Public Accounts Committee on Dec. 1st, 2020

[Judith Robertson]

Specifically, we are not the ones supplying information on the requirements of the Canada student loans program. That would be to the program itself. However, we do have more general information on what to do when you get in trouble and how you can access services to provide assistance such as credit counselling, and so on, in order to find a path to a better future.

[Peter Kent, Conservative, Thornhill, ON]

Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much.

Thank you, Mr. Kent.

We will move on to Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Chair. It's great to be here this morning.

I have a first quick question for the CRA commissioner.

In terms of the opening remarks with regard to the specific audit recommendation, ESDC is working with the CRA to establish an information-sharing agreement, expected by the spring of 2021. Obviously, we know that COVID-19 has put a large burden and asked a lot from the CRA and its amazing employees, and I just want to confirm that it is still on track for the spring of 2021 and that an appropriate work plan has been developed and is still there.

[Bob Hamilton]

Thank you, Madam Chair. I'll take a stab at that, and my ESDC colleagues might want to add to it.

Yes, we have been in train of trying to get this information sharing done. As far as I'm aware, we're still on track for March. As I think Graham indicated earlier, COVID has changed the timing of some things and we've had to be adaptable and flexible, but my understanding is that we are on track.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you. That's perfect.

I think this question will go to ESDC, on the credit bureau situation, with regard to some borrowers having their credit report or credit number impacted. At first glance, for these individuals going through university, taking on some debt potentially in the form of these loans and then finding themselves in a very difficult situation, we know how important the credit score is when you go to the bank and purchase a house, a car, and so forth. How are we looking at that from a holistic point of view? How is ESDC looking at the credit aspect of it?

Anybody else can chime in on looking at that, and also from the Financial Consumer Agency standpoint in terms of the education process.

We don't want to penalize youth right off the bat, coming out of university or college and finding themselves in a difficult position.

[Graham Flack]

Maybe I can start.

I think the core principle behind the program is that those individuals who have the means to be able to pay should repay according to the schedule that was laid out, and those individuals who suffer an economic event or a health event that prevents them from being able to do so, or has a growing family that makes their income at a level where they would be spending more than 20% of their income on the repayments, they should not be required to be repaying. The way that we get at the credit rating fundamentally is by relieving the burden for those who don't have the ability to pay. However, for those who do have the ability to pay, when they fail to make a payment, each time that happens, that's reported through a third party provider to the credit agencies and it stays on their record for up to six years until such time as they repay.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Is there any further comment from anyone, or can I move on to the next question?

There's no comment.

Ms. Hogan, I'm speaking in reference to the Canada learning bond. The one thing I gleaned from the Auditor General's comments at the beginning was that 62% of eligible children did not receive it as of 2018, because no account had been opened for them. I think you might have alluded to this earlier, and I apologize if I missed it, but is there any consideration of adopting what's called a “negative option billing” here, where the folks who really need the Canada learning bond are almost automatically enrolled in the program so we can assist those individuals in getting an education for their children?

[Graham Flack]

That would indeed be an option. It would ultimately be for government to decide if it wanted to pursue it, but it's certainly one of the things we've looked at.

We have significantly increased the percentage of people who have opened the accounts, but we think there's going to be an upper limit to how far that goes. The negative option would be a way to not penalize a child if their parents had not decided to open this free account. However, that would be a policy decision for a government to take.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

This last number was from 2018, Mr. Flack. Do we have an updated number as of, say, 2020 or 2019?

[Graham Flack]

Atiq, I don't think we do yet, do we?

[Atiq Rahman]

No, that's the last number we have so far.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

This is my last question, Madam Chair, and this probably will take me to my time.

In reading the Auditor General's spring 2020 report on page 15, the recommendation at paragraph 2.48.... You know, we have a program in place. The program is there to encourage and ensure that individuals have access to education. One barometer for measuring that is looking at the participation rate and fundamentally asking this question: Does this program increase the participation rate of youth accessing post-secondary education? We know how important that is for human capital development, for an economy to move forward.

There is a department response to that.

Mr. Flack, could you comment or elaborate on this? There were departmental plans to start in-depth CESP evaluations in the spring of 2020 to assess the interaction of the CESP. I look forward to seeing this report—I believe it's for the spring of 2020—when it is done.

Could you comment on that? I think this is incredibly important.

[The Chair, Conservative, Kelly Block]

I'm sorry, Mr. Flack. I'm going to ask you to keep your answer very short, as Mr. Sorbara was correct. His question did take the rest of his time.

[Graham Flack]

We're thrilled to now have the datasets merged after three years of hard work, and we're looking forward to putting that to work and being able to get that more granular conclusion that you're seeking.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Flack.

We will now go to Mr. Blanchette-Joncas.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Madam Chair.

My next questions go to Ms. Robertson, from the Financial Consumer Agency of Canada.

Ms. Robertson, in your opening statement, you mentioned that the role of your agency is mainly to strengthen the financial literacy of Canadians through programs, tools and resources to help consumers make informed financial decisions. You believe that informed consumers are better protected consumers. I agree with you.

However, according to the conclusions in the report, 44% of the people who take out loans do not know that interest will start to accumulate as soon as they finish their studies. That is almost every second person. It is quite incredible, actually, that so many people who have taken out loans do not know that, even in the final year of their studies.

What do you feel about this observation that the Auditor General made?

[Judith Robertson]

Thank you for that question.

I agree that it is....

First, let me correct or add a nuance. Our mandate is to protect consumers, and we do it in two ways. Financial literacy is one way. It is a major focus of ours. Nobody knows better than we do the challenge of delivering an effective financial literacy program and actually achieving the outcomes that you say.

I would say that my reaction to the Auditor General's report is that it is a fair assessment and that it points us in the direction of the work that needs to be done. It's, quite honestly, not an unusual outcome at this stage, but we are finding over time, as I say, through our research and experimentation, more and more effective ways to try to improve those results.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you for those clarifications, Ms. Robertson.

We sense the goodwill on your side in terms of the recommendations and about the work that remains to be done and the improvements that need to be made. In November 2019, a virtual repayment counsellor service was launched online. The service provided the people who had entered into loans, the borrowers, that is, with the information they needed on their student loans, including, for example, the repayment options likely to help them.

Since that virtual service was launched, have you gathered any data about its use? Have any adjustments been made? Can you tell us more about it?

[Judith Robertson]

No, I'm sorry, I don't have that information, because that is a system run by ESDC. It's not information that comes back to us, so I cannot provide you with information on this.

[Graham Flack]

Atiq, do you have early data on the results of the virtual assistant?

[Atiq Rahman]

We have the number of page views, the number of students visiting different pages that we have launched. Those numbers we have, yes. I don't have the information with me right now, but we have those numbers.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Would it be possible to have a written reply from the department, please? We want to make sure that it is working well. If we could help you, and therefore help the students and the people with loans to obtain information, it would be very worthwhile.

Madam Commissioner, I was looking at the recommendations, particularly recommendation 2.40. It asks you to “make available on the web portal of the National Student Loan Service Centre all the financial information needed…” I understand that you do not have all the data for that, but can you send us the information that would tell us what stage you have reached in the project to provide “access to education materials for inclusion on the web portal” of the department, and to what extent you have provided the department with “advice related to mandatory training for students receiving direct loans from the Canada Student Loans Program”?

[Judith Robertson]

Concerning what is currently on the portal, we're very pleased with the results. We were consulted and provided direct feedback not just on the content but also on the form, because as we know, how and when and what colour—even where it is on the screen—makes a difference to whether it is accessible and meaningful.

As for the proposal or suggestion to require mandatory training, we are open and eager to collaborate again with ESDC on this. I think our focus would be on trying to develop ways of ensuring effective training. Making it mandatory may be part of it or may not be. That deserves some consideration.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you for those clarifications, Ms. Robertson.

What tools would you like to have at your disposal and that could be given to Employment and Social Development Canada in order to improve financial literacy, aside, of course, from mandatory training and a virtual service centre?

The report by the Auditor General of Canada is actually quite eloquent. As I mentioned, about one person in two does not know that they will be starting to pay interest on their loans as soon as they finish their studies. So I am trying to find an effective way of informing people. I know that people do not always read what is written at the bottom of a contract in fine print, but the fact remains that they are entering into a contract for a loan. That is a serious matter. It can have consequences on their lives.