LOCATION – Winnipeg, Manitoba
CHAIRPERSON – Mr. Reg Helwer (Brandon West)
VICE-CHAIRPERSON – Mr. Matt Wiebe (Concordia)
ATTENDANCE – 11 QUORUM – 6
Members of the Committee present:
Hon. Mr. Gerrard
Messrs. Friesen, Helwer, Ms. Howard, Messrs. Jha, Maloway, Marcelino, Pedersen, Schuler, Struthers, Wiebe
Substitutions:
Ms. Howard for Hon. Mr. Dewar
Mr. Struthers for Ms. Lathlin
APPEARING:
Mr. Norm Ricard, Auditor General
WITNESSES:
Hon. Kevin Chief, Minister of Jobs and the Economy
Mr. Hugh Eliasson, Deputy Minister of Jobs and the Economy
MATTERS UNDER CONSIDERATION:
Auditor General's Report–Annual Report to the Legislature, dated January 2013
Chapter 2 – Citizen Concerns–"Part 3–Employment and Income Assistance Program"
Auditor General's Report – Follow-Up of Previously Issued Recommendations, dated May 2014
Section 6 – Employment and Income Assistance Program
Section 14 – Economic Development: Loans and Investments under The Development Corporation Act
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Mr. Chairperson: Good afternoon. Will the Standing Committee on Public Accounts please come to order.
This meeting has been called to consider the following reports: Auditor General's Report–Annual Report to the Legislature, dated January 2013, chapter 2–Citizen concerns–"Part 3–Employment and Income Assistance Program"; Auditor General's Report–Follow-Up of Previously Issued Recommendations, dated May 2014, section 6–economic and income assistance program, section 14–Economic development: Loans and investments under The Development Corporation Act.
Committee Substitutions
Mr. Chairperson: For the committee's information, pursuant to our rule 85(2), I would like to note the following substitutions for this afternoon's meeting: Ms. Howard for the Honourable Mr. Dewar; Mr. Struthers for Ms. Lathlin.
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Mr. Chairperson: I'd also like to bring the committee's attention to a new page we have from the 2015-2016 year, Shivani Hunter.
Welcome.
Are there any suggestions from the committee as to how long we should sit this afternoon?
Mr. Blaine Pedersen (Midland): Mr. Chair, I would–normally we sit for two hours and then reassess. So let's just say two hours and then we'll reassess. If we're done before, that's good. If not, we'll reassess at 4 o'clock.
Mr. Chairperson: Is that the will of committee? [Agreed]
So are there any suggestions as to the order in which we should consider the reports?
Mr. Cameron Friesen (Morden-Winkler): I would recommend that we consider the reports in the manner that they're printed.
Mr. Chairperson: Is that the will of committee? [Agreed]
Prior to dealing with this afternoon's business, I'd like to inform those who are new to this committee of the process that is undertaken with regards to outstanding questions. At the end of every meeting, the research officer reviews the Hansard for any outstanding questions that the witness commits to provide an answer and will draft a questions‑pending-response document to send to the deputy minister. Upon receipt of the answers to those questions, the research officer then forwards the responses to every PAC member and to every other member recorded as attending that meeting. At the next PAC meeting, the Chair tables the responses for the record.
Therefore, I am pleased to table the responses provided by the Deputy Minister of Agriculture, Food and Rural Development and the Deputy Minister of Health to the–to all the questions pending responses from the July 8th, 2015, meeting. These responses were previously forwarded to all the members of this committee by the research officer.
So we have the minister and the deputy minister at the table.
And does the Auditor General wish to make any opening statements?
Mr. Norm Ricard (Auditor General): Yes, Mr. Chair, I do. I have opening comments. I'd first like to introduce the staff that are with me here today. With me to my right is Sandra Cohen. She is an assistant auditor general responsible for value-for-money audits. And behind me is James Wright, who is an audit principal in our investigations area.
Mr. Chair, concerns are brought to our attention throughout the year by members of the public. For those concerns that are within our mandate, we conduct preliminary assessments to determine which ones we will pursue further by conducting limited‑scope audit procedures. Section 3 of the citizens concern chapter from our January 2013 report discusses two concerns that we received about the Employment and Income Assistance Program. For those–for these two concerns, we conducted limited-scope audit procedures, and in both instances we are satisfied that the program took appropriate actions.
Since 2011, we have been following up on the implementation status of the recommendations included in a report within a 12-to-18-month–within 12 to 18 months of the report being issued, and annually thereafter for two more years. Today's agenda includes two sections from our May 2014 follow-up report. The recommendations in these two sections are from audit reports issued in 2008 and 2010 when our follow-up process required that we wait at least three years before initiating a follow-up.
So section 16–section 6 of my office's–is my office's third and final follow-up report for the 14 recommendations included in our December 2008 report on the Employment and Income Assistance Program. In this section we note that two recommendations remained in progress as at June 30th, 2013.
Section 14 is my office's second follow-up report on the 14 recommendations included in our December 2010 audit report entitled Economic Development: Loans and investments under The Development Corporation Act. In this section we note that four recommendations remained in progress as at June 30th, 2013.
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Although not included in today's agenda, our May 2015 follow-up report includes my office's final–follow-up report on these 14 recommendations. That follow-up report indicates that all recommendations are now considered cleared.
Thank you, Mr. Chair.
Mr. Chairperson: Thank you, Mr. Ricard.
Welcome, Mr. Eliasson. Do you have an opening statement?
Mr. Hugh Eliasson (Deputy Minister of Jobs and the Economy): I have an opening statement for each of the two follow-up reports that we'll be considering later. So perhaps I could make an opening statement before each of those, and I don't have any opening statement for the citizens' concerns.
Mr. Chairperson: Okay. Thank you, sir.
Can you introduce some of the staff that you brought with you though, Mr. Eliasson?
Mr. Eliasson: Yes, for–Jan Forster is assistant deputy minister responsible for the EIA program in Jobs and the Economy. Dave Fisher is with the EIA program in Jobs and the Economy. Michelle Dubik is with Family Services and has responsibility for the staff that deliver the program through Family Services. And then Jim Kilgour and Jeff Hodge are from the financial services area of Jobs and the Economy, and they're here in regard to the Economic Development report follow-up.
Mr. Chairperson: Thank you. Now before we get into questions, I would like to remind members that questions of an administrative nature are placed to the deputy minister and that policy questions will not be entertained and are better left for another forum. However, is–if there is a question that borders on policy and the minister would like to answer that question or the deputy minister wants to defer it to the minister to respond to, that is something that we would consider.
The floor is now open for questions.
Mr. Pedersen: I'll start out by asking what kind of support is provided to the EIA recipients.
Mr. Eliasson: The major objectives of the employment and income assistant program are to provide income assistance to Manitobans in need and to assist Manitobans in regaining their financial independence by helping them to make the transition from income assistance to work. Therefore, the department provides income assistance to meet the cost of basic necessities such as food, shelter and health needs.
The department also provides employment and training supports to people who are able to work. In addition, the department will refer participants to agencies such as SEED Winnipeg or Community Financial Counselling Services if they would benefit from financial counselling or financial literacy training.
For people who own their own home, EIA can provide funds for mortgage payments, property taxes, home insurance and utilities. In certain circumstances, EIA may pay property tax arrears to prevent the participant from losing their home.
Mr. Pedersen: In–when you spoke about homeowners and EIA covering mortgages, is it not the–I guess it's the Manitoba government, then, take ownership of the house if they're actually making the mortgage payments?
Mr. Chairperson: Mr. Eliasson, and, if you wish to have staff sit with you at the table, you're welcome to do so as well, sir.
Mr. Eliasson: Well, they'll be back frequently.
The–when the EIA program covers mortgage payments, the Province takes a lien on the property in the amount of the mortgage payments, and then when the property is disposed of then those monies are repaid to the Province.
Mr. Pedersen: And in determining EIA–fortunately, I haven't experienced that so–you have to declare all your assets and that determines whether you are eligible then, or what's the criteria if you have assets in terms of being eligible to collect EIA?
Mr. Eliasson: Individuals are–can have up to $4,000 in liquid assets and not have that affect their EIA payment, and then there's a fairly complex system of dealing with assets beyond that amount. But that's the basic answer to the question.
Mr. Pedersen: Could you also clarify–I believe, and I'm sure you'll be able to clarify this: EIA, people who are collecting EIA are also eligible to earn some money, but there is a threshold there. Do you–can you tell us what the threshold is? [interjection]
Mr. Chairperson: Mr. Eliasson. I'm sorry I have to call you by name so that the Hansard will show who is speaking at that particular time because there's not a video recording, just an auditory.
Mr. Eliasson: Thank goodness, there's not a video recording.
The basic threshold is $200 of earned income per month without affecting their EIA benefit, and then 30 per cent of the income beyond that is reduced from their EIA payment.
Mr. Pedersen: And has that $200 threshold changed in recent time, or is it indexed to inflation, such as cost-of-living index?
Mr. Eliasson: It's not indexed. It's been at that level for a number of years. We could–Mr. Fisher has an encyclopedic knowledge of the EIA program. But the length of time that's been in place doesn't come to mind immediately, but we could get that answer if it was of interest.
Mr. Pedersen: So I'll push the Chairman's limits here. The–
Mr. Chairperson: Is this a warning?
Mr. Pedersen: Minimum wage is to go to $11; I believe it's Thursday, October 1st. If you're not indexing this threshold, does it–then EIA recipients are not able to earn any–they'll probably have to–if they're actually working on minimum wage, they would actually be able to work less hours, then, and before they reach the threshold. Is that–am I correct in that?
Mr. Eliasson: It's always to an EIA recipient's benefit to earn money. So, after they surpass the $200 threshold, they still get to retain a significant amount, and there are transition programs in place that really ease the movement from EIA into a situation where they're fully dependent on their employment earnings, and there isn't a point on that continuum when they're worse off not working.
Mr. Pedersen: So are recipients of EIA made aware of the guidelines? If you are a–whether you're a first‑time applicant to EIA or whether you've been applying or been a recipient in–for the last number of years even, how available are the guidelines? Because you talk about thresholds, you talk about different things that in–eligibility criteria, how are these guidelines made known to recipients?
Mr. Eliasson: Well, the guidelines are all published. Recipients have access to a caseworker, who are intimately familiar with the nuances of the program and can provide advice. In a recent initiative that we've undertaken in the last two years, I would say, two and a half years, we've had a particular program to run information sessions targeted at single-parent families where the system is even more complex with the federal child-care benefits, et cetera, and we've had some very innovative approaches to make the availability of information sessions known to individuals. We get a pretty good turnout when we run those sessions within the various communities. And that's an opportunity to take people through the process of all of the things that change as they make their way through EIA into training opportunities and subsequently sustainable employment, and they have experts available at those sessions to provide answers to any question that individuals have.
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Mr. Pedersen: You mention the child-care benefit, which is–comes from the federal government. Does that–if a parent or parents are receiving child-care benefit, does that count against the $200 threshold?
Mr. Eliasson: No.
Mr. Friesen: The Auditor General's explanation with respect to this issue talks about–well, I guess, Auditor General indicates that in this particular instance, they had confidence that there had been no, I guess, common-law relationship, as had been suggested. But I noticed that in the explanation provided, it makes reference to the EIA investigations unit, and I just wondered if you might tell us how many individuals would there be working in EIA investigations at the current time.
Mr. Eliasson: I think the unit currently consists of 14 people, which is about two and a half more, 2.5 full-time equivalents more, than when the original audit was taken–undertaken.
Mr. Friesen: And could the deputy minister just describe what is their essential role and what are the areas into which they conduct activities?
Mr. Eliasson: They have a responsibility to do an investigation of applications at intake if there are reasons that would create concern about that application. So that investigation occurs prior to a person being enrolled in employment and income assistance. And then, if there are complaints or reports from third parties that they believe somebody is not meeting the qualifications or continuing to meet the requirements to be in receipt of EIA, then they will look into those circumstances as well.
Mr. Friesen: In addition to those functions, does the EIA investigations also conduct spot audits, and if so, what percentage of the total files would they target to do spot audits or–there's probably a terminology that you use within the department for that kind of thing. Unannounced, but just for the purposes of ensuring compliance.
Mr. Eliasson: There are quality assurance staff within the Department of Family Services who would conduct what you would call spot audits. But that's a separate function from the investigation staff.
Hon. Jon Gerrard (River Heights): Just first of all, clarification on one of the points that was brought up earlier. If somebody's on income assistance and they earn over $200–let's say that somebody earns $300–you were making a point that some of that money is clawed back. Is it 30 per cent of that $100, or is it 70 per cent?
Mr. Eliasson: So individuals keep whatever money they earn. But a calculation is made that takes into account the $200 plus $30, in your case, in your example. And then that amount would be used to calculate a reduction to employment and income assistance.
Mr. Gerrard: So if the amount was $100 over the $200 limit, so we're talking about $100 of income above $200, the individual would keep how much of that $100?
Mr. Eliasson: In that example, their benefit would be reduced by $70, but they would keep the $300 that they earned. So they would have their EIA–their normal EIA payment, the $300 that they earned, and then $70 would be reduced from their EIA payment.
Mr. Gerrard: Thank you for the clarification.
In the original 2008 report, the department said that the department, and I quote: "The Department will develop formal criteria and internal processes for submitting recommendations to government for consideration during the development of the budget."
Can you tell us what the criteria are–the formal criteria, and what formal process is that was developed?
Mr. Eliasson: Okay. We're jumping ahead from–
Mr. Chairperson: Is this better in the later chapter perhaps, Dr. Gerrard, or–
Mr. Gerrard: Okay. It can wait, if you like.
Mr. Chairperson: We're trying to keep them separate, so we can just deal with this one and then move on. So we'll hold on on that question until the second–next chapter.
Mr. Friesen: Just one follow-up question with respect to EIA investigations. I was wondering, when it comes to third-party complaints where someone suspects there might be an abuse of the program, how is the public notified of how to contact the EI investigations, or can they simply dial in to the main line and they're directed?
Mr. Eliasson: There's a general number for Employment and Income Assistance that people can call, and then their call would be directed appropriately.
Mr. Friesen: And does the department also track the data that comes from those calls? In other words, do they report the number of calls received, the number of complaints made, the number of complaints acted on, and the number of, let's say, convictions or actions taken as a result of those third-party complaints?
Mr. Eliasson: When a third-party complaint is received, it's followed-up, and, if there's substance to the complaint, it's directed to the proper area of the program to pursue it. But we don't keep a log of those calls.
Mr. Friesen: Just trying to think about issues of accessibility, and I understand we've got a very large province. When those complaints are made by telephone, is that a toll-free number it can be made on, or is it a Winnipeg-only number?
Mr. Eliasson: There is a 1-800 toll-free number.
Mr. Gerrard: Just a point of clarification: If somebody who is on income assistance enters into a common-law relationship, (a) what is the requirements for reporting that, and (b) what–how will that affect the individual's income from social assistance?
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Mr. Eliasson: So, when there's a significant change in someone's personal circumstance, their responsibility is to notify the program, and entering a common-law relationship or getting married would be that kind of change in circumstance. And then, as a couple, they would–they're free to apply for EIA as a couple. And their application would be evaluated on that basis.
Mr. Gerrard: So the–what would be considered would be the income of the partner relative to the situation. Is that correct?
Mr. Eliasson: Yes.
Mr. Gerrard: How long does the determination take? Would there be a gap in income until the–for a month or several months until that application is processed?
Mr. Eliasson: The individual would continue to receive the existing benefit until the application for the new relationship was processed.
Mr. Chairperson: Any further questions?
Seeing none, does the committee agree that we have completed consideration of chapter 2–Citizen concerns–"Part 3–Employment and Income Assistance Program," of the Auditor General's Report–Annual Report to the Legislature, dated January 2013? [Agreed]
We shall now move on to the Auditor General's Report–Follow-Up of Previously Issued Recommendations, dated May 2014, section 6–Employment and Income Assistance Program.
And, Mr. Eliasson, I believe you have an opening statement to this one.
Mr. Eliasson: I do. Thank you.
Thank you for the opportunity to provide an update on the 2008 report from the Office of the Auditor General regarding Employment and Income Assistance Program. The EIA program has two main objectives: to provide income assistance to Manitobans in need, and to assist Manitobans in regaining their financial independence by helping them make the transition from income assistance to work. The department is committed to investing in Manitobans to ensure everyone has a chance to reach their full potential and can provide for themselves and their families. Many of the recommendations made by the Office of the Auditor General were directed at improving the processes and tools staff use to work together with income assistance participants to ensure they achieve their employment and training goals.
Bringing the EIA program into the Department of Jobs and the Economy provides new opportunities for income assistance recipients to achieve those goals. One of the reasons the EIA program was integrated into Jobs and the Economy was to better align the EIA program with provincial labour market services, including training and employment services, Apprenticeship Manitoba and industry services. This integration was critical to ensure that individuals with barriers to employment are able to receive timely access to employment and training programs and new wraparound supports tailored to individual service needs through a full spectrum of employment and training services. We believe that the integration of EIA and Jobs and the Economy was essential to enhance the capabilities to improve access for income assistance recipients to services and programs that will enhance skills and opportunities for workforce attachment. The department has developed new processes to help participants on their journeys into the labour market that includes a comprehensive evaluation process, essential skills training and enhanced efforts to assist EIA participants to develop career plans, enhance their skills, and gain valuable experience through work opportunities.
The department remains committed to implementing the recommendations made by the Office of the Auditor General. The department is committed to delivering high-quality services, and we are pleased to be working with the OAG to ensure that these services are delivered with integrity.
In brief, the audit confirmed that the department provides income assistance in accordance with relevant legislation, calculates benefit payments in accordance with prescribed rates, and has processes in place to follow up on potential program abuse. The report makes 14 recommendations to enhance procedures, and the department has been actively working to address these recommendations. As noted in the May 2014 Auditor General's report, the department has fully implemented or resolved 12 of the OAG recommendations, and the department believes the remaining two have been addressed as well.
The first eight audit recommendations deal with assessing eligibility for benefits. The department is continually improving the process for assessing and maintaining program eligibility. For example, we have investigation staff responsible for identifying and investigating areas of potential program abuse. Since the release of the Auditor General's report, we have added two and a half investigator positions to support rural and northern reason–regions.
In a more recent development, the department is negotiating a comprehensive information-sharing agreement with the Canada Revenue Agency which will allow EIA to obtain tax information electronically. This will make the process more efficient and increase the number of returns that can be assessed. This increased access to tax information will assist in verifying eligibility for benefits and reduce potential fraud.
The next five recommendations address the department's process for monitoring and referring individuals to employment enhancement activities. It is a priority of the department to assist people to regain their financial independence by helping them make the transition to work. To support this goal, we have developed a new, more comprehensive employability assessment, essential skills training, personal job planning and other supports for individuals.
With respect to the outstanding recommendation regarding the Training and Employment Links System, the Office of the Auditor General recommended the department review this program in order to assess how best to increase the use of this application. The department considers this recommendation to be resolved, as a new, more modern system has replaced the TELS system.
Developed in 2001, TELS provided a centralized online database of training and job order information for use by EIA staff to easily match EIA participants with training and job opportunities. Initially, the department agreed with this recommendation. The department reviewed information in TELS, and in 2009 training agencies were contacted and TELS was updated with current information.
However, since that recommendation was made, EIA was merged with Jobs and the Economy, and a new system which identifies job opportunities throughout the province has been implemented and included in a public-facing site called Find My Job. Further, with recent development of an improved pathway for EIA participants, staff within training and employment services are engaged in supporting individual clients in exploring options for training and employment that are specific to both the individual's skills, abilities and aspirations as well as the labour market in their community. This has rendered the TELS system redundant.
The final section of the audit focuses on the department's processes for setting benefit rates. Each year, new funding has built upon other poverty‑fighting measures, including housing, child care and increases to the minimum wage introduced by the government since 1999. Since 1999, the government has increased the level of income available to participants directly by enhancing rates and indirectly by exempting other sources of income from being considered as a financial resource. Some of the enhancements included eliminating the clawback of the National Child Benefit, exempting the Universal Child Care Benefit, establishing new allowances to ease the transition from welfare to work, expanding eligibility and increasing shelter benefits now called Rent Assist.
In the fall of 2013, the department released a rate review which examined the total income available to EIA recipients. Recommendations from the review focused on targeting increases to portable benefits to facilitate transition from EIA, systematically target specific segments of the caseload for increases, continue reforms to EIA as outlined in the strategy for sustainable employment and priorize the establishment of a separate pension-like program for persons with severe, prolonged disabilities.
The department introduced Rent Assist as a portable benefit for EIA participants and low-income Manitobans renting in the private market. Effective December 2015, increasing maximum Rent Assist benefit levels, EIA and non-EIA shelter benefits for those living in the private–living in private rental market will increase in line with the median market rent, and that'll be a legislative requirement.
As per the audit recommendation, we continue to review the recommendation on rate setting. In terms of other income assistant-related benefits, the Province does consult on issues, including enhanced benefit rates, in the annual budget consultation process, as well as routinely in meetings with stakeholders and community advocates.
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The department continues to consider recommendations on other income assistant benefits and exemption levels during the Estimates process, based on data about the overall income available to people on income assistance and the cost of shelter, goods and services in Manitoba.
The department also shares and reviews, tracks benefit data with the Caledon Institute of Social Policy for the publication of their report on Welfare in Canada, as well as the federal government's Social Assistance Statistical Report.
While there remains important work to do in this area, Manitoba has made significant progress. Once again, the department accepts the findings and recommendations made by the office of the Auditor General. Their report has served as a valuable road map for improvements to the department's accountability measures.
I'm pleased to attempt to answer any questions that you may have.
Mr. Chairperson: Thank you, Mr. Eliasson.
Questions for the deputy minister?
Mr. Friesen: I just want to dive right in and talk about some of the–your comments alluded to enhancements that have been made to assist in fighting poverty. You referred to a number of different measures, and I wanted to ask you questions pertaining to the whole amount that an individual is eligible to receive.
And so a individual has benefits they can receive for a basic rate and shelter rate, and then there are federal amounts that are considered as well, to arrive at the total amount that an individual or a family, an applicant, receives. You made allusion to 'aliniating' the clawback of the National Child Benefit. When it comes to the federal commitment and the federal contributions that are made–so the federal amounts, they're indexed, but the provincial amounts, are they also now indexed to account for the effect of inflation? Are those amounts automatically raising up?
Mr. Eliasson: The existing rate structure is reviewed on an annual basis. There's no automatic indexing to the basic rate structure. The Rent Assist program, which was introduced in Budget 2014 and began rolling out in July of 2014, is now committed to rise to 75 per cent of the median market rental rate, and that last tranche will be implemented in December of 2015, and the legislation requires that that amount is adjusted on an annual basis as the median market rent changes. So it'll always stay at 75 per cent of median market rent as that rate increases.
Mr. Friesen: Yes and, you know, that is understood in terms of those changes coming to the Rent Assist program after–I mean, for a long time there were no changes made there, and this is definitely a step in the right direction. And I–our party has agreed with that from the outset.
When it comes to understanding the whole amount paid to an individual under the program, though, I'm trying to contemplate what happens. So let's say an individual is receiving $1,000, and that's the combined amount of provincial and federal support. And then the federal amount, under one of those categories automatically is adjusted upward. Is the net payment to the individual adjusted upward, or does the department, provincially, actually make an adjustment to reduce its payment to keep that rate of pay fixed to the individual?
Mr. Eliasson: There's two parts to that answer. For the vast majority of federal payments to individuals, those are exempt from any reduction to provincial support as those rates go up. There are two exceptions to that. One is increases to the Canada Pension Plan monthly payments and the Canada Pension Plan for persons with disabilities and, as those amounts go up, the provincial support is adjusted accordingly.
Mr. Friesen: Could you provide a rationale for why those amounts are adjusted accordingly when it comes to those two exceptions?
Mr. Eliasson: The provincial Employment and Income Assistance Program is a support of–it's the floor support that individuals have, and when people are in receipt of more substantive payments like Canada Pension Plan and those rates rise, then the level of provincial support required to ensure people have a basic living income gets adjusted accordingly.
Mr. Friesen: So in how many cases would the deputy minister–say when it comes to let's say the federal disability payment–in how many cases would the department then adjust downward the amount of the benefit that the individual is receiving in order to keep that payment fixed?
Mr. Eliasson: So a large number of people who are in receipt of the Canada Pension Plan–or the Canada Pension Plan for persons with disabilities would have an income level that wouldn't qualify them for EIA in the first place, and in those instances where people are in receipt of both CPP and EIA, in every one of those instances, if CPP increased, then there would be a corresponding decrease in EIA.
Mr. Friesen: So does the department undertake to calculate what the additional expense would be to the bottom line if those adjustments were not made? I guess what I'm getting at is that would be the first part; the second part is, if I refer back to the same language you used in your introduction, talking about building on poverty-fighting measures, does the deputy minister not agree that this would be worthy of contemplation to consider whether declining to clawback that benefit wouldn't amount to an important poverty-fighting measure?
Mr. Eliasson: As part of the annual review of EIA rates, one of the basic elements that's reviewed is the total income that's available to individuals in a variety of circumstances, and to ensure that that total level of income meets basic requirements. So that type of review occurs on a annual basis, and every year there are a myriad of options that are assessed and costed out for consideration to–in terms of adjustments to the program.
Mr. Friesen: You referred in your presentation this afternoon to some of the benefits that have been the result of the integration of EIA and Jobs and the Economy and you talked about the opportunity for individuals to do training, and I have a question pertaining to that. I'd like to know from the deputy minister who makes the decisions on who receiving EIA benefits is eligible to undertake training.
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Mr. Eliasson: One of the changes that occurred with the two departments working in co-operation when the EIA program was transferred to Jobs and the Economy was the introduction of a common assessment tool, so staff of both Jobs and the Economy and the caseworkers in the EIA program are using the same assessment tool to determine an individual's readiness for work or for training; and, based upon that assessment, a referral is then made to an employment counsellor with Jobs and the Economy, and if it's required, individuals are able to access a very in-depth assessment of their skills, their abilities, their education levels. It's almost a week‑long assessment process that identifies where there are gaps that need to be addressed to put them in a position to be successful in pursuing that sustainable employment. A program is then developed on an individualized basis using an essential skills philosophy to equip people with the skills that are necessary for the particular career aspirations that they have. They work with counsellors to ensure that their career aspirations are in line with where demand is in the labour market and then they are supported in securing the training necessary to allow them to be successful in that.
Mr. Friesen: Okay. A couple more questions stemming from that response.
First of all, just because of the new alignment, it's–I'm just looking for a clarification to understand here. So the case workers who are dealing with these individuals, would these case workers–are they under Family Services or are they all under Jobs and the Economy, or can it be a combination of different areas where the actual case workers are employed?
Mr. Eliasson: The case workers are employed in Family Services, and the people with expertise in training opportunities are in Jobs and the Economy.
Mr. Friesen: And the training programs after this adjudication and intake program that the deputy minister refers to, who delivers those training programs? Are those training programs designed–the curriculum, designed and delivered in house? Is it done through contracts with the private sector or is it a combination of the above?
Mr. Eliasson: You know, there's a myriad of organizations in the province that conduct training, so it's anything from–it could be post-secondary institutions, Red River College. It could be organizations like the Manitoba institute for trades and technology. There are a variety of agencies that provide specific forms of training, so generally it's not people within the department that provide the actual training, but they identify the appropriate training resources and help individuals access those training resources.
Mr. Friesen: It's undoubtedly a complex process, but I'm just looking for a little bit of information from the deputy minister as to how do you keep track of all that? How do you track–and do you track the number of individuals who are assessed and who are deemed to be eligible for training? And then does the department, as well, track all the different units or modules that the individual would receive? Is there a maximum that an individual could be eligible for under the program? Just looking for a little bit more content there.
Mr. Eliasson: Yes, individuals are tracked, and sort of there's a system in place to ensure that individuals are taking advantage of the opportunities that are available to them. They're tracked through to obtaining employment and then for a period of about, I think, three months after that to ensure that they aren't having issues in terms of retaining employment. The organizations that provide training to individuals are assessed on an annual basis as part of the contract that the Province has with them to determine that the success rate they have in the individuals that are trained within any particular organization.
Mr. Friesen: Would the deputy minister make a comment just about what kind of access he feels that people living with a disability have to undertake some of these same training programs? Is that the same access provided?
Mr. Eliasson: You know, it's dependent upon the abilities that any individual has, so people have access to exactly the same training opportunities if they're able to take full advantage of them. The–but there are also special measures in place for people who may have difficulty accessing other training opportunities. There's a program called marketAbilities that's specifically designed for people with disabilities in helping them to secure their employment potential.
Mr. Friesen: I'm a little bit familiar with the marketAbilities program as well. I was referring specifically, though, to those other programs that are offered. I know that our party has received complaints in the past from individuals in Manitoba living with disabilities who feel that they have been passed over when it comes to that process by which individuals are selected and chosen to take additional training. Does the deputy minister have a comment on that, on the actual access that individuals living with disabilities have under this program? Is there any merit to the claims that we're hearing?
Mr. Eliasson: I can't comment on any particular case unless I know the specifics of it, but I really would encourage you to refer people to the department. The–this is a large system, and there are instances where people may not have been assessed correctly, and, if those come to our attention and that is the case, then we will do whatever's necessary to rectify that situation. So I would encourage you to bring those cases forward.
Mr. Friesen: Continuing on, there are a number of figures from the original December 2008 report that provide data that show a recipient category and then the benefits that they–or, I guess, cases and participants. Would the deputy minister have information on hand to be able to provide an update with respect to those charts and provide the members of this committee with new figures?
Mr. Eliasson: I can do that, and probably the best way to do that would be to distribute, if that's okay with the Chair.
Mr. Chairperson: Do you have copies, or do we need to make copies?
Mr. Eliasson: No, I have copies with me.
Mr. Chairperson: All right. We'll ask the page to distribute them, please.
Mr. Friesen: I thank the deputy minister for providing that information to us. Could he take this opportunity to kind of walk us through the figures and to note any trends or numbers that he may want, in specific, to point out to us?
Mr. Eliasson: So, when you look at the number of people receiving employment income assistance from the period that was under review in the 2008 audit to today, you'll note that in 2005-6, which was the first year of the information reported in the audit to 2014-15, which is the current time, the number of Manitobans on employment and income assistance has decreased from 5.3 per cent of the population to 5 per cent of the population. So that's a fairly significant proportional decrease in the number of people in receipt of employment and income assistance.
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The absolute number of people receiving employment and income assistance has increased over that time period, and it's a function of sort of a number of things: one is the growth in the provincial population, and it's very much in line with the experience that provinces like British Columbia, Alberta, et cetera, Ontario, are experiencing. So there's been changes in that regard, and then there's changes in the interprovincial rankings of monthly provincial benefits as well. So you can–if you look at the last two boxes on that chart, figure 3 and figure 4, those give the updated numbers on how Manitoba ranks against other provinces, and those figures are effective July 1st, 2015. So they would reflect the rent-assist increase in July of 2014, and the first tranche of rent-assist increase this year, which occurred in July of 2015, and then there'll be a significant change in December of this year when the last tranche of rent-assist increase comes into effect and brings it to 75 per cent of median market rents.
Mr. Friesen: I'm looking at figure 3 and just updating my data here, and I notice that in some categories when it comes to a relative provincial ranking there has been an increase, but specific to the single parent it would appear, unless I’m reading the chart wrong, that we've slipped when it comes to relative provincial ranking from fourth highest to ninth highest. Am I reading that data correctly? That would be number 1, and then second would be, could the deputy minister provide a rationale for that?
Mr. Eliasson: Rates change at different paces in the various provinces, so it's a snapshot at a point in time. As an aside, the definition of a single-parent family changed from the audit period to what we're currently reporting. Now it includes a single parent with one child instead of two, but that definition is constant across the country. But I can give you–when the rent-assist increase comes into play on December 1st, 2015, a single parent with one child, Manitoba will be the third highest in Canada; for two general‑assistance adults with two children, ages 10 and 13, Manitoba will be the third highest; with a single employable adult, Manitoba will be the second highest; and a single person with disability, Manitoba will be the fourth highest.
So the statistics that are reported are what's in place today, and that reflects the rent-assist increase from July of this year, but December 1st it begins the implementation of the full impact of rent assist and that will make a significant difference. So it's a timing differential when you make the comparison, and I'm sure that, you know, every province has their own schedule of changes that will tip that balance from time to time.
Mr. Friesen: And just the–and I thank the deputy minister for that clarification.
If I'm reading down that same figure 3 in that second column, it's exactly that Manitoba shelter-rate number that the deputy minister points out is going to change once the changes are in place and those numbers are being reported.
Can he also clarify–and I'm sorry I probably should know the answer to this–so will that change benefit all recipients of EIA when it comes to the shelter rate, or will that only be for those who are procuring shelter in a private arrangement? Does it also apply to those who are living in government‑supplied housing?
Mr. Eliasson: Rent assist is provided to individuals, both in EIA and low-income individuals in Manitoba, who are in the private rental market. People in Manitoba Housing have an income‑adjusted rent that's being paid in Manitoba Housing, and that provides a measure of subsidy to those individuals.
Mr. Friesen: Okay, looking back at the report, the information we have in front of us, we have seen that total program expenditures and total number of participants within EIA has continued a downward trend. Now I’m just reading the new data that has been supplied by the deputy minister, is that trend continuing with the new data that he has supplied?
Mr. Eliasson: No, as I touched on earlier, the number of people in receipt of Employment and Income Assistance, as a percentage of Manitoba's population, has declined from 5.3 per cent to 5 per cent. And–but then it gets a little complicated, because Manitoba's population has grown, and so the absolute number of people in receipt of income assistance is a higher number but a lower proportion than existed in the period that was included in the audit.
Mr. Friesen: And could the deputy minister also comment, then, on what that trend looks like for persons with disabilities? How does that compare as a subset of the overall number, both in applicants, the number of recipients receiving benefits, and the percentage of population?
Mr. Eliasson: The number of persons with disabilities that were in receipt of EIA in 2007-8 were 22,543, and, in 2014-15, it's 25,031. So there's been an increase of 2,500, roughly, individuals. And I don't have a calculation on the per cent of the population to sort of adjust for population growth in that.
Mr. Friesen: Can the deputy minister make a commitment just to get back to us and give us that information at some point with the percentage increase?
Ms. Jennifer Howard (Fort Rouge): Thank you–thanks very much for your presentation and taking the time to be with us today.
When I'm looking at the numbers, both from the information that was provided previously and the information you've just provided, and I look at the Single-parents line in terms of participants, I note that that has continued to go down since '05-06 and is still going down today. And I know that your department has done quite a bit of work with single parents, changing the approach, maybe changing some of the philosophy. I know from my work in the past, before I was elected, with single parents, that you had your child and then you were on EIA, and that was it, and there wasn't a whole lot of outreach to you, maybe a few programs. And I know that there's been a real sea change in the department's approach to that. I wonder if you could talk some more about what some of the elements of that change have been and what some of the results that you've seen so far.
Mr. Eliasson: When we first started–when the EIA program first moved into Jobs and the Economy, we did a fair bit of work at looking at the composition of the caseload, and people who were in the Single parents category, many of them had–in fact, a large percentage had a previous attachment to the workforce. Forty-six per cent had high school education, and there was ample opportunity, with the right supports, for those individuals to be–equip themselves with the skills to fill a demand in the labour market.
And so that became a real focus of attention, and that's where some of the innovative tools were used to really begin a new conversation and a new form of communication with individuals that really had a motivational aspect to it, recognized–we did focus groups that really identified the very legitimate concerns that people had. I mean, with every focus group we did, the thing that was the most important to single parents was that the EIA program may not have provided the resources to take their kids to the The Forks on the bus, but it did provide the resources to have food on the table and a roof over their heads. And that security was of utmost importance to single parents.
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And so we introduced special information sessions to make sure that people were fully aware that under every circumstance they would be better off working than on–than in receipt of income assistance and that there were substantial supports available to them to help them in that transition so that the–their fear of losing that security was diminished. And it's been effective in getting people excited about the employment prospects.
We've called upon people in our sector councils to talk about the kinds of jobs that are available, the kinds of careers that are available to people, and then there's staff in the department who can help with the pathway to get there, and it's been successful in really helping a large number of people secure employment. And so today, you know, apart from the growth in the population, apart from every other factor, there are fewer cases in the single-parent category than there have been in the last quarter century, at any time in the last quarter century.
Ms. Howard: And I think that is something you should be proud of and I know your staff should be proud of.
And I think where maybe we would agree that we still have a lot of work to do is in the case of people with disabilities. And I think when you talked about people, single parents, one of the things you recognized is these are folks who had some attachment to employment before they became a parent and wanted to find a way back to that employment as quickly as possible but needed some help, needed some support. When it comes to people with disabilities, often these are folks who've never had an attachment to the workforce. Some who have and then became disabled, but for people who were born with disabilities, often that attachment has been spotty.
And so I wonder if you could talk about anything that the department–I know you talked about marketAbilities and other things, but anything that the department is working on, especially since you now have both Jobs and the Economy and EIA, to break some of those barriers that people with disabilities are facing and to break some of those barriers, frankly, with employers, who I don't think always realize that there is a population of vastly underutilized potential that could meet their needs and could help these folks have gainful employment. So anything that you're currently working on or see in the offing that you think can improve people with disabilities getting into the workforce, I'd be interested to hear about.
Mr. Eliasson: So the–our sustainable employment strategy sort of lays out a five-year plan that at the end of those five years will have resulted, I think, in a fairly fundamental overhaul of the entire employment income assistance system. We have focused our attention at the front end of that plan on single-parent families and are meeting with success in that regard. We are also focused on persons with disabilities, and so 7 per cent of the people availing themselves to training opportunities, that whole different pathway that I outlined before, are persons with disabilities.
Now, we've begun a concerted effort working primarily through our sector councils, and we're fortunate in Manitoba. We have 17 sector councils in Manitoba that represent almost–the vast majority of private sector employment in this province. And we're working with those sector councils to in some cases dispel myths about obstacles that may be perceived that don't exist and in other cases to help them become aware of the supports that are available to them to meet accessibility requirements within their workplaces. And there's work currently going on that is looking at revamping sort of the EIA structure for persons with severe disabilities to consider an option of a pension-like support for those individuals.
Mr. Chairperson: Mr. Eliasson, I do have a question for you from your asset appendix A here in your opening remarks that you didn't explicitly talk about. But in here, it says as of January 2009, people on EIA were allowed to keep $4,000 per person, et cetera, cash or assets when–while applying for EIA or receiving benefits.
Now, I do have a particular case where there's a disabled dependent over the age of 18, under the age of 25, that–whose parent passed away, and she was able to receive a final CPP payment. And this–she was subsequently informed that that was–her EIA payments would be reduced going forward and to make allowance for that. That doesn't seem to fly with this policy.
Is there something that should've been done differently in that case?
Mr. Eliasson: Again, if you could provide us with the particulars of that case, and we'll review it to make sure that every benefit that the individual is entitled to is provided to that individual.
Mr. Chairperson: So would she have been eligible for this one-time to a maximum of $4,000? It seems something that doesn't quite work, Mr. Eliasson. And I know you're saying about a particular case here but, in general, it looks like you would allow this to occur, and yet it didn't in this particular case.
Mr. Eliasson: Well, in general, people are not penalized on–for their EIA support if they have liquid assets of $4,000 or less.
Mr. Chairperson: Anything further, Mr. Eliasson? Or I can talk to you after.
Mr. Eliasson: Well, the exception to that would be if it was income-related. So, if a person had received back wages, then those would be resources that were–would be available to them to support their basic needs.
Mr. Chairperson: Okay. All right, well, we can discuss this at another point, then.
Questions?
Mr. Gerrard: In the 2008 report, the department said it was going to develop formal criteria and internal processes for submitting recommendations to government for consideration during the development of the budget.
Can you tell us about the criteria that are used in the formal process that's followed in terms of submitting recommendations for the budget?
Mr. Eliasson: So, in my opening remarks, I reviewed the process that we go through. Each year, new funding has built upon other poverty-fighting measures, including housing, child care, increases to minimum wage, that have been introduced by the government. The government has increased the level of income available to participants directly by enhancing rates and indirectly by exempting other sources of income from being considered as a financial resource. So the Chairman's reference to the $4,000 would fall in that category.
Some of the enhancements have included eliminating the clawback of the National Child Benefit, exempting the Universal Child Care Benefit, establishing new allowances to ease the transition from welfare to work and, most notably, increasing shelter benefits under the Rent Assist program, which is a significant enhancement to the program.
We, in the fall of 2013, released a rate review which was a formal, published report which examined the total income available to EIA participants. And recommendations from the review focused on targeting increases to portable benefits so that it would reduce the welfare wall that would ease the transition for people moving from EIA to employment and systematically target specific segments of the caseload for increases, continue reforms to EIA outlined in the Strategy for Sustainable Employment and priorized the establishment of separate pension-like programs for persons with severe and prolonged disabilities.
And it was through that process that Rent Assist was introduced as a portable benefit for EIA participants and low-income Manitobans starting in July of 2014, with an increase in July of 2015 and moving to the full 75 per cent of median market rent in December of this year, coming December of this year.
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We continue to review the recommendations on rate setting in terms of other income assistance‑related benefits. We consult on issues around the annual budget consultation process, so there's frequent meetings with community advocates and community groups, and we consider to–consider recommendations that emanate from those groups. Enhancement to the housing supports was the strongest and most consistent recommendation from those groups and, as a result of the major rate review, and then based upon data of overall income availability to people on income, on an annual basis, the cost of shelter and goods and services in Manitoba is reviewed.
We, as I noted earlier, do participate in the Caledon Institute of Social Policy for rate comparison across Canada, and so the comparative rates that we circulated today come from that. So we keep track of what's happening in every other province, and, as you noted from the statistics, Manitoba is consistently ranking, sort of, in the upper echelon in that comparison. So those all form the advice that government receives during the Estimates process. So there are particular requests for information on various changes that could be undertaking with the program. Staff do the work to cost those out and inform Treasury Board ministers of the budgetary impact of those, and then, based upon that full array of information, the department's budget and the changes to the program are made on an annual basis as a result of the Estimates process.
So it's really the Estimates process that's a culmination of all of that input of information that allows government to make decisions on where the priorities are in any particular year.
Mr. Gerrard: And for–we have a budget coming up next year. We have a formal process in place. When did that formal process start for the budget coming next year?
Mr. Eliasson: You know, the formal process is almost ongoing throughout the year, but the departments are in the process now of providing Treasury Board with an outlook of where the major funding pressures are, and that's an initial step in the Estimates process.
Mr. Gerrard: Now, when you were talking about, you know, criteria for making decisions, you mentioned two: The Caledon Institute comparison and the recommendations from outside groups.
Are there other criteria which are used in terms of–before the screening recommendations?
Mr. Eliasson: The cost of living factors are reviewed on an annual basis, and I had mentioned in 2013 there was a major rate review report that was provided to the community that examined all aspects of the Employment Income Assistance rate structures.
Mr. Gerrard: In looking at the $4,000 in liquid assets that somebody is allowed to hold, that would mean that there would be a number of individuals who would have to liquidate liquid assets before being eligible.
Just to get clarity on that, liquid assets might include a car or a house or RRSPs. Is that correct? All of those?
Mr. Eliasson: There are certain exemptions beyond the $4,000. Persons with disabilities can maintain assets in a registered disability savings plan and receive up to $500 in monthly contributions from families–from their family without having their benefits affected. The EIA Disability Trust provisions have been enhanced to allow up to $200,000 in savings to meet disability-related expenses without affecting eligibility.
As I mentioned, the universal child care was exempted. The building assets account, such as registered educational savings plans that individuals may have for their children, and individual development accounts are exempted. Payments received as compensation for abuse at a residential school are exempted.
So there's a wide range of exemptions beyond the $4,000 in liquid assets. The–that's generally available to any–that exemption level is available to any EIA recipient, and then there are special exemptions that are put in place for special circumstances.
Mr. Gerrard: So the RRSPs would be in all circumstances included as part of that liquid assets, is that correct?
Mr. Eliasson: That's a separate exemption, so that's not included in the $4,000. That's over–all the ones I mentioned are over and above the $4,000 in liquid assets.
Mr. Gerrard: Is there a given amount of RRSPs that would be exempted, or would it be completely exempted?
Mr. Eliasson: RRSPs are an asset that individuals are expected to draw upon to meet their basic requirements.
Mr. Gerrard: I had asked about RRSPs, and the first time you told me they were exempted and now you're telling me they're not exempted. But maybe you misheard me and thought I was asking about RESPs, which are different.
Mr. Eliasson: That's exactly what I did. I misheard you.
Mr. Chairperson: So, Mr. Eliasson, RDSPs are exempt, is that not correct?
Mr. Eliasson: RE–
Mr. Chairperson: RE?
Mr. Eliasson: –as in Eliasson, are exempt.
Mr. Chairperson: Registered–so registered education savings plans and registered disability savings plans are exempt but not registered retirement savings plans, is that correct?
Mr. Eliasson: That's correct.
Mr. Gerrard: Individuals who have small businesses and their owners may have much of their pensions in registered retirement savings plans and may not have contributed all that much to Canada savings plans. Under those circumstances, you would still require the liquidation of the RRSPs above an amount of $4,000, is that correct?
Mr. Eliasson: Yes, that's correct.
Mr. Friesen: I wanted to pick up on a theme that was taken up by Dr. Gerrard and invite the Auditor General to comment on this.
So there was discussion about the work in progress, No. 14, and Dr. Gerrard was referring to, you know, the manner in which the department reviews income assistant rates, and the deputy minister made allusion to the fact that they, you know, they compare between jurisdictions and they consider basic shelter amounts and there's other rubrics that they basically consider.
But this goes to the Auditor General's recommendation that the department proceed in a logical and equitable manner. And in another place, the Auditor General said there was no structured or documented process to ensure rates were determined in an equitable and defensible manner.
So I'm just inviting the Auditor General to comment and say, so, as now with the words that the deputy minister has put on the record, is the Auditor General convinced and is he confident that a logical and equitable manner has been put in place to consistently work to adjust income assistant rates?
Mr. Ricard: Just to go back a second, just to remind the–the finding was, back in 2008, that the review process is not a formally structured or documented process. So the recommendation stemming from that finding was that a formal documented process for reviewing and making recommendations be developed.
There's a lot of other words around, you know, what it's to achieve, and the logical and equitable manner is what it's–what the process is to achieve, you know, and our follow-up–unfortunately, our follow-up, our final follow-up, stopped before this latest rate review document was issued.
So we did not look at the rate review process, so I can't really comment on whether we think currently there is a formally structured and documented process in place.
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Mr. Friesen: I'll direct the same question, then, to the deputy minister. And I understand what the Auditor General is saying is that it just–it lies outside of the purview of the examination of the Auditor General's department with respect to, I guess, what has subsequently been done on that file. As to the deputy minister, I guess, there's two questions, then.
Mr. Chairperson: How about one at a time, Mr. Friesen?
Mr. Friesen: Sure. First question is this: Is the process now formal?
Mr. Eliasson: As I said in my remarks, the process through which rates and changes to EIA are made is the annual Estimates process that results in the preparation of a budget for the Province of Manitoba, which is a very formal and well-documented process. And all of the things that I refer to are inputs into that process.
Mr. Friesen: I believe the deputy minister just answered my second question, which was, is it documented? And I think that what the deputy minister is probably saying is that it is documented in that Estimates process, but I invite his comment on that.
Mr. Eliasson: Yes, the departments make submissions to Treasury Board, and Treasury Board's decisions, including Estimates decisions, are documented by minute.
Mr. Ted Marcelino (Tyndall Park): Yes, I was reading on figure No. 3, and am I correct if I said that the single–it's in the category from single parent, two general assistance adults, single employable adult and single person with a disability. Is the–are the categories of single employable adult as opposed to single person with a disability, is that the juxtapose–juxtaposition? Is that how it was categorized?
Mr. Eliasson: Yes, I think that's correct. Individuals–single employable adults receive a lesser amount than single–than a single person with a disability. There's more support for a single person with a disability than there is for a single person without a disability.
Mr. Marcelino: Thank you. The definition of disability–do you include mental health?
Mr. Eliasson: Yes. [interjection]
Mr. Chairperson: Mr. Marcelino.
Mr. Marcelino: Thank you. Again, sorry. How about those forensic–those who have been declared NCR? Are they included in persons with disability? Those who were declared not criminally responsible after trial.
Mr. Eliasson: The deciding factor would be mental diagnosis, so that's the criteria. And, if a person who was not criminally responsible was diagnosed with that–with a mental disability, then they would be eligible.
Mr. Marcelino: I'm currently involved with a group who has 280 renters, tenants, persons under their care. And it involves the receipt of $861 per month for each person, for their rent, for their food and for their care. And I felt that these were persons who were in the outer fringes of our society and who have been left behind by the safety net that we try to catch people who are in that particular circumstance. The $861 rent, food and care are being paid to private persons in group home settings, 280 of them scattered over 32, from the last count, because some are closing and are driving those people homeless.
Is there any way that this 896–$896.40 that shows here the total Manitoba basic and shelter rate, is that something that might apply to them or is that something that's only reserved for those who are not mentally categorized as challenged?
Mr. Eliasson: This gets pretty complicated pretty quickly but where a service provider is paid directly to provide basic care and shelter for individuals then that would result in a lower payment to the individual directly because the care provider is being paid for things that otherwise would be covered by a payment to an individual.
Mr. Marcelino: I think you're referring to those who are in the CLDS, Community Living disABILITY Services; it's not. There's a certain category of group home operators who are–who become the recipient of referrals from Family Services and Housing and from WRHA and from Justice, including the office of the Public Trustee, who are operating in the fringes of our infrastructure.
Mr. Eliasson: You know, maybe the best thing is if I arrange for staff to meet with you and get the full details and then we could provide advice if there was an issue that needed to be dealt with.
Mr. Chairperson: Is that okay, Mr. Marcelino?
Mr. Marcelino: Yes, I think that's the best. Thank you.
Mr. Pedersen: In this handout that the deputy minister provided, figure 4, and it says change in total monthly income from provincial and–from federal and provincial sources from 1999-2015. You got the four different categories, you've got total income–1999 total income, July 2015. Would the deputy minister be able to provide us with a breakdown of the–in–as an example, single parent, two children, ages 10 and 13, $1,253 in 1999, $1,919 in July 2015?
Can the deputy minister provide us of the breakdown of what share of actual dollars that $1,253 is, $1,919 is in federal dollars and in provincial dollars for each–of the four categories?
Mr. Eliasson: We would have to do the calculation, but we can certainly do that.
Mr. Friesen: I'll just follow up with that. And I'm just curious as to why the deputy minister wouldn't have that information for the committee today. It's certainly the first question, you know, that comes to mind for me when it comes to figure 4.
Is there someone–is there a staff member of the deputy minister's who could assist him at this time to provide that information–the breakdown that my colleague asked for in the context of this committee before we break?
Mr. Eliasson: I could say we could try and get it before this committee rises today, but I don't think that that's possible. So we will undertake to have it available tomorrow, if that's–
Mr. Chairperson: Mr. Friesen.
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Mr. Friesen: Let me just ask maybe a qualitative question instead of a quantitative one then. When it comes to that same figure 4 chart that my colleague referred to, would the deputy minister say that the provincial share of that aggregate amount, has it increased or decreased from '99 to 2015, as a comparison to the federal amount?
Mr. Eliasson: We could do that calculation as well. You know, the fundamental point in the chart is the amount of income available to individuals regardless of source, and that is sort of a key element of designing a rate structure that fills a gap to make sure that people have sufficient funds to cover the basic necessities, regardless of source of income.
Mr. Friesen: And I understand what the deputy minister is saying, but in lieu of the conversation that we had earlier during this committee where the deputy minister did acknowledge that, in some cases, where the federal amount, because of indexing and other considerations rises, the provincial payment is in turn decreased; that's what prompts my question. So, obviously, yes, this is good information to have, showing the total amount that a recipient is eligible for and receiving. It shows a percentage change in actual dollars. But I'll just ask one more time, and that is, is the minister aware of whether the provincial amount, as compared to the federal, has either increased or decreased over that same 15-year period?
Mr. Eliasson: Just to be clear, most sources of federal income, like the child benefit, do not result in a reduction to the level of provincial support. That was restricted to Canada Pension Plan payments. The level of provincial support, I would guess, from 1999 has not decreased.
Mr. Friesen: Just a few more questions for the deputy minister. The current average monthly total of EIA cases, as compared to full-time staff, could he provide that information?
Mr. Eliasson: You know, I was afraid you were going to ask that. I tried to get that number. In the Auditor's Report, it identified 445 positions involved in the delivery of EIA. Today, there are 320–345 individuals in Family Services who are delivering the EIA program. There's been 31 positions transferred to Jobs and the Economy, and then there's been a whole host of small sort of changes that make it difficult to identify what–there's programs that are no longer being delivered within Family Services and have been delivered–are delivered by a third-party agency, and so those positions don't show up. So it's one of those things that's capable of being calculated if it's important. But it would take us a fair bit of manual work to get that done, and it wasn't capable of being done in response to my inquiry this morning.
Mr. Friesen: Undoubtedly, someone will shudder back there if I ask for the information. I think, for the purposes of this committee, it would be helpful to have that information, with apologies to whoever receives the marching orders to do that calculation. But, you know, when departments do change, who's responsible for certain functions? It becomes important for the Public Accounts Committee to be able to measure value for money and to see if there's been a net increase or a net decrease to the full-time staff that is charged with the execution of this work, whether they be in Child and Family Services, Jobs and the Economy, or another agency. So I thank the deputy minister in advance for looking after that.
If I could just ask a different question, then: There had been a concern by the Auditor General expressed about a monthly review for new and reopened files, and I was going to ask the deputy minister to please comment on what's the current percentage of monthly review for all new or reopened files. I believe that 10 per cent was the threshold requirement.
Mr. Eliasson: A review from the quality assurance unit was completed between March 2013 and August 2013, and it showed that supervisors were reviewing an average of 11 per cent of new files each month during this time.
Mr. Vice-Chairperson in the Chair
Mr. Vice-Chairperson: Mr. Friesen.
Mr. Friesen: Actually, I don't have another question for the committee. I believe my colleague does.
Mr. Pedersen: Does–question on this, does–if you are an EIA recipient and have a disability, do you have to provide a proof of disability each year in order to–is there a yearly review of this, or what is the process for a person with disabilities?
Mr. Chairperson in the Chair
Mr. Eliasson: The frequency of the review is determined at the first instance when a person is examined to establish a disability, and the time frame to the next review is established at that time. And it can range from six months, so somebody would have to be re-examined within six months, or it could be as to when the individual turns 65. So it depends on the individual circumstance.
Mr. Pedersen: That probably accounts for whether it's deemed a permanent disability or a temporary disability, and I'm sort of reading into your answer on that.
And a different question, then, to you. So the dollars paid when a person is on EIA, there is a cheque coming from somewhere. So does that come from Jobs and Economy? Does it come from Family Services? Which department actually writes the cheques?
Mr. Eliasson: So most people aren't paid by cheque now. It's sort of direct deposit, but that's not everybody, because there are people without banking facilities. But the cheque comes from–it's a government of Manitoba cheque, but–signed by the Deputy Minister of Finance–but the appropriation is within Jobs and the Economy, and that's where the funding is drawn from.
Mr. Pedersen: So the funding is–and it will show up in the budget lines under Jobs and Economy, but is that a transfer from Child and Family Services, or is that a budget item directly from Treasury Board, I would take it, then?
Mr. Eliasson: It's an appropriation within Jobs and the Economy, and the Legislature votes on that appropriation.
Mr. Chairperson: Further questions on this particular report?
Does the committee agree that we have completed consideration of section 6–Employment and Income Assistance Program, of the Auditor General's Report–Follow-Up of Previously Issued Recommendations, dated May 2014? [Agreed]
All right. We will now move on to section 14–Economic development: Loans and investments under The Development Corporation Act.
And, Mr. Eliasson, I believe you had an opening statement for this one as well.
Mr. Eliasson: I have a brief opening statement, just to put the program in perspective.
I'd like to thank the committee for the opportunity to provide remarks on the report of the Department of Jobs and Economy's Manitoba Industrial Opportunities Program and the venture capital fund program that was issued by the Auditor General's office in December of 2010 and the various follow-up reports the Auditor General released since 2012.
The December 2010 audit report addressed the loan and investment processes that were in place between April 1st, 2002, and March 31st, 2009, and the latest follow-up report of May 2015 looked into the progress of the department as of June 30th, 2014, in implementing the recommendations included in the December 10th Auditor General's report.
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The Manitoba Development Corporation acts as the Province's agent under The Manitoba Development Corporation Act, meaning that all lending and investing activities under MIOP are done under the direction of the Province, and so every loan requires Treasury Board and Cabinet approval.
Manitoba Industrial Opportunities Program is a secured, interest-bearing repayable loan program. MIOP is designed to assist companies in securing significant investment which would otherwise not occur without the provision of MIOP loan assistance. Typically, MIOP is described as providing highly flexible loans to support businesses that are expanding in Manitoba whose proposals will assist in providing significant job creation or strategic economic development benefits to Manitoba.
From MIOP's beginning in 1988 to August 31st, 2015, MIOP has made 131 loans, totalling $315 million in disbursements to Manitoba‑based companies. Loan writeoffs during this time were $36.9 million or approximately 12 per cent of loans disbursed. As of August 31st, 2015, the Province has approximately $83 million in disbursements respecting outstanding MIOP loans. Through the Development Corporation, the Province has also invested in pools of privately managed venture capital funds. The pools invested the capital in Manitoba-based business opportunities. Broad objectives for these provincial venture fund investments included to leverage private sector growth capital into Manitoba-based business and to increase the number of private growth capital investments for Manitoba-based businesses.
From the venture capital fund program's beginnings in 1996, MDC invested as a limited partner in six different funds at a cost of approximately $21 million. The last investment was made in 2006. The auditor's report included 14 recommendations that were directed to the department. The latest Auditor General's report indicates that 11 of the 14 recommendations have been implemented, and three recommendations are no longer relevant as there has been no new investment fund activity since 2006 under the department's venture capital fund initiative.
The auditor's report also notes that one implemented recommendation has only been partially implemented. Under No. 5, the department has a position that guidelines for penalties and administrative fees were not necessary, as the determination, setting or waiving of these fees are examined on an individual loan basis and these fees are approved or waived by Treasury Board on a case‑by-case basis. The three recommendations respecting venture capital funds are recommendations 8, 9, and 10, that were not currently required, were designed to be implemented when the Province was commencing due diligence respecting potential investment with private sector partners in a new venture capital proposal. No due–no detailed due diligence respecting a new fund proposal has taken place since 2006, and none are under current contemplation. It is the department's position that if a private sector proposal is reviewed to invest in a venture fund, then these particular recommendations would be included in any future Treasury Board approval processes.
Mr. Chairperson: Thank you, Mr. Eliasson.
Now, the committee agreed to sit until 4 o'clock, and we are approaching that time. Should we go past 4? What is the will of the committee?
Mr. Pedersen: Mr. Chair, if we could agree to sit for another half hour or so, I'm sure we'd be done here within that time.
Mr. Chairperson: Agreed? [Agreed]
All right. Questions of the deputy minister?
Mr. Pedersen: Mr. Chair, through you to the deputy minister, I heard Treasury Board, but I didn't see it in here. Now, can you–because these–in your second paragraph of your opening statement here, all lending and investing activities of MIOP are done under the Province of Manitoba–or Province–so Treasury Board, can you walk me through the–if a MIOP proposal comes, how it is then approved for–the financing is approved through the Province?
Mr. Eliasson: Yes, so the Manitoba Development Corporation is a Crown corporation, and it doesn't have any staff. It has a board, and it's a corporate facility that allows the corporation to borrow money from the Province of Manitoba to–that money is then put out in loans to private businesses. Interest is paid to the Manitoba Development Corporation. It collects those interest payments and, in turn, the corporation pays money back to the Province of Manitoba. So it's an intermediary between the Province and the ultimate loan recipient, but it's an efficient way to handle the disbursement and collection of funds.
At one time, the Manitoba Development Corporation did have its own staff and conducted lending activities that were approved by the board of the corporation, and activities of that nature were suspended in 1977, and so it has not undertaken any lending activity on its own since that time, and so every loan requires the approval of Treasury Board and, subsequently, Cabinet before it's made.
So that's just to say that it's the Province of Manitoba, through Treasury Board, that is approving the loans rather than delegating that authority to a board and a corporation.
Mr. Pedersen: And that's very enlightening, and I'm looking at the actual mechanics of this. You have a company coming forward with a MIOP–applying for a MIOP loan. The proposal is there. Is it then approved by Treasury Board?
Mr. Eliasson: The proposal would come in to the Department of Jobs and the Economy, and within the department we have a branch called Financial Services and they take the lead in negotiating the terms of the loan. They have the responsibility to do the due diligence, et cetera. In doing that, they draw upon expertise, resident either elsewhere in the department or elsewhere in government–could be the Department of Agriculture in a particular instance–and they do the assessment, come to the conclusion whether it's a loan that they are prepared to recommend.
Then that recommendation would be part of a Treasury Board submission. Treasury Board would review that. Assuming they supported the recommendation, they would approve it. Then the minutes from Treasury Board would go to Cabinet.
Then there would be an order-in-council, and that order-in-council would authorize the Province to transfer X amount of money, whatever the value of the loan, to the Manitoba Development Corporation, that would then manage the conclusion of final agreements, the disbursement of funds, the collection of funds, and staff within the department have the responsibility to monitor the loan while it's outstanding.
Mr. Pedersen: I think we're going to have a conversation after this, because that's not the way that one MIOP loan was done, but I'll leave that because I just don't have all the details here, but I will be in contact with you after.
Mr. Friesen: Just coming back to something the deputy minister said earlier on in his introduction of this particular chapter, so there's no longer any activity when it comes to the Province's administration of venture capital funds. I believe you did make a statement that were there a suitor to come along, proposals would be entertained. But am I to understand, then, that at this point in time the government no longer sees a role with respect to using–the use of venture capital funds to promote and accommodate growth in Manitoba?
Mr. Eliasson: The use of third-party venture capital funds–there were six funds that the Province had invested in, and since 2006 there has not been another proposal that has been received by the Province that made sense for provincial participation. So, as a vehicle, and one never says never, but it's unlikely that a proposal of that nature would be supported. It hasn't been a successful way of trying to develop venture capital within Manitoba.
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The Province has a major interest in ensuring the availability of venture capital to Manitoba business and is pursuing it in different ways now. And so we have a Small Business Venture Capital Tax Credit that was increased in Budget 2014 and now provides a 45 per cent tax credit to an individual who, in turn, invests in a qualifying Manitoba business, and that investment can range up to $450,000. So it provides a significant tax credit in support of significant investment, and companies receive approval to solicit funds under that program. And so that kind of tax credit, in many instances, provides a fairly significant inducement to encourage investors to take a risk that they may otherwise not feel comfortable taking without some kind of tax-credit support.
In addition to that, in 2014, we also launched a program that we'd call a sidecar investment program, and that program will match, on exactly the same terms and conditions, private sector venture capital investment into a business in Manitoba that has significant growth potential. And that investment can be up to $500,000, and so, if a group of individuals or a single individual is interested in making that kind of venture capital investment into a company, then the company can literally double that investment by accessing the sidecar fund.
Mr. Friesen: I'm looking at–and I thank the deputy minister for that information. I'm aware of some of those programs that exist now. But, looking first for clarification, when the deputy minister said that since 2006, and I'm just going to paraphrase his answer, but that, basically, no viable suitor had come forward in–that was the decision. Who would have undertaken to make that decision? Would that have been the Manitoba Development Corporation board? Would that have been the deputy minister? Would that have been the Treasury Board? How would that decision have been undertaken, that there was no suitable suitor with which the provincial government could develop that kind of venture capability or program?
Mr. Eliasson: It didn't require a decision. There–of the six venture capital funds that the Province had invested in over, you know, I don't know, a 10-year period, five of them were proposals that were presented to the Province of Manitoba. In one instance, the Province put together a formal call for proposals that resulted in creation of one of the funds. The performance of the six funds, two of them are still–four of them have been wound down, and the Province has written off its investment in its entirety in three out of those four, and wrote down its investment in the fourth one by about $245,000 or something like that. And the two that are still in existence and have, in turn, have outstanding investments, the exact outcome isn't known until those investments are disbursed. But we have provided 100 per cent provision for the Province's investment in those companies.
And so the performance of those funds has not been stellar, and a fund proposal since that time has not been presented that would–that has crossed the threshold of being a viable instrument for the Province to consider investing in.
So it's not a question of, you know, it's just not going to do it anymore; it's that there hasn't been an opportunity that was of sufficient interest to overcome the misgivings that exist because of the performance in the first six funds that the Province invested in.
Mr. Chairperson: To expand on your answer a bit there, Mr. Eliasson, could you tell us which those six funds were and which ones were written off and which were not, by name, please?
Mr. Eliasson: I probably can do that. The Manitoba Capital Fund, the investment by the Province in that fund was 4.7-plus million dollars, and that amount was written off. Western life sciences fund was for $4.875 million, that was written off. The Renaissance capital fund was $3 million; that was written off. The Canterbury fund was a–I don't have the investment number, but it was a significant number and the writeoff in that case was $297,000, which would be a small part of what the Province had invested. But, in the first three, the entire investment was written off, and in the Canterbury fund, a small portion of the investment was written off. And then there are two outstanding funds: one is–Manitoba Science and Technology Fund and CentreStone Ventures are the two that are still–they still hold investments that they haven't liquidated at this time.
Mr. Friesen: This may have already been answered, but I was just wondering what percentage of the overall investment would've gone to loan writeoffs.
Mr. Eliasson: Each of the funds was structured a little bit differently, so I think Manitoba Capital Fund and Renaissance capital fund, the Province had about 20 per cent of the overall investment in the fund, but the provincial investment was structured as the–to take the first losses in the fund, and that was then an inducement to attract private sector capital at the time, and so Western life sciences, I think, the Province invested on the same terms and the conditions as the other private investors.
Mr. Friesen: I want to take the deputy minister back just briefly to what he was saying was still in place at this time, the new programs, and he made a reference to the Small Business Venture Capital Tax Credit. I just wanted the deputy minister to indicate: Is there a threshold amount that the government, you know, has set for that program? I guess what I am getting at, is that tax credit fully subscribed? Has there been good uptake on the–those credits that have been made available through the Small Business Venture Capital Tax Credit?
Mr. Eliasson: It varies on an annual basis. When the program was first introduced–the program was over–like introduced January 1st, I think, of whatever year it was, and by, like, mid-February it was oversubscribed and companies were successful in raising the full amount that they had approval for. The overall amount was increased the next year and the–close to the full allocation was approved for companies to pursue investment and maybe something like 50 per cent of the money was actually invested, and so it varies on an annual basis.
Mr. Friesen: Could the deputy minister indicate with respect to the sidecar investment program, how has that program been received and is it also fully allocated?
Mr. Eliasson: The program was launched in July of 2014, and, to date, one investment has been made and matched, so it's–we have the capacity to do three investments on an annual basis.
Mr. Pedersen: The recommendation No. 5 went from work in progress in the 2013 follow-up report to do not intend to implement in the 2014 follow-up report. Could you provide some rationale for the change in the status?
Mr. Eliasson: So the MIOP program is really like a boutique-lending program. The volume of loans varies year to year, but it can be as few as two loans a year and, you know, maybe as many five or six in some years. Over the life of the program, it's sort of done 131 loans. Each of them are individually negotiated. They're each a little bit different in their own circumstance. The recommendation on guidelines for when penalties are waived is such that the prospect of waiving a penalty arises in very few occasions. I think, in the past 15 or 16 years, there have been eight interest penalties that have been waived. There have been, I think, 11 prepayment penalties that have been waived. Each of them are for their own circumstances and, in each case, both circumstances are reviewed and, if it seems to make sense to waive the penalty, then that recommendation is considered by Treasury Board in each case and a decision is made.
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And it's not really the kind of thing that lends itself to a set of guidelines that guide that sort of decision making. It's infrequent enough and the numbers are small enough that it can be evaluated on an individual basis.
Mr. Gerrard: Yes, my starting question is to the Auditor General. There's one recommendation which you have listed as being in progress. ETT ensure the accuracy and consistency of performance measures for the MIOP loan and venture capital fund program and measure results for these programs that are focused on actual economic benefits to Manitoba.
I just wonder if you could outline where the implementation falls short, in terms of this recommendation.
Mr. Ricard: This is one of those recommendations in my opening comments that I mentioned in our May 2015 follow-up report. We advise that it has been implemented by the department. So perhaps I would invite the deputy minister to comment on the actions taken to implement.
Mr. Chairperson: Mr. Eliasson?
An Honourable Member: Could I ask the deputy minister what he's done to fully implement this recommendation.
Mr. Chairperson: Honourable Dr. Gerrard, then Mr. Eliasson.
Mr. Eliasson: The performance measures for MIOP are reported on an annual basis in the department's annual report, and so that's a practice that was put in place following the original auditor's review.
Mr. Gerrard: But that was put in place following the original review. But there's been some steps taken in the last two years since the most recent review was done by the Auditor General to complete the implementation of the recommendations, or not.
Mr. Eliasson: The Auditor General has reviewed the recommendation and has concluded that it's been fulfilled.
Mr. Gerrard: As of 2014, in the 2014 report, this one was not reviewed. This one was considered not complete, in terms of implementation. But the Auditor General has just said that a year later, in 2015, it was considered complete. So what was done between 2014 and 2015 to complete the implementation?
Mr. Eliasson: There's been a system put in place where the reporting is checked by three individuals who have knowledge of it in the branch, to ensure that the information is accurate when it's reported.
Mr. Gerrard: Can the deputy minister give us an update on the parameters around the performance measures of the MIOP loan program as they stand, as of today?
Mr. Eliasson: The primary performance measures of the MIOP loan program are the amount of private investment that the loans have leveraged and the number of jobs that are created or retained as a result of the investment.
Mr. Gerrard: So, in terms of any investments made in the last, say, two years, what has been the performance on those?
Mr. Eliasson: You know, I don't have the specifics on the performance of loans made in the last two years. They are reported in the department's annual report. The information I have pertains to the auditor's report that examined activities between 2002 and 2009.
Mr. Gerrard: Is there any information which is more recent than the most recent annual report?
Mr. Eliasson: You know, the 2014-15 annual report is just out right now. It was distributed before–just before September 30th, so that's the most current information that we would have.
Mr. Chairperson: Other questions?
Does the committee agree that we have completed consideration of section 14–Economic development: lows–Loans and investments under The Development Corporation Act of the Auditor General's Report–Follow-up of Previously Issued Recommendations, dated May 2014? [Agreed] Thank you.
I have a question for the committee. The deputy minister did distribute some information that I think he referred to several times, as did the committee members, the number of cases and participants by category. Do we have leave to have this appear in Hansard? I think it was a good portion of our discussion. [Agreed] Thank you.
So this concludes the business before us. Thank you to the clerks and page and to the Hansard staff. The minister and deputy minister and his staff, thank you for appearing before us today, and the Auditor General and his staff. Thank you, again, to the committee, for coming today.
Before we rise, it would be appreciated if members would leave behind any unused copies of reports, so they may be collected and reused at the next meeting.
The hour being 4:15, what is the will of committee?
Some Honourable Members: Committee rise.
Mr. Chairperson: Committee rise. Thank you.
COMMITTEE ROSE AT: 4:15 p.m.