We were absolutely delighted to interview Armine Yalnizyan recently for our podcast episode, The Spring Economic Update: Where Does the Nonprofit Sector Fit in Canada’s Future? In fact, we so enjoyed her interview that we’re going to present the bulk of it to our readers in this 2-part article series.  

Armine is the Atkinson Fellow on the Future of Workers and a leading voice on Canada’s economic scene. Before the pandemic, she was senior economic policy advisor to the federal Deputy Minister of Employment and Social Development Canada, whose budget is seven percent of GDP. During the pandemic, she coined the term she-cession and raised awareness of the scale and role of the care economy, serving on a high-level federal task group. Her most recent work focuses on private equity’s growing presence in the care economy, and how to safeguard the quality of the services and jobs Canadians rely on. 

Mary Barroll: When you read the spring economic update, what stood out to you most, especially from the perspective of Canada’s nonprofit and care sectors? 

Armine Yalnizyan: I think the number one standout was how absent they were. I know that the nonprofit sector felt that they got a shout-out, and yay for them. But it’s like, the shout-out was in the context of modernizing tax policy. When you look at the actual numbers being spent on childcare, it drops in 2027 and then rises a little bit and then drops again by 2030. So the opposite of what is needed for childcare. The health transfers are sticking to a formula that was established a few years ago; they also don’t look like they’re growing. Now, all of this can change, right? They can negotiate something that increases money. But as of spring 2026, as affordability started to go through the roof again, and the crisis in care has not been met with respect to people having a doctor, people being able to get a rapid diagnosis for something or getting access to rapid treatment, we are in a crisis of care. And there’s not a whisper of concern about it. Other than, let’s modernize the tax system for charitable organizations. 

 Mary Barroll: The update talks a lot about productivity, investment, resilience, and building a stronger Canadian economy. From your perspective, does it define economic strength broadly enough? We’re seeing, as you just mentioned, not a whole lot of commentary other than a phrase regarding the contributions of the nonprofit sector. 

Armine Yalnizyan: Yeah, there is that phrase. And again, it’s in the context of tax reform, not in the context of spending more on care or supporting the nonprofit sector in specific ways. It, in fact, conflates the fact that the nonprofits exist at all with well-paying jobs. That’s not the case. Nonprofits tend to be the para-public sector. They tend to be the cleanup lady behind the failures of the public sector. When the public sector is trying to do stuff on the cheap, they turn to the nonprofit sector.  

And so this group of workers that do provide human services through nonprofit organizations are often asked to do far more than you would be asked to do if you were working in the public service and get paid less, or tend to be less unionized, tend to have more chaotic work schedules, and do it because they love the work that they’re doing. So it is a labour of love, but it is an exploitation of people that love to serve others and help others. So that’s a problem.  

The Bank of Canada regularly produces something called the output gap. And that’s what it is that the nonprofit sector needs to be doing. It needs to be showing the demand that is coming to their door that either is not being dealt with quickly, so there’s waitlists, or there’s reductions in services to be able to meet the throughput demand, or people are just getting turned away completely. 

So that lack of ability to meet the demand that currently exists, which is not getting smaller; it is getting bigger over time. We thought it had peaked during the pandemic; it’s nowhere near having peaked. And it will continue to grow because of demographic pressures. For nonprofit services, not for market-based services. You know, the people that have the money in their pocket, they’re going to find whatever care they need. But most of us don’t have the space to just shell out money to be able to skip the lines in publicly provided care. So I think one of the really big stories in this moment that we are in is that the nonprofit sector itself does not demonstrate the output gap enough.  

In some instances, I remember looking at an Imagine Canada document, I think it was, that showed that about 25% of the organizations that had been polled in their national annual survey said they weren’t sure they were going to be around in the next year. That’s what happens when you have organizations that are largely functioning on volunteer labour, a skeleton staff, and they’re just, they’re burning out with the reporting requirements. And by the way, that was another feature of the spring economic update. It isn’t just changing the tax rules; it’s changing the reporting requirements.  

And that’s something that nonprofit organizations are constantly doing because they’re constantly filing for the new updated terms of reference for a new program that is time-limited. It’s targeted, it’s time-limited, it’s temporary, and you have to file all this paperwork to get access to a little bit of cash on a short-term basis. There’s no core funding out there.  

And as you well know, the donations have not dropped in dollar volume, but the size of the donations have gone up from well-heeled donors as the number of donors have gone down and that bodes very poorly for the sector as a whole, looking forward, not five years, not two years, but 10 years, 15 years, when those donors are going to die off and their kids are not giving.  

And so there’s a real long-term strategic miss here when we think about the systems that support human capital, not just physical capital. Everything about this government so far – God bless them, I understand why they’re doing it; I’m an economist. Everything about them is about investing in physical capital and assets and ignoring the investments that must be made in human capital if we are going to be able to deploy all that financial capital coming down the pike. 

Mary Barroll: The government says it will consult on modernizing the charitable sector framework. As we’ve discussed, that seems to be more about the tax system and the filing requirements, but what would meaningful modernization look like? 

Armine Yalnizyan: I mean, there’s something like 675,000 workers in the sector. If you were to harness the stories of these workers, they’re dealing with millions of people. If you have some kind of consistent way of telling the story of the output gap, of the rising demand, inadequate supply, what that means for the people that do go through the program, then you would be able to tell a very compelling story if you were to marshal your resources in that way.  

Now, I mean, I’m just describing another way of doing reporting that nobody wants to do, right? Everybody’s like fed up with reporting. I don’t want to do any more telling the story of; I just want to do the work that I want to do. But without that kind of a bird’s-eye view, because nobody else is collecting it, nobody’s going to come and rescue you. If you don’t try and figure out a way of rescuing yourself and you’ll have the numbers to be able to really influence the conversation about the framework, the actual framework for providing nonprofit services.  

I was just in Calgary about a month and a bit ago, and I was addressing two groups. First of all, the Nonprofit Chamber. I love the sass of that name, the Nonprofit Chamber, because it’s not commerce; it’s just, it’s a chamber of organizations that actually do the heavy lifting for Calgary. And the second group I met with is the funders of the organizations that are in the Nonprofit Chamber. And we had great, great discussions, but the thing that really stood out for me was the fact that at lunchtime, after I had spoken, the mayor of Calgary came in to deliver a speech. And that speech included an announcement saying that the Nonprofit Chamber and the city of Calgary had signed a memorandum of understanding. And that by the end of the year, there would be core stable funding for the nonprofit services that Calgarians rely on because, as the mayor said, those nonprofit services are as critical to the economic development of a two-million-person city as pipelines.  

So if you could only get more people able to understand that it’s this infrastructure, this social infrastructure, that lifts up and helps the human capital that is absolutely critical for economic development, then we’ve got more people that can speak the language of investment in a way that is meaningful to human beings, not just investors. 

Mary Barroll: Some of the people that I’ve spoken to say that the desire or the stated intention of the government to consult with the sector for modernizing the framework is in itself a kind of invitation,  like an invitation for advocacy and for educating the government. Would you read it the same way? 

Armine Yalnizyan: I read any invitation as an invitation to let people that have invited you to do anything, to tell them what you think is important. And I’m trying to tell you what I think it’s important for them to hear and feel. If you can put examples in front of them, so they need data, they need stories, and they need a reason to change what they’re doing, because what they’re doing is unsustainable. Not only for the sector, the nonprofit sector – God knows that’s the case – but for the economy as a whole.  

You raised a question early on about productivity. It’s like, okay, we’re hearing about all these career, skill shortages and not enough workers in the skilled trades. Right on. This is not an either-or. It’s a yes: skilled trades, and the fact that we’ve got so much turnover in the [nonprofit] sector, and we are poised to lose a generation of workers because they’re getting older. And there’s not a lot of people coming up behind them that say, sign me up for below-living wages, erratic schedules, and more demand than I can meet. Sign me up for more heartache. How many people are going to do that? So, there’s a bunch of us that are stupid, and we’ve been doing this for most of our lives. And I would not have it any other way because the future is nonprofit-driven, and I’m ready to preach that. 

And let me tell you why it’s nonprofit-driven. Canada … [is] moving into an era where a growing share of the population is going to be a senior. Canada is not alone in this, by the way – every country that had a baby boom after the Second World War, and there’s a lot of them, are moving into an era where a growing share of the population is going to be a senior. Seniors have lower incomes. They also have less spending needs, right? But what they need is not consumer goods and services; it’s public goods and services. Their incomes tend to be lower than they were, and they tend to be fixed. So, they’re afraid of inflation, and they’re afraid of higher taxes, and they need those services to be there for them.  

Well, guess what? As this cohort moves into their senior years – we’re not going to be peak seniors till 2029, 2030, roughly – then and around then, depending on what we do with immigration, we’re looking at between 21 and 25% of the population being over the age of 65. And that is typically retirement years. Yeah, there’s people that retire early. There’s also people that retire late. The average age of retirement is still 65. Okay, so these people need cheaper services and cheaper is equivalent to nonprofit. You add profits to the services, you’ll have to add taxes and administrative costs. So, you’re just multiplying cost after cost that has nothing to do with care. So, they want nonprofit services and more public services, which means, by and large, either no cost or very low cost at the point of usage of the service.  

Then, on the other hand, are the people that are going to be supporting those who are too old, too young, and too sick to work. The working-age cohort is about to be the smallest it has been in 60 years. And these are the people that pay taxes that support the system. It’s through their income taxes that, by and large, our system of supports that are publicly funded get paid for. But they have been receiving fewer and fewer supports from that public system. Housing is unaffordable, there’s not enough childcare, there’s not enough healthcare, the list goes on. And so, you know, there is this challenge to reduce; there’s this discussion about affordability without pointing out that the things that are going to make life most affordable – affordable housing, affordable healthcare, affordable childcare, affordable long-term care – all of these things need to be timely, high quality and low cost. And the only way to do that is through public funding.  

So that’s why I say the future is nonprofit-driven. That’s where the biggest demand is going to be coming from. It’s not from, I just want to have more money in my pocket so I can go and buy it. They can give you all the tax cuts in the world. It’s not going to offset your cost of childcare or healthcare. And it certainly isn’t going to make you healthier because a tax cut does not add a single unit of healthcare or a single new public bed. So we’ve got some real reckoning to do with how we see the interface between governments and us.  

Since Reagan and Thatcher, since the early 1980s, we were told that governments were the problem and markets are the solution. And the moment we are in has flipped that on its head. But we’re not; we haven’t caught up to that reality yet, right? What I’m telling you, everybody knows what I’m telling you, but we still connect that reality to a narrative that is that governments can only screw things up. Well, governments are us. And if we don’t do better by us, we’re just going to end up doing worse by a lot of people.

Want to hear more from Armine Yalnizyan? Listen to her full interview in the video below, and check out Part 2 of the article series.

Listen to Armine Yalnizyan and other sector experts discuss the Spring Economic Update and the future of Canada’s nonprofit sector relationship with the federal government in our latest podcast episode. Click here to listen. 

The views expressed in this article are the author’s alone and do not necessarily represent those of CharityVillage.com or any other individual or entity with whom the authors or website may be affiliated. CharityVillage.com is not liable for any content that may be considered offensive, inappropriate, defamatory, or inaccurate or in breach of third-party rights of privacy, copyright, or trademark.