5 Policy Ideas to Power the Next Wave of Potential in Canada’s Social Economy

The social economy is one of the most effective and underutilized tools we have to build a stronger, more secure, and sustainable Canada.

 

As Canada heads into a pivotal federal election, economic uncertainty, global trade disruptions, and questions of national sovereignty are dominating the conversation. But one of our strongest economic engines is often overlooked: the social economy. 

Canada’s nonprofit and charitable sector is one of our strongest economic engines:

• Contributing 8.2% of Canada’s GDP, or $211 billion annually, surpassing the retail sector and nearly matches mining, oil, and gas extraction; 
• Employing 2.8 million people, or 12% of Canadian workers

 And that’s not even counting the economic contributions of co-operatives and social enterprises!

At Purppl, a social enterprise that coaches, consults, and collaborates with community impact organizations, we see the power of this sector every day. From rural housing co-ops to urban food security to Indigenous-led land stewardship, these organizations are building inclusive, regenerative solutions in their communities — often in spite of outdated policies that limit their growth and financial sustainability.

Feeling the unrelenting economic instability and political change, we urge leaders to take seriously the vital contributions of social entrepreneurs and impact leaders to the wellbeing and strength of Canada.

That starts (but doesn’t end) with good policy, informed by the folks on the frontlines. 

What We Heard In Community

“What policy shifts would help your social enterprise, nonprofit, or social venture grow its impact — and its power?” Wanting to open up dialogue about policy with folks in community, I posted this question on LinkedIn – and frankly wasn’t surprised by the volume of thoughtful ideas. This is a sector hungry to be heard and for legislators to respond. 

Policy suggestions from nonprofit leaders and ecosystem builders included:

• Unrestricted Funding: Multi-year, revenue-indexed funding without restrictive grant boxes.
• Social Procurement: Incentivize purchasing from social enterprises, inspired by the work of Buy Social Canada.
• Operational Stability: Fund existing roles, not just “net new” positions.
• Shared Infrastructure: Facilitate access to shared legal, accounting, and HR support, especially for early stage or equity-deserving organizations.
• Legislative Clarity: Clearly allow nonprofits/charities to generate revenue without risking their tax status.

Building from that dialogue as well as from a decade of collaboration in the social sector, we offer five actionable policy ideas to power the next wave of potential in Canada’s social economy.

We hope national, provincial and regional leaders will look to the list above and the ideas below as a trail map for building economic sovereignty, climate resilience, and community wealth.

Make Asset Ownership Accessible for Nonprofits and Social Enterprises

Policy idea: Build targeted public policy that enables nonprofits and social enterprises to own critical assets like real estate, operating businesses, and shared infrastructure.

Social enterprises, especially nonprofit ones, are often excluded from building wealth and ownership. With limited ability to generate revenue, take on investment, or purchase assets, they’re stuck in a cycle that prioritizes survival over sustainability.

But it doesn’t have to be this way.

From affordable office space to non-market housing to shared infrastructure like commercial kitchens or clean energy projects, many nonprofits want to own the assets they rely on. Some of these assets like clean energy infrastructure, retrofitted buildings, and sustainable transportation also help communities adapt to and mitigate the climate emergency. When these assets are community-owned, the benefits stay local: affordability is protected, wealth circulates within communities, and organizations build long-term financial sustainability instead of dependency.

Non-market housing, owned by nonprofits and cooperatives, is one of the surest ways to maintain long-term affordability and community stability, especially in Canada’s ongoing housing crisis. Removing deep profit motivations from the housing equation allows us to prioritize livability, security, and community over speculation.

To make community ownership possible, we need public policy that includes:

• Grant capital to support equity purchases or down payments
• Debt structures that are accessible to nonprofits and social enterprises
• Legal and governance support for co-ownership models
• Ownership frameworks like Community Contribution Companies (CCCs) that embed public benefit into an organization’s DNA
• Capacity-building for leadership teams navigating these complex transactions

Until more nonprofits, social enterprises, and small businesses are able to own the assets they rely on, many remain vulnerable to market forces. Rental protections for long-term commercial tenancy and incentives for mission-aligned landlords can help stabilize organizations in the short term — but long-term, we need ownership.

Private wealth for both individuals and corporations is often built through asset ownership. But nonprofits and social enterprises face systemic barriers to building wealth in the same way. If we want these organizations to be resilient, sustainable, and thriving, we need to enable them to own, build, and grow wealth that stays in community hands.

Ownership is power. Let’s make sure more nonprofits and social enterprises can access it.

Catalyze Place-Based Impact Investing

Policy idea: Invest in community development financial institutions (CDFIs) and place-based impact funds to provide fair, values-aligned capital to social enterprises.

Building a just, regenerative economy isn’t possible until we shift who holds capital and how it flows.

Traditional investment systems are designed to extract, accumulate, and centralize wealth. Impact investing is a tool to do the opposite. When structured thoughtfully, it shifts capital into the hands of communities, allowing them to invest in their own priorities — like community-owned real estate, non-extractive businesses, and local infrastructure.

Purppl co-owns Thrive Impact Fund, a place-based impact investing fund that works to fill critical gaps in access to capital for social enterprises, nonprofits, and co-ops in BC. We’ve seen firsthand how capital, when it’s values-aligned and governed with community in mind, can unlock powerful economic and social outcomes.

So what does policy support look like?

What’s needed now is coordinated strategy with policy and capital support. Government policy can help de-risk investment, enable co-investment, and catalyze private and philanthropic capital. A national strategy for impact investing could include:

• Public capital guarantees or loan loss reserves to de-risk investments into social purpose organizations (SPOs).
• Tax incentives for individuals and institutions who invest in place-based impact funds.
• Policy mandates that encourage foundations, pension funds, and financial institutions to allocate a percentage of their portfolios to community-based impact investing.
• Dedicated funding to expand place-based funds and community development financial institutions (CDFIs) across the country, especially those rooted in equity-deserving communities.
• A simple mechanism to democratize impact investing and enable retail investors to participate through their RRSPs or TFSAs.

Impact investing isn’t a silver bullet, but it’s a practical tool to build community wealth, finance the just transition, and keep ownership rooted in place. Let’s put public policy behind it.

Fund Social Enterprise Sales & Revenue Roles

Policy idea: Fund dedicated sales roles to enable revenue growth and sustainability for social enterprise. 

At Purppl, we work with social enterprises across the country. One of the biggest gaps we see holding back their growth is the lack of unrestricted funding, particularly such funds might be leveraged to support revenue-generating roles.

Revenue generation responsibility usually falls onto founders and executive directors who are already overwhelmed, limiting their ability to strategically build sustainability. Dedicated revenue roles can change this. Funders want to see growth in earned revenue, but without investment in the people who can drive that growth, it’s often out of reach.

Create a dedicated fund that provides multi-year grants to social enterprises to hire or fund existing staff focused on customer revenue generation and long-term sustainability. 

Revenue roles are rarely funded and often misunderstood. Yet these are the very roles that help organizations earn predictable revenue and reduce reliance on unstable grants. 

Modernize Revenue Rules for Nonprofits and Charities

Policy Idea: Update the Income Tax Act to clearly enable charities and nonprofits to earn customer revenue without putting their tax-exempt status at risk — so they can become more self-sustaining, community-owned, and entrepreneurial.

Canada’s nonprofits and charities are doing some of the most critical work in our communities — from affordable housing to food security to mental health. But too many are held back by outdated rules that create confusion, caution, and fear around generating customer revenue.

We’ve seen this firsthand. Organizations wanting to charge a small fee for workshops, rent a space they own, or run a business as a subsidiary are often met with uncertainty from boards, funders, lawyers, and accountants. The concern? That earning revenue might threaten their tax-exempt status or charitable purpose. So instead of building strength and sustainability, they default to dependency. 

Financial freedom gives these organizations more space to focus on impact, not just survival.

In today’s economy, with high inflation, rising demand for services, and chronic underfunding, we should be doing the opposite. We should be encouraging revenue generation. Enabling it. Incentivizing it.

This isn’t about undermining mission, it’s about powering it. The more these organizations can own their revenue, the more they can hire, invest, and deliver impact without being at the mercy of every funding cycle.

Let’s give community organizations the freedom and confidence to build strong, sustainable organizations that put profit to work for purpose.

Create a permanent federal home for the social economy

Policy idea: Establish a permanent federal office or secretariat to support and coordinate the social economy.

The social economy has no clear home in the federal government. Unlike small business, which is represented by Innovation, Science and Economic Development (ISED), there’s no single department or ministry with a mandate to understand, support, and grow the social economy. That means fragmented policies, missed opportunities, and a lack of accountability.

A permanent home would provide much-needed coordination and visibility. It would strengthen cross-government policy, ensure that procurement and economic development programs include social enterprise, and create a dedicated space for listening and collaboration with the sector.

This is not just about policy alignment; it’s about creating a dedicated advocate within government who truly understands and champions the social economy.

Imagine Canada and others have called for this. We agree. Let’s make it happen.

Let’s build the economy we actually want

The social economy is one of the most effective and underutilized tools we have to build a stronger, more secure, and more sustainable Canada. It’s made up of people and organizations tackling our biggest challenges: housing, health, food, education, climate, and local economic development.

These aren’t partisan issues. They’re community issues. 

The organizations leading this work are creating long-term impact in every corner of the country. Many of the solutions already exist, we just need policy to catch up with practice.

We wrote this blog to share ideas, not complaints. These are actionable, practical shifts that can unlock the next wave of impact by enabling ownership, access to capital, and the ability to earn and reinvest revenue. This is about giving organizations the tools to thrive, and keeping wealth and decision-making in community hands.

Policy matters. Let’s make it better — together.

Share this post. Start conversations today. Reach out, and let’s advocate together because strong communities deserve strong policy.