Tax credits could solve funding issues for Alberta’s non-profit sector: Danielle Smith

A highway in Alberta. Photo: Chris Henry

On the eve of the provincial election, Alberta premier Danielle Smith floated the idea of a volunteerism tax credit, donation matching and retention payments, but made no new funding promises for the province’s non-profit sector.

The United Conservative Party leader sat down with Calgary Chamber of Voluntary Organizations CEO Karen Ball for an online discussion about the non-profit sector on May 25.

Ball began the online session by outlining five key areas where non-profit organizations are looking for change, including a workforce strategy, better data, an “empowered” sector and streamlined access to government.

“Number one? Appropriate funding,” said Ball.

“We know that the non-profit sector has really been impacted by the pandemic and now the impacts of inflation.”

Even before inflation, Ball said historic underfunding of the non-profit sector in Alberta — coupled with issues around attracting and retaining staff — had pushed some organizations to the brink. “So we’re looking for something to show up in platform priorities that responds to this issue specifically,” she said.

A recent survey found 41 per cent of Alberta’s non-profits have seen an ongoing reduction in their capacity to provide services. A further 68 per cent of organizations polled said they’re also seeing an increased demand for service.

Smith said her party is focused on creating a “good business climate” and “diverse” economy in Alberta, which will in turn provide Albertans with wages high enough to allow them to contribute to charitable causes. She said her government has committed $330 million to non-profits over the next three years.

As in most provinces and territories, many non-profits in Alberta are tasked with providing services that would otherwise be provided by government — including disability services. Ball said the sector is looking for an additional $100 million in funding.

Smith believes recent  enhancements to an existing tax credit will encourage Albertans to donate to non-profits. Charitable donations are now tax deductible at 75 per cent, the same rate as political donations. “We’re hoping those kinds of initiatives bring more dollars into the non-profit sector,” she said.

The provincial government is currently matching donations made to the Canadian Red Cross in support of wildfire relief, as is the federal government, and Smith suggested a similar scheme could possibly be established in support of non-profits.

“Maybe there’s a way for the different levels of government to work together on that to achieve that hundred million target,” she said.

When questioned about funding challenges facing the Alberta Foundation for the Arts, including a 10 per cent budget drop since 2019, Smith suggested implementing a tax incentive similar to the one supporting the province’s film industry.

“I don’t have specifics about exactly how it would work,” Smith said. “I’ll put it to you. If you look at the Alberta film tax credit and then come to us with something that might be structured in a similar way, then we can do the math on that and see if it would be able to be something that we could afford to do.”

The NDP has promised a 50 per cent increase in funding for the Alberta Foundation for the Arts, as well as a standalone “Arts Capital Grants Program” in support of urban arts projects and a new Live Entertainment Advisory Council.

As for volunteer shortages, something non-profits across Canada are experiencing, Smith suggested implementing a volunteerism tax credit. “For some of our more senior citizens, having a tax credit on their time might be a way for them to help save a little bit on their tax bills,” she said. “So I’m open to those kinds of ideas.”

She also suggested mid-career Albertans combine full-time employment with “soul work” to help ease staffing shortages.

“We can make it easier for people to be able to have gig jobs in the social sector, so maybe they keep their full-time job or maybe they go down part-time, but they’re able to also have the ability to augment their time with working in the social sector,” she said.

Smith also promised a new “retention tax credit” designed to lure workers to the province, which would see anyone who moves to Alberta for work receive a $1,200 payment after one year. She also said her party has worked to increase wages in the non-profit sector, particularly in healthcare, so that they more closely approximate those in the private sector.

Ball noted that non-profits employ nearly 300,000 Albertans and contribute $5.5 billion to the provincial economy every year, but that those employed in the sector earn 35 per cent less than their private sector compatriots.

Albertans head to the polls today, May 29.