Public service unions have urged the federal government to speed up the backlog of payroll problems affecting the bureaucracy after marking the ninth anniversary of the rollout of the beleaguered Phoenix pay system.

“It’s not a big ask. Most employers in this country, if they ran into the same issues in paying their employees that the federal government does, [would find] the federal government, provincial government, or municipal government would probably be going after them,” said Professional Institute of the Public Service of Canada (PIPSC) president Sean O’Reilly. 

“But we [public servants], for some reason, don’t have those same protections, and we have to suffer greatly. So we want a commitment to actually fix this once and for all.”

Feb. 28 marked the ninth anniversary of the Phoenix pay system’s initial implementation. Within months of the payroll system’s rollout, thousands of problems had been reported with under-, over-, and non-payments. Initially intended to save the government $70-million, the failures of the Phoenix system have cost at least $3.5-billion to date.

The most recently available data from Public Services and Procurement Canada’s (PSPC) Public Service Pay Centre shows that, as of Jan. 29, there is a backlog of 372,000 transactions, of which 197,000—or 53 per cent—are more than a year old.

The backlog of transactions that are over a year old dropped by 4,000 between Jan. 1, and Jan. 29. During that same period, 112,000 new transactions were received, and 123,000 were processed.

The government does not want any backlog of more than a year to be transferred to the replacement for Phoenix, to be known as Daybreak. As reported by The Hill Times in January, officials are due to decide by the end of this month whether the new human resources and payment platform can be implemented next year. 

PSPC associate deputy minister Alex Benay told reporters on Jan. 22 that a “go/no-go recommendation” for the Dayforce platform would be made by March 31, but that implementation could take another 18 to 20 months. Testing had shown a success rate of 88 per cent in processing 1,000 different transactions.

In the meantime, the government is using a virtual assistant tool that uses artificial intelligence to help clear the backlog. That AI system is being used to fix discrepancies in pay and compensation services. Benay told reporters at the January conference that two boards will oversee the use of AI, while a third-party review of the tool will take place over winter.

In October 2024, Benay said the government had planned to tackle 112,000 backlog cases by the end of the fiscal year.

The Hill Times reached out to PSPC to ask whether that figure was still the target, and whether any targets had been set for the 2025-26 fiscal year. In an emailed statement, a PSPC spokesperson said the fiscal year results would be available on April 28, when the next HR and Pay Quarterly Progress Report is published.

The spokesperson said the 112,000 backlog cases target was broken down into three categories: 19,000 to process backlog cases with financial impact; 12,000 to eliminate Shared Services Canada (SSC) priority and backlog cases; and 81,000 to process backlog cases during routine processing.

As of the end of January, 75 per cent of the backlog cases with financial impact target had been reached, compared to 80 per cent for the eliminate SSC priority and backlog cases target, and 71 per cent of the process backlog cases during routine processing target.

"We have made significant progress processing transactions since the beginning of this fiscal year," the spokesperson said. "For instance, the total number of transactions ready to be processed has decreased by 52,000 since April 2024, from 424,000 to 372,000 as of the end of January 2025."

The latest quarterly progress report for the integrated human resources and pay strategy shows 2024-25 projections of $77.3-million for Dayforce testing and configuration, $45.2-million for PSPC to continue exploring a new human resources and pay solution, and $22.7-million for the Treasury Board of Canada Secretariat to simplify HR processes and procedures.

As for current operations, PSPC projected $354.5-million in 2024-25 for the pay centre and compensation advisers, $250.3-million for pay applications and IT support, $89.1-million for pay administration, $69-million for business support and internal services, and $47.8-million for the client contact centre.

Meanwhile, public sector unions have used the ninth anniversary to call for action, as well as compensation for those still affected by the pay problems. In a Feb. 27 press release, the Public Service Alliance of Canada, which represents approximately 240,000 workers, said it has formally requested to start negotiating an extension to the Phoenix general damages and severe damages claims process. The union is seeking an expansion of the settlement—which was reached in 2020 and compensated workers affected in the first four years of the program—from 2020 to the present day.

“Every single pay issue in the backlog directly impacts a worker and their family, people who have waited years to retire, changed jobs, but still aren’t being paid correctly, or returned from maternity leave wondering if their pay will be accurate,” said PSAC national president Sharon DeSousa. “Three out of four cases aren’t resolved on time, and the delays are only getting worse. At the current pace, it will take another decade to resolve every pay case in the backlog.”

PIPSC—which represents approximately 57,000 members—issued a joint statement on Feb. 27 with the Canadian Association of Professional Employees—which has approximately 25,000 members—stating that Phoenix demonstrated “what happens when governments prioritize outsourcing over investing in their own workforce. Public servants have the expertise, dedication, and understanding of complex government operations that external contractors simply cannot match.”

O’Reilly told The Hill Times that members are in constant contact with PIPSC about continuing pay problems, including those who have already retired from the public service.

“I saw one last week where this gentleman had been retired three or four years, and he got a letter saying he owes them money. He's like, ‘I have no idea what this is, I don’t have access to my pay files anymore, and they’re sending me a lender saying I owe money,’” he said. “So, it's still this cryptic information that's coming from the pay centre, and it's still not in a state where there's actually a client service that our members should be receiving.”

O’Reilly said he did not blame those working at the payment centre, who he said were working hard. Instead, he blamed understaffing for the situation.

As for what the union wants to communicate to the public, O’Reilly said many of those outside the public service were not aware the Phoenix problems remain ongoing. He said that it is important to stress how much money the payment system problems had cost taxpayers.

“What I would tell the Canadian public is that when the Government of Canada is outsourcing like the Phoenix pay system, it's going to cost taxpayers more in the end,” he said. “As a taxpayer myself, I don't want that. I think people fail to forget sometimes that Canadian public servants are taxpayers too, and we don't want to see that waste.”

sjeffery@hilltimes.com

The Hill Times