Budget 2018: Progress on Phoenix, pay equity and tax fairness

Feb 28, 2018

In the 2018 federal budget, the government has announced some positive movement on a few of ACFO’s priorities including Phoenix and pay equity. ACFO is pleased to see the government taking steps forward on these issues.

Phoenix

In Budget 2018 the government has officially announced its intention to move away from Phoenix payroll system and toward a pay system that is better equipped to handle the complexities of the federal government pay structure.

While there is no timeline laid out, the budget does propose an additional investment of $16 million over two years, beginning in 2018-2019, to “work with experts, federal public sector unions and technology providers on a way forward for a new pay system.”

This announcement is welcome news for the long term. However, we must take note of the government’s plan to consult with “experts” and “technology providers.” ACFO hopes that the government will heed the lessons of the Phoenix debacle and draw primarily on the resources of the public service for the planning, development and implementation of the new payroll system.

While planning for the next pay system, Budget 2018 also includes some measures to address current and ongoing issues with the Phoenix pay system. The government is proposing an investment of $431.4 million over six years, starting in 2017–18, to hire more staff to work both at the pay centre and within departments. ACFO has been among those calling for more resources to help resolve outstanding issues and alleviate impacts on workload; we hope the government will continue to consult with public service unions as these resources are put into place.

Furthermore, Budget 2018 references ongoing negotiations with public service unions to address the personal and financial impacts Phoenix has had on public service employees. ACFO is playing a leading role in these discussions and we expect to reach an agreement to provide full and comprehensive reimbursement for all damages and interest loss suffered as a result of Phoenix.

Pay equity

ACFO is the only federal public service union with an outstanding pay equity complaint filed on behalf of its membership. We have long advocated for the timely implementation of proactive pay equity legislation. Our members receive less pay than employees in male dominated occupations. Our members have waited long enough for pay equity.

In 2016, ACFO submitted recommendations to and appeared before the Special Committee on Pay Equity. And while we largely supported the committee’s conclusions, we were among many who were concerned about an unnecessary delay in tabling pay equity legislation until 2018.

In Budget 2018 the government has finally announced proactive pay equity legislation, which it says will be included in the budget implementation legislation.

While new legislation is most certainly a welcome development, this government’s resolve to actually address pay inequality would be best demonstrated through an immediate commitment to work with ACFO to resolve our filed complaint in a collaborative manner before the end of 2018.

Tax fairness

Tax avoidance and evasion unfairly deplete public assets and place an unfair tax burden on middle class workers like our members. Every Canadian and Corporation doing business in Canada needs to fairly contribute to our common good.

Budget 2018 also included movement on combatting tax exploitation. ACFO was pleased to see tax reform measures we have championed — including changes to country-by-country reporting and fighting transfer mispricing — appear in the section of the budget on tax fairness.

Budget 2018 also includes what we hope is the first step toward requiring the disclosure of beneficial ownership. The government is proposing to address beneficial ownership by introducing “enhanced income tax reporting requirements for certain trusts.” ACFO hopes the government will take the opportunity to build on this measure and expand the beneficial ownership requirement to apply to all companies incorporated on the federal or provincial level.

ACFO is heartened by the government’s progress toward tax fairness and we encourage the government to make comprehensive, firm commitments going forward.