Price tag for fixing Phoenix pay system now tops original cost

The cost to fix the troubled Phoenix pay system has risen above the original amount the federal government spent to implement it.

Repair bill has risen to about $402M — more than $309.5M payroll implementation cost in the 1st place

Steven MacKinnon, the parliamentary secretary to the Minister of Public Services and Procurement, says the government has added permanent and temporary fixes. (CBC)

The cost to fix the federal government's troubled Phoenix pay system has risen above the original amount spent to implement it.

Steve MacKinnon, parliamentary secretary to the minister of Public Services and Procurement, announced on Wednesday a $142 million investment to hire more people to help fix the ongoing Phoenix payroll issues.

"We have a capacity problem. It's very simple," said MacKinnon. "We are trying to rebuild that capacity, step by step." 

With the additional money, the cost to fix Phoenix has risen to about $402 million — more than the $309.5 million it cost to implement the system. MacKinnon, a Liberal MP for Gatineau, said that the projected savings the Conservatives put forward "is now a bad joke."

In addition to the $142 million announced Wednesday, the government spent $50 million last year to bolster its satellite offices.

The government is also foregoing for three years an annual $70 million it was supposed to save on Phoenix. 

Last month, the federal government announced a new plan to tackle the payroll mess, which included a funding reallocation strategy using money originally earmarked as part of those anticipated savings to help departmental officials get employees paid on time.

"We'll do everything that we can to ensure that this system performs up to its capabilities, and that we have enough people in place to operate the system and do so in fulfilling and getting to steady state," MacKinnon said Wednesday.

More staff in Miramichi

Since Phoenix launched in February 2016, tens of thousands of public servants across Canada have been underpaid, overpaid, or not paid at all. 

MacKinnon said the money announced Wednesday will go to increasing staff at the Miramichi pay centre in New Brunswick and extend satellite offices, including in Gatineau, Que., to the end of the fiscal year to process more cases.

The $142 million will be spent over two years to recruit, hire and train new staff and pay for new technology to make their work more efficient.

To date, the federal government has hired back 300 employees originally laid off by the previous Conservative government, and it's targeting 200 more for hire, according to MacKinnon.

"We will make every investment possible in the recruitment, onboarding, and training of public servants to help solve this problem.," he said. "But we will absolutely go to the very end of that process, and we'll then take stock of where we are."

'It's an incredible amount of money'

Unions representing public servants told CBC news they applaud the government for providing more resources, but also question why it took so long. 

"It's an incredible amount of money and it's hard for members of the general public to wrap their heads around it," said Steve Hindle, vice-president of the Professional Institute of the Public Service of Canada (PIPSC). "It just seems like it's been a lot of wasted money. We're concerned this may be more good money being thrown after bad money."

Hindle expects the government to have a hard time hiring back experts who were let go. 

Robyn Benson, national president of the Public Service Alliance of Canada, said more staffing will help, but more needs to be done.

"But as well, they need to put [some of] this $142 million into fixing the technology," said Benson. "There's issues that are arising that this government will need to address with IBM and others."

Dany Richard, president of the Association of Canadian Financial Officers, said it is "bittersweet because we've been saying for the past year we need more resources."

"So why is it taking so long?"

Richard and others are concerned about the rising price tag to fix Phoenix. 

"If I were to sell you a house and say it's $300,000 and I also mention by the way it's going to cost you $400,000 to repair it — you wouldn't buy that house," said Richard. "So it just shows what a complete fiasco this thing has been."

With files from Ashley Burke