The Standing Senate Committee on National Finance met this day at 11:30 a.m. to examine Supplementary Estimates (B) laid before Parliament for the fiscal year ending Tuesday, March 31, 2020.
Senator Percy Mockler (Chair) in the chair.
The Chair: My name is Percy Mockler, a senator from New Brunswick and chair of the committee. I wish to welcome all of those who are with us in the room and viewers across the country who may be watching on television or online. As a reminder to those watching, the committee hearings are open to the public and available online at sencanada.ca.
I would now like to ask the senators to introduce themselves, starting on my left.
Senator Forest: Welcome. Éric Forest, a senator from the Gulf division in Quebec.
Senator M. Deacon: Good morning. Marty Deacon, Ontario.
Senator Keating: Good morning. Judith Keating from New Brunswick.
Senator Duncan: Good morning. Pat Duncan, from the Yukon. Welcome.
Senator Smith: Larry Smith, Quebec.
Senator Forest-Niesing: Josée Forest-Niesing from Ontario.
Senator Loffreda: Tony Loffreda from Montreal, Quebec. Welcome.
Senator Klyne: Good morning. Marty Klyne, Saskatchewan.
Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
Senator Bellemare: Diane Bellemare, a senator from Quebec.
The Chair: I would like to highlight the presence of the clerk of the committee, Maxime Fortin, and our two analysts, Alex Smith and Shaowei Pu who, together, support the work of the Standing Senate Committee on National Finance.
Honourable senators and members of the viewing public, the mandate of this committee is to examine matters relating to federal estimates generally, as well as government finance. Today we continue our consideration of the expenditures set out in the Supplementary Estimates (B) for the fiscal year ending March 31, 2020, which were referred to this committee on February 25, 2020, by the Senate of Canada.
Honourable senators, today, during the first part of this meeting, we are hearing from two departments. First, from Innovation, Science and Economic Development Canada, we welcome Frances McRae, Assistant Deputy Minister, Small Business and Marketplace Services.
From Canada Economic Development for Quebec Regions, we have the Vice-President, Policy and Communications, Jean-Frédéric Lafaille.
We also welcome, from the Federal Economic Development Agency for Southern Ontario, Linda Cousineau, Acting Vice President, Business Innovation and Community Development Branch; and from Western Economic Diversification Canada, we have Barbara Motzney, Assistant Deputy Minister, Policy and Strategic Direction.
Finally, from the Atlantic Canada Opportunities Agency, we have the Director General of Programs, Bill Grandy.
As Chair of the National Finance Committee, I welcome you and thank you for being here in order to answer questions from the senators on your vote, as we look at Supplementary Estimates (B).
Honourable senators, we will commence with Ms. McRae.
We will then hear from Jean-Frédéric Lafaille, Linda Cousineau, and Barbara Motzney, and we will wrap up with Mr. Grandy. Ms. McRae, go ahead.
Frances McRae, Assistant Deputy Minister, Small Business and Marketplace Services, Innovation, Science and Economic Development Canada: Good morning. I am pleased to be here on behalf of Innovation, Science and Economic Development Canada, or ISED, as many of you will know. I wanted to talk to you a little bit about the Women Entrepreneurship Strategy. I believe last year, around the end of February, I was also at this committee and we talked a little bit about the Women Entrepreneurship Strategy, which at that time was just starting to roll out.
Under Budget 2018, the Government of Canada introduced the Women Entrepreneurship Strategy to help women entrepreneurs access the financing, talent, networks and expertise they need to start up, skill up and access new markets. As part of a broader, whole-of-government commitment involving over 20 federal departments and agencies, including my colleagues, there are several strategy-related programs and initiatives for women-owned and women-led businesses.
Specifically, in collaboration with the regional development agencies that are here today, the government initially committed $105 million for a nationally coordinated, regionally tailored investment to help women entrepreneurs across the country grow and to strengthen and support the organizations that support those women on the ground.
This approach helped ensure national cohesion, while also enabling support to be tailored to the specific needs of regions and communities across the country.
As part of this $105-million investment, $20 million was originally committed to one piece of the program, which is the Women Entrepreneurship Fund. That fund invested directly in women-led and/or women-owned businesses to help them grow and reach new markets. The government also invested $85 million for the Women Entrepreneurship Strategy Ecosystem Fund, as I mentioned, to help non-profit, third-party organizations deliver support for women entrepreneurs and address gaps in the ecosystem that existed in their own communities.
In spring 2019, to address overwhelming program demand for both of these elements of the program, the government allocated an additional $10 million to the first part I mentioned, the Women Entrepreneurship Fund, and $2.5 million of that $10 million was specifically earmarked for Indigenous projects, particularly projects submitted by Indigenous women. This brought the total funding envelope for these initiatives to $115 million.
Investments under the Women Entrepreneurship Fund were prioritized to focus on three applicant groups: diverse women entrepreneurs such as, but not limited to, women with disabilities, Indigenous women, women in rural or remote regions, recent immigrants and visible minority women. The second applicant group was businesses with products or services related to one of the broad Economic Strategy Tables sectors that you may be familiar with through the economic work that Minister Bains has been leading. The third element is projects that would pursue additional market opportunities to help women grow their businesses.
I will stop my remarks here. Once again, thank you for your time today, and I will turn to my colleague to talk about the regional development role.
Jean-Frédéric Lafaille, Vice-President, Policy and Communications, Canada Economic Development for Quebec Regions: Mr. Chair and members of the committee, thank you for hearing from us today.
I am very pleased to be here on behalf of Canada Economic Development for Quebec regions. In recent years, our agency has been implementing the government’s vision of an inclusive economy, and that includes paying special attention to certain target groups, including Aboriginal communities and women entrepreneurs. My colleague mentioned the government’s announcement of the creation of the Women Entrepreneurship Strategy that aims at providing targeted support for women entrepreneurs.
In keeping with that strategy’s objective, our organization has contributed to the prosperity of this clientele and the development of its economic potential by helping it overcome the obstacles to growing their businesses, among other things. We deliver this initiative through our current programs, such as the Regional Economic Growth Through Innovation program.
The acronym in English is REGI, and it is a program that is common to all RDAs here present.
The REGI focuses on the two streams my colleague mentioned — the expansion and productivity of businesses. So one stream targets businesses themselves, and another stream targets ecosystems, which consist of agencies and organizations that help businesses prosper.
Through the WES, CED has provided a total of $20.3 million in contributions to 70 projects in our scope of its mandate — so in the Quebec region. The first stream, the Ecosystem Fund, aims to help businesses grow by providing women entrepreneurs with better access to services intended for them. This stream is dedicated to non-profit organizations that help women-owned and women-led businesses prosper.
Through this stream, we were able to support seven projects, for a total of $14.3 million over five years. The important part is the impact of that investment, as the organizations we have supported could provide services to 8,895 businesses, which will benefit from CED’s financial contribution.
Here is an example. The Ecosystem Fund was used to support Femmessor — which senators from Quebec may be familiar with — a funding organization that aims to grow businesses run by women from all walks of life. Thanks to CED’s contribution, that organization is expected to support more than 1,600 businesses.
So that is the stream that focuses on the innovation ecosystem.
The other stream focuses on businesses themselves. Through this stream, CED has supported 63 projects for a total of $6.1 million.
Under the stream, the focus is with SMEs that are owned and run by women and have been in operation for at least two years, and these enterprises can submit projects in order for them to pursue business opportunities abroad or projects to scale up, expand and grow their businesses.
When my colleague talked about the Supplementary Estimates (B) and the added funding that was provided, it was $1.7 million. This is what we found in the documents related to Supplementary Estimates (B). Out of this money, our agency was able to fund 17 projects, including projects targeted to Aboriginal entrepreneurs.
One example is the Inukshuk Synergie company, from Saguenay-Lac-Saint-Jean. That project aims to market to Aboriginal communities in northern Quebec and northern Canada reliable solutions in renewable energy based on wood pellets. That was an example to help make the types of projects we have supported more concrete. I would say that the initiative was very popular with the targeted clientele. We are at the point of assessing the results for businesses and the impacts on the ecosystem and, based on that initiative, CED plans to continue its efforts to develop a more inclusive economy.
Thank you very much for your attention.
Linda Cousineau, Acting Vice President, Business Innovation and Community Development Branch, Federal Economic Development Agency for Southern Ontario: Good afternoon, chair, committee members. I appreciate this opportunity to appear before you representing the Federal Economic Development Agency for Southern Ontario, or FedDev as we’re commonly known, to speak about our investments through the Women’s Entrepreneurship Strategy across southern Ontario.
Through the Women’s Entrepreneurship Strategy, FedDev Ontario is delivering $33.9 million to support 66 women-owned and women-led companies, 16 regional projects to ecosystem partners and also leading three national projects that will deliver services and supports to women entrepreneurs. Included in this amount is $3.3 million that’s a part of supplementary estimates that will support an additional 36 women-owned and women-led companies. These projects will reach all corners of southern Ontario that make up our catchment area. This funding is expected to result in the creation and maintenance of over 4,000 jobs.
This project helps women-led and/or women-owned businesses grow and reach new markets. For example, Meghan Chayka, from St. Catharines, is the co-founder and co-CEO of Stathletes. She is changing the way hockey teams analyze their players’ performance worldwide. Our funding is helping Stathletes increase its international market research, upgrade its software platform and reach more professional hockey leagues worldwide.
Furthermore, I recently had the pleasure of touring the London, Ontario, production facility of Nuts For Cheese, which makes artisanal, plant-based cheese products. Founder and vegan chef Margaret Coons began her business selling her products at local farmers markets. FedDev Ontario funding is enabling her company to increase its production and hire more people to meet growing demand for her products and expand to new markets across the country.
These women are just a couple of the exciting and dynamic entrepreneurs we have been able to support through this fund.
In addition to these investments made directly to these women-led and women-owned businesses, we are also supporting not-for-profit organizations to strengthen or address gaps in the innovation ecosystem for women entrepreneurs through the Women’s Entrepreneur Ecosystem Fund.
With up to $3.2 million in support, for example, Queen’s University is launching WE-CAN, an initiative targeting supports to women, and that’s supports for diverse women’s groups, including Indigenous women, with seed financing, mentorship, supports and networking opportunities. Queen’s is designing and delivering WE-CAN with partners from across eastern Ontario, including Ottawa-based L-SPARK, the Kingston Economic Development Corporation and the Tyendinaga-based Okwaho Equal Source and Indigenous social enterprise.
With $3.3 million in funding, FedDev Ontario will extend its support to more women entrepreneurs, empowering them to grow, succeed, seek new opportunities and strengthen our economy.
Once again, thank you for the opportunity to speak to you about the Women’s Entrepreneurship Strategy.
Barbara Motzney, Assistant Deputy Minister, Policy and Strategic Direction, Western Economic Diversification Canada: I am pleased to be here on behalf of Western Economic Diversification Canada. WED’s mandate is to partner with Western Canadians to develop the West’s economy and advance their economic interests in Ottawa. We do this by playing four roles: first, as an investor in regional innovation hubs and business scale-ups using repayable and non-repayable contribution programs; second, as a delivery agent advancing Government of Canada priorities by delivering national and regional development programs; third, as an adviser providing place-based advice and economic expertise to the government, using local research and information-gathering; finally, as a convener connecting key economic actors, including various levels of government, industry, post-secondary institutions and Indigenous groups, with federal departments and other partners.
At WD, the West is our priority. WD is actually the only federal department that’s headquartered there. Our deputy minister is the only deputy based in Western Canada. Our community, stakeholders, clients and partners are in Western Canada, and so are most of our 350 or so staff. Last year, WD delivered over $280 million to support the western economy through a range of programs and initiatives.
This year, our Supplementary Estimates (B) contains a number of items, one of which is the additional funding of $3.4 million for WD to address demand under the Women Entrepreneurship Strategy.
On the heels of International Women’s Day, it’s timely that we’re here to discuss how we’re trying to create the conditions where women-owned and women-led businesses can thrive. Right now, only 15% of Western Canadians’ small- and medium-sized enterprises are owned or led by women, and that’s slightly lower than the national average of 16% and it does indeed vary across the Western provinces. These tend to be small enterprises, and they tend to stay small.
Budget 2018 allocated $33 million to WD to support the WS ecosystem stream and to invest in Women Entrepreneurship Fund projects in the West. Last June, as reflected in Sups (B), WD received another $3.4 million to top up the WE Fund to support Indigenous women entrepreneurs, as well as women-owned or women-led businesses in urban areas.
In the West, these investments will result in over 120 projects supporting women entrepreneurs. There are about 40 in each of B.C. and Alberta, and around 20 in each of Manitoba and Saskatchewan. Through these projects, recipients have indicated that they will be able to generate over $232 million in revenue growth, stimulate $120 million in export sales growth and create over 1,600 jobs.
I’d like to take a minute to tell you about WD’s Women’s Enterprise Initiative, which is celebrating its twenty-fifth anniversary this year. For 25 years, WD has been supporting a non-profit organization in each of the four Western provinces. These WEIs help women entrepreneurs in both urban and rural areas to start, grow and scale up their businesses. They provide advisory services, networking and mentoring, and loans of up to $150,000. WEIs are successful. In the past five years, they’ve served almost 38,000 clients, created, maintained or expanded over 3,000 businesses and provided 465 loans totalling over $36 million that have helped create or maintain over 3,300 jobs.
Evaluations and studies over the years, including a major one by Statistics Canada, point to its success. It has concluded that WEI-supported firms grew larger, hired more and survived longer than similarly sized women-owned companies that did not receive such support. One of the WEIs in Western Canada, from Manitoba, was successful in leveraging its experience to become a national project under the WES.
To conclude, I would like to leave you with this: For our economy to thrive in the West, we need to capitalize on the untapped potential of under-represented groups, including women, to participate in economic diversification through programs and initiatives like the Women Entrepreneurship Strategy.
Bill Grandy, Director General, Programs, Atlantic Canada Opportunities Agency: Good morning. Thank you for the invitation to appear.
The Atlantic Canada Opportunities Agency is the federal department charged to fuel Atlantic Canada’s growth. It works with businesses and community leaders to build a strong and inclusive economy. ACOA programs are helping women-owned and women-led businesses to grow, be more competitive and innovative.
Women entrepreneurship in Atlantic Canada is rising. In 2017, 17% of SMEs in Atlantic Canada were majority owned by women, compared to 15% in 2014. The percentage of equal ownership has also increased, from 17% in 2014 to 21% in 2017.
ACOA was mandated to deliver the Women Entrepreneurship Strategy programs in Atlantic Canada. It supported 27 women-owned or women-led businesses, three regional ecosystem projects and one national ecosystem project, for a total investment of $10 million. An estimated 200 jobs will be created or maintained through this support. Please allow me to give you some examples.
Nain Hotel is a tourism operation in a remote community of just under 1,200 in Labrador. It is owned and operated by Patricia Decker, a successful local Indigenous entrepreneur. Thanks to a $100,000 Women Entrepreneurship Fund contribution, the Nain Hotel is enhancing its energy efficiency to reduce its use of diesel-generated electricity. This hotel’s success helped maintain 16 jobs in Labrador’s northernmost permanent settlement.
Prince Edward Island’s Duinkerken Foods achieved an 85% increase in its production volume thanks to $90,000 from the Women Entrepreneurship Fund. The investment allowed co‑owner and president Brenda van Duinkerken to transition to a fully automated packaging line. Now her business can expand into European markets and online sales.
An organization supported through the WES Ecosystem Fund is the Moncton-based Conseil économique du Nouveau-Brunswick. A $1.2-million investment is helping develop an entrepreneurship support program for women from francophone communities, including francophone immigrant women.
Fueling a strong and inclusive economy requires commitment and purposeful actions. ACOA is continuing to build on efforts to develop entrepreneurship within groups, including youth, Indigenous peoples, immigrants and women. Thank you.
The Chair: Thank you.
Honourable senators, in order to recognize all senators who wish to ask questions, I would need your full cooperation in limiting each senator to four minutes, which includes questions and answers. To the witnesses, your answers must be succinct, and if you wish, you can add comments in writing through the clerk.
Senator Marshall: Thanks to all of you for your very interesting presentations. Since my home province is Newfoundland and Labrador, my questions will be confined to the Atlantic Canada Opportunities Agency and Mr. Grandy.
Mr. Grandy, the first item in supplementary estimates, the $2.5 million for the reinvestment of receipts, what is that?
Mr. Grandy: Reinvestment for the Women Entrepreneurship Fund?
Senator Marshall: No, it’s called “reinvestment of receipts from repayable contributions to foster the development of institutions and enterprises.”
Mr. Grandy: We do repayable loans at the agency, so when we get back additional repayable loans above and beyond what we would normally estimate, then we collect that additional funding for reinvestment back into the region through the sups.
Senator Marshall: It’s the excess over a targeted amount?
Mr. Grandy: Correct.
Senator Marshall: Are you able to tell us what the targeted amount is?
Mr. Grandy: The annual targeted amount is $45 million.
Senator Marshall: So for any excess, you require an appropriation before you can spend it?
Mr. Grandy: Correct.
Senator Marshall: And that’s what that is. Okay. Thank you.
I think all speakers spoke about the Women Entrepreneurship Strategy. Was it originally $10 million allocated to ACOA?
Mr. Grandy: ACOA was allocated $8.4 million. We have one national ecosystem project, which is for $2.2 million, so that was above our $1-million allocation, and we have a process in the sups to share and offset the difference in cost for the respective RDAs who lead national projects. For other programming, we slightly overcommitted to make sure that we could spend our full allocation and fully support what the government was trying to achieve in the objectives of the program.
Senator Marshall: Since you’re responsible for the four Atlantic provinces, how do you divide up your funding? Is it to be equitable or first-come first-served for the projects?
Mr. Grandy: No. General distribution of financing is 30% for Newfoundland, New Brunswick and Nova Scotia, and 10% for P.E.I. In this particular program, we looked at all the applications that came in to make sure that we had a reasonable distribution across, and the strength of the applicants. We actually approved seven businesses in New Brunswick, eight in Newfoundland and Nova Scotia, and four in Prince Edward Island.
Senator Marshall: The most important question is, how do you evaluate the programs? I don’t think it was in your remarks. It might have been in Mr. Lafaille’s remarks about the success of the program. How do you determine whether the program’s been successful or not?
Mr. Grandy: We’ll do it at a couple of levels. At the agency level, we go through a five-year evaluation cycle. This initiative was delivered through the REGI program, as Jean-Frédéric explained. We will go through an evaluation that will look at all aspects of that program.
Frances, I will return to you to answer the national piece.
Ms. McRae: Certainly. Thank you for the question. I can answer that at the national level.
One of the key elements of this program is that, as I noted earlier, when we designed the program, we knew that the situation that women entrepreneurs were facing across the country was going to be quite different. The situation in Truro, Nova Scotia, is very different from Iqaluit and very different from downtown Toronto. What we purposely asked for from proponents was their own solutions. What is the gap they were seeing? What is the solution they would identify to that gap? That would be different, depending on what project was being submitted.
In the end, each of these organizations that have received funding, including the women entrepreneurs themselves who received the funding towards their businesses — all of that information is available publicly on our website in terms of all the recipients. They each have a contribution agreement with each of the organizations managing the relationship with them. That contribution agreement will set out the way in which the program will be run and the kinds of measures and outcomes they’re looking for. That is at each project level.
Senator Marshall: Are the evaluators independent evaluators, or are they within, for example, ACOA?
The Chair: Excuse me.
Senator Marshall: My four minutes are up.
The Chair: That is a good question. Could you answer in writing, please?
Senator Forest: As a senator from Quebec, I will put my question to Mr. Lafaille.
I see a transfer of $500,000 under vote 5b to advance artificial intelligence. I had an opportunity to visit Mila, among others, with colleagues. Does that $500,000 investment represent the total amount for the entire project or will CED participate more meaningfully in the hub being developed in Montreal?
Mr. Lafaille: That investment is part of an announcement the Prime Minister made following the latest G7 Summit, where members agreed to create a new centre of expertise in artificial intelligence, which will have one location in Paris and another one in Montreal. That money will be used to create the unit in Montreal. So that is the first step toward the establishment of an organization, under the auspices of that G7 initiative, to create a centre of expertise in artificial intelligence that will focus specifically on the ethical use of artificial intelligence by various private companies that are developing that type of new technology.
Senator Forest: So that is an upfront payment, and you don’t currently have an estimate of the total investment CED will make in that initiative.
Mr. Lafaille: Our forecast, which we have already made public, is that the envelope could go up to $10 million, but we are still at the preliminary stage of setting up the new agency. We will see what the final cost will be, but the government has committed to invest $10 million, through CED, to create that new agency.
Senator Forest: A transfer of $450,000 will be made by the Department of Transport to CED to implement the Lac-Mégantic rail bypass project. Is there an overall assessment of the project’s cost? Will that be the full extent of CED’s participation?
Mr. Lafaille: That money is being used to fund the strategic plans for the implementation of that rail bypass. The funding will be provided jointly by Transport Canada and CED, but CED is the agent that will transfer the money to those who will assess the project. Once the report has been published, we will see what the follow-up action will be. Our participation is limited to the planning.
Senator Forest: So, the province will not participate in the plans and specifications.
Mr. Lafaille: I can get back to you in writing to confirm this, but I believe that the funding of that particular initiative with the province of Quebec is split 50-50. I am working from memory, but if you like, I could write to you to confirm everything.
Senator Forest: Could you send us in writing the funding arrangement of the planning, but also of the implementation, as those are important costs for the rail bypass?
Mr. Lafaille: Duly noted.
Senator M. Deacon: Welcome and congratulations to all of you for being here today. I’m hoping that you will also get the opportunity to share some of your practices and learnings across and within your area.
It is great to hear real-life examples in putting the package together in what’s happening across this country. It’s also a challenge when we look at Women Entrepreneurship Strategy — there are a lot of women entrepreneur activities going on in the country — and trying to align in our minds what is fitting into this umbrella and what is out everywhere else.
I am from southwestern Ontario, so it would be natural, Ms. Cousineau, that my first question is to you. When you look at the increased funding that you’ve asked to support 36 additional projects, are those committed projects? Within this next round of financial support, is there anything you are adjusting in your modification of criteria for those projects? A question came up earlier about that review, and I heard one part of one answer that it’s within and we talked to the actual business owner and what she is seeing and trying to adjust, but I want to understand more about that commitment and whether you’re changing your filter for decision-making and what that review looks like. I would put that across the table. The first part of the question is to Ms. Cousineau.
Ms. Cousineau: The demand for the WEF component of the entrepreneurship fund was quite significant. Out of that, initially we were able to fund a number of businesses that I mentioned in my opening remarks.
The additional funding we received through the supplementary estimates allowed us to reach out to 36 additional women to provide them with supports. They were part of the original evaluation of the applicants that we had received. Out of that, we were able to support a number of Indigenous women with their businesses and their success.
In terms of the Indigenous supports that we have, for example, we have 17 women-owned and women-led businesses that we’re supporting, with a component of $1.6 million that we’re contributing to them. We have examples of some of those. One that I could share with you is a company called Abraflex that actually does all the radiation supply clothing exclusively for the Bruce Power plant. That’s an Indigenous women co-owned business. Now we’re helping her with a $100,000 contribution to augment her laundry capabilities to recycle the uniforms.
Senator M. Deacon: That’s fantastic. Across the table, we see numbers like 15%, 17% and 21% across your presentations of women-led businesses. We’re talking money today. But how do we get that number up to 25% to 30%? It’s not necessarily dollars. You’re having conversations at the table with these folks. Help us out with what you think that other piece is that helps us get this number up.
The Chair: Could you provide an answer to that final question in writing, please. Thank you.
Ms. McRae: If I may, about your question earlier about information-sharing across, we do have very strong information-sharing across. We did it all the way through the project assessment. Now we have a regular governance that pulls together lessons learned, and the Women Entrepreneurship Knowledge Hub, which is also part of the strategy, is designed to put together all the information through all the pieces of the overall envelope of $2 billion that the government has allocated.
The Chair: Thank you. Please, witnesses, don’t be bashful. When you look at those questions and you need to bring clarity, do it in writing through the clerk.
Senator Duncan: Thank you to all of the witnesses. I would particularly like to express my thanks to the Department of Western Economic Diversification and the Department of Industry for the transfer of funds in these supplementary estimates to the Canadian Northern Economic Development Agency for the Women Entrepreneurship Strategy. That funding is very important to our discussion today.
I would also like to express my appreciation that everyone has spoken of under-represented groups, in their presentations. Unfortunately, no one has spoken of women in trades. That’s a particularly important area, I believe, throughout Canada, as it relates to other initiatives, and housing is one example. I ask that you please forward through the clerk examples of funding programs where we’ve specifically targeted women in trades and technology.
Following up on Senator Deacon’s point and on Ms. McRae’s point about information sharing, I would draw your attention to Making It Work, Yukon Women in Trades 2019. When I met with them last summer, they made reference to following up on work being done in Newfoundland to advance this discussion of women in trades. They want to go further with it and take the next steps because we’ve made so much progress. How do we make more? That is, again, following up on Senator Deacon’s point.
In your knowledge hub, do you bring together the subgroup of women in trades and technology to exchange ideas and to learn best practices? If I could have that information in writing, I would truly appreciate it. Thank you.
Senator Smith: Could you put something together, even if it were a consolidation from each of you, on the intended outcomes of each of the programs you operate? It’s not just money that you give out to people, but what is their success rate? Are they still in business after three years or five years? Can you give us some real statistics that show the success of your implementation and whatever measurements you’re using to track the people to whom you’re giving the money? It’s a great idea to support entrepreneurs, especially women entrepreneurs, underprivileged people, or people in tough situations who don’t have infrastructure in their own areas. But I think it’s important to see the results, and you probably have that; that’s why I’m asking the question. If we could understand that, it would really help us. Could you give some comments on that, as simple as your success and how you’re evaluated? What measurements do you have? Is it just the number of projects you implement, or is it the number of projects you implement and the success ratio of those projects based on set criteria that you’ve implemented with your people? Or you get the money and, all of a sudden, you run out of money and you ask for more money but you’re not progressing?
Ms. McRae: I have just a very quick answer to that question. Thank you. We do strongly believe we will learn a lot from this program and this work. For the Women Entrepreneurship Fund and the actual Ecosystem Fund, we do have common measures. We will be reporting on it in a common way under the Women Entrepreneurship Strategy. However, I would point out that many of the contribution agreements have just been signed fairly recently. The projects themselves will continue until March 2021. The WES Ecosystem Fund projects will continue until March 2023. We are actively engaged in determining measurement. The Women Entrepreneurship Knowledge Hub, which is designed to be a repository and a knowledge-sharing place, is having a conference at the end of March where they’re bringing all the key players together to talk about how we advance women entrepreneurship in this country.
Senator Smith: Will you talk about the criteria you will use to evaluate the success of these programs?
Ms. McRae: As I said, the programs are quite diverse. In some cases, we want to increase women’s participation in exporting. That’s certainly an objective of ours, but it’s for the companies. What are their metrics? What are their objectives? Each of those would be detailed in their project contribution agreements.
Senator Klyne: Good morning. Welcome to the panels. I have two questions for Ms. McRae, but others can chime in.
Regarding the Canadian Northern Economic Development Agency, known as CanNor, I discovered there is no representation here this morning, so I will go through you. If there is someone else here, they can respond. Searching something using an iPad and pdf is an oxymoron; I can only find two references in the supplements here. One shows a total of $138,000, but I was keying in on the $79,000 for Canadian Experiences Fund. That is a relatively sizeable amount given the small population. However, the vast opportunities for expanding, building and creating tourism experiences in the North are key. A lot of European and Asian markets are interested. Maybe you can ask CanNor to send information on where they’re at in that regard. I know CanNor is a relatively young agency in terms of its establishment compared to some of the others, but we have always been looking for that and it is there and I just want to see how they are doing. I would like a report specifically on the Canadian Experiences Fund.
My other question is on the ecosystem. Women entrepreneurs in Saskatchewan have a big profile, especially in Regina — very active and very visible. On that ecosystem, I appreciate that, in the initial stages, a platform and a foundation on which to build are very important to get the entrepreneurs going in the sphere of women entrepreneurs. Is there a point in the cycle where they can share resources and eliminate duplications with other business resource centres, other ecosystems or other incubators that are out there? At some point, they have to integrate into a broader economic system where there is diversity and inclusivity. When do they start to share and eliminate duplications in the sphere of ecosystems?
Ms. McRae: Thank you very much for that question. In fact, what you’re talking about is exactly why we called it an ecosystem fund. In reality, we many times find support groups for women and women entrepreneurs don’t have access to the networks and don’t get access to the same financing and face additional barriers that other entrepreneurs are not facing. You can add things: If you’re an Indigenous woman, you face additional barriers. If you are a woman with a disability and you’re an entrepreneur, you face additional barriers. The reality is that targeted supports through organizations to women on the ground are critical to them.
You are absolutely right that the objective over time is to be sure that we are integrating. We want women entrepreneurs to use the supports in their own communities that are available to all entrepreneurs, but one reason the government decided to put additional money into this Women Entrepreneurship Strategy was to address the additional barriers faced by women at this point in time. We see that in the numbers of women we already have, which, as we discussed, is around 16% of ownership.
The Chair: Honourable senators, for the second hour, we have Public Health Agency of Canada and Employment and Social Development Canada. In order to ensure that we leave here at 1:15 for our responsibilities in the Senate chamber, I would ask senators to ask their questions, and the witnesses could mark those questions and send the answers in writing ASAP, if they can do that. Do we have consensus around the table, senators?
Hon. Senators: Agreed.
Senator Bellemare: I have two quick questions about young people. I see in the details for the Department of Industry that subsidies of $2.3 million are planned under the Youth Employment and Skills Strategy, and there is another envelope for digital skills for youth in the amount of $1.5 million. I just wanted to know whether those envelopes also aim to support entrepreneurship among young people.
That is part of a somewhat broader question that also covers women entrepreneurs and all of your programs. Are you also targeting the under 35 population, young entrepreneurs? The labour market is changing a lot and there is a lot of independent work, especially for those who are entering the workforce. The entrepreneurial spirit must be activated. I would like to hear you on that. Thank you.
Senator Stewart Olsen: Just as a clarification from all of you, there were several of you who mentioned that in Supplementary Estimates (B) you had requested money and that it helped fund a certain number of jobs, so you already have the money that we’re talking about today? I’d like an answer to that because one would wonder why we’re reviewing the sup ask if you’ve already been given the money.
My second quick question is for ACOA. I’m interested in the Conseil économique du Nouveau-Brunswick and wondering why $1.2 million is helping to develop an entrepreneurship support program for women when I thought the support program was actually provided by ACOA.
Senator Forest-Niesing: I have a quick question. There is no doubt that women’s entrepreneurship brings extraordinary benefits and important contributions to the economy. All of you, with the exception of Mr. Lafaille, have talked about the number of jobs that your initiatives will create. In Western Canada, 1,600 jobs, in Atlantic Canada, 200 jobs, and in Ontario, 4,000 jobs. I would like to know how many jobs will be created in Quebec.
I’m particularly interested in qualifying this information. Are we talking about full-time jobs and permanent positions? Coming back to the point made by my colleague Senator Smith, are we measuring the duration of those jobs? That is my concern.
Senator Keating: I’m going to bring it back to ACOA. I have several questions, but I’ll be quick.
The first one is about the Canadian Experiences Fund, which provides $58.5 million over two years. Is that a pilot project? Why is it two years?
Second, the allocation of the request for monies sees only $97,400 allotted to ACOA. I would like to know why that is.
The Canadian Experiences Fund covers a lot of sectors that are critical in New Brunswick. There are three of them that are of interest to me, including the expansion of the winter season tourism in rural and remote communities and Indigenous tourism. I would like to know what percentage of funds has been allocated in those three areas specifically to the province of New Brunswick.
I would like the same answer with respect to the investment of funds, including the $800,000 for the Women Entrepreneurship Strategy in New Brunswick. What is the percentage that has been allotted to New Brunswick, and are there other funds that cover women entrepreneurs?
I have one last question that simply results from my reading of the WD. Are there any similar plans or strategies for public transport in Atlantic Canada, and if so, where?
Senator Loffreda: Thank you for your presentations. Quickly, well done on this much-needed initiative. What I do like is that you shared that you’re partnering with and supporting non-profit organizations and strengthening some gaps with them, such as Queen’s on the WE-CAN project. I’m wondering, are you doing that across Canada with other universities? I’d like to say that it all starts with education. We do want to promote women entrepreneurship, and I think our universities have to play a big part in that. So I’m wondering if, regarding the Youth Employment and Skills Strategy mentioned by Senator Bellemare, which was an excellent question, some of those funds are allocated to women entrepreneurship in universities? We’ve seen it with entrepreneurs in general, where there have been programs across Canada. It has increased the number of entrepreneurs. In Quebec, the number of youth entrepreneurs spiked drastically based on specific programs. That’s my first question.
Second, thank you for sharing your progress and some results. I’ve always said that if you manage activities, you’ll get activities. When you manage results, you get results. So I think it’s important not just to manage the activities but to manage the results. Actually, some will say just manage the results, let the activities play out on their own and we’ll get there. I’d like to know, are you satisfied with the amount that was allocated? You’ve outlined progress. Is it sufficient? Are you fully satisfied? What challenges are you facing, if you are facing challenges? What additional things can be put forward to help women and youth entrepreneurship?
Last question: You’ve talked about how the amounts were allocated. Are there caps regionally by province? If we look at the projects, the impression I have — I may be wrong — it’s based on needs, projects and regions requesting the amounts. Have we stopped for a minute and looked at it the other way? Why are certain regions not requesting funds? What can we do in those regions to promote women entrepreneurship? Many times when we do allocate funds, it’s based on need. The squeaky wheel gets the oil, as they say. Is there anything we can do to promote some of those regions that require more help?
Last but not least, kudos on the Indigenous projects. That was one of my questions yesterday and you’ve answered that. I think a lot of help is needed there. Kudos. Once again, thank you for the presentation.
The Chair: To the witnesses, thank you very much for sharing your comments and answering our questions. There is no doubt you will be looking at those questions and providing answers to the Finance Committee.
Honourable senators, we will now bring in witnesses from the Public Health Agency of Canada and Employment and Social Development Canada. Honourable senators, I would like to mention that this panel will end at 1:15 due to our responsibilities to be in the Senate.
We have the following witnesses representing the Public Health Agency of Canada: Anna Romano, Vice President, Health Promotion and Chronic Disease Prevention Branch; Carlo Beaudoin, Chief Financial Officer; and Dr. Howard Njoo, Deputy Chief Public Health Officer. From Employment and Social Development Canada, we have Mark Perlman, Chief Financial Officer; and Jason Won, Deputy Chief Financial Officer.
To the witnesses, thank you for accepting our invitation. I’ve been informed by the clerk that Mr. Perlman will make the first presentation, followed by Mr. Beaudoin.
Mark Perlman, Chief Financial Officer, Employment and Social Development Canada: Members of the committee, I am pleased to appear before you in my capacity as Chief Financial Officer for Employment and Social Development Canada (ESDC). Senior executives from key areas of ESDC are also in attendance and may be coming forward to help me answer some of your questions.
The department delivers a range of programs and services that affect Canadians throughout their lives. The department provides seniors with basic income security, supports unemployed workers and helps students finance their post-secondary education. We also have the mandate to maintain a strong, productive, healthy and competitive workplace within the federal jurisdiction through the Labour Program. Service Canada delivers ESDC’s programs to citizens, as well as other Government of Canada programs and services.
Allow me to present to the committee an overview of ESDC’s portion of the 2019-20 Supplementary Estimates (B) tabled on February 18, 2020. Supplementary estimates are tabled in the House of Commons by the President of the Treasury Board to obtain the authority of Parliament to adjust expenditure plans, as reflected in the estimates for the fiscal year.
As part of Supplementary Estimates (B), ESDC is seeking $194.1 million in voted appropriations. This includes $180.4 million related to the write-off of debts owed to the Crown for unrecoverable Canada student loans. As a general practice, a separate vote is established for the authority to write off debts. A loan to an outside body is considered a non-budgetary item, since the loan is expected to be repaid. Student loans are an asset for the Government of Canada. Such write-offs become a charge against appropriation and therefore require Parliament’s approval.
Access to post-secondary education is key to building a strong middle class. In 2018-19, the Government of Canada provided more than $3.6 billion in Canada student loans and over $1.6 billion in Canada student grants to help students with the costs associated with their education. The write-off of approximately $180.4 million in 2019-20 is for student debts where all reasonable collection efforts have been exhausted. The percentage of write-offs represents less than 1% of the $22.3 billion portfolio as of the end of February.
The government has taken steps to make post-secondary education more affordable through initiatives such as increasing the amount and expanding eligibility of Canada Student Grants, ensuring no borrower needs to repay their student loan until they are earning at least $25,000 per year.
Together, these initiatives have already reduced the financial burden on student borrowers and are expected to continue to decrease future loan write-offs.
The government has also announced its intention to further increase student grants and enhance repayment support to make repayment more affordable.
Most loans that are written off have been deemed unrecoverable due to the expiry of the legislated statute of limitations. Once six years elapse without payment or acknowledgement of the debt, the government can no longer undertake legal activity to recover Canada Student Loan debt. Other reasons for write-off include bankruptcy, extreme financial hardship and compromised settlements.
Through solid administrative practices, the Canada Student Loans program has improved the performance of the portfolio significantly by reducing default. The three-year default rate declined from 28% for the 2003-04 cohort to 9% for the 2016-17 cohort.
Under vote 1, ESDC is also requesting a total of $13.7 million to fund the Temporary Foreign Worker Program for $10.4 million and for the Benefits Delivery Modernization program for $3.3 million.
The Temporary Foreign Worker Program provides employers with access to foreign workers on a temporary basis when Canadian citizens or permanent residents are not available, and ensures foreign workers are protected.
Beginning in April 2018, the department began to observe a consistent volume increase in Labour Market Impact Assessment applications, LMIAs, received nationally, which continues in 2019-20. Processing delays created by the increased volume severely impeded the ability of Canadian employers to recruit foreign nationals in a timely fashion when Canadians or permanent residents are not available, reducing their competitiveness and capacity to sustain or grow their business and contribute to the Canadian economy.
The requested $10.4 million has been invested to reduce the backlog created by the increased volume of LMIA applications, as well as shorten the time to render a decision. By March 31, 2020, the department will be able to return to historic service levels despite continued increased volumes.
The Benefits Delivery Modernization program will ensure ESDC can continue to reliably and accurately provide Canadians with Employment Insurance, Canada Pension Plan and Old Age Security benefit payments. The Benefits Delivery Modernization program is modernizing information technology systems and processes to enable service improvements, which will expand self-service options, reduce wait times, streamline application processes and enable resolution at first point of contact. The funding being requested is necessary to continue the essential program definition stage of this multi-year engagement.
Also, these supplementary estimates include transfers to or from various organizations for a total of $33.8 million, such as a transfer from the Department of Indigenous Services Canada for the Kativik Regional Government to deliver youth employment and education programming in the amount of $1 million in contributions.
We are receiving funds from Shared Services Canada to adjust funding previously provided for core information technology services in the amount of $.06 million in operating expenditures. There is an internal reallocation of resources from the Apprenticeship Grants program — $.06 million — to grants for the Labour Funding Program.
There is also a transfer to Crown-Indigenous Relations and Northern Affairs for self-governing Yukon First Nations for the amount of $60,000 in contributions and a transfer of $35.4 million to various organizations for the Youth Employment and Skills Strategy, $34.4 million in contributions and $1 million in operating expenditures. As you may know, the Youth Employment and Skills Strategy is a horizontal Government of Canada initiative led by Employment and Social Development Canada and delivered in collaboration with 10 federal departments and agencies.
You will note that the budgetary statutory items forecast increased by $232 million. This is mainly due to Canada Student Grants — $229.6-million increase — and reflect the trend observed as the current academic year as well as the latest projections from the Office of the Chief Actuary. Furthermore, measures announced in recent budgets continue to help more students than anticipated earlier, resulting in higher than anticipated grant disbursement and an increase —
The Chair: Mr. Perlman, we have a copy of your notes. I’ll have to stop you there because of a time factor. Thank you very much, and you can get ready for the questions.
Carlo Beaudoin, Chief Financial Officer, Public Health Agency of Canada: Mr. Chair, honourable senators, we’d like to thank you for inviting us to present the Public Health Agency of Canada Supplementary Estimates (B) for 2019-20. Accompanying me is Anna Romano, Vice President, Health Promotion and Chronic Disease Prevention Branch; and Dr. Howard Njoo, Deputy Chief Public Health Officer. We are pleased to have the opportunity to discuss our resourcing plans with you.
In these Supplementary Estimates (B), the Public Health Agency of Canada is seeking a net increase of $15.1 million. This amount included voted authorities of $13 million and transfers of $1.8 million.
The Public Health Agency of Canada is seeking funding for important initiatives, including $3.9 million to support funding for community-based projects that address the challenges of dementia, $2.1 million to strengthen multiculturalism and address the challenges faced by black Canadians, and $1.2 million to support the Métis nation in gathering health data and developing a strategy to better inform their health policies and program services.
An amount of $25 million was recently announced to address emerging financial pressures on the PHAC to address the ongoing response to the COVID-19 outbreak. That amount is not included in these estimates. The $25 million was approved for this fiscal year and an additional $12.5 million was approved for the next fiscal year to deal with the most pressing aspects of COVID-19, including the supports needed for Canadians repatriated from Wuhan, from the Diamond Princess in Japan and now the Grand Princess in the U.S.
The COVID-19 situation is evolving quickly, and the number of cases in Canada and the world, including the number of affected countries, continues to increase on a daily basis. The agency’s primary focus will continue to be on containing the virus in order to delay the onset of community transmission. We are, however, preparing for the possibility of a more widespread outbreak.
In addressing the situation, the Public Health Agency is working closely with the provinces and territories as well as with international partners (including WHO and U.S. CDC) to ensure a consistent, evidence-based approach to addressing this crisis.
At the federal level, we are conducting national disease surveillance and providing guidance on public health measures.
Our National Microbiology Laboratory is helping to confirm new cases of COVID-19 and conducting research to advance our understanding of the virus.
Last week, the Prime Minister announced a new cabinet committee to oversee the federal response to COVID-19. The agency will brief this committee on a regular basis, allowing us to respond more quickly to the health impacts of the virus.
COVID-19 is a serious public health challenge and the agency is working on all fronts to protect the health, safety and well-being of Canadians.
We want to thank you for this opportunity to speak about our work. We will be pleased to answer questions from members of the committee.
The Chair: Thank you very much.
Senator Marshall: Thank you very much. I know we have only a few minutes each. My colleagues are very interested in the Public Health Agency of Canada, so they’ll be getting some questions, so I will ask my question of the employment people.
We talk about the debt write-off of the student loans every year, and I think the impression some people have is that is the only write-off that goes through those accounts. Through statutory, I know there is quite a substantial amount forgiven. Could you talk about loans that are forgiven under the statutory and give us some information on that?
Mr. Perlman: Is this in relation to the repayment assistance? Is this still Canada Student Loans?
Senator Marshall: Yes, this is Canada Student Loans.
Mr. Perlman: I could ask my colleague to join us here at the table.
Senator Marshall: I wanted to make sure we’re getting a complete picture of the Canada Student Loans program.
Mr. Perlman: There are the loans themselves, there is the write-off of the student loans and then there’s repayment assistance that goes through the Repayment Assistance Plan. They are not exactly the same as write-offs.
Senator Marshall: Is it statutory?
The Chair: Would you introduce yourself for the record, please?
Atiq Rahman, Director General, Canada Student Loans Program, Employment and Social Development Canada: I am Atiq Rahman, Director General of the Canada Student Loans Program in the ESDC. Thank you for the question.
Yes, that is statutory as well. It is part of the Repayment Assistance Plan. It’s a benefit extended to students who do not have the financial means to repay their student loans.
The difference between write-off and the Repayment Assistance Plan is a write-off is something that we are trying to reduce as much as we can. We do everything to recover as much of the defaulted loans as we can. On the other hand, the Repayment Assistance Plan is a benefit extended to our borrowers. If anything, we try to increase awareness of that so those who are in financial difficulty can access that. Under that plan, the government waives interest on borrowed student loans. Also, for those who are on the Repayment Assistance Plan for a longer period of time, it starts forgiving part of the principal amount as well.
Senator Marshall: When I look at the financial statements of the government and the public accounts, under the section Canada Student Loans Program, it says last year there was $162 million written off by the department. Then they say another $22 million was written off under the Financial Administration Act. Then it says loans and interest receivable on these loans totalling $391 million were forgiven as per the Canada Student Financial Assistance Act and then another $2.8 million was forgiven as per the Canada Student Loans Act.
It makes it sound like in addition to the write-offs that we’re seeing here in Supplementary Estimates (B), there is also a substantial dollar value of loans that are forgiven, and the government does not collect on those loans. That’s what I’m trying to get clarification on.
Mr. Rahman: Thank you. I’m not completely familiar with the numbers that you have just noted, but I can tell you that, yes, there are loans that are forgiven. Under the Repayment Assistance Plan, some loans are forgiven. Loans are also forgiven for borrowers who have severe permanent disability in that they can no longer work. Some loans are forgiven because of that. Then there are other loans that are forgiven under a slightly different policy, which is loan forgiveness for doctors and nurses who are working in rural areas.
Senator Marshall: In the interests of time, Mr. Chair, I would suggest that I provide a copy of the information from the government’s financial statements and the department response. I would like to get an overall picture of the Canada Student Loans Program, not just the write-offs.
Senator Forest: My first question concerns the Temporary Foreign Worker Program. There have been meetings. What we are being told right now is that people deplore the program’s lack of flexibility. For example, in horticulture, a farm worker cannot work on the farm at harvest time. There is a lack of flexibility, given the huge needs. Often these companies bring back the same workers year after year and they go through a whole process again. Is that a problem you’re aware of?
Mr. Perlman: As far as a concern, I know what we’re doing is looking at efficiencies to the program and trying to see ways of reducing the burden on employers to be able to bring people in, and repeat employers is one of the options being examined by the government as we speak.
Senator Forest: Do you consult on an ad hoc basis with companies that use foreign workers to see how the program can be adapted to be as efficient and flexible as possible?
Mr. Perlman: I do have a colleague here who is the Assistant Deputy Minister for the Skills and Employment Branch, and he can probably give you a fuller answer than I could on that one.
Senator Forest: Perhaps in writing, because I have one last question about COVID-19.
Mr. Perlman: Yes.
The Chair: Can you answer that question in writing, Mr. Perlman?
Mr. Perlman: Absolutely.
Senator Forest: Regarding COVID-19, the World Health Organization has just declared it a pandemic. Given what resources you have, do we have the human resources to deal with that level of alert? The last time, we asked for resources in some provinces, and it weakened the response capacity in different provinces. Do we have the human resources to deal with a COVID-19 pandemic?
Dr. Howard Njoo, Deputy Chief Public Health Officer, Public Health Agency of Canada: Yes, for Canada, we currently have resources. First of all, the WHO has declared a pandemic, but that does not change anything in Canada. We are continuing with our strategy. We have a containment approach. The majority of the cases reported in Canada are related to travellers from abroad. So it’s important to continue early detection, isolation, and contact tracing.
At the moment, we have the necessary resources. I am only talking about the public health sector and the health care system. Our planning also includes the possibility of more community-based transmission across the country. That is not the case right now, but that is what we are planning for now. Even the Prime Minister has announced resources for the health care system, perhaps even for other equipment. So, for now, that is fine, but we still have to plan for all kinds of eventualities.
Senator Forest: Thank you.
Senator Stewart Olsen: With respect to my one question about student loans, I think I will just read the response my colleague receives.
This question is for the Public Health Agency of Canada. I would like to ask about the note here, $2.1 million in funding to strengthen multiculturalism and address the changes faced by black Canadians. What on earth is that? Are you talking about health?
Anna Romano, Vice President, Health Promotion and Chronic Disease Prevention Branch, Public Health Agency of Canada: I can take that one. Thank you for the question, senator.
In Budget 2018, the government allocated $19 million to enhance local community supports in black communities.
Senator Stewart Olsen: For health?
Ms. Romano: For mental health.
Senator Stewart Olsen: Thank you. That answers it.
The only other thing I would say is congratulations and thank you for all the work you’re doing with the current situation involving COVID-19. It’s only going to get worse, and I wish you all the best. Thanks.
Ms. Romano: Thank you.
Senator Klyne: I have two quick questions. One is around implementing a dementia community investment fund and the national dementia strategy. In a quick answer, if you could, I want to know what the deliverable and strategic outcomes of that national dementia strategy are. Is it managing or enhancing quality of care, or is it preventive research?
Ms. Romano: Thank you for the question, senator. In terms of the dementia strategy, there are a number of pillars that include the upstream prevention piece. There’s some activity around increased research, as well as then some community-based interventions that are led by community, depending on what’s going on in that particular area of the country. So I would say it encompasses everything you’ve mentioned, in addition to some targeted funding for research.
Senator Klyne: We’ll be able to find that online somewhere?
Ms. Romano: Absolutely.
Senator Klyne: Great.
I have another quick question for someone in regard to the temporary foreign worker. Much of that is based on labour market information. When you do that, I assume you do that by region and possibly even subregions of provinces. Do you collaborate and consult with the provinces when you do that and put that together, or is it just a broad brush of “here is Canada”?
Mr. Perlman: Again, I have my colleague in the audience who could come and speak about that program in detail because he does the policy development.
Senator Klyne: He doesn’t need to give a lot of detail, but maybe an overview of how you collect that data. It would be disappointing if it’s broad brush — Canada versus the regional issues.
The Chair: Please introduce yourself.
Elisha Ram, Associate Assistant Deputy Minister, Skills and Employment Branch, Employment and Social Development Canada: Good afternoon, senators. My name is Elisha Ram. I am the Associate Assistant Deputy Minister of Skills and Employment at the ESDC. Thank you for the question.
I hear two sides to that question. Where do we get the data, and how do we collect it? The information comes from our own resources, including job banks, Statistics Canada and other information that we collect. We also collaborate with provinces and territories through the Labour Market Information Council to ensure we have good sources of information.
At the level of the labour market decision, agents have access to the information that is provided by the employer in terms of the efforts that they have made to include Canadians and ensure those jobs are made available to Canadians first. They also have access to, broadly, market information, including down to the level of the region that will help them assess whether or not there really is a shortage.
Senator Klyne: By sector or industry?
Mr. Ram: As fine as we can make it.
Senator Bellemare: My question is for the representatives of Employment and Social Development Canada. When I looked at the table in Supplementary Estimates (B), I noticed that the total statutory items of $232 million were rather high compared to the total appropriations to be approved, which are $194 million. I was wondering what this was all about, and I saw on the other page that these statutory items relate to an increase in Canada Student Grants for full-time and part-time students of $230 million and contributions to employee benefit plans of $2.3 million.
My question is this. Why is it that Supplementary Estimates (B) include an increase for grants, when it could normally have been included in the Main Estimates? Why is it that this figure has increased relatively significantly from the $1.5 billion authorized to date? How is it that such a statutory item increases to such an extent at year end?
Mr. Perlman: Thank you for the question. The amount of grants is statutory based on trends identified in the current year passed by legislation in the House, and it is volume driven based on the uptake of the program. That’s why we go statutory on those items.
Senator Bellemare: So what you mean is that there was an increase in the demand for grants that was not unforeseeable at all?
Jason Won, Deputy Chief Financial Officer, Employment and Social Development Canada: It’s quite a large program, as you can see. The amounts that are in the Main Estimates are a forecast to the best of the ability of the program, along with the Office of the Chief Actuary. As the new information comes about, we use the opportunity at the supplementary estimates to update it so parliamentarians and senators know that the original estimate needs to be updated.
Senator Bellemare: I was surprised because I thought it was counter-cyclical. Usually, when the labour market is very high, fewer people go to school and more are in the labour market. Thank you for your answer.
Senator Loffreda: Thank you for your presentation. Congratulations. The three-year default rate declined from 28% for the 2003-04 cohort to 9% for 2016-17. Yesterday, I quoted The Canadian Press, an article I had read based on the 2015-16 year where we were looking — just to be precise — at the numbers of 31,658 students over 490,000 total loans granted. So it’s important to note the total loans granted as opposed to the nominal dollar amounts given. That was a 6.4 percentage. If we added the part-time students, it brings us to a 6.2 percentage, which seems high. But if we compare ourselves to similar economies like the U.S. — I was reading just this morning about student loans defaulting over 90 days is over 10%. Historically, it was at 9% and 10%. So kudos, congratulations.
I would like to see a graph on the 28% going to 9% and which administrative procedures were put in place. Are you accessing all the resources you have with the banks? I’m assuming it didn’t, but I hope it didn’t take 13 years to bring that number down and that it has come down drastically in the initial years. The only worry I had going forward and on some of the solutions is if we look at the number amounts — and kudos once again — if we look at the nominal dollar amount, the write-offs are below 1% and they’re closer to 60 basis points. If we look at banks historically, 30 to 50 basis points was very acceptable in good economic times. So kudos for that too. That number sits well, the 60 basis points write-off. It’s the number of students more that concerns me.
What can we do to keep improving? Going forward, the historical trends and what I would have liked to see, instead of just seeing the write-offs — and if my memory is correct, one of the figures we saw yesterday was the write-offs spiking up. That graph was a steep curve going up. As a percentage, I assume it’s constant. You’re taking historical percentages and applying them to future loans that will be increasing based on your initiatives.
Mr. Perlman: What is happening is the percentage is still staying under 1%, but the number of loans we’re putting out there is increasing.
Senator Loffreda: So the percentage is constant. Because when you look at that, it’s a steep curve. My first reaction is what’s going on and why are the write-offs increasing the way they are. But you’ve got to take into account, obviously, that there are a lot more loans being made.
Mr. Won: Yes, more loans are being made. Their amounts are going up just because it has to track also the cost of going to university and colleges, although the government is trying to address the overall debt load of students through different measures like an increase to the grant programs and other things.
The Chair: You can continue your answer in writing.
Senator Loffreda: It would be nice to see that trend from 2003 and how it came down. I’m curious as to what procedures were taken.
Senator Smith: The ESDC was simplifying the hiring process for temporary foreign workers as well as implementing programs that fast track permanent residency status for these workers because there are obviously some issues.
For public health and COVID-19, what is the impact on your operations budget? Do you have adequate contingency reserves in place for unforeseen events? Could you just answer that in a one-liner?
Mr. Beaudoin: For COVID-19, we had to go for emergency funding of $25 million this year. There was an announcement made this morning by the Prime Minister of somewhere between $400 and $500 million of that will be for agency operations and funding. So we will be coming back for that funding.
Senator Smith: In the normal course of business as you move forward, will you set up contingencies for unforeseen events? That is something to think about. If you can write me a one-liner on that, that would be great.
Mr. Beaudoin: Thank you.
Senator Keating: I’ll ask the question. You can respond in writing as well, if need be.
You have $1.7 million in your estimate request to combat “illegal drug use and protect Canadians.” In my view, at least, the use of drugs in the country is nothing short of a crisis situation, with people dying every day. There are cries of alarm, at least in my province, from emergency room doctors on the increase of people showing up at emergency with drug overdose problems. It has an enormous impact on the justice system, and there’s no end. I could go on. Of the $1.7 million, what is the budget allotted to combat illegal drug use from the principal and main budget? Is it a priority in your department? Where does the money go? When you say combating illegal drug use, where does that go?
The Chair: Will the answer be sent in writing, Mr. Beaudoin?
Mr. Beaudoin: Yes.
The Chair: Thank you.
To the witnesses from the Public Health Agency of Canada and from Employment and Social Development Canada, as chair of the Finance Committee and as senators, we thank you for the information you have provided. We thank you for the clarity that was brought forward in response to the questions of the senators of the National Finance Committee.
Honourable senators, before I declare the meeting adjourned, the Standing Senate Committee on National Finance will resume at 2:30 p.m. in Room B45 of the Senate of Canada Building.