By Canadian Press

Phoenix ‘fiasco’ goes under the auditor general’s microscope for a second time

May 28, 2018 | 2:00 PM

OTTAWA — The latest auditor general’s report being released Tuesday could be another black eye for the Liberals over how they’ve managed the rollout of the federal government’s reviled employee pay system.

Michael Ferguson’s second, more detailed report into what went wrong with the Phoenix system comes as civil servants argue they’re entitled to damages for the financial hardships government employees have endured since the system was launched more than two years ago.

Auditors looked at whether the system was fully tested and whether Public Services and Procurement Canada, which oversees Phoenix, provided the support government departments and agencies needed before it was launched.

Designed under the previous Conservative government as a “pay modernization project,” Phoenix was supposed to streamline the antiquated multiple systems that for decades issued paycheques to federal civil servants in dozens of departments across the country.

It was also supposed to save taxpayers roughly $70 million annually by requiring fewer people to work on pay files.

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But in his first report on the system’s failures last November, Michael Ferguson called Phoenix a “fiasco,” and warned that it could ultimately take years to fix, if fixing it is even possible, with a total price tag that could exceed $1.2 billion.

Already the government has spent hundreds of millions of dollars implementing the system, and then trying to stabilize it, with $16 million more dedicated in the last federal budget to look for a new system to replace Phoenix.

But Ferguson suggested it would not make financial sense to scrap the current system.

“If they started all over again, it’s hard to see how they would actually end up in a better situation,” he told a news conference in November after the fall report was released.

“Their only real option is to try and resolve the problem within the system as it exists.”

After its initial rollout in February 2016 across 34 departments employing 120,000 people, it quickly became clear there were problems with Phoenix.

By mid-April of that year, about 30 per cent of civil servants had reported errors in their paycheques.

Despite the problems, a second phase saw Phoenix take over the issuing of paycheques for 170,000 employees in dozens more departments and agencies.

More than half of all federal workers paid under the system have reported experiencing problems including being underpaid, overpaid or not paid at all.

To date, the backlog of pay transactions awaiting processing at the government’s pay centre in Miramichi, N.B., has exceeded 600,000, down from a peak of 633,000 reached in January.

Some of the errors, such as minor overpayments, have been relatively easy to correct. In other cases, however, government workers have reported months-long pay nightmares and endless headaches — diminished credit ratings and missed tuition payments among them.

While the Trudeau government has apologized repeatedly for the “suffering” felt by public servants under Phoenix, and have pledged to compensate “those who have incurred out-of-pocket expenses as a result,” they have also attempted to distance themselves from the debacle, referring to Phoenix as “the Conservative pay system.”

Civil service unions, however, have pointed fingers at the Liberals, insisting the current government is responsible for paying its employees.

The Conservatives have also deflected blame; Opposition Leader Andrew Scheer argues that, ultimately, it was a Liberal government decision “to press the start button.”

The Public Service Alliance of Canada, which represents about 140,000 federal workers across the country, threatened last month to campaign against the Liberals in next year’s federal election over the pay system problems.

And last week the union called on Trudeau to intervene in talks aimed at compensating employees for stress, the time spent dealing with pay issues and the catastrophic financial losses caused by Phoenix.

Those talks stalled when government negotiators said they didn’t yet have a mandate to guide them in the negotiations, the union said.

Terry Pedwell, The Canadian Press