Rate Drop Rebate is a unique partnership that brings together financial institutions, the Government of Ontario and Social Capital Partners to deliver an innovative loan program that reduces unfair barriers to employment, helps grow the province’s small and mid-sized businesses and create a fairer economy for all.
Thousands of qualified workers in Ontario face unfair disadvantages when looking for employment. Groups that are particularly affected include new Canadians, people living with disabilities, youth with limited work experience, individuals with limited education or formal training, older job seekers and Aboriginals.
We are partnering with five financial institutions and the Ontario Government to deliver Rate Drop Rebate, a pilot project that’s helping to change this. Based on Social Capital Partners’ highly successful Community Employment Loans Program, Rate Drop Rebate aims to help 1,100 people secure good jobs by providing recruitment services and financial incentives to small and mid-sized business owners who hire people facing barriers to employment. Rate Drop Rebate is currently being trialled in Hamilton, London and Ottawa.
Rate Drop Rebate helps Ontario’s small businesses by providing a cash back rebate on the loans or lines of credit they need to grow their operations, as well as recruitment services to help them find the right workers. For every new employee hired through Rate Drop Rebate and retained for a minimum of six months, qualifying business owners receive a cash back rebate on a loan or line of credit arranged through one of our six partner financial institutions. The rebate will be equivalent to a 1% reduction in the interest rate on a term loan (up to a maximum reduction of 4%) or the actual interest paid over six months on the business’ line of credit (up to a maximum of two years interest-free).
Rate Drop Rebate is a partnership between Social Capital Partners, the Government of Ontario and five financial institutions (Alterna Savings, CIBC, FirstOntario Credit Union, Libro Credit Union and Meridian).
The interest rebate is paid for by the Government of Ontario. However, the program is effectively self-financing as the payout only occurs after an employment outcome has been achieved that generates greater savings to public finances in areas such as reduced social assistance payouts.
With our Community Employment Loans Program, which has helped 80 businesses make 480 hires, Social Capital Partners demonstrated this model works and can make a tangible difference. The Rate Drop Rebate pilot has potential to create a much greater impact and show this idea can be applied broadly in different communities. The pilot will demonstrate the robustness of using banks, credit unions and community service organizations to deliver the project.
From our previous experiences with Community Employment Loans, we found that effectively addressing the needs of employers during the employee recruitment and retention processes was the single most powerful tool we had to generate job opportunities for those who most need them. Rate Drop Rebate has, therefore, been designed with the needs of both employer and job seeker in mind, providing high levels of support to both and viewing each as equally important clients and partners. The pilot project will provide further evidence of the effectiveness of this approach.
We aim to roll out Rate Drop Rebate across the entire province of Ontario after the pilot, which could reach 100 times the number of people that have been helped by our Community Employment Loans Program. A study we conducted together with Deloitte estimated that a province-wide roll out would result in up to $140 million in net savings to the Ontario government, 45,000 job placements and introduction of 11,000 businesses to this hiring channel.
Rate Drop Rebate also has the potential to create a broader change in the way we think about tackling social issues. By providing a mechanism for businesses and financial institutions to talk together about breaking down barriers to employment, Rate Drop Rebate is bringing powerful new actors into an area previously considered largely the domain of government.
We see clear potential in this collaboration for further insights and innovation that will help drive social change and create a fairer employment market for all.
RBC + SCP
Community Employment Loans
SCP’s innovative social finance strategy gives business owners an incentive to hire individuals who are at a disadvantage in finding employment. Our partnership with RBC is helping take the solution to scale. Along the way, we are benefiting both a major financial institution and its customers.
Creating a Different Model
Our Community Employment Loan program facilitates access to subordinated debt financing for entrepreneurs, franchisees and small business owners who commit to hiring workers via community agencies and other employment service providers. The terms of these Community Employment Loans are linked directly to outcomes: for every employee an entrepreneur hires from one of our community partners, the interest rate on the loan decreases.
Proving the Win-Win
Our financing targets community-minded business owners who have a high number of entry-level positions with the potential for career advancement. It’s a win-win scenario. More job seekers from disadvantaged groups are offered opportunities for decent employment, while entrepreneurs gain access to attractive financing terms and strong, motivated employees.
Partnering for Scale
After years of experimentation and refinement, SCP brought the program to RBC Generator, the impact investing arm of RBC’s Social Finance initiative. RBC Generator has purchased $250,000 of the Community Employment Loan portfolio managed by SCP, and has made an additional commitment of up to $450,000 over a 3-year period. RBC’s involvement is helping provide more employment opportunities across more organizations, geographies and sectors.
Read about our partnership in The Globe and Mail >
“By linking interest rates to employment outcomes, SCP is demonstrating how financial incentives can drive social good in a way that makes sense for business owners. SCP is a leader in the social finance landscape in Canada, and through this initiative RBC hopes to further engage the private sector in using business to drive positive social impact.”
Sandra Odendahl, Head, RBC’s Social Finance initiative
Link to RBC website >
Deloitte + SCP
Demand-Led Employment & Training
By showing how Canada can achieve both economic growth and productivity through “demand-led” employment systems, SCP’s partnership with Deloitte is offering a new vision for policy makers and business leaders. With its size, research capability, expertise, and ability to engage employers and government, Deloitte is helping drive change at the systems level.
Advancing Demand-Led Systems Change
SCP and Deloitte have released a White Paper that calls for transformative change. In it, we advance concrete recommendations for bridging supply and demand to the benefit of both employers and job seekers. By scaling a demand-led employment and training system nationwide, we believe that we can help build a more productive, prosperous and inclusive Canada. Deloitte’s investment of resources and commitment to leadership in this area will affect more organizations than we ever could alone.
Link to our White Paper, “Working together: Implementing a demand-led employment and training system.”
Breaking Down the Components
To better understand challenges and opportunities, Deloitte and SCP assessed the “current state” of affairs, conducting consultations with employment service providers, staffing agencies, job seekers, employers and other key players. We also interviewed leaders in workforce development and innovation, with an eye toward best practices. The result is both a clear understanding of today’s reality, challenges and opportunities, as well as a clear vision for the future.
Demand-Led Demonstration Projects
The perspective and learnings arrived at with Deloitte aided the design of concrete projects on the ground. Our goal is to prove the business case to employers and the return on investment for government. Deloitte and SCP identified seven industry sectors where demand-led demonstration projects can make the greatest difference – considering factors such as employers’ current and future needs, skills required for entry-level jobs, and the quality of jobs themselves. The result is a sharp focus on where demand-led programs can most powerfully drive access to employment. We are now working with employers and government partners in multiple provinces.
“Our belief is that Canada’s current employment training and social assistance systems… must be redesigned and implemented in a manner much more responsive to our future workforce development requirements. Employers currently play virtually no role in designing and delivering our employment and training programs and this must change or we will continue to pay a severe price in terms of employment and productivity.”
Paul Macmillan, Global Public Sector Industry Leader at Deloitte and Bill Young, President of SCP, in their introduction to “Working together: Implementing a demand-led employment and training system”
We would like to acknowledge the pro bono support that both Monitor and now Monitor Deloitte have provided along our journey.
MaRS + SCP
MaRS Solutions Lab helps solve complex societal challenges that require systems change. One of their areas of focus is the “Future of Work and Learning.” SCP and MaRS have partnered to design and test solutions at a macro system level.
Taking a Lab Approach to System Change
Unemployment and lack of skills force many Canadians into the ranks of “marginalized communities” – they are at risk, or outside the economic mainstream. Our partnership with MaRS aims to address access to employment issues faced by over one million marginalized Canadians. Taking a “Lab” approach means starting by looking at the problem from the users’ perspective – in this case, jobseekers and employers. The process involves convening users and stakeholders to figure out causality, identify the root cause, develop prototypes, run experiments and scale what works.
Mapping the System
SCP and MaRS are together mapping the entire system, and identifying opportunities for change in the current landscape of employment and training. System mapping includes identifying all the actors involved and understanding how these stakeholders interact with each other. Our aim is to identify gaps and opportunities for different types of interaction that may produce better outcomes.
Developing a National Change Strategy
Together with MaRS, we are exploring and designing a national change strategy to address these problems. One element of this strategy is to establish a national group of experts and champions, representing employers, government, employment service providers, consultants, training providers, colleges, and others. This group, which will be engaged in developing solutions, will serve as a catalyst to change the behaviour of stakeholders throughout the system.
Virgin Mobile Canada + SCP
Virgin Mobile RE*Generation Supporting At-Risk & Homeless Youth
Virgin Mobile RE*Generation was created to empower a generation to help its own and support at-risk and homeless youth.
With SCP’s help, Virgin Mobile RE*Generation is investing in programs that help youth find stable employment, through innovative, demand-driven programs.
Over 225,000 Canadian youth are without a job and not in school. They’re having difficulty accessing affordable housing and paying for life’s necessities. Meanwhile, finding and maintaining a job is tough – particularly for young people who may not possess required skills and who may not be aware of employer expectations.
Virgin Mobile RE*Generation
More than $2.5 million has been raised through programs such as Change For A Dollar, Text to Donate, the RE*Generation phone from Samsung and ongoing benefit concerts. These efforts are raising awareness and encouraging Canadians to be a part of a solution to youth homelessness.
Since 2008, by partnering with leading youth-serving agencies across the country, funds have been invested in providing at-risk and homeless youth with emergency and crisis support like shelter and counseling as well as mentoring and life skills training so they can emerge from the cycle of homelessness. Now, Virgin Mobile RE*Generation is turning its attention to employment.
Learn more online at Virgin Mobile >
Identifying the Right Partners
By supporting services and training that include employers in their design and curriculum, Virgin Mobile RE*Generation is seeking to shift the dial on helping at risk and homeless youth find and keep jobs that provide a stable, meaningful income. Virgin Mobile RE*Generation and SCP have collaborated to identify youth-serving agencies with innovative demand-driven approaches. Investments are being made in programs that provide at-risk and homeless youth with the in-demand skills employers are looking for in IT, digital print, food services and construction industries.
Staying on Track
SCP will continue to work with Virgin Mobile RE*Generation on program performance and evaluation – tracking outcomes, measuring impact and sharing lessons learned across partners. Our work together is a great example of a partner with size and scale drawing on our knowledge, expertise, connections, and commitment to find a better way.
Active Green & Ross + SCP
Pioneering the Community Employment Loan model
Active Green & Ross first connected with SCP in 2006 when the tire and auto-repair brand was looking at turning 20 corporately owned stores into franchises. The company became the first organization to partner with us on our innovative Community Employment Loans Program.
The program started by facilitating a community employment loan to an Active Green & Ross franchisee in the Hamilton area. It supplied her with sufficient capital to acquire her store and, in return, she recruited for entry-level positions through our partner community agencies in the area. The success of this deal led to implementation of our financing and community hiring program across the company’s store network.
Expanding within successful franchise systems has been key to the program’s success, enabling us to scale our work and generate the maximum impact from realtively few resources.
How it works
The terms of our community employment loans are linked directly to outcomes: For every hire our borrower makes from the target group, the interest rate on their loan decreases. The rate reduction remains for as long as the individual is employed by the client. We partner with established employment service providers in each client’s area to refer suitable candidates. SCP acts as a broker to connect our borrowers with the best community agencies in their local area – working with the entrepreneur to better understand their needs and with the community agencies to ensure they refer candidates who met those needs. Our clients retain complete control over all hiring and termination decisions. All we ask is that business owners make a concerted effort to fill entry-level positions with candidates referred from our community partners.
“At Active Green & Ross, we view our partnership with SCP as a huge benefit to our system – enabling us to expand our franchise network through competitive financing solutions and providing our franchisees with access to quality personnel, while saving them both time and money around the hiring process…results have been excellent.”
Peter Steele, Former General Manager, Active Green & Ross
Community Employment Loans in action
Ace and Betty are a husband-wife duo and Active Green & Ross franchise owners in Aurora and Newmarket, Ont. Having immigrated to Canada themselves, Ace and Betty were drawn to the Community Employment Loan Program based on their desire to provide opportunities to others who may have faced similar challenges starting over in a new country. To date they have hired more than 30 individuals from the York Region YMCA and Georgian College, including many youth and new Canadians. They are not only giving back to their community, but doing so in a way that makes sense for their business – in this case, by giving people a chance who turned out to be loyal, dedicated staff members.
Following Active Green & Ross, we expanded the program to include franchises of Baton Rouge, Boston Pizza, Meineke, Mr. Lube, Shoeless Joe’s and We Care. The program has helped place 480 people in jobs with 80 franchises in Canada.