In 1995, the Liberal Government of Canada introduced-the Canada Health and Social Transfer (CHST). This policy consolidated two programs: the Established Programs Financing Plan (EPF) and the Canada Assistance Plan (CAP), which together articulated the joint federal commitment to post-secondary education and health care in Canada.This work will begin with a brief overview of the history of the Canadian welfare state so as to establish a basis through which to consider the organization and impact of a state system of social supports to the residual system currently provided by the voluntary sector. From here, a detailed description of the character of nonprofit and charitable organizations in Canada will begin to reveal the existing, and often conflictual, relationships between the voluntary, private and public sectors. A case analysis of charitable and nonprofit organizations in Regina will further demonstrate the opportunities and challenges faced by the sector as a result of its current paradoxical environment.