• Voluntary associations of citizens play an essential role in robust democracies. Civil-society groups should, as much as possible:
  • Have a constituency, that is, a base of citizen supporters;
  • Be entirely or primarily funded by these supporters and/or by other non-governmental sources; and
  • Determine their own views and positions, representing their supporters.
• When government consults with groups having these attributes, public trust in the democratic process is strengthened, government gains insight into the views of citizens, and the range of views heard improves government’s ability to find effective ways forward.
• This paper evaluates the health of the nexus between government and civil society in Canada by examining the groups that were invited to give oral testimony to Senate and House committees in 2023 on Bill C-35, An Act Respecting Early Learning and Child Care in Canada, the amount of federal funding these groups received, and the position each group held on the bill.
• We find that most of the groups received federal funding, and groups favourable to the bill received more than $1,300 for each dollar received by groups opposed to the bill.
• Furthermore, some of the groups invited to testify were embedded in the policy development leading up to the tabling of the bill.
• The findings of this study prompt important questions about the health of civil society in Canada, and the role and independence of civil-society groups in relation to government.
  • Can civil society thrive, and serve as a countervailing power, if it is funded by government?
  • If a group receives a substantial part of its funding from government, is it still a civil-society group? To what extent is it comfortable criticizing the government when it believes criticism is warranted?
  • To what extent do witnesses at parliamentary hearings add value to the scrutiny of proposed legislation when they have been key players in the formation of that legislation?
  • To what extent are parliamentary committees delivering on their mandate to listen to Canadians, gather input from many sources, and benefit from diverse perspectives?

Every democracy needs a strong civil society. Ever since Tocqueville’s Democracy in America was published close to two hundred years ago, voluntary associations of citizens have been recognized as necessary to ensure that a diversity of voices are heard in public debate, particularly those that are independent of government. 1 1 Tocqueville, Democracy in America, bk. 2, chap. 5. Complete citations are provided for all sources at the end of this report. This is all the more vital in contemporary Western societies, where the state takes an increasingly large role in social, cultural, and political life.

Many scholars, such as Robert Putnam and Theda Skocpol at Harvard University, have pointed out that voluntary involvement in civil society has been in decline since the second half of the twentieth century, and this involvement is in danger of shrinking to a few professional organizations rather than being every citizen’s right and duty. 2 2 Putnam, Bowling Alone; Skocpol, Diminished Democracy. When citizens’ participation in our democracy is reduced to voting, it poses a risk for social cohesion as well as for democracy, which should not exist only every four years during election campaigns but rather every day through spirited exchange among fellow citizens.

A related and worrying tendency of declining democratic participation is “circular lobbying,” in which civil-society organizations “accept government funding and then use it to lobby the government, essentially allowing the government to lobby itself.” 3 3 Benoit and Clement, Public Money, Private Agendas, 23. Since civil society is by definition a sphere distinct from government, public funding transferred to civil-society organizations puts at risk their ability to function independently and serve as a countervailing force. Furthermore, when the line between the state and civil society is blurred, public trust in society’s institutions can suffer. 4 4 Benoit and Clement, Public Money, Private Agendas, 3. At this time in Canada, when we are witnessing a decline of trust in institutions, 5 5 Edelman Canada, “Trust in Crisis.” the independence of civil-society groups is all the more important. The weakening or loss of independence signals a weakening of civil society and is also accompanied by a weakening of trust in other institutions. In addition, when the government tips the scales by funding some groups and not others, it puts independent, grassroots organizations at a significant disadvantage, resource-wise, in the public debate. 6 6 Benoit and Clement, Public Money, Private Agendas, 4.

In a robust democracy, it is normal and beneficial that government and civil society interact as independent institutions in the best interest of citizens. To make sure that laws and policies reflect citizens’ concerns and needs, legislators need to interact with the people they serve and value their opinion in the policymaking process. There are various ways to hear from citizens, such as in town halls and direct meetings with constituents, but engaging with civil-society groups is also an important way to get the pulse of the wider polity. For this exchange to be fruitful and fulfill its purpose, however, the groups involved must really be grassroots and independent, and they must represent their constituencies faithfully.

We suggest that a strong civil-society sector has the following three attributes. Civil-society groups should:

• Have a constituency, that is, a base of citizen supporters;
• Be entirely or primarily funded by these supporters and/or by other non-governmental sources, such as charitable foundations; and
• Determine their own views and positions, representing their supporters.

When government consults with groups having these attributes, it can be assured that it is not consulting just with itself but instead with groups that are independent of government and able to inform government of their supporters’ views. In this way, public trust in the democratic process is strengthened, government gains insight into the views of citizens, and the range of views heard improves government’s ability to find innovative and effective ways forward.

With the above-noted attributes in mind, this paper seeks to evaluate the health of the nexus between government and civil society in Canada through one specific case study. We study the groups that were invited to give oral testimony to Senate and House committees in 2023 on Bill C-35, An Act Respecting Early Learning and Child Care in Canada, the extent to which these groups were independent of federal government funding, and the position each group held on the bill. 7 7 Bill C-35, An Act Respecting Early Learning and Child Care in Canada; Parliament of Canada, Standing Committee, Bill C-35.

We found that thirty-eight groups supported the bill, and six groups opposed. Further, we found that two-thirds of the total forty-four groups received some federal funding during the years 2020 to 2024. The amount of federal funding correlated with position on the bill. Groups favourable to the bill received approximately $1,300 for each dollar received by groups that were opposed to the bill. In 2023, the year in which the hearings were conducted, none of the six groups that opposed the bill received any federal dollars, whereas twenty-three of the thirty-eight groups supporting the bill received some. Furthermore, we found that some of the groups invited to testify had been embedded in the policy development leading up to the tabling of the bill.

We want to stress several important points. First, we do not cast aspersions on any group that receives federal funds. As shown in the appendix, Cardus itself received some federal funds. Nor do we argue that a group’s source of funding must influence the positions it holds; we do not assume a causal relationship between reliance on government funding and positions held. Nor does it matter to our argument which government is in power at any given time; we are not making a partisan argument. What we are asserting, instead, is that in a robust democracy, civil-society groups should, as much as possible, exemplify the three attributes we offered above: They should represent a base of supporters, be funded independently, and determine their own views. These attributes are what make them part of civil society, a sphere distinct from government.

When government invites groups with these attributes to contribute to its deliberations, it can be assured that it is indeed engaging with citizens for the benefit of all. If a government instead finances groups, and these groups predominate in parliamentary hearings, it undercuts the possibility of gaining wide-ranging input and hearing persuasive arguments that others might have offered. The dynamic also poses a risk to favoured groups themselves, as over-reliance on government funds may discourage independence and forthright criticism of government legislation and policy.

Bill C-35 was tabled in the House of Commons in 2022. Between second and third readings, parliamentary committees typically scrutinize a bill and may propose improvements. Seats are allocated on committees in proportion to seats that each party has in the House. Any citizen or group of citizens may submit written briefs commenting on the proposed legislation and may request to testify. Committees decide whom to call to testify.

The Parliament of Canada’s website states that “an important part of the work of Parliament is done in committees. In these groups, parliamentarians examine proposals for new laws in detail, study issues, consult with experts, and listen to Canadians to inform their decisions and recommendations.” Committees “gather input from many sources,” an approach that “allows Canadians to participate in the legislative process” and enables the committee to do its work “with as much information as possible.” Further, the website notes that “when choosing witnesses, committee members try to select people who have diverse identities, as well as positions and perspectives across the political, social and cultural spectrums.” 8 8 Parliament of Canada, “Parliamentary Committees.” Since the stated purpose of hearing outside experts and groups is to hear diverse viewpoints on the proposed legislation, the participation of an independent civil society in this process is crucial.

Committee hearings on Bill C-35 were conducted in spring 2023 in the House and in fall 2023 in the Senate. The bill became law in 2024. Fifty-four witnesses gave testimony. Of these, six were academic experts testifying in an individual capacity and four were government officials. We excluded them from our analysis since our purpose was to study the relationship between government and civil-society groups.

The remaining forty-four witnesses are listed in the appendix. We grouped them into five categories:

• advocacy groups or think tanks
• charitable foundations
• child care associations or providers
• professional associations or unions
• special-interest groups (advocating for specific populations)

Some groups were hard to classify into just one of these categories. The YMCA, for example, is Canada’s largest not-for-profit child care provider and also employs lobbyists and engages in activities typical of advocacy groups. In such cases, we classified groups according to what we judged to be their primary identity.

Next, we classified each group as being in favour of or opposed to the bill, based on our reading of the hearing transcripts, any written brief the group submitted to the committee, and any statements on the group’s website with direct bearing on the issue. The classification was straightforward in almost all cases. In the few hard cases, we based our decision on whether the group’s recommendations during the hearings were in line with or counter to the spirit and purpose of Bill C-35, even if the group did not directly state that it favoured or opposed the bill.

We limited our examination of the groups’ funding to the years 2020 to 2024 (the bill became law in 2024). Using publicly available data, we examined, for each group, its (1) position on Bill C-35 (in favour or opposed), and (2) revenue received from the federal government.

It is important to note that some of the groups received funding from provincial, territorial, regional, or municipal governments. These sources of public funding were excluded from our analysis.

Of the forty-four groups, eighteen were registered charities, twenty-four were non-profits that were not registered charities, and two were for-profit. Registered charities are required to disclose publicly any revenue received from public funds. This information is stated in the registered charity’s annual T3010 filing. 9 9 Canada Revenue Agency, “List of Charities and Certain Other Qualified Donees.” Groups that are not registered charities are not required to disclose financial information publicly. We were able to obtain information on these groups’ federal funding because the government discloses all funds disbursed. 10 10 Government of Canada, “Grants and Contributions”; Government of Canada, “Public Accounts of Canada.”

The Grants and Contributions database includes multi-year funding agreements. To limit double-counting, we assigned multi-year agreements to the year in which they were signed.

In four cases, grants were awarded to a recipient with the stated objective that the recipient would use the funds in partnership with one or more other groups. In these cases, we did not know how the funds were allocated among the primary recipient and the other named groups. In order to represent these grants fairly, we excluded them from the data shown in the appendix but counted them in the aggregate amounts reported in figure 4. These four grants totaled $2,391,369:

• 2021: Oxfam (recipient), Child Care Now and Childcare Resource and Research Unit (partner), $558,331
• 2022: Oxfam (recipient), Child Care Now and Childcare Resource and Research Unit (partner), $69,600
• 2022: Ontario Native Women’s Association (recipient), Femmes Michif Otipemisiwak (partner), $500,000
• 2024: Oxfam (recipient), Child Care Now and the Pacific Immigrant Resources Society (partner), $1,263,438

It is also important to note that several of the forty-four groups are projects of a parent organization, and it is the parent organization that received the funding reported in the appendix. These groups are Campaign 2000, a project of Family Service Toronto, and First Nations Pedagogies Network, a project of the BC Aboriginal Child Care Society.

Finally, we note that Early Childhood Development Association of Prince Edward Island, Early Childhood Educators of British Columbia, and Manitoba Child Care Association are each members of the Canadian Child Care Federation. In reporting the federal funding received, we consider the provincial members of the CCCF to be recipients of public funding, but each row in the appendix reports only the funding given to each specific group.

Of the forty-four groups, fifteen (34 percent) were child care associations or providers, twelve (27 percent) were special-interest groups, ten (23 percent) were advocacy groups or think tanks, four (9 percent) were professional associations or unions, and three (7 percent) were charitable foundations.

We also observe from this breakout that the civil-society groups most directly involved in the content of a bill—in this case, child care associations or providers—do not always predominate in parliamentary hearings. This category was just 34 percent of the whole. Advocacy groups or think tanks and special-interest groups not specifically focused on child care constituted 50 percent of the whole.

Twenty-eight (64 percent) of the forty-four groups received some amount of federal funding in the period 2020–24. In some cases, the funding was substantial: Twenty-three (52 percent) of the forty-four groups received more than $1 million during the period.

Of the fifteen groups classified as child care associations or providers, seven received some federal funding and eight did not. As for the professional associations or unions, two received some federal funding and two did not.

Groups classified as special interest, or as advocacy groups or think tanks, had a high incidence of federal funding. Eleven of the twelve special-interest groups received some federal funding. Eight of the ten groups in the advocacy or think tank category received some federal funding.

Charitable foundations were the only type of group that did not receive any federal money. This is to be expected, since their purpose is to distribute private wealth for charitable purposes.

Thirty-eight (86 percent) of the groups were in favour of the bill, and six (14 percent) were opposed. As shown in figure 3, most of the groups in favour of the bill received some federal funds, and most of the groups opposed to the bill did not receive any federal funds, during the five-year period studied.

When we compare stance on the bill with amount of federal funding received, we find that groups in favour of the bill received more than $1,300 for each dollar received by groups that were opposed. During the five-year period, the thirty-eight groups that testified in favour of Bill C-35 received a total of over $1.1 billion in federal funding. Of these, YMCA Canada and YMCA of Toronto received over $500 million combined.

Of the six groups that opposed the bill, five received no federal funds. The sixth was Cardus, which received $899,043. 11 11 In 2020–22, Cardus received federal funds as part of the COVID-19 emergency funding programs. In 2021, Cardus received a grant from Employment and Social Development Canada’s Enabling Accessibility Fund. The $899,043 represents 3 percent of Cardus’s revenue during this period.

This blurring of the line between government and civil society resembles circular lobbying. As figures 3 and 4 show, there is a significant disparity in the amount of federal funding granted to groups in favour of Bill C-35 and the amount granted to groups opposing the bill. Given the content of the bill, which essentially proposed a framework for the federal government to become involved in a sector in which it previously had little or no involvement, it is concerning that the majority of groups in favour of the bill received federal funding, often in large amounts, while nearly all the groups opposed were funded independent of government. It can therefore be argued that groups that receive federal funding are generally more supportive of expanding the federal government’s role in early learning and child care than are the groups that do not receive such funding.

A few observations are also in order on the process that preceded the tabling of the bill. In the years 2018–21, the federal government created an Expert Panel on Early Learning and Child Care (ELCC) Data and Research, an ELCC Data and Research Program, and a National Advisory Council on Early Learning and Child Care. 12 12 Employment and Social Development Canada, “Expert Panel”; Government of Canada, “Grants and Contributions”; Employment and Social Development Canada, “National Advisory Council on Early Learning and Child Care.” The members it appointed to these bodies were in some cases also witnesses at the parliamentary hearings on the bill (see appendix). In other words, groups that helped the government to develop its positions were later called upon to opine on the bill. Some of these groups also received funding to conduct research in support of the bill’s development. 13 13 Groups that are included in the Expert Panel on ELCC Data and Research and/or National Advisory Council on Early Learning and Child Care, and/or that received funding from the ELCC Data and Research Program, are identified as such in the appendix. It is clear that these organizations, even if they are not formally affiliated with the state, served as government partners.

The findings of this study prompt important questions about the health of civil society in Canada, and the role and independence of civil-society groups in relation to government. Can civil society thrive, and serve as a countervailing power, if it is itself funded by government? If a group receives a substantial part of its funding from government, in what sense(s) is it still a civil-society group, and to what extent is it comfortable criticizing the government when it believes criticism is warranted? What value do witnesses at parliamentary hearings add to the scrutiny of proposed legislation when they have been key players in the formation of that legislation? To what extent are parliamentary committees delivering on their mandate to “listen to Canadians,” “gather input from many sources,” and benefit from “positions and perspectives across the political, social and cultural spectrums”? 14 14 Parliament of Canada, “Parliamentary Committees.”

This research suggests possible areas of future study. Future research could examine groups’ funding going back decades rather than only a few years and could include provincial and municipal funding. Since child care lay fully within provincial jurisdiction until Bill C-35 was introduced, consideration of provincial sources of funding would be particularly relevant. As for the groups that receive membership dues, it would be useful to study whether membership numbers have risen, remained constant, or declined as government funding has increased or decreased. In determining how robust our civil society is, we should also care about the strength and independence of registered charities. Is it good for governments to fund them as much as they do? If charitable groups effectively become government subcontractors, they cease to be the voluntary associations that Tocqueville hailed as a necessary countervailing power to that of the state. Instead, they become an extension of state power, further atrophying the vigour of grassroots groups of citizens that provide strength to Canadian democracy.