Login / Logout Link

Federal Budget Analysis

Perhaps Drache Aptowitzer LLP’s Adam Aptowitzer summed up the federal government’s Budget 2013 best when he said, “Despite bearing relatively little news for charities, this in itself is probably good news for charities.”

While the Alberta budget roared in following months of controversy, Jim Flaherty’s Budget 2013 strolled in with little fanfare. That said, critics of the budget certainly exist on both sides of the spectrum, with some complaining the government cut too much, while others are saying they didn’t cut enough.

There isn’t much in the way of new spending in the budget and many of the big announcements are just reallocations of funding.

There is no specific mention of the Canada Summer Jobs program, which is of special interest to Alberta’s nonprofits after the Summer Temporary Employment Program was cut.

For international development organizations, it is interesting to note that The Canadian International Development Agency (CIDA) will now be a junior ministry under Foreign Affairs. This move is to increase efficiencies, though critics warn it opens up CIDA to more political influence. The long term effects of this decision are yet to be seen, but I expect more coverage on this issue.

Despite the attention that Bill C-458 (National Charities Week Act) drew a couple of months ago, the stretch tax credits for charitable donations are not included in this budget. What did appear was the First Time Donors Credit, a supplement to the existing charitable donations tax credit (CDTC) and would allow for an individual to receive an additional 25% tax credit on a first-time charitable donation.

Apparently to encourage young people to start donating, anyone who has not filed a charitable tax deduction since 2007 is eligible for the program. This one-time “super-credit” will bump the non-refundable tax credit of 15% percent for donations under $200 to 40% and for $200-$1000 donations from 29% to 54%.

All in all, there is nothing shocking about Federal Budget 2013. Information on other aspects of the budget can be found on the federal government website. The Globe and Mail also has an in-depth analysis.


Steven Kwasny, Stakeholder Relations Coordinator

Is “it could be worse” good enough?

I always get a weird feeling walking into the Alberta Legislature. I love that building. Over 100 years of history. Everything about it screams government and, for someone with a passion for history and politics, its symmetrical floor plan, granite, sandstone, marble, and mahogany are signs that our province was punching above its weight to build such a building a century ago. I’m sure critics then looked at it and wondered why we built such a building; after all it cost over $2 million (in 1906).

This isn’t about the building itself, though, this is about what it represents. The people that built the building knew it would last. The expense seemed worth it. To me, the fact that I get blown away by this building so long after those that built it have passed, is an incredible feat.

What does this have to do with the budget? Well, it has everything to do with it. I walked into the same building that I love last Thursday and I wasn’t sure how to feel. I was walking into the embargoed budget briefing that included many people that I had only ever seen on TV before: economists, leaders and influential people from across Alberta. Volunteer Alberta was fortunate to have been invited; we don’t always get these invitations. But, on this day I wasn’t struck by the beauty of the mahogany doors, I was worried. We had heard rumours about what this budget could mean for the nonprofit sector and I was not too excited.

Once the budget debrief started I flipped through the pages and, unfortunately, the rumours were true. The big standouts, as presented in our Budget Analysis were:

  • The $7 million for the Summer Temporary Employment Program (STEP) was cut.
  • The $15.5 million for the Community Spirit Program was cut
  • The Other Initiatives Program, which is a flexible funding source for nonprofits to access, was reduced by $1.4 million
  • Many of the other grants remained flat, which due to annual cost increases represents a cut.

Those are major cuts, and we aren’t yet sure of the extent of their impact. I kept telling myself, “it could be worse”. However, in the wake of the launch of Alberta’s Social Policy Framework, should we settle for “it could be worse”?

VA’s Ellie McFarlane wrote a great blog post on the upsides and downsides of the Social Policy Framework in which she points out that we have to have a serious discussion as to how we pay for these things.

The government has told us they intend to work with the nonprofit sector to discuss potential solutions to these problems. Having said that, Albertans need to decide if our nonprofit sector ought to be funded through tax dollars, private donations, user fees, or, more realistically, an all-of-the-above approach.

With Alberta’s population growing by the size of Red Deer every year, we will face greater demands for the broad spectrum of programs and services provided by the nonprofit sector. To borrow an analogy from an earlier blog post of mine called Becoming the Car:

The nonprofit/voluntary sector started out as the economic air bag in the car; ready to help if your situation turned so dire that it was the only thing that could help. Now, it has grown to be the economic seatbelt and review mirror (consumer and government watchdog groups), gas pedal (chambers of commerce encouraging more business), headlights (think tanks and advocacy groups showing the road ahead), shocks and tires (service organizations making sure we all enjoy a smooth ride) and even the in-car DVD system (like recreation and arts organizations so we can all have a little fun along the way)

We need to make sure the parts of the car are in good working order not just for now, but because that decision about closing a summer program at your local library could be the difference of whether or not a kid ends up going to college.

It sounds like a stretch, but I assure you it’s not. STEP has been a successful program since the 1970s and it will be a challenge to overcome its loss.

Luckily, the people that work in the nonprofit sector are resilient. They are the kinds of people that view challenges as opportunities and while such a budget is a setback, it’s by no means a nail in the coffin.

We have enjoyed a positive working relationship with the Government of Alberta and we will continue to work with them as the voice of the nonprofit/voluntary sector in Alberta. These are tough times and I can’t imagine anyone, MLAs included, truly welcomed these cuts. But they have a job to do too.

The decisions we make today affect people for generations. I hope as we move forward we work together to ensure that the Alberta we shape with our decisions is as awe inspiring as the Legislature Building is to me, 100 years from now.

I welcome your stories about how the loss of STEP, Community Spirit, and other budget choices will impact your organization.


Steven Kwasny, Stakeholder Relations Coordinator

Someone Has to Pay: The Awesomes and the Worries of the New Social Policy Framework

Have you read the Alberta’s Social Policy Framework?

While reading it, a few key things jumped out at me.  Overall I think the document is very promising. I’m not going to get into a detailed description of the Framework here, but if you want to know what it says, read it here. That being said, what I would like to focus on are the awesome parts, and the worrying parts.


Like I said before, overall the framework is pretty good and it is excellent to have on paper the recognition that nonprofits have a track record of success when it comes to providing the sorts of services that we have all come to want and need. Along these lines what I really liked was the commitment to the organizing principle of subsidiarity. Subsidiarity means that the lowest, smallest or most decentralized body is the most appropriate authority to address an issue. Essentially, the organization closest to the issue is the most competent organization to deal with the issue and deliver the solutions.

The Framework addresses this by stating in Roles and Responsibilities that:

“communities, local groups, and organizations are often best situated to respond to social challenges. They can develop solutions that reflect their needs, priorities, and capacities.”

This is true.  When you’re closer to the ground, as Alberta’s nonprofits and voluntary sector organizations are, you can get a more accurate read of trends and complex, nuanced issues, as well as be more precise and effective in implementing solutions. Additionally, being separate from the formal structure of government makes nonprofits more agile and flexible in how they respond to changing trends evolving priorities.

As the GOA’s role shifts from “service provider, funder, and legislator” to “influencer, convener, and partner,” more responsibility for providing services will be placed in the hands of the nonprofit/voluntary sector, which could ultimately stand to benefit Albertans.



With great power comes great responsibility; with great responsibility comes great costs. Nonprofits already provide a huge array of services on lean budgets, however an increase in programs and services means more resources, facilities, supplies and staff will be required. For all of those things, someone has to pay.

What worries me about the Framework is the Government’s shift in focus away from “funder” to “influencer,” and no clear mention of a plan to underwrite the cost of downloading these responsibilities to the nonprofit sector. I’m not necessarily saying that the government has to pay, but someone has to, whether it be through private donations, user fees, direct billing, pay-for-delivery funding schemes, etc.

What we need to see is a long term strategy for funding. We need to make sure our donation incentive system is effective, and that user fees don’t make important programs and services inaccessible. This solution for nonprofits that isn’t one size fits all, and it must also include a realistic grasp of the cost of delivering services to Albertans, including personnel, operating, and administrative costs.

And so, it is with this in mind that I look forward to the Budget announcement tomorrow, March 7 at 3pm.

Ellie McFarlane, Program Coordinator

Becoming the Car: The Nonprofit Sector is More Than It Used To Be

Last Saturday I attended the Alberta Economic Summit hosted by Premier Redford. I, along with 299 other people far smarter than myself, gathered in a room to hear panels of experts tell us about the economic challenges we face in Alberta, and what can be done to address them. Calgary Chamber of Commerce CEO Adam Legge wrote a great synopsis of what was covered. I won’t discuss the merits of transcontinental pipelines or different tax structures, though those conversations are important; instead I want to focus on one sentence from summit panelist Liz O’Neil, the Executive Director of Big Brothers Big Sisters Edmonton. She said, “Nonprofits aren’t what they used to be, and they aren’t sure what they are now.”

To provide a little context, the panel was discussing what the spending priorities for the Government of Alberta should be, and Liz O’Neil was speaking from the perspective of the nonprofit/voluntary sector. She referenced several statistics that shocked many in the audience. In Alberta alone:

  • We have 19,000 nonprofits
  • Over 176,000 people are employed in the nonprofit sector
  • There are approximately 2.5 million volunteers
  • Nonprofits and charities have an annual economic impact of over $10 billion.

To put those points in perspective, according to Alberta Enterprise in 2011 the agricultural sector employes 51,000 people and 151,000 Albertans are employed in the mining and oil and gas extraction industry. While the retail and construction industries employ slightly more people than the nonprofit/voluntary sector, when you factor in the massive amount of volunteers in Alberta, no single industry has a greater impact on the day-to-day lives of Albertans.

I understand there is a trickle-down effect from oil and gas, agriculture, and whatever else; and the money they pay their employees runs our economic engine and thereby funds our nonprofit sector. However, like a car, it takes more than an engine to do anything.

The nonprofit/voluntary sector started out as the economic air bag in the car; ready to help if your situation turned so dire that it was the only thing that could help. Now, it has grown to be the economic seatbelt and review mirror (consumer and government watchdog groups), gas pedal (chambers of commerce encouraging more business), headlights (think tanks and advocacy groups showing the road ahead), shocks and tires (service organizations making sure we all enjoy a smooth ride) and even the in-car DVD system (like recreation and arts organizations so we can all have a little fun along the way).

But, we forget that even those of us in the nonprofit/voluntary sector fall victim to second-classing ourselves to the private or public sectors.

In a recent report by the Government of Canada’s finance committee, they acknowledge, “Canadians rely on charities to deliver services previously delivered largely by the various levels of government.”

When the perpetual call to control government spending is heard, government responsibilities get downloaded to the nonprofit/voluntary sector, often without the necessary level of funding. We all rely on it every day, and Albertans are extremely generous with donations, however, we find it still isn’t enough. In many people’s minds, our system is still an airbag, even though it has become a car. The nonprofit/voluntary sector, along with its partners in business and government, need to take a serious look at how the sector is supported and developed to ensure we can continue to do the things that Albertans have come to rely on to improve upon our quality of life.


Steven Kwasny

Stakeholder Relations Coordinator

Arena Funding Proposal Raises Concerns for Nonprofits

Alberta’s unique charitable gaming model is a valuable financial contributor to the robust nonprofit sector Albertans have come to know and rely upon.  Provincially, Alberta generates $1.44 billion in annual gaming revenue and the percentage given to nonprofits and charities is invaluable to the sector. According to the Alberta Lottery Fund’s audited 2012 financials, 88% of the Alberta Gaming and Liquor Commission’s gross proceeds from provincial lotteries were disbursed to nonprofits and charities through the Alberta Lottery Fund.

The Wildrose Party, Alberta’s Official Opposition, has recently proposed that in order to fund new sports arenas for both Calgary and Edmonton, an existing lottery game, Keno, should be re-branded, re-vamped and the proceeds directed to building the arenas.

Their proposal (see this press release): a Keno game set up in bingo halls and sports bars would be used to cover the shortfall in funding arenas in Calgary and Edmonton. The problem with this idea is threefold. First is a logistical concern; second, one must wonder if this will grow the gaming revenue for the province, or if it will instead dilute the proportion charities receive; and third, does this put Alberta’s charitable gaming model at risk?

The first concern has been a definite cause for contention; however, the logistics of the model are outside of Volunteer Alberta’s area of expertise. The Wildrose Party is proposing that in order to reach their $194 million projection, it would need to be in at least 1000 bars and pubs in Alberta. According to the Alberta Gaming and Liquor Commission, there are only 1,557 Class A Minors Prohibited Liquor Licenses in the province. This is the liquor licence that allows the use of Video Lottery Terminals (VLTs) and Slot Machines. One could assume that even if the logistics of putting Keno in over 60% of Alberta’s bars, it would be in direct competition with the VLTs that people already use to gamble, and whose revenues go into the Alberta Lottery Fund, which supports many of Alberta’s nonprofits and charities.

This brings us to the second point, revenue dilution for nonprofits and charities. Volunteer Alberta’s worry is that while some “new gamblers” may be drawn to this NHL-branded Keno game, which would grow the total gaming revenue pie, the vast majority of Keno’s revenue will come from those who would have otherwise used an alternative game where the money would be directed to the Alberta Lottery Fund. This would effectively shrink the proportion of the pie directed to Alberta’s nonprofit sector, leaving already cash strapped organizations with fewer revenue sources, while private companies would benefit.

Lastly, Volunteer Alberta is concerned that the Wildrose’s proposal would leave Alberta’s charitable gaming model at risk. If we as a province make this exemption, what is there to stop it from happening again and again in other communities in Alberta? An expansion of this approach runs the risk of further diluting and diverting gaming funds away from the nonprofit and charitable sector. While Calgary and Edmonton may benefit from the building of new arenas, Alberta’s nonprofit and charitable sector relies on funding from the Alberta Lottery Fund to provide numerous programs and services Albertans need. Programs offered through Rotary clubs, athletics clubs, arts foundations, language and cultural groups and many others that make Alberta the best province to live in. Other jurisdictions have funded public-private partnerships like arenas through a number of different means.  While it is great to experiment with new ideas, it seems like, in this case, the cure is worse than the disease.

Steve Kwasny

Stakeholder Relations Coordinator

Not-for-profit Web Consulting & Digital Marketing by Adster Creative