Phoenix costs expected to climb
Liberal government launched Phoenix with ‘no oversight’ in place: Qualtrough
OTTAWA — The estimated cost of stabilizing Phoenix, the federal government’s snafu-stricken civil service pay system, has already exceeded $600 million and will likely continue to climb, the minister responsible for the file told a Commons committee Tuesday.
Public Services and Procurement Minister Carla Qualtrough made the prediction as she acknowledged there was no mechanism in place to gauge the effectiveness of Phoenix when the Liberals launched it early last year.
“It’s clear government oversight was not in place,” Qualtrough told the Commons estimates committee before adding up the spending the government has committed to date to bring Phoenix to a so-called “steady state.”
Nonetheless, Qualtrough told the committee she expects Phoenix to be able to pay government employees “on time” by the end of 2018.
Ensuring the government has a better pay system in place beyond Phoenix is another matter — one that the minister said could end up taking “years.”
Qualtrough’s comments followed earlier testimony by a department official to a separate committee, where deputy minister Marie Lemay confirmed the government has no choice but to stick with Phoenix in the short term.
“There is no fall-back,” Lemay told the public accounts committee. “There is no former system to go back to.”
Auditor general Michael Ferguson last week issued a blistering report on Phoenix, warning that stabilizing it will take years and cost more than $540 million.
In answering questions about his report, Ferguson — whose report likened the situation to a similar and ongoing seven-year, $1.2-billion debacle in Australia — suggested the government should think about abandoning the system altogether.
Qualtrough’s parliamentary secretary, Liberal MP Steve MacKinnon, said earlier this week that there simply is no feasible alternative to Phoenix.
On Tuesday, Ferguson said the government needs to work in two phases to resolve the pay system fiasco.
“The first priority is to pay people the right amount on time,” he said. “However, after that is achieved, there will still be work to do to get a system that processes pay efficiently.
“The longer-term solution needs to last and be as efficient as it can be.”
Lemay appeared to agree, saying her department plans examine longer-term alternative options to the Phoenix system.
One of the biggest federal civil service unions has called on the Liberal government to scrap Phoenix and build an in-house system virtually from scratch.
The Professional Institute of the Public Service of Canada, which represents government IT professionals, said earlier this month it could build a brand new pay system from scratch based on the latest version of Oracle’s PeopleSoft software.
Union president Debi Daviau said she expected the new system could be brought online, after thorough testing, within a year of starting the project.
Lemay said her department has worked with civil service unions as it tries to stabilize Phoenix and that officials had met with PIPSC representatives in the last week, although she made no commitments to adopting union proposals for paying government employees.
IBM was contracted by the previous Conservative government to repurpose PeopleSoft to create the Phoenix system.
Daviau said it’s not the core software that failed, but the configuration and implementation, which she said involved a lack of proper training of payroll system employees.
Under questioning from New Democrat MP David Christopherson over who is to blame for the Phoenix pay problems, Lemay said IBM had done nothing wrong in carrying out the work to develop the system.
“Throughout the project, IBM has done what we asked them to do,” she told the committee. “It’s not IBM that was the project manager.”
In his report to Parliament last week, the auditor general said about 150,000 government employees — about half of the federal workforce — have faced pay problems since Phoenix was launched in early 2016, including being underpaid, overpaid or not paid at all.
The system originally went live in February of that year and was tested on a handful of departments. Despite almost immediate complaints of problems with the system, it was enacted across 46 departments and agencies two months later. Soon afterward, problems were identified with more than 82,000 pay files and the backlog of incorrect transactions quickly ballooned from there.
Members of both committees studying the Phoenix fiasco voiced frustrations Tuesday with a lack of tools to help civil servants working navigate pay problems.
Qualtrough said she hoped to have some tools in place “within a couple of weeks,” but emphasized the government would avoid setting up any system that takes pay system employees away from reducing backlogged pay issues.