Media Release |
16.8 In the winter of 1993-94, the Fisheries Resource Conservation Council determined that, despite the northern cod moratorium and the reduction in groundfish quotas in December 1992, groundfish stocks were continuing to decline. The Cashin Task Force reported in November 1993 that the groundfish industry was facing a crisis of catastrophic proportions, and that fish stocks would not return to commercially exploitable levels before the end of the century. The report stressed that the groundfish industry of the future would be smaller, and that over half the jobs in the fishery would disappear.
16.9 In response to the crisis, the Minister of Finance announced, in the February 1994 Budget speech, a five-year program for the long-term adjustment of the Atlantic groundfish fishing industry. The Atlantic Groundfish Strategy was announced in April 1994, and came into effect on 16 May 1994. It covered fishing areas in five provinces: Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick and Quebec. TAGS provided assistance programs for individuals and communities affected by the groundfish moratorium. The development of the Strategy was based on a set of guiding principles (see Exhibit 16.1 ).
16.10 The objectives of TAGS were to restructure the fishery industry in Atlantic Canada to make it economically viable and environmentally sustainable by:
16.13 TAGS incorporated complementary and interdependent activities. The first step was to identify a core group of fishers and fish processing plants that would continue to be part of the fishing industry. Identifying this core group would allow adjustment measures to be directed according to participants' needs. Long-term regional and community economic development would subsequently increase employment opportunities and guide the direction of training.
16.14 Income support was to be provided to fishers, trawler workers and plant workers affected by the Atlantic groundfish crisis who agreed to participate in the labour adjustment programs offered under TAGS. The active participation measures were designed to facilitate access to employment through, for example, career planning and counselling, mobility assistance and support for re-employment; to prepare individuals for work through, for example, literacy and basic skills training; and to enhance employment opportunities through such means as support for entrepreneurship and restoration of the environment and communities. Human Resources Development Canada also administered the early retirement program for older plant workers.
16.15 Complementing the measures under TAGS, Unemployment Insurance was changed to Employment Insurance effective in January 1997. The aim was to help those most in need and to provide incentives for beneficiaries to return to work. Changes were introduced to solve basic structural problems such as "disincentives" to work, dependence on unemployment insurance, administrative complexity and inequities in the system. The effects of these measures will not be known for a number of years. In May 1997, the Government of Canada announced that a temporary change would be made to the Employment Insurance Regulations that would enable all TAGS beneficiaries to qualify for unemployment benefits under regular entrance requirements.
16.19 Because TAGS was replacing two earlier programs that terminated on 15 May 1994 (see paragraph 16.7), a transition period of nine months was provided to maintain continuity. The deadlines for submitting applications varied according to the clientele. The labour adjustment component had to be developed and approved before TAGS came into effect, and mechanisms for applying to TAGS and for the initial payment to participants had to be put in place quickly. Exhibit 16.3 shows the timetable established by HRDC for the first year of TAGS.
16.20 TAGS was not fully developed when it came into effect on 16 May 1994. The partnerships needed to implement the Strategy's proposed concepts still had to be negotiated and TAGS components related to industry restructuring and economic development had not been finalized.
16.21 Income support was intended for those affected by the groundfish moratorium. To be eligible for TAGS programs, applicants had to agree to participate actively in labour adjustment measures ( Exhibit 16.4 presents a profile of TAGS participants). It was therefore important that participants have a clear picture of their status. To be able to make career decisions early in the Strategy, eligible fishers and plant workers had to know if they could expect to be part of the industry in the long term or if they should find another job or retire.
16.22 These were potentially complex decisions for individuals. TAGS participants had to consider factors like choosing a career direction, finding out what jobs were available and where, and what type of effort would be required, as well as reconciling personal needs with those of their families. Knowing which enterprises would be targeted by reduction efforts was thus a priority.
16.23 Initially, TAGS planned to identify by June 1994 a core group of fishers and fish processing plants likely to be part of the fisheries of the future, based on criteria to be established in consultation with the provinces and the industry. Federal measures of capacity reduction -- early retirement and fishing licence buybacks -- would apply to fishers in that group.
16.24 As early as August 1994, Fisheries and Oceans acknowledged that reduction of fishing capacity would occur only in the long term, and that TAGS measures would be limited to areas of federal jurisdiction and would not alone be enough to reduce the industry by the desired 50 percent. Other measures such as unemployment insurance reform, a new licensing policy, the establishment of permanent agencies, provincial reduction of fish processing capacity, and economic development would have to be part of the solution. However, the impact of this new direction on the costs and operations of the other TAGS components was not assessed when the decision was made, and proved to be one of the factors in the increased demand for funds allocated to income support.
16.25 For the purposes of TAGS adjustment and industry reduction measures, the core group of fishers and fish processing plants was limited by Special Eligibility Criteria applicable only to groundfish fishers. By the summer of 1995, Fisheries and Oceans had identified some 6,200 fishers as qualifying under these criteria. Subsequently, a similar process took place but for licensing purposes and 9,800 fishers were designated in early 1996 as qualifying for the fishery of the future. In December 1996, a further review designated 10,435 groundfish fishers to be part of the fishing industry (see Chapter 15, paragraphs 15.24, 15.27 and 15.29). These successive processes did not serve to clearly identify individual situations.
16.26 The proposed community economic development measures to be developed by ACOA and FORD-Q were intended to create jobs in the communities affected by the restructuring of the fishing industry. Active labour adjustment measures could have led TAGS participants to direct their adjustment efforts toward the job opportunities thus created. In January 1995, HRDC still did not know what direction these measures would take.
16.27 The development and implementation of TAGS did not help the eligible population to understand the situation it was facing. The enterprise closures and layoffs that would result from the restructuring of the industry remained impossible to foresee, as did future opportunities for other employment.
16.29 There were no existing data on the number of days spent on groundfish fishing over the course of a year, or on the percentage of a fisher's income that it provided. Similarly, there were no data on the time spent by plant workers to process groundfish or on the income they derived from it.
16.30 The forecasts were therefore based on the number of participants in previous programs. Fisheries and Oceans data on fish plant workers were based on employee lists at a given time, whereas HRDC data included all individuals who had worked in the sector and had paid unemployment insurance contributions. Consequently, their estimates of TAGS target population were inconsistent, at 31,000 and 39,000 respectively.
16.31 The departments had even less information on the population that had not been affected previously by a moratorium. Consequently, they had to make assumptions about the number of potential participants and these may have greatly influenced the forecasts.
16.32 TAGS eligibility criteria had to be adjusted to this situation. They targeted individuals who worked in a fishing enterprise or fish plant for which groundfish represented at least 25 percent of its landed value or its processed volume. While individuals qualifying for TAGS under these criteria may have worked only in groundfish-related activities, as the available data pertained to establishments and not the individuals, others could qualify who had no attachment to the groundfish (see paragraphs 16.53 to 16.62).
16.33 Although the income support rate under TAGS was six percent lower than under the Northern Cod Adjustment and Recovery Program, the economic environment and several aspects of TAGS encouraged a high participation rate. The continuing decline in groundfish stocks discouraged fishing in the sector, and so it became increasingly difficult for individuals dependent on the groundfish fishery to accumulate enough insurable weeks of work to qualify for unemployment insurance benefits.
16.34 Individuals eligible for the entire duration of TAGS had the choice between a guaranteed income with regular payments over the course of the year, and seasonal employment to which unemployment insurance benefits could be added (or social assistance if they did not have enough weeks of work to qualify for unemployment insurance). Being part of a core group of fishers and fish processing plants and ultimately part of a more stable industry than before, and with a potentially higher rate of income, was an attractive prospect. However, these factors were not taken into account by HRDC and Fisheries and Oceans in forecasting the rate of participation.
16.35 According to an HRDC evaluation study, median income in the first complete year of TAGS (1995) was estimated at $14,721; median annual income in the four years preceding the closure of the fisheries (1988-91) had been $14,668.
16.36 A normal attrition rate determined by the eligibility formula and an annual abandonment rate of 10 percent were used to forecast the cost of income support. It was estimated that only 8,500 participants or 28 percent of the forecast population would remain in TAGS by 1999. According to current data, there are 21,722 participants whose eligibility ends in 1999, or 54.2 percent of the eligible population.
16.37 The abandonment rate took into account those who would leave the program for reasons other than the termination of their eligibility or the selection of an exit option. However, it did not take into account the special circumstances that might create obstacles to labour adjustment. The geographical distribution of unemployment, with especially high rates in small isolated communities, was one of these obstacles. Another was the lack of alternative employment, as stressed by TAGS. At the end of March 1997, the abandonment rate since the start of TAGS was 0.5 percent.
16.38 The capacity reduction measures were expected to lower the number of TAGS participants by 5,400. Aside from the cost of the reduction measures, no other costs related to these participants were forecast. The cost of a one-year delay in capacity reduction was estimated at $85 million in transitional aid and $80,000 per participant who remained eligible for TAGS throughout its duration. Licence buybacks took place only in October 1995 and August 1996, and led to a reduction of 478 groundfish licence holders. Only 333 fishers and crew members took early retirement.
16.39 Complete, reliable data on the target population were not available. The respective impacts of various participation rates and sizes of the eligible population were not analyzed. The main factor emphasized was the additional cost per participant if an assumption proved to be inaccurate. Because of time constraints, alternative strategies were not considered even though it was recognized that the proposed strategy was based on assumptions that might not materialize.
16.40 Exhibit 16.6 shows the changes in funding available for labour adjustment. The present strategy no longer pursues the original HRDC objective of helping participants adjust out of the groundfish sector by preparing them for the labour market. In August 1996, two years after implementation, the strategy changed from active to passive participation.
16.41 In summary, the timetable to develop a strategy of the magnitude intended for TAGS was not long enough. The implementation date was chosen to maintain continuity with the former programs, particularly income support, and not to serve the objective of restructuring the fishing industry. When it came into effect, TAGS was not sufficiently developed for all stakeholders to adhere to its objectives and underlying concepts.
16.42 In contemplating any future initiatives of this magnitude, the government should ensure that departments have enough time to develop strategies that take into account completed analyses and possible options.
Department's response: While HRDC agrees that it is desirable for departments to have adequate time to develop such strategies so that complete analyses can be performed and possible options considered, and would have liked this to have existed for TAGS, the audit report does not note that there was an important urgency to get benefit payments to people who had lost their livelihood. This urgency warranted, in our view, the attempt to meet these objectives, imperfect as it may have been.
16.44 Setting up the systems to issue payments, process applications and assess eligibility were the main concerns of the staff involved in TAGS over the first 12 months. Numerous systems problems arose over the first few months, slowing down operations. There were overpayments and underpayments because of misinterpretations or systems errors. For example, differences in the income reporting periods between unemployment insurance and TAGS, as well as the lack of automatic reconciliation between the two systems, led to inaccuracies in payments.
16.45 In addition to systems that required strong analytical capabilities, there were complex eligibility procedures that were linked to employment in previous years and required an exhaustive database. HRDC had to make considerable efforts to make its systems usable for TAGS. This left little time for efforts directed to labour adjustment out of the industry.
16.46 The Department had planned, since the beginning, to use its Internal Audit Bureau (IAB) and program evaluation group to monitor the implementation of TAGS. The IAB produced a number of reports between October 1994 and May 1996, and their examination gave us a better picture of the nature and seriousness of the difficulties experienced since the April 1994 announcement of the Atlantic groundfish moratorium. These reports contained important observations and recommendations about the operational problems being encountered. Exhibit 16.7 shows some of these observations.
16.47 These reports resulted in some actions, mainly to improve computer systems and review beneficiaries' eligibility. They also highlighted the problems experienced by the regions, which had to adjust to different policies and directives and even had to develop local policies to make up for the lack of general consensus. Consistency of action suffered because of this.
16.48 Without question, the major change the regions had to face was the abandonment of the policy of mandatory active participation by those eligible for assistance. The policy had been aimed at having participants assume responsibility for their situation by encouraging adjustment efforts to increase their chances of finding a job. Financial assistance was tied to active participation on the part of each participant.
16.49 Important regional differences were noted in the application of this policy. The Nova Scotia region, among others, stressed the adjustment program with its participants and strongly encouraged them to join, going so far as to terminate benefits to individuals who refused to comply. Participants could thus receive different treatment, depending on the region where they lived and the local policies in place.
16.50 In November 1995, mandatory active participation of all participants was abandoned and replaced with a prioritization policy, which focussed efforts on the more motivated participants with greater potential for adjustment. Although some counsellors accepted the change, others simply felt betrayed. Counsellors' credibility was at stake - having firmly supported active participation, they now had to change direction. Finally, in August 1996, all adjustment measures were abandoned in order to keep the funds available for income support.
16.51 In summary, many operational difficulties arose during the implementation of TAGS, and HRDC reacted as the situation evolved. Operational constraints changed the way TAGS evolved, sometimes resulting in a re-evaluation of objectives.
16.52 The government should ensure that any future strategy of this magnitude is launched in a systematic way, even if the intervention is temporary.
Department's response: While HRDC agrees that, to the extent possible, any strategy of this magnitude should be launched in a co-ordinated way, the audit report does not note that in this particular case, given the changing circumstances that this Department faced, it made every effort within its control to ensure that this was accomplished.
16.54 Eligibility had two components:
16.56 HRDC had no means of determining whether workers laid off by a designated plant really had an attachment to the groundfish fishery. It was assumed that anyone who had worked in a designated plant was dependent on the groundfish industry, regardless of the actual work done. This gave all workers from these plants access to the program, including individuals processing other species of fish or doing other types of work.
16.57 Fishers were entitled to benefits as long as it had been established that the volume of their groundfish catches and their income from them met TAGS criteria. In Newfoundland, however, Fisheries and Oceans did not keep records of catches for vessels smaller than 35 feet long. The information needed to assess the fisher status of these fishery workers was not readily available and this resulted in a lack of consistency in the handling of applications.
16.58 Fisheries and Oceans was in charge of assessing the nature of the operations of groundfish processing plants and granting them designated plant status according to previously established criteria. The list of designated plants was drawn up as workers applied to TAGS. There was no complete and official listing available at the time we did our audit. Situations were examined on a case-by-case basis, which allowed certain departures from the criteria on the grounds of extenuating circumstances.
16.59 Some plant owners would have preferred not to be given designated plant status for fear of losing their employees, whereas workers called for it so they could be eligible for TAGS. To be eligible, plant workers had to have been laid off by a designated plant, but it was difficult to distinguish between layoffs caused by the groundfish moratorium and the seasonal layoffs that occur widely in the industry. Layoffs were verified against information from records of employment for the referenced years. In examining the employment records of a number of participants, we found that for the past four or five years the majority of them had been laid off every year in the same way and at the same period.
16.60 The eligibility criteria applied by HRDC required an assessment of labour force attachment for each calendar year. The basic documents used for this were records of employment. However, these documents had not been intended to be used for determining the number of insurable weeks per calendar year - they were normally used to establish entitlement to unemployment insurance benefits based on the work history in the 52 weeks of work preceding the layoff. Therefore, in many cases HRDC could not determine from the record of employment the number of insurable weeks for the year in question.
16.61 In summary, implementation of the eligibility criteria entailed several difficulties. The information available for assessing the eligibility of groundfish workers did not always correspond clearly to TAGS eligibility criteria. Therefore, decisions that might have had an impact on applicants' rights to benefits were made on the basis of incomplete information.
16.62 The government should ensure, before they are implemented, that the eligibility criteria set out in any similar strategy are clear, logical and applicable.
Department's response: HRDC agrees that eligibility criteria set out in a strategy should be clear, logical and applicable before being implemented.
16.64 It is now the fourth, and perhaps final, year of TAGS. Eligibility is still a subject of interest, because the funds devoted to income support are directly linked to the duration of eligibility. We examined the current situation to determine whether corrective measures have been taken and whether only eligible individuals are receiving or have received benefits.
16.65 We took regional differences in the management of eligibility into account in selecting a sample of files for audit. We selected a sample of 100 files from the participant population in Newfoundland, Nova Scotia and Prince Edward Island (these regions have already systematically reviewed many of their files). Another sample of 100 files was drawn from the Quebec and New Brunswick population, where corrective measures taken differed. The audit consisted of a review of eligibility criteria (benefit entitlement and duration of eligibility) applied by each of the two participating departments. Exhibit 16.8 shows the results of this audit.
16.66 The errors detected in the application of HRDC's eligibility criteria primarily involved the duration of benefits and resulted in overpayments and underpayments. The duration of eligibility was not assessed in accordance with operational guidelines. Therefore, payments have been or probably will be made to participants whose eligibility for the period in question has not been correctly assessed. The errors detected in the application of DFO's eligibility criteria cast doubts on the eligibility of participants, because their attachment to the fishing industry was not proved. However, the number of errors detected was small.
16.67 The results of our audit of the criteria applied by HRDC confirm the value of the work done by the DARE unit in Newfoundland, Nova Scotia and Prince Edward Island. These regions have substantially improved the quality of their eligibility decisions, while the Quebec and New Brunswick regions still have very high error rates. The different regions have not placed the same emphasis on managing eligibility, and participants have therefore not been treated in the same way from one area to another.
16.68 The guidelines were not clear enough to ensure uniform interpretation of the eligibility criteria. Files had to be reviewed several times, and successive notices were sent to participants informing them of changes to their eligibility periods. After more than three years of operation, there are still many inaccuracies in the files.
16.69 Overpayments detected in these reviews were generally due to administrative errors, and the policy was not to claim reimbursements from beneficiaries. Beneficiaries were even given an eight-week grace period before TAGS payments were terminated.
16.70 Major regional differences in the interpretation or application of eligibility criteria were noted in our review. When a participant works in a designated region affected by severe catch failure, the two worst years can be omitted for the purposes of calculating the duration of eligibility under TAGS. The Lower North Shore region used this provision to calculate its clients' benefits, while other areas also affected by severe catch failure did not.
16.71 Verification of fisher status for plant workers who also fished full time during the first years covered by TAGS was not done in the same manner for all participants. In the Quebec region, contrary to Newfoundland, insurable weeks from those years were accepted as groundfish fishing weeks without confirmation of the participant's fisher status.
16.72 Records of employment were not always used properly for determining the number of insurable weeks to establish duration of eligibility. In some cases, staff made decisions without having obtained all the necessary information. Review of employment records and a better analysis of the facts using other documents that were available might, in many cases, have produced a better assessment of the applications.
16.73 In summary, eligibility review was a problem that was recognized from the start and that required considerable effort from staff and management. The different interpretations and approaches to reviewing information resulted in major differences in the assessment of eligibility. Certainly, participants were not informed in a timely way of their duration of eligibility. It is difficult to conduct thorough counselling sessions in the absence of information pertaining to the duration of participants' entitlement to the Strategy. The difficulties encountered during eligibility assessment required far too much effort, time and energy for the process to be considered efficient.
16.74 The Department should:
16.76 A single indicator, adjustment out of the groundfish fishing industry, was used to measure results. A first target of 25,000 participants was established for the global measurement of TAGS adjustment interventions, whether by HRDC or Fisheries and Oceans. A second target of 7,500 participants was set to measure the results of interventions attributable to HRDC, based on the clientele targeted for active participation having been established at 15,000 participants. When it became necessary to transfer funds to income support from other TAGS adjustment measures, the target of 7,500 participants was reduced to 5,500, and ultimately abandoned.
16.77 The Department used the following method to estimate adjustment on an ongoing basis. The number of participants who had made a successful adjustment was calculated on the basis of data from the TAGS payment system, and included participants who had received less than 25 percent of the benefits payable during a 12-week period. For those participants who had adjusted out as a result of HRDC interventions such as the Employment Bonus, Wage Subsidy, Self-Employment Assistance and Job Opportunities, the adjusted-out figure was discounted by 35 percent. This adjustment was based on past success rates in similar programs achieved in the regions affected by TAGS.
16.78 The reliability of this method has not been established. A participant survey would be needed to determine the confidence level or to review the adjustment factor. The Department recognizes that follow-ups or evaluations are necessary, but there is no plan to conduct any.
16.79 The Department had to evaluate a five-year program that was recognized as having by necessity been developed too quickly. Two types of evaluation had been planned. The first, to be conducted during the program's development and implementation, was to recommend improvements to the program. The Department requested and obtained the appropriate evaluation studies and a first evaluation was completed. The studies for this evaluation dealt with issues that were appropriate and useful for management purposes. The second type of evaluation was to have been conducted once the program had stabilized, and was intended to evaluate the results and effects of the program. However, because of the way TAGS developed, evaluation efforts were abandoned in March 1997. The second type of evaluation will not be done and many questions will remain unanswered.
16.80 Important questions that the second evaluation would have raised included: "Does income support encourage or limit effective adjustment for TAGS clients? To what extent has TAGS contributed to an orderly transition to employment outside the fisheries sector?" With the abandonment of evaluation efforts, there will be no clear answers to these questions. It will not be possible to draw useful lessons for future programs. Information to account for the money spent will not be available, and it will not be possible to determine the extent to which TAGS objectives were achieved. We are concerned that the information gathered in the initial phase and the lessons learned might be lost and the results remain unknown.
16.81 The Government of Canada recently announced that it would make a temporary change to the Employment Insurance Regulations allowing TAGS benefits to be considered as labour force attachment for the purpose of qualifying for employment insurance benefits. It also announced its commitment to undertaking a review of longer-term post-TAGS issues in the fall and to consult with relevant provinces and industry stakeholders.
16.82 The Department should continue its efforts to evaluate the TAGS labour adjustment component and report on the results, thus contributing to an enlightened discussion of all programs of this type that may be considered in the future.
Department's response: HRDC agrees in principle that efforts to evaluate the TAGS labour adjustment component and to report on the results should be continued. However, as the labour adjustment component of TAGS is no longer available, other than that of income support, any evaluation conducted of TAGS would have to be done as part of HRDC's regular evaluation of programs. The Department has already learned useful lessons from TAGS and will continue to access results through its regular activities.
16.84 Before TAGS came into force, the Treasury Board informed Fisheries and Oceans and Human Resources Development Canada that it was holding them equally responsible for managing TAGS within the financial envelope provided. It mandated HRDC to set up a control system to ensure that costs did not exceed the envelope. HRDC assumed a lead role and devoted time and efforts to ensure that the financial constraint imposed on TAGS was respected.
16.85 The responsibilities of the organizations charged with developing and implementing TAGS were not clearly defined and agreed upon in a memorandum of understanding. There was no formal mechanism for co-ordinating activities. Co-ordinating was important and the need for extensive mechanisms to do so should have been envisaged. Overall, co-ordination was informal. Human Resources Development Canada recognized that TAGS required joint administration on the part of the organizations concerned, and tried to provide co-ordination by inviting its federal partners to participate in its TAGS management team. However, its authority to do so was not recognized and its efforts sometimes irritated its partners.
16.86 While the implementation of the TAGS components generally corresponded to the responsibilities of the participating departments, a number of initiatives were complementary and required co-operation and an exchange of information. Examples are the determination of TAGS eligibility and the identification of a core group of fishers. At the regional level, there were certain memorandums of understanding between HRDC and Fisheries and Oceans for projects or the exchange of information.
16.87 According to the guiding principles approved for it, TAGS was to offer an integrated approach to capacity reduction and the adjustment of individuals and communities affected by the moratorium. It was essential that management and accountability be integrated as well.
16.88 However, there was no integrated strategic plan to identify and schedule the activities of the organizations responsible for implementing TAGS or to determine the performance indicators to be used, monitored and reported on periodically. Although certain activities were conducted jointly, each organization conducted its own audit and evaluation activities and the results were not consolidated.
16.89 Given that co-operation among the four organizations responsible for implementing TAGS was so important to its success, we expected that Parliament would receive integrated information to account for the use of funds. However, no joint report was issued by the four organizations.
16.90 There is information on some TAGS components in the Part III Estimates of Fisheries and Oceans and of Human Resources Development Canada. Both departments also testified several times before the Standing Committee on Fisheries and Oceans on the implementation and progress of TAGS. However, none of this made it possible to determine progress toward the TAGS objective of restructuring the fishing industry to make it economically viable and environmentally sustainable.
16.91 In summary, our review of the accountability framework for TAGS revealed major weaknesses that had an impact on value for money. Great care in planning a strategy of this magnitude was needed to ensure that its objectives were reached. Because a number of stakeholders were involved and their activities were often joint or complementary, the different components needed to be carefully co-ordinated. The forecasts used to distribute program funds among the stakeholders were based on a strategy different from the one ultimately approved. Despite numerous consultations, the stakeholders did not necessarily have the same timetable. The co-ordination framework was inadequate.
16.92 Should another strategy be adopted that involves a number of federal organizations, the government should consider instituting formal measures to ensure accountability for the strategy as a whole.
Department's response: HRDC agrees that should another strategy be adopted that involves a number of federal organizations, formal measures to ensure accountability for the strategy as a whole should be in place. The accountability framework now in place for Employment Insurance Part II reflects HRDC's commitment to this principle.
16.94 At a time of dramatic change in the Atlantic fishing industry, TAGS was designed to carry on the previous efforts to support workers in the industry. The income support and labour adjustment programs supporting TAGS changed continually as the various elements of TAGS fell into place. Uncertainty remains about whether TAGS is primarily an income support program or an industry restructuring program. Although active labour adjustment measures had been designed to support industry restructuring efforts, the co-ordination and scheduling of TAGS activities did not make it possible to maintain them. The abandonment of all labour adjustment measures in August 1996 has left only the income support component still in place.
16.95 The frequent changes to TAGS made it difficult to implement the labour adjustment measures. These changes created considerable uncertainty among participants and stakeholders. The operational guidelines underwent numerous changes and clarifications. Management of eligibility was particularly affected, resulting in many situations where income support was not assigned fairly and equitably to all participants.
16.96 Progress toward the target for labour adjustment will not be measured by HRDC. Although an evaluation aimed at improving the program was carried out, the decision to discontinue the evaluation effort means that important questions will remain unanswered, and it will not be possible to learn all the lessons that might have been drawn from the experience or to account for the results.
16.97 The absence of an appropriate accountability framework for this type of initiative meant that there was no assurance of obtaining value for money. Efforts were directed at income support for individuals affected by the groundfish moratorium; groundfish harvesting capacity was not significantly reduced through TAGS measures. Active labour adjustment measures were halted, and whether they actually contributed to reducing the number of persons dependent on the industry is not known. Excess fishing capacity remains, and poses a major risk to the sustainability of the fishing industry.
16.98 Given that the federal government proposes to review the longer-term issues arising from the elimination of TAGS in May 1998, we urge it to examine carefully the consequences and impacts of the decisions made under TAGS in order to benefit from the valuable lessons that can be learned.
We reviewed the planning and implementation documents describing the different stages in the evolution of TAGS. We examined how HRDC performed its internal audit and evaluation duties, in particular the recent work on TAGS. Participant eligibility and entitlement to benefits were covered by reviewing eligibility criteria applied to a sample of TAGS participant files.
The management of active labour adjustment measures was not audited because, at the time of our audit, they had been discontinued. Our audit did not deal with the use of funds allocated to the Atlantic Canada Opportunities Agency and the Federal Bureau of Regional Development - Quebec.
For information, please contact Louis Lalonde, the responsible auditor.