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Phoenix: Budgeted at $310.0M to Save $70.0M a Year. An Official Puts the Cost of Its Errors at $5.1B.

Phoenix was budgeted at $310.0M and was to save about $70.0M a year; a senior official put the cost of fixing its errors at about $5.1B by June 2025, and its replacement is estimated at more than $4.2B.

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See it in the full count of federal waste

Phoenix: the budget, and the bills since

  • The budget, 2009 to 2016$310.0M
  • “Invested in Phoenix”, PSPC’s count, Mar 2024$3.5B
  • Cost of fixing its errors, official’s estimate, Jun 2025$5.1B
  • The replacement, preliminary estimate (more than)$4.2B

Auditor General (via the Public Accounts committee); PSPC; The Canadian Press; Auditor General, 2026

The budget

$310.0M

For the whole initiative, 2009 to 2016, with savings to follow every year.

The cost of fixing it

$5.1B

A senior PSPC official’s figure, June 2025.

Still waiting

198.0K

Pay transactions in the queue, August 2026.

What happened

Budget to build and run the initiative, 2009 to 2016 (AG): $310.0M Spent on its pay errors, an official’s figure, Jun 2025 (CP): $5.1BAreas to scale
  1. 2009Ottawa starts replacing its old pay system. Public Accounts committee, Report 53, quoting the Auditor General (2018)
  2. Jan 2016After departments raise “significant concerns”, deputy ministers are told the problems are “resolved”. Public Accounts committee, Report 53, quoting the Auditor General (2018)
  3. Feb 2016Phoenix goes live for 34 departments and agencies. Public Accounts committee, Report 53, quoting the Auditor General (2018)
  4. Apr 2016The other 67 follow. Public Accounts committee, Report 53, quoting the Auditor General (2018)

  5. Departments and agencies moved onto Phoenix, 2016

    • First wave, 24 Feb 201634
    • Second wave, 21 Apr 201667

    Auditor General, 2018, as the Public Accounts committee quotes it

  6. May 2018The Auditor General calls it “an incomprehensible failure of project management and oversight”. Public Accounts committee, Report 53, quoting the Auditor General (2018)
  7. Mar 2024The department briefs its minister: $3.5B “invested in Phoenix” to date. PSPC briefing, 20 Mar 2024
  8. Jun 2025A senior official puts the cost of fixing its errors at about $5.1B. The Canadian Press, 23 Jun 2025
  9. Mar 2026The Auditor General: the replacement will cost more than $4.2B, with every department moved by March 31, 2031. Auditor General, Modernizing the Pay System, Mar 2026
  10. Aug 2026198,000 pay transactions still waiting, 69,000 of them over a year old. PSPC, Pay Centre dashboard

We found no government report of the saving. The bills have not stopped.

Who decided

Go-live decision · Phoenix · 2016

First wave
34
Second wave
67
Decision documented
No
Auditor General, Spring 2018, paras. 1.102 and 1.105, as the committee quotes them
  1. Phoenix executives at Public Services and Procurement Canada. in effect decided to implement Phoenix, the Auditor General found. They “knew about serious problems with it”. The decision was “not documented”, and “unreasonable according to the information available”. Public Accounts committee, Report 53, quoting the Auditor General (2018)
  2. Deputy ministers across government. were briefed on 29 January 2016, after departments had raised “significant concerns”, and were told the problems were “resolved”. Public Accounts committee, Report 53, quoting the Auditor General (2018)
  3. Public Services and Procurement Canada. chose the replacement, Dayforce, and shortened its schedule to finish by March 31, 2031 instead of 2034, the Auditor General reports. Auditor General, Modernizing the Pay System, Mar 2026
  4. The Treasury Board, as employer. agreed with the unions to credit employees with leave as “general compensation for financial and/or non-financial damages”. Treasury Board, Phoenix damages agreement

The Auditor General found the go-live decision unreasonable on what was known at the time, and undocumented.

What the money bought

Pay Centre · the queue, Aug 2026

Transactions waiting
198,000
Of them, over a year old
69,000
PSPC Pay Centre dashboard, its own definitions

The money bought a pay system that cost $309M to build, by the department’s figures as CBC reported them, and that still pays the public service. CBC News, PSPC data, Feb 2026

And a queue that has never cleared: 198,000 transactions waiting in August 2026, 69,000 of them more than a year old. PSPC, Pay Centre dashboard

The $70.0M a year in savings the budget promised: we found no report of it. The department reports money invested instead. PSPC briefing, 20 Mar 2024

In 2026, it still cannot pay everyone on time.

Their figure, and the full cost

Their counts, our count from their documents, and what comes next

  • “Invested in Phoenix”, PSPC, Mar 2024 (theirs)$3.5B
  • Cost of fixing its errors, Jun 2025 (an official’s)$5.1B
  • Documented spending, a floor (our count)$5.7B
  • Its replacement (more than), Auditor General’s figure$4.2B

PSPC; The Canadian Press; Treasury Board tables and 2018 estimate; Auditor General, 2026

Their figureThe department’s figure, to its minister in March 2024: $3.5B “invested in Phoenix” to date. It does not say what that covers, or whether the build is inside it.

The full costOur count, from their documents: at least $5.7B spent on Phoenix from 2009-10 to 2024-25. It is a floor. It adds the build, the unplanned costs of 2016-17 and 2017-18, Treasury Board’s yearly tables from 2018-19 less their regular pay lines, and the damages paid. It leaves out the replacement, which is on top of it: more than $4.2B to replace the system.

The bridge
  1. In June 2025, an associate deputy minister at Public Services and Procurement Canada said taxpayers likely spent about $5.1B to process the backlog, The Canadian Press reported. We found no federal report that gives the figure. The Canadian Press, 23 Jun 2025
  2. Why our count is higher than both of theirs. Its spending runs from 2009-10 to March 2025, and it adds about $711.0M in damages paid to June 2025. The department’s $3.5B is its figure to 20 March 2024, with no scope stated. The official’s estimate is for processing the backlog, and ours also counts the build. We could not reconcile either of their figures with Treasury Board’s yearly tables. PSPC briefing, 20 Mar 2024

Treasury Board’s yearly Phoenix tables, as the government totals them

Treasury Board of Canada Secretariat, Departmental Results Reports, 2018-19 to 2024-25

  1. Our count starts from the documents. The build, as Treasury Board counted it in 2018: $309.2M. The unplanned costs of 2016-17 and 2017-18, which the report does not split by year: $360.6M. Treasury Board, cost estimate for Phoenix, June 2018 (archived)
  2. From 2018-19, Treasury Board publishes a table of Phoenix spending each year. Added as the government totals them, the 7 tables come to $5.3B. That is theirs. Each table includes regular pay lines, $963.2M in all, which pay would cost under any system, so our count takes them out. Treasury Board, Phoenix pay system expenditures, 2024-25
  3. Last, the damages: about $711.0M paid by June 2025, the Treasury Board’s own note says. The tables leave them out. The same note says a class action could add more. Treasury Board, Question Period note on Phoenix damages, 19 Jun 2025

Left out by our choice, as pay that would cost something under any system: the regular lines in the yearly tables ($963.2M) and the planned operations of 2013-14 to 2017-18 ($380.9M). Not in the sources we read: spending on the replacement (the Auditor General reports $565.9M in funding for two years, but we found no spending to date), opportunity costs and overpayments written off. The floor’s spending stops at March 2025, so 2025-26 onward is outside it, including the transformation line in the department’s Fall 2025 progress report. We found no federal report that says what the $3.5B or the $5.1B counts.

Their best case

What the department reports

Pay accuracy, end of 2025
98.4%
Replacement, every department by
March 31, 2031
PSPC briefing, 6 May 2026; Auditor General, March 2026

Put as they would put it, in their own words.

  1. Public Services and Procurement Canada, 2026. Pay accuracy averaged 98.4% at the end of 2025, the queue is well down from its January 2018 peak, and the new system is on track. PSPC briefing, 6 May 2026
  2. The Treasury Board, as employer. Employees received leave as general compensation for damages, under agreements with their unions. Treasury Board, Phoenix damages agreement

Our read

Phoenix: the budget, and the bills since

  • The budget, 2009 to 2016$310.0M
  • “Invested in Phoenix”, PSPC’s count, Mar 2024$3.5B
  • Cost of fixing its errors, official’s estimate, Jun 2025$5.1B
  • The replacement, preliminary estimate (more than)$4.2B

Auditor General (via the Public Accounts committee); PSPC; The Canadian Press; Auditor General, 2026

By the department’s own counts, pay accuracy averaged 98.4% at the end of 2025, and the queue is well down from its January 2018 peak. That is their best case, and it is real.

But Phoenix was sold as a saving of $70.0M a year. Our read: it was launched against the warnings, by a decision nobody wrote down, and an official puts the cost of its errors at about $5.1B, with more than $4.2B to come for the replacement.

Our read, too: “invested” is the department’s word for the cost of a failure. The Auditor General’s word for it, in 2018, still stands.

Sold as a saving. Paid for as a failure, then replaced.

Still open

  • The cost to date. We found the official’s figure of June 2025 only in press reporting, and in no federal report. The department’s next briefing to committee, or its departmental results report, would settle it.
  • Damages to employees. A Treasury Board note puts the damages paid at about $711.0M by June 2025. It gives no breakdown. The claims records would settle it.
Cost of fixing Phoenix’s pay errors: $5.1B

The next read

Phoenix is one item in the full count of federal overruns, failures and improper payments.

The waste file

The receipts

  1. Public Accounts committee, Report 53, quoting the Auditor General (2018)
  2. PSPC briefing, 20 Mar 2024
  3. The Canadian Press, 23 Jun 2025
  4. Auditor General, Modernizing the Pay System, Mar 2026
  5. PSPC, Pay Centre dashboard
  6. PSPC briefing, 6 May 2026
  7. Treasury Board, Phoenix damages agreement
  8. CBC News, PSPC data, Feb 2026
  9. Treasury Board, cost estimate for Phoenix, June 2018 (archived)
  10. Treasury Board, Phoenix pay system expenditures, 2024-25
  11. Treasury Board, Question Period note on Phoenix damages, 19 Jun 2025

What changed

  • PublishedPublished: Phoenix’s budget and savings, its documented minimum cost, and its replacement.