Human Resources Committee on Nov. 7th, 2013

[The Chair, Conservative, Phil McColeman]

Good afternoon everyone, and welcome.

This is meeting number 3 of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Today is Thursday, November 7, 2013.

Today we begin our examination of the subject matter of clauses 176 to 238 (divisions 5 and 6 of part 3) of Bill C-4, A second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures.

Before we begin today's meeting, I would briefly like to point out that Department of Labour officials are not here today to speak to the one clause pertaining to electronic administration of the Canada Labour Code found in division 6. We'll deal with all of the issues in division 6, as you wish, as a committee today, except this one clause. The reason is that we have employment and social development officials here who are prepared to answer any aspect of division 6, except the Canada Labour Code. However, at our next meeting, Labour department officials will be prepared to answer any questions on the one clause contained in division 6.

I would kindly ask that if you had prepared any questions on this topic you hold off your questions until the next meeting.

We are joined today by witnesses from the Department of Employment and Social Development Canada: Alexis Conrad, Atiq Rahman, and Catherine Allison. We're also joined by David Dendooven of the Privy Council Office.

Before we move into our presentations and rounds of questions, I'll point out per the meeting notice that our committee will recess at 5:15. I may take some liberties to recess a bit earlier than that, at 5:10, depending on how the discussions are going and what the committee chooses. Then we'll move into committee business because we have four such items to deal with today.

I know that the witnesses have prepared some remarks to open our discussions on Bill C-4. I believe Alexis is going to be doing the presentation.

We'll go to you, sir.

[Alexis Conrad, Director General, Skills and Employment Branch, Department of Human Resources and Skills Development]

Thank you, Mr. Chair.

First, I would to thank the committee for the opportunity to appear here today. I've had the opportunity to appear before the committee previously, and I appreciate your inviting me back.

You have already introduced my colleagues, but I will add their titles as well.

I'm joined by Catherine Allison, the director of strategic communications; Atiq Rahman, the director of policy and research, Canada student loans program; as well as David Dendooven, director of strategic policy, machinery of government, for the Privy Council Office.

If it pleases the committee, I will briefly introduce the proposed amendments to be discussed today. Following that, we will gladly answer any questions the committee may have.

Division 6 includes four components.

The first is the amendment to the Department of Human Resources and Skills Development Act to change the name of the department to the “Department of Employment and Social Development” and to reflect that change in the title of the minister and of the act.

The second is the amendment to the Salaries Act. These amendments reflect changes to the ministry announced on July 15, 2013. The first amendment updates the Salaries Act to reflect the legal title of the Minister of Employment and Social Development. The second amendment adds the new ministerial position “Minister of Infrastructure, Communities and Intergovernmental Affairs” to the Salaries Act.

In the third component are the amendments affecting the Canada student loans program. The Jobs, Growth and Long-term Prosperity Act, which was given royal assent in June 2012, amended the Department of Human Resources and Skills Development Act by replacing part 6 with provisions dealing with the electronic administration or enforcement of the Canada Pension Plan, the Old Age Security Act, and the Employment Insurance Act, in addition to any program that is supported by grants and contributions under section 7 of that act.

Further amending the act to expand the minister's authority to electronically administer or enforce the Canada student loans program is consistent with the economic action plan 2013's commitment to examine new ways to transform the Government of Canada's business to improve service and achieve efficiencies.

This amendment will modernize the delivery of the Canada student loans program through electronic enhancements to improve the process for students and their families and at the same time realize savings from increased efficiency. The enhancements include: electronic signatures; electronic verification of identity; and allowing the transfer of electronic documents. All of these are central to the Canada student loans program's electronic service delivery renewal.

Finally, the amendments related to the temporary foreign worker program will facilitate the ability to electronically administer and enforce the program, rather than relying on a cumbersome, paper-based process. Similar to the Canada student loans program, these amendments will expand the minister's authority to electronically administer and enforce the temporary foreign worker program and are consistent with the economic action plan 2013's commitment to examine new ways to transform the way the government does business in order to improve service and achieve efficiencies.

Specifically, the amendments will ensure that the temporary foreign worker program can continue to provide effective and efficient services to employers while ensuring the integrity of the labour market opinion process. These proposed amendments will allow the department, subject to regulations, to improve online delivery and could support other integrity measures being pursued by the department by providing the legal framework to obtain electronic signatures on labour market opinion applications; eliminating the need to retain and store paper-based copies of LMO applications; enabling secure online payment for LMO processing; and finally, improving the efficiency of the assessment process by preventing employers from submitting incomplete applications and by allowing employers to upload supporting documents throughout the assessment process.

Thank you, Mr. Chair. We would be happy to answer any questions the committee members may have.

[The Chair, Conservative, Phil McColeman]

Thank you for that very condensed presentation. That will give us extra time for questions, I'm sure.

In the first round, we'll start with Ms. Sims from the NDP.

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you very much.

I want to thank you for putting everything together so succinctly. I think our questions will go through just as succinctly, I hope.

I want to talk for a few minutes about the department's name change. I understand that the overall cost is being downplayed and is cited as something that would take place as part of routine maintenance and updates, but I have a hard time accepting this without asking a few more questions.

I'm actually looking for a number. How much will it cost to institute the name change? Do we have those figures?

[Catherine Allison, Director, Public Affairs and Stakeholder Branch, Department of Human Resources and Skills Development]

I can tell you approximately what we've spent to date, if that's helpful information to have. So far, we've spent approximately $42,000. That is really to address some of the immediate pieces that needed to be done, such as some building signage and some signage on vehicles, as well as things that are more public facing, including booths, kiosks, and backdrops, the things where you want the public to see what the department's name is.

In terms of going forward, I don't have figures that can speak to what's going forward, because basically, from here on in, updates are going to be made. As a sign needs to be replaced, the new name will go on it. As an office has an update, the update happens then. So the bulk of the costs is out there now. One of the really great things is that Service Canada remains “Service Canada”, so none of those signs ever need to be changed.

[Jinny Sims, NDP, Newton—North Delta, BC]

My understanding, from what you've said, is that you only really see the cost as $42,000 and any of the other costs will be regular costs. Yet I saw a figure being thrown around—I think from some budget documents—that the cost could be closer to half a million dollars. As you said, it's hard for you to predict where it could go.

We are going through some very difficult economic times with unemployment being what it is. People are really struggling to make ends meet. I am going to ask a very archaic question. How was the name change arrived at? Was this the minister's decision alone? Were there focus groups?

When I think of just the sheer coordination of such an endeavour, it seems hugely time consuming and I'm not clear as to the gains.

I'm also hearing that the name change is as a result of the Conservative government's need to better understand Canada's labour market, including why and where shortages exist. Once again, I'm really confused as to how a name change will get us that.

The Conservative government let $12 million of the funds earmarked for apprenticeship grants lapse. My colleagues at the public accounts committee have pointed out that the government sat on over $138 million in the budget, approved to support skills and job creation, rather than transferring it to organizations, cities, bands, and post-secondary institutions for skills training, essential skills, literacy, and crucial job experience.

To me, this name change seems like spending that is rather superfluous, whereas actually spending the targeted money would have demonstrated a commitment to employment and skills training.

It's hard for me to accept that a name change is the magic bullet, but I will move on.

When the department was called HRSDC, the Conservatives sat on 20% of the budget money they had allocated for grants to diverse organizations, including private sector and industry groups, which would have supported the competitiveness of Canadian workplaces through skills training, and left $8.2 million unused.

Do you imagine that under the new banner, ESDC, this pattern of non-spending will ensue, or is that all going to change suddenly?

[Catherine Allison]

I can really only speak to how the name change is being implemented.

[Jinny Sims, NDP, Newton—North Delta, BC]

I appreciate that.

[Catherine Allison]

The mandate of the department remains the mandate of the department. We remain committed to building a stronger, more competitive Canada and supporting Canadians in making choices that help them lead productive and rewarding lives.

We're managing the costs of the name change in a way that's as effective and as prudent as possible.

[Jinny Sims, NDP, Newton—North Delta, BC]

I'm going to move on to the electronic loan agreements for the Canada student loans program. First of all let me say that I'm always in favour of exploring measures to reduce paper waste. I think that's something we're all paying special attention to.

I was heartened to read that the department is considering our environment in this way. I also appreciate the cost-saving benefits of the new arrangement. Still, I cannot help but remember that a year ago an external hard drive went missing at HRSDC, and 583,000 people were affected by the resulting data privacy breach.

Can you walk me through the privacy parameters in place to protect people's data a bit more and how those parameters have improved since the data breach occurred last year?

[Atiq Rahman, Learning Branch, Department of Human Resources and Skills Development]

I can only speak to the changes that are being proposed here. To the extent that we will be collecting information from Canadians, any information that the Government of Canada will be collecting under these initiatives will be stored in a secure electronic database, only accessible by authorized individuals. We will make sure that the Privacy Act, the Access to Information Act and part 4 of the Human Resources and Skills Development Act are applied properly.

We can ensure that we will take the necessary steps. Beyond that, I am not in a position to address the other aspect of your question.

[The Chair, Conservative, Phil McColeman]

That's the end of your seven minutes.

We'll move on to the government side and Mr. Armstrong.

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

Thank you very much, Mr. Chair.

Thank you all for coming this afternoon. It's much appreciated.

I'm going to focus my questions on the Canada student loans program. Youth from across the country have been approaching the government and our officials to use more modern ways in the application process for this.

Could you walk us through what the current process is and how the changes we're making are going to improve that system?

[Atiq Rahman]

Thank you for your question.

These initiatives will modernize the delivery of the Canada student loans program and improve the process for CSLP clients.

Right now when students apply for their student loans and grants, they can do so online electronically, but before they receive their assistance they have to do a number of things. First they have to present themselves at a Canada Post outlet to have their identity verified. They have to go to a Canada Post outlet and show a document such as a driver's licence or passport, and that's how the identity verification is done right now.

That will no longer apply. They will not have to go to a Canada Post outlet; they will be able to do so electronically. That will be one improvement.

The second thing is that before they get their money, they have to print a student loan agreement. It's a loan, so they have to sign a loan agreement. They have to sign it physically and mail in the paper loan agreement, as of now.

That will not be the case any longer. They will be able to log into their account and sign the student loan agreement electronically there.

Those are the improvements we will be implementing under these initiatives.

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

What about the banking side? Isn't the money now going to be transferred electronically by direct deposit? Can you go into that a little bit?

[Atiq Rahman]

Right now actually, the majority of the Canada student loan clients receive their money electronically anyway. It's deposited into their account, and we'll continue to do that. More than 90% of our clients receive their money electronically deposited into their bank account now.

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

These changes you are making will be welcome news to our students across the country. Many times they are in different cities. They have moved from home, and many times it's their first time away. They may not even know where the local post office is. Sometimes they don't have the ID they need.

Do you think this will really streamline things and in fact make things a lot easier for them? Aren't you more used to communicating and executing things online anyway? I know most universities now have a totally online application process. Don't you think this brings an almost archaic system in line with today's ability to use the Internet and use electronic means of verification?

[Atiq Rahman]

Thank you very much for pointing that out.

Our clients are actually very tech savvy. Most of our clients are young, and it is also very true that in certain areas, in remote areas in particular, students often have difficulty finding a Canada Post outlet, to go there and verify their identities. We have heard that from time to time, and absolutely, these measures will make it easier for all our clients to get their money in their bank account on time so they can start school without having to worry about whether they are receiving their money on time or not.

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

Correct me if I'm wrong. This is administered by a third-party contractor. I believe that contract comes up sometime in the spring. If this legislation is passed before Christmas, does that give us enough time to put these requirements in when we tender that contract out?

[Atiq Rahman]

Exactly. That will be a very good situation for us. We would not actually incur any cost to implement these initiatives, because we will be going out for a tender for a new contract, and the request for proposals will be going out sometime next year. So if this legislation is passed, these initiatives would become part of the next contract.

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

So it makes sense that this would be attached to the budget implementation act, because it would save the government money in the long run. If we tried to implement this sometime in the spring, or tried to bring legislation at some later time, we would have to open that contract up again for it to take place almost immediately. Is that accurate?

[Atiq Rahman]

That is very true. The timing has been very good for us. Yes.

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

Again, with direct deposits, when did the Government of Canada start doing direct deposits for its Canada student loans, roughly?

[Atiq Rahman]

I'm not exactly sure about the timing. The Government of Canada started providing loans and grants directly in 2000. Before that, the money went through the banks. To the extent I know, when we introduced direct depositing in 2000, many of our clients did not want to receive money online, but more and more of our clients have been receiving their money via electronic direct deposit. Right now, as I said, it's a big majority of our clients.

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

I think it's almost at 90% who are getting direct deposits. Growing that system, as we climb and get closer to 100% have there been any issues, problems, or complaints about how that system is working?