Phoenix Pay: Headway slow and expensive

If you throw enough money and people at a problem, sometimes you make a little progress. This is the central message in the latest data published by the federal government’s Phoenix Pay system.

As of July 25, there were 316,000 transactions in line for processing at the government’s main pay centre in Miramichi, N.B., according to Public Services and Procurement Canada, the department in charge of fixing the mess. Not only was this a net decline of 18,000 from June 27, the end of the previous pay period, it marked the sixth straight drop in the size of the backlog.

The peak of the Phoenix Pay madness occurred last Jan. 24, when transactions in the queue reached 384,000.

This backlog measures transactions with a financial impact — too much pay or too little — and excludes normal work-inprogress.

Public Services Minister Carla Qualtrough has reason to like the trend, but the gentle trajectory is a concern.

If the backlog keeps shrinking at the same deliberate rate as during the past six months (11,300 every four weeks), it will take another 21/2 years before the system approaches a steady state.

The Liberal administration of Justin Trudeau, which faces re-election in another 14 months, would like to see faster progress on this file.

Although the original $309-million project to replace dozens of aging systems with Phoenix Pay was approved by the Conservative government of Stephen Harper, the decision to launch Phoenix early in 2016 before the system was ready was taken by the Liberals.

Because the system went live before it was properly tested, the government has been forced to spend a fortune on emergency measures, including the hiring of hundreds of extra pay administrators.

As of March 31 of this year, unplanned costs had topped $360 million — and the government plans to shell out an additional $326 million per year until the pay system is fixed.

Is it enough to get the job done? Qualtrough’s pay managers hope two factors will accelerate the rate at which the backlog is trimmed. First, they’re seeing progress in a series of pilot projects dedicated to resolving pay issues unique to individual federal departments. Second, hundreds of new pay administrators hired over the past year are gaining experience — and becoming more productive.

Nevertheless, this is a slow, grinding process. Consider the detail from the latest four-week pay period ended July 25. (While the government pays its employees every two weeks, Public Services usually reports Phoenix Pay numbers every four weeks.)

In the most recent four-week period, the Phoenix system processed 82,000 pay transactions with a financial component — the smallest such total since March.

That’s not very encouraging. But now look at the other side of the ledger. The number of new pay transaction requests received during the four weeks from June 27 to July 25 was just 64,000 — well below the normal level of 80,000 or so, and the lowest in more than a year.

Indeed, the relatively small intake was a big reason the pay centre was able to significantly reduce the backlog in the most recent pay period.

It’s not clear what’s happening here. The decline doesn’t appear to be a seasonal thing because there were more requests to rectify pay errors during the same period a year earlier. It’s possible some government employees have become discouraged by the wait times at the Miramichi pay centre and simply stopped making demands on its administrators, especially if it involves relatively small amounts.

More optimistically, the smaller intake of problem accounts might be due to fewer errors in employees’ original pay.

If the latter, it would give Qualtrough and her fellow Liberals a reason to smile this autumn because it would expedite the drive to normalize the Phoenix pay system.

Taxpayers’ relief at the prospect of a fix would, of course, be overwhelmed by much darker thoughts of what it cost. jbagnall@postmedia.com