HUMA Committee Report

SUPPLEMENTARY OPINION OF THE LIBERAL PARTY OF CANADA

We would like to thank all of the witnesses that appeared before the HUMA committee during the course of the Exploring the Potential of Social Finance in Canada study. The Liberal Party supports the intent of the study and its recommendations.

Throughout the study we heard from witnesses from Third Sector organizations (including charities, non-profits, co-operatives, and social purpose businesses) who are finding innovative ways to solve societal problems with limited resources. The Liberal Party seeks to ensure that all sectors, including the Third Sector, have access to capital to assist in solving the nation’s social problems. We believe government should be active in facilitating and stimulating private investment for public good.

Social financing can have different meanings to different groups (e.g. for-profit vs. non-profit, investor vs. investee) depending on where they are along the spectrum of enterprises that operate in or contribute to the social economy. The Liberal Party believes social financing can be beneficial if it is used to assist organizations responding to a social need who are guided by a social conscience (i.e. social return rather than investment returns as the number one priority). It is our hope that the government be guided by this belief in defining its role in developing social financing measures.

We would like to take this opportunity to make some additional comments about certain issues raised in the Report.

Social Impact Bonds

As the Report notes, the Committee heard from a variety of witnesses who had concerns and criticisms regarding the use of Social Impact Bonds (SIBs).

It is important to ensure that the critiques and negative concerns of SIBs raised by stakeholders and witnesses are kept in mind when discussing this social finance mechanism. The government must ensure that the quality of social services does not decrease in the event of outsourcing. Additionally, the value for dollar for the government and the taxpayer should be clearly proven prior to the implementation or adoption of SIBs.

Dr. John Loxley made a fair point in critiquing the use of SIBs, “I would argue that the first priority should be improving the funding and delivery of services in and by the public sector, and that should be a priority over pursuing and creating enabling environments for social impact bonds.”^[1]

It is clear that there are a many concerns about SIBs that must be addressed if such measures were to be implemented by government. In dealing with social services and the most vulnerable Canadians, it is important to ensure that the government prioritizes their needs and success above all.

Government Program Data and Evaluation

Sunil Johal from the Mowat Centre makes a cogent point when he states that, “governments should invest in better evidence and measurement to support promising opportunities for program innovation and support the long-term development of evidence-based policies.”^[2] It is imperative that the government have both the proper data and measurement criteria to evaluate the social impact and efficacy of its existing programs and services. The identification of data-based outcome targets is a necessary prerequisite for both the success of social financing and the effective delivery of government programs.

The evaluation of existing government programs continues to be in short supply. In 2010, departments spent on average less than 0.1 percent of direct program funds on evaluation.^[3] Similarly, as noted in the Report, Employment and Social Development Canada continues to measure outputs, despite having both the capacity and the existing data to measure outcomes.

The Liberal Party supports evidence-based policy and the development of broader and deeper evaluation criteria of existing programs in order for all stakeholders to make informed decisions. In this context, enhancing measurement and evidence tools for current government programs and services is necessary prior to engaging in the intricacies of social financing tools such as SIBs.