Council of Canadians joins Manitoba allies in rejecting P3s for social services

Conservative Premier Brian Pallister.

The Council of Canadians stands with our labour and community allies in Manitoba opposed to Social Impact Bonds (SIBs).

On July 6, the Canadian Union of Public Employees (CUPE) stated, “Today the Manitoba government announced the opening of a request for proposals for Social Impact Bonds, a scheme in which private companies profit off social service delivery.” On October 18, the provincial government announced it had hired the MaRS Centre for Impact Investing to design a ‘made-in-Manitoba’ Social Impact Bond strategy.

The Premier of Manitoba, Brian Pallister, currently leads the Progressive Conservative majority government that was elected in April 2016.

CUPE Manitoba President Terry Egan says, “There was a time when the private sector would simply make philanthropic donations as part of their corporate responsibility to the community. Social Impact Bonds take that corporate philanthropy and turn it into a private money‑making scheme. SIBs are like P3s, for social services.”

Last month, CBC reported, “A fiscal review into core government spending [by the consulting firm KPMG] recommends Manitoba take steps to back out of public housing ownership and management in favour of more reliance on the private sector. …The [report recommended that Manitoba Housing social and affordable rental housing residents could] receive vouchers to pay for rent in private sector. Vulnerable tenants meanwhile would continue on in public housing that is either provided by Manitoba Housing or under contract between government and a private or community-based provider.”

The Winnipeg Free Press adds, “The [report also recommends that the] government should issue social-impact bonds, which could be cashed when investors meet goals set by the province. The more than 300 organizations involved in social housing would be significantly reduced by such moves and the government could raise more than $14 million by selling some of its rental properties to the private sector…”

Molly McCracken, Manitoba director for the Canadian Centre for Policy Alternatives, says,  “[KPMG] are auditors, they are not experts in social housing. They do not have a social mandate.”

And Michelle Gawronsky, the President of the Manitoba Government and General Employees’ Union, says, “[KPMG] have been hired by governments across Canada, and their reports have been used to sell a number of privatization schemes. Manitobans need to know this is the firm that the PC government worked with in the ‘90s when they tried to privatize home care in Manitoba, and they helped privatize Hydro One in Ontario.”

In April 2012, the federal government under Conservative Prime Minister Stephen Harper explored the idea of social impact bonds.

At that time, the Canadian Press reported, “Incentives are key to possible changes to the way the government handles social programs, Human Resources Minister Diane Finley said. She suggested the government is looking at creating ‘social impact bonds’, which are contracts between government and private investors to fund social programs. Payment from the government is tied to program outcomes.”

And in October 2011, The Globe and Mail reported, “As a concrete example of social-investment partnerships [that would be encouraged with this initiative], Ms. Finley points to Habitat for Humanity. By working with private-sector companies like Home Depot, the low-income housing charity and its volunteers can achieve far more social good than they could otherwise.”

The first Social Impact Bond was launched by United Kingdom-based Social Finance Ltd. in September 2010.

Promoting the idea several years later, Conservative Prime Minister David Cameron stated, “Businesses need finance to grow and make profit. Governments need finance to fund big infrastructure projects. That’s why we have banks, bonds, investment markets and all the rest. The idea here is just as simple and just as powerful. Social enterprises, charities and voluntary bodies have the knowledge, human touch and personal commitment to succeed where governments often fail. But they need finance too. They can get it from socially minded investors. So we need social investment markets, social investment bonds and social investment banks.”

The Council of Canadians rejects the Conservative ideology of turning public assets over to the private sector, including the privatization of social services.