Using ‘capitals thinking’ to build a better Canada

To build a better Canada, we need to acknowledge and invest in people or human capital, stronger systems of social capital, natural capital and digital capital, Jeremiah Hurley says.

Capital usually refers to money or physical infrastructure, but there are other forms of capital that contribute to the wealth of society — ones that you can’t exactly deposit at the bank or reach out and touch.

In what is now recognized as “capitals thinking”, investment decisions take into account a full set of “capitals”.

These include human capital (people’s health, skills, knowledge, abilities), social capital (infrastructure that supports organizational networks and social relationships), natural capital (the health and diversity of the natural world), and digital capital (institutions and technological infrastructure for a digital society).

Jeremiah Hurley

To build a better Canada, we need to acknowledge these capitals and invest in them just as we invest in traditional produced capital, says Jeremiah Hurley, professor of economics and Dean of Social Sciences at McMaster.

In his Future of Canada Project Canadian Capitals Hub: Public and Social Investment for a Flourishing Canada, Hurley and his team sought to better understand how this full set of capitals interact and how, when invested in wisely, they could play a key role in bettering Canada’s future.

“Broad-based investment across multiple types of capitals is imperative for Canada as we look to our future,” says Hurley.

“With a deepening climate crisis, new types of health and biological threats and digital media permeating all facets of society, the redefining of our investment patterns is crucial in tackling these issues.”

Why investing in a full set of capitals is important for Canada

To remain economically competitive in a highly global society, Hurley argues that it is crucial for Canada to shift focus from traditional investment patterns and adopt a new policy approach informed by capitals thinking.

“COVID-19 exposed how the Canadian government’s traditional approach to capital investment is problematic,” says Hurley. “Had the government invested more in public health and social infrastructure — and saw these as valuable assets to Canadian society — they could have mitigated the impact of the pandemic.”

While some countries such as the U.K. and New Zealand are further along in adopting this approach, this idea is relatively new to Canada and there isn’t a large body of research to support the concept.

“Right now in Canada, social investments are treated differently than, say, physical investments.

“If you think of a highway as a necessary investment for people to get to work or school, why can’t something like a needle exchange be viewed as enabling some to pursue employment or education, which are ultimately the same outcomes?”

Inspired by social finance work he did in partnership with the McConnell Foundation and Community Foundations of Canada, Hurley wanted to continue reorienting the conversation around investing and provide additional evidence as to why a more diverse investment approach is necessary to ensure Canada’s future success.

“Receiving support from the Future of Canada Project at McMaster was critical in allowing us to step back and take a deeper and broader look at how all these pieces fit together and think about how we might try and move forward with an agenda in this area,” he says.

What needs to be done

Through the work enabled by this project, Hurley and his research team identified three themes that need to be addressed to advance this new approach to investment: measurement, the interconnectedness of capitals and the importance of digital capital.


For people to see value in investing in a diverse set of capitals, they must be able to see the payoff for doing so.

“The way to make the value of investing in these capitals more visible is to document the benefits of those investments” says Hurley. “That way, they become a thing that policymakers in both the public and private sectors can focus on.”

By measuring the benefits and costs of investments (and that doesn’t always mean dollar terms), it is easier to understand how one might invest in these diverse capitals and receive a high return. Also, if the stock of each capital is documented and incorporated into public and private documents, such as financial reports and performance reports, it becomes easier to grasp the value of these capitals.

When Canadians can see the benefits of investing this way, they will be more likely to adopt this mindset.

The interconnectedness of capitals

While there has been interest and research into the individual capitals mentioned, there is little research on how these capitals influence one another.

“This siloed approach misses critical opportunities to advance multiple agendas simultaneously,” says Hurley. “In addition, investments made in isolation aren’t as likely to achieve their full potential.”

Strategic investment that recognizes the interactions across the capitals can also reduce competition among them for limited funds — this way, an investment in one capital could benefit another.

Digital capital in Canada 

It has become increasingly important that citizens have access to technology and possess digital literacy skills, and that Canada have effective regulatory structures and digital institutions.

Because digital capital is the newest and perhaps least understood capital, policy pertaining to it is particularly important to the future success of Canada.

A case study of digital capital and the economy, undertaken as part of this work, highlights a number of challenges widespread digitalization presents to the economy. These include making it more challenging to achieve inclusive growth, and the international nature of many elements of digital capital —like the fact that the internet doesn’t reside in one particular place— making policy responses challenging.

But the evidence from this research suggests that challenges can be tackled as long as Canada acts quickly and views digital capital as an area to focus on and invest in.

Making it mainstream

A key component of this project is to find ways to share the capitals thinking concepts with broader audiences.

In 2021, an intersession course “Building a Better Canada” asked students to consider what it means to invest in various capitals has and what the policy implications could be.

“Developing a course seemed like a great context in which to bring students into these discussions and test some of these ideas,” says Hurley.

In addition to the course, Hurley and his team developed a series of educational videos that break down the complexity of each capital. These easy-to-digest videos are available to the public on YouTube.

And in an effort to spread this research across Canada and beyond, Hurley is collaborating with Capitals Hub Canada — a coalition of stakeholders working together to support organizations across the country to achieve a more comprehensive understanding of the capitals approach.

“If we can convince Canadians to take on this new approach to investment, we will be able to create an economically, socially and naturally flourishing Canada that enables all Canadians to achieve a basic level of well-being into the future,” says Hurley.

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