Executive Summary 

Nonprofit organizations across Prince Edward Island are currently absorbing service demand, workforce pressures, and service delivery responsibilities that would otherwise fall directly to government systems. Without targeted intervention in the 2026–27 operating budget, government faces an elevated risk of service disruption, workforce loss, and increased downstream costs in health, housing, and income assistance systems. 

The Community Sector Network of PEI (CSNPEI) represents more than 1,700 nonprofit and voluntary organizations delivering provincially relied-upon services in housing stability, food security, health-adjacent supports, youth wellbeing, community safety, environmental stewardship, and prevention services. 

CSNPEI recognizes the fiscal pressures facing the Province and has deliberately focused this submission on stabilizing existing service delivery infrastructure rather than proposing new programs or expanding scope. These recommendations build on existing funding relationships and delivery models and do not require the creation of new programs or administrative structures. All actions are designed to be implemented within existing program frameworks and funding envelopes, with minimal new administrative cost. 

While the challenges identified in CSNPEI’s 2025–26 submission remain relevant, the operating environment has reached a critical inflection point. Cost-of-living pressures and workforce attrition are now affecting service continuity, not just capacity. In this context, stabilizing the nonprofit sector is not a long-term capacity-building exercise. It is a near-term risk-management decision for government. 

Input from CSNPEI members, reinforced by outreach to community organizations outside our membership, confirms these pressures are systemic across the nonprofit sector, including among organizations not currently receiving provincial funding. Delaying action increases the likelihood that government will face higher costs and fewer policy options in future budgets. 

Summary of Recommendations for the 2026–27 Operating Budget 

• Convert existing annual nonprofit operational grants into three-year core funding agreements, beginning in 2026–27. 

• Apply annual CPI-based adjustments to core nonprofit funding to prevent erosion of service capacity. 

• Increase and modernize provincial wage subsidy programs to reflect minimum wage and cost-of-living realities and support staff retention. 

• Ensure funding agreements and initial payments are finalized and released early in the fiscal year, with consistent timelines across departments. 

• Designate an existing minister, department, or unit as a central coordinating and policy lead for the nonprofit sector, focused on sector engagement, policy analysis, and cross departmental coordination. 

• Increase investment in nonprofit-delivered prevention and diversion programs that reduce pressure on emergency shelters, hospital emergency departments, long-term care, and income assistance systems. 

• Commit to implementing a province-wide Basic Income Guarantee for a 5 to 7 year period, with phased rollout and built-in evaluation. 

Detailed Recommendations 

Core Operational Funding Stability 

Many nonprofits lack sufficient and predictable operational funding to maintain basic staffing, plan for leadership succession, or respond responsibly to sustained demand. Annual funding arrangements create instability, increase administrative burden, and limit organizations’ ability to manage risk and deliver services efficiently. 

The province can convert existing annual operational grants into three year core funding agreements beginning in 2026–2027 for nonprofits currently receiving provincial operational funding. These agreements can be aligned with mandate letters and existing accountability requirements, improving service continuity without creating new funding programs. 

In addition, the province can apply annual CPI based adjustments to core nonprofit funding to maintain purchasing power. The province already applies CPI adjustments to public fees and taxes, and extending this principle to nonprofit funding prevents the erosion of service capacity over time. 

Without these measures, nonprofits will continue to experience financial instability that undermines service continuity and increases the likelihood of program reduction or organizational failure, shifting cost and risk back to government systems. 

Workforce Recruitment, Retention, and Wage Competitivenes  

Nonprofits are increasingly unable to recruit and retain staff due to widening wage gaps between community based roles and comparable publicly funded positions. Cost of living pressures and insufficient wage supports have made it difficult for organizations to maintain experienced staff and meet growing service demand. 

Existing wage subsidy programs no longer reflect minimum wage increases or current labour market realities, limiting their effectiveness as workforce stabilization tools. Updating subsidy caps and allowing greater flexibility to support retention would stabilize staffing, reduce service disruptions, and prevent the growth of waitlists that increase reliance on higher cost public systems. 

Without targeted workforce measures, staffing instability will continue to erode service reliability and increase pressure on health, housing, and income assistance systems. 

Funding Predictability and Accountability 

Late funding decisions and delayed payments force nonprofits to carry financial risk they cannot absorb and undermine responsible financial planning. Inconsistent funding notification and payment timelines across departments further exacerbate these challenges and reduce the effectiveness of public investments. 

The province can ensure funding agreements and initial payments are finalized and released early in the fiscal year by establishing standard timelines applied consistently across departments. This change would improve fiscal discipline, strengthen accountability, and reduce unnecessary administrative burden with minimal cost. 

Without predictable funding timelines, nonprofits will continue to absorb government cash-flow risk, increasing instability and the likelihood of service disruption. 

A home in government for the nonprofit sector 

Currently, there is no minister, department, or advisory body explicitly responsible for the wellbeing and sustainability of the nonprofit sector in Prince Edward Island. This absence of clear policy leadership contributes to fragmented approaches, inconsistent consideration of nonprofit impacts, and missed opportunities for coordination across government. 

Designating an existing minister, department, or unit as a central coordinating and policy lead for the nonprofit sector would strengthen communication, support cross-departmental alignment, identify policy gaps or unintended impacts, and ensure nonprofit considerations are integrated into policy development.  

Without a clear policy coordination role, inconsistencies and inefficiencies will persist regardless of funding levels. 

Prevention and Community-Based Supports  

Affordability pressures and demographic change are driving sustained demand for nonprofit-delivered prevention and stabilization services, including housing supports, food security, youth wellness, autism services, hospice care, and grief supports. These services directly reduce demand on emergency shelters, hospital emergency departments, long-term care facilities, and income assistance programs. 

Investing in prevention represents one of the few levers available to government to moderate growth in high-cost emergency and institutional systems. Failure to strengthen these supports will continue to escalate costs and reduce government’s ability to manage service demand effectively. 

Implementing a Basic Income Guarantee 

Income insecurity was consistently identified as a root driver of increased demand for emergency food, housing, crisis intervention, and health-adjacent services. Addressing income stability is therefore essential to reducing long-term pressure on nonprofit and public systems. 

The province can commit to implementing a province-wide Basic Income Guarantee for a defined 5 to 7 year period, beginning with a phased rollout prioritizing individuals and households most affected by income insecurity. Funding in the 2026–27 operating budget should support program launch and delivery, including benefit levels sufficient to meet basic needs, clear eligibility criteria, and built-in evaluation and reporting requirements. 

Conclusion 

Nonprofits are not peripheral stakeholders. They are essential delivery infrastructure supporting provincial outcomes across housing, health, community safety, and social wellbeing. 

In a period of sustained fiscal and service pressure, stabilizing this infrastructure through targeted, implementable actions is a prudent approach to protecting Islanders, containing future costs, and managing system-wide risk. These recommendations provide government with a clear, low-risk path to action in the 2026–27 operating budget. 

CSNPEI is prepared to partner with government to support implementation, monitor outcomes, and adjust approaches as needed to ensure public investments deliver measurable value.