As we enter the final stretch of the year, Canada continues to experience considerable social and economic tumult. Although the pandemic is no longer dominating the headlines, its impacts are still being felt in many ways. In this challenging environment, nonprofits continue to do their best to serve their communities. Many also report taking steps to provide better work environments for their staff. In the latest edition of this quarterly blog series, we discuss some of the trends that are impacting Canada’s nonprofit sector in the fourth quarter of 2022. 

The end of the pandemic is in sight…or is it?

The last several years have been dominated by the pandemic, with large portions of the nonprofit sector severely impacted by COVID-19 and the economic, social, and health issues it brought with it. In September, the Director-General of the World Health Organization, Tedros Adhanom Ghebreyesus, made headlines by declaring that the end of the pandemic was in sight. This statement was based on the availability of vaccines and emergence of less severe variants. 

It remains to be seen, however, whether this prediction will be accurate, particularly in the northern hemisphere and in countries, like Canada, that have dropped most mitigation measures. Some Canadian experts were quick to warn that new variants have tended to appear in the fall and winter, when school is in session and everyone spends more time indoors. Recent data also suggest that caution is warranted. By mid October, many provinces, including both Ontario and Quebec, were reporting increased COVID-related hospitalizations.

Population health and challenges accessing care are likely to affect the entire sector

A large-scale study conducted by the Public Health Agency of Canada and Statistics Canada found that almost 15% of people who contracted COVID-19 were still dealing with symptoms three months later. Of those dealing with longer-term COVID-19 symptoms, almost three in four said these symptoms had caused them to miss work or school. Another study, recently published in the Canadian Medical Association Journal, found that people who had tested positive for COVID-19 made significantly more use of health care services than those that did not. The study concludes that “given the number of recent infections, our findings portend substantial health care use by people in Canada.”

The greater need for health care services, combined with a shortage of healthcare workers, has led to significant problems with access to care. For the last several months, media outlets across the country have been regularly reporting that Canadians are facing long wait times for both emergency care and surgery, lack of availability of ambulance services, and emergency room closures. In September, the new president of the Canadian Medical Association said the health care system was in crisis.

This situation has many implications for the nonprofit sector. If the population is less healthy and can’t access care in a timely manner, challenges recruiting and retaining staff and volunteers are likely to increase for all organizations. In addition, many of the issues sector organizations work to address (e.g., poverty, homelessness, disability rights, addiction) are intrinsically linked to population health. So the current situation will likely lead to an increase in demand for the services these organizations provide. Finally, governments will be under great pressure to solve the health care crisis by pouring more money into the health care system, which may result in less money going to other needs.

There is also increasing talk about privatizing some parts of the healthcare system as a potential solution. Most of the proposals, such as those heard during the recent provincial election in Quebec, are incremental. However, if the health care system becomes increasingly privatized, this will have major implications for the types of services and supports nonprofits would need to provide to fill in gaps and serve their communities. 

Inflation continues to push up both costs and need for services

Inflation continues to be a major challenge for nonprofit organizations. Not only does it increase  operating costs, it also increases demand for the services provided by many organizations, and is likely to lead to a drop in donations. 

In the latest results of the Canadian Survey of Business Conditions from Statistics Canada, 44% of nonprofits indicated that they expect their operating expenses to increase over the next three months¹ and 51% said they expected rising inflation to be an obstacle for them.² Regarding demand for their services, 34% of nonprofits said they expected an increase in demand over the next 3 months³ and 43% reported that it will be a moderate or major challenge to meet demand during that period.⁴ When nonprofits are unable to meet demand due to rising costs, labour shortages, lack of stable funding or any other reason, it means there are communities and individuals who need support but aren’t getting it. 

On the donation front, a recent Angus Reid poll found that 54% of Canadians have decreased their charitable giving in response to the rising cost of living, with 30% having decreased their giving “a great deal”. The poll shows that charitable giving is one of the most common places people are cutting back spending. In 2019, donations accounted for 17% of the annual income of community nonprofits.⁵ Additionally, the end of the year marks the holiday giving season when many nonprofits receive a significant portion of their annual donations. At a time when many organizations are only just recovering, or haven’t yet recovered, from the financial turmoil created by the pandemic, this could have a major impact not just this quarter, but over the next year.

Nonprofits working hard to support wellness of workers amidst continuing labour shortages

Just over a third (37%) of nonprofits and for-profits say they expect labour shortages to be an obstacle for them over the next three months.⁶ Nonprofits, however, are much more likely than for-profits to report having implemented or having plans to implement practices to support employee wellbeing and diversity. This is a positive sign for nonprofit workers, who often have to contend with low wages and few benefits. It is also likely to help nonprofit employers retain employees during the Great Resignation.

¹  Statistics Canada. Table 33-10-0533-01  Business or organization expectations over the next three months, third quarter of 2022.

² Statistics Canada. Table 33-10-0534-01: “Business or organization obstacles over the next three months, third quarter of 2022.”

³ Statistics Canada. Table 33-10-0533-01: “Business or organization expectations over the next three months, third quarter of 2022.”

⁴ Statistics Canada. Table 33-10-0555-01: “Level of challenge in meeting an increase in demand for the business or organization over the next three months, third quarter of 2022.” 

⁵ Statistics Canada. Table 36-10-0613-01: “Production, income and outlay accounts of non-profit institutions (x 1,000,000).”

⁶ Statistics Canada. Table 33-10-0534-01: “Business or organization obstacles over the next three months, third quarter of 2022.”