by John Loxley
Introduction
Social Impact Bonds (SIBs) are a relatively new method of funding and delivering social services. Under this approach the private or social sector finances and delivers services under contract to the public sector, against a bond issued by the public sector, promising to accomplish specified delivery criteria. If the criteria are, in fact, met over a specified period of time, then the private or social sector agencies cash in the bond, receiving reimbursement of their costs plus a rate of return based on performance. SIBs are not, therefore, bonds as traditionally defined, a title ascribed to financial instruments with a fixed lifetime and a fixed interest return, but are, instead, better seen as a form of public-private partnership (P3), in which finance, service delivery and, supposedly, risk, are devolved from the public to the private sector (see Loxley and Loxley, 2010). The financial instrument itself has more in common with venture capital than with bonds as, if performance targets are not met, the financing is not repaid.
by Kirsten Bernas
The City of Winnipeg’s preliminary operating budget (PDF) for 2013 cuts spending on poverty reduction, housing, and neighbourhood initiatives at a time when government leadership and resources are desperately needed to address economic and social inequality.
The document indicates that the City will further reduce an already limited role when it comes to partnering with others to reduce poverty in Winnipeg. This step backwards will move Winnipeg in the opposite direction of other major cities like Ottawa, Calgary, and Edmonton, who are all increasing their engagement in poverty reduction efforts.
The consequences of withdrawing from poverty reduction efforts will negatively impact not only our most vulnerable citizens who live in poverty, but will affect all citizens because of the strain poverty puts on our economic and social systems. For example, the city police budget has gone up 65.5% since 2005 and will see an increase of 10.1% in 2013.
by Lynne Fernandez
The Canadian Centre for Policy Alternatives has been analysing the City’s operating budget for several years now. We fully understand the challenges council faces: lack of revenues; a series of federal governments that steadfastly refuse to help eliminate the infrastructure deficit; a rapidly changing population with different needs; and since 2008, a sluggish global economy. These circumstances do not make for an easy job at budget time.
By now Winnipeggers understand that the property tax freeze could not last forever. During the period from 1999 to 2011, the tax rate actually decreased by 6%, whereas in other prairie cities, it increased by an average of 46.75%. If anything has given other cities a competitive advantage over Winnipeg, it’s been that they have been shoring up their revenues with more responsible tax increases.
Last year’s and this year’s property tax increases begin to reverse the damage done from years of tax mismanagement. Most Winnipeggers understand that in order to live in the sort of city we all want, we all have to pull our weight. Council continues, however, to allow one component of our community to avoid pulling its weight: the business community.
HOLD THE DATE!
The University of Manitoba Department of Economics will be holding a symposium to honour Dr. Robert Chernomas on February 8, 2013 in room 307 Tier Building.
The program will run from 9:00 – 4:00 and will include the following sessions:
Session 1 Macro-Marxism (9:00 – 10:30)
Session 2 Health (11.00-12.45)
Lunch: 1.00-2.15 St John’s College
Session 3 Roundtable: Academics and Activism (2:30 – 4:00)
More detail about these sessions will be made available in the following weeks.
Losing Ground: How Canada’s Employment Insurance system undermines inner-city and Aboriginal workers
by Ellen Smirl and Lynne Fernandez
The EI system allows workers to pay into a plan that is supposed to provide crucial support for workers between jobs, and quality re/training when required. However, significant changes to the system over the past 20 years have diminished the program’s effectiveness. Furthermore, EI’s role is being eroded at the same time as precarious work is expanding. The combination of these two factors is contributing to the long list of challenges inner-city and Aboriginal workers face, making it that much more difficult for them to realize their full potential.
In a new CCPA-MB. report, Ellen Smirl and Lynne Fernandez detail how Manitoba’s Aboriginal and inner-city workers fare under the current EI system.
The CCPA-MB will launch its report: Losing Ground: How Canada’s Employment Insurance system undermines inner-city and Aboriginal workers at 10 am, January 10th in room 104 at the Union Centre at Smith and Broadway.
The report explains how a succession of federal governments has effectively dismantled Canada’s EI program at the same time as economic and labour market policy has created a growing class of underprivileged workers who struggle with poverty, social marginalization, illness and uncertainty. Many of these workers live in Winnipeg’s inner city.
The Community Unemployed Help Centre (CUHC) collaborated with authors Ellen Smirl and Lynne Fernandez, allowing them access to inner-city and Aboriginal workers with firsthand experience dealing with EI.
Release of this report is timely as additional changes to EI go into effect this week that will place further restrictions on unemployed workers to obtain benefits without providing any additional support for training or job creation. Canadians have experienced over twenty years of successive cuts to the EI program and services that continue to have the most profound impact on inner city residents and those with less stable labour attachment.
Co-author Lynne Fernandez will be on hand, as will the CUHC Executive Director, Neil Cohen.
by Lynne Fernandez
A story in the Winnipeg Free Press’s The View from the West (Private Ontario liquor stores will benefit consumers) brings the issue of privatizing liquor sales to readers’ attention. Ontario’s Progressive Conservatives plan on privatizing retail liquor sales in Ontario should they take power, and the author is all in favour. He points to the “empirical evidence collected over 20 years in Alberta” and the contention that publically controlling liquor sales is “contrary to economic freedom.” The more recent piece by the Fraser Institute (December 15, 2012) supposedly dispels the “myths” that critics (such as MADD) raise about privatization. But readers should take a sober second look at this issue. A recent report issued by CCPA’s Saskatchewan office does just that.
Campanella and Flanagan’s report, Impaired Judgement: the Economic and Social Consequences of Liquor Privatization in Western Canada reminds us that liquor is not a normal commodity. With the WHO describing alcohol “as a major global contributing factor to death, disease and injury”, there are tangible public-policy reasons to control its sale. The authors explain that history has shown prohibition to be ineffective in reducing the consumption of alcohol and its attendant damage while allowing organized crime to capture the revenue that otherwise would have flowed to public purses. The report provides more compelling evidence that a free-market approach is also unable to deal with the externalities (health and social damage) that stem from alcohol abuse and that privatization actually reduces government revenues. Government control, on the other hand, has proven the most effective way of moderating consumption while capturing revenue to mediate the damage caused.
by Lynne Fernandez and John Jacobs
Recent leaks from the negotiations between Canada and EU confirm concerns that a comprehensive economic and trade agreement (CETA) would infringe on Manitoba’s ability to promote economic development and advance public interests. The proposed precedent-setting agreement would expand investor rights and extend the reach of international economic agreements, fully covering for the first time the activities of provincial and municipal governments.
In Manitoba, purchases by all levels of government amount to $5-$8 billion annually, providing considerable clout to support the provincial and local economies. Under existing free trade agreements, public expenditure is one of the few remaining policy tools provincial and municipal governments can use to directly support regional economic development, increase productivity, promote environmental policies and support disadvantaged communities.
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