Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 14 - Evidence
OTTAWA, Thursday, April 3, 2008
The Standing Senate Committee on Banking, Trade and Commerce, to which was referred Bill S-205, An Act to amend the Bankruptcy and Insolvency Act (student loans), met this day at 10:50 a.m. to give consideration to the bill; and to examine the present state of the domestic and international financial system (bankruptcy and insolvency).
Senator W. David Angus (Chair) in the chair.
[English]
The Chair: Good morning. I call to order this meeting of the Standing Senate Committee on Banking, Trade and Commerce. I am Senator David Angus, from Montreal, Quebec, and I am the chair of the committee.
Today, we will consider a private member's bill sponsored by the deputy chair of the committee, Senator Yoine Goldstein, sitting on my far left. Also here today are Senator Trevor Eyton, from Ontario; Senator David Tkachuk, from Saskatchewan; Senator Pierre Claude Nolin, from Quebec; Senator Pierre De Bané, from Quebec; Senator Pierrette Ringuette, from New Brunswick; Senator Dennis Dawson, from Quebec; Senator Wilfred Moore, from Nova Scotia; and Senator Mobina Jaffer, from British Columbia.
The proceedings today will be televised on CPAC and diffused on the World Wide Web.
[Translation]
Bill S-205 amends the Bankruptcy and Insolvency Act (Student Loans).
[English]
The bill provides that an order of discharge does not release a bankrupt from any debt in respect of a student loan if the bankruptcy occurred within a period of two years before the bankrupt ceased to be a student and allows for the bankrupt to apply to the court at any time for an order that releases the bankrupt from all or part of the student loan debt or that sets out terms for the repayment thereof or any remaining portion of the debt.
Bill S-205 was reintroduced in the Second Session of the Thirty-ninth Parliament in the same form as it appeared as Bill S-227 in the First Session of this Parliament.
We have before us today, following up on the presentation of the bill by Senator Goldstein before the Easter break, from Human Resources and Social Development Canada, Ms. Rosaline Frith, who also participated in our discussions the last time. She is well known to this committee as the individual who has all the answers on the subject of the Canada Student Loans Program. As well, we will hear from Mr. Ralph DeJong from Resolve Corporation, which is the service provider with respect to the administration of the Canada Student Loans Program. From the Canada Revenue Agency, we will hear from Mr. Tony Manconi, Director General, Non-Tax Collections, who appeared the last time as well. From Industry Canada, we will hear from Mr. Roger Charland, Senior Director, Corporate and Insolvency Law Policy and Internal Trade.
Ms. Frith, please proceed.
Rosaline Frith, Special Advisor, Learning Branch, Human Resources and Social Development Canada: Good morning and thank you for this opportunity to make a few general comments about student loans and bankruptcy and to respond to some of the questions raised at the last committee meeting on March 13, 2008.
As you know, the Canada Student Loans Program provides loans and grants to Canadians and landed immigrants attending a university, college, trade school or vocational school who need help financing their education. In doing so, the Government of Canada attempts to ensure that everyone has the opportunity to develop the knowledge and skills needed to participate in the economy and in society.
Bankruptcy is a drastic measure that student loan borrowers should not be encouraged to use when experiencing difficulty repaying their student loans. In choosing bankruptcy, many borrowers believe they can start over with a clean slate. That is not the case. Bankruptcy can negatively affect a borrower's ability to obtain credit for cars, homes and other purchases. Applications for credit cards or mortgages could be refused, or bankrupts could be forced to pay higher interest rates for years following a bankruptcy.
Bill S-205 could encourage student loan borrowers to attempt to discharge their loans through bankruptcy as they did prior to the introduction of a prohibition on student loan discharge through bankruptcy in 1997. At that time, bankruptcy accounted for over $100 million in costs annually to the program. Student loan borrowers experiencing financial difficulty should be encouraged to use the debt management measures available to them through the Canada Student Loans Program. These measures, which were presented to you in previous meetings, include interest-free periods where no payment is required and possible loan forgiveness.
The program continues looking for ways to improve the existing debt management measures that are available. In Budget 2007, the government committed to reviewing the Canada Student Loans Program. One of the review priorities was to find ways of improving assistance to student loan borrowers experiencing financial difficulty. Budget 2008 announced $74 million over four years to make the Canada Student Loans Program more responsive to the economic circumstances of borrowers by providing greater assistance for those experiencing difficulty in repaying their loans. The new measures will make payments affordable, and no student borrower would be forced into bankruptcy as a result of a student loan. More details on the improved measures will become available over the coming months.
In response to your questions from the March 13 meeting, the department has submitted copies of the latest client satisfaction survey that was conducted between January 24 and February 21, 2007. In addition, we have shared the chapters from our policy and procedures manual related to debt management measures. These are the chapters that we have provided to our service provider, Resolve Corporation, as initial instructions related to debt management. The program also sends implementation and delivery instructions to Resolve Corporation on an as-needed basis. Because these instructions are internal between the program and its service provider, they are not translated into French after each update. We can provide French translations of these documents should the committee desire.
The Chair: It would be most helpful to the committee if you could provide all of the information to which you have just referred. Would you agree, Senator Goldstein?
Senator Goldstein: Yes, it would be helpful.
Ms. Frith: We have sent the documents off to translation, and they will be back shortly. We will submit them as soon as we have them.
We have also compiled information on the percentage of students in default and collection. Student loan default rates are calculated on borrowers during the first three years following consolidation of their student loan debt. In the 2003-04 loan year, 153,000 Canada Student Loan borrowers consolidated their Canada Student Loans for an approximate worth of $1.63 billion. That year, 43,600 borrowers defaulted and were transferred to the Canada Revenue Agency for collections, for a total principal value of $330,928,063. The default rate for this cohort was 28 per cent.
For this same cohort — students consolidating in 2003-04 — 25 per cent of borrowers took advantage of interest relief that offered them a six-month, interest-free, no-repayment period. Some 2,000 borrowers entered into Debt Reduction in Repayment and had $10 million of their loans forgiven.
We do not collect information on recipients of the Permanent Disability Benefit by graduation cohort. However, in the 2005-06 loan year, 482 borrowers received this benefit and had more than $5 million of their loans forgiven.
I would like to turn now to any questions you may have for me and the other witnesses at this meeting.
The Chair: Thank you.
I believe Mr. Manconi will address us before we go to questions. Unless I missed it just now, I understand that you have new information. There was an issue about the collection agencies. Perhaps that is what you will tell us. There is a sea change that might make it irrelevant that we bring all these collection agencies before the committee. Mr. Manconi, please proceed.
Tony Manconi, Director General, Non-Tax Collections, Canada Revenue Agency: It is my pleasure to return to this committee to answer any questions you may have regarding collection under the responsibility of the CRA and the use of the private collection agencies. Before commencing with the questions, I would like to inform the committee of a recent development that was associated with the last federal budget in February 2008.
The Government of Canada expressed its commitment to delivering programs and services that are efficient and effective and that respond to the needs of Canadians. To achieve these objectives, the government included a new approach to managing costs, which requires a strategic review of its existing spending on a four-year cycle. The CRA was one of 17 organizations selected to conduct strategic reviews during fiscal year 2007-08. The agencies submitted proposals that would generate savings and allow better delivery of programs and results to Canadians.
As a result of the review, the government made a decision that the CRA will discontinue its use of private collection agencies for the collection of defaulted Canada Student Loans and will assume full responsibility for this function.
I would like to pause for the committee to ask any questions they may have.
The Chair: That is kind of you. It is important information for all of us to know.
It was brought to my attention after the last hearing. Why did we not know about it sooner? We were raising issues about the collection agencies, and now they are to be phased out.
Mr. Manconi: That is a very good question. Following the hearing of the budget on February 26, we required some time to find out what the strategic review results meant in order to interpret the impacts on the agency. It took several weeks to determine that they were focusing on the discontinuation of the private collection agencies. Today, we are able to come here prepared to respond to your questions on that topic.
The Chair: I am pleased to hear that, and I am sure my honourable colleagues are, too. That was a major preoccupation.
[Translation]
Senator Ringuette: Thank you, Mr. Chair. Mr. Manconi, the information that you are giving us today is very interesting in terms of the private collection agencies and this decision being based on the desire to eliminate some of the cost of the process. What are the savings, at the end of the day, in eliminating the private collection agencies?
Mr. Manconi: We have anticipated savings up to almost $18 million for the next three years.
Senator Ringuette: This is a considerable amount over three years. I congratulate you for this initiative. My second question is for Ms. Frith.
[English]
You said in your statement that the new measure will make payment affordable and that no student borrower will be forced into bankruptcy as a result of student loans. How will you achieve that?
Ms. Frith: Today, any student who within the first six months after graduation is unable to acquire employment or has employment at a very low income, depending on the size of their family and where they are living, is able to apply for repayment assistance. However, in the future, as a result of the budget, we would do a calculation when students apply for repayment assistance. They would be required only to make a payment that is affordable.
Therefore, if they are below a certain income level, depending, again, on the size of the family, they might not have to make any payment at all. The government would assume the cost of the interest and the principal for a period of time. Then, every six months, we would look again at their salary levels and discussing it with them. We would conclude what would be an affordable payment.
Under the new plan, students will not have to make any payment at all if they cannot afford to make a payment according to the criteria. The government will continue to assume the full burden of their loans, up to a limited period. This would not go on forever. A point would come when the loans would have been completely paid down and the students would no longer have any obligation.
There should never be any stress on students that would force them into bankruptcy because of someone harassing them for collection or anything else with respect to their student loans.
Senator Ringuette: As you have said and as has been discussed before at this committee, collection harassment is twofold: one from your portion of the student loan administration and the other from the Canada Revenue Agency. You are able to talk about your portion of the student loan collection only.
Ms. Frith: That is true. However, I would assume that a student informed about what is available to him or her would not go to collections. He or she would apply for repayment assistance and would stay in repayment assistance for as long as is necessary. A student would never be forced into a default situation.
I cannot imagine who would actually default. You would be defaulting to make a point. You would be doing it because you decided you did not want to apply for repayment assistance. The program being put in place is such that no one would be ever put in a situation where he or she should be defaulting on a student loan.
Senator Ringuette: Therefore, the collection portion that was assigned to Canada Revenue Agency should not reoccur. Is that what you are saying?
Ms. Frith: We are hoping that over time we will have fewer people falling into default. Our goal is to eliminate defaults.
Senator Ringuette: In another line of questioning, and your statement highlights this potential issue, how many francophone students are we serving? I would imagine that it is about the same proportion as the French-speaking population, which is about 30 per cent.
[Translation]
Ms. Frith: That would be the percentage outside Quebec.
[English]
Senator Ringuette: You would have about 10 per cent.
The Chair: Let the record show that Ms. Frith gave an affirmative expression.
Senator Ringuette: Mr. DeJong, how many of your 800 or so employees would be able to communicate with the French-speaking portion of your clientele?
Ralph DeJong, Vice-President, Students Loan Operations, Resolve Corporation: From a servicing perspective, the administration portion, approximately 450 employees are front-line servicing to our borrowers. We have a full-time complement of approximately 48 to 50 full-time, bilingual people who are servicing, with another 25 people who are not servicing.
Senator Ringuette: In your statement, Ms. Frith, you said that the program also sends implementation and delivery instructions to Resolve Corporation on an as-needed basis. Because these instructions are internal between a program and its service provider, they are not translated into French. Am I to assume that the people in Resolve Corporation who are assigned to deal with your francophone clientele would not have access to the French instructions so that they can converse in French with that clientele about the steps that can be taken?
Mr. DeJong: The correspondence between our employees and our French-speaking borrowers is fully bilingual. When information is sent to a borrower, such as instructions on how to fill out an interest relief form, it is fully bilingual. Our customer service relationship person is able to see online all of the correspondence sent to that borrower, and it would all be in French.
All of our agents are bilingual. We have bilingual knowledge-based systems that allow us, when a borrower is having a conversation, to have access to data in French. It is a fully bilingual centre from processing through to service through to repayment counselling.
As part of the programs commitment, Resolve Corporation's French-language service levels are monitored to ensure that we actually support and report service levels for our French-speaking borrowers separately; we are made sure to keep those levels consistent throughout the organization. There is a consistent approach across all borrowers in that regard.
Senator Jaffer: I am interested in knowing a bit more about Resolve Corporation, Mr. DeJong. You are a separate corporation, as I understand.
Mr. DeJong: Correct.
Senator Jaffer: I am not trying to be rude about this, but to whom are you accountable? To Ms. Frith?
Mr. DeJong: Yes. Resolve Corporation's accountability is to Ms. Frith.
Senator Jaffer: Ms. Frith, the complaints that I hear are from two or three types of people. One is people who made a career choice or course choice that does not immediately get them a job, and that leads to challenges. It is easier to repay a loan if you are becoming a doctor than it is for some other courses.
I do not have statistics on this, but I am told that the group that suffers the most is women. Do you track statistics on default by gender?
Ms. Frith: We do know our statistics on default by gender. I can tell you that the majority of our repayment problems are not with women. Therefore, you can conclude that they are with men, and younger men in particular.
I would not be surprised if you were receiving calls from single parents, simply because often it is more difficult for single parents to find employment and to be able to manage. Again, while they are students, we have programs in place very much targeted to help people in those situations. When they are in repayment, we take into consideration the fact that they are single parents with a child or more than one child, and calculations are made to try to reduce their payment level to something more affordable or to an interest-free period, if necessary.
Senator Jaffer: You put your finger on it. Single parents is an issue, and I am glad you mentioned that.
You said that there is no reason for people to default, except to make a point. Do I understand from that statement, and I hope I quoted you properly, that the debt repayment is set up in such a way that there should be no issue on defaulting? Is that what you meant?
Ms. Frith: I believe that the changes the government has committed to in Budget 2008 will, in the future, result in a much improved repayment assistance plan that will help individuals deal with their debt in an affordable way and over a specified period of time. Therefore, you know that when you graduate, if you are having a legitimate difficulty making payments and you can show us your revenue and the number of people in your family, we can do a cost calculation and tell you, ``You could afford to make this amount of payment.''
However, if we were to calculate how much you should really be paying to pay off your loan within the maximum of 15 years, your payment would be much higher. Through this new program, the government would offset the amount of money that you have to pay so that you, the student with an affordability problem, would be able to pay an affordable and reasonable amount and the government would pay the rest. You would be contributing, and over time your loan would be paid off.
If you could not afford to make a payment at all, that would also be taken into consideration. If you were a person with a permanent disability, you could then go directly either to loan forgiveness or to an even more specialized loan repayment plan to help you.
In that way, the only people I can envisage who would default would be people who choose to default. I say that because I know of a case where someone is choosing to default to make a statement.
Senator Jaffer: Very few people would do that.
Ms. Frith: Very few. There are also people who have many other debts that we do not know of. They feel that those are priorities and they choose not to pay the affordable payment, in which case they would default.
This is a generous and compassionate program that should result in a very small number of people defaulting, if any.
Senator Jaffer: I do not know who can answer this. In listening to the witnesses, I am still having difficulty understanding the profile of the person who defaults.
Ms. Frith: Today?
Senator Jaffer: Yes.
Ms. Frith: We have a group of people. We have what I would call early defaulters, who are young and male, and who have incurred probably all kinds of other debt, such as for cars. They sometimes choose not to make payments. That is why, with Resolve Corporation, our service provider, we have put in place a program to contact people very early on when they miss a single payment and try to get them back on track in order to reduce the likelihood of default.
What we are living through and what you are trying to address are the past cases more than future cases. In the past, many more people defaulted. We have brought that number down considerably by targeting our high risk default group and ensuring that we are in touch with those borrowers. We tell them what programs are available to them, how we can help them, how they might want to extend their period and lower the amount they have to pay, and other things we can help them with to keep them out of default.
I am sure my colleague from CRA will tell you that we are doing a fairly good job, because we are not sending as many people to collections as was forecast in the past. Now we are starting to forecast lower and lower numbers of defaults. We are hoping that in the future we will have our default figure down to less than 12 per cent. That will make a huge difference.
Then there are people who are in chronic situations of low income. For whatever reason, they do not take advantage of the repayment programs in place. Here too the program is making many new efforts to try to share information to ensure that those individuals know what programs exist and how to avoid default.
The Chair: Two more senators have arrived that I would like to introduce: Senator Gustafson, from Saskatchewan; and Senator Biron, from Quebec.
Senator Moore: Ms. Frith, in your presentation you provided numbers for 2003-04. Are there more current numbers?
Ms. Frith: The reason I provided 2003-04 is that we do a three-year cohort. The students had to have graduated in 2003-04, and then we count the data for 2004-05, 2005-06 and 2006-07. That would be the most recent cohort for which I have actual default data. Any other data I have would be forecasted and not actual, because I have not got the three years of information.
Senator Moore: The 2003-04 data is for students who entered university that year and borrowed?
Ms. Frith: No, the data is for students who graduated in that year. Next year, I will have a three-year set of data that applies to the students who graduated in 2004-05, and I will have a brand new default rate that I will apply to the 2004- 05 cohort.
Senator Moore: You mentioned that from that cohort, 25 per cent — 11,000 students, roughly — took advantage of the interest relief, and 2,000 entered into the debt reduction program and had $10 million of their loans forgiven. That adds up to 13,000 students out of a total of 43,600 who defaulted. Did the other 30,000 go bankrupt?
Ms. Frith: Yes.
Senator Moore: Then 11,000 students obtained interest relief.
Ms. Frith: No. The 25 per cent of borrowers who got interest relief would have been 25 per cent out of the 153,000 who graduated; 43,600 defaulted.
Senator Moore: That throws off my thinking. In your remarks, I guess you wave the caution flag about people going bankrupt and how it could impact their ability to obtain credit down the road. You say that the bill could encourage student loan borrowers to attempt to discharge their loans. Why do you say that? Did some experience cause this to happen? We know the experience up to 1997. We know a period was extended to 10 years, and that seemed to cause the student bankruptcies to dry up quite a bit and reduce in numbers. Do you advocate that we continue with that?
Ms. Frith: Our experience in 1996-97 was that we were at $100 million in annual losses to the program from students declaring bankruptcy. When we went to a two-year restriction for a very short period of time, it did not impact on those kinds of losses to the program. When we went to the 10 years, we went from $100 million to approximately $25 million in losses due to bankruptcy.
Going to 10 years had a significant impact on the number of students declaring bankruptcies. It also reduced our losses as a result of bankruptcies by 75 per cent.
The current system has debt management measures in place for students such that there is no reason for them to declare bankruptcy because of a student loan. We are afraid that students would choose simply to declare bankruptcy for the sake of getting rid of their student loan, as they were doing prior to 1998.
Senator Moore: You may have heard me ask this before. When we reviewed the statute in 2003-04, the evidence clearly indicated that five years would be an appropriate time period. The credit rating people, the banks and anyone who was involved in it told us that. It may have included your department, as well.
What is your feeling about that period as opposed to the two years in the bill?
Ms. Frith: The current Chapter 36 will have us at seven years and five years: seven years for a regular situation and five years for a hardship situation.
The Chair: When you are talking about Chapter 36, are you referring to Bill C-12?
Ms. Frith: Yes. Our reasoning for the seven years is straightforward. When we look at the kinds of incomes that students are earning after they graduate from post-secondary education, we can easily see that their incomes are increasing slowly for the first two to three years. They do not necessarily have a really big increase until year five.
We have always said that if you ensure that there is the possibility for complete interest relief and no payments on their principal during the first five years, you are eliminating the burden on the students who have that lower income for that period. Generally at that point, they are able to start to make payments because their incomes have increased sufficiently and there is no longer a burden.
The seven years, under the current plan, accounts for the two years following that five-year period when no payment was necessarily required. They would then actually have the government help reduce the level of the principal. Therefore the government was now lowering the principal for them and therefore lowering the level of payment for them. At the time, it was felt that the seven years would be a sufficient indicator of whether someone really had a problem; that problem would kick in only after a seven-year period.
The program is able to help students effectively for a minimum of seven years, from our perspective. That coincides with the bankruptcy rule that after seven years, they could have their loan discharged.
Senator Moore: Therefore, seven years is there because things will become stabilized in that period of work experience for a person who is having difficulty. You do not think that would happen within five years?
Ms. Frith: In essence, we said that the first group to stabilize will be within the five years. However, some people may take a bit longer. Therefore, we have additional assistance in place to cover them all the way out to the seven years.
Under Budget 2008, you will not even have that artificial five years or seven years. In essence, the repayment assistance measures will apply for them throughout. They are never being forced to make more than an affordable payment from the beginning and all the way through.
Senator Moore: Mr. Manconi, you said in your remarks that the CRA will discontinue use of private collection agencies. There was a policy in the budget. When was that action formally announced? The chair asked about that earlier, and I thought it was a good question.
Mr. Manconi: The announcement came on February 26, 2008, the day of the budget.
Senator Moore: The policy was in the budget. Was that all?
Mr. Manconi: Yes. That was the announcement on that day. We were here the day after.
Senator Moore: You did not mention it at the time.
Mr. Manconi: We found out that morning that the announcement was in the budget, and as I mentioned, we needed time to determine the impacts.
Senator Moore: Your agency will now assume responsibility for collection. If a student is in difficulty, Ms. Frith's program takes that on and then a student is referred to your service provider, Resolve Corporation?
Ms. Frith: Not quite.
Senator Moore: Tell me how that flows.
Ms. Frith: It is pretty straightforward. Our service provider manages all of the files for us.
Senator Moore: The good ones and the bad ones?
Ms. Frith: Yes, all the files. The students graduate; they have their post-secondary end date. From that end date, there is a six-month period where they do not have to make any payments, but interest starts to accrue. They receive a letter saying that they are into repayment now.
Senator Moore: Interest is running but there is no payment for six months.
Ms. Frith: That is right. The letter states that on such-and-such a date you will have to make your first payment, and the letter will tell you what your first payment should be based on a calculation of a ten-year amortization of your loan.
Senator Moore: Who sends out the notice?
Ms. Frith: The notice will be sent by Resolve Corporation, and then the students will write cheques back to Resolve Corporation. Students in integrated provinces write one cheque for both the province and the federal government, and the money is divvied up.
That is done in a straightforward way. The student is supposed to sign a form saying that they acknowledge that they have this loan, that they will pay it back and that they agree to the terms set out in it.
Senator Moore: Is that consistent with the original loan documents that they signed?
Ms. Frith: Yes. The other option is to call and tell us that they have a problem and that there is no way that they can make payments at that level. They may ask for an extension of the term. Instead of the term being ten years, it can be 15 years; or borrowers can come in and tell us that they do not have jobs at all and that they cannot make that first payment, and they seek advice.
Resolve Corporation is supposed to be paid according to client satisfaction and according to keeping the default rate down. It is in their best interest to get those students into interest relief or to find some other way of helping them. Their attitude is based on helping each student borrower find the best solution for repaying his or her loan. There could be a change of terms. You might get a student who does not sign or send anything in, and the first month passes without payment. Therefore, they are now 30 days in arrears. Resolve Corporation's client services kick in; the corporation will contact the student to explain both the consequences of not making payments and what programs are available and to find out if the student is in trouble and unable to make payments.
We send students in arrears letters; we follow up after 30 days, 60 days, 90 days. They are not considered to be in default until they have been in arrears for 270 consecutive days. At that point, we transfer the file to CRA.
Senator Moore: In the past, CRA would send the file to the Department of Justice, who would send it to a collection agency. Is that what you said before?
Mr. Manconi: That is part of the cycle.
Senator Moore: Now, that is no longer the cycle. It goes to you, and your office will try to collect the money from the student.
Mr. Manconi: Today, when the program detects a defaulted account, our internal collectors attempt to collect the debt. Following a certain number of attempts, they will forward it to the private collection agency to continue collection attempts. When required, we use the services of the Department of Justice.
Senator Moore: You sue the defaulter.
Mr. Manconi: Yes. However, that is the responsibility of the CRA, not the private collection agencies.
Senator Moore: Now that collection agency is gone.
Mr. Manconi: Correct. In the future, the accounts will remain internally at CRA forever, and we will manage the account from A to Z.
Senator Eyton: You use the Department of Justice Canada at times but not always. Is that correct?
Mr. Manconi: Should we determine that the client has the ability to pay but refuses to pay, we refer the account to officials at the Department of Justice Canada to examine the file and determine the potential for successful collection of the remaining debt.
Senator Eyton: Your department would not do any litigation, but farms it out to Justice Canada.
Mr. Manconi: We work hand in hand with the Department of Justice Canada.
Senator Tkachuk: It seems that the philosophy of the program is, first, the importance of an obligation in adulthood to repay debt and, second, keeping people from bankruptcy at a young age.
I would like to clarify a few things on the amount of money that is to be saved and what you expect the costs of the subsidy to be, Ms. Frith. Obviously, there is a cost to the subsidy when you help a student. Do you have estimates of the extra costs to be incurred that will make this program successful?
Ms. Frith: Budget 2008 set aside $78 million to help us with repayment assistance plans over three years for regular students and students with permanent disabilities.
Senator Tkachuk: Is that new money?
Ms. Frith: Yes, it is new money.
Senator Tkachuk: On the other side, $18 million was saved only because if this program is successful, you do not need to use collection agencies. Is that right?
Ms. Frith: Yes, we will use them less.
Senator Tkachuk: The collection agencies work for a commission. The cheque was written for the money that they brought in. You will know what the savings are in three years depending on the success of the new program. Would that be a fair statement?
Mr. Manconi: That is a fair statement. It should be noted that there is an older portfolio of student loans that is being collected over the years as well. They are bigger portfolio defaults, and that is the amount of work we would be calling back from the collection agencies to collect on.
Senator Tkachuk: Is that through the Canada Revenue Agency, or would this new program try to assist these people as well?
Ms. Frith: We have not worked out all of the details, but I would imagine that some of the people who defaulted in the past might have things available to them that were not available in the past. In general, for most people who have been in default for a while and for those from whom we are having a hard time collecting, the reason for default is something other than low income.
Senator Moore: Senator Tkachuk's question triggered a question for me regarding CRA and the savings. Will you have to hire additional staff to administer the job that the private collection agencies were doing?
Mr. Manconi: We will have to hire some new staff.
Senator Moore: How many?
Mr. Manconi: We have not yet determined that number.
Senator Moore: The savings of $18 million is the payout to private collection agencies, but the true savings will not be known until you know the staff costs and so on. Is that correct?
Mr. Manconi: That is correct. Our intention is to use existing staff and some of the automated tools available to us through CRA. That is where we foresee some of our savings.
Senator Moore: Do you think that the $18 million will actually be $15 million?
Mr. Manconi: We will return $18 million toward the strategic review contribution — the amount of the commission that we will return to the government in savings.
Senator Moore: Yes, that is over three years.
Mr. Manconi: Yes.
Senator Moore: There will be an additional cost to your department to do this.
Mr. Manconi: Yes, there will be a cost to hire staff.
Senator Moore: Therefore, you do not know the numbers yet to give me an answer as to what the net savings will be.
Mr. Manconi: Once that is calculated, we can provide the information to the committee.
Senator Dawson: Following up on that question, if you save $18 million because you stop using the collection agencies, it follows that you will be losing some repayment of debt. If the collection agencies were collecting money that you were not collecting, I would imagine that even though you have people doing it, there might be an additional loss on that side.
Mr. Manconi: I do not understand.
Senator Dawson: You have been using collection agencies and they have been bringing in money for you. Now, you will not be using them anymore, thereby saving $18 million, and they will not be bringing in money for you. I would imagine that they were collecting a greater amount of money than you will be collecting now without them. Why were we using the collection agencies? I am sure you understand what I mean. Is the $18 million a net savings, or is it counterbalanced by a loss of repayment of debt?
How does Quebec compare on the default rate? You said that the default rate is 12 per cent. The Government of Quebec has its own operations, including collections structure. I would imagine it is at 25 per cent. As a comparative analysis, we might want to have information on their system to determine whether we are better than they are or they are better than we are at resolving debt collection.
Ms. Frith: I would not want to give you that comparison. I deal with my colleagues in Quebec all the time to exchange information on how we do business and to learn from each other. Over the past three years, we have been reducing defaults significantly. As a result, we have had a huge impact on the alternative payments that are based on the cost of running the Canada Student Loans Program. Our alternative payments have dropped as a result, and our Quebec colleagues have been very interested in learning more about our approach to default management and how we have managed to get default so low.
I cannot give you the numbers for Quebec, but I will try to get that from the Government of Quebec if they care to share it.
Senator Dawson: As a comparative analysis, it would be interesting to have whatever is available from the Quebec government on default rates. I do not know whether we want to hear them as witnesses or to see a tabled report, but we should have a comparable analysis. This is not about trying to make someone look bad or not look bad; I just want to be sure that since we can compare, since they do the same thing, we should try to get as much information as possible.
Ms. Frith: That is where I would hesitate. They do not do the same thing, so they do not have exactly the same kind of loan systems or grant systems that we do. Quebec runs its own, distinct program. It is a well-respected program, but Quebec does not necessarily do things as they are done in the federal government. I am not sure that we would be comparing apples and apples. I would have to look at that.
The participating provinces that are part of the Canada Student Loans Program operate programs that are essentially similar to Canada Student Loans. Their default rates, in general, have been higher, and they have been taking lessons from our program and the default system that we have put in place. If you asked across the country about who has the best default management approach and who has been getting the best results, I would not be surprised if the provinces all told you that Canada does. That is why they have been working with us to put in place exactly the same approach that we have taken.
Senator Dawson: I am not trying to embarrass anyone. I will address myself to the parliamentary research people to see if they can find whatever is publicly available as far as comparables. I do not want to compare things that are not comparable. Senator Goldstein's bill will not be different in Quebec. I would not want us to pass a judgment on how we will solve the problem if it will have an application in Quebec that can be a higher proportion and cause more damage or give more opportunity, depending on how you want to look at it, without having at least, as a committee, studied the consequences of what it can mean for Quebec.
[Translation]
In answer to Senator Ringuette's question, you said that the percentage was more or less 10 per cent. In your study, you have only examined 2 per cent of cases. So if you are doing a study on the satisfaction rate, I want to know what is the gap between the 2 per cent and the 10 per cent; it is still a significant gap. If indeed it is closer to 2 per cent than 10 per cent, the 8 per cent that have not been consulted might be less happy than the others. I would like to know what is the difference between the 2 per cent and the 10 per cent.
Ms. Frith: We will certainly do this, but I must indicate that we never look at 100 per cent of clients.
Senator Dawson: No, but you do a sample. We understand each other, it is a poll. I did not ask you to poll everyone. They explain how they have determined their client base, they do an analysis and they say that this does not apply to Quebec because Quebec is not in the system. However, there are people in Quebec who receive grants and loans, so some of them have been consulted in this province. If it is 2 per cent, it is 2 per cent in French because this includes the students who are studying in Quebec. I only want to make sure that Senator Ringuette did not get a false answer. It is either 10 per cent or 2 per cent.
Ms. Frith: I will confirm the accurate data.
Senator Dawson: I have the feeling that it is closer to 2 per cent than 10 per cent, but I want to make sure that we are basing our decision on the real figures.
[English]
Senator Eyton: Thank you for being here and for your excellent testimony. In your remarks, Ms. Frith, you referred to consolidated debts. That term must refer to debts that are accumulated first year, second year, third year and then consolidated when the students graduate at the end of their term?
Ms. Frith: Correct.
Senator Eyton: It does not include any other debt, just consolidated debt as it relates to your program.
Ms. Frith: Yes.
Senator Eyton: My memory of your earlier testimony tells me, rightly or wrongly, that your program currently has outstanding something like $10 billion of student loans in one stage or another, and the annual program is running close to $2 billion annually. Your remarks refer to the 150,000 borrowers for the one year, 2003-04, totalling $1.63 billion. Would that be the total of the loans done that year? Where do I get the $2 billion? You are short of it there, at least in that year. Is it simply that it has grown since then?
Ms. Frith: In 2005-06, $1.9 billion is the total dollar value of Canada Student Loans disbursed to eligible full-time and part-time students, approximately 340,000 borrowers. You are trying to figure out where that comes from.
Senator Eyton: I was trying to get the relationship. There may not be one exact relationship with 2003-04. There would have been some growth in the intervening two years.
Ms. Frith: My portfolio as of March 31, 2007, was at $11.5 billion, not including the defaulted loans and other things. If I include everything, it is a $13.5 billion portfolio, total.
Senator Eyton: I like your growth rate.
Ms. Frith: I will not answer that one.
Senator Eyton: My third comment or question relates to the review process. It is the collection agencies that are to be eliminated. I assume therefore that as a result of the review you have just through, it was concluded that Resolve Corporation is doing an excellent job and should stay put; is that correct?
Ms. Frith: I would like to be sure that we understand the distinction between collections and administering the program. I never think of Resolve Corporation as being a collection agency. I think of them as being a bank. Just as a bank will go to a collection agency when someone defaults, Resolve Corporation will shift the file back through the program to Canada Revenue Agency for collections. CRA is our collections arm, and Resolve Corporation is my administration arm.
To be clear, recently we have done several things within the program. We have just come through a major procurement exercise in order to move from two service providers to a single service provider. It took us several years to go through that procurement exercise and to come up with the best way to administer the program.
We came up with a performance-based contract. We said that our service provider must annually report back to us on client satisfaction, because they will be paid a performance bonus on client satisfaction, and they will also receive a performance bonus or a disincentive with respect to the rate of defaults. If they can keep defaults to a minimum, they earn more money, so it is in the company's best interest to have the most effective client relations possible. That means that they need to know where the students are every time they change addresses, and you all know how often students change addresses. We need to be able to contact the student borrowers to let them know the programs that are available and to help them to ensure that they make payments that are reasonable and affordable and that they start to make them right from square one, right after their loans are consolidated. We have found that if they make that first payment, they make all of their payments. They continue. We have a good chunk of people who will pay off those loans within the first few years. That is how we work with Resolve Corporation.
Having gone though this procurement exercise, I am confident that we have the best of both of our service providers, who have now merged into a single corporation. I look to my right, to Resolve Corporation, and I am pleased that we are working with these competent people. Our contract should hold them to continue to be competent and client-focused.
Senator Eyton: Thank you. You are very clear on that. The February budget allocated an additional $74 million over four years; it says $74 million in your remarks. Perhaps $78 million is accurate. Let us say $78 million.
Ms. Frith, you said that the new measures will make payments affordable and that no student borrower will be forced into bankruptcy as a result of a student loan. I take it you are looking at the historic performance data you had. You provided numbers from 2003-04, and a certain default rate was reflected there. You talked about a default rate of 28 per cent of people transferred to the Canada Revenue Agency. I assume you mean that those measures will impact on that default rate: fewer people will be referred to CRA, and there will be fewer defaults.
Ms. Frith: That is correct. The 2003-04 cohort is at 28 per cent. We have already come down from 38 per cent. My projection for the other cohorts is that the decrease will continue. We have been dropping every year, and we will continue to drop. We know that from our single-year defaults.
We expect to bring the rate down to about 10 per cent or 12 per cent. That is without the new repayment assistance plan. That is based on the current way we are dealing with our customers and the current interest relief program and Debt Reduction in Repayment.
To add to what we were forecasting, I am saying that we would get it down to somewhere around 10 per cent to 12 per cent. We will put in place a brand new approach to payment assistance that is more generous than the current one. I simply cannot imagine many people defaulting. There is no good reason to default. It will be up to the program to ensure that we communicate very clearly to our clientele what is available to them.
There again, our brand new contract with Resolve Corporation puts all the pressure on our administrator to ensure that they are contacting people, because that is the only way they will get a performance bonus.
Senator Eyton: I want to emphasize your statement, which was unequivocal, that no student borrower will be forced into bankruptcy as a result of his or her student loan. From that, I assume it is implicit that you are opposed to Bill S- 205 because it may adversely affect the program you are talking about, since the bill is being amended. Do you take the position that Bill S-205 would not be helpful to those efforts?
Ms. Frith: That is correct.
The Chair: Are you finished, Senator Eyton?
Senator Eyton: Yes.
The Chair: Senator Moore has a supplementary.
Senator Moore: When you were answering Senator Eyton's question you had your chart up, which shows $11.5 billion dollars under administration. How many students does that involve?
Ms. Frith: About 1.1 million, currently. Hold on one second; I will get my chart. It is 1.1 million for that class of loan, but if I include all the borrowers that have dealt with guaranteed, risk-shared and direct loans, it is 2.14 million borrowers.
Senator Moore: Are those open files now?
Ms. Frith: No, they will not all be open.
Mr. DeJong: Resolve Corporation is servicing approximately 1.1 million borrowers of the Canada Student Loans Program.
Senator Moore: You told us back on March 13 that Resolve Corporation had a new contract starting March 17. What is the term of that contract? You have to have some years to work these files through.
Ms. Frith: The term is for 10 years.
Senator Moore: Thank you.
The Chair: I have the impression that you folks are running the Canada Student Loans Program well. You are trying to improve it and so forth, but we do have this bill. Senator Eyton posed a question in regards to it. This is our opportunity to find out to what extent you are uncomfortable with the bill. If, indeed, you feel we should not approve this bill, can you tell us why should we not? I thought it would be better to hear that from you before going to Senator Goldstein.
Ms. Frith: I believe that the current changes as a result of Bill C-12 are sufficient with respect to the treatment of student loan borrowers. The debt management measures in place would allow them not to be forced in any way into a negative situation as a result of their student loans.
I cannot speak to other debt they may incur. However, in terms of their student loan debt, they can have interest relief and, therefore, be put in a situation where they do not have to make payments. In our opinion, changing over to a lower limit from seven years to two years would probably put the program back into a situation where we would have students who say, ``This is my opportunity not to pay back my loan. Forget my commitment to the government, I will declare bankruptcy. I do not have anything to lose. I still have not bought a house.''
My fear is that many students seem to think that you can declare bankruptcy in a cavalier fashion. They do not look at the consequences it has for their future. They do not think about what happens when they do want to buy a house, but the fact that they went bankrupt sits on their records. That was our past experience and the past situation.
Therefore, we believe that the system currently in place and the new measures that will come into place address the issues that bankrupts would be facing.
The Chair: Therefore, there is no halfway measure or improvement to this private member's bill, for example, changing it to five years instead of two? The senator has already indicated publicly that he is comfortable in making such an amendment. Would that change your view?
Ms. Frith: Five years would be far more acceptable from a program perspective than two years. We know for a fact that two years did not work. The government chose to go from two years to ten years.
I do not have a crystal ball. I know why we have chosen seven years, and I have shared that with you: there are measures in place, so we know absolutely that people are being helped for the seven years. We also know that under the new repayment measures, people will be helped for even more than the seven years.
Reducing the term to five years is moving in the opposite direction to the government's chosen course of resolution. From a program perspective, we think seven years is a very good path.
[Translation]
Roger Charland, Senior Director, Corporate and Insolvency Law Policy and Internal Trade, Industry Canada: I would simply like to add that Chapter 36, for which royal assent was given, made provisions for the 7/5 formula, in order to encourage the repayment of existing debts within the program and to prescribe rules and regulations to this effect. That was the philosophy at the start and we believe that it is still a good policy that is being reflected in Chapter 36.
[English]
Senator Goldstein: Thank you for appearing and enlightening us. The measures of which you speak and that are envisaged by the budget but not yet clear are applicable only to student loans given by the federal government. Is that right?
Ms. Frith: That is true. However, we are currently entering into discussions with each of the provinces to see if we cannot have provincial matching so that we all go ahead together in the same way.
Senator Goldstein: That would be fine if they were to do it, but you know by now that some of the provinces will not, specifically Quebec. Is that right?
Ms. Frith: We know that Quebec will continue to operate its programs in the same way it has always operated them.
Senator Goldstein: How many students in Canada make loans from governments or agencies or lenders other than those covered by your program?
Ms. Frith: Almost everyone who takes a loan from the federal government is also taking a loan from the provincial government. Therefore, 60 per cent of the students' assessed need is being covered by the federal government, and 40 per cent of their assessed need is being covered by the provincial governments. In most cases, provincial governments have loan remission programs in place, and they are trying to reduce the debt levels to maximum debt levels for students on provincial debt.
Senator Goldstein: For the moment, 40 per cent of the student debt in Canada is not covered by your program and will not be covered by the budget intention, if we can put it that way?
Ms. Frith: Correct. We already know that Nova Scotia will be putting in place the same repayment assistance program.
Senator Goldstein: Possibly a similar one, but certainly not the same one, Ms. Frith.
Ms. Frith: Their discussions with us to date are about how they can match and do exactly the same as the federal program.
Senator Goldstein: For the moment, that is not yet in place.
Ms. Frith: No.
Senator Goldstein: We are still dealing with 40 per cent of student debt, for the moment, that is not covered by this. Legislation is not immutable. If everyone were to cover student loans and have a forgiveness program that made sense, as you correctly put it, bankruptcy would not be a necessary or appropriate conclusion, and, therefore, this proposed amendment would cease to be relevant and presumably could be abrogated.
Having determined that 40 per cent of the debt is not covered, you have told us that a program will be put in place that will gear student repayments to their ability to pay, and you were quoting two criteria, but you do not know what the criteria are, do you?
Ms. Frith: We are working on that criteria and have not finalized it.
Senator Goldstein: You do not know, as we speak, what criteria will be used?
Ms. Frith: I have a fairly good notion of small ranges that we have to work out with the provinces. We are working with the provinces and will be over the next few months to try to get this in place in the provinces in the same way that it is in the federal government.
Senator Goldstein: I am not blaming you. I am just asking the question. I do not want you to be defensive about it. This has only just come into existence and you just got wind of it about a month ago. I am only trying to find out the facts. I am not trying to be critical, for the moment.
You do not know what the criteria should be. What leads you to conclude, because the budget language does not say this, that payments will be geared solely to the students' ability to repay? Or did I misunderstand you?
Ms. Frith: Normally, in order for a budget announcement to take place, one would have had to have done costing and to have developed a program that one thought was a reasonable way to go forward.
A lot of work has been done over the last three years on a repayment assistance program in collaboration with all of the provinces. We have already had a formal agreement by ministers that this is the best framework to move forward with to help students with repayment.
You are right that I cannot say when provinces will announce that they will go forward or whether in fact they will go forward, but I can assure you that we have a very good understanding of what a repayment assistance program would look like, including affordable payments and criteria. We already have a formal agreement from ministers all across Canada that this would be the best framework with which to move forward.
Senator Goldstein: Is that agreement in writing?
Ms. Frith: It is in the notes from the Canadian education ministers. It exists.
Senator Goldstein: Could you share that with us, please?
Ms. Frith: That we can share, yes.
Senator Goldstein: Could you indicate to the committee what you think the guidelines or criteria may be at this point? Will it be strictly an issue of earnings and other obligations, or will there be something else?
Ms. Frith: The criteria will be earnings and obligations in general. There will be other items for persons with permanent disabilities who have other costs, which would be specially taken into account.
Senator Goldstein: If the bill we are talking about were to be amended, as I indicated in my testimony a few weeks ago, to say that in order to determine whether a debt is to be discharged, a court would have to take into account the extent to which the student had made use of debt management mechanisms, would that not, from your perspective, discourage students from going into strategic bankruptcy, if indeed you are right that some students would do that? A judge would say, ``You did not take advantage of the program available, so I will not discharge you.'' Would that not be sufficient to discourage what you think to be a strategic bankruptcy mentality?
Ms. Frith: In effect, that might be a reasonable approach. In the past, the courts were inundated with students requesting to have their bankruptcies discharged. As a result of the inundation, the decision became one of rote — ``Get them out of here.''
Senator Goldstein: We will hear statistics about that from another witness at another time. We will deal with it at that point.
How will $78 million over three years, which is $20 million-plus per year, deal with the reduction of student loan repayments to a level that students can afford? It seems to me that given the quantity of repayment made to you each year, this is a relatively minor amount of money.
Ms. Frith: We have only a small number of people in difficulty. The largest group of student loan borrowers repay their loans without any difficulty. They are not going into default or declaring bankruptcy.
This year, we have perhaps 15 per cent with issues, and it may not be the ones with the largest loans who are going into default. Therefore, we would have calculated the exact cost to the program based on our statistics, on knowing our clientele and how many are falling into default, what kind of problems they are having in making repayments, and how many are on interest relief. The $78 million is additional new money. We have monies set aside that we pay out each year for interest relief and for Debt Reduction in Repayment. Those will also form part of the cost of the program.
Senator Goldstein: The converse would also be true. With this new program, in effect by sheer dint of reality, very few students would make application to the court for relief, because their relief would already be available. Therefore, you will be looking at those who are doing strategic bankruptcies rather than at people who truly need to go into bankruptcy, because the latter will no longer have to do so according to your analysis of the program. That is what you told us. Is that right?
Ms. Frith: That is correct.
Senator Goldstein: Then why are you opposing this bill?
Ms. Frith: I am not personally doing anything.
Senator Goldstein: I did not mean ``you'' singular.
Ms. Frith: It is my belief that one does not change legislation unless there is a real need to change legislation. Given the programs currently in place and those coming into effect, I do not see a need to reduce the number of years.
Senator Goldstein: However, the program in effect for a dozen years or more was defended by you three years ago before this committee as being appropriate. As it turns out, the program was not appropriate, and the government decided to ease it in Budget 2008. Does that not suggest to you that some changes are required? Although this may be a good change, it is not necessarily the only change, given that 40 per cent of debt will not be covered by this program.
Ms. Frith: I presume that you are referring to the government's having spoken to it, again not to me, as I did not speak up for the 10-year rule.
My answer to that is this: We have just made a change through an exercise to reduce to seven years and five years. That was a goal of the program for a long time in order to match up with the interest relief and other debt management measures that are in place.
Senator Goldstein: Will current student loans in default qualify for relief under the new criteria, or will students have to cure their default before they can take advantage of these criteria?
Ms. Frith: Under normal circumstances, they have to put their loan in good standing in order to take advantage of debt management measures.
Senator Goldstein: Then you will have many hundreds of thousands of students who are currently in default that will not benefit from Budget 2008.
Ms. Frith: That is correct, but those hundreds of thousands of students are not in bankruptcy. Many are in good standing at the collection agency because they are making small, affordable payments.
Senator Goldstein: Does that apply to all of them?
Ms. Frith: It applies to a good portion of them.
Senator Goldstein: What is the percentage?
Mr. Manconi: Currently, approximately 60 per cent of our accounts have repayment status.
Senator Goldstein: That means that 40 per cent are not paying anything?
Mr. Manconi: That is correct. That could be because at the current time —
Senator Goldstein: Whatever the reason might be, the net result is that they are not paying anything and, therefore, would not qualify for the relief envisaged by Budget 2008.
Mr. Manconi: That does not necessarily mean that they require these benefits.
Senator Goldstein: That might be true, but they would not qualify for these benefits.
Mr. Manconi: Again, if you do not require the benefits, then you do not qualify.
Senator Goldstein: Clearly they require something, because they are not paying and they are not receiving any benefit if they are not paying. Do we understand each other?
Will the loans with private collection agencies be transferred back to the CRA for collection, or will they stay with those agencies until they are collected or written off?
Mr. Manconi: Over the course of the three years, it is our plan to have all the accounts returned to internal CRA collectors.
Senator Goldstein: What kind of tools will the government use for these collections?
Mr. Manconi: It will continue using the tools it has today.
Senator Goldstein: Are they the same tools used for income tax collections?
Mr. Manconi: There are different sets of tools for tax collectors versus student loan collectors.
Senator Goldstein: Could you tell us briefly what the differences are?
Mr. Manconi: For instance, a tax debt can be subject to a Federal Court certificate, whereby there is an immediate garnishment of assets.
Senator Goldstein: I understand that.
Mr. Manconi: The concept would be the same. There is communication with the client to negotiate payment arrangements, and then legal action occurs when required.
Senator Goldstein: Ms. Frith, what percentage of applications by people who claim to be permanently disabled is accepted by your agency, on average?
Ms. Frith: It depends on what they are applying for. For applications for an immediate forgiveness, the percentage has been fairly low. Recently, some of the cases coming in have been considered taking into account the recent court decision in Marsden. We are reviewing some cases coming through the system now.
Senator Goldstein: That case is less than one year old.
Ms. Frith: That is correct. We are in the process of reviewing such cases.
Senator Goldstein: That is because the court said your criteria or the manner of the application was incorrect.
Ms. Frith: That is correct.
Senator Goldstein: Leaving that aside for the moment, what percentage of applications by disabled borrowers is accepted? You know that percentage, and I do not understand why you will not tell us.
Ms. Frith: I cannot remember it off the top of my head. I will definitely share it with you.
Senator Goldstein: Is it less than 20 per cent?
Ms. Frith: It is close to 20 per cent, I believe, but I can get the proper number for you.
The Chair: Senator Goldstein, did you say 20 per cent?
Senator Goldstein: I said below 20 per cent.
Ms. Frith: We have to be clear that how you apply the definition is important. The current proposed budget implementation act, Bill C-50, contains certain provisions to improve the situation of students with permanent disabilities.
Senator Goldstein: I have no further questions.
Senator Jaffer: I have none. My questions were asked by Senator Moore.
Senator Ringuette: My question is in regard to the savings at the Canada Revenue Agency for providing the 50 per cent collection that you had contracted out. I have been with the National Finance Committee for five years. I think you have quite a challenge ahead in saying that you are saving $18 million over the next three years by providing the service in-house. The National Finance Committee has heard testimony over and over from Treasury Board of Canada Secretariat and Public Works and Government Services Canada that it is cheaper to provide services by contracting them out.
I am looking forward to your overcoming the huge challenge that you have in store in achieving those savings and showing Treasury Board and Public Works that it is cheaper to do it in-house.
Ms. Frith will be looking at that, as well, since it is a huge contract to provide this very important service to Canadians. I am looking forward to the next few years to see how this will move along, in both ways.
The Chair: Are there any other questions? I would like to thank the witnesses very much. You have been very patient and thorough in your answers.
The committee adjourned.