Company once slammed for gun registry errors to help take over student loans

OTTAWA - A company once blasted for gun registry snafus is now part of a corporation that will manage the troubled Canada Student Loans program.

Toronto-based Resolve Corp. won the five-year, $270-million contract to take over "end-to-end servicing" of debts accrued under the massive file next April 1.

The company will handle a $7-billion portfolio with an estimated 1.6 million borrowers in repayment.

Resolve was formed in 2004 through the merger of four smaller companies, including BDP Business Data Services Ltd. Former BDP chief executive officer Lawrence Zimmering now leads Resolve.

BDP made headlines after the federal privacy commissioner reported in January 2003 that envelopes bearing the names of dozens of gun registry applicants were found in bags frozen to the bottom of a dumpster. The sensitive information had been tossed with regular office trash at an undisclosed location.

Opposition MPs had a field day, noting that the addresses of dozens of homes containing guns would have been up for grabs had the bags fallen into criminal hands.

A Firearms Centre spokesman at the time said BDP immediately switched to paper shredders after it learned of the dumpster incident.

Conservative MP and anti-gun registry crusader Garry Breitkreuz, then an opposition Canadian Alliance member, also publicly assailed BDP in June 2002.

He cited Justice Department documents released under the Access to Information Act, dated April 10, 2002, showing a spike in errors after BDP won a contract to process firearms licence applications in July 2000.

"The number of licences issued with the wrong photograph increased from zero in 1999 to 99 in the year 2000, and to 157 in the year 2001," Breitkreuz said at the time.

Another Justice document dated May 19, 2002, showed that up to that point in the year, 563 licences had been issued with the wrong name, 178 licences with the wrong birth date, and 38 more with the wrong photograph, Breitkreuz said.

A spokesman for Resolve declined to comment on concerns raised by the Coalition for Student Loan Fairness about BDP's gun-registry track record.

"It is the government's program and we're not at liberty to say anything," said John Nevins.

A spokesman for the federal Public Works Department stressed that Resolve won the student loans contract after "a rigorous and competitive procurement process."

Borrower satisfaction and a reduction in student loan default rates are key goals against which Resolve's performance will be measured, said Denis Simard in an e-mailed response.

Resolve has already successfully managed a smaller proportion of loans for students attending private institutions over the last six years, he added.

The National Student Loans Service Centre is a clearing house of information for federal and some integrated provincial loans, although student groups have derided its ability to provide accurate and timely responses.

Edulinx Canada Corp. is currently the main service provider until its contract expires March 31.

Resolve Corp. won the contract to take over as of April 1 after Ottawa put out a tender to consolidate program suppliers.

But in what critics say is an ironic twist, Resolve last spring acquired Edulinx. The two companies are now merging databases, said Jason Bouzanis, a spokesman for Human Resources Canada. Edulinx describes itself on its website as "the student loan service division of Resolve Corporation."

"It's just a corporate takeover," said Mark O'Meara of the Coalition for Student Loan Fairness. "The contract is back, as far as I can see, with the people who originally lost it."

O'Meara launched www.CanadaStudentDebt.ca in 2002 as a forum for the red-tape odysseys of more than 6,000 debtors so far. It's devoted to former students swapping nightmarish stories of communication breakdowns, relentless collection agents and demolished credit ratings.

O'Meara says he has no confidence that the government will hold Resolve to account if service doesn't improve.

But Simard of Public Works said "the contract includes extensive performance measures and incentives to ensure the best possible service."

About 350,000 college and university students relied on loans worth $1.9 billion last year alone. While most debts are repaid in full and on time, default rates are estimated at about 25 per cent.

Whole websites are devoted to stressed-out tales of lost paperwork and bureaucratic horror stories that many borrowers blame for ruined credit ratings.

The Conservatives launched a review last spring to modernize and streamline the borrowing system. Results are expected in the next federal budget, likely this winter or spring.