Social Innovation and Social Finance Strategy Co-Creation Steering Group, Employment and Social Development Canada

Date of Publication


Executive Summary

Canada’s future looks bright. Our communities are great places to live, work and play. Our economy is strong and has performed well in recent years. Our people are diverse, skilled and resilient.

Yet in the midst of our prosperity, our communities face persistent social and environmental challenges — housing insecurity, the opioid crisis, climate change, to name a few — that threaten our individual and collective well-being. These issues and others like them not only hamper economic growth, they heighten inequality, increase the need for expensive public services, and result in a profound human cost, both in terms of individual lives and social cohesion.

While great strides have been made in some areas, many complex social problems persist despite the best efforts of communities and governments across Canada. This is because we have stuck to a narrow view of society, with the private sector generating the wealth needed to improve quality of life, and the charitable and non-profit sector providing relief to people in vulnerable situations, in addition to contributing to community life in areas such as the arts and sports. Governments have upheld this view in their approach to economic growth by focusing on stimulating innovation in the private sector. But the private sector cannot solve all of society’s problems. Society will be best served when all sectors work together and when governments recognize the contribution that charities, non-profits and co-operatives make to economic growth, growth that is inclusive and improves outcomes in communities.

Fortunately, a collective awareness is emerging within society around the need to do better. Private companies are realizing that they too can help address social, economic, and environmental challenges while making or increasing profits. Charities and non-profits are investing in research and development and creating sustainable businesses to grow the impact of their missions. Individual citizens are using their purchasing dollars to find products and investment opportunities that create greater social value. Actors in all parts of society are breaking out of their historically defined roles, merging profit and purpose, to forge new ground – all to the benefit of people. We are at a tipping point, hovering at the edge of a paradigm shift that could dramatically improve the way we approach the world’s toughest challenges.

It’s time for the Government of Canada to invest in social innovation and social finance

Governments all around the world, from the United Kingdom to South Korea, are harnessing this energy to move the needle on complex social, economic and environmental problems that matter to their citizens. They are investing in social innovation — ideas that, once adopted, help communities respond to a challenge or realize their aspirations more effectively than before. They are accelerating the growth of social finance — the practice of making investments to create social or environmental impact as well as financial returns — to unlock the private and philanthropic capital needed to tackle pressing challenges.

The federal government can enable a similar shift in Canada using the levers at its disposal. Each year, it delivers over $40 billion in grants and contributions and purchases almost $20 billion in goods and services. It also establishes the legal and regulatory environment in which charities, nonprofit organizations and many businesses operate. It is time for Canada to deploy these levers to grow social innovation and social finance across its communities, or risk falling behind…