AFP Canada 2025 Pre-Budget Consultation

AFP Canada sent the letter below outlining our recommendations for Budget 2025 to the Department of Finance. AFP is calling on the federal government to create a secretariat for the charitable sector in Canada and to include this vital sector in tailored government assistance programs in response to the U.S. tariffs. AFP Canada is a leading national voice for fundraising professionals who are vital in advancing charitable work. Formed in 2017, AFP Canada was created to complement AFP Global’s work.

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March 10, 2025

The Honourable Dominic LeBlanc, P.C., M.P.
Minister of Finance and Intergovernmental Affairs
Department of Finance Canada
90 Elgin Street
Ottawa, ON  K1A 0G5

Submitted via e-mail: yourbudget-votrebudget@fin.gc.ca

Re: Budget 2025 Pre-Budget Consultations

Dear Minister Leblanc:

The Association of Fundraising Professionals (AFP) Canada appreciates the opportunity to submit our recommendations for Budget 2025 to the Department of Finance.

In Budget 2025, AFP is calling on the federal government to create a permanent dedicated secretariat for the charitable sector in Canada, and to include the sector in government assistance programs in response to the U.S. tariffs.

Amid the recently announced U.S. tariffs, AFP urges the federal government to take decisive action to bolster Canada’s economic resilience. We call for the creation of a secretariat for the charitable sector in Canada, and the inclusion of this vital sector in tailored government assistance programs in response to the U.S. tariffs.

AFP Canada is a leading national voice for fundraising professionals who are vital in advancing charitable work. The 3,000 AFP members in Canada play a critical role in helping to shape Canadian policy and by raising funds that change lives. They fundraise for organizations large and small, in rural and remote communities as well as towns and major cities across the country. Fundraisers support the arts, culture, shelters, emergency services, healthcare, education, reconciliation with Indigenous Peoples, and social justice, all while contributing over 8% to GDP annually.

AFP members in Canada are part of the larger AFP Global network—the largest community of professional fundraisers in the world. The approximately 26,000 members worldwide raise over $100 billion annually to support thousands of philanthropic causes and organizations across the globe.

Recommendation 1: Create a permanent dedicated secretariat for the charitable sector in Canada.

With the increasing complexity of trade relations with the U.S., concerns about inflation and affordability, a permanent charitable sector secretariat would serve as a crucial advocate and bridge between charities and the federal government. It would empower charities to continue their vital work while also addressing the broader economic and social challenges and ripple effects posed by these new tariffs.

While Canada must mitigate trade tensions, it is equally critical to advance policies that address the sector’s needs, foster its vibrancy, its competitiveness, its growth, and its ability to deliver critical services in communities across the country that strengthen our country’s economy and unlock growth, and build a competitive and productive environment. Designating a secretariat in government for the charitable sector would be the most significant way for the government to understand the needs of the sector, to properly engage the sector in policy development, and to ensure the ability of charities to meet the wide-ranging needs of Canadians today and in the future.

The COVID-19 pandemic had a devastating impact on our sector, stretching our resources and leaving many still struggling to recover. Charities are under greater pressure than ever. Our experience from the pandemic shows that a stronger partnership between the sector and government could have reduced these impacts and accelerated recovery, ensuring the sector’s long-term success. Establishing a dedicated government secretariat could help achieve this goal.

A secretariat would be mandated to ensure that government policies strengthen the nonprofit and charitable sector so it can continue to thrive and play its vital role at the heart of Canadian communities. It would ensure that the charitable sector is considered when new programs are launched, such as targeted relief in response to the tariffs.

Recommendation 2: Include the charitable sector in government assistance programs in response to the economic impact of international trade disputes, specifically the potential U.S. tariffs.

Canadian charities play a vital role in addressing pressing issues, from supporting vulnerable populations to advancing public health, environmental sustainability, and education. However, the increasing uncertainty and the burden of the U.S. tariffs on the economy will make it more difficult for many Canadians and businesses to continue donating to charities across the country, directly impacting essential services that are critical for Canadians and their families.

The new tariffs will have a ripple effect on charities’ fundraising and operations. Feeling the economic impact of the tariffs, not only will Canadians reduce their donations, but they will increasingly turn to our sector for additional support and critical services. Facing increased demand for basic services and fewer resources, charities will struggle to raise funds, making immediate federal relief measures essential. Without government support charities will be forced to close or reduce services with devastating consequences for Canadians and their families.

To ensure that the charitable sector can continue to meet the needs of Canadians, it must be considered when new programs are launched, such as targeted relief in response to the tariffs.

Canadians felt the impact of the government not understanding the magnitude of the sector and neglecting to include it in the Canada Emergency Wage Subsidy Program when it was first announced in response to COVID-19. The pandemic put Canada’s charitable sector in a difficult position—with nearly half of all charities reporting increased demand for services, more than half also experienced a dramatic drop in fundraising due to the cancellation of fundraising campaigns and a decline in individual donations. At the same time, the sector, like many others, had to quickly respond to changing government restrictions while trying to support its workforce and beneficiaries. The harmful exclusion of the charitable sector could have been avoided with a dedicated secretariat.

The Critical Importance of a Secretariat for the Charitable Sector in Canada    

Canada’s charitable sector is instrumental to the country’s economic success and productivity. Representing more than 170,000 organizations, charities and nonprofit employs over 2 million people in Canada.

Fundraising professionals play the important role of ensuring that nonprofits have the resources they need to provide services and support for Canadians. Charitable revenue provided by Canadian households and businesses makes an essential contribution to the sector’s ability to facilitate social change.

Canadians are impacted by the work of the sector nearly every day. Charities and nonprofits supplement government by focusing on some of the biggest problems our country faces today (e.g., poverty, hunger, healthcare, disasters, inequalities). With more than 9.6 million Canadians relying on the sector to help meet their basic needs, the demand for services is growing.

The impact of Canada’s nonprofit sector is even greater considering that it strengthens our country’s economy in many ways, including keeping the population healthy, helping to tackle climate change, finding new cures for diseases, addressing racial inequalities, helping workers who are unemployed, ensuring settlement of newcomers, and providing workplace training and education.

Despite this, the sector faces significant challenges—issues such as lack of stable funding, modernization and data collection—that restrict its ability to meet the needs of communities across Canada. In fact, despite the critical role charities play to fill gaps in service delivery, 57% of charities report that they cannot meet the current level of demand for services.

The potential of charities is hampered not only because there is no place in the government working alongside our professionals to help the sector to grow, but also because there is no area that has the mandate to engage the sector in the development of policies that have a direct impact on the day-to-day activities and services available to Canadians. There is currently a critical need to strengthen the sector so that it can continue to deliver support and services that are needed and valued by Canadians.

Notwithstanding the fact that the charitable sector contributes over 8% to Canada’s GDP, the sector does not have a dedicated secretariat in government tasked with ensuring the connection to, well-being of and long-term potential of the charities and nonprofits in the country.

By comparison, industries with similar contribution percentages to Canada’s GDP (financial services, advanced manufacturing, mining, oil and gas) all have federal ministers with specific responsibilities, secretariats, or government departments dedicated to the sector or industry.

The sector must have government policies that strengthen its ability to serve Canadians and reflect its needs. The current transactional nature of our sector’s relationship with the government does not encourage growth.

After holding more than 25 meetings with organizations and officials in 2018 and 2019, the Special Senate Committee on the Charitable Sector issued a report entitled “Catalyst for Change: A Roadmap to a Stronger Charitable Sector”, which included a recommendation (Recommendation 22) for the government to create a secretariat on the charitable sector. In its written response to the special senate committee report on the sector in 2021, the government expressed support for the creation of a single window into government. This would be accomplished through a secretariat.

Further to that, as identified by the January 2021 report of the Advisory Committee on the Charitable Sector, federal policy frameworks for the sector are uncoordinated, and there is insufficient investment in data, IT, finance and labour market practices for the sector, which prevents the sector from reaching its full potential.

In 2023, the government reinforced its commitment to this priority indicating it would hold cross-country consultations with our sector that would inform the creation of a secretariat.

Yet, the sector still awaits a secretariat.

Benefits of a secretariat

A key priority for the Government of Canada is to ensure that all Canadians have their basic needs met.

Charities tackle big issues in Canada (e.g., poverty, hunger, healthcare, disasters, inequalities) and help the government with its priorities (e.g., affordability, jobs, labour strategy disaster mitigation). A secretariat would be mandated to ensure that government policies strengthen the nonprofit and charitable sector to ensure the sector can continue to thrive and play its vital role at the heart of Canadian communities.

A secretariat would reduce inefficiencies through proactive coordination, and ensure a greater government awareness and understanding of how programs, policies and regulations can increase effectiveness and innovation in the sector enabling its continuous ability to provide valuable services to Canadians. Numerous benefits would flow from being housed in one agency that has the mandate to strengthen, liaise and promote the sector.

A dedicated entity in government would provide input that is representative of the breadth and depth of the sector’s work to the government, and it would be able to share expertise from within the sector. A secretariat would work with public servants in different departments and agencies to help them consider the potential impacts of policies, programs and laws on the sector. It would result in greater collaborative policy development and an understanding of the important contribution of the sector.

The work of a secretariat would include: 

• strengthening the sector’s data and evidence-based policymaking by improving data collection, analysis, research, and knowledge on the sector and the barriers they face to serve Canadians;
• embedding the sector’s needs and realities in the work of the Government of Canada by ensuring coordinated action to advance our priorities across federal government organizations;
• collaborating with the sector to determine key data to be collected, monitored and reported on a regular basis;
• convening meetings of appropriate groups of federal/provincial and territorial ministers with responsibility for various aspects of regulating and relating to the charitable and nonprofit sector; and
• publishing an annual report on the state of the charitable and nonprofit sector. This report should include changes related to the sector by federal, provincial and territorial governments along with a more general overview of the economic and social health of the sector.

As service providers working directly in the community, the charitable sector’s professionals have a wealth of knowledge and expertise, much of which is currently not accessed by the government. A secretariat would serve as a navigator within government, be a provider of key information and data, and champion the sector to ensure that Canadians in need will always find available services when they are needed the most.

It would improve the use of government and charitable sector resources enabling both to better meet the wide-ranging needs of Canadians now and in the future.

It would ensure the sector is part of the permanent machinery of government, cost-effective and relatively easy for the government to implement. It would be similar to how Natural Resources Canada serves the needs of the forest industry with the Canadian Forest Services or how Women and Gender Equality Canada houses the 2SLGBTQI+ secretariat.

AFP recommends that the secretariat be housed at Employment and Social Development Canada (ESDC) under the purview of the Minister of Families, Children and Social Development. The Social Innovation and Community Development Branch of ESDC, that was previously tasked with the delivery of the COVID-19 pandemic response for the sector (specifically the Community Services Recover Fund), has the experience and sector knowledge to house this secretariat.  

The Impact of Not Having a Secretariat

In recent years, there are several examples that illustrate the negative impact of not having a secretariat. Budget 2024 outlined changes to the treatment of donations when the Alternative Minimum Tax (AMT) is triggered. These changes disincentivize donations at a time when Canadians are increasingly reliant on our sector to the point where many charities are struggling to keep up with demand. In response, charities reduce or eliminate programs that support those they serve, hurting Canadians at a time of need.

A secretariat would have worked with our sector and the government to study the impact of these changes on services available in communities due to the reduction in funding. Additionally, it would have saved both the government and the sector time and money that was used for advocacy about these changes.

Our sector would help to inform policy decisions, providing valuable input to government when changes to existing or new policies are considered. In addition to the changes to the AMT, having a dedicated secretariat would have been helpful during the considerations to the changes made to trust reporting, as after hearing from our sector, the government decided to exempt charities from the new requirements.

This is an opportunity to re-envision how we work together, to increase the government’s understanding of our sector, and move forward with better policies that serve Canadians. Our sector continues to provide much-needed services to countless Canadians, but it needs a secretariat, in order to grow to meet the needs in our country now and in the future.

The time to act is now. Canadians need the government to create this secretariat.

We would be happy to provide any further information or discuss this in greater detail. Thank you for your time and attention to this important matter.

Lisa Davey
Vice President
AFP Canada