What is in Budget 2021 for Community Supports?
Improving Food Security
At the height of lockdowns last spring, one in seven Canadians experienced food insecurity. Food Banks Canada reported a significant increase in the use of food banks, especially among first-time users. The federal government responded quickly, investing nearly $250 million to support local hunger relief initiatives.
Although things have improved, food bank lineups are still long, community food organizations are working long hours, and more than a third of those who rely on food banks are children. In Canada, no one should need to go hungry. To provide continued support to emergency hunger relief organizations:
- Budget 2021 proposes to provide $140 million in 2021-22 to top up the Emergency Food Security Fund and Local Food Infrastructure Fund, which would prevent hunger, strengthen food security in our communities, and provide nutritious food to more Canadians.
Helping Charities, Non-profits, and Social Purpose Organizations Grow
Communities across Canada face complex social, economic, and environmental challenges—many of which have been deepened by the COVID-19 crisis. Thousands of charities, non-profits, co-operatives and other social purpose organizations are committed to addressing these challenges directly at the community level. During the pandemic, many have seen demand for their services surge while watching their revenues plummet.
Social finance is about mobilizing private capital to bring about the public good. To support the growth of social finance in Canada, strengthen our social sector, ensure our most vulnerable can access much-needed services, and help our communities recover more quickly:
The government proposes to launch planned disbursements of the $755 million Social Finance Fund and deploy up to $220 million over its first two years. It is estimated that the Social Finance Fund could attract up to $1.5 billion in private-sector capital to support the development of the social finance market, create thousands of new jobs, and drive positive social change.
To ensure charities, non-profits, and social purpose organizations have the skills and capacity needed to access social finance opportunities:
- Budget 2021 proposes to renew the Investment Readiness Program for $50 million over two years, starting in 2021-22. This program supports charities, non-profits, and social purpose organizations in capacity-building activities such as business plan development, expanding products and services, skills development, and hiring. Supporting Community Service Organizations A majority of the workers in the charity and non-profit sector are women. This sector has been significantly affected by the pandemic, causing further impacts on the she-cession. The effects have been especially significant for small and rural charities, whose ability to raise funds has been severely impacted even as the pressures for their services have grown.
Recent research from Imagine Canada suggests that as of late 2020, the average charity has reported a revenue decline of 16 percent. Since the pandemic began, community service non-profit and charitable organizations have struggled to provide the fitness, children’s programs, seniors programs, and community building projects on which Canadians rely. These organizations have not been able to quickly adapt and transition to remote work and online programming, which has made it hard for workers and left a gap in our communities when demand is higher.
- Budget 2021 proposes to provide $400 million in 2021-22 to Employment and Social Development Canada to create a temporary Community Services Recovery Fund to help charities and non-profits adapt and modernize to better support the economic recovery in our communities.
Boosting Charitable Spending in Our Communities
Every year, charities are required to spend a minimum amount on their charitable programs or on gifts to qualified donees. That is known as the “disbursement quota,” which ensures that philanthropic donations are being invested into our communities.
While most charities meet or exceed their disbursement quotas, a gap of at least $1 billion in charitable expenditures in our communities exists today. Furthermore, growth in the investment assets of foundations has increased significantly in recent years. In 2019, philanthropic foundations held over $85 billion in long-term investments. But grant-making and other charitable activities have not kept pace.
Budget 2021 proposes launching public consultations with charities over the coming months on potentially increasing the disbursement quota and updating the tools at the Canada Revenue Agency’s disposal, beginning in 2022. That could increase support for the charitable sector and those that rely on its services by approximately $1 billion to $2 billion annually.
Consulting on a New Canadian Social Bond
Social bonds are an opportunity to connect socially conscious investors with Government of Canada bonds that support social objectives such as reducing homelessness and improving access to high-quality early learning and child care.
- Budget 2021 proposes to explore the potential for social bonds to complement the government’s existing debt program. The government intends to include this topic as part of the Debt Management Strategy consultations this fall.
To read the Budget 2021 speech or to review the budget documents, please visit https://www.canada.ca/en/department-finance/services/publications/federal-budget.html