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The Canadian Distinctiveness into the XXIst Century - La distinction canadienne au tournant du XXIe siecle

 | 
Chad Gaffield
, 
Karen L. Gould

Individuals, Collectivities, and the State / Individus, collectivités et État

Evolving State — Civil Society Relationships: The Beginning of a New Era?

Susan D. Phillips

Texte intégral

1 The relationship between the voluntary sector and the state is undergoing fundamental change in Canada, as elsewhere. This is a result of a transformation in both the nature of governance and the character of the voluntary sector. Financial exigencies and neo-liberal preferences for a smaller state have propelled radical restructuring which has resulted in the downloading of services and dramatic cutbacks to program funding. Public sector restructuring has not been driven by financial concerns alone, however. It also reflects a transition from a paradigm of ‘government’ – of government departments unilaterally setting policy and producing services – to one of ‘governance’ in which governments work collaboratively and horizontally with other governments and with voluntary and private sector partners. Related to this, governments of both the left and right are taking a renewed interest in active citizenship, manifest by their attempts to encourage volunteerism and promote social cohesion. The result has been a realization on the part of governments that they need the voluntary sector more than ever, not only as partners in service delivery, but in building social capital and a strong civil society. At the same time, the voluntary sector has been rapidly evolving from a model based on charity to one based on civil society – that is, from a model premised on helping those less fortunate to one in which communities have the resources and are empowered to represent and help themselves. This has sparked the emergence of much stronger national leadership aimed at providing strategic direction to the sector and the demand for new policy tools and citizen engagement processes.

  • 1 A few examples illustrate the extent of innovation taking place. In 1998, the Blair government neg (...)

2As a result, considerable innovation is taking place worldwide in regulatory reform and in the development of new institutions, framework agreements, and other mechanisms for building and sustaining more constructive relationships between governments and the voluntary sector.1 Canada, too, has initiated sweeping reform aimed at increasing the capacity of the voluntary sector and at building better relationships to allow the sector to fulfil its unique roles in civil society and as a governing partner. The first concrete action toward implementing such reform came in early June 2000 with the federal government′s announcement of the Voluntary Sector Initiative, a framework policy supported by almost $95 million over five years and a novel Joint Table process for its implementation. The magnitude and implications of this unfolding change should not be underestimated. Not only will the product of this reform have a major impact on both government and the sector, but the innovative process of collaboration used to produce a strategy for change has already begun to reshape how the federal government works with the sector.

  • 2 For a discussion of the nature of the sector in Canada, see M. Hall and K.G. Banting, “The Nonprof (...)

3Canada has a strong tradition of volunteerism and a vibrant and diverse voluntary sector of more than 175,000 organizations.2 So, why does the existing relationship between the voluntary sector and the federal government need to change at all? What would it take to create a strong and enduring relationship, one designed to carry both the voluntary sector and government well into the twenty-first century? Does the federal government′s Voluntary Sector Initiative go far enough in creating this kind of relationship? This paper analyzes both the process that led to the announcement of the federal government′s Voluntary Sector Initiative and its content. I begin by presenting a conceptual framework for understanding relationships between the voluntary sector and the state. Next, I explore how this relationship has evolved over the years in Canada and outline its primary deficiencies. In the third section, Canada′s experiment in relationship reform is examined with a view to understanding the agenda setting and change process. I conclude by arguing that the Voluntary Sector Initiative is a vital first step, but that it faces some distinctively Canadian contradictions that need to be resolved.

Conceptualizing Voluntary Sector–State Relationships

4Relationships between the state and the voluntary sector are necessarily complex. They vary enormously across countries and over time, either because they evolve in response to changing circumstances or because they are consciously redesigned. The specific configurations of such a relationship depend on both the nature of government′s interests and institutions for structuring expectations and interaction with voluntary organizations, and on the structure and capacity of the voluntary sector.

5To varying degrees and in different ways, five distinct dimensions are part of all government-voluntary sector relationships:

  1. public policy advocacy and dialogue: Above all, voluntary organizations represent citizens. In this role, they advocate, uninvited, on behalf of their constituencies. But, they are also frequently encouraged by governments to participate in dialogue around public policy issues that affect their communities and in which they have expertise. A relationship also affords, to varying degrees, mutual understanding about the nature of the relationship itself: it provides an opportunity for both government and the voluntary sector to understand better the challenges and limitations of the other and to determine, through dialogue, common interests and goals.
  2. accountability: A relationship entails for both sides a requirement to explain and accept responsibility for carrying out assigned mandates in light of agreed upon expectations.3
  3. support: To varying degrees, a relationship contributes to the development of capacity in the voluntary sector and complements the resources and infrastructure of government. Capacity can be defined as “the human and financial resources, technology, skills, knowledge and understanding required to permit organizations to do their work and fulfil what is expected of them by stakeholders.”4
  4. transparency: In addition to promotion of appropriate conduct and acceptance of responsibility, a sector-state relationship should provide an opportunity for the public to ascertain whether both sides have lived up to commitments made and to understand how, and how well, the relationship is working. Transparency helps to ensure that the relationship is perceived as legitimate – by the sector, by government, and by the public at large.
  5. service delivery: The final dimension of a relationship is the provision of services to citizens, whether on contract, in partnership, or in the absence of government.

6In addition to recognizing the multidimensionality of the relationship, it is important to note that relationships between the sector and the state occur at different levels – at the micro, meso or macro levels. The micro level involves one-on-one interaction – an individual department with a particular voluntary organization on a specific policy or programme issue. The meso level delimits relationships between a government department(s) and a subsector or constituency of groups, such as the many organizations representing the disability community or international development. The macro level, involving government as an entity dealing with the voluntary sector as a sector, is just beginning to emerge in many countries. In most cases, macro level relationships have been historically underdeveloped or non-existent, so that principles and broad frameworks need to be established as a first step. Although the meso and micro levels may be where organizations and governments live the relationship on a daily basis, the focus of this paper is on the macro level, which in policy terms is the contemporary challenge for both the sector and the state.

The Voluntary Sector–State Relationship in Canada

7In the past decade or so, the voluntary-state sector relationship in Canada has undergone two deliberate transformations. The first, which began in the late 1980s, was an attempt to impose greater regulation on the sector and was prompted by neo-liberal restructuring of the state and a rise in populist ideas about democracy. The second transition which began in 1997 and is still in progress, is intended to create a more constructive, balanced relationship.

Constructing a Relationship

  • 5 Joint Tables, Working Together, 19.
  • 6 L.A. Pal, Interests of State: The Politics of Language, Multiculturalism and Feminism in Canada (M (...)
  • 7 Pal, Interests of State, 85-6.

8The Canadian government first began a direct relationship with the voluntary sector in the early 1900s, a period when churches and charities largely controlled welfare, health, and education services. Small grants were given to a few charitable organizations, such as the Canadian Lung Association and the Victorian Order of Nurses, to buy supplies and provide services, especially to vulnerable populations, that governments of the time could not reach.5 The relationship expanded considerably in the 1940s when the federal government recognized the potential of voluntary organizations in nation building and in constructing a distinctively Canadian citizenship regime. At the time, Canada was developing its own legal framework and administrative practices by which its citizens would be Canadians, in terms of both legislation and identity, not merely British subjects. During the war years, when that legal concept and those desired practices of citizenship were being formulated, concerns about the loyalty of citizens, particularly immigrants from the combatant countries, predominated. These concerns laid the groundwork for a citizenship training programme housed in the federal Department of the Secretary of State.6 It was felt that citizenship could be learned and practised through participation in voluntary organizations. In addition, collective action was seen as a way for the disadvantaged to help themselves and to achieve equality. The federal government, recognizing that it had a responsibility to support collective action to “help groups weld together individuals in a common community cognizant of its duty to support responsible, democratic government,” provided funding to voluntary organizations for programmes related to citizenship.7

9During the postwar years, concerns about loyalty gave way to concerns about constructing a Canadian identity – which is not surprising given the growing force of both Québec nationalism and economic Canadian nationalism. In the 1970s, operational funding to voluntary organizations engaged in promoting particular aspects of Canadian identity was expanded and institutionalized with programmes that funded official minority language associations, women, multicultural communities, Aboriginal political organizations, and (in the 1980s) disabled persons. At the meso level, operational departments cultivated relationships with their own constituencies by offering operational and project support for organizations, thereby supporting environmental groups and health and welfare organizations, to name but a few.

10In addition to its role in enhancing the support dimension of the relationship, the federal government established institutionalized mechanisms for facilitating policy dialogue with voluntary organizations. This was done in two ways. First, the federal government developed a practice of holding consultations on major policy initiatives in which citizen groups were not only invited to participate but were also given research and intervenor funding to do so effectively. Even around the annual budget process, a traditionally secretive affair in parliamentary systems, the minister of Finance held sectoral meetings with leaders of social policy, anti-poverty, and women′s groups, as well as with business leaders. The second way of enhancing policy dialogue centred on including representatives of social constituencies within the state. During the 1980s the size of the federal Cabinet grew to over 40 as a result of the creation of ministers responsible for women, multiculturalism, seniors, and youth, among others. Although no single minister was responsible for the voluntary sector per se, many of its key subsectors were represented at the Cabinet table.

  • 8 Ontario Law Reform Commission, Report on the Law of Charities (Toronto: Ontario Law Reform Commiss (...)

11The regulatory dimension of the relationship, also laid down during this period, was attached almost exclusively to the use of the tax system as a means of indirect support for the sector. In 1967, the Income Tax Act was amended to allow deductions for charitable donations and to provide for the tax exempt status of registered charitable organizations.8 In addition to enhancing incentives for individuals to donate, these new provisions of the tax system created the first comprehensive, national system of registration and supervision of Canada′s charities. In exchange for the ability to issue tax deductible receipts, qualified organizations were required to register, report annually, and adhere to certain restrictions on their financial, operational, and political activities.

  • 9 Exceptions are Alberta which has tried, half-heartedly, to regulate fundraising; Ontario whose Off (...)
  • 10 Although Québec has not used its powers to extensively regulate the sector, it has perhaps more co (...)

12The result of this process of nation building, combined with the construction of a regulatory framework around the tax system, has been to assign responsibility for the voluntary sector-state relationship to the national state. This is ironic given that, as appropriate to all civil matters, jurisdiction over voluntary organizations actually rests with provincial governments. Although provincial governments have extensive contacts with voluntary organizations in the context of service delivery in a wide variety of areas, the federal government has claimed the dominant role in the relationship with the voluntary sector through use of its spending power and control over the national tax system. The stance of most provincial governments to the voluntary sector has been non-interventionist – indeed, some might say, benignly neglectful.9 Even Québec, which operates under the civil code of law and maintains its own tax system (and thus requires separate registration for charities), has been largely laissez-faire in regulating the sector, although it is naturally the focal point for the relationship in most other respects.10

Deconstructing the Relationship

  • 11 S.R. Smith and M. Lipsky, Nonprofits for Hire: The Welfare State in the Age of Contracting (Cambri (...)
  • 12 Jenson and Phillips, “Distinctive Trajectories.”

13The supportive elements of the long-standing relationship between the federal government and the voluntary sector were largely dismantled in the late 1980s and early 1990s as a result of the rise of neo-liberalism and populism. The inherent balance, by which the state recognized both a benefit from and a responsibility to the sector, was reduced to a government-dominated contracting and regulatory regime. Calls for even more regulation marked this transition. A philosophy of neo-liberalism that emphasized a smaller state and competitive markets characterized both the Mulroney Conservatives, in power from 1984 to 1993, and the first mandate of the Chrétien Liberals. When neo-liberalism met the very real financial pressures for deficit reduction, the results were significant cutbacks in government spending, particularly to social programs, and a choice by the federal government to get out of many areas of activity not considered ‘core business’ by downloading or offloading to the private and voluntary sectors. Financial assistance to voluntary organizations was cut dramatically, sometimes as much as 50 to 100 per cent in a single year, often without warning. The groups that were hardest hit were advocacy and umbrella organizations – those not directly engaged in service delivery. Where financial support remained, project or contract funding usually replaced operational support, thus forcing voluntary organizations to seek out projects to support their daily operations, sometimes diverting them from their core missions, and generally speeding up the tempo of the “dance of contract management.”11 As the federal government cut intergovernmental transfers and downloaded costs onto provincial governments, they, in turn, downloaded to municipalities and voluntary organizations. Although Ottawa was usually blamed, many provincial governments had strong neo-liberal ideas of their own and were delighted to shrink the size of the provincial state. For example, in many service areas, such as homecare, which had been provided almost exclusively by the voluntary sector, private sector competition was deliberately introduced by some provincial governments; consequently, private sector firms saw the opportunities in these new “markets” and began to go head-to-head with voluntary sector providers, often driving the latter out.12

14Restructuring of the voluntary sector-state relationship was not just about money, however. The rise of populist ideas reinforced a backlash against voluntary organizations engaged in public policy debates because populism saw no need for intermediaries in the relationship between citizen and elected official. The notion of the 1940s that organizations were grounds for citizenship training was antithetical to a populist politician of the 1990s. In particular, one backbench member of Parliament, John Bryden, became a vocal critic of the lack of accountability and efficiency of voluntary organizations and, on the basis of his own analysis of annual tax returns of selected voluntary organizations, released a series of reports that called for much stronger regulation. The motive underlying these criticisms, by his own admission, was a concern that parliamentarians were in competition with civil society groups to be heard. Although Bryden did not succeed in creating a cadre of supporters among the Liberal party, his work captured the attention of the media whose members had long ignored the sector, but who now recognized the potential for scandal. The response from government was to add more auditors to Revenue Canada staff and to order the review of executive salaries in the sector by a parliamentary committee (which found no evidence to support Bryden′s claim of exorbitant staff salaries and quickly lost interest in pursuing the issue). At the same time, Revenue Canada apparently became more conservative in its decisions to register new charities and more vigilant in policing the advocacy activities of registered organizations, particularly smaller groups.

  • 13 Jenson and Phillips, “Regime Shift,” 121-3.
  • 14 M. Berm, “In the Dark: Role and Value of Charitable Sector Little Known Among Public,” Inter Secto (...)

15Two other developments in the early 1990s caused significant deterioration in the public dialogue aspect of the voluntary sector-state relationship. The first was that consultation processes were deliberately redesigned to focus on representation by individuals participating as individual citizens, rather than by organized groups of citizens. Sectoral consultations were replaced by multi-stakeholder sessions, which may have enhanced cross-sectoral learning but diluted the voice of the voluntary sector. Sector advocates within the state were also removed by a major organizational restructuring beginning in 1993 that jettisoned many of the representatives of social interests from the Cabinet and abolished government advisory councils, such as the Canadian Advisory Council on the Status of Women.13 By the mid-1990s, not only was it harder for the voluntary sector to be represented within the state, but it was more difficult to make representation to the state. The cumulative effect of these changes was that the credibility of the voluntary sector was purposely undermined, as it became painted with the derogatory brush of ‘special interest groups.’ In spite of this, opinion polls show that public trust in the voluntary sector has remained high.14

The Need for Change

16This downloading and state restructuring, laid on a tax-based regulatory system largely unreformed since its establishment in the late 1960s, have generated a number of serious problems in each of the five dimensions of the sector – state relationship. Here, we examine the current strengths and basic weaknesses in each aspect of the relationship with a view to demonstrating the need for particular kinds of reform.

PUBLIC POLICY DIALOGUE

  • 15 A. Drache with F.K Boyle, Charities, Public Benefit and the Canadian Income Tax System: A Proposal (...)
  • 16 In early 1999, the Supreme Court rendered its decision in the case of the Vancouver Society of Imm (...)

17Policy advocacy by voluntary organizations has become unduly restricted, although many parliamentarians and public servants probably still feel it is not restricted enough. Government regulates advocacy activity in two ways: by controlling which kinds of organizations are permitted to register as ‘charities’ and thereby be able to issue tax receipts for donations and by regulating the advocacy activities of registered organizations. Canada, which uses a common law definition of charities (emanating from the Elizabethan Statute of Charitable Uses, 1601), has one of the most restrictive systems of registration among developed countries, notably more restrictive than the US or the UK.15 In the US, as in many other countries, the definition of ‘charity’ is expanded beyond the traditional common law interpretation by the specification in the tax code of a number of additional categories of organizations that qualify for registration. The UK has expanded and kept the common law definition of charity appropriately flexible by institutional means: acting in its quasi-judicial capacity, the Charity Commission of England and Wales annually hears hundreds of cases about the kinds of purposes that ought to be considered charitable, so the existing definition is continually open to renewal. In contrast, Canadian groups that are denied registration by the tax agency must take their case to the Federal Court of Appeal – a very expensive court of first instance. Hence, only about twenty cases have ever proceeded through the courts and only one has reached the Supreme Court.16 As a result, groups engaged in educating about environmental protection, promoting multiculturalism or harmonious race relations, and supporting patriotism (including better relations between Anglophones and Francophones) are excluded from registration in Canada, but not in the US or UK. Although the evidence is sketchy, this limited interpretation of the common law is probably most detrimental to multicultural communities that approach philanthropy and community help in different ways than other communities.

  • 17 Such were the perceptions of many in the sector. The differential enforcement of regulations and m (...)

18Once registered, political activity is limited to an arbitrary level, defined in a manner that the tax system can regulate. The current rule is that resources spent on political activity cannot exceed 10 per cent of the total of an organization′s resources in any given year. The definition of political is vague, but refers to a broad band of activity between partisan (which is banned completely) and consultation invited by governments (which is unfettered). In the atmosphere of the 1990s, the application of the ‘10 per cent’ rule reinforced perceptions that the federal government wished to curtail advocacy by critics of state restructuring. In addition, apparently stricter enforcement of the rule during this period by Revenue Canada, now the Canada Customs and Revenue Agency (CCRA), contributed to a sense of unfairness in the regulatory system: that small, newer groups are treated differently than large, traditional charities. For instance, while the large and respected Canadian Cancer Society might get away with an anti-smoking campaign, small and more vocal groups, such as the Non-Smokers Rights Association, might be (and, indeed, have been) audited for similar political activities.17 The problem was compounded by timing, since the restrictions on advocacy came at the very time when voluntary organizations felt a growing responsibility to speak out against the impact of social program cuts and other effects of state restructuring.

ACCOUNTABILITY

19Accountability in the voluntary sector necessarily involves both self-and government regulation, given the public trust held by the sector. The Canadian system has deficiencies in both. On the one hand, self-regulation at a broad sector or sub-sector level has been underdeveloped. This is a result of the historical absence of strong cross-sectoral national or provincial organizations and of sector-based watchdog agencies (such as the National Charities Information Bureau in the United States). This is starting to change, however, with the leadership role assumed by the Canadian Centre for Philanthropy which is mobilizing sector-wide voluntary compliance with its Code of Ethical Fundraising and Financial Management, and by other intermediary organizations with requirements for member accreditation.

  • 18 Ontario Law Reform Commission, Report, 250.
  • 19 Ontario Law Reform Commission, Report, 262.

20On the other hand, the governmental regulatory system is simultaneously cumbersome and disappointing.18 The disappointment stems from the inherent contradiction in tying the regulatory regime so closely to the Income Tax Act, 1985. As a recent review of Canadian charity law notes, “The dominant legislative motive, naturally, has been either to protect the public treasury against abuse and fraud, or to ‘subsidize’ the sector through ‘tax expenditures.’ The integrity and efficiency of the sector, although important to these objectives, remain only instrumental goals.”19 The CCRA, as first and foremost a tax collection agency, can neither regulate the sector effectively nor equip it with the tools to govern and regulate itself successfully.

  • 20 M. Taylor, “Between Public and Private: Accountability in Voluntary Organizations,” Policy and Pol (...)

21The framework is cumbersome in several ways. The first is a product of its uniformity, which means that all registered organizations, from the small group run entirely by volunteers to the largest university or teaching hospital in the country, must annually report exactly the same information. Not surprisingly, most of the problems related to failure to report or inaccuracies in reporting encountered by the Charities Directorate of the CCRA emanate from very small organizations in which the volunteer treasurer did not fully understand or have the time to fill out the thirteen-page form. The only sanction for noncompliance or for failure to report that is available to the CCRA is de-registration. To paraphrase Marilyn Taylor, this uses a sledgehammer to crack a walnut.20 Thus, it comes as no surprise that very few organizations are ever fully sanctioned.

22A second problem is that the regulatory guidelines are vague, or simply unhelpful, in several areas. This applies particularly to the regulations governing business activities that do not provide adequate guidance to voluntary organizations in shaping their own conduct at a time when business activity is increasingly undertaken in a desperate search for new sources of revenue. Finally, the regulatory regime has been increasingly politicized – or, at least, perceived to be politicized. Due to the limited resources assigned to the CCRA Charities Directorate, audits in recent years have been done rarely at random, and only on a complaints basis. This has created a growing unease that those organizations that are overly critical of government policy or disliked by certain politicians are more likely to be the target of investigation.

TRANSPARENCY

23Transparency has also suffered as a result of the nature of the regulator. As a tax department, the CCRA operates under rules of confidentiality that extend to its Charities Directorate. Consequently, neither the applications for registration, nor the reasons for approval or rejection of such applications, nor (until recently) other information about an organization′s annual return are made public. Thus, the public has no easily accessible, reliable, independent source of information about the sector as a whole or about a specific organization that may be soliciting donations. The list of registered charities, however, is now available on the CCRA website – a major step forward in providing a basic measure of transparency.

SUPPORT

24As outlined above, support entails not only assistance with ‘hard’ infrastructure, such as funding, human resources, and technology, but also shared understanding and knowledge. By the 1990s, the sector had reached a crisis of capacity. Support in the form of financial assistance had been severely cut back and, since the sector was poorly understood, there was never a significant transfer of human resources or other expertise between governments and voluntary organizations. And by this time, understanding and shared expectations were at an all-time low because many Canadian governments presumed that voluntary organizations could and would simply pick up the load resulting from cuts in government programming.

25To a large extent, the lacuna of support and understanding stems from institutional design. In contrast to both the UK and the US, the Canadian relationship lacks institutional support for capacity building and for better self-governance within the sector. There is no federal or provincial equivalent to the Charity Commission of England and Wales which, as an arms-length government body, backed by legislation, both regulates and supports the sector. Nor does the tax department play the intrusive but instructive role of the US Internal Revenue Service which uses its expertise to educate as well as supervise the sector. Although the CCRA often attempts to be supportive as well as act as a watchdog, many organizations are reluctant to ask for assistance or information for fear of being bitten by an auditor. Moreover, the Charities Directorate is so limited in resources that there are few opportunities to be proactively helpful in providing good governance tools. Moreover, without another voice at the Cabinet table, the needs of the sector were being largely overlooked by the federal government.

26One aspect of support that is of particular importance to voluntary organizations is funding. Most voluntary organizations have been detrimentally affected by the public sector restructuring of the past decade. The result has been that voluntary organizations face a triple whammy. First, having seen their government funding cut substantially and their core funding withdrawn in favour of short-term project funding, they are left with fewer resources and less ability to undertake long-term planning due to the uncertainty of funding. Second, as governments cut or withdrew from the provision of many services, client demand for services provided by voluntary organizations has increased. Third, because the entire sector is facing the same funding dilemma, competition for funds has increased, making it more difficult to diversify sources of funding. From the sector′s perspective, the issues that must be addressed are not simply or even primarily about levels of funding, but the need for stable, multi-year funding commitments in order to facilitate planning; for recognition of the costs of administration and evaluation that are associated with projects and contracts; and for consistency of practices across departments.

SERVICE DELIVERY

  • 21 Municipality of Metropolitan Toronto, City of Toronto and Social Planning Council of Metropolitan (...)

27By the mid-1990s, the Canadian sector was under extreme pressure to provide more services with fewer resources. Most organizations have responded as best they could by searching out new funding sources, recruiting more volunteers, and cutting operational costs in ever more innovative ways. For example, they moved to cheaper spaces, shared administrative, back-office functions with other organizations, and even merged. In some cases, however, programmes have had to be cut, certain clients left unserved or, in extreme cases, organizations allowed to go under.21 At the same time, voluntary organizations have come under pressure by government and other funders – themselves faced with difficult choices and scarce funds – to undertake outcome-based performance evaluation of their work. Although many organizations see evaluation as inherently useful, they often lack the resources, time and expertise to conduct effectively such evaluations. The point is that issues of service delivery are intimately linked to capacity-building and to dialogue with governments.

The Process of Change

28Despite mounting problems in the sector-state relationship, the Liberal government had neither a clear diagnosis nor specific remedies. It did see, however, that an increasingly strained relationship with the voluntary sector would make smaller government and new forms of horizontal governance difficult to sustain in the long run. Not only was government relying on the sector more than ever to deliver services that had been offloaded, but it needed the sector′s ideas and expertise as a substitute for the internal policy capacity that had been cut so dramatically in the early 1990s. Like so many governments of both the right and left, the Chrétien Liberals felt the need to express a fuzzy, warm feeling about the inherent value of the voluntary sector and to make promises that the sector would be an equal partner. The first positive step was taken in the 1996 (and repeated in the 1997) budget: the tax provisions for charitable donations were improved as a result of very effective lobbying by the sector. The important benchmark for the sector, however, was the 1997 election. In its election platform, published as the policy book popularly known as Red Book 2, the federal Liberals committed to building a stronger voluntary sector and, in particular, to enhancing its capacity. The significance of this event lay in the commitment itself, not in the content. Indeed, the Red Book promises were vague and the Liberals probably had few, if any, concrete ideas about how to fulfil them. In a sense, this was fortunate for the voluntary sector as it created an opportunity for it to sketch in some specifics, which it did not hesitate to do.

29The structure, resources, and leadership of the voluntary sector are as important in shaping the nature of the relationship with the state as are the institutions of government. In the Canadian context, the structure of the sector reflects the federal system: local organizations are generally organized into regional or provincial bodies, and those provincial units into national umbrella organizations. Although this generally facilitates the exercise of a voice simultaneously at the provincial and national levels, organization is by subsector (eg., childcare, homecare, parks and wilderness groups, and so on). What has been missing in Canada is a strong cross-sectoral organization at the national level, equivalent to the Independent Sector in the United States or to the National Council of Voluntary Organizations in England, to speak for the sector more or less as a whole. Recognizing this gap and the need for national leadership in the face of the extreme pressures created by government restructuring, a group of key sector leaders came together in 1995 to form a loose association, without legal organizational form, called the Voluntary Sector Roundtable. With funding from the J.W. McConnell Family Foundation, the Voluntary Sector Roundtable identified four priorities for its work over the next few years, one of which was enhancing accountability. Although polls indicated that the Canadian public still had a high level of trust in the voluntary sector, the Voluntary Sector Roundtable understood clearly that without enduring public trust, the financial foundation, volunteer support, and programme credibility of the sector would be in serious peril. Concerns about maintaining public confidence were heightened in the mid-1990s. Not only was the climate permeated with calls for more regulation, but the backlash from American scandals had been imported and a major, homegrown scandal over the conduct of the Canadian Red Cross in handling the country′s blood system had emerged. If the sector had not coalesced in this critical period and undertaken a major initiative in changing the nature of the sector-state relationship, it is very probable that the federal government′s electoral promises would have remained empty ones for lack of ideas or it would have caved in to the calls for much greater regulation.

  • 22 Commission on the Future of the Voluntary Sector, Meeting the Challenge of Change: Voluntary Actio (...)

30As the Voluntary Sector Roundtable knew, it would have appeared extraordinarily self-serving for it to undertake the task of investigating accountability in the sector, particularly if it concluded, ‘no problem.’ The Voluntary Sector Roundtable therefore chose to appoint an arms-length panel of experts to research the issues, consult with Canadians, and report back with specific recommendations to improve accountability and governance in the sector. The panel, loosely modelled after the Deakin Commission on the Future of the Voluntary Sector in England, would give legitimacy through distance, while nonetheless allowing the sector to maintain ownership of the process.22 Possibly for the first time, the Canadian voluntary sector, as a sector, was doing something very public for its own good. Shortly after, the federal government initiated its own process, first internally, then collaboratively, with the sector to determine how to meet its electoral commitments. In content, both drew extensively on the recommendations made by the Panel on Accountability and Governance of the Voluntary Sector Roundtable.

The Panel on Accountability and Governance in the Voluntary Sector

  • 23 I cannot claim that the following is a dispassionate or objective analysis because I served as the (...)
  • 24 The members were: the Honourable Ed Broadbent, Robert Brown, Dale Godsoe, Angela Kan, Arthur Kroeg (...)

31The Panel on Accountability and Governance in the Voluntary Sector, launched by the Voluntary Sector Roundtable in October 1997, was given a mandate to produce a discussion paper for consultation in eight months and a final report at the beginning of 1999.23 The Voluntary Sector Roundtable carefully chose the six panel members to bring not only knowledge of the sector, but expertise in business and government as well, and, in the Canadian style, to include members from different parts of the country and, coincidentally, with quite different political views or affiliations.24 The choice of Ed Broadbent to chair the Panel gave it instant visibility and its nickname. All members of the Panel on Accountability and Governance in the Voluntary Sector, including the chair, served as volunteers; none were token participants; all chose to be actively involved in crafting the discussion paper and in leading public consultations.

32Unquestionably, many observers, including some members of the Voluntary Sector Roundtable, believed at first that the panel would stick primarily to the narrower aspects of accountability – board governance, ethical fundraising, and management – that are internal to the sector. But the Panel On Accountability and Governance in the Voluntary Sector chose to interpret its mandate broadly, to encompass relations with government and the corporate sector and saw its work as an opportunity to reshape the neo-liberal/populist discourse that had portrayed the sector as little more than a collection of special interest groups. In addition, the panel stapled the idea of capacity building to that of enhancing governance and accountability: the idea that governments have some responsibility toward the sector if it is to fulfil its potential as the “third pillar of society,” to use the language of Red Book 2. Thus the mandate, as interpreted by the panel, was to reshape relationships in fundamental ways, not simply to tinker with intra-organizational mechanisms of accountability. Sometimes in the public policy process, ‘ripeness’ is all. Luckily for the Panel, its time was ripe. Not only did the sector galvanize around the work of the Panel on Accountability and Governance in the Voluntary Sector, but the federal government had to figure out how to meet its Red Book policy commitments and was thus open to new ideas.

33The work of the Panel on Accountability and Governance in the Voluntary Sector was organized as three tasks: research, consultation, and reporting. The first stage of its work involved research into existing practices and models of accountability. These included not only best practices within the sector, but also an examination of the regulatory and relationship models of many other countries, particularly England, where the Charity Commission represented a more customer-service model of regulation and where the Deakin Commission had laid out many of the issues, and the United States, where sector self-regulation and state supervision are much more extensive. The recommendations of the panel reflect the cross-Atlantic influence and the explicit rejection of the American model as inappropriate to the Canadian context.

  • 25 A discussion guide could be downloaded for use by any organization that wanted to facilitate its o (...)

34The result of this research was an interim discussion paper, released in May 1998, that formed the basis for an engagement process involving roundtable meetings in fifteen centres across the country, an online questionnaire, and the opportunity to submit briefs, of which more than 100 were received. The intention was not only to gather information from voluntary organizations across the country, but to leave a ‘footprint’ of heightened local interest and mobilization around issues of accountability.25 All of this information was synthesized into a final report, entitled Building on Strength: Improving Governance and Accountability in Canada′s Voluntary Sector, released in early February 1999.

The Joint Table Process

35In mid-1998, the federal government began its own internal process for determining how it would fulfill its electoral commitments. The multi departmental committee of senior officials that was formed made rather slow progress, as do so many of these committees. Its work was advanced by the creation of a secretariat, the Voluntary Sector Task Force, which has full-time staff and is housed in the Privy Council Office, giving it considerable stature. Since the task force was formulating its own recommendations to Cabinet at the very time that the Broadbent Panel report was released, it was considerably influenced by the panel′s recommendations. To its credit, the federal government recognized that the issues were complex, that the way ahead was a major social experiment inasmuch as no model could simply be imported from another country, and that process mattered. Instead of moving forward unilaterally, the federal government established a joint process with equal participation by the voluntary sector.

  • 26 Individually, the Joint Tables worked in different ways: some commissioned research, some invited (...)

36This process took the form of three ‘Joint Tables’ created in March 1999 (still served by the Voluntary Sector Task Force) that focused on: building a new relationship, strengthening capacity, and improving the regulatory framework. This was a unique experiment. The tables functioned in a truly collaborative manner in that each was co-chaired by a representative from the sector and by a senior public servant, and the membership (of about twelve per table) was chosen in equal proportion by each partner. In this, the Voluntary Sector Roundtable chose wisely and convinced good people representing national, regional, and local perspectives and experience to participate. The Joint Table process marks the beginning of a new relationship whose success largely depends on two critical factors. The first is the trust that developed through joint ownership of the process and open, candid discussions. The second is that the politicians were involved early on when about twenty ministers met with members of the Joint Tables soon after the tables were formed and again later to discuss preliminary recommendations. For all three tables, the process was a learning experience both for the voluntary sector members and public servants – not simply in terms of the issues, but also in terms of the culture of the other sector.26

37The Joint Tables worked within a very short time frame, a mere six months from beginning to end. The short time period was due both to a desire to move recommendations forward to Cabinet for the fall of 1999 so that any budget implications could be included for the next fiscal year, and to a realization that the tables could work on the issues for years and still leave many things unresolved, given the complexity of the task. In mid-September 1999, a single report was released that synthesized the recommendations of the three tables. The fact that this report was publicly released is itself a significant change in government procedure: normally such a report would have been viewed as advice to Cabinet and kept secret, at least until ministers had had a chance to consider it.

A Shared Blueprint for Action

38The diagnosis of the difficulties in the existing voluntary sector-state relationship and the recommendations for its renewal made by Broadbent′s external panel of experts and by the sector and government representatives at the Joint Tables are nearly identical. This suggests that the nature of the problems are obvious and that there is considerable consensus on the solutions.

39As a starting point, both reviews stressed the importance of capacity building in the voluntary sector if it is to realize its potential and both identify similar responsibilities for the federal government in helping to build this capacity. These measures include enhancing skills development, possibly through secondments to voluntary organizations; assisting with information management and technology (IM-IT); and clarifying government funding policies. Concerning the last issue, the triumph for the sector members of the Joint Capacity Table was that they convinced the government officials that the table had to address financial issues, despite the preliminary reluctance of the officials to do so. It took some reiteration to make it clear that the sector was not saying simply, “give us more money,” but were concerned with the way money flows (e.g., project/contract vs. operational; short term vs. long term), considering it critical. In addition, as part of its options for creating an ‘enabling environment,’ the Joint Tables recommended creating a task force to study funding, a new initiative on volunteerism, and increasing knowledge about the sector both by stimulating research and creating a satellite account related to the economic value of the sector as a subset of the Statistics Canada system of national data gathering.

40A second task related directly to building a new voluntary sector-state relationship. On this matter, both the Broadbent Panel and the Joint Tables argued that a relationship needs to evolve and suggested a number of institutional and procedural mechanisms to encourage it to evolve in a strategic manner. Perhaps the most visible and symbolic of these was the development of an ‘accord’, modelled after the British compacts, between government and the sector. In addition, both supported the ideas of creating a ministry responsible for the sector or some other permanent political voice at the Cabinet table and establishing an ongoing administrative secretariat.

  • 27 Although no preference among these three models was officially endorsed in the report of the Joint (...)

41Third, the need for institutional change emerged as a shared priority. The Broadbent Panel was in favour of developing a new institution to oversee and support the sector from two perspectives. First, the Panel argued that one of the best ways to enhance accountability in the sector is through a process of self-accreditation closely coupled with public transparency. Organizations should report annually on a number of key aspects of their work and this information should be easily accessible by the public, thus providing the reporting organizations with an incentive to provide accurate information (of course, there remained the need for some direct government regulation as well). The second argument stemmed from a recognition that most of the organizations in the sector are very small, run entirely by volunteers. As a result, many of the problems of non-compliance encountered by the CCRA are a result of lack of knowledge or capacity, not intent. The CCRA, as the main institution of the state for interaction with the broad diversity of the sector, is neither transparent nor capable of supporting organizations to build better practices related to governance and accountability. The panel proposed a new Voluntary Sector Commission, a variant of the Charity Commission of England and Wales, to supplement the more narrowly regulatory functions of the CCRA. The Joint Regulatory Table concurred with the importance of institutional change and proposed three alternative models for an oversight agency – an enhanced Charities Directorate of the CCRA; an advisory body; and a quasi-judicial commission – that should be developed further through broader consultation.27

  • 28 The argument that extending access to the tax system in this manner would open the door to radical (...)
  • 29 It is unlikely, however, that the relationship between the number of organizations registered unde (...)

42Fourth, the need to expand access to the tax system by a broader range of public benefit organizations was emphasized as an essential aspect of capacity building and of creating an enabling environment. Since governments increasingly expect communities to assume greater responsibility for their own well-being, it is essential to equip these communities with the appropriate policy tools to attract supporters and donors. A tax incentive is one way of doing so. Both reviews proposed a mechanism for gaining greater access to the tax system through the development of a list of public benefit organizations that are ‘deemed’ to be charities for purposes of the tax system, much the same way as national arts service organizations and amateur athletic associations are currently granted the same status as common law charities under the Income Tax Act, 1985.28 Opposition to this idea came from both the Department of Finance which feared that it would be costly in lost taxes and from Cabinet which saw it as stirring up controversy without much immediate political gain.29

  • 30 Joint Tables, Working Together.

43The government′s ability to determine which organizations get access to the tax system is one way in which it limits the advocacy and political activity of voluntary organizations. The second way it does so is by placing direct limits on such activities by registered organizations. Both reports affirmed the legitimacy of public policy advocacy by voluntary organizations, including those registered as charities, although the Joint Tables went further than the Broadbent Panel in their recommendations related to creating space for such activity. Indeed, the Regulatory Table considered this to be one of the most pressing issues of all.30 The underlying problem is that governments have always seen advocacy as illegitimate because its connection to the charitable mission is not appreciated; in reality, advocacy occurs in the context of educating and informing on matters related to the central mission and can thus be considered a public benefit. In addition, there is a double standard in how the federal government treats advocacy by the charitable and the private sector. While advocacy by registered charities is severely limited by the ‘10 percent’ rule, businesses are allowed to write off the cost of lobbying against their income, thereby potentially reducing the amount paid in taxes. Although neither the panel nor the members of the Joint Tables suggested permitting unlimited or partisan advocacy activity by registered organizations, both argued in favour of more permissive regulations.

  • 31 The June 1999 Supreme Court decision in the case of Bazley vs. Curry found the board of a voluntar (...)

44Finally, significant regulatory reform was understood to be essential by both reviews in providing an appropriate, facilitating environment that would enable the voluntary sector to do what it does best and provide a foundation for a more constructive relationship. This includes limiting the enormous burden of personal liability borne by directors of voluntary organizations that is, according to at least anecdotal reports, starting to discourage professionals and other volunteers from sitting on boards of directors.31 Although this falls partly within provincial jurisdiction, the federal government could play an important role as convenor or leader of a review of directors′ liability. Other proposed regulatory reforms focused on: simplifying reporting requirements, especially for small organizations; introducing intermediate sanctions short of deregistration for non-compliance with CCRA regulations; and providing better guidelines for related business activities.

The Voluntary Sector Initiative

  • 32 The six substantive Joint Tables deal with the accord, regulatory, capacity, national volunteerism (...)

45The federal government′s initial response to the work of the Joint Tables was made in early June 2000. It announced the Voluntary Sector Initiative to institutionalize an ongoing joint process and provide $94.6 million in funding for a package of reforms. In terms of process, the Voluntary Sector Initiative is enormously complex, with the bulk of the work of elaboration of details and implementation directed by six Joint Tables modelled directly after the 1999 experiment, assisted by a Joint Co-ordinating Committee that manages cross-cutting matters related to consultation and communications strategies.32 A reference group of eight senior ministers has been formalized to provide political leadership, with a core group of assistant deputy ministers working as an executive committee constituted to provide strategic direction within the public service (a counterpart steering committee of Voluntary Sector Roundtable members provides direction on the voluntary sector side). Within government, the Voluntary Sector Task Force in the Privy Council Office continues to provide staff support, and a similar secretariat has been funded by the Voluntary Sector Initiative to provide support for voluntary sector participation. The Tables were thus designed to lead the biggest engagement process that has ever been undertaken with a broad diversity of the sector, from the national to grassroots level.

46In terms of content, the government has taken an important step toward establishing a more constructive and balanced relationship with the sector, generally following the advice of the Joint Tables. These reforms include:

  • development of an accord between the federal government and the voluntary sector;
  • support of almost $10 million for celebration of the International Year of Volunteers; and development of an ongoing initiative to promote volunteerism;
  • various capacity building measures, including skills development, research, and increased knowledge of the sector; a Satellite Account within the System of National Accounts on the economic value of voluntary activity; routinization on a three-year cycle of the National Survey of Giving, Volunteering, and Participation; and policy internships and academic fellowships;
  • assistance with IM-IT to promote both connectivity to the Internet and better online tools; and
  • some regulatory reform and increased transparency including greater public access to the information on charities filed annually with the CCRA; a simplified tax form for registered charities with annual incomes under $100,000; and the introduction of clearer guidelines on the conduct of related business activities.

47In addition, further study is being undertaken regarding the design of a new oversight institution, funding policies, directors’ liability, intermediate sanctions, and a less expensive appeals process for those organizations refused registration by the CCRA.

48This initiative is clearly a major step by the federal government toward building a more positive relationship with Canada′s voluntary sector. Its significance should in no way be diminished. To date, however, the initiative does not address the top priorities of either the Broadbent Panel or the Joint Tables. There is no commitment to institutional change; no mention of expanding access to the tax system; no significant regulatory reform regarding public policy advocacy; nor joint discussion of funding regimes. There is much to be said for careful analysis before launching a major policy or institutional change. But in this case, a necessary element of social experimentation will be involved: no amount of study will work out beforehand all the kinks in the implementation of a new regulatory commission or of new approaches to advocacy – inevitably, a certain degree of ongoing tinkering will be required.

49The innovative process of genuine collaboration that characterizes the Joint Tables has already increased trust between federal public servants and sector leaders. But it also raises expectations that real change is possible and that the government is interested in pursuing such change. The federal government has too much at stake to allow reform on the top priorities to be stalled indefinitely or, worse, abandoned on the so far unconvincing premise that it would be too expensive.

Conclusion: Canadian Distinctiveness, Distinctive Contradictions

50The reasons why and the way in which the relationship between the federal government and the voluntary sector is being reshaped shares much with other developed countries. Many of the same issues are on the agendas of other countries, and some of the same instruments, such as accords, are being tried out in a variety of jurisdictions. In many respects, however, the reform process of the Voluntary Sector Initiative is distinctively Canadian and, as a result, has generated a number of contradictions that will need to be resolved before a more constructive relationship can truly come into being. Not surprisingly, these distinctive patterns and their attendant contradictions reflect age-old tensions in the Canadian political system – the role of the state, the complexities of federalism, and the nature of democracy.

  • 33 This point is made perhaps most clearly in relation to the women′s movement. See S. Burt, “Women′s (...)

51One intriguing characteristic of the contemporary interest in building a stronger, more engaged civil society is that the reform process looks largely to the state to achieve this. In Canada, in contrast to the US for example, social movements and the voluntary sector have long looked to the state not only to provide legitimacy as part of a citizenship regime, but also to offer financial and other types of support.33 This state-centred approach is partly a matter of philosophy – that the state remains a relevant and central institution despite less public trust and confidence – but it is also practical. In the absence of a strong philanthropic community or corporate support for the voluntary sector, the resources for capacity building are not going to emerge spontaneously from other sources. The underlying contradiction is that, although the federal government has accepted a responsibility for capacity building, it is caught between a neo-liberal and an enabling model of the state. This is evidenced by its unwillingness to review funding regimes in a joint manner as part of the Voluntary Sector Initiative. To some degree, this unwillingness reflects a reluctance to get locked into operational funding for certain categories of groups – that is, to begin another version of the abandoned Secretary of State programmes, thus tying up resources and privileging the recognition of some groups over others. The dilemma, however, is that the current funding regime, with its inherent uncertainty caused by short-term project funding, limits the ability of voluntary organizations to undertake strategic planning – one of the major barriers to strengthening capacity in the sector. To be clear, voluntary sector leaders are not simply asking for more money but for more effective, stable funding regimes. If governments are truly interested in enhancing the capacity of the sector to fulfil its potential, funding regimes will eventually need to be addressed.

52A second, characteristically Canadian feature is that the weight of state-voluntary sector relationship-building has been borne primarily by the national state, even though the regulation of the voluntary sector is constitutionally provincial jurisdiction. A particularly Canadian twist to this relationship-building is its link to promoting national unity, from the federal perspective. By building stronger, more direct relationships with citizens, the federal government hopes to increase its visibility and credibility, both of which have been diminished as direct transfers to individuals have given way to indirect transfers through provinces and tax credits. One intended benefit of a stronger relationship with more active citizens and voluntary organizations is that it may provide a welcome foil to provincial interests in times of difficult federal-provincial relations. The federal initiative derives its legitimacy not only from the fact that the federal government does have a direct relationship with voluntary organizations and citizens, but from the fact that it became the de facto regulator through a charitable registration system tied to the national tax system. The contradiction is that, for fear of stepping on provincial jurisdiction, the federal government will be neither eager to wear its acquired role of regulator in an obvious manner, nor to get on with the vital need to reform regulatory institutions, either on its own or in collaboration with the provinces.

  • 34 For a discussion of participatory democracy, see J.J. Mansbridge, Beyond Adversary Democracy (Chic (...)
  • 35 In interviews with government officials in England, Scotland, and Ireland, even those working in t (...)

53The final, distinctively Canadian aspect is that the reconstruction of a new and stronger relationship between the federal government and the voluntary sector is caught between two different models of democracy. These can be characterized as traditional representative democracy that focuses on elected officials as the primary vehicle for representing and responding to the views of constituents, and participatory democracy that puts a premium on engagement and participation of citizens between elections, whether representing themselves directly or participating through their civic organizations.34 Caught between these two approaches to democracy, the Voluntary Sector Initiative faces a contradiction. Though an explicit goal is to encourage active citizenship, the federal government has so far been unwilling to acknowledge the legitimacy of or permit greater public policy advocacy by citizen groups if they receive a public benefit through the tax system as registered charities. It has also curtailed any discussion of expansion of access to official registration for community organizations that may be more likely to engage in advocacy. This concern over advocacy by registered charities is a Canadian quirk and is simply not an issue in other countries that are engaged in similar processes of renewing sector-state relationships.35 It is both a fiction and a danger to cleave to traditional models of representative democracy in a era in which more collaborative governance and a stronger, civil society-based model of the voluntary sector are needed and encouraged.

54It would not be an exaggeration to say that the Voluntary Sector Initiative may well mark the beginning of a new era between the federal government and the voluntary sector. The federal government′s reluctance to move forward on the top priorities identified by both the Broadbent Panel and the Joint Tables, however, suggests that it still has difficulty working out some peculiarly Canadian contradictions. It appears to be stuck on the old image of the sector as primarily a service provider, rather than as a community builder. Perhaps, in the ongoing Joint Tables, movement toward addressing the key aspects of a renewed relationship will be forthcoming. Until this happens, a genuine partnership, able to accommodate both more collaborative forms of governance and more active civil society will not be complete.

Notes

1 A few examples illustrate the extent of innovation taking place. In 1998, the Blair government negotiated a “compact” (what Canada is calling an accord) with the voluntary sectors in each of England, Scotland, Wales and Northern Ireland – an experiment that is now being taken up by New Zealand, among others. See N. Deakin, “Putting Narrow-Mindedness out of Countenance”: The UK Voluntary Sector in the New Millennium (London: Centre for Civil Society Studies, London School of Economics, January 2000). Following a three-year consultation process, Ireland has recently developed a White Paper on relationships between the community/voluntary sector and the state that is intended to form the basis for long-term strategic planning aimed at supporting the sector′s contribution in building a more inclusive society. Government of the Republic of Ireland, National Anti-Poverty Strategy, A White Paper on a Framework for Supporting Voluntary Activity and for Developing the Relationship between the State and the Community and Voluntary Sector (Dublin: The Stationery Office, 2000). In South Africa, new legislation and the creation of a Directorate for Nonprofit Organizations have attempted to create an environment in which civil society organizations can flourish. See B. Streek, “State Bid to Engage NGO Sector,” Daily Mail and Guardian (15 February 2001).

2 For a discussion of the nature of the sector in Canada, see M. Hall and K.G. Banting, “The Nonprofit Sector in Canada: An Introduction,” in The Nonprofit Sector in Canada: Roles and Relationships, ed. K.G. Banting (Montréal and Kingston: McGill-Queen′s University Press, 2000).

3 Panel on Accountability and Governance in the Voluntary Sector, Building on Strength: Improving Governance and Accountability in Canada′s Voluntary Sector, (Ottawa: Voluntary Sector Roundtable) 1999:11.

4 Government of Canada/Voluntary Sector Joint Tables [hereafter Joint Tables], Working Together: Report of the Joint Tables (Ottawa: Voluntary Sector Task Force, Privy Council Office, 1999): 29, available at <http://www.vsr-trsb.net/publications/pco.e.pdf>; see also G.R. Ramsey and R. Reynolds, The Social Reconnaissance Project: Discovering Philanthropic Leadership Opportunities (Vancouver: Vancouver Foundation, 1997): 14.

5 Joint Tables, Working Together, 19.

6 L.A. Pal, Interests of State: The Politics of Language, Multiculturalism and Feminism in Canada (Montréal and Kingston: McGill-Queen′s University Press, 1993): 75-6; J. Jenson and S.D. Phillips, “Regime Shift: New Citizenship Practices in Canada,” International Journal of Canadian Studies 14 (Fall 1996): 111-36.

7 Pal, Interests of State, 85-6.

8 Ontario Law Reform Commission, Report on the Law of Charities (Toronto: Ontario Law Reform Commission, 1997): 262-71.

9 Exceptions are Alberta which has tried, half-heartedly, to regulate fundraising; Ontario whose Office of the Public Guardian and Trustee has some, rarely used, supervisory role over the conduct of charities; and British Columbia which has created a ministry responsible for the voluntary sector. Beginning in 2000, several provinces have taken a more active interest in the health of and provincial relationship with the voluntary sector. The government of Newfoundland and Labrador has developed a Strategic Social Plan that contains accord-like provisions (available at <http://www.gov.nf.ca/ssp>); Québec has initiated a policy on community action (a description of the policy is available at <http://www.mss.gouv.qc.ca/saca>); and British Columbia announced its intention to develop a framework agreement (or accord) with the sector. In 2000, the Québec government initiated a process to develop a partnership with community organizations.

10 Although Québec has not used its powers to extensively regulate the sector, it has perhaps more constructive relationships in service delivery than most other provinces, largely because Québec has not chosen to cut social programmes to the same extent as other provinces. It has also understood the role of the sector in nation building, although not used the sector as fully as it might in this regard. In recent years, the Québec government has been active in creating an ‘économie sociale,’ a hybrid of the voluntary and for-profit sectors, to provide many social services and boost employment. For a comparison of the stance of the Québec and Ontario governments toward the sector in the area of homecare, see J. Jenson and S.D. Phillips. “Distinctive Trajectories: Homecare and the Voluntary Sector in Québec and Ontario,” in The Nonprofit Sector in Canada: Roles and Relationships, ed. K.G. Banting (Montréal and Kingston: McGill-Queen′s University Press, 2000).

11 S.R. Smith and M. Lipsky, Nonprofits for Hire: The Welfare State in the Age of Contracting (Cambridge: Harvard University Press, 1993).

12 Jenson and Phillips, “Distinctive Trajectories.”

13 Jenson and Phillips, “Regime Shift,” 121-3.

14 M. Berm, “In the Dark: Role and Value of Charitable Sector Little Known Among Public,” Inter Sector: A Newsletter for Imagine Community Partners 4 (3) (March/April, 1998): 2.

15 A. Drache with F.K Boyle, Charities, Public Benefit and the Canadian Income Tax System: A Proposal for Reform (Toronto: Kahanoff NonProfit Research Initiative, 1998); D.J. Bourgeois, The Law of Charitable and Nonprofit Organizations, 2nd ed. (Toronto: Butterworths, 1995); and R. Hirshhorn and D. Stevens, Organizational and Supervisory Law in the Nonprofit Sector (Ottawa: Canadian Policy Research Networks, 1997).

16 In early 1999, the Supreme Court rendered its decision in the case of the Vancouver Society of Immigrant and Visible Minority Women, a group that was denied registration by Revenue Canada on the basis that its educational goals do not fit the traditional heading of education and that the community it intended to benefit was not sufficiently broad to fit under the community benefit heading. The decision was a loss for the group. In a split decision, the Court ruled in favour of Revenue Canada, noting that the common law definition could not be stretched that far. The victory of the case for the sector is that the Court explicitly invited Parliament to rework the definition of charity, arguing that this should be done by the legislature not the courts. For a brief discussion, see A. Drache, “Canadian Developments,” International Journal of Nonprofit Law 1 (3) 1999. Available at <http://www.icnl.org/journal>.

17 Such were the perceptions of many in the sector. The differential enforcement of regulations and more conservative approach to registration by the CCRA is difficult to assess empirically, however, due to the confidentiality regulations under which the department operates.

18 Ontario Law Reform Commission, Report, 250.

19 Ontario Law Reform Commission, Report, 262.

20 M. Taylor, “Between Public and Private: Accountability in Voluntary Organizations,” Policy and Politics 21 (1) (1996): 69.

21 Municipality of Metropolitan Toronto, City of Toronto and Social Planning Council of Metropolitan Toronto, Profile of a Changing World: 1996 Community Agency Survey (Toronto: Municipality of Toronto, 1997).

22 Commission on the Future of the Voluntary Sector, Meeting the Challenge of Change: Voluntary Action into the 21st Century (London: National Council of Voluntary Organizations, 1996).

23 I cannot claim that the following is a dispassionate or objective analysis because I served as the Research Director for the Panel.

24 The members were: the Honourable Ed Broadbent, Robert Brown, Dale Godsoe, Angela Kan, Arthur Kroeger, and the Honourable Monique Vézina.

25 A discussion guide could be downloaded for use by any organization that wanted to facilitate its own session, the results of which could be forwarded to the panel if desired, although the goal was as much to get community organizations thinking about sectoral issues as it was to obtain feedback. Anecdotal reports are that this engagement process was highly successful and that groups still use the discussion guide to animate strategic planning discussions. It is a telling sign of contemporary pressures in the sector that, in many locales, these sessions were the first time that staff and directors from different subsectors (e.g. social services, arts, faith communities, women′s organizations) had ever been in the same room at the same time to discuss issues of sectoral importance. Most are so busy fighting daily fires that they have little time to think about policy issues of sectoral importance or take the time to attend meetings. In this case, not only did local leaders attend, but virtually all had read the discussion paper thoroughly and had thoughtful comments to make on it. It is also telling of Canadian political culture that the Broadbent Panel often had a hard time convincing participants that it was not a government-sponsored body.

26 Individually, the Joint Tables worked in different ways: some commissioned research, some invited speakers, and some relied on the expertise of those at the table.

27 Although no preference among these three models was officially endorsed in the report of the Joint Tables, it was made clear that the voluntary sectors of the Regulatory Table favour a quasi-judicial commission. See Joint Tables, Working Together, 56.

28 The argument that extending access to the tax system in this manner would open the door to radical fringe groups, such as neo-nazis, is unfounded in my view. As the Joint Table rightly noted, additional criteria for acceptance as a deemed charity might be adherence to the Canadian Charter of Rights and Freedoms and international conventions. For some thoughtful discussion on this point, see Government of Canada/Voluntary Sector Joint Tables, Working Together: Supplementary Paper A: Education, Advocacy and Political Activity (Ottawa: Voluntary Sector Task Force, Privy Council Office, 1999)

29 It is unlikely, however, that the relationship between the number of organizations registered under the tax system and the amount of individual giving is a linear one. For instance, if there were an additional 10 per cent of organizations to which you could make a tax receipted donation, would you necessarily increase your charitable giving by 10 per cent, or might you simply distribute your current level of giving differently?

30 Joint Tables, Working Together.

31 The June 1999 Supreme Court decision in the case of Bazley vs. Curry found the board of a voluntary organization vicariously liable for sexual abuse by an employee many years earlier. This has considerably expanded the scope of liability for directors and naturally made many boards very nervous.

32 The six substantive Joint Tables deal with the accord, regulatory, capacity, national volunteerism initiative, awareness, and information management-information technology. In addition to the Joint Tables, there are a number of specialized working groups dealing with issues such as directors′liability. Although the Voluntary Sector Initiative does not address advocacy or funding in a joint manner, there are sector-only working groups on both and a government-only study on federal funding practices.

33 This point is made perhaps most clearly in relation to the women′s movement. See S. Burt, “Women′s Issues and the Women′s Movement since 1970,” in A. Cairns and C. Williams, eds., The Politics of Gender, Ethnicity and Language in Canada (Toronto: University of Toronto Press, 1996) and S. Bashevkin, Women on the Defensive: Living through Conservative Times (Chicago: University of Chicago Press, 1998).

34 For a discussion of participatory democracy, see J.J. Mansbridge, Beyond Adversary Democracy (Chicago: University of Chicago Press, 1983) and B. Barber, Strong Democracy: Participatory Politics for a New Age (Berkeley and Los Angeles: University of California Press, 1984).

35 In interviews with government officials in England, Scotland, and Ireland, even those working in the tax departments, described advocacy to me as the life blood of democracy and an expected, respected role of charities. (Personal communication, 2000). See S.D. Phillips, “Voluntary Sector-Government Relationships in Transition: Learning from International Experience for the Canadian Context,” in The Nonprofit Sector in Interesting Times: Case Studies in a Changing Sector, ed K. Brock and K.G. Banting (Montréal and Kingston: McGill-Queen′s University Press, 2003).

Auteur

Associate Professor of Public Administration, Carleton University, where she teaches courses in urban government, policy research, and the voluntary sector. She is past editor of both the annual review, How Ottawa Spends and of the journal Canadian Public Policy/Analyse de politiques. From 1997-99, she was the Research Director of the Broadbent Panel on Accountability and Governance in the Voluntary Sector. She is a Fellow with the Canadian Centre for Management Development and acts as Policy Advisor to the Voluntary Sector Initiative, a coalition of national voluntary organizations and several government departments. Among her many other functions, she is also the current Director of the Centre for Voluntary Sector Research and Development at Carleton University

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