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

VIDEO: Exciting trio of string meisters coming to the Valley on Feb. 9

Andrew Collins Trio promises an evening of lively music at Providence Farm Chapel

Lexi Bainas column: Thanks for the memories: Lexi Bainas reflects on retirement

It’s been great but it’s time for the last waltz

Sonia Furstenau column: Proud of moving forward important issues over the last year

During the announcement, I reflected on the role my office played

Drivesmart column: The difficulty with stop signs

One wouldn’t think that stopping at a stop sign would be such a problem for drivers.

VIDEO: Music stars pay tribute to Kobe Bryant at Grammys award show

Music artists including Billy Ray Cyrus, Rick Ross and Kirk Franklin paid tribute to Bryant

Kobe Bryant’s helicopter flew in fog that grounded other choppers

The cause of the crash that killed Bryant, his daughter and several others was unknown

Victoria-area wolf tranquilized after being seen running around neighbourhood

Officials say wolf unharmed during its ‘arrest’

Ontario confirms second presumptive coronavirus case in wife of first patient

Both arrived on a China Southern Airlines flight after having been to Wuhan

Canada’s basketball community mourns Kobe Bryant after helicopter crash

Bryant was an 18-time NBA all-star who won five championships

‘Devastated’: Fans, celebrities remember Kobe Bryant after his death

Bryant played all of his 20-year career with the NBA with the Los Angeles Lakers

Investigation launched after six dead puppies dumped in Richmond hotel parking lot

RAPS reminds people they can always give up puppies they can’t take care of

Canadian Lunar New Year celebrations dampened by coronavirus worries

But Health Minister Patty Hajdu said today that the risk of infection is low

B.C. VIEWS: New coronavirus outbreak an important reminder

Walking the line between cautious and alarmist

Most Read