OTTAWA—Parliament Hill descended into political finger-pointing over who should bear the blame for the botched Phoenix pay system Tuesday, after Canada’s auditor general released a damning report that left him grasping for words to describe his disappointment.

Auditor General Michael Ferguson said that it will take years and cost more than $540 million to fix the problem-plagued Phoenix pay system, which created a backlog of more than 150,000 federal employees representing more than half a billion dollars in pay errors.

“It’s hard to characterize,” Ferguson said Tuesday, after tabling his report in the House of Commons..

“‘Unacceptable’ just doesn’t capture the seriousness of the issue,” he said.

“They didn’t understand the size of the problem.”

The report immediately touched off partisan rancour, with Liberals blaming Conservatives for creating Phoenix starting in 2009 and Conservatives accusing Liberals of recklessly implementing the system before it was ready.

Ferguson’s report focused only on the problems with the system’s implementation since February 2016. He slammed the government for taking too long to start working on a lasting solution to problems that started accumulating almost immediately, as well as for failing to accurately track and report on the ever-growing backlog of pay errors clogging the new system.

As of last April, more than a year after Phoenix launched, 51 per cent of federal employees were getting paid too much or too little, Ferguson’s report found. There were also more than 490,000 outstanding pay errors in the system, which Ferguson said is “very much the minimum,” given that he was only able to access backlog information from 46 of 101 government departments and agencies that use the Phoenix to pay employees.

Ferguson noted that a similar yet “less complex” system implemented by an Australian health authority took seven years and $1.2 billion to get working.

Public Services Minister Carla Qualtrough, whose department is responsible for Phoenix, said she welcomes Ferguson’s report and is heeding his call to make fixing the pay system the top government priority. She said her department is “desperately trying to pay people as quickly as possible,” and defended the efforts the government has made to speed up Phoenix’s processing times.

“It’s not fair and it is unacceptable,” she said.

But the Liberal government also framed the report as a denunciation of decisions made by their Conservative predecessors.

“The Conservative government bought this system, created this system, and we will fix this system. It is unacceptable that Canadians aren’t being paid for the work they’re doing,” Prime Minister Justin Trudeau told the House during Question Period.

“The Liberal government did not create this mess, but we are going to fix this mess.”

Conservative Leader Andrew Scheer dismissed that as “government spin”, while Ontario MP Tony Clement — who was Treasury Board President for the Tories from 2011 to 2015 — accused the Liberals of ignoring the warning signs raised about Phoenix before they took government.

“They pressed the start button. That’s the issue here,” Clement said.

Qualtrough, who told CTV News last week that addressing Phoenix could cost up to a billion dollars, would not discuss how much time or money the government expects to spent fixing the system. She said that while the Liberal government had no other option upon taking power than to “work with Phoenix,” all options are now being considered, including a union proposal to scrap Phoenix and build an entirely new system from scratch.

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“Nothing is off the table,” she said.

Phoenix was initially supposed to cost just $310 million to implement and was pitched by the Conservatives as a way to save taxpayers $70 million per year by centralizing how public service workers get paid.

The system replaced a 40-year-old patchwork of paycheque distributors in the federal government, and involved the creation of a new service centre in Miramichi, N.B., where workers handle pay services under Pheonix for 46 federal departments. Fifty-five other federal departments are responsible for their own pay services under the new system.

Ferguson found that departments and agencies switching to the new system encountered problems from the start, when they started moving their pay services to Phoenix in February 2016.

He slammed Qualtrough’s department for taking four months to “recognize there were serious pay problems” and more than a year to start working on a “longer-term plan for a sustainable solution.” That plan was still in the works at the end of June 2017, when the period that Ferguson examined came to an end.

By that time, the backlog of pay changes in the 46 departments using the Miramichi pay centre had skyrocketed from 95,000 to more than 494,000, a number that was “significantly higher” than what Public Services and Procurement Canada had publicly reported, Ferguson’s report says.

But this number does not include outstanding pay errors in the 55 other federal departments that handle their own pay services because “this information is not available,” the report says.

The backlog in the system related to requests to change paycheques for new employees like summer students, employees on leave, those who received promotions, and workers who transferred to new departments.

Requests for corrected pay — which are supposed to take “about 30 days” — were taking more than three months on average to be completed, the report concludes. About 49,000 government employees were still waiting for more than a year for their correct paycheques, and more than 32,000 of them had “high financial impact” errors worth at least $100, the report says.

The report notes that Phoenix was designed to include about 200 custom programs to handle the 80,000 different pay rules inside the federal government. It took Public Services and Procurement Canada more than a year to determine that it needed to analyze these 200 programs in order to fix Phoenix, and by June 2017, it had only looked at six of them, the report says.

The report says that Public Services and Procurement and the Treasury Board have agreed to finalize a “preliminary” plan by December of this year.

“The federal government has an obligation to pay its employees on time and accurately,” the report concludes.

“Not doing so has had serious financial impacts on the federal government and its employees.”

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