HRPD Committee Meeting

STANDING COMMITTEE ON HUMAN RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS WITH DISABILITIES

COMITÉ PERMANENT DU DÉVELOPPEMENT DES RESSOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, December 2, 1997

• 0800

[English]

The Chairman (Mr. Reg Alcock (Winnipeg South, Lib.)): Welcome to the eleventh meeting of the Standing Committee on Human Resources Development and the Status of Persons with Disabilities, and to our first meeting with the minister.

We'd like to welcome you, Minister. I know you will be introducing the august body with you. People on the committee have been looking forward to...

[Editor's Note: Inaudible]

Hon. Pierre Pettigrew (Minister of Human Resources Development): Thank you very much, Mr. Chair, for your introduction.

[Translation]

I am very pleased to be appearing before you today. It has been a long time since the committee received a visit from the Minister of Human Resources Development. Last year, it was not possible, nor the year before, either, and it is important that we do this.

I am therefore very happy to be here to talk to you about the Department of Human Resources Development and its mandate. This is my first appearance before the Standing Committee on Human Resources Development and Persons with Disabilities, and I look forward to working with the committee over the course of this Parliament. I will try to be as concise as possible and tell you generally about my department's role in Canada's social and economic development. Afterward, I will be happy to answer your questions regarding the department's work and directions for the future.

Before I begin, I would like to introduce those who are with me today: Mel Cappe, Deputy Minister; Hy Braiter, Senior Assistant Deputy Minister, Service Delivery; Norine Smith, Assistant Deputy Minister, Insurance; Guy Tremblay, Acting Assistant Deputy Minister, Financial Services.

I feel very privileged to be Minister of Human Resources at this stage in Canada's history. Why? Because we are living in times that require our society to adapt to diverse social, economic and demographic trends.

• 0805

We must prepare ourselves and our fellow citizens for the requirements of tomorrow and help those who need assistance. We must also diligently adopt the technologies that will place us at the forefront of modern countries. And we must continue to ensure that Canadians are treated fairly and equally.

[English]

Over the past few years this government has focused intently on managing this nation's finances and reducing the deficit. It wanted to ensure that the resources needed for the well-being of Canadians, today and tomorrow, are indeed available.

The exercise has not been in vain. We are on the road to success. We have driven the deficit down to nearly zero and our financial house is in order. Our economy is expected to show vigorous growth. This is reassuring, and we must seize the opportunity to make investments that will strengthen our society. As Minister of Human Resources Development, a department that bridges the economic and social elements of Canadian life, I do welcome this challenge.

Human Resources Development Canada manages a complex mix of programs for Canadians of all ages. It takes shared values and turns them into action. My department's programs and services reach Canadians at all levels in society and in all regions of the country. What we do truly affects Canadians in their everyday lives.

[Translation]

Human Resources Development Canada accepts its responsibility for the social well-being of Canadians, in partnership with many other players. And, indeed, partnership is an essential element of our approach.

Canadians have made it clear that they want governments to work together to promote an environment that supports them. We have shown that we can work with our partners to develop effective programs—programs that reflect local communities and help Canadians eliminate the obstacles to their development.

One of my main objectives as Minister of Human Resources Development is to build a stronger feeling of belonging among Canadians. I want Canadians to feel confident about our country's future.

Canadians want to be assured of access to health services and education. They want to know that children get a good start in life. Canadians want to ensure that young people have access to post-secondary education. They want an economy that creates jobs and economic growth. They want to ensure that people temporarily displaced from the labour market have access to employment insurance and they want to protect the public pension system that provides security to our country's seniors.

Governments alone cannot achieve these aspirations. Our success requires the active engagement of citizens, our institutions, our businesses, and our voluntary organizations.

It requires collaboration and partnership. I am pleased to report that together we are making progress on many priority issues for Canadians.

[English]

Children are at the forefront of the government's agenda. Investments in our children today will result in social and economic dividends for all Canadians in the future. In partnership with provincial and territorial governments, we have made important strides toward giving our children a better start in life.

The new national child benefit system is, in my opinion, the most significant social policy initiative since the sixties. By working together, the federal, provincial, and territorial governments will reduce child poverty in this country and help more parents move into the workforce.

Helping young people make the transition from school to work is another priority for my department. We have designed a comprehensive program for young people. Our government-wide youth employment strategy helps young Canadians acquire skills, gain on-the-job experience, develop businesses, and find and keep jobs.

For adult Canadians in all regions we provide occupational counselling services and exchange programs.

• 0810

We are working with our partners in the provincial and territorial governments, the private sector, and community organizations to increase the skills of Canada's labour force; for example, we are developing strategies that will enable Canadians with disabilities to contribute fully to and benefit from Canada's social development and economic growth.

The disability community told us it wanted a program with a sharper focus on employability, so federal, provincial, and territorial ministers of social services recently endorsed the principles and parameters of the employability assistance for persons with disabilities initiative. It will replace the outdated vocational rehabilitation of disabled persons program, the VRDP.

My department has also created the aboriginal relations office. This office provides a focus for several key initiatives for aboriginal Canadians, such as national framework agreements, a child care initiative, and an urban employment initiative. These initiatives result in community-driven projects through which aboriginal people have the authority and the means to address local challenges.

We have undertaken efforts to increase women's access to equal opportunities. We have introduced a gender-based analysis system, because there is a need to know what impact our programs have on women and men. It will enable us to review our programs and policies on an ongoing basis.

We provide employment insurance to people who are looking for work, and we of course offer retirement pensions, disability benefits, and survivor benefits.

[Translation]

We have also negotiated labour market agreements with eight provinces. These agreements, which respond specifically to local needs, are intended to help Canadians experiencing difficulty in participating fully in the labour market.

Every labour market agreement is custom-made to meet the specific labour market Canada needs of each of our provincial partners. Four provinces, Quebec included, have opted for full devolution, while four more have chosen co-management with the Government of Canada. This is yet another illustration of the kind of modern flexible federalism I advocate. I like federalism that responds in different ways to different needs.

Canada needs skills in the technological sector to remain internationally competitive. Human Resources Development Canada plays an important role in ensuring that Canadians acquire the skills necessary to perform the jobs of the future.

Real progress on a range of issues—children, Canadians with disabilities and labour market development—is demonstrable proof of co-operation amongst various partners. This progress demonstrates the ability of the government of Canada to be responsive, build consensus and exercise leadership.

[English]

Human Resources Development Canada is committed to delivering relevant, responsive, accessible, and affordable services to Canadians. We therefore manage our resources responsibly and ensure that we are accountable for the results of each and every program. Because Human Resources Development Canada is the people department, service to the public is very important to us.

We have four basic operating principles: our clients come first; we invest in our employees; partnerships are key to our success; and we value excellence in client service and the capacity to adapt to change.

Thanks to modern communications technology we too have entered the era of communications, single-window service, and the Internet. Our service is improving.

HRDC is also an employer. Allow me to briefly mention some of the ways we are helping our employees meet the challenge of the year 2000.

My department will promote its employees' professional development and take part in the government-wide La Relève program. We will use various tools and services to create a more dynamic work environment. We will stress initiatives that focus on the well-being of our employees to promote a balance between work and family.

• 0815

[Translation]

Mr. Chairman, I have cited just some examples of my department's efforts to keep Canada one of the best places in the world in which to live.

I believe that a prosperous economy requires a healthy and dynamic social union. Economic development does not take place in a vacuum. It requires a society that is healthy, dynamic and skilled. I believe that Canadians will continue to have faith in the social union and to participate in it fully as long as they see that their governments and institutions are acting responsibly and effectively.

On the eve of the 21st century, we must create opportunities and find practical solutions to problems. We must continue to perform our duties quickly and efficiently. We must adapt to the changing needs of Canadians. We must be attentive to our partners' ideas and concerns.

I can assure you that Human Resources Development Canada is on the right track.

[English]

I thank you very much for your kind attention, Mr. Chair.

The Chairman: Thank you, Mr. Minister. I expect there are a few questions—are there? Of course.

Madam Ablonczy.

Mrs. Diane Ablonczy (Calgary—Nose Hill, Ref.): Thank you, Mr. Chair.

Mr. Minister, we welcome you to our committee. You know, the buck always stops somewhere, and that's with you; you're the chief. We welcome this opportunity to discuss with you some of the issues that are important to each of us.

As you know, I have been, and many of us have been, consumed with the Canada Pension Plan changes. I have a question with respect to the average industrial wage. You are undoubtedly aware that the average industrial wage will be climbing on January 1 from $35,800 to I believe $36,900.

CPP contributions are based on the average industrial wage. I was wondering what the increase in the average industrial wage will mean in terms of CPP contributions. In other words, will contributions rise along with the average industrial wage?

Mr. Pierre Pettigrew: Do we answer questions one after the other?

The Chairman: Please.

Mr. Pierre Pettigrew: That's fine.

This is a very precise question, and I wonder if.... The actual number I don't know. I could refer it back to you in terms of the number of dollars. It's certainly written in my thick book here, and I'll be delighted to provide it to you.

Mrs. Diane Ablonczy: What you read before bedtime every night.

Mr. Pierre Pettigrew: Oh, every night, of course. I'm a very dutiful minister.

That number we will provide to you. That's no problem.

But if the contributions do rise as of January 1, 1998, contributions and benefits will rise as well. What I mean is that when we increase the contributions, we also increase the protection or the benefits as well. There is a perfect equivalence there.

Mrs. Diane Ablonczy: Right.

I wonder if you could just confirm that with me, as quickly as possible. As you know, debate on this bill is proceeding this week, and it would be helpful to me to have a precise answer to this question. I appreciate that you might need to look into it. If I could have that later today—would that be possible, Mr. Minister?

Mr. Pierre Pettigrew: You'll have it today.

Mrs. Diane Ablonczy: Oh, that's perfect. Thank you.

Mr. Pierre Pettigrew: Otherwise you could put it to me in the House this afternoon.

Mrs. Diane Ablonczy: Well, there you are. I get such good answers in the House, of course.

I'm sure you're expecting these questions about the computer automation that your department undertook, where you ended up with less results than you had hoped for. Over a third of a billion dollars was spent by your department on this computer automation, and the project was halted. Of course this has been in the news.

When we talk about use of resources—and I'm sure you're as anxious as the opposition and all of us to make sure that hard-earned dollars of Canadians are spent wisely—one of my questions is, why did you wait until this automation project was $80 million over budget before calling a halt to it?

• 0820

Mr. Pierre Pettigrew: Madame Ablonczy, this is a problem I discovered when I became Minister of HRDC. I didn't know that the year 2000 was such a complex issue from a technology point of view, but as we have 8 million clients and so many cheques to send around the land and pensions to calculate, with only two digits, as we've been used to, that complicates things substantially.

The EDS was not pure waste. It did not meet our expectations and our hopes to really solve all of the problems, but already, with the $350 million we've invested in the EDS contract, solutions have been found and some processes have been developed that will allow us to save about $800 million in the next five years. So there are already some benefits from what has been done there. We'll be saving about $800 million with that investment.

Because of the seriousness of the problem and because it was not really meeting all of our expectations, we decided to develop within the department the capacity to address the technological challenges. We are working very hard at it to make sure there is no big problem when we turn the clock on January 1, 2000. We are confident that we will be ready to meet the challenges and that Canadians will not be too perturbed or disturbed by that change to the year 2000.

But of course we went to the end. We had hoped it would work with EDS. That's the idea.

Mrs. Diane Ablonczy: If your department is going to continue to make improvements to the system, I'm wondering how much you budgeted for that, how much you anticipate it will cost, and how confident you are that there won't be another cost overrun and that the job will get done at the end of the day.

Mr. Pierre Pettigrew: I will ask Hy Braiter to answer this question of how much money we are actually putting into it.

Mr. Hy Braiter (Senior Assistant Deputy Minister, Service Delivery, Department of Human Resources Development): First, by way of some additional information, we are concluding the contract with EDS. There is no cost overrun as such. We're concluding within the context of the current contract. As the minister has said, we concluded that we got our money's worth, or that the taxpayer did—that there is a good return on investment on what's been accomplished to date.

We look forward to having to make CPP changes, seniors changes, and changes to all systems for the year 2000. So this was a good time to conclude this ongoing project, which started about five years ago, especially at a point in time when we see that we have received good value for our money. Although we did not get what we thought five years ago would be a complete system, we did equip all of our staff with modern computers, we upgraded all of the telephone equipment across the country, and we re-engineered the entire flow of how seniors' benefits are processed. The EDS contract was one small portion of it.

Now that that contract has been concluded, we do have a large systems group internally, which was not available when this project was started. When this project was started, the organizations were different; the seniors were part of Health and Welfare, and they did not have a large systems group.

HRD inherited a very large systems group, over 500 people internally, and the new HRD department will take over the management of ongoing improvements to seniors' benefits, including the implementation of the new CPP changes, the seniors changes, the conversion to the year 2000, and some very interesting features that were developed by EDS. We will carry it on towards implementation, and we won't do it in a big-bang process where we stop everything and implement everything at once. Rather, we'll roll it out slowly as it proves itself, so as not to interfere with ongoing operations. This will be handled by and large within the normal yearly budgeting and planning and main estimates processes, as we move along.

Mrs. Diane Ablonczy: Will you be able to solve this so-called millennium bug problem as part of this? How confident are you of that?

Mr. Hy Braiter: My answer is yes, we absolutely have to, or everything comes to an end, as you know. We are taking the millennium issue, or the year 2000 issue, as the highest priority in the department for our systems people. We're in fact suspending all new development of all systems—EI systems, management information systems, senior systems. All of that is being suspended except for absolutely necessary changes because of legislation or maintenance. We are putting all our forces on the job of converting everything to make sure it will work into the year 2000. We've set ourselves a date of January 1, 1999. We can't afford to wait to year 2000. It'll be absolutely too late by then. The whole world will be vying for the resources, so we're going to do it now.

• 0825

Mrs. Diane Ablonczy: We'll all be rooting for you.

Thank you, Mr. Chairman.

The Chairman: Thank you, Mrs. Ablonczy.

Is there a question from the Bloc?

[Translation]

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): Minister, the speech you made to us explained to me why you are a federalist and why I am a sovereignist.

In my vision of things, there are major failures in the government's approach. We need only to think of TAGS, child poverty, employment insurance and student indebtedness. The people here in the committee want to be able to look at these problems specifically. The question being raised is a fundamental one. The Constitution determines who is responsible for what and how things are done in Canada. Many of these failures are due to the fact that the... I want to emphasize one example: employment insurance.

You know that in 1993, 65 per cent of people paying premiums were receiving benefits. In 1997, this was true of only 41.6 per cent of people. If we do the calculations, we see that 335,000 more unemployed people would have received benefits during that period. In the Lower St. Lawrence region, in 1993-94, 85 million dollars were spent on benefits and, in 1997-98, only 62 million dollars will be provided. That is a reduction of 23 million dollars. The number of unemployed decreased by only one per cent between 1993 and 1997. The gap is not explained by human activity.

We just received a report through the Internet from the chief actuary for the Unemployment Insurance Program. In response to the questions that were asked in committee, the chief actuary said:

[Translation]... it can be estimated that a stable rate of between 1.90 % and 2.10 % would be necessary to cover the costs of the present system over a long period, using the surpluses of the good years to offset the deficits of the other years. [End of translation]

In other words, given the system's present rate of around 2 per cent, it is self-funding. The decrease you announced last week leaves significant room to manoeuvre. Subsection 3(2) of the Act stipulates that the Commission must submit a report to the Minister in December on the employment insurance system and its practices. The report must also be tabled in Parliament within 30 days after that.

Minister, do you intend to restore a more human face to the employment insurance system by significantly correcting the inequities facing seasonal workers, young people in the labour market and various other groups?

Mr. Pierre Pettigrew: Thank you very much for your extremely relevant questions. I don't believe there is a difference between sovereignists and federalists in this area. Within the sovereignist movement as within the federalist movement, there are different interpretations of the role of the State. That is more where the distinctions are drawn. Within each movement, there are different conceptions of the State.

I can tell you that I am convinced that the old unemployment insurance system did not serve Canadians well in terms of the labour market. For example, people working part time were not covered. I much prefer a system that is based on hours rather than on weeks. That reflects the new labour market better. In my riding, many people work two 12-hour jobs, for example. This is very often the case for women.

I am convinced that the reform was necessary. You draw my attention to the problem of the many people in the employment insurance system. I must tell you that it is something I am following very closely, not only because you force me to by your relevant questions in the House of Commons, but also because, objectively, I find that it is a fundamental aspect that must be monitored very, very closely.

• 0830

Where I may disagree with you is that I believe the employment insurance system must not be assessed only on the basis of the number of participants. Through our reform, we are working to reduce the dependency that too many people have on unemployment insurance or employment insurance. To break that cycle, where people come to depend too much on that system, structural reforms had to be carried out. That lowers the level of participation. To the extent that it breaks the cycle of dependence, it is a good thing. However, to the extent that it does not give protection or contribute to breaking the cycle of dependence, it is another problem. That is why we are monitoring the implementation of our reform very closely.

In my opinion, to know whether the employment insurance reform is good or not, we must first look at the unemployment rate. We need to see what the system is doing in the labour market. If the unemployment rate is going down, the system is working. If the system is not helping reduce the unemployment rate, it is not working. We need to look at things in a balanced way.

I do not want to spend too long talking about the issue of the surplus, but I think it is quite a fundamental question. I was extremely proud to announce, in response to a question you asked me one quiet Friday morning in the House in solidarity with the people of the Lower St. Lawrence region, a decrease in the premium rate to take effect January 1, 1998, whereas the Minister of Finance had announced it for January 1, 1999. That 20-cent reduction was the largest ever in the history of the employment insurance fund, and the fourth consecutive decrease.

Given what has just been said and the fact that we are in the first year of a very extensive reform, we must be careful in managing the funds, both because we are monitoring the impact of that reform and because we must make sure that it would not be necessary to increase premiums at the beginning of a recession.

That is the tradition in Canada. A recession would start and then, bang, bang, bang, there would be three or four consecutive increases in premiums. Premiums would rise and kill jobs when they were most needed.

With us, the benefits will stay the same even without an increase in premiums, even

[English]

if the going gets rough,

[Translation]

as we say in good French.

Mr. Paul Crête: Minister, I agree with you that the unemployment rate is not only a measure of the employment insurance system; it is also a measure of the efficiency of the economic activities of the whole government. So, we must evaluate whether the employment insurance system provides enough income to people who are between jobs, etc.

I repeat that the chief actuary of the system said that the system would be balanced if there was a rate varying between $1.90 and $2.10 in the present conditions. Between $2.70 and $2.10, there is substantial leeway. Let us suppose that we take half of this and that there would be 30 or 40 cents, difference. There we have something to improve the living conditions of the people in the system.

You're saying that presently, people looking for a job must have a right to employment insurance. That is not the reality today. The reality is that we have many young people subjected to the 910-hour requirement. Officials from your department have admitted that one of the main causes of dropping out is that there are not enough jobs for youth.

My colleague will come back to that topic. Can't you tell us that presently ways to improve conditions for youth are being considered and that evaluations of the impact of this on seasonal workers are being carried out, evaluations that could be given to us, because we all agree on eliminating dependency? Everyone agrees with that. We want to diversify our regional economies, but in the meantime people have lives to live. This fall and next spring, many people will end up on welfare. Hasn't anyone realized that with the present surplus, we should be able to be more equitable?

• 0835

Mr. Pierre Pettigrew: First, we must be careful. I don't know what the Auditor General said when there were deficits in his forecast, but I think that we must nonetheless proceed with caution. You did say that given current economic conditions, that is where we're going. But I, for one, am optimistic about the economy.

Mr. Paul Crête: I'm talking about the chief actuary and not about the Auditor General. This unemployment rate of about 9% is being forecast by the chief actuary of the employment insurance system.

Mr. Pierre Pettigrew: That's it. Besides, his report also states that it is sometimes useful to take other factors into account, such as the constant difficulty of making any accurate forecasts, the tendency for unemployment to rise over the last five decades, the possibility of eventual amendments to the regime and the possibility of unforeseen events or catastrophes.

So, I think that the report is complete. It takes elements of that kind into account. You are asking me whether we are... I can tell you that we are following the impact our reform has on people very closely. But this famous gap you are talking about, for seasonal workers, was deliberate; it was meant to break the dependency cycle. You have asked whether this gap will be eliminated with the surplus.

Formerly there used to be the so-called 10-42 formula. You would work ten weeks and be covered 42 weeks. If a gap has been introduced by taking away eight weeks, a gap during which our people will sometimes end up on welfare, as you say, it is precisely to urge people to look for new solutions and to develop within the structure of the economy.

It is just reality that when there is no gap, people rely entirely on the system. They get comfortable, whereas we would prefer to create business to fill that time.

[English]

The Chairman: Thank you, Monsieur Crête. Perhaps we'll have another round in a few minutes.

Ms. Davies.

Ms. Libby Davies (Vancouver East, NDP): Thank you, Mr. Minister, for coming to the committee today.

In your comments to the committee you described the national child benefit as the most significant social policy initiative since the 1960s, yet I think there is also growing concern that the proposed program that will begin next year has some significant flaws and problems with it.

Last week we heard the Campaign 2000 report that child poverty is increasing in Canada. In fact, we've seen a 58% increase since 1989. They were calling on the government to add, as a minimum, an additional $850 million to ensure that there's a full indexing of the benefit.

I think that's a serious concern, the fact that the benefit is not fully indexed. They have estimated that something like 50,000 children, I think it is, will lose the eligibility for the maximum benefit each year because it's not fully indexed.

The other major concern I've heard from across the country is that the benefit will not apply to the poorest of the poor, families on social assistance.

So I want to ask you a couple of questions. Would you characterize it as an anti-poverty measure, and if so, why does it not then apply to those on social assistance, or do you characterize it more as an employment subsidy? Secondly, following up from that, will the government consider targets and measures for reducing poverty?

It seems to me that since the 1989 unanimous resolution in the House of Commons very little progress has been made. One of the problems is it's certainly a huge issue, but it seems to me that we fail to establish real targets and time lines and measures to address this very serious social and economic question that's affecting a growing number of children and families. So will the government consider that in terms of other policies and programs?

Mr. Pierre Pettigrew: Thank you very much for bringing our attention to the situation of children. This is a top priority, as I mentioned.

The groups you're referring to, and Campaign 2000, rarely congratulate us for our work. I must share, Mr. Chair, with our human resources committee that I often envy my colleague, Mr. Manley, who gets great reviews for his fund on innovation with the $800 billion he had last year. We had $850 million for children and people asked whether it was enough or whether we could do more. We're investing $850 million more per year as of July 1, 1998.

• 0840

To people who have been around lately, that is a lot of money considering the fiscal situation in which we've been. I wish people took a least a few minutes to celebrate great moments in Canadian history.

Is the situation one of anti-poverty? You bring our attention to welfare kids. I would say that the Canadian child benefit is a child development program. Along with the provinces—as you know, it is an integrated benefit with the provinces—we aim to give them an early start that will allow them to arrive at school able to learn better. They will be less hungry and better developed.

The extraordinary work of Dr. Fraser Mustard calls our attention to the fact that development between the age of zero and six is crucial to a person's ability to work better, be a better parent, and do everything better later in life. Ken Battle of the Caledon Institute has demonstrated very well that the single most important factor in child development is the income of the family, so improving the income of the family is key.

We know that income is not enough and that services need to be there, and that is why we have negotiated with the provinces that they will be reinvesting in programs and services for children in low-income families—the margin of manoeuvre they receive there.

Social assistance recipients will receive the Canada child tax benefit. You are right that the provinces will take it, but they will reinvest it in programs for children in low-income families. This is another element. That's why I said to Mr. Crête a little earlier that there is a philosophy of the role of government in which we intend to use active measures as much as possible rather than passive measures. Again, this program is designed to lower and hopefully eliminate the welfare wall that makes it easier for a parent to leave welfare to go to a job, even it is a low-paying job. In order not to penalize their kids when they leave welfare for a low-paying job—we believe that when a parent works, that parent is on the way back to more wealth down the line, after having a better CV and all that, because they'll increase their salary.

You say another $850 million is necessary, but that's a red book 2 commitment. We're there and I'm there too. I could have said the same thing as Campaign 2000, because I have been fighting both in my party and in my government to have that second $850 million. So we will have the first one on July 1, 1998, and we'll have another one in the course of this mandate, and the sooner the better. I won't hide from you that this is where I am too.

Have I gone on too long, Mr. Chair?

The Chairman: You were eloquent and we were enjoying your eloquence.

Mr. Pierre Pettigrew: Thank you, Mr. Chair.

The Chairman: Ms. Davies.

Ms. Libby Davies: Mr. Minister, I agree with you entirely that information shows us the most important years are zero to six and that supporting the family, particularly through income, is the most important initiative we can undertake. However, that again raises the serious concern as to why families on welfare will not be eligible for this.

Unfortunately, in terms of what we've seen so far in the negotiations with the provinces, there's no guarantee that whatever money is clawed back by the provinces and supposedly reinvested in social programs for low-income families—we have no idea whether they will then remove other funds. So I think the issue is whether poor families will be better off under this national child benefit in terms of their real income and their ability to cope. I think there's a very real question about that.

Do you have targets within your department where you can tell us that by next year or within three years or whatever timeframe you have some clear goals to actually measure and set a timetable and a target for reducing child poverty? I think it's very important for us to know whether or not that's the kind of direction your department has.

• 0845

Mr. Pierre Pettigrew: If I understand you, Ms. Davies, there are two things. First, with regard to the provinces' commitment to reallocate these funds to programs and services for children—they're all committed to it. We're negotiating the reallocation framework right now, and many have already announced how they will reallocate these funds.

Ontario has announced that its first $100 million will be towards child care. I'm confident that all of the provinces will have announced their reallocation frameworks in the next few weeks and months, and it will be towards children in low-income families, that is, under $26,000. All governments and Canadians want to make sure these moneys are used for children in low-income families.

In terms of measuring it, that I'll have to say in French.

[Translation]

how do you say "l'étude longitudinale" in English?

[English]

I can't say the word in English, but Mr. Cappe will say it.

Mr. Mel Cappe (Deputy Minister, Department of Human Resources Development): Longitudinal study.

Mr. Pierre Pettigrew: It's too long a word for me.

[Translation]

Mr. Mel Cappe: It's the same in English.

[English]

Mr. Pierre Pettigrew: L'étude longitudinale, which we are going to do, will try to precisely see how kids are better when they arrive at school age—better able to learn, better able to integrate in school. That will be the best measurement we can have. If they are in better shape, they'll be fine.

The Chairman: Thank you, Mr. Minister.

Mr. Dubé:

Mr. Jean Dubé (Madawaska—Restigouche, PC): Thank you, Mr. Chairman.

[Translation]

Welcome, Minister.

How much time do I have, Mr. Chairman?

[English]

The Chairman: You have ten minutes if you use it well.

Mr. Jean Dubé: Then I'll try to put it all in ten minutes.

[Translation]

Mr. Chairman, during the first meeting I attended of the Standing Committee on Human Resources Development, I tabled a motion to evaluate the impact of employment insurance reform in the regions concerned by it. I was told that a report would be submitted to the committee during the month of December. I would like to know how the drafting of this report is coming along. If you know this, I will have to conclude that you probably already know which regions are seriously affected in Canada.

As a member from a region with a very high unemployment rate, I don't really need a report. As for seasonal workers, we also have them, with wood as a natural resource. Are you planning to table changes in the House of Commons that could accommodate these regions that have very high unemployment rates, and the seasonal workers?

Do you know, Minister, that seasonal workers have a very difficult job to do. These people set out at 3 or 4 o'clock in the morning and finish their day at 7 p.m. In the winter, that is no life. You would have to experience it to understand it. Perhaps something should be provided for them. I am asking whether you have any plans to present for that reform. In this region, we would also like to have a flourishing economy.

I was interviewed two weeks ago on an Ottawa radio station, and I was furious. I asked a question, and the answer I was given was that reforms had been carried out because people from the Atlantic regions are lazy. This is really not so. People want to work, but we must develop our resources. Have you planned anything in this respect?

You mentioned partnership with the private sector. Several times, in the House, I asked that the employment insurance premiums be reduced to $2.20. Last week, a reduction was announced, and I applaud it. However, we have asked, as did private enterprise, for a reduction to $2.20.

• 0850

The chief actuary of your department is recommending $2.20.

Mr. Chairman, a point of order. The chief actuary's report on the employment insurance account was filed on November 21. Can we read it today?

[English]

Mr. Pierre Pettigrew: It's on the Net.

[Translation]

Mr. Paul Crête: Isn't there any report that could be filed here before this committee?

Mr. Mel Cappe: The Minister already sent a copy to the Chairman of the Public Accounts Committee, I believe. I think that the document as such is available.

Mr. Pierre Pettigrew: Yes, you can have it on request.

Mr. Mel Cappe: I could send you a copy of it right after the meeting.

Mr. Paul Crête: The messenger left Hull on foot to come to my office.

[English]

Mr. Jean Dubé: About disability pensions, Mr. Minister, I am very concerned. I want to know what solutions you want to bring and what you may have for the 4,000 Canadians who are waiting for their disability pensions. I believe 4,000 is unacceptable.

I would also like to know who oversees this. When you apply for a disability pension you have a doctor's report, a specialist's report. Who would contradict this and what qualifications do they have to contradict this?

I will start with this question. I'll have another one later, but you may answer these.

Mr. Pierre Pettigrew: Thank you, Mr. Chair.

[Translation]

We are following our employment insurance reform very closely. The report you mentioned will be submitted to me in December. I do not have it yet. Today is December 2. They promised to give it to me during the month of December. So I am making a commitment, to file it in the House, before the committee, within the 30 days following, which is during the month of January. Obviously, the House will not be sitting at that time, but it will still be available for committee members and for members of Parliament as a whole.

You've asked about what we are doing for seasonal workers. I've already spoken about this to Mr. Crête and I can tell you that we have set up the Temporary Fund for Job Creation. The Temporary Fund for Job Creation is specifically aimed at helping regions with a rather high unemployment rate to boost their economy so that the gap...

I am not among those who think that people are lazy. That I can say to you. I know that situation. I know it very well. I am very sensitive to the needs of these people. Each time I hear a statement like that, I fight against it because this reality does not exist in our land. Certainly, I hear that in certain regions, but I can tell you that this is a statement that I systematically fight against.

I am aware enough of that reality to know that there are many people who are not happy with working only 16 or 18 weeks and who would like to have another job of six or eight months during the other period.

That is the reason why I am telling you that the solution does not lie in finding something to fill this gap. We must boost the economy, and the Temporary Fund for Job Creation is there for that. The Temporary Fund for Job Creation is a magnificent idea aimed at providing a concrete solution for the problem by providing work and not only revenue.

• 0855

This is not a recommendation that the Auditor made. He simply indicated that if the economy continued in that same direction and that if we did not change the programs, we could go to $2.20. There are many "ifs", and we would not want to come back to the former state of things. As you know, the preceding government had to proceed with four premium increases at a time when, suddenly, things began to take a bad turn. And what was done to an economy that was already ailing? It was injured even further by suddenly increasing the rate by $1.95 to... They were getting ready to go to $3.30. We had four increases in one year, at a time where things were already not going well. I'm telling you that this is no way to proceed.

The employment insurance account is also a stabilizing element within the economy. The economy must have a stabilizing element. When things are going well, we can afford a modest reserve so as not to be compelled to penalize people at the time when things are taking a turn for the worst, and to put more tax burdens on our economy and slow it down. That is our perspective.

You were talking about the appeals that have increased considerably over these last few years with regard to pensions for handicapped persons. The change in the system came after a request from the Auditor General, who had noted that there had been a considerable increase in the number of requests during the years 1993, 1994 and 1995. This increase was so large that it was penalizing the system as a whole. We had to review the system to make sure that the pensions for handicapped persons were really going to handicapped persons, to those who really need them, according to what is prescribed by the Act. I'm going to ask my deputy minister to supplement my answer.

Mr. Mel Cappe: Many people got stuck in the backlog and we had to hire many more employees. We have simplified the procedures for processing these requests. Our figures show that the backlog is decreasing. Of course, we still have to work on it.

[English]

We have taken steps to try to reduce the backlog, and in response to the Auditor General's concerns we've changed a lot of our administrative practices.

The member also asked a question about the process for disability determination. Typically, we have a doctor on staff and a number of nurses who act in the adjudicative role of determining eligibility. Often a claimant will not like the determination, and there is a process established under the law to go to the Pension Appeals Board.

Mr. Jean Dubé: Very often—unfortunately.

Mr. Mel Cappe: That's true. One of the great difficulties is that the people who appeal to the Pension Appeals Board—there's very little challenge for them to appeal, so many people do appeal, but we have a fairly good success rate before the board.

The Chairman: Thank you, Mr. Cappe.

Mr. Dubé, there'll be another round.

Madam Bradshaw.

Mrs. Claudette Bradshaw (Moncton, Lib.): Mr. Minister, I have three questions.

First, it was interesting to hear you say the “people's department”. I was glad to hear you say that.

When I went into federal politics, everybody said if you can accomplish one thing in four years, you've done a lot. My first thing is this: is your department looking at having real people answer the phones?

[Translation]

I will tell you why.

A certain number of persons who need your services are lost as soon as we give them two figures. I can tell you that in my office, one of my employees was answered by your answering machine; it took her eight minutes to access one of your services.

Mr. Pierre Pettigrew: She should have tried the Minister's office.

Ms. Claudette Bradshaw: This wasn't even the Minister's office.

Mr. Pierre Pettigrew: It takes just about as long.

Ms. Claudette Bradshaw: I would like to know whether, in your office, there is someone taking care of this, because it really is a problem. Sometimes, as politicians, we don't seek to know where the needs lie. This is one of the many complaints we receive in the office. It seems to me that we could do something so as to be able to communicate with people rather than with an answering machine. It would be interesting to see how many jobs we could create that way.

• 0900

[English]

The second question is this, Minister. The unemployment rate was 12%; it's gone down to 9%. For youth it's at 16%, and for post-secondary it's at 8%. You're there, but also the finance department is there. One of the reactions I'm getting that's very positive for you is your Youth Link approach. I wonder with those programs if you had put a price tag on the Youth Link report.

There are a lot of good programs in that, but the minute the community goes to get one of those programs, there is no funding. The funding is gone. We have something there for youth, but the reality is that when we go out to try to get it within our community, there is no funding.

I don't know if you've put a price tag on that. Perhaps we could work on the finance minister for you in some way. If you would have any suggestions for us on that, I would appreciate it.

My life is child poverty, and I've been criticized on the other side sometimes. I'm going to make sure this time that we spend our money well. I'm sick and tired of the short-term programs we've put in place. I went through the recession every day with poverty.

Poverty is a problem. I wish the minister would use the National Crime Prevention Council report, prenatal to six, when he speaks. I will send you as many copies as you wish. When you make presentations to groups you can show it. We have the solution to poverty with that crime prevention report.

My question to you, Minister, concerns your Secretary of State, Ethel Blondin-Andrew. How many different departments does she work with on a holistic approach to children and youth?

Mr. Pierre Pettigrew: I'll reply in a reverse order. I'll start on children. Madam Blondin-Andrew as the Secretary of State responsible for our work on children supports basically the Minister of Health, Allan Rock, and myself.

The responsibility between the two is that I look mostly at the income side of helping children. Minister Rock and I are jointly developing the national children's agenda. He works more on CAPC programs and some other children's programs and services.

There are two lead ministers on the national children's agenda. Madam Blondin-Andrew is also involved, and where there is a particular element for aboriginal kids, there is of course Jane Stewart. Anne McLellan is also very active on the agenda, because there is lots of activity on this around the justice department. There are a number of riots and so on.

We are developing a holistic approach. We work well together. We spend quite a bit of time articulating our responsibilities. Our responsibilities are clear, but we each have our particular responsibility. We make sure we don't contradict one another.

We do the same on the disability files as well.

Following up with the Scott task force, for instance, we worked well with the Ministers of Revenue and Finance and with Jane Stewart of the Department of Indian Affairs and Northern Development as well.

On your second question, the unemployment, Youth Link was a great little publication. It was very well done. I heard a lot about it. I've also heard MPs saying it was so good that they are now withdrawing it from the shelves because they cannot deliver it for lack of funding.

Good management practices...it's like training, for instance. When moneys are not committed in November, or even October until March, normally you have a problem. It is normal that when it comes to the fall that money is being committed for a while ahead of time. To me it is good management that the moneys be committed at this time of the year.

• 0905

Definitely youth programs, now that people know them better through these publications and the good work of the MPs who propose them to their constituents, are such a great strategy. Both Youth Service Canada and the youth internship program have great batting averages. The numbers that come to me are just extraordinary in terms of the number of young people they have helped.

The problem is a lot bigger than what we are doing in terms of budgets. We're talking about $2 billion, with an additional $315 million committed in the 1996 budget. If we had more money, we'd do even better work. I have to live within the restraints I have financially, but I'm grateful for the assistance. You want to demonstrate that this is a priority for the committee as well.

On real people answering the phone, I'll ask Hy Braiter or Mel to complete my answer. I agree with you that there's nothing more frustrating than not getting a real person. It's not only true with the government, it's true with the private sector and almost wherever you go now.

We have to find the right balance between savings that have been imposed on our government.... We've had to cut our own operating budgets by billions of dollars, so sometimes it is necessary to use the technologies that are there.

Sometimes the technologies are very good, too. There are places I'm glad to have a machine at 10 p.m. With the kind of lifestyle I have these days, I very often have to leave messages at 10 p.m. It's useful to have a machine rather than at 5 p.m. sharp nothing works any more.

I tried it with my CIBC card not too long ago. You leave a message, and they follow up even if there was no real person.... You know, you put your name there, your code number, etc., and they do what you need to be done.

It was good at 10 p.m. to be able to put a message somewhere and have action taken within 24 hours without my being involved again.

It is the right balance between the savings imposed on us...the new technology sometimes improves the service but doesn't go too far.

Mr. Mel Cappe: Perhaps I could add that we take about 53 million phone calls a year. It would take a huge workforce to answer them. We have 19 telecentres with hundreds of people who actually do deal with clients and real people who do get there.

In a lot of the phone calls people are asking about their cheque. It's fairly simple to deal with that with an automated voice response. But when people call wondering whether they are eligible for employment insurance or Canada Pension Plan benefits, they need somebody who can help them fill out a form.

We're trying—and we don't have the balance right yet, but we're getting close—to make a distinction between those two kinds of calls, so the person who needs a person at the other end to help them will get it and the person who wants some information can easily get it from an automated voice response system. Finding that balance is difficult.

We do focus testing on the automated voice response. What we provide for the elderly through the Canada Pension Plan and OAS number is a different kind of automated voice response than what we provide for employment insurance. The voice is a little slower, which means it takes a little longer but is easier to understand. We assume the person is looking for information much more than we would assume otherwise.

We try to serve the client better in that way, but it's a very tough call to serve those 53 million phone calls.

The Chairman: Thank you, Mr. Cappe. Thank you, Mr. Crête and Mrs. Bradshaw.

Mr. McCormick, did you have a question?

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Yes. Thank you, Mr. Chair, Mr. Minister, and very capable departmental people. I appreciate your being here this morning.

The role of the opposition is also in many cases the role of our own government, and that makes for a very healthy government I believe. You know, to hear a gem on a Friday.... When you get House duty on a Friday you don't expect to hear something, but we did hear something about the “payroll taxes and EI reduction”. That was very interesting. It's a good direction.

• 0910

For the last year my hope has been—and I should know these figures, but I don't, Mr. Minister—that the EI rate would continue to go down as quickly as the CPP rate would go up, so at least we would have a wash. That would be something small business could live with. Small business is the reflection at the polls that the government's moving the right way in wiping out what was there before.

Mr. Minister, we all hear and we all agree about child poverty. If we had more time we'd also like to mention the older workers, but I'd like to mention that in rural Canada we also have a lot of high school drop-outs. I know it happens in the cities too. I'm wondering if we could do a little more to encourage these people before they end up on the street or on welfare. I think it needs to be one of our priorities.

My third question relates to what Ms. Davies was asking about the transfer to child benefit. On the labour market agreements with the provinces we keep hearing about national standards. Even the province of Quebec wants national standards on many things, and they often lead the way. We have to give the devil his due.

Mr. Pierre Pettigrew: The devil, Larry?

Mr. Larry McCormick: That was just for the Bloc party, that's all—they're wonderful people in Quebec. That was for my colleagues here.

Is there any way, as we go to other provinces, that with these labour market agreements we can hold the provinces more accountable for that money?

Thank you, Mr. Minister.

Mr. Pierre Pettigrew: Thank you very much, Larry.

In your case I'll take the questions in the order you put them.

On the employment premiums going down, yes, it was a nice Friday morning and it is nice that for four years in a row they've been going down. I think we must congratulate ourselves for it. You're happy with the trend and hope that the trend will be maintained. Now, the 20¢ drop for 1998 completely offsets the CPP increase; in fact it a little bit more than offsets it, so we're okay for 1998.

It is a nice guideline you're giving us for the future. The Minister of Finance and I will have to discuss it. We have our yearly discussion on this. I'm sure that I don't have to put it explicitly; you can all imagine the kind of dialogue we have. I think this is a good direction and an interesting one.

For 1998 we've got it, and I'm very glad that we're having it.

Regarding rural Canada and the number of drop-outs you have, something very dear to me is Youth Service Canada. Kids who've been failed sometimes by the school system or whatever need a second chance.

Yes, our youth internship program is working well for the kids who are educated. We have to ease that transition from school to work, but those who have dropped out should not be left behind. We need to help them develop the basic job skills, such as the discipline of getting up in the morning.

If they've been failed by the school system, we are going to give them a second chance. That is why we created a Youth Service Canada. That is community work in which you develop some skills of whatever kind or nature. Youth Service Canada is working, because it's improving the community where the service is being given and is helping the young to actually do something and at the same time acquire some basic skills.

There again, we do as much as we can with the resources we have. I think we have developed the right tools in our department in the last couple of years; we've developed the right tools. If we had more we'd do more, but at least 68 out of 100 unemployed kids, those who go through Youth Service Canada, the youth at risk, within a year after they have finished have a job, are self-employed, or have gone back to school. That's very good.

• 0915

With the youth internship program, for those who are a bit more educated, our record is 78 out of 100 unemployed almost at the beginning.

On the third one, on the labour market development, Larry, I must say this is something I take great pride in having realized in the last year. The eight deals we have add to our federalism a very innovative element, which is an accountability framework. All the deals I have signed with the provinces have a built-in accountability framework. Every year I will be presenting to Parliament, as the minister responsible, accountability frameworks. All the provinces will demonstrate how successful they've been in labour market development measures, so that every province will be able to compare what they've done with what another province has done. Canadians will be able to see where things are going better, and we can then imitate one another by saying this seems to be a better way of doing it.

This is a new way of doing federalism, and it is in the eight deals we've signed up to now.

Mr. Larry McCormick: Thank you, Minister.

The Chairman: Thank you, Mr. Minister.

I'll now come back to Mrs. Ablonczy and Mr. Anders.

Mrs. Diane Ablonczy: Thank you, Mr. Chairman. I have one question, and then my colleague has a couple.

Mr. Minister, in your excellent overview earlier you mentioned the assistance you are providing to a number of groups with respect to unemployed youth, aboriginals, the disabled, and women, but one group that you did not mention was older workers.

Now I know that you and I are a long way from being in that category, but a survey of the counsellors in your Human Resources Centre of Canada showed that 79% of them said that clients aged 60 and older have the most difficulty in finding jobs and 71% of them said that clients aged 45 to 59 have the second most difficulty in finding jobs. Yet just recently you withdrew the funding for things such as seniors employment bureaus.

I'm questioning why you have no concern about this segment of society with arguably one of the most problems in the unemployment field.

The Chairman: Mr. Minister, before you respond, just to move things along a little bit, perhaps Mr. Anders could pose his questions and you could answer all three of them together.

Mr. Rob Anders (Calgary West, Ref.): I'll run through them, then.

First, do you intend to qualify the size of the surplus that's necessary in the EI account to maintain premium rate stability?

Second, you said just this morning that when the unemployment rate went up, premiums went up and that was killing jobs when you needed them the most. If that's the case, I'm wondering why payroll taxes are being kept so artificially high. You're in the eighty-sixth month of unemployment above 9%. You said that when the unemployment rate goes down, you know the system works, yet we've had the unemployment rate stay at about 9% for 86 months. The system doesn't seem to work, and I'm wondering why you won't consider a significant decrease in EI premiums. That's the second question.

If you don't mind, I'm just going to run through a couple more in case he has time.

Right now there's a freeze on tuition rates in Quebec for Quebec residents. The Premier of British Columbia just this morning in the Montreal Gazette was quoted as threatening to impose a similar policy, whereby there's a discrepancy between students from outside Quebec and inside Quebec. He was threatening basically to have reciprocity, that British Columbia would do the same type of thing. I'm wondering what the federal government is going to do about that and what your thoughts are on it.

Fourth, when the Department of Fisheries and Oceans clearly knew much better than HRD did what the numbers were for the TAGS fiasco and how many people would qualify, why wasn't your department co-ordinating with them on what the problem was?

Last, on student loans, right now it's very easy for banks to claim that a student loan has defaulted. Several students have been writing to me, saying they were able to pay their student loans, but the bank went ahead and defaulted on them outside of the proper process. They now have a black mark on their record.

• 0920

I'm wondering what your thoughts are on the government's requirements being too lax on this. Are we having more student loan money defaulting than we should? What recourse does a student have when the government's own policy on this and what the banks are doing puts a black mark on their record? Wouldn't it be much better if the system had everything tied in to their social insurance number and made it income-contingent so this type of thing didn't happen?

The Chairman: Thank you, Mr. Anders.

Minister, you have about two or three minutes.

Some hon. members: Oh, oh!

Mr. Pierre Pettigrew: Yes, Mr. Chair. I'll at least give an indication of where we're going.

On the older workers, it is a major concern I have. We eliminated the POWA last year because I thought it was a rather inequitable plan. It was a bit like the lottery. If you did fit in the categories, you were fine for the rest of your days. You needed to be part of a collective mise à pied and elements like that, and that created a problem for me.

There again, we are insisting more on active measures that we're taking. When we have a transitional job fund, we're helping the older workers as well. The active measures of training and the active measures in part two of the EI law, where we're putting a lot more money, are active elements. On assisting them and training them, we have eliminated some organizations that did bid but lost against other organizations. Tecsult Eduplus has been awarded the contract for doing that work for older workers as well as for women. They did bid and win the contract, so we're still giving the services for particular assistance to older workers.

I'm giving you that answer knowing very well that somewhere.... I've already asked my deputy minister to look into what more we should be doing for the older workers, because I believe we need to do more. I'm giving you the answers, because there are answers, but we need to address that particular situation in a bigger way. But I don't think the old POWA was the solution.

On the numerous questions from Mr. Anders, I've already talked a lot about the surplus in the EI, as you've referred to, in terms of qualifying it. I won't tell you today where I believe it should be or whatever. To me, it is a decision that we have to make year after year, according to the economic situation, where we are, how we plan and forecast the economy will be going, and how the reform will actually be implemented, with more information coming back from the line on the impact on it.

Payroll taxes are going up. First of all, we have the lowest payroll taxes in any G-7 country, so we must be doing something right. Is CPP a payroll tax? I don't consider that a tax. To me, CPP is clearly an investment. It's clearly an investment in the security of seniors down the road. It's not going to the government funds. We're not making any money with CPP. We're investing that money for the future of Canadian security, if Canadians want a comprehensive package. So to me, it would be unfair to consider it a payroll tax at this particular time.

On the EI, I think our record is fine. It's been going down four years in a row, so it's not too bad.

On the freeze of tuition fees, as you know, it is a provincial decision. I think you were leading towards the mobility of students that B.C. has implied. Is that what you were referring to, the mobility of students that would be impeded by...?

Mr. Rob Anders: That's right. Right now, the way it exists, students across the country can pretty much move to any province without being penalized for being outside the province. Quebec is doing that, and I'm wondering what you're going to do about it.

Mr. Pierre Pettigrew: I'm against that. I believe penalizing the mobility of students in Canada, and mobility in this economic union, is not the right approach. I've already made it very clear to Madame Marois; she knows my position on it. It is something I do not agree with. I do not like any impediment to the mobility of students or whoever in this country of ours.

Tuition fees are a provincial jurisdiction, and I cannot go into it.

Mr. Rob Anders: Excuse me—

The Chairman: Mr. Anders, let the minister finish. Your time is coming to an end and there are others who want to get up.

Mr. Minister.

• 0925

Mr. Pierre Pettigrew: You raised TAGS. I can tell you that the program was put in during an emergency crisis. There was an emergency out there, a terrible situation that we were confronting. Was everything perfect in the program? No, there were a lot more people than had been foreseen. This is why some of the timing elements have had to be changed. When you have an important situation like that one, you address it as well as you can. I think on the whole it has been a very important program for a lot of people. For a program that had been put in in an emergency situation...I think it has been difficult to co-ordinate everything that might have been better co-ordinated. We were learning.

On student loans, we're working very hard at it right now, and we will want to make it easier for students to reschedule their loans. I have had the first ever stakeholders conference on student loans just two or three weeks ago in this very city. I had the provinces, the lenders, the student associations. This is something on which my officials are working very hard right now, because this is a serious situation that we want to address.

The Chairman: Thanks, Mr. Minister.

I'm going to take two questions from Ms. Guarnieri and Ms. Bennett, and actually Mr. Wilfert as well. We'll get all three of you on. Just ask your questions, and then, Mr. Minister, I'll call on you to respond.

Ms. Albina Guarnieri (Mississauga East, Lib.): I only have one question, because I know time is of the essence.

The Chairman: Thank you.

Ms. Albina Guarnieri: I know that you have been working hard to try to deal with the chronic levels of youth unemployment. I certainly want to commend you for your efforts, in particular your initiatives to assist young people to develop the skills they need. You outlined some of your programs earlier.

There are, however, a substantial number of young people who don't fit in this category and are outside the skilled worker category, as Larry mentioned earlier. Unless focused efforts are made to encourage job action for unskilled workers, no significant dent will be made on the unemployment rate for youth.

There are industries, for example, that are interested and willing to hire these workers. I'm speaking primarily of the hospitality sector—the restaurant business and tourism sector. When we compare the steps to employment growth in this sector, it is far less than in the United States, and it's largely due, I guess, to our GST or entertainment tax credit. Are you perhaps looking at developing some kind of strategy to address this sector, which is interested in hiring largely unskilled workers?

The Chairman: Thank you, Albina.

Carolyn.

Ms. Carolyn Bennett (St. Paul's, Lib.): Thank you. I have three quick things. The first one follows up on Mr. Dubé's disability pension problem. I would just love to know what the percentage is of people who are turned down the first time. Having filled out many of those forms myself, I just want to know if everybody is turned down the first time and if everybody has to go to the tribunal. I think of that poor physician sitting there with his 4,000 line-up. I just don't understand it, and I think it's extremely restrictive. Anybody who is a square peg for a round hole is turned down. Then they have to get a lawyer and go to the tribunal.

I guess I was a little worried about what Mr. Cappe means by a success rate. Does that mean you're successfully turning down these appeals, or what does success rate mean to you? From the point of view of somebody who's filling out the form for the client, I wouldn't see that as a success.

Second was the national tax benefit, following up on Ms. Davies' question. If indeed the national child benefit is meant to deal with the welfare wall, and it was intended to help people—because of drug programs and all of the things—actually get into the workforce, I just don't think we've done a good enough job explaining that. We're still getting questions about why it isn't helping the poorest people. If that's not what it was intended to do, why don't we just say this is what we saw was the number one problem—helping people get into the workforce. Could we articulate that a bit better so we don't continue to hear the criticisms of it, when it wasn't what the program was intended to do?

• 0930

This is the third thing. Those of us who live in Ontario have a terrible problem with this whole devolution thing. I guess I want to know how we're going on the labour market agreement, because it makes a lot of us very nervous. We are hearing just tremendous disagreement with this whole process. We feel that in order to have partnerships, you need to have trustworthy partners. I guess I wondered how that was going.

The Chairman: Thank you, Ms. Bennett.

Mr. Wilfert.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you, Mr. Chairman and Mr. Minister. I apologize for being late. Unfortunately, neither your department nor anyone else has come up with how you can be in two places at the same time.

But I did read your speech. I must say there were four words in your speech that should be embossed on every wall of the Human Resources Development offices across Canada. This is on page seven. You say that you're committed to delivering relevant, responsive, accessible, and affordable services to Canadians. I think that should be the tenet for every member who works for your department. I think it's extremely important. I would hope that those words obviously are translated into action, because I think they are very important to all Canadians.

To make a few comments very briefly, I would just pick up on one thing Madam Bradshaw said. I certainly don't agree with the deputy minister in that I don't think you'll ever replace human contact. To me, you're talking about people who often are frustrated to begin with. I get more frustrated than most people because I have a short attention span when it comes to dealing with numbers on phones. Also, some people may not have the necessary skills to go through all of these steps.

Some cities can do it, and a lot of cities do not. In fact, some rip them out. They deal with a lot more calls at times on a daily basis, and it's very frustrating. You want action, and if you want to be relevant, responsive, accessible, and affordable, that's what I think you should be doing as quickly as possible in the long-term strategy.

As far as labour market agreements are concerned, I agree with my colleague. As for co-management, certainly in Ontario, I think we've gone too far in many respects in terms of devolution. I often wonder who's actually delivering the program. We may be delivering the dollars, but we would never know that we were delivering the program. I think we need to be much more visible in that regard.

When you talk about young people and unemployment, 24- to 30-year-olds, people who have come out of college or university often may be equipped with a degree, but they do not have the ability, skills, or whatever, to get the job. A lot of people go back home. There's a lot of frustration. There's also a lot of frustration with 45- to 55-year-olds in terms of downsizing.

In terms of the approaches, maybe you have some comments in terms of what kind of strategies we're putting in place to make it relevant with the short turnaround time for these people in particular who desperately need to have a fulfilling life.

One that I will certainly send information to you on is this concern I have. HRD encourages innovation. I know of a project in which a municipality in my community put forth a suggestion for a program under the HRD guidelines for the technology institute for innovation. They were told that it was only their municipality that put it forth, so they needed other municipalities to participate. Yet it served a broader area than just one municipality. If the others don't want to participate, I don't know why the one would be penalized, because its service area was certainly far greater than its particular borders.

I just put those comments and some brief questions to you.

This isn't flattery, but a number of people in my community have seen you on television. They all say, we don't know what he's like, but he seems very sincere. So they hope that sincerity, of course, is translated.

I must say that I will again come back to those four words. If that's going to be your guideline for your staff and department, I think we're going to be much better off.

The Chairman: Thank you, Mr. Wilfert.

Now, Minister, with great sincerity, can you respond to these three questions?

Mr. Pierre Pettigrew: Of course.

On youth and employment, I think a very important element of the youth has been failed, as I said already. We're already doing quite a lot, but should we do more? As I say, as resources become available, we will do so, because that is a very tough priority. Our method of partnership with the provinces, with industry, and with businesses is really the way we want to do things. So thank you for bringing it to our attention, and we will try to build the right partnerships in the direction you were raising.

• 0935

On the disability pensions, we will give the numbers to you today, and the deputy minister will add to that. It's important to realize that it is the Auditor General who has asked us to be more restrictive on the pensions, because of the vast increase of the mid-1970s. So we are acting on the Auditor General's request.

The deputy would like to add something.

Mr. Mel Cappe: I'd just note that some decisions of the Pension Appeals Board have changed the standards, in effect. As well, there have been some changes in the relationships with some other programs, such as the Workers' Compensation Board or other initiatives, which may have people.... They send people with short-term disabilities to us. You can't pass them back and forth. This is a tragedy in some ways.

When I said “success rate”, I was referring to the fact that our objective is not to qualify or disqualify any number of people; it's to treat them fairly under the law. Of the appeals that go to the Pension Appeals Board, 70% are not allowed. I don't see that as a success in the sense that the system's working well. It's an unfortunate circumstance, but I don't think the fault is in the staff who are making those determinations. That's all I was trying to get at.

Mr. Pierre Pettigrew: To continue, Carolyn, thanks for the advice on the communications. We keep talking about this reduction of welfare. I'm talking about the children's program we've been promoting. We'll try to improve our communications as far as that is concerned. I thought we'd made it abundantly clear, but if it's not, we'll continue. The paper we produced along with the provinces last summer described it, to me, pretty well. We issued it in August.

But I do believe that even if the elimination of the welfare wall is more in terms of process, the objective is to reduce child poverty, because by reducing the welfare wall, you help children having a parent at work. Down the line, even if that person is working poor, they will be better off. So it is still the objective.

I'm going very quickly, because I have to go to cabinet, as you know.

Bryon and Carolyn, you've raised the labour market development agreement that we've had with the other provinces and on which we're working with Ontario. As you know, Ontario did not want to come into negotiations last year, when we made that offer. Recently, the Government of Ontario has, however, decided to enter into some negotiations. So we have been having some preliminary discussions on it and exchanges of information with the Government of Ontario. But I am well aware of your preoccupations and your preferences in terms of ways things should be moving.

Thank you.

The Chairman: Thank you, Mr. Minister.

Mr. Tremblay and Madame Gagnon, please pose your questions, and then the minister can respond.

[Translation]

Mr. Stéphan Tremblay (Lac-Saint-Jean, BQ): Certainly, Mr. Chairman. Mr. Pettigrew, we don't often get the opportunity to talk things over with a minister, certainly not in the House of Commons in any case.

My first 30 seconds will be used to sensitize you to a huge concern that I and my generation have about a phenomenon that's taking on unbelievable proportions, and that's the gap between the rich and the poor. That's something that worries me a lot. One of the indicators of this is child poverty. I'd simply like to make you more sensitive to this concern of mine. In 30 years, if the trend continues... That's really not the kind of society I'm interested in.

Earlier on, you were talking about co-operation and partnership and saying you were ready to look for solutions. Within a more partisan context, I'd like to put this question to you: Are you aware that a lot of things your department does either overlap or duplicate a lot of what Quebec is also doing presently? I'm speaking more specifically in terms of employment.

When one talks about duplication, one also talks about inefficiency and confusion in the ranks of the population. I'll give you examples. I have here a comparative chart of the programs that exist in Quebec and at the federal level. There's the youth program. That was graven in my memory. I have a list here of nine programs that exist both at the federal and the Quebec level. If this isn't duplication, I don't know what it is.

• 0940

On October 24 last, Ms. Harel asked you to show some sincerity in talking about your intention of dealing with provinces as real partners. I have here indubitable proof that there is duplication and thus loss of efficiency for some programs.

Something else is bothering me. Recently, at committee, the matter of the Canada Millennium Scholarship Fund announced by Mr. Chrétien was brought up. Every year, thousands of dollars in scholarships will promote access to post-secondary education.

It's a grand principle, but this measure will only be a complement to provincial efforts. Sometimes, I listen to colleagues from the Quebec Liberal Party. Mr. Gautrin was telling Ms. Marois that she shouldn't wait but should try to convince Ottawa that the Quebec government is in the best position to manage this additional help. Even the student federation said that linking the bread and butter of the poorest students to their performance in the classroom stemmed from an ideology that it could not endorse. You must certainly realize that these millennium scholarships will be tied to the students' academic performance.

In this same vein, the president of the Canadian Students Federation, who is a federalist himself, even said that in Quebec, we had an exemplary loans and bursaries system, one of the best in Canada, and that he didn't understand why the federal government was trying to set up a loans and scholarships program in Quebec.

So, on the one hand, you slashed transfer payments and, on the other, you're trying to get involved in these programs. I don't quite understand this, myself. I'm quite concerned as to the efficiency of all this and I would ask you why you're not taking active steps in the area of youth employment to transfer them to Quebec just as you did in the case of your other employment programs.

[English]

The Chairman: Thank you.

Madame Gagnon.

[Translation]

Ms. Christiane Gagnon (Québec, BQ): Minister, I read your brief attentively. You've made several statements. I'm not questioning your good faith, but I can see a lot of contradictions in what you're saying.

For example, you state that children top the list of your priorities. I find that's wishful thinking. You also say that Canadians want to have access to health and education. That's motherhood and apple pie. Through the different provisions you are suggesting, you're advocating flexible federalism.

You state that children are at the top of your priority list. You're not going to be able to settle their problems with a child tax benefit system. In 1984, family allowances, the child tax credit and the credit for dependent children represented some $6.7 billion. Today, you're offering $5.1 billion with the child tax benefit and you're adding another $850 million. So finally you're back to our 1984 square one. You're putting us on just a bit when you boast about the $850 million. There is a $1.6 billion deficit as compared to 1984. I don't think that, on its own, this measure will help to relieve child poverty.

You say you're concerned with health and education. If you're concerned with health and education, why did you make such deep cuts to the Canadian Social Transfer, as these cuts put the provinces in very difficult situations and force them to slash their own budgets in turn? We all know what's happening in Ontario and Quebec.

You say our federalism is flexible and modern. Why don't you say yes to Quebec's demands to get this back as tax points? In Quebec, we're setting up a real family policy that's going to dovetail many measures to relieve poverty. When you talk about poverty, it's not just child poverty. It's also the poverty of the parents who don't have jobs and whose marginal socio-economic condition has been handed down from generation to generation. You have to think about helping students and so forth. Why don't you help through the Canadian Social Transfer or through the transfer of tax points to those provinces who want to settle the problem at source and who are far closer to the population's needs than the federal government can be?

• 0945

Would you be favourable to appointing a poverty commissioner who could analyze the policies, not the policies and programs that lead to duplication and overlapping, but the impact of those measures taken by the federal government? Unfortunately, the CACSW was abolished. This could serve to measure the social impact of what is done in the fields of employment insurance and child tax credits to see how far these things go in helping you attain your objectives. Please allow me to say that I have my doubts.

The Chairman: Minister.

Mr. Pierre Pettigrew: I'll allow whatever you wish, Ms. Gagnon.

Ms. Christiane Gagnon: Yes? Ha, ha!

Mr. Pierre Pettigrew: I'll first address your question on children. You say you doubt that it's a priority for me because the difference... It most certainly is a priority.

You say we're back to square one, but we don't have a $42 billion deficit anymore. If you consider that we've eliminated a $42 billion deficit and that we're managing to maintain the same amounts for children, that certainly means that children are a priority. In eliminating the $42 billion deficit, we've managed to protect our children and we'll be adding $850 million to the child tax credit. That shows that we've made children a priority.

That does not take into account the Health Department figures for the Community Action Program for Children, the CAPC, that got a $100 million increase last year. You say that we've cut our transfers. Of course! The federal government has a lot of transfers. It's clear that had to be taken into account in the cuts, but we've already increased things. We decided to stop at $12.5 billion although we had announced a decrease to $11 billion. That's better than nothing.

When Mr. Tremblay said he would place things in a more partisan context, this was an invitation for me to do it. Do you know that the Quebec government, on top of these transfers, gets 46% of equalization adjustments in Canada? Forty-six per cent of all equalization budgets are handed over, without any federal government visibility, strictly to allow the Quebec government to give Quebeckers public services of the same quality as elsewhere. Don't come crying this morning.

I honestly think that if any province managed well during the exercises we've been through the past few years, it has to be the province that I have the great honour to represent in the government of Canada.

Now, Mr. Tremblay, you've addressed the gap. I thank you for having drawn this to our attention. I can assure you that this gap between rich and poor is of great concern to me. We're agreed that we have to work on that.

However, you say that the Quebec system of loans and scholarships is the best we have. I would point out that the government of Canada does fund it generously. As you know, the contribution of the government of Canada to the Quebec loans and bursaries system is enormous. But we have no visibility. It's very rare that the Quebec government recognizes that the government of Canada contributes generously to its loans and scholarships system.

You're telling us to get out of the picture, but to keep on paying the bills. This isn't how you show leadership. I'd like to have the list of the nine programs you say are duplications and overlaps. I would like to have it.

You'd increase your credibility a lot in the matter of overlaps and duplications if you were to criticize the Quebec government for setting up a Francophonie aid fund. We have CIDA, the Canadian International Development Agency. Quebec is dealing in remarkable duplication when it starts doing that, all of a sudden. The Canadian government never accuses Quebec. I don't berate them for that. I just figure: Okay, it's nice to have aid for development. There are all kinds of things that fall under Canada's jurisdiction. When Quebec is doing duplication, you don't say anything. When it's Ottawa...

I don't call that duplication. I would never deprive Quebec's youth of those programs that will allow it to have access to programs where Canada has the expertise. When we organize internships through the Canadian International Development Agency, when we organize internships through International Trade or the Department of Foreign Affairs, where we have the expertise... Mr. Lucien Bouchard got back from China and was astonished by the professionalism of our Canadian diplomacy. He enjoyed its benefits tremendously and I'm quite happy with that. When he goes off on these trade missions, I don't accuse him of creating duplication. I'm pleased to see him imitating Prime Minister Chrétien with these trade missions abroad. One of the strengths of federalism is that it allows people to imitate one another. Mr. Bouchard imitated Prime Minister Chrétien and I'm not saying that this was duplication. He just did his duty.

So we have to be careful with this duplication thing. When two are doing the same thing but do it in such a manner as to help other companies and other countries, that's fine.

• 0950

But don't ask us to withdraw from programs for Quebec youth on the international scene, for example. I could also talk about science and technology or natives. When we help native youth, it's our constitutional responsibility. So we have to help Quebec youth just like all other Canadians.

Everyone recognizes the Canadian government's jurisdiction on the international scene. That's an example. That's not part of any of the subtleties. When Ms. Harel says we must transfer everything to Quebec because they're better, that's just not so.

Internationally speaking, I can give you a quote from Lucien Bouchard, who acknowledged that Ottawa was much better than the Quebec Department of International Affairs. That is part of the picture. I agree with eliminating overlap and duplication. I agree with you on that. I wrote a letter to that effect to Ms. Harel.

I would however like us to be cautious with respect to what we call overlap and duplication. There are some things that are not overlap and duplication in what we are doing for young people. Do you agree that we can continue to help young Quebeckers, as well, with respect to the labour market?

Mr. Stéphan Tremblay: I think we would need to have more than a 10-minute discussion on that, Mr. Pettigrew.

[English]

The Chairman: Mr. Tremblay, thank you very much.

Members of the committee, I'd like to have a brief meeting after this meeting. The minister has to go to cabinet.

Mr. Minister, I would like to make a couple of comments. One is to thank you for being here and taking so long today. It's so early in our mandate. We appreciate the time you spent with us.

The second comment is, through you, to thank your staff who have been very responsive to the committee and to the needs of committee members. We also really appreciate the support we have been receiving from the department and look forward to an interesting year. We thank you very much.

Mr. Pierre Pettigrew: Thank you. I enjoy working with you, Mr. Chair, and with the committee.

The Chairman: Don't all run away.

Monsieur Crête, Mr. Dubé, the sooner we sit down and start talking, the shorter it will be. I think it will take minutes.

Monsieur Crête, Madame Gagnon,

[Translation]

just a moment please.

[English]

You have received a copy of two motions. As you know, pursuant to the rules of the committee, we have to have unanimous consent to proceed with these motions. Both of them are pretty innocuous, having to do with the Centennial Flame Research Award and the advertising of it.

Ms. Libby Davies: Who are they from?

The Chairman: They're from the clerk. At the previous meeting we requested that the clerk go forward with the process for this year, so we got it started early because we were so late last year due to the election.

So my first question is whether or not I have unanimous consent to proceed.

Some hon. members: Agreed.

The Chairman: May I have a mover for the motions?

Monsieur Dubé, seconded by Mr. McCormick, moves the first motion that the deadline for applications for the 1998 Centennial Flame Research Award be April 30, 1998, and the amount of the award be for $2,500.

Mrs. Diane Ablonczy: Mr. Chairman, is this a change at all from any other deadline that might have been put forward?

• 0955

The Chairman: It's a little behind the normal deadline because we were later in the whole process because of the election, but we're moving now. We want to get it going because we were delayed.

Mrs. Diane Ablonczy: Thank you for that clarification.

(Motion agreed to)

The Chairman: The second motion, that a press release be issued inviting candidates for the 1998 Centennial Flame Research Award, that the press release be posted on the committee's Internet site, and that it also be prepared in braille, is moved by Ms. Davies, seconded by Ms. Bennett.

(Motion agreed to)

The Chairman: I thank members for that.

There is one more piece of business. You know that the House is recessing next week. We have a body of work that was done on the student aid round table on the issue of student aid. The researchers have pulled that together in the form of a report to the House, which is currently in translation.

In order to facilitate the process, with your consent I would have the researchers circulate it to all members the moment it is back from translation, so you'll have a chance to see it in advance. Then we will have a meeting probably Thursday afternoon to finalize the content. If you have comments and changes or egregious issues that you want to raise, perhaps you could alert us to them so we could have a focused discussion.

Ms. Libby Davies: I won't be here on Thursday. If we do get it tomorrow, can we forward our comments to you or the research staff or the clerk?

The Chairman: Absolutely, Libby. I might be proved wrong, but I don't think there's a lot of contentious stuff in it. It shouldn't be a problem.

Is that agreed?

Some hon. members: Agreed.

The Chairman: We will have that circulated to you the moment it is in our hands, and we will call a meeting for early Thursday afternoon to try to dispose of it.

The reason I am moving so expeditiously is that once we approve it we have to put it into final form and get it finally prepared for tabling in the House. That may not happen until Monday or Tuesday of next week, and then we don't know whether or not the House is going to be open Thursday and Friday of next week. I'm just trying to get it in before the House recesses.

Mr. Jean Dubé: Mr. Chairman, for the record, in my question I asked for the chief actuary's report to be delivered and I did not get it.

The Chairman: We will see that you get it. We could continue the meeting until it arrives.

Mr. Jean Dubé: No.

The Chairman: Upon the completion of that, thank you very much.

We're adjourned.