Human Resources Committee on March 15th, 2010

[The Chair (Ms. Candice Hoeppner (Portage—Lisgar, CPC)), Conservative, Candice Bergen]

Hello, everyone. We're going to call this meeting to order. The orders of the day are to look at supplementary estimates (C) for 2009-10, as well as the main estimates for 2010-11.

We have with us today officials from the Department of Human Resources and Skills Development: Scott Streiner, assistant deputy minister for the labour program; Liseanne Forand, senior associate deputy minister; Karen Jackson, associate deputy minister; and Michael Saucier, acting chief financial officer.

Welcome.

We also have with us, from the Canada Mortgage and Housing Corporation, Sharon Matthews, vice-president, and Michel Tremblay, director of financial operations.

Welcome to our committee.

We are so glad you're here. I believe that three of you will be presenting: Mr. Streiner, Ms. Forand, and Ms. Matthews. You will each have five minutes to present and then we will begin our round of questions.

We will begin with Mr. Streiner, please.

[Scott Streiner, Assistant Deputy Minister, Labour Program, Department of Human Resources and Skills Development]

Thank you, Madam Chair.

My name is Scott Streiner, and I am Assistant Deputy Minister of Policy, Dispute Resolution and International Affairs with the labour program. I am pleased to be here today to speak about the labour program's mandate and activities.

Recovery from the global economic downturn is, as we all know, a central priority for the government, parliamentarians and the Canadian public. The labour program plays an important role in supporting renewed prosperity and the well-being of individual Canadians by fostering healthy, fair work environments where motivation and productivity are high, and innovation is encouraged.

Our efforts are focused on several lines of activity.

First, the labour program provides mediation and conciliation services to federally regulated employers and unions engaged in collective bargaining. These services facilitate the resolution of differences without a strike or lockout, an outcome important not only to the parties involved but also to the economy as a whole.

Of the 530 collective agreements finalized in the federal jurisdiction during the last four years, 95% were settled without a work stoppage, and this was true even during the fiscal year now coming to an end, despite the difficult economic conditions. Increasingly, the labour program is placing emphasis not only on reactive interventions to resolve conflicts, but also on preventive mediation, which is designed to improve relations and reduce the likelihood of labour disruptions before they erupt.

A second line of activity is ensuring compliance with occupational health and safety requirements. Workplaces where people are safe from injury and occupational illness are more productive and dynamic. Employers and workers agree that every Canadian should be able to return home safe and sound after a day riding the rails, climbing broadcasting towers, or serving customers at the local bank.

Third, the labour program enforces employment standards and provides workers with recourse when the "rules of the game" around pay, leave or hours of work have not been respected. It is important that these rules keep pace with changing realities, such as workers' need to balance employment, family, and civic responsibilities, and employers' need for flexibility in how they retain and deploy their workforces.

During 2009-2010, the labour program conducted stakeholder consultations to explore possible steps to modernize federal employment standards. The results of these consultations are currently being assessed.

Fourth, the labour program helps workers get compensated for wages owed when their employers go bankrupt or enter into receivership. During the 2009-10 fiscal year the labour program oversaw the expansion of the wage earner protection program to cover severance and termination pay, a measure included in the economic action plan announced in Budget 2009. Thanks to the WEPP, which is delivered on the ground by our partners in Service Canada, almost 18,000 workers passing through one of the most challenging periods of their lives have received compensation since the program was inaugurated in July 2008.

Fifth, the labour program implements employment equity programs and related initiatives, such as the racism-free workplace strategy, which foster inclusive workplaces that can take full advantage of the skills and talents of all Canadians, a goal whose importance has grown as the Canadian labour force has become increasing diverse.

Sixth, the labour program ensures a level playing field for Canadian companies and workers in a globalized economy and promotes Canadian interests and values abroad by negotiating and implementing international labour standards and agreements. In recent years labour program officials have negotiated labour cooperation agreements with all four of Canada's newest free trade partners--Peru, Colombia, Jordan, and Panama.

Finally, the labour program collects, analyzes, and disseminates information on workplace trends and industrial relation trends to Canadian employers, academics, unions, and policy-makers.

Underpinning all of this work is a commitment to excellence in service delivering, in policy development, and in management of the organization and its allocated resources. During 2009 the labour program undertook a strategic review of its activities to ensure, consistent with the government's expenditure management system, that its programs remain relevant and Canadians are getting value for money. The savings resulting from the labour program's strategic review are included in Budget 2010.

I hope, Madam Chair, that this overview of the labour program's mandate and priorities has been helpful, and I look forward to responding with my colleagues to questions from the committee.

Thank you.

[The Chair, Conservative, Candice Bergen]

Thank you very much, Mr. Streiner.

We will now hear from Ms. Forand, please.

[Liseanne Forand, Senior Associate Deputy Minister, Chief Operating Officer, Service Canada, Department of Human Resources and Skills Development]

Madam Chair, committee members, I am pleased to present the 2010-2011 main estimates for Human Resources and Skills Development Canada. As you mentioned, Madam Chair, I am accompanied by my colleague, Karen Jackson, Associate Deputy Minister of HRSDC, and Michael Saucier, Chief Financial Officer of the department.

Madam Chair, HRSD has played a key role in supporting Canadians during the global recession, with a strong focus on service delivery. Our staff has been on the front line helping Canadians cope with job losses and a challenging labour market.

A key component of Canada's economic action plan was to support Canadian workers and their families while developing a skilled workforce. The department has helped the government implement a number of key measures to help Canadians. We've provided a five-week extension to employment insurance and helped long-tenured workers gain further benefits. The work-sharing program was expanded. The provinces and territories were provided $1.5 billion to deliver training to Canadians. Youth, older workers, and aboriginal Canadians were helped with additional measures.

Service Canada did everything possible to ensure Canadians received benefits they were entitled to on a timely basis. We increased overtime, reassigned and hired staff where necessary, streamlined processing procedures, increased automation, and extended hours of service at our EI call centres. We are monitoring the levels of unemployment to ensure quality service through all of our Service Canada centres on an ongoing basis.

With Budget 2010, the department will continue to support workers and their families in implementing the second year of the government's economic action plan. This remains the priority for this year. Budget 2010 noted that $19 billion in new stimulus spending will help consolidate our gains through the economic action plan. Of that amount, $1.6 billion will be invested to strengthen benefits for the unemployed and about $1 billion will be invested to enhance training opportunities for Canadian workers.

In addition, Budget 2010 includes a series of targeted measures to be delivered by our department. For example, we will implement new initiatives worth $60 million to assist more young Canadians while the labour market improves, and we will improve access to EI special benefits for military families and families who are victims of crime.

Let me outline for you the main estimates for Human Resources and Skills Development Canada, which will be included in subsequent appropriation bills for Parliament's approval.

The main estimates for HRSDC for 2010-2011 are about $45 billion, a $2.9 billion increase from last year's main estimates. This can be attributed to a rise in operating expenditures and in grants and contributions, mainly generated from priorities in the economic action plan for year two.

Let me elaborate on some of the key spending measures. Grants and contributions, for example, will see increases totalling almost $700 million.

This includes $425 million for the economic action plan to help Canadians in developing the skills and expertise to take advantage of new opportunities once the economy recovers. This funding will go to programs for aboriginal Canadians, apprentices, older workers and students.

And over $106 million to continue the homelessness partnering strategy.

Statutory items will see an increase of $1.9 billion, including:

a $1.7 billion increase for the old age security program due to an increasingly aging population;

a $172 million investment in the Canada student loans program, mainly due to the start-up of the Canada student grant program announced in Budget 2008; and

a $50 million increase to the universal child care benefit based on population growth.

The department is also asking for additional monies under the 2009-2010 supplementary estimates to help us continue delivering programs and services that directly benefit Canadians every day.

The department is requesting a net increase of $191 million for such measures as the Canada student loans program, the universal child care benefit and the old age security program.

Before closing, I'd like to highlight another key priority for our department, namely, service delivery to Canadians. Especially in these difficult times, citizens can count on Service Canada to have access to their benefits, such as employment insurance, Canada Pension Plan, or old age security. Canadians are at the heart of the Service Canada vision. Service delivery is our raison d'être. We are committed to service excellence in our network of over 600 points of service across the country. Our mission is to provide secure, knowledgeable, one-stop personalized service to all Canadians. We are reaching out, often in remote and rural communities, to serve aboriginal Canadians, newcomers to Canada, or people with disabilities.

That, Madam Chair, is my overview of the main estimates for 2010-11 at HRSDC.

Thank you.

[The Chair, Conservative, Candice Bergen]

Thank you very much, Ms. Forand.

We will now hear from Ms. Matthews, please.

[Sharon Matthews, Vice-President, Assisted Housing Sector, Canada Mortgage and Housing Corporation]

Thank you, Madam Chair and members of the committee.

I am pleased to be here on behalf of Canada Mortgage and Housing Corporation to review our spending plans for fiscal year 2010-11. As Canada's national housing agency, a core part of CMHC's public policy mandate is to support affordable housing for low-income Canadians and in first nations communities. We do this through a number of programs funded by appropriations included in the main estimates. For low-income Canadians who need help finding housing they can afford, the government invests about $1.7 billion annually in support of almost 625,000 households living in existing social housing.

Additionally, in September 2008 the government announced funding of more than $1.9 billion over five years to improve and build new affordable housing and to help the homeless. As part of this investment, both the affordable housing initiative and the CMHC's renovation programs were renewed at current funding levels until March 2011.

As a result of this extension, these main estimates include funding for the affordable housing initiative for 2010-2011. This spending supports projects such as Building for Independence, an apartment building in Dartmouth for people with long-term mental illness. Thanks in part to this funding, these individuals are able to live on their own in affordable rental units.

Also included in the main estimates is funding for the extension of the federal renovation programs, including the RAP. With funding from this program, Potter's Hands, a project in Red Deer, purchased an old hotel and renovated it into affordable housing units. As a result, 40 people now have their own place to live.

As the committee is aware, CMHC has also been given a major role in implementing Canada's economic action plan, which includes more than $2 billion in funding over two years to build new and repair existing social housing. To ensure that the social housing funds flow quickly, the majority of this investment--more than $1.5 billion over the two-year period--is being delivered by provinces and territories through amendments to existing housing agreements. CMHC is directly delivering the remaining funding for the renovation of federally administered social housing and for the construction and repair of housing on reserve.

As reported in the fifth report to Canadians on Canada's economic action plan, more than 3,500 projects are already under way to improve social housing, including first nations housing, across the country. For example, first nations communities across Canada are able to build needed new social housing and make needed repairs to existing social housing as a result of this federal investment. The Musqueam First Nation in Vancouver was the first to receive federal funding through the economic action plan for new housing construction on reserve. As a result, a number of band members are now able to live in their own homes again.

Continuing to work with our provincial and territorial partners to deliver the social housing investments under Canada's economic action plan will clearly be a priority for CMHC in the coming fiscal year. The 2010-11 main estimates include funding for year two of the stimulus measures.

In addition to these social housing investments, CMHC is also administering up to $2 billion in low-cost loans to municipalities for housing-related infrastructure. Whether we are talking about investing in the existing social housing stock, the affordable housing initiative, CMHC's renovation programs, or Canada's economic action plan, these investments in social housing are creating jobs and helping to ensure that Canadians have access to safe, affordable, and suitable housing that meets their needs.

Thank you again for the opportunity this afternoon to meet with the committee, and I would be pleased to answer any questions.

[The Chair, Conservative, Candice Bergen]

Thank you very much.

We will begin our first round of questions, which will be seven minutes each. We will begin with Madam Folco, please.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Thank you, Madam Chair.

Thank you, ladies and gentlemen, for your presentations.

My first question—and I hope to have enough time to ask a second—is mostly for Ms. Matthews. You mentioned 3,500 projects in terms of social housing. What I am especially happy to hear is that you focused somewhat on First Nations communities across the country, in all regions of Canada.

But what I do not understand is this: you say that you have spent the money and you plan to continue, yet Budget 2010 confirmed that departmental operating budgets would not increase. They will actually be frozen until 2012-2013. I do not understand how you are going to continue spending, how you will strike a balance with planned expenditures given the freeze announced in the budget. The treasury minister has already told us that he plans to make more cuts, especially with respect to the Canada Mortgage and Housing Corporation.

Can you tell us how you are going to keep housing construction and conversion at their current level, despite the bad news in Budget 2010?

[Sharon Matthews]

So for CMHC it's a little early to say exactly what the implications would be of the operating freeze in the federal budget. I can tell you that we spend about $135 million on reserve for aboriginal Canadians. Very little of that is administrative cost; most of that goes directly to the housing. So I remain fairly confident that we will be able to continue to serve aboriginal Canadians.

The stimulus program also gave new money, $62.5 million for new construction on reserve and another $62.5 million--this is per year--for the retrofit of aboriginal housing on reserves. Again, we will work very hard to make sure that funding gets on the ground in those communities.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

There is a reason that I am asking the question, Ms. Matthews. It is really to give the department, as well as my colleagues, a bit of a warning. We can make every effort that is possible but none that are impossible. There is a discrepancy between the money you have—that amount will continue to decrease—and the work you are doing. That is an issue we would like to come back to in the future, and that is why I am asking the question today.

I have another question for Ms. Forand. It has to do with EI. There again, the premium rate will be frozen until the end of 2010, according to the budget that the government announced two weeks ago. The rate would then increase up to a maximum of 0.15% per year.

At the department, have you been able to estimate the projected deficit in the EI fund as a result of the freeze?

On one hand, what do Canadians risk losing? On the other, when do you expect the EI fund to return to the level it was at three weeks ago?

[Liseanne Forand]

Thank you very much.

Madam Chair, I will ask my colleague, Ms. Jackson, to answer.

[Karen Jackson, Associate Deputy Minister, Department of Human Resources and Skills Development]

Perhaps I can clarify what indeed Budget 2010 did say about EI premiums, the EI account. The 15¢ that you reference is actually a maximum limit that EI premiums can be increased in any one year.

The budget does provide projections around payouts of benefits from EI as well as it provides projections around premiums collected. But I would indicate to the committee that as of fall 2011 the actual responsibility for setting the EI premiums will be assumed by the Canada Employment Insurance Financing Board. That board has now been appointed. It is getting ready to assume that responsibility. So it's really up to that board within those legislated parameters of no more than 15¢ in any one year to actually set premium rates beginning this fall.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

So does this mean, Madame Jackson, given that the board is going to start to work, that you are leaving entirely to the board those decisions as to how much it will increase for any given time period, and, as a result, when that equilibrium is going to be reached? You, as a department, don't have any say in this at all?

[Karen Jackson]

The legislation does set out the parameters within which the financing board needs to operate. As I said, it cannot increase or decrease premiums any more than 15¢ in any one year. It does, however, as is set out in legislation, have to balance the account over time. It has to begin as of January 1, 2009, to balance over time.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

But the first part of my question, Madame Jackson, was the evaluation of the deficit that is caused. Does this mean it's the responsibility of the EI board, or is your department in some way involved in calculating what the deficit would be or would have been?

[Karen Jackson]

As I explained, you will find that in Budget 2010. There are a number of tables that have been provided by the Minister of Finance that will give you projections on revenues to be collected and benefits to be paid out through to 2014. Those projections on the differences do exist here in the budget.

[The Chair, Conservative, Candice Bergen]

Thank you very much.

We'll go to Monsieur Lessard, please.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Thank you, Madam Chair.

First of all, I want to thank the entire crew who came here to give us this information. The way I see it, the questions that have just been asked are essential to gaining a clear understanding of the government's role in setting the premium rate. Since the new board was created, the rate has been frozen at $1.73, and when it does change, it cannot increase or decrease by more than 15%. We know full well that it will have to increase. The advantages under this program are determined by the government. A chief actuary simply has to determine what amount is needed. These are questions we should ask the minister. It is clear that the board does not truly have a role in determining the premium rate. It is really just a stooge.

My questions have more to do with the supplementary estimates. You must have them in front of you.

Ms. Forand, on page 127, on the line that reads “(S) Old Age Security Payments”, amounts are listed, and we see that there is a credit adjustment totalling $192 million. The next line shows that guaranteed income supplement payments have dropped by $228 million.

Is the budget quietly being eliminated through attrition? What happened to cause a reduction of that size?

[Liseanne Forand]

Thank you, Madam Chair.

I just want to ask my colleague, Mr. Saucier, to give us some details on the figures. Then, I will come back to the member's question.

[Michael Saucier, Acting Chief Financial Officer, Department of Human Resources and Skills Development]

Pardon me, Mr. Lessard, I had the English version. I am looking for page....

[Yves Lessard, Bloc, Chambly—Borduas, QC]

I will repeat my question. On page 127, the line that reads “(S) Old Age Security Payments” shows an additional credit of $192 million. The next line shows that GIS payments have dropped by $228 million.

What is going on? Are fewer and fewer people expected to receive these payments? Usually, those who receive the GIS also receive OAS benefits.

[Michael Saucier]

There are two parts. The $192 million figure is based on the estimated number of beneficiaries. We expect that number to go from 4.651 million to 4.650 million. That means a slight decrease of $4.1 million, but most of the amount is due to the fact that the average monthly payment will go from $492.13 to $494.83, which represents $151 million. That is the increase.

As for the $228 million decrease, the number of beneficiaries has dropped. It went from 1.692 million to 1.630 million, representing a decrease of $297 million. However, the average monthly rate rose from $398.41 to $401.78.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

I have a hard time with that logic. You are listing off figures, but what does that mean in real terms? For example, someone who receives the GIS is already receiving OAS benefits. Usually, that would mean an increase. What is going on to cause a decrease of $228 million?

[Liseanne Forand]

Thank you, Madam Chair.

There are, in fact, more OAS beneficiaries, as the member mentioned, but fewer people receiving the GIS, because a larger number of OAS beneficiaries are still able to earn additional income through paid work. They do not qualify for that reason.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

That is clear.

Pardon me if I cut you off, but we do not have much time. I understand your answer perfectly; it makes sense.

The government estimated, just as we did, that the total amount of GIS benefits payable to those who qualify to be $3.2 billion. Just as the government did, we knew that, in Canada, 123,000 people who qualified for the GIS did not receive it because they did not know about it. In Quebec, that number was 42,000 people.

ls there a way to know how many of those people are still alive today?