ARCHIVED - Human Resources and Social Development Canada

• Previous Page
• Table of Contents
• Next Page

This page has been archived.

Section III

Supplementary Information

---

Organizational Information

Human Resources and Social Development Canada

---

HRSDC - Service Canada

---

Financial Performance Overview

Please note that financial tables provided in this section present Human Resources and Skills Development and Social Development separately in order to align with the 2006-2007 Main Estimates.

Human Resources and Skills Development Canada

In 2006-2007, the department was authorized to spend $19,449.7 million or $269.6 million less than the consolidated planned spending of $19,719.3 million (tables 1 and 3). The variance is explained by:

• A decrease of $332.8 million in the Specified Purpose Accounts mostly attributable to a revised forecast of Employment Insurance Part I benefits in the Employment Insurance Account. Employment Insurance benefits declined mainly as a result of a decrease in the number of beneficiaries, consistent with lower unemployment;
• A net decrease of $195.6 million in the statutory payment authorities mostly attributable to:
  • A decrease of $70.0 million in Canada Education Savings Grants (CESG), due to downward estimate adjustment mainly due to sluggish payments of the Additional CESG (A-CESG). Lower than expected A-CESG payments are attributable to several factors including low awareness and more gradual implementation from Registered Education Savings Plan promoters;
  • A decrease of $58.2 million in Payments related to the direct financing arrangement under the Canada Student Financial Assistance Act, is mainly due to a decrease in the alternative payments payable to non-participating provinces, resulting from the fact that defaulted loans, which is a component of that payment, was significantly reduced;
  • A decrease of $28.7 million for the Wage Earner Protection Program which was not implemented in 2006-2007;
  • A decrease of $27.3 million in Liabilities under the Canada Student Loans Act due to the fact that actual spending is presented net of the recoveries on claims while the planned spending represents the forecast expenditure of claims payments;
  • A decrease of $23.2 million in Canada Learning Bond due to downward estimate adjustment due to limited uptake as a result of the recent introduction of the Canada Learning Bond, delayed readiness of the delivery systems of Registered Education Savings Plan promoters, and limited marketing of the Canada Learning Bond from communications and outreach activities;
  • A decrease of $23.0 million associated with contributions to employee benefit plans.
  • An increase of $26.5 million in Canada Study Grants, is the result of higher than expected up-take of the Canada Access Grants (Low Income Families and Permanent Disability), proposed in Budget 2004 and effective August 2005.
  • An increase of $7.4 million for the provision of funds for interest payments and liabilities in the form of Risk Shared loans under the Canada Student Financial Assistance Act. The variance is mainly due to the continuous impact of debt management measures as well as the outstanding balance of the in-study portfolio being higher and expiring slower than previously forecasted.
• A decrease of $10.8 million in grants and contributions mostly related to:
  • A decrease of $31.6 million for the Workplace Skills Initiative reprofiled to future years;
  • A decrease of $24.8 million further to the announcement of September 25, 2006 on Effective Spending of which $10 million is related to the Youth Employment Strategy, $8.0 million related to the Training Centre Infrastructure Fund, $4.8 million related to the Adult Learning Literacy and Essential Skills program and $2.0 million related to Workplace Partners Panel;
  • A decrease of $6.2 million for items included in planned spending for which resources were not requested in 2006-2007 for Aboriginal Skills and Employment Partnerships ($5.3 million) and Foreign Credential Recognition ($1.0 million);
  • Offset by an increase of $52.2 million further to:
    • a reprofile from 2005-06 to 2006-2007 for the National Homelessness Initiative ($37.2 million);
    • new funding announced for the Targeted Initiative for Older Workers and Expert Panel ($8.0 million) to assist unemployed older workers in communities with ongoing high unemployment and/or affected by downsizing; and
    • additional funding for the Apprenticeship Incentive Grant of $7.0 million (from $25.0 million to $32.0 million), to encourage more Canadians to pursue apprenticeships and reward progression by providing $1,000 per year to apprentices successfully completing their first or second year of an apprenticeship program in a Red Seal Trade.
• An increase of $250.4 million in Loans disbursed under the Canada Student Financial Assistance Act is mainly due to actual gross amount of repayments being much lower than anticipated as a result of the major decrease in accounts returned to government.
• An increase of $19.2 million in net operating expenditures mainly due to:
  • Operating budget Carry-forward from 2005-2006 ($13.3 million);
  • Compensation for salary adjustments ($8.3 million);
  • Transfer from the Privy Council Office of $3.1 million for the Policy Research Initiative as a result of government restructuring;
  • Operating funds for Targeted Initiative for Older Workers and Expert Panel ($2.7 million);
  • Funding to enable the Labour Program to respond to critical program pressures resulting from steadily increasing responsibilities ($1.8 million);
  • Offset by decreases for:
    • Items included in planned spending for which resources were not requested in 2006-2007 such as Wage Earner Protection Program ($3.2 million) and Foreign Credential Recognition, ($1.0 million);
    • An amount of $2.3 million transferred to Social Development Canada for the training of employees to achieve high service delivery standards for Canadians;
    • Funding no longer required pursuant to modified resourcing requirements of the new recovery initiative of the Canada Student Loans ($2.1 million);
    • A decrease of $2.0 million further to the announcement of September 25, 2006 on Effective Spending;

The actual consolidated expenditures of $19,235.4 million were $214.3 million lower than our total consolidated authorities of $19,449.7 million. This was mainly due to:

• Grants and contributions expenditures being $108.6 million less than the authorities for:
  • The Apprenticeship Incentive Grant ($31.3 million). Funding approval for the Apprenticeship Incentive Grant was confirmed at the end of March 2007. The launch and promotional activities required to create awareness of the new program were delayed;
  • The Homelessness Initiative ($25.1 million), this amount will be requested for re-profile to 2007-2008 to ensure that funds will be available for proposals that are developed for activities to alleviate homelessness;
  • Adult Learning, Literacy and Essential Skills Program ($13.1 million) mainly due to a late launch of Call for Proposals deferring spending to 2007-2008;
  • Youth Employment Strategy ($8.1 million), due to the uncertainty in determining funding requirements for the Skills Link initiative;
  • Targeted Initiative for Older Workers ($8.0 million), due to length of time to sign Federal-Provincial/Territorial agreements, pushing required work into 2007-2008;
  • The contribution agreement with Joint Voisey's Bay Employment and Training Authority ended earlier than anticipated on March 31, 2006, as the construction of the Voisey's Bay Nickel/Mine site was a year ahead of schedule ($4.7 million);
  • Aboriginal Skills and Employment Partnerships ($3.8 million), due to length of time to establish the agreements. The funds were re-profiled into future years;
  • Sector Council Program ($3.8 million), a result of delays in the implementation of certain projects;
  • Costs were lower than anticipated for the World Urban Forum ($2.4 million) due to a favourable exchange rate. Funds set aside for contingencies were not required as the event ran smoothly;
  • Foreign Credential Recognition ($2.1 million) due to projects deferred to future years, particularly in the agreements with provinces;
  • Workplace Skills Initiative ($2.0 million) due to a deferral of projects to the next fiscal year;
  • Training Centre Infrastructure Fund ($1.5 million) partly due to the withdrawal of projects by the recipients;
  • Labour Management Partnership Program ($1.2 million) due to the non-approval of some projects;
  • Other lapses ($1.5 million).
• A decrease of $96.7 million in the Specified Purpose Accounts. The variance is related to the
  • Employment Insurance Account with $35.5 million in Employment Insurance Part I; Employment Insurance benefits declined in 2006-2007 due to a decrease in the number of beneficiaries, consistent with lower unemployment, and due to the introduction of the Quebec Parental Insurance Plan,
  • $50.7 million in Employment Insurance Part II out of a total budget of $2.166 billion, due to normal delays in the implementation of projects and lower than expected expenditures by some projects;
  • $49.5 million in administrative costs, mainly due to a lapsed surplus of $30.4 million for Human Resources and Social Development Canada and $12.8 million for Social Development Canada;
  • offset by $43.9 million in doubtful accounts as a result of an increase in the overpayments bad debt;
  • and to the Canada Pension Plan Account with $4.9 million in administrative costs; and

• A net operating lapse of $ 9.0 million related to $1.6 million in frozen resources and $7.4 million in general lapse. The frozen items are attributable to the Canada Student Loans Program ($1.1 million), and a year-end transfer price between salary and non-salary ($0.5 million).

Social Development Canada

In 2006-2007, the department was authorized to spend $60,787.3 million or $700.8 million more than the consolidated planned spending of $60,086.5 million (tables 1 and 3). The variance is explained by:

• A variance of $646.4 million in Grants and Contributions representing the residual amount frozen for the National Early Learning Program.
• An increase of $166.6 million in the Specified Purpose Accounts related to the Canada Pension Plan and the Employment Insurance accounts:
  • an amount of $115.0 million for the administrative costs of the Canada Pension Plan Investment Board which was previously netted against the revenues of the Board;
  • a $35.7 million increase in administrative costs payable to the Canada Revenue Agency related to a $31.5 million increase and adjustment in the basic costs to administer Part I of the Canada Pension Plan and $4.2 million to undertake a special Canada Pension Plan contribution project;
  • an increase of $27.7 million in other Canada Pension Plan administration costs;
  • In the Employment Insurance Account, the increase in departmental administrative costs ($5.2 million) is mainly due to collective bargaining increases.
  • The increase is offset by a revision to forecast in Canada Pension Plan benefits of $17.0 million.
• An increase of $14.4 million in net operating expenditures is largely due to:
  • Compensation for salary adjustments ($14.8 million);
  • Operating budget Carry forward from 2005-2006 ($11.9 million);
  • An increase of $7.7 million for Service Canada to deliver the lump sum payments recognizing the experience of residing at an Indian Residential School and its impact (Common Experience Payments);
  • An amount of $2.3 million transferred from Human Resources and Skills Development for the training of employees to achieve high service delivery standards for Canadians;
  • Offset by decreases as a result of:
    • Transfers to the Canada Revenue Agency and Public Works and Government Services Canada for National Collection Services ($20.0 million);
    • The announcement of September 25, 2006 on Effective Spending related to Understanding the Early Years ($2.9 million); and
• A net decrease of $126.6 million in statutory payment authorities mostly related to:
  • a decrease of $376.2 million in the Old Age Security (OAS) forecast can be attributed to several factors. The average monthly rate of the Old Age Security pension for 2006-07 was less than forecasted due to a greater proportion of partial pensions. There was also an increase in the average number of monthly Old Age Security recipients. Lastly there was an increase in forecasted benefit repayment from higher-income Old Age Security recipients through the Old Age Security Recovery Tax.
  • a transfer of $18.5 million to the Canada Revenue Agency for the National Collection Services and Collection, Litigation and Advisory Services as a result of government restructuring;
  • offset by increases for:
    • Universal Child Care Benefits paid to Canadian families with young children ($174.4 million);
    • Guaranteed Income Supplement ($81.1 million) resulting from an increase in the forecasted average monthly rate. In 2006-2007, the average monthly Guaranteed Income Supplement rate was higher than estimated. This increase was partially offset by a decrease in the average forecasted number of monthly recipients;
    • Contributions to the Employee Benefit Plan ($4.5 million);
    • Allowance Payment ($4.1 million) which can be attributed to an increase in the forecasted average monthly rate of the benefit; and
    • Energy cost benefits ($3.7 million) which are one-time payments for energy costs incurred by low income seniors and families with children.

The actual consolidated expenditures of $60,070.7 million were $716.6 million lower than our total consolidated authorities of $60,787.3 million. The variance is largely explained by:

• A net operating lapse of $33.6 million resulting from $15.0 million in frozen resources such as the Canada Student Loans Program ($2.9 million) and year-end transfer price between salary and non-salary ($12.1 million) and $18.6 million in general lapse;
• A Grants and Contributions variance of $657.5 million including $648.6 million in frozen resources and $8.9 million in general lapse; and
• A decrease of $25.4 million in Special Purpose Accounts related to a decrease in administration costs recoverable from the Employment Insurance and the Canada Pension Plan accounts.

Table 1A: Comparison of Planned to Actual Spending (including full-time equivalent) Human Resources and Skills Development Canada

(millions of dollars)	2004-2005 Actual	2005-2006 Actual	2006-2007
			Main Estimates a	Planned Spending	Authorities	Actual
Program Activities b
Employment Insurance	554.3	838.1	883.4	879.5	760.3	750.5
Employment Programs	744.8	928.9	969.2	997.2	988.9	953.1
Workplace Skills	73.8	120.7	184.5	219.3	186.2	141.5
Learning	889.4	1,009.8	1,226.9	1,227.2	1,078.6	1,052.4
Labour	182.3	221.8	217.3	249.2	231.6	230.4
Homelessness	117.8	171.9	188.3	188.1	219.9	190.3
Service Delivery	89.0	158.3c	128.1	109.4	122.4	117.5
Policy and Program Support	90.0	161.3	103.2	120.1	141.6	140.9
Total Gross Expenditures	2,741.4	3,610.8	3,900.9	3,990.0	3,729.5	3,576.6
Respendable revenues	(865.3)	(1,400.6)	(1,425.8)	(1,435.2)	(1,362.0)	(1,326.7)
Total Net Expenditures	1,876.1	2,210.2	2,475.1	2,554.8	2,367.5	2,249.9
Non-Budgetary
Loans disbursed under the Canada Student Financial Assistance Act	1,215.7	1,331.3	981.5	981.5	1,231.9	1,231.9
Total Department	3,091.8	3,541.5	3,456.6	3,536.3	3,599.4	3,481.8
Plus: Specified Purpose Accounts
Employment Insurance	16,384.6	16,050.3		16,260.7	15,931.7	15,814.6
Other Specified Purpose Accounts	55.1	51.4		48.3	48.6	48.6
Departmental Recoveries charged to the CPP	5.3	13.0		14.7	15.8	10.9
Departmental Employee Benefit Plan recoverable from EI Account	(83.8)	(132.8)		(140.7)	(145.8)	(120.5)
Consolidated Total HRSDC	19,453.0	19,523.4		19,719.3	19,449.7	19,235.4
Less: Non-Respendable Revenues	374.4	512.7		648.5	640.4	640.4
Plus: Cost of services received without charge	173.0 d	18.4		17.7	20.8	20.8
Net cost of HRSDC	19,251.6	19,029.1		19,088.5	18,830.1	18,615.8
Full Time Equivalents	12,531	17,094	18,006	18,068	17,060	17,060
aAs published in Main Estimates 2006-2007. bAmounts include resources for Corporate Services related to the Minister's Office, the Deputy Minister's Office, the Comptroller's Office and the Shared Services prorated to each program activity. cThe amounts include resources related to the Toronto Waterfront Revitalization Initiative. dIncludes services received without charge from SDC for corporate services.

Table 1B: Comparison of Planned to Actual Spending (including full-time equivalent) Social Development Canada

(millions of dollars)	2004-2005 Actual	2005-2006 Actual	2006-2007
			Main Estimates	Planned Spending	Authorities	Actual
Program Activities
Social Investment	28,365.2	29,959.4	31,009.7	33,291.9	33,139.1	33,107.4
Social Development Policy & Innovation	2.2	2.3	684.8	67.3	710.5	54.7
Service Delivery	144.2	152.3	508.8	447.1	522.7	498.4
Effective Corporate Services	829.2 a	-	-	-	-	-
Total Gross Expenditures	29,340.8	30,114.0	32,203.3	33,806.3	34,372.3	33,660.5
Respendable revenues	(780.8)	(295.0)	(301.2)	(300.9)	(332.7)	(312.1)
Total Net Expenditures	28,560.0	29,819.0	31,902.1	33,505.4	34,039.6	33,348.4
Plus: Specified Purpose Accounts
Canada Pension Planb	24,179.8	25,439.2		26,530.1	26,693.6	26,689.2
Departmental Recoveries charged to EI	560.6	66.6		68.8	74.0	61.2
Departmental Employee Benefit Plan recoverable from CPP Account	(25.9)	(27.1)		(17.8)	(19.9)	(28.1)
Consolidated Total SDC	53,274.5	55,297.7		60,086.5	60,787.3	60,070.7
Less: Non-Respendable Revenues	83.5	41.3		26.8	41.7	41.7
Plus: Cost of services received without charge	12.2	14.4		16.7	14.2	14.2
Net cost of SDC	53,203.2	55,270.8		60,076.4	60,759.8	60,043.2
Full Time Equivalents	11,390	6,632	6,226	6,206	6,042	6,042
a Includes Shared Services for both HRSDC and SDC. In 2005-2006, HRSDC's portion of the Shared Services was transferred to HRSDC. The remainder of Corporate Services was charged to the other program activities. bAmounts for Canada Pension Plan for 2004-2005 and 2005-2006 have been restated to include CPP Investment Board Administrative Expenses, as presented in 2006-2007

Table 2A: Resources by Program Activity Human Resources and Skills Development Canada

(millions of dollars)	Budgetary							Plus: Non Budgetary	Totalb
	Operating	Voted Grants and Contributions	Sub-total: Gross Expenditures	Statutory Grants and Contributions	Total Gross Expenditures	Less: Respendable Revenues	Total Net Budgetary Expenditures	Loans under CSFAA
Program Activities
Employment Insurance
Main Estimatesa	883.3	-	883.3	0.1	883.4	(783.3)	100.1	-	100.1
Planned Spending	879.3	-	879.3	0.2	879.5	(780.0)	99.5	-	99.5
Authorities	760.2	-	760.2	0.1	760.3	(674.0)	86.3	-	86.3
Actual	750.4	-	750.4	0.1	750.5	(664.5)	86.0	-	86.0
Employment Programs
Main Estimatesa	429.0	540.2	969.2	-	969.2	(322.2)	647.0	-	647.0
Planned Spending	444.9	552.3	997.2	-	997.2	(330.1)	667.1	-	667.1
Authorities	445.5	543.4	988.9	-	988.9	(334.7)	654.2	-	654.2
Actual	434.6	518.5	953.1	-	953.1	(324.9)	628.2	-	628.2
Workplace Skills
Main Estimatesa	96.1	88.4	184.5	-	184.5	(56.4)	128.1	-	128.1
Planned Spending	102.9	116.4	219.3	-	219.3	(62.0)	157.3	-	157.3
Authorities	106.9	79.3	186.2	-	186.2	(64.1)	122.1	-	122.1
Actual	102.9	38.6	141.5	-	141.5	(60.1)	81.4	-	81.4
Learning
Main Estimatesa	162.2	45.1	207.3	1,019.6	1,226.9	(15.6)	1,211.3	981.5	2,192.8
Planned Spending	162.5	45.1	207.6	1,019.6	1,227.2	(15.8)	1,211.4	981.5	2,192.9
Authorities	162.5	41.6	204.1	874.5	1,078.6	(16.4)	1,062.2	1,231.9	2,294.1
Actual	150.6	27.3	177.9	874.5	1,052.4	(9.4)	1,043.0	1,231.9	2,274.9
Labour
Main Estimatesa	213.4	3.9	217.3	-	217.3	(78.0)	139.3	-	139.3
Planned Spending	216.6	3.9	220.5	28.7	249.2	(78.0)	171.2	-	171.2
Authorities	227.7	3.9	231.6	-	231.6	(87.6)	144.0	-	144.0
Actual	227.7	2.7	230.4	-	230.4	(87.6)	142.8	-	142.8
Homelessness
Main Estimatesa	40.4	147.9	188.3	-	188.3	-	188.3	-	188.3
Planned Spending	40.2	147.9	188.1	-	188.1	-	188.1	-	188.1
Authorities	34.8	185.1	219.9	-	219.9	-	219.9	-	219.9
Actual	32.7	157.6	190.3	-	190.3	-	190.3	-	190.3
Service Delivery
Main Estimatesa	128.1	-	128.1	-	128.1	(89.2)	38.9	-	38.9
Planned Spending	109.4	-	109.4	-	109.4	(78.0)	31.4	-	31.4
Authorities	122.4	-	122.4	-	122.4	(88.6)	33.8	-	33.8
Actual	117.5	-	117.5	-	117.5	(83.7)	33.8	-	33.8
Policy and Program Support
Main Estimatesa	103.2	-	103.2	-	103.2	(81.1)	22.1	-	22.1
Planned Spending	120.1	-	120.1	-	120.1	(91.3)	28.8	-	28.8
Authorities	140.1	1.5	141.6	-	141.6	(96.6)	45.0	-	45.0
Actual	139.4	1.5	140.9	-	140.9	(96.5)	44.4	-	44.4
Total
Main Estimates a	2,055.7	825.5	2,881.2	1,019.7	3,900.9	(1,425.8)	2,475.1	981.5	3,456.6
Planned Spending	2,075.9	865.6	2,941.5	1,048.5	3,990.0	(1,435.2)	2,554.8	981.5	3,536.3
Authorities	2,000.1	854.8	2,854.9	874.6	3,729.5	(1,362.0)	2,367.5	1,231.9	3,599.4
Actual	1,955.8	746.2	2,702.0	874.6	3,576.6	(1,326.7)	2,249.9	1,231.9	3,481.8
a As published in Main Estimates 2006-2007. bTotal excludes Specified Purpose Accounts.

Table 2B: Resources by Program Activity Social Development Canada

(millions of dollars)	2006-2007
	Operating	Voted Grants and Contributions	Sub-total: Gross Expenditures	Statutory Grants and Contributions	Total Gross Expenditures	Less: Respendable Revenues	Totalb
Social Investment
Main Estimatesa	138.1	296.6	434.7	30,575.0	31,009.7	(30.4)	30,979.3
Planned Spending	160.3	296.6	456.9	32,835.0	33,291.9	(49.0)	33,242.9
Authorities	120.4	296.6	417.0	32,722.1	33,139.1	(49.1)	33,090.0
Actual	99.8	285.5	385.3	32,722.1	33,107.4	(41.7)	33,065.7
Social Development Policy & Innovation
Main Estimatesa	34.8	650.0	684.8	-	684.8	(14.9)	669.9
Planned Spending	67.3	-	67.3	-	67.3	(21.5)	45.8
Authorities	64.1	646.4	710.5	-	710.5	(24.0)	686.5
Actual	54.7	-	54.7	-	54.7	(19.0)	35.7
Service Delivery
Main Estimatesa	508.8	-	508.8	-	508.8	(255.9)	252.9
Planned Spending	447.1	-	447.1	-	447.1	(230.4)	216.7
Authorities	522.7	-	522.7	-	522.7	(259.6)	263.1
Actual	498.4	-	498.4	-	498.4	(251.4)	247.0
Total
Main Estimatesa	681.7	946.6	1,628.3	30,575.0	32,203.3	(301.2)	31,902.1
Planned Spending	674.7	296.6	971.3	32,835.0	33,806.3	(300.9)	33,505.4
Authorities	707.2	943.0	1,650.2	32,722.1	34,372.3	(332.7)	34,039.6
Actual	652.9	285.5	938.4	32,722.1	33,660.5	(312.1)	33,348.4
aAs published in Main Estimates 2006-2007. bTotal excludes Specified Purpose Accounts.

Table 3A: Voted and Statutory Items Human Resources and Skills Development Canada

		2006-2007
		Main Estimates a	Planned Spending	Authorities	Actual
Vote/ Statutory item	(millions of dollars)
	Department
1	Operating expenditures	323.2	333.3	352.5	343.5
5	Grants and contributions	825.4	865.6	854.8	746.2
(S)	Minister of Human Resources and Skills Development - Salary and motor car allowance	0.1	0.1	0.1	0.1
(S)	Minister of Labour - Salary and motor car allowance	0.1	0.1	0.1	0.1
(S)	Payments related to the direct financing arrangement under the Canada Student Financial Assistance Act	304.6	304.6	246.4	246.4
(S)	The provision of funds for interest payments under the Canada Student Loans Act	0.1	0.1	0.1	0.1
(S)	The provision of funds for liabilities including liabilities in the form of guaranteed loans under the Canada Student Loans Act	9.5	9.5	(17.8)	(17.8)
(S)	The provision of funds for interest and other payments to lending institutions and liabilities under the Canada Student Financial Assistance Act	46.4	46.4	53.8	53.8
(S)	Canada Study Grants to qualifying full and part-time students pursuant to the Canada Student Financial Assistance Act	119.9	119.9	146.4	146.4
(S)	Canada Education Savings Grant payments to Registered Education Savings Plans (RESPs) trustees on behalf of RESP beneficiaries to support access to encourage Canadians to save for post-secondary education of children	575.0	575.0	505.0	505.0
(S)	Canada Learning Bond payments to Registered Education Savings Plans (RESPs) trustees on behalf of RESP beneficiaries to support access to post-secondary education to children from low-income families	45.0	45.0	21.8	21.8
(S)	Wage Earner Protection Program	-	28.7	-	-
(S)	Supplementary Retirement Benefits - Annuities agents' pensions	-	-	-	-
(S)	Spending of proceeds from disposal of Crown Assets	-	-	0.1	0.1
(S)	Labour Adjustment benefits in accordance with the terms and conditions prescribed by the Governor in Council to assist workers who have been laid off as a result of import competition, industrial restructuring, or severe economic disruption	-	-	-	-
(S)	Civil Service Insurance actuarial liability adjustments	0.1	0.1	0.1	0.1
(S)	Payments of compensation respecting government employees and merchant seamen	48.0	48.0	48.8	48.8
(S)	Contributions to employee benefit plans	177.7	178.3	155.3	155.3
	Total Budgetary	2,475.1	2,554.7	2,367.5	2,249.9
	Plus: Non-Budgetary
	Loans disbursed under the Canada Student Financial Assistance Act	981.5	981.5	1,231.9	1,231.9
	Total Department	3,456.6	3,536.2	3,599.4	3,481.8
	Plus: Specified Purpose Accounts:
	Employment Insurance (EI) costs		16,260.7	15,931.7	15,814.6
	Other Specified Purpose Accounts costs		48.3	48.6	48.6
	Costs recoverable from the CPP		14.7	15.8	10.9
	Employee Benefit Plan recoverable from the EI Account		(140.6)	(145.8)	(120.5)
	Total Consolidated Expenditures		19,719.3	19,449.7	19,235.4
	Full Time Equivalents	18,006	18,068	17,060	17,060
a As published in Main Estimates 2005-2006.

Table 3B: Voted and Statutory Items Social Development Canada

		2006-2007
		Main Estimates a	Planned Spending	Authorities	Actual
Vote/ Statutory item	(millions of dollars)
	Department
10	Operating expenditures	295.6	289.1	303.5	269.9
15	Grants and contributions	946.6	296.6	943.0	285.5
(S)	Old Age Security Payments	23,255.0	23,255.0	22,878.8	22,878.8
(S)	Guaranteed Income Supplement payments	6,820.0	6,820.0	6,901.1	6,901.1
(S)	Allowance Payments	500.0	500.0	504.1	504.1
(S)	Universal Child Care Benefit	-	1,610.0	1,784.4	1,784.4
(S)	Child Care transfer to Prov. & Terr.	-	650.0	650.0	650.0
(S)	Energy Cost Benefits	-	-	3.7	3.7
(S)	Payments to private collection agencies pursuant to Section 17.1 of the Financial Administration Act	18.5	18.5	-	-
(S)	Spending proceeds from the disposal of surplus Crown assets	-	-	0.3	0.2
(S)	Contribution to employee benefit plans	66.4	66.2	70.7	70.7
	Total Department	31,902.1	33,505.4	34,039.6	33,348.4
	Plus: Specified Purpose Accounts:
	Canada Pension Plan		26,530.1	26,693.6	26,689.2
	Departmental Recoveries charged to EI		68.8	74.0	61.2
	Departmental Employee Benefit Plan recoverable from CPP Account		(17.8)	(19.9)	(28.1)
	Total Consolidated Expenditures		60,086.5	60,787.3	60,070.7
	Full Time Equivalents	6,226	6,206	6,042	6,042
a As published in Main Estimates 2006-2007.

Table 4A: Services Received Without Charge Human Resources and Skills Development Canada

(millions of dollars)	Actual 2006-2007
Contributions covering employers' share of employee's insurance premiums and expenditures paid by TBS	15.9
Salary and associated expenditures of legal services provided by Justice Canada	4.9
Total 2006-2007 Services received without charge.	20.8

Table 4B: Services Received Without Charge Social Development Canada

(millions of dollars)	Actual 2006-2007
Contributions covering employers' share of employees' insurance premiums and expenditures paid by TBS (excluding revolving funds)	13.7
Worker's compensation coverage provided by Human Resources and Skills Development	0.3
Salary and associated expenditures of legal services provided by Justice Canada	0.2
Total 2006-2007 Services received without charge	14.2

Table 5: Loans, investments and advances (non-budgetary)

Loans, Investments and Advances (millions of dollars)	2004-2005	2005-2006	2006-2007
	Actual	Actual	Main Estimates	Planned Spending	Authorities	Actual
Learning
Loans disbursed under the Canada Student Financial Assistance Act	1,215.7	1,331.3	981.5	981.5	1,231.9	1,231.9
Total	1,215.7	1,331.3	981.5	981.5	1,231.9	1,231.9

Table 6A: Sources of respendable and non-respendable revenue Human Resources and Skills Development Canada

(millions of dollars)	2004-2005a	2005-2006a	2006-2007
	Actual	Actual	Main Estimates	Planned Revenues	Authorities	Actual
Respendable Revenue
Employment Insurance EI Recovery	484.1	749.1	783.3	780.0	674.0	664.5
Employment Programs EI Recovery	138.5	322.7	322.2	330.1	334.7	324.9
Workplace Skills EI Recovery	49.7	60.0	56.4	62.0	64.1	60.1
Learning EI Recovery	13.9	1.4	15.6	15.8	16.4	9.4
Labour Worker's Compensation - OGD	74.1	76.6	77.4	77.4	87.0	87.0
EI Recovery	0.7	0.7	0.6	0.6	0.6	0.6
Homelessness
Service Delivery
CPP Recovery	5.3	13.0	14.7	14.7	15.8	10.9
EI Recovery	48.1	86.1	75.7	63.3	72.8	72.8
Policy and Program Support
EI Recovery	50.9	91.0	79.9	91.3	96.6	96.5
Total Respendable Revenue	865.3	1,400.6	1,425.8	1,435.2	1,362.0	1,326.7
By Type:
Total CPP Recovery	5.3	13.0	14.7	14.7	15.8	10.9
Total EI Recovery	737.8	1,311.0	1,333.7	1,343.1	1,259.2	1,228.8
Total Worker's Compensation - OGD	74.1	76.6	77.4	77.4	87.0	87.0
Non-Respendable Revenue
Total EBP Recovery from CPP	1.5	1.9	2.1	2.1	1.5	1.5
Total EBP Recovery from EI	83.8	132.9	140.2	140.6	120.5	120.5
Adjustment to Prior Years' Payables	7.5	6.2	-	-	6.0	6.0
Canada Student Loans	275.2	360.6	-	503.6	497.4	497.4
Actuarial Surplus - Government Annuities Account	0.2	3.5	-	-	8.3	8.3
User Fees
Federal Workers' Compensation Administrative Fees	2.0	2.1	-	2.2	2.2	2.2
Labour Fire Protection Engineering Service Fee	0.1	0.1	-	-	0.1	0.1
Miscellaneous Items	4.1	5.4	-	-	4.4	4.4
Total Non-Respendable Revenue	374.4	512.7	142.3	648.5	640.4	640.4
a. The actual figures are restated to reflect the 2006-07 Activity Architecture.

Table 6B: Sources of respendable and non-respendable revenue Social Development Canada

(millions of dollars)	2004-2005	2005-2006	2006-2007
	Actual	Actual	Main Estimates	Planned Revenues	Authorities	Actual
Respendable Revenue
Social Investment EI Recovery	-	-	6.1	5.7	-	-
CPP Recovery	23.0	36.1	24.3	43.3	49.1	41.7
Social Development Policy & Innovation EI Recovery	-	-	2.5	8.6	24.0	19.0
CPP Recovery	-	-	12.4	12.9	-	-
Service Delivery EI Recovery	69.1	66.6	60.6	54.5	50.0	42.2
CPP Recovery	122.6	192.3	195.3	175.9	209.6	209.2
Effective Corporate Services EI Recovery	491.5	-	-	-	-	-
CPP Recovery	74.6	-	-	-	-	-
Total Respendable Revenue	780.8	295.0	301.2	300.9	332.7	312.1
By Type:
Total EI Recovery	560.6	66.6	69.2	68.8	74.0	61.2
Total CPP Recovery	220.2	228.4	232.0	232.1	258.7	250.9
Non-Respendable Revenue
Total EBP Recovery from CPP	25.8	27.1	17.8	17.8	28.1	28.1
Total EBP Recovery from EI	52.3	8.0	7.0	7.0	7.4	7.4
Adjustment to Prior Years' Payables	1.8	2.5	-	-	2.5	2.5
User Fees
Searches of the CPP and OAS data bank to locate individuals	0.1	0.1	-	0.1	0.2	0.2
Social Insurance Number replacement card fee	1.9	1.9	-	1.9	2.0	2.0
Miscellaneous Items	1.6	1.7	-	-	1.5	1.5
Total Non-Respendable Revenue	83.5	41.3	24.8	26.8	41.7	41.7

Table 7A: User Fees Act

Note: The Tables 7B for Policy on Service Standards for External Fees Human Resources and Social Development Canada and Policy on Service Standards for External Fees Social Development Canada can be found on line at:
http://www.tbs-sct.gc.ca/est-pre/estime.asp.

User Fees Act - Human Resources and Skills Development Canada

A. User Fee	Fee Type (R) or (O)1	Fee Setting Authority	Date Last Modified	2006-2007					Planning Years
									2007-2008		2008-2009		2009-2010
				Forecast Revenue	Actual Revenue	Full Cost ($000)	Performance Standard	Performance Results	Forecast Revenue ($000)	Estimated Full Cost	Forecast Revenue ($000)	Estimated Full Cost	Forecast Revenue ($000)	Estimated Full Cost
Federal Workers' Compensation Administrative Fees	(O)	Government Employees Compensation Act	September 1990	2,200	2,174	3,400	90% of claims processed to the appropriate provincial workers' compensation authority within 24 hours	86%	2,300	3,500	2,400	3,600	2,500	3,700
Other Initiative - Labour Fire Protection Engineering Services Fees a	(O)	Financial Administration Act	June 1993	45	44	4,400	90% of plan review completed within 21 calendar days or 15 working days	88% of plan review completed within 21 calendar days or 15 working days	40	4,500	40	4,600	40	4,700
Fees charged for the processing of access requests filed under the Access to Information Act (ATIA) c	(O)	Access to Information Act	1992	5	6	1,243	Response provided within 30 days following receipt of request; the response time may be extended pursuant to section 9 of the ATIA. Notice of extension to be sent within 30 days after receipt of request.b The Access to Information Act provides more detail: http://laws.justice.gc.ca/en/A-1/218072.html.	96%	6	1,250	7	1,250	7	1,250
Total User Fees				2,250	2,224	9,043			2,346	9,250	2,447	9,450	2,547	9,650
B. Date Last Modified:
C. Other Information: a The Full Costs represent the total expenditures for Fire Protection Services program of which only a small portion is recoverable through user fees for the fire protection engineering service delivery to Crown Corporations. b Even though the legislative deadline is 30 calendar days, extensions are allowed depending on the complexity of the request. c On February 6, 2006, the government consolidated the Department of Human Resources and Skills Development with Social Development Canada to create a new department called Human Resources and Social Development Canada (HRSDC). 2006-2007 and Future years´ data for Social Development Canada is included with Human Resources and Skills Development Canada. 1Regulatory (R) or Other Products and Services (O).

Table 7A - SDC: User Fees Act - Social Development Canada

A. User Fee	Fee Type (R) or (O)1	Fee Setting Authority	Date Last Modified	2006-2007					Planning Years
									2007-2008		2008-2009		2009-2010
				Forecast Revenue	Actual Revenue	Full Cost ($000)	Performance Standard	Performance Results	Forecast Revenue ($000)	Estimated Full Cost	Forecast Revenue ($000)	Estimated Full Cost	Forecast Revenue ($000)	Estimated Full Cost
Search of the CPP and OAS data banks	(R)	Department of Social Development Act, Section 19	1998	144	211	211	Searches completed within 10 working days from receipt of request.a	95%	232	232	255	255	280	280
Social Insurance Number Replacement Card Fee	(R)	Financial Administration Act	1988	1,937	2,057	2,810	A card will be replaced within 10 working days after the receipt of the request.b	85%	1,937	2,810	1,937	2,810	1,937	2,810
Fees charged for the processing of access requests filed under the Access to Information Act (ATIA)c	(O)	Access to Information Act	1992	-	-	-	-	-	-	-	-	-	-	-
Total User Fees				2,081	2,268	3,021			2,169	3,042	2,192	3,065	2,217	3,090
B. Date Last Modified:
C. Other Information: a Depending on the volume of commercial search requests, the search will be completed no latter than 10 days after receipt of the request. b Performance standard introduced in 2004-2005 is considered as standard measure. c On February 6, 2006, the government consolidated the Department of Human Resources and Skills Development with Social Development Canada to create a new department called Human Resources and Social Development Canada (HRSDC). 2006-2007 and Future years' data for Social Development Canada is included with Human Resources and Skills Development Canada. 1Regulatory(R) or Other Products and Services(O)

Table 8: Progress Against the Department's Regulatory Plan

In order to reduce the volume of printed material, this table was not to be included in the printed Departmental Performance Report but can be found at:
http://www.tbs-sct.gc.ca/est-pre/estime.asp

Table 9: Details on Transfers Payments Programs

Human Resources and Social Development Canada has a number of transfer payment programs. These programs support individuals, communities, labour, other governments and Aboriginal organizations. HRSDC is subject to the revised policy on transfer payments, which was introduced on June 1, 2000. That policy requires departments to report on those payment programs that are worth at least $5 million.

Note: Actual figures reflect program costs and exclude operating resources necessary to deliver the programs.

1. Youth Employment Strategy
2. Aboriginal Human Resources Development Strategy
3. Aboriginal Skills and Employment Partnerships
4. Aboriginal Human Resources Development Program - the Joint Voisey's Bay Employment and Training Authority
5. Targeted Initiative for Older Workers
6. Enabling Fund for Official Language Minority Communities
7. Sector Council Program
8. Foreign Credential Recognition Program
9. Apprenticeship Incentive Grant
10. Training Centre Infrastructure Fund
11. Workplace Skills Initiative
12. Adult Learning, Literacy and Essential Skills Program
13. Canada Study Grant / Canada Access Grant
14. Canada Student Loans Program - Direct Financing Arrangement
15. Canada Student Loans Program - Interest Payments and Liabilities
16. Canada Student Loans Program - Liabilities
17. Canada Education Savings Program - Canada Education Savings Grant
18. Canada Education Savings Program, Canada Learning Bond
19. Social Development Partnerships Program
20. Guaranteed Income Supplement
21. Labour Market Agreements for Persons with Disabilities
22. New Horizons for Seniors Program
23. Old Age Security
24. Opportunities Fund for Persons with Disabilities
25. Allowance
26. Early Learning and Child Care
27. Universal Child Care Benefit
28. National Homelessness Initiative

Further information on these Transfer Payments Programs can be found at:
http://www.tbs-sct.gc.ca/est-pre/estime.asp

Table 10: Foundations (Conditional Grants)

During fiscal year 2006-2007, Human Resources and Social Development Canada was involved in the following Foundations.

1. Read to Me! Foundation Inc.
2. Peter Gzowski Foundation for Literacy
3. Canadian Council on Learning
4. The Winnipeg Foundation
5. The Canada Millennium Scholarship Foundation

Further information on these Foundations (Conditional Grants) can be found at
http://www.tbs-sct.gc.ca/est-pre/estimE.asp

Table 11 : Response to Parliamentary Committees, and Audits and Evaluations

Chapters	Comments
Response to the Auditor General (including to the Commissioner of the Environment and Sustainable Development - CESD)
November 2006 Report of the Auditor General of  Canada
CHAPTER 6 Old Age Security
Issue: There is a lack of consistency of administration across the country. Also, the Department is not in compliance with the requirements of the Financial Administration Act, which calls for the charging of interest on overpayments. Additionally, penalty provisions contained in the Old Age Security Act (OAS Act) have not yet been brought into force.	The Department will make improvements in collecting and reporting information on client satisfaction, services and overpayments, and issue a revised policy on overpayments. Royal Assent was given to Bill C-36 on May 3, 2007 this included amendments to the OAS Act to introduce improvements and to prescribe the conditions under which interest should be charged (e.g. deliberate misrepresentation). Furthermore, the penalty provisions are being updated, along with appropriate policies and procedures and will come into force on Order in Council as soon as this process has been completed. The government's response can be found at http://www.oag-bvg.gc.ca/domino/reports.nsf/html/20061106ce.html
February 2007 Status Report of the Auditor General of Canada
CHAPTER 1 - Advertising and Public Opinion Research
Issue: This was a follow-up audit that examined progress made in response to a 2003 audit report. There is one recommendation, which calls for written notification of research to be provided to Public Works Government Services Canada (PWGSC) prior to contact with research firms.	Treasury Board Secretariat, Privy Council Office and Public Works and Government Services agreed with the recommendation. The Department and Service Canada have formalized public opinion research procedures and centralized public opinion and research and advertising activity to improve overall management of the function. The government's response can be found at http://www.oag-bvg.gc.ca/domino/reports.nsf/html/20070201aa_e.html
CHAPTER 6 - The Management of the Social Insurance Number
Issue: Follow-up audit that assessed whether the Department and the Treasury Board Secretariat had taken satisfactory action to ensure the appropriate use of the SIN; to strengthen the process for issuing new Social Insurance Numbers and replacement cards; to ensure the accuracy, completeness, and reliability of data in the Social Insurance Register; and to improve the investigation of SIN-related fraud.	To address this issue, Service Canada will complete work currently underway on benchmark levels to define key performance indicators for the ongoing measurement of SIR completeness, accuracy and reliability. Based on these results, Service Canada will establish goals for SIR data and develop a plan to measure and report on performance in 2007-2008. The government's response can be found at: http://www.oag-bvg.gc.ca/domino/reports.nsf/html/20070206ab_e.html
November 2006 Commissioner of the Enviroment and Sustainable Development Annual Report
CHAPTER 4 - Sustainable Development Strategies
Issue:Chapter 4 of the 2006 Report of the Commissioner of the Environment and Sustainable Development observed that organizations whose progress was unsatisfactory, had poor systems for planning, implementing, and monitoring their sustainable development commitments.	Following the 2005-2006 audit of the departmental Sustainable Development Strategy for 2003-2006, the Department of Human Resources and Social Development Canada (which integrates the former departments of Human Resources and Skills Development Canada and Social Development Canada) developed a Sustainable Development Strategy for 2007-2009, which was approved in late 2006. The new strategy has strengthened the management structure, and established systems for planning, implementing, and monitoring its sustainable development commitments.
CHAPTER 5 - Environmental Petitions
Issue: A review of environmental petitions across the government found that HRSDC responded to 100% of them on time.
Internal Audits or Evaluations
To provide canadians with:	As demonstrated by the findings of the following:
Enhanced Canadian productivity and participation through efficient and inclusive labour markets, competitive workplaces and access to learning	Audit of the Office of Learning Technologies*
Safe, healthy, fair, stable, cooperative, productive workplaces and effective international labour standards	Audit of Occupational Health and Safety Preliminary Survey of the Federal Mediation and Conciliation Service* Audit of Wellness Program*
Enhanced income security, access to opportunities and well-being for individuals, families and communities	Early Implementation Review of New Horizons for Seniors Program* 2004-2005 Attest Audit of the Administrative Costs Charged to the Canada Pension Plan Account* 2005-2006 Attest Audit of the Administrative Costs Charged to the Canada Pension Plan Account Annual Audit of the Old Age Security Program Expenditures*
Achieve better outcomes for Canadians through service excellence	Evaluation of the Pleasure Craft License
Other Audits and Evaluations	Audit of Grants and Contributions - Segregation of Duties Information Technology Business Continuity Planning* Review Engagement of Consolidated Financial Statements* Audit of the Performance Tracking Directorate*
Efficient and inclusive labour market transitions through temporary income support and active employment measures	Reports produced in support of the 2005 Employment Insurance Monitoring and Assessment Report Summative Evaluation of Employment Benefits and Support Measures Delivered Under the Canada/Newfoundland and Labrador Labour Market Development Agreement* Formative and Summative Evaluation of Nunavut Benefits and Measures Delivered under the Canada-Nunavut Labour Market Development Agreement* Formative Evaluation of Youth Employment Strategy* Summative Evaluation of Employment Insurance Part I: A Summary of Evaluation Knowledge to Date*
Enhanced productivity and competitiveness of Canadian workplaces by supporting investment in and recognition and utilization of skills	Formative Evaluation of Foreign Credential Recognition Program*
* Approved by the Audit and Evaluation Committee.

Table 12: Sustainable Development Strategy

Following the consolidation of the Departments of Social Development Canada and Human Resources and Skills Development Canada into the Department of Human Resources and Social Development in February 2006, a new strategy was developed to guide the sustainable development efforts of the new department for 2007-2009 and was tabled in December 2006.

The vision of the new strategy is to support the Government of Canada's approach to sustainable development by committing the Department to achieve tangible results both in terms of greening its operations and in promoting long-term sustainability in Canadian society through social development and labour market policies and programs: "Advancing sustainable development by supporting a strong, inclusive labour market and society, and by being an example of sustainability in the provision of Government of Canada services to Canadians in a manner that reduces the impact on the environment".

Human Resources and Social Development Canada manages, through Service Canada, one of the federal government's largest regional and local service delivery networks across the country. In 2006-2007, the Department has made significant efforts to support the Government's objective on greening of its operations. For example, citizens have been encouraged to use direct deposit for social security and Employment Insurance cheques, more services and documentation were made accessible online to reduce paper usage, and energy consumption was reduced through the implementation of conservation-focused office design and energy-efficient lighting. Work is underway to refine existing performance indicators to measure progress against expected results and targets in supporting the greening of government operations.

The Department has developed, under Part II of the Canada Labour Code, new occupational health and safety regulations to deal with workplace violence, which are expected to come into force by the end of 2007, and are currently seeking to make amendments to the Hazard Prevention Program Regulations to further improve workplace safety and security in the federal jurisdiction.

The Department has undertaken work to develop a more effective process to conduct Strategic Environmental Assessments in support of its policy, plans and program proposals.

Detailed information on the 2007-2009 Sustainable Development Strategy (SDS-IV), including specific goals, objectives and targets, is available at the following departmental website:
http://www.hrsdc.gc.ca/en/cs/sp/hrsd/cpa/publications/reports/sds-2007-2009/hrsdc_sds_2007- 2009.pdf

Table 13: Procurement and Contracting

In order to reduce the volume of printed material, this table was not to be included in the printed Departmental Performance Report but can be found at:
http://www.tbs-sct.gc.ca/est-pre/estime.asp

Table 14: Client-Centered Service

In order to reduce the volume of printed material, this table was not to be included in the printed Departmental Performance Report but can be found at:
http://www.tbs-sct.gc.ca/est-pre/estime.asp

Table 15: Horizontal Initiatives

During fiscal year 2006-2007 Human Resources and Social Development Canada was involved in the following horizontal initiatives. Unless otherwise mentioned in the list, Human Resources and Social Development Canada acts as the lead department for these initiatives.

1. Aboriginal Human Resources Development Strategy
2. Aboriginal Skills and Employment Partnership Program
3. Labour Market Development Agreements
4. Youth Employment Strategy
5. Targeted Initiative for Older Workers
6. Foreign Credential Recognition Program
7. Sector Council Program
8. Canada Student Loans Program
9. National Homelessness Initiative
10. National Child Benefit
11. Multilateral Framework on Early Learning and Child Care
12. Early Childhood Development Agreement

For further information on the above-mentioned horizontal initiatives, see:
http://www.tbs-sct.gc.ca/rma/eppi-ibdrp/hrdb-rhbd/profil_e.asp

Table 16: Travel Policies

HRSDC applied the TBS travel policy parameters with respect to departmental travel transactions.

Specified Purpose Accounts
Human Resources and Skills Development Canada

Introduction

Specified Purpose Accounts are special categories of revenues and expenditures. They report transactions of certain accounts where enabling legislation requires that revenues be earmarked and that related payments and expenditures be charged against such revenues. The transactions of these accounts are to be accounted for separately.

Human Resources and Social Development Canada is responsible for the stewardship of three such accounts:

• the Employment Insurance Account;
• the Government Annuities Account; and
• the Civil Service Insurance Fund.

The Employment Insurance Account is a consolidated Specified Purpose Account and is included in the financial reporting of the Government of Canada. Consolidated Specified Purpose Accounts are used principally where the activities are similar in nature to departmental activities and the transactions do not represent liabilities to third parties but, in essence, constitute Government revenues and expenditures.

The Government Annuities Account is a consolidated Specified Purpose Account and is included in the financial reporting of the Government of Canada. It was established by the Government Annuities Act, and modified by the Government Annuities Improvement Act, which discontinued sales of annuities in 1975. The account is valued on an actuarial basis each year, with the deficit or surplus charged or credited to the Consolidated Revenue Fund.

The Civil Service Insurance Fund is a consolidated Specified Purpose Account and is included in the financial reporting of the Government of Canada. It was established by the Civil Service Insurance Act. Pursuant to subsection 16(3) of the Civil Service Insurance Regulations, the amount of actuarial deficits is transferred from the Consolidated Revenue Fund to the Civil Service Insurance Account in order to balance the assets and liabilities of the program.

The following information updates forecasted data on the Employment Insurance Account that the Department provided in the 2006-2007 Report on Plans and Priorities. That report presented multi year financial data and general information. Additional information on performance and year end data is available at the internet addresses provided in this section.

Employment Insurance Account

The table below summarizes the financial results for the EI Account from 2004-2005 to 2006-2007.

EI Account - Statement of Operations^a

(millions of dollars)	Actual
	2004-05	2005-06	2006-07
Expenditures
Benefits	14,748	14,418	14,079
Administrative Costs	1,542	1,576	1,636
Doubtful Accountsb	95	56	99
Sub-Total	16,385	16,050	15,815
EI Premiums and Penalties
Premiums	17,655	16,917	17,109
Penalties	51	50	56
Sub-Total	17,706	16,967	17,165
Variance	1,321	917	1,351
Premium Rate (% of Insurable Earnings)	2005	2006	2007
Employee	1.95%	1.87%	1.80%
Employer	2.73%	2.62%	2.52%
aThe EI Account is a consolidated SPA and is included in the financial reporting of the Government of Canada. Consolidated SPAs are used principally where the activities are similar in nature to departmental activities and the transactions do not represent liabilities to third parties but, in essence, constitute government revenues and expenditures. bRepresents write-offs and estimates of uncollectible account receivables for benefit overpayments and penalties imposed.

In 2006-2007 revenue from EI premiums increased due to growth in employment and earnings, partially offset by a lower premium rate and by the premium reduction associated with the introduction of the Quebec Parental Insurance Plan (QPIP), under which maternity and parental benefits in Quebec are a provincial responsibility as of January 2006. Meanwhile, EI benefits declined in 2006-2007 due to a decrease in the number of beneficiaries, consistent with lower unemployment, and due to the introduction of the QPIP. As a result, revenues to the EI Account for 2006-2007 exceeded expenditures by $1.4 billion. Including interest of $2.0 billion, the notional cumulative surplus in the EI Account was $54.1 billion at March 31, 2007.

More detailed information is reported in the 2006-2007 audited EI Account financial statements that are included in the 2007 Public Accounts of Canada, Volume 1, Section 4.³¹ HRSDC also offers information on Employment Insurance on its website.³² This provides information on the authority, objectives and details of the program as well as links to Actuarial Reports and the EI Commission's annual Monitoring and Assessment Reports.

Government Annuities Account

The table below summarizes the financial results for the Government Annuities Account from 2004-2005 to 2006-2007.

Government Annuities Account - Receipts and Disbursements

	Actual
(millions of dollars)	2004-2005	2005-2006	2006-2007
Actuarial Liabilities - Balance at Beginning of Year	405.8	377.2	347.2
Income	26.3	24.5	23.4
Payments and Other Charges	54.6	51.0	48.3
Excess of Payments and Other Charges Over Income for the Year	28.3	26.5	24.9
Actuarial Surplus	0.3	3.5	2.9
Actuarial Liabilities - Balance at End of the Year	377.2	347.2	319.4

The annual report and financial statements for Government Annuities are available in the 2007 Public Accounts of Canada, Volume 1, Section 6.³³

Civil Service Insurance Fund

The table below summarizes the financial results for the Civil Service Insurance Fund from 2004-2005 to 2006-2007.

Civil Service Insurance Fund - Receipts and Disbursements

	Actual
(millions of dollars)	2004-2005	2005-2006	2006-2007
Revenue
Opening Balance	7.1	6.6	6.3
Receipts and Other Credits	0.0	0.1	0.0
Payments and Other Charges	0.5	0.4	0.3
Excess of Payments and Other Charges Over Income for the Year	0.5	0.3	0.3
Balance at End of the Year	6.6	6.3	6.0

The annual report and financial statements for the Civil Service Insurance Fund are available in the 2007 Public Accounts of Canada, Volume 1, Section 6.³⁴

Specified Purpose Accounts
Social Development Canada

Introduction

Specified Purpose Accounts are special categories of revenues and expenditures. They report transactions of certain accounts where enabling legislation requires that revenues be earmarked and that related payments and expenditures be charged against such revenues. The transactions of these accounts are to be accounted for separately.

The Canada Pension Plan is a Specified Purpose Account but is not consolidated as part of the Government of Canada financial statements. It is under joint control of the government and the participating provinces. As administrator, the government's authority to spend is limited to the balance in the Plan.

The following information updates forecasted data on the Canada Pension Plan provided in Human Resources and Social Development Canada's 2006-2007 Part III - Report on Plans and Priorities.³⁵ That report presented multi-year financial data and general information. Additional information on performance and year-end data is available at the internet addresses provided in this section.

Canada Pension Plan

The following table summarizes the financial results for the Canada Pension Plan from 2004-2005 to 2006-2007.

More information relating to 2006-2007 is reported in the Canada Pension Plan financial statements which can be found in the 2007 Public Accounts of Canada, Volume 1, Section 6

CPP Summary

	2004-2005	2005-2006	2006-2007
($ millions)	Actual		Forecast 4	Actual
Revenue
Contributions	28,941	30,117	31,395	32,355
Investment Income
Canada Pension Plan	2,070	1,093	514	256
CPP Investment Board 1	5,014	12,193	1,574	12,788
CPP Investment Fund 2	(945)	(254)	N/A	-
Total Investment Income	6,139	13,032	2,088	13,044
Total Revenue	35,080	43,149	33,483	45,399
Expenditures
Benefit Payments	23,763	24,977	26,136	26,115
Administrative Expenses 3	417	462	529	574
Total Expenditures	24,180	25,439	26,665	26,689
Increase	10,900	17,710	6,818	18,710
Year-end Balance	83,411	101,121	107,939	119,831
1Canada Pension Plan Investment Board actual amounts are based on their audited financial statements. The CPP Investment Board invests mainly in equities. The investment income is determined mainly by the change in fair values of these investments. 2.The Canada Pension Plan Investment Fund is made up of provincial, territorial and government bonds. As of March 31, 2006, these are valued at fair value. Since May 2004, the rights and titles of the CPP Investment Fund bonds are being transferred, over a three year period and on a monthly basis, to the CPP Investment Board. The revenue of the fund is made up of the interest from the bonds as well as the change in fair values of these investments. The revenue from the Investment Fund is presented in both the "Canada Pension Plan" and the "CPP Investment Board" items of this section. 3.Administrative Expenses have been revised to include CPP Administrative Expenses as well as CPP Investment Board Administrative Expenses. 4. 2006-2007 Forecast are figures reported in the 2007-2008 Report of Plans and Priorities.

Statutory Annual Reports

Old Age Security

The Old Age Security program is one of the cornerstones of Canada's retirement income system. Benefits include the basic Old Age Security pension, the Guaranteed Income Supplement and the Allowance. The Old Age Security program is financed from Government of Canada general tax revenues. The following tables present information on monthly benefits, beneficiaries and payments by province or territory.

Statutory Annual Reports - Summary of Maximum Monthly Benefits

(dollars) Fiscal Year	Basic Pension	Income Supplement		Allowance		Increase
		Single	Married	Regular	Survivor
Monthly benefit by fiscal year
2006-2007 Actuals
January 1, 2007	491.93	620.91	410.04	901.97	999.81	0.0%
October 1, 2006	491.93	602.91	395.54	887.47	981.81	0.9%
July 1, 2006	487.54	597.53	392.01	879.55	973.05	0.6%
April 1, 2006	484.63	593.97	389.67	874.30	967.24	0.0%
2006-2007 Estimates
January 1, 2007	494.39	623.93	412.01	906.40	1,004.72	0.4%
October 1, 2006	492.42	603.52	395.93	888.35	982.79	0.8%
July 1, 2006	488.51	598.73	392.79	881.30	974.99	0.6%
April 1, 2006	485.60	595.16	390.45	876.05	969.18	0.2%
2005-2006 Actuals
January 1, 2006	484.63	593.97	389.67	874.30	967.24	1.0%
October 1, 2005	479.83	570.27	371.46	851.29	939.84	0.6%
July 1, 2005	476.97	566.87	369.24	846.21	934.24	0.7%
April 1, 2005	473.65	562.93	366.67	840.32	927.74	0.4%
Fiscal year average (annual benefits)
2006-07 Actuals	5,868.09	7,245.96	4,761.78	10,629.87	11,765.73	4.2%
2006-07 Estimates	5,882.76	7,264.02	4,773.54	10,656.30	11,795.04	4.4%
2005-06 Actuals	5,745.24	6,882.12	4,491.12	10,236.36	11,307.18	1.7%

Statutory Annual Reports - Number of Persons Receiving Old Age Security Benefits by Province or Territory and by Type

Province or Territory	March 2006				March 2007
	Old Age Security (OAS) Pension	Guaranteed Income Supplement (GIS)	Allowance	GIS as % of OAS	Old Age Security (OAS) Pension	Guaranteed Income Supplement (GIS)	Allowance	GIS as % of OAS
Newfoundland	69,356	44,869	4,401	64.69	70,794	44,864	4,489	63.37
Prince Edward Island	19,363	9,380	601	48.44	19,696	9,281	570	47.12
Nova Scotia	132,984	59,153	4,237	44.48	135,432	58,505	4,301	43.20
New Brunswick	105,377	53,181	4,112	50.47	107,663	53,560	4,252	49.75
Quebec	1,046,057	499,278	31,436	47.73	1,075,251	501,897	31,691	46.68
Ontario	1,571,843	468,064	26,986	29.78	1,606,920	468,269	27,864	29.14
Manitoba	157,927	60,623	3,530	38.39	159,080	58,949	3,488	37.06
Saskatchewan	145,999	59,366	3,392	40.66	146,036	57,631	3,356	39.46
Alberta	336,890	119,454	6,774	35.46	345,817	117,357	6,412	33.94
British Columbia	557,106	190,683	10,864	34.23	570,592	189,185	10,891	33.16
Yukon	2,258	760	42	33.66	2,370	774	42	32.66
Northwest Territoriesa	2,743	1,538	135	56.07	2,834	1,519	121	53.60
Internationalb	80,111	8,894	84	11.10	83,366	8,841	69	10.61
Total	4,228,014	1,575,243	96,594	37.26	4,325,851	1,570,632	97,546	36.31
aData for Nunavut are included. bPersons receiving Canadian Old Age Security benefits under International Agreements on Social Security.

Statutory Annual Reports - Old Age Security Payments, by Province or Territory and by Type, Fiscal Year 2006-2007

(dollars)
Province or Territory	Old Age Security (OAS) Pension	Guaranteed Income Supplement (GIS)	Allowance	Total
Newfoundland	411,525,865	182,762,070	24,667,906	618,955,841
Prince Edward Island	114,458,470	37,617,955	2,700,902	154,777,327
Nova Scotia	786,132,836	226,050,401	20,432,216	1,032,615,453
New Brunswick	623,875,572	212,110,600	21,648,056	857,634,228
Quebec	6,156,710,428	2,071,595,217	150,367,592	8,378,673,237
Ontario	8,906,364,267	2,199,894,137	152,276,172	11,258,534,576
Manitoba	919,371,232	235,306,726	18,271,392	1,172,949,350
Saskatchewan	856,384,593	229,029,935	17,773,153	1,103,187,681
Alberta	1,939,432,728	517,943,470	34,537,177	2,491,913,375
British Columbia	3,118,482,926	893,820,618	59,462,603	4,071,766,147
Yukon	13,580,323	3,191,305	251,150	17,022,778
Northwest Territoriesa	16,433,314	7,702,723	921,948	25,057,985
Internationalb	103,405,331	84,063,739	833,427	188,302,497
Total	23,966,157,885	6,901,088,896	504,143,694	31,371,390,475
Recovery tax portion of OAS	(1,087,335,231)			(1,087,335,231)
Total including recovery tax	22,878,822,654	6,901,088,896	504,143,694	30,284,055,244
aData for Nunavut are included. bPersons receiving Canadian Old Age Security benefits under International Agreements on Social Security.

Consolidated Report on Canada Student Loans Program

In August 2000, the Canada Student Loans Program was shifted from the risk-shared financing arrangements that had been in place with financial institutions between 1995 and July 2000 to a direct student loan financing plan.³⁶

This meant that the Program had to redesign the delivery mechanism in order to directly finance student loans. In the new arrangement, the Government of Canada provides the necessary funding to students and two service providers have contracts to administer the loans.

Reporting Entity

The entity detailed in this report is the Canada Student Loans Program only and does not include departmental operations related to the delivery of the Canada Student Loans Program. Expenditures figures are primarily statutory in nature, made under the authority of the Canada Student Loans Act and the Canada Student Financial Assistance Act.

Basis of Accounting

The financial figures are prepared in accordance with generally accepted accounting principles and as reflected in the Public Sector Accounting Handbook of the Canadian Institute of Chartered Accountants.

Specific Accounting Policies

Revenues

Two sources of revenue are reported: interest revenue on Direct Loans and recoveries on Guaranteed and Put Back Loans. Government accounting practices require that recoveries from both sources be credited to the Government's Consolidated Revenue Fund. They do not appear along with the expenditures in the CANADA STUDENT LOANS PROGRAM accounts, but are reported separately in the financial statements of Human Resources and Social Development Canada and the government.

• Interest Revenue on Direct Loans - Borrowers are required to pay simple interest on their student loans once they leave full-time studies. At the time they leave school, students have the option of selecting a variable (prime + 2.5%) or fixed (prime + 5%) interest rate. The figures represent the interest accrued on the outstanding balance of the government-owned Direct Loans. Borrowers continue to pay the interest accruing on the guaranteed and risk-shared loans directly to the private lender holding these loans. Effective August 1, 2005, the weekly loan limit increased from $165 per week to $210 per week of study. As more funds will be available to students, total loan disbursements will likely grow, and as a result the interest revenue generated will likely increase.
• Recoveries on Guaranteed Loans - The government reimburses the private lenders for any loans issued prior to August 1, 1995 that go into default (i.e., lenders claim any amount of principal and interest not repaid in full). The figures represent the recovery of principal and interest on these defaulted loans.
• Recoveries on Put-back Loans - Under the risk-shared agreements, the government will purchase from the participating financial institutions any loans issued between August 1, 1995 to July 31, 2000 that are in default of payments for at least 12 months after the period of study, that in aggregate, do not exceed 3% of the average monthly balance of the lender's outstanding student loans in repayments. The amount paid is set at 5% of the value of the loans in question. The figures represent the recovery of principal and interest on these loans.

Canada Study Grants and Canada Access Grants

Canada Study Grants and Canada Access Grants improve access to post-secondary education by providing non-repayable financial assistance to post-secondary students. Four types of Canada Study Grants are available to assist: (1) students with permanent disabilities in order to meet disability-related educational expenses (up to $8,000 annually); (2) students with dependants (up to $3,120 for full-time students and up to $1,920 for part-time students, annually); (3) high-need part-time students (up to $1,200 annually); and (4) women in certain fields of Ph.D. studies (up to $3,000 annually for up to three years). Two Canada Access Grants are available since August 1, 2005, to assist: (1) students from low-income families entering their first year of post-secondary studies (50% of tuition, up to $3,000); and (2) students with permanent disabilities in order to assist with education and living expenses (up to $2,000 annually)³⁷.

Collection Costs

These amounts represent the cost of using private collection agencies to collect defaulted Canada Student Loans. The loans being collected include: risk-shared and guaranteed loans that have gone into default and which the government has bought back from the private lender; and Direct Loans issued after July 31, 2000, that are returned to HRSDC by the third party service provider as having defaulted. As of August 1, 2005 the Canada Revenue Agency (CRA) Non Tax Collections Directorate undertook the responsibility for the administration of the collection activities of the guaranteed, risk-shared and direct student loans.

Service Provider Costs

Canada Student Loans Program uses third party service providers to administer loan origination, in-study loan management, post-studies repayment activities and debt management. This item represents the cost associated with these contracted services.

Risk Premium

Risk premium represents part of the remuneration offered to lending institutions participating in the risk-shared program from August 1, 1995 to July 31, 2000. The risk premium represents 5% of the value of loans being consolidated which is calculated and paid at the time students leave studies and go into repayment. In return, the lenders assume the risk associated with non-repayment of these loans.

Put-Back

Subject to the provisions of the contracts with lending institutions, the government will purchase from a lender the student loans that are in default of payment for at least 12 months and that, in aggregate, do not exceed 3% of the average monthly balance of the lender's outstanding student loans in repayments. The amount paid is set at 5% of the value of the loans in question. The figures also include any refund made to participating financial institutions on the recoveries.

Administrative Fees to Provinces and Territories

Pursuant to the Canada Student Financial Assistance Act (CSFA Act), the government has entered into arrangements with nine provinces and one territory to facilitate the administration of the Canada Student Loans Program. They administer the application and needs assessment activities associated with federal student financial assistance and in return they are paid an administrative fee. As of August 1, 2005 administrative fees paid to provinces were increased to improve the compensation for their part in the administration of the Canada Student Loans Program.

In-Study Interest Borrowing Expense

The capital needed to issue the Direct Loans is raised through the Department of Finance's general financing activities. The cost of borrowing this capital is recorded in the Department of Finance's overall financing operations. The figures represent the cost attributed to Canada Student Loans Program in support of Direct Loans while students are considered in study status. Weekly loan limits increased effective August 1, 2005. As more funds will be available to students, total loan disbursements are likely to grow, and as a result the in-study interest borrowing expense will rise.

In-Repayment Interest Borrowing Expense

The capital needed to issue the Direct Loans is raised through the Department of Finance's general financing activities. The cost of borrowing this capital is recorded in the Department of Finance's overall financing operations. The figures represent the cost attributed to Canada Student Loans Program in support of Direct Loans while students are in repayment of their Canada Student Loans.

In-Study Interest Subsidy

A central feature of federal student assistance is that student borrowers are not required to pay the interest on their student loans as long as they are in full-time study and, in the case of loans negotiated prior to August 1, 1993, for six months after the completion of studies. Under the guaranteed and risk-shared programs, the government pays the interest to the lending institutions on behalf of the student.

Interest Relief

Assistance may be provided to cover loan interest and suspend payments on the principal of loans in repayment for up to 54 months for borrowers experiencing temporary difficulties repaying their loans. The shift from Guaranteed and Risk-Shared Loans to Direct Loans did not alter interest relief for loans in distress from the borrower's perspective; however, the method of recording associated costs changed. For loans issued prior to August 1, 2000, Canada Student Loans Program compensates lending institutions for lost interest equal to the accrued interest amount on loans under Interest Relief (IR). For loans issued after August 1, 2000, an interest relief expense is recorded to offset the accrued interest on direct loans. Effective August 1, 2005 income thresholds used to determine IR eligibility increased in order to make IR accessible to a greater number of borrowers.

Debt Reduction in Repayment

Debt Reduction in Repayment assists borrowers experiencing long-term difficulties repaying their loans. It is a federal repayment assistance program through which the Government of Canada reduces a qualifying borrower's outstanding Canada Student Loans principal to an affordable amount after Interest Relief has been exhausted and only after 5 years have passed since the borrower ceased to be a student. As of August 1, 2005, the maximum amount of DRR assistance is $26,000, which is available to eligible borrowers in an initial deduction of up to $10,000, a second deduction of up to $10,000 and a final deduction of up to $6,000 For loans issued prior to August 1, 2000, Canada Student Loans Program pays the lending institutions the amount of student debt principal reduced by the Government of Canada under DRR. For loans issued after August 1, 2000, the Government of Canada forgives a portion of the loan principal.

Claims Paid and Loans Forgiven

From the beginning of the program in 1964 until July 31, 1995, the government fully guaranteed all loans issued to students by private lenders. The government reimburses private lenders for any of these loans that go into default (i.e., subject to specific criteria, lenders may claim any amount of principal and interest not repaid in full, after which the Canada Revenue Agency's Collection Services will attempt to recover these amounts).³⁸ The risk-shared arrangements also permitted loans issued from August 1, 1995 to July 31, 2000 to be guaranteed under specific circumstances. This item represents the costs associated with loan guarantees.

Pursuant to the Canada Student Loans Act and the Canada Student Financial Assistance Act, the government incurs the full amount of the unpaid principal plus accrued interest in the event of the death of the borrower or, if the borrower becomes permanently disabled and cannot repay the loan without undue hardship.

Bad Debt Expense

Under Direct Loans, the government owns the loans issued to students and must record them as assets. As a result, generally accepted accounting principles require a provision be made for potential future losses associated with these loans. The provision must be made in the year the loans are issued even though the losses may occur many years later. The figures represent the annual expense against the provisions for Bad Debt and Debt Reduction in Repayment on Direct Loans.

Alternative Payments to Non-participating Provinces and Territories

Provinces and territories may choose not to participate in the Canada Student Loans Program. These provinces and territories receive an alternative payment to assist in the cost of delivering a similar student financial assistance program.

Figure 1: Consolidated Canada Student Loans Programs - Combined Programs

(millions of dollars)	Actual		2006-2007
	2004-2005	2005-2006	Forecast	Actual
Revenues
Interest Revenue on Direct Loans	226.6	315.7	419.8	453.3
Recoveries on Guaranteed Loans	76.2	66.8	66.6	55.3
Recoveries on Put-Back Loans	11.0	13.1	17.1	14.5
Total Revenues	313.8	395.6	503.5	523.1
Expenses
Transfer Payments
Canada Study Grants & Canada Access Grants	64.5	129.7	119.9	146.4
Loan Administration
Collection Costsa	14.8	13.6	18.5	12.4
Service Bureau Costs	46.0	50.2	66.3	65.6
Risk Premium	5.5	2.7	4.8	1.8
Put-Back	4.2	4.3	4.4	4.7
Administrative Fees to Provinces and Territories	9.4	13.9	14.6	14.7
Total Loan Administration Expenses	79.9	84.7	108.6	99.2
Cost of Government Support
Benefits Provided to Students
In-Study Interest Borrowing Expense (Class A)b	163.8	159.3	166.5	185.7
In Repayment Interest Borrowing Expense (Class B)b	96.6	111.4	161.4	145.0
In-Study Interest Subsidy	16.1	12.1	6.6	11.5
Interest Relief	63.2	67.2	70.7	84.2
Debt Reduction in Repayment	27.1	31.4	15.2	20.1
Claims Paid & Loans Forgiven	27.7	24.8	16.5	24.2
Bad Debt Expensec
Debt Reduction in Repayment Expense	11.5	13.3	13.3	9.6
Bad Debt Expense	456.2	297.2	322.5	260.4
Total Cost of Government Support Expenses	862.2	716.7	772.7	740.7
Total Expenses	1,006.6	931.1	1,001.2	986.3
Net Operating Results	692.8	535.5	497.7	463.2
Alternative Payments to Non-Participating Provinces d	175.8	158.2	151.0	91.3
Final Operating Results	868.6	693.7	648.7	554.5
aThese costs are related to collection activities performed by the Private Collection Agencies. Effective July 31, 2006, the defaulted loans were transferred to CRA. Therefore, the collection costs for fiscal year 2006-2007 are reported in part by the Human Resources and Social Development Canada and in part by the Canada Revenue Agency. From April 1, 2006 to July 31, 2006, HRSDC reported $3.6M in collection costs. From August 1, 2006 to March 31, 2007, CRA reported $8.8M in collection costs. bThese costs are related to Canada Student Direct Loans but reported by the Department of Finance. cThis represents the annual expense against the Provisions for Bad Debt and Debt Reduction in Repayment as required under Accrual Accounting. The Bad Debt Expense figure for 2004-2005 include an adjustment of $257.1M following the revised Bad Debt Provision Rate published by the Office of the Chief Actuary in the Actuarial Report on the CSLP as at July 31, 2004. This adjustment is retroactive back to the beginning of the Direct Loans Regime (2000). In addition, the Bad Debt Expense figure for 2006-2007 includes an adjustment of $(52.9)M while the Debt Reduction in Repayment Expense figure includes an adjustment of $(3.8)M. These adjustments are also retroactive back to the beginning of the Direct Loans Regime (2000). It is the result of a new methodology. In fact, as published by the Office of the Chief Actuary in the Actuarial Report on the CSLP as at July 31, 2006, the methodology was changed to a prospective approach that uses a snapshot of the portfolio at a particular point in time to determine the amount of the allowance at that time. dStarting in 2003-2004, the figures represent the annual expense recorded under the Accrual Accounting as opposed to the actual amount disbursed to the Non-Participating Provinces. For 2006-2007, the total amount disbursed as Alternative Payments is $ 117.6 M.

 

Figure 2: Consolidated Canada Student Loans Programs - Risk Shared and Guaranteed Loans Only

(millions of dollars)	Actual		2006-2007
	2004-2005	2005-2006	Forecast	Actual
Revenues
Recoveries on Guaranteed Loans	76.2	66.8	66.6	55.3
Recoveries on Put-Back Loans	11.0	13.1	17.1	14.5
Total Revenues	87.2	79.9	83.7	69.8
Expenses
Loan Administration
Collection Costsa	7.8	6.7	7.2	5.3
Risk Premium	5.5	2.7	4.8	1.8
Put-Back	4.2	4.3	4.4	4.7
Total Loan Administration Expenses	17.5	13.7	16.4	11.8
Cost of Government Support
Benefits Provided to Students
In-Study Interest Subsidy	16.1	12.1	6.6	11.5
Interest Relief	34.8	23.3	14.0	20.8
Debt Reduction in Repayment	27.1	31.4	15.2	20.1
Claims Paid & Loans Forgiven	25.7	15.7	11.0	17.0
Total Cost of Government Support Expenses	103.7	82.5	46.8	69.4
Total Expenses	121.2	96.2	63.2	81.2
Final Operating Results	34.0	16.3	(20.5)	11.4
aThese costs are related to collection activities performed by the Private Collection Agencies. Effective July 31, 2006, the defaulted loans were transferred to CRA. Therefore, the collection costs for fiscal year 2006-2007 are reported in part by the Human Resources and Social Development Canada and in part by the Canada Revenue Agency.

 

Figure 3: Consolidated Canada Student Loans Programs -- Direct Loans Only

(millions of dollars)	Actual		2006-2007
	2004-2005	2005-2006	Forecast	Actual
Revenues
Interest Revenue on Direct Loans	226.6	315.7	419.8	453.3
Total Revenue	226.6	315.7	419.8	453.3
Expenses
Transfer Payments
Canada Study Grants & Canada Access Grants	64.5	129.7	119.9	146.4
Loan Administration
Collection Costsa	7.0	6.9	11.3	7.1
Service Bureau Costs	46.0	50.2	66.3	65.6
Administrative Fees to Provinces and Territories	9.4	13.9	14.6	14.7
Total Loan Administration Expenses	62.4	71.0	92.2	87.4
Cost of Government Support
Benefits Provided to Students
In-Study Interest Borrowing Expense (Class A)b	163.8	159.3	166.5	185.7
In Repayment Interest Borrowing Expense (Class B)b	96.6	111.4	161.4	145.0
Interest Relief	28.4	43.9	56.7	63.4
Loans Forgiven	2.0	9.1	5.5	7.2
Bad Debt Expensec
Debt Reduction in Repayment Expense	11.5	13.3	13.3	9.6
Bad Debt Expense	456.2	297.2	322.5	260.4
Total Cost of Government Support Expenses	758.5	634.2	725.9	671.3
Total Expenses	885.4	834.9	938.0	905.1
Net Operating Results	658.8	519.2	518.2	451.8
Alternative Payments to Non-Participating Provinces d	175.8	158.2	151.0	91.3
Final Operating Results	834.6	677.4	669.2	543.1
aThese costs are related to collection activities performed by the Private Collection Agencies. Effective July 31, 2006, the defaulted loans were transferred to CRA. Therefore, the collection costs for fiscal year 2006-2007 are reported in part by the Human Resources and Social Development Canada and in part by the Canada Revenue Agency. bThese costs are related to Canada Student Direct Loans but reported by the Department of Finance. cThis represents the annual expense against the Provisions for Bad Debt and Debt Reduction in Repayment as required under Accrual Accounting. The Bad Debt Expense figure for 2004-2005 include an adjustment of $257.1M following the revised Bad Debt Provision Rate published by the Office of the Chief Actuary in the Actuarial Report on the CSLP as at July 31, 2004. This adjustment is retroactive back to the beginning of the Direct Loans Regime (2000). In addition, the Bad Debt Expense figure for 2006-2007 includes an adjustment of $(52.9)M while the Debt Reduction in Repayment Expense figure includes an adjustment of $(3.8)M. These adjustments are also retroactive back to the beginning of the Direct Loans Regime (2000). It is the result of a new methodology. In fact, as published by the Office of the Chief Actuary in the Actuarial Report on the CSLP as at July 31, 2006, the methodology was changed to a prospective approach that uses a snapshot of the portfolio at a particular point in time to determine the amount of the allowance at that time. dStarting in 2003-2004, the figures represent the annual expense recorded under the Accrual Accounting as opposed to the actual amount disbursed to the Non-Participating Provinces. For 2006-2007, the total amount disbursed as Alternative Payments is for $117.6M.

Note to Reader:

The following unaudited financial statements are prepared in accordance with accrual accounting principles. Any other financial tables included in the Departmental Performance Report are prepared on a modified cash basis accounting in order to be consistent with appropriations-based reporting. Consequently, readers might not be able to reconcile financial information included in the following unaudited financial statements with the rest of the financial information included in this report.

Human Resources and Social Development Canada
Financial Statements (Unaudited)
for the Year Ended March 31, 2007

Human Resources and Social Development Canada
Management Responsibility for unaudited Financial Statements

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31^st, 2007 and all information contained in these unaudited financial statements rests with the Human Resources and Social Development Canada (HRSDC) management. These financial statements have been prepared by the management of Service Canada in agreement with the management of HRSDC and were prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

Some of the information in the financial statements is based on management's best estimates and judgments and gives due consideration to materiality. To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of HRSDC's financial transactions. Financial information submitted to the Public Accounts of Canada and included in HRSDC's Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the organisation.

Management is also supported and assisted by programs of internal audit and evaluation services and audit committees. The HRSDC Management Audit and Evaluation Committee (MAEC) is a management committee which provides advice and guidance to the Deputy Minister on the results-driven accountability system of the department. The key responsibility of the MAEC is to exercise active oversight on core areas of departmental control and accountability. As well, Service Canada's Audit & Evaluation Committee (AEC) provides assurance on all key aspects of Service Canada's control frameworks and practices, the assessment of the effectiveness of its service delivery, and the relevance and appropriateness of the information used to support decision-making and reporting. The Office of the Auditor General has free and full access to the MAEC and AEC

The financial statements of HRSDC have not been audited.

 

 

August 23, 2007

Human Resources and Social Development Canada
Statement of Operations (Unaudited)
For the year ended March 31

	2007	2006
	(in thousands of dollars)
Expenses (Note 4)
Social Investment	33,129,277	29,736,719
Employment Insurance	13,740,895	14,060,122
Employment Programs	2,657,610	2,543,417
Learning	1,373,160	1,371,586
Service Delivery	496,452	435,034
Homelessness	192,456	178,656
Labour	147,996	151,602
Workplace Skills	103,686	93,277
Social Development Policy and Innovation	47,377	2,172
Policy and Program Support	42,339	62,339
Total expenses	51,931,248	48,634,924
Revenues (Note 5)
Employment Insurance	19,129,299	18,330,478
Learning	498,281	362,118
Service Delivery	233,272	215,153
Social Investment	46,622	57,839
Labour	2,239	2,244
Social Development Policy and Innovation	57	14
Employment Programs	8	-
Homelessness	1	-
Policy and Program Support	-	134
Workplace Skills	-	-
Total revenues	19,909,779	18,967,980
Net cost of operations	32,021,469	29,666,944

The accompanying notes form an integral part of these financial statements

Human Resources and Social Development Canada
Statement of Financial Position (Unaudited)
At March 31

	2007	2006
	(in thousands of dollars)
Assets
Financial assets
Accounts receivable and advances (Note 6)	3,714,865	4,361,712
Canada Student Loans (Note 7)	7,960,945	7,028,065
Total financial assets	11,675,810	11,389,777
Non-financial assets
Prepaid expenses (Note 8)	16,573	23,341
Tangible capital assets (Note 9)	138,385	162,344
Total non-financial assets	154,958	185,685
Total	11,830,768	11,575,462
Liabilities
Accounts payable and accrued liabilities (Note 10)	1,238,732	1,179,135
Vacation pay and compensatory leave	53,068	57,105
Employee severance benefits (Note 11)	298,940	291,404
Government Annuities account (Note 12)	319,295	347,337
Due to Canada Pension Plan (Note 13)	53,584	150,851
Other liabilities (Note 14)	45,669	15,342
Capital lease obligations	-	6,079
Total liabilities	2,009,288	2,047,253
Equity of Canada (Note 15)	9,821,480	9,528,209
Total	11,830,768	11,575,462

Contingent liabilities (Note 17)
Contractual obligations (Note 18)
The accompanying notes form an integral part of these financial statements

Human Resources and Social Development Canada
Statement of Equity of Canada (Unaudited)
At March 31

	2007	2006
	(in thousands of dollars)
Equity of Canada, beginning of year	9,528,209	4,713,735
Net cost of operations	(32,021,469)	(29,666,944)
Current year appropriations used (Note 3)	36,830,046	33,360,496
Revenue not available for spending (Note 3)	(667,361)	(551,576)
Change in net position in the Consolidated Revenue Fund (Note 3)	(3,879,559)	1,640,012
Services provided without charge by other government departments (Note 19)	34,746	32,486
Change in equity due to transfer of activities (Note 16)	(3,132)	-
Equity of Canada, end of year (Note 15)	9,821,480	9,528,209

The accompanying notes form an integral part of these financial statements

Human Resources and Social Development Canada
Statement of Cash Flow (Unaudited)
For the year ended March 31

	2007	2006
	(in thousands of dollars)
Operating Activities
Net costs of operations	32,021,469	29,666,944
Non-cash items:
Amortization of tangible capital assets	(61,054)	(72,343)
Services provided without charge by other government departments	(34,746)	(32,486)
Adjustments to tangible capital assets	(6,116)	1,757
Net gain (loss) on disposal of tangible capital assets	(249)	282
Variations in Statement of Financial Position:
(Decrease) increase in accounts receivable and advances	(646,847)	1,256,824
Portion related to transfer of activities	(901)	-
Increase in Canada Student Loans	932,880	1,010,867
(Decrease) increase in prepaid expenses	(6,768)	6,675
Decrease in liabilities	37,965	2,565,809
Portion related to transfer of activities	4,350	-
Cash used by operating activities	32,239,983	34,404,329
Capital investment activities
Acquisitions of tangible capital assets	52,310	54,758
Transfer of work in progress to tangible capital assets	(9,096)	(9,806)
Proceeds from dispositions of tangible capital assets	(71)	(348)
Cash used by capital investment activities	43,143	44,604
Financing activities
Net cash provided by Government of Canada	32,283,126	34,448,933

The accompanying notes form an integral part of these financial statements

Human Resources and Social Development Canada
Notes to the Financial Statements (Unaudited)

1. Authority and objectives

The Department of Human Resources and Social Development Canada (HRSDC) was established, effective February 6, 2006, through the amalgamation of the departments of Human Resources and Skills Development Canada and Social Development Canada, as an agent of Her Majesty of Canada. It is a Department named in the Schedule I of the Financial Administration Act and reports to Parliament through the Minister of Human Resources and Skills Development Canada.

HRSDC works to improve the standard of living and the quality of life of all Canadians by promoting a highly skilled and mobile workforce as well as an efficient and inclusive labour market. It supports human capital development, labour market development and is dedicated to establishing a culture of life long learning for Canadians.

Service Canada (SC) is a branch of HRSDC and is the public's primary access point to many Government of Canada programs and services, providing better, one-stop service to more Canadians in more communities. SC will continue to bring federal services and benefits together making it easier for Canadians to get more of the help they need in one place. SC integrates a range of services from a number of federal departments to form a single service delivery network.

HRSDC operates under a number of Acts and Regulations: Department of Human Resources and Skills Development Act, Old Age Security Act and Regulations, Employment Insurance Act and Regulations, Government Annuities Act, Canada Pension Plan Act and Regulations, Canada Student Financial Assistance Act and Regulations, Canada Student Loans Act and Regulations, Corporations and Labour Unions Returns Act, Section 16, and Regulations, Fair Wages and Hours of Labour Act and Regulations, Family Orders and Agreements Enforcement Assistance Act, Federal-Provincial Fiscal Arrangements Act, Status of the Artist Act, Part II and Regulations, Vocational Rehabilitation of Disabled Persons Act and Wages Liability Act, Canada Labour Code and Regulations, Employment Equity Act and Regulations and Labour Adjustment Benefits Act.

Human Resources and Social Development Canada achieves its objectives under ten major programs:

Social Investment

Provides Canadians with pensions and benefits for retirement, death, and disability through the Old Age Security Act and the Canada Pension Plan. It also includes Social Investment programs, policies and grants and contributions designed to ensure that children, families, seniors, communities and people with disabilities are provided with knowledge, information and opportunities to move forward with their own solutions to social and economic challenge.

Provides support to families to ensure all children have the best possible start in life, that parents have choice in childcare, to ensure the needs of those who provide care to loved ones are taken into account and that families' economic security is sustained through programs such as the Canada's Universal Child Care Plan, the National Child Benefit, and Multilateral Framework on Early Learning and Child Care.

Employment Insurance

Provides temporary financial assistance for unemployed Canadians, as well as to Canadians who need to take a temporary absence from work due to sickness, pregnancy, to care for a newborn or adopted child, or to provide care or support to a gravely ill family member with a significant risk of death.

Employment Programs

Enables Canadians, including unemployed adult individuals and targeted groups such as youth and Aboriginal peoples, to develop their skills and encourage them to become self-reliant, invest in themselves and become more adaptable to labour market changes.

Learning

Supports the Government of Canada's significant investments in skills and learning to assist Canadians to acquire, throughout their lives, the education and skills that will enable them to participate more fully in a knowledge-based economy and society. In collaboration with provinces, territories, learning institutions, community-based organizations and other key stakeholders, the following programs are delivered: Canada Student Loans, Canada Study Grants, Canada Education Savings Grant, Canada Learning Bond, National Literacy Secretariat, Learning Initiatives Program, International Academic Mobility and Office of Learning Technologies.

Service Delivery

Provides direct, in-person service to clients through an integrated service delivery network as part of the Service Canada Initiative; delivering seamless citizen-centered service that is integrated, easy to access, simple to use, tailored for the individual circumstance, efficient and sustainable. This will enhance the integrity of programs by building public trust and confidence and ensuring that the right client receives the right service and benefits at the right time and for the intended purpose.

Homelessness

Assists communities, through partnerships, in implementing measures that help homeless individuals and families to move toward self-sufficiency, to become active in society and contribute to the economy.

Labour

The Labour program activity promotes and sustains stable industrial relations and a safe, fair, healthy, equitable and productive workplace within the federal labour jurisdiction. It collects and disseminates labour and workplace information, represents Canada at international labour activities, fosters constructive labour-management relationships and ensures that minimum labour standards and occupational health and safety protections are enforced.

Workplace Skills

Supports the collaboration of industry partners and stakeholders in identifying, addressing and promoting workplace skills development and recognition issues that reflect the realities of Canadian workplaces in our rapidly evolving labour market. Workplace also develops and disseminates knowledge and information from a national, regional and local perspective, which is vital in supporting and contributing to a well-functioning labour market.

Social Development Policy and Innovation

Leads and collaborates with key partners to mobilize the many levers across governments and society that together drive social development and well-being in Canada.

Advances policy development across the spectrum of new and emerging social policy issues, leading to the development of policies, programs and knowledge products that are relevant and responsive to Canadians' needs and expectations and that fosters social development and well-being in Canada.

Develops policies that enable communities to enhance their own skills and resources to address locally identified needs and improve the lives of Canadians.

Policy and Program Support

Provides an evidence basis for the review and development of broad policy frameworks and strategies. It provides audit, evaluation and research that underpin strategic policy and ensure accountability. It also oversees the establishment of relationships with other governments and stakeholders as well as plays a key role in planning, communications and ministerial support services.

2. Summary of significant accounting policies

The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

Significant accounting policies are as follows:

(a) Parliamentary appropriations - HRSDC is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the department do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statements of financial position are not necessarily those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the bases of reporting.

(b) Net Cash Provided by Government - HRSDC operates within the Consolidated Revenue Fund (CRF) which is administered by the Receiver General for Canada. All cash received by HRSDC is deposited to the CRF and all cash disbursements made by HRSDC are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.

(c) Change in net position in the Consolidated Revenue Fund is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non respendable revenue recorded by the department. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Revenues:

• EI Premiums are recognized as revenue in the period in which they are earned. EI Premiums earned in the period are measured from amounts assessed by the Canada Revenue Agency (CRA) and from estimates of amounts not assessed based on cash received. Premium revenue also includes adjustments between actual and estimated premiums of previous years.
• Interest revenues on student loans are recognized in the year they are earned.
• Recoveries of Canada Pension Plan administration costs are recognized in the accounts based on the services provided in the year.
• Other revenues are accounted for in the year in which the underlying transaction or event occurred that gave rise to the revenues.

(e) Expenses - Expenses are recorded on the accrual basis:

• Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.
• Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement.
• Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
• Services that are provided without charge by other federal government departments for the employer's contribution to the health and dental insurance plans and legal services are recorded as operating expenses at their estimated costs.

(f) Employee future benefits:

• Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government of Canada. HRSDC contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require HRSDC to make contributions for any actuarial deficiencies of the Plan.
• Severance benefits: Employees are entitled to severance benefits, as provided for under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

(g) Accounts receivable - Accounts receivable are stated at amounts expected to be ultimately realized. A provision is made for accounts receivable where recovery is considered uncertain.

(h) Canada Student Loans - Loans are recorded at original cost plus accrued interest receivable less reimbursements and valuation allowances. Interest revenue is accrued in the period earned for loans in good standing. Interest is not accrued on loans considered unrecoverable.

An allowance is recorded in HRSDC's financial statements in order to consider bad debts and debt reduction in repayment (DRR) for Canada Student Loans. The allowance rate is determined according to an actuarial estimate based on the age of the accounts and their status. For the year ended March 31, 2007, the rate was established at 14.6% (14.6% in 2006) of the disbursements incurred since the beginning of the program for bad debts and at 0.7% (0.7% in 2006) of the same amount for DRR. The allowance for bad debts is calculated on a monthly basis.

(i) Contingent liabilities - Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(j) Tangible capital assets - All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

Asset Class	Amortization Period
Machinery and equipment	5 years
Informatics hardware	5 years
Informatics software	3-5 years
Other equipment and furniture	5 years
Motor vehicles	5 years
Capital leases	term of the lease
Leaseholds improvements	term of the lease
Assets under construction	once in service, in accordance with asset type

(k) Measurement uncertainty - The preparation of these financial statements in accordance with the Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the determination of the allowances for doubtful accounts, the contingent liabilities, the liability for employee severance benefits, the EI premiums, the OAS benefit repayments and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. These estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary appropriations

HRSDC receives most of its operating funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, HRSDC has different net costs of operations for the year on a government funding basis than on an accrual accounting basis. Furthermore, as a consolidated specified purpose account, the Employment Insurance (EI) account expenses and revenues recognized in HRSDC's statement of operations do not affect Parliamentary appropriations. The differences are reconciled in the following tables:

(a) Reconciliation of net cost of operations to current year appropriations used:

	2007	2006
	(in thousands of dollars)
Net cost of operations	32,021,469	29,666,944
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (less):
Net EI transactions	3,302,393	2,268,843
Revenues not respendable by the department	667,361	551,576
Bad debts	(417,289)	(367,849)
Amortization	(61,054)	(72,343)
Services provided without charge by other government departments	(34,746)	(32,486)
Adjustments to grants and contributions	17,177	(9,403)
Refunds of program expense	56,306	8,482
Net (loss) gain on disposal of tangible capital assets	(249)	282
Decrease of allowance for loan guarantees and other allowances	9,229	12,987
(Increase) of severance pay accrual	(6,594)	(36,264)
Decrease (increase) in vacation pay and compensatory leaves	4,271	(3,605)
(Decrease) in prepaid expenses	(1,582)	(1,774)
Justice Canada legal fees	(6,298)	(6,067)
Reclassification of tangible capital assets	5	1,758
	35,550,399	31,981,081
Adjustments for items not affecting net cost of operations but affecting appropriations:
Add (less):
Canada Student Loans disbursed	1,231,928	1,331,300
Debt Reduction and Forgiveness of Canada Student Loans	3,504	97
Increase in prepaid expenses	973	1,582
Tangible capital assets acquisitions	52,310	54,758
Transfer of work in progress to finished assets	(9,096)	(9,806)
Capital leases repayments	28	1,484
Current year appropriations used	36,830,046	33,360,496

(b) Appropriations provided and used:

	2007	2006
	(in thousands of dollars)
Vote 1 - Operating expenditures	655,567	588,073
Vote 5 - Grants and contributions	1,797,801	1,137,944
Vote 7 - Debt Write offs	424	-
Statutory amounts:
Old Age Security	30,284,055	28,992,324
Canada Student loans	1,231,928	1,331,300
Other	3,669,239	1,434,290
Less:
Available for use in subsequent years	(111)	(367)
Lapsed appropriations:
Operating	(42,642)	(47,379)
Grants and contributions	(766,058)	(75,649)
Debt Write offs	(88)	-
Statutory	(69)	(40)
Current year appropriations used	36,830,046	33,360,496

c) Reconciliation of net cash provided by Government to current year appropriations used:

	2007	2006
	(in thousands of dollars)
Net cash provided by Government	32,283,126	34,448,933
Revenue not respendable by the department	667,361	551,576
Change in net position in the Consolidated Revenue Fund:
Decrease (increase) in accounts receivable and advances	647,748	(1,256,824)
Increase in liabilities (other than the Canada Pension Plan)	54,952	54,384
(Decrease) in Canadian Pension Plan (CPP)	(97,267)	(2,620,193)
Net EI transactions	3,302,393	2,268,843
Other	(28,267)	(86,223)
Current year appropriations used	36,830,046	33,360,496

4. Expenses

The following table presents details of expenses by category:

	2007	2006
	(in thousands of dollars)
Benefits and transfer payments
EI benefits and support measures	14,077,937	14,418,190
Individuals	32,786,425	29,938,701
Other levels of government within Canada	1,026,411	450,624
Non-profit organizations	694,845	687,811
Industry	30,367	27,225
Other countries and international organizations	2,645	2,578
Total transfer payments	48,618,630	45,525,129
Operating
Salaries and benefits	1,724,568	1,713,519
Professional and special services	416,295	371,297
Bad debts on Canada Student Loans	409,175	355,123
Administration costs related to EI	229,259	171,052
Rentals	193,464	172,563
Transportation and telecommunication	122,962	113,807
Bad debts	107,085	68,394
Amortization	61,054	72,343
Others	48,756	71,697
Total operating expenses	3,312,618	3,109,795
Total expenses	51,931,248	48,634,924

The operating expenditures of HRSDC include the consolidated expenditures of the EI account, which amount to $1,736,640 thousand ($1,631,894 thousand in 2006).

5. Revenues

The following table presents details of revenues by category:

	2007	2006
	(in thousands of dollars)
Employment Insurance account:
Employment Insurance (EI) premiums	17,109,171	16,916,659
Interest on the balance of the EI account	1,912,249	1,323,562
Penalties and interest on EI receivables	95,550	78,706
Subtotal EI revenues	19,116,970	18,318,927
Interest on Canada Student Loans	497,421	360,579
Recovery of Canada Pension Plan administration costs	278,911	270,345
Other revenues	16,477	18,129
Total revenues	19,909,779	18,967,980

6. Accounts receivable and advances

The following table presents details of accounts receivable and advances:

	2007	2006
	(in thousands of dollars)
Accounts receivable from other federal government departments and agencies:
EI premiums and benefit repayments receivable from the Canada Revenue Agency	1,253,655	1,501,075
Old Age Security benefit repayments receivable from the Canada Revenue Agency	1,087,336	1,656,523
Other	385,001	458,412
Accounts receivable external to the Government:
EI overpayments to be recovered	481,688	478,982
EI fines and penalties	180,445	203,731
Accrued interest on loans receivable	443,893	436,255
Other	586,451	345,192
Total accounts receivable	4,418,469	5,080,170
Less: Allowance for doubtful accounts on external accounts receivable	(716,737)	(731,595)
Net accounts receivable	3,701,732	4,348,575
Advances to Provincial Workers Compensation	13,013	13,013
Advances to employees	120	124
Total accounts receivable and advances	3,714,865	4,361,712

7. Canada Student Loans

Loans issued on or after August 1, 2000 are operated under the authority of section 6.1 of the Canada Student Financial Assistance Act, which authorizes HRSDC to enter into loan agreements directly with qualifying students. Direct Loans and the Risk-Shared Loans under the Canada Student Financial Assistance Act are provided interest-free to full-time students and afterwards bear interest at either a variable rate of 2.5% above the prime rate or a fixed rate of 5.0% above the prime rate. The maximum repayment period is 10 years.

Loans issued prior to August 1, 2000 include loans outstanding which are amounts related to student loans subrogated to the Crown under the Canada Student Loans Act and under the Canada Student Financial Assistance Act. The Guaranteed Loans under the Canada Student Loans Act are provided interest-free to full-time students and afterwards bear interest as was set by the Canada Student Loan Program. The maximum repayment period is 10 years.

	2007	2006
	(in thousands of dollars)
Direct Loans	9,430,977	8,199,049
Guaranteed Loans	435,395	554,910
Risk-Shared Loans	201,720	234,529
Unamortized discount on defaulted risk shared loans	(191,635)	(222,803)
Allowance for doubtful accounts	(1,915,512)	(1,737,620)
Total Canada Student Loans	7,960,945	7,028,065

Guaranteed and Risk-Shared loans write-offs for the year ended March 31, 2007 are $159 million ($54 million in 2006) and payments received while account is in write-off status are $0.3 million ($0.4 million in 2006).

8. Prepaid expenses

Prepayments on transfer payments are issued when it is necessary to meet program objectives and it is permitted under the agreement. Prepayments on transfer payments do not exceed the expenditures expected to be incurred by the recipient during April. Other prepaid expenses include prepayments of postage, rent, maintenance fees, legal fees and other operations expenses.

	2007	2006
	(in thousands of dollars)
Prepaid transfer payments	15,600	21,759
Other prepaid expenses	973	1,582
Total prepaid expenses	16,573	23,341

9. Tangible capital assets

	Cost					Accumulated amortization
Tangible capital asset class	Opening balance	Acquisition due to activities transfer	Acquisitions	Disposal, write-offs and adjustments	Closing balance	Opening balance	Acquisition due to activities transfer	Amortization	Disposal, write-offs and adjustments	Closing balance	2007 Net book value	2006 Net book value
	(in thousands of dollars)
Machinery & equipment	2,143	-	216	(35)	2,324	1,553	-	229	(35)	1,747	577	590
Informatics hardware	178,494	630	5,068	3,976	188,168	149,455	534	12,593	7,785	170,367	17,801	29,039
Informatics software	151,561	576	10,192	44	162,373	89,238	355	25,347	(19)	114,921	47,452	62,323
Other equipment & furniture	8,409	-	404	(125)	8,688	5,124	-	894	(124)	5,894	2,794	3,285
Motor vehicles	7,873	-	31	(668)	7,236	5,656	-	591	(563)	5,684	1,552	2,217
Capital lease - informatics hardware	11,578	-	-	(11,578)	-	9,263	-	-	(9,263)	-	-	2,315
Capital lease - other equipment	1,136	-	-	-	1,136	1,070	-	66	-	1,136	-	66
Work in progress for in-house development software	13,701	-	18,929	(9,096)	23,534	-	-	-	-	-	23,534	13,701
Leaseholds improvements	140,467	-	17,470	(2,868)	155,069	91,659	-	21,334	(2,599)	110,394	44,675	48,808
Total tangible capital assets:	515,362	1,206	52,310	(20,350)	548,528	353,018	889	61,054	(4,818)	410,143	138,385	162,344

Amortization expense for the year ended March 31, 2007 is $61.1 million ($72.3 million in 2006).

10. Accounts payable and accrued liabilities

	2007	2006
	(in thousands of dollars)
Accrued salaries and wages	92,890	49,860
Accounts payable and accrued liabilities to external parties	735,686	829,980
Accounts payable and accrued liabilities to other federal government departments and agencies	299,486	151,330
Allowance for alternative payments for non-participating provinces to Canada Student Loans	78,835	105,065
Allowance for loan guarantees	29,279	38,508
Other payables and accrued liabilities	2,556	4,392
Total accounts payable and accrued liabilities	1,238,732	1,179,135

11. Employee benefits

(a) Pension benefits: The department's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2% per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the department contribute to the cost of the Plan. The expense for the year ended March 31, 2007 amounts to $167.7 million ($180 million in 2006), which represents approximately 2.2 times the contributions by employees (2.6 in 2006). The department's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan’s sponsor.

(b) Severance benefits: The department provides severance benefits to its employees based on eligibility, years of service and final salary. The severance benefit liability is based on a percentage provided by Treasury Board, applied to the eligible payroll as at March 31. Treasury Board determines the percentage based on an actuarial evaluation of the future liability for the entire government eligible employees. The rate as at March 31, 2007 was 23.64% (23.2% at March 31, 2006). These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:

	2007	2006
	(in thousands of dollars)
Accrued benefit obligation, beginning of year	291,404	255,140
Increase due to activities transfer	942	-
Expense for the year	53,209	62,009
Benefits paid during the year	(46,615)	(25,745)
Accrued benefit obligation, end of year	298,940	291,404

12. Government Annuities

HRSDC administers the Government Annuities Accounts. This account was established by the Government Annuities Act, and modified by the Government Annuities Improvement Act, which discontinued sales of annuities in 1975. The account is valued on an actuarial basis each year, with the deficit or surplus charged or credited to the Consolidated Revenue Fund.

The purpose of the Government Annuities Act was to assist Canadians to provide for their later years, by the purchase of Government annuities.

Receipts and other credits consist of premiums received, funds reclaimed from the Consolidated Revenue Fund for previously untraceable annuitants, earned interest and any transfer needed to cover the actuarial deficit. Payments and other charges represent matured annuities, the commuted value of death benefits, premium refunds and withdrawals, and actuarial surpluses and unclaimed items transferred to non-tax revenues. The amounts of unclaimed annuities, related to untraceable annuitants, are transferred to non-tax revenues.

Total income amounted to $23.4 million ($24.5 million in 2006), $22.5 million ($24.4 million in 2006) of which represented interest of 7% credited to the account. Premiums received totalled $21,253 ($8,200 in 2006). Total disbursements of $48.3 million ($51 million in 2006) originated mainly from the $47.9 million ($50.5 million in 2006) in payments made under matured annuities. An amount of $71,877 ($98,379 in 2006) was used to refund premiums at death before maturity or when the annuity would have been too small, and $180,781 ($202,346 in 2006) was transferred to the Consolidated Revenue Fund as a result of unclaimed annuities.

	2007	2006
	(in thousands of dollars)
Government Annuities, beginning of year	347,337	377,266
Receipts and other credits	22,765	24,726
Payments and other charges	(50,807)	(54,655)
Government Annuities, end of year	319,295	347,337

13. Due to Canada Pension Plan (CPP)

The Minister of HRSDC, on behalf of the Government of Canada, is responsible for the administration of the Canada Pension Plan. The financial activities of the Canada Pension Plan (the Plan) are not part of HRSDC's reporting entity because it is under joint control of the federal and the participating provincial governments. Established in 1965, the CPP operates in all parts of Canada, except in Quebec which operates a comparable program.

The Plan is a compulsory and contributory social insurance program which is designed to provide a measure of protection to Canadian workers and their families against loss of earnings due to retirement, disability or death.

Under existing arrangements, all pensions, benefits and expenditures incurred in the administration of the Plan are financed from contributions made by employees, employers and self-employed persons, and from investment returns.

The CPP account (the Account) was established in the accounts of Canada by the CPP Act to record the contributions, interests, pensions and benefits and operating expenses of the Plan. It also records the amounts transferred to or received from the CPP Investment Board.

The revenues and expenses are recorded as increases and decreases to the account. The detailed revenue, expenses, assets and liabilities are reported in the CPP distinct set of Consolidated Audited Financial Statements. The year-end liability represents the balance of the CPP assets on deposit in the Consolidated Revenue Fund.

	2007	2006
	(in thousands of dollars)
Canada Pension Plan, beginning of year	150,851	2,771,044
Receipts and other credits	59,563,344	55,319,600
Payments and other charges	(59,660,611)	(57,939,793)
Canada Pension Plan, end of year	53,584	150,851

14. Other liabilities

Labour Market Development Agreement - Ontario: HRSDC and the Government of Ontario (Ontario) entered into a Labour Market Development Agreement on January 1st, 2007 where the design and delivery of the active employment benefits and support measures have been devolved to the province. A specified purpose account was established to account for funds received from Ontario to support interim administrative agreements.

Civil Service Insurance Fund: This account was established by the Civil Service Insurance Act, introduced to enable the Minister of Finance to contract with a person appointed to a permanent position in any branch of the public service, for the payment of certain death benefits. No new contracts have been entered into since 1954, when the Supplementary Death Benefit Plan for the Public Service and Canadian Forces was introduced as part of the Public Service Superannuation Act and the Canadian Forces Superannuation Act, respectively. As of April 1^st, 1997, the Department of HRSDC assumed responsibility for the administration and the actuarial valuation of the Civil Service Insurance Act.

Other liabilities: This account includes certain other funds in which special categories of revenues and expenses report transactions of certain accounts where enabling legislation requires that revenues be earmarked, and that related expenses be charged against such revenues. The expenses and revenues are recorded as increases and decreases to the liability accounts and are not recorded as revenues and expenses of HRSDC.

	2007	2006
	(in thousands of dollars)
Labour Market Development Agreement - Ontario	30,780	-
Civil Service Insurance Fund	6,133	6,284
Other liabilities	8,756	9,058
Total other liabilities	45,669	15,342

15. Equity of Canada

The department includes in its revenues and expenses transactions of the Employment Insurance program. The Employment Insurance Act and regulations requires that the employer and employee contributions and related revenue be segregated and that related expenses be charged against this revenue.

	2007	2006
	(in thousands of dollars)
Restricted Equity for EI, opening balance	50,816,262	48,547,419
Revenues under the EI program	19,116,970	18,318,927
Expenses under the EI program	(15,814,577)	(16,050,084)
Restricted Equity for EI, closing balance	54,118,655	50,816,262
Unrestricted Equity	(44,297,175)	(41,288,053)
Equity of Canada	9,821,480	9,528,209

16. Transfer of Activities

On September 12, 2005 the Prime Minister announced a significant reorganization of government. Effective April 1, 2006 Public Works and Government Services Canada (PWGSC) has transferred the Public Access Programs which includes the four following areas: Canada Site, Publiservice, Canada Enquiry Centre, and Gateways and Clusters; to the department under the Service Canada initiative. The prior year figures have not been restated to reflect this transfer. The effect on the 2007 Statement of Financial Position is shown as follows:

	2007
	(in thousands of dollars)
Assets
Financial assets
Accounts receivable and advances	901
Non-financial assets
Tangible capital assets (Note 9)	317
Total	1,218
Liabilities
Accounts payable and accrued liabilities	3,174
Employee severance benefits (Note 11)	942
Vacation pay and compensatory leave	234
	4,350
Equity of Canada	(3,132)
Total	1,218

The bulk of the revenues and expenses for these programs remained with PWGSC for the 2006-07 fiscal year as the funding will not be provided to the department until the 2007-08 fiscal year. Comparative figures are not available since the necessary financial information is not reasonably determinable.

17. Contingent Liabilities

(a) Claims and litigation

Claims, litigations and grievances have been made against the department in the normal course of operations. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the financial statements. Based on Justice Canada's legal assessment of potential liability, no liability was recorded at March 31, 2007.

(b) Loan guarantees

Losses on loan guarantees are recorded in the accounts when it is likely that a payment will be made to honour a guarantee and where the amount of the anticipated loss can be reasonably estimated. The amount of the allowance for losses is determined by taking into consideration historical loss experience and current economic conditions. The increase or decrease in the allowance for loan losses between years is recorded in operating expenses. As at March 31, 2007, HRSDC has guaranteed the following debt:

	Authorized Limit	Contingent Liability
	(in thousands of dollars)
Guaranteed loans under the Canada Student Loans Act	10,781,963	177,451

Under the Canada Student Loans Act, HRSDC guarantees loans made by banks, credit unions, and certain other companies to qualifying students. The terms of repayment are established on the basis of the attendance at a designated educational institution. As at March 31, 2007, HRSDC has an allowance for loan losses of $29.2 million for these guarantees ($38.5 million as at March 31, 2006).

18. Contractual obligations

The nature of the HRSDC's activities can result in some large multi-year contracts and obligations whereby HRSDC will be obligated to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

	2008	2009	2010	2011	2012 and thereafter	Total
	(in thousands of dollars)
Transfer payments	1,054,664	520,615	53,682	1,190	-	1,630,151
Operating and Maintenance	120,000	28,000	-	-	-	148,000
Total contractual obligations	1,174,664	548,615	53,682	1,190	-	1,778,151

19. Related party transactions

HRSDC is related in terms of common ownership to all Government of Canada departments, agencies and Crown Corporations. The department enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the department received services which were obtained without charge from other federal government departments as presented in part (a).

(a) Services provided without charge:

During the year, HRSDC received services without charge from other federal government departments. These services include the employer's contribution to the health and dental insurance plans and legal fees. These services without charge have been recognized in the department's Statement of Operations as follows:

	2007	2006
	(in thousands of dollars)
Employer's contributions to the health and dental insurance plans paid by Treasury Board Secretariat	29,600	29,054
Legal services provided by Justice Canada	5,146	3,432
Total services provided without charge	34,746	32,486

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General, are not included as an expense in the department's Statement of Operations.

(b) Agreements signed with other federal government departments:

HRSDC, through the Service Canada (SC) initiative, has several agreements with other federal government departments in order to provide Canadians with better access to programs and services. As of March 31, 2007, SC had signed agreements with the following departments: Agriculture and Agri-Food Canada, Citizenship and Immigration Canada, Canada Border Services Agency, Public Works and Government Services Canada, Passport Canada, Transport Canada, Veterans Affairs Canada, Department of National Defence, Public Service Commission, Royal Canadian Mounted Police, Canadian Heritage, Office of Indian Residential Schools Resolutions Canada and Fisheries and Oceans.

20. Comparative information

Comparative figures have been reclassified to conform to the current year's presentation.

• Previous Page
• Table of Contents
• Next Page