OTTAWA — The federal government remains locked in a battle with telecom companies over $2.4 million in late fees because department phone bills weren’t paid on time.
That number, contained in documents tabled in Parliament this month, hasn’t changed in almost a year since the government first started collection efforts over late fees it says service providers weren’t legally allowed to charge.
So far, however, the companies involved don’t appear to have budged, based on the data contained in the answer to an written question submitted by Liberal MP Arnold Chan.
The $2.4 million in outstanding disputed fees is about two-thirds of the $3.6 million in late fees the government has racked up over the last two fiscal years.
There could be more, but the department told Chan it couldn’t quickly calculate interest charged in the 2014-15 fiscal year without doing a manual search of every invoice it had received.
Ted Francis, a spokesman for Shared Services Canada, the department now in charge of paying phone bills on time, says “efforts continue” to recoup the overdue charges.
Francis says the department has negotiated settlements with some companies, and in the cases of others, is hoping to secure credits on future bills.
Although Shared Services was designed to save money by amalgamating services from more than 40 departments, it stumbled out of the gate and couldn’t keep up with the flood of monthly bills — about 75,000 invoices per month.
It wasn’t until early last year that the department noticed something amiss. Department workers manually went through every invoice and noticed the service providers were charging commercial interest rates of between 12 and 46 per cent.
The government believes the companies aren’t allowed to do that because federal contracts stipulated late charges couldn’t be more than what the government set. The current rate is 4.25 per cent.
About a dozen companies charged the government late fees, with two of them — Telus and Bell Canada — accounting for more than half of the $3.64-million bill, says data provided to Chan.
The documents don’t say which companies have given the government refunds or agreed to credits.
The government has been pushing its cut-the-cord initiative for three years, replacing traditional landlines with mobile devices.
The documents provided to Chan show that over the last three fiscal years, Shared Services Canada has reduced by one-fifth the number of land lines in 42 departments, reducing costs by $33.3 million, or almost 10 per cent.
At the same time, costs for mobile devices such as BlackBerrys and air cards have increased by about 24.5 per cent, or an increase of about $8.7 million.
That would leave Shared Services Canada about $4.3-million short of its goal to save $28.8 million annually by this calendar year. The department says it has met that target through staff reductions that amount to $4.6 million in annual savings.
“The plan always factored in the decrease in number of staff required as Centrex (land) lines were eliminated,” Francis said.
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Jordan Press, The Canadian Press