On the occasion of The Philanthropist Journal’s 50th year of publishing, we look back at 50 notable moments, movements, and trends that have affected the non-profit and charitable sector in Canada. Part 3 focuses on the long road to improving sector–government relations.
The history of Canada’s charitable and non-profit sector over the past 50 years has been marked by pivotal moments that have changed the way society views the sector and the way it views itself. We are arguably living through such a moment right now. This period has also seen the sector drive important mindset change and policy action on issues that affect the lives of Canadians.
As we look back on 50 years of publishing, we’ve compiled 50 milestones that together create a snapshot of a fast-growing sector moving into maturity, developing a clearer idea of itself and its role in Canadian society, navigating turbulent and often adversarial relationships with government, fighting for the funds and licence to fully come into its own, and able to fuel progressive shifts in spite of significant obstacles.
This list was developed in consultation with our editorial advisory committee, board of directors, and sector colleagues, and we present it broken out into four broad categories: movements and shifts, advocacy and systems change, funding and giving trends, and government-sector relations.
Of course, these aren’t the only important moments of the past 50 years; lists must inevitably leave things out, and category boundaries are easily blurred. As we conclude our list, we invite you to share the milestones that come to mind when you think back over the past 50 years. You can weigh in on social media or send us an email.
(Read part 1 and part 2 of this series.)
Government–sector relations
Timeline:
- 1974: National Advisory Council on Voluntary Action (powered by gov’t)
- 1974: Founding of Coalition of National Voluntary Organizations (NVO) (powered by gov’t)
- 1977: People in Action, National Advisory Council on Voluntary Action report
- 1981: Founding of Canadian Centre for Philanthropy (powered by sector)
- 1991: NVO faces massive budget cuts
- 1995: Major federal budget cuts impact sector
- 1995: Founding of Voluntary Sector Roundtable (powered by sector)
- 1997: Broadbent Panel on Accountability and Governance in the Voluntary Sector (powered by sector)
- 1998: Chrétien government creates Voluntary Sector Task Force at Privy Council Office (powered by government)
- 1999: Broadbent Panel’s report: Building on Strength: Improving Governance and Accountability in Canada’s Voluntary Sector
- 1999: Working Together: three joint tables over four months lead to 26 recommendations for improving the relationship (powered jointly)
- 2000: Voluntary Sector Initiative (VSI) launches with a coordinating committee and six joint tables: Accord, Awareness, Capacity, Information Management and Technology, Regulatory, and National Volunteerism Initiative, as well as two other groups focused on funding and advocacy
- 2001: Signing of the Accord Between the Government of Canada and the Voluntary Sector
- 2005: VSI work concludes
39. Founding of the National Advisory Council on Voluntary Action and the Coalition of National Voluntary Organizations
The growth of the voluntary sector through the 1960s and 1970s prompts the Secretary of State to create the National Advisory Council on Voluntary Action in 1974 to provide recommendations on how to improve relations between the government and the voluntary sector and increase sector capacity.
However, as Peter Elson notes in “A Short History of Voluntary Sector–Government Relations in Canada,” while the government encourages the formation of the council, bureaucratic red tape and challenges in accessing information hampers its work.
In 1977, the council issues the People in Action report, which identifies several challenges facing the sector, including the government’s narrow definitions of charitable activities and organizations, problematic governmental funding mechanisms, and a lack of access to information. The council makes more than 80 recommendations, most of which are directed toward the federal government.
At the same time as it establishes the National Advisory Council on Voluntary Action, the government also encourages several large charities, including the United Way, the Anglican Church, and the Canadian Cancer Society, to establish the Coalition of National Voluntary Organizations (NVO).
The only national organization representing the sector at the time, the NVO is funded by the federal government through the Voluntary Action Program. It is a non-formal organization that meets regularly but never incorporates.
Over its 15 years of existence, it collaborates with the Canadian Centre for Philanthropy (CCP) and pushes two main priorities: the elimination of the then-universal $100 individual charitable tax deduction, which it wants to replace with a 50% charitable tax credit on donations, and changes to regulations that governed charity-led advocacy activities.
Challenged in its advocacy by its non-formal structure, and weakened by successive funding challenges and cuts in the early 1990s, the NVO dissolves in 2003 and works with the CCP to create Imagine Canada.
40. The Program Review Budget slashes non-profit funding
In 1995, the federal government makes drastic budget cuts to social programs during a period of retrenchment when unemployment is rising and more people need the support these programs offer.
The government creates the Canada Health and Social Transfer (CHST) through the merger of two previous transfers to allocate equal per capita funding to provincial and territorial governments for healthcare, post-secondary education, social assistance, and social services. This restructuring and the accompanying funding cuts extend to non-profits. Often, service contracts replace grants.
The ongoing and worsening cuts to the sector’s infrastructure create a low point in government and non-profit relations and become a rallying cry for the sector to recognize itself as such and for non-profits to collaborate in lobbying government on behalf of the sector.
41. Warming government–sector relationships
Following the 1995 cuts, the sector takes a new crack at breaking what Susan D. Phillips calls the reigning climate of “mutual isolation, suspicion and outright antagonism” by establishing the Voluntary Sector Roundtable (VSR), an informal coalition whose purpose is to advocate for the sector and improve relations with the federal government. Unlike the NVO, the VSR is funded by the sector and private foundations, not by government.
In 1997, the VSR creates the Panel on Accountability and Governance in the Voluntary Sector, chaired by Ed Broadbent. The panel’s 1999 report, Building on Strength: Improving Governance and Accountability in Canada’s Voluntary Sector, pushes for, among other things, a review by Parliament of the definition of charity and the development of a compact of good practice between the sector and federal and provincial governments. Several of its recommendations pick up from those in the National Advisory Council on Voluntary Action’s 1977 People in Action report.
The same year, Jean Chrétien’s Liberals win re-election, and the new government establishes the Voluntary Sector Task Force, which is housed in the Privy Council Office.
In 1999, the task force proposes three joint government–sector tables to work on recommendations for building a better relationship, strengthening capacity, and improving regulation. The joint tables collaborate over four months to produce a report, Working Together, that highlights many of the issues raised in the Broadbent report and again calls for an accord to define and govern sector–government relations.
In 2000, the federal government responds to Working Together with the creation of the Voluntary Sector Initiative (VSI), a five-year, $94.6-million, government-funded initiative to strengthen the relationship between the government and the sector. Patrick Johnston, former president of the CCP, calls it “the most comprehensive and ambitious attempt ever made to strengthen the relationship between Canada’s voluntary sector and the federal government.”
The VSI funds the work of a coordinating committee and six joint tables: Accord, Awareness, Capacity, Information Management and Technology, Regulatory, and National Volunteerism Initiative. A point of contention is the government’s refusal to address funding and advocacy through these joint tables. In response, separate sector-only working groups on funding and advocacy are created, funded by the voluntary sector.
The VSI undertakes two phases of work. In the first two years to 2002, the joint tables complete their work. A signature achievement is the signing of the Accord Between the Government of Canada and the Voluntary Sector in December 2001 at a public ceremony hosted by Prime Minister Chrétien.
The accord is a statement of principles that, as Phillips writes, outlines “a framework and processes for a mutually desired relationship, including a shared vision of civil society and a desire for collaboration and partnership.” It is modelled after the UK’s 1998 “Compact” agreement.
Two codes of good practice accompany the accord: A Code of Good Practice on Policy Dialogue, which establishes a framework for government–sector dialogue and outlines ways the sector can contribute its expertise and experience to policy and program development; and A Code of Good Practice on Funding, developed to guide funding policies and practices, which calls for predictable, multi-year funding that acknowledges core operating costs.
Between November 2002 and March 2005, the VSI introduces a Canada Volunteerism Initiative to encourage volunteering and launches the Human Resources Sector Council for the Voluntary Sector and the Task Force on Community Investments.
Funding for the VSI ends after five years. While it had a significant impact, the VSI falls short of the vision Mel Cappe, then clerk of the Privy Council, imagined in 1999: that the initiative’s efforts would be so successful that “involving the voluntary sector in policy dialogue will be so deeply embedded that no one will think twice about it.”
In 2006, many of the lead umbrella organizations of the sector regroup to form the Voluntary Sector Forum (VSF), which continues to focus on bringing the Accord Between the Government of Canada and the Voluntary Sector and codes of good practice to life, and building capacity across the sector. The VSF lives on today as the Canadian Federation of Voluntary Sector Networks.
Read Patrick Johnson’s “A Retrospective Look at the Voluntary Sector Initiative” and Susan D. Phillips’s “From Charity to Clarity” for more.
42. Canada Survey on Giving, Volunteering, and Participating
In 1997, in response to requests from the voluntary sector, the federal government spends $10 million to fund and deliver Canada’s first Survey on Giving, Volunteering, and Participating.
Nineteen thousand Canadians take the survey, giving the country its first national snapshot on charitable giving and volunteering. Eighty percent of respondents say they made direct financial contributions to a charity in 1997 and 30% had volunteered, contributing a total of $5.8 billion in cash and time. The survey also finds that a third of donors accounted for 86% of all donations made in that year, and a third of volunteers contributed 81% of all volunteer hours.
The survey has been administered every three to five years since, enabling the sector to observe trends over time.
43. Knowledge grows around human resources and labour standards in the sector
In 2003, the Human Resources Council for the Voluntary and Nonprofit Sector is incorporated to provide leadership on issues related to the non-profit labour force.
In 2009, the HR Council publishes Toward a Labour Force Strategy for Canada’s Voluntary and Non-Profit Sector, marking the first comprehensive, evidence-based look at the characteristics and HR issues of this part of Canada’s labour force in Canada.
The HR Council loses funding and ceases operations in 2013.
In June 2019, a report of the Special Senate Committee on the Charitable Sector, called Catalyst for Change, recommends reinstating the HR Council. The next year, Community Foundations of Canada, which managed the assets of the council until 2018, and Imagine Canada announce that resources from the former HR Council for the Voluntary and Non-Profit Sector will be relaunched as a resource for sector leaders to recruit and retain talented people. In 2021, Imagine Canada launches the HR Intervals website.
44. First National Survey of Nonprofit and Voluntary Organizations
In 2003, the National Survey of Nonprofit and Voluntary Organizations (NSNVO), funded through the VSI, provides the first comprehensive look at the country’s voluntary sector.
Developed by the Canadian Centre for Philanthropy and others in partnership with Statistics Canada, the survey finds 161,000 registered charities and non-profits operating in Canada, the majority focused on sports and recreation, religion, and social services. Together, they posted $112 billion in revenues in 2003, employed two million Canadians, and benefited from two billion volunteer hours. The findings are published in the Cornerstones of Community report.
The data collected is critical to allowing the sector to better understand its scope, impact, and challenges. Several satellite accounts follow. In 2016, Human Resources and Skills Development Canada explores the feasibility of incorporating the NSNVO into a broader National Survey of Community Sector Organizations, but, whether because of cost or complexity, the survey is never run and the key data collected by the NSNVO has never been updated.
45. Evolution of relations between non-profits and provincial governments
The VSI and the 2005 National Survey of Voluntary and Nonprofit Organizations begin to raise awareness among provincial governments of the size and scope of the third sector in their jurisdictions, raising questions about the nature and management of sector–government relationships. By 2011, seven of 10 provinces have a minister or deputy minister assigned to the third sector relationship.
The 2000s also see non-profits and charities increasingly organizing into geographic networks and associations, often in response to policy and funding changes that affect the sector. For example, the Ontario Nonprofit Network (ONN) begins as a group of sector leaders in Ontario mobilizing against proposed changes to the Ontario Non-profit Corporations Act (Bill 65). The network formally incorporates in 2014 and, in 2021, has a big policy win on its founding advocacy issue with the passing of the Ontario Not-for-Profit Corporations Act (see #50, below). Quebec’s Chantier de l’économie sociale and Manitoba’s Federation of Non-profit and Voluntary Organizations are also early examples of formalized provincial networks and associations.
There are now provincial associations in eight provinces and many regional and issue-based non-profit networks and associations.
46. The threat of sector salary caps
In 2009, the press reports that the president of SickKids Foundation was paid $2.7 million as part of a severance package. The news stokes the narrative that recipients of charity are being shortchanged. Later the same year, Liberal MP Albina Guarnieri introduces a private member’s bill that proposes to amend the Income Tax Act to revoke the registration of any charity or foundation that pays staff salaries in excess of $250,000. The bill passes three readings in the House of Commons but dies in the Senate after Parliament is dissolved and an election is called.
Critics in the sector note that the proposed reporting and accountability requirements exceed those of other organizations and would impose a financial burden on non-profit organizations. Supporters of the bill, which would have been the first of its kind in the world, say it would encourage public trust in charitable operations.
47. Senate charities committee tables its final report
In January 2018, the Senate of Canada forms the Special Senate Committee on the Charitable Sector to examine the impact of the voluntary sector and the effect of federal and provincial laws and policies governing charities and non-profits. The committee, chaired by Terry Mercer with Ratna Omidvar as deputy chair, hears from close to 1,000 organizations and individuals through public hearings, written briefs, and online submissions.
In June 2019, the committee tables its final report, Catalyst for Change: A Roadmap to a Stronger Charitable Sector, which makes 42 recommendations to strengthen the sector.
The government and Minister of National Revenue Diane LeBouthillier respond positively to many of the report’s recommendations, but action is slow: at the time of writing, only a handful of recommendations are in the process of being implemented. (Read the Pemsel Case Foundation’s response to the report.)
48. The creation of the Advisory Committee on the Charitable Sector
In August 2019, the federal government commits to a new permanent advisory body made up of people from across the sector to advise the ministers of revenue and finance on the regulation of the charitable sector. This is the first time since the VSI period ending in 2005 that a permanent consultative body has been set up and funded by government to help improve the regulatory relationship with the charitable sector.
The first group of Advisory Committee on the Charitable Sector members works over two years to produce three reports, with many recommendations for improving the federal–sector relationship around regulation, data collection, and the creation of a home in government.
After more than 15 years, the sector has come full circle, with a continuing effort to improve relations with the government for the 21st century.
(By Hilary Pearson)
49. Catholic Church fails to pay residential school settlement
In 2021, it comes to light that the Corporation of Catholic Entities Party to the Indian Residential Schools Settlement (CCEPIRSS), a group representing Canadian Catholic Church entities, has not remitted the complete restitution mandated by the 2006 Indian Residential School Settlement Agreement (IRSSA).
The Catholic Church ran 60% of residential schools in Canada. As part of the IRSSA, the court ordered the CCEPIRSS to provide millions of dollars in restitution through a mix of cash and in-kind payments. Eighty percent of the cash settlement was to be paid to the Aboriginal Healing Foundation (AHF).
But according to court documents, the CCEPIRSS spent more than a quarter of the $29 million cash it owed on legal and administrative fees instead of on payments to the AHF. The CCEPIRSS also failed to meet other obligations, raising less than a fifth of the $25 million it promised to raise through a national fundraising campaign and failing to file audited financial statements until 2012, five years into the agreement.
The Catholic Church is the largest charity in Canada, with $4.1 billion in net assets. It raised $886 million in 2019 alone. In 2015, after a miscommunication between Church and government lawyers, and while the CCEPIRSS is still more than $21 million short of its obligations, a judge releases the group from its unmet obligations if it agrees to pay $1.2 million in restitution.
50. ONCA is proclaimed into force
The Ontario Not-for-Profit Corporations Act, 2010 (ONCA), is proclaimed into force in October 2021. ONCA replaces the Corporations Act (Ontario) in regulating non-profit corporations and provides a similar regulatory framework as the act governing for-profit corporations, the Business Corporations Act (Ontario). ONCA, which governs provincially incorporated non-profits, marks a shift in the governance of non-profit corporations toward a model premised on “corporate good governance.” This includes measures to increase accountability and, of particular importance to the sector, clarifies that commercial activities that support corporations’ non-for-profit purposes are permitted.
The last 50 years have been a turbulent and transformative time in the non-profit and charitable sector, marked by significant shifts in the sector’s role in Canadian society, its relationship with government, and its perception of itself. Today there are an estimated 86,000 registered charities and 85,000 non-profit organizations in Canada, generating 7% of Canada’s gross domestic product, employing more than two million people, and driving change in lives, communities, and systems from coast to coast to coast.
The 50 moments highlighted in this series are some of the many milestones of the past half-century that have made the sector what it is today. We’d like to thank everyone who chimed in to share other notable moments, and we welcome your continued suggestions! We are taking note of your feedback and will consider how best to share it with readers.
The final instalment of the series comes on the heels of the 2022 federal budget, a budget that acknowledged and responded to sector priorities with an announced loosening of direction-and-control requirements, a mandated increase to the disbursement quota, and several new investments in under-supported parts of the sector – changes many advocates have been fighting for for years.
We don’t know what’s in store for the next 50 years, but The Philanthropist Journal will be there to provide insight and analysis, create a point of connection and conversation, and lead discussions on the evolving role of the sector and philanthropy now and in the future.
