E-311

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Assembly of Eastern Townships unemployed persons and Eastern Townships civil liberties union

April 24, 1998
Sherbrooke, Québec

Julien Delisle
Executive Director
(Check Against Delivery)


Good evening, Ladies and Gentlemen! It is an honour and a pleasure to be among you this evening as the representative of the Office of the Privacy Commissioner of Canada, to talk to you about the confidentiality of our personal information in a world where technology is evolving at a bewildering pace and is often used as a tool to watch and control us instead of contributing to our welfare.

I would first like to take a few minutes to talk about the federal agency that I represent. Our Commissioner is a Parliamentary officer whose primary task is to limit federal indiscretions with regard to your personal information. The Commissioner is at the same time an independent investigator, an auditor and, occasionally, a critic of the machinery of the federal government. His authority derives essentially from the Privacy Act, which applies to the hundred or so federal organizations which are subject to it. However, our Commissioner does not have a right of review over information gathered or under the control of the provincial or municipal governments, or the private sector.

The key function of the Act is that it regulates the collection, use and disclosure of personal information. It stipulates that a person has the right to review information that pertains to him and to ask that it be amended if need be. If a person is dissatisfied with the answers to his request, or if he considers that the collection, use or disclosure of personal information contravenes the Act, he can complain to us.

Technology has evolved a great deal in recent years and the way in which governments believe they can make use of it is of special concern to us at the Office of the Privacy Commissioner. All too often, they view technology as the ultimate solution to their systems management problems, and it is our right to privacy that is sacrificed on the altar of efficiency. In this respect the federal government is equally guilty.

Matching

Our investigation of the issue of data matching as carried out by Human Resources Canada in the administration of its employment insurance program, the subject of our meeting here today, enabled us to come to certain conclusions. For the benefit of those for whom the subject is still vague, here is what is involved: all travellers returning to Canada by a common air carrier must fill in a card (commonly referred to as the E-311) and submit it to the customs officers upon their arrival. This direct collection of information is carried out strictly for Customs Canada purposes, but the data collected are also used by Revenue Canada and Employment Insurance.

Human Resources Canada cross-checks the Customs cards with employment insurance claimant records to determine whether the claimants received benefits at the time that they were abroad, the purpose of the operation being to catch cheats, who are numerous according to the department.

Consulted unofficially since 1995 concerning the plan to match Customs and Employment Insurance data, and finding that the evidence of abuses is to a large extent anecdotal in nature, the employees of the Office of the Privacy Commissioner immediately asked Human Resources Canada and Revenue Canada to justify the matching project and to provide, among other things, a cost-benefit analysis. For those who may not be aware of it, I should explain that the departments have an obligation to notify the Office of the Privacy Commissioner 60 days in advance of proposed matching measures and to provide a full and detailed evaluation.

The entire project was divided into four stages: a feasibility study to gather data for the cost-benefit analysis, a second more in-depth feasibility study, a six-month pilot project and finally full implementation at the end of 1997.

A much more complex question...

To some people the Privacy Commissioner's initiatives, including my presence here this evening, literally mean spending public funds to defend abusers. On the whole the question is much more complex; what we object to is the fact that the government searches among the records of honest travellers and unemployment insurance claimants (and most of us are honest) to nab a few genuine abusers.

In short, it is assumed that everybody is guilty until the innocence of those who do not abuse can be established. Things have reached such a pass that women on maternity leave have even been asked to prove to the department's investigators that they did indeed have their children with them while on travel. You will perhaps be interested to know that this practice was discontinued when the Chair of the Quebec Conseil du statut de la femme [Council on the status of women] protested. It is clear to us that if we are to preserve and maintain respect for privacy, we must take steps to protect it, since it represents something of genuine worth, a basic right to private life. We should not be satisfied with having to manoeuvre after the fact to prove our innocence. However, let us return to the sequence of events.

Feasibility study

In order to gather the necessary data for an official matching proposal, Revenue Canada and Human Resources Canada signed an agreement in June 1995 according to which Revenue Canada would transmit to Human Resources Canada information on travellers so that the feasibility study on the detection of employment insurance abusers could get under way.

Under this agreement, cards filled in by travellers were to be made available as of July 1995. A sample of cards from nine airports was taken by Revenue Canada for the months of June, September and November 1994, as well as for February and March 1995. It should be noted that Human Resources Canada undertook at the outset not to take any punitive measures against persons identified during the data matching.

In fact, since Revenue Canada kept the travellers' cards on microfiches, Human Resources Canada had to hire additional personnel to convert, on Revenue Canada premises, the information contained in the approximately 16,000 cards used for the sample into electronic format and to record it on diskettes. The information in question here consists of the traveller's name, date of birth, postal code and periods of absence, as well as the numbers of the reels and microfiches on which the E-311 information is stored.

This electronic matching stage lasted five months and helped identify the names of 257 persons who were outside the country at the time that they received employment insurance benefits, or 1.5% of the total sample taken. Human Resources Canada then returned the diskettes to Revenue Canada and obtained photocopies of the E-311 cards of these 257 persons.

Matching project

After having analysed the results of the feasibility study, Human Resources Canada submitted an official data matching project to the Office of the Privacy Commissioner in January 1996. From the outset, at a meeting to discuss the pilot project, the Office of the Privacy Commissioner conveyed its misgivings about the project, especially about the use of retroactive data, the lack of notice given to travellers concerning the independent use of Customs cards during the pilot project, and the lack of a written agreement on the conditions governing the exchange. Human Resources Canada having completed its data matching proposal at the end of February and in March 1996, and our personnel having understood that all the concerns raised would be addressed before the project's implementation, the Office of the Privacy Commissioner advised the department in writing that it would not object to the execution of what we believed to be simply a pilot project.

Human Resources Canada again obtained the Revenue Canada data used during the feasibility study and merely confirmed the figures obtained. In July 1996 Human Resources Canada sent copies of all the employment insurance claim dockets identified, and of the E-311 cards, to the regional representatives of the employment insurance claimants concerned. This information was then forwarded to the appropriate Canada Employment Centre, which contacted the identified claimants to ask them why they had claimed employment insurance benefits while travelling.

Pilot project

Human Resources Canada saw the reprocessing of the data used for the feasibility study as the first stage of its pilot project to confirm the data obtained, but it was only in April 1997 that the departments signed an agreement governing this project. At the end of the project, Human Resources Canada had to decide whether it would become a permanent procedure; in the meantime, it reimbursed Revenue Canada for the cost of the equipment and the 30 employees needed to create the electronic data base. It should be noted here that Revenue Canada has added the purpose of the travel in addition to the information transmitted earlier. Thus Revenue Canada began, on a monthly basis, to provide Human Resources Development with computer tapes containing the declarations of Canadian travellers from December 1992 to June 1993 and from December 1994 to March 1995. With the help of a special computer program, the magnetic tape is matched up with the computerized data of the Commission's benefit and overpayment record. In this record is found the information gathered by the Commission, i.e. the claimant's name, address, date of birth and the periods during which benefits were paid.

There is an interesting aspect with regard to data retention. Although the retention period for E-311 microfiches is two years, Revenue Canada had been keeping them since 1992, without any apparent customs-related reason. One can readily imagine what this means when one realizes that some 18 million travellers and residents enter the country each year by air!

In short, the names of persons identified and the claim files were sent for verification and follow-up to Human Resources Canada, which took punitive measures in relation to claims prior to December 1994. The claimants were contacted and some who were unable to justify their absences had to reimburse benefits received during their periods of absence and had to pay fines. And yet in March 1997 the Minister of Human Resources Canada had explained to the Commissioner that there would be no prosecutions following the retroactive application of the program prior to 1996 and that only cases subsequent to January 1994 would be considered as having received overpayments.

Action stations

The substantial media coverage resulting from these prosecutions led to a veritable national debate, a debate that split the country. Those who were in favour of sound management of public funds and took a hard-line approach, hailed the government's move. Their opponents, the partisans of human rights, maintained that such extensive linkage infringed on the Privacy Act and that it represented a threat to fundamental rights.

Naturally, we at the Office of the Privacy Commissioner followed and took an active part in this debate, not hesitating to make known our position with regard to the issues ultimately at stake, but it was only on October 23, 1996 that the Office became officially involved when the first complaint was filed concerning E-311 and, specifically, the Customs/Human Resources data match. From that moment on, there were frequent exchanges and communications among the various parties involved.

Finally, in January 1997, B. Phillips, our Commissioner, wrote to the ministers of Revenue and Human Resources to voice his concerns with regard to the legality of the program under the Canadian Charter of Rights and Freedoms and the Privacy Act.

The ministers replied to him in writing in February that they had been informed that the program had been approved by our office. Two days later the Commissioner clarified his position and explained in writing once again that the agreement given had been solely with respect to the evaluation of a pilot project and not a government program. In a follow-up letter dated February 11, 1997 which was written after a meeting held the preceding day with the ministers, the Commissioner asked that the program be suspended until its legality had been established. A subsequent communication from the Privacy Commissioner to the ministers concerned in March 1997 dealt with the question of the Canadian Charter of Rights and Freedoms and suggested recourse to the courts to decide the legality of the matching.

I don't have sufficient time to go into all the minor details, but suffice it to say that all avenues were explored to make the departments in question aware of the privacy implications of this matching program. After having tried to mediate with the two departments concerned and met with two refusals, the Commissioner tried to strengthen his position by seeking a legal opinion from an eminent expert on constitutional law. The expert concluded that this was indeed an infringement of section 8 of the Canadian Charter of Rights and Freedoms and that the government did not have any solid grounds to justify such a search in the files. According to them, the matching program would be comparable to giving our police forces full powers to search our homes, without any need first to obtain a search warrant duly signed by a judge. This is unthinkable in itself. Naturally, this legal opinion was forwarded to Human Resources Canada and Revenue Canada but, notwithstanding everything and in spite of numerous meetings and exhausting discussions with Human Resources Canada, the Office of the Privacy Commissioner was unable to reach an agreement and decided to refer the matter to the courts.

As I mentioned earlier, for the Privacy Commissioner this is clearly an act of unreasonable search and seizure under section 8 of the Canadian Charter of Rights and Freedoms. At the same time, the government does not have the right, under the Privacy Act, to compel individuals to provide information for one purpose and then to use the same information for other purposes.

Finally, since March 1998, our case file has grown with a total of 898 complaints having been received. These complaints come from 305 individuals in all and can be divided into three distinct categories: against Human Resources Canada for the collection and use of the E-311 cards; against Revenue Canada for disclosing the E-311 cards; and against Revenue Canada for collecting information without use notification to verify eligibility for employment insurance. A detail that might interest you is that of the 898 complaints filed with the Privacy Commissioner, as of mid-March 1998, some 250 come from the province of Quebec, followed by 35 from Ontario, 10 or so from British Columbia, 5 from Alberta and one or two from each of the remaining provinces.

For data and statistics buffs, or simply those who are wondering if matching is worthwhile, here are a few facts that will illustrate what is at stake and why the departments directly involved are defending the program with such tenacity.

Each year matching such as that involved here makes it possible to investigate approximately a million cases. In 1996-97 alone, 290,000 overpayments were identified, 100,000 penalties were imposed and approximately 300 prosecutions were launched. In the same fiscal year, overpayments, penalties and fines totalled about $315 million. To this can be added the sum of about $250 million in employment insurance benefits that were not paid out to claimants because it was judged that they were not entitled to them.

It can therefore be seen that substantial sums of money are involved, which undoubtedly explains the energy expended in defending the data matching program.

The celebrated E-311 card

The E-311 card contains the following information: the traveller's name, address and date of birth, his flight number, the name of the carrier, the departure point, the date of departure from Canada, the return date, the value of goods purchased, the amount of the personal exemption claimed and the place of arrival.

Let me tell you right now that this is a much more detailed list than is really necessary for the departments' purposes. In the course of the enquiry, we were able to determine that all that should be accessible to the Department of Human Resources for matching purposes were the name, address, date of birth and duration of the trip. All too often the personal information collected goes well beyond what is really needed, as in the present case.

Through matching, it is possible to identify-for the period after 1994-all Canadian residents who completed a form E-311 and who travelled outside Canada while receiving employment insurance benefits. Persons' identities are then checked manually to determine whether benefits were indeed paid during the periods mentioned on the form and whether the absences outside the country were reported to the Employment Insurance Commission.

In the event of an undeclared absence during a benefit period, a letter is sent to the claimant informing him of the information obtained from Customs and inviting him to provide an explanation. Several scenarios can then follow:

The claimant may, if he so desires, obtain a copy of card E-311 and of the employment insurance cards. If the claimant states that he was not absent from the country, or if he is accused of not having declared his travel, an officer of the Commission continues the investigation, interviewing those involved and comparing signatures, or,

If the person does not explain his absence or offers an explanation that is not acceptable under the terms of the Employment Insurance Act, a recovery of overpayments is established, with or without a penalty.

Penalties and persons involved

To illustrate the scope of the situation, in 1995-96 more than 29,000 claimants declared that they had been absent from the country and, consequently, were subject to interruptions in their benefit periods. In fact these persons were obliged to declare themselves job-ready but were penalized for being absent from the country.

Under the Employment Insurance Act, the Commission can impose penalties on such claimants if it is established that the information provided is erroneous or false. The penalty can range from a mere warning to a fine equivalent to three times the weekly rate received. Moreover, in some cases the Commission may, under section 135 of the Act, impose a fine of not less than $200 and not more than $5,000 and a term of imprisonment of not more than 6 months.

It should be noted that if a penalty is imposed or if the Commission decides to demand reimbursement of the overpayments, the claimant is entitled to file a first-level appeal from the decision and go before a board of referees. Subsequently, he can appeal before an umpire, whose decision can be reviewed by the Federal Court of Appeal and even the Supreme Court.

Cases of fraud are detected among claimants and employers. As far as claimants are concerned, the Commission normally has access to information that can come from three different sources:

  • first, the Commission's automatic control programs based on work and undeclared earnings: about 75% of the overpayments recovered by the Commission come from this source;
  • second, the conducting of investigations involving groups of claimants in areas susceptible to this type of abuse; and
  • third, disclosures from third parties.

In conclusion...

How do things actually stand at present? That is a question to which I cannot give a fully transparent answer. Suffice it to repeat here that we are preparing to go to court and that the necessary documents are to be filed in the near future. However, there is something new on the horizon. As you are aware, all the initial negotiations with the Department of Justice and the other departments concerned ended in deadlock; nevertheless, an agreement was finally reached.

As you know, in his role as an ombudsman, our Commissioner cannot issue orders. However, under sections 41 and 42 of the Act, there may be a review by the Federal Court in cases of an institution's refusal to disclose personal information. Although there is a remedy of review by the Court of a decision to refuse disclosure, such a remedy does not exist in the case of non-consistent use. The Commissioner therefore had to negotiate with all the parties involved to arrive at an agreement that took this aspect into account before the courts.

As it turned out, all the parties reached an acceptable solution with respect to what the court should be asked to decide. All that I can tell you here is that the Federal Court will have to rule as to the primacy of the Privacy Act over the other acts and on this question of section 8 of the Charter.

In the meantime, every day there are claimants summoned to appear and explain themselves before the Commission, while the less combative elect simply to pay the bill presented to them-because they are ashamed, because they lack the appropriate defence tools or because they consider that the fight is lost in advance.

Others, who are luckier, obtain a deferral or an adjournment of the hearing for a period of up to a year or until the court decides (if a decision is reached before)-a solution that we would very much like to see applied to all the cases. For the time being, then, there is a glaring lack of consistency in the way the prosecuted claimants are treated. We at the Office of the Privacy Commissioner have not stopped receiving applications from the public, accepting complaints and replying to the many requests for information on this subject, as well as lending assistance and making our official position known.

To conclude, I would like to remind you that 10 years ago a citizen could choose to remain incognito and to be called simply Mr. or Ms. J. Doe; the concept of privacy was only starting to emerge. When we think about it, this was the time when both the private and public sectors had access to a large quantity of personal information about us but this information was unconnected. The upsurge in computerization and telecommunications abruptly upset this delicate balance by eliminating two obstacles that served to protect privacy: the volume of paper that our personal information represented, and the great difficulty-if not impossibility-of cross-checking information from various files and organizations without a computer.

We are now living in a totally decompartmentalized world, at the cutting edge of technology. To understand the stakes involved, we must realize that from the moment that we get up to the moment that we go to bed we are subjected to various forms of surveillance, each one more insidious and invasive than its predecessor. Our least movements and gestures in our apartment building, on the highway, at the automated teller, at the office, on the network, at the doctor's, on the telephone or during our moments of relaxation are noted, analysed and documented for various purposes.

To these must be added other types of mechanisms for intruding into our privacy, in particular the various electronic systems that make it possible to spy on employees' movements, productivity and slightest gestures; the use of satellites for various purposes, as was the case last month here in Quebec to trace a stolen vehicle, or in Toronto to follow people's movements, etc. There is also increasing talk about the imminent adoption of smart cards which would then become national identity cards on which our entire lives would be recorded: social insurance number, prior convictions and health record, with the subsequent addition of our credit rating, employment history-and that's not the half of it!

Despite all that, we must not give up the fight. Even though we have not perhaps been able to stem entirely the incursions into our private lives made possible by the technological developments of recent years, as in the case before us, we have nevertheless succeeded in serving notice on the invaders that they will have to pay a price, and that this will be the loss of our confidence, our votes and our financial support.

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