Costs mount as federal government tries to clear existing backlog in Phoenix by March 2025

Costs mount as federal government tries to clear existing backlog in Phoenix by March 2025
Costs mount as federal government tries to clear existing backlog in Phoenix by March 2025

OTTAWA — Ottawa expects to spend another $963 million to address the chaos surrounding the Phoenix pay system, which has plagued the public service since 2016. The government has not yet said what the final price tag would be if the system is completely scrapped.

The payment system failure has cost the federal government $3.5 billion so far, and that number could rise as the government tries to address a huge backlog of errors and problems.

The backlog must be cleared before Ottawa can finally abolish the error-prone pay system for government workers, said Alex Benay, deputy assistant minister for the Department of Public Services.

The federal government aims to clear that backlog by March of next year. But even as workers handle problem cases, they can’t control how many new problems are added to the pile, he said.

“We have no control over the intake… it has historically increased year over year,” Benay said Tuesday.

According to him, there are still approximately 215,000 unresolved, complex issues with the Phoenix payment system.

The government hopes to have solved more than half of the cases by the end of the year by hiring more staff and deploying artificial intelligence.

Costs expected this year include $162.7 million to develop and test a new human resources and payroll system and to simplify current human resources procedures.

Benay could not say how much the government would spend before the situation is fully resolved, but he did promise that the government would be transparent about any problems that arise along the way.

He said one of the department’s goals this year is to figure out how much the new payroll system will cost if it proves successful.

“Once we get far enough into that process during the year, we will have an idea of ​​what the transformation costs will be,” he said.

The irony, said the president of Canada’s largest public sector union, is that Phoenix’s pay system was designed to save the government millions every year.

Phoenix was introduced in 2016 to replace dozens of outdated payment systems. Instead, the system was riddled with bugs and caused huge and costly disruptions to public services.

“They need to make sure that the next generation payment system is not a Groundhog Day remake,” said Sharon DeSousa, president of the Public Service Alliance of Canada.

“We have been living with this for eight years.”

She said the government should not make the same mistake it did with Phoenix by laying off staff once the new system is up and running, especially if they plan to use artificial intelligence instead.

“There has to be a human element to all of this,” she said. “We definitely got into this mess with Phoenix because they laid off a lot of compensation counselors and the work that they do is so critical to making sure that the payment is actually made on time and accurately.”

The government plans to publish a new update on the payment system in the fall.

This report by The Canadian Press was first published July 9, 2024.

Laura Osman, The Canadian Press