June 6, 2016


Integration is essential to realizing the economic benefits of immigration. Canada has attracted significant attention around the world for its unique settlement and integration (S&I) system, which uses fee-for-service contracts with third parties, including not-for-profits, public institutions, the private sector and local governments. While this competitive funding model is intended to induce efficiency and innovation, evolving immigration patterns are placing increased pressure on the S&I system. Some scholars have declared a crisis in the sector, pointing to the “dramatic downward shift in the economic status of newcomers.” That said, scholars also emphasize that “settlement agencies must turn their attention to the need for better funding rather than simply demanding more funding.”[1]


It is widely held that the current level of funding is insufficient to meet the increasing demand for S&I services.[2] Even during times of increased funding, the available funds are considered by settlement organizations to be insufficient to address the needs of newcomers.[3] While federal program funding has generally increased over the past two decades, the majority of these funds are dedicated to early stages of settlement, such as language training and finding short-term housing.[4] The later stages of integration, such as securing long-term employment and developing a sense of belonging, are considered significantly under-funded.5

This funding gap is expected to increase, since many immigrants do not graduate out of the later-stage programs at the same rate as new ones enter into them.[6] For example, linguistic experts suggest that it can take up to three years to develop conversational language skills, and up to nine years to develop advanced language skills required for some professions.[7] These timelines extend well beyond scope of funding cycles for most funders. Also, newcomers face competing priorities in the first few years of settlement, which can limit their ability to take advantage of services during the time that they are eligible.8 Indeed, integration can be a life-long process.[9]

Moreover, the uncomfortable division of responsibility for funding between levels of government ‘confounds accountability for service gaps’.[10] For example, while municipalities are neither mandated nor funded to provide S&I services, they are increasingly shouldering the burden of funding services for classes of immigrants falling outside of federal and provincial eligibility criteria.[11]

More concerning than the level of funding for S&I services is the mismatch between the structure of funding and the evolving nature of demand for services. Specifically, two trends expose weakness in the current funding regime. The first trend is the increasing ethnic diversity of immigrants. The majority of immigrants to Canada are non-European, mark- ing a dramatic shift from previous generations of primarily European immigrants.5 There are now over 200 ethnicities represented in Canada, thirteen of which represent more than one million people.[12] The second trend relates to settlement location within Canada. While the immigrant population is still  highly concentrated in four provinces,6 immigrants are increasingly settling in sub-urban areas.[13] The current fee-for-service model has not been responsive to these changes in demand for services.[14] In particular, the funding regime favours large service providers that offer generic services in large urban centres.[15] The consequence of these two trends has been to exclude the growing number of newcomers needing ethnic-specific services[16] and services that are accessible in sub-urban areas.[17]

Finally,  competition for funding inhibits collaboration between settlement agencies, and short-term funding cycles inhibit capacity building and the willingness of service delivery organizations to take risks that are required for innovation in the sector.[18]

Against this backdrop, this research looks at the potential of social finance approaches to meet evolving and complex needs of newcomers and newcomer-serving organizations. Social finance is most often associated with investment in social enterprise. In practice, social finance can extend to a wide range of beneficiaries, including individual newcomers and refugees that receive micro-loans or loans, immigrant-owned small and medium businesses, S&I networks that support and represent service provider organizations and private employers that hire newcomers.

  1. Richmond, T. and Shields, J. 2005. NGO-Government Relations and Immigrant Services: Contradictions and Challenges. Journal of International Migration and Integration. 6(3-4): p. 524, emphasis added
  2. Richmond and Shields 2005;Mukhtar, M., Dean, J., Wilson, K., Ghassemi, E. and Wilson, D. 2015. The Challenges Immigrant Settlement Agencies Encounter. Journal of International Migration and Integration. Online version, pp. 1-20.
  3. Mukhtar et al. 2015
  4. Shields, J., Türegün, A. and Lowe, S. 2014. Final Report: Settlement and Integration Research Synthesis 2009 – 2013, CERIS, Accessed: Oct 02 2015. http://ceris.ca/ wp-content/uploads/2015/01/CERIS-Research-Synthesison-Settlement-and-Integration.pdf.
  5. Shields et al. 2014;Flynn, E. and Bauder, H. 2015. The Private Sector, Institutions of Higher Education and Immigrant Settlement in Canada. International Migration and Integration, 16, pp. 539-556.
  6. Omidvar, R. and Richmond, T. 2003. Immigrant Settlement and Social Inclusion in Canada (pp 1-23). Laidlaw Foundation; Richmond and Shields 2005
  7. Gunderson, quoted in Vancouver Sun article, Accessed Nov 20, 2015 http://www.vancouversun. com/business/vancity+ramp+financial+help+refug ees/11530463/story.html.
  8. Mukhtar et al. 2015
  9. Omidvar and Richmond 2003
  10. Simich, L., Beiser, M., Stewart, M. and Mwakarimba, E. 2005. Providing Social Support for Immigrants and Refugees in Canada: Challenges and Directions. Journal of Immigrant Health, 7(4): 259-268.
  11. FCM (Federation of Canadian Municipalities). 2011. Starting on Solid Ground: The Municipal Role in Immigrant Settlement. Accessed: Sept 22 2015. http:// www.fcm.ca/home/issues/more-issues/immigration.html; Shields et al. 2014
  12. NHS (National Household Statistics). 2011. Immigration and Ethno-cultural Diversity in Canada. Statistics Canada. Accessed Oct 03 2015. http://www12.statcan. gc.ca/nhs-enm/2011/as-sa/99-010-x/99-010-x2011001- eng.cfm.
  13. Lo, L., Shalaby, A., & Alshalalfah, B. 2011. Relationship between Immigrant Settlement Patterns and Transit use in the Greater Toronto Area. Journal of Urban Planning and Development, 137(4), 470-476.
  14. Shields et al. 2014; Flynn and Bauder 2015; Mukhtar et al. 2015
  15. Mukhtar et al. 2015
  16. Simich et al. 2005; Guo 2006
  17. Mukhtar et al. 2015
  18. OCASI (Ontario Council of Agencies Serving Immigrants). 2013. Ontario Council of Agencies Serving Immigrants Input on Canada’s Settlement Policy December 2013.; Shields et al. 2014

*The content on this page summarizes information presented in the Social Finance for the Settlement and Integration Sector in Canada Market Assessment Report (April 2016), produced by Purpose Capital and the Carleton Centre for Community Innovation. Please consult the full report before making any attributions or references to this work.