Government Operations Committee on April 29th, 2008

[The Chair, Liberal, Diane Marleau]

We have before us today people from Passport Canada, and I thank them for coming.

We've invited them here in the context of the geographic distribution and turnover rate of federal public servants and the high cost that comes as a result of that. In our study we're looking at how the decisions are made to locate call centres, main offices, and so on, and whether you have a very high turnover of employees, the costs associated with that, and whether you take that into consideration when you make your decisions.

You know how it works. You've been here before. We'll give you ten minutes, and then we'll open it up to the committee members for questions and answers.

Thank you. Would you please introduce the people with you?

[Gérald Cossette, Chief Executive Officer , Executive Office, Passport Canada]

Good morning Madam Chair, vice-chairs and committee members. Thank you for this opportunity to appear before you to answer questions pertaining to the availability of Passport Canada's services across the country.

Here with me today are Ms. Jody Thomas, Chief Operating Officer, and Mr. Gary McDonald, Director General for Policy and Planning.

I will begin my remarks by bringing you up to date on what has been accomplished at Passport Canada since I reported to this committee on February 22, 2007. We will of course be pleased to answer all of your questions concerning the geographic distribution of our services, as well as giving you an overview of what has been accomplished since last year.

As I mentioned to you last February, the new requirements imposed by the United States' western hemisphere travel initiative, or WHTI, have required Passport Canada to rethink, reinvent, and innovate in a very short time and during the busiest period ever seen in the agency's history.

Over the course of less than a decade, the number of Canadian passports issued has increased from fewer than two million per year to a record high of 4.83 million at the end of the past fiscal year. In October 2006, just before the U.S. announced the final WHTI air rule, we were issuing fewer than 60,000 passports per week. We now have the capacity to issue more than 110,000 passports per week, with little or no overtime and no backlog.

As we speak, applications that are presented in person at Passport Canada offices are processed in two weeks, while applications submitted through a passport receiving agent—Service Canada or Canada Post—and all applications mailed in are processed in under three weeks. In fact, at the end of last week, mail-in applications, with the exception of the applications received from the U.S., were processed in ten days. So right now there is no difference between applications received through the mail or applications submitted at walk-in offices.

Last February I presented you with the agency's priority for meeting the current demand and readying Passport Canada for future growth. We have taken great strides in meeting these priorities.

First, we have greatly expanded our service network to reach more clients without investing in a costly infrastructure.

During the past 12 months, in conjunction with Service Canada, we have opened 65 new passport service locations across Canada. In only five years, passport service locations in Canada have increased from just 30 to 190. There are now 33 Passport Canada offices, 101 Service Canada receiving agents, and 56 Canada Post receiving agents open across the country. About 95% of passport applicants now reside within 50 kilometres of a passport service location.

This service model, which allows us to use the infrastructure of our business partners, gives Canadians unprecedented access to passport services within Passport Canada's current financial capacity. In other words, we are able to provide passport services everywhere in Canada and keep the passport fee at $62.

Furthermore, in partnership with Service Canada, Passport Canada is now contemplating expanding the range of passport services offered by receiving agents. Under this new regime, a limited number of Service Canada receiving agents located outside major urban centres would be able to authenticate the documents supporting a passport application. Applicants who are unable to visit a passport office but are able to visit a Service Canada agent office would no longer have to surrender their birth certificate or citizenship card for an extended period of time.

As well, this past year Passport Canada began holding passport clinics to reach out even more broadly to Canadians. To date we have held 62 clinics and received over 12,000 applications through this service channel.

In addition, last February Passport Canada announced the opening of a new satellite passport office in Kelowna. With more than 48,000 applications received annually, demand from the Okanagan Valley has grown to the point that it can sustain the operation of a satellite office. This business decision is also supported by the booming economy in that region, the fact that Passport Canada is under-represented in western Canada, and the increasing number of new Canadians in that region, who are typically big consumers of passport services.

Second, we simplified our policies and procedures for passport renewal.

As of August 15, 2007, applicants who are renewing their passports are only required to submit a shortened application form, two photos, and their current passport. This new process does not impact the security and integrity of the Canadian passport. Passport Canada continues to conduct all the stringent security checks that are part of the entitlement process on all files. Should these checks raise concerns, a more in-depth examination of the application is conducted.

We also introduced a new guarantor policy on October 1, 2007, whereby most adult passport holders may act as guarantors. Under this new policy, Passport Canada continues to verify the identity of applicants through guarantor declarations but now relies on its own comprehensive database instead of less reliable occupational directories for cross-checks. This process is more secure, as our database contains more information and is more reliable than occupational directories.

Third, we greatly increased our processing capacity.

For Canadians who can't or don't want to use one of our service points, Passport Canada invested $18 million to strengthen its mail-in service channel.

Our new processing facility in Gatineau is functional and already making great contributions to our operations. As I mentioned earlier, applications received by mail are processed in under three weeks. In fact, they are currently being processed within 10 days. The retrofit of this existing plant was done in only 26 weeks where projects of this magnitude normally take 26 months. This coming fall, when this facility is fully staffed, we will have more than doubled our processing capacity for mailed-in applications.

Concerning staffing, with the help of the Public Service Commission, Passport Canada was able to integrate over 1,400 new employees over the past fiscal year. For Passport Canada this represents a little less than half of our entire workforce. Through our ability to hire staff rapidly, Passport Canada can now adapt faster to demand fluctuation.

Fourth, we are investing in a new electronic system and security features that reinforce the quality and security of the Canadian passport. Our e-passport project will begin in 2009, and as announced in the 2008 budget, a ten-year validity e-passport will be introduced nationally in 2011. This brings us in line with the other G-8 countries, all of which have implemented the electronic passport. The e-passports contain a chip that holds the bearer's information, including a digital photograph. It will allow border officials to scan the passport and confirm that the traveller is indeed the rightful owner of the passport.

A contract to integrate facial recognition technology into our systems has also recently been issued. This technology, which will be operational in early 2009, will enhance security by ensuring an applicant cannot obtain passports under two names. The improved Canadian passport will be even more secure than our current passport, and Canadians will need to apply for it only once every ten years. The implementation of the e-passport, facial recognition, and the new real-time security management system will make this new policy possible.

Finally, we are preparing for the implementation of the new U.S. land and sea port-of-entry requirements that will come into force in June 2009. The United States has announced that the last phase of the WHTI will come into force on June 1, 2009. Passport Canada is developing mitigating strategies to maximize its ability to issue passports to the population in a timely fashion prior to and post-implementation.

First and foremost, sustained proactive communication efforts will be undertaken to encourage Canadians to apply for a passport in the summer and fall of 2008, thereby moderating demand throughout the winter and spring of 2009. As I mentioned earlier, Passport Canada will continue to offer clinics in areas where in-person service is not readily available. Passport Canada will also closely monitor demand over the coming months and will make adjustments accordingly.

Lastly, Passport Canada now has the option of extending the validity of passports already in circulation in order to respond to a sudden surge in demand. Driven mostly by new information technologies and evolving global security concerns, the passport business has changed substantially over the past decade and will continue to change at a rapid pace. Moreover, recognizing that there is an increasing appetite for online services, Passport Canada is looking at information technologies and investigating options for conducting its business entirely online. By greatly reducing or even eliminating the need for in-person visits, Passport Canada hopes to be able to not only reduce delivery times and save money, but also completely bridge the gap between urban and regional service standards.

Needless to say, this has been a busy year and we have accomplished a great deal. In closing, I would like to underscore the great dedication of Passport Canada's staff. Above everything else, it is their tireless efforts to serve Canadians that have made possible all the initiatives and breakthroughs that I have just discussed with you.

Thank you, Madam Chair. I now welcome questions from your committee.

[The Chair, Liberal, Diane Marleau]

Merci.

We'll go with Mr. Holland.

[Mark Holland, Liberal, Ajax—Pickering, ON]

Thank you, Madam Chair.

Thank you to the witnesses for your appearance today.

I'll start with a compliment. A couple of years ago a new passport office opened within my own region, the Durham region, and it has made a substantive difference in the number of complaints that my office receives, and also, frankly, in the volume of people we have to deal with who come to our office with passport problems. So that's appreciated, I know, within my constituency. Those new offices do make a difference; they're important.

I want to talk about the topic we have at hand today, and that is the geographic distribution and turnover rates, because to some extent it wasn't addressed in your presentation. One of the concerns I think the committee has is that there is a very high turnover rate in particular offices—for example, the Scarborough office. When you lose people as a result of this high turnover rate, there's a significant training cost.

Could you quantify that problem for me, and could you tell me what you're doing to address the problem with turnover rate? How big an issue is it to have to retrain when you lose somebody? What costs are we looking at?

[Gérald Cossette]

Thank you.

The issue we've faced over the past couple of years, in fact, is to increase the number of people working at Passport Canada. If you look at the number of employees we had at the beginning of the decade, in 2001, for instance, we had more or less 1,000 employees working for Passport Canada and issuing passports within service standards. Over the past two years, the demand has increased by 50%. So to a certain extent we have been playing catch-up with that demand; hence, the significant hiring we've done over the past two years.

Of course we hire people on a permanent basis, but because the demand goes up and down, we also need to hire people on a short-term basis. So one of the problems we face is developing pools of workers who can basically work on a seasonal basis instead of being with us over a 12-month period. That has been part of our challenge, to have these people available when we need them. Historically, we needed these people over the winter months—December, January, February, and March—and then the demand would go very, very low and pick up again in October and November, when we would have to rehire a bunch of people to face the surge in demand. So that has been the main challenge over recent years, the ups and downs in demand.

The second thing is that when we hire indeterminate employees to become passport officers, this is where training starts to cost a significant amount of money, because the employees are trained over a ten-week period at our training centre, and then we put them in our offices, where they're supervised, and so on and so forth.

If we were to lose these people at a high rate, of course, that would mean a significant loss from a financial standpoint, but also from a human resources standpoint.

But over recent years our main challenge has been the ups and downs of demand and how we can manage that. I say this because most of our processes are still manually driven, so our business is highly labour intensive right now.

[Mark Holland, Liberal, Ajax—Pickering, ON]

I think that's an important piece of information you've given us. It's valuable for what this committee is looking at. But I wonder if you could also speak specifically to turnover rates. I understand that you're saying that a bigger problem for you is the ebb and flow of demand and the need to have seasonal workers to come in to fulfill that demand. But specifically to the question of turnover, how significant is it? We've been told at different points in time that it's a very significant problem. You haven't really addressed it, but I'm inferring from you that this other issue is a bigger problem and that you don't see turnover rates as a big problem.

[Gérald Cossette]

I will ask Madame Thomas to be a bit more specific, but the main challenge we have when it comes to turnover is with regard to passport officers, because these are the people who need longer training, security clearances, and so on and so forth. These are the people who are manipulating applications, and have access to our database and the passport document itself.

The challenge we face when it comes to this category of people is the fact that larger agencies, like CBSA, for instance, and Service Canada, and so on and so forth, are attractive to our employees because they offer more opportunities for career development. We are a small agency, where you reach the top of the line fairly quickly in your career, if you will. If you move from Passport Canada to Service Canada, you have many more opportunities. So that's one challenge that we need to face.

The second thing is that historically, because our organization has been manually driven, it's been highly or almost exclusively operational, and there has been an issue with operational workers not getting the same salaries as policy workers, for instance. So there is a discrepancy between some of our classifications and the classifications offered by other departments.

To give you a specific example, some of our PM-1s would do more or less the same work at Service Canada for a PM-2 salary. So lots of people come to Passport Canada and get trained by us and move on to larger organizations. So without being dramatic about it, sometimes we refer to ourselves as the “farm team” for larger organizations, because people come to us, get trained for a couple of years, and then move on.

[Mark Holland, Liberal, Ajax—Pickering, ON]

I know I am limited by time, but I hope that we'll come back to the solutions to that in our questioning, because it raises concerns not only from a cost perspective in terms of training, but also from a security perspective, as you obviously want people in charge who have the training and the experience necessary to make sure that things are running safely and securely.

But recognizing that, I probably only have time for one more question.

[The Chair, Liberal, Diane Marleau]

You have more time.

[Mark Holland, Liberal, Ajax—Pickering, ON]

Okay. One of the concerns I have is the decision to make it a ten-year period of renewal. This is tangential to our topic but pertinent to the issue of passport security generally. This was a decision that was made, as far as I've been able to ascertain, against the advice of your own department. In fact, your agency stated that

A shorter validity period allows for passports based on outdated technology or security and those reported to be lost or stolen to be withdrawn from circulation more frequently, which contributes to the security and integrity of passports internationally.

In an age when technology is changing so rapidly, where the components for microchip technology are made so much more cheaply or are so much more easily integrated into documents, I find it impossible to believe that my passport today should not be substantively different ten years from now. That's an awfully long time.

Are you not concerned that this is undermining security? Do you feel that this was an action undertaken by the government to reduce all the criticism around backlog? In other words, in making the renewal period ten years, are we reducing backlog by making a major security concession?

[Gérald Cossette]

The ten-year passport is being used by other G-8 countries. Our approach is that the ten-year passport becomes possible as technology becomes available. The ten-year passport will be an electronic passport. It will have a chip in it. On top of that, we are introducing other security measures that were not available to us in the past but are now available. For instance, within twelve months we're going to have facial recognition software that allows us to compare photographs so we can confirm whether the same person is applying.

[Mark Holland, Liberal, Ajax—Pickering, ON]

On your point about the integrated chip—

[The Chair, Liberal, Diane Marleau]

I think you're out of time.

Mr. Cardin.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Madam Chair.

Good morning to everyone.

You listed the services provided to citizens. Generally speaking, the act of applying for a passport is quite a solemn matter. The citizen must provide pieces of identification because he or she must be identified, and these cards are important. The citizen therefore needs to be reassured about this matter. Your postal service provides very little security, unless the application is sent by priority post. There is the reception office, Service Canada and the clinics, but you forgot an important place: the MP's office.

My office received its 50,000^th passport application. Last year, we received, verified and sent in a secure fashion 10,293 passport applications to Passport Canada. We responded to requests—

[The Chair, Liberal, Diane Marleau]

One moment, please.

Are you saying there's something wrong with the interpretation?

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

The interpreter said that in the past few weeks you've received 50,000 applications.

[The Chair, Liberal, Diane Marleau]

He said that he reached 50,000 passports.

[Serge Cardin, Bloc, Sherbrooke, QC]

Soon I will have been an MP for 10 years, and I have received 50,000 applications. If I add the 10,293 applications that I received last year, we can see that this number is constantly going up.

All of the actions taken makes people feel more secure. I suppose that we have developed some expertise, but that does not constitute a guarantee of security for you, because you have to intervene all the same.

You said that 95% of passport applicants reside within 50 km of a passport service location. In the case of Sherbrooke, which is my riding, the Estrie region is relatively big and so many people have to go more than this distance. So a good portion of our population must be part of this 5%.

In 2004, we asked for a regional passport office similar to the one in Saguenay. Is the Saguenay office profitable? How does one assess the profitability of a passport office?

Talking about profitability, I don't know if it was an error or an official announcement, but the passport costs $62. However, I though that it cost $87. Has there been a change?

I don't know to what extent we are helping you. Do these numbers demonstrate significant need? In 2004, we asked for a passport office; some 12,000 or 13,000 people had signed a petition to that effect. Sixteen municipalities have apparently asked the government for its support in obtaining a passport office.

In order to increase efficiency, do we need to decentralize a bit, a lot or not at all? When was a passport office opened in Quebec? What conditions to the regions have to be able to fulfil in order to obtain a passport office? On what basis do you determine whether or not there is a significant need?

[Gérald Cossette]

Thank you, Madam Chair.

I will try to answer all of your questions quickly.

The passport still costs $62. People pay $87, but Passport Canada sends $25 of this amount to the Consolidated Revenue Fund in order to pay for consular services that the Department of Foreign Affairs provides abroad. Consequently, the $87 and $62 amount do lead to confusion. Passport Canada retains only $62 for its funding.

[Serge Cardin, Bloc, Sherbrooke, QC]

Are you still telling people that a passport costs $87?

[Gérald Cossette]

Yes.

[Serge Cardin, Bloc, Sherbrooke, QC]

You don't mention this $25. The cost of the passport to the citizen is $87.

[Gérald Cossette]

Yes, but we get only $62 of this amount.

[Serge Cardin, Bloc, Sherbrooke, QC]

It is important to calculate your profitability.

[Gérald Cossette]

Yes. This $25, which represents $75 million annually, is sent to the Consolidated Revenue Fund.