Open Letter from MPP Peggy Sattler regarding the cancellation of the Ontario Self-Employed Benefit Program

July 27, 2015

Dear Minister Moridi,

I am writing to urge you to reconsider your ministry’s sudden and arbitrary cancellation of the Ontario Self-Employment Benefit program (OSEB), which is slated to take effect March 31, 2016. Since the cancellation of the program was announced in May, 2015, I have spoken to many people in my community and across the province who understand the value of OSEB in creating jobs and growing the local economy.

As you know Minister, small business is the lifeblood of Ontario’s economy, and OSEB has proven its effectiveness in enabling small businesses to start up and thrive. Many successful small business owners – like Forked River Brewing in London, Above and Beyond Cupcakes in Welland, Spring2 Innovation Consulting in Ottawa, and Greenfingers Flowers in Hamilton – have reported that they would not have been able to start their businesses without access to OSEB. The program has been particularly effective for those facing barriers to employment. 

The OSEB program has also provided a critical stimulus to local economic development. In my community of London, 2014-2015 was the most successful year for OSEB in the past decade, launching 95 new businesses and creating hundreds of jobs. According to the London Small Business Centre, OSEB start-ups generated $14 million in local sales over the last five years – a figure that only takes into account the 42 weeks that clients are tracked. As these businesses grow and expand, the actual economic impact is much greater.

London’s success with the OSEB program is not unique. A March 2014 evaluation of OSEB conducted by researchers at Queen’s University found:

In summary, participants clearly appreciated the opportunity to participate in the OSEB program. They seemed to benefit not only from the acquisition of knowledge and skills from OSEB, but also from establishing connections with OSEB staff and other participants, as well as learning about what it takes for them to personally succeed as an entrepreneur. It seems that participants’ ability to persevere through the struggles of launching a business, combined with the education offered through the OSEB program, work together to create a recipe for success. 

The loss of the OSEB program will create a significant gap in the continuum of programs and services for job seekers, particularly for early stage entrepreneurs. This was pointed out in an April, 2014 evaluation of the Community Futures Program prepared for FedDev Ontario, which stated:

… individuals with no experience or training in business can use services such as the Self-Employment Benefit Program (if eligible) and SBECs. Then, once individuals have a business idea or plan, they can approach a CFDC to refine their plan and apply for financing. If the business is successful and grows, the BDC or the provincial government's Business Advisory Services can assist them with more strategic advice.

In addition to my concerns about the loss of the program, I am also deeply troubled by the process that led to the cancellation. The Employment Sector Council London-Middlesex, a network of 40 employment and related service providers in the London area, wrote to you on May 26, 2015 expressing their frustration with your ministry’s complete lack of consultation on the OSEB decision and total disregard for community input.

When I questioned you about the cancellation of OSEB in the Ontario Legislature on May 28, 2015, you responded that the program was “too costly” and that the funds will be diverted “to another program”.

If your ministry is determined to proceed with the 2016 phase-out of the OSEB program, Ontarians deserve an explanation of what will take its place to support entrepreneurs, specifically:

1.       How much of the $49.2 million OSEB budget will be re-allocated to the Ministry of Economic Development, Employment and Infrastructure (MEDEI) for entrepreneurship support?

2.       What specific new or existing programs (in MEDEI or other ministries) will receive funding diverted from OSEB? For each of these programs, please indicate the amount of redirected OSEB funding that will be allocated, the target clients, and the criteria for accessing the program.

3.       Most importantly, once OSEB has been cancelled, how will your government support unemployed Ontarians in receipt of Employment Insurance to pursue self-employment without jeopardizing their EI benefits?

Your timely response to these questions would be appreciated. I look forward to hearing from you. 

Sincerely,

[Original Signed]

Peggy Sattler, MPP

London West