February marks the 10th anniversary of the launch of the bug-ridden Phoenix payments system within the federal government, and the latest numbers help tell the story.
After its rollout in 2016, Phoenix was called an “incomprehensible failure” by Canada’s Auditor General for overpaying or underpaying thousands of public servants – consequences that are still being felt.
Public Services and Procurement Canada (PSPC) has shared its latest data, and here’s what Phoenix’s past decade looks like in numbers.
The impact
The government estimates that since Phoenix’s launch, approx 483,130 employees received an overpayment – a total of approx $3.57 billion. (PSPC says this number also includes “administrative overpayments” made between 2017 and 2020 that were intentionally generated to handle temporary assignment fees.)
From December 2025 approximately 370,252 employees had refunded their overpayments, and the government says they have recovered $3.09 billion.
That remains approximately 112,878 employees with outstanding overpayments of approx $487 millionsays PSPC.
The Public Service Pay Center in Miramichi, NB, seen here in July 2016. The ever-growing backlog of problems caused by the federal government’s troubled Phoenix pay system may have stopped, according to figures released Friday. (Ron Ward/The Canadian Press)
As for underpayments, the government says it cannot track that total because “this information is not recorded or maintained in Phoenix in the same manner as overpayments.”
“There is no equivalent code or process for underpayments,” PSPC wrote, adding that there may be too many variables involved in the underpayments.
The costs
In total, Phoenix is estimated to have internal costs of approx $4.8 billionsaid PSPC.
That includes the initial development costs of $309 million. The government then invested between 2016 and March 2025 $3.51 billion to run, improve and stabilize the system, and clear the backlog of wage problems.
For the last financial year and the upcoming financial year 2026-2027, the government has approx $980.7 million toward running Phoenix and eliminating the backlog that still exists today 233,000 cases since last month.
The contracts
Government data shows that these companies have benefited most from Phoenix contracts over the past five fiscal years: IBM Canada Ltd., Systematix IT Solutions Inc., McKinsey & Company Canada PricecwaterhouseCoopers LLP and Oracle Canada ULC.
IBM, charged with designing and implementing Phoenix, has received more than $851 million in the past decade.
The other four companies were awarded various consulting and software management contracts for issues such as streamlining processes at the payment center, IT services and telecommunications. Their total contracts for the past five years range from $11 million to $45.9 million.
Contracts with other companies cost taxpayers approx $64.7 million over the same period.
PSPC says a breakdown of totals paid to contractors for the 2020-2021 fiscal year is not available, citing limitations in its financial systems and internal reorganizations. It also states that these totals do not include taxes.
The workforce
The equivalent of 1,769 full-time employees are currently trying to reduce the backlog in the Phoenix system through the payroll center in Miramichi, NB
That is triple the number of the staff who were first tasked with resolving Phoenix transactions in the early days.
While the government says it has tracked the total number of officials who worked on the Phoenix project – from design to development to management – it says those figures are “not yet available.”
It says this is because HR has undergone ‘significant’ organizational changes over the years and employees have been moved from one department to another.
Work is currently underway to obtain data on how many staff have supported this project over the years.
Meanwhile, Dayforce, the software that will replace Phoenix, will be fully operational in 2030.
A $350.6 million contract The agreement with Dayforce covers work from June 2019 to June 2026. The agreement can be extended until 2049.
There was approx 131 full-time equivalents I’ve been working on this project since last year, peaking at 192 employees in 2022-23.
The backlog
There were from January 233,000 cases in the system waiting for processing. Of them, 37 percent was considered within service standards, while 45 percent – or 105,000 cases – were under treatment for over a year.
Last month the payment center received approx 109,000 new transactions and processed 110,000 cases.
PSPC says it will process in total 122,500 backlog and priority cases between April 2025 and June this year in preparation for the Dayforce pilot.
This fall, this new payroll software is expected to be tested at three organizations: the Canadian Nuclear Safety Commission, Shared Services Canada and Public Services and Procurement Canada.
Before transferring files to Dayforce, these settings must ensure that they do not contain payroll errors. The payment arrears must also be zero.
