A non-profit Winnipeg agency that supports hundreds of people living with intellectual and physical disabilities has started laying off employees citing the rising cost of living as an expense it just can't keep up with.

"We've agonized over this and ultimately were forced to do it in order that we're around for years to come and protect the services we provide and protect the individuals we support," Karen Fonseth, CEO of Direct Action in Support of Community Homes (DASCH), told CBC News.

"It has been agonizing, agonizing."

The organization, which strives to help clients of all ages reach their full potential, has 58 locations across Winnipeg with day programs that support clinical and literary services.

Karen Fonseth, CEO of Direct Action in Support of Community Homes, said the non-profit simply can't keep up with the rising cost of living. (Warren Kay/CBC)

Fonseth said 62 full-time staff members received layoff notices last week, while 37 were given notice their jobs were being restructured. The company currently employs more than 800 people.

Fonseth said there is a high turnover in the industry, which she hopes will be a saving grace for some who received layoff notices.

"So my hope is that … with turnover — and that's a horrible thing to even have to say — that positions will become available over the next six months to a year and we can bring everyone back.

"I can't guarantee that, though. There's no guarantees."

'The wages have to be fixed'

Fonseth said the agency, which operates homes for people who are blind and deaf, has created 21 new jobs that staff members can compete for, in addition to 35 current full-time vacant jobs.

However, because many of the jobs are front-line, wages would be significantly less than what employees were paid before layoffs, so they may choose to quit.

The non-profit relies primarily on funding from the province but also receives private donations. Above, Dana Jessiman, centre, holds up an oversized cheque for $1 million, given to DASCH from the Jessiman Foundation, with Karen Fonseth, left. (Tanner Grywinski/CBC)

"I talked to one staff that said, 'I can't apply for the front-line wage, which is $13.75 an hour.' It's a wage that's set and she said, 'I can't work for that. I can't pay my mortgage,' and that's a standard wage," Fonseth said.

"It's horrifying. I talked to another staff that has one of her managers … buying her food because $13.75 just doesn't cut it," she said. "The wages have to be fixed."

Seven staff members at the non-profit's head office will lose their jobs, resulting in an increased workload for the remaining employees.

Team manager positions are being eliminated, while the role of location supervisor is being changed to focus on clients instead of administrative duties.

16.4% spike in cost of living: agency

Fonseth said the non-profit, which relies primarily on funding from the province, could have predicted trouble five years ago as costs started to rise.

"When it came right down to it, in the last five years alone, the shortfall in just keeping things was over a million dollars for us. And that's a lot of money to have to fundraise," she said, noting those dollars don't go as far as they once did.

A press secretary for Families Minister Heather Stefanson (pictured) said DASCH receives more than $23 million in annual funding from the province. (Trevor Brine/CBC)

Fonseth said accountants at the non-profit calculated the compounded cost of living has gone up for it by 16.4 per cent over the last five years.

"Why is it always the individuals that are most challenged in our society that receive less and less and are more and more marginalized?" Fonseth said, adding the organization got a 0.75 per cent increase in funding from the province last year, but it wasn't enough.

She praised the province for inviting DASCH to a committee to try to find a better structure for the agency long-term and said simply getting more cash from the government wouldn't have been sustainable — restructuring was needed to see where duplication of service was occurring.

Families Minister Heather Stefanson said in a statement Tuesday afternoon she had spoken to Fonseth, who assured the changes won't have a negative impact on front-line services.

"We continue to work with our partners to make sure services are delivered to those who need them," the statement said.

Government says it wasn't notified about layoffs

Andrea Slobodian, a press secretary for Stefanson, said DASCH receives more than $23 million in annual funding from the province.

She said DASCH's funding has not decreased, so the government was unaware of the agency's intention to restructure. She added in 2019, the province increased a community living disability services budget by $13.6 million.

A spokesperson for the province's Growth, Enterprise and Trade Department said Monday DASCH had not notified labour officials about layoffs.

Fonseth said the non-profit notified the province in writing about the layoffs on April 15.

"The notice was provided to adults and youth services and the provincial government, our main funders, who were appreciative of the notice and will continue to work with us and other agencies through these transitions," she said.

A labour adjustment consultant will be in touch with the non-profit to determine whether there is interest in establishing a labour adjustment committee, the spokesperson said, adding that if there is interest, a service provider is usually contracted to assist employees transition.

There is no union representing the workers at DASCH.