I just found this from Ron's Bio:
Stepping off that path, the almost hymn-like "God Loves Everyone" was written as Ron's response to the shocking 1998 murder of Matthew Shepard, a gay University of Wyoming student. "The crime itself was horrible enough," says Sexsmith, "but I remember reading about the trial, where there were these folks standing outside with signs saying, 'God hates fags' or "Burn in hell fags.' I couldn't believe that people could actually have those kinds of thoughts. That's where the song started for me. From there, I got in to just trying to write a song about unconditional love, I guess."