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To: Chair and Members Community and Planning Services Committee

From: Cheryl Faber Director, Social Assistance – Ontario Works

Date: July 15, 2019

Subject: Employment Services Transformation

Report: CPS-14-2019-1 ______

Recommendation

THAT staff be authorized to pursue the next phase of the Province’s Employment Services Transformation initiative through the submission of a Request for Qualification and Call for Proposal for the Service System Manager role for the Muskoka – catchment area;

AND THAT staff be authorized to explore effective and appropriate options for the submission, including a single entity applicant and/or consortium partnership options for the Service System Manager role for the catchment area;

AND THAT the terms of the submission be to the satisfaction of the Commissioner of Community and Planning Services and the Chief Administrative Officer.

Origin

In 2019, the provincial government identified that they will be transforming employment services to make sure all individuals, including those in receipt of social assistance or those with a disability, can connect with opportunities to find and keep good jobs and that employers can hire the skilled workers they need to grow their businesses.

On February 12, 2019, the government announced its approach to transform employment services. The transformation will integrate employment programs for Ontario Works (OW) and the Ontario Disability Support Program (ODSP) into a transformed Employment Ontario (EO) to create one system. This will modernize the way Ontario delivers employment services, including for those on social assistance (OW and ODSP). The government’s desired state is to create one efficient, cost- effective system that is easy to use and focused on helping all job seekers, businesses and communities.

The province stated that the longer term goals are to increase employment and build a more highly skilled labour force, with the primary goals of the Employment Services Transformation to: • Achieve better outcomes for all job seekers and employers;

Page 1 • Reduce fragmentation and duplication between provincial employment support systems to improve client service; and to • Increase accountability.

The future vision is to build a locally responsive employment services system that more effectively meets the needs of a range of job seekers and employers in Ontario. The Ministry of Training, Colleges and Universities (MTCU) will steward a phased system transition that will reset current roles and responsibilities to enable a system built on accountability and outcomes. MTCU will continue to manage the system, including setting priorities and establishing performance outcomes. The first phase of the transformation will include a prototype implementation of the new model of integrated employment services in three catchment areas across the province. A prototype is a preliminary service system model that will be tested and learned from prior to full implementation of the new employment and training system across the rest of Ontario (Appendix A – Suggested Prototype Economic Regions).

A key part of the new system will be the establishment of Service System Managers (SSMs). This is a new role which is different from the local Consolidated Municipal Service Manager (CMSM) and/or District Social Services Administration (DSSAB) role that municipalities play today as the delivery agent for Social Assistance - Ontario Works. The selected SSMs will oversee the planning, design and delivery of employment services in a way that is integrated, people-focused and outcomes driven for the larger catchment area.

MTCU through a transfer payment agreement will hold SSMs accountable for achieving specific outcomes for the entire area through effective financial and performance management systems, robust information technology infrastructure and an integrated oversight and governance model for the area. The transformation brings together three employment support systems currently supported by two separate ministries, MTCU and the Ministry of Children, Community and Social Services (MCCSS). The new Managers will oversee the EO programs and services delivered directly and through third party contracts to all individuals, the OW Employment Assistance and Support Services serving unemployed or underemployed individuals in financial need and the ODSP Employment Supports for eligible people with disabilities. The province intends services to be delivered to all, including unique populations – Indigenous People, Francophones, youth with higher support needs, newcomers and individuals with unique employment challenges. Out of scope programs and services for the transformation include Literacy and Basic Skills, Employment Assistance delivered by First Nation communities, OW Social Assistance for Financial and Life Stabilization supports, ODSP Social Assistance for Financial Supports, and MTCU provincial training programs (e.g. Bridge Training, Skills Advance Ontario, Apprenticeship training, and grant based programs).

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The envisioned transformation will bring change to the role that CMSMs and DSSABs currently play in employment provincially. Along the continuum of service delivery, the new world will see the separation between Life Stabilization and the two areas of Employment Preparation and Employment Ready. MCCSS will continue to steward and provide oversight to the OW and ODSP financial assistance supports and life stabilization element, and the new Employment Services System under MTCU will be integrated to support all Ontarians with employment preparation and employment placement across a catchment area. This may have a significant impact to the role of all Delivery Partners today, including ODSP, OW and/or EO whether they are a municipality, a not- for-profit agency or a for profit provider. Being at the new table is imperative during this transformation in order to ensure that the needs of our local residents, our partners and our employers are appropriately served. Retaining local intelligence and willingness that makes a difference for our residents will be important. Protecting local stakeholder relationships, service delivery efficiencies with partners and established cross-system linkages (e.g. with health, education, housing, food security, poverty reduction, children’s services, senior’s services, etc.) are foundational considerations to be brought into this process. Expressing interest ensures the District’s voice continues to shape and influence the future.

Successful candidates who become the SSMs will plan and deliver services to meet the needs of their local catchment area economies. These Managers will undertake activities, such as engaging employers, to match services and programs to local job seekers and employer needs and help them achieve employment outcomes. Community partnerships and partner engagement will be critical to success and transformation, including local employment planning councils and local planning boards, colleges, municipalities and other social and health service entities to better meet the needs of job seekers and employers.

These Managers will be selected through a new, two-stage competitive process that is open to any public, not-for-profit, municipality and/or private sector organization that can demonstrate the required capacities, resources and infrastructures to support the needs of job seekers and employers across the large geographic catchment area.

Commencing fall 2019, the new system will be transitioned within three regions in Ontario. It is projected by the province that the prototype regions will be operational and ready to take clients by April 2020. With large-scale transformation, the province has indicated that there will be disruption within the system with hopefully limited service impacts to the people accessing and needing the programs and services. At this time and over the short-term there is no impact to staff; however, changes to the delivery system may result in changes to staff roles as a result of the improvements that will be implemented over time. The province has framed that this change will be difficult, yet necessary to support improvement and drive innovation, and ultimately, to provide better services to the people requiring the services. Local job retention across the area municipalities within the catchment areas and the impact to the economic drivers for sustaining vital communities will need to be a main priority addressed as the SSM qualification and selection process moves forward. MTCU has indicated that they will continue to engage the current CMSMs in the prototype areas on how the changes may impact their role and evolve over time.

Across the province, lessons learned through the prototype transition and implementation will be applied and rolled-out. As the new system is implemented in the prototype regions, the government will continue to work with service delivery partners across the province to plan and deliver stronger, locally-focused employment and social assistance services that help more people find and keep jobs. MTCU will continue to engage the current CMSMs in the prototype areas on how the changes may impact their role moving forward. Full implementation of the new system will be phased-in over the next several years.

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Analysis

On July 2, 2019, the province announced that the new employment services model will launch in three diverse urban and rural catchment areas for the prototype phase of transformation (Appendix A – Suggested Prototype Economic Regions):

• Hamilton – Niagara Peninsula: Niagara Region, City of Hamilton, , and Norfolk County; • Region of Peel: City of Mississauga, City of Brampton, and Town of Caledon; and • Muskoka – Kawarthas: Northumberland County, City of Kawartha-Lakes, County of Peterborough – including the City of Peterborough, County of Haliburton and the District of Muskoka.

The same day, the release of the Service System Manager Request for Qualification (RFQ) process was released for the three catchment areas, as the first step in the process. The purpose of the RFQ is to qualify proponents for invitation to participate in the subsequent Call for Proposals (CFP) to become a SSM for the prototype phase of the transformation.

The Request for Qualifications is an opportunity for organizations to submit specific information related to their qualifications to be a SSM for one of the three prototype regions. The RFQ includes details about the scope of delivery functions, roles and responsibilities of service system managers, application and evaluation processes and project timelines. The deadline for RFQ submission is July 23, 2019, with other deadlines prior to this for submitting questions and receiving ministry response. The RFQ evaluation period is between July 23 and August 16, 2019, with successful candidates moving on to the CFPs stage in August. The CFP stage is projected to commence in August and close in October 2019. The ministry reserves the right to change and/or alter the process at any time throughout this process.

RFQ Applicants will be evaluated according to four categories (Planning, Design, Delivery and Governance) with set criteria by the province. A minimum score must be achieved in order to qualify for the CFP phase of the SSM selection process. Organizations can apply as single entity RFQ Applicant and/or as part of a consortium model. A consortium is a partnership whereby two or more RFQ Applicants pool resources and work together to deliver services to the entire catchment area.

In order to comprehend the scope in which this transformation covers, it will be imperative to understand the demographics of the Muskoka – Kawarthas catchment area. Currently, the total population is 377,918 (2016, Statistics Canada).

Municipal Area Population (2016 Stats Canada) Haliburton 18,062 Kawartha – Lakes 75,423 Muskoka 60,599 Northumberland 85,598 Peterborough (County and City) 138,236 Total 377,918

As provided by the Ministry based on the 2016 census statistics, within this region, the total working population (ages 15 – 64 years) is 229,570 people. Currently the labour force is comprised of 171,455 individuals working or willing to work equating to a 74.7% employment participation rate across this catchment area. Of this, the total employed population is 157,935 individuals which equates to an employment rate of 68.8% and leaving 7.9% of the population, 13,535 individuals

Page 4 unemployed. Of the total working population in Muskoka – Kawarthas, 3.9% (8,955) identify as Indigenous; 1.2% (2,645) as Francophone and 12.4% (7,190) youth ages 15 – 29 years.

As of December 2018, based on the Statistics Canada, the job vacancy rate for this catchment area was 2.9%, equating to 3,900 vacant jobs. The average hourly wage offered across the area was $19.70 / hour. Looking back to March 2016, the unemployment rate (ages 15+) for this area has significantly increased from 5.6% in March 2016 to 8.1% in March 2019.

As this process continues, there is more work to be done to understand the breadth and scope of programs and services encapsulated in this transformation, the structures supporting program delivery, as well as the delivery agents and their contracted arrangements for service delivery. For example, there are four CMSMs delivering Ontario Works – Social Assistance across Muskoka – Kawarthas and 11 contracted delivery agents offering Employment Ontario programs and services. This does not include the third party vendor contracts, ODSP services and programs, etc. Today, in Muskoka, the District is the delivery agent for OW, MCCSS is the delivery agent for ODSP and there are three separate providers delivering EO programs and supports.

Financial Considerations

It should be noted that the Employment Services Transformation, will consolidate the funding for these services into a new integrated funding model that will be mandated as a role of the new SSM. The funding model will be comprised of three core components during the prototype phase: i) Fixed cost funding; ii) Incentives and supports for employers and clients; and iii) Performance based funding. The ministry has forecast at this time that the planned annual budget allocation for the Muskoka – Kawarthas catchment area is approximately $20.8 million. There will be more information shared and developed as the SSM RFQ and CFP process evolves.

Staff believe that there may be the need to procure services to assist with the qualification or proposal submission process and that these services may be retained jointly as part of a consortium. There is currently a budget allocation for purchased services to assist with innovation related projects that may be utilized for this transformation project. Staff have not yet determined whether this assistance will be required, but wanted to inform Council of this possibility and that this assistance could be managed within the current budget allocation of $50,000.

Communications

Since the launch, staff have met separately with Muskoka-wide employment service providers, as well as the other four CMSMs within the catchment area of Muskoka – Kawarthas. We are working together to determine possible next steps and submission in response to the RFQ. Should the District be chosen to participate in and/or as a part of a CFP submission based on a positive outcome from the RFQ process, staff will return to Committee and District Council with a report that provides the full scope of Service System Manager application, including financial or governance implications of participating in this process and will seek approval prior to proceeding.

There are no significant risks that would prevent the District from pursing application to the Employment Services Transformation Request for Qualification.

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Strategic Priorities

Click on icons below to view strategies under each priority area:

s. 5.1, 5.3, s. 2.6, 2.8 5.4, 5.5, 5.6, 5.9

Respectfully submitted,

Original signed by Original signed by

Cheryl Faber Samantha Hastings Director, Social Assistance – Ontario Works Commissioner, Community and Planning Services

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