Finance Committee on May 28th, 2026

[The Chair, Liberal, Karina Gould]

Good morning, everyone.

I call this meeting to order.

Welcome to meeting number 41 of the House of Commons Standing Committee on Finance.

I would like to remind participants of the following points as we get started.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mic, and please mute yourself when you are not speaking.

For those on Zoom, at the bottom of your screen, you can select the appropriate channel for interpretation: floor audio, English or French. For those in the room, you can use the earpiece and select the desired channel.

I would like to remind witnesses that committee members may ask questions in either French or English. If you will need interpretation, please take a moment now to prepare your earpiece and select the listening channel you need in advance in order to take full advantage of the time allotted for questions and answers.

I remind you that all comments should be addressed through the chair.

Pursuant to Standing Order 83(1), the committee resumes its pre-budget consultations in advance of the 2026 budget.

I would now like to take a moment to welcome our witnesses.

From GIV3, we have John Hallward, chairman of the Hallmont Foundation.

From Imagine Canada, we have Bruce MacDonald, president and chief executive officer.

From the YMCA Canada, we have Kevin Muir, chief operating officer.

From the YWCA Canada, we have Aline Nizigama, national chief executive officer.

We will now begin with opening statements. You will each have five minutes.

Mr. Hallward, we will begin with you.

[John Hallward, Chairman, Hallmont Foundation, GIV3]

Good morning.

Thank you for the opportunity.

My name is John Hallward, and I am the president of GIV3, a registered Canadian charity.

I'm here to recommend the creation of a new national social sector fund to help invest in the greater capacity of the charity sector, which would have no cost to the federal budget. It would not require taxpayer money, and it would directly address the growing charity crisis affecting tens of million of Canadians every day.

As we all can appreciate, Canada's charitable sector plays a significant role in every community across the country. It represents over 8% of our GDP, employs well over 2.8 million people and serves tens of millions of Canadians.

Few know that our charity sector is struggling on many levels. Statistics Canada reports that both financial donations and volunteered hours continue to decline in Canada, threatening the future of the sector. Other surveys indicate that charities are experiencing increased burnout, with a significant portion of charities reporting that they cannot keep up with demand for their services. The recent rise in costs is just exacerbating the problem. Statistics Canada summarizes this as a widening charity gap. Such structural problems require systemic solutions as a public good.

Key stakeholders support the idea of a social sector fund, including the majority of operating charities in Canada and 80% of Canadian taxpayers, as measured by an Ipsos poll. What is so attractive to all is that our recommendation does not require taxpayer money. Instead, we're proposing a self-financing social sector fund created through a modest amendment to the Income Tax Act. The fund would be financed by redirecting a portion of charitable granting from philanthropic foundations. These are funds that foundations are already obliged to grant under their current disbursement quota. Let me explain how this works.

Canadian philanthropic foundations are required by law to spend a minimum percentage of their assets annually on charitable activities. This is called their disbursement quota. We're proposing that a very small fraction of this quota be directed to the funding of the new national social sector fund for the strengthening of the whole sector. This is why there would be no incremental cost to the federal budget.

One approach is to mandate a very small multiple of foundation investment assets. An alternate approach is to follow what has been done in the United States, which is to levy a 1% income tax on foundations' investment income. Either option would equate to a rounding error in size to any one foundation but would add up to between $50 million and $150 million annually for the sector fund based on the small rate you choose to establish. There would be no new tax and no incremental financial burden on the foundations; this would be money they must grant anyway.

To be clear, there is no shortage of money in the charity sector. There is close to $200 billion in foundation investment accounts today in Canada. We just need a reallocation of a minor fraction of these funds in smarter ways.

To operationalize this fund, we're proposing the creation of an independent, fit-for-purpose fund agency to receive the funds and allocate them according to a strategic plan. This agency would be composed of the many peak organizations already in existence in Canada. In turn, this would not be a threat to the current establishment but would bring funding to invest in their stronger performance.

The intention of the fund is to build sector capacity and efficiency. It would work on the idea that a rising tide lifts all boats. I can share examples of a few possibilities for this fund.

One would be a coordinated campaign to strengthen generosity as a public good. This would be akin to Participaction as a social campaign and would work to support greater generosity as a social norm.

The fund could create a purchasing co-op, an organized effort to build greater buying power on behalf of the tens of thousands of small, fragmented charities. This would help to reduce costs for software licences, technology, insurance, professional services and so on, and this alone could save the sector tens of millions of dollars annually.

The fund could support coordinated training and best practices. The fund could invest in a best practices hub, similar to the What Works Network in the United Kingdom. This could help harmonize learning and train charities on best practices to boost their efficiencies and effectiveness.

Why does this require the federal government? It's because such a new sector fund would solve problems that are not getting funded independently in our current ecosystem, and also because it offers sustained, long-term and reliable funding to invest in building sector capacity just when Canada needs it most.

The sector fund is a structural solution. If you were to give more money to charities today, they would still be fragmented, lacking shared infrastructure and duplicating costs. We would still be failing to address the decline in generosity in Canada.

It's a strategic idea, it's sector-led, it's transparent, it doesn't create new bureaucracy within government and it adds no cost to the federal budget.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Hallward. Can you wrap up very briefly?

[John Hallward]

Let me summarize.

The sector is too important to be ignored. The status quo is failing us. We need your leadership to amend the Income Tax Act and implement systemic changes to make the charitable sector stronger.

Thank you.

[The Chair, Liberal, Karina Gould]

Thank you very much, Mr. Hallward.

We will now continue with Mr. MacDonald from Imagine Canada for five minutes, please.

[Bruce MacDonald, President and Chief Executive Officer, Imagine Canada]

Thank you, Madam Chair and members of the committee for the opportunity to appear here today.

It's nice to see sector colleagues.

I want to begin by making a simple but important point: The non-profit sector is not peripheral to Canada's economy or its resilience. It is core national infrastructure. Non-profits contribute roughly $244 billion annually—approximately 8.4%—to the gross domestic product, or GDP. They employ nearly three million Canadians, more than several of our major industries.

Non-profits help government deliver on its priorities in efficient and locally responsive ways, by leveraging volunteerism, philanthropy, community expertise and trusted relationships.

At the same time, organizations across the sector are under real and growing pressure from rising demand, workforce challenges, increasing costs and administrative burden. That context matters as we consider what practical reforms could look like.

This morning I'm going to speak to a number of recommendations that, when adopted, would dramatically improve the operating environment in which charities and non-profits deliver their services.

The federal government's engagement with the non-profit sector remains fragmented and inconsistent. There's currently no coordinated mechanism to assess how legislation, regulation, reporting requirements and funding practices collectively affect charities and non-profits. As a result, issues are often identified only after policies are already in place, creating inefficiencies and avoidable burdens for both government and the sector.

Our pre-budget submission recommends the non-profit sector be meaningfully represented on federal advisory bodies related to economic growth, innovation, workforce development, digital transformation and regulatory modernization. We also call for the government to engage the sector in its planned modernization of the charitable framework and to renew the advisory committee on the charitable sector, which has been dormant since 2025.

We support efforts to strengthen transparency, accountability and public trust. We also see this as a genuine opportunity to modernize how charities, regulators, donors and government interact with one another. However, it's important to recognize that the overwhelming majority of charities and non-profits are doing their best to comply with increasingly complex requirements while operating under significant resource pressures.

We would encourage the government to resource the CRA not only as an enforcement body but as a modern regulator that also supports education, accessibility, consistency and successful compliance. In practice, this means clearer and more accessible guidance, improved digital filing systems, greater consistency and transparency in regulatory processes, and improving the ability of organizations to access timely support when questions arise.

Non-profits are one of the government's most important delivery partners, yet the current funding environment remains unnecessarily burdensome. Significant organizational capacity is spent navigating duplicative reports, rigid structures and excessively short funding terms, rather than delivering programs and services. For example, organizations that receive late notification of renewals continually lose qualified staff, which negatively affects program quality and leaves organizations in a perpetual state of start-up.

Our recommendations are practical and achievable.

Reform reporting requirements to focus on outcomes and meaningful accountability.

Adopt a one-partner, one-profile approach, so that organizations funded by multiple federal departments aren't repeatedly submitting the same administrative information.

Allow greater flexibility between budget lines as community needs evolve.

Move toward longer funding terms with reduced approval delays.

If the government is serious about cutting red tape and improving efficiency, the grants and contributions system is one of the clearest opportunities to do so.

In closing, I will say that the non-profit sector is essential to Canada's economic resilience, workforce participation, social cohesion and community well-being.

The reforms we are recommending are not large in cost, but they are significant in impact. Better coordination, reduced administrative inefficiency and a stronger operating environment for charities and non-profits will improve public trust, support more effective service delivery and help government achieve better outcomes for communities across Canada.

We welcome continued engagement with this work as it moves forward.

I would be happy to take any questions.

[The Chair, Liberal, Karina Gould]

Great. Thank you so much, Mr. MacDonald.

We will continue now with you, Mr. Muir, for five minutes, please.

[Kevin Muir, Chief Operating Officer, YMCA Canada]

Good morning. Thank you for the opportunity to speak today. My name is Kevin Muir. I'm the chief operating officer of YMCA Canada.

The YMCA in Canada is a federation of 37 associations serving over two million people across the country. Today I will focus on key recommendations for budget 2026 in three areas to support strong, resilient communities and strengthen local economies.

The first area is child care. The YMCA is Canada's largest not-for-profit provider, bringing high-quality child care to over 60,000 children. The Canada-wide early learning and child care system has already reduced child care fees across the country. It's also increased labour force participation, particularly for working moms. At the YMCA, we see first-hand the impact this program has had on children and families.

The system's working, but it's at risk without sustained long-term investment. We're starting to see cracks forming. Child care operators are facing workforce shortages, a direct result of low wages and retention challenges. They're seeing rising operating costs. In many provinces, they're faced with a funding formula that doesn't account for the true cost of operating child care. YMCA Canada recommends investing $20 billion over five years to cover the true cost of delivering child care and to expand the system to reduce wait-lists. This includes a $1.2-billion upfront investment to support a 25% wage increase for early childhood educators, reducing workforce challenges. An investment in child care is not just social policy; it's economic policy. Evidence demonstrates that child care investment can generate large economic returns through higher employment, higher incomes and increased tax revenues.

The second area is community infrastructure. YMCA centres of community represent approximately $2 billion in infrastructure in cities and towns all over Canada. Investments in this essential community infrastructure create complete communities, bringing positive social and economic outcomes. At the YMCA, demand for our community services continues to grow at a pace that exceeds our current infrastructure capacity. Many of our facilities are aging and require significant repairs. Others lack the space needed to respond to community growth. That's why we welcome the announcement of the build communities strong fund. So far, 11 YMCAs across the country have shovel-ready projects they intend to put forward.

Given the tremendous need and the associated benefit, YMCA Canada recommends doubling the current investment in the direct delivery stream of the building communities strong fund. In doing so, we further recommend two additional steps to support and accelerate readiness for not-for-profits. One, introduce targeted seed funding to support early-stage project development, including feasibility studies, design and pre-construction work. These start-up funds can be a significant barrier. Two, incorporate a simplified and more streamlined application process. At YMCA Canada, we believe this funding will not only support infrastructure but also create jobs, expand access to community services and build strong communities.

The third area is youth employment. The YMCA serves over 90,000 jobseekers annually through our employment programs. We support approximately 600,000 youth. Young Canadians are entering the most challenging labour market we've seen in over a decade. Youth unemployment is hovering at around 14%, more than double the national average. At the same time, Canada faces persistent labour shortages in key sectors, particularly skilled trades, construction and the community services sector, which includes early childhood educators and personal support workers.

This disconnect underscores a structural challenge. While many young people are struggling to find work, employers are struggling to find workers with the right skills. To address this, YMCA Canada recommends doubling the annual investments in the youth employment and skills strategy. This would mean an additional $400 million annually for five years for Canada summer jobs and $300 million annually for five years for the youth employment and skills strategy program. We further recommend committing to a minimum five-year funding cycle. That would improve program stability, reduce administrative inefficiencies and enable stronger outcomes through long-term planning and partnerships.

In summary, investments in these three key areas—child care expansion, community infrastructure and youth employment programs—will help build thriving communities and a strong economy while ensuring that Canadians have the supports they need to keep up with the cost of living.

Thank you. I look forward to your questions.

[The Chair, Liberal, Karina Gould]

Thank you very much, Mr. Muir.

We're going to continue now with Ms. Nizigama from the YWCA, please, for five minutes.

[Aline Nizigama, National Chief Executive Officer, YWCA Canada]

Thank you, Madam Chair.

Thank you for inviting me to appear before the committee today.

My name is Aline Nizigama. I am the national president and CEO of YWCA Canada.

I'll continue in English and would be pleased to answer questions in either language.

YWCA Canada is the country's oldest and largest gender-equity-advancing organization. Through 29 local member YWCAs from across the country, we are reaching over a million people. We operate the largest network of shelters and housing for women and children fleeing violence; the largest network of employment counselling, upskilling and re-skilling for women; and the second-largest non-profit child care system, after the YMCA, in Canada.

What I'm bringing today is an impact and efficiency argument. I'll start with the number that this committee should care about most.

According to a recent report from the Ending Sexual Violence Association of Canada, sexual violence alone costs Canada close to $15 billion every year in health, justice and lost productivity costs that sit on federal and provincial balance sheets. That is just one form of gender-based violence in a country where one in five people reported sexual assault since age 15. Nine out of 10 times, that person is a woman, with indigenous, Black and racialized women, those with disabilities and those living in poverty or in remote areas being the most affected. Justice Canada's own estimates aren't too far from these numbers, so the status quo is not free.

Budget 2026 can change that math. The fastest and most affordable way to grow Canada's labour force, productivity and tax base is to invest in keeping women safe and to remove the structural barriers holding them back. Housing, safety, child care and access to good jobs are not social spending in a soft sense. They are economic infrastructure with a measurable rate of return.

Our recommendations are connected, because the barriers are also connected. I have summarized them in four points.

One, fund housing and women's safety together. In YWCA services alone, more than 9,000 women and children are waiting for safe housing today. To help fix this, we ask that Build Canada Homes allocate at least 40% of affordable units to women and gender-diverse people and their families.

In addition, the next phase of the national action plan to end gender-based violence must be fully funded and an independent commissioner established to oversee its implementation. The epidemic of gender-based violence is just too pervasive and cannot be addressed without significant supports, both in prevention and in intervention.

The federal government must also commit $360 million over three years through Women and Gender Equality Canada to stabilize shelters and transitional houses, because without that frontline capacity, neither the housing investments nor the national action plan can deliver strong outcomes.

Two, sustain and extend the Canada-wide early learning and child care system. Child care, as Kevin said, is essential economic and social infrastructure. It enables women to participate in the labour force, supports family stability and strengthens the broader economy. The system has delivered real progress, but those gains are at risk without renewed operational and capital funding. Economic estimates of the program place its GDP contribution between roughly 1% and 4% annually.

Three, make investments in trades and skills into outcomes for women. The federal government, we know, has committed $6 billion to recruit up to 100,000 new skilled trades workers. Women are only 7.3% of the trades today. That's up from 5.9% in 1987. That's a gain of just over one percentage point in nearly four decades. A general investment will not change that, because the data shows that it has barely moved in 40 years. We are asking that 2.5% of that $6 billion—that is $150 million over five years—be targeted specifically to support women into trades through organizations known to deliver results, like the YWCA.

Four, fund the national coordination capacity that pulls all that together. Federal departments fund stable, criteria-based, operational support for national sports associations and other sectors, and that's good. Organizations doing the policy, research, legal systems, change work and frontline coordination to advance and preserve gender equity deserve the same stability. Our ask is that $10 million annually over five years, beginning next year, be allocated to national women's rights and gender equity organizations to support their sustainability.

I will end with this. For women most in need and their families, safe housing makes escape possible. Child care makes work possible. Skills training makes long-term security possible. Strong community organizations make systemic change attainable. Budget 2026 can make that possible.

Thank you.

[The Chair, Liberal, Karina Gould]

Thank you, Ms. Nizigama.

We will now begin with questioning, starting with Ms. Cobena for six minutes.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Thank you, Madam Chair.

First of all, thank you, everybody, for your remarks. There is definitely a call to action in line with the feedback I get from a lot of the charities I have visited in my riding. They say that the need is great. The generosity of the community is also great, but it's not enough.

With that in mind, if I may, I would like to ask Mr. MacDonald a few questions.

I did some research. In its mission statement, your organization says, “We can't keep asking nonprofits to do more with less.” We've seen the cost of living crisis worsen.

Can you speak to Canadians' ability to financially support the charities you represent?

[Bruce MacDonald]

First of all, thank you for the question. It's an important one, because what we often witness during times of economic stress is an inverse relationship between the economy and our sector.

Often, when the economy is facing challenges, for charities and non-profits, supply—as defined by money—goes down. When Canadian families are under more stress, they don't have as much to give. At the same time, on the other side of the equation, demand for services rises. For many organizations, both the demand for services and the cost to deliver those services grow at a time when the supply of revenues is going down.

You're hearing from colleagues on this panel that this is what many organizations are facing every day as they try to fulfill their missions. It's a bad math equation, and we have to try to address both sides of it.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Thank you for that.

Yes, we hear the stories, of course, but you see it at a broader level.

Would you say, because of these two dynamics you mentioned, that the charity sector is getting squeezed?

[Bruce MacDonald]

Absolutely. There is no question. They have no manoeuvring room in a situation where they don't have as many resources but where more people in their communities need services.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

The research component of your website says:

Federal funding is powerful, but when it doesn't work well, the smallest nonprofits often carry the heaviest burden—and it costs communities.

Could you kindly elaborate on this?

[Bruce MacDonald]

Yes. This is at the heart of the recommendations. The grants and contributions programs offered by the federal government have become, over the course of the last two and a half decades, increasingly burdensome. For example, I was recently talking to an organization that has a $2.5-million grant relationship. They're having to spend inordinate amounts of time working with civil servants and their own staff to change a $100 train ticket. That's not the kind of reporting that we think the sector should be doing.

These recommendations are not about decreased accountability. They're about reasonable, appropriate and impactful accountability. For small organizations, it's even harder. Keep in mind, please, that about 40% of this sector's organizations are volunteer-run. For them, having to navigate a complex reporting and application process is extremely difficult.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Thank you for that.

I noticed, too, that organizations affiliated with your network include food banks.

Can you speak to their experience in meeting demand in the midst of this cost of living crisis we have in Canada right now?

[Bruce MacDonald]

You certainly see the reports coming from Food Banks Canada and others. The surge in demand is far outstripping organizations' ability to meet it.

It's funny. I was saying to Aline from YWCA earlier that I was visiting a local YWCA last week. Their ability to meet even the need for basic meals and overnight accommodation that includes a meal.... People are lined up around the block to access those services. I think this speaks to the state of Canadian communities. Food insecurity organizations are on the front line of trying to provide these services.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

It's a sad situation, of course. Food banks do an incredible amount of work, but the need is great, and it's long-term. That's why there is a need for long-term solutions to help with food insecurity, which I know is a big topic even in my riding.

Broadly speaking, Mr. MacDonald, is there anything in the spring economic statement that you think is missing and that you would like to have seen?

[Bruce MacDonald]

Well, always.

[Voices]

Oh, oh!

[Bruce MacDonald]

I think that's important to say.

First of all, it was great to see the sector acknowledged for its economic contribution, because that's often overlooked. It's not just doing good work. It's actually employing Canadians.

I would say that the significant interest that we believe both parliamentarians from all parties and our sector have around reducing the red tape and awkwardness between the sector and government—making sure renewals happen so that staff don't have to quit their jobs to look for others because they haven't gotten renewals on programs; allowing the sector to be able to have more flexibility, as they're learning about the delivery of programs, to move budget lines without having to get approval on every single item; and being trusted partners to deliver that—

[The Chair, Liberal, Karina Gould]

I'm sorry, Mr. MacDonald. I will have to cut you off there. We've run out of time.

Thank you, Ms. Cobena.

We'll continue now with Mr. Leitão for six minutes.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you, Madam Chair.

Good morning, everyone.

I hope to have time to ask questions of all four witnesses. I will try to be disciplined. I'll start with that, at least.

Thank you all for being here. This is an extremely important sector.

Mr. Hallward, I find your social sector fund rather interesting. Did you have any discussions, consultations or exchanges of ideas with philanthropic foundations or that world?