Notice of Proposed Procurement
This requirement is for Employment and Social Development Canada (ESDC).
Title:Survey of Participants in the Self-Employment Program Delivered under the Labour Market Development Agreements (LMDAs) across Canada.
Objective:
Employment and Social Development Canada (ESDC) seeks to contract an experienced vendor to design, conduct, and analyze the results of a survey of individuals who started participation in the Self-Employment program in fiscal years 2015-2016 and 2016-2017. Information collected by this survey will help fill important knowledge gaps about the outcomes and success of the program, as well as supplement information about its design and delivery.
Background Statement:
Labour Market Development Agreements
Established under Part II of the 1996 Employment Insurance (EI) Act, the LMDAs are bilateral agreements between Canada and each province and territory. In 2018-2019, Canada will transfer $2.37 billion to provinces and territories (including $192 million in administration funds) to design and deliver programs and services aimed at assisting individuals to prepare for, obtain and maintain employment. As of 2010, program delivery has been fully devolved to all provinces and territories. Programs and services that receive funding are classified under two categories:
Employment Benefits: Programs and services are provided to individuals to gain skills and work experience. These programs and services fall into five sub-categories: Skills Development; Targeted Wage Subsidies; Self-Employment; Job Creation Partnerships; and Targeted Earning Supplements.
Support Measures: Available to all unemployed individuals, including those not eligible to receive EI, and include: Employment Assistance Services; Labour Market Partnerships; and Research and Innovation. Self-Employment Program
The objective of the Self-Employment program is to help unemployed EI-eligible individuals start a business or become self-employed. This is broadly accomplished via the provision of financial assistance and/or business planning advice. Financial assistance given directly to participants is intended to cover personal living expenses and other expenses, including entrepreneurial training costs, during the initial stages of their business. Third parties may be engaged to provide technical and consultative expertise to participants to help them assess their business opportunities and prepare business plans.
At the national level, 6,137 new Self-Employment interventions were delivered across all provinces and territories in fiscal year 2016-2017[1]. Combined spending on the program was just under $60 million, which represented 3% of total spending on LMDA benefits and measures during the fiscal year. According to the EI Monitoring and Assessment Report, the average length of a Self-Employment intervention was 230 days and the estimated cost per intervention was $9,736.
For more detail, Table 1 in Annex A presents the number of new Self-Employment interventions, expenditures and shares of total LMDA funds used toward the Self-Employment program for fiscal years 2011-2012 to 2016-2017 for every province and territory.
Levels of financial assistance, maximum duration of intervention, types of training, and other aspects of design and delivery vary across provinces and territories. Annex B provide a detailed overview of the Self-Employment program across Canada.
Previous Evaluation Evidence and Information Gaps
The evaluation provisions under the LMDAs require the evaluation of impacts and effectiveness of Employment Benefits and Support Measures (EBSMs) delivered under these agreements. This was accomplished under the first and second LMDA evaluation cycles by conducting incremental impacts and cost-benefit analyses for most EBSMs.
Under the first LMDA evaluation cycle, survey-based incremental impacts showed increased annual hours worked, decreased earnings, and decreased use of EI benefits for most active and former claimants who participated in the Self-Employment program.
Under the 2012-2017 second LMDA evaluation cycle, incremental impacts for EBSMs were estimated using EI and income tax records (T1 and T4). When estimating the Incremental impacts for the Self-Employment program, it became apparent that relying on the use of personal income tax records to estimate the incremental impact of the program on employment and earnings will not provide an accurate depiction of the financial well-being of Self-Employment participants following participation. According to a study from Statistics Canada[2], though self-employed individuals in Canada have a lower average annual income than paid employees, the average net worth of their households is 2.7 times greater than that of the paid employee households. This disparity implies that some self-employed individuals may leave funds within their business (for reinvestment purposes, for example) rather than pay themselves a salary. Therefore, tax data on individual earnings alone – without taking net worth or other indicators of financial well-being into consideration, or linking individuals to data on business/corporate income – does not provide a full picture of how participants are faring after participation.
Furthermore, there is still a lack of understanding around the role played by the program in helping individuals develop and/or implement business plans and cultivate entrepreneurial skills. It is not clear whether and to what extent participants’ labour market outcomes should be associated with their business idea and entrepreneurial skills, or with the assistance provided under the program.
Proposed period of contract:
The contract period is estimated to be from the date of contract award to March 31, 2020.
File Number: 100012137
Contracting Authority: Manon Rondeau
E-mail: n••••••••@••••••••.••.ca
[1] Source: 2016/2017 Employment Insurance Monitoring and Assessment Report.
[2] Sébastien LaRochelle-Côté and Sharanjit Uppal, "The Financial Well-Being of the Self-Employed," Perspectives on Labour and Income, vol. 23, no. 4, Winter 2011.
