How did one of the ‘best digital governments in the world’ get it so wrong?

Canada is a member of the D7, a self-selected group of nations known for their tech prowess. But a few years back, the Government introduced a system that was supposed to save $70m and somehow cost up to $2.2bn without functioning.

Something was broken in their approach. Minister Joyce Murray spoke with GovInsider about how Canada learned from its failings, and brought a new generation of tech talent into the heart of public service.

Phoenix from the flames

The story may sound familiar to many government readers. Canada had an antiquated payment system, different in every department, and it needed an upgrade. The decision was taken to outsource the entire system in 2009 to a major supplier, IBM, and everything went wrong.

Audit reports blame cost-cutting, poor leadership, and a failure to realise how complex it would be to replace everything at once. “It just caused havoc,” Murray says. “We recognise it’s not fixable, it’s really been a huge burden on our public servants”.


“It just caused havoc”

Government changed tack in 2018, committing to a “completely different approach”, Murray says. Gone was the big outsourcing project with just one supplier. Instead, the Treasury Board decided to use an agile approach with an in-house team guiding it every step of the way.

First, the government introduced trials to let civil servants volunteer for a new system and help build something effective. With data gathered from users, the second phase looked for suppliers who build digital payment systems.

The third phase is just beginning. “We will select a small set of suppliers and give them some real life pay projects as experiments,” Murray says. This will help ensure that they find problems before they introduce it for the whole public service, and avoid the chaos the previous system wrought. It will also allow government to compare between different options.

How to hire tech talent

How did Canada find the talent to help design this new approach? They use a programme called “interchange”, where people join government for short periods to help the public service. Coders and hackers come from Canadian tech firms like Shopify to help their nation and give something back.

Other nations have also successfully used this approach. Italy’s Diego Piacentini took a sabbatical from his senior role at Amazon to found Team Digitale, slashing bureaucracy and modernising government payment systems. Singapore, meanwhile, runs its Smart Nation Fellowship to poach national talent back from Silicon Valley.

Canada decided to bring its tech team into the centre of government, sitting in the Treasury Board so that it works alongside the approval of ICT spending. The Canadian Digital Service now comprises around 200 people, Murray says, and works to solve problem statements set out by Ministries.

One recent problem statement they received was on citizenship. The government was not able to advise people quickly enough about the date of their citizenship exam or ceremony, sending letters that would arrive just before the event was due. This was replaced with a system that sends emails and lets people book appointments online.

We’re all in this together

Murray is also Minister responsible for working with the Open Government Partnership, which is happening in Ottawa at the time of this interview. She sees the movement, alongside the D7 for govtech, as a way to share problem statements globally and work together on solving challenges.

“They are common across governments,” she says, singling out “legacy systems that government has failed to update because it’s not going to get you votes”. Governments hesitate to spend a billion dollars moving to the cloud because “citizens won’t know about that” and that “leads to extra work, frustration, workarounds and inability to produce data.”

For Murray, it’s essential to overcome the problems of the Phoenix system, rebuilding a better public service from the ashes. “It’s essential that we get into the digital age,” she says. “That is not easy, and it’s not fast, but we are committed to it”.

This interview was conducted at the Open Government Partnership Summit in Canada.