Question Period Note: Update on the move to Dayforce

Progress continues to be made on the transition from the Phoenix system to the Dayforce human resources 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 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 remains committed to supporting employees and continues to take action and implement measures on all fronts to resolve public service pay issues
  • In July 2025, the Government of Canada shifted its focus to finalizing the design and build of the Dayforce solution, which reinforces its commitment to digital transformation focused on transparency, efficiency, and paying employees accurately and on time
  • The Dayforce solution is progressing well, with pre-implementation activities underway, including design and build
  • Enterprise testing is set to begin in summer 2026. The Canadian Nuclear Safety Commission will deploy first, followed by Public Services and Procurement Canada and Shared Services Canada, with all three having a planned go-live date in 2027 to 2028

If pressed on the effects of Workforce Adjustment and the backlog:

• as part of workforce adjustment, affected employee accounts will be resolved, including any backlog cases
• collaboration with client departments, ongoing monitoring of intake patterns, and capacity allocation according to case complexity are critical to mitigating risk. Adjustments to prioritization strategies will be required to protect service standards and maintain overall backlog stabilization

If pressed on the 10-year Phoenix report by the Professional Institute of the Public Service of Canada:

• while meaningful progress has been achieved, Public Services and Procurement Canada acknowledges that some employees continue to experience pay issues
• the department continues to invest in the stabilization of the current system while providing targeted, compassionate support to affected employees
• this includes:
• the increased use of technological tools now makes it possible to process a large volume of compensation cases, speeding up the resolution of complex transactions and significantly reducing processing times
• continued modernization of human resources and pay management processes, and standardization of pay processes across departments

In 2025 to 2026 and 2026 to 2027, 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 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. 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.

Dayforce

Following extensive research, rigorous testing and a comprehensive feasibility assessment, the Government of Canada confirmed that Dayforce will replace Phoenix and more than 30 existing HR systems. This new approach is grounded in lessons learned, including strengthened governance, robust engagement with departments and bargaining agents, phased implementation, and full transparency.

As part of the change management approach, training will be a key factor for success and efforts to begin supporting organizations in their readiness to onboard have already begun. These efforts aim to ensure a smooth transition and reflect the government’s commitment to transparency, efficiency, and paying public servants on time and accurately.

Overpayments

Since October 2021, we have increased our efforts to seek repayment from employees and former employees who were overpaid. In the 2025 calendar year, pay accuracy now sits around 98.4%, and most remaining errors are caused by human resources (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, Treasury Board of Canada Secretariat 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.

Status of the backlog

As of May 20, 2026, the overall inventory of transactions waiting to be processed at the Pay Centre has decreased by 67% since the peak of January 2018, representing a reduction of 426,000 transactions. Additionally, there are 83,000 outstanding transactions over one year old, a decrease of 5,000 from the previous month.

Between April 2025 and June 2026, PSPC estimates that it will process a total of 122,500 backlog and priority cases as part of its commitment to the backlog and in preparation for the initial onboarding to Dayforce.

• As of May 20, 2026, the overall inventory of transactions waiting to be processed at the Pay Centre has decreased by 67% since the peak of January 2018, representing a reduction of 426,000 transactions