Canada’s latest budget makes big commitments to the social impact world. Here’s what you need to know.
Why It Matters
Social impact organizations have watched with alarm as the pandemic saps the livelihoods, food access, educational opportunities, jobs, and medical needs of Canadians — as well as their own capacity. Canada’s federal budget promises massive investments to correct that.
The words “social impact” never left Deputy Prime Minister Chrystia Freeland’s mouth as she tabled the 2021 federal budget in Ottawa on Monday afternoon, but the sector’s priorities feature prominently in her government’s spending promises for the coming year.
Social impact leaders were dismayed at their lack of representation in last year’s Throne Speech and fall economic statement, two proto-budget documents that made big promises on climate, employment, and EI reform policy, but barely mentioned the sector at all. That is no longer the case for the 739-page federal budget released on April 19.
It includes major spending commitments on a national child care policy, promises to create up to a million new jobs across Canada by the end of 2021, and concrete details on the launch of the Social Impact Fund — not to mention new philanthropic funding for Black communities and a renewal of the Investment Readiness Program.
As a third wave of COVID-19 threatens to overwhelm ICUs in Ontario, Alberta, and British Columbia, the federal government is struggling to both contain ongoing health catastrophes and prepare for a post-COVID world. “This budget is about finishing the fight against COVID,” Deputy Prime Minister Freeland said. But it also acknowledges the role social impact will play in stabilizing Canada amid the worst health crisis in a century.
Over $101 billion is on the table — here are the numbers that matter for Canada’s social impact sector:
A national $10-a-day childcare plan: $30 billion over 5 years
For fifty years, Canadian politicians, bureaucrats, academics, feminists, and families have advocated for a national childcare policy — where parents pay a low fee set by the government to access high-quality care. Only Quebec followed suit. After the COVID-19 pandemic’s economic downturn, many female workers — including many in the charity and non-profit sector — found themselves choosing between their children and their jobs. Restoring female employment to pre-pandemic levels (and improving them) will require robust policies to ensure that all women and families can go to work without juggling enormous childcare responsibilities. “There is agreement across the political spectrum that early learning and child care is a national economic policy that we need now,” Freeland said while tabling the budget. “This is social infrastructure that will drive jobs and growth. This is smart economic policy.”
The fall economic statement released by the Liberal government last year only talked about a $24 million investment in a secretariat to sketch out a national childcare plan. Monday’s budget goes much further. Ottawa is promising new investments of up to $30 billion over the next five years. This funding would cut the average fees of regulated early learning and childcare centres in half by the end of 2022, and eventually drop it to as low as $10 a day by 2026. It also includes $1.4 billion over five years to build up to 3,300 new childcare spaces for Indigenous communities.
Paying workplaces — including charities and non-profits — to hire employees: $595 million
Hiring is far from easy during a pandemic and subsequent economic slump. While the federal budget extends rent and wage subsidies launched last year, it also offers $595 million for the Canada Recovery Hiring Program to pay for a portion of the costs organizations are taking on as they reopen — whether those are hiring additional staff, increasing shifts, or boosting wages. (The exact calculations are based on the difference between an organization’s current payroll and whatever they were paying out before the pandemic struck). “For businesses that have been hit hardest by the pandemic, hiring the workers they need to grow is a cost they may be worried about taking on,” the budget says. “The government wants these businesses to be able to recover and grow by hiring more people so that workers are at the forefront of our recovery.”
The program seems to be aimed mainly at businesses, however, it does allow non-profits and charities to apply. But applicants need to move fast: the Canada Hiring Recovery Program is only available for “active employees” from June to November, and its reimbursement rate will drop over time to encourage employers to begin hiring as soon as possible.
A temporary Community Services Recovery Fund to help non-profits and charities: $400 million
It’s not news that charities and non-profits have struggled through the pandemic. As of late 2020, according to Imagine Canada, Canadian charities have seen an average revenue drop of 16 percent, while many struggle to meet increasing demand and to transition into the new digital-first reality. In January 2021, the leaders of some of Canada’s largest charities met with Social Development Minister Ahmed Hussen to ask for a $500- to $700-million relief fund for the sector, and the government provided just short of that.
The federal budget includes a proposed $400-million temporary Community Services Recovery Fund, spent over 2021 and 2022 and administered by Employment and Social Development Canada, “to help charities and non-profits adapt and modernize so they can better support the economic recovery in our communities,” according to the document.
Setting up a Black-led Philanthropic Endowment Fund to help Black Canadian communities: $200 million
The budget referenced Black Canadians 122 times. And in some ways, that’s no surprise: Black Canadians have been hit hard by the pandemic. They’re more likely than the general population to contract the virus, and nearly three times more likely to know someone who’s died of COVID-19. They’re also more likely to report layoffs and to worry about paying rent since the pandemic began. “We know the pandemic has exacerbated systemic barriers faced by racialized Canadians,” the budget reads.
In response, the federal government is proposing $200 million toward “an investment in a Black-led Philanthropic Endowment Fund, to help fight anti-Black racism and improve social and economic outcomes in Black communities.” The Foundation for Black Communities, a new Black-led foundation focused on community-driven philanthropy, asked the government for that same amount of funding — $200 million — in order to endow its fund in its pre-budget submission.
“This is groundbreaking and it will be a legacy piece for the government,” said Minister Ahmed Hussen of families, children and social development in a post-budget briefing on the budget and Black communities. “The next step is to work with the community very closely to get it right.”
The launch of Canada’s Social Finance Fund: $220 million over two years
Since the pandemic began last March, many in the world of social impact have called on the government to speed up the launch of the Social Finance Fund — the future of which has been uncertain in the face of COVID-19 — and to frontload the funding to help social purpose organizations respond to the ways the pandemic has hurt their communities. The 2021 budget proposes launching the fund, though it’s not clear exactly when, and doling out up to $220 million of that over the fund’s first two years. The original commitment was $755 million over 10 years.
“Communities across Canada face complex social, economic, and environmental challenges — many of which have been deepened by the COVID-19 crisis,” the document reads. “Thousands of charities, non-profits, co-operatives, and other social purpose organizations are committed to addressing these challenges directly at the community level…They are key partners in our work to reopen and rebuild our communities.”
Another two years of the Investment Readiness Program: $50 million
Social purpose organizations that aren’t quite ready to take on the Social Finance Fund’s loans will see support from the federal government, too, in the form of an extended Investment Readiness Program (IRP). The IRP “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,” the budget document reads.
Originally meant to wrap up this year with $50 million spent over the past two years, the budget proposes an additional $50 million to extend the program another two years, starting in 2021-22. Many in the world of social finance have been vocal about a need for more investment readiness support, especially among smaller charities and non-profits, leading up to the current IRP round’s closure last month.
More money for the Net Zero Accelerator Fund: (another) $5 billion over seven years
The Net Zero Accelerator made its debut in the Liberal government’s climate plan last December, a new initiative to help companies that emit large amounts of polluting emissions reduce their impact on the environment. Ottawa offered $3 billion over 5 years, but the federal budget is promising an additional $5 billion over the next seven years. “By investing in decarbonizing large emitters, transforming key sectors — from steel and aluminium to cement — and accelerating the adoption of clean technology across the economy…the Net Zero Accelerator will spur Canada’s shift to innovative net-zero technologies and attract the large-scale investments needed to meet our goal of net-zero by 2050,” the budget says.
This initiative represents a large portion of the $7.2 billion earmarked over the next seven years for the Strategic Innovation Fund, a major investment tool of the federal government launched in 2017 to champion sectors of the economy seen as ripe for growth in the coming years. These include not only the transformation of Canada’s heavy manufacturing and energy production — major sources of pollution — into cleaner and more sustainable industries, but also the expansion of Canada’s life sciences, agricultural, and aerospace sectors.
Improving long-term care conditions across Canada: $3 billion over the next five years
Elder care has been a front-page issue throughout the pandemic. The vast majority of those who’ve died of COVID-19 in Canada so far lived in long-term care facilities. According to the Canadian Institute for Health Information, Canada had the highest death rate among a study of 16 other OECD countries, including the United States, Hungary, Austria, Israel, and Slovenia. Freeland acknowledged Canada’s failures to care for residents while tabling the 2021 federal budget. “To them and their families, let me say this,” she said in French. “I am so sorry. We owe you so much better than this.”
Starting next year, the federal government will provide $3 billion over 5 years to Health Canada to support provinces and territories “…in ensuring standards for long-term care are applied and permanent changes are made,” the budget says, although it doesn’t go into specifics about what those changes should be. Healthcare is largely a provincial and territorial matter, but Ottawa is promising to work with local governments while also respecting their jurisdiction.
Building or repairing 35,000 housing units: $4.1 billion
People without access to housing have been among the most vulnerable to the COVID-19 virus — and the pandemic’s economic shocks have pushed others into or close to homelessness, too. “When the public health messaging has been ‘stay at home’ to save your life throughout, homelessness was a preexisting condition for COVID-19,” said Andrew Boozary, executive director of social medicine and population health at the University Health Network, in a recent Future of Good story. “We will need a generational response from all levels of government to finally end homelessness. And if not now, then when?”
The federal government’s response is $2.5 billion in new funding and a reallocated $1.3 billion in existing funds “in order to help build, repair or support 35,000 housing units.” The government will also reallocate $300 million from the Rental Construction Financing Initiative for repurposing rental office spaces in urban downtowns to create more affordable housing.
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