The federal government plans to scrap the beleaguered Phoenix pay system for federal employees, though its death won’t come quickly.
In the 2018 federal budget, the government announced that it intended to “eventually move away from Phoenix” and explore the “next generation” of the federal government’s pay system. This won’t happen anytime soon though. The budget allocates $16 million over the next two years to researching a new pay system.
Not only that, the government is also planning to invest $431.4 million over six years to try to fix the existing Phoenix system.
Added to the hundreds of millions the government has already invested in fixing Phoenix, that puts the total bill at roughly $900 million – on a system that will ultimately be dumped.
“By the time they’re done, if this is all the money they put in, they will be out almost a billion dollars in spending just to correct the Phoenix system,” said Randall Bartlett, chief economist for the Institute of Fiscal Studies and Democracy at the University of Ottawa. “But then they are planning to abandon the system subsequently and create an entirely new system.”
“So the whole thing will have been an exercise in government waste and largesse at the end of the day, which ultimately made everyone worse off at the end.”
The Phoenix pay system was supposed to save money: $70 million per year, starting in the 2016-17 fiscal year, according to a report from the Auditor General. That same report noted that over half of public servants had experienced some issue with pay – being paid too little, too much, or not at all.
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Scrapping Phoenix directly contradicts the Auditor General’s recommendations. In its report, the Auditor General noted Phoenix’s continued troubles, but said that it would actually be worse to start again from scratch with a new pay system as any new system could face the same difficulties.
Bartlett shares these concerns.
“It’s going to be the same departments managing this system that bungled the process in the first place. So it really makes you wonder what sort of process will be put in place to make sure that they don’t repeat with the next system the same failures they did this time.”
Bartlett said that if he was a public servant, this budget would give him “no confidence” that his pay problems would be fixed in a timely manner.
Not only that, he said, but his students at the University of Ottawa are actually saying that they’re less likely to consider jobs in the public service, given the ongoing pay problems.
“You actually dissuade people from actually wanting to enter the public service because they’ll realize that my pay, and potentially servicing my mortgage and saving for my children’s education and all of these things are actually at risk by joining the federal public service.”
Answering tax questions
The federal government is also investing in front line customer service at the Canada Revenue Agency.
It’s been an ongoing problem: the Auditor General noted in November that the CRA’s call centre only picked up the phone about one-third of the time.
“Generally it’s been very difficult, especially for average taxpayers, to get ahold of a live voice at the CRA. Quite often it’s a busy signal,” said Don Carson, national leader of the transaction tax services group for MNP, a financial services company.
Although there have already been some improvements, the federal government is allocating $206 million over five years to improve its telephone service, improve its online services and increase the number of community-based programs that help low-income people prepare their tax forms.
Carson is pleased to see the investment.
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“I think that will make people happier to get a live voice because to get nothing but a busy signal can be very frustrating.”
He hopes that the call centre’s hours of operation will be expanded too to allow for more people to call with questions.
Of course, a lot of questions might be avoided if the tax system was less complicated to start with.
“For the average individual to do his or her return, it’s very, very difficult,” he said. “I wouldn’t expect my mom to do her return because it’s too complex for the average individual.”
“I think there are lots of measures that could be done to reduce the complexity of the tax system. I don’t really see anything in this budget that will reduce the complexity.”
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