Problems with the federal government's Phoenix pay system for public servants were "stabilized" in March and April, but new collective agreements coupled with the recent surge of summer hires have stalled the repair job, according to Friday's government update, the first in two months.

The backlog of transactions that need to be resolved now sits at 265,000, down from the 284,000 cases that clogged the system in early April.

Marie Lemay, deputy minister in charge of the pay system, told a teleconference update that the government has hired about 5,000 summer students, and about 24,000 federal employees are covered by new or recently ratified collective agreements.

"We were able to stabilize the queue in March and April, but we weren't able to bring down the queue, and as seasonal intakes that happen every year [come in ] … that is the peak that's caused the increase for the month of May," she said.

Lemay said it could take until August to process the new data, raising the possibility of fresh pay problems for those employees.

Union: you should have expected this

Last week, the government announced it's spending $142 million to hire more workers to process Phoenix cases, which Lemay said will be a big help.

"What became very clear with the collective bargaining agreements, being a priority that we had to process this and we had to reorganize our work, is we needed extra capacity to be able to bring the queue down," she said.

"So we were able to stabilize it, the seasonal peak made it increase and the extra capacity now will let us bring it down."

One of the biggest public servant unions, the Professional Institute of the Public Service of Canada, said this reaction is a concerning lack of foresight.

"It doesn't reflect any progress, any improvement of the situation," said Stephane Aubry, the union's national vice-president.

"There's going to be more and more transactions for the next month, and they don't have the capacity to process them. That's what's apparent in their statement, they didn't plan for the summer period."

Stephane Aubry, the national vice-president of PIPSC, says if the government always hires seasonal workers this time of year and knew all these collective agreements would have to be processed, why wasn't it more proactive? (CBC)

The Liberals have made the argument, and made it again on Friday, that the previous Conservative government cut hundreds of compensation worker jobs, which led to this lack of capacity in the system that they're now fixing.

Tens of thousands of government workers representing more than one-third of its workforce have had pay problems since Phoenix launched in February 2016.

It will cost more to fix Phoenix — $402 million and counting — than the $309.5 million it took to launch the troubled pay system.