Human Resources Committee on June 15th, 2006

[Charles Nixon]

We would like to think so. I don't want to be boastful, because there are always things that can be found that are not up to scratch. But we think we have made substantial progress over the intervening years, and we are in the midst of taking further steps beyond even what were recommended in the reports of this committee and the Auditor General back in 2002 and 2003. These will improve the process and the integrity of the social insurance register, ensuring that we have a process that we can rely on.

[Rick Dykstra, Conservative, St. Catharines, ON]

The 900 series seems to be the highlighted issue, or the issue that came back in a number of the points here. In your remarks you said it was something that you've taken care of. Are you pretty confident that the issue has been dealt with?

[Charles Nixon]

Yes, absolutely. We introduced regulations on April 1, 2004, that instituted a system of end dates or expiry dates for the 900 series, so any temporary worker coming into Canada would only be there...and it's tied to their immigration paperwork. So those social insurance numbers will cease to exist or will be eliminated from the social insurance register, and therefore cannot be used, and if anybody tries to use them, they will be flagged in our system.

[Rick Dykstra, Conservative, St. Catharines, ON]

One of the things you mentioned is that a few years ago it became illegal for any private organization or business to use the SIN for any purpose. I guess that's right in the act itself.

Do you know approximately how many businesses or organizations are using the SIN for purposes of identification?

[Charles Nixon]

I would have to say probably all of them with employees, because they use it for their payroll, as they need to make deductions at the source, by law, for taxes and the Canada Pension Plan and employment insurance. On that basis, they have to have that number. They're actually supposed to ask for it on hiring somebody, to make sure that person actually has a social insurance number. Those are the kinds of things we will have in our code, so that proper steps are taken by employers in the private sector in the use of the social insurance number.

[Rick Dykstra, Conservative, St. Catharines, ON]

And have the proper steps been taken in terms of making sure there's integrity within the system in that regard?

[Charles Nixon]

Yes.

[Rick Dykstra, Conservative, St. Catharines, ON]

Okay, thank you.

[The Chair, Conservative, Dean Allison]

If that's it, then we'll move on to Mr. Lessard, for five minutes.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Thank you, Mr. Chairman.

I wish to point out that perhaps we can use the last round of questioning to recover the seven minutes we didn't get at the start. While you think about this, I'll use the five minutes allotted to me. You can let us know what you decide later.

If I go by your statement on page 7, I'd have to say there are no problems and no need to be concerned any more. In fact, you state the following:

And as you know, we already have secure links with Citizenship and Immigration Canada so we can accurately identify 100% of permanent and temporary residents.

If that's true, then there's no need for us to be concerned any more. However, this morning the AG told us that while some progress has been made, there are still 700,00 people who have a SIN, but whose entitlement to one has not been verified.

Getting back to the uses made of the SIN, you correctly stated that responsibility for the management of the SIN is now with Human Resources and Social Development. However, unless I'm mistaken, the policy governing the use of the SIN is still set by Treasury Board. So then, the department manages the SIN, while TB issues policy directives respecting the use of this identifier.

There continues to be a link between the use of the SIN and income programs. Therefore, the Department of Revenue is involved in this. For instance, each time a person takes out a loan or wants to deduct money from his taxes, the level of income always comes into play. Often, we're a long way off from the SIN's original intended use. Even video stores sometimes asks customers for their SIN. This only proves that there really are no safeguards in place.

Now that you have responsibility for the management of the SIN, have you talked to Treasury Board about bringing in safeguards and ensuring that the SIN is not used for other purposes? That's my first question for you.

Secondly, still with a view to making the system more secure, this committee, acting on an observation by the AG, issued 14 recommendations in 2002. In early 2003, the government announced that it planned to implement these recommendations, take appropriate action and report back to the AG and to the committee on progress made in implementing these measures.

Were these reports in fact produced? How often? Did the government report back to the committee on the progress made in implementing the measures you mentioned?

I'd appreciate an answer to these two questions. If I have any time remaining, or two additional minutes, I'll get back to you with another question.

[Charles Nixon]

I got five. I'll try to answer them quickly so as to give you your time.

In regard to your comment with regard to Citizenship and Immigration, what we have from them is the temporary or permanent resident information check. What we are still waiting to establish with them is the electronic hookup for citizenship, so this is something that we are eagerly anticipating.

You're correct, it is Treasury Board that sets policy for the social insurance number around use federally. Certainly we have the issue of Blockbuster or whoever else, or the pizza, or somebody who thinks that the social insurance number is important for their business. That is something we hope to address through the code--to re-establish again in the public's mind what are the appropriate uses for the social insurance number.

Around the reporting, we certainly reported against the 2003 report to the committee. We indicated at this time that we would follow up through our annual reporting through our reports on plans and priorities and the departmental performance report. In each of the subsequent years there has been information in both of those reports about what our goals were for the year and the progress made around the social insurance number. As the Auditor General indicated, we have reported to her on the progress of her audit in 2003, 2004, and 2005. We probably won't this year because of the audit that she's undertaking now. So we will then start the process all over again or something.

[The Chair, Conservative, Dean Allison]

That's your five minutes, but I'll let you have one more question, Mr. Lessard.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

You were allocated $10 million in 2002 and 2003 to implement corrective measures.

Have you sought additional funding since then to implement these measures? Has this affected your ability to take corrective action?

Getting back to the two questions I asked earlier, have you made any suggestions to Treasury Board about possible safeguards? Apparently, the SIN is being used incorrectly, but I see that there are no safeguards in place to prevent that from happening.

Is this the first time since 2003 that you're reporting on the progress made in implementing the measures agreed to that year?

[Charles Nixon]

In terms of the funding, we decided as a department that the work that needed to be done on improving the social insurance number and the integrity of the social insurance registry was of such importance that we would reassess the money we spent and we would put more money in our budget against that.

Since 2002, we have increased our administrative spending by $7 million. In addition, we have devoted $9 million to special projects, such as integrity of the SIR--studies and so forth--to make sure this was working appropriately and to smooth the way for provincial agreements. All in all, in the last four years we have spent over $16 million of internal reallocation in order to make progress on this file.

In terms of the Treasury Board, we haven't discussed a lock mechanism, as you say, with them in particular. We have not gone that route. Our route has been more to try to reach out to Canadians through communications tools--and the code is certainly part of that--in order to try to reinvigorate the appropriate use of the social insurance number.

Certainly, when it comes to our attention that improper uses have been made, we do communicate with those groups involved to remind them of what the appropriate use is.

[The Chair, Conservative, Dean Allison]

Thank you very much.

Mr. Lake had a couple of questions.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you for coming in today.

I noticed in your statement that you used the word “rigorous” about 10 to 15 times.

[Charles Nixon]

Yes, on purpose.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

It does sound as though you are making progress. I'm glad to see that. I'm also on the public accounts committee, and it's not fun to be there if you haven't made progress on the recommendations that the Auditor General has made.

I'm wondering if you could identify what kind of fraud issues are most common with the social insurance numbers.

[Charles Nixon]

They start from the outside, with people trying to get benefits to which they're not entitled. If you're asking generally about programs, people try to get entitlement to programs to which they are perhaps not entitled. It's not necessarily an issue around the social insurance number, but it is one around that.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

How would they use the social insurance number to do that, though?

[Charles Nixon]

As a legitimate person, for instance, they might try to claim employment insurance benefits to which they are not entitled. They may have--

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Using their own social insurance number, or using someone else's?

[Charles Nixon]

Yes, they could try to do that, but they may be in collusion with an employer around a record of employment or that kind of thing.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Okay. What would be the purpose of someone getting a fake social insurance number, for example?

[Charles Nixon]

I think it is one of the steps of building an identity. So representing themselves as having a social insurance number, in some other people's eyes, may give them credibility in terms of getting some other piece of identification or card or something like that, which again will enhance their fictitious building of an identity.