Federal government moving ahead with new pay system to replace Phoenix

The Dayforce system will replace the failed Phoenix Pay System for federal public servants, but Phoenix problems persist. CTV’s Stefan Keyes reports.

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 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.

“The Government of Canada remains committed to modernizing its HR and pay systems in a responsible and transparent manner,” Lightbound said in a statement. “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 government says Dayforce will replace a “significant number of HR systems” used across all departments. Over the next two years, the deployment of Dayforce will “will begin to progressively onboard,” starting with two departments and a separate agency, according to Public Works and Procurement Canada.

• Settlement of class action lawsuit over Phoenix pay system problems for casual employees approved

According to the government’s media release, Dayforce is a “global human capital management technology company,” and is a single AI-powered platform for HR, pay, time, talent and analytics.

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.

In 2019 and 2020, the Government of Canada and a number of public service unions finalized an agreement to compensate unionized employees who were paid through the Phoenix pay system. In April, a class-action settlement to provide compensation to non-unionized and casual federal public servants for errors with the Phoenix system was approved by the Superior Court of Quebec.

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, 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.”

With files from The Canadian Press and CTV News Ottawa’s William Eltherington and Ted Raymond