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Speech by
Mel Cappe
Clerk of the Privy Council and Secretary to the Cabinet

to the 
Third Canadian Leaders’ Forum
on the Voluntary Sector
Association of Professional Executives

Ottawa, Ontario
May 31, 1999

Check Against Delivery

I have been asked to talk about the federal government's efforts to build a new relationship with the voluntary sector. So I am going to cover the three points: I will spend some time talking about the importance of the sector from the government's perspective; I will describe some challenges we face in trying to develop a relationship with the sector and how we're meeting those challenges; and lastly, I will talk about the interdependence of the private, public and voluntary sectors and the need to advance dialogue among all three.

The Importance of the Voluntary Sector from the Government's Perspective

I want to begin by talking about the importance of the voluntary sector from the government's perspective. First, I want to say that Canada's voluntary sector exists because Canadians created it: it is not an extension of the state, and it is not subordinate to the private sector. The voluntary sector exists because Canadians want it to exist. It exists because Canadians find value in its work and in the roles it plays.

What are those roles? In recent decades, the primary roles of voluntary organizations in Canada have evolved to include service delivery, contributing to public policy dialogue, and citizen engagement. Building on the good work of Dr. Susan Phillips from Carleton University, I want to say a few words about each.

Service Delivery. A central mandate of many voluntary organizations is to do "good works" by providing services to the community. The range of services provided is enormous and sometimes includes delivery of programs on behalf of government, one example being the Aboriginal Friendship Centres Program. Why is this of interest to the federal government? Because the voluntary sector reaches out and touches parts of society which the government cannot easily or efficiently reach. And one of the best ways to gauge the efficacy of the services we offer or support is to engage the sector in dialogue, and listen and learn. Who benefits? Canadians, by way of services which are better targeted to need.

Contributing to Public Policy Dialogue. Voluntary organizations reflect the interests and concerns of their members, including their interest in matters of public policy. Advocacy is part of it, seeking to influence public policy, educate the broader public, and change the behaviour of society at large. Why is this of interest to the federal government? Again, because the voluntary sector reaches deep into society and provides another channel through which the voices of Canadians can be heard. And because it is so close to the citizenry, the sector can act as an early warning system with respect to emerging policy issues. Who benefits? Canadians, by way of a deeper understanding and a more profound debate about public policy.

Citizen Engagement. The voluntary sector creates and reinforces citizenship by engaging citizens in the development of their communities. Why is this of interest to the federal government? Because the voluntary sector provides vehicles by which citizens can engage each other in building stronger, more resilient communities.

I have talked about the three roles which the voluntary sector plays. Now let me tell you about the deeper reason behind the federal government's interest in the sector. Some might say that the voluntary sector just fills the gap between what the private sector will not do and what the government cannot do. In one sense that is right. In another sense, it undersells the contribution that the sector makes to Canadian well-being.

The importance of the voluntary sector and its importance to the business community is much more profound than you might appreciate. Last year I talked about Robert Putnam and "bowling alone" and "singing in choirs". This year I want to talk about Francis Fukiyama. Some of you may remember Fukiyama, who wrote a book with the provocative title, The End of History.

Fukiyama's book dealt with the triumph of free societies, and their economic form: capitalism. Fukiyama has also done some notable work on the economic underpinnings of successful societies. He has found that successful societies possess well-developed social support networks - of precisely the sort engendered by the voluntary sector.

Fukiyama is not alone in this observation. An increasing body of research suggests that the voluntary sector makes a contribution to social well-being, one which has been undervalued for far too long. Think of society as a stool supported by three legs: Successful societies feature a vibrant private sector; a savvy public sector; and a voluntary sector which is supple, responsive and diverse. For the stool to carry any real weight, the legs have to brace and mutually support one another. All three sectors have to work together. That is why the federal government is interested in strengthening its relationship with the voluntary sector. We are working to strengthen one of those braces and perhaps this forum will help kick-start the process of strengthening the brace which links the business and the voluntary sector. For example, investing in child development is not only a social policy priority, it is also a way of encouraging economic growth and development. Children who have a good start in life tend to become self-reliant citizens with a great deal to contribute to society. So, as Fukiyama and others have observed, the private sector really does have a deeply vested interest in the health of the voluntary sector.

Challenges of Developing a Relationship with the Voluntary Sector, and How We're Meeting those Challenges

Before I talk about how we are trying to develop a new relationship with the voluntary sector, I want to describe some of the challenges facing us.

The 1997 National Survey of Giving, Volunteering and Participating gave us the first clear picture of the sector and how it is supported. The survey found that Canada has over 175,000 voluntary organizations, of which over 77,000 are registered charities. About 21 million Canadians made donations of some kind to charitable and non-profit organizations, which received direct financial support totaling some $4.51 billion. About 7.5 million Canadians volunteered 1.11 billion hours of their time. This is equivalent to 578,000 full-time jobs, or more than the labour force of Manitoba. Registered charities, other than hospitals and teaching institutions, generated over 570,000 paid jobs. (This is equivalent to another Manitoba work force.)

The voluntary sector has long been strong and active. Thanks to a fruitful relationship with the federal and provincial governments, it has, in fact, flourished. You may well ask: "How is all this activity supported?" So let me give you that answer from the standpoint of charities. I am also going to throw out a challenge to your math skills: Registered charities receive about 57 percent of their revenues from governments, mainly provincial: Another 10 percent comes from individual donations and 32 percent comes from fees, sales and such. So how much is missing? Right, we are still missing 1 percent. And where does the missing 1 percent come from? Answer: corporations. Remember my analogy about the legs of the stool needing to brace one another. Perhaps there is room for improvement. . .

Now I do not want to leave the impression that relationships are all about money or that building a sustainable relationship is easy. Consider the challenges we face in dealing with a sector that mobilizes the efforts of 17 million Canadians, not all of whom work through Canada's 175,000 voluntary organizations. I want to speak about five challenges in particular: our approach to funding, accommodating the sector's diversity, benefitting form the sector's advocacy role, maintaining accountability, and engaging provincial governments in the dialogue.

Funding. Governments as a whole play a major role in funding the voluntary sector, but the years of cuts have taken their toll. Federally, we need to better account for the funding we provide. We also need to be aware of the long-term impact that our current preference for project versus core funding is having on the sector's capacity. (Project funding also sometimes entices voluntary sector organizations to stray from their core missions.) So one of the challenges we face is to re-examine our approach to funding.

Diversity. The voluntary sector's strength lies in its diversity. The sector supports everything from fine arts organizations to food banks and it spans the work of individuals through multi-million dollar charities involved in many facets of society. It is not reasonable to expect such a diverse sector to speak with one voice, nor would it be desirable. But there does lie before us a challenge in finding ways to listen to the sector's many voices.

As Al Hatton from the National Coalition of Voluntary Organizations will attest, leaders from the sector realize that their greatest challenge will be to orchestrate those voices. So whatever the federal government does, we know straight away that we will have to accommodate the sector's diversity, and recognize it as a strength. We're prepared to meet that challenge.

Advocacy. The Broadbent Panel touched on the importance of the voluntary sector's advocacy role and its capacity to enlighten public policy debate through in-depth research and subject matter expertise. We share the view of the Broadbent panel that the voluntary sector has much to contribute. Our challenge will be to find ways to bring the sector's viewpoints systematically into play in the making of public policy.

Accountability. The government is now much more sensitive to the need to involve the voluntary sector in dialogue about public policy, but the challenge is a thorny one due, in part, to differing accountabilities. Politicians are directly accountable to electorates for their efforts, on many fronts, to balance competing interests in a way which advances the public good. Voluntary sector organizations, by contrast, typically deal with a narrower range of issues and are accountable to narrower constituencies that comprise supporters and clients. Reconciling the interests of the voluntary sector with the broader responsibilities of the government will present an ongoing challenge.

Federal-Provincial Engagement. For the relationship between the public and the voluntary sector to really flourish, we have to find ways to engage provincial governments in a multilateral national dialogue. The Social Union Framework Agreement provides a means by which we could achieve this engagement, bringing onto the national agenda both federal and provincial efforts to better our relations with the voluntary sector.

Now I want to describe to you in more detail the federal government's chosen approach to building this new relationship. The first thing you need to know is that the government's commitment to deepen its engagement with the voluntary sector can be found in the Liberal Party's "Red Book".

The Prime Minister's speech to the International Association for Volunteer Effort in August 1998 reaffirmed this commitment: His words were: "Working together we can accomplish so much more than working apart" "The days in Canada when the voluntary sector is overlooked and underrated are over for good" "Our desire [is] to build a new and lasting partnership. . . . A real alliance."

Over the last several years, we have come to better understand that our social and economic objectives are complementary. This approach is rooted in a new understanding about the role of government, not only in Canada, but around the world. Clearly, the time is ripe. For their own part, leaders of the voluntary sector also seem to think that the time is ripe. But I will let my colleague, Al Hatton, say more about this. Now we are not starting from scratch. Many departments already have important relationships with the voluntary sector: Indeed, a recent survey documented more than 250 such initiatives with 32 federal departments and agencies. But we now want to forge a more strategic relationship which builds on past accomplishments and corrects past failings.

To launch the initiative, several Ministers met with a number of leaders from the voluntary sector. This meeting laid the groundwork for exploratory talks on policy options which began in April 1999 and led to the establishment of three Joint Tables Relationship, Capacity, and Regulatory. On each table, leaders from the voluntary sector have teamed with senior government officials to explore options which might help to launch the new relationship. The Tables themselves represent a new and, we hope, better way to do up-front exploratory policy work. The early involvement of leaders from the sector increases the chances that our policy options will be sound and will resonate within the sector at large.

All three Tables will take into account the government's commitments in the Red Book, Securing our Future Together, as well as the Broadbent Panel Report, which also called for action. We need to find the right answers to the following questions: What should this new relationship be? And what must we do to sustain it?

The Relationship Table. Members are working to define the characteristics of the new relationship by way of a framework document, similar in many ways to the U.K. Compact. Participants are also exploring the kinds of structures, mechanisms and processes which might be put in place, both in government and within the voluntary sector, to ensure that the relationship flourishes. Perhaps the biggest challenge is to find ways in which the sector and the federal government can speak with each other on matters of common interest.

This Table is also laying out a game plan for what might happen after the Tables have done their work. This would include downstream consultation, because it is clear that the work of the Tables is just a beginning, and we need to ensure that the dialogue continues. As well, we need to involve other stakeholders, including the provinces and the private sector.

The Capacity Table. Members are discussing ways to strengthen the voluntary sector's capacity to do its good works. Members' priority list includes issues of funding, human resources, technology and knowledge. Strengthening the capacity of the sector may involve government funding, but it will likely also involve funding from other sources as well. Remember, governments are already heavily involved in funding voluntary organizations. The corporate sector is much less so.

The Regulatory Table. The Regulatory Table is looking at ways to improve the regulation and accountability of charities and other non-profit organizations. It is examining options for a new regulatory approach, including the option of a beefed-up Charities Division in Revenue Canada. How to draw the line between education, advocacy and political activity also features large on its agenda. The Regulatory Table is also researching the financial support which the federal government provides to the sector: why, how and to whom.

I want to stress that the work of the Joint Tables is exploratory, in the nature of front-end policy analysis. This kind of work has traditionally been the purview of "policy wonks", done behind the scenes, with limited involvement of the stakeholders. The Joint Tables approach is a way of opening up this front-end work, but it carries risks. For one, the work itself is exploratory, and exploration is sometimes a messy, controversial business. As well, we can not involve everyone we would like at this point, and some may be fearful of the outcomes.

I want to take a minute to allay the concerns of those who have not been involved to this point and I want to do so on two counts. First, the tables are doing front-end policy work; broad-based consultation will follow. Second, building a new and more strategic relationship with the voluntary sector involves work which will stretch over many years. The Joint Tables are just the beginning.

We are taking this whole process one step at a time. The Joint Tables' reports will be presented to Ministers and various leaders in the voluntary sector early this summer. But enough about the Joint Tables process. Let me talk about what we might expect in terms of outcomes.

From the Capacity Table we are expecting proposals which would lead toward a more stable funding environment.

From the Regulatory Table, we are expecting proposals which we hope would lead to a fairer, more consistent regulation.

From the Relationship Table we are expecting even more. We are looking to that Table for proposals about how to create a space for ongoing dialogue between the federal government and the voluntary sector. We envision that such dialogue will touch on capacity issues, regulatory issues, and more. And we are looking to that Table for guidance on flexible mechanisms which can adapt as the relationship evolves.

Using a much larger canvas, I now want to paint a picture of what we might expect from this new relationship. In 15 years, how will we know that we have achieved success? Involving the voluntary sector in policy dialogue will be so deeply embedded that no one will think twice about it. Program managers will involve the voluntary sector in design and implementation as a matter of course. And dialogue will be the accepted way of doing business for all departments.

As well, the dialogue between the voluntary sector and the federal government will be characterized by respect and supported by an "evergreen" framework document that has evolved along with the relationship itself. The sector will have sufficient capacity to meet not only its obligations, but also our shared expectations. Of course, we still have a way to go.

I want to leave you with three messages about the federal government's approach to developing a relationship with the voluntary sector: The Joint Tables are but the first step in a long journey. We'll take it one step at a time. And we're committed to taking those steps together.

Need for Dialogue Among three Interdependent Sectors

I want to close my presentation by talking about the interdependence of the private, public and voluntary sectors and the need to advance dialogue among all three.

Some of you may recall that, at Banff last year, I spoke about my first exposure to the voluntary sector in terms of my grandfather's village in Russia and the role played by the Sick Benefits' Society. More recently, we have seen images of the refugees from Kosovo arriving in Trenton, with Citizenship and Immigration Canada and the military joining hands with the Red Cross and church organizations, and with contributions pouring in from the private sector too.

The voluntary sector is a little like the shock absorber on a car. When a plant closes or a government restructures the delivery of its services, the voluntary sector often finds itself on the front-line, pressed to respond. The voluntary sector does so by attenuating the impact through the community services it provides; absorbing the impact through the support networks it has created by engaging citizens; and amplifying awareness of the impact of these changes through its advocacy role.

Is Canada's voluntary sector equipped to deal with the shocks which it is increasingly being asked to absorb? If not, what can be done about it?

Think back to the analogy of the three-legged stool. Some years back, the federal government worked with the private sector to create an imperfect but nonetheless viable working relationship. The federal government is now working with leaders from the voluntary sector to brace another part of the societal relationship. The challenge facing members of this audience is to explore options for bracing the relationship between the voluntary sector and the business community. And the business community may wish to approach the voluntary sector not as an object of charity but as a key partner in building a flourishing economy.

Albert Einstein once observed that "the significant problems we face cannot be solved at the same level of thinking we were at when we created them".

Canada faces challenges. And to meet those challenges, the public, private and voluntary sectors must work together.