Canadian sovereignty starts on Main Street

The federal government is responding at speed, mobilizing capital to build major national projects to support economic growth and sovereignty. This investment is important, but incomplete. 

A sovereign Canada starts on Main Street. It’s found in communities where workers are housed, where food and energy systems hold up under stress, and where wealth generated in this country's communities stays in Canadian hands.

Economic anxiety is high, and nation-building policy announcements can feel dislocated from everyday experience. Part of the solution is near at hand. There is a growing network of financial actors working across Canada helping to relieve these stresses and meet needs with real and meaningful outcomes. 

The network of activity is called community finance, which links local resilience with national competitiveness. It helps local businesses grow, supports regional supply chains, finances affordable housing, and expands capital access for Indigenous and underrepresented entrepreneurs that mainstream finance often overlooks.

Community finance is investment and lending that is locally grounded and identity-based, mission-driven, and designed to generate both financial returns and positive community outcomes. It is a major economic force, representing $771.3-billion in total assets and $7.3-billion in assets under management, excluding credit unions. 

Canada has a diverse network of 768 community finance institutions including community loan funds, Indigenous financial institutions, Community Futures organizations, credit unions, investment co-operatives, and community bond issuers. They all invest where the big banks don’t. 

Community finance shows up in institutions like the Thrive Impact Fund in British Columbia providing financing to non-profits, co-operatives, and social enterprises. It’s seen in the Business Development Bank of Canada’s Black Entrepreneurship Loan Fund, helping Black business owners access capital investments, working capital, and business resources. It looks like EntrepreNorth’s Sinew Impact Fund: a $10-million impact fund designed to deploy capital to Indigenous entrepreneurs from the Yukon, the Northwest Territories, and Nunavut.

Our economic analysis confirms that every $10-million deployed into the community sector produces an average of 158 full-time-equivalent jobs. Every $1 deployed generates approximately $1.20 in GDP and $0.85 in Canadian wages with jobs rooted in local economies and connected to housing, food, child care, climate solutions, and small business. 

A federal community investment tax incentive of roughly $50-million annually could mobilize close to $900-million in community investment, or $17.50 to $19.30 per federal dollar. 

Canada has a long and uneven history with community finance. For decades, there has been a recurring recognition that communities need access to specialized, patient, and accessible capital to solve local problems, and that community finance institutions are effective at doing so. 

This recognition, however, has not been matched by the creation of the enabling laws, institutions, funding mechanisms, and policy infrastructure that make such systems work in peer jurisdictions. 

To scale the work of community finance intermediaries, there are tools available today like tax incentives, loan guarantees, accreditation, and the participation of Crown corporations, pensions, and banks to expand local investment and build resilient economies.

A $250-million capitalization fund for community finance institutions could generate approximately $523-million in total economic output, $301-million in GDP, $213-million in labour income, and 3,939 full-time equivalent jobs across the Canadian economy. 

Strengthening the Canadian economy is more fundamental now than ever before, and doing so requires strong and resilient local economies. 

Community resilience from coast-to-coast-to-coast is the desired outcome. Community finance is the mechanism. Economic sovereignty is the context that makes both a national priority.

A comprehensive community finance strategy, as outlined by Catalyst Community Finance’s pre-2026 budget submission for the federal government, would move Canada from isolated success stories to a connected national system that is capable of mobilizing billions in private and community investment, creating jobs, accelerating housing solutions, supporting entrepreneurs, advancing reconciliation, and strengthening local economies.

Simon Marmura Brown, PhD, is strategic director of research and knowledge mobilization at the University of New Brunswick's Pond-Deshpande Centre and lead author of Unlocking Capital: The Economic Case for Canadian Community Finance. Jo Reynolds is co-manager of Catalyst Community Finance. Michelle Baldwin is co-executive director of Impact United Academy.

The Hill Times