Update on Phoenix stabilization planning, investments and employee support

Context

This note focuses on the efforts and progress to stabilize the Pay System, support employees, as well as financial investments in Phoenix.

Questions related to investments in the Next Generation pay solution should be directed to the President of the Treasury Board.

Questions related to the Employee Assistance Program and mental health support should be directed to the President of the Treasury Board.

Suggested Response

• Supporting employees facing pay issues and making sure they are paid accurately and on time is a top priority.
• As part of our ongoing efforts we have increased our compensation workforce to more than 2000 employees.
• We have ensured public servants facing pay problems can request emergency payments.
• We have also focused efforts on priority files such as parental leave, disability leave, student pay and collective agreements implementation.
• We continue to build strong partnership between departments, unions and all stakeholders so that pay transactions can be processed quickly and accurately.

If pressed on the Auditor General Commentary on the 2018-19 Financial Audits:

• The Government of Canada welcomes the findings and commentary of the Office of the Auditor General, along with other recommendations and reports on the Phoenix Pay system.
• Lessons learned are being addressed as the Government collaborates with unions, other departments and agencies, and federal employees to stabilize pay.
• The Pay Pod model was adopted and rolled out to avoid the accumulation of late transactions and develop collaborative working relationships with departments and agencies.
• Now that pay pods are fully implemented, the Pay Centre is meeting service standards more often, while reducing the overall queue and backlog.

If pressed on support to employees:

• We have improved services offered by the Client Contact Center to provide better support to employees, including the ability to resolve pay issues in a faster and more effective way at the first point of contact.
• The Client Contact Centre escalates cases of hardship so they can be addressed quickly, and agents are trained to respond to situations where employees may be in distress.
• Across Government, progress has been made to increase mental health awareness. Work continues to better equip managers, practitioners and leaders on how to address pay-related mental health issues in the workplace and to inform employees of the services and support tools that are available, including flexible repayment options.

If pressed on pay pods:

• We have completed the roll-out of the Pay Pod model to provide better services to employees served by the Pay Centre. Now all organizations served by the Pay Centre have transitioned to the Pay Pod model, representing more than 200,000 employees.
• Pay pods provide better services to employees in departments and agencies served by the Pay Centre by handling employee files holistically to process current intake within the effective pay period, while also working through the backlog and addressing outstanding cases.

If pressed on funding:

• To continue stabilizing the current pay system, Budget 2019 provided $21.7 million in 2018-2019 and $523.3 million over five years, starting in 2019-2020.
• This investment will help address existing pay issues and prevent new problems from occurring while work on a new pay system is underway.

Background

Office of the Auditor General (OAG) Commentary on the 2018-19 Financial Audits

The Office of the Auditor General (OAG) issued its Commentary on the 2018-19 Financial Audits in December 2019, following the Government’s tabling of Public Accounts. The Commentary observations state that there has been limited improvement with respect to pay errors. Despite this, the OAG states that pay expenses were presented fairly in the Government of Canada’s 2018-19 consolidated financial statements. The OAG also recognizes that pay is a complex and shared responsibility across government.

The report focusses on a few key elements, including:

• Backlog
• Pay errors in 2018-19, due to overpayments and underpayments
• Pay element complexity
• Effectiveness of Pay Pods
• Timeliness and accuracy of data

Total Investments to deliver pay andrespond to Pay Issues is $1.177 billion:

• $50M (2016) Public Services and Procurement Canada (PSPC)—build capacity, enhance technology, employee support.
• $142M (2017)—build capacity, enhance technology, employee support. This included $15M for Treasury Board Secretariat (TBS) and $127M for PSPC.
• $431.4M (Budget 2018) PSPC/TBS - build capacity, enhanced technology, and employee support.
• $5.5M (Budget 2018) Canada Revenue Agency (CRA)—process income tax reassessments needed due to pay issues.
• $16M (Budget 2018) TBS—work with experts, federal public sector unions and technology providers on a way forward for a new pay system.
• $523.3M (Budget 2019) PSPC—ensure adequate resources to address pay issues; support system improvements.
• $9.2M (Budget 2019) CRA—process income tax reassessments needed due to pay issues.

Auditor General of Canada and House of Commons Committee Reports

• On May 29, 2018, the Auditor General tabled a second report entitled “Building and Implementing Phoenix,” which reviewed the development and implementation of the Phoenix Pay System. It proposed five recommendations to strengthen the project management and development of government-wide information technology projects under PSPC’s responsibility.
• In response to this report, PSPC and TBS each provided an action plan. Work is ongoing to implement recommendations. An Integrated Plan was developed, which facilitates the monitoring of progress on multiple areas of HR-to-Pay stabilization, including capacity improvement, system stability, process efficiency and HR data accuracy.
• The House of Commons Standing Committee on Public Accounts (PACP) studied the aforementioned report and tabled its own on November 19, 2018. The committee made six recommendations to PSPC and TBS to report on key improvements. PSPC and TBS tabled their response in March 2019.

Senate Report

• The Senate Committee on National Finance published a report in July 2018 examining the causes of Phoenix pay system challenges. It included five recommendations focused on identifying priorities for processing pay requests, staff capacity, reporting frequency, alternative solutions for complex pay requirements, and the development of options to replace Phoenix.
• The Government tabled a response to this report on February 22, 2019.
• The Minister of Public Services and Procurement and Accessibility appeared before the Committee on April 3, 2019.

Accomplishments

• Increased the compensation workforce to more than 2000 employees. This figure includes: more than 1500 employees at the Pay Centre and regional offices; approximately 300 employees at the Client Service Bureau; and about 200 employees at the Client Contact Centre.
• Completed the roll out of the Pay Pod model to all departments and agencies served by the Pay Centre in spring 2019.
• Provided ongoing training to compensation advisors, compensation assistants, employees and managers to improve their overall knowledge of Phoenix.
• Ensured that employees facing pay problems can request emergency payments.
• Amended the TBS Directive on the Terms and Conditions of Employment indicating the system would not proceed with the recovery of overpayments until certain conditions are met.
• Created the TBS Claims Office to compensate employees who have incurred expenses or financial losses because of the implementation of the Phoenix Pay System.
• Focused processing efforts on priority files such as parental leave, disability leave, student pay issues and implementation of collective agreements.
• Introduced a new service delivery model at the Client Contact Centre to help resolve more pay issues at the first point of contact.

Next Steps

• Moving forward, PSPC will focus on eliminating the backlog of pay cases.
• PSPC will also continue to build on its partnerships to deliver results:
  • Working closely with departments to ensure HR data enters the pay system in a timely and accurate way;
  • ensuring that pay transactions can be processed quickly and accurately;
  • Developing innovative tools and approaches and improving how we process pay;
  • Continuing our collaboration with CRA and Revenu Québec to support employees experiencing tax issues.

Date modified:

2023-05-10