This executive summary lays out highlights from the report "Promoting Newcomer Labour Integration through Decent Work in the Non-Profit Sector," written by Max Bell School Master of Public Policy students Chloé Aboud, Teodora Durca, Sarahí Nava, Joyce Selby, and Jamil Tanimu as part of the 2024 Policy Lab.
Access the summary and presentation below, and read their full report here.
In recent years, the number of newcomers to Canada has increased significantly. Between 2016 and 2021, Canada admitted approximately 1.3 million people as permanent residents, with more than half entering through the economic category. Immigration policy has prioritized these newcomers because they can make valuable and necessary contributions to the Canadian economy. Despite their economic importance, the labour market remains relatively inaccessible because of several direct and systemic barriers, including foreign credentials and experience recognition, discriminatory hiring practices, and gaps in public services. These barriers prevent newcomers from finding decent work, which is key to facilitating newcomer integration. In search of decent work opportunities, newcomers are pushed out of the broader labour market and pulled into sectors like the non-profit sector that more readily recognize and value their credentials and experience. These push and pull factors work in tandem to attract newcomers to the sector, especially to community-based organizations, where they represent nearly 25 per cent of the workforce.
The core problem of this policy challenge is that non-profits do not have the capacity to provide the decent work newcomers need to integrate into Canada. Inadequate and restrictive funding reduces the capacity of non-profits to provide well-paying jobs, good working conditions, and job security to their newcomer employees. Through adequate, fair, and sustainable funding models, non-profits will be better positioned to provide decent work to newcomers so that the sector can best support their integration into Canada.
Barriers to Integration to the Wider Labour Market
Newcomers face barriers to integrating into the broader labour market. Their credentials and foreign education and experience are not recognized, despite being chosen for their high level of expertise and potential to meet labour market needs. As a result, newcomers are underemployed, meaning their skills and experience are not being utilized. Consequently, the economy is losing out on an estimated $13.4 billion to $17.1 billion per year.8 Regardless of their high levels of education and entering Canada through economic immigration channels, newcomers face intersectional discriminatory barriers in looking for work. Lastly, without adequate social support, or public services on which they rely, newcomers are at disadvantage in their job search.
Why do Newcomers Find Work in the Non-Profit Sector?
While newcomers are being pushed out of decent work opportunities in the labour market, they are also pulled into finding work in the non-profit sector, particularly in community- based organizations (CBOs), for three main reasons. First, social networks influence migration decisions because it is through those networks that newcomers learn about opportunities and working conditions in potential destinations.9 Second, the non-profit sector attracts newcomers because they have more flexible hiring practices, appreciate and need a wide range of skills, and require diverse cultures to support the populations they serve.10 Third, non-profit organizations frequently face perceptions rooted in outdated charity models that undermine their work.
Current State of the Non-Profit Sector in Canada
Canada’s non-profit sector encompasses an array of organizations that contribute to social welfare, community development, and advocacy. This sector is essential to the Canadian economy as it closes service gaps by facilitating access to housing, healthcare, education, and other goods and services.12 Overall, non-profit groups in 2022 contributed $216.5 billion to economic activity, equivalent to 8.3 per cent of the gross domestic product (GDP).13 The contribution of community-based organizations represents 2.2 per cent of the national GDP.14 CBOs employed nearly 624,000 people in 2021, of whom 25 per cent are immigrants and almost 30 per cent are visible minorities.
The Non-Profit Funding Model and its Challenges
Non-profit funding sources include government agencies at the federal, provincial, and municipal levels, as well as donations, foundation funding, fees for goods and services, corporate sponsorships, and fundraising organizations.16 In the case of CBOs, government transfers account for 39.3 per cent of their funding.17 The current funding ecosystem creates two key challenges for the non-profit sector. First, funding is insufficient for non-profits to build their capacity to provide decent work and deliver services. Second, restrictive and project-based funding reduces the quality of programs and organizational efficiency.
Instead of focusing on delivering quality services or providing decent work to their employees, non-profits are instead limited by inadequate and restrictive funding.
While individual contributions allow non-profits to have more autonomy over their spending decisions, government funding is often not all-encompassing and tends to impose burdensome restrictions such as onerous reporting and evaluation requirements. When non-profits do not have the autonomy to determine how to utilize their funding, they face pressure to decrease spending on core functions, even though this reduces the sustainability and longevity of the organizations themselves.
The issue of work precarity is pressing for the non-profit sector, its employees, and the communities they serve. Non-profit workers, including newcomers, often grapple with short- term contracts, low wages, lack of benefits, and limited job security. These working conditions can lead to high turnover rates, job dissatisfaction, burnout, and challenges in retaining skilled staff members. Moreover, the lack of stability and professional development opportunities can hinder career advancement for sector employees.
Policy Recommendations
1. Newcomer Non-Profit Pathways (NNP) Program:
- Description: This job-matching program developed by ESDC would connect 6,000 newcomers to decent work in eligible community-based organizations, with a 100 per cent wage subsidy provided by ESDC.
- Benefits: The NNP program can give newcomers direct access to the labour market, offering them a pathway to work in roles that match their skills, experiences, and credentials while gaining Canadian work experience. It also allows newcomers to expand their social and professional networks, facilitating longer-term integration. Access to decent work facilitates their self-sufficiency, which impacts their broader integration into Canada and supports their mental and physical well-being. The wage subsidy also addresses funding challenges that limit non-profit capacity.
- Limitations: The program’s long-term prospects depend on the consistency of government funding. If it ceases, organizations may be deterred from maintaining the subsidized roles. The program also does not include temporary residents though they face similar challenges as the newcomer group defined in this report.
- Cost: The estimated cost for the five-year phase is approximately $688 million.
2. Develop a Charter for Fair and Sustainable Funding Practices:
- Description: This Charter would implement through legislation key principles and guidelines for government funders to support the long-term sustainability and independence of non-profits. The Charter would be drafted and overseen by an independent Federal Non-Profit Advocate, who will also oversee an inclusive Roundtable Consultation process. Proposed principles for the Charter include fair funding agreements, length of contracts, flexibility and trust, capacity building and support, collaborative relationships, supporting vulnerable groups, reducing competition for funds, and outcome-based accountability and two-way street learning. The principles would be phased in over five years.
- Benefits: The Charter tackles funding and operational issues at their core. The creation of the Federal Non-Profit Advocate would also hold government funders accountable and offer the sector representation. The participatory Roundtable consultation process would also help level the playing field between the sector, government funders, and vulnerable groups.
- Limitations: Any legislation process is lengthy and costly, often hindered by the complexity of the legislative system, financial implications, stakeholder interests, public opinion, policy coherence challenges, provincial considerations, and time constraints. The lack of data on the non-profit sector also makes it challenging to address funding inequities between non-profit organizations.
- Cost: The estimated cost for consultation is between $325,000 and $500,000. The salary costs of the Advocate office are estimated at $500,000.
Download the full version of this report here.
Authors: Sarahí Nava Marquina, Jamil Tanimu, Chloe Aboud, Teodora Durca, and Joyce Selby
