Human Resources Committee on March 12th, 2015

[Debbie Brown]

Thank you.

We would like to begin our presentation by thanking the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities for the opportunity to come before you and present our experiences on behalf of small not-for-profits.

Crossing All Bridges Learning Centre is a not-for-profit registered charity that has been operating successfully as a social enterprise for over a decade in Brantford, Ontario, with a mission to provide dynamic programs and opportunities to maximize the individual potential for adults living with developmental challenges.

The organization was conceived to fill a void in service for this marginalized population upon exiting high school. For many people living with a developmental challenge, leaving the high school system is a daunting end to their connection with their friends, their social life, and their future.

Since the inception of Crossing All Bridges in 2003 the organization has faced many barriers. One in particular is the organization's ability to access financial assistance. In the launching stages of the organization, personal security loans would have had to be guaranteed by board members' assets. The founding families were not in a position to put up their homes and retirement funds to secure start-up financing. Everywhere this working group of families searched they found people very supportive of the purpose of the organization, but no one to commit to investing dollars into start-up costs.

It was at that time the Ontario Trillium Foundation was becoming invested in the Brantford area and through a partnership with a government-funded social service agency in Brantford, Crossing All Bridges was able to make an application and receive funding to commence with forming the organization that today has supported over 100 adults living with developmental challenges and 60 on a regular roster.

In August of 2014, CAB received an unexpected letter. The partnership that we had developed with the social service agency was being terminated as the organization was reclaiming the 5,000 square foot space we were leasing. CAB was forced to seek out new accommodations and relocate within a four-month period. A relocation committee was formed and during the process of searching for space, CAB began seeking out funding options. After making appointments with two banks and one credit union, it turned out that financial institutions had not advanced much since CAB’s inception in 2003. Operating as a not-for-profit registered charity, CAB has not accumulated large amounts of reserve funds, nor have we developed any real credit ratings. We have gone along our way being good stewards of our money and managing to live within our budgets, all with the purpose of providing a social benefit to people living with developmental challenges and their caregivers. The relocation process found the organization up against zoning bylaws, availability of functional space, and the biggest hurdle, finance options.

The operating costs for us to move from a partnered location to stand-alone business have increased approximately $100,000. Transferring these costs to people living with disabilities on fixed pension incomes is going to have a significant impact. Social finance options would be a welcomed option for us right now. An array of financial resource opportunities need to be available for small not-for-profits, especially in rural areas and small centres such as Brantford. Urban areas have well-established social enterprise hubs, such as Pillar in London, which Steve's a part of, and Social Enterprise Toronto and the Ontario Nonprofit Network in the greater Toronto area.

These hubs are a big resource for social enterprises seeking funding and business development. At the current time CAB is seeking financial opportunities to assist with increased relocation costs. We are investigating all grant options. Grants take time to find and to apply to. The application timelines are not always conducive to project need, and organizations are not always successful as demand for these dollars exceeds the allocation limits.

Stakeholders are very cautious about high-risk applicants. We could be considered as always placing a high value on social benefits that participants receive for the service provided. Often this impact is overlooked and the income statement and balance sheet become the true deciding factor before financial allocations are determined. Small not-for-profits need financial options that see past the high-risk elements.

Investing in loan options. In our area we are sourcing out loans from major banking institutions, credit unions, and Enterprise Brant. Loans are being determined on the business' past three years of financial history. The interest rates are based on current markets and the repayment options are rigid with little flexibility to be based on the social impact of the organization. Small not-for-profits need payment options and interest rates that suit the social purpose and outcomes expected for the loan.

Fundraising options take manpower hours, and the market is very competitive. Small organizations make tough decisions in time management. They must decide how to spend their limited time. Do they spend hours fundraising for the cause or in strategic planning to build the organization into the future? The balancing act sometimes is difficult to define. Capital campaigns require much planning, and in some circumstances, such as CAB’s case, to find new accommodations takes time. Small not-for-profits need access to funding that can be secured in a time-sensitive manner.

A 12-year history of providing continued learning programs shows the necessity to expand CAB's program depth to include work readiness training so that further opportunities for personal growth can be developed for people living with developmental challenges. A recent survey completed by the caregivers supported work readiness training and applauded the idea that their dependent son or daughter might one day volunteer or be employed in the community they live in. For this reason, Crossing All Bridges is very interested in launching social enterprise businesses that have the dual purpose of creating employment training experiences and full- or part-time employment that delivers the social benefit to people living with developmental disabilities while generating revenues that could be reinvested in the organization to further expand the mission.

Employment is a natural step in a person’s life plan. For people living with developmental challenges, the traditional employment training processes have not always been entirely successful. CAB believes that a more transitional implementation towards employment should be an alternative step in the journey to finding that employment.

CAB is looking into developing social enterprise businesses not to replace the already-existing employment programs but to fill the gap for people with disabilities who do not fit competitive employment by offering continuous training with the opportunity to earn an income within their community. By creating these social enterprise businesses, we hope to offer people with developmental challenges the opportunity to train for enterprise business within the learning module of CAB, while progressing to paid training within social enterprise businesses, and for some, to move into traditional employment support programs, such as the Ontario disability employment support program or competitive employment. The second purpose of the businesses is to create sustainability, whereby profits can be reinvested into the business and the organization.

But to do all of this, Crossing All Bridges will need start-up funding. The search for funding continues. We have begun the process through connecting with Innoweave’s workshop modules and grants and through the Canadian Alternative Investment Foundation. We are currently at the business plan writing stage.

The founding families are very invested in being part of the solution for the challenges that face people living with developmental disabilities. One key area that has not been addressed by the Crossing All Bridges working group but that is becoming a pressing reality is the area of living accommodations for this marginalized population, which caregivers can no longer provide for them. The main deterrent for moving forward with innovative housing is the lack of available social financing alternatives that could augment the ongoing operational costs. As the waiting lists get longer and longer and the caregivers are getting older, we know that solutions to this challenge will become more pressing. Social finance start-up funding options could be the beginning of getting the innovative movement into full gear.

We would like conclude with our recommendations that small social enterprises such as ours and not-for-profits need financial options to see past high-risk elements. We need payment options and interest rates that suit the purpose of our loans, and we need access to funding that can be secured in a time-sensitive manner, with funding options that are inclusive of small centres and rural areas.

I think Sherrie might like a few moments to speak to some of the social businesses.

[The Chair, Conservative, Phil McColeman]

Actually, that is 10 minutes almost right on the button, by my clock. There was one second left to spare.

Thank you to all of the witnesses for your testimony.

Now we move on to our first round of questioning, with Madame Morin.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Chair.

My thanks to the witnesses for joining us today. All their presentations were very interesting.

I read your brief with great interest. In the section “Utilize Existing Funding Tools”, you said that “Youth Skills Link investments are achieving the social and environmental benefits that come from social finance.”

Could you elaborate on that? I find that interesting.

[Steve Cordes]

Thank you. I can, absolutely.

When we started these programs, there was nothing called social finance or social enterprise. We talked about it as being hands-on work experience. The only vehicle available to us was federal funding through youth skills link projects, which were new at that time, in 1993 or 1996. We looked at taking it as a training opportunity, the bend being how we could offer young people a training opportunity that otherwise they would just not get.

But also, for us it was all about community engagement. Youth Opportunities Unlimited engaged in this stuff because we know that we can't create work on our own, of course. We rely on the private sector to hire people, on school boards to accept former students back into their systems, and so on, so we need to engage those folks in our family.

The federal youth skills link allowed us to hire young people. They paid for the wage costs for the young people, because they needed to be paid a wage, and a tiny bit of overhead back to the organization for us to employ subject-matter experts who could help us with the recycling, for example.

Then we relied very heavily on the private sector to come forward and offer up their offices for on-site experience, basically. For us, although it was harder to launch, it created ultimately a much stronger model, because now those folks are so engaged in the organization that they freely donate to it. It's not all Pollyanna kind of stuff but a resource base for us. We look at the private sector for employing with our job placement programs, and so on. It becomes an iterative process whereby they are not just recycling with us but are actively engaged in Youth Opportunities Unlimited.

But the training dollars are not really meant to be a social enterprise fund, so using the training dollars is always a bit of a square peg in a round hole. We can always demonstrate the outcomes very easily, but the training format, for example, requires extensive discussion and extensive elaboration with the project officers. We often find that we're in a gap. You can have a 12-month agreement, but six months into the agreement you're negotiating a brand new one, and that might take eight months to negotiate.

Right now we're in that experience, in which we're operating all of our social enterprises with absolutely no government funding. In the case of a traditional training opportunity, you just shut everything down. But we can't shut down the recycling service and we can't shut down the café and put a sign up that the government funding has run out right now, because every day we have to service those customers. We get by without the funding right now, but it is a challenge.

Did that answer your question adequately?

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Yes.

[The Chair, Conservative, Phil McColeman]

You have one minute.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

One minute?

My understanding is that social finance would sort of complement the already existing subsidies. It would be on top of that.

[Steve Cordes]

Absolutely.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Okay, great.

Thank you, Mr. Chair. That's it.

[The Chair, Conservative, Phil McColeman]

We'll move on to Mr. Boughen.

[Ray Boughen, Conservative, Palliser, SK]

Thanks, Mr. Chair.

Let me add my voice of welcome to our resource people today. It's nice of you to share your world with us. We don't get out much, so it's nice to see you folks come in to visit with us.

Courtney, I am really interested in your career and how you moved from not knowing where you were going to knowing exactly where you're going, and more importantly knowing how to get there. Can you share with us what the change was, what happened that you moved out of one sphere and into another? You have been very successful, and congratulations to you for that.

[Courtney Bain]

What happened with my life was that I kind of just woke up one day when I was 23 years old, almost 24, and I was like, “If I don't get my life together by the time I'm 25, I will be on social assistance forever.” I gave myself a mandate and said that if I didn't get myself put together.... What I said was, “I don't want to be on Ontario Works for the rest of my life and I don't want to live off $600 month.” I started taking YOU and its programs more seriously. I started putting myself in and putting in the effort.

I started off by not even doing social enterprise, because I was worried that I wasn't going to like it, that I was going to hate working. I decided to volunteer first. Once I volunteered and realized that I loved the café, I took the skills training. Right now, I still don't know exactly where I'm going. Yes, I'm managing a kitchen, but five years from now I don't want to still be in a kitchen. I would like to be in social work or maybe public speaking. I would love to give back to my community. My community helped me so much that it's my turn to give back and help them.

[Ray Boughen, Conservative, Palliser, SK]

Good on you.

Steve, you've been 30 years in the program. Can you share with us what's kept you in the program for 30 years? That's quite a commitment.

[Steve Cordes]

Thank you, sir.

You know what? It's what is so fresh about the organization. Sometimes folks think that when a not-for-profit runs so many different businesses, really you're a restauranteur, you're a recycling company, you're a jam producer, and so on. Not at all; we're a producer of successful young people. All of those other things are just props. They're very shiny and wonderful props, but that's all they are.

For us, we're committed to coming back and filtering every decision through our mission vision and values, because if we're not careful, we might think we're a restauranteur, and if we think we're a restauranteur, we wouldn't hire people who are homeless. Or we wouldn't let people make a mistake and have them come back the next day. Or if somebody is experiencing anxiety and a customer is a little bit harsh and they start crying and they have to go to the back of the kitchen, which will happen sometimes, in a restaurant, they wouldn't come back. Or if somebody wants to work as a manager, we'd say that our vacancy is in the dish pit and that's where we're going to train them to operate the dishwasher. Typically that's what happens, right?

For me, I just love the fact that we can look at the growth, and it's so tangible for me. We've taken the social enterprise model that we've been doing—and I didn't talk about it in our brief—and we also offer housing for 30 young people in the same building that the café operates out of. There's a school board in there. There's a health care facility in there. It's all very non-traditional compared with what was. Thirty years ago, it was very traditional; come in, get an assessment, go through some workshops, go on a job placement, and good luck to you. That did not work very well for folks who had no experience. That did not work at all for people who were experiencing mental health issues and challenges.

For me, it's just so fresh, because I see that we're doing the same thing and we're responding to the same gap in our community, but we're doing it so much more deeply than we've ever done it before. It stays very fresh.

[Ray Boughen, Conservative, Palliser, SK]

Thank you.

Is that it, Chair?

[The Chair, Conservative, Phil McColeman]

You have another 40 seconds, if you'd like to take it.

[Ray Boughen, Conservative, Palliser, SK]

For the folks from ABC, where is your revenue coming from? Is it a stable source of revenue or does the social finance model fit your operation?

[Gillian Mason]

Thank you very much for the question.

ABC Life Literacy Canada is really quite new to this adventure of social enterprise. We launched the social enterprise only six weeks after we got the news that we wouldn't continue to receive federal government funding.

It's really quite new. We're developing the product and service that we hope the market will be interested in purchasing. We've done a business plan, we are now developing those products and services, and we're out marketing those as we go.

What's sustaining us in the meantime are the sponsorships we have with TD Bank and with HSBC in our other lines of business: our family literacy and our financial literacy.

[The Chair, Conservative, Phil McColeman]

Thank you very much. That ends this round.

Now we'll move on to Mr. Cuzner.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

As parliamentarians, everybody around the table is very privileged in that we get to meet some successful people. They don't necessarily hold high office and aren't successful in business, or entertainment, or whatever, but your story, as Ray identified, is very compelling, and we appreciate the fact that you came here and shared that with us today.

I have a couple of things. For ABC, I'll go off the end of Ray's question as well. Initially, you decided and felt obliged to go to social financing because there was a cutback in the public funding for what you do. Could you expand on that and how much it would have fallen off? Second, do you have a fee for service? Would you have had a fee for service prior to the loss of the public funding?

[Gillian Mason]

We anticipated, because of the signals we had been getting and the whole sector had been getting for several years, that the model for financing of literacy and essential skills training might move to employers, to the demand side and away from the supply side, so about three months before the decision was made, we developed a business plan actually with many of the resources of the people who you have heard from in this committee from across the country. We went to them for advice about creating a social enterprise model so that in the event that the funding model did change from supply side to demand side, ABC would be ready.

What we had in mind was that the Canada job grant would emerge on the first of July of 2014, and that would put significant dollars in the hands of employers to purchase training. We thought that if we were ready for the Canada job grant when it emerged with clear access for workplaces to find quality training and trainers to find employers that were in need, then we would be ready. We did launch on July 1, but that was really very much at the beginning, so we have been developing the product and the service since that time.

It is difficult to develop the market, so we're learning about pricing, we're learning about packaging, and we're learning about marketing. We're learning about developing and delivering our product more through B2B rather than directly to employers. We're developing relationships with organizations like the Canadian Manufacturing Network and the Canadian Chamber of Commerce. We are very actively seeking to be able to actually get the fee that we are charging for the fee-for-service model, yes.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Okay, but the gap would have been the loss of.... How much money did you lose?

[Gillian Mason]

It was about $500,000 a year in revenue that ABC was receiving in terms of core funding to its operations.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Sherrie, if I could, your group.... We're trying to ferret out here the role of the federal government and what we should be doing. Is there a role for the federal government or is there a role for another agency, Matchmaker.com, or whatever, to marry up groups like yours that are trying to pursue some investment and these groups that are wanting to make those types of investments? Is there a role there? Do you think the federal government should have a role there or would it be best delivered through an external agency? Do you see a need for it at all?

[Debbie Brown]

A rural hub probably needs to be started, maybe at your level. There would be great benefits of pulling smaller communities together to begin to create this. We're already so manpower strapped in building our little organizations that we don't always have the time to seek out partnerships and funders in the way that we should.