The economic statement tabled by Finance Minister Morneau on November 22 had a couple of welcome announcements which will touch on at least certain parts of the sector. But there was very little detail available about implementation and we suspect that we’ll have to await the next federal Budget to get those details.
The Social Finance Fund
To encourage innovative approaches to persistent and complex social challenges, the Government is creating a Social Finance Fund. This will give charitable, non-profit and social purpose organizations access to new financing to implement their innovative ideas, and will connect them with non-government investors seeking to support projects that will drive positive social change.
To help accelerate that change, the Government proposes to make available up to $755 million on a cash basis over the next 10 years for a new Social Finance Fund and an additional $50 million over two years for social purpose organizations to improve their ability to successfully participate in the social finance market.
The proposed Social Finance Fund could generate up to $2 billion in economic activity, and help create as many as 100,000 jobs over the next decade. In addition to these measures, the Government will continue to work on exploring other recommendations from the Steering Group’s report.”
Apparently charities and non-profit groups will be able to access up to $755 million for community improvement projects over the next 10 years as part of the new Social Finance Fund. The government says the fund will support “innovative solutions” to social challenges and could create as many as 100,000 jobs over the next decade. Details on the structure and governance of the fund are expected to be released in early 2019.
The idea sounds like it will be useful but as always, the devil is in the detail which we don’t have as yet.
There was also an announcement of support for Canadian journalism, a move which was predicted in the October, 2018 issue of the Canadian Not for Profit News.
The verbatim announcement said this:
A strong and independent news media is crucial to a well-functioning democracy. It empowers citizens by providing them with the information they need to make sound decisions on important issues.
In order to ensure Canadians’ continued access to informed and reliable civic journalism, the Government is announcing its intention to propose three new initiatives: allowing non-profit news organizations to receive charitable donations and issue official donation receipts; introducing a refundable tax credit to support original news content, including local news; and introducing a new temporary non-refundable tax credit to support subscriptions to Canadian digital news media.”
Again there was precious little in the way of details but for obvious reasons journalists in the “lock-up” managed to elicit some expansion of the rather terse statement.
“We’ve made some investments to make sure we can continue to have an important free press that can ensure we have a strong and healthy democracy,” Finance Minister Bill Morneau told reporters Wednesday after the release of the economic statement.
The labour tax credit is meant to help outlets create a “wide variety” of news and information for Canadians, according to the statement. The government is promising to establish an independent panel from the field of news media and journalism to define eligibility for the tax credit and to provide strategic advice. Once implemented, the tax credit will be retroactive to Jan. 1, 2019.
The Liberals are introducing two more tax incentives for news organizations, as well as earmarking $14.6 million over five years for the creation of a francophone digital platform. Eligible non-profit news organizations will now be able to issue official donation receipts so donors can access tax benefits for charitable giving. They will also be eligible to receive funding from registered charities. As well, the government is creating a temporary non-refundable 15 per cent tax credit for digital subscriptions to Canadian news outlets.
The francophone digital platform, designed to enhance the “vitality” of French culture and language, will be created with TV5Monde public broadcasters.
Logically, the media generally are very supportive of the ideas; the Opposition parties less so when they irrationally say that this is an attempt by the Liberals to “buy” the media.
There was also one other welcome proposal which may or may not be useful.
The government proposes to establish a permanent advisory committee on the charitable sector to ensure that the regulatory environment in which charities operate is appropriate and that it encourages their full participation in public policy dialogue and development.
We’ve seen this sort of promise many times in the past in one form of another. The issue was always and will continue to be whether the government listens to the recommendations.
By: Arthur Drache
 See page 75 of the Canadian Not-for-Profit News.