The Phoenix pay system is a payroll processing system for Canadian federal government employees, provided by IBM in June 2011 using PeopleSoft software, and run by Public Services and Procurement Canada. The Public Service Pay Centre is located in Miramichi, New Brunswick. It was first introduced in 2009 as part of Prime Minister Stephen Harper's Transformation of Pay Administration Initiative, intended to replace Canada's 40-year old system with a new, cost-saving "automated, off-the-shelf commercial system."
By July 2018, Phoenix has caused pay problems to close to 80 percent of the federal government's 290,000 public servants through underpayments, over-payments, and non-payments. The Standing Senate Committee on National Finance, chaired by Senator Percy Mockler, sought to examine the causes for the failure, holding "eight meetings with 28 witnesses, including the Auditor General of Canada, union representatives, departments and agencies, officials from IBM, the Minister of Public Services and Procurement and the Clerk of the Privy Council" and paid a visit to the Miramichi pay system location during their investigation. Their report, "The Phoenix Pay Problem: Working Towards a Solution" on July 31, 2018, in which they called Phoenix a failure and an "international embarrassment". Instead of saving $70 million a year as planned, the report said that the cost to taxpayers to fix Phoenix's problems could reach a total of $2.2 billion by 2023. The Office of the Auditor General of Canada also performed an independent audit, and published a report in 2018 that concluded that the Phoenix project “was a incomprehensible failure of project management and oversight”, and that Phoenix Executives did not heed warnings from the Miramachi Pay Centre, costing the federal government hundreds of millions of dollars, and had a negative financial impact on tens of thousands of its employees.
History
Preparing for rollout
The 2009 initial funding, the 2010 initiation, the 2016 implementation, and ongoing operation of what would become the Phoenix pay system, was overseen by a series of the Department of Public Services and Procurement Canada Ministers, spanning the tenure of former-Prime Minister Harper (February 6, 2006 – November 4, 2015) and Prime Minister Justin Trudeau (2015–). Three ministers oversaw these various stages under Harper—Christian Paradis, from June 25, 2008, to January 19, 2010, Rona Ambrose from January 19, 2010, to July 14, 2013, and Diane Finley from July 15, 2013, to November 4, 2015. Under its new name of Public Services and Procurement—Judy Foote, who was appointed by Trudeau, served from November 4, 2015, to August 24, 2017. Trudeau appointed Carla Qualtrough to serve from August 28, 2017, to November 20, 2019. The name of the ministry was changed to Public Services and Procurement and Accessibility while Qualtrough was in office. The current Minister of Public Services and Procurement is Anita Anand, who was appointed by Prime Minister Trudeau on November 20, 2019. Judy Foote became PSPC Minister and Marie Lemay, deputy minister, in Trudeau's first cabinet on November 4, 2015, just after the fall election. By May 2016, "Phoenix errors and delays" had already "affected about 82,000 public servants."
Following the 2008 recession, Prime Minister Harper was focused on reducing costs, which included reducing the size of the civil service. According to the Ottawa Citizen, in July 2009, then-Prime Minister Stephen Harper's cabinet, approved funding for a $310-million Public Works initiative called Transformation of Pay Administration Initiative (TPA). The two parts of the TPA were Pay Modernization and Pay Consolidation. Pay Modernization referred to the replacement of the 40-year-old existing payroll system—the Regional Pay System (RPS)—with a commercial off-the-shelf (COTS) system. The second aspect of the TPA—Pay Consolidation—referred to the transferral of pay services of departments and agencies that had been using the existing Government of Canada IT system for human resources—My Government of Canada Human Resources (My GCHR)—to a new centralized Pay Centre with all payroll administration and employees in one place. Phoenix would serve "101 departments and nearly 300,000 employees". The hope was that a new, more centralized and automated system would lower labour requirements and reduce costs by $78 million a year by "eliminating 650 positions, automating pay processes, and eliminating duplicate data entry." It was expected to be online by 2015.
In August 2010, Stephen Harper announced that the new Public Service Pay Centre would be located in Miramichi, New Brunswick, as compensation for the closing of the long-gun registry centre in that city.