PACC Committee Report
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GOVERNMENT OF CANADA RESPONSE
TO THE SIXTEENTH REPORT OF THE STANDING COMMITTEE ON PUBLIC ACCOUNTS
ON THE INTEGRITY OF THE
SOCIAL INSURANCE NUMBER
INTRODUCTION
The Government is pleased to respond to the Sixteenth Report of the Standing Committee on Public Accounts, which considered Chapter 1 of the 2002 Report of the Auditor General of Canada on The Integrity of the Social Insurance Number.
The Government recognizes and welcomes the interest of the Standing Committee in its continuing efforts to strengthen the integrity of the Social Insurance Number (SIN) program and the Social Insurance Register (SIR). It agrees with the intent and principles that underlie the report and wishes to assure the Committee of both its firm commitment to the continuous improvement of the SIN and its willingness to report on progress.
Over the course of the past year, Human Resources Development Canada (HRDC) has made visible and steady progress in the development and implementation of SIN Action Plan initiatives that address the concerns of the Standing Committee. The citizen-focused service aspect of the SIN is balanced with due diligence and increased measures to protect personal privacy, to strengthen program integrity, and to deter fraud and identity theft.
Two key aspects of the SIN program have undergone profound change: the application process and the management of the SIR. The decision to accept only original foundation documents for identification purposes has had a direct impact on applicants and on the reliability of the information in the SIR. New policies and procedures for the 900 series of SINs for temporary residents have been in place since March 2003, resulting in enhanced controls on identification requirements and expiry dates linked to the period of authorized stay in Canada as indicated on valid immigration documents. All existing undated 900 series cards expire in April 2004 and holders of these cards must reapply and meet the new program requirements. Expired SINs will be deactivated after that date. Efforts to reach those who may be affected include notices appearing in ethnic newspapers across the country this fall, mailings to affected HRDC program clients such as EI recipients as well as to over one million employers in October 2003.
A thorough review of the integrity of the SIR is underway. Progress has been made over the past year in assessing the dynamic nature of the database and identifying the areas that require further examination. The SIR is updated continually with data from HRDC social programs and the Canada Customs and Revenue Agency (CCRA). HRDC has signed an agreement with CCRA that enables it to update the information annually and this work is already well advanced for this year. HRDC is actively pursuing agreements with Citizenship and Immigration Canada (CIC) as well as with provincial and territorial governments to obtain accurate data on SIN applicants and holders. Building these partnerships will result in sustainable improvements to the SIR database.
With respect to the other components of the SIN Action Plan, the effectiveness of SIN public awareness activities was assessed through focus groups and a public opinion survey. As reported earlier, staff has and will continue to receive additional training and tools. In addition, the Opportunities Fund and Aboriginal Programs were added to the list of SIN uses.
Given the importance of the SIN to government services and to Canadians, the Government recognizes the need for solid, secure and reliable management of the SIN application process and the personal information contained in the Register. The complex and sensitive issues that define the SIN environment require that the
Government work diligently with all partners to identify, agree on, and implement the most appropriate and efficient long-term solutions for the SIN.
The SIN Action Plan is being implemented within the broader context of Modernizing Service for Canadians, an HRDC-wide initiative designed to achieve an optimal balance between service quality, convenience and integrity. The integrity component of this initiative includes the development of an integrity policy and a risk management framework for all HRDC programs and services, including a risk-management strategy for SIN-based fraud.
The Integrity Policy and Risk Management Framework will ensure that all HRDC programs and activities are reviewed in terms of integrity from the perspective of financial control, privacy and security within a comprehensive risk management framework.
The Government will reinforce and build on its commitment — one that has resulted in a steadily more reliable SIR.
DETAILED RESPONSES TO THE RECOMMENDATIONS
RECOMMENDATION 1
That Human Resources Development Canada immediately prepare a new action plan that includes information on the total cost of implementing the plan, together with a cost breakdown for each individual initiative. That this new action plan be tabled in Parliament no later than 30 September 2003.
RECOMMENDATION 2
That Human Resources Development Canada immediately prepare a new action plan that includes a timeframe for implementation together with benchmarks to measure the plan’s progress. That this new action plan be tabled in Parliament no later than 30 September 2003.
RECOMMENDATION 3
That Human Resources Development Canada provide regular semi-annual reports on the status of its action plan, incorporating indicators that measure progress in implementing the elements of the plan and whether these elements are on time and on budget. That the Department provide the semi-annual reports to the Public Accounts Committee starting 30 September 2003.
RESPONSE TO RECOMMENDATIONS 1, 2 AND 3
The Government agrees with the need to continue adjusting the SIN Action Plan to include information on the estimated costs and timeframes of key initiatives as they develop, especially those involving other federal departments and agencies as well as provincial and territorial governments. Progress will be continually monitored and Action Plan achievements will be reported.
HRDC has agreed to provide regular progress reports on the implementation of the SIN Action Plan and will begin to meet this commitment in the fall of 2003.
While a number of the initiatives do not require additional funds, resources are being made available within HRDC as needed. Additional resources will be sought as appropriate.
RECOMMENDATION 4
That Human Resources Development Canada modify the SIN application process to ensure that it complies fully with the intent of the Employment Insurance Act and Regulations by requiring at least two separate and distinct source documents to verify proof of identity and citizenship of the SIN applicant.
RECOMMENDATION 5
That Human Resources Development Canada require the interdepartmental working group on the SIN application process to submit a copy of its final report containing its recommendations to the Public Accounts Committee by 30 September 2003.
RESPONSE TO RECOMMENDATIONS 4 AND 5
The Employment Insurance Act requires that SIN applicants produce documents to establish identity and status. HRDC modified the SIN application process significantly in October 2002 in order to make the process more secure. HRDC now requires one of two foundation documents: either an original birth certificate or an original immigration document.
In response to the report of the Auditor General suggesting two source documents be required, an interdepartmental working group was mandated to review the proof of identity requirements and the recommendations of the Auditor General and of the Standing Committees on Public Accounts and on Human Resources Development and the Status of Persons with Disabilities.
The group began its work by reviewing the current SIN requirements and those of other federal departments and agencies such as the Passport Office. In order to make recommendations based on a sound approach to risk management, it has focused its attention on the different categories of SIN applicants and what proof of identity requirements to consider in each case, looking at for example, the permanent resident card for permanent residents. The age of Canadian citizens for whom a SIN is sought is also being examined.
About 68% of all SIN applications are for Canadian citizens and 95% of these applications are for persons aged 17 years and under, with approximately 50% being for children less than 12 years of age, an age group that would not possess a second source document. Another 22% of applications are for permanent residents and 10% are for temporary residents who must meet the new 900 series requirements.
The working group will continue its work and its consultations in order to consider fully other proof of identity requirements and processes so that its recommendations fit within the broader policies of the Government, complement those of other departments and agencies and can be sustained over the longer term. At the same time, it must address the specific needs of SIN applicants and of HRDC as the administrator of social programs that use the SIN.
The Government will review the SIN application process when it has considered the recommendations of the working group.
RECOMMENDATION 6
That Human Resources Development Canada, in collaboration with Statistics Canada, complete without further delay the baseline study of the Social Insurance Registry and table a summary report containing the conclusions of the study, together with a copy of the final action plan, to be tabled in Parliament and the Public Accounts Committee no later than 30 September 2003.
RESPONSE TO RECOMMENDATION 6
Last year, HRDC deactivated 2.6 million dormant SINs. Since that time, the Government has continued to focus on strengthening the integrity of the SIR.
HRDC has made regular improvements to the SIR through constant scrutiny and the adoption of improvement measures. The SIR database is updated with information on taxpayer deaths which CCRA now provides monthly. CCRA has also begun to transfer information on its inactive files and this data will be used to update the SIR. More analysis will be performed as the CCRA data helps to identify inactive SINs. At the same time, information from HRDC programs such as Employment Insurance and Income Security Programs is used to update the Register. The use of expiry dates on all 900 series SINs will further increase confidence in the SIR as all non-dated cards will expire in April 2004. Taken together, these measures have significantly enhanced the reliability of the SIR.
In addition, technical tests are being conducted this fall and further analysis will be performed to determine the reliability of the SIR.
Work is also underway to respond to the concerns of the Auditor General about the number of living SIN holders in the SIR compared with the size of the Canadian population. The SIR will continue to reflect sizable groups of individuals who do hold a valid SIN but may not be included in the population statistics. This would include, for example:
- Canadian citizens and permanent residents who are now living outside Canada; and,
- Canadians who have left to work, volunteer or study abroad for a period of time.
In addition, the SIR currently includes individuals with 900 series SINs who have left Canada and whose SINs will expire in April 2004 unless they reapply with a valid work authorization.
The Government is committed to completing this work as promptly as possible in order to ensure a reliable and sustainable SIR.
At the same time, HRDC is working towards agreements with CIC as well as provincial and territorial vital statistics agencies to verify the information on the source documents it examines. This will contribute substantially to the accuracy of the information.
RECOMMENDATION 7
That Human Resources Development Canada seek to secure formal data exchange agreements with other federal departments and agencies, as well as with provincial and territorial vital statistics agencies, in order to strengthen the completeness and reliability of the Social Insurance Register. That the Department provide to the Public Accounts Committee a status report on the progress of these agreements by 30 September 2003.
RESPONSE TO RECOMMENDATION 7
The Government agrees with the recommendation to provide a status report on the discussions/negotiations of formal data-exchange agreements. As part of HRDC’s continuous improvement approach to maintaining and enhancing SIR data integrity, information on “Dormant” SIN status will be updated annually with CCRA to identify taxpayer accounts that have not been active for at least five years. Verification of identity and status of SIN applicants will occur as normal day-to-day operations.
HRDC has made further progress towards establishing on-line data-exchange verification processes by:
- agreeing with CIC on a memorandum of understanding regarding immigration data, including temporary residence status and 900-series SIN expiry dates;
- signing a project charter with the BC Vital Statistics Agency regarding a pilot project on birth certificate data; and,
- signing a letter of intent with Ontario to verify vital statistics information electronically.
The Government agrees with the observations of the Standing Committee with respect to the challenges associated with negotiating both interdepartmental and intergovernmental agreements on data-exchange, especially as many jurisdictions are modernizing their information technology (IT) systems. The timetables proposed in the SIN Action Plan will be reviewed regularly to better reflect evolving discussions with partners.
RECOMMENDATION 8
That Human Resources Development Canada review its reporting systems, practices and policies to ensure that its reports on plans and priorities contain clear objectives (planned results) for the Social Insurance Number Program, with activities related to those objectives, and establish performance targets. That the Department begin reporting such information under the new format for the fiscal year commencing 1 April 2004.
RECOMMENDATION 9
That Human Resources Development Canada review its monitoring systems, practices and policies to ensure that its departmental performance reports contain information on the Social Insurance Number Program, including program results achieved compared with performance expectations. That the Department begin reporting performance information under the new format for the current fiscal year ending 31 March 2004.
RESPONSE TO RECOMMENDATIONS 8 AND 9
HRDC is reviewing its reporting and monitoring systems, practices and policies to ensure that objectives and activities related to the SIN are made clear in the report on plans and priorities and that information on the SIN including program results are reflected in the departmental performance report.
The Government assures the Committee that it is fully committed to the continuing improvement of the management of the SIR and the SIN and will report regularly on progress.
REPORT RECOMMENDATIONS
RECOMMENDATION 1
That Human Resources Development Canada immediately prepare a new action plan that includes information on the total cost of implementing the plan, together with a cost breakdown for each individual initiative. That this new action plan be tabled in Parliament no later than 30 September 2003.
RECOMMENDATION 2
That Human Resources Development Canada immediately prepare a new action plan that includes a timeframe for implementation together with benchmarks to measure the plan’s progress. That this new action plan be tabled in Parliament no later than 30 September 2003.
RECOMMENDATION 3
That Human Resources Development Canada provide regular semi-annual reports on the status of its action plan, incorporating indicators that measure progress in implementing the elements of the plan and whether these elements are on time and on budget. That the Department provide the semi-annual reports to the Public Accounts Committee starting 30 September 2003.
RECOMMENDATION 4
That Human Resources Development Canada modify the SIN application process to ensure that it complies fully with the intent of the Employment Insurance Act and Regulations by requiring at least two separate and distinct source documents to verify proof of identity and citizenship of the SIN applicant.
RECOMMENDATION 5
That Human Resources Development Canada require the interdepartmental working group on the SIN application process to submit a copy of its final report containing its recommendations to the Public Accounts Committee by 30 September 2003.
RECOMMENDATION 6
That Human Resources Development Canada, in collaboration with Statistics Canada, complete without further delay the baseline study of the Social Insurance Registry and table a summary report containing the conclusions of the study, together with a copy of the final action plan, to be tabled in Parliament and the Public Accounts Committee no later than 30 September 2003.
RECOMMENDATION 7
That Human Resources Development Canada seek to secure formal data exchange agreements with other federal departments and agencies, as well with provincial and territorial vital statistics agencies, in order to strengthen the completeness and reliability of the Social Insurance Register. That the Department provide to the Public Accounts Committee a status report on the progress of these agreements by 30 September 2003.
RECOMMENDATION 8
That Human Resources Development Canada review its reporting systems, practices and policies to ensure that its reports on plans and priorities contain clear objectives (planned results) for the Social Insurance Number Program, with activities related to those objectives, and establish performance targets. That the Department begin reporting such information under the new format for the fiscal year commencing 1 April 2004.
RECOMMENDATION 9
That Human Resources Development Canada review its monitoring systems, practices and policies to ensure that its departmental performance reports contain information on the Social Insurance Number Program, including program results achieved compared with performance expectations. That the Department begin reporting performance information under the new format for the current fiscal year ending 31 March 2004.