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Q & A with Mike Toye: Building a new local economics, Canadian-style

Mike_tie_2The Canadian Community Economic Development Network (CCednet) unites organisations committed to place-based social and economic change across Canada. Together they are articulating a new local economics, as executive director Mike Toye explains.

Where did the term community economic development (Ced) come from and what is its purpose? It’s a term that was first used in the 1960s in the United States and comes out of the war on poverty. It is perceived to be a proactive approach, using local resources and action to create meaningful jobs, strengthen local economies and improve social conditions. The idea was scaled up through the community development corporations in the United States, which spread to Canada. New Dawn Enterprises in Nova Scotia is the first community development corporation in Canada and one of the founding members of the Canadian Community Economic Development Network (CCednet). Set up in response to challenging economic situation in the 70s, New Dawn runs a number of local services, from a training college to healthcare as well as community investment funds. What’s emerged in Canada since then is a patchwork of place-based approaches. Most of our members follow a transformational holistic community development approach that recognises the need for an economic approach as part of a broader agenda of community development. Our members include credit unions, community futures organisations, co-operative development agencies. What unites us is our focus on inclusive communities and a desire to transform the system so that there are not as many symptoms to treat. We believe that if the economy and government did their jobs we wouldn’t need to exist.

What is the alternative that community economic development offers? Community economic development tends to be crisis driven. So New Dawn Enterprises grew because the coalmines were shut down. It’s always an attempt to do something to make a difference, whether it’s industrial dislocation in south-west Montreal or decline in Toronto or central Winnipeg. Community economic development mobilises local community and builds engagement. It liberates the creative energies of people and helps them to work together for the common good. It is focused on alternatives and solutions and it is often more effective than government because it is locally-led and builds on community assets. It puts the emphasis on people not profits.
We are seeing now that the kinds of alternatives that government is willing to accept are conditioned by neoliberal ideas. So government is interested in solutions that come from business, and from alternative sources of finance, impact investing or social enterprise. They are solutions that harness private capital. These are valuable components of the new economy movement: anything that continues to re-embed economic in culture and environment is good. But when it comes to reaching people in poverty, there are limits as to what can be done with a social enterprise or social finance. You need community outreach, local mobilization and government investment in human capital through local agencies. That’s what community economic development adds. There will always be transition, companies in decline and shutting down and people and neighborhoods whose history of exclusion means they need specific help.

When it comes to reaching people in poverty,

there are limits as to what can be done

with a social enterprise or social finance

It’s a more human approach? Yes. Evidence is accumulating that freeing up ‘the market’ over the last 30 years has primarily increased inequality and not improved living standards for most people. At the same time as governments’ role is diminishing, the largest corporate structures are getting bigger and stronger, so the distances between people and the decisions that affect them grow. The new economy movement puts people and the environment first, articulating the efforts to rehumanise the economy, to keep human values in decision-making.
Community initiatives on their own can’t compensate for great downturn of 2008. John F Kennedy said that GDP was a rising tide that lifts all boats but people fall through the cracks. In an enabling environment, community economic development can smooth out inequalities in a region and provide specific attention to needs.

Can you name some of the impacts and achievements of CCednet? As long as CCednet has been around one of its fundamental questions is around evaluation. We know that strategies and outputs make a difference but we can’t definitively say that if a particular project or process hadn’t happened things would be much worse. So we have a wealth of information about the social return on investment from community-led economic development of individual programmes. We collect all evaluations and social return on investment analyses we can find of community economic development and related strategies. The biggest challenge is that the practices are so varied that it’s very hard to do an evaluation that’s transferable, but there have been some major evaluations. In 2011 there was a study of the economic impact of a network of businesses offering employment training in Quebec. The study found that government recouped its investment in less than two years in terms of employment outcomes. So it saved $60m in over 20 years. We have members like the Learning Enrichment Foundation, which began as a youth theatre and now runs a wide range of training, employment and enterprise programmes. And Quint which provides affordable housing for marginalized groups in Saskatoon.
We need more evidence to quantify the benefits of public services being tailored locally or more locally adapted. Ultimately the real challenge for Ced is the alternative measurements of outcomes, accounting for natural systems and alternative measures of wellbeing such as gross national happiness. My belief is that if were to account for the real outcomes in terms of community and wellbeing you’d find in community-based approaches there’s a valuable role in terms of contribution to better overall outcomes.

Should government be funding community economic development initiatives? Sustained government funding for community programmes is a harder sell these days, although one exception is Manitoba. There was a programme at the beginning of the 2000s of neighbourhood renewal corps serving urban communities, which has been expanded. Beyond that, we don’t have endowments, so local groups are trying to patch together charitable and project funding. One of the strategies we use is to show how community economic development programmes that break the cycle of poverty and focus on prevention can help reduce longer-term public spend. There are also some interesting financing tools. In Nova Scotia, for example, there is a community economic development investment fund which, for more than 14 years, has generated tax credit for local investors to pool their capital for investment. The fund now manages more than $50m in 48 funds, all raised by individuals and used to fund local small businesses.

Is new economics reaching into the mainstream in Canada? Social enterprises and social finance are reaching new audiences in part because they are getting government attention. Ten years ago federal government was very interested in the social economy and it launched a social economy initiative. Co-operative development is growing in its recognition. Canada was host to a summit of co-operatives in the international year of coops and this will happen again this year. Canada has a strong co-op sector and our per capita credit union membership is the highest in the world. There are more than 1,100 communities to whom the only financial service provider is a credit union. More community-rooted elements are growing and evolving but place-based elements have more difficulty as they tend to require funding support. The Collective Impact Forum is a new (ish) approach to place-based organising that’s growing in prominence here and in the US. In Canada the word ‘social’ can be a barrier with some audiences as it can be associated with ‘socialist.’ But at the same time the strategies that currently have traction are social finance and social enterprise. We need to leverage that traction while there is interest. Part of the attraction of the new economy movement is that it’s a new way of approaching similar objectives and can hopefully create a different image.

Can small economics survive as services scale up? We definitely believe small can be beautiful and Ernst Schumacher is an inspiration. There’s been a movement towards standardising and scaling some public services, particularly in employment development and job seeking programmes, and this has impacted on our members. This puts smaller non-profits out of business and the efficiencies created are on paper only. They are more related to tick boxes and numbers than impacts on the ground. When you’re dealing with marginalized populations you can’t avoid personal support and human contact. You need to help people find solutions that are appropriate to them. The idea of diseconomies of scale is aligned with this new approach. The crisis following the downturn has certainly led to lots of problems but the response has also led to much more innovative and forward thinking solutions. The New Economy movement in the US in particular is creating many interesting opportunities.

What’s the future for community economic development? For community economic development to be most successful and to demonstrate results and make a difference it needs to be part of a bigger strategy. It needs to show its complete impact, including social and environmental impact, and be part of a more fundamental systems change. That’s why we joined the New Economy Coalition last year. We need to be part of a broader and more coherent programme for change. In isolation we are pushing against the tide but together there’s a bit more hope.
I think we’re seeing progress. The stakes have gone up, however. We’re seeing the impacts of climate change now in Canada and around the world. The polar vortex, drought and forest fires and floods are going to impose increasing costs very quickly. Environmental impacts are becoming much more important.
So we continue to go forward. CCEDNet members are a pragmatic group of inspired utopians and we are doing the best we can to make a difference.

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