What does the charitable sector have to offer? A response to the Federal Budget

Thursday, March 24, 2016
Chief Economist Commentary
Notes from the CEO
Sector News
Public Policy
Government Relations
Brian Emmett & Bruce MacDonald

As Canadian governments search for creative policy responses to the current difficulties of the economy, we should remember that there is no better investment than supporting and sustaining Canada’s vibrant and growing charitable sector – a win-win sector which delivers the social value Canadians want while at the same time creating quality jobs and contributing to economic growth. At the federal level, while Finance Minister Morneau has recognized the importance of investing in Canadian families, the vital partnership with the charitable sector is largely absent from the federal government’s economic blueprint.

The decision not to proceed with the income tax exemption in respect to capital gains of the donation of real estate and shares of private corporations sends a troubling message related to the creation of a regulatory environment that will enable charities to thrive, fulfill their missions and continue to be a powerful contributor to the economic well-being of this country.

Canadians want an economy that is productive, growing and creating meaningful jobs. An economy that contributes to a society where government and charities strive to provide high levels of social services, foster social justice and where environmental quality is an ongoing high priority. Canadians recognize that it will take hard work and good policy to continue to succeed in a world which is even more integrated, where success is increasingly knowledge based and where the skills and talent and creativity of Canada’s people will be our most important assets.

This Canada requires a dynamic, creative and, above all, sustainable charitable sector.

Canadians’ confidence in, and reliance on, the Canadian charitable sector is reflected in a sector that has grown more rapidly than the economy as a whole over the last decade. The sector today provides an array of services from health care, assistance to seniors, support for immigrants and refugees, to homelessness and food banks, advocacy for social justice, environmental quality, arts, culture and recreation among many others.

Less well appreciated, perhaps, is the role of charities as a dynamic and creative part of the growing knowledge and service economy, contributing to jobs and growth and innovation. Today, charities and nonprofits account for roughly 8% of GDP and employ over 2 million people. And the contribution the sector can make will continue to grow more rapidly than Canada’s economy and population as a whole.

For one thing, Canadians are aging and demanding more social and health services. Society is becoming more diverse and a significant proportion of population growth will be made up by immigration. Indigenous peoples are seeking to create healthy, productive communities. Long term, the economy is expected to grow somewhat more slowly than it has in the past, placing a premium on the creation of high value jobs for idealistic young people entering the labour force with an enviable package of skills and a desire to make a difference in the world.

Times are tough. There is growing pressure on donors, governments and businesses on which charities depend for their funding. As we develop policies let’s be sure to keep an eye on building the kind of future our citizens want, one that includes a strong, vibrant charitable sector. Let’s make win-win investments in this high value sector. 

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