New funding model supports single moms in Saskatoon | The StarPhoenix


A Saskatoon woman says she avoided having to make an impossible choice thanks to a new assisted-living home for at-risk single mothers in Saskatoon.

As she trains to become a nurse, Chantal McLaren, a 23-year-old single mother, will work at the Sweet Dreams home after an arrangement was made to support a program for single mothers like herself in the city.

McLaren, who spent years in one of EGADZ’s supported living homes for youth, said if she hadn’t been offered employment at Sweet Dreams, she would have faced a life-altering decision.

“I would have had to have given up school just to be able to provide for my son, and if I wanted to stay in school, maybe I would have had to have given him to someone else,” McLaren said on Monday, at the unveiling of the Sweet Dreams home.

The Saskatchewan government has adopted a controversial funding model to support the Sweet Dreams home. Under the social impact bond funding strategy, private investors are fronting the money for the home and will be reimbursed with interest by the provincial government in five years if children of supported mothers are kept out of foster care.

The funding model, which is popular in the United States and Britain, has been praised for putting private funding into social services and criticized for giving governments a way out of paying for necessary social programs.

McLaren said Sweet Dreams will give other young mothers the same opportunity.

“They’ll be able to keep their children and excel in life, have a way better future,” she said.

This is the first time a Canadian provincial government has entered into a social impact bond agreement. The federal government signed its first two such agreements last fall to support literacy and skills training programs.

Regina-based Conexus Credit Union and Saskatoon couple Wally and Colleen Mah both gave $500,000 to the EGADZ Saskatoon Downtown Youth Centre to run the new Sweet Dreams home on Queen Street, which will house as many as 11 mothers and 15 children at any time.

By 2019, Sweet Dreams aims to have 22 children and their mothers leave the home and stay together as family units for at least six months. Investors will receive a portion of their investment back if 17 to 21 children are kept out of foster care. They will not be reimbursed at all if fewer than 17 children stay with their mothers.

If the home reaches its goal, investors will receive their investment plus five per cent interest — a profit of $25,000.

Terry Scaddan, chair of the EGADZ board of directors, described the model as a “win-win situation.”

He said the government is “ponderous and slow moving” in doling out funding for social services, and that social impact bonds allow organizations like his to get money immediately to put much-needed services in place.

Social Services Minister June Draude said she expects other private investors will volunteer to front money for future social impact bonds, but said the government will wait to see how Sweet Dreams works before committing to other agreements.

“We’re going to walk before we run when it comes to this issue,” she said.

David Macdonald, a senior economist for the Canadian Centre for Policy Alternatives, said the province could find that social impact bonds are expensive ways to fund services because the bonds only work as long as the government consistently gives investors big returns.

“The social impact bonds will only continue to function if they continue to be paid out,” he said. “It’s a bit of a house of cards. You may be able to burn the credit union and wealthy individuals one time, but they’re certainly not going to come back next year to fund your social impact bonds.”

The Sweet Dreams project is expected to save the provincial government between $540,000 and $1.5 million over five years by keeping children out of foster care.