Churches in Canada concerned by proposed changes to their tax status

By Olivier Bonnel

The new Canadian Prime Minister, Mark Carney, officially took office on Friday, March 14, after his election last weekend as leader of the Liberal Party. The former banker, who previously led the central banks of Canada and the United Kingdom, succeeds Justin Trudeau, who announced his resignation in early January after nearly ten years in power.

The new head of the Canadian government’s first major challenge will be addressing the trade war launched by Donald Trump against Canada. The U.S. President's threats to turn Canada into the "51st American State" have triggered an unprecedented crisis between the two neighbouring countries.

The proposed changes

Behind these threats and provocations, another issue of a completely different nature has been overshadowed in recent weeks: the Liberal government’s plan to revoke the charitable status of Canadian religious organizations. The Standing Committee on Finance, issued a report in December with 462 recommendations. Among them, two clauses directly address this issue.

Clause 429 proposes to revoke the charitable status of “anti-abortion organizations Clause and clause 430 extends this policy to all religious organizations. "Clause 430 aims to prevent these organizations from obtaining charitable status and could have a massive impact on Canadian society," Benjamin Boivin, editor for Le Verbe, a Catholic media outlet based in Quebec, explained to Vatican News.

Churches sound the alarm

Charitable work in Canada carried out by religious institutions involves tens of thousands of associations, including parishes, mosques, and synagogues. "Until now, the government reimbursed part of the donations made by individuals to these organizations in order to encourage charitable activities within Canadian society," Benjamin Boivin said.

On February 21, Cardinal Frank Leo, Archbishop of Toronto, wrote a letter to Finance Minister Dominic Leblanc, voicing the Catholic Church’s concern remarking that religious charitable organizations strengthen the very fabric of our nation through their dedicated service, outreach efforts, and care for those in need. Cardinal Leo also condemned the proposal as "utterly deplorable and unacceptable," arguing that if pro-life and religious organizations were to lose their charitable status, it would go against Canada’s long-standing recognition of the irreplaceable role of faith, worship, and religion in society.

While the budget and Clauses 429 and 430 have yet to be adopted, religious institutions across the country are sounding the alarm. "The existence and ministry of religious communities benefit Canadian society far beyond their own members," stated The Evangelical Fellowship of Canada (EFC) in an open letter also sent to Minister Dominic Leblanc.

A damage for Canadian society

Indeed, the charitable impact of religious associations across Canada (which make up approximately 40% of the country’s 73,000 registered charities, according to the Canada Revenue Agency) extends beyond just the role of religion. According to a study published last December by the Cardus Research Centre, tax exemptions for Churches and religious organizations are highly beneficial to all Canadians, including the government itself. The study found that the value of contributions made by religious congregations to their communities is 10.5 times greater than the amount of tax exemptions they receive.