Public Safety Committee on May 13th, 2014

[The Chair, Conservative, Daryl Kramp]

Thank you very much, Mr. Tupper.

Thank you, Mr. Rousseau.

Now, Mr. Norlock, please, you have five minutes.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Thank you very much, Mr. Chair.

Through you to the witnesses, thank you for appearing today.

Through you, Mr. Chair, in response to a previous questioner who was very worried about government cutbacks regarding social transfers, I would remind the committee that back in the mid-nineties there was a social transfer cutback by the federal government both to social services and to health, for somewhere in the vicinity of $25 billion.

I know that worried him very much.

Also, I'd ask the witnesses, would you agree with me that the definition of “insanity” is doing the same thing over and over again and expecting a different result?

[Shawn Tupper]

Sure.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Would you also agree with me that one of the things you're trying to do, or that you've been doing since this program began, is to look at innovative ways of achieving better results with the money that is available for crime reduction?

[Shawn Tupper]

Yes.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Would you agree with me that there are some models out there—and I think you mentioned it in your questioning—that have not been tried in Canada? Our great researchers have found that one of the leaders in just one part of doing things differently—and I'm referring to social impact bonds—is the United Kingdom. They seem to be having the most success.

Also, in the 2014 budget in the United States, President Obama brought in some programs like social impact bonds and other innovative crime reduction ways because the old ways just don't tend to work.

Would you agree with me that Australia is also doing some things in that regard?

But we don't have to look to other countries. I'm sure you are aware that in 2011, the YMCA in Toronto issued community bonds in regard to social housing because we know giving people decent places to live is part of crime reduction. The LIFT Philanthropy Partners in Canada, RBC's impact fund, $20 million—there are private sector dollars out there doing some things that it makes sense for the federal government to team up with. Would you agree with that?

Would you also agree that even in Quebec, we have the Mouvement des caisses Desjardins, with their Placement à rendement social, which also attacks this. These are significant dollars using money out of people's RRSPs and other things, to invest in. Isn't that a good way for governments to work with communities to get things done in a new and innovative way?

We're looking at British Columbia, who's also trying this. We're looking at Alberta, in the 2012 mandated results-based budget. We're also looking at the 2012 Commission on the Reform of Ontario's Public Services, also known as the Drummond report, which suggested the Province of Ontario look at that. It's unfortunate they haven't because they have a deficit of $12 billion now. But going on to Nova Scotia and the 2013 Speech from the Throne, they also mentioned social impact bonds as part of a way of reducing crime.

Have you studied those or looked at those, and could you let the committee know the results of your investigation into these and how you think they have been successful? Or, if the federal government were to head down in that direction, how do you think we should twig those very things so that we can maximize the number of dollars available for crime prevention by working with willing partners like the provinces and like non-profit agencies and others?

Would you like to make a comment on those statements?

[The Chair, Conservative, Daryl Kramp]

Very quickly, since we're pretty near out of time.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Mr. Chair, if they wouldn't mind....

If you don't feel there was sufficient time to answer those questions, you could, in writing, get back to the committee, or better still, perhaps attend another committee meeting.

[Shawn Tupper]

I can say very quickly that I know all of the organizations you've identified because I've been meeting with them and speaking with them about our ideas over the last eight years. I'm a fellow of the Rockefeller Foundation, working on social financing. There is a very active community here. All of the organizations you identified are trying to do leadership in Canada.

The one you missed that is, I think, absolutely the most fantastic in all of country is Vancity. I think British Columbia is a real hotbed of this kind of thinking and innovation. The British Columbia government has put in place an assistant deputy minister responsible solely for social innovation within their government.

It's active, it's hot, and these are the new tools for how governments at all levels, all orders of government, can work together to get better outcomes for our communities.

[The Chair, Conservative, Daryl Kramp]

Fine. Thank you very much, Mr. Tupper and Mr. Norlock.

Now to Madame Doré Lefebvre....

[Rosane Doré Lefebvre, NDP, Alfred-Pellan, QC]

Thank you very much, Mr. Chair.

In Canada, right now, there are not really a lot of social finance examples that we can use if we want to fund organizations or projects. You have probably looked at how it works in other countries. We often hear about the United Kingdom using this practice.

There is one thing I don't understand. The private sector surely wants to invest in social finance because it can get something out of it. Could you tell me how that works and where it is in effect? Does the government pay dividends?

Once again, I will use the example of young people, in this case the rehabilitation program for troubled or street gang youth. This is one of the priorities of Public Safety Canada. These young people do not bring in money for the private company that invests in the program.

What is the benefit of investing in social finance for the company?

[Shawn Tupper]

For a lot of people, frankly, it's part of philanthropy. A lot of corporations already spend a fair amount of money that is not about return on investment for the corporation, but rather, is about contributing to their communities. There are a lot of investors who are simply trying to design different mechanisms for making investments through the marketplace that, again, have that double return. The idea is that you get a return for your investment but you also get a social impact, and they are trying to bring those things together. There is an acknowledgement, in a market context, that you would get less money on your return, because they aren't the lucrative sorts of investments that are possible in other sectors that are more monetized.

The very idea is that these are individuals and corporations that actually believe they want to put their money to social good. As I said, one of the best areas in Canada that is worth exploring, simply by way of a comparative analysis, is what is done in the environment sector. For instance, I can speak to a small family foundation that on Vancouver Island bought up tracts of land so they could prevent trees from being cut down. They funded that by cutting down a small section of trees, creating high-end condos that they sold for a profit, which reinitialized the foundation's base of funding but allowed them to protect big tracts of land on Vancouver Island. That's a simple example of where a small family was able to make a simple investment to protect large tracts of land, and they were able to monetize it through the development of high-end condos. That's only a simple example of this.

We were looking in the criminal justice context at potentially partnering with Correctional Service Canada through CORCAN, their business entity, in potential employment programs that would allow us to do good rehabilitation with offenders but have them do returns to the community by way of, for instance, building houses—giving the offenders skills, giving them the opportunity to work, but also creating a social good in terms of building social housing in the community.

There are all sorts of examples.

[Kathy Thompson]

The Elizabeth Fry Society has an MOU with the Department of Public Safety and Correctional Services whereby, with some initial seed money, they were able to create an enterprise through which women offenders can participate in a company and obtain some skills recycling roofing materials, so it has an environmental dimension to it as well. That has a social, environmental, and economic benefit, because these women are then employed in some meaningful employment with skills development.

One point that's important to remember is that social innovation has different elements, whether or not it's a social finance approach in which there is both a social benefit and an economic benefit. Shawn talked before about pay for performance, where there is that clear economic benefit if there's a demonstrated outcome at the end and a clear savings. There is pay for performance, the social impact bonds, which we've talked about already, and then there are other social investment funds that pull capital from investors to provide loans and mortgages and venture capital for not-for-profit organizations for social purposes.

There are different types of social innovation. I don't know if the committee is planning on having ESDC present, but they are leading the government initiative, so it would be helpful for them to walk you through these different tools.

[The Chair, Conservative, Daryl Kramp]

Fine. Thank you, Ms. Thompson.

Thank you, Madame Doré Lefebvre.

I will now give the floor to Mr. Maguire.

Mr. Maguire, please.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you, Mr. Chairman. Thank you for the presentations today as well.

There have been a number of great examples that you've provided I think in regard to the success of these programs. There are costs that are variable depending on a number of factors that go into each one of them. So without getting into the monetary amounts, what drives the costs up so much? It's hard to believe that it could be expensive for every individual enrolled. So out of all the projects that have run their course, can you provide me with some examples of the benefits of the ones that have succeeded and some of the failures?

[Kathy Thompson]

We did elaborate on some during the presentation. Beyond those I think, as we offered earlier, we have a list in a report of all the initiatives that had been categorized according to those three categories that we mentioned earlier; that is, new, promising.... So we'd certainly be happy to provide the committee with a list of those and the evaluated results, if that would be helpful.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Okay. One example that my colleague just mentioned, as an example from other countries, is that the United Kingdom delivered some great social financing programs. Can I delve into that a little bit more, into the big social capital that they may use, their social investment bank. How is that set up? It has several functions to it. Can you just elaborate on the effectiveness of that?

[Shawn Tupper]

That was a fascinating project in the United Kingdom. In finding their seed money for that bank what they did was they went to their five Merlin banks, the biggest banks in the U.K., and they identified all of the dormant accounts. Because they hadn't done anything with them, they were able to regulate and they were able to extract that money. That is how they found their seed money to set up this social financing fund in the United Kingdom.

What they were able to do, therefore, was, because it was unclaimed money, they did what they needed to do to make sure that they were protected from taking people's money, but they were then able to really identify that and say this money is going to be used exclusively for these kinds of purposes.

That bank then was able to establish a not-for-profit organization whose sole purpose is to work with the private sector and with the not-for-profit sector to create awareness, create knowledge, and to build the bridges. They basically act as an interlocutor between service providers and funders. It is through those mechanisms that they are able to create the different approaches that they have been pursuing in the United Kingdom.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you for that as well. These are good programs, good adjustments.

I wonder if you could just provide us with those kinds of examples, clear-cut examples on how these kinds of programs are successful. Can you give the committee some idea as to why our opposition colleagues have decided that this isn't a good decision right here and now? They don't seem to be accepting the idea that this is a good way of moving forward and getting others to help with preventing crime and certainly rehabilitation in those areas as well.

[Shawn Tupper]

I think the challenge is to find the willing partners, but I think there are willing partners. Indeed, in my view the theory behind this concept is to allow people from outside of government to explore their ideas about how they can contribute to resolving some of the social problems that might be identified. Effectively, it is a little bit about unleashing innovation outside of government and it also is an opportunity to unleash funding or resources from outside of government to affect these kinds of problems.

I think that is what truly the innovation is. Obviously, government maintains its role and I know there has been some concern and criticism about these models in the sense that government is offsetting its responsibility. I think the real measure if you look at what's happened in the United Kingdom, Australia, and the United States particularly is that you don't see a reduction in government funding, but rather you see government maintain its funding and it's done in partnership. I think that's the signal the government's not offsetting its responsibility and downloading, but rather it's trying to expand the scope and the impact of its investments by partnering with others in using their investments.

I think it's something obviously that would have to be watched, but I think so far in the examples that we've seen governments aren't offsetting their responsibilities. They're trying to join up—that's just British language.

So I think that's the real effectiveness of these things. The other side of that where government has to be involved in maintaining its credibility in these activities, and again we were very conscious of it in the criminal justice sector, is that while we want to unleash and allow the private sector to come forward with its own ideas, government still has a responsibility to make sure those ideas are good ideas.

The example we used is, basically, government would have to assure that nobody is doing harm. If you wanted to do anger reduction through chocolate milk baths, as long as it didn't hurt anybody, so what? It's their money. If you wanted to do it by drugging people, government would have an opinion about that because you'd want to make sure that there was no harm done.

Those are things where government's do need to be involved, governments do need to set parameters, and governments are doing that in the models that you see around the world.

[The Chair, Conservative, Daryl Kramp]

Thank you very much, Mr. Tupper.

Thank you, Mr. Maguire.

Ms. James, go ahead, please. You have five minutes.

[Roxanne James, Conservative, Scarborough Centre, ON]

Thank you very much.

With regard to programs that have been successful or not, I know you haven't been able to put forward statistics as to the number, but with regard to the program itself, is there a common theme that has been more effective than others? I'll ask that question, but it's going to lead into the secondary question as to whether any of those successful programs might be candidates for delivery under a social finance model.

Is there a key that has been successful? Would any of those be able to be moved into a social finance model?

[Shawn Tupper]

I think the biggest key is the locality or the community element of it, that it is a locally based investment and it's building on the assets of the local community. The other aspect is the sustained intervention itself. It isn't people coming in to lecture. It isn't short term. Clearly duration of the treatment, if I can put it that crassly, is a really critical factor. That's why I think it is about looking at community safety. It is about how we build those partnerships so that you get those sustained interventions. Those seem to be some of the really critical factors that speak to success.

[Roxanne James, Conservative, Scarborough Centre, ON]

Would any of those successful programs through NCPC be candidates for delivery through a potential social finance model?

[Shawn Tupper]

Right now we think theoretically the answer is absolutely yes, because we can identify partners and we know that we have individuals who are interested in making investments. For instance, one of the communities that we work with is an immigrant settlement organization. We were interested in funding them because they were working with immigrant youth. It was about capturing immigrant youth before they joined gangs or got into trouble, and ensuring that they had ways of integrating into Canada and becoming successful Canadians. We know a large part of that is about giving them opportunity in Canada. That's a simple example of where you could probably get corporate interest in terms of an employment perspective with a not-for-profit organization working in a community around immigrant settlement, where the government could provide seed funding or actually go to the other extreme and look at a social impact bond and fund only if it's successful.