Charities, the economy and the 2015 federal election

Monday, September 28, 2015
Chief Economist Commentary
Public Policy

It is general election time in Canada and economics matter to leaders and parties because economics matter to voters. How a government has performed with respect to job creation, incomes and inflation is a key element for Canadians in judging the performance of a government and the willingness of Canadians to see it continue in office. How each party’s platform and campaign propose to manage the economy to achieve sustainable prosperity are key issues in determining which party Canadians will embrace on Election Day.

Economics matters in a fundamental way to charities too. Donations move in lockstep with economic performance. The more incomes grow, the more charities will be able to raise. The same holds true for other elements of charitable income – revenue from governments, revenue from sales of goods and services and memberships – are all influenced strongly by the growth or lack of it on the overall economy. When it comes to economics, charities are in the same position as a lot of Canadians, worrying about the economy and about the proposals of the various parties for managing the economy well.

Conversely, and in a way that is as yet not fully appreciated by political parties, the way charities perform is important to Canada’s economic success and sustainable prosperity. Over the last decade or so, charities have grown faster than gross domestic product in Canada contributing significantly to Canada’s solid economic performance in a turbulent global economy.  Today, the charitable sector broadly defined accounts for about 13% of the total workforce in Canada and about 8.1 % of gross domestic product. And the sector delivers the social and cultural services that an aging and increasingly diverse population wants and needs. The charitable sector is jobs and growth and value in action.

Where is the charitable sector in party platforms this election?

This relationship of charities to the core economic values of Canadians has not been featured as an issue in the election or in the party platforms to date. In part, this is not surprising. The platforms are quite general in nature with the only in-depth mention of specific sectors being energy (largely from an environmental perspective) and housing. In part, however, this gap results from a lack of awareness at the policy and platform making level. There is an ongoing perception that charities exist somehow outside the economy as a whole and a corresponding under appreciation of the role that charities play in sustainable prosperity.

This is more than a perceptual problem. It results in promises and proposals that focus, for example, on areas (wrongly) felt more vital to the economy than the charitable sector. There is nothing wrong with creative policy proposals paying attention to, for example, science and technology and engineering and mathematics (STEM); or to the growth of the knowledge-based economy as a whole; or to infrastructure. These are genuinely important and worthy of inclusion in the various party platforms. But the charitable sector has a proven track record of jobs and growth. Lack of awareness can lead to exclusion from some imaginative and valuable policy proposals.

Correcting ingrained misperceptions is a tough business. It requires a good story, backed by solid evidence (which charities have in abundance) as well as patience and persistence. But there is no better time than now when policy agendas and platforms are being formulated, when parties are uniquely open to voters and to new ideas for charities to creatively assert themselves in the electoral process.

 

Related Reading

Imagine Canada Election Hub

Highlighting the issues charities and nonprofits are raising for the 2015 federal election. Also features policy commitments that address the issues of importance to the sector as they are made by parties and candidates.

Charities in Canada as an Economic Sector

This discussion paper is an invitation to Canadians, governments, businesses and communities to not only think of charities as purpose driven but also as an essential component driving Canada’s economy.

 

About the Author

Chief Economist for Canada’s Charitable and Nonprofit Sector, Brian Emmett is tasked with measuring the impact of the sector and bringing economic issues facing charities and nonprofits to the forefront of public policy decision makers. Mr. Emmett is an economics graduate of the University of Western Ontario and the University of Essex in England, and has enjoyed a long and distinguished public service career. He was Canada’s first Commissioner of the Environment and Sustainable Development in the late 1990s and worked extensively on Canada’s Green Plan. He also served as Vice-President of the Canadian International Development Agency (CIDA) in the early 2000s and has been an Assistant Deputy Minister in a number of federal government departments.

The office of the Chief Economist for Canada’s Charitable and Nonprofit Sector is made possible through funding received by The Muttart Foundation, Ontario Trillium Foundation – an agency of the Government of Ontario, Vancouver Foundation, an anonymous donor, and the PricewaterhouseCoopers Canada Foundation.

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