The Conservative government is throwing its support behind social-impact bonds – an experiment that rewards private investors for putting cash toward social causes.

The government on Monday released a list of projects that could be financed in this way, such as programs to build housing for people with disabilities, reduce recidivism among young offenders or encourage more young aboriginals to learn a skilled trade. Ottawa said it will work with interested groups toward launching projects.

The arrangement is not a bond in the traditional sense. An investor pays a group such as a non-profit to deliver a social service and is rewarded with an agreed upon sum from the government if the non-profit achieves a measurable goal. The financial risk falls on the investor. If the goal is not met, no government money is spent and the investor is out of pocket.

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The bonds concept – an emerging international movement spearheaded by the Conservative government in the United Kingdom and spreading in the United States – could mean some federal money that goes to existing social programs would be diverted to financial rewards to the investors.

Social investing appeals to cash-strapped governments that are eyeing large pools of money from foundations and private-sector funds as a way of getting better social results without spending more. Proponents say it means government money goes into only those ideas that succeed. Critics say it's just a way to cut spending.

Ottawa has been studying the concept for two years, at a time in which Canadian charities and non-profits have been feeling the pain of federal and provincial budget cuts. Both governments and charities hope the bonds and other investments in the broader field of social finance will bring in new money from foundations and the private sector.

Human Resources Minister Diane Finley insists her government's approach is not driven by a desire to cut government spending on Canada's most disadvantaged groups.

"What these new projects will do will be in addition to what we already do," she said.

Yet Monday's report from her department does suggest that existing money would be moved around.

"This allows the government to use funds otherwise spent on services like counselling, health care or detention to reward investors who fund programs that reduce the need for these services in the first place," the report that contained the list of projects stated.

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Canada's biggest bank, RBC, launched a $10-million impact fund in November, and its first social investments are expected to be announced soon. One of the first social-financing projects was a program launched 2010 to reduce reconviction rates for inmates released from the Peterborough Prison north of London, England.

The report released on Monday summarizes 15 concepts – out of more than 150 that were submitted from across the country – that Ottawa believes best show the potential for the emerging field of social finance.

It is not clear whether any of the 15 highlighted projects will ultimately get the green light. The opposition NDP said social finance has potential, but criticized the Conservatives for cutting traditional transfers to the very groups they claim will be helped.

That's the case with JVS Toronto, a social-services group that submitted one of the 15 projects praised by Ms. Finley's department. The JVS plan for reducing recidivism would see the government pay an investor based on how long a young client remains employed.

Gordon Goldschleger, a JVS vice-president, said the group is happy with the mention in the report. However, its federal funding has been cut by 36 per cent since 2010-11.

"There's been a reduction of spending, for sure," he said, adding that many other groups are also facing cuts. Still, Mr. Goldschleger agrees there is opportunity in social finance.

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"There's a wealth of really wealthy baby boomers who are looking to give back," he said. "They want a return on capital. They're not willing to give that up. And they want to do social good."

Another of the 15 projects highlighted by Ottawa would dramatically increase the scale of social finance with a Canadian impact infrastructure exchange. It would match large investors such as pension funds with major infrastructure projects such as solar-power plants that would have social benefits.

The idea was put forward by the Carleton Centre for Community Innovation. The centre's executive director, Tessa Hebb, said she envisions the exchange would attract large pension funds like the $130-billion Ontario Teachers Pension Plan and the Canada Pension Plan Investment Board.

The assets of the CPPIB are projected to reach $275-billion by 2020 and nearly $500-billion by 2040.

Ms. Hebb notes that the CPPIB has signed on to the United Nations Principles for Responsible Investment, and she hopes to persuade the board that investing in social infrastructure – such as energy projects that benefit northern aboriginal communities – is a concrete way of delivering on the U.N. principles.

Ms. Hebb said the common factor among the wide range of social finance ideas is that they combine sectors that previously operated independently, such as charities, non-profits and the private sector.

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"It's still very experimental," she said.