Public Accounts Committee on May 6th, 2026

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Sorry for asking an irrelevant question.

Ms. Reza and Ms. Hogan, you said earlier that you're working to eliminate the backlog of cases before the launch of the other program. That's what you're hoping for.

Do you have a specific date or at least an idea of when this will happen?

[Arianne Reza]

I think that you're still talking about the backlog of cases.

When the Auditor General's report was released in September, there were about 155,000 cases. It's now May, and there are 88,000 cases. We're hoping for 76,000 cases in July. I'm trying to do the math a bit. I hope that, by the end of the fiscal year, in March 2027, we won't have any cases.

We had another question regarding cases that we don't know about. Now, with the early retirement incentive program, or ERI, and the comprehensive expenditure review, or CER, the inventory includes even more cases. It's always about striking a balance. That's our goal.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Okay.

Ms. Hogan spoke earlier about data entry. When you give the wrong basic information, it's bound to create a problem. Phoenix or not, it happens.

How many of these types of situations do you think have come up?

[Arianne Reza]

Before turning to my colleague, I would like to tell you that I'm appearing today as a deputy minister.

Most cases are the result of incorrect data entered into the system. Once this happens, it's difficult to retrieve the data and work backwards to carry out the revision.

However, maybe I'm a little bit mistaken in my—

[Kim Steele]

The other challenge really comes into play when the transaction is entered in the system.

If the transaction is entered late, that is going to cause a challenge. We may need to do.... It requires manual intervention. Any time there's manual intervention, it takes more time, and there's a potential for increased risk of human error. Things being on time and things being accurate are extremely important.

[Arianne Reza]

I'll give you an example related to what Ms. Hogan said.

I've been speaking with my managers. One trend stands out in the reports that we receive. The most challenging cases are quite common. These cases involve people who are overpaid. They didn't work during working hours, but their manager failed to enter their leave or sick leave information in the system. This becomes a challenge.

We're currently working hard and providing a great deal of training to ensure that everyone—not just managers, but also employees—gives the system the accurate information on whether they worked. That said, we're trying to mitigate this challenge.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

My time is running out. I'll ask you one last question.

All this took place during the COVID‑19 pandemic period. Did you take into account the concerns arising from COVID‑19, the fact that people were working from home and all the other factors?

In your opinion, how has this affected Phoenix and the new program that you're setting up?

[Arianne Reza]

I'll answer that question. I'll then turn to my colleagues, who can give you further details.

It was interesting. During the COVID‑19 pandemic, public servants didn't move around much. For us, it's a challenge when public servants change departments. They have a new system. Paperwork is involved, and information must be entered. During the pandemic, this slowed down a bit. We were a bit more stable.

With the new Dayforce system, we plan to have a master file to keep track of employees at all times. Dayforce will make it possible to keep track of employees throughout the government.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Deltell.

Mr. Ma, you'll have the last five minutes, please, with the witnesses.

[Michael Ma, Liberal, Markham—Unionville, ON]

Thank you, Mr. Chair.

Thank you to the panel for being here.

My first question is for Auditor General Hogan.

You recommended external oversight. Could you share with us briefly what you have in mind, particularly what the mandate and authorities would be?

[Karen Hogan]

Everyone wants to turn me into a lawyer, but I'm very happy being an accountant.

[Voices]

Oh, oh!

[Karen Hogan]

I think any IT system should have some external oversight. It should be at least independent oversight. That is one of the concerns we flagged when we looked at the Phoenix pay system. This could be an internal audit group that is independent, looking at the system. It could be hiring an organization. For example, I believe the government hired Goss Gilroy to look at the system. It could be my office that comes in and takes a look.

It's important to have someone who is not vested in the system, the process or the outcome come in to just kick the tires and tell you honestly what's happening. That's why I came in early to look at this. I felt it was important. We're going to watch this and decide whether we look at it again after the first three departments have transitioned, so that we can provide some value added and make sure that this stays on the right course so that public servants are paid accurately and on time.

[Michael Ma, Liberal, Markham—Unionville, ON]

That's great. I agree with that.

Leading to that, as a follow-up, you mentioned having this other organization to.... Is it managing this project? Who is accountable for delivering this project? Is it Dayforce? Is it the government?

This question is for Deputy Minister Reza.

[Arianne Reza]

It is the government that's responsible. Yes, it is PSPC and Treasury Board Secretariat together, but it's for PSPC to deliver. We're accountable for this.

You asked earlier about governance. If you'll permit, I think this is extremely important. Having that challenge function is really key. Obviously, as we've just spoken about for the last two hours, we can't manage with the status quo. It's extremely manual. It's extremely expensive. We heard all kinds of different numbers. We need to move to something that is cloud-based, that's secure and that's both HR and pay. That's the first thing.

The second thing is what the governance around that looks like. One of the things we've done, which I think is relatively new in the last couple of years, is that we've put a deputy committee together for that endorsement oversight challenge. I can tell you there's probably no committee that is better attended, because we all now have a stake in this. We're moving from these different systems with different accountabilities, and we want to make sure there's strong oversight and a challenge function because it has to work.

For these questions around third party and independence when we bring in external expertise, it's all really focused on the delivery and the execution to minimize risk. This is a government transformation. We hear a lot about IT projects, but I actually think the nomenclature around IT projects should be diminished and we should talk about transformation projects. These are operationally large enterprise projects. We're moving from individual silos of departments to things that are enterprise-wide. A critical factor is governance and accountability.

[Michael Ma, Liberal, Markham—Unionville, ON]

I'd like to follow up on that point.

Is Dayforce doing the delivery, or is there another third party system integrator that's doing the work?

[Kim Steele]

Our contract is with Dayforce, but we talk about Dayforce as “team Dayforce”. It does have a number of subcontractors underneath it that are working with it and with us, but at the end of the day, this is a PSPC-TBS project. We are leading, and it is providing the supports to us.

[Michael Ma, Liberal, Markham—Unionville, ON]

Is Dayforce accountable for the delivery?

[Kim Steele]

It's with us.

[Arianne Reza]

It is our contractor, but we are the Government of Canada. We have the accountability to deliver the project. It is an agent that will support us. We will say that we need X, Y and Z—that we need to adjust this, that we need this cloud extension and that we need to sunset this cloud extension because the rules have been simplified with the union negotiations.

[Michael Ma, Liberal, Markham—Unionville, ON]

Thank you.

A little earlier, we heard from this panel about lessons learned from the Phoenix project. In considering the phased approach you shared with us, have you not considered doing just the payroll first to address the pain point and then implementing the HR side, so that you are addressing the biggest pain point while at the same time not increasing the risk of the delivery of this project?

[Kim Steele]

My colleagues here have talked about how every pay transaction starts with HR. That's the starting point. If the HR transaction activity doesn't come through on time or accurately, it will have a direct impact on the pay outcome. The separation of the 30 different HR systems feeding into one HR system is fundamentally one of the base problems we're trying to solve. By having one solution that is an integrated HR and pay solution—your HR transactions and your pay transactions are in the same system—we are going to eliminate a number of the pain points that we're experiencing today.

Separating them doesn't make sense. We talked about the standardization of those HR processes. That's all within one solution.

Yes, I would say that early on there was the question, “Could we do this differently?” Of course we looked at it. We've looked at a number of different approaches. Based on talking to a number of different organizations and communities, this is the best approach.

[Michael Ma, Liberal, Markham—Unionville, ON]

That typically—

[The Chair, Conservative, John Williamson]

I'm afraid that is the time, Mr. Ma. I gave you a little bit of extra time as well.

I want to thank the witnesses for coming in, for your testimony and for your patience, as well as for your participation in relation to the report, “Modernizing the Pay System”, from the 2026 spring reports of the Auditor General of Canada. You're all excused.

We are going to come back. I'm going to suspend for two minutes to allow the witnesses to leave. I do appreciate their patience with us today.

We'll suspend and come back in two minutes.

[The Chair, Conservative, John Williamson]

I will bring this meeting back to order.

I'm going to recognize Ms. Tesser Derksen, please.