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Sector Must Prepare for Provincial Funding Cuts

News Topic: 
Date: 
21 Jan 2010

 

The Government of Alberta is releasing its 2010-11 budget on February 9. Comments made by the Province's new Finance Minister, Ted Morton, after the cabinet shuffle earlier this month reinforce fears that cuts affecting the nonprofit and voluntary sector could be substantial. The day before he was sworn in, Morton reiterated, "The all-you-can-eat buffet of government spending is going to start getting closed down."

The magnitude of funding reductions for nonprofits and charities will not be known immediately. It will take some time following the release of the budget to identify the areas and extent of the reductions; identifying the cumulative impact on services and communities will be even more challenging. We need to prepare ourselves now and recognize that, depending on funding sources, organizations could be affected by multiple changes to government funding, such as grants or contracts for service, that will impact the delivery of programs and services.


PDD funding cuts

If the recent cuts to agencies supporting persons with developmental disabilities (PDD) are a sign of what lies ahead for the sector, we know the Province is prepared to make significant cuts even when they affect the most vulnerable in society. How the PDD cuts were made is also enlightening.


To recap, Alberta's PDD providers were asked two weeks before Christmas to return $11.3 million to the government to address the current budget deficit. The cuts were retroactive to the beginning of the fiscal year and were to be absorbed in the final fiscal quarter. Calgary agencies were given five business days to identify where the cuts would be made. In a very short time they had to determine how the reductions could be made; what the implications would be for clients and service delivery; what would be the multiple legal ramifications related to contracts with families, staff, leases, etc.; and how to consult with, and get approval from, their volunteer board members, many of whom were already on holiday.

These actions do not support the service model originally adopted with PDD, which was designed to reduce costs and streamline services. If the agencies can no longer provide the services, it stands to reason the Government will have to provide them at possibly a much higher cost.

A great number of agencies refused to comply and PDD providers from across the province came together in a collective voice and took action. How it all plays out is yet to be seen. For more information on the PDD funding cuts, click here.


What do we as a sector take away from this?

  • Organizations might be given very little time to implement funding cuts.
  • Changes may be imposed with little or no consultation with the nonprofit and voluntary sector about the real challenges of implementing change or how to mitigate consequences
  • Organizations, particularly those with service delivery contracts, may be faced with complex financial and legal issues related to contractual obligations to clients, employees, lease holders, etc.
  • The Government, in taking this action appears, not to understand that this type of cost cutting will affect service delivery and ultimately the quality of life for many Albertans.
  • The longer term implications of reductions may not be considered, including the cumulative impact of multiple reductions in various programs on both organizations and communities.
  • Nonprofits and charities have enormous networking abilities and the sector is recognizing the strength of coming together in a common cause.
CCVO encourages organizations to plan for provincial funding cuts. We need to ask ourselves what we would do if 10-15 per cent of our government funding disappeared and we need to be prepared in case it happens. Let's hope, however, it doesn't come to that.


In our effort to monitor changes that impact the sector, CCVO would like to hear from you. Please let us know when you learn of funding cuts and what impact they will have on your organization and the communities you serve. Your feedback and stories will help us understand the issues better. Please respond to CCVO Policy Analyst Laura MacKinnon at lmackinnon@calgarycvo.org or by calling 403-261-6655.