Canada underfunds its community investment sector: National Community Investment Study
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A nine-month national study has found that Canadian support of local investment funds in Canada lags significantly behind similar funding in the United States and United Kingdom. “Compared with the US and UK, government support for community investment is weak in Canada,” states the study, sponsored by the Social Investment Organization and the Riverdale Community Development Corp. Community investment is the practice of establishing community-controlled investment pools to provide loans or equity investments to low-income individuals, micro-enterprises, affordable housing, non-profits, environmental projects and community asset development initiatives. The impact of these funds can be enormous. According to one study, $1.5 million invested in community funds in Quebec has created 657 local jobs and 237 business starts. Yet, in spite of the value of the community investment sector, there is little government funding for community investment vehicles in Canada. The study points to the US, where the federal government has committed more than $600 million to community development organizations. In the UK, the government has recently instituted a community investment tax credit and committed significant support for a new Community Development Finance Association. “While there is some provincial support for the sector through various programs, Canadian federal support for community investment significantly lags behind the US and UK,” states the study. The study concludes that there is a strong case for government support for a national community investment association to strengthen the sector across Canada. Such an association would help to build capacity by exchanging information and skills among the members of the sector and training members on best practices. It would also aid in capital formation by increasing investor awareness. It would also advocate on behalf of the sector in public policy and funding issues. Together these activities would help to build the sector on a national basis. For a complete version of the report, including a background review, results of a survey of community investment providers and final report, visit community investment.
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