Good afternoon, Mr. Chair, and honourable members of Parliament.
My name is Daniel MacDonald. I am the chief of Canada health transfer/Canada social transfer and northern policy group in the federal-provincial relations division at the Department of Finance.
I am here today to answer any technical questions you may have related to the changes to the Federal-Provincial Fiscal Arrangements Act, under part 4, division 5 of Bill C-43 as they relate to the operation of the Canada social transfer itself.
The Canada Social Transfer (CST) is a federal block transfer to all provinces and territories in support of three broad areas of social policy. The first is post-secondary education, the second is programs for children, and the third is social assistance and other social programs.
In 2014-15 the total CST transferred to all provinces and territories is almost $12.6 billion. It has grown at 3% annually since 2008-09 and will continue to grow at 3% annually at least until 2024 when the next review of the CST legislation will take place.
These funds are allocated to provinces on an equal per capita basis so that each province receives its population's share of the total amount of the transfer. With respect to accountability, provincial and territorial governments are fully responsible for the design and delivery of programs in the areas supported by the CST, and are accountable to the residents and legislatures, not the federal government, for outcomes achieved and dollars spent.
Starting in 2007-08, the federal government enhanced the transparency of its support by notionally allocating the total transfer across each of the three priority areas: post-secondary education, social programs, and children's programs. These notional allocations are not binding, explicitly recognizing provincial and territorial government flexibility to invest in these areas according to their own priorities.
With respect to conditionality, the Federal-Provincial Fiscal Arrangements Act currently states that, in order to receive their full CST funding, provinces or territories must not impose minimum residency requirements for social assistance.
If a province violates the minimum residency prohibition stated in the FPFAA for the CST, the act requires the Minister of Employment and Social Development to engage the province in the withholding process described in statute. If the minister concludes that the province is not in compliance, the minister must then refer the matter to the Governor in Council who may direct that the province's CST amount be reduced by whatever amount it considers appropriate.
Should this proposal pass as part of Bill C-43, provinces will able to impose a minimum residency requirement on certain foreign nationals, as described by my colleague earlier, without triggering the statutory withholding process for the CST.
No other elements of the CST will be affected. In particular, the total transfer amount and the provincial and territorial equal per capita cash allocations will be unaffected if the provinces and territories impose minimum residency requirements consistent with the current proposal. There is no link between the legislated CST amount and allocation and the actual social assistance expenditures of a province or territory.
Thank you, and we look forward to any questions you may have.
But first, I will pass to my colleague Caitlin Imrie.