The replacement for the beleaguered Phoenix pay system will have to better integrate the government's human resources and pay departments, Public Services and Procurement Canada Minister Carla Qualtrough told senators at a committee hearing Wednesday night.

In the government's budget released in February, $16 million is set aside to replace the pay system that has continuously failed to pay employees correctly since it was launched more than two years ago.

Qualtrough told senators at the finance committee they have learned a new system can't put pay and human resources in silos.

"The partners in this crime are HR and pay and we know we can't just focus on the pay," she said.

"We have learned from everything that HR and pay are mutually dependent. They don't exist in isolation especially in this day of age."

She said the government currently has 32 different HR systems, all of which are integrated into Phoenix with varying levels of success.

Qualtrough said while there is a lot they still need to determine about the new system, it will cover both areas.

"I envision a time where we don't talk separately about an HR system and a pay system," she said.

Backlog didn't grow

While the government continues to find a replacement, Qualtrough said they have no choice but to try and stabilize Phoenix, stopping short of suggesting the system will be fixed.

She said they have seen some small progress in the last month, with the pay centre resolving 4,000 more cases than new cases came into the system.

"This means that the backlog at the Miramichi [N.B.], pay centre did not grow for the first time since last July," she said, while adding it could grow again.

She said compensation advisors are now being grouped into pods dedicated to specific departments, which she said allows them to gain expertise.

"If it's the Coast Guard, you can imagine, it's a different set of transactions than Elections Canada," she said.

She said they hope to transition all the pay advisors to this approach with the goal of reducing wait times for everyone over the next year.