Human Resources Committee on May 12th, 2015

[Donald Meikle]

We have a number of different homes. We have a baby steps home that has two bedrooms. If we have a mother and her children in care, they can move into the same house and they provide the care while being supervised by staff.

Sweet Dreams to me is a lot different. It is is for mothers who have taken their children out of care and need that extra opportunity. The best way to help somebody is to provide opportunity. We can't just keep helping somebody to a certain point and then dropping off. We need to help them long term. We need to take that extra investment. Also the Sweet Dreams home is.... I guess I wasn't clear enough in my explanation. Currently we're able to help people not based on their income and not based on the colour of their skin, but on need. For example, we currently have a mother with two children who is in a violent situation, whose uncle phoned us begging for a spot for her. We were able to take her into the Sweet Dreams program to help her. It's based on need. All of the policy and all of the legislation is secondary to the needs of the client.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

To continue with that, there is potential if you had a child in care in community services—

[Donald Meikle]

Yes.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

—and the child was about to be returned to that parent because the home situation had changed. That parent may have had an addiction that they've dealt with. Instead of just sending the child back to the home where the problem was or back to that situation, this gives the previously troubled parent the opportunity—it's why the child was seized from them most likely, or there had to be a voluntary intake—and the supports for at least the first little while the child is returned to that household. Am I accurate in saying that's one of the things you can do?

[Donald Meikle]

Yes, that's one of them.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Great.

Mr. McFee, thank you very much for being here.

From the perspective of the province—I'm sure you're aware a bit about this—are there significant savings to its community services budget if you're able to execute this type of support, where they could provide this service by a third party in a home like this?

[Dale McFee]

Yes, it's estimated at between $500,000 and $1.2 million on this project.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

The province invests about $1 million into support for the social impact bond, so there's probably a net saving between $500,000 and maybe a bit more on a return to the province for this.

[Dale McFee]

That's correct, for 22 children.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you very much.

Dr. Juppe, you made some comments about social impact bonds. We've heard similar comments from several witnesses here. From your research down in Annapolis—and you looked at a couple of other states and at some things that other jurisdictions within the United States have done—is it pretty conclusive that the jury is still out on social impact bonds? Or have you actually concluded that these are not productive and are probably the wrong way to go?

[Dr. David Juppe]

It's still very early. A number of states are looking at social impact bonds, and only a handful have implemented them. But our research suggests that they're more expensive, particularly since there is a rate of return to be paid. It's much simpler for government to contract directly with service providers. Why introduce a third-party intermediary? It makes no sense to us.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Right. So the initiative of social finance can be very positive and very effective. Is it just the social impact bond—that structure within social finance—that you're critical of and don't think is effective?

[Dr. David Juppe]

Yes.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

There's not very much time left, so I want to say to Mr. Meikle that the next time I'm in Saskatchewan, I want to come to take a look at this, if I can.

[A voice]

You're always welcome.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you very much. Thank you all.

[The Chair, Conservative, Phil McColeman]

Now we move on to Mr. Cuzner.

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

Thanks very much, and thanks to the witnesses.

I'll start with Mr. McFee.

You were going pretty fast with the numbers. I heard somewhere in the last couple of weeks that math is hard. I was having trouble keeping up. You were extrapolating out over the years the number of dollars it would take eventually. I think we can all agree that early intervention and prevention would be the most effective use of public money. If we can keep young people from not engaging in the justice system, I think that's ideal.

That's why I like what you're doing with the absentee program. Can you share with the committee...? Truancy would have been a responsibility of the school board before you changed the approach. Could you give us some kind of indication as to the numbers before the change in direction? And why wasn't it getting done before, if in fact it wasn't getting done?

[Dale McFee]

You know, that's a great question. It's better to reverse-engineer it and have a look at how we can make a positive change.

When we started to look at this from a multi-agency perspective and looked at the correlation with criminal activity, it became everybody's responsibility. When you start mining into it, you find that in Saskatchewan there are 6,700 kids missing. I don't mean missing as in missing persons, but registered at one school and then not registered somewhere else. How do you increase graduation rates unless you can actually find where they are?

The old, traditional methods obviously, in an enforcement perspective, don't work. But if you think about this in an intervention perspective, if you had a third party actually looking at it as an opportunity to do an intervention that is designed around our hubs and cores; if you started seeing those as opportunities, you could change the way the business is being done.

A lot of this is based in poverty, as you know. If you take a financial income as the starting point to get in, if you need to increase from a 40% attendance rate—let's just use that number, which is actually high—and want to get it to a 90% variance rate, then you can determine what mechanism to use. Is it a social impact bond? Is it pay for success—in other words, impact investing? Perhaps we can use our own money as the investor through incentive-based, or we can bring a third party in.

The point is that this is what we're analyzing now: what is the best way to operationalize this? We know that going from a 40% attendance rate to a 90% attendance rate and maybe throwing a parenting class into the middle of it and attached to it is absolutely a gold mine of return, based on data. But it's a question of putting the right mechanism in to get it right, with what you just described: it needs to be horizontal across sectors.

The problem we have is that every sector is trying to own stuff. That is putting everybody in a silo and then trying to fix something when you know 10% of the story.

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

Thanks.

Dr. Juppe, you haven't really shared with us any great success stories from states that have taken the social impact bond approach. I think the broader rationale is that there may be some issues that can be dealt with using social impact bonds, and these may be some of the lower-hanging fruit. At least doing so would unlock some potential public dollars to deal with more complex problems. That's what we've picked up from a number of the witnesses now.

Are you seeing any of this take place? Are you aware of any instances in which this has been able to free up money for other investments by state governments?

[Dr. David Juppe]

I haven't yet. Don't confuse the provision of the service with how you pay for it. There are a number of these programs that are very successful.

I gave you the example of a program in Maryland called the public safety compact, which was designed to reduce recidivism and prevent offenders from returning to prison. It has been in place for three or four years. It has been paid for with a social impact bond.

The program has been extremely successful compared to control groups. It has reduced the number of offenders returning to prison by a wide margin. But the Department of Public Safety and Correctional Services has decided not to renew the contract through this mechanism because they're not achieving the savings they expected; they're paying 60% of the total fixed and variable costs to this provider for this service. They think they can simply contract directly for this service from the provider without the financing component and have a very successful program.

Rikers Island in New York also seems to have a very successful program right now, but the question is, how do you pay for it? The programs can be very successful. You don't necessarily have to have a third-party financier with a rate of return.

[The Chair, Conservative, Phil McColeman]

Thank you very much. That's your five minutes.

Now, we move on to Mr. Boughen for five minutes.

[Ray Boughen, Conservative, Palliser, SK]

Thank you, Mr. Chair.

During your presentation, Dr. Juppe, you said that it's a little tentative as to whether or not there's any return on investment in the program that you're familiar with. Is that common? We've heard other resource people indicate that there's a fair degree of success. What factor determines whether or not it's going to go forward?

[Dr. David Juppe]

The two programs we've studied intensively have to do with preventing offenders from returning to prison. The savings that we're seeing are just related to variable costs for these offenders, the cost of food, medical expenses and supplies, for example.

You're not getting as great savings as was anticipated, because unless you close an entire facility, you don't receive the savings of that fixed expense. You may be diverting some offenders and you may divert the need to eventually build an additional prison, but that doesn't save you anything right now in your current budget.

I think that unless you can completely close a facility, you really don't see the level of savings you might anticipate

[Ray Boughen, Conservative, Palliser, SK]

Thank you.

Donald and Dale, you're both Saskatchewan folks, one in the northern part and one in the southern part in terms of your programs. I too am a Saskatchewan lad, so I appreciate what you're saying.

Could you enlighten us a little more about the makeup of the group? I didn't notice either one of you mention first nations folks in the programs. We have a large number of first nations folks, and often they're in need of some care. Could you expand a little on the composition of your groups?

May we start with Dale?