A woman in Newfoundland lost her home after the Canadian government stopped paying her while she was contracted with the government.

Joan Nimek Osmond’s ordeal is the latest case in a disaster that struck the automated payroll system, causing 200,000 government employees in the country to receive overpaid or underpaid salaries – or not get paid at all.

The system, known as Phoenix, was developed by IBM. Since the initial contract signing worth CAD 5.8 million (USD 4.5 million) in 2011, the contract was amended 50 times and the cost rose to CAD 650 million.

When the government launched the Phoenix system in 2016, Nimek Osmond’s paychecks started varying significantly. She said, “With every check, I was missing some amounts – and no one could explain what was happening.”

After being promoted in 2017, the problem worsened: suddenly her salary became zero dollars. And although she stopped working for the government in April 2018, she continued to receive tax documents claiming she worked in 2020 and 2021.

“I have no idea how much is owed to me,” Nimek Osmond said. “I lost my savings and the house.” “I just want someone to fix this glitch.”

The system issues caused several federal employees to lose their homes, retirement savings, and other assets. In some cases, Phoenix corrected overpayments by recovering some employees’ pay. An Alberta employee said, “To some extent, I am working as a volunteer until my debt created by the Phoenix payroll system is repaid.”

The payroll problems caused great hardships for Nimek Osmond and her two daughters, who used to own a home with a backyard pool and now live in supported housing with a back door opening onto a four-lane highway.

Nimek Osmond said her youngest child, age 11, suffered mental health problems as a result of these disruptions.

The disaster has cost the government more than CAD 2.4 billion so far, and it may cost more as problems continue and employees file new compensation claims.

The Canadian Treasury Board Secretariat said it has resolved nearly 27,955 compensation claims received so far. However, many damage compensation claims remain unresolved.

The government is currently testing a new payroll program and hopes it will operate more smoothly. When asked if she thought this program would be better, Nimek Osmond laughed and said, “Good luck with that.”

Edited by: Dima Abu Khair