Canadian woman loses her home amid government payroll debacle

A woman in Newfoundland has lost her house after the government of Canada stopped paying her while she was on contract with its own revenue agency.

Joanne Nemec Osmond’s ordeal is the latest case in a debacle surrounding an automated payroll system which has led to 200,000 government workers in the country being overpaid, underpaid – or not paid at all.

The system, known as Phoenix, was developed by IBM. The Globe and Mail reported earlier this year that since the initial C$5.8m (US$4.5m) contract was signed in 2011, it has been amended 50 times and the cost has ballooned to C$650m as “stabilisation” efforts continue.

When the government launched Phoenix in 2016, Nemec Osmond’s paycheques began to vary dramatically. “Every cheque, I was missing amounts – and no one could explain it,” she said.

After she was promoted in 2017, the problem got worse: suddenly her pay stubs read $0. And although she stopped working for the government in April 2018, she continues to receive tax documents claiming she worked in 2020 and 2021.

“I have no idea how much I’m owed. My credit’s gone, the house is gone,” Nemec Osmond said. “I just want someone to fix this.”

Problems with the system have led a number of federal employees to lose their homes, retirement savings and other assets. In some cases, Phoenix overcorrected overpayments by clawing back some employees’ entire paycheques.

“In a sense, I am volunteer until my debt is paid off that was created by the Phoenix pay system,” one Alberta employee told CBC last month.

The pay problems have created major hardship for Nemec Osmond and her two daughters, who used to have a house with a pool in the backyard and now live in subsidized housing with a back door that opens on to a four-lane highway.

And her youngest child, who is 11, has suffered mental health problems as a consequence of the upheaval, said Nemec Osmond.

“I can’t even drive by the house – it hurts,” she said.

The debacle has cost the government more than C$2.4bn so far, and may cost even more as problems persist and employees file new compensation claims.

The Treasury Board of Canada Secretariat said it had resolved nearly all of the 27,955 compensation claims it had so far received. However, many claims for severe damages remain unresolved.

The government is presently testing a new payroll programme that it hopes will run much more smoothly.

When asked if she thought that programme would be better, Nemec Osmond laughed.

“Good luck with that,” she said.