Challenge guide

Last updated on March 15, 2021

PDF version available (1,801kb)
  • What is Impact Canada

    Impact Canada, launched in the fall of 2017, drives public sector innovation by supporting the implementation of high-priority programs, projects and services designed to improve outcomes for citizens. It is a vehicle whereby the Government of Canada can test innovations and generate evidence of which efforts work best to create greater public value in areas of high priority.

    Led out of the Privy Council Office of Canada, Impact Canada hosts a Centre of Expertise with a small team of subject matter and technical experts that support the co-creation and implementation of innovative approaches. It is part of a growing international trend to have dedicated organizations focused on improving outcomes at the centre of government. It champions the application of outcomes- based approaches using innovation methods such as Challenges, Behavioural Science, and Pay-For-Success Funding.

    Impact Canada provides the first systematic solution for the Government of Canada to allocate its funding to paying on outcomes (i.e. using payments contingent on results achieved), as opposed to only paying for inputs or activities. This has led to an opening up of inventive approaches, where in three years the Impact Canada portfolio has grown to over $720 million of outcomes-based funding programs (as of March 2020) and includes a significant number of behavioural science projects and trials.

    Federal partners under Impact Canada have also taken significant steps to enhance their internal capacity to implement and deliver innovative projects, resulting in a unique model that combines both central and distributed capabilities to lead projects across different contexts. These efforts are leading to a growing community of public sector innovators who are adept at both the theory and practical elements of implementing outcomes-based projects in real-world settings.


    At Impact Canada, we tackle some of Canada’s biggest challenges.

    Like: Driving new solutions in clean technology, Building smarter cities and communities, Helping families save for education, Supporting indigenous innovation, and Addressing the opioid crisis.

    These challenges are hard.

    But we think that our relentless focus on outcomes will lead us to better results for Canadians.

    So what makes us different from traditional government programs?

    We’re part of a global movement using modern methods like: Challenge Prizes, Behavioural Insights, and Pay for Success funding models

    These methods focus our efforts on what it is we’re trying to achieve, while at the same time designing smarter processes with less red tape.

    It requires us to work differently and to develop new partnerships across government, not-for-profit and private sectors.

    Together, we work to gain an in-depth understanding of the problem we’re addressing before choosing the right path to lead us to measurable results.

    Our methods have already brought together non-traditional players and partnerships and we’re excited about some amazing new solutions….

    Solutions that are being tested and nurtured right now.

    Working with our partners, we question how things have traditionally been done, and look for new ways to address our biggest problems.

    Together, we can bring exciting ideas to reality and shape a better future or all Canadians.

  • Purpose of this guide

    The purpose of this practitioner’s guide is to provide a better understanding of how challenges are currently being designed and implemented in a Canadian government context based on a sound methodology. This document is part of a series of information products published by Impact Canada intended to explain and contextualize innovative approaches including case studies, blog posts and practitioners’ guides. The first section of the guide explains what challenges are and outlines their benefits from a public policy context. The second section describes the enabling mechanisms and features of the Impact Canada model. The final section provides an in-depth description of the five phases of designing and implementing an Impact Canada challenge.

    While this guide provides a comprehensive overview of Impact Canada challenges, the methods are as much an art as a science. Future iterations of this guide will include new insights as the Impact Canada approach continues to evolve and as new challenge-based projects emerge from which lessons can be drawn.

  • Table of contents

  • Acknowledgements


    The content of this guide and the development of the Impact Canada challenge methodology draw heavily from the guidance that the Nesta Challenges team has provided to the Impact Canada Centre of Expertise in the Privy Council Office.

    Through a collaborative partnership that began in 2017 between Nesta and the Government of Canada, federal public officials have benefited significantly from Nesta’s advice, training, mentoring, and expertise in what is a relatively new policy area in a Canadian context. Nesta has been actively engaged in supporting and providing expert advice to support many of challenges delivered under Impact Canada.

    Of note, Nesta Challenges has published a Practice Guide (2019). Inspired by this work, the Impact Canada Centre of Expertise, in collaboration with its partners across federal organizations, sought to create a guide to provide a customized overview on how challenge methods are being applied in a Canadian public policy context.

    Where not referenced specifically, any similarities in language or style between the Impact Canada Challenge Guide and the Nesta Challenges Practice Guide (2019) or other international reports on challenges are not intentional.

    Impact Canada’s Federal Partners

    The creation of this guide would not have been possible without the early partners of Impact Canada from various federal organizations. Being able to draw on real-world challenges focused on improving social, economic, and environmental outcomes has allowed this guide to use case examples to animate the methods and tools it outlines. These delivery partners have also provided helpful feedback to shape the policy approach taken by Impact Canada in support of continuous improvement.

    Consulted Federal Organizations:

    • Agriculture and Agri-Food Canada
    • Canada Mortgage and Housing Corporation
    • Finance Canada
    • Health Canada
    • Infrastructure Canada
    • Indigenous Services Canada
    • Natural Resources Canada
    • Privy Council Office
    • Treasury Board Secretariat