On 5 February 2015, the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities (the Committee) adopted a motion to “study Social Finance’s potential for unlocking new sources of capital to improve social and economic outcomes for Canadians.…”[1] The Committee held a total of 14 meetings on this topic between 17 February and 26 May 2015, heard from 51 witnesses including three federal government departments, and now submits its final report entitled Exploring the Potential of Social Finance in Canada.

The Committee observed that governments around the world are making increasing use of social finance instruments, and momentum is building in Canada and internationally toward greater stakeholder engagement and capital investment in this market. As highlighted in the 2015 federal budget, social finance can contribute to the development of genuinely new and innovative approaches to addressing complex social issues. Recognizing the growing interest and engagement in this area, the Committee undertook this study in hopes of contributing to our understanding of the potential benefits and limits of social finance in Canada.

Social finance is a broad field that incorporates a variety of tools and business models. This report begins with a general discussion of social finance and the range of initiatives within this market that were raised by witnesses, in order to help clarify some of the basic concepts and issues surrounding the current status and possible future development of social finance in Canada.

The Committee heard a wide variety of evidence with respect to practical measures needed to support the development of legal and policy frameworks for social finance. In particular, witnesses raised issues and made recommendations regarding the current regulatory environment, the development of tools to measure the effectiveness of social finance initiatives, capacity building and training of stakeholders in this new market, and other financial and non-financial measures the federal government could implement to support the social finance market in Canada. The final sections of this report summarize these discussions and make recommendations for further action on these issues.