The Trudeau government is going to start looking for a ‘modern’ replacement to the problem-plagued Phoenix system that has fouled-up pay cheques for at least half of Canada’s public service for two years.

Public Services Minister Carla Qualtrough said she and cabinet colleague Treasury Board President Scott Brison are starting a process to examine options for “what the next phase of pay for the public service will look like.”

Qualtrough said she remains “laser-focused” on stabilizing Phoenix, but a second track will begin to look at alternatives that would be more “sustainable” over the long run than the troubled and patched-up Phoenix.

She is confident that Phoenix can be stabilized — with the backlog eliminated and employees paid properly by the end of the year — but that won’t be the “long term solution; the state-of-the-art pay system that public servants deserve.”

It was two years ago this month that the Liberal government rolled out Phoenix in the first of two waves to pay 300,000 federal employees. Phoenix, an IBM-built pay system, was the second leg of the massive $310-million pay modernization project launched by the former Conservative government in 2008.

Qualtrough said technology has changed dramatically since the project began a decade ago and, as such, it’s worth exploring how a pay system for a large enterprise like the government would be built today, including consideration of new cloud-based solutions.

“When you think this project was scoped almost 10 years ago, technology has advanced … If I was to go out in the market and say: ‘what is the best and most modern way people are paid in a major modern enterprise like ours’? Would it look like this? I don’t even know,” she said.

Brison, the other minister charged with resolving the government’s pay crisis, echoed similar sentiments during a recent appearance at the Commons government operations committee on the supplementary estimates.

He told MPs it’s time to look at fresh approaches to the IBM-built Phoenix without the “tyranny of sunk costs.”

“If we were to look at this with fresh eyes and a fresh team of people using modern digital protocols and technology, you may find there is a new way that can actually address this issue faster,” he said.

Brison said such an examination would require a “two-track approach,” with continuing efforts to stabilize Phoenix while “being open to completely new approaches that reflect modern digital technologies today that were not even around 10 years ago when the system was conceived.”

The two ministers sit on the working group of ministers, appointed by Prime Minister Justin Trudeau to oversee the Phoenix disaster, and play two different roles in managing the Phoenix crisis.

Qualtrough is paymaster, responsible for Phoenix and fixing it and Brison is the employer and general manager responsible for policies managing the workforce.

Brison is also leading the government’s digital strategy, calling for a major rethink of how the government works, provides services and buys technology. Qualtrough, running the department that does the government’s buying, would have to drive any procurement reforms.

And the Phoenix crisis has thrown a spotlight on the culture of a process- and rules-driven public service that many say needs to change to survive in a digital world.

Qualtrough previously signalled she was willing to look at other options, but stabilizing Phoenix was the top priority. And that’s where all the energy has gone – accelerated by Auditor-General Michael Ferguson’s damning report on the misfires in the rollout and its exploding costs.

Ferguson advised the government to stick with Phoenix because employees had to get paid and a new system might run into all the same problems.

Public Services and Procurement Canada has since launched a major stabilization plan. Many of the 20 measures are aimed at harmonizing pay and human resources operations and modernizing business practices and processes: changes that should have been done before Phoenix was even conceived.

Qualtrough said this plan, which includes cleaning up data and employees files, would lay the groundwork for any new system.

“So many of the lessons we have learned can be applied and ideally expedite the acquisition of anything we might end up going with in the future,” she said.

Qualtrough said a working group of ministers is now having preliminary discussions on how a two-track process could unfold. Public servants and unions will be consulted for ideas and she said no staff, money or other resources will be diverted from fixing Phoenix to the second track of looking at new options.

She said it’s unclear how much Phoenix will cost to fix, but Finance Minister Bill Morneau, whose next budget will be released Feb. 27, has assured the working group that “money will not be the barrier” to stabilizing Phoenix.

“We are going to spend what we need to spend but we have to invest toward a positive outcome,” she said.

So far, the government has spent about $402 million on fixing Phoenix and is seeking Parliament’s approval for another $76 million in new funding for this fiscal year to help bring Phoenix to a so-called ‘steady state.’

The government’s willingness to look at other options couldn’t come at a better time for unions, which are facing the heat from frustrated members after two years of Phoenix foul-ups.

Last week, 17 federal unions marked the system’s second anniversary by sending a letter to Trudeau with a list of demands, including a plan to rebuild Phoenix.

Senior management and labour leaders have been working together on Phoenix, but Debi Daviau, president of the Professional Institute of the Public Service of Canada (PIPSC), said unions wanted more attention placed on finding a permanent solution and not just managing the crisis.

Daviau said PIPSC is gearing up for a “Nix Phoenix” campaign to replace the “Fix Phoenix” campaign of the previous two years.

In fact, Daviau proposed building a new system to replace Phoenix several months ago. She argued the government’s own IT workers, not the private sector, should build it and would have a new one ready within a year. PIPSC represents the government’s IT workers.

At the time, Daviau said the new system could be built on the latest version of the PeopleSoft, which is the basis for Phoenix. PeopleSoft is the off-the-shelf software that IBM adapted for the government payroll.

Today, Daviau said she only suggested PeopleSoft because the government was so invested in the software, but she is willing to explore any new pay technology.

She said PIPSC, which is opposed to contracting out government work, is willing to work collaboratively with the private sector to “bring new technology into government.”

She also said PSPC should stick with fixing Phoenix and have nothing to do with searching for its replacement. Instead, a new central unit should be set up to examine options.

“Everyone knows we will never have a stable system with Phoenix,” Daviau said. “It is too fragile and a patchwork of band aids that will not be solid enough to sustain going forward. We are doing workarounds and manual processing. That is not sustainable.” said Daviau.