Public Accounts Committee on Dec. 1st, 2020

[Atiq Rahman]

Thank you.

The wait time varies a bit. Some days, we have had 15-minute wait times, and some days, up to 25, 30 or 35 minutes. Capacity has been increased significantly. More call centre agents have been added.

One of the challenges has been to get call centre agents during this pandemic, train them up and get their security clearances so they can deal with government data, but given all of that, the capacity has been significantly increased.

At the beginning, some of the students could not even join the queue. That is no longer happening, so things are improving. It will take another few days to get back to normal circumstances.

[Peter Kent, Conservative, Thornhill, ON]

Thank you.

Mr. Hamilton, it's good to see you again, sir. It brings back memories of days at Environment Canada and on the China Council.

When you speak of the information-sharing protocol that's being developed with ESDC, what exactly are the mechanics that will better re-engage delinquent borrowers and encourage repayment activity?

[Bob Hamilton]

Thank you, Madam Chair.

What we're trying to do is to make sure that the information that's at our disposal is shared with the [Technical difficulty--Editor] to help get a better picture of the financial [Technical difficulty--Editor] the individual.

Getting better data on previous tax filings, dependants and, obviously, income will help us make better decisions collectively about what we should do.

I'd just add to a point that Graham made that one of the reasons this can become time-consuming or more complicated is just to make sure we are protecting the privacy of the information we share. This always comes up when we share people's tax data.

[Technical difficulty--Editor] and we need to make sure that whatever we do respects that.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Hamilton.

We will now move on to Mr. Blois, for five minutes.

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you, Madam Chair; and thank you to all of the witnesses for their testimony here today.

Very very similar to what Mr. Green said, I'll start by saying that there are, of course, broader considerations on policy grounds. I want to stick to the auditor's report.

I'm going to start with Deputy Minister Flack. It's great to see you, and as I'm an MP from Nova Scotia, it's great to see someone who has ties to that province.

This is an important subject. There's no doubt of that.

I went to exhibit 2.2 in the Auditor General's report. As I read it, in my quick math, about 85% of the student loan recipients are either repaying or are getting close to having that loan repaid. Obviously, this is an issue for about 15% with whom we have some work to do.

There is a lot of talk in the AG's report about improving the financial literacy tools on the website. I am a recent graduate of Dalhousie law school, so I went through these programs not that long ago. In fact, I am still enrolled in them.

What measures were already in place to help support students' understanding? I assume there were already some at the time this report was done. Do you know what those measures are?

[Graham Flack]

Yes. We developed a plan in 2017 with the agency on how to do this. The plan was going to be implemented on the IT platform that our third party provider has. It has taken some time, given the transformation project they're doing to improve service to students, and things had to be prioritized.

For example, as of November of last year, we had a virtual repayment counsellor on line. As my colleague indicated, there have been other tools added and we have a new release due in January. There are new tools to attempt to improve the literacy of students.

However, if I could just make a plea for those students who are on the repayment assistance program, I wouldn't want to leave folks with the impression that the reason they're on the program is because they're not financially literate. They're on the program because their income is under $25,000. Parliament said, if your income is under $25,000, we're going to help you by paying, if you need it, your interest.

I wouldn't want to leave the impression with the committee that our ultimate end goal is to hope that there is never anyone using the repayment assistance program, because we know in the dynamic economy we have that there are going to be individuals who aren't able to find jobs or who are ill.

I didn't want anyone to get—

[Kody Blois, Liberal, Kings—Hants, NS]

I certainly appreciate that. That's where I'm coming from as well. Whereas I think students certainly can appreciate this, whether the tools are there or not it's about having the means to repay these programs.

The Auditor General recommended, of course, that some individuals find their way into the RAP program who perhaps may not meet the criteria and suggested that there's some work to be done to try to maintain the integrity of that program.

Have you weighed, Deputy Minister Flack, the cost of trying to provide that extra supervision versus what the savings might be or perhaps some of the interest that might be accrued from having a few individuals get into that program who might not otherwise qualify?

[Graham Flack]

As we indicated in our response, we think it's worth pursuing what we started with the provinces in 2017, which is the work with the CRA to gather the CRA data. We think that has a good cost-benefit analysis, a good return on investment, particularly for people who are in the program for an extended period of time, when looking back at their tax records from prior years would be helpful.

The greatest challenge we have in the program is with the entry requirement, that the individual “in that month” have an income that was, on an annualized basis, below $25,000 a year. As members will know, we do not require Canadians to file taxes every month, so there is no real-time information that Revenue Canada has or we have that shows what the monthly income of each individual is.

When they suffer a sudden event, then, and lose the income, we have to use imperfect methods such as pay stubs and attestations.

[Kody Blois, Liberal, Kings—Hants, NS]

I want to go quickly to the Canada learning bond. That is something that was mentioned. You mentioned it in your remarks earlier as a tool to help support lower-income families in the country. The AG report found that there's not much of an uptake.

What are some of the measures you're thinking about to have more Canadians be eligible for this program, as a tool to try to offset some of the additional costs with post-secondary education?

[Graham Flack]

One of the great success stories over the last decade is the increase in the uptake of that program. Individuals have to open accounts, but we have had, through a whole bunch of efforts—nudge methods, mail-outs, other forms of communications—a big increase in the program.

One option that has been mooted is a kind of reverse-onus position whereby, rather than requiring individuals to set up an account for their kids, you might have a situation in which, if that low-income child were going to university, they would automatically be able to access the resources.

That's not a policy that's been pursued to date, but if one wanted to maximize availability, this would be the way to do it. There are going to be limits to what we can do even for RSPs or RESPs. How many people are willing to take those up and set them up themselves?

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Flack.

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you, Madam Chair.

[The Chair, Conservative, Kelly Block]

We will now move to what I'm going to call our rapid round of questioning, the two and half minute round, starting with Mr. Blanchette-Joncas.

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

Thank you, Madam Chair.

I will start by putting my questions to the officials from the Canada Revenue Agency.

I was quite surprised to read this, in paragraph 8 of the brief from the Office of the Auditor General:

We also found that the Canada Revenue Agency did not have the tools it needed to maximize recovery once borrowers defaulted and student loans were transferred to the agency for collection. For example, the agency was using Employment and Social Development Canada’s information system, which made it impossible for the agency to know exactly how much money was recovered by its own different activities and collection methods.

Was there communication between Employment and Social Development Canada and the Canada Revenue Agency?

[Bob Hamilton]

I am sorry, my microphone was not properly adjusted and it was difficult to hear, but I think I have fixed the problem.

In this context, it is important to recognize that this program is subject to rules that are different from the income tax system in general, for which the process of recovering amounts is easier. Certainly, we collaborate with ESDC to make sure that—

[The Chair, Conservative, Kelly Block]

I'm sorry, but we're getting both the interpretation and your language of choice. Have you chosen the language?

[Bob Hamilton]

Is it better now?

[The Chair, Conservative, Kelly Block]

Yes.

[Bob Hamilton]

Okay, so I will carry on.

Certainly, we collaborate with ESDC to make sure that we have as much information as possible on the students from that point of view. However, the recovery process is different from the one for the income tax system. We do what we can, and I believe that that is what the Office of the Auditor General mentioned in its report.

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

Thank you for those clarifications, Mr. Hamilton.

I am having a lot of trouble understanding. In five years, $2.3 billion have been lost because contracted debts are not being paid back. However, when honest taxpayers owe five cents, you are able to collect that amount. How is it that you are not able to collect $2.3 billion when you are able to collect five cents?

Which systems does the Canada Revenue Agency need in order to be able to work effectively?

[The Chair, Conservative, Kelly Block]

Mr. Hamilton, please provide a very quick answer. Thank you.

[Bob Hamilton]

The important thing for us is to have access to as much information as possible. In collection, the time it takes to have access to information can constitute an obstacle. Exchanging information is important in that context.

In general, we have a good process to recover as much money as possible. We also discuss with students the possibility of regularizing their loans. That's another method we use.

[The Chair, Conservative, Kelly Block]

Thank you very much.

We will now move to Mr. Green, for two and a half minutes.

[Matthew Green, NDP, Hamilton Centre, ON]

Earlier in the interventions, we heard a comparison with the 2003-04 era, how the default rates have dropped considerably since that time. I recall that's actually my vintage. That would have been when I graduated. I graduated from Acadia, and I'll give a shout-out to Mr. Blois.

Tuition there was expensive at the time. It was something like $3,500. That would barely cover the cost of books today. I also recall that people in my cohort knew that if they defaulted and claimed bankruptcy, their debt would be forgiven.

Has there been a change? I believe there was a change, and if so, in what ways are you referencing that change in terms of the way people are now continuing to be shackled to this debt?

[Graham Flack]

Madam Chair, I'll start, but Atiq might have more on the question of forgiveness.

The default rate has come down steadily. Just to give you the numbers, it was 28%—