Public Safety Committee on May 15th, 2014

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Thank you very much.

Through you, Mr. Chair, thank you to the witnesses for appearing today.

I think you'll see by the type of questioning a sort of ideological divide. Some people are skeptical that anyone other than government can be successful in any kind of crime prevention. Skepticism is not a bad thing, by the way. I'm not saying it's bad. I simply say that when we deal with crime prevention, we don't want to keep doing things the same way in the expectation of better results.

We may be getting some good results, but would I be correct, Ms. Harty, in saying that the thrust of our social finance ideas and our beginning to explore them and institute them is, indeed, that? We're simply going to test it out. We're going to make sure that we do things right, based on the experience of other countries, those that worked well, those that didn't, and we'll try to use tools to ensure that we get the best possible outcome, knowing that there are no guarantees. Would that be correct?

[Siobhan Harty]

Yes, I think that one of the advantages of not being a first mover in this space, Canada gets to see what other countries have done, so there are lessons learned. There are best practices that will come from other countries, and we'll be able to examine those and decide whether we want to proceed or not. I think that provides a safeguard for us.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

And we heard mention that consultation is really good, but would you not say that consultation should then lead to action? And in this case, the action would be the development of the social contract bond, or something of that sort, and that's the action you'd take. But you'd make sure that in that action, in the social impact bond, you'd have measurability. In other words, you're able to assess whether or not it's achieving the goals.

And would you not agree that for anyone who's investing money into it, including the government—which has no money other than the taxpayers' money—you'd want to make sure that they, the taxpayers in this case, are getting the best bang for their buck?

As you say, would you not agree that the partnerships are there and that the social contract bond isn't just with...? I'll try to be kind to Mr. Garrison. Profitability isn't always evil if you get good results from it. Would you say that's correct?

[Siobhan Harty]

I won't comment on profit, but on outcomes. What I can say on outcomes is that a government or any set of partners would only want to do this if they thought, as you made mentioned in your first comment, that it was going to improve outcomes. We're trying to solve social and economic challenges and you want to be able to improve things through the application of an innovation.

I think that all partners would have to agree to that, in order to be able to come together for a project and sign a contract. If an investor didn't think that it was going to be successful, if a government didn't think it was going to be successful, if a service provider didn't think the same, I can't imagine why they would do it. So I think it's a coming together of a perspective and a meeting of minds on trying to advance something, or why do it?

There has to be a sense that you are going to be able to improve outcomes by an intervention for individuals.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Some mention was made that the richer parts of Canada, or the so-called richer parts of Canada, can afford things whereas, say, rural communities may not. Well, I come from a rural community, and you may or may not be familiar with the program, but one of my last jobs was bringing programs to the policing perspective. One of them was community policing.

Could you foresee a social contract with a community policing organization that wants to reduce, say, vandalism in the downtown? They would get a little bit of seed money from the government and perhaps from some local businesses who are being affected by it, and even the municipal government working with another level of government.

[Siobhan Harty]

I think if the community thinks it has an innovation it wants to apply and partners are prepared to come together, with or without a level of government, I guess that's for the community to decide whether it has an innovation that it wants to apply.

What are the most appropriate areas or the most appropriate partners? I don't have the answer to that. That really depends on the context.

[The Chair, Conservative, Daryl Kramp]

Thank you very much, Mr. Norlock.

Now, Mr. Rousseau.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Thank you, Mr. Chair.

I want to start by thanking everyone for being here today.

I have a few questions, and they don't have to do with the definitions as to what is considered evil or not.

What parameters does Employment and Social Development Canada most commonly use to determine whether a program is successful or not, whether it has met its objectives or not?

[Siobhan Harty]

In accordance with a Treasury Board directive, every department follows its own evaluation process. It depends on the program, but usually, a program is evaluated after five years, for example, using pre-determined criteria. The department always has a committee that examines the various aspects of the program to figure out what the criteria should be. It depends mainly on the program's objective. The program objective serves as the basis for establishing the criteria and performance evaluation measures used.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Is it the Minister of Employment and Social Development or the Treasury Board who oversees that?

[Siobhan Harty]

I couldn't tell you, given that I'm not responsible for evaluation. If you like, we could locate the Treasury Board directive and our department's policy for you.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Okay.

Mr. McMurren, my next question is for you, as the person in charge of social innovation in your department.

Could you define “social innovation” as it relates to our study?

[Blair McMurren]

Some of the definitions are rather vague. In our report, we define social innovation as new ideas to address social problems in communities. The difference between social innovation and social finance is that social finance is social innovation applied. It's an umbrella term that covers ideas related to social enterprise, social finance and social investment.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

We are mostly interested in potential crime prevention applications.

You talked about the funding of literacy and essential skills training projects. But it makes the provinces nervous when we get mixed up in that area.

Have you spoken to the provinces about how SIBs could be applied to their areas of responsibility?

[Siobhan Harty]

We haven't formally discussed it in the context of our committees.

As I said, some provinces are already showing an interest. Some have launched these types of strategies. And that has given us an opportunity to talk to them about their experiences, their expectations and their objectives. But we don't currently have any partnerships with the provinces.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

How much time do I have left?

[The Chair, Conservative, Daryl Kramp]

You have another minute left, Mr. Rousseau.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

You said foreign capital could be channelled towards local programs. Would that type of investment be subject to the same free trade agreements that Canada has signed with other countries?

[Siobhan Harty]

Absolutely. I'm no expert, but I do know that European countries always have to abide by the free trade agreements signed by the European Union.

I think that's easier for countries in Europe, since they're already used to doing business that way. We would need to take a closer look at that aspect in Canada.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Thank you kindly.

[The Chair, Conservative, Daryl Kramp]

Thank you, Mr. Rousseau.

You have just a couple of minutes, Mr. Payne. Then we'll suspend while we do the video hookup, but you have a couple of minutes now, sir.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Chair.

Thank you to the witnesses for coming.

This is a very interesting concept here, what we're hearing, and sometimes it's hard to get your head around how this is going to work. I guess that there is always some concern that organizations might try to take just the low-hanging fruit in terms of return of investment and that sort of thing. Where would we see return on investment in, say, some much more difficult cases? Would you see high returns of investment and the parameters much more difficult, or harder metrics to meet so that they can get the return on their investment?

[Siobhan Harty]

That's a good question. It's not like Blair and I have a lot of experience negotiating high finance or contracts, so what I'll share with you is simply what I hear from colleagues in other countries.

Obviously, from an investor standpoint—again, I'm not a financial investment type—the higher the risk, the more return they're going to want. It's like venture capital. So if they perceive that the project is risky, because it's an innovation and not something that necessarily has been tried on a certain scale before, they'll want a higher return. Maybe it worked in a small community, but now they want to try it in London, England. Well, what is that going to look like? It's high risk, so an investor is going to want that high return. Governments are probably not going to want to give a high return, so a negotiation has to happen there.

If it's a very proven concept, the return might be lower because the risk will be perceived as being lower. Definitely, the perception of risk is going to be very important in a negotiation.

[LaVar Payne, Conservative, Medicine Hat, AB]

Potentially, the higher the risk, the bigger the savings the government might have as well.

[Siobhan Harty]

Yes, potentially.