Opening Statement to the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities

Human Resources Development Canada and the Canada Employment Insurance Commission — Measuring and Reporting the Performance of the Employment Insurance Income Benefits Program
(Chapter 7 - November 2003 Report of the Auditor General)

Other Audit Observations — The Surplus in the Employment Insurance Account
(Chapter 10 - November 2003 Report of the Auditor General)

Sheila Fraser, FCA
Auditor General of Canada

Madam Chair, thank you for this opportunity to discuss our audit chapter on the measurement and reporting of the performance of the Employment Income Benefits Program and our audit observation on the surplus in the Employment Insurance Account. With me today are Yves Genest and Suzanne Therrien, who were responsible for this audit work.

Over the past 60 years, the EI Income Benefits Program has been the main income security program for working Canadians. The principal objective of the program is to provide temporary income support to insured Canadians who involuntarily lose their jobs. Over the years, the program has evolved, recognizing that workers face other employment risks related to childbirth, parenting, and illness.

In 2001, 15.1 million Canadians contributed to the program and 2.4 million received benefits. In 2002-03, the Employment Insurance Income Benefits Program provided $12.7 billion in benefit payments to Canadians for temporary replacement of income.

In Chapter 7, we examined how Human Resources Development Canada (HRDC) monitors the performance of the EI Income Benefits Program and measures its effectiveness. We noted that overall, HRDC puts considerable effort into measuring the performance of the program and has a good deal of information with which to manage it. However, we also noted that

• in many cases, the program falls short of its performance targets;
• performance of key aspects of service varies considerably among regions;
• some aspects of performance are not measured or are not measured well; and
• reports to Parliament do not provide a complete picture of how well the EI Income Benefits program is serving Canadians.

The available performance information tells a mixed story. In 2002-03, over 95 percent of total payments to claimants were correct, and a 2001 opinion survey showed that a majority of respondents were generally satisfied with the service they received.

However, we noted that service in some regions was significantly and chronically below performance targets. For example, the national target for speed of first payment is to make 75 percent of payments within 28 days. It was not met at the national level. Performance among regions varied in 2002-03 from 44 percent in Alberta to 77 percent in New Brunswick. The numerous efforts to improve performance in meeting service targets have made only a small difference.

We found that some key performance measures need to be improved. For example, the key measure for call centres does not give the whole picture of access to this service. In 2002-03, it did not take into account that 65 percent of calls to speak to a service representative got a busy signal.

Madam Chair, we also looked at whether the Canada Employment Insurance Commission and HRDC were properly carrying out their responsibility for monitoring, assessing, and reporting on the performance of the EI Income Benefits program.

We identified reporting issues that still need to be addressed, even though Parliament has been provided with more information on the EI Income Benefits program than is required of most programs. The reporting of evaluation results is often selective. In addition, savings as a result of the 1996 changes to the Act have not been clearly reported. Nor have reports to Parliament described other important issues, such as the uneven service across the country in delivering the program and what HRDC plans to do about it.

I am pleased to note that the Department and the EI Commission have accepted all of our recommendations.

The Committee may wish to ask Human Resources and Skills Development Canada and the Canadian Employment Insurance Commission to provide an action plan and a timetable to address these recommendations and to submit periodic progress reports.

Madam Chair, in Chapter 10, I draw Parliament's attention to the surplus in the Employment Insurance Account. This is the fifth year that we have done so. The surplus reached $44 billion by March 2003 and continues to grow.

The current surplus is approaching three times the maximum reserve that the Chief Actuary of Human Resources Development Canada considered sufficient in 2001. In our view, Parliament did not intend for the Employment Insurance Account to accumulate a surplus beyond what could reasonably be spent on the Employment Insurance program. Hence, in our opinion, the government has not observed the intent of the Employment Insurance Act.

The Committee may wish to ask the Departments of Finance and Human Resources and Skills Development Canada when and how they plan to take the necessary steps to resolve this long-standing issue.

Madam Chair, that concludes my opening statement and we would be pleased to answer your Committee's questions.