Governments can support nonprofits in preparing for an economic downturn

In response to global trade disruptions and their impacts on Canada’s labour force, the federal government has quickly adjusted the work-sharing Employment Insurance (EI) benefit. Businesses experiencing a downturn as a result of the U.S. tariffs can access work-sharing for their employees, with the assistance of EI, on a more flexible basis. 

This is an excellent move to ensure companies keep their staff employed and their capacity intact through difficult times. Nonprofit and charitable organizations are eligible for this work sharing benefit as well if they experience a reduction in revenue from things such as reduced donations, grants, memberships or investment income as a direct or indirect result of the tariffs. At first glance, it appears as if it’ll provide some relief to the community care sector. However, the reality of nonprofits on the ground during such massive social and economic trends, requires a bold response. 

The nonprofit and charitable sector operates counter cyclically to the business sector. When businesses have difficult times, demand for nonprofit services increases dramatically. The COVID-19 pandemic, during and after the destructive forest fires in Fort McMurray and Jasper, and storm floods in British Columbia and Nova Scotia are all examples of when the nonprofit sector stepped up and government put in additional funds so nonprofit-driven services like food banks, temporary accommodations, homeless shelters, community health centers, and more could respond to increased community needs. 

The nonprofit sector’s workload will not decrease with tariffs, instead the demand for their services will swell as varying degrees of the worst-case scenarios for communities begin to take shape. The sector is trying to prepare for a surge in demand at a time when the sector is still recovering from pandemic burnout and losses and navigating the impact of tariffs on their own revenue and expenses.

So while the EI work-sharing adjustments are welcomed, they do not take into account the nonprofit sector’s realities in our current context. Nonprofits need supports that enable them to be nimble and agile in a rapidly shifting landscape. 

What can all levels of government do to support the sector in preparing for an economic downturn?

• Invest in a “tariff fighting” fund for nonprofits to cope with increasing demand for community services such as food banks, programs to keep families housed and provide shelter for those unhoused, services to help people find new employment opportunities, and with decreased incomes people and families will need support accessing community recreation and summer programs.
• Ensure nonprofits are part of, and prioritized in tariff stimulus packages and plans. 
• Identify solutions with nonprofits that know what needs to be done in challenging times by setting up roundtables between governments – whether federal, provincial, territorial, or municipal – and nonprofits to discuss how we can protect Canada together.

Canadians are in this fight together; investing into community supports during these hard times is vital for maintaining social cohesion, health and wellness, and morale. Supporting the sector means bringing people together, helping them to build stronger and more resilient communities.