Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue No. 32 - Evidence - November 30, 2017
OTTAWA, Thursday, November 30, 2017
The Standing Senate Committee on Social Affairs, Science and Technology met this day at 10:31 a.m., to continue its study of Bill C-36, An Act to amend the Statistics Act.
Senator Art Eggleton (Chair) in the chair.
[Translation]
The Chair: Welcome to the Standing Senate Committee on Social Affairs, Science and Technology.
[English]
Today we continue with our consideration of Bill C-36, An Act to amend the Statistics Act. Before I introduce our witnesses, we will start by introducing ourselves. I’m Art Eggleton, a senator from Toronto and chair of the committee.
Senator Seidman: Judith Seidman from Montreal, Quebec. I am deputy chair of the committee.
[Translation]
Senator Poirier: Rose-May Poirier from New Brunswick.
[English]
Senator Raine: Nancy Greene Raine from British Columbia.
Senator Doyle: Norman Doyle, Newfoundland and Labrador, sitting in for Fabian Manning.
Senator Dean: Tony Dean, Ontario.
Senator Cordy: Jane Cordy from Nova Scotia.
[Translation]
Senator Petitclerc: Chantal Petitclerc from Quebec, deputy chair.
[English]
The Chair: We have two panels this morning. On the first panel, I am very pleased to welcome two former very distinguished Chief Statisticians of Canada. We had the current Chief Statistician yesterday and today we have two former chiefs, Ivan Fellegi and Wayne Smith. We’ll start with Mr. Fellegi.
Ivan Fellegi, Former Chief Statistician of Canada, as an individual: I made a presentation about Bill C-36 to the Standing Committee on Industry, Science and Technology in the other chamber. Since the version of the bill that you are discussing today is identical, with apologies, I will make very similar points to you.
Bill C-36 is a major improvement over the present Statistics Act, and I am very happy to acknowledge that. Yet, while I celebrate the improvements, I think it would be a great loss if a once-in-a-generation opportunity like the present one were not exploited to bring in a truly model Statistics Act. I would like to recommend for your consideration six possible improvements, of which at least two I think are quite crucial.
First, I would suggest that you give careful consideration to the United Nations Fundamental Principles of National Official Statistics. It has been accepted and Canada has endorsed it. It is a very important preamble that sets out the reasons why trust in official statistics is crucial for the sound functioning of democratic processes and why the professional independence of the national statistical office is a critical element of this trust.
A similar preamble of Bill C-36 would similarly set a context for the act and could play a major role in guiding its future interpretation by the courts and by others. I recommend you give consideration to including such a preamble.
Second, I think the proposed method of appointment of the Chief Statistician leaves a lot to be desired. This is a position requiring a deep knowledge of the quality issues of official statistics and what makes them trustworthy, an understanding of the multiplicity of information needs of governments and society, and a demonstrated ability to manage a complex, highly specialized yet multidisciplinary organization.
I strongly urge you, in case of a vacancy, to consider requiring the establishment of a search committee of eminent and appropriately knowledgeable people for the purpose of searching for and putting forward to the Prime Minister a short list of qualified persons. Such a search committee could be composed of retired governors of the Bank of Canada, retired clerks of the Privy Council, retired Chief Statisticians, the President of the Statistical Society of Canada and so on.
The search committee should be required not only to passively review applications for the position but also to arrange an active search. The Chief Statistician’s is a highly specialized position, and I am asserting, based on six decades of national and international experience, that an essentially passive application process without an active search component will not work well and has not worked well in the past. Let me emphasize that, in my view, these are the two major considerations I would recommend for your attention.
The new proposed bill gives a great deal more authority on professional issues to the Chief Statistician. That makes it much more important that he or she should be properly qualified. An appropriately composed search committee should have that task.
Still, on the appointment process, I welcome the establishment of term appointments to be served during good behaviour and the fact that the term is renewable, but I suggest that you consider allowing more than just one renewal. If you have an outstanding person in the job, why should you preclude at least the possibility of a second reappointment?
Fourth, as I mentioned before, giving the Chief Statistician control over the statistical methods to be used and over the timing and methods of dissemination is at the heart of the proposed changes. However, it is a major flaw, in my view, that Bill C-36 leaves open the possibility of the Chief Statistician being overruled on a methodological issue by the responsible minister. I underline on a methodological issue. The safeguard of transparency proposed in the current version of Bill C-36 would not have worked in the case of the 2011 census.
This aspect of the proposed Statistics Act also explicitly violates the United Nations Fundamental Principles of National Official Statistics, of which the Government of Canada is a foremost signatory. As I mentioned, it leaves the door wide open for a future repetition of the 2011 voluntary long-form census, which actually triggered the current amendments proposed in the new Bill C-36.
Fifth, the problem is exacerbated by the fact that the scope of the census is not specified, and this leaves the door even more widely open for a future government to opt for a short-form census with perhaps a voluntary long form that would be called a survey.
Finally, I suggest that you specify some skill requirements for the members of the proposed Canadian statistics advisory committee. I also suggest that you increase its size. It needs to represent a variety of disciplines, skill sets, client groups and geographical locations.
I thank you for your attention, and I’d be happy to answer your questions.
The Chair: Thank you very much, Mr. Fellegi. Now we will hear from Mr. Wayne Smith, another former Chief Statistician.
Wayne Smith, Former Chief Statistician of Canada, as an individual: Thank you very much. Before making my comments, I have been conscious of the fact that this is really the twenty-third hour in terms of this legislation. This is the last chance, so I’m going to focus my comments on what I think to be the most important issue.
The principal purpose of Bill C-36 is to provide the Chief Statistician of Canada and the organization led by the Chief Statistician, Statistics Canada, with the level of professional independence that is necessary to protect the credibility of Canada’s official statistics, as Ivan has just said. That is, the production and dissemination of Canada’s official statistics — from inflation to unemployment, and from GDP to the population census — should be, and should be seen to be, free of any inappropriate external intervention, whether from political or other sources.
Canada has actually long had a convention of providing this level of professional independence to its Chief Statisticians, and the convention has been broadly respected by successive governments. However, international practice and the recommendations of the United Nations and the OECD call for the protection of the independence of the national statistical office to be instituted in law. The government, to its credit, is moving to make this a Canadian reality.
My predecessors — notably Dr. Fellegi — and I have been significantly involved in the creation of international frameworks for the independence of national statistical offices. As Chair of the Conference of European Statisticians, I helped to provide the impetus for approval of the principles of official statistics by the UN General Assembly. As a member and vice-chair of the OECD Committee on Statistics and Statistical Policy, I proposed and provided support to the development of the Council of Ministers’ Recommendations on Good Statistical Practice. These two documents, along with national legislation of other modern democracies, provided the benchmarks against which Bill C-36 should be measured.
I’m going to focus my comments on one egregious flaw in the legislation that fundamentally undermines the achievement of its objective. Bill C-36, as Ivan has just said, does an effective job of protecting the professional independence of the Chief Statistician, and thereby Statistics Canada, once the Chief Statistician has been selected. It provides a fixed term of office on good behaviour. It clearly assigns powers over how the statistical program is conducted directly to the Chief Statistician, it requires any direction given to the Chief Statistician be done publicly, and so on.
Where it fails, and critically so, is in the process of selection of the Chief Statistician. Bill C-36 sets down no provisions, no requirements for the selection process itself. This is somewhat surprising from this government given that, in opposition, it tabled private member’s bills that featured a clearly prescribed process for the selection of the Chief Statistician as a key element in instituting his or her professional independence.
With respect to this bill, the government has said that no provisions are required because of their new approach to merit-based Governor-in-Council appointments, but I believe it is clear to everyone that this new approach to appointments is not legislated, it is not binding on this government in general or for specific positions, and it is certainly not binding on future governments of whatever type.
The government is saying, “Trust us,” but it could have said as much for any provisions of Bill C-36. The selection process is the most fundamental provision. What point is there in protecting the professional independence of the Chief Statistician if the Chief Statistician can be selected based on his or her willingness to do the bidding of the government? I’m saying to you that the approach should be trust, but legislate.
The reality of the new appointment process appears to be that individuals can apply to be considered for appointments — but, if I understand correctly, not deputy minister positions which the Chief Statistician is considered to be at present — but any transparency or external validation of the application of the merit principle is completely missing from that point on. Such a process hardly inspires confidence that the most qualified person will be identified and selected as Chief Statistician.
What I am proposing to senators is that, if they do nothing else, they propose amendments to Bill C-36 to include a clear and transparent selection process for the Chief Statistician of Canada. This process should include the following features.
It should be stated clearly that the basis of selection should be demonstrated competence and experience at management levels in the domain of official statistics, as well as demonstrated competence and experience in managing large organizations.
It should be stated clearly that the Chief Statistician must be bilingual.
The search for the most qualified candidates should be conducted by a search committee of three persons who are or have been major non-political stakeholders in the national statistical system. Some examples might be governors of the Bank of Canada, former clerks of the Privy Council Office, provincial or federal deputy ministers of major policy departments, the president of the Statistical Society of Canada, chartered bank vice-presidents for economic research, and so on.
And the search committee should propose a short list of the three most qualified candidates to the Clerk of the Privy Council Office for consideration by the Governor-in-Council.
While I have other quibbles with aspects of Bill C-36, and I share many of the ones that Dr. Fellegi has just raised, as well as with the general framework ensuring the professional independence of Statistics Canada, I believe this one issue is so critical that I would prefer not to dilute my message at this time in my opening remarks. I will happily respond to any questions you have on any other aspects of the bill during the course of my testimony.
I thank you for affording me the opportunity to address this important topic.
The Chair: Thank you very much to both of you for your input. Now we can engage in questions and answers with the committee. I think two questions per member would probably keep us on the path of time, but if not we’ll have to make adjustment accordingly. We will start with the proposer of the bill, Senator Cordy.
Senator Cordy: Thank you very much for being here. It’s always nice to have people who have actually done the job and have expertise in the job.
You both spoke at length about the selection process for choosing a Chief Statistician, and you certainly don’t want somebody who gets the job because it’s politically motivated. You both have articulated very clearly the position is a highly technical one. It’s a position that somebody has to be very well qualified to do. We don’t want a Chief Statistician who doesn’t understand how to go about collecting data in a scientific manner. So I thank you for all of your comments on that.
Maybe I haven’t paid enough attention, but I cannot remember a Chief Statistician selected by either a Liberal or Conservative government in power who was a political appointment. The ones I recall have all had tremendous expertise in this area.
Was there a case where somebody was appointed as the Chief Statistician and was not qualified? Maybe I just didn’t pay enough attention, because I’ve not ever heard of that, no matter who was in government.
Mr. Fellegi: I prefer not to name names, but, yes, there was somebody who was not qualified, not for political reasons but otherwise. I don’t want to go any further because of the individuals involved. But, yes, it has happened.
Conversely, Statistics Canada now has a tremendous reputation and a good one. It’s hard to remember that in the late 1970s, it was a front-page item in many newspapers for scandals and supposed professional missteps and so on, and at that time we needed a transformative Chief Statistician.
The one and only time in Statistics Canada’s history when a search committee was constituted of the kind that Mr. Smith and I are talking about — and they found the transformative Chief Statistician who wouldn’t have applied because he was vice-president of AT&T, being paid probably five times as much as the offer from the Government of Canada — the committee basically appealed to his conscience to come back to Canada and take on this transformative job — and, boy, did he transform Statistics Canada.
I have examples of both when the current proposed method didn’t work and, conversely, when the method we are advocating of an active search committee worked and resulted in a transformative change to Statistics Canada.
Mr. Smith: I would add two comments. In terms of somebody who was clearly a political appointment, I agree that there has not been one. But the issue is whether the person was most qualified and I would raise some issues about some of the appointments made in the past.
As I said in my remarks, by convention, the various governments have, broadly speaking, respected the political independence of Statistics Canada. So the bill is about reinforcing that independence, as opposed to fixing a problem that is demonstrably there and has been violated egregiously.
For the same reason that justifies all the other measures in the bill, the call for a search committee is justified on the basis of preventing future abuse rather than remedying past abuse.
Senator Cordy: And you’re both absolutely right that Canada does have a great reputation internationally for Statistics Canada and for Chief Statisticians that we’ve had in place.
I think it was you, Mr. Fellegi, who talked about the size of the council, that 10 was not the right number. We heard yesterday from the current Chief Statistician, Mr. Arora, the minister and the deputy minister, and their comments related to the sizes. I’m not sure how one selects the perfect number — is it 10, 11 or 15 — but they felt there were enough other advisory boards to represent the provinces and the territories and that there are a number of provincial and federal advisory boards for the Chief Statistician.
This board is similar to the Chief Statistician; you want people with specific skills. Whether they live in the Yukon or whether they live in Toronto or whether they live in Halifax, that’s not the first criterion. The first criterion is what skills are they bringing to the advisory board for the Chief Statistician, for the information that he or she would need, because they are getting regional representation from the other provincial-federal advisory boards. It was a surprising number to me, the number of advisory boards that they actually have for the Chief Statistician.
Mr. Fellegi: They do, but they don’t report to Parliament, those other advisory bodies of Statistics Canada, at least. The proposed new council has an overview role that the others don’t. So it’s in quite a different category and one doesn’t substitute for the other.
This is not my major issue, though. As I mentioned, this is something that I thought I would raise because it’s my experience that Statistics Canada is engaged in so many different fields that to compose an advisory group that represents at least even the major fields is potentially difficult with only 10 members. But it’s not the big issue.
[Translation]
Senator Petitclerc: My question complements the previous one. We talk a lot, as we did today, about transparency and accountability, but above all about independence. The point you raised about the selection of the chief statistician is somewhat along the lines of what we heard in committee from Professor Thomas, if I am not mistaken. In your opinion, is your proposal for a more specific and detailed selection system in harmony with, consistent with, The United Nations Fundamental Principles of Official Statistics, or with the best international practices used around the world?
Mr. Smith: The document called The United Nations Fundamental Principles of Official Statistics is one of the two important documents that affect Canada. The notion of professional independence is a key factor in that very important document, which Canada has endorsed. Mr. Fellegi played a role in developing the document and I played a role in approving it for the United Nations General Assembly.
The other document is the OECD Recommendation. This document is very specific. It sets out a large number of criteria for the way in which a chief statistician must be selected in each country, as a way of determining whether the national statistics agency is truly independent. Canada has also endorsed that document. An interesting feature of the document is that it requires a periodic evaluation of each member country. At some point, therefore, the Organization for Economic Co-operation and Development, the OECD, will take a look at the measures written into Canada’s legislation. It may well raise the issue if the selection process does not seem to be provided for in the legislation. So it is very important, and it is reflected in the documents that provide the international standards.
[English]
Senator Seidman: Thank you both very much for your presentation this morning. You’re both former Chief Statisticians for Canada and you speak with a good deal of credibility. I take very seriously your emphasis on the failings of the selection process for the Chief Statistician. You’ve both emphasized that and so I think we must take seriously what you say.
Now, you talked about the selection process. I think, Mr. Smith, you have delineated the features that the process should include. You draw our attention to the fact that the process used to select your successor doesn’t typify the process that’s delineated, or the lack of process that’s delineated, or the principles, I should say, that are in the current bill.
I’d like to ask you specifically about some of those features that you pointed out in the process, but I’d like to ask you about the end point because, specifically, you say that the search committee should propose a short list of the three most qualified candidates to the Clerk of the Privy Council Office for consideration by the Governor-in-Council. Then I’d like to go to the final end point — and that is the actual determination of who, in the short list, should become the Chief Statistician — and ask you: Is there anything in your experience that might suggest extending parliamentary scrutiny of that appointment process to your former position? In other words, should there be the kind of scrutiny we use for an officer of Parliament, for example, where both houses get the opportunity to ask questions and make determinations?
Mr. Smith: I’m very sympathetic to that idea. There is a precedent in the United Kingdom where there is a parliamentary committee that reviews the appointment of the national statistician.
I have two concerns. One was about making the process so lengthy that, if you had a vacancy, it might be a very long time before you actually saw someone appointed. But I would certainly be very open and supportive of carrying it to that next step, but I think it would be very difficult to sell.
Mr. Fellegi: I’ll just say that I thought your question included whether, in the past, there was any such consideration, and there wasn’t. The position, at least since the 1970s, has been a Governor-in-Council appointment. It was like any other deputy minister. Somebody was appointed and God only knows how.
Senator Seidman: I’ll just go back then. I appreciate you saying that it’s within the realm of possibility to consider something like that.
Now I go back to the fact that both of you say that the selection process fails badly and that just relying on some theoretical concept of merit-based, without having real criteria and a delineated process, is a huge failing.
Both of you are saying that. How could you see us amending this legislation to ensure remediation of this failing?
Mr. Fellegi: I think we both indicated a potential process and the kinds of people. Within that cadre of expertise, I think we would be quite happy to leave it to ongoing senior appointment processes, the Privy Council, to actually nominate from the kinds of people that we have included on both of our very much overlapping lists of the sort of expertise that should be on such a committee.
Senator Seidman: Mr. Smith, would you actually want the process to be well delineated, according to your very clear presentation?
Mr. Smith: Yes, I would. There was a private member’s bill that was presented to the house from the previous Parliament, by a Liberal member. It included drafted language for such a process, with one significant oversight: It didn’t provide any criteria for the basis of selection, which should be remedied. But it would be a place to draw inspiration from, as well.
The Chair: Let me inject a clarification here. You’re both talking about a search committee when a vacancy occurs that includes knowledgeable people.
Do you know that in the current kind of process, particularly in recent years, whether these kinds of knowledgeable people are consulted on the appointments by the government before it makes the Governor-in-Council appointments?
Mr. Fellegi: To the best of my knowledge, no, except for the one case that I mentioned earlier where a search committee was actually constituted and they were very much engaged in a wide-ranging exploration of both the criteria and the type of person who might satisfy them.
The success of that process inspires me further to recommend to you such a search.
The Chair: It could even be done under current processes.
Mr. Fellegi: It could. There is nothing against it, except that one instance.
Mr. Smith: The current process, as it normally works, is led by the Clerk of the Privy Council Office when there’s a vacancy, and the clerk draws on a significant body of information about people known to the government in the process of making a selection. It’s not simply turning to a room and saying, “Who do we like?” It’s obviously a much more sophisticated process, designed, usually, to get someone who is highly qualified — not necessarily the most qualified, because the range of people being considered is too narrow, generally speaking.
It comes down, again, to the difference between “what happens might happen” as opposed to “what is legislated to happen.” Legislating it binds the government to follow this course of action. Whereas, in relying on convention, as we have up to now, we haven’t done badly — at least we don’t think so. Other people might, though.
Senator Poirier: Thank you, gentlemen, for being here.
Mr. Fellegi, you mentioned in your comments — and I know Senator Cordy talked about this — the size of the committee. Last night when we had the minister in for questions, there were a couple of questions we talked about. I brought up the situation where we’re talking about the team of 10 people that would be the new council and it would have a new mandate and different expertise.
I’m wondering if you can explain to me if there could have been a possibility that the existing council would have had a change of mandate and could not have chosen among those who were there. Did they not have the expertise they needed at that point? Could that not have been a possibility in your view?
Mr. Fellegi: I certainly think you are right. In fact, that would have been my preference. The current National Statistics Council is working wonderfully well, and I say that as an ex officio previous member as Chief Statistician and as a current member as retired Chief Statistician.
It has a very broad range of expertise. It’s very collegial, it’s consultative, and it understands its mandate. The one change that is really different in the proposal is the reporting to Parliament, which can be added as an additional function.
Furthermore, the current council is unpaid. I was always impressed by the motivation of very exceptional people to come regularly to meetings that last two days each, twice a year, without being paid a penny for doing so, just out of an interest and commitment to official statistics.
Senator Poirier: We talked about that last night with the minister, and he told us they would not be paid; they would just receive per diem to cover expenses. That’s what I understood.
Mr. Fellegi: That’s the case currently as well.
Senator Poirier: Second, in the last paragraph of your comments, you also recommended: “It needs to represent a variety of disciplines, skill sets, client groups, and geographical locations.” Last night, again, when I questioned the minister about the 10-person council and how we were going to retain regional representation, he said that with the new council, you could have four or five come from P.E.I., for example. It’s going to be based more on merit and skills. If I understood right — and I think I did — it looked like regional representation, for him, didn’t seem to be of importance. I would like your thoughts on that.
Mr. Fellegi: It’s not the most important consideration, but it is an important consideration, because it’s a perspective that is brought that is really quite different from different regions. The lived experience of people in P.E.I. is not the same as the lived experience of people in Alberta. There is a perspective that is brought which is an understanding of what major public issues are in that province that are brought to the table.
I should emphasize, in this context, that Statistics Canada is not serving just the federal government. It’s the national statistical office of the country. It’s supposed to serve, just as much, the needs of provinces, municipalities and other interest groups as it does those of the federal government.
Regional representation is not an unimportant consideration when it is a function of Statistics Canada to satisfy the regional needs as well.
Senator Poirier: Thank you.
Mr. Smith: I would like to add my entire support to the position taken by Dr. Fellegi. My experience with the council — and I have extensive experience with the council as well — is that broad sectoral and regional representation is important to providing the kind of advice the Chief Statistician needs from this group. The minister will now benefit from it, as well.
A council smaller than 24 members is going to make it difficult to get that level of broad representation. I agree that transforming the existing National Statistics Council into this body would have been a desirable path, even though it wasn’t one that was followed.
So I would just like to be clear that I’m entirely in agreement with what Dr. Fellegi said.
Senator Poirier: Thank you.
Senator Omidvar: I have two separate questions. Maybe we can share them around. Thank you both for being here.
My first question is around the selection of the Chief Statistician. With the legislation in front of us, the Chief Statistician will now be considered a deputy head of Stats Canada rather than a deputy of the minister.
I want to ask you whether in government there are other positions at the same level and whether they use a process of selection as described by you, or is it left up to the deputy minister or the Privy Council to make the appointment? Is there a proxy position similar to the deputy head of Stats Canada? I’m looking for coherence here.
Mr. Smith: There’s a wide variety of practice. Generally speaking, all deputy minister positions have been traditionally appointed the same way.
Senator Omidvar: Exactly.
Mr. Smith: The President of the Public Service Commission is slightly different. The Governor of the Bank of Canada is dramatically different because it’s a different kind of agency. So there really isn’t, to my knowledge, a clear equivalent case where a similar approach has been taken.
I was very involved in the development of this legislation before I resigned. I’m very aware we were looking for these kinds of precedents and not really finding something that was a good match for what we’re trying to achieve.
Senator Omidvar: As you’re looking for precedents, can you tell us how similar jurisdictions choose their chief statisticians? Australia or the U.K., maybe?
Mr. Smith: In the U.K., there’s a national statistician, and there’s a parliamentary process for that selection. In the United States, as in the United Kingdom, there is a large number of them, and it’s a political appointment, like all senior positions.
Mr. Fellegi: It’s subject to senate approval.
Mr. Smith: Yes.
In Australia and New Zealand, there are similar approaches to here. There’s a slight difference in New Zealand, but it’s escaping me in terms of the process. In many other areas, there is a lot of coherence internationally in the approach, but not in the particular issue of how the Chief Statistician is selected.
Senator Omidvar: Will there be a second round, chair?
The Chair: We’ll put you down for a second round. I don’t know that we’ll get to it but we’ll put you down to it.
Senator Raine: Thank you for coming. It’s very important to us.
My question is for Mr. Smith. You stated that one of the reasons for your resignation was that Shared Services Canada was impeding the day-to-day operations of Statistics Canada.
In your view, would Bill C-36 maintain the status quo with respect to the relationship or, if not, can you explain the changes? Is this still an issue?
Mr. Smith: It’s still very much an issue. Statistics Canada was required to turn over the hardware component of its information technology operations to Shared Services Canada. It was done in a way that didn’t create any kind of accountability back to Statistics Canada from Shared Services. The money and staff were taken and transferred.
It’s no secret to anyone, I don’t think, that Shared Services Canada struggled. The government commissioned Gartner to write a report that was devastating in terms of his criticism of what has been done and was pessimistic about the government’s ability to make this work going forward.
Coincident with my resignation, I didn’t know it at the time but RCMP Commissioner Paulson was writing similar letters to Shared Services Canada.
The reason for my concern at the time was because there had been numerous delays in delivery of service. There were demands for enormous amounts of additional money and repeated failures of the infrastructure. It seemed to be getting steadily worse and I asked to be able to take back control because I also felt it was incoherent with the independence of Statistics Canada. If someone can stop Statistics Canada from operating or disseminating its data, they have some measure of control over the ability to produce and disseminate, which is exactly what the bill is trying to avoid: someone outside Statistics Canada having that kind of authority.
Since I left, Statistics Canada has transferred $20 million of additional funding to Shared Services Canada to provide services they were already funded to provide. This is money that could have been used in the statistical program. Their website was shut down at one point by Shared Services because of a software threat and an argument was used that this was to protect personal information when there was no personal information involved. That’s how they justified the shutdown.
They were servicing an air conditioner unit and failed to manage it properly. It brought down the entire operations of the main data centre supporting Statistics Canada.
It goes on and on. I know my predecessor says he’s fine with it, but I’m not as a citizen watching it. I don’t think it has been solved or is likely to be solved. I look at Shared Services Canada and I see a snail version of Phoenix that’s taking a longer time to reach a critical stage, but it’s still undermining operations at Statistics Canada and other operations across government.
Senator Raine: Is this addressed in the bill?
Mr. Smith: I’m sorry, no. There’s language in the bill that, if the Chief Statistician of the day was to invoke it, would raise questions. It says the Chief Statistician is responsible for all operations. Well, that includes IT, so does that mean he or she has the authority to take that operation back?
The issue is whether a person who’s appointed under the selection process, for example, is going to take the initiative to raise that issue. At the moment, Statistics Canada is on a path that’s burning bridges behind them as they move forward. They’re closing down the data centre on their site and moving into a shared data centre, and at that point it makes it difficult in that regime to regain any physical control over that hardware.
The bill doesn’t make anything happen. It opens a door but I don’t think anyone is going through it and, ultimately, I don’t think it will change anything unless there’s a dramatic change in the direction of the government.
Senator Dean: Thank you. I’m going to follow up on the chair’s earlier comment around the search committee concept.
Generally speaking, listening to your experience, the appointment process doesn’t appear to have worked that badly. We have one example of one person who, absent political interference, perhaps wasn’t considered to be the best person for the job.
That being said, I’m a fan of search committees. I have used them as a CEO and I have sat on them. They work well in what I might call the filtration process and the credibility of the process.
However, they are not inoculated from bias, are they? My question will come. Just like other parts of the process, search committees are not inoculated from bias. I would fully expect, even without an amendment to this bill, that search committees would be employed from time to time, as they frequently are. I would just say that, as a CEO, there have been times when I didn’t need or want a search committee because my view was that it would add no value.
I’m of the view that, perhaps, appending an observation to our committee report highlighting the importance of a search committee as one element of a suite of processes and procedures available in selection processes would be an important thing for consideration. At this point, I’m not convinced that it would require an amendment, for all of the reasons I’ve just stated.
Could I have some reaction to those observations?
Mr. Fellegi: Yes. As both Mr. Smith and I mentioned, the past is not a terrible example of what happened. In fact, we have a personal stake in saying that some Chief Statisticians were pretty well qualified when they were appointed under the current process.
But the whole point of the new bill is to strengthen the independence of Statistics Canada by assigning — among other things — explicit, unvarnished responsibility for methodological issues to the Chief Statistician. That makes it all the more important that the person should be well qualified and there should be a transparent process for appointment.
We’re talking about a discontinuity, not a continuity. The continuity was not bad. There was one trigger for this amendment to the Statistics Act and that was the voluntary long-form census. Apart from that, it hasn’t been a bad system.
But we are talking about setting up a much-strengthened independence process and, as part of that, we’re saying it’s that much more important that the Chief Statistician should not only be properly qualified but seen to be properly qualified and have the credibility that the additional responsibility now assigns to him or her.
Mr. Smith: I guess my reaction is that I’m very much in line with what Ivan just said. History suggests we’ve done well overall; we’ve made some mistakes in selecting Chief Statisticians.
Again, I think the issue here is that, first of all, going forward, our having done well doesn’t necessarily mean we’ve done the best we can. A search committee is, to some extent, about doing the best we can. Ivan gave an example of one case where by approaching someone who never would have applied meant we found an extraordinary Chief Statistician.
Governments to date, generally speaking, have respected the independence of Statistics Canada. Governments, generally speaking, until 2011, have respected the need for a fully mandatory census. It’s about avoiding that one occasion where somebody says, “I’m annoyed by the way the unemployment numbers are coming out and embarrassing us. The Chief Statistician has resigned; I’m going to pick somebody I can tell what to do.” Is that ever going to happen? I don’t know.
In the same way other measures in the law are trying to prevent things that have never really happened, in the interests of solidifying the independence of Statistics Canada, I think the selection process is a part of that and should be embedded in the legislation.
Mr. Fellegi: If I may just add very briefly, this is something that hasn’t happened in Canada but has happened in other countries. I’m not talking about just totalitarian countries. It has happened in Argentina, for example, where the consumer price index was manipulated to be about a third or a fifth of what independent estimates put it at. There are several other examples I could quote. It’s not as if it hasn’t happened internationally; it hasn’t happened in Canada.
Senator Dean: Just so that I can be clear, I absolutely agree with everything you’ve said about the importance of independence, professionalism and inoculation from interference in this process and from the work of the Chief Statistician. I was simply asking and suggesting that the requirement for a search committee is not an inoculation in itself against any of the concerns that you and I have. Thank you.
[Translation]
Senator Mégie: I am following on Senator Raine’s question, which was more or less the question I had. Your answer, it seems to me, was that the bill likely contains nothing to change anything in the relationship between Shared Services Canada, the SSC, and Statistics Canada, given that it is about infrastructure, air conditioning, and so on. But given that you brought it up, have you thought of a solution for the future, for the next chief statistician?
Mr. Smith: For me, the solution would be to return the control to Statistics Canada. Not the physical control, but the management of its entire IT infrastructure, with the servers and everything. It is Statistics Canada’s responsibility to get those services, to send back the budget that has been transferred, and to negotiate an agreement with Shared Services Canada that would return complete control of the IT management to Statistics Canada. That implies that Statistics Canada must have the authority to go elsewhere for those services or to provide them itself. That is even in the report —I am not talking about Gardner’s — where the same ideas are mentioned and where it clearly states that it would be much better if Shared Services Canada worked on a cost recovery basis, if the budgets had not been transferred, and if departments had the option to employ suppliers of their choosing rather than being required to employ Shared Services Canada.
An appendix to the Shared Services Canada Act is needed in order to accomplish that. It is very easy for the government to do so if it wants, but it did not want to. Although legislation opens doors, I do not get the impression that the government’s attitude has changed. It is maintaining its course with Shared Services Canada and does not want any department to detract from Shared Services Canada’s portfolio.
Senator Mégie: So there is no room for it at all?
Mr. Smith: It would be difficult to slip it in. This is what the government wants. I imagine that it would be possible to say in the act that Statistics Canada must keep complete control over all its information technology, but that would be somewhat of a strange provision.
[English]
The Chair: Thank you very much. That’s it for round one. I have two requests for round two. We only have five minutes left. I would ask Senator Omidvar and Senator Raine to quickly ask their questions and then we will ask the witnesses to respond.
Senator Omidvar: I have a gift for you; my question has been asked and answered, so I will refrain.
Senator Raine: I would like to ask if there’s anything in the law that would prevent interference in deciding whether it should be a mandatory census or — what did they call it the other day — a voluntary survey?
Mr. Smith: I was involved in the drafting and looking at this issue. Nothing has been changed in the law that would help prevent the same thing happening again in 2021. The provisions respecting the census are still largely the same.
Senator Raine: But they are the purview of the Chief Statistician?
Mr. Smith: No, because the approval of the content of the census is done by Governor-in-Council. It’s still a feature of the law. Nothing in the law sets out the scale of a census. The census can be nine questions or 51 questions. For the 2016 census, we had — I don’t know what the number was — 35 mandatory questions. Everybody who was asked to answer those questions had to answer them.
Any future government could use the same device that was used in 2011. The government said the census is nine questions. Therefore, everything else is a survey and, being a survey, it can be voluntary and it is voluntary. Those provisions are identical in the law today.
Senator Raine: Are the statistics gathered through that survey form, if you like, valid?
Mr. Smith: They’re valid in the sense that — the voluntary survey conducted in 2011 was a perfectly viable statistical project, but it couldn’t achieve the objectives of a census, which is to provide high-quality data for small area, small populations, such as Haitians in Flin Flon, Manitoba. You used to be able to estimate that. Because of the declining and very changeable response rates across the country, we largely lost the ability to provide reliable estimates in small areas. In fact, for 25 per cent of the small municipalities we published nothing because we didn’t have reliable data.
In 2016, we have the most reliable data we’ve seen in a census, actually. Oddly enough, the response rates were remarkably high. It shows a difference. We have high-quality, useable data down to small geographies and for small populations in 2016, which was largely absent in 2011.
Senator Raine: Was it voluntary in 2016?
Mr. Smith: No, it was mandatory. It went back to mandatory and we demonstrated the power of going back to mandatory by showing what could be accomplished.
Mr. Fellegi: There are two ways under the current bill that the 2011 voluntary census could be replicated. One is Mr. Smith’s scenario of the government saying it’s only the short-form questions that are the census and everything else is a survey and therefore voluntary.
The other scenario is the Chief Statistician says it should be mandatory because, in my view, methodologically, that’s the only sound way of collecting small area, detailed data and the government overruling the Chief Statistician through a transparent process as specified by Bill C-36 but has the authority, still in Bill C-36, to overrule the Chief Statistician on a methodological issue.
So there are two scenarios whereby a future government can essentially trigger a repeat of the 2011 voluntary census.
The Chair: Thank you very much to both of you. We’ve appreciated your input, knowledge and experience over many years. It’s very valuable for us in our deliberations on Bill C-36.
We have come to the close of this panel and will have another panel starting in a few minutes.
We are now into panel number two, and we have representatives from Shared Services Canada: Ron Parker, President; Sarah Paquet, Senior Assistant Deputy Minister, Strategy; and Raj Thuppal, Assistant Deputy Minister, Networks and End Users. We are about to find out how they relate to Bill C-36 on the Statistics Act.
Ron Parker, President, Shared Services Canada: Thank you for the opportunity to discuss Shared Services Canada, its role and strong relationships with our customers, such as Statistics Canada.
You mentioned I’m accompanied by Sarah Paquet and Raj Thuppal. They’re intimately involved in supporting our customers.
[Translation]
I would like to begin with a few words on SSC’s mandate. We deliver the IT infrastructure for the programs and services that Canadians receive from the government on a daily basis.
[English]
When Canadians check the weather, cross the border or apply for key benefits, Shared Services Canada is behind the scenes ensuring the stability of those services.
The department is mandated to provide a range of services that are essential to government operations. This includes the delivery of email, data centres, network and workplace technology services, as well as cyber and IT security.
Protecting and securing the integrity of systems, networks and information from cyber-threats is a top priority for SSC. We work with our cyber-partners and federal security agencies to protect networks against cyberattacks and keep the data of Canadians safe.
We also benefit from some strategic partnerships such as the international Five Eyes security and intelligence network, which includes the U.S., the U.K., Australia and New Zealand.
[Translation]
With the creation of SSC, the government is in a better position to take swift, preventative and corrective action in terms of cybersecurity.
[English]
In 2014 we established a perimeter defence through our Security Operations Centre, which provides 24/7/365 protection, detection and response recovery services. The centre has greatly improved our ability to respond to cyber-threats against the government.
As an example, it played a leading role in successfully managing a vulnerability earlier this year that affected computer services worldwide, including those of departments such as Statistics Canada.
The vulnerability was identified in March of 2017. It affected specific servers running a software called Apache Struts 2. Shared Services Canada worked collaboratively with the Communications Security Establishment, Public Safety, the Treasury Board Secretariat, Statistics Canada and all other departments that are our partners to identify and rectify the situation. Though some services were not available during brief periods, no data was lost or altered in any way.
We were able to quickly react, in large part, because the government’s IT infrastructure is managed as an enterprise rather than in silos, which was the practice in the past. This approach gives us an overall view of networks and the ability to respond quickly to common threats facing departments that are within our security perimeter.
As a service organization, we understand that our customers, like Statistics Canada, hold us accountable for the services we provide. This is why our number one priority is to understand and meet their business and security requirements.
[Translation]
We are proud of the work we have achieved over the past year to respond to the expectations of our customers, who acknowledge the benefits of the enterprise model. And they tell us what that we are doing better. Our monthly customer satisfaction survey scores are steadily improving.
[English]
When we first started the survey, our average score across our 42 customers was 2.8 out of 5. As of October 2017, we reached 3.4. This is an important amount of progress. Our score, for Statistics Canada, has consistently been above our customer average since October 2016. In October 2017 it was 3.5.
I want to be very clear. SSC’s IT infrastructure does not impact or compromise, in any way, the independence of Statistics Canada or any other organization.
Shared Services Canada has a strong working relationship with Statistics Canada at all levels and we have achieved a great deal together. For example, Canadians were able to participate, in record numbers, in the 2016 census using Shared Services Canada’s IT infrastructure services.
The IT services provided by SSC for the census consisted of data centre, network, security and communications systems, hosted in a state-of-the-art enterprise data centre. There were no IT infrastructure issues for the duration of the census.
To reinforce our working relationship with the agency, the Chief Statistician and I have made a joint commitment. We established a strong governance structure between our two organizations that includes a joint committee of deputy ministers to oversee all of Statistics Canada’s information technology projects.
The Chief Statistician and I made a deliberate decision to bring the Statistics Canada and Shared Services Canada teams together to work in an integrated manner. The overall objective is to modernize the information technology services that the agency relies upon to deliver programs to Canadians.
Thus far, the team has increased the storage available to Statistics Canada by 150 per cent and computing capacity by 400 per cent. This is to meet its current and future business requirements.
In the short term, we will continue to address the agency’s expanding program requirements by augmenting computing and storage capacity, among other initiatives.
[Translation]
We are also addressing medium and longer-term needs. This includes work to close a legacy data centre. We are moving servers to a modern data centre to increase reliability and security.
We know how important the census is for Statistics Canada. That is why planning for the 2021 census has also already begun.
[English]
In addition, the agency has identified a new requirement for data analytics solutions, so we are working to address this business requirement.
Statistics Canada and SSC are also collaborating to develop the Statistics Canada renewal program. This is an integrated plan to outline the agency’s needs.
Shared Services Canada also works with the lead security agencies, such as the RCMP, Communications Security Establishment, Public Safety and Treasury Board Secretariat. We work collaboratively to ensure the security posture of data centres meets or exceeds Government of Canada requirements from both a physical and IT security perspective. This collaboration is instrumental to providing secure services to Canadians.
Let me be clear, Statistics Canada continues to have full control over its data, as it always has.
[Translation]
In closing, I would like to reiterate that we take the confidentiality and security requirements of our customers extremely seriously. It is, and will continue to be, our top priority.
Thank you, Mr. Chair. My colleagues and I would be pleased to answer your questions.
[English]
The Chair: Thank you very much for your opening presentation. You’ve told us clearly what you do and how you relate this to Statistics Canada.
Senator Cordy: Thank you very much. It’s great to have Shared Services Canada here.
We know that the census and the other data that is provided by Statistics Canada provides evidence-based material for policy development and for legislation with the government, so it’s extremely important that they have the data done correctly.
We’ve heard two sides to Statistics Canada working with your department. We heard from Wayne Smith. When he appeared before the House of Commons, he said that Shared Services Canada was handling confidential respondent information under the terms and conditions that existed and that it was a violation of the Statistics Act. In fact, he resigned because of the work with Shared Services Canada.
But we heard the current Chief Statistician yesterday who said Statistics Canada is responsible for keeping the data confidential, not Shared Services Canada, that Shared Services Canada indeed provides a service, which is what your name entails, and that you don’t share the information. He also said that over the past 15 months, great strides have been made in IT. Mr. Arora also said that he believes in working in collaboration with Shared Services Canada and that they have strengthened the relationship with Shared Services Canada.
Today, you have talked about the strong working relationship that you have with Statistics Canada and that you’re working in an integrated manner. You also spoke, as the current Chief Statistician did, about the importance of collaboration.
Could you give us your story about working with Statistics Canada, particularly with the Chief Statistician? Have we come ahead far? Is there indeed collaboration and a great working environment, or is there not? Because we’ve heard both sides.
Mr. Parker: First of all, I would say all of the Shared Services Canada employees that work on Statistics Canada projects or provide services to Statistics Canada take the oath of secrecy that is required under the Statistics Canada Act. They are bound by the oath, just as any other Statistics Canada employee is. The Chief Statistician has the ability to deem them to be employees of Statistics Canada.
There’s no doubt that the elements of the oath apply. They are bound to it. It’s a legal requirement, and there are sanctions if anyone violates that oath.
From that perspective — and I’ll talk about the collaboration — I’ve found that central to any relationship, any organizational arrangement can be made to work. It’s all about the tone from the top and the leadership.
The Chief Statistician and I share the same objectives for our organizations: to deliver the best possible services that we can to Canadians. My experience over the past two and a half years in this role has been that, if the organizational leadership wants that relationship to work, the rest of the organization comes into line. That’s the message that both the current Chief Statistician and I sent to our teams. By working as an integrated team, we have achieved, I think, more than any of us could have individually.
In terms of growth in the capacity of Statistics Canada, with the computing and the storage that I mentioned — and there are a number of other fronts in terms of mobility for staff out in the field — these aspects of expansion of capacity are huge. One hundred and fifty per cent in storage and 400 per cent in computing, that is a huge achievement together.
I think the benefits are there, particularly around security. I talked about that in my opening remarks. The benefit from the 24/7/365 security surveillance that’s going on — the monitoring, the detection, the ability to respond quickly — was not there before the establishment of Shared Services Canada. The perimeter is stronger, the defences are stronger.
This is IT and cybersecurity, however, it is inevitable that some aspect of your defences will be breached and it then becomes a case of responding quickly and effectively to that breach. That’s what the model is proving out. It’s stronger than it could be if individual departments ran their own services, because we have an overview of the entire Government of Canada network. We have the overview of what’s happening and how to deal with the situations as they arise.
For me, senator, there’s no doubt that it’s working, and we see it across the entire breadth of our customer base. The increase in customer satisfaction is significant. It’s incremental. From a base of major cultural change, organizational change — and that’s where we’re coming from — it’s incrementally getting better every year.
Senator Cordy: In response to a question this morning, Mr. Smith used the words “Services Canada” and “Phoenix” in the same sentence. Whenever those two words are put together, it sends a chill around the room. But you’ve said that you’ve had a 150 per cent increase in storage. You said that security perimeters and defence are more secure and stronger than ever.
We heard the same thing from Mr. Arora, who appeared before the committee yesterday. He said, as I think I said earlier, that, over the past 15 months, great strides have been made.
I understand, as you’ve said, that nobody can prevent breaches, but it’s how you respond. Do you feel as confident as anybody could feel in your response time and your response to any perceived breaches when we’re looking at security perimeters and defence? Do you think that it’s better that we’re working collaboratively with various government departments, rather than each one on their own, that you’re able to respond more quickly and able to avoid as many breaches as possible?
Mr. Parker: I am confident that it is a vastly improved situation. In fact, when you go out and talk to the Five Eyes community, Canada is the envy of that community because of the visibility and the ability across the network to deal with this as a unified enterprise. That is key because you’re only as strong as your weakest link in the cyber- and IT world.
There is a very strong consensus that security is better. It’s enhanced, but I’d never underplay the risks that are there.
If I could just talk about the comparison to Phoenix —
The Chair: Briefly though, please.
Mr. Parker: Okay. What we have been dealing with is the establishment of Shared Services Canada. Not all of the success factors were in place at the beginning.
Ministers Qualtrough and Brison, in the recent mandate letters, have been charged with ensuring that Shared Services Canada is resourced and is able to deal with all of the IT infrastructure needs of the Government of Canada in an appropriate manner.
We’re dealing with those issues in a straightforward, visible way. We have consulted extensively on that. We have had external reviews, and the ministers will be championing this as we go forward.
Senator Seidman: Thank you very much for your presentation, Mr. Parker. We heard from former Chief Statistician Wayne Smith about the IT problems plaguing StatsCan as a result of infrastructure provided by Shared Services Canada.
For example, there was an incident in June at the Ottawa data centre involving a leaky air conditioner that resulted in a 30-hour outage, with basic replacement equipment being procured from the United States. Mr. Smith called this a careless error, exacerbated by obsolete equipment that is the responsibility of your department.
What measures has Shared Services Canada taken to maintain and replace the infrastructure in the Tunney’s Pasture data centre since June of this year?
Mr. Parker: In broad terms, when Minister Foote came on the scene as a representative of the government, we raised the criticality of the legacy, mission-critical infrastructure. Budget 2016 allocated $383 million to deal with the legacy infrastructure that had deteriorated as it went beyond end of life. We have undertaken to replace, over a two-year period, a significant portion of the mission-critical infrastructure, and StatsCan is part of that.
In terms of that specific issue, that was attributable to a cracked piece of plastic following a maintenance period. The departments responded quickly. One of the core issues was that the incident caused an emergency power outage which brought down the entire data centre. When data centres lose power, this is not a good thing. The equipment is extremely sensitive, and then you have trouble bringing it back up because pieces get broken. So we sourced the parts as quickly as we could from the vendor of the equipment and undertook the repairs.
The core issue here, though, for me, is that the data centre is extremely old. It’s outdated in terms of the infrastructure around it. We have new enterprise data centres that are state of the art, where these types of issues do not arise. You have different methods of heating and cooling and supplying electricity networks that render them much more robust. The core piece of this is to help and work with Statistics Canada to move their workloads, their applications, into a much more robust data centre and reduce the business risk that is being run owing to the age of those legacy data centres.
Senator Seidman: I guess I’m still trying to understand the response to the question I asked. Has Shared Services Canada actually taken steps to assure the way that one could assure — of course, there are always extenuating circumstances that are beyond anybody’s control. But, in terms of careless error and obsolete equipment, how is Shared Services Canada going to respond to those particular problems, serious problems?
Mr. Parker: Well, as far as I know, there was no carelessness involved. The piece of equipment, a coupling, simply cracked following a maintenance period and that’s a risk with plastic.
It terms of the replacement of the equipment, we have programs underway to replace old, outdated equipment. That’s what I’m referring to from Budget 2016. There is a gradual replacement cycle that’s taking place. That’s at a rhythm that’s determined always with the departments because they have operational requirements. They have to continue to run, so you have to respect those periods.
We’re working with the department to replace equipment, bring in new equipment, and, more fundamentally, working with StatsCan on the plan to get them out of that old data centre that has the creaky infrastructure around it.
Senator Seidman: I just wanted to ask how the quality of information technology services offered to StatsCan by Shared Services is assessed. Is it on an ongoing basis? Is there some kind of formal, built-in process? If there is a disagreement between StatsCan and Shared Services, is there some course of action?
Mr. Parker: There is a set of business arrangements that we have put in place that stipulate the responsibilities of each party. Beyond that, for each service Shared Services Canada offers, there is a service level associated with that service. We commit to attaining those service levels. We don’t always hit them. If there’s an outage where the part is not available in Canada, for whatever reason — the supplier doesn’t have it in stock — that outage can last longer. Needless to say, we talk to the vendors if we find that, under the agreements, the parts aren’t available as they’re supposed to be.
Yes, there are service levels. We also survey our customers monthly with respect to their level of satisfaction. So there is ongoing feedback in that regard.
[Translation]
Senator Petitclerc: Thank you for your presentations.
[English]
Senator Seidman, you took my question a little bit, but I want to go a little deeper, so I will continue.
I’m trying to understand the nature of the relationship between Shared Services Canada and Statistics Canada. To follow up on that, we talked a lot about independence and transparency for the Chief Statistician who, I think even more with this bill, is really in charge of operations.
If the Chief Statistician, for example, is not satisfied with security, delivery, technology, methodology or anything you provide, who’s the boss and what is the relationship? If there is something — not necessarily a conflict — but what is the process and how does it work to resolve that?
Mr. Parker: There are several aspects to that question, I think.
First, there is no dependency of Statistics Canada on Shared Services Canada from any of the statistical methods or operational methodologies that Statistics Canada has. That’s their domain and they also have control over who can access their data and how it’s accessed. All of those issues are under the sole purview of StatsCan.
In terms of security, Shared Services Canada will provide whatever level of security that Statistics Canada stipulates. It’s up to the customer to say what they want, and then we’ll meet it. That kind of interdependence is not there, in my view.
Senator Petitclerc: How about cost? For example, if Statistics Canada wants to go ahead with a survey or something and there’s a cost associated with that, how does it work? Maybe I should know the answer, but do they have options if they’re not happy with the cost to go somewhere else?
Mr. Parker: If they have a new survey or program, for example, departments will have gone to cabinet to get the policy approval for that survey, generally. At that time, a funding decision is made. Part of what homework we would have done with StatsCan would be to say, “You have this kind of survey; it has this kind of IT requirement,” and we would have provided a cost estimate for that service. Then it goes through all of the other processes.
At the end of the day, there’s funding set aside for StatsCan’s infrastructure that we receive and we use that funding to help support that new program.
That’s the process. It’s new. It requires new funding.
Senator Petitclerc: Okay.
The Chair: Just to clarify that. For example, if StatsCan says, “Okay, we’ve developed the content. Here’s the methodology.” There may have been some revision from the time they went to cabinet or Treasury Board, but if they say, “This is it” and you say, “It costs $5 million.” If they can’t afford that, having only $4 million in the budget, how does that get squared without compromising the methodology and the content?
Mr. Parker: In that event, there will be a decision by Statistics Canada around what their operational parameters are and if they need exactly what they had outlined previously.
Generally, contingencies are built into these estimates, so it doesn’t arise very often. Since I’ve been at Shared Services Canada with StatsCan, I haven’t seen a circumstance in which that has arisen.
Senator Poirier: Thank you. I had one question, but now I have two, because I have a followup from yours and this discussion.
Say, for example, you don’t get to a negotiated amount or an amount that’s feasible, what happens then? Is there another agency out there that StatsCan can go to to see if they can get the service they need to do that survey from somewhere else?
Mr. Parker: In terms of the IT infrastructure provision, we bring transparency to that. We explain to the customers what the source of the costing is, so it’s very clear.
In terms of our acquisition of equipment, for example, we benefit tremendously from having the bulk buy of the Government of Canada. The type of pricing we see is far superior to what any department could get on its own.
In terms of where the world is going, one of the new services we will be offering is the ability for departments to access cloud services —compute and storage — offered by companies like Microsoft, Google and Amazon. There will be alternative sources of supply of services like compute and store for departments.
We’ve just established the contracts to permit departments to seek those services for data that involve unclassified data. We will be bringing a procurement process for departments to use data that are classified up to Protected B.
It will be up to the department to decide which service they wish to use, the security requirements and where they want to put the data. If it’s super sensitive, they can look at other protections to be put in place. There’s going to be flexibility in terms of the overall direction departments can go in terms of getting service.
Senator Poirier: Thank you. Back to my original question. As was mentioned earlier, Mr. Arora talked yesterday about the relationship between StatsCan and Shared Services, and how it had improved over the last 15 months.
Going back to your opening comments today, there were quite a number of places during your comments where you mentioned and talked about that improvement, such as the score of StatsCan being above the customer average. You talked about the relationship between the two groups, and you talked about the two organizations and the integrated manner. There were many times you talked about how everything has improved and how good the relationship has been. Congratulations on that part. It’s excellent.
But in today’s world, even though things are perfect, there are always challenges out there. What is your major outstanding, pressing challenge right now for Shared Services with respect to continuing to improve the relationship with StatsCan? What is outstanding and still needs to be worked on?
Mr. Parker: The issues we would face with Statistics Canada are not dissimilar to the issues we face with a broad range of departments.
I would start with governance, overall. We need to have better IT planning by the whole Government of Canada. We’re focused on that and Statistics Canada is part of that, having that longer-term view to where you’re going, the pace at which you’re going and the IT requirements.
I referenced that not all the success factors were in place when Shared Services Canada was established. Part of it is governance, because one aspect of this was that there was no process by which to manage demand. Shared Services Canada has a fixed appropriation. If there was growth, there was no provision in the original establishment of Shared Services Canada to accommodate that growth.
We’re seeing huge growth and demand for digital services across the government, so that needs to be dealt with from a governance perspective.
Another issue is the ability to consistently charge for services, if they’re new, above the appropriation, is another issue.
There is a broad range of functional capabilities, such as the ability to have a regular cycle program that replaces equipment, such as I talked about for Budget 2016. That has to be addressed as well.
Shared Services was established in the first place, in part, because the Auditor General observed in 2010 that there were huge gaps in the renewal of IT infrastructure. The conclusion was no department on their own could afford to do this. Shared Services Canada was established to provide a common base across all of the departments that is more cost effective, modernizes and brings the service and improves security.
Senator Raine: Thank you very much. I would like to follow up along the same line as Senators Petitclerc and Poirier earlier.
I understand that Statistics Canada is a client of Shared Services Canada, which is an enterprise that relies on charging their clients based on the service they provide.
I’m curious about how you set your prices. You alluded to their being negotiated back and forth, but how does the client get feedback from your enterprise as to how their money is being spent? Obviously, the cost of Shared Services Canada is not under their control at all, whereas when they were providing their own data services they could control those costs. Now, they can’t.
As I see it, they really are obligated to deal with an effective monopoly in these services. How do you report to them on how their money is being spent?
Mr. Parker: We approach it from the enterprise point of view. There’s been established a deputy ministers’ governance committee that reviews our strategic plan, our forward plan and the expenditures we plan to make. I will report out to them, take their feedback and adjust the plans according to the overall priorities set by the enterprise.
In terms of what we do now, I think we work with the customers when they come in to explain. We take their requirements and we decompose them into bits and pieces. They have transparency as to how those bits and pieces are priced and costed, and through that process we come up with a price.
Going forward, as I mentioned, there will be alternatives for the departments to decide where they want to take the service, whether they want to go to a cloud provider like Amazon, Google or Microsoft — there are many of them — or continue to receive the services required from Shared Services Canada.
I think that’s an important innovation. It will also lead to clear benchmarking for Shared Services Canada in terms of having actual market alternative prices for departments. I think it’s a good evolution in the maturity of the organization overall.
Senator Raine: You’re saying it has been a monopoly but will no longer be a monopoly, except with regard to classified information. Can you explain to me the levels of classification with respect to Statistics Canada?
Mr. Parker: I’ll ask Mr. Thuppal to handle the classification issues.
Raj Thuppal, Assistant Deputy Minister, Networks and End Users, Shared Services Canada: Broadly, there are two categories of information. One is called designated information, which is unclassified Protected A, B and C. On the classified side, it is classified, confidential, secret and top secret.
Most of the data that Statistics Canada deals with is in the designated categories of Protected A and B. That’s where most of the information is and those are most of the services we provide to them.
Senator Raine: Does an outside cloud service provide that level of protection?
Mr. Thuppal: The contracts we have established are for the unclassified data. We will be looking at the other options in working with Treasury Board’s CIOB and CSE to see what it would mean to provide higher-classification cloud services.
Mr. Parker: We will be launching procurement for classified services up to Protected B from the commercial cloud service providers. The contracts will have the security requirements that are stipulated and, in order to bid, the cloud service providers will have to meet those security requirements.
Senator Raine: Thank you very much.
The Chair: Mr. Smith mentioned the Gartner report, which was a consulting report, as I understand it. I think it had a lot to do with Phoenix. I don’t know what it had to do with you. Can you explain any relationship with that?
Mr. Parker: It actually was focused on us. There was a different Gartner report that was done with respect to Phoenix, so there are two reports circulating. The redacted summary is available on the Treasury Board Secretariat website.
Minister Brison was mandated, in his first mandate letter, to have an external, independent review done of Shared Services’ forward plan and that’s what is being referred to. It was released in May 2017. My take on it is it explained what was missing when Shared Services Canada was established in terms of those success factors and how to deal with it.
The number one item in that report was governance and establishing IT infrastructure priorities across the Government of Canada and other mechanisms to ensure that the appropriate items are getting actioned.
The other aspects were focused on service. It reviewed the resourcing of Shared Services Canada around the ability to provide service to our customers and how to improve the service.
Another aspect of the report we’re talking about is how to provide alternative services if the capacity of Shared Services is limited. What do you do in those circumstances? So, in many respects, the plan had those elements and we’re implementing them.
The Chair: Mr. Smith indicated the report was rather critical of Shared Services Canada. Are there things you’re correcting in that regard? Is that covered by the comments you just made?
Mr. Parker: Exactly.
The Chair: Thank you.
Senator Poirier: Thank you. As you know, right now the committee is looking at Bill C-36, An Act to amend the Statistics Act, which was passed in the House of Commons. My question is on Bill C-36. I want to know your opinion of how it affects you at Shared Services Canada. Is there something in it you don’t like? Is there something in it you do like? Does the bill even have anything to do with Shared Services Canada?
Mr. Parker: In my view, what we’re discussing today has nothing to do with the bill.
Senator Poirier: Thank you.
Senator Raine: I have a follow-up. We’ve been hearing that the appointment of the Chief Statistician is critical to the success of Statistics Canada.
When you said that you needed to deal with governance, how is the Chief Statistician’s role, relationship, in terms of governance with Shared Services Canada?
Mr. Parker: The Chief Statistician’s role is not related to his appointment, but related to his or her participation in the Government of Canada-wide governance processes that are set up to determine priorities for Shared Services Canada. To me, it’s quite indirect in terms of the relationship that is described in the bill itself with the process of appointment. It follows more on how does the individual work within the Government of Canada system and the accountabilities.
Senator Raine: Yes, but if your process of selection doesn’t include the need to have those skills, then you could wind up with a dysfunctional relationship.
Mr. Parker: I think that skill set, when you come to a deputy head level, is a very commonly shared set of skills.
The Chair: Thank you very much, Mr. Parker, and to your colleagues, for being here. You’ve told us what Shared Services Canada is about and its relationship with the Statistics Canada agency, and we appreciate that very much.
Colleagues, we are now about to adjourn, but we will have a steering committee after. Second, we are back at this next Wednesday evening. Wednesday and Thursday are set aside for Bill C-36, both of them.
With that, I declare the meeting adjourned.
(The committee adjourned.)