2008-2009
Reports on Plans and Priorities

Human Resources and Social Development Canada

The Honourable Monte Solberg, P.C., M.P
Minister of Human Resources and Social Development

The Honourable Jean-Pierre Blackburn, P.C., M.P.
Minister of Labour and Minister of the Economic Development Agency of Canada for the Regions of Quebec

Table of Contents

Messages

• Minister's Messages
• Management Representation Statements

Section I Overview

• Introduction
• Raison d'être
• Organizational Information
• Mandate
• 2008-2009 Planned Expenditure Profile
• Voted and Statutory Items Displayed in the Main Estimates
• Planned Spending and Full-Time Equivalents
• Financial and Human Resources - Summary Information
• 2008-2009 Departmental Priorities
• Performance Measurement Framework

Section II Program Activities by Strategic Outcome

• A. Policy, Research and Communications
• B. Labour Market, Workplace Skills and Learning
• C. Labour
• D. Social Investment, Children and Families, Housing and Homelessness
• E. Service Canada

Section III Supplementary Information

• Table 1: Departmental Link to the Government of Canada Outcomes
• Table 2: Sustainable Development Strategy
• Table 3: Details on Transfer Payment Programs
• Table 4: Evaluations
• Table 5: Foundations (Conditional Grants)
• Table 6: Green Procurement
• Table 7: Horizontal Initiatives
• Table 8: Internal Audits
• Table 9: Loans (Non-Budgetary)
• Table 10: Progress Towards the Departments Regulatory Plan
• Table 11: Services Received Without Charge
• Table 12: Sources of Respendable and Non-Respendable Revenue

• Specified Purpose Accounts
  • Employment Insurance Account
  • Canada Pension Plan
  • Government Annuities Account
  • Civil Service Insurance Fund
• Employment Insurance Part II 2008 - 2009 Expenditure Plan
• Consolidated Report on Canada Student Loans

Section IV Other Items of Interest

• Detailed Program Description by Strategic Outcome
• Office of the Auditor General (OAG) Report
• Website References

Ministers' Messages

Message from the Minister of Human Resources and Social Development

I am pleased to present to Parliament the 2008-2009 Report on Plans and Priorities for the Department of Human Resources and Social Development Canada (HRSDC).

HRSDC supports Canadians in meeting the challenges they face by putting in place policies, programs and services that are flexible, that create opportunities in today's labour market and that provide choice.

As Minister, I have had the opportunity to see first hand how the portfolio positively impacts on the lives of Canadians. Whether it is through support for families with the Universal Child Care Benefit, bridging the skills and learning gap with the Apprenticeship Incentive Grant or the Canada Education Savings Grant, or effective and sustainable solutions to prevent and reduce homelessness through the Homelessness Partnering Strategy, we are taking action to improve the quality of life for all Canadians.

Looking forward, we will build on those accomplishments by continuing to support children, families and vulnerable Canadians seeking to break free from poverty. We'll focus on addressing accessibility issues for persons with disabilities by implementing the Registered Disability Savings Plan and Enabling Accessibility Fund. Emphasis will also be placed on supporting low-income seniors and preventing elder abuse.

Building a knowledge advantage will be a primary focus to address labour market challenges and opportunities and the needs of workers in vulnerable communities. The actual results we expect from a well-functioning labour market are more than statistics. In fact, our objective in addressing labour market challenges is to have healthy and strong families, fewer people in poverty and more self-sufficient and self-reliant adults. Keeping that in mind, we will improve the governance and management of the EI account through the establishment of the Canada Employment Insurance Financing Board, an independent Crown corporation. We are also significantly improving student financial assistance by creating the Canada Student Grant Program. And we continue to negotiate and implement labour market agreements to increase the participation of individual Canadians in the workforce who are not fully active in the labour market. Integration of foreign-trained workers and entry of temporary foreign workers will also be at the heart of our commitments.

We are equally committed as a portfolio to providing the highest level of services to Canadians. Service Canada delivers a number of services and benefits on behalf of federal departments and agencies as well as provides Canadians with increased choice, quicker results and easier access. The success of this approach will require ongoing collaboration with federal departments as well as with provinces, territories and partners in the public and private sectors.

Canada was built through the skills, the imagination and dedication of all Canadians. HRSDC will continue this momentum by demonstrating excellence in policy, program and service delivery and by helping all Canadians reach their full potential.

The Honourable Monte Solberg, P.C., M.P.

Minister of Human Resources and Social Development

Message from the Minister of Labour

The Government of Canada is dedicated to promoting a healthy society and a productive and prosperous economy. The work done by the Labour Program to support fair, safe, healthy, cooperative and productive workplaces is crucial in promoting these goals.

In 2008-2009 the Labour Program will have an exciting and challenging agenda that includes four key priorities: implementing the Wage Earner Protection Program (WEPP), supporting the reintegration of reservists into civilian life, engaging internationally in labour issues, and identifying options for reducing the frequency and duration of work stoppages.

Legislation to create the WEPP has received Royal Assent. The new program will provide workers with unpaid wages and vacation pay when their employers are bankrupt or subject to receivership. Implementing the program will be the responsibility of the Labour Program, Service Canada and other partners.

Members of the reserve force, who volunteer their time and often risk their lives to serve our country, should not have to worry if their jobs or enrolment in universities and colleges will be protected while they are away. The government is acting to make sure that the needs of reservists are met.

Internationally, Canada is committed to negotiating and implementing strong Labour Cooperation Agreements in order to achieve decent working conditions for workers and a level playing field for business with its trade partners in the Americas and beyond. The Government is also committed to working with the provinces, territories, unions and employers to strengthen the International Labour Organization's ability to advance core labour standards globally.

Finally, the number of days lost to work stoppages in Canada is high in comparison with other members of the Organization of Economic Co-operation Development. We will be exploring the causes and impacts of work stoppages, and options for reducing their risk, frequency and duration in federally regulated industries.

The Labour Program is working to help employers and workers succeed in a dynamic global economy by meeting the challenges and taking advantage of the opportunities of changing workplaces.

The Honourable Jean-Pierre Blackburn, P.C., M.P.

Minister of Labour and Minister of the Economic Development Agency of Canada for the Regions of Quebec

Management Representation Statements

Human Resources and Social Development

I submit for tabling in Parliament, the 2008-2009 Report on Plans and Priorities (RPP) for Human Resources and Social Development Canada.

This document has been prepared based on the reporting principles contained in Guide for the Preparation of Part III of the 2008-2009 Estimates: Reports on Plans and Priorities and Departmental Performance Reports:

• It adheres to the specific reporting requirements outlined in the Treasury Board of Canada Secretariat guidance;
• It is based on the department's strategic outcomes and Program Activity Architecture that were approved by the Treasury Board;
• It presents consistent, comprehensive, balanced and reliable information;
• It provides a basis of accountability for the results achieved with the resources and authorities entrusted to it; and
• It reports finances based on approved planned spending numbers from the Treasury Board of Canada Secretariat.

Janice Charette

Deputy Minister Human Resources and Social Development

Labour

The plans, priorities, planned spending and performance measures in support of the Labour Program are accurately presented in the 2008 - 2009 Report on Plans and Priorities for Human Resources and Social Development Canada.

Munir A. Sheikh

Deputy Minister of Labour and Associate Deputy Minister of Human Resources and Social Development

Service Canada

The plans, priorities, planned spending and performance measures in support of Service Canada are accurately presented in the 2007 - 2008 Report on Plans and Priorities for Human Resources and Social Development Canada.

Hélène Gosselin

Deputy Head of Service Canada and Associate Deputy Minister of Human Resources and Social Development

Budget 2008 Announcements

The Government of Canada tabled the 2008 Budget on February 26, 2008, outlining its priorities for Canadians for the upcoming years. The following Budget announcements affect Human Resources and Social Development Canada and support the labour market, social development and service to Canadians priorities outlined in this Report.

Investing in People

Improving Canada's competitive position means developing the best-educated, most-skilled and most flexible workforce in the world.

The Government committed to supporting Canadian students with a $350-million investment in 2009-2010, rising to $430 million by 2012-2013, in a new, consolidated Canada Student Grant Program that will reach 245,000 college and undergraduate students per year when it takes effect in the fall of 2009. The Government will phase out the Canada Millenium Scholarship Foundation in 2009. A total of $123 million will be invested over four years, starting in 2009-2010, to streamline and modernize the Canada Student Loans Program. The flexibility of Registered Education Savings Plans will be enhanced by increasing the time they may remain open to 35 years from 25 years, and by extending the maximum contribution period by 10 years.

The Government will reduce disincentives to work for seniors by raising the current Guaranteed Income Supplement earned income exemption to $3,500 from its current maximum exemption level of $500.

Supporting the Vulnerable

Budget 2008 provided an additional $90 million over three years to extend the Targeted Initiative for Older Workers until March 2012 to help more older workers remain active and productive participants in the labour market.

It also provided $13 million over three years to help seniors and others recognize the signs and symptoms of elder abuse, building on the $10 million per year provided in Budget 2007 to expand the New Horizons for Seniors Program.

Strengthening Partnerships with Aboriginal Canadians

Advantage Canada recognized that the most effective way to address the gap in socio-economic conditions faced by Aboriginal Canadians remains increasing their participation in the Canadian economy. The Government is committed to fostering partnerships involving the private and public sectors that help Aboriginal people get the skills and training they need to take advantage of the opportunities in the North and across Canada. Budget 2008 takes another important step to help Aboriginal people make the most of these opportunities by committing to establish a new framework for Aboriginal economic development by the end of 2008.

The Government will continue to engage Aboriginal groups and other stakeholders on a successor approach to the Aboriginal Human Resources Development Strategy, expected in 2009. The new approach will better place the skills and training available for individuals in the context of employer and labour market demands.

Improved Management and Governance of Employment Insurance

The Government committed to improving the management and governance of the Employment Insurance (EI) Account and ensure that premiums will be no higher than required to pay for benefits over time. To enhance the independence of premium rate setting and to ensure that EI premiums are used exclusively for the EI program, the Government is creating a new, independent Crown corporation, the Canada Employment Insurance Financing Board that will report to the Minister of Human Resources and Social Development. It will have the following key responsibilities: managing a separate bank account; implementing an improved EI premium rate-setting mechanism to ensure that EI revenues and expenditures break even over time; and maintaining a cash reserve of $2 billion to establish a reserve that can be used in the event of an economic downturn.

Note: These recent announcements are not in the narrative of the Report on Plans and Priorities, however, the department is committed to moving forward on these priorities and will report on them in its 2008-2009 Departmental Performance Report. The Budget announcements are not included in the planned spending figures for the department.

Section I - Overview

Human Resources and Social Development Canada

Departmental Overview

Introduction

This Report presents the plans and priorities for Human Resources and Social Development Canada HRSDC for 2008-2009 and planned spending for the next three years. Information is presented in four main sections: Section I sets the context, overall priorities for the Department and lays out the Performance Measurement Framework; Section II presents key plans by Strategic Outcome at the Program Activity level including financial information; Section III includes detailed information, such as financial data relating to specified purpose accounts, evaluation information, sustainable development, etc.; and, Section IV outlines program descriptions and provides web links to the Department's programs and services.

Raison d'être

HRSDC's vision is to build a stronger and more competitive Canada, to support Canadians in making choices that help them live productive and rewarding lives, and to improve Canadians' quality of life.

HRSDC develops, manages and delivers some $87B in programs and services that provide Canadians with income support, skill development opportunities, labour market and other information, as well as many other tools that help Canadians to thrive economically and socially. The programs and services offered by the Department affect the lives of millions of Canadians. This includes income support to Canadians through benefits that Parliament has legislated, such as Old Age Security and the Canada Pension Plan. Through Employment Insurance, temporary income support and access to employment programs and services are provided to unemployed Canadians to help them prepare for, find and retain employment. By encouraging skills development in Canadian workplaces and by developing and disseminating information about the labour market, the Department helps Canadian businesses and workers connect. HRSDC also invests in learning by facilitating access to post-secondary education and adult learning opportunities.

HRSDC's social policies and programs help to ensure that children and families, seniors, people with disabilities, homeless people and those at risk of homelessness, and others facing barriers have the support and information they need to improve their well-being. HRSDC is responsible for a number of key initiatives that contribute to these objectives including the Universal Child Care Benefit, the Homelessness Partnership Initiative, the Opportunities Fund for Persons with Disabilities, the Social Development Partnerships Program and the New Horizons for Seniors Program.

Promoting socio-economic well-being also involves working with and building on the strengths and capacity of a multitude of players, including provinces, territories, employers and non-governmental organizations. The Department strives to ensure clear roles and responsibilities between orders of government to develop integrated and complementary programs and services for the benefit of Canadians. It is also working hard to engage partners, such as the profit and non-profit sectors, learning organizations and community groups, including official language minority communities across the country, and foster their contribution.

Through the Labour Program the Department promotes and sustains stable industrial relations and healthy, fair, productive workplaces within the federal jurisdiction. In support of these goals, the Labour program mediates labour disputes, works to keep compliance operations modern and responsive, negotiates and implements international labour standards and agreements, collaborates closely with provincial and territorial ministries of Labour, and carries out labour-related research and analysis.

High quality service delivery is vital to meeting the needs of Canadians. Through Service Canada, citizens are provided with a single point of access to HRSDC's services. Service Canada has been delivering a growing number of services and benefits on behalf of this and other federal departments and agencies and providing Canadians with increased choice and access. Today, the Service Canada delivery network brings together: more than 600 points of service in communities throughout Canada; a national 1 800 O-Canada telephone service providing Canadians with information about all federal government services; and, a range of on-line services at www.servicecanada.gc.ca.

The Departments programs and services are designed to contribute to the following five strategic outcomes:

• Policies and programs that meet the human capital and social development needs of Canadians;
• Enhanced Canadian productivity and participation through efficient and inclusive labour markets, competitive workplaces and access to learning;
• Safe, healthy, fair, stable, cooperative, productive workplaces and effective international labour standards;
• Enhanced income security, access to opportunities and well-being for individuals, families and communities;
• Achieve better outcomes for Canadians through service excellence.

Deparment of Human Resources and Social Development - Program Activity Architecture for 2008-2009

Text version

Organizational Information

Mandate

On February 6, 2006, Human Resources and Skills Development Canada and the former Social Development Canada were consolidated into the Department of Human Resources and Skills Development to be styled Human Resources and Social Development. The powers, duties and functions of the Minister of Social Development were transferred to the Minister of Human Resources and Skills Development, and the Minister was styled as Minister of Human Resources and Social Development. The Minister was also made responsible for the Canada Mortgage and Housing Corporation. Further, a Secretary of State for Seniors was appointed on January 4, 2007 to ensure seniors' issues are adequately addressed.

Until new legislation is enacted, the Minister will rely on the provisions of the Department of Human Resources and Skills Development Act and the Department of Social Development Act for specific authorities.

The Department of Human Resources and Skills Development Act defines the powers, duties and functions of the Minister of Human Resources and Skills Development, the Minister of Labour, and of the Canada Employment Insurance Commission. The legislative mandate of Human Resources and Skills Development is to improve the standard of living and quality of life of all Canadians by promoting a highly skilled and mobile labour force and an efficient and inclusive labour market. The Minister of Human Resources and Skills Development has overall responsibility for the employment insurance system, while the administration of the Employment Insurance Act is the responsibility of the Canada Employment Insurance Commission.

The Department of Human Resources and Skills Development Act provides for the appointment of a Minister of Labour who is responsible for the Canada Labour Code and the Employment Equity Act, as well as other legislation on wages and working conditions. The departmental statute provides that the Minister of Labour make use of the services and facilities of the Department. The Act also sets out the mandate of the Minister of Labour to promote safe, healthy, fair, stable, cooperative and productive workplaces.

The Department of Social Development Canada Act defines the powers, duties and functions of the Minister of Social Development. The mandate of Social Development Canada is to promote social well-being and security. In exercising the power and performing the duties and functions assigned by this Act, the Minister is responsible for the administration of the Canada Pension Plan, the Old Age Security Act, and the National Council of Welfare, and the Universal Child Care Benefit Act.

Service Canada operates within the legislative mandate and framework of the current departmental legislation (Department of Human Resources and Skills Development Act and the Department of Social Development Act). Its mandate is to work in collaboration with federal departments, other levels of government and community service providers to bring services and benefits together in a single service delivery network.

On June 1, 2006, the Policy Research Initiative was transferred from the Privy Council Office to the Department. It leads horizontal research projects in support of the medium-term policy agenda of the Government of Canada and identifies data needs and priorities for future policy development.

2008-2009 Planned Expenditure Profile

Human Resources and Social Development Canada (HRSDC) has planned expenditures on programs and services of more than $87 billion, of which almost $82 billion, or more than 94%, directly benefits Canadians through Employment Insurance, the Canada Pension Plan, Universal Child Care Benefit, Old Age Security, loans disbursed under the Canada Student Financial Assistance Act and other statutory transfer payments. The Department has planned spending of $1.7 billion in voted grants and contributions, $37.2 billion in statutory grants and contributions and $2.1 billion for Employment Insurance Part II.

The financial strategy for Service Canada establishes that statutory funds, including Employment Insurance, Canada Pension Plan, Old Age Security and voted grants and contributions related to the delivery of specified programs, is allocated annually by HRSDC.

Consolidated Total $ 87,125.7 M

Financial Highlights

Main Estimates

The 2008-2009 Main Estimates total of $40,647.5 million for Human Resources and Social Development Canada (HRSDC) represents a net increase of $186.5 million over the 2007-2008 Main Estimates amount of $40,461.0 million. The major changes are as follows:

• A decrease of $1,902.8 million in net operating expenditures mainly due to:
  • Offsets related to reduction in funding such as:
    • A decrease of $1,926.9 million for Service Canada related to a trust account established in 2007-2008 for the recognition of the experience of residing at an Indian Residential School and its impact. (Common Experience Payments);
    • A decrease of $12.5 million related to Phase I of the Workplace Skills Strategy to support employers and working Canadians in sustained and responsive skills development, addressing real and anticipated gaps, since three year funding is ending in 2007-2008; and
    • A decrease of $3.7 million for Expenditure Review Committee procurement reduction. Further to Budget 2007, across-the-board reductions were applied to departments to implement Cabinet decision to seek cost efficiency savings to offset a portion of the fiscal impact of slower than expected realization of savings from procurement reform.
  • new funding for administration of programs such as:
    • An increase of $19.5 million for Temporary Foreign Worker Program. As per Budget 2007, $118.0 million over 5 years from 2007-2008 to 2011-2012 and $28.0 million on-going for improvements to the Temporary Foreign Worker Program to help employers meet immediate labour and skills shortages and strengthen Program integrity;
    • An increase of $16.1 million related to a transfer from Public Works and Government Services for Public Access Programs Sector. This transfer is for customized info services provided by Public Access Programs Sector on behalf of other departments; and
    • An increase of $3.5 million for the implementation of the EcoAuto Rebate Program to pursue incentives to encourage the purchase of more fuel efficient personal vehicles;
  • As well as an increase of $1.2 million related to the collective agreements.
• An increase of $519.5 million in voted grants and contributions mainly due to:
  • New funding for programs such as:
    • An increase of $500.0 million for Labour Market Strategy for the implementation of the new Labour Market Architecture to enhance the labour market participation among under-represented groups and low-skilled workers;
    • An increase of $18.7 million for Aboriginal Skills and Employment Partnership. As per Budget 2007, new funding to build on the Aboriginal Skills and Employment Partnership Program in order to help Aboriginal people who have been traditionally under-represented in the workplace and who face unique challenges to participating in the workplace;
    • An increase of $14.5 million for Homelessness Partnership Strategy related to a reprofile of funds from 2007-2008 to 2008-2009 of $17.5 million and a transfer to Public Works and Government Services for the Surplus Federal Real Property Initiative of $3.0 million;
    • An increase of $8.0 million for Apprenticeship Incentive Grant. As per Budget 2006, new funding to encourage more Canadians to pursue apprenticeships and reward progression by providing $1,000 per year to apprentices successfully completing their first or second year of an apprenticeship program in a Red Seal Trade; and
    • An increase of $6.9 million for New Horizons for Seniors Program. As per Budget 2007, new funding for the expansion of New Horizons for Seniors Program.
  • The preceding increases are offset by the following reductions:
    • A decrease of $17.7 million to the National Literacy Program since the program has now migrated to the new Adult Learning, Literacy and Essential Skills Program. This integrated program provides a better targeted and more focus approach to help reduce non-financial barriers to adult learning and enhance the development of literacy and essential skills; and
    • A decrease of $12.0 million to the Enabling Fund for Official Language Minority Communities, an initiative that supports the activities of two Official Language Minority Communities networks linked to a total of 25 community organizations, since the initiative received a three year funding ending in 2007-2008. This initiative forms part of the overall Government of Canada Action Plan on Official Languages.
• An increase of $1,519.2 million in statutory program payments, mainly due to:
  • An increase of $1,531.0 million for Elderly Benefits which includes Old Age Security, Guaranteed Income Supplement and Allowance. This increase is explained from changes in the forecasted average rates of payment and in the population. In general, changes in the average Old Age Security, Guaranteed Income Supplement and Allowance benefit rates can be partially attributed to changes in the Consumer Price Index. Elderly benefits are fully indexed quarterly to any rise in the cost of living. Legislation ensures that Elderly benefits will never decrease if the cost of living goes down.
    • Old Age Security - Increase of $1,228.0 million. The forecasted average monthly rate has increased from $477.35 to $489.82, which accounts for $664.5 million. There is also an anticipated increase in the estimated number of beneficiaries from 4,382,379 to 4,505,101 which accounts for an increase of $712.5 million and there is an anticipated increase in the Old Age Security benefit repayment which will reduce the Old Age Security benefit payments by $149.0 million.
    • Guaranteed Income Supplement - Increase of $283.0 million. The forecasted average monthly rate has increased from $378.03 to $396.06 resulting in an increase of $349.6 million. The estimated number of beneficiaries has decreased from 1,634,112 to 1,619,274 accounting for a decrease of $66.6 million. The number of GIS recipients constantly fluctuates from year to year based on a number of factors, including fluctuations in a client's income, the death of the client, or a change in the client's residence status.
    • Allowance Payments - Increase of $20.0 million. The average forecast monthly rate has increased from $449.32 to $473.67, accounting for an increase of $29.2 million. The estimated number of beneficiaries decreased from 102,563 to 100,808, accounting for a decrease of $9.2 million. Like Guaranteed Income Supplement, the number of Allowance recipients constantly fluctuates from year to year based on a number of factors, including fluctuations in a client's income, the death of the client, or a change in the client's residence status.
  • An increase of $48.0 million for Canada Education Savings Grants as result of the changes to Canada Education Savings Grants and contribution limits announced in Budget 2007.
  • An increase of $10.0 million for Universal Child Care Benefit. The increase in expected benefits paid is due to an increase in the projected number of recipients and an increase in take-up rates.
  • An increase of $9.0 million for Canada Learning Bond. As per revised forecast, the participation rate for the Canada Learning Bond is steadily increasing. Better than expected performance in 2006-2007 has continued into 2007-2008, promotional activities seem to be having a positive response.
  • An increase of $0.1 million related to other items.
  • A decrease of $61.9 million in Canada Student Loans Program as a result of:
    • A decrease of $38.5 million is related to Direct Financing under the Canada Student Financial Assistance Act mainly due to a reduction in program costs which has led to a reduction in alternative payments;
    • A decrease of $28.8 million in the provision of funds for interest and other payments as a result of a reduction in the projection of the loans in study portfolio as well as a reduction of the assumption regarding the proportion of loans going into debt reduction in order to align projection with actual results;
    • A decrease of $1.4 million related to liability under the Canada Student Loans Act. The reduction in expenditures is linked to the overall decrease in the value of the guaranteed loans' portfolio; and
    • An increase of $6.7 million for Canada Study Grants mainly due to the fact that the Canada Student Loans Program is still experiencing higher than expected take-up of the Canada Access Grant program. There is also a greater utilization of Low Income and Permanent Disability Access grants than originally forecasted.
  • A decrease of $16.0 million is related to Workers' Compensation Payments. The variance is mainly due to projected increases in recoveries based on previous year trend analysis as well as increased costs due to a Chronic Pain Decision rendered by the Nova Scotia Workers' Compensation Board.
  • A decrease of $1.0 million in contribution to the employee benefit plans.
• An increase of $50.6 million in non-budgetary payments related to the loans negotiated under the Canada Student Financial Assistance Act, from $855.7 million to $906.3 million as a result of a $29.4 million increase in loans disbursed due to higher than forecasted uptake on Budget 2004 measures intended to ease the transition to post-secondary education and by a $21.2 million decrease in loan repayments due to higher utilization of debt management measures through which students are not required to repay their student loans.

Forecasts 2007-2008 to Planned Spending 2008-2009

Consolidated spending under Human Resources and Social Development authorities is expected to be $87,125.7 million in 2008-2009. This represents an increase of $2,412.8 million over the 2007-2008 forecasts of $84,712.9 million. The variance is mainly due to:

• a decrease of $1,896.7 million in net operating expenditures mainly due to:
  • Offsets related to reduction in funding such as:
    • a decrease of $1,844.3 million for Service Canada related to a trust account established in 2007-2008 for the recognition of the experience of residing at an Indian Residential School and its impact. (Common Experience Payments);
    • a decrease of $27.8 million related to operating budget carry forward funding in 2007-2008;
    • a decrease of $12.7 million related to reduced funding of the Government Advertising Plan;
    • a decrease of $12.5 million related to Phase I of the Workplace Skills Strategy to support employers and working Canadians in sustained and responsive skills development, addressing real and anticipated gaps, since three year funding is ending in 2007-2008; and
    • offset by an increase of $0.6 million for other items.
• a decrease of $0.4 million for write-off of debt due to the Crown for Canada Student Loans Direct financing in 2007-2008.
• an increase $558.3 million in voted grants and contributions due to the following:
  • new funding for programs such as:
    • $500.0 million for Labour Market Strategy for the implementation of the new Labour Market Architecture to enhance the labour market participation among under-represented groups and low-skilled workers;
    • $17.3 million for Aboriginal Skills Employment Partnering Program. As per Budget 2007, new funding to build on the Aboriginal Skills and Employment Partnership Program in order to help Aboriginal people who have been traditionally under-represented in the workplace and who face unique challenges to participating in the workplace;
    • $9.9 million for the Homelessness Partnering Strategy related to reprofiles from previous years;
    • $8.0 million for the Apprenticeship Incentive Grant. As per Budget 2006, new funding to encourage more Canadians to pursue apprenticeships and reward progression by providing $1,000 per year to apprentices successfully completing their first or second year of an apprenticeship program in a Red Seal Trade;
    • $8.0 million for the Enabling Accessibility Fund to support community-based projects across Canada that improve accessibility and enable Canadians, regardless of physical ability, to participate in and contribute to their community and the economy; and
    • $15.1 million for other programs.
• An increase of $1,669.8 million in statutory program payments, mainly due to:
  • an increase of $1,559.0 million for Elderly benefits which includes Old Age Security (increase of $1,280.0 million), Guaranteed Income Supplement (increase of $247.0 million) and Allowance (increase of $32.0 million). This increase is explained from changes in the forecasted average rates of payment and in the population. In general, changes in the average Old Age Security, Guaranteed Income Supplement and Allowance benefit rates can be partially attributed to changes in the Consumer Price Index. Elderly benefits are fully indexed quarterly to any rise in the cost of living. Legislation ensures that Elderly benefits will never decrease if the cost of living goes down.
  • an increase of $115.0 million for Registered Disability Savings Plan announced in Budget 2007. This new plan will help parents to save for ensuring the long-term financial security of a child with a severe disability.
  • an increase of $31.2 million related to the Wage Earner Protection Program, which is designed to pay certain employees of bankrupt companies their unpaid wages and vacation pay up to $3,000.
  • increased funding of $10.0 million for Universal Child Care Benefits. The increase in expected benefits paid is due to an increase in the projected number of recipients and an increase in take-up rates.
  • an increase of $6.0 million to the Canada Education Savings Grant.
  • an increase of $6.0 million to the Canada Learning Bond. As per revised forecast, the participation rate for the Canada Learning Bond is steadily increasing.
  • a decrease of $36.2 million in Canada Student Loans Program as a result of:
    • a decrease of $3.1 million related to Direct Financing under the Canada Student Financial Assistance Act due to a reduction in program costs which has led to a reduction in alternative payments;
    • a decrease of $1.8 million in liabilities under the Canada Student Loans Act. The reduction in expenditures is linked to the overall decrease in the value of the guaranteed loans' portfolio;
    • a decrease of $20.4 million in the provision of funds for interests and other payments under the Canada Student Financial Assistance Act as a result of a reduction in the projection of the loans in study portfolio as well as a reduction of the assumption regarding the proportion of loans going into debt reduction in order to align projection with actual results; and
    • a decrease of $10.9 million of the Canada Study Grant;
  • a decrease of $16.0 million in Workers' Compensation. The variance is mainly due to projected increases in recoveries based on previous year trend analysis as well as increased costs due to a Chronic Pain Decision rendered by the Nova Scotia Workers' Compensation Board.
  • a decrease of $5.2 million in contribution to the employee benefit plans.
• a net decrease of $27.8 million in non-budgetary payments for loans disbursed under the Canada Student Financial Assistance Act.
• an increase of $523.8 million for planned Employment Insurance Account mainly due to an increase in forecasted Employment Insurance Part I benefits.
• an increase of $1,588.6 million to the Canada Pension Plan. The increase is mainly due to increases in benefits, which reflect forecasts of client population and average benefit payments.
• a decrease of $2.8 million to other specified purpose accounts (Government Annuities Account and Civil Service Insurance Fund).

Planned Spending 2008-2009 to Planned Spending 2009-2010

For 2009-2010, the department's consolidated planned spending is anticipated to be $90,447.7 million, which represents an increase of $3,322.0 million from the 2008-2009 planned spending. The major changes are as follows:

• a net decrease of $48.2 million in operating expenditures, mainly due to reductions in funding for the following initiatives:
  • $22.2 million for the Homelessness Partnering Strategy which was approved for two years;
  • $6.3 million for surveys for which contractual requirements are reduced in 2009-2010;
  • $3.6 million for Understanding the Early Years;
  • $3.3 million related to the EcoAuto Rebate Program;
  • $2.6 million in Trades and Apprenticeship Strategy;
  • $2.5 million in Aboriginal Human Resources Development Strategy; and
  • $7.7 million for other items.
• a decrease of $225.7 million in voted grants and contributions, mainly due to decreases related to the multi-year funding profile for the following initiatives:
  • $123.8 million for the Homelessness Partnering Strategy, which was approved for two years;
  • $37.3 million in Targeted Initiative for Older Workers;
  • $22.5 million in Aboriginal Human Resources Development Strategy;
  • $12.0 million in Enabling Fund for Official Language Minority Communities;
  • $9.2 million in Aboriginal Skills Employment Partnership;
  • $9.1 million in Workplace Skills Initiative;
  • $8.9 million in Foreign Credential Referral Office; and
  • $2.9 million for other items.
• an increase of $1,551.7 million in statutory payments mainly related to:
  • $1,500.0 million for Elderly benefits which include Old Age Security (increase of $1,198.0 million), Guaranteed Income Supplement (increase of $278.0 million) and Allowances (increase of $24.0 million);
  • $50.0 million for the Registered Disability Savings Plan;
  • $10.0 million for the Universal Child Care Benefits;
  • $7.0 million for the Canada Learning Bond;
  • $3.0 million for the Canada Education Savings Grant;
  • $1.0 million for Federal Workers' Compensation;
  • offset by decreases of $16.0 million in Canada Student Loans Program and of $3.3 million in contribution to employee benefit plans.
• a net decrease of $173.1 million in non budgetary payments for loans disbursed under the Canada Student Financial Assistance Act which is primarily due to the impact of loan reimbursements from borrowers in the loan portfolio;
• an increase of $594.7 million for the Employment Insurance Account mainly due to an increase in forecasted EI Part I benefits;
• an increase of $1,625.2 million to the Canada Pension Plan mainly due to an increase in forecasted Canada Pension Plan benefits of $1,622.1 million; and
• a decrease of $2.6 million in the payments and other charges related to the Government Annuities Account.

Planned Spending 2009-2010 to Planned Spending 2010-2011

For 2010-2011, the department's consolidated planned spending is anticipated to be $94,151.8 million, which represents an increase of $3,704.1 million from the 2009-2010 planned spending. The major changes are as follows:

• a net decrease of $1.6 million in operating expenditures;
• a decrease of $49.2 million in voted grants and contributions, mainly due to decreases related to the multi-year funding profile for the following initiatives:
  • $20.9 million for Workplace Skills Initiative;
  • $13.5 million for the Enabling Accessibility Fund;
  • $9.9 million in Aboriginal Human Resources Development Strategy;
  • $4.1 million for Kativik Regional Government; and
  • $0.8 million for other items.
• an increase of $1,645.4 million in statutory payments mainly related to:
  • $1,592.0 million for Elderly benefits which include Old Age Security (increase of $1,279.0 million), Guaranteed Income Supplement (increase of $290.0 million) and Allowances (increase of $23.0 million);
  • $45.0 million for the Registered Disability Savings Plan;
  • $7.0 million for the Canada Learning Bond; and
  • $5.0 million for the Universal Child Care Benefits;
  • $2.0 million for the Canada Education Savings Grant;
  • $2.0 million for the Federal Workers' Compensation;
  • offset by a decrease of $7.6 million in the Canada Student Loans Program.
• a net decrease of $115.6 million in non budgetary payments for loans disbursed under the Canada Student Financial Assistance Act which is primarily due to the impact of loan reimbursements from borrowers in the loan portfolio;
• an increase of $487.9 million for the Employment Insurance Account mainly due to an increase in forecasted Employment Insurance Part I benefits of $480.0 million;
• an increase of $1,739.6 million to the Canada Pension Plan mainly due to an increase in forecasted Canada Pension Plan benefits of $1,738.1 million; and
• a decrease of $2.4 million in the payments and other charges related to the Government Annuities Account.

2008-2009 Departmental Priorities

The priorities of HRSDC for 2008-2009 are grouped under three main categories.

• Policy and programs
• Service delivery
• Management priorities

The focus of these priorities is a result of an ongoing assessment of the economic, social, policy and operating environment in which the department operates.

Policy and Programs

HRSDC has an important role to play in ensuring Canadians are provided the flexibility and opportunity to reach their full potential and participate to their fullest in a competitive and productive economy. It also has a role to play in supporting the most vulnerable Canadians that cannot work.

Over the past decade and a half, Canada has experienced sustained and widespread economic growth, which has resulted in overall strong job creation. This continued strength in the Canadian economy has provided opportunity to Canadians, increased employment rates and contributed to significant declines in poverty rates.

However, major factors on the economic landscape, such as increasing global competition and the accelerated pace of technological change, as well as social changes including the aging and increased diversity of the Canadian population and changes in form and roles of families are creating significant challenges that continue to drive the priorities of the department.

Context

A rising global demand for many of the industrial materials that Canada exports, especially energy, has pushed the prices for these goods higher, increased income and spurred major new investments in Canada's resource sector. The shift of manufacturing to low-cost economies, China in particular, has driven down prices and increased real purchasing power. The significant and rapid appreciation of the Canadian dollar compared to its American counterpart contributed to further lowering the prices of consumer goods for Canadians and improving purchasing power. Furthermore, this appreciation has allowed Canadian businesses to import productivity-enhancing business machinery and equipment at lower prices. The emergence of China (and, to a lesser degree, India) has also opened up large markets for Canadian goods and created new business opportunities for Canadian firms.

Strong job creation has led to the lowest national unemployment rate in over 30 years. This fuels further income and expenditure growth by Canadians. However, the pace of job creation has started to test the limits of the Canadian population to provide the necessary workers. An increasing number of firms are reporting that they are unable to find all the workers they need, and not just high-skilled workers, in spite of the fact that labour force participation is near an all-time high.

This rising tide of growth and job creation since the mid-1990s has benefited younger and older workers in particular, who were among the hardest hit by the economic slowdown of the early 1990s. Vulnerable groups such as Aboriginal peoples, people with disabilities, lone parents and immigrants, have nevertheless also seen their employment prospects improve since the mid-1990s despite the fact that labour force participation and employment rates remain lower than the national average.

It is important to note that there were uneven regional and sectoral impacts reflecting the country's diverse regional economic structures and that the benefits of a strong economy have not been equally shared by Canadians of varying backgrounds. On the one hand, most sectors in the West have been booming, as a result of soaring energy prices, and strong business investment in new sources of supply. On the other hand, certain sectors located chiefly in central Canada and in rural regions in British Columbia, have suffered from the appreciation of the Canadian dollar and higher energy costs. For example, the Canadian manufacturing sector continues to shed jobs as a result of the rising dollar and falling international prices for manufactured goods. Forestry has also been adversely affected by the higher Canadian dollar and by the burgeoning troubles in the U.S. housing market.

As a result, strong growth has led to increases of per-capita personal disposable income but increases in hourly wage rates have grown at a much slower pace. Particularly worrisome is the fact that real average annual earnings of the bottom 50 per cent of earners have remained virtually unchanged since 1976.

Some families have made gains, in large measure, through rising employment opportunities. The continued increase of family work effort in paid employment that stems from the increased labour force participation of women and the commensurate increase in dual-earner families have resulted in modest income gains. Gains were made even among the bottom 50 per cent of families, which has contributed to reducing the rate of low-income among children. Despite these gains, many Canadians have not managed to break free from poverty. In fact, many Canadians remain vulnerable, among them adults with disabilities, recent immigrants, Aboriginal peoples, and lone parents. And they are not alone. A significant number of Canadians continue to experience poverty despite considerable work effort and consistent attachment to the labour force.

In the face of an aging society, increasing pressure will also be placed on families to meet their caregiving responsibilities. In this context, attention will need to be given to supporting Canadians who are engaged in these activities to ensure that they can adequately balance these responsibilities while maintaining their capacity to fully participate in the economic and social fabric of Canadian society.

Going forward, improving the opportunities for all Canadians by helping them to acquire the skills and knowledge that they require will not only raise the overall productivity of the workforce but also ensure that they can seize opportunities, share in Canada's future prosperity and become more self sufficient. Additionally, increasing choice through supports for Canadians and their families that help relieve some of the time and financial pressures Canadians face will build resiliency and increase independence.

Aboriginal people often face multiple barriers to their successful labour market participation - including low literacy and essential skills and access to training or education required by employers. The Aboriginal population is also young and growing at a much faster rate than the general Canadian population (a 22% increase between 1996 and 2001), particularly in the North and West, with a large majority living in Western Canada. ¹ The population growth is most rapid among the age group seeking work skills, post-secondary education and first jobs. It is estimated that about half of all Aboriginal people are under the age of 25 and that over the next twenty years about 400,000 Aboriginal people will be ready to enter the workforce.

In Canada there are 3.6 million Canadians or 12.4% of the population that have a disability. ² This includes 181,000 children, 1.5 million seniors and 1.9 million working-age adults. These numbers are expected to increase as the population ages. Canada is not fully benefiting from the employment potential, skills and talents of people with disabilities, and people with disabilities in Canada are not living to their fullest potential: 44% of people with disabilities were participating in the labour market, compared with 74% of people without disabilities. Another concern is that many people with disabilities live in poverty (23% of people aged 16-64 with disabilities lived in low income, compared to 14% of people without disabilities in 2001).

Strong economic growth and job creation have been accompanied by significant changes in the workplace. These changes are rooted in a number of factors. First, globalization has produced competitive pressures but also great opportunities. These pressures lead employers to seek flexibility to adjust their workforce size in response to shifting conditions and cause employees to seek increased job security. And both Canadian employers and workers want protection from undercutting by companies in other countries that may be tempted to gain a competitive edge by violating their own workers' labour rights.

Second, demographic changes - notably the growth in dual-income families, Canada's rising diversity as a result of immigration, the aging population and tight labour market, and growing elder care responsibilities - have increased worker demands for flexible work arrangements, a workplace that accommodates diversity, and work-life balance. At the same time, these changes have contributed to employer concerns about recruiting and retaining a qualified and motivated workforce.

Third, technological advancements have facilitated responses to employers' needs with respect to productivity and worker needs for flexibility - by allowing employees to produce more quickly and, sometimes, from a larger number of locations - but have also been perceived as aggravating pressures on work-life balance.

One result of such factors is growth in non-standard employment. Self-employed, part-time, and temporary workers now account for about 32 percent of the Canadian workforce. A disproportionate share of these workers has low earnings and limited or no access to non-wage benefits, and many may not be covered by labour legislation, even though they may be similar to regular employees in that they are economically dependent on a single client. Another impact has been an increased emphasis in Canadian workplaces on strategies that help attract and integrate individuals from a wide range of backgrounds and with a variety of needs; examples include policies related to work-life balance, employment equity, and disability management/return-to-work.

Another consequence of these factors has been the need for employers, unions, and employees to work together to ensure that Canadian workplaces are able to respond to a rapidly-changing environment in ways that provide flexibility to employers while protecting the rights and working conditions of employees. This, in turn, requires heightened emphasis, attention, and skills in negotiations and problem-solving. A final effect has been increased attention, in the context of trade liberalization, to the importance of enhancing respect for, and application of, core international labour standards.

Canada's ability to attract new immigrants in the past has been a strong mitigating force to counterbalance slowing labour force growth. For some time now, immigrants have been an important source of labour force growth. Canada is now facing increased competition for skilled labour from a growing number of countries including China and India and is also facing challenges in retaining skilled immigrants who are already established in Canada. It is expected that due to a smaller labour pool in coming years, employers will face increasing competition to hire and retain workers, particularly those considered skilled workers.

In this context, it is important to note that too many immigrants continue to face challenges in adapting to the Canadian setting, and many immigrants have difficulties integrating into the Canadian workforce. Their employment rates are still below those of other Canadians, and their relative earnings, particularly for the university-educated, are lower. Credential recognition is an important component to immigrants' ability to find rewarding work and to integrate into Canadian society. A lack of adequate literacy skills in Canada's official languages also represents a significant challenge for many immigrants entering the Canadian labour market.

Although Canada's productivity performance has improved somewhat since 1997, productivity growth and level still lag considerably behind that of the United States and most other G7 countries. Productivity growth requires a continued investment in a highly skilled and adaptable workforce. Economies endowed with a skilled labour force are better able to create and make effective use of new technologies. Despite having one of the most highly educated workforces and the highest share of post-secondary degree holders in all of the OECD, other countries are quickly catching up and some countries already perform better in certain categories.

In addition, the educational attainment of certain sub-groups of the population is still lagging. High school completion rates among Aboriginal people, for example, are quite low and this constitutes a major barrier to their success in society and in labour markets. A substantial portion of Canada's adult population does not have the literacy and numeracy skills to cope with the demands of everyday life and work in an advanced society. Some of these individuals are older, less educated people who will be approaching retirement age. Others are younger and better educated, but in need of skills upgrading. Another group facing challenges with regard to skills is highly-educated recent immigrants who display low levels of official language skills.

Too many families, particularly those headed by lone-parents, are increasingly relying on the shelter system and an estimated 65,000 youth are homeless. For many, homelessness is the result of a combination of serious financial problems, unemployment and family instability or abuse. Some, particularly among the chronically homeless, suffer from mental health or substance abuse problems.

Associated Risks

The growing and diverse range of funding instruments and service delivery partners poses a risk to the Department's ability to enhance delivery of responsive policies, programs and services to Canadians.

The Department is responsible for the administration and delivery of a wide range of statutory programs and services across a broad mandate, in addition to providing Canadians with access to a full range of government services and benefits. Public expectations for increased accountability, effective programs and efficient service continue to rise and require effective dialogue, consultation and outreach.

Grant and contribution programs are an important instrument for the Department to achieve its objectives. As a result of the Blue Ribbon Panel and other review mechanisms, efforts continue to determine the optimal model to create a modern and coherent department-wide strategic approach to assessing, managing and mitigating grant and contribution program risks, balanced with program effectiveness and accountability.

Challenges remain in ensuring communication and flow of information between the policy development, program design and service delivery dimensions of the Department's activities. HRSDC's relations with provinces and territories will be influenced by the federal government's new approach to provinces and territories for post-secondary education and training, new labour market agreements and other social policy priority areas. The infrastructure capacity of provinces and territories, and the sustained engagement to ensure a flow of information in support of program outcomes and accountability, could affect the Department's ability to implement effective policies and meet Canadians' expectations.

To respond to these challenges effectively, the Department establishes and maintains productive partnerships to ensure greater coherence of the national labour market and social development agenda and to effectively deliver on government priorities.

Service Canada is also working to develop and implement client driven service strategies to improve and ensure uninterrupted delivery of core services such as Employment Insurance, Canada Pension Plan, and Old Age Security, as well as increase the performance of its service delivery channels, supported by better information management and the use of technology. Finally, HRSD continues to review its performance measurement framework to support effective accountability and public reporting.

Priorities for 2008-2009

In this complex environment, HRSDC plays an important role in ensuring that Canada's economy remains competitive and productive, and that Canadians can participate in the economy and society. In 2008-2009, the Department will focus its efforts on: strengthening the knowledge advantage that will drive economic growth in years to come; and ensuring measures are in place to support children, families and those who are most vulnerable in society.

Building the Knowledge Advantage

In 2006, the Government launched Advantage Canada: Building a Strong Economy for Canadians, a long-term, economic plan for Canada. HRSDC is contributing to this plan through the implementation of the Knowledge Advantage agenda, which sets a goal for Canada to achieve the best-educated, most-skilled and most flexible workforce in the world. The Department will contribute to this by facilitating increased participation of Canadians and new immigrants in the labour market, continuing to achieve a higher quality and more productive workforce through better access to skills development and education, and by facilitating labour market adjustments through mobility, as well as providing Canadians with access to timely and accurate labour market information.

The Department recognizes that it cannot achieve its objectives by working alone. It must continue to work in collaboration with provinces, territories, partners and key stakeholders building on each others' strengths and capacity to deliver results for Canadians. As set out in Budget 2007, a key feature of this approach is the implementation of a new labour market training architecture with provinces and territories, which recognizes that provinces and territories are best placed to design and deliver labour market training to most Canadians. Accordingly, the Department is pursuing a three part approach: working towards the full transfer of EI Part II programming to provinces and territories; negotiating new labour market agreements; and exploring the feasibility of transferring existing federal labour market programs to provinces and territories.

Further, HRSDC will support government commitments to improve the governance and management of the Employment Insurance (EI) Account, ensuring the Program continues to help Canadian workers to adjust to changing labour market conditions, as well as operate in an effective and efficient manner.

The Department will support workplace training for Canadians by working with provinces, territories and the private sector to make training and skills development more widely available to Canadian workers and better aligned with the needs of the economy. HRSDC will continue to encourage skills development and training in Canadian workplaces and to invest in the development of tools and other support mechanisms to raise literacy and essential skills of Canadians.

The Department will continue to work closely with other federal departments and industry stakeholders to develop strategies to adjust to changing circumstances, including in traditional industries and helping communities take advantage of existing and emerging opportunities. It will also improve the quality of industry-driven approaches with regard to workplace skills by supporting sectoral initiatives and developing the next phase of the Trades and Apprenticeship Strategy.

Enhancing skills of Aboriginal people will also be a focus for HRSDC. The department will strengthen partnerships which help Aboriginal people obtain the skills and training they require thereby enabling them to take advantage of job prospects in the North and across Canada. It will also develop options for a new Aboriginal labour market strategy for implementation in April, 2009.

In order to address the new realities of the changing labour market, including the potential need for improved training and enhanced income support, the Expert Panel on Older Workers was asked to examine potential measures to help older workers. To this end, the Department will respond to the Report from the Expert Panel.

Given the slow labour force growth that is anticipated in the future, HRSDC will respond to industry's growing demand for skilled labour by further exploring ways to facilitate the labour market integration of foreign-trained workers, facilitating the entry of temporary foreign workers while improving our capacity to monitor compliance with regulatory requirements, reducing barriers to mobility (including skilled trades), and helping Aboriginal people to obtain the skills and training they require.

The department's work will also continue to promote access to higher education. To this end, the Department will complete its review of the Canada Student Loans Program (CSLP) and develop proposals to improve the delivery of financial assistance to students. The review seeks to simplify CSLP instruments, make them more effective, and ensure integrated administration and efficient delivery. In addition to this work, a number of reviews have been undertaken to assess the Canada Millennium Scholarship Foundation's performance, effectiveness and success in achieving its mandate.

To further support learners, Budget 2007 increased Canada Social Transfer funding to provinces and territories, starting in 2008-2009, to strengthen the quality and competitiveness of Canada's post-secondary education system. The Department recognizes that parents across this country face challenges paying for post-secondary education. It will therefore take measures to implement improvements, announced by the government, to Registered Education Savings Plans in order to encourage parents to save.

The Department also supports Canada in international trade. It is widely recognized that labour issues lie at the centre of the debate over international economic integration. Progress on the international trade agenda is increasingly tied to developing meaningful international criteria to improve compliance with internationally recognized labour standards. The Labour Program will work to ensure that labour policy and programs respond to evolving worker-employer relations and workplace and economic realities. In this regard, expert advice will be sought on the causes and impacts of work stoppages and options for reducing their frequency and duration. Robust Labour Cooperation Agreements will be negotiated and implemented in the context of free trade accords, to protect workers' fundamental rights and ensure a level playing field for Canadian companies.

Supporting Children, Families and Vulnerable Canadians

Key to Canada's increasing prosperity are the hard-working Canadians that fuel the strong economic growth that the country has experienced. The Department plays a central role in supporting Canadians and their families, especially vulnerable families, and families under financial and time pressures. Enabling Canadians by providing effective tools and support helps them to make the best choices for themselves and their families.

As such, a significant portion of departmental resources are invested in providing Canadians with the opportunities and supports they need. HRSDC and Service Canada work together to deliver a broad range of programs and services to support the Government's commitment to invest in families and to help those seeking to break free from the cycles of homelessness and poverty.

As families are the building blocks of society, HRSDC will continue to provide support to families through the Universal Child Care Benefit to allow Canadians choice in child care and provide families with direct financial assistance regardless of family income or place of residence. These investments are complemented by the Government's decision to provide funding to provinces and territories through the Canada Social Transfer to create child care spaces, as outlined in Budget 2007. Recognizing the important multiple roles families play in providing for one another, the Department will also look at ways of providing better support to Canadians that care for seniors or disabled family members.

A key objective of the government is to ensure all Canadians benefit from positive economic conditions and enjoy a high standard of living. To this end, the Department will continue to work on the development of a Canadians with Disabilities Act. Activities to implement other Budget 2007 commitments for persons with disabilities will continue, including the development of a Registered Disability Savings Plan, Canada Disability Savings Grant, Canada Disability Savings Bond, as well as establishing the Enabling Accessibility Fund.

Significant efforts will also be made to explore long-term solutions to homelessness in Canada. Through the Homelessness Partnering Strategy, the department will put in place measures to create transitional and supportive housing and to improve programs and services to help homeless people become self-sufficient. Under this Strategy, the federal government offers the provinces and territories the opportunity to enter into bilateral arrangements to improve collaboration between the two levels of government. An amount of $269.6 million will be invested over 2 years to deliver on this commitment.

Finally, seniors represent a growing proportion of the Canadian population. Over the next year, HRSDC will work with Health Canada and the Secretary of State for Seniors to support the National Seniors Council in their work on all matters related to the well-being and quality of life of seniors, including the opportunities and challenges arising from a rapidly growing and increasingly diverse aging population. The Department will also lead on the development and implementation of new measures to address the growing problem of elder abuse in Canadian communities.

HRSDC will continue to work collaboratively with its partners to deliver an expanded New Horizons for Seniors Program which provides funding to support projects across Canada that help ensure seniors are able to benefit from, and contribute to, the quality of life in their community through their social participation and active living. The Program accomplishes its' objectives through three separate streams: Community Participation and Leadership, Capital Assistance funding, and Elder Abuse Awareness funding.

The Department will implement measures to protect reservists' employment in federally-regulated workplaces and provide relief from Student Loan payments for student reservists while they are serving in the military. The Wage Earners Protection Program, which provides workers with wages owed to them when their employers go bankrupt or subject to receivership, will also be implemented.

Service Delivery

Context

Service Canada is responsible for the delivery of significant government programs or support for Canadians such as Employment Insurance, Canada Pension Plan and Old Age Security - which includes Guaranteed Income Supplements, as well as a broad range of smaller programs and services for HRSDC and other government departments such as Passport Canada and Indian Residential Schools Resolution Canada.

The Department's service environment is largely influenced by Canadians' values and expectations. Service matters to Canadians - overall quality affects citizens' satisfaction and the level of confidence they have in governments and in public services. Recognizing this, Service Canada will continue to implement a one-stop, integrated government services approach.

In terms of accessing information and services through various channels - in person, by phone, by mail and via the Internet - Canadians expect to be able to choose alternate service delivery channels to suit their needs. Also, recent efforts to reach out to rural and remote communities have proven popular with Canadians, based on the 2006 Service Canada Awareness Baseline study, 89% of Canadians surveyed support this direction.

Canadians also have increasingly strong expectations about the government's ability to deliver improved services. Canadians value accuracy, understanding and reliability as the most important features of service quality. Staff and information quality, access and speed of service, as well as new and innovative ways to provide information to citizens also appear to be among the top satisfaction drivers.

Although the Government of Canada has made great strides in improving service quality and in delivering programs and services more efficiently, further improvements in these areas remain a key priority.

Associated Risk

The important role that IT plays in supporting departmental priorities means that the Department must manage the risk that the existing information technology infrastructure and recovery capability might not be adequate to ensure continued quality front-line service delivery to all Canadian citizens.

The Department is committed to deliver its programs and services more efficiently through the use of information technology. In collaboration with its service partners, Service Canada provides Canadians with access to more than 60 government programs and services across multiple service delivery channels, while ensuring the privacy and protection of sensitive information, including securing information technology (IT) channels and equipment. The Department's aging IT infrastructure could affect the ability to meet client expectations for high level service delivery.

The Department will finalize the information technology plan aligned to strategic plans and priorities and ensure effective management of IT investments. The Department will also ensure that business resumption and recovery capabilities are sufficient to mitigate the potential risk of systems problems. Service Canada will develop and execute a renewal road map in order to modernize its technology infrastructure and associated software applications.

To achieve a more effective, efficient, and streamlined state of processing and payment services to citizens, Service Canada is implementing greater automation in its information systems for payment and service delivery processes. Better risk management and information sharing with partners will also ensure that Canadians have trust in the security and confidentiality of the information used in delivering programs.

Priorities for 2008-2009

Providing the highest level of services to Canadians

Canadians benefit from programs and services that are easy to find, deal with and access. Service Canada is committed to improving service to Canadians by putting the citizen at the centre of how government delivers services and by providing service in the official language of their choice.

Service Canada is dedicated to improving the delivery of services to Canadians. This includes enhancing the quality of service delivery, while improving the cost-effectiveness of operations. Service Canada will continue to focus on improving the delivery of Employment Insurance, Canada Pension Plan and Old Age Security through the on-going simplification and standardization of automated processes, in order to transform into a world-class service delivery organization with a national and virtual processing network. This work will be supported by stronger information management practices and the use of technology. Further, better risk management and secure information sharing with partners will ensure that Canadians have trust in the security and confidentiality of the information used in delivering programs.

Finally, the Labour Program's delivery of services across Canada related to occupational health and safety, labour standards, employment and pay equity, fire safety, and injury compensation will be enhanced through full implementation of a reorganization that creates a dedicated senior official responsible for directing those activities and through efforts to modernize compliance strategies.

Management - Stewardship and Accountability

Context

Canadians demand accountable and effective spending of their tax dollars. HRSDC is committed to adopting measures that strengthen financial stewardship of the Department through, strengthened comptrollership, a greater emphasis on results and outcomes, and audits and evaluations that demonstrate value for money to Canadians. From a management perspective, the context in which the Department is called to operate is affected by the existing legislative framework as well as a number of other factors, namely the Federal Accountability Act (FedAA), the renewal of the government's Expenditure Management System and annual assessments against the Management Accountability Framework.

A key feature of the FedAA is the provision that designates deputy ministers as accounting officers for their departments, within the framework of ministerial accountability. Deputy ministers are accountable before committees of Parliament to answer questions related to the following management responsibilities:

• the measures taken to organize the resources of the department to deliver departmental programs in compliance with government policies and procedures;
• the measures taken to maintain effective systems of internal control in the department;
• the signing of the accounts that are required for preparation of the Public Accounts; and
• the performance of other specific duties assigned to him or her by the FedAA or any other act in relation to the administration of the department.

The Expenditure Management System renewal supports the objective of making the best use of taxpayers' money. Focusing spending on Government priorities and delivering results to Canadians are key benefits expected from the Expenditure Management System renewal. This renewal is intended to provide a framework for departments to improve the management of spending, ensure that programs and services effectively and efficiently achieve results, and provide ongoing value for taxpayers' dollars.

The government also relies upon the Management Accountability Framework as an oversight mechanism for the Treasury Board Secretariat to monitor and assess management priorities of departments. The Management Accountability Framework defines the conditions that need to be in place to ensure government is well-managed and relies on annual assessments of departments to identify areas of weaknesses, to which departments respond with specific management improvement action plans.

In recent Management Accountability Framework assessments, TBS has commended HRSDC for its work in the areas of: change management and human resources management capabilities in support of organizational transformation, evaluation, and the executive performance management process. More specifically, the areas for improvement include governance in an environment of organizational change, progress on meeting diversity targets for its employees, the development of a long-term capital plan, and the Information Management and Information Technology network and its legacy systems.

Associated Risk

The Department needs to manage the risk associated with the Department's capacity to exercise appropriate governance and oversight of financial resources within an environment of transformation.

With a budget of $87 billion dollars covering statutory programs, as well as grants and contributions, financial stewardship and accountability are ongoing areas of potential risk exposure. The Department continues to implement the Chief Financial Officer model to oversee financial matters, works towards improving our internal control framework on a path to preparing for audited financial statements in the future, and continues work to demonstrate the value of its investments in programs and services, both internal and external. In the coming years, the Department needs to manage significant infrastructure investments including replacements for its corporate management systems.

In line with the Government's efforts to renew the current Expenditure Management System, the Department will identify program efficiencies and effectiveness in support of Government priorities, and improve capacity to improve results. Ongoing implementation of the new Internal Audit Policy and the development of a new Evaluation Policy also place new demands on program administration, development and accountability.

HRSDC will continue to strengthen the stewardship of its financial resources. The implementation of HRSDC Chief Financial Officer position and the supporting Branch infrastructure will strengthen the overall stewardship of departmental resources and will provide support to the Deputy Minister in her role as the Accounting Officer for the Department. A Portfolio Senior Management Board was created in November 2007 to provide strategic oversight and direction for management issues that affect HRSDC, Service Canada and the Labour Program in order to provide a coherent and consistent approach across activities. Also, the Department is developing a Long-term Capital Plan and is implementing a more thorough investment process, including a strong business case for accessing funds for major transformational investments.

Priorities for 2008-2009

In 2008-2009, the department's financial stewardship capacity will be further strengthened to provide the necessary foundation to support the Deputy Minister in her role as Accounting Officer. The Department will also continue to work towards full implementation of the TBS Policy on Internal Audit by April 1, 2009, including the creation of an external, independent audit committee.

The development of more efficient and effective programs will continue to be supported by extensive research and knowledge management functions and a broad expertise base with respect to human resource and social development issues. Efforts to further strengthen an already capable research, audit and evaluation capacity will contribute to a better understanding of program effectiveness and options for ongoing improvement.

A key feature of the Expenditure Management System renewal is for departments to report regularly on program results and achievements in a clear and transparent fashion. During 2008-2009, HRSDC will continue to strengthen its performance measurement framework and performance indicators by providing performance measurement training across the Department and Service Canada and facilitating the development of program level performance measurement frameworks.

The Department will further streamline the management of grants and contributions by balancing accountability and reporting burden, while ensuring program efficiency and effectiveness is well established. More specifically, as one of a select few 'vanguard' departments in support of the recommendations of the Independent Blue Ribbon Panel for Grants and Contributions Modernization, HRSDC will continue implementing its three-year departmental Action Plan to further improve management and administrative practices and reduce the administrative burden on stakeholders and recipient organizations, as well as increase consistency and coherence of grants and contributions funding approaches.

The Department will also continue to implement measures to deliver savings through increased attention to program integrity and reduced level of complexity in accessing programs and services. Key objectives in this area are to further decrease the paper burden on employers and ease the administrative burden on taxpayers, without compromising program integrity.

HRSDC is working on an overall Information Management Strategy to complement the recently introduced Treasury Board policy with tools, best practices and awareness training.

Work will also begin to replace the aging Corporate Management System with a more effective Enterprise Resource Planning solution that will meet the increasingly demanding requirements of the management environment in the years to come.

Management - Human Resources

Context

Human resource (HR) management is critical to building, retaining and developing the workforce that will sustain the Department's ability to deliver well managed programs and quality service in the future. A key goal of the Department's work will be to develop HRSDC into an organization which will be recognized as a Centre of Excellence in matters relating to human resources and social development. To this end, HRSDC will work to become an organization that provides employees with the best working environment possible - where our culture, integrity, respect and innovation means we attract and retain the very best.

In his 2007 Report to the Prime Minister, the Clerk of the Privy Council outlined broad priorities in support of his renewal agenda for the Public Service. Enhancing the Department's capacity to do integrated human resources and business planning is consistent with one of the priorities set out by the Clerk. Emphasis will be placed on better integrating human resources considerations and challenges with business planning processes, with a view to sustaining an effective and competent workforce and meeting the Department's objectives.

Recruiting competent candidates to renew its aging workforce and retaining skilled employees are ongoing activities of the Department. HRSDC must take proactive steps to respond to labour market trends pointing to long term shortages in skills and knowledge on which the Department relies. Fuelled by fewer entrants into the labour market and increasing numbers of employees eligible to retire, it will be a challenge for the Department to fulfill its HR requirements. Also, improving the representation of designated groups remains an ongoing priority for the Department.

Rapidly increasing workforce availability of visible minorities results in a commensurate need for the Department to adopt accelerated strategies to attract and retain designated groups under the Employment Equity Act.

Associated Risk

The risk that the Department may not be able to ensure sustainable leadership and a skilled and knowledgeable workforce to successfully deliver on its mandate and meet Canadians' expectations for accountable and responsive programs and services.

Like other departments and Canadian businesses, HRSDC faces risks in the loss of leadership and skills capacity in key areas that impinge on its ability to deliver its policies, programs and services such as policy analysts, program advisors, labour affairs officers and mediators. The impending retirement of a high proportion of senior managers has implications on the development of leadership and managerial competencies to engage employees and achieve excellence. The Department's staff turnover, particularly in shortage occupational groups, continues to be a pressing challenge for managers and employees alike. For example, one of the conditions for Service Canada's success is to secure human resources flexibilities to address fluctuating workloads in support of its transformation initiatives.

Prompted by a "call to action" from the Clerk of the Privy Council to strive for excellence through Public Service Renewal, the Department continues to pursue its 3-year Human Resources Action Plan. Efforts also continue on building knowledge and succession planning.

To mitigate the risk of loss of corporate memory at the executive level, the Senior Management Committee will hold regular Strategic Talent Management discussions to strengthen leadership development in the EX group as well as feeder groups. Concerted attention is also paid to the development of competency profiles needed to achieve excellence, recruit a diverse workforce and implement learning plans based on competency profiles.

In addition, the Department continues to explore the current and emerging HR environment in order to better understand opportunities and barriers to effective recruitment. Through a workforce demographic analysis of the department's strengths and weaknesses and an understanding of the dynamics of today's labour market, the Department will be able to define performance measures that will enable comparative benchmarking and assessment of progress in human resource management over time.

Priorities for 2008-2009

Human resource (HR) management is critical to recruiting, retaining and developing the workforce that will sustain the Department's ability to develop policy and deliver well managed programs and quality service in the future. Building on the Public Service Renewal four pillars of integrated planning, recruitment, employee development and enabling infrastructure, the department will establish a multi-year Human Capital Management Framework, vital to effectively manage a dynamic and diverse workforce. This framework will also be composed of four elements: integrated human resource planning, recruitment and retention, organisational renewal and learning and development.

Given the HR management context outlined above, HRSDC will enhance its capacity to integrate human resources and business planning. Human resources considerations will be fully integrated into the department's business planning process, with a view to attracting and sustaining an effective and competent workforce capable of achieving the Department's objectives.

Recruitment activities will target key skills shortage areas including employees with knowledge of policy development, program management and service delivery. Enabling functions such as finance, human resources management, and communications will also be the focus of recruitment and retention activities. Particular attention will be focused on the development of strategies to increase the recruitment and retention of visible minorities, persons with disabilities and aboriginals at all levels of the organization.

The Department will implement an action plan designed to improve the timeliness of essential services related to compensation and employee benefits, classification and staffing. Actions will include streamlining of internal procedures and expanded use of electronic infrastructure.

To comply with the Official Languages Act, the department will implement a newly created corporate official languages training program to help employees attain the language proficiency they require for their positions and career progression. HRSDC will continue to target post-secondary recruitment in order to revitalize its workforce and increase attention on succession planning and recruitment of candidates to middle and senior management positions.

Performance management is critical to organizational success. The importance of feedback between managers and employees will be emphasized. We are targeting a 100% completion rate for learning plans. In support of these efforts we will develop a comprehensive Learning Policy that will help guide the required investments in learning and development of the departmental workforce.

Sustainability of the workforce also requires that we develop a better understanding of intergenerational challenges and opportunities. Understanding and implementing characteristics of a workplace of choice will enhance the Department's ability to attract and retain highly skilled and motivated staff.

As a component of the Human Capital Management Framework, HRSDC is committed to Organizational Renewal and fully implementing flexibilities under the Public Service Modernization Act such as expanding the delegation of human resources authority, new departmental policies and integrated planning to ensure that managers are well supported. Another key feature supporting this organisational renewal is to put in place an infrastructure that will support optimal organisational design, process transformation and automation.

Leadership development will focus on sustaining and enhancing the Public Service leadership competencies to enable them in meeting their accountabilities in terms of results achieved and the means by which they are attained. This revised indicator will be incorporated in the Performance Management Agreement of all senior executives. HRSD will strengthen leadership capacity by implementing an executive recruitment plan and an aggressive approach to succession planning by further developing and implementing an Aspiring Executive Development Program.

The department will focus on leveraging available technology as an enabler to improving Human Resources services. Specifically, the department will define the parameters for an Enterprise Resource Planning (ERP) project which will replace the current HR management information system. The department will also pursue short-term solutions that align to the ERP project and work in partnership with other government departments (e.g. adopting Agriculture Canada's Fast-Lane Staffing tool).

Performance Measurement Framework

HRSDC is committed to measuring its performance, managing for results and reporting on its progress. To accomplish this, HRSDC has established a performance measurement framework that allows the Department to understand its operating environment, define clear performance expectations and track progress.

The performance measurement framework provides Parliament and Canadians with information to assess the Department's progress towards achieving results.

The Department's performance measurement framework, as depicted in Diagram 1 below, sets out two types of indicators: strategic outcome indicators and program indicators.

Accountability for Departmental Performance

Strategic outcome indicators reflect the ultimate results that the Department is striving to influence over the medium-to-longer term. It is important to note that while the strategic outcomes are within HRSDC's sphere of influence, the Department is not the sole contributor to their attainment. Other orders of government, other federal departments, key stakeholders and partners, as well as individual Canadians make important contributions.

Program indicators relate directly to the programs that the Department delivers. These indicators facilitate the setting of targets or objectives for the Department's programs and the monitoring of results. Most of these indicators are measures over which the Department exercises substantial control. Program indicators can be operational in nature and related to outputs and include client satisfaction, program access and reach, as well as measures of the impacts or results achieved by the program. Different from Strategic Outcome indicators, Program Indicators provide a mechanism through which the outcome of departmental actions can be acknowledged, identified and accountability can be applied. These indicators form the basis of the Department's Report Card for reporting in the Departmental Performance Report.

Positive change in program indicators should be interpreted as a necessary, but not sufficient, condition to achieve improvement in strategic outcomes. The Department recognizes that performance indicators are only part of a comprehensive performance measurement framework. Program evaluations also provide an important source of information on the effectiveness of HRSDC programs.

Service Indicators: Service Canada has created a standard scorecard to report on performance. The Scorecard includes Service Indicators and additional measures related to the quality, timeliness and volumes associated with the delivery of services to Canadians on behalf of HRSDC and other government departments and agencies. Service Canada's annual Scorecard tells Canadians how performance compares to established Service Standards, showing both positive results and areas that need work. Service Canada will continue to build on the existing performance indicators, create new ones where few exist and create composite indicators to measure performance from a results-based perspective.

Section II Program Activities by Strategic Outcome

Policies and Programs That Meet the Human Capital and Social Development Needs of Canadians

A. Policy, Research and Communications

HRSDC's strategic policy, research, and communications functions contribute to policies and programs that help to create opportunities and choices for people to reach their full potential in society and the labour market. The research and evaluation component of strategic policy helps to identify trends, pressures and an understanding of what works for Canadians in terms of policies and programs. This includes:

• developing a comprehensive knowledge base to inform policy development and program design;
• sharing knowledge on human resources and social development with other governments and stakeholders to support their decision-making;
• managing a portfolio of key national surveys on human resources and social development to track and better understand the changing realities and needs of Canadians, including factors that affect their lives and well-being;
• commissioning policy research to identify factors that contribute to a stronger and competitive economy and which impact Canadians;
• monitoring and forecasting conditions of labour supply and demand by occupation and industry through the Canadian Occupational Projection System.

Work under this activity also includes developing and implementing indicators to strengthen the Departments capacity to monitor and report on the dimensions of Canadian well-being related to human resources and social development. The Department's work in this area also enhances the Department's accountability to Canadians.

The evidence base formed by this work informs the Department's longer-term policy work (such as policy frameworks and medium-term policy planning) to facilitate better integration of labour market, social and learning policies.

To these ends, the Department is committed to making HRSDC a centre of excellence for integrated human resources and social development policies and programs. Two key innovations in this will be an integrated policy framework and an ongoing medium-term policy planning process. Collaborative work that occurs internally and across federal departments, as well as with the provinces and territories, on horizontal policies is also key to advancing the well-being of Canadians. The Department will also increase its efforts to learn from the experience of other countries and adapt best practices to Canada.

HRSDC is also committed to increasing Canadians' awareness of its role in supporting the Government of Canada's social and economic priorities, and becoming a centre of excellence for citizen-focused programs and services. To that end, the Department will develop communications strategies to highlight programs and policies in support of key government initiatives, as well as develop mechanisms to ensure that public and stakeholder views are considered in program and policy development.

Plans in Support of Strategic Outcome

Policy, Research and Communications

Plan: Strategic advice and policy research to support a Knowledge Advantage for Canada

• Provide strategic advice to assist in addressing labour market issues related to quantity (increased participation of Canadians and immigrants); quality (education, skills development and training); and, efficiency (facilitating mobility and providing labour market information).
• Develop policies that support the Government's commitment to continue to invest in families.

Plan: Advance knowledge development and management to support informed policy development and sound decision-making

• Continue to strengthen knowledge development functions including data, research, evaluation, and indicators.
• Further develop knowledge management strategies to achieve excellence in the creation, retrieval, preservation, sharing and use of knowledge.

Plan: Strategic advice and policy research on Children, Families and Seniors

• Contribute to the continued policy development of supports for the working poor.
• Continue to examine key pressures and challenges confronting Canadian families to create conditions for Canadian families to succeed.
• On-going policy development related to children and families
• Develop policies that support the Government's commitment to continue to invest in families and to help those seeking to break free from the cycle of poverty and homelessness

Plan: Increase Canadians' awareness of HRSDC programs and policies in support of Government of Canada priorities

• Implement measures to raise awareness with respect to:
  • Strategic investments in early childhood development and child care.
  • Development of a skilled workforce and increased dissemination of information about the labour market.
  • Programs to ensure that seniors, persons with disabilities, homeless persons and other Canadians facing barriers have the support and information they need to maintain their well-being.
  • Programs intended to increase access to post-secondary education.

Plan: Increase engagement and collaboration with provinces, territories, partners and Canadians through stakeholder relations and other activities to ensure better, more innovative and more complementary policy initiatives

• Strengthen horizontal relations with provincial and territorial governments, stakeholders, other departments and central agencies by developing a stakeholder relations framework, including principles.
• Continue to consider new research and results of stakeholders' consultations in the development of programs and policies.
• Establish a departmental stakeholder relations network to share information and tools.

Program Activity Description

Policy, Research and Communications

This Program Activity provides strategic policy advice and leadership by promoting key human resources and social development policies of the Government of Canada, developing and implementing key Departmental frameworks and strategies, and by engaging and collaborating with partners and Canadians through stakeholder relations and by advancing knowledge development. This activity plays a vital role to support the achievement of HRSD's priorities and outcomes by communicating with and engaging Canadians and building strong relationships with stakeholders. The operating expenditures are funded from the Departmental Reference Levels, the Employment Insurance Account and the Canada Pension Plan Account.

For more details on this program activity please see Section IV - Other Items of Interest.

Enhanced Canadian Productivity and Participation Through Efficient and Inclusive Labour Markets, Competitive Workplaces and Access to Learning

B. Labour Market, Workplace Skills and Learning

Canada's continued prosperity lies in maintaining strong economic growth, high levels of productivity and increased competitiveness through the creation of a highly educated, skilled and flexible labour force. Increasingly, the labour market will require workers with higher levels of skills and education, which are vital to improving productivity and sustaining strong economic growth.

A key aspect of strengthening Canada's productivity and improving quality of life is enhancing the competitiveness of Canadian workplaces. Skilled workers contribute to this competitiveness and help drive improvements in workplace productivity.

The demands of a knowledge-based economy, coupled with the aging of Canada's population and workforce, make post-secondary enrolment and completion more important than ever. Without greater learning participation, Canada risks seeing its productivity and prosperity shrink.

As such, HRSDC must continue to focus on supporting and developing a highly skilled and adaptable labour force. In support of achieving this Strategic Outcome, the Program Activities "Labour Market", "Workplace Skills", and "Learning" complement each other in providing Canadians with the opportunities and choices to participate in an array of programs.

Although these program activities have distinct roles and responsibilities, they have common elements that contribute to the Department's support of lifelong learning and the development and use of skills to work in the current and future labour market. HRSDC will develop and strengthen partnerships and relationships with the provinces, territories, and stakeholders, especially employers and post-secondary education institutions.

The Government of Canada has a clear role in addressing national skills and employment issues. Federal responsibilities include improving the country's economic union by working to remove barriers to employment, post-secondary education and lifelong learning as well as enhancing mobility and credential recognition and providing national labour market information. Also included in these responsibilities is addressing the labour needs of employers by facilitating the entry of temporary foreign workers when Canadians and permanent residents are not available.

In addition to this, HRSDC programs address the needs of people who wish to participate in the labour market that are in groups under-represented in the Canadian workforce, such as immigrants, Aboriginal people, people with disabilities, youth and older workers. These groups frequently face challenges and/or barriers to gaining employment and to furthering their education. Through partnerships, the Department gains an understanding of the workplace skills required, promotes and invests in skills up-grading and development, and works to meet the needs of Canadians, including those in local and regional labour markets.

Together with provinces, territories, partners and stakeholders, HRSDC strives to successfully fulfill its mandate and meet the needs of a growing knowledge-based economy. Each of the program activities supporting this Strategic Outcome target their programs and services toward different needs, yet towards the common objective of creating the best educated, most skilled and flexible workforce.

Efficient and Inclusive Labour Markets...

Within the Labour Market program activity the Employment Insurance (EI) program promotes individual well being, economic stability and a flexible labour market by providing temporary income support to unemployed workers who qualify under Part I of the Employment Insurance Act. The program encompasses a wide range of income benefits to address the needs of workers and the labour market, including Canadians who are sick, pregnant, or caring for a newborn or adopted child, as well as those who must care for a family member who is seriously ill with a significant risk of death. The program also provides active employment benefits and measures and temporary income support to Canadians. These measures and income support give Canadians the opportunity to develop skills, improve earnings and become more adaptable to labour market changes.

Labour market programs also enable Canadians, including unemployed adults and targeted groups, such as youth, Aboriginal people and older workers, to develop their skills and encourage them to invest in themselves and become self-reliant. Through this programming the Department promotes economic stability, individual well-being, and a flexible labour market that is capable of adjusting to changes in the economy.

Work has begun on the development of new approaches to ensure labour market training can be made more widely available to Canadians. In support of this, negotiations will continue to take place with provincial and territorial governments to discuss the full transfer of the Labour Market Development Agreements for the delivery of training programs to EI eligible clients. Additionally, a new generation of labour market agreements will be negotiated to assist those clients who are non-EI eligible and are therefore unable to obtain the necessary training and skills development they require to fully participate in the labour market. The department is also exploring the feasibility of transferring federal labour market programs for youth, older workers and persons with disabilities to provincial and territorial governments.

Competitive Workplaces...

Through the Program Activity "Workplace Skills" HRSDC supports broad economic priorities, such as an adaptable and resilient workforce with high quality skills; a sufficient quantity of skilled workers that meet the needs of employers; and a flexible, efficient labour market.

Workplace Skills aims to improve Canadian economic competitiveness by fostering innovative, productive and inclusive workplaces, where workers are encouraged and supported to develop and use their knowledge, skills and abilities. This program activity promotes and encourages employers across the country to invest in the skills development of their workers.

HRSDC generates accessible and quality labour market information to inform the decision-making of employers and employees; supports and promotes employer and employee investments in skills development; and supports apprenticeships and labour mobility. HRSDC, in collaboration with key stakeholders, also works to improve the integration of internationally trained workers into the workforce by facilitating the assessment and recognition of qualifications acquired outside of Canada. The Department also works to mitigate domestic labour shortages by facilitating the entry of foreign workers to meet short-term labour and skills needs to benefit the Canadian labour market.

Human Resources and Social Development Canada's work pertaining to the Workplace Skills program activity supports the Government of Canada's outcome of an innovative and knowledge-based economy.

On behalf of the department, Service Canada delivers a number of programs, including the Employment Benefits and Support Measures, the Apprenticeship Incentive Grant, Temporary Foreign Worker Program, Aboriginal Human Resource Development Agreements, Opportunities Fund for Persons with Disabilities, and Labour Market Information.

Access to Learning...

Lifelong learning is vital to the well-being of individual Canadians, as well as to the productivity, competitiveness and prosperity of Canada.

A significant key to increased productivity is education. "By increasing education, citizens are better equipped to contribute to the development of public policy and participate fully in public discourse.³ Individuals and society benefit from better health outcomes and reduced crime rates."⁴

Education can serve to level the playing field, allowing those from less advantaged backgrounds to acquire the skills and knowledge needed to get ahead. As knowledge becomes even more important to individual economic advancement, the risks of the lower participation rates of low-income Canadians, youth whose parents did not pursue higher education and Aboriginal peoples include not only lower incomes for individuals and lower productivity, but also an increasingly fractured society and a resulting poorer quality of life for all Canadians.⁵

HRSDC helps Canadians gain access to the learning opportunities they need to participate more fully in a knowledge-based economy and society. The Department fosters a culture of lifelong learning by:

• Promoting awareness of the importance of lifelong learning and the need to save for post-secondary education;
• Facilitating access for students to post-secondary education and adult learning opportunities;
• Reducing non-financial barriers (awareness, distance, and time constraints) to adult learning by contributing to the development of innovative approaches to adult learning; and
• Collaborating with provincial and territorial governments and key stakeholders on the delivery of learning programs and services.

To better demonstrate results for Canadians, during 2008-2009 the Department will be using new information gathered through surveys, to establish targets for several new performance indicators. These will be included in future Reports on Plans and Priorities.

The first of these indicators will indicate whether those who need financial assistance are receiving it through the Canada Student Loans Program. Other planned indicators will enable the Program to determine the extent of awareness amongst Canadians of the financial assistance to students that is available, including savings incentives. These new indicators will allow us to determine if those who need the program have access to it and whether or not the programs efforts to make Canadians aware of the options available to assist them to obtain post-secondary education are working.

The Canada Student Loans Program is a horizontal initiative managed by HRSDC as part of the Learning Mandate. The Program is currently undergoing a review that focuses on simplifying the program; the results of the review will be announced in Budget 2008. The Program also manages the Department's relationship with the Canada Millennium Scholarship Foundation (CMSF), with which the government has a funding agreement. The CMSF is a private, independent organization created and funded by an act of Parliament in 1998. "Its objectives are to improve access to post-secondary education for all Canadians, especially those facing economic or social barriers; to encourage a high level of student achievement and engagement in Canadian society; and to build a national alliance of organizations and individuals around a shared post-secondary agenda"⁶. The CMSF delivers bursaries and scholarships to students across Canada and helps reduce student debt and compliments the loans and grants provided by the Canada Student Loans Program.

Plans in Support of Strategic Outcome

Labour Market

Plan: Increase workforce participation and develop the skills of Canadians by working with provinces, territories and partners in the implementation of strategies that will eliminate barriers to employment and improve choices and opportunities

• Lead the development of a new Labour Market Architecture to make labour market training more widely available for Canadians:
  • negotiate the transfer of non-devolved Labour Market Development Agreements to provinces and territories to deliver training programs to EI eligible clients;
  • negotiate a new generation of labour market agreements for non-EI eligible clients such as social assistance recipients, immigrants, persons with disabilities, youth, older workers, and Aboriginal people;
  • explore the feasibility of transferring federal labour market programs to Provinces and Territories including Older Workers, Youth, and Persons with Disabilities.
• Ensure the Employment Insurance program continues to respond to the temporary income support needs of working Canadians:
  • support implementation of government commitments to improve the governance and management of the EI account;
  • develop options and plans to support decisions related to Employment Insurance Pilot projects.
• Develop and implement strategies to enhance skills of Aboriginal people:
  • foster partnerships that help Aboriginal people obtain skills and training to take advantage of job prospects in the North and across Canada;
  • assess, develop and implement options for a post-2009 Aboriginal labour market strategy.

Workplace Skills

Plan: Implement innovative and key workplace skills initiatives, in collaboration with provinces, territories, private sector and stakeholders to improve the quality and the efficiency of the labour market

• Provide leadership on national economic union issues, contributing to a more efficient labour market:
  • work with provinces territories and partners on labour mobility issues, including skilled trades and recognition of credentials (both domestic and foreign) by reducing barriers and enhancing the labour mobility of Canadians;
  • improve the labour market information products and services that are available to Canadians.
• Improve the quality of industry-driven approaches with regard to workplace skills:
  • develop the next phase of the Trades and Apprenticeship Strategy;
  • support sectoral initiatives, including adjustments in all industry sectors including traditional industries and develop new approaches to improve workplace partnerships;
  • facilitate the entry of temporary foreign workers while continuing to ensure Canadians have first access to job opportunities, and develop employer monitoring and compliance measures;
  • Develop tools and other support mechanisms to raise Literacy and Essential Skills of Canadians.

Learning

Plan: Modernize financial assistance to students as announced in the Advantage Canada Plan.

• Complete the transition to the selected Canada Student Loans Program Service Provider.
• Implement recommendations from the Office of the Auditor General’s Report on Federal Loans and Grants for Post-Secondary Education.
• Strengthen program integrity, governance, accountability and stewardship by implementing recommendations from Canada Education Savings Program operational review and evaluations.
• Continue to work with provinces and territories to modernize the delivery of financial assistance to students.

Plan: Develop policy options and instrument choices related to financial and non-financial barriers to learning.

• Continue program policy and diagnostic work with the provinces, territories, other federal government departments and non-governmental organizations to support learners.
• Further enhance the quality of data and research in support of policy development work on key issues, including access to, and the affordability, completion and promotion of, learning.
• Renew and expand the International Academic Mobility Initiative.
• Identify, explore and develop policy options and instrument choices related to financial and non-financial barriers to learning.
• Develop and implement measures to encourage increased savings by Canadians for their children’s post-secondary education.

Program Activity Descriptions

Labour Market

This Program Activity is comprised of Employment Insurance and Labour Market Programs. Employment Insurance programs promote individual well being, economic stability, and a flexible labour market by providing temporary income support to unemployed workers who qualify under Part I of the Employment Insurance Act. Employment Insurance encompasses a wide range of benefits to address the needs of workers and the labour market, including Canadians who are sick, pregnant, or caring for a newborn or adopted child, as well as those who must care for a family member who is seriously ill with a significant risk of death. Labour Market Programs provide programs and services that are funded from Departmental Reference Levels and for those programs established under Part II of the Employment Insurance Act, the Employment Insurance Account. These programs enable Canadians, including unemployed adults and targeted groups, such as youth and Aboriginal Peoples, to develop their skills and encourage them to invest in themselves and become self-reliant and more adaptable to labour market changes. The operating expenditures are funded from the Departmental Reference Levels and the Employment Insurance Account.

Workplace Skills

This Program Activity collaborates with industry partners and stakeholders through Workplace Partnerships to identify, address, and promote workplace skills development. Workplace Skills improves immigrant integration outcomes through programs such as Foreign Credential Recognition, the Immigration Portal, and the Foreign Worker Program. Workplace Skills also develops and disseminates knowledge and information, which is vital to inform a well-functioning labour market through Skills and Labour Market Information, including National Occupational Classification and Essential Skills. Funding is administered through voted contributions. The operating expenditures are funded from the Departmental Reference Levels and the Employment Insurance Account.

Learning

This Program Activity assists Canadians in acquiring the education and skills that will enable them to participate in a knowledge-based economy and society. In doing so, the program works in close partnership with the provinces and territories, voluntary sector, financial institutions, service providers and other key stakeholders to increase awareness of, preparedness for and access to lifelong learning opportunities by reducing financial and non-financial barriers for today's and tomorrow's learners. Programs within this area are delivered nationally and include statutory and voted programs. In terms of statutory programs, the Canada Student Loans Program promotes accessibility to post-secondary education through the provision of loans and grants to students with demonstrated financial needs. The Program also offers debt management measures to help borrowers with repayment. The Canada Education Savings Program promotes and encourages Canadians to save for a child's post-secondary education through Registered Education Savings Plans by providing grants. In terms of voted programs, the International Academic Mobility initiative administers contribution programming in the area of international student mobility. The operating expenditures are funded from the Departmental Reference Levels and the Employment Insurance Account.

For more details relating to these programs please see Section IV - Other Items of Interest.

Safe, Healthy, Fair, Stable, Cooperative, Productive Workplaces and Effective International Labour Standards

C. Labour

The workplace is where Canada's wealth is generated and where many Canadians spend a significant proportion of their day. Therefore, fulfilling the mandate of the Labour Program that deals with workplace issues is crucial to the performance of Canada's economy and the well-being of its citizens. That mandate can be defined, in general terms, as supporting balanced, cooperative relationships between employers and employees and fostering safe, healthy, fair, and productive work environments. This mandate operates at three levels:

• Federal Jurisdiction Mandate - The development and administration of labour-related legislation governing federally-regulated private sector employers, which employ approximately 8.5 per cent of the Canadian labour force. In addition, the federal public sector is covered by occupational health and safety legislation.
• National Mandate - National leadership and coordination within the network of labour jurisdictions in Canada in the interests of strengthening the Canadian economic union and sharing best practices.
• International Mandate - Managing Canada's international labour affairs, including the negotiation and implementation of international labour agreements, often in the context of free trade agreements, and representation of Canada in the International Labour Organization and other multilateral organizations dealing with labour issues.

The primary stakeholders of the Labour Program are employers, employees and unions in the key economic sectors covered by federal labour laws and programs. These sectors include:

• Interprovincial and international transportation (airlines, rail, inter-provincial trucking, ports and airports);
• Telecommunications (broadcasters, cable companies, telecom companies, Internet providers);
• Chartered banks;
• The post office and courier companies;
• Industries declared by Parliament to be in the national interest, such as grain handling and uranium mining;
• Aboriginal governments, their employees, and certain Aboriginal undertakings;
• A wide range of companies who have major contracts with the federal government and are therefore covered by the Federal Contractor Program for Employment Equity;
• Federal Crown corporations; and
• Federal departments and agencies for occupational health and safety purposes.

The Labour Program's federal jurisdiction mandate covers an estimated 46,000 Canadian workplaces employing approximately 1.1 million employees. The Labour Program's clients are employers, their employees and unions in key sectors of the economy. These clients are generally sophisticated, intensely concerned with all aspects of labour policy, and well organized, whether through labour organizations or business associations. Labour Program clients expect high levels of professionalism in both administration and policy development. Beyond the federal jurisdiction, the Labour Program interacts with a wide variety of business, labour and other non-governmental organizations on both national and international issues.

The economic importance of industries under federal jurisdiction is enormous. Significant economic and social impacts can be caused by labour strife in such industries as air transportation, telecommunications, railways, ports, and postal and courier services. Not only do employers and unions in these industries look to the Labour Program to facilitate constructive labour relations, but thousands of businesses in provincial jurisdictions can also be immediately impacted by labour disputes in the federal jurisdiction. Transportation and communications are critical elements in the infrastructure of the economy, and third-party impacts of work stoppages in these sectors are immediate and substantial.

Rights in the workplace are among the most tangible and important rights that citizens have in practical, day-to-day terms. The presence of the Government of Canada is represented directly to thousands of Canadians every year in workplaces across the country by officials of the Labour Program. The Labour Program's compliance programs are particularly significant in the case of non-unionized employees. Employees who are dismissed or who are not properly paid their wages and who have no union to represent their interests must rely on a Labour Program officer to protect their rights. The lack of access, or prolonged delays in obtaining responses to complaints, can have a serious impact on personal lives, and be far more costly to employers, employees and the government than rapid resolution through mediation or other forms of alternate dispute resolution.

Employees and employers rely on Labour Program officials to promote and protect their health and safety at work. The right to refuse dangerous work and other rights related to occupational health and safety have important implications for both employees and employers. A strong, proactive occupational health and safety program is the most effective way to reduce accidents and occupational diseases in the workplace, which benefits both employees and employers. Fewer accidents reduce the costs incurred as a result of injury or illness, but also result in increased job satisfaction and productivity. The consequences of lax administration in this field can include high costs to companies and the economy, and can be tragic at the level of the individual worker. On the other hand, there are very large potential savings for public health care and workers' compensation systems when good occupational health and safety practices are in place.

Women, Aboriginal peoples, members of visible minorities, and persons with disabilities look to the Labour Program to promote equal employment opportunity through the administration of the Employment Equity Act and the Federal Contractors Program for Employment Equity. Over 500 federally-regulated employers, the federal public service, and some 1,000 federal contractors under provincial jurisdiction are covered by employment equity requirements. These employers must identify areas of under-representation, remove barriers to the designated groups, and implement a plan to achieve appropriate representation. The Racism-free Workplace Strategy, as part of the Government of Canada's Action Plan against Racism, complements employment equity requirements by educating employers and providing resources that are aimed at eliminating barriers to employment and advancement faced by members of visible minorities and Aboriginal people - this includes supporting advancement in the workplace.

Internationally, it is increasingly recognized that alongside trade liberalization, which brings substantial economic benefits, it is important to address the social dimensions of globalization. This includes promoting respect for core international labour standards, a complex undertaking that requires the Labour Program to represent Canada in multilateral labour forums in this hemisphere and globally, and to negotiate bilateral labour agreements and cooperative frameworks with partners on various continents. Because significant numbers of these partners are developing countries, the Labour Program is facing growing pressure to provide technical assistance to help them meet international labour standards and agreement obligations. The important role played by the Labour Program in Canada's trade agenda has led to new levels of collaboration with other actors crucial to successful management of trade-related labour issues in a globalized world; namely, other government departments, provincial and territorial ministries of Labour, union and employer associations, and other donor countries.

In addition to managing its ongoing operations in the 2008-2009 fiscal year, the Labour Program will focus on a number of priority initiatives.

Some of these initiatives relate to programs and policies that have already been approved. One is implementation of a comprehensive package to facilitate the reinstatement of military reservists into employment or post-secondary studies after a period of service with the Canadian Forces. This package includes job protection for reservists working in the federally-regulated private sector or the federal public service, relief from student loan payments for student-reservists during periods of military service, and collaboration with provinces and territories to promote effective measures for reservists across the country.

A second initiative that will be implemented in 2008-2009 is the Wage Earner Protection Program, which was approved by Parliament in 2005 and can now be brought into force thanks to technical amendments passed in December 2007. The program will compensate workers, up to a limit of approximately $3,000, for unpaid wages and vacation pay owed to them by employers who are declared bankrupt or are subject to receivership under the Bankruptcy and Insolvency Act.

A third set of initiatives relates to recent regulatory improvements in the area of occupational health and safety. Guidance materials and enabling tools will be developed to assist workers and employers to implement effective programs to help reduce musculoskeletal injuries due to poor workplace ergonomics and to prevent violence in the workplace.

Finally, the Labour Program will continue to implement its new Pay Equity Program, which promotes equal pay for work of equal value through a combination of specialized information, monitoring, and mediation.

In addition to implementing approved initiatives on the domestic front, the Labour Program will endeavour, consistent with Government policy, to advance Canadian interests and values in the negotiation and implementation of international labour standards and agreements. These efforts will occur in both bilateral contexts - notably during the negotiation of free trade agreements - and multilateral contexts - particularly the International Labour Organization.

The Labour Program will also seek to enhance the engagement of Canada's provinces and territories on international labour issues. Of particular importance are adherence to Labour Cooperation Agreements that Canada signs with its free trade partners, ratification of international labour conventions, and collaboration with respect to the International Labour Organization.

A final category of priority activities is the development of innovative policy and program options that respond to the evolving realities of Canadian workplaces. In this connection, key activities will include the exploration of the causes and impact of work stoppages and options for reducing their frequency and duration in federally-regulated industries; analysis of the recommendations of the Federal Labour Standards Review and discussions on next steps with stakeholders; improvements to the administration the Government Employees' Compensation Act, which provides benefits for federal employees who are injured on the job; and development of information and options for the consideration of the Parliamentary Committee charged with the five-year review of the Employment Equity Act. Labour Program staff, working with others, will also continue to examine labour-related issues raised by stakeholders or in public discussion; examples include leave provisions for pregnant and nursing women and for victims of criminal activity, best practices with respect to work-life balance, and pandemic planning in the workplace context.

More information on the Labour Program can be found at: www.hrsdc.gc.ca/en/gateways/nav/top_nav/program/labour.shtml

Plans in Support of Stategic Outcome

Labour

Plan: Fully implement recently-approved programs and policies aimed at fostering fair and productive workplaces

• Play a key role in implementation of a comprehensive package to facilitate the re-integration of military reservists into employment or studies after a period of service with the Canadian Forces.
• Working with Service Canada, complete the design and ensure the implementation of the new Wage Earner Protection Program.
• Provide employers and workers with information and support related to regulatory changes that address ergonomics and violence in the workplace issues and ban smoking rooms.
• Implement the new Pay Equity Program, which is based on increased and specialized information, mediation, and monitoring activities.

Plan: Advance Canadian interests and values in the negotiation and implementation of international labour standards and agreements

• Pursue the conclusion and implementation of Labour Cooperation Agreements with countries that have, or are negotiating, free trade accords with Canada, and of Memoranda of Understanding on labour cooperation with other key states.
• Work to ensure that the International Labour Organization (ILO) focuses its efforts on practical activities that produce tangible results and that Canada’s interests are protected in the context of ILO deliberations.
• Work to improve federal-provincial-territorial cooperation on international labour matters.

Plan: Develop innovative policy and program options that respond to the evolving realities of Canadian workplaces

• Explore options for reducing the risk, frequency, and duration of work stoppages in federally regulated industries.
• Develop, and consult with stakeholders on, concrete options flowing from the Review of Part III (Labour Standards) of the Canada Labour Code.
• Develop, in collaboration with provincial workers’ compensation boards, options for improving administration of the Government Employees’ Compensation Act (GECA) and, in collaboration with other federal departments, for strengthening disability management activities by employers covered by that legislation.
• Develop options for presentation before the Parliamentary Committee charged with examination of the Employment Equity Act, when that examination is begun.

Program Activity Description

Labour Program

This Program Activity promotes and sustains stable industrial relations and a safe, fair, and productive workplace within the federal labour jurisdiction. It collects, disseminates, and analyzes labour and workplace information; fosters constructive labour-management relationships; ensures compliance with minimum labour standards and occupational health and safety protections; and represents Canada in international labour matters. The Labour Program's federal jurisdiction mandate reaches an estimated 46,000 Canadian workplaces and approximately 1.1 million employees. Many of the stakeholders of the Labour Program are sophisticated, intensely concerned with labour policy, and well organized, whether through unions or through business associations. Beyond the federal jurisdiction, the Labour Program interacts with a wide variety of business, labour and other non-governmental organizations representing the different interests of Canadians on both national and international labour issues.

From the point of view of the average worker, the Labour Program's role is to protect his or her rights at work. Employees who are members of unions often benefit from the services of Labour Program Mediation and Conciliation Officers who assist their unions and employers in resolving collective agreement disputes in a productive manner without disruption to their working lives. Employees who are dismissed or who are not properly paid their wages, and who have no union to represent their interests, must turn to a Labour Program officer for assistance. Employees rely on Labour Program officials to protect their health and safety at work by promoting a culture of health and safety, including the use of workplace health and safety committees, and by enforcing the right to refuse dangerous work and other rights related to occupational health and safety. Aboriginal people, visible minorities, women and persons with disabilities look to the Labour Program to promote equality of employment opportunities. The operating expenditures are funded from the Departmental Reference Levels and the Employment Insurance Account.

Enhanced Income Security, Access to Opportunities and Well-Being for Individuals, Families and Communities

D. Social Investment, Children and Families, Housing and Homelessness⁷

Well-being for Individuals, Families and Communities...

Canada's economic prosperity, dynamic labour market, and its strong and vibrant society are closely linked to the security and well-being of Canadians, their families and communities.

The Government of Canada is committed to helping all Canadians meet their needs by continuing to invest in the future of Canadian families and communities, and help those seeking to break free from the cycles of homelessness and poverty.

As highlighted at the outset of this report, individuals, families and communities are facing new challenges. HRSDC is working with other government departments, stakeholders, and the provinces and territories to address these challenges.

HRSDC provides a number of programs and services for Canadians to supply them with the support, knowledge, and information they need to maintain their well-being and facilitate their participation in all areas of society. There is a special emphasis on vulnerable Canadians.

In 2008-2009, HRSDC will continue its efforts to build and improve social investments for Canadians with a focus on core social programs for:

• children and families;
• seniors;
• people with disabilities;
• communities; and
• homeless people and those at risk of homelessness.

The Department will achieve this by ensuring that programs are accountable, efficient and managed to achieve results.

Enhanced Income Security...

Ensuring income security is essential to the quality of life and well-being of Canadians. HRSDC develops and administers a broad range of programs that address the needs of seniors, people with disabilities and children and families. For example, in delivering and administrating the Canada Pension Plan and Old Age Security, the Department is committed to ensuring that seniors receive all the retirement benefits to which they may be entitled.

Income security is also a significant challenge for people with disabilities. Many of these individuals are not always able to earn an adequate income through employment. Recognizing these factors, the Government of Canada uses its fiscal and tax policies to support people with disabilities and their caregivers through a variety of income support measures and tax incentives. HRSDC also manages the Canada Pension Plan Disability program which pays monthly benefits to eligible contributors to enhance the social and economic participation of people with disabilities.

The program is Canada's largest long-term disability insurance plan and is an important source of earnings replacement for Canada Pension Plan contributors who cannot work due to a severe and prolonged disability. In terms of new disability-related programming, the Department will implement the Registered Disability Savings Program announced in Budget 2007. This initiative will assist people with severe disabilities who qualify for the Disability Tax Credit to have savings to meet their needs later in life.

The economic security of families with children is another key area of concern for HRSDC. Despite a strong economy, some families with children continue to face challenges, and HRSDC is focused on improving conditions for those families with children living in low income.

Access to Opportunities

Access to opportunities refers to a wide variety of social programs and services that help individuals and families who face barriers in society and in the labour market. For HRSDC this means strengthening and building capacity to increase access to services, information, and resources, as well as funding and encouraging social programs that empower and engage citizens.

Recognizing that the needs of families are diverse, the Government of Canada provided parents with the flexibility to choose the option that best suits their needs. The Universal Child Care Plan recognizes families as the key building block of society and gives parents the flexibility to balance work and family as they see fit. HRSDC will continue to support the implementation of the Universal Child Care Benefit, the cornerstone of Canada's Universal Child Care Plan. Through the Universal Child Care Benefit, parents receive $100 per month (up to $1200 per year) for each child under the age of six, to help support them in the choice of child care that best meets the needs of their family.

HRSDC continues to examine key pressures and challenges confronting Canadian families to create conditions and opportunities for success. HRSDC is committed to demonstrating federal leadership to provide greater choice and flexibility in child care, and fostering a work life balance.

HRSDC will continue to ensure that low-income families are effectively supported through the National Child Benefit initiative. Through this initiative, the federal government works in partnership with provincial and territorial governments to provide income support, as well as benefits and services, for low-income families and their children. The Government of Canada's contribution to this initiative is the National Child Benefit Supplement. In 2008-2009, the Department will also contribute to the continued development of supports for the working poor.

In addition, HRSDC will continue to work with its provincial and territorial colleagues on the implementation of commitments made in intergovernmental agreements in support of young children and their families. This includes the 2000 Federal/ Provincial/Territorial Early Childhood Development Agreement and the 2003 Multilateral Framework on Early Learning and Child Care, as well as monitoring the investments made by provinces and territories in support of the creation of child care spaces as outlined in Budget 2007.

As the federal government's focal point for seniors' issues, HRSDC supports and co-ordinates federal efforts to identify challenges and opportunities created by the growing seniors population. HRSDC will continue to work with other federal government departments and with the provinces, territories and stakeholders, on the policy, program development and coordination of the Government's approach to seniors' issues in Canada. HRSDC will also support the work of the Secretary of State (Seniors) and the National Seniors Council.

To improve the well-being of seniors, the Department will continue to deliver the New Horizons for Seniors Program. HRSDC will implement the two new components of the Program announced in Budget 2007 to maintain existing programs and activities for seniors and to help reduce elder abuse and fraud.

HRSDC also supports the Government of Canada on matters affecting people with disabilities. HRSDC strives to improve awareness, coherence, and horizontal management of disability issues within the Department, and across the Government of Canada. In this capacity, HRSDC's Office for Disability Issues will continue to serve as a model of accessibility for the federal government, and provide leadership in promoting accessible workplaces throughout the government. The Department will implement the Enabling Accessibility Fund announced in Budget 2007 to improve accessibility for people with disabilities in their communities by providing funding to contribute to the creation of abilities centres and small capital improvements on existing community buildings.

To contribute to the well-being of individuals, families and communities, HRSDC is committed to supporting the efforts of the community not-for-profit sector to innovate, strengthen networks of collaboration, promote self-sufficiency and share good practices to contribute to community well-being.

There is an emerging phenomenon across Canada where communities are developing unique and innovative local initiatives to improve the social and economic well-being of their residents. HRSDC is working to support these initiatives by helping communities in the area of early childhood development through the Understanding the Early Years initiative, supporting community data development, sharing information across federal departments about Canadian and international trends in community development, and working with the not-for-profit sector.

HRSDC works to prevent and reduce homelessness by working with communities to ensure increased strategic engagement with partners and improved coordination and delivery of services. The goal is to ensure the long-term sustainability of community efforts. To this end, the Homelessness Partnering Strategy provides $269.6M over two years to help put in place the structures and supports needed to move individuals towards self-sufficiency and participation in Canadian society. The Strategy focuses on longer-term supportive and transitional housing as its approach to homelessness in Canada. By working with communities, provinces and territories, the private and not-for-profit sectors and Aboriginal partners, the Strategy encourages an effective alignment of federal/provincial/territorial investments and facilitates access to the range of services and programs needed by homeless individuals and families. Under the Homelessness Partnering Strategy, the federal government offers the provinces and territories the opportunity to enter into bilateral arrangements to improve collaboration between the two levels of government.

Homelessness has a significant impact on other federal policy areas, including health, crime prevention, immigrant settlement and employment. As such, in 2005, the Auditor General recommended strengthened horizontal accountability. The Homelessness Partnering Strategy supports this recommendation and, therefore, has earmarked $1.6M over two years under the Strategy to test innovative horizontal collaboration with other relevant federal programs and policies. Upon conclusion, the results of these pilot projects are expected to inform future homelessness policy development.

Plans in Support of Strategic Outcome

Social Investment

Plan: Raise awareness of seniors’ issues and improve the retirement income system

• Develop and advance policy options to address the issue of elder abuse.
• Develop and implement a plan to inform people about the retirement income system and their role within it.
• Continue review of the Old Age Security Act and the Canada Pension Plan to ensure that the programs meet current and future needs. Implementation of Bill C-36 (an Act to amend the Canada Pension Plan and Old Age Security Act) will be a priority for 2008-2009, particularly those amendments dealing with lifetime Guaranteed Income Supplement applications.
• Support the National Seniors Council on matters related to the well-being and quality of life of seniors.
• Lead the development of policy proposals for the Canada Pension Plan Triennial Review.

Plan: Promote the full participation of people with disabilities in all aspects of society and community life

• Improve awareness, coherence, and horizontal management of disability policies and programs within HRSDC and across the Government of Canada.
• Develop and implement a disability management strategy for HRSDC and the portfolio in collaboration with internal partners.
• Lead in the provision of strategic policy advice, plans and initiatives to achieve the objectives of the 2010 Olympic and Paralympic Winter Games.
• Develop regulations and prepare options and Cabinet documents to prepare for the implementation and administration of the Registered Disability Savings Plan.
• Make strategic investments in community infrastructure through the Enabling Accessibility Fund.
• Develop and advance policy options for a Canadians with Disabilities Act.
• Ensure that the Canada Pension Plan (CPP) remains responsive to the current and future needs of Canadians receiving CPP Disability Benefits by contributing to the CPP Triennial Review.
• Begin Phase II of the summative evaluation of the Canada Pension Plan Disability Program, which will gather mostly quantitative evidence to address evaluation questions regarding the net impacts of the Canada Pension Plan Disability program, on both applicants and beneficiaries.

Plan: Support not-for-profit community sector efforts to innovate, strengthen networks of collaboration, develop capacity and share good practices to contribute to community well-being

• Make strategic investments through the Social Development Partnerships Program in national not-for-profit organizations to improve social outcomes for children, families, people with disabilities and other vulnerable populations consistent with the social priorities of the Government. Prepare for the renewal of the program whose terms and conditions expire in March 2009.
• Increase the participation of seniors through projects funded through the New Horizons for Seniors Program and implement the new program components on capital assistance to maintain existing seniors’ programs and activities, and on the promotion of awareness of elder abuse.
• Develop research, knowledge and policy expertise on social financing to better understand the opportunities for strengthening investments in social infrastructure and services, and address the financing needs of the community non-profit sector.
• Support experimental approaches to community self-help, and the transfer of knowledge across Canada of best practices, models and strategies to promote resilient communities.
• Support a government dialogue on understanding “place-based” policy approaches, models, and best practices in horizontal collaboration and partnerships to contribute to community well-being.

Children and Families

Plan: Provide support and choices for families, through Canada’s Universal Child Care Plan and other existing initiatives, to help ensure their children have the best possible start in life

• Continued implementation of the Universal Child Care Benefit for all children under six, in partnership with Canada Revenue Agency, including a formative evaluation.
• Continued implementation of commitments in existing Intergovernmental (F/P/T) Agreements (2000 Federal/Provincial/Territorial Early Childhood Development Agreement and the 2003 Federal/Provincial/Territorial Multilateral Framework on Early Learning and Child Care).
• Monitoring of provincial and territorial investments of $250M in support of creation of child care spaces, as per commitments in existing intergovernmental agreements.
• Continue to work with provincial and territorial governments on the National Child Benefit initiative.

Housing and Homelessness

Plan: Implement the Homelessness Partnering Strategy

• Seek Cabinet approval for renewal of the Homelessness Partnering Strategy - present terms and conditions expire in March 2009.
• Allocate program funding based on approved community plans/projects, and update program guidelines and tools to implement the Homelessness Partnering Strategy that will ensure continuity of services to homeless people.
• Focus on achieving tangible results for homeless and at risk persons through an approach that focuses on longer-term supportive and transitional housing.

Plan: Develop partnerships to better align investments

• Hold discussions with provinces and territories to offer the opportunity to participate in bilateral arrangements to better align investments in support of community efforts.
• Shape meaningful public-private partnerships in the context of addressing homelessness challenges.

Plan: Strengthen horizontal links between Housing and Homelessness and other policy areas

• Develop and advance policy options to help Canadians seeking to break free from the cycles of homelessness and poverty.
• Develop pilot projects with other federal departments to test collaborative approaches to the prevention and reduction of homelessness, as well as to reduce the impact of homelessness on other related policy areas and vice versa.

Program Activity Descriptions

Social Investment

This Program Activity provides Canadians with pensions and benefits for retirement, death, and disability through the Old Age Security Act and the Canada Pension Plan. It also includes Social Investment programs, policies, and grants and contributions designed to ensure that children, families, seniors, communities, and people with disabilities are provided with knowledge, information, and opportunities to move forward with their own solutions to social and economic challenges. The operating expenditures are funded from the Departmental Reference Levels and the Canada Pension Plan Account.

Children and Families

This Program Activity provides support to families to ensure all children have the best possible start in life; that parents have choice in childcare, to ensure the needs of those who provide care to loved ones are taken into account and that families' economic security is sustained. This activity also undertakes specific initiatives supported by multilateral agreements between the Federal Government and Provinces and Territories through programs such as the Canada's Universal Child Care Plan, the National Child Benefit, and Multilateral Framework on Early Learning and Child Care. The operating expenditures are funded from the Departmental Reference Levels.

Housing and Homelessness⁸

This Program Activity provides programs and services that assist communities in helping homeless individuals and families, as well as those at risk of homelessness, move towards self-sufficiency, thereby contributing to society and the economy. This is accomplished through partnerships with all levels of government, the voluntary and private sectors, foundations, faith-based communities and unions. The activity accomplishes its objectives through the Homelessness Partnering Strategy, a class contribution and class grant program. The four class contribution programs are: Homelessness Partnership Initiative - Designated Communities, Homelessness Partnership Initiative - Outreach Communities, Homelessness Partnership Initiative - Aboriginal Communities, and Homelessness Partnership Initiative - Federal Horizontal Pilot Projects. The Homelessness Knowledge Development Program is a class contribution and class grant program that addresses the gaps and priorities in knowledge around issues of homelessness in Canada. The Surplus Federal Real Property for Homelessness Initiative, whose funds are administered through Public Works and Government Services Canada, provides surplus federal properties to communities across Canada to address their local homelessness-related needs. The operating expenditures are funded from the Consolidated Revenue Fund.

Achieve Better Outcomes for Canadians Through Service Excellence

E. Service Canada

Service Canada is the Government of Canada's one-stop citizen-centred service delivery organization. Its mandate is to improve services for Canadians by working with partners to provide access to a range of government services and benefits that Canadians want and need across multiple service delivery channels including in person, by telephone, Internet or mail.

In collaboration with its service partners, Service Canada provides Canadians with access to more than 60 government programs and services. These include:

• Employment Insurance;
• Canada Pension Plan and Old Age Security benefits;
• Passport Receiving Agent Services;
• Pleasure Craft Licenses;

and many on-line tools and applications such as

• Career Navigator (helps users explore career options and provides relevant information on occupations and employment prospects);
• Statement of Contributions (provides a personalized summary of individual contributions made by citizens to the Canada Pension Plan and their expected pension);
• and Appli-Web (offers an Employment Insurance electronic application).

Service Canada has more than 19,000 employees dedicated to serving Canadians and approximately 600 points of service throughout the country. The Service Canada delivery network includes scheduled outreach and mobile services; processing centres; the national 1 800 O-Canada phone service; the Canada web site; and a range of on-line services offered on the Service Canada web site.

Over the next year, Service Canada will continue to build on achievements to date. This means sustaining and enhancing the delivery of current services, while meeting the needs of Canadians today and into the future. In 2008-2009, Service Canada will focus on three overarching strategic priorities:

Improving Service to Canadians

Service Canada is committed to improving service to Canadians by putting citizens at the centre of how government delivers services and by serving them in the official language of their choice. Canadians will directly benefit from programs and services that are easy to find, easy to deal with and easy to access.

Enhancing the Efficiency and Effectiveness of Service Delivery

By enhancing the quality of service delivery, while reducing its cost, Service Canada is dedicated to improving the delivery of services to Canadians. Service Canada will continue to focus on improving the delivery, including design, of Employment Insurance, Canada Pension Plan, and Old Age Security through a streamlined and consistent approach. Service Canada will also strengthen service delivery, of the above-mentioned programs and services, through the on-going simplification and standardization of automated processes. This work will also be supported by stronger information management practices and the use of technology.

Strengthening Organizational Capacity and Staff Competencies

Service Canada is committed to strengthening organizational capacity and staff competencies. Service Canada will continue to build a business foundation based on sound financial and information technology management that will support the delivery of citizen-centred service. Service Canada will also work towards building a strong workforce, as the organization recognizes that service excellence depends largely on having employees and managers with the right skills, competencies, and commitments to fulfill its mandate.

During 2008-2009, Service Canada will focus on these three priorities through its program activities: Seamless, Citizen-Centred Service; Integrity; and Collaborative, Networked Government Service.

Seamless, Citizen-Centred Service

In the past, Canadians had to determine how to access services and benefits across a multitude of programs and departments. Citizen-centred service is about changing how government serves Canadians by putting the citizen at the centre of how government does business, and providing the quality of service that Canadians need and expect.

A citizen-centred approach means integrating services in a way that reduces the burden to find and access programs and services Canadians need. By improving existing delivery channels, enhancing federal presence in communities, and improving working relations with other departments, orders of government and community-based partners, Service Canada is providing a more relevant and meaningful service delivery choice for Canadians.

Service Canada will strengthen the delivery of services to citizens by improving three areas:

Service strategies and policy - To assist in shaping the overall Government of Canada approach to service delivery while ensuring effective stewardship of public funds, Service Canada works on behalf of HRSDC and in collaboration with other government departments and agencies to deliver programs and services on behalf of the Government of Canada. Service Canada's service policies and client segment strategies are positioned to take a leadership role in service delivery by meeting the needs of key client segments or "communities". These include families, seniors, youth, people with disabilities, Aboriginal people, official language minority communities, workers and employers, and newcomers to Canada. Service Canada also undertakes research and analysis relating to: demographics; economic and social trends; client perceptions, attitudes and characteristics; specific client needs; and international and domestic best practices to identify and guide the development and improvement of services to these groups.

Client Services - To meet the unique needs and demands of client segments, Service Canada partnering allows for the development of an integrated service delivery approach on behalf of, or in cooperation with, policy departments or other orders of government.

Service Delivery - To transform government service delivery for Canadians across all service delivery channels, Service Canada offers an existing capability to deliver a wide range of services and benefits by telephone, Internet, and in-person to ensure one-stop, easy access to Government of Canada programs and services.

For the next three years, in order to strengthen the delivery of seamless, citizen-centred service, Service Canada will focus on better understanding the needs of Canadians by continuing the development and implementation of client segment strategies. Service Canada will also focus on improving the delivery of core services such as Employment Insurance, Canada Pension Plan, and Old Age Security. Service Canada will also work to increase the performance of its service delivery channels.

Delivery of new services will be limited to specific and strategic areas such as supporting the Labour Program with the introduction of the Wage Earner Protection Program and Common Experience Payments to eligible former students of recognized Indian Residential Schools. The objective of providing a more consistent service experience across all current service offerings is to meet the needs of Canadians regardless of their location.

Integrity

The Integrity program activity focuses on enhancing and strengthening the integrity of benefit delivery programs that provide over $75B in benefits delivered to Canadians through Service Canada. Integrity of service delivery means providing the correct service offering to meet the client's full entitlement to benefits and services. Service Canada is committed to ensuring the accuracy of payments, the security and privacy of personal information, and the overall quality of service offerings.

Implementing modern risk management practices will help ensure that appropriate measures are in place to safeguard the integrity of service delivery.

Service Canada will enhance the integrity of service delivery by improving in three areas:

Identity Management - As a foundation for service delivery, and to ensure the Social Insurance Register is used to support key federal programs such as the Canada Pension Plan, Old Age Security and Employment Insurance, and is also used by the Canada Revenue Agency for income tax purposes. The integrity of the Social Insurance Register was evaluated in 2007. The level of legitimate Social Insurance Numbers that are appropriately issued to the right person exceeded 99.9%. In addition, the accuracy of the key Social Insurance Register vital events data, namely date of birth and date of death, was found to be 97.3%. Service Canada is committed to further improve these rates by setting and reporting on goals for the integrity of the Social Insurance Register. For 2008, the goal for legitimate Social Insurance Numbers is to maintain the rate of 99.9% and the goal for key vital events data is to improve its accuracy to a level of 97.4%. These goals will be achieved mainly through the phased implementation of vital events information sharing agreements with the provinces and increased rigour in the Social Insurance Number issuance process. Service Canada will work towards implementing consistent identity registration and authentication capabilities for all service offerings.

Risk Management - To appropriately manage key operational risks that could impact its day-to-day operations, Service Canada will continue to build an enterprise wide risk management capability through the implementation of an integrated risk management framework which includes risk analysis, quality management and a mitigation function as a starting point. This improves Service Canada's ability to measure payment compliance and processing accuracy in benefit delivery, while protecting the security of personal information.

Processing - To achieve more effective, efficient, and streamlined processing and payment services to citizens, over the next three years, Service Canada plans to implement processing automation activities to reduce operating expenditures and ensure the accuracy of payments. It will also work to increase the integrity of the SIN and Social Insurance Register, implement rigorous risk and quality controls, and develop plans to upgrade software applications and the computer mainframe of the Department.

Collaborative, Networked Government Service

As one of the largest government service delivery organizations in Canada, Service Canada is a key resource for Canadians. By working hand-in-hand with federal government departments and agencies, as well as provincial, territorial and local governments, Service Canada is making it easier for Canadians to obtain government and community services simultaneously. Over the next year, Service Canada will continue to enhance this integrated network and improve Canadians' access to all the key services they need in the communities where they live.

Service Canada will work as a collaborative, networked government by focusing on two areas:

Partnerships - To bring together and integrate services in a way that better serves Canadians, Service Canada will seek to leverage existing service delivery mechanisms and infrastructure across all orders of government.

Information and Knowledge Management - To maximize the management and usefulness of client information, Service Canada is involved with the development of information sharing agreements with partners; the enhanced management of data; and the protection of client information. For the next three years, Service Canada plans to implement existing vital events agreements (Ontario, British Columbia and Alberta), to strengthen information sharing capabilities. Further, Service Canada plans to negotiate three additional agreements with other provinces and territories to develop a new citizen-centred information architecture to provide a holistic approach to gathering, managing and using client information, and support HRSDC in the realignment of programs such as Labour Market Development Agreements.

Programs in Support of Plans

Seamless, Citizen-Centered Service

This Program Activity develops service policies and client community strategies; conducts research and analysis pertaining to citizens and communities' needs and expectations; develops new service offerings and improves existing ones; and delivers one-stop, easy-to-access, personalized services by phone, Internet and In-person. The operating expenditures are funded from the Departmental Reference Levels, the Employment Insurance Account and the Canada Pension Plan Account.

Integrity

This Program Activity enhances and strengthens the integrity of programs to ensure that the right person or organization receives the right service or benefit at the right time, and for the intended purpose. It implements the Social Insurance Number and the Social Insurance Registry as the foundation for a safe and secure common identifier, develops integrity risk management strategies that will address operational risks and lead to the reduction of payment errors, and processes grants and contributions, individual benefits and mail service requests.

The operating expenditures are funded from the Departmental Reference Levels, the Employment Insurance Account and the Canada Pension Plan Account.

Collaborative, Networked Government Service

This Program Activity implements a government-wide, collaborative, networked business approach to delivering citizen-centred service to Canadians by working with other federal departments and agencies, other orders of government, and community partners, sharing information, adopting interoperable systems and infrastructures, providing secure management of citizen's personal information and respect of their privacy, and increasing the accuracy of the Social Insurance Registry through more timely and complete updates with vital statistics organizations. The operating expenditures are funded from the Departmental Reference Levels and the Employment Insurance Account.

Section III - Supplementary Information

Table 9 - Loans (Non-budgetary)

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.