Human Resources Committee on Feb. 28th, 2019

[The Chair, Liberal, Bryan May]

Good morning, everyone.

Pursuant to Standing Order 108(2), and the motion adopted by the committee on Thursday, January 31, 2019, the committee is resuming its study of the subject matter of the supplementary estimates (B), 2018-19: votes 1b, 5b and 10b under Department of Employment and Social Development.

We welcome several witnesses from the Department of Employment and Social Development. We have Mr. Graham Flack, deputy minister of employment and social development; Chantal Maheu, deputy minister of labour; Leslie MacLean, senior associate deputy minister of employment and social development, and chief operating officer for Service Canada; Benoît Robidoux, associate deputy minister of employment and social development; and Mark Perlman, chief financial officer and senior assistant deputy minister, chief financial officer branch.

We'll have opening remarks, I believe, from Mr. Flack.

You have 10 minutes, sir.

[Graham Flack, Deputy Minister, Employment and Social Development, Department of Employment and Social Development]

Thank you, Mr. Chairman.

I don't propose to take 10 minutes. I did want to thank you for the welcome to the committee, as a relatively new deputy minister for Employment and Social Development Canada.

I'd propose to very briefly walk you through the supplementary estimates that we have before you, which, as you know, see the department seeking a total of $181.5 million in voted appropriations.

The first item is $163.5 million to write off student debts for which all reasonable collection efforts have been exhausted. ESDC seeks this authority on an annual basis.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

The interpreters are saying it would be easier if they had the documents.

[The Chair, Liberal, Bryan May]

I'm sorry. I didn't get that.

We'll just pause for a moment as we pass out the speaking notes. Thank you for catching that.

It's a good thing you don't need all 10 minutes. If you wouldn't mind starting from the beginning, Mr. Flack, that would be great. Thank you.

[Graham Flack]

To make it simple, we did distribute a copy of our remarks

in English and in French, in case the committee members want to follow along.

I propose to briefly walk you through the supplementary estimates (B).

The department is seeking a total of $181.5 million in voted appropriations. First is a $163.5-million request to write off student debts for which all reasonable collection efforts have been exhausted. ESDC seeks this authority on an annual basis. This is due to various factors such as expiration of the allowed period to use legal means to collect, bankruptcy, small balances, extreme financial hardship, and compromise settlements.

The department is requesting the amount of $3.4 million for the youth employment strategy to help us continue to deliver placements under the Canada summer jobs program. These funds will support the screening of the high volume of applications received by the program to deliver quality work placements for youth in the summer of 2019.

On accessibility, there are two items to mention.

First, the department is requesting $5 million to increase support for the opportunities fund for persons with disabilities and to establish an accessibility secretariat to administer the Accessibility Canada Act.

Second, the department is requesting $1.1 million for the accessible Canada initiative through the opportunities fund for persons with disabilities.

This amount will serve to connect employers and persons with disabilities, and to help businesses develop effective recruitment and retention strategies.

The next item is the 2030 agenda for sustainable development. The department is requesting $7 million to support the establishment of a sustainable development goals unit and to support the creation of a new SDG funding program. The department is also including a transfer of $96,500 to the Department of Indigenous Services Canada to support policy and engagement activities related to indigenous housing and homelessness.

The final item is the request for $1.6 million to replace aging communications equipment by migrating to a government-wide call centre platform through Shared Services Canada.

We would be happy to take your questions, Mr. Chair.

[The Chair, Liberal, Bryan May]

Thank you very much, Mr. Flack.

Up first we have MP Barlow for six minutes.

[John Barlow, Foothills, CPC]

Thank you very much, Mr. Chair.

Thanks, Mr. Flack, for coming over, especially as you're relatively new to the post. I appreciate your making some time and bringing this information forward to us.

The first questions I would like to ask relate to the Canada summer jobs program.

You mentioned in your presentation some additional funds to help sift through the applications received through the program. Earlier this year, there was a move to extend the deadline on applications. Is this funding to address that?

We've had some concerns from constituents that the application process is more onerous this year and that it is more difficult to get through. Have you had that same feedback? Is this going to address the application process itself, or is it just a means to address the volume of applications that are coming through the department?

[Graham Flack]

Leslie is going to walk you through it, but one of the key changes from last year is that we are looking to ensure that employers are providing evidence of the quality of work employment. That includes mentoring for students as well as a safe work environment.

I can see from an employer perspective how they would say it is more onerous in the sense that they are now providing more information about that to be able to demonstrate they're doing that. That does create a corresponding pressure on us to be able to review that.

Leslie has really been leading the work on this, and if it's okay, I will turn to her.

[John Barlow]

Certainly.

[Leslie MacLean, Senior Associate Deputy Minister of Employment and Social Development and Chief Operating Officer for Service Canada, Department of Employment and Social Development]

Thank you, Graham.

Thank you for the question, Mr. Chair.

Indeed, the application this year does require more demonstration from the employer around the quality of the work experience. For example, we ask employers to not just tell us that there's a mentoring plan but to explain what the mentoring plan is for the student, and what the tools are that they have in place to ensure that the work environment is free of harassment and discrimination. Where there are issues around things like hazardous substances, potentially, in the workplace, again, the employer is demonstrating that to us, and that is around the focus on the quality at work description.

Those MPs who have provided us helpful feedback on local priorities, or indeed, upcoming potential projects that could be funded, would note that this year—and this is all transparent in the application—it makes it clear that priority is being given for quality jobs. The learning opportunities and the salary being offered to the student are those sorts of factors that are considered.

The second principal criterion.... Again, the points are clear in the application form itself around respecting national priorities. There is everything from employment opportunities in the skilled trades to employment opportunities where the youth would be supporting seniors, or they're from under-represented groups.

That extra funding—the $3.4 million you referenced—is absolutely to help us deal with the increasing volume of applications, but also, if we've asked employers to give us proof of a mentoring plan, we need to look at that and not simply pass lightly over the work that we're asking employers to do.

[John Barlow]

Thank you very much for that explanation.

Obviously, last year we had a lot of concerns with the attestation of the Canada summer jobs application process, and I understand that the Liberal government has had to back down from that. They realized that they had made a mistake with that. I'm hoping that, with the changes to the Canada summer jobs program, it will be very clear what is asked of people who are applying.

The minister also mentioned on Tuesday that the number of jobs doubled through the new program; however, the concern that we have is that those numbers may a bit skewed by the fact that some of those were 12-week jobs where one position became two positions for six weeks. It was easily manipulated to make it look like we had a lot of new jobs, but a lot of those jobs were of much shorter duration than they would have been previously.

You may not have this information on hand, but Mr. Flack, do you have any numbers to show what the difference was and how many of those jobs became two jobs over six weeks compared to one job over 12?

[Leslie MacLean]

I'm happy to speak to the detail of that.

[Graham Flack]

Go ahead.

[Leslie MacLean]

We have been tracking for the last few years the number of jobs that Service Canada would have recommended to MPs for input. One of the things that affects our ability to have longer job durations is that the minimum wage goes up in provinces, and obviously, employers need to respect minimum wages. That's one of the tests for responding to local laws.

In terms of the program, what Service Canada recommended to MPs was a range from an eight-week to a 12-week duration. We just got the data this morning. After MP input and review, there was a very slight increase in that, to 8.1 weeks on average. Our recommendations had been eight weeks' duration, and then 8.1.

Obviously, that's something we're always looking at in terms of quality jobs for youth. We try to give as many jobs to as many youth as possible, but we also have to make sure they are of a reasonable duration.

One thing I could point out if it's helpful for the committee, Mr. Chair, is that we surveyed employers for the 2018 program for the first time. We found that almost 80% of them were either satisfied or very satisfied with the program. Thirty per cent of them chose to extend the student beyond the period we had been able to fund through the program.

That speaks very highly to the objective of trying to provide quality work experiences for last year's students, and this year—as the minister would have noted Tuesday—for youth between the ages of 15 and 30.

[The Chair, Liberal, Bryan May]

Thank you very much.

[John Barlow]

Can I ask if the witness could table that information as part of the study?

[The Chair, Liberal, Bryan May]

Of course.

MP Sangha, please, for six minutes.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Thank you very much for giving this information today and educating us.

You have asked for $5 million for the new bill, which is Bill C-81, an act to ensure a barrier-free Canada, and $1.1 million for the accessible Canada initiative through the opportunities fund for persons with disabilities. The $5 million is for the new accessibility secretariat under the new act.

Can you give the committee information regarding what the $5 million will be going towards for the secretariat? What is that, in the broad sense?

[Chantal Maheu, Deputy Minister, Labour, Department of Employment and Social Development]

As you have pointed out, we are seeking money for the accessibility secretariat and some money for the opportunities fund. This funding now will be in support of the accessibility act, but it doesn't require passage of the legislation in terms of being able to proceed.

The accessibility secretariat will be permanently funded within the department of ESDC, and its role will be to maintain the implementation and ongoing administration of the legislation. Its staff will be working on the regulation and general advancement of all the initiatives that support the legislation. That funding, which is about $5 million as you mentioned, will support the secretariat.

In addition to that, there's some funding that was sought through the estimates for the opportunities fund for persons with disabilities. That program supports and assists people with disabilities in finding jobs, developing a skill set and reaching out to employers. The specific funding sought in the estimates is to support employers and assist them in recruiting and identifying persons with disabilities, and raising awareness for employers in terms of how they could develop workplaces that are welcoming for persons with disabilities.

There will be about $200,000 in vote 1 for the operation, and $1.1 million in vote 5 for Gs and Cs that will be distributed to service providers who will pursue these objectives.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Do you think the $5 million you are asking for under the accessible Canada act will also include pay and other allowances for the employees who will be working in the establishment?

[Chantal Maheu]

If you mean the establishment of the organization under the authority act, no. That will be funded from the $290 million that was announced for the accessibility act, but that will come later, once the legislation has received royal assent. Once the legislation is there, the department will come and seek funding to establish the different machinery—the standards organization, the accessibility commissioner and the accessibility officer. That will come later on. This is really for the secretariat within the department, to support the activities that can be started before the legislation actually comes into force and will continue after its coming into force.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

What will this amount be used for? Is $5 million only for building the secretariat? I'm not sure about it.

Would you explain it, please?

[Chantal Maheu]

It will engage in a number of activities related to accessibility, starting the work on the regulations and starting the work in terms of outreach to stakeholders in identifying the standards that should be developed first for accessibility. That work prepares the groundwork for once the legislation has received royal assent. Then we are equipped to move with the machinery changes that I mentioned earlier. It's doing the preparatory work so that, once the legislation receives royal asset, we're ready to move very quickly.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Thank you very much.

I have another question about the student loans. ESDC is demanding $181.5 million and $163.5 million to write off the student loans. You mention the conditions for writeoff: expiration of the allowed period to use legal means to collect; bankruptcy; small balances; extreme financial hardship; and the last is compromise settlements.

What kind of feedback do you have from students or employees regarding this program?

[Graham Flack]

In terms specifically of the writeoff, the situation around that and how that's changed over time, the committee may find it helpful to have a historical trend line on what that looks like.

The best measure of student default that we use is a default rate after three years. That's a kind of standard tracking rate we use. That rate has declined almost like clockwork by about 1% a year since 2003-04, when it was at 19%. The rate this year, as we're asking for the writeoff, is the lowest rate we've had, which is 9.0%, but it's been a relatively straight decline year after year.

That's a combination of factors over that time that includes more flexibility for students in terms of repayment. As you may be aware, students do not have to start repaying until they start earning an income of $25,000. If they run into trouble, there are flexibilities provided to them in terms of when they start the payments. It also reflects more effective collection efforts on the other end so that we can reduce the amount of the writeoff. I would say the trend line is moving in the right direction.

I did ask for a bit of an international comparator, because that's sometimes helpful. It's hard to do apples to apples. The U.S. system is the closest we came to, and their rate in comparison to our 9.0% rate is about 10.8% or 10.9%. The trend line has been good on this, but it reflects both sides.