Evidence of meeting #47 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site.) The winning word was enterprise.
A recording is available from Parliament.
Conservative
The Chair Conservative Phil McColeman
I agree. I was on the verge of an intervention and I will now make that intervention.
Let me remind all committee members that this study is not debating budget cuts, skills development, skills training, or any of that. This is about social finance and what it can do in this country. Please stay on topic.
Conservative
Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS
I apologize, Mr. Chair. I'll move on.
Ms. Young, in CUPE's submission to ESDC on its national call for concepts on social finance, your organization indicated concerns related to economic sustainability, fairness, and risks associated with the social finance model.
Can you explain how CUPE feels leveraging more private capital in pursuit of fundamentally broader social good would be unsustainable or unfair?
Senior Research Officer, Canadian Union of Public Employees
Basically, our concern about doing that is that the government is still paying that return at the end because there is an attachment of how much money you get back on the so-called bond at the end. The government is still paying, but in many cases—in fact, Andrew referred to one of them—you're actually ending up paying more. You're paying more to get the service, and the public sector delivery or the not-for-profit community-based delivery would be less expensive and more effective.
It also creates a risk in terms of.... Let's take the Utah bond, for example. They decided they would target this area and these people. But if you actually need a service you might not mesh with the geographic area or the exact population that was targeted, so it's sort of basing social policy on the market.
Governments are withdrawing from the policy aspect of it for the design of what the success may or may not be, and there is no cap on their profit. Those three areas make us concerned.
Conservative
The Chair Conservative Phil McColeman
Thank you very much.
That's the end of that five-minute round.
Mr. Cuzner.
Liberal
Rodger Cuzner Liberal Cape Breton—Canso, NS
Thanks very much for the testimony.
I think it would be really helpful, for the work you've done with the social impact bonds, if you could share with the committee the ones that haven't worked out or the ones that have had a downside so that we could share that with the researchers.
There was another reference you made about the Maryland study. Do our researchers have the other reference you made about the Maryland study?
Liberal
Rodger Cuzner Liberal Cape Breton—Canso, NS
Could we get a copy of that, too? That may be worthwhile as well.
The one thing that always concerns me is that a couple of the witnesses have identified that this can't be a substitute for public support, public dollars, or public investment. I think it has a role to play, but it concerns me. If it's an attempt to provide a service at the cost of driving down wages and quality, then that should be of concern to every constituent.
Just for example with the study that was done on the JobsNow versus the municipal delivery of those services, there was a greater cost in the JobsNow provision. It cost more for that, did it not?
Senior Research Officer, Canadian Union of Public Employees
It costs more because the company is making a profit, but in fact—
Senior Research Officer, Canadian Union of Public Employees
The wages people are making—
Senior Research Officer, Canadian Union of Public Employees
No, much lower.
Senior Research Officer, Canadian Union of Public Employees
JobsNow also delivers in British Columbia. It's a kind of privatized employment delivery system, so I feel slightly reticent. I could confirm these numbers with you in evidence and I could get back to you. It could be as much as half less in terms of—
Liberal
Senior Research Officer, Canadian Union of Public Employees
These are modest wages. They're not high wages that the not-for-profit or municipal government employee is making. When it becomes pay for performance, which is what happens with the social impact bond, the actual individuals working are getting paid for performance, and their wages are—
Liberal
Rodger Cuzner Liberal Cape Breton—Canso, NS
Would you be able to provide that to the committee as well?
Liberal
Rodger Cuzner Liberal Cape Breton—Canso, NS
What I've found over the years is that usually when there's an issue, the opponents of the issue can identify all that's bad, and the proponents can find all that's good. I've asked this same question to the proponents and those who believe in it. It's about whether or not they've seen investments where the wheels have fallen off and they really ended up being regressive. Are there cases you've seen in your studies where it makes sense and has been of benefit and there's been a net benefit derived from the investment, from the social bond investment?
National Representative, National Union of Public and General Employees
Yes, definitely. In community economic development, social finance has a substantial role to play. I'll give one small example from my own neighbourhood.
A local coffee shop decided that it wanted to create a coffee-roasting facility. They engaged in what could be described as and what would fall under social finance to pay for it. It's Bridgehead coffee, incidently, if anyone wants to sample the outcome.
Senior Research Officer, Canadian Union of Public Employees
Social impact bonds are sort of social finance on steroids, and that's what we've been cautioning you about.
At the smaller level, we actually have an infographic that we could share with you. It's all on a continuum. There are a lot of incredibly great local endeavours that happen through social finance. It's the social impact bond aspect of it that draws the most concern from us.
We also understand that you're going to England to study social finance.
Liberal
Rodger Cuzner Liberal Cape Breton—Canso, NS
We're going to discuss that, as a matter of fact. Are you free that week? Call for social impact bonds and I'll set it up—