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The Public Service Pay Centre in Miramichi, N.B. Nearly one-third of the public service have experience payroll issues since the federal government launched its new Phoenix pay system.

Ron Ward/THE CANADIAN PRESS

Maybe you don't think it's a big deal that tens of thousands of federal government workers are going unpaid because of the botched roll out of a new pay system.

Most civil servants are overpaid and underworked anyway, right?

Many Canadians may feel similarly untroubled that government data centres are frequently crashing, downing websites and leaving key agencies, such as Statistics Canada, unable to get timely economic information to financial markets.

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But it does matter. Canada isn't some tin-pot country that can't pay its workers, run a computer or produce timely data. It's a G7 country, a modern, advanced economy that should be a model of good governance.

There is a disturbing back story to these embarrassing headlines.

Turn back the clock to 2010. Stephen Harper's Conservative government was eager to demonstrate it could wring billions of dollars in savings out of a fat government bureaucracy it neither liked nor trusted.

Two of the signature initiatives that emerged from this effort was the centralized Phoenix pay system and the birth of Shared Services Canada, a $1.9-billion super agency that would consolidate all of the government technology systems.

And for years afterward it would point to these efforts to bolster its reputation as a sound manager of the machinery of government.

Both have been unmitigated disasters.

The fallout from these moves continues to reverberate through the government. Not only have the promised savings never materialized, but Ottawa is now spending tens of millions more to fix the problems.

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On Friday, Statscan's chief statistician, Wayne Smith, abruptly resigned, complaining that the agency's independence has been compromised by "disruptive, ineffective, slow and unaffordable" technology supplied by Shared Services Canada.

Mr. Smith's frustrations boiled over July 8 when the agency's main website was down for nearly eight hours due to a power switch failure, snarling the release of June's jobs numbers, one of the country's most important economic indicators. Statscan staff resorted to snapping the document on a smartphone and faxing pages to data users at financial institutions and media outlets.

Statscan's website routinely goes down on busy data-release days.

The problems at Shared Services, which consolidated the information technology of 43 departments, go way beyond Statscan. The federal Auditor-General concluded in a report this year that Shared Services' operations are so dogged by hidden costs, delays, security problems and poor accounting that potential savings remain "largely unknown."

The Liberals quietly boosted Shared Services' budget by $384-million over two years in its March budget, in part to keep creaky old computer systems from crashing. Critics worry that much more will be needed to fully modernize systems.

In late July, smoke inside a federal data centre in Ottawa forced the temporary shutdown of government e-mail and some websites.

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Meanwhile, Ottawa says the estimated bill to fix IBM's Phoenix pay system has reached $45-million to $50-million, and could climb higher. The government has promised to cover any out-of-pocket expenses of workers who couldn't pay bills or were forced to borrow money when they weren't paid.

Just like Shared Services, Phoenix was supposed to save the government money – $70-million a year – by consolidating a myriad of pay systems spanning 300,000 workers in more than 100 departments. Most of the first-year savings have now been wiped out.

A big part of the problem can be traced to a decision by the Conservatives to create a new payroll-processing centre in Miramichi, N.B. Roughly 500 – mostly inexperienced – new hires, would replace more than 2,000 payroll staff from across the country.

Ottawa has since been forced to add pay specialists in Gatineau, Que., and at temporary offices in Winnipeg, Montreal, Toronto and Sherbrooke, Que. – all to help fix the problem of workers getting paid too much, not enough or not at all.

Efficiency was never the main reason for choosing Miramichi. Putting the payroll centre in the city was political compensation for the closing of the long-gun registry, which had been located there.

The Conservatives fed the country a narrative about making government leaner and more efficient.

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They delivered something quite different.

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