TERMS AND CONDITIONS FOR CONTRIBUTIONS UNDER SECTION 63 OF THE EMPLOYMENT INSURANCE ACT

 1.      LEGISLATIVE AUTHORITY

• Section 63 of the Employment Insurance (EI) Act provides authority for the Canada Employment Insurance Commission, with the approval of the Minister of State of Human Resources and Skills Development, to enter into agreements with a government or government agency in Canada, or with any other public or private organization to provide for the payment of contributions for all or a portion of

• (a)      any costs of benefits or measures provided by the government, government agency or organization that are similar to the employment benefits or support measures established by the Commission and that are consistent with the purpose and guidelines of Part II of the EI Act, and

• (b)      any administration costs that the government, government agency or organization incurs in providing the benefits and measures.

2.       OBJECTIVES

• Contributions under section 63 of the EI Act support the purpose of Part II of the Act which is to help maintain a sustainable employment insurance system through the establishment of employment benefits and support measures.  The objectives of these contributions are to:

• better coordinate federal and provincial/territorial labour market programs, reducing overlap and duplication;
• improve service to clients; and
• better meet the needs of regional and local labour markets.

• Through labour market programming similar to employment benefits and support measures, clients will become employed, resulting in savings to the EI Account and social assistance.

3.       INTERPRETATION

• In these terms and conditions,

  “HRSDC” means Human Resources and Skills Development Canada;

• “Minister” means the Minister of State of Human Resource and Skills Development;

• “Commission” means the Canada Employment Insurance Commission.

4.       GUIDELINES

• Benefits and measures available through the Labour Market Development Agreements must be consistent with the guidelines provided under Part II, subsection 57(1) of the EI Act, as follows:

• a)      harmonization with provincial employment initiatives to ensure that there is no unnecessary overlap and duplication;

• b)      reduction of dependency on unemployment benefits by helping individuals obtain or keep employment;

• c)      co-operation and partnership with other governments, employers, community-based organizations and other interested organizations;

• d)      flexibility to allow significant decisions about implementation to be made at a local level;

• e)      availability of assistance under the benefits and measures in either official language where there is a significant demand for that assistance in that language;

• f)       commitment by persons receiving assistance under the benefits and measures to:

•           i)       achieving the goals of the assistance,

•           ii)      taking primary responsibility for identifying their employment needs and locating services necessary to allow them to meet those needs, and,

•           iii)      if appropriate, sharing the cost of the assistance; and

• g)       implementation of the benefits and measures within a framework for evaluating their success in assisting persons to obtain and keep employment.

5.       RECIPIENT

• Governments or government agencies in Canada and other public or private organizations are eligible to receive contributions as provided under Part II, section 63 of the EI Act.

6.       STACKING LIMITS

• The requirement for a recipient to declare other sources of proposed funding is not applicable as the Commission is the sole source of funding for activities provided for under Part II of the EI Act.

7.       APPLICATIONS FOR ASSISTANCE

• Government or Government Agency

• Labour Market Development Agreements with provinces/territories have been entered into on the basis of negotiations following the May 30, 1996 offer by the former Minister of Human Resources Development to enter into new bilateral partnerships on labour market activities.

•  Other Public or Private Organization

• Applications for assistance from eligible recipients to carry out eligible activities must:

• a)       demonstrate that their implementation would support the objectives of the program;

• b)       be in accordance with the guidelines outlined in section 4, as applicable;

• c)       outline the activities to be performed in pursuit of stated objectives;

• d)       provide an estimate of costs to be incurred;

• e)       outline the results to be achieved; and

• f)        disclose the involvement of former public servants who are under the Conflict of Interest and Post‑Employment Guidelines.

8.       ELIGIBLE PARTICIPANTS

• Participants in benefits similar to the Commission’s Employment Benefits offered by the recipient and funded under these Terms and Conditions must be insured participants as defined in section 58 of the EI Act.

• Participants in a measure similar to the Commission’s Employment Assistance Service offered by the recipient must be unemployed.

• Participants in a measure similar to the Commission’s Labour Market Partnership offered by the recipient must be employed and facing a loss of employment.

9.       ELIGIBLE EXPENDITURE

• Eligible expenditures mean:

• a)       any costs of financial assistance provided by the recipient to persons or organizations that are eligible for assistance under the recipient’s benefits or measures;

• b)       any administration costs that the recipient incurs in providing the benefits or measures.

• Eligible expenditures do not include expenditures towards benefits and measures that are not considered by the Commission as being similar to the Employment Benefits and Support Measures established by the Commission under Part II of the EI Act.

10.     AGREEMENTS

• Each agreement will indicate that the benefits and measures to be offered by the recipient are similar to those established by the Commission under Part II of the EI Act.

• Each agreement will specify the responsibilities of each party, the items for which expenditures are anticipated, the conditions under which payments will be made and mutually agreed upon measures designed to assess the success of the activity in attaining its objectives.   Subject to specific obligations under agreements, clauses will be included to allow for a reduction in the amount of financial assistance specified should funding made available to the Commission be reduced.

• Agreements will require a plan, to be provided to the federal government, describing benefits and measures to be available and the projected cost of each recipient’s benefit or measure, each year three months before the beginning of a fiscal year.

11.     FINANCIAL SUPPORT AND AGREEMENT DURATION

• The maximum level of funding shall be established by the Commission consistent with the EI Part II Expenditure Plan.

• Government or Government Agency

• Agreements with governments or government agencies will remain in force for an indefinite period.   Agreements cannot be unilaterally terminated during the first three fiscal years during the period of an agreement.   Agreements will include appropriate termination clauses indicating that they may be terminated upon notice by either party or by mutual consent.

• Other Public or Private Organization

• Agreements with other public or private organizations will have a maximum duration of five years.   Renewals will be based on performance and results achieved.   Agreements will include appropriate termination clauses indicating that they may be terminated upon notice by either party.

12.     BASIS AND TIMING OF PAYMENT

• Government or Government Agency

• Advance payments towards all or a portion of the cost of a government’s or government agency’s benefits and measures are made on a monthly basis in accordance with the Treasury Board Policy on Transfer Payments and are based upon a forecast of monthly cash flow requirements furnished by the recipient.

• Annual contributions towards all or a portion of administration costs incurred by a government agency are made on a monthly basis in twelve equal installments, or in accordance with forecasted cash flow requirements.

• Payments which exceed the amounts to which the recipient is entitled are debts to Canada and must be repaid to Canada.

• Other Public or Private Organization

• Payments to other public or private organizations may be made as follows:

• a)       monthly or quarterly progress payments may be made based on expenditure claims and final payment of any sum due following receipt of the final claim, or if HRSDC considers it necessary, following completion of a final audit;

• b)       advance payments determined in accordance with the Treasury Board Policy on Transfer Payments;

• c)       quarterly advance payments based on cash flow forecasts may be provided to Aboriginal organizations regardless of the agreement value.  HRSDC will determine if an organization is eligible for this provision through the use of such tools as management audits, the track record of the organization with HRSDC and a demonstrated capacity to manage and report on advances.

13.     AUTHORITY TO APPROVE AGREEMENTS

• Authority to approve agreements rests with the Minister.

14.     AUTHORITY TO SIGN AMEND AGREEMENTS

• Authority to sign and subsequently to amend agreements may be delegated by the Commission, as per HRSDC’s delegation instrument.

15.     AUTHORITY TO APPROVE EXPENDITURE

• Authority to approve expenditures by certifying compliance with the terms of the agreement may be delegated by the Minister, as per HRSDC’s delegation instrument.

16.     DUE DILIGENCE

• HRSDC provides assurance that departmental systems, procedures and resources for ensuring due diligence in approving transfer payments and verifying eligibility and entitlement and for the management and administration of the program are in place.

• Government or Government Agency

• Labour Market Development Agreements with governments or government agencies are on‑going agreements entered into pursuant to the Federal Government’s offer to provinces and territories of May 1996.  The eligibility of provinces and territories is a given.  In transfer provinces, payments are made monthly in accordance with Treasury Board approved annual allocations derived from a formula based on labour market variables, updated annually, designed to respond to changing economic realities in the jurisdiction.  Annual contributions are also made towards administration costs incurred by a province or territory in twelve equal monthly instalments based upon an agreed estimate of the administration costs to be incurred by that province or territory in providing benefits or measures during the fiscal year.

• Other Public or Private Organization

• Systems and methods include the Common System for Grants and Contributions, Grants and Contributions Operations Guide, Specialization and Concentration Initiative, Quality Assurance Framework, Financial and Administrative Services Grants and Contributions Policy, evaluations, and quality assurance reviews by the National Grants and Contributions Performance Tracking Directorate.

17.     COST OF MANAGING THE PROGRAM

• The cost of managing and administering the Employment Benefits and Support Measures is a cost of administering the EI Act and is charged to the EI Account pursuant to paragraph 77(1)(d) of the EI Act.

18.     AUDIT

• For each fiscal year during the period of an agreement, the recipient will submit to Canada a report containing:

• a)       an audited financial statement prepared in accordance with generally accepted accounting principle and practices, in a form prescribed by Canada and certified by the recipient’s auditor, setting out the costs actually incurred in that fiscal year in respect of each benefit and measure, and

• b)       a statement from the recipient’s auditor certifying that all payments received in the fiscal year on account of Canada’s contribution to its administration costs were paid in respect of administration costs actually incurred in that fiscal year.

19.     ACCOUNTABILITY

• The EI Part II Activities Accountability Framework, which was developed in the context of the Labour Market Development Agreements, applies to Employment Benefits and Support Measures delivered by HRSDC, similar benefits and measures provided by provinces and territories under Labour Market Development Agreements and similar benefits and measures provided by Aboriginal organizations under Aboriginal Human Resources Development Agreements.  The primary indicators are:

• a)       Active EI claimants served;

• b)        EI clients returned to work (with an emphasis on active EI claimants);

• c)        Unpaid EI benefits (resulting from EI claimants returning to work before exhausting their EI benefits).

• Pursuant to section 3 of the Employment Insurance Act, the effectiveness of the Employment Benefits and Support Measures/similar programs will be the subject of reports which the Minister will table annually from 2001 to 2006 in Parliament within 30 days of receipt from the Commission, or if Parliament is not then sitting, on any of the first 30 days that either House of Parliament is next sitting.  Further reports will be provided as considered necessary.

• The Commission will monitor the implementation of Employment Benefits and Support Measures/similar programs and report on the results achieved on an annual basis. This report will form part of the plan which is approved by Treasury Board and included in the Main Estimates Part III – Report on Plans and Priorities for each fiscal year estimating the amounts to be paid for that year under Employment Benefits and Support Measures/similar programs.  The targets and results to be reported are the primary indicators listed above.

• Integrated Results-based Management and Accountability Framework(RMAF) and Risk-based Audit Framework (RBAF)

• The Department will prepare an integrated Results-based Management and Accountability Framework/Risk-based Audit Framework for the program that includes measurable results.  The framework will contain a concise logic model and an overview of the performance measurement strategy, including the performance data (key indicators) to be tracked.  Also included will be a description of program monitoring and recipient auditing; and an overview of suitable provisions.  It will also provide the key areas of analysis for the summative evaluations and an overview of suitable provisions for departmental reporting, including reporting to Parliament.

• In order to measure and report on the results of the program, HRSDC will ensure that appropriate performance measurement systems are integrated into the operational cycle of its activities.  Internal and recipient audits will be conducted in accordance with the integrated RBAF/RMAF.

• A new labour market framework is now under development which could result in significant changes to the active measures funded under EI Part II.  As such, the RMAF/RBAF developed will be an interim document that will be in place for the duration of these terms and conditions.  Upon completion of the new framework, a new RMAF/RBAF will be completed

20.     EVALUATION

• The results of benefits and measures supported under each agreement will be evaluated in accordance with the requirements of the Employment Insurance Act.

• A two‑phase approach has been implemented within the Labour Market Development Agreement/Employment Benefits and Support Measures evaluation framework.

•  The first phase is comprised of formative evaluations focused on program design, delivery and implementation issues.  This phase has been completed, with the exception of the formative/summative evaluation of the Nunavut Labour Market Development Agreement which is planned for completion by fiscal year 2004‑05.

• In the second phase, summative evaluations have been launched in most jurisdictions.  Summative evaluations of Employment Benefits and Support Measures/similar programs are aimed at providing information on the impact of Employment Benefits and Support Measures/similar programs in helping participants prepare for, find and keep jobs.  In addition to employment impacts, these evaluations examine a range of outcomes related to Employment Benefits and Support Measures/similar programs participation including skills gains, job quality and increased self‑sufficiency in relation to government income support assistance.

• Subsequent evaluations will be conducted regularly, on a three‑to‑five year basis.

21.     DURATION OF TERMS AND CONDITIONS

• These Terms and Conditions will expire March 31, 2007.

• No new agreements will be approved after that date.  Payments to any agreements already in progress before that date will continue as detailed in the agreement terms and conditions and schedules, subject to continued EI Part II spending authority as approved by the Treasury Board pursuant to section 79 of the EI Act.