Religious Groups Raise Concerns Over Finance Committee Recommendation to Eliminate Charitable Status

The Peace Tower on Parliament Hill is pictured from the West Gate in Ottawa on May 6, 2024. The Canadian Press/Sean Kilpatrick

Canadian religious charities warn that eliminating charitable status for religious organizations would harm society and the economy, ignoring their positive impact.

“The proposed change would be destructive for Canada’s charitable sector, harming as many as four out of every 10 Canadian charities,” Ray Pennings, executive vice-president for Christian think tank Cardus, said in a statement to The Epoch Times.

The recommendation, part of a December 2024 report by the Standing Committee on Finance, was one of 462 pre-budget proposals. Charitable status exempts places like churches, synagogues, and temples from paying some taxes, such as income and property taxes.

There are four different categories of charitable status that Ottawa grants, including organizations that work to relieve poverty, advance education, advance religions, or other purposes that benefit the community.

Humanist Association Proposal

The finance committee recommendation to eliminate the religion category was based on a proposal by the BC Humanist Association (BCHA), which says it is happy that Canada’s “antiquated” charity laws may be updated.

“Charities in Canada are regulated under antiquated laws dating back as far as the Magna Carta,” Ian Bushfield, executive director for the BCHA, told The Epoch Times in an email.

“We’re pleased to see the House of Commons Finance Committee supported our recommendation to modernize the law and reevaluate the assumptions about what purposes are beneficial to the broader community. We’re hopeful the next government looks seriously at these long overdue reforms.”

He said he didn’t expect the change to happen right away, but it was a step in the right direction.

“We know these kinds of fundamental changes are going to take time and warrant a fulsome consideration by any government,” Bushfield said.

“A committee recommendation is really just a first step toward modernization. We’re encouraging people to continue talking to their elected officials - and candidates - if these are the kinds of changes they want to see.”

The Centre for Inquiry Canada has said Ottawa is missing out on billions with the charitable status.

“Canadian taxpayers subsidize the advancement of religion by as much as $3.2 billion annually as a result of income tax relief available to Canadians who donate to religious charities,” states a 2021 report by the centre.

“The time has come for Canadian taxpayers, as citizens of all faiths and citizens of no faith, to stop granting tax exemptions to religious organizations which have incorporated as charities.”

The ‘Halo Effect’

That the proposal came from the BCHA is ironic, Pennings says.

“Ironically, the original proposal seems to have come from atheist activists whose organization itself depended on government funding for around 17 percent of its annual revenue in 2022 and 2023,” he said.

“Religious congregations provide a net $16.5 billion worth of social and economic benefits to Canadians,” a 2024 Cardus report said.

The dollar value of a religious congregation’s socio-economic contribution to society is what the organization calls the “Halo Effect.”

“Tax exemptions for charities, as they have developed in British law and later in Canadian law, are premised on the understanding that charities benefit society as a whole and they relieve the state of costs that it might otherwise bear,” the report said.

Cardus said that if religious congregations ceased being tax-exempt, their Halo Effect would likely decline. They would not be able to issue charitable tax receipts, which would lead to a drop in revenue. Needing to pay taxes would also cut in on the organizations’ income, meaning they would have less money to invest in programs.

Conservative Party Petition

The Conservative Party of Canada has started a petition to stop the proposal, calling on Canadians to sign it.

“We the undersigned call on the Canadian government to reject the absurd mean-spirited attack on religious organizations recommended by the NDP-Liberal dominated Finance Committee,” the petition says.

Conservative MP Garnett Genuis promoted the petition in a social media post just before the holidays.

“While the clown show has been going on around Justin Trudeau, Liberal and NDP politicians seem to have been quietly plotting a brutal attack on the charitable status of religious organizations,” he said in a Dec. 20 post on the X platform.

Pennings said that while the prorogation of Parliament means it is unlikely the proposals will be implemented, it is still concerning.

“The fact that the Commons finance committee made the recommendation sends an alarming cultural signal. The advancement of religion as a charitable purpose goes back centuries precisely because governments have long recognized it as a cultural good,” he said.

Other religious organizations have also expressed concerns about the possibility they will lose charitable status.

The Canadian Centre for Christian Charities (CCCC), which has more than 3,200 members, sent a letter to Finance Minister Dominic LeBlanc, committee chair Peter Fonseca, and National Revenue Minister Elisabeth Briere on Dec. 20, 2024, saying the proposal threatens about 40 percent of registered charities in Canada.

“The contributions and positive impacts of religion ought to be affirmed and fostered in a diverse, multicultural, multi-religious society such as Canada,” CCCC director of legal affairs Deina Warren wrote in the letter.

She also said that proposal 430 is at odds with proposal 215, which seeks to invest in a dedicated national anti-Islamaphobic strategy.

“The government cannot, on the one hand, suggest that it has the interest of religious communities at heart and, on the other hand, strip them of registered charitable status.”

Warren also raised the issue of the move violating the Charter right of freedom of religion, saying it would set a dangerous and destabilizing precedent for the charity sector.

The Evangelical Fellowship of Canada also wrote a letter to LeBlanc expressing concern over the proposal.

“Religious communities’ existence and ministry benefits Canadian society in ways far beyond the religious adherents themselves. The impetus to reach out in compassionate ways and to care for those who are vulnerable is evident in many religious traditions,” wrote Julia Beazley, director of public policy.