Message from the Minister of Human Resources and Skills Development

I am pleased to present the 2008-2009 Departmental Performance Report for Human Resources and Skills Development Canada. This year's Report underlines the impact of the global economic downturn on the Canadian economy and provides details on the measures put in place to help Canadian workers and their families.

Our Government is commited to helping Canadians who are out of work get back on their feet and find good jobs. That is why, through Canada's Economic Action Plan, we increased our investment in skills development to assist Canadians, in all regions of the country. We are providing an additional $1.5 billion to provinces and territories through existing agreements to ensure an estimated 150,000 Canadians receive training that will help them develop the skills to find jobs in the new economy. Through, Career Transition Assistance, we will help some 40,000 laid-off long tenured workers upgrade their skills to get a new job.

We're investing in Canadians of all ages and work experiences. That's why we increased our support to older workers by providing an additional $60 million over three years for the Targeted Initiative for Older Workers. We also made a $75 million investment to help newcomers get their credentials recognized faster and improve their integration into the labour market; and invested an additional $100 million over three years in the Aboriginal Skills and Employment Partnership to help Aboriginal Canadians find long-term employment.

We want to help students gain valuable experience and earn money for school. That's why we're helping out Canadian youth by increased funding of $20 million for the Canada Summer Jobs Program and a $15 million grant to the YMCA and YWCA for student work experience. We're also encouraging incentives for workers to complete their apprenticeship training in a Red Seal trade.

What's more is that we made post-secondary education more accessible by making important enhancements to the Canada Student Loans Program which will provide more upfront, non-repayable money to students and repayment assistance measures that are more responsive and fair. The grants alone will benefit over 245,000 students - that's 100,000 student's more than the previous program.

During the past year, we continued to support children, families and vulnerable Canadians seeking to improve their lives. For the third year in a row, we continue to help parents and families through the Universal Child Care Benefit. We are helping eligible people with severe disabilities, their families and others save for their long-term financial security by implementing the Registered Disability Savings Plan. In addition to supporting seniors through programs such as the Canadian Pension Plan, Old Age Security, and the Guaranteed Income Supplement, we helped promote the prevention of elder abuse through the New Horizons for Seniors Program. We also extended funding for the Homelessness Partnership Strategy to help homeless Canadians address their housing needs.

Service Canada plays an important role across the country in helping Canadians access the full range of government programs, services and benefits faster and easier. That's why we made significant efforts and investments to process increasing EI claims in a timely manner. This included improved automation of claim processing, hiring more staff, and increasing our hours of operations, where needed most.

Together, our Department's policies, programs and services are helping Canadians access the tools and supports they need to build a better, more secure and prosperous future for themselves and their families.

_______________________________________________
The Honourable Diane Finley, P.C., M.P.
Minister of Human Resources and Skills Development

Message from the Minister of Labour

Through the Labour Program, our government promotes safe, fair and productive workplaces and cooperative work relations across Canada by developing and implementing policies, programs and services in all sectors of the federal jurisdiction. By providing Canadian employers, workers and unions with the tools and resources they need, we are building a stronger and more competitive country.

The 2008-2009 Departmental Performance Report summarizes our recent efforts, put forth through the Labour Program, and highlights major accomplishments from the past year.

One such accomplishment was the resolution of 96.3% of all collective bargaining disputes without a work stoppage, thanks in large part to our mediation and conciliation services. In addition, our government launched the modernisation of Part III of the Canada Labour Code. The consultation process will allow us to gather the views of businesses, unions and employees regarding existing labour standards. The collected input will inform options for improving and updating the Code.

The design and implementation of the Wage Earner Protection Program (WEPP), which is a national program that reimburses eligible Canadian workers when their employer declares bankruptcy or becomes subject to receivership, was completed in 2008-2009. Through Canada’s Economic Action Plan, our government expanded the original legislation, which covered unpaid wages and vacation pay, to include termination and severance pay. The first payments to Canadians were processed in September 2008.

Promoting and protecting the success of Canadian businesses, the safety of Canadian workplaces and the well-being of Canadian employees are top priorities for our government, especially at this time of global economic difficulty. Through the Labour Program, we will continue to support Canada’s employers and workers and to foster safe workplaces and productive work relations to ensure the success of our economy now and in the future.

___________________________________________________
The Honourable Rona Ambrose, P.C., M.P.
Minister of Labour

Section I
Departmental Overview

1.1 Introduction: Raison d'Être and Responsibilities

This document provides an account of the performance of Human Resources and Skills Development Canada (HRSDC) for the period from April 1, 2008 to March 31, 2009. It reports on the Department's achievements related to the commitments set out in the 2008-2009 Report on Plans and Priorities.

Section I is an overview designed to provide high-level information on the Department including the HRSDC, Service Canada and Labour Program missions. It includes the Program Activity Architecture; a description of the socio-economic environment; the corporate risk profile; a performance summary table; an outline of the contribution of priorities to strategic outcomes, including the Department's human resources and official languages indicators; the Department's expenditure profile; and its voted and statutory items. Section II includes detailed performance results by strategic outcome. Section III provides financial tables, a financial performance overview, information concerning specified purpose accounts, and consolidated financial statements for the Department. Section IV includes organizational information and website references.

Raison d'être

HRSDC's mission is to build a stronger and more competitive Canada, to support Canadians in making choices that help them live productive and rewarding lives, and to improve Canadians' quality of life.

To do this, HRSDC:

• develops policies that make Canada a society in which all Canadians can use their talents, skills and resources to participate in learning, work and their communities;
• creates programs and supports initiatives that help Canadians move through life's transitions — from families with children to seniors, from school to work, from one job to another, from unemployment to employment, from the workforce to retirement; and
• creates better outcomes for Canadians by providing service excellence through Service Canada and other partners.

The mission of the federal Labour Program is to ensure safe, fair, and productive workplaces and cooperative workplace relations, as well as effective international labour and employment standard.

To do this, the Labour Program:

• administers and enforces workplace legislation and regulations, such as health and safety standards; employment standards; and industrial relations under the Canada Labour Code; the Employment Equity Act, which promotes workplace equality by removing the barriers that women, Aboriginal peoples, people with disabilities and visible minorities face on the job and provided fire protection services in federal buildings and on reserves; administers the Government Employees' Compensation Act; and provides oversight of the Wage Earner Protection Program;
• develops innovative policy and program responses to changes in workplaces and employer-employee relations and carries out research and disseminates information and analysis on workplace, industrial relations, and labour law trends; and
• works closely with provincial and territorial governments, unions, employers, and international partners to enhance working conditions and ensure healthy and fair workplaces for all Canadians.

Human Resources and Skills Development Canada's programs and services are designed to achieve results across a broad range of social and labour market outcomes. Five strategic outcomes form the structure for reporting plans, priorities and resources in this report:

Responsibilities

Human Resources and Skills Development Canada is responsible for administering several Government of Canada laws under the following mandates:

• Improve the standard of living and quality of life of all Canadians by promoting a highly skilled and mobile labour force, and an efficient and inclusive labour market. The Minister of Human Resources and Skills Development has overall responsibility for the employment insurance program and the Employment Insurance Act, while the administration of that Act is the responsibility of the Canada Employment Insurance Commission.
• Promote social well-being and security. This includes the administration of the Canada Pension Plan, the Old Age Security Act, the Disability Savings Program and the Universal Child Care Benefit Act.

Furthermore, the Department of Human Resources and Skills Development Act provides for the appointment of a Minister of Labour who is responsible for the Canada Labour Code, the Employment Equity Act and the Government Employees Compensation Act, as well as other legislation on wages and working conditions. The mandate of the Minister of Labour is to promote safe, healthy, fair, stable, cooperative and productive workplaces.

The mandate of Service Canada is to work with federal departments, other orders of government and community service providers to bring services and benefits together in a single service delivery network to better serve Canadians.

The Human Resources and Skills Development Canada portfolio also includes the Policy Research Initiative, which leads horizontal research projects in support of the Government of Canada's medium-term policy agenda and identifies needs and priorities for future policy development

Click here to enlarge

Text description of Figure 1.2 : Department of Human Resources and Social Development - Program Activity Architecture

1.3 Socio-Economic Year in Review

The year 2008-2009 marked a significant shift in the economic conditions that characterized the Canadian economy and labour market. At the beginning of the year, the Canadian economy and labour market were defined by strong job creation, fiscal government surpluses largely due to high commodity prices, and strong domestic demand led by business investment and consumer spending on goods and services. In the summer of 2008, the Canadian economy hit the peak of 16 consecutive years of expanding economic growth. The economic fundamentals were considered strong, the unemployment rate was at its lowest level in 33 years, business and household finances were deemed robust by historical and international standards, and federal, provincial and territorial governments remained in strong fiscal positions.

The economic situation changed in the fall of 2008, with many of Canada's most important sectors shaken by the deep recession that began in the United States and has since spread to the global economy. The collapse of the U.S. housing market devastated exports of lumber and other construction materials, and U.S. household spending on Canadian exports of manufactured goods (most notably automobiles) stagnated. Housing and private investment also fell in 2008-2009 coupled with the decline in exports, spending and consumer goods.

The following gives a brief explanation of the socio-economic context as it pertains to each of the Department's Strategic Outcomes.

Enhanced Canadian productivity and participation through efficient and inclusive labour markets, competitive workplaces, and access to learning

The issues involved in ensuring an efficient labour market in early 2008 were related to slowing productivity and shortages of skilled labour in certain sectors. While productivity and skills shortages continue to remain long-term challenges, they have been overtaken by short-term growing unemployment rates, increased reliance on income support provided through the Employment Insurance (EI) program, and increased vulnerability of at-risk populations.

A huge decline in corporate profits has frozen Canadian business investment and hiring intentions and has resulted in the shedding of hundreds of thousands of jobs, particularly in the wholesale, retail trade, manufacturing and construction sectors. In turn, weak employment prospects have led households to curtail spending. In addition to a sharp drop in capital investment intensions, Canadian businesses cut back on payrolls. Employment dropped sharply at the start of 2009, largely in the construction and manufacturing sectors, and more prudent hiring results in a growing share of part-time employment at the expense of full-time jobs.

The reality of job losses and weak employment prospects has materialized, leading consumers to cut back sharply on spending in late 2008 and early 2009. After reaching a historical low of 5.8% in January 2008, Canada's unemployment rate rose rapidly to reach 8.0% in March 2009.

Canadians who are most at risk under normal economic conditions—such as Aboriginal people, workers without post-secondary education, people with disabilities, youth, students, low-income workers and older workers—can become further marginalized in the current economic climate. For instance, older workers are choosing to delay retirement and remain in the labour market longer, while employers are using early retirement as a tool to save money by reducing current workforce levels. For low-income workers and their families, reduced employment income is making it an even greater challenge to make ends meet. In other cases, workers with long employment histories are finding themselves permanently laid off and in need of transitional assistance or re-training opportunities to pursue alternative careers. Aboriginal people, who have traditionally had higher unemployment rates, are also finding it difficult to enter or remain in the labour market.

In the last quarter of 2008-2009, the Department implemented a broad-based strategy and operational measures to support workload requirements associated with the delivery of Canada's Economic Action Plan (Budget 2009) initiatives (e.g., EI measures, work-sharing arrangements, extension of the Wage Earner Protection Program, and enhanced funding support to provinces and territories for training and skills upgrading programs) while maintaining key performance indicators and service standards for HRSDC, Labour Program and Service Canada core programs during the economic downturn.

As a result of these three factors—rising unemployment rates, increased reliance on income support and vulnerability of at-risk populations—the Department's priorities shifted to a short-term focus that is immediately responsive to the economic downturn so that Canadian workers are able to re-enter the labour market as soon as possible.

Safe, healthy, fair, stable, cooperative, productive workplaces and effective international labour standards

Economic downturns—especially when they are as sudden and deep as the recession that began in October 2008—create significant tensions and uncertainties in the workplace. Employers begin to search for ways to support the survival of their businesses, often turning to layoffs, cost reduction measures and steps to boost efficiency. For their part, employees grow more concerned about the security of their jobs and incomes, as well as with preserving, as much as possible, the benefits provided to them and their families. These responses have the potential to generate heightened tensions between employers and employees, both at the bargaining table and in the workplace. If these tensions are not managed well, there is a significant risk that workplace relations will deteriorate, thereby diminishing the economy's capacity to recover and be well positioned for economic growth and strong work force relations when the recession ends.

The Labour Program rapidly shifted gears as the economic situation began to deteriorate in the fall of 2008. In an effort to avoid work stoppages that might make economic recovery more difficult, emphasis was placed on providing timely and proactive mediation and conciliation services to employers and unions entering into collective bargaining against the backdrop of declining profitability and slackening demand for labour. Resources were directed towards strengthening front line services in view of the fact that economic difficulties typically increase frictions, thereby heightening demand for timely inspections, investigations and adjudications with respect to workplace health and safety, dismissals and terminations. As a result of the Budget Implementation Act 2009 enhancements were made to the Wage Earner Protection Program, which provides support to workers whose employer declares bankruptcy or goes into receivership, to include termination and severance pay, along with the original coverage for unpaid wages and vacation pay. Finally, in view of the global nature of the downturn and the importance of free trade for a prosperous economic future, labour cooperation agreements with new free trade partners were made stronger.

Enhanced income security, access to opportunities, and well-being for individuals, families and communities

Faced with the pressures of global competition, employers have shifted risk to employees. More work is temporary, part-time or contracted out than in the past, and the demands on many regular employees have intensified. More work is in smaller firms and in the service sector, where unionization rates and wages have tended to be lower. In addition, projected demographic trends point to an aging society, which has placed unique pressures on the Income Security System, as well as on families assuming caregiving responsibilities.

Circumstances such as these bring unique pressures for communities, employers and workers. These pressures lead employers to adjust their workforce and task orientation in response to shifting conditions and cause workers to exercise all available options to obtain financial security, including re-training, EI and labour mobility. This is particularly relevant in communities that rely almost exclusively on one or two employers, such as the auto industry.

During this time of economic challenge and uncertainty, both consumers and business have cut spending and are investing less. Going forward, households are likely to remain cautious in their purchase and investment decisions. Reliance on Canada's public pension system has become ever more relevant for Canada's seniors. Ensuring that investments in Canada's pension system are secure is vital to the financial stability of Canada's seniors.

The difference in after-tax income (adjusted for family size and composition) between the top and bottom 20 percent of families in Canada widened during the past decade. While already a cause for concern, the income gap between the richest and poorest segments of society is at risk of growing substantially larger as many middle-income Canadians fall to the lower-income tax brackets as a result of current socio-economic pressures. Income tends to become more polarised in economic downturns. We can therefore expect income to become less evenly distributed as individuals in low-paying or more cyclically sensitive sectors lose their jobs while others remain employed. The recent increases in hourly wage rates suggest that the current recession may already be driving a wedge between employed and unemployed Canadians. The Department recognizes these trends and has ensured that financial assistance and services were provided to low-income families through the National Child Benefit and Canada Social Transfer in an effort to support early childhood development.

Achieve better outcomes for Canadians through service excellence

Through its Service Canada initiative, the Department has always been committed to delivering Government of Canada services with integrity, fairness and respect for personal privacy.

Over the past year, the number of unemployed workers and other people who require access to government services increased substantially, resulting in a growing workload in applications and processing. The global economic downturn increased the number of Canadians at risk of losing employment and facing a reduced standard of living. The result has been unprecedented volumes of EI claims and increased benefit processing workloads. Service Canada received a total of 3.1 million EI claims in 2008-2009, compared to 2.6 million in 2007-2008, a year-over-year increase of 19.3%.

The increase in demand for services was characterized by additional requests for Employment Insurance and labour market information. Consequently, Service Canada engaged in measures to ensure the Department was well-positioned to maintain service excellence to Canadians. Stronger partnerships with the regions, resulted in more effective management of workload and resources for benefit processing and payment. As well, extended hours of service to Call Centres and Service Canada Centers increased access and presence of the Department in rural communities. Human resource strategies, such as hiring additional staff, extended agreements with other federal departments and improved internet services through the citizen-centred service initiative were also implemented.

Demographic trends continue to present unique challenges as they continuously alter Service Canada's client base and demand for its services. In Canada's aging society, an older demographic means a greater number of clients and increased demand for Old Age Security and Canada Pension Plan services.

In keeping with the Department's commitment to sound stewardship of public funds, efforts were made to ensure overall service quality and integrity, which includes emphasizing core service delivery values such as personalization, open communication, security and privacy of personal information.

1.4 Corporate Risk Analysis

Over the past year, the Department continued to strengthen its risk management practices to manage its corporate risks effectively and support the implementation of integrated risk management across the organization. A risk management internal audit was conducted in 2008 and tabled at the Departmental Audit Committee along with the departmental management action plan to respond to the audit recommendations.

The Department has also established a process that requires periodic senior management discussions to review and assess corporate risks and the overall adequacy of the way these identified risks are managed. The new Portfolio Corporate Services Committee includes risk management roles and responsibilities in its terms of reference. Risk management arrangements were presented and discussed at the Departmental Audit Committee. Furthermore, HRSDC launched a risk management intranet site and published a handbook on integrated risk management to facilitate a more standard and consistent approach to risk management across the Department.

The Department identified four corporate risks with respect to achieving its objectives and commitments for 2008-2009. A summary of the key risks and the progress achieved in implementing their respective mitigation strategies is outlined below. The four areas identified by the Department as being susceptible to risks are:

• enhancing delivery of responsive policies, programs and services;
• managing existing information technology infrastructure;
• exercising appropriate governance and oversight; and
• recruiting and retaining a skilled and knowledgeable workforce.

Enhancing Delivery of Responsive Policies, Programs and Services

The growing and diverse range of funding instruments and service delivery partners poses a risk to the Department's ability to enhance delivery of responsive policies, programs and services to Canadians.

In 2008, the Department streamlined its governance structure to better reflect the relationships within the organization and thereby support its focus on excellence in policy development, program policy and design, service delivery, enabling services, and management. It also streamlined its management of grants and contributions and continued to implement the departmental action plan created in response to the Blue Ribbon Panel on Grants and Contributions. Further, the Department has focused its efforts on improving the overall quality of the Departmental Performance Measurement Framework by ensuring that it is both comprehensive in breadth and depth, and of high quality and relevance. In this respect, each branch has developed its own performance measurement framework, including logic model, performance indicators and data collection strategies. A department-wide Performance Measurement Roundtable has been established to improve the overall coordination and management of performance measurement and reporting activities throughout the Department. Finally, improvements have been made to multi-lateral and bi-lateral management structures, in the implementation of Labour Market Development Agreements (LMDAs) and Labour Market Agreements (LMAs), by way of regular bilateral discussions with provinces and territories.

Managing Existing Information Technology Infrastructure

Given the important role that information technology plays in supporting departmental priorities, the Department must manage the risk that the existing information technology infrastructure and recovery capability might not be adequate to ensure continued quality front-line service delivery to all Canadians.

Work continued on the Department's Information Technology Strategy to ensure that its information technology (IT) is fully aligned with departmental strategies and priorities, to provide additional insight into the current state of IT services, and to explore opportunities to innovate by leveraging knowledge and using technology more effectively across the organization. The Department developed a renewal road map to facilitate modernization of its technology infrastructure and associated software applications.

Exercising Appropriate Governance and Oversight

At risk is the Department's capacity to exercise appropriate governance and oversight of financial resources within an environment of transformation.

The Department completed its long-term capital plan and implemented a more thorough investment process; this included the establishment of an Investment Review Board. The Board has been operating since October 2008 and is responsible for overseeing the development of the investment plan, monitoring its implementation and providing executive oversight of the investment management process. The plan allows the organization to meet its obligations and responsibilities with respect to effective asset management responsibilities. The Department also adopted a Stage-Gate process for investment review. This process guides investment decisions, particularly in the area of information technology. Furthermore, the implementation of a more collaborative approach to planning—one that integrates business priorities, human resources plans and budgets—provides the foundation for assessing and understanding departmental financial needs.

Recruiting and Retaining a Skilled and Knowledgeable Workforce

There is a risk that the Department may not be able to ensure sustainable leadership and a skilled and knowledgeable workforce that would enable it to deliver on its mandate successfully and meet Canadians' expectations for accountable and responsive programs and services.

In line with the Clerk of the Privy Council's call to action to strive for excellence through public service renewal, the Department created the Renewal Secretariat in 2008-2009. The mandate of the Secretariat is to ensure that public service renewal is prevalent throughout the organization by engaging employees across the country. To address labour and skills shortages, the Department continues to use staffing flexibilities and strategies to align human resources with the current and future needs of the Department; this includes increased use of collective staffing and targeted recruitment, as well as efforts focused on attracting new talent. Senior management undertook a series of executive talent management reviews during 2008-2009, with follow-up actions and corresponding strategies to be presented at the 2009-2010 mid-year review.

The Department has continued to implement its Service Management Structural Model, a set of standardized organizational structures and work descriptions applied to the service management arm of Service Canada. On completion, the model reduced the number of work descriptions in the regions from approximately 3,500 to fewer than 30. The model sets a foundation on which increasingly transparent and efficient human resource management practices will be built. Such practices include standardized performance expectations, the delineation of career paths and competency certification. As a result, employees will know what is expected of them today, what opportunities will be available tomorrow, and which competencies they must develop to prepare for those opportunities.

The Department is also continuing to develop a more integrated corporate approach to risk management in order to manage ongoing strategic and operational risks effectively in delivering programs and services.

1.5 Performance Summary Tables

Total financial and human resources

Human Resources and Skills Development Canada's vision is to build a stronger and more competitive Canada, to support Canadians in making choices that help them live productive and rewarding lives, and to improve Canadians' quality of life. The tables below provide the organization's total financial and human resources.

Financial information associated with strategic outcomes, performance indicators and 2008-2009 performance

The tables below provide information related to strategic outcomes, along with associated performance indicators and 2008-2009 performance. Financial information related to the implementation of these strategic outcomes is included.

1.6 Contribution of Priorities to Strategic Outcomes

1.7 2008-2009 Expenditure Profile

Human Resources and Skills Development Canada (HRSDC) expenditures on programs and services total more than $88 billion, of which $83 billion, or 94%, directly benefits Canadians through Employment Insurance (EI), the Canada Pension Plan (CPP), Old Age Security (OAS), Universal Child Care Benefit, loans disbursed under the Canada Student Financial Assistance Act and other statutory transfer payment programs. Departmental expenditures were $1.6 billion in voted grants and contributions; $36.9 billion in statutory grants and contributions; and $2.1 billion for Employment Insurance Part II.

Consolidated Total:    $88,264.2M

Click here to enlarge

Spending Trend

The figure below illustrates Human Resources and Skills Development Canada trend from 2006-2007 to 2008-2009. For the 2008-2009 fiscal year, Human Resources and Skills Development Canada spent $88.3 billion to meet the expected results of its program activities.

The 2006-2007 to 2008-2009 total authorized spending includes all Parliamentary appropriation and revenue sources, Main Estimates, Supplementary Estimates. The 2006-2007 to 2008-2009 planned spending corresponds to the forecasted planned spending presented in Report on Plans and Priorities from each respective year.

From 2006-2007 to 2007-2008, the increase in the actual and authorized spending is mainly attributable to a one time payment of $1.9 billion for the implementation of the Indian Residential Schools Settlement Agreement for 2007-2008 as well as an increase in statutory payments such as Old Age Security benefit payments of $1.7 billion and Canada Pension Plan costs of $1.4 billion.

From 2007-2008 to 2008-2009, the increase in the actual and authorized spending is mainly due to an increase of $2.0 billion in Employment Insurance costs, $1.6 billion for Canada Pension Plan costs and $1.4 billion for Old Age Security benefit payments.

For the planned spending, the increase from one year to the other is mostly explained by changes in forecasted statutory expenditures such as Canada Pension Plan benefits and Old Age Security benefit payments.

1.8 Voted and Statutory Items