OTTAWA – The federal government's underestimation of the complexity of overhauling the public servants pay system led to the failure of the Phoenix rollout, according to the findings of an independent consulting group's report.
Now, as the current administration tries to dig itself out from under thousands of problematic pay cases, the new minister in charge says the findings offer a road map in what not to do in setting things right.
"This was set up to fail, and we need to set it up to succeed," said Carla Qualtrough, the new public services and procurement minister, adding that she found the report validating.
The report released Thursday found that between 2008 and April 2016 sufficient steps were not taken to set the new pay system up for success, nor was the federal government nimble to fix issues that did arise.
Qualtrough admitted the Liberals did initially underestimate the complexity of the transformation, but didn’t shy away from pointing to the previous government’s role in where things are today.
The new system, initiated by the previous Conservative government in 2009, was meant to streamline the payroll of public servants and save more than $70-million annually. Already, the government has planned to spend $400-million over two years trying to fix it.
The government first rolled out the new Phoenix pay system for approximately 300,000 employees in February, 2016, and by summer that year, there were 82,000 cases of public servants either receiving no pay, or incorrect pay.
The initial promise from the department was to have the backlog of problematic pay cases resolved by Oct. 31, 2016. As of Sept. 20, there were 257,000 cases of employee pay issues left to be resolved, an increase from the month before due to an influx of new collective agreements that had to be processed.
"There's no easy or quick fix for the problems in the pay system," said Qualtrough. "The file is ours to fix, and we will."
Goss Gilroy Inc. was commissioned by the Treasury Board to take on a "lessons learned" study of the government’s introduction of the Phoenix pay system's two-part rollout: replacing the old software; and moving pay from within each department into one centralized centre in Miramichi, N.B.
The $165,000 study identified 17 key lessons that it says the government should take into consideration, as Public Services and Procurement Canada continues to pay people through Phoenix.
The lessons stated in Thursday’s report are meant to respond to a number of the lead department’s failings, including:
• not putting accountability and authority in the hands of a single office;
• ineffective communication of the changes coming;
• erring in counting on savings ahead of the rollout being completed;
• not continually reassessing the timeline; and
• not making sure it had enough staff, or adequately trained staff to execute the implementation.
"These are lessons that are yet to be learned, not lessons that have been learned," the report says. "It will be critical for the government to actually apply these lessons in future transformations and more immediately in the transformation challenge currently before the government."
Qualtrough said the findings of the report will inform the government’s ongoing plans to resolve the pay issues. She said the government is also looking to hire more staff, and her department is partnering with Veterans' Affairs to set up two new temporary pay centres in Charlottetown and Kirkland Lake. The Liberals have already established satellite pay centres in Gatineau, Winnipeg, Shawinigan and Montréal that they say will stay open until Phoenix is fixed.
Treasury Board President Scott Brison said the most common question this government gets on the Phoenix file is "why can’t you just fix the damn thing," and he said, this new report provides insight into why the hole they are in is "so deep."
"This is a big problem, years in the making, and we are determined to use the lessons learned to help fix our pay system and to ensure that the mistakes of the past are not repeated in future transformations," he said.
In the execution of this study, the auditors consulted documents and spoke with more than 100 people across departments and outside of the bureaucracy.
Auditors also noted that the planned testing of the new pay system was incomplete, and the department’s reliance on assumptions around eliminating the backlog that eventually piled up, also compounded the problem.
Broadly, it suggests the government needs to work on improving the culture of "agility, openness, and responsiveness" going forward. The report also recommends the government look at how the private sector can help fill in any capability gaps when pursuing initiatives like this.
Prime Minister Justin Trudeau has assembled a ministerial working group to take on fixing the payroll system, and it was the top mandate priority on Qualtrough’s new mandate letter that was made public yesterday.
