Tories plan overhaul of ‘social economy’
Human Resources Minister Diane Finley says the federal government “can’t do everything” to meet Canada’s social challenges, and is looking at the corporate and not-for-profit sectors to help deliver more services and tangible results.
Speaking to a few hundred Conservative supporters at the Manning Centre conference in Ottawa, Finley said millions of taxpayer dollars are spent annually on such social issues as tackling poverty, often without substantial improvements.
With that in mind, the minister said new approaches to philanthropy and addressing social issues are needed. The federal government can no longer afford to continue spending money on the same old approaches and expect to achieve better results, she said.
“Governments can’t do everything to meet our social challenges. Governments can’t simply fund every demanded service without regard for the taxpayers’ ability to pay,” Finley said in her speech at the Manning Networking Conference, which has seen Conservatives from across the country gather in the nation’s capital. “Governments can, however, facilitate and empower others to deal with social challenges.”
The Conservative government is considering a number of new alternatives when it comes to the “social economy,” she said, including more strategic investing by government, the corporate sector and not-for-profit agencies to achieve measurable improvements.
Finley specifically noted the government is considering “pay-for-performance agreements” in which federal dollars are only paid when clearly identified targets are met. Such an approach would have the private sector more involved in addressing social challenges and delivering innovative solutions, she said.
In the same vein, she said the Conservatives are considering developing — as one of many options — what are known as social impact bonds. She said the bonds are essentially a contract between the government and private investors that provide upfront capital to finance an organization — often a not-for-profit agency — to deliver a social program.
The federal cash for the program is tied to results, so the government will pay the investor the agreed premium and the original investment only if the agreed outcomes are achieved, she said.
Adopting social impact bonds would transfer the financial risk away from the government and taxpayer — who pay upfront without any guarantee of results — to the social group that will be paid for results, Finley said.
“Our approach will be incremental, it will be respectful of the government’s fiscal situation. The government cannot afford to do everything and we will need to leverage if we’re going to have maximum impact,” she added, promising the government will still take care of the vulnerable.