Federal Government Announces New Social Finance Fund in Fiscal Update
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Finance Minister Bill Morneau presented the fiscal update on November 21. | Image: Adrian Wyld/Canadian Press.
In the Government of Canada’s recent report, Fall Economic Statement 2018, it announced that it would “support innovative solutions to some of Canada's big challenges by creating a Social Finance Fund that gives charitable, non-profit and social purpose organizations access to new financing, and connects them with non-government investors.”
The pertinent section of the report, which starts on pp. 38, reads in part:
In June 2017, the Government created a Social Innovation and Social Finance Strategy Co-Creation Steering Group, primarily comprised of experts from the charitable and non-profit sector, to provide recommendations on the development of a social innovation and social finance strategy. The Steering Group delivered its final report, Inclusive innovation: New Ideas and New Partnerships for Stronger Communities, in August 2018.
One of the report’s key recommendations was to create a Social Finance Fund to help close the capital financing gap faced by organizations that deliver positive social
outcomes, and to help accelerate the growth of the existing social finance market in Canada. To help charitable, non-profit and other social purpose organizations access new financing, and to help connect them with private investors looking to invest in projects that will drive positive social change, the Government proposes to make available up to $755 million on a cash basis over the next 10 years to establish a Social Finance Fund. Additionally, the Government proposes to invest $50 million over two years in an Investment and Readiness stream, for social purpose organizations to improve their ability to successfully participate in the social finance market. It is expected that a Social Finance Fund like the one the Government is proposing could generate up to $2 billion in economic activity, and help create and maintain as many as 100,000 jobs over the next decade.
Details on the governance and parameters of the Fund will be developed further in the coming months and released in early 2019. In addition to these measures, the Government will continue to work on exploring other recommendations from the Steering Group’s report.
For more information on this fund, and to read the full report, click here.
