Human Resources Committee on May 23rd, 2013

[The Chair, Conservative, Ed Komarnicki]

It's Mr. Parker. I'm sorry.

Go ahead, Mr. Parker.

[Ron Parker, Associate Deputy Minister, Department of Human Resources and Skills Development]

Thank you, Chair.

First I would like to say that Deputy Minister Shugart regrets he cannot be here today. He had other unmovable business to attend to.

I am pleased to appear before you in my capacity as Associate Deputy Minister of Human Resources and Skills Development.

I would like to begin by introducing my colleagues who are with me today: Karen Jackson, Senior Associate Deputy Minister of Human Resources and Skills Development, and Chief Operating Officer for Service Canada; Alain Séguin, Chief Financial Officer, and Douglas Stewart, Vice-President, Regional Operations and Assisted Housing, Canada Mortgage and Housing Corporation, who will speak to you later; Michel Tremblay, Director, Financial Planning and Budgets, Canada Mortgage and Housing Corporation.

The department I represent helps Canadians at crucial stages in their lives, whether they are still in school or raising a family, looking for a job or retiring from the workforce. The department is responsible for delivering high-quality services that are timely and accessible, through Service Canada.

Allow me to offer the committee an overview of HRSDC's portion of the 2013-14 main estimates tabled on February 25 this year.

The estimates amount to $50.5 billion. Of this, $48.1 billion, or more than 95%, will directly affect and benefit Canadians through statutory transfer payments such as old age security, the Canada Pension Plan, the universal child care benefit, the Canada student loans and grants programs, and the Canada education savings grant.

Statutory items are included in the estimates for information only because Parliament has already approved the purpose of the expenditures and the terms and conditions under which they may be made through other legislation.

You will note that the forecasted spending on the old age security program increases year after year because of our aging population and the planned increase in the amount of the average monthly benefit. It is estimated that between 2009 and 2016 there will be an increase of more than one million beneficiaries for both the Canada Pension Plan and the old age security program.

Besides statutory items, the 2013-14 main estimates include quoted appropriations, which consist of two votes: HRSDC vote 1, on the operating expenditure side, and vote 5, grants and contributions.

In relation to vote 1, operating expenditures, the department spent $769 million in 2011-12. The department planned to spend $654 million in 2012-13, a decrease of $115 million, and plans to spend $627 million in 2013-14, a further decrease of $27 million.

The total decrease of $142 million is mainly attributable to the transfer of activities to Shared Services Canada; the 2010 strategic review; savings identified as part of the budget 2012 spending review or the deficit reduction action plan; and the allocation from Treasury Board central votes in 2011-12 to cover off expenditures such as the immediate settlements for severance pay due to revisions to specified collective agreements.

As for vote 5, Grants and Contributions, the 2013-2014 main estimates level is $1,762 billion, an increase of $1 million from the 2012-2013 main estimates. This variance is mainly due to announcements in the 2012 Economic Action Plan such as the Youth Employment Strategy to assist more young people in gaining tangible skills and experience. These increases are offset by reductions attributable to the ending of programs and to the 2010 Strategic Review.

Through grants and contributions, the department grants funding to other administrations and organizations in the volunteer sector and the private sector to support projects which meet the needs of Canadians in the workforce and in social development. Please note that the funding of some of these programs is of limited duration, which can lead to variances in fiscal years in the case of a program that has not yet been extended.

For instance, the 2010 budget allocated $45 million over three years to the extension of the adaptation fund which finances the capital costs for construction and renovation work to make facilities more accessible to disabled persons. The fund expired on March 31, 2013. The 2013 Economic Action Plan proposes making the adaptation fund permanent and allocating $15 million a year to it.

The financial information included in the main estimates reflects the impact of the strategic review in 2011 and the budget 2012 reductions, which led to savings of $273.9 million and $40.5 million respectively in 2013-14. By 2014-15, the savings will reach $294 million from strategic review and $184 million from the budget 2012 spending review.

In budget 2011, the government reiterated its commitment to generate ongoing savings from operating efficiencies and productivity improvements by announcing the review of departmental spending. HRSDC did a thorough review, and the savings found in budget 2012 will ensure that we focus on core programs and services and streamline our internal operations.

At the same time, we are not reducing the quality of our services to Canadians. The implementation of the department's savings initiatives remains on track and savings targets will be met. These initiatives support the department's commitment to reduce government spending and provide greater value for taxpayers' money.

Savings initiatives from the deficit reduction action plan will result in the elimination of 1,885 full-time positions. HRSDC has a workforce management strategy in place to ensure all employees are treated according to the public service values and to help manage staffing changes over the next three years.

Since this is a more technical question, I believe it is important to point out that several changes were made to the format of the 2013-2014 main estimates in order to increase the amount of information provided and the overall usefulness of that publication. For instance, information on real expenditures in 2011-2012, and up-to-date estimates for 2012-2013 are provided to put the 2013-2014 figures in context.

In the case of Human Resources and Skills Development Canada, you will note that employment insurance benefits and Canada Pension Plan benefits are excluded from the department's main estimates. The Employment Insurance operations account and the Canada Pension Plan operations account are two specified purpose accounts. The Employment Insurance operations account is included in the consolidated data of the Government of Canada. The Canada Pension Plan is not incorporated into the government's financial statements since—

[The Chair, Conservative, Ed Komarnicki]

I wonder, Mr. Parker, if I could get you to conclude. We do want to get in a round of questioning, so could you bring it to a conclusion?

[Ron Parker]

Yes. I'm basically done, Chair. I hope this has provided a good overview of the main estimates.

Now Mr. Stewart has a few remarks.

[The Chair, Conservative, Ed Komarnicki]

Okay.

[Douglas Stewart, Vice-President, Regional Operations and Assisted Housing, Canada Mortgage and Housing Corporation]

Thank you, Mr. Chair.

I am pleased to be here today on behalf of Canada Mortgage and Housing Corporation, the CMHC.

As Canada's national housing agency, CMHC has a mandate to improve housing quality, choice and affordability for all Canadians.

In 2013-14, CMHC is estimating budget expenditures of $2.1 billion. Just over $2 billion of this amount will be used to provide assistance to Canadians in housing need, including low-income families, seniors, people with disabilities, aboriginal people, and victims of family violence. The balance will support CMHC's housing market analysis work and policy, research, and information transfer activities.

CMHC's estimated budgetary expenditures for 2013-14 represent a net decrease of $39.2 million from last year's main estimates. The difference is mainly due to savings as a result of budget 2012 reductions, reduced expenditures due to the expiry of long-term housing project operating agreements, and changes in the timing of funding requirements for new commitments of affordable housing. These reductions are partially offset by increases in operating expenses and an increase in funding for housing construction and rehabilitation on reserve.

The main estimates also reflect non-budgetary expenditures for CMHC. The number in the estimates is negative, as we will repay more than we borrow from the consolidated revenue fund in 2013-14. CMHC is estimating non-budgetary repayments of $41.9 billion this fiscal year, primarily due to changes in loan repayments under the insured mortgage purchase program.

Thank you, Mr. Chair, for the opportunity to be here.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much for concluding on time.

We'll move to Madame Boutin-Sweet.

Go ahead.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Thank you, Mr. Chair.

I thank all of you for being here with us today.

In light of everything that has been said in the media these days about the problems related to employment insurance and the Temporary Foreign Worker Program, seven minutes to put questions to you is not enough. I would like to ask you for precise, concise answers, real answers. I will be sharing my time with Ms. Charlton.

My question concerns housing. In fact, it is about the Homelessness Partnering Strategy, the HPS. We are very pleased that this program has been renewed for five years. However, its budgets were reduced and were never indexed, which is a problem.

The new Housing First program direction is another aspect which we find worrisome. The groups concerned share that concern. There are no details about it.

Will these stakeholders continue to be funded? Will everything that is related to prevention continue to be funded? We have no details on that and we would like to have more. When will these details be published? How will the groups concerned be affected? If it takes some time for these details to be published, what will happen to calls for tender in the meantime? Will agreements that exist at this time be renewed while waiting for the new guidelines to be made public?

Could you give me a brief answer, please?

[Ron Parker]

As you mentioned, the program has been renewed. But since the program was only slated to expire on March 31, 2014, we are going to be discussing the majority of the questions you have raised with the partners involved between now and then, that is, the communities, the provinces, and the people who share our objective in terms of—

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

I apologize for interrupting you, but can you tell me whether this will be done before new calls for tender are made?

[Ron Parker]

Yes, absolutely, because we cannot go forward without putting new agreements in place.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Thank you.

I now yield the floor to Ms. Charlton.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Thank you very much, Mr. Chair.

Thank you very much for being here.

On behalf of the New Democrats, I want to extend my condolences again to your minister. We certainly understand why she can't be here, and our sympathies go out to her.

I'm a little surprised that the parliamentary secretary isn't filling in for you. You're kind of in an awkward position, I think, having to answer our questions with no political person there to take some of the heat. I appreciate you doing that.

I want to ask you about the $2 million that is in the estimates for advertising the Canada job grant program, which the House leader actually acknowledged in the House is simply a concept. As he said, it's a “proposal that needs to be fleshed out and developed fully.”

I wonder if you can just confirm for me that in fact negotiations for the Canada job grant haven't even started yet with the provinces.

[Ron Parker]

The briefings of the provinces, in terms of what will transpire with the renegotiation, have started. The detailed negotiations have not yet begun.

[Chris Charlton, NDP, Hamilton Mountain, ON]

So we're spending taxpayers' dollars on advertising in the middle of NHL games for a program for which we're not even sure of the details yet, and we're trying to get Canadians excited about something that doesn't exist?

Never mind. I guess you can't really answer that.

Let me move on to a different question, on temporary foreign workers. Your department provided a memo a year ago advising the minister of serious problems with the ALMOs, and it took a year to get any kind of action from the government. I just wonder if your department has recommended that any other aspects of the program be revoked or amended.

[Ron Parker]

The department is in the process of reviewing the program. A number of announcements have been made about strengthening it in light of the possibility of revoking existing LMOs and the additional requirements around putting transition plans in place.

A broad package of changes are being brought to the program. In terms of the ALMO itself, I'm not sure it was actually highlighted as a problem a year ago. The ALMO process was in fact extended more deeply into the high-skilled part of the labour force, and additional effort went into that side. So I think there may be a difference in views, in terms of how the ALMO was working at that time.

Since then, the government has announced that it has suspended the program and it's reviewing it. We'll be looking at it very carefully.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Are you suggesting that there's been a change in how the ALMO is working, or just that the department has now caught up with how it has actually been working because of the media spotlight on the program?

[Ron Parker]

I'm not suggesting that at all. I'm suggesting that it was functioning and that there is new information we're looking at and taking into account.

We adjust as new information comes in vis-à-vis the programs quite regularly.

[Chris Charlton, NDP, Hamilton Mountain, ON]

And you're aware of the concerns that some of the staff in your department have raised about their inability to actually do the analysis appropriately because of time constraints, cutbacks to staff positions. They're saying, “Look, we're given this stuff. We're being asked to rubber stamp it. We don't have an opportunity to really do justice to the program.”

I assume you've read the same media stories I have.

Do you have a response about the difficulty that staff are having in doing their jobs appropriately?

[Ron Parker]

I've seen the media report that constitutes one ex-employee from HRSDC Service Canada.

In general, employees have sufficient time to do the analysis. There's every piece of evidence to suggest that the analysis is complete and thorough and stands whatever judicial test you wish to levy on it.

[The Chair, Conservative, Ed Komarnicki]

Thank you for that response.

We'll move to Mr. Shory.

Go ahead.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chair.

Thank you also to the witnesses for appearing today.

Mr. Parker, as you know, our Conservative government has created the Social Security Tribunal, which has effectively replaced the EI board. This new tribunal consolidates and improves on the old pension and EI boards.

Would you say that the selection process for serving on this tribunal is vigorous? Also, could you outline for the committee the specific steps that are taken to vet a candidate for this board? Could you take us through the criteria or testing process that is used to assess a candidate? Finally, could you comment on the process? Do you feel confident in the process?

[Ron Parker]

Mr. Chair, the selection criteria for these positions were published as part of the recruitment process. It was a very public process. Candidates were assessed against selection criteria to ensure they'd be able to determine appeals professionally and objectively and provide written reasons for their decisions.

Applicants meeting the essential education and experience requirements at the first level of screening were then asked to complete a written assessment, which included a knowledge test and a decision-writing test.

The knowledge test covers many of the criteria. It looks at the candidates' knowledge of the legislation related to the mandate and activities of the new tribunal: administrative law, principles of natural justice, practices followed by the administrative tribunals in Canada, the appeals process, and operation of an administrative tribunal.

In the decision-making part of the test, candidates were given a scenario in which they were asked to prepare a decision, which was to include a statement of the issue, the facts that were in the scenario, an analysis, and a conclusion. This test was scored by the Department of Justice lawyers at HRSDC.

The next step was the interviews, which assessed the other competencies we were looking for, including the ability to work effectively and independently, the ability to think conceptually, effective verbal communications, and personal suitability.

Through the screening process, we had 716 people who applied. Of those, 570 were screened in after meeting the essential criteria, and 490 were left after the knowledge test. There were 254 candidates left after the decision-making test, and 162 candidates were deemed to be eligible for the pool of candidates to be recommended by the minister for appointment. Out of 716 people, the pool was winnowed down to 162 for up to 70 positions.

I think the process was extremely rigorous and it was based on all of the criteria that were published—many levels of knowledge and ability and a capacity to work effectively.

[The Chair, Conservative, Ed Komarnicki]

I notice that members are taking the opportunity to go pretty broad and wide on these estimates, but no one's objecting.

Go ahead, Mr. Shory.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you very much for confirming my—