Enhancing community investment in Canada: what can be learned from the U.S.?

This study looks to the American community investment sector for lessons that could enhance the Canadian community investment sector and improve citizens' access to credit. The report argues that, though a burden of responsibility for the 2008-09 credit crisis can be placed on the American financial services sector's lack of regulation, this does not discount the contribution the United States continues to make regarding innovations in community credit. Canada's heavily regulated financial services sector serves the majority of Canadians well, but may not serve all of Canada's citizens. Canadian thinking on the delivery of financial services can gain insight from the progressive environment resulting from the American Community Reinvestment Act. This study presents Canadian and American community investment strategies, techniques, policy and legislation in a comparative structural framework to better identify American innovations that could be adapted to enhance community investment in Canada. Through a literature review and interviews with five leading experts in community investment, the study draws several conclusions. It agrees with previous researchers who assert that Canada could benefit from a broad national framework for community investment to help unify organizations and help overcome barriers posed by working within Canada's vast geography and sparse population base. It also contends that Canada's traditional policy approach, which siloes economic and social policy and provides economic analysis based on regions or sectors rather than communities, is a barrier to creating the national perspective that the community investment sector requires. The robust and innovative community investment sector in the United States was developed in response to a local context. Canada's own community investment sector can benefit not only from considering American innovations, but also from the adaptation of lessons learned from that exploration to support access to capital within Canada's own unique environment. --P