Liberals look to create social finance strategy to help indigenous groups

OTTAWA — Damon Johnston admits his organization made a number of mistakes when it launched Mother Earth Recycling, a Winnipeg-based social enterprise that aims to help tough-to-employ indigenous peoples.

He hopes that others don’t make the same errors and thinks a federal initiative might help deliver more than business acumen to indigenous organizations looking to tap into a new and growing method of funding social programs.

Internal documents show the government wants to create a social finance strategy specifically for indigenous peoples. Johnston said that strategy would have to focus on helping startups acquire the business knowledge needed to run a company and address wider concerns around raising capital.

Johnston said the barriers to expansion of the number of aboriginal social enterprises are higher because of indigenous peoples’ historic lack of participation in the economy, making the potential benefits of a targeted social finance strategy that much greater.

“Social financing and social enterprise and co-op development — all of those things — what they mean to us or represent to us is a better way to work with us as indigenous peoples,”  said Johnston, president of the Aboriginal Council of Winnipeg, which owns Mother Earth Recycling.

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“There’s more of a sharing of the wealth created in those types of ventures, so that’s why it’s attractive. It’s also more in line with our historic values, the way we like to do things.”

Mother Earth Recycling is an example of how a social enterprise can help urban indigenous Canadians.

Launched in 2012, the company employs about 10 First Nations people, who Johnston said could be described as hard to employ: they may have criminal records, disabilities, mental health issues, little or no work experience.

Mother Earth began recycling electronics and last year expanded to offer low-cost mattress recycling through a partnership with furniture retailer Ikea — along with help from the Manitoba government and City of Winnipeg.

Social financing can take on a number of forms, but is designed to connect private investors with an organization to deliver a social program. Federal funding flows only if the program meets a set of measurable benchmarks, such as the number of people employed or improvements in essential skills. The approach shifts the financial risk to investors from taxpayers and can open the door to more innovative ways of delivering social services.

A July presentation to then-labour minister MaryAnn Mihychuk noted that research shows vulnerable populations like aboriginals “are not well served by existing government interventions” and could benefit from new approaches to jobs and skills training programs.

Part of the presentation, marked “secret”, says that these vulnerable populations draw an inordinate amount of program spending “that does not appear to lead to improved outcomes.”

The Canadian Press obtained a copy of the presentation and briefing material about an aboriginal stream to the social finance strategy under the Access to Information Act.

A spokesman for Social Development Minister Jean-Yves Duclos said the government plans to launch a specific social financing stream for indigenous groups after unveiling its general strategy. In the meantime, Duclos’s department is talking with indigenous groups to learn more about how to craft an effective strategy, Mathieu Filion said..

“Like for housing or homelessness, we want to launch a program that will target them directly,” he said.

“We want to have discussions with stakeholders and indigenous groups in order to make sure that the strategy addresses aboriginal-specific issues.”

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Jordan Press, The Canadian Press