Phoenix replacement still years from full implementation, government says

A payroll system for federal workers intended to replace the much-maligned Phoenix platform is still years away from being fully implemented, according to a senior government official.

Since its introduction eight years ago, Phoenix has caused problems for thousands of federal employees, many of whom have been overpaid, underpaid or not paid at all.

At a new conference on Tuesday, Alex Benay, associate deputy minister of Public Services and Procurement, said testing began on Phoenix's replacement, Dayforce, in 2022.

«This is the year that we are building Dayforce as a replacement system for HR and pay and determining if it is a feasible solution for the Government of Canada,» Benay said.

Benay said the switch won't happen overnight, however, and cautioned it may take years until the new system is fully implemented. In the meantime, Phoenix will remain in use.

«In order to do this well and steadily, there will be a world where we continue to see an IBM Phoenix contract and a Dayforce contract for the foreseeable future in order to make sure that we don't replicate the mistakes that we did in 2017,» he said.

Rising costs

When launched in 2016, Phoenix initially cost taxpayers about $300 million. The cost has now ballooned to $3.5 billion.

The federal government expects to spend an additional $936 million over the 2024-2025 fiscal year. Benay said half of that will be allocated to Phoenix while the other half will go toward the transformation to a new system.

Much of the Phoenix costs are directed at managing and reducing a serious backlog of transactions waiting to be processed.

According to the Public Service Pay Centre dashboard, 416,000 transactions were waiting to be processed on June 19.

Benay said the goal is to process