HUMA Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Human Resources Development and the Status of Persons with Disabilities

EVIDENCE

CONTENTS

Tuesday, May 6, 2003

Á

1110

The Chair (Mrs. Judi Longfield (Whitby—Ajax, Lib.))

Mr. Wayne Wouters (Deputy Minister, Department of Human Resources Development)

Á

1115

Á

1120

The Chair

Mr. Monte Solberg (Medicine Hat, Canadian Alliance)

Mr. Wayne Wouters

Ms. Janet Milne (Assistant Deputy Minister, Financial and Administrative Services, Department of Human Resources Development)

Mr. Monte Solberg

The Chair

Mr. Monte Solberg

Mr. Wayne Wouters

Mr. Monte Solberg

Á

1125

Mr. Wayne Wouters

Mr. Monte Solberg

Mr. Wayne Wouters

Mr. Monte Solberg

Mr. Wayne Wouters

Mr. Monte Solberg

Mr. Wayne Wouters

Mr. Monte Solberg

Á

1130

Mr. Wayne Wouters

Mr. Monte Solberg

Mr. Wayne Wouters

Mr. Monte Solberg

Mr. Wayne Wouters

Mr. Charles Nixon (Acting Assistant Deputy Minister, Insurance, Department of Human Resources Development)

The Chair

Mr. Eugène Bellemare (Ottawa—Orléans, Lib.)

Mr. Wayne Wouters

Mr. Eugène Bellemare

Mr. Wayne Wouters

Á

1135

Mr. Eugène Bellemare

Mr. Wayne Wouters

Mr. Eugène Bellemare

Mr. Wayne Wouters

Mr. Eugène Bellemare

Mr. Wayne Wouters

Mr. Eugène Bellemare

Á

1140

Mr. Wayne Wouters

Mr. Eugène Bellemare

Mr. Wayne Wouters

Mr. Eugène Bellemare

Mr. Wayne Wouters

Mr. Eugène Bellemare

Mr. Wayne Wouters

Mr. David Cogliati (Director General, Canada Student Loan Programs, Department of Human Resources Development)

Mr. Eugène Bellemare

The Chair

The Chair

Mr. Sébastien Gagnon (Lac-Saint-Jean—Saguenay, BQ)

Mr. Wayne Wouters

Â

1215

Mr. Phil Jensen (Assistant Deputy Minister, Employment Programs Branch, Department of Human Resources Development)

Mr. Sébastien Gagnon

Â

1220

Ms. Nada Semaan (Director General, Strategic Direction Branch, Income Security Program, Department of Human Resources Development)

Mr. Sébastien Gagnon

Mr. Wayne Wouters

The Chair

Mr. Ovid Jackson (Bruce—Grey—Owen Sound, Lib.)

Ms. Nada Semaan

Mr. Ovid Jackson

Â

1225

Ms. Nada Semaan

Mr. Ovid Jackson

Mr. Wayne Wouters

Mr. Ovid Jackson

The Chair

Ms. Libby Davies (Vancouver East, NDP)

Â

1230

Mr. Wayne Wouters

Ms. Libby Davies

Mr. Wayne Wouters

Ms. Libby Davies

Mr. Wayne Wouters

Ms. Libby Davies

Â

1235

Mr. Wayne Wouters

The Chair

Ms. Diane St-Jacques (Shefford, Lib.)

Ms. Nada Semaan

Â

1240

Ms. Diane St-Jacques

Ms. Nada Semaan

Ms. Diane St-Jacques

Ms. Maryantonett Flumian (Associate Deputy Minister, Department of Human Resources Development)

Ms. Diane St-Jacques

Ms. Maryantonett Flumian

Ms. Diane St-Jacques

The Chair

Mr. Monte Solberg

Mr. Charles Nixon

Mr. Wayne Wouters

Mr. Monte Solberg

Mr. Wayne Wouters

Mr. Charles Nixon

Â

1245

Mr. Monte Solberg

Mr. Charles Nixon

Mr. Monte Solberg

Ms. Maryantonett Flumian

Mr. Monte Solberg

Mr. Wayne Wouters

Mr. Monte Solberg

Mr. Wayne Wouters

Mr. Monte Solberg

Â

1250

Mr. Wayne Wouters

The Chair

Mr. John Finlay

The Chair

Mr. Sébastien Gagnon

Mr. Wayne Wouters

Â

1255

Mr. Sébastien Gagnon

Mr. Wayne Wouters

The Chair

Mr. Sébastien Gagnon

Mr. Charles Nixon

·

1300

Ms. Libby Davies

The Chair

Ms. Libby Davies

The Chair

Ms. Libby Davies

The Chair

Ms. Libby Davies

The Chair

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CANADA

Standing Committee on Human Resources Development and the Status of Persons with Disabilities

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NUMBER 027

l

2nd SESSION

l

37th PARLIAMENT

---

EVIDENCE

Tuesday, May 6, 2003

[Recorded by Electronic Apparatus]

Á  (1110)  

[English]

    The Chair (Mrs. Judi Longfield (Whitby—Ajax, Lib.)): This is the 27th meeting of the Standing Committee on Human Resources Development and the Status of Persons with Disabilities. We are beginning our review of the estimates and we have with us a distinguished group of folks from the ministry, led by the deputy minister, Mr. Wayne Wouters.

    Mr. Wouters, would you like to begin? We have chatted about the time constraints before and you promised to keep your remarks short.

    Mr. Wayne Wouters (Deputy Minister, Department of Human Resources Development): I'll try to be as quick as I can.

    Thank you very much.

[Translation]

    I am pleased to be here today to provide you with Human Resources Development Canada's Main Estimates for 2003-04.

[English]

    I have with me Nada Semaan, DG, strategic direction and partnerships, with income security programs; Charles Nixon, acting ADM, employment insurance; Maryantonett Flumian, the associate deputy in the department; Janet Milne, ADM, finance and administration; and Phil Jensen, ADM, employment programs branch.

    This is my first appearance before the committee for HRDC, and I can honestly say that in my long experience as a public servant with the Government of Canada, this Standing Committee on Human Resources Development and the Status of Persons with Disabilities is one of the most active and diligent standing committees I have worked with.

    Your work, both in this committee and through the subcommittee, is fundamental to informing the policies of my department. In my first year at HRDC, I have come to believe that no other department plays such an active role in and touches the lives of so many Canadians. The recent tragic SARS outbreak in Canada provides, in my view, an excellent example of how HRDC can respond to the needs of Canadians in a very short timeframe.

    The decision was taken on March 28 to help those who were unable to work because of SARS. By April 4, one week later, we had implemented changes under EI to waive the usual two-week waiting period, as well as the requirement for a medical certificate, to make it easier for those workers impacted by SARS to receive EI benefits.

    This was followed, as you know, by a special relief program announced on April 28. By the following Friday, HRDC had developed a $2 million program to support workers who deliver or help to deliver health-related services and who were not eligible for EI but suffered a loss of income because of SARS, either through quarantine and being isolated or the actual contracting of the disease. I have nothing but praise for the minister, who took the leadership role in making these initiatives a reality, and for my staff, who came together and worked around the clock to develop and implement them.

    Madam Chair, I would like to provide a quick snapshot, if I could, of some of the other achievements over the past year where we have worked with committee members to ensure that we are meeting the needs of Canadians.

[Translation]

    Certainly, EI service delivery is always uppermost on our minds. Our goal remains constant: 28 days for new claims to be processed. And, over the past year, we have reduced overdue new claims by 41 per cent.

    The 2002 Employment Insurance Monitoring and Assessment Report was also tabled in Parliament on April 30. This constitutes the sixth annual report and it showed that EI continues to provide temporary income support to individual Canadians who involuntarily lose their jobs.

[English]

    Nearly two million people accessed $11.5 billion in income benefits in 2001-02. Over 570,000 people participated in active employment measures and 188,000 returned to work.

    The report also notes how Canadians are finding support in balancing their work and family needs. In the first year take-up of EI maternity and parental benefits, we have seen more than 200,000 Canadians accessing these benefits. That's a 24% increase for parental benefits and a 16% increase for maternity benefits.

    Today I want to thank the committee for your help in enabling more working parents to spend time with their child in that critical first year of life.

    On the other side of the coin are those times in a family's life when a loved one is dying or at risk of death. Thousands of working Canadians face income loss as well as possible job loss when confronted with the choice of caring for a loved one or going to work. With the committee's support, we are working to ensure that the proposed compassionate care benefit delivered through the EI program is available to Canadians by January 2004.

Á  (1115)  

[Translation]

    Finally, I want to recognize the Standing Committee members' work in helping us protect the integrity of the Social Insurance Number.

[English]

Since March 30 of this year, we've begun to terminate 900 series social insurance numbers for recipients who are not Canadian citizens or permanent residents.

[Translation]

And we continue to move ahead with implementing other parts of our Action Plan.

[English]

    Allow me to outline how budget 2003 will benefit Canadian children and families. By 2007 there will be a $965 million increase in the national child benefit, which will help families overcome the welfare wall and break out of the cycle of poverty, and $935 million will be invested over five years to help the provinces, territories, and first nations provide greater access to child care and early learning opportunities. A child disability benefit for low- and modest-income families will see an investment of $50 million a year. Up to $1,600 per year for a child with a disability will be available.

    Also, the youth employment strategy is being streamlined to help young people develop skills for the future and to help those who face the greatest barriers to employment. In 2003-04, the Government of Canada will invest more than $400 million through this strategy to help youth gain the skills, knowledge, and work experience to find jobs and stay employed. A greater emphasis on skills and knowledge is critical to enable young Canadians to participate in the knowledge-based economy.

    As for senior citizens, who deserve to reap the benefits of years of working and contributing to Canadian society, HRDC and CCRA will continue to work together to reach those who may be eligible for the guaranteed annual income supplement, the GIS. We must be more proactive in meeting their needs.

    HRDC is also taking steps to be responsive and accountable to Canadians. We have decided to remove external kiosks because their usage has declined by 20% per year. By contrast, the job bank on the Internet has shown dramatic increases over the years.

    Turning to our report on plans and priorities, the report states that HRDC's total consolidated planned spending for this fiscal year, 2003-04, will amount to $70.9 billion. About 95% of this spending goes directly to Canadians through benefits paid under the employment insurance program, the Canada pension plan, old age security, and other statutory payments. It is incumbent upon HRDC to deploy these funds wisely in providing the best, most up-to-date, citizen-centred service possible.

    As we outline in our report on plans and priorities, HRDC will be focusing its resources on four main areas: income security for seniors, persons with disabilities and their children, survivors, and migrants; fostering opportunity for Canadians to participate fully in the workplace and community; helping to ensure safe, fair, stable, and productive workplaces; and finally, providing sustainable and effective program management and service delivery. In effect, these are our goals in a changing society, where family structures are more fluid, the population is aging, attachment to the workforce is taking different forms, and learning is becoming lifelong in a knowledge-based economy where technology is paramount.

    Expectations have changed too. Canadians want their social programs to shift away from simple income redistribution to provide equal access to opportunity for success. They want government to provide them with tools and choices to participate in society. This means self-determination and empowerment, not entitlement.

[Translation]

    Canadians are also changing their expectations about service delivery. They see how technology has benefited them in faster more convenient service in other sectors, and they expect their government to do likewise. They also want integrated, flexible, secure service that fully respects their privacy.

Á  (1120)  

[English]

    As a result, we are examining everything we do, from policy and program renewal to modernizing service, to ensure that we can provide the service Canadians want and need. Change is not new to the department; it's an opportunity we have been refining over the past 10 years.

    One the first steps HRDC is taking is to revitalize the policy framework within which it operates. Some of the likely directions include the following: shifting the government relationship from entitlement to empowerment, which requires basing policy on social investment that promotes opportunity and going beyond providing stop-gap measures; fostering inclusion through employment and championing social cohesion; focusing on participation and innovation; establishing a policy framework built on integrated labour market and social policy underpinnings; and finally, developing policy that encourages a more efficient and inclusive labour market with skills and learning supports and services to aid participation.

    HRDC has already taken steps to achieve the policy goals I've just listed. Our goal is to lay the policy foundation to develop programs that provide Canadians with what they want: the dignity of a good job, the capacity to participate fully in society, and the right to make their own choices.

    In regard to modernizing service, HRDC currently serves 12 million EI and CPP contributors, 3 million CPP pensioners, and 4 million OAS pensioners. We respond to over 50 million telephone inquiries a year. Through it all, our clients give us an approval rating in the 80% range, but we know that the needs and expectations of our clients are continuously evolving and they want service and program delivery that's simple and accessible. We must position our organization as one that is centred on citizens' needs. There should be no wrong door when it comes to service delivery. Any channel a client chooses to access HRDC programs should be the right channel.

    That concludes my opening remarks. As I said, I think that on a go-forward basis we need to focus both on our policy development and on modernizing service to Canadians.

    Thank you very much.

    The Chair: Thank you.

    We'll start with Mr. Solberg, in ten-minute rounds.

    Mr. Monte Solberg (Medicine Hat, Canadian Alliance): Thank you, Madam Chair.

    Thank you to our witnesses today. It's wonderful to be able to sit down and talk to you about some of the issues in the department.

    There are so many things, but let me start by asking a question about the big increase in spending in the department for grants and contributions over and above what the main estimates initially asked for. They initially asked for $925 million. There was a request for additional funds in supplementary estimates (A) of another $192 million and then $53 million more in supplementary estimates (B). What caused that big jump?

    Mr. Wayne Wouters: Can you just refer to--

    Ms. Janet Milne (Assistant Deputy Minister, Financial and Administrative Services, Department of Human Resources Development): What page is that on?

    Mr. Monte Solberg: This is grants and contributions, okay? Initially in the main estimates, the department was requesting $925 million.

    The Chair: Is that 2002-03?

    Mr. Monte Solberg: Yes, and in supplementary estimates (A) the request was for $192 million, and in supplementary estimates (B) it was for $53 million. That's an increase of about 30% over and above what the main estimates requested. It seemed like an excessive amount to me.

    Mr. Wayne Wouters: Madam Chair, I'm going to have to get back to the honourable member, because there are many changes in our grants. We have 90 grants and contribution programs. Each year some of them are increasing and some are decreasing. I'm going to have to get back to the honourable member with the specifics around that, if that is appropriate.

    Mr. Monte Solberg: All right. I'll hold you to that. Hopefully we can get back to it before the end of the meeting.

    My next question is with respect to the employment insurance, EI, account. I wonder how many Canadians today really understand how the EI account works. I would argue that it's a basic and really a political right for people to understand how the apparatus of government works, especially when they have to pay a fair bit of their own money into this account.

    I wonder if people here would care to talk a little bit about how good a job the department has done in explaining how the employment insurance account works and explaining what the surplus means. Does it mean they will get money back down the road? I guess what I'm wondering about is that I think a lot of people have mistaken ideas about it and I'm not sure the department has done a very good job of explaining how the system works for employers and employees.

Á  (1125)  

    Mr. Wayne Wouters: Thank you for that question. I think it's fair to say that the consolidated accounts of the Government of Canada are complex. Clearly the EI account is part of the consolidated revenue fund. So as revenue flows into that account, it is part and parcel of the overall accounts of the Government of Canada. So it does affect, at any point in time, the bottom line.

    Of course the stock has been increasing over a period of time, and this is why the government decided to proceed with a rate-setting review to determine how best on a go-forward basis we can establish the rate. On the rate-setting mechanism, we are looking at a number of principles. The rates should be transparent and the premium rates should be set on the basis of independent audited advice, and as well, expected premium revenues should be corresponding to expected program costs on a go-forward basis.

    Mr. Monte Solberg: I just want to jump in there. I hate to do that, but time is so limited. I understand a lot of that stuff myself, I have to say, but I guess what I'm wondering is, has the department been at all proactive in explaining this to workers? Have you done any advertising? Have you provided workers and employers with information saying, in the form of a Q and A for instance, here's what happens to your money?

    Mr. Wayne Wouters: That information has generally been available. I think, for the most part, the employees' main interest is how the program works for them. Are the benefits adequate? How do we address issues for full-time and permanent workers? That's the interest, Madam Chair, from the perspective of employees. For employers, it is essentially what this social insurance program means for them.

    In response to the contributions that are made, how does it affect full-time workers, temporary workers, what about parental leave, what about maternity leave, what about compassionate leave? These are the issues that I think are most important to employees at the end of the day.

    Mr. Monte Solberg: These people are all taxpayers. They have an interest, I would think, in how their money is spent. I would think, for instance, if they're paying premiums on this, they would have a direct financial interest in knowing things like, if there is a sudden downturn in the economy, there's this big account that they've heard about with $42 billion, now going to $45 billion, in it. Does that mean they'll be able to see their premiums continue to go down? Will that all of a sudden come to an end? Will they actually start to go up again?

    Those are the sorts of questions I think are pretty important to people as well, beyond just what kinds of benefits they get.

    Mr. Wayne Wouters: Madam Chair, I agree with the honourable member. Those are very critical issues that have been raised. I think employees and employers have been very keen to see rates go down. As we know, they have gone down.

    Mr. Monte Solberg: That's not the issue.

    Mr. Wayne Wouters: As we go forward, as you said, they're going to be very keen as to how those rates will be established. This is why the government has decided essentially to put in place a review of the rate-setting mechanism to address how best the rates can be set in a transparent way, and one that addresses concerns over the business cycle.

    Mr. Monte Solberg: Madam Chair, what I'm trying to get at is that the government...I think what I'm hearing is the department has not been proactive in explaining how the account works and has not answered some of the questions I'm talking about.

    You're talking about benefits. I'm not talking about that, with respect. I'm talking about people having the right to understand how the account works, because there's a lot of misunderstanding. I think, as a public service, the department should be explaining this, because we don't want to raise expectations and all of a sudden people will say, well, there's $45 billion, and our premiums should go down virtually to nothing for a period of time because there's so much money in there. I think we should be honest with people. I think the department has an obligation to explain this.

    To be fair, I think the account to some degree has been political cover for the government. I think it's time to be honest with people, and transparent, and lay out the specifics of how that thing works so people don't labour under these false illusions.

Á  (1130)  

    Mr. Wayne Wouters: Again, thank you for the question.

    In terms of informing employers and employees, we do it through a number of venues. We do it through our own offices. The commissioners, particularly the commissioner for workers and the commissioner for employers, work very hard at reaching out to their respective communities to clearly explain to them how the account works. I applaud the work of both commissioners, my fellow commissioners, who I think have done an excellent job in outlining to their clients, to their stakeholders, essentially all aspects of this program, including the issue of the surplus and the issue of rate-setting.

    So it's through those various venues that we try to communicate the overall structure of the program, how it works, how the surplus is established, and how the rates are set on an annual basis.

    Mr. Monte Solberg: Madam Chair, I'll switch gears here. Actually, I would like some evidence of that, but I suspect there isn't any.

    Mr. Wayne Wouters: Just on that, I would suggest perhaps the commissioners for workers and employees could come in at some point and explain what they do in terms of reaching out to their--

    Mr. Monte Solberg: I would like to see a literature piece that explains it to workers. But at any rate, I want to switch gears here. Has HRDC now secured the funding that is necessary to complete the fixes that are needed for social insurance numbers to ensure that they're not subject to fraud? Have we actually secured the funding for that?

    Mr. Wayne Wouters: I'll ask my acting ADM.

    Mr. Charles Nixon (Acting Assistant Deputy Minister, Insurance, Department of Human Resources Development): It remains a work in progress. We received $10.8 million through supplementary estimates in February to help us with our work, and those funds have been used to enhance our investigations and to enhance our technology in Bathurst, where we have our social insurance registry, so it is brought up to date from the 1960s and so it can interact with other systems so we can connect with the foundation document people in provinces and in Citizenship and Immigration. So those kinds of investments have been used, and we are now once again seeking funds for the future so that we can surely deliver on the action plan.

    The Chair: I know you're going to want to go on to your second round.

    Mr. Bellemare.

    Mr. Eugène Bellemare (Ottawa—Orléans, Lib.): Merci, madame la présidente.

    Mr. Wouters, I know in the mid-1990s the department went through a program review and it certainly hurt the department. Being a member of Parliament for the Ottawa area, I know losing members of the public service meant to me losing services in the communities while the work was transferred to these call numbers, where you press one if you want to speak in French, press two if you want to speak in English, press three if you have a problem, and then what is your problem. You've got 19 other buttons, and by the time you're through, it's past five o'clock and no one would even answer you anyway.

    So have you regained any of the employees where it was essential?

    Mr. Wayne Wouters: Yes, in fact, I think if you look at the number of public servants in Ottawa and in the regions, we've seen increases in a number of areas. We've seen increases in basically the overall accounting of grants and contributions. We've seen some increases in where we do provide service delivery.

    Mr. Eugène Bellemare: Would they be contractual people or would they be public servants?

    Mr. Wayne Wouters: No, these are public servants. They are indeterminate public servants. In fact, at headquarters we've seen quite a significant increase over the past number of years in a whole number of areas and, as I said, in the finance and administration side and the program side particularly. I'd have to verify this, but I think we're back beyond the cuts here at headquarters that occurred during program review.

Á  (1135)  

    Mr. Eugène Bellemare: That's reassuring you know, because your department is one department that really helps to service the communities, especially those in need, big time.

    Now, what I'm concerned about is right now I believe there is a program review going on and I think finance is probably looking for $1 billion across the board. They're telling every department to cut this and that. They're saying, “you pick out what you're going to cut”.

    Now, are you going to cut, and what is it that you're going to cut in this program review?.

    Mr. Wayne Wouters: As departments, I think we've seen since program review that we're always in an ongoing process of reallocating from lower priorities to newer priorities. So this exercise for us is something we've been doing on an ongoing basis.

    I think what was announced in the budget was essentially to find a billion dollars to reallocate to the priorities that in fact were in the budget to help pay for those announcements in the budget. Many of those announcements were for areas that are within HRDC's responsibility, such as, for example, child care.

    So really what they're saying is that part of this exercise is that we will need to reallocate some funding within the department to meet those kinds of priorities, like child care.

    Mr. Eugène Bellemare: On the cutting board.

    Mr. Wayne Wouters: We're going through this process right now. We're looking at a number of areas. We have not come to any conclusion, and the minister will make her presentation to the Treasury Board. Once the board makes that decision, then there'll be an announcement.

    Mr. Eugène Bellemare: In your department.

    Mr. Wayne Wouters: At this point in time we're looking in the range of $100 million.

    Mr. Eugène Bellemare: Thank you.

    My next question would be student loan repayment. I think it's page 91. It's a big item.

    Just in bad debts alone, it was $173 million this year in 2002-03. As for planned spending for 2003-04, you expect bad debts on student loans to be $188 million. I sympathize with students. We were all students once, and we're aware students pile up debts, $35,000 to $40,000. Some will just declare bankruptcy and start brand new, with a clean slate.

    As for all this money we're losing, I don't like to lose money. Money gets recycled so the next generation of students can get money and the next generation gets more money and so on.

    I'm aware from the late 1980s--I was on the public accounts committee--Quebec had a terrific system of collecting. I think they collected 98% in those days of their loans and in the rest of Canada, especially Ontario, it was pitiful, it was awful. People were getting away, they were changing names, they were moving to the United States, and so on.

    So that sort of triggered that flashback to me, $188 million expected to be bad debts. I like to help people, but I don't like to help people who are going to play tricks on me. I'm sure it's not all tricks; for some of them it's just bad luck. We think of student loans for people who are graduating with a degree and then, of course, they will earn money. We forget there are the dropouts in university just as in high school there are dropouts, so of course they have a problem getting a job.

    What are you doing to retrieve this kind of money?

Á  (1140)  

    Mr. Wayne Wouters: It's a very good question, because as we know, debt loads for students have been increasing over the last number of years. As the custodian of the program, we need to ensure that we meet the appropriate test by the actuary, and so we are essentially responding to what he would argue as appropriate benchmarks in terms of bad debt.

    We have done quite a bit in terms of changes we wanted to make to the program and to make it more, I guess, financially prudent. We've provided interest relief in some cases. We've extended the repayment period. So we've looked at these kinds of provisions to assist those students who, for a whole number of reasons, are not able to meet the normal repayments.

    So rather than simply say, okay, you missed a payment, you're delinquent, and we send it off to the collection agency, we have looked at these kinds of provisions to assist them to basically repay their debt. So we've extended the repayment period, interest relief, and we've just announced as well in this budget an additional $60 million that will again provide further enhancements to the program, improving affordability by allowing students to earn more while they're learning, while they're in school. That way they don't have to take out as much debt. Also, we are making further changes to the debt reduction repayment provisions that are in the program.

    Mr. Eugène Bellemare: Do we still have guaranteed loans? Like we guarantee the banks that if they lend the money and if there is default--

    Mr. Wayne Wouters: We do it directly now.

    Mr. Eugène Bellemare: Directly.

    Mr. Wayne Wouters: Yes, we do it directly. So I think we're taking steps, as any normal financial institution would, in order to address and deal with that debt.

    Mr. Eugène Bellemare: But it's getting worse by the year.

    Mr. Wayne Wouters: So is the size of the overall portfolio; it's increasing significantly every year so you have to make the measure.... Maybe David would want to comment a little bit on that.

    Dave Cogliati.

    Mr. David Cogliati (Director General, Canada Student Loan Programs, Department of Human Resources Development): Thank you. I'm with the Canada student loans program.

    It's a very good question. In fact, the actuaries we work with from the Office of the Superintendent of Financial Institutions are about to release a report that will show the provisioning rate actually going down by 2%. The provisioning rate is what you see in your numbers there. Right away we book a potential loss. It's actually coming down from 17% to 15%, so it's going in the other direction, in part reflecting, as Mr. Wouters said, the success of interest relief, debt reduction, and the extension of the period during which we help students so they don't go into default.

    Mr. Eugène Bellemare: My next question is on CPP. It used to be--

    The Chair: Mr. Bellemare, you've reached the 10 minutes. We've also reached the point where I'm going to have to allow the committee to go out to vote, so I'm going to suspend. You'll probably get a second round.

    To our witnesses, we'll be back as soon as we possibly can.

Á  (1143)  

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  (1214)  

    The Chair: I'll reconvene the meeting.

    Thank you, witnesses, for your understanding. We had to take care of some government business.

    We'll now proceed to Mr. Gagnon. Ten minutes, please.

[Translation]

    Mr. Sébastien Gagnon (Lac-Saint-Jean—Saguenay, BQ): Welcome. Thank you for being here this morning.

    My question is for Mr. Wouters. What do you mean by streamlining the Youth Employment Strategy? Could you enlighten me about this?

[English]

    Mr. Wayne Wouters: Merci. I'll ask Phil Jensen to provide the details, but as you know, the government released an initiative called Knowledge Matters about a year ago now, in which the government outlined the need to focus much more on skills and learning, lifelong learning.

    The government has decided that in order to address some of the skills shortages we're seeing in the labour market we need to look at our own programming, our existing programming, to try to refocus those programs more to programs that, first, support young Canadians to find a job, but second, also ensure that those younger Canadians have the appropriate skills so that, when they do find jobs, those jobs are sustainable.

    We've tried to refocus the youth employment strategy. We have essentially broken it into a couple of components to give it much more of a skills focus as well as to address youth at risk and, of course, the summer work program.

    Phil, do you want to provide further details?

  (1215)  

    Mr. Phil Jensen (Assistant Deputy Minister, Employment Programs Branch, Department of Human Resources Development): Sure, Wayne.

    In terms of detail, maybe it's best to go back a few years. The youth programming was built up over a period of 15 or 20 years, I guess. There was a series of programs. In fact, you can go back even further with the summer work experience programs, which can go back either 35 or 40 years. Then there was some incremental programming added in various areas.

    When it came time to renew the youth employment strategy, the minister looked at what the options could be. As the deputy said, there was a very strong policy and program reason, or series of reasons, to look at increasing the skills component of it or, in other words, ensuring that our youth were better skilled for the future and could help with the overall shortage of skilled trades, with certain occupations that needed more skilling and so on.

    Essentially we've taken the old programming and reoriented it into three streams, and let me just take you through it. We had several previous summer programs. There were at least three or four. The biggest one was called summer student job action, but there were two or three others. This is now under one program called summer work experience, and this helps students, both secondary and post-secondary, get jobs to take them throughout the summer and to gain work experience. It's usually marketed, if you will, to the public and to employers in the January to February period. The program closes at the end of March, and then it's up and running for the May to the fall period. That's the first big program.

    The second and the largest one is what we call our new skills link program. This takes previous programs like youth internship Canada and youth service Canada, which were designed to help youth at risk, and offers youths internships with a company, perhaps, or with a non-governmental organization or something like that to gain work experience. It brings all these programs together under a skills link program. More than that, it broadens the possibilities we can use with these youth, because what we've found with youth at risk--and youth at risk are a very large component of this particular group--is that they often need more than one intervention. They may have personal or job-related issues beyond just skills training.

    So the new skills link allows us to take these individuals through this series of stepwise interventions to get them either back into school or into the labour market, depending on their age. So that's the skills link program, and it's the second and biggest component of the new youth employment strategy.

    The third component is something called career focus, and this is aimed, if you will, more at youth with more skills, youth at the higher end of the market. We had two previous programs here. One was science and technology scholarships and internships, and the other one was youth international internships. These now have been put together under this career focus. It's designed to help post-secondary graduates with career-related work opportunities in specific areas that are short in the economy. It could be the high tech sector or it could be the health sciences sector or areas like that where there's a clear demand. It's felt that we can usually take people from post-secondary positions into these areas. This third part is the smallest part of the programming and is used in what I would say are much more targeted situations.

    Madam Chairman, those are the three areas.

[Translation]

    Mr. Sébastien Gagnon: About the Guaranteed Income Supplement, you say that you are going to continue looking for the persons who need it. But do you expect, for the coming year, measures concerning the retroactive payment of perceived amounts?

    We know that several seniors who could have had benefited from the GIS in the past did not use it because of a lack of advertising, and so on. The Bloc does an excellent work to track those people. Now that the department got in step, I think, and that they tend to demonstrate it to the people who are eligible, have you thought, for example, of compensating the people who lived for a fairly good time in poverty and who did not get it?

  (1220)  

[English]

    Ms. Nada Semaan (Director General, Strategic Direction Branch, Income Security Program, Department of Human Resources Development): Thank you for the question. As you know, when we came here in December we identified some of the initiatives HRDC was taking to find people. Last year we did find over 75,000. We checked both last year's revenues and those of the year before, and if they were eligible they were receiving retroactivity for 11 months, which is part of the legislation.

    We also said that we would commit ourselves to ensuring that we do this every single year. We have now transferred the pilot project of last year and we have been working with CCRA. We now have implemented that as part of our ongoing business. So as we did last year, we will be actively sending out those personalized, streamlined GIS applications to these individuals to find them, and at a minimum, on an annual basis. On top of that, we continually are still sending out application forms and information to all seniors at the age of 64 informing them about the products. We have extensive outreach systems as well. We are working with community partners to inform them, as well as having a number of other venues for the non-tax-filers.

    We feel we have found many avenues to reach Canadians. I think the work of the committee as well as a lot of the media and a lot of partners have helped us get there. We feel the provisions and the work we continue...of course we have to continue to work at it and we continually strive to make our services better, but we will ensure that we do whatever we can to reach all citizens. It still is a priority for us.

[Translation]

    Mr. Sébastien Gagnon: I understand the efforts which are demonstrated but I did not speak in terms of months of retroactivity but rather in terms of years.You know that there are some seniors who, for several years, could not benefit from GIS. That was my question. There was, among others, the case of a person who was eligible but who, finally, died without having been able to get this money. I am talking of years during which those people lived in poverty. Are you going to take measures for retroactivity beyond the number of months prescribed in the legislation?

[English]

    Mr. Wayne Wouters: The policy we have in place is a retroactive timeframe of eleven months plus one month for application. We do believe that this does provide for a reasonable delay or oversight by the people applying for the supplement. This is quite consistent with other social programs in the federal jurisdiction and other jurisdictions, including the Quebec family allowance, which has a one-year retroactivity. For Quebec social assistance there's no retroactivity. Another example is Alberta's widows' pension, with a one-year retroactivity. For Ontario's guaranteed annual income supplement, there's a one-year retroactivity.

    In our view, we're quite consistent with other federal programs and comparable provincial programs in terms of the provisions we have in place here.

    The Chair: We may get a second round. We'll try.

    Mr. Jackson.

    Mr. Ovid Jackson (Bruce—Grey—Owen Sound, Lib.): Madam Chair, I'd like to ask our guests, with regard to demographics and baby boom and baby bust cycles, when would Canada hit that cycle when we have the most seniors, the most people over 65? Has anybody done that statistic?

    Ms. Nada Semaan: I don't have the exact number, but it is growing, and in terms of an annual rate, we will be doubling in about 15 to 20 years in terms of the amount of seniors we currently serve. We will be doubling that number of seniors within 15 to 20 years.

    Mr. Ovid Jackson: How prepared are we for providing benefits? Is that something we just legislate when we need the money, or are we making preparations for that?

  (1225)  

    Ms. Nada Semaan: Actually, as you probably are well aware, the chief actuary has tabled both reports, the CPP actuarial report--I think it was the 18th actuarial report--as well as the old age security. We are quite sustainable in both areas, both for the old age security and for the CPP.

    We took measures in the CPP, both the federal and provincial governments, to ensure that the CPP was sustainable--there's a lot of detail in terms of how sustainable, but we are quite comfortable with our ability to pay seniors--as well as the old age security benefits. With everything, in terms of the economy, the chief actuary is recognizing that we are sustainable there as well.

    I should add that we have been identified by the OECD as probably one of the best countries in terms of being able to be responsive to old age pensioners and to provide services to them in terms of our sustainability.

    Mr. Ovid Jackson: I think we have a conflict of interest, Madam Chair, but I'm going to pursue this line of questioning.

    With regard to the age of 65, I noticed that the Province of Ontario is talking about moving....There are pluses and minuses, of course. Some people say that when people reach 65, that gets them out of the workforce and allows a younger person in at a lower level and so on and so forth. Other people look at it and say, “I'm at my peak”, or “I'm a late bloomer” or what have you.

    Does this department have anything to do with recommendations, perhaps, to eliminate that since our lifestyles have changed? People have different ways of working. Some people may not necessarily want to retire at 65. How does that work?

    Mr. Wayne Wouters: I think you've raised some very important issues vis-à-vis how our labour market will function over the years ahead.

    We are not contemplating looking at the age of retirement. I think we do have to look at where the supply of labour will come from over the next 5 to 10 years. We do have, of course, fewer people coming into the workforce. In fact, we're predicting that by 2011 all new jobs will be filled by new immigrants. There is the possible concern of, perhaps, skill shortages.

    The issue, I think, for Canada will be, where do we need to look to ensure we have the labour force that will meet the needs of the Canadian economy? I think that does address some very challenging issues for us vis-à-vis older workers.

    Should we be looking at policies and programs that encourage older workers to stay in the workforce somewhat longer? Perhaps it's not so much looking at age of retirement as it is the mechanisms, the programs, perhaps, we need to put into place that would help to encourage older workers to stay longer and to contribute to society and to the economy that way.

    I think those are the kinds of issues, and those issues were also raised as part of our skills and learning policies that we have been reviewing over the past while.

    Mr. Ovid Jackson: Thanks, Madam Chair. Those are my questions.

    The Chair: Thank you.

    Madame Davies.

    Ms. Libby Davies (Vancouver East, NDP): Thank you very much for coming today. I have two questions. Hopefully I'll get to the second one.

    The first question, though, was about HRDC's work and involvement in developing what's being called the market basket measure, which we understand, from reading in the media, is going to be introduced at the end of this month. I'm just curious as to why, first of all, it wouldn't be included, unless I've missed it, in your plans and priorities. I think, by any account, it would be considered, whether you're in favour of it or you're not in favour of it, a fairly significant public policy change, yet virtually nothing is known about it.

    I know that HRDC applied research has done work on it, because I've seen some of the papers. I know some groups have been trying to monitor what changes are about to take place. I know there have been a lot of discussions between the federal government and provincial and territorial governments.

    The first part of the question is, why isn't there anything on it, unless I'm missing it? It is a major public policy issue.

    Secondly, what kind of consultation has HRDC done with the broader community to actually let people know that the government is considering moving from LICOs to the market basket approach? I don't want to get into the debate of whether it's good or bad; I'm going to do that later by raising it at the committee. Hopefully the committee will have some discussion about it. In terms of your plans and priorities for the department as one piece of work, I would appreciate some explanation as to where it's at and what kind of consultation there has been.

  (1230)  

    Mr. Wayne Wouters: Thank you very much for the question.

    What we've tried to do in our plans and priorities document is lay out some broad priorities in moving forward. When it comes to market basket measure, from our perspective we're still somewhat in the early days. We have now proceeded to develop a methodology for working with the provinces in order that we can release our early estimates of this.

    Our view is that this is going to evolve, that we will continue to review this, to work on the definition to ensure that we do have an appropriate measure here, and to assess where Canadians will be on the measurement. So we're still in that process where it's being developed.

    You raised the question of consultations. We've had consultations with the National Council of Welfare to coordinate the input from the various voluntary sectors. It's a new measurement, and I think we all believe we have to be very careful before we begin to use the measurement, so we have to ensure those consultations take place. That measurement has to be assessed because it is going, as you know, from a relative measure of poverty to an absolute measure of poverty.

    Ms. Libby Davies: Could you just clarify, then, what is it that you're going to be bringing forward--what we've heard--at the end of May?

    Mr. Wayne Wouters: We will basically release our calculations based on this methodology. That will be the information that's provided--

    Ms. Libby Davies: Does that mean you are adopting it?

    Mr. Wayne Wouters: No. We're not adopting. We're not going to, tomorrow, say we're shifting from LICOs to the market basket measure. What we're saying is we've done a lot of work on an absolute measure of poverty that we believe requires dialogue with Canadians, and that we've worked with the provinces on this. Let's get the feedback, let's get further assessment of that and then determine over time whether in fact this is an appropriate means by which we can measure poverty.

    Ms. Libby Davies: Just so you know, I am going to raise this and I hope the committee will have an opportunity to actually call in some witnesses and at least have some discussion, because it is a very significant change and I think it's incumbent upon us to have that discussion.

    My second question, if I've just a bit of time left, is one of my favourite topics, the national child benefit. Just as you referred to the National Council on Welfare, the last report they put out in the spring of 2003 looked at welfare incomes from--and I can't remember whether it was 2001--but anyway, whatever the latest figures are they could come up with. One of the major things they identify in that report--and I think they do very good research--is the complete lack of transparency and accountability over income assistance programs. Now, this is obviously not just the federal government, this is provincial programs, but the connection here is that the national child benefit was always held up as something that would improve the income status of low-income families. In fact, if you look at their report, they quite clearly outline factually that for many families that is still not the case.

    So again, in your plans and priorities here, you talk about continuing to monitor the impact of the national child benefit in terms of what the provincial and territorial governments are doing. I wanted to question you on the criteria you're using to establish transparency when that money goes to individuals and then it's clawed back by provinces. How is that being monitored by the federal government? Because if you look at the National Council on Welfare report, their key concern is that it is so complex, it is so not transparent, and that it's almost impossible for anyone but an expert to even have a handle on how that program's working and whether or not low-income families really are benefiting. So I'd like you to respond to that if you could.

  (1235)  

    Mr. Wayne Wouters: Thank you very much for the questions.

    The system, when you look at our child benefit system in Canada, is a complex system. It's the nature of the federation where we try to, in this area, develop a system in tandem with the provinces.

    So in establishing the national child benefit, really what we've been trying to do is achieve a number of objectives. One is to address what we call the welfare wall, which I know you're familiar with, so that as we increase the benefit, provincial governments can reduce child welfare and move these kids off welfare. That is a very complex system that has been evolving over time. We're trying to articulate more clearly to Canadians how it works.

    The last budget has now said that we need to go beyond dealing with the welfare wall to adequacy. Once we get beyond the welfare wall, the announcement in the last budget was to increase the NCB by about $960 million, $930 by year five, which for most children will allow provinces to completely take them out of welfare, and then further increases to deal with adequacy.

    What we've been doing with the provinces is essentially developing an annual monitoring and reporting system so that we, the federal government, each year will report on the impact of the NCB and other measures on child poverty. As well, the provinces have agreed to report annually on the impact of NCB and provincial measures in their jurisdictions, each province and territory, on child poverty. So that is evolving. We've released a report and a number of provinces have released reports. We expect within a matter of weeks that remaining provinces will be coming forward with their report as well. We would hope, through that kind of exercise of being more accountable, more transparent in our reporting, that Canadians can develop a better understanding of how all our child support programs work here, to particularly address a fundamental issue for Canadians, child poverty.

    The Chair: Thank you.

    Ms. St-Jacques.

[Translation]

    Ms. Diane St-Jacques (Shefford, Lib.): Thank you, Madam Chair.

    Welcome here. I apologize for being late. I missed your presentation, Mr. Wouters.

    We know that as far as the Guaranteed Income Supplement is concerned, several efforts were made by the department to inform seniors about their rights. In the Report on Plans and Priorities, you state that you expect to spend billions more for programs for senior people. I would like you to explain to me in little more detail what these increased expenditures are going to bring. I will be mainly focused on old age security but will the communication efforts you are going to make for senior people include the CPP?

[English]

    Ms. Nada Semaan: As I mentioned earlier, in terms of communicating with citizens, we are continuing our communication efforts both in our work with the CCRA and with our partners. In Quebec alone last year we mailed approximately 24,000 simplified JS applications, which did result in 17,500 more.

    Yes, there is an expenditure of a billion-dollar increase; as the population ages, we pay out more. That is part of the actuarial reports. We are planning for that, and is part of the budget.

    We are doing regular mail-outs to contact service providers. We have our outreach people going out to actual seniors' homes trying to reach them. We have at this point in time dedicated a lot of resources. Probably the best way, though, is those personalized letters that we have sent out to people. We have received a lot of positive feedback from many of our partners on that, because it's simple for them and it's very easy for them to have access to it.

    We're looking at that success and we're speaking to seniors as well as partners, people who have helped seniors, to find out what has worked with that. We are using that to better enhance all of our systems as well and to simplify them and to reach Canadians.

  (1240)  

[Translation]

    Ms. Diane St-Jacques: The population is aging, so part of this money will go directly to cover the increased costs.

[English]

    Ms. Nada Semaan: Yes, exactly.

[Translation]

    Ms. Diane St-Jacques: The second part of my question would be on the modernization of services you are going to begin. How will you ensure within the department that, during the modernization, the customers are going to continue to have access to a quality service? How is the transition going to be made?

[English]

    Ms. Maryantonett Flumian (Associate Deputy Minister, Department of Human Resources Development): Thank you for your question.

    As we've said several times, we serve millions of Canadians on a daily basis with our existing systems and we always have to be mindful of that fact. And as we make changes to our programming and the way we serve Canadians and deliver those programs, we must ensure that we are always mindful of the fact that today we have to get those cheques out to Canadians who, many times, are in need, to the elderly who depend on our programming for their pension status, to Canadians who are in receipt of student loans and so on and so forth, to the unemployed, and to the disabled.

    Therefore, we have spent a considerable amount of time thinking about how to set these new service standards in place, thinking about the concepts involved in them, and thinking about how we can simplify our existing programs so that as we go to automate we're doing the best we can for Canadians. Before we go out to actually make any of these changes, we'll assure ourselves that the technology is in place, that it's robust, and that it's market tested, while we continue to deliver the programs in the traditional ways. As well, we'll be consulting with Canadians to ensure that what we put in place actually serves their needs.

    Our challenge is to maintain our programs the way they're being delivered today and continue to test and plan for the future and how we'll be serving Canadians better, always being mindful of the fact that we have to get those programs to Canadians today.

[Translation]

    Ms. Diane St-Jacques: What is the timeline? It may be indicated but I do not remember.

[English]

    Ms. Maryantonett Flumian: We've given ourselves a considerable timeline to be putting these measures in place, because, again, we don't want to interrupt any of the existing services. So far we have only begun to roll out some measures in terms of the government online initiatives, for example, APPLI-web for EI, and we're just about to go forward with ROE for the record of employment and how that can be done electronically as well. We're making improvements to CPP online and the income security programs online as well. Each of the program areas has their own timelines.

    We're beginning slowly and moving forward, but we will take as much time as is necessary to make sure we meet the objective of no interruption of service as we move into the future. It will take many years to bring about the transformation.

    Ms. Diane St-Jacques: Okay. Merci beaucoup.

    The Chair: Mr. Solberg.

    Mr. Monte Solberg: Thank you very much, Madam Chair.

    I just want to pursue the line of questioning I started a long time ago now with respect to social insurance numbers, so I guess I'll direct this to Mr. Nixon.

    You mentioned that $10.8 million has been allocated for this at this point. Would we find that spending in the EI income benefits service line? Is that where it would be in the estimates?

    Mr. Charles Nixon: Yes, it's in the--

    Mr. Wayne Wouters: You seem to get us in all our numbers.

    Mr. Monte Solberg: That's okay. Well, fair enough. It would be good to know, but--

    Mr. Wayne Wouters: We will provide you with that.

    Mr. Charles Nixon: The costs would seem to be shared between CPP, ourselves, and CCRA--

    A voice: That's correct.

    Mr. Charles Nixon: --but just how they've done it I'm not quite sure in this case.

  (1245)  

    Mr. Monte Solberg: Okay. That's helpful. One question I have is, can you give us a rough idea of how much you will need to complete this project?

    Mr. Charles Nixon: I think I'll just start where Ms. Flumian left off in terms of talking about our whole modernization strategy. It's a multi-year affair and the SIN is a critical part of that. We're taking it year by year as we go forward. The SIN will be the basis, the final identifier for our future system of authentication and how we're going to know our clients coming in, whether they come in electronically or in person or on the phone. As we develop how our service system is going to develop, costing for the use of the SIN, the robustness of the social insurance registry, the integrity of that and our connection with others to do that, will be part of it. We're not costing it all in for the future at the moment, because as we go we'll be developing the pieces.

    Mr. Monte Solberg: What I'm trying to ascertain is how committed the department is to fulfilling this. We have the finance minister and chair of the cabinet committee on domestic security, and I would think he'd be pretty sympathetic to wanting to deal with this issue. I want to know, for instance, how much of a commitment the government is making this year relative to last year in terms of the money they're spending on this and even for the year before. Is there a bigger commitment? Are we spending more this year than last year? Or less?

    Ms. Maryantonett Flumian: We're just in the process of finalizing our business plan, making sure we deal directly with that integrity issue and then moving to the other associated issues Mr. Nixon has mentioned. Given our regular visitations on the subject, perhaps within a shorter period of time we'll be ready to speak in some detail on the subject, because as we said last time, it does involve vital statistics, and provinces, and so on and so forth.

    Mr. Monte Solberg: I think I'll just let it go at that. But I want to ask one more question not related to that issue, and it has to do with the generally confusing nature of the estimates themselves. If you look at the estimates for this year, for instance, just as an example in the section on housing, it says in there that the estimates for this year are.... It doesn't matter what the estimates are for this year, but for the estimates for last year, it says $142 million.

    If you look back at the previous year's estimates, the main estimates were $142 million, but there was also a supplementary allocation of $92 million or somewhere around there, which is a pretty big jump over and above that $142 million. So when you look at this year's estimates and you see that $142 million figure, you really don't get any kind of a precise idea of what was actually spent on housing in the previous year. It's out by $90 million. It talks about main estimates to main estimates, I'll grant you that, but it is absolutely no indicator of what was truly spent in that particular vote on housing.

    I wonder if you'd care to reflect on that and explain maybe why that is and why things can't be a little bit clearer.

    Mr. Wayne Wouters: I'm not one to always fully defend and explain how estimates are developed and how they're outlined. It is a very complicated set of numbers when you go through it.

    Madam Chair, was the honourable member referring to homelessness or housing?

    Mr. Monte Solberg: Pardon me. It was homelessness.

    Mr. Wayne Wouters: Okay. For homelessness, what happened was that the funding allocated in the previous year was not spent, so we carried that forward into this fiscal year. As a result, that additional $92 million you referred to is simply the carry-forwarding of unspent funding from last year to this year. It shows up through the supplementary estimates into this year.

    Mr. Monte Solberg: Wouldn't it be helpful, though, if there were an explanatory note or something at the bottom of the page? If you're trying to make sense of this...it's a huge department and $70 billion, and I have a fantastic staff, but they can't go through the whole department. It's very hard.

  (1250)  

    Mr. Wayne Wouters: I think as well it is somewhat unique that way because of the number of programs we have and these changes that are going in and out. We also essentially are working with three different accounts, the EI account, the CPP account, and our normal...we have our grants and contributions and of course our normal A-base, so as departments go, it's rather unique in terms of how the budget is determined and how it is presented on an annual basis.

    I can appreciate the honourable member's difficulty, perhaps, from time to time in going through the estimates. I can only say, Madam Chair, that if at any point the honourable members would like to get a further detailed briefing on these specific items as to what the numbers do mean, we are quite prepared to do that at any point.

    The Chair: Okay.

    Mr. Finlay, do you have a question or do you want me to come back to you?

    Mr. John Finlay: No, just go ahead.

    The Chair: Okay.

    Mr. Gagnon.

[Translation]

    Mr. Sébastien Gagnon: Concerning EI, we see in the report the objectivity with which the cumulative surpluses for the last few years are indicated. We also see a little how you gave a positive picture in your presentation. I think however that this picture is not necessarily connected with reality.

    For example, in my constituency of Lac-Saint-Jean—Saguenay, we have one of the highest unemployment rates. Add to this several other serious problems. As we know, our main industrial sectors are, among others, the whole lumber industry. Inside all this, there are adjustments, there is a change which helps fishermen with an extension; there is some flexibility.

    While we see cumulative surpluses of $45 billion, why isn't there more flexibility to help these small centres? I say this rather objectively. There is an insurance program to help the workers but in an area like mine, with a very high unemployment rate, but there is no demonstrated intention to have some flexibility to help, among others, lumber industry workers who were hard hit by the conflict.

    There is also, for example, the whole tourism industry which would enable us, with some flexibility, to take a certain regional leadership to effectively have some autonomy during all seasons, and not only a seasonal tourism autonomy, in the Summer period. Why cannot we have some flexibility?

    I could understand if there was no surplus or if we had to rationalize, but year after year, we have surpluses. We have billions, and we do not try to demonstrate some flexibility in those programs.

[English]

    Mr. Wayne Wouters: Madam Chair, with programs such as employment insurance there's always a balance in terms of flexibility on a case-by-case, area-by-area basis as opposed to ensuring that since it is an insurance program contributed to by both employers and employees across the country it's national in scope. We must ensure fairness and equity in delivery of the program. We always try to find that balance, but at the same time we've made some adjustments to the program to ensure that there is built-in flexibility. For example, we've adjusted the EI boundaries, which try to determine the overall level of unemployment in a certain area and indicate that it is an unemployment region or an unemployment area for purposes of EI. As a result, because certain areas have higher unemployment than others, it means that the benefits provided for that part of the region can be somewhat higher.

    We've also tried to address certain local and regional concerns, particularly as applied to seasonal workers. Here we continue to examine this issue. We've made some adjustments in the past. Small weeks initiatives are now a permanent feature, for example, where we've eliminated the intensity rule. We continue to work through a number of committees we've set up with the business community, with individual Canadians, and with workers, to try to address many other more local, regional issues, we would say, particularly as applied to those workers in the forest sector and the fisheries sector, many of whom do work on a seasonal basis.

    So, yes, I think we've made significant progress to address some of their concerns, but we recognize that there are further issues, which we're working on with them. But at the same time, I'll come back to the point I made earlier: any solutions must be national in scope and we must ensure fairness and equity in the program for it to work effectively.

  (1255)  

[Translation]

    Mr. Sébastien Gagnon: I can understand all these pious wishes but there is however a certain reality and when you live with this reality daily, you see the impact on families who, precisely because of the softwood lumber crisis, are forced to turn to welfare. And even there, they are part of a group of people who have to get rid of their houses or of their cars. It is moving.

    The government gives a positive picture of EI and of its cumulative surpluses, but when you live with that reality daily, it is hard.

    I am going to give you another example. There are some realities which can be adjusted. For example, I was talking earlier about the tourism industry. The graduate students who are going to study tourism have a choice to make: to help their community or to try to get a job outside the area, in large centres, because a student who could go and give a hand to the regional industry needs 910 hours to qualify. Thus he does not make that choice. It is very tangible.

    I understand that, when you have to manage a department or such a big thing, you have to have some representativity, but I think that the challenge we face today is to link these needs with realities, in order to be more efficient and effective. I challenge you to do this.

    I myself had the opportunity to do so with a $240 million program, the Fonds Jeunesse Québec, where we did not follow the norms whatsoever. We went in small communities to adjust for them and it worked. Why cannot we decompartmentalize all this and look for this reality I am making you aware of today, Mr. Wouters?

[English]

    Mr. Wayne Wouters: Again, thank you.

    The honourable member makes some excellent points. I don't want to underestimate the difficulty for Canadians when they find themselves in a period of time where they do not have a job. We know the difficulties they face, for them and their families. So I think we have to look at, when we provide support, the whole menu of programs that this government and governments have.

    The EI is essentially designed to provide that temporary income support when a Canadian is out of a job. We have also active measures under EI that we have devolved, in the case of your province, to the Province of Quebec, to try to proactively assist those Canadians to ensure that they have the appropriate skills and tools to find a job. Then, we have other programs within the department, like the youth employment strategy and the programs to help aboriginal Canadians, again, to try and assist them to ensure that they have the tools to find a job.

    I think it's a question of looking at the full myriad of programs, not only in the Department of HRDC, not only provincial programs. But also, as you've alluded to, the reason many Canadians aren't able to find a job is the mere fact that the economic opportunities may not be there. So this is where, in some ways, what we do in the social policy side and what we do in economic policy has to come together, because these programs that we have, particularly employment insurance, as I said, is to help those people out of work.

    What we need to do is to try to find what are the measures that we can all put in place to assist those Canadians both economically and socially to find a job?

    The Chair: You have one minute left.

[Translation]

    Mr. Sébastien Gagnon: I understand but I was talking earlier about regional development. The fact to give us this flexibility could enable us to develop some autonomy.

    I have another question on external kiosks of HRDC. I know that you removing all of them. Is there still a possibility to keep them, for a small community where this kiosk is important and where the participation rate is high, for example?

[English]

    Mr. Charles Nixon: Thank you.

    We certainly have been looking at closing kiosks. To date, we have closed most of them. There remain 120 kiosks open. I don't have a regional breakdown in front of me, but they are there because people have raised concerns. There have been ongoing discussions with members of the House of Commons, such as you, who have those things in your ridings. Those kiosks, where people have raised issues, have remained in place and will do so as long as it's important that they remain there.

·  (1300)  

    Ms. Libby Davies: Madam Chair, are we--

    The Chair: I will let you have the final question.

    Ms. Libby Davies: Actually, I wanted to raise with the committee the issue of the market basket measure.

    The Chair: You have nothing left?

    Ms. Libby Davies: I'll forgo my question so I can raise that, if that's all right.

    The Chair: Then first I will thank everyone who came from the department. You made it possible. You changed your times to accommodate us. I appreciate that. I know you're busy, and so, on behalf of the committee, I thank you. I know we will be chatting with you again in the very near future.

    Ms. Libby Davies: Madam Chair, I know we're all busy, but just before the committee members run off, I did want to raise the issue of the market basket measure.

    If other members are not aware, HRDC has been doing quite a lot of work on this. I have spoken with the chair about it to express my concern that I think, as a committee, we should have some discussion about this very significant change that is about to take place.

    I would like to request, if it is possible, that we arrange a minimum of one meeting, but maybe it would require an additional meeting, where we can call in the department, and maybe Statistics Canada as well, to talk about the LICO, and the National Council on Welfare and groups like the Canadian Council on Social Development. I'm prepared to hear the other side. It is the Fraser Institute that's been pushing very hard on the market basket measure, so I think we should call some witnesses forward as well as the departments involved and have some understanding of this issue. Then we may have recommendations that can go back to the minister. It would be helpful, so I'd like to put that forward.

    Hopefully we'll be able to do that before the House rises, whenever that is in June.

    The Chair: I think we'd probably have to call a special meeting,because we're pretty booked up in terms of our regular schedule. But I understand the urgency that you feel. I will poll all members of the committee to see if we can do something to accommodate your request on that. I'll get back to you as soon as I've talked to members.

    Again, thank you all. I'd just remind committee members we will be next door in Room 315 this afternoon. We're hearing our final witness, Mr. Cappon, on literacy.

    The meeting is adjourned.