For almost ten years, the Phoenix pay system has created a long list of complaints about pay mistakes, with many cases taking months to fix. The Canadian Press
The federal government has begun sending warning letters to former public servants about unpaid salary overpayments linked to the long-troubled Phoenix pay system. The letters state that unresolved debts may soon go to collection agencies or the Canada Revenue Agency for recovery.
Unions say many former workers never knew they owed money. They now argue that the sudden notices create financial stress and confusion for people who left government years ago.
Unions Push Back on Sudden Debt Notices
Public Service Alliance of Canada president Sharon DeSousa raised concerns in letters to Treasury Board President Shafqat Ali and Finance Minister François-Philippe Champagne. She said the debts often involve payments made more than six years ago, outside the legal window set in the Crown Liability and Proceedings Act.
“Many of these individuals left the public service years ago and were never notified that an overpayment existed, which makes these sudden notices and financial impacts all the more shocking,” Ms. DeSousa wrote. She said the CRA treats these years-old debts as active tax obligations once departments forward them.
The union shared several notices sent to members in recent weeks. One letter warned that missing a deadline would lead to the account going to a collection agency or the CRA set-off program. Ms. DeSousa asked the finance minister to restrict recovery efforts to cases that fall inside the legal six-year limit.
Government Reviews Union Concerns
Treasury Board spokesperson Matthieu Perrotin said the government has begun reviewing the issue. “We are reviewing the concerns the union has raised regarding the recovery of certain overpayments, and we take this feedback seriously,” he said. He added that officials aim to work with unions to find a fair approach.
Phoenix Problems Stretch Back a Decade
The Phoenix pay system began in 2009 as an attempt to centralize pay operations and cut costs. The system launched in 2016 and quickly generated thousands of pay errors, including missed paycheques, underpayments, and overpayments. While the backlog has declined over time, it still affects workers.
The government announced earlier this year that it selected Dayforce to replace Phoenix. Public Services and Procurement Canada oversees the pay centre, while individual departments handle their own decisions about sending debts to collections.
PSPC spokesperson Michèle LaRose said the pay centre itself does not send overpayment cases to collection agencies. She said departments may choose to do so but PSPC does not track how often it happens.
Former Workers Say Notices Contain Errors
Sean O’Reilly, president of the Professional Institute of the Public Service of Canada, said many letters include unclear or incorrect details. He said the problems make it hard for people to know if they truly owe money.
“The issue we’ve been dealing with is the fact that these letters are riddled with errors. They don’t make any sense,” he said. He added that he encourages repayment when the information is accurate but noted that workers often struggle to get clear answers from the pay centre.
He said the use of collection agencies feels excessive. “We feel that going to a collection agency is a last resort, and I think there’s better ways to get that done. It seems very heavy-handed,” he said.
