The Ottawa Citizen

February 1, 1997

Federal smart cards: privacy vs. savings

by Ken MacQueen


[fake sin card for Diefenbaker]
CHANGING ORIGINAL SIN: Plans for a national identity number to replace SIN cards set question of confidentiality against the need to cut costs. Photo Illustration by Robert Cross

This week, the worst fears of John Diefenbaker were sealed into envelopes and shipped to the provinces. Inside was a draft plan listing options for a national identity number.

As governments shed staff and increase computerization, there is growing pressure to drop personal names and assign individuals a unique identifier, rather like a bank or credit card number.

This is intended to speed access through an automated tangle of government services, and to step up monitoring to cut fraudulent use of health, welfare and other social services.

Perhaps the most emotionally loaded of the ideas considered by the Federal Provincial Territorial Working Group on Common Client Identifiers is an expanded and modernized Social Insurance Number.

Other options include generating a new national identity number, or pruning the tangle of legislation that has overgrown the so-called SIN card to find a secure way of matching personal data among agencies and levels of government.

"Obviously, it raises a number of issues that have to be appropriately dealt with, such as privacy and confidentiality," says Peter Lantos, a spokesman for the federal Human Resources department. "The SIN is perhaps one possible number but by no means the only option of providing these numbers."

The technical working group has prepared a confidential report that builds a "business case" for an identifier number. The report offers options rather than recommendations, leaving politicians to pick through the policy and privacy minefield that would result.

The SIN was introduced by the Liberals in 1964 over the spirited objection of then-opposition leader John Diefenbaker. He predicted, correctly, that use of the number would grow far beyond its intended purpose, identifying recipients of Unemployment Insurance and the new Canada and Quebec Pension plans. Today, legislation allows its use in 21 programs administered by 14 federal agencies, from National Revenue to Veterans Affairs, as well as provincial social service agencies.

Many private businesses use the SIN as an identity number, although the public isn't obligated to provide it in most cases.

Diefenbaker warned in 1964 of "dictatorship. "We want to know that this is not a snooping operation for the use of the government."

For all that, the original SIN is primitive stuff, Diefenbaker could hardly have conceived of today's "smart card" technology. Magnetic strips and computer chips could transform the SIN card into a kind of Canadian Express, the ultimate credit card for the use of services from any level of government.

It could replace health cards and drivers' licences, determine a person's citizenship, even act as a bank card for accessing unemployment insurance, welfare or pension payments.

It could be matched with tax records, to ensure all income is declared; with social-service databases to stop fraudulent collection of welfare in multiple jurisdictions; with Customs and Immigration to track medicare or employment insurance claims.

One plan to modernize the SIN was submitted to the federal government almost three years ago by management and staff of the Central Index, the agency in Bathurst, N.B., that administers the SIN database.

Those who administer the SIN call it inefficient, outdated and often inaccurate.

"The security features of the SIN card are practically non-existent, making it more susceptible to misuse by unscrupulous individuals to defraud social-security programs," says the proposal, Modernization of the SIN, submitted in 1994 to the human resources department.

The report was obtained for the Citizen under the federal Access to Information Act by Ottawa researcher Ken Rubin.

The Bathurst group proposed a SIN card "containing digitized personal and security information, linking card to holder using voice print, biometrics, digitized photos or other technology."

The modernized card would be required to receive or apply for social security benefits and services at any level of government. Such smart cards could save tens of millions in administrative duplication, it claimed.

More important is its potential to "weed out" fraud, says the Bathurst proposal. A modernized SIN registry could track the more than $94 billion in social programs paid by all levels of government.

The rate of fraud could range as high as one per cent to four per cent of benefits paid, the report estimates. "Accordingly, the new card system could save governments billions of dollars."

A signature strip is the only security feature on the current plastic card. Until 1976, cards were issued without requiring a secondary piece of identification, meaning the authenticity of some 16 million numbers can't be verified.

Human Resources officials say there is pressure from some provinces and municipalities to improve the integrity of the SIN register or to come up with a new identity number.

All governments want a better handle on those who draw most heavily on social services -- the poor, says Rubin, an access and privacy consultant. "The most vulnerable tend to be the ones whose privacy is invaded first."

Proponents of smart cards, however, say they actually enhance privacy. For instance, information on some cards can't be accessed unless a fingerprint scan matches digitized information on the card.

Toronto considers system

Such a system is being considered for welfare recipients in Metro Toronto. They would be issued cards allowing them to withdraw their monthly cash entitlement through any local bank machine, cutting administration and offering recipients greater freedom and dignity.

Similar systems are in place in several European countries, and are planned in Britain and the U.S. Virtually all provinces have plans for smart-card technology for health care or drivers' licences.

Ontario's Conservative government had sweeping plans for a single identity card to replace everything from drivers' licences and health cards to welfare identification and hunting licences.

That is now on the back burner, concedes Chris Renaud, technology policy officer for Ontario's Management Board. The advantages in administrative savings, fraud detection and public convenience ran into legislative barriers prohibiting the matching of unrelated information.

"There are some very large issues that would have to be resolved before it did go ahead, and they would include things like security and privacy."

Privacy concerns forced the New Democrats in B.C. last year to curtail legislation giving the province broad rights to share and match information -- on welfare recipients, for example -- with other governments and even the U.S.

The problem, federal privacy commissioner Bruce Phillips noted in his most recent report, is that government's respect for individual privacy hasn't always kept pace with "new, glitzy technologies," or appetites to cut spending and ferret out cheats.

"Improperly applied," he warned, "these technologies can be powerful surveillance tools, delivering the fatal blow to an already fragile and embattled right."

In the end, a less high-blown issue may decide in favor of a smarter SIN or a national identity number: Smaller government means fewer people and greater reliance on technology.

As people grow comfortable with identity numbers and smart cards for tellerless banking and cashless commerce, they may grow less resistant to clerkless government.

Communicating with the swipe of a card or a computer access code would be easier, noted one information technologist, than finding a government employee to answer the phone.

ID proposal

Federal Privacy Commissioner Bruce Phillips has proposed ground rules for the design of smart cards, "to ensure that government institutions take privacy and other ethical principles into account." They include:

  • The personal information collected should be directly related to a government program.
  • The information should be collected directly from the individuals, and they should be notified of its purpose.
  • There should be regulations governing how long is information kept, how its accuracy is assured, and how it is it disposed of.
  • Clear rules must outline who is authorized to read the card.
  • Each application on a card must be segregated to prevent the crossover of unrelated data, such as medical information going to Revenue Canada.
  • Individuals should have the right to read the information contained on their cards.
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