Public Accounts Committee on May 6th, 2026

[William Stevenson, Conservative, Yellowhead, AB]

I'll go back to Ms. Hogan with a question.

Your office has repeatedly raised concerns about pay errors and backlogs over the years, yet the problems persist.

From your perspective, do you know the main reason for these issues not being resolved, despite the attention put on this? Has it been a process that was lacking, or just a failure to follow a process to resolve some of these issues?

[Karen Hogan]

I can tell you that I have personally been auditing Phoenix since 2016. I was working on the Government of Canada's financial statements at the time Phoenix was rolled out. The reasons pay errors occur have evolved from 2016 to today.

In the financial commentary we issue every year, we always track where things are at. The commentary we issued with the 2024-25 public accounts noted that two-thirds of the pay errors we were still seeing were data entry errors. That's sort of upstream. Pay is a whole HR-to-pay process. It's no longer the box not calculating. Now we have delays in entry. A third of the errors were because of that, and two-thirds were linked to data entry. That is why pay is still continuing to see issues.

If we look at the backlog of pay issues—I think the deputy minister explained it well—there are pay action requests every single day. It's about making sure you find the right balance between dealing with the easy ones and not forgetting all about the backlog. In our report, we highlighted that about 50% of what's there has been outstanding for over two years. What's concerning, for me, are the 16,000 cases that have been there for six years or more. Those are going to be challenging.

This all needs to be cleared up before a transition happens. I think it's a matter of having the right timing and having the pay expertise to get through the backlog.

[The Chair, Conservative, John Williamson]

Thank you very much.

Next is Ms. Tesser Derksen for five minutes.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Thank you, Mr. Chair.

Thanks to the witnesses.

I often ask questions about workplace culture—how it informs the different processes and policies, how these are implemented, how they affect how money is spent and how we get our best value for it.

I will ask a question of Ms. ShankarNarayan, if that's okay.

The Auditor General, in her report, identified problems and some significant gaps. She made some recommendations to TBS and PSPC that if adopted—we presume—would position the project for success. If you could comment on the people and culture dimensions of that transformation, I'd really appreciate it—specifically on how TBS is supporting compensation advisers and public servants through the change.

[Vidya ShankarNarayan]

Thank you for the question.

Specifically, from a culture perspective—I mentioned this earlier when I was answering the question on business processes—we always set forth the requirements and the policy direction at the Treasury Board, of course. We had 30-plus systems across the government, so there was a fragmentation of culture in terms of that policy being implemented in different departments under different deputy heads.

What we're working on right now is the standardization of those processes. It's a significant undertaking. We started this a couple of years ago. This is the upstream—the Auditor General just mentioned the upstream. This is the culture change that happens between a supervisor and their employees. It starts right there for most pay actions. We are working across the Government of Canada to standardize those processes so that when they move to Dayforce, they're not moving as 30 different processes. They're moving as one process and, in parallel, also working on training.

The training is in two parts. There's training on the actual software, which my colleague Kim and her deputy are accounting for. Deputy Bogden and I are working on the content of that training. How do departments address the different HR processes based on HR policies? This is where culture comes in—in multiple forms. There is the business process standardization but also how we manage the change happening in each department. Change can be through training, but it can also be through the readiness of each department. How does each department get ready for these changes and processes while also getting the different groups in their HR department...? It's also about working with managers, because every manager plays a significant role in the upstream process before employees get paid by the pay centre.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Thank you for that very thorough answer.

With the remainder of my time, Mr. Chair, I'd like to present a motion. I think there's been some discussion on this.

No, I retract that. I guess we're going to do that after the witnesses have left.

[The Chair, Conservative, John Williamson]

Yes.

You have about two minutes, then. We'll give you those couple of seconds back.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Perfect. I will ask a question about pay accuracy, because it looks like we're at about 98.4% pay accuracy. That sounds pretty good to me, but there are still a few percentage points where we can make improvements.

Can I ask how you might plan to close that gap of the final per cent and a bit?

[Arianne Reza]

I'm certainly happy to start and I'll then turn to Kim.

We're actually at 98.6% and are on things now to the right of the decimal. That is actually part of the industry standard that Dayforce has told us about. We're doing it for accuracy and timeliness.

We issue 12 million paycheques a year. There's that volume. We're the largest employer in Canada in a very complex environment. We're working on getting the best-case scenario for any industry of about 99%, so we're very close. We're already in the range, but there are lots of things we can do.

It goes back to the question you just asked and many of the things we've been talking about. When we talk about Phoenix, even within and outside of the government, and in Parliament, Phoenix is a continuum. How we look at our HR systems, how we feed in the data and what we do to make sure the data is clean—that's a big culture change.

As a deputy, I'm very lucky to have a significant workforce that does Phoenix. It's like going into a burning house every day. As you said earlier, we're dealing with people's lives. Behind that, you have to backstop and to think about what we're delivering, the services for Canadian that we deliver when we can't pay our own employees on time.

We're very proud to say that we're now at 98.6%. We're going to keep getting better. We're going to work on the backlog. I, too, think about the 16,000 people. I've looked at the complexity of those cases to understand them better, but we need to lead from an HR perspective. We will continue. To get it higher, we have to focus on those HR processes.

I don't know, Jackie, if you wanted to add anything.

[Jacqueline Bogden]

I would add that we still have lots of work to do to get people to where we need to be—to that 100%. Part of it is training. Part of it is, as you said, culture change. In some cases, we're not waiting for culture change. We're directing it and basically forcing it, so there are no more HR systems on your own. There's one. It's MyGCHR until Dayforce. We're directing the kind of change that we need to see.

It's the same thing with the accuracy of pay transactions. You heard the Auditor General refer to that when she said that their testing shows there's still some inaccuracy. Part of that is data entry errors. Some of it is about the lag time between the person who has entered it and getting it to the pay centre. We have to fix those things. It needs to be absolutely.... We're working on it through training and behaviour change.

In some cases, we have deputies, like my colleagues sitting beside me, who actually pick up the phone and call a manager and say, “Your name's on a list here and you haven't approved the transaction. Why?” That is going to make people sit up and take notice and behave differently. It's been a matter of culture, but part of it is that we can't wait for culture anymore if we're going to look after those who really need to get accurate pay in a timely way.

Thank you for the question.

[The Chair, Conservative, John Williamson]

Thank you. That is the time.

We're now going to do one last round. It will consist of questions by five individuals for various times, and then apparently we have some motions to consider, which we'll do after I excuse the witnesses.

Ms. Kusie, I believe you'll kick us off for five minutes once again.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

Ms. Bogden, the AG found that delays and slow progress by Treasury Board on pay simplification has not only increased the total spend of the project, but has also put public servants at risk of continued pay errors after the transition from Phoenix to Dayforce.

From day one we knew what the issues were with Phoenix. However, a decade later your department still hasn't made sufficient progress in simplifying and standardizing pay processes across the government. Why would that be?

[Jacqueline Bogden]

As I mentioned earlier in my testimony, this is definitely a work-in-progress. There is a series of rules that are completely within our authority at the Treasury Board and the Treasury Board Secretariat, and we're making those changes as quickly as we can. In other cases, we're talking about simplifying rules that are in collective agreements, and we need to work with bargaining agents. We have, during rounds of collective bargaining, achieved some simplification, but we still have some room to go.

You will have seen in the audit report that the Auditor General enumerated the four areas that we're working on right now. Those are areas that right now require a manual transaction, so we are working with the bargaining agents to see if we can come up with solutions to resolve those. We tried to do it outside of the round of bargaining. We haven't yet been successful, and the bargaining agents have asked us to bring it to the table. We are right now in the next round of bargaining, so we will be discussing it there.

I am hopeful, let's just say. We have common cause with bargaining agents to try to make sure that we can pay our employees accurately and in a timely way. I will say that I'm hopeful.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

What kind of ministerial support would you say you're receiving at this time?

[Jacqueline Bogden]

Is this question directed to me?

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

That's correct.

[Jacqueline Bogden]

I would say that there's 100% ministerial support.

For this file in particular, when we said to the government that we needed a mandate to be able to negotiate with the unions—because you do not negotiate these changes in collective agreements without negotiation; there has to be a bit of give-and-take—the government was very receptive to that and said that they agreed 100% that we needed to pursue these changes even if they were outside the round of collective bargaining. I feel that we've had the support we need.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Over the past decade, there have been eight different Liberal presidents of the Treasury Board, five in the last five years alone. I believe I am on my fourth.

Would you say that the lack of sustained ministerial attention has led to the slow simplification of the pay rules?

[Jacqueline Bogden]

No.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

The audit states that Treasury Board had made a proposal to unions that would address some issues with pay simplification; however, at the end of the audit period, no agreement had been made.

Can you provide us with an update on this proposal now?

[Jacqueline Bogden]

Yes, for sure. I mentioned earlier that there are four different areas in particular that we've been discussing with the unions.

One example is what we call the 10-day rule. Basically, for certain allowances, you have to work 10 days in order for the allowance to be paid out, and the practical implication of that is that there's somebody at the pay centre who's doing the calculating for every single employee. These are all manual transactions, so we're discussing with the bargaining agent to see if there's a way we can resolve this so that it won't require that level of manual intervention. This is one of the things that we will be discussing with bargaining agents in the current round of collective bargaining.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Ms. Reza, is PSPC able to determine that they will be able to confidently and accurately process the surge in complex pay cases as a result of the ERI and WFA?

[Arianne Reza]

That's an excellent question. We are working on that, looking statistically at what's coming in. We're working hard for those who are looking at termination through CER or through ERI to make sure that their pay is clean and that there's no knock-on effect into their pension. Both from the viewpoint of pay and pension administration, we're looking at this, and the volumes so far have been manageable. We're constantly checking for severance and other issues.

As for the knock-on impact, we talked earlier about the number of cases that we have open and how we manage resources between dealing with the backlog—those that are over a year old—and those cases that are coming in. That will be a tension point, but because the period is short, our focus will be on that as we're concurrently looking to reduce the backlog.

[The Chair, Conservative, John Williamson]

Thank you very much. That is the time.

Ms. Yip, please go ahead for five minutes.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you.

Thank you to the witnesses for coming today.

What was eliminated to shorten the schedule by three years?