Mr. Chair and members, thank you for the opportunity to present our recommendations to you today. I'm especially pleased to be part of the influential group that gets to follow up your hearings yesterday with the Governor of the Bank of Canada and the Minister of Finance. We're clearly in good circles for recommendations.
Very briefly, the Canadian Community Economic Development Network is a relatively young national network of local organizations working on integrated approaches to economic and social development in their communities. We have several hundred members in every province and territory and support professional development, research, peer learning, and policy work for our members.
Our membership represents a new approach to development, one that integrates economic development—the provision of needed goods and services—with social and environmental goals at the firm and community levels. This movement, which has been growing both in Canada and internationally in recent years, is successful in large part because it inspires Canadians to take action on the challenges facing their communities.
The growth of this sector reflects the emerging understanding of the need for integrated, coordinated responses to complex social and economic issues that cut across sectors, departments, and levels of government. You can see it in the growth and success of horizontal initiatives in the federal government and the increased need for intergovernmental cooperation. This may be most evident in the area of health, where the reality of the determinants of health is becoming more widely understood. I would recommend to the committee to study carefully the Senate's Subcommittee on Population Health's final report, which makes clear and specific recommendations for a whole-of-government approach.
Like traditional entrepreneurship, the power of community economic development in this social economy lies in its ability to mobilize local leadership and action for the challenges facing communities. Locally adapted solutions building on local assets and leadership are more effective and sustainable. We see this, for example, in the survival rate of social economy enterprises, 65% of which are still operating after five years, compared with 35% for traditional SMEs.
Infrastructure stimulus spending, while some of it is available to non-profit organizations and to jurisdictions such as Ontario, still does too little to address the immediate needs of the most vulnerable Canadians who are hardest hit by the economic downturn, including youth and those with weak labour market attachment. CED and social economy enterprises are positioned to support those populations that have been hardest hit. While many businesses have seen consumer demand soften over the last three quarters, many non-profit organizations are experiencing increased demand. For example, Momentum, a community economic development organization in Calgary, has experienced a 47% increase in demand for its business development, skills training, and financial literacy programs since the third quarter of 2008. Over the same period, the employment rate in Calgary increased by 3%.
For this sector to continue to grow, we need modifications to federal policies and programs similar to what has been done in other jurisdictions internationally and provincially.
Last November, the Government of Quebec launched its social economy and collective entrepreneurship action plan in response to the economic situation. It also allocated funds for research and information on the social economy, labour force development and support for development of the social economy in new sectors, with new population groups. The federal government can do the same thing
Our brief contains specific recommendations for changes to federal policies and programs that would involve no increase in spending by the federal government but would enhance the range of programs available to cooperatives and non-profit enterprises.
Other options, such as tax credits, have demonstrated success in leveraging private investment in employment enterprises and affordable housing. A 30% Nova Scotia tax credit has generated over $30 million in assets for local community economic development investment funds across the province.
The creation of a federal cooperative investment plan could be modelled after the plan in Quebec, where from 1985 to 2006 some $393 million was invested by members in eligible cooperatives. The cost of such a plan at the federal level is estimated to be $17 million to $20 million per year but would generate some $120 million per year of new investment in Canada.
Finally, it is important to note that poverty needs to be addressed not only in Canada but also abroad. We are happy to hear that the government notes a relatively strong fiscal position compared with other G8 countries. That's even more reason to enhance our international commitment to poverty reduction. In concert with non-governmental organizations, churches, and other civil society organizations, the Canadian CED Network asks the federal government to increase our international development aid spending by an average of 15% a year for the next ten years in order to reach the internationally agreed target for aid spending of 0.7% of gross national income and continue Canada's leadership in promoting a greater role for civil society in the delivery of development assistance.
Thank you very much.