At a moment of immense pressure on communities and the organizations that serve them, recognition in the federal government’s Spring Economic Update is an opening, not an outcome. What the sector does next matters.
Two paragraphs should not feel momentous. But for a sector that has spent decades holding communities together while fighting to be seen in economic policy, they did.
Canada’s 2026 Spring Economic Update explicitly describes charities and nonprofits as drivers of the economy: organizations that create jobs, support communities, and supplement the social safety net. It also commits the federal government to consulting on a modernized charitable framework.
That language matters. It lands, however, in a painful reality. Organizations are facing rising demand, declining donations, workforce shortages, and chronic financial strain. The care economy is under severe pressure. Frontline workers are being asked to carry more with less. Too many grants and contracts still fail to cover the true cost of delivering the services that governments and communities depend on every day.
The people waiting for housing, care, food, settlement support, or a safe place in their community cannot live on recognition. Neither can the organizations serving them.
The real question is whether nonprofits, charities, and governments will use this opening to redefine their relationship.
The opportunity is larger than regulatory modernization. This could be the beginning of a modern social contract – one that recognizes the sector as an essential economic and social partner in building Canada’s future. But that will require courage and imagination from both the sector and government.
Social infrastructure is economic infrastructure
Governments readily understand the language of physical capital: housing, transportation, energy, technology, and major projects. The nonprofit sector has to make the equally compelling case for human and social capital.
Affordable housing, childcare, healthcare, long-term care, settlement services, food security, arts, recreation, and community belonging are not peripheral to productivity. They shape whether people can work, whether families can afford to live in their communities, whether newcomers can establish themselves, and whether older Canadians can access care with dignity.
Armine Yalnizyan, the Atkinson Fellow on the Future of Workers and Vice President of the Canadian Association for Business Economics, put the challenge plainly in our recent CharityVillage Connects conversation: Canada cannot deploy financial capital effectively while ignoring the human capital required to make the economy function.
Dr. Susan Phillips, Professor Emerita of Philanthropy and Nonprofit Leadership at Carleton University’s School of Public Policy and Administration and one of Canada’s leading nonprofit-sector researchers, added another important dimension. Charities and nonprofits innovate, train emerging workers, employ youth and newcomers, build the communities that attract talent, and give policymakers an ear to the ground about what is and is not working.
This is not a sentimental plea to value the sector because it does good work. It is an economic reality: strong communities are part of the productive capacity of the country. When social infrastructure fails, the consequences appear everywhere – in emergency rooms, workplaces, schools, shelters, and family budgets.
Speaking the language of economics means refusing to let the sector’s enormous value remain economically invisible.
Four moves the sector can make now
1. Measure the gap between demand and capacity
Drawing on the language used by central banks, Yalnizyan offered the sector a powerful frame: demonstrate its own “output gap.” Where are wait-lists growing? Which services are being reduced? Who is being turned away? How much demand is going unmet because organizations lack the people, funding, or infrastructure to respond?
Behind every data point is a person who did not get help when it was needed. Those stories are essential, but stories paired with consistent evidence are harder to dismiss. The goal should not be another layer of reporting for already overburdened organizations. It should be a shared, sector-wide approach that turns frontline knowledge into credible evidence for policy and investment decisions.
2. Stop treating organizational capacity as overhead
The systems that make good programs possible – skilled staff, technology, data, governance, finance, and facilities – are infrastructure. Yet nonprofits are routinely expected to deliver public value through short-term, restricted funding that does not cover the actual cost of the work.
Dr. Phillips posed the obvious comparison: governments would not contract with a private company and expect it to absorb a significant share of the delivery cost. When funders impose that expectation on nonprofits, organizations are forced to cross-subsidize essential services, chase replacement dollars, and postpone investment in their own capacity.
A modern funding relationship should include full-cost funding, appropriate core operating support, more predictable agreements, and enough flexibility for organizations to improve how they deliver results.
3. Bring investment proposals, not only funding requests
The federal government is exploring new ways to use its balance sheet, de-risk projects, and mobilize private capital. Tyler Meredith, a former senior economic policy adviser who helped shape Canada’s COVID-19 economic response and a founding partner at Meredith, Boessenkool & Phillips Policy Advisors, sees an opening for the sector to ask how those same tools could support community infrastructure.
Could philanthropic capital be deployed more effectively for social impact? Could government guarantees or other de-risking tools unlock investment in community housing and other public-benefit projects? Could the definition of capital better account for the human services required to make physical infrastructure successful?
Build Canada Homes offers one practical arena for this thinking. If government is prepared to reconsider who owns, finances, and carries affordable housing assets, nonprofit housing providers should help design models that combine public balance-sheet capacity with community expertise and long-term operating strength.
This is the moment for the sector to put well-developed options on the table, including the tradeoffs, the implementation requirements, and the public return.
4. Coordinate around a small number of consequential priorities
The sector is enormously diverse. Complete consensus is neither realistic nor necessary. But a consultation that produces dozens of disconnected requests will be easier to acknowledge than to act on.
Nicole D’Aoust, a partner in McCarthy Tétrault’s Charities and Non-Profits practice who was appointed to the federal government’s Technical Issues Working Group representing Imagine Canada, made the practical case for a sector-led process. Smaller and grassroots organizations hold indispensable operational knowledge even when they lack dedicated policy teams. Umbrella organizations, foundations, networks, and advisers can help turn that knowledge into focused submissions and shared proposals.
The aim should be collective leadership: identify the issues affecting the broadest range of organizations, elevate frontline expertise, and concentrate political effort where change would have the greatest impact. This is not the moment for a kitchen-sink submission. It is the moment to decide what matters most and fight for it together.
Modernization must change more than the filing system
Digital tools can reduce friction, but modernization cannot amount to putting decades-old bureaucracy online. The consultation should examine the rules, funding practices, and accountability systems that shape the sector’s ability to work.
That includes a report-once, use-often approach to organizational information; proportionate reporting focused on outcomes rather than administrative minutiae; fewer duplicated requirements across funders; a framework that supports appropriate funding of non-qualified organizations; and a more accessible way for Canadian charity law to evolve with society.
Accountability is not the obstacle. Charities understand their obligations to donors, governments, and the public. The problem is accountability that consumes capacity without improving transparency, learning, or results.
Government also has work to do. Partnership cannot mean asking the sector to solve public problems with unstable funding, constrained tools, and exhausted people. It cannot mean praising resilience while relying on sacrifice. If charities and nonprofits are economic partners, they should be funded and engaged as partners: at full cost, early in policy design, and with a serious role in evaluating what works.
An invitation – and a test
The Spring Economic Update devotes only a small amount of space to Canada’s charitable and nonprofit sector. But it opens a potentially important conversation about modernization, investment, and the country’s social capital.
Whether that conversation produces meaningful change will depend partly on how the sector responds. This is not simply a moment to ask for more support. It is a moment to show, with evidence, collaboration, and ambitious but workable ideas, that investing in communities is an investment in Canada’s economic future – and that continued underinvestment carries a cost the country can no longer afford to ignore.
It is also a test for government: whether it is prepared to move from warm recognition to real partnership, and to build policy, funding, and accountability systems that allow the sector’s contribution to grow.
Canada needs a modern social contract that treats charities and nonprofits not as a cost to be managed or a stopgap for public systems, but as essential partners in building a more productive, resilient, and prosperous country.
The invitation is on the table. The stakes are real. The sector should arrive with a strategy.
Adapted from a CharityVillage Connects conversation featuring Nicole D’Aoust, Tyler Meredith, Armine Yalnizyan, and Dr. Susan Phillips.
Mary Barroll, President of CharityVillage, is an online business executive and lawyer with a background in media, technology and IP law. A former CBC journalist and TV producer, in 2013 she was appointed General Counsel & VP Media Affairs at CharityVillage.com, Canada’s largest job portal for charities and not for profits in Canada, and President in 2021. Mary is also President of sister company, TalentEgg.ca, Canada’s No.1, award-winning job board and online career resource that connects top employers with top students and grads with highly targeted, engaging employer branding and recruitment services. At CharityVillage she has an opportunity to merge her background in media production and marketing with her business and legal experience in online businesses to grow CharityVillage nationwide and help more employers connect with nonprofit professionals from coast to coast to coast. Mary is a certified Employer Branding Professional recognized by Universum Global and the International Employer Branding Academy.
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