Thank you, Chair.
First I would like to say that Deputy Minister Shugart regrets he cannot be here today. He had other unmovable business to attend to.
I am pleased to appear before you in my capacity as Associate Deputy Minister of Human Resources and Skills Development.
I would like to begin by introducing my colleagues who are with me today: Karen Jackson, Senior Associate Deputy Minister of Human Resources and Skills Development, and Chief Operating Officer for Service Canada; Alain Séguin, Chief Financial Officer, and Douglas Stewart, Vice-President, Regional Operations and Assisted Housing, Canada Mortgage and Housing Corporation, who will speak to you later; Michel Tremblay, Director, Financial Planning and Budgets, Canada Mortgage and Housing Corporation.
The department I represent helps Canadians at crucial stages in their lives, whether they are still in school or raising a family, looking for a job or retiring from the workforce. The department is responsible for delivering high-quality services that are timely and accessible, through Service Canada.
Allow me to offer the committee an overview of HRSDC's portion of the 2013-14 main estimates tabled on February 25 this year.
The estimates amount to $50.5 billion. Of this, $48.1 billion, or more than 95%, will directly affect and benefit Canadians through statutory transfer payments such as old age security, the Canada Pension Plan, the universal child care benefit, the Canada student loans and grants programs, and the Canada education savings grant.
Statutory items are included in the estimates for information only because Parliament has already approved the purpose of the expenditures and the terms and conditions under which they may be made through other legislation.
You will note that the forecasted spending on the old age security program increases year after year because of our aging population and the planned increase in the amount of the average monthly benefit. It is estimated that between 2009 and 2016 there will be an increase of more than one million beneficiaries for both the Canada Pension Plan and the old age security program.
Besides statutory items, the 2013-14 main estimates include quoted appropriations, which consist of two votes: HRSDC vote 1, on the operating expenditure side, and vote 5, grants and contributions.
In relation to vote 1, operating expenditures, the department spent $769 million in 2011-12. The department planned to spend $654 million in 2012-13, a decrease of $115 million, and plans to spend $627 million in 2013-14, a further decrease of $27 million.
The total decrease of $142 million is mainly attributable to the transfer of activities to Shared Services Canada; the 2010 strategic review; savings identified as part of the budget 2012 spending review or the deficit reduction action plan; and the allocation from Treasury Board central votes in 2011-12 to cover off expenditures such as the immediate settlements for severance pay due to revisions to specified collective agreements.
As for vote 5, Grants and Contributions, the 2013-2014 main estimates level is $1.76 million, an increase of $1 million from the 2012-2013 main estimates. This variance is mainly due to announcements in the 2012 Economic Action Plan such as the Youth Employment Strategy to assist more young people in gaining tangible skills and experience. These increases are offset by reductions attributable to the ending of programs and to the 2010 Strategic Review.
Through grants and contributions, the department grants funding to other administrations and organizations in the volunteer sector and the private sector to support projects which meet the needs of Canadians in the workforce and in social development. Please note that the funding of some of these programs is of limited duration, which can lead to variances in fiscal years in the case of a program that has not yet been extended.
For instance, the 2010 budget allocated $45 million over three years to the extension of the adaptation fund which finances the capital costs for construction and renovation work to make facilities more accessible to disabled persons. The fund expired on March 31, 2013. The 2013 Economic Action Plan proposes making the adaptation fund permanent and allocating $15 million a year to it.
The financial information included in the main estimates reflects the impact of the strategic review in 2011 and the budget 2012 reductions, which led to savings of $273.9 million and $40.5 million respectively in 2013-14. By 2014-15, the savings will reach $294 million from strategic review and $184 million from the budget 2012 spending review.
In budget 2011, the government reiterated its commitment to generate ongoing savings from operating efficiencies and productivity improvements by announcing the review of departmental spending. HRSDC did a thorough review, and the savings found in budget 2012 will ensure that we focus on core programs and services and streamline our internal operations.
At the same time, we are not reducing the quality of our services to Canadians. The implementation of the department's savings initiatives remains on track and savings targets will be met. These initiatives support the department's commitment to reduce government spending and provide greater value for taxpayers' money.
Savings initiatives from the deficit reduction action plan will result in the elimination of 1,885 full-time positions. HRSDC has a workforce management strategy in place to ensure all employees are treated according to the public service values and to help manage staffing changes over the next three years.
Since this is a more technical question, I believe it is important to point out that several changes were made to the format of the 2013-2014 main estimates in order to increase the amount of information provided and the overall usefulness of that publication. For instance, information on real expenditures in 2011-2012, and up-to-date estimates for 2012-2013 are provided to put the 2013-2014 figures in context.
In the case of Human Resources and Skills Development Canada, you will note that employment insurance benefits and Canada Pension Plan benefits are excluded from the department's main estimates. The Employment Insurance operations account and the Canada Pension Plan operations account are two specified purpose accounts. The Employment Insurance operations account is included in the consolidated data of the Government of Canada. The Canada Pension Plan is not incorporated into the government's financial statements since—