Budget 2021 Includes Funding for Sector & Raises Questions About the Future

FRANÇAIS

On April 19, the federal government presented Budget 2021: A Recovery Plan for Jobs, Growth and Resilience. Among its 739 pages, the words “charities” and “charitable” appear 67 times—a significant increase from the nine references in the last budget. Is this a sign of the government’s recognition of the important role of our sector in Canada?

While AFP is pleased with the number of measures announced and their potential to benefit our sector and communities, many questions remain about how they will be executed. We will continue to follow progress and to add our voice where it can be most effective.

In addition, although Budget 2021 offers important short-term measures, it does not begin to address the comprehensive sector-wide changes needed, many of which are outlined in the Senate’s committee’s report A Catalyst for Change: A Roadmap to a Stronger Charitable Sector and that of the Advisory Committee on the Charitable Sector. These recommendations will continue to guide AFP’s advocacy work on behalf of the fundraising profession in Canada.

AFP Perspective and Leadership

AFP leaders from across Canada played an important role educating members of Parliament (MPs) about the needs of our sector leading up to Budget 2021.

“AFP is grateful to our members across the country for stepping forward to meet with MPs and make the case that helped to influence the measure in Budget 2021,” commented Juniper Locilento, MPNL, CFRE, Chair AFP Canada Government Relations Committee.

Even if this budget is evidence that our messages and those of many other sector leaders were heard, it’s just a start. Additional support is still needed along with measures to help with modernization and efficiency of the charitable sector.

Beyond providing essential services to millions, Canada’s charitable sector is a critical engine of economic growth and jobs contributing $169 billion annually to the Canadian economy. Nonprofits and charities account for 8.5% of GDP and employ 2.4 million Canadians.

Despite the crucial role that charities and nonprofits have played during the pandemic, they are struggling to keep up with the needs of those they serve. Will the measures in Budget 2021 be enough?

COVID Recovery and Anti-Racism Funding

With the average charity reporting a decline of 16% in revenue since the start of the pandemic, we are pleased with the announcement that a $400 million Community Services Recovery Fund will be created. We look forward to additional details on how this fund will be administered and more importantly, how it will support our sector in post-COVID recovery.

Equally important is the extension of the Canada Emergency Programs, most notably the Canada Emergency Wage Subsidy which has been a lifeline to our sector preventing further closures of charities and nonprofits. The budget extends this program to support workers and businesses until September.

Black-led organizations in Canada receive $0.07 for every hundred dollars granted by Canadian philanthropic organizations according to Unfunded: Black Communities Overlooked by Canadians. We are pleased to see the Foundation for Black Communities’ request for $200 million to establish a new Black-led Philanthropic Endowment Fund was among the measures outlined in the Budget. This fund is intended to create a sustainable source of funding to help combat anti-Black racism and improve economic outcomes in Black communities. Additionally, $100 million was announced for the Supporting Black Canadian Communities Initiatives which helps support capacity building in the community including Black-led nonprofits.

Further measure that will help our sector while addressing inequities include support for childcare and Indigenous Peoples. Women make up 70% of the fundraising profession so the announcement of $27.2 billion for the creation of a national childcare program is welcome news. We look forward to results of the government’s negotiations with the provinces so that this program may be rolled out successfully. The $31.5 million commitment towards an action plan to implement the United Nations Declaration on the Rights of Indigenous Peoples is key to pursuing reconciliation between Indigenous Peoples and Canada.

Other Key Budget Funding

The Budget included a commitment of $172 million for Statistics Canada to implement a Disaggregated Data Action Plan that will fill data and knowledge gaps. Funding for data collection on our sector has long been a priority of AFP Canada so we look forward to learning more about how this might impact our sector.

Other noteworthy announcements that potentially impact our sector include:

• $595 million for the Canada Recovery Hiring Program to help make it easier to hire back laid-off workers as organizations re-open.
• $371.8 million for Canada Summer Jobs which includes youth employed in the nonprofit sector.
• $300 million for a Recovery Fund for heritage, arts, culture and sport sector.
• $220 million from the Canada Social Finance Fund which encourages organizations, including charities and nonprofits to use social finance to increase revenue.
• $140 million to top up the Emergency Food Security Fund and Local Food Infrastructure Fund.
• $50 million in renewed support for the Investment Readiness Program that supports charities, nonprofits and social purpose organizations in capacity-building activities.
• Expansion of borrower eligibility for the Canada Small Business Financing Program to include nonprofits and charitable social enterprises.
• Several measures related to the regulation of registered charities with the aim of combatting terrorism.
• Measures that help with income inequality including increasing the minimum wage.
• A commitment to work on lowering credit card merchant fees.
• Consultation on the disbursement quota with respect to possibly increasing it. This could result in an increase of between $1 and $2 billion annually for our sector.

Budget 2021 did not include measures to further incentivize donations which was one of the three recommendations from the House of Commons Standing Committee on Finance. As a professional fundraising association, AFP would have welcomed measures that help to stimulate donations. However, we recognize that with some of the most generous tax incentives in the world already in place, it is unlikely that additional tax relief would adequately address the significant revenue gaps that charities are currently facing. As such, the government’s targeted investments in the sector are an appropriate response. (To learn more read “Why Tax Credits Won’t Save Us”.)

To read the full version of Budget 2021: A Recovery Plan for Jobs, Growth and Resilience visit https://www.budget.gc.ca/2021/home-accueil-en.html.

To learn more about AFP advocacy efforts leading up to Budget 2021 visit:

• https://afpglobal.org/news/afp-members-take-action-advance-federal-budget
• https://afpglobal.org/news/finance-committee-recommends-support-nonprofit-sector-budget-2021
• Revised 2021 Pre-Budget Consultation Submission from AFP
• https://afpglobal.org/news/take-action-in-advance-of-the-2021-federal-budget
• https://afpglobal.org/government-relations-during-COVID-19