|Abstract: ||This Major Research Paper explores Canada’s charitable and corporate legislation in comparative perspective, and how it affects social entrepreneurs looking to attract investors interested in investing in blended value, or in other words a financial return in addition to a social and/or environmental return. These investors will be referred to as impact investors, and their investments referred to as impact investments. Specifically, the research question that will be examined is as follows: In what ways does Canadian legislation encourage or discourage impact investing in Canada, and what can be learned about how to encourage impact investing from recent experience in the UK and the US?
In order to examine this question in more detail, this paper will consist of a literature review, as well as an analysis of corporate and charitable tax laws in Canada on the federal and provincial level, compared with those in the U.K. and the U.S. The U.K. and the U.S. are examined for two main reasons. First, they were the first countries to implement policies, specifically related to tax and market regulation, designed to encourage impact investments. Second, they are both common law countries with similar legal systems and traditions.
Recent legal changes recognizing social enterprises on the federal and state/provincial will then be examined. Community Interest Companies (CICs) were first recognized by the U.K government. This was followed by New York State and most recently Delaware adopting state legislation recognizing Certified Benefit Corporations (B Corps). The province of British Columbia soon followed, as the trend of legally recognizing B Corps seems to be spreading into Canada. CICs and B Corps are organizations who create blended value through their work.
It is hoped that by comparing Canada’s current policies with those of the U.K. and the U.S. in these ways will provide some useful insight in answering the research question above.|