Public Safety Committee on June 12th, 2014

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

Of course. Feel free.

[Dr. Margaret Shaw]

Thank you.

There's an enormous amount of work on the safety of women, and there are two broad areas. One is violence against women in the family and personal violence, and the other is women's safety in cities. There are now an extraordinary number of very interesting programs being carried out internationally in Delhi, in Cairo sadly, in many cities, such as Rosario in Argentina, and in a lot of other places. Much of this work began in Canada and is looking at women's sense of safety in the city and things that you can do to improve the environment for women, and to make city parks and other places safer for them.

This is another movement within crime prevention. It's an aspect of the prevention of violence against women that has expanded very rapidly over the last 10 or 15 years.

In terms of violence against women in the family, partner violence is a very stubborn problem. I think in terms of social finance, it would be a very interesting area to put money into. My suspicion is that it would be extremely difficult to make money, in other words to have a social impact bond in relation to reducing family violence and violence by partners, because it is very stubborn. It's the main cause of death of women in many countries now. The main cause of homicide is personal violence.

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

Yes, we've observed that.

The RCMP released a report on violence against women; it focused on the murders and disappearances of aboriginal women in Canada. The report said that most of the murders could be traced back to domestic violence. That is an extremely sad fact.

I must say that I'm interested in seeing how social finance could play a role as far as violence against women is concerned. It would appear to be rather difficult to do that through social impact bonds, though. I'm not sure that aspect of security would necessarily appeal to investors.

[Dr. Margaret Shaw]

I wouldn't say that it wouldn't interest investors. I think it could interest them a great deal. I just think it would be extremely difficult to make big inroads into reducing it, because it is extremely difficult, and much of the work that needs to be done is in terms of being aware of people in difficulties, giving support to people, trying to improve general advertisements, and trying to change attitudes of young men. Maybe that's the best area. There's a lot of work now on the attitudes of young boys and men, and the involvement of sporting personalities in changing attitudes towards young women.

The World Health Organization has done a study looking at the most successful crime prevention programs that have been replicated and work everywhere. One study shows that programs that teach young kids in school, school-aged kids, about good relations between the genders is the most effective at reducing violence against women. In other words, is has to do with preventing teen violence. That is a very successful project. There have been some projects in Canada and other countries, and it's about the only one that seems to reduce future violence.

[The Chair, Conservative, Daryl Kramp]

Thank you very much. Time is up.

Mr. Maguire, you have two and half minutes, sir.

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

Thank you.

You were talking about making the dollars out of people. To me making people's lives better isn't about the issue of the dollars. The byproduct of some of the financial success would perhaps be the real benefit coming from improving the lives of these people. Can you just elaborate on whether you think that's a fair statement or not?

[Dr. Margaret Shaw]

I think it's extremely helpful if a project is able to improve people's lives, and I think the difficulty is how you value that in sort of monetary terms so you can show that you've reduced certain things.

The other measures are more difficult to weight and to evaluate. I think you can certainly look at some of the things I've talked about before as to whether people are working, whether they have better health, whether they feel better in themselves. These are all important measures of improvement.

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

Yes, it's giving them more confidence to go into the workforce again, and that sort of thing as well. Thank you.

You mentioned the private-public partnerships. It looks like people are willing—and you gave some good examples—to be participants in this whole type of exercise.

If you were to go right into this type of an investment and start it up, whether it's a impact bond or not—

[The Chair, Conservative, Daryl Kramp]

Wrap up, please, Mr. Maguire.

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

—how would you go about it, without doing a long-term study of it?

[Dr. Margaret Shaw]

I suppose I would find some foundations that were genuinely interested in working in this area and collect together a group of people of that kind. There are quite a lot of foundations. Certainly in Britain, it's the foundations that are heavily invested in these projects.

[The Chair, Conservative, Daryl Kramp]

Fine. Thank you very much, Mr. Maguire.

Dr. Shaw, thank you so much for the time and effort and the travel to come here today. In one way we apologize for the brevity and not being able to pick at that mind of yours, with all those years of experience. However, that is the challenge of committee and the number of witnesses we like to draw on.

Once again, thank you, on behalf of the entire committee, for your time here today. We certainly appreciate the wisdom you have shared with us.

[Dr. Margaret Shaw]

Thank you very much.

[The Chair, Conservative, Daryl Kramp]

We'll suspend briefly.

[The Chair, Conservative, Daryl Kramp]

Okay, colleagues, we will resume our study on social financing.

For the second hour of testimony, we have two witnesses with us.

We have, from the HomeFront Society for the Prevention of Domestic Violence, Mr. Kevin McNichol, the executive director; and by way of video conference, from Edmonton, Alberta, from the Edmonton Police Service, we have Jacqueline Biollo, strategic coordinator for the office of strategy management.

Do we have you loud and clear, Madam?

[Jacqueline Biollo, Strategic Coordinator, Office of Strategy Management, Edmonton Police Service]

Yes, sir.

Good afternoon.

[The Chair, Conservative, Daryl Kramp]

Tremendous.

Welcome. We will give each of you an opportunity for a presentation for up to 10 minutes, should you wish, and then after that we will open the floor to questions.

We will start in the order of the agenda here.

Mr. McNichol, you have the floor for up to 10 minutes, and then we'll go to Ms. Biollo.

Go ahead, sir.

[Kevin McNichol, Executive Director, HomeFront Society for the Prevention of Domestic Violence]

Thank you, Mr. Chairman.

I appreciate the opportunity to be here and to present in person. It's been an interesting experience so far.

My name is Kevin McNichol. I'm the executive director of HomeFront. HomeFront is Calgary’s coordinated community justice response to domestic violence. We bring together law enforcement, prosecution, defence, child and family services, shelter, treatment, probation, and victim services. We create a seamless response to break the cycle of domestic violence.

HomeFront began in May of 2000 as a national demonstration project supported by a federal grant from the National Crime Prevention Centre. Over the last 14 years, independent evaluations have shown two-thirds and one-half reductions in criminal reoffence rates for domestic violence. Additional evaluations of our prevention programming have found a 75% reduction in calls for police services, a 70% reduction in child and family service investigations, and a social return on investment of approximately $6.31 for every dollar invested, or about $16 million in value added back to the Government of Alberta, during the course of our pilot projects.

For the past several years, HomeFront has recognized a significant shift in the social discourse about the size of government, its role in providing services, and the ability to continue using tax dollars alone to support increasing demands. This shift has freed up space to explore new conversations about alternate ways to finance our social safety net.

HomeFront has been exploring those ways over the last number of years. We believe new social financing models must be explored, tested, and then permanently introduced to ensure an ongoing, large-scale, high-impact, and most importantly, more robust and sustainable social safety net. We believe there are a number of financial models. One such model might be social impact bonds, which we're talking about today. They hold a great deal of promise.

HomeFront believes itself to be a leading social serving agency able to participate in any pilot program for such an initiative. HomeFront represents a strong cross-sector collaborative model, has strong evaluation systems already in place, and has the ability to tangibly quantify and measure its social impact across a range of justice and social serving systems. Plus we have a history built upon innovation, and exist within a strongly networked, socially innovative community in Calgary and Alberta. All of these are elements that are critical to the success of these types of initiatives. I think we heard that from Dr. Shaw earlier today.

I want to share a few thoughts with you around what we've been pondering at HomeFront in our discussions around social innovation bonds. I have to say that I'm not an expert on that as a financial vehicle, but these are some of our thoughts in terms of how we would position ourselves and be able to make use of them as an agency.

Thought number one is that if we are going to embark on this journey, we need to change the conversation from one of cost savings to one of value added. In reality what happens is not a cost saving but a reallocation of existing resources to address previously unaddressed issues and areas, and/or to better address those already identified issues. For example, our prevention programs pair a police officer and a social worker who respond to non-charge domestic violence calls in the city of Calgary. What we found through our social return on investment analysis was that we saved about $100,000 per year in officers' time per district we worked in.

I can tell you, having worked in those districts, that there isn't an officer sitting in there for a year twiddling their thumbs. What they were able to do was reinvest that time to do better investigations with the cases they already had, provide better intervention, and/or reassign themselves to do other police work that was either under-supported or was unserved at the time prior to our coming in there to support them. So it's value added, not a cost savings.

The second thought is that we need to take a risk and try. In Alberta and Calgary proper, at least, I believe we are ready to take the chance and explore using alternate funding models to support our safety net. An example of this is the success of the unfortunately discontinued safe communities initiative that the Government of Alberta initiated across the province. It invested a great deal of resources and tilled the ground to already have in place a social return on investment evaluation methodology, which many of us as agencies have taken to heart and are using on a regular and routine basis.

It further challenged us to work in a cross-sector, multidisciplinary way. It challenged government ministries to also work in new and coordinated fashions—to stop considering problems from their specific ministry perspective and to start recognizing that when an individual comes before one of our services, often they will touch every one of the ministries that has that outward-facing client service focus. It's the same for agencies on the ground, and that's where the safe communities innovation initiative really challenged and brought us together to create that happening.

But we have to try.

We also need to accept that this type of funding will not be a panacea and relieve government of its obligation to support the social safety net. Instead, it might allow government to redirect its limited resources to more under-supported areas of the safety net, or enhance current initiatives that are already in place.

I think this is the critical piece to sustainability. Business knows this, that you want diversity of revenues in order to maintain a business model, and I think this gives an opportunity for us, as a society, to diversify the sources of revenue we have available to us.

Further, we must accept that not all areas will benefit from this type of funding. Social issues that might benefit will have clear and high public costs associated with intervention, interventions with proven or significant potential to produce net social value, the ability to collect and analyze data that demonstrates social impact, and are nested in strong, robust, collaborative relationships that span multiple sector stakeholders.

Care will also be needed to ensure that success doesn't breed success at the cost of other critical areas. I've heard some questions today around this, and I think it's good thinking. The example would be breast cancer, which has an overwhelming public awareness and fundraising effort that overwhelms and dwarfs many of the other common and lethal cancers that are out there and receive little public funding or awareness, but they are just as critical. I think this is a critical place where government needs to turn its attention, and I think it is the role of government to oversee to make sure that the cuddly bears don't get all of the resources. But I think that's always been the role that government has played in our society, to ensure equitable distribution of resources to support the social safety net.

For these initiatives to achieve their potential, they must fund the spectrum of services required to make meaningful change for the clients involved. Their strength will be found in the collaborative cross-service teams supported by this type of model. The data at HomeFront is clear. A client will be only as successful as the community that surrounds them. One service dosage from one service provider is rarely enough to address most multi-need, complex clients we deal with every day. Our research shows a clear cumulative effect of what we're doing.

To sum up, we know that coordinated, integrated, multidisciplinary service programs, embedded in a supportive community, create large-scale social change. What we need is the support, oversight, and authority of government endorsing the use of these models, encouraging the development of financial agents who provide the oversight and finance vehicles, and a desire by government to fiscally backstop and underwrite these efforts.

Thank you.

[The Chair, Conservative, Daryl Kramp]

Mr. McNichol, thank you very much.

Now we will welcome, for a brief presentation as well, Ms. Biollo.

Are you alive and well, here with us?

[Jacqueline Biollo]

Yes. Good afternoon.

Can you hear me okay?

[The Chair, Conservative, Daryl Kramp]

Carry on, then, please. You have the floor.

[Jacqueline Biollo]

Thank you. Bon après-midi, Mr. Chairman and honourable members.

Thank you for the invitation to appear before the House of Commons’ Committee on Public Safety and National Security regarding its study of social finance as it relates to crime prevention in Canada. The Edmonton Police Service appreciates the opportunity.

As stated, my name is Jacqueline Biollo, strategic coordinator, investment governance section, office of strategy management division, Edmonton Police Service.

The Edmonton Police Service has a history of supporting and/or partnering with community agencies to develop innovative programs and services that address the systemic barriers of vulnerable and victimized individuals, as well as those at risk of being involved, or those involved, in criminal activity. Systemic barriers include mental health issues, drug and alcohol addictions, homelessness, and/or a lack of employment skills, education, or training.

Through application processes, community agencies alongside the Edmonton Police Service receive various amounts of grant dollars to research, develop, implement, and evaluate crime prevention strategies. Specifically, some of these grant dollars were issued under a three-year contractual relationship with the Government of Alberta, Justice and Solicitor General, safe communities innovation fund, SCIF. The premise of SCIF-funded initiatives was to identify the social return on investment of each innovative project while developing innovative responses to issues such as sexual exploitation, electronic monitoring, or transitional housing.

The Edmonton Police Service partnered with more than a dozen community-led initiatives over the lifespan of the SCIF funding cycle. Complementary to the identification of education and awareness, prevention, intervention, and suppression initiatives, SCIF-funded projects were tasked with developing sustainability models in the anticipation that provincial grant dollars would not always be available to assist in sustaining the operational costs of delivering proactive or reactive, and much-needed, programs and services in the community.

The Edmonton Police Service and community agencies acknowledge that in order to sustain a strong presence of leadership and achieve stated goals, alternate means of financing—or revenue generation above and beyond government funding—needed to be found. The House of Commons committee studying the economics of policing recognized that crime prevention and early intervention have social and economic benefits, and recommended that the Government of Canada continue to make investments in these areas.

The Edmonton Police Service is currently only at an exploration stage to determine if social impact bonds can be a means to secure long-term funding to address the numerous systemic barriers that present in our community, which have a direct effect on EPS calls for service. The economic motivation for social impact bonds occurs via the savings created by innovative, preventative interventions that help reduce the need for government expenditures. For example, success may be measured broadly as a reduction in recidivism rates as a result of permanent housing

A social impact bond, or SIB, is a pay-for-success contract where a commissioning body—typically the government—commits to pay for the achievement of a particular desired social outcome. There are four players in a SIB: the government, the service providers, private investors, and an intermediary organization that connects all the players together. To date there are no live social impact bonds in Canada.

There appear to be opportunities for social impact bonds to support programs that EPS is involved with, specifically around supporting vulnerable and victimized persons, heavy users of services, and hard-to-house high-risk offenders.

As part of community agency-driven working groups, the Edmonton Police Service witnessed presentations and received information from Canada’s first built-for-purpose social impact bond intermediary, Finance for Good. Design and implementation include identifying program logistics, program evaluation methodology, impact measurement techniques, fundraising strategies, and other technical program needs.

Many of the economic savings generated from social impact bonds are byproducts of the focus on prevention and rehabilitation, instead of reactive actions driven by the treatment of symptomatic issues such as prison use, emergency medical care services, and traditional education models and practices

To inform future discussions for the design of a social impact bond-ready program to share with government and investors, including proven interventions, a strongly linked economic case specific to which government entities accrue savings, budgeted scale-up costs, and a risk profile that satisfies investors, the Edmonton Police Service received an estimated cost of work from Finance for Good of $24,000 plus a 10% administration fee plus GST, or approximately 1% of the bond under consideration.

The Alberta government's budget 2014 introduced Bill 1 to support innovation and provide the government with the financial resources to take full advantage of new funding opportunities for social and cultural progress in the future. A $1-billion social innovation endowment will champion the creation of new ideas needed to address issues such as reducing poverty, transitional housing, and family violence.

If the Alberta government commitment—or similar—for proposed programs is secured, remaining costs required for fundraising, establishing social impact bond governance and legal structures, implementation, and continuous measurement and reporting on results would be borne by the investors. Costs are negotiated based on modifications to the scope of service provided.

The fact that the EPS has a focus on strategic management and investment governance may signal that the EPS has an interest in social finance and is well placed to speak to downstream impacts of social finance, social impact bonds, and crime prevention through social innovation in Canada. It is important for the EPS to continue to lead discussions with community stakeholders, the City of Edmonton, Finance for Good, legal advisers, and the Government of Alberta in exploring the concept of social impact bonds and the process of advancing crime prevention through alternative and innovative funding sources.

The Edmonton Police Service is currently exploring all aspects of a standard social impact bond legal structure, including risk and liability, governance structure, investor interests, and the rights and obligations of all parties.

It is also important that the Edmonton Police Service take the time to make strategic decisions and implement strategic actions to position us for the future. This includes meeting with elected officials, senior bureaucrats, community partners, and key stakeholders to foster relationships and discuss issues of importance to the community and how legislative or financial support can assist or benefit law enforcement initiatives, such as education, awareness, prevention, intervention, and suppression.

Through discussions, the Edmonton Police Service will explore the concept of social impact bonds and the process of advancing crime prevention in Canada and acknowledge the growing costs of controlling and responding to vulnerable and victimized individuals. This response is of concern to all Canadians, and especially the government. We will address crime risk factors through strategic methods, such as education, awareness, intervention, prevention, and suppression. We will share evidence-based examples of successful pilot projects the Edmonton Police Service has been involved with, such as, for example, the SCIF-funded initiatives. We will acknowledge that sustainability is a challenge, support collaborative relationships, and leverage new partnerships and funding sources. Finally, we will influence social change.

While innovation, diversification, and strategic investment will mean greater sustainability, collaboration, and long-term success, the Edmonton Police Service remains cautious about the evidence to support the necessity of social investment and about how reasonable investments would be determined, what oversight regime would support initiatives, what recourse mechanisms are in place for investors who believe their investment produced less than desirable outcomes, the risk profile of assets to be held by the social investment bond, the amount of funds that may be disbursed from a bond each year, a usage policy that indicates the purposes for which disbursements can be used, and how the effectiveness of social impact bonds will be assessed.

The current economic climate has put pressure on budgets at all levels of government. As a consequence, there has been focus on the cost of policing and public safety. The office of strategy management will continue to review government initiatives and grant or funding opportunities and to act or respond accordingly.

In summary, social innovation to resolve complex social issues such as poverty or family violence requires new thinking, new approaches, and risk-taking that can be more effectively implemented outside of traditional government approaches.

Mr. Chairman and honourable members, the Edmonton Police Service is pleased that the House of Commons Standing Committee on Public Safety and National Security is exploring a study of social finance as it relates to crime prevention in Canada, and we thank you for asking us to tell our story of access to social financing mechanisms and their impact on safe communities.

I look forward to hearing your comments and answering your questions.

[The Chair, Conservative, Daryl Kramp]

On behalf of the committee, the chair thanks both of our witnesses for their commentary here today.

We will now go to questioning, beginning with seven-minute rounds and starting off with Mr. Norlock, please.

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

Thank you very much, Mr. Chair.

Through you to the witnesses, thank you for being here today and for your insight into our study on social financing as it relates to crime prevention.

My first question is to Mr. McNichol.

I notice you nodding your head in agreement with much of what Ms. Shaw, the previous witness, had to say. I too agreed with much of what she said, but one of the things I'd like to dispel right now is this notion—and I think I understood Ms. Shaw to say—that society would look at someone making money on somebody else's misery as maybe not a good thing. I'll ask you the same question I ask myself. We have hospitals and we have drug companies. Drug companies treat people who have cancers. In some cases, the drugs have cured people of cancer. Companies make MRI machines that help us find cancers more quickly than we ever could before. That is because people who have cancer are in misery, right? They have a disease.

There's really nothing wrong with making money on somebody else's misery, provided the outcomes relieve the misery. Would you agree with me?

[Kevin McNichol]

I would agree.