OTTAWA - The federal government's disastrous Phoenix pay system is destined for the ash heap — and the Trudeau Liberals have commited to spending $16 million over the next two years looking for a replacement that can rise in its place.
The government intends to "eventually move away from Phoenix and begin development of the next generation of the federal government's pay system," the Liberals announced in their latest budget, unveiled Tuesday.
The move was applauded by labour groups as an important step toward ending the pay nightmares that thousands of federal employees have lived through as a result of the pay troubles created by Phoenix.
The commitment to begin development of a new pay system came just one day before angry civil servants were set to protest the second anniversary of the launch of the problem-plagued system.
Starting in April, the government will begin efforts "on a way forward on a new pay system" in consultation with technology providers, pay system experts and public service unions, said the budget tabled in the House of Commons by Liberal Finance Minister Bill Morneau.
In the meantime, the budget provided a sobering estimate of just how long it will take — and how expensive it will be — to deal with problems created by the current pay system.
The budget set aside an additional $431.4 million over six years to fix existing pay problems for more than 300,000 workers. To date, the government has earmarked more than $460 million to implement Phoenix and resolve some of the issues created by the system in the months since.
Since its launch in February 2016, tens of thousands of federal employees have been underpaid, overpaid or not paid at all.
Scrapping the failed system can't come soon enough, said Hassan Yussuff, president of the Canadian Labour Congress.
"At least the government is biting the bullet and saying, 'We've got to move on to build a new system,'" Yussuff said. "I think that's going to take some time, but we're very pleased."
The Professional Institute of the Public Service of Canada (PIPSC), one of the country's biggest civil service unions, said in November that its members — many of them IT professionals — could build a new, properly functioning pay system within a year.
The union sat down with Treasury Board President Scott Brison in the days leading up to the budget, and said more meetings were planned in the coming weeks to talk about how to transition away from Phoenix to another system.
"It's the first time there's been a genuine commitment to building an alternative," said PIPSC president Debi Daviau.
She said the union is open to working with the private sector "in limited ways" to ensure a new pay system can be created, and properly tested, as quickly as possible.
On Monday, Public Services and Procurement Canada Minister Carla Qualtrough issued an apology on behalf of the government in the House of Commons for the troubles caused by Phoenix.
At the same time, however, she defended the decision to launch the pay system, blaming her Conservative predecessors for leaving the Liberals no choice but to bring Phoenix online because the government's previous system had been "decommissioned" and its compensation advisers fired.
There have been countless stories of government employees struggling to pay their bills under Phoenix. Some lost cars and even homes before the government, and unions representing the workers, were made aware of the extent of the problems, officials said.
Other civil servants who were overpaid were warned last month that under Canadian tax law, they could face having to pay back more than they received in overpayments. The government said Tuesday it will consider changing those laws so civil servants are not forced to pay taxes they may owe on mistaken payments until their pay problems are resolved.
Tuesday's budget also pledged $5.5 million over two years to the Canada Revenue Agency to process income tax reassessments for civil servants whose finances have been impacted by Phoenix.
It also opened the door to a potential settlement of lawsuits that have been launched as a result of the pay debacle.
"To address the real mental and emotional stress and unacceptable financial impacts on public servants, the government has initiated discussions with public service representatives to address the numerous grievances and legal actions," the budget said.
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