Impact Canada

Impact Canada is a whole-of-government effort that deploys outcomes-based policy and program approaches. It features a novel set of rules, processes, and supports to allow the Government of Canada to support innovative methods like challenges, pay-for-success funding, and behavioural insights, which previously faced significant barriers to adoption. Through these systems-level changes, the Government can now apply these approaches to produce better outcomes for citizens and create greater public

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Innovation Overview

Impact Canada was established to provide a vehicle for the Government of Canada to enable innovative policy and programme approaches to be applied across federal organisations. The initiative had two main antecedents. The first was a systematic review of Government of Canada funding rules and barriers that inhibited more innovative approaches from taking place, and the second was a Government of Canada directive on experimentation, which required federal departments to allocate a certain portion of funding towards experimental and innovative delivery approaches to improve outcomes for citizens. It was announced in the federal government’s 2017 Budget. Impact Canada sought to implement within a Canadian policy and legal context models that had been deployed in other contexts, such as Challenge Prizes led by Nesta in the UK and internationally, behavioural insights applications as developed by the Behavioural Insights Team in the UK, and pay-for-success funding efforts led by organisations like Social Finance UK and Social Finance US. A comprehensive review of Canada’s innovation landscape by the OECD has helped serve as a foundational piece of research to guide and target efforts of Impact Canada.

Impact Canada established a way for federal departments to allocate funding to innovative and experimental efforts, which are co-designed by the multi-disciplinary Impact and Innovation Unit’s Centre of Expertise, which resides in the Privy Council Office of the Government of Canada (18 core staff). The initiative established a “Terms and Conditions” to enable innovative policy and program approaches across all government departments, such as challenges, pay-for-success funding, and behavioural insights. For the first time, the Government could allocate its funding to paying on outcomes (contingencies), as opposed to paying for inputs or activities. Impact Canada also emphasises the use of impact evaluations and experimental and quasi-experimental impact measurement, and creates possibilities for more intentional allocation of resources to evaluate impact. These rule changes permitted an opening up of innovative approaches, where in two years the Impact Canada portfolio has grown to over $720 million CDN of outcomes-based funding programs (challenges, pay-for-success) and over ten significant behavioural insights trials across economic, social, and environmental policy areas of top-priority for the Government of Canada.

Impact Canada initiatives have a broad set of beneficiaries. In the first instance, federal departments and organisations are now able to test outcomes-based approaches, which they were previously inhibited from undertaking under normal funding rules. For example, Impact Canada provides flexibilities for challenges like Canada’s Smart Cities Challenge and the Clean Tech Impact program, which funds a number of challenges to drive clean growth.

The supports provided by the Impact and Innovation Unit in the Privy Council Office enables greater systems-level coherence in the application of these approaches. It also allows the government to mitigate implementation risks by drawing on the expertise of a central team of practitioners with significant experience in this field to co-design efforts with implementing departments. The Impact and Innovation Unit also helps to translate lessons learned to inform program refinements and to foster whole-of-government learning. Impact Canada features a digital platform to post challenges and other initiatives to encourage innovators to participate across government departmental mandates to open up the problem solving process to a wider set of potential collaborators.

At its current phase, Impact Canada is assessing the early results of its efforts and putting in place systems to capture lessons learned and impact data. Given that the previous baseline for the Government of Canada in applying challenges, pay-for-success, and behavioural insights at scale was very small before Impact Canada was launched, a significant effort is being placed on understanding the impact of these efforts. In particular, this includes understanding what key insights could be used from project-level efforts to inform broader policy using various knowledge generation and impact assessment techniques.

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