What you should know: Six years of the Phoenix pay disaster

February 28 marks the grim sixth anniversary of the Phoenix pay disaster.

The Phoenix pay system has been financially and psychologically devastating for tens thousands of PSAC members. More than half of all federal public service workers have been underpaid, overpaid or not paid at all. Incredibly, six years later, there is still no end in sight for the Phoenix pay fiasco.

Since 2016, there hasn’t been a single pay period without issues. Paycheque after paycheque, our members are still facing constant stress and anxiety wondering if they’ll be paid correctly.

In last year’s Public Service Employees Survey, more than one in three federal workers said they’ve experienced Phoenix pay issues in the past year alone. Of those, more than 60% were still waiting for their issues to be fixed. To this day, Phoenix is impacting workers’ decisions to transfer to new jobs, take a promotion and even retire out of fear they’ll be ‘Phoenixed’.

Public service workers want to see an end to their pay problems. They deserve to be paid correctly, and to have any issues resolved quickly and within concrete timelines.

Where do we go from here? 

Fixing pay problems and eliminating the backlog 

Instead of shrinking, in recent months the Phoenix backlog has increased. There are still more than 141,000 Phoenix cases in the backlog, with new ones created every single day. Thousands of these issues date all the way back to 2016 and still haven’t been fixed. 

The ordeal won’t be over for federal public service workers until the government puts in place a pay system that pays our members accurately and on time, every time. But that’s still years away, so the only solution right now is hiring more compensation advisors to fix the pay issues created every day, and to eliminate the growing backlog of cases. 

That is why securing a lot more compensation advisors is a top priority of the union’s work on Phoenix. 

We also have to address the fact that working in compensation with a broken pay system is a difficult and stressful job, and this has caused problems with hiring and retention. That’s why we have also demanded that the government renew the recruitment and incentive package for compensation advisors to attract and keep these highly trained staff. If Phoenix can’t be fixed tomorrow, then the least Canada’s largest employer can do is hire the people we need to prevent more pay issues and solve them quickly when they happen. 

Ongoing damages compensation 

PSAC negotiated $2500 in general damages compensation for the pain and suffering caused by Phoenix from 2016 to 2019, but the problems never stopped.

Since then, over the past three years, PSAC members still haven’t been paid properly, and deserve additional compensation for the hardships they continue to endure.  
This is why PSAC will begin the work of fighting for ongoing general damages as soon as possible.  

We will also work to ensure that the claims process negotiated in our last agreement for expenses and major losses also be available to our members as long as they continue to experience Phoenix pay problems.

Phoenix damages shouldn’t be taxable 

The Phoenix damages PSAC negotiated to compensate for the stress, aggravation, pain and suffering caused by years of pay issues should be tax-free, like other damages agreements. 

However due to inaction by Treasury Board, it was deemed taxable. 

Since then, Treasury Board and the Canada Revenue Agency – have refused to even review the taxability of Phoenix general damages despite numerous appeals by PSAC. Time has unfortunately run out to resolve this problem proactively.  

This tax dispute which impacts more than 165,000 PSAC members, will have to be addressed through individual tax appeals.

If you would like to appeal the taxability of your general damages claims, please use the information found here to support you in that process. 

The future pay system 

The government’s work to replace the broken Phoenix pay system has begun, but we’re still years away from the Next-Generation Human Resources and Pay system. 

Canadian-made software from Ceridian was selected in 2021 from among three companies competing to replace Phoenix. As the work proceeds, PSAC is part of the consultation process and has a dedicated Phoenix team providing feedback on its development and eventual rollout. As part of the testing, a pilot program has been started in some departments before being rolled out to the rest of the federal public service as development continues. We will update members as more information becomes available. 

We expect PSAC members who work in the pay centre to continue to be consulted during the development and testing of the new pay system. They fix employees’ pay issues every day and they know only too well the problems they have had to face with a broken system.  

PSAC leadership warned the government Phoenix wasn’t ready before it launched in 2016, but they went ahead and launched it anyway. We know what the result was, and we cannot allow this to happen again. 

Our union will do everything possible to make sure they get it right. 

It’s time for a national public inquiry into Phoenix 

The Phoenix pay fiasco has been a national disgrace that cost taxpayers billions of dollars and negatively impacted hundreds of thousands of Canadians, including tens of thousands of PSAC members.  

The auditor general’s scathing 2017 report on Phoenix, called it an ‘incomprehensible failure’, yet almost four years later the government has not provided any more answers, and nobody has been held accountable. We do not even know which, if any, of the most damning problems raised by the report have been followed up on. 

The true scope and impact of this unmitigated disaster will never see the light of day unless a national public inquiry is launched. 

It is the only way that we can prevent Canadians from suffering a similar disaster in the future. 

Over the coming weeks and months, PSAC will be pressing members of Parliament to launch a national public inquiry in order to hold this government accountable and make sure the same mistakes will never be repeated.   


February 24, 2022