Introduction

The election of a series of neoliberal governments in the 1980s and 1990s led to a sea change in government relations with voluntary organisations in Canada (Brock and Banting, 2001). The Canadian government has funded voluntary organisations since the 1940s, when it first recognised their potential for nation building by funding activities related to ‘citizenship training’ (Phillips, 2001). Funding expanded over the next three decades: charities were supported through the tax system, direct funding was provided to groups promoting aspects of ‘Canadian identity’ and voluntary organisations were included in public consultations (Brock and Banting, 2001; Phillips, 2001). Relations began to deteriorate in the 1980s, however, with the election of two Conservative governments under Brian Mulroney (1984 and 1988). The Conservatives launched selective cuts to the voluntary sector, attacking advocacy-oriented organisations critical of neoliberal policies and branding them as ‘special interest groups’ (Phillips, 2001). The subsequent election of a Liberal government under Jean Chretien (1993) ushered in deeper funding cuts, a shift from core to short-term project funding, and voluntary organisations were firmly shut out of further policy consultations (Phillips, 2001).

During the second Chretien term (1997), however, the federal government changed its stance on voluntary organisations. The Liberals adopted Tony Blair's ‘third way’ approach and began to forge a new relationship with the sector (Phillips, 2001). Funding cuts continued, but public policy soon hinged on an enhanced role for the voluntary sector, now envisioned as ‘a vital third pillar in Canadian society, working alongside the public and private sectors to make Canada a more humane, caring and prosperous nation’ (Canadian Privy Council, cited in Chappell, 2001, p 118). The Voluntary Sector Initiative followed, bringing together representatives of government and voluntary organisations to draft a new Accord (Phillips, 2003a, 2003b). Phillips (2003a, 2003b) observes that the Voluntary Sector Initiative marks a shift from a model of top-down ‘government’ to a model of ‘governance’ where the state works collaboratively with partners. Still, it must be noted, the voluntary sector does not enter this partnership on an equal footing with government.

The Canadian voluntary sector depends on 1.6 million volunteers and over 1.3 million employees, providing paid employment to 9% of the country's workforce (Hall and Banting, 2000, p 15; Chappell, 2001, pp 114, 118). With nearly two thirds of voluntary sector revenues coming from government, funding cuts created a deep ‘fiscal crisis’ in the sector (Chappell, 2001, p 116).