ImpactAlpha, November 25 – The Canadian government is creating a C$755 million ($570 million) Social Finance Fund to invest in nascent market solutions to social and environmental challenges. The government is allocating an additional C$50 million to help the organizations behind those solutions become “investment ready.”
The fund was announced in the Canadian government’s Fall Economic Statement (2018), which focuses on building middle-class jobs. “The complex social, economic and environmental challenges facing our country—homelessness, climate change, youth employment, and the opioid crisis—demand creativity and transformative solutions,” the statement says.
The Social Finance Fund’s mission is to encourage more private investment in Canada’s social sector by seeding “a self-sustaining social finance market over time that would not require ongoing government support.”
The 10-year fund is looking to attract matching capital from private investors to invest early in initiatives and organizations that are not yet commercially viable. It will also support new and existing funds with social missions, such as the Quebec-based First Nations Market Housing Expansion Fund, which offers mortgage lending to Canada’s indigenous communities, or the Alberta Social Enterprise Fund, which lends to local social enterprises.
“This is not just a major milestone for social finance in Canada,” said SVX’s Adam Spence in post on Medium. “It is a watershed moment for our country as a whole.”
The Social Finance Fund was among the recommendations made by a government-created steering group in an August report on fostering “inclusive innovation” in Canada. Specific investment parameters for the fund will be announced in 2019.
The Canadian government hopes the fund will spur C$2 billion in economic activity and lead to 100,000 new jobs.