Auditor brands Canada’s Phoenix pay system an ‘incomprehensible failure’

By on 06/06/2018 | Updated on 24/09/2020
Michael Ferguson, Canada’s auditor general

Canada’s auditor general has branded the Phoenix pay system an “incomprehensible failure” that is a symptom of a “much deeper cultural issue” within the federal government.

Michael Ferguson called on the government to reflect on how its culture contributes to the failure identified in his spring audit of the beleaguered computerised pay system – as well as in assessments of education and jobs programmes for indigenous people.

“I want to stress that I believe that right now is a critical moment when the federal government needs to reflect on what I call ‘incomprehensible failures’,” he said. “It needs to reflect on how much government culture stands in the way of achieving truly successful results for people.”

Scathing judgement

The auditor general examined whether the government acted reasonably in its decision to implement the Phoenix pay system in one of seven Spring audit reports, which were released last week. It is the second audit to be held into the pay fiasco.

More than half of Canada’s public servants are estimated to have had their pay disrupted by Phoenix, with some underpaid, some overpaid and some not paid at all. The centralised system, which was meant to save the taxpayer CAN$70m (US$54m) per year, has racked up additional costs of more than CAN$900m (US$690m) on efforts to solve the problems.

Announcing the findings at a press conference on 29 May, Ferguson said: “We concluded that the Phoenix project was an incomprehensible failure of project management and project oversight, which led to the decision to implement a system which was not ready. The decision to launch Phoenix was wrong.”

System launched unfinished

In order to meet budgets and time-lines, Ferguson found, Public Services and Procurement Canada (PSPC), which was responsible for setting up the pay system, had cancelled a pilot implementation exercise, did not test the system fully before launching it, and had removed critical pay functions.

When “Phoenix executives” – senior officials who were leading the roll-out – told PSPC’s civil service head that Phoenix would launch, they did not explain that the new centralised pay centre in Miramichi, New Brunswick, as well as departments and agencies and the system itself were not ready for operation, the auditor general said.

“Finally, the decision to launch Phoenix was not documented,” he said. “In our view, based on the information available at the time, the decision to launch Phoenix was not reasonable.”

It wasn’t us, gov

Public services and procurement minister Carla Qualtrough responded that the government accepts all the auditor general’s recommendations on the Phoenix pay system and has already taken steps to implement them.

Qualtrough said “measures” have been taken against the executives mentioned in the report and they are no longer working in government pay administration, as reported by the Globe and Mail newspaper.

Leaders of Justin Trudeau’s Liberal administration and the opposition Conservative Party traded accusations as to who was responsible for the fiasco.

Scott Brison, president of the Treasury Board, said the issues raised by the auditor general are already a “preoccupation” for the government and “culture change” is underway. “In the public service for a long time there have been issues about risk aversion, as an example,” he said, as reported by CBC News.

“The Conservatives actually piled onto that with a culture of fear and intimidation over a period of 10 years that reduced the ability and desire of public servants to speak truth to power and be guided by evidence, as opposed to ideology.”

Nor us

But Tony Clement, who was Treasury Board president under the government of Stephen Harper, said the Conservatives had held off from implementing Phoenix when they heard concerns from officials, and bore “none” of the responsibility for the disaster.

“I know people like to spread the blame, but I think we did the right thing as political overseers when we heard the tales of concern,” said Clement, the Globe and Mail reported.

The Public Service Alliance of Canada, the country’s largest civil service union, said it will formally submit a request for a public inquiry into the Phoenix debacle after completing a full analysis of the auditor general’s report.

PSAC’s newly-appointed national president Chris Aylward said in a statement: “Federal public service workers are the ones dealing with the consequences of their government’s negligence and they deserve to be paid damages for the hardships they have endured.

“We also need to build on what we found out today through a national public inquiry so that we can ensure that nothing like this ever happens again.”

About Liz Heron

Liz Heron is a journalist based in London. She worked on daily newspapers for more than 16 years as an education correspondent, section editor and general news reporter. She was Education Editor of the South China Morning Post in Hong Kong and has contributed to a wide range of British media including The Independent, The Guardian and the BBC.


  1. Jason Blackwell says:

    I know it’s probably not the purpose or objective of your work, however the GC needs to look into proper accountability frameworks!! This is a huge reason why young professionals are dissuaded from joining the public service. We talk about it all the time. The “executives mentioned in the report are no longer working in pay administration.” But where are they now? Is this how leadership is exercised in the government? What must someone do to get fired? Apparently criminal neglect is pardonable… The culture needs to change and government needs to learn how to fire people. It is a basic activity.

  2. K.Khosa says:

    The “executives mentioned in the report are no longer working in pay administration.” But where are they now?

    They are most probably still working in the government.

  3. Bob says:

    But Tony Clement, who was Treasury Board president under the government of Stephen Harper, said the Conservatives had held off from implementing Phoenix when they heard concerns from officials, and bore “none” of the responsibility for the disaster

    Then how come Harper is seen here in 2014 handing out an award for completing Phoenix “on budget and on time”

  4. Christine says:

    Special thanks to the Auditor General’s Office for their work. It is good to know that at least one government workplace is functioning. There are so many things that need to be fixed. The Phoenix fiasco, I think, is representative of the overall functioning of the federal government. Canadians need to demand more. Instead of buying pipelines, political leaders should focus on doing the work that they are responsible for e.g. paying their public servants.

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