Muddy waters hide true level of cuts in BC budget

The devil’s in the details, as the saying goes. But good luck trying to find them in the revamped provincial budget if you’re looking to understand where the cuts to provincially funded services are going to hurt the most.
What is clear is that somebody’s definitely going to be feeling pain. The revised 2009-10 budget reflects a major downturn in provincial revenue. Government has earmarked almost $2 billion in cuts over the next three years that will come from “administrative efficiencies” inside government, and an additional $1.5 billion in cuts to various community services receiving year-to-year grants.
The government calls such grants “discretionary.” What they mean by that is that government is under no obligation to provide the money in the first place, or to keep it coming. Discretionary grants have become a very common but extremely unstable way of funding many kinds of community services.
The $159 million or so the government hands out every year in gaming grants are considered discretionary, for instance. But that’s only the government’s opinion. Ask any of the thousands of community groups that desperately count on that money to fund important services and they’ll tell you that those gaming grants are essential.
A senior Finance Ministry bureaucrat told me at this week’s budget release that it only makes sense to cut discretionary spending first. “Isn’t that what you’d do in your own household?” he asked me.
Sure, but in that case it would be up to me to decide what expenses could be classified as discretionary. Who is it that defines “discretionary” at the provincial level for purposes of funding cuts? Whose grants are on the hit list? I spent six hours poring over pages and pages of budget documents Tuesday and am still no closer to the answer.
Vancouver Sun columnist Vaughn Palmer asked the question of the day on this point when he queried Finance Minister Colin Hansen at the budget lockup as to why there wasn’t a list of all the grants being cut. I wonder whether anyone in government even has such a list, or has any idea of what the cumulative effect will be from cutting so many community grants all at once.
Hansen invited Palmer and any other interested media to scrutinize three account classifications in the “Supplement to the Estimates” to find that out. Such classifications are known as Standard Objects of Expense - STOBS - and the ones in question are numbers 77, 79 and 80. All three provide funding for community partners, whether in the form of discretionary grants, required payments, or contractual agreements.
So I put on my reading glasses and scrutinized, aided by a kind Finance Ministry staffer who dug up the original supplement from the February budget needed to compare any differences between the two.
But as it turns out, the task is impossible even with both documents in hand. That’s because while government ministries were cutting discretionary grants, they were muddying the waters by also recategorizing a whole bunch of other STOBs that fit into those same three classifications.
For example, what looks like the wholesale slaughter of discretionary grants within the Attorney General’s ministry turns out to be just a shifting of legal-aid services into a different. Discretionary grants in the Health Ministry look like they’ll shrink from $50 million to a mere $4.3 million, but ministry bureaucrats say that, too, is just the result of funding being moved around.
In the Public Service and Solicitor General’s ministry, there’s $1 million less for discretionary grants related to policing, community services and victim services. In the Ministry of Children and Family Development, there’s $2 million less for child and family development.
Can we presume those are cuts to community groups? I don’t have a clue. Nothing I could find in the documents added up to anything like the $385 million in cuts to discretionary funding that have apparently already been made this year, so who knows what it all means?
It will be weeks or even months before anyone on the ground has any real sense of what’s being lost. At the same time, communities will be feeling the effects of local health authorities cutting $25 million a year from their budgets by reducing admin costs and their own “discretionary” spending.
The provincial cuts have all been made for this year, the Finance Ministry assures me. But that’s not to say that those on the receiving end have been informed yet, or are in any way prepared for even heavier cuts this spring. Listen for the wails in a community near you.

We're NOT going to take it - are we?


Ever been to one of those meetings where you’re thinking damn, if I have to take another five minutes of this, I’m going to run screaming from the room?
BC Ferries has found an easy solution. They just pay their directors to go - $1,500 a pop if you’re there in person, $750 if you phone in. And that’s on top of the $48,000-$58,000 a year the directors are already getting just to be on the board - an amount that’s quite a bit more than the full-year working wage of an average Canadian.
What the heck is going on? So much is weird in this world around the things we give value to that I sometimes fantasize about becoming one of those crazed tax resisters holed up in a (sunny) hideaway in some distant land. I mean, really, when IS the revolution?
Something dehumanizing must happen to people when they reach the top of the food chain. Otherwise, how could it be that just sitting on a board of directors ends up being worth more than, say, a full year of difficult, stressful work for a bullet-sweating manager of a typical non-profit?
There are nine directors on the ferry authority. Eight receive an annual stipend of $48,000 for agreeing to be on the board, and $10,000 more if they chair a committee. The ninth is the board chair, who gets $140,000. In the last fiscal year, the directors met six times as a full board, and 10 additional times as committees.
If we assume that all nine attended the board meetings (wouldn’t you if someone was paying you $1,500 to be there?), that’s another $81,000, and a further $75,000 if half are presumed to have attended the committee meetings. All in: about $700,000.
My mind often goes to the non-profit sector when I hear about stuff like this, because the contrast is just so dramatic - especially with the government revising its 2009-10 budget downward at this very moment and scaring the wits out of every non-profit in town.
So here’s an interesting fact: What the ferries board got paid last year just to go to a few meetings and stand as directors is substantially richer than the total annual budget of PEERS when I was finishing up my time there as executive director in 2007.
We employed 11 people at PEERS at that time, most of whom were coming out of tough circumstance. We provided outreach to more than 100 women. We ran a training program for another 50 or so participants who came for help getting their lives on track. I like to think we made a real difference in a lot of people’s lives.
Obviously, it’s difficult to compare the worth of providing support to citizens in need with keeping the ferry service running. I’ve seen loads of stats on the tremendous value the ferry service adds to the B.C. economy, but nothing from government that measures the worth of the thousands of little agencies that help British Columbians stabilize and improve their lives.
Fortunately, you don’t need to be clear on any of that to question whether being on the board of the ferry authority should ever be worth more than a year of work for the average Canadian. I say no.
Another example of top-of-the-food-chain syndrome: the use of gambling revenues. Anticipate disaster for non-profits if the grants really are frozen this year, because the arts and culture grants hitting the headlines now are just the first of seven waves of annual grants that thousands of agencies depend on.
Once upon a time, British Columbians agreed to let government turn gambling into a major revenue stream, largely because charities were supposed to reap the benefits. And gambling did indeed turn into a major revenue stream, one that generates over a billion dollars a year in net profit for the province. That’s more than a 100 per cent increase from a decade ago.
But the amount designated for charity has risen less than 25 per cent. Ten years ago, 5,000 B.C. charities shared just under a third of all government gaming profits. Now, almost 7,000 charities compete for just 17 per cent of the pie, and the average annual grant per charity has fallen almost $3,000. And we just take it.
Throw open the nearest window, people, and lean out all crazy-eyed like Peter Finch did in the movie Network. Shout loud enough to rattle the roof in the places where it’s so painfully clear they don’t have a clue how it feels to be us: We’re mad as hell, and we’re not going to take it anymore.

Any more lean years for non-profits a potential disaster

The lesson that lingers the most for me from my three years of heading up a non-profit is how very hard you have to work just to keep the doors open.
Whatever else may be happening on a given day, the one constant for anyone running a non-profit is the endless hustle for money. Barely a moment went by in my time at PEERS Victoria when I wasn’t working at least a dozen different angles to make sure we’d have enough money to keep going.
And that was in the good times. In bad times - well, I guess we’ll see. Nationally, expectations are that as many as a fifth of Canada’s 60,000 non-profits will close as a result of the economic downturn. Small non-profits walk a razor edge when it comes to survival, so that number sounds frighteningly accurate to me.
Non-profits rely almost exclusively on governments, investment-rich foundations and generous citizens for their funding. None of those groups have much interest in spending at the moment.
That’s a scary development for a sector that generally lives by the seat of its pants even in boom years. It’s an equally scary development for what it will mean for the tens of thousands of British Columbians who rely on the myriad services and programs run by non-profits. B.C. agencies are awaiting Tuesday’s provincial budget with particular trepidation, as the province provides the bulk of their funding.
“How do you do the work you do if you don’t have any profit?” a UVic student once asked me after I’d told her PEERS was a “non-profit.” The label is fairly baffling, I agree, and “not-for-profit” no better.
What’s possibly worse for the sector is that both terms call to mind a kind of begging state, a place where there’s never any money to be had . That’s certainly how it is for a lot of small non-profits, but you know what they say about how a label can hold you down.
Essentially, the sector does the work of government - most importantly, the human-service work essential to a civil society. The private sector doesn’t set up shop unless it can turn a profit, so a typical western democracy like Canada turns to non-profits to do all the other work that would otherwise go undone.
That’s the reason why it’s PEERS and not a private business providing outreach on the local prostitution stroll. It’s the reason why poor people in the downtown are fed and cared for by non-profits, and why the work of holding families together is mostly done by neighbourhood houses and other small agencies.
The people who need those services don’t have the money to pay for them, which means the work is all cost and no revenue. That’s the kind of service that’s either going to be provided by the non-profit sector or not at all.
British Columbians count on a very long list of non-profit-run services to be there when they’re needed. Sexual-assault counselling; programs for children with disabilities; job training and placement; legal advice; support for troubled teenagers; seniors’ care; on and on - were it not for all the work done by B.C. non-profits, this province would be a much sicker, sadder and less productive place.
But it’s one thing to be thankful for the work of non-profits, and quite another to fund them with any kind of consistency. Unstable funding that rarely keeps up with cost-of-living increases has been the norm even under governments professing interest in looking after vulnerable citizens, but has become much more of a problem in the past decade as governments moved to reject responsibility for the social health of citizens.
In B.C., those shifting ideologies placed the non-profit sector firmly on the outside looking in during the economic boom. Having gone hungry for several years now, many are in poor shape to withstand whatever might be coming now that the economy has collapsed.
Obviously, we need to be worried in B.C. about lost construction jobs and dried-up industrial contracts, because that’s where the recession has shown its face first. But there’s big trouble on the horizon that will rock the non-profit sector as well, at a time when it’s weak from years of underfunding and facing even greater demand for services due to the crashing economy.
Perhaps it’s the nature of the work - not nearly as visible as a broken arm or a cancerous lung, not nearly so easily measured as a graduation certificate or an overcrowded classroom. But it will be our grand mistake if we underestimate the importance of keeping our non-profits in fighting shape for the hard work that lies ahead.