Operating context and key risks

Children

Although child poverty in Canada has been in decline since the mid-1990s, from 17.5 percent in 1995 to 8.6 percent in 2015, it remains high in comparison to other Organisation for Economic Co-operation and Development (OECD) countries and for children living in a lone-parent family. In addition, more than 300,000 children are reportedly using food banks on a monthly basis. Access to quality child care has also been a challenge for many Canadian families, with only one in four Canadian children having access to early learning and child care spaces. Child care affordability also remains a concern for many families, with daily fees for parents that are significant and rising.

ESDC is committed to ensuring that children have a real chance to succeed, regardless of their background, and is undertaking initiatives to support middle-class families and to ensure fewer children grow up in poverty. The introduction of the Canada Child Benefit in Budget 2016 has increased the amount of income support received by 9 out of 10 Canadian families to help meet the rising costs of raising a child and is expected to reduce the number of children in poverty by 300,000, or about 40 percent. In addition, the Department worked with provinces and territories to establish an Early Learning and Child Care Framework, signed in June 2017, which will provide more high-quality, affordable, flexible and inclusive child care for Canadian families.

ESDC is also engaging with Indigenous partners to create a distinct Indigenous Framework on Early Learning and Child Care that will reflect the unique cultures and needs of First Nation, Inuit and Métis children across Canada. To support this commitment, Budget 2016 allocated $29.4 million in fiscal year 2016 to 2017 for urgent repairs and renovations, of which $16.6 million was provided by ESDC through the First Nations and Inuit Child Care Initiative and $12.8 million was provided by Health Canada through Aboriginal Head Start on Reserve. To date 210 child care centres and facilities have received funding to undertake urgent repairs and renovations.

Youth and life-long learners

Among OECD countries, Canada has the highest percentage of the population with post-secondary education. In 2015, 55 percent of the Canadian population between ages 25 and 64 had either a college or university credential, well above the OECD average of 35 percent. This attainment advantage was driven by college graduates, as a quarter of the population aged 25 to 64 obtained a college credential as their highest level of education. Post-secondary education graduates have generally strong labour market outcomes. However, the differences in university attainment between high- and low-income groups remain significant as graduates from higher education can expect positive earnings premiums when compared to those with a high school education.

Canadian youth, however, face some challenges in transitioning from school to the workplace. Every year, about 850,000 young people aged 15 to 29 are seeking employment opportunities, education or training. Among these individuals, about 42 percent were job seekers in 2016 and 58 percent were pursuing education or training.

Furthermore, a high proportion of Canadian adults have poor literacy (17 percent) and/or numeracy skills (23 percent). Adults who want or need to upgrade their skills can also face unique barriers to returning to school. Beyond the cost of education, many also face financial pressures due to the costs of maintaining their homes and supporting their families.

ESDC recognizes that education and training are key factors in building a strong economy and promoting a highly skilled, inclusive, productive and internationally competitive workforce and has taken action to ensure that Canadians have the knowledge, skills and work experience needed to achieve their full potential.

ESDC introduced a fixed student contribution which will allow more students to work and gain valuable labour market experience without having to worry about a reduction in their level of financial assistance. ESDC also offers non-repayable grants targeted to students from low- and middle-income families, students with permanent disabilities, students with dependants and part-time students from low-income families. As announced in Budget 2017, the Government has also committed to making better use of existing flexibilities within the Employment Insurance (EI) program that allow claimants to pursue self-funded training and maintain their EI status in order to encourage unemployed Canadians to seek opportunities to develop and upgrade their skills.

Furthermore, to provide more support to young people starting post-secondary education, Canada Student Grant amounts were increased by 50 percent for students from low- and middle-income families and part-time students, which will make more non-repayable financial assistance available for approximately 363,000 students. ESDC also increased the eligibility thresholds of Canada Student Grants for students. Finally, to support borrowers in repayment as they transition into the labour market, the Repayment Assistance Plan thresholds were increased to ensure that no student will have to repay their Canada Student Loan until they are earning at least $25,000 per year. These measures are making post-secondary education more affordable and accessible for students from low- and middle-income families to enable them to gain the knowledge, skills and abilities to succeed in the labour market and their communities.

ESDC has also launched a new program to help young Canadians enrolled in post-secondary education institutions get the work experience they need to make a successful transition into the workforce. Work is currently underway to increase the number of work-integrated learning opportunities for young Canadians enrolled in post-secondary education, with a focus on high-demand fields such as science, technology, engineering, mathematics and business.

ESDC is also committed to ensuring that Canadians are able to obtain the skills and training necessary to qualify for well-paying jobs, both now and in the future. The Department has intergovernmental agreements in place that transfer almost $3 billion in annual funding to provinces and territories to design their own programming for skills development, training and other employment assistance services. Additionally, the Department also provides a number of federally delivered skills development/training and employment support programs targeted at specific groups, with a focus on workers who are under-represented in the labour market, such as persons with disabilities and Indigenous people. Further to the Budget 2016 commitment to renew and expand the Aboriginal Skills and Employment Training Strategy, the Department has carried out extensive engagement with Indigenous leadership, Aboriginal Skills and Employment Training Strategy service delivery organizations, academic institutions and provincial and territorial governments to improve and strengthen Indigenous labour market programming.

Together, these initiatives are expected to positively impact job quality. More supports to access post-secondary education and training to improve knowledge and skills could help to raise the earning potential of individuals trapped in precarious and low-wage employment situations due to low levels of education or skills that are misaligned with job requirements.

Families, workers and workplaces

An inclusive labour market in which all Canadians have the opportunities and supports they need to thrive is essential to helping and growing the middle class. This includes income and wealth growth, as well as responsive supports.

Labour force participation and employment rates in Canada are strong relative to peer countries, but we know there is still more work to do. Women in Canada have made remarkable gains in employment, especially during the 1970s and 1980s, and the employment rate gap has narrowed with that of men. However, the employment rate of women remained 7 percentage points lower than that of men in 2016, and although women are increasingly more educated than men, a tangible wage gap persists between women and men. Certain groups, such as recent immigrants, women, Indigenous peoples and persons with disabilities, continue to face challenges in the labour market due to a lack of education, skills and experience, in addition to some unique barriers. However, for some groups the employment gap is beginning to close. For example, the employment rate (for the age group 25-54 years old) of recent immigrants (who arrived in Canada during the last five years) increased between 2006 (65.2 percent) and 2016 (68.2 percent). Despite weak wage growth over the last four decades, middle-class families have recorded relatively robust income gains by increasing their work effort; however, income gains have been uneven and inequality has increased.

Canadian workplaces and the nature of work have undergone significant changes in recent decades. Today, work often takes place outside the traditional workplace. In addition, about 38 percent of total employment in Canada is now accounted for by temporary and part-time jobs and self-employment, rather than permanent, full-time employment, often with the same employer, which was the norm until the 1990s. In addition, the rate of unionization in Canada’s private sector has continued to fall and is now less than 17 percent, compared to about 21 percent in 1997.

Furthermore, while physical injuries in the workplace are declining, psychosocial problems such as stress and mental health are growing. One in five workers in Canada today experiences mental health issues, with impacts on productivity and safety, and, according to the Canadian Mental Health Association, 58 percent of Canadians report being “overloaded” due to the pressures associated with the multiple roles that they now play at work and home.

As a result of these and other changes, many workers in Canada today live with job insecurity. Some also face poor working conditions, wages and benefits. Research indicates that certain groups of workers, such as youth, women, recent immigrants and Indigenous people, are most at risk.

As the nature of work changes, so too should the rules governing federally regulated workers. As such, the Department is working to modernize labour laws and regulations to address today’s reality at workplaces and to ensure that Canadians working for employers in the federal jurisdiction work in conditions that are safe, healthy, fair and inclusive. In 2016, the Department worked to develop a proactive pay equity regime for federally regulated workplaces to ensure that federal workplaces are free of harassment and sexual violence, and to develop more flexible leave options for caregivers and more flexible parental leaves. To protect workers from health and safety hazards, ESDC is also working to improve regulations such as those applying to asbestos, hazardous products, grain and flour exposure limits, and personal protective equipment.

The most recent Budget confirmed the Government’s intention to limit unpaid internships in the federal jurisdiction when the internships are not part of a formal educational program, and to give federally regulated workers the right to request more flexible work arrangements to help them better balance work and family demands. In addition, compliance and enforcement provisions are being strengthened and modernized to guarantee that hard-working Canadians can more easily recover wages owed to them by their employers.

Building on these proposed changes, ESDC is committed to ensuring that Canadians continue to benefit from a robust and modern set of federal labour standards that set the stage for good-quality jobs. In advancing this and other labour-related priorities, ESDC will continue to engage closely with unions and employers, as well as with individual workers, civil society organizations, experts and others.

The Employment Insurance (EI) program is a long-standing feature of Canada’s social safety net, providing temporary income support to workers who have lost their job through no fault of their own while they look for new employment or upgrade their skills. The program also provides temporary financial assistance to eligible workers who are absent from work due to personal illness or family-related responsibilities.

ESDC is committed to improving the EI program to ensure it is better aligned with the realities of today’s labour markets and provides economic security to Canadians when they need it most. Over the last year, access to EI support has been expanded for new workers, such as young Canadians and recent immigrants, by eliminating the higher EI eligibility requirements for new entrants and re-entrants to the labour market. As well, the Government improved the EI program by introducing a new, more flexible Working While on Claim pilot project to help claimants stay connected to the labour market by ensuring that they always benefit from accepting work, by simplifying the job search responsibilities for unemployed workers and by reducing the waiting period claimants must serve before they become eligible to receive benefits from two weeks to one week.

In addition, work is underway to expand EI benefits to offer more flexibility for families. This includes creating a new EI caregiving benefit of up to 15 weeks that will cover a broader range of caregiving situations. EI parental benefits will become more flexible, with parents being able to receive benefits over an extended period of up to 18 months at a lower benefit rate. Women will also be able to claim EI maternity benefits up to 12 weeks before their due date (up from 8 weeks).

Every Canadian should have a safe, affordable place to call home, yet it is estimated that approximately 35,000 Canadians experience some form of homelessness on any given night. Between 2010 and 2014, an estimated 450,000 Canadians used an emergency homeless shelter at least once. Through the Homelessness Partnering Strategy, tackling homelessness represents a key first step in helping the most vulnerable in Canadian society, as access to safe, stable and secure housing is needed before they can make progress on their economic and social goals.

Seniors

The primary objectives of Canada’s retirement income system are to prevent poverty among seniors, to provide adequate income replacement in retirement and to achieve financial sustainability and economic efficiency. Maintaining a secure retirement is a major concern for middle-class Canadians in the context of fewer employers offering defined benefit pensions and rising living costs reducing individuals’ ability to save. Canada’s public pensions have played a major role in reducing the low-income rate among the elderly over the past 30 years, from 29 percent in 1976 to 4.4 percent since in 2015. However, there is still room for progress.

ESDC is committed to ensuring that Canadian seniors maintain a secure retirement and has taken steps to improve income security and retirement savings for Canada’s seniors to maintain their quality of life in retirement. Amendments to the Old Age Security Act to increase the Guaranteed Income Supplement (GIS) for the lowest-income single seniors by up to $947 per year were included in the 2016 Budget Implementation Act. The first GIS payments reflecting the new amount were made on July 27, 2016. This increase provided greater income security for close to 900,000 seniors across Canada, of whom 70 percent are women. An estimated 13,000 seniors have been lifted out of poverty, of whom 12,000 are senior women living alone. In addition, cancelling the increase in the age of eligibility for Old Age Security benefits (from 65 to 67) means that future 65- and 66-year-olds who rely mainly on those benefits will not be forced into poverty. Looking toward the next generation of retirees, an agreement was reached with provincial governments to enhance the Canada Pension Plan (CPP), which will reduce the number of families at risk of under-saving and help more Canadians achieve a strong, secure and stable retirement. If the mature CPP enhancement was in place today, roughly 275,000 additional families near retirement would have sufficient savings for retirement. ESDC, in collaboration with Statistics Canada, is also working on indexing Old Age Security benefits to a new Seniors Price Index which may be used to index benefits to seniors’ cost of living.

The ESDC Service Strategy: A commitment to service excellence

The Government of Canada strives to improve the lives of Canadians by supporting the middle class and caring for society’s most vulnerable individuals and families. This work starts with improving how Canadians access key services delivered by ESDC such as Employment Insurance (EI), the Canada Pension Plan (CPP), Old Age Security (OAS), Canada Student Loans, Job Bank and passports.

For many Canadians, Service Canada, ESDC’s service delivery arm, is the face of the Government of Canada. Service Canada engages millions of Canadians each year to provide a wide range of government information and services, either online, by phone or in person. Together with Service Canada, ESDC has over 25,000 employees across the country who are dedicated to deliver services that are accurate, on time and responsive to the needs of Canadians.

Delivering better services to Canadians

Worldwide, organizations in both the public and private sectors are adopting innovative ways to understand and connect with clients, leveraging new technologies and raising the bar for quality and timely service delivery. Canadians expect and deserve government service delivery to meet their needs and to be on par with what the private sector and other jurisdictions can offer. We are listening to Canadians and our employees on how we need to change. For example, ESDC’s clients and employees provided valuable input to the 2017 Employment Insurance Service Quality Review Report^{Footnote 1}, which is helping to shape improvements to service delivery that will most benefit Canadians. The review specifically highlighted calls for more client-centric services, streamlined applications, reduced wait times and easy-to-access online services.

The ESDC Service Strategy

In October 2016, ESDC created the ESDC Service Strategy. Aligned with Government of Canada-wide direction on service, the ESDC Service Strategy is our vision for better service. The work of the ESDC Service Strategy is grounded in five core principles:

• Client-centric: Responsive to current and emerging client needs
• Digital: Secure and easy to use
• Collaborative: Connected through collaboration and partnerships
• Efficiency and Effectiveness: Providing value for money
• Service Excellence: Based on a strong innovation culture and an engaged workforce

These principles guide five goals that ESDC will collectively work towards to make sure we undertake initiatives that truly improve services for Canadians:

• Goal 1: Clients can complete services using digital self-service
• Goal 2: Clients can access bundled and connected services seamlessly across channels
• Goal 3: Clients receive high-quality, timely and accurate services
• Goal 4: Clients’ needs are anticipated
• Goal 5: ESDC is organized to efficiently and cost-effectively deliver on the Strategy

The ESDC Service Strategy is already seeing results

While our work is just beginning, fiscal year 2016 to 2017 saw ESDC make important progress in its efforts to deliver high-quality, easy-to-access, simple and secure services for our clients. Key accomplishments include:

• Making it easier for clients to find information on the services they need by moving all ESDC websites onto one mobile-friendly site: Canada.ca.
• Providing clients with the ability to check the status of their Employment Insurance information online through their My Service Canada Account, eliminating the need to call or visit Service Canada.
• Enrolling up to 60 percent of eligible Old Age Security clients automatically so that they need not apply.
• Engaging clients directly in developing more meaningful service standards for Canada Pension Plan disability benefits.
• Making it more convenient to apply for passports by expanding Passport Receiving Agent in-person points of service from 151 to 315 sites across Canada, in addition to 32 stand-alone and 2 co-located full-service passport offices.
• Expanding the “birth bundle” to all provinces, allowing parents to apply for their child’s Social Insurance Number, child benefits and birth certificate all at once. This service is now available across all Canadian provinces, with a national take-up rate of 90 percent.

Organizing for future success

When the ESDC Service Strategy was launched, the Department also created a focal point for transformation and greater integration of service management. This move positions ESDC to be more flexible and responsive to meet client needs over the coming years. In addition, ESDC’s transformation also included the introduction of a Chief Data Officer to ensure ESDC’s data are used securely and effectively in the improvement of services to Canadians.

ESDC employees have always had the clients’ interest at heart, and the ESDC Service Strategy will serve as our vision to ensure the dedication of our employees is matched by modern and effective services. Moving forward, to become more client-centric, ESDC will continue to work with clients to inform, co-design and create better government services for all Canadians.

Evaluating our progress

ESDC conducts regular evaluations of its programs, providing the Department with timely and relevant results for policy development and spending decisions. Evaluation reports provide value to Canadians by enhancing transparency and demonstrating ESDC’s commitment to achieving its mandate to design and deliver programs that are effective and efficient in impacting their lives. In fiscal year 2016 to 2017, the Evaluation Directorate completed and published six evaluation reports ^{Footnote 2}. Those reports are available to all Canadians through the Department’s website.

Overall, these evaluations revealed that ESDC continues to meet its overall objective of promoting skills development and enhancing labour market participation for a wide spectrum
of the Canadian population, including unemployed Canadians, older workers, youth and the Indigenous population. More specifically, these evaluations demonstrated that ESDC contributes to creating a more skilled, adaptable and inclusive labour force as well as a more efficient labour market so Canadians can contribute to economic growth. For example:

• Labour Market Development Agreements (LMDAs): ESDC invests approximately $2 billion annually through agreements with the provinces and territories to help unemployed Employment Insurance-eligible Canadians find and maintain employment through a variety of programs. About 700,000 Canadians benefit annually from the various programs and services of the LMDAs. Based on the evaluation findings, the overall impacts included: reduced dependency on Employment Insurance and social assistance, increased employment and increased earnings of participants relative to non-participants. For example, evaluations found that participants increased their annual earnings by about $3,000 (on average) as compared to what they would have earned had they not participated.
• Work-Sharing Program: This adjustment program is designed to help employers and workers avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. Layoffs are avoided by offering Employment Insurance income support to workers willing to work on a temporarily reduced work week while their company recovers. An evaluation of the program found that over a 10-year period, 60 percent of participants (on average) avoided layoffs and were able to remain on the job for at least six months. The program resulted in an estimated net effect of approximately 11,000 and 24,000 layoffs avoided during 2008–09 and 2009–10 respectively.

The Department will continue to build on a strong foundation to further the contribution of evaluation findings in program and policy development. For additional information on the evaluation function, please read the Departmental Evaluation Plan^{Footnote 3}.