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Section III
Supplementary Information

Financial Performance Overview Human Resources and Social Development Canada

In 2007-2008, the department was authorized to spend $84,867.4 million or $167.0 million more than the consolidated planned spending of $84,700.4 million. The variance is explained by:

• An increase of $243.8 million in loans disbursed under the Canada Student Financial Assistance Act is mainly due to the actual gross amount of repayments being lower than anticipated as a result of a decrease in defaulted loans. In addition, the loans disbursed where slightly over the projection;
• An increase of $80.5 million in grants and contributions mostly related to:
  • An increase of $44.3 million related to new funding for Canada Summer Jobs 2007 under the Youth Employment Strategy to provide students with skills and work experiences to help them make an effective transition to the labour market;
  • An increase of $25.1 million for the re-profiling of funds from 2006-2007 to 2007-2008 for the Homelessness Partnering Strategy. This re-profile is necessary to honour federal/provincial commitments and publicly disclosed funding allocations to municipalities and community groups;
  • An increase of $10.0 million in new funding for Enabling Accessibility Fund to support community-based projects across Canada that improve accessibility and enable Canadians, regardless of physical ability, to participate in and contribute to their community and the economy;
  • An increase of $7.2 million for additional funding for Cree Regional Authority in respect of the Government of Canada's obligations under the James Bay and Northern Quebec Agreement relating to job placement, recruitment services and other training programs;
  • An increase of $6.9 million in new funding for the expansion of the New Horizons for Seniors Program announced in Budget 2007;
  • An increase of $4.4 million to expand and extend the Aboriginal Skills and Employment Partnership Program that provides training, skills development, and employment opportunities to Aboriginals;
  • Offset by decreases of :
    • $10.4 million due to the deferral in implementing activities of the Targeted Initiative for Older Workers program;
    • $3.0 million for a transfer to Public Works and Government Services for the Surplus Federal Real Property for the Homelessness Initiative;
    • $2.2 million for the Foreign Credential Recognition Program reprofiled to a future year to fully develop projects with stakeholders related to the launch of the Foreign Credentials Referral Office;
    • $1.7 million for the Sector Council Program reprofiled to future years due to delays in implementing the forestry sector council.
• An increase of $13.3 million in net operating expenditures mainly due to:
  • Operating budget Carry-forward from 2006-2007 ($27.8 million);
  • A transfer from Public Works and Government Services for accommodation costs, programs, and activities related to the Public Access Programs sector ($16.1 million);
  • Funding to help employees meet immediate skills shortages and strengthen the integrity of the work permit system through improvements in the Temporary Foreign Workers Program ($15.9 million);
  • Operating funds to support the Government Advertising Programs ($14.1 million);
  • Collective agreements increase ($14.0 million);
  • New funding for the implementation the EcoAuto rebate program ($6.3 million) to encourage the purchase of more fuel efficient vehicles;
  • Other items ($4.9 million) such as funds for the expansion of the New Horizons for Seniors Program ($1.3 million), funding for the continued implementation of the Public Service Modernization Act ($0.9 million), funds for Canada Summer Jobs ($0.7 million), and for Aboriginal Skills and Employment Program ($0.5 million);
  • Offset by decreases for:
    • Reduced operating requirements as a result of advance payments previously made under the Indian Residential Schools Settlement Agreement ($82.6 million);
    • Planned spending for the Wage Earner Protection Program for which resources were not requested in 2007-2008 ($3.2 million).
• An increase of $7.1 million in Specified Purpose Accounts mainly due to an increase in Canada Pension Plan Costs offset by a decrease in Employment Insurance costs. The increase in CPP costs is mainly due to an increase in benefits and to the change in the presentation of CPP Investment Board administration costs. The decrease in EI costs is mostly attributable to a revised forecast of Part I benefits.
• An increase of $0.4 million in Vote 7 for the write-off of debts due to the Crown for unrecoverable student loans.
• Offset by a net decrease of $178.1 million in the statutory payment authorities attributable to:
  • A decrease of $104.3 million in Old Age Security benefit payments which include the Old Age Security pension, the Guaranteed Income Supplement and the Allowance. The decrease can be attributed to several factors. In particular, the average monthly rate of the Old Age Security pension for 2007-2008 was less than forecasted due to a greater proportion of partial pensions;
  • A decrease of $74.1 million in Payments related to the direct financing arrangement under the Canada Student Financial Assistance Act, mainly due to a decrease in the alternative payments payable to non-participating provinces, resulting from the fact that defaulted loans, which are a component of the calculation of those payments have dropped significantly. There was also a slight decrease in Service Provider Fees. The Program also saw an increase in the utilization of debt management measure Interest Relief and Debt Reduction in Repayment offset by a decrease in Loans forgiven;
  • A decrease of $28.7 million for Wage Earner Protection Program which was not implemented in 2007-2008;
  • A decrease of $27.2 million in Liabilities under the Canada Student Loans Act is due to the fact that actual spending is presented net of the recoveries on claims while the planned spending includes the forecast expenditure of claims payments;
  • A decrease of $19.5 million in payments of compensation to government employees and merchant seamen due to a Supreme Court decision on chronic pain in Nova Scotia which created additional recoveries in 2007-2008 from the various Crown Corporations and Other Government Departments;
  • A decrease of $16.6 million for the provision of funds for interest payments and liabilities in the form of Risk Shared loans under the Canada Student Financial Assistance Act. The variance is mainly due to lower than expected utilization of the debt management measure Debt Reduction in Repayment with respect to the risk-shared loan portfolio. Also, the actual spending is presented net of recoveries on Put-Backs while the planned spending includes the forecasted expenditure of Put-Backs;
  • Offset by increases of:
    • $39.7 million in Canada Education Savings Grants, mainly due to changes announced in the 2007 budget that increased the maximum annual contribution qualifying for the 20 per cent basic CESG from $400 to $500 as well as the Department's efforts to publicize the program;
    • $25.4 million in Canada Study Grants, is the result of higher than expected take-up of the Canada Access Grant Program and an extraordinary payment to British Columbia regarding Canada Study Grant to correct an underpayment to the province;
    • $14.3 million for Universal Child Care Benefit due to a slight increase in the projected number of recipients and a slight increase in take up rates;
    • $10.8 million for Canada Learning Bond, mainly due to the Department's efforts to publicize the program to the Canada Learning Bond's target population;
    • $2.1 million related to other items such as contributions to employee benefit plans.

The actual consolidated expenditures of $84,504.4 million were $363.0 million lower than the total consolidated authorities of $84,867.4 million. This was mainly due to:

• Grants and contributions expenditures being $212.9 million less than the authorities for:
  • The Apprenticeship Incentive Grant ($60.1 million) due to the fact that 2007-2008 represented the first full year of program delivery and thus eligible applicants were becoming aware of the program and the application process. Key activities associated with the National Awareness Campaign were delayed by a few months impacting awareness and take-up of the grant. Estimates of eligible recipients are also under review;
  • The Homelessness Partnering Strategy ($44.9 million), this amount is to be re-profiled to 2008-2009 to ensure that funds will be available for proposals that are developed for activities to alleviate homelessness;
  • Targeted Initiative for Older Workers ($29.6 million) due to delays in Provincial and Territorial implementation, of which $24.3 million was reprofiled into 2008-2009;
  • Adult Learning, Literacy and Essential Skills Program ($22.2 million) due to the deferral of projects, of which $19.0 million was reprofiled into future fiscal years;
  • Youth Employment Strategy ($17.4 million) due to delays in implementation of Skills Link and Career Focus projects, as well as the inability of some employers funded under the Canada Summer Jobs to fill all the positions for which they were approved for funding and because some students left their jobs early;
  • Enabling Accessibility Fund ($10.0 million) due to a re-profile of funds into future years;
  • Workplace Skills Initiative ($8.1 million) due to the deferral of projects into next fiscal year, of which $4.9 million was reprofiled into future fiscal years;
  • Aboriginal Skills and Employment Partnerships ($3.8 million) due to delays in project proposal start dates, of which $3.0 million was reprofiled into future years;
  • Labour Market Agreements for Persons with Disabilities ($3.7 million) due to funds being kept in reserve for the Territories, who have not as yet participated in the program;
  • Social Development Partnerships Program ($3.0 million) due to re-profiles of funds to future years, administrative delays in issuing Call for Proposals, delayed start dates for new projects and lapsed funding by project recipients;
  • Education Savings Community Outreach ($2.4 million) mainly due to a reprofile to future years due to the transition of responsibility and repatriation of funding from the National Office of Learning and Literacy to Canada Education Savings Program in April 2007 and the drafting and approval of new Terms and Conditions.
  • Foreign Credential Recognition ($1.8 million) is due to the deferral of project activities into next fiscal year;
  • Sector Council Program ($1.6 million) is due to deferral of projects into next fiscal year;
  • Opportunities Fund for Persons with Disabilities ($1.4 million) due to the limited ability to engage in longer term planning and activities;
  • Labour Management Partnership Program ($1.2 million) due to a lower than projected number of approved projects;
  • Other lapses ($1.7 million).
• The actual expenditures were $119.3 million less than the authorities in the Specified Purpose Accounts. The variance is related to :
  • Employment Insurance (EI) Account ($141.7 million):
    • $62.8 million in Employment Insurance Part I; Employment Insurance benefits declined in 2007-2008 due to a decrease in the number of beneficiaries, consistent with lower unemployment;
    • $39.8 million in Employment Insurance Part II out of a total budget of $2.136 billion, due to delays in the implementation of projects and lower than expected expenditures by some projects;
    • $18.2 million in administrative costs, mainly due to a lapsed surplus of $27.3 million offset by $7.6 million related to higher than forecasted EI administrative costs recoveries from Canada Revenue Agency;
    • and by $20.9 million in doubtful accounts, mainly due to a decrease in the amount of write-offs in 2007-2008 compared to 2006-2007;
  • Offset by $22.4 million for the Canada Pension Plan Account due to administrative costs being higher that forecasted for the CPP Investment Board.
• A net operating lapse of $30.7 million related to $10.2 million in frozen resources and $20.5 million in general lapse. The frozen items are mainly attributable to a reprofiling of funds for Surveys to 2008-2009 ($6.3 million), a year-end conversion factor between salary and non-salary ($3.0 million).

Canada's Performance

Canada's Performance is an annual report to Parliament on the federal government's contribution to Canada's performance as a nation, highlighting both strengths and areas for improvement. As a companion piece to the Departmental Performance Reports, the report provides an overview of how the performance of individual departments and agencies contributes to broader, government-wide outcomes in the following key policy areas: economic affairs, social affairs, international affairs, and government affairs.

These strategic outcomes developed by Human Resources and Social Development Canada contributed to the following government-wide outcomes as set out in Canada's Performance 2007.

Canada's Performance

Government of Canada Outcome
Economic Affairs	Income Security and Employment for Canadians Strong Economic Growth An Innovative and Knowledge-based Economy A Fair and Secure Marketplace
Social Affairs	Healthy Canadians Safe and Secure Communities A Diverse Society that Promotes Linguistic Duality and Social Inclusion
International Affairs	A Prosperous Canada through Global Commerce

For more information on Canada's Performance 2007, please visit:
http://www.tbs-sct.gc.ca/reports-rapports/cp-rc/2006-2007/cp-rctb-eng.asp

Canada's Performance

Department Link to the Government of Canada Outcomes
	Actual Spending 2007-2008 (in millions of dollars)
	Budgetary	Non-budgetary	Totalc	Alignment to Government of Canada Outcome Area
Strategic Outcome: Policies and programs that meet the human capital and social development needs of Canadians
• Policy, Research and Communication	199.3	-	199.3	√ Income Security and employment for Canadians
Strategic Outcome: Enhanced Canadian productivity and participation through efficient and inclusive labour markets, competitive workplaces and access to learning
• Labour Market	14,908.3	-	14,908.3	√ Income Security and employment for Canadians
• Workplace Skills	139.4	-	139.4	√ An innovative and knowledge based economy
• Learning	1,184.3	1,099.5	2,283.8	√ An innovative and knowledge based economy
Sub-Total	16,232.0	1,099.5	1 7,331.5
Strategic Outcome: Safe, healthy, fair, stable, cooperative, productive workplaces and effective international labour standards
• Labour	239.3	-	239.3	√ A Fair and Secure Marketplace
Strategic Outcome: Enhanced income security, access to opportunities and well being for individuals, families and communities
• Social Investment	59,902.7	-	59,902.7	√ Income Security and employment for Canadians
• Children and Families	2,482.1	-	2,482.1	√ Income Security and employment for Canadians
• Housing and Homelessness a,b	116.6	-	116.6	√ Strong Economic Growth
Sub-Total	62,501.4	-	62,501.4
Strategic Outcome: Achieve better outcomes for Canadians through service excellence (Service Canada)
• Seamless, Citizen-Centred Service	2,581.6	-	2,581.6	√ Government affairs
• Integrity	903.9	-	903.9	√ Government affairs
• Collaborative, Networked Government Service	228.4	-	228.4	√ Government affairs
Sub-Total	3,713.9	-	3,713.9
TOTAL	82,885.9	1,099.5	83,985.4
aA new program, the Homelessness Partnering Strategy, was announced in December 2006 and is funded for two years (2007-2008 and 2008-2009). bWithin the porfolio, Human Resources and Social Development Canada focuses on Homelessness and Canada Mortgage and Housing Corporation focuses on housing. The Program Activity Architecture has been updated for 2009-2010. c Other costs of $519.0M such as Workers' Compensation and EI/CPP charges and recoveries are excluded from the Actual expenditures presented.

 

Table 1: Comparison of Planned to Actual Spending (including FTEs)

(millions of dollars)	2005-2006d Actual	2006-2007 Actualc	2007-2008
			Main Estimates a	Planned Spending	Authorities	Actual
Program Activitiesb
Policy, Research and Communication	n/a	211.6	196.6	197.5	210.9	199.3
Labour Market	n/a	555.2	578.1	577.3	626.6	569.9
Workplace Skills	n/a	101.8	209.0	213.7	220.9	139.4
Learning	n/a	1,047.6	1,244.3	1,244.3	1,215.3	1,184.3
Labour	n/a	232.8	239.3	271.5	247.2	239.3
Social Investment	n/a	30,675.8	32,492.2	32,492.2	32,393.6	32,365.8
Children and Families	n/a	2,434.4	2,481.2	2,481.2	2,484.5	2,482.1
Housing and Homelessness	n/a	170.8	144.5	144.5	165.6	116.6
Seamless, Citizen-Centred Service	n/a	631.9	2,475.0	2,479.6	2,597.2	2,581.6
Integrity	n/a	908.6	1,028.8	1,029.6	907.3	903.9
Collaborative, Networked Government Service	n/a	266.6	228.2	228.4	229.9	228.4
Total Gross Expenditures	33,724.8	37,237.1	41,317.2	41,359.8	41,299.0	41,010.6
Less: Respendable revenues	1,695.6	1,639.0	1,711.9	1,711.2	1,734.3	1,689.6
Total Net Expenditures	32,029.2	35,598.1	39,605.3	39,648.6	39,564.7	39,321.0
Non-Budgetary
Loans disbursed under the Canada Student Financial Assistance Act	1,331.3	1,231.9	855.7	855.7	1,099.5	1,099.5
Total Department	33,360.5	36,830.0	40,461.0	40,504.3	40,664.2	40,420.5
Plus: Specified Purpose Accounts
Employment Insurance	16,050.3	15,814.6	-	16,423.6	16,204.9	16,063.2
Canada Pension Plan	25,439.2	26,689.2	-	27,881.1	28,113.3	28,135.7
Other Specified Purpose Accounts	51.4	48.6	-	45.3	45.2	45.2
Departmental Employee Benefit Plan recoverable from Employment Insurance Account and Canada Pension Plan	(169.9)	(157.3)	-	(153.9)	(160.2)	(160.2)
Consolidated Total HRSDC	74,731.5	79,225.1	40,461.0	84,700.4	84,867.4	84,504.4
Less: Non-Respendable Revenues	554.0	682.1	-	675.9	781.0	781.0
Plus: Cost of services received without charge	32.5	34.7	-	34.5	35.8	35.8
Net cost of HRSDC	74,210.0	78,577.7	40,461.0	84,059.0	84,122.2	83,759.2
Full Time Equivalents	23,726	23,102	23,309	23,437	23,168	23,168
a As published in Main Estimates 2007-2008. b Amounts include resources for Corporate Services prorated to each program activity. c 2006-2007 Actuals have been restated to be comparable to the new Program Activity Architecture (PAA) approved. d Due to the numerous organizational changes that have occurred since 2005-2006, the financial information from 2005-2006 cannot be presented on the basis of the 2007-2008 program activities included in this report. For historical information on actual expenditures for 2005-2006, please visit http://www.tbs-sct.gc.ca/dpr-rmr/2006-2007/index-eng.asp.

 

Table 2: Voted and Statutory Items

		2007-2008
		Main Estimates a	Planned Spending	Authorities	Actual
Vote/ Statutory item	(millions of dollars)
	Department
1	Operating expenditures	2,508.9	2,518.3	2,531.6	2,500.9
5	Grants and contributions	1,155.8	1,159.7	1,240.2	1,027.3
7	Write-off of Debts	-	-	0.4	0.4
(S)	Minister of Human Resources and Social Development - Salary and motor car allowance	0.1	0.1	0.1	0.1
(S)	Minister of Labour and Minister of the Economic Development Agency of Canada for the Regions of Quebec - Salary and motor car allowance	0.1	0.1	0.1	0.1
(S)	Old Age Security Payments	24,093.0	24,093.0	24,029.8	24,029.8
(S)	Guaranteed Income Supplement payments	7,413.0	7,413.0	7,406.7	7,406.7
(S)	Allowance Payments	553.0	553.0	518.2	518.2
(S)	Payments related to the direct financing arrangement under the Canada Student Financial Assistance Act	366.4	366.4	292.3	292.3
(S)	The provision of funds for interest payments under the Canada Student Loans Act	0.1	0.1	0.1	0.1
(S)	The provision of funds for liabilities including liabilities in the form of guaranteed loans under the Canada Student Loans Act	8.1	8.1	(19.1)	(19.1)
(S)	The provision of funds for interest and other payments to lending institutions and liabilities under the Canada Student Financial Assistance Act	52.9	52.9	36.3	36.3
(S)	Canada Study Grants to qualifying full and part-time students pursuant to the Canada Student Financial Assistance Act	136.1	136.1	161.5	161.5
(S)	Supplementary Retirement Benefits - Annuities agents' pensions	-	-	-	-
(S)	Universal Child Care Benefit Payments	2,460.0	2,460.0	2,474.3	2,474.3
(S)	Civil Service Insurance actuarial liability adjustments	0.1	0.1	-	-
(S)	Payments of compensation respecting government employees and merchant seamen	59.0	59.0	39.5	39.5
(S)	Canada Learning Bond payments to Registered Education Savings Plans (RESPs) trustees on behalf of RESP beneficiaries to support access to post-secondary education to children from low-income families	25.0	25.0	35.8	35.8
(S)	Canada Education Savings Grant payments to Registered Education Savings Plans (RESPs) trustees on behalf of RESP beneficiaries to encourage Canadians to save for post-secondary education of children	540.0	540.0	579.7	579.7
(S)	Wage Earner Protection Program	-	28.7	-	-
(S)	Energy Cost Benefits	-	-	0.1	0.1
(S)	Spending of proceeds from disposal of Crown Assets	-	-	0.2	0.1
(S)	Labour Adjustment benefits in accordance with the terms and conditions prescribed by the Governor in Council to assist workers who have been laid off as a result of import competition, industrial restructuring, or severe economic disruption in an industry or region	-	-	-	-
(S)	Contributions to employee benefit plans	233.7	235.0	236.9	236.9
	Total Budgetary	39,605.3	39,648.6	39,564.7	39,321.0
	Plus: Non-Budgetary
	Loans disbursed under the Canada Student Financial Assistance Act	855.7	855.7	1,099.5	1,099.5
	Total Department	40,461.0	40,504.3	40,664.2	40,420.5
	Plus: Specified Purpose Accounts:
	Employment Insurance costs		16,423.6	16,204.9	16,063.2
	Canada Pension Plan costs		27,881.1	28,113.3	28,135.7
	Other Specified Purpose Accounts costs		45.3	45.2	45.2
	Departmental Employee Benefit Plan recoverable from Employment Insurance Account and Canada Pension Plan		(153.9)	(160.2)	(160.2)
	Total Consolidated Expenditures	40,461.0	84,700.4	84,867.4	84,504.4
	Full Time Equivalents	23,309	23,437	23,168	23,168
a As published in Main Estimates 2007-2008.

Electronic Tables

To reduce the volume of printed material, the following tables are not included in the printed Departmental Performance Report but can be found at: http://www.tbs-sct.gc.ca/dpr-rmr/st-ts-eng.asp

Electronic Tables

Table 3: Loans, Investments and Advances Table 4: Sources of Respendable and Non-respendable Revenue Table 5: USER FEES / EXTERNAL FEES Table 5A: User Fees Act Table 5B: User Fees - Policy on Services Standards External Fees Table 6: Details of Transfer Payment Programs Table 7: Foundations (Conditional Grants) Table 8: Horizontal Initiatives Table 9: Sustainable Development Strategy Table 10: Response to Parliamentary Committees and External Audits Table 11: Internal Audits and Evaluations Table 12: Travel Policies Table 13: Human Resources and Social Development Canada Consolidated Financial Statements for the Year Ended March 31, 2008

Specified Purpose Accounts

Introduction

Specified Purpose Accounts (SPA) are special categories of revenues and expenditures. They report transactions of certain accounts where enabling legislation requires that revenues be earmarked and that related payments and expenditures be charged against such revenues. The transactions of these accounts are to be accounted for separately.

HRSDC is responsible for the stewardship of four such accounts:

• the Employment Insurance (EI) Account;
• the Canada Pension Plan (CPP);
• the Government Annuities Account; and
• the Civil Service Insurance Fund.

The EI Account is a consolidated SPA and is included in the financial reporting of the Government of Canada. Consolidated SPAs are used principally where the activities are similar in nature to departmental activities and the transactions do not represent liabilities to third parties but, in essence, constitute Government revenues and expenditures.

The CPP is a SPA but is not consolidated as part of the Government of Canada financial statements. It is under joint control of the government and the participating provinces. As administrator, the government's authority to spend is limited to the balance in the Plan.

The Government Annuities Account is a consolidated SPA and is included in the financial reporting of the Government of Canada. It was established by the Government Annuities Act, and modified by the Government Annuities Improvement Act, which discontinued sales of annuities in 1975. The account is valued on an actuarial basis each year, with the deficit or surplus charged or credited to the Consolidated Revenue Fund.

The Civil Service Insurance Fund is a consolidated SPA and is included in the financial reporting of the Government of Canada. It was established by the Civil Service Insurance Act. Pursuant to subsection 16(3) of the Civil Service Insurance Regulations, the amount of actuarial deficits is transferred from the Consolidated Revenue Fund to the Civil Service Insurance Account in order to balance the assets and liabilities of the program.

The following information updates forecasted data on the EI Account and CPP that the Department provided in the 2007-2008 Report on Plans and Priorities²⁰ . That report presented multi year financial data and general information. Additional information on performance and year end data is available at the internet addresses provided in this section.

Employment Insurance Account

The table below summarizes the financial results for the EI Account from 2005-2006 to 2007-2008.

EI Account - Statement of Operations^a

(in millions of dollars)	Actual
	2005-2006	2006-2007	2007-2008
Expenditures
Benefits	14,418	14,079	14,293
Administrative Costs	1,576	1,636	1,689
Doubtful Accountsb	56	99	81
Sub-Total	16,050	15,815	16,063
EI Premiums and Penalties
Premiums	16,917	17,109	16,877
Penalties	50	56	58
Sub-Total	16,967	17,165	16,935
Variance	917	1,351	872
Premium Rate	2006	2007	2008
(% of Insurable Earnings)
Employee	1.87%	1.80%	1.73%
Employer	2.62%	2.52%	2.42%
aThe EI Account is a consolidated SPA and is included in the financial reporting of the Government of Canada. Consolidated SPAs are used principally where the activities are similar in nature to departmental activities and the transactions do not represent liabilities to third parties but, in essence, constitute government revenues and expenditures. b Represents write-offs and estimates of uncollectible account receivables for benefit overpayments and penalties imposed.

In 2007-2008, revenues from EI premiums declined slightly despite the growth in employment and earnings. The decline was attributable to the reduction in the premium rate. Conversely, EI benefit payments increased in 2007-2008 due to higher weekly benefits. The increase was, however, partially offset by a decline in the number of beneficiaries. As a result, revenues to the EI Account for the period exceeded expenditures by $0.9 billion. The annual surplus combined with the interest of $2.0 billion brought the notional cumulative surplus in the EI Account to $57.0 billion as of March 31, 2008.

More detailed information is reported in the 2007-2008 audited EI Account financial statements that are included in the 2008 Public Accounts of Canada, Volume 1, Section 4.²¹ HRSDC also offers information on Employment Insurance on its website.²² It provides information on the authority, objectives and details of the program as well as links to Actuarial Reports and the EI Commission's annual Monitoring and Assessment Reports.

Canada Pension Plan

The following table summarizes the financial results for the Canada Pension Plan (CPP) from 2005-2006 to 2007-2008.

More information relating to 2007-2008 is reported in the Canada Pension Plan financial statements which can be found in the 2008 Public Accounts of Canada, Volume 1, Section 6.

Canada Pension Plan - Summary

($ millions)	2005-20064	2006-20074	2007-2008
	Actual		Forecast 5	Actual
Revenue
Contributions	30,117	32,355	32,987	35,346
Investment Income
Canada Pension Plan	21	9	7	11
CPP Investment Board1	12,193	12,788	-	(268)
CPP Investment Fund2	818	247	-	-
Total Investment Income	13,032	13,044	7	(257)
Total Revenue	43,149	45,399	32,994	35,089
Expenditures
Benefit Payments	24,977	26,115	27,514	27,537
Administrative Expenses3	462	574	572	599
Total Expenditures	25,439	26,689	28,086	28,136
Increase	17,710	18,710	4,908	6,953
Year-end Balance	101,121	119,831	124,739	126,784
1 Canada Pension Plan Investment Board actual amounts are based on their audited financial statements. The CPP Investment Board invests mainly in equities. The investment income is determined mainly by the change in fair values of these investments. For 2007-08 there was a net investment loss. 2 The Canada Pension Plan Investment Fund was made up of provincial, territorial and government bonds. As of March 31, 2006, these were valued at fair value. Since May 2004, the rights and titles of the CPP Investment Fund bonds were being transferred, over a three year period and on a monthly basis, to the CPP Investment Board. After the last portion (36/36th at $630 million) of the Investment Fund was transferred to the CPP Investment Board on April 1, 2007, the CPP Investment Fund ceased to exist. 3 Administrative Expenses have been revised to include CPP Administrative Expenses as well as CPP Investment Board Administrative Expenses. 4 The 2005-2006 and 2006-2007 actual figures have been restated. 5 2007-2008 Forecast are figures reported in the 2008-2009 Report of Plans and Priorities. Please Note: All amounts from this table are the consolidated amounts found in the audited CPP annual financial statements.

Government Annuities Account

The following table summarizes the financial results for the Government Annuities Account from 2005-2006 to 2007-2008. Source of the figures is the Report of the Chief Actuary on the Government Annuities as at March 31, 2008.

Government Annuities Account - Statement of Operations and Actuarial Liabilities

(in millions of dollars)	Actual
	2005-2006	2006-2007	2007-2008
Actuarial Liabilities - Balance at Beginning of Year	377.2	347.2	319.4
Income	24.5	23.4	21.1
Payments and Other Charges	51.0	48.3	45.0
Excess of Payments and Other Charges Over Income for the Year	26.5	24.9	23.9
Actuarial Surplus	3.5	2.9	2.6
Actuarial Liabilities - Balance at End of the Year	347.2	319.4	292.9

The annual report and financial statements for Government Annuities are available in the 2008 Public Accounts of Canada, Volume 1, Section 6.²³

Civil Service Insurance Fund

The following table summarizes the financial results for the Civil Service Insurance Fund from 2005-2006 to 2007-2008.

Civil Service Insurance Fund - Statement of Operations and Balance

(in millions of dollars)	Actual
	2005-2006	2006-2007	2007-2008
Opening Balance	6.6	6.3	6.0
Receipts and Other Credits	0.1	0.0	0.1
Payments and Other Charges	0.4	0.3	0.2
Excess of Payments and Other Charges Over Income for the Year	0.3	0.3	0.1
Balance at End of the Year	6.3	6.0	5.9

The annual report and financial statements for the Civil Service Insurance Fund are available in the 2008 Public Accounts of Canada, Volume 1, Section 6.²⁴

Statutory Annual Reports

Old Age Security

The Old Age Security program is one of the cornerstones of Canada's retirement income system. Benefits include the basic Old Age Security pension, the Guaranteed Income Supplement and the Allowance. The Old Age Security program is financed from Government of Canada general tax revenues. The following tables present information on monthly benefits, beneficiaries and payments by province or territory.

Statutory Annual Reports - Summary of Maximum Monthly Benefits

(dollars) Fiscal Year	Basic Pension	Income Supplement		Allowance		Increase
		Single	Married	Regular	Survivor
Monthly benefit by fiscal year
2007-2008 Actuals
January 1, 2008	502.31	634.02	418.69	921.00	1,020.91	0.0%
October 1, 2007	502.31	634.02	418.69	921.00	1,020.91	0.9%
July 1, 2007	497.83	628.36	414.96	912.79	1,011.80	1.2%
April 1, 2007	491.93	620.91	410.04	901.97	999.81	0.0%
2007-2008 Estimates
January 1, 2008	501.83	633.42	418.31	920.14	1,019.94	0.4%
October 1, 2007	499.83	630.90	416.64	916.47	1,015.88	0.7%
July 1, 2007	496.36	626.51	413.74	910.10	1,008.82	0.7%
April 1, 2007	492.91	622.15	410.86	903.77	1,001.81	0.2%
2006-2007 Actuals
January 1, 2007	491.93	620.91	410.04	901.97	999.81	0.0%
October 1, 2006	491.93	602.91	395.54	887.47	981.81	0.9%
July 1, 2006	487.54	597.53	392.01	879.55	973.05	0.6%
April 1, 2006	484.63	593.97	389.67	874.30	967.24	0.0%
Fiscal year average (annual benefits)
2007-08 Actuals	5,983.14	7,551.93	4,987.14	10,970.28	12,160.29	3.4%
2007-08 Estimates	5,972.79	7,538.94	4,978.65	10,951.44	12,139.35	3.3%
2006-07 Actuals	5,868.09	7,245.96	4,761.78	10,629.87	11,765.73	4.2%

 

Statutory Annual
Reports' - Number of Persons Receiving Old Age Security Benefits by Province or Territory and by Type

Province or Territory	March 2007				March 2008
	Old Age Security (OAS) Pension	Guaranteed Income Supplement (GIS)	Allowance	GIS as % of OAS	Old Age Security (OAS) Pension	Guaranteed Income Supplement (GIS)	Allowance	GIS as % of OAS
Newfoundland and Labrador	70,794	44,864	4,489	63.37	72,546	45,411	4,533	62.60
Prince Edward Island	19,696	9,281	570	47.12	20,108	9,374	575	46.62
Nova Scotia	135,432	58,505	4,301	43.20	138,753	59,664	4,353	43.00
New Brunswick	107,663	53,560	4,252	49.75	110,215	54,582	4,299	49.52
Quebec	1,075,251	501,897	31,691	46.68	1,108,175	520,851	31,572	47.00
Ontario	1,606,920	468,269	27,864	29.14	1,647,106	485,298	27,805	29.46
Manitoba	159,080	58,949	3,488	37.06	161,191	59,436	3,395	36.87
Saskatchewan	146,036	57,631	3,356	39.46	146,431	57,601	3,223	39.34
Alberta	345,817	117,357	6,412	33.94	355,789	119,202	5,642	33.50
British Columbia	570,592	189,185	10,891	33.16	586,798	193,749	10,844	33.02
Yukon	2,370	774	42	32.66	2,501	803	45	32.11
Northwest Territoriesa	2,834	1,519	121	53.60	2,939	1,586	113	53.96
Internationalb	83,366	8,841	69	10.61	87,118	8,606	70	9.88
Total	4,325,851	1,570,632	97,546	36.31	4,439,670	1,616,163	96,469	36.40
a Data for Nunavut are included. b Persons receiving Canadian Old Age Security benefits under International Agreements on Social Security.

Statutory Annual Reports - Old Age Security Payments, by Province or Territory and by Type, Fiscal Year, 2007-2008

(dollars)
Province or Territory	Old Age Security (OAS) Pension	Guaranteed Income Supplement (GIS)	Allowance	Total
Newfoundland and Labrador	428,950,339	191,883,070	25,888,238	646,721,647
Prince Edward Island	112,830,932	45,586,429	2,747,841	161,165,202
Nova Scotia	818,182,937	238,587,857	21,798,348	1,078,569,142
New Brunswick	650,945,567	224,002,493	22,619,785	897,567,845
Quebec	6,453,998,677	2,225,715,761	155,744,329	8,835,458,767
Ontario	9,273,217,181	2,382,773,500	156,979,487	11,812,970,168
Manitoba	946,468,509	246,031,849	18,157,732	1,210,658,090
Saskatchewan	874,185,133	238,129,992	17,655,793	1,129,970,918
Alberta	2,030,214,035	552,460,752	33,089,556	2,615,764,343
British Columbia	3,261,160,685	964,881,446	61,781,842	4,287,823,973
Yukon	14,523,404	3,430,591	231,686	18,185,681
Northwest Territoriesa	17,411,225	8,246,603	857,471	26,515,299
Internationalb	110,807,936	84,976,161	619,036	196,403,133
Total	24,992,896,560	7,406,706,504	518,171,144	32,917,774,208
Recovery tax portion of OAS	(963,097,693)	-	-	(963,097,693)
Total including recovery tax	24,029,798,867	7,406,706,504	518,171,144	31,954,676,515
a Data for Nunavut are included. b Persons receiving Canadian Old Age Security benefits under International Agreements on Social Security.

Consolidated Report on Canada Student Loans Program

In August 2000, the Canada Student Loans Program was shifted from the risk-shared financing arrangements that had been in place with financial institutions between 1995 and July 2000 to a direct student loan financing plan.²⁵ This meant that the Program had to redesign the delivery mechanism in order to directly finance student loans. In the new arrangement, the Government of Canada provides the necessary funding to students and two service providers have contracts to administer the loans. As of March 2008, the Government of Canada will shift from two service provider contracts to one single service provider.

Reporting Entity

The entity detailed in this report is the Canada Student Loans Program only and does not include departmental operations related to the delivery of the Canada Student Loans Program. Expenditures figures are primarily statutory in nature, made under the authority of the Canada Student Loans Act and the Canada Student Financial Assistance Act.

Basis of Accounting

The financial figures are prepared in accordance with generally accepted accounting principles and as reflected in the Public Sector Accounting Handbook of the Canadian Institute of Chartered Accountants.

Revenues

Two sources of revenue are reported: interest revenue on Direct Loans and recoveries on Guaranteed and Put Back Loans. Government accounting practices require that recoveries from both sources be credited to the government's Consolidated Revenue Fund. They do not appear along with the expenditures in the Canada Student Loans Program accounts, but are reported separately in the financial statements of Human Resources and Social Development Canada and the government.

Interest Revenue on Direct Loans

Borrowers are required to pay simple interest on their student loans once they leave full-time studies. At the time they leave school, students have the option of selecting a variable (prime + 2.5%) or fixed (prime + 5%) interest rate. The figures represent the interest accrued on the outstanding balance of the government-owned Direct Loans. Borrowers continue to pay the interest accruing on the guaranteed and risk-shared loans directly to the private lender holding these loans. Effective August 1, 2005, the weekly loan limit increased from $165 per week to $210 per week of study. As more funds are now available to students, total loan disbursements and interest revenue generated will continue to increase.

Recoveries on Guaranteed Loans

The government reimburses the private lenders for any loans issued prior to August 1, 1995 that go into default (i.e., lenders claim any amount of principal and interest not repaid in full). The figures represent the recovery of principal and interest on these defaulted loans.

Recoveries on Put-back Loans

Under the risk-shared agreements, the government will purchase from the participating financial institutions any loans issued between August 1, 1995 to July 31, 2000 that are in default of payments for at least 12 months after the period of study, that in aggregate, do not exceed 3% of the average monthly balance of the lender's outstanding student loans in repayments. The amount paid is set at 5% of the value of the loans in question. The figures represent the recovery of principal and interest on these loans.

Canada Study Grants and Canada Access Grants

Canada Study Grants and Canada Access Grants improve access to post-secondary education by providing non-repayable financial assistance to post-secondary students. Four types of Canada Study Grants are available to assist: (1) students with permanent disabilities in order to meet disability-related educational expenses (up to $8,000 annually); (2) students with dependants (up to $3,120 for full-time students and up to $1,920 for part-time students, annually); (3) high-need part-time students (up to $1,200 annually); and (4) women in certain fields of Ph.D. studies (up to $3,000 annually for up to three years). Two Canada Access Grants are available since August 1, 2005, to assist: (1) students from low-income families entering their first year of post-secondary studies (50% of tuition, up to $3,000); and (2) students with permanent disabilities in order to assist with education and living expenses (up to $2,000 annually).²⁶

Collection Costs

These amounts represent the cost of using private collection agencies to collect defaulted Canada Student Loans. The loans being collected include: risk-shared and guaranteed loans that have gone into default and for which the government has bought back from the private lender; and Direct Loans issued after July 31, 2000, that are returned to HRSDC by the third party service provider as having defaulted. As of August 1, 2005 the Canada Revenue Agency Non Tax Collections Directorate undertook the responsibility for the administration of the collection activities of the guaranteed, risk-shared and direct student loans.

Service Provider Costs

Canada Student Loans Program uses third party service providers to administer loan origination, in-study loan management, post-studies repayment activities and debt management. This item represents the cost associated with these contracted services.

Risk Premium

Risk premium represents part of the remuneration offered to lending institutions participating in the risk-shared program from August 1, 1995 to July 31, 2000. The risk premium represents 5% of the value of loans being consolidated which is calculated and paid at the time students leave studies and go into repayment. In return, the lenders assume the risk associated with non-repayment of these loans.

Put-Back

Subject to the provisions of the contracts with lending institutions, the government will purchase from a lender the student loans that are in default of payment for at least 12 months and that, in aggregate, do not exceed 3% of the average monthly balance of the lender's outstanding student loans in repayments. The amount paid is set at 5% of the value of the loans in question. The figures also include any refund made to participating financial institutions on the recoveries.

Administrative Fees to Provinces and Territories

Pursuant to the Canada Student Financial Assistance Act, the government has entered into arrangements with nine provinces and one territory to facilitate the administration of the Canada Student Loans Program. They administer the application and needs assessment activities associated with federal student financial assistance and in return they are paid an administrative fee. As of August 1, 2005 administrative fees paid to provinces were increased to improve the compensation for their part in the administration of the Canada Student Loans Program.

In-Study Interest Borrowing Expense

The capital needed to issue the Direct Loans is raised through the Department of Finance's general financing activities. The cost of borrowing this capital is recorded in the Department of Finance's overall financing operations. The figures represent the cost attributed to Canada Student Loans Program in support of Direct Loans while students are considered in study status. Weekly loan limits increased effective August 1, 2005. As more funds are now available to students, total loan disbursements have grown, and as a result the in-study interest borrowing expense will continue to rise.

In-Repayment Interest Borrowing Expense

The capital needed to issue the Direct Loans is raised through the Department of Finance's general financing activities. The cost of borrowing this capital is recorded in the Department of Finance's overall financing operations. The figures represent the cost attributed to Canada Student Loans Program in support of Direct Loans while students are in repayment of their Canada Student Loans.

In-Study Interest Subsidy

A central feature of federal student assistance is that student borrowers are not required to pay the interest on their student loans as long as they are in full-time study and, in the case of loans negotiated prior to August 1, 1993, for six months after the completion of studies. Under the guaranteed and risk-shared programs, the government pays the interest to the lending institutions on behalf of the student.

Interest Relief

Assistance may be provided to cover loan interest and suspend payments on the principal of loans in repayment for up to 54 months for borrowers experiencing temporary difficulties repaying their loans. The shift from Guaranteed and Risk-Shared Loans to Direct Loans did not alter interest relief for loans in distress from the borrower's perspective; however, the method of recording associated costs changed. For loans issued prior to August 1, 2000, Canada Student Loans Program compensates lending institutions for lost interest equal to the accrued interest amount on loans under Interest Relief. For loans issued after August 1, 2000, an interest relief expense is recorded to offset the accrued interest on direct loans. Effective August 1, 2005 income thresholds used to determine Interest Relief eligibility increased in order to make Interest Relief accessible to a greater number of borrowers.

Debt Reduction in Repayment

Debt Reduction in Repayment assists borrowers experiencing long-term difficulties repaying their loans. Debt Reduction in Repayment is a federal repayment assistance program through which the Government of Canada reduces a qualifying borrower's outstanding Canada Student Loans principal to an affordable amount after Interest Relief has been exhausted and only after 5 years have passed since the borrower ceased to be a student. As of August 1, 2005, the maximum amount of Debt Reduction in Repayment assistance is $26,000, which is available to eligible borrowers in an initial deduction of up to $10,000, a second deduction of up to $10,000 and a final deduction of up to $6,000. For loans issued prior to August 1, 2000, Canada Student Loans Program pays the lending institutions the amount of student debt principal reduced by the Government of Canada under Debt Reduction in Repayment. For loans issued after August 1, 2000, the Government of Canada forgives a portion of the loan principal.

Claims Paid and Loans Forgiven

From the beginning of the program in 1964 until July 31, 1995, the government fully guaranteed all loans issued to students by private lenders. The government reimburses private lenders for any of these loans that go into default (i.e., subject to specific criteria, lenders may claim any amount of principal and interest not repaid in full, after which the Canada Revenue Agency's Collection Services will attempt to recover these amounts).²⁷ The risk-shared arrangements also permitted loans issued from August 1, 1995 to July 31, 2000 to be guaranteed under specific circumstances. This item represents the costs associated with loan guarantees.

Pursuant to the Canada Student Loans Act and the Canada Student Financial Assistance Act, the government incurs the full amount of the unpaid principal plus accrued interest in the event of the death of the borrower or, if the borrower becomes permanently disabled and cannot repay the loan without undue hardship.

Bad Debt Expense

Under Direct Loans, the government owns the loans issued to students and must record them as assets. As a result, generally accepted accounting principles require a provision be made for potential future losses associated with these loans. The provision must be made in the year the loans are issued even though the losses may occur many years later. The figures represent the annual adjustment to the provisions for Bad Debt and Debt Reduction in Repayment on Direct Loans.

Alternative Payments to Non-participating Provinces and Territories

Provinces and territories may choose not to participate in the Canada Student Loans Program. These provinces and territories receive an alternative payment to assist in the cost of delivering a similar student financial assistance program.

Figure 1: Consolidated Canada Student Loans Programs — Combined Programs

(millions of dollars)	Actual		2007-2008
	2005-2006	2006-2007	Forecast	Actual
Revenues
Interest Revenue on Direct Loans	315.7	453.3	445.3	552.4
Recoveries on Guaranteed Loans	66.8	55.3	53.1	46.6
Recoveries on Put-Back Loans (RS)	13.1	14.5	19.1	13.5
Total Loan Revenue	395.6	523.1	517.5	612.6
Expenses
Transfer payment
Canada Study Grants and Canada Access Grants	129.7	146.4	136.1	161.5
Loan Administration
Collection Costs (All regimes) a	13.6	12.4	21.0	14.4
Service Provider Costs (DL)	50.2	65.6	83.3	70.8
Risk Premium to Financial Institutions (RS)	2.7	1.8	1.8	1.3
Put-Back to Financial Institutions (RS)	4.3	4.7	5.4	3.8
Administrative Fees to Provinces and Territories (DL)	13.9	14.7	14.2	13.7
Total Loan Administration Expenses	84.7	99.2	125.7	104.0
Cost of Government Benefits to Students
In-Study Interest Borrowing Expense (Class A - DL) b	159.3	185.7	187.5	188.6
In Repayment Interest Borrowing Expense (Class B - DL)b	111.4	145.0	174.6	166.2
In-Study Interest Subsidy (RS & GL)	12.1	11.5	9.2	8.0
Interest Relief (All regimes)	67.2	84.2	84.4	93.2
Debt Reduction in Repayment (RS & GL)	31.4	20.1	24.5	14.3
Claims Paid & Loans Forgiven (All regimes)	24.8	24.2	24.7	17.0
Total Cost of Govt Benefits to Students	406.2	470.7	504.9	487.3
Bad Debt Expense c
Debt Reduction in Repayment Expense (DL)	13.3	9.6	14.1	12.4
Bad Debt Expense (DL)	297.2	260.4	354.5	305.7
Total Bad Debt Expense	310.5	270.0	368.6	318.1
Total Loan Expenses	931.1	986.3	1,135.3	1,070.9
Net Operating Results	535.5	463.2	617.8	458.3
Alternative Payments to Non-Participating Provinces (DL) d	158.2	91.3	172.6	113.9
Final Net Operating Results	693.7	554.5	790.4	572.2
(DL) = Direct Loans (RS) = Risk-Shared Loans (GL) = Guaranteed Loans a These costs are related to collection activities performed by the Canada Revenue Agency. b These costs are related to Canada Student Direct Loans but reported by the Department of Finance. c This represents the annual expense against the Provisions for Bad Debt and Debt Reduction in Repayment as required under Accrual Accounting. d The figures represent the annual expense recorded under the Accrual Accounting as opposed to the actual amount disbursed to the Non-Participating Provinces. For 2007-2008, the total amount disbursed as Alternative Payments is $115.8 M.

 

Figure 2: Consolidated Canada Student Loans Programs — Risk Shared and Guaranteed Loans Only

(millions of dollars)	Actual		2007-2008
	2005-2006	2006-2007	Forecast	Actual
Revenues
Recoveries on Guaranteed Loans	66.8	55.3	53.1	46.6
Recoveries on Put-Back Loans (RS)	13.1	14.5	19.1	13.5
Total Loan Revenue	79.9	69.8	72.2	60.2
Expenses
Loan Administration
Collection Costsa	6.7	5.3	7.3	4.9
Risk Premium to Financial Institutions (RS)	2.7	1.8	1.8	1.3
Put-Back to Financial Institutions (RS)	4.3	4.7	5.4	3.8
Total Loan Administration Expenses	13.7	11.8	14.5	10.0
Cost of Government Benefits to Students In-Study Interest Subsidy	12.1	11.5	9.2	8.0
Interest Relief	23.3	20.8	10.8	14.4
Debt Reduction in Repayment	31.4	20.1	24.5	14.3
Claims Paid & Loans Forgiven	15.7	17.0	9.4	9.8
Total Cost of Govt Benefits to Students	82.5	69.4	53.9	46.5
Total Loan Expenses	96.2	81.2	68.4	56.5
Final Net Operating Results	16.3	11.4	(3.8)	(3.7)
(RS) = Risk-Shared Loans a These costs are related to collection activities performed by the Canada Revenue Agency.

 

Figure 3: Consolidated Canada Student Loans Programs — Direct Loans Only

(millions of dollars)	Actual		2007-2008
	2005-2006	2006-2007	Forecast	Actual
Revenue
Interest Revenue on Direct Loans	315.7	453.3	445.3	552.4
Total Loan Revenue	315.7	453.3	445.3	552.4
Expenses
Transfer payment
Canada Study Grants and Canada Access Grants	129.7	146.4	136.1	161.5
Loan Administration
Collection Costsa	6.9	7.1	13.7	9.5
Service Provider Costs	50.2	65.6	83.3	70.8
Administrative Fees to Provinces and Territories	13.9	14.7	14.2	13.7
Total Loan Administration Expenses	71.0	87.4	111.2	94.0
Cost of Government Benefits to Students
In-Study Interest Borrowing Expense (Class A )b	159.3	185.7	187.5	188.6
In Repayment Interest Borrowing Expense (Class B )b	111.4	145.0	174.6	166.2
Interest Relief	43.9	63.4	73.6	78.8
Loans Forgiven	9.1	7.2	15.3	7.2
Total Cost of Govt Benefits to Students	323.7	401.3	451.0	440.8
Bad Debt Expense c
Debt Reduction in Repayment Expense	13.3	9.6	14.1	12.4
Bad Debt Expense	297.2	260.4	354.5	305.7
Total Bad Debt Expense	310.5	270.0	368.6	318.1
Total Loan Expenses	834.9	905.1	1,066.9	1,014.4
Net Operating Results	519.2	451.8	621.6	462.0
Alternative Payments to Non-Participating Provinces d	158.2	91.3	172.6	113.9
Final Net Operating Results	677.4	543.1	794.2	575.9
a These costs are related to collection activities performed by the Canada Revenue Agency. b These costs are related to Canada Student Direct Loans but reported by the Department of Finance. c This represents the annual expense against the Provisions for Bad Debt and Debt Reduction in Repayment as required under Accrual Accounting. d The figures represent the annual expense recorded under the Accrual Accounting as opposed to the actual amount disbursed to the Non-Participating Provinces. For 2007-2008, the total amount disbursed as Alternative Payments is $115.8M.

 

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