Ottawa expects to spend another $963 million to deal with the Phoenix pay system disaster that has plagued public service since 2016, and it still cannot determine the final price to completely dismantle the system.

The failure of the payroll system has so far cost the federal government $3.5 billion — a figure that could continue to grow as the government tries to address the enormous number of errors and problem cases.

Alex Benay, Assistant Deputy Minister of Public Services and Procurement Canada, stated that the backlog must be resolved before Ottawa can finally eliminate the error-prone payroll system for government employees.

The federal government aims to clear this backlog by March of next year. He noted that even when workers experience problems, they cannot control the number of new issues that are added to the already enormous existing pile.

Benay said on Tuesday, "We have no control over the intake, which has historically increased year after year."

He mentioned that there are still about 215,000 unresolved issues in the Phoenix payroll system.

The government hopes to address more than half of these cases by the end of the year by bringing in more staff and using artificial intelligence.

Expected costs this year include $162.7 million for developing and testing a new human resources and payroll system, as well as streamlining current HR processes.

Benay could not specify the amount the government will spend before fully resolving the situation, but he promised that the government would be transparent about any issues it encounters along the way.

He stated that one of the administration's goals this year is to determine the cost of the new payroll system should it succeed.

He added, "Once we make sufficient progress in this process over the year, we’ll have an idea of the transition costs."

The head of Canada's largest public service union noted the irony that the Phoenix payroll system was intended to save the government millions year after year.

Launched in 2016 to replace dozens of outdated pay systems, the system instead was riddled with errors and led to massive and costly disruptions throughout the public service.

Sharon De Souza, head of the Canadian Public Service Alliance, said, "They need to ensure that the next-generation payroll system does not become another rehash of Phoenix."

"We’ve lived this for the past eight years."

She added, "The government must not make the same mistake it made with Phoenix by laying off staff as soon as the new system is implemented, especially if they plan to use artificial intelligence instead."

She continued, "There must be a human element in all of this. Undoubtedly, we got into this mess with Phoenix because they laid off a bunch of compensation advisors, and the work they do is integral to ensuring that payroll is processed accurately and on time."

The government plans to provide another update on the payroll system in the fall.