Launching $755M Social Finance Fund to advance social finance growth 

Gatineau – Social purpose organizations, such as social enterprises, non-profits, charities and co‑operatives, are at the forefront of tackling Canada’s persistent social and environmental challenges, and they are key contributors to the Canadian economy. However, social purpose organizations face barriers and systemic biases that exist in the current finance ecosystem.

Minister of Families, Children and Social Development, Karina Gould, officially launched the $755 million Social Finance Fund, which is a groundbreaking, long-term initiative to advance the growth of the social finance market in Canada. The Social Finance Fund is a foundational element to the Social Innovation and Social Finance Strategy, along with the Investment Readiness Program and the Social Innovation Advisory Council. Social innovation and social finance plays a fundamental role in tackling persistent challenges like access to affordable housing, food insecurity, and poverty.

By increasing access to flexible financing opportunities in the social finance market, the Social Finance Fund will help social purpose organizations grow, innovate, and enhance their social, economic, and environmental impacts. They will also extend the reach of social finance to underserved populations, sectors, and regions in Canada, including rural and remote communities and the North.

Through a rigorous, competitive and open process, three fund managers were selected to act as investment managers for the Social Finance Fund. They are:

1. Boann Social Impact is a new joint venture with the investment fund manager Encasa, and the not-for-profit trust Table of Impact Investment Practitioners, a longstanding community of practice now encompassing over 80 Canadian social finance intermediaries and partners;
2. Fonds de finance social – CAP Finance is a network of financial institutions and organizations that are working in Quebec and focused on the social economy and solidarity-based finance. Led by the Réseau d’investissement social du Québec and the Fiducie du Chantier de l’économie sociale, nine key investors are involved in the project. Fonds de finance social – CAP Finance will invest specifically in Quebec; and
3. Realize Capital Partners is a collaboration between the impact investment management and advisory firm Rally Assets, and the early-stage venture capital fund manager Relay Ventures.

The fund managers will receive $400 million over the next five years to invest, and are expected to leverage up to another $800 million in private investment to foster the market’s growth and long-term sustainability. This will provide investors with opportunities to engage in socially responsible investment and to direct their capital towards public good initiatives. Funds will be invested in existing or emerging social finance investors, which are financial entities that raise money from investors to make social finance investments, using innovative and complementary strategies to sustainably grow the social finance market and to expand flexible financing opportunities for social purpose organizations.

Fund managers will allocate a minimum of 35% of their investments into initiatives promoting greater social equity, including a minimum of 15% into initiatives promoting greater gender equality. Fonds de finance social – CAP Finance will invest specifically in Quebec, while Boann Social Impact and Realize Capital Partners will invest in the rest of Canada.

The Social Finance Fund will help Canada achieve the United Nations Sustainable Development Goals (SDGs). Canada is advancing the SDGs to build a more prosperous, healthy and sustainable future for all with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests. By increasing the accessibility and flexibility of financing opportunities in the social finance market, the Social Finance Fund will help social purpose organizations grow, launch new programs, and serve the critical needs of diverse communities in Canada.