Human Resources Committee on Nov. 27th, 2014

[The Chair, Conservative, Phil McColeman]

Good morning, ladies and gentlemen, and welcome.

This is meeting number 38 of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Today is Thursday, November 27, 2014. We are here for our study of the supplementary estimates (B) 2014-15, votes 1b and 5b, under Human Resources and Skills Development.

We are very pleased to have the Honourable Jason Kenney, Minister of Employment and Social Development, joining us for our study. Thank you, Minister, for being here.

Along with Minister Kenney, from the Department of Employment and Social Development, we have Ms. Gina Wilson, the associate deputy minister. Welcome.

We have Ms. Louise Levonian, senior associate deputy minister and chief operating officer of Service Canada. Welcome.

We have Mr. Alain Séguin, the chief financial officer, and Benoît Long, the senior assistant deputy minister, processing and payment services branch. Thank you for being here.

Now we'll pass the floor over to you, minister, for your presentation.

[Jason Kenney, Conservative, Minister of Employment and Social Development]

Thank you very much, Chairman.

Colleagues, it's good to see you.

You've asked me to come here to discuss our supplementary estimates, which are before you. I'll try to do so briefly.

I think you have received a copy of my presentation, so I will not read the entire document. I would rather give you more time to ask questions.

I just want to point out a couple of the highlights in the supplementary estimates (B).

We're requesting $4.6 million in funding for this fiscal year and $5.2 million in each of the two following years to connect Canadians with disabilities with available jobs, which I know is an issue very close to your heart in particular, Mr. Chairman. We're doing that partly through our opportunities fund for persons with disabilities to support the Ready, Willing, and Able initiative, which is one of the great legacy projects of our late colleague, the Hon. Jim Flaherty. This will support efforts by the Canadian Association for Community Living to help folks with intellectual disabilities to put their talent to work.

In addition, there is funding of $2.6 million for each of the next two fiscal years, and additional funding after that, for CommunityWorks, which is an effort to help youngsters with autism disorders get trained and connected to jobs, which I think is another wonderful initiative. Again that's a statutory grant that was announced in this year's budget.

There's additional funding in the range of $5 million for the New Horizons program. As you all know, you have seniors centres in your constituencies that have benefited from modest infrastructure upgrades, and there have been some projects in community centres for seniors all across the country.

We're requesting $6.8 million for web renewal. Increasingly we're trying to provide better and faster service online. We're behind the curve compared to the private sector in that regard, but we're catching up. This will help us provide better service online.

Of course there is some additional funding as a result of the overhaul of the temporary foreign workers program that I announced in June. I'm happy of course to take questions about that.

A large chunk of this is for the new labour market information surveys. Some of my colleagues in the opposition have quite correctly pointed out that we have inadequate labour market information. One of the ways in which we are addressing that is through the new quarterly job vacancy survey, so we have a better idea of what jobs are going unfilled in the economy with a much larger sample, as well as the new annual national wage survey, which will get us a better read in local areas of what the real wages are. That will help to inform everyone on labour market policies, whether they're colleges, employers, unions, or governments.

I'll just say two other general things. I'm really pleased to report to you, colleagues...because I've been in Parliament long enough to know that often when ministers appear on supplementary estimates there are few, if any, questions on the actual supplementary estimates. I know that's shocking, but it's been known to happen. So let me say just a couple of general things that are not in the estimates.

First, I am very pleased to report to you that on Friday I had a very successful meeting with the Forum of Labour Market Ministers. For some reason this group did not meet for about four years, but we've now met three times in one year. There is a real sense of focused consensus from left to right, east to west, and north to south on the skills agenda, whether it's on the agreement we got to on the Canada job grant that's now being implemented, the retooling of the labour market development agreements, the renewal of the targeted initiative for older workers, the new agreements we've signed on the labour market agreements for persons with disabilities to focus more on employment as opposed to just general services, the ambitious work being directed by us towards the Canadian Council of Directors of Apprenticeship to harmonize apprenticeship systems across the country and facilitate labour mobility, the great work we're funding by the way of the Council of Atlantic Premiers on apprenticeship harmonization, or the good work being done in the three western-most provinces through the New West initiative.

We are promoting information about labour mobility and reciprocal recognition of professional credentials through chapter 7 of the Agreement on Internal Trade in an effort to reboot our work on faster and streamlined recognition of foreign credentials. We are encouraging the provinces to retool their post-secondary education and vocational training systems to learn some of the lessons from the systems that work so well in Europe: recreating vocational high schools; creating this notion of the parity of esteem between trades and professions, colleges and universities; encouraging apprenticeship programs. We are having, to some extent, PSC dollars follow actual labour market outcomes. All of this is complementary to the reforms in the immigration system.

I could go on, but the point is I really am excited to see from labour, employers, provinces, and the federal government a growing clarity and a focus on the big skills agenda challenge that we're facing.

Finally, on the Social Security Tribunal, I know this was an item of considerable and understandable concern by the committee when the chairman appeared recently. The good news is that we have a working inventory and effectively no backlog of employment insurance appeals to the Social Security Tribunal, largely because of the excellent work done by officials at ESDC—for which I can take no credit—when they developed the reconsideration process, which is actually just so smart.

We actually have officials picking up the phone and calling people if they have asked for reconsideration of their EI refusal. Often it's just working out little, simple, technical things: they didn't fill out part of the form or they need to submit a document. This is a much friendlier, non-adversarial, faster process to fix some of those EI refusals where appropriate. That has massively reduced the kind of adversarial, quasi-judicial, slower-moving appeals process at the Social Security Tribunal, formerly the EI board of referees. That's good news. It means that we've been able to reallocate about a dozen decision-makers at the SST from the EI side to the Canada pension plan side.

However, it is true that when I was first briefed as minister, in July of last year, on the Social Security Tribunal, I was dismayed to learn that there was a backlog of several thousand cases in the income security division, which had been inherited from the Pension Appeals Board. I am told that the Pension Appeals Board did not share information on their backlog of inventory with HRSDC at the time that we transitioned to the Social Security Tribunal.

[Pursuant to a motion adopted by the committee on June 9, 2015, correspondence from Hon. Jason Kenney to Hon. Mr. Justice Douglas Rutherford has been appended to the Evidence for this meeting. See appendix -- Letter to Jason Kenney from Douglas Rutherford December 16 2014.]

This was an unexpected legacy backlog, and ever since I was appointed I have been working very intensively with the chairman of the tribunal on fixing it. As I said, we have reallocated 12 decision-makers from the EI side to the CPP side, and as of a cabinet meeting an hour ago, we've appointed 22 part-time new decision-makers to the income security division of the tribunal, almost all of whom worked on the Pension Appeals Board. So they have relevant experience, and they don't have to be trained and can get to work more quickly.

We have legislation, as you know, that you've considered to lift the statutory cap on the number of decision-makers at the tribunal. The chairman of the tribunal has contracted a consulting firm to do a productivity model so we can know what we can expect in terms of productivity from the decision-makers, and I'm expecting from her a further action plan that I anticipate will also include a request for additional decision-makers.

I'll just close with this. When I was at Immigration Canada I inherited an immigration system that had an overall backlog of nearly a million people who had been waiting for up to eight years in various programs. We had 60,000 people waiting for decisions by the IRB on their refugee claims. I'm proud to tell you that now those backlogs are almost all gone. So I have a bit of experience in working with departments and quasi-judicial bodies to address legacy backlogs, and you have my commitment to do this with respect to the unacceptably large backlog at the income security division of the Social Security Tribunal.

Thank you, Mr. Chair.

I am ready to answer any questions you may have.

[The Chair, Conservative, Phil McColeman]

Thank you, Minister. You're right on time.

We'll move to our first round of questions. These are seven-minute rounds.

We'll go to Madam Sims.

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

Minister, I really appreciate that you're able to be with us this morning. My only regret is that it's for only an hour, but I understand you had something previously scheduled for the second hour.

I have a series of questions for you. Most of them pertain to Service Canada. I realize that you're not going to have these answers at the tip of your tongue, though I'll be pleasantly surprised if you do. I'll just read out the questions. If you don't have the answers, I would look forward to having them tabled at the committee as soon as possible.

What was the funding for Service Canada? How much of those funds came from the EI operating account and how much came from general revenues? What is the funding for EI processing at Service Canada? How much of those funds came from the EI operating account and how much came from general revenues? How many full-time employees were working at Service Canada? How many were assigned to processing EI claims?

As I said, these are for very specific numbers. If you don't have them on you, then I'm hoping that you'll be able to table them as soon as possible. I'm looking for them from the year 2006 to the present, year by year.

[Jason Kenney, Conservative, Calgary Southeast, AB]

Mr. Chairman, the only thing I can do is undertake to provide Ms. Sims, through you, with those numbers as soon as possible, maybe even by the end of this meeting. I can ask my people.

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

That would be great.

[Jason Kenney, Conservative, Calgary Southeast, AB]

We have thousands of other officials somewhere else who can get those numbers, I think, in the next hour.

[Voices]

Oh, oh!

[Jason Kenney, Conservative, Calgary Southeast, AB]

Honestly, if you want me to give you these numbers, give me a heads-up, even the night before, and I'll come to you with the figures.

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

I'm sorry. No, no, I really appreciate it.

Minister, when we met with Food Banks Canada a few weeks ago, they provided the shocking statistic that 49% of Canadians between the ages of 16 and 65 do not have the literacy capacity necessary to effectively learn the new job skills. Nearly half of Canadians operate with level one or level two literacy.

Minister, is this not a huge problem?

[Jason Kenney, Conservative, Calgary Southeast, AB]

Of course it's a problem whenever a Canadian doesn't have the essential skills to go into the workforce. This is why we invest enormously in essential skills through the billions of dollars the federal government spends on skills development programs. In 2006 we created the labour market agreement, now the Canada job fund, which focuses in part on essential skills for under-represented groups in the labour force.

I think this would be most relevant to our aboriginal skills development programming, the ASETS and SPF programs. ASETS in particular focuses on essential skills for unemployed aboriginal Canadians.

So we do have a lot of programming to address that challenge.

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

Thank you.

According to the public accounts for 2012-13, your government only spent 6%, or $450,000, of the available budget of $7.6 million in grants to voluntary sector organizations for adult literacy and essential skills. Given the numbers I just cited and the fact that this type of basic skills training is clearly needed, help me understand why this money went unspent. Why aren't you being transparent with Canadians about how much went unspent and why?

[Jason Kenney, Conservative, Calgary Southeast, AB]

I understand that we've allocated for the current fiscal year some $27 million toward adult literacy and essential skills. I think it's important to focus not just on the dollar figures but the results. One of the concerns we've had about some of the legacy program funding on literacy from my department is that it has been focused on administrative overhead, personnel, consultations, conferences, and research, but not on actually teaching people how to read. I think what we're trying to do is focus on more concrete outcomes.

Quite frankly, I don't think it helps to get people into the workforce that we just constantly focus our funding on administrative overhead for non-profit organizations. We encourage those community-based organizations to raise those funds locally. We want to focus our dollars on actual programs.

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

Minister, what will happen to Canada job fund money if interest from workers and employers just isn't there for that kind of training? Do the provinces then lose their funding? If the answer is yes, then what is your other solution?

[Jason Kenney, Conservative, Calgary Southeast, AB]

There is a carry-forward provision. The provinces raised that with me during the negotiations. Consequently, we included in our Canada job fund agreements a carry-forward provision so that if they do lapse in a given year, they can reprofile it to the future year. I believe it's 5%, but I stand to be corrected.

The good news is that I just met with my provincial counterparts on Friday, and they informed me that so far there's very strong uptake on the job grant.

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

Thank you.

[Jason Kenney, Conservative, Calgary Southeast, AB]

Can I just point out one thing? It's phased in gradually over time, by increments of 25%. The first year, actually a relatively modest amount is allocated to the job grant.

We've also agreed on a framework for a comprehensive evaluation of the job grant after the second year. One of things we'll obviously be looking at is take-up.

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

Specifically, Minister, how many and which provinces have now delivered a Canada job grant? How much have employers invested so far in training and what qualifies as in-kind contributions for training for small businesses?

[Jason Kenney, Conservative, Calgary Southeast, AB]

All 13 provinces and territories have signed final agreements committing to deliver the job grant in their jurisdictions. I believe that eight of the jurisdictions have opened their systems to accept applications. Quebec is a bracket in this because they will not be delivering the job grant given the different nature of their system.

The first grant was approved in Manitoba about six weeks ago. So it's frankly too early to give you statistical data on how much employers are contributing. But I can tell you in the case of the first recipient, it was a mid-sized IT company in Manitoba that received a grant to train 20 workers in a very expensive IT certification program. I asked the business owner if he would have done that anyway. He said he's putting in a third of the cost and he said, no, he could maybe have afforded to hire four or five of these people and train them up for certification, but because of the job grant he was able to do 20 and this will help massively to expand his business.

And Ms. Sims, you'll be pleased to know it was an NDP government in Manitoba that approved that first grant.

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

Thank you.

[The Chair, Conservative, Phil McColeman]

Thank you.

Now we move on to Mrs. McLeod for seven minutes.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Minister, and thank you also to your officials.

As I look at these issues that are specific to the supplementary estimates, I certainly hope that we're going to have support. I think what we have here are important programs in many areas, such as Ready, Willing and Able and CommunityWorks Canada.

I have just a quick observation. I think in all of our ridings, we have met with the organizations that perhaps deliver some of these programs. I have one example that stands out in my mind, of course. It was a small rural community and they now have someone who's been gainfully employed for over six years who had successfully gone through the program, someone with an intellectual disability. I hope we will be looking at widespread support as we move toward these supplementary estimates.

I think I'm going to go a little more specifically because I think there's been some misinformation out there around the temporary foreign worker program. There was an article in The Globe that talked about a number of different issues around data inaccuracies. I believe the opposition has raised this in question period. I wonder if you could speak to this. I understand that the department has done a manual review of the data. Can you tell us about this manual review and the results? I think it's important. The opposition claimed our overhaul was based on bad data, but I think we need to actually spend some time setting that record straight.

[Jason Kenney, Conservative, Calgary Southeast, AB]

Thank you very much, Cathy, and I appreciate the question.

You're right. Through an access to information release that was analyzed by The Globe and Mail, they found some discrepancies between the reported number of temporary foreign workers on particular work sites and the actual number. We've done a very close analysis.

In fact we've gone back and looked at every single file exhaustively and we found that my department made errors in 105 cases. That was 4.1%. Those errors were because 21 employers should no longer be on the list as they no longer have temporary foreign workers. They did in the past, but no longer do. Seventeen employers on the list should have been in the 30% to 50% range of TFWs rather than over 50%. Ten employers should be below 30%. Fifty-seven employers were unaffected by the input errors and should remain on the original list as they appear.

In most cases the errors were actually made by the employers who submitted inaccurate information on their online application that went straight into our system. I can tell you that the incidence of error in our department was very low. It was fractional. We've learned from that to make sure that is not repeated and we will now be verifying the information submitted by employers to make sure that we don't accept erroneous information from them.

Overall I can tell you that these minor administrative errors in 4% of cases do not affect the overall assessment that we made of the program. I want to completely allay anyone's concerns that there was a huge lack of integrity in the data. That is not accurate. The errors were very minor in nature in a very small number of cases, 4% on our part. In any event grosso modo the analysis that we did about the percentage of TFWs and work sites remains completely as it was when we presented it in June.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

A big part of the portfolio is the EI piece. We know that many workers lose a job sometimes and often through no fault of their own. You talked a little bit in your opening comments about the new process around the EI reconsideration. I'm wondering if you can spend a bit more time elaborating on that particular piece of what the department is now doing.

[Jason Kenney, Conservative, Calgary Southeast, AB]

Sure.

At roughly the same time the Social Security Tribunal was created, the department on it's own volition decided quite commendably to launch a more proactive and high-touch kind of outreach to EI applicants who had been refused and who had requested a reconsideration.

I want to give credit to a very distinguished, now unfortunately retired, public servant, Karen Jackson, who was our associate deputy minister for operations at HRSDC. She and her team in Service Canada led this initiative, which was hugely successful. In fact when they first briefed me on it they were quite nervous about how good the numbers were. They thought it couldn't possibly continue, but they were seeing a 90% reduction in the number of appeals to the SST versus the number of appeals that used to go to the EI board of referees.

What was happening was their officials were picking up the phone and calling the people asking for a reconsideration and working through the file with them. In most cases these are not always black and white, a case of fraud or a case of someone who has been unfairly denied. Often someone has submitted the wrong form or inadequate documentary evidence to support the release from employment or the record of employment. Often the Service Canada official can, with the proactive reconsideration process, sort out those document or clerical issues with the person or tell the person, “I'm sorry, but in the region you're in you have to work an extra 10 days to qualify,” or “This is not adequate evidence that you've been released from your job”.

As a result we see a much faster process. I believe this is being done in less than six weeks, and certainly less than three months, in almost every instance, as opposed to the old EI board of referees model, which took months. It was six months on average.

We think that this kind of client-based, non-adversarial, faster approach is very—but if they still don't like the answer they get, if the officer on the reconsideration tells them, “I'm sorry, but you still don't qualify”, they have every right without any prejudice to make a formal application for an appeal to the tribunal. The number of those formal appeals is down by 90%, which means the clients themselves believe that they're getting fair decisions at the reconsideration stage and good service.