While social finance as a general concept is not new, interest and momentum around social finance has grown around the world in recent years. This is no less true in Canada, where the federal government has developed a variety of social finance initiatives, including the recent budget announcement of a social finance accelerator initiative intended to help develop promising social finance proposals.

In the course of the study, the Committee heard testimony from a variety of stakeholders, including governments, businesses, not-for-profits, charities and foundations involved in developing the body of knowledge and record of experience with social finance in Canada. Many viewed social finance as a potentially important tool in addressing complex societal issues in new and innovative ways, and involving partnerships among a broader set of stakeholders with different skills and expertise.

Testimony from witnesses revealed a general consensus for the potential of social finance to tackle persistent challenges, but varied with regards to the ways in which social finance tools should operate. Their testimony centred around regulatory changes that would allow charities and non-profits greater flexibility to engage in revenue-generating activities, the necessity and challenges of measuring social outcomes using adequate metrics, the need to build capacity within the market, and the government’s role – both financial and otherwise – in developing the social finance market.

These are fundamental components of establishing a new and emerging market for social finance in Canada. The Committee believes that many of these issues are worthy of further study and careful consideration in order to establish a solid foundation on which to base social finance initiatives in the future.

The recommendations in this report stem from a range of actors operating within the social finance market, including stakeholders from the demand and the supply sides, as well as the intermediaries. Our recommendations seek to build on the potential associated with social finance mechanisms and address some of the challenges that the witnesses highlighted to the Committee throughout this study. The recommendations provide measures the federal government can undertake in order to establish a stronger foundation for this emerging market.