Oct 2021 Charity & NFP Law Update
Published on October 28, 2021
By Jacqueline M. Demczur
Statistics released by Statistics Canada demonstrate growth in the non-profit sector, both in real gross domestic revenue (“GDP”) and employment, reversing earlier declines. On October 4, 2021, Statistics Canada published “Non-Profit Institutions and Volunteering: Economic Contribution, Second Quarter 2021”, which presents a more positive picture of the sector compared to the same time last year when widespread shutdowns affected many charities and not-for-profits.
For the purposes of Statistics Canada’s report, the definition of the “non-profit sector” adheres to international standards published in the United Nations Handbook of Satellite Accounts on Non-profit and Related Institutions and Volunteer Work, with Canada's sector divided into three broad categories. These are community non-profit institutions, business non-profit institutions, and government non-profit institutions.
Employment in the sector increased 1.2% overall, led by especially strong employment growth in social services. The number of jobs in social services rose 2.3% in the second quarter of 2021, representing a fourth consecutive quarterly increase and following the significant decline from lockdowns and stay-at-home orders in the second quarter of 2020. There was also some growth in health care as employment rose 0.7%, led by a shift in resources to more non-essential health care services. Business and professional associations also saw an increase in jobs by 2.8%, demonstrating a relatively steady increase over the past four quarters.
Real GDP rose 0.7% in the second quarter of 2021, in large part because of the growth in real GDP of non-profits serving businesses which experienced a 2.4% growth. Non-profits serving businesses continue to slowly recover after pandemic-related shutdowns, though they still remain 8.2% lower than the peak level reached in the fourth quarter of 2019. Non-profits serving households and governments reported more modest gains of 0.8% and 0.5% respectively. Non-profits serving households are only 1% lower than the pre-pandemic real GDP level reached in the fourth quarter of 2019, while non-profits serving governments have experienced increases for the past 18 consecutive quarters.
Overall, the non-profit sector contributed 8.3% of Canada’s economy-wide nominal GDP in the second quarter, just slightly below its 8.4% contribution earlier this year. Charites and not-for-profits should take note of the growth in the sector and the trends which indicate more sector stability following the challenges of 2020.
Read the October 2021 Charity & NFP Law Update
