DATE/DATE:
October 3rd, 2013
TIME/HEURE:
1:00 p.m.
LOCATION/ENDROIT:
Calgary TELUS Convention Centre, Hall C/D, 120 Ninth Avenue SE, Calgary, Alberta
PRINCIPALS/PRINCIPAUX:
Jason Kenney, Minister of Employment and Social Development
Hon. Jason Kenney: Well, thank you very much, Allan, for the kind words, but more importantly for your remarkable leadership as one of Canada’s great philanthropists and a true pioneer in the whole field of social enterprise. Let’s all give Allan a huge hand for his amazing contribution to our society and Allan has done well in business and he has done amazing things in our society, but he’s not lost his good old- fashioned prairie common sense which animates this province and on behalf of the Government of Canada, I would like to begin by welcoming all of our overseas delegates here to Calgary, the capital, the heart of the new Canadian West. I hope that you’re getting a feel for the tremendous deep natural community spirit in this town.
Allan referred to the remarkable spontaneous social response to the recent devastating flood that we experienced here in southern Alberta.
It was an amazing example of the non-profit sector, charitable organizations, businesses, governments coming together but the most impressive thing of all was to see neighbours not being asked or told or directed or organized, just neighbours who going to parts of the city in Southern Alberta that had been affected and going into people’s basements and cleaning out the muck, taking stuff from people’s backyards and helping us begin new lives. It was social innovation in its best and oldest form. It just happened organically, naturally and it demonstrated a real sense of solidarity for one’s fellow citizens here in southern Alberta.
And really what we are here to discuss at this conference is how we capture and channel that spirit in more organized ways to benefit our fellow women and men here in Canada and all around the world. I would like to thank and acknowledge the Government of Alberta for their presence and support, several ministers here and throughout the course of the conference as well as other provincial governments that are represented. I especially would like to acknowledge Minister Eric Hoskins from the Government of Ontario and their tremendous leadership in this.
For those of you who are visiting us in Canada, we have a bit of a complicated federation. No one is ever quite sure who does what and somehow, we’ve built a pretty successful society nevertheless, but what is most important is a sense of collaboration and partnership between the two senior levels of government, particularly on social issues, like those we’re discussing here today.
I would also like to acknowledge and really sincerely thank the Trico Charitable Foundation and its driving force, Wayne Chiu for their leadership, their sponsorship, their generosity. Not only has Wayne and his team helped to bring us here together, not only is this an expression of Calgary and Canada’s global leadership in the field of social enterprise and innovation, but in so many small and quiet ways, Wayne has been an exemplar of the whole idea of social enterprise.
Just a couple of weeks ago, I was at the 25th anniversary of one of the largest recreation community rec. complex in the City of Calgary. It happens to be in my constituency and this was a place that typifies the success of social enterprise because like many community rec. centres built in the 1970s, sponsored by local community associations but funded largely by the municipal governments, it wasn’t running on a sustainable business model. The capital was aging, it needed to be renewed, the revenues were shrinking, membership was declining and the non-profit board thought they were going to have to shut the place down and that was typical of many other rec. centres serving tens of thousands of other people in this prosperous city, but some really innovative, creative private sector business-oriented people got on that non-profit board and applied their market experience, their business sense to solve problems and they realized that there were opportunities for the private sector.
So first, they went out and they sold naming opportunities for corporate sponsors and Trico stepped up as the No. 1 naming sponsor and they – then they went out to contract opportunities for businesses to come and set up things like, you know, medical clinics on site and other – provide other services and small restaurants and before you knew it, what was a kind of – a social institution teetering on the brink of bankruptcy and closure was turned around with a huge injection of new capital. They renewed the entire facility and the number of people using it has I think quadrupled and they’re retaining their earnings, constantly reinvesting. One small example of what you folks are doing across Alberta, Canada and in other parts of the world, but one very great example of what Wayne and his company have done here in Canada.
Now friends, I’m here really to say two things. First of all, that representing the government of Canada, I, together with my colleague, Candice Bergen, Minister of State and our Deputy Minister for Employment and Social Development, Ian Shugart, with the good team from our department, we’re here to listen and to learn in all humility and that really should be the posture of government when it comes to social enterprise, one of humility, knowing that government per se doesn’t have all of the answers, that many of the best and most creative answers to social problems, especially some of the most difficult social challenges, lie within civil society. Secondly, I’m here to state clearly, on behalf of the Government of Canada, our enthusiastic and unqualified support for the entire drive towards social enterprise, social finance and social innovation and to work with you in finding solutions to make this growing sector a vital part of solving problems in Canada.
Because really what this is about, you know, I know that in the discussions about social enterprise, we throw around a lot of buzz words and it’s a field that still hasn’t really caught on in terms of public currency or understanding, but really in many ways, it’s nothing new. It’s the idea of neighbours helping neighbours. It’s the idea of harnessing the creative power of markets to solve social problems in a way that they raise living standards and in the economy and it’s the – it’s based on the idea that – that in civil society, there are tremendous resources going untapped that can help us to improve our standard of living and help those in most need of it to give people a hand up rather than a hand out, to move people from dependence to independence.
You know, again, it’s not a new idea. Edmund Burke in his brilliant reflections on the revolution in France said in the 1790s that “To be attached to the subdivision, to love the little platoons we belong to in society is the first principle, the germ as it were of public affections. It’s the first link in the series by which we proceed towards the love of our country and of mankind.” The little platoon we belong to in society, it’s from that that we develop our love of our country and of mankind, a word in Greek, philanthropy and so what you are, what you represent are those little platoons in civil society that don’t seek permission to do good things. You just go out and do them, but you need government sometimes to support you and certainly to get out of the way, to create the right policy framework and that is what we want to do.
One of my first and remarkably positive impressions on social enterprise came a few years ago here in Calgary, when I was serving as Canada’s Minister of Immigration. I met some remarkable Calgary philanthropists who, inspired by the late Dr. Maria Eriksen, created something called the – then called the Alberta Immigrant Access Fund. Now, the Immigrant Access Fund, it’s spreading all across the country and again, it was based on first of all the realization of a very serious social challenge in Canada.
Now for those who are visiting us here, you need to understand Canada’s maintaining the highest per capita levels of immigration in the developed world. We’re an open and welcoming society. We value the contributions and skills of newcomers, but regrettably we too often undervalue those skills. Too often, we welcome highly educated professionals for example as economic immigrants, many of whom go on to face frustration, are stuck at the bottom of the labor market in survival jobs, often unemployed or worse, underemployed, often leading to family – family problems and tensions and a sense of shame and disappointment. People who have left often the high end of the social economic spectrum of their countries of origin to find themselves stuck at the bottom of the labour market.
You know, the sad joke in Canada is the safest place to have a heart attack in Calgary is in the back of a taxi because the chances are, your driver is a cardiac surgeon, and while we say that as a joke, it’s altogether too often true for people who feel that they’ve been cheated in terms of not being to realize their skills, their potential here in Canada.
And the reasons for this are complex. Some of them relate to our immigration system which we’re now reforming, but – and some of them relate perhaps to a certain degree of keeping a rigidity in the process of credential recognition, but there are some very practical challenges faced by individuals like that. Often, in order to get their license to practice, or to get their leg in the door for their first job at their skill level, they require additional education, Canadian education, degrees or diplomas or courses that will be recognized by professional licensing bodies or by employers, but they have to pay for that education and pay for the textbooks and pay for the certification exams and typically have depleted their savings on their move to Canada because they’re new here and have difficulty getting credit from financial institutions on a normal commercial basis and are usually stuck in survival jobs just earning enough income, often at minimum wage to put food on the table for their families.
Well, Dr. Eriksen and others in Calgary realized that there was probably a pretty simple solution to this very deep social problem we were facing which was to help find a little bit of financing to allow for such foreign trained professionals to pay for additional courses or classes to follow their degrees, pay for certification exams, financing that they could not otherwise get. And so Dr. Eriksen, through the Immigrant Access Fund began approaching philanthropists to design lines of credit to guarantee financing for qualified pre-screened immigrant professionals who wanted to take some courses here in Canada and she mentioned – I gather the very first person who signed one of those lines of credit was actually Wayne Chiu who put up $50,000, assumed $50,000 in risk on an untested idea which then blossomed. Then he was joined by many who have cumulatively millions of dollars of letters of credit and then the access fund took those commitments literally to the banks and negotiated preferential terms. They said to the bank, “Look, we’re going to triage the applicants, make sure they’re people of sound character, ensure they have a sound strategy to get educated and find gainful employment in Canada” and they launched this program.
Well, several years later, it’s turned out to be perhaps unsurprisingly a phenomenal success, with as I understand a 96% repayment rate, over 80% of the clients of the program going on radically to improve their employment. I met one man who came to Canada and who was a CFO at a company in Dubai, came to Calgary and ended up working at minimum wage up in – doing a graveyard shift at a convenience store. Thanks to a $6,000 loan he got from the access fund, he ended up taking the courses he needed that led him to a $60,000 job in a Calgary gas company.
Now that is social innovation at its best, finding creative ways to go into the marketplace and help to provide financing that would not normally be available on a commercial basis and that – and then, to even further fill up the picture, they approached, this organization approached our government and said, “Look we would really like to expand this idea but we’re constrained in terms of the overhead costs to administer the program, to screen and triage the clients for example” and so we stepped in with funding on a pilot basis and it worked out wonderfully well and now, through the Foreign Credential Referral Office in the Ministry of Citizenship and Immigration Canada, we’ve provided funding to expand this program from coast to coast and now thousands of people, foreign trained professionals, are getting the education they need to realize their potential and fully contribute to Canada’s economic productivity. That’s exactly how this should work.
And so, we believe that’s one example of how social innovation and finance can and should expand. The United Kingdom is a wonderful example of the way that transformational initiatives create new opportunities. The UK’s leadership on this issue continues to grow, with Prime Minister Cameron’s focus on the big society. Last March, leaders from around the world gathered in Davos to advance the cause of impact investing. Multibillion hedge funds, private equity firms, sovereign wealth funds, asset managers, financial services companies and social enterprises brain-stormed there on how to accelerate the flow of capital towards impact investing and the G8 social impact investment forum last June led to the creation of a task force to foster the social investment market and I’m pleased to say that I responded to an invitation from my UK counterpart for Canada to participate on an ongoing basis in the G8 forum.
Initiatives like this are setting an example for other investors who realize profits while embracing social initiatives to make a real difference. Now there are some folks out there, thankfully not too many, but there are some who seem to believe that social finance and social enterprise is just a ruse to cut government social spending or to privatize government programs, but I think they fundamentally misunderstand what this is all about. It’s about the recognition of a fundamental principle that government programs and funds alone are not, cannot be the solution to face all of our pressing social issues.
The fact is that governments in Canada like everywhere in the developed world have – like everywhere in the world, period, have limited resources – now more so than in the recent past and are constantly looking to spend – for ways to spend tax dollars more effectively, to get more bang for the buck. Social innovation is a proven method and this is an important point. Yes, there’s a lot of buzz, there are a lot of buzz words, there are a lot of theories and there’s a lot of abstraction but there’s also a lot of data and empirical evidence, a huge body of real research to point to, to demonstrate the success of social finance and enterprise. There’s a huge group of investors, community organizations and government partners who have created mutually beneficial opportunities to address pressing social issues.
For far too long, governments have imposed solutions on social challenges while ignoring often the innovative and successful approaches being developed organically from the bottom up from civil society, from local communities, from the private sector. So social innovation isn’t about displacing government or challenging what it does best, but rather finding new and more effective ways to complement the state sectors and solving social problems.
It’s by getting all of us involved so that we can find effective and results-oriented ways of dealing with social challenges such as having better participation of marginalized groups in our population, in our communities, in our labour markets. Social innovation is about putting all of our talents at work, leaving no one behind, partnering and forging alliances between governments, the business community and the voluntary sector. It’s about recognizing that government doesn’t always have the best answer.
Here’s an example. In Winnipeg, Marty Donkervoort started Inner-city Renovations. Marty wanted a successful renovation company and he wanted to create jobs for folks who were on the margins of the labour market. He realized that by simply focusing on the social side of his business, providing good jobs for people who might not otherwise have access to them wasn’t enough to attract enough business to stay afloat. Inner-city Renovations began to focus on traditional business principles: marketing, promotion, competitive price, dependable services while continuing to provide good jobs to folks, many of whom had never worked before. Strengthening the business side of his social business allowed Inner-city Renovations not only to survive but to flourish. It now has $4 million in annual revenue and provides jobs for more than 30 people, many of whom were on welfare before. His model was good for his business, good for the employed Canadians who now had a job and good for the local and national economy.
This type of initiative reminds us that we need to take the best ideas from across all sectors as we look at new ways to affect social change. I know you are all familiar with these ideas—these principles—but we need to make an effort to emphasize the importance of these initiatives to our fellow Canadians. I know this is all familiar to you, but we’ve got to spread the message of these success stories to our fellow Canadians.
The best ideas, the best initiatives don’t always come from think-tanks or governments. They often emerge at the family and community level, from people in organizations that are best placed to identify problems in their community and propose innovative solutions. The government can be there to work with organizations and private investors to capitalize on the best ideas and to focus our limited resources where they can get the best results for our communities.
But to do so, we need to build effective partnerships with the financial sector and the private sector broadly speaking and I think we’re off to a great start as reflected in the attendance and interest of this forum. The Government of Canada is playing a growing role in bringing together the private, not-for-profit and charitable sectors to address social issues. For example, last November, we launched our first call for concepts for social finance and we were impressed by the response, which we have summarized in a document available from my ministry, really remarkable proposals from all across the country.
I can tell you there were citizens, forward-thinking charities and private sector companies ready to work with each other and with government to develop innovative solutions to persistent social challenges. We’re now testing cutting-edge projects to help community organizations develop innovative ideas to social problems and have greater impact. In fact, we’ve already started to implement some of these good projects. For example, we’re beginning to implement pay for performance agreements that stipulate payment will be made only when specified results have been achieved and we’re also looking at ways to encourage not-profit organizations to find new sources of funding that can complement traditional federal funding.
I will be in the next weeks expanding the ministerial advisory committee on social innovation and social finance. I’ve just talked to Wayne Chiu this morning about – and agreed to have him and others who are leaders in this sector come to Ottawa and to sit down with myself, the Minister of Revenue, the Minister of Industry, senior officials to work to put together a work plan of things that we can do at the federal level to facilitate the expansion of social enterprise. I didn’t tell my deputy that until now, so I hope he’s not upset, but I want to sit down again with leaders from the sector, all the relevant ministers and senior officials to say what are the problems? Are there problems in terms of the application of tax law on charities? Of regulations on non-profit corporations? And if so, how do we solve those problems and help to facilitate the creation of – the availability of capital to social – areas of social finance.
And I’m pleased today to launch a literacy and essential skills project inspired by the social impact bond initiatives we’ve seen in the UK. This pilot project will bring new and effective ways of generating employer and private investments to help unemployed and underemployed Canadians develop the literacy skills they need to be connected to available jobs. For example, the Alberta Workforce Essential Skills Society will, through this funding, test new incentives for employers to invest in literacy and essential skills for its workers and the Association of Canadian Community Colleges will test incentives for investors to fund literacy and essential skills upbringing of unemployed Canadians.
As they meet the goals we established together, employers and investors will be reimbursed for results achieved. The pilot begins this fall and will reach, we hope, 1 600 low-skill workers or unemployed Canadians seeking work. I’m also pleased to tell you that yesterday, my colleague, Alice Wong, the federal minister for Seniors announced we will be testing innovative approaches to address the pressing issue, social – social isolation amongst seniors.
Our government has also introduced an action plan to grow the social enterprise sector which has been addressed in each of the last three federal budgets. This includes an agreement with the Trico Foundation to explore further social enterprise opportunities. When these innovative arrangements work, they benefit everyone. So friends, I just hope you take away from this that clear impression that the Government of Canada is a very keen partner of the growing and dynamic field of social enterprise, we’re open to your ideas about how we can clear the brush where it exists, where there are barriers to the availability of capital, to creative financing in the non-profit and charitable sectors.
There are other things we can do to help promote and raise the profile, explain to Canadians, explain to the private sector the huge opportunities that exist in this sector. We stand at your disposal. So thank you for your commitment to your fellow men and women, your fellow Canadians, your fellow citizens all around the world. Thank you for thinking outside the box, thank you for bringing the creative power of civil society to bear and to help some of those people – most desperate in need of it in our society. So we wish you very fruitful continued deliberations here and look forward to collaboration between all of you as pioneers in the field of social enterprise and the government of Canada. Thank you. Have a great day.
-30-
