HUMA Committee Report

The members of the Standing Committee began to ask:

What should be the objectives of the Department?

How do these relate to the mandate of the Department?

What is the organizational structure and the ‘tools’ that the Department requires to meet its objectives?

When Human Resources Development Canada was created seven years ago, it reflected the belief that Canadians would benefit from the horizontal and integrated management of a broad range of policies and programs that intersected — labour, employment and training, and social development. A super ministry like HRDC was seen as the way to ensure cohesion and consistency. The Department was put together in 1993 out of parts, or all, of five previous government departments. As a result of the 1993 reorganization, policies and programs that had previously been the responsibility of five different ministers and managed by five separate deputy ministers became the responsibility of one minister who is supported by one deputy minister.

In the current fiscal year, HRDC has responsibility for approximately $60 billion or roughly 45% of federal government spending. Compared to other federal departments HRDC will spend 5.5 times more than National Defence ($11 billion), 26 times more than Agriculture and Agri-Food ($2.3 billion), 30 times more than Health Canada ($2 billion), and 100 times more than Environment Canada ($0.6 billion).

Confronted by these statistics, the preliminary conclusion might be that HRDC's administrative problems are a result of its size. The Committee feels, however, that this conclusion oversimplifies the situation. However, unlike many other large organizations that have a unity of purpose, HRDC does not.

As it stands, HRDC is most easily characterized by its diversity: of purpose, of programs and criteria, as well as of clientele. Our study of grant and contribution programs demonstrated that this diversity has led to a lack of consistency or even conflict among some of these elements. For example, we found that no single accountability mechanism or administrative response to the grants and contributions issue can accommodate the fact that some programs functioned in one manner and others in another.

We began asking ourselves if HRDC’s administrative problems extended beyond poor management, along with a lack of resources and tools to deliver adequately grants and contributions. In this regard, most of us suspect that a large part of the problem is rooted in HRDC’s organizational structure which results in its inability to satisfy the diverse clientele that this department is expected to serve in both its daily operations and its medium and long-term policy development.

Our overall work as a Committee and our study of grants and contributions have led us to observe that the positive synergies that were anticipated by the amalgamation of five departments in 1993 have failed to materialize. The Committee has seen evidence of dysfunction, as well as the ghettoization and marginalization of some issues — for example, homelessness, Aboriginals and people with disabilities.

Prior to 1993, five departments and five ministers had the opportunity to participate in the development of policies now falling under the mandate of HRDC. In the pre-HRDC years, policy debates occurred among these departments and ministers. Obviously, if they could not agree, Cabinet would discuss the issue and make a decision. After the amalgamation of 1993, these debates, tradeoffs, and frequently, decisions, occurred within HRDC, a single organization which has a highly hierarchical command and control structure. Is it appropriate that discussions and decisions about important public policy issues take place within a single organization? Where should the debate and decisions take place? Within the lower levels of the public service? Within the ranks of the senior public servants in the Department and central agencies? Within Cabinet? In terms of the latter, how can a single minister be expected to support adequately the disparate policy objectives pursued by a department like HRDC?

As members of the Standing Committee on Human Resources Development and the Status of Persons with Disabilities, we have had problems both in dealing with the diversity of the activities of the Department and in ensuring that the Department is accountable to Parliament. Because of the limited time available to parliamentary committees, we have had to leave unscrutinized many of the important issues related to HRDC — for example, the various transfers to the provinces and territories. HRDC's estimates, both the Report on Plans and Priorities as well as the Performance Report, contain less detail than those of many other departments because of the number of issues included in them. The estimates documents were, for example, of extremely limited value in our effort to gain information about HRDC's grant and contribution programs. All Members of the Committee and of Parliament would benefit from better oversight of the Department's spending and accountability. In turn, better parliamentary scrutiny would benefit Canadians who deserve to know that their money is being spent appropriately. If this Committee cannot adequately hold the Department accountable to Parliament, we question whether a single minister can adequately be held accountable for 45% of the spending by the federal government.

In order to accommodate the interests of Members of Parliament and HRDC’s mandate, this Committee is the largest of all the standing committees of the House of Commons. We have formed two sub-committees — one on children and youth, another on persons with disabilities as one means of dealing with the diverse mandate that we have as a Committee. We still, however, feel that we have not been able to study and make recommendations on the plethora of issues that we would like to follow — for instance, labour, seniors, homelessness, the new world of work and financial assistance for students in post-secondary institutions. Both the government and opposition members could better examine the policies and programs of a department that had a less diverse mandate.

During their appearances before the Committee, we have found the officials of HRDC to be very internally focussed. They do not seem to understand the need for appropriate and timely information to Parliament. Our meetings on grants and contributions showed the Committee that the Department appears to be overly bound by its own past practices and spends too much time, energy and resources justifying them. Part of HRDC’s mandate is to broker change. This is only possible by listening, learning and applying the knowledge of others. HRDC should be searching for innovative techniques not defending old models and activities. When we asked outsiders — experts from private foundations, other granting agencies and universities about how they dealt with similar problems in funding grants and contributions, we heard that there are many alternatives that were never mentioned by HRDC in its several appearances before us.

Increasingly, the walls between policy sectors have become more porous as a way of dealing with the challenges of globalization and an increasingly well-educated population. In this context, social policy remains important. As Members of Parliament, our contact with Canadians has led us to believe that HRDC should lead in devising policies and programs to deal with social issues. Unfortunately, we perceive that the driving force behind the HRDC is economic — namely, employment. This means that certain policy issues, for example, seniors, have been overlooked. Other complicated social policy areas, like children's issues and homelessness, have an employment-related tint to them.

The Human Resources Investment Branch (HRIB) provides one concrete piece of evidence that the social element is problematic in the Department's view of itself. HRDC's estimates state that HRIB's key commitment is to "provide Canadians with an effective and efficient labour market." Yet, the Department uses this commitment as its response to the objective in the Speech from the Throne to "build a better quality of life for all Canadians — for our children, ourselves and our neighbours." Undoubtedly, a better quality of life involves more than helping people to find jobs. HRIB deals with literacy, people with disabilities, children, Aboriginal people. Several of our witnesses told us that the employment focus of HRDC skewed their social development activities and did not adequately take into account their role as agents of change within their communities.

Because there is a void at the federal level when it comes to dealing with a range of policy issues, the Committee, and Canadians generally are left with unanswered questions: What does this employment focus mean for children who have not started work, or for the seniors who have finished working? How can a federal department that is based on an economic paradigm deal with social issues? Do Canadians want to be merely considered as "human or economic resources" or do they want to be considered as citizens? Has the opportunity created by the formation of HRDC been lost by design or by default? Does the federal government want a role in social policy? In today's circumstances, what is the best way to deal with children, youth, seniors, or people with disabilities? Are issues like homelessness, employment-related only?

Given the Committee's conclusion that HRDC’s structural makeup has proven unsatisfactory, we believe that the federal government should reposition itself so that it can better address issues that concern Canadians but that cut across existing departmental boundaries. The circumstances that led to the formation of HRDC in 1993 are not the circumstances of today; homelessness was not the serious issue that it has become. There is, for example, no place in government that integrates the social condition of Canadians with their health needs. The social determinants of health are recognized as one of the factors that strongly influences the health of Canadians and social programs and policies structured by HRDC have an undoubted impact on these. Several of our witnesses spoke about developing healthy communities and talked about community economic development. Strong communities are developed through training and jobs but also through a host of other measures.

When we began our study of grants and contributions, this Committee never intended to get into a discussion about redesigning HRDC. But we have come to the conclusion that we could not adequately deal with these transfers without taking a broader look at what HRDC does and how it is doing it. The Committee believes that it is time to rethink the whole concept of a department of human resources development in light of changing conditions and current needs. The appointment of more secretaries of state within the existing Department will not solve the problem. Even with more secretaries of state, all the public servants within the Department will still report to the deputy minister of HRDC and the minister of Human Resources Development Canada will still have responsibility for all departmental spending and activities.

The solution may lie in creating more focused and less diverse departments. What could be the best machinery? For example, would labour, employment and employment insurance combined in a single department provide more consistency? A more focussed operation might make it easier for specialists for example, to do a better job in evaluating business plans for third-party, private sector operations. Would it make sense to have a specialized department (as in Britain) to oversee and manage statutory transfers to individuals (Old Age Security, Guaranteed Income Supplement, Canada Pension Plan and Canada Pension Plan: Disability)? This narrower mandate might assist in the management of the systems and information required by these programs.

This division, however, does not address the issue of putting in place an adequate structure to deal with horizontal issues that relate to social policy and social development. Is it time to recreate a central agency, like the Ministry of State for Social Development, that can oversee and coordinate the activities of all federal departments and agencies with mandates related to social issues? Such a structure might house a small program branch for demonstration projects and related activities.

This Committee knows that it has not received adequate evidence to weigh the arguments in favour of alternatives to the current structure, but we agree that a change is required. We also agree that unless the management culture changes and management approaches and practices improve, we may end up, like the sorcerer's apprentice, with several badly managed replacements.

We recommend that:

30. The government should divide HRDC into several more homogeneous and focused structures.