Phoenix: Standing Committee on Government Operations and Estimates—March 24, 2021

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HR-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 220,000 employees.

Top issues


Public dashboard (as of February 17, 2021):

Collective agreements


Overpayments and repayment options

IBM contract



Public Service Pay Centre dashboard as of February 17, 2021

Financial transactions beyond the Pay Centre’s normal workload since 2018

We’ve added a graph representing the backlog of financial transactions waiting to be processed at the Public Service Pay Centre since 2018.

Financial transactions beyond the Pay Centre’s normal workload since 2018.

Financial transactions received and processed by the Pay Centre monthly since 2018

We’ve also added a graph representing the number of new financial transactions received, as well as the new and backlogged financial transactions processed by the Public Service Pay Centre every month, since 2018.

Financial transactions received and processed by the Pay Centre monthly since 2018.

Financial transactions beyond normal workload 2018 to present

Financial transactions beyond normal workload

The number of financial transactions beyond the normal workload has decreased by 8,000, from January 20 to February 17, 2021.

Reductions will, at times, be followed by slower progress or even increases. Since its peak in January 2018, the number of financial transactions beyond the normal workload has decreased by 280,000, from 384,000 to 104,000.

While the exact number fluctuates daily, it is estimated that almost half of public servants are experiencing some form of pay issue (including those served by the Pay Centre as well as non-Pay Centre departments). There are currently approximately 270,000 transactions ready to be processed at the Pay Centre, including:

Public Service Pay Centre workflow

Between January 20 and February 17, the Pay Centre received 69,000 transactions and processed 77,000. The Pay Centre also processed an additional 1,200 transactions associated with collective agreements.

Percentage of transactions processed within service standards

Between January 20 and February 17, 77% of non-collective bargaining transactions met service standards.

Public Services and Procurement Canada prioritizes cases that can have a large impact on an employee’s pay. For example, in 2020, parental and disability leaves were processed within service standards 99% of the time on average.

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 incorrect enrolment in the Public Service Pension Plan:

If pressed on the Public Service Alliance of Canada (PSAC) Program and Administration Services (PA) group collective agreement implementation:

If pressed on overpayments:

If pressed on taxes:


Queue and backlog

While we expect the general downward trend of the last 3 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.

Seasonal trends include peaks in intake at the end of the calendar year and the end of the fiscal year, as well as end of summer completion of many casual and student work terms. We have observed similar seasonal trends in previous years.

Seasonal peaks are a normal part of the pay administration process and we expect that large reductions will, at times, be followed by slower progress or even increases.

The number of financial transactions beyond the normal workload were reduced by 81,000 in 2019, and by 101,000 in 2020.

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.

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 February 2021, there were approximately 67,000 amended tax slips produced for 2018, and 43,000 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 2017 in January 2021. 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 all of the employee’s outstanding pay transactions have been processed, the employee has received 3 consecutive accurate pays, and the employee has indicated their preferred repayment option.

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.

In addition, the Pay Centre, in collaboration with the Office of the Comptroller General (OCG) and the Receiver General and Pension Branch (RGPB), has begun work to prioritize overpayment recoveries with a particular focus on 2016 files, as well as those of high value (over $40,000).


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, we processed 126 TBS and separate employer’s agreements and salary rate updates, representing close to $2.5 billion in payments to employees.

To ensure retroactive payment amounts were accurate, PSPC conducted a manual review of over 200,000 individual accounts.

The implementation of the 2018 round of collective agreements is well underway. To date, 2018 collective agreement implementation salary adjustments and retroactive payments have been completed for 71 TBS and separate employer agreements, representing over $910 million in payments to employees.

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.

Based on the work done so far, we expect an overall average of approximately 10% of the 2018 round of collective agreement transactions will need manual intervention, resulting in a reduction of hundreds of thousands of manual transactions. The results of each retroactive payment process are expected to vary due to a combination of many factors, including agreement complexity and projected volumes.

In comparison, the 2014 round required compensation advisors to manually process and manually validate approximately 90% 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 McKinsey contract amendment award for accelerator services:

If pressed on the IBM contract award for robotic process automation (RPA):

If pressed on the re-procurement of the pay system in-service support / application managed services contract:

If pressed on the upgrade to the Phoenix system:


IBM contract and amendments

In June 2011, IBM was awarded the contract for the new pay system through an open and transparent bidding process with a fairness monitor. Since then, there have been 49 amendments to the original contract, for a total contract value of $545M (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 December 2020, and was required to exercise the option year to extend the current contract end date from April 2021 to March 2022. Exercising the option period is required to ensure ongoing application managed services for 24/7 operational (functional and technical) support for pay. This includes software maintenance and support services essential for pay stabilization, including the upgrade of the Phoenix PeopleSoft software to version 9.2.

In service support: Re-procurement

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.

In June 2019, PSPC launched a competitive procurement process seeking qualified 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 observing the procurement process and will report on 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: Request for proposal

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.

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 closed on November 19, 2020. On January 19, 2021, following a thorough evaluation of the bids submitted, the contract was awarded to IBM.

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 will have additional resources with expertise in RPA to support all ongoing RPA activities, including knowledge transfer to public servants.

Accelerator services contract amendment

The objective of the accelerator services project is to streamline processes and standardize work at the Public Service Pay Centre to increase efficiency and reduce processing times for pay transactions.

McKinsey & Company was awarded a contract for accelerator services in February 2020 as a result of a competitive procurement process, and their work to date has resulted in substantial increases in the productivity and accuracy of work across the pilot teams at the Pay Centre.

As such, on January 19, 2021, PSPC extended the contract with McKinsey & Company to the end of August 2021, to continue providing accelerator services to the Pay Centre.

Under this contract, McKinsey & Company will provide consulting services to improve pay processes and procedures by identifying overlap or unnecessary duplication in administrative tasks and building greater capacity through new ways of working.

They will also implement strategies to increase efficiency and reduce errors, which will lead to decreased wait time for employees’ pay issues to be processed.

As a result of McKinsey and Company’s work, approximately 1,300 Pay Centre employees will receive training on the new ways of working that are being introduced through the accelerator services contract.

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 human resources (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 began 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: Support for our employees, stabilization planning, and investments


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


Suggested response

If pressed on Phoenix damages agreements payments to employees:

If pressed on performance pay to executives involved in fixing Phoenix:

If pressed on support to employees:


Claims and compensation: Phoenix Pay System

On January 14, 2021, the Government of Canada launched a new claims process to compensate current and former employees who have experienced severe personal or financial impacts as a result of issues with the Phoenix pay system.

This claims process is another element of the damages agreement co-developed with federal public service unions in June 2019 to compensate approximately 121,000 current and 25,000 former employees for damages caused by the Phoenix pay system.

Claims for severe personal or financial impacts could include financial losses, mental anguish or other impacts attributed to Phoenix pay issues. Employees who took sick leave or other types of paid or unpaid leave because of an illness stemming from pay issues may also be eligible to apply for compensation through this new claims process.

Existing claims processes for expenses, financial costs and lost investment income, as well as general compensation for former employees continue to be available.

This claims process does not apply to current and former employees covered by the damages agreement, signed in October 2020, between the TBS and PSAC. TBS continues to work in collaboration with PSAC to finalize the claims processes from this agreement and more information will be shared in the coming months.

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

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.

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 have introduced interim administrative measures to simplify and speed up the approval process of a range of pay-related transactions.

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:

2020 approved 3 year forward plan funding

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 Client Contact Centre, 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.

On average in 2020, parental and disability leaves were processed within service standards 99% of the time.

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 has developed a new and improved pay stub.

The team has temporarily removed the new pay stub feature from MyGCPay, while they address technical issues. All other MyGCPay features remain available, and employees can continue to access their pay stubs through the Phoenix pay system and the compensation web application (CWA).

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