Government Operations Committee on Nov. 29th, 2011

[The Chair, NDP, Pat Martin]

Thank you, Mike. And thank you to all of our witnesses from the Department of Indian Affairs and Northern Development. We appreciate the information you've given us today regarding supplementary estimates (B), and we thank you for your attendance.

[Susan MacGowan]

Thank you.

[The Chair, NDP, Pat Martin]

We'll excuse you now.

I think we will suspend the committee for a minute while we exchange panels.

The committee is suspended.

[The Chair, NDP, Pat Martin]

I will call the meeting to order.

Welcome to our next panel of witnesses, representatives from the Department of Human Resources and Skills Development, who will help us examine the supplementary estimates (B) for that massive department. Leading the delegation, I understand, is Mr. Alfred Tsang, the chief financial officer.

Mr. Tsang, I think we're a little tight for time. We're going to ask you to do a five-minute or ten-minute presentation and we'll have one round, at least, of questions. We hope to conclude about 20 minutes after the hour, if that suits everyone here.

Mr. Tsang, you have the floor.

[Alfred Tsang, Chief Financial Officer, Department of Human Resources and Skills Development]

Thank you, Mr. Chair and committee members.

Mr. Chair, committee members, I am pleased to appear before you this afternoon as the Chief Financial Officer for Human Resources and Skills Development Canada.

For simplicity's sake, I will use the acronym HRSDC throughout this presentation.

I would like to introduce my colleagues who are with me today: Kathryn McDade, assistant deputy minister, learning branch; Paul Thompson, assistant deputy minister, processing and payment services branch; and my colleague, Nancy Milroy-Swainson, director general, office of disability issues, income security and social development branch.

Allow me to offer the committee an overview of the HRSDC portion of the supplementary estimates (B), tabled on November 3, 2011. Through these estimates we are providing Parliament with an update to one statutory program, mainly an increase of $43.8 million in forecasted expenditures for the Canada disability savings program.

Introduced in Budget 2007, the Registered Disability Savings Plan is a long-term savings and asset building plan for people with disabilities.

Our revised forecast is based on two factors. First, provincial and territorial exemption announcements were made sooner than expected. To date, all provinces and territories have announced a full or partial exemption of Registered Disability Savings Plan income and assets. Second, financial institutions who offer Registered Disability Savings Plans have increased awareness, and individuals have greater access to the program given the financial institutions offering it.

Committee members can see this item on page 77 of the Supplementary Estimates (B). Because the Canada Disability Savings Program is a statutory program, this update is provided for your information only as Parliament has already approved the purpose of these expenditures and the terms and conditions under which they may be made.

In addition to this statutory item, HRSDC is asking for an additional $166 million in spending authorities, of which $149.5 million is related to a request for the writeoff of debts owed to the crown for unrecoverable Canada student loans.

Mr. Chair, this student loans writeoff item is the same item contained in our supplementary estimates (C) of last fiscal year. Given that last year's supplementary estimates (C) did not receive royal assent, we have reintroduced this item in the supplementary estimates of this fiscal year.

Allow me to provide a little context. A large percentage of students respect and repay their loans. Some borrowers have difficulties with repayment, and we have measures to support them through the repayment process. Nevertheless, some loans go into default. We have a vigorous recovery process, including working with our partners at Canada Revenue Agency.

The Canada Student Financial Assistance Act establishes a limitation period of six years between the time the borrowers last acknowledged their Canada student loan and any legal activity the crown can undertake to recover that debt. Once this period has expired, the crown no longer has the authority to take action to collect on the debt. Ninety-nine percent of our writeoff request has been deemed unrecoverable for this reason.

Other requests are itemized on page 80 of these estimates.

Committee members will note that we have several items listed under vote 5, grants and contributions. Of these items, all but $9 million represent carry forward of unspent funds from the previous fiscal year. One of the non-carry-forward items is the new horizons for seniors program to support projects that ensure seniors contribute to and benefit from activities in their communities.

As for our requests under vote 1, operating expenditures, our largest item is for $9.5 million, related to the government's advertising program. This request is to fund campaigns to promote skilled trades and raise awareness about elder abuse and financial elder abuse. Another item is the $2.6 million for the implementation of the enhanced guaranteed income supplement for those low-income seniors who rely almost exclusively on their old age security and the guaranteed income supplement.

I hope this overview has given you a more precise idea of the content of the Supplementary Estimates (B) for HRSDC.

My colleagues and I will be happy to answer your questions.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Tsang, for that presentation. We will jump right to questions.

On behalf of the New Democratic Party, we have Ève Péclet.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here today.

We know that most of the department's budget cannot be cut because it covers payments for employment insurance benefits and for student benefits, for example. In accordance with the government's strategic reviews, $60 million was cut from the department. I would like to know where these cuts were made, given that most of the budget cannot be cut.

When the Hon. Diane Finley appeared before the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities, she spoke about a number of programs that the government is introducing to assist in training, and so on.

What are the impacts of budget cuts on these programs? Where will we find the funds needed to run them, given the government's strategic reviews?

[Alfred Tsang]

As contained in the main estimates, these funds available can be directly attributed to strategic review. The strategic review is referenced on page 223 of the June 6, 2011, budget document.

There are three categories of savings. The bulk of the available funds referred to in the question for this year—well over 80%—are from the category of increased efficiency and effectiveness. An example of this is the streamlining of internal services such as finance, human resources, and information technology.

Another example of this is the merging of the apprenticeship incentive grant and the apprenticeship completion grant. Committee members may recall this item in the supplementary estimates (A) earlier this fiscal year.

A very small portion of the remainder comes from the other two categories: a focus on core roles, and meeting the priorities of Canadians. An example of this is the sector council.

I hope that answers the member's question on our strategic review.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

My second question is about Service Canada. We are concerned about the figures provided with respect to the number of people who manage to obtain services by telephone. It seems that only 32% of the calls are redirected. About 50% of people cannot obtain services by telephone and hang up or the call is ended.

Given that a cut of 600 jobs and the closure of several sites were announced on your department's website—I'd like to mention that one of the few sites that will remain open in Quebec is in the riding of the Hon. Christian Paradis, Minister of Industry—I'd like to know how many jobs were lost and how much that will save. I'd also like to know if that money will be used elsewhere. For example, will it be carried forward to supplementary credits? And what impact will these cuts have on services to Canadians?

[Alfred Tsang]

Before I turn it over to my colleague, Mr. Paul Thompson, I want to inform the committee that in the supplementary estimates (B) there is no reference to the funding being questioned.

[Paul Thompson, Assistant Deputy Minister, Processing and Payment Services Branch, Service Canada]

I'd be happy to speak to the question of service delivery. The announcement you're referring to on about 600 positions does not impact call centres. That is a modernization agenda that will unfold over the next three years, this being the first year. The vast majority of that will be achieved over the course of three years.

On the call centres, we're experiencing a very high volume of calls right now, and that fluctuates over the year. I just want to make the distinction between 50% of callers versus 60% of calls. It is indeed the case that about 50% of the calls we receive are not being answered, but on subsequent attempts they are likely responded to. Far in excess of 50% of the callers are getting through to speak to agents.

[The Chair, NDP, Pat Martin]

Thank you.

Your time is up, Ève. It goes very quickly, I know.

Scott Armstrong for the Conservatives.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you, and thank you for being here today and looking at the estimates.

At first I noticed a $2.5 million increase to the GIS supplement. Could you elaborate on whether or not that means the money has already been delivered to the seniors as part of our Budget 2011? That brings it up to the largest amounts it's been in 25 years. Could you elaborate on some of that?

[Alfred Tsang]

Mr. Chair, if you will allow a bit of a two-part answer, I'm going to address the operating part and I'm going to ask my colleague, Paul Thompson, to talk about the contribution part.

The $2.6 million under vote 1 for GIS top-up is for us to implement the top-up, and that's primarily changing our systems, etc.

And on the program side....

[Paul Thompson]

This was a measure that we implemented in short order following the budget. We actually got it implemented in time for the July payment for seniors. What it does over the course of the year is increase the GIS payment by approximately $600 for a single recipient and $840 for a couple, and it goes to about 40% of the guaranteed income supplement recipients who receive this top-up. That, as I said, has already been fully implemented. The amounts in the supplementary estimates are the funds that help us with that implementation—answering inquiries, changing the systems to ensure that it's delivered accurately and on time, and supporting communications and websites and various other tools we use to administer the program.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

About how many Canadians did that affect? Was it over 500? Was it 600?

[Paul Thompson]

It was between 600,000 and 700,000 GIS recipients.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

That's wonderful.

I've also noticed a $5 million increase to the new horizons for seniors program—we're still on seniors here. It's very popular. I know in my riding we have a significant number of seniors.

Was that increase the one that was included in Budget 2011? What will this increased funding be put towards?

[Alfred Tsang]

The $5 million for the new horizons for seniors program is indeed provided as announced by Budget 2011, and it will further the program's objectives by funding a greater number of projects, bringing the program's total annual budget to $45 million. Since 2004, the new horizons for seniors program has funded over 8,500 projects in well over 1,000 communities across Canada.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Can you give me examples of some specific programs that might have been funded? What types of programs can seniors apply for? Would you know of any?

[Nancy Milroy-Swainson, Director General, Office for Disability Issues, Department of Human Resources and Skills Development]

The new horizons for seniors program has a number of priorities, but the bulk of that money was used to strengthen the program's capacity to deal with abuse of seniors—abuse prevention and so on—so that's what it was devoted to for the most part.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

You've also increased the advertising campaign to promote the abuse against seniors program. You must have done some sort of research to see that the message wasn't getting through so we needed to promote that more strongly?

[Alfred Tsang]

In the item for the $9.5 million for advertising, that is indeed one of the campaigns it is intended for.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

My last question has to do with the student loan program. Could you clarify the amount of student loans that are being written off? I think this includes up to three years of bad debts. Am I on the right track there?

[Kathryn McDade, Assistant Deputy Minister, Learning Branch, Department of Human Resources and Skills Development]

Yes, you are on the right track. The estimates indicate that we are requesting a writeoff of about $149 million. Those writeoffs did occur over a three-year period, so 2008-09, 2009-10, and 2010-11. The last time Parliament was asked to agree to a writeoff of direct student loans—loans that are provided directly by the Government of Canada—was in 2007-08, so the year just preceding this three-year period.