Phoenix: Standing Committee on Government Operations and Estimates—November 16, 2020

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Human resources-to-pay integrated team

Key facts

Total investments to deliver pay and respond to pay issues since the launch of Phoenix is $1.381 billion:

Under the transformation of pay administration initiative, we consolidated and transferred pay services from 46 departments and agencies to the Public Service Pay Centre. It serves more than 200,000 employees.

Top issues


Public dashboard (as of October 28, 2020):

Collective agreements


Overpayments and repayment options

IBM contract



Phoenix overall queue and backlog decrease


This note focuses on the ongoing reduction of the overall queue and backlog, implementation of collective agreements, taxes, overpayments and underpayments.


Suggested response

If pressed on the new collective agreement and Phoenix damages compensation with the Public Service Alliance of Canada:

If pressed on overpayments:

If pressed on taxes:


Queue and backlog

In total, as of October 28, 2020, there are approximately 281,000 transactions ready to be processed at the Pay Centre, including 110,000 transactions with financial impact beyond the normal workload.

As of October 28, 2020, the overall queue of transactions waiting to be processed at the Pay Centre has decreased by 56% since its peak in January 2018, representing a reduction of 352,000 transactions (from 633,000 to 281,000).

Over the same period of time, the backlog of transactions with financial implications beyond normal workload has decreased by 71%, representing a reduction of 274,000 transactions (from 384,000 to 110,000).

We observed a slight increase in the number of transactions with financial implications beyond normal workload in August and September 2020, primarily due to seasonal peaks in intake.

The peaks in intake in the months leading to the start and end of summer and the fall usually consists of student and casual hiring, acting appointments, and employees returning from leave. Seasonal peaks are a normal part of the pay administration process.

While we expect the general downward trend of the last two and a half years to continue, the number of transactions processed each month varies based on a variety of factors, such as the complexity of cases, collective agreement implementation and seasonal trends. Large reductions will, at times, be followed by slower progress or even increases.

In 2019, the backlog of transactions with financial implications was reduced by 81,000. So far in 2020, we have reduced the backlog by 92,000.

New retroactive redesign solution

In October 2020, PSPC implemented a new retroactive payment process in the Phoenix pay system.

The retro redesign solution will further automate the processing of individual late transactions, as well as eligible mass retro payments. The new solution is expected to result in more timely payments for employees, and reduced demand for manual work by compensation advisors.

In addition, a new view page is now available in Phoenix, providing employees with more detailed information about their automated retroactive payments.

2021 tax-filing season

The 2020 year-end tax plan includes clear direction on robust testing, completion of dry runs, quality and integrity verification of data, implementation of the tax updates, as well as communication of year-end information to the compensation community and employees. Tax slips for 2020 will be released to federal employees on a staggered schedule by the legislated deadline of the end of February 2021.

PSPC continues to actively work with departments and agencies to communicate with employees who may receive amended tax slips because of outstanding issues with their pay file.

Preparations for the 2018 and 2019 tax years successfully avoided T4 amendments related to Phoenix system issues. As of September 2020, there were approximately 59,000 amended tax slips produced for 2018, and 29,000 amended tax slips produced for 2019, none of which were pay system related. In comparison, approximately 213,000 T4 amendments were issued for 2017.

Under current legislation, the Canada Revenue Agency (CRA) ceased to automatically review amended T4s for 2016 in January 2020. Employees will need to request reassessments, which CRA has agreed to facilitate. Communications for employees were sent and more are being developed.


As the Phoenix pay system cannot segregate true overpayments from administrative overpayments, it is not possible to accurately provide specific figures for true overpayment, which represent money owed to the government.

Administrative overpayments are part of the system’s design and are not a technical issue. They have no impact on employees considering that refunds are automatically generated and netted out in the next pay period. Administrative overpayments are created to ensure employees receive the pay to which they are entitled.

In recognition of challenges due to the backlog, recovery of most overpayment balances will not begin until:

To note, these flexibilities do not apply to routine operations—for example, leave without pay (LWOP) of 5 consecutive days or less is recovered from first available funds.

In March 2020, the Pay Centre temporarily suspended all new recoveries of overpayments that were eligible for flexible repayment measures, as part of the COVID-19 response.

Starting October 7, 2020, the Pay Centre began recovery of these overpayments that were eligible for recovery and placed on hold.


Employees who have been underpaid can request emergency salary advances or priority payments from their departments.

Unpaid amounts owed to employees can result from regular pay transactions such as overtime and acting pay that are not yet processed or due to errors.

Underpayments are not automatically tracked in the Phoenix pay system because it is impossible to obtain these figures accurately until all backlogged pay related transactions are processed by compensation advisors.

Collective agreement implementation: 2014 and 2018 contracts

With regard to the 2014 round, there are currently 126 TBS and separate employer’s agreements and salary rate updates that have been processed, representing close to $2.5 billion in payments to employees.

To ensure retroactive payment amounts are accurate, PSPC is conducting a manual review of almost 180,000 accounts. This manual work is on track to be completed in fall 2020.

In August 2019, the first of the 2018 round of collective agreements were signed. The implementation of a number of these collective agreements is underway.

Lessons learned from the implementation of the 2014 round of bargaining allowed PSPC to collaborate with departments and agencies, and bargaining agents to simplify processes, improve accuracy of payment and reduce the need for manual work.

We expect that under 10% of the 2018 round of collective agreement transactions will need manual intervention, resulting in a reduction of hundreds of thousands of manual transactions.

In comparison, the 2014 round required compensation advisors to manually process and validate more than 60% of collective agreement transactions.

TBS is responsible for engagement with PSPC, employees and unions on collective agreements and compensation for Phoenix damages.

Phoenix IBM and systems upgrades


This note focuses on vendor support on the Phoenix file (IBM / Innovation challenge) as well as the Phoenix pay system software upgrade (PeopleSoft 9.2).


All questions related to next generation human resources and pay solution should be directed to the minister of Digital Government.

Suggested response

If pressed on the invitation to qualify for pay system in-service support / application managed services contract:

If pressed on the upgrade to the Phoenix system:


Successful pay processing cycles

Since the Phoenix pay system was launched in 2016, PSPC has put in place a number of improvements which have helped move the pay system from “crisis mode” to a much steadier environment. Such improvements include implementing over 2,500 systems enhancements and fixes. As a result, we have significantly improved the accuracy of the system’s regular pay processing.

Since March, PSPC has seen an increase in overall system stability and performance in payroll processing. This means that no major pay issues related to system errors have occurred in that period. However, public servants may still have had pay issues related to data accuracy and timeliness of HR transactions.

IBM contract and amendments

In June 2011, IBM was awarded the contract for the new pay system through an open and transparent bidding process. Since then, there have been 48 amendments to the original contract, for a total contract value of $447 million (taxes included). Amendments are a regular part of the contract management process and were anticipated at the time of contract award.

The most recent amendment was issued in March 2020, and was required to exercise options for software maintenance and to continue support services essential for pay stabilization and PeopleSoft version 9.2.

In service support: Re-procurement

The current application managed service contract with IBM Canada Ltd. will end on March 31, 2021. It has an option year until March 31, 2022, which provides the Government of Canada a transition period towards a future state.

Application managed services is an outcomes-based agreement where the contractor is responsible for delivering services based on our requirements, and ensuring the Government of Canada receives what it needs for a fixed price.

On May 8, 2020, PSPC issued an invitation to qualify (ITQ) on to qualify suppliers interested in providing the application managed services for 24/7 operational (functional and technical) support for pay, once the current contract with IBM Canada Limited ends. An independent fairness monitor has been engaged to observe and report on the procurement process to ensure its integrity.

We will need to rely on Phoenix until we are ready to transition to a new pay system. The backlog of existing pay issues must also be addressed to allow for a smooth transition to any new pay system. This is the main reason why the Government of Canada is still investing in Phoenix—so that employees continue to be supported and to ensure that we are well prepared to transition to a new pay system when the time comes.

Phoenix system upgrade: PeopleSoft 9.2

The upgrade to PeopleSoft 9.2 will ensure that PSPC continues to receive software patches, fixes, and tax rate updates that Phoenix requires to generate payroll accurately.

The PeopleSoft 9.2 upgrade consists of implementing a new version of the PeopleSoft application with limited impact and disruption to operations and users. The scope of the project is limited to the pay system (Phoenix) and does not include upgrading the departmental HR systems. Extensive testing is currently being performed with departments and agencies to ensure that employees’ pay is not impacted when the upgrade is launched.

PSPC estimates that the overall upgrade is expected to take approximately 24 months (including the planning phase) with a target go live in spring 2021.

Innovation challenge: Pay stabilization procurement initiatives

PSPC launched a procurement process in August 2018 to engage the private sector in innovative solutions to help stabilize the pay system. Industry has been consulted in several areas identified as key to reaching stabilization. These are:

Robotic process automation

Robotic process automation (RPA) is one of several ongoing initiatives that PSPC is taking to help reduce the backlog and stabilize the pay system. PSPC intends to use RPA services to process manual transactions in the Phoenix pay system. The objective is to allow compensation employees at the Public Service Pay Centre to focus on complex cases and address more transactions in the backlog. PSPC has 2 procurement initiatives underway.

KPMG contract extension for robotic process automation

On November 5, 2020, PSPC awarded a contract extension to KPMG limited liability partnership (LLP) for robotic process automation. Under this contract, KPMG LLP is required to build and deploy robotic process automation services at the Public Service Pay Centre, with target implementation in late November 2020.

Due to delays resulting from the ongoing COVID-19 pandemic, the KPMG LLP contract, which is set to expire on November 16, 2020, is being extended until January 31, 2021. This extension is required to ensure successful project completion and post implementation support.

Robotic process automation: Request for proposal

On October 13, 2020, PSPC issued a new request for proposal (RFP) on under the robotic process automation (RPA) stream of the Pay stabilization procurement initiative.

The RFP was sent to the 10 suppliers that had qualified for the RPA stream through an invitation to qualify launched in October 30, 2019 and set to close on November 19, 2020.

Invitation to qualify: Phoenix pay stabilization challenge (EN920-190988/G)

This new RFP will allow PSPC to build on the work completed under the RPA stream to date, and to accelerate the automation of pay processing. With this new RFP, PSPC is seeking additional resources with expertise in RPA to support all ongoing RPA activities, including knowledge transfer to public servants.

NextGen pilot with the Department of Canadian Heritage

On October 14, 2020 the minister of Digital Government announced the selection of the Department of Canadian Heritage for the first exploratory phase of the next generation HR and pay project. The government will work with the selected vendor (SAP) and the Department of Canadian Heritage to develop a business case, privacy impact assessment, change management and other planning considerations to learn how a future HR and pay solution can integrate information from multiple compensation-related HR systems.

This phase will take place in a test environment and will not affect employee’s current pay. Employees will continue to be paid through the Phoenix pay system while testing is completed. The planning phase begins in October 2020 and future phases will be informed by the results of the planning phase.

Public servants, as well as bargaining agents, have been involved throughout the process and the government is committed to continuing to work with them in the next stages of the project. Long-term work to stabilize the Phoenix pay system will continue.

Update on Phoenix stabilization planning, investments and employee support


This note focuses on the efforts and progress to stabilize the pay system, support employees, as well as financial investments in Phoenix.


Suggested response

If pressed on specific measures for COVID-19:

If pressed on support to employees:


COVID-19 measures

Services related to pay are considered essential and measures are in place to ensure that operational requirements are met. Following the recommendation of the Public Health Agency of Canada, PSPC asked all its employees, including those at the Public Service Pay Centre and the CCC, to work from home if possible, while ensuring the delivery of essential services.

The Pay Centre continues to deliver all of its pay services which include regular pay, new hires, return from leave, maternity and parental leave, as well as disability insurance.

Supporting employees and eliminating the backlog remain our top priorities and we continue to see progress.

Since its peak in January 2018, the overall queue of transactions ready to be processed at the Pay Centre has decreased by 56% (from 633,000 to 281,000), as of October 28, 2020.

Over the same period of time, the backlog of transactions with financial implications has decreased by 71%, representing a reduction of 274,000 transactions, from 384,000 to 110,000.

The CCC remains the first point of contact for current and former federal public servants looking for information or help with compensation and benefits, and for technical issues when using the compensation web applications or MyGCPay. Clients may, however, experience increased wait times when calling the CCC.

We are working closely with all our partners, including employees, unions, members of parliament offices, departments and their representatives from human resources (HR) and pay, to provide support during this challenging time.

Total investments to deliver pay and respond to pay issues is $1.381 billion:


Since the launch of Phoenix, PSPC implemented a series of measures focused on stabilizing the pay system.

These include increasing the compensation workforce, providing employees with greater support through our CCC, introducing the pay pods model, implementing a backlog reduction strategy through our Strategic Engagement Sector, and implementing technical fixes that have improved payroll processing, such as increased automation of transactions.

As a result, since its peak in January 2018, the Pay Centre's backlog of transactions with financial implications has been reduced by 71% (from 384,000 to 110,000) as of October 28, 2020.

PSPC has also met service standards 71% of the time on average so far this year (as of October 2020), compared to a 57% average over 2018 to 2019.

On average, in 2020 to date, parental and disability leaves have been processed within service standards 99% of the time (as of October 2020).

In addition to efforts underway, we are working closely with all stakeholders, including experts, federal public sector unions and the private sector for innovative solutions to accelerate pay stabilization.

We continue to regularly share information on progress with employees and Canadians through various platforms and tools.


MyGCPay is a web application developed by PSPC to help rebuild federal government employees’ confidence in the integrity of their pay. It provides employees with a centralized and simplified view of their pay and benefits. It helps employees identify pay issues earlier and allows them to monitor their open cases with more detail.

The application allows employees to:

Following consultations with Government of Canada employees, the MyGCPay project team is working on a revised MyGCPay pay stub which is set to launch in fall 2020.

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