Canadian social enterprises generated $4.1 billion in 2022: report

WINNIPEG / TREATY 1 – Social enterprises employed more than 9,000 Canadians last year, generating gross revenue totalling $4.1 billion, according to a new report from Buy Social Canada; numbers the organization says shatters myths about the sector’s viability.

“As you will see from the data in this report, social enterprises in Canada are solidly embedded in communities, work across business models, and deliver a vast array of goods and services,” said Elizabeth Chick-Blount, CEO of Buy Social Canada. “They create significant revenues, employment, and social impact.”

A social enterprise itself, Buy Social Canada promotes social enterprises and social procurement across the country. It surveyed 132 certified social enterprises country-wide and found that 70 per cent either broke even or made a profit in 2022, but 59 per cent struggled with market access, and a further 48 per cent of organizations surveyed faced challenges accessing capital.

Chief operating officer Tori Williamson said her organization is working to improve market access for social enterprises but that long-standing misconceptions about non-profits can pose a barrier. “The majority of social enterprises are incorporated as non-profits,” she said. “And there’s a perception that nonprofits aren’t businesses, but it’s a false perception.”

Williamson said that Social enterprises prioritize community capital over shareholder wealth. She hopes the report increases awareness of the social and economic benefits this enterprise model offers and helps convince financial institutions to reconsider policies that disadvantage non-profits.

While no regulatory requirement prevents it from doing so, the Business Development Bank of Canada will not issue loans to non-profit organizations, Williamson said.

“We believe all of the small business supports that the federal government funds should be available to non-profits,” she said.

“There’s no reason that they should be left out just because they’re investing their profit back into the community instead of back into individual owners.”

The report states that social enterprises offer solutions to complex issues but need more support from government, corporate purchasers and funders to increase access to markets and finance.

The report also challenges the suggestion that social enterprises are a new phenomenon. It notes that GreenShield Canada, which generated gross revenue of $3.9 billion last year, was founded in 1957. Halifax-based MetroWorks was founded in 1977, and EMBERS has been operating in Vancouver’s Downtown Eastside since 2001.

Toronto-based Furniture Bank, Canada’s largest furniture reuse network, was incorporated in 1998 and diverts more than 3 million pounds of refuse from landfills yearly. “Providing cost-effective, simple solutions for businesses like IKEA further demonstrates our role in circular economy impact and job creation,” said executive director Dan Kershaw.

Rebecca Sherbino, executive director of The Raw Carrot — a social franchise that makes gourmet soups — said social enterprises can also provide supportive employment opportunities that give people stability, purpose and a sense of belonging. “What we really want to see with supportive employment is moving away from ‘here’s your monthly cheque now go away.’ There’s such a large community of people who want to work,” she said.

The report found that 85 per cent of social enterprises intentionally provided staff with “wraparound supports.” A further 65 per cent offered skills training and development to their staff. The report also acknowledges that when GreenSheild’s revenue is eliminated from the equation, the gross revenue of certified social enterprises in Canada drops to about $237 million.

Williamson said social enterprises are dynamic and diverse but can struggle to articulate or quantify the value of their multifaceted work. “They are incorporating business acumen with social good or environmental benefits, and it’s always so multi-layered,” she said.

She described the report, including case studies of various social enterprises, as a “snapshot” of the sector today. It’s the first of its kind issued by the organization. Williamson would have liked to have compared 2022 to pre-pandemic or mid-pandemic years, but data wasn’t readily available.

“If we had funding, we would definitely do it annually,” she said.