Evidence of meeting #50 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, as are the minutes.) The winning word was change.
A recording is available from Parliament.
Chair, Northern Development Initiative Trust
Yes. It operates today. As I say, I'm throughout the community, and I see it through the course of my business there, and it still operates as a central part of the community.
Conservative
Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS
Do you have any idea of what your success rate is on that particular type of grant? Are most of the businesses that have been set up still operational and still profitable and contributing back?
Chair, Northern Development Initiative Trust
The majority of them are. It actually got to where we believed that the board and the trust were being too risk averse, so we increased our risk. I think this year we will have our first default, where a business did not meet its obligations. We'll so-called “lose” dollars, but we believe that we're not a bank, that we're here to grow the economy and prosper. You have to take some risks.
As long as we fit under some type of threshold in terms of how much we can afford to lose, that becomes acceptable, because we believe that if we never fail, we're not capturing all the opportunity.
Conservative
Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS
I would agree with that.
In all the projects you've funded with this particular type of grant, you've only ever had one default, and that's just in this most recent year because you had expanded your liability to risk. Have all the other ones been successful?
Conservative
Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS
I congratulate you on that.
Chair, Northern Development Initiative Trust
I think a big part of this is recognizing that as politicians, and in knowing people, when you look at what our structure is, which is unique, we're probably not more than two people away from anywhere within our organization in understanding who's applying and what they are. We're tied into every local government and most of the first nations. When you get down into your small communities, most of your local politicians know everybody, or they can ask somebody who knows about somebody. We have an incredible unofficial due diligence network.
Conservative
Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS
Yes, and that's probably an advantage that you would have over a federal government structure, actually, in running this type of system. Would you agree with that?
Chair, Northern Development Initiative Trust
Yes. A bureaucratic system really doesn't have that ability to do that.
Conservative
Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS
Thank you.
Mr. Cyr, thanks again for being here today.
You talked about the Pan Am Games and the making of moccasins. Could you talk about the specifics of that program?
Executive Director, National Association of Friendship Centres
I don't have that one in front of me.
Conservative
Executive Director, National Association of Friendship Centres
The Ontario Federation made a bid to provide the moccasins that are going out at the Pan Am Games. They're producing them in friendship centres across Ontario. It's an interesting model, whereby they leverage their own internal funding and use it to build. Then they use that to reinvest.
I think one of the important things, and it's probably come up at this committee a dozen times, is that in the social economy and the social finance model, the ultimate driver is not profit. It's social change. Profit on its own doesn't really help at the end of the day, unless we're driving systems change across the board. That's what Ontario is trying to do by building the moccasins. They're reinvesting it into programs in the centres.
In 30 seconds, I'll give one other quick example.
In Courtenay, British Columbia, there's a friendship centre. There were abandoned schools in Courtenay because of population and demographic changes, and the grandmothers in the community and the friendship centre started planting medicinal herbs and herbs for teas. Eventually these became popular, and they started to package and sell them. They're in 160 shops in Canada now. They reinvest the money in youth programming and the friendship centre. They just bought a gigantic packaging machine from China.
The model is different. The model is to put back into the community as the end state and to train people as you go. That's the second example.
Conservative
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
I thank the guests for coming today.
I'm from Cape Breton. Cape Breton is a founding place for cooperatives. We've gone through a lot of economic hard times over the years in Cape Breton, so there is a very large component of social interaction and social financing.
We have a few examples in Cape Breton that are very successful. We have New Dawn and BCA Holdings. The community is very engaged. They filled the gaps where government sometimes doesn't do the job, for various reasons, whether it's in social housing or helping small businesses.
I see in some of your reports here how successful you are. Only a couple of per cent are failures, and also there's the administration and how you keep those numbers down. It is a model that needs to be encouraged and fostered.
My first question for all of you deals with the federal and provincial sides, because some of our social financing is done through provincial funding. What needs to be changed more on the federal side to help foster this?
It deals with everything. Some of the needs we see include day care, and some of our groups back home are thinking of getting into day care. For many of the things that we see as challenges in our society and the future, how can the federal government help foster this more and help to fill that gap? How should we be taking a lead with the provinces to make sure that it's fairly uniform across the country?
National Executive Director, National Office, Canadian Parks and Wilderness Society
This might not be an area of expertise, but in terms of the model we're looking at, the one barrier that we see around it is that, right now, if you're a charity and you're registered as a corporation charity, you can't actually create any profits at all on a regular basis. It must be a very small piece of your revenue. It has to be related to your mission.
The kind of model that I'm talking to you about, the idea of a building, means that you have to end up creating a for-profit corporation that gives 100% of its profits, essentially, to the charity as a gift. It's a bit of an odd model, but that's what it ends up having to be in order to make it easy for a charity, for example, to be able to carry out a profit-making venture. There are probably places around charities, in terms of the Income Tax Act and other places, where there could be ways to break down some of those barriers so that charities can actually make that work. It isn't a federal-provincial question. Again, charities are managed at the federal level, so I wouldn't have much to say when it comes to the division of responsibilities on that front.
I suspect that on social programs, the other two witnesses would probably be better to answer those questions.
Executive Director, National Association of Friendship Centres
Sure. I can give it a quick stab.
One of the things we've learned in the establishment of the urban partnerships program, specifically on innovation and the social economy, is that the closer the money gets to the community before it's decided how it's used, the more effective it becomes. The community needs to own projects, let's call them; they have to be community-owned projects. If you don't have community buy-in, you can't sustain them in the long run.
One of the federal-provincial structural things we've found is that from my offices we push down resources to the community level, much like the model here from our colleague in British Columbia, because they're only one degree of separation away from the folks on the ground who are actually having to push this through. Any top-down structure doesn't really work. It has to be pushed down to the community, and it has to allow a little bit of risk. For federal programming, in the case of the one that we administer, we found that pushing it down to that level helped.
I'm going to agree right away with my colleague here. I'm a not-for-profit organization. I can't maintain a profit and I can't put it back in under the current tax rules governing not-for-profits. I have to come out with a zero balance every year. I have a $49-million budget. Coming out with a zero balance is tricky business sometimes.
Liberal
Executive Director, National Association of Friendship Centres
Very careful planning, very careful expenditures.
Executive Director, National Association of Friendship Centres
It doesn't work like a private corporation where you have dividends. I spend all the programming resources. Unearned revenues I'm allowed to hold over, and I do. They're very small amounts.
My concept on SIBs, too, is that we need to have a way to invest back into those community-based organizations so that they can generate revenue and use it for social good. Otherwise, we get trapped in our own financial systems. That's where social finance can come in handy.
I think there's work here within the federal government and CRA that needs to be done. I know that ESDC as a department was looking at parts of that. I don't know what the success is. I know that social finance has been a part of the last three federal budgets. We're assuming that we're going to try to push that boundary along.
There is room to break down barriers. When you push money down to that level, my provincial colleagues are able to leverage the provinces in, because it becomes a centre of gravity around the resources, fundamentally.
Conservative
Colin Mayes Conservative Okanagan—Shuswap, BC
Thank you, witnesses, for being here.
It's good to see you, Mr. Cyr. I always appreciate the leadership you provide to the National Association of Friendship Centres.
It's called social finance because they want social outcomes. You're right that it's not about profits; it's about social outcomes. We've talked about various programs about which you were saying it would be nice to have a return on investment so that we could further invest in that type of thing. How do you measure the social outcomes? Quite often with programs, we find that they're up and running and they're good, and then when they finish learning those skills, all of a sudden the things that were done are just dropped. We want to move those ahead to make changes, social changes. I've experienced a number in my life especially with first nations with regard to issues around ownership of housing, and actually the first nations community training the young people to be carpenters and plumbers and that type of thing, and all of a sudden there's an ownership and there's a social change there. It's quite amazing. I'm just wondering if you've had any of those experiences you could share with us.
The second question would be for everyone.
Are there any policy changes we need to look at as a government? There was some mention of issues with regard to Revenue Canada and how charities cannot have a profit. Is that something we need to look at as far as trying to find a policy change goes, so that we can accommodate that as long as the money is reinvested in the program or something else to benefit the community?
Executive Director, National Association of Friendship Centres
You hit the nail on the head with social finance. It's about measurement, or outcomes measurement. The complicated component of social programs, and we've dealt with this for decades now, is how you measure when you've had success. If you put a leadership program into place, how do you know at the end of the day whether you've created a leader? There are ways to do it though. The issue is that they don't necessarily fall into—and this may be a little unkind—traditional bureaucratic thinking about the scope or timeframe for this program and the length of time we have to work within before we need to measure and bring results back to Treasury Board and figure out whether it's been successful or not.
The first thing to say is that programs should be long arc. They have to be beyond two or three years before you're really going to see change. It puts too much pressure on organizations to figure out how to measure that change. That change is generally measured—and I can give you one example of something that we're assisting with working on—through some unconventional means like storytelling. You kind of have to track people's lives to figure out where you've had input into them. We know that personal stories about where people got their start and how they were moved along are very powerful. Friendship centres are known for the stories of how we've helped individuals, and that applies to the broader scheme. We have to get better at the measurement. One of the reasons we're doing an indigenous social innovation summit in Winnipeg is to get at the measurement. It's about how we're going to know. We're doing it over three years, because even the summit needs to be measured against itself as to whether it's had success and whether we see a change.
One example is that we started to do preliminary work with the McConnell Foundation on Canada learning bonds. The take-up on Canada learning bonds is really poor, speaking from an indigenous community perspective. From an indigenous community perspective that's because there are multiple barriers around them, things you wouldn't think of: proper identity, proper bank accounts, fear and anxiety with regard to the system. Just walking into a bank, if you're not used to working with a bank, can be daunting for an aboriginal person who's come from Cross Lake and moved into Winnipeg.
The Winnipeg Boldness Project, which is not our project, is looking at ways around it. The Omega project in Toronto looked at it, and they've had success: a 40% to 60% increase in Canada learning bond take-up.
Now the social innovation component of that is to take that money that's going back into banks and have the banks at a local level reinvest it into social programs in the community at level of the credit union or the bank. That's where the innovation starts to come in. The money is already there. The government has already put the money in the learning bonds. It's already out there. It's just a matter of accessing it, and it's for people under a certain income level, under the poverty line. Then you can measure.
I think Stephen Huddart from the McConnell Foundation appeared before you. He said that as soon as you have a four-year-old—and I have five kids—who knows there's an investment in their education out there, they will immediately start to change their behaviours. That's social change. Now how are you going to measure things for that four-year-old? The government cycle is not going to allow you to do that. You need longitudinal measurement systems.
Unfortunately, as I said before, the systems we have aren't designed for the social change we need. The Treasury Board needs to know that it's going to take a long time to do this. It's going to take a while, and we need to look at the short-, medium-, and long-term changes that we actually want to see.
I know I'm way over my time, so the chair's probably going to grab that. I won't try to answer the second question, because I think we kind of handled it.
Conservative
The Chair Conservative Phil McColeman
Well, you are correct. You were way over your time, but that's okay.
We're going to give you a lot of latitude because it's very good input we're receiving from you.
Now we move on to the second round of questioning, and Madam Groguhé.
Oh, it's Madam Morin.