The Honourable Jim Prentice, Q.C., P.C.
Premier of Alberta
Office of the Premier
307 Legislative Building
Edmonton, Alberta T5K 2B6
December 22, 2014
Dear Premier Prentice:
On behalf of the Calgary Chamber of Voluntary Organizations (CCVO), I am writing you regarding the provincial fiscal situation and messaging from the Province about cost containment measures in the current fiscal year and in budget 2015-16.
We are very concerned about the potential for monetary decisions to compromise the nonprofit sector’s ability to sustain services it provides to communities. CCVO urges the Province to consider the impact of its budgetary decision-making on Alberta’s nonprofit sector. Additionally, we cannot stress strongly enough how important it is that Government facilitate a meaningful conversation with Albertans about the best way to stabilize provincial finances.
Why Does This Matter?
The nonprofit and voluntary sector is an important contributor to the economic health and vitality of Alberta. Charities and nonprofits throughout the province support the quality of life enjoyed in Alberta, addressing social needs, providing recreational and leisure opportunities, delivering arts and cultural programs and stewarding our natural environment. Many nonprofits work in partnership with government to deliver essential services, including supports for children, seniors, persons with disabilities, the homeless and individuals experiencing domestic violence. Many organizations also provide services essential to support the labour force, from settlement services and ESL programs for new immigrants, to skills upgrading for those on the periphery of the workforce.
Albertans volunteer nearly 450 million hours of their time annually with Alberta nonprofit organizations, the equivalent of over 200,000 full-time jobs. The nonprofit and voluntary sector is also a substantial source of employment, with more than 105,000 employees throughout Alberta (176,000 including hospitals, universities and colleges).
Nonprofit Capacity to Serve Albertans
Since 2009, CCVO has been conducting an annual survey of Alberta’s nonprofit sector. As such, we have followed the impact of economic downturns as well as boom times on the organizations that serve our communities.
It is important to consider the impact of the last economic downturn on Alberta’s nonprofit sector.
- In 2009, 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. Evidence from 2009 shows that all forms of revenue declined:
- 64% of organizations reported decreased corporate funding;
- 52% reported decreased individual donations;
- 51% reported decreased earned revenue.
This demonstrates that rather than expecting that some funding sources will offset reductions, all forms of revenue are affected, compounding the impact on organizations.
In the years following the global recession, funding for many Alberta nonprofits has remained flat. It has never fully recovered, let alone kept pace with growth in the demand for service and inflation. For example, in 2014 three quarters of respondents reported government funding either decreased or remained flat. Many nonprofits lack sufficient financial reserves to maintain service levels if funding is reduced. One-third of respondents to our 2014 survey have no operating reserve at all.
While funding has remained flat, demand continues to rise.In 2014 72% of organizations reported increased demand. 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.
Alberta’s high cost of living and lack of affordable housing affect a large portion of the population, including the nonprofit workforce. In an effort to help stabilize the nonprofit workforce, in 2012 the Province committed multiyear funding to close some of the gap between salaries paid by contracted nonprofit service providers and comparable public service positions. This commitment has already been spread over an additional year. It is critical that the Province maintain its commitment to working toward competitive wages.
The nonprofit sector can ill-afford to once again have its funding reduced. Nor can the many Albertans that rely on government mandated services go without. Albertans’ needs do not lessen when oil prices are soft. To the contrary, many of these needs are heightened.
Certainly, the Province is faced with some difficult decisions in the coming weeks and months; however, it is important to recognize that the current provincial economic circumstances are not unique. 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. It is time for the Province to adopt measures to stabilize public finances. In short, it is time for a new fiscal framework.
CCVO recommends 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 to smooth the budgetary impact in lean years and meet the needs of future generations.
In closing, the much touted “Alberta Advantage” is no advantage at all if it means we can’t maintain service levels through inevitable economic fluctuations. It is time to stop repeating history.
Katherine van Kooy
President and CEO
Cc: The Honorable Robin Campbell, President of Treasury Board and Minster of Finance
The Honourable Jeff Johnson, Minister of Seniors
Honourable Heather Klimchuk, Minister of Human Services
The Honourable Maureen Kubinec, Minister of Culture and Tourism
The Honourable Ric McIver, Minister of Jobs, Skills, Training and Labour
Patti Morris, Chair, CCVO Board of Directors
Janet Brown, Chair, CCVO Public Policy and Government Relations Committee