Terry M. Mercer
PSG - Nova Scotia (Northend Halifax)
Charities and non-profits have been one of the hardest hit sectors by the COVID-19 pandemic. The demand for services has risen while revenue streams have dried up, as Canadians forgo events and gatherings (and for good reason).
In addition, the crisis has forced the sector to pivot from delivering services in person to delivering services through technology. Some charities, like the YMCA, have been forced to sell facilities to stay above water.
There are pockets of extraordinary need — such as food banks, shelters and mental health services — that the government has recognized in previous announcements, but a multitude of other services that form the backbone of our society are also in distress.
Recently, the government responded to Catalyst for Change: A Roadmap to a Stronger Charitable Sector — the report by the Special Senate Committee on the Charitable Sector — and its many recommendations that would propel the sector to new heights. We were also encouraged to see Budget 2021 pay attention to the advocacy efforts by charities and non-profits, but we would like to see more.
The federal budget announced a temporary $400-million Community Services Recovery Fund, which would be welcome as the sector struggles to survive beyond the recovery. This assistance needs to be rolled out quickly to provide core funding and prioritize small- and medium-sized charities and non-profits.
The proposed extension of wage and rental subsidies, as well as the new Canada Recovery Hiring Program, could also defray some of the fiscal and labour stress on the sector. But it is very important that the charities and non-profits who draw on these programs not be barred from accessing the new recovery fund as well.
The $200-million contribution to the creation of a Black-led Philanthropic Endowment Fund will go a long way to close the gap between the funding of Black-led organizations and the rest of the sector. The government has also recognized the potential for innovation in the sector by proposing to launch the Social Finance Fund and the Investment Readiness Program.
The sector should be encouraged by the budget announcement that the federal government plans to review the annual disbursement quota for philanthropic endeavours. There are many different points of view on this matter and the planned consultation process could help point the way forward.
We also would like to point out that even though the Budget 2021 investments in child care, affordable housing, women’s empowerment and food security may not be directly targeted at charities and non-profits, their impact will have a positive effect on the sector because many charities and non-profits are engaged directly in services in these areas — or work with people who need them.
While we are encouraged by this progress, the budget makes no mention of key priorities that were identified by many in the sector and laid out in the special Senate report.
There has been no formal announcement to create a secretariat for the sector, although the government’s response to the Senate report indicated support for this. Additionally, the government hasn’t indicated whether it will pursue a modernized definition of what is “charitable,” so that we can move away from an outdated Victorian-era definition.
We are disappointed that the government has shied away from amending the language of “own activities” in the Income Tax Act to enable charities to establish equal partnerships with non-charities. We also hope that the government will amend the T1030 forms to mandate a question on board diversity.
Taken as a whole, we are pleased that the charitable sector is finally being taken seriously by the government; however, we still have a long way to go. It seems that the sector is closer to being treated equally to the overall business sector. But the government still must proceed with other much-needed reforms, as noted in the Senate report.
More structural reforms to systems and to the machinery of government are required to further underline the importance of the charitable sector. Canadians are depending on it.
A version of this article appeared in the April 23, 2021 edition of iPolitics.
Note to readers: The Honourable Terry M. Mercer retired from the Senate of Canada in May 2022. Learn more about his work in Parliament.