is sourced from the previous year’s unused funds which resulted from delays due to COVID-19 and the complexity of system integration with PSPC’s financial system (SAP).

The funding is required to support the EPS project, an initiative to modernize the government’s procurement function in support of PSPC’s legislated mandate to provide procurement services. Since 2015, EPS has been a government priority to modernize procurement practices via a modern and cloud-based solution, which will permit more accessible and less burdensome procurement practices. The December 2019 PSPC ministerial mandate letter and the January 2021 supplementary mandate letter reiterated the importance of EPS as a priority for the department.

Background

PSPC is the largest buyer of goods and services in Canada; it manages more than 75% of all Government of Canada procurement spending, supporting federal government operations by ensuring the timely acquisition and delivery of approximately $22 billion worth of goods (43%), services (49%), and construction (8%) annually.

As a critical enabler of the government’s delivery of services to Canadians, the efficiency and effectiveness of the government’s procurement operations are paramount.

Building on lessons learned from major IT transformation projects around the globe and in Canada, PSPC’s objective is to leverage industry leading business processes, enabled by state-of-the-art technologies to establish a viable and modern procurement program that supports the government’s service delivery to Canadians.

EPS is a key initiative that will modernize the government’s procurement function and improve efficiency and electronic access to users. Budget 2018 announced $196.8 million for the EPS project to replace existing outdated information technology (IT) systems with a modern cloud-based electronic procurement solution. In 2021 to 2022, the project authority was revised to $220.9 million, to support the continued delivery and implementation of phase 1 which is the deployment of a fully operational EPS within PSPC and is scheduled to be completed by July 2023.

Current status

The EPS project phase 1 was launched in 2018 and is scheduled to be completed by July 2023. To date, the new e-procurement cloud platform based on SAP Ariba has been deployed along with professional service management application Fieldglass. A new government electronic tendering service (CanadaBuys) has been launched successfully along with a single point of access for provinces, territories and broader public service entities for tenders.

The previous year’s unused funds will be used in 2022 to 2023 to continue supporting the e-procurement solution project which includes onboarding of the remainder of PSPC users and program transformation.

Funding for planning activities to support capital projects

Supplementary Estimates (B): $10,126,229 in 2022 to 2023

Funding profile

Table 4: Funding for planning activities to support capital projects in fiscal year 2022 to 2023 (in millions of dollars)
Fiscal year 2022 to 2023
Supplementary Estimates 10.1

Summary

Public Services and Procurement Canada is seeking access to $10.1 million (vote 1—operating expenditures, special purpose allotment entitled “Pre-planning for capital, fit-up and non-capital specific projects”) for 2022 to 2023 to pursue the planning and delivery of critical infrastructure projects.

Purpose of the funding

The funding is sourced from the previous fiscal year’s unused funds:

The funding will enable the planning and implementation (non-capital portion) for critical infrastructure projects such as the ones mentioned above, and others such as the Alexandra Bridge in order to ensure sound federal capital investments for Canadians.

Background

In 2017 to 2018, PSPC implemented the new capital vote definition which stipulates that all expenditures of a capital nature are to be incurred from within capital vote. Other activities that do not meet the capitalization criteria should be recorded under the operating vote. Since pre-planning activities fall in the latter group, a new vote 1—special purpose allotment was created to record non-capital activities related to projects. For example, pre-planning activities include:

Since its creation, the SPA has evolved to include the non-capitalizable expenditures related to project initiation, planning and delivery activities consistent with PSPC's Project Navigator Framework, non-capitalizable expenditures related to refit and fit-up activities (for example, swing space) and non-capital specific projects.

Budget 2019 announced PSPC’s transition towards accrual budgeting with the goal to have a stable capital funding to be used for PSPC’s existing and planned tangible capital assets over the long run. One of the key elements for ensuring successful delivery of capital projects is the pre-planning and implementation phases, which supports the effective financial and risk management of the capital management plan.

Funding for card acceptance and postage fees

Supplementary Estimates (B): 8,797,282 in 2022 to 2023

Funding profile

Table 5: Funding for card acceptance and postage fees in fiscal year 2022 to 2023 (in millions of dollars)
Fiscal year 2022 to 2023
Card acceptance 8.0
Postage 0.8
Supplementary Estimates 8.8

Summary

Public Services and Procurement Canada is seeking access to $8.8 million (vote 1—operating expenditures, special purpose allotment entitled “Receiver General and central compensation administration function Special Purpose Allotment”) top-up funding in 2022 to 2023 for increases in non-discretionary expenses incurred by the Receiver General on behalf of federal departments and agencies for card acceptance and postage fees.

Purpose of the funding

The Receiver General pays for debit and credit card acceptance fees incurred by federal departments and agencies as a result of the collection of revenues via debit and credit cards (for example, revenues collected for passports, citizenship services, entrance and visitor services for national parks, etc.).

In addition, the Receiver General pays for the postage fees to mail up to 20 million cheques to Canadians.

The total costs of these services are out of PSPC’s control due to annual fluctuations in the price and volume of transactions. When the total projected costs exceed available funding, additional funds are sought. Any unused funds are returned to the Consolidated Revenue Fund.

Background

Under the Financial Administration Act, only the Receiver General has the authority to establish and maintain banking arrangements related to the issuance and collection of payment on behalf of federal organizations for services. These services include but are not limited to:

Funding is required to support the card acceptance program in accordance with the Receiver General’s mandate and in line with government-wide policy objectives.

In 2018, PSPC received approval to establish a quasi-statutory mechanism permitting adjustments to the Receiver General special purpose allotment on an annual basis due primarily to price and volume adjustments affecting debit and credit card acceptance and postage fees.

Transfer from the Treasury Board Secretariat to various organizations to support projects which will reduce greenhouse gas emissions in federal government operations

Supplementary Estimates (B): $511,064 in 2022 to 2023

Funding profile

Table 6: Transfer from the Treasury Board of Canada Secretariat to various organizations to support projects which will reduce greenhouse gas emissions in federal government operations in fiscal year 2022 to 2023 (in millions of dollars)
Fiscal year 2022 to 2023
Supplementary Estimates (methodologies to quantify greenhouse gas emissions) 0.3
Supplementary Estimates (heritage buildings) 0.2
Total Supplementary Estimates 0.5

Summary

Under the Greening Government Fund, the Treasury Board of Canada Secretariat is transferring $511 thousand (vote 1—operating expenditures) in 2022 to 2023 to Public Services and Procurement Canada to support projects which will reduce greenhouse gas emissions in federal government operations.

Purpose of the funding

Methodologies to quantify greenhouse gas emissions

Funding of $0.3 million for 2022 to 2023 will be used to develop science-based methodologies to quantify greenhouse gas (GHG) emissions generated along the life-cycle of goods and services procured by the Government of Canada. Once developed, the methodologies will be used to assess the carbon footprint associated with 3 procurement categories:

This will support the Government of Canada’s mandate to implement GHG-reducing measures with an objective of net-zero GHG emissions in the future.

The overall project includes 3 phases:

  1. scanning current practices used in measuring green procurement and using life cycle assessment to measure embodied GHG emissions in goods and services
  2. developing methodologies and tools for measuring GHG emissions in 3 categories of goods and services
  3. implementing these methodologies and tools

PSPC is currently in phases 2 and 3, depending on the category:

All categories are on track to have tools developed by the end of fiscal year 2022 to 2023.

Heritage buildings

Funding of $0.2 million in 2022 to 2023 will be used to support a project that:

Background

The Greening Government Strategy was established in 2017 with the goal to explore and share innovative approaches to reduce GHG emissions from federal operations. The Greening Government Fund provides project funding to federal government departments and agencies (those that generate more than 1 kilotonne of GHGs per year from air travel or who voluntarily contribute).

The Greening Government Fund (GGF) seeks to fund projects that:

During the development of the previous GGF-funded project on developing a best practice guide for retrofit of heritage buildings, whole building air leakage testing was identified as a knowledge gap for heritage structures.

As such, PSPC and the National Research Council will investigate the specific role of overall air leakage on the energy use in heritage structures by completing a series of whole building air leakage testing on both pre- and post-retrofit heritage buildings, combined with energy and hygrothermal modelling with projected climate change data. The outcomes of the study will inform on methods to measure and account for air leakage on the energy use and long term durability of heritage buildings.

Transfer from the Department of Public Works and Government Services to Treasury Board Secretariat to support financial management transformation initiatives and the Comptrollership Data Strategy

Supplementary Estimates (B): ($1,127,672) in 2022 to 2023

Funding profile

Table 7: Transfer from Public Services and Procurement Canada to the Treasury Board Secretariat to support financial management transformation initiatives and the Comptrollership Data Strategy in fiscal year 2022 to 2023 (in millions of dollars)
Fiscal year 2022 to 2023
Supplementary Estimates (1.1)

Summary

Public Services and Procurement Canada is transferring $1.1 million (vote 1—operating expenditures) in 2022 to 2023 to Treasury Board Secretariat for its contribution to the financial management transformation initiative led by TBS.

Purpose of the funding

PSPC’s contribution will be used by TBS to advance the FMT initiative. The Digital Comptrollership Program within FMT has been tasked with coordinating a large-scale transition for departments leveraging S/4HANA and leading an implementation strategy. It will be responsible for the development, delivery, and maintenance of the Government of Canada SAP digital core template, which outlines key processes or activities that are standard across the GC.

Background

FMT is modernizing the financial and materiel management (FM) business model across the GC, to provide more timely access to reliable, consistent GC-wide information, and ensure that FM services better enable the delivery of programs for Canadians and remain cost effective and sustainable. FMT does so by designing standards, streamlining processes and common data structures, building modernized common systems to replace departmental platforms, helping managers, employees and financial and materiel management specialists to adopt new processes and systems, and aligning financial management systems investments with government priorities.

The FMT sector within TBS’s Office of the Comptroller General (OCG) is leading a multi-year initiative to transform financial management systems within the GC. This transformation includes multiple initiatives including the transition to S/4HANA, development of data standards and standard business processes community management, etc. This work requires close collaboration with TBS policy centres, departments and agencies, large transformation project teams (such as, NextGen human resources (HR), NextGen Travel, the e-procurement solution) and common service departments (such as Shared Services Canada, PSPC).

Currently GC financial management data is siloed and improvements can be made to integrate business processes, increase interoperability and improve financial report creation. As part of these transformation initiatives, a comptrollership data strategy will be initiated to provide the ability to report or measure financial and/or performance results at an enterprise level in a timely, responsive, or agile way with less effort from departments. In addition, this will enable data interoperability with other corporate systems.

Several years will be needed to complete the work which will include establishing the OCG data governance (DG), data strategy, master data management (MDM) plan, data model, and enhancing data standards. A pilot project will also be conducted on real property and asset management to test the adequacy of the MDM and DG from information available in OCG. This work will be done in full alignment with the GC chief data officer and with community engagement. A key element of the work in 2022 to 2023 will be developing a roadmap.

Transfer from the Department of Public Works and Government Services to the Department of Fisheries and Oceans related to the implementation and support of the Laboratories Canada Strategy

Supplementary Estimates (B): ($1,596,847) in 2022 to 2023

Funding profile

Table 8: Transfer from Public Services and Procurement Canada to the Department of Fisheries and Oceans for its hub management office in fiscal year 2022 to 2023 (in millions of dollars)
Fiscal year 2022 to 2023
Supplementary Estimates (1.6)

Summary

Public Services and Procurement Canada is transferring $1.6 million (vote 1—operating expenditures) in 2022 to 2023 to the Department of Fisheries and Oceans (DFO), as lead for the Atlantic Science Enterprise Centre (ASEC), for their active role to support the implementation of phase I of the Laboratories Canada initiative.

Purpose of the funding

Funding is being transferred to the DFO to support the ASEC Hub Management Office as part of the Laboratories Canada phase 1 science hubs. The ASEC hub is focused on improving sustainability of Atlantic fresh and coastal saltwater resources.

The Hub Management Office will be responsible for:

The Atlantic Science Enterprise Centre acts as the integrator between the Laboratories Canada program and the hub’s partner stakeholders to ensure the effective and seamless management of the work to achieve the science outcomes set out under the Laboratories Canada Strategy.

Background

Federal science and technology research is a key priority for the Government of Canada; however, much of the existing infrastructure is outdated.

The Government of Canada owns and operates close to 200 science and research facilities. Limited investment over many years in these facilities has resulted in a portfolio with many facilities at, or beyond, their useful lives. With almost 50% of them built before 1975, the physical, digital and equipment backbones no longer meet modern needs and impede science outcomes and effective decision-making.

PSPC is working in partnership with science-based departments and agencies such as DFO to implement the Laboratories Canada initiative which will revitalize Canada’s science and technology sectors. This initiative aims at providing federal scientists with leading-edge facilities, modern information management and information technology systems, greater access to common tools and reduced policy barriers.

The Atlantic Science Enterprise Centre located in Moncton, New Brunswick, within DFO will support the Government of Canada in understanding, protecting, and sustaining Atlantic freshwater and coastal systems by:

The Hub Management Office ensures that a science vision exists and that integrated science and space requirements foster interdepartmental and external collaboration, while PSPC leads the project management and development of the property.

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