Feds hurried to spend $50M social-finance cash, documents show

At the same time, federal officials continue to work on the design of the $755 million social-finance fund

Internal government documents show that federal officials moved quickly before the fall election campaign to dole out $50 million aimed at transforming the delivery of social services.

The idea was to push money to national groups with a track record of success, and then raise awareness about the money itself with smaller groups the transformation effort is supposed to help.

A March briefing note to the minister in charge of the file said that officials would “strategically select projects” to fund “given the tight timelines” for announcements to start in June.

The approach would be faster than launching an open call for proposals, officials at Employment and Social Development Canada wrote in the document obtained by The Canadian Press through the Access to Information Act.

The money is part of a larger pot of spending that the Liberals want to give out in the coming years to social-services groups to help them partner with the private sector.

The idea is to give non-profits new sources of revenues, offer investors a way to make money while supporting social services, and possibly save federal cash in the long-run.

The Liberals have put some $800 million behind the social-finance initiative that has been the subject of behind-the-scenes debate since first announced just over a year ago.

The concept has cross-party support and groups working in the nascent sector are looking forward to seeing the final details of how the bulk of the money will be distributed, said Stephen Huddart, president and CEO of the McConnell Foundation.

The organizations using the $50 million to expand capacity — to prepare actual service providers to apply for and use the rest of the money — met in June and are scheduled to meet again in the coming weeks.

At the same time, federal officials continue to work on the design of the $755 million social-finance fund.

The idea is that payments from government would flow if a project — finding housing for people for whom current programs haven’t worked, for instance, or helping people kick drug addictions — has been shown successful through detailed data. But such a project would have to be funded in the beginning by private backers who take on the risk of failure.

The government has been told in meetings to seek three times the seed capital from private and philanthropic sources, which would amount to almost $2.3 billion on top of what’s coming from federal coffers.

The documents obtained by The Canadian Press also show the government was told to look for a return to its main social finance fund to make it sustainable, allowing the initial $755 million to be recycled over and over for new projects.

“While we support the idea that the government’s capital should be returned, I don’t think anyone would say that it’s more important to generate a financial return than it is to generate social impact, or environmental impact or to increase community capacity to solve and address complex problems,” Huddart said.

The documents don’t mention how much investors might receive in profits.

Officials have been told that the federal fund should shoulder some risk to help local funds, which would directly finance projects. Ottawa could take losses from any failed endeavours to help smaller funds attract private money by “virtually eliminating their exposure to risk.”

Other details of the government’s plan are yet to be released, including whether there will be knowledge hubs designed to help small groups learn and expand.

Sen. Ratna Omidvar, who has been a proponent of social finance in the upper chamber, said she expects these to be part of the plan.

“The field needs to be fertilized in a way so that the crops can grow,” she said.

“You can’t just simply push the money out the door without making sure that there is a higher bar on capacity, on understanding, how to service investments, how to capture data and evidence.”

She said the government needs to show patience, because success won’t be immediate. Omidvar also cautioned against fixating on financial returns to the federal fund as the measure of success.

“This is not for the short-term,” she said, pointing to experience in other countries.

“You have to have patience, you have to have determination. You have to obviously satisfy the political masters with interim indicators of success, but this is really a project for the longer term.”

Jordan Press, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

UPDATED: 12 Wet’suwet’en supporters arrested by VicPD

Protesters rallied against Coastal GasLink pipeline

Protesters block entrance to government building in support of Wet’suwet’en First Nation

A letter with four demands was delivered to the Ministry of Energy, Mines and Petroleum Resources

Indigenous LNG supporters chide human rights advocates over pipeline comments

Coastal GasLink has signed agreements with 20 elected First Nation councils along the pipeline’s 670-kilometre path

B.C. premier talks forestry, service needs with handful of northern mayors in Prince George

Prince George meeting completes premier’s tour of Kitimat, Terrace, Fort St. James and Quesnel

Unist’ot’en requesting Environmental Assessment Office withhold CGL construction permits

The camp says CGL never mentioned healing centre in report to Environmental Assessment Office

Four things ‘not’ to do if you run into Prince Harry and Meghan in B.C.

Here is a list of some things you definitely should NOT do, according to the BBC

B.C.-based Coulson Aviation C-130 crashes in Australia

Three people are confirmed dead in the crash in New South Wales

New nasal spray launched in Canada to combat hypoglycemic shock in diabetics

Baqsimi is a nasal spray contains three milligrams of glucagon

B.C. RCMP spent roughly $750K on massive manhunt for Port Alberni men

Manitoba RCMP helped with 17-day search through the province’s northern terrain

Future space homes could be made of mushrooms

NASA explores use of fungi to build structures in space

Man killed by police in Lytton called 911, asking to be shot: RCMP

Howard Schantz, also known as Barry Schantz was killed following a standoff at his Lytton home

Canadian public health agencies ramping up preparations in response to new virus

Health officials have said there are no confirmed cases of the emerging coronavirus in Canada

‘Naughty boy’: Monty Python star Terry Jones dies at 77

The comedian has been suffering from a rare form of dementia

Most Read