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Liberals prepare to spend $50M on social-finance plan, but no strategy for now

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OTTAWA — The Liberals made their first $50-million move Wednesday in a plan to finance experimental ways to deliver social services, intending to help small social-service organizations understand how to apply for a much bigger pot of money starting next year.

It’s uncharted water for both the government and the organizations it hopes will share hundreds of millions of dollars more, and the early part of the voyage has been rough.

Federal officials have been working on a strategy for social finance, as it’s known, for years, hoping to bring private funding, incentives and discipline into social services governments provide themselves or directly fund.

The idea is that private backers partner with a group or organization to fund new ways of helping people improve their job skills or health, for instance, with public dollars flowing in if the partnership produces measurable results — shifting the financial risk off the public purse.

The Liberals have promised $755 million over 10 years for a social-finance fund.

There is also the $50 million over two years to teach those organizations about a process that they have rarely, if ever, had any experience with. The government said Wednesday it is turning to 17 existing social-finance organizations, which will move the $50 million to smaller groups to make sure the larger fund, when it launches in 2020, doesn’t sit idle because no one knows how to apply.

“These organizations are looking for ways to make a difference not only from an economic, but also from a social and environmental, perspective. I am very hopeful and very confident that they will,” Social Development Minister Jean-Yves Duclos said in an interview.

Andrew Chunilall, CEO of the Community Foundations of Canada, said there is no way to be sure what benchmarks are needed to measure the spending’s success, pointing to the relatively new financing territory the country is traversing.

“It is about not knowing what the outcome is going to be and stepping into the space of uncertainty and just be willing to determine success on a set of variables you hadn’t contemplated in the first hand,” said Chunilall, whose organization will have a hand in how almost half the $50 million is spent.

“That really is a new way of thinking, it’s the way that this next generation of entrepreneurs is thinking.”

Duclos acknowledged that the unknowns have not made it easy for officials try to chart a policy path to make federal rules friendlier to the sector.

The government announced a new advisory council Wednesday to help guide federal efforts.

“It’s never been done before so the federal government has no experience in doing these things,” Duclos said. “It’s natural that people are talking about different mechanisms. That’s not only natural, but it’s a great thing because it’s going to make sure that these historic investments are going to be very impactful across Canada.”

Problems appeared to arise late last year when officials from Employment and Social Development Canada (Duclos’ department) and the Finance Department disagreed sharply about how the government should use the $755 million, according to multiple sources with knowledge of the behind-the-scenes talk who have spoken to The Canadian Press under condition of anonymity to detail private events.

The last version of the plan suggested a fund manager and secretariat be housed inside ESDC with an advisory council of external experts making funding recommendations. Duclos said the government is considering different options, with conversations taking place with outside organizations.

Sources also said the Canada Revenue Agency has balked at rewriting the tax code to allow non-profits to run socially motivated companies that would turn profits, which could then be reinvested, without fear of losing their tax-exempt status. 

Documents previously obtained by The Canadian Press under the access-to-information law suggested such a change would put small, for-profit businesses at a competitive disadvantage.

Jordan Press, The Canadian Press


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National

Chief military judge’s court martial in limbo after deputy recuses himself

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OTTAWA — The court martial for Canada’s chief military judge is in limbo after the judge overseeing the trial, who happens to be deputy to the accused, agreed not to hear the case over conflict-of-interest concerns.

Lt.-Col. Louis-Vincent d’Auteuil also outlined the reasons why he felt the military’s other three sitting judges would not be able to preside over Col. Mario Dutil’s trial in an impartial manner.

That has left the fate of Dutil’s court martial, seen by some as a critical test for the military-justice system, up in the air.

Dutil was charged with eight counts in relation to allegations he had an inappropriate relationship with a subordinate and knowingly signed a travel claim for $927.60 that contained false information.

Four of the charges were dropped at the start of the court martial last week, where Dutil’s lawyer challenged d’Auteuil’s impartiality and asked the presiding judge to recuse himself. A publication ban on details of that portion of the hearing has since been lifted.

In agreeing to the request, d’Auteuil said it was reasonable to believe he would be biased because of his relationship to several witnesses — which he believed also applied to other military judges.

The Canadian Press

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Lighthizer agrees to do whatever it takes to get new NAFTA passed

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OTTAWA — U.S. trade czar Robert Lighthizer says he will work with Democrats to do whatever it takes to ratify the new North American free trade deal.

Lighthizer made the pledge in testimony today before the U.S. Senate finance committee as part of the Trump administration’s push to get the United States-Mexico-Canada Agreement ratified by a divided Congress.

Lighthizer’s appearance on Capitol Hill comes two days before Prime Minister Justin Trudeau meets President Donald Trump at the White House to give impetus towards ratifying the deal.

Oregon Sen. Ron Wyden, the ranking Democrat on the committee, says the new deal has “weak enforcement” provisions on raising labour standards in Mexico that he and his party want to fix.

Lighthizer says USMCA has stronger enforcement provisions than the old North American Free Trade Agreement, including improved labour rights in Mexico, but he’s open to making it stronger.

Lighthizer says he has had good discussions with Democratic House Speaker Nancy Pelosi and suggests that getting a ratification bill introduced in the lower house of Congress — a necessary first step towards U.S. ratification of the pact — might be weeks away.

The Canadian Press

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