A Liberal star candidate and the Phoenix pay system ‘nightmare’

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OTTAWA — The Liberals are excited about a high-profile candidate in the Montreal riding of LaSalle—Émard—Verdun but Claude Guay’s candidacy is raising eyebrows among public servants for his role in the government’s scandal-plagued Phoenix payroll system.

Guay, a former IBM Canada president, was approached by former Liberal cabinet ministers Scott Brison and David Lametti to run in the Montreal fortress the party lost in a September byelection.

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The party touted him as a member of a “strong economic team” composed of Liberal Leader Mark Carney, former Quebec Finance Minister Carlos Leitao, and Canadian Finance Minister François-Philippe Champagne.

Sources described Guay as “a potential minister” because of his strong business credentials.

However, the president of the largest public servant union said his candidacy “raises eyebrows about the Liberals’ commitment to fixing the broken pay system.”

“For nearly a decade, Phoenix has been a nightmare for federal workers, and the government’s flawed contract with IBM was a big part of the problem,” Public Service Alliance of Canada national president Sharon DeSousa said in a statement to National Post.

In 2017, Guay acknowledged in an interview that his company had made mistakes in the Phoenix rollout.

“As with all projects, there are always things we could do better,” he told the Journal de Montréal at the time when he was still general manager of global business services at IBM Canada.

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“There have been successes within the program,” he added without saying what they were.

Wednesday, he wrote in a statement that he had “already repeatedly highlighted the shortcomings of the Phoenix system.”

“I am running in the riding of LaSalle-Émard-Verdun for the Liberal Party of Canada because I would be honoured to represent my fellow citizens in the House of Commons,” he said.

Sources within the federal government said it was “unbelievable” that the Liberals would think running him as a candidate would be a good idea. Not because of Guay personally, but because of the message it sends to federal employees and Canadians.

“Honestly, we have people in the public service who get chills when they hear the name IBM,” said one source.

In the last decade, IBM got billions of dollars’ worth of contracts with the federal government, according to open data. For Phoenix alone, IBM received at least $784 million, according to the Investigative Journalism Initiative. The initial contract was worth $6 million in 2011.

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It all started in 2009 when the Harper government completely changed how it processed pay for its 290,000 federal employees.

At the time, the government wanted to centralize pay services for 46 departments and agencies that employed 70 per cent of all federal employees. But it also wanted to replace the 40-year-old pay system used by 101 departments and agencies.

The flawed system was implemented in 2016, a few months after the Liberals came to power.

Quickly, and to this day, thousands upon thousands of civil servants have not been properly paid.

The Auditor General concluded in a scathing report in 2018 that the system was mismanaged from the very beginning and is just one of the “incomprehensible failures” of the government.

The system has since cost more than $4 billion and the federal government is working to replace it. Nine years after it was launched, only 26 per cent of pay cases are processed on time, according to PSAC who relied on government service standards.

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In a Senate report that highlighted the Phoenix debacle, IBM officials said that “in their opinion, they delivered a software application that works.”

“They believe that replacing the software will not resolve the government’s pay problems. On the other hand, employees at the pay centre said the current system produces too many unexplained errors and requires too much manual intervention,” reads the report.

Over the past decade, the Liberals have still not solved all the problems. Public sector unions say they simply want an efficient system and a government that will take the problem seriously.

“We expect a strong mandate from the next government to resolve the Phoenix disaster once and for all and make sure that every worker is paid correctly and on time. No more excuses,” said DeSousa.

National Post
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