Mr. Chair, members of the committee, good morning.
My colleague Robert Frelich and I are pleased to appear before the Standing Committee on Access to Information, Privacy and Ethics.
We are pleased to provide you with information that will assist you in your study on the growing problem of identity theft and its economic impact upon citizens and businesses, and the steps that businesses and law enforcement agencies are taking to protect Canadians from identity theft.
One of my duties as Assistant Deputy Minister of Integrity Services at Service Canada is to implement processes and administrative measures linked to the issuance of social insurance numbers.
As you may know, Service Canada is the service delivery arm within Employment and Social Development Canada. The department delivers over $100 billion in programs and services every year related to different programs, such as employment insurance, Canada student loans, Canada pension plan, and old age security. And the social insurance number is used by all of these programs.
But the use of the social insurance number is not limited to Employment and Social Development Canada. Many other federal departments and agencies, such as Canada Revenue Agency, RCMP, Canada Border Services Agency, and Department of Justice, use the SIN and the social insurance register, or the SIR, on a daily basis.
As the SIN is an important element to ensure that the right benefit is provided to the right person at the right time, it plays a central role in identity management.
Today I will explain how our practices in the issuance of the social insurance numbers and the administration of the social insurance register improved over the years to increase the integrity of the social insurance number program and to reduce the impact and the incidence of identity fraud.
The evolution of the SIN program can be broken down into four periods with respect to integrity measures put in place to protect the SIN.
The first period is what I call the early years, from 1964 to 1976. The SIN program began in 1964 as a register for two federal government programs: unemployment insurance, now employment insurance, and the Canada Pension Plan.
Shortly afterwards, its use was extended to the Canada Revenue Agency for tax reporting purposes. Since then, the SIN program has grown to become a unique identifier for more than 50 federal programs or services and is a staple in the lives of Canadians.
At that time, there was little integrity in the issuance of social insurance numbers. For example, employers were allowed to ask for SINs to be issued to employees, clients were not required to present identification, and if someone had lost their SIN, another number was issued and assigned to them.
The second period is from 1976 to 1996. I will qualify that period as a time of increased integrity of the paper-based processing of SIN issuance.
Starting in July 1976, the SIN program began requiring clients to provide identification documents to prove their identity, and applications for a SIN had to be made by the client. Employers could no longer request a SIN to be issued for their employees.
At the beginning, a large number of identity documents were accepted for SIN issuance, including secondary identity documents, such as a driver's licence. However, at the end of this period, almost all secondary documents were no longer accepted for SIN issuance, and SIN agents were using primary documents such as birth certificates and documents issued by Citizenship and Immigration Canada.
In the period spanning from 1996 to 2006, we began transitioning from a largely manual and paper-based approach to integrity towards system changes that would begin to automate integrity measures.
In November 1996, the first of such changes was implemented. An electronic link with Citizenship and Immigration's database was established, allowing for the verification of identity and status of permanent and temporary residents who arrived in Canada after 1972.
In 1998, the Office of the Auditor General began looking closely at the SIN program. I would like to take a few moments to share with you the various conclusions the office reached, because that period was a seminal moment in the administration of the SIN and the SIR.
In its 1998 and 2002 reports, the Auditor General's main findings were that the proof of identity procedure needed to be improved, that existing information sources had to be used more effectively, that the information in the SIN database was not always complete and accurate, and that there were more SINs in circulation than there were Canadians over the age of 20.
To address these issues, important initiatives were implemented with regard to the administration of the SIN and the SIR which had positive consequences on government efforts against identity theft and fraud. We implemented the dormant flag, introduced an expiry date for social insurance numbers issued to temporary foreign workers, and developed a proof-of-identity internal intranet reference website.
The dormant flag identifies SINs that have not been active for a period of five consecutive years or more—meaning that there was no income-related activity, such as filing taxes, or interaction with government programs during this period. Since then, someone with a dormant flag on their SIN file must provide original proof of identity to have their SIN reactivated, an original birth certificate if born in Canada, or Citizenship and Immigration Canada documents if born outside of the country.
This reactivation is done either in person at a Service Canada centre if they reside in Canada, or by mail if they reside outside of Canada. In addition, to better assist agents in detecting potential identity fraud and theft, the SIN proof-of-identity internal Intranet reference website was developed in 2003. Through this website, agents responsible for the issuance of SINs have access to detailed information on what to look for in identity documents to ensure their authenticity.
Building on the recommendations to make better use of different sources of information, the department signed agreements with all 10 provinces, beginning with Ontario in 2005, to develop electronic links between provincial vital statistics agencies and the Social Insurance Register. Under these agreements, we are able to validate the information found on provincial birth certificates, as well as to receive death data from provinces which is matched against the SIR. This allows us to identify records of deceased individuals, preventing further payments from federal programs from being issued.
Moreover, these agreements integrate the ability for parents to apply for a SIN for their child at the same time as they register the birth with provincial authorities.
Finally, in the most recent period, since 2006, the department put in place two important features to assist the administration of the SIN: the certified training of agents and the SIN code of practice. Through our certification program, agents are specifically trained in the issuance and administration of social insurance numbers, and since 2006, only certified agents can issue SINs to clients. The SIN code of practice, which is a public document available on our Internet site, provides standards and guidance to users of the SIN—individual Canadians, employers, or other stakeholders—in understanding their responsibilities with respect to the SIN.
For instance, the code advises employers on how to handle employee information, especially social insurance numbers. It emphasizes employers' key role in detecting and preventing SIN related fraud, as illegal employment and income tax evasion are two of the main motives for this type of fraud. In the code, employers are prompted to immediately report suspected misuse of a social insurance number to Service Canada.
We began receiving birth and death data electronically from Ontario in 2006.
The first province to have validation of birth certificate information was British Columbia in 2008. Currently, there are electronic links with eight provinces, with the remaining two planned to be in place by 2016.
We are pleased to report that our work and efforts were recognized by the Office of the Auditor General in 2009 and 2011. The Auditor General recognized the measures taken by the department to address concerns of past audits, indicating that the department achieved significant improvements on the issues that have been raised.
Now, l'd like to talk about the two most recent initiatives made to the SIN program aimed at increasing its integrity: the redesign of the SIN mail channel and the termination of the SIN card. Given that SIN applications by mail represented only 4% of the 1.5 million SIN requests processed in a year, that approximately 55% of these requests were rejected due to errors in the application forms, and that the mail channel's identity management measures were not as robust as those of the in-person channel, SIN requests can no longer be made by mail, except for individuals in remote areas, or by those who have extenuating limitations, or by those who are from outside the country.
The department was also aware of integrity issues related to improper use of the SIN card. The SIN card was never intended to be an identity card as it does not contain any security features or identifying attributes. However, the convenient wallet-sized format of the SIN card led many recipients to carry it in their wallet, despite the department advising not to do so. As of yesterday, individuals no longer receive a SIN card, but instead receive their SIN in a letter. This initiative will contribute to the prevention of identity theft and fraud related to the potential loss or theft of SIN cards.
The social insurance number is central to the administration of many programs. Since 1964, we have made much progress in developing a robust social insurance number program that assists departments and governments in the administration of their benefits, while protecting clients from identity theft and fraud.
We are continually working with key stakeholders, such as other government departments, the provinces and territories, and the private sector, to identify what more can be done to reduce risks of identity fraud and theft. We are also regularly assessing our processes and policies to make them more secure and more robust, while providing a high level of services to Canadians.
We would be pleased to answer any questions you may have.
