Public Accounts Committee on May 6th, 2026

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

I understand, but you are also aware that if you shorten the testing periods and cut staff training—you just told us there are still tens of thousands of Phoenix-related cases you need to process—what assurance can you give to public servants and all Canadians who are paying billions of dollars for this transition?

How can you be sure that shortening the three-year period will make the system more efficient?

[Arianne Reza]

First, I want to say that this is not a reduction in terms of time. What we have proposed is to conduct a series of activities and training sessions, and to carry out tests at the same time. We have set up teams that will focus on reducing the identified risks.

I will stop here. Ms. Steele, would you like to add anything?

[Kim Steele, Assistant Deputy Minister, Department of Public Works and Government Services]

We have a plan where departments will use the system on a rotating basis.

We have different phases to onboarding. We will start with a very small organization, and we will test. If that test is successful, if we prove the onboarded pay goes well, we move on to the next phase, which will be PSPC and SSC. Again, that is more employees but still not the entire Government of Canada. Each phase, each wave, will give us an opportunity to learn, to adjust and to pivot if necessary. If things aren't going well, we don't onboard. We fix it before we move on to the next wave.

There are other pieces that are significantly different from when Phoenix went live. Every piece of functionality will be in place before we start onboarding. Every piece of functionality will be tested. The big difference is that we are going to be running parallel pays and testing those. We will run pay in Phoenix for all 400,000-plus employees, and we will run pay in Dayforce for the same group of employees. We'll be able to compare. We will have a high level of assurance that the system is working and that we have the right pay outcomes.

[The Chair, Conservative, John Williamson]

I'm sorry, Mr. Deltell, but your time is up.

Up next is Mr. McKinnon.

You have the floor for five minutes, please.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

Thank you, Chair.

Ms. Bogden, you mentioned that we have 17 bargaining agents and 28 collective bargaining groups, I believe, which represent a hugely complex pay environment. I'm wondering, to start with, as an ex-IT guy, why we think that one large, one-size-fits-all system will solve this problem, rather than, say, 28 smaller, individualized, customized systems. Why is that the right answer?

[Jacqueline Bogden]

You heard my colleague from PSPC mention, at the beginning, that we did a very large feasibility assessment before even making a decision to go to Dayforce, which meant basically pulling together all of our business requirements. By business requirements, what I mean are things like pay rules that are in collective agreements or policies.

Essentially, to date, I think we have about 6,500 of them. We did a fit gap analysis to determine whether or not a Dayforce tool will be able to do everything we need it to do and meet our business requirements. About 5,000 of the business requirements that we have can be met by Dayforce without any changes. What we're talking about is a delta of about 1,500.

We are in the midst of doing two things: We've identified gaps that need to be filled, and we've also identified some more assessment that needs to be done. Every time we find a gap, we need to do a little bit of triage there and ask ourselves, “Which are the rules that we can get rid of either by eliminating them or standardizing processes or rules?” As you mentioned, it might involve negotiating with the bargaining agents to ask, “Can we adopt a different way of doing this that simplifies the pay administration?”

The process we've undertaken with our colleagues at PSPC is to go through those thousands of requirements, put them in buckets and decide where we need to simplify and standardize.

The one thing I will reassure the committee about is that a modus operandi for us in thinking about the new system is learning from the lessons of the last time. That is to say, wherever we can, we should be adjusting and adapting the way we do our business in order to adopt the new system. That may be, like I said, changing a pay rule, negotiating a new pay rule or eliminating it entirely, which is part of the work we've been doing.

Sometimes, it's about business processes. You heard the Auditor General refer to about 200 different business processes. That is another big part of it. It is a massive exercise in simplifying and standardizing wherever we can before we adopt the Dayforce solution.

[Arianne Reza]

I'll give a recent example from the last six to nine months.

You have to start on a Thursday. Before, people in 105 different departments across the government were starting on any day of the week, and the system would struggle to figure out the pay period, because there are so many different inputs. You speak as an IT expert, so imagine 35 different systems trying to regularize that. Now we've standardized a lot of the rules. Where we've had success in that, it has been a real game-changer for us, and we're continuing to build in some of that optimization.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

The AG's report mentions that the progress in simplifying and standardizing pay rules has been limited, and this has been under way since the first rollout of Phoenix in 2012 at Miramichi. That's almost 15 years now.

Why do we think we're going to have better success going forward in that simplification so we can actually encompass this requisite simplicity within Dayforce?

[Jacqueline Bogden]

The question is, essentially, what I think our chances of success are.

We're making some progress, but maybe not as fast as we would like.

I would take this in two pieces. One is all of the rules that are within our control, and by “our,” I mean the Treasury Board Secretariat or the Treasury Board. We are tackling those. This is an absolute priority for our organization. It is throughout the organization that we need to do everything possible to simplify and standardize. Really, the ones we're going after first and foremost are not just the ones that help us with Dayforce but the ones that make up the rule set that helps us with the administration of pay right now.

I'll give you an example. In the last year, there are a couple of changes we've made regarding executives. We changed the rules around carry-over of leave for executives to make them the same as for unionized employees, and then we automated those transactions in the pay centre so that manual processing was no longer required. That's a change that helps us today, and it's a change that will help us in the future. We've done the same with union dues. Those are things we can do within our own authorities.

Then there is the bucket of work areas that relate to collective agreements, and that's the part we need to negotiate with the bargaining agents. We don't have exclusive authority over this. This is something we do together in negotiating terms and conditions. You will have seen the Auditor General refer to a big change we made in 2018, on which the bargaining agents agreed with us. We no longer put in place allowances that require a retroactive pay; it would all be prospective. Allowances would come into place in a way that we would be able to pay them.

We have made other smaller adaptations with the bargaining agents. An example is that across the country, we had different rates of pay in some groups depending on where someone lived. In the last round of collective bargaining with one of the bargaining agents—I'll give you the example of our Department of Justice lawyers, who are called law practitioners—we had different rates across the country; we've now standardized those as one rate.

There are thousands of these rules. We are simplifying and streamlining wherever we can.

An example of a rule we got rid of is that civilians at the RCMP had different rates of pay compared with other employees in the public service who were doing the same work. The bargaining agent worked with us, and we were able to resolve it in favour of having the same standard as elsewhere in the public service.

These—

[The Chair, Conservative, John Williamson]

That is the time. We'll pick it up again, but we're well over.

I yield the floor to Mr. Lemire for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Ms. Reza, I want to make sure I understand correctly. You said that the $1.5 billion allocated in the 2025 budget will be used to address issues related to Phoenix, a system in which we have already invested over $5 billion. We are now making changes to a contract that, following a testing phase, is valued at $350 million. Ultimately, we will invest $4.2 billion in the Dayforce system.

The $1.5 million allocated in the budget for payroll modernization—which system will it be allocated to, Dayforce or Phoenix?

If it's for Phoenix, that means we're investing in something again even though we know the system will be phased out.

Are we going to announce yet again that the cost will exceed $4.2 billion?

[Arianne Reza]

I suggest we provide a written response, as we may not have enough details. What we understand is that the $4.2 billion had already been spent on the Phoenix system—to pay the people who worked on it and the civil servants, as well as for all the contracts awarded. I think that also includes Dayforce.

Regarding the additional funds, I'll get back to you on that. I believe they are still intended to help us reduce our workload in this area and to plan for the inspections and checks that need to be conducted. We'll be able to provide you with a much more precise response in writing.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I would appreciate it. I would even like a breakdown of the data on the total project estimate, as well as data on the actual expenditures incurred to date by type of cost. This includes the internal salaries; the professional services, particularly the professional service fees; the travel costs, which we know were quite high for the Cúram software; the software; the information technology infrastructure; the internal services; the additional costs for Shared Services Canada; and the sales tax.

In my opinion, these items are quite relevant. I would even add the contracts awarded to private firms as part of modernization programs. It seems that we're turning to the private sector to compensate for the loss of expertise in the public service. However, the private sector doesn't necessarily have the best understanding of our systems, particularly in Quebec.

Will the Dayforce software take into account the specific characteristics of Quebec? I'm thinking in particular of the Quebec parental insurance plan; the benefits from the Commission des normes, de l'équité, de la santé et de la sécurité du travail; the Quebec pension plan; or the simple fact that Quebeckers must file two income tax returns.

Will this be taken into account in the creation of new programs?

[Arianne Reza]

I'll give the floor to Ms. Steele shortly.

Regarding the written response, I can try to take a closer look at what we have. However, we may not have all the details that you're looking for.

In terms of the amounts planned for the future, we can't tell you because we don't have the exact figures yet. However, we'll get back to you with the details.

Regarding the parallel system and Revenu Québec—

[Kim Steele]

I'm not—

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Your microphone is off.

[Arianne Reza]

This falls under the purview of the receiver general, but we'll also get back to you on this technical issue.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

[The Chair, Conservative, John Williamson]

Thank you for your clarification on what we can expect from that response.

Mr. Stevenson is next.

You have the floor for five minutes.

[William Stevenson, Conservative, Yellowhead, AB]

Thank you.

Thank you to our guests for appearing today. A lot of the questions seem to be repeating themselves, and I will try not to exacerbate the repetitiveness.

In question period, the procurement minister stated that the backlog we had was reduced by 50%. Today, you said it has decreased by 66% since its peak, and you also said you expect it to be down to about 76,000 by July.

Do you have a date by which you expect the backlog to be done? I'm assuming and I'd like to hope that all of those are actually going to be cleared before you're 100% into Dayforce, but can you give me a date on that?

[Arianne Reza]

I'll start with the second half of your question. Our goal is to go into Dayforce with zero backlog in Phoenix, so we're working very hard on that. Yes, we've gone from 88,000 to 76,000. Every month, we use different automation and different approaches to try to reduce that.

In terms of that timeline, I'm also asking this question internally, because it helps us plan when we can onboard. I don't know if Kim has any further precision—I'm putting her on the hot seat. I know that we're planning for the end of this fiscal year at the latest, but I'm trying to see what we can do to accelerate it. I think March 2027 is the current plan, or up to...?

[Kim Steele]

Up to...yes. Maybe what I will say is that cases fluctuate over the course of the year when there's additional hiring and people are leaving. Those all create cases, so depending on circumstances within government, those case numbers go up and down. We are actively trying to manage it.

The goal, as the deputy said, is to eliminate the backlog before departments onboard. Again, we have a waved onboarding approach so we can focus in on those departments that are going first and ensure that their backlogs are cleared.

[Arianne Reza]

That's a good distinction. There are 214,000 open cases right now, because people join and people go on maternity leave, or whatever example you want to use. We focus a lot of our attention on those ones we've been talking about—the ones who have suffered or who have had outstanding pay issues for many years. Those are among the 88,000.

We will always have an inventory, but that means we have to pull resources from dealing with the new cases to deal with the backlogged cases. There's always a balance in how to manage it.

[William Stevenson, Conservative, Yellowhead, AB]

Earlier, at the beginning of your presentations, Ms. Hogan talked about the problem of the missing costs of the transition.

I assume this question will be for Ms. Reza.

Do you have the numbers, or at least some estimates, of what this transition is actually going to cost? We've talked about a timeline. You're going to be doing these things in duplicate, but can you give us some numbers?

[Arianne Reza]

Currently, I can't quantify that. We certainly took it on as an interesting element for us to consider as we look to identify what the estimates are and what the methodology is as we move to Dayforce, which, as we know, is going to be enterprise-wide.

We talked earlier about 28 different systems. Because employees move between departments, we can't have different systems. Not having an integrated HR-to-pay is a non-starter now that we've lived it, seen it and compared ourselves to other jurisdictions in the private sector.

Now we've introduced this view of how much it will cost for departments to maintain a capacity to make sure that their data going into the HR system is accurate so we can pay our employees in an accurate and timely way. We're still working on what that looks like and being able to quantify it, so we're certainly reflecting on it. We haven't built the estimates, and we have to see what employees we have at PSPC who we would be helping to provide the bench strength. There are a lot of different models that are being considered.