Don’t force charities and non-profits into crisis before wage subsidy kicks in

UPDATE—April 8, 2020: Today a letter was sent to key government officials requesting that the new Canada Emergency Wage Subsidy (CEWS) program be made available to all charities and community non-profits, without the requirement to experience a revenue loss before becoming eligible. All the organizations which added their name at the bottom of this blog post have been included in this letter.

Also, please note that as of today, “the Government proposes to make the CEWS more accessible than originally announced by reducing the 30-per-cent benchmark to 15 per cent, in recognition of the fact that many businesses did not begin to be affected by the crisis until partway through the month.” We still believe that there is a strong case for the call to remove the revenue loss requirement outlined here and in the aforementioned letter. We will keep you posted on any new developments.

Version française

Finance Minister Bill Morneau shared details yesterday about the new federal wage subsidy program that will cover 75 per cent of wages for employers hit by the COVID-19 crisis, specifically those who’ve seen a 30 per cent drop in revenues compared to this time last year (details here). As expected, the program will be available to charities and non-profits. This is important—but the bad news is these organizations will have to demonstrate the same debilitating 30 per cent drop in revenues as private businesses in order to qualify.

There are a number of reasons why it makes sense to instead immediately qualify all Canadian charities and community non-profit organizations for the new Canada Emergency Wage Subsidy (CEWS) program. These reasons relate to both the role they play in our society and to their financial structure. 

First, charities and non-profits form a vital part of our social fabric. Many are on the front lines of the COVID-19 response, providing a wide range of health and social services. They work directly with the most vulnerable or marginalized members of our communities, including seniors, people with disabilities, folks living in poverty or experiencing homelessness or hunger, migrant workers and others who don’t have the benefit of a union, women and children dealing with violence, and people struggling with mental health issues or addictions—to name just a few.

These organizations in particular are seeing an increase in demand for their services during the pandemic—but without a commensurate boost in revenues to support that increased demand.

In addition to providing direct services, charities and non-profits also play an essential advocacy role, highlighting and seeking to address many of the inequities and gaps in our social safety net that have become so glaring in recent weeks as the COVID-19 pandemic hit. Charities and non-profits are also the engine that keeps whole sectors of our economy—like the arts—alive. 

Second, charities operate differently than private enterprise. Most of these organizations are not primarily in the business of selling goods or services—their revenues typically come in at different key points in the year in response to fundraising appeals and events, membership fees, grants from institutional funders (including governments and foundations), business sponsorships, etc. Which means requiring them to show a 30 per cent drop in gross revenues for the month of March 2020 compared to March 2019 in order to access the federal wage subsidy doesn’t make sense. While some will already have seen a revenue decline of this magnitude, for others it is likely to happen more gradually or later in the year, as the economic disruption from COVID-19 leads to reduced donations, cancelled annual events and campaigns, plummeting earnings on funds held by grantmakers and tightened business sponsorship budgets.   

As Imagine Canada pointed out in its recent letter to the Prime Minister and his colleagues requesting emergency funding for the sector, charities also face a number of unique challenges, including:

• “Most organizations do not carry significant cash reserves; for those that do, those reserves for the most part represent less than three months of operating capital.
• Most organizations are not able to access emergency capital through lines of credit or bridging loans.
• The sector relies on 14 million volunteers; we are hearing of resource shortages for needed human and social service delivery operations as many of these volunteers are self-isolating.”

Given the realities facing the sector, it is inappropriate to subject charities and non-profits to the same eligibility test as corporations like banks, airlines and others.

To the extent that the primary purpose of the wage subsidy program is to mitigate the economic consequences of the pandemic for employers and workers, relief should be extended to non-profits and charities proactively, before they are forced to lay off staff, abandon leases or even shutter permanently.

For those who question whether groups not directly involved in providing services related to the COVID-19 crisis should benefit from an immediate infusion of support, regardless of whether their revenues drop: Since charities and non-profits are by definition, well, not operating to make a profit, the worst that will happen as a result of extending immediate assistance is that some organizations may experience a boost in revenues that gets put to use directly in the community, or that bolsters reserve funds going into a prolonged recession.

Compare this possible outcome to what may happen with some private employers that access the subsidy, which is available to private businesses of all sizes with virtually no conditions (other than the 30% drop in gross revenues within a one-month period, year over year). For example, as my colleagues Toby Sanger and Alex Hemingway have pointed out, corporations will be free to access the program and still pay executive bonuses and/or shareholder dividends. Corporations that see a temporary drop in revenues but still book profits for the year will not have to pay back any of the subsidy (such as through a steeper tax on profits).

It is the case that the previously announced 10% wage subsidy will still be available to non-profits and charities that do not qualify for the new more generous program (same for small businesses). But while the 10% subsidy doesn’t require employers to demonstrate a steep loss of revenues, it maxes out at a total of $1,375 per employee and $25,000 per employer. The newly announced Canada Emergency Wage Subsidy program in contrast pays $75% of wages up to $847 weekly (per employee) with no per-employer maximum.

The federal government news release issued yesterday alongside the finance minister’s announcement does imply that some fine-tuning of the eligibility threshold is in progress, but it does not sound like waiving the threshold altogether is under active consideration:

“For non-profit organizations and registered charities similarly affected by a loss of revenue, the government will continue to work with the sector to ensure the definition of revenue is appropriate to their circumstances. The government is also considering additional support for non-profits and charities, particularly those involved in the front line response to COVID-19. Further details will be announced in the near term.”

But waive it is what the federal government should do. We are in a period when governments must act quickly using relatively blunt policy instruments. Through CEWS we are about to turn on a firehose of cash to the private sector to the tune of $70 billion. Making charities and non-profits immediately eligible for the program is an easy and important fix. Communities can’t wait. There is no need to throw non-profits and charities into crisis before they can benefit.

Full disclosure: The Canadian Centre for Policy Alternatives is a registered charity. I write this piece with that conflict of interest unapologetically noted.

If your organization would like to endorse the call to make charities and community non-profits immediately eligible for the Canada Emergency Wage Subsidy, please sign up below. Your organization name and contact information may be shared with key federal government decision makers, but only endorsing organization names (not your contact info) will be listed publicly. Endorsements are subject to review by CCPA staff. Individual can send an email to your MP, the Prime Minister and Minister of Finance here.

Endorsed by:

1JustCity
À deux mains / Head & Hands
Abilities Manitoba
Aboriginal Council of Winnipeg
Aboriginal Mother Centre Society
Access Pro Bono Society of BC
Active Support Against Poverty
Aids Vancouver Island
Alberta Animal Rescue Crew Society
Alexandra Neighbourhood House
Ambioterra
ANIDA
Animals in Science Policy Institute
Archway Society for Domestic Peace
Arts Council of New Westminster
ArtsForward
ArtStarts
Association Of Whistler Area Residents for the Environment (AWARE)
Atira Development Society
Aunt Leah’s Place
BC Artscape
BC Civil Liberties Association
BC Council for Families
BC Healthy Communities Society
BC Library Association
BC Non-Profit Housing Association
BC SPCA
Be the Change Earth Alliance
Big Brothers Big Sisters of North & West Niagara
Big Brothers of Greater Vancouver
Boys and Girls Clubs of Central Vancouver Island
Broadbent Institute
Caetani Cultural Centre Society
Calgary Catholic Education Foundation
Campaign 2000
Campbell River, Courtenay & District Labour Council
Can You Imagine Preschool
Canadian ADHD Resource Alliance (CADDRA)
Canadian Community Economic Development Network
Canadian Federation of Students
Canadian Goodwill Industries
Canadian Mental Health Association
Canadian Mental Health Association – Cariboo Chilcotin Branch
Canadian Mental Health Association – Cowichan Valley Branch
Canadian Mental Health Association – Kelowna & District Branch
Canadian Mental Health Association – SOS Branch
Canadian Mental Health Association – South Cariboo
Canadian Mental Health Association, National
Canadian Mental Health Association, Vancouver – Fraser Branch
Canadian Mental Health Association; Vernon and District Branch
Canadian Muslim Women’s Institute
Canadian Parks and Wilderness Society, British Columbia
Capilano Students’ Union
Caravan Farm Theatre
Catalyst Community Developments Society
Center for Epilepsy & Seizure Education
Central City Foundation
Central Food Network
Centre d’éducation financière EBO
Centre for Studies and International Cooperation (CECI)
Chalmers Community Services Centre
Check Your Head: the Youth Global Education Network
Children First Canada
Children’s Rehabilitation Foundation
CHILLIWACK RESOURCE CENTRE
Chrysalis Drug and Alcohol Abuse Recovery Society
Chuntoh Education Society
Circle of Life Thunderbird House
CMA
Coalition of Child Care Advocates of BC
Collingwood Neighbourhood House
Columbia College
Community Action Initiative
Community Bridge
Community Legal Assistance Society
Community Social Planning Council
Connect Employment Services Inc.
Conseil culturel et artistique francophone CB
Conseil québécois LGBT
Conseil régional FTQ Montréal métropolitain
Construction Industry Rehabilitation Plan
Continuity Care Inc.
Coolaid
Corporation de développement communautaire de Beauport
Corporation de Développement Communautaire de Vaudreuil-Soulanges
Corporation de Développement Communautaire du Haut-Saint-Laurent
Council of Canadians
Covenant House Vancouver
Craig Street Cats
Creating Accessible Neighbourhoods
Crisis Intervention and Suicide Prevention Centre of BC
CSD
Csq
Cyrus Centre Ministries
Cythera Transition House Society
David Suzuki Foundation
Dawn House Services and Housing for Women, Inc
Decolonizing Practices / Nahanee Creative
Disability Alliance BC
Disability Foundation
DIVERSEcity Community Resources Society
Dogwood
DreamRider Productions Society
Dundarave Festival
Eastside Culture Crawl Society
Eating Disorders NS
EDAM Dance
Edmonton Chamber of Voluntary Organizations
Elizabethfry society
Entre Nous Femmes Housing Society
Environmental Youth Alliance
Equal Opportunities West
Exchange Inner City
Explore & Discover Early Learning Centre
Fédération des syndicats de l’action collective (FSAC-CSQ)
Federation of Calgary Communities
Femmes autochtones du Quebec
First Call: BC Child and Youth Advocacy Coalition
First United Church Community Ministry Society
Flin Flon Aboriginal Friendship Centre, Inc.
Focus on Nature
Folklorama
Fort Nelson Aboriginal Friendship Society
Fort St John Métis Society
Fort St. John Literacy Society
Fraser River Indigenous Society
Frog Hollow Neighbourhood House
Fsac csq
Furniture Bank
Gastrointestinal Society
Georgia Strait Alliance
Global Youth Education Network Society//Next UP
Graceland Ministries
Greater Victoria Eldercare Foundation
GREEN COMMUNITIES CANADA
Green Teams of Canada
GRFPQ
Groupe de recherche et de formation sur la pauvreté au Québec
H.I.M. Health Initiative for Men Society
Habitat for Humanity Greater Vancouver
Handy Circle Resource Society
Health Sciences Association of British Columbia
Hello Cool World
Helping Hands
Helping Spirit Lodge Society
Hollyburn Family Services Society
Home Routes / Chemin Chez Nous
Hope for Freedom Society
ID2 Communications Inc – Communications for Sustainable Communities
IMPACT Parkinson’s Society
Indian Summer Arts Society
Islamic Social Services Association
Island Prostate Centre
ITALIAN CHAMBER OF COMMERCE IN CANADA WEST
James Bay New Horizons
Jennifer Ashleigh Children’s Charity
Jewish Seniors Alliance of Greater Vancouver
Journey Home Community Association
Jubilee United Church
Keewatinowi Awasisak Opi-Ki-Wak, Inc./ Grassroots ELCCC
Kekinow Native Housing Society
Kinbrace Community Society
La Boussole, centre communautaire Francophone
La maison sous les arbres
Ladysmith Family and Friends
Ladysmith Resources Centre Association
Last Door Recovery Society
Leadership Victoria Society
LGBT YouthLine
Lillooet Friendship Centre Society
Living in Community
Living Oceans Society
Living Wage Canada
Mennonite Central Committee Canada
Mennonite Central Committee Manitoba
Mennonite Central Committee Ontario
Mennonite Central Committee Saskatchewan
Millennial Womxn in Policy
MOSAIC
Museum of Vancouver
National Campus and Community Radio Association
NEC NATIVE EDUCATION COLLEGE
Network of Inner City Community Services Society
New View Society
New Westminster Family Place
Nobel Women’s Initiative
NorteSur Artistic Productions
North Shore Community Resources
Northern Health Authority
Nursery Two Child Care
Oak Table Inc.
ONE TO ONE Literacy
OPEN Technologies
OpenMedia
Options Community Services Society
Options for Sexual Health
Outward Bound Canada
Pacific Immigrant Resource Society
Pacific Legal Education and Outreach Society
Phoenix Society
Po Yuen Taoist Centre Society
Polaris Institute
Port Alberni Friendship Center
Positive Living North
Prince George New Hope Society
Québec Native Women
Rabble.ca
Réseau des tables régionales de groupes de femmes du Québec
Réseau québécois des groupes écologistes
Réseau québécois des OSBL d’habitation
Reseau-Femmes Colombie-Britannique
Richmond Poverty Response Committee
Rivershed Society of BC
Russian School Svetlyachok
Ryde Lake Camp
S.P.L.A.S.H. Child Care Inc.
Salt Spring Arts Council
Sam Sullivan Disability Foundation
Sanctuary Mental Health Ministries
SARA for Women Society
Sarasvati Productions
Sasamat Outdoor Centre
scfp
SCFP 1500
Schubert Centre Society
Section locale 571, SEPB-Québec
Semiahmoo House Society
Seniors Services Society of BC
Seniors Serving Seniors
Sentiers Québec-Charlevoix
SEPB section locale 574
SFU Centre for Dialogue
SFU Public Square
Sierra Club BC
Social Planning Council of Cambridge and North Dumfries
Social Planning Council of Winnipeg
Social Venture Partners Vancouver
Société francophone de Maillardville
Society to End Homelessness in Burnaby
Sooke Shelter Society
Sources Community Resources Society
South Granville Seniors Centre
South Vancouver Neighbourhood House (SVNH)
Southside Community Church
SPEC
Spectrum Society for Community Living
Spirit of the Children Society
Splash Child Care
Splash child care Inc
St. Amant Foundation
St. James-Assiniboia Montessori Assoc. Inc.
St. Vital Child Care Co-op Inc.
Stanley Knowles Children’s Centre Inc.
Stars of Promise Inc
Still Moon Arts Society
Street Corner Media Foundation
Student Energy
Sunshine Coast Botanical Garden Society
Sunshine Coast Hospice Society
SWAN Vancouver Society
Syndicat du personnel du CECI
Synergy Sustainability Foundation
T2 Thompson Toddlers Day Care
Table de concertation de Laval en condition féminine
The Cerebral Palsy Association of Manitoba
The Dance Centre
The Essential Collective Theatre
The Leap
The Mississauga Food Bank
The Parkwood Foundation
The Progressive Housing Society
The Realistic Success Recovery Society
The Society to End Homelessness in Burnaby
The Vancouver Learnary Society
The Writers’ Exchange Society
The Yoga Outreach Society
Thrive Kids Canada Association
Tides Canada
Together We Can Drug & Alcohol Recovery & Education Society
Two Rivers Gallery
Two Ten Recovery Inc.
UBC School of Social Work
Umbrella Multicultural Health Co-op
Umoja Operation Compassion Society
Unicorn Group
Uniti
Urban Native Youth Association
Urban Village Church
Vancity
Vancity Community Foundation
Vancouver Foundation
Vantage Point
Vernon Public Art Gallery
Volunteer Campbell River
Wachiay Friendship Centre Society
Wasagaming Foundation Inc. (Camp Wannakumbac)
WAVAW Rape Crisis Centre
Wavefront Centre for Communication Accessibility
Wawanesa Wee Care Inc
West Coast LEAF
West End Seniors’ Network
Westside Family Place
Wilderness Committee
Wildsight
Wings of Power
WISH Drop-In Centre Society
WOMAN HEALING FOR CHANGE MB
YMCA Canada
YWCA Vancouver
Zero Ceiling Society of Canada
Zion United Church

Notes

1. “Non-profit” is a large category that in addition to community organizations can include government non-profits like universities and hospitals, and business non-profits and professional associations. My primary focus in this piece is community non-profits.

Topics: COVID-19, Economy, Employment & labour, Provincial budget & finance