Funding to continue support for the Government of Canada’s pay system: Standing Committee on Government Operations and Estimates—June 9, 2020
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Supplementary Estimates (A): $203.5 million in 2020 to 2021
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Fiscal year |
2020 to 2021 |
[Redacted] |
[Redacted] |
[Redacted] |
|---|---|---|---|---|
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Total authorities |
203.5 |
[Redacted] |
[Redacted] |
[Redacted] |
Notes
- Funding for 2020 to 2021 sought in this Supplementary Estimates (A) [Redacted] in Annual Reference Level Update 2021 to 2022
- Supplementary Estimates of $203.5 million excludes Employee Benefit Plans (EBP), Shared Services Canada (SSC) and accommodations charges. [Redacted]
Summary
Public Services and Procurement Canada (PSPC) is seeking access to $203.5 million (Vote 1—Operating Expenditures) in 2020 to 2021 [Redacted] to eliminate the backlog of pay issues for public servants and continue delivering and stabilizing pay for the Government of Canada.
Purpose of the funding
Since Phoenix was implemented in 2016, ongoing resourcing levels have been insufficient to address pay issues and PSPC has requested additional funding every year in order to administer pay to public servants.
Resources are needed to eliminate the backlog of outstanding transactions; continue actions to deliver biweekly pay for federal employees; enhance system stability and data integrity; and engage stakeholders in the move towards stabilizing human resources (HR)-to-pay.
[Redacted]
Background
Under section 12 of the Department of Public Works and Government Services Act and order in council PC 2011-1550, the minister of PSPC is mandated to administer the disbursement of pay to employees of the federal public administration. PSPC administers the Phoenix pay processing system on behalf of the Government of Canada, generating payroll for nearly 400,000 active and inactive (such as, on leave or retired) employees.
[Redacted] the initiative to fix the pay system, also known as the transformation of pay administration (TPA) initiative. The TPA initiative consisted of 2 components: the consolidation of pay services project (total cost of $118.6 million by project close), which merged the compensation workforce administering employee pay accounts from 46 organizations in a single Public Service Pay Centre in Miramichi, New Brunswick; and the pay modernization project (total cost of $190.7 million by project close), which replaced the government’s 40-year old payroll system and processes with a commercial off-the-shelf pay (COTS) and benefits solution (such as PeopleSoft). The system, known as Phoenix, was rolled out in 2016 with limited functionalities.
To date, several audits and reviews have demonstrated that there were serious flaws in the planning and implementation of the TPA initiative. The Government of Canada failed to adequately test the system before it went live; underestimated the complexity of pay operations and the system capacity required to process transactions; and underestimated the time and effort that users across the Government of Canada would require to process HR transactions and adapt to the new integrated HR-to-pay systems environment. There were also issues with inadequate functionality and system performance. These issues, along with an inherited backlog of unresolved cases from the previous system, have resulted in a large volume of outstanding HR and pay transactions.
In addition, PSPC was not adequately resourced on an ongoing basis to deliver and stabilize pay. The department initially expected that starting in 2016 to 2017, the TPA initiative would generate annual savings of approximately $70 million that would then be harvested from Pay Centre client departments. After Phoenix was implemented, the government decided not to proceed with recouping these funds, as additional support was required for departments to support employees experiencing pay issues. The department has ongoing funding of around $80M/ year to manage systems and to process pay from the Pay Centre. This is equivalent to approximately 550 full-time equivalents (FTEs) in the Pay Centre and approximately 150 FTEs working to maintain and fix the information technology (IT) system. However, in the current context, more than 2,300 additional FTEs across multiple functions are needed to deliver and stabilize the pay system. [Redacted]
Current status
Funding provided to date has allowed PSPC to improve its capacity, productivity and efficiency in pay administration. One of the most significant projects completed in 2019 to 2020 was the roll-out of the pay pod service delivery model to all Pay Centre departments and agencies. Fully implemented in May 2019, the pay pod model has been successful in many respects, such as managing new cases in the queue; improving performance against service standards, data accuracy and quality; as well as has helping to increase collaboration between the pay pod and the client departments. Further results for HR-to-Pay are outlined in recent reports. For example:
- Pay Centre queue decreased by 49% from January 2018 to May 27, 2020, and now stands at 323,000 (excluding collective agreement implementation cases)
- Over the same period of time, the backlog of transactions with financial implications has decreased by 64%, and now stands at 137,000
- The queue of 2014 collective agreement implementation cases as of May 27, 2020 has decreased by 79% since May 27, 2019
- PSPC has met service standards 65 to 75% of the time over the last year, compared to a 57% average over 2018 to 2019
In addition, improvements have been made to upstream activities that affect intake into the queue and significant progress has been made on system improvements. Since Phoenix launched in 2016, PSPC has made over 2,500 system changes, fixes and enhancements. This work has helped to improve functionality for clients and added system automations to reduce the need for manual interventions.
[Redacted]
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