'The problem is that this is a system for paying federal public servants. And even though they do tasks essential to society, most Canadians think they’re just spoiled, overpaid bureaucrats.'

As 2018 comes to an end, it’s a time to recap the year’s biggest news stories. In Canada, there was cannabis legalization, the renegotiation of NAFTA, the election of new governments in Ontario and Quebec, and the collapse of the world oil price, which Alberta somehow managed to blame on Ottawa.

Yet if you’re looking at a public policy scandal that should still be big news and hardly rates a mention anymore, look to the Phoenix pay debacle. Since the ill-conceived pay system for federal public servants was rolled out in early 2016, this mess has cost taxpayers an estimated $1.1 billion — and it could cost billions more before it’s fixed.

The problem is that this is a system for paying federal public servants. And even though they do tasks essential to society, like guarding our prisons and making sure our food is safe, most Canadians think they’re just spoiled, overpaid bureaucrats. So what if public servants are not paid the money they are due and have to check every pay stub or T-4 slip to make sure they haven’t been cheated?

There may have been lots of stories about public servants getting underpaid, overpaid or not paid at all, but they never really got much traction outside the National Capital Region.

I sometimes wonder what public reaction would have been if the same incompetence had been shown in designing a computer system responsible for the issuance of old age security payments or employment insurance benefits. Political heads would have certainly rolled down Wellington Street from the now-shuttered Centre Block.

Even public service managers are starting to get upset. The 6,700 employees in the executive category were finally told earlier this year they’re getting “economic” raises going back to mid-2014, totalling about six per cent. The numbers were only decided upon after unionized employees had all signed their own collective agreements.

But the executives still haven’t seen a cent of that money. Because of recurring Phoenix issues, they’ve been told not to expect it until mid-2019. That’s nearly six years after the money was earned. And when they get that cash in a lump sum, it will probably end up inflating their 2019 incomes and force them to pay tax at their highest marginal rate. They may be executives, but it’s a pretty shoddy way to treat anybody.

So where are we overall with Phoenix? The government says things are getting better. That’s true, but it’s only relative. Every month, Public Services and Procurement Canada publishes what it calls “the pay centre dashboard,” where it highlights the backlog of unresolved pay problems.

At the end of November, the backlog included 289,000 “financial transactions beyond normal workload.” A spokeswoman for Public Works Minister Carla Qualtrough boasts that this part of the backlog is down by 130,000 since January.

While that’s true, if you look back to June of 2017, when the dashboard began, there are still 21,000 more transactions in the backlog now than there were then. What happened is that the backlog soared all through 2017 and only dropped below 300,000 a couple of months ago. The government says half of all public servants are still experiencing some sort of pay-related problem. The union say it’s more.

The department won’t even say when its target of zero transactions “beyond normal workload” will be attained, almost three years after the scandal began.

But the government does insist it’s finally getting a handle on the situation. Officials credit improvements to the creation of what are called “pay pods” at the centralized pay centre in Miramichi, N.B. Before Phoenix was created, each department or agency used to have its own group of compensation advisers, or pay clerks, who would know the quirks of collective agreements, obscure pay categories and specifics of some of the 80,000 pay rules that govern employees in the federal government.

With the goal of saving money, 1,200 departmental compensation advisers were eliminated, replaced by 550 employees in Miramichi, who specialized in specific transaction types. So if an employee of the Coast Guard, for example, called about retroactive pay, she would get a retroactive pay specialist who would fix it. But if she had an additional issue about a shift premium or vacation pay, she’d be out of luck and have to start all over again with a new complaint. Frustration levels soared.

The new pods of pay advisers now are assigned to specific departments, and “all of an employee’s outstanding pay issues are addressed at once,” according to the department. Guess what? It works. It’s been so successful in clearing up backlogs that the government plans to have pay pods implemented for all 46 departments and agencies served by Miramichi and its satellite offices by next spring.

Talk about rolling back the clock. Phoenix was all about centralizing the government’s pay function. The pod system essentially returns to a more logical, decentralized system of compensation advisers. But instead of them being located within departments in Ottawa or wherever, they’re all sitting in New Brunswick and elsewhere in the country.

And remember how the new pay system was supposed to save money by getting rid of supposedly superfluous employees? When Phoenix was launched in early 2016, there were 550 employees in Miramichi working on pay problems. Now, with new satellite offices set up across the country, there are 1,700.

The government says its priority is to “stabilize” Phoenix — bureaucratic-speak for halting the disaster. There was also $16 million in last spring’s budget to start working on a replacement.

There are a slew of lessons to be learned from this debacle. Among them? Auditor General Michael Ferguson’s reminder of “pervasive cultural problems” in the public service that keep senior public servants from speaking truth to power and being able to handle major projects.

But there’s another lesson for politicians, as well. Phoenix was supposed to save money easily — and create jobs in New Brunswick. The Harper government used to boast about painlessly saving money in the government’s “back office operations.” It’s a promise repeated by Ontario Premier Doug Ford, who said on the campaign trail how easy it would be to save billions without laying anyone off or cutting programs.

Easy savings in government are elusive, if not impossible. Lower spending generally means lower services. There are savings to be made in any administration, but they’re likely to be small and incremental. And you often have to spend money to save money. Mindless cutting leads to disruption, distress and, in the end, much higher costs.

Just look at Phoenix.

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