Ottawa ready to trash Phénix after sinking $4 billion into it

The federal government is preparing to abandon Phoenix, the payroll system launched in 2016 which cost taxpayers $4 billion (G$) without ever succeeding in paying civil servants well.

Salaries paid late, employees overpaid or underpaid, angry retirees… even today, more than 300,000 pay transactions are pending at the federal government, 213,000 of which are more than a year late.

The beginning of the end for Phoenix came without fanfare. On page 409 of the last federal budget, the government announced $135 million for improve the payroll system and to continue the work on a possible next generation payroll solution.

Alex Benay, the federal official responsible for this file, explains that this funding will give a big boost to the development of the system named Dayforcewhich would be called upon to replace Phénix within a few years.

We had some really good news, in the sense that the government has confidence in our planhe says in an interview with Radio-United States.

After a series of system tests Dayforce concluded in February, the government will now rely on this payroll and human resources management software used by 6,000 organizations, including the governments of Ontario and California.

Caution continues to be required; no one in Ottawa wants a repeat of the Phoenix fiasco, where the system was launched before it was ready. Alex Benay repeatedly insists that there remains a lot of work, verifications and tests to be done before launching the final countdown for the transition to Dayforce.

Despite everything, the government is stepping on the accelerator with its new payroll system project, launched in 2018 with average annual funding of $25 million.

The majority of the new funding of 135 million over one year is aimed at putting the finishing touches on the development of Dayforcewhich will have to pay 420,000 people every two weeks, for annual outlays of 36 billion dollars.

It is no longer a question in Ottawa of trying to repair Phoenix but of replacing it.

We need to change this situation, and I would say that there are starting to be more and more reasons to be able and to want to make a change.

Phoenix’s failures

This senior official is merciless when he describes the Phoenix system, which has been the target of criticism from officials since its beginnings.

Part-time employees, new parents, civil servants receiving promotions or changing jobs: just about everyone has had a taste of it.

: they built systems and tools around Phénix to be able to pay people, so that Phénix works, because the tool we gave them is deplorable. It is certain that the current situation is not viable in the long term. We have employees who work hard every day to calculate payroll: they have built systems and tools around Phénix to be able to pay people, so that Phénix works, because the tool we gave them is deplorablesays Alex Benay.

One of the major problems is that Phénix must operate in parallel with the distinct human resources management systems of around thirty departments and agencies while taking into account around a hundred collective agreements.

It therefore requires a large number of payroll officers to perform different calculations for each department. And when a civil servant changes ministry, a series of technological problems ensue that Phénix struggles to overcome.

With the system Dayforcethe government wants to rely on a single tool which would not only take care of employee payroll but which would also manage the personal file of each civil servant from their hiring until their retirement.

We do not intend to disintegrate (the payroll system and human resources management) a second time and make the same mistakesays Alex Benay.

In addition to the countless problems with the Phénix system, Alex Benay adds that this software will become obsolete in the medium term, the supplier having already planned to stop offering updates within ten years.

According to the Department of Public Services and Procurement Canada, Phoenix initially cost $300 million, with additional spending of $3.5 billion.

While Phoenix’s problems seemed to abate in the early 2020s, delays in processing salaries quickly started again.

While waiting for the transition to a new payroll system, the government wants to use artificial intelligence tools to continue cleaning Phoenix data and to reduce the number of late cases.

The goal is also to ensure that when Phoenix is ​​scrapped, the new system, which will have been gradually implemented in various federal departments, will be able to take off without major problems.

If necessary, the Public Service Alliance says it is ready to review certain rules regarding remuneration to standardize them throughout the federal system. However, she asks that unions participate in the development of the new system and be able to test it before its deployment.

If members do not suffer from this, we are ready to cooperate in setting up a payroll system that workssays Yvon Barrière, regional vice-president of AFPC Quebec. Again, we must be certain that the system will work and that it will not disadvantage our members within the framework of collective agreements.

Another federal employee union hopes the government has indeed retained lessons from the past when the time comes to replace Phoenix.

Eight years after the implementation of the Phénix payroll system at the federal level, approximately a third of employees still report errors in their pay. As long as employees continue to experience problems, the government must continue to offer them compensation and accommodation says Sean O’Reilly of the Professional Institute of the Public Service of Canada.