The impacts of COVID-19 have highlighted gaps in our social systems and have spurred innovative ideas about ways to build a better economy and country. Prior to the pandemic, the federal government had taken some preliminary steps through the creation of a number of social innovation and social financing initiatives, including the creation of a Social Finance Fund and launch of the Investment Readiness Program through Budget 2019 (see “Another Run at the Social Finance Fund” (March 19, 2019) available at https://drache.ca/articles/charities-current-articles/another-run-at-the-social-finance-fund/). The Social Finance Fund announced in 2019 provided for $755 million in funding over 10 years and $50 million to assist charities, not-for-profits, and social purpose organizations to participate in social finance. However, the Social Finance Fund has yet to be rolled out and, after a successful two-year pilot, the Investment Readiness Program was set to expire this.
Budget 2021 identifies charities, not-for-profits and social purpose organizations as key partners in delivering essential social services because of their invaluable on-the-ground knowledge of their communities’ needs and capacity to provide much-needed community and social support. To strengthen the financial tools of the sector and support the growth of social finance in Canada, Budget 2021 commits to disbursing $220 from the Social Finance Fund over the next two years and to renewing the Investment Readiness Program for a further $50 million over the same period. Finance Canada estimates that Fund could attract up to $1.5 billion in private sector capital to support the development of the social finance market, create thousands of new jobs, and drive positive social change.
If the federal government is finally able to actually implement the Social Finance Fund, it has the potential to accelerate the development of social and conservation finance opportunities across the country, resulting in improved access to capital for local organizations working to address social or environmental challenges.