Plans to fix federal systems delivering payments such as OAS, CPP and EI are over budget, behind schedule, Auditor-General warns

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The aging computer systems that deliver billions of dollars in direct benefits such as Old Age Security and Employment Insurance are at risk of failure, says Auditor-General Karen Hogan, adding that plans to update them are behind schedule and over budget.

In a pair of related reports released Thursday, Ms. Hogan delivered a highly critical assessment of the federal government’s lack of progress on the issue. One report says it has been more than 24 years since the government first identified its aging IT networks as a critical concern, yet Ottawa still lacks a clear plan to address the problem.

That report looked broadly at the government’s approach to modernizing its IT infrastructure, while the other report focused on a project called the Benefits Delivery Modernization program. The program aims to modernize the systems that distribute OAS, EI and Canada Pension Plan benefits and is the largest project of its kind ever undertaken by the federal government.

The report says the project was estimated in 2017 to cost $1.75-billion, but that has since grown to between $2.7-billion and $3.4-billion. OAS is scheduled to be the first to switch to a modern system, but the original 2023 deadline has been pushed back to next year or possibly December, 2025.

“This audit is important because more than 10 million Canadians rely on these benefits to meet their day-to-day needs, but the information technology systems that deliver them are decades old and at risk of failure,” the report states.

The audit found the government had not finished developing tools to detect and prevent inaccurate benefit payments. That has been a major source of problems with the Phoenix pay system for federal public servants, which was launched in 2016, and Ms. Hogan specifically mentioned that history Thursday.

“While Employment and Social Development Canada’s decision to focus first on migrating the systems rightly prioritizes the continuity of benefits, I am concerned that if challenges and delays continue, decisions could be made to remove aspects of transformation or take shortcuts to maintain the timelines or budget, as happened with the Phoenix pay system,” she said in a statement. “This would put the Benefits Delivery Modernization program at risk of resulting in a final product that fails to meet the needs of diverse and vulnerable client groups, including seniors, people in remote locations, Indigenous people, and refugees.”

The report on IT modernization pointed out that many of these issues were flagged by the Auditor-General in a 2010 report and yet the government has not followed through on promised changes.

“Every day that these systems are not modernized increases the risk that they fail and that Canadians may lose access to essential services,” Ms. Hogan said.

It said some computers have been in use since the 1960s and are at risk of failure. The number of workers with the expertise to manage the outdated machines is diminishing, and in some cases the computers are no longer supported by the vendors, the report said.

“We found that 24 years after the government first identified aging information technology as a significant issue, the Treasury Board of Canada Secretariat did not have a strategy or detailed plan for moving forward with a consistent and common approach to modernizing old information technology systems,” the report said.

The report singles out the highest levels of the public service, saying better leadership and oversight are needed to prioritize critical infrastructure. It points out that there is a deputy minister committee on enterprise planning and priorities that provides advice to the Chief Information Officer of Canada, who is based in the Treasury Board Secretariat.

The audit found that since the committee’s creation in 2015, the deputy ministers have largely focused on 25 IT projects out of some 3,400 that could be reviewed.

“This meant that a key governance mechanism in place to support the government’s modernization efforts had been largely ineffective because it focused on a limited number of projects and did not support the common goal of modernizing information technology systems for departments and agencies,” the report said.

A survey of chief information officers by the Auditor-General’s office found that 40 per cent of respondents said their departments or agencies were not involved when IT modernization projects were prioritized.

Departments responsible for IT modernization and the Benefits Delivery Modernization program responded in writing, stating that they agree with Ms. Hogan’s findings and recommendations and are working to address the issues.

Treasury Board president Anita Anand responded to Ms. Hogan’s findings Thursday.

“We agree with and accept the Auditor-General’s recommendations and we will continue to work alongside departments to address them swiftly and efficiently,” she told reporters at a news conference on Parliament Hill. “Treasury Board has already initiated key priorities and actions across government to modernize our legacy IT systems, combat aging systems and applications and bolster the overall health of our application portfolio to better deliver services.”

Jennifer Carr, the president of the Professional Institute of the Public Service of Canada, a federal union that represents many IT workers, said in a statement that the findings are in line with the union’s warnings about excessive outsourcing.

“The audit report highlights the costly harm done by the Treasury Board Secretariat and Shared Services Canada by failing to properly address the poor health and need for modernization of essential federal IT services and programs,” she said. “For more than a decade, we’ve fought to reduce external IT spending and to improve internal digital health and governance in order to put a stop to the unsustainable over-reliance on outsourcing.”