Bill C-21 (Historical)

An Act to amend the Customs Act

This enactment amends the Customs Act to authorize the Canada Border Services Agency to collect, from prescribed persons and prescribed sources, personal information on all persons who are leaving or have left Canada. It also amends the Act to authorize an officer, as defined in that Act, to require that goods that are to be exported from Canada are to be reported despite any exemption under that Act. In addition, it amends the Act to provide officers with the power to examine any goods that are to be exported. Finally, it amends the Act to authorize the disclosure of information collected under the Customs Act to an official of the Department of Employment and Social Development for the purposes of administering or enforcing the Old Age Security Act.

[Elise Boisjoly, Assistant Deputy Minister, Integrity Services Branch, Department of Employment and Social Development]

Thank you very much, Mr. Chair.

Members of the committee, good morning. Thank you for the opportunity to appear before you this morning.

My name is Elise Boisjoly, and I am the Assistant Deputy Minister of the Integration Services Branch at Employment and Social Development Canada, or ESDC.

Today, I would like to inform you on how ESDC proposes to collect and use information as a result of Bill C-21.

First, I would like to talk about the department I represent.

ESDC's mandate is to improve the standard of living and quality of life for all Canadians. Many Canadians benefit from our old age security and employment insurance programs, which you probably are very familiar with. Let me tell you just a little bit more about these two programs.

Employment insurance, or EI, provides temporary income for people who have become unemployed as a result of specific events, for example, if you've been laid off, if you're on maternity leave, if you're taking care of a new child, These are all instances when you would get EI.

Old age security, you're probably very familiar with as well. Seniors are eligible for this. We have pensions for people over 65, a guaranteed income supplement for people who have low incomes, and also some spousal and survivor allowances for people in receipt of GIS.

It is the responsibility of the department to ensure the integrity of those programs and the stewardship of our funds, and to ensure that only eligible Canadians receive benefits to which they are entitled. It's critical for us to detect errors or abuses in those programs and to ensure that these programs will be sustainable for future generations. That's why I'm here today discussing Bill C-21, because some of those programs have residence eligibility criteria, and that's where the intersection with CBSA becomes very important.

For EI, claimants need to be in Canada because they need to be available for work. If they go outside Canada, they're not eligible for EI. There are some circumstances when you can go outside Canada, for example, to attend a funeral, or for medical reasons. There are specific reasons but they are quite limited. If you go outside Canada and you don't tell us and you continue to receive benefits, there will be overpayments, potential penalties, and we will ensure that the amount is paid back.

Pensions are payable outside Canada in two instances: if you've been in Canada for 20 years since you've been 18 years old, or if we have an agreement with another country that allows for the sharing of the pension. This would apply to most Canadians. Also, you're allowed to leave Canada, even if you don't meet those two obligations, as long as you've been out of Canada for less than six months. Again, the majority of Canadians would fall under that purview. As to the allowances I talked about, and the guaranteed income supplement, you will not be eligible if you're out of the country for more than six months. There are residence requirements related to the eligibility for those programs.

It is important to note that the information being collected through entry-exit is information that we're already asking from our beneficiaries. It's part of our act. We already have the right to request this information. Beneficiaries are asked to provide that information to Service Canada when they leave the country. It applies to all beneficiaries. We are trying to be extremely transparent and clear about those requirements. When people are entitled to those benefits, we give them that information. It's on our website. We continue communication with recipients to make sure they understand their rights and obligations.

That being said, ESDC doesn't have the means to verify the information provided to us by beneficiaries. We think most beneficiaries are legitimate. However, sometimes errors can happen, and sometimes fraud can happen. This will allow us to ensure that we can validate the information received from beneficiaries.

By amending the Customs Act to provide entry and exit information, we'll be able to use that information to verify requirements for EI and OAS.

Just so you know, we already receive EI information through customs form E311, the form people fill out when they come back into the country. Bill C-21 would expand the information to people leaving the country by air and also land travellers entering and exiting the country.

Getting this information is important for us because we have had good success identifying errors or potential abuse of the program in the past using the information we had. We were able to recover between $15 million to $20 million in overpayments with the information we had in the past, and we think that, with the information we'll get from entry-exit, we'll be able to save probably an additional $5 million in overpayments. These are conservative estimates, but again, this is about the integrity of the program and ensuring that people who are entitled are receiving the benefits.

In addition, as I've mentioned, we could only use this information for employment insurance. Now we will be able to use this information for old age security, OAS. It will allow us to use that information to look at eligibility under that program as well. Conservative estimates look at up to $47 million in overpayments that could be potentially identified. It's quite significant in terms of the potential for us to improve the integrity of our programs with that information.

There are a few things I would like to add. This bill, if approved, would not have any impact on people who are supposed to receive their benefits or are entitled to the benefit. It would have no impact on the rules of the existing program. It's already part of our legislation. It's already something that we clearly indicate and communicate to recipients. Obviously, if the bill passes, we would add information that this information is shared between our two departments, and it would be communicated to recipients.

Also, we don't anticipate that it will impact a lot of OAS recipients. As I've mentioned, a lot of the recipients of OAS fall into the category of having pensions that can be transferred even if they are not still living in Canada, and so it could represent maybe 0.01% of the 5.7 million people who are crossing the border, although, as I mentioned before, the overpayment could still be substantial, and it's important for us to ensure the integrity of our programs for future generations.

In terms of additional burden on beneficiaries, we don't expect any. We already ask for this information, and the information is already provided by Canadians, and it will ensure the highest level of integrity for our program.

One thing I want to ensure that people on the committee understand is that we will not stop any benefits just because we receive that information. Beneficiaries will always have the opportunity to come to us if some anomalies are detected, and they will be able to provide substantiating documentation. It's only as a last resort that we would come to overpayment if the beneficiary is not entitled to the claim.

Something I think that is dear to this committee is privacy of personal information, and how we protect that information. We're a steward of public funds, but at ESDC we're also stewards of private personal information, as you can imagine, and we take that very seriously. First, the department would do a privacy impact assessment. They would share the results with the Privacy Commissioner, obviously, and they would take all the recommendations seriously and look at implementation.

We will also establish an agreement between ourselves and CBSA to ensure the rules on how we share the information and the responsibilities are clearly established. That's a common practice, and that's something we already have in place for E311 information exchange. The exchange of information will be done through technology, and we'll ensure that security measures are put in place. Also, we'll only receive personal information that is directly relevant to our programs. The information is going to be matched with our system, so if there's no match, the information is purged. Only people who are authorized to access the information will have access to the information. We're not going to share the information with other departments.

In closing, our main concerns are about protecting the integrity of our program and providing great service to Canadians, and we need a robust system to ensure that we have the right information to give the right benefits to the right person at the right time.

Thank you again.

Thank you again for allowing me to appear before the committee today.

I look forward to answering your questions.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much.

We have heard today that Bill C-21 addresses an important gap as far as exports are concerned, when we're trying to deal with the export of illegal goods in particular. I want to ask about, or even confirm, really, the importance of taking a dynamic approach to this.

Recent CBSA reports indicate that intelligence-led cocaine seizures have increased 49% because of tips and other intelligence that have come in and been utilized by the agency. This intelligence has also led to a rise in large-scale heroin seizures as well. If we can take what's been applied in terms of intelligence to imports and apply it to exports, from an intelligence perspective, I think you would agree that in addition to the changes that would be brought about by Bill C-21, we would have a robust approach to dealing with these sorts of exports, these illegal materials.

[Michel Picard, Liberal, Montarville, QC]

Thank you.

The implementation of an electronic IT system that would enable better performances in terms of information exchange at entry/exit, particularly in preparation for Bill C-21, depends on a computer system.

I would like to come back to a point Mr. Swales raised earlier.

In your report published in 2015, you said that you noted a lack of resources caused by past cuts or the fact that the people who were leaving were not being replaced. Were the 2015 observations so significant that we could say that any future project, including the one concerning the implementation of an entry/exit system, would be compromised because of a considerable lack of resources? Could the type of initiative with the implemented computer system compensate for what was apparently a lack of resources?

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

You indicated in your report that the bill before us today includes two legislative limitations: the limitations on authorities, and the limitations on the security initiatives around the tracking of people. Based on your initial assessment of Bill C-21—and I know you're going to have to do an audit down the road—does the bill cover off the concerns you had in the 2016 report?

[Nicholas Swales]

It's not all packages. Let's be clear about that. We're talking about the ones that are non-reported. There is a series of exemptions under the exporting goods regulations for those kinds of packages. These are the ones where the authority, prior to Bill C-21, did not exist to open them at random.

It goes back to the point I made earlier, that the starting point for efficient border management is risk assessment. We know that in the great majority of cases people who are exporting or sending packages abroad are doing it for legitimate purposes. You don't want your border services attempting to open or look at every package. You want them to be able to identify the ones that are likely to be in non-compliance. One of the fundamental ways you do that is by doing random checks from time to time, to see what you find when you look in a series of packages. Are there new types of risks, new types of configurations? If so, you can create a system, a mechanism to look for those indicators, those tags, and pick those packages to look at.

[Michael Ferguson]

Well, I'm not sure I can talk in detail about the bill. There are risks that the bill is intended to help address. For example, on the entry-export, the government was going to spend over $100 million on that initiative, but to be able to get the full benefit of all that money, they need to have the authority to share the information on Canadian citizens. Likewise, on the exports, the issue was the need for the authority to inspect on a random basis all exports to identify whether they include things that shouldn't be there.

In a general sense, when the departments are starting to spend money on an initiative—in the case of the entry-export they had already spent about $50 million and planned to spend more—there is a risk of not getting the authority to do what you want to do and then not getting the benefit of the money you're spending. That was what we were trying to identify in that audit. We wanted everybody to understand that if the government is going to get the full benefit of the money it's spending, there is a need to make sure that the assumed authority is actually put in place. That was the general risk. The risk in terms of Bill C-21 has to do with whether it will give the government the authority it needs to get the benefits. I can't speak to that. That's something we would look at in a follow-up audit, which would tell us whether they could do what they needed to do with, for example, the entry-export initiative.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

Thank you, Mr. Chair.

Thank you, sir, and your team for being here today and giving us information on the implementation of Bill C-21.

Sir, you had noted several times in the past that in some of your reports you see the same issues repeatedly coming up over and over again in the delivery of programs from different organizations that you have done audits on. Since we know that what's predictable is preventable, what would you suggest are the top predictable risks in this bill?

[Nicholas Swales]

Certainly. There were four things we were primarily concerned about. One was that it looked as if there was a risk that the electronic system they used for targeting was about to be switched off without a plan in place to replace it. Then we observed that even when items were targeted, as I mentioned before, they weren't always examined because of a variety of reasons, one being staffing levels, so we recommended that something be done to improve that.

Then the issue that relates most directly to the subject matter of Bill C-21 was that there were certain kinds of parcels, under certain circumstances, that they couldn't open. This meant they couldn't even do the risk analysis, which would be the start of the process of figuring out what they should be looking for.

Finally, back to the staffing point we were discussing earlier, the last one had to do with the fact that in some places where exports went out, they simply didn't do any export reviews at all, because of staffing issues. You shouldn't be able to predict, as an exporter, where you are not going to have any chance of being looked at.

[The Chair, Liberal, John McKay]

Thank you.

I just caution all members that we are studying Bill C-21. If we can tie our questions to Bill C-21, all questions are relevant.

Mr. Dubé, you have seven minutes.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Chair, you said that my question was not related to Bill C-21. However, the bill refers to the exchange of information on individuals among border services. If there are corruption issues, this could eventually be connected to the bill.

I'm done.

Thank you.

[The Chair, Liberal, John McKay]

We are straying a little bit from relevance to Bill C-21, so if you could, please confine your response to how Bill C-21 may or may not respond to the concern raised by Mr. Paul-Hus.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Today, we are discussing Bill C-21.

Do you think that this bill, as it stands, will improve efficiency and allow several problems to be solved? In your opinion, are there elements in the bill that should be improved?

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

Good morning, gentlemen.

Mr. Ferguson, when I read your reports yesterday, my first reaction was to be somewhat scandalized at the waste of public funds, once again. Action plans like Beyond the Border were put in place to ensure extraordinary efficiency. Now we see that we are wasting more than $1.1 billion. According to what I understand, there is currently some waste going on.

I'd like to get to the root of the problem. We invest a billion dollars and at the end, things don't work, or not very well. Is this a structural problem having to do with the organization? Will Bill C-21 solve everything, as by magic, and make everything work well in the future?

I think that Bill C-21 is an important contribution to improving the system. However, is there something else causing the problems that we should be aware of?

[Michael Ferguson, Auditor General of Canada, Office of the Auditor General]

Thank you.

Mr. Chair, thank you for this opportunity to discuss Bill C-21, pertaining to the Customs Act. Joining me at the table are Martin Dompierre and Nicholas Swales, the principals responsible for our two recent audits that touched on the subject matter of this bill.

In 2016, we issued a report on the Beyond the Border Action Plan, and in 2015, we issued a report on controlling exports at the border.

Mr. Chair, I'll summarize for the committee our relevant audit findings related to the Customs Act. However, it's important to note that our audit work on the Beyond the Border action plan was completed in September 2016 and our audit work on controlling exports was completed in August 2015. We haven't conducted further work on these topics since then.

In December 2011, Canada and the United States released the perimeter security and economic competitiveness action plan, better known as the Beyond the Border action plan. The action plan consisted of 34 initiatives aimed at establishing a long-term partnership between the two countries to enhance security and accelerate the legitimate flow of people, goods, and services across the border.

We estimated that these initiatives had a total planned spending of over $1.1 billion, of which approximately $585 million had been spent as of March 2016. The audit examined the progress made by departments and agencies in meeting the commitments set out in the action plan and in achieving results toward the intended benefits. We also looked at how Public Safety Canada reported on progress, performance, and costs in its annual reports.

The action plan had several initiatives that focused on enhancing security. Of the $700 million that departments and agencies had planned to spend on them, approximately $410 million was spent as of March 2016. However, departments and agencies faced challenges in completing a number of the initiatives and they couldn't demonstrate that they had improved security at Canada's borders. Even when departments and agencies met their commitments for certain initiatives under the action plan, they achieved limited results toward the intended benefits. They also had few performance indicators to use to assess results.

One of the security initiatives that wasn't completed was the entry-exit initiative. The initiative, which had a budget of $121 million, is intended to allow the Canada Border Services Agency to track who enters and leaves the country. It was initially planned to be completed by June 2014. As of March 2016, $53 million had been spent, but the initiative couldn't be fully implemented under current legislation that doesn't allow the exit information of Canadian citizens to be collected, used, or disclosed.

Without new legal authority, the Canada Border Services Agency cannot achieve the initiative's security benefits. For example, the ability of the agency and law enforcement to identify and prevent high risk travellers from leaving or attempting to leave Canada is currently limited.

Let me turn now to the issues of controlling exports.

Exports are vital to Canada's economy, but some are controlled to achieve a range of policy objectives, such as protecting Canadians' safety and security. Although several federal entities play a role in controlling exports, the Canada Border Services Agency is the last line of defence to prevent goods that contravene Canada's export laws from leaving the country.

Our audit focused on whether the agency had the necessary information, practices, and controls at the border to enable it to implement its enforcement priorities, prevent the export of goods that contravened Canada's export laws, and facilitate legitimate trade.

We found weaknesses in the information, practices, and authorities the agency applied to assess export risks, assign its resources, and act on its priorities. As a result, the agency missed opportunities to stop some goods that did not comply with Canada's export control laws from leaving the country.

Limitations on its authorities posed a particular challenge for the agency in examining shipments that were not reported on export declarations. The agency could not open such parcels at random as it could for imports or exports reported on declarations. Agency officials believed this reduced their effectiveness in preventing the export of illegal drugs. The inability to open shipments at random also meant the agency could not assess the level of compliance for non-reported shipments.

The bill before you today includes provisions about the two legislative limitations we raised in our reports.

Mr. Chair, this concludes my opening remarks.

I hope our audit findings will be of assistance to the committee in its current review.

We would be pleased to answer any questions the committee may have.

Thank you.

[The Chair, Liberal, John McKay]

I will call this meeting to order. This is meeting 78 of the Standing Committee on Public Safety and National Security and we're studying Bill C-21 pursuant to the order of reference dated Wednesday, September 27.

In the first hour, we have with us the Auditor General of Canada, Mr. Michael Ferguson.

Sir, I'll ask you to make your remarks and introduce your colleagues.

The floor is yours.