This article was written by Coro Strandberg and Wellington Holbrook, first published in The Hill Times. The original publication can be found here. It is reposted here for informational purposes only, with full credit to the original authors and publisher.
A purpose economy is the innovation we need
The federal government is making consequential choices about how Canada’s economy grows. Through industrial strategy, investment tax credits, trade missions and project acceleration, Ottawa is shaping markets in the name of competitiveness, productivity and growth.
Yet as Canada pushes for growth, a fundamental question goes unasked: what kind of economy are we building?
If the nation continues on its current path, much of our effort will reinforce the economy we already have – one optimized for short-term gains, with social and environmental outcomes treated as secondary. But Canada has another option. By intentionally growing a purpose economy, Canada can build a distinctive and durable source of national advantage.
A purpose economy is the innovation we need.
A purpose economy is an economy powered by the pursuit of long-term well-being for all, in which business, government and the financial system foster an equitable, flourishing and resilient future.
In a purpose economy, social purpose in business becomes mainstream: businesses define their reason for being in terms of the societal value they create, profitably addressing Canada’s environmental and social challenges – and using that purpose to drive innovation, growth and impact. In this economy, long-term well-being is a driver of economic growth, not a constraint on it.
Importantly, a purpose economy can serve as a rallying point. It provides clear direction not only for business, but for governments, community partners, investors and others – unlocking the conditions for collaborative innovation. At a time of economic uncertainty and fragmentation, shared direction matters.
The economic case is strong.
A purpose economy can differentiate Canada globally, attract long-term and patient capital, strengthen trust in business and – critically – drive innovation that delivers both economic and societal value.
Research increasingly shows that purpose-led companies invest for the long term, attract and retain top talent, and sustain innovation through economic cycles – proving that when purpose is embedded in the core of how firms operate, innovation follows.
This is no longer a fringe idea – critical mass is forming.
Roughly 40 per cent of the TSX 60, representing almost half of total market capitalization, now articulate a social purpose – clear evidence that purpose is moving from the sidelines into conventional business practice.
Vancity Credit Union, an 80-year-old B.C.-based financial institution with $39.7 billion in assets under administration, illustrates how social purpose can drive growth, innovation and impact.
Guided by its purpose, Vancity introduced mortgage products that enabled women to take out loans and mortgages without requiring a male co-signer in the 1960s; created the first socially responsible mutual fund in the 1980s, pioneered impact-focused banking in the 1990s; launched a payday loan alternative in the 2010s; and today is leading Canadian banks on climate finance commitments – reinforcing how its purpose influences both products and social outcomes.
But we need to go beyond a few marquee purpose-led businesses to catalyze a broader shift towards social purpose becoming the business norm. Canada needs a clear national direction toward a purpose economy.
Ottawa already shapes markets through trade policy, investment incentives, regulation and project acceleration. The opportunity now is to put those tools to work for a clear economic ambition: scaling a Canadian purpose economy.
That means ensuring that the firms and projects benefiting from public policy – including trade missions, national project offices and fast-tracked investments – are aligned with long-term societal value creation. It also means recognizing purpose as an economic asset and reflecting that in policy signals accordingly.
The federal government could follow Scotland’s lead by establishing a Social Purpose Business Commission to canvas Canadians’ views on the kind of economy they want to see. This could help respond to underlying concerns that we are building an economy focused on economic outcomes at the expense of the societal outcomes Canadians value.
And that would only be a start: there are many other policy measures a federal government can pursue to grow the purpose economy.
Canada does not need to choose between economic growth and societal progress. We need to choose what kind of economy our growth is building. A purpose economy offers a way forward – by helping social purpose businesses start, scale and succeed, orienting innovation toward solving the challenges that matter most to Canadians.
With clear federal leadership, Canada can build an economy that businesses and communities alike can mobilize around — one that distinguishes Canada in a rapidly changing global landscape.
Growth sets momentum. Purpose gives it direction – toward a flourishing Canada.