Question Period Note: Update on the move to Dayforce

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

Notes:

• All questions related to the mental health of public servants, collective agreements, overpayment write-offs due to the six-year statutory restriction 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 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 human resources 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

If pressed on the status of Dayforce:

• Efforts have now shifted to focus on finalizing the design and build of the Dayforce solution, so enterprise testing can begin in summer 2026
• The Government is also working with federal organizations to confirm their readiness to onboard onto the new solution. The deployment will occur in incremental waves, onboarding a set number of organizations at a time to ensure a smooth transition
• The move to Dayforce reflects the Government’s continued commitment to digital transformation focused on transparency, efficiency, and paying employees accurately and on time

If pressed on Phoenix overpayments:

• Since October 2021, we have increased our efforts to seek repayment from employees and former employees who were overpaid
• We recognize that the recovery of overpayments can be stressful for those impacted, and multiple measures are in place to support individuals experiencing financial hardship, including flexible repayment options. The recovery of these funds is part of the responsible handling of taxpayer funds

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.

On August 21, 2025, the acquisition of Dayforce by Thoma Bravo, a private equity firm specializing in software investments, based in the United States, was announced. The existing contract between the Government of Canada and Dayforce, which was amended on March 31, 2025, remains valid. The solution is hosted in Canada and all the resources who work on the contract directly require Canadian clearances or equivalent. The contract also requires that all data be stored in Canada. Dayforce reaffirmed its commitments to the Government of Canada and emphasized that the acquisition would not affect the existing partnership, service delivery, or contractual obligations.

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 parental leave, disability management, terminations, and overpayment recovery. 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 inventory and “one year plus” backlog:

• As of November 19, 2025, the overall inventory of transactions waiting to be processed at the Pay Centre has decreased by 59% since the peak of January 2018, representing a reduction of 376,000 transactions
• As of November 19, 2025, there are 122,000 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.

Overpayments

When pay issues first emerged in 2016, PSPC prioritized stabilizing the pay system and supporting employees, rather than prioritizing the recovery of overpayments. Following this, a TBS bulletin was issued in 2018 which allowed alternate timelines for the recovery of overpayments, including a deferral of repayments. This bulletin was then extended due to the COVID-19 pandemic until it was updated in 2021, which allowed for recovery efforts to recommence. Since October 2021, we have increased our efforts to seek repayment from employees and former employees who were overpaid. Pay accuracy now sits around 98.4%, and most remaining errors are caused by HR actions that are delayed or entered incorrectly. The most common cause of an overpayment is a late entry or processing of a transaction that affects an employee's pay, which accounts for about 70% of all overpayments. Strong HR management and accountability are essential. Departments and managers must enter information on time and accurately. When they do not, it can lead to incorrect pay, including overpayments. The Pay Centre provides regular updates where the importance of timely and accurate data entry by HR within our client departments is reiterated.

Additionally, as part of the Unified Actions for Pay (UAP) initiative, TBS and PSPC introduced new measures to strengthen HR and pay practices and improve the reliability and consistency of HR data. These measures support better pay outcomes for employees, increase system automation and enhance data quality within existing procedures and standards.

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