I last wrote about Canada’s Phoenix pay system in an August 20, 2024 posting “From the Phoenix payroll system to Dayforce? Hopefully an improvement for Canadian government employees—one day” when a new pay system was being discussed,
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July 2024 update
A July 10, 2024 article by Emma Weller for CBC news online notes this,
A payroll system for federal workers intended to replace the much-maligned Phoenix platform is still years away from being fully implemented, according to a senior government official.
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At a new conference on Tuesday [July 9, 2024], Alex Benay, associate deputy minister of Public Services and Procurement, said testing began on Phoenix’s replacement, Dayforce, in 2022.
“This is the year that we are building Dayforce as a replacement system for HR and pay and determining if it is a feasible solution for the Government of Canada,” Benay said.
Benay said the switch won’t happen overnight, however, and cautioned it may take years until the new system is fully implemented. In the meantime, Phoenix will remain in use.
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Brief background information
I have covered the debacle that is the implementation of the Canadian federal government’s disastrous implementation of the Phoenix pay system in early 2016 (see my December 27, 2019 post for a comprehensive overview). In 2019, there was a then new Minister of Digital Government, Joyce Murray. That position was eliminated in 2021 and Murray became the Minister of Fisheries, Oceans and the Canadian Coast Guard leaving no one at the cabinet level in charge of ‘digital government’. Four years later, with the advent of Mark Carney as the Prime Minister of Canada, as of June 2025, there is now a Minister of Artificial Intelligence and Digital Innovation, Evan Solomon.
Early 2025
Early this year (2025) before the new government was elected, there were news reports suggesting that the Phoenix pay system situation had not improved much, from a January 24, 2025 article “Ottawa to tap AI to assist with Phoenix pay system backlog” by Adam Huras in the Vancouver Sun. p. NP6,
The federal government says it’s slowly inching closer to a permanent replacement of the controversial [emphasis mine] Phoenix pay system, with officials to decide by the end of March [2025] whether a new payroll platform can be implemented next year [2026] [emphasis mine].
But it will be another 18 months of configuration and testing to fully launch the change.
And the new system will likely also run in parallel with the existing one [emphasis mine] for another four to six months after that to ensure thing work they way they should.
That’s as massive backlogs persist.
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An online dashboard last updated in December [2024] by the federal government shows a backlog of 388,00 transaction. That’s down from 416,000 last June [2024].
More than half 201,000 are more than a year old.
To help the federal government is expanding its use of artificial intelligence [AI] [emphasis mine], specifically a virtual assistant tool that helps fix data discrepancies in pay and compensation services.
That tool has bee in testing. With the help of 30 compensation advisers. …
Controversy? There is none. Even the contractor, IBM, advised against the implementation as the Phoenix pay system wasn’t tested in the field. Plus, there was no backup system in place. On a happier note, it seems that it’s being done differently this time.
There is more to the Phoenix pay system failure as Jamey Mills (regional executive vice-president for the Public Service Alliance of Canada, BC Region. PSAC) notes in her February 27, 2025 article for vancouverisawesome.com,
Trust is the foundation of any workplace. Workers commit to doing their jobs, and in return, they expect to be treated with respect and paid fairly. But for the past nine years, the federal government has broken that trust with its own workers.
Nine years ago, the federal government launched the Phoenix pay system, promising efficiency and accuracy. Instead, it delivered chaos. From the very start, workers reported missing paycheques, incorrect salaries, and severe financial hardship.
Nearly a decade later, the crisis remains unresolved, with more than 383,000 pay issues still in the backlog. The workers affected by Phoenix are not just numbers in a system—they are people with mortgages, bills, and families to support.
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No one should have to worry about whether their next paycheque will arrive on time or in the right amount. But Phoenix is just one example of a broader issue: a pattern of neglect when it comes to supporting federal public service workers. Chronic understaffing, outsourcing, and budget cuts [emphasis mine] have put incredible strain on these workers, forcing them to do more with less while dealing with the ongoing stress of an unreliable payroll system. These are the same workers who process our passports, protect our borders, support veterans, inspect our food and transportation, and keep government programs running. They are the backbone of the public services we all depend on.
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This isn’t just about solving the issues with this broken pay system. It’s about rebuilding trust in the federal government as an employer and ensuring that public service workers are valued, respected, and properly supported. When these workers are treated as an afterthought, it’s not just them who suffer—it’s every Canadian who relies on strong, well-functioning public services.
If the federal government wants to recruit and retain the best talent, it needs to do better. [emphasis mine] That starts with listening to workers, investing in stable and well-staffed public services, and fixing Phoenix once and for all.
Mills and, by extension, PSAC are not the only ones to note problems with the federal civil service. I’ve heard at least one political pundit stating that the federal civil service is ‘broken’, while notice was made that it was at one time considered excellent.
June 2025
Perhaps there’ll be some relief for employees, from a June 11, 2025 Public Services and Procurement Canada news release, Note: A link has been removed,
The Government of Canada is taking the next step toward replacing the Phoenix pay system to drive efficiency and effectiveness across government.
Today, the Honourable Joël Lightbound, Minister of Government Transformation, Public Works and Procurement, announced that the Government of Canada is moving forward to the final build and testing phase of the Dayforce HR and pay solution. This decision follows the completion of a rigorous feasibility study and marks a significant step toward modernizing the government’s HR and pay systems.
The Dayforce solution will replace a significant number of HR systems in use across the Government of Canada. It reflects the government’s continued commitment to business and digital transformation built on transparency, efficiency, and employee experience.
The Government of Canada will finalize the configuration and testing of Dayforce and work with departments to confirm their readiness to onboard. This phased approach builds on lessons learned and will help reduce risks associated with large-scale transformation and ensure a smooth transition for employees.
Employee engagement will continue to be a key focus throughout the transformation process. By involving employees in readiness activities and ensuring continuous feedback mechanisms, the government is implementing an HR and pay solution that offers an efficient people-centric platform aligned with workforce needs.
Quotes
“The Government of Canada remains committed to modernizing its HR and pay systems in a responsible and transparent manner. By investing in the future of HR and pay, we are taking an important step forward in ensuring an efficient, secure, and sustainable solution for public service employees.”
The Honourable Joël Lightbound
Minister of Government Transformation, Public Works and Procurement“We are excited to strengthen our partnership with the Government of Canada. Dayforce brings together advanced technologies into a single, AI-powered people platform designed to simplify processes and deliver real value. We are committed to supporting this transformative HR and pay initiative, ensuring it enhances work-life and drives meaningful improvements for government employees across the country.”
David Ossip
Chair and Chief Executive Officer of Dayforce, Inc.Quick facts
- The current pay system is used to deliver pay to an average of 431,000 current and former employees bi-weekly. In 2024, this represented approximately 13.4 million payments, totalling approximately $40.1 billion.
- The complexity of the Government of Canada HR and pay environment includes the challenge of applying almost 150 different collective agreements representing employees from over 100 departments and agencies.
- The initiative is incorporating lessons learned from the previous pay system implementation and recommendations intended to guide future projects of similar size and scope. In particular, recommendations around stakeholder engagement and governance were guided by Lessons Learned from the Transformation of Pay Administration Initiative (Goss Gilroy report).
- Over 3,000 public servants participated in user awareness sessions during the feasibility project, with the majority of participants reporting that they found Dayforce simple and easy to use. Feedback from participants is being used to improve the system further.
- Dayforce is a global human capital management technology company with deep Canadian roots. Its single AI-powered people platform for HR, pay, time, talent and analytics is trusted by thousands of customers and serves millions of employees worldwide.
- Over the next 2 years, the deployment of the Dayforce solution will begin to progressively onboard starting with two departments and a separate agency, where the Government of Canada will focus on departmental readiness as it prepares to deploy the system.
Josh Pringle’s June 12, 2025 article (with files from The Canadian Press and CTV News Ottawa’s William Eltherington and Ted Raymond) for CTV news online is a little less ebullient,
The days of the troubled Phoenix pay system appear to be numbered, as the federal government moves forward with implementing the new Dayforce system for human resources and payroll tasks.
Public Works and Procurement Minister Joël Lightbound announced Wednesday [June 11, 2025] that the government is moving ahead to the “final build and testing phase” of the Dayforce HR and pay solution for government employees, replacing the Phoenix system.
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The Phoenix pay system was launched by the federal government in 2016. Since then, thousands of civil servants have been paid incorrectly by the pay system.
At least $3.5 billion has been spent by the government on the Phoenix pay system since 2017.
There were 327,000 transactions waiting to be processed through the Phoenix pay system, including 331,000 financial transactions and 9,000 transactions related to collective bargaining agreements. The government’s website shows 49 per cent of the outstanding transactions are over a year old.
In 2018, the government announced plans to replace the Phoenix pay system. More than $150 million has been spent looking into a new platform to replace the pay system.
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Sharon DeSousa, national president for the Public Service Alliance of Canada, said in a statement the new pay system must be proven to work.
“After everything our members have been through at the hands of the Phoenix disaster [emphasis mine], the next pay system has to work, and it has to work from day one. That’s why PSAC is at the table asking the tough questions — to prevent another pay system disaster,” DeSousa said. “This isn’t just a tech upgrade — it’s about rebuilding trust. That starts with paying workers accurately and on time, every time. It’s the most basic obligation of any employer.”
She added that the government must not ignore the ongoing issues with Phoenix.
“With 327,000 outstanding cases, stabilizing the current system and hiring enough compensation advisors to handle pay issues has to be a top priority.”
I wish them well with their efforts to finally make bring this Phoenix pay system debacle to an end.
It is a bit curious to me that there isn’t a quote from Evan Solomon, Minister of Artificial Intelligence and Digital Innovation, in a government news release where there’s a major initiative involving the use of artificial intelligence.