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, May 5, 1998

• 1534

[English]

The Chairman (Mr. Reg Alcock (Winnipeg South, Lib.)): Let us come to order and let us get right to the business of the day.

• 1535

Mr. Minister, we had the Minister of Labour before us this morning, and there was a lot of love in this room, a lot of support for the government's programs. I suspect we'll see it repeated this afternoon.

Perhaps you could begin by introducing the people you have with you at the table, and I understand you have a few short remarks you'd like to make.

The Honourable Pierre S. Pettigrew (Minister of Human Resources Development): Yes. Thank you very much, Mr. Chair.

I have with me today Ethel Blondin-Andrew, Secretary of State. As you know, we've been working very closely together on many files. She will have some introductory remarks after my own, a little later. As you know, Ethel has been doing a great job on children, on youth, and on the regional bilateral agreements with the aboriginal communities on the labour market development strategy.

I also have with me my associate deputy minister, Mr. Ian Green, and Norine Smith, who is going to take all the political questions. I'll take the technical and she'll take the political ones today. That's just a little agreement we have between us for today.

[Translation]

I thank you kindly for your welcome. I am happy to see that everything went well this morning with the Minister of Labour, Mr. MacAulay.

Ms. Ethel Blondin-Andrew and I are happy to be here today to discuss with you Human Resources and Development Canada's report on plans and priorities.

The activities of our Department are based on a very simple premise which, to my mind, makes a lot of sense. If Canada is to have a healthy economy, we must have a healthy social basis. And, of course, for us to have a healthy social basis, we need a sound economy. So it's very important to think social programs at the same time we're thinking economic development because one does not go without the other. We can't have good social programs if we don't have a good economy. At the same time, we're perfectly aware that we can't have good economic development if our country's social fabric is not reinforced. That's why we've established certain priorities.

Actually, what I want to say, is that our human capital is the key to prosperity in a knowledge-based economy. Those countries able to promote the development of the potential of all their citizens are those who will be in the best position to succeed in the 21st century.

This conviction is the basis for our government's priorities in general. By getting Canada's finances back on a sound footing, we can reinvest in those social priorities which promote our economic strength.

The Human Resources Development Department that I've had the privilege to head for some 20 months now, is at the heart of our government's social and economic program.

The Report on plans and priorities demonstrates that we share most of the elements of this program with the provincial governments with whom we always wish to work as closely as possible, with the governments of the territories, businesses, unions, the volunteer organizations and the communities at large. Our Department is a hub of multiple partnerships across society. We have worked very hard so that these partnerships, especially those with the provinces, be built in a climate of confidence. For a while now, we can say that we've managed to work in a climate of trust with the provinces. So I find it's always a great motivation to be Minister for Human Resources Development.

I regularly meet with my colleagues from the provinces and the territories. What I've noted is their willingness to use the flexibility of our federal system and a commitment to share responsibility for results. What our fellow Canadians are expecting more and more is responsibility for results. I also believe that at that level, important progress has been made in many of the programs we've set up these last years.

[English]

At 10 o'clock this very morning I tabled in the House the government's response to the first report of this committee, “Ensuring Opportunities: Access to Post-Secondary Education”. I'm pleased to report that the government agrees with almost all of your recommendations. We have already acted on many of them through the Canadian opportunities strategy in the last budget, but I would like to thank you and your committee, Mr. Chair, for the very good work that has been done on this extremely important priority—that is, access to education and knowledge and skills in this country.

• 1540

The first priority was the need for better debt reduction measures linked to income. Indeed, there is an improvement on that side. This is something the students had asked us as well at the stakeholders conference we had in November. I'm very pleased that under our Canadian opportunities strategy we have expanded the interest relief program to make more borrowers eligible for assistance, and we will implement a new debt reduction program that is addressing that situation.

In addition, a new tax credit for interest paid on government student loans will be available for the first time ever.

The second priority you noted was a package of upfront grants to limit debt and encourage access. Well, we have responded, with measures such as our new Canada study grants, which will provide as much as $ 3,000 a year to more than 25,000 students. Part-time students will be eligible for education credit and childcare expense deductions under income tax.

The centrepiece, of course, of the Canada opportunities strategy is the Canada millennium scholarship fund. The government is implementing the Canada millennium scholarships in a way that does respect jurisdictions in this country but that will contribute significantly to assisting students' access to education by bringing in substantial investments, a substantial amount of money, as you know.

The third priority you reported was tax measures to encourage families to save for post-secondary education. We agreed. This report on plans and priorities includes funding for the Canada education savings grant tied to registered education savings plan contributions for children up to age 18.

The 1998 budget also allows people taking up full-time studies to withdraw money from their RRSPs, subject to certain conditions. Like the committee, we recognize the importance of supporting lifelong learning.

The fourth priority was better communication on student financial assistance among stakeholders, including students and their families.

The fifth and final priority was improved administration and delivery of federal and provincial student assistance.

Many of the solutions to these priorities will come through work with our provincial and territorial counterparts in the coming months and years.

[Translation]

Fostering access to education is only one element in the youth program. Our Youth Employment Strategy is another very important part of it. The Report on plans and priorities includes the $ 50 million additional amount for 1988-99. This amount was announced in our last budget and is to go to activities promoting the employability of youth at risk.

There is also provision for a decrease in Unemployment Insurance premiums for those employers hiring young people in 1999 and in the year 2000. Partnerships are at the heart of the Youth Employment Strategy. Last year alone, they helped us create some 100,000 placements for young Canadians. As you very well know, having something on a curriculum vitae is an extremely important asset for a young person trying to be part of the labour market.

Two programs in particular, Youth Service Canada and Youth Internship Canada get employers and youth together. Recent enquiries have shown that 85% of those participating in the Youth Service Canada Program and 88% of those participating in the Youth Internship Canada program found a job or went back to school during the year following their participation.

• 1545

This shows that our strategy works and that we've finally found the right tools to meet the needs of our youth who are having problems with their transition between school and the labour market.

[English]

On March 27 most of my provincial colleagues and I endorsed a partnership that will help us work more closely with business, labour, communities, youth and their families. I'm happy to report that the youth unemployment rate has already dropped 1.7 percentage points in the last nine months. Together I think we can help push that number down even further, because it does remain too high.

My department is responsible for many of the most visible federal benefits. We work with Canadians throughout the cycle of life, from children to seniors and at every stage in life in between. In so much of this, we work with our provincial and territorial colleagues to reach shared objectives.

For example, the national child benefit system is an exciting step forward in social policy, the most important step forward in social policy of the last thirty years, one that will reduce child poverty and help parents move into the workforce and help them eliminate that welfare wall that has kept so many in that welfare trap—and basically, what people want is to work, and once they do work, to go up the ladder toward higher incomes—without penalizing their kids by eliminating so many of the services and programs that were for welfare kids and that did not exist for kids in low-income families.

I think this is a good way of doing it. We've done it as a great partnership between the provinces and the Government of Canada. We all subscribed to it and built it together.

Our government has contributed to this new model of cooperation. By 2000 we will have committed new funding of $ 1.7 billion per year—$ 1.7 billion per year, year after year—toward this program. I think this is a significant commitment on the part of our government.

[Translation]

The provinces and territories have started to fulfill their commitments by announcing reinvestments into improved child care services, income support programs and other kinds of benefits. We're making the same progress in the case of the handicapped.

Last March 2nd, Prime Minister Chrétien accepted, in Canada's name, the Franklin Delano Roosevelt International Award for efforts on behalf of disabled people. This award which is an homage to Canada's achievements in favour of the disabled also reminds us that we can do even more. I am cooperating closely with my colleagues from the provinces and the territories to elaborate a new and common vision of our work with the disabled based on citizenship, income support, employability and the costs associated with disability. We have already started signing agreements with the provinces concerning the new employability support program for persons with disabilities. Our goal is to help persons with disabilities find a job and keep it to become full-fledged participants in Canadian society. This cooperation as well as the priority given to results are manifest everywhere in the Report on Plans and Priorities.

[English]

For example, one of our most high-profile programs is the Canada Pension Plan. CPP reforms that Parliament passed last year were the result of intense discussions with the provincial and territorial governments. Together we found a constructive way to ensure a sustainable CPP for both today's and tomorrow's retirees. “Flexible federalism” has become a watchword throughout the work of Human Resources Development Canada.

The last example I will cite is our new set of labour market development agreements. I'm pleased to conclude these agreements and proud that they focus on achieving results and include accountability structures.

• 1550

I am not surprised, of course, that the agreements were quite varied. I know from experience the diversity of this country and its economy. This is why we came to very different agreements from one province to the other—to make sure we really reflect the needs of citizens and different labour markets in this country. One of Canada's many strengths is a flexible federal system that allows us to choose many paths to the same goal.

[Translation]

Those are a few examples of our achievements and intentions. As we believe in partnership and as the federal system allows us to be creative, we are seeing to the implementation of a program that all Canadians support. When we talk about helping children to get a good start in life, helping persons with disabilities use their talents in the service of Canada or helping our youth develop the knowledge needed to benefit from the opportunities our new economy is offering, we are doing our work with a vision, with a thought for the kind of society we are going to become.

We can see the practical ties linking social and economic policy. We can see that the partnerships will allow us to attain our objectives. The Report on Plans and Priorities shows that we are shaping our country with confidence and that we are preparing all Canadian men and women for tomorrow's society and economy.

I thank you for your patience. My colleague, the Secretary of State, will certainly want to add a few words and we will then answer the questions the members may have.

[English]

The Chairman: Thank you, Mr. Minister, and thank you for the response to our report. I'm sure members will read it with great interest.

We'll open a round of questions. We'll allow five minutes on the first round, but I'm sure—

Mr. Pierre Pettigrew: Ethel.

The Chairman: Oh, I'm sorry.

Ethel, are you going to make an opening statement?

The Honourable Ethel Blondin-Andrew (Secretary of State (Children and Youth)): Apparently, yes. Thank you, Reg.

[Translation]

Thank you, Mr. Chairman. It's a pleasure to be here this afternoon with my colleague, Minister Pettigrew.

[English]

I am pleased to discuss my portfolio responsibilities for children and youth as they relate to the department's plans and priorities. In addition, I will briefly describe some added responsibilities given to me by the minister to oversee the aboriginal human resources development programming. We work closely together on this file as well as in the youth area.

As you know, Human Resources Development Canada created the “Pathways to Success” aboriginal employment and training strategy in the 1980s, and since then it has evolved into today's relationship providing aboriginal design and delivery of programs and services in a context consistent with the federal government's commitment to self-government. Aboriginal peoples now have substantial responsibility for control over the development of their human resources. This control stems from 53 agreements covering all first nations, Métis and Inuit groups, and similar agreements covering aboriginal women off reserve in urban aboriginal organizations. In a sense, it's the first real operational difference in actualizing and realizing real self-government and the empowerment and enhanced autonomy of the aboriginal peoples of Canada.

HRDC invests over $ 250 million a year in the future of aboriginal peoples under these agreements. Early results indicate aboriginal groups and governments are getting a favourable return on their investment. In 1997-98 nearly 30,000 aboriginal people received training or found work in either the mainstream economy or within the aboriginal communities.

Savings to social assistance, both federal and provincial and territorial, and employment insurance programs will be about $ 24 million. In 1999, when these agreements sunset, Human Resources Development Canada will move on to a new stage of human resource partnerships with aboriginal groups through a five-year aboriginal human resource development strategy. Most of you will know this responds in part to the Royal Commission on Aboriginal Peoples' request for a ten-year training strategy.

With respect to youth issues, I wish to emphasize, as the minister has done, that we're working on many fronts and in partnership with governments, the private sector, and the voluntary sector to help young people to prepare for, find, and keep jobs today.

The minister's presentation clearly demonstrates the commitment of the government to make youth employment a strong priority. Under the youth employment strategy, programs such as Youth Internship Canada and Youth Service Canada build on partnerships that bring together employers and young Canadians through initiatives that meet the needs of both the employers and the youth participants.

• 1555

I'm rushing because I used to sit on committees and I know how important it is for members to get their questions in.

The February budget authorized a $ 50 million increase in 1998-99 for activities geared to improving the employability of youth at risk. We will invest more in this area in the coming years. Community resources will team up with the government to give young people, especially youth at risk, greater opportunities. We're convinced we're making the right investments to help more young Canadians access the job market.

Mr. Chairman, I'm pleased to have this opportunity to describe briefly for you and the committee some of our activities in this area. Thank you.

The Chairman: Thank you.

Mr. Pierre Pettigrew: You deserve a drink.

The Chairman: Okay.

Sorry, Ethel.

Ms. Ethel Blondin-Andrew: That's fine, I was trying to rush.

The Chairman: We'll start with Diane and try five-minute rounds and see where we get.

Mrs. Diane Ablonczy (Calgary—Nose Hill, Ref.): All right. I'll rush too.

Mr. Minister, it's good to have you here. I have a few questions. As you know, in 1996 the federal budget announced a new seniors benefit that changed the seniors programs. But to date there has been no legislation put into place, leaving all Canadians dangling as to how they should plan their retirement savings. I wonder if you could tell us when legislation will be introduced with respect to the seniors benefit.

Mr. Pierre Pettigrew: That was my first budget, and I was campaigning at that time, but I noticed a major change in the campaigning at that time. It was a major issue in my riding in which there are a lot of senior Canadians.

Since then, as you know, my colleague, the Minister of Finance, who has been involved in consulting Canadians and groups, has received a lot of feedback, some from our colleagues, and representations. There is no date right now for when we will be tabling legislation because he and I will sit down again and look into everything we have both been hearing in order to make sure we present the best package at that time. But there is no timetable set at this particular time.

Mrs. Diane Ablonczy: I'd like to encourage the minister and his department to put a high priority on this. As you know, the proposed clawback was 50% of savings. A lot of Canadians are saying “So why should we save just to hand it back to government?” They need to know. There needs to be some certainty. I think two years is enough, and I certainly would urge the government to end this uncertainty as quickly as possible.

Turning now to the spending of the department, we've received correspondence dealing with internal spending in your department and we found that spending, not including salaries or statutory payments like CPP or OAS, increased 46% in the month of March. It went from $ 49 million to $ 72 million in that month. Some people call this March madness. Of course, as you know, the Treasury Board tried to bring in some guidelines to deal with this practice. Just some examples of expenditures in your department are travel increased 48% in that month, advertising increased 65%, hospitality increased 70%, and so-called special services doubled.

The President of the Treasury Board, Art Eggleton, in 1995 promised to stop this practice. I quote from Hansard on April 5, 1995:

I am pleased to say we have instituted a 5 per cent operating budget carry forward for departments so they do not get into that year end spending spree. Furthermore, I have written my colleagues in the ministry and my deputy minister has written his counterparts to help ensure the procedure to cut out the year end spending rush is followed.

Are you using this carry-forward provision, and have you or your senior officials violated the Treasury Board guidelines?

Mr. Pierre Pettigrew: Well, I'm sure they have not.

You attributed this 46% increase in one month to a certain number of elements, like travel. I just don't understand how it would increase so much in one particular month.

• 1600

Mrs. Diane Ablonczy: Well, this is documented.

Mr. Pierre Pettigrew: But I'd like to look into it more closely. It's the first time I've seen those numbers.

Mr. Ian Green (Senior Associate Deputy Minister, Department of Human Resources Development): I haven't seen the numbers, and I don't have them in front of me. If the member would like to give them to me, I'll certainly take a look at them and get back to you.

We have an overall—

Mrs. Diane Ablonczy: Well, I would assume you've seen them.

Mr. Ian Green: As for the numbers you're referring to in terms of travel, etc., I'll have to check into that. We have an overall operating budget in the department of about $ 1.7 billion, so $ 49 million of that is not an enormous amount in terms of the overall operation of the department.

You're quite right about the carry-forward procedures. Obviously we don't like to see year-end spending in a rush. Sometimes it's quite appropriate. It depends on the situation. If you give me the numbers, we'll take a look at it and I'll get back to you, but I can't comment specifically on the numbers.

Mrs. Diane Ablonczy: Could you comment then in general about you would explain the increase in spending from the previous month, which went from $ 46 million to $ 72 million in March? How can you explain this enormous jump in year-end spending?

Mr. Nick Discepola (Vaudreuil—Soulanges, Lib.): Is that month to month?

Mr. Ian Green: Again, my colleague is telling me basically that some of the answer to that in the increase is that about $ 30 million of that apparently came in terms of Y2K expenditures to ensure that our computer systems in fact are sound and able to function in terms of the year 2000. A lot of that was increased expenditures that related essentially to our efforts to make sure that all of our mission-critical programs in fact are checked and are functioning.

Again, I don't have the numbers right here in front of me, but a significant amount of that was in fact spending that was focused very much on our efforts to make sure that by a year ahead of 2000 we in fact would have all of our mission-critical systems checked and under control in terms of the department. So a very large amount, $ 30 million, was related to that one specific area.

Mrs. Diane Ablonczy: I would like to get into Y2K. I don't know, Mr. Chairman, whether I have time or not.

The Chairman: You have a very short follow-up question on this, then we'll come back to you in the second round.

Mrs. Diane Ablonczy: Perhaps I'll just hold that then for my next round. Thank you very much.

The Chairman: Thank you very much, Mrs. Ablonczy.

Mr. Crête.

[Translation]

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): Minister, you have a very rosy view of Canada. I for one would like to talk about a realistic view of Canada and put two questions to you concerning things that I think are important.

We've had representations from the Canadian Federation of Independent Business, the CLC and the Chamber of Commerce on Bill C-36. They've come here to tell us that they were wondering how long we'd keep on stealing their money from the unemployment insurance fund. We have a table produced by the Canadian Federation of Independent Business which shows that for every $ 2.70 paid in contributions, 87 cents go to Canada's general revenue fund and is in no way used for the unemployment insurance fund. Isn't that turning the unemployment insurance fund into an awful poverty generator and today, with 1.5 million poor children in Canada, shouldn't the federal government be using this tool to relieve them as we have been saying and repeating for many months now always getting the answer that it's under consideration? At the end of the session, wouldn't it be possible to get a commitment and an acknowledgement?

On the other hand, and this has to do with your very rosy view of Canada, I'd like to know what you mean by the flexible federal partnership system you've been talking about? Do you know that, right now, all the Quebec stakeholders who came before us, the student federations, the university deans, the unions, Quebec's education network workers, told us the same thing about Bill C-36, in other works that the federal government must absolutely accept the Quebec government's right to oft out with full compensation?

Is shrieking off the Quebec consensus a show of partnership and flexible federalism? In the report you've just tabled in response to the committee, you say nothing about the minority report tabled by the Bloc Québécois at that time. Your government acts as though Quebec does not exist. That's our daily reality on those two subjects.

• 1605

I'd like to know what you think about that. As we have the opportunity and the time to speak face to face, I hope we'll find out what you really think.

Mr. Pierre Pettigrew: I went to Rivière-du-Loup to say what I really thought about this whole matter not so long ago.

Mr. Paul Crête: But you've done nothing concrete.

Mr. Pierre Pettigrew: I'm not afraid of speaking out. Concerning your first question on employment insurance, I wouldn't want you to interpret this as a Quebec/Canada matter. I'm sure your friends from the Conservative Party will also have questions on the employment insurance fund and our way of managing it. This isn't a Quebec/Canada matter, it has to do with managing finances.

Mr. Paul Crête: It's true that you're stealing money from all Canadians. We agree on that.

Mr. Pierre Pettigrew: Hang on!

Mr. Paul Crête: I said the same as you did on that.

The Chairman: Mr. Crête, one moment, please.

Mr. Pierre Pettigrew: We've shown prudence in the management of the employment insurance fund. You know that we brought about the greatest reform in employment insurance in the last 30 years. It was an extremely important reform. As a government, there's one thing we don't want which is the day the economy slows down we'd all of a sudden have to increase payroll taxes.

Mr. Paul Crête: In 1983, you have a balance with an acceptable surplus. You have a 90 cents surplus.

Mr. Pierre Pettigrew: Am I the one answering, or you? I can tell you one thing.

Mr. Paul Crête: Answer, please.

Mr. Pierre Pettigrew: When we took office, it had already started climbing to $ 3.30. The preceding government had announced an increase in premiums to $ 3.30. We did not implement that increase; we set the increase to $ 3.07. Then, for four years in a row, we brought down employment insurance premiums. We brought them down four years in a row. So I think our record is not bad. What people appreciate is that there is stability in this field. On top of that, I can say that if there's a recession, at a time when everyone will be having the problems in an unhealthier economy, we won't have to impose extra taxes because we were prudent in our management of the system.

Mr. Paul Crête: That's untrue, you did it.

[English]

The Chairman: Mr. Crête, I will give you an opportunity to ask a follow-up question when the minister finishes his response.

[Translation]

Mr. Pierre Pettigrew: Second, in my opinion, we have a responsible approach but we're keeping some leeway, I'll admit that. I think that's normal after a reform that's as big as the one we undertook. You're spending your time asking for changes to the reform. One day you're asking us to make changes to the reform that would increase the costs and, in the same breath, you're asking us to decrease the costs when you start defending another point of view, all of a sudden. That's no way to govern. Thank goodness you're an opposition party who will always remain in the opposition because you have no hopes of forming a government.

Mr. Paul Crête: It is quite different.

Mr. Pierre Pettigrew: Well, I hope the country won't be governed by people talking from both sides of their mouth at the same time.

Mr. Paul Crête: Let Quebeckers choose.

Mr. Pierre Pettigrew: Quebeckers have already chosen, my dear friend. Quebeckers have chosen Canada. In the past 130 years, each time the question was put to them, they have never failed to choose Canada. You know very well that the only way you were able to increase slightly the number of votes in your favour was to confuse people by asking ambiguous questions, because you are not even capable of putting the question clearly. When they were last polled, 70% of Quebeckers answered yes to a question utterly conservative, that is "Do you wish Quebec to remain a province of Canada?" Even using the word "province" did not deter them to wish that the status quo remain. We can see that 70% of Quebeckers answered yes to that question.

Mr. Paul Crête: The federal government keeps thinking that it can speak for us. That is enough.

[English]

The Chairman: Thank you, Mr. Minister.

Okay, now let's come back to a question relative to the estimates. Mr. Crête.

[Translation]

Mr. Paul Crête: I would like to ask a question on the Millennium Scholarships. How do you react to the unanimous coalition that exists in Quebec with respect to the Millennium Scholarships?

[English]

The Chairman: Thank you, Mr. Crête. I did indicate that I would give you an opportunity to ask a second question. I notice the time is coming up. I will now give the minister a chance a respond to your question on the millennium fund and then I will move on and come back to you in a second round. Thank you.

Mr. Minister, on the second question about the millennium fund.

[Translation]

Mr. Pierre Pettigrew: On the question of the Millennium Scholarships, let us not forget that all the stakeholders have mentioned the vision the Canadian government was showing by making such a large investment in order to make education accessible. All the stakeholders in Quebec have applauded the fact that our government chose to apply $ 2.5 billion taken from the fiscal dividend for 1997-98 to such an important purpose as youth access to knowledge and skills. They all said it. Everybody's happy that we are concerned with that issue and I think it deserves to be said.

• 1610

You are talking about a coalition asking for compensation?

Mr. Paul Crête: They are unanimous in Quebec.

Mr. Pierre Pettigrew: You can say unanimous, but I have some reservations. You are talking consensus and unanimity but I find that you are exaggerating a bit.

Mr. Paul Crête: I challenge you to find one single Quebec stakeholder who would say the contrary before the committee. Find one!

Mr. Pierre Pettigrew: All I can say is that a few weeks ago, after Mr. Bouchard and Ms. Marois met with Mr. Chrétien—and I was at that meeting—a very fruitful negotiation and discussion began. I sincerely hope that we will be able to agree. The provisions are as flexible as possible in order that we reach an agreement with the government of Quebec. Hopefully, we will.

The foundation's mandate is very clear. We have recommended that the foundation not duplicate but complete existing programs. Moreover, foundations have the power to delegate to the appropriate authorities in Quebec the selection of the recipients of Millennium Scholarships. Therefore, if it is the very same competent system established by the government of Quebec that does the selection of the scholarship recipients, where could there be duplication?

Mr. Paul Crête: The administrative aspect is also important.

[English]

The Chairman: Okay. I think we've had some discussion on that. Perhaps we could move on to Ms. Davies.

Ms. Libby Davies (Vancouver East, NDP): Thank you very much.

I'm pleased that the minister's here today to answer our questions. The question I'd like to ask about is the child tax benefit.

We heard repeatedly from yourself and from other representatives of the government that the child tax benefit is to improve support for poor families and for low-income children and to better support those families and that it will reduce child poverty. But I think this is really an illusion, because when you look at the information that's now coming out by organizations such as Campaign 2000 and others, what becomes very clear is that although the total spending is being increased by $ 850 million, the purchasing power of the child tax benefit doesn't increase by $ 850 million because of the erosion over time due to inflation.

I think it's really a very serious situation, because when you look at detailed information that's come out it becomes very clear that for example since 1988 support has fallen for 90% of children, most notably for the poorest of children without earned income. In fact their support has fallen by about $ 200 since 1988. So in actual fact the child tax benefit is now worth about $ 1 billion less than the spending in 1984, and the poorest of children are now getting less than they did in 1984.

I'd really like to question you on this information that's being put out that there's this great increase, because when you actually look at the reality of what the benefit has been in the past and the erosion of inflation, in actual fact there are more and more kids who will be getting less under this benefit. So I'd like to challenge you as to why the government is not looking at full indexation of this benefit. In fact we had a motion in the House that did pass that asked the government to review this. I think you should be taking this very seriously if you are truly committed to reducing poverty in Canada.

Mr. Pierre Pettigrew: You know, frankly, when you say “if you are truly committed”, I am truly committed. Let's be clear about this. I am truly committed, and our government is.

If we compare to 1984 and 1988 decisions, I wasn't there when the previous government decided to eliminate the indexation. What I can tell you is that when I was given the task of leading Human Resources Development Canada a year and a half ago, I picked up a situation in which I'll tell you one thing: families will be much better off after July 1, 1998, and yet better off July 1, 1999, and July 1, 2000, than when I started as a minister.

• 1615

You know, $ 1.7 billion invested this year and in the coming two years is certainly a very important investment, which will make life easier for the poor families with children, certainly a lot better than they were two or three years ago.

Ms. Libby Davies: Mr. Pettigrew, I think it's an important investment, but it still does not deal with the reality that the erosion of inflation means that there will be huge numbers of poor families who are actually worse off. How does the government account for that? And why will the government not consider indexing the child tax benefit? I think the benefit those families get from that is enormous. They're simply losing ground, even under the current program you've announced.

Mr. Pierre Pettigrew: We have brought back the finances of the country in a proper situation. We brought back the finances of the country without any deficit as of now. That benefits families, including poor families in this country. That is the way we can control finances, if you don't trigger things automatically all the time.

What I can tell you is that with $ 1.7 billion, I am correcting a lot of the erosion that took place. You say it's still not enough. Well, we will continue to work as a government, and you as a committee please continue to insist that fighting child poverty is a good thing. But when you come and say the national child benefit is not a good thing because it's not indexed, I say that's another approach. I'm telling you that in three years we're putting $ 1.7 billion in, and that's a lot of money. I hope very much that we will be able to continue over the years to build on that. This is going to be year after year, and we will be continuing along that line. You're just choosing another method. As of now, I prefer the one of putting in these big amounts of money.

It is a major federal investment. As you know, there are the provincial investments as well that are there. You only talk about what the Government of Canada is doing. We and the provinces are assuming leadership. With that system we now have partners in that fight against child poverty. With the system that we have now, provinces are also putting more money in programs and services and reinvesting some of that money. I think that system creates a partnership in which we are more partners and more people thinking about it than just having an indexation of a system somewhere that nobody talks about in which the provincial partners would not have the same coherent approach to it.

We're doing a lot more for children in poor families. We have increased deductions for child care that we have brought forward. We have tax relief for low-income families as well. Over half of our youth programs are targeted towards youth at risk, who do come from those families and who have a much healthier climate and are encouraged by it. This is a whole global approach we're taking, which I think makes a lot of sense.

Ms. Libby Davies: Mr. Pettigrew, I think those are all measures your government has announced, and I don't know what other method you're suggesting I'm looking at. I'm looking at the figures that have come out that clearly show that there are serious flaws to the child tax benefit, in that it is not indexed and we will be losing ground. It does not apply to families on welfare, the poorest of the poor. I think the evidence is growing.

The House has certainly spoken that the government needs to review the level of indexation. Is the government saying that you will not review the level of indexation, you will not look at full indexation?

Mr. Pierre Pettigrew: What I'm saying is that where we pick up the situation, if you compare the situation in 1996 and 1997, with the levels of inflation of 1% and 2%.... We govern this country with a sense of responsibility financially, and because of the good work we've been doing inflation is at 1% or 2%. I'm saying that it is better to help kids by putting $ 1.7 billion in the child benefit. The indexation, even with the formula you're talking about, would not even have kicked in in the last few years, because inflation has been jugulated in this country. You're talking about the past years, in the mid-eighties. I'm talking about the nineties, in which there is no more inflation. So we're putting in real money.

The Chairman: Thank you, Mr. Minister.

I'll now go to Mr. MacKay.

Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC): Thank you, Mr. Chair.

Mr. Minister, I want to thank you for being here.

I want to ask you some questions, sir, about the transitional jobs fund, for which your department is responsible. Correct me if I'm wrong, but I understand the transitional jobs fund includes a fund of about $ 300 million that is to be allotted to areas deemed to be in need, particularly areas with high unemployment. I'd like to ask you some questions, sir, about the process.

• 1620

I understand that applications are received by your department and final approval is therefore made by your department, in conjunction with input from the provinces as well, before a final approval is made. When does that information become public? I assume that until approval is made, the information that has been received by your department is not public information.

Mr. Pierre Pettigrew: It depends on what you mean by public. The transitional job fund requires quite a bit of consultation. Because of the commitments we've made on the spending power, we consult the province to make sure it goes, but we also consult the opposition MPs. I hope it's not the situation in your riding, but the fund applies where there's over 12% unemployment, and I consult the opposition MPs as well. We very often consult people in the sectoral industries and a number of elements. It is information that does go to a number of actors.

Mr. Peter MacKay: I can assure you my riding is one of those affected, sadly.

Mr. Pierre Pettigrew: What I mean is I would then consult you, should there be one in your riding.

Mr. Peter MacKay: But as for the companies themselves that may be in receipt of the money, should the approval come, that information is not widely circulated. For example, if I, as the president of a company, made an application, I couldn't access lists of other companies who had also made applications for the same transitional job fund money.

Mr. Pierre Pettigrew: I wouldn't think so, but I know the information does circulate. In smaller places, I know when you make one, you can say it on a Saturday night dining with some people and it goes around. So, yes, sometimes people will tell us, well, this other person has applied for the transitional job fund, so is there still money for another one that I'm preparing?

Mr. Peter MacKay: So you're saying it's not officially released, but the word gets out.

Mr. Pierre Pettigrew: Yes.

Mr. Peter MacKay: Other companies might be able to access that.

Mr. Pierre Pettigrew: Yes.

Mr. Peter MacKay: Okay. Now, as part of the approval process, is it fair to say that someone from your department, HRDC, would be responsible for doing a background check to find out the legitimacy and the need and to see that the various criteria were met by various companies?

Mr. Pierre Pettigrew: Of course, that's the first step.

Mr. Peter MacKay: That would be done by your department?

Mr. Pierre Pettigrew: The first step is at the regional level. You go to the Human Resources Centre; you go to your first centre, and that's where you make your application. So it's the first check, if you want.

Mr. Peter MacKay: That would be done by your department, though?

Mr. Pierre Pettigrew: Yes.

Mr. Peter MacKay: Can you explain why it would be that this information would be in the hands of a staff person in a separate department, mainly the ministry of the President of the Treasury Board, why it would be that in his department he would have a staff person with a list of these companies that had applied for money from your department?

Mr. Pierre Pettigrew: I consult the leaders of every region in Canada. We have regional leaders, and I consult the leader. If I consult the Quebec government, which has Péquiste allegiance, we consult the leader, of course, to make sure that it goes with the general strategy of the government and general approach.

Mr. Peter MacKay: So a staff person in another ministry might be someone you would take into the loop and consult?

Mr. Pierre Pettigrew: It's part of the process of consultation. It goes to the leader.

Mr. Peter MacKay: Let me take this one step further. Why would this then be in the hands of a party worker? That's my next question.

I'm not asking your backbench support over here; I'm asking you, Mr. Minister, why those would be in the hands of a Liberal Party fund-raiser. Why would he have that confidential information about those companies prior to their approval, prior to the approval of the process you've described? Why would that happen?

Mr. Pierre Pettigrew: Don't ask me. Ask that minister. Why are you asking me? What I'm telling you is....

Mr. Peter MacKay: I'm the first one to acknowledge and I have acknowledged that you reported this incident, which was the proper thing to do, and I commend you for it.

Mr. Pierre Pettigrew: I reported it within hours after I heard about it.

Mr. Peter MacKay: I commend you for doing that.

Mr. Pierre Pettigrew: The RCMP has done an investigation at my request. I didn't ask; I reported the incident, and they made an investigation. They made one charge, and that charge was tried. As far as I'm concerned, it is closed.

• 1625

Mr. Peter MacKay: I know, the matter is closed. But Mr. Minister, let me ask you, based on what has happened and the trail that leads directly to your department, sir—directly to your department—do you really feel this information was used properly?

Mr. Pierre Pettigrew: I'll tell you one thing. When that incident happened at the beginning of March and when I reported it within hours after having found it out, I asked my deputy minister to make sure that the way we were using this information and the consultation process.... I asked him, “Is this the way we should be doing things? Would you please ask the ethics counsellor”—or whoever he talked to—“if I should make any change to the consultation process?” And I was told, “No, sir.” The way that—

Mr. Peter MacKay: The ethics commissioner was consulted on this exact case?

Mr. Pierre Pettigrew: Do you know who Mel consulted at that time?

Mr. Ian Green: I—

Mr. Peter MacKay: The ethics commissioner was consulted on this exact scenario?

Mr. Pierre Pettigrew: No, I'm sorry. I asked my deputy minister, “Could you make sure that the way the consultation process is functioning serves us correctly?”

Mr. Peter MacKay: I'm not asking about the consultation process; I'm asking you about the way this information was—

Mr. Pierre Pettigrew: I was told I did not need to make any change in the process. That's what I was told and advised.

Mr. Peter MacKay: Are you satisfied, Mr. Minister, that this use of information was properly handled by members of your staff and members of another minister's staff?

Mr. Pierre Pettigrew: The RCMP has done its investigation.

Mr. Peter MacKay: No, I'm not asking about—

Mr. Pierre Pettigrew: They made one charge.

Mr. Peter MacKay: There's one person charged.

Mr. Pierre Pettigrew: Listen, I'm not going to go any further into that. I've done exactly what we needed to do, and I'll tell you one thing, I'm not one who will go over what the RCMP has been doing. They've charged one person and—

Mr. Peter MacKay: So if the RCMP don't lay a charge, there's no accountability in your department. Is that what you're saying?

The Chairman: Thank you, Mr. MacKay.

Now Mrs. Bennett.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): The Speaker is very kind to you on this committee.

Mr. Peter MacKay: It's not up to the Speaker.

Mr. Larry McCormick: It's certainly up to the Speaker.

Mr. Peter MacKay: With all due respect, sir, my questions were not for you.

Mr. Larry McCormick: With all respect, I do respect the Speaker here.

Mr. Peter MacKay: They were not for you.

The Chairman: Okay, okay, okay.

Mr. Larry McCormick: Slander will get you everywhere.

Mr. Peter MacKay: Lay the charge. Lay the charge.

The Chairman: Mr. MacKay, thank you.

Mr. Peter MacKay: Thank you, Mr. Chair.

The Chairman: Now I believe Mrs. Bennett has the floor and I suspect she has a question.

Ms. Carolyn Bennett (St. Paul's, Lib.): I thank you, Mr. Minister, for coming. I have a couple of little questions.

One of my favourite topics is the welfare wall, and I know it's of interest to you, and that's really what the tax benefit was all about. I was just wondering if there are people in your department who have looked at working with the provinces.

At the pharmacare conference, we saw that one of the Australian models is to allow people to keep their drug card for a year after they come off welfare, particularly moms with kids and the people they really are interested in getting back into the workforce. They've seen that as very helpful in eliminating the deterrent to going back to work.

I'm just wondering if you would consider it. It's part of the whole health and welfare interdigitation and how we sometimes feel there can be a disconnect.

Mr. Pierre Pettigrew: One thing I like very much about our system that we are setting up right now is precisely that with many such ideas, such as this drug card that you carry on for a year, we have an accountability from all the provinces on how they're using their reinvestment, reallocating the funds of the savings they're making on our increased Canada child tax credit. Some of it is going to similar ideas.

Some provinces will decide to put it in provincial child care. Some other provinces will put it in optical services and dentist services for their children and all that. But they always have the same kind of pattern, and it is precisely to make sure that the level of services to children in low-income families doesn't go down too much.

In some of the provinces it is more related to the medical aspect of it. In other provinces it will be more in child care. But when you look at the complete situation of the country, you will find the different aspects.

• 1630

Ms. Carolyn Bennett: Mister Minister, my problem is I'm from Ontario—

Mr. Pierre Pettigrew: It's a big problem.

Ms. Carolyn Bennett: —and there are a number of programs where people feel at risk, particularly the persons with disabilities. I think there's a commitment from the government to work with the provinces on that issue, but as you may well be aware, there will be a huge protest at Queen's Park for the persons with disabilities this Saturday. I guess I am concerned that we do all we can as a federal government.

It says you cannot require the provinces to provide specific kinds of employability supports under the funding arrangements. I guess it comes to the whole issue of national standards. Is there anything more we could be doing to make sure this happens, even on the Canada study grants, where we can give up to $ 3,000 a year, but anything more than $ 500 they have to pay taxes on, which I understand they then can deduct as a medical expense. Somehow, when we give money and then take it away, it isn't quite as tidy as maybe something more direct.

Mr. Pierre Pettigrew: What we will be signing with a province like Ontario for disabled Canadians and the new employability program, for instance.... There is an accountability for the way we're doing things. Ontario is playing by the rules we've been negotiating, in a fair way. Madame Ecker has been quite involved in the disability file at the ministerial council and has really been cooperating fairly well on this issue. But if there's a specific problem, I don't mind looking into it with her when I next see her or talk to her.

Ms. Carolyn Bennett: I have one other little question around the EI account. It's something we've talked about as a committee a number of times. Is there anything that you think we could do proactively with the EI account for communities where it's quite clear that people will be unemployed? We could let them work part time and help pay for their training out of the EI account. We could have some preventive aspect in the sense that ultimately they wouldn't be employed—that that is somehow the purpose of the account.

Mr. Pierre Pettigrew: We already have big budgets in terms of training and in terms of active measures that are there for our clients. We have major programs precisely within.... The whole part two of EI is there to help unemployed Canadians precisely to get back to the labour market as soon as possible and with better training. That's why we have those active measures, and training as well.

Ms. Carolyn Bennett: If we are going to have people with four careers in their lifetime and they're going to have lifelong learning and at some point be between careers, is there any anticipatory thing we could do so that somebody could cut back to part time and be trained so that they could move without a period of unemployment in between?

Mr. Pierre Pettigrew: I see: to be working part time while at the same time investing in your education. I don't think the EI law would allow me to do that now.

Ms. Carolyn Bennett: We have RRSPs....

Mr. Pierre Pettigrew: Yes, and it's a budget measure that.... That's what we have right now, but not within the EI account.

Ms. Carolyn Bennett: Well, that's why we're here. We get to change the law.

The Chairman: Yes, we are.

Mr. Wilfert.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Mr. Minister, with regard to labour market programs, as you know, the underlying rational for the transfer of labour market programs to the provinces was to reduce the administration and duplication. The Ontario caucus has registered its concerns quite strongly with regard to any possible agreement with the province of Ontario, particularly as it relates to whether or not the necessary infrastructure in the province of Ontario is in place. Could you tell us, Mr. Minister, what is the status of the discussions regarding the agreement? Is co-management a possibility? Do you expect an agreement before the end of the year?

• 1635

Mr. Pierre Pettigrew: Well, I don't know. Every agreement is very different from one province to the other. Obviously the Ontario labour market is a very big one, and we want to make sure that Ontarians are as well served as possible.

We are doing these transfers of responsibility from the offer we made in May 1996. The government offered all provinces to transfer the responsibilities of labour market agreements to the provinces. We have now signed 11 such agreements. They're very different. Some are co-management and some are full devolution, and within each category you also have variances.

It is up to the province to decide what kind of agreement they want to sign with the Government of Canada. The offer of May 1996 puts it to them to decide what they want.

The Government of Ontario has signalled to me that they wanted a full devolution agreement. We are starting the discussions with them. We've been exchanging information to a large extent, but we have a certain number of conditions that are very clear. I explained that to Minister Johnson. What I have not been already in the position to negotiate with other provinces won't change all of a sudden.

For instance, I don't want the use of third parties to be very high. You need an infrastructure to deliver such important services. If it needs to be demonstrated that the infrastructure exists to receive these important elements—and I don't say third parties are not good partners; they're essential partners—it is important to demonstrate that you will be able to give as good or even better service to make sure that these active measures well serve Ontarians in all regions of the province.

Mr. Bryon Wilfert: Then given the situation with the 11 agreements—and we know there are a number of reasons why there has not been an agreement with the Province of Ontario yet—are you far down the road on that agreement? We're aware of the conditions, as you indicated, that the federal government has set. You mentioned two options. One was full devolution and the other was co-management. I think we've indicated as a caucus that we're certainly concerned about full devolution.

It would certainly be our view, I think, that it's very clear that they have to demonstrate the infrastructure is in place. Even at that, I think we're looking at several successful agreements you've reached with a co-management relationship. I think there are certainly benefits to both parties concerned. Again, we continue to flag that as an area of concern.

Mr. Pierre Pettigrew: We're in the very early days of negotiations with Ontario. The negotiations have just started. We are still at the very early days. How will they end? In none of the agreements I have actually done could I tell from the beginning how it would end. It's impossible to tell.

This is a very open and very transparent one, and caucus members will be kept well informed about how we proceed. I'm confident that we will make sure that Ontarians will continue to be well served.

Mr. Bryon Wilfert: You answered my third question. It was about keeping us informed. I thank you.

The Chairman: Thank you, Mr. Wilfert.

Over to you, Mr. McCormick.

Mr. Larry McCormick: Thank you very much, Mr. Chair.

Thank you to both ministers and officials for being here. It's good to see your response to our first report. I think there's a real use for a document like this, and I'd like to see a similar type of document on CPP in the future. There's been so much misinformation about it, as happens with probably any good work the government tries to do.

I want to mention my thoughts on the EI surplus, coming from the government side. My wish and my desire and the message I hear from small business people—that's my background—is that the EI premiums can be lowered at least at the same rate as the CPP increases. Of course, this possibly could be easy to do today but would a little harder to match in the future. I just wanted to say that.

There are a lot of unemployed entrepreneurs and rural small-town Canadians who are very resourceful. Our excellent programs and measures from HRD are available for people on unemployment. But these hard-working Canadians, who have made their own way, often would like to upgrade their skills, and we would like to encourage them. Yet under the current guidelines they're often denied access to our programs and services because they've never been on EI, or haven't been for a few years.

• 1640

This may be outside of what we should be looking at today, but I would like to take this opportunity to leave you with that. I think it's something we have to look at. Individuals have come up to me almost every week this year. They feel left out. They've tried to be very self-reliant in society. I think it's something we have to look at, and I wonder if you have any comments on that, Mr. Minister.

Mr. Pierre Pettigrew: On your first suggestion, we were pleased that this year we were able to match the CPP and the EI premiums.

The other part was...?

Mr. Larry McCormick: I just think the overall programs for unemployed Canadians.... We have many people who are not receiving EI who deserve to be able to tap into some of the programs that are available. I think we have to consider some way that these people can.... If they're not able to upgrade their skills when they want to, if they're not able to make use of these programs, they're going to end up being a liability to governments, and I just think we should acknowledge that.

Mr. Pierre Pettigrew: Yes, and we're doing our best. As you know, we have a much higher budget for youth at risk. Client eligibility has been enlarged in the last EI reforms, and the additional CRF money has been for youth, for the disabled, for aboriginals. There are many other people, whom you're talking about, who may sometimes fall between the cracks, and that is being looked after. We're trying to look in some other directions.

Mr. Larry McCormick: Could you comment on these labour market agreements for the provinces and the territories? As you mentioned, Mr. Minister, they're very diverse and very different, and they would have to be for all parts of Canada. I wonder with the differences involved, between all the provinces and our federal government, will this make a great difference to the national standards that Canadians want in so many roles in life, from trades to education to programs?

As we've had to make each program different with the provinces—the labour market agreements. You have different types of programs, different arrangements. Will this be taking away from moving towards national standards in the end?

Mr. Pierre Pettigrew: Actually, we really have high levels of accountability. What matters is the results. That is, within the new system, provinces have a margin of manoeuvrability as to what kind of balance they will strike with the different active measures we have there. But what matters are the results.

Every year there will be a report tabled in Parliament as to how these EI moneys, part II, have been spent and how quickly they have brought unemployed Canadians back to work. We will definitely be able to tell who's doing a better job in the end.

The labour markets are very different from one province to the other, so the balance might be different in eastern Canada and in Ontario or in Quebec, where the mobility is not as high, because of the language, for instance. You can't expect the same kind of mobility. What matters is that we serve all Canadians well, but it can be done differently from one province to the other, because the labour markets are different.

Mr. Larry McCormick: Thank you very much, Mr. Minister.

The Chairman: Thank you, Mr. McCormick.

I will now go to Madame Bradshaw.

Mrs. Claudette Bradshaw (Moncton, Lib.): Monsieur le ministre, I would question you on the child tax credit, but we've had many discussions on the child tax credit, as you know. So I'm going to ask a question of Ethel. We need to get her to work too.

We've had many discussions on children in poverty and working poor families, but, Secretary of State, the other area I've worked with and am concerned about is our aboriginal children and our aboriginal families. I was wondering what tools you have put in place, because we're looking at self-sufficiency, at self-government. I was wondering how the regional bilateral agreement was going to meet the employment needs of the aboriginal Canadian. That's the first question.

• 1645

Secondly, we speak of children at risk and we speak of youth at risk, and studies have shown us that both very often are victims of fetal alcohol syndrome and fetal alcohol effect. We don't often speak of this. I wonder if your good office has any information on that and whether we're heading toward working with children and youth at risk to meet their needs, especially the ones with FAS and FAE.

Ms. Ethel Blondin-Andrew: Thank you very much, Mrs. Bradshaw.

On the regional bilateral agreements, it is proven that there are results in terms of employment. We have figures to the effect that 13,000 people will be integrated into the workplace in terms of self-employment, and 26,000 will have some labour market attachment in the aboriginal community. There will be savings that will accrue in terms of social assistance and unemployment insurance, all because of the work that's happening.

The magic of the regional bilateral agreements is that not only did we take a program that was sunsetting and enhance it and extend it for an additional three years, but we now have another generation of aboriginal human resource development commitments in terms of human resource development training and other strategies. We're supposedly going to enhance resources and the support that's needed. In addition to that, we're going to accompany that with the aboriginal human resource sector council. It's the first time in the history of a government that there has been a sector council allocated or secured for meeting the purposes of a said group of people because there is such a need there that has to be addressed.

We have identified with the private sector a number of champions, for instance Syncrude Alberta and the Bank of Montreal. There is a whole cadre of champions that are there that are going to try to help integrate aboriginal people into the mainstream economy in terms of employment and training.

As for children, I think we could go on about the benefits of this, but the material is available and I think the members can read that for themselves and we can provide that to them.

Good things are happening. The commitment is solid. That goes for a five-year period. The royal commission wanted a ten-year training commitment, but it's very unusual for governments to go beyond their mandate. I think that five years is stretching it, and that's a good time to be able to look back, monitor and review the results that are already evident.

In terms of children, I think you raise a very good point. Fetal alcohol effect and fetal alcohol syndrome are not just endemic to aboriginal populations; it's a national problem. There is much good work that is occurring. In fact, among other members as well, the member herself has been very prominent in her commitment and dedication to that work. Across Canada there are groups who have undertaken projects to identify these children. There has been work that speaks to the fact that this is directly related to the young offender problem, the high rate of incarceration, the increased use of violence in crimes that are perpetrated by children, erratic behaviour related to criminal activity or association with criminal activity of young people.

I think we need to look at every possibility. If we are building a national children's agenda, perhaps there's an opportunity there. If we are going to look at the Young Offenders Act, perhaps there is an opportunity, in terms of looking at the root causes, for us to undertake a process that's national, strategic, comprehensive, and speaks to how we can deal with this really serious problem. In order to do that, of course the whole issue of resources must be addressed. I think it should be something that not only individuals but collective governments can be committed to at all levels.

Mrs. Claudette Bradshaw: Thank you.

The Chairman: Mrs. Ablonczy.

Mrs. Diane Ablonczy: Mr. Minister, with respect to Y2K, as you're aware, the consequences of failure to be ready for this event will be catastrophic to a number of Canadians: 1.8 million receive EI cheques; 4.6 million receive CPP and OAS cheques. That's over six million cheques a month that Canadians receive.

• 1650

The Braiter-Westcott report on the year 2000 readiness—this was to the Treasury Board in February 1998—says that old age security and Canada Pension Plan cheques would not be produced and employment insurance cheques would not be issued.

Although the deputy minister promised that HRD would be on-line for the year 2000 by January 1999, we've received an internal review of year 2000 readiness, dated February 1998, which says “It is too early to tell if target dates have been met”. That's on page 17 of the report.

My first question is a simple one. Will HRDC systems will be fully on-line for the year 2000 problem?

Mr. Pierre Pettigrew: We're working very hard on this particular problem because we're well aware of our responsibilities towards seniors and towards all of our clients. We have eight million clients in Canada, so it's very important that we do that job. We've been investing a lot of money and a lot of resources into really meeting the challenge of year 2000.

As you're interested in this very important question, may I ask Hy Braiter to give you a little update on it? Hy Braiter will join us at the table and will be able to give you more, technically, on what I've been doing and where we are up to now. But we're very confident that we will be able to meet the challenges, even a year ahead of time so all the systems would be on.

Mrs. Diane Ablonczy: Yes, thank you. It would be helpful to hear from Mr. Braiter.

Mr. Hy Braiter (Senior Assistant Deputy Minister, Service Delivery, Human Resources Development Canada): As you've probably gathered by now, I'm sort of wearing two hats. One, as you mentioned, is the Braiter-Westcott report; I was the co-author of that for the Government of Canada. My other hat is to be the senior ADM of service delivery for HRD, so I'll speak to HRD for starters.

Six months ago we declared the year 2000 as being the highest priority for our systems people. We suspended activity on all other systems development, except for continuing to maintain those systems that have to pay people and that are in operation, and except for those systems initiatives that have to implement new legislation or announcements by the government that have been made up until now.

We have almost three-quarters of all our systems people working on the year 2000 issue. In fact, I looked at a report—we have reports every two weeks, which I think we could supply to the committee, if you'd like—and as of right now, all of our mission-critical systems are on schedule for January 1999. That includes all testing and declaring them operational and putting them into our regional computer centres as operational systems. That gives us a whole year as a buffer in case we miss something.

So we're quite confident that in HRD we will be ready with all our mission-critical systems, and we're monitoring very, very carefully. We plan to spend over $ 175 million within the department on that problem.

So far, so good, I can tell you. And like I said, we're watching it extremely closely. We're very, very concerned, as everybody is. But I think the year's buffer we've given ourselves, aiming to do it a year early, is the right and prudent thing to do.

Mrs. Diane Ablonczy: To quote from your—

The Vice-Chair (Ms. Bonnie Brown (Oakville, Lib.)): I think you're about three minutes over now with this explanation, so we'll have to move on to Mr. Crête. Maybe Mr. Crête would like to pick up this line of questioning.

[Translation]

Mr. Paul Crête: I have two quick questions. I associate in anger with the poor who have been swindled. The employment insurance system provides of 40%. For the recipient, it is not enough. What steps are you considering to bring that rate to an acceptable level?

My second question deals with the Millennium Scholarships. Do you find it reasonable that for the whole of Canada there would be a foundation managing $ 2.5 billion in public money without any government control whatsoever during the next few years? Do you find it acceptable that the foundation would judge students on merit and needs?

• 1655

Mr. Pierre Pettigrew: I find it totally acceptable that the government is investing 2.5 billion dollars in this fund. In fact, I hope this Fund will be managing much more money than that through a partnership with the private sector. This is why it is important not to penalize Quebec students since the fund will be able to increase the number of grants it will be giving out if the private sector is generous.

Mr. Paul Crête: You find it normal that the Fund will not be accountable to anyone?

Mr. Pierre Pettigrew: It will be accountable to someone. It will have to submit financial statements each year. Some information will also be public.

Mr. Paul Crête: Canadian taxpayers' associations have expressed the concern that the bill as drafted does not include any control mechanism.

Mr. Pierre Pettigrew: I know some people would like everything to be controlled. They mistrust everyone. Maybe they could benefit from a change in attitude. The Fund will give better access to learning and skills to 100,000 students each year. I believe it will be playing a very useful role that way and I hope it will be able to help even more students by getting the private sector to contribute some money.

As far as participation in the employment insurance system is concerned, I must say that the present situation concerns us. It greatly concerns us because when I became Minister of Human Resources Development, I was told: "Once the reform is well established, the enrolment of unemployed workers will increase."

That is why I've asked my officials to find out why the participation rate in the unemployment insurance system has decreased so much. You are asking me what measures we will be taking. As soon as we understand the reason of this decrease, we will be taking the appropriate measures but we will not go back to the old incentives which were causing too many people to depend on the system. We wanted to eliminate those incentives which were having a detrimental effect on the Canadian economy. We will not be reestablishing...

Mr. Paul Crête: But the new system has sent...

Mr. Pierre Pettigrew: Those people are not on welfare. Just a minute. There are fewer welfare recipients today than there were five years ago, a lot less. That means the economy is doing well.

Mr. Paul Crête: But the impact of the reform...

Mr. Pierre Pettigrew: So you're telling me there are fewer welfare recipients which means the economy is doing well.

Ms. Christiane Gagnon (Québec, BQ): The economy is doing well but there are more and more poor people in Canada.

Mr. Pierre Pettigrew: In that case, why are you telling me there are fewer welfare recipients?

Mr. Paul Crête: We're talking about the impact of the reform and the fact that some people have been pushed onto welfare. The economy might be doing well but the reform has meant that some people are now on welfare.

Mr. Pierre Pettigrew: Let's be serious. You are always saying that there has never been such poverty and that things have never been so bad. You say the situation is terrible and that people have never been worse off. I'm telling you there are fewer welfare recipients today than there ever were before and you reply that there would be even less if some people could still get employment insurance benefits.

That means there would be even fewer welfare recipients. If there were even fewer welfare recipients than there are now, that would mean that the economy is not doing so badly. And if the economy is doing well, it is because interest rates have decreased, inflation is under control and because things have turned around. You must judge a government on its economic and social policies on the whole because they are all interdependent.

Mr. Paul Crête: It can also be judged on the way it redistributes wealth and that is not something your government is doing now. The wealth which is being created must be correctly distributed which is not the case now.

Mr. Pierre Pettigrew: That concerns me. I noticed that one of your colleagues left the House with his seat to force a debate on globalization and the gap between rich people and poor people. I would like to ask you questions on that subject in the House. It is a very important subject. When the member came back to the House, he was given the right to submit an opposition motion. That's good.

I do believe that the gap between the rich and the poor is an important matter. We have to determine if some people are getting richer while others are getting poorer or if in fact poor people are simply relatively less rich than rich people although their financial situation is better than the year before. There's a difference between the two. Do you understand my point?

Mr. Paul Crête: Yes, yes. Let's go and see those people.

• 1700

Mr. Pierre Pettigrew: That's right. It's important that we really debate the real issues. I find some real progress is being made. We won't be able to solve all the problems in one year, but I believe we are on the right track.

[English]

The Chairman: Thank you.

I'm going to permit Madame Gagnon to pose a—

[Translation]

Ms. Christiane Gagnon: Do you know, for example, that the child tax credit and the personal income tax brackets haven't been indexed? Have you studied the matter to see who the people who are most affected by this are? Is it low income people or high income people?

Mr. Pierre Pettigrew: You're talking about a comparison between the two? I don't know.

Ms. Christiane Gagnon: I had a study done on the matter. It is the low income people, those who earn between $ 25,000 and $ 30,000 a year, who are the most affected by the non-indexation of tax brackets.

Mr. Pierre Pettigrew: On personal income.

Ms. Christiane Gagnon: On personal income and on the child tax benefit. It is being said that 50,000 children do not receive this benefit and that there are 840,000 low income families.

Mr. Pierre Pettigrew: Families that are just above the cut-off line.

Ms. Christiane Gagnon: That also is part of a study on the gap between rich and poor.

Mr. Pierre Pettigrew: Absolutely.

Ms. Christiane Gagnon: The impact of this measure is greater on low income families. That's what we told you. We're not telling you that the economy is doing so badly. We are telling you that this measure affects mainly low income families. We are very concerned about that. I asked the research branch to do this study and the study reveals that those who are the most affected by the non-indexation of personal income tax brackets which haven't been indexed in a very long time and by the GST are low income families that earn between $ 25,000 and $ 32,000 a year.

Mr. Pierre Pettigrew: Very well. I would like you to share that information with me. We will study it. This is a debate which will continue because we still have decisions to make. There will be a budget next year and there will be other budgets as well. As you well know, some of the matters you are raising are not in my purview. I cannot speculate on the indexation of...

Ms. Christiane Gagnon: The child tax benefit at least should be indexed.

[English]

The Chairman: Thank you, Madame Gagnon. Ms. Davies.

Ms. Libby Davies: I'm just following up on the last question. Some people may be doing better or may be better off, but there are a lot of Canadians who are worse off. The fact is that inequality is growing and poverty is deepening.

The specific question I want to address to the minister concerns students, because there's been a lot of concern about increasing student debt. One of the changes that's being put forward to the Canada Student Financial Assistance Act would be to amend the act to provide authority to prescribe the circumstances in which a loan or certificate of eligibility may be denied.

As far as I'm aware, this is a very new development. There's a lot of concern about it first in terms of how this will be done through an order in council and then that it won't be a transparent or open process. So I'd like to ask you if you would tell us about the circumstances in which a loan or a certificate of eligibility could be denied to a student who is seeking a student loan. What process will your department go through to establish that? Will there be involvement and discussion with student organizations, universities, colleges, and financial assistance organizations, who are very concerned about this in terms of the changing eligibility?

Mr. Pierre Pettigrew: If you don't mind, I'll ask the assistant deputy minister for loans to give you this, because it's pretty technical.

The Chairman: Would you give your name before you start?

Ms. Martha Nixon (Associate Executive Head, Human Resources Investment Branch, Department of Human Resources Development): My name is Martha Nixon.

The Chairman: Thank you, Martha.

Ms. Martha Nixon: Ms. Davies, I think the question, if I understood it, was that you're asking about new conditions that you feel have been introduced that will prevent people from accessing loans.

Ms. Libby Davies: It's in part 10 of Bill C-36, where it talks about amendments to the Canada Student Financial Assistance Act.

Ms. Martha Nixon: I think what you're referring to is the fact that we are trying to deal with the situation of rising bankruptcies among students. We had previously entertained a change in the Bankruptcy and Insolvency Act that would allow students not to have bankruptcy proceedings proceed up to two years after the loan had been put into repayment. This was because we felt we had enough assistance available in terms of the interest relief provisions.

• 1705

We have now extended that, because we consider that we have also extended the assistance available to students, so that would take them to a longer period during which bankruptcy would be impossible for students to pursue.

As well, in terms of denying them a loan, in fact, the denial of a loan would occur only in circumstances where there is a history of bankruptcy or where there is a credit problem that makes them a much more serious risk in terms of repayment.

Ms. Libby Davies: To follow up on this, I think there's a lot of concern about this. On the one hand, the government is saying it wants to make sure education is accessible, and on the other hand, we now see these changes taking place whereby for example a single mom who has maybe been on assistance or who maybe has had some difficulty with her credit rating in the past now comes forward, wants to go back to school, tries to get a loan and finds out that she's being denied.

I think it's really important that we understand specifically what the criteria or circumstances will be for denial of a Canada student loan, because to say “some past history or a credit problem” means that there could be thousands of students who would now be ineligible for assistance. I have a real problem with that.

Ms. Martha Nixon: We've been working on the assumption that the purpose here is not in fact to deny someone access to student status or to a loan in order to pursue an education; rather, it is to try to deal with the situation. There have been occasions when students take on debt in addition to the debt they might already have, or where in fact they are accruing debt in an irresponsible way. We feel we need to have an accountability there.

Our intention, however, is that there would have to be three incidents of non-payment in order to have them disqualified. So the conditions are really quite serious and I think would not be the circumstances that you described in terms of the single mom with perhaps one history of a credit problem.

Ms. Libby Davies: Mr. Chairperson, is it possible for the committee to get the information in terms of what the actual criteria are?

Ms. Martha Nixon: Yes, certainly.

The Chairman: Yes, but as always, Ms. Nixon, could you make that information available through the minister's office to the clerk of the committee?

Ms. Martha Nixon: Absolutely.

The Chairman: And then we'll distribute it to members.

Ms. Libby Davies: Thank you.

The Chairman: Thank you very much, Ms. Davies.

Mr. MacKay.

Mr. Peter MacKay: Thank you, Mr. Chair.

Mr. Minister, I want to ask you some questions about accountability, transparency and openness, because these are words that we've heard a lot today and we've heard a lot from your government. I want to give you a factual scenario.

On February 20, 1997, one month prior to the approval from the minister in Quebec, the manpower minister, the Raglan company received a visit from a convicted influence peddler, a Liberal fund-raiser by the name of Pierre Corbeil. Mr. Corbeil was convicted for improperly soliciting funds. He arrived at that company's doorstep armed with government information about grants that were pending, and the phraseology he used, which came out in court, was that they were on the minister's desk and he was there to get money for the party.

How can contracts be awarded based on merit when this type of information is being misused in a criminal way?

And with that as a background, I ask you three questions. How did this information get from your department to another ministry and into the hands of a Liberal Party worker? Secondly, after—

Ms. Bonnie Brown: Mr. Chairman, on a point of order—

Mr. Peter MacKay: If I could just continue—

The Chairman: I have a point of order.

Yes, Ms. Brown.

Mr. Larry McCormick: On a point of order, Mr. Chair, I think this was covered in the House previously and I think it's out of order for the time being for this committee when we're looking at the main estimates and have the minister here.

The Chairman: Thank you, Mr. McCormick.

Do you want to speak to that, Ms. Brown?

Ms. Bonnie Brown: Yes, I would like to. My point of order is that this meeting is convened to discuss the estimates, which are essentially to look forward, to talk about what the plans are. This line of questioning.... We were fairly indulgent with Mr. MacKay earlier, but in actual fact he is going way into the past and it has nothing to do with the estimates for this year.

The Chairman: Thank you, Ms. Brown.

Mr. Peter MacKay: May I just respond to that?

The Chairman: Mr. MacKay.

Mr. Peter MacKay: Actually it has everything to do with the future use of transitional job funds. It has to do with the way that money is used, the way it is handed out and given out by government, and I see the question as being perfectly—

The Chairman: Thank you, Mr. MacKay.

Madam Ablonczy, did you wish to comment on this?

Mrs. Diane Ablonczy: Yes, Mr. Chairman. My understanding is that under the standing orders there is no restriction on the kinds of questions that can be asked of a minister when he or she is appearing before a committee.

• 1710

The Chairman: Thank you.

It is true; the discussion on estimates review is wide-ranging, and it is open to members to ask such questions as are parliamentary. I certainly heard the member acknowledge that this minister had acted properly and promptly on the issue in question, and I heard the minister indicate that the matter had been dealt with by the RCMP. So I will allow the....

Did the member pose his question?

Mr. Peter MacKay: I haven't finished my question, Mr. Chair.

The Chairman: Then I would encourage you to finish your question.

Mr. Peter MacKay: Thank you.

The three questions I have, based on the background I gave you, sir, are as follows.

How did the information get from your department to another ministry into the hands of a party worker? Has there been any investigation done into that?

Can you tell us, after you called the RCMP—which I've acknowledged was the proper thing to do, by all means—was there any further follow-up? Was there any internal investigation done? Was there ever reference to the ethics commissioner?

And finally, it's been seven months since this happened. What assurances do we have that this type of misuse of government information isn't going to occur again?

I keep in mind your comment that there has been a criminal charge and an investigation was completed. One person was implicated in this. That doesn't mean nobody else had anything to do with this and it doesn't mean something wrong didn't occur. Mr. Corbeil couldn't have done what he did unless the information came from your department.

The Chairman: Mr. MacKay, I would caution you not to stray into accusing other people. You've raised a question; the minister has responded. We'll give him an opportunity, if he'd like, to expand on his response—

Mr. Peter MacKay: Thank you.

The Chairman: —but I'm also reminded that this question has already been asked and answered.

Mr. Pierre Pettigrew: Yes, and I've been very, very transparent. I answered that in the House time and again in October.

Let's come back to the facts. Very clearly we had a consultation system in place, which I have discussed in the House time and again, and we've even issued it in a press release. When I learned of the incident you're referring to.... It took place on February 20. I learned about it—I don't recall the date; I think it was March 5 or March 6, in early March. I heard about it walking out of Question Period at 3.15 p.m. I asked the police that night to look into that incident. They did not ever come back to me. The police don't come back to the person who complains.

The RCMP did its job. I asked my department to be very open with the RCMP, and they were. I asked my department to review the consultation process. I said it was with the ethics counsellor. I might be wrong. I think it was with legal counsel in my department. I just want to correct that.

We had the whole consultation process reviewed. Within a day or two, I asked that. The department reviewed it, and they did not feel changes should be made. The RCMP conducted its investigation. I suspect they looked into all of the issues you raised. They charged one individual. As far as I'm concerned, there's nothing to add.

The Chairman: Thank you, Mr. Minister, and thank you, Mr. MacKay.

Madame Brown.

Ms. Bonnie Brown: Thank you, Mr. Chairman.

I'm going to play Will Rogers today and say I only know what I read in the paper.

I have two major points. The first point, Minister, is so many of the questions today have revolved around and have actually illustrated the problems of trying to deal with the provinces and coming up with collegial plans. I think all ministers are experiencing those same problems. But I wanted to compliment you, because I did read in the paper, after I think your first meeting when you took office, that one of the provincial ministers came out and just blurted to the reporter, “This is the best federal-provincial meeting that has ever happened.” So I know it's a tricky thing, but I think you're doing a really good job of engaging your colleagues in the provinces, and there seems to be a nice feeling after you've met with them.

The second thing is something I read in the paper this morning that was pretty disturbing. It was in the Globe and Mail, and I didn't bring a copy, but it was something like “How long are Canadians expected to pay?” It was about the TAGS issue in this post-TAGS world, and it left me with some questions.

The Auditor General had commented on some of these things. He said the people who were going to be affected by TAGS somehow or other didn't realize, weren't made to realize, didn't understand the situation they were actually facing. So that was one thing that went wrong.

• 1715

Another thing was that we predicted an abandonment rate annually of 10%, and at the end of the TAGS program we've so far only had one-half of 1% of the recipients abandon the program or go out by attrition.

Then there was a policy at first of mandatory active participation, which was slowly but surely dropped as it became apparent that there were certain areas where you couldn't get participation. There was nothing for these people to do.

Now, the article this morning particularly honed in on isolated coastal communities, where there's never going to be any economic activity unless the fish come back. And I've heard you say the fish aren't coming back. Just like the Russians aren't coming, the fish aren't coming.

I'm wondering, are we considering buying people out? I guess it's to an official minister who was here at the time. What have we learned from TAGS about dealing with the population of fishers who can no longer fish, bearing in mind some of these faults that were pointed out in the article?

Mr. Pierre Pettigrew: We have learned a lot. As you know, Bonnie, it was a crisis situation at the end of 1993. It was a crisis situation because the fish had been abused in a way, or whatever happened. I don't know; I'm not a scientist. The situation was just extremely difficult—a big hardship for 40,000 Canadians in Atlantic Canada.

We intervened as quickly as we could and we did put up that $ 1.9 billion program. Yes, we learned a number of things. It's easy five years after, when everything is relaxed. People were starving, people were in trouble. It was a shock that they could not live the way they had been living for 500 years—that is, fishing and earning a decent living and raising their families. These are very decent people. These are nice Canadians who have had their way of life for a number of years. It's important that we remind some of our friends in the press and others who now all of a sudden like to pass judgment that we should not be judgmental in this. We did our best to help Canadians who were in need at that particular time.

Now, we do realize that there has been more income than training and elements like that. We all learned from the evaluation report. It was a very good one, done by my own department and released not too long ago. We are going to use the lessons we learned very, very well. This is why my colleagues and I are working very hard right now at bringing in the right balance between the Department of Fisheries, between myself and the other interveners in the Government of Canada so that we really do the right thing post-TAGS.

Yes, unfortunately there are still no fish, or not enough fish. We have to learn in Atlantic Canada to live with a very reduced fishery. Unfortunately, that is the situation for the time being. I don't know the future, but we have to be aware that it will be the situation for a while to come.

Thank you very much.

Ms. Bonnie Brown: Thank you.

The Chairman: Mr. Minister, just for the information of members, it is only a 15-minute bell, so we should probably recess at this point.

Mr. Minister, Ethel, thank you very much. I appreciate you taking the time to spend the afternoon with us.

We are adjourned until Thursday morning at 11 o'clock.