With an extra $307 million to spend on Phoenix, this is the year the Trudeau government would like to put the pay crisis behind it.

Public Services Minister Carla Qualtrough certainly wasn’t keen on setting a target date for stabilizing Phoenix when she testified at the government operations committee this week, but she expressed “optimism” that the troubled pay system may be turning a corner.

Her department, the federal paymaster, is managing the files that come in and chipping away at the queue which, at last count, has a massive backlog of 607,000 transactions at the Miramichi N.B. pay centre. The department’s latest Phoenix update showed that backlog continues to drop, inching downward since January.

Phoenix is still erratically not paying people, but those numbers have dwindled to between 20 and 40 a month compared to hundreds a month in the months after the error-prone system was rolled out in February 2016.

The department has done enough fixes, revamped processes and trained employees that most transactions (about 90 per cent of them) sail through as long as they are filed on time. Phoenix is still finicky with retroactive pay and is likely to foul-up a transaction that involves retroactive payments, such as extra pay for an acting position.

This glimmer of hope couldn’t come at a better time. Public servants are exasperated: more than half of the 300,000 paid by Phoenix have some kind of outstanding pay issue.

And the unions, feeling the backlash of their own members, are losing patience. They’ve vowed to ‘escalate action’ in the 18 months before the 2019 election to pressure the government to resolve Phoenix and pay damages to employees for more than two years of botched pay. In fact, the giant Public Services Alliance of Canada is threatening to campaign against the Liberals in the next election if public servants aren’t paid properly by then.

This enthusiasm, however, will quickly be overshadowed by Auditor-General Michael Ferguson who is delivering his long-awaited probe into how Phoenix went off the rails on May 29.

So here’s a Phoenix update provided by Qualtrough and her officials at government operations committee where they were called to explain and defend the department’s spending plans:

“We will not keep Phoenix in perpetuity, but right now, we need to focus on stabilizing this system to get us to the point where, first of all, we’re handing over clean data to any new system. And second of all, people are being paid in the meantime,” Qualtrough said.

Where is the money going?

The budget gave Public Services and Procurement Canada (PSPC) $431 million to resolve Phoenix pay issues, but the specifics on how that money will be spent is unclear. The department is currently doing a Treasury Board submission on what it plans for the money. The largest piece — $307 million — will be spent this year to cover hiring more compensation advisers, human resource staff and improving systems. The main vendor is IBM, which built Phoenix under a contract that expires in 2019.

“Regarding the funding for Phoenix, we have been building capacity on the HR front and also working with the vendor on systems,” said Les Linklater, PSPC’s associate deputy minister who stickhandles efforts to stabilize Phoenix.

“These funds will allow us to continue to maintain that capacity and to augment it so that we can keep the compensation staff we’ve hired on strength, and to hire further.”

PSPC has been on a hiring spree for months to build a team of 1,500 compensation advisers. It has already hired more compensation than the 700 who were laid off by the Conservatives in the expectation that Phoenix would replace them.

Linklater said the department brought an additional 325 new hires in January; hired another 60 this month and is offering another 90 jobs to students at the Université de Moncton.

“We are still in the hiring mode. This will continue, just to ensure a good pool of employees who will be available to help us, and to help departments and agencies as well.”

Speaking of numbers: The backlog is shrinking.

PSPC released its latest Phoenix update this week and indications are the backlog is declining from its peak in January.

The transactions with a financial impact, which PSPC worries about the most, dipped by 5,000. The ones with no financial impact (such as queries from employees), however, increased as did those in the “waiting to be closed” category.

The pay centre handles pay operations for about 45 departments that employ about 70 per cent of the public service.

The 607,000 outstanding cases at the pay centre include 452,000 financial transactions; 101,000 general inquires or ‘non-financial’ transactions; 14,000 collective agreement transactions and 30,000 completed transactions waiting to be closed.

The pay centre can handle a normal monthly workload of about 80,000 cases: last month it had 372,000 beyond its capacity.

The pay centre received 131,000 pay requests between March 21 and May 2 and processed 136,000 of them. It also manually processed about 3,000 transactions created by new four-year collective agreements for employees.

The rest of the departments, which use Phoenix but process their own employees’ pay, face a stockpile of about 35,000 cases — an increase of 3.4 per cent over the last monthly update. These transactions are either pay problems or unfinished transactions.

At the same time, the number of regular pay transactions — excluding collective agreement transactions — processed within the 30-day service standard slipped to 54 per cent – compared to 59 per cent in March.

In Pod We Trust….

Qualtrough is confident the pay pods the PSPC is rolling out across government by mid-2019 will further reduce the backlog — and rebuild the relationship between departments and the pay centre.

The pods were conceived by employees at the Miramichi pay centre. It began as a pilot project in three departments last December — Veterans Affairs, Innovation Science and Economic Development and the Federal Economic Development Agency for Southern Ontario — and was so encouraging that PSPC decided to ramp it up “exponentially.”

The backlog was reduced by 24 per cent for the three departments; the number of people with outstanding pay problems fell by 11 per cent. About 88 per cent of the transactions were completed within PSPC’s average 30-day service standard.

The pod teams will work directly with departments. They will become experts in the collective agreements and the unique pay rules to a department. In some cases, departments with similar pay regimes or work will be clustered and served by a pod.

It is also a “whole person approach,” with teams resolving all the pay issues of an employee instead of tackling them by transaction, such as maternity leave or disability.

The transition to ‘pay pods’ begins with three new pods for 12 more departments by the end of May, followed by another wave in September.

MPs not as enthused

Some MPs on the government operation committee don’t appear to share Qualtrough’s optimism that Phoenix may be turning a corner.

NDP MP Randall Garrison said the pace of improvement touted by Qualtrough was so slow that public servants could wait between two to nine years for pay issues to be resolved.

“That’s just not acceptable,” he said.

“I’m going to present you with a different picture and that’s from my constituents,” Garrison told Qualtrough. I represent a riding where we have a thousand people with Phoenix pay cases. We have DND, we have the coast guard, we have Revenue Canada. I have a whole lot of people who don’t share your optimism.”

Qualtrough recently came up with a new mechanism to help MPs deal with the Phoenix complaints swamping their constituency office. (Most of Canada’s public servants work in regions outside the National Capital Region.)

PSPC received 590 cases in March; 400 in April. About 34 per cent of last month’s 400 cases were processed with notices sent to MP offices on the expected date of resolution. About 35 per cent of the cases dealt with retroactive payments or adjustments.

Garrison said the 13 cases he sent PSPC have yet to be dealt with and he has another 80 from National Defence firefighters who have all been underpaid.

“People base their family budgets and paying their bills on the pay that they’re entitled to get and when they don’t get it, it creates severe problems. I know you painted a somewhat rosy picture of the progress. I just don’t see it, but more importantly, the public servants in my riding don’t see it,” Garrison said.