4 November 1998
L. Denis Desautels, FCA
Auditor General Of Canada
Thank you, Madam Chair. I am pleased to have this opportunity to appear before the Committee to discuss Chapter 16 of my September 1998 Report, Management of the Social Insurance Number.
In Chapter 16, we point out that the Social Insurance Number (or SIN) has become the gateway to a multitude of federal and provincial programs. The SIN is used to identify and gather information on taxpayers and social program recipients, to verify entitlement to certain types of pensions and benefits, and to match and exchange data among programs.
The SIN was originally intended for use as a file number for Unemployment Insurance, Canada Pension Plan and Quebec Pension Plan clients. Today, over 20 federal statutes, regulations and programs authorize the use of the SIN. Its use has also expanded to provincial social programs and to the private sector.
Roles and responsibilities with regard to the SIN are shared among various federal departments and agencies. Human Resources Development Canada issues SINs, maintains the Social Insurance Register and investigates suspected abuse. The Treasury Board is responsible for the policy and guidelines that govern the collection and use of the SIN. The Office of the Privacy Commissioner investigates complaints about the SIN. The Department of Justice responds to general inquiries from the public on the private sector’s use of the SIN.
The Social Insurance Register is managed in Bathurst, New Brunswick. About one million cards are issued each year. Annual operating costs are $7 million, $2 million of which is collected from applicants for replacement cards. The remaining $5 million in costs is divided among the main users of the SIN - Revenue Canada, the Canada Pension Plan, the Quebec Pension Plan and the Employment Insurance Account.
Integrity of the Social Insurance Register
The audit uncovered a number of weaknesses in management of the Social Insurance Number. Birth and death information on SIN holders is not always complete and accurate. For example, there are nearly four million more Social Insurance Numbers than there are Canadians aged 20 or older. Moreover, 11.8 million numbers have not been certified; valid SIN cards are held by thousands of individuals with no legal status in Canada.
Since the mid-1990s, the branch responsible for the Social Insurance Register has been receiving information from Revenue Canada, Citizenship and Immigration Canada, the Canada Pension Plan and the Régie de l’assurance-maladie du Québec. However, these sources of information are not being fully exploited and more could be done to obtain information from vital statistics bureaus in the provinces.
The weaknesses found are detrimental to the proper management of social programs. They may lead to errors, abuse and fraud and, collectively, the impact could be sizable. There is an urgent need for action in order to protect public funds and taxpayers.
The Minister of Human Resources Development, the Honourable Pierre S. Pettigrew, has accepted our recommendations. He has stated that his department has already begun improving the integrity of the information contained in the Register, and that the department is working with provincial governments to improve the situation.
Roles, objectives and uses of the Social Insurance Number
Another reason I am concerned about the widespread use of the Social Insurance Number is because it undermines privacy protection.
I believe it is time to review the current roles, objectives and uses of the Social Insurance Number. The government should determine what it wants to do with the Social Insurance Number and, at the same time, study other possible options. I also believe it is essential that Parliament play a major role in debating these issues and in finding a satisfactory solution.
The Committee may wish to consider recommending that Parliament clarify - through the appropriate committees - the roles, objectives and uses of the Social Insurance Number. Parliamentarians could then debate the other possible options, and clearly set out the appropriate levels of integrity of the Social Insurance Register and of privacy protection.
Madam Chair, that concludes my remarks. We would be pleased to answer questions from members of the Committee.