HUMA Committee Meeting

    I call the meeting to order.

    Good afternoon everyone. Welcome to meeting number seven of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

    Today we are studying the supplementary estimates (B) 2013–14 as they pertain to Employment and Social Development Canada.

    For the first hour today, we have with us the Honourable Jason Kenney, Minister of Employment and Social Development. Along with Minister Kenney are Ian Shugart, deputy minister; Karen Jackson, senior associate deputy minister of Employment and Social Development and chief operating officer for Service Canada; and Mr. Alain Séguin, chief financial officer. Furthermore, from the Canada Mortgage and Housing Corporation, we have Steven Mennill, vice-president of policy, research and planning.

    On behalf of the committee, we'd like to thank you, Minister Kenney, for taking the time to be with us today. I know you have some opening remarks prepared, so I'll turn the floor over to you for your presentation.

    Well, thank you very much, Mr. Chair. Congratulations on your election. I know you've served on this committee for many years, and I'm glad to see that it's in such good hands.

    Thank you, colleagues, for the opportunity to appear before you for the first time as Minister of Employment and Social Development Canada and Minister for Multiculturalism—obviously in the former capacity.

    First of all, I'll be giving you an overview of the supplementary estimates (B), the ostensible agenda item here, and then make some general remarks about the emphasis I'm placing on ensuring that we connect Canadians with the jobs of the future.

    I hope that committee members will be a little patient with me today. This department is a new mandate for me, a huge and complex mandate.

    Our department's budget is about $115 billion. It is the biggest budget of all federal departments. Our budget represents about 40% of federal government spending. We employ 23,000 people. Our department's activities affect more Canadians than any other department.

    We touch over 30 million clients in the various programs administered through ESDC, and so I'm on a very steep learning curve. I hope you'll be somewhat patient with me today. I will probably be more dependent on good and formative answers from my extremely competent officials than I was after five years at Immigration.

    With that in mind, let me say that I'm pleased to appear before you on supplementary estimates (B). Altogether, we're requesting $64 million in these supplementary estimates, and I'll break down each of the major line items.

    First of all, we're requesting $14.8 million to support the enabling accessibility fund, which is about construction and renovations to improve physical accessibility for persons with disabilities. The funding in these supplementary estimates would provide $1.16 million to administer the program and $13.65 million to fund small and mid-sized projects.

    We have a request for $13.3 million under the homelessness partnering strategy.

    The Homelessness Partnering Strategy helps gets homeless people off the streets and into homes. The funds requested are being reprofiled from Homelessness Partnership Strategy allocations in 2012-2013 that were unspent.

    Actual spending in that year was less than anticipated, for a number of reasons. First, the funds are distributed according to priorities set by local communities, and the partnership approach requires consultation to establish priorities in line with the partners. And that takes time. Second, some capital projects were delayed as a result of these consultations and by zoning and environmental assessment processes. Third, the short-term impacts of the transition to a more streamlined delivery model resulted in project delays for some of the communities.

    Next, Mr. Chairman, I'm requesting $11.9 million to support the first nations job fund, a significant commitment flowing from this year's economic action plan, to support the job training needs of on-reserve first nations income assistance recipients who are 18 to 24 years of age and living in communities that participate in the program. These expenditures will help to provide personal support for aboriginal youth as they secure the job and skills training that will help them get available jobs.

    Next, our department is requesting $10 million to fund new internships for recent post-secondary graduates through the Career Focus program. Budget 2013 announced $70 million over three years to support more than 5,000 paid internships for recent post-secondary graduates. In year one, the department is seeking $10 million, with $30 million being spent in years two and three. This funding will be used to provide wage subsidies to employers to give post-secondary graduates career-related work experiences to facilitate the transition to the labour market.

    Next, Mr. Chairman, we are requesting $8 million to increase aboriginal participation in the Canadian labour market through the skills and partnership fund, which is a demand-driven program that leverages partnerships from the private sector, provincial and territorial governments, learning institutions, and aboriginal organizations. Given the high volume of project proposals that we had to look at in the last fiscal year, $20.6 million went unspent, so we're now seeking to reprofile $8 million of that to the current fiscal year and $12.6 million to the next fiscal year.

    In budget 2012, Mr. Chairman, the government introduced the voluntary deferral of old age security pensions. This allows seniors the flexibility to defer receipt of the OAS basic pension up to the age of 70, in exchange for an actuarially adjusted pension. ESDC is requesting $3.1 million in the supplementary estimates to implement the program and, as well, $500,000 to create a Canadian employer disability forum, which is one of the recommendations that came out of the panel on labour market opportunities for persons with disabilities. I think the committee studied that issue and is familiar with the report.

    The ministry has found $1.3 million in offsets through the Canada student loan program and by implementing measures to reduce travel costs. That's noted in the estimates.

     We are including a number of statutory appropriations in the supplementary estimates, such as the $3 million announced in the budget for the Canadian National Institute for the Blind to help improve their library services.

    The supplementary estimates also include a $600,000 cost adjustment related to employee benefits plans, the majority of which is the result of a deferral of the OAS pension.

     Also, $2,000 is consequent to the creation of the Office of the Minister of State for Social Development.

    Finally, we will receive half a million dollars in transfers from Aboriginal Affairs and Northern Development to deliver youth programming with the Kativik Regional Government.

    The funds requested above through the supplementary estimates (B) will provide ESDC with the tools it needs in the coming year.

    Chairman, do I have any time left in my normal set-aside?

    You do.

    How much?

    You have two minutes.

    In that case, I would like to focus on an issue that troubles me greatly. A large number of Canadians have no jobs, yet there is a growing number of job vacancies. That is a paradox that has to be resolved.

    It's a really complex problem. As we all know, the aggregate labour market information we see from StatsCan suggests that there is not a grave or identifiable labour or skill shortage, and yet every single employer whom I meet and many unions tell me, particularly in the construction trades, for example, that they are currently experiencing very significant labour and skill shortages.

    This is an issue I've taken up with my provincial counterparts. I hope in my capacity to lead something of an informed national conversation on how we can do a better job, not just the federal government but also the provinces, educators, employers and unions, all of us together, in ensuring that Canadians have the skills necessary for the labour market and the economy of the future. It is unacceptable that we should see 13% youth unemployment, 14% unemployment amongst recent immigrants, and ridiculous levels of unemployment among aboriginal Canadians in the labour force precisely when we see employers complaining persistently about labour and skill shortages.

    I don't have time, obviously, to go into my detailed thoughts about some of the remedies, but I want to invite members of the committee to propose what they think are solutions: how we can increase labour force participation, mobility, interprovincial labour mobility, mutual recognition of credentials for professions and trades, accelerated foreign credential recognition for foreign-trained professionals; how we can perhaps have a stronger partnership with the provinces in the large transfers we give them through the Canada social transfer for post-secondary education to ensure that those dollars are getting maximum bang for the taxpayer's buck in preparing people for jobs; how we can ensure that ideas like the Canada job grant actually prepare people for real jobs and not fictitious ones, real ones in the labour market through an employer-led program; how we can increase private sector investment in skills development and job training.

    I think we need to be imaginative. I think we need to look beyond Canada to some other countries that perhaps have stronger models of education and skills development for the labour market.

    I just wanted to touch on that as a key priority for me, Chairman. I look forward to all of your questions. Merci beaucoup.

    Thank you very much, Minister.

    Having checked with our Standing Orders and our routine orders, the first rounds, when we have two panels, are five minutes each. That was what we had decided when we started. I just wanted to make sure that both sides of the table were aware that all rounds will be five minutes.

    We will start off with Ms. Sims for five minutes.

    Thank you very much.

    I want to first of all say thank you to the minister for making time available to come and meet with us today.

    As time is limited, Minister, I am going to get right to the chase, so to speak. One of the defences against the abundance of criticism that has come toward the proposed Canada job grant is that the LMA system is not working. You kind of alluded to that right now as well. But in a leaked internal document from HRSDC, now ESDC, which collated all of the provincial data, it was shown that 86% of those involved in LMA training had a job within two years. Those numbers are from departmental data.

    With an 86% success rate, I'm just wondering what kind of data you are using to say that it's not working.

     We're very short for time, so please keep your answer brief.

    Mr. Chairman, first of all, those evaluations are interesting but not comprehensive. They don't test, for example, a separate group that didn't go through the training to see what percentage of them ended up in the labour market.

    We do know that on a macro level we are not getting the job done, as governments. We are spending billions, more than virtually any other developed country, on skills development and job training, and yet we have unacceptably high levels of unemployment in various areas of our population, as I've identified, and a growing number of employers who are reporting skill and labour shortages.

    The idea here is I think basically common sense: it's employers, not government programs, that create jobs. If employers identify people with the aptitude to work specific incremental training programs from which they can benefit with a guaranteed job at the end of it, we are certain that will produce better results.

    Finally, let me say that I have not categorized the LMA project as a failure. I've said that I think there are some good projects that we're funding through the provinces and some that have less impressive results. I think it's a mixed bag.

    Minister, the provinces seem to think that the LMA system works, and there seems to be a lot of unanimity amongst our provinces. I would say that's very rare.

     Have you considered allocating new money to the Canada job grant, letting the other program go, or piloting a smaller version with new money first to see if this new approach is going to work?

    It's a reasonable question. In part, I would say yes, because in fact the proposal for the job grant would have it implemented through increments, starting with only a 15% allocation of the current LMA transfer to the provinces, and then ramping up to 60% eventually, which means the provinces would, after full implementation, maintain control over $200 million to spend on what they consider priority programs.

     In the first year, they would have 85% of their current funding to spend on their priority programs. If you want to call that a pilot approach, I would say it's a very gradual approach and that we can monitor results as we go.

    Let me say that I have expressed to the provinces an attitude of flexibility. I met with them three weeks ago, will be meeting with provincial colleagues again in 10 days, and look forward to their kind of counter-proposals. I want to say simply that if they have ideas about how we can do this better, we're all ears.

    Thank you.

    Minister, my next question has to do with the housing funding. You mentioned that as well. This was the money that was not spent on the homelessness partnering strategy, $16 million of it. What kinds of systems have you put in place going forward to prevent the same kinds of delays, so that funding allocated to help the most vulnerable Canadians can get out of the door in a timely manner?

    I don't think we need systems in place now, because we had to do the consultations, and that does take time. You would criticize us if we didn't do the consultations or if we did them in a rush. We have that information back from the local community partners, we've reprofiled the money into the next two fiscal years, and we're ready to roll.

    Would anyone like to add to that?

    Ian?

    I would only add, Minister and Chair, that some of the changes involved the community entity model and shifting the program development through them. That did result in some of the early delays as the communities shifted to that model. That is now done. That behind us, we anticipate that there will be a much more rapid flow.

    Thank you very much.

    Thank you.

    We'll move on to Mr. Armstrong.

    Thank you, Mr. Chair.

    Minister, I want to thank you and your officials for being here today and taking the time out of your busy schedule.

    Being an Atlantic Canadian, I'll say that our government has made some changes connecting Canadians with available jobs in the last couple of years, and we have heard some opposition protests towards this, as well as some different voices coming from the provinces. I wonder if you could talk a bit about employment insurance, the changes we've made, and the results you've seen so far.

    There have been a number of changes, as you know, Mr. Chairman, but the one that's received the most attention is connecting Canadians with available jobs. It was essentially a clarification of the longstanding rules implicit in the employment insurance system, that applicants for EI are required to actively seek and accept available work at their skill level in their local area. We have given a little more definition to what acceptable work and the local area are defined as—always to be applied with a flexibility by our officials.

     Basically, Mr. Chairman, the reason we implemented these clarified guidelines is that we saw a really strange paradox of a growing number of employers, even in regions of very high unemployment with large numbers of habitual EI recipients, filing labour market opinions to bring in workers from abroad. Frankly, it made no sense at all to me that someone from Thailand, the Philippines, or Russia would be willing to get on a plane and fly across the world to go to a community to do a job where people who have done precisely that job are down the street, or in the next village, collecting employment insurance.

    EI is supposed to be there, and it will be there, for folks who lose work through no fault of their own, and for whom no relevant work is available in their local area. Now there's been a lot of fearmongering about these changes. I can understand there's a lot of understandable anxiety. Whenever there's change, people are going to be anxious, especially when it relates to their income security. I get that 100%. We could have done a better job, perhaps, of communicating those changes, especially in areas where people are very dependent on EI.

    Having said that, I really do think some of this was just political fearmongering. I mentioned in question period that one member of Parliament was running around northern New Brunswick saying that this was the end of EI, the end of seasonal benefits, that these communities will be destroyed, that families would go into poverty—complete unadulterated balderdash, invented from whole cloth, and nothing to do with the rules. I followed those speeches and rallies and media stories, and it's interesting that none of them mentioned that the specific changes made were actually quite modest clarifications of the longstanding rules. Now we have the first seven months of data indicating that there has been virtually no negative impact on EI applicants as a result of connecting Canadians with available jobs.

    To give you one example in the province of Quebec, for the first seven months of this year versus the first seven months of 2012, there were 6,000 more people whose EI applications were not accepted. We looked a little more deeply into the data and found that only 160 of those people, as best we could tell, had their claims refused because they did not comply with the new requirements under connecting Canadians with available jobs, and that about 5,000 of those refused applicants were refused because we discovered they were living outside the country.

    That's not to say everyone who is refused is clearly way outside the rules, but it is to say that on debates like this, as elected political officials, we should not recklessly frighten people about their income security.

    Finally, I would like to say that we don't have comprehensive data to draw meaningful conclusions from this, but there's anecdotal evidence building from employers that we achieved the objective. I’ve heard from some fish processing plants in the east coast.

    I have also heard about the Regroupement des employeurs du secteur bioalimentaire, a Quebec organization, and from the Saint-Bruno ski resort, where the normal number of out-of-season workers has increased because of the changes we have made.

    We just want to encourage unemployed Canadians to be a little more active and to look for a job in their region. As of now, we are meeting our objectives.

    You have five seconds.

    Can you very quickly clarify, Minister, that none of those changes affected the requirements to qualify for the program. Is that accurate?

    No, they did not.

    Thank you for the shortened answer, Minister.

    Mr. Cuzner, go ahead.

    Thank you very much, Mr. Chair.

    I want to thank the minister and the officials for being here today.

    Minister, on the EI stuff, I'm not going there today. But it's incumbent, when politicians get engaged, that they tell the truth to the people. When we see a letter stating that EI recipients are receiving payment in 21 days in 80% of the cases, and it's signed by the minister and the minister does not know that notice of non-payment is also part of that measurement, then that gets people upset.

    But here's where I'm going. I'm starting this on a good footing, Minister. I know you work hard. I know you're a capable guy. Being smart, capable, and committed, then knowing your files is a step up. I think you can be a fixer. I appreciate at face value your offer to work with the committee and those around, and I thank you for that.

    Just with regard to the rationale for the jobs grant, I know the Prime Minister said “[It's] the biggest challenge our country faces”, and I know you're on record saying, “Those who say there is no skill shortages are facing a mismatch with reality”.

     Square the circle with the Don Drummond comments and the study from the TD.

    I wish I could.

    Mr. Cuzner, thank you for asking that question. That is perhaps the most important question this committee could answer. I've been actually quite nuanced. We politicians don't do nuance very well—let's admit it. At least I don't. But I've made an exception in this case to actually be nuanced and say that there's something going on here that I don't fully understand, because you're absolutely right: the Don Drummond and the TD reports and the Institute for Research on Public Policy—I could give you a long list—say that based on the aggregate StatsCan labour market information, there is not evidence of acute labour shortages now or in the forceable future. And yet, Mr. Cuzner, every single employer I meet—from the fish processing plant operators in your area to the people in the service industry and the computer gaming industry in Montreal and the IT industry in Toronto, to the agricultural operators in the west and those in the major construction industry—says their number one challenge is skills shortage. Cumulatively, I don't believe those organizations are lying. I don't believe they're making it up—

    I don't either. Would you agree, though, that it's more in certain areas of the country in certain sectors—

    For sure. Absolutely, that's exactly what I've said. Clearly, they're more acute.

    But the jobs grant seems to be this broad-based, one-size-fits-all approach to doing that. And you've said that you want to be flexible, but we're not seeing that yet. What we've seen so far is that you want to continue...that this is the answer, but it seems like too broad an approach to fix certain pockets of areas in certain industries.

    Let me clarify, Mr. Chairman, that I've never suggested, nor do I believe, that the Canada job grant is the solution to the paradox of too many jobs without people and too many people without jobs. I don't believe that for a moment.

    Let's put this in perspective. If the job grant is fully implemented, we're talking about $300 million out of the $1.6 trillion economy, from governments that spend cumulatively billions and billions on skills development. Ms. Sims talked about a pilot. It's not much bigger than the pilot. It's just one effort to try one different approach, an approach that works in Europe where the employers select the folks who get the training, where we leverage a larger private sector investment in training, and where there's a job at the end of it.

    I have time for one more question here, and it's just about the LMAs. The job grant and the LMA are two different beasts; they serve two different purposes. I see the principles behind the job grant. I think if it were funded separately, I could really buy into that and support that, but taking it from the LMA and asking the provinces.... You say you've had some victories but you're taking 60% of the funding out. What you're asking to be done with the LMA money is like asking your car to do the laundry. You're on record, Minister, referring to the LMAs—I know you know your own words—as “turn[ing] most of the people involved into 'habitual welfare recipients'”.

    No, I didn't say that. I said that many of the programs funded through those dollars by the—

    That's what we have as a quote for you, sir.

    No, I did not say “turns them into”. I said that the clients often are habitual welfare recipients, and that's true. Not all of them but many of them are, because they're on public assistance.

    There are many success stories. In the leaked document there is a fairly strong statement. They say that “a strong and continuing need exists for LMA programs and services.”

    That's the end of the questioning—

    But I want to end on the fact that I appreciate your gesture of working together.

    Okay.

    We'll go to Monsieur Boulerice for five minutes.

    Thank you, Mr. Minister. I am going to share my time with my colleague Ms. Groguhé.

    Mr. Minister, I would like to follow up on Ms. Sims' remarks about the Homelessness Partnering Strategy. Consultations are fine, but when the projects are so late and when the money set aside cannot be spent, that is not fine. Groups in the trenches are telling us that they cannot help the most disadvantaged, most vulnerable members of our society as they could. That is why the question of speed is a concern for us.

    Quebec has a unique approach that is unanimously accepted by all the partners, both elected officials and all the groups involved. Projects underway wrap up on March 30 next year. Are negotiations currently going on between the federal government and the Government of Quebec? What is the status of those negotiations? If the negotiations drag on, will current agreement be extended until the discussions are over?

    I have spoken with people from the Government of Quebec, and we are making progress. We believe that there will be an agreement, but I have no precise date.

    Perhaps Mr. Mennill may have something to add, since this is his file.

    My name is Jacques Paquette and I am the assistant deputy minister for the Income Security and Social Development Branch.

    Yes, at the moment, discussions are going on with the Government of Quebec. Everything is being considered, including any transition that may be necessary to ensure continuity in the services.

    Okay, thank you.

    Thank you for being here, Mr. Minister.

    My question is about the expenses. There is a transfer of $497,000 from the Department of Aboriginal Affairs and Northern Development to your department to support the Kativik Regional Government to streamline delivery of youth programming.

    What activities are involved and which programs do those activities relate to?

    Perhaps I can ask Mr. Séguin.

    I don't have a note in French.

    This funding is made available in the First Nations and Inuit Youth Employment Strategy at Aboriginal Affairs and Northern Development Canada. The strategy complements the programs and services provided by the Kativik Regional Government under the Aboriginal Skills and Employment Training Strategy operated by the Department of Human Resources and Skills Development. This transfer to the Kativik Regional Government has been made annually since 2005 and helps to streamline the delivery of services and the preparation of reports.

    So it will be about funding for skills and partnerships.

    Yes.

    Is that it exclusively, or will there be other programs? For example, does it exclude the mandatory work program on reserves?

    Yes, that is it exclusively.

    Okay.

    Do you feel that your department is better suited for that initiative than the original one? Why did you take it over?

    Mr. Chair, the two departments came to an agreement on this transfer so that the delivery of the services would better match the clients’ training needs.

    Will money from this fund be given directly to companies to train workers or will it go to training organizations? Basically, where will the money go?

    The funds are distributed by the Kativik administration according to its own priorities, to match placement opportunities and to respond to the institutions that provide the training.

    Okay, but does that mean that the companies will be in charge of setting up the training programs? Or will Kativik be looking after that? How will it happen?

    The companies will be involved to a great extent, but Kativik will make the decisions, according to the employment needs and opportunities.

    Okay.

     Thank you for that answer.

    Now we go to the government side, to Mr. Shory.

    Thank you, Chair.

    Thank you to the minister and his officials.

    Minister, one of the reasons I left my lucrative law practice—

    An hon. member: [Inaudible--Editor]

    Mr. Devinder Shory: —no, seriously—was my concern about the lack of foreign credential recognition. You know this is my passion.

    Now, I have told this story before, and I'll share it once again. I hear it very often that maybe the best place to have a heart attack in Calgary is the back seat of a taxi. The reason is that there's a very good chance the driver is a foreign-qualified doctor.

    I have been trying to understand over the last few years why on the one hand we have a skilled worker shortage that is of course holding back the economy, and on the other hand we have a long-standing problem with qualified newcomers being unable to apply their skills.

    Being as you're here today, can you please tell me what is being done to ensure that these individuals can have their credentials recognized sooner?

    I also understand that regulatory bodies are involved in this matter. Has your department reached out to those regulatory bodies?

    Yes, very robustly.

    Thank you, Mr. Shory, for your question and your commitment to this issue. I agree entirely, and at every opportunity I underscore how outrageous it is that we have been admitting over a quarter of a million permanent residents per year and yet 13% of new immigrants—those who have been in Canada for less than a decade—are unemployed, with of course many, many more underemployed; how this makes precisely no sense in the context of an economy with growing skill and labour shortages; and therefore how we must do a radically better job of facilitating the recognition of credentials of foreign-trained professionals and tradesmen.

    That is why, Mr. Shory, in 2006 our government created the foreign credential referral office—originally that was at HRSDC, and then it moved to Citizenship and Immigration Canada—which, among other things, funded the availability of pre-arrival orientation sessions for selected economic immigrants before they leave their countries of origin. After they've been selected and while they're wrapping up their affairs at home, they can now get free two-day seminars and personalized counselling that focuses on how to find a job in Canada and begin the credential recognition process perhaps online before they even get to the country, to give them a head start. It can also advise them on which provinces it's easier and quicker to obtain licensure in for their profession.

    Secondly, both the FCRO at Immigration Canada and the foreign credential recognition program at my ministry fund millions of dollars of grants and contributions every year to organizations, including licensing bodies, to do the detailed work of streamlining assessment exams.

    In one big project, a pan-Canadian framework for the assessment and recognition of foreign qualifications and credentials, we've invested in the range of $50 million, working with the provinces and their respective self-governing professional licensing bodies, to streamline and accelerate the process of credential recognition across the country, as much as possible coming up with common standards from coast to coast.

    This is not easy, simple work. It is very difficult, granular work that is being done. I do believe we are making progress, but at the end of the day, Mr. Shory, as you well know, we, the federal government, have no direct relationship with the licensing bodies. They are creatures of the provinces.

    That is why, at my recent meeting with provincial counterparts, I called on them yet again for renewed political commitment to removing unnecessary barriers to credential recognition and licensure for immigrants and frankly—let me be blunt—putting more pressure on those licensing bodies that continue to engage in old-school labour protectionism, that see immigrant professionals perhaps as some kind of a threat.

    As I always say, Mr. Shory, we don't want, and nor do immigrants expect us, to lower the Canadian standard. What they expect is at least an answer in a reasonable amount of time so that if the answer is “no” they can go and take additional education or perhaps move on to plan B.

    The last point is that we have all sorts of other programs, including one that I'm most proud of that started out of our city of Calgary, the Alberta Immigrant Access Fund. We've now helped make this a kind of national approach to providing microcredit of up to $10,000, delivered through non-profits, who work out relationships with financial institutions to provide bridge financing for foreign-trained professionals so they can take additional education and pay for their certification exams and actually get a basic income while they're going back to school so they can reach the Canadian standard.

    I think all of these small things together are having a cumulative effect.

    Thank you.

    Time goes fast, Mr. Shory. We know this happens frequently.

    On to Mr. Tremblay, from the opposition.

    Thank you, Mr. Chair.

    Thank you for coming to answer our questions, Mr. Kenney.

    I would like to go back to a visit by a witness to the Standing Committee on Finance. On November 18 of this year, François Masse, Chief of Labour, Market, Employment and Learning at the Department of Finance, stated that decisions on employment insurance were made independently of the $57 billion that had been in the fund.

    You are the minister responsible for the Employment Insurance Financing Board. Do you think it is appropriate for premium rates to be established with no consideration of the total amount of the fund?

    Some years ago, the government established a framework for determining the rates for premiums in order to make sure the fund is in balance in the medium term. The economy goes in cycles and the employment insurance fund is not balanced each year. Through the employment insurance commission, the government is assured of achieving a balance in the medium term.

    That said, the government did not want to increase premiums now, given that we are going through a period of difficult economic growth. That is why we froze premiums for the next three years. The announcement has been well received by employers. The policy is designed to create jobs.

    The minister before you admitted that no impact study had been conducted on employment insurance reform. Since that reform, a number of difficulties have arisen in some regions of the country and some sectors of the economy.

    Do you intend to take any steps, such as possible pilot projects, transitional initiatives or other mechanisms, to help with the difficulties that those regions and sectors are experiencing?

    The employment insurance program already contains provisions for regions with a high unemployment rate. Conditions are more generous in regions with a high unemployment rate. People in those regions have to work fewer weeks than people in a region like mine, in Alberta. The structure of the program already accounts for differences in the labour market in every corner of the country.

    Yet some transitional provisions have disappeared, measures that have been implemented pending the resolution of problems in given regions. Those measures have been abolished and have not been replaced.

    I understand that the rules of the game have changed since employment insurance was reformed. Claims are denied retroactively, and not just for next year. I am not sure if this is connected to the quota issue, or whatever else it may be. But, in the past, officials used to look for ways of doing things that were allowed, but that no longer are. Claimants can be asked to pay back $20,000, $30,000 or $40,000. It has happened to some people in my riding.

    I do not know exactly what you're talking about.

    Karen, can you answer?

    I'm not sure that I really understand the problem that you're talking about either. We are not seeing any large jumps in trends toward denying benefits. It is playing, more or less, quite steady around those who are paying into the program and are entitled to benefits. About 80% to 85% of people coming to file for claim are, indeed, deemed eligible and are receiving benefits. That hasn't changed an awful lot time over time at all.

    Under which circumstances can money be reclaimed retroactively?

    We try to reclaim benefits retroactively only if we find out that the claimant obtained them fraudulently. I believe that there is a process that determines whether a person has filed an irregular claim.

    Thank you very much.

    On to Mr. Mayes, from the government side, for five minutes.

    Thank you, Mr. Chair.

    Minister, it's great to see you here today.

     I was a former chair of the Standing Committee on Aboriginal Affairs and Northern Development, and also spent much of my youth in northern Canada. I've always had an interest in engaging aboriginal youth in attaining jobs and independence. I was glad to see that our Budget 2013 had $241 million over five years to provide skills training to youth on reserve.

    Could you explain a little about the main features of the new first nations job fund, and who's eligible and how that's rolling out?

    Also, could you just touch a bit on how the department is interacting with INAC on the rollout?

    Thank you very much, Mr. Mayes.

    You've identified what I think is perhaps the single most important thing we could do. We all know that our greatest social problems, sadly, tend to be experienced disproportionately by our aboriginal people. We recognize that much of the economic development occurring in our country is in aboriginal parts of the country and that many of the companies there are facing skills shortages.

    Anything we can do to prepare young Canadian aboriginals in particular for those jobs solves many problems at once: skills shortages, facilitating growth, and helping young aboriginal Canadians to realize their potential. That is why we are investing very significantly in aboriginal skills development, particularly through the first nations job fund, which, as you've identified, is committing $241 million to connect first nations youth between the ages of 18 and 24 with skills training and jobs.

    We do this in collaboration with first nations organizations in various regions of the country. We try to get feedback from them on their priorities. We encourage them to approach us, in partnership with employers as much as possible. We want to see a private sector commitment to that job training.

    Let me blunt. We are not going to succeed in getting unemployed young aboriginals into the workforce in significant numbers without a hard money commitment from the private sector. This is a larger message that I've been sending, by the way, to the private sector, which I hope my friends from the NDP would applaud. I have said that Canadian governments spend more than virtually any other governments in the developed world on skills development and job training, but the Canadian private sector, according to the OECD, is at the bottom end of the developed world in skills development and job training.

    As to Mr. Cuzner's reference to some of the aggregate labour market information, I'm very concerned. We keep hearing complaints, today from John Manley at the Council of Chief Executives, and last week the Canadian Chamber of Commerce—all those organizations—about skills shortages. Yet the labour market information tells us that wage levels on an aggregate basis have barely been keeping pace with inflation.

    I've said bluntly and publicly to employers that if they want a solution to the problem of the skills mismatch, they have two big market levers at their disposal. One is a greater investment in training that should focus on under-represented groups in the labour force, like aboriginals, and another is wage levels.

    I said that in Vancouver, Ms. Sims, and the only person who applauded me was Jim Sinclair from the B.C. Federation of Labour. So I am pleased to be onside—

    Ms. Jinny Jogindera Sims: And I have tried—

    Some hon. members: Oh, oh!

    Hon. Jason Kenney: There you are. I'm pleased to be onside with the brotherhood.

    Mr. Colin Mayes: I'm a little worried about that.

    Hon. Jason Kenney: I want to say that the mining companies, the extractive industries, that typically operate in northern and aboriginal areas need to come to the table. We're seeing more and more of that collaboration. It's very exciting.

    But let's be honest: there have been decades of experience with many of these programs that have failed. I think we have to study those that have succeeded, and the private sector commitment is key to that.

    We don't want to just fund a cycle of supporting organizations that take money for training for the sake of keeping their organizations afloat. That's not what this is about. We have to get the employers committing to hiring these people. There are some great examples. With Cameco, the uranium miner in northern Saskatchewan, approximately 50% of their workforce is aboriginal.

    All those other extractive companies...and they are making efforts, to their credit. I was in Saskatchewan on the weekend, and I was told by the Saskatchewan Apprenticeship and Trade Certification Commission that the number of young aboriginals registered for apprenticeship programs in that province is almost equivalent to the percentage of aboriginals in the Saskatchewan population. So there are some real signs for optimism.

    Thank you very much.

    That concludes this round.

    We'll go on to Madam Sims.

    Thank you, Minister.

    I'm glad you mentioned your speech in Vancouver, because I was told about your speech and had a conversation about it with Mr. Sinclair as well. We were—

    [Inaudible—Editor]

    I can tell you that I am just so delighted and we were so pleased to hear you say the obvious, and that is that companies and organizations have a role to play in training their workers.

    Also, you mentioned the OECD report. I was reading the same report. It was quite a shocker to me that the private sector in Canada is at the bottom for reinvesting in training and skills development of its workforce. I think those are obviously things we need to address, as well as the wages, the salaries.

    I've talked to some employers, too, Minister, because I feel that I need to really get in and hear what their concerns are. When you start discussing with them what they're paying for some of those jobs and the area that the jobs are being offered in, I want to say to them: “Would you be able to make a living off this? Do you have to wonder why people are not applying?”

    I really want to talk about good, quality child care. I know it's something that's really close to your heart, Minister. In this area, when we think of our children and our future, quality child care has social, economic, and health benefits for children and the parents, but I would say that it has a greater impact on our overall economy, and the economic gains should not be underestimated.

     There is proven evidence that a quality child care program actually gives the economy a boost, not only in the jobs it creates, but also in that you have fewer people who will take time off because their children are sick. People are more comfortable at work. They are not stressed out and worried about their children. Also, more people are able to re-enter the workforce because they can find quality day care.

    Yet government spending on early learning and child care in Canada falls far short of that in other OECD countries. I'm glad we mentioned the OECD earlier as well. Is it within your upcoming plans to work with the provinces and territories to make child care a priority?

    Well, I would say that we've already done that through our actions, which matter more than words. In fact, our government spends $6.5 billion per year on various programs to assist with childhood development, early childhood development, and child care, including, of course, the universal child care benefit, the tax measures such as the child care expense deduction, and the child tax credit.

     As well, of course, we have a number of other programs that alleviate families with children in poverty, which is one of the reasons, we're very proud to see, that the number of children living in poverty is down quite significantly over the past several years.

    So I think we are making progress in this respect.

    Minister, I want to pursue that a little. When you look at the economic gains of investing in a national child care program—and proven gains, because we can learn from other countries in Europe on this as well—it seems to me that when we're looking at lifting people out of poverty, I would point out that recent research indicates that one of the key indicators for lifting people out of poverty is also a quality child care program, because it makes it possible for people to go out to work. Then they pay taxes, and that feeds into the system.

    I know that you have listed things, but I'm really going to urge you, Minister, because I know how open-minded you are, to pursue this a little more in looking at a national program.

    Minister, I have one more question. It's something that niggles at one when lying in bed at night. It's the Canada job grant. It doesn't seem to address the problem it claims to solve. How will it solve the coming labour shortage, given that it is only for short-term training—for up to a year, I've heard recently in the media—while projected shortages are in occupations that require multiple years of schooling and/or training?

    Well, I'm delighted to hear that the job grant is keeping you up at night, Ms. Sims.

    Some hon. members: Oh, oh!

    Mr. Kenney, I can tell you, I was getting ready.

    Some hon. members: Oh, oh!

    A very quick answer, please.

    The answer is, it will not solve the skills gap problem. It is, we believe, one small but important effort at a much broader series of remedies that are needed to solve that problem.

    Why don't we try something different for once? Why don't we actually try engaging employers and identifying the folks who have the aptitude to work and try identifying the incremental training they'll receive with a guaranteed job at the end of it? In a sense, this is a simplified version of what works in parts of western Europe, which has much lower levels of youth unemployment and much more efficient labour markets.

    Thank you very much.

    On to the last questioner, Mrs. McLeod, and to the end of the first hour.

    Thank you, Mr. Chair.

    Thank you, Minister.

    I'm going to start by making a brief comment. I appreciated the thoughts on how this homelessness partnering strategy required some consultation, and some opportunities to get it going and flowing. I have to say that I see the results in the riding that I represent, Kamloops—Thompson—Cariboo. There's now actually a transfer, and there's a group that is very nimble and agile and are excellent at being strategic about what and how it gets funded.

    I hear regularly from the opposition calls for a national strategy on this and a national strategy on that, and, to be frank, I love the words “homelessness partnering strategy”, because what we're doing is supporting the people who know how to create the solutions in the community. That's just a general comment, but perhaps you could talk a little bit more about the model and why it's being developed.

    Sure. I have to admit, whenever I hear about a national strategy for X, Y, or Z—there's an endless list, and you could fill this room with proposals for national strategies—what I often actually hear is a national strategy for blank cheques for various other orders of government or organizations. Often those national strategies, I think, are essentially an expression of what economists would call rent-seeking behaviour.

    I believe in, as you've just intimated, the principle of subsidiarity. I believe that those orders of government, those organs of civil society, that are closer to real people and their lives on the ground are much more effective and efficient at solving social problems than the office towers in Ottawa. That's why, as a general philosophical statement, I think all of this talk about national strategies misses the point. It's the folks in Kamloops who know that they have a particular population, with particular needs with respect to homelessness, who are going to be far more effective. If we can be there to support them through things such as the homelessness partnership strategy, I think—I know—we'll get better results.

    Thank you.

    My next focus is how we support university program students, a conversation that I have fairly regularly when I meet with some of the students from universities. As you start to go through the list, you look at the transfers to the provinces, you look at the income tax writeoffs that are available, you look at things such as the Canada research grants and the whole host of ways the federal government supports students. Then we get into the conversation around the student loans. Again, it completely puzzles me—because there are a number of people who are able to support their children through university—why students would advocate for support for everyone, when, really, if you need to focus your resources, you need to focus them on the students who are perhaps most in need.

    I note that in the supplementary estimates (B), there's $1.3 to offset Canada student loans, but could you talk a little bit about the student loan program and it being a little bit more targeted? Again, to me, philosophically, why should the taxpayers help my children go to university when there are perhaps people who could use this support in a better way?

    That's a very broad question.

    I would say that your last point is quite right. I hear some interest groups—I won't mention names....Canadian Federation of Students—suggesting that there be basically “free” post-secondary education, of course it's not free. It's money taxed from people, taxed from wealth creators, taxed from small business people who are already working seven days a week to keep their heads above water.

    The data on this are clear and irrefutable, that those kinds of transfers, while important—and we of course have to support post-secondary education—represent an upward transfer of income in our society, often from working families or what we could call blue-collar families, or families of modest means, to families higher up the income spectrum.

    I wish the NDP would join us on this. We have to be very careful. We have to look at post-secondary education policy through a social equity lens. That's why our government, by the way, created the post-secondary education savings plan, which puts a grant into those accounts for low-income families. They may not have the capacity to save, but we're going to help to prime the pump so that when their kids turn 18, they have a few thousand dollars in the account and then the dream of university becomes a reality for them. That's the kind of thing we are doing for them right now in federal and post-secondary education policy.

    Thank you very much. That concludes the first hour of our meeting.

    Before we break, I'd like to thank you, Minister, on behalf of the committee, for being here and taking time out of your schedule to deal with our questions. I can also say, from observing the dialogue here today, that you never fail to show people how passionate you are about whatever task you undertake, and we thank you for that and your service to our country.

    Thank you very much.

    I will be back. Thank you very much.

    We'll take a short break while we bring in the second group.

    We'll reconvene.

    We welcome some new departmental officials to our witness table, but before doing that, I would like to remind committee members that in the second hour, the senior officials from the Department of Employment and Social Development have come here today prepared to answer questions on the supplementary estimates. I ask members to try to keep their questions to that topic.

    We welcome Paul Thompson, assistant deputy minister, processing and payment services branch, to the panel. We would also like to welcome Frank Vermaeten, senior assistant deputy minister, skills and employment branch, and Jacques Paquette, senior assistant deputy minister, income security and social development branch.

    Welcome to all. The other ones who were here are staying.

    There are no remarks from any of the officials, so we will embark on questioning from members of the committee. Again, please stay on the topic of the supplemental estimates.

    Madam Groguhé, you are first.

    Mr. Chair, my question is about the supplementary funds for the Enabling Accessibility Fund. I would like to know how and why the assessment was made that the allocation had to be increased.

    Thank you for the question.

    Actually, the budget has not increased. The program has been renewed. The program was established in 2008, in the amount of $15 million per year for a period of three years. It was then renewed.

    In the last budget, the government renewed this program for a longer period. In a way, these funds are the equivalent of a new program. What you see in the supplementary estimates is the total amount for the program for this year.

    So that means that the budgeted funds remain the same, but the time period has been renewed.

    Exactly.

    Very good.

    Is there a breakdown by province of the money used from that fund? Do we have an idea of the way in which those funds were used by the provinces? For example, does it appear that some provinces underuse them compared to others?

    Can you give us an idea of the status there?

    There are two points to make.

    First, the fund is administered nationally. There is no allocation by province. It operates on the basis of a call for proposals reflecting certain specific themes.

    The proposals submitted are then evaluated against the criteria and the funds are distributed to the best projects selected.

    Alright, since it is national, can you assess whether certain provinces submit fewer proposals, and, if so, which ones?

    I do not have the details here. However, there are a number of projects. For example, in the last three years, more than 700 projects were approved. It can also vary with the nature of the proposals requested.

    Ontario, for example, has its Accessibility for Ontarians with Disabilities Act. We have noticed a greater awareness by organizations. As a result, a lot of projects are submitted.

    Could we get those documents so that we can look at it a little more closely and see the breakdown?

    The list of approved projects is on the department's website.

    Very good, thank you. I will check out the site.

    Will the fund continue to focus on small and mid-size projects, as it has in the past?

    Yes, it will. The renewal changes nothing, but it adds an element. We have a project broadly aimed at making workplaces more accessible. That is a new element that takes nothing away from the rest. In terms of present projects, our call for proposals will target small businesses in order to increase their ability to integrate persons with disabilities.

    But the site is blocked. You cannot apply at the moment. Is that the intention?

    Yes, calls for proposals are made on fixed dates. On those dates, you have access to the submission information and all the criteria.

    When you go on the site and get nothing, it is because the application period is over. That means that we are currently analyzing the projects. The site will reopen when there is another call for proposals.

    Thank you. It's a little over time.

    Let's move on to Mr. Daniel.

    Thank you, Chair.

    And thank you, witnesses, for being here.

    I'm going to take the same kind of line in terms of disabilities. Our government has shown time and again that it cares greatly about the livelihoods of Canadians, and I was hoping that one of the departmental officials could update the committee on what the federal government and the Department of Employment and Social Development are doing for Canadians with disabilities.

    We've heard previously at the committee that people with disabilities are seriously disadvantaged when it comes to employment. Perhaps somebody can make a comment on that.

    I would say that there are several things the department is doing. In the supplementary estimates you will find some of these initiatives. The first one, of course, is the enabling accessibility fund, which was renewed on an ongoing basis. Before that, it was limited, and now it's on an ongoing basis of $15 million per year. That's really to increase the accessibility of buildings for people with disabilities.

    In the supplementary estimates we also have the announcement of the creation of a forum for employers, as a result of the recommendation of the panel that worked on the question of people with disabilities in the labour market. It was realized that there's a lot of willingness on the part of employers to hire more people with disabilities, but they needed to get better tools and share best practices amongst themselves. This is what the forum will do. It will bring employers together to allow them to work together to be able to increase their capacity to integrate people with disabilities.

    We have other programs within the department, such as the social development partnerships program, which has a component on disability that helps organizations to support the integration of people with disabilities, and there's a series of programs that are specifically related to the integration of people with disabilities in the labour market.

    Sorry, go ahead.

    I was just going to add, Chair, that I met recently with my provincial counterparts of deputy ministers of social services, and we had visiting us and speaking to us the members of the panel the minister referred to earlier. One of the members of that panel, Mark Wafer, was describing his extensive visits across the country with colleagues in business. He will go and meet and talk with just about any business or other group that invites him, and his analysis was that the continuing disadvantage or blockage, if you like, to the increased take-up of persons with disabilities in business is the continuing mythology and fear about the costs to the business of recruiting persons with disabilities of all kinds.

    He has made the case extensively—and that's what the forum is intended to facilitate—about the kind of productivity increases to businesses as a result of the employees they recruit; the improvements, the advantages to the brand of the business; and the potential for engagement with customers when they see, behind the counter or on the floor, individuals working for the company who have been recruited notwithstanding their disabilities.

    It was a very impressive presentation, and those are the kind of advances that we need to see in the marketplace.

    To follow up on that, that sounds great for all the younger folks, but obviously we have an aging community with more and more older folks becoming disabled. Are there any programs or support for those sorts of activities to support the seniors in our communities who have disabilities?

    Yes, I can say a few things. Of course, programs like the enabling accessibility fund can apply. Its purpose is to make buildings accessible, so that would also benefit seniors. There are other programs that look after seniors, such as the new horizons for seniors program, which has many elements. Among other things, the program aims to support seniors and keep them from becoming isolated, for example, and to make sure that they are supported so that they can remain committed and involved in their communities and so on.

    That's a way to make sure that the community keeps in touch with the seniors and vice versa, so that seniors continue to contribute to their communities.

    Thank you for that.

    We'll move on to Mr. Cuzner for five minutes.

    Thanks very much.

    I appreciate everybody being here today.

    I'd like to get a question in on the social security tribunal appeal. Who would be best to handle that? Both of you. Okay.

    This may seem like a trivial point, but it's right out of my constituency office, a couple of files. Most claimants are self-represented, but in the decisions that are rendered by the tribunal, there is no mention of appeals rights.They refer you to the tribunal website. Is that by design or is it an oversight? Do you see that as a shortcoming, given the fact that most claimants are self-represented, and it would be of benefit to them to have more information there on the rendering of those decisions?

    We can certainly take that suggestion on. We've implemented a new reconsideration phase, as you may know, within EI, where we do that initial review and we give the client the result of that review.

    We can certainly undertake to look at the quality of the instructions around the next steps in the appeal process—

    Yes. I think there are some who are very intimidated by the process now, or who are concerned, I guess, about the process now, so I would think that would be a worthwhile undertaking.

    Youth unemployment obviously remains a major concern, with the youth unemployment rate up over 13%. There are about 50,000 fewer youth jobs now than eight years ago. The funding in the YES program eight years ago was funding 115,000 to 118,000 young people each year. Last year it was down to about 60,000.

    What are we looking at this year in terms of the number that would benefit from that program? Could you share with me why it's been heading in this direction? And what can we do to reverse the trend? The funding's the same, I think, isn't it?

    The funding's the same. There has been a mix of supports, and there certainly have been changes over time.

    The youth employment strategy is around $300 million a year. The government's certainly invested in youth. For example, they announced in the economic action plan $70 million for career focus, which is part of the youth employment strategy, to provide internships for youth. That's certainly an important part.

    There are other supports that have been out there, such as the labour market agreements the government introduced, which increased the amount of funding that's going to youth. There's a whole range of programming out there. The youth employment strategy is certainly an important one.

    But with the transfers, would they be hived off? Would they be identified in the transfers to the provinces as particularly for youth?

    The labour market agreements and the labour market development agreements are there for multiple purposes, and certainly they're a big part of the supports we provide for provinces to help youth enter into the labour markets.

    So there is a fear, then, when we're looking at the clawback of the money with the LMAs, it may jeopardize in some provinces any further investment or continued investment in youth programming; that potential exists.

    In fact the funding for the labour market agreements isn't decreasing. It will continue to be $500 million. It's just the question of what tools the provinces and territories will use to support youth and to support the labour markets.

    In the case of the Canada job grant here, the goal is to try to make the labour market agreements more effective by getting employers involved and helping youth and others transition into the workforce as fast as possible.

    You say the funding is remaining the same, but now the funding is being specified for the job grant from the LMA.

    Yes, the funding is going to be specified for the job grant. The purpose, though, is to make the funding more effective.

    I think as well, Chair, there's no single program other than the youth employment strategy that is specifically targeted at youth—although, as was discussed earlier, the first nations job fund, just from the demographics of that, is targeted at 18- to 24-year-old aboriginals on reserve. So that's another piece of the jigsaw puzzle.

    The supplementary (B)s do contain an additional $70 million in that career focus component of the youth employment strategy, so that is additional. One of the key concerns is that first attachment to the labour market on the part of young people, and that's what drove that additional investment.

    The other component is the skills link stream of the youth employment strategy with, I believe, consistent or stable funding, which is, as you know, directed to youth who face particular barriers in coming into the job market.

    That's the end of the time. You're way over, Mr. Cuzner.

    Monsieur Boulerice.

    Thank you very much, Mr. Chair.

    Thank you for being here, everyone. There really are a lot of you. Lots of you might have pertinent information for us.

    Essentially, my questions are going to be about the Homelessness Partnering Strategy.

    If we refer to the 2012-2013 Departmental Performance Report, we see that the program under-spent its planned spending on projects to assist the homeless by almost 10%. That is almost $13 million. Though an amount of $12.8 million was budgeted and set aside, it was never spent. I would like to understand what happened and what we have to do to make sure it does not happen again.

    I have spoken to people from organizations in Montreal who, too often, have seen projects fall through because they had to wait too long for an answer. They cannot go back and they cannot pay people for the work that should have been done six months ago, but that eventually did not get done.

    There is some resentment. They know that they are short of grants and short of money and that, in the street, the needs are great. Money has been set aside for action but they just wait and wait.

    Why did that happen in 2012-2013? What do you plan on doing to improve the situation and prevent it from happening again?

    First, I must mention that the funds that were not spent last year have been brought forward to this year. The funds have not disappeared.

    However, the minister mentioned some of the reasons why we had difficulties of that kind. The main reason why some funds had to be delayed is that there were a lot of infrastructure projects associated with this program. There, this program is not unique. It often happens that infrastructure projects undergo delays because of factors that are sometimes beyond the control of the people who established them.

    That is why we made sure that the amounts were brought forward. The need for the infrastructures remains and the funds are used to finish the infrastructure projects that have been set up. That is the main reason why the funds were brought forward.

    In the report—

    Most of the funds you see in the supplementary estimates (B) today are actually associated with infrastructure projects that were not completed in time.

    If I am not mistaken, the amount unallocated in 2012-2013 was $12.8 million and today, in the supplementary estimates (B), you are asking for $13.3 million. Am I to understand that part of the $13.3 million is the $12.8 million that stayed in the kitty or is this an additional $13.3 million?

    No, it is—

    If it was not used, it was brought forward?

    Correct. In the supplementary estimates (B), when we bring money forward to a subsequent year, it is not new money but unspent money that we are spending this year, if you see what I mean.

    Okay. That means that of the $13.3 million requested in the supplementary estimates (B), only $500,000 corresponds to new funds. The two figures aren't exactly the same; there's a $0.5 million discrepancy.

    Perhaps I could shed some light on that.

    There is a real amount that was not used at the end of the year. There is a discrepancy between the expenditures for 2012-13 and the authorized amounts for that same period. At the end of the year, the amount was $16.3 million. An amount of $13 million was reprofiled in supplementary estimates (B), which you are looking at today, and there is $3 million for 2014-15. That means that the full amount that was not used was carried forward to future years, in other words this year and next year.

    Right.

    Thank you very much for that clarification.

     You have 10 seconds. Would you like to end? You just used up the 10 seconds. Time does go quickly.

    We'll go on to Mr. Butt.

    Thank you very much, Mr. Chair.

     I thank all of you for being here today.

    My questions will be focusing on the housing side of the department as well.

    Let's do a little follow-up on the homelessness partnering strategy. In my previous life, I was directly involved with a program in Toronto known as streets to homes, which was funded through the HPS program.

    Could somebody explain a little more and give us some examples of the types of programs we are funding through HPS? As I understand, it's direct federal-to-municipal government funding; I think we bypass the provinces. We provide money directly on the ground in communities for direct homelessness prevention work, which I think is tremendous. That's exactly what we should be doing: getting money directly on the ground in communities is making a difference.

    Other than the streets-to-homes program that I'm familiar with in the city of Toronto, can you give me some other examples of the kinds of programming that HPS is funding?

    Yes.

     I should add that there's one exception. With Quebec, there's a joint agreement with the departments in Quebec for the implementation, but otherwise, you're right: this is really a community-based approach.

    As the minister said, people on the ground know better the type of solution that should be brought forward. What we are doing essentially is that we are asking the communities, the major urban centres across the country where there are homelessness issues, to develop a community plan. The community plan has major advantages.

    The first advantage is that they're looking at the overall issue of how they are going to address it. Second, they bring together all the key players around the table. This includes municipalities, not-for-profits, for profits, provincial authorities, and so on. They can coordinate and integrate the services to address the issues on the ground.

    At the federal government level, we look at the plan and the priorities they are putting forward, and then we provide them with the funds. They're the ones who then will select the right projects to implement. That will vary from one city to the other, depending on the nature of the problems they're facing, and also on the types of services already in place.

    It can vary a lot. We were talking about capital projects, for example. One way of using the HPS money is to refit apartments to make them available for permanent housing for some of the homeless people we're trying to get off the street. In other cases, it's to provide some kind of service; I'm thinking of social services. As you know, people on the street are facing a multitude of problems that you need to address, so you need people to be able to do that. That's where you can get the right people to do that.

    Those are the types of projects that could be funded through HPS.

    At the end of the day, what we're really looking forward to are results, where there will be a reduction in the number of homeless people across the country.

    In the economic action plan 2013, the Minister of Finance announced a five-year renewal of HPS as well as a five-year renewal of the affordable housing initiative.

    Where are we on the status of our negotiations and discussions with our provincial partners? This is new funding, effective April 1 of next year.

     Where are we now in our discussions with the provinces around the renewal of the affordable housing initiative and on signing those agreements? I do know that the agreements are slightly different, given different provinces. Different provinces have different affordable housing needs: you can't compare P.E.I. with downtown Toronto, and you can't compare Toronto with the Yukon.

    When we're negotiating these agreements, we know we must have flexibility. We know we must have a sense of reality of what the housing needs and situations are in different parts of the country.

    Can you give me a quick update—I'm sure that will be the end of my time—as to where we are on the renewal of those agreements, considering they'll be effective on April 1, 2014?

    We're already over time, Mr. Butt. Someone might address that in a future question, perhaps from the government side. You could do it that way. But you were actually over time, Mr. Butt.

    I'll move to Madam Sims.

    Thank you very much.

    We are hearing a lot about the skills shortage and that skills training is a priority of the government. But when I looked at the figures from the public accounts, the government has sat on over $138 million that had been approved to support skills and job creation, rather than transferring that money to organizations, cities, aboriginal bands, and post-secondary institutions. All, by the way, could have used those funds to support skills training, essential skills, literacy, and job experience. Of those funds, 11% was earmarked for apprenticeships. In the budget the government had 20% for grants to diverse organizations, including private sector and industry groups to support the competitiveness of the Canadian workplace through skills training.

    All of that money just did not get spent. I'm wondering if you can comment on these training investments and why they did not take place?

    I suspect you are referring to the lapse of funds in some of these programs. I can't speak to all the details and permutations, as there are very many programs. Many will be reprofiled.

    You talked about skills.... I have to make sure I get the right ones here. It's not apprenticeship grants, but there are labour market agreements, and we have reprofiled many of these. For example, the labour market agreements at $24.7 million. I'd have to look at the various programs that we have. Many are reprofiled into future years.

    Maybe you could get back to us with that through the clerk. That way we can all have that information. When you say “reprofiled” are you saying the money is moved forward into this year?

    That's right.

    Is that in addition to the money that would have been allocated this year, so that it's an added amount?

    Yes. It could also be moved into future years as well. We've got a few programs with that.

    Thank you for that clarification.

    But one of the big concerns I have is that when I've met with some of the post-secondary institutions that are looking at training, they are very concerned about the additional resources they need. Yet we had resources that didn't get used.

    The other question I have is based on a comment made by Michael Mendelson, a public policy specialist at the Caledon Institute of Social Policy, that Ottawa lacks the capacity to administer $900 million a year in training funds with the oversight that such an endeavour would require. He referenced some things in Europe as well.

    He went on to suggest that as planned, the Canada job grant is risky and has the potential for a good deal of abuse and fraud. I have to admit that I share a similar concern. Can you comment on that.

    Mr. Armstrong.

    On a point of order, what has that got to do with the supplementary estimates (B), insofar as the Canada job grant is not part of these estimates?

    I'm going to allow some latitude to allow you to get to the point. You have about a minute left. Get to the point please.

    Basically I want to ask what checks and balances are going to be put in place to ensure that the money is used in the way it is intended?

    I would just reply very briefly, Chair, that before the department spends any money on any program, we make very sure that the appropriate accountability and performance measurement regime is in place.

    But I would also just refer to the minister's comments that the government fervently hopes to reach agreements with the provinces so that the Canada job grant becomes part of their delivery. That's the government's objective.

    Thank you for that response.

    I'm going to excuse myself from the chair now, members, just so you know, which ties in nicely with some parts of today's discussion, because I need to get to the House of Commons for the tabling of my motion entitled “Strengthening Employment for Canadians with Disabilities.”

    Madam Sims as vice-chair is going to take over the balance of the meeting.

    Mr. Armstrong, you're next.

    Thank you, Madam Chair.

    I guess I'm really going to focus on supplementary estimates (B) now.

    I'll give you the same latitude.

    Thank you very much. I appreciate that, Madam Chair.

    Congratulations and welcome to the chair. I think it's the first time you have taken the chair in this committee.

    We're going to be doing a study after Christmas—we're actually starting this week—on the assets program. I notice that supplementary estimates (B) ask for $11.9 million for the first nations job fund for job training.

    Can you expand a bit on what that's going to be applied to?

    The funding for the first nations job fund, Chair, is not the same as the funding for the assets program, but it will be distributed, we hope in the vast majority of cases, to what we refer to as assets holders. These are the service providers—there are about 80 of them across the country—who are the direct service providers for aboriginal skills and employment training in the communities across the country.

    The first nations job fund is the fund that has been set up in employment social development, which, together with the enhanced service delivery funding that has gone to Aboriginal Affairs and Northern Development, works to identify the most promising communities in which current income assistance clients, young people on reserve, will instead of income assistance be receiving pre-employment supports delivered through Aboriginal Affairs and Northern Development and employment training funded out of the first nations job fund.

    The two really come together between the two departments, and our part of the services are provided through what we refer to as the assets network. The baseline funding for aboriginal skills development is provided through the assets network as a separate budget item.

    Thank you very much.

    I do want to give an opportunity for the officials to answer Mr. Butt's questions, which he asked in the last round. So if anyone would respond....

    I would just say those negotiations with the provinces on the affordable housing agreements are beginning. Our colleague, Steven Mennill, from the Canada Mortgage and Housing Corporation could add detail if you wish.

    Thank you.

    As you may know, we have existing agreements in place with all provinces and territories until March 31, 2014. The government announced a five-year extension to that program, and we are currently in the process of negotiating that five-year extension with all provinces and territories.

    My last question has to do with the deferral of the OAS recipients. I think in the supplementary estimates (B) there's $3.1 million to be applied to the administration of this new program we put in place.

    Can you expand on why this is so important to give our needy seniors more flexibility as to when they receive their OAS benefit?

    I can answer that. What was put in place in fact is something that provides more flexibility to people. Before of course OAS was available when you reached 65 years old.

    The deferral will allow you, if you choose to do so, to defer it as long as you wish, up to age 70. A calculation is done based on actuarial costs, which means you will increase in fact by 7.2% each year you defer the amount of your benefit for the rest of your life.

    It adds flexibility so that if someone decides to keep working, for example, to remain in the labour market past 65, they can decide to postpone the receipt of OAS without losing any money. In a way, because of the actuarial calculation, over the period of time they will receive the same amount without losing anything.

     So that adds a lot of flexibility, and of course it's related to the fact that the labour market is evolving with the demographic challenges society is facing. People are aging, and we know that if people are extending their participation in the labour market, that will also help the entire country to deal with some of the pressure we might be facing. So it's to have that flexibility, and it's an additional choice for people.

    Thank you. You are out of time, sorry.

    I'm going to go over to M. Boulerice, to be shared with M. Tremblay.

    You already know that.

    Thank you, Madam Chair.

    Now I can ask the question I couldn't ask earlier when I only had 10 seconds left.

    I'd like to come back to my pet topic today: the homelessness partnership strategy.

    The budget already sets out $134 million. You're asking for an additional $13.3 million, an amount that hasn't been spent previously. So we have a total of $147.3 million. Budget 2013 sets out $119 million per year over five years.

    Between this year and next year, the funds allocated will decrease by $28 million, or a little less if we take into account the additional $3 million. Those are considerable amounts that are being lost. What that means is that the groups will have much fewer resources available to them.

    What do you think the impact of this decrease will be on successfully addressing homelessness?

    Those are two different things. There is the base budget and the amounts that were not spent, but they will be spent.

    The program was renewed for five years. In the past, the renewals were two or three years, for example. Some challenges about activity planning were mentioned. But if organizations know that an amount will be allocated over five years, things will be more stable for them. Being able to count on that amount will probably make things much easier for them. Since funding will be more stable, it will be easier to spend the money as planned in the coming years.

    I spoke about infrastructure programs. Once completed, it's much simpler. We agree that it's an accumulated amount that will be spent in the end. It will provide a good basis to continue the program. I don't think there will be a trickle down effect. On the contrary, we'll be able to spend what should be spent. Then, we can focus on what is normally the base envelope.

    Suppose I have a three-year contract, and I earn $75,000 a year. If my contract is renewed for five years and I now earn $50,000 a year, I will still be making less per year.

    We're talking about base funding. Community funding isn't changing. It will stay the same. You seem to be alluding to the amounts that haven't been spent, but they will be.

    Even if we set aside the non-allocated amount of $13 million, the amount has still gone from $134 million to $119 million.

    There will be no difference in the transfer of funds for the communities. The amounts will be the same. The decrease in the budget is mainly related to the fact that we have redirected how we operate within the department to do things better and lower costs. Furthermore, the fact that planning can be done on a five-year basis will lower costs for the communities and for us.

    How much time do I have left, Madam Chair?

    You actually have just over a minute, but start.

    Okay. I'll try to ask my question quickly.

    In 2002, the Auditor General said that the employment insurance fund was consolidated with the government's financial statements. It was then separated, but the decision has now been abolished.

    I would like to know whether there is something planned to avoid the problem that arose at the time and that will resurface if we don't separate these budgets. In fact, the Canada Employment Insurance Financing Board was abolished. Is something planned to compensate for that?

    Thank you.

    If I understand your question correctly, there was a body put in place to set the rates for the employment insurance account, and the government has announced that this body will no longer be setting the rates. It will be done now by the commission.

    Excuse me, sir. I hate to do this but the five minutes is up. In the next round I will be going back to Mr. Tremblay to share with Madame Groguhé. Just hold on to your answer, please.

    I want to make sure everybody gets their time fairly.

    The next speaker is Mr. Shory.

    Thank you, Madam Chair, and my thanks to the witnesses once again as well.

    As our previous budgets and actions have shown, ensuring increased participation in our Canadian labour market by members of the first nations communities is very important to our government. Minister Kenney, when he was here, alluded to the importance of first nations participation. That could also be a solution to some skills we are lacking in Canada.

    My question is, what is the Department of Employment and Social Development doing to increase aboriginal participation in the Canadian labour market? Also, could you update the committee on what the skills and partnership fund will do for Canadians?

    Perhaps I could begin and then Mr. Vermaeten could add some detail on the skills and partnership fund.

    There are three principal programs in the department targeted at improving the employability and skills of aboriginal Canadians. The first is the assets program, which is what I would call the base programming for aboriginal communities across the country. We have agreements with third-party providers who work with the communities, training institutions, employers. Frequently, the objective is to improve the skill levels. It's not always directly tied to employment prospects. There's tremendous diversity across the communities in receipt of these funds—some are very remote communities, some are semi-urban or closer to urban centres.

    The second program I'd refer to is the first nations job fund, which is oriented specifically to younger aboriginal people on reserve who are in receipt of income assistance. The objective is to take people from communities on reserve that decide to participate, typically because economic opportunity will have been identified. We anticipate a very positive engagement between employers, the two departments engaged in this, and the training institutions to improve skills.

    The third one is the skills and partnership fund, which is deliberately oriented towards private sector training institutions. The training is project-driven. There are clear economic opportunities, and we have engaged in some specific calls for proposals from industry.

    Frank, you might want to add a word or two on those calls for proposals and the results we've had.

    The skills and partnership fund is a true partnership program where we put out a call for proposals. We're looking for industry to invest in people. We put out a call for proposals and we get various companies. They tend to be the larger companies that are interested in taking a group of aboriginals and giving them a full suite of training so that they end up with a job at the end of it.

    You'll have a project where the government, through the skills and partnership fund, might invest $10 million while the private sector might invest a similar amount. Other partners join in too, such as provinces and territories. Together they pool their funding, and they bring a group of individuals through training, on-the-job experiences. In many cases, they end up with jobs. We've had tremendous success with this program over the years. It's one that's very popular for the industry because they see it as a way to have the demand-driven training that helps train people to suit their needs.

    Thank you very much. Your time is up. I know that time goes quickly when you're having fun.

    Mr. Tremblay, I'll go back to you for two minutes, and then we're going to have a vote.

    The fact that the employment insurance fund and the government financial statements were consolidated, which will still be the case, had a significant impact on the government's overall financial outcomes. The government often ended up with a surplus that seemed to be much larger than it was in reality.

    Is there anything planned to compensate for the loss of the Canada Employment Insurance Financing Board?

    Perhaps I'll just finish what I was saying to make sure I'm answering the question properly and giving you a better understanding. As I was saying, we had the Canada Employment Insurance Financing Board when there was a different rate-setting mechanism.

     The government came along and first limited the rate increase, because the premium rate was set to go up. The government said, “We're going to cap that rate at $1.88 for a number of years.” The concern was that if rates were to go up with the economy still not fully recovered.... They didn't want those rates to go up so they capped those rates.

    The other important thing that they did in the last budget was to set in place a new rate-setting mechanism based on a seven-year outlook of the economy. The idea was to provide counter-cyclical support. You set a rate that's very stable. Even if the economy were to go down, the rate wouldn't automatically go up. Instead, it would remain stable and provide support to the economy.

    In short, the Canada Employment Insurance Commission is being used to set the rate now because of the new rate-setting mechanism.

    Thank you so much.

    On behalf of the committee, I want to thank all of you for giving us your time and expertise and answering our questions. We look forward to the information you're going to provide on one of the questions. So once again, thank you.

    We have a series of votes on the estimates right now.

    (Votes 1b and 5b agreed to)

    The Chair: Shall the chair report to the House votes 1b and 5b under Human Resources and Skills Development?

    Some hon. members: Agreed.

    The Chair: Thank you very much.

    Just so you all know, we're at 5:29 and managed to do all those things within the allocated time. So you get early dismissal.

    The meeting is adjourned.