CCVO Op-Ed: Can we cut our way to a preferred future?

Calgary Herald, March 7, 2013
By Katherine van Kooy

Over the past several months, we have seen the emergence of a difficult and long overdue conversation about how we finance the services that Albertans need and expect. Debate about tax options, expenditure controls and the level of services required to meet the needs of a growing population and a strong economy is healthy in a democratic society, but following the government’s release of the 2012-13 third-quarter fiscal report, now projecting a deficit between 3.5 and 4 billion dollars, the public discussion has been dominated by voices such as the Canadian Taxpayers Federation, Fraser Institute and others who see expenditure reduction as the only solution.

There is little argument that government should use public money wisely. But the idea that government programs should be slashed to bring expenditures in line with current revenues needs to be challenged. Our tax advantage is so substantial that it is short-sighted to suggest that there is no room for revenue increases, and that spending reductions are the only available option.

There seems to be an assumption that deep budget cuts can be made and sustained with minimum impact on our society or our economy. The reality is much more complex. Among other things, government funding supports a wide range of services that address the real needs of individuals and communities. Health care, services for children and seniors, education, safety and housing for the homeless – some of the most obvious social expenditures all represent significant government financial commitments. What will be the impact of funding reductions in these areas? Fewer care options to meet the needs of a growing senior population? Fewer mental health services? Less care for disabled citizens or vulnerable children?

Alberta’s strong resource-based economy has acted as a magnet, attracting people from across the country and across the world to meet the growing needs of our industries. That growth has contributed to exciting, vibrant communities, but it has also contributed to social issues fueled by stress, isolation and poverty. For the past five years CCVO’s annual survey of the nonprofit sector has reported that community -based organizations have seen an increased demand for their services, citing population growth and economic conditions as major contributing factors.

While cuts to these services may reduce provincial expenditures in the short term, the costs are really just transferred to others or deferred with a greater bill to be paid in the future – a social mortgage on our future.

Many of these programs and services are delivered in communities throughout Alberta by nonprofit organizations. Historically these organizations have risen to the challenge of maintaining services with inadequate funding, often relying on fundraising and donor support to meet such basic operating costs as building maintenance or to supplement employee wages.

Despite these efforts, annual turnover rates of 40% are not uncommon among nonprofits delivering essential services on behalf of the Province. Staff pays the price of inadequate funding through lower wage rates, inferior benefits, and uncertain retirements.
Where does this practice fit within the Alberta Advantage we continue to trumpet to the rest of the nation? Are donors, corporations and their employees willing to make up the difference if the current situation is worsened by funding cuts?

It was encouraging that Premier Redford, in a recent radio interview, identified the risks of running both infrastructure and social deficits if across-the-board cuts are implemented. And we hope the results-based budgeting process will help identify opportunities for strategic reductions, but the current fiscal situation has accelerated expectations that the results of the review process will be implemented when only about one-third of government programs have been reviewed.

This raises concerns that decisions may be based on the review results, without considering the unintended consequences in other areas.

The province has shown leadership in developing a new social policy framework, which establishes goals of reducing inequality, creating a person-centered system of high-quality services and protecting at-risk populations. While there is always room to find greater efficiencies, can we really cut our way to this preferred future?

Now it is time for leadership on the most challenging question of the times: how will we finance the infrastructure and services required in this province? What is our collective responsibility to contribute to the provision of essential services and infrastructure, both physical and social?

This discussion is overdue, but now that we are having it, let’s make sure we consider all the options and the consequences of our choices.

- Katherine van Kooy
President and CEO of the Calgary Chamber of Voluntary Organizations