Cost to fix Phoenix pay system $25M and rising: official

The Canadian flag waves on Parliament Hill in front of the Peace Tower in Ottawa. (File)

OTTAWA -- Fixing the problems with the federal government's new payroll system will cost more than $25 million, although the total won't be known for weeks, a top official at Public Works and Government Services Canada revealed Wednesday.

"The last number we have is 25 (million dollars) but it will be higher," said Marie Lemay, the deputy minister responsible for public services and procurement.

The previous Conservative government had estimated that adoption of the so-called Phoenix system would save the federal treasury $70 million annually.

Lemay couldn't say whether any of those savings will be achieved as a result of the system's failures.

"We don't know what the amount of savings will be," she said.

"But we will know in the next few weeks."

The government has been forced to hire -- or re-hire -- hundreds of payroll department and call centre workers after more than 82,000 civil servants reported problems with their paycheques. Hundreds of complainants had not been paid at all, in many cases for months.

Those who had gone unpaid received what they were owed over the last few weeks but new cases continue to emerge.

Another 69 employees complained in the last week that they had gone without paycheques, said Lemay.

Roughly 1,200 cases also remain of workers not being paid while on parental leave or after they've retired.

The government is promising those employees they will be paid within six weeks.

But there's still a large backlog of civil servants who have not received supplementary pay owed, such as overtime, or pay for acting assignments and promotions

While more than 8,000 of those so-called "priority three" cases have been resolved, the backlog remains stubbornly high at 73,965.

Lemay maintained that the government is on track to deal with the backlog by the end of October, although she cautioned that other payroll cases would likely emerge beyond that date.

But the total amount needed to fully fix the system -- and to reimburse employees who are out-of-pocket as a result of not being paid -- is in flux because officials still haven't assessed what is needed to ensure the system can handle pay information from dozens of government departments, Lemay said.

"We're looking at everything we had to do, and everything that we want to do to make sure that we get to our steady state."

The Phoenix pay system, created by IBM, is based on the PeopleSoft program used widely by large corporations across Canada and around the globe, but was altered to fit the needs of the massive federal public service.

It's a complicated system that incorporates dozens of separate pay grades, negotiated contracts and individual employee preferences, Lemay explained during what has become a regular weekly briefing to update the public service on progress in making the necessary repairs.

"It's like 101 companies, basically, coming together with like 27 collective bargaining agreements, it's 80,000 different rules."