Thank you, Mr. Chair and committee members, for the opportunity to testify during this unprecedented and trying time of crisis.
As in most sectors, charities, non-profits and social enterprises have been seriously affected by the COVID-19 crisis. Organizations that have not been forced to temporarily suspend operations because of physical distancing measures are facing significant challenges. Revenues are declining while, in most cases, the demand for services has increased even for organizations not considered to be on the front line.
They have also had to drastically change how they deliver their services. We surveyed charitable organizations about their experiences during the pandemic. We are still analyzing the results, but preliminary data show that COVID-19 has had and will continue to have a significant impact on this sector.
Seven out of 10 charities report a drop in revenues, with the average organization's revenues dropping by 30%. This compares to the 2008-09 recession when less than a third reported revenue losses and a percentage loss was in the single digits. Nearly a third and more than a half anticipate they need to lay off more staff, or begin layoffs where they haven't already. Almost half of charities report difficulty in engaging volunteers because of reduced availability, significant programming changes or the lack of personal protective equipment.
More than half of organizations anticipate their financial situation will further deteriorate over the next few months. At the same time, between 35% and 40% of organizations and almost half of larger organizations have seen increased demand for their services. To meet this demand they have rapidly innovated and adapted. In-person sessions, where possible, have been moved online and a surprising number of organizations, almost half, have actually developed new programs to meet demand, despite the serious challenges they face.
To date, the federal government has invested a great deal in helping individuals, businesses and organizations weather the storm. Many charities and non-profits may qualify for the Canada emergency wage subsidy and some have been able to access the Canada emergency business account. Neither of these, of course, is available to the almost 50% of organizations that don't have paid staff.
It's too early to say how many might benefit from temporary rent reductions or the support the government has announced for arts, culture and amateur sport. Rather troubling, though, we've already heard from organizations whose landlords refused to participate in the rent assistance program.
Funds have also been announced to help organizations serving some of the most vulnerable Canadians. We appreciate the specific investments that have been made in organizations providing front-line services to the most vulnerable people and communities. But these measures aren't sufficient if we want to maintain the vital social infrastructure across this country. At the outset of the crisis we engaged voluntary private sector expertise to work with us to estimate the impact of three to six months of physical distancing measures. We projected a financial impact of between $9.5 billion to almost $16 billion for registered charities alone and layoffs of between 117,000 and 194,000 people.
As the crisis unfolds those early projections are proving to be, if anything, optimistic. The measures for which charities and non-profits are eligible are unlikely to fill even half of that financial gap. What we need from the federal government are measures that address the unique characteristics of charities and non-profits; things like counter-cyclical demand for services, revenue streams that greatly fluctuate throughout the year or the role that volunteers play. We also need a commitment to the social infrastructure in our communities, to the organizations that provide services that would otherwise fall to government.
I want to focus on a proposal for an emergency grant program that we submitted to the government. This would see the government commit sufficient funds to preserve the sector. Eligibility would be based on organizational need rather than government picking winners and losers. Delivery mechanisms would prioritize speed in getting funds to organizations. We estimate that around $6 billion in emergency funding is still urgently needed. This may sound like a great deal and in normal circumstances we'd be loath to suggest such a number. The cost of doing nothing is even greater. Canadians have spent generations building a sector that delivers services more efficiently and effectively than government, that provides good jobs in every community and contributes enormously to our quality of life.
Take a moment to imagine your communities without charities and non-profits; without the support for people with disabilities or chronic health conditions; without amateur sports, youth groups or other organizations for children; without food banks or services for poverty; without places of worship; without settlement services for newcomers; without museums, theatres or cultural festivals. I could go on.
What would it cost us to replace what we may lose? Because that's what's at stake here. If we lose significant parts of the social and community infrastructure we've built up over generations, it will take years and far greater investment to rebuild it than what it will take to preserve it today. The government has yet to decide on our proposal, but as members of the finance committee, as members of Parliament and as the voices in your communities, you can have an enormous impact on that decision. I urge you to use that influence.
Thank you very much.