Human Resources Committee on Sept. 29th, 2011

[The Chair, Conservative, Ed Komarnicki]

I call the meeting to order.

Just by way of information, of course, we have with us individuals from Human Resources to give us a general introductory briefing, and they will of course respond to questions. There will be an opening statement and then, in accordance with our initial minutes, each party will be given five minutes to ask questions. There are two panels today.

We'll start with the New Democratic Party and then move to the Conservatives, and we'll keep alternating until we get to the Liberals and the Conservatives at the conclusion of that rotation.

There will be an opening statement, as I said, and there will be some questions following.

I'm not certain who from Human Resources will start with the opening statement.

Mr. McGovern? We'll give you the opportunity to present and then we'll open up to questions.

[David McGovern, Senior Assistant Deputy Minister, Strategic Policy and Research Branch, Department of Human Resources and Skills Development]

Thank you very much, Mr. Chair.

We've circulated a deck in advance that I'll be referencing throughout the course of my opening remarks.

HRSDC was created in 2006 to bring together the Government of Canada's social and labour market strategies in recognition of the linkages between labour market success and the various social elements of Canadian society, including poverty, low income, and social inclusion.

While it is a large and diverse department, Human Resources and Skills Development Canada's mission provides a focal point to build a stronger, more competitive Canada; to support Canadians in making choices that help them live productive and rewarding lives; and to improve Canadians' quality of life. The department is responsible for some of the most well-known and significant programs provided by the federal government, including the Canada pension plan, employment insurance, old age security, children's benefits, and student loans, programs that span the lifetime of Canadians.

Service Canada, as the face of the government across the country, has proven to be both an effective and popular organization. It brings related services and program benefits to citizens from coast to coast.

We will move to slide 4.

The department includes the labour program as well as Service Canada. The labour program is responsible for overseeing federal labour responsibilities. These include labour laws, mediation services, and representing Canada in international organizations and international labour negotiations. HRSDC also provides funding to other levels of government, provinces, and organizations to support labour market and social development.

Given the extent of our programming, reaching all parts of the country requires a large workforce. We have approximately 26,000 employees currently in place.

I will now reference slide 5.

As I mentioned, HRSDC, through Service Canada, has offices from coast to coast to coast. Of the department's approximately 26,000 employees, two-thirds work in the regions. The department's responsibilities include the development of the labour market and labour force; reducing barriers to post-secondary education and skills development; overseeing federal labour regulations; and providing income support to seniors, families with children, and EI recipients.

The broader HRSDC portfolio includes several other organizations, including the Canada Mortgage and Housing Corporation, the National Seniors Council and, as of May 18 of this year, Status of Women Canada, each of which provides additional services and policy and program support across a range of areas for the federal government.

I am now referencing slides 6 and 7.

HRSDC operates under the Department of Human Resources and Skills Development Canada and the Department of Social Development Act. It also has the primary responsibility for legislation relating to its programs, such as the Employment Insurance Act and the Canada Labour Code. These acts provide for the appointment of both the Minister of Human Resources and Skills Development Canada as well as the Minister of Labour. The Minister for the Status of Women is appointed under the Ministries and Ministers of States Act and is not covered by the departmental legislation.

I will now go to slide 8.

This slide shows the department's program activity architecture, or PAA. All departments are required to use a PAA to show the strategic outcomes or goals of the department, and how programs are organized to support the achievement of those outcomes. The PAA forms the basis of financial reporting and funding votes in Parliament.

I will now go to slide 9.

The department administers approximately $100 billion in spending each year. This slide provides a budget breakdown for the department's expenditures as they appear in the report on plans and priorities, which was tabled in Parliament in June.

I will now go to slide 10.

As a large organization we continually adapt to an ever-changing environment for Canadians, our partners, and the Government of Canada as a whole. We see demographic changes under way in Canadian society, the profound effect of technology and trade on social and economic opportunities, and a need to meet Canadians' rising service expectations, tempered by the need to contain costs.

To adapt to these changes and contribute to the Government of Canada's plan to return to balanced budgets, we need to modernize how we do business. HRSDC is working to become a more focused, efficient, and modern organization.

This change agenda has three major components: first is implementing the strategic review decisions contained in Budget 2011; next is a Service Canada business transformation; and the final point is the enabling services renewal program, that is, modernizing the way the department handles its HR, finance, and IT services and systems.

These changes are about getting government right, allowing us to achieve better results for Canadians, and providing better value for money while positioning our department for the future.

I will now go to slide 11.

There are six priorities in the department's report on plans and priorities. At the end of the year, we will report our progress on supporting these priorities in the departmental performance report.

In conclusion, we are a large department with offices and employees across Canada. In very tangible ways, we are the face of the federal government for many Canadians. This broad mandate and reach puts us at the forefront of the Government of Canada's labour market and social policy agenda. It gives us an opportunity to make a difference in the lives of Canadians from coast to coast to coast.

Thank you for giving us the opportunity to appear before you today. We'll be pleased to take your questions.

[The Chair, Conservative, Ed Komarnicki]

Thank you, Mr. McGovern.

We'll commence the questioning with Ms. Crowder.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Thank you, Chair.

Thank you for coming before us. It's always a process to educate a new HUMA committee on the very complex department you operate.

In preparation for the meeting, I went to your integrated business plan. You acknowledged in your opening remarks that roughly 95% of your budget has to do with the income support programs. I have a question about your strategic review, which you also referenced. If 95% of your funds are with those income support programs and you need to achieve roughly $500 billion in savings over three years, I wonder where that money is going to come from. To me, that says you have roughly 5% of the department to cut $500 billion over three years. I wonder what the impact is going to be on programs that are delivered outside of that 95%. What kind of process are you going to use to review that?

[David McGovern]

The government is committed to reducing its spending and its size. To achieve this, it started with a number of initiatives, including the strategic review that you noted in your question. In 2010 HRSDC began a strategic review of its programs. These reviews are done on a regular cycle, and our review was essentially in the fourth year of a four-year cycle. We undertook to look at our programs and services to ensure that they were efficient and effective, that they continued to respond to the priorities of Canadians, and that they were in line with our core federal responsibilities.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

May I follow up on that? The $500 billion that's expected to be cut over three years, will that only come out of the 5%, or will it also be targeted at the 95% where the income support programs are?

[David McGovern]

As we announced in the budget, our department will reduce its spending by approximately $270 million over three years through strategic review. Our focus--

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Will that come out of the 95% or the 5%? That's the piece that I'm interested in.

[David McGovern]

The reduction comes out of our department's base budget. It's a 5% reduction under strategic review.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

I'm not clear on this. Will both parts of that funding pocket in the department be impacted?

[David McGovern]

It excludes the benefit programs.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

It will come out of the 5%, then, the balance of the department. My understanding is that 95% is EI, CPP, and all of the income support programs.

[David McGovern]

My understanding is that in Budget 2011 we announced the strategic review decision as it impacts HRSDC. The reduction we are looking at is $270 million over a three-year period.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

I'm reading your program here and it says $96.2 billion, or 94.2%, will directly benefit Canadians through large statutory transfer payment programs such as old age security, the Canada pension plan, employment insurance, Canada student loans, and universal child care benefits. If I'm hearing you correctly, that 94.2% is not part of where those cuts need to come from. The cuts need to come from the other 5% of the department's budget. I'm just wanting to be clear on where those cuts will come from.

[Jacques Paquette, Senior Assistant Deputy Minister, Income Security and Social Development Branch, Department of Human Resources and Skills Development]

To clarify the benefits, if I may, you were talking about the CPP and OAS and so on. They are not counted in this. Then there is a base that is evaluated for the entire department, and the 5% is 5% of that base.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Okay, so that $270 million will come out of that piece.

Do I have time left, Mr. Chair?

[The Chair, Conservative, Ed Komarnicki]

You have about 45 seconds.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Okay.

You won't have time to answer this, but I also noted that your FTE reduction is roughly 3,500 FTEs over three years. The note in here says part of that is because you were staffing up as a result of increased employment insurance.

I wonder if you could provide us the FTEs prior to 2010. If you could do that in writing, it would be much appreciated because you will not have time today. The three years prior to 2010 would be useful.

Thank you.

[The Chair, Conservative, Ed Komarnicki]

Thank you for that exchange. I gather from it that the statutory benefits will continue without being affected.

We will now allow Ms. Leitch to go ahead.

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Good afternoon.

I won't be speaking a lot of French. Unfortunately, I only speak English right now.

I really appreciated the presentation. Thank you very much for taking the time to come to present here, and also for taking the time to put it together. I know these are not easy tasks and you have a lot of things on your plate right now, so I greatly appreciate your taking the time to come to present today.

I have two questions, so there is a more fulsome appreciation of the breadth and depth of what you cover in the department.

What are the key programs currently undertaken by HRSDC that you believe are facilitating participation in the labour market? You specifically outlined the strategic initiatives for HRSDC on page 8. What are those programs that are helping us increase our skilled labour force across the country?

[Louis Beauséjour, Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Human Resources and Skills Development]

There are a number of programs put forward either to increase the skills of people or to have them come back to the labour force. If we look at trying to have more people participating in the labour force, we have programs that are targeted to people at risk. We have the opportunities fund to help disabled people become more attached to the labour force. We have labour market agreements for persons with disabilities with provinces, giving disabled people access to labour markets.

There is programming that specifically addresses aboriginal people. We have the aboriginal skills and employment training strategy, and also the aboriginal skills and employment partnership. There is also the youth employment strategy targeted at youth. There is the targeted initiative for workers to ensure they can obtain some of the skills to regain their attachment to the labour force.

When we look at our big suite, there are two big transfers that we make to provinces to provide funding for training. There is the labour market development agreement, which partly targets either employment insurance clients or former clients of EI, and also labour market agreements to provide support for unemployed people to regain their attachment to the labour market.

We also have a program that targets specific skills development, such as the literacy and essential skills program, where we work with stakeholders to develop best practices in identifying the right kind of training for essential skills.

What else can I mention? We also have a program, the foreign credential recognition program, through which we provide funding to stakeholders to develop and accelerate foreign credentials recognition to ensure that internationally trained people, both immigrants and Canadians who were internationally trained, can have faster access to labour markets.

I think that covers most of the programs. It's a large suite of programs to deal with these kinds of issues.

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

I'll ask one other quick question.

Could you inform the committee of the modernization tactics you've undertaken to modernize the organization? I know you've been very actively engaged in doing that. Could you update us on the modernization that you've done? I understand there's been a fair amount of automation injected into the organization.

[David McGovern]

With respect to the automation of our programs, the people appearing next from Service Canada are best placed to respond to that question.

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Thank you.

[The Chair, Conservative, Ed Komarnicki]

Your time is up as well.

We'll move now to Claude Patry.