Canadian government to invest C$142m in solving Phoenix payroll system problems

View of false creek and the Burrard street bridge in Vancouver,

But the new investment means that the total cost of sorting out the system has now exceeded the original cost of implementing it.

Canada’s federal government intends to funnel another C$142 million (US$107 million) over the next two years into fixing its beleaguered Phoenix payroll system.

According to Steven MacKinnon, parliamentary secretary to the minister of public services and procurement, the aim is to spend the money on hiring 200 more temporary staff on top of the existing 300 already employed to help fix issues that have affected tens of thousands of public servants.

“Our analysis has determined that the problem with Phoenix is largely one of capacity,” he said.

The new recruits will be assigned to the Phoenix pay centre headquarters in Miramichi, New Brunswick, as well as four temporary pay centres around the country set up to respond to the crisis. The temporary centres will now be kept open until the end of the year.

Investment will also be made in new software to track and manage employee cases, change how transactions are processed and set up “surge capacity” at the Gatineau pay centre in Quebec.

But the new expenditure means that the total cost of sorting out the system has now exceeded the original cost of implementing it.

The C$142 million sum comes on top of the C$50 million (US$38 million) spent last year to try and fix ongoing problems and the C$70 million (US$53 million) that was supposed to be saved each year by switching to the new applications. The money will now not be recouped either this year or next. The original cost of introducing Phoenix was C$309.5 million (US$233.50).

Phoenix, which is meant to pay nearly 300,000 federal employees, was first rolled out in February 2016. But by the summer of that year, 82,000 problem cases had already surfaced.

The Public Services department initially pledged to clear the backlog by the end of October 2016, but as of March this year, there were 284,000 past-due transactions – or pay issues that have gone past the standard timeframe of between 20 and 45 business days, depending on their category – in the system.

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