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, November 4, 1997

• 0905

[English]

The Chairman (Mr. Reg Alcock (Winnipeg South, Lib.): Order, please.

Mr. Desautels, can we ask for your patience for just one minute?

We had a steering committee meeting prior to the holding of this meeting at which we discussed a motion that would replace the motion on the management of motions in the committee. At the request of some members, the 48-hour notice, which is therein contained, was changed to a 24-hour notice. It was agreed unanimously at the steering committee meeting that we would pass this motion to replace the earlier motion.

Is that correct?

Ms. Brown, can you move that motion?

Ms. Bonnie Brown (Oakville, Lib.): I'm not willing To move that motion, Mr. Chair, because at the end of the steering committee meeting you reported that we were going to vote on it at the end of this meeting.

The Chairman: Would you indulge me on this, please, Ms. Brown?

Ms. Bonnie Brown: Okay. I so move.

The Chairman: Thank you.

Mr. Crête, would you second the motion? No?

The Clerk of the Committee: You don't need a seconder.

The Chairman: Oh, I don't need a seconder.

(Motion agreed to)

The Chairman: Thank you. That's all I wanted. The motion is passed. The rules of this committee are now complete and we can move on gloriously into the future.

Ms. Brown, I apologize for not alerting you to that. I had the discussion with this side of the table and neglected that side of the table. I'm sorry.

That's right, it's just like they accuse the government of doing to backbenchers.

Welcome, Mr. Desautels. The members of the committee are looking forward to your presentation, as we always do. I have seen you in front of several committees. They are always informative presentations. I'll let you begin. I know there will be many questions from the committee.

Mr. L. Denis Desautels (Auditor General of Canada): Thank you very much, Mr. Chairman. Thank you for providing us with this opportunity to present our audits of the results-based management and the Atlantic groundfish strategy at Human Resources Development Canada, as well as our review of reporting performance in the expenditure management system.

I am accompanied today by David Rattray, assistant auditor general, and Louis Lalonde, the principal responsible for most of that work. Also in the room with us is Mr. John Main, in case the committee would like to get into more details of the expenditure management system, which is more what you will find in chapters 5 and 11 of our report.

According to recent polls, Mr. Chairman, Canadians indicate that they want to see public servants place more emphasis on the results to be achieved rather than on the means of achieving them. At the same time, the government is looking for ways to reduce the deficit or control the debt or better inform Parliament and Canadians of program results. In short, results-based management is called for and the government is now seeking ways to strengthen the ability of departments and agencies to manage with a view to obtaining results.

This focus on results is something that we've been advocating and is at the heart of the revised expenditure management system and the accompanying changes being made in reporting to Parliament. In chapter 5, we report that we are encouraged by the development of the fall departmental performance reports. These reports, backed up in some cases by more detailed information and reports such as the one we recommend on the employment insurance program, should provide a better basis for committees to scrutinize and challenge government plans and accomplishments.

• 0910

[Translation]

We see a need for strong leadership from both the Treasury Board Secretariat and senior departmental officials. At Human Resources Development Canada, the support given by senior managers provides a good example to other departments. Parliamentary committees like yours can plan a key role in focusing attention on the results the department is achieving.

Human Resources Development Canada is a key player in the federal government, with $56 billion in expenditures in 1996-1997 and some 7 million clients in Canada. It is therefore vital that a department of this size manage according to results if the initiative is to be successful throughout the government.

In making a critical transition toward results-based management, the department took up a sizeable challenge, which requires changing the management philosophy in a highly decentralized organization. The benefits the department hopes to gain include improved service quality, resolution of issues involving resources levels, rapid detection of system deficiencies, recognition and reward of achievements, and the opportunity for the minister to report to Parliament on program efficiency.

Senior management, which is actively involved in this initiative, first clearly identified the transition that it wanted to make. It consulted staff and instituted a system for measuring results. Three key measures of performance were selected for each sector of activity. These will be used for reporting on results to senior management and to Parliament.

Secondary performance measures are also used to facilitate the monitoring by management of specific activities. The department has extended the application of these measures to activities carried out jointly with its partners. For example, the new labour market development agreements generally include the elements that are essential to good accountability between partners, and ultimately to Parliament.

[English]

Our audit showed, however, that certain steps remain to be taken to complete this transition.

First, a balance must be struck among the indicators. The key indicators do not take cost and efficiency into account, only the secondary ones do. However, the latter are not at this point reported to Parliament.

Costs and results are closely related. For example, it is important to know the impact of service quality improvements on costs. We have therefore recommended that the selection of key indicators take cost into account in order to provide parliamentarians with an overall picture of the results achieved. The department should continue its efforts to present results achieved in relation to the stated objectives by key performance indicator.

Moreover, we noted that performance information on the employment insurance account is diffused. It is difficult to identify the results achieved in relation to the stated objectives, budget and activity plan. We believe that, given the special nature and importance of the employment insurance account, a distinct report is warranted.

The commission has not yet decided on a reasonable reserve and the time required to establish it in order to ensure that contributions are adequate and that rates are relatively stable during an economic cycle. We have therefore recommended that the department table in Parliament the actual analyses that are used for establishing employment insurance premium rates, including the size of an adequate reserve and the time required to achieve it. Such a practice would make the establishment of premium rates for employment insurance more transparent, and we note that the actual reports on the Canada Pension Plan are tabled in Parliament by the Minister of Finance.

[Translation]

We also examined the management of accounts receivable, one of the government's largest portfolios. Accounts receivable, mainly from student loans, employment insurance and income security programs, represent $2.6 billion. The quality of the portfolio has deteriorated over the last five years. This is due, among other things, to the aging of the accounts. We recommend that the department conduct an in-depth analysis of the factors affecting the cost-effectiveness of collection activities and take the necessary corrective action.

• 0915

I will now turn to chapter 16, Human Resources Development Canada and The Atlantic Groundfish Strategy. This chapter was the subject of a hearing before the Standing Committee on Fisheries and Oceans at which the Department informed the committee that a program evaluation would be available in February 1998. We noted serious problems with this strategy which has cost several billion dollars.

First of all, the timetable for implementing an initiative as important as the strategy was unrealistic. Secondly, forecasts of the number of participants were low because of the lack of an adequate analysis.

Our observations underline the importance of giving due diligence to the planning of such interventions, in order to achieve the anticipated results without exceeding the resources the government can devote to it.

[English]

Mr. Chairman, you will soon receive the first performance report on this department. I think the committee can play an important role by reviewing and commenting on the department's performance information, including their costs. The committee may also wish to ask the department to produce a distinct report providing complete and relevant information on the major employment insurance activities.

In conclusion, Mr. Chairman, we would like to thank you for providing us with an opportunity to present our findings. We will be happy to answer any questions that you or the members of the committee may have. Thank you.

The Chairman: Thank you, Mr. Desautels.

Mr. Anders.

Mr. Rob Anders (Calgary West, Ref.): I actually had an opportunity to travel out to Newfoundland to examine the close-up situation in terms of TAGS. One of the things that boggled my imagination is that the numbers between the Department of Fisheries and Oceans and Department of Human Resources Development were severely out of whack. From what I remember correctly, DFO was anticipating that there would have been a much larger segment of people qualifying for the TAGS programs, whereas HRD numbers were insufficient. As a result, instead of 26,000 qualifying, 52,000 applied and 40,000 were eligible, I believe, if the numbers are correct.

I'm wondering if you can comment on that and what you think the problem was there and what could be done to rectify that, or who was responsible, etc.

Mr. Denis Desautels: I will ask Mr. Rattray to respond.

Mr. David Rattray (Assistant Auditor General of Canada): That, Mr. Chairman, is one of the observations that we in fact made in our report. We said that the co-ordination between those two organizations had not been adequate in terms of identifying the base level of numbers of eligible participants to the TAGS programs, and I think it is reflective of the comment we made that the rapidity with which the program was launched did not provide adequate time for those two departments to reconcile the differences between their base numbers. HRDC was working with a set of numbers dealing with the income support provided and Fisheries and Oceans were responsible for another set of numbers that they manage day-to-day in terms of the fishers and the plant workers.

So your observation is quite accurate, and we point out in our chapter that one of the major reasons why the take-up rate was so much higher was the difference in the numbers predicted by HRDC and the numbers projected by Fisheries and Oceans. Therefore, there is a need, as we point out, to have two organizations come together at an earlier planning stage for such a program to reconcile the numbers and therefore tie in the total expenditures that are required to support such an effort. But that is what we observed as well.

Mr. Rob Anders: Are you satisfied at this point that, for example, with this review that is being done by Eugene Harrigan, the departments will be able to get this straight? Are they addressing these problems?

Mr. David Rattray: Following our report and the three chapters on TAGS that we have, it's certainly been brought to their attention by us that it's a serious shortcoming in the front end of this program, so I would expect that both departments are talking in terms of reconciling the numbers.

As for Mr. Harrigan's review, which I believe is expected to finish by December, I would expect he is taking into consideration certainly the three report chapters that we have. This is one of the major issues we pointed out. So I would hope that his recommendations will certainly focus on the need to reconcile the two departmental numbers, should any program of this nature be considered in future.

• 0920

Mr. Rob Anders: I am also wondering what factors accounted for the lower than expected attrition rate. I am wondering what you think of the logic in terms of the training received by participants in TAGS not preparing these people to leave the Atlantic groundfishery and causing them to remain dependent on the TAGS program for income and support. Very few of the licences were retired, very few people left the program, and I am wondering what changes you think need to be made to the program, if you have any recommendations to change that attrition rate and to increase it.

Mr. Louis Lalonde (Principal, Audit Operations, Office of the Auditor General of Canada): As we are not certain what program will come ahead in the future, we recommended to be consistent in all regions on the eligibility side of it.

One point we noted in the report is that the eligibility rules were quite relaxed and included especially the workers in fish plants that had at least 25% of their landed value in groundfish. Once you start with that, you open the door to include a lot of people.

On the rate that you mentioned before, the abandonment rate, this is all tied up to the efforts to reduce the capacity of the industry, which we report in chapters 14, 15 and 16 was not attained at all. In fact, the strategy was changed, about six months after it was started, to an income support strategy.

Mr. David Rattray: I think that the eligibility criteria for full participation in the program are absolutely critical, and the eligibility for continued licensing or buy-outs on licences are the two factors that would help mitigate any future scenario.

The Chairman: I will come back to you in the second round.

Mrs. Chamberlain.

Mrs. Brenda Chamberlain (Guelph—Wellington, Lib.): I would like to ask about your comments on the EI account. Do we know exactly how many dollars go into that, and then what is broken out of it for retraining purposes? Do we already know that?

Mr. Denis Desautels: There is an annual financial report prepared on the EI account, which actually lays out everything that is collected and everything that is paid out by major categories. So that information, if that is what you are asking for, is available in an annual report on the EI account.

Mrs. Brenda Chamberlain: You made a brief reference to the EI account in your statement. Can you elaborate on that for me? What do you intend to do with that account? I am sure you are aware that there has been a lot of controversy around that account. What do you plan to do to make it better?

Mr. Denis Desautels: Very roughly, there is a certain amount of information put out on the EI account, including what I was alluding to, the actual financial statements of the EI account. The information that is put out is put out at different times and in different formats as part of other documents. It could be part of the budget documents. It could be part of the public accounts and other reporting requirements.

What we are suggesting is a more comprehensive single report where you would find just about all of the information that is relevant to understanding the workings of the account and the results obtained by that particular program, as opposed to having to look for it in different places.

Most of the information that we are talking about is available in a public manner in one form or another, except for one particular piece of information, a very important one, that we referred to in our report; that is, the actuarial reports. So as we've pointed out, contrary to the CPP, the actual reports are not tabled in Parliament. Some of the information can perhaps be found or referred to in some public declarations of political authorities, I guess, but what we are suggesting here is basically one comprehensive annual report on the EI account. That would include the recommendations of the chief actuary.

• 0925

Mrs. Brenda Chamberlain: Further to that, I think that's really a blessing, Mr. Chairman. When we have controversy around certain issues, I think it's really important to be as transparent as possible in order to help the public understand. There's no question that we have a lot of stakeholders in the EI account. To my way of thinking, they do own that. There is an onus there, so we have a real responsibility to make it as clear as we can for the people who study it.

I would not pretend that I've tried to get all these documents or to have sat and studied them, but we do know there are a lot of questions about how many dollars go out in retraining. That was one of the main purposes of the account. If there was surplus, it was to go back into retraining, into trying to help create some sort of climate for jobs in some sort of capacity. I think that's really important information, and I hope that will somehow be fairly clear in this new document that you're going to get.

The Chairman: Thank you, Ms. Chamberlain.

[Translation]

Mr. Crête.

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): I too am 150% in favour of a separate report on the Employment Insurance Account. Unfortunately, the minister's reaction since the release of your report three weeks ago leads us to believe that he thinks there is enough information currently available.

Last week, a senior departmental official, either a deputy minister or an assistant deputy minister, testified before the committee and was unable to tell us how much of a surplus there actually was this fall in account. I do not recall the official's name. We asked him to forward this information to us, but we have not received anything from him. This confirms your assessment. In any event, if officials are unable to provide us with a month-by- month status report on an account containing several billion dollars, then we have a serious problem. This also affects the way rates are set. As a rule, we should know by November what the rates for the coming year will be and today, as I see from your report, we cannot come up with a logical or rational explanation of how rates are set. I congratulate you on informing us of this fact and for making this information available to all Canadians. This is a very important issue, as this account is one of the largest in Canada and one about which we know very little.

Therefore, if ever the committee were to follow up on your recommendation that a separate report be prepared, what would be the kind of information that we should get from the department in order to ensure that we end up with the report we want? Perhaps you cannot answer that question fully today, but could you tell us what you would like that separate report to contain and how you would like it to be presented so that in one, two or three year's time, we can be in a position to say whether or not the account is meeting its targets?

Mr. Denis Desautels: That's a very interesting question and we could take quite a bit of time describing what we think there should be in the report. However, we would have to be careful not to put too much into so as not to overload people with information.

In my view, the report should focus on three or four main elements. There is the financial side of the question and the evolution of the account over the years. It could include a summary of the last five years which would clearly show the growth of the surplus or of the deficit in the account.

We could look at the recommendations of the chief actuary and at the factors which were taken into consideration in setting past and future rates, as well as the target in terms of a surplus for the EI account.

• 0930

A third vital element would be information on the results of the various program components. Of course, we could look at income support, that is the assistance provided to people in need, but we could also look at the training and job search program for people who are out of work. This program has very specific objectives and the report could contain information on the actual results achieved in relation to each of the program's objectives.

The report could also contain more segmented information on the workings of the account. I've given you a rather general answer, but also, I hope, some indication of the approach I would take.

Mr. Paul Crête: Do you consider this to be part of your mandate and could you write down for us in one page or two the main points that you have just listed? All you have time to do this morning is to give us a broad overview of the chapters and while this is important, would it be possible to give us something more substantial to help the committee move forward on this issue?

Mr. Denis Desautels: In our chapter, we listed some of these indicators. If you like, we could provide the committee with more details about the contents of this chapter. I want to emphasize, however, that the department is responsible for developing this type of report. I would like the department to start by accepting this recommendation. In the meantime, however, if the committee would like more information about our position, we will be happy to provide it.

Mr. Paul Crête: I would appreciate that. Now then, I have a question about a different subject.

When you testified before the Standing Committee on Fisheries and Oceans regarding the Atlantic Groundfish Strategy, you said something which I hope you can clarify for me today. It was my understanding that your report focused on program efficiency, but apparently, you, the Auditor General, said that the money available through this program provided people with a subsistence income and this made no sense whatsoever.

That was not my understanding of the situation. Could you place your analysis of the Atlantic Ground Fish Strategy Policy in context and tell me what your objectives were and what the results of your analysis were?

The reports do contain some information about this, but as for acknowledging clearly that these persons needed some support income, that's another question. To my understanding, the program that was implemented was first and foremost a program designed to restructure the regional economy and that's where the shortcomings appeared, namely on the results' side. Would you agree with me?

Mr. Denis Desautels: The purpose of our audit and analysis was to see how the department involved had implemented the program as set out by Parliament and the government when it was first introduced. When the program was launched, the government announced a series of program objectives which were not solely income support objectives.

On the contrary, considerably more emphasis was placed on the restructuring of the fishery. We conducted our audit based on the government's own program objectives. When we completed our work, we noted that the restructuring goals had not been attained. Even though some progress had been made, meaning that some people had withdrawn from the industry and that there were fewer fishers, the results in no way matched the targets that had been set initially.

• 0935

Let me repeat that we never said that income support was not a necessary or desirable objective. Everyone recognizes that income support is necessary and we never said that this was not a desirable goal.

However, we did say that the other objectives, those having to do with the restructuring of the fishery, had only been marginally achieved.

Mr. Paul Crête: An analysis is currently underway to see whether the program should be extended, cancelled or restructured. Do you think it would still be relevant to have in place a program to restructure the region's economy and what conditions need to exist in order for the program to be successful this time around?

Mr. Denis Desautels: I hesitate somewhat to answer that question as I do not wish to dictate or even recommend to the government that it take a particular course of action where a new program is concerned. Steps have already been taken to analyze the results of the existing program and to recommend a course of action. The government has six months ahead of it to act.

Clearly, our analysis of the fishery indicates quite clearly that there is a surplus fishing capacity on the one hand and, on the other hand, that the fishery itself cannot sustain in any viable way all of the persons who currently depend on this industry. Therefore, the problem remains and we must continue to address it.

Mr. Paul Crête: You are analyzing the past to avoid mistakes down the road and I can understand that. What main reasons have you identified for the policy's current failure? Does the government find itself in the position of having to make a fundamental choice? Should people be able to continue living in their region of origin? Is the fact that its position was not stipulated clearly at the outset a major reason for the policy's failure?

Mr. Denis Desautels: That's a rather complex question and not an easy one to answer. We state in our report that in order for the government to meet its target for reducing the capacity of the industry, certain people in certain towns in certain regions will have to find other sources of income.

As I stated earlier, and I'm not the only one to hold this view, most observers seem to feel that the industry cannot viably sustain everyone who is currently dependent on the fishery. This presents us with a challenge. We cannot abandon these people. We have to find other ways for them to earn a decent living.

[English]

The Chairman: Thank you very much, Mr. Desautels.

Mr. Wilfert.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you, Mr. Chairman.

• 0940

Auditor General, in your analysis of the Atlantic groundfish strategy, you indicate that Parliament established certain objectives, but that there obviously was a significant gap in the execution of those objectives. In terms of the merits of the program, is it because it was executed badly because of the factor of a lack of co-ordination, or is it in fact that the whole strategy that Parliament developed is an issue here? Maybe we should revisit the entire issue. Tinkering alone may not improve it or certain changes may not improve it. Maybe there are fundamental difficulties and we really should go back to the drawing board to review the strategy.

Mr. Denis Desautels: Mr. Chairman, I think there is a bit of all of these factors in the program as it exists right now, and as we looked at it.

As we have already said, there were problems of planning initially, and they involved estimating the target population, determining from there the eligibility criteria, and co-ordinating the activities of the various players in the program. I think there were problems of upfront planning.

In terms of the execution, there were also certain things that could have been done much better. As Mr. Lalonde mentioned earlier, I think eligibility criteria were not interpreted uniformly from one region to another. There were some delays in identifying the core population, which in turn had other consequences.

So there were execution problems, and if you had not had those problems, the program would have been somewhat more successful. I would not tell you today, however, that if those problems had been overcome, the TAGS program would have perfectly achieved the objectives set by the government in the first place. I think the challenges of restructuring are perhaps a lot greater than people generally estimate. Also, as you pointed out, there is a need for some fundamental rethinking.

One of the things we do recommend in our report that is related to that fairly directly is the need for a national fisheries policy. Just what are the basic principles that should guide the management of the fishery? What should be the reliance that is placed on the fishery for providing jobs to people? I think the balance between that obligation and the need for conservation has to be clarified somewhat for the future.

So I think working out the problems, or solving the problems that we have highlighted in terms of planning and execution, probably won't be enough to really achieve the objectives that were set in the first place.

Mr. Bryon Wilfert: Thank you.

Mr. Chairman, I have one follow-up question.

In terms of this co-ordination with Fisheries and Oceans and with this department in terms of both of those ministries and ministers, can you tell me if there has been an indication that this will in fact take place? It seems like the objectives were laudable at the time, but the fact is that it was put together too quickly in order to respond to the need—and there was obviously a need. Do we have some assurances or some indications that that will not take place?

Mr. Denis Desautels: That is a hard question. I will ask Mr. Lalonde to field that one.

Mr. Louis Lalonde: At this point in time, I am not aware that the two departments have drafted a strategy, except for the announcement by the Department of Human Resources Development to follow up on the recommendations and so forth from their point of view.

As you are aware, part II of the Employment Insurance Act provides for a kind of assistance for training and so forth. All of those people who were on TAGS are automatically eligible for employment insurance as well, so they are not left in the cold for six months to a year down the road.

• 0945

I think it is up to the Department of Fisheries and Oceans to address the issues in chapters 14 and 15 on what to do as a national fisheries policy, and the ecological challenges that have to be met, and so forth.

Mr. David Rattray: Mr. Chairman, I understand there is an intent on the government's part to put forward a national fisheries policy, and I believe, if memory serves me right, it will be around the month of February or early March. We hope that would reflect some of the concerns we have expressed here. The other report I would say to watch for is the current study by Mr. Harrigan to look at the current TAGS effort.

Mr. Bryon Wilfert: I just don't want to get to February and then find that it's not done.

Okay, thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Wilfert. Ms. Davies.

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

Thank you for coming this morning. It's been interesting to hear the information you have provided about the results-based management, which I am sure everybody would agree is a very important thing to do.

I would like to come back to the TAGS program as well. From the point of view of results-based management, and looking at it from the perspective of the fishers involved and the coastal communities that have really been devastated by the collapse of what has been the major part of the economy of Atlantic Canada, results are very important to those people.

In hearing the information and the criticism that there is about the TAGS program, I really think there are two sides of the equation. The Auditor General has put forward some of the problems the program had. It seems to me that part of the question as well is what would the cost have been had there not been an emergency program to provide income support, restructuring, and so on?

The question I have is did your office, in reviewing this program, also assess what the cost to the government and to those communities would have been, in terms of the social and economic costs, if this kind of program had not been in place? I think that's a fair and important part of trying to measure an overall result of a major program such as this.

Mr. Denis Desautels: I'll ask Mr. Lalonde to answer that question.

Mr. Louis Lalonde: This is, I think, a very important question to follow up on in the future months, when the department will appear here.

There are two things. First is the department's promise to evaluate exactly the kind of question you raise about TAGS, the impact on local communities and so forth. Also, part of the Employment Insurance Act is a provision to assess the impact of the act—which is also very important in this particular scenario—on local communities. The first report is planned for the year 1997, so we should be expecting a report on this in the spring, probably. There are two important evaluations that the department is planning to complete, and we would certainly encourage that you ask questions on this.

The reports were not available at the time we did our audit. In fact, we report on this quite extensively. The department started off on the right track. They had plans to do an evaluation, and did the first one, but abandoned the efforts to complete the second one. Now we have learned, I think, through the previous hearings with the fisheries and oceans committee, that they will come up with the planned evaluation and results. They should be addressing those kinds of questions, as well as other ones.

Ms. Libby Davies: If I could follow up, Chairperson, I think it's really important that we go beyond the EI program—although that is certainly a very important aspect—in terms of trying to measure the impact of this program, or if there isn't a program, for example the effect on local businesses or on the local economy generally. Does the Auditor General agree that it's very important to get that kind of comprehensive economic assessment? Otherwise, how can one really look at what the measures are, or the true success of a program such as this, unless one can look at the negative side as well of what would have resulted had this program not been in place?

Mr. Denis Desautels: Mr. Chairman, I think it's a very valid question and concern, but I must say that our audit of TAGS did not go as far as assessing what would have happened to those communities had that income support not been provided. In fact, to a certain degree we take that as a given, that it is vital for those communities to have some kind of income support for that particular crisis. What we focused on, therefore, was not so much that part as the achievement of the other objectives that had been identified as being specific objectives of TAGS.

• 0950

Ms. Libby Davies: May I ask one other question? In your presentation this morning you list as one of the serious problems the difficulties with the forecast of the number of participants. As we know, the number of participants was something like 50% higher than was forecast.

You say there was a lack of adequate analysis. I'd like to know if you could expand upon that and tell the committee what it was that could have been done to provide a better forecast in terms of the number of participants who would be enrolling in the various strategies and programs.

Mr. Denis Desautels: I'll ask Mr. Lalonde to answer that question. I'll just say one thing first. I think the number of people who end up qualifying or applying is obviously affected by the criteria for eligibility that you put up front, and I think those varied over time. I think some criteria were set initially in terms of the level of attachment that people had to have, and those were relaxed a little bit further down the road, on the recommendation, I believe, of members of Parliament.

I'll let Mr. Lalonde continue the answer.

Mr. Louis Lalonde: I'll try to be brief. The story on the participants starts before TAGS. It starts with NCARP. The point I want to make here is that there was no time—and this is why we mention that the planning, the timing, was unrealistic—to assess the impact of NCARP before the other program was implemented and so forth. There was no time to assess what lessons were learned from that particular program and who were the true beneficiaries.

Then we moved on to TAGS, and the first thing we know, six months into the program there are 40,000 instead of the anticipated 25,000 or 26,000.

Lessons learned was not part of the first program. We're continuing with the second one and we hope that on this one there will be some time—and the department promised to do that in the next few months—to assess who the truly eligible people are, the people who need the support.

The Chairman: Thank you.

Madame Bradshaw.

Mrs. Claudette Bradshaw (Moncton, Lib.): Merci, monsieur le président.

First of all, congratulations to you and your staff. Your reports are taken very seriously so we certainly appreciate your being here this morning.

I make a little parallel with TAGS and where we're at with EI now. I listened to comments on the TAGS program, and being from New Brunswick it hurts a little, because we were sure hoping it was going to work and that they were going to be retrained.

I agree we have to look back, but bringing that to the EI issue, I see a little parallel there. We have a surplus in EI—and I'm glad that it's EI, not UI. We have a lot of pressure on us to use the surplus at this time.

My question to you is twofold. First, what's a reasonable reserve for us to look at? If there's another recession...I lived with those people when they lost their employment in 1982-83 and it was hard to see the people go through that recession. I agree that we need to have a reserve, but I wonder if you have an opinion about the amount of that reserve.

Second, since you study all of this very closely, where should the surplus be placed and what area would you see in EI as a priority for us?

Some hon. members: Oh, oh!

The Chairman: What's your answer?

Mr. Denis Desautels: Mr. Chairman, those are very political questions or policy issues that I would hesitate to get involved in too much.

On the first question, in our report, in paragraph 17.63, we do basically quote the chief actuary, who says—and I'll quote him again—that “there does not seem to be any need for exceeding an absolute level of about $15 billion” in terms of a reserve in the EI account. The chief actuary would seem to me to be a good source of expertise for that. We at least point to his recommendation in our report. I think that gives you an indication of what it ought to be. Certainly it's not $2 billion, and it's not $50 billion. I think it's situated more around that $15 billion level.

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In terms of what you should do with a reserve, again, I don't want to be involved in policy. The reserve is a reserve, and by definition, a reserve is not meant to be spent tomorrow morning on something; the reserve is meant to cushion shocks if there are to be changes in the economic situation. It's so that you don't have to adjust premiums unduly from one year to the next. A reserve is meant to act as a reserve as such and to cushion shocks, and not necessarily to be used on a particular program or another. I think that's a decision you can make with the regular part of the fund, not the part that you might be setting aside for a reserve.

Maybe Mr. Lalonde would like to add something to that.

Mr. Louis Lalonde: Not on the reserve, obviously.

For the employment insurance part of your question, as you probably are aware, the rules were changed last July to accommodate probably the anticipation of TAGS being phased out much earlier than anticipated. The rules were changed there. You probably could find out more from the department as to the plans for fishing, particularly the fishers, and so forth, in terms of eligibility for employment insurance. The rules were tightened up two years ago, but now they've been relaxed to a certain extent to face the new situation. There will probably be more funds, not as part of the reserve but as part of the regular program, to face this new situation.

Mr. Denis Desautels: Mr. Chairman, here's one last bit of information in answer to the last question and also for Mr. Crête's earlier question.

As you probably know, the surplus in the fund as of March 31, 1997, was $7.3 billion. Current estimates are that it should end up at about $12 billion at the end of the current year. I just put that forward as added information.

The Chairman: It's still well below what the actuary has recommended at this point.

Mr. Crête, do you have a very small question to follow that point up?

[Translation]

Mr. Paul Crête: I would like to remind Mr. Desautels that these are merely estimates. As far as the monthly management of the account is concerned, we are unable to find out from the department today how much exactly is in the account. It was estimated that the surplus in the account would be $12 billion by December 31 and we have already surpassed initial estimates. Am I wrong about this?

Mr. Louis Lalonde: If my memory serves me correctly, there is a discrepancy, but not as major a one as people are suggesting. The surplus in the account is very close to what was projected. Of course, we review our estimates every six months because they are made practically 18 months in advance. The projected $12 billion surplus for December 31 was announced back in the spring.

Mr. Paul Crête: And what about the surplus for March 31?

Mr. Louis Lalonde: The surplus could reach $13 or $14 billion. There have been changes to the laws and rules governing the fishery and this could result in a slightly lower than expected surplus.

[English]

The Chairman: Thank you. Before I move to the next questioner, I'll come back for a second round on this side. I will give it to Mr. Dubé first.

[Translation]

Mr. Jean Dubé (Madawaska—Restigouche, PC): Regarding the Atlantic Groundfish Strategy, if I understood correctly the spirit of your report, the main problem or source of all the other problems, is the fact that the strategy was conceived too hastily, that is in a mere four months. It was implemented without adequate planning and without reliable data on the population affected.

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I also read in your report that the minister was aware in July of 1996 that the strategy would be coming to an end in May 1998. During the first week of October 1997, the minister appointed an official to conduct a post-strategy study.

He also announced that he expected the report to be tabled by the end of 1997 to allow enough time to come up with another measure. If I do my calculations, I see that this leaves us four months. Is that correct?

I would also like to know whether, in the course of your research, you found that those responsible for the strategy at Human Resources Development seemed aware of all the problems associated with TAGS?

Mr. Denis Desautels: TAGS is, I believe, the second such program to be implemented by the federal government. Naturally, we are starting to gain some experience in this area. I would imagine that we now have better information about the population affected in the various provinces targeted by the program.

If the program comes to an end as scheduled—and I do say if—, that is around May of 1998, we still have six months to plan a new one, if that is we want to put one in place immediately either in May or June of 1998.

In my view, this leaves us enough time because we are not working in the dark as before. If we were not quite ready to bring in a new program at that time, perhaps we would be better off introducing temporary measures until something firm is ready. I find that generally speaking. this is a better solution than moving too quickly. Nor should we lose sight of the persons affected. I feel that since we are no longer operating in the dark, we should have enough time to develop a viable alternative strategy.

As for your second question, namely whether the minister was aware of the problems that we raised, I think that he was. Generally speaking, the department was aware of these problems and officials are even a little frustrated over their lack of progress. They are aware of the problems and share our concerns.

[English]

Mr. Jean Dubé: My second question was answered. I was going to ask you if there was room for temporary measures from the end of this plan to the implementation of the new one. You answered that in the meantime it would be favourable to have temporary measures for the people that are affected.

[Translation]

Mr. Denis Desautels: Naturally, if we were not quite ready for a new program, I think that this would be a viable alternative.

[English]

The Chairman: Thank you. Mr. Johnston is next.

Mr. Dale Johnston (Wetaskiwin, Ref.): I welcome the Auditor General and his staff.

I notice that throughout your report you talk about results-based management. That's so logical that it would seem like a given. I doubt very much if this is a brand-new recommendation, and I'm wondering if you've made this recommendation in previous reports. In your opinion, what results have been achieved? What advancements have been made as far as results-based management is concerned?

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Mr. Denis Desautels: I'm quite happy to answer that question. I think this is a very important shift that has been taking place in the last two or three years in public administration, and it's a shift that we see happening not only here but in other jurisdictions as well. In some jurisdictions, such as Alberta and the U.S., in fact it's mandated by legislation. It's supported by legislation.

We have, as an organization, been suggesting better accountability for results for some years, but we weren't the only ones suggesting that. As you said yourself, it is common sense, and there's been much pressure on public administrations to move in that direction, as opposed to staying to a process-oriented culture. So I think it's happening.

We ourselves have supported government efforts to implement performance reporting. So we've made suggestions. We've critiqued attempts or experiments at performance reporting, and we're quite happy that now, this fall, all departments are now tabling performance reports. I understand these should be tabled perhaps this week. So I think we've made good progress.

In our report that was tabled in October we talk about that in chapter 5 and we talk about the general thrust to results information or to a results approach at the level of the estimates process and the reporting to Parliament. In chapter 11 we go further into the subject and talk about how that is being applied in the management of a number of specific programs. So we move from the parliamentary control to the actual management of programs. We give there good examples of what is being done. Then chapter 17, on HRDC, picks up that theme again.

We're trying to demonstrate that a shift in culture is happening, which we fully support, and we would like to encourage it further and have it achieve its full potential as quickly as possible.

Mr. Dale Johnston: Along those lines, do you see that full implementation of results-based management would address the problems we have had in the past of fraud or overpayments under various programs? Do you foresee that there's going to be a vast improvement in those areas?

Mr. Denis Desautels: I think results-based management would not specifically address that kind of concern. I think other developments are taking place in public administration that would also address that. I don't say that results-based management would ignore that. I think a good system of results-based management would address some of that, but when it comes to fraud and overpayments, you're also bringing in other elements, elements of not just proper internal control but also ethics and values. I think there's a certain amount of interesting work being carried out in public administration on ethics and values and I think that would certainly address the issue from the public servants' side, but it cannot address necessarily the issue from the general taxpayers' side or the side of the beneficiaries. We have to continue efforts to emphasize in whatever program, whether it be social programs or taxation programs, the need for the population at large to observe our laws and comply with our laws. So I think good facilitation, good understanding, of our laws would go some way in making that clear.

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The Chairman: Mr. Johnston, forgive me, I'd like to ask a follow-up question here.

I noticed in the departmental outlook that on this issue of fraud/overpayment—and don't hold me to the number—I think it was a hundred and some million dollars, $140 million seems to stick in my mind, and they recovered all but $2 million or $3 million. One of the questions I raise, just having observed the case work that's done in people's offices, is how much of that larger amount that gets identified as fraud is in fact a miscommunication between the recipient and the department that as soon as it's brought to the attention of the recipient gets resolved?

It's a bit shocking for people who get these notices saying, you have now defrauded the government of $100 or $200 because you've been overpaid that much. The message is quite severe when people are notified of it. Fraud strikes me as too strong a term for the exchange that takes place.

Mr. Denis Desautels: Sometimes overpayments can be attributable to a misunderstanding of eligibility criteria, but I wouldn't say that everything falls into that category.

I'll ask Mr. Lalonde to explain to the committee maybe what is the situation on overpayments and recoveries.

Mr. Louis Lalonde: Thank you, Mr. Chairman.

Both the Income Tax Act and the Employment Insurance Act have definitions of fraud. Failure to report, for instance, earnings is considered as fraud. And we all know that for tax purposes it is the same thing there. So from that perspective the onus is on the beneficiary to report all the earnings they have.

If it's an internal mistake or an honest mistake, they have categories for that. I'm sure that in terms of the $100 million you mentioned—without having the figures in front of me—those are really the fraud cases. But there are other overpayments, which total close to $400 million a year, that are not in that category, but they break it down and they follow up on this and so forth.

Only on the fraud cases are penalties imposed as well.

The Chairman: So if people have committed acts of fraud, how many charges arise from $140 million worth of fraud?

Mr. Louis Lalonde: From memory I cannot say. But most of them are resolved before they're prosecuted in court. Of the big cases there are not many that end up in court. You're quite right about that.

It's surprising and shocking to us also to see every year the amount of...but it's all defined in the act. Then they have no choice but to call them frauds if they are undeclared earnings that you should have declared.

The Chairman: We'll pursue this with the department.

Ms. Davies, you had a question.

Ms. Libby Davies: Thank you, Chairperson.

I wanted to come back briefly to this issue of results-based management and ask you a question in terms of how that applies to national programs, whether it's fisheries or health. We've been talking about TAGS this morning. Given it's a well-established fact that because we have very different regions, different client groups, and different provinces, the inputs that are required in order to produce a similar outcome may be very different in different parts of the country, I'm just wondering how the Auditor General's office takes this into account when you look at results-based management. Do you look at the lowest common denominators or do you have some way of accounting for the fact that we do need to have different inputs or even different measures of success, depending on local economic conditions in different regions of the country?

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Mr. Denis Desautels: Mr. Chairman, with your permission, I'd like to invite Mr. John Main to the table. I think he'd be well placed to answer Ms. Davies' question.

Mr. John Mayne (Principal, Accountability, Office of the Auditor General of Canada): I think you've identified a good point. I think what you see in some national programs is that the objectives and the expectations that are set do vary by region, reflecting regional conditions. So I think a well-designed program ought to reflect your concerns with perhaps how the objectives that are being achieved will differ and certainly the activities and inputs used would differ among the regions.

This presumably would be set out in the design of the program, and when looking at a program I think one needs to recognize those differences in how the objectives are going to be achieved in different parts of the country, still within a national umbrella.

Ms. Libby Davies: Getting back to the TAGS program, then, is it not legitimate, given that the program was developed very rapidly because of the critical situation, that this was a legitimate local factor that should have been taken into account in terms of how the Auditor General then went in and assessed the program? Am I making myself clear?

You can get to the point where the standards become so standard they really don't take into account the unique situation of a situation like TAGS in Atlantic Canada or the loss of the fishery.

Mr. Louis Lalonde: In chapter 16, for instance, in the section on eligibility, we took into consideration local differences in designing our own sample to acknowledge this kind of situation you mentioned. Then we had to, in the end, compare the four regions with the same criteria, but we took this into consideration and in some regions interpreted things differently and so forth. So we had an open mind to these kinds of things. In our experience, we've found over the years that there are different interpretations of what is a waiting period in some areas and so forth.

Given that, we found that the eligibility was...the department has a lot of work to do to finish its work on the files. We recommended that it complete its review of all the files which, because of these particular considerations, weren't treated the same way. For instance, in some regions they took very seriously the action plan to find a job. In other regions, because there were no jobs there, it was more lax. We took that into consideration and didn't consider it as an error or mistake for that region.

The Chairman: Thank you, Ms. Davies.

Mr. Anders.

Mr. Rob Anders: You touched on student loans, I think it was, very briefly in your initial presentation, and I'm wondering if you could comment on whether or not tying student loans to social insurance numbers would reduce the likelihood of default and would increase the accountability of the program.

Mr. Louis Lalonde: It probably would, but as far as I understand, this is not in place right now. There's a question of confidentiality or access from one particular act to another. As far as I know, it's not being done.

The Chairman: Thank you, Mr. Anders.

Let me just go one step further with that question. because in a sense there are some similarities with the earlier question about fraud. If a person has a student loan, and it is argued that the default rate in student loans would seem to be somewhat above the norm in the community for defaulting on loans, and yet the students, by definition, are better educated, more likely to be higher-income earners, etc.... So there's always been a concern about why is there this somewhat higher default rate than one would observe in normal personal loans.

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One of the arguments that came back was that it is again in part the way the department processes or identifies a default.

Mr. Dale Johnston: I was just at the back of the room and I noticed that people back there cannot hear what is going on. I just wonder if we can keep that in mind and maybe just speak up a little bit.

The Chairman: They look frighteningly attentive.

Mr. Dale Johnston: Well, they are. That is because they cannot hear what we are saying.

The Chairman: Perhaps that is an advantage. Maybe they are listening more carefully.

Thank you, Mr. Johnston, for bringing that to my attention.

We are on these boxes today because apparently there is going to be some multilingual translation in here. So if you are having difficulty in hearing, you could also pick up one of these from the front. It might make it easier for you. I wouldn't want you to miss my question, because it is a good one.

One of the responses we got back—and I'm going back a couple of years, and this was before the transition to the banks—was that, whereas in a normal collection process they would search them out and find them and continue with the collection, a simple change of address, making a person in that action inaccessible, was enough to get a person recorded as being in default of a student loan. The loan then would come back to the government. As a result, the statistic was a bit artificial.

A witness: I am sorry; I am not aware of precisely what the use is for default. All I know from anecdotal evidence is that the student loans are higher and higher as we go along in the 1990s and there seem to be fewer good jobs for them when they graduate and they start paying off their loans. The department will, I think, look into that area in 1998 or 1999. We also have an audit plan to look into that area in the future, because the loans portfolio is obviously increasing to a limit we have never seen before. We are not sure about the answer. The department is not sure why, either.

The Chairman: We have Ms. Nixon from student loans coming in now, so we will have an opportunity to look at that a little bit more carefully.

I have one final question on fraud. As I understand it, if a person is receiving the benefit and if they fill in the card and say “I am entitled to this benefit” and they get, say, a half a week's or a week's benefit more than they are entitled to, that qualifies as a fraud because they filled in a card.

Mr. Louis Lalonde: Normally, yes.

The Chairman: Is the department guilty of entrapment by sending out the card?

Mr. Louis Lalonde: I would not be able to answer that question.

The Chairman: It is an interesting question. Maybe we will look at it later.

Mr. Desautels, we have about six minutes left and I did want you to comment on one thing.

In the first meeting of the committee, we had a presentation from the Treasury Board on the new process for dealing with the estimates, and in your remarks you made a number of comments about the role of the committee. I am interested in knowing if you would want to make a couple of closing comments on what you would see as this committee's role relative to this rather large department.

Mr. Denis Desautels: There is one big challenge that is not unique to this committee but is across the whole system. It has been that parliamentarians have been, on the one hand, frustrated by their own involvement in the estimates process, and in the past departmental officials have not been very forthcoming with information for parliamentarians because they felt that parliamentarians were not using the information.

I think the changes that are being brought about and are happening right now have a lot of merit, but they will be successful only if the whole estimates process is made more dynamic and various standing committees really use the information that is now being brought forward, a new type of information.

As I said earlier, I believe you will be receiving performance reports from all of the departments, and you will be receiving the one from HRDC. It would be tremendous to have a good review of those performance reports by the committee, with conclusions drawn from that review which would have an impact on next year's estimates.

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In our chapter 5, paragraph 5.10, we actually suggest certain types of questions that committees could ask of departments about on that information. To answer your question, I think there is some indication there of what could be reviewed by committee.

But certainly, spending enough time on the performance reports and then using that to impact on next year's estimates would probably send very strong messages.

The Chairman: Thank you, Mr. Desautels.

Ms. Chamberlain will close this session.

Mrs. Brenda Chamberlain: Thank you.

I think that's an interesting comment: “to be able to use things valuably”. And I think the parliamentary secretary here made a really good suggestion. I will place it in front of you for some consideration. Think about asking the chair of fisheries to come here and talk about what that committee's future recommendations for TAGS would be.

We can sit here forever. I think most of us realized there was a need for a program down there. We now realize the program we implemented was not 100% successful. However, many times you have to do things and try things to find out what the right answers are.

As a committee member, I would be really anxious to get involved from a human resources point of view in something like this. I think it's imperative that we do know what's going on with fisheries in this particular program. We can spend all of our time until the cows come home analysing bureaucrats and what's going on in departments. Here I would really like to be able to make a difference in people's lives through human resources. I think we can, through you, Mr. Chairman. I put that forward to you as a challenge and ask you to consider that.

The Chairman: That's interesting. I had written a note to Mr. Anders earlier commenting that on some of his questions I believe the fisheries committee has either passed a motion or is about to. I will consult with the chair of the fisheries committee and gather what information I can. If it's appropriate, I'll invite him to come and meet with the committee on this particular issue.

Mrs. Brenda Chamberlain: That would be great.

The Chairman: Mr. Desautels, thank you very much. I appreciate you and your staff taking the time to be with us today. I suspect we'll meet again.

Mr. Denis Desautels: Thank you.

The Chairman: Now we'll take a brief break while the witnesses change. On deck we have Mr. David Good and Ms. Martha Nixon from the department.

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• 1034

The Chairman: Okay, let's get back at it. We have just a shade under an hour for this presentation. This is more in the continuing series of briefings we have on the department, just to get us under way.

We have with us today Mr. David Good, Ms. Martha Nixon, and Thomas Townsend, who is with the learning and literacy directorate.

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Mr. Good, perhaps you could start us off. We'll get all of the presentations in as expeditiously as possible, and I'm sure the members will then have some questions.

Mr. David Good (Assistant Deputy Minister, Human Resources Investment Branch, Department of Human Resources Development): Thank you very much, Mr. Chairman. We're very pleased to have the opportunity to appear before the committee today.

I will have just a few comments to make about the human resources investment branch, which I head up within the Department of Human Resources Development. I will then turn it over to Martha Nixon—she is the associate executive head for the branch—and Thomas Townsend, who has just been introduced as our director general for learning and literacy. They will walk you through a briefing with regard to the Canada student loans program and the whole learning area. That's what I would propose to do, Mr. Chairman.

When you think of it, the human resources investment branch is really the focal point for social development, employment and learning programs within the Department of Human Resources Development. Indeed, we think investing in Canada's human resources is really a key to long-term job creation, the social well-being and the economic growth and performance of the country.

Investing in Canadians really has a number of avenues. One is those programs that are really designed to help Canadians help themselves. In that regard, we have the employment benefits and support measures that have been part of the transfer of responsibilities to a number of provinces for the labour market measures. As well, there is the Transitional Jobs Fund.

We also have responsibilities in a second area that we call working with partners—that is, provinces, NGOs and the private sector—really to more effectively achieve common ends. In that regard, we build local community capacity, we work in the area of voluntary sector initiatives, and we have employment assistance services and local labour market partnerships, as well as sectoral councils.

We also have much work that we are undertaking—and which you'll hear about this morning—in the whole area of learning and work opportunities. It focuses on the Canada student loans program, the office of learning technology, and literacy programming. We'll have an opportunity to discuss more fully this morning the Canada student loans program.

I should also point out that we have a responsibility for helping those most in need. That focuses particularly on helping young people to make that transition from school to work, which is extremely important; helping aboriginals to become more self-sufficient, primarily through our aboriginal human resources development strategy; providing assistance to communities that are undergoing significant change—I know you heard from the Auditor General this morning with regard to the TAGS program—and helping citizens with special needs in the area of vocation and the rehabilitation of the disabled program.

There were a number of areas reflected in the Speech from the Throne that underlie the importance of our contributions. In the Speech from the Throne, you will recall that there was mention of creating opportunities for young Canadians by improving access to post-secondary education through changes to the Canada student loans program, and by increasing assistance for students with dependents. There is also the new scholarships program, which is intended to encourage excellence while helping those low- and moderate-income Canadians with their education, and Martha and Thomas will speak more fully about that in a few moments.

We also have a responsibility with regard to extending and expanding internship programs. We've undertaken enhanced funding for student loans. There was mention in the Speech from the Throne about a Canada-wide mentorship program in which we would partner with provinces and with the private sector in the whole area of youth employment.

As far as the branch is concerned, when one thinks of the human resources investment branch, one should be thinking in terms of money. An amount of approximately $3.5 billion is there, and it's in the EI account as well as in what we call the consolidated revenue fund. It really represents most of the discretionary funding with regard to the department.

I know that when Associate Deputy Minister Ian Green appeared before the committee—I believe it was last Tuesday—Mr. Anders asked a question with regard to the breakdown of our expenditures within the $3.4 billion, with regard to the $1.2 billion in grants and contributions. Mr. Chairman, I'm pleased to present to the committee a break-out of those expenditures. I think the clerk has that copy, and it can be circulated in response to the question that Mr. Crête raised.

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Just to give you a quick highlight on that without any details, because I think they are set out, the bulk of that money has been used in such areas as aboriginal programming, TAGS, youth programming, literacy, and vocational rehabilitation of the disabled. So I present that to the committee, and if there are further questions, we can follow up on them.

I don't intend to speak any further, Mr. Chairman. With your agreement, I would now propose to pass it to Martha Nixon and Thomas Townsend, who have a briefing for you basically on the changes to the Canada student loans program and some of the issues that we're facing with regard to them.

Thank you.

Ms. Martha Nixon: (Associate Executive Head, Human Resources Investment Branch, Department of Human Resources Development): Thank you very much, Mr. Chairman.

[Translation]

It is a pleasure for me to be here today. Many people are interested these days in the Student Loan Program. Therefore, it is nice to have this opportunity to explain to you some of the program's complexities and to broaden your understanding of it.

[English]

I think you all have it in front of you, but we wanted to take you all through a deck today in order to give you an overview of what we're trying to do with the student loan program. We'll give you a few brief facts about the program, talk about some of the sorts of underpinnings of the foundations of the program, and then get into a little bit of what the trends are around debt and debt management, what we consider to be the policy issues that we are currently trying to address, how we see the continuing reform process, and what we're currently looking at in terms of next steps and time lines.

So very briefly, we'll try to give you a very quick indoctrination to the student loan program.

[Translation]

I would like to start by listing for you the objectives of our presentation. We would like to provide you with an overview of the Canada Student Loans Program, to review the continuing objectives on ongoing reforms to student assistance, to examine current problems associated with student assistance and to examine a package of further possible reforms to help to alleviate the impacts of current problems.

[English]

If you turn to page 4, you'll find the objectives of the student loan program. It's probably wise to underline here that what we're trying to do with the student loan program is to allow all qualified, financially needy students to have access to post-secondary education. It's very much a targeted program that looks at need and tries to ensure that we do have a situation in which students aren't going to suffer undue financial hardship in accessing an education. And we're also underlining that there should not be a barrier in terms of access to post-secondary education, and we're trying to reduce the geographic, socio-economic and other constraints on participation in post-secondary education.

If you look quickly at the page on quick facts, you'll see we have clearly been working at the student loan program since 1964. Since that time, we have issued probably somewhere in the area of $12 billion worth of loans to over 2.4 million students. If we look at what the current picture is, we currently have in the area of about 370,000 full-time students who would have over $1.3 billion worth of loans. You probably are aware that there is a provision in the Canada Student Loans Act that allows provinces that have similar programs to opt out and to have financial compensation from the federal government to do that. Currently, Quebec and the Northwest Territories have chosen that route.

When we look at the total value of the portfolio, we have two streams of loans at the moment. Those that are pre-1995 are called guaranteed loans, for which we are still on the hook in terms of paying off banks that are collecting loans on our behalf if students do not pay. After 1995 we introduced a series of reforms, the chief of which saw us go to a contract with the banks. The banks take on the risk, we pay them a 5% risk premium, and they have to collect. If their risk is more than 5%, they are the ones who are holding the bag, in a sense. And with both of those portfolios—the guaranteed and the risk-shared loans—we currently have $5.75 billion in circulation.

I'd like to touch on some of the major elements of the CSLP in terms of giving you a quick understanding. Some of you may already be very familiar with this because you have students knocking on your door every day and bringing you any number of complex problems. For those of you who don't, however, this is just a quick primer in how student loans work.

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If you want to qualify for a student loan, it will be necessary to undergo a need-assessment test. Those are administered by the provinces on our behalf. The need assessment instrument we use is one that was modified in 1995, following a series of fairly tortured discussions with the provinces over how we should recalibrate that whole instrument.

We have recently received the very first draft of an evaluation of the student loan program, which we hope to share with you in the next month or so. It tells us that our student loan need assessment instrument is actually working. It's more efficient at trying to find the needy student when compared with what we had pre-1995.

So we are looking at two categories of students: dependent and independent. If you are considered to be a dependent student, your parents' income will be taken into account; if you're an independent student, your parents' income will not.

What we're looking at in terms of trying to assess financial need is assessing the costs, looking at the resources the student has, subtracting those from the costs, and determining the need. We talk about meeting a student's need and then we talk about the unmet need, which gets us sometimes into the category of looking particularly at some students who have more problems with unmet need than others.

[Translation]

One of the major elements of the CSLP, namely the loans component, provides up to a maximum of $165 per week of study and a maximum of $4,000 per year for part-time students.

At present, the federal government provides 60 per cent of the student's assessed financial need up to a maximum of $165 per week of study. Provinces decide if and how to meet the remaining portion, namely 40 per cent, of the student's assessed need.

[English]

So it's important to remember that we have two loan programs: a federal program at 60%, and up to 40% from the provincial stream. As you know, one of our objectives federally has been to figure out how we get the harmonization of those two streams. We have a more closely linked one-track program.

Again, looking at the study period, when a student is in studies the government pays the interest on the loan. We're currently subsidizing this to the tune of about $193 million per year for the interest subsidy. What that means is that a student will have no interest to pay during the time they are in studies.

When they finish studies, there is a six-month period, which we call the grace period, when interest begins to accumulate but the student is not obliged to pay it. That's a transition period.

Currently, when a student, in a sense, graduates, we have an interest relief period, which is in the first five years after graduation. If the student has low income or no income, they can apply for interest relief. We will pay the interest during periods of up to 30 months during that five-year period following graduation.

We also have some elements that assist students for coming into studies. We currently have three operating special opportunity grants. We have been spending in the area of $23 million to assist about 12,000 students in 1995-96 year. These three grants are targeted at part-time students of high need, women in doctoral studies in which there has been an under-representation of women, and students with permanent disabilities, which is the area of our largest grant.

You will be aware that in the red book and in the last budget, there were additional measures announced. We will be hoping to implement, this coming fall, a grant for students with dependents, which is an area, again, where we have a lot of unmet need. We expect to have up to $100 million in additional grants for those particular students.

Again, these are just basics in terms of repayment. The loans are consolidated through the lender, who determines and discusses, we hope, with the borrower what the repayment terms will be.

Our current policy indicates that there's a choice of interest rates for students. They can choose a fixed rate, which would be prime plus 5%, or they can choose a floating rate, which would be prime plus 2.5%. I've already mentioned the interest relief provision, which currently amounts to $32 million worth of subsidy for students in 1995-96.

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Again, it's important to get fixed in your mind that the province delivers the student loan program on our behalf, although we retain policy leadership. We work closely with them around any policy changes. We have regular discussions with them.

We are also very much working in partnership now with the banks, following the 1995 reforms. As I mentioned earlier, the 5% risk premium is one around which I think we will be increasingly in discussions with them, as we move towards the year 2000 when we will have to renegotiate the contract with the banks. It was a five-year period from 1995 to 2000.

As you know, CIBC has already decided their business case in Nova Scotia was not worth it. They have pulled out of the provincial Nova Scotia loan program, and they've indicated to us that they have some concerns around the increasing signs of student difficulty in terms of the federal contract.

So our role is one of policy development, auditing and monitoring both the provinces and the lenders—which I think we admittedly have to be better at—and in terms of the pre-1995 loan portfolio, directly managing defaults and collection.

[Translation]

I will now call up on my colleague, Thomas Townsend, to explain to you the situation which is starting to change a little.

Mr. Thomas Townsend (Director General, Learning and Literacy Directorate, Department of Human Resources Development): Thank you, Martha.

[English]

I'd like to touch on trends that we have been observing over the last five years with respect to Canada's student loans.

First, there has been a steady increase in the number of individuals who are qualifying for loans. This is the result of two principal factors, the first being that costs of education, both tuition costs and non-tuition educational costs, have been increasing dramatically during that period. The second is that family income in Canada has remained relatively constant over the last decade, so the ability of families to further support students has been somewhat limited.

When we look at university students, we have a small increase in the total number of full-time enrolments that are using Canada student loans. About one-third of the university population now in fact has student loans on entry. For community colleges, that figure is about 25%. We do not have an indication of what percentage of individuals attending private vocational colleges have Canada student loans, as the total number of individuals attending those institutions is not known to us.

Ms. Martha Nixon: We're on page 16 of the paper now.

[Translation]

Mr. Thomas Townsend: If we look at the breakdown of loans by province, we see that Ontario accounts for 56 per cent of all loans. This is an increase over the 47 per cent recorded in 1991-92 and it is due primarily to program changes in the province of Ontario.

[English]

The level of student debt has been increasing very rapidly and is the singular major concern to program administrators at this time. On page 17 we note that in 1990-91 the average debt on graduation from a four-year program was just a touch under $10,000. In this chart, because I'm using the borrower's perspective, I'm adding together both the Canada student loan portion of the debt and the provincial or territorial portion of the debt. So these numbers are somewhat larger than you would see if we just indicated the Canada student loan portion.

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In 1995-96, the average is about $17,000. Indications with respect to the most recent increases in tuition...and taking into account that changes to the Canada student loans program in 1994-95 are only coming fully into effect for those students who entered programs in that year, we believe that average debt loads for university graduates in 1998-99 will approach $25,000.

On the next slide we have an indication of why this is of concern to program administrators. The way in which we look at the management of debt is the percentage of the individual's disposable income that can be used to retire that debt. At debt levels of $25,000 we're starting to approach debt-to-service ratios for individuals graduating from universities and colleges that are troubling in terms of the individual's capacity to manage those debts.

On the next slide we see that the outcome of rising debt loads is increases in default rates for students. This is the first indication that a student borrower is having trouble managing debt. There are variations, as you can see, between the different kinds of institutions. Universities have had historically lower rates of defaults, community colleges somewhat higher. In this case the trend appears to be that those defaults are increasing. Private vocational institutions have historically had the largest default rates. Default rates in these areas have been increasing as well.

Mr. Dale Johnston: On a point of order, Mr. Chairman, I assume that on page 19 those graphs are colour-coded, but in here they just show up as black. So the lowest one is the universities and the next one is the community colleges?

Mr. Thomas Townsend: Yes.

Mr. Dale Johnston: Okay.

Mr. Thomas Townsend: And then the private vocational institutions.

Mr. Dale Johnston: Thank you.

Mr. Thomas Townsend: When we are talking about high default rates, one of the factors that lenders have indicated is a cause of concern for them and that has been factored into the refusal of the Bank of Commerce to renew its agreement in Nova Scotia has been the increasing number of individuals using private vocational institutions as a way of gaining post-secondary education. We've seen an absolute doubling of the number of individuals in the last five years, coupled with the fact that the default rates for individuals graduating from these institutions is historically higher. This is causing a loss rate for lenders that has increased over historical norms.

[Translation]

We also know that the number of personal bankruptcies filed by individuals who received student loans is increasing. It's not just the number that's increasing, but also the value of these bankruptcies. This is a particularly troubling state of affairs since we're talking about young Canadians facing financial difficulties soon after graduation.

[English]

With respect to policy issues that we need to address, I've mentioned that the increasing size of the debt load is the principal preoccupation of program administrators.

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We need to take into account two factors in the labour market that are making the increased debt loads harder for recent graduates: salaries have tended to remain constant over the last several years, and among graduates we see a much longer period of transition to permanent employment.

Historically graduates have been able to establish themselves in a permanent job within the first two to three years after graduation. We're seeing those periods getting longer and many more individuals are working part-time or on contract prior to actually being able to establish themselves on a full-time basis in the labour market.

From a program perspective, the increased default rates are troubling on two counts, the first being that, again, these are individual Canadians trying to establish themselves who are suffering financial difficulties early on in their careers. As well, the increase in the rate of default is making the program much more costly to administer, and the program has become very costly over the course of the last two to three years.

We are proposing in our reforms to address the incidence of default, both through measures for students that will allow them to manage the debts that they have and also through proposing that in some instances it is necessary to establish controls within the program that will ensure the loans are in fact given under good and bona fide conditions.

In all of the solutions that we are looking at we want to maintain the accessibility of post-secondary education for all our Canadian citizens. As well, we want to ensure that the Canada student loans program remains a loans program, that it remains affordable, and that we provide those measures necessary for borrowers who want to repay their loans to be able to manage their debt and successfully discharge the obligation to the people of Canada.

I'd like to talk specifically for a moment in terms of some of the measures to manage the rate of growth in debt and to help individuals manage their debt. This is on page 25.

[Translation]

We need to find a balance between front-end grants which would eliminate the need for further loans and to take other measures to reduce the level of debt after graduation.

[English]

As well, we would like to look at incentives that will help individuals access studies as well as provide for the reduction of debts in those cases where the debt has become unmanageable, and we want to encourage flexible repayment options.

I mentioned earlier that we want to improve the administration in our support to clients. We're proposing a number of measures to improve the administrative efficiency of the program. On page 27 we've outlined briefly the process of consultation and the next steps in the reform.

We believe that in fact we will have concluded our policy development work, the presentation of policy options to stakeholders, through the course of this month and would be able to have our minister briefed and able to approach cabinet early in December.

The Chairman: Thank you very much.

I note that we have about 25 minutes left and I suspect there is more than one question, so let me begin.

I will start on this side with Ms. Davies.

Ms. Libby Davies: Thank you, Chairperson. I've so many questions that I'm having trouble knowing how to roll them all up into one or two. I'm going to meet with Ms Nixon later.

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I really think the situation of student debt and what's facing students is a real crisis. I don't think there's any escaping the fact that the federal cuts in post-secondary education of over $2 billion have had a huge impact on increasing tuition fees, which I think have gone up by something like 83% in the last ten years. Now, of course, we see the consequence of that, which is an increasing debt load.

It's a real irony, because we know that if young people go to post-secondary education their chances of getting a job are better and the unemployment rate is lower than if you don't have post-secondary education. That's a fact. But on the other hand, we're also saying to young people that if you go to school you come out the other end with a huge debt.

My main concern is that there's a lot of discussion about repayment options—in fact, you've handed out a sheet today that lists all these various terms you have—but the issue is the debt reduction. Even your own figures show just how hugely the debt load has gone up, from $10,000 in 1988 to $25,000 now. The bankruptcy rate has gone up from about 3,000 in 1990 to 8,000 in 1997. All of these issues are linked.

What, realistically, are we going to see from the department in terms of really looking at the issue of debt reduction, not just mucking around with, well, we'll let you take 25 years to pay it back instead of 10 years? It's really important to get at the issue of debt reduction and some system of national grants.

I believe we're the only western country that doesn't have a national system of grants, which I find quite shocking.

Would you please respond to those issues.

Ms. Martha Nixon: Let me take a crack at that.

What we've tried to say to you through the presentation is that we are signalling that we're certainly aware that there's a growing problem. We think the measures we have at the moment, which are the three grants up front that I talked about, plus the additional grant for students with dependants that will be added—if you take that through the interest subsidy period that they have when they're in studies, plus interest relief at the end and a six-month grace period, that's what's currently in place.

What we're trying to determine now is, if you're trying seriously to get at the issue of debt management, how do you in fact make a balanced attempt to do that? Are you better off putting money in upfront grants, or are you better off looking at debt forgiveness or debt remission of some kind at the end?

We should also be aware that we have to deal with issues like making students aware of what's out there. We know that 50% of students who fall into problems around bankruptcy are not accessing right now the currently available interest relief program that we have. So we have a problem in getting people to know that that program is actually out there.

I think also we can look at other measures to start making people aware and having them accessing learning savings vehicles, RESPs and the kinds of things we can do in that way.

We are very seriously trying to figure out what is the best balance. If you don't have unlimited subsidy dollars—and they are not unlimited—if you look at what the provinces are doing and what the federal government can do, what we're trying to do right now through this discussion we're having with stakeholders and through our own modelling efforts through discussions with our federal colleagues is find what is the best mix of program elements that will give the most effective debt management program you can have.

We welcome your position, your views on it. We are looking at a number of different possibilities, which we've outlined, in the deck, and we're trying to come up with some conclusions.

Ms. Libby Davies: I would like to have a brief follow-up.

I agree that lack of information is part of this issue. I raised earlier just how difficult it is for students to get information at a local level. I know that other departments provide briefings to MPs if your constituent asks—whatever the subject is. I don't think Canada Student Loans does that through HRDC. That would be quite helpful.

One of the concerns I have is that as we get into this discussion, and in fact even from the throne speech, where we saw the announcement of the millennium fund, it appeared as if there was no discussion whatsoever with the academic community, the student community or other people in the field about this fund being set up. So I'm glad to see that you're talking about having consultations. But are they only going to be at a national level? Will they also be at a regional level, or will they just be here in Ottawa?

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Ms. Martha Nixon: We have had continuing discussions, very intensively, over the past four and a half years with a group we call the National Advisory Group on Student Financial Assistance, which is composed of national associations. But these national associations come to their positions through, hopefully, constituent-gathering, opinion-gathering processes.

Included in that group is the Canadian Federation of Students, Canadian Alliance of Student Associations, Canadian Graduate Council, the disabled students group NEEDS, the ACCC, and a wide variety. I won't go through them all, but there is a wide variety of stakeholders in the education area. So we rely on them very heavily. We meet with them about three times a year.

We also have continuing conversations with the provinces through a joint committee that is assisted through the Council of Ministers of Education Canada. As well, we have an ongoing working group with the bankers we deal with. In the middle of November, we will try to put them all in a room together for about a day and a half to try to see whether or not, with the good leadership of a strong facilitator, we can come up with some areas of consensus. We have an ongoing process, and we do think it's important.

Ms. Libby Davies: Are members able to attend and observe something like that?

Ms. Martha Nixon: We have been trying to keep it relatively quiet, but we have invited a member from this committee and a member from the post-secondary education committee of the Senate. So yes, you would be welcome to have a representative at that meeting.

Ms. Libby Davies: Well, Mr. Chairman, I would like to request, if we could be advised of that, whether it's possible for a representative from this committee to attend. It's not that we have to be actively involved in the discussion. It's for the stakeholders, but even to hear the discussion and to be able to observe it would be very helpful.

The Chairman: Thank you, Ms. Davies. Mr. Anders.

Mr. Rob Anders: Yes, I have three questions that I'm just going to tie together.

One, what are your thoughts in terms of tying student loans to social insurance numbers in order to decrease defaults?

Second, I wonder whether or not income-contingent repayment for the plans is having any progress with the provinces. How are they reacting to any proposals? What are your options? What are you considering? What are you talking to them about?

Third, what are the plan numbers? I notice, for example, that you use an example under income-contingent repayment, ICR, in your income-related repayment page. You talk about 10% of income above $15,000. I'm wondering if that is the plan you are talking about, or if it is a number out of the air. What exactly you are thinking about in that area?

Mr. Thomas Townsend: The first question relates to the use of social insurance numbers as a way of verifying income. This is just a clarification.

Our experience so far has been that the issue with respect to student debt is not one of abuse. Individuals wish to repay their loans, but in fact they find themselves in circumstances in which they can't. So the mechanisms that are currently available to us in recovery appear to be doing a good job.

I'll move briefly to the broad issue of income-contingent repayment. The reason we would want to move toward income-contingent repayment is that this kind of scheme offers individual borrowers protection against default. So you essentially set that up in return for a percentage of gross income being paid such that, in periods when an individual's income would fall below a threshold—the amount you mentioned was $15,000, which is the poverty level—there would be no payment required. For amounts above a threshold level, it's a percentage of income. In the example you're using, 10% of gross income is used.

So the individuals would not find themselves in default and would not find the banks turning the loan over to a collection agency, but would in fact use their purchasing power over the course of a longer period of time, normally 20 or 25 years, to repay the loan.

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This feature of default protection is one that's very interesting, from our perspective. It's equally unfortunate, though, that there is a great deal of misunderstanding about income-contingent repayment schemes. They have been associated in other countries with rapid increases in tuition, so student groups are very nervous about them.

Mr. Rob Anders: I just wanted to embellish a little bit. I know people who are abusing the student loans programs, so I mean.... You say, for example—

The Chairman: Name them.

An hon. member: Have you reported them?

An hon. member: Send in their names.

Mr. Rob Anders: You see, that's the thing. You say it's not being abused, but I know in my time in university there were students who did abuse the program. What I'm trying to do is to find out basically what discussions are going on in terms of this, what your progress is with the provinces, and if we're going to see any movement on this.

Ms. Martha Nixon: I think it's fair to say that we're very interested in the abusers. We think that they're a minority, if that's what in fact is going on. In terms of how we go at that, I think there's no one simple answer. In a sense, you have to give people incentives to pay.

In trying to look at the measures we have discussed over the course of the presentation, ICR being one possible element, we hope that if people feel that the debt isn't going to be as crushing as perhaps it now seems, they will make efforts to pay. And if we can assist them in that process, for those who really have difficulty and have been making an effort to pay, we think some possibility of help is possible.

You asked about the provinces and what options we're talking about with them. The provinces have a very great deal of interest in seeing some solutions to this problem. Most of them have debt forgiveness programs of one sort or another, which are based on thresholds of debt, and they will pay down the debt above that threshold.

We are having discussions ongoing with the provinces about what, in terms of the different options, they would be deem to be acceptable in light of their own programs, and what would bring them closest to some possibility of trying to have a harmonized program federally and provincially. We haven't seized on a final outcome yet, and we're hoping that we will within the next number of months. I think it's fair to say that all of the options we have described in the paper are currently on the table and are being discussed with the provinces.

Most of the provinces, other than Ontario, have expressed some disfavour for the idea of a pure classic income-contingent scheme, but I think a lot of them recognize that there is some good reason to look at trying to link the high-debt, low-income ratio to some part of the solution.

The Chairman: Thank you, Ms. Nixon.

I'm going to move along here. I'd like us to compress our questions, and similarly our answers, so that we can get as many in in the 10 minutes we have remaining.

Ms. Brown.

Ms. Bonnie Brown: Thank you.

I'd like to home in on this issue of private institutions. First of all, the number of borrowers there have doubled very recently. Then in the next slide you raise the question of institutional designation. I think there's a high default rate there, too, coming out of that group.

Who designated those institutions in the first place? Did we as the federal government? Or did we allow the provinces to do that, in which case why are we dealing with them when we know that, for example, the employment rate coming out of universities and community colleges I think is much higher?

I'm very concerned about little private enterprise people who start up and say they now have a learning institution, and get people in there. They get loans, and then really there isn't a job for them anyway. I'm thinking of a school of hairdressing, a school of home decorating—all that kind of thing.

A witness: Provinces designate the institutions. Provinces are also recognizing that perhaps their past practices with respect to designation have been too generous, so we're working to rectify that.

Ms. Bonnie Brown: Great.

I want to compliment you on your goal to try to get this $3,000 grant for students with dependants. I think that's important.

It says that Ontario CSL recipients are up, B.C. is up, Newfoundland is slightly up, all others are down. My question is, is it because those other provinces are more generous with grants, and the kids don't need loans as much, or is it because the fear of the big debt burden at the end is actually dissuading people from attending post-secondary institutions?

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Ms. Martha Nixon: I think it's probably part of both of those things. I think there are a number of elements. A lot of the provinces have moved out of a granting kind of situation and have moved to a loan situation in the last three or four years. So I think you've seen all of those elements play a part in some of the diminishing enrolment.

Some of it probably has to do with mobility as well and where students can afford to go and where they move to. But I don't know that it's absolutely clear—

Ms. Bonnie Brown: There's more here than generosity of the provinces.

Ms. Martha Nixon: I suspect.

Ms. Bonnie Brown: That leads me to my last question, Mr. Chairman.

I'm very, very concerned about this whole issue that the federal government lends about 60% of it, and then the province has the right to decide if or how much they're going to give of the remaining 40% of already decided need. It suggests to me that there will be students who will get a federal loan, and maybe get another 10% of what they need from the province, and are therefore relegated to living in poverty, maybe not even eating properly or being housed properly, in order to fulfil their goal of getting a university education.

What I want to say to you has to do with your program and has to do with other human resources issues, but it's a larger question. It's all this to do with working federal-provincial partnerships, which I'm developing less and less faith in, mainly because I see in some of the provinces governments with such totally different value sets than the one that motivates the federal government. So I think, how can you possibly make workable partnerships with people who don't believe the same things you believe, in other words, if their main thrust is putting the most money into catching the defaulters as opposed to funding needy students?

Do you know what I mean? We have a tremendous spectrum of political opinion here, and how can you work with these people if their basic values are totally different?

Ms. Martha Nixon: I think in the discussions we've had with the provinces over the past couple of years it's clear that both of our objectives are to try to assist students to manage debt. There's no question that no government wants to see defaults and abuse, and there is some necessity to try to come to grips with those issues. But in terms of the intentions of the provinces, I think they are genuinely wanting to see this as a public policy issue around debt that we have to settle together.

Ms. Bonnie Brown: Is it debt, or making sure they have enough money to live on and do their schooling? I think we're focusing on debt too much, actually.

Ms. Martha Nixon: On the 40% that the provinces offer, generally speaking, it would be less than 40% if there wasn't 100% need. I think it's probably unfair to think they are depriving a student and giving less than 40% if there's 100% need.

The Chairman: Thank you, Ms. Nixon and Ms. Brown.

Mr. Crête.

[Translation]

Mr. Paul Crête: First of all, I would just like to remind you that Quebec has a separate system of loans and grants and it might be interesting for members to take a look at how this system operates. There are some very positive elements that address Ms. Brown's concerns.

We have here a breakdown of the 1996-97 departmental expenditures showing programs for older workers, for disabled persons, for youth and so forth. These are listed under the heading "Program Funds". The programs listed reflect the various components of a human resources policy. Perhaps one or two programs have not been listed, however...

Do you currently measure the efficiency of each of these programs against the objectives? The committee has one very important concern. In terms of employment, how do you maximize human resources? For example, in the case of older workers, we need programs that correspond to their needs. The same applies to young people.

Can you tell me if mechanisms are in place to evaluate each of these programs, in particular the POWA program which ended on March 31, 1997? Have any steps been taken to create a new program or to come up with one that is different, or better suited to the very specific needs of 50-year-old or 55-year-old workers who have few opportunities to re-enter the work force.

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[English]

Mr. David Good: On the question of the evaluations Mr. Crête has raised, yes, formal evaluations of these programs are undertaken, for instance for the Atlantic groundfish program, the POWA program, which you've mentioned, VRDP and others. We have an evaluation unit within the department that is very active. We work in close collaboration with the Auditor General. These evaluations are public documents and we would be more than pleased to make various evaluations that have been undertaken on all these programs available to the committee. We do the evaluations on a regular, ongoing basis and examine what the results of those are.

On the question about POWA, we do not have plans for a replacement POWA program. In the context of the program review reductions, we had indicated to provinces that this program, which was available only to a few provinces and which, because of the way the POWA designations were made, led to a significant number of inequities...that in the context of our labour market agreements and transfers to the provinces a large set of instruments is now available to provinces, including the Province of Quebec through their agreement, to undertake a number of these initiatives within that context. At this point we do not have further plans for the extension of POWA beyond the additional extension which was provided to provinces to meet the existing backlog they faced.

The Chairman: Mr. Crête, very quickly.

[Translation]

Mr. Paul Crête: You mentioned that as a result of transfers to the provinces, Quebec could now undertake a number of initiatives. Will you acknowledge then that POWA applies specifically to persons who no longer qualify for active employment measures, because the program has been transferred to the province. We're talking about passive measures and in this case, what we should be using is the traditional employment insurance fund. According to the current breakdown of responsibilities, this is a federal matter. Eighty per cent of workers aged 55 and older who work in plants no longer qualify for active employment measures.

[English]

Mr. David Good: In the context of the transfer there are a number of very active programs in the area of wage subsidy, in the area of skill development—skills, loans, and grants—in the area of employment measures.

The last point is simply that they also apply to what we call the “reach-back clients”, those people who have been on employment insurance over a period of three years. So it's not just those who are currently on EI.

The Chairman: Mr. Dubé.

Mr. Jean Dubé: Thank you, Mr. Chair. I'll be very brief.

My question has to do with accessibility to post-secondary education by all Canadians. I'm very worried about the rising cost of post-secondary education and what we see with the problems students are having to repay these loans, and the increase in bankruptcies. If we look at 1990, the cost of post-secondary education was $8,000, in 1996-97 between $22,000 and $25,000. In the year 2015...I was fortunate enough to buy a scholarship fund for my child, and they are predicting it will be around $100,000. Not all Canadians have an opportunity to buy these scholarship funds, and I'm very worried about accessibility.

[Translation]

What were the reasons behind deciding to offer the choice of one or two disbursements per semester? How has this helped to reduce student debt? In your opinion, is this not merely an added administrative burden for your department?

Mr. Thomas Townsend: Students tell us that more disbursements help them to budget better. Therefore, we are actively looking into this.

[English]

The Chairman: Mr. Dubé, I appreciate the efficiency of your questions.

We are out of time now. However, given the magnitude of the subjects encompassed by our three witnesses, I would like to thank them for being here today. I would also like to suggest we may want to have you back before Christmas, maybe immediately following the minister. I'll have the clerk contact you. And, Ms. Nixon, the clerk will see you about the reference meeting you have.

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Thank you very much. I appreciate your time. I'm informed that there's another committee coming in here at 11.30 a.m. so we have to vacate the premises.

We are now adjourned.