Noname2 [CC BY-SA 2.5], via Wikimedia Commons

December 13, 2019; Chronicle Herald

Most of the dust has settled following the 43rd Canadian general election, an unusual affair in which the federal Liberal party of Prime Minister Justine Trudeau dropped 20 seats but remains in power with a minority government (157 of 338).

While the Conservative party of Andrew Scheer gained 26 seats (total 121) and won the popular vote, expectations were much higher, and Scheer has already announced his resignation. From out of nowhere, despite running candidates in only one province and entering the election with just 10 seats, the Bloc Quebecois is now the third party with 32 seats, soaring past the New Democratic Party which has dropped down to fourth.

In pre-election days, NPQ North was ready to observe a battle that seemed destined to be fought over hard core policy differences related to health, pharmacare [a proposal to add a prescription drug benefit to Canada’s single-payer health insurance system], environment, pipelines, and immigration, to name a few of the presumed leading issues. Policy discussions were not absent from the campaign (which also featured surprising revelations about brownface and citizenship), but it’s also unclear if any of it significantly drove the vote.

Westerners clearly felt alienated over economic and energy issues and eradicated the Liberals from Alberta and Saskatchewan. In ballot-rich Ontario—121 of the 338 members of parliament hail from that province—voters were not ready to embrace Andrew Scheer (with some unease clearly owing to the provincial politics of Premier Doug Ford) and many Quebec voters rallied to the Bloc in support of a popular provincial secularism law (Bill 21) and the broader issue of Quebec’s autonomy. And more broadly, there was a distinct rural/urban divide.

For Canada’s nonprofit sector, hopeful that some of their key issues might take center stage, it was mostly not to be, even though, as Imagine Canada has noted, the sector employs two million Canadians and, according to one estimate, is responsible for 8.1 percent of gross domestic product. However, as covered in October’s NPQ North, confusion and controversy about the rules of “political advertising” (rooted mainly but not exclusively in climate change and environmental issues) have fueled a spirit of determination and collaboration for sectoral reforms.

In the aftermath of this chilling effect, the country’s 170,000 nonprofits (about 50 percent of them registered charities) are seeking much more than electoral reform and clarifications about their role as policy advocates—they want a regulatory home base and a government partnership that involves more than a one-way dictation about the rules and how to follow them.

As discussed back in July, the Senate of Canada’s 170-page report (and 42 recommendations) in Catalyst for Change: A Roadmap to a Stronger Charitable Sector, has been embraced by umbrella groups like Imagine Canada and the Ontario Nonprofit Network, and, along with the Senate committee members, there seems to be a growing determination for changes to some very archaic structures.

Senators Terry Mercer and Ratna Omidvar, two of the major contributors to the report, went public in September with some of the report’s findings and key issues.

We must…pay more attention to how we define charity and how this sector is regulated. Registered charities still need to fit within one of four categories of charitable purpose: the relief of poverty, the advancement of education, the advancement of religion or the provision of other services that benefit a community. These categories come from a British common law definition that hasn’t been updated since 1891…perhaps one of the more crucial recommendations is for the government to create a dedicated secretariat at the Department of Innovation, Science and Economic Development on the charitable and nonprofit sector.

On the latter issue, confusion over real and perceived barriers to nonprofit advocacy during the election served to strengthen the call for some type of home base for the charitable sector. Professor John D. Cameron of Dalhousie University has made a convincing case that regulatory confusion created a “silencing effect” with only 147 organizations taking the necessary steps to spend $500 or more on advertising during the election. Cameron says only 17 environmental organizations took this step, despite climate change being a major election issue.

Trudeau’s government made significant changes to the CRA [Canada Revenue Agency] regulations in 2019 that allow charities to engage much more freely in public policy debates….Staff with many Canadian civil society groups have reported that their organizations did not speak out on public policy issues during the election campaign for fear they’d be penalized by Elections Canada or the CRA.

Seizing the momentum, Imagine Canada has seized upon Catalyst for Change Recommendation 22, publishing a succinct blog that details some of the absurdities of nonprofit regulation in this country.

Charities and nonprofits may have relationships with ministries related to their mission; for example, health charities may meet with the Health Minister to advocate for their cause. However, there is no federal department or agency that is responsible for ensuring the wellbeing of the sector or addressing issues that affect it…despite the fact that the sector represents more than eight percent of Canada’s GDP and employs approximately 2 million people—in addition to its incredible social impact. The Canada Revenue Agency determines whether organizations are eligible for charitable status and whether they comply with the Income Tax Act…but doesn’t take on a role in creating policy solutions to address issues that the sector is facing.

The accompanying brief, Towards a “Home In Government” for the Charitable and Nonprofit Sector, outlines the problems created by a lack of coordination between government and nonprofits—including some blatant unfairness in how the sector is treated differently from the for-profit world.

Grants and contributions—even where an organization competes competitively for a contract to provide a service on behalf of the government—generally do not allow charities and nonprofits to recover administrative, organizational, and overhead costs related to service delivery. Private sector entities winning procurement contracts are allowed to incorporate these costs.

In making their case for home in government, the brief summarizes possible rights ways (and wrong ways) of going about it, noting that it “needs to be part of the permanent machinery of government” and recognizing that it must be “cost-effective and relatively easy for the federal government to implement.”

The brief favors one of two leading possibilities: a secretariat within ISED [Innovation, Science and Economic Development Canada] or appointing a senior public servant (at the Assistant Deputy Minister level or higher) to have primary responsibility for the sector.

Neither approach seems to properly honor the sector’s deserved status, but there is wisdom in the “Home in Government” campaign and these relatively straightforward recommendations for making it happen—sector veterans who have seen little progress in their lifetimes understand that unfocused passion is unlikely to deliver results, particular in the environment of a minority government. If there is no progress prior to the next election (on average minority governments in Canada last two years) the Senate report and the momentum for reform will surely be lost.

As Ken Mayhew of the Association of Fundraising Professionals Canada said on this issue, “There’s never been a time when change has been more urgently needed, nor, thanks to the depth and clarity of the Report’s recommendations, a greater opportunity through which to achieve that change.”—Keenan Wellar