OTTAWA - The federal government says it's going to cost at least $40 million to $50 million this year to straighten out its troubled new pay system.

However, officials say they are starting to see progress in their efforts to resolve the problems, and hope to be done by Oct. 31.

Marie Lemay, deputy minister of Public Services and Procurement Canada, says there are about 67,500 cases of federal workers with outstanding pay issues, down from more than 80,000 in mid-July.

The Phoenix pay system was supposed to centralize the handling of the huge federal payroll, but its rollout led to employees being underpaid, overpaid or not paid at all.

Lemay says there were always glitches in the system because of the size of the payroll, the number of people moving in and out of the public service and the complexity of the pay scales.

In the past, though, the magnitude of the problem was hidden by the decentralized system.