2026 Report of the Auditor General of Canada to the Parliament of Canada
Ottawa, March 23, 2026—A report from Auditor General Karen Hogan tabled today in the House of Commons concluded that the Treasury Board of Canada Secretariat (TBS) and Public Services and Procurement Canada (PSPC) were managing the Human Resources and Pay Transformation Project so they can ensure that federal public servants’ pay transactions will be accurate and on time and the project will provide value for money once implemented. The report emphasizes that the project is in its early stages and that there is an opportunity for TBS and PSPC to address the risks that have been flagged.
“The need to simplify and standardize pay rules before introducing a new system was a core lesson learned from the transition to the Phoenix pay system,” Ms. Hogan said. “It is concerning to me that, a decade later, there has been little progress made to simplify these rules. As a result, the department is customizing the new Dayforce pay system at an estimated additional cost of almost 4 million dollars per year.”
The audit also found that PSPC had made limited progress on clearing the backlog of pay transactions accumulated following the deployment of the Phoenix system. As of September 2025, over 233,000 pay transactions, affecting more than 133,000 federal public servants, remained outstanding. There is a risk that existing errors could be transferred to the new Dayforce system, undermining its effectiveness from the start.
In January 2026, after the audit period, PSPC reduced by about 3 years the schedule to onboard all departments and agencies to Dayforce. While the decision is intended to mitigate the complexities and costs of operating 2 systems simultaneously, the accelerated timeline significantly reduces the time available to clear the existing backlog of pay transactions and prepare departments and agencies for the transition.
The 2026 Report of the Auditor General of Canada, Modernizing the Pay System, is available on the Office of the Auditor General of Canada website.
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