Avoiding the resource curse through investing: A crash course on sovereign wealth funds at home and abroadRead More ›
Why Alberta is the Social Finance Hub To Watch in 2015
In Canada, social finance can seem somewhat Toronto-centric – but the sector in Alberta is about to grow rapidly in the next 12 months, and it’s worth paying attention to. Here’s why:
Changing Policy Climate
There’s been a lot of change in Alberta’s political landscape recently with the recent swearing-in of our new Premier, Jim Prentice. Earlier in the spring, the Alberta Legislature tabled Bill 1, the Savings Management Act, which allocated $1 billion to a social innovation endowment over two years. The social innovation endowment is intended to catalyze a culture of social finance and social innovation in Alberta, using experimental approaches for social service financing and delivery – and it’s the biggest social innovation investment in Canadian history. The Government of Alberta is currently undertaking an enormous “ecosystem mapping” project to track influential social sector leaders and organizations – do contribute if you’re Alberta-based and looking to connect with the emerging sector.
Alberta continues to be an indispensable part of Canada’s economy, leading the country with 3.5% GDP growth over the last year. Alberta’s economy creates ideal conditions for increased exploration of social finance, particularly as sustainable and socially responsible investment becomes a growing priority. Homegrown organizations like Finance For Good are leading the way in Alberta’s emergent social finance sector, hosting frequent events in Edmonton and Calgary to raise public awareness of the potential benefits of social finance tools and approaches. Alberta’s economy is, at the moment, very well-suited for exploring social finance and impact investing.
Alberta’s local politicians – Edmonton Mayor Don Iveson and Calgary Mayor Naheed Nenshi – have been the envy of municipalities nationwide. Their forward-thinking, thoughtful leadership has re-engaged citizens in initiatives such as 3 Things For Calgary and Make Something Edmonton and cultivated an entrepreneurial spirit.
This is evident from the sudden surge of social innovation initiatives and co-working spaces, including Thrive Calgary and Startup Edmonton. Iveson and Nenshi are both focused on economic diversification, particularly in Edmonton and Calgary’s downtown cores. These developments will dramatically change Alberta’s urban landscape, chipping away at the tired “conservative cowboy” stereotype.
Alberta is uniquely situated due to our demographics – a large urban Aboriginal population, high levels of migration (both from within Canada and abroad) and a significant proportion of the population living in more rural and remote communities. Our social infrastructure is still catching up to the population growth and emerging social pressures, and this is a great opportunity to scale up the province’s work on social finance as a potential solution.
Make Something Edmonton describes this distinct culture as an “urban barn raising spirit”. The province’s wealth is largely “new money”, and the lack of aristocracy/hierarchy means that community-building in Alberta’s cities and smaller centres is everybody’s business. Small businesses thrive in Alberta because it’s an environment that is supportive of failure and homegrown talent. Networking comes easily and innovation is encouraged rather than crowded out by competition.
So, what should we expect in 2015? I’m interested to see whether the Government of Alberta and their local social finance stakeholders announce their first social impact bond or pay per success financing pilot, explore social procurement policies, build capacity to scale up impact investing efforts or support small-scale social entrepreneurship.
Alberta is moving in an exciting direction, but the province should focus more of their resources on building capacity in social finance and social innovation in 2015 in the following ways:
- Establishing a Provincial Non-Profit Association: Alberta has two excellent non-profit sector associations (the Edmonton Chamber of Voluntary Organizations, and the Calgary equivalent) and countless smaller, local volunteer centres, but it lacks an equivalent to powerful province-wide advocacy bodies like the Ontario Nonprofit Network. These provincial associations have an enormous role in advocating for social finance, disseminating research and best practices and acting as the province’s sounding board on social service delivery.
- Deepening Research Capacity & Knowledge Transfer: Similarly, Alberta lacks an equivalent to the MaRS Centre for Impact Investing with the capacity for research, consulting and knowledge transfer. The social innovation endowment is an important opportunity to build capacity, but the next step will be convening some of Alberta and Western Canada’s leading academics, researchers and practitioners on issues of social finance related issues to provoke some Alberta-specific thought leadership.
- Diversifying The Job Market: Our job market is, irrefutably, driven by oil and its related industries. While Alberta’s economy is strong, it lacks diversification. A flourishing social finance and impact investing marketplace in Alberta would use the energy sector as a base, but explore alternative sources of job creation and income generation. This will be especially important as Alberta asserts itself as a national and international leader in social finance, demonstrating that the province has successfully applied social finance and impact investing approaches in multiple, diverse industries. Alberta’s universities and business schools could also do much more to capitalize on this opportunity and educate their students on emerging social finance models.