Merci beaucoup pour me donner l'occasion de vous parler cet après-midi.
My name is Rachel Laforest, and I'm an associate professor at the School of Policy Studies at Queen's University. I head up the public policy and third sector initiative. Most of my research focuses on government and non-profit sector relationships. What I wanted to do this afternoon is to give you a broad-brush overview of some of the trends that I think are important for the work of your committee.
First, I would like to start out by acknowledging that since 1994 the federal government has adopted a number of initiatives to make the tax treatment of charitable donations more generous. I'd like to applaud the committee on these measures, for they have yielded some good results. According to data collected by Statistics Canada, Canadian tax filers claimed $8.3 billion in donations in 2010. This was an increase of over $500 million from 2009. There is reason to be pleased that Canada has one of the highest levels of charitable giving around the world.
However, that doesn't mean that we should be complacent, because this data obscures another reality: the base of donors in Canada has been steadily shrinking. The number of donors has actually declined from 30% in 1990 to 23.4% in 2010. Not only is the base of donors shrinking, but a high proportion of our charitable contributions are borne by very few individuals.
In 2004, the Canada survey of giving, volunteering, and participating showed that 9% of our donors are responsible for 62% of our charitable donations. Therefore, our donor base is fragile and precarious. I believe very strongly that there is cause for concern. The resource base in the voluntary sector is weakening, particularly in light of the current economic situation and the government cuts that are looming on the horizon.
For this reason, there is still more work to be done by your committee to create incentives to foster charitable giving. The voluntary sector is a significant social, political, and economic force in Canada. It accounts for 8.6% of the GDP and has a full-time equivalent workforce of over two million. More importantly, it brings value to all aspects of our communities, and it has a direct impact on the quality of life of Canadians.
The voluntary sector relies on three main sources for its funding. It relies on government funding, charitable donations, and earned income. I'm going to focus on the first two.
As we all know, the federal government and some levels of provincial governments are having to deal with serious budgetary constraints. Already, federal government expenditures as a percentage of GDP have decreased from 21.5% in 1992 to 17.1% in 2007. So in the face of the deficit reduction measures that are coming, we will most likely see reductions in contributions from various levels of government to the voluntary sector.
In addition, many of the services that were formerly provided by the federal government and other levels of government are being reduced or transferred to the voluntary sector. The assumption is that voluntary sector organizations will be able to pick up that burden. I think it's important to ask ourselves whether the voluntary sector actually has the capacity and the ability to take up this additional burden, because ultimately it will have an impact on our communities and our quality of life.
In the context of declining government resources, charitable donations will become even more important as a source of revenue. Already more than half of the $112 billion raised in this sector comes from private funding, and a significant portion of that comes from charitable donations from individual Canadians.
I want to come back to the original fact that 9% of our donors are responsible for 62% of our charitable donations. What this data indicates is that the measure of our society depends, to a large extent, on a small proportion of Canadian adults, who Paul Reed has described as the “civic core”.
I don't know if Paul is going to talk about that today, but the civic core means that there's a small number of individuals that account for more than two-thirds of all volunteering, giving, and community activities in Canada. These contributory behaviours are all linked, and they all come from that same small portion of civic donors. What we know about this civic core is that it tends to be older, religious, well-educated, in higher-status and higher-income occupations, with children between 6 and 12, and living in communities outside of major metropolitan centres.
Two of these characteristics are really important. The first one is the older population. Our population is aging, and the segment of mature donors—those born before 1945—who tend to be amongst the most generous, is rapidly shrinking. Secondly, we are facing a decline in religious belief. This decline may have implications for overall levels of charitable giving in the future, as we may lose more of our generous givers.
Because the donor base in Canada is neither wide nor deep, these trends place charitable giving in a precarious situation. If they remain unchanged, the long-term consequences will be a serious depletion of civic resources and a diminished capacity for voluntary organizations to support well-being.
To conclude, I invite the committee to consider tax incentives that can reverse the erosion of the donor base. We cannot take the health of the voluntary sector for granted.
Thank you.