HRDC - Evaluation of The Atlantic Groundfish Strategy (TAGS)

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2.TAGS/HRDC Program Description

2.1 Objectives of TAGS

The objectives and modus operandi of TAGS have been continually revised through the life of the Program. At its inception in May of 1994, the stated objectives of the TAGS program were:¹⁵

To restructure the fishery industry in Atlantic Canada to become one that is economically viable and environmentally sustainable through resources rebuilding and the reduction of the harvesting and processing capacity.
To facilitate the labour market adjustment of individuals affected by the Atlantic fishery crisis.
To enhance the profession of fishers who will remain active in the fishing industry.
To facilitate community economic adjustment focused on regional strengths and opportunities of those areas affected by adjustments in the fishery industry.

Income support is not explicitly identified in this list of objectives despite the fact that, from the start, the largest proportion of TAGS program spending has been on income support. ¹⁶

The general principles governing the TAGS program included: ¹⁷

an integrated individual and community approach, responsive to local needs and conditions;
`active' adjustment with required participation in counselling, training, mobility, local employment projects or voluntary work programs;
designation of those clients who will be part of fishery of the future in both the harvesting and processing sectors, and provision of appropriate programs for them to be active on TAGS;
emphasis on sustainable development, environmental enhancement, and long-term economic development for Atlantic Canada.

The objectives and principles of TAGS were to be realized through three program components:

a labour adjustment process delivered by HRDC;
a capacity reduction process delivered by DFO and the provinces and aimed at a 50% reduction in harvesting and processing capacity in the groundfish industry;
community economic development activities led by ACOA/FORD-Q with provincial government involvement.

2.2 TAGS/HRDC Program Structure

The HRDC-provided component of the TAGS program was comprised of two elements: income support and labour market adjustment measures.

2.2.1 Income Support

TAGS Transitional Funding Measures were intended to provide income support to displaced inshore and offshore fishers and plant workers with historical attachment to the groundfish industry. Most industry participants who were eligible for the earlier Northern Cod Adjustment and Recovery Program (NCARP) or for the Atlantic Groundfish Adjustment Program (AGAP) were rolled over onto TAGS, and transitional assistance was provided until the end of 1994 for some 3,500 NCARP roll-over clients who did not meet TAGS eligibility criteria.

The rate of income support was based on the average UI benefit rate established by UI claims over the 1990 to 1992 period, less 6%. For NCARP roll-overs the rate was the NCARP rate less 6%. The weekly rate ranged from $211 to $382. Clients who qualified for UI had to draw UI benefits, and they received a top-up from TAGS if their UI benefit rate was lower than their TAGS rate.

2.2.2 Labour Market Adjustment Measures

At the outset of the program every client was expected to be `active' while on TAGS. Each would receive counselling and would develop an action plan identifying goals for adjustment and/or active participation and the measures to be taken to achieve them. Depending upon age, education level, capacity for mobility, and whether a client was designated part of the fishery of the future, the client's action plan might make use of one or more of the following program elements:

Training programs, including literacy and adult basic education (ABE), academic upgrading, university studies, entrepreneurial training and skills training;
Professionalization, fish harvesters, and possibly plant workers, who were designated part of the fishery of the future were expected to participate in professionalization programs including specialized training;
Green Projects, employment projects (52 week work/learn cycles) which were originally expected to contribute to enhancement of the environment as well as to job experience;
Employment Bonus, available to clients who found permanent jobs outside the traditional fishery, and were willing to give up their eligibility for TAGS;
Wage Subsidy, given to employers outside the traditional fishery as incentives to hire TAGS clients for full-time permanent jobs, with training as required. TAGS also provided support for clients to seek out such jobs;
Self-employment Assistance, financial assistance, training and technical support for clients to start new businesses outside the traditional fishery;
Community Opportunities Pool (COP), - clients joined COP projects to undertake community service activities on a voluntary basis. This program was mainly intended for older clients who were unlikely to pursue other adjustment activities;
Mobility Assistance, financial assistance for eligible TAGS participants to relocate to areas where they would be better able to find employment outside the traditional fishery;
Early Retirement Programs, following negotiations with the provinces, voluntary early retirement programs were established for TAGS clients who were between the ages of 55 and 64 as of May 15th, 1995, and who were able to show a long-term attachment to the groundfish industry.¹⁸ There were two early retirement programs - the Fishplant Older Worker Adjustment Program (FOWAP) which was a joint provincial- HRDC program and the Atlantic Fishers Early Retirement Program (AFERP) which was a joint provincial-DFO program.¹⁹ These programs provided eligible clients with retirement income until the age of 65.

While TAGS/HRDC has been reconfigured and scaled back for reasons that will be discussed below, it should be recognized that the program has been an important vehicle for testing new social policies and program models including the active requirement, the close integration of income support with training and other employment supports and job creation strategies, and flexible implementation at the regional and local levels. As such, the TAGS/HRDC program has made important contributions to the Human Resources Investment Fund (HRIF) and the active employment measures of the new Employment Insurance regime.

2.3 Constraints on TAGS Implementation

The TAGS program as described above originally had a total budget of $1.9 billion which was allocated among the program elements as follows:

Table 2.1 Original TAGS 1994 to 1999 Budget (in $ millions)

Program Element Original Budget Percent

Income Support $688.9 36.3%

Active Programming (Training, Green Projects, etc.) $746.5 39.3%

Early Retirement Programs $57 3.0%

Administration $80.3 4.2%

Total HRDC²⁰ $1,572.7 82.8%

DFO - Capacity Reduction $277 14.6%

ACOA/FORD-Q - Economic Development $50 2.6%

Total $1,900 100%

By the end of 1994 it was evident that the TAGS program was encountering major problems in implementation. The most serious constraints identified in the first TAGS Operational Review and in interviews with TAGS managers were:

Over-subscription: TAGS was designed for a caseload of some 30,000. By mid-1995, some 50,000 had applied and just over 40,000 had qualified;

Table 2.2 TAGS Caseload - Forecast and Approved

Province Forecast Approved

Newfoundland 23,000 27,934

Prince Edward Island 500 582

Nova Scotia 4,400 7,840

New Brunswick 700 1,134

Québec 1,400 2,535

Total 30,000 40,025

Delays in designating core fishers: DFO did not finalize its criteria for designating core fishers until well into 1995, which affected decision-making on adjustment activities;
Delays in implementing capacity reduction: the Industry Review Boards were not up and running until mid-1995, and capacity reduction in both the fleet and the processing sector was slower than anticipated. Provinces have been reluctant to designate fish plants for permanent closure, preferring to leave these decisions to plant owners;
Delays in establishing early retirement programs: agreement was not reached between the federal and provincial governments on the adjustment options for older workers until late 1995;
Delays in implementing community economic development: ACOA was given the mandate to develop community economic development initiatives to provide local jobs in regions impacted by the fisheries crisis. The implementation of new initiatives was delayed by a longer than expected funding approval process. FORD-Q in Quebec did mount substantial community based job-creation activities by mid-1996;
Intra-program communications: in the early stages of TAGS there were some communications problems between HRDC regions and NHQ;
Inter-program communications: co-operation between TAGS officials in HRDC, DFO and ACOA was constrained in the early stages because of differing understandings, operational constraints and timetables. In particular, the DFO designation of `core fishers' (i.e., harvesters who would have a place in the fishery of the future) took longer than expected, and HRDC staff were frustrated by not knowing who was to be targeted for adjustment out of the groundfish industry;
Data management problems: there were problems setting up the new client file management systems and procedures developed for TAGS, and specifically with the interface between TAGS client data and the UI data systems. This limited the ability of TAGS managers to do accurate and timely cost forecasts and audits. It also meant that for the first year of the program, front-line workers and managers did not have easy access to key client information.

2.4 1995 Program Changes

In response to budgetary pressures and other implementation problems, the following changes to TAGS were announced in February 1995:

The requirement for all clients to be active was removed:

`core' fishers and plant workers who were deemed to be part of the fishery of the future were not required to be active,
only clients who were prioritized or `targeted' on the basis of their age, education levels and interest in adjustment would be expected to be active.

Support for professionalization training for harvesters was ended.
Budgets for a number of active programs, including training, Green Projects and Community Opportunities Pool (COP) were reduced.

Reflecting the now more focused goals of the program, the TAGS Handbook prepared for TAGS/HRDC staff in late 1995 reduced the objectives of TAGS to two main points:

to pay income support to TAGS clients in an accurate and timely manner; and
to assist TAGS clients to adjust out of the groundfish fishery.

2.5 Targeting for Adjustment

Despite a 50% reduction in their budget for active programming in early 1995, TAGS/HRDC managers continued to identify adjustment out of the groundfish fishery as the primary criterion for measuring the success of TAGS. This goal could only be achieved by targeting resources on the clients most likely to succeed in adjustment programs. TAGS/HRDC managers therefore established the following targets for adjustment out of the groundfish industry:

12,000 clients self-supporting through employment outside the groundfish fishery;
5,500 adjusted out as a direct result of TAGS/HRDC program interventions.

This challenge was to be addressed through measures such as the following:

improvements in counselling practices, and targeting counselling and training activities more effectively on clients with the best possibilities for success;
piloting of a new group counselling initiative, Mapping A Plan, which was designed to provide more comprehensive and intensive support for individuals coping with the personal and social challenges of adjustment out of the fishery;²¹
through partnerships with industry organizations, additional pilot projects were undertaken to target counselling and training on those TAGS clients who, because of age, education levels, or location in isolated areas, faced the most serious adjustment constraints;
the criteria for Green Projects were made more flexible, opening up possibilities for a wider range of job creation projects.

2.6 The July 1996 Program Changes

On July 22, 1996, the Federal Minister of Fisheries announced the following changes to the TAGS Program:

Special TAGS adjustment activities such as training would no longer be made available under TAGS as of August 1, 1996.²²
TAGS clients who applied for Employment Insurance (EI) would no longer be paid TAGS benefits during the two-week EI waiting period.
No TAGS benefits would be payable to individuals whose total income (including TAGS benefits, Employment Insurance and earnings from work) exceeded $26,000 in any given calendar year.²³
To maintain income benefits at current levels and stay within the $1.9 billion budget, the Strategy would have to end when funds are exhausted, which will be in August, 1998.²⁴

These changes were made to avert substantial cost over-runs. It was estimated that income support payments alone would cost the government $900 million over the period from April 1, 1996 to May 15, 1999, while the budget remaining for TAGS benefits was only $400 million. With the announced changes, all remaining TAGS funds were reallocated to income support except for economic development and a portion of funds allocated to licence retirement. The cuts to administration and active programming would reduce the overall shortfall by $330 million. The remaining $170 million shortfall will be resolved by ending the program earlier than planned.

TAGS is now scheduled to end in August 1998.

Footnotes

¹⁵	TAGS/HRDC The Atlantic Groundfish Strategy (TAGS) Guide, Draft, September 26, 1994, p. 2.
¹⁶	It should be noted that the Treasury Board Terms and Conditions for TAGS stated the following objective for the program: 'to provide income support to fishers and fish plant workers affected by the East Coast groundfish crisis who undertake to participate in the labour market adjustment programming offered under The Atlantic Groundfish Strategy.'
¹⁷	TAGS/HRDC The Atlantic Groundfish Strategy (TAGS) Guide, p. 1.
¹⁸	Note that no agreement was reached in New Brunswick and as a result early retirement programs were not available to clients in that province.
¹⁹	DFO also had a Groundfish Licence Retirement Program.
²⁰	The total HRDC budget component was later revised to $1.7 billion because of the larger than projected number of clients who qualified for TAGS benefits. By the fall of 1995, it was estimated that income support would absorb $1.3 billion, and the other components were revised accordingly, with administration at $66 million and active programming at $285 million.
²¹	While an evaluation of the pilot showed that it had positive impacts, Mapping A Plan was never fully implemented because of budget constraints within TAGS/HRDC.
²²	TAGS clients on training or employment programs when the announcement was made were able to complete their programs and were eligible to apply for new training or other supports through the EI program if they had had a UI/EI claim any time in the previous 3 years.
²³	If a client received TAGS benefits and had income from other sources such that the total exceeded $26,000, that client would have to pay back any TAGS benefits that had been received over and above the $26,000 limit.
²⁴	Source: HRDC document 'TAGS Notice to Clients', July 1996.

Last Modified: 1998-11-25	Important Notices