Public Policy Sources #31:
Rationalizing a Voluntary Sector Commission

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Although the Panel comes out strongly in favour of establishing a VSC, the final report does not contain a full discussion of responses received to any of the four options presented in the consultation document. The report does state that the Panel’s recommendation for a VSC came out of "further research and consideration," (Building on Strength, p. 62) but it is not made clear what was involved in either case.

Undermining support for a non-governmental agency?

The groundwork of the Panel’s argument appears to begin with a justification of its decision to ignore the strong support expressed by the respondents to the consultation document for a non-governmental agency:

We think the potential of a non-government agency to increase the visibility of the sector would be less than in the model we propose; its funding would probably be unstable; and, if it had the power to determine registration, it would risk conflict with other organizations in the sector. The fact that no existing intermediary organization stepped up to volunteer for the role is a telling indicator of the potential limitations of the model, given the many functions it would have to carry out. (Building on Strength, p. 62)

None of these reasons are substantive. First, there is no reason given to support the belief that a non-government agency would be less capable of increasing the sector’s visibility with the public. One can infer the Panel’s rationale, however, in a passage in the consultation document:

a sector-based model may not serve to raise the profile of the sector sufficiently within governments. (Helping Canadians, p. 44)

It would appear that the Panel, in addition to its stated concern about providing Canadians with information about the voluntary sector, is also very concerned with giving the sector, or perhaps more precisely those in the body overseeing it, a voice in government. If this is the case, then obviously a quasi-governmental body like the VSC would be more effective. Whether or not this kind of "visibility" is in the public interest will be discussed below.

Second, the Panel’s rationale regarding the issue of funding is also weak. In the consultation document, the Panel discussed how a non-governmental agency might be funded:

[g]iven that this agency would perform important public policy functions that benefit governments, there is a strong case to be made that it should be supported with core funding by both federal and provincial governments. Since a new agency of the kind we are suggesting would also have significant advantages for the private sector, some corporate contributions should be forthcoming, as well as additional possibilities of revenue generation. (Helping Canadians, p. 44)

Despite this, the Panel concluded that "the stability of funding is problematic" (Helping Canadians, p. 44) for a non-government agency. At the same time, the consultation paper and the final report assume that a VSC would be funded, apparently entirely, by the federal government. It is not made clear why government might be willing to provide full funding to a VSC led by appointees, and not to a more independent non-governmental agency.

Third, while it is true that conflicts potentially could arise from a non-governmental agency being charged with determining charitable registration, conflicts of this nature would be just as likely to arise if this power were given to a VSC. Here again, the Panel’s real rationale for this assertion appears to be discernible in the consultation document: "there may be lingering perceptions that self-regulation is not entirely appropriate" (Helping Canadians, p. 44). The existence of lingering perceptions, however, is not a valid argument for or against any particular course of action. In any case, responsibility for regulation need not be delegated by government at all.

Finally, though it may be true that no voluntary sector organization volunteered for the role set out by the Panel, it is not clear that volunteers were requested. It also is not clear whether government funding was offered to support an organization taking up this role. And in any case, it is not necessary that any single body undertake all of the tasks outlined in the consultation paper--a possibility that the Panel seems to have ignored. We will return to this last point below, but at present we need only observe that, given the above, the fact that no voluntary body volunteered for the role outlined is not conclusive in any sense.

Justifying a VSC?

Having thus purported to disarm potential critics of its conclusion, the Panel then goes on to justify its decision to propose the formation of a new VSC:

[W]e recommend an institution ... attached to the federal government for two main reasons: the [Voluntary Sector] Commission would have an important role in recommending registration for new applicants ... [and] there is a compelling rationale for having one national agency that is a central repository of information about voluntary organizations and that ensures accountability, as well as national registration, rather than separate provincial and territorial agencies or processes... [I]t is simply not efficient or effective to have the proposed functions of the Commission duplicated in each province and territory." (Building on Strength, p. 62)

First, and to repeat, one body need not take up all the functions outlined by the Panel. Yes, the government must ensure the integrity of the registration process, however, this already is done by Revenue Canada’s Charities Division. Even if it were decided that this function could be performed better by a new body, no argument is made as to why such a body would do a better job.

As for the "compelling rationale," note that "one national agency that is a central repository of information about voluntary organizations and that ensures accountability, as well as national registration" already exists--the Charities Division. The response to the consultation document indicated little support in the voluntary sector for the option involving Revenue Canada, but this option outlined an expanded role for the Department rather than a continuance of its current functions.

In actuality, decisions on systems of registration and compliance should not be influenced overly by what the sector wants. What is important is that any system effectively ensure that charitable status is not being abused. Nowhere in the final report is any argument made that the Department is not performing its "watchdog" role effectively. Indeed, the final report mentions the expertise of the Department in this role (Building on Strength, p. 62).

Even if the point is granted that a new central agency attached to government is required to undertake or assist in these registration and monitoring functions, the Panel makes no argument why such a body need take on all of the other functions assigned to it in the final report, or even why any other single body need do so. It is questionable whether centralizing these charity support and information provision functions in one body would be more effective than decentralization and specialization.

Fortunately, we have an example against which to gauge the advisability of having a new VSC undertake the wide-ranging role envisaged in the final report--the Charity Commission of England and Wales. This example is all the more germane as it is the one used in the consultation document to make the case for a new VSC. If one looks at the performance of the Charity Commission, however, it is difficult to reach the same conclusions as did the Panel about the advisability of adopting this model in Canada.

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