The federal government wants to let the private sector profit from social services. In a submission to consultations on the Liberal government’s “social innovation and social finance” strategy, CUPE warns there’s no room for profit in community and social services.

Social services are central to the health and well-being of our communities. Governments should focus on promoting social welfare, not diverting public revenue to private sector profits.

“Social finance” promotes profit-driven private investment in social services. Sources of private financing can include banks, corporations, foundations or wealthy individuals – all looking to maximize their returns.

Underfunding starves services

Decades of underfunding have starved community agencies, creating the conditions for privatization. While the funding crisis isn’t a focus of the Liberal consultations, our submission calls for long-term, sustainable federal and provincial funding as the key to enhancing social services.

With a secure financial foundation, public and non-profit agencies are well-placed to strengthen and expand vital services. Well-funded public agencies will have the stability to enhance services, guided by people who use the services, and the workers who deliver them.

CUPE reinforced this point at a meeting with members of a federal government steering committee, in a joint presentation with representatives of NUPGE and the CLC.

Experience from other countries shows “social finance” is a failed strategy. Social finance schemes, including social impact bonds (SIBs), are pitched as an “innovative” new way to fund public services, but are just another form of privatization. Social finance has the same fundamental problems as all for-profit service delivery:

  • The profit motive influences what services are provided, and who has access.
  • Scarce funds are diverted from front-line services into corporate and consultant pockets.
  • Important information is kept secret, making services less accountable and democratic.

Public funding is the solution

CUPE is calling on the government to stop promoting this questionable strategy, and instead ensure corporations and wealthy individuals support the delivery of social services in an accountable, equitable way – by paying their fair share of taxes.

Closing tax loopholes and reversing corporate tax cuts would provide substantial revenue to support all public services and infrastructure – including social services.

Download and share CUPE’s SIBs fact sheet.