Minister of Public Services and Procurement Carla Qualtrough waits to appear before a committee on Government Operations and Estimates in Ottawa on Tuesday, November 28, 2017. iPolitics/Matthew Usherwood

Public Services Minister Carla Qualtrough says she is “hopeful” the malfunctioning Phoenix pay system can be stabilized and paying Canada’s public servants accurately and on time by the end of 2018.

But Qualtrough said the “state-of-the-art” pay system that the federal government thought it was building when it launched the $310 million pay project eight years ago could still be years away.

“If by fixing, will we have a state-of-the-art, integrated HR to pay process? Then, that will take multiple years,” Qualtrough told MPs on the Commons government operations committee.

Qualtrough made her first committee appearance Tuesday since Auditor-General Michael Ferguson released his damning report concluding that fixing Phoenix will take years and cost far more than the $540 million earmarked for the pay system over the next several years.

Qualtrough said the fact that it will take years to fix a system that has left more than half of Canada’s public service facing some kind of pay errors is “unacceptable.”

But she said there is much debate within the public service about what fixing Phoenix means. She said stabilizing Phoenix over the next year won’t mean the system will be working as it was meant to.

Qualtrough said she is hesitant to set a deadline after the government missed its original – and self-imposed — target of clearing the Phoenix backlog by October 2016. When pressed by the NDP to say whether she would resign if Phoenix isn’t stabilized within a year, Qualtrough said she would amend that target if it turns out it can’t be reached.

“I would hope if that goal was not achievable that it won’t come as a surprise by the end of 2018, so I would be forthright and honest and amend my estimation if it becomes apparent that goal cannot be met,” said Qualtrough.

Qualtrough has insisted the government remains committed to fixing Phoenix but that all options — including replacing Phoenix — are on the table. The government is planning to complete a report on the cost of Phoenix and other options by next May.

For now, the government says it has has no choice but to stick with Phoenix because 300,000 public servants still have to be paid.

Qualtrough’s testimony followed a parade of witnesses before the public accounts committee who were called to field questions about Ferguson’s report. MPs called the the Phoenix rollout “incompetent” and pressed for answers on who was to blame.

Qualtrough assured MPs the government is pursuing a four-part action plan with about 20 measures that will be implemented between now and 2019 to stabilize Phoenix.

“I am confident we are headed in the right direction. We have to continuously improve this system. There is just no alternative,” Qualtrough said.

“Time will tell if that confidence is well placed.”

In the short term, the focus is on eliminating the backlog of 520,000 transactions and implementing the collective agreements — which have taken much more work and resources than the government expected.

The government will be hiring more people to help plow through transactions. The government is trying to hire another 300 staffers and hopes to have 1,500 working on compensation by January.

Bureaucrats told the committee the transaction backlog could still grow and won’t be tackled in earnest until early 2018, when the collective agreements are largely completed and tax slips are issued to all public servants.

Qualtrough said the government is now taking a “whole of government” approach to fixing Phoenix, tackling policies, processes, technology and training.

Qualtrough said the government also is working on a study of the “root causes” of the Phoenix debacle. She argues a big factor was the government failing to understand the scope of the project.

The new plan revolves around a ‘HR to pay’ approach that is at the centre of a new training program and a review of all pay policies and processes.

The approach recognizes that pay and human resources are linked. Human resource transactions trigger payments, so they are central to paying employees properly.

Months into the pay crisis, the government realized the extent of the errors and problems caused by data being entered improperly — largely because no one had been trained on how to use Phoenix with the separate HR systems used by departments.

Ferguson said his biggest concern about the ‘HR to pay’ approach is that the government is taking on more complexity and risks as it’s still trying to solve problems with the current system.

“Moving to a HR to pay … expands the scope of the project and they need to understand the risks taken on,” said Ferguson.

Qualtrough said she recognizes the complexity but she said Phoenix will only work if its connected property with HR systems.

Qualtorugh also signalled her openness to reviewing with unions the 80,000 pay rules embedded in collective agreements. These rules made it difficult and expensive to customize the PeopleSoft software used as the basis for Phoenix.

She said Treasury Board could embark on a review of rules in the next round of bargaining, which begins with contracts expire next summer.

NDP MP David Christopherson questioned IBM’s liability for the Phoenix fiasco. Public Services Deputy Minister Marie Lemay said IBM did the work it was asked to do and said the problems rested with the “project manager” — the government.

“Throughout the project, IBM has done what we asked them to do,” she told the committee.

Phoenix is the system that IBM customized for the government out of Oracle’s off-the-shelf PeopleSoft software. All employees are now paid by Phoenix — but the way pay is processed is a mixed bag.

Qualtrough said the government has since changed its contracting with IBM so it is delivering on “outcomes” the government wants rather than simply completing tasks.