Phoenix pay system an ‘incomprehensible failure,’ says auditor general


Canada’s auditor general has described the Phoenix pay system debacle as an “incomprehensible failure,” saying there is plenty of blame to go around, but laying ultimate accountability at the feet of deputy ministers and Phoenix executives at Public Services and Procurement Canada.


Auditor General Michael Ferguson said both governments — the previous Conservative one that began the project and the current Liberal one that launched the system — had opportunities to prevent what’s happened.

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Ferguson said his audit, which is one of several in his 2018 spring reports, shows how the failure happened but cannot explain why it happened.

“Why did no one realize the project would fail? Why did no one stop and fundamentally reassess the project?” he said in a statement.

“The only explanation is that there were fundamental failures of project management and project oversight.”

Phoenix is the federal government’s pay system that, developed by the previous Conservative government in a contract with IBM and launched by the Liberal government in 2016, has seen thousands of public servants paid either too much, too little or not at all.

The price tag to implement and fix Phoenix has already surpassed $1 billion.

‘Set up to avoid responsibility’

The audit found that there was no real or independent oversight of the massive project, that Phoenix executives did not understand the importance of warnings that it wasn’t ready, and that the executives’ decision to implement the system was “unreasonable.”

While Ferguson does assign blame, he said it’s a difficult question to answer, because “it’s as if the Phoenix project was set up to avoid responsibility.”

Ferguson compared Phoenix to a sports team scoring a “massive own goal” on itself. He calls it a “defining moment” and a “wake-up call.” 

He said future similar failures are likely if the government does not go beyond the audit’s recommendations.

Ferguson said the government must change an “obedient” culture that has evolved over decades where the public service tries to eliminate risks and mistakes and when it cannot do so, tries to avoid responsibility for those mistakes.

Indigenous education, jobs criticism

In the other audits, the auditor general also found:

  • A failure of the federal government to influence better conditions for Indigenous people in Canada, pointing to two audits in this spring report that are just two more in a long line that shed light on the poor outcomes of Indigenous programs.
  • Indigenous Services not adequately measuring or reporting on progress in reducing the socio-economic gaps on First Nations reserves nor using what little data it has to improve education on reserves. The government is still unable to say how federal funding for on reserve education compares with other education systems across Canada and it continues to overstate on reserve graduation rates. The overall result is that the gap continues to widen.
  • Employment and Social Development Canada cannot demonstrate that two of its programs to help Indigenous people get jobs and keep jobs is actually increasing the number of jobs Indigenous people get or that it is helping them stay employed.
  • The Canadian Armed Forces is not administering the military justice system effectively so that delays in getting to trial mean cases are being thrown out.
  • Global Affairs Canada’s consular services are too slow to sound the alarm bell back in Ottawa when a Canadian citizen is being tortured or mistreated in foreign custody. Generally, they have a hit or miss record when it comes to responding when Canadians have been arrested or detained abroad.
  • Infrastructure Canada’s slow decision-making and poor management of the replacement of Montreal’s Champlain Bridge resulted in $500 million in avoidable expenditures.
  • The government’s system of disposing of government surplus goods and equipment does not always result in maximum benefits, in that surplus assets are often sold for less than two thirds of the estimated value.