On December 15, the Alberta Government issued a press release outlining steps that will be taken to control spending through the remainder of this fiscal year through cost containment measures.
The release states that lowered resource revenues and expanding populations pose “unique challenges” for Alberta.
There is nothing unique about the current provincial economic circumstances.
CCVO has monitored the ways in which the government has controlled spending during other economic downturns. Historically, funding is withheld from non-mandated discretionary programs. Often, these changes happen quickly, with a small window of opportunity for organizations and boards to contact the Ministries, or to come up with alternate funding for established programs.
CCVO has written a letter to Premier Prentice outlining our concerns about the coming cost containment measures and the decisions that may compromise the nonprofit sector’s ability to sustain its services to our community.
Within the letter, we recommend the following:
- That the Province fully consider the impact of its budgetary decision-making on Alberta’s nonprofit sector, including taking into consideration the cumulative impact of decisions made across ministries on community-based organizations.
- That the commitment to contracted nonprofit service provider wage increases be maintained in order to help stabilize the nonprofit workforce.
- That the Province take measures to more effectively manage and stabilize provincial revenues and mitigate the effect of predictable fluctuations in resource revenues.
- That more revenue be set aside for lean years and for future generations.
It is time to stop repeating history.
CCVO has been following the impact of the economy on Alberta’s nonprofits since 2009.
In 2009 during the economic downturn, 41% of respondent organizations reported decreased government revenue, and an additional 44% reported government funding remained flat.
It is often suggested during times of government cutbacks that nonprofits should diversify their funding and redouble their efforts to secure donations or to increase levels of earned income.
This belief that reductions in government funding can somehow be made up with other sources of revenue is quite simply unrealistic.
- 64% of organizations reported decreased corporate funding;
- 52% reported decreased individual donations;
- 51% reported decreased earned revenue.
- Albertans’ needs do not lessen when oil prices drop.
While funding has remained flat in real terms, demand continues to rise.
In 2014 72% of organizations reported increased demand for services.
This situation is exacerbated by increased complexity of needs, rapid population growth, inflationary pressure, a high cost of living and a shortage of affordable housing. As a result of these multiple pressures, many organizations are straining to respond to community needs with insufficient resources.
The nonprofit sector can ill-afford to once again have its funding reduced.
For many years government has been highly dependent on volatile oil revenue to finance infrastructure and government operations. Allowing our capacity to meet the real community needs of a dynamic and growing province to fluctuate according to the price of a barrel of oil is neither efficient nor effective.
The much touted “Alberta Advantage” is no advantage at all if it means we can’t maintain service levels through inevitable economic fluctuations.
Premier Prentice has established a seven-member committee that will be focusing on cost-savings in the 2015 budget. In addition the Government of Alberta is currently taking action to control spending for the remainder of this fiscal year.
The Budget Committee members include
- Jim Prentice, Premier (chair);
- Robin Campbell, President of Treasury Board and Minister of Finance (vice-chair);
- Stephen Mandel, Minister of Health;
- Diana McQueen, Minister of Municipal Affairs;
- Frank Oberle, Minister of Energy;
- Manmeet Bhullar, Minister of Infrastructure; and
- Ric McIver, Minister of Jobs, Skills, Training and Labour