Thank you, Mr. Chair.
My question is for Dr. Mulvale.
Two weeks ago, the committee heard from David Juppe, who is a senior operating budget manager. He expressed some concerns about social impact bonds, in particular. I would like to know your opinion on those bonds.
His argument was basically that these bonds will increase the costs that the government will have to assume because they add an intermediary between the government and the service provider. He argued that once the interest rate for these bonds is set, there is no limit to the amount that these interest rates can generate. In a capital market, the interest rate is tied to the risk of the activity. That's the case for any kind of bond. Mr. Juppe said that it's a type of loan where the government pays the interest if the program works.
Doesn't the fact that there is also an intermediary with social impact bonds mean that there's a risk that the government would spend more than if it paid the service provider directly? What are your thoughts?