Introduction

After investing nearly $300 million over five years, Canada is still facing significant delays in the implementation of its new cloud-based payroll and human resource platform, specifically designed to eradicate the issues plaguing the troubled Phoenix payroll system. Despite the ambitious plans, the country is now signaling that taxpayers may need to shell out even more cash before the system is fully operational.

Current Status and Challenges

With the daunting task of transferring more than 360,000 federal employees to the new Dayforce platform, the government is looking to hire additional contractors. Moreover, they are revisiting union agreements to align pay structures more effectively. Adding to the complexity is the consideration of a new data hub to clean and standardize employment data across various departments prior to migration to Dayforce.

Alex Benay, associate deputy minister at Public Service and Procurement Canada (PSPC), has openly stated that the government could face "hundreds of millions" in additional costs before the new system is even functional. The PSPC is expected to present a detailed implementation strategy and an estimated final cost by 2026.

Why Did Canada Pick a Third-Place Bidder?

In a surprising twist, Dayforce was selected over more established competitors such as SAP and Workday. While Dayforce placed last in the initial bidding process, Benay claims the decision stemmed from Dayforce's flexibility in meeting complex accessibility and official languages requirements.

To address challenges around accessibility, Canada aims to boost the participation of employees with disabilities to 5,000 by 2025. Currently, individuals with disabilities make up just over six percent of the federal workforce, below the national average.

SAP, the leading bidder during the procurement process, withdrew amid evolving demands for accessibility that were not originally included in the request for proposals (RFP). Following SAP's departure, Workday also declined to accept the new terms. Thus, the contract was awarded to Dayforce, which has since dedicated a team of 250 employees to this project, working alongside 126 federal workers.

Bridging Gaps Before the Go-Live Date!

The NextGen-HR and Pay Final Findings Report, released earlier this year, highlighted critical gaps within Dayforce's software solution. The system reportedly meets only 85 percent of the government's 582 requirements, leaving unresolved issues primarily related to unique government pay structures and complexities within various job roles.

To patch these gaps, PSPC will need to engage with nearly 150 labor unions to simplify payroll processes. Although some adjustments could be minor, others will need a more comprehensive renegotiation of labor deals. Jennifer Carr, president of the Professional Institute of Public Service of Canada (PIPSC), stressed the importance of protecting workers' rights amidst these changes.

A Cautious Future: Ensuring the System Works!

With the ambitious goal of rolling out Dayforce in 2027—one department at a time—the government is keen on thorough testing. This includes running a parallel pay system with Phoenix for at least six months to ensure a seamless transition without glitches.

Canadian Association of Professional Employees (CAPE) president Nathan Prier insists that rebuilding trust with taxpayers after the $3.5 billion Phoenix fiasco is essential, emphasizing the need for scrutiny in every step of this ambitious rollout.

In a quest to finally solve its payroll conundrum, Canada finds itself in a perfect storm of budgetary constraints, regulatory challenges, and the relentless push for inclusivity in the public service sector. Will they succeed in pulling the nation out of this payroll mess, or is another costly disaster on the horizon? Stay tuned!