Phoenix pay system
By July 2018, Phoenix has caused pay problems to close to 80 percent of the federal government's 290,000 public servants through underpayments, over-payments, and non-payments.
[1] The Standing Senate Committee on National Finance, chaired by Senator Percy Mockler, sought to examine the causes for the failure, holding "eight meetings with 28 witnesses, including the Auditor General of Canada, union representatives, departments and agencies, officials from IBM, the Minister of Public Services and Procurement and the Clerk of the Privy Council"[1] and paid a visit to the Miramichi pay system location during their investigation.
[1] Instead of saving $70 million a year as planned, the report said that the cost to taxpayers to fix Phoenix's problems could reach a total of $2.2 billion by 2023.
The Office of the Auditor General of Canada also performed an independent audit, and published a report in 2018 that concluded that the Phoenix project “was a incomprehensible failure of project management and oversight”,[2] and that Phoenix Executives did not heed warnings from the Miramichi Pay Centre, costing the federal government hundreds of millions of dollars, and had a negative financial impact on tens of thousands of its employees.
As of October 2024, the system has cost the government more than $3.5 billion dollars; with a backlog of more than 408,000 unresolved pay issues affecting federal employees.
"[19] The Gartner report casts a different picture, specifically predicting there was a moderate possibility that "expectations for accuracy and timeliness of pay may not be met as a result of lack of true end-to-end testing.
"[19] Judy Foote, the Minister of Public Services and Procurement Canada was never briefed on the Gartner report by her departmental staffers.
"[13] By April 2016, CBC News reported that there were thousands of public servants experiencing Phoenix payroll problems with initial complaints about underpayments.
[21] Plaintiffs included 2,000 Parks Canada seasonal employees represented by the PSAC who had worked from April to June without pay.
[25] An independent, third-party firm—Goss Gilroy Inc. (GGI)—hired by the Treasury Board of Canada Secretariat (TBS) and the PSPC in early 2017—undertook a study of the federal government's "activities related to the Transformation of Pay Administration Initiative (TPA) from 2008 to April 2016."
[15] They emphasized the urgency of the issue as Phoenix' pay problems financially affected thousands of public servants in a government with an annual payroll in 2017 of about $22 billion.
[15] The report said that PSPC knew that they had to "analyze all 200 of the programs" that had been added to PeopleSoft "to identify the system-related sources of pay errors".
[15] In November 2017, the total estimated cost to fix the system had increased to $540 million, an amount which the federal auditor general thought was inadequate.
[28] The PSPC has had to pay IBM "additional fees" to "make substantial changes to the software" and hire about 1000 employees to deal with backlogs caused by Phoenix.
[1]: 6 The Office of the Auditor General's May 29, 2018 report concluded that three PSPC Phoenix executives were "responsible for delivering the Phoenix pay system" and that the PSPC Deputy Minister "was responsible for ensuring that a governance and oversight mechanism to manage the project was in place, documented, and maintained, and that the project was managed according to its complexity and risk".
"[18] The report stated that, "Considering the broad intricacies and scope of these processes and systems, the Transformation of Pay Administration Initiative has been a large and complex undertaking with substantial risks.
On November 7, 2019, PSAC's national president said that the "case illustrates the mental toll of Phoenix where there is still a backlog of 228,000 instances of pay errors.
[32] In July 2024, Government of Canada announced the latest goal to clear all Phoenix backlogged cases by 2025, at a cost of $963 million.
Students, new hires, seasonal, temporary and terminated employees were therefore particularly affected, as have those taking or coming back from leave which includes maternity and medical.
[1] To remove themselves from the stress and anxiety that Phoenix has caused them, some employees have opted for early retirement, surrendering their full pensions.
In 2018, the government had announced a plan to eventually scrap Phoenix, but only after a new system with improved technology is put in place.
[40] The Treasury Board’s reasoning for picking three finalists was to give the government flexibility in their decision to make sure they had options in the event they need to pivot to a different solution.
[42] Since awarding the contract in 2021, a special committee named the Next Generation HR and Pay Joint Union Management Committee was created to "advance the mutual goal of discussing and identifying opportunities and considerations for a potential Nextration HR and Pay solution as early in the process as possible and before formative decisions are implemented".
The committee was established to tackle issues, including but not limited to "identifying problematic areas and gaps with regard to Next Generation HR and Pay activities and developing specific solutions , strategies and approaches to address these problems".
[44] The main objective of this committee is to simplify the pay rules for public servants, in order to reduce the complexity of the development of Phoenix's replacement.
