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Auditor-General Michael Ferguson holds a news conference following the tabling of the AG Report in the House of Commons, in Ottawa, on May 29, 2018.

Sean Kilpatrick/The Canadian Press

The Auditor-General of Canada says the Phoenix public service pay system was an “incomprehensible failure” caused by public servants afraid to tell their political masters when they see a problem.

In a report tabled in the House of Commons Tuesday, Michael Ferguson said the implementation of the Phoenix pay system is a “defining moment” and “a wake-up call” for the federal government’s “pervasive cultural problems.” The Phoenix fiasco has failed to properly pay tens of thousands of public servants on time since its launch in 2016, costing Canadian taxpayers more than $1-billion to date.

“There’s something in the culture that makes people believe that they can’t bring forward those problems. ... It was very evident that this system was not going to work,” Mr. Ferguson said.

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“In order to prevent an incomprehensible failure like Phoenix from happening in the future, the government has to understand which parts of its culture are causing that type of action.”

The Auditor-General said the federal government’s creation of an obedient public service fearful of making mistakes, taking risks and conveying “hard truths” has caused failures, such as the Phoenix debacle. He said a lack of oversight and management meant the Phoenix pay system was not ready when it was launched.

Mr. Ferguson said Public Services and Procurement Canada (PSPC) – the department responsible for the pay system – did not fully test Phoenix before launching it and cancelled a pilot implementation project with one department that would have helped it detect problems indicating the system was not ready.

The launch of the Phoenix pay system and data collection by Indigenous Services Canada are being criticized in the auditor general’s latest report. Michael Ferguson urged Ottawa to reflect on what he called “incomprehensible failures.” The Canadian Press

The report also found that three Phoenix “executives” – senior public servants at the department – prioritized some aspects of the pay system rollout, such as schedule and budget, over functionality and security. For instance, the Phoenix executives removed or delayed more than 100 important pay-processing functions, such as the ability to process retroactive pay. Rather, they planned to add these functions only after all 101 government departments and agencies had transferred their pay systems to Phoenix.

The report found that Phoenix officials did not tell the deputy minister that departments, agencies and the new centralized pay centre in Miramichi, N.B., weren’t ready for Phoenix’s implementation.

Mr. Ferguson said the three Phoenix executives are to blame for the failures. Public Services Minister Carla Qualtrough said that “measures” have been taken against the executives and that they are no longer working in government pay administration.

Mr. Ferguson said the previous Conservative government and current Liberal government had opportunities to prevent the Phoenix problems, noting that it’s now the responsibility of the Trudeau government to fix the problem.

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Treasury Board President Scott Brison said the Phoenix pay problems are a “top priority” for the Liberals, but still blamed the former Conservative government for creating the problem. He said Ottawa is also working to change the public service culture – the “plumbing of government” – after 10 years under the former Harper government.

“It’s often referred to as the plumbing of government and nobody really pays attention to plumbing until there’s a big mess,” Mr. Brison said.

Conservative public services critic Tony Clement, who was Treasury Board president under the Harper government, said the Tories bear “none” of the responsibility for the Phoenix disaster. He said the Conservatives held off on proceeding with implementation when they heard concerns from bureaucrats.

“I know people like to spread the blame, but I think we did the right thing as political overseers when we heard the tales of concern,” Mr. Clement said.

NDP MP David Christopherson said it is “mind boggling” how Canada – a G7 country – would get a rating from its own auditor-general describing a government program as an “incomprehensible failure.”

The Public Service Alliance of Canada, the country’s largest civil service union, said it will write to Prime Minister Justin Trudeau to formally request a public inquiry into the Phoenix scandal.

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“Federal public service workers are the ones dealing with the consequences of their government’s negligence and they deserve to be paid damages for the hardships they have endured,” said PSAC National President Chris Aylward.

- With a file from Sean Silcoff

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