Economic Uncertainty

U.S. tariffs ignite an economic downturn

Ontario’s socio-economic landscape is rapidly shifting at a time when healthy and resilient nonprofits are needed more than ever. 

The uncertain economy (i.e. tariffs and global trade war) is leading to an economic downturn, impacting nonprofits in three ways: as employers, procurers of goods and services, and as organizations supporting people. 

Sector-wide there is a deep concern about increasing community needs during an economic downturn and decreased resources to meet needs:

• Geographic regions with workforces more exposed to the tariffs – Oxford, Ontario has the highest workforce exposure, for example – will be impacted first and more acutely. 
• Social services will see an immediate increase in demand for services as unemployment increases, exacerbating existing issues like the housing crisis and food insecurity.
• Less disposable income and shifting funding priorities means that arts and culture and sports and recreation nonprofits may see scalebacks or closures throughout the year.
• Charitable giving is decreasing, as it has been over the past two decades.
• Corporate giving is decreasing.

What else are nonprofits navigating?

• A new federal and provincial public policy landscape is shifting public spending from system building to austerity, and is specifically focused on bolstering the economy and expanding police/military spending. 
• A domino effect of a weakening social safety net is creating untenable pressure to all parts of the nonprofit and public sectors. 
• Deepening polarization and backlash to equity are threatening our democracy.
• A rise in facism around the world that is disregarding the rule of law.
• Integration of AI and other technology in the day-to-day is exacerbating existing issues and is rapidly changing nonprofits’ work.
• Shorter time between crises – climate disasters, public health emergencies – is requiring quick organizational pivots yet diminishing capacity to respond.
• These trends come at a time when nonprofits are already in an impossible situation after the pandemic. According to ONN’s 2024 state of the sector survey, Ontario’s nonprofit sector is facing stagnant and declining financial resources amidst climbing demand, volunteers are not returning to the sector post-pandemic, and it’s harder to recruit and retain talented staff.

Responses to tariffs from governments

• Stay up to date on what’s happening with Springboard Policy’s consolidated federal, provincial, and territorial government responses. This is a living resource which will be updated on a regular basis. Given the tariffs are federal jurisdiction, they are tracking their specific response to tariffs here.
• Learn about measures the federal and provincial governments are putting in place to see if they apply to you: 
• Federal government has introduced adjustments to employment insurance to support workers
• The Ontario government is providing a 6-month reprieve for small businesses on some provincial taxes and $2 billion rebate for safe employers through the Workplace Safety and Insurance Board. They also put in place a Procurement Restriction Policy to restrict U.S. firms from bidding on public sector and broader public sector (this includes Children Aid’s Societies and anyone receiving $10 million or more in government funds in the fiscal year prior) procurement.

Key messages and supportive data to make the case for increased support, proactively prepare, and advocate

Key Messages

• Nonprofits are preparing for the next emergency in Ontario. 
• Ontario’s economic well-being and societal shifts are inextricably tied to the work of nonprofits. We are impacted in three ways: as employers, procurers of goods and services, and as organizations supporting people. 
• Nonprofits are essential to economic policy. We are economic actors and drivers in local communities.
• Many nonprofits already buy local and social, and employ local.
• Nonprofits, nonprofit social enterprises, and nonprofit co-ops must be included in social procurement policies that municipalities across Ontario are putting forward, such as in Aurora, Brampton, Burlington, Vaughan and Toronto. Check out how Pillar Nonprofit Network in London is advocating to their municipality for prioritizing the nonprofit business model and other local producers.

Supportive data

• Use the Institute for Research on Public Policy data dashboards to determine how vulnerable your local workforce is to the U.S. tariffs. Oxford, Ontario has the highest workforce exposure at 11.4 per cent, 40 per cent of its workforce. Most regions outside of Toronto have high exposure rates. 
• Use data on Canadian charities from the Charity Insights Canada Project to quantify the trends you are facing if you are a charity. In total, 53 per cent of charities report the U.S. political landscape impacts them somewhat while the top strategy to combat uncertainty was strengthening relationships with funders. This new briefing note highlights the trilemma facing Canada’s charitable sector.
• Use ONN’s state of the sector surveys to provide a snapshot of the nonprofit sector in your region or subsector.

Additional resources

• ONN: Resilience and community in times of change: The role of the non-profit sector
• CICP: At a Tipping Point: The Trilemma Facing Canada’s Charitable Sector
• Co-operators Community Funds (CCF): Annual Report 
• Hamilton Community Foundation: The fight for justice and economic inclusion has become that much more urgent 
• Imagine Canada: Nonprofit sector must remain strong, especially in time of economic turmoil
• Imagine Canada and Philanthropic Foundations Canada: Canada’s charities: Essential to community, democracy, and economic prosperity
• Institute for Research on Public Policy: Measuring community workforce exposure to U.S. exports
• Philanthropic Foundations Canada: Philanthropy’s role in supporting Canada through an existential crisis and Actions for Canadian Philanthropic Foundations
• Pillar Nonprofit Network: Nonprofits Under Pressure: Surveying Local Sector Concerns Amid U.S. Tariff Threats
• PwC: The impact of US Tariffs for Canada’s not-for-profit sector
• The Financial Accountability Office of Ontario: The Potential Impacts of US Tariffs on the Ontario Economy
• Board chairs of national charities (BGC Canada, Big Brothers Big Sisters of Canada, Canada Mental Health Association, National Association of Friendship Centres, United Way Centraide Canada, YMCA Canada, YWCA Canada): Investing in Canada’s Community Services Sector Is Investing in Canada’s Future