Canadian Payroll System Needs as Much Money To Fix Problems as it Did to Create it

Most organizations and teams struggle with the balance needed to solve practical problems for the business against their budget constraints. Sometimes these solutions work just fine. At other times, when organizations award projects to the lowest bidder, the ‘solutions’ end up costing much more than expected.

The CBC recently reported that even the Canadian government is now facing having to spend almost the same amount of money that it spent to repair its glitch-prone federal payroll system as it did to create it.

The Phoenix program at the Miramichi, N.B., federal pay center was created internally in 2013 by the staff of the Public Services and Procurement Canada (PSPC) as a way to verify and process payment requests. These requests are made in paper form and then converted to digital files. The price tag for Phoenix’s creation was $409,456. Problems with the Phoenix system began almost immediately after its launch in 2016.  The ongoing issues with Phoenix have been so prevalent over the last two years that the CBC reports the number of lawsuits pending within the Canadian courts now numbers in the “tens of thousands.” The litigants against the Canadian government are federal employees and other public servants who have been underpaid, overpaid or had their paychecks inexplicably withheld.

By utilizing Canada’s Access to Information Act, CBC reporters were able to obtain a copy of a heavily redacted memo discussing the pending lawsuits. It appears that the proposed changes to fix the ailing Phoenix system are in response to the pending lawsuits currently filed against the government.

Rania Haddad, the spokesperson for Public Services and Procurement Canada, said in a statement that the Phoenix system functions well, but requires enhancements to match with a current system used by the government to pay the pensions of retired public servants. To do this, Haddad said that the government would be using outside contractors to perform the work. The cost of performing the upgrades will cost the Canadian government $390,000 and is expected to be completed by the end of April 2020.