‘An irresponsible proposal’: Religious groups react to charitable status threat

Religious organizations are responding to a finance committee recommendation to remove religion as a charitable purpose under Canada’s tax laws. 

The Dec 13 recommendation by the Standing Committee on Finance is one of 462 recommendations in a committee report to the government about what to include in the next federal budget. 

The recommendations, which range widely from investing in tourism to closing tax loopholes, are based on submissions from hundreds of groups to the committee during pre-budget consultations last fall. 

The BC Humanist Association submitted the proposal for religion to be removed as a charitable purpose. The association is a charitable organization that promotes secularism and human rights.

This is not the first time the association has made this proposal. But it is the first time it has made the finance committee’s official list of recommendations, says Ian Bushfield, executive director of the humanist association. 

“I was surprised to see the recommendation in the list,” Bushfield said. “Not a lot of politicians would be willing to touch it.”

Julia Beazley, who directs public policy for the Evangelical Fellowship of Canada, says their organization is “very concerned about the recommendation.” 

“The thousands of churches and faith-based organizations across Canada that are religious charities benefit their participants, their communities and Canadian society as a whole,” she said. The fellowship is a national association of evangelical Christians. 

Religious charities play a significant role in Canadian life, Beazley said. About 40 per cent of Canadian charities fall under the advancement of religion section of the Income Tax Act. 

Charitable status enables organizations to issue tax receipts for donations, and can also provide other tax advantages.  

The advancement of religion is one of just four purposes that enable charities to issue charitable tax receipts in Canada. The others are relief of poverty, advancement of education, and other purposes beneficial to the community. The four purposes are based on an 1891 decision in Great Britain called The Pemsel Case.

While it is unlikely the recommendation will be adopted due to political uncertainty in Ottawa and a looming election, “it is significant that a parliamentary committee has made this recommendation,” Beazley said. Representatives from all the major political parties were on the committee, she noted. 

The Conservative Party wrote a dissenting opinion to the committee’s report. But it does not mention or oppose the recommendation.

“Committee recommendations can function as a trial balloon,” Beazley said. The Evangelical Fellowship of Canada has written a letter to the Finance Minister and is encouraging Christians to write to their members of Parliament to oppose the recommendation.

Ray Pennings, executive vice-president of the Christian think tank Cardus, agrees that the proposed change “would be destructive for Canada’s charitable sector.” 

Pennings cited research showing how religion benefits society. People who attend religious services regularly are more likely to donate to charity than those who do not, and they give more. Places of worship also serve their communities by offering low-cost or free space for group meetings, concerts and food banks.

“[E]nding religious advancement as a charitable purpose would be a short-sighted, destructive policy that would leave all Canadians worse off,” Pennings said.

The recommendation itself “came out of left field and was proposed without any public consultation, much less consultation among the many charities it would affect,” he said.

Bruce MacDonald, CEO of Imagine Canada, which represents the wider Canadian charitable sector, also pointed to a lack of consultation. Their organization was not consulted about the recommendation or its impact on the charitable sector, he said.  

“With the current session of Parliament unlikely to resume in a meaningful way, it is improbable that this recommendation will be acted on, but we will continue to keep an eye on it in the future,” MacDonald said.

John Pellowe, CEO of the Canadian Centre for Christian Charities (CCCC), also thinks there is “virtually no chance” the recommendation will be accepted. But he believes religious groups need to take it seriously.

“It’s an irresponsible proposal,” Pellowe said.

The council, which is an umbrella group for Christian charities in Canada, has published a report on the proposal. 

“If there is no pushback, it could go ahead,” Pellowe said.

For his part, Bushfield, of the BC Humanist Association, is also not optimistic the recommendation will make the budget. But he is glad it has started a conversation about the topic.

“Why should we privilege religion for charitable purposes at a time when Canada is becoming less religious?” he said. Other groups, like a book club that serves a select group of members, cannot get charitable status, he said.

“That’s a question that deserves larger consultation,” he said. “We would welcome that.”

The humanist association also suggested removing charitable status for anti-abortion organizations. That proposal also made the list of recommendations in the report.

Leslie Rosenblood of the Centre for Inquiry Canada, a national humanist organization, was “delighted” to see the recommendation to remove religion as a charitable purpose in the finance committee’s report.

Among his reasons for supporting the recommendation are the cost savings to Canada. According to the centre’s calculations, tax credits for donations to religious charities cost Canadian governments more than $3 billion in revenue a year.

He also supports it on philosophical grounds, as Canada is a secular nation, where the government is supposed to be neutral in matters of religion. “Giving a multi-billion dollar subsidy to organizations that self-declare their primary purpose to be evangelizing is the government playing favourites,” he said.

Rosenblood is not opposed to religious organizations sharing their beliefs with others. “Trying to convince others to view the world as you do is certainly permissible, but it’s hardly a charitable act,” he said. “Such organizations should be non-profits, not charities.”

If the recommendation on religious organizations’ charitable status were to be approved, Rosenblood suggests announcing a deadline — such as the end of 2025 — after which organizations would no longer be eligible to apply to become charities with the primary purpose of advancing religion.

Existing religious charities could be given until 2028 to convert into non-profits or to find alternate primary purposes, such as advancing education or alleviating poverty. 

“It’s a long road from a finance standing committee recommendation to implemented policy,” Rosenblood said. “But I am hopeful that this step will be the first of the many required.”

Editor’s Note: An earlier version of this article incorrectly attributed the statement, ‘It’s an irresponsible proposal’ to Bruce MacDonald. The piece has been updated to reflect that John Pellowe made that statement. We regret the error.

An earlier version of this article said that John Pellowe is the CEO of the Canadian Council of Christian Charities. The organization’s new name is the Canadian Centre for Christian Charities. We regret the error.

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