Why was Phoenix rolled out when it had shortcomings?

Federal officials expect to have problems resolved by the end of October

OTTAWA — The federal government could have done a better job implementing the new payroll system that’s causing serious payday headaches for tens of thousands of civil servants, a senior bureaucrat admitted to a Commons committee Thursday.

But moving from the antiquated, paper-heavy pay system the government used for four decades to the electronic Phoenix system was the right call at the right time, said deputy public services minister Marie Lemay.

“I think we could have done additional measures (to smooth the transition process),” Lemay told the House of Commons committee that oversees government operations.

“But the move to the second wave and the move to Phoenix is the right decision.”

MPs on the committee grilled Lemay and other officials with questions, including one civil servants and their unions have been asking for months: why was Phoenix rolled out when it was clear it had significant shortcomings?

There were indications of “bugs” in the Phoenix system after it was first launched on a limited basis in February following several delays and a third-party assessment, she said.

But the issues were minor, said Lemay, who took on a new role as deputy minister just as Phoenix was being fully implemented in a much larger second wave. And she would have recommended the system be given the green light at that time, she told the committee.

Still, knowing what she knows now, that second phase should have included more time for employees to be trained on the system, and the government should have retained many of the pay system employees that were let go as the new system came online, she said.

Earlier Thursday, federal officials said they expect to have resolved all of the pay delays created by the problematic new pay system by the end of October — but undoing the damage won’t be cheap.

Dealing with the months-long debacle, which has caused serious payday headaches for tens of thousands of civil servants, will cost an estimated $15 to $20 million, Lemay told a news conference earlier in the day.

That doesn’t include upgrades that will be required to ensure the system runs more smoothly in the future, she added. “There’s another portion that we’re looking at doing to enhance and that I still don’t have a cost to.”

Some 1,100 of the more than 80,000 problem files identified last week have been closed, Lemay said.

That includes the 486 government workers who were provided with back pay on Wednesday after having gone for months without compensation.

Another 234 employees listed by officials as “Priority 1” cases will see their paycheques in two weeks, Lemay added.

A second priority group — workers going on maternity leave, long-term disability leave or retiring — will see their files handled within four to six weeks, the deputy minister said.

To speed up the process of eliminating reported pay holdups, the government is opening satellite pay offices in Winnipeg, Montreal and Shawinigan, Que., as well as hiring more staff in Gatineau, Que.

“We’ve hired more people and we’re adding more temporary pay offices,” said Lemay. “To accelerate our progress, we are recruiting as many compensation experts as we can to help employees get paid as quickly as possible.”

On Wednesday, Public Services and Procurement Minister Judy Foote paid a personal visit to the government’s central pay centre in Miramichi, N.B., where officials confirmed that dozens of employees are on stress leave linked to the pay system issues.

The Phoenix system oversees the payment of 300,000 federal public servants. More than 80,000 workers have either been overpaid, underpaid or missed entire paycheques since Phoenix launched in February.

Last week, the federal privacy commissioner announced a formal investigation into a privacy breach linked to Phoenix earlier this year. Further privacy breaches were affecting the system as late as July 26, said Lemay, who classified the breaches as “low risk.”

Auditor general Michael Ferguson will also review the planning and implementation of Phoenix; 13 public service unions are asking the Federal Court to rule that the government must pay public servants properly and punctually.

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