This seems to be somewhat related to https://bugs.launchpad.net/cpc-
gce/+bug/1639089 (only affects Xenial).

In summary the "pool" entries in ntp.conf should be commented out by
gce-cloud-config but when ntp.conf transitioned from using "server" to
"pool" gce-cloud-config was not updated.

I will be fixing lp:1639089 in the GCE Xenial image build process
initially followed by a fix for gce-cloud-config.

Note that gce-cloud-config is being deprecated in favour of gce-compute-
image-packages which does not have this bug.

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https://bugs.launchpad.net/bugs/1652695

Title:
  GCE default NTP configuration uses both leap-smeared and true UTC
  sources

Status in cloud-images:
  New
Status in ntp package in Ubuntu:
  Incomplete

Bug description:
  A default install of cloud images on GCE results in a configuration of
  NTP which will likely be problematic during leap seconds, because it
  uses both Google's leap-smeared time source, and the public pool,
  which uses true UTC.  These should not be combined in the default
  configuration.

  The principle of least astonishment would suggest that a non-standard
  feature like leap smearing should be disabled by default.

  This behaviour has been consistent in the 3 different GCE regions in
  which I've recently created instances.

  
  root@instance-4:~# cat /etc/cloud/build.info 
  build_name: server
  serial: 20161221

  
  root@instance-4:~# cat /etc/ntp.conf
  # /etc/ntp.conf, configuration for ntpd; see ntp.conf(5) for help

  driftfile /var/lib/ntp/ntp.drift

  # Enable this if you want statistics to be logged.
  #statsdir /var/log/ntpstats/

  statistics loopstats peerstats clockstats
  filegen loopstats file loopstats type day enable
  filegen peerstats file peerstats type day enable
  filegen clockstats file clockstats type day enable

  # Specify one or more NTP #servers.

  # Use servers from the NTP Pool Project. Approved by Ubuntu Technical Board
  # on 2011-02-08 (LP: #104525). See http://www.pool.ntp.org/join.html for
  # more information.
  pool 0.ubuntu.pool.ntp.org iburst
  pool 1.ubuntu.pool.ntp.org iburst
  pool 2.ubuntu.pool.ntp.org iburst
  pool 3.ubuntu.pool.ntp.org iburst

  # Use Ubuntu's ntp #server as a fallback.
  pool ntp.ubuntu.com

  # ... comments snipped ...

  # By default, exchange time with everybody, but don't allow configuration.
  restrict -4 default kod notrap nomodify nopeer noquery limited
  restrict -6 default kod notrap nomodify nopeer noquery limited

  # Local users may interrogate the ntp #server more closely.
  restrict 127.0.0.1
  restrict ::1

  # Needed for adding pool entries
  restrict source notrap nomodify noquery

  # ... comments snipped ...

  # Google NTP source. This was added as part of the gce-cloud-config package.
  server metadata.google.internal

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