Question Period Note: Update on Pay Stabilization

Progress continues to be made on the way forward on the transition from the Phoenix system to the Next Generation human resources (HR) and pay solution.

Notes:

• All questions related to the mental health of public servants, collective agreements and compensation for Phoenix damages agreements should be directed to the President of the Treasury Board
• Issues related to income tax are under the purview of the Minister of Finance and National Revenue

• The Government of Canada is committed to supporting employees and continues to take action and implement measures on all fronts to resolve public service pay issues
  • In June 2025, the Government of Canada announced its intention to move forward with the Dayforce human resources (HR) and pay solution to replace the Phoenix pay system. This decision comes following the completion of the Dayforce feasibility project and the publication of the Feasibility Report. The results demonstrate that Dayforce is a feasible solution for HR and pay transformation
  • The intent of the feasibility project was to advance the readiness of both the Dayforce system and government of Canada departments, and to have confidence that all identified issues have viable solutions that can be implemented before deploying Dayforce
  • Efforts in the next fiscal year will prioritize completing the Dayforce solution build, with readiness for testing targeted for summer 2026

In 2024-25, the feasibility of transitioning to a Software-as-a-Service integrated HR and Pay solution (Dayforce) was assessed as part of the Transformation of HR and pay. Work is ongoing to build and test the solution and to begin carrying out change management activities with departments and agencies.

In 2025–26 and 2026–27, Public Services and Procurement Canada (PSPC), in collaboration with its partners, will focus on finalizing the building and testing of the Dayforce solution. In parallel, essential change management activities will be undertaken to support departmental, operational, and enterprise readiness for a potential deployment.

Since the launch of Phoenix, PSPC has implemented a series of measures focused on stabilizing the administration of pay. We have also focused on other operational priorities in pay administration including pension arrears, terminations, and overpayments. We have improved service standard compliance while managing sustained increases of transactions submitted to the Pay Centre by departments and agencies. PSPC is looking at Artificial Intelligence (AI) to further automate case processing. AI will play a key role in managing transactions at the Pay Centre, and it will help to process transactions faster, with greater efficiency and accuracy. As part of its work on AI, the GC is committed to its ethical and transparent use. As such, we have established an AI Advisory Committee and an AI Operational Ethics Review Board. We are also taking a proactive approach to transparency by publicly sharing updates on our AI activities and achievements.

In addition, the Automated Benefit Enrollment initiative is a multi-phase project designed to streamline and automate benefits enrollment. By reducing manual processes, this initiative allows compensation advisors to focus on complex transactions across the Government of Canada.

Update on the queue and “one year plus” backlog:

• As of May 21, 2025, the overall queue of transactions waiting to be processed at the Pay Centre has decreased by 51% since the peak of January 2018, representing a reduction of 313,000 transactions
• As of May 21, 2025, there are 153,000 outstanding transactions over one year old, a decrease of 8,000 from the previous month

Note: As of April 23, 2025, the total number of transactions ready to be processed no longer includes the four financial transaction types repatriated by Employment and Social Development Canada (ESDC) in fall 2018 (at their request). This change to reporting provides a more accurate reflection of the Pay Centre’s active workload, since ESDC is responsible for this processing. It represented a total of 25,000 transactions, which explains the large decrease observed this month in the total volume of transactions ready to be processed, along with transactions received over 1 year ago.

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