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Section III - Supplementary Information

Table 1: Departmental Link to the Government of Canada Outcomes

	Planned Spending (in millions of dollars)
	2008-2009	2009-2010	2010-2011	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 Communications	185.2	168.3	168.3	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	16,375.7	16,899.5	17,361.9	Income Security and Employment for Canadians
Workplace Skills	273.8	259.8	240.3	An Innovative and Knowledge-based Economy
Learning	2,096.6	1,921.5	1,808.4	An Innovative and Knowledge-based Economy
Sub-Total	18,746.1	19,080.8	19,410.6
Strategic Outcome: Safe, healthy, fair, stable, cooperative, productive workplaces and effective international labour standards
Labour	271.4	280.9	285.1	A Fair and Secure Marketplace
Strategic Outcome: Enhanced income security, access to opportunities and well-being for individuals, families and communities
Social Investment	63,028.0	66,193.8	69,549.9	Income Security and Employment for Canadians
Children and Families	2,488.2	2,499.1	2,504.3	Income Security and Employment for Canadians
Housing and Homelessnessa,b	165.6	1.2	1.2	Strong Economic Growth
Sub-Total	65,681.8	68,694.1	72,055.4
Strategic Outcome: Achieve better outcomes for Canadians through service excellence (Service Canada)
Seamless, Citizen-Centred Service	602.2	595.9	598.2	Government Affairs
Integrity	880.2	876.2	876.0	Government Affairs
Collaborative, Networked Government Service	232.4	232.7	232.8	Government Affairs
Sub-Total	1,714.8	1,704.8	1,707.0
TOTAL	86,599.3	89,928.9	93,626.4
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 will be updated at the earliest opportunity to reflect this.

 

Table 2: Sustainable Development Strategy

HRSDC's Sustainable Development Strategy (SDS) was tabled in Parliament on December 20, 2006. The strategy has a two-pronged approach: it focuses on the application of a sustainable development lens while developing policies and programs through a select number of Signature Projects and Greening Operations initiatives associated with day-to-day operations. Over the course of the Strategy, key departmental priorities are: decreasing building energy use; reducing vehicle emissions; expanding green procurement; increasing green processing in the delivery of programs and services; improving collaboration with communities for sustainability; and developing Signature Projects as examples of the Department's approach to sustainable development in policy making and program design. The departmental Green Operations will involve twenty-four activities such as infrastructure energy saving initiatives, energy conserving lighting, decreasing office equipment energy use, recycling, fleet optimization, eco-driving or carpooling, green hotel usage, green procurement, e-waste management and simplification of program delivery document requirements. HRSDC's longer term approach for this SDS is to select a focused number of meaningful projects to advance sustainable development knowledge from the policy and program design perspective. These Signature Projects will demonstrate that the Department is stretching beyond business as usual by representing a broader approach to review programs and identify areas where all three sustainable development areas - economic, environmental and social - are addressed. This will occur through the application of a sustainable development lens to policy and program development, requiring a greater investment of funds, time, and participation stretching beyond a three-year period. HRSDC will undertake Signature Projects in the following three areas: People: Supporting initiatives that help Canadians invest in themselves, by providing access to learning, income security, and supporting efficient and inclusive labour markets to improve the sustainability of communities. Partnerships: Leveraging knowledge and people to develop partnerships and identify new opportunities to encourage sustainable employment in particular as it relates to the environment. Knowledge: Generating a social and economic indicators information base to ensure that current Canadian social, environmental and economic factors inform decision-making. HRSDC has determined that the best way to ensure probity and accountability for the outcomes identified in Greening Operations and Signature Projects is to strengthen the development, management and monitoring of proposed activities, and to ensure that staff are trained to incorporate sustainable development measures into their day-to-day work. Over and above these activities, in 2008-2009, the Department will be focusing on reducing its environmental impact through more efficient and environmentally-friendly processing of service offerings and increasing awareness of promoting the role of staff in undertaking sustainable development initiatives. The following provides an overview of the planned SDS activities and their expected results for 2008-2009 as per governmental and departmental goals:
Departmental SDS Vision: Advancing sustainable development by supporting a strong, inclusive labour market and society, and by being an example of sustainability in the provision of GoC services to Canadians in a manner that reduces the impact on the environment.
SD Priority	Federal SD Goal and Government-wide Outcomes	Long-Term Goal	Performance Measurement from Current SDS	Expected Results for 2008-2009
Building Energy	Goal 3: Reduce greenhouse gas emissions 3.2.1 Support for clean technologies is provided (such as building, transportation, and industrial processes) Goal 5: Sustainable Development and Use of Natural Resources 5.2.1 Sustainable consumption and production of natural resources is promoted	Energy consumption and GHG emissions reduced	Infrastructure Energy Saving Initiative Energy Conserving Lighting Initiative Decreasing Office Equipment Energy Use Recycling Initiative Extra/Intra-jurisdictional Offices Sharing Initiative	Reduced energy use for buildings Increased volume and types of materials recycled Increased number of shared office properties with different levels of government
Vehicle Emissions	Goal 3: Reduce greenhouse gas emissions 3.3.1 Emissions are reduced	Departmental vehicle usage has reduced or eliminated GHG emissions	Fleet Optimization Initiative Extra/Intra-jurisdictional Carpooling Initiative Conducting Training Sessions with Fleet Management Employees Eco-driving Initiative	Reduced vehicle fleet GHG emissions Increased carpooling with other government departments and jurisdictions Increased sustainable vehicle procurement by fleet management staff Increased sustainable vehicle usage awareness among staff
Green Procurement	Goal 5: Sustainable Development and Use of Natural Resources 5.3.1 Environmentally sustainable use of natural resources is promoted	Most products and services purchased are 'green'	Green Hotel Usage Initiative Sustainable Procurement Initiative Conducting Training Sessions with Administrative Assistants E-Waste Initiative Regional Offices Phonebook Reduction Initiative	Increased departmental usage of certified sustainable accommodations Increased purchase of green items Increased green procurement awareness among procurement staff Redirection of E-Waste to recycling depots Reduced acquisition of paper materials by moving to online directories
Green Processing	Goal 5: Sustainable Development and Use of Natural Resources 5.3.1 Environmentally sustainable use of natural resources is promoted	Reduced environmental impact for all services provided	Processing Automation Initiative Simplification of Program Delivery Document Requirements Paper Reduction Initiative	Decreased use of paper and energy to process service offerings Decreased service delivery processing requirements and paper usage Reduced quantity of paper printed within the Department
Collaboration with Communities	Goal 4: Sustainable Communities 4.1.1 Communities are well positioned to advance sustainable social development 4.3.2 Risks to human and ecosystem health from harmful substances are reduced (including cleanup of federal contaminated sites) Goal 5: Sustainable Development and Use of Natural Resources 5.3.1 Environmentally sustainable use of natural resources is promoted	Communities are more engaged in sustainable development	Promoting Environmentally Friendly Service Delivery Channels Service Canada Centre Design Initiative Strengthening Environmental Assessment Function Encouraging Staff Volunteerism in Local Communities Building Feedback Process to Policy Departments Diffusing Sustainable Development Information in Service Canada Service Centres Facilitating Recycling in Service Canada Service Centres	Increase in awareness and use of electronic Service Canada service offerings Increased number of Service Canada Service Centres designed to enhance service experience Increase the number of grants and contributions applications funded by Service Canada that receive environmental reviews Increase in volunteerism by Departmental staff in their communities Improvement in meeting client needs in the delivery of service offerings Posted and updated sustainable development information in Service Canada Service Centres Increased volume of recycling in Service Canada Service Centres
Signature Projects	Goal 4: Sustainable Communities 4.1.1 Communities are well positioned to advance sustainable social development 4.2.1 Communities are well positioned to adapt and to maintain or generate sustainable economic activities 4.3.2 Risks to human and ecosystem health from harmful substances are reduced (including cleanup of federal contaminated sites)	Environmental industry has the necessary labour force to address environmental impacts Information on the well-being of Canadians is used in decision-making Labour market development that provides sustainable employment	Partnerships - Sector Councils: Promote the work with the ECO council to encourage similar work in other sectors Knowledge - indicators on the well-being of Canadians People - Labour Market and Skills Development	Identification of future HR skills needs for the environmental sector Key indicators available on the well-being of Canadians Strategies developed and training available
Governance for Sustainable Development	Goal 6: Governance for Sustainable Development 6.1.1 SDS commitments are integrated into the key planning and reporting processes of departments and agencies 6.1.2 Clear and effective governance mechanisms to integrate sustainable development in decision making, e.g., SEA	SD is incorporated into departmental policies and decision-making	Developing and Implementing Sustainable Development Policies and Directives Establishing Organizational Structure dedicated to Sustainable Development Integrating SDS into the Departmental Planning and Reporting Cycle Building a Sustainable Development Recognition Program Building Engagement Enablers Establishing SDS Network with Representatives from all Branches and Regions	Sustainability initiatives within Department supported by timely and appropriate policies and directives Ensuring that there are defined SD leadership roles and responsibilities within the Department Reporting by the Department on SDS activities in departmental documents including the RPP, DPR and Service Canada Annual Report Recognizing Departmental staff for their sustainable development-related efforts Increase awareness of sustainable development issues among staff Developing a national network of Service Canada staff to support sustainable development activities and assist with monitoring

 

Table 3: Details on Transfer Payment Programs

Over the three fiscal years (2008-2009 to 2010-2011), HRSDC will manage the following transfer payment programs in excess of $5 million: Labour Market 1. Youth Employment Strategy 2. Opportunities Fund for Persons with Disabilities 3. Aboriginal Skills and Employment Partnerships 4. Aboriginal Human Resources Development Strategy 5. Enabling Fund for Official Language Minority Communities 6. Multilateral Framework for Labour Market Agreements for Persons with Disabilities 7. Targeted Initiative for Older Workers 8. Labour Market Agreements Workplace Skills 9. Sector Council Program 10. Adult Learning, Literacy and Essential Skills Program 11. Foreign Credential Recognition Program 12. Workplace Skills Initiative 13. Apprenticeship Incentive Grant Learning 14. Canada Student Loans Program - Liabilities 15. Canada Student Loans Program - Interest Payments and Liabilities 16. Canada Student Loans Program - Direct Financing Arrangement 17. Canada Study Grants and Canada Access Grants 18. Canada Education Savings Program - Canada Learning Bond 19. Canada Education Savings Program - Canada Education Savings Grant Social Investment 20. Old Age Security 21. Guaranteed Income Supplement 22. Allowance Payments 23. Social Development Partnerships Program 24. New Horizons for Seniors 25. Enabling Accessibility Fund Children and Families 26.Universal Child Care Benefit Housing and Homelessness 27. Homelessness Partnering Strategy Labour 28. Wage Earner Protection Program Further information on these projects can be found at http://www.tbs-sct.gc.ca/rpp/2008-2009/info/info-eng.asp

 

Table 4: Evaluations

Below is a listing of audits and evaluations planned for 2008-2009. Several of these projects will be completed during the year while others will be starting. Evaluations are presented by program activities as they are seen in the approved Program Activity Architecture for 2008-2009. http://www.hrsdc.gc.ca/en/publications_resources/evaluation/index.shtml
Name of Evaluation	Evaluation Type	Status	Expected Completion Date
Labour Market
Regular Benefits	Summative	Planned for 2010-2011
New entrant Re-entrant	Summative	In the field	Fall 2008
New entrant Re-entrant	Formative	Analysis of results	Spring 2008
Sickness Premium Reduction	Summative	In the field	Fall 2008
5 Week Seasonal	Summative	In the field	Spring 2008
Three Pilot Projects - Seasonal Workers	Summative	Terms of Reference in progress	2008-2009
Labour Market Development Agreement: Yukon	Summative	Methodology development phase	Winter 2008
Labour Market Development Agreement: New Brunswick	Summative	Analysis of results	Winter 2008
Labour Market Development Agreement: Nova Scotia	Summative	In the field	Summer 2008
Labour Market Development Agreement: PEI	Summative	In the field	Summer 2008
Labour Market Development Agreement: Manitoba	Summative	Methodology development phase	Fall 2008
Labour Market Development Agreement: NWT	Summative	Methodology development phase	Fall 2008
Labour Market Development Agreement: Alberta	Summative	Analysis of results	Spring 2008
Labour Market Development Agreement: Saskatchewan	Summative	Analysis of results	Winter 2008
Labour Market Development Agreement: Nunavut	Summative	Planned for 2010-2011
Aboriginal Human Resources Development Agreements	Formative	Analysis of results	Spring 2008
Aboriginal Human Resources Development Agreements	Summative	Terms of Reference in progress	Fall 2008
Aboriginal Skills and Employment Partnership	Formative	Analysis of results	Winter 2008
Aboriginal Skills and Employment Partnership	Summative	Terms of Reference in progress	Spring 2008
Labour Market Adjustment - Targeted Initiative for Older Workers	Feasibility Assessment	Terms of Reference in progress	Winter 2008
Official Language Minority Communities	Summative	Planned for 2009-2010
Youth Employment Strategy	Summative	Analysis of results	Winter 2008
Workplace Skills
Apprenticeship Incentive Grant	Implementation	Methodology Development Phase	2008-2009
Apprenticeship Incentive Grant	Targeted	Planned for 2010-2011
Workplace Skills Initiative	Summative	Planned for 2009-2010
Training Centre Infrastructure Fund	Summative	Terms of Reference in progress	Spring 2008
Going to Canada Immigration Portal	Summative	Planned for 2009-2010	2009-2010
Temporary Foreign Worker Program	Framework	Terms of Reference in progress	Spring 2008
Foreign Worker Recognition Program	Summative	Terms of Reference in progress	Fall 2008
Labour Market Information	Summative	Planned for 2010-2011
Wage Earner Protection Program	Targeted	Planned for 2010-2011
Adult Learning, Literacy and Essential Skills Program	Formative	Terms of Reference in progress	Fall 2008
Adult Learning, Literacy and Essential Skills Program	Summative	Planned for 2010-2011
Learning
Canada Student Loans Program	Summative	Methodology development phase	2010-2011
Canada Learning Bond	Summative	Planned for 2009 - 2010
Canada Education Savings Grants	Formative	Methodology development phase	Spring 2008
Canada Education Savings Grant	Summative	Planned for 2009-2010
Labour
Workplace Equity Programs	Summative	Reporting phase	2007-2008
Occupational Health and Safety	Framework	Planned for 2008-2009
Fire Protection	Summative	Planned for 2009-2010	2010-2011
Racism Free Workplace Strategy	Summative	Planned for 2009-2010	2009-2010
Federal Workers Compensation	Summative	Planned for 2009-2010	2009-2010
International Trade and Labour Program	Summative	Planned for 2008-2009
Social Investment
OAS	Summative	Terms of Reference in progress	Summer 2010
Labour Market Agreements for Persons with Disabilities - Manitoba	Formative	Methodology development phase	Fall 2008
Labour Market Agreements for Persons with Disabilities - Prince Edward Island	Summative	Terms of Reference in progress - Planned for Fall 2008
Labour Market Agreements for Persons with Disabilities - Nova Scotia	Summative	Terms of Reference in progress - Planned for Fall 2008
Opportunities Fund for Persons with Disabilities	Summative	Analysis of results	Winter 2008
New Horizons for Seniors	Formative	Methodology Development Phase	Spring 2008
New Horizons for Seniors	Combined Implementation/ Summative	Planned for 2009-2010
Understanding the Early Years	Formative	Analysis of results	Spring 2008
Understanding the Early Years	Summative	Planned for 2009-2010
Social Development Partnerships Program	Summative	Field work phase	Spring 2008
Voluntary Sector Initiative	Summative	Planned for Spring 2008
Children and Families
Universal Child Care Benefit (UCCB)	Framework	Terms of Reference in progress	2008-2009
	Formative	Evaluation phase	2008-2009
National Child Benefit Evaluation	Summative	Terms of Reference in progress	Fall 2009
Housing and Homelessness
Homelessness Partnering Strategy	Summative	Planned for Winter 2009
Policy, Research and Communications
Canadian Policy Research Network	Targeted	Terms of Reference in progress	2008-2009
Service Canada
EcoAuto implementation	Evaluation of service delivery initiative	Planned	2008-2009
Partnerships	Management review of partnerships strategy and approach	Planned	2008-2009
Automation and Standardization of Processes	Evaluation of service delivery processes	Planned	2009-2010
Return on IT investments	Assessment of return on investment	Planned	2009-2010
Passport Delivery	Evaluation of service delivery initiative	Planned	2009-2010
Common Experience Payment (CEP) Implementation	Evaluation of service delivery initiative	In progress	2008-2009
Regional and Community Presence (Service Canada Community Offices)	Evaluation of service delivery initiative	In progress	2008-2009
Brand Management	Management review	In progress	2008-2009
In-Person Service Experience Model	Evaluation of service delivery initiative	Planned	2009-2010
In-Person Client Resolution and Feedback	Evaluation of client issue resolution initiative	Planned	2008-2009
Benefit Uptake	Evaluation of service delivery strategies	Planned	2009-2010
Service Channels	Evaluation of service delivery channels	Planned	2009-2010
Investigation and control	Scoping/evaluation feasibility	Planned	2008-2009
Identity management tools and practices	Scoping/evaluation feasibility	Planned	2008 - 2009
Social Insurance Number rapid access	Scoping/evaluation feasibility	Planned	2009 - 2010

 

Table 5: Foundations (Conditional Grants)

In 2008-2009, HRSDC will contribute or is reporting on the following Grants: Learning 1. The Canada Millennium Scholarship Foundation Other Initiatives Canadian Council on Learning Further information on these projects can be found at http://www.tbs-sct.gc.ca/rpp/2008-2009/info/info-eng.asp

 

Table 6: Green Procurement

Departmental procurement processes are based on achieving value-for-money while leveraging procurement to achieve broader social, economic and environmental outcomes. This includes meeting the various federal social, economic and environmental policies, such as PWGSC's Policy on Green Procurement. Departmental purchasing patterns for key commodities essential to operations are assessed using key standards to support sustainable development. Electronic-based Green Procurement processes through Service Canada's Purchasing Portal are also an important part of the department's green operations commitments by reducing the environmental footprint of paper-based transactions particularly for thousands of low dollar value transactions. The Department is also raising the awareness and understanding of green procurement through training and communications. Functional specialists receive training through courses offered by the Canada School of Public Service, and administrative assistants and managers receive information through departmental awareness sessions. A green procurement information/job aid is being be added to the departmental Purchasing Portal and departmental employees will receive information through the Service Canada Intranet site and Info Service communiqués. As well, since departmental purchasing is subject to the use of mandatory standing offers established by PWGSC, work continues with PWGSC commodity councils to identify opportunities where expansion in the type and number of "green" items available can be leveraged. As these become available, appropriate communications strategies and tools, including the Purchasing Portal, will ensure their appropriate use.

Baseline data is currently being compiled to support the establishment of realistic targets that will reflect the buying patterns and current procurement processes supported across the department, aligned with procurement tools from PWGSC as they become available. Targets will include elements such as types and quantities of products purchased, as well as the promotion of environmentally responsible tools and processes used to support various types of procurement transactions. The number of employees receiving training and awareness related to green procurement are also considered. More specifically, the department, through promotion of appropriate use of the Acquisition Card and the Purchasing Portal will decrease paper-based transactions and improve the efficiency and costs associated with low dollar value procurement. In establishing firm targets that encourage green procurement, however, the department is constrained by what is currently available through the use of mandatory standing offers from PWGSC.

 

Table 7: Horizontal Initiatives

During fiscal year 2007-2008, HRSDC will be involved in the following horizontal initiatives. Unless otherwise mentioned in the list, HRSDC acts as the lead Department for these initiatives. Labour Market 1.Aboriginal Skills and Employment Partnership Program 2. Youth Employment Strategy Workplace Skills 3. Temporary Foreign Worker Program Learning 4. Canada Student Loans Program Children and Families 5. Multilateral Framework for Early Learning and Child Care 6. National Child Benefit 7. Early Childhood Development Agreement Housing and Homelessness 8. Homelessness Partnering Strategy Policy, Research and Communication 9. Action Plan for Official Languages (Privy Council Office is the lead) Further information on these projects can be found at http://www.tbs-sct.gc.ca/rpp/2008-2009/info/info-eng.asp

 

Table 8: Internal Audits

HRSDC Internal Audit HRSDC's annual planning cycle is based on risk. At this time, the Internal Audit Plan for 2008 - 2011 is being developed, with approval anticipated in early 2008 - 2009. The audit plan will meet the requirements of the 2006 Treasury Board's Policy on Internal Audit and align with the Program Activity Architecture. Below is a listing of internal audit engagements identified in the 2007 - 2010 Internal Audit Plan. Please note that the list of projects planned for 2008-2010 may change as a result of the risk-based audit planning process for 2008-2009.
Name of Internal Audit	Audit Type	Status	Expected Completion Date
Aboriginal Skills and Employment Partnerships	Assurance	Underway	Winter 2008
Canada Student Loans Program - Consulting Engagement	Consulting	Underway	Summer 2008
Risk Managementa	Assurance	Underway	Spring 2008
Acquisition Cards	Assurance	Planned for 2007-08	Summer 2008
Procurement and Contract Management	Assurance	Underway	Spring 2008
Grants and Contributions - Financial Monitoring (Phase I - Compliance)	Assurance	Underway	Spring 2008
Accessibility	Assurance	Underway	Spring 2008
Asset Protection and Life-Cycle Management	Assurance	Planned for 2007-2008	Summer 2008
Common System for Grants and Contributions	Review	Planned for 2007-2008	Spring 2008
Canada Study Grant	Assurance	Planned for 2008-2009
Youth Employment Strategy	Assurance	Planned for 2008-2009
Research	Assurance	Planned for 2008-2009
Values and Ethicsa	Follow-up	Planned for 2008-2009
Risk Managementa	Follow-up	Planned for 2008-2009
Results Identification and Performance Measurementa	Assurance	Planned for 2008-2009
Accountabilities for Collaborative/Horizontal Initiatives	Assurance	Planned for 2008-2009
Budgets/Forecasts Resource Reallocation to Achieve Results	Assurance	Planned for 2008-2009
Grants and Contributions - Financial Monitoring (Phase II - Processes)	Assurance	Planned for 2008-2009
Financial and Non-Financial Reporting	Assurance	Planned for 2008-2009
Sustainable HR Policies and HR Planning	Assurance	Planned for 2008-2009
Governance and Oversight of Collaborative Initiatives/Processes	Assurance	Planned for 2008-2009
Travel	Assurance	Planned for 2008-2009
Hospitality	Assurance	Planned for 2008-2009
Financial Transaction Recording	Assurance	Planned for 2008-2009
Grants and Contributions - Proposal Assessment Process	Assurance	Planned for 2008-2009
2008/2009 Attest Audit of the Administrative Costs charged to the CPP Account	Attest	Planned for 2009-10
Student Financial Assistance (CSLP)	Assurance	Planned for 2009-10
Aboriginal Human Resources Development Strategy	Assurance	Planned for 2009-10
Trades and Apprenticeship	Assurance	Planned for 2009-10
Wage Earner Protection Program	Assurance	Planned for 2009-10
Literacy	Assurance	Planned for 2009-10
Values and Ethicsa	Follow-up	Planned for 2009-10
Risk Managementa	Follow-up	Planned for 2009-10
Results Identification and Performance Managementa	Assurance	Planned for 2009-10
Authority, Responsibility and Accountability - Communication and Understanding	Assurance	Planned for 2009-10
Knowledge and Talent Management	Assurance	Planned for 2009-10
Financial Management Policies, Authorities and Practices	Assurance	Planned for 2009-10
Taxis	Assurance	Planned for 2009-10
Memberships	Assurance	Planned for 2009-10
Comparison of Business Results versus Expectations	Assurance	Planned for 2009-10
aAudit required for the Chief Audit Executive holistic opinion as per the Treasury Board Policy on Internal Audit: "Chief audit executives (are to) provide annual holistic opinions to deputy heads and audit committees on the effectiveness and adequacy of risk management, control, and governance processes in their departments, as well as reporting on individual risk-based audits." Please Note:Once approved, HRSDC internal audits reports are posted on the website listed below. http://www.hrsdc.gc.ca/en/cs/fas/iarms/toc.shtml Service Canada Internal Audit The Service Canada internal audit capacity has continued to grow by developing and using a systematic plan and disciplined approach to assess and improve the effectiveness of risk management, internal control, and governance processes. The emphasis of the work conducted by the Internal Audit Branch has been on the effectiveness and efficiency of operations; the reliability and integrity of financial and operational information; the safeguarding of departmental assets; and compliance with laws, regulations, and contractual obligations. The following list is representative of the audit work completed and still in progress carried out by the Service Canada Internal Audit Branch.
Name of Audit	Audit Type	Status	Expected Completion Date
Review of the March 31, 2007 HRSDC departmental financial statements	Assurance	In progress	January 2008
Annual Audit of the Old Age Security Program Expenditures for 2006-07 Fiscal Year	Assurance	In progress	January 2008
Compliance with Management of IT Security Standards (MITSS)	Assurance	In progress	January 2008
Record of Employment Web	Assurance	In progress	January 2008
EI: Segregation of Duties	Follow-up Audit	In progress	November 2007
Review of General Computer Controls	Assurance	In progress	January 2008
Complete the Old Age Security Program mapping and assessment of financial controls	Assurance	In progress	March 2008
Receipt and Reporting of Public Funds	Assurance	Not started	TBD
Management of Canada Pension Pan	Assurance	In progress	January 2008
Financial and Activity Monitoring of Aboriginal Human Resource Development Strategy (AHRDS)	Assurance	In progress	March 2008
Grants and Contributions 'Spot Audits'	Assurance	In progress	March 2008
Audit of Records Management Related to Contracting and Procurement (joint with HRSDC)	Assurance	In progress	June 2008
Post-Implementation Audit of the Service Canada College	Assurance	In progress	June 2008
Audit of the Public Service Modernisation Act Post-Implementation	Assurance	In progress	June 2008
Business Continuity Planning	Assurance	In progress	March 2008
Consolidated Statement of Administrative Costs Charged to the Canada Pension Plan Account for the March 31, 2007 year-end	Assurance	In progress	January 2008
Review of the March 31, 2008 HRSDC departmental financial statements	Assurance	Not started	January 2009
Annual Audit of the Old Age Security Program Expenditures for the 2007-08 fiscal year	Assurance	Not started	January 2009
Consolidated Statement of Administrative Costs Charged to the Canada Pension Plan Account for the March 31, 2008 year-end	Assurance	Not started	January 2009
Review of the Canada Pension Plan Base Program Expenditures	Assurance	Not started	TBD
Please Note: *Once approved by the Audit and Evaluation Committee, Service Canada internal audit reports are posted on the website listed below. http://www1.servicecanada.gc.ca/en/cs/fas/iarms/servcan/iab.shtml

 

Table 9 - Loans (Non-budgetary)

http://www.tbs-sct.gc.ca/rpp/2008-2009/info/info-eng.asp

Table 10 Progress Towards the Departments Regulatory Plan

Regulations Labour Program 1.Wage Earner Protection Program 2. Occupational Health and Safety - Part XX - Violence in the Workplace 3. Aviation Occupational Health and Safety 4. Maritime Occupational Health and Safety 5. Canada Occupational Health and Safety 6. Donkin Coal Block 7. Point Lepreau Generating Station Exclusion from Part I, Part II, and Part III of the Canada Labour Code Income Security and Social Development 8. The Canada Disability Savings Regulations 9. Regulations to operationalize Bill C-36 amendments to the Canada Pension Plan and the Old Age Security Act. Skills and Employment 10. Regulatory and legislative initiatives required to address Employment Insurance policy and operational priorities will be undertaken as necessary. 11. Amendments to the Immigration and Refugee Protection Regulations, in collaboration with Citizenship and Immigration Canada, will be undertaken to strengthen program integrity and to put in place employer monitoring and compliance measures. Learning 12. Changes to the Canada Student Loans Regulations (CSLR) and the Canada Student Financial Assistance Regulations (CSFAR) Further information on these projects can be found at http://www.tbs-sct.gc.ca/rpp/2008-2009/info/info-eng.asp

Table 11- Services Received Without Charge

http://www.tbs-sct.gc.ca/rpp/2008-2009/info/info-eng.asp

 

Table 12 - Sources of Respendable and Non-respendable Revenue

http://www.tbs-sct.gc.ca/rpp/2008-2009/info/info-eng.asp

Specified Purpose Accounts

Introduction to Specified Purpose Accounts

Specified Purpose Accounts consist of 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 Account;
• the Canada Pension Plan;
• the Government Annuities Account; and
• the Civil Service Insurance Fund.

The Employment Insurance Account is a consolidated Specified Purpose Account and is included in the financial reporting of the Government of Canada. Consolidated Specified Purpose Accounts 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 Canadian Pension Plan is a Specified Purpose Account but is not consolidated as part of the Government of Canada financial statements. It is under joint control of the Government and participating provinces. As administrator, the Government's authority to spend is limited to the balance of the Plan.

The Government Annuities Account is a consolidated Specified Purpose Account 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 Specified Purpose Account 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.

Employment Insurance Account

Description

The Employment Insurance Account was established in the Accounts of Canada by the Employment Insurance Act to record all amounts received or paid out under that Act. The Employment Insurance Act provides short-term financial relief and other assistance to eligible workers. The program covers all workers in an employer-employee relationship. Self-employed fishers are also included under special regulation of the Employment Insurance Act.

Employment Insurance provides:

• Income Benefits under Part I of the Employment Insurance Act provide temporary income support to claimants, including self-employed fishers, while they look for work. This includes work sharing agreements for temporary work shortages to allow employees to receive pro-rated Employment Insurance benefits while working for part of a week, thus avoiding layoffs. Employment Insurance also provides four types of special benefits: maternity benefits, payable to biological mothers for work missed as a result of pregnancy and childbirth; parental benefits, payable to both biological and adoptive parents for the purpose of caring for a new born or adopted child; sickness benefits, payable to claimants who are too ill to work; and compassionate care benefits, payable to claimants who provide care to a gravely ill or dying family member.
• Empoyment Benefits under Part II of the Employment Insurance Act through a set of Employment Benefits and Support Measures that can be tailored to meet the needs of individuals and local circumstances. The Government of Canada has Labour Market Development Agreements with the governments of the provinces and territories. These enable provincial and territorial governments to assume direct responsibility for the design and delivery of these benefits or to take part in co-management arrangements with the federal government.

Employers and workers pay all costs associated with Employment Insurance through premiums. Benefits and administrative costs are paid out of the Consolidated Revenue Fund and charged to the Employment Insurance Account. A surplus in the Account generates notional interest at a rate established by the Minister of Finance, which is currently set at 90% of the monthly average of the three-month Treasury bill rate.

Financial Summary

The Employment Insurance premium rate for the calendar year 2008 was set on an expected break-even basis on October 29, 2007 by the Employment Insurance Commission in accordance with the Employment Insurance Act. The 2008-2009 total revenues of $16.7 billion forecasted during Fall 2007 are expected to correspond to the costs of $16.7 billion also forecasted in Fall 2007.

The following chart summarizes trends in total costs and revenues of the Employment Insurance Account from 1999-2000 to 2008-2009.

EI ACCOUNT - COSTS AND REVENUES TREND (EXCLUDING INTEREST)

The table below summarizes the Employment Insurance premiums and expenditures from 2005-2006 financial results to 2008-2009.

EI Account - Premiums and Expenditures Summary

(in millions of dollars)	Actual		Forecast	Forecasta As of Oct 12, 2007
	2005-2006	2006-207	2007-2008	2008-2009
Expenditures
EI Benefits
Income Benefits	12,402	11,993	12,260	12,833
EBSM	2,016	2,087	2,136	2,144
Total EI Benefits	14,418	14,079	14,396	14,977
Administrative Costs	1,576	1,636	1,683	1,631
Doubtful Accounts	56	99	102	106
Sub-Total	16,050	15,815	16,180	16,713
EI Premiums and Penalties
Premium Revenueb	16,917	17,109	16,737	16,652
Penalties	50	56	58	61
Sub-Total	16,967	17,165	16,795	16,713
Variance	917	1,351	615	-
aForecasts are as of October 12, 2007 when the Chief Actuary submitted his report on the premium rate to the Employment Insurance Commission. bThe Employment Insurance premiums reported in the summary financial statements of the Government of Canada exclude the premium contributions made by the Government of Canada as an employer. Note: Totals may not add due to rounding.

Benefit Payments

Benefits in 2008-2009 are expected to reach $15.0 billion⁹ , consisting of $12.8 billion for Income Benefits and $2.1 billion for Employment Benefits and Support Measures.

Income Benefits

Employment Insurance Income Benefits include regular, special, work-sharing and fishers' benefits¹⁰. Major aspects of these benefits are as follows:

Regular Benefits

Entrance Requirements to Qualify for Benefits

• Most claimants require 420 to 700 hours of work during their qualifying period, from full-time or part-time work, whether with one employer or several. The exact number of hours required, called the "variable entrance requirement", is determined by the rate of unemployment in a claimant's region at the time he or she applies for benefits. In general, the higher the rate of unemployment, the fewer hours of work required to qualify.
• People who have just entered the labour market ("new entrants") and those returning to the labour force after an absence ("re-entrants") require 910 hours of work. However, if they worked at least 490 hours in the preceding 12 months, or received at least one week of maternity or parental benefits in the four years before that, they will be eligible under normal rules the following year.

Determining the Benefit Rate and Entitlement

• Claimants for regular benefits may receive benefits for 14 to 45 weeks, depending upon their hours of insurable employment and the regional unemployment rate.
• Claimants' weekly benefits are 55% of their average insurable earnings during the last 26 weeks, up to a maximum of $435, based on the maximum yearly insurable earnings of $41,100. The average insurable earnings are based on the actual weeks of work, subject to a minimum divisor that is tied to the regional rate of unemployment.
• Claimants with a combined family income of less than $25,921 and who qualify for the Canada Child Tax Benefit (CCTB) receive a Family Supplement based upon:
  • the net family income;
  • the number of dependent children; and
  • the ages of those dependent children.
• The benefit rate for claimants who receive a Family Supplement can be increased to a maximum of 80% of the claimant's average weekly insurable earnings, up to the maximum weekly benefit of $435.

Special Benefits

Claims for sickness, maternity, parental, or compassionate care benefits require 600 hours of work, and are not affected by the new entrant/re-entrant rule. All claimants may receive sickness benefits for up to 15 weeks. Parental benefits of 35 weeks are available for biological and adoptive parents in addition to the 15 weeks of maternity benefits available to biological mothers. Compassionate care benefits of up to 6 weeks are available to eligible workers who take a temporary absence from work to provide care for a gravely ill family member who has a significant risk of death within a 26 week period.

On March 1, 2005 the Government of Canada and the Government of Quebec signed the final agreement on Quebec Parental Insurance Plan. As of January 2006, Quebec residents claim maternity and parental benefits from the Quebec provincial government.

Work Sharing

Claimants may receive benefits while on work-sharing agreements. These agreements between HRSDC, employees and employers avoid temporary layoffs by combining partial Employment Insurance benefits with reduced workweeks. They normally last from 6 to 26 weeks.

Fishers' Benefits

The benefit rate for claims for fishers' benefits depend on the earnings from fishing and the regional rate of unemployment, via the minimum divisor. All fisher claims have a 31-week maximum qualifying period and a fixed entitlement of 26 weeks of benefits. These can be claimed from October 1^st to June 15^th for summer fishers' benefits and April 1^st to December 15^th for winter fishers' benefits. Fishers can file claims for both seasons.

Benefit Repayments

When the net annual income of Employment Insurance claimants exceeds 1.25 times the maximum yearly insurable earnings ("the repayment threshold"), they have to repay the lesser of 30% ("the repayment rate") of the net excess income or 30% of the amount of total benefits other than special benefits paid. In addition, first-time claimants of regular or fishing benefits are exempt from benefit repayment.

EI Income Benefints - Expenditures

(millions of dollars)	Actual		Forecast	Planned Spending
	2005-2006	2006-207	2007-2008	2008-2009
Income Benefits
Regular	8,411	8,446	8,461	8,928
Sickness	835	885	922	946
Maternity	903	778	833	855
Parental	2,064	1,763	1,909	1,959
Compassionate Care	8	9	10	10
Fishing	285	260	276	283
Work Sharing	13	8	15	15
Benefit Repayments	(117)	(157)	(166)	(169)
Total Income Benefits	12,402	11,993	12,260	12,827
Note: Totals may not add due to rounding.

 

Factors Afecting Income Benefits

	Actual		Forecast	Planned Spending	% Change
	2005-2006	2006-207	2007-2008	2008-2009
Income Benefits ($ million)	12,402	11,993	12,260	12,827	4.6%
Average Monthly Beneficiaries (000's)	788	738	732	749	2.3%
Benefit Rate ($/week)	302	312	321	329	2.3%

Employment Benefits and Support Measures

The Employment Benefits include Skills Development, Job Creation Partnerships, Self-Employment and Targeted Wage Subsidies.

The Support Measures include Employment Assistance Services, Labour Market Partnerships and Research and Innovation.

Part II of the Employment Insurance Act also authorizes the federal government to make payments to the governments of the provinces and territories for implementing programs similar to Employment Benefits and Support Measures. The planned federal contribution to provinces and territories (i.e., New Brunswick, Quebec, Ontario, Manitoba, Saskatchewan, Alberta, Northwest Territories and Nunavut) under Labour Market Development Agreements is $1,421 million for 2008-2009.

The total planned spending for Employment Benefits and Support Measures in 2008-2009 is set at $2,136 million.

Employement Benefits and Support Measures

(millions of dollars)	Actual		Forecast	Planned Spendinga
	2005-2006	2006-207	2007-2008	2008-2009
Job Creation Partnerships	54	49	34
Skills Development	410	398	277
Self-Employment	107	88	61
Targeted Wage Subsidies	42	36	25
Employment Assistance	322	287	200
Labour Market Partnerships	177	158	110
Research & Innovation	15	15	10
Total HRSDC Programs	1,127	1,031	718	715
Transfers to Provinces and Territories	889	1,056	1,418	1,421
Total	2,016	2,087	2,136	2,136
aBreakdown by component is not available, as spending will be guided by local labour market needs. Breakdown by provinces/territories is provided in the EI Part II - 2008-2009 Expenditure Plan. Note: Totals may not add due to rounding.

Premiums

Premiums are collected from insured employees and their employers to cover the program costs over a business cycle, based on a yearly premium rate and employees' insurable earnings. The factors affecting the premiums are further explained below:

Premium Rate:

Under the current rate-setting process, the Chief Actuary is required to annually calculate, on a forward-looking basis, the estimated break-even rate for the coming year based on the most current forecast values of the relevant economic variables provided by the Minister of Finance. The forward-looking basis means that past surpluses, deficits, and the notional interest credited to the Employment Insurance Account do not enter into the calculation of the "break-even" premium rate. For 2008, the Commission set the employee rate at 1.73% of insurable earnings, a reduction from the 2007 rate of 1.80%. The corresponding employer rate is 2.42%, a reduction from 2.52% in 2007.

Employee Premium Rate Trend (% of Insurable Earnings)

Maximum Yearly Insurable Earnings (MYIE): Premiums are paid on all employment earnings of insured employees up to the MYIE. The Chief Actuary has calculated the MYIE for 2008 as being $41,100, up $1,100 from the 2007 level.

Premium Reduction: Employers with qualified wage-loss insurance plans are entitled to premium reductions. They are required to share this reduction with their employees.

Additionally, due to the Quebec Parental Insurance Plan, the premium rate for employees in Quebec will be reduced to 1.39% in 2008 and the corresponding rate for employers to 1.95%.

Premium Refund:

• Workers with annual earnings of $2,000 or less can receive a refund of their Employment Insurance premiums through the income tax system.

Employment Insurance premiums are refunded to employees when their insurable earnings are in excess of the maximum yearly insurable earnings.

Interest Earned

Section 76 of the Employment Insurance Act stipulates that the Minister of Finance may authorize the payment of interest on the balance in the Employment Insurance Account in accordance with such terms and conditions and at such rates as the Minister of Finance may establish, and the interest, which is currently set at 90% of the three-month Treasury bill rate, shall be credited to the Employment Insurance Account and charged to the Consolidated Revenue Fund. Interest is calculated monthly, based on the 30-day average of the daily balance in the Account.

Interest is charged on overdue accounts receivable, caused through misrepresentation, in accordance with Treasury Board regulations. The interest rate used in this calculation is the average Bank of Canada discount rate for the previous month plus 3.0%.

Interest earned is expected to decrease to $2.0 billion due to lower expected interest rates in 2008-2009 partially offset by a higher cumulative surplus, which totalled $54.1 billion as of March 31, 2007.

Interest Earned

(millions of dollars)	Actual		Forecast	Planned Spending
	2005-2006	2006-207	2007-2008	2008-2009
Sources
Account Balance	1,324	1,912	2,063	1,948
Accounts Receivable	28	39	40	42
Total	1,352	1,952	2,103	1,990

Administrative Costs

Section 77 of the Employment Insurance Act specifies that the costs of administering the Act are to be charged to the Employment Insurance Account.

The Minister of Human Resources and Social Development is responsible for reporting on the Employment Insurance Program to Parliament. However, the Canada Revenue Agency (CRA), which collects premiums and benefit repayments and provides decisions on insurability under the Act, shares the administration of the Program. Treasury Board Secretariat and the Department of Justice all supply services that support management and delivery of programs under the Employment Insurance Act.

The administrative costs that provincial and territorial governments incur to administer Employment Benefits and Support Measures under the Labour Market Development Agreements are also charged to the Employment Insurance Account.

The $1,635 million Employment Insurance administrative costs are the initial approved resources for 2008-2009, which are less than the forecast for 2007-2008 due to the completion of the mainframe upgrade in 2007-2008.

Administrative Costs

(millions of dollars)	Actual		Forecast	Planned Spending
	2005-2006	2006-207	2007-2008	2008-2009
Federal	1,494	1,536	1,545	1,478
Provincial	92	111	150	169
Recovery	(9)	(11)	(12)	(12)
Total	1,576	1,636	1,683	1,635
Note: Totals may not add due to rounding.

Canada Pension Plan

Description

The Canada Pension Plan is a contributory, earnings-related social insurance program. It is a joint federal-provincial plan that operates throughout Canada, except in Quebec, which has its own comparable plan. The Canada Pension Plan provides for a variety of benefits based on life changes. Best known for its retirement pensions, the Canada Pension Plan also provides benefits for surviving partners and children of Canada Pension Plan contributors, persons with disabilities and their children, and a one-time maximum benefit of up to $2,500 in the event of the death of a contributor.

As a contributory plan, contributors are employees or self-employed persons generally between the ages of 18 and 70, who earn at least a minimum amount ($3,500) during a calendar year. Benefits are calculated based on how much and for how long a contributor has paid into the Canada Pension Plan. Benefits are not paid automatically - everyone must apply and provide proof of eligibility.

Approximately 12 million Canadians over the age of 18 currently contribute annually to the Plan and approximately 4.4 million Canadians will receive benefits during 2008-2009.

Benefit Payments

Retirement Pensions:

Contributors may begin receiving Canada Pension Plan retirement pensions as early as age 60 or delay receipt until age 70. Applicants who are between 60 and 65 must have stopped working or earn below a specified level when they begin to receive the retirement pension. Once that person starts receiving the Canada Pension Plan pension, he/she can earn any amount without affecting the Canada Pension Plan pension. However, contributions are not made to the Canada Pension Plan on any future earnings. Contributors over age 65 need not have stopped working to qualify.

The amount of each contributor's pension depends on how much and for how long he/she has contributed and at what age he/she begins to draw the benefits. Pensions are adjusted by 0.5 percent for each month before or after age 65 from the time a person begins to receive his/her pension. Contributors who begin receiving a retirement pension at age 60 will receive 70% of the amount that would otherwise be payable at age 65, while those who delay receiving a pension until age 70 will receive 130% of the amount payable at age 65.

Spouses and common-law partners who are at least 60 years of age can share their retirement benefits earned during the period of cohabitation as long as they remain together. This may result in tax savings. If only one spouse is a Canada Pension Plan contributor, the pension can be shared between the two spouses. The overall benefits paid do not increase or decrease with pension sharing.

Disability Benefits:

Disability benefits are payable to contributors who meet the minimum contributory requirements and whose disability is "severe and prolonged", as defined in the legislation. Such a disability would prevent them from working regularly at any job in a substantially gainful manner for a prolonged period of time. In order to ensure that benefits are only paid to eligible beneficiaries, periodic reassessments are carried out. Support is also provided to clients who try to return to regular gainful employment. Children of Canada Pension Plan disability beneficiaries are also eligible for a flat rate monthly benefit up to the age of 18, or up to age 25 if attending school full time. As of December 2007, there were just over 308,000 beneficiaries and 86,700 children receiving monthly benefits.

Survivor's Benefits:

A contributor's surviving spouse/common-law partner may be eligible for a monthly benefit if the contributor has contributed for a minimum period and, if at the time of the contributor's death, the spouse/common-law partner was at least 35 years old or was under age 35 and either had dependent children or was disabled. Payments continue in the event that the surviving spouse/common-law partner remarries. Monthly benefits are also payable on behalf of the children of Canada Pension Plan contributors who die. The amount is a flat rate and is payable until the child reaches age 18, or up to age 25 if he or she attends school full time. A lump-sum benefit is also available to the estate of the deceased contributor provided the minimum contributory requirements have been met.

Canada Pension Plan Benefit Payments by Category and Type

(millions of dollars)	Actual		Forecast	Planned Spending
	2005-2006	2006-207	2007-2008	2008-2009
Retirement pensions	17,664	18,662	19,821	21,098
Disability benefits
Disability pensions	3,105	3,134	3,258	3,447
Benefits to children of disabled contributors	268	272	270	273
Disability benefits total	3,373	3,406	3,528	3,720
Survivor benefits
Surviving spouse or common law partner's benefits	3,459	3,569	3,671	3,784
Orphans' benefits	218	218	216	220
Death benefits	263	260	278	284
Survivor benefits total	3,940	4,047	4,165	4,288
TOTAL	24,977	26,115	27,514	29,106

Determining the Benefit Rate

Canada Pension Plan benefits are largely related to earnings. Benefits are adjusted in January of each year to reflect increases in the average cost of living, as measured by the Consumer Price Index. Benefits such as children's benefits are not based on earnings; they are a fixed amount. Disability and survivor benefits contain a fixed-rate or flat rate portion in addition to an earnings related portion.

Administrative Expenses

Human Resources and Social Development Canada, the Treasury Board Secretariat, Public Works and Government Services Canada, the Royal Canadian Mounted Police, the Canada Revenue Agency, the Office of the Superintendent of Financial Institutions, the Department of Finance Canada and the Canada Pension Plan Investment Board supply services that support the management and delivery of the Canada Pension Plan.

Costs incurred by these departments and agencies in administering the Plan are recoverable from the Account based on the costing principles approved by Treasury Board. Essentially, those principles are that costs must be incurred because of Canada Pension Plan responsibilities and must be traceable. Administrative expenses for 2008-2009 are estimated at $568.5 million, representing a decrease of 0.6% from the forecast for 2007-2008.

Benefits delivery staff and processes are extremely efficient in getting benefits into the hands of Canada Pension Plan contributors. In 2007-2008, the total cost for administering and delivering Canada Pension Plan benefits is approximately 2.1% of the total forecasted benefit payments.

Canada Pension Plan Administrative Expenses by Department

(millions of dollars)	Actual		Forecast	Planned Spending
	2005-2006a	2006-207	2007-2008	2008-2009
Social Development Canada
Plan administration, operations, records, and accommodation	226.3	-	-	-
Human Resources and Skills Development Canada
In-person services for applicants and beneficiaries	15.2	-	-	-
Human Resources and Social Development Canada
Plan administration, operations, records, and accommodation	-	261.9	261.2	246.9
EI Account - Refunding of Employment Insurance Account in relation to assignment of Social Insurance numbers and maintenance of the central index	2.7	4.2	4.2	4.2
Treasury Board Secretariat
Insurance premiums and recoverable contributions to the Employee Benefit Plan	45.4	43.8	36.5	42.5
Public Works and Government Services
Cheque issue, Electronic Data Processing services	16.4	13.6	11.9	10.9
Royal Canadian Mounted Police
Investigation of contraventions	0.1	0.2	0.2	0.3
Canada Revenue Agency
Collection of contributions	100.8	133.7	140.8	146.4
Office of the Superintendent of Financial Institutions
Actuarial services	1.3	1.4	1.8	2.0
Department of Finance Canada
Investment services	0.2	0.2	0.3	0.3
Canada Pension Plan Investment Board b	54.0	115.0	115.0	115.0
TOTAL	462.4	574.0	571.9	568.5
aThe 2005-2006 actual administrative expenses have been restated. b The 2007-2008 forecast and 2008-2009 planned spending are based on the 2006-2007 actual expenses.

Revenues

The Canada Pension Plan is financed through mandatory contributions from employees, employers and self-employed persons, as well as from investment income. Contributions are paid on the portion of a person's earnings that falls between a specified minimum (the Year's Basic Exemption) and maximum (the Year's Maximum Pensionable Earnings) amounts. The minimum remains constant at $3,500, while the maximum amount is linked to the average Canadian industrial wage and is adjusted annually. No contributions are made once a contributor begins to receive a Canada Pension Plan retirement pension, while receiving a disability pension or reaches the age of 70. Disbursements include the payment of Canada Pension Plan benefits and administrative expenditures associated with managing the program.

When it was introduced in 1966, the Canada Pension Plan was designed as a pay-as-you-go plan, with a small reserve. This meant that the benefits for one generation would be paid largely from the contributions of later generations. However, demographic and economic developments and changes to benefits in the 30 years that followed resulted in significantly higher costs. It became clear that to continue to finance the program on a pay-as-you-go basis would have meant imposing a high financial burden on Canadians in the work force during those years. Plan administrators chose instead to change the funding approach of the Plan to a hybrid of pay-as-you-go and full-funding.

In 1998, the federal and provincial governments introduced "steady-state" financing. Under steady-state financing, the contribution rate was increased incrementally, from 5.6% in 1996, to 9.9% in 2003, and remains at that rate. The Office of the Superintendent of Financial Institutions' 23^rd Actuarial Report on the sustainability of the Canada Pension Plan states that the actual steady-state contribution rate is 9.82% of contributory earnings for year 2010 and thereafter. This rate represents the lowest rate sufficient to sustain the Plan with respect to the two financing objectives as highlighted in Bill C-36 without further increase and is 0.08% lower than the legislated 9.9% contribution rate. With the 9.9% legislated contribution rate, the assets are expected to increase significantly over the next 13 years, with the ratio of assets to the following year's expenditures growing from 4.1 in 2006 to 5.5 by 2019 and to 6.0 by 2050¹¹.

This approach will generate a level of contributions between 2001 and 2019 that exceeds the benefits paid out every year during that period. Funds not immediately required to pay benefits are transferred to the Canada Pension Plan Investment Board for investment in financial markets. Over time, this will create a large enough reserve to help pay the costs that are expected as more and more baby-boomers retire.

Adoption of this diversified funding approach has made the Canadian retirement income system less vulnerable to changes in economic and demographic conditions and a leading edge example of public pension plan management in the world.

Investment Income:

Income is earned on the investments in equities, real estate and money market securities as well as interest earned by bonds.

Financial Accountability

The Canada Pension Plan and its resources are divided among three components:

• The Canada Pension Plan Account was established to record the contributions, interest, pensions and benefits and administrative expenditures of the Plan. In September 2004, the Operating Reserve¹² in the Canada Pension Account began to be transferred to the Canada Pension Plan Investment Board and was completed in August 2005. As well, since September 2004, the Canada Pension Plan Investment Board receives any excess funds not needed to pay for Canada Pension Plan benefits and expenses based on weekly, monthly and 6-month forecasts generated by the Canada Pension Plan Accounting personnel.
• The Canada Pension Plan Investment Fund was established to record investments in the securities of the provinces, territories and Canada. Following the adoption of Bill C-3 in April 2004, the Canada Pension Plan Investment Fund was gradually transferred to the Canada Pension Plan Investment Board over a period of 3 years. The transfer of the Canada Pension Plan Investment Fund started May 1, 2004 and ended on April 1, 2007. On that day, the Canada Pension Plan Investment Fund ceased to exist.
• The Canada Pension Plan Investment Board is an arm's length Crown Corporation established by an Act of Parliament in December 1997. It began operations in March 1999 to help the Canada Pension Plan achieve steady-state funding by investing funds not required by the Canada Pension Plan to pay current pensions and earning investment returns on funds transferred from the Canada Pension Plan Account.¹³ The Board is accountable to the public and governments through regular reports. It is subject to broadly the same investment rules as other pension funds in Canada.

Financial Summary

Benefit payments are expected to reach $29.1 billion in 2008-2009, an increase of $1.6 billion or 5.8% over 2007-2008. This increase reflects forecasts of client population and average benefit payments. In 2008-2009, it is expected that there will be a net increase in client population of 3.6% and a net increase in average benefit payments of 2.1%.

The following table summarizes the financial results for the Canada Pension Plan from 2005-2006 to 2008-2009. In 2002-2003, the Government of Canada changed its basis of accounting from the modified accrual accounting to the full accrual basis of accounting. This change in accounting policy has been applied retroactively and the financial statements have been restated accordingly.

As well, following the adoption of Bill C-3 during 2003-2004, the evaluation of the provincial, territorial and federal bonds was changed from cost to fair value. The change in accounting policy has been applied retroactively and the financial statements have been restated to reflect this.

Canada Pension Plan's cumulative balance is expected to increase to approximately $124.7 billion by March 31, 2008. At present, the Canada Pension Plan has a fund equal to 4 times the benefits and this is expected to grow to about 5.6 times by 2021.

Canada Pension Plan Summary

(in millions of dollars)	Actual		Forecast	Planned Spending
	2005-2006	2006-207	2007-2008	2008-2009
Revenue
Contributions	30,117	32,355	32,987	34,818
Investment Income
Canada Pension Plan b	21	9	7	6
CPP Investment Board c	12,193	12,788	-	-
CPP Investment Fund d	818	247	-	-
Total Investment Income	13,032	13,044	7	6
Total Revenue	43,149	45,399	32,994	34,824
Expenditures
Benefits payments	24,977	26,115	27,514	29,106
Administrative expenses	462	574	572	569
Total Expenditures	25,439	26,689	28,086	29,675
Increase	17,710	18,710	4,908	5,149
Year-end balances	101,121	119,831	124,739	129,888
aThe 2005-2006 actual figures have been restated. b The Canada Pension Plan investment income only includes the interest earned on the daily operating balance. c Canada Pension Plan Investment Board actual amounts are based on their audited financial statements. The Canada Pension Plan Investment Board invests mainly in equities. The investment income is made up of the interest from the bonds as well as the change in fair values of other varied equity investments as of that date. It is difficult to forecast a future fair value on this type of income. Therefore the forecast investment income for the year 2007-2008 and 2008-2009 is not provided. d The Canada Pension Plan Investment Fund is made up of provincial, territorial and government bonds. Since March 31, 2004, these are valued at fair value. The revenue of the Fund is made up of the interest from the bonds as well as the change in fair values of these investments. As at April 1, 2007, the Investment Fund ceased to exist as all the rights and titles of the bonds were transferred to the Canada Pension Plan Investment Board.

Long-Term Forecast

The Canada Pension Plan legislation requires a schedule of contribution rates with a review every three years by the federal and provincial finance ministers. The review determines whether any adjustments to the schedule are necessary. If so, the adjustments are implemented through legislation or agreement among finance ministers, or automatically under a formula that ensures that the contribution rate will be sufficient to sustain the Plan in the face of an aging population. Amendments to the rate schedule or the automatic regulation require the approval of at least two thirds of the provinces with at least two thirds of the population of all the provinces.

The following table shows the forecast of revenues and expenditures affecting the Canada Pension Plan for the period between December 31, 2010 and December 31, 2035, based on the Office of the Superintendent of Financial Institutions' Actuarial Report (23^rd) on the Canada Pension Plan as at December 31, 2006. The Assets/Expenditures Ratio reflects the size of the year-end assets relative to the expenditures.

Forecast of Revenues and Expenditures

Year	%	Millions of dollars				Assets/ Expenditure ratio
	Contribution Rate	Contributions	Investment Earnings	Expenditures	Assets at Dec. 31
2010	9.90	36,660	8,351	32,504	162,611	4.74
2015	9.90	44,963	14,386	42,729	234,965	5.20
2020	9.90	56,101	21,300	56,731	332,360	5.54
2025	9.90	69,366	28,031	74,756	441,987	5.61
2030	9.90	86,058	35,789	95,767	564,370	5.63
2035	9.90	106,704	45,143	119,607	711,709	5.70
Source: 23rd Actuarial Report from the Office of the Superintendent of Financial Institutions Canada (Table 11)

Government Annuities Account

This account 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 charged or surplus credited to the Consolidated Revenue Fund.

The purpose of the Government Annuities Act was to assist Canadians to provide for their later years, by the purchase of Government annuities. The Government Annuities Improvement Act increased the rate of return and flexibility of Government annuity contracts.

Income consists of premiums received, funds reclaimed from the Consolidated Revenue Fund for previously untraceable annuitants, earned interest and any transfer needed to cover the actuarial deficit. Payments and other charges represent matured annuities, the commuted value of death benefits, premium refunds and withdrawals, and actuarial surpluses and unclaimed items transferred to non-tax revenues. The amounts of unclaimed annuities, related to untraceable annuitants, are transferred to non-tax revenues.

As of March 31, 2007, there were 1,981 outstanding deferred annuities, the last of which will come into payment around 2030.

Government Annuities Account - Statement of Operations and Actuarial Liabilities

(millions of dollars)	Actual		Forecast	Planned Spending
	2005-2006	2006-2007	2007-2008	2008-2009
Actuarial Liabilities - Balance at beginning of year	377.2	347.2	319.4	295.5
Income	24.5	22.7	22.4	20.7
Payments and other charges	51.0	47.6	44.7	42.0
Excess of Payments and other charges over income for the year	26.5	24.9	22.3	21.3
Actuarial Surplus	3.5	2.9	1.6	1.5
Actuarial Liabilities - Balance at year-end	347.2	319.4	295.5	272.7

Civil Service Insurance Fund

This account was established by the Civil Service Insurance Act, under which the Minister of Finance could contract with permanent employees in the public service for the payment of certain death benefits. No new contracts have been entered into since 1954 when the Supplementary Death Benefit Plan for the Public Service and Canadian Forces was introduced as part of the Public Service Superannuation Act and the Canadian Forces Superannuation Act, respectively. As of April 1997, the Department of Human Resources Development assumed the responsibility for the administration and the actuarial valuation of the Civil Service Insurance Act.

The number of policies in force as of March 31, 2007 was 1,330 and the average age of the policy holders was 87.7 years. Receipts and other credits consist of premiums and an amount (charged to expenditures) which is transferred from the Consolidated Revenue Fund in order to balance the assets and actuarial liabilities of the program. Payments and other charges consist of death benefits, settlement annuities paid to beneficiaries and premium refunds.

Pursuant to subsection 16(3) of the Civil Service Insurance Regulations, any deficit will be credited to the Account from the Consolidated Revenue Fund.

Civil Service Insurance Fund - Statement of Operations and Balance

(in millions of dollars)	Actual		Forecast	Planned
	2005-2006	2006-2007	2007-2008	2008-2009
Opening Balance	6.6	6.3	6.0	5.7
Income and other credits	0.1	0.0	0.1	0.1
Payments and other charges	0.4	0.3	0.4	0.3
Excess of payments and other charges over income for the year	0.3	0.3	0.3	0.2
Closing Balance	6.3	6.0	5.7	5.5

Employment Insurance Part II - 2008-2009 Expenditure Plan

Background

Part II of the Employment Insurance Act commits the federal government to work in concert with provinces and territories in designing and implementing active employment programs that would be more effective in helping unemployed Canadians integrate into the labour market. These programs are called Employment Benefits and Support Measures and active employment programs similar to Employment Benefits and Support Measures.

In accordance with the Government of Canada's 1996 offer to provinces and territories to enter into bilateral partnerships on labour market activities, Labour Market Development Agreements have been concluded with all the provinces and territories. The Labour Market Development Agreements involve two types of arrangements:

• Transfer agreements where the province or territory assumes responsibility for the design and delivery of active employment programs similar to Employment Benefits and Support Measures. Such agreements have been concluded with New Brunswick, Quebec, Ontario, Manitoba, Saskatchewan, Alberta, the Northwest Territories and Nunavut. These similar programs are contributions under Section 63 of the Employment Insurance Act.
• Co-management agreements where Human Resources and Social Development Canada (HRSDC), formerly Human Resources and Skills Development Canada, and the province or territory jointly assume responsibility for the planning and design of Employment Benefits and Support Measures, while HRSDC continues to deliver programs and services through its service delivery network. Such agreements have been concluded with Newfoundland and Labrador, Prince Edward Island, Nova Scotia, British Columbia and the Yukon. There is also a strategic partnership agreement that is a variation of co management in Nova Scotia.

In Budget 2007, the Government of Canada announced its intention to offer to devolve the design and delivery of active employment programs to the four provinces and one territory where the co-managed agreements exist (Newfoundland and Labrador, Prince Edward Island, Nova Scotia, British Columbia and the Yukon). Negotiations will focus on establishing agreements to transfer responsibility for the design and delivery of active employment programs that are similar to Employment Benefits and Support Measures.

Specific areas of responsibilities for program delivery, timelines for implementation and funding requirements for system development costs and office re-fits are to be negotiated on an individual basis. These costs are the subject of a concurrent Treasury Board submission.

In addition to locally and regionally delivered Employment Benefits and Support Measures and similar programs, pan Canadian activities that are national or multi-regional in scope or purpose are delivered by HRSDC in any of the provinces and territories through its Employment Benefits and Support Measures . Pan Canadian activities include programming similar to Employment Benefits and Support Measures delivered by Aboriginal organizations under Aboriginal Human Resources Development Agreements.

Employment Benefits and Support Measures

The five employment benefits are:

• Targeted Wage Subsidies to encourage employers to hire individuals who they would not normally hire in the absence of a subsidy.
• Self-Employment to help individuals to create jobs for themselves by starting a business.
• Job Creation Partnerships to provide individuals with opportunities through which they can gain work experience which leads to on-going employment.
• Skills Development to help individuals to obtain skills for employment, ranging from basic to advanced skills through direct assistance to individuals, and, where applicable, contributions to provinces/territories or provincially/territorially funded training institutions to cover costs not included in tuition fees.
• Targeted Earnings Supplements to encourage individuals to accept employment by offering them financial incentives.

It should be noted that of the employment benefits listed above, Targeted Earnings Supplements has not been implemented. Pilot research projects were conducted to evaluate the effectiveness of Targeted Earnings Supplements but HRSDC has not yet arrived at a feasible design.

Eligibility to receive assistance under the employment benefits extends to persons who are insured participants as defined in Section 58 of the Employment Insurance Act, i.e., active Employment Insurance claimants and former Employment Insurance claimants (individuals who have had Employment Insurance claims that ended in the past three years or those who have received maternity or parental benefits in the past five years after which they left the labour market to care for newborn or new adopted children).

Part II of the legislation also authorizes the establishment of support measures in support of the National Employment Service. The three measures are:

• Employment Assistance Services to assist organizations in the provision of employment services to unemployed persons.
• Labour Market Partnerships to encourage and support employers, employee and/or employer associations and communities in developing and implementing strategies for dealing with labour force adjustments and meeting human resources requirements.
• Research and Innovation to support activities which identify better ways of helping persons prepare for or keep employment and be productive participants in the labour force.

Financial Data

For 2008-2009, the Employment Insurance Part II expenditure authority of $2.18 billion represents 0.5% of total estimated insurable earnings of $450.342 billion. This represents a lower level of expenditures than the 0.8% ceiling imposed under the Act, which is estimated at $3.603 billion in 2008-2009.

Some of the savings from Part I income benefits generated by the Employment Insurance reform are included in these funds to provide job opportunities and help Canadians get back to work more quickly. The amount of re investment reached maturity at $800 million in 2000-2001.

2008-2009 Employement Insurance Plan

(millions of dollars)	Base	Re-Investment	Total Plan
Newfoundland and Labrador	60.0	73.1	133.1
Nova Scotia	50.7	30.3	81.0
New Brunswick	50.6	42.1	92.7
Prince Edward Island	16.9	10.0	26.9
Quebec	350.5	248.1	598.6
Ontario	348.7	184.1	532.8
Manitoba	36.0	10.2	46.2
Saskatchewan	28.9	9.9	38.8
Alberta	69.9	35.9	105.8
Northwest Territories	1.7	1.6	3.3
Nunavut	1.8	1.0	2.8
British Columbia	132.6	151.7	284.3
Yukon	1.7	2.0	3.7
	1,150.0	800.0	1,950.0
Pan-Canadian Responsibilities a	186.3	0.0	186.3
Funds available for Employment Benefits and Support Measures	1,336.3	800.0	2,136.3
aFunds earmarked for Pan-Canadian priorities, such as Aboriginal programming, sectoral and innovations projects.

Expected Results

An accountability framework has been developed that respects the legal responsibility of the Minister of Human Resources and Social Development for the Employment Insurance Account. Key indicators will measure both the short and long term outcomes of Employment Benefits and Support Measures.

It is expected that 352,000 active and former claimants will be assisted in 2008-2009. These estimates may change, depending on labour market conditions and agreements achieved with provinces and territories.

Formative evaluations were completed during the initial implementation of Labour Market Development Agreement programming - between the years 1999 to 2002. They were focused on program design, delivery, implementation issues, client satisfaction and short term success.

More detailed information on the formative evaluations is available at:
http://www.hrsdc.gc.ca/en/publications_resources/evaluation/index.shtml

Summative evaluations of Employment Benefits and Support Measures are aimed at providing information on the impact of Employment Benefits and Support Measures in helping participants prepare for, find and keep jobs. In addition to employment impacts, these evaluations examine a range of outcomes related to Employment Benefits and Support Measures participation including skills gains, job quality and increased self-sufficiency in relation to government income support assistance.

Evaluation results to-date (both from formative and Summative studies) underscore the importance of the local socio-economic context and client characteristics on programming and program outcomes. Variances in local socio-economic situations appear to affect Employment Benefits and Support Measures implementation and effectiveness - suggesting the importance of tailoring programs to local needs to improve the outcomes of interventions.

Employment Benefits and Support Measures (EI Part II Activities)^a

	Clients Employed/Self-Employed	Unpaid Benefits	Active Claimants Servedb
Targeted Results 2006-2007c	201,227	$781.3M	362,703
Actual Results 2006-2007d	210,232	$868.0M	374,132
Targeted Results 2007-2008c	208,282	$840.6M	371,737
Expected Results 2008-2009	216,000	$850.0M	352,000
aIncludes Aboriginal Pan-Canadian clients. b"Active Claimants Served" includes Active Employment Insurance claimants for all regions/provinces/territories, as well as Former Employment Insurance claimants for Quebec. The Quebec agreement stipulates that the province report on both Active and Former Employment Insurance claimants. cTargeted results are submitted by the regions, provinces and territories. Added to these regional, provincial and territorial targets are Aboriginal Pan-Canadian targets which are based on the previous year's actual result. dRepresents one count per client, to avoid the double counting of clients who participated in both Regular and Aboriginal Pan-Canadian Employment Benefits and Support Measures.

Consolidated Report on Canada Student Loans

In August 2000, the Canada Student Loans Program (CSLP) 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 plan¹⁴.

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 move 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 CSLP. 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.

Specific Accounting Policies

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 CSLP accounts, but are reported separately in the financial statements of Human Resources and Social Development Canada (HRSDC) 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)¹⁵.

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 (CRA) 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

CSLP 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 (CSFA Act), the government has entered into arrangements with nine provinces and one territory to facilitate the administration of the CSLP. 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 CSLP.

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 CSLP 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 CSLP 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, CSLP compensates lending institutions for lost interest equal to the accrued interest amount on loans under Interest Relief (IR). 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 IR eligibility increased in order to make IR accessible to a greater number of borrowers.

Debt Reduction in Repayment

Debt Reduction in Repayment (DRR) assists borrowers experiencing long-term difficulties repaying their loans. DRR 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 DRR 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, CSLP pays the lending institutions the amount of student debt principal reduced by the Government of Canada under DRR. 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 (CRA) Collection Services will attempt to recover these amounts).¹⁶ 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 CSLP. These provinces and territories receive an alternative payment to assist in the cost of delivering a similar student financial assistance program.

Commitments

Starting March 17, 2008, the CSLP will enter into a new agreement with one single Service Provider. For the period from March 17, 2008 to March 31, 2009, the expected cash flow for Service Provider contracts is: $ 85.0 millions.

Consolidated Canada Student Loans Programs - Combined Programs

(millions of dollars)	Actual		Forecast	Planned Spendinge
	2005-2006	2006-207	2007-2008	2008-2009	2009-2010	2010-2011
Revenue
Interest Revenue on Direct Loans	315.7	453.3	474.7	551.5	619.7	681.6
Recoveries On guaranteed Loans a	66.8	55.3	49.0	52.6	53.3	47.6
Recoveries On Put-Back Loans a	13.1	14.5	13.7	15.2	15.4	13.8
Total Revenue	395.6	523.1	537.4	619.3	688.4	743.0
Expenses
Transfer Payments
Canada Study Grants and Canada Access Grants	129.7	146.4	153.7	142.9	142.8	142.9
Loan Administration
Collection Costs a	13.6	12.4	13.9	12.5	12.5	12.5
Service Bureau Costs	50.2	65.6	91.8	84.2	64.2	59.1
Risk Premium	2.7	1.8	1.5	1.3	0.9	0.2
Put-Back	4.3	4.7	3.7	5.2	5.4	5.6
Administrative Fees to Provinces and Territories and SIF	13.9	14.7	14.3	14.4	14.4	14.5
Total Loan Administration Expenses	84.7	99.2	125.2	117.6	97.4	91.9
Cost of Government Support
Benefits Provided to Students
In-Study Interest Borrowing Expense (Class A) b	159.3	185.7	190.5	195.7	208.5	220.9
In Repayment Interest Borrowing Expense (Class B) b	111.4	145.0	188.1	227.6	264.9	301.8
In-Study Interest Subsidy (Class A)	12.1	11.5	8.4	2.0	0.3	0.2
Interest Relief	67.2	84.2	114.4	101.3	104.6	106.2
Debt Reduction in Repayment	31.4	20.1	13.2	6.8	3.9	2.3
Claims Paid & Loans Forgiven	24.8	24.2	17.3	17.3	15.7	14.9
Bad Debt Expense c
Debt Reduction in Repayment Expense	13.3	9.6	13.6	14.3	14.4	14.5
Bad Debt Expense	297.2	260.4	339.2	363.8	375.5	388.4
Total Cost of Government Support Expenses	716.7	740.7	884.7	928.8	987.8	1,049.2
Total Expenses	931.1	986.3	1,163.6	1,189.3	1,228.0	1,284.0
Net Operating Results	535.5	463.2	626.2	570.0	539.6	541.0
Alternative Payments to Non-Participating Province and Territories d	158.2	91.3	107.4	117.9	117.7	118.1
Final Operating Results	693.7	554.5	733.6	687.9	657.3	659.1
a These costs are related to Canada Student Direct Loans but are now reported by 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 adjustment to 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 Province and Territories. The actual cash expense for Alternative Payments to Non-Participating Provinces and Territories for 2006-2007was $ 117.6 M. e 2007-2008 and ongoing planned spending years include CSLP related amounts stemming from the Budget 2007 announcement.

 

Consolidated Canada Student Loans Programs - Direct Loans Only

(millions of dollars)	Actual		Forecast	Planned Spendinge
	2005-2006	2006-207	2007-2008	2008-2009	2009-2010	2010-2011
Revenue
Interest Revenue on Direct Loans	315.7	453.3	474.7	551.5	619.7	681.6
Expenses
Transfer Payments
Canada Study Grants and Canada Access Grants	129.7	146.4	153.7	142.9	142.8	142.9
Loan Administration
Collection Costs a	6.9	7.1	9.4	7.8	7.8	7.8
Service Bureau Costs	50.2	65.6	91.8	84.2	64.2	59.1
Administrative Fees to Provinces and Territories and SIF	13.9	14.7	14.3	14.4	14.4	14.5
Total Loan Administration Expenses	71.0	87.4	115.5	106.4	86.4	81.4
Cost of Government Support
Benefits Provided to Students
In-Study Interest Borrowing Expense (Class A) b	159.3	185.7	190.5	195.7	208.5	220.9
In Repayment Interest Borrowing Expense (Class B) b	111.4	145.0	188.1	227.6	264.9	301.8
Interest Relief	43.9	63.4	97.9	93.2	99.6	103.8
Loans Forgiven	9.1	7.2	7.6	9.8	10.8	11.8
Bad Debt Expense c
Debt Reduction in Repayment Expense	13.3	9.6	13.6	14.3	14.4	14.5
Bad Debt Expense	297.2	260.4	339.2	363.8	375.5	388.4
Total Cost of Government Support Expenses	634.2	671.3	836.9	904.4	973.7	1,041.2
Total Expenses	834.9	905.1	1,106.1	1,153.7	1,202.9	1,265.5
Net Operating Results	519.2	451.8	631.4	602.2	583.2	583.9
Alternative Payments to Non-Participating Province and Territories d	158.2	91.3	107.4	117.9	117.7	118.1
Final Operating Results	677.4	543.1	738.8	720.1	700.9	702.0
aThese costs are related to Canada Student Direct Loans but are now reported by 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 adjustment to 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 Province and Territories. The actual cash expense for Alternative Payments to Non-Participating Provinces and Territories for 2006-2007 was $ 117.6 M. e 2007-2008 and ongoing planned spending years include CSLP related amounts stemming from the Budget 2007 announcement.

 

Consolidated Canada Student Loans Programs - Risk-Shared and Guaranteed Loans Only

(millions of dollars)	Actual		Forecast	Planned Spendinge
	2005-2006	2006-207	2007-2008	2008-2009	2009-2010	2010-2011
Revenue
Recoveries On guaranteed Loans a	66.8	55.3	49.0	52.6	53.3	47.6
Recoveries On Put-Back Loans a	13.1	14.5	13.7	15.2	15.4	13.8
Total Revenue	79.9	69.8	62.7	67.8	68.7	61.4
Expenses
Loan Administration
Collection Costs a	6.7	5.3	4.5	4.7	4.7	4.7
Risk Premium	2.7	1.8	1.5	1.3	0.9	0.2
Put-Back	4.3	4.7	3.7	5.2	5.4	5.6
Total Loan Administration Expenses	13.7	11.8	9.7	11.2	11.0	10.5
Cost of Government Support
Benefits Provided to Students
In-Study Interest Subsidy (Class A)	12.1	11.5	8.4	2.0	0.3	0.2
Interest Relief	23.3	20.8	16.5	8.1	5.0	2.4
Debt Reduction in Repayment	31.4	20.1	13.2	6.8	3.9	2.3
Claims Paid & Loans Forgiven	15.7	17.0	9.7	7.5	4.9	3.1
Total Cost of Government Support Expenses	82.5	69.4	47.8	24.4	14.1	8.0
Total Expenses	96.2	81.2	57.5	35.6	25.1	18.5
Net Operating Results	16.3	11.4	(5.2)	(32.2)	(43.6)	(42.9)
a These costs are related to Canada Student Direct Loans but are now reported by Canada Revenue Agency. b 2007-2008 and ongoing planned spending years include CSLP related amounts stemming from the Budget 2007 announcement.

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