VINOD RAJASEKARAN: Welcome, Minister Gould. Thank you so much for joining us. Really excited to have this conversation with you about the launch of the Social Finance Fund, especially following the Social Finance Forum and your energizing opening remarks. Just to give you a quick sense of it, we had over 750 attendees from coast to coast to coast and hosted about 22 sessions with about 80 speakers. But why don’t you give us a sense of what the vision is for the Social Finance Fund?

MINISTER KARINA GOULD: Part of the vision is bringing to life that energy and that innovation and that vision of those 750 [Social Finance Forum] participants who really believe that we can do things better in Canada, right? And that you can have social purpose organizations — be it not-for-profit or for profit — and have a social good as an outcome. The Social Finance Fund is really about supporting that ecosystem and helping it grow in Canada and providing the confidence to investors that this is a sector that is not only worth investing for because it’s doing social good, but worth investing in because it’ll give you a return on your investment as well. 

VINOD: So let’s fast forward then to 2036 or 2037 around the time when the wholesalers have to repay the capital. What’s the fund accomplished? How will people describe the difference it’s made? 

MINISTER: I think the way people will describe it is that they will say that when investors are looking to invest their money, they are making decisions based on the outcomes that organizations are putting forward. And that there is going to be a lot more confidence in the market to say that we support organizations that have social, environmental outcomes as their objectives. 

And that we are looking to see the results of those outcomes, right? And we want to actually measure and see tangible impact. So, you know, my hope is that in 2036, 2037, around there, that Canadians are simply saying that’s where I want to put my money in. Businesses are saying that’s where I want to put my money, because they’re seeing that there is a tangible return on these investments that are having a positive impact in Canada. 

VINOD: At Future of Good we’ve been following and reporting on the development of the Social Finance Fund for the past few years, but the one thing we kept coming back to is that there there is a mismatch between the narrative of, of creating and growing a marketplace, and a fund designed to be a mostly repayable capital program with an end date. So how do you plan to provide ongoing support to actually develop a marketplace? Because it requires the right infrastructure, policies, regulations, and resources to really ensure longevity. When speaking to the wholesalers, some of them aren’t certain what will happen after 2037. 

MINISTER: I have to push back, because I don’t think there’s a mismatch. It was intentionally designed for the wholesalers to become self-sufficient. The wholesalers know what they signed up for in the sense that they’ve each committed to have, you know, a two to one investment from government and private sector. 

So for every dollar from government, they’re looking for $2 from the private sector. They have an intention to design a portfolio that will not only contribute to repaying the capital from government, but will also set them up for long-term success. 

So this is really about helping to create that ecosystem. We recognize that we need to de-risk some of those investments. We need to de-risk the lack of confidence right now from traditional investors and say, this is something that’s worth doing. And I think that’s where the role of government is really important. But it’s also about saying at some point it does need to be self-sufficient. Of course we’ll see where we are in 2036, but that’s certainly the objective.

VINOD: You’ve been part of this process for some time. What is one thing that you have personally learned in going through this development process?

MINISTER: New things are really hard to do in the Government of Canada. That might not sound like an amazing insight, but we’re talking about doing something that is new and different that the government of Canada has not done. This is the first time in Canada that we’re doing something like this, right? 

And, you know, there’s this tension of managing public money responsibly, which is an important thing for us to do as the Government of Canada and also trying to invest in something that’s a bit risky … and that’s innovative and that’s different. And so there’s a real tension between different parts of the government who have different responsibilities towards our citizens and our taxpayers and wanting to tackle these big challenging social issues. 

It’s really hard work and you have to shift paradigms in thinking. And in some ways you’re taking institutional thinking that’s been there for a century and a half and blowing the walls off of it and saying, actually, let’s go in this direction and this is why we have to do it. 

I know folks in the social innovation and social finance sphere have been patient — and it feels like it’s been a really long time — but just think, we are doing something totally new, totally innovative that the government of Canada has not done before, right? And we didn’t have the expertise to do it and we didn’t necessarily have the background or the understanding. So there was a lot of learning that took place in a whole bunch of different government departments to get us to where we are today and there’s gonna be a lot more learning that comes from it. And there’s going to be further policy development and thinking about how we make this successful over the long-term.