Canada's new public-sector payment system is still years away from being implemented
After half a decade of testing and an investment of nearly $300 million, the federal government is still years away from fully implementing its next-generation pay and human resource cloud platform to replace the problem-plagued Phoenix payroll system.
Moving more than 360,000 federal workers onto a cloud-based system will require hiring more contractors and re-opening union agreements to streamline pay categories. The government is also considering building a new data hub to clean and standardize employment information from departments before it's transferred to the new Dayforce platform.
Alex Benay, the associate deputy minister at Public Service and Procurement Canada (PSPC) acknowledged to CTV News that the government may have to spend hundreds of millions of dollars more on building its NextGen-PayHR platform before it even starts operating.
PSPC says it will outline its implementation strategy and provide a final cost estimate by 2026.
The Government of Canada’s commitment to increasing accessibility in the public service and its selection of a third-place vendor may also be contributing to prolonged timelines and escalating costs.
Alex Benay, associate deputy minister of Public Service and Procurement Canada. Benay stands in front of the inspiration wall with words written by his pay transformation team.
Why did Canada choose a third-place bid?
Dayforce’s software needs to be redesigned and re-tooled to meet the complex requirements of the federal government.
The Toronto-based company, formally known as Ceridian, has dedicated 250 employees to the NextGen project. They work in collaboration with a team of 126 federal public servants. The number of people on the project is expected to grow over the next two-and-a-half years.
CTV News has learned that Dayforce had placed last out of three competing vendors when it was awarded the NextGen-PayHR contract in 2021.
The top bid was SAP, followed by Workday, then Dayforce.
Benay says the contract was awarded before he took over responsibility for NextGen PayHR, but says it’s his understanding that government selected Dayforce because it was “the most flexible.”
“After the RFP, what happened is we started throwing more things at all three of the companies (like) accessibility legislation, official languages legislation - and (Dayforce) was most willing to play,” said Benay in an interview with CTV National News.
Just over six per cent of federal public servants have disabilities, which is lower than the national average of 9.1 per cent. The government’s accessibility strategy aims to increase the number of employees with disabilities to 5,000 people by 2025.
“Accessibility is a core principle of our country. It's based in law and so is official languages. We think it’s extremely serious that suppliers that come and bid on projects for the Government of Canada can meet our basic national values. So, for us, that’s not a negotiation point,” said Benay.
Accessibility criteria
SAP was the frontrunner to win the bid because it had previously been awarded the 2019 NextGen pilot project.
According to four separate government and private sector sources, SAP withdrew in the summer of 2021 after being selected for the massive project. Sources say federal officials made additional accessibility and language demands that were not specified in the government’s original request for proposal (RFP).
In an email to CTV News, SAP said it met all the requirements of the RFP and resulting contract, and that its software and web-applications are tested against the European Union EN301 549 standard as well as the Web Content Accessibility Guidelines Level 2.2. Those are the same requirements that were outlined in the government’s RFP.
Documents seen by CTV News indicate that the federal government then offered the contract to Workday, requesting that the company confirm its willingness to honour its technical and financial bid without “any changes to the terms and conditions stipulated.”
Workday responded that it agreed to honour the terms of the original RFP and requested a meeting to discuss new caveats. Federal negotiators responded that Canada was “not in a position to negotiate any terms and conditions.” No meeting was scheduled, and less than a week later, the contract was awarded to Dayforce.
Workday is currently providing NextGen HR services to a handful of smaller and highly secure departments such as CSIS, CSE and FINTRAC.
In a statement to CTV News, a spokesperson said that this work includes “Workday agreeing to and meeting a set of accessibility and Official Language requirements which we are proud to support in line with our commitment to providing an inclusive single user experience and accessibility in design.”
Neither SAP nor Workday filed complaints about the procurement process.
Viable but not ready
Dayforce’s founder David Ossip is Canadian and its vice president of public sector revenue enablement and strategy, Gianluca Cairo, previously worked for a minister in Justin Trudeau’s government.
Cairo was the chief of staff to former innovation minister Navdeep Bains before he was hired by Dayforce in 2019.
Of the $289 million dollars the government has invested in the NextGen initiative, the bulk $171 million has been used to pay Dayforce to build a customized platform for the federal government.
According to the NextGen HR and Pay Final Findings Report released in February, after two years of analysis, the government of Canada will need to develop “critical” tools and infrastructure and “significant resource investment” before 130 departments can start using Dayforce.
According to the report, Dayforce was deemed “viable” but not ready to be rolled out. Its software solution met 85 per cent of the government's 582 requirements. But there were 90 gaps.
These technological holes were related to complex scheduling and pay brackets across roles ranging from ships’ officers to nurses to correctional officers. Factors such as 24-hour scheduling and temporary acting roles posed problems for Dayforce.
According to the report, 18 of these shortcomings were gaps that Dayforce “cannot meet now… and that planned future product development will not address.”
“These gaps exist mainly because of a lack of alignment between unique GC rules and industry best practices for some HR processes, which are critical to producing accurate and timely pay,” the report found.
Patching these critical holes will require re-opening nearly 150 labour agreements with 18 unions to simplify pay processes so they can be imputed into Dayforce.
Bargaining required
Benay says PSPC plans to meet with union representatives next week to explain what’s needed. Some fixes could be as simple as getting every department to agree to start new employees on the same day of the week, but others may involve renegotiating contracts to change terms to align with Dayforce.
Jennifer Carr, the president of the Professional Institute of Public Service of Canada (PIPSC), says PIPSC wants the government to pay its workforce on time, but it won’t agree to simplifications which will result in “rollbacks” for its 70,000 scientists, IT workers and professionals.
“We’re not interested in losing any of our rights. We have collectively bargained these rights and it is our entitlement,” says Carr.
She’s also concerned about escalating costs and stretched timelines.
“We could have helped them build something in house and the government chose to go with a contracted-out solution which in our mind is just more costly for taxpayers,” said Carr.
Benay says they’re currently at the “design and build stage” and that the Dayforce solution will not go “LIVE” until all the gaps are addressed. The government has put out a request for information from contractors for cost estimates to build a data hub to bridge the transition to the Dayforce solution.
The federal government is aiming to roll out Dayforce NextGen in 2027, one department at a time. But before that, it must test every cloud extension and run a parallel pay system to Phoenix for at least six months to ensure there are no glitches.
The Canadian Association of Professional Employees (CAPE), which represents 25,000 public servants, appreciates PSPC’s cautious approach.
“This is about restoring trust with Canadian taxpayers that you’re not going to create another boondoggle,” said Nathan Prier, CAPE’s president. Prier says CAPE’s members are still facing financial pressures stemming from the Phoenix debacle which has cost taxpayers $3.5 billion.
“We’re glad they’re taking their time to do pilots and implement things slowly here. We need to be at the table discussing every step of the way…We’re still dealing with the Phoenix disaster. Our members are still facing significant financial pressures stemming from being underpaid, overpaid and not paid at all.”
IN DEPTH
Jagmeet Singh pulls NDP out of deal with Trudeau Liberals, takes aim at Poilievre Conservatives
NDP Leader Jagmeet Singh has pulled his party out of the supply-and-confidence agreement that had been helping keep Prime Minister Justin Trudeau's minority Liberals in power.
'Not the result we wanted': Trudeau responds after surprise Conservative byelection win in Liberal stronghold
Conservative candidate Don Stewart winning the closely-watched Toronto-St. Paul's federal byelection, and delivering a stunning upset to Justin Trudeau's candidate Leslie Church in the long-time Liberal riding, has sent political shockwaves through both parties.
'We will go with the majority': Liberals slammed by opposition over proposal to delay next election
The federal Liberal government learned Friday it might have to retreat on a proposal within its electoral reform legislation to delay the next vote by one week, after all opposition parties came out to say they can't support it.
Budget 2024 prioritizes housing while taxing highest earners, deficit projected at $39.8B
In an effort to level the playing field for young people, in the 2024 federal budget, the government is targeting Canada's highest earners with new taxes in order to help offset billions in new spending to enhance the country's housing supply and social supports.
'One of the greatest': Former prime minister Brian Mulroney commemorated at state funeral
Prominent Canadians, political leaders, and family members remembered former prime minister and Progressive Conservative titan Brian Mulroney as an ambitious and compassionate nation-builder at his state funeral on Saturday.
Opinion
opinion Don Martin: Gusher of Liberal spending won't put out the fire in this dumpster
A Hail Mary rehash of the greatest hits from the Trudeau government’s three-week travelling pony-show, the 2024 federal budget takes aim at reversing the party’s popularity plunge in the under-40 set, writes political columnist Don Martin. But will it work before the next election?
opinion Don Martin: The doctor Trudeau dumped has a prescription for better health care
Political columnist Don Martin sat down with former federal health minister Jane Philpott, who's on a crusade to help fix Canada's broken health care system, and who declined to take any shots at the prime minister who dumped her from caucus.
opinion Don Martin: Trudeau's seeking shelter from the housing storm he helped create
While Justin Trudeau's recent housing announcements are generally drawing praise from experts, political columnist Don Martin argues there shouldn’t be any standing ovations for a prime minister who helped caused the problem in the first place.
opinion Don Martin: Poilievre has the field to himself as he races across the country to big crowds
It came to pass on Thursday evening that the confidentially predictable failure of the Official Opposition non-confidence motion went down with 204 Liberal, BQ and NDP nays to 116 Conservative yeas. But forcing Canada into a federal election campaign was never the point.
opinion Don Martin: How a beer break may have doomed the carbon tax hike
When the Liberal government chopped a planned beer excise tax hike to two per cent from 4.5 per cent and froze future increases until after the next election, says political columnist Don Martin, it almost guaranteed a similar carbon tax move in the offing.
CTVNews.ca Top Stories
2 Canadians confirmed dead in Poland, as consular officials gather information
Two Canadians have died following an incident in Poland, CTV News has learned.
Downtown Vancouver stabbing suspect dead after being shot by police
A suspect is dead after being shot by police in a Vancouver convenience store after two people were injured in a stabbing Wednesday morning, according to authorities.
DEVELOPING As police search for suspect, disturbing video surfaces after U.S. health-care CEO gunned down in New York
UnitedHealthcare CEO Brian Thompson was killed Wednesday morning in what investigators suspect was a targeted shooting outside a Manhattan hotel where the health insurer was holding an investor conference.
'Utterly absurd': Freeland rebuffs Poilievre's offer of two hours to present fall economic statement
Deputy Prime Minister and Finance Minister Chrystia Freeland has rebuffed Conservative Leader Pierre Poilievre's offer to give up two hours of scheduled opposition time next Monday to present the awaited fall economic statement as 'utterly absurd.'
Canada Post stores continue to operate during strike — but why?
As many postal workers continue to strike across the country, some Canadians have been puzzled by the fact some Canada Post offices and retail outlets remain open.
Toddler fatally shot after his 7-year-old brother finds a gun in the family's truck
A two-year-old boy was fatally shot when his seven-year-old brother found a gun in the glovebox of the family's truck in Southern California, authorities said.
Ontario Premier Doug Ford calls Donald Trump 'funny guy' in Fox News interview
Ontario Premier Doug Ford called U.S. president-elect Donald Trump a 'funny guy' on Wednesday in an interview with Fox News for his comment that Canada should become the United States's 51st state.
Mattel sued over 'Wicked' dolls with porn website link
Mattel was sued this week by a South Carolina mother for mistakenly putting a link to an adult film site on the packaging for its dolls tied to the movie 'Wicked.'
Transport Minister to summon airline CEOs as Air Canada set to charge carry-on fees for some passengers
Transport Minister Anita Anand says she will be calling Canadian airline CEOs to a meeting in mid-December after Air Canada says it will charge some passengers for carry-on bags in the new year.
Local Spotlight
'It's all about tradition': Bushwakker marking 30 years of blackberry mead
The ancient art of meadmaking has become a holiday tradition for Regina's Bushwakker Brewpub, marking 30 years of its signature blackberry mead on Saturday.
Alberta photographer braves frigid storms to capture the beauty of Canadian winters
Most people want to stay indoors when temperatures drop to -30, but that’s the picture-perfect condition, literally, for Angela Boehm.
N.S. teacher, students help families in need at Christmas for more than 25 years
For more than a quarter-century, Lisa Roach's middle school students have been playing the role of Santa Claus to strangers during the holidays.
N.S. girl battling rare disease surprised with Taylor Swift-themed salon day
A Nova Scotia girl battling a rare disease recently had her 'Wildest Dreams' fulfilled when she was pampered with a Swiftie salon day.
Winnipeg city councillor a seven-time provincial arm wrestling champ
A Winnipeg city councillor doesn’t just have a strong grip on municipal politics.
Watch: Noisy throng of sea lions frolic near Jericho Beach
A large swarm of California sea lions have converged in the waters near Vancouver’s Jericho and Locarno beaches.
Auburn Bay residents brave the cold to hold Parade of Lights
It was pretty cold Saturday night, but the hearts of those in a southeast Calgary neighbourhood warmed right up during a big annual celebration.
Three million grams of cereal collected to feed students in annual Cereal Box Challenge
The food collected will help support 33 breakfast and snack programs in the Greater Essex County District School Board.
Regina's LED volume wall leaving Sask. months after opening
Less than a year after an LED volume wall was introduced to the film world in Saskatchewan, the equipment is making its exit from the province.