I call the meeting to order.
Good afternoon, colleagues, all those who are here with us in the gallery, and our witnesses. This is meeting 115 of the Standing Committee on Public Accounts on Monday, October 29, 2018.
We're here today in consideration of report 6, on employment training for indigenous people by Employment and Social Development Canada, in the 2018 spring reports of the Auditor General of Canada.
We're honoured to have with us, from the Office of the Auditor General, Mr. Michael Ferguson, Auditor General of Canada, and Mr. Glenn Wheeler, principal.
From the Department of Employment and Social Development, we have Mr. Graham Flack, deputy minister; Ms. Leslie MacLean, senior associate deputy minister and chief operating officer for Service Canada; and Ms. Rachel Wernick, senior assistant deputy minister, skills and employment branch.
We apologize for our late coming. We had votes in the House. Thank you for your patience and for bearing with us. We look forward to your testimony.
We invite our Auditor General, Mr. Ferguson, to open.
Mr. Chair, thank you for this opportunity to discuss our report on employment training for indigenous people.
The work on this audit was completed in December 2017, and we have not audited actions taken by Employment and Social Development Canada since then.
Many indigenous people face barriers to sustain employment, and have low wages. This audit examined how Employment and Social Development Canada managed two programs: the Aboriginal Skills and Employment Training Strategy and the Skills and Partnership Fund. The common goal of these two programs was to increase the number of indigenous people who had sustainable and meaningful employment. For both of these programs, the department worked with indigenous organizations across the country that provided training and employment support to first nations, Metis and Inuit clients.
Overall, we found that the department could not demonstrate that these programs increased the number of indigenous people getting jobs and staying employed.
Specifically, we found that the department did not define the performance indicators necessary to demonstrate whether the programs were meeting their objectives. For example, the department established an annual target for the number of clients employed after receiving services; however, it counted any employment obtained as a successful outcome, whether the work was short time, seasonal, part time or full time. This means that it didn't know how successful the programs were in helping clients find sustainable employment.
We also found that the department didn't do enough to ensure the completeness and accuracy of the data it obtained from indigenous organizations on the results their clients had achieved after receiving services. Notably, the department didn't know whether more than 20% of all clients who received services actually found a job or went back to school.
Furthermore, while the department used employment insurance data to verify whether clients were employed, it was able to do so for only about 10% of the program's clients.
We found that the department didn't analyze the program data it collected to identify trends, problems or good practices that could help indigenous organizations improve their services and results. For example, the department spent $130 million between 2010-11 and 2016-17 fiscal years on wage subsidies for employers who hired clients for a specific length of time. However, the department didn't track whether these clients continued working after the subsidy ended or whether they found other work.
We also found that the department allocated funding to indigenous organizations under the aboriginal skills and employment training strategy on the basis of 1996 population and socio-economic data that did not reflect the current needs of the population served.
In addition, the department didn't consider individual indigenous organizations' past success at helping clients find jobs as a means to redistribute funds to those that had demonstrated the capacity to achieve better results.
The department supported indigenous organizations by providing them with guidance and administrative direction, and it worked to reduce their administrative burden. However, it did not provide them with sufficient market information to help them determine which services they should provide to help clients prepare for and find available jobs.
In addition, the department did not consistently monitor indigenous organizations to ensure that they fulfilled their obligations under funding agreements, nor did it use the information from the monitoring it did to know how well the programs were working. This means that it missed the opportunity to explore ways to improve program delivery and to identify systemic issues requiring attention.
We made eight recommendations. Employment and Social Development Canada agreed with all of them and has prepared an action plan to address them.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have.
Good afternoon, Mr. Chair.
I'd like to begin by thanking the members of the committee for inviting me here. I would like to take you through a quick update on the status of our work to implement the eight recommendations.
I'd like to acknowledge that we are gathered on traditional unceded Algonquin territory. This is particularly significant for these programs, the aboriginal skills and employment training strategy and the skills and partnership fund, which are delivered, as you know, in close collaboration with indigenous partners. As a result, we are co-developing the responses to the recommendations with indigenous peoples, which reflects our commitment to reconciliation and to advancing a renewed relationship based on respect, co-operation and partnership. We're convinced that this collaborative approach will allow our partners to better tailor the programs to the unique and diverse needs of their clients and their communities.
We are applying all of the lessons from the previous programs in the implementation of the recommendations as we shift to the newly announced indigenous skills and employment training program announced in the budget and also as we continue to make improvements to the SPF, the skills and partnership fund.
Recommendation 1 refers to the need for a performance management strategy with clearly defined indicators and targets. Since this spring, we've been engaging with our partners across this country on a distinctions basis to co-develop a new performance management strategy. The new framework focuses on measuring the program objectives to reduce the skills gap between indigenous and non-indigenous people by 50% and the employment gap by 25%. It includes strengthened indicators and enhanced reporting on post-program results.
We will also provide new tools and training to partner organizations to support their implementation of this more robust approach. We are on track to have that new co-developed performance measurement framework in place when the new program launches in April of 2019.
Recommendation 2 focuses on working in collaboration with agreement holders to identify, collect, confirm and analyze program data. In September, more than 150 people participated in a national data workshop to work through the collection of data and the management and analysis of that information to support results measurement.
Indicators of success are being co-developed to ensure that the outcomes of the program are meaningful to the individual communities and organizations that deliver the program. We are also on track to put the data and tools in place to support improved reporting on results and inform the design of interventions and services by April 1, 2019.
Recommendation 3 refers to funding allocation. As you know, budget 2018 provided additional investments of approximately $99.4 million per year. We have been working with indigenous organizations to develop an allocation approach for these new funds on the basis of distinctions-based funding streams. Allocations will consider factors such as current employment rates, unemployment gaps between indigenous and non-indigenous populations, and population density and growth. This new allocation model is on track to be implemented by the beginning of the new fiscal year.
Recommendation 4 speaks to the potential for overlap between programs and with the provinces and territories.
While both ASETS and the SPF have the objective of improving indigenous employment, we are confident they are complementary in design and approach. We will ensure the new ISET, like its predecessor ASETS, will also be complementary with the SPF.
With respect to provinces and territories, under the terms of the labour market transfer agreements, we have regular bilateral discussions on program complementarity. We have increased the emphasis on indigenous programming, with specific workshops dedicated to enhancing coordination of efforts. These have already been completed in western provinces, and will be ruled out in other provinces and territories in the coming months.
Recommendation 5 indicates the need to identify and provide labour market information that will support indigenous organizations in aligning with demand in their regions. This is one of the most challenging areas, given that existing tools are not able to provide high-quality, highly localized labour market information anywhere in the country—not just for indigenous communities, but in any community.
Highly localized labour market information has to be built from the ground up and tested. We have a survey pilot under way in four first nations communities, which will be expanded to 44 over three years. It will collect community-level data and create skills inventories that will better support labour market planning, training approaches and matching clients with available jobs. We will apply the lessons learned from this pilot across the service delivery network.
In the meantime, we've also created distinctions-based working groups to determine what labour market information will be most useful going forward. In addition, building on what we have to do by April 2019, we will link delivery organizations to the existing job bank data.
Recommendations 6 to 8 focus on reducing administrative burden and the monitoring of funding agreements. Further to extensive consultations with partners, we have already begun implementing changes that streamline financial and administrative reporting requirements. In addition, we will be implementing a new risk-based approach.
High-capacity organizations with a strong track record will see their administrative burden from reporting reduced. This will allow us to focus our efforts on organizations with a weaker track record and build their capacity to meet accountability requirements.
Again, thank you for the opportunity to appear before you today.
If you permit me a small personal note, while I have only been on the job for three weeks, I want to make it clear that I view my role as chief accounting officer not just as being accountable for the actions the department is taking now and will take in the future, but I am accountable to you for all actions it has taken in the past, and I will do my best to uphold that accountability to you for those past actions as well.
I would be happy to take your questions.
I just want to add my strong support for the issue Mr. Arya has raised. We've talked about this issue before and we've said that maybe we need to change the policy. Our policy is that we don't normally call in previous deputies, but nothing's changing. I have great respect for what the deputy has said, but as a matter of policy, how many times have we had deputies say to us, “I wasn't there; I can't answer”?
If you can't answer, you can't give accountability. If there's no accountability, there's no democracy. When the time comes to look at this again, I think it's a very good idea. Maybe we should be looking at a policy change to deal with what the government just refuses to do, which is to put deputies in place and keep them there for a while.
Mr. Chair, I understand the comments made by my colleagues Mr. Arya and Mr. Christopherson. However, I appreciate that the deputy minister mentioned in his opening statement that even though he has only been in the position for three weeks, he wanted to make sure that he could answer our questions; he also said that he is responsible for questions arising from the Auditor General's report, and for activities in his department over the past years. I appreciate this.
I would also like to thank Mr. Ferguson for his report, which highlights certain concerns and provides the Department of Employment and Social Development with an opportunity to give us some clarifications, on its action plan in particular.
I'd like to start with a question for the department representatives. In his report, the Auditor General mentioned that the unemployment rate in indigenous communities was about 11%. That is, of course, an average, since the unemployment rate is much higher than that in some communities.
I will ask my first question. Can you remind us of what the department is doing to ensure that employment and training programs for indigenous communities will be more effective and better focused on the needs of those communities?
First, the final result should be an increase in employment among those groups throughout the country. However, how will we determine that that increase is truly the result of the programs?
Here is what we can do, and the situations where we expect it to be difficult to perform our verifications. Let's take the example of a person living on the Eskasoni reserve in Nova Scotia, who has registered in his community for a program offered by a partner organization funded by the department. If that person stays on the reserve and takes other training courses there, our partner organization will be able to follow that person's progress over the course of the year. However, if the individual leaves the reserve and goes to Halifax, for example, the partner organization will not necessarily be able to follow the person's journey.
Consequently, it is difficult for us to track things over a five-year-year period, which would be interesting. It would also be interesting, as the Auditor General suggested, to see the evolution of results over time.
As for those who leave their communities, it won't be easy to follow their individual journeys, except through data collected by the Canada Revenue Agency, CRA. In order to protect the confidentiality of that information, the CRA cannot give us their salary, which it would be interesting to know, in order to follow their progress over two, three or four years. By using the SIN, the social insurance number, we cannot know what happened to the Eskasoni former resident. However, the SIN allows us to link up the various data anonymously and determine the person's level of income after three or four years, once they have taken that type of training.
It is our global methodology to check overall results. Auditing a person's progress over five years is a real challenge. If people leave the community, as they often do, to go to Alberta, for instance, and take another training course in which the department is not involved, it is difficult to collect that information. We found a way of doing that in an aggregate way with individual but anonymized data, that is to say data we cannot access. Those anonymous results will be made available to the department as well as to the communities and researchers who might be interested.
Mr. Flack, thank you for coming and, I think, anticipating some of the frustration that happens at this committee when a deputy minister comes and says, “We accept the recommendations of the Auditor General, but since I wasn't there for the period that the Auditor General has covered, I can't explain what happened.”
You've expressed a willingness to be responsible for the department and to be accountable to Parliament and to Canadians for the failings or shortcomings of the department.
The floor is yours. Why did this department not collect data properly? Why did it not analyze the data it used, and why can the department not quantify and explain to Canadians the relative success or failure of its programs?
Do you want me to focus exclusively on the data? Okay.
On the data area, there are areas for which the department had data available that it did not share back with communities when it did the analysis of the data. That should have been done and needs to be done, and it will be done.
There are areas in the data collection, though, as I've explained, where providing longitudinal data, such as how the individual performs over a period of five years.... As I explained, there are challenges, I understand, on how one captures that data, given a highly mobile population. The example I gave was that if you have an individual in an individual community on a reserve who takes a training course in that community, we can capture the data of how they did in the year and how they performed because it's within the year that they took the course. If they subsequently move to a larger community, the organization that's delivering the training doesn't have access to that individual anymore and can't measure it.
Those data things are challenging to collect longitudinally, and the way we are going to go about that, given that we can't directly access the Revenue Canada database to be able to tell you how that individual did after two years, three years and four years—
Mr. Chair, in our audit work there are a couple of issues that are, I think, pertinent to your question. The first was the issue of the data that the department did collect. There wasn't a lot of work done to assess how reliable, accurate and complete that data was.
It's true that the department was able to use information on EI claimants to determine whether some folks continued to work, but EI data is located within a department. We didn't get into observations about links to information from other departments.
Maybe a related point is that there also exists a lot of other departmental data that could be used as a proxy for success. A good example would be the wage subsidy. The department has spent about $130 million on the wage subsidy since 2010. On average, that subsidy costs about $7,000.
What we found is that the department had a lot of information on the number of folks who received services using that subsidy. The program subsidized employers to take on people, but the department didn't then follow on and determine, based on that subsidy, whether the employer kept the worker on or if the worker was able to find additional work. There's a lot of data that exists that could be used to get a different aspect of—
This obviously is a very important program that the department runs. What we focused on was that the objective of this program was to help indigenous people find sustainable and meaningful employment. We feel that if a program has an objective like that—“sustainable and meaningful”—then there needs to be a way to measure whether the people who participated in the program ended up getting sustainable and meaningful employment. That's why we raise concerns about saying that.... If somebody ended up with a job but it was maybe a part-time job and maybe it didn't last very long, is that really sustainable and meaningful?
The starting point to understand the success of the program is to go back and look at those terms. If that's what the program's intended to achieve, sustainable and meaningful employment, what is sustainable employment, what is meaningful employment, and then how do we track it all the way through?
That's our fundamental concern here. There's a critical objective to this program, and it's really important that the department be able to measure it. Again, if you look at the overall numbers and you see the unemployment levels are higher for this group than the rest of the population, and those numbers don't change, then you wonder whether the program is actually having an impact or not. Without having some measurement for sustainable and meaningful employment, it's not really possible to say what type of an impact the program is having.
I have to say that when I found out that the next report, at our next hearing, was going to be on indigenous people, I thought, “Please be a good report. Please”, because I'm out of options. I've already gone ballistic. What do you do after that? Now...it's just so sad.
Here's my concern. It would have been a lot easier, as a member of the premier oversight committee of Parliament, to understand if it were one department that just continuously couldn't get its act together. I took some comfort in thinking it was a problem child, it was a challenging ministry, and that we were just not getting it right there.
However, now we have a completely different ministry with the same kinds of results. At some point you start thinking the unthinkable. If it's not the department, is it the subject matter? When you are immersed in enough of this, you begin to understand some of the frustration that exists in the indigenous community, why did what he did, and why an honourable man like him would say what he said in that place.
The Auditor General, in his spring report and his message to us, said it was “the incomprehensible failure of the federal government”—and that's not just this one, but all of them—“to influence better conditions for Indigenous people in Canada. Our recent audits are two more in a long line that bring to light the poor outcomes of Indigenous programs.” Here's another one in the same year.
We can go only so long believing that these kinds of things can build up and build up and that there's not going to be a reaction at some point. I said before that if I were a young indigenous person faced with the history of what has happened to my people over all these decades, let alone the treaties and everything else, given the way I am, I'm thinking I can give a good guess where I'd be on this subject. How long are you going to keep me contained and quiet when this kind of stuff is still going on?
I realize I'm going on, but I don't know what else to do. We ask detailed questions. We get angry. We plead. We think it's one department, and still we come back to the Auditor General's...and I think he phrased it so well, “the incomprehensible failure of the federal government to influence better conditions for Indigenous people in Canada.”
We go to this report. I like to look at the focus of the report, as stated in paragraph 6.12 on page 3:
||This audit focused on whether Employment and Social Development Canada managed the Aboriginal Skills and Employment Training Strategy and the Skills and Partnership Fund to increase the number of Indigenous people getting jobs and staying employed.
Right above that, the Auditor General says, “The Department is responsible for monitoring the agreement holders' use of program funds,” and yet, in his opening remarks, the Auditor General also had to say “the Department did not consistently monitor Indigenous organizations to ensure that they fulfilled their obligations under funding agreements”, blah, blah, blah.
The key thing that was supposed to happen in this program was monitoring, and you failed. Once again, why? Why, why, why do we have consistent failure when it comes to our indigenous sisters and brothers? Why?
I'll focus on the monitoring question, if that's where you wanted me to start, but I'm happy to go wherever you want.
In the Auditor General's report in paragraph 6.83, they lay out the statistics on how the department did on the timeliness of its financial and activity monitoring.
You can see that monitoring on the core program we're talking about has improved over time and is now at 95%. On the skills and partnership fund, it is only at 50%. That's a much smaller number of agreements and larger agreements.
What I can describe to you is, I think, part of the challenge in how we've done monitoring and how we're going to change it going forward that I think will allow us to get better results.
If you take organizations like the Saskatchewan Indian Training Assessment Group that we've been working with for almost 30 years, you find they have superb data and results, and yet we are monitoring each of these organizations, including that one, at the same level of assumption in terms of their capabilities. We're not using a risk-based approach to monitoring.
In the tax system, the normal way we will do a risk-based approach to monitoring is that if you are a sophisticated taxpayer with a track record of performance, we will not do the intense monitoring for every single year for every single thing. The plan is to take a risk-based approach to monitoring. For those with strong track records and demonstrated track records, we will do less frequent monitoring on an adjusted basis, and that will allow us to focus more resources on those organizations that have lower capacity, because, in many cases, the monitoring ability also reflects the ability of those organizations to give us the data because they have had staff turnover and other issues. Although we've made improvements on this, to make this sustainable over time we're going to take this risk-based approach to monitoring that will give us more resources to focus on the areas where we've had less monitoring.
I hear the answer and I hear the sincerity. I've also sat here enough times when it just doesn't happen.
Let me ask a very specific, straight-up question.
On page 5, in paragraph 6.24, it says:
||The Department developed a performance measurement strategy for each of the programs to measure and report on results. However, we found that the Department did not fully implement....
This is just as an example, and I'm quoting:
||For example, the Department said it would survey agreement holders annually to assess whether it was adequately supporting them to deliver services under the Strategy. It also said it would prepare internal reports annually to inform senior management about the performance of key aspects of the Strategy, such as efforts to help increase the capacity of agreement holders. However, the Department did not fulfill either of these commitments.
You can understand my skepticism when you make promises and they aren't kept. Why were two obvious promises not kept?
I'm going to need some help on this one, but before I go to that, I understand your frustration and I want to assure you that as public servants, we join to make a difference. We are committed to doing that. As a public servant who happens to have Perry Bellegarde as his neighbour, I have an added incentive, because he explains to me on a regular basis, along with Val, where we aren't holding up our bargain.
Part of the change that we've made going forward is rather than our determining all of the things we need to collect and what we need to do, Rachel has led a co-development process with the indigenous partners to identify for them what data is useful. Part of the challenge is that there have been complaints about the administrative burden of some of the collection we're doing, and you've seen this in the other part of the Auditor General's report. Some of the communities don't feel this is necessary for the things they're dealing with.
In the new performance management framework that we'll have in place in April, one of the differences is that it has been co-developed so that the partners on both sides see the validity in the pieces of data we're collecting and commit to be able to collect that data. That's one way I think it's going to make a difference in terms of the outcomes, because this isn't something that has been just opposed.
Rachel or Leslie, do you have specific information on that paragraph?
I apologize; in my studies I did not....
The performance measurement strategy was focused on quick returns to work and school. What we heard from our indigenous partners is that it wasn't really tailored to the multi-barrier clients with whom they deal.
Fundamentally, most of their clients need several interventions and a lot of emphasis on skills development, starting, as we mentioned earlier, with basic skills and moving through employability skills to get to the point where they're ready for employment or to go to higher education.
There was a fundamental flaw in the way that we were focusing on returns to work and school, because it wasn't allowing our partners to measure progress and real results in improved skills development for their clients.
What we're doing in the new approach is distinction-based and better tailored to clients, because an Inuit youth in the north does not have the same challenges as a Métis urban youth. It's distinction-based, but we're putting in new indicators that will better help us measure the real results that are happening. There are real results happening on the ground. Our indigenous partners develop and design these programs, and they are looking for things that will better capture gained work experience, gained skills, and that people are moving up to where they need to be to access that sustainable employment.
I've spent a lot of time digging into this, and as an economist I understand the limitations of statistical collection at a micro level. Let me just walk you through this.
What we want is comprehensive, accurate, timely and cost-effective data. At a micro community level, whether it's a small town or a reserve, this data does not currently exist in Canada, because the labour force survey is not a sufficiently granular tool for statisticians to be able to accurately predict, based on the surveys they do, what the micro labour market conditions are.
This data is not just absent for indigenous communities. If you ask the Government of Canada for the micro labour market data on the community of Canso, we are not able to give you assurance around that because the statistical collection tools do not allow us to have comprehensive, accurate and timely data that will do that.
We have embarked—this was based on funding that came through budget 2015—on a groundbreaking strategy, working with indigenous partners to try to collect that data at the micro level in an accurate way. Not only is that going to take time, but I want to be clear with the committee members that we are on ground where Statistics Canada would say it is going to be very difficult to achieve success.
Why would I say that? A survey will be the dominant vehicle that we use to collect data. If, in a large national survey, you have a low response rate, you can statistically adjust those results to equalize for regional data. If you're at a small community level and 30% of people don't fill out the survey, those results will not be comprehensive or accurate, because you're not able to project based on that data rate.
Another challenge we have is the frequent movement of individuals on and off reserves, which quickly changes the accuracy of the data. In this pilot, we're going to do annual collection—not monthly, which would be much more expensive—so the accuracy of that data will be a challenge. Statistics Canada, with the most expertise in the country in this area, has cautioned us that this is a very challenging endeavour we're undertaking.
The other feature of the endeavour, as you indicated earlier, is that we're doing it with indigenous partners and having them train the individuals to collect the data, because they believe they will get higher response rates if they do that.
I guess we're highlighting that we would love to have this data. No such data exists in Canada for any community. We are trying a pilot that will work through this, but there are real questions around whether at the end of this pilot we will be able to demonstrate that in a timely, cost-effective way, we can get comprehensive and accurate labour market data at the micro community level, because we've never done that before.
We are putting all of our efforts into trying to do this, starting with four communities and expanding to 44, but we have not, with the statistical experts in government and outside, been able to find shortcuts to get this type of data, which does not exist.
The Auditor General is absolutely right to point out that this absence of data in all small communities is a real gap, because if those communities are trying to predict workforce needs, having that data would be important. Again, I would point out that the data does not exist in any small community anywhere in the country. The statistical tools of the labour force survey are not able to give you that reliable data at the micro level.
This is how we're trying to take the approach, but it is going to take time. I want to be clear with the committee that there is no guarantee we're going to succeed.
The first point I would make, as somebody who's done a lot of federal-provincial programming over his career, is that overlap and duplication between federal and provincial programs are not a bug of federalism. It's actually a design feature. When you have two jurisdictions spanning those areas and they are continually adapting their programs, the risk of overlap is always going to be there.
We have mechanisms at the multilateral level with all of the provinces and territories, and at the bilateral level, to try to continually deconflict so that we can always make those programs align in a way that doesn't overlap, but this isn't going to be a situation of doing a study once and then everyone locks their programs in place and it doesn't move. They continually adapt, and we have to do that.
As an example, programs are increasingly introducing innovation elements to their programming and piloting different things at a community level. For that, you can't just deconflict at the program level; you have to look at the community A program officer in Nova Scotia might be trying something different, but it is similar to something we're doing. We have to get those officers on the ground talking to each other.
I just want to highlight that we do have a process to do this, but it's going to have to be an ongoing process. When the Auditor General pointed out that we said in our 2016 risk profile that one of the risks was overlap and duplication, that will always be a risk in federal-provincial programming.
I think what you've just heard is that it is extremely difficult to get accurate information at the micro level about jobs, where jobs are available and what types of skills are needed.
They have consulted with the statistical experts in the country in Statistics Canada about how they would go about gathering that type of information. I think at this point what I am hearing is that they're saying they have a way they can try to move forward on this issue, but they are not yet sure it is going to succeed. If there are ways for them to try to do some of that work without trying to do it across the whole country, to try to understand whether they would be able to succeed at it or not, then it would be prudent to take some steps into it.
Maybe it's time for the department to say they know what they would have to do under the Statistics Canada approach, but I think that before they go too far down that road, they should go back to what they are trying to do here. The fundamental piece of their recommendation was to know what types of training these indigenous people need, what types of jobs there are, what skills are in demand, where those jobs are, what skill sets people have, and how we would train people. It's going back to those fundamentals.
Is there any other way to find out what jobs are available and what the skill gaps are? This may be the only approach to doing it. If so, they need to take some initial steps to see whether it can be successful. If those initial steps seem to indicate success, then carry on. If not, take a step back and ask if there's another way they can look at getting this data.
I want to return to the accountability aspect. This is a committee for delivering accountability to Canadians.
I appreciate some of the remarks we've heard. There are many other committees of Parliament that can examine different ways we can solve policy issues. There are committees on government operations, human resources, indigenous affairs. This is about accountability for what has happened.
I didn't really get much of an answer in my round. Mr. Christopherson very bluntly and succinctly pointed out that there is no answer to the question of the “why”. I think we probably would mostly agree that every government for the last 40 or 50 years has, in good faith and earnestly, examined the systemic barriers to employment and to better conditions, both on reserve and for indigenous Canadians who live in cities, yet, as has been pointed out, we struggle to answer basic questions about what happened to the money we spent on programs.
I'm going to ask Mr. Flack for another crack at the answer to the “why”, but before I do I want to also say, Mr. Chair, that I will add my voice to support Mr. Arya's point that it would seem we really do need to speak to Mr. Flack's predecessor.
Let me unbundle the “why” and give some different categories.
On the question I just answered on the unavailability of labour market data at the micro, granular level, I think the “why” is that no such instruments existed. That's why we didn't collect it. That's why we had embarked, starting in 2016, on a program to try to collect it, but that program is not yet advanced enough to have that data.
In sum, the answer to the “why” is that there were technical limitations on what we could do. We are working through those, but as the Auditor General indicated, we are doing that on a pilot basis to test it—
It's not a surprise, but the centrality of that data in allowing programs to operate on the ground—because that labour market information is critical to how they operate—is the reason we're pushing further on it.
There are other areas where we had collected data, for example, as the Auditor General indicated, where we didn't measure whether it was long-term employment and we just measured whether there were forms of employment. I would characterize that as deficient collection, in that we should have worked to collect more granular data about the length of employment.
Then there's stuff that's in between. The stuff that's in between is, as in my example, this longitudinal tracking of an individual and how the individual did. It's perfectly rational to ask if we can know, for individual A, after five years, what the effect of the intervention was and what the outcomes were. If those individuals are moving outside the zone of the community, that is a very difficult thing to track, which is why I think the department focused on these short-term measures. It's because they were trackable and you could deal with them with the account holder.
There, as I indicated, we've tried to develop a new methodology that maintains the anonymity of the data and will allow us to track that by category.
Thank you, Mr. Chair, and I will cede the rest of my time to Mr. Sarai.
Thank you all for being here.
Actually, I don't really have a question. I'm going to make a statement on Mr. Ferguson's message—not these last reports, but the ones from fall 2017, and on the fact that we tend, as governments, to focus a lot on process and not necessarily on outcomes in how we deliver for people, for Canadians.
I think that when we ask ourselves the “why” of these failures, we have to look very much at the relationship we had with first nations, Métis and Inuit, and how we saw ourselves as the service providers and almost as the supervisors of how it was being done. It's reasonably recently that we've changed this approach and changed the relationship we have with indigenous peoples, and I think that's part of the “why” of the failure. For decades we saw this very much as an “I pay, you deliver” kind of service, and now it's a partnership. It will take some time to correct the way this is done, and I do appreciate the efforts you're making to develop these programs with indigenous peoples by getting them to tell you what they need and what they actually will be able to work with. Perhaps that will be the change that we need to see for the future.
I just wanted to make that statement, and I would like to pass the remainder of my time to Mr. Sarai.
The trick on SIN, the real trick on outcomes, is not just measuring employment but income levels as well, and for that we have to link it to the CRA database.
Now we're not able, obviously, to do that in a direct way, by tracking a specific individual, so the work that had to be done was on linking the information we have on EI and SIN and the CRA database on an anonymized basis that met all the privacy standards. This was not just to give us a global result that would allow us to say of the people in the program that their average income was x; the tricky part was working through how the model could kick out for us what the results were after two years, three years, four years, on the income for individuals who had these types of interventions—literacy training, etc.
That was extremely tricky to work through, and that's what has been, in fact, worked through. It isn't just an awareness of employment. That's the other thing. For the self-employed, knowing the SIN number doesn't tell you if they're actually with an employer who's issuing slips to them at work. If they're self-employed it's different. Because of the diverse clientele, we think this linked database is the best way to get at the data that the Auditor General has rightly said we need in order to track not just how we're doing now but how those individuals do over time, but it is tricky.
I wouldn't put it that way.
The way I would put it is that it's a common problem that we have seen in many government programs. Sometimes the way performance is measured is based on the information that is easy to capture and easy to report, rather than putting together a performance measurement regime that really looks at whether the program has achieved its intended outcome.
We don't make up the objective of the program; we look at what the departments say the objective of the program is. They said that the objective of this program was “sustainable and meaningful employment”. If the objective of this program was simply to know how many people manage to get at least part-time employment, then our report would be very different. However, because they said it was about sustainable and meaningful employment, then we wanted to see a performance measurement strategy that would let us know whether it was being successful or not. What we ended up seeing was that there were some things that were being tracked, but, again, they didn't differentiate between somebody getting full-time employment versus part-time employment, so is that really sustainable?
I don't think this is an issue that is unique to this program or this department. I think it's a problem that I've talked about many times in front of this committee, in terms of the way that the different programs measure their performance.
Mr. Chair, perhaps in the interest of time, I won't take a full five-minute round.
Mr. Ferguson, being able to accurately judge the success of a program is extremely important. It was mentioned in part of the testimony we heard that there are barriers to employment for indigenous Canadians that are far beyond skills training. At the individual level, people need to have skills to obtain and keep a good full-time job.
I've travelled to the north with the finance committee, where we heard about other significant barriers: absence of roads, absence of all kinds of other infrastructure that impedes economic development in remote communities.
There may be some critics who would say that if programs can't be judged to be successful, then the funds ought to be allocated to other things, such as roads, water treatment systems or airports in remote areas.
What can we really tell Canadians about success that has been achieved in this program, so that Canadians might not demand of their parliamentarians that the money be spent in other ways?
I think that's part of the fundamental question we were looking at when we decided to undertake this audit.
Again, as you said, among the indigenous population there are higher unemployment rates and lower participation in the workforce. There are all of those indications that indigenous people need help getting into the workforce. That's something, as I think the department has rightly said today, that they need to work on, and not on their own but with the indigenous groups and communities as well.
Fundamentally, if there is a program that is intended to help indigenous people get sustainable and meaningful employment—and, at this time, the program was spending about $300 million a year, and I think we heard today that there will be another $100 million a year, taking it up to $400 million a year—we would hope that we would finally see a change in some of the outcomes.
I think the deputy minister did mention some very specific performance measurements that they are going to track now. I think one was reducing the skills gap by a certain percentage, by some very specific measurement.
I think these are the types of measurements that would give us all a better sense of whether this money is achieving what it was intended to achieve, which is sustainable and meaningful employment for these populations. That's what we're looking for.
I can't answer the question about whether there is another approach. What I can say is that we need to have some way of knowing whether the current approach is working or not.
I have two questions. One, on page 12, paragraph 6.46 of the Auditor General's report says:
||We found that Employment and Social Development Canada allocated funding to agreement holders under the Aboriginal Skills and Employment Training Strategy on the basis of 1996 population and socio-economic data that did not reflect the current needs of the populations served. Also, the Department had not updated the formula it used to allocate funding under the Strategy since the formula was established in 1999.
Now the last thing I am is a statistician, but I don't think you have to be all that bright to figure out that using information from the previous millennium is not going to give you the best outcome.
My question is this: How can something that obvious continue? With so many smart and caring people, how can stuff like this go on for decades, with people just saying, “Yes, that's just the way we've always done it.”? Help me understand how things like this can be.
To be clear, they didn't say, “Let's just leave it the way it is.” There were two serious efforts made to update the formula, in 2003 and in 2014. As context for why that didn't succeed, let me give you two data points.
The first is that between 1999 and 2016, Parliament voted for the exact same level of funding for this program in every one of those years. There was no growth in the program funding over those almost 20 years. The need for those programs grew dramatically over that time. In an environment with no new funding, when we attempted to update the formula in 2003 and 2014, we worked with indigenous partners and were unable, not surprisingly, to reach agreement with them because, even though everyone's needs had grown, adjusting to the new formula and the new data would mean some would lose funding because that would be the only way to fund the others, whose needs had grown even greater.
The first barrier was that indigenous communities did not accept that there could be any change in the formula. They said there needed to be incremental funding, but for 20 years, Parliament did not vote for incremental funding.
The second challenge, as you are aware, is that decisions on grants and contributions of this order in departments are not delegated to people like me. Ministers make those decisions. I have seen this across a wide range of programs I've dealt with, such as the aboriginal policing program at Public Safety and the culture programs at Canadian Heritage, where you have no resource growth but a growth in the client communities. Not surprisingly—as political actors, I think you would all understand—ministers are reluctant to make changes to a program that will result in some recipients losing funding and others getting more, even though all of their needs have grown.
We did attempt to revise the formula—twice—and were unsuccessful, both with indigenous communities and ultimately with ministers in convincing them to do it, notwithstanding their efforts to do that.
How is that going to change? The new element is that we have $100 million in new funding. In my experience, that is what it takes to get movement on the new funding, so we are negotiating with indigenous partners on the criteria we are going to use for the new funding to ensure that, as the Auditor General indicates, these factors are taken into account.
I just want to be clear: It wasn't that officials were not trying to do this; it was that indigenous communities did not want to make those changes, given that the changes would involve cuts for them, and that political actors—in my view, not surprisingly, in an environment where they didn't have additional resources—were not willing to do that either. What has changed is the new resources, and that's what we're going to try to do.
I have one last quick question, and I'm asking you and the Auditor General to help us.
You've mentioned that you're entering into a pilot project. The Auditor General has confirmed your concern that it's complex and there's no guarantee of success. The one thing that would be horrible is for us to walk away from this, and then four years later the AG goes back in and finds out it didn't work.
Is there a way that at the end—I think you were doing four as a pilot—you could give us an update on that and share it with the AG so that we can be with you as you go through this process, providing whatever assistance we can, but more than anything to avoid, down the road, going through this all again?
This is just not fun for anybody.
When we started this off, I did request the chair to consider halting this meeting so we could get the deputy minister who was in charge as your predecessor. We've had these issues on and off for quite some time. The Auditor General brought it to our attention and expressed his concern. We had the Clerk of the Privy Council before our committee defending the tenure of the deputy minister, saying it is not as bad as the Auditor General says, and I defended the Clerk of the Privy Council because he produced some numbers.
However, what I've started noticing is that there are some problem departments that the Auditor General has gone back to again and again, seeing no improvements from audit to audit, and it is in those departments that the deputy ministers also keep changing.
Is it that the departments are a problem because the deputy ministers keep changing, or is it that there are problems in the department and that is why the deputy ministers keep changing? I don't know.
This is a major concern to us. Chair, I think we have to consider, going forward, that whenever we invite a deputy minister, we find out how long he or she has been in the position. If the deputy minister has been around for a short period of time, say less than one year, maybe we should also simultaneously invite the previous deputy minister.
Deputy minister, I would like to congratulate the team that prepared you for this meeting on their work. Our committee often meets with deputy ministers from various departments who come here and answer difficult questions. I can assure you that the questions we asked you were particularly difficult.
I would also like to say that all of my colleagues and myself greatly appreciated the answers we got, which were often precise and directly related to our questions. I want to emphasize that, since it is to your credit after only three weeks in this position. I think that you were well-briefed on your new files and that you have mastered them well.
I wanted to point that out because from my perspective, you did excellent work. You still have work to do of course, and some sizeable challenges await you. However, I am certain that with the help of your team, the department will be able to meet those challenges. I am sure we will have the opportunity of inviting you again, so that you can update us on the programs you manage.
Since I don't see any other questions, I do want to go back to Mr. Christopherson's question. I was kind of trying to direct our analysts to check an action plan, because Mr. Christopherson asked a question with regard to local data.
I do see that in the action plan that has been brought forward by the department, it has really committed to “improved and tailored labour market information”. It looks like that is maybe “in up to 17 ASETS Indigenous organizations and 60 First Nations”. Is that the pilot project, then?
You're saying it is. That's the pilot project.
With regard to data, it has been addressed in the department's action plan, so I'm hoping that we can maybe have an update on that action plan. I know that sometimes on pilot projects you have to wait until the entirety of the pilot project is finished, but I'm hoping that maybe we can get some measured, achievable goals so that we can see whether there has been achievement or not.
Maybe for the Canadians who are watching out there it sounds as though we've been fairly tough on our witnesses, but when I went through this report, there was a recurring theme, and the recurring theme was the two words “did not”. I went my staff and said, “Listen, count the occurrences of 'did not'.” In every paragraph, the department “did not”: the department “did not collect the data or define”, “the Department did not have information about the nature of those jobs”, “the Department did not fulfill either of these commitments”, “the Department did not establish targets”, “it did not revisit the targets”. It's just in every paragraph: the department did not, the department did not.
In the meantime, we have a government that has, and rightly so, made a commitment. The Auditor General quoted in his report that the government made a commitment three years ago “to reconciliation and a renewed relationship with Indigenous peoples”. When a department “does not” or “did not”, it really takes away from a government direction.
Sometimes you wonder how you gauge a government. Well, you gauge a government on results, and sometimes the departments are the ones that carry out the government's mandate. An announcement by the government of its intentions doesn't matter. When you have 43 instances of “did not” in the report, then yes, I think we can expect another meeting back here at the public accounts committee.
Anyway, I want to thank you for coming.
I agree with Mr. Massé. Mr. Flack, you really seem to have a good understanding of the problems that have happened before your tenure. You were there four years. Some of the other deputy ministers were there two years. I'm of the opinion that when there are that many occurrences of “did not”, maybe that's part of the reason a deputy minister is changed out.
We like it when there's success in every department, and I've told other people this. If an opposition is going to hold a government to account, I think every political party expects that the departments are at least going to be able to carry out the government's mandates. Politically I can question their mandate, but boy, when a department is not really carrying out some of what a government wants, that's not good.
Thank you for coming. Thank you for being up to date on the issue. I can tell you with all sincerity that I hope your action plan works and that we can see the success, the measured success. I know you have good people in your department, and hopefully we'll see some marked progress moving forward.
Thank you very much, committee, on a very tough report, and we wish all the best to the department in seeing a solution to some of this.
The meeting is adjourned.